Downtown Showdown

The City Council Is Taking A Hard Look At The Tucson Downtown Alliance's Business Improvement District.

NELSON WARNELL IS a big downtown booster. He's renovated three houses in historic Armory Park, the downtown neighborhood that he calls home, and he's belonged to the neighborhood association and to the National Trust for Historic Preservation for years.

He also has about seven years of experience in security work, including a stint heading up a security company.

So when he landed a job with the security team of the Tucson Downtown Alliance, the group that runs the Business Improvement District, he was excited at the prospect of helping downtown rebound.

But after eight months of wearing the Alliance's purple colors, Warnell was so disgusted by the operation that he quit. Executive director Carol Carpenter, he says, is clueless about security.

"Every day we'd come and there'd be something else we'd be told we could or couldn't do. It was impossible to do our job."

He complains that the "purple people" were set loose on the streets without the 40 hours of police training Carpenter had promised, and their resulting lack of savvy sometimes was a danger. In fact, Warnell, a strapping man who towers over 6 feet, says he finally left when he was assigned to work with somebody he didn't consider up to the tough job of night security.

Warnell also challenges Carpenter's glowing statistics that show nuisance incidents declining downtown. Carpenter, he claims, ordered her workers to reduce the number of 911 calls they made and routinely manipulated the tallies of incidents in her monthly newsletter.

Carpenter, naturally enough, denies his charges and says her numbers, which she claims show a staggering 80 percent drop in criminal activity in the last year, come right out of the purple people's logbooks. And she acknowledges that the police training was slow in coming, but that staff are now undergoing weekly sessions.

Warnell, who held the title of night security supervisor, is not the only higher-level employee to depart. Carl Jennings, a 13-year veteran of the Tucson Police Department, says he clashed with Carpenter and was fired in January, within four months of being named security supervisor. Maintenance supervisor Richard Velasco, a detective with 22 years at the Pima County Sheriff's Department, quit in the spring.

Already working elsewhere in another security job that required a polygraph test, Warnell brushes off the idea that he's merely a disgruntled employee.

"I live downtown," he says. "I wanted this to work...I'm bitter about the way it's been mismanaged."

THE EX-NIGHT SUPERVISOR is not the only one making noises against the Alliance, the 1-year-old group charged by the city with marketing downtown and sprucing it up. City politicians have taken aim at the Alliance and Carpenter. Early this month, Carpenter was called on the carpet at a City Council meeting; Mayor George Miller cut her off mid-speech when she was enumerating the accomplishments of her first year on the job. Councilman Steve Leal, of Ward 5, accused Carpenter of spending more time recruiting outside businesses than on delivering services to local merchants, while José Ibarra, Ward 1, said the fees the Alliance collects from little businesses are too high.

Finally the mayor and Council voted unanimously, 7-0, to conduct an audit of the fledgling group, authorizing City Manager Luis Gutierrez to investigate not only the group's finances but its management.

"We've been asking to see what is being done with the money we've been contributing," says Ibarra. "All we see are pots and plants."

The city gave the BID a $200,000 startup loan last year, and pays $215,883 in annual assessment fees. That means that fully one-third of this year's operating budget of $620,000 came directly out of city coffers. If you add in the one-time loan, the proportion is even higher.

"What have they done with (almost) half a million dollars?" Ibarra demands.

Margo Susco, owner of Hydra, a leather shop at the corner of Congress and Sixth, was recently elected co-chair of the Alliance, along with Hotel Congress owner Richard Oseran. Passion is a given in any debate over Tucson's downtown, and Susco matches Ibarra's decibel for decibel. But she's decidedly pro-Alliance.

"No one in the city or the media has asked us what we think," she says, still angry that a small troop of supportive merchants was not allowed to speak at the pivotal City Council meeting.

"We have overwhelming merchant support for the BID," Susco says. ""I have been downtown five years and this is the first time we have seen a collective effort on the part of the merchants and the neighborhoods. We have a voice. We are working for common goals."

