Arizona Attorney General Terry Goddard shortly before 5 p.m. Friday filed a complaint in U.S. District Court in Tucson to stop the closure of the Tucson Citizen.

A motion for a temporary restraining order is in the process of being filed, said Anne Hilby, spokeswoman for Goddard’s office.

The case has been assigned to Raner Collins, Hilby said, “but we do not yet know if he will rule on it before tomorrow morning.”

“The process has been initiated,” Hilby said. “We will be notified by the court as how Judge Collins will rule.”

Collins could not be reached for comment.

Kate Marymont, vice president of news for Gannett Co. Inc., visited the Citizen newsroom Friday morning to say the paper would print its final issue Saturday, continuing with a “modified” Web site focused on opinion and commentary.

When asked about Goddard’s action, Marymont said she could not comment without seeing the actual filing.

“I have little to say, I’d need to see what was filed and speak with our lawyers,” Marymont said.

Goddard was informed of the Citizen’s pending closure when Stephen Hadland, CEO of the Santa Monica Media Co. and the final bidder in the sale announced by Gannett in January, wrote a letter Friday morning asking Goddard to intervene.

“I am requesting the Arizona Attorney General’s office file a Temporary Restraining Order preventing the Gannett Corporation from closing the Citizen and require Gannett to continue printing the newspaper pending a sale to a qualified buyer,” Hadland wrote. “The Tucson Citizen has been systematically destroyed by its owners and I believe it remains a viable and popular newspaper in the community.”

Hadland has contended from his first bid that Gannett was not serious about selling the paper because it was only offering the name of the paper, its Web site, archives and a subscriber list, but not the 50 percent interest in the joint operating agreement it has with Lee Enterprises Inc., owner of the Arizona Daily Star.

The JOA has been in effect since 1940 and allows Lee and Gannett to share equally in the operating costs and profits of Tucson Newspapers, also known as TNI Partners, a subsidiary that handles all noneditorial operations for both papers.

Hadland,who said his bid for the Citizen “assests” was $400,000, considers his media company a qualified and viable buyer, something Marymont denied in speaking with employees Friday morning.

“In the end, there was no buyer,” she said.

Hadland said in a phone interview that if a paper goes without printing one day, it loses all value and that is why he urged Goddard to act quickly.

By Carli Brosseau, Renee Schafer Horton

One in every 164 housing units had filing in April

MIAMI — The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida, California and Arizona showing the highest rates, according to data released Wednesday.

Arizona posted the fourth highest rate, with one in every 164 housing units receiving a foreclosure filing.

The 10 states with the most foreclosure filings accounted for more than 75 percent of April’s national total. California documented the highest total (96,560), followed by Florida (64,588), Nevada (16,266) and Arizona (16,245).

More than 342,000 households received at least one foreclosure-related notice in April, RealtyTrac Inc. said. That means one in every 374 U.S. housing units received a foreclosure filing last month, the highest monthly rate since the Irvine, Calif.-based foreclosure listing firm began its report in January 2005.

April was the second straight month with more than 300,000 households receiving a foreclosure filing, as the number of borrowers with mortgage troubles failed to abate.

The April number, however, was less than one percent above that posted in March, when more than 340,000 properties were affected. The March data was up 17 percent from February and 46 percent from a year earlier.

“We’ve never seen two consecutive months like this,” said Rick Sharga, RealtyTrac’s senior vice president for marketing. “It’s the volume that’s surprising.”

While total foreclosure activity was up, the number of repossessions by banks was down on a monthly and annual basis to their lowest level since March of last year, RealtyTrac said.

But that’s far from positive news. Because much of the foreclosure activity in April was in the default and auction stages — the first parts of the foreclosure process — it’s likely that repossessions will increase in coming months, RealtyTrac said.

About 63,900 homes were repossessed in April, down 11 percent from about 71,700 in March, RealtyTrac said. But the mortgage industry has resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies Fannie Mae and Freddie Mac, together with many other lenders.

“All of these loans are now being processed pretty rapidly by the servers,” Sharga said.

Help might be on the way. The Obama administration announced a plan in March to provide $75 billion in incentive payments for the mortgage industry to modify loans to help up to 9 million borrowers avoid foreclosure. But the extent of the relief remains unclear, with questions lingering about how much the lending industry will cooperate in modifying loans.

After banks take over foreclosed homes, they usually put them up for sale at deep discounts. Nationwide, sales of foreclosures and other distressed properties made up about half of the market in the first quarter, the National Association of Realtors reported.

First-quarter home sales fell in all but six states — Nevada, California, Arizona, Florida, Virginia and Minnesota — where buyers have been able to grab foreclosed homes at discounts, the realtors group said Tuesday.

On a state-by-state basis, Nevada had one in every 68 households receive a foreclosure filing, down 18 percent from March but still the nation’s highest rate. In Florida, one in every 135 households received a filing in April. For California, the rate was one in every 138 households.

