Southbridge Two

Southbridge Two, the proposed redevelopment of much of 5th Avenue, has drawn the ire of the Committee for the Preservation of Old Town Scottsdale, a new political group comprised of local businesses and property owners.

A new Scottsdale political group formed to oppose three high-profile downtown developments, highlighting a growing schism between City Hall and area business owners.

The divide could have a significant effect on the local 2020 election cycle, and the viability of upcoming redevelopments – including Southbridge Two and the Sunday Goods dispensary.

The new Committee for the Preservation of Old Town Scottsdale political action committee threatened to pour money into the upcoming city council and mayoral races and is considering a citizen referendum.

The group could make good on its threat as an email released by an opposing political action committee showed Old Town PAC members are soliciting contributions of $1,000 or more from area business owners. 

The Old Town PAC could also push to recall Council members who do not get on board with its agenda, said Lamar Whitmer, a longtime Scottsdale political operative working with the group. 

Whitmer is a familiar name to some Scottsdale pols as he was a one-time ally and confidant of Mayor Jim Lane and was involved in some of the higher-profile local political fights in past decades.

Whitmer was a political consultant for southern Scottsdale strip clubs that successfully thwarted an attempt by the city to strengthen regulations on the clubs, according to a 2006 East Valley Tribune report.

He was also involved in Lane’s first mayoral campaign in 2008, and the Los Arcos Mall subsidy referendum in 2003, according to the Tribune.

More recently, Whitmer led a failed four-year bid to build a gondola tourist attraction at the Grand Canyon on Navajo land, it was shot down by the Navajo Nation Council, according to Phoenix New Times.

The Old Town PAC is chaired by downtown property owners Janet Wilson and Dewey Schade and seeks to give downtown property owners more say in the redevelopment of downtown Scottsdale.

In a letter to the city from Whitmer last week, the PAC outlined its goals – which include preserving the character of Old Town Scottsdale.

Wilson said she does not want developers to think they can receive any concession they want from the City Council without pushback from longtime area businesses.

“They are going to have to come through us,” Wilson said.

The Old Town PAC also spawned a second group called Halting Inappropriate Growth, Heights and Hypocrisy, or H.I.G.H.H.

That PAC – which had not filed papers with the City Clerk’s office as of Nov. 7, – is advocating for the approval of the proposed Sunday Goods medical marijuana dispensary, one of the specific projects the opposing PAC is attemping to thwart.

H.I.G.H.H. is chaired by Paula Sturgeon, who also chairs the For the Best Scottsdale PAC that supported passage of Scottsdale’s three bond questions. 

The Rose + Moser + Allyn public relations firm, which ran the bond campaign and represents Sunday Goods, is also backing H.I.G.H.H.

Height and density targeted

Beyond the dispensary issue, the Old Town PAC is also opposed to increasing height and density in downtown Scottsdale.

Wilson said she opposed projects like the 150-foot Marquee office building narrowly approved by City Council in August.

She said she feels Council is giving developers a free-pass to increase height and density downtown without regard of how it affects existing businesses.

“We’re not against development, but we want development that keeps our character and our history,” Wilson said. “If you wipe that history away from a city, you have nothing. You’ve just got tall buildings and no part of your town.”

City spokesman Kelly Corsette said the 2018 Old Town Character Area Plan and the new height rule were subjected to extensive community outreach.

“The second update, completed in 2018, included one full year of direct outreach and engagement of community members,” Corsette said.

In its letter to the city, the Old Town PAC took aim at three projects its members contend epitomize the changing nature of the downtown landscape.

They are the dispensary, Southbridge Two and the Bishop Lane apartments.

Southbridge Two is Carter Unger’s proposed redevelopment of a large swath of downtown’s 5th Avenue shopping district, it would include new retail shops, condos, a hotel and an office building up to 150 feet tall.

Bishop Lane is a proposed eight-story apartment project along Bishop Lane south of 2nd Street.

