South Scottsdale's Renaissance

Paul, a childhood chum who now calls Chicago home, sent me an interesting article from Wednesday's Arizona Republic about the dramatic changes occurring in south Scottsdale, the neighborhood in which he grew up. Scottsdale has always been one of Phoenix's ritzier suburbs, but in recent years its southern half (which includes "Old Town" Scottsdale, the original settlement) entered a precipitous decline while its northern half continued its glorious boom. It appears that south Scottsdale is finally bouncing back.

Link to article here (text follows below)

It's interesting that both the decline and rebirth of south Scottsdale can be tied to Los Arcos Mall. Los Arcos opened on November 21, 1969 at the southeast corner of Scottsdale Road and McDowell Road with department store anchors Sears and The Broadway. After two decades of success, the mall began to falter after Westcor acquired the hum-drum Scottsdale Fashion Square, located less than three miles away, and began to expand it into Phoenix's premier shopping destination. As Los Arcos faltered, so did the rest of the retail facilities in the vicinity; the property was in desperate need of redevelopment.

By 2000, Los Arcos was officially "dead" and its owner, Steve Ellman, demolished it to make way for an 18,000 seat arena for the Phoenix Coyotes NHL hockey team, of which he was part-owner. While Scottsdale officials aggressively supported the plan, desperately hoping to inject new vitality into the neighborhood, area residents felt a professional sports facility was not in their best interest. The ensuing political wrangling frustrated Ellman, who eventually dropped his plans and instead built the arena on vacant farmland adjacent to the new Loop 101 Freeway in the suburb of Glendale, the opposite end of the Phoenix metropolis.

Ellman's next proposal was Los Arcos Town Center, a 540,000-square-foot "power center" to be anchored by Wal-Mart Supercenter, Sam's Club, and Lowe's Home Improvement. For the most part, area residents didn't support this plan either, as they didn't like the design, worried about traffic impacts, and didn't think a massive influx of big-box retail was a panacea for the community's woes. The fact that Ellman was seeking financial incentives from the City of Scottsdale was contentious as well. The Los Arcos site continued to be a "political football," and with no resolution in sight, Maricopa County Sheriff Joe Arpaio went so far as to propose that one of his famous "Tent City" jails be erected on the property. The only thing more embarassing for south Scottsdale than living with the rotting remains of a "dead mall" would be to see it transformed into a gigantic outdoor prison.

In a somewhat sudden and suprising development, Arizona State University arrived to become the "savior" of Los Arcos in June 2004. The school announced its intention to build the "ASU Scottsdale Center for New Technology and Innovation," a high-tech research park that would create 4,000 jobs. Residents and City officials were ecstatic to have a classy university-affiliated tech park with high-paying jobs instead of a garish traffic-generating big-box center with minimum-wage employment opportunities. Steve Ellman was more than happy to rid himself of a property that had been a thorn in his side for four years. The "Los Arcos problem" had, at long last, been solved.

Here's an aerial shot of the vacant Los Arcos property I snatched from Google Earth -- click on it for a larger image:

While ASU has yet to construct a single building on the Los Arcos site, its plans are spurring the development of numerous high-end condos to house future tech center employees as well as the revitalization of several flagging shopping centers nearby. The positive vibes are also affecting "Old Town" Scottsdale, which has been struggling. Although Scottsdale Fashion Square is nearby, the mall has proven to be an "island" unto itself. I look forward to the completion of the long-anticipated "Scottsdale Waterfront" development along the Arizona Canal. Few outside Phoenix may know that the city boasts an extensive network of canals, based on a system constructed by the Hohokam Indians centuries ago, that allowed the arid Salt River Valley to become an agricultural powerhouse. In the time since the metropolis developed, the majority of the canals find themselves in an urban context, presenting a unique development opportunity. If Scottsdale Waterfront proves to be successful, similar projects will be encouraged, allowing the canal network to become an urban asset full of unique environments.

