Title
Development Agreement with CivicGroup LLC for the Adaptive Reuse and Rehabilitation of the Security Building and Annex Building located at 222 and 234 N. Central Avenue (Ordinance S-53142) - District 7
Description
Request to authorize the City Manager, or the City Manager's designee, to enter into a development agreement and other agreements as necessary with CivicGroup LLC (Developer), or its City-approved designee, for the historic preservation and rehabilitation of the historic office building and annex building located at 222 and 234 N. Central Avenue to reuse as a full-service hotel. Further request authorization for the City Controller to disburse funds relating to this item.
Report
Summary
In early 2026, the Developer requested City assistance due to the high restoration and redevelopment cost of converting the historic Security Building and Annex Building from an office to hotel use. The Security Building is listed on the Phoenix Historic Property Register as of July 1987. The building is currently occupied by Maricopa County, which is in the process of consolidating and moving functions to other Maricopa County-controlled properties in anticipation of the sale of the property. The Developer proposes rehabilitating the 1928 Security Building and 1961 Annex Building to a 260,000 square foot (sq. ft.) full-service hotel with approximately 255 guest rooms, food and beverage concepts, a restored 5,500 sq. ft. grand ballroom, and 13,000 sq. ft. of meeting space. Developer intends to invest $135 million into the proposed project.
Developer will further maintain the historic eligibility of the Security Building and work with the City's Planning and Development Department - Historic Preservation Office to: (a) execute an easement on the roof and exterior surfaces of the buildings (the "Facades"); (b) change the historic preservation overlay status of the 1928 building to a landmark designation; and (c) expand the boundary of the historic preservation zoning overlay to include the 1961 Annex Building, also known as the Union Title Building.
Developer will construct, install, or cause to be constructed or installed to the City's reasonable satisfaction certain public improvements, such as improvements to the conditions in public right-of-way adjacent to the property, which may include enhanced lighting, physical security upgrades, improvements to vehicular access, and other physical design changes to deter crime and enhance accessibility and safety. Other public improvements may include sidewalk upgrades, enhanced landscaping, shade structures, and other improvements intended to improve the public realm.
Contract Term
The term will be for a maximum of 20 years upon issuance of the Certificate of Occupancy.
Financial Impact
The City will reimburse the Developer for cost of public improvements and the value of the Historic Preservation Facade Easement up to a maximum of $10 million. The source of the City's reimbursement to the Developer will be a maximum of 50 percent of the City's General Fund portion and 50 percent of the City's Civic Plaza (Phoenix Convention Center) Fund for the Construction Sales Tax and Transaction Privilege Tax collected, received, and verified by the City for eligible construction activity and ongoing hotel operations for a maximum of 20 years from the Certificate of Occupancy issuance.
Location
222 and 234 N. Central Avenue
Council District: 7
Department
Responsible Department
This item is submitted by Assistant City Manager Ginger Spencer and the Community and Economic Development Department.