Pima County

Sonoran Desert Conservation Plan, Pima County’s ambitious but flawed scheme

by Jonathan DuHamel on Sep. 06, 2011

Pima County’s Sonoran Desert Conservation Plan (SDCP) has been touted as one of the best and most comprehensive habitat conservation plans in the country. Planning began in 1998 in response to the 1997 listing of the Cactus Ferruginous pygmy owl as an endangered species. The owl was removed from the endangered species list in 2006 because the listing was found to be based on flawed science.

The legal idea behind SDCP was to obtain dispensation from the U.S. Fish & Wildlife Service (FWS) in the form of an Incidental Take Permit under section 10 of the Endangered Species Act. The idea was to allow county public works to proceed even if they would incidentally harm some endangered species. To do that the County had to specify which species it was going to protect and how it would do so.

According to FWS, both federally listed and unlisted species can be covered in the incidental take permit acquired through a Habitat Conservation Plan (HCP) if issuance criteria are met. The three principal criteria are: 1) that impacts are mitigated to the maximum extend practicable; 2) sufficient funding (taxpayer dollars to pay for land acquisition and monitoring for the life of the permit) is assured up front; and 3) the issuance of the permit won’t jeopardize the species. Note that all species named in the HCP will be treated by FWS as if they were listed as endangered. The County’s purchase of local ranches is part of its mitigation scheme to satisfy FWS. In reality, the plan gives the County tighter control over use of private land.

The County’s plan has had a long gestation period, much longer than normal for habitat conservation plans in general. Finally, early this year the County submitted its plan to FWS who expect to put it out for public comment by the end of this month.

I was involved in the early stages of SDCP. For 5 years, beginning in 1998, I was a member of a Citizen Steering Committee that was formed to address concerns of various stakeholders (and satisfy a FWS requirement for public input). During that time, I attended many meetings and collected 35 CDs full of reports and other information. You can read most of the reports at the County’s dedicated website: http://www.pima.gov/cmo/sdcp/.

The plan could have been relatively simple and deal with only those endangered species likely to be affected by growth in the County. If it had done that, the plan could be in place now. However, Pima County has loftier ideas: “The biological goal of the Sonoran Desert Conservation Plan is to ensure the long-term survival of the full spectrum of plants and animals that are indigenous to Pima County through maintaining or improving the habitat conditions and ecosystem functions necessary for their survival.”

In my opinion, SDCP is based on flawed science. I am not alone in that opinion. The Town of Marana and City of Tucson both refused to become parties to SDCP because of their concern with the scientific justifications.

Besides the Citizen Steering Committee, the County recruited biologists, both private and university professors, to form a Science and Technical Advisory Team (STAT). In March 2001 STAT produced its major report entitled “Priority Vulnerable Species: Analysis & Review of Species Proposed for Coverage by the Multiple-Species Conservation Plan.” I will refer to that report as PVS.

At a public meeting on March 22, 2001, Dr. William Shaw, head of the county’s Science and Technical Advisory Team said of the team’s data, “biological knowledge is woefully inadequate,” a sentiment echoed by each speaker, and by a peer review committee which evaluated STAT’s work.

Nevertheless, PVS provided the basis for classifying county land into several conservation level categories which would greatly impact private land use:

The multispecies conservation plan and Permit will affect use of private land because it mandates that: 1) Within “Important Riparian Areas” 95% of the land shall be conserved in undisturbed natural condition; 2) Within the “Biological Core” at least 80% of the land shall be conserved in undisturbed natural condition; 3) Within “Multiple-use areas” at least 66% of the land shall be conserved in undisturbed natural condition; 4) Within “Special Species Management Areas” at least 80% of the land shall be conserved as undisturbed natural open space; 5) Within “Critical Landscape Connections” barriers to the movement of flora and fauna should be removed.

In addition to the above classifications, SDCP proposes to have “Recovery Areas,” “Recovery Contribution Areas,” and “Supplementary Population Management Areas.” For lands within the Conservation Lands System, the county will require “rigorous site analysis” prior to development. SDCP also proposes to restore riparian areas by planting hundreds of trees which the county estimates will use up to 2.6 billion gallons of water annually. In subsequent iterations of the plan, these restriction percentages may have changed or become obfuscated, but they have been largely incorporated into the County Comprehensive plan.

The land classification system was put together based on opinion and computer modeling. Here is how they did it.

The STAT team didn’t do any actual field work or checking of ground truth, they instead resorted to data mining. One problem with data mining, i.e., using large data sets from other studies, is that the data are rarely, if ever, verified for accuracy. Another problem is that data mining lends itself to selective extraction of data that might not be representative of the original study.

The methodology, as described in PVS:

Habitat distributions for many of the vulnerable species are poorly known and published accounts of known populations are few; therefore, habitat modeling based on environmental characteristics was conducted in order to provide the most complete, scientifically based depiction of species habitat. Recognizing the critical knowledge of many Pima County biologists, these ‘expert reviewers’ were asked to be part of the modeling process. Reviewers identified key environmental variables describing habitat and helped Geographic Information Systems (GIS) analysts score environmental characteristics for each species. Analysts then built GIS models based on these environmental parameters resulting in maps of high, medium, and low potential habitat. Biologists were then asked to review habitat maps and revise model parameters if necessary. This iterative process of GIS analysis and biological review resulted in refined models that more closely represented vulnerable species habitat.

Variables used in the models are vegetation/land cover, streams, shallow groundwater, springs, elevation, slope, aspect, land form, cave/mine potential, geology, and soils. A total of 115 characteristics for these 15 variables were scored as potential habitat for each species. Characteristics of these variables are well-understood for some species (such as a fish requiring a perennial stream), but many are not. In some cases, a ‘best guess’ was recorded in the table cells of the species-environment matrix. All scores have been reviewed and revised by species experts.”

