Chicago couple designing new future for historic warehouse

Posted By Mike Padgett

July 15, 2008

PHOENIX, Ariz. – This time next year, entrepreneurs Steven and Andi Rosenstein hope to be adding a look of Chicago to the 80-year-old warehouse they own just south of downtown Phoenix.

The Rosensteins’ plans for their 14,000-square-foot building will offer a redevelopment concept prevalent in Chicago, where they lived before moving in 2001 to north Scottsdale.

The concept features one large open space. There are no interior walls to detract from the building’s original bow truss ceiling, its skylights and its concrete floor.

Steven Rosenstein said the plans include “a nice upscale, but very casual, bar and restaurant that flows into what would be a seven-day-a-week local produce and farmers market-inspired, grab-and-go kind of marketplace.”

Other businesses in the building at 525 S. Central Ave. could include “our own clothing brand and a couple of other things we’ve got in the works right now,” Rosenstein said.

“We’re lining up the potential merchants and tenants and restaurant people,” he said.

The Anchor building is on the state and national historic registers. It caught the Rosensteins’ attention because it resembles a 1910 juke box factory they saved from demolition in Chicago in 1995. They renovated that building into the corporate offices of their Fitigues Clothing brand, which they formed in 1988. They sold their company in 2006 to Chico’s, a Florida-based clothing retailer.

Late 2009 is a tentative completion date for the Rosensteins’ renovation of their warehouse. That date is more than a year away, “but time’s going fast,” he said.

The Rosensteins relocated to Scottsdale a few years ago because of the blue skies, mountains and open space.

However, they love Chicago. It was the tug of the big city that kept alive their cravings for an urban atmosphere with grit. They found themselves longing for an urban area in which old buildings are recycled into new uses.

“After a few years of living in that part of town (north Scottsdale), we started craving a little bit more uniqueness, a little bit of ambiance,” he said.

That’s when they started scouting the warehouse area immediately south of downtown Phoenix.

They found the red brick Anchor building and bought it in 2007 from Michael Levine, of Levine Machine Development. Levine is another active entrepreneur who sees redevelopment potential in the city’s original warehouse district. Levine has bought and sold several warehouse properties in the area.

The Rosensteins’ building and other nearby properties are ripe for redevelopment, said Gary Tenney, an industrial properties vice president at Colliers International‘s Phoenix office.

The area offers vacant sites for new construction as well as large warehouses that could be renovated into mixed-use projects where retail shops, galleries and other businesses could be added to attract local residents as well as tourists, Tenney said.

Excluding the two sports stadiums and several restaurants, that part of downtown Phoenix offers little “to attract the casual visitors to downtown Phoenix,” he said.

“We need to do something down there with some character, you know,” Tenney said. “Some eclectic shopping and bookstores come to mind, and restaurants with music on the patio.”

Tenney said the sluggish real estate market has a silver lining – the drop in prices is attracting attention from interested buyers. He said one of his clients has lowered the $6 million price of a warehouse property to $5.25 million. That property now has the attention of an out-of-state buyer interested in converting the warehouse into residential lofts, offices and retail.

Tenney said downtown properties, even in a time of depressed home prices, will benefit from the completion of several major downtown public works projects late this year. Those include the light rail system, the $600 million expansion of the Phoenix Convention Center, the $350 million Sheraton Phoenix Downtown Hotel, and the expanded downtown campus of Arizona State University.

Other projects under way in downtown Phoenix include:

  • CityScape, a $900 million, 2.5-million-square-foot mixed-use development. The plans covering three blocks include a 250-room luxury hotel, a 150-room boutique hotel, 1,000 condos, retail space and office buildings between Washington and Jefferson streets and First Avenue and Second Street. Phase one construction started in late 2007. The partners include RED Development, CDK Partners, Barron Collier Co., and Novare Group.
  • A new 250-room hotel as part of the redevelopment of the historic Luhrs Building and the Luhrs Tower on the south side of Jefferson Street, between Central and First avenues. Work on the historic buildings is under way. The buildings and a parking garage, all covering a city block, were bought in 2007 by Hansji Hotels, an Irvine, Calif., hotel developer.

A megaproject in the proposal stage is the Jackson Street Entertainment District, a mixed-use development next to Chase Field and US Airways Center. Plans include restaurants and shops; 1,100 condos; 300,000 square feet of office space, and a hotel with 100 rooms. The proposal, with early estimates swirling around $300 million, is winding its way through the city approval process.

Rosenstein, because of the major construction in downtown Phoenix, is keeping tabs on other warehouse properties around his own, in case one comes on the market at a price that interests him.

“I think it’s a good time to buy, and I think it’s only going to get better,” he said.

Jul 15th, 2008

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