CXLIV - The Tempe era set to begin as ASU opens Mullett Arena

[TheLegend]

Carvana to exit current Tempe HQ once lease expires in 2024

www.bizjournals.com/phoenix/news/2023/04/14/carvana-tempe-hq-lease-expires.html

Then...there will be others downsizing...it appears...as 'backfillers' are always 'bullish'...from that same PBJ article:

"Despite it being the metro's hottest office submarket, high-profile companies including DoorDash, Carvana, OpenDoor, Peloton and Robinhood recently elected to downsize or move out of their Tempe space. High-profile sublease space has hit the market as a result, but brokers are bullish on the prospect of backfilling those spaces on the lakefront."

Everything is not as rosy...because...there could be a repeat of 2008...

Commercial real estate industry on edge as downtown empty office space goes unused

www.foxbusiness.com/economy/commercial-real-estate-industry-edge-downtown-empty-office-space-goes-unused

You know I scanned your entire article and not one reference to Phoenix or Arizona is mentioned.

It also mention there’s a wide variance in reduced space depending on where you are. Tech central cities (ie San Francisco) are the highest.

Also. The your article refers to mainly downtown core cities. Tempe isn’t what I would consider a core city, but it’s worth noting.

But…. Interesting you would try merging text from two different articles as they were one.

 

[Rob]

Completely off topic but I just learned that the Gin Blossoms are from Tempe!

 

[GKJ]

Completely off topic but I just learned that the Gin Blossoms are from Tempe!

Underrated band. They were super well known around the area as I’ve been led to believe.

 

[TheLegend]

Completely off topic but I just learned that the Gin Blossoms are from Tempe!

They sang the national anthem at the last home game.

 

[Boris Zubov]

Completely off topic but I just learned that the Gin Blossoms are from Tempe!

On Allison Road?

 

[mouser]

Some people have wondered why would Meruelo go through all the trouble he is for TED.

This info in this article described below is one reason. Tempe has over 2 million square feet of office space in the planning stages for Tempe Town Lake. While some companies are downsizing (Carvana most recently), realtors of high end office space are very bullish on the market.

(normally their articles are paywalled but I got in through this tweet.)

https://www.bizjournals.com/phoenix/news/2023/04/14/tempe-town-lake-office-leasing.html?csrc=6398&taid=643af440ff23be000133d9be&utm_campaign=trueAnthemTrendingContent&utm_medium=trueAnthem&utm_source=twitter

The State Farm office complex really kicked off Tempe Town Lake. The first two pictures are from January 2003 when I was in a helicopter over the town lake. State Farm is pretty much the only major development on the lake.

The new ASU hockey arena was built slightly off picture to the bottom along with the ASU NOVUS Innovation development corridor currently under construction.

This view is looking westward towards the lake. The empty Northern (right) shore has been fully developed into mostly residential building since then. State Farm is the lone building on the South (left) shore.

The big dirt triangle in the foreground is now a major shopping mall. I forget whether this is where the Cardinals football stadium was proposed? Or further east on Mesa riverview?

Sky Harbor airport is in the far right background.

More recent picture of the development around State Farm, southern shore.

Renderings of the South Pier project currently under construction

 

[Llama19]

Newsmaker: Arizona Coyotes entertainment district. Yea or nay?

Tempe residents will be getting their mail-in ballots to decide if they want to build a new hockey arena for the Arizona Coyotes in a massive entertainment district on the banks of the Salt River, just west of Tempe Town Lake. It's a $2.1 billion project. In the second half of this program, we will hear from Dawn Penich-Thacker, representing the group that opposes the plan, but let's begin with the president and CEO of the Arizona Coyotes, Xavier Gutierrez.

Source (Video): www.fox10phoenix.com/video/1208065

 

[TheLegend]

The State Farm office complex really kicked off Tempe Town Lake. The first two pictures are from January 2003 when I was in a helicopter over the town lake. State Farm is pretty much the only major development on the lake.

View attachment 689611

This view is looking westward towards the lake. The empty Northern (right) shore has been fully developed into mostly residential building since then. State Farm is the lone building on the South (left) shore.

The big dirt triangle in the foreground is now a major shopping mall. I forget whether this is where the Cardinals football stadium was proposed? Or further east on Mesa riverview?

Sky Harbor airport is in the far right background.

View attachment 689610

More recent picture of the development around State Farm, southern shore.

View attachment 689612

Renderings of the South Pier project currently under construction

View attachment 689609

This doesn’t even include the NOVUS development ASU has planned. That’s still in the early stages IIRC.

Edit: Just doing a little more reading and noted some of this is part of NOVUS.

 

[TheLegend]

Newsmaker: Arizona Coyotes entertainment district. Yea or nay?