County biologists based their map overlays, their GIS data layers, on the opinions of 13 biologists and upon a fourth data set, the federal government’s GAP program which uses satellite imagery to, among other things, map vegetation cover. The assumption is that vegetation type can be accurately associated with species requirements and therefore species habitat.

GAP, run by the U.S. Geological Survey, is an ambitious program. But, it is instructive to note some of the comments from those involved. According to GAP Analysis Bulletin No. 8 (a U.S.G.S. publication), “what was lacking [in GAP], and continues to be, is the information on species associations with those land characteristics.”

The GAP program ran into problems when it attempted to validate the model by gathering factual field data such as finding the critters and then mapping land characteristics where the critters actually occur.

From the Bulletin:”GAP researchers have generally believed that sampling for species occurrence has been biased and grossly incomplete; therefore, the points used in the quantitative approach may give incomplete or biased distributions.”

In other words, the limited real data collected do not support the model very well. There often was a big difference between modeled potential habitat and actual habitat.

The PVS report was the result of the biologists’ best guesses, “woefully inadequate” real data, and computer manipulations. And the results showed it. The report had many conflicting statements and some very strange recommendations.

For instance, their findings for the Lesser long-nosed bat:

“The lesser long-nosed bat requires 5,320 acres for a home range. The minimum patch size for 250 pairs is approximately 1,330,000 acres. The minimum number of patches for this species in the reserve system is 10; therefore, the population viability goal is to conserve at least 13,300,000 acres in order to maintain a viable population.”

So, county scientists, after applying “the best available science,” recommended preservation of 13,300,000 acres in Pima County for this one species. Trouble is, the total area of the County is 5.9 million acres. There is another problem with this recommendation. According to the report, “estimates of populations in maternity roosts range from 200 to 130,000 (USFWS 1995).” If we multiply just one large roost worth of bats, say 130,000, by the 5,320 acres which county scientists claim each bat needs for a home range, we get a total home range requirement of 692 million acres, or nearly 10 times the total area of Arizona. These errors derive, of course, from rote calculation of the subjective habitat scoring system in a computer model which has, apparently, not been checked for ground truth, or even common sense.

I did point out these errors to county officials. As far as I can tell, the county did not significantly modify the land classification system. However, I noticed that in subsequent reports, they did not publish numbers anymore, only general, ambiguous statements.

The habitat conservation plan and Section 10 Incidental Take Permit will apply only to unincorporated County land. It cannot be legally applied to land within incorporated areas, nor to federal land, nor State Trust land, nor to Indian Reservations. That leaves a highly fragmented area which in reality cannot form an integrated habitat.

Pima County has gone through the motions to obtain a permit, but the flawed scientific basis and reality of land fragmentation make the Sonoran Desert Conservation plan an empty showpiece, one this is costing, and will cost, taxpayers money and restrict use of private land.

I will recommend to FWS that they reject the application for permit.

UPDATE: The map below shows the “permit area,” the land to which SDCP applies. Notice how fragmented it is. The fragmentation makes a conservation plan very difficult to effect actual benefits. And since this is such a small part of the County, will it make much difference to species?

Land ownership in Pima County:

TUCSON – With his company’s business up and inventory at a five-year low, real-estate agent Greg Hollman said the housing market in Arizona’s second-largest metropolitan area is thriving.

“The Tucson housing market is doing well in many areas, especially properties in the lower-priced end,” he said.

But that assessment runs counter to a recent national report that branded Tucson the nation’s sickest housing market.

24/7 Wall St., a financial news and opinion website, based its analysis on vacancy rates, unemployment rates and historical median home prices. Indianapolis, Memphis, Tenn., Atlanta and Baton Rouge, La., followed Tucson on its list.

According to the report, 6.8 percent of listed homes were vacant in Tucson, a figure exceeding that of any other market ranked.

No one is arguing that Tucson’s housing market is breaking sales records. One out of every 54 housing units received a foreclosure filing between January and June, RealtyTrac reported. Home prices have dipped 34 percent over the last five years, according to the Federal Housing Finance Agency.

But Hollman, who is president of the Tucson Association of Realtors Multiple Listing Service, said the vacancy rate is an unfair measure in a place where many snowbirds have second homes.

He said using median sale price also produced misleading results because many sales of late have been low-priced homes, which pushed the median price down.

“I think it’s completely unjustified,” he said. “It’s a fabrication of current market conditions in Tucson.”

Other recent reports have presented Tucson’s real-estate market in a more positive light. Inman News placed Tucson fourth among America’s 10 best places for real-estate investment. Among other factors, the report considered low and falling prices, an improving unemployment rate and high projected return on investment over the next decade.

Fiserv Case-Shiller listed Tucson as one of 20 metropolitan areas where housing prices are expected to rise in 2012.

So is Tucson’s housing market sick or healthy?

It’s a matter of perception, according to Marshall Vest, an economist with the University of Arizona’s Eller College of Management. One study sees the glass as half-full, while the other sees it as half-empty, he said.

“I think both of those statements make sense, and both are consistent with one another,” Vest said. “If you have a market with high inventory and prices are way down, yes, it’s sick, but it’s also ripe for investment.”

Phoenix has it worse by many measures. Home prices there have dipped 49 percent over the last five years, yet the nation’s sixth-largest city dodged the sick list, to the surprise of Vest and dismay of Tucson real-estate agents.

