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Scottsdale approves $1B-plus mixed-use residential project

The Scottsdale, Arizona, city council has approved zoning changes and a development agreement for the $1 billion-plus Optima McDowell Mountain Village mixed-use project. Developer Optima said in city council documents that it would start construction as soon as possible.

The project will encompass a total of almost 22 acres and will feature six, eight-story buildings – a mix of apartments and condominiums – around the perimeter of the property. The buildings will have 14-foot-high, glass-enclosed ground-floor levels, rooftop decks and landscaped terraces.

Optima said it will build two of the six buildings as part of the project’s first phase, according to its city council presentation.

Optima said the introduction of more than 1,300 residential units into the Scottsdale area will help ease the housing shortage in the area and help stabilize rents.

The city council approved the project’s density – 61 homes per acre – and a maximum 118-foot height in return for almost $16 million that Optima will pay into the into the Greater Airpark Special Improvement Trust Fund. The mayor and city council decide how to use money from the fund.

The project is located within the confines of the airpark, the area surrounding Scottsdale Airport general aviation facility. Airpark and city plans have identified the section of the airpark where Optima is building as one that it is suited for mixed-use and high-density residential projects.

Optima has also agreed to a special water plan through which the developer will give the city long-term storage credits it has purchased, enough to make the project net neutral for Scottsdale water demand for 10 years.

The project will also include:

  • A swimming pool and running track on top of each building’s roof deck;
  • Approximately 12 acres of open space with a multi-use path that will connect to the city’s bicycle master plan, a putting green and seating areas;
  • 36,000 square feet of “destination” commercial and retail space within the 12 acres;
  • 100% underground parking and other services to maximize usable, above-ground space;
  • An approximately 210,000-gallon rainwater harvesting system for reuse onsite.

Optima executives and architects David C. Hovey and David Hovey Jr. designed the project.

 

Read more on The Construction Broadsheet

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Optima McDowell Mountain Village to Break Ground in Scottsdale

A new development is in the works from award-winning real estate development firm, Optima, with plans to make its next community, Optima McDowell Mountain Village, a sustainable, mixed-use space in North Scottsdale. The community will break ground in late 2023. 

Optima has received the green light from the city to create the new sustainable community with a $1 billion budget. The community will be located on the southwest corner of Scottsdale Road and the Loop 101 Freeway, spanning 22 acres. Optima McDowell Mountain Village will be made up of eight concrete structures holding 1,330 luxury residences and 36,000 square feet of commercial and retail space.

“We are especially excited about the location of Optima McDowell Mountain Village being in North Scottsdale so close to the spectacular McDowell Mountains and the proximity to the Loop 101 Freeway as well as current and future major employers,” says David Hovey Jr., AIA, Optima’s President and COO, in a press release.

Rather than have two separate communities, Optima McDowell Mountain Village will feature both apartments and condominiums. The new residential neighborhood will have an environmentally friendly impact by utilizing the largest private rainwater-harvesting site in the U.S. to save water and provide the city of Scottsdale with a new water system. The community will also house state-of-the-art, health-based amenities that are also eco-friendly.

“Architecturally this project will be unique with over 75 percent open space with six buildings surrounding a central sheltered courtyard comprised of a combination of xeriscape, drip irrigation and artificial turf. This will be our most sustainable project to-date and will include the largest private rainwater-harvesting system in the United States, as well as the next evolution of our vertical landscaping system and active roof decks.”

The community will be the first project in Arizona to be built under the new International Energy Conservation Code (IECC) and International Green Construction Code (IgCC). Some highlights include utilizing solar panels, a self-containing irrigation and drainage system and an abundance of plants to provide natural shading while filtering the air and lowering the ambient temperature.

Each of the six buildings will feature a resort-style pool on the rooftop deck, spanning the Olympic pool length of 50 meters. The deck will also house a sauna, spa, cold plunge, running track, cozy fireplaces, outdoor kitchens equipped with barbecues and more. Spectacular panoramic views of the McDowell, Pinnacle Peak and Camelback Mountains can also be enjoyed.

Inside the building, future residents can anticipate enjoying well-appointed lobbies, a fitness center, a yoga studio, steam rooms, game rooms, theaters, indoor basketball courts, golf simulators, outdoor putting, kid’s playgrounds, dog parks, pet spas and more to come.

 

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‘Through-the-roof’ $1B project approved

For potential residents, this project is literally through the roof – with rooftop shade trees, running tracks, swimming pools and stunning views of the surrounding mountains.

