by Joel Garreau
As Pfister got talking, he acknowledged that he and his organization had more of an impact on metropolitan Phoenix than he initially had been willing to admit.
Yes, he did discourage people from having lawns in their own front yards. He did encourage desert landscaping called xeriscaping. Yes, he does have a tree specialist on his staff for that.
Yes, he does have five thousand employees and a financial intake of $1 billion a year, and a double-A bond rating, tax free, and a governmental-affairs staff of thirteen people (read lobbyists) with their own political action committee handing out campaign contributions. Yes, his real estate does spread out over hundreds of miles. Yes, he did first begin to get his shadow government involved in public affairs in 1979 when he discovered, during massive floods, that regular governments had no idea what they were doing. It was at that point he discovered, as he put it, that the Salt River Project had “resources and expertise they could contribute to water and environmental management. These are public resources. And we will contribute them.”
This is how it always works. Edge City is a place where the game is not yet set up. Shadow governments “move into vacuums,” one long-time observer says. “They get into one issue and they’ve got a professional here and a technician there. And then they’ll give you an opinion on what you’re ordering for lunch. And before you know it, they’ve named two of your children. They eat up power, like the science-fiction movies. They eat living things, derive power from what they’ve ingested, and develop an independent power base.”
Pfister acknowledges that “because of the expertise of Salt River Project people, we have an impact disproportionate to other organizations.” Indeed, before he finished his term, he or his outfit had helped shape the legal framework for groundwater management in Arizona, helped determine whether state projects should be required to make environmental impact statements, pushed for rail links to Phoenix’s Edge Cities, and encouraged building at increased densities in those Edge Cities. Not only do dense nodes have social benefits, Pfister points out. But they are more efficiently supplied electricity.
“I’m a believer in filling vacuums,” he admits. “Vacuums don’t work well. That’s a theory that I understand well. I look for vacuums to fill. Hopefully not in a mercurial way, but one that supports the overall community good. People would debate about that, I’m sure.”
One well-connected local attorney says, “It is amazing that a lawyer-engineer as uncharismatic as Jack has risen to something of a cultural institution in Phoenix.” Because of his role as head of the Salt River Project, Pfister was asked to help create a strategic plan for state economic development. He acknowledges that when water policies and energy policies are formed statewide, “we are always at the table.” His outfit has taken an active role in dam safety, Indian affairs, regional planning, and strip-mining regulation. The SRP has its own security division. Because of his prominence with the Salt River Project, Pfister was asked to facilitate a business group charged with reforming the school system. He became chairman of the state board of regents just in time to defend the state college and university system against attacks from the governor. He helped raise $4 million for disadvantaged students in the Maricopa community college system. He chaired the Arizona Humanities Council. When asked whether he was ranging a little far afield, Pfister replied, “I have a belief that the arts and cultural amenities really add to the vitality of a community, so it is in the best interests of the Salt River Project to support the arts.”
It was not enough that, because of the Salt River Project, Phoenix probably has the most carefully managed watershed in the world. Pfister decided that to “restore economic competitiveness,” he had to start thinking about providing day care. “Without doubt that is in the cards for the future.” Then he got involved with repackaging benefits to deal with “untraditional family environments.” I asked him whether this meant medical care for gay couples and he said, “Again, it’s only a matter of time. Ten years ago I probably did not know any for-sure gay people. Now I know a great number of gay people. That’s just part of what’s happening in Phoenix and we will have to adjust to that. The Hopi culture had a clan whose job it was literally to go out and meet with the outsiders, the conquistadors or whoever it was coming through, to try to understand what they were all about and try to bring that message back to the people to kind of alert them to what was going to happen. And essentially, I have tried to view my responsibilities as general manager to fill that role.”
Pfister has been characterized as sounding like a New Age philosopher. I found him buttoned up a little tighter than that—but I understood the point. And thanked the stars. This is, after all, a man who ended up helping shape new industry safety standards after the Three Mile Island near-meltdown, and helped shape the electric industry’s response to acid rain.
His successor will presumably have at least as much impact on Phoenix, the state of Arizona, and the United States. One hopes he is equally enlightened. After all, remember who will pick him: a corporate board of directors elected on the basis of who owns how many acres of irrigated land.
In addition to the way they fill vacuums, what’s fascinating about these shadow governments is the way they operate in the gray. They take on all manner of public responsibilities, but they retain their private prerogatives to do largely as they please. Take the form of shadow government called the public-private partnership.
