DOWNTOWN ON THE UPSWING
City’s hub a far cry from dusty desertion of 30 years ago
More construction cranes now dot downtown Phoenix’s skyline than ever.
The area’s population is surging to record levels, as is the number of employers bringing new jobs to the core of the nation’s fifth-largest city.
More than 70,000 workers, residents, tourists and students visit downtown Phoenix each day. The area’s many new restaurants are filling up at breakfast, lunch and dinner, and trendy bars and shops are drawing people from Valley suburbs downtown at night and on weekends.
The downtown Phoenix of today is nearly unrecognizable from the downtown of 30 years ago. And the evolution has required tremendous investment — from taxpayers, urban planners, businesses, university leaders and sports teams.
“Downtown Phoenix today shows the most progress it has in at least 40 years,” said Jon Talton, a Phoenix historian and former Arizona Republic columnist who grew up in downtown. “By Phoenix standards, what’s happening in downtown is nothing short of a revolution.”
In the early 1990s, downtown Phoenix was like a ghost town at night and on weekends.
Workers in the area jumped into their cars and left at quitting time. There were few places to live in Phoenix’s core and little shopping or restaurants to keep people around after work.
The thriving downtown Phoenix of the 1960s had been left barren by the exodus to Valley suburbs in the 1970s. Downtown Phoenix had the cheapest parking of any major city in the early 1990s because there were so many vacant dirt lots in the area. The area’s comeback started when the Phoenix Suns and the Arizona Diamondbacks made downtown Phoenix their home. Then Valley leaders and voters decided to back bonds that created a bigger convention center, a major hotel and a partnership for Arizona State University to grow rapidly in the area.
Light rail started its trek through downtown in 2008, bringing more visitors and eventually development. The city hasn’t slowed its pace since. And local leaders say there’s much more to come.
“Downtown Phoenix’s increased density with new development, and so many more people on the street make the area so much more alive,” said Cindy Dach, a resident and business owner in the area who also co-owns Changing Hands bookstore.
Comeback story
Now, the area spanning from Seventh Avenue to Seventh Street between McDowell Road and Lincoln Street is in the midst of a building boom. New apartments, condominiums, offices, restaurants and stores — including downtown’s first major grocery — were recently completed, are underway or are planned.
The 100-year-old downtown neighborhood — Roosevelt Row — ranks as one of the most popular in the U.S. Renovations of historic buildings into cool offices, retail and homes are happening across the city’s core.
There’s a growing ASU campus with about 12,000 students who demand housing, food and entertainment options while taking classes and working on research and service projects in the community.
And companies are relocating from other parts of the Valley or country to downtown Phoenix to be near workers and ASU.
“If you would have asked me five years ago about ... downtown Phoenix, no one would come downtown,” said Brenda Schmidt, CEO of Solera Health, which quadrupled its office space with a move to downtown in 2017. “But the evolution of the economy and the addition of resources in downtown have been phenomenal.”
More than $5.5 billion in public and private money has been spent on transportation, development, education, sports, technology and art projects in downtown Phoenix since 2005, according to Downtown Phoenix Inc.
❚ Since 1995, the number of jobs in downtown Phoenix has nearly tripled to 66,000, according to U.S. Census Bureau and Arizona employment data. More than 280 tech firms are now located in central Phoenix, and the once-dying warehouse district is now home to several of those firms and more than 3,000 employees.
❚ The area’s population, including the growing number of ASU students, is nearing 13,000 and projected to reach almost 22,000 by 2022. That’s up from fewer than 2,000 downtown Phoenix residents in the mid-1990s.
❚ Cheap dirt parking lots on vacant parcels creating mini dust storms have all but disappeared in downtown Phoenix. More than 100 parcels in the area now house new developments, according to an analysis by The Republic.
“Phoenix never had an urban downtown,” said David Krietor, CEO of Downtown Phoenix Inc., who has been involved in the area’s redevelopment for 30 years. “In another five to seven years, downtown Phoenix will evolve to the level of a downtown Denver, Seattle or San Diego. It’s very cool to see it finally happening.”
