Subcommittee Summary: Aviation & Transportation – May 7 2019: Disagreement over pace of redeveloping South Phoenix Convention Hall.
May 7th’s meeting of the City Council’s Planning and Economic Development Subcommittee revealed some apparent differences in opinion over the pace and direction of the City’s efforts to redevelop the South Phoenix Convention Center building.
The subcommittee met to discuss possible options for the building, which is coming of age. Failing to redevelop the property would risk Phoenix falling behind in terms of competitiveness with other cities’ Convention Centers, according to John Chan, the City’s Convention Center Director:
“Phoenix is behind a lot of our competitors in terms of contiguous exhibit hall space. As we look into the future, we need to consider where we want to be in terms of maintaining our position as a top-tier convention and visitor destination.”
A new replacement plan is needed
The South Convention Center building was completed in 1985, occupies about 9.25 acres, and provides about 286,000 square feet of exhibit hall space. City planners had originally envisioned knocking the old convention hall down and expanding the newer North convention hall across the street, but that plan needs to be reconsidered in light of structural concerns related to the light rail tracks as well as a planned replacement of a temporary shoring wall that has reached the end of its useful life. The replacement of that temporary wall, combined with the presence of train tracks, eliminates the possibility of an underground expansion of the North convention hall building. The city could, however, connect the buildings with a sky bridge, a point confirmed with Mr. Chan by Councilman Nowakowski.
Disagreement over pace
During the discussion following Mr. Chan’s presentation regarding the building, council members Pastor and Nowakowski appeared to be at odds over how quickly the city should move forward with the process of issuing an RFP. The process of issuing an RFP for a site like this requires the City Council to approve a list of the properties that the city is interested in developing or selling, this is followed by a period of public comment and than the issuance of an RFP. Councilwoman Pastor initially directed the issue be brought before the council in June for action, but Nowakowski expressed a desire to move faster due to concerns related to the property’s status as an Opportunity zone’.
Opportunity zones are a federal program borne out of 2017’s Tax Cuts and Jobs Act that provides significant tax savings to investors who place capital gains profits into projects in disadvantaged areas. The incentives attached to this program decline year-to-year until its eventual sunset. Nowakowski worries that if Phoenix waits too long, investors looking for a place to stick their capital gains will go elsewhere, which could make it harder to score a big project on the site.
Councilwoman Pastor asserted that moving too quickly could shortchange the public input process in a way that could allow developers to steer the process instead of the community. Developer interest in this property has been strong, as indicated by Councilwoman Stark’s acknowledgement that she has been approached by ‘various’ developers who are interested in the site.
The subcommittee eventually agreed to bring the issue back for action on their June 4th meeting so the full council vote on the 5th to get a full public input process moving as soon as possible.