"The mayor and city council and the businesses and some of the neighborhood associations have decided that an urban core is essential to making Phoenix a player," Bill Bollwerk, a director at Wood Partners LLC, tells GlobeSt.com. "We give them the property, we build the project and lease it back from them. And, they try to get revenue in the future to spark revitalization downtown."
Wood Partners first needs some special tax incentives to align. Under a tentative plan, the company would purchase a three-acre site at the northeast corner of Fillmore and Third streets and turn over the title to the city for eight years in return for an abatement of all property taxes, which totals about $1.4 million. Presently, Rouse Co. of Columbia, MD, owns about two-thirds of the site and the city owns the balance. Wood Partners' intent is to buy both parcels.
After an eight-year hold, the city would turn over the title to Wood Partners. The deal essentially enables the company to purchase the land for $200,000, nearly $150,000 below the market value.
City officials sent out a request for proposals in April for the site. Wood Partners hopes Thursday's council meeting will solidify the new relationship with approval of the proposed abatements, Bollwerk says. If approved, ground could break in early 2005, pending the developer's ability to secure construction financing at roughly 70% of the project cost.
Though still in its infancy, the project could see a six- to eight-story building with 300 one- and two-bedroom lofts available strictly for lease. The average rent is estimated at $1,100 monthly.
Bollwerk believes young professionals would seek out loft opportunities downtown like those popularized in television sitcoms. "It's urban. I think there's a segment that wants to live like that. There's really no product for rent in Phoenix that targets that segment," he says.
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