Scottsdale betting McDowell corridor will regain former glory

There was a time when Al McCarthy thought about moving his sports bar away from McDowell Road.

“Both sides of the street up and down were basically empty,” said the owner of Duke’s Sports Bar in south Scottsdale. “I couldn’t afford to go anywhere else. There was no future to the street.”

By 2008, McDowell Road, once a commercial power center of Scottsdale, was at the end of a decadelong downturn triggered by the closure of Los Arcos Mall and numerous auto dealerships.

Accelerating the descent were the loss of key anchors, aging shopping centers, and stiff competition from newer and bigger retailers opening across the Valley. Car dealerships along the once-booming corridor — dubbed the “Motor Mile” — had closed, leaving behind empty lots, forsale signs and the hope of redevelopment.

“I looked at moving, there was no question,” McCarthy said. “There wasn’t much left here besides myself and a few franchise operations.”

Such scenarios frequently play out in aging areas of cities: Blight, antiquity and complacency settle in as the norm.

But in Scottsdale, the story is not over.

The McDowell corridor, 8 square miles from Pima Road west to Papago Park in Phoenix, is experiencing a resurgence as new apartments, businesses and city upgrades are pumping new energy and life into the area.

The rebound of the once-golden commercial entryway into Scottsdale was recently affirmed when Cox Communications chose the Mark Taylor San Travesia Luxury Apartments on McDowell Road as one of the first Valley sites to offer its lightning-fast Internet service.

“We are really not a story of gloom and doom,” said Dana Close, a longtime resident of south Scottsdale and a founding member of the Scottsdale Gateway Alliance, a private group working to revitalize the area. “We are a story of possibilities.”

McDowell: Heyday to woes

The year was 1960. Construction had recently finished on McDowell Road through the sandstone buttes of Papago Park, offering Valley drivers a new east-west route between Phoenix and the growing East Valley.

With a centralized location drawing heavy traffic, McDowell Road quickly became an epicenter of retail activity.

Raoul Zubia, a downtown Scottsdale resident, grew up in a neighborhood south of McDowell Road and recalled its heyday in the 1970s.

“Picture the energy of downtown Scottsdale now,” Zubia said. “It was similar to that. I would call it more family-oriented.”

McDowell was “the heart of Scottsdale,” said Jay Harper, 55, who was a toddler when his family opened a nursery off Hayden Road near McDowell in the early 1960s. It was the second location after the original Harper’s Nursery opened in central Phoenix, he said.

Harper, who continues to run Harper’s Nursery in Scottsdale, attended nearby Tonalea Elementary School and recalled the 1969 opening of Los Arcos Mall.

“It was a huge deal,” he said. Harper recalled the closeness of the neighborhood. “We had a 15-cent Coke machine so kids would stop by on their way to school and get a soda,” he said.

For 30 years, McDowell Road drew some of the highest traffic counts of any road in the Valley. The intersection of Scottsdale and McDowell roads was one of the busiest until the major freeways opened, according to a Scottsdale report documenting the rise, fall and resurgence of McDowell Road.

Los Arcos Mall struggled as newer malls, such as Fiesta Mall in Mesa and Scottsdale Fashion Square 3 miles away in Scottsdale, opened with better amenities.

By 1995, Los Arcos Mall was declining. Federated Department Stores announced the closure of its Broadway store at the center, leaving the long-standing shopping center with its last anchor tenant, Sears, and setting the stage for its demolition several years later.

The Los Arcos site was “the eyesore and the sore point of the community, with a number of different thoughts of how it would be used,” Scottsdale Mayor Jim Lane recalled.

Developer and then-Phoenix Coyotes owner Steve Ellman purchased the mall in the late 1990s.

A Phoenix Coyotes hockey arena was proposed, surrounded by a significant mixed-use and entertainment area. The city, still in the throes of young adulthood, was faced with the challenge of redeveloping an area for the first time.

In 1998, the Scottsdale City Council voted to fund the redevelopment of the aging mall property into a new hockey arena for the Coyotes. But community opposition, a divided City Council and other obstacles led to the Ellman Cos. bidding farewell three years later.

In 2001, Glendale and the Phoenix Coyotes reached a deal that lured the hockey team away from Scottsdale. Ellman was at odds with Scottsdale, and Glendale came around with a sweeter deal, according to Arizona Republic reports at the time.

“We woke up one morning, and Steve Ellman said he’s leaving that property and going to build the arena in Glendale,” Lane said. That deal was “several times what Scottsdale had offered,” he said.

