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A LAME DUCK IN HOT WATER

John Thul walks to the back of his nearly completed $8 million sheet-metal-stamping plant and gazes at the undeveloped rangeland stretching for miles to the north.

His face fills with the distressed look of a man who's been had. Thul points to a lone creosote bush, about 150 feet away from the loading docks, where tractor trailers soon will gun their engines around the clock. He glances over to the adjacent air-conditioning pad, where two noise-blasting chiller units will be installed.

He looks back at the vacant desert and shakes his head. "That's where they want to build the houses," he says, pointing at the shrub a stone's throw away. For all sorts of reasons, Thul wanted to be sure his new Arizona Precision Sheet Metal Inc. factory would be located far from residential neighborhoods. His company has been dogged by noise complaints for years at its present location in north Phoenix, forcing him to shut down manufacturing at nights and any time he opens his loading-dock doors.

More important, he wanted to have room to expand his burgeoning business, expected to grow to 1,000 employees with $100 million in sales over the next five years. Any nearby residential development would severely hamper expansion, he says.

Phoenix economic development officials assured Thul the site he eventually picked--the northwest corner of 19th Avenue and Pinnacle Peak Road--was in the heart of a vast industrial reserve just beginning to take off. His new plant would be a welcome change from the junkyards that litter the surrounding area, they said. Homeowner complaints would be a thing of the past.

"One of the things we liked about this property was that we're surrounded by industrial zoning," Thul says.

The city was so hot to keep the family-owned company and its 318 employees in Phoenix that it even helped secure tax-free financing--the first such city-sponsored lending in years.

But that was before Phoenix interim mayor Thelda Williams decided she wanted something different for the area. Something like a 377-unit Continental Homes subdivision right next door to Thul's sheet-metal-stamping plant. Williams' support for the subdivision has shocked and angered nearby landowners, who believe the homes will destroy any hopes of developing a major industrial area north of Deer Valley Airport. It also goes against the advice of Phoenix planning, airport and economic development officials.

Amplifying the angry discourse over the subdivision are Williams' close ties to the real estate agent trying to swing the deal. A Williams friend and political confidant, Phoenix real estate broker Michael Wm. Longstreth, is the man with the housing plan--a plan that, if all goes well, will fatten his wallet by at least $200,000.

Williams dismisses staff's concerns about the residential development as overwrought and biased. She claims the Thul family likes the idea of homes next door to the new sheet-metal-stamping plant.

"I've talked to the Thuls and they are delighted with it," says Williams.
Not exactly, says Tim Thul, the company's general manager. In fact, not even close.

"I think delighted is a poor choice of words," he says. "We have spent $80,000 fighting this thing."
@rule:
@body:John Thul takes a decidedly nonstandard approach to running his business--from treatment of employees to selection of a site for his new factory.

While many large companies are avoiding quality-of-life issues--opting instead for the "temporary work force"--Thul wants Arizona Precision Sheet Metal workers to have a permanent stake in the company.

"We are dead serious about having my grandchildren and the employees' children being involved with the company years down the road," he says.

He already is pushing his company into an arena in which the Valley's largest employers dare not go--on-site child care.

While Arizona Public Service Company, Intel Corporation, American Express, Motorola Inc. and Bank One Arizona all shun the notion of children at work, Thul believes providing quality child care at a reasonable cost is essential to achieving his ultimate goal--a perfect product every time.

The 56-year-old Thul has a reason to be more in tune with the needs of children than many Valley executives. He's started a second family and is the father of a 1-year-old child, with a second due any minute. But personal experience aside, Thul is convinced that amenities like on-site child care make for a happier and more productive work force.

"In our factory of the future, we have tried to address all of our employees' needs," Thul says. Arizona Precision Sheet Metal's new 150,000-square-foot assembly plant, which opens August 22, will have an extensive indoor weight room, locker rooms and outdoor basketball, volleyball and handball courts. An on-site cafeteria will provide low-fat, high-vegetable meals that employees can order to go.

"I'm really pushing workouts and proper diets," he says before challenging an associate to a 5,000-meter race.

