Future of downtown Scottsdale may be realized through Millennial focus

A welcome sign letting motorists know which way to go upon entering downtown Scottsdale. (Independent Newsmedia/Melissa Fittro)

The Millennial generation is going to be huge and Scottsdale movers and shakers are taking notice.

Downtown Scottsdale is the envy of municipal leaders around the Valley of Sun due to its vibrant entertainment district — and the tax dollar remits generated by those entities — coupled with its quaint Old Town sector anchored by a noteworthy fine art gallery marketplace.

But the wants and desires of the Millennial generation — any American born from 1980 to 2000, according to Time Magazine — may not fit into the package Scottsdale economic development and tourism officials have curated up to this point in time.

Toward the end of 2016, the Downtown Scottsdale Vitality Coalition sprung up with what appears to be a mission to better understand what the future of downtown Scottsdale ought to look like as the economic prowess of the Millennial generation grows.

The old guard of Scottsdale residents are reticent to crown downtown Scottsdale a success due to consternation over the marketplace’s robust nightlife scene.

An internal audit reveals the city of Scottsdale pays $3,198,737 annually in public safety costs — including costs associated with the police and fire departments — to patrol, manage and mitigate issues that may arise in the area.

In 2011, that number equated to $1.2 million, but did not include costs allocated to the Scottsdale Fire Department.

New data shows fire calls to the entertainment district represented 20 percent of the 7,903 calls for service between July 2015 to June 2016 at Fire Station 602 at 7522 E. Indian School Road.

Numbers also show the entertainment district accounts for 25 percent of all police calls for service in Patrol District 2, which has north and south boundaries of Lincoln Drive and Osborn Road and west and east boundaries of 64th Street and Pima Road.

Wayne Ecton

“The reason we organized the coalition was because we want downtown to continue be a success as time goes on,” said Wayne Ecton of the Downtown Vitality Coalition.

“Our focus has been more to try and get the business owners and the people who live downtown to support the changes that are coming. We want to make sure that people who live and are working here become more involved than they have in the past.”

A recent study conducted by Dr. Timothy D. Hogan of Arizona State University — at the request of the Macerich Company — found that the slightly more than one square-mile defined as downtown generates nearly $47 million in tax dollars for the city.

The study, however, was conducted to frame the next possible move at the Scottsdale Fashion Square, which many believe is the straw that stirs the economic drink of downtown Scottsdale.

“I conducted the study as a private consultant for the Macerich Company,” Dr. Hogan told Scottsdale resident Sandy Schenkat in an Jan. 13 e-mail. “As such, I consider my report and all the research materials associated with the study as confidential and the property of my client.”

The details of that report have never been released publicly and a call for comment to Andy Greenwood of Macerich Company was never returned.

Mr. Ecton, who penned a December editorial for the Independent, pulled from the Macerich study to illustrate the dollars and cents generated by downtown Scottsdale and likely the Scottsdale Fashion Square.

“The Fashion Square Mall, it is in the process of thinking of the next generation,” Mr. Ecton said of concerns under the surface of most big-box retailers. “They have started their efforts of doing an update to go through their revolution. Shopping malls aren’t as popular as they used to be — they are concerned.”

The Millennial connection

Economic independence is something young professionals in the Millennial generation are just now starting to realize, Mr. Ecton contends.

“We have to focus on the business owners and the Millennial. Nobody has really been focused on that. We are concerned about the future,” he said. “We know that everything is good now, but we don’t know what the future will hold.”

Mr. Ecton points out there are an estimated 3,300 Scottsdale residents who call the downtown sector home.

“We want to get the attention of those people who are moving in,” he explained. “The younger people don’t think the same way I do.

We need to make sure everyone is aware that things needs to change.”

Barry Graham

Barry Graham, a 32-year-old CPA who calls downtown Scottsdale home, says he is volunteering with the Vitality Coalition to help tap into the Millennial generation descending upon the downtown sector.

“Everything from raising awareness and reaching out to people — just trying to get some enthusiasm for Millennials will do and have done to the downtown,” he said. “It is not anything special, kind of that boots-on-the-ground talking.”

Mr. Graham says engaging with the Millennial generation is about telling the story of downtown Scottsdale.

“Downtown Scottsdale, however you want to define it, is kind of an economic driver for the city,” he pointed out.

“Raising awareness to both those who are already there and those want to be there. I think it is the coalition’s goal to raise awareness of what downtown Scottsdale is and to use that do some good.”

But it’s not all roses in downtown Scottsdale, Mr. Graham points out.

“Challenges downtown are just revitalization for certain areas and we need to make sure we can accommodate the amount of talent that wants to live there,” he said. “We want to give people who live there the best livability.”

The economics of downtown

Danielle Casey, the city’s economic development director, says she believes downtown Scottsdale to be a place at the top of  the list for young professionals looking to be a part of a vibrant and growing community.

Danielle Casey

“We certainly like to think so, as evidenced by the numerous firms that have located and expanded there, such as tech firms originally based out of New York (ZocDoc) and San Francisco (Weebly, Yelp, etc),” she said in response to being asked if downtown Scottsdale is a place Millennials want to be.

“But it is also a place where Millennials want to live and visit and that Baby Boomers are also drawn to. These are of course the two biggest generations out there, and Baby Boomers are migrating back into more urbanized areas for lifestyle and entertainment.”

Ms. Casey says it is estimated the Millennial generation will account for 40 percent of the workforce in five years and 75 percent of the global workforce in 10 years.

“I don’t know if I would call downtown a ‘sector’ as it is really more of what I would refer to as an ‘employment center.’ I would say that like all cities with a thriving downtown, we are focusing efforts on finding ways to attract the right types of businesses to the area as well as ensure a high level of services and quality infrastructure,” she said of new business attraction and retention.

“Parking, for example, is a good problem to have — meaning that if we had no parking issue, it would mean we have a dead downtown — and we are working diligently to provide creative solutions, which we will be updating council on in the near future.”

A snapshot of commercial occupancy trends in the fourth quarter of 2016 compared to the same period a year earlier shows an increase in vacancy rates for both downtown office and retail office space. The numbers show:

  • Downtown office space in quarter 4 of 2016 had a 13.6 vacancy rate with an average cost per square foot of $29.02 compared to a 9.9 percent vacancy rate and $24.06 cost per square foot;
  • Downtown retail space in quarter 4 of 2016 had 4.2 percent vacancy with an average cost per square foot of $23.60 compared to a 3.8 percent vacancy rate and a $23.89 cost per square foot.

“For an office user that will be hiring web developers and sales personnel, we discuss the strong draw that a downtown location has for employees and what that means for strong employee retention,” Ms. Casey said of the economic development pitch.

“They will be more likely to stay with the company if they also enjoy the work location and nearby amenities. We will also show that housing and labor costs are lower here than other competitor markets, and that if they are looking at older Millennials or Generation X’ers, our Scottsdale schools are exceptional places to send their children.”

A bit of a different pitch for folks in the retail sector, Ms. Casey says.

“If we are looking, on the other hand, to attract boutique retail, then we will instead provide data about local and visitor spending in the area and have access to data that can show where some various types of goods or services may be under-provided in the area and therefore could be a good sales opportunity,” she pointed out.

“Many downtowns — and new programs and options will be researched and presented through the Downtown Scottsdale 2.0 effort — also create various programs or incentives for businesses or landlords to help with facade improvement, marketing, and other improvements in exchange for quality projects and tenants.”

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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