HonorHealth, Scottsdale's largest employer, wants to redevelop a portion of its property near Old Town, submitting conceptual site plans to the city for a luxury hotel and apartment complex alongside its medical campus at Second Street and Drinkwater Boulevard. The proposed complex would include two nine-story buildings with roughly 460 hotel rooms and residential units combined.
The project lands in a city that has been openly hostile to tall apartment buildings in recent years, even as it has approved high-profile hotel and condo towers. As reported by The Arizona Republic, HonorHealth is pitching the project on land tied to its medical campus near downtown, putting the health system squarely in the middle of Scottsdale's long-running fight over density and building heights.
The land itself has a tangled recent history. Arizona Progress Gazette reported that HonorHealth sold 3.1 acres at Second Street and Drinkwater Boulevard for $17.3 million, with the buyer, the Empire Group, filing preliminary plans for what was described as the Mondrian Scottsdale Hotel and Residences — a luxury hotel with a possible residential component. The original Mondrian Scottsdale, on Indian School Road, opened in 2007 before eventually closing, per the same outlet.
A Mayor's Account Adds a Wrinkle
Scottsdale Mayor Lisa Borowsky has offered her own version of events involving HonorHealth and the same stretch of land, though key details don't line up cleanly with the Gazette's reporting. According to the station's report from yourvalley.net, Borowsky said HonorHealth sold the land to developer Empire Group in October, without specifying the year, and that she wanted more time to negotiate a possible deal for the city to buy 1.7 acres near Second Street and Drinkwater Boulevard before that sale went through.
Borowsky said the City Council would not give her that time. She has pointed to the episode as a missed opportunity, also telling yourvalley.net that the city missed out on a more appropriate site for a controversial parking garage being built at First Street and Brown Avenue. Councilmember Jan Dubauskas has offered a different explanation for the outcome, saying back in February 2025 that HonorHealth was not interested in selling the land at all — which is why the council voted down Borowsky's request for more negotiation time.
The available reporting does not clarify whether the 3.1 acres described in one account and the 1.7 acres referenced by Borowsky refer to the same parcel or transaction, nor does it pin down the year of the October sale she described.
Old Town's Height Debate Looms Over the Project
Any proposal of this scale near Old Town arrives against the backdrop of Scottsdale's broader struggle over how tall downtown buildings should be allowed to rise. Before the city's 2018 downtown plan update, property owners around the HonorHealth medical campus could request building heights up to 150 feet, according to scottsdale.org. Concerns that height allowances were overburdening downtown infrastructure later led the City Council to ask staff to schedule an official review of the Old Town Character Area Plan.
Old Town has still seen plenty of new housing move forward in that climate. Four projects in the works, including a 232-unit building at Fifth and Goldwater, would add more than 500 homes to the area, per Arizona Progress Gazette's reporting. Elsewhere downtown, a 2017 proposal at 4221 N. Scottsdale Road was reported by azcentral.com to include 246 hotel rooms and 16 luxury condos, though that figure carries lower confidence in the available record.
Scottsdale's own 2025 housing needs assessment notes that the city issued permits for approximately 838 housing units and certificates of occupancy for 1,394 units in fiscal year 2023-2024, according to a city document posted on scottsdaleaz.gov. The excerpt available does not provide enough context to fully explain what conclusion those figures were meant to support.
For now, HonorHealth's plans remain conceptual. As Scottsdale's largest employer pushes a major project onto land tangled up in a disputed sale and a citywide height debate, the next steps will likely test how far City Hall is willing to bend its recent skepticism toward apartment density.