 

Thul even abandoned less-expensive evaporative cooling in favor of a $1 million, environmentally friendly air-conditioning system to make the workplace more comfortable and, he hopes, more productive.

The new facility is a far cry from the tiny, one-man, sheet-metal-fabricating business Thul opened 28 years ago on the corner of Seventh Avenue and Highland. In the early going, Thul worked nights as a metal fabricator at a major Phoenix aerospace company and spent days making custom sheet metal products.

The company steadily grew, and in 1970, Thul mortgaged his house and threw his life savings into property at what was then Phoenix's northern frontier--25th Avenue and Bell Road.

"He couldn't get financing, and the bankers said, 'You're nuts for moving way out there,'" says Tim Thul, a former rodeo performer who returned to work in his father's company in 1981.

Despite the bankers' predictions, Arizona Precision Sheet Metal prospered during the early 1970s at its new location. But everything had changed by the middle of the decade, when the Arab oil embargo and rocketing interest rates nearly destroyed the company, forcing a 70 percent cutback in employees.

"That about killed him," Tim Thul says. "But he reorganized and got it straight."
The company has once again hit its stride, growing by 100 percent each of the last three years. The boom has been fueled by legalized gambling across the country. The company is a major producer of slot and video-game machine frames and also assembles and installs electronics in the one-armed bandits.

Arizona Precision began bursting at the seams last year at its 25th Avenue location, as annual sales topped $35 million. Noise complaints from neighbors--some living as close as 20 feet from the factory--also spurred the Thuls to seek a more suitable location.

The Thuls looked all over the Southwest and were leaning toward moving to Reno, Nevada, where their primary customer is located. But John Thul didn't want to lose many of the employees who would be unable to make the move.

The company toyed with the Glendale Airport area as a new location before settling on an industrial area north of Deer Valley Airport that City of Phoenix planning officials have long pushed as an important industrial and employment corridor.

To help spur business development in the area, the city issued its first Industrial Development Authority bonds this decade, allowing Arizona Precision to get reduced financing for $6.5 million of the $8 million needed to build the factory.

Everything was looking rosy until last fall, when word first surfaced about a subdivision.

The outlook turned even gloomier in May, when the Phoenix City Council, spurred by Mayor Williams, voted to change the general plan for the airport area. The change literally carved out an 87-acre island of residential property in the middle of thousands of industrially zoned acres.

All Continental needs to start building--and all Longstreth needs to earn his healthy real estate commission--is city council approval of a zoning site plan. The council is scheduled to vote September 21 on that plan. The specter of a residential subdivision and 2,000 residents, some of whom undoubtedly will lodge noise complaints, has thrown something of a damper on the upcoming grand opening of the most sophisticated sheet-metal-manufacturing plant in the West.

"We would have never located here if we knew this was going to happen," says John Thul. @rule:

@body:Thelda Williams is mayor of Phoenix only because the last one quit.
The 52-year-old Williams was selected mayor pro tempore by fellow councilmembers in March after Paul Johnson traded the top job in Phoenix to make a run for the Governor's Office.

If Williams' mayoral title came with an asterisk attached, it also is temporary. By law, she is a lame duck. She cannot run in this fall's special election to fill the remaining year of Johnson's term.

Williams will return to her role as a District 1 councilmember after the vote. She has, however, apparently become fond of mayoral splendor during her short time in office; she has not ruled out running for a full, four-year mayoral term in 1995. Longstreth is helping Williams wrestle with that decision, he says in written response to a series of New Times questions.

Although Longstreth confirms his role as a Williams political adviser, he says he has not been asked for money and has not contributed to Williams' campaign accounts. Continental Homes officials have not contributed to Williams' campaign fund, either.

It is clear, though, that Williams and Longstreth are used to working with one another. The two have served on a little-known city agency called the International Policy Committee since it was created in 1990 to oversee the city's international activities, which include the hosting of foreign visitors to Phoenix, and the planning of good-will trips abroad by city officials.

 

Then-mayor Johnson named Longstreth to the International Policy Committee on the strength of his international business ties, particularly with Japan. Longstreth also is a member of the city's Aviation Advisory Board and this year serves as board chairman.

