By New Times
By Connor Radnovich
By Robrt L. Pela and Amy Silverman
By Ray Stern
By Keegan Hamilton
By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
Mullen doesn't "do computers"; she doesn't need to. With her computerlike memory, she accesses chapter and verse of exactly why there will be only two daytime baseball games during the Arizona Diamondbacks' first season at Bank One Ballpark and exactly which combinations of Diamondbacks playoffs might clash with Suns and Coyotes preseason games, ensnarling traffic and saturating parking downtown.
"Do you have any idea how much time I spend on this?" she asks, the stress resonating in her throat. "I've got 500 and whatever days left and at least 10 percent of my week and my operation staff's is spent taking everybody's best bet on what will happen between now and April 1 ."
With her big glasses and shocking-pink suit, Mullen looks more like a high school principal than a major player in the development of downtown.
Technically, the Downtown Phoenix Partnership is the nonprofit managing entity for the Downtown Enhanced Municipal Services District. In essence, it is an alliance of downtown businesses and city departments funded by assessments paid by property owners inside the district. In addition to funding the office's operations, the money goes toward improving its own neighborhood, and it has a great influence on what the city does to downtown. In fact, some would say, the DPP tells the city just what it will and won't tolerate, operating as a sort of "shadow government" for the central city. And as such, it has been the directing force in the recent downtown metamorphosis.
The DPP has a say in every project going up. The DPP rides herd on city services to make sure the partnership members get their due. The DPP pretties-up downtown, campaigns against panhandlers and tries to make it a pleasant place to work.
The fact is, shadow governments can be more efficient than real governments because real governments get bogged down by democracy. When it comes to solving problems and appropriating tax dollars, democracy takes forever--or never. The mechanism for creation of the stadium district, for example, was set up by the Legislature to make sure the stadium could not be voted down by stingy taxpayers, and so, since its inception, the stadium has sidestepped democracy and dealt with shadow governments.
Just as America West Arena brought thousands of folks downtown and helped rejuvenate redevelopment, the city and the partnership alike expect Bank One Ballpark--BOB, to its friends--to be just as beneficial.
But not every merchant or property owner who will be affected by the ballpark has been privy to the grand design.
In BOB's south shadow lie a few dozen industrial blocks referred to as the warehouse district. Some property owners in the district, especially in the blocks closest to the stadium, from Seventh Street to First Avenue and from Jackson south to Lincoln, envision a bold and bustling entertainment district--brew pubs and art galleries, much like the hip-and-happening LoDo district in Denver that clings to Coors Field, the new baseball park in that city.
In fact, Jerry Colangelo's trusted lieutenants have talked to property owners along Jackson to try to get something rolling.
And the Downtown Phoenix Partnership and the City Manager's Office have explored setting up a mini-DPP in that neighborhood; that notion crashed and burned when it was flown before the City Council, because a vocal minority of the area's businesses didn't want to pay for services that would benefit the speculators and the carpetbaggers.
At least one city employee was spanked over the failure of that warehouse improvement district; the city, the speculators and the DPP are regrouping to see if they can still push it through.
The council, says Mullen, is "nervous about being attached to a county project." The stadium district, whose board doubles as the county Board of Supervisors, is building the stadium, of course, at terms wildly favorable to Colangelo. And the council is still smarting from the sort of shenanigans that begat a 2,500-space parking garage on Jefferson Street that allegedly will be built for the new science museum, but whose construction will coincide with the stadium's opening. A similarly coincidental parking garage has been proposed just across Seventh Street from BOB, this time built on state-leased land.
Other voices think machinations over the area south of the stadium are mostly about one thing: parking. If Jerry Colangelo can't scrape together enough parking for the 50,000 or so fanatics he expects for each ball game, his downtown coup de grace will be woefully incomplete.
That's why many observers suspect that the DPP, and, by extension, Colangelo, wants to manipulate the development south of the stadium, looking to provide even more parking for the ballpark, and security for ballpark patrons walking to and from their cars.
The shadow government, and BOB's shadow, some feel, looks an awful lot like Colangelo's shadow.
