Valley & State 11-10-2019

Arizona Republic

❚ SUNDAY, NOVEMBER 10, 2019

❚ 1D

Valley&State

❚ AZ Economy: Strong market could hide problems with portfolio. 2D ❚ Viewpoints: Shared river and vision can defi ne future of the Valley. 3D

EJ Montini Columnist

How a tax break intended to help low-income Arizona communities could turn into a windfall for rich investors

Arizona Republic USA TODAY NETWORK

Watching words from a war go up in smoke Just about every dad in the neighborhood where I grew up seemed to be a World War II veteran. Still, I was 10 years old, going on 11, when I fi nally, defi nitively realized — because I watched him burn the evidence — that my father was one of them.

I’d seen photographs of him in uniform, of course, including my parents’ wedding photo. And I’d heard vague references to his time “in the service.”

That’s how he always referred to his years in the Army during the war.

I’d even seen a page of scribbled drawings he’d sent to my mother while stationed in Camp Grant in Illinois, funny little sketches of a soldier (him) cutting grass, doing “KP” (scrubbing dishes) and cleaning latrines.

And over the years I’d heard allusions during family gatherings about him having been overseas, mostly joking comments centered on how my father’s older brothers hovered protectively around my mother while he was away.

This was diff erent.

We were moving out of the small duplex house where my father was born and had lived his entire life.

My parents found a small freestanding home in one of the other company-built neighborhoods in our steel mill town outside of Pittsburgh. They were cleaning out some of the stuff they didn’t want to take with them.

In those days, a least in our neighborhood, just about every family had an empty oil drum in the backyard that was used to burn trash, junk, broken furniture, old newspapers, whatever.

It wasn’t an environmentally enlightened time.

My father was hauling out the unwanted dregs from our house and letting me to toss items into the fl aming can. We were laughing and joking and generally having a pretty good time when my mother came outside holding a bundle of letters, stacked and bound together with what looked to me like a pretty fancy ribbon.

I recognized the stationery.

I’d seen my mother looking through the bundle once and had asked about the thin, translucent paper that had my father’s perfect, Palmer Method penmanship visible on both sides. Onion skin paper she called it. It’s what my father used for the letters he wrote to her during the war.

My father and I were standing by the fi re and my mother was holding the bundle of letters. She looked at the fi re.

He nodded. She looked at him, more intently this time, as if to say, “Are you sure?” He nodded again.

She dropped them into the fi re.

My parents rarely spoke about the war years. My mother worked during that time as a butcher — a butcherette she sometimes called it — eventually giving up the job to a returning veteran.

My father after his discharge returned to the steel mill, where he’d been working before he enlisted.

They moved on.

My father didn’t join any veterans organizations or participate in parades or anything like that. It wasn’t his nature. It wasn’t the nature of many veterans from his generation.

Late in her life I asked my mother about the letters I’d seen them burn. I asked if she’d wished she could reread them again.

Cars drive around Old Town Scottsdale’s Fifth Avenue Shopping District on Oct. 19. NICOLE NERI/THE REPUBLIC

OPPORTUNITY FOR WHOM?

D

Catherine Reagor, Jen Fifield, Lorraine Longhi and Ronald J. Hansen Arizona Republic

| USA TODAY NETWORK

owntown Phoenix, Scottsdale, Gilbert and Tempe Town Lake — among the Valley’s biggest magnets for jobs, trendy living spaces or just hanging out — will benefi t from a tax-break deal created to draw wealthy investors to low-income areas.

The hot spots likely will see even more development now that they are tagged as “op-

portunity zones.”

They’re among 85 metro Phoenix areas that got the designation based on federal rules. The opportunity zones include areas where Nike, Amazon, Arizona State University and Phoenix Rising soccer club are launching major developments.

They also include neighborhoods where thousands of apartments and a growing number of hotels are planned or under construction.

But in some spots, an abundance of self-storage units are being developed, doing little to lift low-income areas.

The opportunity zones, created in President Donald Trump’s 2017 Tax Cuts and Jobs Act, provide a tax break aimed at driving investment and fast-track development to areas that need aff ordable housing, shopping centers that off er local services and more jobs.

An Arizona Republic analysis of opportunity zones in Maricopa County found that while some of the areas could use help, others are thriving and likely would draw developers without the tax break.

The costs and benefi ts of the program will be tough to track. Investors and builders aren’t required to publicly disclose whether they take the tax break.

Mark Stapp, a real estate expert and director of the Masters of Real Estate Development program at ASU, questions whether what he calls an “ill-defi ned” program will benefi t the areas that need it most.

“It has a big public cost with the taxes not collected, and no real requirement for public good,” Stapp said.

How do the opportunity zones work?

U.S. opportunity zones are poised to save investors billions of dollars in taxes during the next decade.

Investors and developers can get the tax break in a couple ways: Investors can deposit their money in opportunity zone funds that will be used for a project, or developers can directly spend on their own projects.

To get the tax benefi t, investors must quickly reinvest money from capital gains, which is the profi t from the sale of real estate or an investment. Putting those profi ts into an opportunity zone allows people to reduce or even escape paying capital gains taxes.

U.S. investors typically pay more than 40% in taxes on their capital gains.

Marc Schultz, an attorney with Snell & Wilmer, said the idea was to get wealthy individuals to reinvest their capital gains.

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Investment results after 10 years Those who quickly re-invest capital gains to fund an ‘opportunity zone’ development can cash out after 10 years, owing no taxes on profits or the initial stake.

