Tucson Still Adjusting to L.A. Influx
On this city’s northwest border is a new subdivision known as Canada (as in La Canada) Hills, where the winding streets are lined with the kinds of two-story, tile-roofed, stucco houses found across Southern California.
The vast majority of Canada Hills’ residents have moved there since 1993 from places such as Canoga Park, Pomona, Ontario and San Diego--transferred en masse by Hughes Aircraft Co. when the aerospace giant consolidated its missile division at a sprawling plant here.
“Every neighbor is a Hughes person,” Debbie Esparza, a personnel official for Hughes who lives nearby, said with only slight exaggeration.
Hughes uprooted more than 2,000 employees and their families to bring them to this mountain-ringed desert valley 65 miles north of the Mexican border. It also spent nearly half a billion dollars to modernize the plant and help pay workers’ moving costs.
The move was one of the most far-reaching employee relocations ever undertaken by corporate America, rivaling moves by J. C. Penney Co. to suburban Dallas and Mobil Corp. to suburban Washington. Both left New York City in the late-1980s.
It also represented a massive and unprecedented transfer of scientific brainpower out of Southern California by a company whose roots in Los Angeles date back 50 years. Most who came here were engineers and computer experts who specialize in designing complex missile systems.
Indeed, the Hughes relocation still stands out as an especially jarring event for the Southern California economy during its darkest years of the early 1990s, when repeated rounds of cutbacks devastated its aerospace industry.
Tucson, of course, was generally thrilled by the human transfer. Many new arrivals earned $50,000 or more a year, so their cumulative purchasing power provided a major boost for the economy of Tucson and surrounding Pima County, home to 730,000 people.
“Their dollars are very welcome,” said city Planner David K. Taylor, “and there are many of them.”
But the Hughes move also has been the catalyst for widespread soul-searching over whether this city is growing too fast for its own long-term good.
Though Tucson has been through economic booms and busts before--and fretted about its growth before--the Hughes influx crystallized many Tucsonans’ concern that the current spurt is jeopardizing the relaxed quality of life that lured them here in the first place.
In the past two years, housing costs have surged and traffic congestion has visibly worsened. The transfer also set off a frenzy of home building in the desert wilderness that Tucsonans covet, with many of the homes designed for Southern Californians’ tastes, as in Canada Hills.
Even the newcomers are noticing changes. “We used to hear coyotes all the time,” but don’t any more “because they’re building all around,” said Trish Ernst, who moved to the outskirts of town last year with her husband, Stew, a production manager for Hughes.
To be sure, this is still a region where a commonly heard motto is “growth is good and too much growth is just right.” It’s also one that has long welcomed immigrants, first those from the East and Midwest to escape the harsh winters, and more recently those from California looking for refuge from urban sprawl.
Yet it is also a region where locals value their lush desert environment and are adamant about avoiding the pell-mell growth of Phoenix, their neighbor 120 miles to the northwest. As a result, Taylor said, “we have 730,000 schizophrenic folks in this valley who have never quite come to closure about how much (growth) is enough.”
The new arrivals from California also have been convenient whipping boys for the locals, just as they have been in other western states. Hughes employees say that longtime residents often blame them for Tucson’s problems--even though many other parts of the city’s expanding economy are contributing to the growing pains.
The locals “are very concerned about urban sprawl into their pristine area, and to tell you the truth, I don’t blame them,” said Stew Ernst, 38. “Hughes is the No. 1 employer to blame in their minds. I’ve never been treated with any animosity, but it’s true that their concern is very real.”
Hughes’ immigrants also spawned tension in the company’s own ranks. Existing Hughes workers here resented all the attention and expense lavished on the California arrivals, who in turn grumbled aplenty about no longer being in the Golden State.
But the Hughes transfers had little choice but to embrace Arizona. Had they refused to move, Hughes likely would have fired many of them at a time when industry job prospects were generally bleak.
“I did not want to lose the 13 years I have” at Hughes, said Zora (Kathy) McClendon, an administrative assistant on the Standard missile program who moved from Claremont into an apartment here.
To wit, about 5,000 Hughes employees in Southern California lost their jobs in the missile group’s consolidation because they weren’t needed in Arizona.
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The Hughes workers who did arrive gave the Tucson economy a badly needed lift.
The city was battered in the late 1980s and early 1990s by a series of events: the collapse of Arizona’s savings-and-loan industry; a recession that forced a virtual halt of new construction; defense cuts that led Hughes to slash employment at its Tucson plant; and cutbacks by other leading manufacturers, such as IBM Corp., which had sparked an earlier civic boom by opening a plant here in the late-1970s.
“We lost 10,000 high-grade, high-pay IBM/Hughes-type jobs” in the slump, “and that had a measurable effect” on the local economy, said Taylor, the city planner.
One effect: “Real estate was drop dead,” recalled Hank Amos, president of Tucson Realty & Trust, a major broker here.
Then, as the local economy began turning up in 1993, Hughes made its stunning announcement, sending a palpable sense of relief coursing through the city. It was a boost to local consumer confidence that probably was “greater than the fiscal impact” from Hughes’ arrival, Amos said.
