Tucson: Late Bloomer as Resort Destination : Southern Arizona City Emerges From Shadow of Phoenix in Attracting Industries, Housing

Resort: “A place to which one betakes himself or persons go habitually; a place of frequent assembly.”

The pertinent question is, though: Who needs it? What, if any, are the advantages of a city, or area, having a resort label?

For this mountain-ringed community of 635,000 souls in southern Arizona, however, its relatively recent emergence as a true resort “city of destination,” is a major victory--both economical and psychological. For years, civic leaders have smarted under the charge that one visited Tucson only because he was en route to somewhere else.

Although it remains a favorite shopping stopover for wealthy Mexicans (it’s 50 miles from the border) and has long had a similarly loyal, if small, coterie of winter visitors, Tucson, by its own admission, has consistently and painfully been overshadowed by bigger, glossier Phoenix/Scottsdale, 120 miles to the north.

Animosity and Jealousy

When national conventions scheduled for the winter months reached the planning stage, there was virtually no contest between the two Arizona oases. Phoenix--geographically, also the hub of the state--always won hands down.

“And 20 years, or so, ago,” Roy P. Drachman, pioneer Tucson realtor recalls, “there was real animosity and jealously between the two cities--most of it on Tucson’s part. San Diego used to have the same feeling about Los Angeles.

“There’s still a little of it between Tucson and Phoenix, but now it’s primarily a competitiveness--largely between the two schools, the University of Arizona here and Arizona State in the Phoenix area--but that’s a logical and healthy sort of thing.”

Largely responsible for Tucson’s new self-assurance, all hands agree, is this sudden acceptance it has received as a magnet for resort developers and, although slower in its evolution, its success in wooing prestigious national firms into town with new plant sites.

The big coup, about eight years ago: IBM, which established its office products division in Tucson with a payroll of about 5,000. More recently: AiResearch Electronic Systems’ acquisition of 90 acres on which it will build a missile production complex with between 800,000 to 1.2 million square feet under roof in order to quadruple its present work force of 1,000.

Long-Term Potential

But, in addition to the immediate dollars generated by visitors attracted to a city’s resort facilities, both Drachman and William V. Stephenson, executive director of the Tucson Economic Development Corp., agree there is a far more subtle, if long-term potential in this acceptance of Tucson as a full-blown resort city.

“You have well-placed professionals coming into Tucson,” Stephenson says, “who might otherwise not come here, independently. They come because their group’s meeting here. But then they find they like it, and so they start coming back on vacation.

“Then, suddenly, they’ve bought a second home here and--generally being people of influence--they frequently have a voice in future plant relocations. In this sense, we’re being discovered just as Phoenix was about 20 years ago.”

“Resorts have a tremendous impact,” Drachman adds. A 40-year veteran of the Tucson real estate scene and a former national president of the Urban Land Institute, the International Council of Shopping Centers and the American Society of Real Estate Counselors, Drachman recalls vividly the arid period of no-growth on the Tucson resort scene.

Guest Ranches Declined

“Before World War II,” he adds, “we had about 112 guest ranches around here. These dried up during the war, and probably not more than a half dozen of them have survived. So, until about four years ago, we had the irony of having had more tourist and convention facilities in the ‘40s than we had in the ‘70s.”

In themselves, however, resorts present unique problems in the sense that no one wants to be the first to build one in an untested market: The investment required is hefty if the facility is to be large enough--and packed with enough amenities--to attract national conventions.

Another concern is that, no matter how big and posh, a lone resort has a rough row to hoe in attracting really large conventions unless there are other resorts nearby to handle the overflow when delegate attendance may well exceed its own room capacity.

There is no faster turn-off to a national convention’s planners than in knowing that a hundred of its delegates are going to have to be lodged in a half a dozen motels scattered around town.

Sheraton’s Lead Credited

“But where resorts really feed off themselves,” according to brothers George and David Mehle, the president and chief executive officer, respectively, of Cottonwood Properties, developers of the newly opened, posh Westin La Paloma resort, “is in attracting funding. It gets easier as soon as one or two are in place and are making it.”

And the brothers are quick to credit Sheraton with breaking the Tucson ice when, in 1982, it opened its 439-room El Conquistador resort. This was followed in 1984 with Loews’ Ventana Canyon Resort (398 rooms).

Coupled with other existing facilities--although with limited convention amenities--Holiday Inn’s Palo Verde Plaza, the Doubletree Inn and Ramada’s Tucson Resort--Tucson was quickly edging into the resort city category.

And, catching the scent of the shift in trend, smaller facilities, such as the long-private Tucson National Golf Club, home of the Tucson Open, and renamed the Tucson National Resort and Spa (170 rooms), has just completed a $20-million expansion--including a new 15,000-square-foot conference center adjoining its 27-hole championship golf course--to bring it into the resort category, too.

Sprawling and Graceful

But with the opening in January of the Mehle’s La Paloma Resort (488 rooms) under the knowledgeable and prestigious Westin management--the hub of a 790-acre multi-use complex--Tucson’s transition to a full-fledged “city of destination” is complete as far as local real estate experts are concerned.

Sprawling gracefully and blending into the natural contours of the Santa Catalina foothills northeast of, and overlooking downtown Tucson, La Paloma (The Dove) combines both the recreational facilities of an out-and-out resort and the no-nonsense, rolled-up-sleeves facilities that a working convention site requires.

There are 42,000 square feet of meeting space that includes the largest ballroom in the Southwest--18,000 square feet. The ballroom is divisible into six smaller meeting rooms with an audio-visual and telecommunication nerve center on a catwalk surrounding three-fourths of the room that is capable of accommodating as many as 25 projectors at one time.

