Phoenix should leave GPEC

A little history: The Greater Phoenix Economic Council was formed in the aftermath of the 1990 recession. Fueled by savings-and-loan grifters and spec-building con artists (Charlie Keating combined both roles), it was the worst downturn the city had faced since the Depression.

Up to that point, of course.

It stung that the "infamous" and "negative" Barron's article calling out Phoenix was correct. But there were enough locally headquartered companies, civic stewards and sane political leaders remaining to be concerned about more than image. Phoenix and Arizona started a serious effort to diversify beyond real estate, to recapture the efforts of the late 1940s through the 1960s aimed at creating a robust, high-quality economy.

And for several years, GPEC was successful. The keys were the first president, Ioanna Morfessis, who had a sophisticated understanding of economic competitiveness and development; also, she was backed by a board of business titans who could knock heads and write checks. One other element helped: the city of Phoenix was still the unquestioned center of gravity.

Unfortunately, the decade saw 40 percent population growth and massive new sprawl. At the same time, most of the city's corporate crown jewels were either bought or significantly downsized and almost all the stewards died or retreated. The appetite to seriously build a quality economy, to sustain the cluster strategy, waned. In this "drunk on growth" atmosphere, Morfessis left.

She was followed by Rick Weddle and Barry Broome, both capable. But GPEC and the metropolitan area had changed dramatically.

GPEC became one of many zombie staff organizations. They had been created for and by a much larger, more powerful and diverse local business community, one that had shrunk dramatically by 2001. Chief executives who sat on the Phoenix 40 and "ran the city" were replaced by general managers of branch offices assigned to the "Phoenix market."

No wonder, then, that GPEC essentially became an arm of the Real Estate Industrial Complex. Recruiting call centers and other back-office work to fill spec office "parks" on the fringes became Job No. 1.

It's not that Weddle and Broome didn't understand the problem of these low-end, low-wage plays. But they had no major CEOs to back a push for quality, writing checks, knocking heads, and maintaining headquarters employing thousands and deploying billions of dollars. Not only that, but as the Legislature became more extreme, its members vehemently opposed the tools needed for serious economic development.

Metropolitan Phoenix's affluence, commerce and what remained of "corporate Arizona" made a remarkable shift out to the fringes or, at best, 24th Street and Camelback. It wasn't much in bulk or quality — no Valley National Bank, no (old) Dial. The legacy semiconductor and aerospace sectors were in some cases fading and were certainly not keeping up with population growth.

Meanwhile, competitors such as San Diego, Portland, Seattle, Austin and Denver only kept upping their game as the larger economy kept changing. The risks of Phoenix's complacency and limitations were cloaked by population growth.

The 2001 recession caused a momentary questioning of the status quo. By this time I was writing my column for the Arizona Republic, pointing out the decline in economic quality and the competitive risks. During a GPEC board meeting, I was told, someone said, "My god, Talton is right!" But soon the metro area was off to the races again, right over the cliff into an outright depression that makes 1990 look like a bad-hair day.

I offer this history lesson now that Broome has departed for Sacramento, to a much higher-quality economy and fully stocked eco-devo toolbox in California.

This is the time for the city of Phoenix to leave GPEC.

This is the time for Phoenix to form its own economic-development organization, focused on the city.

GPEC stated that during Broome's tenure, the organization had helped bring "more than 260 companies, nearly 50,000 jobs and more than $8 billion in capital investment to the Phoenix area," according to the Republic.

I hate to pick nits, but that comes out to 5,000 jobs a year in a civilian labor force that topped 2 million before the collapse. Are those net jobs? Does those billions include the Intel fabs? Too bad about the Apple "breakthrough," which was mostly driven by DMB's spec Eastmark project on the Mesa fringe. Employment has still not recovered to pre-recession levels.

