Contact Patricia Schwabe for availability (520) 603-6103.

A combination of private sector investment, better land use planning, and the potential of the modern streetcar has created “horrendous interest” in economic development in Tucson’s urban core.

For the first time in about 20 years, real estate deals and development projects “actually pencil out. That’s really good news,” said Ron Schwabe, CEO of Peach Properties, to about 140 attendees at the Pima County Real Estate Research Council’s fourth quarter forum Nov. 10. “The private sector has stepped up, the street car is a plus, and probably the biggest help was the city finally adopting some programs.”

Schwabe’s company first ventured downtown in the late 1980s. It has redeveloped old buildings in the Toole Avenue warehouse district, the One North Fifth apartments, and the Providence Service Block at 44 E. Broadway.

For the University of Arizona, Schwabe is developing off-campus student housing at 246 E. Broadway.

“Everybody was counting on Rio Nuevo to bring downtown back. It has been a long slog, after years of pain, Rio Nuevo has gotten out of the way,” he said.

To spark private development along the 3.9-mile streetcar route, the city has stepped up its land use planning efforts. Jim Mazzocco, planning administrator for the city, said staff has been directed to have the entire route “ready by 2013 to encourage the type of land use that supports the streetcar, the ridership, the neighborhoods and all the mixed use development.”

It is an extremely challenging balancing act because the route runs through some historic neighborhoods between the UA campus and downtown.

“There are gaps and barriers. Where do you put transit-oriented development and how do you protect historic neighborhoods all at the same time?” he said.

The planning process divides the route into different sections: the university, transition, infill and downtown core. Each has special planning needs and challenges, such as building height and density restrictions.

In the infill district, for example, the very first project faced great resistance from nearby residents in historic neighborhoods. They challenged a high-density student housing development called The District, at 550 N. Fifth Ave.

“The reaction of the West University Neighborhood Association to this project was, they were appalled,” said Mazzocco. “At public hearings, they said the infill district is a bad idea, don’t allow this. They felt the project is not compatible with their neighborhood, they don’t like the height, its looks. They don’t want the students. They could have appealed it but did not.”

Jane McCollum, general manager of the Marshall Foundation, supported the city’s land planning efforts along the streetcar route because it will provide several benefits. Those advantages include land use certainty, reduced planning and development costs, faster plan reviews and construction timelines, more responsible development, and neighborhood stabilization.

“This planning will bring certainty to both the neighborhoods and developers,” she said. “Design is very important. You can’t put a crappy project in where people live and have it be accepted. Instead of accepting crappy projects, we as developers need to hold ourselves and the neighbors to a higher standard. When you do that, you stabilize neighborhoods.”

At the western terminus of the streetcar across Interstate-10, the Gadsden Company is developing 30 acres of mixed use projects. Company partner Adam Weinstein’s perspective on the streetcar and related economic development took a totally different route.

He considers it all to be development-oriented transit.

“Transit gives the ability to get on and off in a routine manner rather than necessarily taking it from destination point A to B,” he said. “Along a streetcar line, the park-once opportunity sets up the land use opportunities. All the wonderful projects we’re seeing from Jane and Ron are setting up the network, that really is the driving force.”

Contact reporter Roger Yohem at ryohem@azbiz.com or (520) 295-4254.