BIG SPLASH

Glendale a major player in art of experiential retailing

Crystal Lagoons Island Resort to open in 2022

Posted 9/15/20

Glendale is making a big addition to its entertainment game, and will do so in just two years.

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BIG SPLASH

Glendale a major player in art of experiential retailing

Crystal Lagoons Island Resort to open in 2022

Posted

Glendale is making a big addition to its entertainment game, and will do so in just two years.

The city on Sept. 8 green-lit a development agreement with Crystal Lagoons Island Resort to bring to a 50-acre site at the intersection of 95th Avenue and Cardinals Way, adjacent to State Farm Stadium in its Westgate Sports and Entertainment District, a seven-island resort.

An 11-acre lagoon surrounded by themed islands, shopping, enough hotel rooms to more than double the occupancy the site had when the city last hosted a Super Bowl in 2015 as it will in 2023, and even a suspended bar that will allow thirsty adventurers to take it all in with their feet dangling from 135 feet in the air -- and that’s just the beginning.

More details will follow in October, when the next announcement brings added information about the property’s anchor resort and its companion family entertainment center. It will, says Glendale city manager Kevin Phelps, have the backing of yet-to-be-announced major corporations on a concept “that has never been done before in the United States.”

The Crystal Lagoons Island Resort is expected to bring an estimated $700.8 million in new sales, property and bed tax revenues to the city, county and state over the next 25 years, according to the city. Glendale’s portion of the revenues are estimated at $240.5 million, and the project will bring an estimated 1,800 net new jobs to the city.

“Crystal Lagoons ... is excited to bring the first branded Crystal Lagoons, Island Resort entertainment destination to Glendale,” Crystal Lagoons vice president Eric Cherasia stated in a news release. “As you will see in our announcements over the next few months, we have teamed with some of the world’s top attraction, entertainment, and hospitality brands to create the next wave in entertainment destinations.”

It will all be built in a single-phase development and is expected to open by October 2022, which will be four months before Glendale hosts Super Bowl LVII right across the street.

It’s the next generation of experiential retailing.

“Experiential retailing requires a blending of art and science,” Retail Info Systems, an industry resource offering insights into business and technology trends, reports.

SHEER SIZE

“It’s all built around experiential retailing,” Mr. Phelps said of the Crystal Lagoons Island Resort vision for Glendale business Sept. 10.

Other Crystal Lagoons properties, from Dubai to Japan to Brazil and South Korea, showcase crystalline lagoons surrounded by white sand beaches to create a beach paradise for visitors, who can access the water innovation via ticketed entry.

A boardwalk will surround the lagoon, and offer pathways to seven “islands,” each with a different architectural style. The Glendale resort will feature themes ranging from Caribbean to Cape Cod to Tahitian, and each will feature its own unique retail, office space or hotel space, and a series of amusement rides.

Also among the planned attractions are a Fly Theater -- similar to California Adventure’s “Soaring Over California” ride -- and a 4-D theater, which will blend sight, sound and movement with other sensory components such as the ability to smell or feel moisture during a presentation.

A helium balloon will on site to take guests 400 feet into the air. And one restaurant on one of the islands will feature Aerophile’s Aerobar, which is a bar that ascends 135 feet in the air as patrons are strapped into a chair with no floor, while a bartender works in a “cup” of sorts to serve drinks.

And similar to Disneyland’s famed nightly fireworks display, the Crystal Lagoons Island Resort will boast a nightly laser light show, in which an elaborate, mapped display will be projected onto the hotel buildings. The show will also feature 3D holograms projected coming off the lagoon water.

“It brings a new level of adventure, recreation and entertainment that complements our vision for the Westgate area,” Yucca District Councilmember Joyce Clark stated in a news release.

The project will also more than double the hotel rooms by the time the Super Bowl arrives in February 2023 than the city had the last time State Farm Stadium hosted a Super Bowl in 2015.

That year, Glendale had 1,154 hotel rooms. Over the past five years -- with the addition of aLoft, Holiday Inn, Marriott Townplace Suites and Tru -- Glendale will be at 1,574. And the addition of the three hotels in the Crystal Lagoons Island Resort project, and another one in the pipeline, will bring Glendale to 2,341 rooms, according to the economic development office’s communications program manager Lori German.

She adds that this number does not include the proposed hotel towers for the Desert Diamond West Valley Casino as it isn’t formally in Glendale. But once built, it could be considered part of Glendale’s available room count for mega events, which constitute an attendance of 40,000 or more people, such as conventions or headlining concerts.

“Our goal here is to build the best entertainment district in the Southwest United States,” said Mr. Phelps, adding that the new occupancy will be key for attracting future Final Fours or Super Bowls back to Glendale.