It's not Broome's fault that metro Phoenix underperforms all its peer cities in measures of quality and competitiveness. As I wrote, GPEC can only be as strong as the business community backing it — and the cohesion of the city it serves. Today, GPEC's board chairman is a man named Donald Smith who heads something called CopperPoint Mutual. I'm sure it's a very nice company (it provides workers comp insurance) and at least it is located in Midtown. But John Teets and Dial, a Fortune 500 headquarters, it is not.

But the heart of the matter is that GPEC can't serve the special needs of Phoenix and the appetite of the sprawl boyz. Maybe a few projects to far north Phoenix. But what has GPEC done for downtown, the Central Corridor or to fill abundant empty land along the light-rail line in the city? Not much if anything.

You will be told that GPEC was formed to prevent cities in "the Valley" from engaging in self-destructive competition. But that wasn't the primary reason (see history above). And with the rise of giant suburbs, natural rivalry has become a Mad Max affair — specifically, cannibalizing the assets of Phoenix and shipping them to the 'burbs and the fringes. Also, the last major power in the local economy, the Real Estate Industrial Complex, is hostile to the core and the leasing boyz always have their latest favorite (currently the "Price Corridor").

Phoenix needs an economic-development organization geared for it alone, and especially for the core.

With Mayor Greg Stanton wanting to play nice and no one with even the heft of Jerry Colangelo in the private sector to fight for the city, this is an unlikely outcome.

But it should happen. An amicable divorce. With a host of its special problems, but also unique opportunities, Phoenix can no longer be served by GPEC.

Read more reality based news in Rogue's Arizona's Continuing Crisis gateway.

Comments

[phxSUNSfan]

Great idea. Perhaps bringing organization like the Downtown Phoenix Partnership, Phoenix Community Alliance, etc. into a new Phoenix-centric econ dev organization would be ideal. There would be resistance. I believe something like this on a smaller scale was attempted in the past: combining all downtown groups under the Downtown Phoenix, Inc banner. There was push back in 2012 but last year there was some movement to combine efforts:

http://downtowndevil.com/2014/01/29/54000/downtown-phoenix-partnetship-downtown-phoenix-inc-combine-to-provide-services-as-boundaries-expand/

However, if the new organization had citywide support and funding it might be a more enticing move for all organizations.

CopperPoint Mutual was named something different recently. The former name is on the tip of my tongue but I just can't recall. They were associated with the State of Arizona in some way.

[soleri]

The good news is that Phoenix has finally run out of alternatives to stark, unforgiving reality. The horror show is complete - the monster won. The bad news is that puffery and cheerleading will be called on, yet again, to lead the counterattack. The darkest hour is just before the latest press release.

I saw a few things last week that suggested "hope" without quite crossing over into optimism. Central Phoenix still has a ghost-town look but that also means cheap rents. Big Money wants to be elsewhere, which means small-scale entrepreneurs, if they exist, can incubate new economic activity where major firms once roosted. There's not much if any of that coolness factor the creative class loves, but some eye-squinting is forgivable. Paradoxically, the central city's underdog story is a compelling counter-narrative to the soullessness of the suburbs. There's no reason to hide one's hope: if the region has any future, it's not going to be in stage-four sprawl. It's going to be in a rediscovered core.

Still, Phoenix is a profoundly star-crossed city. It has few assets to leverage in this "comeback". It still carries the burden of international bad press (see: Joe Arpaio). It's hamstrung by parasitical suburbs. In an era of emerging climate catastrophe, it's hogtied and prostrate in one of the hottest places on Earth. You don't wish stuff like this away unless there's nothing left to do except whistling while you stroll by graveyards.

[LeftCoastDood]

St. Edwards University in Austin is looking for a an AZ location. It would be nice if there was one effective org that could reach out to them and get them downtown. Or say, in a new building at Central and Indian School.

[Sanjeev Ramchandra]

Phoenix did manage to snag Christine Mackay from Chandler as the new Director of Economic and Community Development. She is widely respected for her success during her tenure as Chandler's Economic Director.

