BY BOB WILLIAMS | AUGUST 7, 2013
Cave Creek Economics
A few weeks ago, the Scottsdale Republic published an in depth assessment of Carefree’s diminishing economic condition. I’m sure that many of you read it. To simplify, and hopefully not over simplify, it said that many shops (businesses) have closed, more are closing, there are no crowds and no real draw for crowds, revenues are declining, Carefree has no property tax, and the resident population cannot support the town. Like Cave Creek, they need visitors/tourists. This was pretty much the same set of conditions in Cave Creek after the development bust some 5 years ago that spawned the infamous White Paper. So, indulge this White Paper veteran on his take on Cave Creek Economics 101.
Apart from lots of details that aren’t very interesting and important only in the aggregate, we recovered economically largely because the Walmart timing was fortuitous and Walmart met or exceeded our tax revenue expectations and theirs. Carefree has struggled largely because CVS and Lowe’s have not performed as expected. Here is one fact, however, that is critical to understanding Cave Creek’s economics and few bother to understand it; certainly not the new town council slate. If every square foot of vacant space in the town core was occupied and producing sales tax revenues at the average of the aggregate core, it would never provide more than about 20 percent of the revenue needed to operate the town even with austere budgets. That fact was exposed based on rigorous analysis in 2009, and it is surely true today within a few percentage points one way or the other.
Don’t take me wrong. I am not saying that the town core is unimportant. The iconic town core is a critical component of what makes Cave Creek, Cave Creek right along with low density, open space, pedestrian/equestrian/bicycle trails and so forth. It is extremely important and must be protected and carefully managed. It is simply not the economic engine many want to believe it is. A good part of that, of course, is that you can’t put everything in the town core – such as a Walmart or a trailer park and in the words of a former vice mayor, you can sell only so many rubber tomahawks.
The bottom line is simple - absent a development boom, and don’t hold your breath, Cave Creek’s economic engine and economic future, my friends, is on Carefree Highway and Cave Creek Road south of the Carefree Highway. Period. If Cave Creek ever hopes to have the discretionary dollars needed to purchase open space, expand/improve infrastructure, support some nonprofits, preserve the community and live the good economic life, it better get cracking in a serious way out there because Scottsdale and Phoenix will continue to snap up every potential opportunity – and put it right there just like they do now.
Unfortunately, Cave Creek now has a huge disconnect and it is significant. The new town council slate has not a clue on this critical economic issue and they continue to gloss over that void with their shallow and unsubstantiated distraction and obfuscation allegations such as transparency, agenda, financial accountability, audits, ad infinitum. But, with regard to the fundamental and essential issue of sound economics and Cave Creek’s future, their actions and preposterous comments below are telling and are just those that I remember from the slate candidates (Scottsdale Trenk, Durkin, Monachino, Spitzer, Wright) during the campaign:
• First, they got their Carefree operative, Jim Pierce, to file a referendum for them against the rezoning to commercial of about 4 acres behind CVS Pharmacy. The Cave Creek voters very wisely slapped them down 2 to 1 on that absurd endeavor and it clearly demonstrated how far out of touch with reality this slate really is.
• Second, Mr. Monachino has evidently never understood the revenue issue. He has served on the town budget committee for years, yet he opposed Walmart while on the Planning Commission (but he likes the trailer park in town core).
• Third, here are some random campaign comments and I know that you heard many more:
• ‘I will not approve any development outside the town core until every square foot of the town core is filled.’
• ‘We should sell the water company for a dollar’.
• ‘We should not develop commercial properties on Carefree Highway’.
• ‘What do you want to see behind the CVS Pharmacy? Nothing.”
• ‘Zoning of the parcel on Carefree Highway across from Home Depot and Fry’s should not change.”
The problem is as obvious as the solution. If this woefully uninformed town council slate cannot get educated very quickly and pull its collective head out of its collective behind and vigorously pursue sound economic development, Cave Creek will needlessly forfeit all opportunity for true economic independence and likely end up in economic trouble again. If their ‘agenda’ continues to be vengeance, buzzwords and nonsense distraction, Cave Creek better send them packing and the sooner the better. Our economic future is too important to ignore.
Bob Williams is a Retired Army Colonel who served two tours in Vietnam. He is a Graduate of the U.S. Army War College and holds a BS and MS in civil engineering. Bob served 25 years as a Construction Executive, managed the design and construction of Bank One Ballpark (Chase Field) and a $2.5 billion program for the University of North Carolina. He is a 13 year resident of Cave Creek, serving 5 years on the Planning Commission, a member of the White Paper Committee, and advised the town on the design and construction of its new wastewater treatment facility.