Boring Budgets

The Arizona Republic’s Robert Robb posted this opinion column today. He probably isn’t aware that the brand new Scottsdale City Manager just reported a $3 million budget deficit to the City Council!

When Glendale was boring and solvent

The City of Glendale is caught in an excruciating budget squeeze, due principally to debt from two big signature projects – the hockey arena and a spring training facility – that were supposed to pay for themselves but didn’t.

As a result, the city faces a deficit of as much as a fifth of everything else in its general fund budget.

Glendale used to be boring. It was a successful, but sleepy, upper-middle class bedroom community. And it had unexciting but competent governance.

That, however, wasn’t enough for city leaders. They wanted to become a city with cachet, the west side’s Scottsdale.

Glendale landed the Cardinals’ football stadium, but that was paid through countywide taxes. So, not much of a risk.

Then developer Steve Ellman started peddling the nonsense of a professional hockey arena that would pay for itself with ancillary retail development. He first pitched Scottsdale. Former Scottsdale Mayor Mary Manross’ greatest service to her community was the skepticism with which she viewed the claims.

Glendale snatched it away, gloating at the time. Now, it’s an $8 million hole in the city’s budget.

Having ancillary retail pay for a sports facility sounded like such a good deal that the city assumed it would happen again with a spring training facility. That one is now a $17 million hole in the budget.

There’s a tendency now to regard Glendale officials as foolish or naïve. In reality, there’s quite a history of failed signature city projects in the Valley.

Tempe assumed development around Town Lake would at least pay for maintaining it. Hasn’t happened.

WestWorld was supposed to put Scottsdale on the international equestrian map and be self-supporting. Over two decades later, it still isn’t.

Scottsdale, in a brain-dead move that’s still unfathomable, actually rerouted its main arterial street for a high-concept retail development, the Galleria, that promptly failed after opening.

It’s actually better when these things fail before ever getting off the ground, and there have been several of those.

Phoenix cleared out a Latino neighborhood near Sky Harbor for an industrial park that housed mostly vacant land and weeds. It condemned several longtime downtown retailers to make room for a new retail development called Square One. It died in blueprint.

Mesa has been suckered twice by aquatic theme park developers, once clearing out a historic neighborhood to make room. Neither could get financing.

So, Glendale is hardly alone in falling for signature projects that never pan out. It took some greater financial risks. But it also got unlucky in coming up craps on the projects contemporaneous with a recession that hit government finances particularly hard.

There are two lessons here. First, never assume ancillary development is going to pay for the signature public amenity. The amenity is either worth the public funds being requested or it isn’t. Ancillary development, if it occurs, should be treated as a bonus, not as an essential element of the financing plan [emphasis added].

Second, boring can be OK. In city governance, it can be a high achievement.

Arguably, the most successful city in the Valley over last decade or so has been Chandler. Now, also arguably, Chandler had an advantage. Its successful but sleepy upper-middle class bedroom community has developed around a high-tech employment core that located there for different reasons.

Nevertheless, Chandler city government has steadily added plain-vanilla amenities – parks, an arts center – as it goes. So far, it hasn’t tried to make a name for itself with some pie-in-the-sky project.

That’s boring. But what would Glendale give to be boring again?

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3 Comments

  1. What would have been the best deal for Scottsdale at Scottsdale Road and McDowell?

    A. Build the hockey arena

    B. Build (snore) SkySong with its accompanying vanilla apartments. (I remember when Manross pulled up in her BMW convertible to watch the groundbreaking.)

    C. Leave Los Arcos in place with some updating

    My answer would be “C”. I still salivate thinking of the LuAnne special at Luby’s and being able to buy a drill at Sears all in the same trip!

  2. As is my “NATURE” to report and documented in the Oct 2013 US Fish and Wildlife study “Banking on Nature”, the economic benefits of a wildlife preserve cannot be denied. Scottsdale has the most important urban “potential” wildlife refuge in the world and as it happens, over 12 million tourist come to Phoenix/Scottsdale every year. Properly managed…the McDowell Sonoran Preserve, AT NO ADDITIONAL TAXPAYER COST, could provide 2,000 new jobs in Scottsdale and over $200 million new annual revenue.

    Read the report if interested. A few simple things…stop the killing of the last 12 huntable deer in the Preserve and reopen water resouces the Brown’s developed decades ago. Replace the City Preserve Director and stop overbuilding trailheads, bulldozing new trails that very few hikers use.

    http://refugeassociation.org/2013/11/banking-on-nature-report-released-by-deptartment-of-interior/

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