The $250 million Scottsdale Waterfront mixed-use development will occupy 11.3 acres adjacent to the Arizona Canal in Scottsdale, Arizona.

Bringing together water and desert, open space and downtown living, and people in general, Scottsdale Waterfront, the planned $250 million mixed-use development in Scottsdale, Arizona, might just settle the argument — bigger is better.

“When people think Scottsdale Waterfront, they think desert and wonder where the water is,” says Michael Newman, president and CEO of Golub & Company. “Obviously, this is a unique feature of the area here and particularly this site because it fronts the Arizona Canal. You’re in an urban area yet you’ll have outdoor space, you have green space and open areas. You’re not just sitting in a high rise surrounded by other buildings. You can walk to the mall, you can walk downtown and you can walk along the canal.”

The 932,000-square-foot Scottsdale Waterfront, a massive three-phased project that will feature office, retail and residential components, is a joint venture between Chicago-based Golub & Company; Greenwich, Connecticut-based Starwood Capital Group; and International Development Management (IDM), headquartered in Austin, Texas. Golub & Company and IDM make up the Scottsdale Waterfront development team while Starwood Capital Group, an equity partner, acquired the 11.3-acre plot 7 years ago.

When completed in 2005, the first phase of the Scottsdale Waterfront project will feature 100,000 square feet of retail space.

“The vacant site has gone through a variety of different plans throughout that time period,” says Newman. “When we became aware of the site and expressed interest in getting involved, they really tried to change the character of what was being proposed for development there and make it more residential-oriented with a little more open space.”

The development will be composed of 11 buildings, including three luxury, mid-rise residential condominium buildings. The office condos will sit atop the retail space with most parking facilities located below grade. The first phase, which will be completed in late 2005, will feature approximately 100,000 square feet of retail and 100,000 square feet of office space with 750 parking spaces. Scottsdale Waterfront’s residential component — “the real bread-and-butter of and impetus for the project,” says Newman — will start with the second phase, which includes 116 condominium residences in a 13-story building.

The development partnership spent most of 2003 going through the entitlement process before getting unanimous approval from the Scottsdale City Council in October 2003. The city of Scottsdale was very active in the planning process. Scottsdale representatives knew there was a lot to be gained from such a dynamic development. “They were very involved and very interested in what we were doing so that what we proposed was not only something that they wanted but something that we knew could make economic sense,” says Newman.

Golub & Company wanted to go grand, so much of the deliberations centered on the scale of the project, specifically the height. The more height given to the Scottsdale Waterfront streetscape and residential towers the more outstanding it would be and thus the more value it would generate. “In order to do what the city wanted us to do, in terms of open space as well as site amenities and quality, we had to be able to bring a product to market that was special,” says Newman. “And height in that area is special because there’s not that much that’s that tall.”

As a large, high-profile development, Scottsdale Waterfront will attract people but it will also connect different areas of Scottsdale. The site adjacent to the Arizona Canal will link the established Scottsdale Fashion Square mall and the city’s Old West district, located just south of Scottsdale Waterfront. The area has never received a lot of pedestrian traffic with people driving either to the mall or their downtown destination. That will likely change. “The things we and the city are doing — putting a bridge over the canal and building an amphitheatre — will spur a lot more traffic back and forth between the two areas,” says Newman. The city committed approximately $10 million to canal bank improvements, landscaping, sidewalks and public art, which will bring in both tourists and residents alike.

Scottsdale Fashion Square and the Old West district aren’t the only areas that will benefit from the development and beautification of this canal-side stretch of real estate. The “infill residential site,” as Newman calls Scottsdale Waterfront, no doubt will reap the rewards of the increased foot traffic with its retail and restaurant offerings. P.F. Chang’s China Bistro and Borders Books & Music are among the many tenants that have already signed on to occupy space there.

“It’s at the premier corner of the premier city in that whole region — Camelback and Scottsdale roads. You’ve got a lot of potential for people who want to live in an urban environment,” says Newman, mentioning the segment of the population that has grown tired of fighting traffic to come in from the northern suburbs. “There will be a number of people who just want to be in a more user-friendly kind of environment — a little more vibrant, a little more lively with plenty of places to go to get away from it all. We’re filling a market, an underserved one compared to the north.”

Newman says that the Scottsdale Waterfront office phase, more than 50 percent of which is already pre-sold, isn’t meant to alter the migration of office tenants out of the Phoenix area to North Scottsdale. He knows, though, that the product and location will turn heads. “The office condo market, which doesn’t necessarily exist in many parts of the country, seems to work here,” says Newman. “The design of the buildings architecturally is very high quality. Because this location is so fantastic, there will plenty of users for the space. You couldn’t build 500,000 square feet of office space here but you could put it at 100,000 square feet and set it up the right way and make it different, which certainly this is.”

The most notable future tenant is the Fiesta Bowl, which submitted a letter of intent to relocate its administrative offices from Tempe to 15,000 square feet of space at Scottsdale Waterfront and establish a 4,000-square-foot retail and museum facility there. The retail and office buildings will be located along the east-west Camelback Road and north-south along Marshall Way.

The Scottsdale Waterfront project team aims for a May 1st groundbreaking. “This is pretty significant certainly in terms of sheer size over the various phases but it’s also big in the statement it’s going to make in the community and in the region,” says Newman.

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