“As I look around at housing data from around the country, I can tell you that we’re far from the sickest,” said Hollman, who is also regional vice president for Coldwell Banker Residential Brokerage in Arizona.

Jerimiah Taylor, a real-estate agent with Jerimiah Taylor Team of Keller Williams Realty, said Tucson is a market of opportunity.

“In as much as our market isn’t in a good state, we’ve also depleted our inventory,” he said.

Taylor said buyers are scrambling for low-priced homes. He recently listed a house for $147,000 and sold it within three days for more than $170,000.

“If you are a buyer that wants a great deal, there’s nothing sick about this market,” Taylor said.

The average property in Tucson had been on the market for about 162 days as of Aug. 28, according to real-estate-market data provider Altos Research, which called Tucson a buyer’s market with a high inventory and low prices.

Tucson’s total sales volume rose 27.9 percent from July 2010 to July of this year. Sales of 1,124 units were 41.9 percent higher than the previous July, according to monthly statistics from the Tucson Association of Realtors.

Barbara and Tom Dougherty sold their four-bedroom home of seven years within four days at $387,000, but at thousands of dollars less than they had listed.

“We sold it at a very good price for the buyer,” Barbara said. “We didn’t make very much money on that house.”

Vest said the strength of the Tucson market is its affordability and that wise investments are made when prices are lowest.

“It’s a destination of choice and will continue to grow,” Vest said.

Read more: http://www.azcentral.com/arizonarepublic/business/articles/2011/09/02/20110902views-mixed-housing-tucson-worst.html#ixzz1Wu1I5ji0

Hey Tucson and Pima County how about you come up with one of these – HERE.

Looks like Pima County is having some issues in the local paper again. This time it’s over road projects, ADA requirements and most importantly projects that the voters bonded for in 1997 finally getting built under a new pot of voter approved money, the $2.1 billion RTA project.

The investigative reporters and community at large are starting to catch on to the Pima County shell game around waste water, road projects, bonds that aren’t spent on projects the voters told Pima County to spend them on and a general hubris to do whatever the County administration wants to do right before your eyes.

Here’s a few choice comments with O’Dell article to follow:

2 hours, 22 minutes ago
QuotePima County officials at first said they weren’t  responsible for the crosswalk, contending the work was done as much as six years  ago. After being shown evidence that they were, indeed, responsible for building  the crosswalk signals, Transportation Director Priscilla Cornelio and Project  Management Office Manager Nancy Cole said it was an oversight and should be  fixed.

On one hand, credit goes to these ladies for being  presented with evidence and recognizing that Pima County is, indeed, responsible  for building the crosswalk signals. Too often folks are presented with evidence  about something and refuse to budge from their original position on an  issue.

Lets see: project started design in 1997, takes over 14 years to complete, has  design, admin and construction managment that =100% of the true construction  cost (at a time when construction costs are down due to the economy).   Sounds  like it is time to get rid of the Director of Transportation, whom should be  held accountable for this mess!
If this happened in any other agency around  the country, a demotion would be in order…what gives???

We, the voters, voted for this as part of a bond package, and we, the residents  paid for this project.  Then we, the voters, voted for the RTA sales tax, and  then we, the residents paid for this project AGAIN.

Between the county  bonds and the RTA we are paying double for projects that should have been paid  for and completed a long time ago.

And now King Chuck wants to float  hundreds of millions of dollars in more bonds (debt)?

When will we ever  learn?

Well, well. The county strikes again. 7 million in soft costs for a 14 million  project? Are you kidding me? And to top if off this project was promised to the  voters in 97 and the Huckster and his cronies simply shifted money to other  projects and didn’t even attempt to start this one. Just more bait and switch  from the county.

Wonder how Chuckles will spin this one? Its the states  fault or we have to meet federal specks. It will be one of the two but as usual  the taxpayer will foot the bill for the f(*k up by county personnel and their  consultants one more time. Just business as usual in the most dysfunctional city  and county that I have ever seen.

We need one more vote desperately in  12 to rid ourselves of the King. Without that vote we are powerless to bring  some kind of sanity to the BOS and their tax and spend ways. Its not even funny  now, its simply in your face. We are going to raise your property taxes and what  are you going to do about it? Had enough of Chuck and his court yet.

Despite spending more than $14 million to widen a stretch of East Tanque Verde Road – with half the money going for design and management – Pima County put in a major intersection that doesn’t comply with the Americans With Disabilities Act.

The crosswalk signals at Tanque Verde and Catalina Highway can’t be properly accessed by people in wheelchairs and scooters. They would have to roll over curbs or through dirt to reach them, contend several government officials and a disability expert who looked at the conditions at the intersection.

The project, which was built with a mix of county and Regional Transportation Authority funds, has been singled out by the RTA as the “poster child” for excessive soft costs, such as design and management rather than actual construction or property acquisition. For Tanque Verde, the $7 million-plus in soft costs was more than the $7 million to build the road.

“For the construction on Tanque Verde, there’s been a considerable amount of soft costs,” said RTA Transportation Director Jim DeGrood, who noted the project was done before the RTA started putting a limit on spending its money on soft costs.

“We would not consider them very accessible,” Dave Yanchulis, an accessibility specialist with U.S. Access Board, said of the Tanque Verde pedestrian signal buttons. The board maintains accessibility guidelines and is developing new ones for public rights of way, including pedestrian signals.

Pima County officials at first said they weren’t responsible for the crosswalk, contending the work was done as much as six years ago. After being shown evidence that they were, indeed, responsible for building the crosswalk signals, Transportation Director Priscilla Cornelio and Project Management Office Manager Nancy Cole said it was an oversight and should be fixed.

