Rendering for the Block 23 development coming to downtown Phoenix.EXPAND
Rendering for the Block 23 development coming to downtown Phoenix.
RED Development

Block 23 Breaks Ground in Downtown Phoenix: Here's Everything We Know

A mixed-use development called Block 23 is set to break ground in downtown Phoenix on Thursday, April 13. It’s the third phase of the CityScape development created by Phoenix-based RED Development.

Block 23 is being built on land that was part of the original footprint for Phoenix, shown in a late-19th-century map signed by William A. Hancock, a local surveyor way back then. Once, it was home to the art-deco style Fox Theatre movie house, and later a JC Penney store.

Recent pre-construction excavations indicate it also served as the site for an early fire station. And cultural artifacts, also found as part of the routine dig, may reveal details about its earlier history once they're fully analyzed by experts.

Most recently, the site has served as a parking lot, but even that's seen some pretty significant action – including Super Bowl fan events.

Located at 125 East Washington Street, the complex site is bordered by Washington Street to the north, Jefferson Street to the south, Second Street to the east, and First Street to the west.

Nearby landmarks include Talking Stick Resort Arena and Phoenix Convention Center.

Block 23 is scheduled to open during the first three months of 2019, says Jeff Moloznik, vice president for development with RED.

Until recently, plans approved by the City call for Block 23 included the following:

• 50,000 square feet of commercial space, to include a grocery store
• About 300 high-rise residential units (RED puts that number at 330 now)
• 150,000 square feet of office space for technology- and innovation-focused tenants
• 1,000 parking spaces located above and below ground

But on April 5, the Phoenix City Council approved changes requested by the developer to allow for “greater market flexibility.” Now, development plans call for at least two of the following uses: office, commercial, or residential — instead of all three. And possible use for a hotel is specifically excluded. The new specifics look like this:

• At least 50,000 square feet of grocery store space.
• At least 150,000 square feet of office space
• Approximately 1,000 above and below ground parking spaces.

The most obvious change is removing the requirement that the project include residential units. But plans to include the grocery store remain.

“The project details in the city ordinance are a minimum requirement for the development,” Moloznik says. “The project will include a 55,000-square-foot grocery store and 200,000 square feet of office restaurant, retail.”

The Fry’s entrance will be located at the intersection of First and Jefferson streets, he adds.

“We brought Fry’s into the project about two years ago,” Moloznik says. “Then we planned the rest of the space around Fry’s.”

It’s the first time a mixed-use, high-rise development in downtown Phoenix has included a grocery store. And Moloznik says that’s a game changer.

When people can buy groceries close to home, it simplifies their lifestyle, Moloznik says. And it means residents can make fewer trips by car, which increases the city’s walkability factor.

Block 23 is being developed with significant support from the City of Phoenix, which has agreed to provide up to $18.3 million in financial support. That support includes something called a Government Property Lease Excise Tax (or GPLET, for short), which was granted in October 2016.

Essentially, a GPLET turns the title of land over to the City for several years, which means the developer doesn’t have to pay property tax. Block 23 is one of six developments underway to get the GPLET tax break. The Block 23 GPLET was granted for 50 years. That was before the City decided to limit GPLET agreements to eight years.

But the City’s investment could pay off big time, according to financial impact numbers calculated by its department of economic and community development. Those calculations indicate that Block 23 will likely generate $76.5 million in sales tax revenue during the course of its 50-year agreement with the City.

In any event, the project is moving forward.

So far, the developer has undertaken excavations required by the City, which look for historic and prehistoric artifacts. Next, they’ll do engineering-related site preparations. After that, the community will be able to watch yet another multiuse development take shape in downtown.

And in another two years or so, urban dwellers will even be able to buy their kale there.

Correction: The map mentioned was signed by, not drawn by, William A. Hancock. The entrance to Fry's will not be located at First and Washington streets, but First and Jefferson.


Update: This post has been updated from its original version with new information.

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