For more than five years, the fate of a mixed-use development in downtown Mesa hung in the balance. The project formerly known as The Grid faced headwinds from the start amid the Covid-19 pandemic before stalling out for good last year.
About 15 months later, the 3.3-acre downtown project has new life after Mesa City Council unanimously authorized a ground lease agreement on June 2 with its new developer, Soltrust Main QOZB, LLC.
A U.S. bankruptcy trustee coordinated with the city and selected Soltrust, a real estate developer with office footprints in Scottsdale and Seattle, to take over after The Grid’s previous developer — The Grid at Mesa LLC — filed for Chapter 11 protection in March 2024.
Soltrust purchased the project and its assets from the trustee for $5.59 million, according to Maricopa County documents. The newly revived development, located at 233 E. Main St. along the Valley Metro Light Rail line, will be called Glo.
In addition to the $5.59 million, Soltrust has the option to buy the property for the appraised value of about $3 million, with payments due after each of three project phases conclude.
Glo is considered an important building block in the city’s continued effort to create a bustling downtown core.
“Creating that active Main Street all the way to Mesa Drive and beyond is important,” Downtown Mesa Transformation Manager Jeff McVay said. “Each of these parcels that are in the area can be the next impetus for extending that [downtown] activity … We need bodies on our streets, whether it’s residential or hospitality. From that perspective, it’s just key to our overall goals of increasing population, daytime activity and nighttime activity.”
Palladium Enterprises was the original developer tasked with turning the 3.3-acre parcel into the next downtown Mesa mixed-use development. Construction began on the $75 million, six-story endeavor in February 2020. The first phase of the project was slated to come online at the end of 2020, but development faced almost immediate headwinds with the onset the Covid-19 pandemic affecting supply chains.
Problems with the project continued to snowball as the construction pauses, missed key deadlines and failure to make infrastructure improvements plagued the development, the Business Journal previously reported. One last construction pause in January 2024 halted the development.
The city of Mesa filed a notice of default a month later.
At full buildout, the project was supposed to feature 196 apartments, 75 urban flats, 15 three-level walk-up row homes, 14,000 square feet of office space and a restaurant.
Four months after The Grid at Mesa LLC filed for Chapter 11 bankruptcy in March 2024, a U.S. Bankruptcy Court judge authorized the appointment of Keith Bierman, senior managing director of MCA Financial Group, as the trustee.
New Developer, New Agreement
Soltrust, which currently has 12 other Arizona projects in development, plans to make a few changes to the original plans. During the first phase, the “north building,” which is what went unfinished by the previous developer, will include the opportunity to add “provisions” and allow conversion for hospitality use, per city documents.
McVay said about 60% of the north building, which faces Main Street, is complete. It will have 76 studio apartments beginning on the third floor and going up to the seventh floor.
“Our agreement with Soltrust does provide flexibility to them for the use of the units above,” McVay said. “Currently, they are designed as studio apartments, but we provided the flexibility that if they have a hospitality user that they want to move forward with they could essentially use that as a hotel versus as apartments.”
On the ground floor, Crust Italian Eatery has signed a lease to occupy 6,000 square feet with an opening date for October and plans to open three concepts — a restaurant, cocktail bar and either a gelato parlor or Italian deli, McVay added.
The 13,000 square feet of office space no longer has a tenant and could be repurposed.
The developer also plans to lower the density of the apartment units by changing the “courtyard apartments” to townhomes, per Maricopa County documents. Additionally, the new agreement will remove the proposed residential units above the Pomeroy Garage and any improvements to the garage.
McVay said the future phases are open to amendment.
Other stipulations to the ground lease agreement call for explicit timelines for all three phases. Phase one, which includes the unfinished north building, need to be completed within nine months of the effective date of the ground lease, June 5.
Phases two and three will begin in subsequent 18-month periods.