Standard investment Initial investment: $10M After 10 years: $12M ‘Opportunity zone’ investment Initial investment: $10M After 10 years: $18M Source: Chris Loeffler, CEO of investment firm Caliber

“The government’s intention here was to avoid parking their money and not doing anything with it,” said Schultz, who has helped dozens of opportunity funds launch.

Investors must move fast to capitalize on the tax break.

They have 180 days from the time they sell stocks, a business or real estate for a profi t to reinvest the capital gains into an opportunity fund. The money then must be invested into a development or business in an opportunity zone within a year.

The development typically must be done within three years of receiving capital to qualify for the tax break.

After 10 years, investors can cash out and not owe any taxes on the profi ts, including their original stake that came from capital gains on other investments.

Chris Loeffl er, CEO of Scottsdale-based Caliber, which has a $500 million fund to invest in opportunity zones, gives this example of how it can work: ❚ An investor nets $10 million in capital gains. ❚ By making a standard investment, growing at 8% annually and paying applicable taxes, the investor’s original $10 million would be worth approximately $12 million after 10 years. ❚ By investing the same amount in an opportunity zone, earning the same return, and eliminating capital gains taxes, the value would be approximately $18 milSee OPPORTUNITY, Page 2D

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2D ❚ SUNDAY, NOVEMBER 10, 2019 ❚ THE ARIZONA REPUBLIC

AZ Economy Strong market could hide portfolio problems Russ Wiles Columnist Arizona Republic USA TODAY NETWORK

A bullish stock market hides a lot of sins. With the Dow Jones Industrial Average, Standard & Poor’s 500 and other barometers hitting new highs lately, there’s plenty of opportunity to enjoy the profi ts while overlooking problems in your investment mix.

In other words, you’re doing well and making money. But could you be faring even better? Here are some potential areas to address:

Consider portfolio pruning If you have been investing for many years, you might have dozens of stocks, mutual funds and exchange-traded funds, so a little weeding and trimming could be in order.

With individual stocks or bonds, you likely need to hold at least a dozen issues, from diff erent industries, to achieve a minimal amount of diversifi cation. With funds it’s a diff erent story — you already might have more diversifi cation than you need.

“The number of funds you own is less relevant than how they work together to manage your overall risk,” noted Mark Riepe, a senior vice president at the Schwab Center for Financial Research, in a blog. “If you own multiple funds with overlapping holdings, you could be less diversifi ed than if you owned a single fund with broad market exposure.”

There isn’t a magic number of funds above which it makes no sense to keep piling on more. One or a few highly diversifi ed stock and bond funds could be suffi cient, especially one like Vanguard’s Total Stock Market index fund.

Conversely, a dozen or more funds might not be too much if you think they all add value, their costs are reasonable and you don’t mind monitoring all that

Opportunity Continued from Page 1D

lion after 10 years.

It’s yet unclear how much the tax break will help areas struggling to attract aff ordable housing, local businesses and jobs.

How Arizona chose opportunity zones To qualify as an opportunity zone, areas must have 20% of its households below the poverty rate, or have a median family income of less than 80% of the region or state’s median family income.

In metro Phoenix, where the median family income was an estimated $63,686 as of 2015, that’s about $50,950.

The federal government required states to use U.S. Census data from 2011 to 2015, even though 2016 data was available at the time the zones were proposed. Metro Phoenix was still dealing with the aftereff ects of huge job losses and a foreclosure crisis for most of those fi ve years.

That’s why popular areas with rising home prices and incomes now, such as downtown Scottsdale and downtown Phoenix, qualifi ed, said Shawn Neidorf, vice president of research for the Arizona Commerce Authority. The state agency worked with local governments to submit opportunity zone designations.

In all, about 10.6% of the areas selected as opportunity zones in the Phoenix area would no longer qualify for the program if the latest Census data from 2017 was used.

Those areas include Old Town Scottsdale, south Scottsdale, the north Phoenix area including Paradise Valley Mall and the northwest Phoenix neighborhood where the ailing Metrocenter mall is located.

Downtown Scottsdale’s income nearly doubled from $45,994 in 20112015 to $91,071 in 2013-2017.

That has Scottsdale Mayor Jim Lane

Montini Continued from Page 1D

She said she didn’t need to. She remembered what they said.

I’d love to have read them. The curiosity of a son and a writer. Just as I’d liked to have known more about my fa-

stuff .

“But if you have more than maybe 15, it might be a sign you have become a collector,” said David Fernandez, a certifi ed fi nancial planner at Wealth Engineering in Scottsdale.

Do some year-end tax planning If your investments are held in taxable accounts, year-end selling strategies could help. The usual advice, if you hold investments showing a paper loss, is to sell them before year-end to reap a deduction. In general, if your losses exceed your gains, up to $3,000 of the excess could be deductible, while the rest can be carried forward to future years.

But if you fall in a low tax bracket, where the 0% capital-gains rate applies, it might make sense to do the reverse and harvest gains on which you could avoid taxes altogether.

In 2019, singles with taxable income below $39,375 and married couples below $78,750 fall in the two lowest federal income brackets, where they qualify to avoid taxes on long-term gains held more than one year, according to Baird Private Wealth Management.

“While that doesn’t mean low-income taxpayers can have an unlimited amount of tax-free gains (as the gains themselves can push a person into a higher bracket), it does provide a planning opportunity,” Baird noted.

If you hold actively managed funds in taxable accounts, beware year-end capital gains distributions, too. These payments refl ect internal selling by the portfolio manager, which means you can get stuck with a tax bill even if you held tight. After a bull market spanning 10-plus years, “Some funds have big gains built up,” Fernandez said.

