The Urban Land Institute (ULI) advisory panel presented their findings to a room of about 200 people at the Tucson Convention Center on Friday. The ULI panel consisted of seven independent volunteers from real estate and related disciplines who were commissioned to address such issues as: market forces, best land use, retail, quality of life issues, and implementation for Downtown Tucson development. The panel interviewed 150 people during their week-long stay in Tucson.

The candid and unbiased input from these professionals was summarized in their report that stressed the importance of prioritizing projects, taking small steps towards long-term goals, while creating synergy within the community and leveraging limited public resources to encourage private sector investment.

The study area as shown in the map included the panel focusing on downtown Tucson, the TIF District, the Streetcar route and east and west side of I-10 in this area.

Market Forces

John Walsh, of the ULI panel, spoke about how there has been an anemic economic recovery from the Great Recession and Tucson’s has been even more anemic than others. He did predict however, that Tucson will probably be outperforming the national recovery by 2015.

The downtown hub consists of government, culture, entertainment, and cutting edge food and beverages. Office space other than government is currently 80% outside of the downtown, this can be expected to change as the district grows its attractiveness to businesses.

National and local trends indicate a move towards more urban lifestyles. The conclusion of the panel was that Tucson downtown could use an additional 200-300 rental units per year. SFR development should be encouraged for infill projects surrounding historic neighborhoods and development on the west side.

Market forces show office vacancy will be the last to recover, with mostly class B and C office space in the downtown, these should be leased before new office construction. The new co-worker space and a small to midsize (100-200 room) hotel would support the government, business and event traffic of the district, such as the hotel currently under discussion.

Retail Trade Area

Urban retail is normally the first to comeback to a district and this helps with the perceptions the district.

Demographics of district in the study:

• Population: 42,135, 40-50% are estimated to be students, hipsters and lower income Latinos make up the rest of the population.
• Households in the trade area earning $75K + (1,707)
• Households earning under $25K (8,152)
• Home Values over $200K (1,186), partially due to the high density of students in the area.

Daytime workers number about 27,000, with public sector workers being mostly Yupsters, who combine careers with non-mainstream tastes. A concern was raised that supply in restaurants may be outpacing demand in the district, as most of these are targeting the same single customer.

Recommendations from the panel were to focus on smaller retail spaces that would aggregate to larger. A properly scaled Mercado on the west side of I-10 would be appropriate. Modest 8,000 to 12,000-square-feet retail such as The Buffalo Exchange has planned on Congress Street is a good example of the type if retail that will work. Restaurant operators that are “chain-lets” with 2-3 other locations should be sought, such as the World of Beers and Pizzeria Bianco; these help provide distinctiveness to the district.

For risk mitigation, the panel recommended the Ronstadt Transit Center should stay in place and residential density be increased in the district. Retail need density where appropriate and to supplement the density by adding destination uses and activities incrementally.

Tucson Convention Center (TCC)

The checkered history of the convention center hosted only 20 conventions in exhibit hall in 2012, with 455,000 people using the TCC complex for such exhibits as the Gem Show. The TCC complex is an important asset to the City of Tucson for social, military, educational, religious and ethnic events. It currently has capacity that is underutilized and could handle sports events and trade and consumer shows with minor modifications. For instance, to add locker rooms for sport tournaments, and a green room to the arena.

The panel also encouraged private management of the TCC. The TCC stewardship needs to improve, with professional oversight for all venues.

The panel recommended the aesthetics of the ballrooms be improved and that the north meeting room be repurposed to face the theaters.

As for the Hotel Arizona and La Placita, the panel thought the hotel would be best razed for redevelopment, while La Placita could be redeveloped. The Stravenues could be improved at little cost, as well as make the walking paths well-marked and inviting for tourists.

Rather than have La Placita sitting vacant as it is today, it was suggested that the UofA could relocate the School of Architecture, Performing Arts or Visual Arts to La Placita. For more exhibit space needed for the Gem Show, it was suggested to create a “Market Hall” across the street where the tents are today.

For offsite venue, recreation center, neighborhood community center for the west and south side communities, it was recommended that a Kroc Center, YMCA or Rec Center be put next to the fire station. This could include a gym, pool, community rooms and should be built by the non-profit and private sectors.