Williams certainly has taken advantage of the IPC's international travel opportunities, becoming a frequent flier to Europe and Asia in search of a foreign airline that would agree to provide direct service to Phoenix. So far, none has signed up.

The travel is part of what some observers see as Williams' eagerness to wrap herself in the trappings of office--an eagerness seemingly amplified by her assumption of the mayor's post.

She has created a stir in political circles by sending out a campaign fund-raising letter on city stationery complete with the copyrighted Phoenix city logo underscored with four mighty words: OFFICE OF THE MAYOR.

Williams says there is nothing wrong with using city stationery for her fund-raising campaign, because, she says, she paid for the mailing and all copies of the letterhead.

"There is absolutely no taxpayer expense involved," Williams says.
Phoenix assistant city attorney Larry Felix begs to differ. He says the use of the city logo for political campaigns is against long-standing city council policy.

"We have in the past advised all candidates that it is copyrighted and not to use it," says Felix, who was unaware of Williams' May 31 fund-raising missive.

The stationery flap clearly is not a major scandal. But some see it as an indicator of Williams' willingness to use her mayoral powers, temporary though they may be, to her utmost advantage. This tendency and Williams' close political ties to Longstreth have Deer Valley property owners screaming foul. Meanwhile, fellow councilmembers and city staffers quietly shake their heads in wonder at Williams' vehement support for the strangely placed Continental Homes subdivision.

@rule:
@body:And wonder they might, because Williams' support for Continental Homes appears to be a relatively recent phenomenon. At least, that's what some of Williams' angry constituents claim. Just a year ago, they thought she was on their side.

Industrial landowners in the undeveloped desert north of Deer Valley Airport say Williams has reneged on promises to encourage development of an industrial area there.

They cite her strong support in 1992 of a city planning initiative that designates county land to the north of the airport and east of 19th Avenue as reserved for commercial and industrial development. The city plans to annex the land in the near future.

They can't understand how Williams can now shift gears and support Longstreth's proposed housing development on land just west of 19th Avenue--land adjacent to the new Arizona Precision Sheet Metal plant.

Williams denies the claim she has flip-flopped, contending she has always held the position that it is important for people to live near their work. But land-use academics and planners in other cities say sensible development does not necessarily involve placing residences in the middle of industrial parks. "[Living near work]'s a good concept, but there are also rules for separating residential and industrial," says Frederick Steiner, an Arizona State University planning department professor.

The bottom-line question, he says, is this: "Would you live there?"
People who own property near the Continental site answer that question with a resounding no. The area is dotted with junkyards and crisscrossed by high-tension power lines. It lies a mile north of the Deer Valley Airport, and abuts a sheet-metal-stamping plant.

"The whole thing seems kind of ridiculous to me," Gordon Hardy says about the idea to build houses.

Hardy purchased 35 acres north of the proposed subdivision 15 years ago, and until recently was excited about the prospect for industrial development finally coming to the area. Williams' support for the subdivision leaves Hardy stumped.

"Something is going on here more than logic, because logic just doesn't do this," Hardy says.

Williams' support for the subdivision looms as a financial disaster for the owners of industrially zoned property closest to the proposed residential development.

Kevin Walden was delighted when he first learned Arizona Precision Sheet Metal was building its new plant on 30 acres next to Walden's five-acre parcel. He soon had potential industrial users contacting him wanting to buy his land. Deals were ready to be struck.

The optimism turned to shock when Williams began strongly supporting the Continental Homes subdivision that would abut Walden's land.

"This is the stupidest goddamned thing I have ever heard of," Walden says. "There has to be political favors, payola or some fucked-up thing for this to be going on."
Construction of the Continental Homes subdivision would be a financial disaster for Walden. City regulations would require any future industrial user to leave a buffer area between the new plant and the subdivision. Walden claims this buffer would reduce the usable area of his land by half.

 

Patrick Evans, who owns land to the east of the proposed subdivision, was so angry he fired off letters to the Phoenix city attorney asking for an investigation into the relationship between Mayor Williams and Longstreth.

"Since the project has no merits, myself and others have become concerned about the reasons for Ms. Williams' strenuous support of this ill-conceived project," Evans wrote to city attorney Michael D. House.

