Why Growing Smarter Will Grow Old Fast

The so-called Growing Smarter measure would prevent the state from enacting strict growth controls. At the same time, however, it would free up $220 million for land preservation.

Each day, a squadron of earthmoving machines tears through rolling Sonoran desert 30 miles north of downtown Phoenix, ripping out native plants, destroying wildlife habitat and preparing open space for development.

The planned residential community dubbed the Villages at Desert Hills is bisected by Interstate 17 and is being reshaped by Del Webb Corporation into freeway exit ramps, golf courses, shopping centers and homes for more than 50,000 people. It's hardly a village. A new city the size of Flagstaff is being carved into unincorporated Maricopa County far from any existing municipal services.

Maricopa County officials have been happy to nurture the project, agreeing to Del Webb's request for increased housing density while downplaying the massive costs to be borne by taxpayers for additional police and fire protection, schools, libraries and the inevitable widening of I-17.

The project is a classic example of urban sprawl at its worst. It has no mass-transit component and no existing commercial center. It destroys virgin desert and encourages further growth away from the urban core. It shifts infrastructure costs to taxpayers while reaping immense profits for private developers.

It's a development that didn't have to happen.
The project's 5,600 acres once belonged to the people of Arizona, but the Arizona Land Department traded it away more than a decade ago in a complicated, messy and financially disastrous exchange.

The property eventually ended up in the hands of Valley National Bank, which in the late 1980s was Arizona's largest financial institution. Under pressure from federal regulators to sell unprofitable assets, Valley sold the land to Phoenix-based Del Webb in 1989 for the fire-sale price of $11 million--$2,037 per acre.

The property remained undeveloped for the next decade because it lacked sufficient water. But that problem, too, was solved, at least for the next 100 years. Water was obtained from the most unlikely of sources--a small Native American tribe more noted for its Harrah's Casino than its water-brokering power.

The Ak-Chin Indian Community south of Phoenix has rights to immense quantities of water that the federal government provides to the tribe to settle aboriginal water-rights claims. Much of the Ak-Chin's water settlement comes from the taxpayer-financed, $5 billion Central Arizona Project canal, which each year diverts more than 1.4 million acre-feet (an acre-foot equals 325,000 gallons) from the Colorado River and pumps it through a 336-mile canal to Arizona cities, farms and industries.

The Ak-Chin had no immediate use for some of its water, so the tribe leased 6,000 to 10,000 acre-feet a year to Del Webb in a deal that will net the tribe more than $100 million over the next century.

The tribe's windfall is a pittance, however, compared to the $2 billion in revenue Del Webb expects to generate over the next 20 years from the Villages at Desert Hills.

This is the fourth far-flung master-planned community that Del Webb has unleashed on the Valley and its taxpayers in the past four decades. The other three--Sun City, Sun City West and the sprawling Foothills project south of South Mountain--have all spurred waves of development on the urban fringes, contributing to traffic jams, spreading pollution and loss of open space.

The Villages at Desert Hills epitomizes the manipulation of government agencies to the benefit of developers. Taxpayer-owned state land is sold for a song, federally subsidized water is imported from a river hundreds of miles away. Cities and counties blithely scrap low-density master plans at developers' behest, and when citizens complain about the destruction of their surroundings, they are ignored.

It's a pattern that has become familiar in Maricopa County over the past two decades. Maricopa County's population has surged by an incredible 574,000 people during the Nineties alone, making Phoenix the 16th-largest metropolitan area in the nation.

The rampant growth has been welcomed by conservative Republicans who have controlled the state legislature and the governorship for most of the past 12 years. Efforts to pass laws that would encourage development near urban centers while making development on the fringes more difficult and expensive were ignored.

Until this year.
In March, a coalition of environmentalists--led by the Sierra Club and Tucson attorney David Baron of the Arizona Center for Law in the Public Interest--launched an initiative drive to place a proposition on the November 3 ballot that would have required a host of strict growth measures. The most significant provision would have required every city and county in the state to create urban-growth boundaries--lines outside of which new development and services would be limited.

Under such a plan, Del Webb's bulldozers wouldn't be allowed to grind up the desert near New River.

The prospect of the Citizen Growth Management Initiative (CGMI), modeled after a 1973 Oregon land-use law, terrified the Arizona development community.

