An Independent examination of Museum Square: A proposed vision for Old Town emerges

VISION: What has been coined the Museum Square project is beginning to pick up steam as municipal deliberations are approaching. (Submitted graphic)

Graphics, photos, maps and artist renderings of Arizona architecture, Old Town Scottsdale and development plans cover nearly ever inch of wall in a secluded room of the Swaback architectural firm.

Inside the room cluttered with a barrage of images focused on one single project, architect Jeff Denzak sits at the head of a large table as he explains plans and inspiration behind a proposed development in Old Town Scottsdale, which is setting out to reshape a cornerstone of the landmark area.

Throughout the explanation, he occasionally stands up to pull out a map or graphic from around the room as an example to strengthen a point or provide context to the conversation from the room.

Mr. Denzak is joined by Bill Borders, president of ARC Construction, while public relations chieftain Jason Rose and two members of his firm sit quietly across the table.

Together, Mr. Denzak and Mr. Borders paint the picture of Museum Square, a proposal that has been in the works for at least two years in the area of north Marshall Way and east Second Street, which sits atop a 7.34-acre site.

Plans include a hotel with structures stretching 150 feet high — The Arizonan — accompanied by 190 rooms and 300-plus residential housing units divided up into four separate buildings. The residential component is made up of both an apartment complex and condominium units.

Museum Square’s proposal is nestled between three Old Town staples: the Scottsdale Artists School, Scottsdale’s Museum of the West and Stagebrush Theatre.

All entities are said to be in support of the project, with plans to incorporate a Museum of the West expansion to accommodate new collections, and mutual support for envisioned improvements to the theater.

In addition, the submitted Museum Square plans will be taking bare or underutilized space and creating an open-space park — the “square” — for outdoor use and activities.

In February 2018, Scottsdale City Council approved 7-0 a purchase and sale agreement for $27.75 million for the Loloma Lands, the parcels west of Marshall Way, which were previously owned by the municipality.

The purchaser’s general partner is the Macdonald Development Corp., a private family-owned real estate development company based in Vancouver, Canada.

The team behind Museum Square is comprised of Scottsdale-based Swaback pllc; John Berry of Berry Riddell LLC, who is serving as the project’s land use attorney; and Jason Rose of Rose Moser Allyn.

However, as the project has progressed through the planning process, questions from the community have arisen surrounding height, use of open space and concerns about parking, among other aspects.

The project hasn’t yet made its way through Scottsdale’s Planning Commission or City Council review for approval, but a community meeting was hosted in March for local residents to get acquainted with the plans.

Museum Square officials say they hope to get before the city this spring to begin the approval process.

The area commonly referred to as the Loloma Transit Center, on the corner of Marshall Way and Second Street in Old Town Scottsdale, would be replaced with the Museum Square project if it is approved. (Independent Newsmedia/Arianna Grainey)

A project years in the making

The concept of Museum Square was birthed from developers seeking a public-private project, Mr. Borders says.

Mr. Borders is a general contractor, while Rob Macdonald, of the Macdonald Development Corp. is the project’s general partner.

When the Arizona School of Real Estate’s former building went up for sale, Mr. Borders says they bought the property with the intent of extending their lease. Ultimately, the real estate school moved to a spot near Loop 101 on Salt River Maricopa-Pima Indian Community land to better suit their needs.

“We started looking — do we want to redo the building?” Mr. Borders recalled of his thinking at the time.

Bill Borders

“We were looking at space that was just dormant that the city had. We were the adjacent owners so we could go to the city to try and make a deal with them. That’s how this whole thing started off in this room a couple of years ago.”

Mr. Borders says all parties involved wanted to continue down a similar path.

“That was kind of the idea, to get with the city to do a phenomenal private-public partnership, which is why we have this over-an-acre of open space,” Mr. Borders said. “It evolved with Swaback.”

Mr. Denzak says his firm was attracted to the project based on the amount of detail and commitment ARC Construction and Macdonald had invested.

“We were very excited because of their commitment to the project,” Mr. Denzak said.

