Downtown S cottsdale’s greatest challenge may be to develop a unified vision for diverse interests in a city that is known for having its share of squabbles.
The city’s historic core, a nearly two-square-mile area, contains nationally recognized galleries, trendy bars, popular eateries and some of the best shopping in the Southwest. Downtown also is where the city originated its motto "The West’s Most Western Town," thanks to the fabricated Old Town district that sells that image to tourists in the form of souvenirs and sometimes entertainment.
With the eclectic mix of businesses downtown, achieving a common vision has not been easy. Scottsdale’s downtown may be thriving compared with those of other East Valley municipalities, but that has not kept interested parties from debating what is best for the area’s future.
One thing is certain. Downtown may be struggling by some accounts, but it remains one of Arizona’s premiere destinations. And plenty of dollars are being spent to keep it that way.
"I think we have a pretty solid downtown, and I think we’re on the cusp of becoming vibrant," said Ed Gawf, Scottsdale’s deputy city manager, who directs downtown planning.
A JOB, DOLLAR CENTER
Scottsdale’s downtown is the largest in the East Valley. It is bounded by Chaparral Road to the north, Miller Road to the east, Earll Drive to the south and 68th Street to the west. It contains 925 businesses employing 21,550 people, said Harry Higgins, city senior planner and city records.
Downtown is Scottsdale’s second-largest em- ployment center — behind only Scottsdale Airpark, located just south of Frank Lloyd Wright Boulevard and east of Scottsdale Road.
Among other things, downtown features Scottsdale Fashion Square mall, with department stores such as Neiman Marcus, Nordstrom, Dillard’s, Robinsons-May and Macy’s.
At downtown’s southern end, there is the expanding Scottsdale Healthcare Osborn hospital and Scottsdale Stadium — the spring training home of the San Francisco Giants. Also downtown are the city’s main offices, Civic Center Mall, kitschy tourist shops, art galleries, dozens of restaurants and numerous glitzy clubs. The mix makes it a draw throughout the Valley and helps Scottsdale maintain its reputation as one of the best tourism cities in the country, merchants say.
Relying on tourism, though, has made downtown Scottsdale susceptible to outside forces. The terrorist attacks of Sept. 11, 2001, and a two-year downturn in the nation’s economy hurt downtown.
City figures show Scottsdale Fashion Square generated $7.5 million in sales tax revenue in 2002. That’s about a 4 percent drop from $7.8 million in 2001, said Phil Montalvo, the city’s tax auditor manager.
Overall, sales taxes for downtown’s four specialty districts — Old Town, Marshall Way, Main Street and Fifth Avenue — dipped about 6.5 percent, from $4.9 million in 2001 to $4.6 million in 2002.
A similar decrease occurred in the city overall, officials said.
"It’s almost paralleling what’s happened in the last year or so with revenues as whole for the city," Montalvo said.
Scottsdale has invested heavily in downtown in the past decade.
The city has spent $47.7 million since 1993 on street improvements, landscaping, incentives for developers, promotions and details such as holiday decorations and electrical upgrades.
The city also has budgeted $35 million between now and 2008 to keep downtown vital, city records show. Future projects include:
• Arizona Canal bank improvements, including at least one bridge over the Arizona Canal, an amphitheater, public art, landscaping and a public plaza with a water feature on Stetson Drive.
• Main Street Plaza Scottsdale, formerly known as the Loloma Arts District, a seven-acre project bounded by Main Street, Marshall Way and Goldwater Boulevard. A museum, loft homes, condominiums and more than 13,000 square feet of shops are planned. The city will fund the museum and provide some money for public parking.
• New parking, including two garages and a surface lot, and new signs also are planned.
Despite this investment, some merchants and residents said downtown is losing its edge because officials have allowed businesses to migrate to north Scottsdale.
An independent study of the downtown market released in February 2002 by Economics Research Associates, The Smith Group and Behavior Research Center, found that "residents of north Scottsdale are substantially less likely to visit downtown."
The study suggests Scottsdale should create a marketable "sense of place" downtown through more cultural facilities and programs, while still paying homage to its Western roots.
The city is to blame for businesses and shoppers going north, said Agnese Udinotti of the Udinotti Gallery on North Marshall Way.
"Along with that growth, they allowed the commercial activity to go," she said. That includes such places as Phoenix’s popular Kierland Commons at Greenway Parkway west of Scottsdale Road; Desert Ridge Marketplace, just north of Loop 101 and Tatum Boulevard in northeast Phoenix; and the Promenade at Frank Lloyd Wr ight Boulevard and Scottsdale Road.
Udinotti, an artist and Paradise Valley resident, has worked in downtown Scottsdale for 40 years. She said downtown has grown, but not necessarily for the betterment of the galleries. After all, the majority of her business comes from out of state.
"Everybody’s kind of struggling down here," agreed Wendy Cashaback, owner of The Love Bug, which opened downtown last year. Cashaback said hip shops are needed downtown, as opposed to "touristy stuff."
