By: Abdul Ahmed in All About Arizona News

It seems that the Scottsdale SkySong development will be getting a Starwood-brand hotel very soon. The news about the upcoming hotel was first announced by the officials of Arizona State University Foundation in the early part of July. However, they needed the approval of the City Council. With a 6-1 vote held on July 6^th the Council signed off on the project. The opposing vote was cast by Councilman David Smith. The criticism that Smith had was related to how SkySong was straying away for its initial purpose of being a technology center.

The Mayor of Scottsdale, Jim Lane, said that even though he first opposed the SkySong project (on similar concerns that Smith shared) the development of hotels were always a part of the agreement.

According to Don Couvillion, the vice president of real estate for the ASU Foundation, the upcoming hotel is expected to be a Starwood brand. He also went on to say that the developer of the hotel paid $75,000 for a franchise agreement with Starwood and wants to move forward with the project in order to not face problems due to Starwood’s merger with Marrriott International.

If the ASU enters a lease with the developer of the hotel by the 6^th of July, 2017, the foundation is expected to pay around $42,000 per year to the city as rent for the 100,000- square-foot hotel.

Westin, Aloft, Sheraton, and Elements are included in the Starwood’s brand. However, it has not been announced which brand will be opening at SkySong. It is confirmed that the hotel will have 120 rooms and the restaurant on the ground floor will be open to the public.

The CEO of Plaza Cos., Sharon Harper, said that since the inception of the complex they have planned for a hotel as it will attract more national and regional business.

SkySong was launched back in 2004. It was joint venture with ASU, Scottsdale, and Plaza Cos. A total of $40 million was paid by Scottsdale for nearly 40 acres of land. The first two office buildings opened up in 2008. An apartment complex (325-unit) opened in 2014 and this was followed by a third office tower in 2015. A fourth office building along with a restaurant complex is under construction.

The Greater Phoenix Economic Council shared a recent analysis in which SkySong is predicted to have an economic impact of $32 billion, and in 30 years is expected to generate more than 10,000 jobs.

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With the first two office buildings SkySong I and II almost fully leased and construction of a third, SkySong III, set to begin in September, Holualoa Companies of Tucson has bought out USAA Real Estate of Texas’ interest in SkySong, the ASU Scottsdale Innovation Center. The new partnership formed by Holualoa Companies, the ASU Foundation for A New American University, and Plaza Companies are now the entirety of the ownership at the project.

Founded in 1985, Holualoa is headquartered in Tucson, with offices in Los Angeles, Phoenix, Kailua Kona, Paris and Geneva. A real estate investment firm, Holualoa’s investments span the United States and Europe, with assets in excess of $600 million.

SkySong is home to a global business community that links technology, entrepreneurship, innovation, and education designed to position ASU and Greater Phoenix as global leaders of the knowledge economy. It currently consists of SkySong I and II, 290,000-square-feet in two office buildings, on 42-acres owned by ASU and ground leased to the mixed-use project. Located at Scottsdale and McDowell Roads in South Scottsdale, when fully complete SkySong will total more than 900,000-square-feet and bring total invested capital to almost $150 million.

Companies at SkySong enjoy a special relationship with Arizona State University that provides tenants with direct access to relevant research, educational opportunities and cultural events on its campuses. Through ASU’s on-site operations, tenant companies have a single point of contact for introductions to researchers, faculty and programs to address their specific needs.

Like the first two buildings, SkySong III will be built to meet LEED certification standards. The architectural design not only complements the rest of the project and the overall architectural quality of the Scottsdale area, it also includes significant consideration for sustainability. The 145,000-square-foot building will be located along SkySong Boulevard, just southwest of the project’s iconic shade structure.

Arizona State University will lease 1½ floors of the four-story building, and current SkySong tenant WebFilings will be expanding their presence in the project by taking a full floor in SkySong III. Plaza Companies will also be taking office space on the first floor. Combined, these three anchor tenants allow construction to begin with the building already 65% leased.

PlazaCompanies continues to be the master developer of the project, in partnership with the ASU Foundation and the City of Scottsdale. Additionally, pre-leasing continues for SkySong IV, which will be located next to SkySong III and face Scottsdale Road. SkySong IV is fully permitted and shovel-ready, and the SkySong team continues to work with prospective anchor tenants. Holualoa has discussed a continued partnership in SkySong IV, but have not yet committed to this next project.

DPR will be the General Contractor and Butler Design the architect for SkySong III.

Scottsdale Mayor Jim Lane said that the impact of SkySong on southern Scottsdale has been critical in sparking new economic development in this part of the community. Mayor Lane said, “SkySong has already made a significant impact in the Scottsdale and McDowell Road corridors in helping bring in new businesses and economic growth.”

More than 1,000 employees and 50 companies are already located on the SkySong property.

The estimated construction cost of SkySong III is $32 million. The construction of SkySong III will also include a significant parking structure to serve SkySong III and IV, as well as surface parking.

“We are excited about moving forward with our new partnership and continuing to build one of the biggest success stories our community has seen over the past few years,” said Sharon Harper, President & CEO of Plaza Companies. “Existing tenants and prospective tenants both have come to realize the unique value proposition of SkySong. We offer something special that no other project in Arizona — or the entire country — offers.”

Kevin Shannon, Vice- Chairman and Michael Moore, 1st Vice-President of CBRE in El Segundo, Calif., and Bob Young and Glenn Smigiel, Senior Vice-Presidents, Steve Brabant and Rick Abraham, Vice-Presidents of CBRE in Phoenix, represented the selling entity, USAA Real Estate, LP. They were assisted by Bruce Francis, Vice-Chairman Debt & Equity Finance, also with CBRE in Phoenix in obtaining buyer’s financing. Financing for the acquisition was provided by Citigroup.

Christopher Krewson, Craig Coppola and Andrew Cheney, Principals with Lee and Associates of Phoenix continue as the leasing team for the project.

Shannon is at (310) 363-4910 and Moore at (310) 363-4909 in California. Young can be reached at (602) 735-5576, Brabant is at (602) 735-5555, Smigiel at (602) 735-5604, and Abraham is at (602) 735-5240. Francis should be contacted at (602) 735-1781. For leasing information contact Krewsone at (602) 474-9551, Coppola at (602) 954-3762 or Cheney at (602) 954-3769.