“One of the things that we have found through the years with the City of Scottsdale and other municipalities is sometimes when you go through the rezoning process, the actual amount of information and detail is pretty minimal because it’s rezoning. But to Rob’s credit and Bill’s credit, over the last two years we’ve taken a great amount of design advancement — that’s a credit to the developer because they understand the value of taking it to that level.”

Mr. Denzak says ARC and Macdonald have utilized consultants and experts in a number of areas — including mechanical engineering, structural engineering, hospitality and residential — to give confidence to the project.

“With a project like this, that becomes more important as people want to know room sizes, how much parking, and those things,” he said. “Those are some things we tried to identify up-front.”

Mr. Denzak points to Arizona’s history, especially renowned architects Frank Lloyd Wright, Ralph Haver, Lloyd Kiva and Charles Loloma, as inspirations for the project’s design. Additionally, elements of Scottsdale’s red brick and the tones and materials used in the area are incorporated in his design.

Jeff Denzak

From an architectural standpoint, Mr. Denzak thinks of the building design as “beautiful signature architecture,” noting that he’s heard people express their disappointment that the project doesn’t have a specific genre, such as Spanish Colonial.

“That’s not authentic to what we are, we’ve focused on creating something that’s authentic and appropriate to Scottsdale, the desert and things of that nature,” Mr. Denzak said. “We’ve also committed to the city that we’re not coming in here and doing stucco boxes with little punched windows.”

Ultimately, the architect says he thinks this can be a “beautiful, wonderful project.” Utilizing the term “urban integration,” Mr. Denzak points to pedestrian connectivity between the different buildings and areas of the 7-acre project.

“In our minds, in terms of good urban design, someone could be out in that park on a Tuesday morning, have coffee and it would feel great, it would be comfortable,” he explained. “But on a Saturday, there could be an event with a couple hundred people and it would still feel great.”

Mr. Rose says Museum Square has substantially more open space compared to the Waterfront development.

“Do people really think not selling the land for $28 million, activating a tumble weed cemetery and creating an energy for Main Street and Museum of the West is a good idea?” he asked.

“I’ve been in Scottsdale for 20 years now; officing, Marshall Way is a hollow shell of its former self. That can happen in a challenged, art-selling environment. I think that’s a reason Scottsdale Gallery Association endorsed this. There’s always people who will be critical of height — five stories, three stories, 150 feet — that’s the answer to it, it’s downtown, it’s Old Town, height is not for everywhere.”

Other supporters of the project, according to Mr. Rose, includes the Scottsdale Fire Fighters Association, Larson Art Gallery, Legacy Art Gallery, Museum of the West, Stagebrush Theater, Scottsdale Artists School, HonorHealth and a unanimous City Council.

“All of these people have come together to say ‘go,’” Mr. Rose proclaims.

One popular question amongst community members is how the $27 million paid to the city will be used shall the deal go through.

Mr. Borders says they are advocating that the money stays close.

“If the deal goes through some proceeds are going to go to the museum, which we love,” he said. “We’re advocating the money stay close — it’s the city’s money, so if you want to replace an exit up on north Scottsdale … but we’re happy to see the museum getting a face-lift and Stagebrush getting a face-lift. We want the area to be gorgeous, we want it to be programmed right, and we want the landscaping to be exceptional.”

The Museum Square proposal, if approved, will be intimately embedded with the Scottsdale Artists School, top left, Scottsdale’s Museum of the West, pictured on right, and Stagebrush Theatre, pictured bottom left. (Independent Newsmedia/Arianna Grainey)

An opportunity zone emerges

Councilwoman Solange Whitehead was one of the people behind organizing a community meeting earlier this spring to introduce Museum Square to the community.

She says during her campaign last year, she heard many residents say they were unsatisfied in the public outreach process of development projects, and she thought this could help alleviate that concern on a major project.

Solange Whitehead

“Museum Square is a very large change to that area, it’s not necessarily bad, but it’s a big change. They wanted to have more input before it went to Planning Commission, so we quickly put together the meeting,” she said, stating that other councilmembers supported and participated in the community outreach as well.

Ms. Whitehead says well over 100 people attended the meeting, comprised of both supporters and detractors of the project.

“I was really looking for citizen input more than business input,” she said, explaining how she was asking people what they liked about the project and what they wanted to see changed.