On the west side, the panel recommended the most economically feasible and best use for the land fill site is for a rodeo and equestrian use. This fits into Tucson’s birthplace and will become “A new heart for Tucson”. It supports further the intent set forth in existing plans for such an historic and cultural facility. A rural arena would be used for infrequent events.

The reporting of this meeting is being done in two parts. Part two on Street Recommendations and Implementation will be continued tomorrow.

Part Two of this report can be read here

James P. Robertson Jr., CCIM, Senior Commercial Associate Broker with Realty Executives Tucson Elite, assisted the seller, Imperial Square, LLC of Tucson (Marten Kalway, managing member) in the sale of The Imperial Square Apartments at 665 N. Jefferson Ave. Tucson, AZ. 85711.

The Imperial Square Apartments, built in 1964, is in the near eastern portion of central Tucson. The property commanded a sale price of $550,000 ($18,333 per unit) in this deficiency sale. The 30-unit property consisted of all one bedroom units, and a pool and laundry facilities as amenities.

“Count this deficiency sale as another victim of the current real estate collapse. I would also like to applaud the buyer and the buyers’ representative for being knowledgeable on the commercial deficient sale process. It is not for the light hearted”, said Robertson.

The buyer, Prism Holdings, LLC of Tucson (Ralph Ruiz, managing member) was represented by Lance Parsons, CCIM, Senior Commercial Broker with ReMax Catalina Foothills Real Estate.

“The buyer saw that the property had good bones, but needed cosmetic and mechanical upgrades. An opportunity was there at the right price,” said Parsons.

CCIMs have earned an internationally recognized professional designation that signifies their expertise in commercial investment real estate. Since 1969, the Chicago-based CCIM Institute has conferred the Certified Commercial Investment Member (CCIM) designation to commercial real estate and allied professionals through an extensive curriculum of 200 classroom hours and professional experiential requirements. Currently, there are more than 9,000 CCIMs in 1,000 markets in the U.S. and 31 additional countries. Another 7,000 practitioners are pursuing the designation, making the institute the governing body of one of the largest commercial real estate networks in the world. An affiliate of the National Association of Realtors®, the CCIM Institute’s recognized curriculum, powerful technology tools, and networking programs impact and influence the way CCIM members do business.

Robertson can be reached at (520) 878-1629. Parsons should be contacted at (520) 577-3999.

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[mepr-show rules=”58038″]Sale date: 10/30/2013. After six month escrow, countless negotiations with the lender, escrow finally closed with a sales price of $550,000 or $18,333 per unit. All cash transaction. This was a short sale with lender. APN: 127-03-552. Property sold with a GSI of $153,600, with other income reported of $2,276 and a vacancy loss of $50,688. Total operating expenses were reported at $74,906. Property sold with an NOI of $30,282 and a 5.5% cap rate. GRM was 5.23%
Property was on the market since 2/8/2013 with a 30 day close.[/mepr-show]

A new State Veterans’ Cemetery is coming to Marana. Gov. Jan Brewer announced Friday the Arizona Department of Veterans Services was awarded a $7.6 million federal grant for the cemetery which will fund the construction of the 32 acres of donated land.

“This is fantastic news for Arizonans, and especially for the Southern Arizona veterans and advocates who have championed for this cemetery for more than a decade,” Gov. Brewer stated in a news release. “This grant will help Arizona in our continued mission to properly honor those who have nobly served and sacrificed on our country’s behalf. I thank the Kai Family Foundation for graciously donating this land, as well as everyone involved in this important effort.”

More than half-a-million military veterans live in Arizona, including nearly 135,000 in Pima and surrounding counties.

The first seven to ten-acres will provide for in-ground burials, columbarium and in-ground cremated remains burials. It will also house an administration building, maintenance building, assembly area, committal shelter and parking.

The Kai family, led by Marana Town Councilman Herb Kai and his brother, John Kai Jr., donated the land for a cemetery to the Arizona Department of Veterans Services back on May 31. The property had been in the Kai family since the mid-1940s and is located west of Interstate 10, bordered on the west by North Luckett Road and on the north by the Pinal County line. Luckett Road, currently unpaved leading into the area, will be paved as part of the project.

Construction is expected to begin in July 2014 and should be complete by Oct. of 2015, according to the release.