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What downtown Los
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Cook
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PHOENIX (By Jon
Garrido, Arizona News) October 16, 2006 The phone lines at the
Downtown Phoenix Hyatt Regency are all lit up as reservations are
being made from callers from all over the United States and beyond
as news spreads across the globe the Cronkite School is coming to
Downtown Phoenix.
Instead of
families planning on visiting
Baltimore's
Harbor Place, Faneuil Hall Marketplace,
Disneyworld, the San Antonio River Walk, Pike Place Market in
Seattle, or the San Francisco Cable Car Tour, everyone is now
adjusting travel schedules booking visits to Downtown Phoenix to
visit the Cronkite school.
Not just
visitors planning summer vacations but even more jubilant, the
Arizona Convention Bureau is biting at the bit planning market
campaigns to further the draw of the Cronkite Center to tourists
from all over the world. If lines are too long to get in to the
Cronkite school, visitors will have access to visit the medical
school and watch fourth year students scrub up for surgery.
Developing
Downtown Phoenix into a college campus with medical school and
supporting hospital is not the way to build a vacation destination
to advance Phoenix into the realm of world class cities.
No one
questions building a medical school and supporting hospital campus
is needed in the Phoenix area but building such a complex on the
most valuable land in Arizona and consequently, diminishing
available land to build a downtown that will attract visitors from
all over the world to visit a destination center in Downtown Phoenix
is certainly questionable.
A
medical campus should be built where land is readily available,
affordable and most importantly, where land use will not diminish
opportunity for destination uses of Downtown Phoenix land.
In fact, one
does not need to visit other cities to see quality development
success. A drive to the corner of 24th Street and Camelback will be
a visit to a first class showcase development. Hard to imagine but
all done without public subsidies.
24th Street and
Camelback is high end superb development the kind of development
that should be driving Downtown Phoenix development. These are very
different market areas demographically but imagine what Downtown Phoenix would look like if it was similar to 24th Street and
Camelback.
Put another way,
the number of supporters to further develop 24th Street and
Camelback as a college campus including medical school and hospital
can be counted on the fingers of one hand.
If the Camelback
corridor came together to fight Trump on height, think how this
power community group would react to what the City of Phoenix is now
planning and doing in Downtown Phoenix utilizing all available
downtown land for a college and medical campus.
Cook
County Hospital in downtown Chicago is a prime example of not being
a destination center for Chicago. It is the ever winding river with
numerous bridges that has made downtown Chicago famous particularly
during Christmas with the use of twinkling lights everywhere.
Those
involved in marketing Chicago never mention Cook County Hospital as
an attraction yet Phoenix seems determined to build its own Cook
County Hospital on land that should be earmarked for greatness
rather a surgery room.
Instant
gratification is no answer to Downtown Phoenix development that in
the end will bring demise to what was a golden opportunity to make
Phoenix one of America's premier cities. Instant gratification makes
for headlines and great sound bites but the only way to develop
downtown is to look long term at quality destination projects that
add synergy to additional development thereby increasing property
and sales tax revenue.
Questionable
downtown develop is not new to Phoenix. It began with the property
on the north side of the Phoenix Civic Center which is a block owned
by the Catholic Diocese of Phoenix.
To develop this
key parcel, Bishop O'Brien gave the assignment to the once prima
donna of the Diocese: Monsieur Dale Fushek whose only development
experience was limited to developing a youth movement. The Diocesan
parcel abutting the civic center on the north side would have had
any savvy developer drooling at the possibly of maximizing the site
with a high density multi use convention hotel, class A office space
and retail structure. Even high rise condominiums would have worked
in the tower. Directly behind Saint Mary's Cathedral is where Saint
Mary's High School once was located and had it been restored to
historical architectural significance, the restored school could
have provided class A office space to chancery staff.
Parking for the
renovated Saint Mary's school diocesan center could have been
accommodated underneath the tower structure to the east along with
providing underground parking for tower users.
The tower could
have easily duplicated the amount of space built as the Arizona
Center with location being more premium for its location directly
across a small collector street from the Phoenix Convention Center,
a premium ideal site for a convention hotel complex.
The ideal
scenario would have been to execute a unsubordinated land lease to
develop the underground parking garage and tower above accommodating
the convention hotel and office space. By leasing the church land,
the Diocese of Phoenix without risk would have receive in excess of
$20,000,000 annually indexed by the CPI which could have been used
by the Diocese to cover increasing operating costs and increased
charitable services. A golden opportunity lost because of the lack
of foresight and development experience of Monsignor Dale Fushek, a
parish priest now waiting for his faith to be decided in court on
charges of molesting youth in his care.
Similar to
Fushek is Phil Gordon, former photography shop operator, now making
decisions on downtown development as indicative of having
development done by persons with no development expertise.