Republican Governor Jane Dee Hull joined the most powerful developers in the state--including Drew Brown of DMB & Associates and Phil Dion, chairman of Del Webb (who also serves as Hull's campaign finance chairman)--to develop a rival plan. They called it "Growing Smarter."

"Growing Smarter" quickly evolved into two elements--legislation and initiative. Last August, Hull signed the Growing Smarter Act, which slightly strengthens land-use-planning requirements for cities and municipalities and created a 15-member commission to study growth and make recommendations.

At the same time the legislature was approving the Growing Smarter Act, lawmakers created Proposition 303--also known as the Preserve Arizona Initiative, which will appear on the November 3 ballot.

Proposition 303 is a classic carrot-and-stick proposal. The sweetener is $20 million per year for 11 years in state funds to purchase open space from the state Land Department for conservation. The stick is draconian language that would prohibit the state from requiring cities and counties to create urban-growth boundaries, thus preserving the free-for-all development mentality that is Arizona's hallmark.

Proposition 303 also contains a "poison pill." The development community so despised the rival initiative that Proposition 303 states that the $20 million per year for land-acquisition purposes would go away if the citizen's growth-control-proposition also passed.

The pill will never be swallowed, however.
Environmentalists pushing the CGMI made a dreadful mistake. They miscalculated how much it would cost to gather signatures, and were unsuccessful in placing their initiative on the ballot.

"It was a strategic error on our part," says Sierra Club conservation coordinator Sandy Bahr.

If Proposition 303, conceived to combat the citizens' initiative, is approved next month, the environmentalists' monumental blunder could make it far more difficult to enact tough, statewide growth controls down the road.

Proposition 303 is well-financed by the development lobby and has raised more than $535,000 so far from corporate heavy hitters like Homebuilders Association of Central Arizona ($100,000), Bank One ($50,000), Bank of America ($50,000), Circle K ($50,000), Arizona Public Service Company ($50,000), Wells Fargo ($50,000), DMB & Associates ($25,000), Del Webb ($20,000), Arizona Association of Realtors ($15,000), the Arizona Diamondbacks ($12,500) and the Phoenix Suns ($12,500).

Along with money comes expertise.
The Proposition 303 campaign is being orchestrated by Chuck Coughlin, once a political aide to former governor Fife Symington. Coughlin has created slick brochures, enchanting television commercials and ubiquitous campaign signs.

The Sierra Club has launched a feeble counterattack, with about $30,000 at its disposal.

The carrot offered by Proposition 303--$220 million over 11 years for preservation of open space--has split the environmental community.

Groups narrowly focused on obtaining and preserving open space, such as the Superstition Area Land Trust, want to tap the $20 million per year to buy state land, and are supporting the measure. Environmentalists with a broader agenda see the proposition as a blatant greenwash bribe.

Proposition 303 also has provided a clear difference between Governor Hull, who strongly supports it, and Democratic rival Paul Johnson, who calls it a fraud.

Whatever the outcome on Proposition 303, there is no doubt the debate over growth management in one of the fastest-growing states has finally taken center stage.

The Sierra Club vows to come back with another version of its CGMI for the 2000 election. This version could supercede Proposition 303 and do things like require cities to set urban-growth boundaries.

The environmentalists also might have their new initiative amend the Arizona Constitution and allow the state Land Department to set aside up to 10 percent of its 9.4 million acres of public land for conservation--including 500,000 acres in urban areas.

Such an amendment would revolutionize land management in Arizona and provide a powerful planning tool for cities and counties.

But the presence of Proposition 303 on this year's ballot will make it more difficult for the CGMI's backers in two years. They will face an uphill battle and the vehement resistance of developers and their political allies.

Jane Hull says her interest in the "Growing Smarter" campaign preceded any effort by the Sierra Club to place the ill-fated CGMI on the ballot.

"One of my first priorities was that growth was a major problem and we needed to address it," Hull says.

While that may be true, there is no doubt that Hull's Growing Smarter bill and Proposition 303 would have faced steep odds in the legislature if it hadn't been for the prospect that the CGMI might be on the ballot.

Steve Roman, a Bank One vice president and spokesman, says the environmental initiative forced legislators of every stripe to begin seriously discussing growth management, or, at least, ways to defuse the citizens' initiative.

