At a recent meeting of the Town Council, Fountain Hills Economic Development Director Amanda Jacobs painted a rather modest if not concerning picture of commercial property occupancy in the Town.

Jacobs’ report was based on the third quarter of the current fiscal year (January through March of the calendar year). The vacancy rate for office space is 49.3%. Industrial properties have an 18% vacancy and retail stands at 20%.

Jacobs noted this is not a unique situation to Fountain Hills or Arizona. Since the COVID pandemic people have not returned to the office for work and they continue to eat at home with self-prepared meals, take-out or delivery.

The vacancy numbers have also been difficult to track, according to Jacobs. She said CoStar, a national company that tracks real-estate activity, has data that reflects much lower vacancy rates, 13.3% for office space in Fountain Hills. Jacobs said this is because the traditional ways of tracking used by CoStar are not reliable anymore. She said following real estate listings can be deceptive because many property managers are no longer listing their available space.

As a result, Jacobs and her staff have begun doing a localized evaluation of vacant properties, going door to door if necessary, which has resulted in much higher vacancy numbers.

Efforts to address this post-pandemic malaise are ongoing across the county, according to Jacobs.

“People have gotten used to working from home, and business is looking to get creative to bring employees back to the office,” Jacobs said.

Reducing the footprint to cut down on leased space is one effort. They are also looking at ways to make it more inviting for people to come back to the worksite. This can range from quite space for time to relax, or active space for more recreational downtime.

“We need to hear from the council whether they are willing to look at policy steps for a different (commercial property) vision,” Jacobs said. “We need input from property owners and tenants about what they might need to help address this.”

Jacobs said she is also working with more than a dozen leads for business attraction. Those include three developers, six restaurant/retail and four industrial leads.

She would not comment further on what she is working on with regard to the businesses, saying these discussions can be very sensitive.

Leads have come through the Greater Phoenix Economic Council and Arizona Commerce Authority.

Community strategy

Jacobs also reported to the council on community engagement workshops for the creation of an Economic Development Strategy document for the Town.

A public open house was held in April where staff were able to get input from about two dozen people who dropped by.

Staff wanted to know where people did most of their shopping or received other services, as well as what they would like to see come into Fountain Hills in the way of businesses or services.

They are also looking for ideas to improve downtown to attract people to the community. They were seeking ideas for “placemaking” in various locations including downtown, Fountain Park, the Civic Plaza and Four Peaks Plaza (Target). The placemaking concept would be the use of art or attractions that would draw people and allow them to enjoy the space for an extended period.

They were also asking for input on the public’s attitude toward redevelopment or revitalization of some areas in Town.

Jacobs said work on developing the strategy document will take place over the summer. She will present her report to the Strategic Planning Advisory Commission and the Town Council in the fall.