Venetian Blind

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If not, she says, the project is finished.

"If they can't convince us it's in the best interests of Scottsdale, it won't happen, because in that case it shouldn't happen."

Make no mistake -- Campana is the Canals of Scottsdale's most prominent champion (she calls it "a museum-themed district"). But that doesn't mean razing a venerable section of her city's downtown rests easy on her mind.

"It grieves me to do this," she says. "But it's a surgical decision. It's not a catastrophe.

"Keeping downtown Scottsdale strong has been a top priority in this city since Herb Drinkwater was mayor and I was on the city council. [The Canals] is the best way to do that.

"We're the only city in the Valley with a canal running near our downtown. It's serendipity, and we're going to capitalize on it."

Campana describes the Canals as "a transition piece" for the city.

"Along with the unique [feature] of the canal in our downtown, Scottsdale also [has] the unique feature of the Fashion Square mall, which is really a suburban mall in the downtown of a city.

"Right now, the canal is a barrier between this hugely successful mall and the rest of downtown Scottsdale. The idea is to let culture and commerce flow freely across the water."

Besides, Campana says, let's be realistic: "We'd lose the Fifth Avenue Area, yes, but the Fifth Avenue Area is clearly in decline. They've led a subsidized existence there for quite some time."

The buildings in the Fifth Avenue Area are old. Some might be called dilapidated. And they were not built to make use of the canal's scenery. All the structures along the canal on Stetson Drive have their backs to the water.

Many storefronts in the area are as empty as the ones in the Scottsdale Galleria, even though leases in the Fifth Avenue Area are much cheaper than in downtown Scottsdale's nearby, better-known retail center, Old Town Scottsdale.

But the leases are also potentially much shorter. After all, the district has a sword poised over its head.

There are probably several reasons why the Fifth Avenue Area, despite a few, scattered success stories, is failing: One is Scottsdale Fashion Square, directly across the canal. Another is a lot of the money in Scottsdale has moved north. Also, longtime shopkeepers and property owners in the area blame the construction of the Galleria, which disrupted access to an already obscure district.

And they blame the City of Scottsdale.

"We were tricked," says Judy Peters, who owns buildings on Sixth Avenue, which houses an herb store, a make your own pottery business and Santa's Back Door, a seasonal holiday shop.

In 1996, the City of Scottsdale approached Peters and other Fifth Avenue District property and business owners with a deal: The city asked the owners to support the creation of an enhanced-services district -- a special taxation area -- which assesses each owner a small amount and puts the money into a collective pool of about $750,000, which would be used to improve and market the district.

There was one catch: To create the special tax district, the city would have to declare the area a slum, which would give the city greater powers of condemnation.

"If we'd known what they had planned, no one would have given them more power," Peters says. "We never were told anything about their true intentions. All we heard about was how they were going to improve the banks of the canal. Well, they have a big idea of a canal bank."

City of Scottsdale Director of Redevelopment Gary Roe has said repeatedly that the owners were "explicitly informed of the possible consequences." Also, he has said, the city planned to declare the area a slum whether the owners agreed to it or not.

John Mollard, a retired Southern California real-estate agent who owns an antique shop on Sixth Avenue, has a poster hanging in his window. It's a fictitious newspaper's front page -- the September 7, 2000, issue of the "Scottsdale Gazette."

"Scottsdale Bankrupt" screams the headline.

The story begins, "Due to the generous incentives given the developers of the Canals of Scottsdale, the City of Scottsdale has declared bankruptcy," then goes on to describe empty gondola rides, the stench of dead fish, and Mayor Campana fleeing town, Baby Doc-style.

A sign on the same pane of glass blares "Rob From the Poor and Give to the Rich -- The City of Scottsdale Way!"

Mollard is a long way from poor. Poor is living in a shack on a hillside in Mexico. Mollard lives in a lavish apartment above his shop, surrounded by God knows how many antiques, paintings and Japanese artifacts.

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David Holthouse
Contact: David Holthouse