[Sanjeev Ramchandra]

There are too many Greater Phoenix business organizations: GPEC (Greater Phoenix Economic Council), GPL (Greater Phoenix Leadership), and GPCC (Greater Phoenix Chamber of Commerce). There should be some consolidation, perhaps GPEC and GPL should merge together?

Sacramento recently merged some of its business/economic groups together to form the Greater Sacramento Area Economic Council, which Barry Broome is now the CEO of after having left GPEC.

Also, why is the Phoenix Chamber of Commerce called the Greater Phoenix Chamber of Commerce? No other sizeable valley city has its Chamber of Commerce beginning with the title "Greater". Besides, there are other business organizations that address the "Greater" Phoenix part (e.g., GPEC and GPL).

[phxSUNSfan]

CopperPoint Mutual used to be SFC Arizona. They are now a private company offering services to the general public. Before 2014 they managed the state's compensation fund since 1925.

http://www.bizjournals.com/phoenix/news/2013/12/04/scf-arizona-changes-name-to.html

Downtown Phoenix has a new "tech, innovation hub" (business incubator) in the historic Luhrs City Center. This incubator looks well-funded and their business model looks solid. They will be taking applications and offer services to start-ups they choose to move into their space.

http://www.bizjournals.com/phoenix/blog/techflash/2015/01/tech-innovation-hub-planned-for-downtown-phoenixs.html

[Scott in South Austin]

Highly doubtful that a lovely liberal arts university from wierd Austin will even set foot in Arizona. We haven't heard about it in South Austin. Much ado about nothing I suspect.

[cal lash]

Meanwhile a RELIGIOUS HERO emerges?
http://www.huffingtonpost.com/2015/01/15/pope-francis-climate-change_n_6477388.html
Makes me almost feel spirtual
AMEN BROTHER

[wkg in bham]

Letting my imagination run wild: what would I do if I ran the new “Economic Development Organization” (EDO)?
What would I need to pull it off:
1. A modest budget.
2. The ear of the mayor and city council.
3. The ear of the business community – such as it is.
4. Establishment of a “Junior Chamber of Commerce” to focus on the needs of small businesses in the City of Phoenix.

What would I do? Basically two things.
1. Establish local small- scale commercial zones. These would focus on servicing a neighborhood of approximately 36 blocks. (The size is determined walkability considerations). Each zone would have what they call in Japan, a Ginza Street. This would be a 3 or 4 block long commercial street with businesses and other public buildings in either side of the street. Note that the “back half” of a block on Ginza Street would not be commercial. Ginza Street would be three lanes wide – one travel lane in each direction and a suicide lane in the middle.
a. Zoning would be relaxed in the commercial district. Pretty much anything goes.
b. The building code would be relaxed in the commercial district.
c. No parking requirements.
d. Each zone would have satellite city hall that could handle all permitting, zoning, building inspection etc.
e. Business licenses would essentially be free.
f. Each zone would have an assigned policeman and perhaps a semi-policeman on a bike to keep an eye on things.
g. A strict enforcement of vagrancy, shop lifting and other soul killing activities.
h. No chain stores – except for Arizona based chains.
i. Do what I could to make the zone a pleasantly walkable experience for residents of the zone. (shade, sidewalks, traffic calming, etc.)

2. Develop businesses based on the “import replacement” principle. That is rather than trying to develop a product of service that is new and who’s prospect of success is slim, focus on goods and services where we know there is a well established demand – one that is being supplied (or controlled) from afar. To start these would be rather small-scale operations. The obvious candidates would be:
a. Food production. Not just the raising of it but the processing, preserving and marketing also.
b. Construction materials. Would focus on materials need for rehabilitation/construction need of the zones above. Such things as windows and doors, concrete and concrete materials (for example blocks and pipe), lumber, wire, electrical components (panels, switches, fixtures, etc.), nails and screws, paint, hand tools, etc.
c. Retail: supplant national chains with local ones.
d. Banking and insurance: supplant national chains with local ones.
e. Solar energy supply. Manufacturing of the chips, panels, energy storage, power conversion equipment, etc.
f. A street-legal glorified golf cart.
As time goes along the size and complexity of the businesses developed could grow.

