A profile of one of the state’s pioneer families that helped changed rural Phoenix into the urban landscape that it is today.
>> Michael Grant:
Tonight on "Horizon," a new effort by conservationists to reform state trust land law. That plan you may be voting on next year. And the tale of a family who helped build rural Phoenix into the metropolis it is today. The Luhrs family on tonight's Arizona story. Good evening, welcome to "Horizon." I'm Michael Grant. An Arizona State University committee has determined no university policies were violated in their report concerning ASU football player Loren Wade. Wade has been charged with murdering former ASU football player Brandon Faulkner in Scottsdale. The report did point out errors in judgment made by Coach Dirk Koetter and former athletic director Gene Smith. Several recommendations were given to ASU president Michael Crowe, including creating a hotline for anonymous reports of threats.
>>> Michael Grant:
If proponents of a new effort to reform state trust land law can gather nearly 190,000 signatures by July 6 of next year, that plan is going to be on the ballot next November. The proposed amendment to the state's constitution is the result of five years of talks between conservationists, business groups, educators and others. The primary mission of state trust land management is to earn money for Arizona's public schools. In the next 10 years, that fund is expected to grow to over $2 billion. Larry Lemmons gives us an overview of the plan.
>> Larry Lemmons:
Desert environments like the McDowell Sonoran preserve would become part of the 694,000 acres that would make up a conservation reserve under the plan. Land would be set aside permanently for research and education purposes. Other provisional reserve lands would be made available for purchase for a period of time. The plan would also allow trust lands designated for conservation purposes to be transferred without auction if the trust receives adequate consideration for all the lands involved in the transfer. Regardless of whether it receives the true value of each individual parcel. The plan would establish a way by which the highest and best bid for land would be determined at auction but then enhanced economic benefit would come from future gross revenues from that land. Transfers of rights-of-way would be established. A word of trustees would be created. As well as a way to fund the trust administration. Voters would be asked to amend the state constitution allowing land to be sold for conservation. Currently public lands must be sold for the highest and best use. The plan would also ask Congress to amend the federal enabling act of 1912 that allowed Arizona to become a state. Land included in the plan reaches across the state. In the north, large areas of land would be included, such as the upper Chino Valley grasslands near Prescott. And Centennial Forest near Flagstaff. In the south, there are many areas around Tucson such as the Santa Cruz wildlife corridor. In the west, there are the bureau and land management wilderness in holdings. In the east the Springerville grass grasslands. In Phoenix, more area still, such as the McDowell Sonoran preserve, the Phoenix Sonoran preserve, the White Tank Mountains and rainbow Valley. Not included in the initiative is anything related to grazing rights. Earlier drafts did include a number of rancher considerations. To address that question and to give us an overview of the proposed amendment we spoke with one of the co-drafters of the plan from the Sonoran Institute, Andy Laurenzi.
>> Larry Lemmons:
Attempts to reform state trust land laws haven't been very successful. Why do you think this initiative will be more successful?
>> Andy Laurenzi:
I think one thing that's important to point out is past attempts focused on one issue, land exchange authority. This issue does not deal with land exchange authority so it really is fundamentally a different issue and something the voters haven't seen. It's all about conservation and safeguarding funding for education.
>> Larry Lemmons:
You're asking voters in this to amend the state constitution and also to ask Congress to amend the Enabling act of 1912. Do you foresee some difficulties in getting that through the voters?
>> Andy Laurenzi:
I think whenever you're amending the constitution it's like through the -- likely the voters are going to take a much harder look at it. We're mindful of that. We've tempted to produce a package that's fairly simple and straightforward so the voters will have a fairly simple set of issues to consider. As far as the federal delegation, I guess our assumption is if the Arizona voters pass it means it has the support of the Arizona population and there's no reason to expect the federal delegation won't attempt to honor the vote of the Arizona voters.
>>Larry Lemmons:
The Arizona preserve initiative back in 1996, an attempt also to preserve land, that's sort of in limbo, ran up against some land rights activists and then there was fear of lawsuits. Do you anticipate something similar in that regard this time and if so, what do you expect to do to do about that?
