(Source: AZCentral): Catherine Reagor – Uptown Phoenix’s Camelback Road and Central Avenue area was voted the hottest intersection in the Valley. Tempe Town Lake landed State Farm’s $600 million regional hub.
Mesa’s aging downtown, in the midst of a revival, has drawn new Arizona State University and Creighton University campuses.
Light rail has its detractors, but it has spurred the redevelopment of older neighborhoods and new development in most of the metro Phoenix areas it runs through.
Overall, more than $11 billion has been invested in development along the Valley’s light-rail line during its first decade, creating 50 million square feet of housing, office, shopping, hotel, school and government space, according to light rail’s manager Valley Metro.
“Just go down the line from Mesa to Dunlap and 19th Avenue in Phoenix, and it’s clear light rail has stimulated investment and redevelopment,” said developer and planner Lorenzo Perez of Venue Projects, which built the Newton and Central Market near Camelback Road and Central Avenue.
“Light rail shows how Phoenix, a young city, has matured and evolved,” he said. “It’s been a game changer for many of the neighborhoods it runs through.”
Affordable housing came first, with some help
Almost $1 billion was invested in land and projects around the light-rail route before it opened in 2008.
Just as the train started running, the national economy fell into a recession and metro Phoenix’s real-estate market crashed.
Some of the early developments in downtown Phoenix failed but were revived with help from a group created to bring development — particularly affordable housing — to neighborhoods along light rail.
Sustainable Communities Collaborative was funded with $20 million in non-profit dollars that was used to leverage financing for developments.
Sustainable Communities helped fill more than 25 vacant lots along the rail line when little other development was happening in metro Phoenix.
“There wasn’t really any development going on in the urban core besides what we were doing, and it started a movement that has changed the Valley and drawn many big developers with traditional financing,” said Shannon Scutari, an Arizona growth expert who helped lead Sustainable Communities
She said it’s important that the effort was able to bring affordable housing to the light-rail corridor during the downturn because now, with rising land and construction costs, developers are focused on high-end condos and projects.
Some Sustainable Communities projects:
- In Tempe, the 60-year-old Grace Community Church building was redeveloped into Gracie’s Village. The church still operates a thrift store there. The project includes 50 affordable apartments above the thrift store, a Wi-Fi lounge, roof deck and playground area.
- In downtown Mesa, Encore on First, a five-story, 81-unit urban building, has been constructed to provide transit-oriented living for seniors. The new housing project includes a fitness room, reflection pool, lounge with a large covered balcony, storage lockers and barbecue area.
- In midtown Phoenix, the Devine Legacy on Central is located next to the Campbell and Central light rail station. It has 65 affordable apartments with high-end amenities.
- In downtown Phoenix, the Union@Roosevelt apartments at First Avenue and Roosevelt Street went up on a corner that had been vacant for more than 50 years. Sustainable Communities helped MetroWest Development get permission to move utility and water lines, narrow a street by a lane and close a short, one-way street before it started construction.
Many of the affordable-unit developments helped spark other new development. About half of the new developments along light rail are residential.
Light rail has drawn jobs, too
Downtown Phoenix and Tempe are obvious examples of where light rail has helped entice more people to live, work, shop and hang out in new urban developments.
A few years ago, when State Farm picked the 2 million-square-foot Marana Heights project in Tempe for a regional headquarters, the company’s executive Michael Tipsord said its location near light rail was a big reason why.
“Companies are very interested in being around light rail for their employees and for how it adds to the value of properties,” said Larry Downey, a vice chairman for tenant services with the brokerage Cushman & Wakefield.
About 36 percent of all the new development along light rail is office and other commercial space.
Brent Herrington, CEO of DMB Development, said light rail and other alternative transportation like ride-hailing are changing the way people live and work, and development must evolve.
“Many Millennials aren’t interested in owning a car or driving to work,” he said.
Light-rail hot spots
Light rail has changed Phoenix, Tempe and Mesa all along the route. But the changes have been most dramatic at two of the Valley’s most recognizable intersections. And there’s potential for similar evolution in a third area.
The intersection was voted the most popular by real-estate and planning experts last year in an Urban Land Arizona competition.
The last time the group did the ranking, before light rail started running, the uptown area didn’t make the top 10 list. Businesses were closing in the area. Its main shopping center was looking run-down, and neighborhoods around it weren’t drawing nearly as many homebuyers or renovations as they do now.
DeMarco’s group has opened five restaurants, including a Postino, Windsor and Federal Pizza, around Camelback and Central over the past decade.
Venue Projects worked with Sustainable Communities to redevelop the site into a mixed-used project named after Beef Eater founder Jay Newton. It’s now home to a Changing Hands bookstore and the Southern Rail restaurant.
The renovation of one of Phoenix’s first shopping centers, Uptown Plaza, diagonal from the area’s light-rail station, took the center back to its Midcentury roots and has become an anchor for the area with many new eateries and shops, Perez said.
