CityNorth, the beleaguered mixed-use development in north Phoenix, has been hit with a $290-million foreclosure. Specifically targeting the project's retail centerpiece, CityCenter of CityNorth along High Street, the lender Capmark Finance Inc. filed foreclosure proceedings last week against developers, according to the Phoenix Business Journal.
While developers and analysts blame bad timing and the recession for the project's misfortune, were there other reasons that could have been prevented?
Chicago-based Thomas J. Klutznick Co., which has been developing the Desert Ridge area around CityNorth since the 1980s, and New York City-based Related Cos., through its Related Urban Development division, partnered on the $1-billion, 70-acre mixed-use component of the multi-phase project. High Street, the first phase opened in October 2008, was to feature 44 retail stores, seven restaurants, Class A office space and 99 condominiums within 667,000 sq ft, but the timing of the opening coincided with one of the most severe economic downturns in years in Phoenix and the rest of the U.S.
As a result, a future phase with key project anchors Bloomingdale's and Macy's was put on hold and Nordtrom's pulled out completely. In a recent visit to High Street, it was clear that the delayed phases have in effect marooned the completed phase to a self-contained, barren retail island.
My first attempt to visit the site actually ended in failure. Driving from the popular Desert Ridge shopping center to the west, I managed to completely miss the entrance to CityNorth. After driving around for 10 minutes, I gave up. Now, anyone can get lost, but I'm normally an excellent navigator and have lived in Phoenix for 17 years. If I couldn't find the entrance, how is your average tourist going to?
Upon my second visit, this time from the east via the Loop 101, I was greeted with ample signage but the development still lacked a cohesive entrance -- I felt like the road I was instructed to take via the existing signage was the service entrance. Finally driving down High Street, I was impressed with the clean, attractive mix of building materials and the facade and landscaping design, but the sum of its parts left me empty (and indeed, it was literally empty as well - devoid of any pedestrian traffic). Unlike nearby Kierland Commons, which engages its surroundings while offering the fantasy of an Americana-like main street setting through a network of four shop-lined streets, or Santan Village, with its vibrant suburban pedestrian mall atmosphere, High Street is basically one single boulevard recreating a typical urban street in Chicago. It may be just an optical illusion, but the main wayfare seems more closed-in and confined than Kierland or Santan.
Another problem is the confusing naming and branding. The area of CityNorth housing the retail, restaurants and offices is named CityCenter of CityNorth. The first phase of CityCenter of CityNorth is named High Street. I couldn't find a name for the yet-to-begin next phase that will include Bloomingdale's. And of course all this is not to be confused with CityScape in Phoenix or CityCenter in Las Vegas.
The one part of CityNorth that seemed vibrant when I went there were the restaurants. But do I tell my friends to meet me for lunch at High Street? Or CityNorth? Or CityCenter? Instead, I think I'll go meet them in downtown Tempe, and encourage developers to put a hiatus on these vague, uninformative, grammatically incorrect modern project names.
But the most significant problem with CityNorth has nothing to do with the project itself, but in the slap-dash development afflicting north Phoenix. While the project designers Elkus Manfredi Architects of Boston and the Scottsdale office of Nelsen Partners deem their attractive design as 'desert modern', the reality is that the project's location has little to do with desert at all. The surrounding landscape has been stripped of any semblance of desert. Just look at the site from the satellite imagery on Google Earth and you'll see a blank slate landscape wiped clean. While this isn't the fault of the designers, it adds to CityNorth's island effect -- it is quite literally surrounded by nothing. This is exacerbated by the haphazard urban planning of north Phoenix: isolated mega-projects sited miles from each other surrounded by undeveloped land. Each project is impressive, but makes no attempt to relate to one another--an essential component in trying to formulate a community. Being inside any of the area's otherwise attractive developments is evocative of standing inside a gilded cage.
As if that wasn't enough, the developers await an Arizona Supreme Court decision determining whether or not to overturn a $97.4-million tax credit deal between the developer and the City of Phoenix. In a lower court, the Goldwater Institute successfully argued that the deal was unconstitutional.
The Arizona Republic ran this interesting retrospective on visionary yet ultimately failed developments of the past 20 years in Phoenix, including the Esplanade, Scottsdale Galleria and CityNorth. In the end, the Esplanade and Galleria ended up as viable and successful properties. Let's hope that in 20 years we'll be able to look back upon a successful CityNorth that truly is the 'CityCenter' of a vibrant community that grew to fill in all the dead spaces between north Phoenix's scattered mega-projects.