Similar to the
loss of development opportunity by the church is to use a prime
piece of property in close proximity to the convention center for
restoring a handful of low density buildings to accommodate 24
students to attend a medical school.
The crux of the problem is public
officials without development experience are responsible for Phoenix
downtown development.
If anyone thinks city staff will
provide balance then you do not know how a city functions.
No one on staff is going to go against
the grain and voice another direction because no one bites the hand
that feeds them.
This of course assumes city staff has
private sector development expertise. No Phoenix staff person has
this depth of expertise. No one has "risk" experience for all are to
quick to use "public" money that has no risk.
Then comes parking. Every structure
will have to deal with parking. Remember it was lack of parking that
killed the Mercado.
As beautiful as the Mercado complex is
that was planned for primarily restaurant and tourist retail, the
complex was planned and developed without regard for parking. On the
same day the Mercado gave birth to restaurants and other tourist
type retail, the Mercado died. There was no parking for visitors.
Parking is critical and Phoenix does
not have a good record in this area.
Most regional malls are placed in
suburbs not only because this is where consumers live but also
because of the cost of land makes numbers work in developing
regional shopping centers that require a sea of at grade parking
surrounding each center avoiding the cost of constructing a parking
structure. Down or above grade the numbers are nearly the same,
$15,000 per parking space.
Who then is going to pay for a parking
structure to accommodate the Phoenix medical school and hospital's
parking needs? Again, the public developer will turn to the public
to finance this cost. Translation: Taxpayers will pay this cost.
Taxpayer subsidies are bad enough but
the real villain is utilizing land use for public structures
diminishes land available for destination type land uses.
All private
development professionals strive to maximize development
opportunities by placing the highest and best use for each property.
It is highest and best use that drives development at 24th Street
and Camelback. It is the market place that determines highest and
best use also known as
laissez-faire that the free market is best left to its
own devices, and that it will dispense with inefficiencies in a more
deliberate and quick manner than the Phoenix mayor and city council
ever could. Particularly because Phil Gordon and the city council
members are clueless and lack development experience.
Adam Smith argued the
invisible hand of the
market would guide people to act in the public interest by following
their own self-interest that drives by market demand as evidenced by
increased tourism found in major cities. Simply put even for a
clueless mayor and council build it and they will come. This
premise attracts millions of persons to Las Vegas each year as does
the San Antonio River Walk.
For a city, the
traditional litmus test does the proposed use contribute to
critical mass to spur additional development with the ultimate test:
will the development significantly add to property and sales tax
revenue for the city. The Las Vegas hotels and casinos do this. The
San Antonio River Walk does this.
The ASU Downtown Phoenix campus along with the medical school and forthcoming
hospital will not do this. The ASU Downtown Phoenix campus is a
disaster in the making.
The market
drives 24th Street and Camelback; consequently, there is no need for
public subsidy. Which begs the question why is public subsidy always
a requirement for developers in the Downtown Phoenix area? It is
only because developers know the City of Phoenix is an easy touch on
downtown development.
It appears
public subsidy in Downtown Phoenix is the equity contribution of the
Phoenix mayor and city council who have no risk development
experience other than maybe not winning in the next election. Yet,
if no one questions, then all public subsidies freely flow.
It is when
private developers know public subsidies are readily available,
developers approach the mayor and council for free hands outs for
projects that could never get off the ground supposedly unless they
receive "gap" financing to make the numbers work. The more public
money that is available, the greater need for subsidy that is
requested.
The payoff for
city officials without development experience, the public
recognition of spearheading less than highest and best use
development to win elections.
Gov. Janet
Napolitano said, "What we are doing here is not just creating a
medical school, we're creating a biomedical campus for the 21st
century."
An appropriate
downtown use?
Sounds like Phil
Gordon, Dale Fushek and now Janet Napolitano with no development
experience that instantly become experts on downtown development.
Then there is
the Pied Piper of Hamelin
or rather of ASU.
"Pay the piper"
The tale has
inspired a common English phrase, "pay the piper,"
which means to face the inevitable consequences of
one's actions. In Downtown Phoenix it will come to
mean a golden destination opportunity lost as
available land is gobbled up insensibly to placate
instant gratification.
Building a
school campus on the most valuable land in Arizona does not
contribute to the convention and sports event focus working as a
magnet for downtown activities. A downtown campus will do nothing to
attract major conventions and tourists.
A development
overlay should be approved by the City of Phoenix to insure only
development that adds to the convention and tourist focus should be
approved with a jaundice view of all other development. If
developments do not sustain convention, tourist, and first class
office, they should not be built.