Tempe residents will be getting their mail-in ballots to decide if they want to build a new hockey arena for the Arizona Coyotes in a massive entertainment district on the banks of the Salt River, just west of Tempe Town Lake. It's a $2.1 billion project. In the second half of this program, we will hear from Dawn Penich-Thacker, representing the group that opposes the plan, but let's begin with the president and CEO of the Arizona Coyotes, Xavier Gutierrez.

Source (Video): www.fox10phoenix.com/video/1208065

Prelude to the AZ Republic debate no doubt.

Pensch-Thacker has been mocking the Meruelos on Twitter lately.

 

[Melrose Munch]

The State Farm office complex really kicked off Tempe Town Lake. The first two pictures are from January 2003 when I was in a helicopter over the town lake. State Farm is pretty much the only major development on the lake.

View attachment 689611

This view is looking westward towards the lake. The empty Northern (right) shore has been fully developed into mostly residential building since then. State Farm is the lone building on the South (left) shore.

The big dirt triangle in the foreground is now a major shopping mall. I forget whether this is where the Cardinals football stadium was proposed? Or further east on Mesa riverview?

Sky Harbor airport is in the far right background.

View attachment 689610

More recent picture of the development around State Farm, southern shore.

View attachment 689612

Renderings of the South Pier project currently under construction

View attachment 689609

Some people have wondered why would Meruelo go through all the trouble he is for TED.

This info in this article described below is one reason. Tempe has over 2 million square feet of office space in the planning stages for Tempe Town Lake. While some companies are downsizing (Carvana most recently), realtors of high end office space are very bullish on the market.

(normally their articles are paywalled but I got in through this tweet.)

https://www.bizjournals.com/phoenix/news/2023/04/14/tempe-town-lake-office-leasing.html?csrc=6398&taid=643af440ff23be000133d9be&utm_campaign=trueAnthemTrendingContent&utm_medium=trueAnthem&utm_source=twitter

This is nice. Glad Tempe is building stuff like this and not just bars.

But why so much office space outside Phoenix proper? Denver is not like this.

 

[mouser]

This is nice. Glad Tempe is building stuff like this and not just bars.

But why so much office space outside Phoenix proper? Denver is not like this.

The Phoenix Business Journal article Legend posted earlier explains it well. The lakefront is highly desired office property. The Tempe lake location also has good access to many of the valley freeways and the local light rail.

Also oddly, downtown Phoenix is very centrally located in the valley, but the freeway ingress and outgress to the two downtown cores is subpar when compared to many other big cities.

 

[TheLegend]

The Phoenix Business Journal article Legend posted earlier explains it well. The lakefront is highly desired office property. The Tempe lake location also has good access to many of the valley freeways and the local light rail.

And it’s as close to Sky Harbor as downtown Phoenix.

Any more wonder out there now as to why Phoenix would like to shut some of this down?

 

[Melrose Munch]

And it’s as close to Sky Harbor as downtown Phoenix.

Any more wonder out there now as to why Phoenix would like to shut some of this down?

The Phoenix Business Journal article Legend posted earlier explains it well. The lakefront is highly desired office property. The Tempe lake location also has good access to many of the valley freeways and the local light rail.

Also oddly, downtown Phoenix is very centrally located in the valley, but the freeway ingress and outgress to the two downtown cores is subpar when compared to many other big cities.

Explains so much, you would think the metropolitan area would like to rally around its major downtown but the Greater Phoenix area seems to have a lot of rivalries. Phoenix vs Tempe being the latest one.

 

[TheLegend]

Knew this was due today, and it's kind of what I expected. Lots and lots of assumptions.... and GCI thinks their assumptions are better.

https://www.azcentral.com/story/news/local/tempe/2023/04/17/new-study-says-tempe-coyotes-deal-wont-be-a-fiscal-win-for-the-city/70119401007/

(article paywalled but it's just the reporter's interpretation of a large study.)


This is the actual report.

https://grandcanyoninstitute.org/wp-content/uploads/2023/04/GCI_Policy_Economic_Analysis_Tempe_Entertainment_District_Apr_17_2023.pdf

Edit: Perusing this report..... GCI admits making a LOT of their own "assumptions". Also just discovered TempeWins announced Bluebird had ASU's Seidmen Research Institute (another think tank within the ASU School of Business) do an "independent study" of TED and their evaluation is getting opposite results from GCI.

That report isn't public yet but they provide a contact for requesting one,

 

[Llama19]

New fiscal impact analysis on proposed Tempe Entertainment District released

The report lists five key findings, focusing on what the district could bring to the city, as well as its impact on surrounding businesses in Tempe and the other arenas in the Valley:

• The arena will "squeeze" the concert and show market in the Phoenix Metropolitan Area.
• For every $2.70 diverted from the city to the community facilities district (CFD), Tempe only receives $1 in new revenue.
• The study that Tempe paid for show net gains that are "highly speculative, fairly arbitrary numbers to evaluate the entire project."
• The Coyotes' position at the TED will have a negligible impact on the Valley's economy, as the team has played in the Phoenix area for more than 30 years.
• Tax revenue to the city is not likely to exceed alternative uses of the site that does not require a community facilities district.

