A Tale of Two Sals

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Conservative Sal DiCiccio wants to upend Mayor Kate Gallego’s agenda with two controversial initiatives, and he’s getting help from an unlikely source: left-wing firebrand Sal Reza.

Photography by Michael Woodall

On a day in mid-June, standing before a silver podium in the Phoenix Ballroom of the Sheraton Phoenix Downtown and reading haltingly and a little too obviously from a pair of teleprompters, newly elected Mayor Kate Gallego delivered her first ever State of the City address. Her message to the assembled bigwigs and politicos: that life in this burgeoning metropolis was more exciting than a mouthful of Pop Rocks chased with a gulp of RC Cola.

Not only was Phoenix “the fastest growing city in the nation,” it was “more innovative than ever before,” she told the high muck-a-mucks before her.

She explained that “wages are rising as knowledge-based sectors grow,” though they also got a boost when the City Council bumped the minimum wage for municipal workers to $15 per hour.

Illustration by Koren Shadmi
Illustration by Koren Shadmi

Phoenix was “more sustainable, more inclusive,” and she offered herself, a single mom, as an example of the city’s access to upward mobility. (Her undergrad degree from Harvard and an MBA from the Wharton School might have also factored.)

But, lo, something wicked this way comes, Gallego warned her audience: two initiatives on the ballot by themselves for an August 27 special election. The first – dubbed Prop 105 – aims to stop the expansion of the light rail to South Phoenix and elsewhere by choking off its funding. Backed by a “small ideological group,” Prop 105 would “throw out years of economic development” and risk losing billions in funding in the process. she said.

That’s why the city’s power structure – the Greater Phoenix Chamber of Commerce, The Arizona Republic, Arizona State University president Michael Crow, AARP and the Arizona Chapter of the Associated General Contractors of America – were all banding together to beat back this threat and keep the light rail on track.

Her other hobgoblin: Prop 106, a conservative-backed measure which seeks to solve the city’s perpetual pension crisis by freezing money to parks and other non-emergency services until the council funds its retirement commitments to city employees. If Prop 106 passes, Gallego said, libraries, parks and aid to the homeless would suffer. The measure was “an investment cap initiative” driven by outside special interests that want to use Phoenix as its “lab rat” for economic experimentation.

Gallego cited herself as part of Phoenix’s “mom majority,” referring to the five women on the council, all mothers like herself. And there was something in her authoritative tone that stirred the crowd that day: that of a smart, pragmatic ruler of the roost who knows what’s best for the kids and brooks no recalcitrance. In essence, Mama Phoenix.

But Mama Phoenix has a couple of bad boys to deal with: Republican City Councilman Sal DiCiccio and old-school revolutionary Sal Reza, political polar opposites who for different reasons oppose the expansion of the light rail south of the Salt River.

Reza is concerned with the gentrification of South Phoenix and the small business people who will, especially in the short term, feel the pain of the 5.5-mile extension via Central Avenue, from Downtown Phoenix to Baseline Road, during its estimated three to four years of construction.

Activist Sal Reza
Activist Sal Reza

DiCiccio, like many conservatives and libertarians, views the light rail as a massive government boondoggle that creates more problems than it solves and, in the end, is not worth the immense investment of public funds.

Though DiCiccio did not have a direct hand in writing Prop 105, the pension reform measure is his baby – the culmination of his multiyear fight to make Phoenix live up to its pension debt, which, according to city of Phoenix budget documents, equals “a total unfunded liability of $4.4 billion.” It’s essentially a long-term debt that the city must pay more and more each year to service.

Reza has no interest in 106, but both proposals are a direct challenge to the Valley’s ruling class and the way it has decided to run Phoenix and its suburbs. Prop 105 would effectively halt all light rail expansion in the Valley and divert money to road improvements, buses and other transportation options. And 106 would require Phoenix to beat back the pension Godzilla now rather than years later.

