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Photos: Michael Baxter | Baxter Imaging LLC

When Portland 38 broke ground in March 2007, developers Allan and Benjamin Gutkin already had 13 presales under their belts for the 38-unit project in downtown Phoenix. And that wasn’t unusual.

Having founded JAG Development a decade earlier, the brothers had a track ­record of wildly successful infill ventures around town, including Roosevelt Row, an arts district one block away, and Willetta 9, a boutique project that had seen some of its resale prices soar from $170,000 to $335,000 in one year.

This latest venture had an equally great location (five blocks from the Arizona State University campus) plus the added coolness of architecture inspired by Amsterdam’s Eastern Harbour District.

Then the economy tanked, and those 13 presale buyers evaporated. But the developers still believed Portland 38 had a niche to fill with its unconventional architecture. Not quite townhomes, and not quite high-rises, the three-story units were loftlike on the inside (meaning they didn’t have lots of doors, wall partitions, and closets contributing to construction costs), but they enjoyed private patios, ground-floor entries, and attached garages. And they were configured in a way that could be easily value-engineered. The only hitch was that they didn’t have conventional front doors.

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Photos: Michael Baxter | Baxter Imaging LLC

“The key to this innovation is that you enter the house through the carport,” explains Allan Gutkin, noting that each garage/carport is designed as finished space that, when the door is opened up, can alternately function as a covered porch, open-air studio, or workshop. A doorbell on the outside of each garage door announces visitors.

“That means there is no side entrance, which allowed us to get more density,” he explains. “The units are only 15 feet wide. That’s the genius or stupidity of it. Some people can’t get around the notion that [even guests] enter the house through the garage. But our buyers have tended to be more creative and open-minded.”

After recapitalizing the project through a workout deal with the construction lender, JAG emerged with a revised pricing structure and building pro forma. The fixtures and finishes aren’t quite as high-end as originally planned, but the 28 buyers who have closed and moved in since September 2009 (ranging in age from 25 to 62) have embraced the raw, nonprescriptive nature of the interiors. Inside the buildings’ minimalist shell of structural steel, masonry block, and concrete, the units offer open spaces that owners can configure in accordance with their lifestyles. The top floors of many units feature high ceilings and 11-foot-tall factory windows.

“Most of our buyers are very design-­oriented and have been intrigued to find a project that is both modern and affordable,” says Gutkin. “They like the fact that we offer a sort of blank canvas upon which they can put their own imprimatur.”

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Photos: Michael Baxter | Baxter Imaging LLC

For curb appeal, JAG did splurge on one notable big-ticket item: Each residence has a $3,000, industrial-style aluminum grate garage door that functions well and looks cool. After all, this is the front door of each residence. “The main issue facing the home­owners’ association will be determining how strict do you want to be about how people keep their garages, since you can see through these doors,” he explains. “The garages need to have modern storage systems. That’s our big issue.”

That’s a happy problem to have compared with the fate that has befallen many an urban condo venture. “We got a pretty big discount from the lender that allowed us to come out decently,” Gutkin says, noting that the revised pricing structure has nearly all remaining units priced under $200,000. “By recapitalizing the project, we’ve been able to achieve positive returns, though not what we originally expected.”

A temporary setback, perhaps, but JAG has its sights set on the bigger picture, and the economy hasn’t dampened that vision.

“We’d like Phoenix to be more urban. We feel like it’s never really gained that,” says Gutkin, who lived in San Francisco, Los Angeles, and New York before returning to his hometown, where he is now building on the street where his mom grew up.

“Even though the economy has been down the last 18 months, new bars and restaurants continue to pop up within a mile radius of this project. A lot of our buyers come from other cities, and they want an urban environment. It’s kind of fun to be starting something. We have this ground-floor feeling of being in on something that will grow.”

It’s growing slowly, he concedes, at this point. But it’s definitely showing new signs of life.

Marketing TIP: Getting That Lived-In Feeling To breathe new life into its resurrected venture, JAG Development rented out four units immediately upon build-out to have the project feel occupied and alive. That vibrancy sparked others to buy, and some of the renters have since turned into buyers.

Learn more about markets featured in this article: Phoenix, AZ.