Here are the things I would definitely not do:
1. Actively pursue out of town businesses to establish branch operations in Phoenix. For example, it is nice to have a large Intel presence in town – but all it takes is one board meeting to have the whole thing shut down. And just how committed is Intel to the Phoenix business community?
2. Put much emphasis on software and high-tech other than to meet the needs of the established local market. This is a “me to” response to what everyone else is doing.
3. Ditto for meds, other than perhaps the specialty of gerontology.

[wkg in bham]

Interesting article here about Portland:

http://www.newgeography.com/content/004828-dr-strangelove-or-how-i-learned-to-stop-worrying-and-love-sprawl-sort

A lot, if not most, of Portland is not at all like you imagine it to be.

Here’s one from a couple of months ago – it is an interview with Portland’s mayor. Portland is much more of a blue-collar town than you might think.

http://www.urbanophile.com/2014/11/02/the-urbanophile-interview-portland-mayor-charlie-hales/

As an aside, I think Birmingham and Portland lucked out I respect that during the razzle-dazzle years both were somewhat backwaters. A lot of the pre WWII environment survived into the present.

[Phil Motta]

Poor GPEC. It was such a good idea. But, it was evident it had lost its way when it appointed Mike Bidwill chairman of the organization! Not to pin the sin of the father on the son, but this fellow owns the Cardinals, the team that jerked Phoenix out of the NFL, embarrassing and downgrading the entire metropolitan area. The Bidwills made a statement to the country and the world that Phoenix, the 11th biggest metro in America, did not deserve to stand shoulder to shoulder with its peers like Seattle, Atlanta and Boston. That Phoenix didn't belong. Bidwill and his dad inflicted the single most harmful injury to to Central Arizona's economic development brand ever. And GPEC, of all organizations, rewards this guy by making him chairman! Had he concurrently changed the name of his team back to the Phoenix Cardinals, his contribution would have been massive and we might rightly have erected a small monument to him for his contribution to GPEC's effort. But, he was just another "Arizona" guy, fighting GPEC by eschewing the very brand and overtly calling attention to Phoenix's apparent inadequacy as a major world urban center, despite its 4.7 million people. People like Bidwill, the geniuses in Glendale city government and all the "Valley" and "Arizona" people are either consciously or inadvertently working for the enemy.

[cal Lash]

Follow the History back and the money forward.
Al

[soleri]

wkg, it's true that outside the central core, much of Portland looks kinda dumpy. Fortunately, there are hippies and other "creatives" tilling those fields, making the city interesting in ways that yuppies cannot. The city has a great housing stock that has mostly been renovated. The more modest houses are now getting their makeovers. I biked up to a neighborhood like that this afternoon, visiting a Phoenix exile who once lived in a Will Bruder-designed renovation in Sunview Estates, a central Phoenix neighborhood. 12 years ago, she bought a little Tudoresque number in the Portland neighborhood called Beaumont, which is okay but hardly fashionable. There's a commercial district close by where she plans to open a shop selling some hand-sewn items in a few weeks. The retail district is fairly tight but it suffers from too much new architecture that is mediocre. Some of her neighbors, too, seem a bit too indifferent to good design.

Portland is far from perfect but it is, as near as I can tell, improving everywhere within its city limits. Phoenix, too, does have some neighborhoods with good if modest vintage houses. Coronado, Garfield, Avalon, Fairview, Pierson Place, et al, come to mind and they have improved. But they can't lift the city very far because they lack the neighborhood retail districts that make Portland's neigbhorhoods so special. Worse, they're stranded in a city relentlessly divided by major traffic arteries. What Phoenix has in its urban planning toolkit are things like speed bumps, pedestrian crossing signals, and an active historic preservation office. Of all the things we discuss here, there's nothing more fundamental to the Phoenix Problem than a lack of good bones.