In March 2004, Scottsdale voters overwhelmingly rejected a proposition for another redevelopment plan by the Ellman Cos. for the former Los Arcos Mall site.

The failed agreement, which included a Walmart, Lowe’s Home Improvement Center and Sam’s Club, would have given Ellman $36.7 million in subsidies. By rejecting the measure, voters nullified a prior council vote to approve the plans.

The city decided to take action. In July 2004, a council majority chose to buy the 42-acre Los Arcos site for $41.5 million — higher than its appraised value, Lane said — so that the Arizona State University Foundation could develop an innovation campus, now known as SkySong.

Overall, the city invested $81.4 million for the property, as well as infrastructure improvements. The campus was envisioned as a state-of-the-art research, business university and retail complex — an “idea factory” to lure jobs and jump-start revitalization.

SkySong evolves

In 2008, SkySong opened to much fanfare.

Six years later, the center with research and commercial space has opened a residential element, called SkySong Apartments, and a third office building, SkySong III, is nearing completion. Construction of a fourth office building is scheduled to begin this year.

In exchange for a 99-year ground lease, the ASU Foundation agreed to build 1.2 million square feet of office space in phases and share with the city half of the profit, according to Republic reports at the time.

But SkySong has not reported any profit, and the city has yet to receive any payment. In February 2012, the City Council amended an agreement with the ASU Foundation to change the rent payment calculation. The change will result in actual payments to the city starting this year, said Dan Worth, Scottsdale’s public works executive director.

The first payment of $139,000 is due Aug. 1, Worth said.

Lane said the city stands to gain only the amount of its investment back — nothing more.

“The concept of SkySong is OK, but I’m not particularly thrilled with the contract,” he said.

Other sites that have undergone redevelopment along McDowell include the former Los Arcos Crossing shopping center and its Bashas’ grocery store, which closed at the southwestern corner of Miller and McDowell roads. The abandoned center is being replaced by Mark Taylor’s 572-unit apartment community, San Travesia, with the first buildings slated to open later this year.

Cox Communications recently announced that San Travesia would be one of the first in the Valley to get its new gigabit super-high-speed Internet service.

In 2007, a Lowe’s Home Improvement store opened at Hayden and McDowell roads, replacing an aged Kmart.

“That’s when people thought, ‘Maybe this neighborhood isn’t going to die,’ ” McCarthy said.

Additionally, Chason Development plans to build its Las Aguas apartment complex on the north side of McDowell, west of 68th Street.

An abandoned car dealership on the north side of McDowell Road east of 68th Street has “a lot of interested parties,” Lane said.

Building a sense of place

The McDowell corridor includes neighborhoods as far north as Osborn Road and south to the city’s limits generally along McKellips Road.

From a residential standpoint, the demographics of south Scottsdale are changing, said Close, who lives in the Hacienda del Rey neighborhood off McDowell Road.

Younger families are moving in, enticed by the sturdy brick homes in established neighborhoods and proximity to downtown Scottsdale, Tempe and Phoenix Sky Harbor International Airport, Close said.

“When older areas rise up, they end up developing a unique sense of character and a real sense of place,” she said.

Virginia Korte, a city councilwoman whose family owned Ray Korte Chevrolet at the northeastern corner of McDowell and Scottsdale roads for decades, said once more residential communities are in place, “the retail will return.”

“McDowell will re-establish an identity, a real sense of place as a destination with everything people want,” Korte said.

Scottsdale also has several projects planned along the corridor.

• The city will widen the northern sidewalk along McDowell between Scottsdale and Miller roads. The public project, costing $95,000, will begin late this year or early 2015, according to the city.

• A $2 million project beginning in late summer will widen the McDowell Road bridge over the Indian Bend Wash greenbelt, adding bike lanes and sidewalks.

• The city’s new budget includes a $450,000 investment for better transit service, mostly on McDowell Road. This includes an expansion of Valley Metro bus Route 56 to McDowell Road. The route begins in Chandler and stops at the Desert Botanical Garden and Phoenix Zoo.

“If investors see the city is doing its part, they will want to invest,” Close said.

Ideas not yet firm

Private parties also have floated more far-reaching ideas to breathe new life into the corridor.

Doug Sydnor, a Scottsdale-based architect, and Jason Rose, president and founder of Rose+Moser+Allyn Public Online Relations in Scottsdale, introduced a proposal in 2011 to connect the Indian Bend Wash with Papago Park, perhaps with an elevated trail.

