Phoenix Tells Developer City Not Ready For Downtown Concept

Published: Thursday, April 5, 2018 - 2:17pm
Updated: Thursday, April 5, 2018 - 2:20pm
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(Photo by Christina Estes -KJZZ)
Attorney Nick Woods speaks to a city subcommittee on behalf of a developer.

STEVE GOLDSTEIN: Four months ago, when the Phoenix City Council created a new policy for unsolicited development proposals, it was meant to encourage private sector innovation. But, the first developer to come forward — with a concept to create a downtown arts and entertainment district has basically been told: Not so fast. KJZZ’s Christina Estes attended yesterday’s Downtown Subcommittee and joins me now. Christina, the proposal received a mixed reaction?

CHRISTINA ESTES: It did. Here’s what I heard from the three council members on the subcommittee: We’re excited about the idea, but we’re not ready to move. And, we don’t yet know when we’ll be ready because we have some concerns.

GOLDSTEIN: Before we get to those concerns and the proposal itself, can you first explain the new unsolicited development policy? What makes it different?

ESTES: The policy involves city-owned parcels. Typically, if the city wants to sell property it owns, it would issue a request for proposals, what’s called an RFP and companies would then submit their proposals.

This new policy allows developers to come forward first — they don’t’ have to wait for the city to put out a call. They can submit unsolicited proposals for city-owned property.

GOLDSTEIN: So what city-owned parcels are we talking about in this case? And where exactly are they?

ESTES: We’re talking some big properties along 3rd Street from Van Buren — that’s where the Sheraton Grand Hotel is — to 3rd Street and Jefferson. That’s where the Talking Stick Resort Arena is located.

The city –owned parcels include the Phoenix Convention Center’s South Building. That building was recently appraised at $37 million. The proposal also involves undeveloped land east and south of the Herberger Theater…that land was appraised at more than 2 and a half million. And the last part calls for narrowing 3rd Street between the convention center’s west and north buildings.

GOLDSTEIN: What’s the vision for the area and who’s behind it?

ESTES: The developer is Hines, a Houston-based company that does business in Phoenix and all around the world. Hines proposes what it calls a "pedestrian-friendly experience" along 3rd Street, which includes narrowing a stretch of 3rd Street, adding space for a Latino Cultural Center and Valley Youth Theatre, and redeveloping the convention center’s south building with a mix of residential, commercial, retail and open space.

GOLDSTEIN: If they redeveloped the convention center’s south building what would happen to the events that take place there?

ESTES: That’s what Councilman Michael Nowakowski wants to know. He said the city generates $2 million a year from the south building and wonders about the impact to the entire convention center.

“This is the last piece of property that really the city of Phoenix owns in the whole city block and we need to make sure that we’re good stewards of whatever we’re going to do in the future," Nowakowski said. "We need to make sure that if we’re going to try to attract some of those big conventions that we have the space to attract them.” 

ESTES: Another big concern is traffic. Vice Mayor Thelda Williams worries about how cars will get around.

“If you think the people up north or down south don’t want to try their car to downtown, you’re wrong," Williams said. "We’ve got to have vehicle access and mobility and police have to be involved on how to disperse traffic in case there’s an emergency or something tragic would happen down here and none of that’s in place.” 

GOLDSTEIN: But, we’ve talked a lot about how the city wants the downtown area to be pedestrian and public transit oriented, right?

ESTES: We have, and that was another point Williams made. She said there have been a lot of recommendations over the years from various citizen groups and the council has enacted policies based on those recommendations. The problem, she says, is if you take all those plans and lay them over a map of downtown, she says there’s no room for cars— and the city needs to address that.

GOLDSTEIN: And Christina, since you are I are talking, of cource I have to ask you a sports-related question. What about the Talking Stick Resort Arena where the Suns and Mercury play? Was that discussed?

ESTES: Kind of. During public comment, two residents expressed skepticism. They came across like they felt this was somehow about the arena. That’s a touchy subject because the city and the Phoenix Suns, who manage the arena, have been negotiating for many months over the arena’s future and the public and private costs of renovating or possibly building new.

GOLDSTEIN: But, you’re saying the arena is not directly tied into this 3rd Street proposal?

ESTES: That’s what the attorney representing the developer told me. His words were "absolutely no arena."

GOLDSTEIN: So, the subcommittee expressed concerns but also encouragement? They didn’t kill this idea?

ESTES: No. It’s still alive. In fact, staff plans to research the traffic and convention center issues. The attorney representing the developer asked to return next month. Nick Woods told the subcommittee time is money.

“You know, material costs, labor costs, interest rates, they’re all going up," Woods said. "And what’s happening with tariff wars right now affects building and development.” 

Councilman Daniel Valenzuela said the developer is playing within the boundaries and wants to see movement sooner rather than later.

“There’s an opportunity, somebody is bidding on it, doing it legally and now the city is in a position where we’re saying, wait, timeout, we’re going a little too fast, but that’s how the private sector works and we have to be ready for that," Valenzuela said.

GOLDSTEIN: So, what’s the next step?

ESTES: No date has been set on when the issue might return to the subcommittee, but a safe estimate is probably this fall.

GOLDSTEIN: KJZZ’s Christina Estes, thank you.

ESTES: You're welcome.

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