Phoenix in the nineties
Posted inDowntown & central Phoenix Phoenix Phoenix 101: History

Phoenix in the nineties

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The new decade came upon a Phoenix beset with crisis. Charlie Keating, the most lionized Arizona businessman of the previous dozen years, was facing federal fraud and racketeering charges. His palatial Phoenician Resort was seized by a platoon of U.S. Marshals, lawyers, regulators, and locksmiths in November 1989. American Continental Corp., flagship of Keating's complex web of businesses, was forced into Chapter 11 bankruptcy reorganization. Among the casualties was his ambitious Estrella Ranch project south of then-tiny Goodyear.

Behind much of the trouble was the savings and loan scandal and collapse, a financial crisis that cost taxpayers about $132 billion. It also took down some of the Sun Belt's biggest institutions, including Phoenix's venerable Western Savings, controlled by the Driggs family, and Merabank, a subsidiary of Pinnacle West Capital Corp. meant to make big bucks for the holding company of Arizona Public Service. It would take the federal Resolution Trust Corp. years to sort out and dispose of all the properties and hustles. The worst of the S&L wrongdoing was the Keating Five scandal. Its U.S. Senator members, who leaned on regulators on behalf of Keating, included Arizona's Dennis DeConcini and John McCain (Disclosure: John Dougherty and I were the first to break this story at the Dayton Daily News).

The local trouble had been predicted in a December 1988, Barron's article about Phoenix's overheated real-estate market, fueled by S&L money. The headline: "Phoenix Descending: Is Boomtown USA Going Bust?" The boosters had been outraged. Barron's had been right. In an ominous foreshadowing of the future, the city hit a record 122 degrees on June 26, 1990.

For individuals, the worst was yet to come. Unemployment in Arizona rose from 5.3 percent in May 1990 to a peak of 7.8 percent in March 1992. This seems modest compared with the Great Recession (11.2 percent for the state); it was painful enough. State and city leaders committed to establishing a more diverse economy, weaning Arizona off its dependency on population growth and real estate. Economic development organizations were set up across the state for this purpose, including the Greater Phoenix Economic Council, led by the brilliant Ioanna Morfessis. It established goals to build strategic clusters around high-technology sectors with high-paying jobs.

Tragically, the effort failed. The 1990s, when the U.S. economy enjoyed its longest, strongest, most innovative economic expansion in history, saw Phoenix and Arizona double down on "growth." The state's population grew by a staggering 40 percent, 45 percent for metropolitan Phoenix. The cluster strategy lacked sustained focus. Yet none of this was obvious or inevitable as the decade began. 

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Posted inPhoenix

Apparently the road to perdition won’t be widened

I shed no tears if the TIME initiative doesn’t make the November ballot in Arizona. This misbegotten transportation measure, backed by Gov. Janet Napolitano and the "business leaders" somehow couldn’t competently amass enough legitimate signatures on petitions to make it through the secretary of state’s office.

The measure promised $42.6 billion in transportation "improvements" over the next 30 years, paid for by a one-cent hike in the sales tax. It’s difficult to find specifics; I could find no Web site by the supposedly "powerful" coalition backing TIME (Transportation & Infrastructure Moving AZ’s Economy). In newspaper articles, the measure promised rail service between Phoenix and Tucson, but apparently only 18 percent of the monies to be raised would have gone to rail and transit.

In other words, this would have been more roads and freeways to empower sprawl.

The "tell" about TIME came earlier this year, when Napolitano was accused of making a secret deal with the (genuinely) powerful Home Builders Association of Central Arizona, agreeing not to tax development in exchange for the association’s "support" of the measure. More sprawl, and paid for disproportionately by lower-income Arizonans.

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Posted inUncategorized

In Seattle, another chance to shoot ourselves in the foot and reload?

Seattle is the most backward city on the West Coast when it comes to mass transit. That still puts it light-years ahead of most American cities. Its bus system is quite good, the first light-rail line opens next year and a street car now links downtown to the burgeoning South Lake Union district. Sounder commuter heavy rail runs from Tacoma north to Everett. In addition, the Cascades Amtrak service provides convenient service between Eugene, Ore., and Vancouver, B.C., including Portland and Seattle. The ferry service is the best in America, despite recent underfunding.

But Seattle residents feel profoundly inferior to Portland, with its world-class light rail system, and Vancouver, with its SkyTrain. And its a sign of how much progress has been made in California that all the service I mention above is a fraction of what’s available in LA, San Francisco or San Diego. Yet Seattle is also the gang that couldn’t shoot straight when it comes to many transit projects.

A roads-and-transit measure was defeated last year. Now an all-transit measure may come to the November ballot, and already newspapers, powerful suburban developers and even the generally pro-transit King County executive Ron Sims are opposing it. Seattle’s misadventures with transit have lessons that apply to other cities, and will be more important in years ahead when a lifestyle based on long, individual auto trips becomes less viable.

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