Valley's Urban Center Set Squarely in Tempe

Adam Kress
The Business Journal

Mill Avenue is tough to peg.

On any given night, the heart of downtown Tempe is a stiff cocktail mixed with young, single professionals, families with children and hard-partying college students topped off with "Mill Rats" asking fo r change.

During the day, the Valley's urban center is much more tame, with a combination of casual shoppers, busy students and nearby workers out and about for lunch.

The only certainty on Mill Avenue and its surrounding glut of bars, restaurants, small shops and chain stores -- be it night or day -- is that people will be there.

Downtown Tempe has more visitors than ever before and the trend is going to continue. Everything from creating Tempe Town Lake to putting parking meters on Mill Avenue is bringing more people to the area.

But for city officials, area supporters and local merchants, challenges remain. A city smoking ban has turned off some on the area, and the loss of Cardinals football and the Fiesta Bowl in a few years is a problem the city is attacking now.

At the same time, the Valley's light-rail system and the Tempe Center for the Arts are just around the corner, and residential development in the area is growing at an unprecedented rate. It all means one thing: Even more people in downtown Tempe.

Survival of the fittest

The restaurant and retail landscape along Mill Avenue in downtown Tempe is not for the faint of heart. Much like in a shopping mall, it's not uncommon for a restaurant or store to dot Mill Avenue one day and be gone the next.

Susan Shemberger and her store on Mill Avenue, Mazar Bazaar, have been an exception. They've survived.

Shemberger's store of unique clothing, gifts and collectibles has been a classic Mill Avenue "mom-and-pop" shop for 15 years. The key to her store's success has been an ability to adapt. "You have to be open to change down here," she says. "For example, I started out mainly in women's clothing and now my merchandise is much more in collectibles."

Shemberger says there was a time when she would simply wait for customers to walk in the door, but those days on Mill are long gone.

"You can't survive on foot traffic alone down here," she says. "For your business to survive you have to be aggressive. Setting up a mailing list was one of the first things I did, and I have a Web site that adds to my business."

A primary criticism of Mill Avenue in recent years is that the area has lost much of its character with larger corporate names such as P.F. Chang's China Bistro and Abercrombie & Fitch moving into the area. And because of that, many believe there are fewer stores such as Mazar Bazaar.

But city representatives balk at the criticism. They say more prominent signage and household recognition of big retail names gives a false impression that the "chains" are taking over.

"When people say we have all these national chains, they're wrong," says Kris Baxter, a marketing coordinator in Tempe's Economic Development Department. "We are by far predominantly independent."

According to the Downtown Tempe Economic Overview -- released in May by Tempe, Arizona State University and the Downtown Tempe Community -- 78 percent of the restaurants and retailers in downtown Tempe are locally owned.

Still, Shemberger wishes there were fewer major retail chains and more niche shops.

"People can go to a Gap in any mall, but it was the uniqueness of the shops that brought people down here." she says.

The Gap on Mill closed earlier this year.

For better or for worse

One of the most significant changes in downtown Tempe in the past year is the addition of single-space parking meters along Mill Avenue. Traffic was limited to one lane in each direction in an effort to reduce speeding and offer more convenient parking.

It seems to have worked on both fronts.

Rod Keeling, executive director of the Downtown Tempe Community, or DTC, a nonprofit that works with the city to manage and promote services to the area, says the meters have been a success.

"It's almost a universal hit with merchants and customers," he says. Keeling and the DTC installed the meters and say that within the next few months, all the electronic multispace parking meters (currently used on Mill's surrounding streets), will be replaced with single-space meters.

Shemberger, who was in favor of the meters from the beginning, says her customers love the convenience.

"People who come down here that didn't know about the meters have said they are something that would make them come back," she says.

The city smoking ban is another recent change that has impacted downtown Tempe. Keeling said the effect it has had on business is negative.

"It just makes us less competitive -- that's why we (DTC) were against it from the beginning," Keeling says. "Restaurant/bar sales have gone down 8 percent since the ban and 8 percent the year before that. Food service is down about 16 percent in the last year and a half."

Tempe Mayor Neil Giuliano disagrees that the ban has had a negative effect.

"I think the smoking ban has been positive," he says. "The number of patios has more than doubled since, and it adds energy to the whole area."

Keeling says while food-service sales have taken a hit recently, over the past 18 months aggregate sales in downtown Tempe are up about 11 percent. He says aggregate sales have grown from $70 million in 1993 to an expected $170 million in 2003.

"In my time with DTC (10 years) there have never been more people, cars or retail sales here," Keeling says.

Up, up and away

Giuliano says he has seen quite a few changes to downtown since he took office as mayor in 1994, but they may pale in comparison to the changes the heart of Tempe sees in the decade to come.

In the short term, ASU is set to move much of its engineering school into the Brickyard development on Mill Avenue. Giuliano says it will bring as many as 1,500 people per day to the area.

Beyond that, a residential boom is approaching that could result in 7,000 more people living downtown within 10 years.

"That will be the biggest change," according to the mayor. "And it's smart growth. The rest of the Valley is moving farther into the desert and we are going up."

One of the larger residential projects planned is a 585-unit, 13-story tower on Centerpoint property near the corner of Mill Avenue and University Drive. Aside from that, more development near Tempe Town Lake is coming down the pipeline.

Janice Schaefer, economic development manager for Tempe, says the downtown area draws about 2 million visitors a year, but major growth in the years to come will be in residential development.

"We're trying to attract the people with discretionary income who want to live here to be in the middle of everything going on," she says. "We're hoping for an area full of knowledge workers."

And city officials also are hoping the light-rail project, set for Tempe in 2006, will be able to transport those knowledge workers to and from Tempe and downtown Phoenix. "The light rail will allow all the scientists at ASU and TGen (Translational Genomics Research Institute) to go back and forth," Giuliano says. "And to people moving here, this will add to an urban appeal."

One of the challenges the city will have to face in years to come is the loss of revenue generated from Cardinals football games and the Fiesta Bowl, both of which will move to Glendale in 2006.

"We will definitely feel the impact, especially with the Fiesta Bowl," Schaefer says. "We will continue to have the Block Party, but we are interested in bringing more quality events to the area."

Giuliano says Tempe Town Lake and bordering beach park already is the No. 1 outdoor destination in the Valley, and the Tempe Center for the Arts -- set to be completed in 2006 at the West end of the Lake -- will be another draw for downtown.

"We are focusing on creating other things that occur over the course of the year," the mayor says. "The beach volleyball event in the spring was an example, and we are shooting for one significant event per month for the entire year. That can more than replace lost football revenue."

Giuliano has less than a year before his term as mayor ends. He says in the time he has left he wants to make sure residential projects progress, secure a deal for a new downtown or lakeside hotel and oversee the completion of the arts center. Aside from that, he's happy with downtown Tempe.

"We want the downtown of this city to be the living room of the community," he says. "It's a place to entertain guests and make them feel comfortable. At the same time, it's under constant evolution and renovation."