A discussion about Arizona’s economy, downtown Phoenix, and the business of sports with Jerry Colangelo, one of Arizona’s most influential business and community leaders, who currently serves as Chairman of the Board for USA Basketball.
Ted Simons: Good evening, and welcome to "Horizon," I'm Ted Simons. He helped Arizona win a World Series and returned USA Basketball to gold medal glory. Now Jerry Colangelo is part of a dream team of Arizona business leaders appointed by Governor Jan Brewer. The Governor's Commerce Advisory Council is looking for ways to reinvent and revitalize Arizona's economy. Joining me to talk about that and much more is NBA Hall of Famer, chairman of USA Basketball, and Arizona businessman, Jerry Colangelo. Good to have you here, thanks for joining us.
Jerry Colangelo: Nice to be with you.
Ted Simons: We're in downtown Phoenix now, no longer in Tempe. When you're down here and you see everything happening in downtown Phoenix, what do you think?
Jerry Colangelo: Welcome to my neighborhood, by the way. I've been here for a few years in downtown. I'm excited to see all the development that is taking place and we've come a long way. I think the future of downtown is very bright.
Ted Simons: Would a young Jerry Colangelo, just arriving with a few hundred dollars from the Chicago area in town, as he did so many years ago, if he were arriving today would you sense similar promise in what you see?
Jerry Colangelo: Oh, much more so. When I arrived back in 1968, downtown didn't have very much to offer at all. I'm an urban person by nature, that's where I feel very comfortable. When I see the development in the last 10 to 15 years, which has been enormous, and what could happen over the next decade or two in downtown, I think we'll see a bustling 24/7 downtown, very active, with a lot of retail, which is something we've always waited for. And a lot of people living here, because there's an urbanization taking place in America today.
Ted Simons: You mentioned what you've seen in the last 10 to 15 years. Yet prior to that, those of us who have been around here a while remember what downtown was like. It seemed to take forever to get downtown Phoenix especially going in the direction it seems to be heading right now. Why did it take so long?
Jerry Colangelo: People were not willing to take some risks and willing tor first and foremost. It really took APS with its development, and also the Phoenix Suns, who committed to building an arena to put two particular major projects in place. And on the basis of that, people would come. I'm referring to the Arizona Center, the APS project. And once those projects were in place, people did walk the streets, it was safe, and all of a sudden the momentum started to build. Then it was only a matter of time before things fell in place. That was only 1987 when I purchased the Suns, announced that we were going to try and build a facility somewhere. I picked downtown rather than elsewhere and we opened in 1992. Since 1992 all this has taken place.
Ted Simons: Has it taken place as fast as you thought it would?
Jerry Colangelo: It's never fast enough for me. I wish it had been faster, sooner, and more momentum. But you have to be satisfied with the circumstances. We had to overcome a lot of obstacles, even politically there were issues regarding some of the things we wanted to do. As you know, even the ballpark was a big issue because of the tax situation and the participation in building the stadium. But today I think very few people would take issue with what took place in downtown Phoenix, because it gave it a rebirth.
Ted Simons: I want to get back to that in a little bit. I know your new book is out chronicling USA Basketball. How did USA Basketball lose its edge? What happened to the focus there?
Jerry Colangelo: First of all, the system itself needed to be changed. The selection process on players and coaches was very political. I had to even -- I had been a part of that process years ago. And we fell on tough times because the rest of the world had caught up in terms of competition. We needed to change our system and that's when the commissioner asked at the appropriate time, coming off of the year 2004, a major year for me, stepping down in baseball, selling the Suns, Hall of Fame in basketball, prostate cancer, a whole bunch of things. I wanted to get 2004 behind me. Early in 2005 I got the call from the commissioner saying, would you take over USA Basketball. I said yes and the rest is history.
Ted Simons: Were the problems that you saw were inherited were they systemic or something that was happening awfully fast?
Jerry Colangelo: They were systemic problems in the sense that we were starting to take things for granted, not appreciating, and recognizing how quickly the rest of the world had come in basketball. I didn't like the attitude that we had and all of that had to change.
Ted Simons: A culture shift was necessary. How did you get that shift, A, did you run into a lot of dissenters?
