Avondale has landed deals with two restaurants to expand their businesses to the city’s blossoming City Center.

The Avondale City Council last week approved lease agreements with Carlos O’Brien’s Mexican Restaurant and Ground Control Coffee and Wine Bar, each with existing Valley locations, paving the way for the two businesses to set up shop at the City Center’s “Main Street” retail corridor.

The 25,000 square feet of retail space is under construction along 114th Avenue immediately in front of the new American Sports Centers Avondale @ Randall McDaniel Sports Complex, which opened in November.

The sports facility and the Main Street retail mark the first developments to come to the city’s ambitious City Center project, a 400-acre, mixed-use vision of an urban-style environment straddling both sides of Avondale Boulevard south of Interstate 10.

The retail buildings are scheduled to be completed by Feb. 28. The scope of work includes the construction of the building’s core and shell. Interior finishes are to be completed by the tenants per their lease agreements.

A deal with Carlos O’Brien’s
“During the past year, staff has identified potential businesses that were looking for expansion opportunities and would complement the City Center,” said Dan Davis, Avondale’s economic development director. “Now we’ve got a couple of good operators.”

As part of agreement, Avondale will purchase 15.36 acres of real property from Carlos O’Brien’s for $3.1 million. The restaurant company, which has locations in central Phoenix and Scottsdale, had planned to build an eatery at the vacant land near Avondale Boulevard and City Center Drive, but now will operate out of the Main Street retail.

The deal splits the 15.36 acres into three parcels: A, B and C, and grants the owners of Carlos O’Brien’s the option to later acquire blocks A and C for $1.53 million – the same cost per square foot that the city paid – with an annual option payment of $70,650. The city would retain the middle parcel, block B, for future City Center development, Davis said.

Jeff Lipson, co-owner of Carlos O’Brien’s, said he plans to begin operating out of the new Avondale site by fall.

“I love it,” he said. “People have been asking me for years, ‘When are you going to open up, when are you going to open up?’ Now we can say we’re hoping to open in September.”

The full-service Mexican restaurant will sit on 5,600 square feet of space, and have a 1,200-square-foot patio at the north end of the site.

The initial term of the lease will be seven years with the option to extend the lease for two additional five-year periods. The annual lease for the tenant is a base lease amount of $102,000 plus 7 percent of the adjusted gross sales in excess of $2 million.

The city is also providing the tenant an allowance of $300,000 related to the dining and public area improvements. In addition, Avondale will contribute up to $300,000 for the purchase and installation of all necessary kitchen equipment needed for the proper operation of the restaurant.

The agreement also allows Avondale to retain ownership of all kitchen equipment and the fixed dining room and public area.

Any costs above the $600,000 will be the responsibility of the tenant. Carlos O’Brien’s will provide a minimum of $500,000 that will be used for furniture, fixtures and equipment, and will be responsible for all professional design fees associated with the improvements.

As a condition of the purchase agreement, the owners of Carlos O’Brien’s have agreed to open and operate a second full-service, 6,000-square-foot restaurant within one year of the completion of retail space on Block B, Davis said.

Ground Control signs on
Ground Control will occupy 2,500 square feet of floor space and have a 525-square-foot patio near the south end of Main Street. The full-service coffee and wine bar has another location in Goodyear.

Sean Rassas, owner of Ground Control, said his new shop will be up and running on or before Sept. 1.

“The sports center has really been a draw for people all over the Valley, and Avondale’s done a great job of marketing [the City Center] as a destination for their residents,” Rassas said. “That makes it a great opportunity for expansion and a great partnership to have.”

The initial term of the lease will be seven years with the option to extend the lease for an additional seven years. The initial lease for the tenant is $59,940, plus an increase each year beginning in year two and continuing until the end of the seven-year period for a total of $494,660.

The city will provide the tenant an allowance of $270,000 that will be used for tenant improvements, including the dining and public area improvements.

Ground Control will supply and install all kitchen equipment and other furniture, fixtures and equipment needed for the restaurant. The cost of those improvements is not expected to be less than $100,000, Davis said.

Any additional costs incurred for building improvements will be the responsibility of the tenant. Ground Control will be responsible for all professional fees associated with the improvements.

2011 looking good
With two lease agreements under the city’s belt, this year looks to be a good one for the City Center, officials said.

“We’ve kicked off the new year very positively. We’re very pleased with the pre-leasing as it’s been going,” said John Ruggieri, Avondale’s City Center development specialist.

Currently, about 33 percent of Main Street’s 25,000 square feet is pre-leased, but that number is expected to go up soon, he said.

“We are currently working with a sports bar and restaurant group and anticipating bringing that to the market shortly,” Ruggieri said. “That would take us to about 50 percent.”

