Archive for October, 2011

AZ Central – Scottsdale retail vacancy rate at 8.6 percent

Scottsdale’s retail vacancy rate for the third quarter was 8.6 percent, 3.8 percentage points below the rate for metro Phoenix, according to the latest figures from CBRE, the commercial brokerage formerly known as CB Richard Ellis.
The metro-Phoenix retail vacancy rate a year ago was 12.3 percent.
The third-quarter vacancy rate was 11.1 percent in north Scottsdale and 11.8 percent in the Paradise Valley Mall area of northeast Phoenix.
Scottsdale had 55,147 square feet of negative net absorption – the change in occupied square footage from one quarter to the next – and north Scottsdale had 196,519 square feet of negative net absorption.
The average asking lease rate was $17.35 per square foot in Scottsdale and $19.25 in north Scottsdale. The metro Phoenix rate was $15.95

AZ Central – SunRidge Canyon in Fountain Hills will have golf school

SunRidge Canyon Golf Club in Fountain Hills has announced that it will become home to a Jim McLean Golf School in mid-November.
The instruction facility will be at SunRidge Canyon’s practice facility.
A permanent structure is to be built next year to house the school.
McLean was named PGA Teacher of The Year in 1994.
Other Jim McLean Golf School locations include Doral Golf Resort and Spa in Miami, PGA West in La Quinta, Calif., and Texas Golf Center in Fort Worth.
SunRidge Canyon Golf Club, 31100 N. SunRidge Drive, is a 6,823-yard, par 71 course designed by Keith Foster.
It opened in 1995.
Don and Cindy Misheff, part-time Fountain Hills residents, bought SunRidge Canyon nearly a year ago from Sunbelt Holdings.

AZ Central – Developer lays out ideas for dude ranch in Scottsdale

Taber Anderson had just stepped from his Range Rover to explain his plans for a north Scottsdale guest ranch when a roadrunner appeared, as if on cue, and scurried across the road.
Anderson wants to turn his 220-acre site southeast of Dynamite Boulevard and 128th Street into a modern version of the kind of dude ranches that have largely disappeared from Arizona over the past few decades.
Scottsdale had its share, including Rancho Vista Bonita at Pinnacle Peak and Pima roads and the Paradise Valley Guest Ranch just north of downtown.
“We don’t have a guest ranch in Scottsdale anymore,” said Anderson, adding that his concept would be a 21st-century take on the Old West experience.
Anderson, who worked with his father, Lyle, developing Desert Highlands and Desert Mountain in Scottsdale, has yet to submit plans for the project, which he is calling Reata Ranch. He expects to submit a rezoning request by the end of next month.
The land is zoned for homes on roughly 1.6-acre lots and Anderson is seeking a zoning category that allows guest ranches, resorts and homes.
At least 122 homes could be built under the existing zoning, Anderson said.
Linda Whitehead, a Coalition of Pinnacle Peak member, said she toured the site with Anderson but wanted to withhold judgment on the project until he submits detailed plans.
Ranch blends ritzy, rustic
Anderson suggests that Reata Ranch would blend ritzy and rustic in a no-roughing-it style. He describes it as “glamping,” a mash-up of “glamour camping.”
Reata Ranch would have an old Arizona feel of the Hermosa Inn in Paradise Valley or Tucson’s Tanque Verde Ranch, the developer said.
Another example, in a different geographic context, is the Carneros Inn in California’s Napa Valley. Guest cottages with outdoor showers and private courtyards blend in among vineyards and apple orchards.
It’s a building style referred to as “agritecture,” Anderson noted.
Reata Ranch borders state trust land along 136th Street that the city wants to acquire in December for the McDowell Sonoran Preserve. It’s in the city’s Dynamite Foothills Character Area that calls for preserving the rural character with open space, minimal development impact, low building heights and no street lights to compete with starry skies.
The guest ranch would include hiking and equestrian trails linking to the nearby preserve and McDowell Mountain Regional Park.
Eco-resort planned nearby
Reata Ranch would share some characteristics of the Reserve eco-resort that Lyle Anderson plans to build northwest of Dynamite and 122nd Street, Taber Anderson said. Father and son have no ownership interest in each other’s projects.
Scottsdale approved Lyle Anderson’s plan last November for 180 hotel rooms, 127 villas and 17 estate homes on 213 acres near the Golf Club Scottsdale.
Reata Ranch would have a similar number of lodging units and homes, the younger Anderson said.
He also wants to include a wildlife release center where injured animals and raptors could be released after they have been rehabilitated.
Rachel Sacco, Scottsdale Convention and Visitors Bureau president, said she would love to see a guest ranch in Scottsdale.
“It’s one of the few things we don’t offer,” she said.