"We have to do something for this state in terms of making sure of how we grow is appropriate, but at the same time, we don't want to sacrifice the state's economic environment as well," says Roman, who also serves as Proposition 303 finance chairman.

Hull ascended from her secretary of state post to the governor's chair after Symington resigned in September 1997. Within weeks, Hull says, she and her staff met with developers, farmers, ranchers and environmentalists to discuss growth issues and develop a plan to address sprawl and the loss of open space.

Environmental input came primarily from groups that specialize in purchasing land for open space, including the Nature Conservancy, the Superstition Area Land Trust and the Desert Foothills Land Trust--all of which salivated over the prospect of a $220 million pot that could be used to purchase environmentally sensitive property owned by the state Land Department.

"We tried to take the people who would sit at the table and say, 'How do we really want to approach growth and how do we want to manage it?'" Hull says.

Hull says players like the Sierra Club and David Baron are concerned with broader environmental issues, including air and water pollution, and weren't interested in talking under those conditions.

"Some people just wanted their way, or no way," the governor says.
The meetings led to the Growing Smarter Act and Proposition 303. The legislative effort was headed by Hull staffer Maria Bier and state Land Department preservation director Arlan Colton.

With more than a decade of municipal-planning experience, Colton quickly became the technical authority on land-use policies. Prior to coming to the Land Department, he served for 10 years in various planning roles in Pima County before becoming planning director for the Tucson Airport Authority.

Colton, Bier and several other state officials, including Representative Carolyn Allen, attended a Western Governor's Association meeting last year in Jackson, Wyoming, where preserving open space was the primary issue. The meeting spurred work throughout the winter and spring to develop legislative proposals to strengthen the ability of cities and counties to manage growth.

Among the proposals enacted by the Growing Smarter Act are requirements for more public participation in the development of long-term municipal plans, a two-thirds vote by the municipal authority to adopt or amend those plans and a requirement to have the detailed plans completed by December 31, 2001.

The law also requires municipal development plans to address elements that frequently were overlooked in the past. These include:

* Designating specific areas for open space.
* Identifying logical growth corridors.
* Describing environmental impacts from development.

* Having developers pay their "fair share" to defray the costs of new infrastructure. In government lexicon, such payments are called "impact fees."

* Sharing the completed planning document with neighboring municipalities to promote a regional outlook.

* Requiring a two-thirds vote to amend master plans.
* Encouraging the state Land Department to create and administer conceptual plans that are coordinated with local municipal plans.

The Growing Smarter Act also created the Growing Smarter Commission, a 15-member panel that will be appointed by the governor, the legislature and state agencies. The commission, along with its eight subcommittees, is to prepare recommendations on how to manage growth statewide by next September 1.

Hull gushes over the commission, which critics predict will produce a do-nothing report that will be shelved and forgotten.

"The most important thing [about Growing Smarter], which is what I wanted when we began last October, is a commission of 15 people that is going to look at a number of land-use areas," Hull says.

Although fervent environmentalists might wish to portray Growing Smarter as a compromised document, they must concede an incontrovertible fact: Its planning requirements and commission mark the first time the Arizona Legislature has come close to addressing statewide growth-control issues.

"We were able to make some really significant reforms and changes in the city and county enabling statutes," Colton says.

Even supporters of the law agree that much more work will be needed.
"This is a starting point," says Bank One's Roman.
While the legislature was approving the Growing Smarter bill, it was also voting to place Proposition 303 on the ballot. One key provision of Proposition 303 requires any money taken from the $20 million annual allotment for land preservation to be matched by private or municipal funds.

The legislature's offer to spend $20 million annually on open space is a stunning turnaround. Last year, state lawmakers refused to even consider a bill to spend $1 million to acquire environmentally sensitive lands from the state Land Department.

Why the abrupt turnaround?
"I'd like to think it was my charm," says Hull.
Hard-core environmentalists say the $20 million-per-year provision is designed to appease voters concerned about growth while acting as a smoke screen for developers, who will continue to reap the benefits of uncontrolled growth.

"This [Proposition 303] is a developer's wet dream," says Kieran Suckling of the Southwest Center for Biological Diversity.

The center is the most aggressive environmental group in the Southwest, if not the country, specializing in precise legal attacks to promote wilderness systems and protect endangered plants and animals.

