Mill Avenue Centerpoint complex delayed

From grandiose redevelopment plans to vacant storefronts - and don't look for a revival anytime soon. But what to do with Tempe's Centerpoint on Mill until then?

City leaders: Tempe dowtown best days are ahead

How the complex, on the northwest corner of Mill Avenue and University Drive, came to be mostly empty is a familiar story of a developer's optimism running face-first into the market's reality.

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DMB Associates allowed its tenants to leave in preparation for redevelopment. Yet the Scottsdale firm now says market forces may delay construction on the mixed-use project for another five years. Tempe officials and civic leaders, though, are unwilling to have its flagship shopping district and core of a projected live-work-play urban environment anchored by 24 acres of chain-link fences and for lease signs.

"It's not that people don't want to start businesses in the Mill Avenue District," said Pam Goronkin, outgoing executive director of the Downtown Tempe Community. "It's that when you see dark stores, it makes us look like an undesirable place to locate a business."

Mayor Hugh Hallman blamed DMB's inaction for sliding sales tax revenue on Mill. According to statistics released by the city on Friday, collections for July and August, compared with the same period last year, are down 18 percent.

"If you take a tenth of your retail space off the market, that explains a very large portion of that," Hallman said.

Last summer, DMB announced its plans to raze many of the buildings, including the former Harkins Theatres, an office building and a row of single-story shops that includes the Coffee Plantation. In their place would be a hotel, condominiums and retail space. It was also last summer that the credit crunch began, undercutting financiers' will to fund major projects.

"Unfortunately for us, the market has not been cooperative," said DMB Commercial vice president Robert Mayhew, explaining that the residential market is in disarray. "So, for our position right now, we think we need to be in more of a wait-and-see mode and not be in no-man's land, where we are now."

To show how serious the city is about bringing traffic back into the complex, Hallman recently coaxed his council colleagues into reopening a development agreement he signed earlier this summer. In City Hall, this was labeled "a shot across the bow" of DMB, and the matter will be discussed at Thursday's council meeting.

Mayhew said he understands the mayor's concern, "but the real issue has been the fact the market has shifted and the residential opportunity is no longer there, at least in the short-term, and we've had to regroup and restrategizing and come up with a new plan to make this something viable."

The city, DMB and the Downtown Tempe Community have been meeting regularly of late with the goal to get short-term tenants into Centerpoint. City community development manager Chris Salomone said options under discussion have been bringing in artists from Arizona State University and turning a vacant store into a gallery, or having an Autoplex car dealer create a mini-showroom on Mill. In the former Harkins space, theaters could be used for plays or presentations by conferences held at Tempe Mission Palms Hotel.