Source (Video): www.abc15.com/news/region-southeast-valley/tempe/new-fiscal-impact-analysis-on-proposed-tempe-entertainment-district-released

 

[TheLegend]

New fiscal impact analysis on proposed Tempe Entertainment District released

The report lists five key findings, focusing on what the district could bring to the city, as well as its impact on surrounding businesses in Tempe and the other arenas in the Valley:

• The arena will "squeeze" the concert and show market in the Phoenix Metropolitan Area.
• For every $2.70 diverted from the city to the community facilities district (CFD), Tempe only receives $1 in new revenue.
• The study that Tempe paid for show net gains that are "highly speculative, fairly arbitrary numbers to evaluate the entire project."
• The Coyotes' position at the TED will have a negligible impact on the Valley's economy, as the team has played in the Phoenix area for more than 30 years.
• Tax revenue to the city is not likely to exceed alternative uses of the site that does not require a community facilities district.

Source (Video): www.abc15.com/news/region-southeast-valley/tempe/new-fiscal-impact-analysis-on-proposed-tempe-entertainment-district-released

Those "key findings" are based on a lot of "assumptions" they admit they're making. But my take on their takes.....

- The arena glut is a legitimate concern.... for Glendale in particular.
- The city isn't diverting anything. The CFD is self contained.
- They admit they're making their own assumptions in their evalulation.
- They're isolating the Coyotes like it's the sole entity when it isn't.
- Anyone could do something with the site, but they can't come up with a valid use that could preclude a CFD. Not with the amount of remediation involved.

Edit: Couple of other observations I had to add to this.....

GCI also used some real dubious examples. At least two of them involved heavily (if not) fully public funded projects (Barclay's and one stadium in Atlanta.) Common sense would be comparing TED with a similar project.

Granted I'm not an economist but I do know how to do comparative assessments.

 

[Yukon Joe]

Knew this was due today, and it's kind of what I expected. Lots and lots of assumptions.... and GCI thinks their assumptions are better.

https://www.azcentral.com/story/news/local/tempe/2023/04/17/new-study-says-tempe-coyotes-deal-wont-be-a-fiscal-win-for-the-city/70119401007/

(article paywalled but it's just the reporter's interpretation of a large study.)


This is the actual report.

https://grandcanyoninstitute.org/wp-content/uploads/2023/04/GCI_Policy_Economic_Analysis_Tempe_Entertainment_District_Apr_17_2023.pdf

Edit: Perusing this report..... GCI admits making a LOT of their own "assumptions". Also just discovered TempeWins announced Bluebird had ASU's Seidmen Research Institute (another think tank within the ASU School of Business) do an "independent study" of TED and their evaluation is getting opposite results from GCI.

That report isn't public yet but they provide a contact for requesting one,

In my heart I suspect that the conclusions of this report are true - that the overall deal will not cover its costs. But making these kind of long-term projections are so hard and it is very easy with just a few "assumptions" to get the conclusion you want. I really don't know the GCI at all so I can't say to what extent they can be trusted or not.

 

[Stumbledore]

Underrated band. They were super well known around the area as I’ve been led to believe.

That's okay, I rarely drink gin anyway.

 

[GKJ]

That's okay, I rarely drink gin anyway.

Only liquor that’s ever made me throw up

 

[Stumbledore]

Only liquor that’s ever made me throw up

The ONLY one? Son, you've lead a very sheltered life.

 

[GKJ]

The ONLY one? Son, you've lead a very sheltered life.

I’ve had my share, I am just good at drinking and not throwing up. In that regard it is very much like a gift.

 

[Stumbledore]

I’ve had my share, I am just good at drinking and not throwing up. In that regard it is very much like a gift.

A most valuable gift! I hope you treasure it for always.

 

[Yukon Joe]

I’ve had my share, I am just good at drinking and not throwing up. In that regard it is very much like a gift.

I dunno man - I'm pretty sure throwing up from alcohol has saved my life on one or two occasions in my 20s...

 

[GKJ]

I dunno man - I'm pretty sure throwing up from alcohol has saved my life on one or two occasions in my 20s...

There was one time I drank and then drank so much water in an effort to sober up that I threw up the water. Only water though.

 

[PredsHead]

But why so much office space outside Phoenix proper? Denver is not like this.

Not sure about other places but in both Nashville and Atlanta its very much like this. Williamson County outside Nashville and Cobb County or Gwinnett County outside Atlanta are home to a large chunk of the office space for those areas. Typically there is some sort of regional economic development board that helps facilitate these moves to keep rivalry down and make sure that rising tides raise all boats.