Scottsdale continues to put its best economic foot forward

From left is David Bentler of APS; Andy Markham of The Thunderbirds; and Nick Cardinale of Barrett-Jackson Auto Auction (photo by Melissa Fittro)

The city of Scottsdale is seeing growth in the hospitality industry, city officials lauded at the annual economic discussion, Scottsdale Forward.

As the sun rose over the Superstition mountains, the movers and shakers of Scottsdale sipped their morning coffee in Scottsdale Community College’s performing arts center as city officials, development executives and local nonprofit representatives discussed the city’s growth.

Scottsdale Forward: A Path for Progress and Economic Development, was hosted by the Scottsdale Chamber of Commerce on Wednesday, March 14, at Scottsdale Community College. Breakfast was served prior to a two-hour discussion that included two panels and several speakers.

Years removed from the Great Recession, Scottsdale’s hospitality industry has risen from No. 25 to the top of its industry nationwide in less than 10 years, Experience Scottsdale CEO Rachel Sacco told the crowd comprised of city council officials, community members and local professionals.

Additionally, City Manager Jim Thompson disclosed that eight hotels are on the drawing board for the Old Town and south Scottsdale area; and a new mixed-use development will soon be coming on the Cracker Jax property along Scottsdale Road.

Scottsdale Community College President Dr. Jan Gehler, Salt River Pima Maricopa Indian Community President Delbert Ray Sr. and Scottsdale Area Chamber of Commerce Interim CEO Don Henninger all welcomed the crowd, before a light-hearted video of Mayor Jim Lane and Economic Development Director Danielle Casey was aired.

Mayor Lane and Ms. Casey were both out of town during the event; Mayor Lane on a trip to Morocco with a group of high school students through the Sister Cities program, and Ms. Casey at South by Southwest in Texas.

The first panel presentation was comprised of Nick Cardinale, Barrett-Jackson executive vice president; Dennis Robbins, Scottsdale Charros executive director; Andy Markham, The Thunderbirds big chief; and Carter Unger, president of Spring Creek Development.

The second panel was comprised of Mr. Thompson and Ms. Sacco.

By all accounts, the city of Scottsdale is alive and well, but the municipality isn’t void of infrastructure needs, Mr. Thompson says.

Scottsdale has upwards of $800 million in infrastructure needs.

Dennis Robbins, executive director of the Scottsdale Charros, and Carter Unger, president of Spring Creek Development. (photo by Melissa Fittro)

Local success

Spring Training, the Waste Management Phoenix Open and the Barrett-Jackson Auto Auction are only a few of the events that welcome hundreds of thousands of guests to Scottsdale each year.

The men who are behind those events say the economic impact to the local coffers is unmatched.

“Almost 200,000 people attend Spring Training at Scottsdale Stadium and the economic impact is amazing. The Cactus League does a study every couple of years, and the economic impact to the Valley from Spring Training is $544 million,” Mr. Robbins told the crowd. “To put that in perspective, the last Super Bowl that was here was $500 million, so you don’t realize it, but Spring Training is like having a Super Bowl every single year here in the Valley, so it’s extremely important.”

Earlier this year, the Waste Management Phoenix Open broke its attendance record, Mr. Markham says.

“We had 716,000 people this year, which is a record, you know we’ve broken records the last four years in a row,” Mr. Markham explained, noting other sporting events that bring visitors to Scottsdale in January, such as the 2015 Super Bowl.

A study conducted through Arizona State University’s W.P. Carey School showed the 2017 economic impact from the Phoenix Open to the city of Scottsdale, Maricopa County and Arizona was over $410 million.

“The tournament also generates about $50-plus million in gross revenue, which in full, lets us give somewhere between $10 million to $11 million to 200 Arizona-based charities so it’s a labor of love,” Mr. Markham said.

Similarly, the largest auto auction — also taking place annually in January — saw more than 300,000 attendees this year.

“We had another successful year this year,” Mr. Cardinale says. “We had 325,000 people come through the gates — over the nine days we sold over 1,700 cars.”

The total auction garnered $116 million, and over $6 million was raised for charity, Mr. Cardinale noted.

Mr. Cardinale says the Barrett-Jackson auction included 5,000 bidders, hailing from all 50 states and 13 countries, and 1,900 of the bidders were new.

“The economic impact, we did a study in 2016, a joint study with the city of Scottsdale, and just for Scottsdale alone, Barrett-Jackson brings in $168 million for the community,” he says.

