The Arizona Republic Kierland Commons, a unique shopping center in north Phoenix, is home to retail, office and residential units. The center was one of the first in the country to employ the mixed-use concept.Little more than a decade ago, the area that is now Kierland Commons was a large plot of undeveloped land. Today, it is one of the most successful shopping centers in metro Phoenix and a prototype for future projects across the country.
The northeast Phoenix development was one of the first local mixed-use projects to incorporate retail, office and residential units. On the 10th anniversary of its opening, Kierland Commons is celebrating all weekend with various events to lure shoppers. Kierland officials say it is because of its loyal customers that the shopping center has been able to weather the toughest economy since its opening.
Daniel "Buzz" Gosnell, president of custom-developer Woodbine Southwest Corp., told nearly 100 people at an anniversary kickoff event Thursday that Kierland's developers simply had a vision to bring something unique to the Valley.
"I think that it was just kind of changing times and we wanted to do something that wasn't already out there," he said. "We're not a retail developer. We're resort- and master-plan community developers. We've always been real interested in the mixed-use side."
Now, the rest of the country is interested in Kierland Commons, said Bill Whiteside, Westcor vice president of property management. He said the project is referenced in proposals for future projects.
But when developers told lenders they wanted to build an outdoor-shopping center in Arizona that included office and residential units, they weren't exactly met with open arms. Even potential tenants had doubts.
"We had a lot of convincing to do," he said. "Brokerage companies told us we were nuts."
Wells Fargo believed in Kierland's vision, but it wasn't so easy for everyone else. One of Kierland's biggest challenges was getting people to grasp the concept of something that had never been done before.
"We're not a mall," Gosnell said. "What we are is a 'main street' mixed-use development that took cues from the past and brought them up to the present."
The land that Kierland sits on was completely owned by the Herberger family. The Herbergers began purchasing land in the area bit by bit in 1952.
In 2005, Herberger Interests and Woodbine Southwest Corp. sold 49 percent of Kierland Commons to Macerich, the parent group of Westcor, which manages, markets and leases the project.
Kierland is the maiden name of Katherine K. Herberger, the namesake of the Herberger Institute for Design and the Arts at Arizona State University. Gary said his mother was honored.
"She was so delighted," Gary said. "She said, 'I wish my father was alive to see this.' "
Kierland Commons opened in phases in October 2000. Response was overwhelming from potential retailers and residents. Many tenants, including P.F. Chang's China Bistro, Anthropoligie and Z Gallerie, have been at Kierland since its beginning.
Kierland has fared better in the current economy than most, said Mickey Papillon, Kierland Commons' property manager. "The only vacancy we have, we're pushing forward with new deals," he said.
The office-vacancy rate is at 15 percent. Gosnell said that peers are at 32 percent and that all but 18 of Kierland's 84 condos have been sold.
"We have been able to be surprisingly, relatively stable," he said. "There were three sells last month that were between the mid 500,000s to $1.1 million."
Standing in the center of the project Thursday morning, Gary Herberger said he was proud of his family's decision to get involved in Kierland.
"We're so happy about how this turned out," he said. "I can't tell you that, in 1952, we ever imagined this."
Whiteside said, "This is the icon of the industry. I really appreciate our partners, Gary and Buzz. What they saw in dirt is beyond belief."
by Eugene Scott The Arizona Republic Oct. 15, 2010 12:00 AM
Kierland Commons celebrates 10 years
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