While Ruggieri would not name other potential restaurants or retailers for the Main Street corridor, he did indicate the city is in talks with “about five potential tenants” from a variety of sectors, including more retail, multimedia and additional food services.

“We have hopes that the balance of the retail will be leased out,” Ruggieri said. “We have strong interest. I’m expecting a good lease-up in 2011.”

And that’s something the city is excited about, he said.

“Especially in this economy, to be able to have this kind of response from the retail community is very encouraging,” he said.

And now that Avondale has made the land deal with Carlos O’Brien’s, the city can begin focusing on the second phase of the City Center, Ruggieri said.

“I think this is a real win-win situation. The purchase of the O’Brien’s property opens up the potential of future development in the City Center in a manner that supports the city’s investment in the first phase,” he said.

Essentially, Ruggieri explained, Avondale is considering three different options for the next phase of development. One would bring in professional office space; the second would focus on hospitality; and the third would be a combination of multi-family residential and retail.

“The city is carefully analyzing the respective market sectors and the capital markets to discern which project type would be both financially feasible and consistent with the longer term goals of the City Center,” he said.

Thanks to the sports complex
And there’s no letting down now, officials said.

“The implementation and development of the Avondale City Center continues to be a primary economic development focus,” Davis said.

Both Davis and Ruggieri attribute the City Center’s momentum to the success of the $11 million American Sports Centers Avondale @ Randall McDaniel Sports Complex, which brings in thousands of amateur and youth sports players and their families to the center each month.

That facility “is creating additional development opportunities for the city,” Davis said.

“Things are going extremely well for us. Obviously, American Sports Centers is a big marketer for us, driving a lot of people into City Center,” Ruggieri said.

“This has been three years in the making,” he said. “It’s right on schedule, the development is responding quite well to the market, we’re leading the market. We’re very pleased with our progress.”

And now that the city has newly leased tenants – and could soon have half of Main Street’s retail pre-leased – “that’s going to be an added asset for the project,” Ruggieri said. “It’s going to get us what we’re seeking to accomplish: A great City Center development.”

Frank Morris can be reached by e-mail at fmorris@westvalleyview.com.

Avondale Short Sales, Avondale Foreclosures, Avondale Real Estate, Avondale Realtor, Avondale Realtors, Avondale Homes for Sale, Avondale Short Sale, Avondale Foreclosure

National Post: Perfect Storm for Buying US Real Estate

Many Canadians dream about escaping the dreary winter months by owning a place in Florida, Arizona or even California. Staggeringly low prices for U.S. real estate, combined with a loonie at parity or higher, is creating an unprecedented opportunity.

“Right now it’s the perfect storm,” says Al Andersen, a Phoenix-based realtor with Russ Lyon’s Sotheby’s International Realty. “It’s the best real estate market in Phoenix in 25 years. We’re bumping along the bottom.”

Applications for home mortgages in the United States jumped to the highest level in three months last week, buoyed by improvements in the job situation.

“The job market is beginning to gain traction, consumer confidence is improving, and even though mortgage rates have increased, they’re near historic lows,” said Mark Zandi, chief economist of Moody’s Analytics Inc. in West Chester, Pa. “Prices may go down a bit more, but we’re still seeing a pop in sales.”

Another report from the National Association of Realtors said the latest decline in U.S. home prices was driving a boost in sales as bargain hunters rush to buy before mortgage rates rise from November’s record lows.

“It’s hard to pick the bottom” says Brian Wruk, a partner in Transition Financial, a cross-border planning firm with offices Arizona. He’s telling clients not to rush to buy, but to have their Canadian dollars converted to U.S. dollars now — at today’s sweet rates — if they’re even thinking of buying.

“You need to get that currency risk out of the picture — get Canadian dollars into U.S. dollars now, so you’re ready to move.”

In Phoenix, Mr. Andersen estimates that about 70% of the mortgages are underwater, which means the amount outstanding on the loan is actually greater than the current value of the house. Competition for these units is fierce and almost everything is bought ‘‘as is’’ and most likely with cash. There are about 40,000 listings in the area, up from a more typical 10,000 units, but still banks generally won’t negotiate the price so most deals are done at list price or higher.

While Western Canadians often buy in Arizona and California, Eastern and Central Canadians favour Florida. And the housing situation is the same there.

“With prices like this it’s crazy not to buy,” says Diana Carter, an Ontario retiree who just had an offer accepted on a single-family house in Florida. Ms. Carter had spent four intense months looking at properties. “We looked at places for US$23,000 or US$24,000 but decided on something so much nicer for US$43,555.”

Ms. Carter said she and her husband toured dozens of places in south Florida and some of it was heartbreaking.

“You feel guilty when you go into some of the houses,” she said. “What’s sad is people trying to hold onto their house.”