AZ Central – Massive West Valley development to launch

Two Phoenix-area developers, John F. Long Properties and the Alter Group, are planning a massive mixed-use commercial development in the West Valley that will span Phoenix, Avondale and Glendale.
The project is made up of three separate parcels totaling 1,500 acres and likely will take decades to complete, the developers said.
Long Properties has owned much of the land involved in the project for years but did not create specific development plans for it until recently.
Over the course of its development, the project is expected to create 3 million square feet of employment space, generate at least 10,000 West Valley jobs and rake in $500 million in construction costs, they said.
Most important, the project will make it easier for employers to relocate or expand to the West Valley, because its developers have designed a number of shovel-ready projects that could be built relatively quickly, Alter Group and Long Properties representatives said.
“If that phone rings, we can be ready for them,” said Jim Miller, property manager for Phoenix-based Long Properties.
Construction is set to begin before the end of the year on a 60,000-square-foot medical office building at one of the three sites, said Kurt Rosene, senior vice president of national development at Skokie, Ill.-based Alter Group’s Scottsdale office.
An 80,000-square-foot medical office building and a retail center already exist nearby on the site.
The developers said they have a client lined up to occupy the planned building but would not disclose the company’s name, saying they would announce it at a groundbreaking ceremony later this year.
That project will be part of Algodon Medical and Office Park, northeast of Thomas Road and Loop 101 in west Phoenix, one of three distinct office and light-industrial parks involved in the West Valley development partnership.
Miller said Algodon ultimately would be part of a larger, mixed-use development called Algodon Center that will span 1,000 acres in Phoenix and Avondale, bisecting Loop 101 and stretching north from Thomas Road to Campbell Avenue, just south of Camelback Road.
A second, smaller park called Aldea Centre will be developed on 150 acres at the southwestern corner of 99th Avenue and Bethany Home Road in Phoenix, Miller said.
The massive project’s third component will be a 300-acre commercial park next to the Glendale Airport called Copperwing Business Park, southeast of Glendale and 115th avenues, in Glendale.
Long Properties, the master-plan developer for the three commercial parks, owns all 1,500 acres and has obtained mixed-use commercial zoning on all the land from the three municipalities in which it is located, Miller said.
Long Properties owns the land outright and has invested $7.5 million in infrastructure development such as power and sewer hookups, he added.
The Alter Group will market the properties and develop individual structures as they are needed, Rosene said.
Rosene and Miller said their expectations for the project’s total development cycle were conservative and realistic.
“If we were the only developer in the Valley doing office, it still would take 20 years,” Miller said.
Rosene said the project’s greatest benefits to the West Valley would be realized not overnight but over a long period of years.
The project’s existence should make it easier for quality employers to choose the West Valley when scoping out locations for a new office building, manufacturing plant, retail center or other commercial facility, he said.
“We’re not just trying to get in and out in a few years, build some buildings and make some money,” Rosene said.

