Hotel to replace condos at SouthBridge project - East Valley Tribune: News

Hotel to replace condos at SouthBridge project

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Posted: Wednesday, September 24, 2008 10:43 pm | Updated: 11:59 pm, Fri Oct 7, 2011.

Scottsdale has approved a deal to scrap high-end downtown condos and instead support an extended-stay Element hotel along the Arizona Canal on the westernmost site of the SouthBridge project.


The planned three-story, 125-unit hotel is being financed by Lewis Wolff, owner of the Oakland Athletics baseball team and chairman of Wolff Urban Development, a real estate and development firm. Wolff is also the co-founder of a hotel investment group that manages top-tier luxury hotels.

The Element is a relatively new concept by Westin, and is part of the Starwood Hotels chain. The first one opened in Massachusetts, and many more are planned to open around the country and in Canada in the next couple of years, including Tempe. The Element Web site says the brand offers an environmentally friendly hotel with a full kitchen in each guest room and “renewal through a nature-influenced environment.”

“I’ve heard the message about the design and we will do a good quality job on that to make sure it’s compatible and looks good,” SouthBridge developer Fred Unger said.

The hotel design is not completed, but is expected to go before the Scottsdale Development Review Board for approval in December.

Construction could start by summer, Unger said.

The $96.4 million project at the northwest corner of Fifth Avenue and Goldwater Boulevard will also include some retail spaces and a restaurant.

The City Council voted 6-1 Tuesday to amend the development agreement with Unger, which was first approved in July 2005 after a competitive bid.

“What this accomplishes is even better than what was planned before,” said Councilman Wayne Ecton of the originally agreed-upon 42 condos.

East of Goldwater, the first SouthBridge restaurants and shops opened about a year ago. Unger also has approval to build 12 three-story brownstones just to the west of the current SouthBridge project. While half of it is pre-sold, financing is not available, Unger said. The final portion of the project will be just to the east of Goldwater and will include 11 lofts with stores.

Scottsdale officials point to a number of benefits to the city from the hotel. First, hotel construction could start shortly, unlike condos where there is no market downtown for the foreseeable future. In addition, the hotel is projected to bring in $275,800 a year in sales tax and bed tax for the next 10 years.

Unger would also pay the entire cost of improving the canal bank in front of the hotel, saving the city an estimated $150,000. And as a limited-service hotel, patrons are more likely to venture out to dinner to places outside the hotel.

The agreement does not come without costs to the city. The land value of the hotel site is $3.5 million. Moving the city rose garden also will cost an estimated $100,000.

The council also agreed to extend construction deadlines.

The plan had the backing of nearby businesses.

Pat Lamer, a resident north of the canal, said the hotel was looked upon favorably but there are still concerns about lighting, noise and views into the neighborhood.

The lone dissenter was Councilman Bob Littlefield, who said he liked the plan but not the process because amending this agreement could set a precedent for other developers.

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