Phoenix is the first municipality in America to recognize formally, for planning purposes, that it is made up of a constellation of Edge Cities, locally referred to as “urban villages.” It is logical that Phoenix came to this conclusion early. The urban village referred to as “downtown” historically never amounted to much. As recently as World War II, it was the trade and government center for a rural area that did not add up to more than 185,000 people. Even as the Phoenix area erupted to an urban population of two million, downtown did not become grand. Two other cores with better parking and fewer derelicts grew larger. One was the area north, along Central Avenue, called “uptown.” The other was the posh area along Camelback Avenue near the Frank Lloyd Wright-styled Arizona Biltmore. In fact, compared with older, Eastern metros, there is no sharp distinction between downtown Phoenix and those other centers. They all look and function like Edge Cities. Downtown sealed that when it formed a shadow government to help it compete with the other urban villages.
The Phoenix Community Alliance was started by a group of developers and bankers to promote the development of the downtown area and, hence, their properties. Soon the Alliance members realized their private, voluntary organization didn’t have the powers they needed. They couldn’t tax, they couldn’t run a police force, they couldn’t keep the streets clean, they couldn’t control the looks of the streets to make them attractive to pedestrians. So they cast about for a way to gain some real leverage in their Edge City. What they came up with was a public-private shadow government they modestly named The Management District.
The organization of The Management District is a prototypically hazy hybrid. It is a private, nonprofit corporation, but it levies its fees through the public sector. Its operating money comes from a special surcharge on the property tax collected by the municipality, yet the surcharge is made only on owners within the boundaries of the Edge City area. The money would appear, then, to come from the owners of private property. But since the municipality of Phoenix owns much land downtown, half of that money is actually public. The Management District has a board on which the mayor and the city manager are represented, as are ethnic minorities and the arts community. But the majority of the board members come from the private business side—the Alliance. The result is a thorough blurring of distinctions between public and private.
This private organization writes checks to the city to make sure that on public land the palm trees get trimmed, and the leaves raked, and the streets swept far more frequently than is the case in other parts of the city. It also writes checks to the pol
ice department to make sure that it gets more officers on the beat than in other parts of the city. These are genuine Phoenix policemen, deployed from headquarters, working their regular shifts, fully armed, and capable of making arrests, as usual. Hardly mall guards. But if the private Management District wants them to appear more tourist-friendly by wearing shorts or blazers or by patrolling on bicycles or horses rather than in their squad cars, something can be worked out. After all, the Management District is paying the freight. For that matter, if they wish an additional dozen cops, all they need do is write a bigger check. The shadow government also runs the wonderfully lurid purple-and-orange downtown shuttle bus system. It even has a marketing role, convincing the private sector to buy or lease property in its area. It is, in short, an institution that formalizes and justifies an ambiguous zone in which the public sector gets the private sector to pay for keeping a business area safe, clean, mobile, and prosperous. And the private sector gains unprecedented leverage over the public sector, especially for services not available to the mortal taxpayer. The power of the state, meanwhile, is brought to bear to enforce the will of businessmen.
There are many advantages to this kind of cooperation. One is markedly higher levels of efficiency. “There’s no question that they’re faster and cheaper. The incentives for prompt performance are stronger in the private sector,” points out Robert C. Ellickson, a professor of law at Yale who has studied shadow governments. “People can coordinate with one another to their mutual advantage more than is generally recognized. Take the English language. The people living on the island of Great Britain came together and just created a language. Nobody was put in charge. People are now coordinating in a sophisticated way. I think it’s terrific that property owners pay. This is not a calamity. This is a terrific thing.”
Indeed, in Phoenix this form of shadow government has worked sufficiently well that the Edge City competing most directly with downtown, Phoenix’s Central Avenue uptown, has created a similar but less ambitious body for itself. It is called The Improvement District. Ellickson views as a positive sign that there are many different kinds of shadow governments. This, he avers, reflects the wide and healthy range of choices people have. Shadow governments are solutions clever people have voluntarily cooked up, Ellickson argues. They will be onerous only if they become unavoidable. When he asked me if I lived in a place ruled by a shadow government, and I responded, “Hell, no,” Ellickson offered that as triumphant evidence that liberty and choice were alive in the land.
He has a point. A very sensitive gauge of what people view as their biggest problem is whatever issue causes them to create a shadow government. Among the hottest such concerns today is traffic. And sure enough, a common form of shadow government is the transportation management authority. Initially, such a power draws movers and shakers together to get roads built, traffic lights synchronized, parking rationalized, and car pools organized. Then it is typical for such an organization to branch out, in the absence of any other appropriate authority, to grapple with problems from day care to garbage collection.
But this leaves the question of whether shadow governments are of, by, and for the people. Their rights and obligations are almost always defined by property and ownership and money. They bow less to the notion that all men are created equal than to that equally venerable American aphorism, “Them that has, gits.”
These shadow governments are democratic to a point. But they rarely have much use for the principle of one citizen, one vote. If you rent your home in a place with a community association, it is generally your landlord who gets the vote, not you. If you are a spouse or a son or a daughter whose name is not on the deed, you usually do not vote. In condominiums, the property principle can be fine-tuned to five digits to the right of the decimal place. In one such place, the owner of a one-bedroom apartment got 0.06883 of a vote, and the owner of a two-bedroom with den got 0.12350 of a vote.