Streamline investment categories It’s not just a question of holding too many stocks or funds. You might own types of investments that just don’t

questioning why the area was tagged as an opportunity zone. “We are not in the habit of trying to throw accelerant on a successful area,” Lane said.

Representatives from the City Managers Offi ce, planning and economic development deliberated and ultimately chose which zones to submit to the state. Seven zones in Scottsdale qualifi ed for opportunity zone status, but only two, including the downtown zone, were selected.

Cities with large student populations can also drag down an area’s poverty rate, another reason parts of central Tempe and downtown Phoenix qualifi ed.

How areas made the cut Metro Phoenix’s map of opportunity zones mostly follows freeways, light rail and centers around downtown areas.

In metro Phoenix, nearly half of the area’s census tracts, or 456, qualifi ed to be opportunity zones, according to the federal government. Of that, 85 were designated opportunity zones in April.

Statewide, Arizona has 168 opportunity zones.

The program allowed each state governor to nominate 25% of the qualifying areas as zones.

Neidorf said to choose the zones, Arizona cities, counties and Native American communities were asked to nominate 25% of their qualifying tracts, to keep the process fair and proportional.

“Did everybody get everything they wanted? No,” she said. “We didn’t design the statute, but that’s what we had to work with.”

She said the goal was to create opportunity zones near employment and transportation hubs that would draw more development.

“We carefully picked areas for zones near light rail and freeways, where workforce housing is needed,” said Christine Mackay, director of economic development for Phoenix. “Downtown Phoenix is one of those areas.”

Five percent of a state’s opportunity zones don’t have to meet the income or poverty requirements. Mesa has one of

ther’s time in the service. His overseas deployment was the only time he traveled outside the country. Some of happened what there, what he saw, what he was feeling, and how he expressed all that to his young wife, must have been in the letters dropped into the fi re. It would have been fascinating to read them.

But their war story and their love story were just that. Theirs.

make much sense anymore. John Rekenthaler, a Morningstar vice president of research, cited emerging-markets stock funds as a prime example of a category that might be worth discarding.

“In the early 1990s, emerging-markets stock funds were the rage,” he wrote in the fall issue of Morningstar magazine. “Their subsequent results have been weaker than even the skeptics believed.”

Emerging markets funds are a “failed experiment” where the results haven’t lived up to expectations, he continued.

The expectations were that fast economic growth in developing nations such as China and India would translate to hefty returns for investors. Economic growth indeed has been brisk, but the returns often are squandered in ways ranging from local corruption to corporate expansion in unprofi table ventures.

Rekenthaler’s suggestion: Hold a broad international stock fund rather than one focused on developed foreign markets plus a second for emerging markets.

“What matters in today’s globally connected marketplace is not where corporations are headquartered,” he wrote. “More signifi cant is where corporations conduct their businesses and how they are aff ected by currency movements.”

Prepare for political turmoil The presidential election is less than a year off , and political news increasingly will dominate the headlines. All this noise could buff et your portfolio.

Brian Andrew, chief investment offi cer at Johnson Financial Group, said it’s important for investors to keep matters in perspective. Plenty of signifi cant, even potentially threatening, proposals could surface from candidates in the months ahead, but it’s not necessarily likely these ideas ever will become law.

Andrew cited Elizabeth Warren’s Medicare-for-all proposal, which has

those zones it requested for a commercial corridor near Phoenix-Mesa Gateway Airport.

Cut out of zones Some of metro Phoenix’s poorest areas qualifi ed as zones but were not chosen, including Guadalupe, Maryvale, Sun City and Tolleson.

Not every community made the cut because Arizona cities had to be home to at least 10,000 people to get a zone, according to the Commerce Authority.

Tolleson, with a population of 7,052 along Interstate 10 in the southwest Valley, reached out to Maricopa County to see whether it could submit recommendations through the county but did not hear back, said Jason Earp, the city’s economic development director.

However, Earp said Tolleson already is a huge employment center, with a large industrial sector, and the benefi t of the opportunity zone program is still “up in the air.”

Jeff Kulaga, town manager of Guadalupe, said he’d like to see his East Valley town of just more than 6,000 residents included if another round opens up.

Will it drive the development needed?

Some opportunity zones are seeing investment, while others that really need it haven’t yet seen movement.

Developers have announced some aff ordable housing projects in Tempe and Phoenix and redevelopment of historic buildings in downtown Mesa.

“Our fund is working on transforming downtown Mesa to a place for people to come together,” said Loeffl er, Caliber’s chief executive. “We want to create an area like ASU did with downtown Phoenix.”

Peoria, which has two opportunity zones, is still waiting. Rick Buss, the city’s economic development director, said he doesn’t know of any projects that have begun in either.

The Commerce Authority is working with developers to try to track Arizona opportunity zone projects.

Keeping such a thing private seems odd these days, where nothing seems real unless there are cellphone images, video and evidence of each waking moment posted online.

My parents were both veterans of the war. That’s how it is for those in the service and those they leave behind.

They lived it, and chose to remember it their way.

made investors nervous about the future of health care stocks, especially insurance companies, which could face elimination. But this radical plan would require congressional approval, assuming Warren even wins the election.

“It’s a long way from being implemented,” Andrew said.

Meanwhile, the aging population implies more revenue for many medical companies. “I don’t worry about her proposals because we will keep spending more on health care,” Andrew said.

