The Dealmaker: 9/13/2017

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The Dealmaker is a daily note of the day’s top real estate stories served just in time for lunch. Bon Appetit! Subscribe here to receive the Dealmaker to your inbox



Rose Law Group Jordan Rose takes 3rd place of 11 at ULI’s “Hot Intersections” competition this morning for her presentation on Camelback and Scottsdale Road. And the winner was Craig DeMarco for Central and Camelback (…don’t tell Jordan but we even voted for him… after all, how can you vote against the guy who created our favorite happy hour spot, Postino’s?)! Check out the pics from this morning’s event, here:

Is Phoenix apartment market a candidate for overbuilding? “[It’s been] a strong two years, as occupancy has remained essentially full and rent growth levels have trended well above national norms… But this is a spot where the building pace can escalate rapidly, and there has been a run-up of activity lately.” AZRE examines if “recent trends suggest a supply-demand imbalance is on the horizon.”

Single family rentals getting more pricey. “Rental houses have been in high demand since the housing market crashed, but a lack of supply has made renting those homes more expensive, according to a new Zillow® analysis released Tuesday.” In Builder.

A deeper look at rent-burdened households. “This [Eye on Housing] analysis takes a look at the geographic distribution of rent-burdened households as well as how age, marriage, and unemployment affect rent-burdens.” (The study includes heat-mapped rent-burden data for every county in Arizona.) 

YIMBYism finds its legs amid a middle-class housing shortage. “When taxpayers have to subsidize rents just so city employees can live where they work and Facebook starts getting into the homebuilding business, something ain’t right. Now a decade-old grassroots movement is starting to raise a ruckus at city halls and county councils across the country with a simple message: Build, baby, build.” In LinkedIn.

DADDY, PLEASE DON’T GO! – Gilbert agrees to pay GoDaddy more than $800K to keep the tech giant. “In return, GoDaddy signed a new 10-year lease and will invest $15 million on improvements to its call center in the El Dorado Tech Center Business Park.” Gilbert Mayor Jenn Daniels: “That’s good for us. That’s good for Gilbert. That’s good for economic development.” AZCentral.

OLD MACDONALD HAD… Agrarian-based assisted living facility for Queen Creek. The 26KSF facility is proposed for East Ocotillo and South 228th St.. “As part of the Queen Creek Assisted Living Facility’s ambiance — and with a nod to the town’s farming heritage — the proposal includes [a] 20KSF pasture area [that] will feature an occasionally rotating inventory of up to 12 horses, cows, goats, sheep and birds [for residents to] interact with and enjoy.” Get further details and view a rendering at Arizona’s newest source for urb-ag real estate news, EIEIO. (Actually, you’ll find the story in AZBEX.)

Developer gives $100,000 towards new Chinese center. “The new owner of the Chinese Cultural Center in Phoenix has donated $100,000 toward the development of a potential new center in downtown Phoenix. The move comes as Asian-American groups and preservationists oppose 668 North LLC’s plans to renovate and redevelop the existing center into new offices.” PBJ reports that the center, “built in 1997,” has “unique architecture but has also been mostly empty.” (See related item below.)

Fight to save Phoenix Chinese Cultural Center to continue with study of historic elements. “[Tuesday, the Phoenix City Council voted] to allow residents to commission a survey analyzing the historical significance of the 20-year-old property… It was not immediately clear how long the survey would take or how much it would cost supporters. The decision does not stop True North [668 North LLC] from proceeding with development plans, however.” AZCentral.

Plaza Companies, Holualoa Companies reinventing Park Central. “Plaza and Holualoa will control more than 337,000 square feet… The goal [with the selection of ‘architect richärd+bauer and DPR Construction’] will be to create a new beating heart in the middle of central Phoenix, one that will attract restaurants and office employers from around the world and serve as a catalyst for new jobs and economic growth.” AZRE.

Labor shortage plagues Prescott. “The [Deep Well Ranch master-planned community project] involves construction of about 10,500 homes over several decades. But right now, the labor pool is far too shallow to support that…” KEY QUOTE: “We have a skills gap…” The Daily Courier.

Is Amazon announcing Arizona as its HQ2 site tomorrow? Actually, this AZ Business Magazine headline is a bit dated — it should read: “Is Amazon announcing Arizona as its HQ2 site TODAY?” since it’s from an article that came out late yesterday. Per the article: “Sun Corridor has called a news conference [TODAY!] to make an announcement regarding Amazon HQ2 project.” AZ Business Magazineencourages folks to check back “tomorrow” for an update — which, of course, means TODAY, unless you forget to do so — in which case, “tomorrow” would mean “tomorrow.” (And after all that convolution, let’s just hope this doesn’t turn out to be just click bait.)