Phoenix grew from a town to a city because the Southern Pacific Railroad decided to run tracks through it. Understandably, the supplies and commerce that supported the city came here by rail, and so warehouses sprang up along the tracks. About 29 buildings in the warehouse district have been deemed "historic," some of them built at the turn of the century, but most of them during the 1920s and 1930s.
On October 7, the Downtown Phoenix Partnership released a study it had commissioned to compare the Denver warehouse district--Lower Downtown, or LoDo--with the Phoenix warehouse district, and about the only thing they had in common were new baseball stadiums and the word "warehouse."
Denver's buildings were mostly elegant Victorian, multistory brick factories and warehouses that in the city's early days had housed the U.S. Mint and the downtown core. The Phoenix warehouses are mostly single-story shells, which, as one owner put it, may not stand up to rehabilitation and instead may need to be knocked down.
Furthermore, the City of Denver invested millions of dollars in sidewalks and streetlights and repaving to help LoDo develop. The City of Phoenix has made it clear that it has no intention of spending money for infrastructure improvements along the railroad tracks.
And the Denver rehab was a long time coming.
"It didn't happen [in Denver] because of the ballpark," Mullen says. "It was in process 20 years before the ballpark came into being. It's unrealistic to think this can happen in the short term."
Indeed, the Denver conversion started in 1976 and the ballpark wasn't completed until 1995, when the district was already hot and humming.
"One of the problems we have here in downtown Phoenix is the loss of fine-grain development--a bookstore next to a coffee shop and three doors down you've got a brew pub or something," says Michael Dollin, coordinator of Arizona State University's Joint Urban Design Studio, who has studied the Phoenix warehouse district.
Instead, much of the rebuilding downtown to date has laid block after block of solid concrete and formal, intimidating megastructures: Civic Plaza, America West Arena, the stadium and all the parking structures in between all this did little to spawn the kinds of shops, eateries and bars that cater to someone besides conventioneers.
Even if the envisioned shops and bars on BOB's backside had a more casual atmosphere, they would have stiff competition from the very thing that would create the neighborhood. BOB, as planned, will contain nearly as much restaurant and retail space as Arizona Center, meaning that stadium patrons may just drive to the nearest parking structure, walk into BOB to eat and drink their fill, spend the rest of their money, then walk back to their cars and drive home without strolling down Jackson Street for shots and shopping.
Hope springs eternal, and so does profitability. The DPP-generated study suggests that the initial infrastructure improvements--if the city could be so convinced--take place in the three blocks closest to BOB along Jackson.
And, by no small coincidence, the shadow governors were already thinking that way.
"Margaret Mullen sat down, and Jerry [Colangelo] said, 'We gotta clean up that area. Go do it,'" one stadium-district insider says. "The warehouse district went south of the tracks, and the Margaret Mullen group said, 'Gosh, we ought to be down there because the warehouse district's our thing.' And that coincided with the Diamondbacks' efforts and some other rumors about redevelopment along Jackson Street."
The redevelopment efforts were more than rumor.
Michael Rushman, an attorney with Gallagher and Kennedy who has represented both Colangelo and the Diamondbacks, huddled with Jackson Street property owners to discuss just that.
For the blocks across the street from America West Arena, just west of the baseball stadium, Rushman proposed a master development of six-story buildings chock-full of restaurants and retail shops and offices and artists' lofts. Each of the buildings would be connected by second- or third-story walkways to parking structures across the railroad tracks to the south. Jackson Street could then provide exactly the kind of "fine-grain development" that Dollin talks about. You could live and work and play in the shadow of BOB; you could walk out its west gates after a ball game, stroll safely past clean, well-lighted businesses en route to your car. You could stop for a beer after work, buy a book or a sweater, even get a hotel room.
As lovely as the concept was, the Jackson Street property owners weren't interested. One already had plans for a 152-unit hotel, another planned a brew pub, and a third didn't want to boot out long-term tenants until he was sure the area was truly up and coming.
The discussion never got around to possible financing sources.
"The question was: What tail is wagging the dog?" says Gary Abromovitz, who owns a historic building at First Street and Jackson, "and the tail is the developer who could come in and say we'll put the money up so we can get it developed."
It might have been just the impetus the district needed.
"I got the feeling it was too big an idea for Phoenix," says Michael Dollin. "We're not Chicago, we're not Denver, we're not Baltimore. We don't have a track record for urban redevelopment."
