A Fortune Runs Through It

Tom Sands is poised to open the floodgates. On June 2, the Salt River Project engineer will begin diverting water from a canal in Papago Park into Tempe's Town Lake, the centerpiece of the city's Rio Salado project.

About 100 million gallons of water a day will cascade into the Salt River channel, filling Town Lake in about two months and culminating more than 30 years of dreaming, planning and building to return water to the river.

Wedged between inflatable rubber dams, the two-mile-long Town Lake will slowly take form in the shadow of downtown Tempe's twin buttes, where pre-Columbian Indians etched petroglyphs overlooking a vibrant river that nourished a thriving corridor of cottonwoods, mesquite and wildlife.

The Salt River flowed year-round through the Valley until 60 years ago, when completion of upstream dams diverted nearly all the water into irrigation canals. Before long, the dry riverbed became the Valley's dumping ground, host to scores of landfills.

In 1987, Maricopa County voters soundly rejected a $1.5 billion property-tax boost to finance a grandiose, $3 billion plan to transform 26 miles of the Salt River bed into parks and new developments. The next day, then-mayor Harry Mitchell vowed that Tempe would proceed with its own Rio Salado project.

Twelve years later, the most visible symbol of that effort--Town Lake--is imminent.

But $1 billion in commercial, retail and residential development that is supposed to go hand in hand with Town Lake is not imminent. The grand Peabody Hotel the city has touted may not be built, which would impact the city budget in other areas.

Meanwhile, the price Tempe's citizens have paid--some say unwittingly--for their own version of Rio Salado has escalated beyond anyone's wildest expectations.

What was supposed to be a $45 million project has consumed more than $100 million in the past decade, with an additional $59 million in expenses on the horizon. Throw in $45 million more in state and flood-control district expenses and, to paraphrase Everett Dirksen, you're talking real money:

$200 million-plus.
That's twice what the City of Phoenix spent to build America West Arena.

Tempe's three-decade obsession to transform the trash-strewn river bottom into a huge public water park bounded by $1 billion worth of private development is as bold as it is controversial.

"I think the Town Lake is to Maricopa County as Central Park is to New York," says Tempe developer John Benton, whose team plans to break ground on a 275-room hotel and an eight-story office building on the Town Lake's south shore later this year.

Critics take a more jaundiced view, claiming the project is a massive subsidy for developers and that the money would have been better spent on other civic projects.

"The public has never known what Rio Salado is all about," says former councilwoman Barbara Sherman. "They never knew what these costs are really. It's all been fluff."

The city has skillfully--some say deceitfully--negotiated its Rio Salado project through a daunting array of obstacles to move the lake from the drawing board to reality. (Tempe's Town Lake and Rio Salado project should not be confused with Rio Salado Crossing, the massive football stadium/convention center proposed along the riverbed in Mesa.)

Tempe's pathway has been paved with money. Lots of money.
Boosted by a robust economy and a 20 percent sales-tax increase--the 1993 tax hike was promoted as necessary to fund increased fire and police protection--Tempe has generated steady budget surpluses the past six years. The budget surplus is now averaging $15 million annually, and one-third of it is earmarked for Rio Salado.

But budget surpluses alone were not enough to fuel Rio Salado.
In 1995, the city council adopted a clever financing plan to build the $45 million Town Lake portion of the Rio Salado by selling bonds without the public's permission. The plan allowed the council to avoid what would have been a contentious election campaign.

With that financing plan in place, Tempe announced with great fanfare in May 1997 that the Peabody Hotel Group would construct a 1,000-room luxury hotel and convention center. The project, the city said, would "trigger" massive development around the lake and contribute $1.3 million a year in fees to help pay for lake operations.

Soon after the Peabody agreement was announced, the city began "building" the lake--shoring up the banks, realigning Rio Salado Parkway, constructing foundations for the inflatable dams, installing groundwater recovery wells and diverting sewer lines.

Yet as engineers prepare to turn on the spigot and fill the lake, the much-heralded Peabody Hotel and Resort remains unfunded and unbuilt. Peabody's failure to begin construction has forced the city to set aside an additional $5 million to cover the lake's operating expenses.

Incredibly, the city has never compiled a detailed accounting of the overall costs of Rio Salado, the largest capital project the city ever has undertaken. Spurred by New Times' inquiries, council members last week finally requested a concise, itemized budget.

Informal estimates obtained by New Times show the city already has spent $100 million on Rio Salado during the past decade and has committed another $24 million over the next five years. Additional outlays of $35 million loom.

