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February 22, 2007
Jon Talton, The Arizona Republic
It took a bottle of wine for the partners of Grace Communities to go from a modest downtown rehab to imagining the state's tallest condo tower. It took much more to bring it out of the ground, and therein lies our tale.
Most of the private projects announced for the supposed downtown Phoenix boom are phantoms: towers announced with pretty renderings and a sales office but little chance of becoming a reality. But 44 Monroe is 60 percent sold and well out of the ground. Soon it will be a commanding presence on the skyline; at 34 stories it will be among the tallest buildings on the skyline and cut a distinctive, clean, postmodern look.
The skyscraper represents the kind of private-sector investment that helps justify the hundreds of millions of public dollars spent to revive downtown. Private capital has lagged in Phoenix, unlike in other large cities. David Wallach's Summit tower near Chase Field is the only other major private investment so far in downtown proper (Portland Place is in Midtown).
But the approximately $160 million for 44 Monroe is just a piece of an estimated $500 million in projects Grace plans for downtown.
"Maybe we see things that other people can't," said Jonathon Vento, one of the Grace principals, when asked about why his project is happening when so many have fallen away.
Vento, along with partners Donald Zeleznak and Ryan Zeleznak, started with an old 10-story building at First Avenue and Monroe, originally the headquarters of the Arizona Bank. During the dot-com boom, it was slated to be turned into a hub for telecom gear. The building was picked up at distressed prices after the bust, and the partners intended to convert it into condos.
Even then, they realized the pent-up demand for urban condos here: 62 units were reserved in 40 days. Over the famous bottle of wine, they dreamed of something much bigger. Most of the early buyers converted to the new tower, even though it was more expensive (it's priced from $500,000 to $3.5 million). The lowest units are on the ninth floor, so every condo will offer views.
Grace built a full model home in an office at the US Bank tower across the street. It assembled a staff of 50 from around the country to sell the project. Financing came from Corus Bank of Chicago, a major commercial lender. Building the tower has taken, Vento said, "a million decisions" for a project much more complicated and costly than the single-family housing that is the region's staple.
These costs and complexities are enough to root out the would-be players that tie up a parcel and put up a sign. Now the question is how many other real developers will emerge downtown and in the Central Corridor with similar vision, capital and expertise.
"There is definitely a demand for this lifestyle," said Ryan Zeleznak. Although there's an education process for many Phoenicians -- for example, having their deposit tied up for two years while the tower is built -- others have enjoyed high-rise living in other cities and want it here.
The partners now have plans for the historic Professional Building at Central and Monroe, for years the headquarters of Valley National Bank and topped by a giant revolving VNB sign. Grace purchased the building two years ago and has been quietly working with the city and historic groups to revive it as a boutique hotel. In addition to 150 rooms, plans call for a rooftop "sky bar" and another bar in the giant vault of the basement.
To the east of the Professional Building, Grace hopes to build a tower of more affordable condos and apartments.
"We think Phoenix is the greatest city in America," Vento said. "Right now, you could draw a curtain around downtown and pull it back in three years, and it will take people's breath away."
We hear a lot of talk in our town, but Grace has the street credibility to make believers.
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