Over the long haul, the stock market has risen regardless of whether Democrats or Republicans occupy the White House. This argues against overreacting to election results, let alone proposals.

Look to cut costs Transaction costs have been coming down drastically in a lot of investment areas. Companies including Charles Schwab and Fidelity now will let you trade many types of stocks, mutual funds or exchange-traded funds for free, or close to it.

Internal fund expenses also have been dropping. These include outlays incurred by investment companies, and passed along to shareholders, for portfolio management, administration and so on.

The typical annual expense charged by mutual funds and exchanged-traded funds eased to 0.48% last year, according to Morningstar, which made the calculation on a weighted-average basis (meaning larger funds exerted greater infl uence). That’s equal to $4.80 for every $1,000 a person has invested. But you can do even better — some funds charge less than $1 per $1,000.

Overall, weighted-average expenses have dropped from 0.93% or $9.30 per $1,000 in 2000, with most of the decline coming over the past fi ve years, Morningstar added.

Reach Wiles at russ.wiles@arizona republic.com or 602-444-8616.

The murkiness of the plan and of who takes the tax break will make it tough to track the program’s success. As the rules stand, it’s between them and the IRS, unless they voluntarily disclose like Caliber.

Big projects announced in area opportunity zones include Caliber’s redevelopment project in downtown Mesa, a soccer stadium near Tempe, workforce housing and an expensive apartment high-rise in downtown Phoenix, a hotel in Avondale and rental homes in Tempe and Glendale.

Other projects underway that could tap the tax break include the massive Southbridge II project in Scottsdale, a Nike shoe factory in Goodyear and an Amazon delivery station in Goodyear.

Here is a rundown of some known projects, by city.

Goodyear: Nike plans to invest at least $184.5 million in improvements to an existing building to create a manufacturing plant in one of Goodyear’s two opportunity zones. The company did not respond to an inquiry about whether it would take the tax break.

Many of the 15 major projects in Goodyear’s opportunity zones have expressed interest in taking advantage of the program and considered it when making the investment, said Harry Paxton, the city’s economic development program manager.

When it comes to Nike and other large corporations, Paxton said he was sure they would “take advantage of any opportunity they can.”

Amazon does not have plans to pursue any incentives for its project, according to a company spokesperson.

Mesa: On Main Street in Mesa, Caliber is investing nearly $60 million to redevelop eight historic buildings with 100,000 square feet of space in an opportunity zone that will tie to ASU’s expansion in the area.

Mesa has put together a prospectus of projects that are underway for its 11 zones that include several hotels, apartments and mixed-use projects.

William Jabjiniak, Mesa’s economic See OPPORTUNITY, Page 5D

It took me a while, but I came to realize that the wartime correspondence between my mother, the butcherette, and my father, an Army sergeant somewhere in Europe, didn’t go up in smoke in our backyard.

It simply was translated into a language only they could understand.

Reach Montini at ed.montini@arizo narepublic.com.

THE ARIZONA REPUBLIC ❚ Founded in 1890 ❚ A Gannett newspaper REPUBLIC EDITORIAL BOARD ❚ Greg Burton, Joanna Allhands, Phil Boas, Elvia Díaz, Abe Kwok and Robert Robb

AZCENTRAL.COM ❚ SUNDAY, NOVEMBER 10, 2019 ❚ 3D

WATER WORKS

MERRY ECCLES/USA TODAY NETWORK; GETTY IMAGES

Metro Phoenix has more miles of canal than Venice and a river running right through it all. Can we make the most of it?

Your Turn Kate Gallego Guest columnist

We desert dwellers have a vision for Rio Salado that has never been about Tempe Town Lake itself. It’s about us.

When redeveloping land in an urban area, you invariably end up exploring the history of the city itself.

The redevelopment of the Rio Salado is no diff erent. The Hohokam people dug and tended to canals in the Salt River Valley for roughly 1,000 years.

They worked together to harness the river and create the foundation for what is now the fastest growing city in the country — Phoenix. Because of their forethought, the Valley now has more miles of canal than Venice.

For generations the riverfront served as a gathering spot for families and people passing through the Valley. There is something magical about the life-giving qualities of a river in an arid environment. It’s no wonder the typical mirage scene is of water fl owing

As we acknowledge and celebrate Tempe Town Lake existing for 20 years, consider this: It’s not about the lake.

Yes, as desert dwellers we have a very special relationship with water. It entices us. But the true vision for Rio Salado in Tempe has never been about the lake itself.

Let’s remember how we arrived at this momentous occasion.

The modern-day story of the Rio Salado Project and Tempe Town Lake began in 1967 when a class of ASU architecture students accepted an assignment to envision how the vast, dry riverbed running through our Valley might become productive and valuable for the greater community. Perhaps, in some fashion, “a river once more.”

In 1987, only Tempe voters throughout the region said “yes” to a grand and Valley-

See GALLEGO, Page 4D

See GIULIANO, Page 4D

Fallen journalists deserve permanent memorial in DC Your Turn Barbara Cochran Guest columnist

Journalists relentlessly pursue the truth to provide citizens with the information they need to be self-governing.

And yet, for journalists, doing that work can be risky, dangerous and even cost lives.

The Arizona Republic has lost two journalists who died while doing their jobs. Reporter Don Bolles, who exposed corruption in Arizona throughout his career, was murdered in 1976 by a car bomb.

In 1985, reporter Charles Thornton died in an attack by Russian helicopters in Afghanistan. Their legacy remains strong.

