Much of the development in downtown Phoenix has been bankrolled or subsidized by taxpayers. The city alone has participated in 15 major projects with a tab of $1.5 billion, according to municipal records. Those incentives spurred another $2.1 billion in private investment on nine projects.
John Chan, downtown development director for Phoenix, said that while the credit crunch has prevented new projects from getting started, those already underway will pay off eventually. "We're still optimistic long-term," he added. "But everyone's working toward that critical mass."
For now, even developments that moved forward are threatened. Plocher said some residential loft prices have dropped 50% since 2007. CB Richard Ellis Inc., a market analyst, reports vacancy rates in Phoenix office space rose to 17.1% in the third quarter this year, up from 12.9% during the same period in 2007.
The recession's impact may be illustrated best by the story of Mortgages Ltd., the largest private lender in Arizona. As the nation's economy faltered in the spring, the company founded by Scott Coles began drowning in red ink. On June 2, Coles took his own life. Within days, Mortgages Ltd. filed for bankruptcy protection. Thousands of investors are expected to lose money. Dozens of major projects were suddenly without funding.
One of those is Hotel Monroe, the $100 million transformation of an old office building into a boutique jewel with 150 rooms. It was supposed to open in October, but stands empty and unfinished, a monument to recession in the city's heart.
Another casualty is the entertainment district along Jackson Street, Jensen's plan for an eight-block stretch of nightclubs, restaurants and other attractions.
"It's going to be one of the coolest — an authentic, vibrant, 24/7-type area," Jensen said with spirit. Then he added, "There's no credit to do anything. These are hopes until this thing (the economy) gets square."
Small businesses hit hard
Small businesses already have weathered more than a year of traffic disruptions in anticipation that the $1.5 billion Metro light rail will bring customers from the suburbs when it opens Dec. 26.
For now, though, Central Avenue is dead after dusk. A few bars remain open, but most eateries close after lunch, and other businesses shut down by 5 p.m.
Steffin Newman, a downtown ambassador employed by merchants to assist visitors, said he often sends tourists to Scottsdale and Tempe when they ask about night life. "Since I started here six months ago, it's looked like recession to me," he sighed. "It's a ghost town."
In Alice Cooperstown, bartender Jessica Lawrence rolled her eyes when asked how business is doing. "I can't make my rent," she said. "We have fewer customers, and those who do come in don't tip. It's in people's faces. Everybody's affected. Everybody's worried."
Three blocks away, Jukka Göös, 30, of Helsinki, snapped pictures of an empty Central Avenue at 5:45 p.m. on a weekday. In a thick Finnish accent, he explained that he was attending a convention and wanted to send a photograph of Phoenix to his wife. "I'm trying to find the city's heart," he said, "but I'm not able to. What is Phoenix? I don't see anything. No Phoenix people are here. I just see (homeless) people hanging around, not doing anything, asking me if I have a dollar.
"Am I speaking straight?"
Wagner reports for The Arizona Republic