ADOT's first P3 project moves forward in Flagstaff

PHOENIX —The Arizona Department of Transportation is set to relocate to new offices in Flagstaff as part of a first-ever public-private partnership designed to acquire new facilities for the agency and free up prime land for local redevelopment.

ADOT recently selected Vintage Partners, an Arizona-based development firm, as the developer that will relocate and consolidate the agency’s offices in Flagstaff. This project, also known as a P3, will enable ADOT to move into new office space in Flagstaff, including new Motor Vehicle Division offices, at no cost to the department, in exchange for ADOT’s existing property at 1801 S. Milton Road.

The project is the first to get under way through ADOT’s public-private partnerships program, which enables the department to work with the private sector to bring projects forward by using private sector funding or expertise, or alternative procurement methods.

“This project is a great example of the value that a public-private partnership can bring to ADOT and the Flagstaff community, while creating a situation that benefits everyone,” said ADOT Director John Halikowski. “It shows how we worked through the challenges. Due to a lack of transportation funding, ADOT would not have been able to accommodate the city’s need for relocation or obtain new facilities to replace its 55-year-old workplace. Now, not only is the city able to proceed with its roadway improvements, but the project also opens up prime commercial property for redevelopment.”

The P3 project was initiated due to the need identified by the city of Flagstaff to improve roadways in the immediate area. The city partnered with ADOT throughout the process, adding city-owned property adjacent to ADOT’s property on Milton Road to the deal to create an 18-acre parcel at the corner of Milton Road and the city’s planned extension of University Drive. The city will provide available funds to extend University and reconfigure Beulah Boulevard, improving access through that area of Flagstaff.

ADOT and the city of Flagstaff negotiated with Vintage Partners, which led to a decision to move into a repurposed building at 1959 S. Woodlands Village Boulevard, currently the site of the Harkins Theatre. Harkins is continuing to evaluate locations on which to build a new expanded state-of-the-art cinema in Flagstaff. Once the deal is final, the existing theatre will be repurposed to house the Motor Vehicle Division’s offices, as well as ADOT’s Flagstaff District headquarters, construction sections, and two laboratories. 

Upon successful delivery of the new facilities, Vintage Partners will take ownership of the existing ADOT and city parcels and redevelop the land for commercial, retail, and possibly residential uses. Vintage will follow the regular city zoning and approval processes.

“We are very pleased to be working with ADOT and the developer on this exciting P3 project that will provide new MVD facilities, realign University Avenue, extend Beulah Boulevard, redevelop a major property along Milton Road, and provide other development activities,” said Jim Cronk, city of Flagstaff planning director. “We are looking forward to a successful effort to bring this project to reality for the benefit of both the private and public sectors.”

It is expected to take three to five years for all portions of this P3 project to be completed, since the project involves Harkins’ move to a new location, extensive renovation of the existing Harkins building, and the construction of the roadway improvements.

This is the first public-private partnership for ADOT since being granted legislative authority in 2009. Designed to reduce costs, explore creative solutions to funding challenges facing ADOT, and work more closely with private industry, public-private partnerships are being considered for a range of projects and services the agency provides. 

For more information, visit www.azdot.gov/P3.