CIGNA Readies for 95,000-SF Development

PHOENIX-Clarius Partners LLC is ready to begin clean-up and construction of an infill parcel of land that was once the site of a failed residential project. The Chicago-based developer is ready to clean up and commence construction on a 95,000-square-foot LEED-certified building for Cigna Medical Group, the group practice division of Cigna HealthCare of Arizona.

Clarius will begin clean-up activities in October 2011, and break ground on the new facility in December 2011. Completion is anticipated for late 2012. The new facility will provide services including outpatient surgery, family practice and urgent care.

The site at 3131 N. 3^rd St. once contained the former 10-story Al Beadle Building, which was home to Qwest. In September 2009, the building was imploded, and a residential development planned for the site. However, “after they demolished the building, the market collapsed and the developer wasn’t able to follow through,” explains Steven Duncan, Clarius’ managing principal.

The problem, however, was that the implosion left several stories of debris on a prominent site. “All that debris has been sitting there for three years,” Duncan tells GlobeSt.com. “It’s been a big political problem for the city. The residential community has been upset for some time.”

Along came Cigna Medical Group, which wanted to relocate from its current digs at 755 E. McDowell Rd., approximately 1.5 miles away from the new site. Duncan says Cigna’s lease was running out at its current location and the organization needed more space. Requirements included the need to be in close proximity to the current site and a place that would be convenient to the patients. The fact that this debris-strewn parcel was close to the Phoenix light rail was a plus, and Cigna gladly put the parcel under contract, with the idea that Clarius would handle cleaning up the debris and developing the site.

Then the problems began. “Cigna was under contract to buy the site; they assigned the site to us, then one of the sellers got into a court battle with the FDIC,” Duncan says. “They ended up filing for bankruptcy while the site was under contract, and the whole thing got thrown into bankruptcy court.”

While Cigna and Clarius wrestled with the court, another site was found as a backup. “For awhile, we were under option with two different sellers, we were taking this site and the other site through the same building and the same pre-application process and were running parallel paths, just in case,” Duncan says. “It’s been a busy six months.”

With help from the city of Phoenix, however, and a great deal of perseverance, Cigna claimed the site.  Duncan says that, after examining the plans and taking the project through the first phase, he doesn’t expect any more surprises to crop up. “This is a relatively clean site,” he adds. “We just have to dig it out.”

John Werstler, Jim Bayless, Bob Zwengler, and Matt Knowles of CB Richard Ellis represented CIGNA’s Corporate Real Estate Group throughout the site and developer selection process. Construction financing for the new development is being provided by The PrivateBank, headquartered in Chicago. Orcutt|Winslow, an architectural firm headquartered in Phoenix, is providing the design services. The project’s general contractor is Layton Construction and Kimley-Horn will provide the civil engineering design for the new development.