By J. Graber | Daily Independent
If the three rules of real estate are location, location, and location, then where is Scottsdale?
Once thought of as one of the Valley’s hotspots for growth, Scottsdale seems to be cooling.
Just six rezoning requests for new development have crossed the city planners’ desks from Jan. 1 to Aug. 15 of this year.
That’s down from 11 for same time period per year for the past three years. In the pre-COVID era, there was 14 for the same time period in 2019 and 16 in 2018.
There could be a number of reasons for the downturn.
City Councilwoman Kathy Littlefield, who is often called a “no-growth” council member, blames much of it to unstable economic times.
“A lot of the country is worried about facing a recession,” Littlefield said. “They don’t quite know what’s going to happen in the political arenas across the nation, and I think that is reflective on how much money developers and others, individuals also, are willing to risk renovating or redoing or building large businesses.”
She also says part of it is there is less prime real estate to develop in Scottsdale than in the past.
“As you build up, the available land becomes less … If I were a developer I would look at ‘What land can I buy at that location and at that price,’ and ask ‘Can I make a profit if I do what I want to do on it?’” Littlefield said.
But political and economic uncertainty do not seem to be holding back developers with projects already been approved by the city council.
Through the first seven months of 2023, developers pulled 122 building applications for projects already approved by the city council. That compares with 46 projects for the same time period in 2022 and 33 for the same time period in 2021.
City Councilwoman Tammy Caputi has a different view for why developers aren’t bringing new projects to Scottsdale, and that is the council itself.
The current council is seen as a “no growth” council that won’t approve new projects, so there is no reason to take them to council in the first place, she said.
“We should never become complacent or forget how we got here,” Caputi said in an email to the Daily Independent. “Successful communities like Scottsdale are constantly adapting and evolving to meet the needs of our residents. This is why people want to live here. Our resorts are constantly revamping, our retailers rebrand, our empty warehouses and offices are repurposing. We have a winning formula, with a strong, growing economy, and that’s how we have maintained our position as the gold standard of the Valley. If we don’t maintain strong economic vitality, we won’t be able to offer our residents the highest amenities at the lowest tax level.”
Larry Kush, senior vice president of Orion Investment Real Estate and a developer for 40 years who sat on the Scottsdale Planning Commission for six years, agrees with Caputi.
“I sell land and I work with almost every major multifamily developer in the country, and most of them will not touch Scottsdale because of the city council; it’s such a bad place to do business,” Kush said. “The NIMBYs have taken over Scottsdale. (Developers) are tired of showing up for council hearings and having two frustrated, unpleasant women who live in south Scottsdale fight to the death to keep apartments off the streets of Scottsdale. So they’ve given up. I had one client spend $1 million on a building only to lose eventually.”
Kush is talking about the 94 Hundred Shea project that would have added a 219-apartment, mixed-use development across from HonorHealth Scottsdale Shea Medical Center near the intersection 92nd Street and Shea Boulevard. The developer ultimately pulled the rezoning request from the council’s agenda when it did not look like they had enough votes to approve the rezoning request.
Kush blames the no-growth council on three council members specifically — Littlefield, Mayor David Ortega and City Councilwoman Betty Janik.
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Related: Developer Kaplan Postpones Residential Component of 94 Hundred Shea Project