Jerry Colangelo: People ask that, that's what's amazing, how did you get the players to do it. We needed to show respect for the rest of the basketball world. I met with coaches and players and shared my passion, why I was doing it. I didn't need it; I did it because I cared. I was unhappy with how people looked at us around the world and athletes and basketball people. I was going make a change and if they wanted to be a part of it, jump in.
Ted Simons: When you say they needed to show respect for basketball, what does that mean?
Jerry Colangelo: People in the rest of the world thought our teams and players were arrogant and didn't show respect for their game and how far they had come until they started to beat us. 2004 was kind of the culmination of disrespect and we lost three times in the Olympics. That's when the call took place. NBA owners, NBA superstars, coaches, all figured out --
Ted Simons: Could they have figured this out without someone like you coming along and saying, get in a room and get it done? Or do you think this would have happened otherwise?
Jerry Colangelo: I'm not going to say that I'm the only person who would have been able to get the job done. The commissioner has said that I was. Be that as it may, it took someone willing to do what needed to be done, who seemingly had the respect of the players because of the time and effort that I've put into the game for four decades. And because of the mutual respect that was involved, it was an easier sell for me to talk to the players and ask them to participate.
Ted Simons: And obviously they participated, obviously they all bought in. Do you think it was easier perhaps to buy in on something in which the goal is there? Whether it's the world championships or the Olympic gold, it's relatively short-term; it's a hard goal, a gold medal. Did that make it easier?
Jerry Colangelo: To some degree. They had to buy into the passion and the vision. All I had to sell was a vision of what needed to take place in terms of the culture. I had a game plan, and if they wanted to be a part of this there was going to be a great reward. I said the following. If you do what's asked of you and do the job, we will win. But if you do it, I promise you it'll be the greatest experience you've ever had in your life. To a man after we won the gold medal in Beijing, they all said yes.
Ted Simons: When you were saying those things, did the message ever change a little; did you have to revise things along the way?
Jerry Colangelo: No, that's the way it's been. I had one message and never had to alter it at all.
Ted Simons: That's the goal of USA Basketball, chronicled in the book. Getting back to Arizona, in terms of what we find with lawmakers and leaders in Arizona, can you get that same kind of commitment and cooperation among folks here in Arizona?
Jerry Colangelo: Well, that's a challenge. But the analogy is there for sure. When the Governor asked whether or not I would help and participate in looking at the Department of Commerce and coming up with recommendations as to what we might be able to do in the future, the analogy I used was what I went through with USA Basketball. It was in shambles. You could say in some degree we are in shambles here in our state as we relate to our economy. It's not going to change dramatically with a lot of rhetoric or lack of cooperation between the legislature and the business community. We need a game plan. We need people to buy into it and jump in together collectively, collaboratively, to make a change.
Ted Simons: You talked about how the culture in basketball had changed. There was arrogance, all sorts of things. What happened to Arizona? Did we lose our focus? And where did that happen?
Jerry Colangelo: Not so much arrogance but I think taking things for granted. Our style of life, our sunshine was enough. No, it's not enough. Other states took much more initiative, they had incentives, and they went out and solicited companies. They brought high-paying jobs. They had more of a game plan than we did in our state. We've always had too much friction between the governor's office and the state legislature to get things done. I think that needs to change.
Ted Simons: Was this the kind of thing that prior to the '40s, â€˜50s and '60s in Arizona, was that mindset at play more than it is now?
Jerry Colangelo: That's before my time but the history of the Phoenix 40 was that they needed an organization, a group of businesspeople to take the bull by the horns. Government wasn't getting the job done. Kind of interesting. So here we are we've kind of repeated ourselves in a different fashion and form. But it's not too late. We are at a crossroads. We can go one direction and make change and do some very positive things and have a very bright future, and I believe we can get that accomplished. Or we can go the other direction if people are not willing to do what needs to be done.
Ted Simons: You talk about that one direction. We mentioned earlier that obviously the USA Basketball team had a particular goal in mind.
Jerry Colangelo: Right.
Ted Simons: Does Arizona in general, Phoenix in particular, do we know what we want? Do we have a goal where someone can say, all right, nose to the grindstone, let's go get it?
