Tempe Rising: The Landlocked College Town Explodes with New Development -- as Planned

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The success of modern Tempe dates to the early 1970s, when it lost what should have been its rightful sprawl land by getting penned in by municipal neighbors. Viewed as tragic by some at the time, it was actually a blessing in disguise, forcing Tempe leaders to focus inward. A new development pattern was kick-started -- and it continues to pay dividends.

The city's relatively long history (it was founded in 1871, more than a decade before Mesa and Scottsdale), central location, and prominence as home to ASU has given it a strong advantage over the years.

But regional competition always has been intense in growing Arizona. As Tempe and other Valley cities experienced growth spurts in the 1970s and '80s, they fought over political power, annexations, and development dollars.

If you look at a map, the short-shrifting becomes obvious: Tempe could have been a smaller mirror image of Scottsdale, sprawling southwest into what's now Ahwatukee, which became part of Phoenix.

At the least, the map shows, Tempe should have acquired land directly south of the city's current border near Ray Road, all the way to the Gila River Indian Community border of Pecos Road. Instead, Chandler juts west, cutting off Tempe at the knees.

The Chandler annexation was sealed one night in 1974 when Chandler officials and property owners in the Ray-to-Pecos area came together in what may have been the proverbial smoke-filled room and decided to swipe the land from Tempe.

That year, former Arizona Congressman Harry Mitchell was starting his second term as Tempe mayor.

"We had what we called a 'gentlemen's agreement' at the time," Mitchell recalls.

The 1968 pact, reaffirmed in 1971, required the joint planning of some land, and each city's officials were supposed to confer with one another when an annexing issue that could affect them came up.

But "late at night," Mitchell says, Chandler leaders -- with the approval of more than 50 percent of property owners -- drew up paperwork that legally annexed the strip all the way to Interstate 10.

Tempe begged to keep land it had planned for Corona Del Sol High School, built in 1977, which is the reason for the jagged line of Tempe's southern border.

"[Chandler officials] gobbled up more land than they could digest at the time," Mitchell says. "They had trouble trying to service it."

Yet Mitchell admits property owners had their reasons for wanting to be in Chandler as opposed to Tempe. Because of its rapid growth, Tempe had enacted restrictions for land use that other Valley cities didn't have, and this made development more expensive.

"Some [large landowners] were so pissed at the time, as we went farther south, that they moved to Chandler," Mitchell says. So when given the choice to have their land fall under the control of Tempe or Chandler, he says, the majority chose Chandler.

Soon after, Tempe lost dibs to the Ahwatukee Foothills area in another less-than-gentlemanly deal.

Randall Presley and his company, Presley Development, had wanted to build homes on the rugged terrain near the western end of South Mountain. But installing water and sewer services would require a complex system of pumps to move water over land. Presley asked Tempe officials to help. Tempe agreed -- but only on the condition that he let Tempe annex his land, Mitchell says.

Presley declined. He offered Chandler the same deal and was turned down there, too. But Presley was buddies with Phoenix Mayor John Driggs. On a handshake, with no input from other city officials or the public, Driggs told Presley in 1971 that Phoenix would install water and sewer lines and other utility services for Ahwatukee.

After learning that Presley had spoken to Tempe and Chandler officials about utilities for his land a few years later, Phoenix moved quickly to provide services for Presley, without any annexation agreement. In an interview, Driggs tells New Times that the deal was based on mutual trust. And it paid off for Phoenix, which later annexed all of Ahwatukee. The loss of these square miles spurred Tempe leaders toward grand ideas like Town Lake and the so-called "Manhattanization" of Tempe.

In 1987, Maricopa County voters overwhelmingly rejected the Rio Salado Plan, which would have let some water flow through the Salt River all the way through the Valley. After the vote, Mitchell began pushing for Tempe to do its own, smaller version.

As New Times reported in 1999, the city downplayed the lake's cost. Archived Tempe fact sheets on the Internet show it cost about $45 million. The new fact sheets are more transparent, breaking down expenses and revenues and detailing how Tempe alone spent about $268 million on the project, with tens of millions more coming from state and federal coffers.

The city expects to break even on its initial $45 million investment by 2023. Operations and maintenance costs on the lake, about $3 million a year, are increasingly paid by private development. Tempe always has wanted private developers to pay for slightly more than half the figure -- they'll be paying more than 24 percent of it (up from up from 18 percent now) when Marina Heights is finished in 2016 or 2017. Not quite there, but getting closer.

As of 2014, the lake -- with numerous high-rise commercial and residential projects on its concrete shores and others projected to come in a few years -- has been worth its high price tag.

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.