Downtown Phoenix’s Warehouse District: The Next Meatpacking District?

Published: Thursday, January 7, 2016 - 5:18pm
Updated: Thursday, January 7, 2016 - 5:50pm

(Photo by Lauren Gilger - KJZZ)
Cassidy said companies that invest in renovating these historic warehouses have to go through a relatively complicated process in order to make them usable.

Not too long ago, downtown Phoenix was far from a vibrant city center.

But, the City of Phoenix has invested about $4 billion into the development of its city center since 2008, according to community and economic development director Christine Mackay.

And the difference is clear. With the development of the light rail, several college campuses, a host of apartment buildings and investment into a thriving arts district downtown Phoenix is, in many ways, a new place.

Now, Mackay said, “it’s the Warehouse District’s turn.”

The Warehouse District is just south of downtown Phoenix and encompasses the area between 7th Street on the east and 7th Avenue on the west, Jefferson Street on the north and Grant Street on the south, according to Brian Cassidy, chair of the Warehouse District Council.

Around the turn of the century, the area was an economic hub, where produce from all of the state’s farms was warehoused near Phoenix’s Union Station. Now, it’s starting to become an economic hub again, home to a growing number of creative companies and event spaces.

The area is home to Cassidy’s firm, CCBG Architects, financial company Dudley Ventures, digital marketing agency Moses, events spaces Bentley Projects, Angelic Grove and The Croft, restaurant and bar The Duce, and several others.

Last year, advertising firm R&R Partners renovated a warehouse building on Buchanan Street for their offices. This year, software companies WebPT and Galvanize are set to bring more than 800 new employees to the area as they renovate a 120,000 square-foot building on Grant Street.

“That is our 800-pound tenant in the Warehouse District,” Cassidy said, “and it’s going to make a really big difference to the number of people down here that are going to be looking for a place to eat, a place to have a cup of coffee, have a beer after work and wanting to live close enough that they could take public transportation or ride a bike or, hopefully, walk to their office building.”

Cassidy said there is a 276-unit apartment complex planned at 3rd and Buchanan streets, the first new housing to be proposed in the area in 12 years. And, the First Presbyterian Church is building a church and event space in the district called UrbanConnect.

Still, he said there are approximately 18 full city blocks of undeveloped real estate in the Warehouse District, an unprecedented amount of empty land so close to a major city’s downtown.

“It’s either dirt or surface parking lots,” Cassidy said.

So, he and the others on the Warehouse District Council are working to attract developers to fill those lots and to help them navigate the sometimes complicated process of renovating an historic warehouse. But, Cassidy said they are buildings worth saving.

“We’ve lost a lot of warehouses over the years for really poor reasons,” Cassidy said, “Quite often, people push their building over just because they could lower their property taxes, which is really a shame because you can’t get that character back, and it’s almost impossible to replicate the character of these buildings. The craftsmanship and the materials just are not mainstream construction materials anymore.”

Right now, Mackay said there’s more than $500 million worth of construction going on in Phoenix’s city center, including several new hotels, the University of Arizona’s bioscience buildings, Arizona State University’s law school and condominium complex Portland on the Park.

Now, she said, the Warehouse District is next in line for development and investment.

“It’s really because of what companies want,” she said. “A company doesn’t come into a new market and say, ‘Show me every two-story open floor plan building you can find.’ Companies today, those creative companies, technology companies, are truly looking for unique space, engaging space.”

And those unique buildings are in the city’s center, Mackay said.

“You’re seeing a huge demand for the city to go out for request for proposals for the real estate that we spent decades assembling,” she said, “that are now going to come out as either these great new retail projects or residential projects, or unique co-working or office space projects and hotels.”

Mackay said the area’s development has been a combination of strategic planning by the city and organic movement by companies who have chosen to locate there.

Heidi Jannenga, president and co-founder of WebPT, a software company for the rehab industry, chose to locate the company in the Warehouse District when they launched, she said.

The company has grown rapidly in recent years, from just a few employees to about 270. At the same time, they’ve upgraded office space, from 5,000 square feet to the 30,000 square-foot space they occupy now. This year, they’re moving into about 60,000 square feet of space.

Jannenga said she likes to think of the company as a hermit crab in the Warehouse District, as they move up.

“Behind us, we leave this really great shell that the next up-and-coming tech company can really utilize,” she said.

And, with a light rail extension planned in the area in the next several years, Mackay said more people will move there, and businesses will as well.

Ten years from now, she said the Warehouse District will be “an incredibly connected, identifiable area nationally, kind of like we know of certain areas in San Francisco and New York and Chicago that we know by their unique names,” Mackay said. “The Warehouse District will be one of those names that you recognize.”

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