At this stage banks will not renegotiate a mortgage with a borrower unless the borrower can prove ‘‘substantial hardship.’’ The definition of substantial hardship varies state by state. It can take months of debate before there is any sort of agreement. Meanwhile, the property can deteriorate.

“There are many homes selling at less than replacement building cost,” confirms Walter Molony, a spokesman for the National Association of Realtors (NAR) in Washington.

The U.S. real estate bubble peaked in either 2006 or 2007, depending on the market. The “correction,” as it’s politely called, is staggering.

In Miami-Fort Lauderdale-Miami Beach, the median price of a condo in 2007 was US$214,300. It was US$81,900 in 2010. (The median price means half of condos cost more and half cost less.) Single-family homes in the Miami area were US$371,200 in 2007 and US$200,900 in 2010.

Selling prices in many western sun states are even lower. In Phoenix-Mesa-Scottsdale, the median price of condos was US$201,500 in 2007 and US$68,900 in 2010. Single-family homes were US$234,900 in 2007 and US$139,200 in 2010.

The Las Vegas market was saturated with speculative suburbs and condos — many sit half-built today. The prices reflect that harsh reality. The median price for condos in Las Vegas-Paradise was US$201,900 in 2006. It dropped to US$60,700 by 2010. The median price for single-family homes in Las Vegas dropped from US$317,400 in 2006 to US$139,200 in 2010.

“What makes buying particularly appealing to Canadians right now is the exchange rate,” Mr. Wruk says. In 2002, the loonie was trading at US62¢. This week, the loonie hit a three-year high, trading US3¢ above the U.S. dollar.

That means Canadians were effectively paying a 40% premium on U.S. property as recently as 2002. Now a dollar is pretty much a dollar.

Some people are indeed finding spectacular properties.

Barry Brawn of Ontario closed on a “gorgeous property” on the water in Port Charlotte, Fla., in October 2010. He believes Florida is “at or close to the bottom” right now. Hugh Wakeham, owner of Toronto-based Wakeham & Associates Marketing, and his partner bought a home in Palm Springs, Calif., in 2007. “The prices had come down 15% from the peak and we thought we were getting a great deal,” he says. “But it’s since come down another 25%.”

Mr. Wakeham says the Canadian contingent in Palm Springs is steadily growing. “Canadians are coming in and buying and renovating — keeping the economy growing.”

© Copyright (c) National Post

Avondale Homes for Sale

Avondale Real Estate

Avondale Realtors: Utility Bill Considerations

An incoming state representative asked some West Valley cities to change how they collect utility bills or the state Legislature is prepared to force the change.

Rep.-elect Steve Urie, a Gilbert Republican,said some cities did an end run around the intent of the legislation and could avoid new legislation if they change the way they collect utility bills. The cities that have to change are Avondale, Glendale and El Mirage.

Urie wants renters charged higher refundable deposits that aren’t returned until services are terminated.

“I want the cities to charge the person who requests the utilities to be turned on and consumes the service,” Urie said. “The owner has nothing to do with it unless the owner elects to do something with it.”

Earlier in the year, Avondale revised the way it collects utility bills to conform with legislation passed in May, and signed by Gov. Jan Brewer that same month. The bill was adopted at the request of the Arizona Association of Realtors and imposed limits on the cities’ ability to collect delinquent utility bills from property owners.

That new state law requires a municipality to enter into a contract with an individual to provide utility service. Before the law went into effect, Avondale required payment from property owners for delinquent bills. The city adopted a hybrid system that places responsibility on both property owners and tenants.

Glendale, which tied utility bills on the property owner, was able to make an administrative change to comply with the law and still leave the responsibility on the property owner. El Mirage’s ordinance requires that new service be contracted by the property owner as well.

Lance Calvert, El Mirage director of public works and city engineer, said so far, the city has made no formal plans to change how it collects utility bills.

Those ordinances don’t appeal to the Realtors Association or other landlord organizations, Urie said.

“We’re going to have a horrible, horrific legislative period,” he said. “And coming from a municipality perspective, I don’t think the municipalities really want to spend this kind of time and effort and resources on this issue if we can resolve it without legislative action.”

Urie, who served on the Gilbert Town Council for 11 years, is a real-estate agent and property manager. He said it concerns him the cities want to charge him for tenants’ failure to pay.

“As a property manager, if I’ve got a prospective tenant that is a higher risk, then I charge a higher security deposit up to the legally allowable maximum,” he said.

In a City Council meeting last week, Avondale council members were surprised at Urie’s request.

“Let me get this straight,” said Councilman Ken Weise, “a state representative who owns investment properties in . . . Arizona would like cities to change the way we collect money from people who don’t pay their water bills?

