September 4th, 2008 by Michael Oliver

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Tucson’s downtown needs serious work. Everyone who has lived or been downtown knows this it is Not a Secret. Little has changed downtown in 10 years. Yes, a courthouse was built and some other things were done, but by and large, it is still a very odd place to be on the weekends or past 5pm any day of the week. There are very few homes available for reasonable prices, unless you count those built before 1910. No new condos, townhomes, homes, or other residential properties have been developed downtown in a long time. The key to turning downtown Tucson Arizona around is making it an appealing area in which to live. Then there would naturally be demand for all the services and shops that are very badly missing.

The City’s anti-growth and anti-change policy is the real reason that downtown Tucson is overwhelmed by conditions (such as homelessness) that deter people from frequenting it during non-business hours. Whenever a developer tries to get something going, the first time people start complaining, the City closes down the idea and hangs the developer out to dry. Then the developer essentially has to stop and loses whatever had been spent on feasibility studies, options on the property, legal fees, etc. So, at this point, developers just say, “forget it.” They’ve been burned by the City and will not spend money again to try to make a development work. Look at Rio Nuevo. That has not been all that successful and is a long way from what the City sold the public on. But this post is not about Rio Nuevo; it is about how bad our downtown is. Other cities have very nice downtown areas. Phoenix’s is nice and has been almost completely redeveloped. The baseball field, light rail, and other developments make you want to live downtown.

I also think much of the City’s reluctance to allow development of residential properties downtown — or any properties, for that matter — comes from wishing to avoid the appearance of helping the rich get richer. If a developer made big money on a development backed by the City, many would see this as a legitimate concern. However, in real life, a real estate developer takes risks very few other businesses or individuals ever take. They essentially invest millions and millions of dollars before anything is even built with the hope that they will have a successful project. One bad project can easily bankrupt the developer and possibly significantly hurt the bank or lending institution/investors who fronted the money to build the project. Couple this with the fact that even a medium-sized development can, on average, take 5 years to build WITH the City’s help. During that time, market conditions can change, and even the most promising projects can become BIG TIME losers due to those changes. If you need proof, look at all the developers and homebuilders going out of business currently vs. just 2 years ago when they had record profits. So, given all the unpredictability, no developer or investor is going to take these risks without a huge projected profit margin to allow for the “ifs” that may occur during development. Since the City of Tucson is not allowing any type of big profit margin to be made, developers just don’t even try anymore. This has led to Tucson’s downtown becoming an area of “Urban Decay,” and little will change until there is a change in the City of Tucson’s mindset. This situation is a major black eye on a city that has such tremendous natural beauty and a climate and economy that very few cities in the world can compete with.