Bed rush hits Old Town Scottsdale

By Tom Scanlon, Progress Managing Editor

On the way to joining the extraordinary “bed rush” of tall hotels rushing Old Town, a funny thing happened to the Winfield: It went into trusteeship.

Though Scottsdale real estate wheeler-dealer David Slattery Sr. stresses that does not equate to bankruptcy, it still hardly sounds like a promising step for a $150 million project.

A mere technicality, Slattery said, emphasizing he is ready to start building the nine-story “boutique luxury hotel development” this year.

“We put everything on hold during COVID,” Slattery said.

He expects another round of refinancing to end the trusteeship soon – clearing the way for the Winfield to join the room rush.

Slattery plans to build the Winfield at 4221 N Scottsdale Road, a half block from the Hyatt Place Old Town and Scottsdale Marriott Old Town.

If his plans come to fruition, he will join quite a crowd.

The under-construction Maya Hotel – which, at 12 stories high, will tower over its neighbors – is a half mile north of the planned Winfield.

The Kimsey multi-use development, which includes a six-story, 168-room hotel, is less than a half mile southwest of the Winfield.

And, less than 1 mile from the Winfield looms Caesars Republic Scottsdale Hotel, a 147-foot high, 265-room luxury hotel that opened March 6.

Though it must have what might be called a “refresher round” before the Development Review Board, the Winfield’s height and rezoning, approved by Scottsdale City Council in 2018, still holds.

“Zoning runs with the land,” said John Berry, a Scottsdale attorney who specializes in zoning cases. “Council can’t take that away.”

Berry should know: he represented nearly all of the “bed rush” hotels approved by the council from 2016-18.

Zoning cases in more residential areas, such as the Parque project at the former Crackerjax that Berry also represented, often meet stiff resistance from neighbors, who fear traffic, noise and other disruptions.

By contrast, Berry said neighboring businesses are “typically very supportive” of the Old Town/downtown hotel.

“Retail shops and restaurants having new customers in the age of Amazon that can literally walk to them – they love having customers close by,” Berry said.

The Winfield is a case in point. With little friction, Slattery sailed through rezoning, scoring unanimous votes from both City Council and the Development Review Board.

Echoing former Mayor Jim Lane, Berry credits new hotels for helping revive the area, which was in an economic slump during and after the Great Recession.

“Part of the revitalization of Old Town was bringing high income consumers to the area,” Berry said. “They helped small businesses, restaurants.

Winfield rises

While the Winfield development stretches east to Winfield Road, the portion of the property on Scottsdale Road is hardly impressive.

A former real estate associate headquarters, the boarded-windows, two-story building has been vacant for nearly a decade.

Planned for nine stories, Development and Equity Services Corporation’s Winfield Hotel and Residences sailed through city red tape in 2018.

Susan Bitter Smith, a project spokeswoman, sent a letter to neighbors in mid-2018, promising “an iconic boutique hotel and upper level condominiums that will tribute to Scottsdale’s rich western heritage.”

From 2016 to 2018, a wave of hotel plans flooded the city. A half-dozen new Old Town hotels were expected to add 1,000 rooms for eager visitors.

Less than half – including Senna House Hotel Scottsdale and Canopy by Hilton – made it to the finish line, while others like the Slattery project loom in the planning stages.

Slattery said his Winfield will outshine all the other newcomers.

“Scottsdale was known as having some of the finest resorts in the world – but they all revolve around golf,” he said, explaining why he launched the project more than seven years ago.

According to the Winfield’s 2018 application, DESCO Slattery was part of “the development of nearly $500 million of projects.”

On Jan. 18, according to real estate tracking site Vizzda, David Slattery agreed to pay $10.5 million for the property.

A curious note to the transaction notice: “Sale scheduled for April 24, 2024, at 10 a.m. at 1850 N Central Ave, Front Lobby.”

While that may sound like an auction purchase of a “distressed” property, Slattery said this is simply a technicality of his latest refinancing.

“When (a project) goes into a trustee format, they give you 90 days to clear up the report,” he said from Beverly Hills, where he was meeting with Winfield partners.

“I’ve worked on 60 to 70 projects, and this happens one out of every six or seven times.”

This one had an unusual twist, Slattery added.

After he refinanced the “underlying land loan” of the Winfield for the fourth time, “the appraisal came in so high, the new lender asked for the appraisal to be redone.

“Our success worked against us,” he added with a chuckle.

After a previous appraisal at $27 million, the Winfield’s land had a new appraisal of $37 million.

What once seemed ready to put a dagger in the project turned out to be a blessing, Slattery insisted.

“COVID turned out to be a huge break,” he said.

In homage to its flashy new partner, the Winfield Hotel is now … the SLS Hotel Scottsdale.

“SLS being a sister property arose after COVID,” Slattery said.

And, he said, the new partner helped land an agreement with a sizzling (so to speak) restaurant: Carna Steakhouse by Dario Cecchini, of the Netflix show “Chef’s Table Master.”

“We’ll have one of the top steakhouses in the world,” Slattery said.

Before serving high-end steaks, he must set the table by completing financing and revisiting the city process.

The first week of February, Slattery filed a “re-approval” request “for a new nine-story-tall hotel development with 238 guest rooms and 16 residential condominiums,” according to the city.

Slattery’s target opening date: Dec. 31, 2026.