Normally, such radical proposals would be doomed from the jump, but by a quirk of fate they are on the ballot in the dead of summer when voter participation is guaranteed to be abysmal. And that’s where our story of the two Sals truly intersects: If one of the two measures does manage to turn out the vote – perhaps due to the emergence of deep-pocket third-party spenders like the Koch brothers – it may ipso facto give life to the other, since both propositions appeal to the general principle of austerity, and why not get a two-fer if you’re at the voting booth, anyway? This is the nightmare scenario of light rail advocates.

Could civilization’s discontents – in this case, the backers of 105 and 106 – score an underdog victory and upend city politics as we know it?

The odds are against them, but the local political class remains rattled at the prospect. Which is why these initiatives offer an intriguing drama, worth paying close attention to, as Phoenicians endure August’s oven-like temps.

Fear of the Kochs

For many urbanites, the light rail, much like an international airport or a professional sports team, equals progress and prosperity. It’s a boon to tourists and students and drives economic growth, according to its supporters.

It helps the planet and congestion by removing cars from roadways. It’s convenient for the handicapped, and adds to the transportation choices for all residents. And it’s a status symbol of sorts, a sign that Phoenix is a big city with all the attendant amenities.

“Light rail connects Central Phoenix to Sky Harbor to Tempe and to Mesa,” Gallego said. “It has brought $11 billion of investment along the tracks and 35,000 permanent jobs.”

Since its inception in 2008, the light rail has cost $2 billion and garnered the public 26 miles of track, through North and Downtown Phoenix, and through Tempe and Mesa. Some 45,000 riders a day use the system, and city fathers (and mothers) claim it brought the Super Bowl, the NCAA Final Four and other such tourism-stoking events to Phoenix.

The South Phoenix extension will cost another $1 billion in federal, city and regional funds. Halting it would mean an immediate loss of about $600 million from the federal government.

Prop 105 would divert the city’s portion of the overall cost – $150 million – to “other transportation improvement projects,” such as fixing the city’s pothole-riddled streets.

But the proposition affects more than just South Phoenix. It amends the city charter to “terminate all construction, development, extension or expansion of or improvement to light rail or other fixed rail line transit system,” and utilize those funds for other transportation projects, such as buses and roads.

A recent analysis by The Arizona Republic showed that, over time, Prop 105 would divert $3.2 billion in city funds to other transportation needs, but the city would lose out on billions more in federal and regional funds.

An organization now called Building a Better Phoenix gathered the necessary signatures and weathered the usual legal challenges to place Prop 105 on the ballot. According to records on file with the city clerk’s office, the $25,000 raised by the group has come from local sources, though critics see the hand of the infamous Koch brothers in the campaign.

Conservative industrialists Charles and David Koch are the bêtes noires of liberals everywhere, much as progressive billionaire George Soros is for right-wingers. According to a June 19 piece in The New York Times, the Koch-funded, pro-free-market organization Americans for Prosperity has waged a fierce, nationwide battle against public transit. The Koch brothers’ biggest success to date? Killing a $5.4 billion transit plan in car-clogged Nashville, Tennessee, that was on the ballot May 1.

Building a Better Phoenix has steadfastly denied being a Koch-backed front organization, but there is no doubt that ideologically, Republicans in general frown on the light rail, and the group has received some assistance from Scot Mussi, the president and executive director of the Koch-affiliated Arizona Free Enterprise Club, who registered the domain name BuildingABetterPhoenix.com though that domain remained inactive.

Mussi told The Arizona Republic that he just wanted to prevent the domain from being used by bad actors, and that he would sell it to Building a Better Phoenix. But the group ended up going with another variation for its website: BuildingaBetterPHX.com.

Campaign finance records also show that Mussi donated $5,000 to Building a Better Phoenix in March. Meanwhile, according to an article in ASU’s Downtown Devil, the Arizona chapter of Americans for Prosperity sponsored a forum on the light rail at its Phoenix offices in November 2018, featuring public policy analyst and anti-light-rail expert Randal O’Toole.

