Parking Mirage

It took only a few minutes for the Phoenix City Council to deliver what some would consider a $40 million gift to the growing empire of Phoenix sports mogul Jerry Colangelo.

It was easy.
There was no public opposition.
No impassioned speeches by councilmembers. No outrage over an apparent giveaway of public funds concocted by city staffers.

Councilman Sal DiCiccio did raise some timid opposition to the proposal, but it was quickly overcome by Mayor Skip Rimsza. He silenced DiCiccio with little more than a stare.

The official record for April 17 will show that agenda item 29.2--a legal settlement that would relocate Greyhound Bus Lines' downtown bus station to city-owned property near Sky Harbor International Airport--was approved by a 7-2 vote.

What the official records probably won't say is that the vote constituted a crucial step toward fulfilling a tacit agreement for the City of Phoenix to provide a major parking facility adjacent to a $332 million, retractable-dome baseball stadium being built for Colangelo's Arizona Diamondbacks.

In all probability, the official records will also fail to note that the settlement came after Greyhound accused the city of violating Proposition 200--which prohibits the city from spending more than $3 million on a sports-related facility without a public vote--by planning the $40 million parking garage.

City staffers claim the 3,000-space parking garage, which would be located directly across the street from the Diamondbacks' Bank One Ballpark, is necessary to meet the parking demand created by those visiting the new science museum and other downtown cultural offerings.

"We have planned for a long time, maybe going back seven or eight years before the baseball stadium was even conceived of, to put parking south of the science museum because we are going to need parking for the science museum," Phoenix City Manager Frank Fairbanks says.

But in documents filed in a condemnation case in Maricopa County Superior Court, Greyhound's lawyers say otherwise:

"No rational person can believe that the city is building a 3,000-space 'event parking' garage, which is designed to unload in 30 minutes after a mass release event, and which is directly across the street from a grossly under parked 50,000-seat baseball stadium, for any other reason tha(n) to service the parking needs generated by the baseball stadium."

And other court documents back Greyhound's claims, showing that the city engaged in private discussions with Colangelo about the parking garage and manipulated parking studies that claim the $40 million structure would be needed--even if a baseball stadium were not built right across the street.

Phoenix City Manager Frank Fairbanks is a hands-on administrator and longtime supporter of major league baseball in downtown Phoenix.

Fairbanks formally jumped on the baseball bandwagon in November 1993, telling top Maricopa County officials that "the City staff is fully supportive of a baseball stadium."

But Fairbanks threw a caveat into that support, telling former Maricopa County manager Roy Pederson that Proposition 200 places "limits on our ability to spend for such a project." Despite the limits, Fairbanks made it clear to Pederson that the city was "willing to undertake other project activities at the request of the county."

The county and the Diamondbacks wanted the city to provide parking close to the stadium. The city council responded enthusiastically during a secret executive session in January 1994 and authorized its staff to prepare a "redevelopment plan" that would call for the city to construct parking and retail space near the stadium.

This redevelopment project was seen as a way the city could invest up to $50 million to support the baseball project without violating Proposition 200.

In a recent interview, Fairbanks said the city and baseball officials held talks about building a parking and retail center south of the stadium site. Those talks faltered, however, after landowners there balked at the proposal, and Proposition 200 proponents began publicly criticizing the plan.

During the course of the discussions on redevelopment, city officials met with Colangelo and told him the city planned to build a parking garage--for the science museum--directly across the street from the stadium.

"We did convey to them that the city had had plans for many years to develop a parking garage in the general area of the Greyhound Bus Terminal," Brian Kearney, the city's program manager for the garage project, said in a deposition taken by Greyhound Bus Lines lawyers last month.

The baseball team was enthusiastic about the city's parking plans.
"I think they have made statements to the effect they anticipate being able to use it," Kearney added.

The discussions between the city and Colangelo occurred while Maricopa County supervisors were debating whether to impose a quarter-cent sales tax to raise funds to pay for the stadium, which at the time was estimated to cost $315 million.

By February 1994, that estimated stadium cost had dropped to $278 million; the amount to be contributed by taxpayers was also limited--$238 million would come from the sales tax and another $15 million contribution would flow from the county's general fund. The drop in stadium costs, sources close to the negotiations say, came largely by reducing the amount of parking space to be built as part of the stadium.

When approved by county supervisors in February 1994, the new stadium--projected to increase downtown parking demand by 15,000 spaces on game days--included a single, 1,500-space garage.

