Long-Stalled Tempe Condo Towers Reborn as Apartments
The long saga of the construction of Tempe�s tallest residential towers, begun in 2005, may soon reach its final chapter after this week�s ribbon cutting for the project�s new leasing office. Formerly Centerpoint Condominiums, the two-tower development in the heart of Tempe�s Mill Avenue district was recently re-christened West 6th Tempe to signify a switch from condos to rentals, and construction crews have been back at work for several weeks.
Work had been stalled for more than two years while convoluted bankruptcy and legal battles played out, stemming from the collapse of original lender Mortgages Ltd. of Phoenix. Finally last month, Cleveland, Ohio-based developer Zaremba Group won the bid to purchase the property for $30 million from ML Manager, the successor to Mortgages Ltd. It was a far cry from the $135 million that reportedly had been spent on the project up until it was shut down in 2008.
�This has never been an issue about the quality of the project or its feasibility as a place for people to live,� says Tempe Mayor Hugh Hallman at the ceremony. �The stumbling here has been about the quality of the lender, not the buildings.�
It was Zaremba Group�s second attempt at acquiring the project � a deal was struck last year but fell through due to complications stemming from title company requirements.
Kent Chantung, director of development in the Southwest region for Zaremba Group, put together the bid. He says his team got a competitive advantage over other bidders by hiring two consultants who had worked on the project with the original developer, Avenue Communities. �We didn�t have many of the unknowns that the other bidders had,� Chantung says, since his team was able to access budgets, construction schedules and other documentation from the original development.
Zaremba Group also partnered with construction manager Summit Builders of Phoenix prior to the bids. �We sent ten people down here for weeks to go through each unit and come up with a completion list,� says Jeffrey C. Stone, Summit Builders� president and CEO. �It was in great shape � we were pleasantly surprised.� Materials such as millwork that can be susceptible to heat and moisture survived the two-year delay relatively unscathed.
Approximately 80% of the 22-story tower one is completed, but only about 30% of tower two is finished. Much of the mechanical and electrical equipment still needs to be placed. Residents are scheduled to begin moving into the first tower on Aug. 1, with the taller tower available for occupancy in December.
Stone says they made an extra effort to bring many of the same subcontractors back on board to finish the project that had worked on it with the original developer and builder.
Despite the change from high-end condos to rental apartments marketed towards nearby Arizona State University students and faculty, many of the finishes and surface options remain as originally specified. The original architect, Phoenix-based Gould Evans, is returning. Much of the firm�s original design remains the same, except for the amenities on the seventh floor, which originally called for a high-end restaurant, professional demonstration kitchen and concierge services. The new amenities reflect the change to a younger, collegiate-centric audience, with a yoga room, study areas, computer stations, theater-style television room, game room and a pool area with cabanas and fire pits.
West 6th Tempe�s leasing office is itself a sign of the times, occupying one of Tempe�s oldest historic buildings along Mill Avenue that had recently been vacated by clothing retailer American Apparel. Downtown Tempe has struggled to fill empty retail and restaurant spaces since the recession began.
Yet early reaction indicates West Sixth may not have the same difficulty in filling its space. Sandy Hill, senior vice president of Capstone Cos., Birmingham, Ala., says that promoting the project at several student housing fairs at Arizona State University has helped Capstone lease most of the three-bedroom units already. �I would not have guessed that it would have gone this quickly,� Hill says. �There�s been a high level of excitement from students.