Yet the Alliance has been tardy in turning over to the city required reports on its activities and finances, Gutierrez told mayor and Council, and the reports that they did send were "rather vague."

The audit was prompted by "valid questions about priorities," says Assistant City Manager John Updike. "Where is the money going and with what emphasis?"

Oseran pledges cooperation with the city auditors, who have already begun vetting the Alliance's books. "I don't think the audit will show any impropriety," he says. Still, he sees a turf war going on over control of downtown.

"The real story," he declares ominously, "is who is out to get the BID and why?"

THE ALLIANCE HAS run into opposition since it was first a gleam in the eye of a group of downtown business people. The vote was divided in February last year when the mayor and City Council first created a new Business Improvement District, a 30-block slice of the city center, to be financed by a combination of public and private funds in the form of assessments on property. A vocal contingent of small merchants, particularly from the alternative and arty east end of Congress, argued that the Alliance, which manages the BID, showed every sign of being a friend of big business and a foe of the small.

It didn't help that the self-appointed Alliance board was top-heavy with big property owners or that several large landowners were allowed willy-nilly to opt out of the district -- and out of the fees. There were fights over the way assessments were figured for properties, and fears that the new tax would drive under businesses that were already struggling.

But pass it did, and the first year of the BID has been tumultuous, to say the least. Carpenter has been called a visionary by her fans and an incompetent by her foes. Despite Warnell's allegations, supporters sing the praises of her troops of "purple people," who've cleaned up the streets and made them at least seem safer. Opponents counter with charges of inappropriate politicking and of cronyism on the Alliance board and staff (Carpenter's husband is a part-time security staffer), and a failure on Carpenter's part to come up with a solid economic plan for downtown's abandoned storefronts.

The Alliance won some political enemies when it threw itself behind the Daystar proposal for Rio Nuevo South, a plan the city has now rejected, and especially when its former co-chair, Thom Laursen, doubled as volunteer lobbyist for the Alliance and a paid lobbyist for Daystar. And along with the audit at the end of Carpenter's first year has come the threat of a lawsuit from The Arizona Daily Star over access to the Alliance's documents. The legal imbroglio is part of a continuing argument between the media and the Alliance over whether a group that takes in so much public money can declare itself to be private.

And if relations with the press are stormy (the board forbade Carpenter to talk to a reporter for this story, then relented and allowed her to answer certain questions), relations with the city have all but broken down. This is no small irony in light of the fact that Carpenter, a former city staffer in the economic development office, was hired in part because of her presumed contacts with the city.

A couple weeks after her dressing down by the City Council, a battle-weary Carol Carpenter sits in her Pennington Street offices, gaily decorated by a neon sign announcing "It's Happening Downtown." She sighs when asked about the criticism her group's been getting.

"I never expected it," she admits. "In most cities where BIDs are, cities are pro-active partners."

SO HOW DID the Alliance get to this point? Carpenter maintains that it's too early to judge the fledgling program, saying it needs more time to get its "sea legs." She was hired August 2, 1998, and her first priority was to get the street services in place. The purple people were hired and launched 28 strong by mid-October, two and half months later. "We didn't wait to think about risks," she says, "we did something!"

Dian Magie, who heads the Tucson Pima Arts Council, which took quite a few hits of its own in its early years, also pleads the case for more time.

"Downtown desperately has to have something coming in," says Magie, whose Stone Avenue offices are within the BID, ""but it's not going to turn around fast."

In fact, the Alliance came in just when downtown had reached its "lowest ebb," as Oseran puts it. He should know. As the owner of the Hotel Congress for 15 years, he's seen plan after revitalization plan sparkle and then fizzle. And in the last year downtowners have been stricken by the loss of such flagship stores as Yikes/Picante, Café Magritte, J. Kareiva's, Bertrand's Books and Huntington Trading Co. The funky East Congress strip has long operated under a dismaying arithmetic -- the perpetual addition and subtraction of tiny galleries and eclectic treasure shops -- but these were some big guns. A new restaurant, Irene's, has recently gone into the Magritte space, but established merchants consider some of the other new arrivals, including a tattoo parlor and a Hell's Angels headquarters, a little dicey.