Recreational amenities include a 27-hole golf course designed by Jack Nicklaus, and the first such private course in water-conscious Tucson to be 100% irrigated with treated effluent; 10 lighted tennis courts (four clay), a racquetball court, swimming pool, three spas, a complete health club, jogging and cycling trails and two theme cook-out areas.

Desert Vegetation

The youthful Mehle brothers--Cottonwood Properties president, George, 37, and CEO David, 35--acquired the 790-acre La Paloma site from the estate of the late Tucson pioneer developer John Murphy who, in the 1930s acquired more than 15,000 acres in the Santa Catalina foothills.

Planning for La Paloma began in 1982 with both brothers acutely conscious of the Murphy family’s concern for the integrity of the desert--thus, a full 30% of the acquired land has been retained in its natural state with desert vegetation.

More than 8,000 ecologically-delicate giant saguaro cacti were either built around or, when necessary, were tagged, delicately moved and replanted to make room for earth-moving equipment and then moved back to their original sites--an effort that earned Rogers, Gladwin & Harmony, Inc., landscape architecture and planning firm, the American Society of Landscape Architects’ Merit Award and has become a model for similar desert projects in the area.

Of the original 790 acres, 270 were dedicated to the Nicklaus golf course, 40 for the hotel, 50 were used for office development and the remainder has been left in its natural state or is being developed for residential use by six Tucson home builders.

Range of Housing

“The 560,000 square feet of office space that has been built,” according to George Mehle, “is pretty well filled up and is commanding some of the highest rents in town--averaging about $20 a square foot. It’s become comparable, in many ways, to Phoenix’s Camelback Corridor as far as desirability is concerned.”

In the residential portions of the La Paloma complex, single-family homes are selling in the $350,000 to $725,000 range, condominiums begin at about $90,000, town houses begin at $120,000 and patio homes are in the $130,000 to $250,000 range.

There is an irony in the fact that the Mehle brothers are almost archetypical of what old-line Tucsonians see as the wave of the future: young, ambitious doers from another part of the country who, through a fluke, find themselves in Tucson and decide to make it their home.

For the “tennis bum” brothers, the fluke came in the form of a tennis scholarship to the University of Arizona for older brother George who, in turn, lured David to Tucson from their home in Cincinnati. David also played for the University of Arizona and later turned pro and taught tennis for two years.

Cable Television

Branching out after graduation into custom home building and then, when brother David joined him in 1975 and George Mehle Construction Co. became Cottonwood Properties. The two also ventured into cable television (MCS Telecommunications Inc. is still one of the largest private cable companies in the country) and into real estate development.

In one year alone, 1980, the company developed a full 10% of the new apartment units and 20% of the new neighborhood shopping space in the Tucson area.

But the primary source of the in-migration to Tucson as seen by both veteran real estate practitioner Roy Drachman and Bill Stephenson of the city’s Economic Development Corp., isn’t seen as being Ohio, the home of the Mehle brothers, but California.

“Year after year for the last seven years that we’ve been advertising and promoting the industrial climate here,” Stephenson notes, “a full 20% of our responses has come out of just one state, California. New York City generates only about 9% of the responses. It isn’t that manufacturing, labor-intensive, market-oriented companies are leaving California; it’s just that they’re finding it easier and more profitable to recruit employees to Tucson than to Southern California.

Easier Recruiting Task

“That was the whole thrust of AiResearch’s deliberate decision to put its electronics division headquarters here. They simply couldn’t get engineers just out of school--and basically young engineers get about the same amount of money no matter where they end up working--to come to Southern California,” Stephenson adds. “They want the subjectives--a view, a single-family home, a 10-minute drive to work.”

And for developers, according to Randall Jenkins, president of The JNC Companies, a real estate syndication and development firm, Tucson is still a city where large tracts of land are available all the way from about $5,000 an acre to $16,000 an acre in the desirable foothills area.

With about $800 million in holdings at present--roughly 1 million square feet of retail, mixed-use, heavy and light industrial, office and medical facilities--JNC is currently preparing to launch a 2,000-acre development at Tubac in the green, rolling valleys halfway between Tucson and the Mexican border.

“We’ve got the quality of life here,” Jenkins adds, “that Phoenix and Palm Springs had at one time, but have lost. And, of course, a more moderate climate--it’s eight to 10 degrees cooler in the summer in Tucson than in Phoenix and, in Tubac, because of the elevation, another eight to 10 degrees cooler yet.”

Costlier Phoenix Land

Raw land prices around Phoenix, ready for development in two to three years, “are anywhere from 50% to 75% higher than comparable land is in Tucson, and industrial land is about 35% cheaper here” Drachman adds, “and the mountains surrounding the city on all sides are a very big plus--the Tucson Mountains on the west--that’s where Kitt Peak Observatory is located--the Santa Catalinas on the north, the Rincon Mountains on the east and the Santa Ritas on the south.”

Phoenix, Stephenson feels, “has gotten too urbanized and has become a major metropolitan city. It’s lost the desert feeling and that’s what conventioneers really come here for. Some people looking at relocation like the big-city feeling, of course, but those are usually your employers with 5,000 more employes.

“The smaller companies prefer Tucson. They like the idea that their employees can buy a nice, detached, single-family home in the $70,000 to $80,000 range and still get to work in 20 minutes. We’re just about where Phoenix was in the mid-60s.”

He grins. “The people in Tucson say ‘we don’t want to become another Phoenix,’ and the people in Phoenix, of course, say ‘we don’t want to become another Los Angeles.’ But it’s too late for Phoenix. That’s what it is, now, another Los Angeles.”

And for mountain-surrounded Tucson--where, as one observer noted, “a third of the people in town today weren’t here just seven years ago”--the city’s emergence as a major force on the convention-resort circuit is a major, perhaps critical, breakthrough in its long, uphill fight to show off what life in the moderate-lane is all about.