$21-Mil Sedona Retail Project Filling Quickly

Rob Hardy, senior vice president of Scottsdale-based Pacific Ridge Land, says phase III will kick off in spring 2002 and the final phase about a year after that. The completed Tequa, an invented word that's a mixture of Spanish and Native American languages, will have as many as 70 shops, art galleries and five restaurants.

The 95,000-sf retail project will be competing head to head with a similar retail development that has become a mainstay of Sedona, Tlquepaque, a 40-shop retail center built in the late 1970s. Tlaquepaque draws well-heeled visitors year-round and is fully leased with art shops and restaurants.

The Tequa Festival Marketplace, situated in the popular vacation spot of Sedona, is along Highway 179, adjacent to the Sedona Golf Resort and a recently built 225-room Hilton Hotel. Demand for retail space in Sedona is high, given that it's one of the state's most popular tourist destinations and its most upscale one, Hardy tells GlobeSt.com. At more than $200 per sf to develop, it may be the most expensive retail development per sf ever built in the state.

Demand can't be offset with new supply because the residents of Sedona are strongly opposed to just about any development, Hardy says. "It's a very limited supply and it will always be a very limited supply," he says. "It's a very tight market up there and rents are very high, the reason being that there is very limited places where you can build."

The nine-acre parcel where Pacific Ridge Land is building Tequa Festival Marketplace had been zoned prior to the company buying it for a retail development. Nevertheless, Pacific Ridge Land has worked closely with the neighbors to ensure that the project equals the quality standards that they expect, Hardy says. Pacific Ridge Land had acquired the parcel more than two years ago from SunCor Development, a division of Phoenix-based Pinnacle West Corp.