Flagstaff Real Estate - News, Market Reports and Humor

Flagstaff will have Two Walmarts, One Supercenter

Reprinted from the Arizona Daily Sun.  Author -Joe Ferguson - December19, 2008

Green light for supercenter

By JOE FERGUSON
Sun Staff Reporter
Friday, December 19, 2008

It's official: A Wal-Mart Supercenter is coming to east Flagstaff in 2010.

It just won't be the massive big box that city voters debated back in 2005. But it will sell groceries in addition to discount retail goods under the same roof.

The city's development review board approved plans on Thursday for a 114,018 square-foot Wal-Mart on Huntington Drive next to the Outback Steakhouse.

The approved plans are vastly different than the two-story, 212,000-square-foot Supercenter the nation's largest retailer had sought more than two years ago -- plus a parking garage.

But after several revisions, the approved plan calls for a one-story store only 9,000 square feet larger than the current Wal-Mart in west Flagstaff.

The new plans also outline a traditional parking lot rather than the original two-story garage on the 15.6-acre site.

A representative for Wal-Mart, Delia Garcia, said the store would include a fully-stocked supermarket, unlike the Wal-Mart in west Flagstaff, which primarily sells retail goods.

"It is still a supercenter concept, it is just not a 200,000-square-foot store people usually associate with supercenters," Garcia said. "We have 100,000-square-foot supercenters."

The city and the retailer are still at odds over 12 conditions that the city has proposed to address the thousands of extra vehicle trips a day at nearby intersections and two-lane roads the new store is expected to generate.

One of the conditions set by the city is a $750,000 payment to the city for extra lanes on the Fourth Street bridges over Interstate 40. The payment represents 15 percent of the estimated cost of $5 million.

Both sides said they are confident an agreement can be reached on the traffic conditions outlined in the eight-page report.

Conditions as part of the DRB approval process are common in Flagstaff. The Juniper Point mixed-use project reportedly had 1,000 conditions as part of its DRB approval.

Wal-Mart is expected to keep its "green" features for the store, including skylights, the use of local building materials and energy-efficient systems.

The store, when open in 2010, is expected to employ between 250 and 300 people, Garcia said.

Because the project complies with the underlying zoning, it does not need the approval of the city's planning and zoning commission or the city council.

Joe Ferguson can be reached at 556-2253 or jferguson@azdailysun.com.

Chronology of Flagstaff's second Wal-Mart

-- July 2006: Initial application for 212,000 square-foot Supercenter

-- Sept. 2006: 212,000 square feet, but with new, environmentally friendly features

-- July 2007: 178,000 square feet

-- June 2008: 114,000 square feet

--December 2008: Final DRB approval

Flagstaff will have Two Beaver Street Breweries

Reprinted From the Arizona Daily Sun.  Author - Joe Ferguson.  December 16, 2008

Brewery ready to expand

Beaver Street Brewery is set to build a second restaurant and microbrewery at an old lumberyard just south of the tracks in downtown Flagstaff.

By JOE FERGUSON
Sun Staff Reporter
Tuesday, December 16, 2008

The owners of Beaver Street Brewery in Flagstaff have plans to convert a vacant lumber warehouse just south of the tracks into a second downtown restaurant and microbrewery.

The plans hinge on approval of the Flagstaff City Council, which is being asked to consider a complicated 50-year lease of the city-owned land that would start at just a dollar a year. In exchange, the owners of Beaver Street could pour as much as $2 million worth of improvements into the historic J.D. Halstead Lumber Company building at South San Francisco and Phoenix.

The existing restaurant does roughly $4 million of business each year, according to a city staff report.

The new location would allow Beaver Street to begin bottling its beer for local, and eventually, statewide distribution. It would also create 70 new jobs that average $12 an hour.

Evan Hanseth of Beaver Street Brewery said he has reached production capacity at his current 9,000 square-foot location on Beaver Street.

"The brewery there has been pretty maxed out this summer and we don't have any room for expansion," Hanseth said. "One of the reasons we are going to do this is to be able to make more beer and supply the existing restaurant."

An increase in volume would help Hanseth deliver cans of Railhead Red and other award-winning, seasonal beers he produces to local grocery and liquor stores.

Beaver Street only distributes its beer now in 64-ounce glass bottles known as growlers and sells it only at the restaurant.

"Initially, it would be locally and then statewide eventually," Hanseth said.

CANS, NOT BOTTLES

He said plans currently call for distributing in cans rather than glass bottles.

"The trend in the industry is using cans, it is more environmentally friendly," he said.

Fans of the existing Beaver Street location have nothing to fear, Hanseth said, because the new plans will not affect current operations.

"We are not going to close the restaurant we have, this is going to be a whole new venue. " Hanseth said. "It will be a whole different cuisine ... we will cater to the college crowd. In some respects, we are going to compete with ourselves."

If approved by the council, Hanseth said the new restaurant would open sometime after the new brewery is up and running, projected for December 2009.

The lease would require the brewery, the sole bidder on the city contract, to preserve existing historic buildings.

Community Investment Director Michael Kerski said he has seen plans that call for Beaver Street to spend an estimated $2 million to remodel the existing buildings.

TIERED RENTAL CONTRACT

The draft agreement with the city, if approved, would have a tiered rental contract, with Beaver Street paying $1 a year until the new brewery opens.

The rent would increase to $1,500 a month until the city closes off the adjacent parking lot to make improvements to the Rio de Flag flood control project.

As the city demolishes the parking lot to build an underground culvert, Beaver Street would not have to pay any rent. When the project is finished, the city would rebuild the 40-space parking lot and charge Beaver Street $3,000 a month, with annual two percent increases.

The lease is for 50 years, with two optional 10-year extensions. The property will then revert to city at the end of the lease.

SOME WANT PARKING GARAGE

Some downtown business owners see the old lumber warehouse as the perfect spot to build a downtown parking garage. The city already the owns the land, removing the prospect of expensive land acquisition near downtown Flagstaff.

But the city's historic preservation officer, Karl Eberhard, said the city could jeopardize countless federal grants if it tore down a historic building it had vowed to protect.

The oldest lumberyard building on the site dates back to the 1890s and is the last remaining building from Flagstaff's lumber era.

As an example, Eberhard said the city is hoping to receive millions from the federal government for the Rio de Flag flood control project on the condition that the historic warehouse and several other Southside buildings be preserved. The Army Corps of Engineers has already allocated $18.6 million to the flood control project.

Hanseth said in a letter to the city that he would work with the state Historic Preservation office and other regulatory agencies to keep the building and site on the historical register.

Joe Ferguson can be reached at 556-2253 or jferguson@azdailysun.com.

By the numbers:

Beaver Streeet Brewery

90-100 Current employees

70 Additional employees at second site

$4 million Curent sales

$2 million Reported cost of renovations to the lumberyard

9,000 Size in square feet of current property

8,500 Size in square feet of second property