(Note: Neither the Arizona Free Enterprise Club nor Americans for Prosperity responded to requests to comment for this story.)

O’Toole argued that a rapid bus system would be more economical, and that the light rail costs more than it brings in. There is evidence to back up those contentions. A major, oft-cited 2015 study from The Hamilton Project, an economic policy think tank within the Brookings Institution, showed that metro rail systems in the United States, “including heavy rail, such as subways and elevated trains, and light rail,” operate at a loss.

However, the report also observed that the same can be said of roads and freeways, which require massive government spending and are likewise not self-sustaining. It does note the benefits of light rail, such as “higher land values, higher office rates and lower office vacancy rates.” It also cites the alleviation of traffic congestion, though other experts say light rail and other mass transit do not reduce the number of cars on the road.

In an interview with PHOENIX magazine, Gallego bemoans the possible influence of the Koch brothers over the August vote, pointing to what happened in Nashville, where “just a ton of money flooded in” to oppose the transportation plan.

“There is a conservative network of folks who do not believe in transit and were successful in Nashville, and then are looking to go throughout the country,” she says.

But so far, that conservative network’s contribution to the cause of stopping the light rail has been minimal, and there’s reason to believe that it may not materialize as the chaos-wreaking cyclops that Gallego envisions.

Councilman Sal DiCiccio
Councilman Sal DiCiccio
Spitballs, Anarchists and Pensions

The light rail has long been the target of District 6 councilman DiCiccio. Since 2009, when he was first appointed to fill the seat when Greg Stanton became mayor, the longtime politico and real estate developer has reveled in being the enfant terrible of the Republicans’ minority contingent.

Whether lobbing verbal spitballs at fellow councilmembers, poking holes in the perceived wisdom of Democrats or going toe-to-toe with lefty protesters of police power, once calling them “anarchists” as they spoke out in council chambers on the Phoenix Police Department’s treatment of black and brown citizens, DiCiccio is easily the most contentious and entertaining one-man show in current Phoenix politics.

But ask him about Prop 105, which he vociferously supports, and Prop 106, which he had a hand in drafting, and his outlook is decidedly grim.

For one, he says he does not anticipate the Koch brothers or their organizations to come riding to the rescue of either proposition. “Well, if they would contribute, that would be great,” he says. “But I don’t see that happening.”

He concedes that he and other light rail foes have a long shot at an upset. Turnout is sure to be lousy in the dead of August, around the 7 to 11 percent range, he guesstimates. Also, there’s nothing else on the ballot to inspire voters to send in their ballots or show up at the polls.

Meaning, both sides will have to motivate supporters to participate, and every successful get-out-the-vote effort requires cash. With the Valley’s rainmakers largely backing the light rail, DiCiccio predicts those resources likely will tip the balance in favor of the “anti” camp.

“You’ll see,” he says. “They’re going to have all the money.”

On Prop 106, DiCiccio has gotten some help from two right-wing political consultants, Tim Mooney and Chuck Warren, who have business offices in Wyoming and who, along with DiCiccio, have put up most of the money to gather the signatures necessary to put 106 up for a vote.

The initiative is another proposed amendment to the city charter. This one would impose a cap on budget growth “for city programs including budgets for parks, libraries and information technology,” unless all retirement systems for Phoenix employees are at least 90 percent funded.

Prop 106 excludes the budgets for police, fire and first responders from the cap and allows the mayor to declare a state of emergency to override the cap if need be. DiCiccio argues that the measure is necessary or the city’s more than $4 billion in pension debt will eventually spiral out of control.

In 2018, according to the Republic, the city spent $376 million on its pension obligations. In 2019, it will spend $426 million. Language from Phoenix’s 2018-2019 summary budget lays out the situation in stark terms.

“All of the city’s efforts for efficiencies and cost reductions, as well as revenue from a recovering economy, have gone to paying 100 percent of our actuarially required contribution every year,” the document reads.

