Broadway/Stone Banks on Streetcar for Office Revival
September 26, 2012
By Teya Vitu
Three corners of the Broadway and Stone intersection are maneuvering toward a future with a streetcar running through it.
The owners of the 10-story Chase Bank building plan to start building a seven-story office-apartment-commercial structure at 1 E. Broadway, the northeast corner of Broadway and Stone, by the end of the year. It will be the new home for the Pima Association of Governments and Regional Transportation Authority.
“The streetcar was the catalyst,” said Art Wadlund, co-owner of the Chase Bank Building, 2 E. Congress Street. “If the streetcar wasn’t coming, we would not do .”
Across the street at 10 E. Broadway, on the southeast corner, the blue building known as The Westerner has occupied executive offices on the top two floors, but the lower three levels are vacant with 32,000-square feet available. Student housing, starting with The Cadence next to the Rialto Theatre, could lure a back-office operation to The Westerner, said Dave Volk, vice president at CB Richard Ellis
“You have employers who like to employ students,” said Volk, who represents the building along with Bruce Suppes. “With the student housing and streetcar, you have 30,000 possible employees.”
The northwest corner of Broadway and Stone hosts Tucson’s tallest structure, the 23-story One South Church, a glass tower that was known as the UniSource Energy Tower until the power company moved out in November 2011. The FBI left earlier this year and, thus, One South Church is one-third empty, with 78,200 square feet vacant from the 233,000 leasable square footage.
Prominent Downtown real estate broker Buzz Isaacson takes a half-full glass approach to One South Church, which he represents.
“You can’t get a big tenant if you don’t have a large space available,” said Isaacson, a vice president at CB Richard Ellis. “It’s pretty rough right now. It hasn’t kicked in yet. I think the streetcar construction needs to wrap up.”
Broadway and Stone is a curious intersection, just one short block south of the busy pedestrian corridor along Congress and north on Stone, but few pedestrians venture that one block south.
June’s Corner Store, 142 N. Stone, owner June Hale knows all too well what a difference three blocks makes. She was at 10 E. Broadway until moving next to the Main Library in January.
People thought she had left Downtown after she moved out of the Bank of America building in February 2009 because Stone/Broadway is just a few feet beyond the common pedestrian corridors.
“People are saying ‘You’re back,’” Hale said.
Art Wadlund agrees with the notion the Broadway/Stone, right now, is a bit of a remote intersection. Dave Volk doesn’t share that thought.
“Right at that corner, I’ve always thought that is a real hub,” Volk said. “There is a two-three-block hub. We’re at the south side of it. We’re still in it.”
The streetcar will bring attention to the Broadway/Stone intersection once it starts operation, scheduled for November 2013.
Wadlund and Chase Bank building co-owner Rob Caylor starting thinking about building on the surface parking lot behind their building two years ago. They intend to build One Broadway, a seven-story mixed-use structure with 4,000 square feet of retail on street level, 26,000 square feet of office space above that and 36 apartments on the upper levels.
PAG and the RTA would fill all the office space with their 50 employees. PAG has been in the TransAmerica Building for 38 years and there was no logistical need to make a move, said Robert Samuelson, PAG/RTA’s director of administration. They want to be right on the new Modern Streetcar line.
“We are a major funding source for the streetcar,” said Samuelson, also PAG/RTA’s chief financial officer. “We are promoting Downtown and urban redevelopment. We are putting our money where our mouth is.”
The building would have two levels of parking below ground and two levels above ground behind the commercial space, Wadlund said.
Wadlund, founding partner of the commercial real estate firm Hendricks & Partners, and Caylor, owner of Caylor Construction, bought the Chase Bank building in July 2007. Long known as the Valley National Bank building, it was Tucson’s first skyscraper and until the 1960s the 10-story Italian Renaissance Revival tower was Tucson’s tallest structure.
The tower had always belonged to the various banks that acquired or merged with Consolidated National Bank, which built it in 1929, until Caylor and Wadlund bought it five years ago.
They have wanted to widen their footprint beyond the Chase Bank building from the outset. They first looked immediately to the east at the vacant Thrifty Block, where developer Don Bourn in the past six years has proposed building The Post lofts or a boutique hotel. But in the past two years the lot has seen more use as a 2nd Saturdays children’s movie venue.
“We were trying to work with Don Bourn, but the timing didn’t work for us,” Wadlund said.
Ironically, the Chase Bank parking lot where Wadlund and Caylor now plan to build their office-apartment structure was where Bourn originally wanted to have parking for his Post lofts, but Chase Bank, while it still owned the tower, didn’t agree to all access for Bourn’s project.
The blue Westerner building has no on-site parking, one of the challenges to finding tenants since the lower levels started clearing out when the Tucson Pima Arts Council moved out in October 2009. Some city offices and June’s Corner Store left the small glassed-in spaces at street level early this year.
“You suddenly have the impression the entire building is empty,” Volk said. “We just don’t have any marquee tenants right now.”
The lower three levels indeed are empty, but most of the executive offices are occupied in 18,000 square feet of the upper levels.
“We’ve been touring a decent number of possible tenants through there, national tenants,” Volk said.
The Westerner was built in 1961 as a hotel and was converted for office use in the 1970s.
“We have worked with various groups: government services, people associated with government services,” Volk said. “Lots of software companies want to be located next to the University of Arizona.”
In Volk’s mind, the streetcar will put The Westerner right next to the university.