One of the classic shopping centers of Phoenix is now in line for a substantial upgrading. Located at 9617 N. Metro Parkway, the modernistic Metrocenter was designed by well-known Arizona architect Robert Fairburn and opened in the fall of 1973. For decades, the 1.4 million square foot mall was one of the most popular shopping centers in the southwest but began to lose out to competition from other malls by the 1990s. It finally closed completely in the summer of 2020. Now members of the Phoenix City Council have given their approval to a plan that will substantially redevelop the site, seeing the construction of up to 100,000 square feet of new retail space. In a unique arrangement, the City of Phoenix has agreed to purchase the mall’s site in a move that will make it possible for mall owners Concord Wilshire Capital to not have to pay property taxes for the next 25 years. At the same time, Concord Wilshire is giving Phoenix up to $1.5 million to be used for the construction of affordable multifamily housing at the site. It is thought that the project will also see the construction of an amphitheater park. Altogether, the redevelopment of the famous mall is expected to cost upwards of $750 million over a three-phase period. Concord Wilshire is undertaking the project in a partnership with TLG Investment Partners, which is based in Fort Lauderdale, and the Houston-based global real estate investment firm Hines. Work on the Metrocenter project is expected to launch next year. By Garry Boulard
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A move is on in Colorado Springs to secure the construction of an advanced semiconductor manufacturing plant. The effort, currently known only as Project Garnet, is being conducted somewhat in secrecy in terms of revealing the company involved. But city, El Paso County, and State of Colorado economic development officials have been involved in a protracted process of putting together an attractive incentives package in the hope of securing the plant. To date, Colorado Springs and El Paso County have pledged a combined $111 million for the project. Now, members of the Colorado Economic Development Commission have added another nearly $4 million in incentives for the project. According to published sources, the project would bring with it a potential capital investment of $631 million initially, growing to more than $1 billion during its phase two development. The project, according to local economic development officials, may be eligible for federal funding via the Chips Act, otherwise known as the Creating Helpful Incentives to Produce Semiconductors and Science, which was signed into law last summer by President Biden. While speculation has only naturally been heightened regarding the identity of the company, state officials, according to the Colorado Springs Gazette, have described it as a “world leader in electronic materials and process solutions for the semiconductor, life sciences, and other high-tech industries.” A timeline for when Project Garnet may be officially announced is not yet known. By Garry Boulard The prices paid by builders for a variety of steel products saw significant declines last month, according to new numbers released by the Bureau of Labor Statistics and crunched by the Associated General Contractors of America. Those numbers show that the Producer Price Index for steel mill products was down by 6.6% in October compared with September. The decline from October of 2021 to October of this year was even more dramatic at 22.9%. Copper and brass mill shapes, meanwhile, saw a 4.9% drop between September and October of this year, with an 11.5% drop year over year. Aluminum mill shapes, similarly, were down 3.3% in the last month, and 9.3% between October 2021 and this most recent October. In taking a larger look at Producer Price Index trends, the BLS noted that “prices for diesel fuel, fresh and dry vegetables, residential electric power, chicken eggs, and oil field and gas field machinery also advanced.” Trend lines for other construction materials showed a 3.3% decline in lumber and plywood products, and a large 9.3% drop over October of 2021. Those numbers follow on the heels of double-digit increases in lumber and plywood products throughout most of 2021. Despite the decline in the price of individual materials, the BLS numbers showed that the price contractors say they would bid on any given project was up by 3% from September to October of this year, and significantly up by 20.2% over October of 2021. By Garry Boulard A space just to the southeast of one the oldest and most-used public parks in Flagstaff may see the construction of a skate rink, dog play area, and indoor basketball courts. Additional ideas: an open air market, amphitheater, and athletic courts and fields. The ideas come as part of an ongoing public input process centered on updating the 8.5-acre Thorpe Park annex, space that since the 1950s has been used as a public works yard. Located at the corner of N. Bonito Street and W. Dale Avenue on the west side of downtown Flagstaff, the space became the subject of public comment once the City of Flagstaff moved the public works yard to another location and demolished several structures at the site. That input process earlier this year saw more than 1,000 residents taking part in a community survey asking for ideas on how the annex space should look in the future and what services it should offer. Proposals have also included the construction of an Indigenous Community and Cultural Center within the boundaries of the park, along with more space for community gardens. The public input process has been headed by the Tucson-based Wheat Design Group, as well as the group Southwest Decision Resources, which has offices throughout Arizona. Members of the Flagstaff City Council are expected to review the most recent comments on the annex’s future, with the possibility of taking a final vote on December 6. By Garry Boulard In a rental market among the highest in the southwest, plans in Santa Fe have been announced for the construction of an apartment complex with up to 240 residential units. The project belongs to Lincoln Avenue Capital, which is based in Santa Monica, California, and specializes in affordable housing development across the country. As announced, the Santa Fe project will go up at a site on the south side of the city, off New Mexico State Road 14 and Interstate 25. What is being called the Cresta Ridge will see the construction of one, two, and three-bedroom units, with proposed rents running between $1,022 and $1,175 a month. The project is currently going through the City of Santa Fe’s approval process and could see the construction of 8 three-story buildings. The project will additionally include a community room, fitness room, and yoga studio. The project is scheduled to go before the Santa Fe County Planning Commission on December 15. If all goes well, work on Cresta Ridge could begin next year, with a possible completion date of late 2025. The Santa Fe project represents new terrain for Lincoln Avenue Capital, which has primarily focused its efforts on the East and West coasts, we well as large sections of the Midwest. To