The $20 million carrot enticed a cadre of preservationists who would rather find funds to purchase and protect specific tracts than engage in philosophical debates over private-property rights versus urban-growth boundaries.

Proposition 303 backers enlisted the services of one of the Valley's most notable preservationists to spearhead the campaign. Octogenarian Ruth Hamilton mastered environmental politics more than 30 years ago when she and several friends led the effort to create the Phoenix Mountains Preserve. A hiking trail--the most difficult in the preserve--is named after Hamilton in honor of her foresight, grit and political acumen.

The retired Republican businesswoman is a consummate arm-twister and close friend of Governor Hull. She says Proposition 303 is crucial to the preservation of critical desert washes and sensitive terrain.

"It is a wonderful opportunity for us to acquire land," Hamilton says. "If we don't get the land now that I want us to have, it is ripe for development, and I'm afraid the state Land Department will be forced to sell it."

Hamilton says she abhors the Sierra Club's urban-growth-boundary proposal because she says it will stymie economic development and do nothing to preserve open space. She also acknowledges that the $20 million per year from the legislature, along with the $20 million in matching funds, will not purchase much urban land.

But just because the money isn't as plentiful as she'd like is no reason to avoid setting goals to save sensitive areas, Hamilton says.

"When we first started the acquisition of the mountain preserve, we didn't talk about money. We knew that's what we wanted, and that's what we went for," she says.

Hamilton is convinced that more money will come once the legislature recognizes how important open space is to the public and how willing it is to pay to keep it.

"I think it is the wish of the people. That's what they want," she says. "They want that open space."

Hamilton has contributed $10 to the pro-Proposition 303 campaign.

People might want open space, says David Baron, but not at any cost.
"It is very hard to get our public officials to do anything without strings attached, which Proposition 303 vividly shows," says Baron, architect of the ill-fated Citizens Growth Management Initiative. Baron's long-running battles with the legislature over air- and water-quality issues are legendary.

"They just can't provide money to buy land," Baron says mockingly of Proposition 303's proposed $20 million annual appropriation. "They also have to include language that prohibits strong growth-management plans. It's just outrageous!"

Baron is correct when he says there's plenty for developers to love about Proposition 303.

The measure was written primarily by Phoenix real estate attorney Steve Betts, and was designed to counter every point in the CGMI. If approved by voters, Proposition 303 will prohibit the state from requiring:

* Cities and counties to establish growth boundaries to protect outlying areas from development.

* Air- and water-quality controls as part of municipal growth-management plans.

* Street and highway environmental-impact studies.
* Voter approval of all growth-management plans and amendments.
Jack Frazier, president of the McDowell Park Association, says the ugly side of Proposition 303 undermines whatever good might have come out of the Growing Smarter Act, which itself is rife with problems.

"Proposition 303 means business as usual as far as growth controls are concerned," Frazier says. "In fact, it's even worse. It really puts a lot of brakes on controls."

Proposition 303 supporters say the measure doesn't do anything the legislature wouldn't have adopted anyway. Further, it doesn't prevent cities and counties from implementing strict growth-management plans; it just doesn't require them to.

"There is nothing in Growing Smarter or the initiative that prevents them from addressing growth-management problems," says gubernatorial aide Maria Bier.

Baron dismisses as nonsense the contention that cities and counties are capable of enacting tougher growth-control measures.

"Over the years, the developers have gotten the laws written in such a way to severely limit what local governments can do," Baron says.

When cities try to stem growth, they invariably are sued and end up losing in court. That's what happened in Sedona when citizens tried to pass a ballot measure to limit building permits. Developers sued the city, claiming it had no authority to limit growth. The growth-control effort eventually failed.

Expecting municipalities to solve regional growth issues on a piecemeal basis is unrealistic, Baron says.

"You can't have strong growth management unless everybody has to do it," he says.

Environmentalists argue that Proposition 303 diverts attention from its attack on growth-management tools by dangling $20 million a year in front of voters. The money, opponents say, is a pittance, and there is no guarantee it will be available past the first year.

"We are all very concerned that money is just going to be frittered away or it just won't be there," says the Sierra Club's Bahr.

The $20 million annual appropriation--while an unprecedented outlay by Arizona Legislature standards--pales in comparison to efforts by other states to preserve open space. Florida, for example, spends $300 million per year on land-conservation efforts.

