Downtown Tucson may be embarking on a new economic boom. For the past five years, downtown has been experiencing a type of economic renaissance unlike anything before, according to Michael Keith, CEO of the Downtown Tucson Partnership, and it may just be the beginning.
“It’s a devising moment,” said Keith. “Are we going to cross over to the next point of development?”
The key is to keep economic development moving through investment, said Keith, adding that the city has to offer strong incentives, particularly when it comes to housing.
“What gets built will be there for 50 years,” said Keith. “It’s going to redefine Tucson.”
With the economic uptick downtown, Tucson may be taking its place among other midsize cities to include Salt Lake City and Portland, but it may also become a contender with bigger cities such as Seattle and Denver.
“The question is: Are we going to be able to do it?” asked Keith. “Can we join them?”
Five areas of economic development
Keith said there have been five specific areas that have spurred the economic growth downtown.
The first is that the public investment of $600 million has resulted in private investors plunking down $250 million into the downtown area.
Second, Keith theorizes that the timing was right for Tucson.
“Tucson is one of the last cities to revitalize downtown,” said Keith. “Young entrepreneurs looking for opportunity felt this was an untouched market.”
Keith said the majority of investment in the area has been from people that were either from Tucson or somewhere within the state.
Third, downtown’s proximity to the University of Arizona was key, especially since UA is landlocked and needed a place to expand.
“The streetcar now made it possible for downtown to become an extension of the campus,” explained Keith.
Fourth, young, tech-savvy individuals wanting to start their own businesses are “flocking” to downtown, where other like-minded tech people are.
“We have seen more tech startups happening downtown in the last six months then in the last 60 years,” said Keith.
These individuals need little space to start, explained Keith, who cited Gangplank, an office which serves as a collaborative workspace at 100 N. Stone Ave., as a perfect example of a shared space being utilized by multiple businesses.
Fifth, baby boomers returning to urban centers are looking for community, culture, convenience and acceptable transportation alternatives.
What’s next for downtown?
With the smaller building phase coming to an end, Keith predicts the next phase of development for downtown will deal with housing, hotels and retail.
“From here on out we are going to see projects from $20 million to $500 million,” he said, adding that, “We ... have done everything we can locally and the next phase will be regional or out-of-state developers.”
Recently it was announced that AC Hotels by Marriott may be coming to downtown, with construction possibly beginning in the spring of 2014. The $27 million hotel, which is being developed by Scott Stiteler, would be located near the intersection of Broadway and Fifth Avenue.
There remains much to develop downtown. There are 63 lots to be developed there, which account for 4 million square feet of land, Keith said. If all of the lots are built multi-story, that could be 16 million square feet of real estate.
At $150 a square foot, if everything is built to capacity, Keith estimates that could bring in a total of $2.44 billion for the entire development over the project’s lifespan.
There is also the Ronstandt Transit Center, 215 E. Congress St., that covers four acres that could be developed.
“Investors will have to be aware of the transit function and will have to include it into their plans,” Keith said.
Keith predicts that the economic boom that has been seen over the last five years will continue as long as certain variables remain in place.
“We haven’t had a period like this,” said Keith. “There will be an end at some point, but we need to keep it going as long as possible.”
The Downtown Tucson Partnership, 110 E. Pennington St., Suite 150, works with brokers, property owners and developers in downtown Tucson. For more information about property available for purchase downtown, go to email@example.com or call 520-837-6501.