Phoenix Interrupted: Downtown’s Full of Gleaming Progress Surrounded by Vacant Lots – Now What?

There's a development on the edge of downtown Phoenix that captivated me even before I moved into the neighborhood: the Chateaux on Central.

My interest wasn't a matter of good design — everyone from Will Bruder on down is on the record mocking the place, and rightly so. (With its fanciful turrets, shiny copper roofs, and that ghastly faux-French "eaux," the project's overall effect is Disney Does Brownstones in the Desert.) No, the Chateaux on Central were somehow personally evocative.

They made me homesick.

In the cities of my youth, the once-proud cities of the industrial Great Lakes — Cleveland, Detroit, Milwaukee — you'd often see old Victorians that covered half a block. They were monstrously grand houses, with gingerbread trim and gables and cornices and the occasional tower room. Even in those cities, these houses made no sense. What family needs eight bedrooms and 6,000 square feet, much less a tower? How could you possibly keep a place like that clean without a full staff of servants?

Indeed, by the time I was in high school, many mansions on the streets of Cleveland had fallen into Miss Havisham territory. The windows would be boarded up, or you'd glimpse squalor behind them: a tenant's grimy piles of laundry, a baby with a soiled diaper, rags shoved into a cracked pane to keep out the cold. You'd wonder what the house had been like when it was new and shiny, when its owners were flying high enough to think their fortunes would last forever.

And so as the Chateaux on Central started construction, right there in the Mid-Century Modern of Central Avenue, I wondered . . .

Who wants to pay $4 million to live in a downtown that goes eerily quiet around 6:30 p.m.?

Who needs a five-level condo with its own in-suite elevator?

Who's gonna buy one of these things in Phoenix, in 2009?

As it turns out, the answers are no one, no one, and . . . no one.

Four years after the Chateaux broke ground, the project is hopelessly stalled. Driving past it on Central, you might think these are habitable condos, but not if you get out of the car and walk around to the back of the building. From Palm Lane, it's clear that the Chateaux are frozen in time, unfinished.

The crisp windowpanes that front the building give way to gaping holes. Past the model units, there's no drywall inside, only a skeleton. Weeds grow in the entryway, invading whatever opening they can find, doing their best to reclaim the lot that was once theirs.

These condos could be rubble before anyone actually moves into them.

I know, I know. Someone could save this project. Someone could step in with the financing to finish off the units and sell them, and they could do it soon.

But I dare you to walk alongside these faux chateaus at dusk and not get the chills. It's the same eerie feeling I used to get, eyeing the painted ladies that had fallen into disrepair in the once-brawny Middle West.

It's even worse in this case. The Phoenix version of Miss Havisham isn't an old lady yet. She's been abandoned in her prime.

There are plenty of culprits for the Chateaux project's current state of dishabille.

You could blame the project's developers. They initially had grand dreams, but they ran out of money.

You could blame Mortgages Ltd. The Phoenix investment group came to the developer's rescue a few years into the project, only for its founder to commit suicide and reveal that the company was bankrupt and the money gone. As my colleague Ray Stern details in this week's cover story, the chaos in the wake of the company's demise is literally threatening downtown Tempe's skyline — and a host of other local projects, too.

You could even find a way to blame Bush or Obama, depending on your inclination. One president encouraged a terrible bubble; the other has been unable to move the country past the bubble's bursting.

Ultimately, though, the real problem is this: Even if there were a market for $4 million, five-story, 8,200-square-foot condo units in downtown Phoenix at one point, there is no such market today.

It's hard to imagine there'll be one at any time in the near future.

For a while, the Valley was booming. And with boring old McMansions in, say, Gilbert commanding a half-million dollars, you can see why developers decided that downtown Phoenix would be the next big thing. We'd sprawled out as far as we could reasonably go; the core of the city suddenly looked much more attractive.

Those were heady times. Cranes were everywhere along the skyline. We got downtown's first real high-end housing, the Orpheum Lofts. We got a city-subsidized Sheraton and a government-underwritten light rail. We got cool new restaurants — Sens and PastaBAR and Hanny's. We eagerly awaited an actual grocery store.

And then the bottom dropped out.

Thanks in part to Mortgages Ltd., project after project lost financing. Credit froze. Jobs disappeared and development stopped. Developers submitted 13,424 lots for preliminary review in Phoenix in the 2004 fiscal year; last year, they submitted just 382 — a 97 percent drop.

