Rebirth of downtown pulling in new, young urban dwellers - Inside Tucson Business: News

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Rebirth of downtown pulling in new, young urban dwellers

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Posted: Wednesday, April 30, 2014 5:48 pm

In the past six years, more than $1.1 billion in public and private investment has helped revitalize Tucson’s downtown corridor, city officials say.

Tucson Mayor Jonathan Rothschild said investment in new housing developments and the streetcar has transformed downtown and made the area more attractive to potential investors and residents.

“The fun part about it is taking people downtown who haven’t been downtown in years and just watching as their eyes get bigger,” Rothschild said. “It’s even fun for those of us who work downtown or live close to downtown because it seems like every week we’re seeing something new.”

Rothschild said the plan for the revitalization of Tucson is to begin at the core and push out as far as possible throughout the valley. He said a number of healthy major cities have used this approach to develop their urban areas.

As a result, he believes that there is a growing sense of community within the downtown corridor.

“I think it’s good for the whole community,” he said. “The more health we can have in that core area, it will be a bigger benefit to the entire valley.”

The linchpin to a burgeoning, bustling and prosperous downtown are residents. And the change in downtown has created a rise in the number of people living downtown, which is in turn helping push downtown revitalization.

Urban Living

New and updated housing developments in the downtown corridor have persuaded Tucsonans to move into the city center and adopt urban-style living.

Emmary Simpson, a realtor for Tierra Antigua Realty, said her “phone is blowing up” about properties along the streetcar route.

“The streetcar is bringing so many people down to look,” she said.

Prospective residents are most attracted to the idea of urban living, which is an alternative to a suburban-style spoke-and-wheel setup, where houses spoke out from commercial centers, like grocery stores and gas stations, according to Simpson. Urban living attracts people who desire to compact their living area, she said.

“People are still trying to grasp the concept of urban living,” Simpson said. “Urban living is a smaller space because you’re not really doing a lot of living at your home, you’re out at the business, you’re out at a restaurant, you’re out hanging with friends, that kind of thing.”

The streetcar helps propagate another characteristic of urban living, which is to avoid driving cars, or parking them and leaving them in one spot while you walk around, she said.

Simpson said people who live in downtown save a lot of money keeping their cars parked, which reduces their cost of living as compared to those who live in the suburbs. The biggest difference is that people living downtown tend to spend more on entertainment, she said.

While the popularity has driven up the price of housing along the streetcar route, MaryLou Thompson, a broker for Tierra Antigua Realty, said sales remain brisk.

“It’s an exciting place to live because everyone is interacting with each other,” Thompson said. “The streetcar has transformed Tucson.”

Properties along public transit tend to have more value, according to raillife.com, a website that tracks the economic impact of Phoenix’s Light Rail.

Housing options located within half-mile of public transportation are worth 41 percent more than those outside the area, according to a study commissioned by the American Public Transportation Association and the National Association of REALTORS published in September. The study looked at the sales data over the past five years in major cities with various public transportation options.

Simpson said she believes that while urban living mostly attracts the younger generation, there is a lot of diversity in potential residents.

“It has really run the gamut with the age groups and demographics that we’ve seen wanting to purchase in there,” she said.

In terms of alternative transportation, adults between 20 and 34 years old have the lowest vehicle licensing rate in the history of the country, according to Downtown Tucson Partnership CEO Michael Keith. Also, 70 percent of downtown Tucson neighborhood residents either bike or walk into downtown, he said.

This bodes well for Tucson as national studies have shown that cyclists and pedestrians boost downtown economies because they spend more time and money there, Keith said.

“Cities that have embraced their bike-ped communities have created a very healthy economic environment,” Keith said.

Despite a number of new housing developments along the route, including Herbert Residential, 202 E. 12th St, The Cadence, 350 E. Congress St., and One East, 1 E. Broadway Blvd., Simpson said there is still a shortage of housing options.

“We’re hoping that we get some more developers taking a look down here and helping us alleviate some of the need that we need as far as housing goes,” she said.

