The short version
The arena plan for the Los Arcos mall died in 2001 when Steve Ellman took the Coyotes to Glendale (see the Los Arcos arena). He still owned the 42 acres at Scottsdale and McDowell roads, and in 2002 he proposed a Walmart Supercenter, a Sam’s Club and a Lowe’s. The council agreed, 4 to 3, to return about half the center’s sales taxes to his company for forty years.
Opponents called it a giveaway to the developer who had walked out on the city. They forced a referendum, the Chamber of Commerce joined them, and Ellman withdrew. On March 9, 2004 voters rejected the agreement anyway, 83 percent to 17, the most lopsided city vote of the decade. Two months later the land went to the ASU Foundation, and the corner became SkySong.
The deal
Ellman unveiled the retail plan at a public meeting on February 5, 2002, Phoenix New Times reported, and went first to the three council members who had fought his arena hardest. A year and a half later, on July 2, 2003, the council adopted Resolution 6324, authorizing a redevelopment agreement with Los Arcos Development, L.L.C., “the Ellman Companies’ designee,” for the site at “the southeast corner of the intersection of McDowell Road and Scottsdale Road.” The vote was 4 to 3. Councilman Ned O’Hearn voted yes: “That’s urban dynamics. This is private enterprise. This is competition.” Councilman David Ortega voted no.
The money depended on who counted. The developer would keep 49 percent of the center’s sales taxes for forty years, the Institute for Local Self-Reliance reported. Opponents put it as “$37 million on a note over 40 years with 7.125% interest,” for total payments “estimated to be more than $187 million.” Supporters answered that the city would still collect “$1,800,000 PER YEAR” from the site, “a whopping $72,000,000.”
The referendum
A committee called STOP’EM, Scottsdale Taxpayers Opposed to Paying for Ellman’s Mistakes, gathered signatures to refer the resolution to the voters. The city argued the agreement was an administrative act that could not be referred; a Superior Court judge disagreed in October 2003, and the council, split 4 to 3 again, chose not to appeal.
The arguments on the March 2004 ballot were blunt. “This is beyond outrageous and has made Scottsdale a laughingstock around the country,” STOP’EM’s chairman wrote, urging voters to “say no to paying a developer who promised us an arena and then left for Glendale.” Ortega: “Scottsdale cannot afford to pay a truant developer to leave town with our money.” The Scottsdale Area Chamber of Commerce, under Virginia Korte, had backed the arena in 1999; now it said “southern Scottsdale deserves a far better fate than a $37 million developer subsidy for three big box stores.”
Every argument for the deal was paid for by a committee called Shopping for Los Arcos, “primary funding provided by Los Arcos Development, LLC.” Its chairman, a co-chair of the Los Arcos Neighborhood Coalition, had fought the arena: “I was one of the primary opponents of the arena plan for Los Arcos … Now, I support the new proposal.” Another supporter put the south side’s grievance plainly: “Subsidies are frequently given out in Scottsdale although usually involving projects from Osborn north. We taxpayers of south Scottsdale paid for those subsidies. Now it’s payback time.”
The vote and after
Ellman scrapped the plan in February 2004, but the question stayed on the ballot. On March 9, 2004 voters rejected Proposition 300, 29,444 to 5,856. The same ballot rejected district elections for the council and sent Ortega, the deal’s council opponent, into a mayoral runoff with Mary Manross.
In May 2004 Ellman sold the site to the ASU Foundation for $41.5 million; the foundation sold it to the city for the same amount, and the city leased it back to ASU for an innovation center. That deal drew its own opponents: Councilman Bob Littlefield objected that the city would collect no property taxes, sales taxes or rent on the land ASU used, and a committee tried and failed to gather enough signatures for another referendum, the State Press reported. The design was chosen and the site rezoned in 2005, and the center opened as SkySong in 2008 (see March 27, 2008).
The Los Arcos fights ran most of a decade. Voters twice approved public help for an arena there in 1999 and, five years later, overwhelmingly refused it for a retail center. The 2000s politics chapter sets the vote beside the decade’s other referendums.