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09/19/09
Scottsdale explores ways to help hard-hit southern area
Filed under: General, Real Estate
Posted by: Lillian Wong @ 6:08 pm

Scottsdale is looking at ways to help the southern part of the city bounce back from the recession’s impact on car dealerships, retail and real estate.

 

But don’t expect Scottsdale Mayor Jim Lane to get behind special tax breaks or subsidies as part of that effort.

 

Lane and some members of the Scottsdale City Council oppose incentives and breaks for specific businesses.

 

“I’m not an advocate of it,” said Lane.

 

The city can look at zoning and invest in infrastructure such as roads, but it is less likely to roll out a new set of tax breaks and subsidies. The mayor said the legal battle over the city of Phoenix’s $97 million subsidy for parking at the CityNorth development next to Desert Ridge Marketplace could put an end to many government incentives.

 

South Scottsdale has been hit hard by the recession with several car dealerships on McDowell Road closed and others struggling. Areas near Scottsdale and McDowell roads also suffer from empty retail space and redevelopment plans that haven’t panned out.

 

The city has put together a McDowell Road/South Scottsdale Task Force to formulate ideas to help the corridor. The group had its first meeting last month and will send recommendations to the city early next year.

 

Tom Sadvary, chair of the task force and CEO of Scottsdale Healthcare, said Scottsdale, like other cities, is facing financial challenges that could preclude municipal financial assistance for businesses in South Scottsdale.

 

Sadvary said his task force is looking at planning and zoning as possible ways to help spur economic development, but he acknowledged revitalization efforts likely will be more market driven.

 

“It’s going to need a shot in the arm,” he said.

 

Rick Kidder, CEO of the Scottsdale Area Chamber of Commerce, said the city is facing budget constraints and political opposition to subsidies, meaning a good portion of South Scottsdale’s redevelopment will be dependent on a rebound in real estate, consumer and business spending and credit markets.

 

“It’s going to need help probably more quickly than the market by itself will allow happen,” Kidder said.

 

He wants the task force and city to keep the door open to a number of options that could help the area.

 

“I haven’t seen a tremendous appetite at City Hall to do something dramatic,” Kidder said.

 

The mayor said he’s optimistic about Arizona State University’s SkySong office park and technology center fostering companies that may grow and locate operations elsewhere in south Scottsdale. He’d also like to see the area become home to more solar energy and biomedical companies to replace the struggling car dealerships and retail.

 

“We’re trying to connect a bunch of dots,” Lane said.

 

The mayor doesn’t hold much hope in car dealerships — which have been hit by the pullback in consumer spending save a brief respite brought by the federal “Cash for Clunkers” rebate program — bouncing back anytime soon.

 

One idea floating around is realigning McDowell Road between Papago Park and Scottsdale Road slightly to the north perhaps to create a new commercial corridor and better leverage commercial parcels in the area.

 

Lane and Kidder both are open to looking at that proposal. Scottsdale turned away plans by Westgate City Center developer Steve Ellman to build a hockey arena and then big-box stores, including Wal-Mart, at the former Los Arcos Mall site. The ASU Foundation bought the Los Arcos site from Ellman in 2005 for $41.5 million and sold it the city, which leases it to ASU for SkySong. Lane was not in favor of that deal, which was completed under former Mayor Mary Manross.

 

SkySong hosts some small technology and health-related companies as well as operations for Ticketmaster. SkySong officials say 300,000 square feet of space have been developed at the site, which opened in 2008 and was envisioned to encompass 1.2 million square feet. About 700 workers are employed there though the center has not had the desired spillover benefits to South Scottsdale.

Lane said that while South Scottsdale has its challenges, “the area itself is not outlandishly depressed.”

 

Get Connected

ASU SkySong: www.skysongcenter.com

Scottsdale Area Chamber of Commerce: www.scottsdalechamber.com

Phoenix Business Journal - by Mike Sunnucks Friday, September 18, 2009



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