The Challenge Downtown
Development bolsters Tempe’s downtown oasis
By Kirsten Searer, Tribune
Bonnie and Dave Ender gave up a north Scottsdale
address (and a sprawling five-bedroom home) for
a loft in downtown Tempe.
Have they gone mad?
The Enders say no, calling Tempe's downtown the
most happening, most urban place in the East Valley.
"So many small towns and medium-sized cities
are in urban decay, and here we have a city where
something's going on," Dave Ender explained.
Tempe leaders are in the midst of plans to urbanize
the city's downtown by encouraging more housing
and nurturing growth along Tempe Town Lake, now
the northern border of downtown.
They're looking to create a niche as the region's
best place for amateur sports tournaments. They're
preparing for the new light-rail system and the
Tempe Center for the Arts.
Yet the area has taken some hits.
The Arizona Cardinals and the Fiesta Bowl are
moving to Glendale in 2006.
Downtown businesses complain about the city's
tough smoking ban, the high rent along Mill Avenue,
the poorly labeled parking garages and the lack
of customers during the day.
And competition has grown. Chandler opened a
new mall with parking as far as the eye can see
and Scottsdale continues to cement its place as
the East Valley's most popular night spot.
There's a worry among many that Mill Avenue has
seen its heyday come and go.
"It kind of hit a peak in the early to mid
’90s,” said longtime Tempe resident
Don Warne, who stopped on Mill recently to buy
wine at Vinoteca, a new wine boutique. "A
few places have gone out of business lately. I
don’t know if it's the smoking ban law or
the economy in general — or maybe both.”
Yet downtown is the only district in the city
that has posted increasing sales tax revenue,
even during the recession. City leaders seem optimistic
that new downtown housing developments will boost
the area and that major projects along Town Lake
will finally come to fruition.
"More people go to downtown and Mill Avenue
than ever before," said Rod Keeling, executive
director of the Downtown Tempe Community, a nonprofit
association of downtown businesses and residents.
"The problem is the ratios are out of whack,"
he said. "There's too much commerce for the
number of customers we actually have.”
The long-term key to downtown Tempe's success,
Keeling said, lies in convincing people to live
COMPTON OR PASADENA
One weekend night in March, almost 15,000 people
were on Mill Avenue, according to a pedestrian
count the downtown association conducted.
That's a big increase from five years ago, when
the economy was much better. The downtown association
estimates that just 5,600 people visited Mill
Avenue on a weekend night in October 1998.
Turning Tempe into a destination hasn't been
cheap or easy. Since 1983, the city has given
out $25.4 million in incentives to developers.
Top that with the $102 million the city spent
on constructing Town Lake and at least $12.5 million
more for the 98 acres the city owns along the
Those costs might seem steep, considering that
much of the lake's shore remains bare. But Keeling
said the investment has been worth it, and was
driven by a choice Tempe leaders faced in the
1980s: Did they want their city to become Compton
Both cities are so-called “core suburbs”
in the Los Angeles metropolitan area. Both were
mostly developed decades ago, leaving buildings
— and longtime residents — to age.
Yet somehow downtown Pasadena ended up with Colorado
Boulevard and a vibrant night life. Compton's
downtown has struggled. That's why downtown Tempe
must continue to reinvent itself, Keeling said.
“The alternative is not to grow, to stagnate,"
Keeling said. "The alternative is lower property
values, slum and blight, crime and decay.”
Tempe passed out tax abatements, land acquisitions
and help with relocating, demolishing and cleaning
up environmental problems.
"Our primary function is that of a packager,"
said former Development Services director Dave
Fackler, who guided much of the downtown revitalization.
The city has used the much-criticized eminent
domain power for two projects in the past two
decades, said Steve Nielsen, Tempe's director
of Community Design and Development.
Tempe took over an empty sub shop and a Circle
K for the Ruby Tuesdays complex at University
Drive and Mill Avenue.
In the early 1990s, the city also cleared out
an area for the Centerpoint project, which now
houses the Harkins Theatres and other commercial
space. The city used eminent domain to buy out
a boarded-up gas station, several bars, a run-down
housing development and an adult bookstore, Nielsen
“That was really kind of the beginning,
when it was biker bars and it was a really nasty
place downtown,” he said.
THE STATE OF THE MILL
Now — at least $130 million later —
opinions vary greatly regarding Mill Avenue and
City officials brag that the lake draws an estimated
2 million visitors a year. They tout estimates
that each visitor spends an average of $15 on
food, gas and trinkets, making the annual economic
impact of lake visitors up to $30 million.
"That would be a pretty low figure, actually,"
said lake spokeswoman Kris Baxter, "when
you're looking at events that bring people from
around the country."
City staff members recently gave the City Council
a status report on downtown, saying:
• The area boasts 3.3 million square feet
of commercial space, compared with 1.8 million
• Downtown cleared $160.6 million in taxable
sales in 2002, compared with $71.4 million in
• About 8,000 people work in or near downtown
compared with about 3,000 in 1993.
• The area has about 235,442 square feet
of restaurant space compared with 121,357 square
feet in 1993.
• The area has about 140,778 square feet
of retail space compared with 107,351 square feet
Fackler quotes other statistics. In the 1980s,
he said, Arizona State University represented
about 95 percent of all business done in downtown
Tempe. Now it's just about 45 percent, he said.
Inevitably, the success and resulting increases
in rent has drawn national chains. In 1993, 93
percent of businesses were independently owned;
now about 78 percent of businesses are local.
Some national chains have struggled downtown.
