Split vote: Scottsdale paves way for Crossroads East atop 136 acres

The shaded area shows 1,000 acres known as Crossroads East. (graphic by city of Scottsdale)

Scottsdale City Council has put in place significant changes making way for new development, height and density on both sides of Loop 101 around Scottsdale and Hayden roads.

The split vote — 5-2 — didn’t come without opposition as two city council members, one local commission and the general public voiced concerns surrounding the proposed development when it came to plans for 1,000-acres of land.

Nationwide Realty Investors plan to bid on the land at a state land auction later this summer.

Striking a balance between welcoming and maintaining strong economic generators, and increasing density, height and population within municipal boundaries appeared to weigh heavily on some council members.

Nationwide Realty Investors is proposing a regional corporate center on 136-acres of the 1,000-acre plot of land. A nearly five-hour discussion ensued at City Hall, 3939 N. Drinkwater Blvd. on Tuesday, June 12, rolling late into the evening.

Two separate topics were discussed together:

  • A development agreement with Nationwide Realty Investors; and
  • A zoning district map amendment to revise the Crossroads East development plan.

Some officials pointed to the rezoning one of the largest in city history.

Councilmembers David Smith and Kathy Littlefield were the dissenting votes, suggesting to slow the project to allow for further resident input, studies and planning.

Kathy Littlefield. (Independent Newsmedia/Arianna Grainey)

“Saying what is going to be built here will affect the future of the entire city and every person living in it is not an exaggeration,” Ms. Littlefield said.

“Yet this project has been pushed through the city’s processes with almost no citizen knowledge or input by anyone outside of the land owner, the builder and the city staff that was working on it. Even the council could not discuss it with anyone because we only heard about it in executive session.”

Part of Nationwide’s development agreement includes a $21.9 million reimbursement for public infrastructure costs incurred by the insurance company. The total public infrastructure costs are estimated to be $30 million, Scottsdale Economic Director Danielle Casey says.

Planning and zoning, state land department, economic development and Nationwide Realty Investors officials all spoke of characteristics and details of the plan before several members of the public commented on the project.

“We do know that there are a number of concerns that have been expressed with one or both of these plans put forward tonight,” Planning and Development Director Randy Grant said, noting that it is remarkable this area of land hasn’t been developed yet.

Concerns heard by councilmembers and city departments include height, density, traffic, drainage and the amount of planning conducted, or lack thereof.

Crossroads East site is on both sides of the Loop 101, with 136-acres at the southwest corner of Hayden Road and Legacy Boulevard known as Planning Unit V, where Nationwide plans their business center should they be successful in purchasing the land.

Planning Unit V will:

  • Introduce base building heights up to 84 feet, and “bonus” building heights up to 134 feet;
  • Place tallest buildings near the freeway;
  • Reduce Industrial Park zoning availability by 13 percent in the total Airpark area;
  • Increase number of potential residential units in the Crossroads East Master Plan by 51 percent; and
  • Invest $3.6 million in off-site infrastructure upgrades.

The Airport Advisory Commission heard the case on Jan. 7, and recommended denial with a 6-1 vote, citing concerns of proposed increases of residential density and building heights.

The Planning Commission heard the case in May, recommending approval with a 4-2 vote. June 4 and five community meetings informing the public about the project were scheduled following concerns expressed by the Commission.

According to city officials, emails received and public comment during the discussion pointed to many residents feeling left in the dark about the project that was being referred to as one of the largest in city history. However, Mr. Grant says city staff did their regular process of alerting residents within 750 feet of the project.

The yellow area shows Planning Area V, where Nationwide Realty Investors plans to build their corporate center if they successfully purchase the land. (graphic by city of Scottsdale)

Crossroads East application

The area known as Crossroads East was formally called “core north” and “core south” during master planning efforts in the 1990s to anticipate the ultimate sale and development of the state land.

“State land is a unique and complex system,” Mr. Grant explained during the meeting.

Randy Grant

“So 134 acres is being projected for an auction this fall, and there is a potential bidder who has come to the city and asked for preparation in the event of what can be done if they’re the successful bidder.”

The potential bidder is Nationwide Realty Investors, who have been operating in Scottsdale since 1982 and is in need of expanding, President and CEO Brian Ellis says. They have 1,560 employees working in Scottsdale now, with 364 calling the city home.

The state land department owns approximately 6,000 acres of land in Scottsdale, Senior Planner Greg Bloemberg noted during the meeting.

The goal is to improve the marketability of the land within the district, and respond to current market trends, a city staff report states. The Crossroads East proposal included increasing residential units from 4,596 to 6,969, and construction of a hotel. The new zoning is less dense than what it was formally, city officials point out.

There are 1,128 multifamily units currently being built, under construction or pending in the area as well, Mr. Bloemberg said.

The Crossroads area — formally broken into four sections — has been divided into 11 “planning units” for master planning purposes, Mr. Bloemberg says. Plans show Planning Unit V in the center.

Height maps show four sections where building heights of 115 feet would be allowed, with a maximum height of 98 feet height allowable 300 feet behind the first zone. The majority of building area is an 84-base height, Mr. Bloemberg said.

With approved bonus development standards for Planning Unit V, the applicant is required to demonstrate community benefit, which Nationwide has done in the form of infrastructure.

The proposed off-site infrastructure improvements and their associated construction cost estimates are:

  • Hayden Road traffic signal, deceleration lanes and road widening from four to six lanes: $2 million;
  • Regional drainage improvements: $1.3 million.