But on the checklist of things current Scottsdale residents go through the roof in anger over, this billion-dollar project hits them all.

Desert land being developed? Check.

More apartments? Check.

More traffic? Check.

Roundabout? Check.

On May 4, the Development Review Board unanimously approved Optima McDowell Mountain Village, which plans 10- story buildings housing 1,330 luxury apartment and condo units on North Scottsdale Road.

The desert land to be developed spans from Mayo Boulevard to the Loop 101.

Scottsdale City Council narrowly approved the development in November.

The mammoth Optima project, projected to cost $1 billion to build, was opposed by council members Kathy Littlefield, Betty Janik and Solange Whitehead.

“Residents told us loud and clear to anyone who was listening in the last election that they wanted to slow down the development in Scottsdale,” Littlefield said at the November meeting.

“It seems to me all we’ve done now is try and find the ways to manage to grow more and grow higher. Higher, denser, bigger is not what our citizens voted for.”

But Mayor David Ortega and council members Tammy Caputi, Tom Durham and Linda Milhaven approved the high-end complex.

Littlefield raised concerns about water use.

“I am concerned about a couple of things with this,” Littlefield said. “We’ve been going around telling our neighbors and telling our citizens, ‘Cut back on water, cut back on water, don’t water your lawn, don’t do this, don’t do that.’”

But an Optima representative sold the Development Review Board that the development will be extremely “green.”

“This will be our most sustainable project to date,” Optima’s David Hovey Jr. promised.

“Optima McDowell Mountain Village (units) will use approximately one-quarter the amount of water of a single-family home.”

Last year, Optima transferred 2,750 acre feet of water to the city “to make the project water neutral.”

Hovey Jr. said that would provide anywhere from 11 to 32 years of demand by the new project.

Optima says it will have a 210,000 gallon rainwater harvesting storage tank – which the developer claims will be the largest private rainwater harvesting system in the United States.

Optima has a similar development at Kierland Commons.

“Other site enhancements include a new sidewalk and path system along both street frontages, a roundabout located at Mayo and North 73rd Place and a transit stop along North Scottsdale Road,” according to the plan submitted by Optima.

According to the presentation, the 20-acre development in the Greater Airport Area “has evolved as the result of 11 iterations with the mayor, city council, the city’s planning and building departments and neighborhood outreach.”

“We had over 300 letters of support and only six letters in opposition,” he stressed.

In addition to adding a bus stop, the project will have a bike path “around the entire development.”

The project’s six buildings will be built in three phases, according to Hovey Jr..

He said 25% of commercial space was added “at the request of the mayor.”

“Traffic will be on average 1% to 1.8% more daily traffic than if the project was not present,” he said.

The rooftops of the buildings are particularly stunning, featuring shade trees, running tracks – and swimming pools.

Riehl referred to a $15.6 million “height buy up that can be used at the mayor and city council’s discretion.”

According to a website marketing the project, “Consisting of approximately 970 apartments and approximately 420 luxury condos for sale is Optima McDowell Mountain Village.

“The $1 billion development features a 22-acre location … subterranean parking, an underground trash system, and approximately 36,000 square feet of world-class commercial space.”

Plans show dozens of shade trees and large, open green space, including a putting green; Optima says artificial turf will drastically reduce water use.

If they were giving out grades, the Design Review Board would give this one an A+.

“This is a fantastic project for Scottsdale,” said William Scarbrough, a board member.

“I think it’s very stunning and beautiful,” fellow board member Michal Ann Joyner added. “I think North Scottsdale’s going to be very happy to have this project.”

Ali Fakih praised the “out of the box thinking” of the project.

Even Janik, who voted against the project in November, voted for it in her role with the Development Review Board.

 

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Optima: LEEDing the Way in Sustainability and Conservation

Optima, an award-winning real estate development firm, recently announced plans to move ahead with its next Arizona residential development, Optima McDowell Mountain Village, in North Scottsdale after receiving the city’s approval for the $1-billion sustainable mixed-use community. 

Breaking ground spring/summer 2023, the 22-acre site, located on the southeast corner of Scottsdale Road and the Loop 101 Freeway, is comprised of six concrete-framed, eight-story buildings that will include 1,330 luxury residences and 36,000 square feet of commercial and retail space. The development will be a mix of condominiums and apartments.

And it premiers a couple of special features.

