Danelle Plaza was first built in 1963, when it was billed as “the heart of Tempe’s new downtown” by its original developer. It was even the location of City Hall for a period of time around 1970.

Hopes for the property outdistanced reality.

Today, the 14-acre site at Mill and Southern avenues is known as a dilapidated hotbed for crime. The causes of its decline: historic decisions about how Tempe is organized, massive shifts in consumer behavior and the choice to break the property into 52 lots that were purchased by owners who often couldn’t agree.

Developers failed to breathe new life into the plaza despite decades of attempts. Today, most of the lots are either empty or occupied by vacant storefronts. Unhoused individuals are among the plaza’s most frequent visitors.

But a car wash and a potential redevelopment partnership are creating hope for renewal after almost 40 years of decline.

Local developer Eric Guina, a company called Desert Viking and the city now own enough lots to redevelop the site without any other property owners being able to block their plans. That marks the first time anyone had enough clout to proceed.

Both private developers have a history of working on sites like Danelle Plaza.

Guina Affiliated Developers has tackled projects on run-down or otherwise undesirable Valley properties, including a failed Section 8 facility in Phoenix that Guina’s company turned into the Atwater Apartment complex. And Desert Viking, owned by Niels Kreipke, specializes in revamping historic properties like the Gold Spot Marketing Center.

Former Tempe Mayor Hugh Hallman, who is Guina’s development attorney, sees reason to be optimistic about Danelle Plaza. But there’s still a long road ahead.

“Nothing ever worked there,” Hallman said. “It’s been blighting my community for decades.”

Car wash could be first step toward new development

Some redevelopment has already begun. Guina revamped a business he names Bobby E’s Car Wash by installing lights and art, as well as putting in “thousands of my personal hours” to overhaul the decades-old facility.

He said the increased traffic is helping to curb disorder in the plaza and set the stage for the broader revamp. The area has seen nearly five times more traffic since the car wash reopened in 2020, according to Guina.

“The reason I spent the time here is to use the car wash as a vehicle to first stabilize (the area) in order to allow … a development to come out of the ground,” he said. “It is the catalyst for the whole development. It’s a launchpad.”

As one of the only functioning businesses at the site, any wider benefits of the car wash are limited. Guina said he needs the rest of the plaza to redevelop if it’s going to stay open. And that’s far from a sure thing.

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The developers don’t yet have a design plan, which they need before they can secure the city’s 46% share of the plaza. Tempe started buying those lots in the late 1990s, then purchased more in the early 2010s.

But other owners held out, expecting a big payday if they sat on their holdings, Hallman explained. That prevented anyone from brokering a deal for years.

Around 2020, Guina and Desert Viking found a workable way to buy up some of the holdout lots — but it’s still not enough to overhaul Danelle Plaza without the city’s selling its property to the developers.

That’s riding on a process that will take years.

“This needs to get traction within the next three years,” Guina said. “There is this potential energy. It doesn’t do any good until you push it off and get kinetic energy.”

A fraught past: Why has Danelle Plaza failed over and over again?

Danelle Plaza came about after the city’s population had grown from about 7,700 people to nearly 25,000 between 1950 and 1960. The character of downtown was shifting.

With Arizona State University just blocks away, it had become a hub for youth immersed in the 1960s counterculture, according to Tempe historian Zachary Lechner. The small-town atmosphere faded, as crime and other big-city problems began to crop up.

Hallman said former Mayor Harry Mitchell described downtown as “filled with biker bars” during the 1960s.

Established residents began moving farther south. Economic investment followed and local leaders started discussing whether to create a new downtown in southern Tempe.

Danelle Plaza’s founder jumped on that opportunity. He bought 14 acres on Southern Avenue, which was then Tempe’s southern border, expecting to make it a new urban core.

“Downtown by the mid-1960s had collapsed, so he believed that he could attract retailers and create a restaurant-retail scene on the southern outskirts,” Hallman said.

The plaza did well that decade. Some lots were developed and by 1969, it had become the temporary seat of city government as officials debated where to build Tempe’s permanent City Hall.

Elmer Bradley, the mayor at the time, supported moving City Hall to that area. But he lost to former Mayor Dale Shumway in 1970 and Tempe ultimately reinvested in the existing downtown, building today’s “upside-down pyramid” City Hall in 1971.

That was the first big blow to the plaza.

“That decision took (the developer’s) dream and undermined it, because … nobody thought it wise to move to the southern edge of the city for your place of business,” said Hallman, who said the site was “a complete disaster” by the early 1970s.

But there was still some life there as small businesses moved in, including Walt’s TV and Appliance, the car wash that eventually became Guina’s, and Yucca Tap Room.

Yucca Tap Room is still around today. It became well-known as a popular hangout for young people and hub for live music in Tempe shortly after it opened in 1971. Mayor Corey Woods called it Tempe’s “oldest live music venue.”

Looking ahead: Tempe approves deal to revamp Danelle Plaza, a site that has gone underused for decades

But while the tap room survived, many of the plaza’s other businesses died out as the economy transformed in the late 1970s. Hallman explained that “as the big box stuff started to happen, the mom-and-pop” shops failed.

