March 13, 2018
c/o The New York Times Click HERE for article with photos.
PHOENIX — For more than half a century, Phoenix ignored its warehouse district, leaving the area dormant with aging buildings ripe for vandalism. The eyesore felt eerie at night, and no one stepped foot there in the day.
“It was an invisible area,” said the city’s mayor, Greg Stanton. “The city turned its back, and we didn’t put the attention on it that it deserved.”
All that has changed. Following on the heels of other urban renewal efforts across the country, Phoenix officials are helping to transform the zone, south of downtown, into an innovation, technology and creativity hub. They are encouraging developers to salvage structures and use them to woo tenants.
The plan is working, as 110 new businesses have moved in during the last five years. The number is expected to nearly double in three years, said Christine Mackay, the city’s director of community and economic development. The majority of the district’s 36 warehouses have been declared historic landmarks.
Despite the aggressive renovation, community leaders said, it will take 10 to 15 more years before the district matures.
“We are in the awkward teenage years,” said Diana Vowels, general manager at Galvanize Phoenix, a co-working space and tech education firm that occupies one of the warehouses. Although the area is exciting and energetic, amenities such as more dining and housing are still needed, she said.
“We want to keep the incredible fabric of the area as it has been for more than 100 years,” Christine Mackay, Phoenix’s director of community and economic development.
Tech, architectural and creative enterprises have saturated the district, which stretches 14 blocks by six blocks north of Interstate 17. These industries are diversifying Phoenix’s portfolio, which has relied on tourism and real estate, Mayor Stanton said.
But chain-link fences, dirt plots and broken sidewalks are not the things that dream neighborhoods are made of. So at least a dozen public agencies, city departments and community groups are committed to bringing the area up to 21st-century standards. When Mr. Stanton took office six years ago, he made warehouse district revitalization a priority, attending events in the old facilities and promoting it in speeches.
The city has been upgrading infrastructure as part of the capital improvement program, Ms. Mackay said. Buchanan Street, nicknamed Lake Buchanan because it flooded during heavy rains, is now repaired. The city installed LED lighting, replaced sidewalks and added a bike lane.
In spite of the changes, “our goal is to keep this area gritty,” Ms. Mackay said. “It would have been far less costly to demolish all of these old buildings and start new. We want to keep the incredible fabric of the area as it has been for more than 100 years.”
The city has also made provisions to stimulate real estate development and economic growth. Developers wishing to remodel a warehouse or historic building can apply for local grants. By 2023, an extension to the city’s South Central Light Rail will link the district to downtown and beyond, Ms. Mackay said. And the Warehouse District Council, a coalition of local businesses and supporters, meets regularly to discuss ways to brand the neighborhood.
New housing will open in a couple of years. JMA Ventures, a real estate investment firm, will break ground this spring on a 276-unit apartment complex. The project will cost $60 million to $80 million and feature a rooftop pool and glass co-working spaces. Developers intend to incorporate recycled brick and wooden trusses to blend in with the historic surroundings, said Todd Chapman, the president and chief executive of JMA Ventures.
Supporters hope the nostalgic back story is attractive enough to lure many to live and work here.
In the first half of the 20th century, trains stopped at the warehouses to pick up and transport local produce. As trucks and freeways became more widespread, shipping routes were diverted into other communities. By the 1950s, the warehouses were obsolete.
Before 2000, early developers in the district such as Michael Levine, the owner of Levine Machine and Mike Cowley, the president of Cowley Companies, purchased some of the crusty relics with the mission to preserve the area’s architectural history and reoccupy the warehouses. Mr. Levine, a self-described “building sculptor,” said the warehouses were called “bulldozer bait.” For two decades, he has bought and saved seven warehouses, keeping some while selling others to buyers who shared his vision.
In 2007, Steve Rosenstein, an entrepreneur, and his wife, Andi, got their hands on a Levine warehouse, once a Budweiser beer distribution center. Both said the brick building had been love at first sight because it reminded them of the ragtag structures in their hometown, Chicago. Three years later, the Rosensteins opened the Duce, a restaurant and lounge with a boxing ring, a vintage camper where the food is cooked and a boutique selling retro-chic merchandise.
“There was nobody here but us on this little island,” Mr. Rosenstein said. “It was scary, and business was slow.”
By 2013, the Duce hit its stride after it appeared on “Diners, Drive-Ins and Dives” on the Food Network. Soon, regulars came in for drinks and workouts, and they started booking the site for weddings and corporate events.
The funky enterprise’s restaurant is one of the few in the area. “We are working to attract more local operators,” said Brian Cassidy, chairman of the Warehouse District Council and president of CCBG Architects. “The opportunities are here, and we have a great vibe.”
Employers said the environment of a remodeled warehouse set it apart as a recruiting tool. The concept has helped draw workers to WebPT, which sells web-based software for physical therapists. Heidi Jannenga, a co-founder of the firm, acquired an old sausage factory that now showcases a wood barrel ceiling, old pulley systems and polished concrete floors. With the open bullpen layout, the space spurs creativity and collaboration, Ms. Jannenga said.
WebPT fields many requests for tours from curious business owners. Such a visit tipped the scale when Galvanize was deciding its next location. Phoenix officials and WebPT’s owners raved about the area and the expanding tech economy, making a convincing pitch. Since Galvanize Phoenix opened last year, 112 other companies have signed leases and operate with 300 employees in a refurbished grocery warehouse, Ms. Vowels said.
Older firms are also calling the warehouse district home. Scientific Technologies, a 30-year-old Arizona company, leapt at the opportunity to move when its leases in Tucson and Scottsdale expired. The company relocated in January to a converted fruit warehouse.
Compared with a suburban industrial park, “this is just a healthier kind of feel,” the company’s chief executive, Mike Popovich, said.
The area is 12 minutes from Phoenix Sky Harbor International Airport and situated beneath a flight path. Occupants such as Mr. Popovich said the proximity was an asset for customers. Noise from air traffic overhead did not discourage them from locating here.
“We do weddings outside all the time. Airplane noise is not a big deal,” said Joan Fairbanks of Events on Jackson, an event space in the district. “This is like any other city that has noise from trucks and cars.”
Some businesses are airing concerns that include how gentrification will affect the atmosphere of the district and whether the new buildings will match what is already there. With so much building happening so quickly, Mr. Levine and Mr. Rosenstein said the success of the district’s aesthetic future remained to be seen. It all depends on the quality and design of the new buildings, they said.
Other longtime businesses in the district, however, welcome the evolution. Harlan Lee, who owns 90-year-old Sing High Chop Suey, Phoenix’s oldest Chinese restaurant, has been getting many offers to sell his two-story property, once a hotel for transients.
“I’m in my 60s now and the third-generation owner,” he said. “I’ve seen lots of buildings being taken over. Maybe it is time.”