Rainwater Harvesting and Water Conservation

Optima McDowell Mountain Village will be the largest private rainwater harvesting site in the United States, with an approximately 210,000-gallon storm water tank in a concrete vault at the lower level of the site. The tank will recapture water to repurpose for irrigation. Based on data from two other Optima communities in Scottsdale, the residences within the community are expected to use half as much water as the average Scottsdale multifamily residence and a quarter as much water as the average Scottsdale single-family home. Optima is also providing the City of Scottsdale with 2,750 acre-feet of water that will be deposited into the Scottsdale water system.

New Green Standards

The community will be the first project in Arizona to be built under both the new International Energy Conservation Code (IECC), which provides for an additional 9% energy savings over the previous code, and International Green Construction Code (IgCC). Both codes establish guidelines to create energy-efficient and sustainable buildings.

A few highlights of the sustainable features include 75% open space that will be a combination of artificial turf, xeriscape landscaping and native plants; high-performance mechanical systems, solar panels; 100% underground parking to mitigate the heat-island effect, and Optima’s signature vertical landscape system. The underground parking reduces the heat island effect by 9 to 12 degrees. The vertical landscaping system, with its self-containing irrigation and drainage, will enable a palette of vibrantly colored plants at the edge of each floor to grow both up and over the building. The integration of enhancements to the vertical landscape and architectural shading systems protects homes from the sun and creates additional privacy, while filtering the air and lowering ambient temperature.

Designed in partnership with David Hovey Sr., FAIA, the six buildings feature undulating landscaped facades that echo the shapes of the McDowell Mountains with elevations that will create depth, shadow and texture. The outdoor terraces provided for every residence will be edged with trailing native plants cascading down the building and the colors of the desert will be incorporated throughout the community with bronze glass, railings and planters. Glass-enclosed, 15-foot-high ground-floor levels will feel utterly transparent.

Amenity Rich

Each of the six buildings will contain a variety of state-of-the-art, health-based and resort-style amenities that include a rooftop deck with a 50-meter Olympic-length swimming pool; a sauna, spa and cold plunge; a running track that will follow the perimeter of the roof; and more, along with spectacular views of the surrounding desert landscape and mountains. The ground-floor will feature spacious, well-appointed lobbies; a fitness center and yoga studio; a residents’ club with game room and theater; an outdoor pickleball arena; indoor and outdoor kids’ play spaces; a dog park and pet spa; a business center and conference room; and more.

The convenient location is just a five-minute drive to the shopping, dining and entertainment destinations of Scottsdale Quarter and Kierland Commons, while the proximity to major highways and freeways will provide residents with easy access to the surrounding Valley. In addition, the development will feature a bicycle and pedestrian path around the perimeter of the development that will connect to the bicycle and multi-use paths of the City of Scottsdale Bicycle Master Plan.

Optima McDowell Mountain Village will be Optima’s most sustainable project to-date and will utilize the kind of architectural detail that characterizes Optima’s Arizona projects, representing the next evolution of Optima’s design and construction.   

David Hovey Jr., AIA, is president and COO of Optima, Inc. and Optima-related entities. He oversees all company entities and business units, including development, architecture, construction, land acquisition, entitlements, corporate finance, sales and marketing, investor relations and asset management.

Did You Know: Optima McDowell Mountain Village will be the largest private rainwater harvesting site in the United States, with an approximately 210,000-gallon storm water tank in a concrete vault at the lower level of the site.

 

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BEX 2023 Forecast Gives Shape to a Tumultuous Year

From Founder and President Rebekah Morris down through the entire Research, Editorial and Support staff, the crew at BEX Companies proudly self-identifies as “Data Geeks”. The annual Construction Activity Forecast Event is our time to shine and show off the extreme (some might even say excessive) volume of data we’ve put together over the year and compare it to the previous year’s output and result.

For our 2023 event(s), 365 attendees registered to drink from the data firehose and soak up as much information as they could in a whirlwind two-hour presentation by Morris and DATABEX Manager Lya Parrish. For the first time, demand was so heavy the event had to be presented twice to accommodate everyone who wanted to come.

Following brief introductory remarks from Parrish explaining how data for the 11 covered markets is collected and analyzed, it was off to the races with Morris’ now-familiar overview of the state of the overall Arizona construction market, its impacts and what has changed over the last 12 months.

State of the Market

Morris started her annual summary noting the three major factors impacting construction in the state—Population GrowthEmployment, and Inflation and Interest Rates—the last of which she noted had not been a major factor until 2022.

Population growth has been a primary factor in Arizona since the end of the Great Recession, trending generally upward over the past 10 years and hovering around 1.5% annually.

