Nov. 18—Mesa’s downtown has a lot going for it with unique retail and restaurants, a convention center and hotel and the light rail.
But it also has challenges, including the lack of foot traffic, walkability and an unfavorable perception of the area by outside residents, according to a consultant firm hired last year to attract and retain the city’s retail base, which includes hospitality, restaurants and entertainment.
“I’m a big believer that if you’re going to have a successful retail district, successful downtown you have to have a healthy mix of local regionals and nationals playing together working together in these areas,” said Aaron Farmer, president of The Retail Coach at the Nov. 7 council study session.
“The nationals might not be downtown but they’re in that surrounding area. They’re helping draw and bring people there as well.”
The firm looked at the eight identified retail districts in Mesa — the downtown, Riverview, Asian District, Fiesta, Northeast Mesa, Superstition Springs/Dana Park, Power Road and Gateway. It dug into the demographics to understand what is occurring in the current market and why and what can be done in the future.
Each of the eight areas is distinct and has its own geographic area outside its boundary from where it draws its customers, according to Farmer.
“Who’s going to locate in the Power Road District is going to be different maybe than who locates in the Riverview District,” he said. “The Downtown District in particular, we’re not targeting the same retailers, the same restaurants that we would for Superstition Springs District.
“The downtown, as an example, is focused more on that local kind of regional-type prospect.”
The Retail Coach for the past six months or so talked to retailers and restaurants that are interested in each of the eight districts, Farmer said.
“We’re working with 10-plus retailers and restaurants right now to locate in Mesa,” he continued.
“We already have five letters of intent from retailers and restaurants since we began just a few months ago that they’re looking to come to Mesa. Some of those have actually turned into actual deal leases that are coming in.”
According to Farmer, a quality retailer or quality development considering locating in Mesa will look at the trade area — where people are coming from to shop and eat.
“As an example, Riverview on a regular basis pulls a retail-trade area population of about 206,000 people,” Farmer said. “But then as we look at other areas like Superstition Springs mall area or Superstition Springs area, they’re pulling over 400,000 that are shopping and eating in that area.
“The trade areas are going to be key as we move forward.”
That data is derived from tracking cell phones by a company that The Retail Coach partnered with.
“We’re using that kind of data for good,” Farmer said. “We’re using it to understand where are people coming from to shop and eat. No personal data is shared, none of that kind of information is shared.
“For each of those districts, it gives us numbers that we can take back to these prospects and say, ‘Hey on any given day we have 200,000 people within this district’ and those analytics. That’s what those retailers and restaurants are looking for.”
According to Farmer, such powerful data is needed if the city wants to be in the retail recruitment game. He pointed out that Mesa not only competes with neighboring municipalities but with communities throughout the country.
The data also is crucial in keeping Mesa on the top of retailers’ lists when they site store locations in the country, he said.
Farmer noted that before cell phone data became available, this sort of information was retrieved by scanning license plates in parking lots, which was time-consuming and did not provide the exact data needed.
Retailers also look at income levels, age and demand, Farmer added.
Retail Coach identified and projected the demand for the eight districts out to 2028.
“Retailers, especially quality retailers, want to locate in areas where there’s retail demand growth, where there’s more opportunity down the road there,” Farmer said. “The good news here is in each of the districts we’re showing pretty strong, positive demand growth.”
He said that the Power Road/Gateway Corridor, which boasts amenities like the Arizona Athletic Grounds and an airport, shows the strongest retail demand increase — 28% by 2028. That makes sense, given the high median household income of $114,590 and the housing growth.
“We’ve had quite a bit of interest to start with already from quality retail, restaurants, entertainment users that like that corridor and want to be out there for the future,” Farmer said. “A lot of good things are happening out there and some new, unique offerings coming along with the Cannon Beach.”
Cannon Beach is a 37-acre, mixed-used development anchored by a surf park due to open by the end of the year.
The Power Road District, however, has challenges that include a need for hotels, no clear branding and direct competition from Gilbert, according to Farmer.
And “what we found is a lot of the retailers and brokers are unaware of some of the new development opportunities that are out there,” Farmer said. “Some of these brokers we talked to say, ‘Hey, I haven’t been out to Mesa in five years.’
“So, awareness marketing is really important as part of this.”
Councilman Scott Somers, who represents southeast Mesa, recommended the consultant look at the type of development at the Phoenix-Mesa Gateway Airport “because the folks that are literally flying their personal airplanes in and staying night over night are going to bring in some money
“I’d like to capture that in Mesa and not let that escape,” he said.
Farmer also raised complaints from stakeholders.
They complained that the city’s Planning and Zoning code policy interpretation can differ from project to project, depending on the staffer was assigned to it.
They also cited a need for the city to understand retailer requirements in relation to zoning code and said there’s a lack of existing, desirable commercial centers in Mesa.
According to City Manager Chris Brady, every project that comes to the city is site-specific and “absolutely transactional.”
“When we’re having conversations at Ellsworth and Williams Field for a major resort, it’s a different conversation than what we’re talking about at Fiesta re-imagined,” Brady said.
Somers called blaming planning was somewhat unfair.
“We have development partners who have fallen far short of visions that were set by them,” he said. “I look at areas that developed in my area that had looked at the disposable income … and developers said, ‘We’re going to do beautiful things’ and it ends up being a car wash, self-storage, a freaking Denny’s.
