Location: Scottsdale, Arizona

David M. Brown

03/01/2006

Until recently, luxury living in Scottsdale was relegated to the north end of town—in high-desert communities such as Troon, Estancia and Desert Mountain that offer world-class golfing. The formerly lack­luster downtown area consisted of rows of art galleries, a smattering of good restaurants, a few antiquated resorts and a popular shopping mall, but had a dearth of high-end residences. This state of affairs is rapidly changing.

After years of wondering how to enliven its wilted urban center, Scottsdale is now enacting a $2.5 billion face-lift on its 786-acre downtown. Plans include the construction of luxury condominiums, townhomes, lofts and boutique hotels with residential components—all currently selling strongly, with a healthy portion of buyers hailing from outside of Arizona. Both in-state and out-of-state sources will contribute to the revitalization of the area, which will include updates for retail and hospitality properties and city infrastructure.

Loloma 5, a residential structure in Scottsdale’s blossoming Loloma Arts District. Photograph by Bill Timmerman. (Click image to enlarge)

“The downtown market is in its birthing process,” says Mackey Martin, owner and Realtor with Re/Max Discover, which specializes in downtown properties. “There is extreme pent-up demand for this type of product. Downtown is rising up daily to reveal itself as a player for the high-end, sophisticated buyer.” Current buyers range from empty nesters and boomers searching for a less maintenance-driven lifestyle, to out-of-state second-home buyers and academic professionals: a diverse demographic that is expected to enrich the city’s cultural life.

“The 2000 U.S. Census numbered 1,500 people living in downtown Scottsdale,” says John C. Little Jr., executive director of Downtown Scottsdale, the city organization charged with maintaining, developing and revitalizing the image of the area. “That number will increase fivefold or more in the next five to six years.”

“Development in downtown Scottsdale is finally coming of age,” says Scott Jarson, coprincipal of Jarson & Jarson (along with his wife, Debbie), a local firm that specializes in marketing architecturally unique homes in and around Phoenix. “The variety of projects coming to the downtown area reflects this growing sophistication. There is a synergy and dynamism that’s fantastic.”

The Jarsons have represented a number of the smaller boutique developments in downtown Scottsdale, including the Will Bruder–designed Loloma 5, a forward-thinking live/work project downtown that features five 1,550-square-foot units. The project sold out a year ago at $400,000 per unit, but now, Jarson estimates, these spaces exceed $600,000 in value. They were among the first multiunit structures built under the city’s Green Building Program, which encourages a “whole-systems approach through design and building techniques,” says Jarson, to reduce energy consumption and minimize environmental impact.

The Upton development will include 10 Will Bruder–designed courtyard residences. Photograph by Will Bruder Architects Ltd. (Click image to enlarge)

The Duke, another new entry built under the city’s Green Building Standards, is an eight-unit gated community of three-level condominiums just south of the Loloma Arts District. The two-bedroom units are painted in vibrant desert colors and were designed by Scottsdale’s Circle West Architects. The 1,350-square-foot homes will be priced just below $500,000.

Only a half block from the planned 224-room W Hotel, the Upton development comprises 10 courtyard residences, also designed by Bruder and compliant with the Green Building Program. Homes range from 1,900 to 2,400 square feet in size and from $995,000 to $1.25 million in price. Full build-out should conclude by fall 2006.
 
Bruder appeared at a meeting of the Scottsdale Design Review Board in December to applaud the new $250 million Optima Camelview Village, designed by the Chicago firm of architect David Hovey, who maintains his spectacular Sterling Ridge home at Desert Mountain. Bruder described the project as, “architecturally, the finest development proposal ever made in the city of Scottsdale in my residency since 1968.”

Another “green” property, the 1.6 million-square-foot parklike Camelview will include 750 residential units with roofs topped with private garden terraces in 11 buildings, underground parking and interconnected public and private courtyards. It is scheduled for completion by 2008, with initial occupancy starting in spring 2006. Eileen Hovey, broker for Camelview, says the condo homes range from the $400,000s to more than $4 million.One of the pioneers in downtown luxury living is the brick-veneer Third Avenue Lofts, by Avenue Communities in Phoenix. Completed in summer 2005, the $40 million project comprises 84 upscale loft-style terrace units within five stories. The homes sold from $950,000 (1,186-square-foot models) to $3.95 million (3,100-square-foot models). “When we began developing Third Avenue Lofts over three years ago, we were really stepping out of the box as far as development was concerned in Scottsdale because no other project of its kind existed,” said Ken Losch, company principal at Avenue Communities.

