General Phoenix Metro Discussion Thread

[ASU Diablo]

Originally Posted by TakeFive

Very good point but "after 2021" is actually open-ended. In any case they seem to have a plan to exit downtown so I was curious how everybody felt about that.

Already being discussed in the PHX Development thread but what is the “plan”?

[nickw252]

Originally Posted by TakeFive

Very good point but "after 2021" is actually open-ended. In any case they seem to have a plan to exit downtown so I was curious how everybody felt about that.

I don't want the diamondbacks to leave downtown, but I don't believe it would be a huge issue if any of the professional sports teams left downtown - especially not now where we're hitting a critical mass of residents and other entertainment venues downtown.

Overall, I think the fiscal impacts are largely overstated. If any of the teams tried to hold the city, county, or state governments hostage over tax breaks, then good riddance. Go get someone else to build your stadium.

[Obadno]

Originally Posted by nickw252

I don't want the diamondbacks to leave downtown, but I don't believe it would be a huge issue if any of the professional sports teams left downtown - especially not now where we're hitting a critical mass of residents and other entertainment venues downtown.

Overall, I think the fiscal impacts are largely overstated. If any of the teams tried to hold the city, county, or state governments hostage over tax breaks, then good riddance. Go get someone else to build your stadium.

And moving out to Scottsdale essentially eliminates 1 million + west valley residents that are a big portion of the fan base as baseball is one of the more affordable sporting events to attend. It’s ocerall hard for me to imagine enough good money reason to leave chase

[stutteringpunk]

Originally Posted by Obadno

And moving out to Scottsdale essentially eliminates 1 million + west valley residents that are a big portion of the fan base as baseball is one of the more affordable sporting events to attend. It’s ocerall hard for me to imagine enough good money reason to leave chase

I don't think the Dbacks will leave downtown, but moving to Scottsdale would enable more East Valley residents to attend games regularly. Mesa, Gilbert and Chandler all have a greater population with younger families compared to the West side.

[combusean]

Everyone and their mother in LA or SF doesn't seem to have a problem traveling a great distance to Dodgers or Giants games--Giants pull in fans from San Jose, 50 miles away and Caltrain is no better than the light rail, especially for its crap frequencies, delays, and early last run.

I don't follow the Diamondbacks much but how many competitive players did they have a couple seasons ago? One, two? Business is hard--there are winners and losers. Except in professional sports, if you start losing and can't compete, the government will be there to help you out.

Moving a stadium 11 or 12 miles to get more fans seems misguided and a waste of money. If SRPMIC can afford $600 million for a new ballpark that they're competing with civic authorities, they have too much money and maybe the gaming compacts should be renegotiated.

[TakeFive]

Did some background work on the Diamondbacks

• In 2004 ownership changed for a reported $238 million. Today the value is estimated at $1.2 billion.
• Ideal size for today's ballpark ~40,000. Ideal season ticket holder base is 75% of capacity. I'm sure numbers vary but couldn't find data.
• Lowest attendance I recall at Chase is about 16,000 which would indicate the season ticket base. I'm sure they'd like at least 25,000
• If they could swing it, there's added value for owning your own site/improvements including control of additional revenue opportunities.
• It possible they are looking at additional mixed use opportunities

While it's apples to oranges and a few zeroes the example has merit. Stan Kroenke is privately funding the new Inglewood CA football stadium at a recently revised cost of $2.5 billion. A different asset group is funding construction of the surrounding mixed use development for another $2.5 billion. While I don't know particulars I'm sure that Inglewood kicked in some infrastructure improvements. It can be done.

[combusean]

The LA media market is a few times larger than Phoenix's, and there is no shortage of real money in California especially for real estate development.

The attendance for Chase Field there isn't that outside of average for all of baseball for 2018, a bit odd now that they're on top of the NL West. Maybe they'll have their numbers when there's a competitive product on the field, and all of the Scottsdale red herrings will swim away.

[TakeFive]

Originally Posted by combusean

The LA media market is a few times larger than Phoenix's, and there is no shortage of real money in California especially for real estate development.

The attendance for Chase Field there isn't that outside of average for all of baseball for 2018, a bit odd now that they're on top of the NL West. Maybe they'll have their numbers when there's a competitive product on the field, and all of the Scottsdale red herrings will swim away.

Yes, of course the numbers for Los Angeles are magnitudes higher.

Diamondback's attendance isn't the worst; last year it was 20th among 30 teams. They did get better numbers late from their success on the field. It is among the smaller market results. They are currently ranked 17th in 2018 but it's the summer where those numbers will make all the difference. Hopefully this year's attendance will be up. They've had an amazing start.

