On the night in 1968 after President Lyndon Johnson signed the bill authorizing construction of the Central Arizona Project., my mother took me on a long drive. We went through the citrus groves, the empty farmlands between the towns, the enchanting oasis that was Phoenix. Like many who had dedicated a good part of their lives to win the CAP, she had deep misgivings. She wanted me to see the place, burn it in my brain, and remember. "It will be gone," she said. She didn't live to see her prediction come true. But the ferocious transformation of Phoenix from my beloved old city to the nearly unrecognizable concrete desert of today largely happened during the last two decades of the twentieth century. The big changes began in the 1980s.
In 1980, Phoenix's population was nearly 790,000, up 36 percent from 1970. The city would grow slower in the 1980s — up 25 percent. But Maricopa County grew almost 41 percent. Yesterday's small communities began to become today's mega-suburbs as sprawl took off as never before. For example, Glendale, which had grown by 168 percent in the 1970s, added another 52 percent in the eighties. It would hold nearly 148,000 people by 1990. Arrowhead Ranch, the citrus groves owned by the Goldwater and Martori families, was being developed into subdivisions, one of the largest new "master planned communities" in the state. Phoenix remained the power center of the state and county through the decade, but its hold began to slip.
In 1980, Phoenix still enjoyed a robust base of major headquarters. By most measures it was never stronger and almost all were located in the Central Corridor. Among them were the three big banks, Valley National, First National, and the Arizona Bank; Greyhound; Arizona Public Service; American Fence; Central Newspapers; Western Savings, and Del Webb Co. Karl Eller's Combined Communications had been purchased by Gannett in 1978 but Eller remained active, taking control of Circle K in 1983 and making it the nation's second-largest convenience store chain.
APS formed a holding company, Pinnacle West Capital, that was not regulated like the utility by the Corporation Commission. Among its ventures was the S&L Merabank. Taking advantage of airline deregulation, America West Airlines was formed by local investors in 1983 — it would go on to merge with USAirways and take over American Airlines. And Phelps-Dodge, which for a century controlled much of Arizona's destiny as the world's leading copper company, moved its headquarters from New York City to a new tower in Midtown Phoenix.
The old stewards had died or retired. But the city's base of CEOs, most members of the admired/reviled/conspiracy-theory-magnet Phoenix 40, remained fairly strong. In addition to the bank leaders, Eller, Keith Turley at APS, and the Driggs brothers at Western Savings, John Teets became chief executive of Greyhound and brought his demanding style to civic leadership, too. Each in his way continued a tradition of seeing the good of his company and the good of the community as intertwined.
A newcomer from Cincinnati, Charles H Keating Jr., was a different. With a whiff of financial improprieties already trailing him, he established American Continental Corp., which became the largest homebuilder in the state, and bought Lincoln Savings. While he gave to Catholic charities — and was prominent in Pope John Paul II's visit to Phoenix in 1987 — Keating lacked his predecessors' civic commitment to the city. He placed his headquarters on Camelback Road and lavishly funded Republican politics, down to the City Council level. It was a sign of things to come.
So were two mergers: First Interstate Bancorp of Los Angeles acquired First National Bank in 1981 and Security Pacific, another LA giant, bought the Arizona Bank in 1986. The Legislature empowered these losses by passing an interstate banking compact. They seemed benign at the time — First Interstate especially continued its predecessor's support of Phoenix philanthropy — but they were harbingers of trends that would eventually denude almost all of old corporate Phoenix.
Soon after the decade began, Fed Chairman Paul Volcker induced a severe downturn to tame inflation. Not for the first time, the myth of Arizona being recession-proof was shown to be a lie. State unemployment peaked at 11.5 percent in November 1982, 0.7 percentage points above the national high. But the state rebounded quickly. Phoenix boomed, and not only from real estate. Reagan-era Cold War spending flowed to the metro area's advanced industries, anchored by Motorola. Proportionally, Phoenix's high-tech sector was larger than today. Incomes rose to the national average in the 1980s, something that wouldn't be repeated afterward.
In one of its biggest blunders ever, the city of Phoenix was not responsive to the wishes of a Silicon Valley semiconductor firm wishing to expand in Arizona. Intel went to Chandler, ramping up operations starting in 1980.
By 1980, all the major new downtown buildings begun in the late 1960s were complete: the Civic Plaza with convention center and symphony hall, Hyatt Regency and new Hotel Adams, and towers for the three big banks, including Valley Center, the tallest skyscraper in the state. Only one other major building would go up in the decade, One Renaissance Square in 1986.
