Archive for September 5th, 2007

AZ Republic – Kierland Commons nice but nothing new

Richard Nilsen
The Arizona Republic
Sept. 4, 2007 01:55 PM 
 

NORTHEAST VALLEY – If you wander the back streets of any ancient Middle-Eastern city, you will come across the bazaar, a marketplace stretched along an alley with stalls stretched from end to end. It’s the archetypal market and has been the prototype for all of them since, from the Athenian agora to the rue Mouffetard in Paris to the great antediluvian malls of Paramus, N.J.

Such markets can be humble – tents lined up in Istanbul – or they can be high-dollar and upmarket, like Kierland Commons in northeast Phoenix, at Greenway Parkway and Scottsdale Road.
But no matter which, you have store next to store, and a passageway for shoppers to walk along. It is a universal pattern and architecturally speaking, it’s hard to bring anything new to the idea.
Perhaps that is why the claim that Kierland Commons is a “new kind of shopping experience” doesn’t quite ring with the excitement it might.

It’s not so new, after all.

Restoration of a proven lifestyle Even the innovation of offering pricey condos above street level is not so new: A cheap Gristede’s in Manhattan has apartments above it, too. With 75 stores arranged like a small town on 38 acres, Kierland Commons is a pleasant place to spend a few hours. Its designers – Nelsen Partners of Scottsdale along with the Scottsdale civil engineering firm Primas and Associates and the Phoenix office of landscape architects Design Workshop – have made it almost a theme park: Its central passage is called Main Street – not unlike the one in Disneyland.

It’s hard not to be ambivalent about Kierland Commons. It has to be admitted that visiting is pleasant: There are shaded sidewalks, frequent park benches where you can sit and read a newspaper, lots of misters to help you keep cool, green landscaping, piped-in music and a central park with spritzing fountains where mothers bring their children to play.

And the atmosphere for shopping is also nice: clean stores with a wide variety of upscale merchandise, and lots of eateries, from the small lunch place to the high-end restaurant.

The look of the place is interesting enough visually – with well-considered details: triangular sconces along the store exteriors, curvy door handles for the store entrances, planters with herbs and flowers.

Look is damned with faint praise Yet, even if Kierland Commons is decidedly “pleasant” and “nice,” those very words are damning in their beige faintness. If you look at it one way, we should be grateful for a shopping mall to be pleasant at all; the norm is a numbing, white-noise acoustic, crowd jostled aggravation and Kierland Commons is not.

But looked at another way, if it has pretensions to architectural distinction, it might need to have some architecture. And Kierland Commons has almost none.

Yes, it has an aesthetic surface of interesting detail and ornament, pleasant color and the occasional angle, but inside, the stores are still boxes: still the stoa with its stalls.

The detail is applied like cake frosting to a plain yellow cake: stucco over plywood and girders.

Where are the interesting spaces? The interiors that make for an emotional experience? The new way of surprising you as you move from one room to another?

Well, they aren’t there. Most visitors will not miss them and will instead enjoy the atmosphere, which, as we have said, is very, very pleasant.

Distinguished marketing instead But we should not be tricked into thinking this is what makes distinguished architecture. Instead, it is distinguished marketing. The Commons is also the core of a larger, 730-acre master-planned community that includes several financial institutions, office buildings, the Kierland Design Center, with 450,000 square feet of home furnishings outlets and the Westin Kierland Resort and Spa and a golf course that doubles as a bird sanctuary. New construction is everywhere.

What used to be a quiet corner of Sonoran Desert halfway between Scottsdale and Carefree is now backfilled with development, and it is a matter of personal taste whether this can be counted an improvement.   

www.theholmgroupaz.com

AZ Republic – Renting rather than selling your home

Russ Wiles
The Arizona Republic
Sept. 4, 2007 04:45 PM 
 

So you’re having trouble selling your home. Would it make more sense to lease it instead? Doing so could turn your property into a rent machine and open up extra tax breaks. Plus, it would buy time until market conditions improve.