House declined to begin an investigation, saying Evans provided no indication that Williams has any financial interest in the subdivision project.

There is every indication, however, that Williams is willing to climb any mountain to get the homes built.

@rule:
@body:The Continental Homes subdivision proposal has been unusual from the start. The company is taking a very low-profile approach to the project, refusing to grant interviews and referring all questions to Longstreth.

(Longstreth also declined to be interviewed, but did agree to answer written questions concerning the project and his relationship with the mayor.)

The state's largest homebuilder--whose profits soared for the fiscal year ending May 31 to $13 million, up from $3.8 million the year before--has given mixed signals on going forward with the project from the beginning.

Last October, the company's regular zoning attorney, Michael Curley, wrote the city planning staff saying Continental wasn't interested in pursuing the subdivision plan because it conflicted with surrounding land use and the general plan designation as industrial.

"Please accept this letter as our formal withdrawal for this application," Curley's October 1993 letter concludes.

Two weeks later, Continental Homes reversed itself, telling the planning department to reinstate the company's application to change the general plan. The change would take 87 acres from industrial to residential use. The homebuilder also added an additional tidbit.

"Michael Wm. Longstreth will be coordinating this application with the planning department," Curtis Nelson, Continental's vice president of land acquisition, wrote.

Longstreth's direct role in the project is unusual; real estate brokers typically don't assist developers in obtaining zoning changes. This is usually the realm of zoning attorneys. Longstreth will make his money only if the land is rezoned and Continental, or some other developer, purchases the property.

Opposition to the residential proposal surfaced immediately. The city's economic development departments filed objections to Longstreth's plan in January, saying the housing project would be harmful to continued development of the industrial core that was beginning to emerge.

City planners also issued recommendations calling for denial of the Continental subdivision, saying the residential area would be an isolated neighborhood, and the site is far more suitable for industrial uses. The Deer Valley Village Planning Committee, a city-council-appointed group that reviews development plans, also voted against the project in November and again in January. With opposition mounting across the board, then-city councilmember Williams did what most good politicians do when friends are in trouble. She stalled. Williams called for a special 60-day study on development of the I-17 corridor. The study would include land between Beardsley Road and Carefree Highway, including the Continental Homes site.

The planning department completed the study on March 30--the day after Williams became mayor.

@rule:
@body:Williams' call for a study didn't move city planners in her direction.
The report concluded that the Continental Homes subdivision fell into an area east of Interstate 17 that includes "the last locations inside the City of Phoenix with the characteristics that can attract high, value-added, technology-based employment."

In other words, building houses there would be a bad idea.
Williams dismissed the I-17 Corridor Study as junk.
"I think it was done by a very biased staff that didn't want it [the Continental project]," she says.

Longstreth, meanwhile, kept up the pressure, taking his request to change the general plan to the city's planning commission. The five-member commission, following recommendations from city staff, rejected Longstreth's request by a 4-1 vote on April 13.

But that wasn't the end of the line. The city council can override planning commission decisions, and Longstreth knew he had friendly support from the mayor. She didn't let him down.

Williams mounted an aggressive campaign for Longstreth's project during the May 4 council meeting. She rejected the city's planning and economic development recommendations, ignored the Deer Valley Village Planning Committee's repeated rejection of the plan and turned a deaf ear to Arizona Precision Sheet Metal's complaints.

Outside the city agencies responsible for planning, the Continental Homes project had gained some support. Phoenix Newspapers, Inc., which publishes the Arizona Republic and Phoenix Gazette, has a $135 million printing plant less than a mile from the proposed subdivision and receives $500,000 a year in ad revenue from Continental Homes, had written letters in favor of the development.

 

Other scattered support for the subdivision was based on an odd premise: An isolated residential neighborhood, located two miles from the nearest subdivision, might somehow force the numerous automotive junkyards in the area to move. (City planners call that result unlikely, at best.)

But the city council's district system has created a Balkanization of political power. In most cases, councilmembers are reluctant to meddle in projects contained entirely in the district of another councilmember. The reluctance is even greater when that councilmember is also mayor.

Despite the widespread opposition to Longstreth's plan, meeting minutes show Williams saying she "did not think it was that bad." Then she recommended approval for the general plan amendment. The recommendation passed unanimously.

