Papago Marketplace

A rendering of the outdoor plaza planned for Papago Marketplace that could be used to host weekend community events.

The days are numbered for the dilapidated, yet memorable pueblo-style buildings that make up the old Papago Plaza as a local developer prepares to demolish the structures to make way for a new mixed-use development.

Pivot Development President Lee Mashburn, who has owned the property since 2015, said demolition should begin at some point in September with construction on the first phase slated to start in January 2020.

The first phase of Papago Marketplace, which will go before the development review board on September 5, will include three commercial buildings and a four-story parking garage, according to city records.

The project will also include a 274-unit high-end apartment complex from Alliance Residential and a Springhill Suites by Marriott hotel.

The new Papago Marketplace was influenced by concerns of neighbors, and the developer ultimately added more open space to the project and increased the amount of retail space in response to those concerns.

Some residents said plans contained too much residential and not enough retail on the property at community meetings held earlier this year. The City Council required those meetings as a condition of approval for the rezoning of the property requested by the developer.

“Based on what we heard (from the City Council), we looked at a larger and much more expanded public open space for the project,” architect Jeff Brand told the Progress in March.

Brand is an architect with Nelsen Partners, which also designed Kierland Commons and Scottsdale Quarter.

Mashburn said that in addition to the community meetings, he attended a lot of one-on-one meetings with residents and the conversations involved a lot of “give and take.”

“We’re building something that the community can appreciate,” Mashburn said.

Resident Andrea Alley, one of the residents who met with Mashburn and pushed for more public input, said she was pleased with the developer’s willingness to work with neighbors.

“It’s been a very refreshing experience for somebody from the resident side (to see) just how much they’re willing to be open and available to those of us who live nearby with our concerns and then they’re willing to address them or find ways to compromise,” Alley told the Progress in March.

In addition to building something that would benefit the community, Mashburn admitted he wants the new Papago to be a top-notch project for more selfish reasons.

“It’s sort of a legacy for me, right?” Mashburn said. “I am sort of at the end of my development career, and I want it to be a really great project personally for selfish reasons.”

This is not the first time Mashburn has attempted to build a significant project on prime real estate in Scottsdale.

Mashburn, who has developed traditional strip centers and shopping centers throughout his career, was one of the original developers behind what is now Scottsdale Waterfront.

Starting in the mid-1990s, he and a partner began amassing parcels in that area to the south of Scottsdale Fashion Square with plans to redevelop the land.

However, after years of work, the duo’s relationship with financial backer Starwood Capital Group fell apart and Starwood bought them out in 1999, according to reports in East Valley Tribune.

Starwood then sold the land to another developer the next year.

Papago offers Mashburn a second chance of sorts to build a legacy project.

The new development will replace the crumbling Papago Plaza with restaurants, retail, a hotel and apartments.

It will also include a grocery store — something residents in the neighborhood have been asking for for years.

Rumors had swirled in that the location would house an Aldi after renderings associated with the infill project featured the company’s logo.

Aldi, an Illinois-based discount grocer with roots in Germany, was expected to open its first Arizona stores earlier this year but those plans have been delayed, according to Winsight Grocery Business magazine.

Winsight reported that in 2017 Aldi purchased land in Goodyear, Ariz. for a distribution center.

Mashburn would not confirm what store would be occupying the grocery space, citing ongoing negotiations with multiple chains, though he did say the eventual tenant would be a boutique-style grocer.

The Aldi speculation irked some residents who attended community meetings on the project earlier this year and voiced a desire for larger grocery store or a chain that is more well-known locally.

Mashburn said he heard those comments loud and clear and made multiple attempts to attract both Sprouts and Trader Joe’s — two chains that residents asked for.

However, Sprouts was not interested because Papago Plaza is located too close to another Sprouts location at Miller and Camelback Roads per the grocer’s company policy on new locations, Mashburn said.

Trader Joe’s representatives also toured the property a number of times but were not interested.

“We showed them the site at least five times and got five no's, so I finally heard the message,” Mashburn said of Trader Joe’s.

Mashburn also said large grocers are not realistic for this type of project because they would “take over the site” from a planning and parking perspective.

Though Mashburn is remaining mum on the specifics of some tenants, he did reveal that Starbucks will occupy high-profile space on the southwest corner of McDowell and Scottsdale Roads.

Wells Fargo, which is currently in a building on the corner, will be sticking around and relocate to a new building further south on the property. 

The development will include additional boutique retail and restaurant space as well as a large orchard-style plaza that will serve as a gathering area with seating and shade.

Mashburn said he would like to organize restaurants around the plaza and use the space for weekend community events.

“This is such a special site that it needed something special,” Mashburn said.