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Neighborhood Renaissance: 32nd Street Merchants, Land Owners See Opportunity in Once Bleak Submarket

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When 36,000 cars a day disappeared from North 32nd Street in Phoenix, something had to change to help the businesses still in the area survive.

“I think that some of the (shopping center) owners were too slow to react to the sudden drop in traffic,” said Rebecca Golden, owner of 32 Shea, a cafe in Paradise Hills Shopping Center just north of Shea Boulevard on 32nd Street. “These were businesses depending on traffic, and the drop off was just devastating to many businesses.”

Golden, who has a hip, thriving restaurant, took over from a previous restaurateur who simply abandoned the business.

Commercial activity on 32nd Street between State Route 51 and Union Hills Drive was hit hard in 2003 when the freeway was completed to Bell Road in 1999 and again to Loop 101 in 2003.

“(Paradise Hills) was almost empty, until the new owner took over,” Golden said.

Kornwasser Shopping Center LLC took the property out of receivership and made a major investment. The remodeling early in 2015 paid off with a new anchor store, Karsten’s Ace Hardware.

“We looked at what how Rebecca pioneered that property, and saw this area as an exciting place to be,” said owner Dave Karsten. Paradise Hills is one of four family-owned Ace Hardware stores carrying his name. “What brought us was the neighborhood. This is a very stable area and there is no other store like ours.”

Karsten said he attended the long procession of neighborhood meetings run by the city of Phoenix to find what the community wanted in terms of improvements along the 32nd Street corridor.

“(S.R. 51) freeway runs very close to 32nd Street, and that keeps traffic off that street,” said Michael Pollock, president and CEO of Michael Pollack Real Estate Investments and owner of Cactus Village at 32nd Street and Cactus Road. “However, for our property, the freeway generated more traffic on Cactus Road, so we didn’t have the problems that others faced. We’ve maintained a 90 percent and better occupancy rate even through the worst of the recession.”

Pollack said the area needs to increase its residential density to really help merchants succeed up and down the street.

“Medium density on the right properties in the (32nd Street corridor) will be a big boost,” he said. “Any time you add more people to a retail mix, you’re adding to how well store owners will do.”

The residential mix is getting a boost from Watt Communities of Arizona. The Santa Monica-based, family-owned development company acquired two 4-acre parcels for residential development.

“We specialize in infill development and these two properties fit with the way we’re developing elsewhere in the Valley,” said Steve Pritulsky, president and CEO of Watt’s Arizona development company. “We think that the combination of a for-sale property near Cactus and rental property near Shea are good for the area.”

Watt Communities View 32 north of the Basha’s shopping center at Shea Boulevard is more than 130 apartments; 32 North between Cactus Village and the Basis Charter School south of Cactus Road, is a single-family neighborhood of empty-nester and starter homes.

“We focused on 32nd Street because of its opportunities, but not over other areas,” Pritulsky said. “This is an extension of what we’re doing in Tempe, Biltmore and Roosevelt Row.”

Watt sees itself as a pioneer in planting a flag in a market sector ahead of other developers.

“Redevelopment opportunities are limited,” Pritulksy said. “When we find an opportunity, we want to jump on it.”

Phoenix Councilman Bill Gates, who led the North 32nd Street planning effort said that developers with plans like those from Watt Communities, are going to change the face of the street.

“We are putting a plan into effect with nearly no budget,” Gates said. “But with the passage of proposition 104, we expect to do more for the neighbors and owners in the area.”