SouthBridge Two: Scottsdale City Council approves mixed-use project with split vote

By Melissa Rosequist
Twitter: @mrosequist_

In a split 4-3 Scottsdale City Council vote, Spring Creek Development’s polarizing project known as SouthBridge Two has been approved to redevelop a swath of Old Town real estate.

The council’s vote came during its Dec. 4 meeting at City Hall, 3939 N. Drinkwater Blvd., with a number community members attending to give their perspective opinion on the project some say sought to carry a portion of Old Town Scottsdale into a new era; while others fear it will be a determent to what makes the area so special.

The dissenting votes were councilmembers Kathy Littlefield, Guy Phillips and Solange Whitehead.

SouthBridge Two seeks to redevelop nearly 10 acres in Old Town Scottsdale, near Goldwater Boulevard and Fifth Avenue along the Arizona Canal.

The mixed-use project --- estimated to cost $574.5 million throughout construction --- has been coming down the pike for some time, with community members taking a side on the project as its hearing date neared.

In late August, the Scottsdale Planning Commission unanimously approved three requests, including a zoning district map amendment, a downtown infill incentive district application and a request by owner to abandon multiple alley and other rights-of-way to allow development.

At its core, SouthBridge Two is setting out to redevelop a 9.94-acre site to include a mix of residential, hotel, office and commercial uses, with up to 570 multifamily dwelling units, 200 hotel units, 119,000 square feet of class A office space and 86,000 square feet of retail space.

In addition, the developer will purchase an adjacent city property known as the Rose Garden, a 1.24-acre parcel used for public parking, for $8 million.
Spring Creek Development President Carter Unger says the overall goal is to replace the same retail that exists today, with the addition of high-end residential units, office space, and a hotel.

Compromises on the project were being made until the 11th hour prior to the meeting, city officials said.

According to Mayor Jim Lane and others on the council, SouthBridge Two yielded a handful of closed-door meetings over several months as officials worked to fine-tune the project, and come up with the best fit for the area.

Councilwoman Suzanne Klapp, who identifies with local business owners, says she was uncomfortable with the proposal until a couple of weeks ago.

“After having talked and found ways to overcome objections, basically, which what you need to do is talk about what you’re concerned about and find out if you can come to a resolution,” Ms. Klapp said.

“I think that’s our job. I think that’s what we’re here for, to move the needle and get the best project we can possibly get and not impede it.”

A Dec. 3 memo from Scottsdale Planning Director Tim Curtis to council lays out three revisions at the request of the applicant to address concerns:

Ensuring the city has access to utilize Area A raised event deck at least one event during the period of Jan. 1 to April 30 of each year;

Allowing for the closure of the vehicular access of the Site B access drive, Unger Way, for specific special events, subject to review and approval through the city’s special event process; and

Requiring the reduction in overall height of the two buildings on Site C to maximum of 139 feet; previously the tallest building on Site C was 150 feet.

Nearly 60 additional stipulations have been agreed upon as well.

About the people

The project site is near the intersections of Fifth Avenue and Marshall Way; Fifth Avenue and Goldwater Boulevard; Fifth Avenue and Scottsdale Road; and Sixth Avenue and Stetson Drive.

SouthBridge’s development plan includes multiple phases of construction across four sites. The two western development sites front onto both Fifth Avenue and the Arizona Canal.

The remainder of the site at Sites A and B is more knitted with the existing urban fabric of the Fifth and Sixth avenues areas of downtown, west of Scottsdale Road.

The area houses various uses including retail, service and restaurants.
Mr. Unger, at the helm of the redevelopment, is completing a vision that’s been in the works for 25 years, those involved with the project say.

His late father, Fred Unger, completed the first SouthBridge project on the north side of the Arizona Canal; when the Great Recession hit, plans for SouthBridge Two were put on the back burner.

“We have tried very hard to listen to as many people as we can to create the best project possible,” Mr. Unger said to the council.

“For the councilmembers up there, no matter which way you vote tonight, I hope each of you know this project has been enhanced and made better because every single one of you up there.”

Of the various benefits Mr. Unger believes this project has, he says the main benefit is people.

“We want to create an area where everyone can thrive. There are a lot of people who are doing great right now, but there are also a lot who don’t do as well because a reliance on the tourism season,” he said.

According to an economic and fiscal impact analysis prepared by Scottsdale-based Elliott D. Pollack & Company, SouthBridge Two is estimated to generate over $15 million in direct tax to the city from construction, Mr. Unger explained, followed by an annual direct tax in the form of property sales and bed tax of around $4 million.

Spring Creek Development’s land holdings generate $350,000 total of sales and property tax, Mr. Unger said, pointing to needed funds for infrastructure and public safety.

Moreover, once complete, the project is estimated to bring in $290 million annually in economic impact and output, Mr. Unger said.

“What these numbers represent, are birthday presents, anniversary vacations, groceries, electric bills,” he said. “This number of $290 million a year will improve the lives of our citizens.”

Public opinion

Before the council deliberated SouthBridge Two’s fate, a throng of people took to the microphone to express their feelings about the project.

From lauding the details of the project, to the perceived day-to-day realities of Fifth Avenue, to Mr. Unger’s reputation as a Scottsdale resident --- many people voiced support for the revitalization of the south side of the Arizona Canal.

However, not all comments were positive as some voiced concern over the impacts to their storefronts, available parking and the heights proposed.

According to Rose Law Group Partner Jordan Rose, who represents Spring Creek Development, four of the surrounding businesses in the area oppose the project.

Local proprietor French Thompson says he isn’t against the redevelopment, but he opposes what the project was proposing.

Some residents in opposition to the project asked for more time and thought to be given to SouthBridge Two before voting.

“It’s way too big, I think the heights are just out of character with the rest of downtown,” Mr. Thompson said.

“The buildings that are there that are going to demolished have languished for years, but that’s on purpose because it was going to be bull-dozed in the first place. There was never an intent of upgrading those buildings.”

Mr. Thompson acknowledged the compromises made by Spring Creek Development and company, requesting the project be continued.

“This really is under-parked. If you’re bringing in that many people, you really need to have a whole lot more parking places,” he said. “If you want to say, ‘look, in 10-15 years people aren’t going to be driving cars...’ but I’m going to guess every one of you council members drove here in a car; I’m going to guess every one in the audience --- none came here on a scooter.”

City staff’s report on SouthBridge Two shows parking will primarily be provided in large, below-grade garages underneath a majority of the site, with a small number of at-grade parking spaces on ground level for retail uses.

The report states 1,418 spaces are required for the mixed-use development, and 1,500 will be provided for the entire project.

Ms. Littlefield voted against the project, stating these plans would change Old Town forever.

“Old Town is a very small, very compact area, only a few blocks in size. To cram this much density and height into the area will destroy its very character,” Ms. Littlefield said.

“It would remove the atmosphere and Old Town western flavor that tourists come here to find.”