Paradise Valley Mall Redevelopment Clears Zoning Hurdle
The Phoenix City Council approved two measures Wednesday that cleared the way for the long discussed redevelopment of Paradise Valley Mall.
Council’s actions changed the zoning of the current mall area, allowing for taller buildings to be constructed – up to 120 feet in some places. It also changed the density of the current mall area to have up to 3.25 million square feet occupied for nonresidential uses and 3.25 million square feet to be occupied for residential uses.
The City Council also entered into a development agreement during Wednesday’s meeting with the developer of the project – PV RE Devco LLC, an entity owned by Phoenix-based Red Development. The agreement requires the city to reimburse RED for some costs with streets built within the development of the nearly 100-acre property.
Red and mall owner Macerich Co.’s plan for the reimagining of Paradise Valley Mall includes a mix of retail shops, restaurants, a grocery store, multifamily housing, office space and a self-storage facility. The updated zoning will allow up to 2,500 multifamily dwelling units. The plan calls for some of the current businesses operating at the mall to stay there, including the Costco.
Now that the zoning changes have been made, Red and Macerich are expected to make more specific plans for this development public in the coming weeks.
Phoenix Community and Economic Development Director Christine Mackay said the redeveloped mall will be more like Kierland Commons, which is on the boarder of Phoenix and Scottsdale and less than five miles from Paradise Valley Mall, and also owned by Macerich (NYSE: MAC). The plan for Paradise Valley Mall will have retail on the bottom with office or residential spaces up above. Mackay said there will also be dedicated green space and trails for walking and biking throughout the development.
“The experience inside the mall was the experience that people wanted in the ’70s, the ’80s and the ’90s, but it isn’t the experience people want anymore,” Mackay told the Business Journal. “The experience they want is more of that destination lifestyle and that is what (Paradise Valley Mall) needs to become.”
Changing Paradise Valley Mall from an indoor mall to an outdoor mall makes it more flexible and easier to reinvent itself, much like the Biltmore Fashion Park, Mackay said. The Biltmore mall opened 15 years before Paradise Valley Mall, but because it is outdoors, it has been able to reinvent itself a number to times to match consumer trends without major overhauls. Mackay said if done correctly, that could be the future of the Paradise Valley Mall as well.
Given the surrounding neighborhoods and demographics of the area, it is somewhat surprising the state Paradise Valley Mall has been in during the past decade.
Even though it is close to some of the city’s higher-earning households, the mall has been almost lifeless compared to competing centers just miles away such as Kierland Commons or Desert Ridge Marketplace. The mall has had a hard time retaining tenants and attracting new ones. A number of its anchors, including Sears and Dillards have closed their locations at Paradise Valley Mall.
“The mall is failing and will be increasingly challenged in the on-going future to remain a sustainable and viable development,” Red’s attorney Ed Bull wrote in a letter to the city of Phoenix explaining the need for new zoning. “The redevelopment will create additional interest, life, and economic vitality that will benefit the mall, adjacent properties, and the city.”
There has been talk of breathing life back into the center since 2013, when Macerich listed the Paradise Valley Mall as a “property in redevelopment” in its filings with the SEC. At the time it said it would be doing a $25 million to $40 million redevelopment that would be completed between 2014 and 2016.
It has taken the owner of the property a little bit longer to get the right team in place and everyone on the same page, but Mackay is confident this current plan will really happen.
“This time I can look you straight in the eye and tell you Paradise Valley Mall is going to redevelop,” Mackay said.