Phoenix Focuses on Rebuilding Downtown, Wooing Silicon Valley


It might be hard for many to think of Phoenix as a vibrant urban environment rather than a subdued, sun-baked retirement village. Still, every month or so, the city’s ambassadors are pitching downtown Phoenix to young entrepreneurs frustrated by the high cost of doing business in Silicon Valley.

Some tech start-ups have already been sold: Uber opened a support center for drivers and riders last year, in a building that had stood half empty for a long time. DoubleDutch, a maker of events apps, is opening its first office outside San Francisco nearby.

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John Thomas Marino, left, and Daehee Park worked as software engineers in Silicon Valley before they turned an old hardware store on the southern edge of downtown Phoenix into headquarters for their online mattress business, Tuft & Needle.

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Deanna Alejandra Dent for The New York Times

“I don’t want people to move here because we have great golf courses and cheap homes,” Mr. Stanton said in an interview. “What I want is young college graduates from the East Coast moving here, and our college graduates staying here because they see their future here and we have a great urban community.”

Mr. Park, 27, the start-up owner, and his college friend, John Thomas Marino, 30, worked as software engineers in Silicon Valley before they turned an old hardware store on the southern edge of downtown into headquarters for their online mattress business, Tuft & Needle.

In a post on Medium, they channeled Warren Buffett to explain their decision, saying that Mr. Buffett kept his personal and professional lives anchored in Omaha, “about as far away from the hurly-burly of the financial centers of the world as you could imagine.”

Phoenix has staged other attempts at making over its downtown, but never quite got it right. It pegged a tourism tax to hotel stays and car rentals to pay for the construction of a basketball arena, which opened in 1992, and used the money raised from a sales tax increase throughout the county to build a baseball stadium, the first in the nation with a retractable dome and real grass. Both still bring people downtown, but are not necessarily reasons anyone would want to live there.

At one point, the city bought a luxury hotel to give visitors attending events at the convention center a comfortable place to stay, only to put it up for sale in December after tens of millions of dollars in losses.

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Phoenix Public Market in the city’s downtown.

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Caitlin O’Hara for The New York Times

A bike-sharing program survived its first summer, a time of the year when riding a bike, or doing any other outdoor activity for that matter, is borderline heroic.

Skeptics worry that there is just too much building going on this time and that it is only a matter of time until it all comes crashing down again, as empty units stall in a real estate market that is well known for its boom-and-bust cycles.

Long a wasteland at night, downtown now has a tinge of hip, with bars, restaurants and small concert venues keeping it going long after lights go off in the city, county and state offices that for long were its anchor. It also has plenty of dark, desolate spots that do not feel safe at night.

The place is undergoing a sort of rearrangement that is common in the transformation of any neighborhood. The squat building that housed Paz, a popular taqueria, was razed to make way for a condominium in what is now one of the densest residential intersections in the city; the tacos are now being sold from a food truck. Songbird, a coffee shop displaced by another new building, moved down the street into a charming century-old house, which qualifies as old in this young city.

On a recent Sunday, mothers and their babies met around a picnic bench there while eight young women in leggings and tank tops practiced yoga nearby, their colorful mats stretched on a patch of grass. That was an unusual sight.

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Phoenix city officials, intent on revitalizing the place, searched for a new formula, one that focused not on the outer edges of the desert, where there remains plenty of room to expand outward, but on the long-neglected downtown.

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Caitlin O’Hara for The New York Times

Three blocks west, at a cafe called Phoenix Public Market, Naveed Shan, a physical therapy student in Northern Arizona University’s campus downtown, was having a lunchtime beer with a large group of classmates to celebrate the end of the school year. Mr. Shan, 28, who grew up in Phoenix, said “there just wasn’t enough good reason for anyone to ever come downtown.”

Now, he cannot afford to live downtown, he said, as prices have soared.

The pull of the construction industry remains strong — it will be Arizona’s fastest growing sector this year. Officials here are trying other ways to diversify the economy, including a boot camp teaching small- and midsize businesses how to trade with Mexico.

Mr. Park and Mr. Marino hired a security guard to watch over cars on the parking lot at Tuft & Needle, on Grand Avenue. Across the street, a sign advertises divorce and bankruptcy filings for $200. Next door to it is a vacant house once used by squatters, though the squatters are gone.

By year’s end, they said, the warehouse will be filled by work stations, a quality-control lab and a half basketball court.

“We’d have to raise capital just to pay our rent in Silicon Valley,” said Mr. Marino, at work in high-tops and shorts one afternoon. In Phoenix, he said, “We can have a home and a pool and 36,000 square feet of office space.”

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