Magie and others agree that the Alliance has had some successes in this dispiriting retail climate. Even some of Carpenter's fiercest critics effusively praise her purple people, the most visible and most popular achievement of the Alliance's first year. Dressed in their trademark eggplant purple shirts and khaki pants, they walk the streets of downtown day and night. The maintenance workers clean sidewalks, eradicate graffiti, pull weeds and haul trash. The security battalion, armed with two-way radios tuned into the police, does everything from persuading the drunk and the disorderly to move on to escorting late-night cocktail waitresses back to their cars. Nearly everybody's pleased to see downtown cleaner, and nearly everybody agrees that the semi-official-looking purple staffers roaming the sidewalks make people feel safer.

Brian McLain, proprietor of Congress Street Store, at the corner of Congress and Fifth, and of Jet Set Collectibles on Congress up the block, is one of the Alliance's most strident critics. In business for more than three years, he's one of the small retailers who believe the Alliance is aimed toward future large-scale development.

"I'm not against the BID," he says, leaning on a cooler in his small food store. "I don't care for the people who started it up. They're not there for me, but for future development. They have not been there for small business."

Yet McLain agrees that under the purple-shirted patrol, "Trash (pickup) and security have been vastly improved over (the city's) base-level services. I give a lot of credit to those guys. The guys in purple have backed me up on many occasions."

Ditto for James Graham, the downtown artist and restaurateur who has fought loudly and publicly with Carpenter over conflicting visions of the future of downtown. The two recently wrote dueling opinion pieces in the Tucson Citizen and quarreled on a radio talk show. Graham wants to snag the vacant Thrifty block of Congress still owned by the Federal government for a Museum of Contemporary Art, while the Alliance has favored private commercial development there.

Yet Graham says, "The purple guys work hard, they've done great things. They're keeping an eye on things, walking out in the hot sun, planting the flower pots. Something is better than nothing. I'd rather have more policemen with cars and radios, but since we're not gonna get that, it's reassuring to have them walking down the street at 11 at night."

And merchants who are fans wax downright ecstatic over the Alliance and all its works. Mary Lou Focht, who's been invited to join the BID board, owns the leasing agency for Old Town Artisans as well as the complex's restaurant, La Cocina, and the Old Town Pot Shop. Besides praising the Alliance's purple shirts to the heavens, Focht lauds the group for timely help with business problems.

One Friday early in the summer, she recounts, the water department left notices on Old Town's doors saying that the water would be shut off all day Saturday, an all-important sales day during the sleepy summer. Focht got nowhere trying to reach anybody in authority. So she called the Alliance, and 20 minutes later her problem was solved. Alliance staffers had made the right call, she says, and learned that the water shutoff was actually scheduled for a neighboring street. Old Town would be unaffected.

"The Alliance has made a world of difference," says Focht, who's been a downtown merchant since 1993. "From being in a vacuum, we (moved) to having security and cleanliness. From feeling like a helpless downtown business owner to having someone to call -- one central location to call for help."

A random survey of businesses and non-profits in the district by the Tucson Weekly turned up similar opinions, as has one being conducted by the Alliance itself. Many merchants said that the monthly assessment fees have been less a problem than expected, though George E. Huffman, owner of Raw Gallery on Sixth Avenue and a part-time employee of The Weekly, considers his $200 annual fee steep for a problematic neighborhood.