>> Andy Laurenzi:
The reason we're actually doing the initiative is driven in large part because of the problems that the Arizona preserve initiative had. That was a stab toward a set of changes enacted by the legislature that really in order to be legal, at least in the opinion of some people in the Attorney General's office and the land commissioner, requires constitutional change. So part of our proposal is an attempt to eliminate the problems that Arizona preserve initiative had by amending the constitution. Property rights advocates, activists, may or may not decide this is in their interests. We're pretty confident, though, that the broad set of folks out there are going to find this an attractive proposal.
>> Larry Lemmons:
What is it about the conservation aspect of it for your organization? What do you like best about this?
>> Andy Laurenzi:
I think it's taking really some of the crown jewels of Arizona and setting them aside for future generations. We're talking about places like Kartchner Cavern State Park, talking about Picacho Peak state park, some of the mountains on the sides of the superstition wilderness area. I think a lot of people when they visit the Peralta trailhead probably look at some of the mountains to the south and think they're part of the wilderness area when they're not. They're unprotected state trust lands. In the Phoenix area are the McDowell Mountains. And the City of Scottsdale has voted on numerous occasions to raise money to protect those. We have the Phoenix Sonoran preserve in North Phoenix that's coming online. That's all state trust lands. So really it's the significance of these conservation lands. They're some of the best natural areas in the state, and this will help protect them.
>> Larry Lemmons:
Earlier versions of the ballot initiative had a grazing leases also involved in the mix. That's not in it now. What happened? Why aren't ranchers' concerns now in this ballot initiative?
>> Andy Laurenzi:
That's a good question. There were several parts of the initial proposal that was generated a year ago that on further reflection did not have a broad base of support. There were concerns being raised about them both in the legislature and outside. I think what we did is we took a look at what are the real core issues we want to address and how can we simplify this Act in a way that it's going to be very understandable to the voters and that led you us to remove land exchange authority, we've eliminated the grazing rights provisions, essentially keeping things status quo and really focusing on conservation and education funding.
>> Larry Lemmons:
When you say land exchange authority, at the moment the Arizona State Land Department, they make the determination about who to sell -- they put it up for auction. So is that different from the way things stand now?
>> Andy Laurenzi:
Well, in that case there won't be anything different. The way they've attempted to change things in the past was there were instances, and we're talking now 15 years ago or more, where the land department instead of receiving cash would, in fact, work out an arrangement with a private land owner and they would exchange land of equal value. That was deemed to be unconstitutional, and when we asked the voters on, I think, six occasions now to give the land department the authority to engage in those kinds of exchanges, I'll trade you my property for your property, they've rejected it. I think we've heard that message loud and clear. Land exchange authority is not part of this proposal and, again, the idea is to focus on important conservation lands and the revenue that's generated for education.
>> Larry Lemmons:
And speaking -- we might go back, too, to make something clear, we were talking about a change in the constitution which required basically that you sell the land to the highest bidder, and why is that not so good?
>> Andy Laurenzi:
I think when it comes to certain lands, and here we're talking again about roughly 694,000 acres, these are -- some of the most important natural areas in the state, and I think what people are saying is that it's important to protect those lands, and the notion that in order to protect them they should be sold at auction to the highest bidder having to compete with really the development industry where those lands are then put at risk in case you're not successful, I think people are realizing that for a certain set of lands, because of their importance, we need to create other mechanisms, and one of them is to make these lands at fair market value, some of them, but making them a value without auction. So giving local communities an attempt to raise the money, pay for the land for its value, and if they aren't able to, you know, then they'll be able to be part of the regular pool of state trust lands.
>> Larry Lemmons:
So my next question then would be, do you anticipate difficulties from developers who might want that land?
>> Andy Laurenzi: No, I think our anticipation is that one developers were sitting at the table when a lot of these points were negotiated, and, two, what the development community likes is certainty. And I think by making it very clear what the rules are, that gives them the type of certainty that they can go about doing their business and being successful at it. We anticipate certainly that the development community will not be in opposition to this measure.
>> Larry Lemmons:
Well, thanks very much for talking with us.
>> Andy Laurenzi:
Sure. Thank you.
>> Michael Grant:
To talk further about the proposed amendment and to talk about where the money goes the president of Arizona education association John Wright. John, welcome back.
>> John Wright:
Thank you.