Rio Salado's staggering costs, back-room bond financing plans and failure to lure timely private development have created fertile ground for political upheaval.

First-term councilman Hugh Hallman is considering what is expected to be a formidable run for mayor next spring against incumbent Neil Giuliano, who has held the seat since 1994.

No issue delineates their positions as clearly as Rio Salado.
Giuliano says the city's investment in Rio Salado will reap huge financial and recreational benefits for the city in the future.

"You don't do something like Rio Salado so that you can enjoy it on one of the first weekends that it is open and say it is a huge success," Giuliano says. "This is something that has to evolve over a long period of time."

Hallman says the city council let the Rio Salado budget swell from a rivulet to a raging torrent while obscuring the overall costs from the public. He says city leaders have quietly diverted money from vital city services to Rio Salado. That's malfeasance, Hallman says, and it's time for hard-nosed accounting.

"For $120 million, we got some rubber dams, water, a rerouted Rio Salado drive, and that's it," says Hallman.

Hired as Tempe's finance director in 1986, Patrick Flynn had barely unpacked his calculator before he started hearing about Tempe's dream to build Rio Salado.

"From the beginning of time, that's all I ever heard," the 49-year-old Flynn says. "The dream, every year."

In 1988, the dream seemed far-fetched, considering Tempe's financial picture, says Flynn, who has since become one of two Tempe deputy city managers.

Rapid growth had pushed up the city's debt to dangerous levels; financial catastrophe loomed.

"Some of my predecessors decided to keep a level debt service, despite the huge debt," Flynn says.

The policy was akin to making a minimum payment on a hefty credit-card bill--the principal would never be paid off.

"I was absolutely in shock," he says.
Flynn saw Tempe's day of reckoning. He expected the city would face "huge balloon payments" by the mid-'90s if something wasn't done.

Flynn sounded the alarm, and with the help of outside consultants developed a debt-management plan that would not only solve Tempe's financial crisis but generate a significant opportunity.

"I knew full well that if we adopted this policy in 1988 that by the time 1996 arrived we would have a $40 million windfall," Flynn explains.

Flynn's windfall is not the same as winning the lottery and getting a huge pile of cash. Instead, it's like paying off a credit-card bill and seeing the lender double your credit limit. Sure, you can spend, but you're going into debt again.

The city council accepted Flynn's belt-tightening plan, knowing it would allow the city to borrow even more money in the future.

"The council was very knowledgeable about that. This was repeated every year--getting to the promised land," Flynn says.

Not only did the council know there was going to be the potential to borrow $40 million, Flynn says there was a frequent discussion of whether the public should have an opportunity to determine how the "windfall" should be spent.

"There was an ongoing dialogue about do you want to bring the public in and say, 'How do you want to use this type of thing?'" says Flynn. "It doesn't have to go to Rio Salado. It could have gone anywhere--unrestricted."

That public debate never occurred. Mayor Giuliano and other council members made it clear that Rio Salado was top priority, Giuliano says.

Originally envisioned as a park first, business opportunity second, Rio Salado morphed in the early 1990s into the city's premier economic redevelopment project. After ignoring the river for decades, city fathers became convinced that their economic future was wedded to the river.

The plans called for Rio Salado to convert a two-mile stretch of undevelopable land straddling the unsightly Salt River bed into 850 acres of prime real estate for a landlocked city that had no place to grow. To attract--and, more important, protect--development along the river bank, the city needed to make a massive investment in flood protection.

In the early '90s, efforts to round up state and federal financing for the project had been unsuccessful.

So Flynn went to work, developing a finance plan for Rio Salado and presenting it to the council in 1995. Flynn's plan allowed the city to finance the centerpiece of Rio Salado, the $45 million Town Lake, by tapping into the long-anticipated windfall of debt.

"They were in love with it," Flynn said. "When I arrived with it, they saw their dream come true."

The plan called for the city to issue $40 million in variable-rate municipal bonds to be repaid by the city's sales tax, which voters in 1993 approved increasing 20 percent to 1.2 percent.

The city convinced voters the sales-tax hike was needed to pay for increased police and fire protection and to avoid further cutbacks in city services. At the time, the city had trimmed its annual budget by $500,000, and had had to cut back on such services as library hours. Rio Salado was not mentioned as a possible use for the money.

The 1993 tax hike generated far more money than needed for police and fire upgrades. The economy also shifted into high gear. Total city sales-tax collections soared to $49 million by 1995, up 44 percent from two years before. (Sales-tax collections are expected to reach $60 million this year.)