Even if the legislature fully funds Proposition 303 over the next 11 years, and municipalities and private sources provide matching funds, the $440 million won't go too far in acquiring lands in expensive urban areas. The money would purchase only 11,000 acres at an average price of $40,000 an acre--which is well below current urban-land prices. Even if 11,000 acres were purchased, it would barely put a dent in the development machine that is absorbing more than 9,000 acres per year in the Valley.

And not all the money will be spent on acquiring state trust land.
Environmentalists point to language in the Growing Smarter Act that allows up to 10 percent of the $20 million state appropriation each year to go to farmers, ranchers and developers who take undefined action to preserve open space.

The law also allows deep-pocket developers to set up nonprofit land trusts to obtain matching state funds to purchase state land outright or to acquire the development rights to the land. Under this scenario, environmentalists argue that developers can enhance the value of their projects by acquiring adjacent state land and setting up essentially private conservation preserves--subsidized with public funds.

The biggest concern, however, is that the legislature will fail to appropriate the $20 million after the first year or years.

"What happens when there is a budget shortfall?" Baron asks. "Does anyone really believe they are going to keep their hands off this money? There is no assurance whatsoever that we are going to see this money after next year.

"So what are we buying? We are buying severe restrictions on meaningful growth management in exchange for money that could disappear tomorrow or disappear within a year."

Governor Hull challenges Baron's skeptical outlook. She says the legislature will appropriate the money every year, especially if another ballot measure--the Voter Protection Act--is approved. The voter-protection measure would force the legislature to actually implement propositions approved by voters.

Furthermore, Hull says, if elected, she will lobby as governor to keep the funding intact.

"I wouldn't back out of it," Hull pledges.
The controversy erupting over Proposition 303 is just a prelude to a constitutional battle that is brewing to reform the state Land Department.

Democratic gubernatorial candidate Paul Johnson wants a constitutional amendment passed to allow the state Land Department to set aside 10 percent of its 9.4 million acres of state trust land for conservation purposes.

The Land Department controls about 500,000 acres of urban land, which, if classified for conservation purposes, could provide vast open spaces in the state's fastest-growing urban areas while providing habitat for native plants and animals.

Johnson's proposal is similar to a constitutional amendment approved last year by Colorado voters and strongly supported by Baron and Sierra Club leaders.

Developers and Governor Hull are opposed to the plan. Developers historically have enjoyed immense subsidies from the purchase of trust land, which has long been sold well below market value.

Hull says the sale of state lands for development directly benefits public education, and that setting aside nearly one million acres of trust land would sharply reduce funds for schools.

"I consider our state land kind of like the oil of Texas, and I think managing it brings us in a great deal of revenue and income," Hull says.

The state constitution requires most of the money derived from the sale or lease of state trust lands to be dedicated to public education.

"My concern would be how much money would the school trust lose if that happens?" Hull says.

The answer to Hull's question is clear: not much.

It is charitable to say the state Land Department has done a miserable job in fulfilling its constitutionally mandated duty of maximizing revenues for public education.

And what funds the department does generate for public schools from the sale and lease of trust lands accounts for only about 2 percent of the money allocated by the state legislature for public education.

The Land Department generates revenue for public education in two ways. Proceeds from the sale of state land are deposited in a permanent trust fund which is invested in interest-bearing securities. Only the interest earned from the investments are available for public education. In 1996, permanent fund investments generated $48 million for public education.

The Land Department also generates revenue through commercial leases of state land. In 1996, lease income available to public education totaled $15 million, bringing the total allocated to public education from the sale and lease of state lands to $63 million. Last year, the amount of Land Department funds allocated to schools increased to $68 million.

The amount is minuscule when compared to the more than $2.5 billion spent by the legislature on primary, secondary and university education.

Rather than being an asset similar to Texas oil, the state land is generating a paltry income for its primary beneficiary.

"It's a bogus argument the money is needed for the schools," Paul Johnson says.

To the contrary, the below-market sales of state land to developers, which the state auditor general found to be rampant, increase the burden on taxpayers to fund construction of new schools on state land sold to developers in outlying areas while older schools are being closed in urban areas with declining population.