Unfortunately, they did little to prevent the murder of downtown. With the exception of Walgreens, major retailers were gone by 1980. Small businesses were closing. The walkable, street-level human scale that had long defined the core disappeared. The new buildings were dead at street level. For example, Valley Center, although an appealing piece of architectural sculpture, had a forbidding relationship with pedestrians and was connected with its parking garage by a tunnel. The superblocks required by the new buildings erased scores of smaller buildings, those with the irreplaceable feature of a door to a new shop or office every eight paces or less.
Worse, the city and private landowners began tearing down old buildings downtown and in adjacent neighborhoods, especially Evans-Churchill and between downtown and the state capitol. City officials saw themselves engaged in "slum clearance," a fetish with the professional planning class. Landowners didn't face any tax penalties for blading historic structures. Continuing through the next decade, hundreds of historic commercial buildings, warehouses, and homes were lost. Large-scale landbanking began, with little incentive to build.
Margaret Hance, who served as mayor from 1976 to 1984, seemed positively hostile to the central core. As the old Deuce single-room occupancy hotels were demolished, street vagrants camped out in front of the remaining businesses. Calls for help to City Hall produced no results. The problem spread into nearby neighborhoods, all the way to Thomas Road. Homeowners in what became the Roosevelt and Willo historic districts, awoke to find hobos drunk asleep on their porches and lawns. Encanto Park, the Phoenix Art Museum and the public library became infested, too. The tiny social services outfits were overwhelmed.
Hance and the at-large council saw little reason to be concerned. The Papago Freeway was coming through just north of Roosevelt Street, so who knew how many of those old neighborhoods could be preserved?
The action had shifted decisively north of Thomas, to Midtown and Uptown Phoenix, as well as to Camelback between 24th and 32nd streets. Goosed with enormous investments from newly deregulated savings and loan institutions, the areas boomed with new construction (although even here teardowns and landbanking happened). Park Central shopping center added a parking garage. Six major highrises went up on north Central during the decade, all with enormous, multi-story parking garages poking out the back. In the late '80s, a promoter promised to build the tallest building in the nation on Central north of Indian School Road. It never happened.
Meanwhile, lavish new resorts opened. For example, Bob Gosnell opened the Pointe at Tapatio Cliffs in 1982, on a Seventh Street punched through the Phoenix Mountains and offering spectacular views. It had sisters at Squaw Peak and South Mountain. The most impressive resort of all opened in 1988: The Phoenician (located in Phoenix, but with Scottsdale added to its letterhead as the capital city's cachet dimmed), a vanity project of Keating but still beautiful today. Building it cost more than $610 million in today's dollars.
Arizona politics was not yet insane. Democrat Bruce Babbitt served as governor from 1978 to 1987, arguably one of the most effective chief executives in the state's history. His biggest accomplishment was the 1980 Groundwater Management Act (although its enforcement is open to deep skepticism). This wasn't easy in a state with a constitutionally weak governor. He had what historian Phil VanderMeer calls "a fondness-fury" connection with Burton Barr, the older, more experienced House GOP leader. Babbitt declined to be Barr's pupil and used the veto to often get his way. Babbitt also made no friends among liberals and generations of mining families when he helped crush a copper strike against Phelps-Dodge in Morenci in 1983.
Arizona politics was not yet insane, but it was headed there. Barr's pragmatic modern bossism was running up against increasing ideological conservatism in the Legislature as the decade wore on (and Burt was no leftie). Babbitt was followed in office by the John Bircher Evan Mecham, in a bizarre twist discussed in an earlier column. Mecham was soon impeached and removed. The beloved Secretary of State Rose Mofford served out his term and extremism seemed to subside.
Meanwhile, the great political transgression involved the ubiquitous Charlie Keating and his attempt to rope five U.S. Senators, including Arizona Democrat Dennis DeConcini and Republican John McCain to capture S&L regulators. It blew up into the Keating Five scandal. The other great scandal of the decade was when Duke Tully, powerful publisher of the Arizona Republic and Phoenix Gazette ("I tell Arizona what to think") was unmasked as a fraud. He claimed to be a decorated fighter pilot, a combat veteran, and attended military functions in the uniform of an Air Force lieutenant colonel. He went after one scalp too many with the county attorney and the truth came out. He had never served in the military at all.
Another media shock came in 1982, when Joseph Billie Gwin barged into the KOOL television studios with a gun and held the crew and veteran anchor Bill Close hostage. Gwin surrendered after Close read his rambling statement on air.