Decades ago, Apache was one of the Valley’s main thoroughfares. New motels, strip malls and gas stations drew travelers and employed many locals. In the 1980s, as more freeways were built, the strip became a hub for cheap apartments, mobile home parks, bars and liquor stores.
Now, many of those older but not historic developments are being torn down to make way for much higher-priced housing and shopping.
More than $100 million has been spent on land and buildings along that stretch over the past few years, according to an analysis by The Republic.
Besides new student housing, developers are building for people who want to live and work in the centrally-located area.
Developer DMB is building its first infill apartment project in Tempe on Apache.
“We picked a spot along light rail on Apache, almost equal distance from the downtowns of Tempe and Mesa,” Herrington said. “The area is popping and will be almost unrecognizable in 10 years.”
The company, known for its communities in Arizona and California, including DC Ranch in Scottsdale and Verrado in Buckeye, is planning a project on Apache unlike anything else it has built before, Herrington said.
The exact plan hasn’t been announced yet.
Manufactured housing has been an important affordable housing option for people in Tempe and Mesa for decades.
As the older mobile home park and apartments are torn down to make way for high-end housing, the area’s residents are being priced out of their long-time neighborhoods.
“Cities with light rail typically want higher-density projects next to it because that’s where more people want to live and work,” Manjula Vaz, a real-estate attorney with Gammage & Burnham, said.
She said the older mobile home parks are much less dense than the new projects planned.
She originally had opposed the train coming near her home but said it had opened up the Valley for her to travel to places like downtown Phoenix and Christown, where she hadn’t been in decades because she didn’t have a car.
Perez, with infill developer Venue Projects, is part of Mesa’s advisory committee on downtown redevelopment. He said the woman’s story is another great example of how light rail has helped the Valley evolve.
Downtown Mesa is still surrounded by older mobile home parks and apartments and strip malls, but its downtown is making a comeback.
Mike Milano, general manager of Milano Music Center on Main Street, isn’t sure light rail has exceeded the community’s expectations so far. But he believes it will in the future.
Milano said while the music store, which has been in downtown Mesa since 1946 and celebrated its 72nd anniversary in November, was not affected by construction because it’s a destination, many of the surrounding businesses suffered.
The affect construction had on businesses is just now beginning to turn around, he said.
Still, Milano said while developers have begun investing in the area, it has happened much more slowly than anticipated.
“We had to live through light rail construction with Portland Place in downtown Phoenix,” said Tim Sprague, principal at Habitat Metro. “Mesa already has light rail and so many other key ingredients for its downtown to thrive.”
Also, the Mormon church is redeveloping almost five acres into new homes next to its temple in downtown Mesa. Residents and preservationists have protested plans for that project, as it calls for the demolition of some historic housing.
Not everyone excited about light rail
If the train goes to south Phoenix as planned, developers and planners believe it will spur redevelopment in that area as well. Investors began snapping up land and developments along the proposed extension a few years ago.
But some residents and businesses from the area are fighting it. A movement to put that and several other planned Phoenix light rail extensions on the ballot for voters is underway.
Celia Contreras owns a window-tinting shop that abuts Central Avenue. She lives in a small house connected to her business.
In front of the store is a fading sign that reads “Window Tinting Since 1995” and a new banner that says “SOUTH PHOENIX 4 LANES OR NO TRAIN” with a photo of a crossed-out light-rail train.
She said she knows other parts of the city have protested light-rail extensions in the past, but this time the community isn’t going to back down.
“They’re coming (for) the wrong ‘hood,” Contreras said.
Contreras worries that the plan, which calls for taking away two lanes of traffic, will lead to a congested Central Avenue. When drivers realize this, she said, they’ll take different routes and no longer frequent the shops along Central Avenue.
Owners of restaurants, retail stores, mortuaries and several other types of businesses have shared similar concerns with the Phoenix City Council.
Contreras said she believes the city wants the small businesses along Central Avenue to fail so the owners will sell the land to investors who will put in apartments and condos like the ones around the light rail in other areas.
“It’s — how do you say it in English?” she thought aloud.
A few minutes later, she remembered: “Gentrification.”
Filling the gaps
Some light-rail detractors still dispute whether the train is drawing enough passengers to justify its costs.
Before light-rail construction began in 2004, almost 2,000 acres of land along its proposed tracks was empty, according to commercial real-estate brokerages.
Last year, 750 acres along the train’s corridor were still vacant.
Much of the still-vacant land can be found around light rail’s northern end in northwest Phoenix and along Washington Street near Sky Harbor International Airport.
“The real benefits of light rail will be recognized decades from now as it forms a framework for redevelopment and metro Phoenix’s urban form,” said real-estate analyst Mark Stapp, director of the Master of Real Estate Development program at Arizona State University.
“We are still a young place and not fully formed. Imagine what the Valley would look like without light rail,” he said. “Would we have infrastructure supporting the development we now have that creates a desirable place? No.”