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Growth Summit Scottsdale Sees New Business Sectors as Pathway to Growth

By May 25, 2023No Comments

By Ron Davis | Phoenix Business Journal

Scottsdale is known within and outside of the Valley as a tourism and party destination, but the city is looking to ramp up its target industries, which are finance, health care, technology and logistics management.

Some of those are coming to new existing and new offices throughout the city.

On the north side of town, a corporate corridor is in the infancy stages of development. Big projects such as Nationwide Realty Investors’ Cavasson have a few office buildings up and running and is considered one of the top office destinations in all of Scottsdale. Nearby, DMB Associates Inc.’s One Scottsdale is also coming out of the ground. In addition to the momentum of these projects, Banner Health and HonorHealth have committed to major expansions through big investments.

Beyond what’s coming out of the ground now, Scottsdale’s Economic Development Director Rob Millar estimates there are between 500 and 700 acres of land in north Scottsdale that could support another two or three corporate headquarters campuses. Once those acres are built out, Millar said at the Phoenix Business Journal’s Growth Summit Scottsdale held on May 23, that the city will need to become more creative with the redevelopment of older and underperforming buildings.

For the eventual build-out of that corridor and when it comes to proposing new projects, panelist Jason Morris, a land-use attorney and partner at Withey Morris Baugh PLC, said he expects a lengthier back-and-forth dialogue with Scottsdale compared to other cities.

“It’s OK to exact incredible standards and that’s what’s made Scottsdale beautiful, renowned and internationally known. But, on a local level, very, very difficult — entitlement, timelines, effort that you will go through or even the possibility of rezoning — there’s a different matrix you look at when you’re dealing with the city of Scottsdale,” he said. “Talking about and seeing vacant land and understanding what it can and cannot be used for are two entirely different things.

“There are fewer projects being proposed because there is at least the inclination that you cannot get large, dense, complicated projects through because there’s not a political will in many instances to stick your neck out and get it approved,” Morris added. “Your voices need to be heard because the council is constantly hearing from 2% of the population that doesn’t want anything changed. …Engagement is probably our single biggest problem.”

Andrew Cheney, a principal at Lee & Associates Arizona, is the listing broker for the five-building SkySong development in south Scottsdale, which he said commands more inquiries than any other of his listings. A sixth building is in the cards, but the developers need between 100,000 to 140,000 square feet of the building pre-leased before moving ahead on construction. He added that construction pricing and market dynamics have also played a role in projects taking a bit longer to start.

“The [office] market is still finding its way. It’s like walking through a sandstorm right now,” Cheney, a panelist at the Growth Summit, said. “A few years ago, someone might have the confidence to say ‘I’m going to assemble this parcel and get top-of-the-market rents. Right now, they’re not so sure.”

The impact of SkySong has been felt across the street with the reimagined Papago Plaza shopping center. The redeveloped center will be anchored by Sprouts and include a hotel, an apartment complex and local restaurants and retailers.

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