Gallego argues that it is “a Trojan horse initiative to shrink the budget,” and that the language is so vague as to ensure that it will end up being heavily litigated.

Mayor Kate Gallego
Mayor Kate Gallego

“It’s internally inconsistent,” Gallego contends. “Only the lawyers win with this.”

But DiCiccio believes it’s hard medicine and long past due, otherwise the budget eventually morphs into a “pension-eating machine,” with guaranteed disaster in sight.

“It’s like a credit card,” he says. “I mean, most people would assume that you don’t just let your credit card just keep getting maxed out every year. You find a way to pay it down, or you declare bankruptcy and get out of it, right?”

But with the economy bumping and the tax man bringing in more revenue for the city, DiCiccio knows that convincing Phoenicians to adopt what sounds like an austerity measure will be a particularly hard sell.

Meaning, both sides will have to motivate supporters to participate, and every successful get-out-the-vote effort requires cash. With the Valley’s rainmakers largely backing the light rail, DiCiccio predicts those resources likely will tip the balance in favor of the “anti” camp.

“You’ll see,” he says. “They’re going to have all the money.”

On Prop 106, DiCiccio has gotten some help from two right-wing political consultants, Tim Mooney and Chuck Warren, who have business offices in Wyoming and who, along with DiCiccio, have put up most of the money to gather the signatures necessary to put 106 up for a vote.

The initiative is another proposed amendment to the city charter. This one would impose a cap on budget growth “for city programs including budgets for parks, libraries and information technology,” unless all retirement systems for Phoenix employees are at least 90 percent funded.

Prop 106 excludes the budgets for police, fire and first responders from the cap and allows the mayor to declare a state of emergency to override the cap if need be. DiCiccio argues that the measure is necessary or the city’s more than $4 billion in pension debt will eventually spiral out of control.

In 2018, according to the Republic, the city spent $376 million on its pension obligations. In 2019, it will spend $426 million. Language from Phoenix’s 2018-2019 summary budget lays out the situation in stark terms.

“All of the city’s efforts for efficiencies and cost reductions, as well as revenue from a recovering economy, have gone to paying 100 percent of our actuarially required contribution every year,” the document reads.

Gallego argues that it is “a Trojan horse initiative to shrink the budget,” and that the language is so vague as to ensure that it will end up being heavily litigated.

“It’s internally inconsistent,” Gallego contends. “Only the lawyers win with this.”

But DiCiccio believes it’s hard medicine and long past due, otherwise the budget eventually morphs into a “pension-eating machine,” with guaranteed disaster in sight.

“It’s like a credit card,” he says. “I mean, most people would assume that you don’t just let your credit card just keep getting maxed out every year. You find a way to pay it down, or you declare bankruptcy and get out of it, right?”

But with the economy bumping and the tax man bringing in more revenue for the city, DiCiccio knows that convincing Phoenicians to adopt what sounds like an austerity measure will be a particularly hard sell.

Business owners meet near affected Poncho’s restaurant
Business owners meet near affected Poncho’s restaurant
Pancho Villa in the Barrio

DiCiccio says he was unaware that local activist Sal Reza is advocating on behalf of the business owners of South Phoenix and against the light rail.

Reza claims no knowledge of Prop 106 or what it would do, but Prop 105 he knows well, ever since local business people called on him for help in their David and Goliath fight with the city of Phoenix.

The veteran organizer, who in appearance and disposition resembles the famous Mexican revolutionary Pancho Villa, is known for successfully organizing Phoenix’s taco vendors in 1999 and 2000 to crush a proposed city ordinance that would have put them out of business.

He founded and led the human rights group Puente before his estranged protégé Carlos Garcia, District 8’s recently elected city councilman, took the reins. (Garcia once decried the light rail extension, but now says he will not support the August initiative.)