Having a winning team always helps but unless you're the Yankees or the Dodgers (by example) that will come and go over time for the rest of the league. I've never quite understood why the Diamondbacks season ticket base isn't better?

I can't speak to their financial ability or their thinking but my reading of the tea leaves is what is concerning.

[Obadno]

Originally Posted by TakeFive

Yes, of course the numbers for Los Angeles are magnitudes higher.

Diamondback's attendance isn't the worst; last year it was 20th among 30 teams. They did get better numbers late from their success on the field. It is among the smaller market results. They are currently ranked 17th in 2018 but it's the summer where those numbers will make all the difference. Hopefully this year's attendance will be up. They've had an amazing start.

Having a winning team always helps but unless you're the Yankees or the Dodgers (by example) that will come and go over time for the rest of the league. I've never quite understood why the Diamondbacks season ticket base isn't better?

I can't speak to their financial ability or their thinking but my reading of the tea leaves is what is concerning.

Its a problem with all new teams. Places with teams going back more than a century literally have a culture of going to the games and rooting fort the teams.

The diamondbacks just turned 20, so just now adults have been fans since they were kids, you cant expect reliable attendance (unless you are good) without a long passed down tradition of fandom.

[CrestedSaguaro]

Originally Posted by Obadno

Its a problem with all new teams. Places with teams going back more than a century literally have a culture of going to the games and rooting fort the teams.

The diamondbacks just turned 20, so just now adults have been fans since they were kids, you cant expect reliable attendance (unless you are good) without a long passed down tradition of fandom.

Even then, there are still some well established teams that still suffer from attendance when they have bad seasons. The Reds for example...the oldest pro team in history, have bad attendance when it comes to them having a bad season. I have seen been to games with barely around 14,000 in attendance on a weekend. Of course Cincinnati does not have a huge market when compared to a team like the Dodgers or Yankees though. So that plays into it.

But yea, MLB is fickle and if you can't deliver a good product, attendance is going to suffer if your team sucks. This happens in every major sport.

[Obadno]

http://azbex.com/decade-of-renter-continues-market-stability/

Still good news for more high rise development:

Numbers Don’t Lie

Year-over-year multifamily property sales have been robust. In the Phoenix area, sales of properties with 10 or more units increased 89 percent. Seventy-five transactions totaling $1.48B and making up nearly 9,800 units were reported.

Properties of more than 100 units fared even better, percentage-wise, increasing 101 percent year-over-year, a total of $1.37B, with an Average Price-Per-Unit increase of 57 percent, or nearly $160K.

The space between – 10-99-unit properties – increased slightly, up 8 percent to $106M, a 13 percent PPU increase.

Properties built before 1980 made up 63 percent of sales, with most of the properties planned for repositioning.

Construction

Year-over-year, new deliveries fell 9 percent, with a total of 1,630 units brought online in Q1. However, the report states, in 2018, “Developers are on track to deliver 9,000+ new units, the most since 2009’s 9,315 unit delivery high. Although planned unit construction decreased (7 percent) y-o-y, to 13,829, quarter-over-quarter registered a 15 percent increase as developers gradually increased their purchases of developable land.”


Occupancy & Rents

Phoenix Metro’s occupancy rate closed out the quarter at 94.7 percent, down 0.4 percent year-over-year. Average rents went up metro-wide to end with a year-over-year increase of 5.8 percent, of $1,040. Mesa rents increased 5.7 percent, Phoenix 5.4, Scottsdale 5.2, Glendale 4.9 and Tempe 4.7 percent. Average rents are highest in Scottsdale at $1,251.

[exit2lef]

I've long been skeptical of incentives or requirements for developers to add ground floor retail when there's already so much vacant space. Apparently, Local First Arizona is holding some sort of panel discussion on the issue:

https://www.localfirstaz.com/events/forum-groundfloor-retail

I'm glad to see LFA acknowleding the issue, because in recent interviews LFA founder Kimber Lanning has disparaged apartment complexes that have fitness centers on the ground floor. Criticism in the absence of proposed solutions isn't helpful, but maybe there will be some good ideas at this event.

[azsunsurfer]

I think this is one of those issues where the Cit(ies) need to sit down say "this street will have ground floor retail, these areas will not." That way they can create these activity corridors even if they may sit vacant in the short term. Then for other areas, it can be up to the developers. Most multi-family developers hate doing ground floor retail if it doesn't make sense. I agree that some developers half-a$$ it. Look at (whatever it's called now) Grigio at Apache and McClintock. Doesn't have great street presence despite being at a critical corner on a light rail stop and to be honest it looks like it doesn't have that much ceiling clearance for some restaurant uses who otherwise may lease that space.

