Rivalry develops into partnership

Two former retail development rivals are teaming up to bring luxury stores such as Neiman Marcus and shops selling designer duds to north Scottsdale.And the foes-turned-partners will likely rewrite plans for the massive Paradise Ridge area of northeast Phoenix.

High-end residential developer DMB has already started building its 120-acre One Scottsdale retail-residential-office complex on the east side of Scottsdale Road, just north of Loop 101.

Prolific Valley shopping center developer Westcor long planned an even bigger but similar development in Paradise Ridge, just across Scottsdale Road.

Now, DMB has opted to let Westcor develop, lease and manage One Scottsdale's 500,000 square feet of retail, and to boost that number higher if it can attract the choicest stores, said Robert Mayhew, general manager of DMB Commercial.

In fact, Westcor and DMB executives hinted at, but wouldn't confirm, plans for DMB to develop the residential portion of both One Scottsdale and Paradise Ridge, while Westcor concentrates on the retail portions of both.

The One Scottsdale collaboration is the first evidence of a longtime partnership that aims to "control both sides of Scottsdale Road and its vast real estate assets," said Eneas Kane, DMB's chief operating officer.

Paradise Ridge, more than 2,000 vacant acres northwest of Loop 101 and Scottsdale Road, is owned by the Arizona State Land Department. Westcor has been planning the parcel for nearly a dozen years, and in 2005 announced plans to develop a 1 million-square-foot luxury shopping center dubbed Palisene on 72 acres of the site.

But by the time the parcel was pegged for auction, both DMB and Thomas Klutznick, developer of nearby City North, had already announced plans for upscale shopping centers on either side of the state-owned property and started vying for coveted retailers with the promise of a timelier and more certain development plan.

To add to Westcor's woes, DMB indicated plans to bid on the Palisene parcel, and Klutznick sued to stop the auction. The hurdles were finally cleared, and the 112-acre chunk of land has been scheduled for auction April 30, said Mark Winkleman, state land commissioner.

Now, the DMB-Westcor partnership throws a new monkey wrench into the plans, he said. He's not sure anybody will be willing to invest $100 million to buy the land at auction and pay for the roads and other necessities to develop it.

By teaming up with DMB, Westcor can start wooing retailers to One Scottsdale and redesign the Palisene shopping center to be something else, without the need to get it under development fast.

Scott Nelson, Westcor vice president of development, said the amount of luxury retail in the three proposed projects plus Desert Ridge Marketplace may be too much.