Rental price leap has developers eyeing Surprise

Marley Park residents join Sanalina in outcry against plans nearby

By Richard Smith
Independent Newsmedia

A Hancock Builders, LLC construction crew prepares the land for the future Cottages on Greenway Tuesday, March 14, 2017 near Greenway Road and Litchfield Road in Surprise. (Jacob Stanek/Independent Newsmedia)

A combination of rapid rental rate growth, available land zoned for medium- to high-density residential use and a lack of supply have developers lining up rental property proposals in Surprise.

Surprise Community Development Director Eric Fitzer cited a report earlier this month by rentcafe.com using Yardi Matrix apartment data. That report shows monthly rent growth in Surprise during 2016 outpaced every other city in the Valley at 12.6 percent, Mesa was second at 9.1 percent.

Mr. Fitzer said four rental properties are in various stages of planning in Surprise, though only the Cottages at Greenway are approved by the City Council and are under development.
“The NexMetro concept, at the northeast corner of Reems and Waddell, and the Marley Park project have only come in for a concept review no formal submittal has been made to the city. We also had a due diligence (this is pre concept review) on another rental project at Parkview,” Mr. Fitzer stated in an email. “Besides the projects listed above we have had one other developer of rental units show interest in developing in Surprise.”

Both proposals under concept review have faced significant push back from residents of long established communities nearby.

The latest is the tentatively titled Cottages at Marley Park, which, like Cottages at Greenway, is a concept by new Gilbert-based real estate development company Christopher Todd Collections (aka Hancock Builders LLC).

On Feb. 27 the developer had a public outreach meeting led by a representative from Beus Gilbert PLLC. Robert Fitzgerald said more than 200 fellow Marley Park residents showed up.

Preliminary plans are for 174 “upscale” one-story rental units on a 14.5-acre property off Old Oak Lane in the northern half of the community. An estimated 300-plus cars would regularly come in and out of the development.

Those numbers at that location raised traffic and safety concerns among residents. Old Oak does not connect with Reems Road on the west, winding onto a retail development and feeds east into Bullard Avenue, which will be one lane in each direction until fall 2018.

Mr. Fitzgerald said Old Oak also has a couple of unmonitored crosswalks for Marley Park Elementary School. Residents raised concerns that extra traffic would cut onto existing streets like Founders Park Boulevard or back up at peak times trying to access Bullard.

“This is just not the kind of street that can handle the additional traffic,” Mr. Fitzgerald said. “The size and the scope is totally inappropriate for that area of Marley Park.”

Mr. Fitzer stated Surprise received a preliminary application for the potential Cottages at Marley Park project.

Based upon the preliminary materials, the proposal would include single story rental units, similar to single family housing, at a density of 13 units per acre, which is far less than the approved Marley Park zoning of 22 units per acre.

In the past the city has received multiple proposals on this property — a three-story apartment complex, and a Montessori school. Neither came to fruition, Mr. Fitzer stated.

The developer has committed to conducting further public outreach with the community, he said, and will schedule such meetings in the near future.

“The developer has not submitted a formal application to date. If the developer does, city staff will review the proposal against the applicable zoning and city standards. Assuming the proposal meets those standards and the approved zoning requirements, the project would be scheduled for future review and consideration by the Planning and Zoning Commission,” Mr. Fitzer stated.

The residents Mr. Fitzgerald has talked with are hoping that before this development gets far into the planning process the city takes another look at the site.

He said Marley Park and the surrounding area have changed greatly since its original planning more than a decade ago. A majority of residents at the meeting would like Surprise to do a formal environmental impact report on this property as part of consideration on whether to keep its high-density residential zoning.

“Something is going to go in there, that’s the realistic viewpoint,” Mr. Fitzgerald said.

The last month has been fairly quiet after a similar number of Sanalina residents took their concerns about the NexMetro proposal to a Jan. 17 City Council meeting and Jan. 26 community meeting.

NexMetro Communities plans to build 133 units on 11 acres at the corner of Reems and Waddell roads. Vice president Brian Rosenbaum said the majority will be detached single family homes, similar to town homes, priced to rent at $1,000 or more a month.

Sanalina residents spoke out about increased traffic volume in their development, safety concerns and the possibility of kids from these rentals using the Sanalina playground. Recently, the parcel was rezoned to allow high-density residential.

NexMetro executive vice president Jacque Petroulakis said the company is looking to set up a second meeting with nearby residents and communicate refinements to the proposal.

A Hancock Builders, LLC construction worker prepares the land for the future Cottages on Greenway Tuesday, March 14, 2017 near Greenway Road and Litchfield Road in Surprise. (Jacob Stanek/Independent Newsmedia)

While early reaction to these projects may cause changes or perhaps even stoppages, rentals are coming to Surprise.

The RENT Café article attributes the average rental increase largely to a lack of supply. Average rent in the city was $1,025 by December 2016, up $115 from the end of 2015.

Read the article here.

First up is the Cottages at Greenway, just south of Greenway Road and west of Litchfield Road. Work has begun and a ceremonial groundbreaking may be later this month.

“There were some similar concerns with renters, access to open space. But overall the developer and representatives did a good job of addressing neighbors concerns,” Mr. Fitzer stated.

A press release stated Christopher Todd Collections is the latest venture of Todd Wood, a return to real estate after he started and sold Alpine Valley Bread. Cottages at Greenway will be the first of several communities.

The goal is a concept of luxury, single-home rental communities, varying in size and number of residences offered. Each community will feature single-family homes, with a focus on privacy, services and amenities that push the envelope of a “plug and play” lifestyle.

“Todd Wood is capitalizing on a huge demographic shift and emerging trends that we are observing in the rental market,” stated Greg Vogel, chief executive officer of Land Advisors Organization in the press release. “This shift brings about many opportunity-laden aspects to the rental market in single-family homes. These days, consumers are very engaged with variety and value while closely watching their spending. This evolving economical dynamics strengthens consumer behavior that desires a single-family home lifestyle, without the hassles of home owners.”

AVERAGE RENT IN METRO PHOENIX – December 2016
Scottsdale     $1,254
Tempe            $1,175
Chandler        $1,091
Surprise         $1,025
Peoria               $957
Phoenix            $889
Mesa                $864
Glendale           $819
Source: Yardi Matrix

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