Carefree Truth
Issue #630, March 16, 2018
The condo project proceeded to the Council for discussion. Councilwoman Cheryl Kroyer noted that the original project proposed by Mr. Gabriele had been for large luxury apartments on the south property previously owned by Butte Properties and now owned by INCA. The new proposal was for large luxury condominiums on the north property, which is still owned by Butte. She pointed out that Ed Lewis had problems financing his luxury condo project when he owned the south property. Why is the proposal condos again, what comps are being used, and what are the price points for this project?
Larry Gabriel, of Azil Development, replied that demographics and markets change, and the financial community follows those changes. At the time they proposed the apartments, that's what the market dictated. In talking to leasing agents and the financial community, they were told that the market has shifted to small apartments but that large luxury condos are a hot market. Developers have to "flow with the wind" and "go with the fluidity of the market".
Councilman Gene Orrico said, "We've been in this dance twice before. Do you have the financing to do this project?" Mr. Gabriele replied that they can't promise anything. More has to be done before the financing can be put in place. At this stage, he said they have oral commitments for financing, and it looks very promising, but the market can change tomorrow. In his business, one can do everything right and still hit a brick wall. He cited Ed Lewis as a perfect example of that. Mr. Orrico asked what they anticipated for a ground breaking date if they get approval from the Town and their financing were in place. Mr. Gabriele said they were aiming for September of this year. The concept they brought to the meeting was just to give the Council an idea. They still need to generate architectural drawings that must go through the Design Review process, then back to the Council. They intend to be back shortly.
Ms. Kroyer again asked what the price points are for the units. Mr. Gabriele replied that they would be asking $700,00 to $1.5 million. Ms. Kroyer said there are no comps in the area for that price range. Mr. Gabriele said there are lots of comps now; 4 projects are being built. Silverleaf prices are $2.2 million and up; they are pre-selling and construction has begun. The Borgata condos are successfully selling from $600,00, with most over $1 million dollars. Mountain Shadows, at $2.2 to $2.3 million, has sold 21 of their 42 units. The market is there now.
Vice Mayor John Crane asked if there were comp issues of proximity relative to this project, a problem faced by Mr. Lewis. Mr. Gabriele agreed that they are all in different marketplaces. Mountain Shadows is in Paradise Valley, the Borgata is in Scottsdale, and Silverleaf is the southernmost project, but they are all using each other's comps. Carefree is the northernmost end. The markets and demographics are similar. Ed Lewis didn't have the comps that are out there now. The only comps at the time were those from his own project at Kierland. The pros are saying the market conditions are here now.
Councilman Mike Farrar assumed someone was underwriting the appraisal on the proforma, asked if Azil has seen those numbers yet, and if they were confident they could get $300 to $350 per square foot. Mr. Gabriele said they and the people to whom they are talking have a lot of confidence in the marketplace now. The hardest part of the market is the pre-sale target, which has gone down because the marketplace conditions have improved. 10 pre-sales are now required, as opposed to 4 years ago when 25 or more were needed. Azil is planning to begin marketing and taking deposits within the next 3-4 weeks. He said they have a "fantastic marketing team" which includes his partner Robert, as well as a top broker from Sotheby's. Sotheby's has done some of the projects he mentioned.
Mr. Farrar asked the architect, Justin DeWitt, if he would classify the design presented to the Council as mid century. Mr. DeWitt responded that there wasn't a name for it, but contemporary would be the closest approximation. The brown material at the bottom is Korten steel. The material above is slatted wood. Mr. Farrar asked how they planned to incorporate this into Carefree's style, and suggested a possible softening of the elevation. Mr. DeWitt said they plan to use plaster and stone too, materials that are hard but that are visually soft. The building's curves don't show in the rendering at that angle. They might curve some of those corners to soften the look. The Korten steel was used to evoke the sundial but it could be changed to stone. Mr. Farrar said he looks forward to seeing the next iteration.
Mayor Les Peterson asked Mr. Gabriele to discuss the feel of what somebody is buying as their home. Mr. Gabriele said all the units will be 2 bedrooms and a den, or 3 bedrooms. There will be more 3 bedroom units. The smallest unit will be 2400 sq. ft. and they would go to well over 3,000 sq. ft. They will have wide, open great rooms with kitchen and eating areas, and a vast expanse of opening doors. Balconies will be 14'-16' deep and 40' wide. The tremendous outdoor living areas provide privacy due to their size. Concrete construction gives the ability for the building to be shaded by wide cantilevers.
Councilman Steve Hatcher asked if they thought the exterior of the building integrates with the existing surrounding architecture. Mr. DeWitt said they tried to create something that is "of its own" and is not "slavishly imitating something else". There will be some changes and some softening. The fins and thin slats shown are not coming across as the warm and tactile building they would like to see. It is a lot more modern than most of the buildings in Carefree, but he pointed out that the Council chamber building is a modern style too. Mr. Hatcher said he understands the block walls and cantilevering. He's an engineer. But this particular style doesn't seem to integrate well overall. He looked forward to seeing the next elevation presented.
Mr. Farrar said he was involved with Scottsdale Soho, formerly the Safari Hotel. This rendering is reminiscent of that. The dilemma was that people entered into their parking space below and took the elevator up. The hallways were open to the elements, which was problematic with rain or bad weather. Mr. Gabriele assured him that all the hallways will be enclosed.
Councilman Mike Krahe said there were many good questions asked, and he was sure they would come back with a softened design. He was pleased that Azil was trying again. The Town wants to bring people into the core and increase the number of people who will be walking around. "I can't wait to see what you come up with." Mr. Gabriele said it's a process and they will be working with the staff. He hoped everyone would be happy when it comes before Design Review.
The Council unanimously approved the revised development agreement to eliminate retail on the street level, replacing it with condo units.
https://vimeo.com/259485096
Lyn Hitchon
Prepared by Carefree Truth
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