KNAU and Arizona News
12:10 pm
Thu April 19, 2012

Flagstaff mayoral race centers on economic development, budget

It seems like a condominium complex just south of the Aspen Place shopping center -- is going up overnight.

But the truth is, this development has been like a long, bad dream for the City of Flagstaff.

Just five years ago, this 40-acre spot was an abandoned industrial zone – a black eye on the edge of the city’s downtown.

To get this project going, the City offered a developer tax incentives and bond guarantees.

But the developer defaulted on those 19 million dollars in bond guarantees, leaving the city holding the bag.

The story ended well.

But Mayoral candidate Jerry Nabours says the City was just plain lucky to have escaped from the project bruised and not broken.

Ballots are going out today for the City of Flagstaff’s mayor and City Council election, and voters will have about three weeks to evaluate where the candidates stand on many issues.

The mayoral candidates have focused much of their campaigns on one issue: what role, if any, city government should play in stimulating economic growth.

 “The city is getting itself in the development business, and frankly the city is a very poor developer. That’s not its business,” Nabours says.

Nabours knows something about the development business. He’s a retired real-estate attorney.

And he points to other city-driven developments – the auto mall and an affordable housing project near Schultz Pass Road – as detrimental to the city’s fiscal health.

 “That is the City trying to manipulate business and the economy, and a city cannot do that,” he says.   

Mayoral candidate Al White has sat on the City Council for the last 12 years. And he ignores the bruises the city got over the Aspen Place project.

In the end, he points out, Flagstaff managed to sell the shopping center and adjacent land for the amount owed on the bonds it held.     

“Now what you have in what used to be a brownfield that needed an environmental clean-up, is a thriving in-fill project for both housing and commercial enterprises,” White says. “It’s a success story, not a failure. You have to measure these investments over time.”

Today, new shops are opening at Aspen Place and 580 condominiums are being built. A second apartment project is planned in the near future.  

But Nabours contends that Aspen Place and other projects are far afield of the city’s mission.

That mission, he says, is to provide core services, such as police and fire protection.

He says the city’s attempts to lure business here have cost the city money.

And, says Nabours, they’ve come at the expense of these city services, including the Parks and Recreation Department.

Yet, White says without sales and property tax revenue from new businesses, core services would suffer, or taxpayers would be forced to pay more.

“Part of our responsibility, I believe, is to provide a vibrant economy because we are so reliant on sales tax to provide those core services,” he says.

That is a position the League of Arizona Cities and Towns supports.

Director Ken Strobeck says most mayors in Arizona believe cities should be actively involved in stimulating the local economy.

 “The trend toward public-private partnerships and toward cities being involved, particularly on the infrastructure side, of assisting the location of job-producing companies, is something we’re seeing more and more of,” Strobeck says.

But Nabours rejects that approach. He says more businesses would move here, but City Hall erects too many roadblocks.

He uses the remodeling experience of a local business as a case in point.

 “They had to get a certification that there was no asbestos. That cost about a thousand bucks. Then a year later, they wanted to do some more remodeling, so they went down to the City, and they said, you have to get an asbestos inspection,” Nabours says.  

But the business had already done an inspection a year before and there was no asbestos.

White agrees there is room for improvement.

He says the City recently adopted new rules designed to make business interactions with the City less frustrating.

Yet, he says if he had to do it again, he would make the same decisions when it comes to the city’s role in economic growth.

Those decisions, he says, have helped Flagstaff recover from a nationwide recession must faster.

But Nabours says he is not convinced that a recovery is around the corner.

He likens the city’s budget to a sinking ship with a bunch of spend-aholic sailors at the helm.

“I don’t want to see our city sink,” he says. “There’s some hard work that needs to be done on the budget, and there’s going to have to be some new look at what the city should be involved in and what the city can afford and cannot afford.”

Beginning this week, voters can decide which approach they favor as they cast their ballots by mail in the race for Flagstaff’s mayor.