Scottsdale mayor nixed new Old Town restaurant but denies any favor to campaign donors

Corrections & Clarifications: An earlier version of this article gave an incorrect spelling of developer Aaron Wagner's name.

Scottsdale's mayor received nearly half of his political contributions over the past two years from employees of the prominent local development company that in January successfully fought to kill a competitor's plan to build a new restaurant in Old Town.

Employees of Riot Hospitality Group, owned by Shawn Yari, one of the city's most prominent developers, have donated $36,000 to Mayor David Ortega since late 2022 and half that amount to Councilmember Tammy Caputi since January 2021. The figures come from campaign finance reports filed with the Scottsdale city clerk.

Ortega cast a deciding vote to block the development of Swags, a proposed upscale restaurant in Old Town that would have competed with Yari's properties and plans.

Caputi sided with Swags. None of the other council members who voted against Yari's interests took any campaign donations from his company.

Ortega maintained his vote wasn’t influenced by anything other than concerns about the Swags project itself, saying in a statement to The Arizona Republic, “Everyone who comes through the door with a project is given fair and complete consideration.”

"Accusations against me are groundless," Ortega wrote, calling any claims he showed Riot Hospitality special favor "usual election-cycle rhetoric."

Yari has a stake in numerous properties throughout Old Town, ranging from the Casa Amigos bar to a planned $150 million project called the Maya Hotel and a fine dining restaurant called Calle Rosa that's under construction.

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Aaron Wagner, a newcomer to Scottsdale's development scene, proposed building a fine dining restaurant of his own last year. Swags was slated to replace the shuttered Three Wisemen bar, which is across the street from Yari's Maya site and about 700 feet away from Calle Rosa.

Wagner said Swags needed a third-story patio to make it pencil out financially on his tiny 0.2-acre lot, so he asked the city for permission to build one floor higher than is typically allowed in that area. The plan was backed by the Scottsdale Planning Commission, city staffers, the Coalition of Greater Scottsdale and more than 30 nearby property owners.

Yari was the only major player in Scottsdale against it, saying he was concerned the rooftop dining would blast too much noise toward his Maya Hotel. And because he owns at least 20% of the surrounding properties, his opposition required Swags to get five "yes" votes from the seven-member City Council, rather than the usual four.

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Swags came up one vote short on Jan. 9 when Ortega voted "no" along with two council colleagues who generally oppose developments. Ortega said he had problems with Swags' third floor and another zoning request.

Ortega said he voted "no" because he believes rezoning such a tiny lot to allow an 85-foot-tall building "sets a bad precedent." Swags was slated to be about 30 feet shorter, but Ortega explained the "zoning runs with the land," so if the property were sold another developer could build to the full 85 feet.

"There are several problems such as excessive sound, security concerns and traffic mitigation in that area," Ortega said. "I encouraged the Swags owner to build what zoning allows and the Riot Hospitality and other venue owners to work together on solutions."

4 people with developer's company donated to mayor

The company employees' contributions to Ortega followed state laws. They fell below the per-person cap, which was $6,550 in 2022 and $6,650 in 2023.

Ryan Hibbert, Riot Hospitality's CEO, and Lissa Druss, Riot Hospitality spokesperson, made one contribution each in 2022. Hibbert, Druss and two other company employees contributed to Ortega in 2023, for a total of four donations.

"Political donations are part of the democratic process," Druss said in an email to The Republic.

Druss said Yari himself "does not participate in political donations tied to" his company.

It's not unusual for developers and real estate professionals to contribute a big chunk of campaign donations in local races. Even Councilmember Kathy Littlefield, who opposes many development projects, received contributions from a real estate investment firm called Garcia Realty Advisors Inc. during her 2022 reelection bid.

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'Competition between David and Goliath'

One councilmember who voted to approve Swags said she was troubled by the politics of the council decision.

“There’s competition between David and Goliath, and people are lining up with certain sides that they perceive to have more power. That bothers me a lot,” Betty Janik said about council opposition to Swags.

Councilmembers Barry Graham and Littlefield, the other two "no" votes on Swags, did not receive any cash from Yari or his Riot Hospitality Group before the 2022 election. Neither did Councilmembers Janik, Tom Durham and Solange Whitehead, who joined Janik in voting in favor of the project.

Caputi is the only sitting City Council member who is generally pro-development, so dozens of people in development-related fields, like land use attorneys and builders, have given to her campaign over the past two election cycles. She's also one of the council's most prolific fundraisers, with hundreds of unique donors who span the career spectrum.

Less than one-tenth of Caputi's campaign income over the past three years has come from Riot Hospitality employees. Between January 2021 and December 2023, company employees gave her about $18,000 out of the total $212,000 she raised during that period.

Ortega tends to be more conservative when development proposals go up for council approval and has had just 14 unique donors give to his campaign since April 2021. Four of those donors work for Riot Hospitality and they made up six of the total 18 donations Ortega received in that timeframe.

Aside from Riot Hospitality's executives, the mayor received only one other contribution from someone working for a development-related company between 2021 and 2023. It was $6,650 from a Sunbrella Properties employee.

The mayor received roughly twice as much as Caputi from Riot Hospitality employees over the course of four months. Between November 2022 and March 2023, Riot Hospitality executives contributed roughly $36,000 to Ortega's 2024 reelection campaign.

That's about 48% of the total $75,000 the mayor's campaign has brought in since the beginning of 2022, and 41% of the roughly $88,000 he's received since January 2021.

Civic connections between mayor, Riot Hospitality

Yari's company also sponsored Ortega's State of the City event in January.

Druss said the company sponsored the event because it "has been an active member of the Scottsdale Area Chamber of Commerce, which hosts the state of the city."

The day after the Swags vote, Ortega and Caputi were pictured holding big checks at an event where Riot Hospitality's nonprofit, Riot Gives Back, presented $40,000 to local charities.

Ortega was on stage with Druss, who said the event happens every year and the company is "very proud" of its charity work.

"Our nonprofit foundation, Riot Gives Back, gives to first responders, military members and their families, and the compassionate care of children," she wrote in an email to The Republic.

"Accepting a $40,000 donation and sharing it with Make-A-Wish Arizona is something we are very proud of, regardless of who is present. This annual check presentation is done at the same time of the year, and all city council members are invited," Druss said.

Ortega echoed Druss's sentiment.

"I was invited by Make-a-Wish and by (Riot Gives Back). And am happy to stand again in support of those causes," Ortega wrote.

Reporter Sam Kmack covers Tempe, Scottsdale and Chandler. Follow him on X @KmackSam or reach him at sam.kmack@arizonarepublic.com.

This article originally appeared on Arizona Republic: Foes of Swags restaurant in Scottsdale gave $36K to mayor's campaign