Rushman refused to comment on why he was facilitating the discussion. Nobody from the Diamondbacks would comment, either.
But one can speculate it was to help Colangelo put allies--not to mention spiffy businesses--on his southern flank. And the parking lots Rushman suggested for south of the tracks would certainly help alleviate the parking crunch that may follow the crowds filling the stadium.
Parking studies commissioned by the stadium district estimated a parking deficiency of about 6,000 spaces for a worst-case scenario in which the stadium, the arena, the Civic Plaza and Herberger Theater Center all had events at the same time. That estimate may even be optimistic, claims condemnation attorney Jay Dushoff, who battled the stadium district as it gobbled up the land for the stadium's current site. The stadium district study was based on an average 3.5 persons per car, while Dushoff says a figure of 2.75 or 3 persons per car would be more likely--which means the parking deficit could be much higher than the 6,000 posited by the stadium parking study.
Zoning regulations in the warehouse overlay district, which were rewritten for the stadium, explicitly state that the stadium owner and the operator--the stadium district and the Diamondbacks, respectively--are not required to build parking facilities to accommodate the stadium crowds. But, any parking that has a primary purpose of servicing the stadium must be owned by the Diamondbacks or the stadium district.
With the stadium budget already sky-high at $348 million, no one involved with the project would even think of asking for more public money to build parking.
When America West Arena opened in 1992, property owners in the warehouse district started knocking down buildings to create surface parking lots and make money from arena events, which prompted the city to rewrite the zoning statutes. Arguably, the prohibition of new surface lots was meant to preserve the architectural integrity of the neighborhood--though others saw ulterior motives.
"If I can knock down an old building and run a parking lot for ten years while I wait for the neighborhood to redevelop, the parking lot can be extremely profitable," says Jay Dushoff. "Therefore, if you come along and condemn my land, you've got to pay for it at a higher level, because I have a parking lot or a right to put a parking lot there."
The new zoning laws also forbid construction of any parking garage that's not accessory to some other use. In other words, if you build a garage, it has to be to provide parking for your office building or restaurant.
"At that point, my conspiratorial mind tells me Colangelo and friends say, 'We want to build those parking lots ourselves. We don't want people making money off our ballpark,'" says Dushoff.
Obviously, rather than build their own parking facilities, Colangelo and friends have been forced to find their parking spaces by finding accessory uses, such as parking for the master-planned retail and restaurant mall that Rushman proposed on Jackson Street.
And if that fails, by looking elsewhere: like talking the city into spending $40 million to build a 2,500-space garage across Jefferson Street from the ballpark--a garage, incidentally, that can empty all 2,500 cars in 30 minutes--and calling it accessory parking to the Civic Plaza and the new science museum ("Parking Mirage," April 25).
And currently, Colangelo's lieutenants are negotiating with the state and its lease-holder to build a 974-space garage across Seventh Street from the stadium--as accessory parking to an AHCCCS facility there. Fans could easily park in that AHCCCS garage and walk under Seventh Street, which is elevated. The vice president of the development firm that originally built the AHCCCS building, incidentally, was Michael Rushman.
Furthermore, the Diamondbacks have approached the Zeb Pearce beer distributorship to allow overflow surface parking on its considerable open space just south of the stadium across the tracks.
The only thing left to do is figure a way to keep pedestrians safe as they walk through the dark streets of the warehouse district to the ballpark.
The Downtown Enhanced Municipal Services District was created by the City Council in August 1990 as a means of combining public and private funds and clout for the betterment of downtown. In January 1991, the council approved the formation of the Downtown Phoenix Partnership, with Margaret Mullen at its helm.
Partnership correspondence always capitalizes "Downtown," as if it were a fiefdom. That realm, essentially, is an oligarchy; the more property you own, the bigger voice you have in the partnership's decisions. And though it is not an official government body, it has the ability to levy taxes. DPP funding comes from an involuntary assessment levied on all property within its boundaries--roughly from Fillmore Street to the railroad tracks and from Seventh Street to Third Avenue.