[nickw252]

The amount of speculative office space underway around Phoenix has more than doubled during the past year.

We reported this week more than 1.5 million square feet of spec office space is underway, with 2.2 million to be finished this year.

That’s a big shift from recent years when it seemed the only commercial projects going up were apartments and condominiums. The main reason for the rise in spec space: vacancy rate.

For years, the office vacancy rate across metro Phoenix has remained stubbornly high. But space steadily has been scooped up, lowering the rate to around 15 percent, which has triggered the increase in spec construction.

Of course, it’s hard to speculate (heh) how long the bump in spec construction will last, though with the healthy economy, it likely will stretch on for the foreseeable future.

https://www.bizjournals.com/phoenix/news/2018/05/07/spec-building-is-back.html

We're already seeing this with the Grand development in Tempe and the proposed office development beside the Cubs' spring training facility. Hopefully spec office towers are next.

[CrestedSaguaro]

Originally Posted by nickw252

https://www.bizjournals.com/phoenix/news/2018/05/07/spec-building-is-back.html

We're already seeing this with the Grand development in Tempe and the proposed office development beside the Cubs' spring training facility. Hopefully spec office towers are next.

Sure would be nice to spec a little more height to the office portion of Block 23. Wishful thinking I know

[combusean]

Originally Posted by TakeFive

I've never quite understood why the Diamondbacks season ticket base isn't better?

There aren't that many people in Phoenix who
1) have money
2) can revolve their schedule around the 81 home games that often happen during the day or other weekend events
3) love Diamondbacks baseball that much

or

4) have enough money that buying season tickets and never showing up is inconsequential.

[combusean]

And the spec office and apartment boom reeks of bubble.

[fawd]

Originally Posted by combusean

There aren't that many people in Phoenix who
1) have money
2) can revolve their schedule around the 81 home games that often happen during the day or other weekend events
3) love Diamondbacks baseball that much

or

4) have enough money that buying season tickets and never showing up is inconsequential.

Not many people in Phoenix whom have money?

Majority of Diamondbacks season tickets are held by: Ticket brokers, corporate sponsors, & trade partners. This is the case for most pro-sports franchises.


1) Chase Field is too big, and it hurts the game experience when not adequately filled. Jerry Collangelo considers Chase Field's size his biggest regret when he was owner.
2) Phoenix is made up of subplants. People who grew up watching baseball in the outdoors during the afternoon. Chase Field does not give fans that 'traditional' or 'nostalgic' fan experience.
- worth noting that summer heat is one of, if not the primary reason why Phoenix is struggling getting a MLS franchise.
3) and finally... the lack of attendance is simply fatigue... Phoenix is sports/event mecca. Cardinals, Dbacks, Coyotes, Suns, Rising, ASU Football, ASU Basketball, GCU Basketball, Fiesta Bowl, Cactus Bowl, Barrett Jackson, NASCAR Spring, NASCAR Fall, Waste Management Open, Cactus League Spring Training, Rattlers, Mercury, NHRA Drag Racing.. then sprinkle in NCAA Football Championship, Final Four, Super Bowl and just about every concert/music festival imaginable.

The November - March period is one gigantic party in this town!

[combusean]

I meant 1 2 3 as in all taken together. I didn't necessarily mean that Phoenicians didn't have money (although it has fewer hordes of yacht club SF/LA types), it's that at the end of the day, most people have to work and can't skip out for a baseball game.

Tho I find it curious that attendance peaked in 2008. The trends seem like a huge chunk of the sports fans that got to love the Dbacks in 1998 - 2007 all had to flee for greener pastures so what's left is a core contingent of fans.

The transplant effect is pretty real:

https://www.baseball-reference.com/teams/ARI/2017-schedule-scores.shtml

watch it drop and spike depending on who they're playing and how outside the 9 - 5 a game is.

I'm led to believe these throngs of people commuting on the light rail from office jobs in Tempe to their apartments in Central Phoenix will begin to bring up the numbers for weekday evening games... who knows. The July and August doldrums could be solved with tree and shade infrastructure, but Phoenix is barely getting that over the last, what, 12 years?

[Obadno]

Originally Posted by combusean

And the spec office and apartment boom reeks of bubble.

IN what way? vacancies are down, population and rents are up, unemployment down, wage growth is up.

Seems like demand too me