Why? Experts say it’s a mix of two things: a demand for high-quality development and good timing.
“You’ve got this massive push across the country where people are moving back into the urban core and deciding they want to be more connected,” Phoenix Economic Development Director Christine Mackay said.
“Downtown Phoenix’s increased density with new development, and so many more people on the street make the area so much more alive.” Cindy Dach
Area resident and business owner
Why did downtown die?
Downtown Phoenix wasn’t always the deserted and decaying ghost town people remember from the ’80s and ’90s.
Like with all big U.S. cities, Phoenix’s downtown began as the hub of activity for the city. Throughout most of the 20th century, almost all of the city’s employment, entertainment and housing was contained to downtown Phoenix.
But urban sprawl pushed people and jobs into new, bustling suburbs.
“The suburban markets got freeways, and they were hungry — and they had the workforce. People had really flown out of living in the central city and had flown out to the suburbs,” Mackay said.
At the same time, Phoenix allowed high-rise development — typically reserved for downtowns — in other parts of the city, such as the 24th Street and Camelback Road corridor.
“There was a true battle going on as to where downtown should be,” former Phoenix Mayor Terry Goddard said.
Longtime Phoenix City Manager Frank Fairbanks, who retired in 2009, said Goddard was the first mayor to fully commit to the revitalization of downtown.
During Goddard’s tenure from 1984 to 1990, the city brought in experts to try to find “the magic answer, the silver bullet” that would bring the downtown to its former glory.
“We got the best expertise we could find, but I’m not sure anybody really had a corner on the knowledge,” Fairbanks said.
It took a freeway, a big mixed-use shopping center and professional sports to launch the start of downtown Phoenix’s comeback.
The last section of Interstate 10 was completed in downtown Phoenix in 1990. The freeway cost the area some historic homes, but also brought Margaret T. Hance Park and easier access to central Phoenix.
Voters approved the first significant downtown spending initiative — more than $1 billion in bonds — in 1988, which led to the development of the 20-story City Hall building, the Arizona Science Center, Burton Barr Central Library and other cultural assets throughout the ’90s.
The Arizona Center, the first major mixed-use development with shopping and restaurants to go up in downtown Phoenix for decades, opened in 1990. Many thought downtown was poised to grow again. But it still needed more help.
Jerry Colangelo, the Suns general manager at the time, became a big proponent for the area. When he brought the Arizona Diamondbacks, the state’s first major league baseball team, to downtown Phoenix in 1998, the games started drawing more visitors.
Colangelo led the Downtown Phoenix Partnership, a group formed to forge the area’s rebirth.
The area’s first new high-rise to go up in a decade went up at the new Collier Center, a few blocks from the sports venues, in 2000. And a few new restaurants opened. But stores were closing at the Arizona Center.
“Despite a lot of efforts a lot of commitment and a lot of spending over the years, we didn’t have a whole lot of success,” Fairbanks said.
But three key public investments near the turn of the century gave way to the city’s first mass-transit system, an expanded convention center and, eventually, a university campus that would forever alter the landscape of downtown.
Light rail: A story of perseverance
Light rail, which now connects Mesa to northwest Phoenix by way of downtown, was not an easy sell.
Voters turned it down three times between 1989 and 1997. The third vote lost by only 122 votes.
“There were some tough times,” Fairbanks said. “It doesn’t feel good to lose.”
But the city regrouped one final time and secured overwhelming voter approval for light rail and other public transportation needs in 2000 with a 0.4 percent sales-tax increase.
It was Phoenix’s last Republican mayor, Skip Rimsza, who championed the light-rail project and ushered it into fruition.
“What light rail does for an urban area is it gives you one amenity that is completely unavailable in the suburbs,” Rimsza said.
Downtown Phoenix’s first high-rise housing boom spurred partly by light rail started in 2005. But by the time the trains starting rolling through downtown at the end of 2008, the housing market was crashing.
Many of the housing projects in downtown and other parts of the Valley sat half-built for a while. But experts credit the mass transit system with driving development and luring universities downtown.
