Many neighbors are understandably concerned about the perceived loss of retail space at what most currently call the “OfficeMax Plaza.” Rumors are flying that this is a complete replacement of retail with apartments – that is not the case! What many don’t realize is that when the project is built, they will actually have more friendly and usable retail in use than what is there now. Here’s a quick breakdown of the numbers:
The owner has continuously owned – for the past 17 years – a total of 65,000 square feet (SF) of retail space on the site. He does not own Arizona Federal Credit Union, Carl’s Jr., or Starbucks. Those three will remain untouched.
Of that total, 41,000 SF is big-box use for Big 5 and OfficeMax. Both stores have intent to vacate when their leases expire. This is an unfortunate reality of the market. Both brands are struggling with the overhead of managing physical space when online shopping has become the norm, and nationwide they are closing stores in favor of online retailing. This will leave a gaping hole in the center that, even prior to COVID-19, will be challenging to fill.
This leaves 24,000 SF of in-line retail. Of that amount, 9,000 SF is currently vacant – some of which has been vacant for multiple years! Why? The biggest challenges faced in leasing on this site are the location in the pad and the lack of visibility from the road.
Out of all 65,000 SF included in this project – and once the big box stores are vacated – only 15,000 SF of retail use is currently being enjoyed by the neighborhood.
Here’s where it gets exciting:
This mixed-use project will bring us 22,000 SF of retail use, residents to support the retail and help them remain successful, greater visibility and placement on the site, and public open space and activation of our beloved Greenbelt for everyone to enjoy!
We will have 7,000 SF more space than what is currently being utilized now in a more desirable and vibrant space.
Of particular concern to the community is the fate of Uncle Sal’s and the UPS Store. The property owner has been in constant contact with all tenants on the site, and is working with both owners of these particular brands to find a solution to retain and relocate into the new center with minimal disruption in business. The team is working very hard to find a win-win-win for all – the property owner, the tenants, and – most importantly – the community.
This is a fine balance when you consider that the retail apocalypse was upon us well before COVID-19 hit. Even our own Scottsdale Fashion Square – in recent years the largest tax revenue generator in the city – is in dire straits in the midst of this pandemic and after the riots, as stores shutter or move to smaller retail spaces, creating larger vacancies to fill and entire brands reevaluating storefront usage.
Specifically, OfficeDepot (parent company to OfficeMax) appears number 26 on this list, and is written about specifically in this May 2020 article. Big 5’s first quarterly report for 2020 can be read here: https://www.globenewswire.com/news-release/2020/05/27/2039707/0/en/Big-5-Sporting-Goods-Corporation-Announces-Fiscal-2020-First-Quarter-Results.html.
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