Phoenix Development News (3)

[combusean]

We have a microhousing project downtown--it's full of tweakers and is basically a massive halfway house.

I'm not looking forward to The Derby for the same reasons, and the fact that it's furnished suggests it will attract a really low end element to downtown, altho maybe that might actually be a good thing to prevent its complete gentrification.

[Jjs5056]

Originally Posted by combusean

We have a microhousing project downtown--it's full of tweakers and is basically a massive halfway house.

I'm not looking forward to The Derby for the same reasons, and the fact that it's furnished suggests it will attract a really low end element to downtown, altho maybe that might actually be a good thing to prevent its complete gentrification.

Few questions:
1. Are there multiple micro-housing projects in that downtown?
2. Are there multiple Universities in the immediate vicinity with as little student housing available as in Phoenix with ASU/UA/NAU?
3. Is there a large "middle class" segment of housing available? IOW, options in between micro-housing and luxury apartments?
4. What is the average size of a unit and how does its price per square foot compare to other apartment options?
5. Are these units new, and who was the developer?

^ Those aren't meant to challenge you. My thought process is that there downtown Phoenix is filling up with luxury apartment options, but there really is nothing for someone who isn't going to be able to/or want to shell out $1,300+ for a 1-bedroom apartment. There are also very few options for students- Taylor Place for freshmen (and sophs?) and then only Roosevelt Point, which again is not cheap.

As the first micro-housing project, Transwestern - a high quality developer - gets to set the standard. 400 square feet is actually rather large for something to be considered a micro-unit, and the fact that there are still your typical suite of amenities being offered suggests that the aim here is not to cater to a low-income bracket, but to students and professionals. Look at the pricing for the Containers on Grand. They are outrageous, but as the first-to-market in both the container AND Grand Ave markets, the demand still supports a high price point - but one that is just under what all these luxury options are charging to make the sacrifice of square footage, etc. worth it.

If several other micro-housing projects were to come on board, I think the prices would slowly drop and at the same time, these former luxury apartments will have aged and dropped to become more affordable, making them certainly the most obvious projects to become a bit "slummy."

Do you think that theory has any merit? Like I said, I would never pay the prices being asked in these downtown projects even though I could have afforded it. But, a 400 square foot unit a $800 or so and I would be first in line. There have to be others in a similar boat, or maybe I was just really cheap? I may also be underestimating the impact of the furnished component. I'd live there, but only the first year of leasing.

[Jjs5056]

Also, can you expand on why these new apartments will cause gentrification of Roosevelt Row and what the impacts would be potentially? I don't understand how it works in general, let alone specifically to a neighborhood like RR. I would be able to make sense of it, I think, if blocks of affordable housing stock were being destroyed for these new, more expensive projects. But, that isn't the case: I don't believe any actual housing has been displaced during this boom, and so all of the artists who contribute to the scene in that area already live elsewhere. I also get the impression that many of the artists on Roosevelt Row are actually fairly successful, and so providing them with an option to now live closer to where they work or own a business seems like it can only be a good thing?

Maybe I just don't understand who the artists of Roosevelt Row are, how many of them exist, and what their needs are, but for those that aren't gallery owners, won't projects like the Roosevelt Row Authority (or something)'s live/work containers next to Modified Arts, and The Oscar help give them options that don't exist now? Is there that much more demand for that lower-income earning artist segment? And, for the wealthier artist, enHance, 540 Roosevelt, and Proxy should offer live/work opportunities that are appealing.

And, if you assume that the rest of the residents who fill these apartments are higher-income people who want to live in an arts district, wouldn't the impact be pretty positive? More people who can actually purchase the art on First Friday instead of take selfies next to it? More people to brunch at Bliss? Who appreciate Jazz at the Nash?

I suppose the businesses at risk would be the ones on 6th and 5th Streets maybe... since their clientele seem to be ones who, like me, would go for a place just under 1,000/month which doesn't seem to be in the pipeline. But, it looks like this group is finding options nearby in Garfield, etc. and should be able to continue to support these businesses.