ASU President Michael Crow said light rail was important for the university’s decision to come downtown because it provided a backbone. The rail connects the downtown and Tempe campuses. Soon, it will link them with a future ASU campus in downtown Mesa.
ASU students don’t have to be students on just one campus — they can take classes on multiple campuses and move easily among them, Crow said.
Bringing more visitors downtown
In 2001, voters approved a $600 million project that nearly tripled the size of the Phoenix Convention Center.
The Convention Center finally had the capacity to host major conferences and events — but downtown only had 1,300 hotel rooms, which was not enough to accommodate the mass influx of visitors.
The Phoenix City Council took a risky bet and invested $350 million to build the 1,000-room Sheraton Grand Phoenix at Second and Taylor streets.
The hotel opening in 2008 coincided with the Great Recession. Phoenix hotels were hit particularly hard by the economic downturn, which forced the city to spend $47 million to cover operating losses.
The Phoenix City Council sold the Sheraton earlier this year to Marriott International for $255 million — about $50 million less than what the city owes on it. The city also threw in a $97 million tax break and $13 million to use for repairs.
The city has been widely criticized for the hotel’s losses, but some say it was necessary to spur other hotel business.
“The investment in the hotel helped get downtown kick-started,” said Krietor, the Downtown Phoenix Inc. CEO.
Today, downtown has almost 4,000 hotel rooms, with more on the way. More than 1 million conventioneers attend events at the Convention Center each year.
ASU: The secret ingredient
When Crow took over the university president job in 2002, downtown Phoenix was sleepy.
“It didn’t strike me as a high-energy, economically vital center,” Crow said.
Crow’s grand vision for ASU wasn’t a place with ivy-covered walls, set off from the community. He wanted the university to be a force, and downtown offered a way for the university to connect — downtown has courts, news media organizations, business towers, law firms and sports venues.
It was important for the city’s economic center to have a university presence, Crow thought, both for the city and for the students.
Shortly after former Mayor Phil Gordon was elected in 2003, he met privately with Crow at the Good Egg at Central Avenue and Camelback Road.
Phoenix was the largest city in the United States without a university campus, and the city was desperate for a signature downtown project.
The men sketched out a grand vision for an ASU campus on the back of a napkin. The drawing became the first blueprint for what was to come. (It’s unknown what became of the napkin.)
“(Our staffs) said they’d never let us meet alone again,” Gordon joked.
In 2006, voters approved $878 million in bonds, about a quarter of which went toward the development of a downtown ASU campus.
The arrangement called for the city to pay for buildings through bonds, then ownership would switch to the university after the bonds were paid off 25 years later. That would give ASU a permanent presence in downtown.
At the time, the Goldwater Institute, a libertarian think tank, and the Arizona Tax Research Association, a tax watchdog group, criticized the bond, saying it wouldn’t deliver on its lofty promises. The groups also saw funding universities as a state investment, not something local government should finance.
But the measure passed easily, and the university and the city started developing immediately. Classes started the next year, operating out of existing vacant buildings while new facilities were under construction.
The first batch of students were housed in an old motel, which has since been demolished and replaced with ASU’s Sandra Day O’Connor School of Law.
In the 12 years since the ballot proposal, ASU has expanded its downtown campus to include a signature journalism school, a top-ranked public service college, a law school and nursing programs.
There is more on the way.
All of Phoenix’s past leaders credit ASU as the most important factor that drove life back into downtown, but Fairbanks said that without all the other investments in the decades preceding ASU’s entrance — the sports venues, the light rail, the symphony — the university would have never taken a chance on downtown.
“It was almost a jigsaw puzzle, and in a way, that ASU piece was the final piece,” Fairbanks said.
ASU spurs development
Crow doesn’t think downtown’s revitalization would have happened without public money spurring private developers to take notice.
The resurgence may have happened without ASU, he said, but more slowly.
“If you build a cake and there’s no sugar, yeah, it looks like a cake, but it doesn’t taste very good. So I think that we are an essential ingredient to the success of downtown Phoenix,” he said.