“On one hand, we want to facilitate better development. On the other hand, we need to hold people accountable for the promises and the visions that they put forward.”
Councilwoman Alicia Goforth, who represents northeast Mesa, questioned why there are obstacles in each of the eight districts for the third largest city in Arizona and the 36th largest in the country when there are a lot of people and a lot of demand.
“It’s the type of development you have,” Farmer responded. “Focusing on more of the mixed-used type of developments are what these retailers and restaurants are looking for nowadays.
“Across the country you’ll see a focus on mixed-use development and being in close proximity to retail, restaurants, those sorts of things.
“You’ve got some mixed-used development projects happening right now and some others in the pipeline that’s going to help.”
Councilwoman Julie Spilsbury, who represents central and south-central Mesa, said that although Dana Park was included, the bulk of her District 2 was missing from the presentation.
“I get that you can’t do the whole city and you have to pick your priorities,” she said. “I really think we’re missing Main Street and Power Road north of (US) 60. It’s not getting any attention and I feel if Main Street’s not getting any attention, if we keep not giving it attention it’s just going to get worse and worse.
“These are two big thoroughfares of our city that are just completely ignored all the time and they’re becoming a problem in our city.”
Farmer assured Spilsbury that although her district was not necessarily included, the consultants have looked at some opportunities for the area.
“I don’t want you to think it’s forgotten,” he said. “We have spent some time out there and I plan to spend more time out there.”
Councilwoman Jenn Duff, who represents downtown and south of downtown, said that in order to attract retail, there must be a population density to support it.
“If you want a great shopping center, you need to think about some apartments or mixed-used multifamily — something that brings more density in a smaller area in order to support those businesses, otherwise you’re depending on weekends and events,” Duff said.
“We’ve learned this through downtown Mesa. We can bring people in, we can bring in hundreds of thousands over the weekend and stuff but the day-in and day-out that’s where the businesses struggle.”
She said that the city needs to capitalize on naturally occurring urban villages and “not having everything an isolated corner with 45 mph in between.”
“If we have to do the retail first they’re not going to come,” Duff said. “We have to set the table and you get the retail that you want and the retail that comes should reflect the demographics of that area.”
She talked about the importance of building a sense of place for the community, which Mesa is now doing.
“Retail by itself is not going to save or attract what businesses we need,” she said. “We need to look at the bigger picture of what the area looks like, how we can make it more beautiful, how we can work with the business and residents and everything and develop that together into a place to get the retail and experience that we want.”
Jaye O’Donnell, Economic Development director, said having the right partners — Planning Development Services, Economic Development and the private sector — at the table will do that.
“Economic Development is working with planning and planning has really taken the lead to push the design guidelines that are going to be coming to you later this year that are going to set the stage for that mixed-use urban development,” added Maria Laughner, deputy economic development director.
According to Farmer, that visioning and recruitment have to go side-by-side.
“You might have this really awesome urban village planned but then if you don’t have prospects or somebody to go into those villages then you’re kind of up a creek,” he said.
One of Farmer’s recommendations is that Mesa look at incentives for catalyst projects that set the stage for additional development.
“You’re a little bit hindered compared to other states with what incentives you can do but there are opportunities out there and those are some things we’re working on brainstorming to come up with,” Farmer said.
In response to Duff’s comment that she opposed incentives as “they can do more harm than good,” Farmer said he was not a huge fan of them either but that sometimes they are necessary.
“Our competing surrounding communities are highly incentivizing development,” Brady noted. “And when people are telling us about making choices, they follow the money. We in the past haven’t been a big, strong proponent of incentivizing retail.
“But what we’re finding is we can’t compete just on saying, ‘Well, just come to Mesa because we’re Mesa.’ That doesn’t work anymore. You have to employ some kind of incentive to target the right kind of development to bring it.”
Brady said if the city hadn’t given tax incentives to Berge Auto Group and to Horne Auto “those car dealerships — they’d all be in Queen Creek.”
“If we don’t incentivize, unique quality development it’s not going to choose to come to Mesa,” Brady said.
Farner also recommended the city focus on a three-year recruitment strategy that includes attending International Council of Shopping Centers events, developing and enhancing relationships with retailers, brokers and developers and marketing Mesa as a retail destination.
The council also was recommended to renew The Retail Coach as a consultant.
Other suggestions included enforcing city codes to enhance corridor beautification in certain areas and improving architectural quality design and walkability of certain areas to create a retail experience.” According to O’Donnell, in order to shift the public perceptions of Mesa, the city will need to dedicate resources around a marketing campaign.
“You have to change the consumer mindset first and it will also change developer and broker perceptions as well,” she said. “We can do the research and development and figure out what that could look like and what that would cost and come back to you.”
Mayor John Giles said that it was apparent that people in Mesa want high-end retail but the reality is the city doesn’t necessarily have the high incomes to support that.
“I just want to offer some optimism that I’m aware of several great projects that are on the cusp of happening,” he said, pointing to the new city hall that will open in a couple of weeks downtown and the zoning case for the Fiesta Mall redevelopment coming to the city for approval
“I get the frustration,” Giles said. “I see it in our council. I see it in the folks that are creating that frustration in our council but my observation is that there’s some real significant activity on all of these areas that’s just about to drop.”
