COVER STORY, MAY 2006

THE STATE OF WESTGATE
Big and bold, Westgate City Center will provide millions of square feet of convenience and entertainment, including a chance to be a neighbor of the NFL.
Brianne Gloski

Westgate City Center in Glendale, Arizona, is expected to draw more than 22 million visitors annually. Nicknamed “Times Square of the Desert,” the Ellman Companies development will be the size of 20 square New York City blocks.

“Essentially, we’re building an urban city center,” says Steve Ellman, chairman and CEO of Phoenix-based The Ellman Companies, the master developer of Westgate. “To imagine the scope of its size, it’s 20 square blocks of New York.”            

“Times Square in the Desert”

Like New York City, Westgate will feature the loud and large outdoor signage that makes Time Square such a hot spot more than 2,500 miles away. The city of Glendale, Ellman’s municipal partner, gave the developers permission to make the Times Square signage district higher and larger then the billboard restriction allows in Arizona. Some of the billboards could stand up to 100 feet tall, helping Westgate live up to its nickname: “Times Square in the desert.” Ellman will look to its media partner ClearChannel Spectacolor to handle the outdoor advertising for Westgate.

Along with a bit of New York style comes a touch of Las Vegas glitz. The Ellman Companies is recreating a Bellagio-like water feature that sits in front of the world-famous hotel and casino in Las Vegas.

Both the water feature and the signage district are two factors that add to Westgate’s uniqueness, compared to other centers of its type. But, then again, the sheer size of Westgate puts it in a class of its own. It’s gearing up to be one of the largest mixed-use urban developments in North America, according to Ellman.

Assisting The Ellman Companies on the immense project are Baltimore-based Development Design Group, the primary architect; Scottsdale, Arizona-based Kurt D. Reed Associates, the local land planners; and Bethesda, Maryland-based Brix & Company, which is handling the strategic planning and marketing. Also on the development and leasing team is Clear Channel Spectacolor, who are joint venturing the development and marketing of the spectacular signage throughout the project.

Home Field Advantage

Two of the biggest draws for the $1.5 billion project are the $213 million Glendale Arena and the $350 million Arizona Cardinals football stadium, which is scheduled to open this fall. The arena opened in December 2003 and in its first year of operation was named the best new venue in North America. Last year, the 17,799-seat Glendale Arena hosted 57 concerts and ranked 18th in the world for concert sales. In addition, the neighboring Cardinals NFL stadium will host the Super Bowl in 2008, the annual Tostitos Fiesta Bowl, and the BCS College Football Championship Game every 4th year, starting in 2007.

The Glendale Arena is the home of the Phoenix Coyotes NHL franchise and the Arizona Sting National Lacrosse League (NLL) franchise. The Ellman Companies serves as the managing partner for both teams.

Trying to find a new home for the two teams was the catalyst for Westgate. Ellman was looking to combine the new arena with an urban village to create an all-encompassing city center to serve the booming Glendale community. In order to accommodate a project of Westgate’s size, the company needed the right land parcel. Ellman worked with the city of Glendale to locate a parcel of property in the county for the development and eventually bought and optioned 450 acres right on the freeway in the fastest growing part of the city. As a further boost to the success of the location, the Glendale Municipal Airport is less than 2 miles away.

“A lot of arenas are built in the outskirts of the city; we’re built in the hub, in the heart of where all the development is going,” says Ellman.

Maricopa County, the county seat of Glendale, is one of the fastest growing markets in the country. In 2003-2004, the county added more residents than any other county in the United States, according to the U.S. Census Bureau. The site where Westgate is located used to be a cotton field, as is most of the land still surrounding the development. However, that could soon change as more and more people are scrambling to move into the West Valley.

According to Ellman, the property values have doubled and even tripled in most cases in the surrounding area. “When we first bought the property, we paid $1.78 a foot for the land,” says Ellman. “The land today is worth about $17.50 to $20 a foot.”

Phase I

The arena was the first component of the project to be built by Perini Building Companies, and in September 2005, Perini broke ground on the remainder of the first phase. This 510,000-square-foot phase, scheduled to open in October, includes the entertainment core of the project. A 20-screen, 4,000-seat Loews Cineplex Entertainment theater, the state’s largest theater, is under construction as well as Yard House, Doc Green’s, Qwest retail store, Cold Stone Creamery, Moe’s Southwest Grill, Mama Fu’s Asian House, Coffee Plantation, and other tenants one usually finds at similar urban villages, says Ellman. The McGarey Group is handling the retail leasing, and as of the first of April, the first phase is 65 percent leased.

Along with some retail and entertainment space, Phase I will also include office, hotel and residential development. John Q. Hammons Hotels is developing a 320-room Renaissance Hotel featuring an 80,000-square-foot convention center. It is slated to open in mid-2007. Warnick & Co. is the hotel consultant on the project.

Also on the site, residential development partner Trammell Crow Residential is developing Alexan Westgate, consisting of 251 for-lease apartments, and The Quarter at Westgate, which comprises 171 for-sale townhouse units.

Opening this spring are the Village Office Lofts, containing 220,000 square feet of office space. CB Richard Ellis is handling the office leasing.

Sources of Inspiration

For a development of this size, inspiration must be pulled from several different places. Ellman and an eight-person team traveled all around the country to visit several mixed-use centers to see what works and what does not.

“As we spoke to many of the developers, we started to figure out what they liked that they did, what they wished they hadn’t done, and what they wished they had done more of,” says Ellman. “We visited all of these markets and borrowed the best ideas that we could.”

Some of the projects the Ellman team visited were Easton Town Center in Columbus, Ohio; Reston Town Center in Reston, Virginia; Atlantic Station in Atlanta; The Irvine Spectrum and The Grove in Los Angeles; City Place in West Palm Beach, Florida; The Block at Orange in Orange, California; Santana Row in San Jose, California; and the Baltimore waterfront.

Phase II and Beyond…

The second phase of the development will break ground early next year and is aiming for a 2008 completion date. Included in this phase are a 463,000-square-foot destination retail center, a 105,000-square-foot neighborhood retail development, at least one garden-style office building and a 440-unit residential district. Future phases will also feature entertainment, retail and loft residential space.

“The full build-out depends on the build-out of the market,” says Ellman. “If the economy stays strong, we should be able to complete it within 7 years.” Eventually, the development will include four more hotels, plazas and parks, and a 285,000-square-foot health and wellness center, on top of all the development in the first two phases.

Looking towards the Future

Along with the rapid growth in the West Valley of metro Phoenix, elected officials have committed to creating at Westgate and in the immediate area a focal point for the West Valley.  The project claims about $600 million of public money, with the football stadium, Glendale Arena, Cabela’s, and the convention center receiving major financial concessions from the city and state, according to Ellman.

“The vision of our elected officials to make Westgate and the surrounding areas into the newest and most exciting part of the Valley has been the catalyst,” states Ellman.  “The commitment made by our leaders has allowed us to partner and develop the most dynamic and innovative project in the Valley, and with the growth currently occurring and expected to continue for the next two decades, we envision Westgate becoming the geographic and demographic center of the Valley in the next few years.

“Although the Arena has been open for over two years already, Westgate is a work in progress,” Ellman says. “It’s a painting right now. We started with a clean palette that we’ve been able to design [from the start]…I’m excited that our arena won best new arena in North America, and hopefully the rest of the project will win a similar award as being one of the most creative and innovative real estate developments ever built.”

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