Additional parking--as many as 4,500 more spaces--was needed for the stadium, city records show.

The next month, city staffers met with the Diamondbacks and county officials to discuss parking. Notes taken by a city official at a March 28, 1994, meeting indicate that county and Diamondback officials said they "expect 1,500 [parking spaces]" from the city.

The notes also show that the city believed it could pay for the parking structure and any related retail development with Phoenix Civic Plaza's bonding authority.

For years the city had estimated that a parking garage for the new science museum would hold about 1,000 cars. But the 1,000-space estimate was really nothing more than a wild guess. City Manager Fairbanks says the city never knew how big the science center parking garage needed to be.

"I don't think anybody had ever established a size," Fairbanks says.
That's why, Fairbanks said, the city hired Kaku Associates of Santa Monica, California, in 1994 to conduct a study that would determine the size for the science center parking garage. The study was to exclude any parking demand generated by baseball.

Kaku concluded in May 1995 that the garage needed to have 3,200 to 3,500 spaces.

"That's when we set the number," Fairbanks says.
But documents obtained by Greyhound Bus Lines during condemnation litigation reveal that the size of the parking garage was determined only after city officials changed the study's parameters.

In fact, Kaku Associates had concluded in several early drafts of the study that a parking garage was unneeded, if the impact of baseball were ignored.

"If the baseball stadium is not built, it would be difficult to justify a parking garage of any size within the study area in general," Kaku Associates wrote in a February 1994 report.

When asked about the early drafts of the study, Fairbanks seemed to transform from a city manager who had all the parking answers to one who knew almost nothing.

"Oh, I have never seen that," Fairbanks said.

The city responded to Kaku's conclusion that no garage was needed to meet the city's parking demands with a flurry of letters and memos to the consultant, court records show.

The city has refused to comply with New Times' public-records request to review all written communications between city officials and Kaku.

Court records, however, show that the city changed the parameters of Kaku's study after receiving the early drafts. The changes came in two areas:

First, the city reduced by nearly half the downtown area that Kaku could consider as potential parking space for the new science museum and cultural events at Civic Plaza. The city justified this narrowing of focus by claiming museum patrons would be unwilling to walk more than two blocks from a parking garage to the museum. The reduction in the study area forced Kaku to report as though a 1,500-space, city-owned parking garage on Jefferson Street did not exist--because that garage was located slightly more than two blocks from the science museum.

Second, the city included optimistic numbers on increased parking demand in its new study parameters. Those numbers projected a doubling in the number of people attending events at the Civic Plaza over the next decade. The city also required Kaku to include in its calculations of parking demand a proposed downtown aquarium. The aquarium never got off the ground, but Kaku had to take into account its projected increase in daily parking demand.

These new city requirements reduced the supply of parking in the downtown area, while increasing parking demand. Under those new parameters, the consultants concluded that the city was in need of a huge parking garage--regardless of whether the baseball stadium was built.

City economic development director David Krietor relayed the good news to deputy city manager Ray Bladine in a June 6, 1995, memo:

"The conclusions of the consultant's analysis are that upon completion of the museums, there will be a parking deficit of 1,300 to 1,600 spaces."

The parking deficit increases to 3,000 to 3,500 ten years down the road, Krietor added. Krietor estimated the cost of the garage would be $25 million to $30 million.

It is perhaps unsurprising that the source for paying for the project would be the Civic Center Fund, the same borrowing mechanism identified during a March 1994 meeting between city and baseball officials.

The stage was set. To get on with its parking garage, all the city had to do was to force Greyhound Bus Lines to move.

The city council ordered city staff to begin condemnation proceedings in July 1995. The city didn't expect too much of a fight. After all, Greyhound Bus Lines was leasing the bus terminal from Dial Corporation, which owned the land beneath it. Dial Corporation has invested at least $10 million in the Diamondbacks; its chairman, John Teets, is a general partner of the team.

But Greyhound Bus Lines wasn't going to pack up quietly.

The city filed a condemnation suit against Greyhound last October. The bus line countered, saying it wanted to stay downtown and suggesting that the city consider building a combination bus terminal and parking structure on the current Greyhound site.

That proposal went nowhere.
The bus line then asked the city to approve the relocation of its terminal to another downtown site--a site where the city plans to move its city-bus transit terminal. Once again, the city rejected the proposal.

