By Ronald Sampson
There has been a concerted shift away from the development hey-days of the past in Scottsdale, when it felt as though any interesting and well-financed idea conceived by developers would make its way through the city council with relative ease. More recently traffic, crowds (i.e. population density) and construction have made activists out of everyday people, and that all played a role in the election of Mayor Dave Ortega and a city council that is significantly more growth-hesitant than it has been in the past.
With this backdrop in mind, the recent requests from DMB Developments and their massive One Scottsdale multi-use development has more than a few people scratching their heads; they are requesting to have a one million square foot chunk of the development which is zoned for office space to be rezoned for multifamily living spaces. According to representatives from DMB, those multifamily units will be both apartment rentals and condominiums/townhouses.
As far as risk/reward scenarios go, this does not seem like a favorable one for DMB, so I am perplexed by the request.
First of all, the rationale is actually very reasonable. They state that the reason for the request is that office space is no longer as marketable as it was previously, so why not shift with the dynamics of the economy? And in fairness to them, one of the biggest economic shifts in this generation has been the decrease in demand for commercial office space as COVID-era work-from-home policies have persisted for many companies, and appear to have become a new normal.
That said, anyone who has followed this iteration of the Scottsdale city council has to understand that this will be a difficult sell, and that’s probably putting it mildly. And that may end up being light resistance compared to what faces them from the citizenry, one that has already been extremely hesitant towards massive expansions like this change implies.
It harkens back to another controversial move, that of Axon’s attempt to rezone a massive expansion in Scottsdale in what appears to have been a concerted attempt to skirt the rules. While Axon’s seems to have been a much more blatant bait-and-switch, and DMB’s could very conceivably be seen as an honest adaptation to the realities of the new economy, it may be tough to convince others of that considering the recency of the Axon fiasco, its freshness in the eyes of many, and the potential for it to turn into a battering ram against DMB.
Interestingly enough, in their most recent change they made, adding additional retailers to the project, DMB made a point of mentioning that the cost overruns to build additional infrastructure to support the expansion were somewhat problematic, adding an extra $4 million to the plans. That may pale in comparison to what awaits them with this move.
As DMB states, they are looking at the longer game, even up until 2030, so the current iteration of council may not be entering into their calculus very much. Perhaps they hope to play a waiting game in the hopes that the city’s current growth hesitancy will wane. We can’t predict the future, so maybe that’s a correct calculation. But a more sober analysis would imply that unless the long term drought cycle that is making water a talking point throughout the state somehow reverses course, the slow-growth ethos is more likely to deepen than it is to reverse.
Perhaps it is a lose-lose situation, and we can’t blame DMB for attempting to make a more profitable use of their property. But maybe they would be better served by finding creative uses for their excess space instead of bringing so many more residents to the area. After all, the millions that they will spend in pursuit of this could be spent to reimagine that space, to incentivize businesses to use that space, or to do something truly special and unique.