The Arizona Republic
Jul. 6, 2007 04:43 PM Fred Unger has a history of restoring old buildings and turning them into character-laden businesses, but Southbridge may be his most ambitious project to date.
He is, after all, the man who made a living buying and renovating old real estate like the Royal Palms Resort and the Hermosa Inn.
Now, he has turned his attention to a portion of downtown Scottsdale. Three years ago, at the city’s behest, Unger gathered up all the asbestos-filled buildings he had accumulated south of Arizona Canal, tore them down and started constructing Southbridge.
It’s a walkable lifestyle center at the seam of Scottsdale Fashion Square and Old Town Scottsdale, where luxury department stores give way to Indian jewelry shops.
What really sets the $41 million project apart is that it will connect the two existing shopping districts with something entirely different: Each if its restaurants and stores must be local and independent.
No chains allowed.
“The city said we would like a project, one that could not be found anywhere else,” Unger said in his office, looking out at the construction site. “It’s immensely difficult to pull this thing off.”
Still, he’s trying.
The first of six restaurants, Foodbar, quietly opened last month. It serves three meals a day, including late-night dinner, in a decidedly urban space with subway tile and exposed ducts.
The rest of the project will open bit by bit during the next six months. When Southbridge is done, it will contain four buildings, each with its own architecture, character and mix of trendy shops and restaurants.
Fine dining will rest alongside grab-and-go restaurants. Custom jewelers will sit beside bead shops. The idea is patterned after the Fred Siegel department store in Los Angeles, Jennifer Croll said.
The Scottsdale resident has successful clothing stores in San Francisco, Newport, Calif., and Phoenix’s Kierland Commons, and she is co-developing Southbridge. Croll, 28, wanted to open a store in downtown Scottsdale, so she started looking for a place three years ago.
“Everyone said you have to talk to this Fred Unger man,” she said. “I called him one Monday morning and said, ‘I understand you are doing something on the waterfront, can we meet? He said, ‘How about 2 o’clock?’ That’s where this embarked.”
Unger assembled a team of designers, architects, chefs and businesspeople. Croll collected local retailers who wanted to open small “jewel box” stores, and she tapped Fred Siegel’s daughter as a consultant.
Both said the biggest challenge was turning down chains.
Chains pop up on every street corner for a reason, Unger said. Their products are tried, true and guaranteed to make money. Developers and lenders like guarantees.
“Without the city’s help, we could not have done it because we were offered more money from the chains,” Unger said. “Lenders would love to see a McDonalds or a Starbucks. By doing this all-independent, it’s riskier to pull off.”
The city waived permit fees, constructed a parking garage and pledged to beautify the south canal by the end of the year.
One national restaurant offered to pay double to lease space at Southbridge, Unger said. He even turned away Delux, a swank Phoenix hamburger joint, because he didn’t want a duplicated concept.
Southbridge’s appeal, by design, is supposed to be its uniqueness. Unger believes that bit of character is something a younger generation wants, Unger said.
He is aiming for the younger-than-50 crowd, and anyone who likes film, architecture, modeling and nightclubs.
“These people are not here to play golf or look at a cactus,” he said. “They’re here for a different reason.”
Timing could be on Southbridge’s side.
Experts say Gen X consumers steer clear of sameness and crave an urban environment, and they are gaining buying power every year. Also, the sustainability craze is prompting shoppers to seek out local goods and services.
“I think this is all happening at the right time, and I was part of that good timing,” Croll said. “The area will be extremely well-celebrated, with all the cafes and energy and passion.”
Croll said her mom owned a little linen shop in northern California, and she grew up shopping at independent retailers. She said she belongs to a group of shoppers who appreciates a city environment and a European lifestyle.
“For the people who want their mall stores, there’s Fashion Square right across the bridge,” she said.
When the retail phase is complete – probably by the end of the year – Unger plans to add residences, offices and a 100-room boutique hotel to the project.
Then, he said, he would put downtown Scottsdale up against any city.
He keeps a list of “best public places” in his office. It includes San Antonio’s Riverwalk, Beverly Hills’ Rodeo Drive, New York’s SoHo.
“If we don’t make this list when we’re done,” he said, “we’ve failed.”