“It started a conversation, and there’s a lot of people involved in that conversation now.”

Ms. Whitehead says she doesn’t have an opinion on the project yet, as she’s waiting to see what changes are made in the municipal approval process as the development makes its way to Scottsdale City Council for final approval.

“I would like it to be special,” she said. “I don’t have an opinion yet, I’m kind of waiting to see what changes they make. I’d like the project to be considered on its own merit.”

Ms. Whitehead points to the reality of The Tax Cuts and Jobs Act, first added to the tax code in December 2017.

The federal act kicked-off the incorporation of Opportunity Zones, an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.

Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.

According to Ms. Whitehead, the Museum Square project is in one of these designated zones, which may effect what the developer is proposing for the project.

“Does the Opportunity Zone designation create an incentive for a developer — pressured by project investors — to build apartments vs. condominiums? I believe the tax savings are only realized after a ownership period of 10 years. This is not possible with a condo project because the units are sold,” she said.

“Both Museum Square and another large proposed development — Carter Unger — are located within Opportunity Zones. We — the City Council — must find a way to ensure that if we approve ‘luxury condominiums,’ that is what is built. Our ability to do that will influence my support of the project.”

Scottsdale’s Director of Planning and Development Services Randy Grant confirmed that some areas of Old Town Scottsdale are designated as Opportunity Zones. A map shows:

  • McDowell Road at Scottsdale Road, north to Thomas Road and east to 64th Street;
  • Osborn Road north to Camelback Road, encompassing portions of Goldwater Boulevard and Drinkwater Boulevard; and
  • A large portion of south Scottsdale and the Salt River Pima Maricopa Indian Community, spanning east from Pima Road from south of McDowell Road up past Chaparral Road.

Ultimately, Ms. Whitehead says areas of interest to her includes ensuring a high level of green construction standards such as solar, shade and energy efficient.

“The tighter the building the less it adds to Scottsdale’s urban heat island,” she said. “The architects have been working with city staff to raise the bar in this area.”

An artist’s rendering shows the proposed plans of Museum Square, a 7.34-acre site comprised of a hotel, residential units and open space in Old Town Scottsdale. (Submitted graphic)

A vision for Scottsdale

Scottsdale resident AJ Germek has some questions when it comes to Museum Square’s project — primarily building height and parking.

AJ Germek

“Once you grant variances in a specific area or even a large area, you have a difficult time denying those heights to other developers,” Mr. Germek said of the 150-foot height request.

“When you push back on height of the hotel, the answer was, ‘oh they have hotels the same height, they’re just half a mile away.’ That’s one problem, in that Scottsdale for the most part, has put out ordinances that kept things to a lower level.”

The other issue that bubbled to the surface when reviewing plan documents was parking, Mr. Germek says.

“Parking is not a money maker for the developer,” he explained.
“They look for what’s the least amount of parking they can provide following an ordinance or can make an argument they took care of parking. There will be more visitors and employees or various shops and restaurants — they need to park somewhere.”

Similar to Ms. Whitehead, the local resident says looking at the environmental quality of the building is something for those involved to look at.

“Do we have green roofs? Do we have certain kinds of windows? Do we have solar panels?” he asked.

“That gets us away from this tooth and nail issue of height and parking — but environment hasn’t been pushed hard lately. We have open land and we know that’s environmentally friendly, what if we turn our environmental thoughts to the building itself. Can we push those issues in use of water, electricity, what sort of air quality is added to or removed from these buildings? I think the idea of environmental standards for development represents a new vector to argue the issue.”

Mr. Germek points to developments in other parts of the country — Columbus, Ohio, San Francisco, East Baltimore and more — as examples of the municipality working closely with the public and private stakeholders to achieve inviting and commercially feasible projects.

“I’m not adverse to development at all, I am adverse to throwing square footage and height and calling it luster because we painted a picture of a cowboy on the side,” he explained.

“Over the course of time, we lost the vision, if we ever had a vision of what Scottsdale was, it’s gone away in terms of the general public and their idea of what Scottsdale is.”

Northeast Valley News Editor Melissa Rosequist can be e-mailed at mrosequist@newszap.com or can be followed on Twitter at twitter.com/mrosequist_.

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