“I have a huge issue with this. I’m assuming Representative Urie is a Republican. I have an issue when Republicans jump up and scream, when they say the federal government steps all over them and usurp the state’s authority. And then a Republican Legislature steps all over the cities . . . and then says ‘Well, you guys don’t really know what you’re doing, so we’re going to teach you what needs to be done.’ They did it with fireworks. They did it with sign walkers. They did it with the water bills, and now they want to come back and stick it to us again?”

Urie said he can see the city’s point, but he doesn’t like the socialism involved in the utility ordinances they passed.

Weise said real-estate agent Urie has a conflict of interest.

Urie disagrees.

“I don’t benefit myself, because I don’t have any properties on the west side,” he said. “I’m trying to head off legislation, because the realtors are prepared to bring in some legislation, which I have not seen and they have not shown me. Apparently, they already have senators and representatives willing to run that legislation.”

Avondale Councilman Frank Scott had this to say, “Representative-elect Urie, as a fellow businessman and landlord in the city of Avondale, if you can’t stand the heat, don’t be in the business. A business owner is responsible for his property. In the liquor business when someone bails and doesn’t pay their sales tax on the license you sold them, to get your license back, the state . . . makes you pay their sales tax. That’s not fair, but it’s the price of doing business.

“Having the landlord responsible for the water bills is acceptable to me. It’s part of me doing business in . . . Avondale. I would be happy to share that with (Urie) as an elected official and a landlord.”

Urie said he is willing to meet with the council members, and he is also willing to help the cities by introducing legislation so that tenants who are delinquent on utility bills are reported to credit-reporting agencies, and cities can deny them service until they pay their past-due utility bills.

“What the realtors feel like, and what the other individual landlords feel like, is that the cities did an end run, by simply saying we’re not going to turn on the utilities for anyone except owners,” Urie said. “There is nowhere in the Constitution that allows them to do that.”

Brent Stoddard, Glendale’s director of intergovernmental programs, said the city is meeting with Urie, the League of Arizona Cities and Towns and realtors. But Glendale has no plans to change the way it collects utility bills.

“They represent a specific group of businesses,” Stoddard said of the realtors and other landlord lobbyists. “The city represents the taxpayers as a whole, so I think that is where the differentiation is. We are listening to their concerns and hearing what they have to say.”

Avondale Arizona – ‘Shovel-Ready’ Projects

Click Here for a Sample Scenario

Owning a home is a dream in the hearts of many Americans. This dream can become a reality in Avondale, Arizona for those individuals who have the good fortune of taking advantage of the Neighborhood Stabilization Program. Not long ago, Avondale, Arizona was the epicenter of the housing boom. Today, 8.4% of the city’s homes are in foreclosure. These numbers certainly do not reflect the current growth of the area of Avondale or the sense of community shared by those who live there.

This home buyer’s assistance program in Avondale Arizona, authorized by Congress in July of 2008, has allocated funds specifically to help families nestle into a nice home in the great community of Avondale Arizona. The community is set to receive $2.5 million to redevelop neighborhoods damaged by abandoned and repossessed homes. While there are less funds than needed to completely solve the housing issues facing Avondale’s once booming neighborhoods, funds will be targeted to the neighborhoods with the greatest number of foreclosures.

Qualified families who plan to live in the home they purchase will receive incentives from the city’s home buyer’s assistance program in the form of subsidies towards down-payments (up to $35,000), closing costs and renovation expenses (up to approximately $10,000). Eligible buyers include any individual or family with a household income up to $77,050 for a family of four. In order to qualify for assistance from the Neighborhood Stabilization Program in Avondale Arizona, buyers must intent to live in the home they purchase. This home buyer’s assistance program is aimed at assisting families achieve home ownership, not to help investors purchase additional income properties.

Of the homes available for purchase, the structures are solid, but the interiors may need some cosmetic work. The financial incentives provided by the Neighborhood Stabilization Program will assist families to make necessary repairs to their new home.

Not only do prospective buyers benefit from housing prices that range from $130,000 to $230,000; they are also given one-on-one counseling in the area of home ownership and finance in order to help them be successful homeowners. As a part of the program qualifications, interested buyers must enroll in an 8-hour home buyer education class before they take part in the counseling session. This training has been developed in order to help prospective buyers through the home buying process.

“A home provides an anchor for families, gives children stability to grow to their fullest potential, and strengthens our neighborhoods and schools,” said Gina Montes, director of the city’s Neighborhood and Family Services Department. “This partnership will help hard-working families and individuals who have the dream of homeownership in their sights, but not yet within their grasp.”

To receive a complete listing of all foreclosed homes in Avondale, as well as information on the Neighborhood Stabilization Program, visit WestValleyPros.com. You can also call West Valley Pros at 623.521.6647 or email Rob at rob@westvalleypros.com

To sign up for a homebuyer class and get started in the program contact Housing Our Communities, an independent non-profit organization at 480-649-1335 and Jessica@housingourcommunities.org

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