Every success has a story

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The Collaborative was created to support construction along the light-rail line in Phoenix, Tempe and Mesa. With $20 million in funding provided by LISC and Raza Development Fund, it leveraged $375 million in additional private investment for residential, commercial and health care construction. Soon after the Fund’s four-year anniversary, LISC and Raza added an additional $30 million to grow the fund to $50 million.

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Each success has a story. Here are a few of them.

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Union at Roosevelt

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Around 2008, Seaman got tired of enduring the eyesore at First Avenue and Roosevelt. Light rail construction was wrapping up, with a stop across the street. Seaman and Doug Gannett, his partner at Metrowest Development, knew the right project on the site could be the gateway to downtown and the surrounding neighborhood.

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First, he would have to convince city traffic engineers that streets have a purpose other than zipping cars in and out of downtown. He would ask the city to vacate the street that bisected the property, allow wider sidewalks and more on-street parking.

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Narrowing streets? That went against history. “It was not an easy conversation for them to have,” Seaman recalls. “But it was the beginning of incorporating design features that became a large part of the city’s Complete Streets policy... Roosevelt has become a destination instead of simply a neighborhood you cut through.”

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The city agreed to abandon the street. Seaman could take possession but only after relocating the underground infrastructure, including water lines, storm drains and electric cables.

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Metrowest Development, a neighborhood-scaled developer, didn’t have the millions to pay for the work. Traditional banks wouldn’t loan money without collateral even in good times – and this was the depth of the recession.

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Then Seaman and Gannett heard about the Collaborative, attended its launch, and saw the fund as a perfect fit for their project. LISC recognized what they were trying to do and loaned the money to move the infrastructure. Once that was done, they were able to obtain a traditional construction loan for the $16 million to $17 million project with 80 market-rate apartments, ground-floor retail and restaurant spaces.

 

“It’s sized to the neighborhood. It has an urban scale design,” Seaman says, noting it scores 91 on a 100-point scale for walkability. “I hope it raises the bar.”

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It has, in several ways. When Seaman and Gannett tackled the project, not much was happening downtown outside of large-scale projects such as CityScape and the Arizona State University downtown campus. That’s not surprising. Infill projects are expensive and risky. A “mad gamble,” in Seaman’s words.

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But Metrowest no longer stands alone. “They were one of the first to build directly on the light rail,” says Phoenix village planner Katherine Coles. “Now all the traditional developers are getting on that bandwagon.”

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Seaman and Gannett showed it could be done, and they had many motivations to do so. Profit wasn’t the only one.

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Seaman’s neighbors wanted to see infill development. Walking through the neighborhood, he points out projects his company has tackled. Old, rundown buildings converted into energy efficient condos. Historic homes restored and sold to people who promised to buy them as owner occupants. Small townhouse developments that mesh with the surroundings. Seaman and Gannett had a record of success and neighborhood support before he tackled Union.

 

“Union is the crown jewel of our efforts. The Sustainable Communities Collaborative has been with us since the beginning,” Seaman says.

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Adelante Health Care Center

 

Light streams through floor-to-ceiling windows on both sides of the spacious waiting room. Sit in the cushioned chairs, arranged in a semi-circle, and you can watch light-rail trains roll by on Mesa’s Main Street or students arriving for class at East Valley Institute of Technology.

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The welcoming nature of Adelante Healthcare Mesa doesn’t stop there. Rotating exhibits by Mesa artists line the hallways. In the pediatrics ward, children step on a pond projected on the floor, scattering digital fish or kicking at digital lily pads. Patients sit in easy chairs to talk with doctors, no medical equipment in sight. People walk past the reception desk on their way to yoga classes and community group meetings.

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It’s the first project Tommy Espinoza, CEO of Raza Development Fund, mentions when you ask him to list the Sustainable Communities Collaborative’s biggest hits. “It serves poor families, it’s right on the light rail line, it offers high quality health care and it serves a large Latino population,” he says.

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City leaders, who helped Adelante find a site for the project, are fans, too. “It’s a beautiful building. It’s pedestrian friendly. It’s had a positive effect on the neighborhood,” says Jeff McVay, Mesa’s manager of downtown transformation. “It helps take a broader view of transit-oriented development. You need services around density.”

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When the Collaborative began, the natural focus was on residential development. But there is more to transit-oriented development than apartments, and executive director Shannon Scutari quickly saw opportunities to leverage more than financing.

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Adelante, the first comprehensive health center built on the light-rail line, was the beginning. “It capitalized on health care’s influence with decision makers to move the needle in support of transit-oriented development,” Scutari says.