Emphasis on Community

Downtown revitalization is being driven by two groups of people, baby boomers, or people born shortly after World War II, and millennials, or people born in the late 20th Century, according to Michael Keith.

“When the renaissance started about 72 months ago, with each success and each new addition of retail or restaurant, downtown became more and more interesting to a wide swatch of demographics,” he said.

Baby boomers are looking for convenience, culture and community, while millennials are flocking to areas with like-minded people where they can live, work, play and collaborate, Keith said.

Keith said that these two groups have brought a co-working and co-living movement to Tucson.

The co-working movement has led to the creation of downtown hackerspaces, or community-operated workspaces for people with common interests to meet and socialize. The newest workspace, Connect Coworking, located at 33 S. 5th Ave, is the fourth hackerspace, joining CoLab Workspace, 17 E. Pennington St., Xerocraft, 101 W. Sixth St., and Maker House, 283 N. Stone Ave.

Keith said hackerspaces are appealing to such a wide range of people that even former Tucson Mayor Bob Walkup works on his laptop downtown.

Urban Land Institute’s 2014 Emerging Trends in Real Estate Report focused on the co-living movement across the United States. 20.8 percent of people living in Tucson are aged 20-34, according to report. The number of millennials is projected to grow by 10.9 percent over the next five years, according to the report.

Despite the national trend of shared living spaces and an anticipated growth in the number of millennials locally, Ginger Kneup, who publishes the monthly Southern Arizona Housing Market Letter for Sahuarita-based Bright Future Real Estate Research, doesn’t believe the idea of continuing the college lifestyle has made its way to Tucson.

Kneup said that people are leaving Tucson because they can’t find jobs, and as long as that’s the case, college-aged Tucsonans will continue to be a transient population.

“I think when people leave college they have certain expectations about how much money they should or want to be making and most people are leaving school saddled with debt,” Kneup said. “Until that changes, I’m not sure the whole group rental concept is going to affect our market or change any dynamics. No one can afford to stay right now.”

State of the Tucson Housing Market

Despite an increase in the number of Tucsonans moving downtown, the Tucson housing market experienced a poor first quarter in 2014, Kneup said. While the resale market is improving, the demand for new home permits has been flat over the last six months, she said.

“There is a shift to the resale market because pricing did not accelerate as much in the resale market as it did in the new home market,” Kneup said. “It’s almost as if we need to take a breather in the new home market, so that the resale market can achieve some appreciation because demand has shifted to that sector.”

Despite the underwhelming numbers, Kneup said she isn’t surprised that there is a lot of investment going on along the streetcar route because there is pent-up demand from people coming from the university.

“I think that there are a lot of people that would like to be in Tucson and stay in Tucson when they graduate from the University of Arizona,” she said. “If they can get a job that supports the lifestyle they want, they would prefer to be downtown.”

Kneup said that while more people are choosing to live downtown, it’s not affecting the market share coming out of the suburbs because the two areas have different buyer profiles.

Somebody looking at downtown is more likely to take advantage of amenities they can walk to, while people who live in the suburbs tend to not spend as much time out on the town, according to Kneup.

“There won’t be buyers swept away from other areas of town because they’re going to the core,” she said. “It just provides more opportunity that we haven’t had in the past.”

Kneup said the city is only issuing permits on the outskirts of the city, making the area outside the city center the only new home market. People move out of town because they would rather have a newer home, which are more valuable, she said.

Regardless, Kneup fully expects downtown revitalization to impact the housing market positively throughout Tucson.

“I think that downtown revitalization and the addition of the streetcar connecting to the university is all extremely positive for all of Tucson,” she said. “Anything that energizes the community and keeps people here is good for the housing market as a whole, both new and resale.”

Builders recorded good sales in April and the city will hopefully see higher permit volumes as it heads into the summer, Kneup said.

