A developer consortium will soon replace a former indoor mall in Phoenix with an $850 million retail village and 2,600 homes.
Phoenix IG, which includes Concord Wilshire Capital, TLG Investment Partners, CDS International Holdings and Hines, will bulldoze most of the 65-acre Metrocenter Mall at 9617 North Metro Parkway, 10 miles northwest of Downtown, the Phoenix Business Journal reported.
The developers bought the 1.4 million-square-foot mall in January last year for $50 million.
The Metrocenter Mall, which opened in 1973, closed in June 2020. Demolition is planned by spring. A Walmart Supercenter and self-storage facility will be spared.
Plans for the mall redevelopment, known as the Village, call for 2,600 homes and 150,000 square feet of shops, restaurants and a hotel, built around various plazas.
Concord, TLG, CDS — all based in Florida — and Houston-based Hines had expected to break ground a year ago, with a scheduled completion in seven to eight years. The vertical buildings are expected to take two years each.
But the bulldozers were left parked because of high interest rates and an oversupply of apartments, according to Steve Betts, a consultant for the project with Tucson-based Holualoa Companies.
Last year, Phoenix was the top market for apartment construction, with developers completing more than 20,000 units across Greater Phoenix, compared to an average 8,000 units a year, according to the Business Journal.
“Market conditions have put a pause on most multifamily development projects,” Betts told the Business Journal, adding that higher interest rates have “impacted the viability of new projects.”
A development agreement calls for construction to begin by early 2025.
In June last year, the Phoenix City Council approved an amendment to its development agreement with Phoenix IG to facilitate bond financing through the Phoenix Industrial Development Authority. The financing is expected to be repaid through sales and hotel taxes.
The agreement also included the expansion of a public plaza on the roof of a proposed parking garage and an office for the Phoenix Police Department.
The project, one of a handful of regional mall redevelopments across the Valley, could be a defining development for the Interstate 17 corridor, with housing for workers moving to Phoenix for such employers as Taiwan Semiconductor Manufacturing, according to the Business Journal.
The future Village project will also connect to the latest expansion of Valley Metro’s light rail system, which opened in January and includes the first elevated rail station across I-17.
— Dana Bartholomew
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