The large development planned by Nationwide Realty Investors, the real estate development arm of Nationwide Mutual Insurance Company, just north of the Loop 101 along Hayden Road in Scottsdale now has a name – Cavasson.
The company released the name on Nov. 1 along with some details of the development, which is planned to open its first phase in 2020.
The deal the city made to secure the project – which will include significant infrastructure investments by Nationwide along with a potential $21-million rebate from the city – became a lightning rod for Scottsdale City Council candidates during this election season.
If the word Cavasson does not sound familiar to you, you’re not alone: Nationwide created the name out of whole cloth as a starting point for its branding of the forthcoming 134-acre mixed-use development.
Similar to its Rivulon project in Chandler, Nationwide wanted a name without previous connotations around which it could fashion its brand.
“Our marketing team was looking at Western-themed things just for inspiration,” said Brian J. Ellis, president/COO of Nationwide Realty Investors. “What we want Cavasson to be is this best-in-class mixed-use project in north Scottsdale. When you hear that name, when you think about it, we don’t want there to be any confusion. We want it to be this place.”
The name is partly inspired by the similarly-spelled “cavesson,” a type of horse bridle, and is meant to evoke images of the west.
A bulk of the office space in the new development will sit along the frontage with the Loop 101, including a 460,000-square-foot building that will house Nationwide Insurance’s regional headquarters, which is currently in Scottsdale split between Gainey Ranch Corporate Center – which Nationwide Realty Investors owns – and Pima Center.
That building will comprise the project’s first phase, which Nationwide anticipates will be completed near the end of 2020.
It will also include a 1,600-room multi-family development in the center of the project and a parking garage that will serve office workers during weekdays and the residential, retail and hotel customers on nights and weekends.
Ellis said Nationwide wanted to create “a place where people, if they choose, can walk to work in this great pedestrian environment.”
The second phase of the project will feature at least 207,000 square feet of office space and a 78-room hotel, according to a development agreement with the city.
The third phase will include at least 192,000 square feet and a 78-room hotel.
Nationwide has not determined what types of hotels it will put in the project, but Ellis said they are currently in talks with many major hotel brands.
When complete, the project will include additional lower-profile office space on the northern backside of the development, along with retail, restaurants and two hotels along Hayden Road.
As part of a development agreement with the city, Nationwide has committed to building approximately $30 million worth of infrastructure improvements, including storm drainage and power line corridor improvements requested by the city.
Ellis said Nationwide will also pay to widen Hayden Road adjacent to Cavasson and pay to construct a portion of Miller Road north of Loop 101 on the west side of the development.
Miller Road will eventually extend farther south past Loop 101 with the state paying to construct a tunnel under the freeway, Ellis said.
If the development meets stipulations within that agreement – including minimum square footage and payroll requirements – it is eligible for up to $21.9 million in reimbursements from the city for those improvements.
Whether or not developers in Scottsdale are paying their fair share of infrastructure improvements to support an influx of new people in previously undeveloped areas was a hot topic of discussion throughout the City Council election race this year.
When asked how she would deal with Scottsdale’s $800 million in unfunded capital improvement needs, candidate Solange Whitehead pointed to the Nationwide deal as an example of Scottsdale spending money it did not have.
Incumbent Linda Milhaven defended the rebates included in the development deal at the forum. She said that the amount Nationwide will pay for infrastructure is more than the amount of the rebate.
The maximum rebate amount is $21.9 million and city staff estimated Nationwide will pay for $30 million in infrastructure.
The City Council approved the development agreement on a 5-2 vote, with Councilmembers David Smith and Kathy Littlefield dissenting, on June 12.
In a City Council memo in which staff recommended approval, staff cited calculations by Applied Economics that estimated the project would generate $24.15 million in sales, lodging and property tax revenue over the course of the 20-year agreement if minimum requirements are met.
That is $2.25 million more than the city's maximum reimbursement. Ellis characterized Nationwide’s commitment to invest in infrastructure as “a bet on ourselves.”
“We have an opportunity to recover some that ($30 million) investment for public infrastructure, but we only do that if we achieve the milestones, achieve the objectives, that were set forth for us by the leaders in Scottsdale,” Ellis said.
Ellis said that Nationwide has made it a practice to invest in communities where it has a large concentration of employees.
“We want to be invested,” Ellis said. “We feel like our associates are very engaged in the Scottsdale community on volunteer level and just in general. They’re very much embedded in the community so that’s one of the reasons we didn’t want to move.”
Mayor Jim Lane said, "It is a way to develop that land in a way Scottsdale wants it to be." Acknowledging Nationwide's search could have taken it anywhere, he added, "We are very excited they decided to stay here."
Upon completion of the first phase of construction, Nationwide Insurance will relocate all employees from its regional headquarters in Scottsdale to Cavasson.
Nationwide had outgrown its current headquarters at Gainey Ranch Corporate Center and had been housing some employees at Pima Center as well.
When asked why Nationwide opted to build its new regional headquarters – and the mixed-use complex that goes with it – in Scottsdale, Ellis cited a good working relationship with public officials in the city and the company’s history in Scottsdale.
“It started as Scottsdale Insurance company, which is now referred to as Nationwide,” Ellis said. “It grew up (in Scottsdale). It was a small, niche Nationwide affiliate in the 1980s and it grew from basically a startup in Scottsdale.”
Nationwide Insurance first moved into the Gainey Ranch location in 1990 and, though Ellis said it is still an attractive property, he said the company had outgrown it and expressed a desire to create a world-class facility where all employees could work in one location.
What's in store for Gainey Ranch?
That is unclear. Ellis said he is confident new users will not be hard to come by because of the quality of the structure and nearby amenities, like a golf course and mountain views. He said Nationwide could sell Gainey Ranch or continue to lease it.