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Phil Gordon and Michael Nowakowski, Don't Tax Our Food PHOENIX (By Jon Garrido, The Jon Garrido News Network) February 16, 2010 — The Urban Land Institute defines a successful city tourism development strategy as one that identifies key nodes for dense commercial tourism growth using a framework of phased public infrastructure, private investment, leveraged private funding, and critical mass development that achieves the primary goal of building significant scale to attract regional and national tourism.
Successful cities include: Faneuil Hall Marketplace, Boston, Mass., 20 Million annual tourists; San Antonio River Walk, Texas, 5.1 million annual tourists; Temple Square, Salt Lake City, Utah, 5 million annual tourists, and SeaWorld San Diego, San Diego, Calif., 4.26 million annual tourists.
The above compared to downtown Phoenix with less than 50,000 annual tourists is like the contrast between white and black and even the 50,000 number is dubious because there is no official number. Why? No one likes to admit failure so this number is not available to the public.
The crux of the problem
Everyone knows there is less revenue to offset costs but the question everyone should ask, "Why is there not enough revenue?"
Certainly the national recession is a factor but Phil Gordon has been at the Phoenix leadership helm for 13 very long years and seven of these years as mayor.
More than enough time to steer Phoenix to grandeur but instead — Gordon is a dismal failure.
Gordon does not understand economic development, has no vision and economic development application requires more than hype.
Now to bale out Gordon's failure, Gordon and Michael Nowakowski want Hispanic mothers to serve less food to their children because Gordon and Nowakowski want to steal a portion of their children's food.
Is there no shame? Apparently not! And
to make matters worse, Nowakowski has
the gall to proclaim the food tax will
benefit Phoenix residents
—
"We're investing in our kids,
we're investing in our seniors, we're
investing in our libraries and our
parks. We're investing in our future,"
claims Nowakowski.
The food tax is a cover up to the truth.
The reason Phoenix is in such dire straits is because there are no tourists visiting downtown Phoenix.
Phoenix desperately needs tourism.
Tourists are absolutely essential to income. Any novice can readily see tourism is the economic engine of any large city.
The primary revenue for the City of Phoenix comes from sales taxes: 2% from all sales, 5% from hotel room sales and 4% from car rentals.
Tourists spend about $495 per day in Phoenix.
(Note: A person from Mesa going to a Phoenix Suns game in downtown Phoenix is not a tourist. There is no hotel sales tax or car rental tax paid to the City of Phoenix.)
If the number of tourists in downtown Phoenix went from 40,000 to 5,000,000 per year, there would be substantial revenue to the City of Phoenix. Why 5 million? This is the number of tourists that annually visit the City of San Antonio.
This is the crux of the problem of why there is no revenue causing the City of Phoenix to significantly cut programs and services which translates into fewer Phoenix staff and, in particular, fewer boots on the ground providing police and fire protection.
Instead there are continuous diminishing services due to the significant loss of revenue to the City of Phoenix because of squandered opportunities.
The few tourists that come to Phoenix spend $500 per day on purchases but income from hotels and car rentals is the tourism foundation to increase income by generating other sales that tourists purchase.
This failure of revenue points to one individual: Phil Gordon for his lack of vision and leadership. For thinking public facilities alone will some how bring tourism is a thesis doomed to fail; however, public infrastructure coupled with private development works such as San Antonio did with a small creek in the downtown area that was transformed into a river walk lined with hotels, restaurants, mercado and Mexican villages. This is tourism development extraordinaire realizing tremendous tourism revenue for the City of San Antonio.
Building a medical school or university branch will never achieve the goal of Phoenix becoming a tourism Mecca and thus a world class destination.
But then, the infilling of land parcels with public facilities in downtown Phoenix is "instant gratification" and provides the illusion of economic development. It is not. It is all smoke and mirrors and comes under the heading of — hype.
Gordon is all about hype with no substance. (The next in this series: The Mirage in the Desert: Gordon's Downtown Phoenix and Gordon's Folly with Dubai).