The city's burgeoning sales taxes provided plenty of money to repay the projected $3 million-a-year bond payment for Town Lake construction without a further increase in taxes.

"All the construction costs were covered," Flynn says.
More important, Flynn's plan allowed the council to issue bonds without asking for voter approval. Unlike most of Tempe's bonds, which are repaid by property taxes and require a public vote, the Rio Salado bonds would be secured by sales taxes and could be issued without a vote.

Flynn says the council seized the opportunity with gusto.
"They said that's what we want to do with the money," Flynn says.
Only one council member, Joseph Lewis, objected to the bonds being issued without a vote.

"I thought it was a golden opportunity to really get the public to buy in on the project with a vote on Rio Salado," says Lewis, who remains on the council.

Lewis' effort to put the bond issue before the public was rejected by the council on a 6-1 vote.

"I got hammered on the idea," he says.
Mayor Giuliano says there was no need to ask the public for approval to sell the bonds because the council knew the public favored the project. He says this belief was based on city polls and the reelection of city council candidates who supported Rio Salado.

"The city wouldn't be moving forward with Rio Salado if the public didn't support it," Giuliano says.

If the city had put the matter to a vote, there was every indication it would have been very close. In 1987, Maricopa County voters rejected by a 2-1 margin a plan to hike property taxes to pay for an expanded version of Tempe's Rio Salado project.

Voters in Tempe narrowly favored the county plan, although a majority of Tempe precincts voted against the proposal. The day after the election, then-Tempe mayor Harry Mitchell announced that Tempe would move ahead with its own version of Rio Salado.

Tempe voters have never voted on the city's own Rio Salado plan.

Tempe's courtship of the Peabody Hotel began in earnest on May 2, 1995, when city officials rolled out the red carpet for Peabody chairman Marty Belz and his partners.

The evening began with a rendezvous at the Buttes resort's Presidential Suite, where a trolley picked up the entourage and took them to the Arizona Cardinals' training facility for cocktails and hors d'oeuvres. From there, the group was ferried to House of Tricks in downtown Tempe for dinner before finishing the evening with dessert at Coffee Plantation on Mill Avenue.

Tempe officials were thrilled that Belz and company were interested in building a luxurious, 1,000-room Peabody Hotel and convention center on what would become the south shore of Town Lake. Peabody has long had a stellar reputation for service and hospitality at its hotels in Memphis and Orlando.

Attracting a Peabody Hotel to Tempe would put Rio Salado on the map. Tempe officials made it clear the city would do nearly anything to have Peabody's famous parade of ducks grace the shores of Town Lake.

Peabody got the message--and has been taking Tempe for a ride ever since.
The city selected Peabody as the master developer for the hotel, a convention center and retail and commercial projects in December 1995.

Soon after, Peabody began hinting that construction was imminent. "The market is getting better, and it's time to put this project together," Marty Belz said in April 1996.

Negotiations for the Peabody project, dubbed Cuidad del Lago, continued into 1997, when it became clear that the city was going to have to place a fortune in front of Peabody to get the hotel built.

At first, Flynn says he was astounded at what Peabody was demanding. He says he recalls thinking, "This is bullshit."

But the city submitted the question to outside consultants, who advised the city that if Tempe wanted a grand hotel, it would have to pay a grand ransom.

"If you want to do this deal, this is what you have to do. These are the parameters you have to work in," Flynn says the city was told.

Flynn says the council wanted the Cadillac of hotel projects, complete with marble walls and glittering chandeliers.

"This was their dream. A destination hotel, retail shops, a 125,000-square-foot conference center," Flynn says.

The grandeur of the project quickly infected the city staff.
"We couldn't help but get caught up in this," says Tempe Economic Development Administrator Jan Schaefer.

Bewitched by Peabody's prestige, the city agreed in May 1997 to provide $64.8 million in incentives to the hotel group, which is privately owned by the Belzes, whose family fortune is estimated to be worth several hundred million dollars.

The city also agreed to lease Peabody the land for the hotel, which the city had purchased for $7.1 million. The land would be deeded at no cost to Peabody after 10 years.

In addition, the city promised Peabody development rights for land owned by other property owners on the north shore of the lake, and 50 percent of all concession revenues generated by a marina that would rent boats.

In exchange, Peabody agreed to pay the city $1.3 million a year to help cover the lake's operating costs. The company also agreed to pay Tempe half of any profits--after the hotel's investors had achieved a startling (but not unheard-of for luxury resorts) 27.5 percent rate of return.