Cole said the cost to fix the intersection could range from $7,000 to $40,000.

“It doesn’t look so good,” Cornelio said. “Sometimes things slip through the cracks.”

Cole originally said the county didn’t touch the intersection as part of the widening, but later acknowledged that the county moved some traffic poles in the intersection and put up the crosswalk buttons.

“I think it was an oversight,” Cole said.

Given that the county is going over the final issues with the construction because it is winding down the project, Cole said it’s a “great time” to figure out how to properly finish the intersection to make it ADA compliant.

County officials didn’t oversee the work themselves. A consultant, Arcadis, was hired to oversee the construction. In all, three consultants on the project earned more than $1 million.

Arcadis earned $2.1 million, consultants RS Engineering earned $2.7 million and construction surveyor Urban Engineering earned $1 million. Southern Arizona Paving was awarded a $7 million contract in January 2010 to actually build the road.

The Tanque Verde project was administered in an unconventional manner. Instead of the Department of Transportation being responsible, it was managed by the Project Management Office, which was set up by County Administrator Chuck Huckelberry in 2006.

Assistant County Administrator Nanette Slusser said the Project Management Office “essentially provides additional project management resources to all county capital departments. It is a small tactical department that provides the county resource flexibility.” She estimated the project has overseen two to three dozen projects over the past five years.

Huckelberry is on vacation in California and could not be reached for comment.

“The county administrator set up the office to try to streamline the way projects were administered,” Cornelio said. “He suggested they do this job. … They were trying a new process.”

RTA Spokesman David Joseph said the work at the Tanque Verde-Catalina Highway intersection is obviously not compliant with the ADA and must be fixed.

The project was originally supposed to built with money from a Pima County bond issue passed by voters in 1997, but it never got done at that time. The county continued to work on the design of the project over the course of several years until voters passed the $2 billion 20-year RTA plan in 2006, giving the county the money to complete design and construction.

Contact reporter Rob O’Dell at 573-4346 orrodell@azstarnet.com

Read more: http://azstarnet.com/news/local/govt-and-politics/article_0976f054-1991-5ed1-afb1-71aba98c7b7b.html?mode=story#ixzz1WF2be7tR

Posted: Friday, August 12, 2011 8:00 am | Updated: 10:57 am, Mon Aug 15, 2011.

Pima Board of Supervisors need to reign in Chuck HuckelberryBy Hugh Holub, Inside Tucson BusinessInside Tucson Business | 0 comments

Why is Pima County’s tax rate nearly three times Maricopa’s?

Rhonda Bodfield Arizona Daily Star | Posted: Monday, August 22, 2011 12:00 am

Pima County residents pay a primary property tax rate that’s nearly three times that of taxpayers living in Maricopa County.

It’s a comparison that has long attracted notice, particularly for folks in Phoenix who like to hold it up as an example of Southern Arizona’s out-of-control spending.

Deciding whether the difference is out of whack, however, requires making sure there aren’t some oranges mixed in with the apples.

Pima County taxpayers in fiscal year 2012 will pay a primary tax rate of $3.41 per $100 of assessed valuation.

Maricopa County taxpayers will pay $1.24.

Kevin McCarthy, the president of the fiscally conservative and business-oriented Arizona Tax Research Association, was part of a working committee cobbled together by Gov. Fife Symington, back in the 1990s, to ferret out the difference.

Ultimately, he recalled, the group identified a host of reasons, but essentially concluded one primary thing: “Historically, it’s just been the case that Pima County spends more.”

That’s the kind of talk that gets County Administrator Chuck Huckelberry agitated.

“That’s the historic misconception,” he said. “Because the board majority has been Democrats, there’s this impression that they’re a bunch of ultraliberals. That is a misinformed, stereotypical Maricopa County reaction.”

values and taxes

Huckelberry said there are good reasons that Pima’s primary tax rate is higher.

First of all, he notes, Maricopa has higher property values. Take into account its corporate headquarters and major utilities, such as the Palo Verde Nuclear Power plant, and it’s higher by a tune of about 19 percent overall.

Maricopa County also has a separate jail tax, while Pima County doesn’t, forcing those expenses onto the primary rate.

Maricopa County pays for its indigent health-care costs on the secondary property tax. Pima, meanwhile, is spending $15 million this year for UA Healthcare, which took over operation of the county’s former Kino hospital. That, too, is supported by the primary rate.

He also notes that while 94 percent of Maricopa County residents live in an incorporated city or town, that number is only 64 percent in Pima County. And while critics will say a county generally has a fixed set of things it must do, regardless of how many people live in it, Huckelberry said it’s indisputable that the large number of people outside of cities triggers higher costs for law enforcement and parks, for example.

Pima County is also the only one of the 15 that has no sales tax.

By the time all that subtraction is done, Huckelberry said the tax rates are far more comparable, saying the rates would have translated into a $1.57 tax rate for Pima County compared with a tax rate of $1.24 for the larger county.

Joe Higgins, a former supervisor candidate who has a morning radio talk show, questions whether Pima County taxpayers are really getting that much more than Maricopa’s, given the difference. He said he’s not convinced the county is as lean as Huckelberry says.

Even using Huckelberry’s math comparing the two county tax rates, he notes, the county is still spending some 26 percent more. He said the bureaucracy is too big, and the county is doing too much.

“They can dump data on you to death, but the fact remains the tax rate is far higher,” he said.

The money pot

The levy – essentially the pot of money taxes bring in – has also swelled.

In 2002, the county collected about $257 million.

For this fiscal year, the levy is expected to be about $402 million.