Pinal renews program to aid new, expanding businesses. “The Board of Supervisors has renewed the county’s Business Assistance Program for a second year after finding that it has helped at least two major companies in its pilot year… To ensure the money is spent on what it is meant for, the county only distributes it as reimbursements, not up front. There are also conditions…” PinalCentral.

GOIN’ UNDERGROUND – Regulators approve big Arizona power line project. “The Arizona Corporation Commission has approved… the SRP utility’s plans for power lines in Chandler’s Price Road Corridor… The PRC project provides 4.8 miles of new transmission lines along the Loop 202 freeway and Chandler’s border with the Gila River Indian Community. Part of the new lines will be underground.” PBJ.

Who is eyeing 3 seats on Scottsdale City Council in 2018? AZCentral looks at some of the candidates that may run next year — in an election where the issue of the proposed Desert EDGE development promises to be front and center.

The attainability gap. “Builders and developers try new tactics to narrow the differential between new and existing home prices to court Millennial buyers.” Builder. 

Hurricane Harvey impact for building materials suppliers hits $1.8 billion across six major products. Lumber. Windows. Roofing. Insulation. Siding. Wallboard. At Principia. (This would have been very close to breaking the record for the shortest Dealmaker summary ever, if only we hadn’t typed this.)

BONUS: Houston’s unsinkable housing market undaunted by storm. “[E]ven after Hurricane Harvey revealed the city’s vulnerability to catastrophic flooding, leaving thousands displaced and still living in shelters, people here are betting that nothing can stop Houston’s continued growth.” As this New York Timespiece notes right from the get-go: “Most buyers are keeping deals on track, builders are expected to barrel ahead, and owners of elevated homes may find their properties more valuable.”

As a supplement to the Dealmaker, we thought you might enjoy these articles!


AzMERIT does not merit a panicked response. “[Last week], the State publicly released the results of Arizona schools’ AzMERIT test scores and the results were… uninspiring. And soon to follow, will be mandatorily required grades (on an A-F scale) for every charter school and school district that will be predicated in large part on the results of AzMerit. Given the lackluster overall outcome of our schools’ performance, we shouldn’t expect the letter grades to shine. But it’s not yet time to panic.” By Rose Law Group litigation and education law attorney, Evan Bolick, in Rose Law Group Reporter.

BALANCING ACT – Historic’ Arizona convention on changes to U.S. Constitution opens 1st day at Capitol. “Representatives from 22 states gathered at the Arizona Capitol Tuesday for the convening of America’s first national convention of states in more than 150 years…. The intent of the Arizona Balanced Budget Amendment Planning Convention… is to lay groundwork for a future gathering at which state leaders will propose to restrict federal spending.” AZCentral.

WHEN THE LEVY BREAKS – Arizona Supreme Court to decide on Medicaid tax. Is a levy that expanded Arizona’s Medicaid program “a tax”? If it is — and that’s what the state’s highest court will decide — it means that it was “illegally enacted.” Capitol Media Services’ Howard Fischer reports that if that turns out to be the case, it would mean “the state could no longer afford to provide care to about 400,000 Arizonans who were added to the plan as a result of the 2013 action…” More in Arizona Capitol Times.

House defunds Attorney General’s expansion civil forfeiture. “Arizona’s law enforcement agencies have come under scrutiny for the misuse of RICO funds… [T]he U.S. House of Representatives unanimously approved three amendments late Tuesday that would defund the notorious federal forfeiture program that was recently restored by U.S. Attorney General Jeff Sessions.” KEY QUOTE: ““Civil forfeiture is one of the greatest threats to private property rights…” Read the story at ADI.

APS customers who refuse to use ‘smart meters’ now will be charged $5 a month. “After years of debate [over ‘health, safety, privacy and other concerns’], Arizona Public Service Co. won approval Tuesday to charge customers $5 a month if they refuse a ‘smart meter’ to track electricity use. Smart meters, used by nearly all 1.1 million APS customers, use wireless signals to transmit customers’ energy use to the utility.” AZCentral. 

Ongoing problems land tribal oversight agencies on GAO ‘high-risk’ list.“[T]he Bureau of Indian Affairs, the Bureau of Indian Education and Indian Health Services… suffer from weak leadership, a lack of oversight and mismanaged resources, despite nearly a decade of prodding from the Government Accountability Office. That lack of progress… will be the focus of a Senate hearing [today] on the agencies’ ongoing shortcomings.” Cronkite News.

ROUGH DIMON – Dimon calls bitcoin ‘a fraud’ and may have delivered the biggest blow to the digital currency. “Bitcoin will eventually blow up. It’s a fraud. It’s worse than tulip bulbs and won’t end well,” J.P. Morgan chief Jamie Dimon said, [referring to the ‘17th century mania over tulip bulbs’]. “Dimon also said he would fire any trader trading bitcoin for being ‘stupid.’” More from Dimon and the impact on Wall Street, in MarketWatch

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September 2017