I think Roosevelt Row's mix of businesses will stay fairly consistent, with some more higher-end retail perhaps coming online: boutiques, higher-class galleries, maybe music schools or something if these residents end up bringing any kids into the 'hood? I think there will also be more restaurants, which is a good thing, IMO, even if they are a bit yuppie. It isn't as if there are many grungy food options available now.

[azsunsurfer]

Originally Posted by biggus diggus

I want you to be correct and Asian surfer to be wrong, just would rather see coyotes move downtown out of selfish reasons.

I'm not Asian!!! Not that there's anything wrong with that but my name is AZ as in Arizona lol

[PHXFlyer11]

So a thought occurred to me the morning. Actually, I've been thinking about it for awhile but now these seems to effect multiple projects...

Are existing power lines running through lots slowing construction on some projects?

For example, Edison graded their lot several months ago and appeared ready to go, except for about 4 power lines that ran through the middle of the lot that would prevent any real construction. Finally a couple weeks ago, it looked like some of the lines were removed, but there's still at least on that would prevent construction.

The same goes for the project at 3rd St. and Thomas. As much progress as possible has taken place, but nothing else can happen until the line that bisects the lot is removed.

Are the slow progress on these projects actually a result of the city and utility company's delay in relocating the lines?

Furthermore, could this be what has taken Union to a virtual halt?

[phoenixheadphones]

That could be - I've noticed the same phenomenon with the existing power lines.

For what it's worth- I ride the train by Union every morning, and there are always workers on the project. But it is moving oddly slow, at least compared to the others in the area.

[combusean]

Originally Posted by Jjs5056

Few questions:
1. Are there multiple micro-housing projects in that downtown?
2. Are there multiple Universities in the immediate vicinity with as little student housing available as in Phoenix with ASU/UA/NAU?
3. Is there a large "middle class" segment of housing available? IOW, options in between micro-housing and luxury apartments?
4. What is the average size of a unit and how does its price per square foot compare to other apartment options?
5. Are these units new, and who was the developer?

^ Those aren't meant to challenge you. My thought process is that there downtown Phoenix is filling up with luxury apartment options, but there really is nothing for someone who isn't going to be able to/or want to shell out $1,300+ for a 1-bedroom apartment. There are also very few options for students- Taylor Place for freshmen (and sophs?) and then only Roosevelt Point, which again is not cheap.

1. Campaige Place on 209 W Jackson:

https://showmetherent.rentlinx.com/209-West-Jackson-Street-Phoenix-AZ-85003

There are a number of studio only complexes like the ones on 3rd Ave and Fillmore or 5th Ave Court.

2. I'm not sure what the point of this question is, as Derby is not a student housing tower and there's no plans by anyone to build any more student housing downtown.

3. There's an existing stock of apartments that don't charge nearly that much, mostly south of West Roosevelt.

4. See above.

5. No, 2003.

As the first micro-housing project, Transwestern - a high quality developer - gets to set the standard. 400 square feet is actually rather large for something to be considered a micro-unit, and the fact that there are still your typical suite of amenities being offered suggests that the aim here is not to cater to a low-income bracket, but to students and professionals. Look at the pricing for the Containers on Grand. They are outrageous, but as the first-to-market in both the container AND Grand Ave markets, the demand still supports a high price point - but one that is just under what all these luxury options are charging to make the sacrifice of square footage, etc. worth it.

I just don't see the demand for oodles of small, furnished units with limited parking. This isn't San Francisco. Maybe if the Derby was being built amidst a more complete downtown where people without cars was more common and not for the very poor, I would see it.

If several other micro-housing projects were to come on board, I think the prices would slowly drop and at the same time, these former luxury apartments will have aged and dropped to become more affordable, making them certainly the most obvious projects to become a bit "slummy."