The Phoenix Problem is holistic. A weak downtown means a weak midtown and uptown, which then means weak schools and inadequate retail in the central city, which translates to few vital neighborhoods and very weak mystique. Light rail is apparently not going to fix this. The Problem is too systemic for the few remedies urban planners might have.

You can't fake value. It's why antique lamp posts and park benches look so forlorn in downtown Phoenix. People know it's a scam to take your eyes off the empty sidewalks and multiple dead zones.

I live in a neighborhood called Sullivan's Gulch. It has some gorgeous pre-war houses that middle-class American cherished back in the day. In the 1960s, many were torn down in order to build boxy apartment buildings that are common everywhere in this country, including Phoenix. I used to hate them but now I appreciate the fact that they house a lot more people than the beautiful old houses did. They're still ugly but the neighborhood wasn't destroyed by them. In Phoenix, the neighborhoods were too weak to withstand this low-value invasion. The old neighborhoods, many near downtown, simply collapsed. That's why there are no real urban neighborhoods in Phoenix, and in turn, you understand why Phoenix is struggling. It's why economic development is all uphill there. The city looks unloved in its particulars. That's the most damning thing you can say about any city.

[wkg in bham]

Soleri: you raise many interesting points. Don’t get the idea that I thought the referenced article was a slam on Portland. To the contrary, I think they point to the idea of a real city. My comment about Portland being much more of blue-collar city than you might think is actually a compliment.

Re: “much of Portland looks kinda dumpy”: well a lot of Portlanders are blue collar working class type folks. Their neighborhoods are going to reflect their means and tastes. That’s OK. As long as there aren’t burned out, abandoned houses – it’s all right. A true city needs to be able to accommodate a wide spectrum.

Re: “hippies and other “creative” tilling those fields, making the city interesting in ways that yuppies cannot”. Exactly. These seat-of-the-pants enterprises may be the most interesting in the city.

Re: “she plans to open a shop selling hand-sewn items in a few weeks”: This could only be done in a transitional neighborhood. The “dumpy” areas of town may be as important to the vitality of city as the prestige neighborhoods.

Re: “too much modern architecture that is mediocre”: See above. On the other hand much of the architecture in good parts of town sucks. I don’t think current architects are capable of designing a beautiful building. Either they don’t know how or are philosophically adverse to the idea.

Re: “(Phoenix neighborhoods) lack the neighborhood retail districts”: This is the biggest negative that I see about Phoenix. My biggest priority would be to establish these.

[Pat]

Wkg: There are no laws against vagrancy in the United States anymore, and for very good reason.

[wkg in bham]

@Pat Re: Vagrancy. Yes, you’re right. A person shouldn’t be subject to arrest simply because they don’t have any money. One time scandal in parts of the South: blacks arrested via vagrancy to fill out the sheriff’s (hired out) labor gangs.

However, many, if not most cities, have panhandling, public drunkenness, anti-squatting, public lewdness, etc. laws to provide some level of civility on public streets. Enforcement of these laws can be rather spotty – and with good cause. A thread on this topic would be good. I think it’s pertinent to the issue of downtown vitality. It’s off topic here, so I’m going to let it go.

[cal Lash]

Vagrancy is a whole subject in it itself. "Petty crimes, broken windows" a whole extremely discriminatory subject. Work on locking up the Coke bro, the Romney pyramidist's and the rest of wall street.

[wkg in bham]

Portland in the news again. This time your usual gentrification squabble.
http://www.urbanophile.com/2015/01/19/bicycles-and-race-in-portland-by-sean-benesh/

The only reason I bring the thing up is to point out that:
1. The area involved is a mere two blocks.
2. It probably happened spontaneously.
3. Totally home grown.
This is the sort of thing Phoenix needs.

