Council OKs downtown Chandler project after assurances - SanTan Sun News SanTan Sun News

Council OKs downtown Chandler project after assurances

November 23rd, 2022 SanTan Sun News
Council OKs downtown Chandler project after assurances

By Ken Sain
Managing Editor

Chandler City Council members made sure the developer of the Downtown District understands they are worried they’re being promised lots of tax-generating retail business but will end up with only multifamily housing instead.

And they won’t be happy about it.

Council on Nov. 10 approved a rezoning and preliminary development plan for the proposed multi-use development on about 45 acres on the southwest corner of Arizona Avenue and Pecos Road.

The plan includes about 800 apartment units; a hotel, about 100,000 square feet of retail space, and more than 364,000 square feet of office space.

“My concern has always been the retail on this issue,” Councilman Matt Orlando said during the Nov. 7 study session. “That drives… the sales tax that goes towards the parks, the [recreation], the police, the fire, all the amenities that Chandler has become used to in its quality of life.”

The developer has promised to build two two-story office buildings at the same time as the first and larger of two residential buildings is constructed during phase one.

A stipulation was added to the development agreement during the Planning and Zoning Board hearing on this case that construction on the second and smaller multifamily building could not begin until all the retail shops along Arizona Avenue were built.

The developer does not have any contracts in hand to occupy those spaces. Because of the lack of affordable housing in Chandler, it’s unlikely they will have any problems filling up the multi-family units.

The city currently has a 5.1% vacancy rate for retail, according to the city’s economic development office and a 16.2% vacancy rate for office space.

“It is highly unusual in today’s market, as we know, that is ever-evolving, ever-changing, for a developer to commit to build so much … on speculation,” said Brennan Ray, a lawyer with Burch & Cracchiolo is representing the owner and developer, Meridian West AZ/202, LLC.

Ray said his client is prepared to build 70,000 square feet of office space and 30,000 feet of retail without having contracts in place with the tenants.

Orlando said that they gave him additional assurances that more retail would be built before the second apartment building is started, and that was enough to ensure its passage.

What concerned Orlando, and other members of Council, is that there are only five buildings of retail planned along Arizona Avenue. The vast majority of the retail space is either behind that, or along Pecos. And the developer would not have to build those before constructing the second multi-family building.

“What are the guarantees that we get the class A office space that Microchip desperately needs?” Council member Mark Stewart said. “What are the guarantees that we get the hotel and convention space, which is what was zoned for this particular plan when it was purchased?”

The plan is for a 180-room hotel. Council members told Ray repeatedly that there is a huge need for about 20,000 more square feet of meeting space for corporate events.

“It’s not really my place to tell you what to put where, and what kind of street paving to use or what design,” Vice Mayor Terry Roe said. “But for me, the greatest concern is, I just want it done.

“I can think of five or six projects right now that are still incomplete,” Roe said. “Those all came with great intention and promise and they are still not completed. And so what would disappoint me the most is to have two new multi-housing projects with a lot of undeveloped land.”

In other Council business, Mark Stewart cast a no vote on one consent agenda item. It was a plan to change the city code to raise the maximum dollar amount that staff can spend on projects without Council approval.

In some cases, it’s doubling from $50,000 to $100,000. The proposal is being made because inflation has increased costs, so a lot more of the city’s contracts are passing the $50,000 threshold.

“One of our main responsibilities as council members is to be a budget watchdogs and ensure taxpayer dollars are accounted for,” Stewart wrote in an email. “In my opinion the old limits were high enough for Council approval.”

The mayor and other council members voted in favor and the proposal passed.