The Love Bug, a racy lingerie shop, may resemble a newer face emerging downtown. It’s risque. It’s young. And its synergy works well off nearby clubs and bars, such as Noyz on North Craftsman Court, and trendy restaurants.
"The evenings are busy, but during the day it’s very, very quiet," Cashaback said of her business.
Others assert that downtown Scottsdale is pointed in the right direction.
"I hate to see this area go, because it’s so classic," said Jaylene Detrick of Scottsdale. "When you think Scottsdale, Arizona, you think (downtown)."
Detrick has worked in downtown for 20 years. She now works at Salon Spectrum, and she said she’s excited about the city’s planned canal bank improvements just outside her workplace.
"We’re in rejuvenation here," Detrick said.
Some merchants say the city’s core is recovering from years of political neglect. They think downtown Scottsdale has been in need of attention and is finally getting it with the canal bank improvements and new parking.
"It will be great," said Dwayne Richard, executive director of the Downtown Scottsdale Partnership, which represents hundreds of businesses and property owners. "It’s a sign of support and prosperity for the area."
Taxpayer investment in downtown have been matched by millions of dollars in private investments, city figures show.
Scottsdale Healthcare Osborn hospital has built a $15 million outpatient surgery center and two new parking garages totaling $6.5 million. The hospital also recently began constructing a $28 million trauma center to be completed in June 2004, said Mike Brinkley, president of Scottsdale Healthcare Realty Corp., the group that manages construction.
"This is a terrific downtown," Brinkley said. "I think people are fooled because central and downtown Scottsdale grows at, let’s say, 1 percent, as opposed to north Scottsdale. But quality should not be synonymous with the growth rate. To me, downtown Scottsdale is a very exciting place to be."
Another project, Third Avenue Lofts, is set to bring more residents downtown.
The $31 million project at Third Avenue and Buckboard Trail will offer lofts for up to $1.4 million, said Ken Losch of Phoenix-based Magellan Real Estate Investments. Construction is set to finish in March 2004.
"By getting more residential in, you’ll be getting more locals," Losch said. "When you get residential you start to create a different tenant mix, and you create nice pedestrian areas."
The James hotel, a $6 million renovation project for the former Old Town Hotel on the Civic Center Mall at Indian School Road, also is set to reopen in November.
And restoration of the 1950s Hotel Valley Ho, just a few blocks west on Indian School Road, also is under way. The hotel received historic status this year and is undergoing a $30 million refurbishment.
After 15 years of partners changing hands, the Waterfront Project also has a glimmer of hope.
Two 13-story condominium towers are planned for the 11 acres of dirt along the Arizona Canal at Scottsdale and Camelback roads that will feature residential units and retail space. The project is scheduled to begin in 2005. The price: $165 million.
One of the largest private projects to date has been made by New York-based JEMB Realty Corp., which spent $65 million to upgrade the Galleria Corporate Centre, a 600,000-square-foot building at Scottsdale Road and Fifth Avenue. Its center also has served as the new "in" place over the past year to host large galas.
HAVING A SAY
Getting everyone’s input may sound good, but it sometimes it leads to acrimony in downtown Scottsdale.
"Having a vision that every (downtown) district can buy into is not easy," said Jose Catalan, a longtime property owner and president of the recently reformed merchant group, Scottsdale Focus.
Comparing Old Town to Fifth Avenue or Main Street is difficult, for example, because each area has its own identity, Catalan said.
Some people have criticized Scottsdale officials for commissioning downtown studies that have not translated into results.
The Tribune examined City Council agendas and city documents and found Scottsdale has spent about $375,000 on third-party studies related to downtown during the past decade.
Bill Exham, general manager for Scottsdale community services, said reaching a consensus is difficult with studies because downtown does not have a united front. And as elected leaders change on the dais, so do ideas and funding capabilities, which means that studies sometimes are not implemented.
"There’s a different perception of what should be done," he said. "When a report comes out, trying to come up with some sort of consensus is difficult."
One relatively new face in Scottsdale is trying to create a new outlook for downtown.
Gawf, a former planner for Boulder, Colo., and Palo Alto, Calif., joined Scottsdale’s city administration less than two years ago and brought with him a wider perspective on downtown development.
"It feels like a lot of studies were done . . . and very little time doing things in the last 10 years because there was emphasis on what I call the ‘Big Bang theory,’ " in which large projects were touted to save downtown, Gawf said.
That view has been replaced with a new philosophy, spearheaded by Gawf, that focuses on getting businesses to improve one at a time.
Gawf also created a "downtown action team" and a plan with members of several city departments who meet weekly to create a strategy. Scottsdale now has two new positions: Downtown concierge and downtown liaison who work with merchants to streamline the tasks of the city’s permit processes and other issues.
"Great downtowns are made up of the small properties that redevelop," Gawf said.
Lorraine White, widow of Scottsdale’s first mayor, Malcolm White, said downtown has stayed basically the same. White was born and raised in Scottsdale, and she and her family have owned several properties in Old Town for more than 50 years.
"It’s really important we keep our identity. If we don’t, we’re going to be Anytown," she said.