Video: A Phoenix reborn

By Jane Wells Correspondent
CNBC
updated 5/17/2005 4:31:46 PM ET 2005-05-17T20:31:46

In Arizona’ capital, the economy is much like the weather — hot and sunny.

Talk about a phoenix rising.

Fifteen years ago, Phoenix was hit by a real estate depression, thanks in part to a wave of savings and loan failures and their local poster boy, Charles Keating, who was convicted of fraud in 1989.

But these days construction is the fastest growing industry in this city. Some 100,000 people move here every year and among the nation’s top metro areas  ranks first in population growth, first personal income growth and second in job growth.

And the city is growing. Now at 500 square miles and a population of nearly 4 million, Phoenix is expected to top six million inhabitants by 2020. And it’s the nation’s fifth largest city behind New York, Los Angeles, Chicago and Houston (Houston may want to keep an eye on its rear-view mirror).

It’s hard to pin down exactly what Phoenix is doing to make itself so successful. In truth, it’s doing a little bit of everything, including tourism, defense, high-technology and biotechnology, healthcare and, of course, real estate.

But it’s still not good enough for some.

While the Phoenix economy is hot, the nation’s fifth largest city wants to look cool too, and so it’s investing $2 billion in its downtown area, tripling the size of the convention center, luring in biotech companies, building a new campus for Arizona State University and turning an old hotel into the tallest building in Arizona — a 50-story condo and retail complex that some hope will invigorate the downtown area.

Even New York real estate mogul Donald Trump is here hunting for property. And there’s plenty on offer in downtown Phoenix. But according to Arizona Republic columnist Robert Robb, not that much investment is needed. Phoenix has exploded just fine without it, he notes.

“A nice downtown is not something which causes prosperity, it’s something that prosperity enables you to purchase,” said Robb.

Economic growth brings challenges, of course. For decades, the fear in Phoenix has been that the city would see the same problems as Los Angeles, 375 miles to the west — smog, traffic, immigration issues and sky high housing prices.

But some, like Mayor Phil Gordon, argue that Phoenix is young, and has learned from the mistakes made by other cities, and from its own. “Our economy is a lot more diverse than it used to be,” said Gordon. “We used to depend heavily on semiconductors, and we don’t do that anymore.”

Yet while most other big American cities like Los Angeles or New York have distinct personalities, the spirit of Phoenix is difficult to pin down residents say.

Perhaps no one personifies the city of Phoenix better than former Republican Governor John Fife Symington, who resigned from office in 1997 after he was convicted of bank fraud. Now Symington has re-emerged as a well-known Phoenix pastry chef. He went to culinary school after resigning as governor and now his favorite thing to make is tiramisu.

“[Phoenix] is a great place to revive yourself,” said Symington, who has helped to start a culinary institute here. He says he may run for office again, and he predicts that it’s inevitable that Phoenix will turn into another Los Angeles.

Robb of the Arizona Republic says it’s critical for Phoenix to educate the second generation of immigrants flocking here, and to try to continue to provide housing for all levels of income, even as Californians and Las Vegas residents buy up relatively cheap homes here as rental properties, driving up prices.

© 2012 CNBC, Inc. All Rights Reserved

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