Jerry's World

Jerry Colangelo and his pals have gobbled up the lion’s share of public development dollars. If downtown’s to be saved, City Hall’s got to share the wealth.

(Colangelo also benefited immensely from an unpopular sales tax that Maricopa County Supervisors approved in 1994 that raised $243 million to pay for the BOB. Two of the three supervisors who voted for the tax were routed at the ballot box later while the third, Mary Rose Wilcox, was shot and wounded in 1997 by a man who was angered over the appropriation.)

Compared to many other major cities -- such as Houston and Denver that have successfully revitalized their downtowns -- Phoenix's investment in downtown redevelopment is a pittance.

"Phoenix has been a piker with incentives," Phoenix City Manager Fairbanks admits.

After reaping $300 million in public subsidies for his downtown edifices, Phoenix's sports mogul's poised to direct  the next wave of downtown development: infill.
Jackie Mercandetti
After reaping $300 million in public subsidies for his downtown edifices, Phoenix's sports mogul's poised to direct the next wave of downtown development: infill.
Under the direction of outgoing Mayor Skip Rimsza, the city has dutifully implemented Colangelo's downtown developments.
Jackie Mercandetti
Under the direction of outgoing Mayor Skip Rimsza, the city has dutifully implemented Colangelo's downtown developments.

Though this is hardly what anybody has in mind when it comes to energizing downtown Phoenix, Fairbanks notes that Scottsdale plans to give away $163 million to a private developer to build a Wal-Mart at the old Los Arcos Mall site on Scottsdale Road.

"That one project is more money in incentives than everything the city of Phoenix has provided in downtown since the early 1980s," Fairbanks says. "We are small potatoes compared to what other cities provide."

Since critics of the way downtown issues have been handled consider him part of the problem, Fairbanks may not be the best authority on incentives, but he insists that all downtown needs to do to attract more people is provide a wide array of cultural venues in a safe and attractive environment.

"I think the value of incentives gets overplayed. If people don't want to come back to the center of the city, you can't pay them enough money to drag them there," says Fairbanks.

Besides the city's direct investments in Colangelo's projects, it has given incentive money to a few other big downtown players.

It has provided $6.5 million toward non-construction costs for the Phelps Dodge Tower and agreed to abate $1.3 million a year in property taxes for the 20-story office building for eight years. Phoenix is also abating the same amount in property taxes for another downtown high-rise, the Collier Center, for eight years.

The city passed along a $10-million federal grant to assist construction of the Renaissance Square project and threw in a $13-million tax-exempt bond to trigger development of the Arizona Center project.

As for downtown housing, the city provided $2.3 million to help purchase land for the 105-unit Artisan Village project to begin construction later this year at Seventh Street and Roosevelt. It also kicked in about $2 million for the 90-unit Orpheum Lofts development, plus a few million more bucks to a handful of other residential projects in the downtown area. The incentives will help construct about 300 downtown residential units.

Beyond this, the city is providing no significant funding for small businesses, grassroots art groups or low-intensity residential development.

One notable exception to the city's tightwad approach approach to anything outside Colangelo's empire is its $21.5-million investment in a building that will serve as the headquarters for the biotechnology center currently under construction.

Given the positive response to that project, the city might consider expanding its incentive programs. The biotechnology project has already triggered an additional $27-million construction project by ASU and the University of Arizona to build a biosciences research facility adjacent to the biotechnology center.

That's just the first of what's expected to be a substantial investment in downtown by ASU. The university is studying the possibility of opening a night law school, a nursing program and design school downtown in the next few years. It is anticipated that the expansion will bring in more than 12,000 graduate students to the area, many of whom will live downtown. Northern Arizona University is also projecting it will expand its science programs that will bring another 3,000 students to downtown.

Many communities across the country have developed economic incentives to foster art and cultural districts, notes the city's draft development plan for the area along East Roosevelt, where art galleries and cafes are springing up even without any economic help from the city.

Among the incentives in other places have been low-interest loans, tax incentives and tax credits for the purchase and renovation of existing buildings and for development of pedestrian-friendly streets.

Mayor-elect Phil Gordon says he wants to modify the city's building code to take into account the unique challenges in restoring historic properties. The current code often makes it prohibitively expensive for small businesses to rehabilitate older sites. "Small businesses often say it's not worth the money and the headaches," he says.

Fairbanks' point of view notwithstanding, economic incentives have proved extremely valuable in triggering a return to urban living in western cities like Denver and Houston.

Denver's remarkable downtown renaissance came about largely because of historic preservation, a major investment in the arts and construction of a regional light-rail system. Rather than bulldozing its entire warehouse area, Denver embraced artists who had flocked into what became the Lower Downtown Denver Historic District in the 1980s.

The city also put money into downtown amenities and beautification projects. The Denver Urban Renewal Program invested $40 million for an amusement park, the cleaning up of the Platte River, the development of 40 miles of cycling parkways and the construction of the Denver Pavilions retail-and-entertainment complex.

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