AZ Central – Scottsdale Waterfront rides wave in low tide

The retail portion of the Scottsdale Waterfront, a high-profile, mixed-use complex south of Scottsdale Fashion Square, continues to face challenges as corporate retailers pull out.
The Waterfront includes more than 95,100 square feet of ground-floor retail space. It spans Camelback Road from Scottsdale Road west to Marshall Way, and then along Marshall south to the bridge. When it opened in 2005, about 95 percent of the retail space was leased.
Borders bookstore was the anchor tenant, encompassing more than 26,000 square feet in a high-profile spot fronting Camelback Road. It was among the first businesses to open at the Waterfront, along with P.F. Chang’s China Bistro, Urban Outfitters and Sur La Table.
In February, Borders Group announced it had filed for Chapter 11 bankruptcy reorganization, and was closing eight of its Arizona locations, including the Waterfront store, which closed in April.
On Dec. 31, Priscilla of Boston bridal salon will close. The store opened in December 2009. Corporate parent David’s Bridal is closing all of its Priscilla of Boston stores.
“This decision allows us to focus our resources on our sister division, David’s Bridal, to further accelerate David’s growth and strengthen our leadership,” spokeswoman Christy Rabil said.
The retail portion of the Waterfront is owned by Metzler of North America, a Seattle-based boutique real-estate investment bank. Its portfolio includes high-profile commercial properties throughout the United States.
Metzler officials couldn’t be reached for comment.
“Quality developments in prime locations historically have always been successful and the Waterfront is no exception,” said Bret Sassenberg, principal of Ground Up Development and development manager for Scottsdale Waterfront LLC.
“It may be only a matter of time for things to shake out but this is a very desirable corner for retailers and that will be evident when we are all looking back on this recession.”
Leases and vacancies
The retail portion of the Waterfront is 64.4 percent leased, said Megan Dugan, senior property manager with Main Street Real Estate Advisors. There are four vacancies.
Zoe’s Kitchen, a Birmingham, Ala.-based national chain, opened its third Arizona location in July, and Primp and Blow, a Scottsdale-based blow dry bar owned by Melodi Harmon, opened Oct. 8.
Harmon’s Waterfront salon is larger and includes more employees than her first location at Thompson Peak Parkway and Hayden Road.
“I just feel like this is a great place for this concept . . . with all the high school kids and the . . . mothers and daughters,” she said. “And down here we get a lot of tourists because of all the hotels. With all the restaurants and nightclubs, and people going out and the parties, this is a really fun location. This will definitely be the busier location.”
As for the Borders space, there’s been a lot of interest, but the key is “being patient in finding what’s right for the center,” said Golden St. John, leasing agent with the Corritore Co., a Scottsdale-based specialty retail broker.
“Right now there’s no one that I can announce that we’ve talked to in the past or are currently talking to, but there’s definitely been a lot of interest in space just because of the presence here and it’s a great real estate site,” he said.
The Borders space may be divided to accommodate more than one tenant, St. John said. The first and second floors may be leased separately, or the entire square footage may be broken into several smaller spaces, he said. Also, the adjacent space vacated by Isaac Jewelers may be incorporated into the Borders space, he said.
“We did have one tenant who called us immediately and wanted to take it as is . . . but the landlord (Metzler) looked at that option and said ‘I don’t know that that puts us in a better place than we were in before,’ ” he said. “So they really don’t want to put a Band-Aid on the problem.”
Sassenberg said he would like to see Lucky Strike Lanes “or something that would dramatically increase foot traffic” open in the space vacated by Borders. Lucky Strike, a lounge-style bowling alley, opened in late August at CityScape in downtown Phoenix.
Having two corporate closings – Borders and Priscilla of Boston – creates a challenge for marketing the property because “people may get the perception that it’s because the center is not doing well,” St. John said.
“But if you look at it, we’re right across from Fashion Square, which is one of the top malls in the country; we’re at the best intersections in town, so it’s great real estate,” he said. “It’s just the unfortunate circumstance of certain tenants not being able to survive the current climate.”
Looking ahead
The biggest challenge for the Waterfront will be “just being patient and doing what’s right for the center,” St. John said.
“A lot of landlords, I think, are forced to be reactive, due to either monetary situations or other variables they’re dealing with,” he said. “Luckily Metzler is in a position where they can really take their time and ultimately make a decision based on what they feel is right as opposed to having to choose something just because they’re in a pinch and they need to fill the space.”
Rick Murphy, senior vice president at real-estate brokerage CBRE, said the Waterfront likely will not have a difficult time filling the vacancies created by Borders and Priscilla of Boston because it’s a “great location.”
“It’s all about location,” he said. “They’ll lease and they’ll be on their way.”
Murphy also said the volume of chain-store closings is now slowing compared to during the height of the recession.
In the meantime, Scottsdale Waterfront LLC is planning the next phases of the Waterfront behind the Nordstrom parking garage and east of Goldwater Boulevard. The phases will include mostly condominiums with some commercial space.