In June, the Progress reported the site currently allows for heights up to 60 feet and density of 23 units per acre, but the developer is seeking zoning changes and bonuses to allow for 90-foot heights and 129.22 units per acre – a density increase of over 500 percent over existing zoning.

Wilson said she wants Council to take local concerns seriously before looking at these projects.

The planning process “is shaped by public input,” according to an email from city spokesman Kelly Corsette.

“The city’s planning processes, which result in policy documents that guide growth and development are open and shaped by public input,’ Corsette wrote. “The General Plan is subject to voter approval at the ballot box and character area plans are finalized through public dialogue and City Council approval.”

Scottsdale has not implemented a voter-approved General Plan in nearly 20 years– a violation of state law – according to a Legislative Council opinion sought by Republican state Rep. John Kavanagh D-8, following questions from the Progress earlier this year.

Unger, the Southbridge Two developer, said he supports community input on his and any other project, which is why he held dozens of meetings with the community and local HOAs.

Unger said the height and density are needed for the quality product he envisions and to bring in targeted tenants.

”The height – yes, it’s higher than some people are used to – but it allows us to do a really high-quality project that brings in the right kind of office and retail,” including an urban grocer, Unger said.

Former Councilman David Ortega, a friend and sometimes-hired advocate for Schade, has railed against the height as “exorbitant.”

“They draw a line going down 5th Avenue and on one side of the line it’s like 16 stories, and on the other side of the line, we’re one story,” Wilson said. “Well, what is that going to do to us? I don’t even think we’re going to be able to see daylight anymore.”

Unger asserted that some recent criticisms of the project were advanced to scare locals about it.

One has to do with phasing for existing tenants.

Unger said no one would be kicked out of their shops without proper notice.

Unger said all leases signed at his properties in the Southbridge Two area include redevelopment clauses in the contracts, notifying prospective tenants of the long-time plans to redevelop. 

Those leases also include requirements to notify tenants four to six months prior to the start of construction, Unger said.

Notably, he pushed back on assertions by Ortega, who has argued that Southbridge’s buildings will hang over the public right of way and that underground parking will extend into public streets.

Unger showed plans – the same used by Ortega – indicating underground parking will extend beneath city property but not underneath traffic lanes.

“We’re paying for everything we’re getting from the city, every bit of land,” Unger said.

Too much in a small space?

A concern inextricably connected to the height and density conversation – especially downtown – is more people in apartments or condos or office buildings will affect the city’s already stretched supply of public spaces.

Wilson, co-chair of the Old Town PAC, said she is afraid the Southbridge Two project would eat into public parking, mainly by replacing the existing Rose Garden public lot Unger wants to buy from the city.

Wilson, who owns several properties in the vicinity of the Rose Garden site, said the lot is heavily used.

Unger exclusively told the Progress he brought new plans to the city to build additional public parking on the Rose Garden site at no cost to the city.

The Rose Garden site, which Unger envisions for with private underground, would now also include 78 tuck-under parking spaces open to the public.

The City Council is meeting in executive session on Nov. 12, to discuss the proposed land sale.

Unger said the rest of his project exceeds existing city parking requirements.

He added the new parking and other changes to the site are the result months-long, good-faith discussions aimed at concerns from the city and other area stakeholders.

Those discussions long predated the formation of the PAC, he said.

Unger also said his project will result in a net gain of 12 public on-street spaces.

Whitmer also argued traffic would be exacerbated by increased density.

“This makes it worse,” Whitmer said, saying it could turn downtown Scottsdale into Tempe’s Mill Avenue.

If approved, Southbridge will also include improvements to the intersections at Goldwater Blvd. and 5th Avenue as well as Scottsdale Road and Stetson Drive, including using some of its own property to add a turn lane.

PAC has other concerns

Parking and traffic are far from the only concern, the Old Town PAC has brought forward, though.