All the housing added to the market during the boom has created a major glut now that people have all but stopped moving here. The U.S. Census Bureau reported that the vacancy rate for rental housing in the Valley rose to 19 percent last quarter. Nineteen percent. That means one in every five apartments across greater Phoenix is empty.

And that doesn't even count projects like the Chateaux, which are nearly built but haven't yet received a certificate of occupancy. Mo Glancy, deputy development services director for the city of Phoenix, tells me that there are projects all over town, hiding in plain sight. "You drive by, and you might think they are done," he says. "They look nice. But on the inside, they're totally empty. We've got entire subdivisions of commercial projects like that."

The upshot is that downtown Phoenix, which had finally been coming together, is suspended in a weird, half-finished state.

So much changed in the past five years; downtown is no longer the scary place that natives remember from the 1980s. But it's also not quite there yet.

You might not realize it if you come here only for First Friday, or if you work downtown and hop on the freeway at the day's end. Like the Chateaux, many things downtown look done, or close to it.

Those of us who live here know differently.

Parts of the city feel like a war zone, with giant vacant lots surrounding all the new gentrification. Other blocks are curiously bipolar, with old and funky apartments sitting right next to soulless new townhomes. Some of the grandest new projects have no one living in them — no one except the squatters who move in at night to sleep in the emptied swimming pools.

Practically everything being built downtown during those heady years was either financed by the city or built on spec. Arguably, there never was a market for $300,000 condos here, much less $4 million ones.

Some projects have stopped entirely. The gorgeous Art Deco building they hoped to turn into a boutique hotel, at 15 East Monroe, has been an abandoned shell since Mortgages Ltd. went under. Others are straggling along. Roughly half the units in Summit at Copper Square, that high new tower of condos next to Chase Field, have sold, but the lender moved to foreclose on the other half when they failed to sell. Meanwhile, the Arizona Republic reports that 44 Monroe, the sleek new condo high-rise at First Avenue and Monroe, is doing well: They've sold 10 units. In a 196-unit building.

Suffice it to say, no one is likely to be pitching a big new residential project for downtown Phoenix anytime soon. The vacant lots are going to stay vacant, at least for now.

I'd rather reconciled myself to this until one day last week, when I saw a sign of life — something that I thought could shatter my thesis about downtown progress being on hold.

Right there, in one of the vast vacant lots separating the gleaming skyscrapers of downtown proper from the midtown D.I.Y. cool of Roosevelt Row, was a sign announcing that this 1.6-acre parcel was slated for rezoning. It would be getting a commercial designation instead of residential.

This is my least-favorite stretch of downtown; it's the one spot that feels so abandoned that you could cry for help on a quiet night and no one would hear you. And someone was going to build something — today! Even in the midst of this terrible downturn!

I was thinking cool restaurant or bar. I was thinking — I'm not too embarrassed to admit it — Target.

And then I made a few phone calls.

Carol Johnson, with the city's planning department, kindly explained that there was no need to get my hopes up. "It's a project to make the lot more beautiful on an interim basis," she said. Apparently, tourists at the schmancy new Sheraton downtown expressed some concern after trying to walk to Roosevelt Row on a First Friday. They did not like walking through a wasteland of dirt, parking meters, and no signs of life.

So the city is adding some trees. And looking at some temporary uses, hopefully with donated material.

It's a great idea but still a letdown for someone who was plotting to have some real shopping in her neighborhood, finally.

And what I heard next deflated me even more.

Not only does the city own the parcel in question, it owns the lot next to it. And the lot next to that. Five lots in total, which basically create a wasteland that (considering the city's current troubles) isn't going to put to a permanent use anytime soon.

Jason Harris, a deputy director for the city's downtown development effort, has been working on the beautification project with neighborhood groups. He tells me that the five city lots in question will be part of Phoenix's biomedical campus. While in the short term they may be used for parking or special events, we're looking at a significant amount of time before they're needed for their ultimate purpose.

It might be, he suggests, 15 to 30 years.

I think about how close Phoenix seems — and yet how far away it just might be. I think about the Chateaux, waiting for someone, anyone, to move in. I think about how old I'll be in 30 years.

By the time downtown fully comes together, I could be a grandma.

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Sarah Fenske
Contact: Sarah Fenske