Stockdale pursuit of Scottsdale Marquee development squeaks by City Council

STAFF REPORT: A view of the Scottsdale Marquee development now destined for an Old Town Scottsdale intersection at Shoeman Lane and Scottsdale Road. (Submitted graphic)

Class A — all the way.

Scottsdale City Council Tuesday, Aug. 27 approved — by a 4-3 margin — a zoning district map amendment, a document titled, “Marquee Development Plan” and a subsequent development agreement for property at 4419 N. Scottsdale Road.

Following a two-hour discussion on the merits of the project, Scottsdale Mayor Jim Lane and council members Linda Milhaven, Suzanne Klapp and Virginia Korte voted in the affirmative for the development project known as “Marquee.” Scottsdale City Council members Guy Phillips, Kathy Littlefield and Solange Whitehead were the dissenting votes.

A view of the Scottsdale City Seal atop City Council chambers in Old Town Scottsdale. (File photo)

While each member of council expressed their approval of Class A office space — workplace dwellings with fine finishes and tech-savvy design elements — some voiced concerns of height and density.

“This is a zoning district map amendment for a new mixed-use building with approximately 250,000 square feet of Class A office space and 21,000 square feet of retail in our downtown area,” said Bryan Cluff, a Scottsdale senior planner. “The site is located on Shoeman Lane and Scottsdale Road.”

From a technical perspective Stockdale Capital has been approved for:

  • A zoning district map amendment from a downtown multiple-use, type 2 planned block development downtown overlay zoning to similar zoning standards, but with a type 3 PBD development envelope, which will allow for, among other things, a building height of 150 feet on 2.5 acres of a 9.5-acre site in Old Town Scottsdale.

“On Scottsdale Road, it’s about 2.5 acres directly adjacent to the galleria corporate center. The site is currently vacant,” Mr. Cluff said. “There are existing zoning entitlements on the site [that] were approved by City Council in 2016 for a similar development for an office building with retail except that building was 90-feet tall. The proposal we have today is for a 150-foot tall building.”

A view of the site location within downtown Scottsdale, which abuts portions locals call, “Old Town.” (Submitted graphic)

Identified as development “bonus” criteria, Mr. Cluff explains the zoning map amendment allows for both more height and more dense, intense uses of the commercial site.

“In addition, the development plan with amended development standards is included with the proposal along with an amended and restated development agreement amending some terms regarding bonuses from the original development agreement.”

Mr. Cluff explains the type 3 PBD criteria, which is approved, ultimately allows for the 72 feet of additional height and 100,000 square feet of floor area.

“The zoning ordinance has formulas built in for use in the planned block development district to assign a value to the requested bonus building height and floor areas,” Mr. Cluff said.

“In this case the requested building height and floor area bonuses equate to about $2.1 million of a special improvement requirement and the developer has chosen to allocate a portion of that — approximately $557,000 for the Shoeman streetscape improvements.

— Bryan Cluff, Scottsdale senior planner

“The remainder of that, which is approximately $1.5 million would be deposited as an in-lieu payment to the downtown special improvement fund available for future capital projects in the area. The bonuses that are being applied are 72 feet of building height to achieve the 150 [feet] and approximately 100,000 square feet of floor-area.”

According to Mr. Cluff, each tenet of the type 3 PBD development criteria have been met.

“The class A office and retail in a mixed-use format is consistent with the land-use elements and what those plans call for,” he said of the downtown Scottsdale’s long range land-use plans.

“That the proposed development plan reflects noteworthy investments to provide public benefits, improve the quality of life in the community, and assist in achieving the goals and policies of the General Plan, downtown plan and city objectives in the vicinity where the development is located.”

Scottsdale Mayor Jim Lane

The City Hall debate

There were 28 public comment forms delivered to the local dais, according to Mr. Lane with 18 Scottsdale community members — proprietor, developer and resident — speaking in favor of the project.

Meanwhile, eight impassioned members of the Scottsdale community spoke in staunch opposition to the development project. One member of the community asked for more information.

But while all agreed Class A office space is a vital need in the Scottsdale development community — Old Town Scottsdale may not be the right fit, some say.

Jason Morris

“This project is essentially an update on a project I brought you two years ago that was approved by council,” said prominent zoning attorney Jason Morris of the Phoenix-based Withey Morris law firm. “This is an area that is inclusive of height and density and as we look further it truly is a main-and-main location in downtown just being south of Camelback and Scottsdale Road.”

Mr. Morris contends the plan proposed is the long-range vision pursued by Scottsdale City Council.