Jerry Colangelo: I think we have a lot of opinion-makers. We have people who have strong ideas about what they would like to see in terms of vision for the state. Again, whatever that may be, I'm not going to be the one to say this is what we should do. I will say this. Let's collectively decide what our goals are, what the game plan should be. And then my job, where I've been successful, is getting people to march in line, stick with it, keep your focus on that goal and objective and go for it. When I was a young guy in my old neighborhood in Chicago, there was an old-timer who pointed to a star one night and says, Jerry, remember this. In broken English, he was an immigrant. It's better to be the star for one day than to never get there at all. Keep your eye on the star and go for it.
Ted Simons: Are Arizona leaders ready for that message? The status quo is awfully comfortable to a lot of folks out there.
Jerry Colangelo: It may be. Recently there's been a lot of publicity about the fact that now there's some movement and legislators have much more of an open ear today than they did a month or two months ago. I am hopeful that at the end of the day there will be this collaborative effort that will make some change available.
Ted Simons: As far as the Governor's Commerce Advisory Council, can you tell us as much as you can what she wants you to look at, and what she wants the council to achieve?
Jerry Colangelo: She's been terrific in this responsibility and asking me to take the lead on this advisory council, she's not giving direction. She's basically saying you understand what our issues are. Please come back with a game plan, come back to us with what needs to happen. We're still in that formative change. We have, again, a lot of ideas and opinions. We're soliciting a lot of information. We have best practices from around the country. We know some of the great programs and some of the bad ones and the reasons why, one way or the other. I think now we develop our own game plan for Arizona, looking at our resources, looking at our capacity. If we keep our eye on the tiger, if you will, we will be able to get some things done.
Ted Simons: You mentioned best practices around the country. I would imagine around the world, as well. Sticking to the country, Texas, Florida, I keep hearing they are doing some things right. I don't know who's doing things wrong. What are you seeing out there?
Jerry Colangelo: You're right, Texas has been an incredible state in terms of accomplishing a great deal. They have great collaboration. Government and business are on the same page and you can have commerce being controlled, in my opinion, by the legislature. You need to let the business community make a plan, and have the support of government. Government should really pay for this. Who really is going to be the recipient? It's the people of this state. It's the state that needs that kind of direction. You can't get it from the legislature.
Ted Simons: You can't get it from the legislature, but the business community, for at least a while now, we can go back as far as we want and argue about that -- at least for a while the business community does not seem like it has taken the bold steps, the risky steps. It almost seems like the business community and leaders in general are afraid to fail. Are you seeing that?
Jerry Colangelo: I think in some cases that are true. They need to be motivated, they need to feel that there's a chance truly, that change could take place. I think they feel defeated to some degree. They have taken a lot of hits from government in terms of taxes. It's pretty difficult to do business right now in our state. We have to make it easier to do business. We need to be able to go out and solicit the kind of companies -- as I said earlier -- who are attracted here for all the right reasons, the right business community.
Ted Simons: Okay. And we've had economists on who talk about that, who talk about the tax climate, especially the corporate tax climate. But the individual income tax climate has improved over the past 20-some-odd years. Will say, businesses looking to relocate are looking for a professional basketball team they can take their kids to, a symphony, a good arts culture, infrastructure, these sorts of things. How do you balance that?
Jerry Colangelo: If you were to prioritize what they are looking for the area of -- where did I spend my career? It was in the sports entertainment business. Knowing full well that was just one part of what people look for. I wanted to make this city a major league city. The only time that would happen is if you had all four major league sports. We got there, we were one of 11 cities that had all four. You know, some companies did come here. Dial, grey hound, Armor, back in Chicago at the time, then they split up and did their things, that was a big deal. The suns were the only thing that was here at the time. And that was a big, big attraction for them. But that's only one piece of the puzzle. I think companies, I think people in our state, by the way, this is really important and before I forget it I want to mention this. It's not just attracting new business. How about retention? How about the people who are here who have made a major investment in this state, who need help? Who need to be looked upon as not taken for granted because they are already here. So I think retention is a big deal because some companies are being lured to go elsewhere. We can't afford to let that happen.
Ted Simons: If you have a company here that knows the infrastructure is strong, the education system is not only strong but valued, there are many people that feel that Arizona is not -- the state simply does not value education. With that kind of mindset how do you keep corporations from saying, I don't know how much longer I want to put up with this.
Jerry Colangelo: I'll be honest with you, I agree with him. When I see Arizona ranked in so many different capacities 48th, 47th, 49th, and education is a big part of that, that's a crime and embarrassing to me. Shame on us for being in the position we are in. That didn't happen in the last year or two or five or 10. That's been ongoing for a long time. That must change.
