The Jet, a high-rise complex with 675 apartments, could land in downtown Phoenix soon.
As planned, the $200 million project would include 36- and 23-story towers on Second Avenue between Fillmore and Van Buren streets.
The 360-foot tower would be among the tallest buildings downtown.
The Jet is one of two major apartment developments slated for downtown.
The other is Alta Phoenix Lofts, a smaller complex with 332 apartments under construction near the southeastern corner of Fillmore and Third streets. Residents could move in as early as summer 2008. Both projects, close to light rail, are part of a regional apartment-building frenzy fueled by a glut of condo projects, rising rents and a demand for apartments, a real estate expert says.
That’s not the only thing the projects have in common.
Both are getting an eight-year tax break and other incentives from the city that could save the developers millions. The Jet, however, would have about 80 units set aside as affordable housing.
Phoenix leaders are trying to spur housing that regular working people can afford, said Phoenix Councilman Michael Johnson, who supports such incentives.
"We need to make sure that we are setting up downtown so that we have attainable housing," Johnson said. Both projects are in his district.
On Tuesday, the City Council’s housing and neighborhood subcommittee unanimously recommended that the council approve the Jet development deal.
The proposal could go before the council as early as July, said Downtown Development Director John Chan.
Many would-be condo developers are building posh apartments, but the market could be getting saturated, said Ron Brock Jr., vice president of Pierce-Eislen, a Scottsdale multifamily-housing research firm.
"If you build really high-end, you can have them become condos later on," he said.
This year, 32 apartment communities are under construction in the Valley, which would add about 8,000 units to the market, Brock said.
An additional 60 developments are in planning stages and would pump 18,400 units into Valley housing stock over the next 24 months.
Even with thousands of new residents each year, Brock said, the Valley market can usually absorb only about 7,000 new apartments in one year.
The Jet and Alta Phoenix Lofts developers hope to lure downtown workers to their projects.
"This is for downtown workers who are priced out of downtown," said Jim Onken, a partner with UrbanLogic, which is developing the Jet complex.
This is the first project that Onken and Paradise Valley investor Tony Corey have built under their newly formed company. Onken, 59, is a retired real estate development executive from Intrawest, a resort developer.
Construction could begin on the 36-story tower late this year or early 2008, and it could open as early as fall 2009, Onken said.
As planned, it includes 20,000 square feet for shops and 120,000 square feet of office space.
The rents on the affordable units could range from $630 per month for a studio to $1,200 a month for a large one-bedroom, depending on the tenant’s income. The rest of the building would be market rate.
Wood Partners is building the Alta Phoenix project. The apartments will have exposed ductwork and other loft-style details, said David Kubin, a Wood Partners director.
The firm recently finished the Pietra apartments at the Loop 101 and Cave Creek Road in north Phoenix and has plans for apartment projects in Tempe and Peoria.
Alta Phoenix will include 10,000 square feet of retail space and a parking garage.
Wood Partners and UrbanLogic have similar leaseback deals with the city. Under the agreements, Phoenix would acquire the land the buildings occupy after construction is over. The developers would retain control of the building and have ultra-low lease payments.
The setup allows the city to abate excise taxes on each project for eight years. For the Jet, the tax deal could save the developer about $8 million. A figure was not available for Alta Phoenix Lofts.
Jahna Berry
The Arizona Republic