[INPHX]

wkg:

Read the article you posted about Portland. Great article; did a solid job of presenting both sides fairly (which is so rare these days).

Thanks for posting; I'll be tuning into that website in the future.

[soleri]

wkg, I've mentioned this before - the paradox of gentrification - when it comes to Portland. I'm pretty much in favor of it because a city is composed of actual things called buildings that need to be repaired and renovated. Without the economic assets in place to do that, these areas will instead decline.

The cultural part is much harder to justify. Because I've only been in Portland a short time, I'm not aware of the cost in terms of cultural identity. I probably wouldn't be in any case because I'm white. But I am aware of the tension between the haves and have-nots. I'm sympathetic to displaced hippies, for example. They created a vibe about Portland that continues to make the city world-famous. What happens when the yuppies conquer?

I am, for all my sympathy, an agent of this change. I had money to move here and live in a nice apartment, just like thousands of others wanting to enjoy a quirky city with good bones and a liberal ethos. But you can't freeze any moment in time and declare it the only valid expression of human culture. Seattle and San Francisco already went through this wrenching process. Money won and the culture flattened. We can be sad about this but we can't legislate nebulous outcomes without doing serious damage to basic freedom.

Racism is an incendiary charge but the forces gentrifying north Portland also rewarded black home-sellers with handsome premiums. Calling the buyers "racist" misses this point because it has to. Portland is a very liberal city (80% of the city voted for Obama in 2012 thus making Oregon a blue state). It's not race calling the shots here. It's money.

Can a city preserve itself in aspic, never changing except to become more of what it is ordained to be by current residents? Yes! Suburbs excel at this program. It's why the conservative argument against "liberal elites" is so ludicrous. Anyone who lives in Scottsdale or Paradise Valley knows how tenacious reactionary burghers can be.

Portland is economically dynamic and nothing changes culture faster than this phenomenon. I feel twinges of nostalgia for once-vibrant communities but I don't want to freeze a city in place for any reason. Historic preservation, yes! Cultural codes, no.

[wkg in bham]

@Soleri: I have no dog in the gentrification fight. The only reason I brought it up at all was the fact that the area in question amounted to two blocks of North Williams Avenue. My point is that you can create a vibrant commercial area in as little as two (half) blocks. Further, the city didn’t do anything or invest the first dollar in its establishment. This is what Phoenix needs to encourage. And most of the “encouragement” is doing nothing; getting out of the way.

My only thoughts on topic at all are:
1. A neighborhood is either getting better or getting worse. There’s really not much in the way of sideways. If you’ve ever owned a house (an experience I have suffered twice) you’ll soon discover that just keeping a house up (i.e. the same) is a lot of work and expense. Magnify that to a neighborhood level.
2. Is the issue at hand in Portland really about gentrification? The changes proposed by the city are to North Williams Avenue – not just the two blocks in question. This just looks like surfacing of long simmering racial resentments.
3. This case seems to be different than gentrification spats on other places (e.g. Brooklyn N.Y.). There is a plethora of affordable housing in the city (see previous post). No one is being squeezed out of the city.
4. I have mixed feelings about historic preservation. I to have a fondness for older buildings; for one thing, they can actually be beautiful. Something that’s hard to say about most of the crap built between 1950 and 2000. I don’t know if it’s just Birmingham, but in the last ten or fifteen years or so some very nice buildings have been built. A lot of crap too. But that’s probably true of all eras.
5. If you ever buy a house, make sure it is not in a (formal) historic district. Once you’re in a historic district you the approval of a body to something as simple as painting you house. Forget about replacing windows and doors; you’ll be talking about custom built ones at an enormous cost.
6. Old buildings and city codes are at war with each other. Doing the simplest thing can be a nightmare. Touch something and you now need to bring it up to current code. Let’s not even talk about asbestos or lead paint. This is why in my previous post I recommended that certain zone be declared a cease-fire zone with regard to zoning and building codes.