Plans for Cityscape in Downtown Phoenix
In four days, the $900 million CityScape development in downtown Phoenix will celebrate its grand opening.
RED Development spent five years transforming the idea for an urban office, retail and restaurant site into concrete and steel on two blocks sandwiched by Washington and Jefferson streets, First Avenue and Second Street.
One by one, stores and restaurants have been opening.
The first tenants included Gold's
Gym, CVS/pharmacy, Lucky Strike bowling lanes, Par Exsalonce salon an
d
spa, Five Guys Burgers and Fries, plus the Designer District and West of SoHo
clothing stores. Openings for 15 other restaurants and stores are scheduled
through the coming months, including clothing retailer Urban Outfitters on
Thursday.
The development also signed new office tenants, including law firms Squire Sanders and Dempsey, and Jennings Strouss & Salmon. Also moving in are law firms Ballard Spahr, Gust Rosenfeld and Polsinelli Shughart.
According to RED Development:
- 85 percent of its leasable 560,000 square feet of office space has been filled.
- 96 percent of its 180,000 square feet of retail space has been rented.
CityScape's capstone is the 250-room Hotel Palomar, a 34-story boutique hotel expected to be under construction until mid- to late 2011. It will be managed by Kimpton Hotels.
The development has drawn a mix of praise and criticism from residents, city officials and downtown business leaders. Some consider it an optimistic symbol in a grim economy because RED has continued to build it and add tenants despite the recession. They appreciate the additional revenues CityScape will drum up.
But critics fear the project will boom, then bust.
Jeff Moloznik, RED's development manager, has heard some of the concerns, including one raised by a few members of downtown community groups who worry the project could become another Arizona Center, an outdoor mall at Third and Van Buren streets. It was considered a hot spot when it opened 20 years ago but has struggled to keep a full house of stores and restaurants in recent years.
"I think what separates CityScape from Arizona Center is that when you do take the wrapping paper off and our tenants are open, people will really see an engaged street front," Moloznik said. "If you want to have retail on this site, it has to be facing the street."
CityScape is closer than Arizona Center to the heart of downtown.
It is near the Renaissance Square office high-rise, Phelps Dodge, Wells Fargo, Phoenix City Hall, Maricopa County offices and US Airways Center.
"This is the densest place in all of the Valley," Moloznik said. "That didn't exist around or near Arizona Center."
The city is counting on the new development to boost sales-tax revenues.
Elliott D. Pollack & Co. prepared an economic and fiscal-impact analysis of the project in June 2006. It showed CityScape retail sales could generate up to $73.8 million in revenue for the development's two blocks once they are built out. This could provide about $2.2 million in annual sales taxes.
In addition, CityScape's office leases, once all spaces are filled, are projected to hit $24.3 million in revenues per year and generate about $722,000 in taxes.
The hotel would bring in $7.7 million a year with $461,900 in taxes, the analysis said.
Posted at 03:39PM Nov 08, 2010 by Louisa Ward & Robyn Viktor in General | Comments[0]