This year's assessments raked in $1.2 million, more than $600,000 from assessments inflicted on private property, more than $400,000 from the city, and the rest from the county and the stadium district. Forty-five percent of that money, or $519,500, pays the lease and office expense for the partnership's Mercado headquarters and the salaries of the eight staffers. The rest of the money pays for the partnership's marketing strategies and databases, for DASH shuttle buses, for streetscaping such as last year's fussing and primping before the NBA All-Star Game. And it pays for "security guides," those helmeted and purple-shirted young men on bicycles who patrol the streets, purportedly handing out city information. In fact, they are Wells Fargo security guards armed with walkie-talkies so that they can snitch on questionable goings-on.
The partnership's board of directors is a who's who of downtown: Neil Irwin, an attorney with Streich Lang, is president; Jerry Colangelo is vice president. City Manager Frank Fairbanks sits on the board, as does downtown councilman Cody Williams and APS chairman Mark DeMichele and Phoenix Newspapers, Inc., chieftain Chip Weil.
Margaret Mullen is the hatchet woman, but any notion that she is ordered around by the board's big boys is probably mistaken.
"To say that she takes direction every day from somebody would be a misstatement," says one of the downtown cognoscenti. "She knows her job. She's got the biggest brass balls in downtown Phoenix and she swings them around. It's not just because someone tells her what to do. That just misjudges her talent."
Mullen, it is said, walks perfectly in synch with her masters, handing out favors and squashing dissent.
Mullen's initials are all over the memos and correspondence regarding stadium-area development in the files of the City Manager's Office. Mullen has clout and she has a say in any project within the boundaries of her regency, because, in essence, the city has delegated much of its planning function to the Downtown Phoenix Partnership.
Last fall, the DPP hired Michael Dollin at ASU to lead workshops with the property owners in the warehouse district to find out what impact the new stadium would have on their businesses. Mullen wanted to know who took deliveries when, who needed access to the railroad, who needed sidewalks that could be driven over by trucks. And she wanted to short-circuit any problems inadvertently caused by stadium events.
"That's our job," she says.
And though she insists that the workshops were not intended to expand the DPP's realm, Mullen's invitation to property owners for the second workshop flatly stated, "Once we have addressed all potential issues, we will begin discussing the possibility of extending the Partnership boundaries to include the area from Central to 7th Street and from the tracks south to Lincoln."
The impetus, she says, came from the property owners.
"As they started talking, the problem of traffic down there and the lack of infrastructure came up," she says. "Some places have lighting, some places don't; some places have adequate parking, some places don't. They said, 'We'd like the partnership to extend their boundaries,' and we said, 'You can't do it that way. It's not an arbitrary thing. But if you're interested, you have to take responsibility for it.'"
Ray Pacioni, who owns a parking lot and three buildings south of the tracks, stepped forward.
"What are we? Chopped liver?" Pacioni asks. "I was looking at all the growth and all the good things that happened north of Jackson, and I went to ask why we don't have our own partnership."
He thought that if the south-of-the-tracks landowners took initiative, maybe the city would take notice and start investing in the neighborhood.
"If the landowners themselves formed some cohesive voice, we could go to the city and say, 'Hey, look, we're paying X amount of money for these things. How about you guys stepping up?'"
And so Pacioni walked from warehouse to warehouse with a petition that called for their annexation into the Downtown Phoenix Partnership.
And why not?
"I can't imagine why anybody wouldn't want this area to be clean and bright and safer," he says.
Ray Pacioni swears that the idea to extend the boundaries of the Downtown Phoenix Partnership to include all of the East Warehouse District came out of his imagination; Mullen swears the same. And all of the functionaries in the City Manager's Office tilt their heads quizzically with every question, in unison, smile evasively, chuckle and tell you they didn't read this memo and that you took that memo out of context. In the absence of straight answers, the memos and other official documents in the files in the City Manager's Office hint at Manifest Destiny.
Regardless of where the expansionist impetus came from, it fit wonderfully into the city's development plans, specifically as set out in a document adopted by the City Council in 1990 titled Downtown Phoenix: A 25-Year Vision. That council imagined a warehouse district full of artsy-fartsy coffee shops and jazz clubs.
And Pacioni's vision also fit perfectly into DPP visions. The machine was set in motion, regardless of whether it really represented the majority interest in the warehouse district.
