By Roland Murphy for AZBEX BEXclusive
In a move intended to take advantage of perceived market shortcomings and maximize development opportunities, City of Phoenix planning and economic development officials have announced a draft incentive plan to encourage developers to submit taller and denser multifamily plans along the city’s eastern edge.
In announcing the plan, a Phoenix spokesperson said, “Scottsdale has adopted a general plan that sets ‘highest density’ at some ridiculously low dwelling units/acre, and developers will be hard-pressed to get anything taller than four stories approved even in the most dense and thriving areas. Our leadership decided, ‘Hey, if Scottsdale won’t act in its own interests and meet demand, we should.’”
Several recently approved Phoenix developments on the two cities’ border have raised consternation in Scottsdale, both among area character-focused residents and officials. “In Phoenix, on the other hand, we’ve approved densities from 50 units an acre all the way up to 100, right on the Scottsdale border,” the spokesperson said.
“Developers started getting calls from prospective tenants even before the approvals were granted. That’s what gave us the idea for the new plan. If people want to live in Scottsdale but can’t, let’s do everything we can to give them a place right across the street. We’re already in pre-submittal discussions with a couple of developers who want to go as high as 18 stories and 200 units an acre. We get the residents, the residents get, ‘The Scottsdale Experience,’ or whatever, and we get the property taxes. It’s beautiful.”
Talking about the projected need for residential units in the Valley, the spokesperson said, “We haven’t been on pace to deliver anything near what we need, but with this new plan, we’re going to be in a position to take a really good whack at it.”
Scottsdale officials have previously acknowledged they were powerless to stop Phoenix from approving high-rise developments on the border but expressed regret that Phoenix’s approvals were not in keeping with the generally expressed desires of Scottsdale.
“Sure, Scottsdale’s going to grumble,” the spokesperson said. “They really should be thanking us. All the 15-story-plus buildings we’re going to put up will give them all kinds of shade in the late afternoon, which will really help them with cooling and energy efficiency.”
The Program
Under the new incentive program’s preliminary details, Phoenix will waive permit and plan review fees for any developer seeking to build multifamily or multifamily/mixed use projects of more than 15 stories and densities greater than 100 units/per acre within 1,000 feet of the city’s shared border with Scottsdale.
The City will also provide expedited approvals for demolition permits to raze any existing retail or commercial development along the border to make way for the new developments. The City is in discussions with its legal representatives to add an eminent domain component.
“If some mom-and-pop single-story restaurant or vintage shop or whatever wants to stand in the way of progress, we’re going to buy them out and move them,” the spokesperson said. “We eventually want to see a solid line of 10- and 15-story buildings from McDowell all the way to the 101,” the spokesperson said.
Developers who were part of the plan formation discussions were elated at the draft document. Developer Thaddeus Thorndike-Throckmorton IV, founder of Minnesota-based investment and development consortium Wild Abandon Capital Group, praised the plan, saying, “I’ve had three out of four development proposals shot down in Scottsdale in the last two years for being too dense, too tall or not in keeping with neighborhood character, whatever that is. These were luxury developments that would have started at over $2K a month for a one-bedroom unit and would have been fully leased within 90 days of opening for applications.
“Fine. I’m done,” he said, brushing his hands over each other back and forth. “There’s really no difference between the two cities anymore, and if my residents want to go do something in Scottsdale proper, all they have to do is go across the street. I’m already in talks with financiers in New York, Tokyo and the European Union. Scottsdale can tread water if it wants to, but this is going to open a floodgate.”
Scottsdale officials were unavailable for comment.
The full text of The Phoenix-Scottsdale Sky High Border Redevelopment Initiative is available here.