Downtown Phoenix
Instant gratification projects of just gobbling up empty parcels each time eliminating land parcels that should have been used for tourist developments are filled rather with a medical school, vacant land for a proposed teaching hospital, research facilities, ASU campus and sports facilities none of which will ever contribute to a vibrant downtown Phoenix.
All of these are grounded on hype and grandstanding but none of these add to the bottom line of substantial additional revenue for Phoenix.
Not even high rise residential or commercial buildings will ever make any measureable contribution to increase revenue to the City of Phoenix in comparison to a major tourist attraction.
None of the users of these facilities stay in hotels or rent cars.
There may be some significant beautiful and extremely functional public structures such as the $600 million expansion of the Phoenix Convention Center but if not fully used, the only fitting label is the Phoenix Convention Center is a white elephant or rather white camel may be more appropriate.
301,475 conventioneers did visit the Phoenix Convention Center in 2009; however, less than 40,000 stayed in Phoenix downtown hotels.
50 thousand tourists in downtown Phoenix is a grain of sand on the beach. We need 5 million tourists to become a success.
To further dramatically illustrate the total failure of downtown Phoenix to attract tourists, there are no official figures available from any official data source because no one wants to add visibility to dismal failure.
In comparison, the City of San Antonio, which has population characteristics similar to Phoenix, had 5.1 million tourists in 2008.
In a telephone call last week to the City of San Antonio, downtown San Antonio 2009 attendance numbers are not yet finalized; never-the-less, tourist numbers remain close to 2008 numbers due to a major national marketing change of direction to regional marketing brought about by the national economy going southward.
Tourism is crucial and is the basis for successful cities. This understanding and realization that students, downtown workers and even downtown residents will do nothing measureable to provide revenue to the City of Phoenix from hotel sales, car rentals and other incidentals tourists daily purchase is tragically what is lacking in understanding on the part of Phil Gordon, the rest of the Council and even worse, professional economic development staff that are paid to have this expertise; unfortunately, selling trees and lucky charms is their idea of economic development success.
No one at the City of Phoenix
No member of the Phoenix City Council or City Manager or any of his staff and certainly, not one department head can point to any develop ment in downtown Phoenix that can be classified as a major enticement to attract tourists to downtown Phoenix.
If any city official offers a rebuttal to anything I have written, first begin by establishing a baseline to measure success. The only base with any validity is to provide the number of tourists to downtown Phoenix who stayed in downtown hotels and rented cars. Someone more clever that me asked the most profound question ever asked, "Where's the beef!"
How Phil will finish Gordon has been at the Phoenix leadership helm for 13 very long years with seven of these years as mayor. More than enough time to steer Phoenix to grandeur but instead — Gordon is a dismal failure using revenue as the baseline measurement, for not understanding economic development, for his lack of vision and application but mostly for his lack of leadership in guiding city staff to advance Phoenix to the pinnacle as a world class tourist destination.
Instead of selling trees and lucky charms to Dubai, Gordon should have long ago directed city Economic Development staff to conceptualize a major mixed use private sector development with the biggest use being a major tourist attraction for downtown Phoenix. If Gordon had done this, Gordon would have succeeded as Mayor. Unfortunately, time has run out for Gordon.
During his tenure at Phoenix City Hall,
Gordon focused heavily on revitalizing
downtown Phoenix with public structures
rather than private sector projects
required to achieve genuine
revitalization. Gordon and other members
of the Phoenix City Council have put
more than $1 billion into the city's
core, investing in projects such as the
$600 million expansion of the Phoenix
Convention Center, the construction of a
new $350 million Sheraton hotel, and the
creation of a downtown $220 million
Arizona State University campus and let
us not forget, $35 million for a
colossal failure of a tiny empty park in
front of the ASU downtown Phoenix main
building. Gordon's tenure as mayor will be remembered as leaving Phoenix with a massive deficit after already significant cuts in program and services, the final epitome of failure is to require low and moderate income Phoenicians to bale out Gordon's failures. The way Phil Gordon rushed the approval to tax food purchased by low and moderate income Phoenicians is reminiscent of Richard Nixon's Saturday night massacre. Gordon put the food tax increase on Tuesday's agenda with barely 24-hours notice and before any of 15 public budget hearings were held. As Gordon announced the food tax, Council chambers were packed with city employees pressured by Gordon and to no one's surprise, all city employees back the tax increase. To compound this heavy food tax burden on poor people by using a scare tactic to frighten voters that without the food sales tax, the City of Phoenix will be forced to eliminate police and fire protection throughout Phoenix is clearly transparent. Gordon's use of firefighters and police officers as props to stage a Saturday night massacre goes beyond the pale.