McDonald's and Gap dropped their Tempe locations,
which worries Steve Goumas, managing partner of
Rula Bula, a downtown Irish pub.
"That should not be taken lightly,"
Despite the successes the city holds up, longtime
Mill Avenue shop owner Steve Lewis has one simple
request: "More people."
Lewis has owned the Cool Jewell on Mill Avenue
since 1984. Daytime business has slowed, he said.
And while city officials tout the number of people
going to Town Lake, he said they walk right past
his shop toward their destination.
"It didn't seem to translate to customers,"
he said. Goumas of Rula Bula said he has a longer
to-do list for improvements along Mill Avenue.
He and his partners settled their Irish pub in
downtown Tempe because of the comfortable atmosphere
and to be in a historic building, he said.
"It doesn't have the heavy foot traffic
that some of the other developments have in the
Phoenix area," Goumas said. "The sales
per square foot aren't generally as great in Tempe.
There is not adequate parking. The average person
is confused as to where it is."
Cullen Campbell, a chef at Tempe's House of Tricks
restaurant, was looking to open a farmers market
near the Orchid House, a downtown residential
development. Downtown residents have long said
they want a market, but Campbell said the rent
was too expensive.
"The rent is getting way too high,"
he said. "Almost all of the people coming
in are corporations."
Another obvious concern is the ban on smoking
in public places.
Even at Rula Bula, where there's a huge outdoor
patio and a thriving restaurant, Goumas said he's
had to cut two bartenders and one manager since
the smoking ban began. He's lost about 20 percent
of his bar sales to the ban, he said.
"It takes a little more effort to do business
in Tempe," he said.
LOOKING TO THE FUTURE
The city continues to float new ideas for downtown
Tempe. It's difficult to go to a City Council
meeting lately when there's not talk of building
the region's largest tennis facility and soccer
complex — and maybe even a water park —
on the southwest corner of Town Lake. Officials
hope the area will become a regional hub for youth
and amateur sports.
Few cities in the Southwest have elaborate sports
facilities for regional tournaments, said Stephanie
Nowack, chief executive officer and president
of the Tempe Convention and Visitors Bureau. Tempe
could carve a niche as a draw for tournaments.
That's a market that thrives even during a bad
economy, she said.
"Kids still play sports and families still
travel with their kids," she said.
Since its inception, the lake has been a springboard
for grand development plans. Original studies
looked at a $28.6 million sportsplex with an ice
arena and amusement park; the $24.8 million Rio
Beach project with restaurant, hotel, retail and
a golf course; and the $200 million boardwalk
project with a hotel, restaurant, office and retail
Plans are toned down, but the city has resurrected
the idea of a downtown or lakeside hotel and convention
center, something sorely needed since downtown
Tempe has just 300 hotel rooms.
The Hayden Ferry Lakeside project is one of the
few original ideas for the lake that is continuing
to plug along. The boat-shaped mid-rise office
building on the northeast corner of Mill Avenue
and Rio Salado Parkway is at least 65 percent
full, said senior project manager Randy Levin
of SunCor, the project's developer.
As soon as the building is 75 percent full, plans
for the second, 12-story office building will
go into motion, he said.
"We're getting very, very close," he
The 40 condos in the Edgewater complex, the first
of four residential towers planned for the Hayden
Ferry Lakeside project, could start construction
early next year. Eventually, the project could
total 1.6 million square feet in commercial and
Levin hopes the project will soon resemble redevelopment
areas in Vancouver, British Columbia.
"It's very very clean, very pristine,"
he said. "I've heard it referred to as a
clean San Francisco."
The city also has made it easier to clear lakeside
development. Levin said he prepared for about
30 public hearings when planning the Hayden Ferry
Lakeside project. The new Redevelopment Review
Commission approves lakeside redevelopment plans
in just two meetings.
"It's a one-stop shop," Levin said.
One major question mark is the redevelopment
of the Hayden Flour Mill. Tempe entered into an
agreement with a branch of MCW developers to purchase
the mill and surrounding land for $11.8 million
if the developers didn't have funding for redevelopment
by July 15.
That deadline is drawing near, and so far MCW
hasn't made a deal, Fackler said.
"They're still trying to put that package
together," Fackler said. "Hopefully,
we'll get it done."
For now at least, the economy has put a damper
on lakeside amusement parks and other grand schemes.
But no matter the economic climate, the Hayden
Ferry Lakeside project is always close to Mill
Avenue and Arizona State University and a seven-minute
drive to Phoenix Sky Harbor International Airport.
It faces Loop 202, where 187,000 vehicles pass
by each day. And, in 2006, the light-rail line
and the Tempe Center for the Arts are set to be
"All these things combined," Levin
said, "We just can't duplicate that."
SunCor also is helping ASU develop land near Rural
Road and Rio Salado Parkway, a potential hotel
site. ASU is looking at several projects that
would blur the lines between the campus and downtown
Tempe. The university plans to build a new business
complex on University Drive and Mill Avenue. This
fall, ASU will open a computer department in the
downtown Brickyard development.
But many city officials, developers and small-time
entrepreneurs go back to a linchpin in Tempe redevelopment:
New downtown housing — a critical mass of
customers, concert lovers and diners to draw in
money and urban energy.
Of the 84 homes in Tempe's Orchid House complex,
just a few remain unsold. All construction will
be completed by the end of the summer, when the
Enders will move into their penthouse.
Until then, just seeing the street sweepers on
Mill Avenue every morning, or driving over the
Mill Avenue bridges, makes it feel like home,
Dave Ender said.
"I like the togetherness here," Bonnie