The Southbridge

The Southbridge 2 proposal has become a lightning rod in Scottsdale political circles as a political action committee tries to up-end City Council's approval by trying to get it on the November ballot next year. (Progress file photo)

Following Scottsdale City Council’s narrow approval of the Southbridge Two redevelopment on Dec. 4, a local political action committee made good on its threat to continue fighting the project.

The Committee for the Preservation of Old Town Scottsdale submitted paperwork to the city on Dec. 5 to begin the referendum process and potentially put the issue before Scottsdale voters.

The developer fired back with his own proposal if the PAC drops its fight.

Members of the PAC argued the council majority did not adequately consider the negative affects the new development would have on existing shop owners in the area.

“We are disappointed with Mayor Lane and Councilwoman Klapp’s vote and their bizarre reasoning for supporting such an inappropriate project that will kill off Old Town,” said Lamar Whitmer, a longtime Scottsdale political consultant working with the group.

Property owner Janet Wilson, who chairs the PAC, said she thinks the project is too tall and will damage 5th Avenues existing character, driving away longtime tourists and putting existing retailers out of business. 

“I guess the council didn’t take into effect how many lives they are destroying,” Wilson said.

Southbridge Two developer Carter Unger, president of Springcreek Development, said he believes Wilson’s concerns are genuine but the argument tourism will be affected negatively “is an out-of-date model.” 

He said other members of the Old Town PAC are motivated by political aspirations rather than concern for shop owners.

“People are leaving the downtown to go seek vibrant live-work-play atmosphere, and we’re not protecting anybody by just staying with same,” Unger said. “We will have continual overturn (and) places will continue to close down.”

Unger said he was sympathetic to concerns about how the project would effect existing retailers and was even willing to match the Old Town PAC’s current contribution total in exchange for dropping the referendum, with the money going towards helping local businesses.

“If the PAC drops its opposition, I will match its contributions and put it into an escrow account they manage to mitigate the impact on local businesses,” Unger said. “We can do more when we work together.”

The PAC, formed just weeks before the Dec. 4 city council vote, filed paperwork with the city stating its intention to challenge the council’s approval in the form of a citizen referendum.

The referendum would ask voters to reconsider council’s decision to rezone nearly 10 acres of land in and around the 5th Avenue shopping district to make way for the development, which includes a 150-foot office building and residential buildings over 130 feet along the canal.

The development will keep a lower-profile retail presence adjacent to the street on 5th Avenue and Unger said he plans to keep the same mix of unique local retailers in the area, not bring in large chains.

State law requires the PAC must collect 11,930 valid signatures by Jan. 3 to put the matter before Scottsdale voters, a city spokesperson said.

Arizona state law allows city residents to file referendum petitions challenging city council zoning decisions within 30 days of the action.

Whitmer said the Old Town Pac would be conducting outreach through its website and social media accounts and at a physical office it opened up near Fifth Avenue and Marshall Way.

Unger, who set up the Protecting Scottsdale’s Future PAC to oppose the referendum, said his project has the support of over 50 property owners, businesses and associations in the area.

He asserted only three property owners, who own six total properties, oppose Southbridge Two.

At the core of the debate is a philosophical split over what the future of Old Town would look like and disagreements over the economic viability of the existing 5th Avenue district.

Both Unger and Wilson said they had no personal issues with each other but acknowledged they will likely never agree on how much height or density is appropriate for Old Town.

Unger said the increased heights and mix of uses brought by his project would be the shot in the arm area retailers need, stating his tenants suffer during the tourism off-season.

Wilson, though, argued heights at Southbridge Two – with buildings reaching up to 150 feet – are too tall and would erase the 5th Avenue character making up much of downtown Scottsdale - a tourism destination in the first place.

Wilson said the construction on the project – which could take 10 years to reach full build-out – will also harm existing businesses and make it difficult for property owners like her to keep tenants who don’t want to deal with construction.

“How are we supposed to write leases? How are we supposed to do anything?” Wilson said.

Unger, who said it would be two years before the first construction begins, acknowledged there will be some pain involved during construction of the project, but said the city council approval included commitments his team made to the city to mitigate issues.

It included commitments to maintain two-way access to all businesses in the area during construction and keeping both lanes of 5th Avenue open.

Wilson was dubious.

“Where are the cranes going to go?” Wilson said.

Unger said he will also work with the 70 or so tenants at his properties scheduled to be displaced by construction to find them new locations as development progresses.

He said the phased construction will allow tenants who would like to stay in the area to move to other buildings his company owns when their existing locations are rebuilt. They would then have the opportunity to move back as new buildings are complete.

Whether or not Unger’s argument about the political motivations behind the Old Town PAC is correct, the fight could complicate a 2020 election if it reaches voters.

The local end of the 2020 ballot will already include a mayoral race and several open city council seats.

Both prospective mayoral candidates, Councilmembers Virginia Korte and Suzanne Klapp, voted for Southbridge Two.

So far, five candidates have filed paperwork with the city to run for the three open seats on city council in 2020, with at least two others stating their intention to run publicly.

Unger said he believes opponents are using the Southbridge issue to garner support in the race.

“Now, in my opinion, they’re trying to run a slate of candidates in the next election and they’re trying to make this issue a firestorm to fire up their base like the DDC was in the last election,” Unger said, referencing the successful resident movement to approve Proposition 420, which restricted development on the McDowell Sonoran Preserve.

Wilson did not comment on specific candidates, but she did make connections to Prop 420, arguing her PAC has similar community-wide support.

“We’re very pleased with all the volunteers we have and we’re getting them from all over the city. We’re getting people who want to save the preserve,” Wilson said.

And Wilson confirmed the PAC plans to spend in the 2020 election.

“Big time,” Wilson said.