The death of Don Bolles so shocked other investigative reporters across the United States that they descended on Arizona to show that killing a journalist could not kill a story.

As a young editor at the Washington Star, I edited the resulting series, the Arizona Project, which ran in more than 35 newspapers including the See COCHRAN, Page 5D

Your Turn Neil Giuliano Guest columnist

Sunset photos show the Salt River in the Tonto National Forest, and developments along Tempe Town Lake.

Robert Robb Columnist Arizona Republic USA TODAY NETWORK

Not a war on cops, but certainly political pandering The Phoenix police union charges that there is a “war on cops” taking place in city hall. Councilman Sal DiCiccio contends that the agenda is being set by “anti-police anarchists.”

There are left-wing pressure groups agitating for enhanced outside controls on the police force. And one of their ringleaders, Carlos Garcia, is now on the city council and chairing the committee looking into a civilian review board to oversee police behavior.

I don’t think that this amounts to a “war,” or that the rest of the city council, city management and the police chief fully share the views of the pressure groups. But they are catering to the pressure groups in ways that are unfair to the cops and unhealthy for See ROBB, Page 5D

4D ❚ SUNDAY, NOVEMBER 10, 2019 ❚ THE ARIZONA REPUBLIC

LETTERS TO THE EDITOR Send the American military to Mexico to wipe out the cartels The slaughter of nine U.S. citizens by Mexican drug gangsters is an act of evil, a monstrosity.

President Trump should indeed declare war on the cartels. I think the drug gangbangers would soon fi nd out what happens when U.S. Army and Marine combat troops come storming into Mexico.

And if they want to employ guerrilla warfare, I think our Special Forces and Airborne Rangers would soon kill them like the rabid vermin they are.

This must be done now!

Marc V. Ridenour, Phoenix

Let’s put spikes at freeway exit ramps to stop wrong-way drivers I agree with letter writer Scott Johnson and his idea of stopping wrong-way drivers with spike-strip systems.

These vehicles need to be stopped before they enter the freeway at the onramps.

I have suggested to the Arizona Department of Transportation that we use these spike systems.

But they say they won’t work because they would be ineff ective with vehicles going at high speed.

But these vehicles are not going at high speeds at the freeway exit ramps, where they enter to go the wrong way.

They could be made to stop or go slow at these exit ramps.

We could use the same type of spike systems that are used at parking-lot entrances or car-wash entrances.

Tony Horacek, Phoenix

The time is right to invoke that splendid ‘McConnell Doctrine’ Now that the nation is less than a year away from the 2020 election, and in the interest of fairness, it is time to reactivate the “McConnell Doctrine.”

Named after U.S. Senator Mitch McConnell, R-Ky., it requires that there be no Supreme Court nominations until the next president is inaugurated.

I would also propose that appellate courts be included since most Supreme Court justices are selected from those ranks.

And to say the least, there have certainly been more than the usual number

of “rank” nominations under the current administration.

M. Wright, Phoenix

Our federal government should stick with health care that works Mr. Robb’s column on creating Medicaid-for-All forgot to mention anything about the Aff ordable Care Act and the fact that it is actually starting to work.

Premiums are going down for the fi rst time.

Given that information, do we really expect the public to just turn over the control of their health care to the government without knowing what they are getting back or how much it will cost them?

If Medicare for All, Medicaid for All, or any of the other government-run proposals were so good, the Democratic candidates wouldn’t be afraid to tell us how much it will cost or what kind of system it will be.

The fact that they are not actually doing so speaks volumes.

Congress needs to run from these muddled proposals and stick with what is actually working.

Jorge Miranda, Tucson

Try to put yourself in the position of young teenagers met with slurs Imagine for a moment what it feels like to be a 13-year old girl attending a high school in Arizona, then to make the school volleyball team and go play against another local school just a few miles away.

Then to be called “a savage,” to be racially abused and denigrated by a group of white boys your own age. Back at your school you learn the previous week that you had been designated an “F” school by the Arizona Department of Education.

What a start to a young person’s life.

Welcome to post colonial America.

No outrage. No compassion. No understanding.

Just an uncovering of the horror at the heart of the American soul.

Where did those white students learn their abuse?

To those students whose tears fell as they left that court and which resounded like drops of blood, remember the words of Crazy Horse: “The spirit of my people will rise again.”

Alan Austin, Phoenix

Gallego Continued from Page 3D

in the desert.

As time marched on and our Valley grew, the river no longer attracted people to its banks, and most of the development that went up around it ignored its presence entirely. But it still held an allure for those visionary enough to search it out.

For years the vision of Rio Reimagined was pushed by leaders such as the late U.S. Rep. Ed Pastor and U.S. Sen. John McCain.

Both leaders worked to bring communities together to envision what the river could be. The Valley has long struggled with how to unite the eight communities along the river under one vision.

Just last year, on the banks of Tempe Town Lake, all eight communities signed a letter of intent to make this dream a reality.

Tempe Town Lake showed what the river could be when one city doggedly pursues its future. Phoenix has followed suit in laying the groundwork for riverfront development.

The Audubon Center and the Tres Rios Wetlands have sustainably restored native plant and wildlife, while creating a lush respite.

Tres Rios, which uses the natural desert habitat to safely and effi ciently treat our water, receives international visitors who want to see its innovative approach to water treatment.

Sustainability has been at the fore-

Giuliano Continued from Page 3D

wide revitalization of the dried up Salt River/Rio Salado that had been created by many stakeholders and proposed regionally.

