Arizona Winery

By D. Heimpel

STORMING THE MILL

One development firm is transforming downtown Tempe with a splash of wine and a whole lot of dough.

IN THE COMING YEARS, Ken Losch plans to invest more than a billion dollars in downtown Tempe, AZ. The plan is to infuse the desert with something it’s lacking: a few tons of Napa grapes and blooming urban lifestyle.

Losch, a principal in Avenue Communities, is walking to the construction of his first major development: the $600 million Centerpoint Condominiums. This gargantuan community will be the newest member of the Mill Avenue District, a small area that is currently dotted with college bars and a handful of restaurants frequented by professors and students.

But the area is changing. The 46-year-old Losch, who achieved $1 billion worth of property at 36, has set his sights on the Mill Avenue District. If his unflappable self-conviction isn’t shaken, his projects may profoundly change downtown Tempe in a few years.

Banking on the $1 trillion of inheritance that baby boomers are set to receive in the coming years and the notion that future Americans will want to buy into a living experience over just property, Losch and his partners are setting out on nothing short of a lifestyle revolution in the Mill.

Arizona State University’s proximity has helped define the district—named after the huge silos of a defunct flourmill—for years. The area’s scenic shopping also drew in tourist traffic. But as Tempe Mayor Hugh Hallman explains, an economy based on tourism and college kids, while often profitable, can be terribly risky.

“The economic slowdown starting in 2001 caused Mill Avenue to collapse,” he says. In looking for an economically viable strategy for the Mill Avenue District, Hallman recognizes “that the missing leg was residential occupancy in the area.”

And Losch has lofty goals for his residential community project. He points to the hill that dominates downtown Tempe, “A” Mountain, which got its name from the large cement “A” for ASU affixed below its summit. “That’s about 30 floors high,” he says. Behind him are 12 floors of bare concrete and exposed pipes of what will be Centerpoint Condominiums. “Centerpoint will be 30 floors also,” he adds, smiling.

He frantically describes Maslow’s hierarchy of needs, which contends that as humans meet their basic needs—food, water, sleep—they seek to satisfy higher needs like friendship and pleasure. At the top of the hierarchy is self-actualization, where a person seeks creativity and spontaneity. Enter the baby boomers, a generation poised to inherit tremendous wealth. Among them will be people who can buy a vacation home or two, who can live in the present. “What we all love is an unexpected moment,” he says, his inscrutable blue eyes darting about. Losch is after this group of people, those with the means to buy a way of life, and not just a roof. “We are selling a lifestyle, urban living and being part of a community,” he says.

This lifestyle is embodied on the Centerpoint’s 32,000-square-foot seventh floor as well as on the ground floor, which houses an unheard of amenity: a winery. The seventh floor will boast a swimming pool, an open kitchen—where gourmet chefs will prepare meals for residents—and panoramic views of the Arizona desert. Just call it a backyard superior to anything you could ever find behind a house.

Losch brims with excitement over the winery, PurVine, something he is especially proud of. “Wine lubricates the mind. Everyone wants to eat and drink with people,” he says.

Centerpoint has linked up with Napa Valley’s Signorello Vineyards to create PurVine, which will use Napa-bought-and-imported grapes.

Residents of Centerpoint and the surrounding area will be able to buy memberships, securing them up to 24 cases of wine as well as access to special dining and drinking events.

While there will be an on-site winery at Centerpoint, the main winemaking facility is in an industrial park located south of the Mill Avenue District. Its walls are lined with 12 steel 1,200-gallon tanks and hundreds of barrels of PurVine’s first batch. Winemaker John Allen Burtner is the man in charge of creating the signature series wine. The modern, sterile facility is a dream for Burtner. “As a winemaker you can’t imagine this—just getting handed a blank check and being told to go for it,” he says.

What Burtner is going for is something rare in the wine industry: a winery that uses imported grapes. While many Napa wines are an amalgam of fruit from different estates, the shipping of tons of the fruit to a place like Tempe is novel. The mastermind behind this plan is Ray Signorello, the president of Signorello Vineyards, an award-winning label with a vineyard on Napa’s famous Silverado Trail.

“We decided to take the winery to the people,” Signorello says. “Coming to Napa is a geographical issue. So we reduce cost by bringing the winery to their backyard.” Signarello sees this as one of the last frontiers of winemaking and has ambitions for many more cities. “There is not a lot of blue sky in wineries,” he adds. “This is revolutionary, and I see a ton of blue sky.”

But this will benefit many more than just the people in Tempe. A large portion of this profit-making vehicle will be donated to charity. In fact, two-thirds of PurVine’s profits will go to Avenue Communities’ philanthropic venture in the remote village of Ndola, Zambia, the Kafakumba Training Center, which teaches Zambia’s impoverished how to create economically sustainable communities.

Losch pulls one of his company’s fleet of Mini Cooper’s up to the base of “A” Mountain. He parks in front of the old flour mill, whose towering white silos will be dwarfed by the soon-tobe-developed downtown. Beyond the $600 million Centerpoint, a second similar condominium structure and a third winery will be built on the ground where he is now parked. “We’re going to totally revamp this place,” he says. He explains how the silos will even be integrated into a modern winery and wine bar.

Losch is aware that of the four million residents of the wide Phoenix Basin, 2.4 million are newbies like himself. He believes they are hungry for something he calls, “sophisticated and bohemian… SOBO for short.” And Losch is convinced there are plenty of people looking for what he and his partners are offering: a mix of luxury and modernity, lubricated with a little wine.