Additionally, city planners noted that north and south roads — Scottsdale, Miller, Hayden and Pima roads — are operating at 88 percent capacity.

“With the proposed development plan, when Miller Road is added and the underpass is done, and Hayden is widened to six lanes as stipulated, capacity would decrease to 72 percent,” Mr. Bloemberg said. “Without Miller Road and the current four-lane Hayden Road, they would operate at 96 percent.”

The Miller Road underpass was included as part of the city’s transportation plan from 1991 to 2016, Mr. Bloemberg said. It is expected to be completed by Arizona Department of Transportation’s Loop 101 project sometime in 2020, he said.

In general, Crossroads East is consistent with and conforms to the General Plan and greater airpark area plan, Mr. Bloemberg says.

A working relationship

For the past 35 years, the Arizona State Land Department and the city of Scottsdale established a good working relationship, officials from both parties contend.

“Our being here tonight is a shared vision between the state land department and city of Scottsdale to create a regional employment and commercial center,” State Land Commissioner Lisa Atkins said.

“We have an almost 35-year history in conversation with the city of Scottsdale for this area. So to me, as the commissioner of a portfolio that is to align the interest of today’s beneficiaries to tomorrow — this is a win, win, win situation.”

Ms. Atkins says the minimum appraised value of the project is $83 million.

Scottsdale Economic Development Director Danielle Casey at a recent city council meeting. (File photo)

The development agreement with Nationwide includes a maximum reimbursement of $21.9 million paid out in maximum payments of $7.3 million for each milestone completed, Ms. Casey says.

“Significant consideration has gone into this agreement to ensure that performance requirements are tied to delivery of a regional corporate headquarters to Scottsdale,” Ms. Casey explained. “Crossroads East is a highly prominent location.”

The proposed improvements will provide amenities and public benefits, Ms. Casey says, like jobs, tax revenue, water and sewer.

“In the absence of this site being developed it is unlikely Nationwide insurance company will be able to expand its existing operations in Scottsdale,” she noted.

Mr. Ellis says his company is outgrowing its location at the Gainey Ranch Corporate Center.

“When you out-grow space, it isn’t easy to find an appropriate site in the city of Scottsdale,” Mr. Ellis said.

A view of Scottsdale City Council during a recent meeting at City Hall. Not pictured is Scottsdale Councilman Guy Phillips. (File photo)

Council views

When it came time for council deliberations, every elected leader spoke on the matter at hand.

Many acknowledged resident concerns should be explored prior to moving forward with the vote, and called the decision that evening tough.

“I strongly support the project, I think it’s a very good thing for us,” Mayor Jim Lane said of Crossroads East.

“I’m concerned when people may even have misinformation, maybe they’re challenged for a lack of information and the process may be a bit confusing. Frankly, that’s one of the reasons you elect us to have the time to go through these things and do the best we can to filter through all of the options.”

Mr. Smith and Ms. Littlefield questioned how these developments would benefit Scottsdale residents.

“I think the question arises, for whose benefits are these benefits and are they truly for the community or are they principally and primarily for the future owner of section five?” Mr. Smith asked.

“I have to say that I am concerned about the project, not because I don’t expect this area to be developed, I hope it is developed. I am concerned that this process — the citizens, Airport Advisory Commission — voted overwhelmingly against the project that they thought the proposed zoning district map represented a threat to what they called the critical balance. I don’t know that their concerns have been addressed.”

Mr. Smith believes the public wanted to hear more about how residents would benefit from such a development and land-use change.

David Smith

“I’m hearing a lot of justification for development of the project, justification for Nationwide being involved on the project; justification for the benefits that it might bring to the city in terms of tax revenues,” Mr. Smith said.

“I’m not even really, I guess, convinced that the $30 million in roads in the interior of development will be a benefit for anyone except the project unless you go through a drive through there.”

Mr. Smith says he believes only half of the analysis needed has been done.

“I’d like to see public outreach that really has a value, where we not only talk but we listen,” he said. “Because I’m not hearing we did anything except explain the project. One of the things that baffles me is why we are increasing the number of housing units? What justification is there for that?”

Ms. Littlefield used several minutes to read from what appeared to be a prepared statement, giving city staff a public scolding at one point in her statement. She says by looking around the room, it appears neighbors do not believe their neighborhoods will be enhanced or protected by this zoning change.

“I think this feeling is partially magnified by the city, and with the fact that there has been almost no outreach to the neighbors over the past year, that is our fault,” she said.

“What little did happen was done almost a year ago, before the city meetings or discussions were even agendized. Transparency and openness were not part of the program here.”

She says people rightfully felt disenfranchised and left out of the process.

“In all of the years I’ve been involved in Scottsdale politics, I have never seen citizens treated in such a contemptuous manner. Especially regarding so large of project so close to their properties,” she said.

“To quote from an email I received, ‘we have virtually no options.’ That is a sad feeling coming from our citizens. Once again, the city has managed to spread negativity throughout our Scottsdale residents, and once again, it is growing.”

Ms. Littlefield fears the Crossroads East project will set a precedent and expectation of greater height and density.

“In the end, and once again, the cost for this infrastructure improvement will be borne by the Scottsdale citizen who quite literally will be forced to pay for development that they don’t want,” she said.

Ms. Littlefield says studies needed include: impact and cost of traffic, noise, fire, police, property values, housing, water, sewer and total cost to the city’s general fund.

“I have seen no estimate to the total general fund annual cost increases to support these additional infrastructure issues that will be coming to us,” she said. “As it is right now, we’re being asked to vote without knowing many of these consequences to our city.”

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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