$300M downtown Gilbert mixed-use project gets go-ahead from city

$300M downtown Gilbert mixed-use project gets go-ahead from city

Article Originally Posted By PhoenixBusinessJournal On February 17, 2022

One of the largest pieces of land left to be developed in Gilbert’s downtown or Heritage District has received all the approvals needed for construction to start.

The project, which is being called Heritage Park, will be developed by Phoenix-based alternative investment and real estate development firm Creation. It is estimated to cost around $300 million.

The project is on about 10 acres of land on the west side of Gilbert Road south of Juniper Avenue. Currently the site is a dirt lot used for parking. The project also calls for demolishing a Burger King location on southwest corner of Gilbert and Juniper.

Heritage Park will include at least nine buildings – a 154,000 square-foot five-story office building, a 100-room hotel, a 288-unit apartment community, parking structures and 36,000 square feet of restaurant and retail space spread across five or more buildings.

The project has been in the works for several years, but the Covid-19 pandemic slowed its progress. Creation was awarded the developing responsibility for the town-owned site through an RFP process with the town of Gilbert in 2019.

Design adjustments

While most developers wouldn’t be happy with such a long delay, David Sellers, the co-founder of Creation, said the extra time will probably end up being a good thing for the project.

“I think we have a much better product now than maybe we had initially designed,” Sellers told the Business Journal. “Going through the pandemic and going through Covid – what the office, retail and restaurants tenants want now is different than pre-pandemic. We made some adjustments on the design.”

During the past few years, Creation brought on Crescent Communities, a developer and operator of mixed-use communities, and real estate investment firm FCP, to co-develop the project together.

The development team also decided to make the project the best it could be, it needed to buy a little more land. Originally, Heritage Park was just going to be built around an existing Burger King location, but Sellers said it became clear that the project would be better if his team could build there as well.

“We felt for the project’s sake that we acquire that portion of the site as well,” Sellers said. “Now, from corner to corner, we have full ownership on the whole thing.”

In April 2021, Creation purchased the 0.8 acre lot for $1.75 million, according to Maricopa County records. The Burger King is on a month-to-month lease and will be closed down when construction is ready to start.

'By far our best' project in the district

Sellers, with his other development company LGE Design Build, has been very active in the downtown Gilbert area over the past decade. He said that experience has given him a bit of an edge on what the town and future tenants want.

“Even though this is our fifth project in the Heritage District, it is by far our best,” Seller said. “The sheer size of it let us take things to the next level.”

The project will include a large outdoor area and a walking and biking trail. Sellers said those green and open space will add a lot to the property.

Because of his history in Gilbert Sellers has a very good relationship with many of the businesses owners in town and he said that by adding more office and residential space, to the area, it will benefit everyone in downtown.

“They really want office and employees down there and they really want people living down there. Then you add a hotel on top of that,” Sellers said.

Construction on the project is slated to start in the third quarter of 2022 and should be completed in 2024.

Sellers said there is already a lot of interest from possible tenants, including from hotel brands that “people would be wildly excited about.” CBRE is in charge of the office leasing and and Ox Urban is handling retail leasing for Heritage Park.

Creation is also involved in a pair of huge industrial projects in the West Valley, including a planned 5-million-square-foot industrial park in Buckeye and another large office-industrial development near Phoenix Goodyear Airport.