The article raises a very important issue for urban planners: gentrification. While it is important not to neglect Phoenix's older suburbs as the metropolis sprawls further into the desert, it is disheartening to see that south Scottsdale's revitalization is "pricing out" existing residents and making housing there unaffordale to a large segment of the population. I feel the biggest challenge facing planners today is finding ways to encourage urban renewal while preserving affordable housing -- a goal that may be unattainable in a capitalist system where land is primarily a commodity. We in the United States must ask ourselves if the true purpose of a city is to generate profit for a few or to provide a supportive environment for all.

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Scottsdale's south mirroring pricier north

Changes may force out residents

Lesley Wright and Casey Newton
The Arizona Republic
Sept. 28, 2005 12:00 AM

Every day, Scottsdale's working-class south moves a bit closer to resembling the moneyed north.

Small ranch homes built for Motorola workers now fetch luxury prices.

One-bedroom condos are starting at $400,000.

And Arizona State University is planning a high-tech research park in the area to attract the "creative workers" of the "knowledge economy."

Not bad for an area of town once best known for its strip clubs, adult bookshop and a glut of payday-loan stores.

Although city officials are pleased at the quick turnaround, they also are dealing with the unintended consequences: a city where teachers, firefighters and regular people can no longer afford to live, an elderly population facing dispossession and growing traffic concerns.

Still, the bloom of new development is sweet.

"Five years ago, you couldn't pay people to live downtown. Capital was fleeing. All the development was up north. Downtown was running risk of becoming a shell of its former self," said John Berry, a zoning attorney who helped shepherd through many of the high-end condominiums being built.

"Now, I think it will be the hottest property around. The next five years or 10 years is going to be the most exciting time to be participating in Scottsdale all the way down to Tempe," Berry said.

The national real estate boom has sent home prices skyrocketing, allowing most "fixer-uppers" to fetch at least $200,000.

The Scottsdale Waterfront, remodeled Hotel Valley Ho and planned W Hotel promise to bring hip, sophisticated urban living to the West's Most Western Town.

Even Babe's Cabaret, a local skin joint, is getting a high-end makeover by adult-film star Jenna Jameson.

Study prompts change

The transformation was prompted in part by a 2003 report by ASU's Morrison Institute for Public Policy, which chided Scottsdale for resting on its fading image as a resort town.

Scottsdale leaders, mortified about the ceaseless bickering over redevelopment plans for the former Los Arcos Mall site, opened Scottsdale's prodigious wallet.

The result: In the past three years, about $2 billion in public and private investment has poured into south Scottsdale.

Nearly 2,600 expensive condominium units are attracting the type of well-heeled residents who until recently would not have considered living south of Frank Lloyd Wright Boulevard.

A long time coming

Four years ago, merchants in south Scottsdale were watching their incomes nosedive. City officials were wooing developers with tax giveaways.

And Sheriff Joe Arpaio was contemplating a new tent city jail at the blighted Los Arcos Mall, the epicenter of every major political debate since the mall finally shut down in 2000.

Scottsdale leaders battled with landowner Steve Ellman, who first wanted to build a professional hockey stadium and then a big-box Wal-Mart center at Los Arcos.

Neighbors lived with half-razed buildings and empty stretches of concrete.

Then along came ASU.

The deal with the university, which called for Scottsdale to invest $130 million of taxpayer funds, was not without controversy.

But the City Council approved the partnership last year, and groundbreaking is expected next year on the $340 million ASU Scottsdale Center for New Technology and Innovation.

"I don't think there is any question that this will be anything short of a major revitalization of that part of town," said Rob Melnick, ASU's associate vice president for economic affairs.

Melnick also directed research for the influential "Which Way Scottsdale?" report, released in March 2003, which since has served as a blueprint of sorts for the overhaul of Scottsdale's oldest neighborhoods.

Effects already seen

The tech center, which promises to produce 4,000 high-paying jobs, has become a major catalyst for change.

A local development company has acquired the ground lease under south Scottsdale's ailing Kmart, another beacon of south Scottsdale's former deterioration.

An announcement about the future of the Kmart site is expected soon.

