McDowell Road rebirth is ‘primary goal’

By Edward Gately

The Republic | azcentral.com

As a longtime stakeholder in south Scottsdale’s McDowell Road corridor, Councilwoman Virginia Korte fondly re­members its heyday and looks forward to seeing its resurgence.

The nearly 3-mile stretch from Loop 101 to 64th Street was particularly hard hit by the recession, with abandoned auto dealerships and retail outlets.

“I believe that in another five, 10 years, McDowell is going to be an important cen­ter of commerce and we’re going to redo its sense of place here in Scottsdale,” Korte said. “I think there’s a lot of good, creative thinkers here as far as investors and developers, and I think there are more people willing to look at this area as a potential center for investment.”

The councilwoman’s family owned and operated Ray Korte Chevrolet for 28 years at the northeastern corner of Scottsdale and McDowell roads. They re­cently sold the nearly 8-acre property to Scottsdale-based Clayton Cos., owned by Tom and Jane Frenkel.

Tom Frankel couldn’t be reached for more information on the purchase.

The McDowell corridor’s heyday be­gan with the opening of Los Arcos Mall, the Valley’s first indoor shopping mall, in the early 1970s. Its “unique indoor char­acter” attracted people from across the Valley, but that attraction declined as oth­er malls were built and freeways re­moved cut-through traffic, Korte said.

The early 1990s saw the transforma­tion of the McDowell corridor into the Motor Mile, which at its peak included more than 30 auto dealerships.

“At one time, the retail sales tax gener­ated out of that mile was 9 percent of the city’s budget,” Korte said.

The recession led to a mass exodus of dealerships prompted by a lack of traffic, which led to the corridor being lined with vacant dealership properties.

Now, an apartment complex under construction at SkySong, the Arizona State University Scottsdale Innovation Center, is the first of many large projects headed to the corridor, and others are slated to come out of the ground in the months ahead, fueled by an increase in in­vestment in the corridor.

SkySong is on the southeastern corner of Scottsdale and McDowell roads.

“What is happening now is a resur­gence of additional apartments being planned and built along McDowell,” Korte said. “SkySong is an important cat­alyst for commerce and they bring 2,000 workers a day into that area. Also, the clo­sure of dealerships was driven by lack of traffic, so it’s nice to see some dealership properties being repurposed, such as Berghoff Design Group.”

Other, far-reaching ideas for the corri­dor include an elevated trail above the center of the street from the Indian Bend Wash to Papago Park, as well as a light­rail destination.

Danielle Casey, the city’s economic-de­velopment director, said redeveloping the McDowell corridor is a “primary goal of the city.”

“It’s an exciting time,” she said. “We are working on items to present to the City Council to see what approach they would like us to take in terms of address­ing McDowell.”

New era

In addition to the apartments, SkySong developer Plaza Cos. is planning to build two office buildings, totaling about 290,000 square feet, west of the existing office buildings and east of Scottsdale Road.

“Construction on SkySong III will be­gin in the next couple of months,” said Tom Evans, Plaza Cos. spokesman. “We will be making a more formal announce­ment with additional details in the coming weeks.”

Just east of SkySong, Mark Taylor has started construction on an AutoZone that’s being relocated to make way for the developer’s 572-unit, gated apartment community.

The AutoZone should be completed in November, while the first phase of the apartment complex, including 440 units, should be under construction by mid-Oc­tober, said Chris Brozina, Mark Taylor’s vice president.

“Phase I will also include the leasing office, pool area, main amenity spaces, courtyard areas and the entire perimeter boundary,” he said. “The 440 units is all of the frontage on McDowell … from 74th Street to Miller Road. We’re looking at the first buildings opening for leasing in Au­gust of next year. We’ll probably start Phase II in summer of 2015.”

Interest in the complex has been in­creasing as it will feature larger units than most complexes, Brozina said.

Other multifamily projects to be built on the corridor include Las Aguas, with 220 units on the northern side of McDow­ell at 68th Street, and 77 on the Park, with 66 units south of McDowell on 77th Street.

A new organization has formed with the goal of directing more attention to the McDowell corridor. The Scottsdale Gate­way Alliance is a “boots-on-the-ground” effort committed to taking south Scotts­dale in a direction that’s good for resi­dents, businesses and the region.

The alliance’s chairman is Jeff Bergh­off, who purchased and renovated a for­mer auto dealership, at 7000 E. McDowell Road, and transformed it into the head­quarters of his company, Berghoff De­sign Group. He employs about 275 peoplethere.

‘Blight of Scottsdale’

“McDowell, for many years and still in many ways, is probably the blight of Scottsdale,” he said. “You had all these dealerships disappear and go into mega­centers … and left buildings essentially decaying and falling apart.”

McDowell has many resources and at­tributes at its anchor points, “but what’s in between is lacking,” Berghoff said. The alliance wants to spread the word and tell investors not to go to north Scottsdale, but to bring their headquarters and other de­velopments to McDowell, he said.

“We have all been impacted over the years by the decline of this area, but the possibilities along McDowell Road are endless,” he said. “We can make it a desti­nation. Reinvestment is already happen­ing, but we must encourage other busi­nesses to follow suit and seize on the am­ple opportunities that currently exist.”

Investments in future development in­clude Sun Chase Holdings, which has as­sembled 30 acres of individually owned auto-dealership sites at the northeastern corner of McDowell and 64th Street.

In addition, Clayton Cos.’ purchase of the Korte dealership could prompt future redevelopment on that site. The Frenkels, longtime Scottsdale real-estate investors, own and have redeveloped numerous properties in the downtown area.

The Scottsdale Gateway Alliance wants to be “a place where people come together” and make others, including po­tential investors, aware that the McDow­ell corridor isn’t “sitting here idle or sit­ting here being the mess that it was,” said Dana Close, the alliance’s treasurer.

Vice Mayor Suzanne Klapp said the time is right for the resurgence of the McDowell Corridor.

“There’s a recognition that that area is very close to Phoenix Sky Harbor Inter­national Airport, Phoenix and Tempe, so it’s close to a lot of other areas that are well-developed,” she said. “It makes sense for owners and potential owners to take a look at it with new eyes now that the economy is starting to turn around.”