Monroe Mixed-Use
Project Details
Location
Downtown Phoenix, Arizona
Uninflated Cost
$40 Million
Strategy
Adaptive Reuse of a Vacant, Historic Building
Roles
Ownership, Investor, Asset Management, Project Management, Property Management
about the
project
Developers just build boring boxes on flat land, right? …not so fast, Sparky.
On occasion, the opportunity arises to acquire, renovate and repurpose an existing structure and, on rare occasion, the opportunity arises to reprise an iconic historic structure, as was the case with the Morgan, Walls & Clements-designed Professional Building, now known as Hotel Monroe, in the heart of Downtown Phoenix, Arizona.
Listed on both the City of Phoenix and National Registers of Historic Places, the Art Deco gem is located on a prime, Central Avenue corner, across the street from the tallest high-rise in Arizona, the 40-story Chase Tower. This tower, formerly known as Valley Center, was built for Valley National Bank, once the largest bank in the Southwestern U.S., but more importantly, the original “anchor” tenant for the Professional Building.
Tackling the treasured, 12-story “tower” was an ambitious endeavor that combined a reverential historic rehabilitation with a modern adaptive reuse of the entire building, which was originally constructed to quarter conventional and medical office tenants, before it fell victim to urban decline in the 1980’s and 1990’s.
To purchase the 1931-vintage Professional Building, Geoff Beer teamed with the late Fred Unger, an admired local hotelier, and Jonathan Vento, now head of True North Studio, in 2004. Mr. Beer immediately secured the property to prevent further structural damage and then began the design and renovation process to convert the former office building into a 157,000 GSF boutique hotel-condominium.
The long-vacant grande dame had fallen into disrepair and hundreds of pigeons and a small transient community had taken up residence inside the perimeter, which needed to be sensitively removed, along with an enormous amount of trash, feces, and graffiti, i.e., some of the things they don’t teach you at Harvard Business School!
OUR
EFFECT
Geoff also achieved several more genteel development and preservation milestones during his ownership and under his stewardship, including the following:
- Negotiated a complex public-private partnership (PPP) with the City of Phoenix that contained an original Government Property Lease Excise Tax (GPLET) property tax incentive, a historic façade preservation grant, sales and bed tax reimbursements, and numerous conditions related to the historic rehabilitation of the landmark property.
- Stabilized the adjacent 2-story Steinegger Lodging House (SLH), which had become a haven for drug use and criminal activity (they didn’t teach that either)! Constructed in 1889, the SLH had become a dilapidated and unsafe edifice on the brink of condemnation.
- Coordinated with the Arizona State Historic Preservation Office, the City of Phoenix Historic Preservation Office/Commission, and the local preservation community to create a marketable redevelopment plan without truncating the development team’s ability to seek historic tax credits from the National Park Service, as well as New Markets Tax Credits from local Community Development Entities (CDEs).
- Initiated a top-to-bottom inspection and restoration of the building’s historically significant architectural elements, including a forensic analysis to determine the original 1931 materials and paint colors, which had been mostly removed or encapsulated from decades of imprudent remodeling work.
- Commissioned multiple surveys and abatements of asbestos-containing materials (ACMs) and lead-based paint materials (LBPs) that were widely spread throughout the building.
- Demolished or salvaged obsolete mechanical, plumbing and electrical (MPE) subsystems in preparation for the significant renovation work to follow. Unique items included several paper-check processing and storage machines from the 1930’s, vintage elevator equipment, and a vacuum tube reel-to-reel tape deck providing the elevator music of the era, no doubt, a mix of Glenn Miller and Duke Ellington!
- Negotiated favorable releases from two ground-floor retail tenants that held long-term leases and were preventing the commencement of construction.
As a fun aside, the Professional Building made a cameo appearance in the opening sequence of Alfred Hitchcock’s 1960 film classic, Psycho. Hint: It’s the one with the rotating “Valley National Bank” sign on the roof.
Sensing a strong, seller’s market and an economic correction about to occur, the $40 million (uninflated cost) project was sold in late 2006, ending a successful labor of love for Geoff and his team, on a project which they cherished and renewed, and to which they applied a new vision, worthy of the storied property, rich in Arizona history.
Yes, buildings have stories, too.