Smaller strip malls that dot major thoroughfares, such as Scottsdale and Hayden roads, along with older low-end apartment complexes, are likely to fall to the condominium craze.

"Here, in the next one or two years, it will be very obvious what's happening," said David Roderique, Scottsdale's economic vitality director.

"Things have gotten a lot better," Roderique said of the gentrification of neighborhoods as well as the new housing. "All of a sudden, this is becoming a hot area. We've got retailers coming to us as opposed to us having to beg."

Some families shut out

Scottsdale has worked in recent years to jump-start older neighborhoods by building parking structures, waiving fees for renovation, and other small steps.

But the result, huge increases in home prices, has left some would-be Scottsdale residents out in the cold.

After three years of renting an apartment at Thomas Road and 68th Street, Josh and Alicia Cline were looking forward to raising their two young sons here.

The Valley natives love south Scottsdale: its central location, its proximity to art and cultural events and the diversity of the surrounding community.

Best of all, they thought, the area is home to Scottsdale's most affordable real estate.

But a year ago, as the speech pathologist and his homemaker wife began looking for a more permanent residence, they couldn't find anything for under $200,000.

"There's a pretty low bracket living down here, but yet we're not able to find a way in," Alicia said. "That is very frustrating. We're shut out."

The median sales price for south Scottsdale homes increased 11.8 percent during 2004, to $189,000, but costs have shot up even higher since. In August, the median home price was up 54 percent, or more than $100,000, to $291,500.

Nationwide phenomenon

The city doesn't control all the forces changing south Scottsdale.

The housing boom is a nationwide phenomenon, and the improved economy has driven much of the effort.

Still, Scottsdale Mayor Mary Manross said she worries about the affordability crisis.

"Of course it's a concern," Manross said. "We want to make sure we have a diverse, balanced community. I want to make sure it's a place our city employees, our neighbors and your friends and mine can live. And it's getting more difficult."

Real estate experts working on the ASU site are thrilled south Scottsdale is starting to provide the urban setting that creative high-tech wunderkinds will appreciate.

"There may not be a better place in the region to attract the knowledge worker, the creative worker," said Sharon Harper, president and chief executive officer of the Plaza Cos., one of the local development partners.

"When you look at the demographics of where these great workers live and go to school, we are not far away from any of that. That's very important for our companies locating there."

Seniors are threatened

Developer attorney Berry said that the new projects might mean Scottsdale could lose its can't-do "Stopsdale" reputation. But the Valley likely will have even more reasons to call the city "Snobsdale."

Earlier this year, a developer triggered a firestorm when it attempted to redevelop the Wheel Inn Trailer Ranch, home to scores of elderly people living on fixed incomes, into condos that would be marketed to the tech-center workers.

WestStone Properties withdrew its proposal in the wake of fierce public opposition. But no one doubts that other redevelopment projects will be proposed, potentially displacing a vulnerable population that can't afford to live elsewhere in Scottsdale.

"If you are talking about downtown, regular people won't be able to live there," said Rick Kidder, incoming president of the Scottsdale Area Chamber of Commerce. "For a city that already imports half its workforce, that's a problem. What we have is a growing affordability gap."

Reaching critical mass

Scottsdale officials say that they can control some things and that those things are quickly reaching a critical mass.

Transportation, both by car and mass transit, needs an overhaul, according to elected officials, who already are having nightmares about traffic between Loop 101 and Scottsdale Fashion Square.

Scottsdale is putting together a transportation master plan this year in an effort to address the coming explosion in traffic downtown.

Other concerns remain, including a southern stretch of Scottsdale Road that seems resistant to revitalization.

Significant strides

And critics still are wary of the tech center, which has yet to announce a single corporate tenant.

But few disagree that the area has made significant strides in recent years.

"It is just phenomenal, the things that have happened," said Councilman Wayne Ecton, who will move into a luxury condo on downtown's Main Street next year. "If you look at where we were 15 years ago, and where we are now, it's amazing."

A view of downtown Scottsdale (above) highlights where the Waterfront District will be. An artist's rendering (right) shows the Waterfront Residences.