The agreement called for the city to begin construction of the lake, followed by Peabody breaking ground on the hotel so that the two projects would be completed at about the same time.

The city began construction on Town Lake in August 1997.
Peabody tried to line up financing to build the hotel, to no avail.
In July 1998, the city council amended its 1997 agreement with Peabody, giving the company another 18 months to begin construction or lose a $300,000 bond.

Peabody chairman Marty Belz says he is scrambling to secure $170 million in financing by a November 1 deadline. That would be seed money for construction of a $210 million hotel and $40 million worth of retail space.

Will Peabody be forced to seek another extension?
"It's going to be close, and I really don't know if we will have to ask or not," Belz says.

Peabody officials say they hope city council members will understand that the company is working diligently to secure financing and will agree to an extension if necessary.

"If they go back and look at what has happened in downtown Tempe, no developer was able to redevelop those properties within the original schedule," Belz says. "That's just the nature of redevelopment."

The city council, however, appears to have had its fill of Peabody's delays.
"I think we are on the last leg of the Peabody," says vice mayor Ben Arredondo. "I don't think we are going to have [a Peabody Hotel]."

If the Peabody Hotel project collapses, Tempe will be forced to seek a new master developer for the most important segment of the project--a process that will take several years to arrange and more time to construct.

The loss of the Peabody Hotel would have a negative impact on the city's budget. The city is projecting it won't receive "net positive revenue" from Rio Salado until at least 2015--and that's with the Peabody Hotel.

"If the hotel doesn't come on line . . . the city will need to carefully watch all other operating expenditures," according to an October 1997 memo prepared by Pat Flynn.

Operating expenditures already are being impacted. Last month the city council voted to take $2.5 million from the general fund and set the money aside in a reserve account for Rio Salado--which now totals $10 million. The fund will be used to help pay a portion of the lake's $3.3 million annual operating costs for the next four to five years.

(The lake will be costly because it is not your typical lake. The eastern half of the lake bed is extremely porous. To reduce the amount of water seeping into the ground, the city installed 10 recovery wells beneath the lake that will recapture water and pump it back into the lake. The lake's electric bill is expected to approach $800,000 a year. Since there will be no naturally flowing water into the lake once it is full, more than 750 million gallons of water must be released into the lake from Salt River Project canals each year to make up for evaporation. Estimated cost: $313,000.)

Peabody's possible departure might have a silver lining. Some council members say Peabody's exodus would give the city the opportunity to save tens of millions of dollars in incentives.

"Where in 1995, '96 and '97 the city literally gave away bunches of incentive money, I think we all agree that's not going to happen the next time around," says councilman Leonard Copple.

"We pulled our trigger, we spent our money, we did everything we could to make it a viable lake," he says. "Now, it's up to Peabody."

Tempe certainly did spend the money on Rio Salado.
Exactly how much has been spent is uncertain until the city completes a detailed accounting analysis of the project later this summer, Flynn says.

"The council would like to see what we spent the money on and, in addition to that, they would like to see where in the hell we got the money," Flynn says.

In the meantime, Flynn's rough estimates will have to suffice.
Flynn's records show the city has spent about $100 million on the project during the past 10 years and is committed to spending at least another $24 million in the next five years--much of it is going for parks and other amenities that will ring the lake.

The $124 million is four times as much as the city said it would spend on Rio Salado in 1993.

The spiraling costs have not generated much discussion outside Flynn's office. The city's public relations department focuses primarily on the $45 million outlay to build Town Lake.

But the city has spent tens of millions of dollars improving Rio Salado Parkway, building the second Mill Avenue Bridge, constructing bike paths around the lake, installing streetlights and building parks--all essential features of Rio Salado.

The $124 million committed so far doesn't include several major pending expenses. The city has plans for a $15 million marina on the north side of the lake. It would provide a safe haven for boats when the Town Lake's inflatable dams must be lowered to allow flood waters to pass through.

Another major expense faced by the city, and eventually developers, is to move high-tension power lines that run along the south shore of the lake site underground. The cost to relocate the power lines is estimated at another $20 million, a portion of which would be repaid by developers.

Tempe's financial commitment for Rio Salado also doesn't include $45 million spent by the state Department of Transportation and the Maricopa County Flood Control District to channelize the Salt River through Tempe as part of the construction for the Red Mountain Freeway in the mid-1980s.

Added together, state, county and city taxpayers could be looking at more than $204 million in past and future expenses to build Rio Salado.

