Construction to Begin Next Month on Premier Urban Development

CBRE has been awarded the marketing assignment for the ±240,000-square-foot office portion of USA Place, the ±1.4 million-square-foot, mixed-used project being developed by a joint venture between Concord Eastridge, Future Cities and Harris Sports & Entertainment. The multi-block development project will be located at the southeast corner of University Drive and Mill Avenue in downtown Tempe’s Mill Avenue District.

Construction on the project is slated to begin next month and will host ±240,000 square feet of office space in two buildings fronting Mill Avenue. Portions of the 5- to 6-story offices are preleased to USA Basketball, which will be relocating its headquarters to USA Place from Colorado Springs, Colo.

USA Basketball announced its decision to relocate to Tempe last summer amid much excitement. The nonprofit organization is the national governing body for men’s and women’s basketball in the United States, including International Basketball Federation (FIBA) and the United States Olympic Committee (USOC) related programming. In addition to the headquarter offices, a new 4,500-seat, multi-court event center will serve as the training site for USA Basketball primarily in the summer months and for regional youth and adult recreational and competitive athletics programming the rest of the year.

“Attracting an organization like USA Basketball to Tempe is a huge win for the metro area and was really the catalyst for the development of USA Place,” said CBRE’s Jerry Roberts, who along with Corey Hawley and Pat Boyle will head up the marketing and leasing team for USA Place’s office space. “Between the programming and events offered by USA Basketball, its adjacency to ASU and the incoming Omni Hotel and Convention Center, USA Place is going to draw hundreds of thousands of visitors to Tempe every year. The Mill Avenue District is already considered the premier urban destination in greater Phoenix and USA Place will only add to that.”

In addition to the estimated 300,000 visitors per year USA Place will draw, the state-of-the-art project is expected to draw the interest of major companies looking to locate or expand in metropolitan Phoenix. The development’s planned ±240,000 square feet of office space will be designed as class A additions to the downtown Tempe market, and will likely be met with high demand as Tempe continues to exceed industry market conditions with an overall class A office vacancy rate of 3.8 percent and downtown rate of only 3.4 percent.

“There is an increasing shortage of quality, contiguous office space across the Valley, and particularly in Tempe. USA Place will offer large blocks of space that will be unmatched in terms of location and quality,” said Roberts. “The Mill Avenue District already offers an amenity base that is unrivaled in terms of walkability and urban appeal and the addition of USA Place will only add to that.”

USA Place will be located in the core of a major employment hub with more than 200,000 jobs in a five mile radius; and there are numerous restaurant, retail and entertainment options within blocks of the project, in addition to those that will be available on-site once USA Place is completed.

At build out, the ±10-acre USA Place will feature more than 240,000 square feet of class A office space; ±180,000 square feet of retail space; a 390-room, 14-story, luxury, four-diamond Omni Hotel and Conference Center; 4,500-seat event center that will host USA Basketball, the AIA, and other community events. Additionally, more than 500 luxury apartments and lofts will be situated above the interior street-level retail space.

Jerry Roberts can be reached at (602) 735.5528, Corey Hawley is at (602) 735.1742 and Pat Boyle is at (602) 735.5275.

 

The principals of USA Place, LLC Susan Eastridge, CEO of Concord Eastridge, Michael Hallmark, principal of Future Cities, and Robert Harris, CEO of Harris Sports & Entertainment are in final stages to realize USA Place, a $350 million mixed-use project in Downtown Tempe.

Eastridge’s experience includes the development of more than 7 million-square-feet of commercial space valued in excess of $1.5 billion and the acquisition/disposition of approximately $900 million in commercial property.

Founded by Hallmark and Sean Duncan, Future Cities is a planning and development company that leads in the creation of destination venues, attractions and fan/guest experiences all within the context of better-planned and more sustainable urban communities. Prior to founding Harris Sports & Entertainment, a venue and events management firm, Harris served as VP of the Phoenix Suns where he played an integral role in the franchise’s business operations from 1992 – 20006. Harris will manage the facility and create original programming for the center including tournaments, camps, leagues and clinics.

