Town home project near SkySong stalled

A planned town home project adjacent to SkySong, which has already benefited from Scottsdale's allocation of more than $1 million in federal money, has stalled.

The project introduced by Community Services of Arizona, a Chandler-based nonprofit organization, and backed by the city was meant to revitalize Belleview Street immediately south of the former Los Arcos Mall site by replacing rundown apartments with new town homes.

Scottsdale allocated $1.15 million of federal funds to the group, to assemble land for the project, which was to reserve units for those living below the median income. The City Council voted this year to allocate an additional $548,000 toward the Belleview project, however that money has not been given to the group because the project has stalled, said Scottsdale human services director Paul Ludwick. The latest allocation was going to be used to acquire the remaining land needed for the town home project and assist with development costs. "They came to us to let us know they were pretty much in limbo at this point with that project," Ludwick said.

SKYSONG'S NEIGHBOR

The nonprofit group has purchased a number of aging apartments in the 7200 block of East Belleview Street, south and east of Scottsdale and McDowell roads. Today, the single-story abandoned buildings are surrounded by a chain-link fence even as the SkySong parking garage rises just yards to the north.

Representatives of the group did not return repeated calls for comment. However, its Web site mentions a new town home for sale project in Scottsdale called SkyVista, which the Web site says is expected to be available for purchase in late 2009.

Their neighbor is SkySong, a business, research and technology center that's a collaboration between Scottsdale - which is contributing about $80 million to the project - the Arizona State University Foundation and private developers.

Don Couvillion, the ASU Foundation's vice president for real estate, said the foundation has worked with the nonprofit group on an alley abandonment and in other ways to help it add to the site to allow more units. The foundation, which is the university's fundraising arm, has also met with the group in the past couple of weeks and is helping it secure financing.

"We are working with all our contacts we have in an attempt to obtain additional financing to go forward with their project, but there are no firm plans of what the project will be," Couvillion said. "We'd love to see something happen there and are working to accommodate them as best we can."

Meanwhile, SkySong has submitted for building permits to start construction on its apartments - expected to start by the end of the year. The first phase of about 80 units surrounding the parking garage is scheduled to open by late 2009, with three other phases for a total of 324 units set to be completed by the end of 2010, Couvillion said.

AFFORDABLE HOUSING PLAN

The group's plan was to build up to 64 units, with about one-third reserved for sale to residents making up to 80 percent of the area median income, according to a memo last month from assistant city manager Neal Shearer to the City Council and other city officials. The remaining units would be sold at market rate. In January 2007, the group presented concepts of its town home plan at a neighborhood meeting. Despite some concerns about the "affordable housing" nature of the project, those who attended the meeting gave good reviews to the project that they thought would clean up the residential street.

The project was going to be financed not only with taxpayer money, but also private money which the city says is no longer available. If the project falls through, Scottsdale could have the funds returned and invest them in another similar venture, Ludwick said. The federal grants must be used to benefit low-to-moderate income residents.

The council was notified of the situation last month and told it will be provided with an assessment of options and policy considerations. A council hearing is likely, but no date has been set.

Councilman Bob Littlefield said if the issue came to the council, he would have to see what the request was before making a decision. "But this cracks me up because remember SkySong was going to fix all of this," said Littlefield, who along with Councilman Jim Lane voted against SkySong.

But Mayor Mary Manross said this is due to the downturn in the housing market and has nothing to do with SkySong.

"This project had a lot of support from the whole council and community, (the group) is a strong organization and unfortunately they are not able to secure funding at this point," she said. "It's due to the significant downturn in the real estate market and they are impacted also."

The vacant fenced apartments worry Katherine Lileck, who has lived on Belleview Street since February, because it may paint a poor image of the community.

"I feel bad for the people around here that own homes," she said.