Jim Cook, general manager of Arizona Theatre Co. and a BID board member from the start, said patrons and staffers alike appreciate the street security after ATC's evening performances at the Temple of Music and Art. He's echoed by Robert Yassin, director of the Tucson Museum of Art, which has always had its share of homeless lingering in its plazas. Mark Levkowitz, manager of the Chicago Music Store on Congress, values the street workers too, while TPAC's Magie describes the purple shirters walking schoolkids enrolled in TPAC's afternoon programs to the safety of the library when parents are late picking them up.

And Royal Henry, owner of the brand new Royal Elizabeth Bed and Breakfast on Scott, has been impressed with the delicacy with which the transients are treated by the purple people.

"There was a drunk guy on my step," says Henry, who sees the purple workers walking by several times a day. "They were real polite, they knew his name," and got him moving along.

Susco says the Alliance has benefited downtown in numerous other ways, from helping merchants with leases, to negotiating with the city to get 10 sorely needed new parking spaces on Sixth Avenue, to staging events like the May 1 Party at the Heart, which celebrated Steve Farley's new tile murals on Broadway. Drawing on Farley's cache of historic photos, Carpenter papered over the windows of vacant stores with poster-size reproductions picturing Tucsonans strolling a crowded downtown in days gone by.

A tenant relations staffer has recently been hired, and so has an urban planner, Don Durband. Coordinator of the facade fix-up program, Durband says that the effort to restore storefronts to a mid-century look has been stymied by the city's slowness in releasing the designated funds to the Alliance. (Updike, of the city, replies that the contract is still being hammered out because the Alliance has been slow to accept full responsibility for the program.)

"We're trying to get rid of the one-way roads," adds Oseran, and board members have been working with the city to determine routes and stops for a new, free shuttle soon to be trundling through downtown's streets. They're working on signage, too, and marketing, and Oseran says they've been instrumental in persuading the state to turn over its parking garage on West Congress to public use.

YET MANY CRITICS say that the BID hasn't gone far enough. Elyse Barnett, who's owned Ace Rubber Stamps and Engraving for 37 years downtown, agrees that the purple people "make the street look nice"but the BID just doesn't seem to be accomplishing what I thought it would, in bringing people downtown and in doing something about the parking situation."

Vic Mongelli, the owner of the 8-year-old Mongelli's Good Food Place on Scott, considers the Alliance "a start, in terms of cleaning up downtown, making it more presentable," but its weekly Farmers' Markets are a hindrance to his business. For one, the Wednesday market closes off Pennington, which makes downtown's tangle of one-way streets harder to negotiate and his store harder to find. And he thinks the food being sold by vendors competes with regular eating establishments.

Daryl Childs, an artist who opened DC/Harris Gallery on South Sixth Avenue last year, says that services were slow in coming to his part of downtown. In fact, he asserts, the flowerpot outside his storefront showed up only the week before Carpenter was to address the City Council, helping to round out her statistics of 160 flowerpots placed downtown. And despite the purple people, he says, "Vagrants continue to be a problem."

Ron Rose, who's run his Wilde Rose Coffee Co. downtown seven years, in the last year on Congress Street, was recently invited to join the Alliance board. He's happy with what he calls a "cleaner city and less dangerous city," but he has a laundry list of complaints.

The Alliance ought to be working more on parking, every merchant's biggest headache, Rose says, and they should be pressuring the federal government to release the empty Thrifty block buildings. He thinks they were wrongly sidetracked into lobbying for Daystar at Rio Nuevo South, which he argues "would kill downtown: it would just be another big mall." Most importantly, he says, Carpenter has failed to formulate a step-by-step plan for combating downtown's economic blight.

"You need to make a list of the stores you need downtown, compare it to what you have and try to market it. That's known as planning. If it's being done I've never seen it."

Rose said he was distressed by the stormy BID board meeting held in mid-August, where the chorus of anti-city invective reached such a pitch that member Robert Gonzales, head of the Greater Tucson Economic Council, finally intervened with a plea for conciliation.

"Instead of focusing on the downtown issues, the political haranguing was awful," Rose says. "They continue to get bad publicity and it's warranted."

