Scottsdale plaza to keep payday lenders in check

A developer planning a major reinvestment of an aging south Scottsdale strip center had to agree to ban future payday loan stores in order for the City Council to approve his plans for a new building with a drive-through window.

Developer Tom Hardy of Integrated Real Estate Services agreed to ban future payday loan and check-cashing stores in exchange for allowing a current convenience store that provides check-cashing services to remain at the Scottsdale East Plaza on the southeast corner of Hayden Road and Roosevelt Street, just south of General Dynamics.

The council first postponed the case in May at the request of Mayor Mary Manross before unanimously approving it Tuesday. The approval included an agreement that allows existing uses to continue.

Hardy said a payday loan store was never proposed. His concern with the ban is limiting options that otherwise would be legal under his zoning, not only for the short term but also 10, 20 or 30 years down the line.

"It just came out of nowhere," Hardy said of the decision to first continue the case. "For us it was frustration after over a year in the process, and here we are at third (down) and two at the goal line."

Manross said she pulled the case to protect the neighborhood, a point supported by a majority of the council that was unwilling to approve the rezoning without the ban.

"The main point is we do not want a proliferation of these (payday loan stores) and do not want a revitalized center to have more of these," Manross said. "I think it's the right of the community to encourage developers and builders to provide services a majority of folks would like to see."

The current 36,000-square-foot shopping center sits on 3.6 acres. The $2 million reinvestment plan is to upgrade the existing building while adding a new 4,500-square-foot building closer to the street.

The new multitenant building, which is the reason new zoning was required, is expected to include a restaurant with a drive-through window.

Hardy, whose company has owned the property since 1999, said rents for existing tenants will go up and that he expects a new tenant mix.

"We're going to try and make it a hip new place for the neighborhood to congregate," he said. "I believe in south Scottsdale and believe in this area."

Today, the center has state- and county-run health facilities, storefront churches, an Asian restaurant, a convenience store, a company that provides labor to other businesses, a bar, a tattoo parlor and other small businesses.

Councilman Jim Lane expressed concern with forcing the developer to ban payday loan stores but did vote in favor of the agreement to allow existing uses to remain.

"What it gets down to is it seems like a bit of overreach to tell the guy he can't use (payday loan stores), even if he goes broke," Lane said.

Scottsdale is not the first city to try to limit the payday loan businesses.

Cities have looked specifically at trying to prevent the stores from clustering on one corner, responding to neighbors' concerns that too many in one area give the perception of decline. Those opposing the businesses say they prey on the poor with high interest rates, but supporters say they provide a valuable service by offering loans that can help customers avoid fees elsewhere.

Mesa recently approved restrictions that keep payday loan stores from opening within 1,200 feet of each other. Queen Creek is considering similar restrictions.

As for Scottsdale East Plaza, which Hardy says is likely to be renamed Roosevelt Scottsdale, the Development Review Board is scheduled to vote on the project's design on Thursday. Hardy said if approved, he will immediately start efforts to obtain a building permit.