Local developer De Rito Partners bought Scottsdale Pavilions for $88 million and is planning a major makeover of the languishing shopping center at Indian Bend Road and Loop 101.
The 1.1 million-square-foot open-air shopping center will get a $10 million face-lift and up to 150,000 square feet worth of additional stores to start, said Chuck Carlise, president of De Rito Partners Development.
The company plans to hold several community sessions to find out what else the center’s neighbors want there in the long term, he said.
De Rito envisions more stores, offices and possibly a hotel on the 135-acre property that, despite its name, is actually on Salt River Pima-Maricopa Indian Community land, stretching from the Scottsdale border to the Pima Freeway.
The purchase price includes the long-term land lease rights for the Indian-owned property as well as the sprawling shopping center.
Indian land can’t be sold, but the Salt River community can extend land leases to developers for up to 65 years, said B. Bobby Ramirez, Salt River’s director of community development.The center’s new owners plan to spend at least $25 million on the makeover, but Carlise expects the tab to be significantly higher.
Work on the first phase could begin in the next three months, he said.
The Salt River community is thrilled with the plans, Ramirez said.
“De Rito adds an energy that hasn’t been there for some time,” he said. “They are going to do a comprehensive face-lift, increase the footprint, provide a whole new opportunity (for retail and other amenities) for consumers to enjoy. It will pay off tremendously. And it will tie in nicely with other economic development we’re working on in the (Loop) 101 corridor.”
Scottsdale Pavilions was originally built in 1989 and was so successful from the start it doubled in size two years later. It was Arizona’s first so-called “power center,” a mall-sized outdoor shopping complex anchored by bunches of “big-box” retailers such as Target, Circuit City and Home Depot.
In fact, it was just the second power center in the United States, Carlise said.
Local developers, the Horlachers, teamed with emerging retail developer Vestar to build the new-style shopping center on Indian land when Scottsdale leaders at the time refused to allow it within the city’s boundaries.
When Scottsdale Pavilions opened, results were exactly the opposite of the expected upscale Scottsdale shoppers’ snub of big-box discounters.
Sales tax leaked from Scottsdale’s elegant shopping centers to Pavilions in such a torrent, city leaders scrambled to get power centers built quickly within city boundaries by dangling financial incentives to developers.
Three — Scottsdale Fiesta, at 90th Street and Shea Boulevard, and Scottsdale Towne Center and Sonora Village on opposing corners at Pima Road and Frank Lloyd Wright Boulevard — were under development within a couple of years.
The power center concept was so successful nationwide, it led to major revisions in the design of traditional malls.