Is the curtain ready to rise or fall on the proposed Jackson Street Entertainment District in downtown Phoenix?
No one seems to know for certain. But if the blockbuster master-planned, mixed-use development is a go, it could be one of the largest urban infill developments in the country, spanning about 20 city blocks, said sports mogul Dale Jensen.
City officials say they haven't talked with the developers in months. But Jensen said a deal could be reached by the end of the year to purchase the city-owned Jefferson Street parking garage near Chase Field and U.S. Airways Center.
Jensen's partners -- Michael Hallmark, David Wallach and Brad Yonover -- also say negotiations are ongoing, and the parking garage is the main focus of their current efforts.
Phoenix Planning Director Debra Stark said she's not aware of anything happening with the project. Although her department was meeting weekly with Hallmark and zoning attorney Larry Lazarus, "I haven't seen anything for the past few months," she said.
The Jackson Street partners want to maintain the garage's 1,400 parking spaces, but build residential and retail around its perimeter and narrow the adjacent streets to encourage pedestrian traffic.
"It's a very integral part ... wrapping that (garage) with housing and creating a streetscape," Jensen told the Phoenix Business Journal.
Jensen also is majority owner of the Arizona Diamondbacks and part owner of the Phoenix Suns. Hallmark is an architect who has designed dozens of sports venues, including Chase Field, U.S. Airways Center and the Staples Center in Los Angeles. Wallach, a Chicago developer, just completed the Summit at Copper Square high-rise condo project across from the ballpark. And Yonover, an entertainment impresario, shares Jensen's love of music and film.
The garage, the partners say, is pivotal to their quest to turn the area into an eclectic mix of sports and music venues, trendy retail and "green" office and residential spaces. The 1,000 residential units would include affordable housing.
"We need to start somewhere and grow," Jensen said. Without the garage as a starting point, "that would effectively kill the entertainment district."Wallach is more optimistic. "There's no question if this is going to happen," he said. "We plan on breaking ground in the spring."
While some with the city say they aren't aware of ongoing discussions regarding the project, Wallach said negotiations are continuing, and he understands the city needs to balance "the needs of the entertainment district, the sports teams and the citizenry."
Deputy Phoenix City Manager David Krietor said the city has a set price of $20 million for the garage. That figure is tied to a deal the city signed with RED Development for the nearby CityScape project. Because CityScape will provide about 2,500 additional parking spaces in Copper Square -- most of them for public parking -- the city agreed to either give RED $20 million when the project is partially completed in 2009, or turn over the Jefferson Street garage to the developer.
"The City Council authorized us to enter into negotiations with the Suns and Diamondbacks (for the garage), but we couldn't agree on a price, so we're no longer negotiating with them," Krietor said. "If nothing happens, the city will have to decide on whether to put out an RFP for the garage or let it go to RED."
Even though Jensen has significant personal stakes in both the Diamondbacks and the Suns, that doesn't mean the other team owners are amenable to the $20 million price tag for the garage.
"It wasn't (the Jackson Street group) that said it was too much," he said.
Jensen didn't elaborate, other than to say he asked Wallach, who also is an attorney, to take over negotiations with the team owners while Hallmark works with the city on height and signage issues for the entire project, as well as the purchase of the garage.
"There's a lot of sensitivities going on at the city, and I'm not sure why," Hallmark said.
It's possible Jensen may have ruffled some feathers with some over-the-top ideas and one recent business flop.
The Champ Car race he pushed for downtown this fall was canceled abruptly for lack of sponsorship, officials said. A Champ Car race he planned for Las Vegas also was halted. Potential litigation prevents him from saying more, he said, but he concedes it wasn't one of his better ideas.
"You know, that's OK. We can't be afraid of failure," Jensen said. "You know, that's OK. We can't be afraid of failure," Jensen said.
A man who thrives on thinking outside the box, Jensen also created a bit of a stir by tossing around the possibility of the Jackson Street group purchasing Chase Field from Maricopa County. The ballpark, which opened in March 1998, was built for $370 million and paid for by a special county sales tax.
"Had the conversation come up as an overall strategy? Yes," Jensen said, quickly adding, "It's certainly an idea, but it's nowhere imminent."
He said owning the stadium would "make sense" from a long-term standpoint in creating and maintaining the entertainment district for many years. But it would be a "complicated transaction," and it's not a current focus in moving the plan forward, he said.
Because the Jackson Street project would include other landowners besides Jensen and his partners, and would involve the creation of a development district with city guidelines and regulations, the learning curve for the public and city leaders has been steep.
"It's not moving as quickly as we'd like it to, but it's a radical idea," Hallmark said of the entertainment district.
Hallmark said people have to give up their aversions to height and density if they want to see a vibrant downtown.
"Pound for pound, Phoenix is the least-developed urban core in the world," he said.
Wallach, who just finished his first Phoenix project -- the 22-story Summit at Copper Square, west of Chase Field -- said he couldn't believe the lack of development downtown when he first visited here in 2001. The dynamics were much different from those in Chicago, he said.
"I couldn't figure out why someone hadn't built there before," he said.
Wallach delivered the Summit despite numerous difficulties. "The Summit wasn't all peaches and cream. We were sued for the variances we got."
Wallach delivered the Summit despite numerous difficulties. "The Summit wasn't all peaches and cream. We were sued for the variances we got."
Those problems were worked out.
Wallach said he was eager to be a part of Jackson Street because "I absolutely think it's a spectacular idea."
City officials should embrace it, too, he said, as a way to maximize the existing sports venues and the expanded Phoenix Convention Center.
"It's incumbent on them to parlay those investments for economic vitality," he said.
Wallach hopes his investment in downtown -- which also will include the 32-story Omega tower next to Phoenix City Hall -- is enough to convince the city that he and the rest of the team are committed to solutions to a very complicated project.
Meanwhile, Jensen said no matter how difficult the details prove to be, he's in this for the long haul. The Jackson Street team has invested $4.5 million into preliminary design work, which does not include any acquisitions.
"That's a big chunk of change. We're not going to walk away from it," Jensen said.
by Jan Buchholz
http://phoenix.bizjournals.com/phoenix/stories/2007/11/26/story2.html?b=1196053200^1554308&page=1
