Grocery store development breaks ground

Located at 125 E. Washington Street within CityScape, the Block 23 project will include a Fry’s Food Store, 330 apartment units, 1000 parking spots and 200,000-square-feet of office and retail or restaurant space. (Emily Mudge/DD)

Phoenix officials and developers broke ground Thursday morning on Block 23, a mixed-use development that will bring a much-anticipated grocery store to the downtown area.

Located at 125 E. Washington Street within CityScape, the Block 23 project will include a Fry’s Food Store, 330 apartment units, 1,000 parking spots and 200,000-square-feet of office and retail or restaurant space.

The project is adjacent to the Talking Stick Resort Arena and is projected to be complete sometime in 2019, despite initial announcements that it would be finished by 2018.

Phoenix-based RED Development Inc. is leading the project and is managing the development of the greater CityScape shopping center.

Development of this project, which has been 12 years in the making, comes with some assistance from the city.

The development received $18.3 million in tax breaks from the city, as well as a 50-year Government Property Lease Excise Tax, or GPLET. A GPLET allows the city to take over the rights to a piece of land and lease it at a reduced property tax rate.

At the end of the 50-year deal, RED has agreed to make $15 million in lease payments to the city and purchase the property for $3 million.

“CityScape is going to be a true reflection of a 21st-century city,” Jeff Moloznik, vice president of development at RED, said.

RELATED: Local businesses prepare for Fry’s to open in 2018

Former Arizona Diamondbacks player Luis Gonzalez, as well as the team’s current CEO Derrick Hall made an appearance at the event. Several professional sports franchises in the area are working with the city to help revitalize downtown Phoenix. Diamondbacks Managing General Partner Ken Kendrick is a primary investor in the entire CityScape project, according to his official bio on the team’s website.

“This project is going to be a game changer for our city and our downtown,” Phoenix Mayor Greg Stanton said, as he stood at the podium for the ceremony.

“It really brings us to the next level of looking like the sixth-largest city in the country,” Councilman Michael Nowakowski said. “When you go to New York, Chicago and all these major cities, you see grocery stores and malls. That’s the next thing that we need to look at.”

Contact the reporter Kevin.Palaciosrodriguez@asu.edu.