The Phoenix Convention Center
The financial picture is bleak because Phoenix taxes provide 80 percent of the convention center's revenue. Receipts from the taxes that fund the center are falling and are expected to generate $34.8 million this fiscal year, 30 percent less than previous projections. The center is having trouble paying the $14.9 million annual payment on its $300 million city debt. The city and the state split the original $600 million cost. The center is paying the city portion of the debt with surpluses from past year's convention-center funds. Just 20 percent of the convention center's operations budget is funded by income from conventions, such as rental fees. The convention center's financial woes pose a challenge for cash-strapped Phoenix, which already is poised to cut tens of millions of dollars in city services to help close a $240 million budget shortfall. The convention center's budget is separate from the city's general fund, so its financial problems don't affect city services. But if the convention center ends up in bigger financial trouble, ultimately the city is responsible.
The center's financial health is critical for tourism, but then, the sad fact is there is no tourism in downtown Phoenix. And without a major tourism draw in downtown Phoenix to occupy family members as husband or wife attend a convention, Phoenix will never achieve a vibrant downtown.
This is why the Phoenix Convention Center is becoming a white elephant. Without a major tourist attraction in downtown Phoenix, this grand building will never achieve full utilization.
This is why all major convention centers in the United States are located as part of a major tourist attraction. All conventioneers select conventions based on entertainment activities as part of a convention center or in close proximity.
This is why the Phoenix Convention Center is like a white camel in the middle of the desert with nothing of scale around it. Only a handful of diehards in the world will visit a white camel in the middle of the desert with nothing around it.
But then, conventioneers will always have Scottsdale and there goes our hotel sales tax revenue.
The Economic Development team
In other cities, when the Mayor and Council are clueless on vision, the City Manager may be relied on for leadership. This is not the perceived role for the current Phoenix City Manger or any of the other deputy and assistant city managers who more or less earned their stripes from Phil Gordon and obviously, have become visionless clones of Gordon.
Prior to becoming city manager, David Cavazos, as a deputy city manager, was the driving force in Gordon's downtown Phoenix non-tourist projects.
Cavazos was also responsible for the City of Phoenix economic development department.
On November 30, 2009, Don Maxwell, the Community and Economic Development Director stated they (Mayor Phil Gordon; David Cavazos, deputy city manager; Don Maxwell, the Community and Economic Development Director; and Community and Economic Development Assistant Director Roberto Franco) remain confident Dubai is still a good place to do business, even after the Middle East emirate's investment arm announced it would not be able to pay creditors on time for some of its nearly $60 billion in debt. (The next in this series: The Mirage in the Desert: Gordon's Downtown Phoenix and Gordon's Folly with Dubai).
What I find most heartbreaking is to have Councilman Michael Nowakowski, an Hispanic American, be an ardent support of the food tax.
This reinforces what many of us already know, Michael Nowakowski is clueless on what it takes to manage a large city which includes how to generate significant revenue.
Apparently, it does not also matter to Michael, if nearly 50% of Phoenix residents are Hispanic and of these 50%, a safe assumption would be 70% are struggling to make ends meet, every dollar paid in city food taxes is a dollar taken from the mouths of children, unemployed, and marginal employees.
It appears Michael has sold his soul to the devil. I can only guess what the payoff is? Whatever the case, Michael has betrayed all Hispanics. Soon the devil will be gone and Michael will be forever remembered as the ardent support of the food tax on poor Hispanic mothers. |
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