The Scottsdale City Council approved zoning changes and development agreements for a handful of ambitious new projects throughout the city over the past few years, leading some critics to argue developers – and their campaign contributions – have too much influence over its decisions.
The 4-3 vote in December to approve the Southbridge Two redevelopment along 5th Avenue in downtown is the most recent project to draw the ire of residents opposed to increased heights and density, but it's far from the first project eliciting split reviews from voters and council.
From the downtown Marquee office building approved in 2019, to the Nationwide redevelopment given the green light in 2018, projects have time and again caused friction between citizens supporting them as economic boons and advocates for preserving the city’s existing look and feel.
Resident Jim Bloch is critical of recent approvals like Southbridge Two and said he believes developers have too much influence over council decisions.
“Bottom line, I believe a majority of the city council is in the pockets of developers and the developers know campaign contributions bring on huge dividends for friendly zoning and up-zoning,” Bloch said.
Critics point to the large campaign contributions typically flowing from development interests to candidates considered pro-development.
Some elected officials on the receiving end dispute the contention.
Asked if developers have too much influence, Councilwoman Virginia Korte – who received significant developer dollars in previous elections – said, “Speaking only for myself, no. I make decisions based on what is best for Scottsdale.”
Korte defended votes for projects like Marquee and Southbridge Two, stating they complied with zoning rules and will help Scottsdale grow and diversify its economy to remain competitive.
A campaign spokesperson for Councilwoman Suzanne Klapp, who also received significant developer dollars in the past, argued the projects are good for the city’s economy.
“The overwhelming majority of real estate development projects in Scottsdale are noncontroversial, provide sound economic development opportunities, create thousands of jobs, generate millions of dollars in tax revenue, provide new and exciting amenities, and contribute to the overall high quality of life enjoyed by Scottsdale residents – all elements of Councilwoman Klapp’s overarching campaign platform,” said Kyle Moyer.
Scottsdale resident and activist Howard Myers argues in some cases, campaign contributions can be used by developers or associated entities to influence votes.
Although there is very little research done on the influence of campaign contributions on political outcomes at the local level in the U.S., a 1997 study on congressional campaign contributions suggested, generally, contributions are motivated by support for a shared ideology rather than buying votes.
Another study, published in Political Research Quarterly in 1998, looked at local elections in St. Louis and Atlanta and suggested contributors give to candidates to “gain access to power.”
The 1997 study, published in the Journal of Law and Economics, rejected the notion campaign contributions at the legislative level are used to buy politicians’ votes and it is more likely PACs and large donors directing their money to candidates who share their values or policy positions.
“While it is not possible to conclude that none of the congressmen ever sold their votes for donations, our estimates demonstrate a remarkable degree of stability in voting patterns over time,” the study said.
A Progress analysis of select city council votes and campaign contributions to Klapp and Korte’s 2016 city council campaigns found both candidate committees derived a significant portion of their overall contributions from individuals with ties to the development community.
Both consistently voted to approve projects tied to those donors, both before and after the election.
Klapp’s campaign raised over $218,000 during the 2016 cycle, with over $108,000 coming from individuals with ties to the development community, including developers and their family members, spouses, zoning attorneys, contractors and architecture firms, according to public campaign finance filings.
Korte’s campaign raised just shy of $180,000 during the 2016 cycle, with over $83,000 coming from individuals with ties to the development community, according to campaign finance filings.
Developer Wayne Howard hosted a fundraiser for Klapp on Dec. 17, at his home in Paradise Valley. The host committee for the fundraiser was a who’s who of Valley developers and zoning attorneys, including Ed Bull, Mike Lieb, Jason Morris and Larry Lazarus.
An analysis of council votes from Jan. 1, 2014 through Dec. 31, 2019 found the 10 developer-affiliated donors giving the most to Klapp and/or Korte in 2016 brought 17 zoning, abandonment or related requests before the council. Klapp and Korte voted for them all.
Many of those projects had little or no public opposition and were approved unanimously, such as the renewal of a city abandonment in 2018 for the Optima Sonoran Village expansion and three mixed-use projects from Clayton Companies between 2017 and 2019.
Optima’s David Hovey gave $5,000 to Korte’s 2016 campaign but did not contribute to Klapp.
Tom and Jane Frenkel of Clayton Companies gave a total of $11,950 to Klapp’s campaign in 2016. Tom Frenkel also gave $5,000 to Korte’s campaign.
Other projects supported by the two mayoral candidates were more controversial.
This includes another Frenkel project, the Parkview mixed-use development approved on a 5-2 vote in 2016.
The Marquee, criticized by some for being too tall and massive for its downtown location, passed on a 4-3 vote with Klapp and Korte in favor Aug. 27. Mayor Jim Lane and Milhaven also supported it.
Those associated with Shawn Yari of Stockdale Capital Partners, the Marquee owner, gave $5,000 each to the Klapp and Korte campaigns in 2016.
In 2016, Yari’s Waterview hotel and residential project was approved 5-2, again with the support of Klapp, Korte, Lane and Milhaven.
This same council majority also supported expansions at Bottled Blonde in the Entertainment District.
Les and Diane Corieri with Evening Entertainment Group, the company behind Bottled Blonde, gave $12,500 to each candidate committee in 2016.
“I think the council and Mayor are too dependent on campaign contributions,” said downtown gallery owner Bob Pejman, who supports the political action committee opposing Southbridge Two.
When asked if he thinks developers have too much influence, former Councilman Bob Littlefield, also a PAC ally, said, “Absolutely and anyone who takes the time to read the campaign finance reports...can easily see the proof this is true.”
But both Korte and Moyer argue it’s not true and insist their support for new development is in the city’s best interest.
“Councilwoman Klapp supports sound economic development opportunities whether in the healthcare sector, hospitality industry, or in the real estate development community,” Moyer said.
Korte said, “Our city is evolving. I believe by working together we can find the balance between preserving the charm of Old Town while continuing to make it more contemporary for our visitors and future generations of residents.”
Korte argued the pushback against development is nothing new in Scottsdale and many now-beloved projects and movements were not always supported by all residents.
She pointed to two voter rejections of Indian Bend Wash bond measures in the 1970s, opposition to the first vote to increase the retail sales tax to fund the McDowell Sonoran Preserve in the 1990s and opposition to city council approval of Scottsdale Waterfront.
“Today these projects are iconic and contribute to Scottsdale’s brand,” Korte said. “Hindsight is 20/20.”
The pro-development bent of both Klapp and Korte – the only two candidates currently considering a run for mayor in 2020 – could make for an interesting choice for the anti-development crowd, which is without an obvious candidate unless someone new throws their hat in the ring.
The Committee for the Preservation of Old Town Scottsdale, a political action committee formed by some local property owners to oppose Southbridge Two and other dense, tall developments downtown, promises to spend in the city election.
“Big time,” PAC chair Janet Wilson said when asked if the PAC would be involved in the 2020 cycle.
However, it is unclear which mayoral candidate the PAC will back or if it will focus on the city council race instead.
Lamar Whitmer, a political consultant working with the PAC, said for the time being, the PAC will let its referendum “be our message” to Mayor Lane and the council members who supported Southbridge Two. Whitmer said he believed additional mayoral candidates will enter the race as voter discontent with the available choices becomes more apparent.