>> Michael Grant:
Let me get your take on a couple of the points that Larry covered there. The coalition now does not include ranches. Doesn't include the home builders association, which had been involved in a four or five-year process as you guys have worked through this. Those both rural and urban can be some pretty formidable political forces. Does that bode ill for the proposed amendment?
>> John Wright:
No, I don't think so. What we've tried to do is to really hone in on the key and core issues of this reform package, and to be sure that we were addressing a number of interests that offer certainty as you heard Andy Laurenzi mention that provides for conservation of valuable lands that enhance the revenue stream for the public schools in Arizona. Without running in conflict of other interests. So while the home builders were not part of the final drafting coalition that put together this initiative, we certainly drafted very carefully to be sure that we weren't putting something out there that would be contrary to home builders' interests. While we have taken references to grazing leases and other rural components out of the initiative, we've tried to be very sure we didn't put anything in there that would be contrary to the interests of the ranchers. So while they're not necessarily part of the coalition advancing this, we believe we've got a very tightly defined package that doesn't cross any of their interests, so we wouldn't be risking their opposition.
>> Michael Grant:
Is that your hunch? Or have they actually signaled that? I mean, have they taken a position on the amendment, those -- they being those two groups?
>> John Wright:
I do not believe either has taken a position at all. We have been in casual conversations with their representatives to be sure they knew what we were advancing. We did not want to surprise anybody. I believe the response has been, "we don't have a position on this right now, we're going to watch closely and we appreciate being kept in the loop in terms of communication.".
>> Michael Grant:
John, here's a subject I think some people can be scratching their heads about, obviously as we mentioned the primary mission of the trust is to provide money for education. There are now some earmarked monies above a certain level. They go directly into the support of education. Why in the world would the education association be arguing for a measure that doesn't require all of the lands to be sold at their highest and best value?
>> John Wright:
Well, we really think we're going to be able to add value to the trust in the long term through this reform. Certainly Arizonans are conservationists by nature and we know that there's a lot of concern about the growth, the pace of the growth and the reach of the growth, including teachers, including people whose interests are public schools. We believe that by providing the protection for those key areas, by putting a responsible planning process into place, that we manage to actually meet both interests at the same time. We can preserve the land. We can protect it. We can make some available for purchase at market value for conservation. And all of that actually in the long run enhances the value of the trust. Any time we have set aside one particular acre of land permanently for conservation, we have significantly increased the value of all the lands surrounding that acre. So by really improving the value for all of Arizona, in the long term the trust is in a better place and we're making sure we can use the proceeds from state trust land revenue to increase funding for public schools without necessarily just putting land up for a fire sale and getting as much as we can as quick as we can. That's not good planning.
>> Michael Grant:
Why can't you do that currently? I mean, if you're searching for highest value, and you're looking -- let me take a hypothetical thousand-acre parcel and you've got 100 acres, that by setting it aside for open space, you can demonstrate that the remaining 900 acres are going to move at 1.5 times the value they would otherwise move at because you do have this open space element to it. Why is that not possible under current law?
>> John Wright:
According to our current conservation, we cannot set land aside for conservation. Under our current constitution, that set aside for conservation isn't permitable. It has to all go to the highest best value at auction unless you can find a conservation group that can that outbid a well-funded developer and we just don't see that as possible.
>> Michael Grant:
Give us an idea of how the trust fund operates. I mean, how does it move money to the schools? There are some other uses for the trust fund.
>> John Wright:
There are, about 85% of the trust fund is for Arizona's K-12 public schools. It's really a trust account. It is an investment that Arizona made for its schools long term. So the proceeds from sales of state trust lands go into the permanent fund. The revenues generated from that permanent fund go to the various beneficiaries, again 85% of which are the public schools. Up until proposition 301 passed in 2000 and then a subsequent proposition in 2002, that money essentially just supplanted the general fund obligation for our schools. So by the year 2000, about $72 million in earnings were being generated from the permanent fund, and if you have a budget for funding all of our schools in Arizona, that was $72 million, the legislature didn't need to appropriate. We have now language that says, supplement, not supplant, and the money goes directly into the classroom site fund created in the year 2000.
>> Michael Grant:
What's the classroom site fund spent on?
>> John Wright
The classroom site fund is not the traditional operating budget of schools and school districts, it's designated specifically to base pay for teachers, to compensation to teachers for performance and to a menu of other items that goes to directly assist students and intervention in their learning.