Tempe has long touted the Rio Salado project as a "public/private" partnership where private developers will repay 60 percent of the capital and operating costs.

But this is misleading. By law, developers will only be required to pay 60 percent of the $45 million cost to build Town Lake--or $27 million--rather than 60 percent of the entire capital costs for Rio Salado.

Despite the rising taxpayer burden, the project continues to have solid support from a majority of city council members.

"I'm not looking at the cost to our city right now," says councilman Joe Spracale. "I'm looking at what it is going to reap us in the future."

If development around Town Lake goes as planned, Town Lake will create thousands of new jobs and tens of millions of dollars in tax revenue for the city.

Nevertheless, councilman Joe Lewis says the city should acknowledge it is spending far more on Rio Salado than the $45 million spent on the Town Lake portion of the project.

"I don't think anybody is trying to mislead anyone," Lewis says. "But we need to start changing the figure we put before the public."

Hugh Hallman knows how to cut a business deal.
The 37-year-old Tempe native majored in economics and political science at Claremont Men's College and earned a law degree from the University of Chicago. Hallman, a self-described "pencil-necked geek," has made a living negotiating more than $3 billion worth of business transactions for well-heeled clients.

Since being elected to the council in 1998, Hallman's sharp eye for detail and relentless questioning of city staff have occasionally turned routine council meetings into nerve-racking interrogations.

"I've had all six councilmen and the entire city staff glaring at me at once," he says.

Blunt and occasionally rude, Hallman has little patience for bureaucratic butt-covering.

During a March council meeting on Rio Salado, Hallman doggedly questioned city staffers about the details of the city's contract to purchase water for Town Lake.

One employee after another shrugged off Hallman's question, passing the microphone down the pecking order. Finally, the microphone was handed to a junior employee sitting a few rows up in the audience, who provided a direct answer to Hallman's query--an answer that contradicted assertions made by city brass.

It was just another day on the job for Hallman.
No city project has attracted Hallman's attention as much as Rio Salado. The city's handling, or, in Hallman's view, botching, of Rio Salado will likely serve as a central plank in Hallman's possible bid for mayor next spring against incumbent Neil Giuliano.

Hallman says the city turned what could have been a relatively inexpensive project emphasizing recreation and wildlife zones into a monstrous economic development labyrinth requiring an investment that will easily top $200 million to complete.

The city, Hallman says, has misled the public into believing the project could be paid for without raising taxes and that the public would get a lake, parks and trails for $45 million.

The reality, Hallman says, is that money from the 1993 sales-tax increase is contributing to the repayment of $45 million in bonds sold to build the lake. In addition, the city is simply diverting funds from other departments to funnel money into Rio Salado.

"Money that should have been spent on the police department went into Rio Salado," Hallman says.

Hallman says an independent study showed the police department was underfunded by about $2.6 million a year over the past five years, which is about half the sum diverted from the city's general fund surplus each year to help finance Rio Salado.

Hallman says the city is now scrambling to spend $13 million in the next few months to build parks along the Town Lake's shoreline so the public will have something other than rocks and gravel to walk on when the lake officially opens in October.

That's just the beginning of a wave of huge expenses to come, Hallman predicts.

Hallman is particularly critical of the city's deal with Peabody. Not only did the city offer Peabody $64.8 million in incentives to build the hotel (compared with $16 million in incentives the city granted for all of its Mill Avenue redevelopment projects), it gave Peabody the rights to develop property owned by others on the north side of the lake.

"The city agreed to condemn the land for Peabody," Hallman says.
Meanwhile, Peabody has failed to turn one spade of dirt since it supposedly became the city's partner nearly four years ago.

Conveying development rights to Peabody prevented property owners from moving forward with their own development plans.

"Peabody's development options are sterilizing the entire project," Hallman says.

Hallman led a successful uphill battle last year to convince fellow council members to put a February 1, 2000, deadline on Peabody's contract with the city to either start construction or quit the project.

Hallman says the city can no longer afford to make Rio Salado its top spending priority.

The $3.3 million operation and maintenance budget for Town Lake is approaching the size of the city's entire parks and recreation budget of $4.2 million and is triple the amount of money the city spends on community charities.

"Rio Salado should be done as we can afford it," he says. "But it shouldn't be done at the expense of the things that are vitally important to the city."

Neil Giuliano has staked his political career on Rio Salado and Town Lake.
"When I ran for mayor in '94, I ran saying I was going to be aggressive in pursuing how we would make this dream a reality," the 42-year-old Arizona State University administrator says.

