Life is what happens to you while you’re busy making other plans. –John Lennon
Dec 18, 2014, 10:31am MST UPDATED: Dec 18, 2014, 10:44am MST
Eric Jay Toll Reporter- Phoenix Business Journal
It might be a good thing that this month marks only my fourth with Phoenix Business Journal. I only have to look back over 120 days to pick my economy stories of the year. Three on my beat really stand out:
- Plans for 20 million square feet of office development around Tempe Town Lake, half of which are fromArizona State University’spartnership with Catellus.
- The twin historic preservation-restoration-modernization developments of the Hayden Flour Mill and Monti’s La Casa Viejo at Rio Salado Parkway and Mill Avenue in Tempe.
- Arizona’s export crisis.
Tempe Town Lake Development
When ASU announced the selection of Catellus to develop its 330 acre Athletic Facilities District on Oct. 8, it unveiled plans to develop about 10 million square feet of multiple uses on the area between “A Mountain” and McClintock Drive on both sides of Rio Salado Parkway. The proposed 20-year project will generate hundreds of millions of dollars in ground-lease revenue and payments-in-lieu-of-property-tax, or PILT, to fund a $250 million renovation of Sun Devil Stadium and other enhancement and construction projects for the school’s athletics programs. The unnamed project is half the potential office development around the lake. The Catellus master plan will mix residential, commercial, retail, office and research and development uses adjoining the ASU campus on Tempe Town Lake.
The facilities district is only one development planned for the lakefront. Salt River Project and an in-negotiation developer are planning more than 3.2 million square feet of multiple uses at The Grand at Papago Park Center. Liberty Property Trust is under construction with multiple office buildings and flex space in its Liberty Center at Rio Salado. Another 2.2 million square feet are planned by Hong Kong-based China International Development and Investment Corp. Ltd. on an 11-acre site owned by the city of Tempe, near Rural Road and Rio Salado Parkway, that is surrounded by the district. Once known as The Pier and also referred to by its buyer, Trendex Holdings, the currently unnamed project is intended to be an international finance center.
The multiple projects result in more than 20 million square feet of office space around the lake. Although build-outs are projected to take 20 years, the 1MSF/year absorption rate is equal to half the 10-year average of office absorption for the entire Valley.
Hayden Flour Mill and Monti’s La Casa Viejo
The week the story broke, Dec. 2, plans to preserve and redevelop the Hayden Flour Millinto a dining destination, boutique hotel and entertainment venue was the most read story across the Business Journal’s group of 43 publications. The three stories garnered more than 50,000 page views from the first news until the city took final action. The derelict Hayden Flour Mill is poised to become an iconic gateway to the city with a plan from Baum Development to restore the mill into a boutique hotel, dining destination and 4,000-seat amphitheater.
Baum has assembled a team with fellow Chicago hotelier Aparium Hotel Group, and locals Sundt Construction Inc., and SmithGroupJJR. The development, which is being negotiated between the city and development team over the next couple of months, will add a trio of small buildings, but restore the sadly dilapidated mill into historic splendor.
Across Mill Avenue, Douglas Wilson Cos. is building twin towers with offices and a boutiqueKimpton Hotel. The gem of Mill+Rio (its working name) is the restoration and preservation of the Hayden House, formerly Monti’s Casa La Vieja. Wilson has tapped one of the foremost historic preservation experts in America to supervise the effort.
So here’s funky Mill Avenue bracketed by ultra chic modern office developments fronting the lake and gateway, and honoring its history with significant preservation and restoration efforts of the two properties that represent the only reason the city exists today.
Arizona’s export crisis
When the going gets tough, Arizonans come together and get the job done. It’s our Western heritage. All we need to do is double the volume of our exports so we can match the U.S. export growth rate that’s double what Arizona is putting outside our borders. Companies need to do business across the border in California, Mexico, Canada and Texas. Increased exporting means more revenue into state coffers without raising taxes.
Exporting is not just stuffing parts in cargo containers and sending products overseas. In fact, shipping products from Arizona manufacturers is increasing about 1 percent a year — that compares with the U.S. annual growth rate of more than 8 percent a year.
Arizona businesses are discovering two facts: More than 90 percent of customers are located outside of the state and businesses can export everything from hotel nights to training and consulting services.
Businesses that export have higher profits, are less affected by market slowdowns, and have larger, better-paid staffs, according to the experts.
The challenge is that Arizona exports have grown 44 percent in the past 10 years, while U.S. exports grew at nearly double the state’s rate. Regions against which Arizona competes for business grew exports at exponential rates to Arizona and U.S. averages.
These three stories will evolve as we head into 2015 — and predictions for the coming year are on the horizon in future posts.
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