YOU CALL THIS A REVITALIZED DOWNTOWN?

WAIT 'TIL SQUARE ONE BECOMES A PARKING LOT

When Square One comes down, it will bespeak more damage than the loss of a piece of Phoenix history.

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@body:The story of Square One began in 1982. In those days, there was no downtown to speak of, unless you counted the drunks as a destination. People were afraid to walk there at night. (Hell, they were afraid during the day.) The city council, led by Mayor Margaret Hance, was eager to jump-start the place, so when approached by local developers Ted Kort and Julian Blum with a plan to transform what was then known as Block 21 into a retail mall, the council endorsed the proposal. In place of the Woolworth's, the wig shop, the tavern for derelicts and the X-rated moviehouse, Kort and Blum envisioned 100 shops and restaurants, a farmer's market and a plaza. They brought in well-known developers Baltimore's Cordish and Embry as a partner.

From the beginning, the road to fulfillment was a rocky one because of Walter Switzer. Switzer's downtown clothing store had long been an anchor in Block 21, and he was the sole merchant who refused to leave. At public meetings where the mall proposal was discussed, he declared that "if it ain't broke, don't fix it," and he referred to the city's redevelopment director as "asinine." He hired a prominent law firm to fight the city's condemnation of Block 21, and he quietly purchased the land beneath the Square One buildings on which Blum had acquired the leases.

Switzer was prepared for the fight of his life. His attorney, Jay Dushoff, says it was a sentimental thing, that Switzer was emotionally attached to the site where his father had started the family business in 1917. Switzer eventually submitted a plan to the city council to develop Square One himself, but Dushoff says this play was consistent with sentiment and not motivated by greed. "Since his goal was to stay there, that was just a way to accomplish that goal--to become the master developer," says Dushoff.

Not everyone agrees that Switzer's heart ruled him, but whatever his motives, he delayed the project for more than five years with his resistance and distractions. Finally the city agreed to let his store remain and to develop Square One around it. Before long, however, Cordish and Embry pulled out of the project altogether, Julian Blum says because they "had had it with Switzer and had had it with the city." Trammell Crow took over as developer, and Kort and Blum maintained a small interest.

Switzer hadn't finished with Julian Blum; he sued Blum for the money the city had settled on the developer to buy out his leases, and won, forcing Blum into bankruptcy and out of his career in real estate. Today Blum is the director of a shelter for the homeless on east Van Buren. "I virtually lost everything I had," he says. "Square One traumatized me completely." (See related story.) In the meantime, the Rouse Company, prominent developers known for Quincy Market near Boston's Faneuil Hall and San Diego's Horton Plaza, had conceived and built the Arizona Center, which opened for business in 1990 only a few blocks north of Square One. In late 1991, Trammell Crow pulled out of Square One, saying it had lost its lender, who believed a second retail project downtown wouldn't survive.

Many close observers of downtown agree, including Margaret McKeough, the city's business programs administrator in the Department of Economic Development. "We definitely do not see it anymore as a retail site," she says, adding that the parking-lot plan is an interim use; the ultimate goal is to build a high-rise office building when the real estate market recovers. Whether this will be in 5, 10 or 20 years, McKeough admits she cannot predict, although she does not appear to find it contradictory to use the word "interim" to describe a period of time that may span generations.

It was McKeough and Denny Maus, the city's community and economic development director, who ultimately took the plan for a parking lot to the city council. McKeough's office window once overlooked Square One and she has functioned as the property manager for the deteriorating buildings since she came to Phoenix in 1986. "It was a consistent drain on our resources," she says, recollecting a chemical fire and the death of a transient who was electrocuted while scaling the abandoned buildings.

The worst problem, however, was the complaints: The other downtown property owners thought that Square One had become a visual slum and had to go. From the Hyatt Regency's Compass Room and the rooms on the top floors of the Omni Hotel, tourists were gazing down into a green muck that had settled onto the Square One roofs, and the ramshackle storefronts detracted from an atmosphere of downtown safety. "When the City of Phoenix for the second time was faced with the reality that the city has not been able to do retail on this site, the objective became to clean up the site," says McKeough. "But it was by no means the first idea that any of us had--to turn it into a parking lot."

She says this defensively, in the way that she responds to every question that's posed to her about Square One. She has wrestled with this project for too many years--has found funding, negotiated with developers, and lately become the repository for complaints from onlookers who are horrified with the parking-lot plan. And she wants you to know that she and Maus didn't resign themselves to this fate until they'd exhausted other options.

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