That has, of course, fueled demand across the range of construction markets. Ironically, what it has not done is return construction employment to its pre-Recession levels. At its peak in 2006, Arizona construction employment was 240,300 jobs. That plummeted in the recession down to 110,900. Even with the exceptional boom in project counts and valuations, however, by 2022 construction employment had only rebounded to 186,700.

Even with a workforce that’s 22.3% below its former peak, however, 2022 construction activity totaled $22.4B, a 24% year-over-year increase and a $730M increase over the 2006 past peak.

On the inflation side, a combination of supply issues and cost increases held market growth back in 2021, Morris said. “Construction was constrained in Arizona. We couldn’t get materials, couldn’t get labor. There were, and there are still, some significant permitting delays. We did not grow the industry, but we certainly grew our Producer Price Index, that inflation number,” which hit 10%. The PPI for 2022 came down to approximately 6.7%.

Construction activity, however, grew by 24%. “I don’t have a precise answer on, ‘How much did inflation grow versus how much did the market grow?’ What we know is that we grew jobs. We’ve got specific counts by market sector. We have very specific project-level detail. We can tell the overall market grew much more than inflation.”

After going over the general numbers, Morris put the data into context across construction markets. She reported that in 2019, the cost/SF for a small office renovation was between $50 and $100. In 2022, that had risen to $150-$250. For new mid-sized apartment complexes, the cost/SF was $150-$175/SF. In 2022 the average was between $220-$275.

The researchers and the audience were fortunate enough to have an apples-to-apples comparison for high-end multifamily. In 2020, the Optima Kierland luxury apartment development was announced with a per-unit cost estimate of $632K. For the Optima McDowell Mountain Village project announced in 2022, the per-unit development cost had risen to $751K.

Nearing the end of her introductory segment, Morris talked about how, not very many years ago, the market share breakdown between Housing, Public and Private projects was generally one-third to one-third to one-third. Showing a seismic shift in demand volumes, Housing currently stands at 27.2%, Public at 20.4% and Private at a whopping 52.4%.

Capital Improvement Programs

Morris next launched into coverage of projects and trends in Capital Improvement Programs and the Public sector, which for research purposes consist of Education, Public Spaces, Utilities and Transportation.

Of the Top 10 Capital Improvement Programs analyzed this year, only two—Valley Metro and Mesa—showed decreases. Phoenix led with $9.778B, followed by the Arizona Department of Transportation at $6.752B.

Bringing up the rear at Number 10 was the Town of Queen Creek, which saw its CIP explode with a 232.1% increase to reach $972.3M.

 

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Arizona Projects 06-30-23

1. Optima, Inc. has announced construction is expected to begin on the 22-acre, $1B+, 1,330-unit Optima McDowell Mountain Village this summer. Phase I will deliver approximately 210 apartments and another 210 condominiums.

2. Martens Development and its general contracting partner Willmeng Construction broke ground on Mission Park, a two-building, 723.5KSF Class A industrial park at I-10 and Perryville Road in Buckeye.

3. Sunbelt Investment Holdings Inc., along with general contractor Graycor Construction Company Inc., have debuted design plans for and started construction on Phase I of Camelback 303, totaling 516.3KSF. The project initiates SIHI’s 4MSF industrial park in the Loop 303 Corridor in Goodyear. Phase I is designed for use by a single tenant or is divisible to three tenants.

4. DCS Contracting broke ground on the Ocotillo Road: Sossaman Road to Hawes Road for the Town of Queen Creek. This project will widen Ocotillo Road to two lanes in each direction with a center turn lane, bike lanes, sidewalks, drainage improvements, utility modifications, street lights and traffic signal installations. Improvements are anticipated to be completed by late 2024.

 

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Optima McDowell Mountain Village receives approval from Scottsdale City Council – Phoenix Business Journal

Optima will construct six buildings that will be either apartments or condominiums as part of the project that will also include commercial office space.

City documents show that Optima looks to start on construction as soon as possible after being given the green light from Scottsdale City Council. phoenix

Optima will construct six buildings that will be either apartments or condominiums as part of the project that will also include commercial office space.

Scottsdale-based Optima Inc. received approval from Scottsdale City Council this week on a development agreement and rezoning for Optima McDowell Mountain Village. The deal was approved Monday on a 4-3 vote. Optima will build six, eight-story buildings that are each 118 feet tall. Four of those buildings will be apartments and the other two are condominiums. Those buildings will include 1,330 units plus 36,000 square feet of commercial space and other amenities throughout the development.

 

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