CHALK IT UP, maybe, to a culture clash between the private world of business and the public world of government, but the Alliance sometimes seems to stumble from one public relations disaster to the next. The Alliance has been conspicuously tone-deaf to the appearance of impropriety and to conflicts of interest.

It has been often reported that Carpenter helped the BID's first co-chairs, attorney Thom Laursen and property manager Sheila King, to organize the group while she was still a city employee. The board then hired her as executive director at a salary of $60,000 to $65,000, about $20,000 more than she was making with the city. And though Carpenter stoutly denies it, her hire had all the appearance of an insider deal: that she had helped craft the BID, on the city's dime, with the expectation that she would get the lucrative job of executive director.

The hire hurt the Alliance's image, and a year later it still rubs some people the wrong way. "The Carol Carpenter gig," Raw gallery owner Huffman calls it, "her friends setting her up into this job."

The board's only response to ethical questions about the hire was to take out a resolution declaring that it was not a conflict of interest. Nor was it a conflict of interest, they asserted, when they rented out offices in a building managed by co-chair King, thus contributing to her company's profit margins.

After promising the media that their meetings would be open, the board barred the press from attending the pivotal meeting where Carpenter was voted in as director. And they evicted Julia Latané from the same meeting, kicking The Grill co-owner off the board on the grounds that she was not a property owner. Then they warmly welcomed Jane McCollum, vice president of MRO Properties, the big out-of-state company that had just bought La Placita. Latané's ouster, juxtaposed with McCollum's appointment, sent a bad signal to small business owners already fearful that the BID was a real-estate game for the big guys.

When she was still with the city, Carpenter worried aloud that a big complex at Rio Nuevo South could hurt the rest of downtown, but once on the Alliance payroll she lobbied hard for tax-increment financing (the money that would help fund RNS) at the state legislature. Now Carpenter touts the law grandfathering Tucson into the TIF as one of best achievements of her first year. Yet her advocacy was tainted by Laursen's dual role. Co-chair Laursen pitched the Alliance position along with Carpenter, but he was wearing two hats: at the same time that he lobbied for the non-profit, he acted as a paid lobbyist for Daystar, which stood to benefit from the TIF funding. It was hard for legislators to know whether he was arguing for the good of the city of Tucson, or for the good of his client.

Outraged city politicians cried conflict of interest, yet the Alliance couldn't seem to understand what the fuss was all about, and voted to support the Daystar plan. The city ultimately turned down Daystar, and an unrepentant Laursen declared at the last BID meeting, "My client was screwed."

Oseran, who handled most of a reporter's questions on ethics, was at his most subdued when asked about Laursen's lobbying.

"Although that did not present a legal conflict of interest," he says carefully. "It certainly presented the appearance of one. It was an unfortunate circumstance."

Oseran is more combative on the subject of Carpenter hiring her husband. Mark Carpenter is a part-time Alliance security staffer who earns $7 an hour, working mostly Fridays and Saturdays when evening crowds are at their peak. A Baltimore cop for four years, "Mr. Carpenter has more relevant experience than any other individual hired by the Alliance for the position of security personnel," according to an Alliance statement, notwithstanding the fact that Carl Jennings, the security supervisor whom Carpenter fired after four months, had 13 years with the Tucson police.

Oseran sees nothing wrong with the spousal hire; he notes that the work is neither glamorous or high-paying. Nor does he object to the hiring of a woman who previously worked with Carpenter's horses.

"I've used my family members in my business," he exclaims. "This is a private agency. He was helping before he got hired. Carol has worked to the point of exhaustion. "Are we going to say the Alliance isn't a good thing because two spouses work there? All we read is criticism."

One of the Alliance's critics, Councilman Ibarra, is not amused.

"I'm tired of subsidizing the Carpenter family," Ibarra says.

As for the firings and quittings of top security staff, Oseran says they are personnel matters he can't discuss. But he does say that the board was aware of Carpenter's actions in each case.

