Mesa serves up $100K to hook better eateries

May 8—For a long time, Mesa officials have followed the mantra "we don't chase retail."

The theory was the city should focus on bringing high-quality jobs to the city, and the quality retail, dining and nightlife would follow to chase the resulting households with disposable income.

But some Mesa residents and council members think high quality shops and restaurants are lagging behind the residential and industrial development in some neighborhoods.

There's plenty of demand and disposable income in those areas, but the restaurants especially haven't materialized.

That is resulting in "leakage" of sales tax revenue as residents travel to neighboring Gilbert, Tempe and other municipalities to eat and shop, District 6 Councilman Scott Somers argued in a recent study session.

Following a nudge by Somers, Mesa is deviating from its mantra and will get more proactive about luring premium restaurants and retail in the next fiscal year beginning July 1.

City Manager Chris Brady said last week that he is adding $100,000 to the 2023-24 budget to hire consultants who can help the city attract the types of retail and dining people crave.

Brady reported that the city has had conversations with Steve Chucri, president of the Arizona Restaurant Association and a former county supervisor, about what types of studies would help attract sit-down restaurants.

Chucri also has many industry connections and considerbale experience matching restaurant concepts with specific locations.

He told the Tribune he helped recruit some of the restaurants that have moved into Epicenter at Gilbert's Agritopia, which developers say they want to turn into a regional high-end retail and dining destination.

Somers said he is pleased with the level of funding the city is putting toward the effort to bring in high quality hospitality and retail.

And he's excited the city is talking with Chucri.

"Steve has the connections" to recruit quality dining to Mesa, Somers said.

"Being a Mesa native, he's enthusiastic to help support us," Brady added.

Somers was backed by Councilwoman Alicia Goforth in his push to turn around Mesa's strategy and chase retail.

Goforth argued that in today's economy, high-quality retail and restaurants are an essential part of economic development.

"The economy of jobs following labor is changing to jobs following talent, and talent wants to live in placemaking areas," Goforth said, adding that Mesa needs quality retail and hospitality "because we have to attract talent."

In actively pursuing retail and dining, Mesa might have to choose between using the carrot or the stick.

Frustrated with the volume of new drive-thru eateries planned for commercial developments, officials in the past year have been flirting with the stick.

They have taken steps toward new zoning rules that reduce drive-thru clustering and increasing neighborhood notification before new eateries are approved.

The Arizona Restaurant Association opposes Mesa's proposed rules on drive-thru development, and Chucri said he does not believe these would encourage fine dining to move in.

He said instead reducing costs and red tape for new eateries would make it easier for high-end restaurant concepts to expand in Mesa.

"The infrastructure required and the capital required to build a restaurant right now is incredibly expensive," he said.

"Time is money," he said, and so restaurants are wary of an "overly regulatory environment."

Design requirements, mandates and bureaucratic approval delays discourage restaurants and retail from moving in, he argued.

"I think you can still attract good restaurants without having to be regulatory with drive-thru restaurants and where they go," he said.

Somers was sympathetic with the idea that rules wouldn't force the industry to bring higher quality products to Mesa.

He pointed to successful commercial developments like Gilbert's Heritage District.

Gilbert "didn't regulate their way" to that area's success, he said.

Chucri said that Mesa has "enormous potential," and in the current economy, restaurant concepts are looking to expand if they can find a good site.

"Given our population growth and how many people are moving here, it's really helped our industry grow," he said.

One reason some parts of Mesa haven't attracted destination retail and dining, he said, may be that they just haven't gotten the first spark yet to ignite a larger wave of new dining.

Like Somers, he cited Gilbert's Heritage District. He pointed out the building where the popular Postinos East is located.

The building was a former jewelry store that had hosted five failed restaurants over six years in the early part of this century.

After the building was subdivided and Postinos moved in, it was successful, and that attracted more restaurants to move in.

"Success brings about more success," Somers said, adding he has witnessed one successful establishment lead to a much larger transformation of a neighborhood.