By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
Since it opened three years ago, few customers have bothered to visit the gaudy, Mexican-style plaza at Fifth Street and Van Buren. This holiday season was no exception.
That may be why few people noticed the final retreat of Governor J. Fife Symington III from the multimillion-dollar failure that he developed, with hefty taxpayer subsidies.
With deliberate secrecy, Symington's management company on December 21 turned the Mercado over to three pension funds that had lent the project almost $10 million.
Hopelessly behind on loan payments, the Mercado Developers Limited Partnership--consisting of Symington and Chicanos Por La Causa Inc.--gave up control of the Mercado and walked away.
The pension funds installed a new management company which will try to salvage the struggling shopping center. Attorneys for the pension funds are moving to foreclose on the property, and are suing Symington personally for the almost $10.8 million, including interest, he guaranteed to pay them if the project failed.
Taxpayers, too, are being stiffed by the failure of Symington's project. The Mercado sits on land owned by the city, which in late December began drawing up papers to declare the project in default for failing to pay rent. The city also loaned the project $2.7 million in federal grant money, and it is unclear whether that money will ever be paid back.
The Mercado's collapse was not unexpected. Tenants like Martinez say the plaza has been a nightmare since it opened, a poorly planned, badly managed development that never lived up to the visions Symington spun when he was convincing lenders, including the city, to give him money.
But its failure speaks of more than just another ill-fated development scheme in a city that has seen many. It is also the latest piece of a crumbling faáade--that of Symington as a successful businessman and land developer--to collapse.
Until the Mercado cratered, Symington was enjoying the smoothest sailing of his brief political career. The business problems and political foibles that marked his entry into office faded from the front pages, and the first-term governor seemed poised to lay the groundwork for an expected reelection bid.
But once again, it appears that Symington's personal finances are supplying ammunition for opponents who might try to unseat him.
Since he won office in 1991, campaigning on promises to bring his business acumen to state government, Symington has suffered a string of business setbacks as, one after another, the projects he developed went under. He has blamed the failures on a depressed economy.
The Resolution Trust Corporation is suing Symington for his alleged role in the failure of Southwest Savings and Loan, which lent more than $40 million to his Camelback Esplanade project. The governor may still face criminal charges in that matter.
In the past two years, Symington's other business interests, once referred to reverently by the daily press as his "vast real estate holdings," have steadily eroded. He has lost many of his projects through default or foreclosure, and last month transferred the management of those projects he does still control to another company.
The emperor appears to have little empire left.
But court filings and public records show that Symington may remain on the hook for millions of dollars in delinquent loans that he personally guaranteed on his projects, and at least one of his attorneys says he may not be able to make good on the massive debts.
As a result, lenders--including taxpayers--may be eating millions more in losses from Symington's bad deals.
Just how dire Symington's financial situation may be is impossible to determine. His office did not return telephone calls.
But there is little question that there is blood in the water and the sharks are circling.
"It's sort of like a Third World country," says one of Symington's political adversaries. "It's so bad on so many fronts that he could fall into a state of complete receivership."
@body:At the time it opened, Tom Martinez says, the Mercado offered nothing but promise. Martinez, 49, had been a technical artist, designing fast-food restaurants and such, before he decided to take a stab at opening his own eatery in the new Mexican-style plaza Symington was building downtown.
The Mercado was the first major downtown redevelopment project, he says, built before Arizona Center, America West Arena and other downtown attractions came along to compete for business.
It was to be a bold, and presumably profitable, partnership betweeen private and public enterprise. Symington was joined by Chicanos Por La Causa, a nonprofit social service agency, in putting the Mercado deal together. Federal grant money was partially used to pay for the center, and the city made $1 million in improvements on the site. With its pink-and-white stucco and jaunty banners, the Mexican theme development was supposed to promote Hispanic culture, provide jobs and opportunities for minority businesses and draw people back to downtown Phoenix.