New 202 may hurt cities, firms
ADOT: Displaced will lose revenue

Corinne Purtill
The Arizona Republic
Feb. 4, 2006 12:00 AM

The proposed South Mountain Freeway could temporarily bruise the southwest Valley's economy, cutting through the heart of a small town and bumping jobs and tax revenues out of Phoenix, Tolleson and Avondale.

A report released Thursday night by the Arizona Department of Transportation shows that those cities could lose thousands of jobs and millions of dollars in sales and property taxes from businesses displaced to make room for the road.

But economic development and transportation experts say the worried communities will benefit in the long run with new businesses, skyrocketing property values and decreased travel times.

"Any time you get a freeway that comes through where there hasn't been a freeway, in the long run there will be economic benefits," said Paul Katsenes, deputy director of community and economic development for Phoenix.

"The only question is how long (is the long term), and what expense did it have to overcome?"

The 22- to 26-mile route could displace some large Valley employers, including major offices for Fry's Food and Drug, Home Depot and Holsum Bakery, according to the report.

The freeway would complete Loop 202 and link Interstate 10 in the west and east, bypassing Phoenix.

ADOT planners want to join the freeway's western portion to I-10 at 55th Avenue, 71st Avenue or Loop 101.

In the case of tiny cities like Tolleson, where no land is left for a large business to relocate if displaced, the loss of these companies, and the blow to the community, could be permanent.

If engineers choose the Loop 101 alignment, up to 30 percent of the 6-square-mile city's tax base could be eliminated, according to city estimates.

Officials worry that the gains could come too late to save their town.

"It would be catastrophic to our community," Tolleson City Manager Reyes Medrano Jr. said Friday.

Whether or not the square city could remain independent despite the loss of those businesses is "the $64,000 question," Medrano said.

"I doubt seriously that we'd be able to."

Once a final alignment is determined, ADOT wants to start purchasing land in 2008, start building in 2009 and finish by 2015.

If joined at Loop 101, the South Mountain Freeway could cost Phoenix, Avondale and Tolleson a combined $23.3 million annually in lost property and sales taxes by the time those areas reach build-out around 2030.

Those numbers account for businesses displaced by the road and future development that could have occurred in the alignment.

The other routes run only through Phoenix.

By build-out, the city could be losing at least $21 million in taxes a year from the 55th Avenue alignment, or $10.5 million annually from the 71st Avenue link.

Phoenix could lose an additional $5.3 million annually in property taxes by build-out if the eastern leg is built in Ahwatukee Foothills.

Proponents say the long-term gains are worth it.

"From an economic engine standpoint, quality development follows a freeway," said Christine MacKay, Chandler economic development specialist.

An interchange in her city where Loop 202 meets I-10 displaced four businesses a few years ago, but in their place is a major employment center, thousands of quality jobs and continuing construction of corporate buildings. "One of the main reasons Verizon chose this location for its regional headquarters was freeway frontage and sign visibility," she said.

Loop 101 has also turned areas around it in Glendale into a sports and shopping hub, said Roc Arnett, president of the East Valley Partnership and chairman of the Citizens Transportation Oversight Committee.

The Santan Freeway under construction in Gilbert is spurring construction of two regional shopping centers, two auto malls, hospitals and airport expansions.

"It just blows your mind," Arnett said.

Phoenix has lobbied for the 55th Avenue alignment, which was the original route when the freeway was first proposed in the 1980s. Even that plan won't make everyone happy.

Jim Massey would lose 20 acres of commercial land along that route and the truck-repair business he has had there for 33 years.

He repairs hazardous materials trucks and has spent thousands on equipment to comply with federal homeland security regulations.

"I don't know where they're going to put me. I could stay in business, but how am I going to comply (with the federal requirements again)?" he said. "I think it's stupid."