Southbridge Two redevelopment

The proposed Southbridge Two redevelopment along 5th Avenue in downtown Scottsdale will go before the City Council on Dec. 4.

Charming pieces of the city’s history or crumbling relics in dire need of repair?

That is the question the Scottsdale City Council will answer on Dec. 4 when it considers the sprawling Southbridge Two project, which would reshape a significant portion of downtown Scottsdale’s 5th Avenue shopping district.

The Council will consider approving a development deal, city land sale and zoning changes to make way for the proposed 10-acre redevelopment, which would transform existing single-story storefronts and a city-owned parking lot into a mix of office, condominium, hotel and new retail space.

The project includes a 150-foot office building near 6th Avenue and Scottsdale Road and a similarly-tall condo building along the canal and other buildings that range in height from 48 to 66 feet.

Developer Carter Unger has also pitched space for a new urban grocer as well as pedestrian and vehicular connections between 5th and 6th Avenues.

Unger said the project would breathe new life into 5th Avenue by bringing in year-round shoppers in the form of tenants and office workers and quality buildings in place of aging ones with failing infrastructure.

However, others – including a new political action committee formed by some neighboring property owners – argue that the height, density and scope of Unger’s development would damage the character 5th Avenue is known for and harm their properties and tenants.

Southbridge Two has become something of a referendum on the city policy, approved unanimously by City Council in 2018, to allow heights up to 150 feet in certain parts of downtown under specific conditions.

Backlash following approval of other 150-foot projects like the Marquee office building and Museum Square has made support at the Council for Unger’s project uncertain.

Councilwoman Solange Whitehead – who was not on the Council when the height rule passed in 2018 – said she would likely oppose Southbridge Two but met with Unger’s team and a collection of supporters and opponents on Nov. 26 anyway.

The meeting did not change her mind.

“The proposed South Bridge (Two) is oversized for the location,” Whitehead said. “It is not in the best interest of Scottsdale to amend our very high design standards to make it fit.”

Unger acknowledged that not everyone in the city will see eye to eye on whether or not additional height and density is appropriate for the downtown area.

But he said the project has been modified in recent weeks to address some community concerns, including adding a stepback to the 150-foot residential building along the canal.

That stepack would still be a deviation from the city’s standard stepback requirements and did not satisfy Whitehead.

“Instead, the project should be properly sized to meet the City’s code such as set backs which give Scottsdale its elegant look and feel,” Whitehead said.

Councilmember Virginia Korte spoke more favorably of Southbridge Two, saying:

 “I really think that this project is that balance between the need for economic development and maintaining our traditional values.”

Korte said those traditional values included respecting the Old Town character by adhering to high-quality design and architecture standards while also creating a vibrant downtown in line with the city’s General Plan and Old Town Character guidelines.

Councilman Guy Phillips does not share Korte’s point of view, arguing that “There are those who have been trying for years to replace our downtown tourism business with high rise business and multi family housing. They look at this as a more stable form of taxes for the city.”

“Well I say to hell with that,” Phillips said.

Korte said she heard similar arguments about height and density and traffic concerns when the Scottsdale Waterfront was built a decade ago.

“Can you imagine if Scottsdale Waterfront wasn’t built?” Korte said. “We wouldn’t have Canal Convergence and we wouldn’t have had a huge presence in the Super Bowl several years ago – it has been a magnet for development and vitality along our canal and Stetson and 5th Avenue.”

The recent opposition, much of which has been driven by the new Committee for the Preservation of Old Town Scottsdale political action committee and former Councilman David Ortega, includes concerns over increased height and density downtown and the effect years of construction would have on other 5th Avenue businesses.

Ortega also voiced concerns that some underground parking in the project will encroach on the city’s right of way, though Unger said those concerns were misleading and overblown.

Any encroachments would have to be approved by city staff.

The Old Town PAC is chaired by Janet Wilson and Dewey Schade, who both own properties near the proposed Southbridge Two development.

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

The PAC specifically called out Southbridge Two in the letter, stating it is “not compatible with the surrounding shops and businesses.”

Increased car traffic – and where those cars would park – is also a concern.

The development is expected to increase traffic from 3,360 weekday daily trips to 8,414 weekday daily trips, according to city documents.

According to city documents, the developer will be responsible for some traffic improvements as part of the development deal. Those include improvements to the intersection at Stetson Drive and Scottsdale Road and a new road between 5th and 6th Avenues.

Additionally, the developer is responsible for other infrastructure improvements, including upsizing several wastewater service lines in the area and improvements along the canal bank.

Ortega also criticized the city’s decision to sell its Rose Garden parking lot to Unger for a residential building with underground parking.

The City Council will consider selling the lot the Unger for $8 million Dec. 4.

Wilson said she is worried about how the phased construction, which would likely last years, would affect her properties and tenants.

Unger acknowledged there will be some pain caused by construction but committed to working with the city to mitigate issues.

The city has also acknowledged the construction will impact local businesses

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.

Still, Unger’s team at the Nov. 26 presented a map showing that more property owners in the area support the project than oppose it, said Andrea Alley, a Scottsdale resident and activist who supports the project and attended the meeting.

Unger said his team would do its best to find new locations for businesses displaced during construction.

The debate raging over Southbridge ultimately comes back to a more philosophical argument over the future of downtown Scottsdale – and whether that future includes new tall buildings or a preservation of the existing look of the area.

Unger said keeping the area as it is isn’t an option for many of his tenants, citing high turnover at his properties.

However, opponents said that new development would come at the cost of the 5th Avenues existing character.

“Redevelopment is good downtown as long as it enhances tourism, not destroy it,” Phillips said.