Tempe elected and community leaders decided to advance a smaller Rio Salado project just within the city of Tempe, ultimately focusing on the “town lake” concept because of geography, fl ood control needs and the opportunity

Former U.S. Rep. Ed Pastor talks with Cindy McCain during the Rio Reimagined meeting at the Tempe Center for the Arts on March 30, 2018. CHERYL EVANS/THE REPUBLIC

front of all we have done along the riverbed because we understand this brings future economic development.

Now is the time to come together and push boldly towards a shared vision. We have seen what happens when communities commit time and resources to waterfront revitalization.

In places such as the San Antonio Riverfront Walk, tourism and economic development have followed riverfront investment.

The Los Angeles River, which is fac-

ing many of the same challenges that we are locally, has started the process of encouraging development and opening up biking trails.

It would be naïve to think that the task of renewing our riverfront can be achieved alone; it can’t be. It will require a diverse group of leaders and community members to come together and agree to compromise for the good of future generations.

It means gathering extensive input from communities along the river to

hear what they want in their backyards and neighborhoods. And this sweat equity will be worth it. I call on our community leaders and the public to have their voices heard on what they want for the future of our river.

I want our riverfront to again be a place where people gather, a place to live and play, and a place that is no mirage on the desert fl oor.

for true public/private engagements that would make the project economically feasible.

By 1996 a plethora of studies were completed, and we understood and aligned capacity to create the lake without new taxes. We secured private sector partners – involving critical agreements with Salt River Project, Arizona Public Service and ASU – and worked with multiple state, county and federal government agencies.

It was the biggest project Tempe had ever undertaken, extremely complex and political when we voted to com-

mence lake construction in 1997.

Though value of the project was carefully articulated and support was signifi cant, two councilmembers lost reelection in 1998 in large part because of votes advancing lake construction.

Today, 20 years since the lake opening in 1999, it is the clear impetus for tremendous cultural, economic and recreational advancement for Valley residents and visitors.

The lake will always stand as an example of persistence, careful planning and complex partnerships requiring herculean commitment. Dedicated and

talented staff , citizen involvement, private and public sector partners and steady policy direction from Tempe’s elected leaders over time ensured success.

The people of the region are the benefi ciaries of nearly $2 billion of increased economic value. Tens of thousands of jobs and career opportunities have been created. And 42,000 people now work within a mile of the lake, while 30,000 call the same area their home – staggering increases in comparison to before the lake.

Microsoft, KPMG, Silicon Valley Bank and State Farm dot the skyline.

Start-up and high-tech ecosystems are expanding, and commercial real estate has the highest value per square foot in Arizona. Thousands celebrate the founding of our country around the lake every July, and thousands more await the new year each Dec. 31.

People get engaged and married, reach their personal best fi tness goals, attend performances at Tempe Center for the Arts, picnic with family, ponder their future sitting under a tree, meditate and commiserate, take in the views and so much more.

It’s appropriate and wonderful to celebrate the lake; I hope I’m around for the 40th anniversary. But Tempe Town Lake is just the means to a lasting and noble aspiration: enhancing community identity, strengthening the economy, and ensuring a safe and grand public place to enjoy long into our shared future.

It’s not about the lake; it’s about us.

Neil G. Giuliano served as mayor of Tempe from 1994 to 2004. Today he serves as president & CEO of Greater Phoenix Leadership. Reach him at neil@gplinc.org.

Rendering of the Rio Salado Project. TEMPE HISTORY MUSEUM

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Opportunity Continued from Page 2D

development director, said the city is marketing itself to investors across the U.S. who are looking to develop in opportunity zones.

But Jabjiniak says he doesn’t know how much of the development downtown and in the Phoenix-Mesa Gateway corridor will be spurred by the opportunity zone tax break.

“Is it all because of opportunity zones? I don’t think so,” he said. “Opportunity zones are really just going to make a good deal better. So much of what we do in this industry is based on momentum, and we’re thrilled with what we’re seeing in and around those areas.”

Phoenix: In central Phoenix, Defer Gain is partnering with Pacifi c Oak Capital Advisors to spend $61 million to build the three apartment projects in opportunity zones with rents below the area’s average.

Construction recently began on the fi rst project, the 140-unit Imperial Apartments near 20th and Roosevelt streets. The area’s median family income was $17,450 in 2015. As of 2017, it climbed to $19,250.

“We are really out to help people in the workforce fi nd a decent place they can aff ord to live,” said Michael Laff erty, partner at Scottsdale-based Defer Gain.

“Opportunity zones are helping.”

Another central Phoenix developer is planning a residential high-rise in an opportunity zone that won’t be billed as aff ordable housing.

Austin-based Rastegar Property paid $2.3 million in July for a 26,500-squarefoot lot in an opportunity zone near Fourth Avenue and Van Buren Street, where it’s planning an apartment highrise with retail and offi ce space.

It cited the area’s opportunity zone for the deal, but at that purchase price, rents will likely be higher than most workers and students in downtown Phoenix can aff ord.

The median income for the area was $61,500 in 2017.

Scottsdale: Scottsdale had seven qualifi ed tracts and was permitted to recommend two zones, ultimately deciding on a tract encompassing Old Town Scottsdale and one west of Scottsdale Road between Thomas and McDowell roads, near but not including ASU’s Skysong project.

The two zones selected were determined to have the highest potential to realize the most benefi ts from a designation, according to Economic Development Director Rob Millar.

The number of existing and possible locations for new businesses in a potential zone were taken into consideration in the selection process, Millar said.