Local firm Grace Communities is developing two projects: X (Ten) Lofts—four stories with 82 loft units ranging from $275,000 to $900,000—and Portales Place, 143 residential units priced from $800,000 to $4.5 million. The former targets the urban professional—the latter, the sophisticated, affluent buyer. Both properties emphasize proximity to downtown and ties to its social and cultural life. Similar in tone are the Residences on Main by Philadelphia’s Toll Brothers City Living, a community of approximately 62 three- and four-story luxury townhomes and 85 condominiums adjacent to the vibrant arts district and the refurbished Hotel Valley Ho.

Scheduled for completion in 2007, the Scottsdale Waterfront Residences will include two 13-story towers, housing around 200 luxury units. (Click image to enlarge)
The nearby Main Street Plaza, now under construction, will be a $200 million, 200-unit, four-phase condo and retail project developed by Houston’s Arruth Associates, and Phoenix entities ­Pinnacle Development and the Arts District Group. The first units are scheduled for completion this year. The development will be physically linked to the Scottsdale Artists’ School, the city’s new public plaza and transit center and a proposed $7.5 million Main Street cultural facility. Phase two prices range from $400,000 for one-story condos to $3.2 million for two-story townhomes. “We’ve designed the community for Norman Rockwell moments: people, restaurants, window-shopping,” says Alan Ferris, Arruth’s coprincipal. 

Just across from the popular Scottsdale Fashion Square mall, the Scottsdale Waterfront Residences are part of the 11-acre Scottsdale Waterfront project on the north bank of the Arizona Canal. The 198 luxury condominiums will occupy 490,000 square feet through twin 13-story towers developed by Phoenix’ Opus West and Scottsdale’s Geoffrey H. Edmunds & Associates. Prices for the 1,150- to 4,900-square-foot homes range from the high $400,000s to over $4 million.

Another community, Safari Drive, is being developed by Scottsdale-based Vanguard City Home, which recently completed the 23-unit Bon Vie community in downtown Scottsdale. On the site of the former Safari Resort, Safari Drive is a 4.86-acre waterfront neighborhood that will include nine boutique buildings, composed of 215 live/work lofts, flats and townhomes from 800 to 2,400 square feet, as well as a gourmet market/café. The homes will sell from the mid $400,000s to $2 million. Completion of the initial buildings is scheduled for October 2006. Safari Drive’s live/work units will provide an opportunity for artists, designers and other professionals to live above their businesses spaces. Says Vanguard coprincipal Chris Camberlango: “Safari Drive is a community that will become the most sought-after address in downtown Scottsdale.”

Downtown is also making room for hotel-condos. Scheduled to open in July 2007, the $90 million W Scottsdale Hotel will include 18 condos on the top one-and-a-half floors developed by Triyar Hospitality of Los Angeles and Phoenix. The homes will range from 1,400 to 2,500 square feet; prices have yet to be determined.

The hotel portion of the renovated Hotel Valley Ho, built in 1956 (it is listed on Scottsdale’s historic register), opened in December 2005. Scottsdale developers Westroc Resorts & Hotels purchased the property in 2002. In addition to its 194 boutique hotel rooms and two restaurants (including a Trader Vic’s), the $75 million remodeled property will include 37 residences in the Hotel Valley Ho Residential Tower: two-story lofts, one- and two-bedroom condominiums and seven penthouse suites. Residential units will range from 1,170 to 2,000 square feet and will sell for $600,000 to $1.7 million.

“Vertical living has become an accepted and sought-after lifestyle in downtown Scottsdale,” says Mark Himsl, vertical living specialist with Russ Lyon Realty, broker for the Valley Ho. “Many of our buyers find they need a place in the city to entertain, stay the night after attending the opera, theater, sports games or enjoying a restaurant in Old Town Scottsdale.” Owners at the Valley Ho can opt into the hotel’s rental program, which will cover maintenance issues and arrange rentals. All residences at the Hotel Valley Ho have been reserved, and there is a 500-name waiting list.

Quick sellouts are now the norm in downtown Scottsdale—Mackey Martin says she is seeing buyers with cash in hand: “The problem for consumers is not their ability to purchase because of high prices, but the builders’ ability to furnish inventory.