“I can’t believe anyone would put a house on the market now, unless they absolutely had to,” said Jeff Young, a Scottsdale investment adviser and owner of two rental units.
But before you take that leap, think carefully.
Renting a home isn’t a slam-dunk strategy either. Not everyone has the financial reserves, time, expertise or disposition to do it right.

“It’s not as simple as just setting out a ‘for rent’ sign,” said Stephen Phillips, a Phoenix man who owns rentals in Phoenix and San Diego with his brother. “You need a tolerance for calls at 10:30 at night.”

Becoming a landlord Before taking the plunge, assess your temperament and desire. Landlords emphasize the need to operate this like any other business, in an emotionally detached way.

“You can’t get sucked into everyone’s hard-luck tale,” Phillips said. It’s also critical to learn about legalities. Phillips belongs to a Phoenix networking group called the Independent Rental Owners Council (www.azama.org/iroc.asp), for which Young formerly served as president. The group of small landlords meets monthly.

Along with a good understanding of landlord-tenant laws, you should be familiar with credit and background checks for applicants, and you’d be wise to develop a network of handymen, plumbers, electricians and the like.

You also should know how to keep good records. For example, it’s smart to maintain separate checking accounts for each property, said Phillips. And it’s wise to keep at least a few thousand dollars in reserve for unanticipated problems.

And Young cautions prospective landlords not to assume they’ll earn a positive cash flow, especially if they bought at a lofty price within the past few years.

“Rents aren’t necessarily going to pay all the bills, even if you made a 20-percent downpayment,” he said. “You’ll have to count on the tax benefits, and you’ll need time.”

Tax breaks The tax benefits of owning a rental differ from those for primary residences. On both, mortgage-interest and property-tax expenses can be deducted, but landlords also can write off all sorts of costs for repairs, maintenance, property managers and more.

“Think of it as a small business,” said Jim Darling, a certified public accountant at Jenner & Darling in Tempe. “Everything you spend is deductible, one way or another.”

That includes a deduction for depreciation – a noncash accounting charge allowed on business assets but not owner-occupied homes. Depreciation is based on the premise that property wears out and will need to be replaced, even when that’s not necessarily the case.

The tax treatment of capital gains and losses also differs.

When owners of a rental property sell, they can defer capital-gain taxes by switching to another property through a somewhat-complex transaction called a 1031 tax-free exchange. Owners who don’t make this reinvestment – or do it incorrectly – will owe taxes.

By contrast, homeowners can exclude up to $250,000 in profits ($500,000 for married couples) on a primary residence without having to reinvest in other real estate. To qualify, you must have:

• Owned the home for at least two years over the five years ending on the date of sale.

• Used the home for at least two years over the five-year period ending on the date of sale.

You can utilize this break repeatedly, though not more than once every two years.

You can get a partial benefit even if you don’t meet the two-year use and ownership tests – assuming you were forced to sell the home due to an out-of-area job transfer, medical problem, divorce or for various other reasons. You would pro-rate your exclusion to reflect how long you lived in the home.

“If you lived there 18 months, you’d get 75 percent of the exclusion,” said Tom Steele, a certified financial planner and enrolled agent at Steele, Larson Anderson Wealth Management in Mesa. “The IRS has left it pretty nebulous,” he said, referring to the many exceptions.

Traps to avoid One tax trap that can trip the unwary is renting out a home that you occupied as your primary residence. Doing so could wipe out that $250,000 or $500,000 tax break, which isn’t available on rentals. “Some people get confused on whether the benefit can be taken on any piece of property – rental or primary residence,” said Steele. “Others aren’t sure how often they can use it.”

Rentals also differ from primary residences in the treatment of losses. Landlords can deduct a loss on rentals they sold for less than they paid (adjusted for improvements and a few other factors), yet homeowners can’t deduct a loss on a primary residence.

Losses on an owner-occupied home can’t be harvested even if you later rent it out.

“You can convert a home into a rental, but you can’t take a loss in doing so,” said Darling. When a property converts into a rental, he said, the home’s “basis” or untaxed value would be its cost or fair market value, whichever is less.

When real estate prices were rising a couple years ago, few people had reason to concern themselves with losses. But given the state of affairs now, it’s one more thing to factor into your decision. 

www.theholmgroupaz.com


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