West 6th developer sees similar opportunity in stalled Elevation Chandler - Ahwatukee Foothills News: Valley And State

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West 6th developer sees similar opportunity in stalled Elevation Chandler

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Posted: Tuesday, August 2, 2011 3:19 pm

The developer that revived the stalled Centerpoint Condominiums in Tempe is looking to buy the even more troubled Elevation Chandler.

The Chicago-based Zaremba Group has watched the unfinished Chandler site for a year, said Kent Chantung, the company’s director of residential development.

“It’s an opportunity that we have that makes a lot of sense,” Chantung said.

The company’s success with the renamed West 6th in Tempe has encouraged it to expand in the Valley, Chantung said. Zaremba bought the two unfinished Tempe towers in March and opened doors to residents on Monday. The downtown towers are taking shape mostly as they were envisioned originally, except they’re rentals instead of condos.

Chantung said he’s waiting for a court to rule on Elevation Chandler’s disputed ownership. The project has languished since 2006, when developer Jeff Cline halted work on a pair of towers up to 12 stories high. They were to house a hotel, luxury condos, offices and a fitness center. The concrete and steel shell of one building south of Chandler Fashion Square has been an embarrassing eyesore for the city.

An investor won the site in a controversial 2009 auction that is still being disputed in court. The project’s lender, California-based Point Center Financial, took possession of the property last year. A court hearing later this summer could finally resolve who owns the land and clear the way for a sale.

“We are waiting for that decision to be made and for those issues to be cleaned up,” Chantung said.

Chandler has been approached by a potential developer every couple months for the last year, said Chris Mackey, the city’s economic development director. She heard about Zaremba’s interest from the Tribune and said she plans to contact the company.

The city and developers consider the 15-acre Elevation site a great location despite the failed project, Mackey said. The surrounding 3 million square feet of retail near Elevation will support many types of successful projects, she said.

“I think we as a city are just anxious to have the right owner present themselves and say what their vision for the property really is,” she said.

Like Centerpoint, Elevation was originally financed by the now-bankrupt Mortgages Ltd. That lender’s projects are difficult to auction because about 200 investors have a say in how the firm’s properties are sold, Mackey said.

Zaremba could dust off Elevation’s original blueprints and build the project as apartments instead of condos without seeking new zoning, Mackey said. More extensive city approval would be needed if the project changed substantially.

It’s unclear whether Elevation’s shell is an asset to any builder that would want to finish the structure. The elements may have caused damage and engineers will need to test it. Many experts have offered educated guesses, Mackey said.

“Seventy-five percent say it needs to be leveled and 25 percent say it may be able to be saved,” she said.

Residents constantly inquire about Elevation’s status and some call for the city to raze it and send somebody the bill, Mackey said. Private property rights keep the city from doing that.

Whatever happens, residents shouldn’t expect shopping on the site because retail already saturates the area.

And Cline’s vision for condos?

Even before the real-estate bubble burst, development experts questioned or ridiculed plans for an urban high-rise in the parking lot of a suburban shopping center. Mackey doesn’t expect anybody to pitch ritzy condos.

“I would say that’s almost an absolute,” Mackey said. “I probably love Chandler more than anybody there is and even I didn’t see how we supported million-dollar condos at that location.”

• Contact writer: (480) 898-6548 or ggroff@evtrib.com

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