Venetian Blind

Will Scottsdale voters preserve "The West's Most Western Town," or opt for "a little bit of Venice"?

In the theater of money and power in Scottsdale, Arizona, Fred Unger's enemies have cast him in the role of Evil Developer. Unger's vehicle certainly fits the part -- a new Chevy Suburban, black on black.

"Let me be completely honest with you," Unger says, deftly piloting his gun ship up the conch-shell circles of the Nordstrom parking garage on East Camelback.

"I do not think like a typical developer. I have one goal in this plan: to create a uniquely Scottsdale experience that is a point of pride for all residents.

Canals of Scottsdale point man Fred Unger.
Canals of Scottsdale point man Fred Unger.
Canals of Scottsdale point man Fred Unger.
Paolo Vescia
Canals of Scottsdale point man Fred Unger.

"The citizens of this community will not stand for gross commercialism, and I am not about to try and force it upon them."

Unger, owner of Spring Creek Development, smoothes the Suburban to a stop on the southern edge of the garage's top level.

"See the clock tower? That's where the five-star hotel will go."

He points toward the heart of Scottsdale's old, labyrinthine Fifth Avenue Shopping Area, a former artists' colony on the west side of Scottsdale Road, just south of the Arizona Canal.

The canal is the artery through which the blood of Unger's would-be masterpiece flows. The water, once properly diverted and accentuated, will bring the people. The people will bring the money. And the money -- the money will create the legacy.

Unger steps into a hot wind and surveys the realm with the confidence of an aristocrat who has the queen for a champion.

"People from around the world will want to come here," he says. "They'll plan trips around the splendor we create."

Otherwise known as The Canals of Scottsdale, that splendor would permanently transform the character of "The West's Most Western Town." Intertwining waterways would meander throughout a 27-acre "cultural district" on both sides of Scottsdale Road.

Tourist-laden gondolas would ply the canals; there would be fine dining, public parks, the ritzy hotel, a city square, luxury condominiums, a multiplex cinema, high-end shopping (lots of high-end shopping), an 8,000-space parking garage (by comparison, the new garage across from Bank One Ballpark holds 2,700 cars), and the eighth-largest museum in North America, housed in the opulent husk of the Scottsdale Galleria shopping mall.

The price would be at least $654 million, and 30 percent of the total cost -- however high it runs -- would be paid with state and local tax money.

Scottsdale Mayor Sam Campana, a major supporter of the proposal, says it would "bring a little bit of Venice to the Southwest."

Scottsdale voters will decide the project's fate Tuesday, September 7, in a special election.

"Look," says Unger. "We're not doing Hooters World, here. We're going the extra distance. But we, as the private sector, realized we can't afford to create a cultural experience with international allure unless we get a hand of support from the public."

Unger and Excel Legacy Corporation -- the San Diego-based real-estate investment firm that's backing him -- have already purchased 80 percent of the real estate within the proposed redevelopment area.

In what some call an outrage, the City of Scottsdale has promised to condemn, knock down and hand over the rest.

"The city is using local money to put local businesses out of business and clear the way for a private developer," says Barbara Espinosa, Scottsdale realtor and chairwoman of Save Old Scottsdale. "It's a frightening collusion."

If voters green-light the Canals on September 7, a three-year period of demolition and construction will begin next year.

If they do not, the project is dead.

"If that happens," Unger says, "the people of Scottsdale will have shot down a once-in-a-lifetime opportunity."

He's right. The state tax law Unger and Scottsdale officials contorted into a financing structure for the Canals project has never been used before, and never will be again.

This so-called "theme park tax" law was passed in 1993 to entice a developer to build a Six Flags-style amusement park in Gilbert.

The law entitles the private developer of a "theme park" to tap a public revenue stream to pay for one-third of the project. Specifically, the developer gets to keep all the state and local sales-tax revenue generated inside the park, until 33 percent of the costs are repaid.

Six Flags over Gilbert never happened, and the law written to grease its wheels lay dormant on the books until it was discovered by the minds behind the Canals of Scottsdale.

"It was just a matter of thinking outside the box," says Unger.

The law defines a theme park as "having rides, features and attractions designed and built around a particular time, place, story or subject."

Gondolas on the canals may not be Space Mountain or the Matterhorn, but they are rides, just as a museum could be called an attraction and fine dining a feature.

But what exactly is the central theme around which the rides, features and attractions in the Canals development would be built?

The City of Scottsdale squirmed around that question in a theme-park financing application submitted to the state's Department of Commerce in February.

"The dominant theme of the area will be cultural and educational," the application read. "This theme will tell a strong cultural and educational 'story,' and will weave together the various attractions in a cohesive way."

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