Reza is renowned for having led massive demonstrations in support of the plight of the undocumented. The cagey radical was arrested twice as he took on Sheriff Joe Arpaio over Arpaio’s sweeps of immigrant communities. And disgraced Republican Russell Pearce banned Reza from the Arizona State Senate while Pearce was Senate president, leading to Reza’s arrest in 2011.

In other words, his left-wing bona fides are unimpeachable. He identifies as a member of the indigenous peoples of the Americas, and these days, he largely organizes through the Phoenix collective he helps lead, the Barrio Defense Committees.

And if you’re wondering, he refuses to accept any money for his activism on behalf of South Phoenix’s mom-and-pop businesses.

“I don’t want to be accused of being bought off by the Koch brothers, you know?” he says during a recent interview.

So how does he do it for free?

“I don’t do it for free,” he smiles. “I do it for my pleasure… for my self-satisfaction.”

What bugs Reza is when a major development project, like the light rail or even Phoenix Sky Harbor International Airport, disrupts an existing Latino community. He says this happened with the light rail in Tempe and Mesa, forcing some low-income residents to move.

He calls the light rail a “gentrification scheme” that will drive out brown folks and open up development of expensive, multistory apartments and condos, to be occupied by an upper-middle class horde looking for a smoking deal, residence-wise, not far from Downtown Phoenix.

“It’s a way of attracting money for investment,” Reza says of the light rail. “Not to invest in the community, but to change the community totally.”

He cites the altered demographics of the Garfield Historic District and Roosevelt Row as examples. The latter, in particular, was once a low-rent artists’ colony, and has transformed over the last few years into an uber-trendy neighborhood where young urban millennials want to live.

Reza says his stance is nothing personal against Gallego or the light rail. He just doesn’t want the light rail to break up another community. A number of South Phoenix business owners feel the same way and are worried that during the three to four years of construction, their businesses will suffer.

Margot Bunten, the owner of an ACE Hardware on Central Avenue, says the construction will put her out of business. Valley Metro’s proposed reduction of four lanes of traffic to two with the light rail will make it difficult for her to accept deliveries from 18-wheelers, as she normally does.

Her shop currently employs 12 people, who might get laid off if she cannot survive. “It’s going to affect business quite a bit,” Bunten says. “Plus customers – who wants to go anywhere where there’s construction for four years?”

Valley Metro has a study showing that the move to two lanes will not affect the flow of traffic in the long run. But it’s a counterintuitive argument, and some South Phoenix denizens aren’t buying it.

Among them is Valerie Smith, who says she’s been in SoPho for 56 years, all her life. “The two lanes, that’s not going to help with congestion,” she scoffs, while attending an anti-light rail rally in South Phoenix. “I’m against it, and everyone I know is against it.”

At the same demonstration was Larry Cohen, owner of Herdez Jewelry and Pawn at 7035 S. Central Avenue. Cohen is also worried for his business, and says he believes 90 percent of his customers are against the light rail.

“It helps the politicians’ coffers,” he says. “That’s what it’s all about. We need the money spent in a better way, and it’s not by lining the pockets of the politicians.”

Down the street, Manuel Trevizo, owner of a small auto mechanic shop, Llantera Hispana, has a sign to the side of his building supporting Prop 105. He says he has three employees and has been in business for 20 years. “I don’t want to reduce to two lanes,” he says. “It will hurt my business.”

Ultimately, and ironically, his best bet to forestall such a scenario rests with DiCiccio, who represents North-Central Phoenix – a part of the city far removed in every sense from Trevizo’s neighborhood. If the Republican can marshal the votes for his pension-reforming Prop 106, the wave of conservative votes could drown light rail, too.

Otherwise, the popular public-work project looks to chug along.

Margot Bunten, South Mountain Ace Hardware
Margot Bunten, South Mountain Ace Hardware
In it for the Long Haul

Scott Smith, the CEO of Valley Metro, acknowledges business owners’ concerns about a disruption of commerce due to the light rail being built, though he points out that this is always the case when construction is being done on roads or when highways are being developed.