At this time no official price tag for the project has been made public, but the city shared that the cost will be “in the hundreds of millions of dollars.”

THE DETAILS

So how did Glendale and Crystal Lagoons Island Resort get here?

The city provided economic incentives to land the project.

Glendale is waving up to $1 million in permit fees and inspection fees, similar to deals for the White Claw distribution center finalized in May and the Red Bull manufacturing facility in March, Mr. Phelps explained.

Crystal Lagoons will still have to pay all its development impact fees (which contribute to the likes of city road improvements, parks, libraries, public safety, etc.).

“This development will still pay the City of Glendale approximately $4.4 million in development impact fees,” Mr. Phelps said.

Applied Economics, a financial advisory firm, provided a detailed analysis of the project’s impact. Through tax revenue, the city of Glendale’s share will be about $240 million, or an average of $9.6 million per year for 25 years, which will offset the $1 million in waived fees, and will go into the city’s General Fund to support police, fire, parks, and the like.

“It’s a significant game-changer for us,” Mr. Phelps said. “That ($10 million per year) would be equivalent of recruiting and site-ing anywhere from eight to 12 new car dealerships in your city.”

The city also has agreed to establish a Government Property Lease Excise Tax  (GPLET), which is a tool where the developer sells the land to the city for $10, and since the city owns the underlying ground, the developer won’t have to pay certain excise taxes for a fixed amount of time (up to 10 years). After that time, the developer will buy back the development from the city for the $10, and then goes on the tax books as a regular property tax item.

There’s also an agreement relating to parking spaces on site. Crystal Lagoons will use some of the spots directly to the east of State Farm Stadium, in what is known as “the black lot,” which is part of 4,000 spaces that the city of Glendale has committed to provide to the Arizona Cardinals and to the Arizona Sports & Tourism Authority (AZSTA), which owns the stadium. The stadium gets exclusive use of those 4,000 spaces during any NFL game event and during any qualifying mega event,” like concerts by The Rolling Stones or Garth Brooks, for example.

The agreement allows the Lagoons to use 2,600 of the 4,000 spaces all year round, except for Cardinals game days and mega events.

A deal to be reached on Sept. 22 will also allow the Lagoon to use the “orange lot” (directly north of the site) for overflow parking for up to two years.

THIS SPOT’S HISTORY

Crystal Lagoons will occupy a site in the Sports and Entertainment District that has been a development target for years.

USA Basketball in 2008 had decided to move its headquarters for operation from Colorado Springs, Colorado, to that site. Although the high-profile USA Basketball employs just 13 people, it was estimated that a new Glendale complex would have created 324 direct, if temporary, jobs and $26.5 million in tax revenue over 25 years, according to the Colorado Springs Business Journal.

The organization, headquartered in Colorado Springs for more than 30 years, was seeking more training space, something the Glendale proposal offered, including a new facility. Developers were reportedly unable to finance the deal, however.

Ikea in 2018 had planned a second Arizona store in that location with a targeted opening of 2020, but canceled those plans -- after most permits had been issued -- when its international headquarters had a change in leadership and put a stop to US development, Mr. Phelps said.

The site was then back on the market.

“There is so much in the way of available land for redevelopment there, and we really think the Lagoon project is going to be somewhat center to that,” he said, adding that there is land south of the planned Lagoon under contract for redevelopment.

DEFINE ‘ENTERTAINMENT’

Glendale has been deliberate when considering pitches for this site, including Crystal Lagoons.

“We thought it was value-added to the other investments that we have in the area,” Mr. Phelps said.

He added that the Westgate shopping center is “critical to the city” and is “the heart” of an entertainment center that includes 41 NHL games at Gila River Arena, home to the Arizona Coyotes, plus 10 or so NFL games when the Arizona Cardinals are home at State Farm Stadium, as well as more than a dozen concerts per year.

“Whatever you develop in and around this entertainment district seems to add to the fact that it is a sports and entertainment district,” he said of how Crystal Lagoons fits into that equation. “We don’t want to put an Amazon distribution center next to the entertainment center. It adds no value back to building that brand up.”

Each development is destination-connected, including nearby Top Golf, which opened on the other side of I-10 in 2018.

“Could we have put a ‘for sale’ sign on (the land) and gotten a distribution center? Or, gotten an apartment complex? Absolutely,” Mr. Phelps said. “But Top Golf -- bringing in 600,000 golfers a year -- fits in well with an entertainment district. So it adds value back to there.”

Crystal Lagoons expects to break ground by December. Construction trailers are currently being permitted.

“You’re going to see everything dynamically change within that district,” Mr. Phelps explained. “It won’t be hyperbole when we say it will be the largest entertainment district in the state of Arizona and the southwest United States.”

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