courtesy of BREW, Sept 2014
Tempe – The red hot market in Tempe is getting even hotter as new hotel and office towers are planned on Mill Avenue alongside the landmark Monti’s La Casa Vieja restaurant. The $150 + million office-hotel project is targeted for a 2.5-acre site located at the southwest corner of Mill Avenue and Rio Salado Parkway. The development is planned by a venture formed by Douglas Wilson Cos. in San Diego, Calif. (Douglas Wilson, chairman) and Phelps Development LLC, a subsidiary of Hensel Phelps in Greeley, Colo. (Jeff Wenaas, pres.). A portion of the Monti’s restaurant, called Hayden House, will be preserved in the development. The historic registry building will be flanked by a 16-story hotel with 274 rooms and a 14-story office structure with 280,000 sq. ft. of space. A company formed by Wilson and Phelps is acquiring the property from Michael Monti’s Restaurant and Catering Inc. in Tempe (Michael Monti, Ralph Goitia, principals). Sources say the venture is expected to pay $17 + million to purchase the site in a sale set to close in mid-October. The deal is being brokered by Brent Moser,Mike Sutton and Brooks Griffith of Cassidy Turley in Phoenix. The planned buildings, for now being called Mill & Rio Salado, is described by the developer as a mixed-use creative office and lifestyle hotel project. While Wilson/Phelps has yet to file a zoning application, representatives of the development team have been talking with Tempe officials about their vision for the project. The venture is just starting the zoning process, but construction could be underway by mid-2015 with completion coming in 2017. The Kimpton Hotel & Restaurant Group Inc. is in negotiations to be the operator of a boutique hotel on the Tempe site. Two years ago Kimpton opened Hotel Palomar, a 242-room trendy and popular destination within the CityScape project in downtown Phoenix. The vibrant Kimpton hotel brand is expected to fit well in the Mill Avenue District with the area’s nightlife and proximity to Arizona State University. A preliminary site plan from SA+R in Denver, Colo. (Shears Adkins Rockmore) shows 872,669 sq. ft. of buildings, including the hotel and office towers and a 323,416-square-foot parking garage with 1,057 spaces. That structure will have two levels below grade and five levels above grade that will serve as a pedestal for the office tower. Tentative plans include 11,000 sq. ft. of meeting space and 6,000 sq. ft. of restaurant and grade level retail. Hensel Phelps will serve as construction manager and general contractor. Development cost (land and buildings) estimated at $150 + million. Financing for the project is being arranged by Tim Wright of HFF L.P. in San Diego (Holiday Fenoglio Fowler). Tempe has been a magnate for office users and the newly-planned tower on Mill Avenue should have significant interest from tenants. “Today’s employers are moving to where the employee wants to live, work and play and this is being witnessed in select markets across the country,” says Nicholas Wilson, managing director at Douglas Wilson Cos. “We have identified downtown Tempe as one of those markets and are thrilled to bring a world class development to Mill Avenue.” The office leasing at Mill & Rio Salado will be handled by Jerry Noble, Pat Devine and Greg Mayer of Cushman & Wakefield of Arizona Inc. in Phoenix. The privately-held Douglas Wilson Cos. is involved in real estate construction, brokerage and asset management. The company is known to be one of the largest troubled asset and receivership firms in the U.S. Hensel Phelps is an employee-owned construction management company and general contractor with offices located across the country. Douglas Wilson Cos. and Phelps Development (Eric Wilson, pres.) have joined forces to develop several projects in the U.S., including The Mark and Park Loft luxury condominium buildings in downtown San Diego. Before starting construction in Tempe, the venture has to amend an existing PAD (Planned Area Development) on the property. That will follow neighborhood meetings, and will require approval from the Historical Preservation Commission, Development Review Commission and City Council in Tempe. The adobe-style Hayden House, which was originally built in 1871 for the Charles Trumbull Hayden family, will be restored and remain in place. The building, with an address of 100 S. Mill Avenue, will likely be operated as a restaurant. In 1956, Leonard Monti, Sr. (Michael Monti’s father) opened Monti’s La Casa Vieja (Spanish for the old house). While the storied restaurant has been expanded over the years to about 9,000 sq. ft., the northern part of the property will be preserved with about 6,000 sq. ft. remaining in place. In 1984, the Hayden House was listed on the National Register of Historic Places. The U-shaped project planned by Wilson/Phelps shows the hotel on the east side of the site and the office tower on the west. The parcel is bounded on the north by Rio Salado Parkway, on the south by Second Street, on the east by Mill Avenue and on the west by Maple Avenue. Learn more from Nicholas Wilson at (619) 641-1141. Mark Watson of Hensel Phelps in Phoenix is at (480) 383-8480. Reach Michael Monti at (480) 967-7594. Talk to Wright at (858) 812-2341. Call the Cassidy Turley agents at (602) 954-9000. Contact the Cushman &Wakefield agents at (602) 253-7900.