City program turned around dying strip malls - SanTan Sun News SanTan Sun News

City program turned around dying strip malls

March 17th, 2023 SanTan Sun News
City program turned around dying strip malls

By Ken Sain
Managing Editor

About a dozen years ago there were serious worries about the fate of retail centers around northern Chandler.

The Loop 101 and Loop 202 freeways had opened, changing commuter patterns, leaving some retail centers that were once on heavily-traveled streets with fewer trips past them.

Businesses were shutting down, vacancy rates were up. At the intersection of Alma School and Elliott roads, 53% of the retail space was vacant. The strip mall at Cooper and Ray roads had a 68% vacancy.

The city started its 4-Corner project to address the problem, looking for ways to help existing retail businesses stay open and attract new businesses to bring jobs and tax dollars to the city.

The City Council got an update on how that project is going during a Feb. 23 work session. And members learned the city has mostly turned it around.

The Cooper-Ray intersection has gone from 68% to 3% vacancy in 11 years. Alma School-Elliott went from a 53% vacancy to 14%. Alma School and Ray went from 40% to being fully occupied today.

In all, seven intersections studied in the 4-Corner project showed improvement over where they were 11 years ago.

Still, Micah Miranda, the city’s economic development director, says more work needs to be done.

“The overall theme I think you’re going to hear is because our traffic counts are low and our population growth is slowing in these areas, you need additional discretionary spending to support the existing [businesses],” Miranda said.

That means some of these retail spaces need to be converted to multifamily housing, bringing in more customers to support the retail shops that are currently open.

Miranda made some recommendations on what Council can do to help.

First, he wants updates to its area plans to identify destination neighborhoods to help with branding. He pointed to how Uptown Chandler has benefited from branding.

The areas he identified were Southside Village, which is just south and east of downtown; downtown; North Arizona Avenue and East Chandler Boulevard. The boundaries for the latter two have not been set.

Next is to update the city code and zoning that would make it easier for both development and redevelopment.

Also, he called for an expansion of the Adaptive Reuse Overlay District, saying it has been successful in facilitating reuse projects.

The current district is mostly along Chandler Boulevard and Arizona Avenue. Miranda would like it to include all parts of the city that are north of the Santan Loop 202 Freeway.

The program started in 2015, Miranda said, and helps facilitate the redevelopment of small projects that are under 15,000 square feet.

Miranda also wants Council to expand the Commercial Reinvestment Program boundaries to match the Adaptive Reuse Overlay District.

This is a program that builds public infrastructure, such as shades, pedestrian lighting, murals and protected bike lanes. That infrastructure draws businesses.

The final recommendation is to lobby the state Legislature to encourage redevelopment of underutilized properties to provide new housing units.

Miranda pointed to the one corner he says he fields the most calls about, – including from council members: the Sun Village Fair Towne Center at the corner of Alma School and Warner roads that once was home to a Fry’s supermarket.

Fry’s shut it down in 2016, leaving 84,000 square feet unoccupied and hurting the other retail stores in the center. The current occupancy rate is 23% with a Walmart anchoring the nearly vacant strip mall.

He said when the city tries to bring in new retail, his team considers a number of factors. First, will the new shop compete with any existing shops? They want to avoid that. Second, with the national growth in online shopping, the city is looking for experiences more than a place that sells goods.

So fitness centers and entertainment hubs are more likely to have long-term success than a business that has to compete with Amazon.

Overall, Miranda argued, the city would benefit more from building more apartment and condo complexes.

He compared the Sun Village Fair Towne Center to Riata Apartments, which were built in 2019 west of the Chandler Fashion Center. Those apartments sit on about half of the available land available at Sun Village.

The apartments’ 300 units bring in $469,088 in property taxes. The city currently gets $232,520 in property taxes from the mostly empty buildings at Sun Village.

Miranda argued that turning retail places like that one into apartments would not only provide more customers to support existing and new businesses, but also bring in more tax dollars to the city.

He said the city could choose to reclassify housing projects such as this one to encourage builders to add more housing.

He argued if the city reclassified for seven years, the lower property tax would be about the same as the city earns now.

After a decade, he added, the city would gain a benefit. He said the Sun Village center has a net income of -$81,307, while Riata Apartments is $1.94 million.

After 10 years, the General Fund revenues would be $1.67 million for Sun Village, and $5.21 million for Riata, he estimated.

Vice Mayor Matt Orlando complimented the presentation, but urged Mirada and his team to have a Plan B if the Legislature is unwilling to pass laws that would make it easier to attract housing.

“I just don’t want to sit around twiddling our thumbs waiting for legislators to do something,” he said. “I don’t know the legislators will address this, they definitely won’t this year. The bills are done. What are the tools that we have, that we can use, such as development agreements?”

Mayor Kevin Hartke complimented the presentation.

“Very good presentation, and I look forward to kind of getting some more details on some of those [recommendations].”

Miranda said it hasn’t been easy turning the tide.

“Overall, we’re in a much better place 10 years later, which I’m very happy to say because there’s been a lot of bumps along the road,” Miranda said.