Downtown Voices Coalition “op-ed” on Arizona Republic’s “New Economy” Series

028396A_JOn November 7, 2013, the Downtown Voices Coalition submitted the following “op-ed” in response to the Arizona Republic’s year-end series, “The New Economy.” In reviewing the “op-ed” 30 days later, the only thing that has changed is Phoenix’s bond rating, “downgraded from AAA to AA+. Changes to Standard and Poor’s criteria mean ratings are now largely based on local economic conditions. Phoenix property values dropped significantly during the Great Recession affecting the rating. We welcome your comments.

The Arizona Republic’s editorial board recently heralded the launch of a series of articles titled “The New Arizona.” Noting that this is a “sink-or swim” moment for the state, the paper announced, “Now is the time to fire up strategic plans for a more prosperous Arizona.” While we applaud the thought behind this series, we were disappointed that the paper failed to recognize the most important drivers of modern Arizona’s economy: Our cities.

As many economists have begun to acknowledge, the 21st Century is poised to become the Century of the City. Therefore, any series that attempts to present a strategic plan to “fire up” the Arizona economy should focus primarily on our urban centers and what is being done there to stimulate the economy and help us compete in the global marketplace.

If the Republic were to focus on this state’s predominant urban center, Phoenix, it would find much to celebrate. Downtown Phoenix, in particular, is enjoying a resurgence that is outpacing that of other parts of the state and the western U.S. Real estate values are rising, and demand is high; businesses are opening or expanding; light rail ridership continues to grow; and, most important, there is an exciting “buzz’’ about downtown that is attracting both local and national attention.

Much of this excitement about downtown Phoenix can be attributed to the work of activists and residents who, over time, have developed successful working relationships with elected officials and city staff, and have begun to play a more meaningful role in the development of the urban core. For example, the Mayor has formed Downtown Phoenix, Inc. (on whose board I sit), which gives community and neighborhood activists in and around our downtown “a seat at the table” that was once reserved exclusively for large business interests. Even at a fine-grain level, residents have exercised more influence on city development, as evidenced by the “Greening of Grand Avenue,” which has dramatically altered the streetscape west of the business core, as well as much needed neighborhood streetscape improvements along Fifth Street from the Phoenix Biomedical Campus to the Roosevelt Arts District.

Just a few years ago, such influence would have been unthinkable. However, today, because of the city’s more open policy and the efforts of the Mayor and Council members, residents are more optimistic about their ability to shape the future of downtown Phoenix, and are, in turn,more bullish about the city’s economic recovery.

The resurgence of central Phoenix bodes well for the rest of Arizona. The development of entrepreneurial incubators such as SEED SPOT and CO+HOOTS and the expansion of the Biomedical Campus point to the development of a “new economy” that should be able to weather the market far better than the traditional “growth-for growth’s sake” model that has dominated the Arizona economy for the past 50 years. Moreover, policies developed in cities like Phoenix can serve as models for other areas of the state. This trend was evident when Phoenix approved the Access to Care Ordinance, expected to bring in more than $200 million in federal funding to support uncompensated health care for Phoenix residents over the life of the program. After Phoenix implemented this program, the State Legislature followed the city’s lead and enacted a similar measure to provide coverage throughout the state.

The Republic should be examining successful programs such as these, as it has in the past with editorials lauding adaptive reuse and public art, and proposing new ideas for accelerating economic development in urban areas. Unfortunately, the media’s fixation on the issue of employee compensation to the exclusion of almost everything else doesn’t help tell our broader story. By confining their analysis to this one aspect of the city’s operations, the Republic has created the impression Phoenix’s growth is threatened as a result of its pension and other compensation obligations.

Nothing could be farther from the truth. Phoenix retains its AAA Bond rating and is still considered one of the best-managed cities in the world. Moreover, the Mayor and some enlightened council members passed reasonable measures to rein in pension costs (measures that, by the way, are supported by the Phoenix Chamber of Commerce). Others continues to insist, however, that the city pursue goals of “questionable legality” in restricting pensions that would undermine the city’s commitment to standards of fundamental fairness and would inevitably lead to protracted and costly litigation.

As we sit at the edge of an economic recovery, it is time for us to move on. We need to celebrate the increasing diversity of Phoenix’s economy and focus on how we can improve upon and replicate the city’s successes. Of course, we need to address problems when they arise, but we should not become so intransigent and polemical in our response to these issues that we threaten to derail our entire economy. Above all, we need to acknowledge that our fortunes, and those of Arizona, will depend in large part on the support we give our cities. It is only through the success of our cities that can we develop a more prosperous Arizona.

Very truly yours,

Tim Eigo
Chair, Downtown Voices Coalition
Phoenix, AZ

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