The Missing Piece

Part of what downtown residents said was missing was a grocery store. However, former Rincon Market co-owner Paul Cisek, in conjunction with the city council, announced on April 17 plans to construct the first full-service grocery store in downtown in roughly 40 years.

“While I knew that downtown needed a market, I had no idea about the mutual outcry for a market that we really experienced after deciding to kind of go into the process of the project,” Cisek said. “It was a bit surprising.”

Cisek, who will own the 6,000-square foot Johnny Gibson’s Downtown Market with his wife Christi and current Rincon Market owners Ron and Kelly Abbott, said that the grocery store will provide general and specialty groceries, fresh produce, meats and fish and household basics.

“It’s obviously going to give some real goods and services that are tangible like the availability of produce and meats and fresh fruits,” Paul Cisek said. “People are going to feel secure that there’s a place to get food that’s nearby.”

The grocery store is named after Gibson, a late downtown entrepreneur who owned a barbershop for more than 50 years, as well as a fitness equipment showroom, Cisek said.

Cisek said that the space could see up to $1.5 million worth of improvements.

“The more investment that happens downtown, it encourages people to get off the sidelines and really think that downtown may be a viable option for them,” he said.

The market is located in the space formerly occupied by the Beowulf Alley Theatre, 11 S. Sixth Ave., and is scheduled to open on Dec. 1.

Along with the opening of the streetcar line on July 25, the market is the final step to creating a complete car-free urban lifestyle, according to Michael Keith.

Downtown residents will be able to go to work, the university, Fourth Avenue, Downtown and home without using a single drop of gas, connecting their personal, private and professional lives, Keith said.

What’s next?

Mayor Rothschild said the market was a step in the right direction for downtown revitalization, but there is still a number of things to do.

Washington D.C. based-Urban Land Institute visited Tucson in November to provide advisory services on land use in the downtown corridor. Even though there was modest improvement in the local economy, the city had yet to recover from the economic downturn, which saw 9 percent of workers lose their jobs, the report said.

Based off the information they were able to find, they broke their recommendations down into suggestions: 1) public leadership, community outreach, and transparency are essential given the people of Tucson’s skepticism about government and urban development and 2) because of market and economic realities, a small-scale, incremental development strategy should be implemented instead of a big-bang approach.

“They said that the downtown core is one of the hot markets in the United States because of this renaissance,” Rothschild said. “One of the things they did say was not to think in terms of giant projects but more medium projects.”

Rothschild said ULI told the governments, developers and businesses that paid for the survey that the “Eastside of downtown is taking off and is going to take care of itself because the synergy is there.”

However, ULI is concerned about moving the development west because of the presence of older developments that are in need of renovations or need to be torn down.

Rothschild listed a hotel, Tucson Convention Center renovations, workforce development, housing and more retail shops as downtown’s current priority list. ULI also saw a real opportunity for development at the west end of the streetcar, as there is a lot of undeveloped land, Rothschild said.

“I think that’s what we’ll see over the next few years,” he said. “I’m hoping.”

Also on the priority list is the proposal for the redevelopment of the Ronstadt Transit Center, 215 E. Congress St., which would either keep the hub in its current location or move it north to where the old train station is, according to Rothschild.

“I think ultimately what we would be looking for is retail, particularly office and residential,” he said. “We’ve asked that that incorporates a transit center or transit hub into that development.”

A request for proposals for the Ronstadt Transit Center is due in August, Rothschild said.

LIVING DOWNTOWN

Herbert Residential

Address: 202 E. 12th St.

Year Opened: October 2013

Number of Units: 144 (Studio and 1 Bedroom)

Square Foot: 450-600 square feet

Rent: $550-910/month

Occupancy: 82 percent

Phone: 520-777-5771

Website: herbertliving.com

One North Fifth

Address: 1 N. 5th Ave.

Year Opened: 1966 (Renovated in 2008)

Number of Units: 96 (Studio and 1 Bedroom)

Square Foot: 427-627 square feet

Rent: $625-750/month

Occupancy: 100 percent

Phone: 520-791-2008

Website: onenorthfifth.com

The Cadence

Address: 350 E. Congress St.

