Will 160 people be willing to pay $500,000, or more, for a great view from downtown?

That's what it is coming down to if a proposal to build the 27-story Century Tower is to move forward.

Bob McMahon, chief executive officer of Metro Restaurants, and Don Martin, vice president of Competitive Engineering, are still looking at the idea of going ahead with what would be Tucson's tallest building at Stone Avenue and Pennington Street, next to Jacomé Plaza and the Joel D. Valdez Main Library.

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The two say they've sought expert advice from Sundt Construction on costs and they are evaluating the profit potential for the tower. They believe the Century Tower will serve as a focus for downtown redevelopment.

"Initially, we thought the construction cost would be about $250 to $300 per square foot, but that didn't include all of the development costs. Now, we're now looking at $500 per square feet, which is normal for around the country, but high for Tucson," Martin said. "Whether this is too high depends on what our market analysis says is the potential."

He said the condominiums would be priced starting at $600,000 for about 1,200 square feet to $1 million or more.

"The big issue is, can we sell them? We haven't found anything to stop us from going forward, but we haven't found anything to give us confidence in the depth of the market for this kind of property, either," Martin said.

Higher construction costs, which are double the initial estimates, have increased the budget for the building's retail space.

When the Century Tower was initially proposed in May it was as a joint venture of 100 people who would invest $50,000 each for a building that would support two floors of retail and office space and 27th floor restaurant overlooking the city. Martin said the 100 investors would now have to come up with $100,000 each.

"We're on track to make an initial decision on whether to proceed by the end of the year," he said. "There are a lot of issues to be resolved before we go forward, but it all comes down to making the proposal and seeing if there's support out there for this. If the pre-sales come, we proceed. If not, we pack up and go home."

One potential supporter has been surprisingly quiet, he said, and that's Tucson's city government.

"There hasn't been a show of political will to say this is a good thing, and that's disappointing," Martin said. "I'm confident we'll get that support, in the end, but I would have thought that Río Nuevo would have come forward and said, ‘This is a good thing for the city. How can we make this happen?"

Randy Emerson, director of development for Río Nuevo, said he was generally supportive, "but until we see more details, there isn't a lot we can say."

Emerson said there have been a variety of downtown residential projects proposed since the start of Río Nuevo.

"If they are viable plans, we encourage them," Emerson said. "However, everything we've seen on the tower is very preliminary and a lot of questions need to be answered."

The proposal will need to be approved by the Río Nuevo review board and the full project board of directors before sponsors can take a position, he said.

"The system of review has a lot of checks and balances," Emerson said. "If this project resurfaces, it will need to go through this process, then we'll have a chance to talk about it."

Although $500 per square foot might be a reasonable price for condominiums in luxury areas such as Stone Canyon or Dove Mountain, it's open to debate whether a downtown high-rise could attract enough interest to make the project viable, said residential real estate industry analyst John Strobeck.

"That's extremely high for Tucson, where the average is $200 or less," he said, quickly adding that luxury condominiums are emerging as a specialty market in other cities.

"In Las Vegas, there are plans for 50 luxury condos," Strobeck said, "but we don't have a track record here. Condo conversions are doing well, but ($500 per square foot) would be outside today's range."

Still, Strobeck said he thinks Century Tower could succeed.

"There may be retirees and others looking for premium addresses who might find this to be what they want," he said.

Kandy Walsh, an associate broker and condominium specialist for Long Realty Co., said condominiums near Ventana Canyon and La Paloma in the Catalina Foothills are now selling for about $300 per square foot.

"So, I can't imagine what it would take to make these condos worthwhile," she said.

While she says she's "dubious" about the chances for success today, the prospects for the future may be better.

"Downtown is starting to become highly marketable," Walsh said. That $500 a square foot might be expensive now "but two or three years down the road, Ventana and La Paloma will be selling for $500 per square foot, so who knows?"

Philip S. Moore may be contacted by e-mail at pmoore@azbiz.com or call (520) 295-4238.