date, the company has built more than 19,000 residential units. Earlier this spring, Lincoln completed the rehabilitation of a more than 200-unit project in Orlando called Valencia Park that is also geared for affordable housing. By Garry Boulard A need for office space in some sections of some cities is leading to new retrofitting activity across the country, says a new comprehensive report just released by the Washington-based Urban Land Institute. That report, Emerging Trends in Real Estate, contends that increasingly older office space is being converted into residential units, or in some cases even upgraded into modern offices. This trend, notes the report, has only occurred in places where such projects are actually “supported by the market.” The report also notes that in many places, office space is frequently upgraded and improved if part of a mixed-use picture that also includes hospitality. The observations on new uses for office space are part of a handful of insights included in the study, which was done in conjunction with the firm of Pricewaterhouse Coopers. The study additionally notes that nearly three years after the Covid-19 outbreak, gains for rental property are “moderating as demand returns to more sustainable levels.” Even more, “many indicators suggest that the really good times may be over, at least for a while.” Not surprisingly, the study contends that both for-sale and rental housing has become unaffordable. Among the reasons for the increase: restrictive zoning and building codes that are limiting new supply. At the same time, affordable housing transaction have become increasingly complex, requiring more underwriting, with one developer commenting that the average deal used to take 90 days to close, “and now it’s over six months.” For all of that, investors still like up-market projects, particularly when it comes to the multifamily and industrial sectors. Such niche assets as student housing and family rentals, despite what appears to be a more restrictive economy heading into 2023, remain particularly appealing. An additional cautionary note: the increasing specter of vacancy taxes. “These taxes can take various forms, but the goal is to increase the effective supply of housing by imposing costs on landlords who keep housing units vacant.” By Garry Boulard A well-known cold storage company based in the Midwest has announced plans to build a new and expansive two-story warehouse facility just to the north of Lake Havasu City. The project by the Tippmann Group will be located on some 92 acres inside the Griffith Energy Industrial Corridor and will see the construction of a building designed for the storage and subsequent distribution of frozen food products and beverage items. Headquartered in Fort Wayne, Indiana, the Tippmann Group company was launched in the late 1960s and has specialized in temperature-controlled facilities in such states as Illinois, Ohio, Colorado, and Virginia. Late last year, Tippman began work on the expansion of an existing warehouse facility in Fort Wayne, seeing the company adding nearly 150,000 new square feet to an existing roughly 350,000 square foot facility. By Garry Boulard Up to $750,000 in funding is being made available from a program designed to support retail space in downtown Albuquerque. The Downtown Storefront Activation Grant Program is an initiative sponsored by the city’s Metropolitan Redevelopment Agency and is providing individual grants ranging in size from $50,000 to $250,000. Those grants are specifically targeting businesses or non-profits, either currently occupying a ground-floor commercial space or making plans to rehabilitate such spaces. The idea behind the program is to spur business and economic development partially through the creation of attractively designed and visually engaging storefronts. Recipient storefronts must exist within the MRA’s boundary map, which sees Lomas Boulevard on the north side, 10th Street on the west, Broadway Boulevard on the east; and Coal Avenue at the south end. A first round of Downtown Storefront Activation Grant funding announced earlier this summer saw up to $500,000 awarded to 15 local businesses, occupying more than 40,000 square feet of vacant space. Initial recipients included a comedy club, flamenco dance company, and several restaurants. By Garry Boulard A new emphasis on what the counties of the U.S. can do to formulate housing policies has been announced by the largest county government association in the country. The Washington-based National Association of Counties says the creation of a special task force will focus on such approaches as public-private partnerships to provide more housing alternatives at the county level. “Our goal is to eliminate the most critical housing challenges from the county government perspective,” said Denise Winfrey, president of the association, in announcing the initiative. “Access to stable housing is a foundation for better health, physical education, a stronger workforce, and true financial wellness,” continued Winfrey. The effort is expected to particularly look at the thorny issues of community planning, land use, and zoning, as well as other challenges impacting the construction of housing. The task force will be made up of some 30 country leaders from across the country, meeting in February and May of 2023, and tasked with publishing a “national housing landscape” next summer. Founded in 1935, the National Association of Counties has a membership of nearly 40,000 county-elected officials, and serves as a lobbying presence in Washington trying to secure federal funding for a wide variety of county needs. Three years ago, the group published a study noting that well over half of the nation’s counties were heavily populated with renters and homeowners who spend “more than 30% of their income on rent or mortgage payments,” and are thus classified as “cost-burdened” households. By Garry Boulard A popular meat production company in Colorado has announced plans for the building of a new facility that will go up at the site of a former Kmart store in Greeley. Members of the Greeley City Council have given a planned unit development plan approval as well as green lighting a rezoning request at the project site at 2400 W. 29th Street. The company, Colorado Premium Foods, purchased the 19.9-acre property for $8 million. The project has been the subject of at least one public input meeting. In October, members of the city’s Planning Commission gave its unanimous approval allowing for commercial high intensity use at the site. Plans call for the 172,000 square foot facility to be used to produce everything from ground beef to marinated and cut meats, as well as steaks. Colorado Premium Foods, which was launched in 1988, buys wholesale bulk protein from slaughterers that is subsequently sold for restaurant chains, retailers, and food service companies across the U.S., Central America, and Asia. The former Kmart store was closed in the summer of 2008 and later served as a location for the Greeley-Weld Habitat for Humanity’s retail shop, before being purchased by the meat company. By Garry Boulard |
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