Venetian Blind

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Mayor Campana heralded those numbers as "proof of the Galleria's tremendous potential as a cultural facility."

After the Icons show, Campana and other Canals of Scottsdale supporters began to drop the Smithsonian's name at every opportunity, boasting the project would "bring the Smithsonian to Scottsdale."

When the City of Scottsdale submitted its application for theme-park funding to the state Department of Commerce, it claimed the Canals theme park would include "a Smithsonian museum."

That misrepresented the truth.

Smithsonian officials had tentatively agreed to loan a future Scottsdale museum items from its collection -- not to open a branch of the Smithsonian in Scottsdale.

There were no plans to do so then, and there are none now.

Word of the name-dropping reached Washington, D.C. In March, the Smithsonian's director of affiliations asked Campana and other city officials to please stop using the Smithsonian's name as a political lock pick.

Despite the reprimand, Great For Scottsdale, Great For You! materials continued to wrap the Smithsonian and the Canals of Scottsdale into the same package.

This prompted an open letter from the Smithsonian dated July 12, which accused unnamed parties of implying the Smithsonian endorsed the Canals of Scottsdale, stated this was not the case, and announced the Smithsonian was taking its unique, prestigious, one-of-a-kind toys and going home.

Although the source of the world-class collection that would jam the Museum of Progress remains a mystery, Canals supporters continue to hammer on the idea of turning the Galleria into a museum.

A transformed Galleria would comprise less than 20 percent of the total Canals of Scottsdale project, but it's the central image of the Great For Scottsdale, Great For You! campaign.

Every newspaper ad and glossy mailer portrays the Canals project as the shining knight of progress, come at last to slay the Pink Dragon, a menace to the image of an image-conscious city.

"A lot of people think this vote is only about finally doing something with the Galleria," says Espinosa. "They don't understand the full scope of what will happen to downtown."

But what to do with the Galleria, if not the Museum of Progress? Some have suggested a hotel and conference center, others a new city hall. One popular idea is to make it a casino.

Espinosa says the city should just buy it and blow it up.

"Then make a nice park," she says.

Article nine, section seven of the Arizona Constitution dictates neither the state nor any subdivision of the state "shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual or corporation. . . ." (Emphasis added.)

Last November 3, Excel Legacy Corporation CEO Gary Sabin penned a letter to Excel's shareholders, in which he outlined their investment strategy:

"Our philosophy is to pursue projects that have the potential to generate above-average profits because of their unique locations, concepts, and entry barriers," Sabin wrote.

"We prefer projects with substantial government subsidies, and incentives to lower development risk."

Excel's investment portfolio consists mostly of Wal-Marts and AMC movie theaters. The company also owns the Desert Fashion Plaza shopping center in Palm Springs, California, and recently purchased a ski-in retail and condominium development at the base of the mountain in Telluride, Colorado.

Recently, Excel has concentrated its investment efforts on Scottsdale. In addition to buying up most of the property in the Canals zone, Excel bought the mortgage on the Los Arcos mall.

Furthermore, as this article went to press, Excel was negotiating with another California-based company, Starwood, to take over the financing of the Scottsdale Waterfront -- a retail and condominium development now underway on the vacant, north bank of the Arizona Canal. The Waterfront is unrelated to the Canals of Scottsdale Project.

Campana says she hopes the deal goes through.

"The city would like to see a unified redevelopment vision," she says. "We'd like to see a project where people park once, then explore a retail, culture and recreation area on both sides of the canals."

Whether it complements the Waterfront project or not, The Canals of Scottsdale would easily be the crown jewel in Excel's collection. The firm has no experience with so huge an undertaking.

Neither has Unger -- although he has a stellar record as a developer, with his highly vaunted renovations of the Hermosa Inn and the Royal Palms hotel.

"The extra care taken in those projects, the Royal Palms and the Hermosa Inn, that's an indication of how this project will be handled," says Unger. "It's bigger, but it's going to be just as good. Or better."

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David Holthouse
Contact: David Holthouse