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Sunday, July 22, 2018

Developer Turning Preservation into Profit

In a time when the next best “thing” in commercial real estate often gets constructed from scratch, artist-turned-developer Michael Levine prefers the contrary approach.


An advocate for preserving buildings in the warehouse district south of downtown Phoenix, Levine has bought and saved seven structures from a date with demolition since 1992. One of the buildings – the Phoenix Seed & Feed Capitol Warehouse at 411 S. 2nd St. – was built in 1905 and remains Phoenix’s oldest warehouse.


Since beginning his preservation efforts, Levine has seen a drop from more than 100 historic warehouses just 20 years ago to only 42 today. Many were lost when US Airways Center, Chase Field and their accompanying parking lots were built.


“Every large building that’s down here is sitting on top of some cool building,” he said.


Levine’s approach might seem uncommon, but his success from the start is hard to ignore. Typically, once he buys and renovates a warehouse, almost instant demand for the space follows.


Buildings that house Bentley Projects at 3rd and Grant streets and The Duce at Central Avenue and Lincoln Street are former Levine endeavors. Also, his 42,000-square-foot Levine Machine warehouse at 605 E. Grant St., which for decades housed Karlson Machine Works, is now home to several creative businesses.


“Every time I renovate a building, someone will move into it,” Levine said. “It’s real simple – there’s nothing exciting about my business plan. I take an old building, renovate it faithfully, authentically and architecturally correct – and not cheaply – and someone will appreciate and understand it.”


Levine wonders why other developers haven’t followed his lead in Phoenix. He points to similar successes in locations such as Brooklyn’s DUMBO neighborhood in the mid ‘90s; Austin, Texas; San Jose, Calif.; Roanoke, Va.; Charleston, S.C.; Cleveland; Detroit; and “almost every city with a depressed downtown.”


He admits, though, Phoenix has a disadvantage.


“The thing about Phoenix is it never had that much stock,” he said. “It only had a few hundred warehouses to begin with because it was never a major city. The stuff that got demolished was for the wrong reasons – it was cheap land.”


Levine recently attracted attention when he opposed Phoenix Suns owner Robert Sarver’s plans to demolish two historic hotels for more parking just west of US Airways Center. His efforts, in part, helped save the St. James Hotel, but the Madison Hotel building was lost.


In addition to the warehouse district, another place where Levine sees potential is South Phoenix.


“(South) Central Avenue is an amazing opportunity,” he stressed. “All the way from Lincoln to past Broadway, through the whole corridor and into Laveen and even Buckeye could be brought up.”


Besides the existing buildings, an advantage Levine sees is walkability and easy access to transportation. He foresees people starting as far north as the Sunnyslope neighborhood and using bridal paths and light rail to access restaurants and entertainment options all the way to South Mountain.


The key, Levine believes, are procedures to encourage historic preservation, such as financial incentives and an easy permit process.


“Those buildings restored – like the Ed Pastor building (Transit Center) – think about how spectacular that would be,” he said. “You’d have South Mountain sports and activities, and then you’d have this full corridor that would bring a lot of job creation.”


Levine added that restoration would also bring greater connectivity, which could spur more infill development Valleywide.


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