Developers Don’t Always Win … Just Most of the Time
By Marie Provine with assistance from Gail Graves | January 6, 2024
There was nothing new about the city council’s enthusiasm for a billionaire’s proposal last year to create a hockey arena and luxury entertainment district on the only remaining large piece of land in Tempe. That all living Tempe mayors also favored such a deeply flawed proposal is evidence that development, particularly large-scale commercial development, has long-enjoyed special favor among our representatives. Tempe’s leaders have been far more attentive to the appeals of corporate developers than to the constituents who elected them.
“We are trading Paris for New York City”
The romance of big commercial deals and the legacy of political favors becomes clear when looking back at Tempe’s development history. Developers and most of our city leaders have shared a vision of Tempe’s future—one with tall buildings, luxury hotels, amusement parks, national chain retailers, and large apartment buildings—a vision in contrast to a family-friendly, pedestrian-oriented college town in which locally owned restaurants thrive and small businesses sell crafts and artwork, shoes, books, handmade clothing, and scrumptious cookies. The shift toward a high-rise, high-density approach began in the 1970s. In the words of one observer, “We are trading Paris for New York City.” Residents have had some success fighting back — most recently when voters resoundly rejected the Coyotes arena deal last May. Although few in number, some earlier struggles have also ended in epic victories for residents.
Early proposals included a luxury hotel, office buildings, high-rise apartments, and a western version of Nashville’s Grand Old Opry.
The area around the Tempe Butte on the south shore of the lake has been targeted for development at least since the 1980s when a county-wide referendum proposing a three-city lakefront development was defeated in Mesa and Phoenix, but narrowly passed in Tempe. Our City Council took notice and began to envision a lake with high-rise office buildings bringing in millions of dollars in revenue. Early proposals included a luxury hotel, office buildings, high-rise apartments, and a western version of Nashville’s Grand Old Opry. John Dougherty observed in a 1993 article: “The city wants to use the river to showcase its long-term goal of becoming a high-density major urban center that would be an attractive headquarters for a multinational corporation.” (p. 24 New Times, April 14-20, 1993). These ideas were never put to a vote and the controversial development was adopted with little citizen input and highly misleading cost estimates. Although it was the largest capital project it had ever undertaken, the city never completed a cost accounting of this project. As former councilmember Barbara Sherman observed: “The public has never known what Rio Salado is all about. They’ve never known what the costs are really. It’s all been fluff.” (p. 27 New Times, May 20 – 26, 1999, “A Fortune Runs Through It.”)
Over the years, the city has preferred to go it alone with developers. An example is the Peabody proposal for a 1,000-room luxury hotel and convention center put forward in 1997. Eager to support this project because projected revenue would fund the maintenance of the lake, the city agreed to whatever the developer requested. It provided $64.8 million in incentives to the Peabody group, which was headed by multimillionaire Marty Belz. It bought land for Belz’s project and offered to lease it for 10 years. The city even offered to use its eminent domain power to acquire property and then sell it to Peabody. Despite these extravagant promises, Peabody, for reasons of their own, never moved a shovelful of dirt.
“This strange, unholy alliance between the city and private business is mind-boggling.”
Developers like Peabody carry enormous weight in Tempe—they and the City Council would rather not involve the public in their plans. Richard Dillon in a 2000 op-ed said: “Downtown Tempe is one big upside-down pyramid con.” He could not understand why corporations like America West Airlines had received decades of tax relief: “This strange, unholy alliance between the city and private business is mind-boggling … City bureaucrats talk like they work for the very corporations they are supposed to regulate.” (Arizona Republic, My Turn, Feb. 25, 2000 op-ed.)
The threat to the iconic Tempe Butte itself stemmed from the city’s relationship with MCW Holdings, a development corporation that proposed Hayden Ferry South, a 315,000 sq. ft. residential and retail development next to the Butte in 1997. By 2000 the proposal had morphed into a $200 million project covering over 11 acres, some of which would require bulldozing a slice of the western edge of the Butte. The tallest building would be 15 stories, featuring condos and a parking garage. The proposal, which had our City Council’s enthusiastic backing, drew opposition from a small group of determined residents. These grassroots activists named themselves “Friends of Tempe Butte.” In their efforts to engage the community, they noted the presence of petroglyphs, burial sites for Native Americans on the Butte, and the fact that Kit Carson was attacked by Indians there. US Senator Carl Hayden was born at the foot of the Butte.
Led by Randall Amster, Gail Martelli, and other determined residents, Friends of Tempe Butte proposed a land swap to avoid bulldozing the Butte. The group printed flyers, testified at meetings, wrote letters to the editor, and held a candlelight vigil that ended at a council meeting. Protesters created a giant ear for people to sign and circulated a petition that garnered over 2000 signatures. Although the effort got short shrift from Tempe planners and drew limited interest from council members, the developer eventually conceded to the land swap that would keep Tempe Butte intact.
The Butte’s fate continues to depend upon citizen activism.
The city eventually accepted a proposal of the Friends of Tempe Butte activists to designate the area as a preserve and protect it from future development. That’s good news but the Butte’s fate will continue to depend upon citizen activism. As recently as December 2023, Gail Martelli (now Graves), a 20-year veteran of the effort to save the Butte, appeared before the City Council to speak to the extreme neglect of the stairways, signage, and cleanliness of the Butte preserve.
Why do Tempe’s city leaders so often seek to bypass the public in their eagerness to do developers’ bidding? Perhaps the basic problem is that developers are a regular presence at City Council meetings and generous donors to council candidate campaigns—campaigns that involve costly, at-large elections. Candidates need hefty war chests to run for office and developers are quick to provide cash. A district-wide election system would be much less expensive, but the Council has so far opposed that arrangement. Just as important, developers and many mayors and council members, past and present, promote a vision of Tempe as a highly urbanized, densely populated city with a central area capable of attracting multinational corporations. The fact that residents do not share this vision is likely to be ignored if deals can be negotiated outside of public view.
Tempe is lucky to have a resident like Gail Graves, who is willing to fight for a more livable, environmentally friendly vision of the city. As Gail argues: “There is no rule that we have to evolve into a big city…. The City Council should receive its direction from the citizens, not developers.” (Arizona Republic, March 7, 2000, My Turn: Tempe needs to listen to its residents.)
It doesn’t have to work that way—resident input matters
It’s a familiar story—the city negotiates with a developer, clandestinely at times, until they work out a contract—then it’s offered for public comment—which is very cordially ignored—followed by the Council’s vote to approve the deal. We at Tempe1st believe that it doesn’t have to work that way—resident input matters and our elected officials must be reminded to represent us, their constituents, or they will be voted out.