The ASU Phoenix
downtown campus is short sighted or rather work in progress of
instant gratification. Downtown Phoenix should be for spenders not
students. Students do not support affluent spending. The ideal city
is a combination of New York City, Chicago and Miami. Work, home and
play in one area: downtown. Retail did not work at Arizona Center
for it was ahead of its time without affluent consumers. It is
doubtful it is going to work for ASU. It will end up looking like
retail near the Newman Center in Tempe dismal. Schools can not pay
rents required by first class office or retail space. Thus, school
space can never be justified in a central business district where
highest and best use is an absolute requirement.
And if any one
thinks the Phoenix downtown ASU campus will revitalize the Downtown Phoenix core area with major income producing properties need only
drive to the ASU main campus in Tempe.
I was there last
month and I failed to see a Nordstrom. I did not even see a Gap. In
fact the only retail I saw was very small four store fronts on the
north side of the Newman Center.
Nordstrom and
the Gap are market driven. Where there is demand with shoppers
having high disposable dollars, these stores that cater to the
affluent will be built.
Students have
few disposable dollars compared to first class office building
workers and affluent home owners.
To further
magnify the type of retail supported by students, drive the ASU
Tempe campus east to Scottsdale Road/Rural Road then south to Apache
Blvd. This area looks like Iraq. Not a pretty site and as for
retail, how does anyone justify students without high disposable
incomes needed to generate economic multipliers? Student incomes
will not generate leverage supporting the types of retail
development found at 24th Street and Camelback.
And without this
type of retail, the illusion of high rise luxury condominiums in
Downtown Phoenix will be limited.
When I was the executive director of
economic development for the City of El Paso, I joined the
prestigious Urban Land Institute, bought the entire ULI development
library, read every publication, attended numerous development
workshops and conferences and most importantly, toured nearly all
major cities to see first hand how downtowns were successfully
developed. (These type experiences were not new for I began doing
this when I was the economic development coordinator for the City of
Tucson and continued when I was the v.p. for planning and
development for once the largest real estate development company in
Arizona). The most classic being the transformation of the Trinity
River into San Antonio's River Walk. This is a prime example of
revitalizing a down town and Indianapolis Circle Centre Mall
creatively and ingenuity placing a regional mall above the central
business district along with adjacent sports facilities. The most
noted being
Baltimore's
HarborPlace and Faneuil Hall Marketplace
in Boston. My favorite is Chicago's downtown area especially with a
flood of Christmas lights twinkling above the river making downtown
spectacular. Even San Diego is noted for revitalization of its
downtown area with the historic Gaslamp Quarter.
The point being made in each of these
examples is tourist cities all have a destination downtown. This is
what is lacking in concept for Downtown Phoenix. A university campus
with medical and a journalism school does not even come close.
The recently approved CityScape is
not a destination. It will provide for those that work in the
downtown area and to the few that live in downtown. It is not a
River Walk. It is not a Faneuil Hall or Baltimore Harbor Place. No
one working and living in Scottsdale will ever drive to Downtown Phoenix to shop at
CityScape. Neither will anyone living in
Superior or Globe drive to Downtown Phoenix to shop at CityScape.
This should illustrate
CityScape is not a destination and the
premise made in this writing: a destination is absolutely required
to take Phoenix into the realm of great cities.
Someone much wiser than I said they
are not making any more and to utilize some of the most valuable
land in Arizona for a few two story buildings to house 24 students
is even dumber than utilizing the block north of the civic center
for a low density two story building to house the Diocese of
Phoenix.
This prime piece of real estate in
Downtown Phoenix now occupies a two story low density building with
no architectural significance.
This in itself illustrates the City of
Phoenix who in essence believes in instant gratification. By
utilizing the most valuable land in Arizona achieves nothing to
increase the critical mass needed to revitalize Downtown Phoenix.
This madness has got to come to a
halt. Soon all Downtown Phoenix will be one huge campus. It is time
to quit following the Piped Piper and send him far away.
Maybe in the short term, the downtown
area will go from empty blighted parcels but eventually, Downtown Phoenix instead of high rise office and a destination project that
would have attracted housing and then retail is not going to happen.
Why not use the medical school to
anchor a medical campus near Mayo? Everyone concerned with
development should take a look at Cook County Medical Center in
Chicago and ask themselves is this the best use of prime Phoenix
downtown land? If anyone has difficulty with this, ask yourself if
any medical hospital campus located at the corner of 24th
street and Camelback is an appropriate land use?
I for one think Downtown Phoenix
should surpass 24th Street and Camelback with a
imaginative destination center if we want Phoenix to become a
premier city.
The City of Phoenix is in desperate
need of leadership that understands development. Instant
gratification for the sake of a campaign slogan is not the long term
answer. Following the Piped Piper is not the answer.
2009 will bring about an opportunity
for change of leadership in Phoenix. |