Macerich, DMB Creating $1B Core Urban Center

PHOENIX-After years of planning, DMB Associates Inc. of Scottsdale, AZ and Santa Monica, CA-based Macerich Inc. are moving forward on mixed-use developments for 2,400 acres of neighboring land to create a core urban center at the metro’s far northeastern corner. At completion, One Scottsdale and Palisene are expected to exceed $1 billion of commercial development.

The 2,200-acre Palisene has landed Dillard’s as an anchor for the first phase, a one-million-sf regional shopping center on 112 acres at the junction of Scottsdale Road and Loop 101. Scott Nelson, Macerich’s vice president of development, says with dirt could start moving in late 2009 or early 2010 on the first phase. The regional retail hub is penciled to open in 2011 or early 2012.

“As of now, Dillard’s is the only commitment set in stone,” Nelson says, “but we’re talking to others that have expressed a lot of interest in the project.”

On the east side of Scottsdale Road, construction will be finished by the end of this year on One Scottsdale’s first phase: Dial Corp.’s $150-million headquarters, totaling 400,000 sf. The 105-acre One Scottsdale is entitled for 1.8 million sf of commercial space, 1,100 residential units and 400 hotel rooms. How that will break out and who will develop it is still in the planning phases, Nelson tells GlobeSt.com.

“We own Scottsdale Fashion Square and Biltmore Fashion Park,” Nelson says. “Our idea is that One Scottsdale will be the third tip of the triangle, where we can address retailer’s second locations and others’ first-to-market locations. We see that location for luxury retailers.”

Both projects have been on the drawing board for awhile, but it’s just been in the past couple years that the JV partners felt the time was right to move forward. Palisene’s site is all desert land, the majority of which is north of Loop 101. Until recently, it was under the state’s control. South of Loop 101, things are different. Power centers are under development while high-end vehicle dealers already have set up shop in the corridor.

“You have adjacent master-planned communities developed to the west and east of the area,” Nelson explains. “It’s an area of higher-end incomes, very high-quality demographics and psychographics–the upper echelon of the community.”

One Scottsdale and Palisene will be developed to serve that demographic. The projects will be built in phases, driven by market demand rather than a specific timeline. “Our strategy has always been market driven,” Nelson says. “We’ll only deliver a project when the time is right for the area.”