The PAC is also worried about how the phased construction of Southbridge Two would affect existing businesses on 5th Avenue, both in Unger’s buildings that are being knocked down and neighboring properties.

Among the latter are properties owned by Wilson and Schade that will have to deal with likely years of construction.

“We will lose all of our tenants,” said Wilson, who has 44 tenants in the area. “This could be 10 years of our city being torn up.”

Unger said he will do his best to find new locations for his tenants that are displaced by construction but that he realized some tenants will leave for other areas.

Several tenants contacted by the Progress had no comment.

“Lots of the shop owners are not thrilled,” said Rochelle Hahn, manager of Lost in Socks, adding she would like more clarity on the project’s timeline.

Sophia Kobs, owner of the Piece & Story vintage shop, said she supported the project but understood why others had concerns. Kobs said she thought the project would increase foot traffic in the area.

“When people come down here, they pick one route or the other and miss the other street,” Kobs said.

Unger pushed back at arguments that he or his family has in any way intimidated tenants to stop them from voicing concerns, saying his family has always gone above and beyond to support tenants – including forgiving rent payments for months at a time.

“There are some great businesses that do a great job, but everybody would do better if we were in an area that had sustainable density and high-quality,” Unger said.

It appears the PAC’s concerns are shared by the city.

Mayor Jim Lane told the Progress that the way in which Southbridge Two and its construction would affect the 5th Avenue shopping district is a concern for him.

In an email to concerned residents, Scottsdale Principal Planner Brad Carr wrote:

 “Due to the nature of the project site, construction activity will likely cause partial closures of 5th Avenue and other streets abutting the site for some period of time.”

Unger acknowledged there will be construction pains associated with his project but said the initial pain is justifiable because something has to change in the area, citing high turnover rates at properties owned by his family in the area.

“Fifty-five percent of our tenants have been there for four years or less,” Unger said.

He also said he does not want to continue to see businesses fail in the area and an influx of office workers, tourists and residents brought in by his project would provide increased, sustainable foot traffic for them.

Schade, who owns property in downtown and along Fifth Avenue, said he has not seen that type of turnover.

Schade said his 11 tenants – excluding his own business – have been in his properties between two and 10 years. He said five tenants have been there more than five years.

Schade said he believes Southbridge would cause his tenants to sign shorter leases in the future because of concerns about construction.

PAC attack on weed

Though only two-stories tall, the proposed Sunday goods dispensary has also drawn the ire of the Old Town PAC.

“It’s incompatible development. It’s incompatible to downtown,” Whitmer said.

Wilson, Daniel Spiro and Gary Bohall are all participating in the Old Town PAC and are among owners neighboring the proposed dispensary who told the Progress in October they want to assemble parcels and build a tall mixed-use project there.

Spiro argued that “spot zoning” the marijuana site will hurt his group’s ability to build taller developments around it under the existing C-2 zoning. That zoning allows for heights of 60 feet and up to 90 feet with special bonuses.

However, the group’s planned ad blitz focuses less on zoning and more on marijuana use with slogans like “Keep Old Town Family-Friendly”, “No Pot in Old Town” and “Keep Old Town Drug-Free.”

H.I.G.H.H. Chairperson Sturgeon said the campaign was done in bad faith.

 “There are people who plain don’t like (marijuana) and then there are the folks who want that land for other purposes and are using that second group as cover,” Sturgeon said.  

The H.I.G.H.H. PAC has anchored its messaging in the question of access, arguing that Sunday Goods has had state permission to open a dispensary in the area for years and meets all city separation requirements for a medical marijuana dispensary.

However, Wilson said her group has is concerned the dispensary could lower property values and allow for expanded use in the area if recreational marijuana use is passed at the state level.

A citizen initiative to legalize recreational marijuana that could go to Arizona voters next year would allow existing medical dispensaries to provide recreational marijuana, according to a report by Howard Fischer with Capitol Media Services.

“It’s like a Trojan Horse type thing, you know?” Wilson said.