Giuliano's not about to back away from Rio Salado in the face of a challenger who would attack the city's management of the project.

"The moons have aligned correctly for this," Giuliano says. "We have really been very fortunate. Everything has fallen in place in a very positive way."

The city, Giuliano says, has delivered to residents a wonderful recreation facility that eventually will attract more than $1 billion in private development.

Town Lake, he insists, was built without raising taxes--although he admits the 1993 sales-tax boost has helped finance the lake. He is vehement in his contention that the project has been absorbed into the city's budget without having an impact on other city operations.

"I feel very strongly that we haven't let anything go in the City of Tempe," he says. "Each of our other 40 parks in Tempe are as nice and well-kept as they ever have been."

Giuliano says the city has made improvements to the library, built two new recreation centers, a police substation and a fire station in the past few years during the peak of spending for Rio Salado.

"I don't think we have neglected other needs of the city," he says.
At the same time, Giuliano says the city's financial condition couldn't be much stronger.

"All of our reserves are at capacity now," he says.
The city, he says, is so flush with cash that it is pulling funds out of reserve accounts to pay for capital improvements rather than incurring further debt.

"Our financial situation in the City of Tempe is in the top 1 percent of cities in the U.S.," Giuliano says.

Rio Salado's critics, he says, represent a small number of Tempe residents. A survey last winter found only 11 percent of city residents thought Tempe was spending too much on Rio Salado.

But since the city has never released a detailed public accounting of the project, it would seem difficult for the public to know how much is too much.

Giuliano, however, says the Tempe electorate is extremely well-informed. Voters, he says, should have surmised by now that Rio Salado was costing far more than $45 million--even though that's the number the city's public relations arm regularly cites.

"I think anyone from the public who has monitored the project and kind of observed what we have done over the last 10 years would understand that," Giuliano says.

Few residents have closely followed city actions over the past decade, with the possible exception of Hallman, who is poised to attack the mayor for letting Rio Salado costs mushroom.

Giuliano will also face criticism if the Peabody Hotel deal collapses. Giuliano has strongly supported the Peabody development project since its inception and was against placing a deadline on the company to begin development.

But Hallman rammed the deadline through the council last summer. Peabody's February 1 drop-dead date to begin construction couldn't come at a worse time for Giuliano--a little more than a month before next spring's mayoral election.

If Peabody bails on the project, Tempe will be forced to spend millions of dollars on lake operating expenses that Peabody had promised it would be paying by now.

Giuliano brushes off the specter of Peabody's ghost looming during an election campaign.

"I will be extremely disappointed that they weren't able to go through with this project and perform as we had hoped," he says. "But we will accept the fact they won't be performing and move on to find another partner."

If Peabody departs, expect Hugh Hallman to say it's time for Tempe to move on and find another mayor.

Town Lake will not come without restrictions.
There's no fishing.
There's no swimming.
There's no motor boating.

Sailboats, paddleboats and water craft powered by electric engines are welcome.

The restrictions are in place for at least a couple of years until the lake's water quality is stabilized.

"The actual water quality and ecological balance in Town Lake will not be completely known for some time, possibly even years after the lake is initially filled," a report prepared by an environmental consultant, CH2MHill, states.

The city plans to spend about $350,000 a year actively managing the lake's water quality. There are concerns that the lake from time to time might develop rather noxious conditions.

The 1996 CH2MHill report succinctly outlines some of these concerns about certain aquatic life:

"For instance, under certain conditions, blue-green algae grows and dies in mass. Then it stinks, producing unpleasant gasses until the gasses give it enough buoyancy to rise to the surface in large, foul-smelling mats.

"Effective lake management practices can minimize the occurrence of these mats but probably cannot prevent them entirely."

The same report notes that in other instances, "fish kills can occur if oxygen content falls too low; on the other hand, fast-growing, emergent vegetation can clog the surface of the lake."

There is no doubt that from time to time, Town Lake will be an unpleasant place to be.

"Through active management of the lake, such undesirable conditions can be reduced in both frequency and severity, but probably will not be eliminated entirely," the report concludes.

The image of foul-smelling algae mats and belly-up fish washing up against the shoreline below the $210 million Peabody Hotel doesn't sit well with Peabody chairman Marty Belz.

"That would be horrible if something like that happened," he says.
Time will tell if Tempe can manage the lake's water quality. If Rio Salado finances are any indication, nose plugs might be required accessories.

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


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