ASU students became a key demographic for apartment builders. The downtown campus has just one dorm, Taylor Place, and it overflowed this year. But students often sign leases in nearby apartment complexes, willing to pay higher downtown rents for the proximity to campus.
“The universities ... kind of started the apartments that came and the dorms that started to come to support the students,” Mackay said.
The university plans to move more programs, such as the Thunderbird School of Global Management, downtown. And there’s another dorm in the works, this one focused on innovation and entrepreneurship.
“What’s going on with ASU and downtown Phoenix is nothing short of phenomenal,” said Tom Murphy, a senior fellow with the Washington, D.C.based Urban Land Institute and former
mayor of Pittsburgh. “The partnership between the school and city is rewriting the way downtowns redevelop.”
Crow now sees a vibrant downtown, one worth biking about 14 miles from his house to get to the farmers market. But he said ASU is only about halfway to its goal in downtown Phoenix.
“We want to have the greatest journalism school that humans have ever built,” he said. “We want to have a nursing college that’s, like, unbelievable . ... All in all, we’re about 50 percent of the way towards being this really, really powerful, the best of the best of the best urban campuses in the country.”
Not just ASU in downtown
Though ASU’s presence is much larger, the University of Arizona and Northern Arizona University also have a spot in downtown Phoenix. They are on the Biomedical Campus at Seventh and Van Buren streets, which is also city-owned land.
The idea of bringing a medical school to downtown made sense since so many UA med students do their residencies in Phoenix already, former UA President Peter Likins said.
But it wasn’t easy. The schools are territorial, and the UA moving into ASU territory took maneuvering.
At one point, Likins, Crow and Gary Stuart, then on the Arizona Board of Regents, spent three days on a fishing boat named the Sun Devil on the border between Alaska and Canada, trying to hammer out what the biomedical campus should look like.
They didn’t catch much.
“Like two or three fish. And a medical school,” Likins said.
The campus was greenlighted in 2004 and has expanded several times since then. But at the time Likins left the UA in 2006, he still wasn’t sure if the biomedical campus would be the “greatest success of my presidency or the greatest failure.”
Now, 14 years after the idea was finalized, “I think it was an extraordinary success. The kind of extraordinary success that no single individual, no single entity, can accomplish unilaterally,” Likins said.
Cranes on many corners
Downtown Phoenix is no longer a ghost town at night or on weekends.
The area is starting to thrive with new restaurants, bars, hotels and residents. New development is happening on almost every street in the district.
Apartments are currently the most plentiful new development in downtown. Almost 8,000 apartments were recently completed, are under construction or are planned for downtown Phoenix.
Hundreds of condominiums are also being added to the area.
“By far, the most important factor changing downtown Phoenix now is the demographic shift,” said Krietor, with Downtown Phoenix Inc. “Millennials and Baby Boomers are repopulating central Phoenix.”
More than 200 restaurants now dot downtown, 100 more than in 2008. In the mid-1990s, there were only a few dozen.
Office buildings spanning from the warehouse district to Roosevelt Square are also under construction.
Retail is following the rooftops. Downtown Phoenix’s first major grocery to open in decades — a Fry’s that’s part of RED Development’s Block 23 project — is set to open next year.
RED’s 1.2 million-square-foot CityScape development, which opened in 2010, brought the first new major retail space to downtown since the Arizona Center opened 20 years before.
“It will be nice to no longer live in a food desert area (with the opening of Fry’s),” said Aysia Williams, who bought a house in the downtown area’s Woodland Historic District earlier this year. “But we are concerned with the amount of apartment complexes going up.”
Downtown concerns
Like with many of the Valley’s building booms, there are concerns that downtown Phoenix’s growth is too much, too fast. Others see the area as playing catch-up.
Mackay said that with the exception of a couple of bold projects that took a risk by building during the recession, downtown went almost a decade with no new residential projects.
“Our residential is playing catch-up,” she said.
But some residents are being left behind. Rising home values mean not everyone can now afford to live downtown, even if they work or go to school there.