“The council has determined that this area is really an urban core,” he said. “This is not a standalone island and in fact there are heights at or near what is proposed for this application. We are following your plan … and it is indicative of your language. It fills a void for Class A office space in Scottsdale — this works in unison with the Galleria.”

— Jason Morris, zoning attorney

Mr. Morris claims, at build-out, the commercial space could have a $400 million positive economic impact to Scottsdale, its residents and business community.

“It is not insignificant,” he said. “The overall development impact will be significant over time. This isn’t being jammed into your city — this isn’t an exception to your code, this is in keeping with all of your long-range goals.”

However, Mr. Phillips and Ms. Whitehead disagree.

“The property just north of that, is there anything that is going to be there? I can’t get past the height and the massiveness of this,” Mr. Phillips said of his height and density concerns then and now.

“I voted against it [in 2016] because it was too tall. Unfortunately, I feel the same way again. I just can’t seem to get past the stark difference between the Galleria and this giant glass structure. I can’t get past the height and massiveness of it on such a small lot.”

Scottsdale Councilman Guy Phillips

For Mr. Phillips it was a height too far.

“If this would have came to us at the nine-story level I probably would have voted for it — but the increase just kills it for me,” he said.

For Ms. Whitehead, her concerns spanned height, density, parking — and “gives” to the developer.

“I have seen this in other development projects where density is approved, land is sold and then a new developer comes in with a lesser project,” she said of a potential future scenario at the corner of Shoeman Lane and Scottsdale Road.

“I am worried about parking, obviously. I think I am very supportive of having office space in this area. I appreciate your answer, but I don’t see a lot of give to the citizens. I don’t think the added height and density is a great benefit to the community.”

Scottsdale Councilwoman Solange Whitehead

But in direct response to her line of questioning, Randy Grant, Scottsdale planning director, confirmed the zoning approvals would equate to the approved construction today and into the future.

“As the applicant mentions, you are essentially approving this project,” he said in-tune with responses from Mr. Morris.

“It is so unlikely that someone would choose to follow the prescriptions of the development agreement and the stipulations of this case — if they did, they would build the exact same thing that you are approving tonight. It would be a different builder, but it would be virtually the same project. Anybody who were to assume ownership of this property in the future would very likely come back to do a revision to the development plan, which would come back to council.”

The corporate citizen

Mr. Lane says the only obligation of a property or business owner is to follow the law of the land.

“The real element that any construction, any property or business owner has to the city, is to pay their taxes,” he said following an hour of public testimony. “That is the primary thing — everything else is at their risk

There is no unspoken, informal obligation on the part of businesses or property owners to go above and beyond paying their taxes. That is significant onto itself in this situation.”

Nearly a decade ago, the Scottsdale City Charter was amended to provide protections against developer subsidies, according to Mr. Lane.

“We no longer pay cash subsidies to anyone,” he said. “Municipalities are still paying companies to build apartments — they are paying for those things. Over 10 years ago, we did the same. We did it at the waterfront, we did at fashion square, at Sky Song to the tune of millions of dollars. We made a special change to our Charter in 2010 to outlaw it.”

— Jim Lane, Scottsdale mayor

Mr. Lane says Scottsdale City Hall is playing by the rules.

“We want to work with them where we can,” he said. “We are not going to play favoritism. It is important for us to keep things in perspective. I think this is a great project and I think it is almost silly to talk about how this won’t work and to leave this land barren for another decade or two I want to make sure to the best I can: Set the record straight.”

The goal is to manage success — not prevent it, Mr. Lane contends.

“Really, this is what a city is meant to be doing, this is a good add to downtown,” he said. “I am looking forward to this project.”

Kathy Littlefield

But from Ms. Littlefield’s perspective, this deal is bad for Scottsdale.

“If before us was the 90-foot, Class A office space, and underground parking like before, I probably would have OK’d it, but I cannot OK this from its original version,” she said. “It’s not a redo of the same building and it should not be considered… This building could set a precedent for our downtown that I do not want to encourage.”

Ms. Littlefield says the project will stick out apart from Old Town Scottsdale.

“It does not fit into the surrounding area and it certainly does not blend,” she said. “We are losing our precious street parking. In short, it is massive, it is high-density, whale of a building to be stuck on Scottsdale road with its nose almost touching the street.”

Ms. Littlefield also is concerned the building will deter the future economic prosperity of the community.

“It is not inviting and will not enhance our downtown or our tourism efforts for the entire area,” she said. “It is my belief that it will cause people to turn away and drive on — if I we’re a tourist, I would to. This basically is a massive mediocre glass box at a location that should hold a unique and iconic structure.”

Independent Newsmedia Arizona Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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