The rejection came on the heels of objections by representatives of major downtown business interests.

The Downtown Phoenix Partnership, via Colangelo confidante Margaret Mullen, and Arizona Public Service Company, through president Mark DeMichele, complained bitterly about having the Greyhound terminal remain downtown.

"The downtown business community has no desire to keep Greyhound downtown," Mullen wrote the city on December 18.

DeMichele followed suit the next day with a letter to the city concluding: "If we are to continue the progress we have made in downtown development and build a truly great city, then this facility needs to locate elsewhere."

The city responded quickly to Mullen's and DeMichele's letters. In January, the city staff requested a change in downtown zoning ordinances. The change essentially banned Greyhound from relocating anywhere in the downtown area. The city council approved the zoning change in March.

Greyhound responded forcefully, launching a powerful counterattack in the condemnation case. The company began deposing top city staffers who were involved in negotiations between the city and the Diamondbacks.

Last month, Greyhound alleged in the suit that the city's efforts to condemn its bus-station site and build a parking garage there violated the Proposition 200 ban on big-ticket-sports spending. The allegations were made in direct and colorful language not usually found in court pleadings:

"The city's arrogance in proceeding to do whatever it damn well pleases by pretending that the garage is for the Civic Plaza and not the baseball stadium ought to offend the sensibilities of any honest thinking individual," the company argued.

Greyhound alleged that the parking garage violated Proposition 200 coming and going. If the garage was primarily to benefit the baseball stadium, it violated the proposition's ban on sports-related spending. But the proposition also bans big-ticket spending on the convention center, and Greyhound claimed the garage violated that prohibition, because the garage was to be funded through the Civic Center Fund.

"You can't use taxpayer money in magnitude of $40 million to build a parking garage for the baseball stadium or convention center under Proposition 200," Greyhound attorney Martin Aronson says.

Backed into a corner, the city put forward a novel idea: It suggested that the Phoenix Civic Plaza and Convention Center really wasn't a convention center. The city claimed that only 5.8 percent of the total attendance for Phoenix Civic Plaza events between 1988 and 1995 was related to conventions; ergo, it could not be considered a convention center.

Greyhound Bus Lines and the city continued exchanging nasty legal barbs in court as the trial date of April 23 approached. A breakthrough was reached over the weekend of April 13 when city officials flew to Dallas to meet with Greyhound officers.

The city offered Greyhound $300,000 in cash, one year free rent at a city-owned site at 22nd Street and Buckeye Road and tax incentives if the company would drop the lawsuit and agree to move out of its downtown terminal by October 31.

The council approved the settlement offer on April 17. Greyhound is expected to accept the deal.

If the Greyhound bus station relocation appears to be settled, opposition to the parking garage is slowly mobilizing.

Keith Morrow, a community activist who played an instrumental role in the development and passage of Proposition 200, says his group is reviewing the parking-garage plan and Greyhound Bus Lines' allegation that it violates Proposition 200.

"We have money set aside to challenge this type of thing," Morrow says.
It is too early to say whether the group--the Alliance of Northeast Phoenix Residents Associations--will move forward. Morrow says the case must first be reviewed by the group's attorney, Phoenix lawyer Gil Shaw.

Shaw was also actively involved in the development of Proposition 200 and says its drafters were concerned about the city attempting to use "sneaky" methods to fund construction of major projects that would benefit the baseball stadium or the convention center without voter approval.

Shaw is convinced the parking garage is the city's tithe to Colangelo's sports altar.

"There was a decision to go ahead and build the stadium downtown because the city was committed to building a parking garage at that site," Shaw says. "That's how they fudge on Proposition 200."

Proposition 200 was passed by voters in October 1989 in the midst of concerns that the city was going to use public funds toward the construction of a massive domed stadium. Voters also were worried about the expenditure of city funds to finance construction of an amphitheatre and new convention facilities.

There are no penalties specified by the proposition if the city steps outside its spending restrictions. However, any taxpayer can file a special claim in Maricopa County Superior Court challenging any city expenditure believed to violate the proposition.

If the court upholds the claim, the city cannot spend the money.
Phoenix city attorney Philip Haggerty says he is confident the city can withstand any legal challenge to the parking garage based on Proposition 200.

A taxpayer claim can't be filed against the city until it approves the expenditure of funds for actual construction of the parking garage, Haggerty says.

The council is expected to approve construction funding in the next few months.


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