WestWorld of Scottsdale, the large equestrian event space that is utilized by hundreds of events each year, including the Barrett-Jackson auction, sees nearly 1 million attendees each year.

“The city had the foresight and vision to do the remodel and renovation that completed in 2014, so that we could climate control and run this amazing facility year-round, that has allowed us to increase our events from 80 to over 120. Our attendance numbers are now over 900,000 — close to 1 million a year,” Mr. Unger says.

“We run at about 95 percent efficiency — which is amazing for this type of venue — and then create hundreds of millions of economic impact dollars for the area.”

Mr. Unger says the beneficiaries of WestWorld are the residents of Scottsdale.

“Not that it’s a nonprofit, but we don’t do it for profit at WestWorld,” he said. “The real beneficiaries of this nonprofit, if you will, are the citizens. Not only through the economic development and taxes, but also through creating a greater sense of place, a love for the city.”

Experience Scottsdale CEO Rachel Sacco. (photo by Melissa Fittro)

Municipality success

The woman at the helm of Scottsdale’s tourism marketing, Ms. Sacco, says Scottsdale’s hospitality industry is thriving.

Riding the hospitality industry wave since 1986, Ms. Sacco says the impact of tourism right now is palpable.

“I have to remind people, I know March is our busiest month but tourism is a 12-month business. It’s just that it’s so much easier in March when we can see our visitors because they’re all wearing orange and black,” Ms. Sacco quipped.

In total, about 9 million visitors arrive in Scottsdale each year.

“I think it’s safe to say that travel has definitely been what we’ve built our community and economic growth on, and it’s still a really important part of Scottsdale and it’s continuing to grow,” she said.

The Great Recession severely impacted Scottsdale’s cash cow, Ms. Sacco pointed out, but steady growth is happening.

“In 2017 we’ve made a slow but very steady recovery,” she said.

“In 2017 our hotels and resorts saw growth in both rate and revenue, and not counting for inflation, we in Scottsdale, Arizona, are out performing all previous levels of any of our metrics. We are out pacing the entire U.S. hotel industry in growth.”

According to Smith Travel and Research — also known as STR to industry executives — in 2018, Scottsdale’s resorts are expected to grow in occupancy and poised to outpace the rest of the country in occupancy and revenue growth.

“Even more important to all of us here, we’re seeing growth in the spending that those visitors leave behind,” she said. “I hope that you see that your businesses also have a lift from this incredible engine because those dollars that are going to perhaps, your dollars, are also I hope lifting your company as well.”

2016 numbers show visitors leave behind an estimated $2.3 billion in economic impact, Ms. Sacco says.

“We know that everything is cyclical, you can always be on the top and the next few years you can find yourself at the middle or the bottom — that’s where we were during the recession,” she said.

“Now we’re at the top of our hotel industry nationwide, and frankly, less than a decade ago, we were No. 25; and a few years prior to that, before going into the recession, we were at the top again.”

While at the top of the industry, several projects are in-the-works for the city of Scottsdale, Mr. Thompson says, who joined the city staff in January 2017.

One of the upcoming projects is on the Cracker Jax amusement park property, 16001 N. Scottsdale Road. It’s been coined La Via.

“You’ve probably heard rumors about the Cracker Jax site. I know for many, there’s a long-history there for families to gather in Scottsdale,” Mr. Thompson explained of the 28-acre mixed-use project.

“The ideas they have for that site — it’s a game changer. This is one of the projects you’re proud of being a part of because it’s going to make a difference in the community.”

City Manager Jim Thompson (photo by Melissa Fittro)

Challenges the city is faced with is growing infrastructure needs, Mr. Thompson says, and a hefty discussion on how to address the $800 million in needs is expected to ensue soon.

“One of the challenges we have right now is looking at our infrastructure needs and overall needs in the city,” he said. “Our needs are about $800 million for projects that we’ve identified. Some of that is replacement of aging infrastructure, some of it’s new infrastructure to serve the community. Coming up here at the end of the month, the entire council will be discussing in greater detail what those financing options might be.”

Mr. Thompson says he expects the conversation to be difficult, but encourages residents to become familiar with the issue in order to find the best solution.

“Help us make Scottsdale the wonderful city that it is. Without it, we are going to have aging infrastructure — we have aging infrastructure now. I’m not going to go into that because sometimes it’s an embarrassment to know that we have bridges that are falling apart and crumbling, and things that are occurring throughout the community, but we really need to move forward with this.”

Northeast Valley News Services Editor Melissa Fittro can be e-mailed at mfittro@newszap.com or can be followed on Twitter at twitter.com/melissafittro.

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