PHOENIX-The best way to describe the 630,000-square-foot CityCenter of CityNorth might be "roller-coaster ride." Launched in 2006 by Chicago-based Klutznick Co. and partners as "a true mixed-use project with retail, restaurants, office above retail and residential above retail," according to John Klutznik in 2006, the project fell into disarray when the Great Recession and its aftermath. Then came years of foreclosures and lawsuits.
But CityCenter at CityNorth could be back on track, thanks to new ownership. Scanlan Kemper Bard Cos. and equity partner Wayzata Investment Partners acquired the asset at 5310-5455 High St. along Loop 101 for $67 million. The owners, operating under the name City North Associates LLC, plans to invest about $7 million into the asset, which includes 99 condominium units, approximately 175,000 square feet of retail space and 330,000 square feet of office space. Also part of the deal, which was negotiated by HFF and Lee & Associates, was five acres of undeveloped land and a six-level parking garage.
Brokers with Colliers International's Greater Phoenix office, who are uninvolved with CityCenter at CityNorth, tell GlobeSt.com that the new owners could be just what is needed to get the project moving once again. "I'm not familiar with the new owner's plans, but from everything I've heard, they'll be in a better position to pump capital into the project, an to market the place more appropriately," notes Colliers senior vice president Phil Breidenbach. "It's such a cool development in a key area of town. It deserves to be successful."
Both Breidenbach and colleague Jim Keeley, who is one of the founding partners of the firm local office, point out one issue leading to the development's struggles is that it went north ahead of its time. Though the original developers had the right idea and vision, they simply didn't have the resources to wait it out until times got better. Still, "even when the markets were roaring, this wasn't a project that made sense," Keeley observes. He goes on to say that the project is still viable, but it'll take awhile for it to truly catch on. "It's a good idea to change hands, to let someone else get their arms around it and see what they can do with it"
Breidenbachagrees, pointing out that the Portland, OR buyer likely has more staying power than its predecessors. "It's a very ambitious project and a great real estate development. It'll be a fun one to watch evolve over the next few years," he says.
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