The trail, once estimated to cost $75.3 million, could include street-level access at major intersections and stadium seating for views of Papago Park.

Although the idea has yet to gain traction, Rose says he still would like to see the trail built. It would be a “unique economic development and recreational element, tying the Indian Bend Wash with Papago Park to spark additional investment in the area,” he said.

“Whether at grade or elevated, it would be the largest piece of art ever constructed in Scottsdale,” Rose said.

In another effort, Lane has expressed interest in acquiring a stake of Papago Park, which is in Tempe and Phoenix. Scottsdale could annex a portion of the park, which borders Scottsdale on the north and east.

“It would be good for Scottsdale to have a footprint,” Lane told The Republic in March. Scottsdale “could participate in the continuing enhancement of the park in the tri-city area.”

McDowell Road still faces obvious challenges, including shallow rectangular lots along the corridor that limit types of development.

Kim Chafin, Scottsdale senior planner, said many lots are small and next to existing residential communities.

“Then you have the issue of commercial next to residential, and you have to find a way for them to live in harmony,” she said.

Residents have expressed a desire for a boutique grocery store and more casual dining restaurants.

But “a city cannot compel a business to locate,” Chafin noted.

Zubia said the area needs amenities to attract apartment tenants and persuade them to stay in south Scottsdale.

“I think people are waiting to see what happens after the apartments open before a resurgence takes place,” Zubia said.”People are going to rent them, but what is going to keep them in the area?”

POW camp part of McDowell’s History

Years before McDowell Road became a center of commerce in Scottsdale, it was a part of Arizona’s contribution to World War II.

Camp Papago Park, as it was known during WWII, housed an estimated 1,700 German enlisted men, most of them submariners. It originally was set up as a compound near today’s 64th Street, near the Crosscut Canal and stretching west to the current National Guard Armory. Some of the base officer residences were set up in Scottsdale.

The camp produced one of the most legendary Arizona-related wartime stories, described by Republic columnist Clay Thompson in a 2011 article as “the great escape by 25 German prisoners of war from their impoundment at Papago Park.”

“It was the largest prison break by Axis POWs in American history. It happened Dec. 23, 1944,” the article recounts.

Prisoners called the place Camp Schlaraffenland — the land of milk and honey, according to Thompson.

The holiday escape took place when some of the prisoners dug a lengthy tunnel. Thompson’s account explained that “under the cover of a noisy party they had arranged for other prisoners to celebrate German victories in the Battle of the Bulge, 25 POWs crawled to freedom.”

Here is how Thompson explained the rest of the ill-fated endeavor:

“From the start, things didn’t go well.

“Three men brought with them the components of a boat. They planned to reconstruct it and float down the Salt River to the Gila and Colorado rivers to reach Mexico and freedom.

“On paper, this must have sounded like a good idea. What they didn’t know was there wasn’t any water in the Salt. That put a damper, so to speak, on their plans.

“So the escapees scattered around the area. It was a cold and rainy night.”

Thompson goes on to explain that “most of the escapees were rounded up within a few days” with more than a few turning themselves in hoping to return to the relative comfort of the camp. A few remained free much longer before being recaptured.

Several structures that served as camp officers homes in Scottsdale were torn down in recent years.

A brief history

1960: McDowell Road through the Papago Buttes opens from east Phoenix into Scottsdale.

1960-69: Wave of commercial development along the road, including Papago Plaza, Ray Korte Chevrolet (the first auto dealership) and Los Arcos Mall, all at Scottsdale and McDowell roads. Scottsdale’s first park, Eldorado Park, opens farther east.

1970-79: Major flooding along McDowell closes the road and disrupts access to Los Arcos Mall.

1980s: The concentration of car dealerships continues to grow during this decade.

1990s: Redevelopment discussions begin for Los Arcos Mall site. Loops 101 and 202 open and begin expanding in the East Valley, attracting new autoplexes.

2000: Los Arcos Mall is demolished; a proposal to redevelop the site as a Phoenix Coyotes hockey arena falls through.

2004: Auto dealers market themselves as the “Motor Mile” hoping to stem the exodus of car dealerships to new autoplexes elsewhere in the East Valley.

2008-present: SkySong, Arizona State University’s Innovation Center, opens at the former mall site. It expands to add residential components and announces plans to add a commercial element. Other investment comes as new apartments break ground or announce plans. This week, records filed with the city confirm that plans to redevelop Papago Plaza into a new commercial center west of SkySong are taking shape.

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