This is the first of a new breed of these kinds of facilities,” said architect Michael Hallmark, an ASU graduate who has worked on such projects as US Airways Center and Chase Field.

The new 330-room Omni Hotel and 30,000-square-foot conference center on 10.5-acres at the southeast corner of Mill Ave. and University Dr. is subject to final approval by Tempe City Council and Arizona Board of Regents.

In addition to the hotel and conference center, USA Place will include a new national headquarters and training center for USA Basketball, a 4,500-seat event center, 500 luxury apartments, 160,000 sq. ft. of retail space and up to 200,000 sq. ft. of office, including the new home for Arizona Interscholastic Association events.

At a Board meeting on July 25, USA Basketball’s Board of Directors approved the move to Tempe and USA Place as the home of its new national headquarters and training center from its current location in Colorado Springs, CO.

“This is a big-time move for USA Basketball, one that I personally have been dreaming about for some time,” said Jerry Colangelo, USA Basketball chairman and former Phoenix Suns chairman/CEO. “All of amateur basketball will flow through our facility. It’s going to make its mark on the game that I feel so passionate about.”

The complex could draw more than 300,000 people to Tempe annually, developers said. In addition to the Olympic teams, USA Basketball chooses rosters for the world championships and other international competitions and holds tryouts and training camps for national teams of various ages.

The full-service Omni Hotel will be Tempe’s first four-diamond hotel. With 58 distinctive luxury hotels and resorts across North America, Omni Hotels & Resorts is recognized as a market leader for group and transient business as well as with leisure travelers. Omni executives recognize the Tempe site and development concept as important to Omni’s brand.

“USA Place is our first property development in the Valley, which is important to our brand development strategy as well as for our guests,” said Mike Deitemeyer, president of Omni Hotels & Resorts. “The complex presents Tempe with great synergistic opportunities, and we are committed to ensuring that the Omni Tempe Hotel, and our team, is engaged in the Tempe community, Greater Phoenix region and state.”

The adjacent 30,000-square-foot conference center will feature a grand ballroom capable of seating 1,000 for dining, a junior ballroom and meeting space. A new multi-court event center, with seating up to 4,500, will serve as the training site for USA Basketball primarily in the summer months and for regional youth and adult recreational and competitive athletics programming the rest of the year.

“This is an exciting and an incredible opportunity that offers nothing but positives for USA Basketball,” said Colangelo. “USA Place will offer USA Basketball an excellent site for the development of its office headquarters, a training center and event center that will provide the organization with a first-class site for hosting junior level events and will allow USA Basketball to continue to evolve.”

Colangelo continued, “The new USA Basketball headquarters and training center will be first-class, state of art facilities, something I know we will be very proud of.”

In addition to USA Basketball, the Arizona Interscholastic Association (AIA) will also host programming at the event center, which will include post season state high school tournaments for boys and girls basketball, volleyball, wrestling, badminton and spiritline. High schools will also have an opportunity to participate in regular season “Games-of-the-Week” there. AIA is the primary governing body for high school athletics in Arizona.

AIA’s Chuck Schmidt believes the move will create more opportunity for AIA programs. “We’re very excited to have a permanent home where we can host our events. Being able to share a home court with USA Basketball will be a remarkable experience for our kids,” he said.

In June, the Arizona Board of Regents, which oversees the state universities, gave ASU permission to enter into a lease-option agreement for up to 99 years with USA Place LLC. The site is located next to ASU’s Tempe campus on land owned by ASU. ASU and the City of Tempe have formed a partnership to support the creation of the conference center and as a result, the conference center will revert to public ownership after twenty years. The project will be built with private money. Tempe spokeswoman Nikki Ripley said various aspects are still being negotiated.

The way it looks now, ASU would receive revenue from the hotel and rebate a portion of that up to $800,000 annually to the conference center for 20 years. At the end of that time, ownership of the conference center would revert to the university. The city of Tempe will collect bed taxes and other taxes from the hotel and rebate a portion up to $800,000 annually to the conference center during the same time frame.

Construction of the project is planned to begin by year-end with the hotel, conference center, event center and first phase of residential, retail and office scheduled to open during the second half of 2015.

There were no brokers involved in the negotiations.