In a January 19 memo to the partnership's board of directors, Mullen wrote, "The consensus of the Board at the time was that addressing south of the tracks was critical due to the construction of the ballpark, the development it will present and the need to address that area as a gateway into Downtown."
She went on to say that the partnership and the city would have to "fast track this work" in order to get it into the 1997 budget.
Five days later, Ray Pacioni made his formal pitch to the partnership.
As the minutes of that meeting report, "Mr. Colangelo pointed out that he felt incorporating this area was critical, since it would become another major entrance into Downtown."
Then Michael Ratner, a board member and an owner of Tom's Tavern, worried aloud that the DPP's funds shouldn't be "drained from the existing area," raising questions about just how much revenue could be squeezed out of the warehouse district. Likely it did not need and could not afford the kinds of projects and services in the northern reaches of the fiefdom. It would need to be a separate district.
Although the property owners south of the tracks indicated that they wanted to join the DPP as full-fledged members, the DPP determined otherwise, as noted in a facetious memo from one city apparatchik to another.
"Surprise, MCM [Mullen] now wants a sep[arate] district!" it read.
The buildings along Jackson Street were already included in the DPP. Rather than move the boundaries south of the railroad tracks, Mullen and the board decided instead to establish a separate territory from the tracks south to Lincoln and from Seventh Street to First Avenue, which the DPP would manage according to the needs and wishes of the majority of the landowners.
The partnership worked up a first-year budget of $100,000 for the new "enhanced municipal services district." Of that money, $68,000 was to pay for 60 hours a week of security guides, two at a time; $21,000 would go toward including the area in the partnership database and in various publications. The last $11,000 would pay the partnership for its work.
Nothing would help provide what the property owners wanted most: sidewalks and streetlights and police protection.
"I'd like to see them come by with a street sweeper and sweep our streets as much as they do across the tracks," says Phil Stearns, whose business manufactures water-treatment equipment.
Alex Reynoso, president of an engineering firm, says, "My biggest complaint is that every time there's an arena function, the people leave trash, broken bottles and McDonald's containers. We find ourselves every weekend sweeping down our gutters and washing down our sidewalks."
The food warehouses and factories and engineering firms in the district didn't need guys on bicycles to hand out brochures or call the cops after dark; they had their own burglar alarms and security guards. They didn't depend on foot traffic for their businesses, and they went home at 5 p.m.
"It's nothing more than a Block Watch equivalent, that's where the $68,000 is going," adds Gerald Stovall, president of an automobile-bumper manufacturer south of the tracks.
The only businesses who might immediately profit from the security guides would be the parking-lot owners catering to ballpark events. Their patrons would be able to more safely walk back to their cars after a game and trust that their cars were still in one piece.
But the land speculators who wanted to redevelop their properties saw this as the first step in stabilizing the neighborhood. And so the debate polarized between them and the businessmen who wanted to keep operating their businesses without adding $400 to $3,000 per month to their overhead for services they didn't need and didn't want.
Tracy Hom is a Chinese immigrant who, with her husband and her stepdaughter, has operated a food warehouse in the district for 20 years.
"They want us to share their expense," she says. "We do small business. If I want to do a project, I pay for it with my own pocket. But you want other people to pay?"
As the debate raced toward its resolution before the City Council, it seemed as if the speculators, with the majority of frontage feet in the district, would win out over the protesters.
And they had the Downtown Phoenix Partnership and the city manager's staff on their side.
The formal protest hearing aired before a council meeting on September 18. The original time line had placed it at the end of August, but functionaries in the Streets and Transportation Department had missed some deadlines and the meeting had to be pushed back to meet the legal protest guidelines.
Mullen was furious, as described by one internal memo in the City Manager's Office referring to "a VERY PAINFUL conversation with Margaret," who apparently wanted the protest hearing moved up.
If it had been moved up, one city councilman confides, the district would have passed handily through council.
"Hopefully, we don't have any more internally caused problems with this I.D.!," the memo ends.
City council members had been briefed on the proposed improvement district and had been assured that nearly everyone in the district was in agreement. But at the September 18 hearing, all hell broke loose.
According to City Council minutes, the property owners in favor of creating the district represented 46 percent of the property frontage, slightly less than a majority. More important, the protesters only constituted 32 to 35 percent, and the law requires that 50 percent plus one be opposed in order to stop the project.