>> Michael Grant:
That's essentially the same thrust included in the .6 percent - it's a sales tax.
>> John Wright:
The classroom site fund is the fund that's funded by the .6 of a percent sales tax.
>> Michael Grant:
Okay. And currently, what's the threshold level now on earnings above it?
>> John Wright:
Anything about $72 million goes right to the classroom site fund.
>> Michael Grant:
All right. Another controversial aspect of this is a creation of a board of trustees, and I know that there are several -- in fact, I think Governor Janet Napolitano actually expressed some concern about that aspect of it when it was in its legislative version about 14 months ago. Why do we need a board of trustees in addition to a state land commissioner?
>> John Wright:
Well, the board of trustees is being established as a governance mechanism to oversee the trust just as any trust would have a board that's looking out for the interests of the beneficiaries. As we're moving this reform forward, we're offering to Arizona through the work of the land department and the land commissioner some additional ways to create value for the trust other than an auction to the highest bidder. So that's a little bit of a different way to operate, and as beneficiaries, what we see is that with these new tools we really want an oversight board to take a final look and give approval to how some of these tools are implemented. We want to be sure there is a board whose ultimate interest is the beneficiaries and decisions made at the land department, by the land commissioner and in long-range planning are interests made in the best interests of the trust for the purpose of the bin fisheries. We also believe we have a little extra insulation of -- up against political or other influences in these decisions so that we don't have a land commissioner who could possibly be subject to some sort of pressure to make one decision or another. We now have a board of trustees to add a little bit of extra insulation from that type of pressure.
>> Michael Grant:
Okay. Well, out of time. I've got about 19 follow-up questions but that will take us to this point. Looking for, what, 190,000 signatures by next summer?
>> John Wright:
190,000 valid signatures and we will have them.
>> Michael Grant:
Okay. John Wright, thanks for being here.
>> John Wright:
Thank you.
>> Michael Grant:
Phoenix is officially America's sixth largest city. It has a population in the City of about one-and-a-half million people. It's come a long way from when it was incorporated back in 1881. Back then only 3100 people called Phoenix home. In tonight's "Arizona Story" Paul Atkinson introduces us to one pioneering family who helped put Phoenix on the map.
>> Paul Atkinson:
Phoenix... one of America's largest cities rose not from the ashes, but from the hard work and determination of pioneer families such as the Luhrs. The family built the city's first skyscrapers. Now reminders of the past, the Luhrs building and Luhrs tower once stood as beacons of the future.
>> Robert Spindler:
The Luhrs tower and Luhrs building served as icons that represented to many Phoenicians the transition from Phoenix as a small town to Phoenix to a metropolitan center and a great City of America.
>> Paul Atkinson:
George Henry Nicholas Luhrs left his home in Germany in 1867.
>> Alan Luhrs:
He was about 20 years old when the Prussian army decided that they would kind of like to get some these young guys, and my granddad wasn't particularly crazy about joining the Prussian army, so he left and came to the United States.
>> Paul Atkinson:
Trained as a wheelwright at the age of 7, Luhrs went to work at a California gold mine building and repairing wagons. After a couple years he made his way to Arizona and worked at the Vulture mine in Wickenburg.
>> Jean Stroud Crane:
He used to tell us he made more coffins than he made wagons because of the Indians. Now, he was never bothered with the Indians. He went out one time and picked up the superintendent's son, who had 25 arrows in him and brought him back for a funeral. But my grandfather was never, never bothered.
>> Paul Atkinson:
George Luhrs became a U.S. citizen and headed to Phoenix in 1878. He opened a wagon shop and horse stable with another man on the corner of central and Jefferson. On a trip back to Germany, Luhrs married Katarina Gretchen DODENHOUF, a girl who grew up next door. She left the comforts of home to arrive in desolate foreign land.
>> Alan Luhrs:
It was -- it was the end of the world. She had the first bathtub and the first curtains on her windows and all of that. There wasn't anything here.
>> Paul Atkinson:
Luhrs helped change that. In 1887 he and his partner built the 20-room commercial hotel.
>> Robert Spindler:
Personalized service and superior accommodations were the hallmarks of the Luhrs family and the Luhrs properties.
