Southbridge Two

The proposed Southbridge Two development would drastically reshape the 5th Avenue shopping district in downtown Scottsdale, bringing new retail space, residential, office and a hotel to the area. The City Council will consider the project on October 15.

A total renovation of downtown Scottsdale’s 5th Avenue shopping district will go before the City Council on Oct. 15 after receiving a unanimous thumbs up from the city’s Planning Commission.

Southbridge Two has come a long way in the 11 months since the Progress first covered the project in October 2018, going from an ambitious proposal to one of the most significant redevelopments to come before the City Council in recent memory.

If approved by the City Council, the project would reshape nearly 10 acres of prime real estate in the heart of downtown.

The project name hearkens to the Southbridge development along the canal in downtown Scottsdale spearheaded by the late Fred Unger of Spring Creek Development. 

Southbridge Two was an extension of that plan that Unger had been working on for over 20 years.

Fred Unger’s son Carter Unger is now heading up the project, which would start at 5th and 6th Avenues at Scottsdale Road and hopscotch west to parcels along Goldwater Boulevard.

The proposal includes constructing a 150-foot class A office building in between 6th Avenue and Stetson Drive at Scottsdale Road along with a nearby hotel.

The project would also include the complete redevelopment of some 5th Avenue shops just west of Scottsdale Road and include a new public market-style venue that would open up pedestrian connectivity between 5th and 6th Avenues.

Scottsdale Principal Planner Brad Carr said heights on that retail site would not exceed 48 feet.

The height does increase further west on a site straddled by 5th Avenue and the Arizona Canal that would include residential up to 150 feet tall along the canal with lower profile retail along 5th Avenue.

The final site would include 66-foot residential buildings on what is now the city-owned Rose Garden parking lot.

Unger is in negotiations to purchase the lot from the city.

Unger said the goal of the redevelopment is inject more traffic into 5th Avenue in order to support the unique local businesses that are there. He said he has high turnover at his family’s properties due to low traffic in the summer months.

While all commissioners appeared in favor of that goal – and all voted to recommend approval of the project – several still had concerns.

Several commissioners and city staff expressed concerns with amended development standards that would allow for no stepback on the 150-foot residential buildings along the canal.

The Planning Commission ultimately decided against recommending a staff stipulation that would have required greater stepbacks along the canal.

The timeline for the development is unclear, but plans submitted to the Planning Commission indicated that the residential building at the Rose Garden site would be phase one and the market/residential site along the canal would be phase two.

The office/hotel site and 5th Avenue retail site would be phases three and four, respectively.

Southbridge Two garnered a relatively robust amount of community support at the Planning Commission compared with the widely-derided Marquee office building approved by the City Council one week prior.

Only two speakers opposed the project compared with around 10 people in support from local neighborhoods, city advocacy groups and the wider Scottsdale community.

Several residents of the nearby residential communities supported the project, including residents of Villa D’Este and the Waterfront condominiums.

Jacqueline Hall, who lives in the Villa D’Este neighborhood across from the Rose Garden site, said she was initially skeptical of the project when she first heard about it.

However, Hall said she believes the site will eventually be developed anyway and she would “rather have something done tastefully and see the comps go up in our neighborhood as well.”

Sonnie Kirtley, with the Coalition of Greater Scottsdale, also supported the project despite speaking against projects with similar height and density in the past.

Both former Councilman David Ortega and downtown gallery owner Bob Pejman expressed concerns that the development would negatively impact the area’s parking supply.

The entire Southbridge Two development includes 1,500 spaces, above the 1,418 spaces required by city code.

However, Pejman said the code is deficient.

Commissioner Larry Lush, though supportive of the project as a whole, recommended that Unger consider adding extra parking to the residential project.

Commissioner Christian Serena suggested that the city partner with the developer to include a level of underground public parking within the project, similar to what the city did with the original Southbridge development.

Serena said the city could use proceeds from the Rose Garden sale to pay for the new spaces.

Much of that support is a credit to Carter Unger’s outreach over the past 12 months. Outreach on the project predates that effort, though, and is part of Fred Unger’s legacy.

Kirtley, with COGS, said Fred Unger’s Spring Creek team always made extra efforts to keep the community informed about the evolution of the project over the years.

Carter Unger continued his father’s legacy, according to several speakers at the meeting.

At the planning meeting, Unger thanked Pejman for his criticism and invited others to let him know how they can improve the project.

Kush commended Unger for the outreach.

“You should give a seminar to the owners of Caesar’s (hotel), Museum Square and the Marquee on how to gather the support of a neighborhood,” Kush said. “You’ve done an amazing job.”

In fact, one group curiously absent from the Planning Commission meeting was the local business owners along 5th Avenue – the people who would be most directly impacted by the eventual Southbridge Two development.

Throughout the development, Southbridge Two could displace dozens of businesses at properties owned by the Ungers and affect others in the area that will have to work around construction.

“Lots of the shop owners are not thrilled,” said Rochelle Hahn, manager of Lost in Socks.

Hahn said she felt like their concerns were ignored because they are not property owners.

Hahn said she would like to see more transparency from the developer about the timeline for the phases of development so that the businesses is not uprooted on a moment’s notice.

Unger said his family has made efforts to inform their tenants of plans for their properties and included redevelopment clauses in all leases with six months notice.

Unger said the process has been handled in an open and honest way.

“Every tenant we have along 5th Avenue has been very clearly, very clearly…” Unger said. “We want to make sure they understand it. It is not in us where we would allow someone to put their money in and then have the rug pulled out from underneath them.”

Unger said all leases have a redevelopment clause with six month notification requirements.

Unger said helping those local business owners is a key motivator behind the Southbridge Two development.

He said injecting more year-round traffic into the area via the office building and residential projects could provide increased traffic for businesses that struggle during the slow summer season.

 “We want to put back all that character, but in an efficient, well-designed way that can allow retailers to succeed and not struggled during the summer because there’s no people and struggle during spring training because there’s not enough parking,” Unger said.

Sophia Kobs, owner of the Piece & Story vintage shop, said she supported the project for that reason, though she understood why others in the area had concerns with how Southbridge Two would affect their businesses.

Kobs also said she was supportive of the new pedestrian connections between 5th and 6th Avenues that would increase pedestrian flow between the streets – something she said is lacking today.

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