A long-vacant property at the edge of Flagstaff’s historic downtown is being transformed into a $32 million mixed-use development that will bring 120 apartments, ground-floor retail space, and a public plaza to one of northern Arizona’s most popular mountain towns.
The project, called Heritage Square, is being developed on a two-acre site along Route 66 that previously housed a shuttered lumber yard. Construction broke ground in January and is expected to be completed by late 2027.
“Flagstaff is a place where people want to live, work, and visit, but our housing supply hasn’t kept up with demand,” said developer Jessica Nordquist of Peaks Development Group. “Heritage Square is designed to fit the character of downtown while adding the housing and retail space this community needs.”
The development’s design incorporates elements inspired by Flagstaff’s railroad and timber heritage, with brick facades, large windows, and timber accents. A public plaza facing Route 66 will feature a covered pavilion for community events and a small amphitheater.
Of the 120 apartments, 30 will be designated as workforce housing with rents set at levels affordable to households earning 60 to 80 percent of the area median income. Flagstaff’s housing affordability crisis has been among the most severe in Arizona, with median home prices exceeding $550,000 and average rents climbing beyond $1,800 per month.
“Workforce housing is critical for Flagstaff,” said city housing director Maria Romero. “We need our teachers, firefighters, nurses, and service workers to be able to live in the community where they work.”
The ground-floor retail spaces are designed for local businesses, with the developer committing to prioritize independent shops and restaurants over national chains. Several local business owners have already expressed interest.
The project required extensive coordination with the city’s historic preservation guidelines, as the site is adjacent to the downtown historic district. The design was reviewed and approved by the city’s Heritage Preservation Commission after several public meetings.
Flagstaff’s downtown has seen increasing development activity in recent years, driven by strong tourism, the presence of Northern Arizona University, and the town’s appeal as a mountain community with four-season recreation.