The casualties included everything from a hardware shop called Angel’s, that was crushed by chains like Lowe’s, to a Middle Eastern restaurant called Byblos. By the mid-1980s, most of the lots were vacant.

But another developer thought he could change things in the mid-1990s. He started buying lots but fell short because so few owners agreed to sell, making it impossible to create anything other than a patchwork of new buildings in an otherwise derelict site.

That issue haunted Danelle Plaza for the next 25 years.

Today, 54% of its lots are empty and many of the others are not in use. The plaza generates scores of homelessness-related calls and has been the source of nearly 4,000 emergency calls since 2014.

The present: Progress and renewed potential for Danelle Plaza

Guina wants to break the losing streak. He started buying lots around 2020 with the goal of overhauling the entire site, as well as building affordable housing. Today he owns nine lots, or 17% of the plaza.

Bobby E’s Car Wash was his second parcel. He put years into giving the self-service car wash a makeover, which included hiring an artist to paint murals on the walls and installing new lights in the otherwise unlit plaza.

“(It) was failing, full of crime and drugs … No one felt safe. I basically decided the community was going to start at the car wash,” he said.

While a car wash isn’t often the type of business that facilitates community building, Guina said traffic on the site has surged by 450% and that the business has deterred homeless activity.

Limited city data show a nearly 40% drop in calls to the plaza for Tempe’s homeless outreach team between 2022 and 2023.

Tempe’s Homeless Solutions manager Jessica Wright said increased visibility could be a factor. She pointed to the uptick in plaza traffic and Guina’s team constantly being there to report issues.

“The population that we serve seeks to survive on the streets by not being seen,” she said. “(Homeless individuals) who don’t want to take advantage of the shelter spaces that we have at the moment, often … find somewhere else to be, because we’re going to keep going out there as people call us.”

Guina said the effort to revitalize the business and start some cleanup at the plaza has required “100% dedication (over) the last three years.” He wants to use the car wash’s success as a “launchpad” for the sitewide project.

Tempe invited that larger revamp in 2022 when it asked for proposals. The offer: The city would sell its 24 lots to any developer who was qualified to fix the site and had the means to make it happen.

Guina and Desert Viking were the obvious candidates as the two largest private owners of plaza lots, with a combined 41% ownership of the site.

Kreipke, who founded Desert Viking in 1997, said he’s “always been interested in that intersection.” He added that “I love the history of properties” and the plaza’s “overall location within the Valley.”

The future: Details are scarce, ultimate outcome far from certain

Just how feasible the plan will be is yet to play out.

City officials approved a tentative deal with the developers in January. It marked the first time a group with enough ownership for a viable project teamed up — the most promising step for the plaza since the 1960s. Together, the three parties own roughly 87% of Danelle Plaza.

City Councilmember Joel Navarro said “it’s been difficult for many a year to try to get to this point, so it’s a plus (that we are) where we’re at today,” when Tempe gave its preliminary approval to the deal.

There are some city guidelines for a redeveloped Danelle Plaza. They include some affordable housing, preserving Yucca Tap Room and spaces for live music.

But there isn’t an actual plan in place to flesh out all of the details. Before that can happen, Guina and Desert Viking must negotiate with the owners of the seven lots they don’t control.

The approval of the holdouts isn’t necessary, but it could impact design options because the project would have to build around their property if they aren’t amenable.

And there will be more hurdles.

The developers have to budget, plan, sell their idea to Tempe officials, and negotiate things like tax breaks and community benefits with the city. Hallman said that will likely take at least two years, although it could go longer, maybe too long for Guina’s three-year window.

There may also be unforeseen costs.

A city-commissioned study from 2018 found about a dozen toxic chemicals in the plaza’s soil. They weren’t detected at dangerous levels, but the report suggests developers might have to take extra safety steps to mitigate the issue.

Political opposition looms, as well. The project is already in the crosshairs of a development-skeptical group called Tempe 1st, which said it will push back if the deal is overly generous to the developers or not in-line with public interest.

“We cannot afford to stand by and let these oft-repeated (and high-density-focused) development tactics that destroyed downtown Tempe consume Danelle Plaza,” Tempe 1st wrote in an article on its website.

There’s also the challenge of finding consensus on design and financial details between both developers and the city. Tempe’s economic development Director Mike DiDomenic said “there really isn’t anything” solid on that front before city officials greenlit the tentative deal earlier this year.

About the future prospects, Kreipke said “there’s nothing certain about any project given the various ownerships … But we will certainly work hard and diligently on making it come to fruition.”

Guina remains optimistic.

“My commitment to affordable housing and Danelle Plaza remains as strong as day one,” he said. “We have a clear path towards the development and control of the plaza. It will be a transformative project.”

Reporter Sam Kmack covers Tempe, Scottsdale and Chandler. Follow him on X @KmackSam or reach him at sam.kmack@arizonarepublic.com.

This article originally appeared on Arizona Republic: Danelle Plaza in Tempe has decayed for years. Change may be coming