Tempe may be a landlocked city, but it is not even close to running out of space for new restaurants and stores.
It has lots of neighborhood centers, the new 395,000-square Emerald Design Center east of Ikea, an estimated 2 million square feet of retail space coming to downtown high-rise ground floors, and an undetermined amount of space to be built into nine light-rail stations.
Tempe Marketplace, which is opening this year, also has 1.3 million square feet and is 95 percent leased. Nine businesses are expected to be open there by July.
"We haven’t reached the point where it might seem we have that we flattened out and don’t have more (retail) opportunities," said Chris Salomone, Tempe’s community development manager. "We are not there yet."
And city officials don’t expect any shortage of customers. They will arrive by light rail, stay at the luxury hotels and posh condos being built downtown, and come into Tempe for the Insight Bowl and Arizona State University sporting events.
Stores and restaurants are important to the city because sales taxes are a major source of revenue, bringing in about $70 million in the 12 months ending in April. That includes grocery, drug and department stores, and auto, furniture, electronics and building supply sellers.
Retail tax revenues provide about 22 percent of the city’s total revenues, said Jerry Hart, Tempe’s financial services manager.
Retail revenues in the downtown area did fall somewhat with the departure of the Arizona Cardinals and the Fiesta Bowl. The football season that just ended was the city’s first without the Cardinals, who are now playing at a new stadium in Glendale.
Tax revenues from ASU-related activities dropped 23 percent and downtown businesses saw a 3 percent decline in business, according to sales tax numbers for the 12 months through April.
"Certain geographical areas are hurting," Hart said. "We replaced the Fiesta Bowl with the Insight Bowl, but it is not as big a draw as the Fiesta Bowl. We have hopes it will."
City officials assume the losses will be offset by the new retail coming in.
Downtown Tempe Community, a group of downtown business people, is helping developers find tenants downtown. And Salomone said the city has a full-time retail specialist helping neighborhood centers find tenants.
The Phoenix area has a record 9.6 million square feet of retail under construction this year, and about two-thirds of that is in the Southeast Valley, according to CB Richard Ellis. Tempe’s contribution is about 1.6 million square feet – Tempe Marketplace and Emerald Square.
Betty Beard
The Arizona Republic
