Southbridge Two developer Carter Unger

Southbridge Two developer Carter Unger dropped a legal appeal challenging the validity of the referendum to put the project before Scottsdale voters. 

Southbridge Two developer Carter Unger has dropped plans to appeal a Maricopa County judge’s decision upholding the referendum to put the downtown Scottsdale development before voters.

But it is still unlikely the issue will actually make it to the ballot in November as Unger has asked the City Council to repeal its initial approval of the project, rendering a referendum moot.

“We have made the decision to not pursue further legal actions. Please feel free to (schedule) us for the next available date that works for you,” Unger wrote to the City Council and staff on March 18.

The 10-acre project was approved by the City Council on Dec. 4 and included a redevelopment of retail sites along the downtown 5th Avenue shopping district and a 150-foot hotel and 128-foot office building at Scottsdale Road and 6th Avenue and condos as high as 139 feet along the canal.

The referendum was sought by the Committee for the Preservation of Old Town Scottsdale, a PAC started by two neighboring property owners to upend Council’s approval.

Unger challenged the validity of a substantial portion of those signatures in court, but Judge Timothy Thomason decided in favor of the Old Town PAC.

Unger initially told the Progress he planned to appeal the ruling and sent an email to the City Council on March 16 with the same message.

City Clerk Carolyn Jagger confirmed - if the City Council repealed the decision, it would negate the referendum, because there would be nothing to vote on.

Old Town PAC Chair Janet Wilson said she thinks this decision would elicit a backlash from Scottsdale residents.

“If the City Council does away with the referendum, I think they’re going to hear from a lot of the citizens, because I think they want to send a message to the council: don’t pass any more of these buildings that are so high,” Wilson said.

Unger previously told the Progress if the lawsuit failed, he would likely still move forward with a project on the land under its original zoning, which includes substantially lower height allowances than those approved by the Council on Dec. 4.

This project could include four-story apartments with limited retail space and a small hotel on the site of the Rose Garden parking lot the city agreed to sell to Unger in December.

“Construction will still happen now, only without all the public (benefit) and protections,” Unger told the Progress, citing guarantees included in the Dec. 4 agreement with the city to include public space and other protections like keeping two lanes of traffic open during construction.

Unger has long argued his tenants in the area suffer high turnover due to the slow non-tourism seasons and the Southbridge Two project would inject much-needed year-round traffic into the 5th Avenue area via the office tower, residences and hotel.

But Old Town PAC members and their supporters argued the increased height and densities Southbridge Two brought with it would destroy the charm of 5th Avenue that drew in those tourists in the first place, harming existing businesses in the process.

Wilson, who owns several properties in the area, said it was Unger’s right as a property owner to move forward with an alternative project.

“Like we’ve said all along, we’re not against redevelopment; it’s just the height and the mass of the whole project,” Wilson said.