As an attorney, Oseran is also the one tangling with the Arizona Daily Star's lawyers over the release of Alliance documents. He makes a distinction between the private Alliance and the public BID, arguing that the Alliance is a private non-profit that happens to contract with the city to manage the public district. To settle the conflict with the paper, the board voted to turn over material on Mark Carpenter's hire and some of Carol Carpenter's out-of-town marketing trips, including one to Las Vegas, without conceding any legal obligation to do so. But in the end they provided no original documents, only a written narrative.

Star attorney Phil Higdon said that as of last week no decision had been reached on whether to proceed with the suit. Oseran acknowledges that "the issue may get litigated," but he remains adamant that no meetings will be advertised and that no documents he deems private will be turned over to the press.

Security man Warnell says that the purple people were inappropriately deployed for politicking. For a May mayoral candidate forum, he and his fellow purple shirters were ordered to abandon their street posts and drive all over town to hand-deliver prepared questions to the candidates. Only trouble was, they had nothing for Democratic front-runner Molly McKasson, the only candidate so neglected. And Warnell swears contribution envelopes for Republican Mayoral Candidate Robert Walkup were briefly on display in the Alliance offices. Carpenter responded to an earlier query that she knew nothing of the envelopes. An Alliance memo also urged employees to complain to City Council members after they shot down a proposed New Year's millennium Salsabration that Carpenter had pushed for.

IT'S UNFORTUNATE TO have every little nitpicking criticism answered," Oseran says, wearying of complaints against the Alliance. He says it could be another 25 years before downtown gets a similar shot at revitalization. "If we get the wheels knocked out from under us the whole community is going to pay the price". The vision is here. We have the vision."

Yet he does concede that the Alliance could have communicated better with its members in the first year. Susco, more conciliatory, says the Alliance members are the first to admit they've made mistakes. And indeed the election of these two veteran downtown merchants to the co-chair positions is like a breath of fresh air to some observers.

In fact, the Alliance seems to be recognizing there are fences to be mended. A slew of new members has been invited to join the board, including, conspicuously, the same Julia Latané who was kicked off last year, and some arty types like Giulio Scalinger of the Screening Room and John McNulty of the Tucson Museum of Art. Ken Scoville, a local historian and passionate preservationist, says he was invited by McCollum after doing some historical consulting for her at La Placita. An implacable foe of demolition of historic properties, Scoville may well bring the long view to business beavers eager to bulldoze downtown's past.

Carpenter says the group is still on track with its two-year plan. With street services in place, the Alliance will move heavily into its "tenant relations, our number one priority; business assistance, and retail mix planning." And she's reaching out to the arts community, working with Sarah Clements of the Tucson Arts District Partnership on a gallery/retail stabilization plan. She's invited James Graham to present his plan for the Museum of Contemporary Art at the Alliance's next meeting.

"We need retail and day and night activities -- James' proposal does that," Carpenter says.

But all this conciliatory activity may be too little too late. Ibarra is poised to pull the plug on the Alliance regardless of the results of the audit, which should be finished by early October. He hopes to divert the city's contribution to the BID into such projects as tax relief for downtown or small-business loans. Like Ibarra, Council member Jerry Anderson, of Ward 3, voted against forming the BID last year. He says that he'd still prefer the city to police and clean downtown, replacing the purple people, while perhaps keeping the Alliance on as a downtown marketing group. But he's willing to listen, and plans a meeting this week with Oseran.

Councilwoman and Democratic mayoral hopeful Janet Marcus believes that it's way too early in the game to condemn the Alliance and suggests that the city audit might be helpful for such a new group.

Meantime, there are small business owners like Royal Henry to reach out to. He says sheepishly that he had no idea until now that the Alliance went beyond the purple people.

"I hear a lot of grumbling but I don't understand what they (the Alliance) were supposed to do. I wasn't aware that they were supposed to do something beyond maintenance and security."

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