That’s about a 57 percent increase – even though the population growth over that time hovers at about 12 percent, nudging up from about 850,000 residents to roughly 1 million, according to census figures.

Huckelberry, not surprisingly, trots out more math.

The county inherited the library system from the city, he notes, and voters authorized bonds over that time as well. By the time those new responsibilities are removed, he said, the levy increase is really only 38 percent. Factor in the population growth and inflation costs, and the levy isn’t out of whack, he said.

Much of the county’s spending is funneled to law enforcement and criminal justice. Of the $94 million in growth on the primary levy, law enforcement and criminal justice expanded by $79 million. If you then factor out state-costs shifts and health-care payments, he argues that despite what seems a gargantuan number, the levy is actually less than it was in previous years.

The Deal

So is he arguing county taxpayers are getting a good deal?

“I’m arguing that they’re not getting as bad a deal as they think and that they have to compare apples and apples when they make these comparisons.”

Both Higgins and the association’s McCarthy maintain the county’s large number of unincorporated residents is self-inflicted, since the county didn’t enthusiastically embrace some incorporation efforts in the 1990s. Most recently, county officials have raised questions about a possible city of Tucson annexation at East River and North Craycroft roads, where a boutique hotel could be in the works.

Republican Supervisor Ray Carroll said he isn’t buying Huckelberry’s math either. “I think it just comes down to the fact that Pima County is a top-heavy, large government that has fiefdoms to protect – and it has the tax rate to go along with them.”

On StarNet: Read more about local, state and national political news at azstarnet.com/politics

Contact reporter Rhonda Bodfield at rbodfield@azstarnet.com or 573-4243.

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Read more: http://azstarnet.com/news/local/govt-and-politics/article_2d2c52eb-f606-576c-9280-47715314b8c7.html#ixzz1VotuIQrm

Posted: Friday, August 12, 2011 8:00 am |

By Joe Higgins and Chris DeSimone, Inside Tucson

First of two parts

In 1989, the Tucson Citizen newspaper ran a 24-page special section titled “Who Runs Tucson.” What’s striking – and really sad – is that the same issues facing Tucson today were prevalent more than two decades ago.

The sagging infrastructure and high vacancy rates in retail centers and housing we have today didn’t happen overnight. It’s easy to blame politicians but how did they rise to their positions of power? How good are we at finding, cultivating and supporting our leaders of tomorrow? More important, ask yourself what this region will be like 22 years from now?

For perspective, consider what Citizen reporter Kevinne Moran wrote in 1989:

“There is no power elite. Certain individuals have power in there own ‘sphere of influence.’ But many of those influential people bemoan the fact that Tucson has no clearly recognizable leadership.

“‘It’s downright depressing,’ says one chief executive officer. ‘We hash over the same problems, year after year. Nothing ever gets solved.’”

Knowing what we know now, a series of interviews and community surveys they did for the section yielded familiar facts about the political and business lay of the land in Tucson in 1989. From the Citizen:

•”With recent downturn in Tucson’s real estate economy, formerly active developers have withdrawn from key leadership posts.”
•”Most of the large business enterprises in Tucson – banks, retail stores and media outlets – no longer are locally owned. Large corporations headquartered elsewhere in the country don’t have the same kind of local commitment to community interests.”
•”The concept of ‘old families’ in Tucson and their importance in power elite has been diminished by rapid population growth. Tradition has little meaning.”
•”Politicians are considered powerless and indecisive in Tucson. Most of the politicians are considered too easily influenced by ‘special interest groups.’ Some are considered to be ‘in the pocket’ of the community’s plethora of neighborhood and homeowners’ groups.”

Sound familiar? Here it is 22 years later and we are in another real estate-driven downturn and it is much more painful for us in Southern Arizona because we lack corporate anchors in diversified industries. We are a one-horse town and that horse came up lame.

We’ve talked economic development but stood on the sidelines while other areas expanded and flourished.

So what about diversifying Tucson’s economy away from the cyclical growth boom and busts? Were there economic development efforts back in 1989?

From reporter Moran’s Citizen story: “Another chief executive officer bemoans the fact that economic development always becomes a catchword in time of stress for Tucson.

“‘We hear from yet another group, sit around and wait for some big company to come looking for Tucson,’ he says. ‘It’s getting old.’”

“He was referring to the newly organized Pima County Economic Development Council spearheaded by Tucson Mayor Thomas J. Volgy. Others are more hopeful.

“‘I’m getting a little tired of these groups,’ said another executive. ‘But I’m willing to give it a try. Maybe this one will be different. Maybe this one will be effective.’”

After Volgy’s foray into economic development, the PCEDC, as it was abbreviated, morphed into Greater Tucson Economic Council (GTEC) known for setting up Tucson as a call center capital. GTEC has been followed by Tucson Regional Economic Opportunities (TREO), which after five years is trying to diversify from its government funders and struggles to show meaningful results. Is it time to hit the reset button yet again and pick some other letters from the alphabet?

Companies pass over Tucson because of draconian land-use codes that turn a six-month project into a two-year project. Business decision-makers aren’t interested nor do they have time to try to navigate Tucson’s provincial political landmines, kissing the right rings and hiring the favored attorney, to do something here. They simply go someplace else.

The old adage is that if we don’t learn from history, we’re doomed to repeat it has proven true for Tucson.

Next time in part two, we’ll look back at the power brokers and future power brokers of 1989 to try to see what happened?

Contact Joe Higgins and Chris DeSimone at wakeuptucson@gmail.com. They host “Wake Up Tucson,” 6-8 a.m. weekdays on The Voice KVOI 1030-AM. Their blog is at www.TucsonChoices.com.

