Monday, March 27, 2006

Developers, politicians clamor to jump on infill wave

The Business Journal of Phoenix - March 24, 2006
by Pete Bolton

The next time you find yourself at an industry event, and in need of some flashy words to throw around during a lull in conversation, why not try these three on for size:

  • Greenfields: Developable land on the fringe. Home of urban sprawl.
  • Brownfields: Abandoned, idle or underused industrial and commercial properties where expansion or redevelopment is complicated by actual or perceived environmental contamination.
  • Grayfields: Vacant or underdeveloped properties that are ripe for redevelopment. Also known as old buildings that need to move on or infill sites.

It's this last point -- infill development -- that seems to be on the minds of everyone these days from Phoenix Mayor Phil Gordon with his Opportunity Corridor to developers and even some ordinary folks not involved in the development business at all.

Why? Because we've spent the past several decades pushing retail and residential development to the outer limits of our Valley and now we are paying the price in the form of longer commutes and increased traffic congestion -- both negatively affecting our quality of life.

Although the transportation system is doing well compared to 10 years ago, the improvements haven't been enough to keep pace with the 160,000 or so people moving to the metro area each year.

Rising land prices in places that used to be considered dirt cheap are driving developers back to the heart of the city.

Now, rather than incur the expense of laying a network of infrastructure in a relatively unpopulated area and waiting for people to show up, developers are taking a long, hard look at the aging Class C and even Class B commercial properties that populate the cores of our cities, and figuring out new ways to develop the underlying land to its highest and best use.

Nobody knows for sure how much of this infill property, in terms of number of acres, exists.

Is it a vacant lot sitting at a prime downtown intersection, or a piece of land down the street that houses a dilapidated, old shopping mall?

The answer is, it's both.

One thing is for sure, however. Residential developers are starting to take hold of the infill concept and commercial developers are hot on their heels.
Consider these projects already in the works:

  • In South Phoenix, Beazer Homes and the city's Community Excellence Project have completed 20 houses near 24th Street and Broadway Road, which are injecting new life into this formerly troubled neighborhood.
  • In Sunnyslope, an affiliate of John C. Lincoln Health Network rebuilt 20 homes in what was a declining area.
  • Trend Homes' Copper Leaf development features 750 new homes in the neighborhood at 24th Street and Roeser Road.
  • Former Phoenix Mayor Paul Johnson is moving ahead with plans to build 195 townhomes on what was a prison site at 32nd and Van Buren streets that used to be a popular strip for streetwalkers.
  • Lauth Property Group is preparing to break ground on Washington Airport Center, a master-planned business park in the heart of Phoenix at 35th and Washington streets, on the site of a former mobile home park.

Ask anyone and they'll tell you infill projects are more cumbersome to undertake than those on the outskirts.

Assembling land can be complicated and time consuming. Permitting and zoning take longer.

Neighbors can present unreasonable obstacles. The recent debate over building heights on the Camelback Corridor is a good example.

And investors see hassles and smaller rates of return.

But, developers are in the business of fulfilling consumer demand. Consumers want shorter commutes and denser, amenity-filled developments.

Municipal leaders also are in the business of fulfilling consumer demand.

As a result, elected officials are going to be faced with the challenge of altering existing planning and zoning regulations to ensure these pieces of infill property ultimately can be developed to their highest and best use.

In the next several years, watch as everything in the core comes under increased scrutiny by developers and redevelopers, all clamoring to accommodate this perceived public need.

What can we do to help, and not hinder, this process?

We can support our civic leaders as they flex to change with the times. And, perhaps most importantly, we can vow to be part of the solution and not part of the problem.

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