Year Opened: August 2013

Number of Units: 190 (Studio, 1 Bedroom, 2 Bedroom, 3 Bedroom, 4 Bedroom, 5 Bedroom)

Square Foot: 431-2,162 square feet

Rent: $696-1,180/month

Occupancy: 99 percent

Phone: 520-882-0777

Website: thecadencetucson.com

The Flats at Julian Drew Block Apartments

Address: 128 S. 5th Ave.

Year Opened: 1964 (Most recently renovated in December 2012)

Number of Units: 83 (Studio, 1 Bedroom, 2 Bedroom)

Square Foot: 375-1,116 square feet

Price: $105,000-$147,000 ($634-$1,224/month)

Occupancy: 94 percent

Phone: 520-882-6480

Website: therentalflats.com

One East

Address: 1 E. Broadway

Year Opened: December 2013

Number of Units: 24

Square Foot: 718 square feet

Rent: $1184-1214

Occupancy: 100 percent

Phone: 520-792-4000

Website: oneeasttucson.com

LIVING DOWNTOWN

Jose Sandoval

Age: 28

Years Lived in Downtown: 3

Years Lived in Southern Arizona: 28

Location: 14th and Scott

Occupation: Intern, Swaim Associates Architects/Server, Casa Vicente

History in Southern Arizona: Born and raised in Tucson, Graduated from University of Arizona in 2013

Favorite Places Downtown: Hotel Congress, 311 E. Congress St., and Tap and Bottle, 403 N. 6th Ave.

Why did you move downtown? “There was an apartment available so I jumped right on it. I knew that I was going to be able to ride my bike to school and work was right there, so that was one of the big issues. And the location was awesome.”

Why did you stay downtown? “There was no reason to leave. Transportation is great. With a bicycle I can get everywhere. I really believe in trying to erase your carbon footprint, so I try to use public transportation as much as I can. I think I’ll definitely stay because there’s no reason for me to move elsewhere until I want to buy land.”

What is the most difficult thing about living downtown? “Nothing. I found it very easy.”

What is missing from downtown? “That’s hard to say because a long time ago there was a lot of things missing. There weren’t enough places to eat. There weren’t enough places to have a beverage or cocktail. But now all those kinds of places are all sprouting. I think that the grocery store was definitely a big one but now that that’s in the works I don’t know what else.”

How do you feel about downtown revitalization? “I think it’s awesome for Tucson and for the economy. It’s giving people a big sense of community. I think it’s just all around a good thing and I just hope it lasts. I’m confident that it will.”

What do you see for the future of Tucson? “I think there are great hopes for Tucson. We’re putting ourselves on the map nationally. We’re kind of this tucked away little city in the corner of the country but I think it’s going to be a destination for people to travel to.”

Shannon Fennie

Age: 50

Years Lived in Downtown: Five Months

Years Lived in Southern Arizona: 45

Location: Herbert Residential

Occupation: Nurse Practitioner, El Rio Community Health Center

History in Southern Arizona: Went to high school and college in Tucson

Favorite Place Downtown: Hotel Congress, 311 E. Congress St.

Why did you move downtown? “We (her husband Tim) decided to move downtown because we were always down here doing things. We loved the Congress Hotel and spent several anniversaries at the Congress Hotel. We’ve always lived on the East side and the Northeast side, but we sold our house and decided to have an adventure. This is our adventure.”

What’s your favorite part about downtown? “It’s fun to just walk to different events. We can walk to the Rialto Theatre and go to a concert. We can just walk to dinner so that’s been really fun. There is just so much to do.”

What is the most difficult thing about living downtown? “Parking for friends who come visit us down here. But it isn’t really that big of a deal honestly.”

What is missing from downtown? “I don’t feel like anything is missing.”

How do you feel about downtown revitalization? “I’ve basically grown up here so it’s very fun to see downtown come so alive.”

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