America’s 10 Sickest Housing Markets

by 24/7 Wall St. Staff
Wednesday, August 3, 2011

By Charles B. Stockdale, Douglas A. McIntyre and Michael B. Sauter

For three years, the real estate market has been going in one direction — primarily down. Some areas, however, have begun to recover. Recent S&P/Case-Shiller data show that among the top 20 housing markets in the U.S., 18 had very modest improvements in sales prices during May. Others, like Washington and Boston, have began to at least stabilize from a year ago.

Few markets, however, can match Washington and Boston. Robert Shiller has been stating that home prices could fall another 10% in the next year. Inventories in some major metropolitan areas would take years of sales to get back to 2005 levels. Then, the normal inventory of homes for sale was replaced on average every six months and it was unusual for a house to be on the market for a year. Foreclosure rates remain high and only the robo-signing scandal has slowed the process. Once this is resolved, economists fear the market will be flooded with even more vacant, unsold homes.

24/7 Wall St. has taken a new look at the housing market to find the very weakest cities by identifying those with the highest homeowner vacancy rates and rental vacancy rates. These are markets where demand has clearly collapsed. These are cities where the requirement for living space has dropped well below the national average. Further, vacancy rates of many cities were stable during the recession, but accelerated sharply higher in the last year. Similarly, housing prices in several of these markets have decreased at a faster rate in the last three quarters than during the recession. These cities, like Detroit, St. Louis, Dayton, and Atlanta, also tend to be larger and older among the top 75 metropolitan areas. Their economies were damaged long before the recession.

Methodology: 24/7 Wall St. pulled Census data on the 75 largest U.S. metropolitan areas and ranked the cities with the highest overall vacancy rates for both homeowner vacancy and rental vacancy for the second quarter of 2011. We picked the cities with the worst rates in each of the two categories to create meta-data ranks. We then removed the cities that had either improved homeowner vacancy rate in either the last twelve months or the last quarter. We believed that any sign of improvement in homeowner vacancies, the more telling of the vacancy rates, should disqualify a city. To improve our analysis, we also looked at unemployment rates for these cities provided by the Bureau of Labor Statistics. We also used historical median home prices, as provided by the National Association of Realtors.

The analysis shows that some cities have home vacancy rates over 5% and rental vacancy rates over 10%. Obviously, these levels of unused inventory have the effect of driving down both home and rental prices month after month. It also means that there is comparatively little demand for the purchase of new or existing homes. These ten markets are essentially dead as far as real estate prices and sales activity are concerned.

These are America’s ten sickest housing markets.

1. Tucson, AZ
Homeowner vacancy rates: 6.8% (1st)
Rental vacancy rates: 15.9% (6th)
Total housing units: 440,909
Unemployment: 7.8%

Tucson’s homeowner vacancy rate was 3.2% one year ago. It is now over double that. The city had a booming residential housing market before the crash. Since then, demand is so low that median home prices have dropped 18% in the past year and 33% since 2008. In addition, the city has among the highest rate of foreclosures in the country.

2. Indianapolis, IN
Homeowner vacancy rates: 5.2% (5th)
Rental vacancy rates: 13.5% (10th)
Total housing units: 757,441
Unemployment: 7.8%

The average home price has dropped by $20,000, or 15.3%, between the second quarter of 2010 and the first quarter of this year. Indianapolis’s home vacancy rate of 5.2% is the fifth-highest in the country. Its rental vacancy of 13.5% of units is the tenth highest in the country. In 2009, while vacancy had not even reached its worst point, the mayor’s office of Indianapolis recognized the serious problem the city faced. The city’s plan to help solve the abandoned home issue states: “Indianapolis, like many communities, faces a significant challenge in dealing with vacant and abandoned properties. This challenge is exacerbated both by weaknesses in the local and regional housing markets — including an oversupply of housing relative to demand — and by the high and growing rate of foreclosures.”

3. Memphis, TN
Homeowner vacancy rates: 4% (9th)
Rental vacancy rates: 13.5% (11th)
Total housing units: 550,896
Unemployment: 10.1%

Memphis’s slow economic recovery has kept vacancy rates high. The metropolitan area’s homeowner vacancy rate has increased from 2.5% in 2010 to 4% in the second quarter of 2011. In the city’s defense, its rental vacancy rate has decreased from a staggering 21.2% in 2010 to 13.5%. This is still among the highest in the country, but it is an improvement. The unemployment rate remains at 10.1%, which is significantly higher than the national average of 9.2%.

4. Atlanta, GA
Homeowner vacancy rates: 5.4% (4th)
Rental vacancy rates: 11.8% (17th)
Total housing units: 2,165,495
Unemployment: 9.7%

Atlanta’s homeowner vacancy rate of 5.4% is the fourth highest among major U.S. cities. The city, which had a significant influx of new residents, particularly from the northeast, has been hit hard. Atlanta’s unemployment rate of 9.7% is well above the national average of 9.2%. According to the Atlanta Journal-Constitution, the city had lost nearly 25,000 jobs between June of 2010 and June of this year. Between 2008 and the first quarter of this year, homes have lost more than a third of their value, dropping in price by nearly $50,000.

5. Baton Rouge, LA
Homeowner vacancy rates: 3.9% (11th)
Rental vacancy rates: 13% (12th)
Total housing units: 329,729
Unemployment: 8.4%

Baton Rouge did not emerge from the recession unscathed, but it did perform better than many other cities in the U.S., in part because it is the state’s capital city and in part because of the money brought in through Hurricane Katrina recovery work. However, according to one local news station, the area has built more housing structures than it could fill following Katrina. The city has not been able to break free of this situation, as both homeowner vacancy rates and rental vacancy rates have increased not only since last year, but since the last quarter as well.