You're talking on the timeframe of decades. I can't speculate that far in the future.

Do you think that theory has any merit? Like I said, I would never pay the prices being asked in these downtown projects even though I could have afforded it. But, a 400 square foot unit a $800 or so and I would be first in line. There have to be others in a similar boat, or maybe I was just really cheap? I may also be underestimating the impact of the furnished component. I'd live there, but only the first year of leasing.

You say $800, when woodframe units with cheaper construction have about the same square footage price. I think it will be much higher than $800.

[Jjs5056]

PHXFLYER11: Yes, the power lines absolutely have an impact on construction. For The Union, this was one of the reasons why initial construction took so long to begin; however, those problems were resolved before the project broke ground, so unless it was a really complex challenge, I wouldn't think that it would now also be halting construction/slowing it down.

COMBUSEAN:
1. I meant in the downtown you are comparing Phoenix to. Obviously, in a market where there are 5 microhousing projects, prices will be cheaper. Campaige Place is SRO, so I'm not sure how that is a comparable?
2. Transwestern and COP both stated that this project is intended to attract students of nearby Universities; this was used to justify the parking reduction and as a reason for why there would be demand for a smaller unit in the first place.

And, yes, $800 is just a guess... if you think they will be charging more, how the hell are you qualifying it as low-end project that will attract tweakers and serve as a half-way house? I don't know many drug addicts willing or wanting to spend over a grand on housing.

[biggus diggus]

Did they tear down the murder house on 2nd North of Thomas? I drove by there today and couldn't see it.

[PHX31]

No. That remains. Everything else is gone.

[PHXFlyer11]

http://www.bizjournals.com/phoenix/news/2016/02/01/phoenix-selling-downtown-sheraton-for-300m.html

Hmm... this seems to coincide with the upcoming coyotes announcement. Could ESPN be wrong about the Coyotes in Tempe?

[combusean]

^ Blech.

That's a $50 million loss on construction costs, plus its already accrued losses, plus interest on the bonds that will continue to accrue.

So while downtown might get a new arena, the "downtown" account in Phoenix's budget will massively suffer for a few decades until it's paid off. So this will effectively kill street improvements as far as I can tell and other public benefits for the foreseeable future.

And the funny thing is Phoenix banned publicly financed sports facilities unless put to a vote, and this sale completely circumvents this process. There was consternation of whether the hotel was legally constructed in the beginning anyways, yet Phoenix's lawyers argued that the convention hotel wasn't a "convention facility."

If a deal is made, the law says it should go to a public vote, and I'm not hearing about public votes yet.

Reference from the city charter:

CHAPTER XXVII. VOTER APPROVAL FOR CERTAIN PUBLIC EXPENDITURES; LIMITATION ON EMERGENCY CLAUSE1

A. Notwithstanding any other provision of the charter of the City of Phoenix, the City shall not expend public funds, grant tax concessions or relief, or incur any form of debt in an amount greater than three million dollars, and/or exchange or grant City-owned land of a fair market value of three million dollars to construct or aid in the construction of any amphitheater, sports complex or arena, stadium, convention facility or arena without approval of the majority of the electorate voting thereon at the next general election.

B. Notwithstanding any other provision of the Charter of the City of Phoenix, the Council shall not enact with an emergency clause any ordinance providing for any expenditure in excess of three million dollars in connection with any construction or development of any project involving non-essential City services.

C. The following definitions shall be used in this chapter:

1. "Expenditures" means any direct or indirect payment of money, the granting of tax concessions or relief, or the incurring of any form of debt.

2. "Emergency clause" means any provision that has the effect of causing an ordinance to become effective immediately or that denies or limits, in any way, the right to refer an ordinance to the ballot.

3. "Non-essential City services" means all services other than those set forth in paragraph D. below.