Some residents and the mayor have pushed back against the designation, saying that downtown Scottsdale — where developers are planning projects such as Southbridge II and the Museum Square — was seeing plenty of investment before the opportunity zone designation.

Lane said that he doesn’t believe the area qualifi es as a blighted area in need of more development incentives.

Because the criteria for choosing the zones was based on median family income, the numbers for downtown Scottsdale, which sees a large number of visitors and transient renters, were likely not representative of the actual income of the area, Lane said.

Salt River Reservation: The tribal community’s huge opportunity zone runs along Loop 101 in Scottsdale to Loop 202 in Tempe.

Soccer team Phoenix Rising FC has a temporary stadium in the zone near the junction of the two freeways but is planning a $250 million stadium nearby that will seat 21,000 fans.

Earlier this year, Brett Johnson, cochairman of Phoenix Rising Football Club, said it was working with an opportunity zone fund to fi nance the project as well as restaurants and other entertainment projects at the site.

1 developer, 3 projects In Tempe, a 90-unit apartment complex is going up at 1980 E. Broadway Road. Scottsdale-based Virtua is devel-

oping the project, which will include workforce housing at the site of a former garden nursery.

It’s being developed in one of Tempe’s fi ve opportunity zones. The median income for the area was $41,250 in 2017.

In Glendale, Virtua is planning to build 80 condo units at 53rd and Hayward avenues. In Avondale, Virtua launched its fi rst opportunity zone project with a 128-room Marriott SpringHill Suites at 99th Avenue near I-10 in May. The hotel is part of a larger 58-acre mixed-use development in Avondale’s opportunity zone, where the median income was $49,638 as of 2017.

low-income areas. Since 2003, the program has funded 4,800 U.S. projects.

It’s scheduled to expire at the end of this year. ❚ Empowerment Zones off ered tax breaks to business employing people in low-income areas. Those zones have been a longstanding part of government eff orts to revitalize distressed areas.

Those eff orts, however, show little clear evidence of success at improving the targeted neighborhoods.

The federal government has failed to link the tax credit programs to improvements in communities.

One reason for the middling results could be that the tax incentives were fairly modest and that the incentives targeted business owners rather than community members, according to the Congressional Research Service.

A 2011 Congressional Research analysis was more direct: “Clearly, businesses and investors that received program benefi ts were made better off .” But the wider impact was small or hard to attribute to the government programs, researchers found.

Self-storage and apartments dominate Self-storage projects and apartments are two of the most popular opportunity-zone developments in metro Phoenix, according to national real estate research fi rm Yardi Matrix.

The Phoenix-area ranks second in the U.S., after Washington D.C., for the most apartments built or under construction in the zones, with almost 54,500. Another 12,000 are planned in the tax-break areas, Yardi Matrix reported.

Nearly 90% of the metro Phoenix apartments built in the past few years are luxury complexes that many residents, particularly in lower-income areas, can’t aff ord.

The Valley also ranks second for the most self-storage space built or under construction in its opportunity zones, with 5.9 million square feet, and another 734,000 square feet planned, according to Yardi Matrix.

Who is watching the zones?

Unlike past incentives for development in low-income areas, opportunity zone projects aren’t subject to federal oversight beyond investors’ tax returns.

As long as investors follow the tax rules set by IRS, they get the hefty breaks in federally approved zones.

Cities and counties can monitor overall development in zones. But that’s all.

The developers aren’t required to tell local governments if the projects are using the opportunity-zone tax break.

Schultz, the attorney with Snell & Wilmer, said, “This is supposed to help distressed communities based on the Census data. This is supposed to drive capital to areas that need that capital.

But no one knows what really is the criteria to fi gure out if this incentive is working as intended.”

Reach the reporters at catherine.re agor@arizonarepublic.com, lorraine. longhi@gannett.com, jen.fi fi eld@az central.com and ronald.hansen@arizo narepublic.com.

Past development incentives Opportunity zones are being compared with past federal government incentives for development in lower-income areas. Those programs, too, appeared to benefi t businesses and investors directly, with less clarity about the positive impact on low-income communities. ❚ New Markets Tax Credits provide tax credits to investors with projects in

Cochran

ments honoring those who have sacrifi ced their lives to protect our freedoms; yet, there is no memorial on public land to recognize the journalists who have made the same sacrifi ce. Such a memorial would demonstrate to our citizens and to visitors from around the world that our country values a free press, honors the sacrifi ces of journalists and supports the family, friends and colleagues of the fallen.

To make this memorial a reality, fed-

eral legislation is needed, but federal funds will not be used. The Fallen Journalists Memorial Act of 2019 would authorize the Fallen Journalists Memorial Foundation to lead the eff ort to design, develop, construct and maintain a memorial on federal land in Washington, D.C. The memorial would be funded entirely by private donations and without the use of any taxpayer funds. It will be an enduring tribute to the reporters,

photojournalists, producers, editors and others who have died while performing their jobs as journalists.

This legislation is supported by Democrats and Republicans and is currently being considered by the House Natural Resources Committee, over which Rep. Raúl Grijalva (D-Ariz.) presides as chairman. We appreciate Chairman Grijalva’s co-sponsorship of the bill and his continued leadership in advancing it through his committee.

This is an important eff ort that is only beginning. Once completed, the Fallen Journalists Memorial will serve as a reminder of the sacrifi ces that have been made – and that will continue to be made – to preserve a free press.

It will also be a source of education, awareness and pride for our entire nation. We urge others in the Arizona Congressional delegation to join Rep. Grijalva in his support of this legislation and making this memorial a reality.