6. Dayton, OH
Homeowner vacancy rates: 4.7% (7th)
Rental vacancy rates: 10.7% (23rd)
Total housing units: 385,160
Unemployment: 9.3%

Dayton’s home vacancy rate of 4.7% is the seventh-highest in the country among major cities. At one time, Dayton was a much larger city and an economic powerhouse. The Ohio city, which was a major manufacturing center, was at one point awarded more patents each year than any other place in the U.S. The city has a particularly bad unemployment rate of 9.3%. Median housing price, which stood at $109,000 in 2008, has fallen by 29%, or $27,000, between 2008 and the first quarter of this year.

7. Detroit, MI (Tied for 8th)
Homeowner vacancy rates: 2.4% (32nd)
Rental vacancy rates: 17.2% (3rd)
Total housing units: 1,886,537
Unemployment: 11.6%

The recession hasn’t been kind to Detroit. Part of the Detroit-Warren-Livonia metropolitan area, it has been among the hardest hit cities in the country. Since 2005, the metropolitan area has lost approximately 323,400 jobs. Unemployment in the Motor City almost reached 30% in 2009. According to one estimate, the city had 90,000 abandoned or vacant lots or residential homes in 2010. One of the reasons the city is not at the top of this list is that the city had so many vacant properties that a huge portion of them were demolished. Regardless, at 17.2%, the rate of rental vacancy is still the third highest rate in the nation.

8. Kansas City, MO (Tied for 8th)
Homeowner vacancy rates: 3.7% (13th)
Rental vacancy rates: 11% (22nd)
Total housing units: 883,099
Unemployment: 8.4%

Kansas City’s rental vacancy rate of 11% is the 22nd highest of any major city in the country, while its homeowner vacancy rate of 3.7% is the 13th highest. The city has a relatively high rate of unemployment, at 8.4%. While it’s below the national average of 9.2%, it is well above the state average of 6.6%. The median home price in the city is down by $19,000, or more than 13%, since 2008. Most of that decline came in the last year. Between the second quarter of 2010 and the first quarter of this year, prices dropped by more than $25,000.

9. St. Louis, MO
Homeowner vacancy rates: 3.3% (19th)
Rental vacancy rates: 11.4% (18th)
Total housing units: 1,236,222
Unemployment: 8.6%

In 2008 and 2009, the St. Louis area has shed more than 82,000 jobs. This loss had a negative impact on the city’s real estate market. Vacancy rates have continued to rise, increasing from under 2% one year ago to 3.3% in the recent quarter. The rise in vacancy rates has occurred while the median sales price for single family homes has fallen more than 19% since 2008. While rental vacancy rate, which is currently at 11.4%, has decreased slightly since the last quarter, it is still 1.6 percentage points higher than it was last year. St. Louis office vacancy rate is at 12.6%, according to real estate information company CoStar Group.

10. Oklahoma City, OK
Homeowner vacancy rates: 5.2% (6th)
Rental vacancy rates: 9.6% (34th)
Total housing units: 539,077
Unemployment: 4.9%

Oklahoma City had the sixth highest homeowner vacancy rate in the country as of the second quarter of this year. The city’s unemployment rate is just 5.3%, but this low rate has not helped improve high home and rental vacancy. From last year, home sales in Oklahoma state dropped by 7.7%, according to the state’s newspaper NewsOK. In the city, sales were flat from last year. Between the first quarter of 2010 and the first quarter of 2011, the median home price in the city dropped by more than 8%.

Posted: Friday, July 29, 2011 8:00 am | Updated: 10:34 am, Thu Jul 28, 2011.

An open letter to the board members of the MTCVB By Joe Higgins and Chris DeSimone, Inside Tucson Business Inside Tucson Business | 2 comments

Dear Metropolitan Tucson Convention and Visitors Bureau board member,

By now you’ve had a chance to see and read Pima County’s performance audit of the Metropolitan Tucson Convention and Visitors Bureau (MTCVB). As you know the county’s audit commission included actual stakeholders, including general managers of major resorts, members of the Pima County Sports And Tourism Commission and officials with our region’s renowned attractions. Among them are some of your former colleagues on the MTCVB board.

As a board member, you may not be happy the current MTCVB board got attention in the audit, as “not fully engaged, energized or pro-active in representing the stakeholder community.” Those of you who are vendors also must know, as the audit found, that serving on the MTCVB is not in the best interest of the bureau.

You realize, of course, the MTCVB board isn’t alone in having to take a hard look at the performance of the organization it’s responsible for. The Tucson Metropolitan Chamber of Commerce, the United Way of Tucson and Southern Arizona and the Fiesta Bowl have all had to make sweeping changes.

In addition to implementing the recommendations in the audit, you’ll also have to ascertain the true performance of senior leadership of the MTCVB.

In fact, we suggest you might consider it an annual performance review and don’t be surprised if it goes something like this scenario:

You: “Thanks for coming in today. What are we looking like for this year? We’ve been paying you guys for over a decade and I’d like to hear from you about what you feel your impact is on our resort. What’s going on at the MTCVB?”

They: “Well, two of our biggest funders, Pima County and the City of Tucson, did independent audits of our performance. This has never occurred before. Actually, it’s pretty rare.” (A fact noted in the Pima County audit.)

You: “What did they find?”

They: “There’s a perception in local government and among other principal stakeholders that we view ourselves with a sense of entitlement. Also, while we produce strong results at times, we do not consistently provide transparency, accountability and a focus in communicating out to stakeholders.”

