Despite Pandemic Losses, ASU Forges Ahead With Expansion Plans In Tempe, Phoenix

Published: Friday, November 20, 2020 - 12:51pm
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MARK BRODIE: When the pandemic hit, Arizona State University, like most universities, feared a financial hit due to the COVID-19 pandemic. And especially when it comes to revenue from international students, ASU has seen that come true. But the largest university in the country is forging ahead with expansion plans that could reshape — again — much of what Tempe and downtown Phoenix look like now. The Phoenix Business Journal's Corina Vanek has been reporting on this, and our co-host Lauren Gilger spoke with her more about it, beginning with downtown Phoenix, where a lot of new development is already underway.

CORINA VANEK: ASU is under construction on a dorm with a specific focus on entrepreneurship and the arts, so there's kind of a little bit of an incubator, business-type orientation to that dorm. The Thunderbird School of Global Management, which moved to the downtown campus a while ago, is right now leasing space in the Arizona Center, but they're building their own building over there. So that's two of the big ones that are under construction. And then there's also the bioscience. It's a shared public-private partnership that's under construction. I think it's going to be shared by most of the universities, but that one's also under construction. The building is being built by a company called Wexford, but that will be a laboratory space that the universities are going to use. And there also will be some private space in there, too.

LAUREN GILGER: Interesting. And there's a lot more, it sounds like, planned that ASU President Michael Crow has laid out in terms of development downtown. How different might this look in 5, 10 years?

VANEK: Oh, I think it will look very different. So there's plans to create at least one additional dorm, which will bring the count to four down there. Also the need for some more academic space as well. So ASU's downtown campus will soon, you know, be one of the central areas of downtown, if it's not already. It'll be very large and expansive where it is now.

GILGER: And how many students are they talking about, all in all?

VANEK: So in total, the downtown campus looks like it could grow to 20,000 with the plans that they have in place. Who knows what that looks like in the future, but that's kind of the look right now is 20,000.

GILGER: Wow. OK. So one idea you reported on here is really interesting. It's called the Central Idea — simple as that at this point — and it sounds like it could really be a game changer in sort of the Central (Avenue) corridor of downtown Phoenix and a little bit north. Tell us about what this would look like.

VANEK: It certainly could be a game changer, and it's an idea that I think they're trying to revive a little bit. It was pitched a few years ago and it's called the Central Idea, mostly because it is on Central Avenue. The idea is to create a really walkable, dense, urban environment from ASU's downtown campus up north to the Heard Museum. So it would be shaded with a lot more public art and public installations along that light rail route.

GILGER: Interesting. OK, so then let's turn to Tempe, ASU's main campus, where it sounds like there's a lot going on and planned in the university's athletics district.

VANEK: There sure is. And there's kind of a lot both athletics and non-athletics that's going on over there. Of course, the first phase of that was actually Marina Heights, where State Farm now leases their space. And then the second phase was the Sun Devil Stadium renovation that has been completed. So right now they're in the third phase of the corridor — they call it the Novus Innovation Corridor. So non-athletic space. There's an office building that just completed construction over there, an apartment complex is there, a hotel. And they're working on kind of the next phase, which is the mix of uses — more office, hotel, apartment uses that are kind of planned in that third phase, along with some retail and restaurants. So that will look very different. Right now, a lot of it's parking lots. So it'll be very different in the next few years. And then on the athletic side, right now, the Board of Regents is looking at ASU's proposal for a new sports arena that would specifically focus on hockey, but it would be a multi-use arena for gymnastics, volleyball, wrestling and other uses. And construction on that is supposed to begin early next year once that's approved.

GILGER: So that's a massive project as well, an entire arena coming there. And I wonder, Corina, so a lot of universities have really struggled with funding through the pandemic, with keeping up enrollment. Has ASU just not? I mean, how are they funding all of these projects that they have planned here as we're in the midst of a recession still?

VANEK: It's true that a lot of universities have struggled, and ASU's actually no different. A lot of their revenue that came from international or out-of-state students has taken a serious hit. But as far as the construction, a lot of what I mentioned, particularly in the Novus Corridor with the offices, hotel and some of the other non-athletics uses are being funded privately. So developers are going in and building in the corridor. And instead of paying property taxes — because university land is owned by the state, so they don't pay property tax — they are paying and in lieu fee to the university. That fee will then be used to fund Arizona State's athletics programs. So they're using this as kind of an interesting funding mechanism. So rather than costing the university money, it's actually supposed to bring them in money in lieu of property tax.

GILGER: And that kind of scheme has caused legal challenges in the past, correct?

VANEK: There have been legal challenges, not specifically related to Novus, but actually, if you look on Mill Avenue, there's a hotel that ASU is working with — the Omni. And that actually was what sparked the lawsuit between the Arizona attorney general and the Arizona Board of Regents. That lawsuit was thrown out on a statute of limitations grounds. So that one, they never really argued the merits of it exactly, but it was filed too late to, to render a judgment against or for the university in that case.

GILGER: All right. That is Corina Vanek with the Phoenix Business Journal, joining us this morning to talk about ASU's pretty big expansion plans in both Tempe and downtown Phoenix. Corina, thank you so much for taking the time to come on.

VANEK: Thanks so much, Lauren.

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