Sep 13, 2023 - News

Tempe and developers plan for Danelle Plaza development agreement by start of December

A run down commercial plaza with a parking lot running between two one story buildings.

Danelle Plaza, on the southeast corner of Southern and Mill avenues in Tempe. Photo: Jeremy Duda/Axios

After a year of negotiations, the Tempe City Council and the developers who want to revitalize Danelle Plaza intend to have an agreement ready by Dec. 1.

Driving the news: The Tempe City Council last week approved a resolution authorizing the city manager to enter into a development agreement with Guina Affiliated Developers and Desert Viking Development, which partnered with Rodney Hu, the owner of the plaza's historic Yucca Tap Room.

  • The agreement is expected to encapsulate broad plans for the multi-use project that developers hope will include affordable multifamily housing, retail, restaurants and public art.
  • It will also include proposed details of the sale of about 3.14 acres of city-owned land in the plaza.

Why it matters: While the resolution is in some respects a small step, Josh Rutherford, the city's economic development program manager who oversees the Danelle Plaza project, said it's significant because the city now has a formal agreement with developers to move forward.

  • "Having a formal agreement in place that establishes the very specific framework that we will work off of to get to a development agreement, I think that in general is a big step," he told Axios Phoenix.

Catch up quick: Danelle Plaza opened at the southwest corner of Mill and Southern avenues in 1963, and is still known today as an iconic spot for live music, largely thanks to the Yucca Tap Room.

  • But the plaza has seen better days. Portions are vacant, many of the buildings look rundown, and there's a significant amount of unused and open space, including a fenced-off plot of city-owned land with no structures on it.
  • It's also home to a lot of small businesses, cool murals and an eccentric atmosphere.
A mural depicting ocean waves below a dark and cloudy sky.
Photo: Jeremy Duda/Axios

State of play: The developers are still negotiating with a half dozen landowners who own property in the plaza.

  • The developers are trying to acquire enough land for them and the city to control the condominium association that governs the plaza, and Tempe is exploring whether there's a way to move the project forward without doing so.
  • Rutherford said they're close to having a controlling supermajority vote.

Meanwhile, the developers can't make any final decisions until they know what land they'll own. Robert Eric Guina of Guina Affiliated Developers declined to comment to Axios Phoenix, saying only that he's very optimistic and, "It's still a work in progress."

A mural depicting a woman next to an inspirational quote over a red and orange sky.
Photo: Jeremy Duda/Axios

The big picture: City leaders want the project to include affordable workforce housing and to preserve what Mayor Corey Woods called the plaza's "unique culture."

  • Woods called it an opportunity to create "a unique development that really does capture the heart and the soul of what that plaza has meant to so many in this community."
  • Council members also emphasized the importance of the Yucca Tap Room, which the mayor described as one of the few — and possibly the city's oldest live music venue (it opened in 1972) — remaining in Tempe.

What's next: If the council approves the agreement, the project will still require public input and developers may still have to go through zoning and other city processes.

  • City spokesperson Kris Baxter said she expects there'll be plenty of opportunities for public art, though it'll be up to the developers whether to preserve the plaza's murals.

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