 

Adelante also shares a characteristic with the Collaborative: Both pursue transformative change.

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Three-fourths of the patients at the Mesa center come from households earning less than $46,000 for a family of four. More than half arrive by public transit. But nothing about the center matches any stereotype. Care is centered on the patient. “I’ve had patients hug me and say, ‘Is this for me? I feel so good when I come to my health center,’ ” says CEO Avein Saaty-Tafoya. Not surprisingly, that has also attracted patients with private insurance, including some who used to go to Mayo Clinics.

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The Adelante Mesa center was built to LEED platinum standards — the first health center in the nation to do so — and not just because it was good for the environment. Operating costs are lower, so money can go into health care instead of electric bills. The building includes two meeting rooms, which are used for elected-official coffees, yoga classes and community meetings. Saaty-Tafoya has set up tax preparation sessions.

 

“We wanted to create infused communities, gathering places,” she says. “It’s more than just a health services clinic. It is a connector.”

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The Lofts at McKinley

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Phoenix is a relatively young city. It blossomed in the age of the automobile, so even downtown areas have a suburban feel. For two decades advocates have been working to reverse that trend and encourage urban-style development.

 

“We’ve been pushing uphill for a long time,” says Dan Klocke, vice president of development for Downtown Phoenix Inc. “Most of the big things are in place: education, 10,000 theater seats, sporting venues, the hospitality industry. Now, it’s time to fill in with residential.”

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To accomplish that, he helped guide the first project to be built under a form-based code that replaced Phoenix’s old suburban zoning in the central city – the Lofts at McKinley, a LEED-platinum, 60-unit apartment complex for low- and moderate-income seniors. It’s walking distance to a light rail stop.

Like Union at Roosevelt, it stands on a piece of land that had been neglected for years. Unlike its neighbors, it sits right on the sidewalk, covering the lot — something the urban form code allows that the old code didn’t. Klocke’s role, supported by the Collaborative, was to work with the community to help neighbors understand why this was a good thing.

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Before the Collaborative formed, “there had been no momentum for good transit-oriented development,” Klocke says. “They helped Valley Metro understand this is more than just a train. They’ve been able to get cities’ attention. They’ve shown how you can leverage light rail to build stronger neighborhoods and improve health.”

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The Newton

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The first time Lorenzo Perez walked into the vacant building at Camelback and Third Avenue, linen tablecloths awaited diners who would not come. The aroma of leather filled the room. “It was the old Beefeater,” he says of the building he was hired to prepare for sale.

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The next time he visited, as a prospective buyer, all that was gone. In the intervening year or two, the place had been vandalized. Copper pipes had been ripped out. Signs of human habitation abounded. “It was like something from the Blair Witch Project.”

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Most people would have rushed away. Not Perez. The woman who hired him to position the building for sale had grown increasingly desperate. Her lender wouldn’t take the building. She wanted Perez to buy it. Eventually, he did, turning it into a neighborhood anchor, the Newton. But kismet had to step in several times:

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• The owners of Changing Hands bookstore happened to be in the audience when he gave a 3½-minute presentation about another adaptive reuse project. They wanted Perez to help find a central Phoenix location for them.

• They just missed buying their first choice. That’s when Perez’s partner, Jon Kitchell, suggested looking at the old Beefeater property. “What if we put an iconic bookstore in an iconic building like the Beefeater?” he said.

• While struggling to pull the deal together, Perez was part of a panel discussing adaptive reuse. At the other end of the table was Shannon Scutari. As Perez described his difficulties in obtaining financing, Scutari spoke up. “You and I need to talk. Because we’re part of this fund and your project sounds like what we want to look at.”

 

The Collaborative hadn’t yet tackled a commercial project along the light rail line, but this one hit every item on the checklist. LISC stepped in with the gap funding Perez needed. The Newton was named the group’s project of the year for 2015.

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Changing Hands and the Southern Rail restaurant complement each other. The meeting room is heavily used for book events, community dinners, political debates and weddings. “We hoped for it to be a place to be educated, nourished, entertained, something different from a shopping center. A lot of people are just hanging out. It’s doing what it was designed to do,” Perez says.

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And that’s just the beginning. Perez says the city heavily supported him because officials saw the vacant building as the epicenter of the neighborhood’s ills. Now that the Newton is thriving, more development is following, reinvigorating the neighborhood. Owners are investing in their property. Perez has more projects in the works.

 

“It’s a low-intensity, high-impact project,” Perez says. “And it never would have gotten done without the Sustainable Communities Collaborative.”