The fiscal effect was unmistakable too. Permits to build single-family houses, which bottomed at 2,101 in 1990, doubled to 4,096 in 1992 and kept soaring. They totaled 6,002 in the first 10 months of 1994, said Alan P. Lurie, executive vice president of the Southern Arizona Home Builders Assn.
Homes that normally would have taken 90 days to build took six months or more. “There was difficulty finding tradespeople,” Lurie said. Builders “were actually trying to steal framing crews from each other” by offering a target crew’s leader $500 and a raise for everyone else on the team, he said.
Total manufacturing employment in Tucson grew 16% last year, its biggest gain since the late-1970s, according to University of Arizona figures. In bouncing back from its severe recession, the regional overall economy pushed Tucson’s jobless rate down to below 5%, among the lowest in the nation.
Nonetheless, Hughes often gets the credit. “In people’s minds, the good economy we’ve had for the last two years is attributable to Hughes,” said Marshall Vest, forecasting director at the college’s business school.
And so are the problems. Many residents cite the aerospace giant when talking about growing traffic congestion in the city, which is served by only one freeway, Interstate 10, that runs just north and south.
“We’ve got one little bitty Mickey Mouse stretch of freeway that comes through this town, and every morning it’s backed up for 10 miles,” said Frank Esparza, 49, the husband of Debbie Esparza and a financial specialist at the Hughes plant.
The Hughes workers’ demand for new housing is largely blamed for a 30% jump in home prices since 1990. “Every time we came to house hunt, the prices had gone up a thousand or a couple of thousand dollars,” Debbie Esparza said.
“You can’t build all of the homes we’ve built without having some reaction,” said the home builders’ Lurie. “You raise the hackles, you raise the sensitivities.”
Yet the average home price here is still just $115,000--half what a typical house in the San Fernando Valley costs--which enabled many of the Hughes transplants to buy new, large, customized houses in Canada Hills and elsewhere.
In addition, most of the Californians who didn’t buy took apartments instead, and a subsequent surge in apartment rents and a dive in apartment vacancies have also been laid at Hughes’ doorstep.
One member of Pima County’s Board of Supervisors, Ed Moore, last year proposed a moratorium on building permits--despite the region’s heavy reliance on the construction industry. “It scared the hell out of everybody,” Moore said. “But I was trying to raise my hand and say: ‘Guys, we’ve got a problem.’ ”
Moore represents the part of Tucson that includes Canada Hills, and a closer look at the area shows why he’s worried. The dozens of families now commuting the 20 miles between the subdivision and south Tucson, where the Hughes plant is, must use old, narrow, two-lane boulevards.
It’s stupid to keep building houses “in an area where the roads are not sufficient,” Moore said.
Indeed, Canada Hills and the roads that serve it are a good illustration of the conflict between Tucson’s small-town flavor and its reliance on growth. “We want to grow, we want to attract business, but we don’t want any of the negatives,” said Robert L. Gonzales, president of the Greater Tucson Economic Council.
In fact, there are other parts of Tucson’s economy that have remained dormant, even with Hughes’ move. The building of new apartments, offices, stores and other commercial properties has remained weak, in large part because banks and other lenders are still reluctant to provide the financing.
“The pain is still very fresh from the latter part of the 1980s,” said the University of Arizona’s Vest. “I think people should be celebrating today more than they are, but they’re still very cautious, very wary.
“You talk to the average businessman and he’ll tell you business has never been better,” Vest added. “And then he’ll tell you he’s really worried, because he knows it’s too good to last and the economy will turn down again.”
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Many of the Hughes arrivals who helped spark the good times were just as worried--for different reasons.
“I wasn’t going to come,” said McClendon, a 43-year-old single mother of two sons, 23 and 17, all of whom moved here last March using a rented U-Haul truck. “California was home” to her sons, and “I was afraid to rock the boat” by moving, she said.
Just adapting to a much smaller, isolated city far removed from the Pacific Ocean took time for many. George Martinez, communications director for the Tucson Unified School District, remembered meeting some of them when they first arrived for tours of the region.
“It was obvious they were not happy,” he said. “They were up front about it, that they were disappointed they had to leave California.”
The 4,000 Hughes workers already in Tucson weren’t thrilled either. “A lot of the California people weren’t welcomed real well by the Tucson Hughes people,” said Debbie Esparza.
The Tucson veterans “kept hearing how hard it was” for the Californians who moved, “and all the things they had to go through, and yet they were buying houses that the Tucson people couldn’t afford,” she said.
Hughes, a Los Angeles-based unit of General Motors Corp., brought the Californians to Arizona to streamline its billion-dollar missile business, which makes the Tomahawk, Standard and Maverick warheads, among others. With Pentagon spending for missiles waning, Hughes consolidated to slash its production costs and keep earning a profit on what contracts remain.
That decision paid off last September, when Hughes defeated McDonnell Douglas Corp. in a contest to be the Navy’s sole builder of the Tomahawk missile, a victory worth at least $1 billion to the Tucson division.
The win alleviated the Tucson employees’ layoff fears and partly eased the internal frictions. But the resentments have not disappeared entirely.
“There’s still some very clear lines of demarcation between” the California transplants and the Arizonans that were already there, said Stew Ernst. “Just this morning, I had some people ask me, ‘Why are all the California folks taking over?’ ”