“There is not enough affordable housing in the Valley, and especially downtown Phoenix,” said Patricia Garcia Duarte, the CEO of housing nonprofit Trellis. “The area needs the entire spectrum of housing.”
Home prices in neighborhoods in and around downtown Phoenix, including Roosevelt, Garfield and Coronado, have soared over the past few years.
New condominiums in the area carry price tags that can climb above $1 million.
And the area’s many new apartments are all luxury complexes, except for one. The average apartment rent in downtown Phoenix is currently $1,600, more than the average Valley mortgage payments.
Dach, the Roosevelt District resident and business owner, said downtown Phoenix won’t be diverse or really continue to evolve if housing for the people who work in the area’s shops, bars and restaurants isn’t made available.
Phoenix Housing Director Cindy Stotler said downtown Phoenix has 1,001 affordable units and 63 more under construction — which is more than most people realize.
The City Council is putting pressure on some developers to include “workforce housing” in its projects, but critics say the city has a long way to go before downtown is affordable for all income levels.
Gordon said his biggest disappointment in downtown development is the lack of diversity of housing style.
He said it may be time to stop incentivizing apartment complexes and instead give incentives to homebuilders to create more single-family housing in the core.
Goddard said many of the issues he faced as mayor in the 80s are still problems now. Downtown still needs to be more walkable, offer more shade, and expand cultural, entertainment and dining options.
“The more things change, the more they stay the same,” Goddard said, “But we are in a much better place now then we were.”
Downtown Phoenix made the cut to be one of six U.S. areas featured in a recent Brookings Institution report on “(Re)creating Walking Urban Places.”
But the report notes Phoenix’s future is “still fragile,” citing high poverty levels and low college attainment. Throwing a university campus into downtown, though, can help kids see a future in college, the report noted.
“The economic impact of bringing university education to downtown Phoenix will ultimately not be measured in job or real estate dollars, but in the generational impact of increasing higher education rates and training a diverse and talented workforce for a knowledge-driven, rather than consumptiondriven, Arizona economy,” the report concluded.
Tracy Hadden Loh, one of the report’s authors and a data scientist at the Center for Real Estate and Urban Analysis at the George Washington University School of Business, said Phoenix’s revitalization was notable for how quickly it happened and how the downtown area outperformed the region during the recession.
The agreement between the city and the university is one of a kind, she said. Many times, universities build based on state, not city, investment.
“This arrangement in Phoenix is extraordinary. I’ve never seen another one like it,” she said.
There is a tangible fear inside Phoenix City Hall that downtown could backslide once again — that people will decide to move back to the suburbs and take the high-paying jobs with them.
“If we don’t keep our eye on the ball, it will absolutely happen again,” Mackay said.
She said the city must keep adding housing to the downtown core and continue to add the retail and restaurant components that people want near their homes.
Downtown will soon need a hardware store and other stores that sell conveniences, downtown proponents said.
Crow and Wellington “Duke” Reiter, a senior adviser to the president at ASU, want a downtown that extends from the downtown core to the Phoenix Art Museum and Heard Museum on Central Avenue and McDowell Road.
The plan, dubbed “the Central Idea,” calls for activities and engagement opportunities along the full span from the core to the museums. It could include restaurants, retail, exhibitions, civic events and green space.
“When people can spend a day doing all kinds of things, never having gotten in a car, and say, ‘You’ve got to go to Phoenix, you have to see what’s going on there’ … I think we’ll really be getting somewhere,” Reiter said.
And while that may seem like a lofty goal, a flourishing downtown Phoenix campus once was, too.
The Central Idea would bump Phoenix from a great regional city to a great national city, Crow said. It would connect all the main pieces of downtown Phoenix’s success — the campus, the museums, the arts district and the government buildings.
“We think downtown Phoenix has unbelievable potential,” Crow said.
Mackay stressed that the city cannot rest on its laurels, but must instead continue to grow and change with the evolving needs and desires of the community.
“We have got to always be reinventing ourselves, because if you don’t think every other market is continually reinventing themselves, you’ve got another thing coming,” Mackay said.