Ted Simons: You mentioned with USA Basketball you had to work from the top down. Same thing have to happen in Arizona?
Jerry Colangelo: It's a combination here, I think, in my opinion. If we could start at the top and just kind of -- you know what would really be nice? To tell everyone to take a vacation, the people down to the state legislature and politics, and let some people just kind of fix what needs to be fixed in terms of the system. I'm not trying to be arrogant when I say that. But sometimes that's what it really takes, that kind of a sea change. That's not really going to happen. All we really need is to have people have an open mind to change, to understand that maybe the business community can offer ideas and concepts and a plan to government, and collectively we can address these issues to make our state better in all of these departments. But education is one of the keys.
Ted Simons: Okay. How do you do that? How do you get politics -- another quote of yours with these efforts, as far as the Commerce Advisory Council is not political -- really? It seems like everything in that kind of milieu would be political. How do you get past all that and fix all this stuff when politics are such an important part of what goes on?
Jerry Colangelo: It's a reality that it is a part. You don't have to play the political game, in my opinion. You can lay out a program and respect one another, but let the people who have the experience in building something build.
Ted Simons: You're not without your critics. As you mentioned earlier in the program, speaking of politics, the idea of the county tax for the baseball stadium, even taxes regarding the arena, some folks say they will never set foot in the arena because of the taxes and these sorts of things. Others say Jerry Colangelo is a visionary, bold, he takes risks but takes risks with taxpayer dollars and that's easier to do than the entrepreneur who comes in and puts up their own money. How do you respond to that?
Jerry Colangelo: Well, it's totally untrue. People who know me and what I've done in my business career would say that I've always been a risk-taker. I have spent a lot of personal money taking risks because that's the only way to get a return on investment is being able to fail. I think the city and state was better for what I was involved in, in each case of failure. I felt that the city didn't owe us a thing. We had to go out and earn the support and respect of the community by how we conducted ourselves in running our business, and how our players did what they did on the field, off the field, on the floor, off the floor, et cetera. People could look back and be critics, but I can look in the mirror and know what I did and what I stood for. I'd do it all over the same way.
Ted Simons: I'm not sure how reflective a person you are.
Jerry Colangelo: I am.
Ted Simons: When you look back, both tax situations, could you have handled it differently or better? What do you think?
Jerry Colangelo: It's really interesting. The City came to me and said can we make a deal on an arena. We collectively made a deal on an arena and we shared, that's how that took place. As far as far as the ballpark was concerned, people came to me and said, Jerry, you're the only one that could make Major League Baseball happen, would you do it. My first response was no. Then I was told there was a tax on the books to build a baseball park. I didn't solicit that, it was put there by the legislature. I did take the hit for that but I'd take the hit again. For what we accomplished and did, that's another thing that's kind of amazing to me. Here we are talking about all the issues and problems we have in our state, and if people are going to waste time looking backwards on what we did, you know, take a look at downtown Phoenix, it's -- we're a long way from where we were back in the '60s and '70s. That's all good and positive stuff. I remember when we were working, the business community on the expansion of the civic plaza, and we had the support of the Speaker of the House and the leader of the Senate. At the last minute they were going to go backwards on us on the vote for political reasons. I remember going down to the state legislature and telling them individually and then collectively with a whole bunch of people what I thought about their inability to stand up and do what needed to be done.
Ted Simons: You mentioned the word share when you talked about working with the City of Phoenix and the arena. The concept of sharing, everyone throwing something into the pie and hoping it rises and is fun to eat, a tortured metaphor there. Is that lost in society today? You got it with USA Basketball, there were sacrifices and there was cooperation. Is Arizona ready for that, to go ahead and take the next step?
Jerry Colangelo: They should be and I don't see any reason why not. I think there are a lot of people who are jittery about the future of our state, jittery about the economy. It's a world issue, a domestic issue, a state issue, a city issue. And so with the right people making decisions and maybe showing some leadership and being willing to fail, but collectively trying to address these issues, we need a sea change. We can't keep doing things the way we've been doing them because it didn't work.
Ted Simons: Jerry, great to have you on the show.
In this segment:
Jerry Colangelo:Chairman of the Board, USA Basketball;