>> Paul Atkinson:
Luhrs closed the wagon shop and bought out his partner's interest in the hotel. The Commercial Hotel was later named, Hotel Luhrs. It became the family's home. The Luhrs' children, Ella, Emma, Arthur and George, Jr., all grew up in the hotel.
>> Robert Spindler:
Most of the members of the Luhrs family lived at the Luhrs hotel. In fact, they ran a family business, and everyone was expected to participate and be involved in the family businesses.
>> Paul Atkinson:
Less than 10 years after he arrived in Phoenix, George Luhrs had become a community leader, having served on the Phoenix city council, the local school board and the Masonic lodge. He also volunteered for the board of trade, a precursor to the chamber of commerce. Although a highly thought of civic leader, Luhrs did make mistakes. He helped convince the territorial legislature to award Phoenix the state insane asylum instead of the University of Arizona, which went to Tucson.
>> Jean Stroud Crane: We think he was one of the ones that said, "hey, bring that to Phoenix because that's going to earn Phoenix prestige and money and let Tucson have the university." Well, Tucson was brighter.
>> Paul Atkinson: But it was Luhrs' private actions that would define his family's character.
>> Jean Stroud Crane:
He was very generous and thoughtful man, and he would loan his friends and people who deserved it money but would not charge them interest. At the same time he was paying 3% a month interest on the money he was borrowing.
>> Paul Atkinson:
That reputation allowed Luhrs to borrow money to build the 10-story Luhrs building in 1923. Finished in 1924, the Luhrs building soon filled with law firms, insurance companies and other offices. A year later George Luhrs suffered a stroke. His son Arthur left the geology profession to run the Luhrs hotel with his sister ELLA. George, Jr., quit a promising law career to manage the Luhrs building. Then in March 1929, the Luhrs broke ground on what would be Arizona's tallest skyscraper, the 15-story Luhrs tower. George Luhrs, Sr., never saw it built. He died two months later.
>> Robert Spindler:
George, Jr., absorbed all of the responsibilities of his father in 1925. He was about 30 years old at that point. And it was an important transition. Four years later you had the depression, which was a significant threat to the survival of the Luhrs property and the Luhrs businesses.
>> Jean Stroud Crane:
There were times when people would insist that he would take worthless stock, and he did it because he needed to keep the buildings filled, and besides, he knew they were having a hard time, too.
>> Alan Luhrs:
They wanted the business and they couldn't pay, and it wasn't because we were floating in money. There wasn't anything else we could do.
>> Paul Atkinson:
With little money to pay their mortgages, George, Jr., begged their lender to extend the loans instead of foreclosing. It was the first time the lender agreed to postpone payment on any major loan. The Luhrs' business survived the depression, but the experience made the pioneering family of downtown Phoenix cautious about future development projects. Whereas the Luhrs children had no choice but to work at the family hotel and properties, their children were discouraged from doing the same.
>> Jean Stroud Crane:
That, I think, was a great mistake, because uncle George did not train one of his either -- he had three nephews and one niece and he did not train anyone to follow his footsteps. I think that was a very great error.
>> Paul Atkinson:
By the mid-1970s, the health of George Luhrs, Jr., was failing. Faced with competition from brand-new buildings, the family sold the Luhrs building, tower and hotel in 1976. The hotel Luhrs was demolished several years later, ending a legacy that began almost 100 years earlier. Pioneer historian Charlotte Hall wrote a sonnet about George Luhrs, Sr., and the legacy his family left behind.
>> Jean Stroud Crane:
"Do you remember when the town was young, the kindly honest busy little man who every moment of his lifelong span helped build the place whence his success was rung."
>> Paul Atkinson:
Identity theft... Arizona is number one in the nation for this growing type of crime.
>> Andrew Thomas:
The fact that we are now number one in the nation tells us that we've got a tremendous problem on our hands.
>> Paul Atkinson:
Learn the many ways thieves steal your identity. The problems it creates and what you can do to protect yourself. A special edition of "Horizon" Tuesday at 7:00.
>> Michael Grant:
And Wednesday we'll take a look at summer energy demands. Thank you very much for joining us on a Monday evening. I'm Michael Grant. Have a great one. Good night.
Andy Laurenzi:co-drafter of the plan from the Sonoran Institute;