Smith, a former gubernatorial candidate, was mayor of Mesa from 2008 to 2014. A moderate Republican, he is familiar with such complaints from the light rail’s expansion through Mesa, but believes they are mostly unfounded.

“I think it’s a stretch for anyone to say that businesses struggle only because of construction,” he tells PHOENIX. “But we take it seriously.”

He says Valley Metro has one of the “most robust business assistance programs” in the nation that aims to minimize the impact of construction.

This business assistance consists of website help, joint marketing, one-on-one business counseling and signage telling drivers that businesses are open, Smith says. He says Valley Metro is precluded by federal regulations from offering direct financial assistance, but he’s been working with private companies, which might be able to “provide discounts and other things to soften the blow.”

To Bunten’s complaints specifically, Smith insists that the two-lane plan would accommodate deliveries from 18-wheelers. Regarding congestion, he says some through traffic will be diverted to Seventh Street or Seventh Avenue, easing strain on Central.

He also cites a March 2019 survey of registered voters in South Phoenix that Valley Metro commissioned from OH Predictive Insights that shows that 76 percent of respondents say that the city should continue to move forward with its light rail plans.

Veteran Republican political consultant Chuck Coughlin, who works for the pro-light rail Association of General Contractors, says he’s seen other, privately funded surveys that back up the OH poll. Three times in the past, Valley voters have approved light rail expansion, and he believes they will do so again.

Similarly, he thinks the coalition that Gallego is forming to combat both 105 and 106, named Invest in Phoenix, will overcome the “goofy, August cycle” and will raise enough moolah to turn out a cross section of Republicans, Democrats and independents.

“This is not your traditional lefty campaign,” he says. “This is a straight up ‘No, this is bad for Phoenix’ campaign. And since most voters tend to like their local governments more than they do the federal government, the messaging that these initiatives are dangerous will resonate, and turn out a core, pro-Phoenix constituency.”

An anti-light-rail meeting of business owners in South Phoenix in June 2019
An anti-light-rail meeting of business owners in South Phoenix in June 2019

However, there seems little doubt that small businesses will take it on the chin, as they often do. David Wimberley, owner of the George & Dragon pub, weathered the light rail construction on Central Avenue near Steele Indian School Park around 2006 or so while it was ongoing.

Wimberley complains that the offers of help he got from the city never panned out, and he ended up spending all of his retirement savings on making the monthly mortgage payment and keeping the restaurant alive. “I went from doing about 100 to 120 lunches a day to about 12 to 15, that’s how bad it was,” he says.

He says his business never fully bounced back from what it had been, but that this was in part due to new restaurants that opened nearby after the light rail was up and running.

Still, while it was being built, he estimates as many as 60 businesses went under as a consequence. His advice for small business owners in the path of the South Phoenix line?

“Sell it now, because you’ll be f***ed by the time that thing is done,” he says.

Stephanie Vasquez of the Fair Trade Café, near West Roosevelt Street and Central Avenue, is less apocalyptic. She says that it was nearly impossible to get to her place during light rail construction, and that sometimes she weathered bleak $100 days.

But now that construction’s long in the rearview, there’s a light rail stop right across from her café, and her business, now in its 13th year of operation, is going strong. She says she doesn’t view the experience as good or bad but characterizes it as one of the many challenges small businesses face, such as a rise in the minimum wage or a recession. “Like anything in small business, you have to really be in it for the long haul to reap any benefits from it,” she says.

Vasquez sees light rail construction as part of Phoenix’s “growing pains,” and she urges businesses to “really lean into the community” for help to survive.

“This is something that we see in all large cities,” she observes. “So this is almost like the price you pay [for growth], and unfortunately it’s on the backs of our small businesses.”

Light It Up

Due to be completed in 2023, light rail expansion into South Phoenix would be the fourth major improvement of the 11-year-old system, following its Gilbert Road expansion in Mesa, completed in May.

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