Barbara Cochran is president of the Fallen Journalists Memorial Foundation. You can reach her at cochranb@ missouri.edu.

of people with guns assaulting the police. The increase in armed assaults on the police exceeded the increase in the number of times the police fi red their weapons.

This isn’t evidence of a trigger-happy police force. As the foundation report put it: “Compared to previous years, (Phoenix Police Department) offi cers were more likely in 2018 to face armed subjects, be assaulted, and have guns used against them.”

That pretty well defl ates the triggerhappy cops narrative. Yet I suspect this is the fi rst time you have read or heard any of that context.

Mayor Kate Gallego hasn’t defended the cops against the false charge. More inexcusably, neither has Police Chief Jeri Williams.

These days, Williams’ mantra is that “one police shooting is one police shooting too many.” That implies that every time an offi cer fi res a weapon, it represents a failure of the police. It’s a formulation to appease the pressure groups, not provide leadership for offi cers who are sometimes called upon to respond to scenes containing armed, violent actors. Or inform the public about what is really going on, and not going on, with their police department.

I don’t know whether Williams was justifi ed in fi ring the offi cers that has caused such a hubbub. That requires a level of detail about the incidents and the offi cers I just don’t possess.

But the failure of Williams, and the rest of city hall, to defend street cops against the trigger-happy slander invites the suspicion that there might be some political pandering in her disciplinary decisions as well.

Now, I’m not a refl exive defender of the police. They are given enormous power and abuses are inevitable. There

needs to be strong discipline and oversight. And it needs to come from the top.

You don’t want the police union running the police department.

Maintaining the integrity of such a system sometimes requires a police chief to keep uncomfortably quiet. Former Mesa Police Chief Ramon Batista condemned the behavior of some of his

offi cers before the internal investigation process was even commenced. And now he’s gone.

And sometimes it requires speaking out. Such as when the offi cers under your command are falsely accused of being trigger-happy.

Reach columnist Robert Robb at robert.robb@arizonarepublic.com.

Continued from Page 3D

Star. Don Bolles’ legacy made a deep impression on me and four decades later, I take my journalism students to the Newseum each semester to see his heavily damaged car and to hear his story.

It remains an all too frequent and unfortunate reality that reporters and photojournalists must face and even run toward danger when seeking the truth.

That’s why so many have died while covering war and confl ict, from Ernie Pyle in World War II, to Francois Sully, Larry Burrows and Dana Stone in the Vietnam War, to David Bloom, Michael Kelly, Elizabeth Neuff er and Daniel Pearl in the wars in Iraq and Afghanistan.

Just 15 months ago the deadliest attack on journalists in U.S. history took place at the offi ce of the Capital Gazette, the local newspaper in Annapolis, Md., when a gunman shot and killed fi ve employees and wounded two others.

Our nation’s capital has many monu-

Robb Continued from Page 3D

the city.

This is most evident in the failure to rebut the accusation that Phoenix cops are irresponsibly trigger-happy.

This allegation is based on a spike in the number of times Phoenix police offi cers fi red their weapons in 2018. That happened 44 times, compared to 21 times in 2017.

There are two layers of context required to make sense of the import of this increase. The fi rst is the overall amount of interaction the police have with the public.

The Phoenix Police Department arrests over 50,000 people a year. Within that context, the diff erence between 21 and 44 shootings is not statistically meaningful. It was a very rare occurrence in both years.

The statistical immateriality is accentuated by a broader look. Shootings also spiked, at 31, in 2013. So, is it really plausible that Phoenix cops were trigger-happy in 2013, cooled it for four years, but then let it rip in 2018?

The second context is the detail about the 2018 shootings found in a report by the National Police Foundation that was commissioned by the city.

In over 90 percent of the cases in which an offi cer fi red a weapon, it was in response to an aggravated assault or homicide call. In 75 percent of the cases, there was someone with a gun at the scene.

In other words, cops were entering into highly dangerous environments in which they were encountering armed violent actors.

In fact, there was also a spike in 2018

Arizona Republic reporter Don Bolles died of injuries 11 days after a bomb exploded beneath his car June 2, 1976. USA TODAY NETWORK PHOTO ILLUSTRATION

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SAVINGS UPDATE 4 questions to ask before tapping home equity

By Sabrina Karl

If you’ve owned your home for many years, chances are good you have equity built up that you can use for another purpose. But since taking on debt should always be a carefully weighed decision, it’s important to ask yourself specific questions before you tap in.

The most important starting point is to ask whether what you plan to spend the equity on is something that adds value. Making a major home improvement or retiring highercost debt can result in net financial gains. A major expense like long-term care may also be more economical to pay with home equity funds than with retirement savings.

problem that needs a more permanent solution? If you plan to use home equity to pay off other debt, what are you doing to avoid landing yourself in this kind of expensive debt situation in the future?

Third, have you calculated exactly what budget commitment you’ll need to pay this debt off? This involves deciding how many years you’ll stretch it out, how much you’ll tap, what the resulting payment will be, and whether you can reliably fit this into your budget for the duration of repayment.

Lastly, is this your best option? You may determine that spending less and instead using savings will ultimately bear more financial fruit than taking out home equity. Or you may find that borrowing through a different avenue will have stronger advantages. In any case, be sure you go in with a sharpened pencil and a realistic plan so that you Second, is home equity just a short-term fix for a bigger maximize positive gains and minimize risks.

But spending the funds on a vacation or a highly discretionary purchase that loses value may leave you paying years of interest on something with no monetary value in the end.

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