Phoenix saw a tectonic shift at City Hall when the last of Charter Government's outward trappings, at-large council members, was swept away with district representation. The champion of districts and more open government was elected mayor in 1983. Thirty-six years old, Terry Goddard was brilliant, with a wide-ranging intellect, ambitious, demanding of himself and others, and politically astute, the son of a governor. Although elections were non-partisan, he was the first Democratic mayor of Phoenix since the 1940s. He was re-elected four times (in those days mayor and council served two-year terms).
Goddard lived just north of downtown and some of his most consequential legacy was in beginning the long march to reclaim the heart of the city. He spearheaded historic preservation, including establishing the first historic districts. Heritage Square blossomed, anchored by the refurbished Rosson House and with other historic buildings moved nearby. Goddard persuaded the Rouse Co., developer of Boston's Faneuil Hall and Harbor Place in Baltimore to build a festival marketplace downtown. Arizona Center opened in 1990 and was wildly popular, at first. The Herberger Theater Center opened in 1989.
Goddard learned more sophisticated aspects of urbanism as he went along. Later, he regretted that Rouse made Arizona Center inward-facing and suburban. A refurbished Patriot's Square, which, like the huge space north of the Civic Plaza, remained a forbidding sun-blasted expanse, despite a great downtown's need for signature public spaces. The Mercado, developed by Fife Symington with Mexican-themed shops, soon failed. An ambitious "desert cities" initiative failed to gain traction. But Goddard laid the foundation for the center city's rebirth. This included seeing through a 1988 bond measure for a new library and city hall, and vetoing an attempt to bulldoze part of Roosevelt to erect midrise apartments. A Phoenix Arts Commission was created, artists located in and near downtown, and historic district homeowners began to recover from years of malpractice at City Hall.
The Goddard years were heady, and contained self-examination that was rare for Phoenix. Under the R&G's new publisher Pat Murphy, renowned urbanist Neil Peirce examined the metro area and the devastating results were published in the newspaper. The Pierce Report dissected the civic disconnect because of the sprawl building model, air pollution, high crime, poor schools and destructive intercity rivalries. It offered responses but few were acted upon. It was a devastating lost opportunity.
Even worse was the loss of the vote to build an advanced transit network, including passenger rail, in 1989. Had ValTrans passed, it would have ensured a much more compact and coherent metropolitan area. But it came four years after voters adopted a sales-tax increase to build freeways. Although the old power structure supported ValTrans, it was opposed by the sprawl developers and land interests who would profit from the freeways. All through the 1980s, the west leg of Interstate 10 was being built, a swath of destruction through the city. In an epic blunder, the Papago Freeway inner loop was constructed, resulting in the loss of thousands of historic houses. Kenilworth School was barely saved and the final leg of I-10 was put under a deck as the Interstate was completed there coast-to-coast in 1990 (you can read the plaque under the Central bridge).
Amtrak's Sunset continued to serve Phoenix at Union Station. And a makeshift commuter train, the Hattie B. (named after Arizona's first lady) was popular when the 1980 flood washed out all road crossings of the Salt River. But the state showed no boldness in either expanding train service or ensuring its future at all.
The building frenzy wasn't confined to subdivisions, resorts, towers, office parks, and freeways. Planners had determined that two-lane Bell Road would be Phoenix's northern boundary for decades to come. That lasted about as long as it took Phoenix to realize it was in a northern annexation battle with Glendale and risked being cut off. Later, Goddard lamented the "blood sport" of cities fighting each other over land and sales-tax dollars. But he did it well. Phoenix also blocked Scottsdale from Cactus all the way to Jomax Road, going as far east as Scottsdale Road.
Two of the biggest construction projects in state history were realized in the decade, too. In 1985, the Central Arizona Project Canal was completed to Phoenix. The total cost would end up nearly $8 billion in today's dollars. A year later, Palo Verde Nuclear Generating Station came online. The largest nuclear plant in North America was upwind of one of its largest cities.
Much of the old and beloved was being lost, from Legend City (demolished in 1988, leaving Phoenix the largest city in America without a major amusement park) to the miles of magical citrus groves. Sky Harbor's expansion claimed historic barrios, including Golden Gate. The Hispanic residents moved to Maryvale, setting off Anglo flight. The local Mexican-American culture was further disrupted by massive illegal immigration, with the new arrivals granted amnesty in 1986. But no provision was made to improve school funding or economic opportunity.
But warts, bad air and all, the city seemed unstoppable. The NFL franchise left St. Louis to become the Phoenix Cardinals in 1988. The plan was for the team to play at Sun Devil Stadium until a new facility could be built in downtown Phoenix.
Like many hopes and dreams of the decade, it never happened. The savings and loan collapse had already begun and its casualties would not be limited to Charlie Keating's customers.
Read more Phoenix history in the Phoenix 101 archive.