ASU’s SkySong Center in Scottsdale has yet to make a profit, leaving some city officials questioning its place in the city.
The building, at McDowell and Scottsdale roads, was approved in 2005 by the city of Scottsdale, which paid $81 million for the structure and land. The agreement said the University would begin to repay the city as soon as it started turning a profit after March 2008, when tenants moved in.
Don Couvillion, who oversees Skysong as the ASU Foundation’s vice president of real estate, said the project was originally conceived to revitalize south Scottsdale, but profits weren’t expected immediately.
“We came in with the city, putting down money to buy land and build infrastructure,” he said. “We always had a long-time goal of paying that money back to the city.”
Scottsdale spokesman Mike Phillips said when the city invested the money in 2005, there was an agreement that it would be paid back.
“The vision of the council at that time was that the project would repay that money the city provided through the profits generated offsite over the next 30 or 40 years,” he said.
McDowell and Scottsdale roads are a crucial part of the city as an established neighborhood — it was a vision that something could occur there that would be an asset to the city, Phillips said.
One councilman who opposed the building from the start was Bob Littlefield, who said the deal was full of hot air.
“A revitalization of south Scottsdale was supposed to occur,” he said. “But as we predicted, it didn’t.”
The big complaint Littlefield had is that SkySong is costing the city $2.5 million annually.
“Every year the citizens of Scottsdale have to pay that money,” he said. “There’s no guarantee the ASU Foundation will pay a dime.”
This will continue for the next 25 years or so if the center doesn’t make any profit, Littlefield.
“They might [generate revenue], but they might not either,” he said.
Littlefield and former councilman Jim Lane, now the mayor of Scottsdale, were the only two who originally voted against the project in 2004.
Littlefield said the money could have funded education in Scottsdale or its police department.
Couvillion said he and the ASU Foundation never expected a profit until about 10 to 12 years down the road.
“We do with every intention expect to pay the city back,” he said, but the project has to generate profits before it can start repaying Scottsdale.
“Skysong is a good thing for Scottsdale,” Couvillion said. “I think it will prove Bob Littlefield’s impressions are incorrect.”
Reach the reporter at mmbarke1@asu.edu