But as person after person rose to speak against the district, the council members started asking questions of their own. Mayor Skip Rimsza asked what would happen if the property owners couldn't pay their assessments, and a city attorney answered that liens would be made against their property and after five years the city could sell the property for the amount of the lien plus interest.
Once the district was established, they figured, it would be easier for the district's managing body to get increased assessments through the council.
"It was a shocker for everybody," says Councilman Sal DiCiccio. "We were told there was practically no opposition to this, but the room was full of people protesting."
"After it came to City Council, it was very clear that what we had been led to believe was not the case," adds Councilman Cody Williams. "It should have started with a group of folks in that area where everyone was polled on what they might be willing to pay for. What happened was backwards to the process and I think it got along further than it should have."
Most likely the DPP and the City Manager's Office had started the snowball rolling--without accurately canvassing the neighborhood or without caring to see who was buried in the avalanche.
The council members were suddenly faced with a scenario that was decidedly un-Republican: small businessmen being assaulted with new and unreasonable assessments.
Several council members whispered among themselves that this initiative was really about . . . BASEBALL!
And they were not about to be embarrassed by any more baseball giveaways.
The vote on forming the district was postponed until October 9, but before it could return to the council floor, the Streets and Transportation Department yanked the vote from the council's October 9 agenda. It had prepared the documents needed to invoke the emergency clause--a mechanism that would short-circuit any chance of a referendum once a vote was made--and then it withdrew that as well.
Spokesmen for the mayor now say the East Warehouse initiative is dead until the city, the DPP and the property owners come to some sort of proper agreement. A meeting was scheduled for November 5 between the city and the property owners to discuss what went wrong and what should happen next.
Inside the City Manager's Office, the backpedaling threatened to spin City Hall right off its foundation. Both David Krietor in the Community and Economic Development Department and Thomas Callow in Streets and Transportation have told New Times that the Downtown Phoenix Partnership was just one of the providers that would have been considered to manage the fledgling improvement district. This claim is almost humorous given that Margaret Mullen and the DPP--and no other contractors--turn up over and over and over in the files of both Streets and Community and Economic Development. It was Mullen and the DPP who commissioned the two studies of the warehouse district and Mullen who worked to answer each and every protest letter from property owners in the proposed district.
Mullen now speaks of the project as if she were just trying to help the businesses in the district and that she threw herself into the project as she would any other, at 100 miles per hour.
The underling in the Streets Department who was in charge of all things relating to improvement districts, a pleasant fellow named Andy Almaraz, was unceremoniously transferred to a new assignment.
Spurious rumors floating around the city bureaucracy say that Almaraz dared to go mano a mano with Margaret Mullen and Jerry Colangelo over the creation of the district. Another scenario has him walking naively into a meeting with figures showing that the pro-improvement district landowners were really not in the majority.
Almaraz admits that something happened over this project, but he won't say what.
"I'd rather not comment because it's kind of a touchy situation," he says.
And when asked if he had helped facilitate the protesters, he simply says, "Property owners cannot be denied their legal rights. The process of the project cannot violate any of the property owners' rights to protest for any reasons."
The official company line--after several halfhearted denials that Almaraz's transfer was anything more than a routine career enhancement--says that Almaraz's assistants had indeed missed some crucial deadlines and committed other unnameable errors.
"We had some trouble in the improvement district section, and that trouble boiled down to difficulties with some other departments, difficulties with some other projects and, cumulatively, we just decided to change management," says Thomas Callow in the Streets Department.
The transfer sent a quiet message that there would be consequences if the city's and the partnership's shared agenda was not met.
Meanwhile, on Friday, October 25, as Bob Dole stirred political flames a few blocks away in Patriots Square Park, an entire block of the warehouse district suddenly caught fire and burned to the ground.
Within days, front-end loaders were hauling off the bricks and the ashes. The block's owner tells New Times that he is preoccupied, that he's just lost his entire business and doesn't want to talk about it.
Fire investigators say the fire was probably accidental, though no one would likely know for sure.
The neighbors winked at one another and joked that whatever the cause of the blaze, someone had just gotten himself a new parking lot.