D. The provisions of this chapter do not apply to any ordinance providing for expenditures, including capital expenditures and debt service in connection with aviation, courts, fire, police, public transit, solid waste, streets, streetscapes, parking, wastewater, water, public utilities, stormwater, environmental safety, risk management, insurance and self-insurance, public health or safety, public housing, equipment maintenance, parks, recreation and libraries.

Expect this thing to have a very long and drawn out story attached to it.

[Jjs5056]

Well, the new owner of the Sheraton has plans for $20 million in upgrades according to PBJ; updates to the meeting space and guest rooms mainly. The article mentions a change in flag possibly, but I can't see what the benefit of that would be; AFAIK, Sheraton Grand is one of the top tier brands under Starwood, and I can't see an owner wanting to downgrade his brand... something like the W may be seen as an equal, but hits a totally different market.

It's too bad that with so many different economic vehicles in the city (GPEC, ACA, DPP, etc.), there's nobody with the interest in bringing owners of various properties together to plan their renovations as one collaborative effort. AZ Center just sold across the street and ASU just completed its Law School on the west side. Why not get these stakeholders together to see if any ideas would help the bottom line of all entities? For example, Starwood might have, or could issue, a survey of its guests on the amenities they desire most... that could be used to draft ideas for a retail makeover across 3rd Street.

I'd, shockingly, like to see the massive 3rd Street frontage broken up; considering the amount of amenities Starwood is trying to pack into this brand, the Phoenix site is really underwhelming. Other hotels are introducing new dining options that are reflective of the local culture/scene, which is something that is perfect for the meetings market. Others have full-service spas and a new, high-class fitness center partnership. At the very least, it'd be nice for there to be defined entrances/signage for the Link@Sheraton, Link Cafe, and Park Lounge - even a combined entrance with signage for all three. I don't get why hotels keep their amenities so exclusive.

It also would've been nice if the Link@Sheraton and FedEx had been placed along 2nd Street and maybe had an ASU theme, or at least serve as a quick resource for students.

[dtnphx]

$10 million in upgrades.

http://www.bizjournals.com/phoenix/news/...sheraton-buyer-planning-10m-upgrade.html

[dtnphx]

$57M Downtown Phoenix apartments to open in February

Two Phoenix apartment complexes near Washington and 12th Streets will have a public grand opening on Feb. 25. Phoenix Mayor Greg Stanton will commemorate the grand opening of Capital Place, a $57 million 292-unit apartment complex.

http://azbigmedia.com/azre-magazine/new-...n-phoenix-apartments-to-open-in-february

[azsunsurfer]

The Wood Partners are planning another "Alta" concept for the southeast corner of Camelback and 7th St. "Alta Camelback" rendering at the AZ Builder's Exchange site.

[combusean]

Here's the news story for Alta Camelback:

http://azbex.com/7th-st-camelback-apartments-planned/

Here's the planning doc

https://www.phoenix.gov/pddsite/Documents/Z-39-15n.pdf

[biggus diggus]

That's a gutsy play in that neighborhood, but I think Wood has the ability to pull it off and it will eventually help that area transition. There are a couple of developments in the works a few blocks south of this location that have the possibility of happening as well, if these all come to fruition then the neighborhood will change dramatically from its current state of high-crime and derelict population.

[PhxSprawler]

Originally Posted by biggus diggus

That's a gutsy play in that neighborhood, but I think Wood has the ability to pull it off and it will eventually help that area transition. There are a couple of developments in the works a few blocks south of this location that have the possibility of happening as well, if these all come to fruition then the neighborhood will change dramatically from its current state of high-crime and derelict population.

I must be thinking of a different Camelback/7th Street. To me, that area seems seems ritzy compared to any of their other locations when they began.

[ASUSunDevil]

Originally Posted by PhxSprawler

I must be thinking of a different Camelback/7th Street. To me, that area seems seems ritzy compared to any of their other locations when they began.

Agree. I can't think of a parcel with less risk for a 4 story apartment complex.