City Hall: facts about the Crossroads East proposal in Scottsdale

An opinion published in the Scottsdale Independent June 8 regarding the Crossroads East development proposal — in the vicinity of Loop 101 and Hayden Road — the City Council will consider June 12 raised many questions.

Randy Grant

The author wondered about “$21 million in incentives to entice Nationwide to buy the $83 million parcel of state land,” and asked where that money would could from, how it relates to the city’s ongoing efforts to address, in the author’s words, “our crumbling infrastructure,” and whether building in a flood area is “protocol.”

The applicant of this development request is the current land owner — the Arizona State Land Department. As is their practice, they are working with a potential buyer — Nationwide Realty Investors, Ltd. — to maximize the public benefit of the land prior to sale.

State Trust land like that in Crossroads East is held in trust and managed for the sole purpose of generating revenues for the 13 State Trust land beneficiaries, the largest of which is Arizona’s K-12 public schools.

The $21 million “incentive” included in the development agreement is not a handout to a developer and it is not guaranteed. It is reimbursement for public infrastructure that would be built by the developer and would only be paid should the project meet strict and specific performance milestones.

Danielle Casey

The developer is bearing the cost of major road and drainage improvements that will serve not only this development, but the greater area as well, including widening Hayden Road, extending Miller Road and improving storm drainage. Lacking voter-approved bond funding, this is one way to meet critical infrastructure needs.

The reimbursements would come from increased future revenues attributable to the project and are only paid if the project meets required thresholds for construction of commercial space and hotels and creation of jobs in Scottsdale.

A third-party analysis estimates that should the project meet its performance metrics, it would generate an estimated $24.2 million in direct city revenue in the form of increased sales, hotel and property tax collections.

The author also wonders if it is “protocol” to build in a floodplain. The answer is “yes” — in fact, much of Grayhawk was built in the same federally regulated flood hazard area where this project is located. Some of the proposed improvements that would be built mitigate the potential flood hazard and will benefit areas beyond just the project location.

Finally, the assertion that “no studies have been done to determine the (project’s) impact” is simply not true. Crossroads East has been in the city’s general plan since the early 2000s; a full traffic impact study was completed in 2011, and an update to that study is under way.

Proposals like this generate and deserve public scrutiny. These facts should inform that process.

Editor’s note: Ms. Casey is the Scottsdale economic development director while Mr. Grant is the municipal development services director.

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