You: “That’s not very comforting. You’ve been telling us all is well for years.”

They: “We have some problems telling the story of our results. They say ‘major deficiencies are found with the annual report, the marketing plan, and brand development program, as well as the current leisure development marketing program.’”

You: “That’s pretty serious, you’ve been paid millions each year in bed tax collections to tell the world how great our region is. Is there anything else?”

They: “Even though our senior vice-president was certified as a Destination Marketing Executive by DMAI (Destination Marketing Association International), the audit said our ‘current process for branding bears little resemblance to the industry’s preferred models.’ They also said our branding ‘was produced by staff and not by principal stakeholders. Instead of input, a very few were relegated to providing feedback, which provides no true inclusion into this process’.”

You: “(Sigh) Any good news?”

They: “Our employees working day-to-day in the trenches are working very hard: ‘staff is generally dedicated and skilled, they display high morale, are long tenured and professionally accredited in their scopes of work’.”

You: “Is their any independent verification of your true performance?”

They: “Well, the county’s audit included a 10-year analysis of our market share performance. Our competition statewide brought in 41.4 percent more tourism spending in their areas. We were up 21.8 percent. We actually dragged down the state average.”

Interview over.

So now, as an owner or general manager of a tourism asset in Pima County, you have to ask yourself what you would do with such a vendor? You might be tempted to go find another company. In the case of the MTCVB, the county’s audit found the staff is diligent and capable. That leads to the question: Is it time to make a change in senior management?

The Tucson region’s No. 1 industry cannot afford to be the weak link in Arizona’s tourism chain any longer.

Contact Joe Higgins and Chris DeSimone at wakeuptucson@gmail.com. They host “Wake Up Tucson,” 6-8 a.m. weekdays on The Voice KVOI 1030-AM. Their blog is at www.TucsonChoices.com.

(Reuters) – Central Falls, Rhode Island, one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession, filed for a rare Chapter 9 bankruptcy on Monday.

The bankruptcy filing, a risky and potentially expensive move that could freeze the city out of the U.S. municipal bond market, marks a symbolic blow as state and local governments struggle to pull themselves out of the recession.

The smallest city in the smallest U.S. state made the filing as it grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million.

“This is a wake-up call for other struggling towns,” said Eileen Norcross, a senior research fellow at the Mercatus Center at George Mason University. “States should be looking at Rhode Island and saying, ‘How can we avoid this?”

Still, dire predictions of mass municipal defaults made late last year by Wall Street analyst Meredith Whitney have not come to pass. A string of failures could rattle the $2.9 trillion U.S. municipal debt market.

The Central Falls filing was not the start of a “huge nation-wide trend”, said Adam Stern, a vice president at Boston-based Breckinridge Capital Advisors, a municipal bond investment firm.

“A bankruptcy filing is sort of an endgame over years and years of economic distress, so it’s not something your typical U.S. town or city is likely to experience anytime soon,” he said.

There have been only 624 municipal bankruptcies under Chapter 9 of the U.S. Bankruptcy Code since 1937, with five occurring last year, according to James Spiotto, a municipal bankruptcy expert at the law firm Chapman and Cutler. For graphic see: r.reuters.com/kyb92s

Alabama’s Jefferson County is currently working to ward off the largest municipal bankruptcy in U.S. history stemming from its $3.2 billion sewer bond crisis. The Pennsylvania state capital of Harrisburg, which has about $300 million incinerator debt, is also considering bankruptcy.

Those cases lead some to take a pessimistic view on the future of municipal bankruptcies in the United States.

“Chapter 9 has been a fairly unusual event but we and many others think that’s not necessarily going to be the case going forward,” said Sean Scott, a municipal bankruptcy expert at law firm Mayer Brown.

“THE BIG ASK”

In Central Falls, a city of just 19,000 located six miles from the state capital of Providence, residents reacted to the news with disappointment and resignation.

The big question on their minds was if another nearby town, like neighboring Pawtucket, or the state itself would take over their city.

“I’d be curious as to who’s going to take it over. Someone has to, but no one wants to,” said Dan Mercure, 48, on a break from his job at an auto parts store. “It’s going to hurt business, it’s all mom and pop stores here.”

Ulysses Ortiz, a 50-year-old retiree, said whatever budget cuts will be imposed would hurt residents, who have already borne the brunt of heavy budget cutting.

“It’s too bad, because Central Falls has always been a progressive city,” said Ortiz. He added that he hoped the city would not be absorbed by one of its neighbors. “We’ve been here for more than a century,” he said.

Central Falls, which has been under state control since July 2010, has $21 million of outstanding debt, Moody’s said.

State officials worked to avoid a municipal bankruptcy filing, saying it could upset Rhode Island’s other fragile localities.

Earlier this year, the state passed a law that guarantees bondholders will be paid before a distressed city like Central Falls deals with its other obligations. It was not immediately clear whether the law would hold up in bankruptcy court.

Rhode Island Governor Lincoln Chafee said the situation is “dire” and requires “decisive” action.

“Everything was done to avoid this day,” said Central Falls’ state-appointed receiver, retired judge Robert Flanders, Jr. “Taxes have been raised to the maximum level allowable. We negotiated with…the police and fire unions, without success, attempting to reach voluntary concessions, and we tried in vain to persuade our retirees to accept voluntary reductions in their benefits,” he said.

(Additional reporting by Karen Pierog in Chicago, Joan Gralla in New York and Matthew Bigg in Atlanta; Writing by Edith Honan; Editing by Andrew Hay)