AZ Central – 2 downtown Scottsdale restaurants expanding seating

Two restaurants along Scottsdale road in the downtown area are expanding seating.
Breakfast Club
For eight years, diners have flocked to the Breakfast Club for a leisurely morning or afternoon meal.
But more diners want their food and drink on the go, or would like a Bloody Mary or mimosa with breakfast.
The Breakfast Club has completed a $1 million renovation to adapt to changing customer needs and is seeking a restaurant liquor license from the Arizona Department of Liquor Licenses and Control.
The restaurant, 4400 N. Scottsdale Road, has expanded to 4,600 square feet, from 2,600 square feet, filling adjacent retail space. The eatery used to have 18 tables inside and a small patio, but now has a 17-seat breakfast and beverage bar, as well as more tables and an expanded patio.
“A lot of what we’ve seen during the eight years that we’ve been here is that need for immediacy, especially in the a.m.,” owner Kyle Shivers said. “We want to oblige that, as opposed to waiting for a table and sitting down, and going through the whole full-service engagement, to be able to step up to the counter and have that immediate engagement.”
Mobile and social have been incorporated into the restaurant experience, with large tables to accommodate community and party seating, and four TVs above the bar so patrons can catch up on news, he said.
“We’re going to have another eight tables out on the Stetson Road patio that will allow people to just walk up to the counter and help themselves . . . and then go off to a table and relax all day long if they like,” Shivers said.
Shivers wanted the expansion to include more than just more tables for traditional, sit-down service.
“The square footage we had before . . . didn’t afford us a lot of opportunity to expand on the menu,” he said. “We’re not trying to be everything to everyone, but there’s certainly additional ingredients that we wanted to bring in and we had no opportunities to do that prior. We’re here for the long-haul.”
The restaurant had about 20 employees and is adding 10 to accommodate the expansion.
The City Council on Oct. 18 forwarded a favorable recommendation to the state liquor department to grant the Breakfast Club a Series 12 liquor license, which permits a restaurant to serve liquor so long as at least 40 percent of its gross revenue comes from the sale of food.
“We’re excited about being able to get into some more mature adult beverages,” Shivers said. “We’re building a from-scratch V8 juice . . . and what will be nice is you throw a little vodka in there and some of our house hot sauce, and you’ve got a brilliant Bloody Mary. That beverage side of the equation will be strictly in and around the breakfast model of alcoholic beverages.”
Shivers will be opening a second Breakfast Club Nov. 1 at CityScape in downtown Phoenix.
Pink Pony
Also in downtown Scottsdale, the Pink Pony restaurant will be adding a patio out front to increase its exterior exposure. The restaurant, a longtime downtown fixture, is at 3831 N. Scottsdale Road.
The city’s Historic Preservation Commission approved a request for the patio.
The patio will extend the bar and open the front so passers-by can see inside, said Reid Groban, one of the proprietors.
“What it does is give people a different avenue to see the Pink Pony,” he said. “You really can’t see the Pink Pony from outside because the windows are so high. It brings the inside out so people can see.”
The restaurant has to get permission from the state liquor department before it can proceed with the patio because it involves extending the liquor service area, Groban said.
“Certainly we’re open to having a lot more business,” he said. “We think we have a unique draw . . . and being one of the first restaurants in Scottsdale before it was incorporated into the city, it has a lot of nostalgia and history.”

AZ Central – Phoenix approves two purchases of Sonoran Preserve land

Two additional purchases of Sonoran Preserve land have been approved by the Phoenix City Council, and city officials will bid on the land, likely without competition, at a Nov. 30 auction at the Arizona State Land Department.
But there is some confusion on the size of the parcels and the price, which will have to be resolved.
Phoenix has been adding bit by bit to its new Sonoran Preserve. At issue on Wednesday was acceptance of grants of $4.2 million from the Arizona Growing Smarter fund to add to the preserve.
The Growing Smarter fund was established by voters in 1998 to conserve open space. The city has acquired about 7,000 acres of the proposed 20,000-acre preserve in north Phoenix. The next purchases will involve contiguous parcels on the north side of Sonoran Boulevard, which is under construction.
Grants from the Growing Smarter fund will be matched with $5 million from the city’s Parks and Preserves Initiative, according to the Phoenix Parks Department, for a total of $9.2 million. But the Arizona State Land Department says the property actually is 626 acres, and the price is $10.4 million. The council approved accepting the grant without comment, as it has every other grant from the Growing Smarter fund.

October 2011
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