Scottsdale SkySong: our partner in innovation … and apartments and hotels!

This week, council will discuss an urgent request from its SkySong partner, the ASU Foundation. The supporting council report bears no approval signature of a charter officer, but states, “The catalyst to ASUF’s request to identify the precise location of the city’s excluded parcel is ASUF’s intent to pursue a transaction with a hotel developer.”

David Smith

David Smith

The catalyst should have been council’s request to identify a location for the city’s reserved 1.5-acre parcel — a request made when ASUF was given permission to build a 90-foot office building on the corner of Scottsdale and McDowell roads.

My recommendation to staff at that time was to negotiate a location at the corner of Scottsdale and McDowell roads for our 1.5-acre entitlement in order to buffer the impact of this imposing structure and, at the same time, provide a significant public park area for the benefit of nearby residents, citizens and visitors.

Now, when we might actually have the leverage to accomplish such a goal, we are asked to accept an inferior site offered by ASUF.

Some readers may remember the history of the city’s “ASU-Scottsdale Center for New Technology and Innovation” agreement with the ASU Foundation — a nonprofit 501(c)3 to support ASU — when city council met in emergency session in mid-2004 and agreed to acquire 42 acres from the ASU Foundation for $41.5 million (even though the city’s appraisal at the time was only about $23 million.)

The city’s investment eventually ballooned by another $40 million or so for demolition and infrastructure improvements, but still the partnership was deemed justifiable. Proponents argued that leasing the property back to ASUF for 99 years could create a long-term academic partnership to develop an “incubator” campus that could stimulate revitalization in the southern part of our city.

For their part, ASUF committed to develop a technology, innovation and creativity center comprised of approximately 1.2 million square feet of space — 90 percent of which would be office/research space, and 10 percent retail and support services. ASUF went further and promised to maintain the character of SkySong as a technology, innovation and creativity center, until at least one million leasable square feet was constructed.

The office/research square footage of SkySong buildings 1, 2, 3 and 4 (now under construction) now totals 445,000.

Since adoption, the agreement with ASUF has been modified six times. In my judgment, none of the amendments were motivated by anything other than providing a benefit for ASUF; this one appears no different. ASUF now seeks to identify the precise location of the city’s 1.5-acre parcel as McDowell Road frontage, in order to make the acreage with Scottsdale frontage available for a hotel.

I cannot imagine any “incubator-related” rationale that would justify the construction of a hotel on this city property — any more than I could have imagined an “incubator-related” rationale for allowing 325 multi-family housing units on this same property a few years ago.

Since hotel square footage cannot be construed as office/research space, the use of any land for a hotel means we will be asked again at some future date to authorize taller and taller buildings on the remaining acreage in order for ASUF to meet the square footage of office/research space they committed to develop.

Allowing the use of city land to unfairly compete with private developers of housing and hotels was not the rationale for this $80 million investment of taxpayer money. I am honestly perplexed that we cannot negotiate lease amendments for this piece of city property favorable to the citizens of Scottsdale.

Editor’s note: Mr. Smith is a member of Scottsdale City Council

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