@rule:
@body:Mayor Williams walked to the front of a room in the Deer Valley Community Center, picked up a three-foot-long pointer and directed everyone's attention to a map.

Williams had some explaining to do for her constituents, many of whom oppose the Continental Homes subdivision. So she scheduled a July 21 appearance before the Deer Valley Village Planning Committee. For the next 45 minutes, Williams rambled in an often-inaudible voice, discussing everything from the savings-and-loan debacle to the destruction of mobile-home units by motorcycle gangs to the positive attributes of Chandler, with its nice electronic factories and red-tile roofs.

The political soft-shoe continued until the committee chairwoman--noting the lateness of the hour--politely cut off the incoherent speech. The mayor headed out the door to a neighborhood block-watch meeting.

Nearly everyone in the room was left wondering: When would Williams address the Continental Homes issue?

"To be honest, I didn't learn much," David F. Lewis, a Deer Valley realtor and a political supporter of Williams, wrote in a July 22 letter to the mayor. "And from the reaction of the committee and the audience, I doubt you conveyed any sense of a mission as to how this area should develop."
Subsequent interviews with Williams shed little light on her position. She says she's always been for residential development in the industrial area. At the same time, she professes that she wants to protect Deer Valley Airport from the type of residential encroachment that has caused serious problems at other airports.

Williams' claim that she is committed to protecting the airport would seem to be undercut by her lack of communication with Phoenix aviation officials over the proposed Continental development. Not only did Williams fail to bring the project to the attention of airport officials, but Longstreth, who is chairman of the Aviation Advisory Board, never discussed the Continental Homes subdivision plan with aviation administrators, either.

Aviation officials didn't begin to voice their displeasure with the project until after the city council, led by Mayor Williams, rejected the planning commission's recommendation and approved Longstreth's general plan amendment.

N.A. Bertholf Jr., aviation director, finally got involved in the skirmish when he sent a May 26 letter to city planning director David Richert, objecting to the housing plan and telling him the proposed subdivision may be subjected to "overflights numbering hundreds per day."

Williams says she didn't learn of Bertholf's letter until late July.
That's not the only thing Williams was in the dark about. The mayor says she just recently learned that Arizona Precision had long been subjected to numerous noise complaints at its present site, even though city planning department files document complaints and subsequent noise studies.

"There were no complaints in our [council] files," she explains.
The glaring contradictions in--and the lack of basic homework behind--her arguments have left Williams with only one real defense of her vigorous support for what appears to be an indefensible project: Trust me.

"I'm not getting any personal gain from this whatsoever," she says.
@rule:
@body:With moving day a little more than a week away, the Thuls are trying to put their best face forward. They have had discussions with Mayor Williams and presented her with a wish list. At the top of the list is a request that city planners require Continental to construct a 14-foot sound barrier along Arizona Precision Sheet Metal's property line.

While Williams says she agrees with the Thuls' mitigation requests, she also made it clear to the Thuls she hadn't discussed any mitigation measures with Longstreth or Continental Homes.

And there are no assurances on what type of mitigation, if any, will be required in the residential development, until and unless the council approves a zoning plan next month. Even if the city's planning department proposes sound walls and setbacks, there is no guarantee the city council will agree.

 

Continental, meanwhile, remains stone silent on the issue. Longstreth has provided only vague assurances that an acceptable residential project will be built without negatively impacting industrial property owners.

"We have promised a quality development which provides elements to ensure a desirable neighborhood for the homeowners while at the same time offering sufficient buffering to the adjacent light industrial user who is building next door," he wrote in a letter to New Times.

These words do little to reduce Tim Thul's anger. It is clear to him that the city council has failed to address--or even really consider--the fundamental question that needs to be asked about the proposed development.

What, he wonders, will the quality of life be for those who purchase homes in the subdivision?

The Thuls' new sheet-metal-stamping plant will receive trucks around the clock, have three shift changes a day and operate ear-shattering equipment.

"I wouldn't want to move next to me," Tim Thul says during a tour of the present 25th Avenue plant. "There is just no reason to have my family growing up next to this noise.


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