Financing plans change for $350M USA Basketball/Omni Hotel project in Tempe

 

 

 

 

 

 

 

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Mike Sunnucks Senior Reporter-Phoenix Business Journal Jul 11, 2014, 2:29pm MST

Financing plans have changed for the proposed $350 million USA Place development in downtown Tempe, and that is pushing back the timetable for the project.

Developers say they still are moving forward with the project.

The Tempe development is slated to be the new home of USA Basketball as well as a 330-room, 13-story Omni Hotel at Mill Avenue and University Drive.

Original plans called for the USA Basketball — the Jerry Colangelo-chaired group that puts together American national teams for the Olympics and other tournaments — to relocate its headquarters from Colorado Springs, Colorado to Tempe in 2015. The Omni Hotel was also tentatively scheduled to open in 2015.

Now, developers and USA Basketball are looking at the fall of 2016 for construction to be completed and the sports group’s relocation to Arizona.

The USA Basketball move would also happen after 2016 Summer Olympics in Brazil, instead of before, as originally planned.

Susan Eastridge, CEO of Scottsdale-based Concord Eastridge and a principal of USA Place LLC, said financing for the project is going in a different direction than originally planned.

“Nothing is ‘delayed,” she said in statement to the Phoenix Business Journal.

Eastridge said original plans called for separate financing for the various components of the project including the hotel, apartment, commercial space and parking. “While this would have been an effective way to get the entire project financed, we had the opportunity to re-evaluate our financing approach and engage one large equity investor to finance the entire project,” Eastridge said. “We are completing that transaction now.”

The development sits on 10.5 acres of Arizona State University-owned land at the southeast corner of Mill and University. ASU has long sought to redevelop the parcel. A Chili’s restaurant at the corner of the parcel has been closed to accommodate the project.

The USA Place will lease the land from ASU. The school will get a 1,000-square-foot boardroom in a planned conference center next to the Omni hotel. Office space, 540 apartments, as well as a parking garage and underground parking are also part of the project.

Eastridge said development partners and Omni are still on board with the project.

Tempe business and real estate officials have been wondering about the status of the project and whether financing was delayed.

“It’s definitely not dead. People are talking about,” said Kate Borders, president of Downtown Tempe Community Inc.

Borders notes that Tempe has the lowest office vacancy rate in the state and there are number of commercial and residential developments in the works along Mill Avenue and Tempe Town Lake.

Colangelo — the former Phoenix Suns and Arizona Diamondbacks owner — has been the chairman of USA Basketball since 2005. He was part of an effort in 2008 to move the basketball program to Glendale and the Main Street Glendale development. Main Street failed and went into foreclosure and USA Basketball canceled its Glendale plans in 2010.

Roughly three years later, the Colangelo group announced it was working with Eastridge and Los Angeles developer Michael Hallmark on the Tempe/ASU development.

Mike Sunnucks writes about politics, law, airlines, sports business and the economy.

 

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