This one-dollar, one-vote democracy harks back to the earliest days of the Colonies, when the vote was reserved for white male owners of property because they were viewed as having the biggest stake in how the society was run. Scholars who examine these shadow governments repeatedly note how strikingly similar shadow governments are to legal and governmental structures that date back before Thomas Jefferson. Historical comparisons are as easy to make to the feudalism of Renaissance Italy or the authoritarian efficiencies of Napoleonic France as they are to the dreams of a Lincoln, Wilson, or Roosevelt.
At the very least, says Gerald Frug, “it’s a return to the nineteenth century, when there was no legal distinction between a city and a private corporation. All had the same powers and restrictions. Railroads could take your land and pay you for it without your consent. You could do anything privately that you could do publicly.”
Because these shadow governments usually gain their authority from property rights instead of through the powers granted to the people by the Constitution, they are acutely class-conscious.
“If you go back and look at suburbs built in the 1940s and 1950s,” says Douglas Kleine, “there are dog kennels and chain-link fences and four or five trucks, two of which are up on blocks. People want to be protected from the class below them. There’s very much an anti-blue-collar bias in all the truck restrictions, and how many dogs and fences. That’s the first restriction people put in—no chain-link fences at all. You might be able to put a little split rail in. Two rails high. But the front yards are supposed to remain this Victorian green pasture that you can afford not to put cows on.”
“These are governments by the wealthy, for the wealthy,” says Frug. “It is plutocracy, not democracy.” Bruce McDowell of the U.S. Advisory Commission on Intergovernmental Affairs points out that in times of tight public budgets, governments lose their independence. Transportation work is not necessarily done where the public most needs it. It is done where monied interests can have their priorities moved to the front of the line by putting up cash. With enough private money behind it, an interchange can be built not where it would best move traffic for the citizenry, but where it would best funnel potential customers into a development.
Ellickson of Yale counters that shadow governments are not anywhere near as oppressive as conventional governments. Shadow governments, he points out, rarely if ever shoulder the heaviest of burdens: the attempt to redistribute people’s incomes. Somehow, however, that is probably more comforting to those with incomes than to those without.
That is why I ended up questioning Thomas Espinoza closely on how he felt about the new Phoenix Management District.
I suppose it should not be cause for note that Espinoza is now president of the Phoenix Community Alliance. After all, Arizona became a state in 1912, and Espinoza’s grandparents became Americans before that. They helped settle the territory not long after America settled the border through the Sonoran desert between the United States and their native Mexico. Espinoza, a third-generation Arizonan, is now the head of his own development corporation. He took me for breakfast to Café la Tasca, an extraordinary Mexican place downtown that made its own tamales, fresh. His native dialect, however, turned out not to be Spanish, but that hybrid of dollars-per-square-foot arithmetic and the jargon of the Deal peculiar to American commercial English. It was with considerable relish that he explained the power plays that went into the creation of The Management District.
But the fact of the matter is that Mexican-Americans are still not what you’d call common in the halls of power in Phoenix, so I had to ask him: Won’t this district work great at keeping out “undesirables”?
“I don’t think anybody would admit this,” he acknowledges. “But what first started driving the Management District was people basically saying, ‘City, you are not doing your job right. Therefore we are going to pay more money to do it the way we want it done.’ And some of that has been the homeless issue. The private sector saying, Gee, we ought to make sure these areas are safe, secure, clean, da, da da, da da. Nobody’s ever
told me that. But my political instincts say that some of that is there.”
Suppose, I ask, they decided they don’t like people downtown with brown skin like yours?
“No, that doesn’t concern me,” replies Espinoza in a studied analysis of realpolitik. “The shit would hit the fan. We’re too much of a power base. Now if it had been fifteen years ago? That would be the agenda. And I say that without any hesitation. But not anymore. We’re part of the fabric of this power structure now. Within the next fifty years, we will be the power structure. I don’t mean that in an arrogant manner. But in my lifetime, I will see our power base shift to the other direction. I will see the day where Anglos and blacks are complaining about Mexicans being discriminatory. I will. In my lifetime I will see that.”
Is this a great country or what? I ask. We laugh.
“And I’ve got to tell you this one thing. When I came on, the Alliance had pissed off a lot of poor folks and community groups and neighborhoods in Phoenix. Luckily the board became sensi tive after I told them a number of times: ‘If you keep building high-rises and don’t worry about surrounding neighborhoods, eventually those people are going to turn on you. The day will come when those neighborhoods will have a political power base, and they are going to come after the city council and the mayor’s office and we are going to have some major problems here if the business community does not start addressing the homeless issue, neighborhood revitalization, and those kinds of things.’ So we are putting together a Local Initiative Support Corporation—a pot of funds that will lend money to neighborhood groups to revitalize neighborhoods.