Not only is the Land Department providing a tiny fraction of public-education funding, the department has seen the inflation-adjusted value of the permanent fund decline by $252 million since 1984. (Proposition 102 on the November 3 ballot would diminish the erosion of the fund's value by allowing the Land Department to invest in stocks and other higher-yielding securities.)

The loss is even greater when taking into account that most of the state-land sales were at below-market prices and that the value of the land greatly increased since 1984. The increased value would belong to the people of Arizona--rather than private developers--if the department had simply held the property.

Holding the property--particularly environmentally sensitive lands in urban areas--is exactly what proponents of amending the state constitution want the Land Department to do.

"The long-term solution is to amend . . . the constitution to require that these lands be preserved as open space," Baron says.

Not only would the state lands provide open space, Johnson says, the Land Department would play a vital role in managing urban growth rather than encouraging sprawl.

Utilizing state land for conservation purposes could help redirect growth toward central cities, Johnson argues. The department controls huge stretches of land in the northern and northwestern sections of the Valley, plus additional holdings to the southeast of Apache Junction.

The Valley will continue its relentless outward expansion unless something is done to turn growth inward. Maricopa County's population is expected to increase by one million people in the next decade.

"The issue," Johnson says, "is where are they going to go?"
Only a handful of Arizona developers are focusing on residential development near urban centers. Tempe developer John Benton is among the most notable. His projects have played a pivotal role in the commercial and residential redevelopment of downtown Tempe.

Benton's latest project is a 12-home enclave a few blocks from Mill Avenue. The two-story homes with basements and porches are laid out in a cul-de-sac to encourage community activity. Benton believes there is opportunity to build more than 10,000 homes near urban cores throughout the Valley. But municipalities, he says, need to adopt policies that encourage infill.

"There is more opportunity for the preservation of land on the outside of our community if we figure out how to make it more beneficial to accommodate growth inside our existing boundaries," Benton says.

It's a sobering walk through the decaying forest that leads to the summit in the Four Peaks Wilderness area 40 miles east of Phoenix.

Tens of thousands of pine trees, bark baked black by a tremendous 1996 wildfire, wait to topple to the ground. Scrub oak flourishes from the roots of the dead trees.

Scattered fields of yellow wildflowers shout of late-season rebirth under the autumn sun.

To the east, range after range of deep-blue mountains stretch to the horizon. Below, extending across the Tonto Basin, lies the once-turbulent Salt River, its vigor tamed by Roosevelt Dam.

The granddaddy of the Salt River Project's six-dam water-storage system along the Salt and Verde rivers, Roosevelt Dam eight decades ago set the stage for the Valley's growth.

Roosevelt Dam was the first federal reclamation project in the United States. It triggered the development dynamo that has erased massive sections of the Sonoran Desert in a lifetime. Over the ensuing decades, more grand water projects, culminating with the Central Arizona Project, have filled Arizona's water needs.

Incredibly, there now is enough water for more than 10 million people to live in Arizona--even more, if strict water-conservation practices are employed and every drop is siphoned from the handful of remaining free-flowing desert and mountain streams.

The westward view from the peaks is obscured by a haze hovering above the Salt River Valley. Twenty years ago, the White Tank Mountains 70 miles away seemed close--but on this September afternoon, they are invisible. Beneath the dusty smog, the Valley's urban grid carpets the desert.

Breaking the geometric monotony of houses, shopping centers and highways is a half-mile-wide dirt trail that meanders through the metropolis--the Salt River.

One hundred years ago, the Salt River corridor was lined with cottonwoods and sycamores. The river was filled with giant, six-foot-long Colorado squaw fish that farmers skewered with pitchforks and ground up for fertilizer for fields irrigated by the Salt.

All the water has been long diverted from the river for "consumptive" purposes. The once free-flowing Salt River is now known as the "normally dry" Salt River.

The death of the lower Salt has not been widely lamented.
The dessication of a desert river has done nothing to slow Arizona's development juggernaut from reaching ever farther into the desert.

With natural limits to growth rendered irrelevant by technology, the future of the Sonoran Desert will be decided in the political arena.

And with the legislature hesitant to aggressively address growth controls, voters will have to make the calls. Proposition 303 is undoubtedly the first of many growth-control and growth-deregulation initiatives that will be fought.

Contact John Dougherty at his online address: jdougherty@newtimes.com

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