^Hopefully, as suggested in this article from a year ago, the new owners of the Pioneer will restore the outer facade of the historic building:
current facade:
original facade:
Pioneer may lead the way
Profitable sale of building may augur well for Downtown, Rio Nuevo project
By Joseph Barrios
ARIZONA DAILY STAR
1.011.2005
The former Pioneer Hotel building, an 11-story office tower in the heart of Downtown, sold last month for $7.8 million, almost $6 million more than its sale price in 1998.
Sandy Alter of buyer Holualoa Cos. thinks the building is a Downtown gem sitting in the middle of the coming Rio Nuevo revitalization. Once Downtown's most prominent hotel, the Pioneer burned in 1970, killing 28 people. It went through waves of renovation before and after the fire.
The purchase price for the Pioneer, at 100 N. Stone Ave., is $5.75 million more than the $2.05 million that Texas-based Cummings-Baccus Interests paid six years ago when it bought the Pioneer from John Hancock Mutual Life Insurance Co.
The building's appreciation may be a positive sign for Downtown in its attempt at revitalization, but other factors also determined the price.
Cummings-Baccus invested millions in the building, refurbishing the lobby and many of the suites inside, said Alter, Holualoa's asset manager. The building wasn't up for sale early this year when Alter took a tour of Downtown. She remembers walking into the lobby, buzzing with people at Ike's coffee shop and adjacent sandwich stand, called Rachel's Downtown Market, and being impressed.
"It wasn't for sale then. The first thing I noticed was ease of parking and access to the building," Alter said. "Just walking into the lobby, seeing a line at Rachel's to buy things at her stand, seeing the energy and the synergy in a building that had clearly been renovated . . . it was just really neat."
Alter arranged the deal through Downtown real estate broker Buzz Isaacson, himself a tenant in the Pioneer. A few weeks after the first inquiry, representatives of Cummings-Baccus said they might be interested in selling.
Ross Cummings of the Texas company declined to comment on why it sold.
"It was just a good fit. I think it's simple," he said.
Cummings did say that when his company acquired the building in 1998, occupancy was below 50 percent. Now it's about 93 percent occupied.
Isaacson said the Downtown real estate market is not a good place for speculators wanting to make a quick buck. It's really a place for investors with long-term interests.
"We haven't built a big building in a long time. We get those calls (from speculators) once in a while. Quite frankly, I think they're too late," Isaacson said. "It's a very efficient market, and there's very little on the market."
Nevertheless, Rio Nuevo projects including new housing, demolition of a parking garage, the construction of another and renovation of the Fox Theatre are catching the attention of investors, Alter said. For evidence, she need look no farther than right next door.
Tucsonans Tom Warne and Don Semro just bought the Compass Bank building at 120 N. Stone Ave. for $1.15 million. Warne said Compass Bank is the only tenant in the two-story building, which also has a basement. Plans are to refurbish space there and make it available to new tenants.
Warne forecasts increasing interest from the private sector because organizers of the Rio Nuevo redevelopment project think more tax dollars than the predicted $120 million will flow into Downtown to help pay for projects. Rio Nuevo is funded with a portion of state sales tax revenue collected in a swath of Tucson, including Downtown.
"Things are happening and are going to happen. There's going to be a lot more investment going on. I think that's going to leverage up in the private sector," Warne said.
For the Pioneer building, Alter said her company is considering removing a metal frame added to the top of the building in the 1970s. The goal is to restore its historic appearance.
The Pioneer Hotel, which opened in 1929, helped give Tucson a skyline. In its heyday, it was known as the premier hotel in Tucson and catered to the business elite.
After the fire, developer Allan Elias converted the building to offices with extensive remodeling and facade work in 1977. Later, John Hancock Mutual Life spent $1.3 million renovating the building, including hallways and other common areas.