Arizona State University is looking to give its aging sports arenas a face lift, and the school is taking a unique approach to come up with the necessary funds for the expansion and renovations. The university plans to convert an area of its Tempe campus into a fee-generating commercial and residential development.
ASU and master developer Catellus Development Corporation have come up with a preliminary development plan for 330 acres, area bound by “A” Mountain, McClintock and University drives, and Tempe Town Lake.
The plan includes upgraded ASU athletic facilities and 150 net acres for new private development, which will bea mix of commercial office space, retail stores, restaurants, hotels and urban housing. At full build-out the district’s new private development is projected to encompass more than seven million square feet.
“The overarching intent to create a revenue stream to fund the renovation of Sun Devil Stadium and in the future other athletic venues at ASU,” said Brian Kearny, senior development manager at Catellus.
Originating from legislation passed by the state legislature in 2010 to create special revenue districts on land owned by state-supported universities, the district will provide financial returns to the university. The 2010 legislation cleared the pathway for an athletic district impose an fee in lieu of property taxes, said John Creer assistant vice president for real estate development at ASU. This revenue stream will help fund the renovation of athletic facilities without the use of tax dollars. ASU is the first state university to act on this opportunity.
The athletic district will grow in several phases and phase one has already begun with renovations of Sun Devil Stadium. The upgrades of the other ASU athletic facilities will happen over time as funding from the district’s private development program and other sources permit. ASU anticipates that private development in the district will break ground by late 2016.
The existing athletic facilities will be relocated and renovated as the market dictates how to develop the land underneath them, Creer said, the goal of the district is to improve and expand ASU’s athletic facilities.
The Northwest corner of Rural Road and University Drive is expected to be one of the first areas for the to break ground, involving a mid- to high-rise office tower, because there are no existing venues and a high market demand at this location, Kearney said.
A major location of this development plan is the intersection of Rio Salado Parkway and Rural Road, where ASU controls three of the four corners, and Sunbelt Holdings— a Marina Heights development partner — holds the remaining northwest corner.
The district will offer a unique combination of area amenities for its future tenants. The location is adjacent to downtown Tempe, an urban lake, a large public research institution and some of the Valley’s top destinations such as the Mill Avenue District and Tempe Marketplace. Additionally, the development offers accessible transportation with great proximity to freeways and the light rail. The district will add to vitality and economic engine that already exists in the area from these amenities.