Rounding out the top 10 were Arizona, Idaho, Utah, Georgia, Illinois, Colorado and Ohio.

Among large cities, Las Vegas led the way with one in every 56 households receiving a filing. That was a slightly higher rate than the southwest Florida metro area of Cape Coral-Fort Myers, which saw one in 57 housing units receive a filing.

Cities in California took the next six spots: Merced, Modesto, Riverside-San Bernardino, Bakersfield, Vallejo-Fairfield and Stockton. The Florida cities of Miami and Orlando were ninth and 10th, respectively.

By Wire Report, Staff

NEW YORK – A bankruptcy judge on Monday postponed his decision on whether Chrysler LLC can start the process of transferring its assets to a new entity partnered with Italian automaker Fiat.

Judge Arthur Gonzalez delayed the issue until Tuesday afternoon because Chrysler did not file its motion until late Sunday and people with objections need more time to review the deal.

A group of Chrysler’s lenders have refused to wipe out most of Chrysler’s debt and go along with the government’s restructuring plan. A lawyer for some of the creditors, Tom Lauria, said they have not had time to review Chrysler’s 300-page filing.

Lauria also objected to a Chrysler motion to allow the automaker to pay taxes, and he indicated that he also would object to the payment of other costs and expenses. He said if the sale to Fiat fails to go through, any money spent would be taking away from what left for the lenders later.

“We’re opposing at this point everything that the debtor is doing that is premised on the assumption that value that would be preserved through the sale,” he said. “Because if we didn’t have the sale, none of these actions make sense.

“What we’re doing is spending money today that we’re going to have to fight to get back later.”

Lauria, whose group includes lenders such as OppenheimerFunds Inc. and Stairway Capital Management, also said that some of the holdout lenders have asked to remain anonymous for now, citing fears about their safety.

“People in the group have received death threats that they believe to be bona fide and contacts with the police have been made,” Lauria said.

Other issues set to be decided Monday include approval for Chrysler to start using $4.5 billion in government loans so it can keep operating under bankruptcy protection.

Chrysler, the nation’s third-largest car manufacturer, filed for bankruptcy protection Thursday. The company plans to emerge in 30 to 60 days as a leaner company, with Fiat Group SpA potentially becoming the majority owner.

The biggest obstacle to the plan appears to be Chrysler’s secured lenders who hold $6.9 billion of the company’s debt.

Four banks holding 70 percent of the debt agreed to a deal that would give the lenders 29 cents on the dollar. But a collection of hedge funds refused to budge, saying the deal was unfair because they deserve to recover more than other creditors like the United Auto Workers.

President Barack Obama on Thursday chastised the funds for seeking an “unjustified taxpayer-funded bailout” after Chrysler and his auto task force cleared the company’s other hurdles, including the Fiat deal and a cost-cutting pact that the UAW ratified last week.

By Bree Fowler, Vinnee Tong

PHOENIX — State researchers have a grim employment forecast for Arizona in the coming year, predicting the loss of 167,800 jobs.

Department of Commerce researchers said Thursday that’s a loss of 6.4 percent, with most of the losses coming in 2009 and only a small sliver in 2010.

The department said population growth across the state is slowing and the less rapid expansion in population has decreased anticipated demand for goods and services in many major industries.

The education and health services sector is the only major industry expected to have a job increase. But even that’s expected to be slow because of the current economic downturn.

The Arizona Department of Housing has opened its cyberdoors to Arizonans interested in buying foreclosed homes.

The Web site – www.yourwayhomeaz.com – details the programs the state, counties and cities have put together to get foreclosed homes off the market.

Arizona received $121 million as part of the federal Neighborhood Stabilization Plan. Together, Pima County and Tucson got about $13 million.

Down payment assistance will be available through the state in July, according to a news release from the Housing Department.

Information about city and county programs will also be posted on the Web site.

The Arizona Department of Commerce and Albiasa Solar of Spain will announce that a $1 billion solar-thermal power plant will be built near Kingman next year, generating enough power for 50,000 homes at once when it opens in 2013.

It’s the third large Arizona solar plant announced in less than 18 months, although one of the first two has been scrapped and the other won’t be running until 2011.

The Kingman plant will create 2,000 construction jobs and 100 permanent jobs, according to the Commerce Department.

“The arrival of Albiasa Corp. is yet another big step toward establishing Arizona as a leader in the sustainable-industries sector,” Gov. Jan Brewer said.

The Spanish company incorporated a U.S. subsidiary in August, officials said, and has been scouting the Southwest desert from offices in Phoenix and San Francisco.

Although Albiasa officials won’t disclose the exact location of the 1,400 acres where they have secured the rights to build the plant, they said they chose the Kingman area because it was one of the few places with transmission capability on power lines.

“With the power loads in the Southwest cities, there are not a whole lot of power lines to get the power over there,” said Jesse Tippett, managing director for Albiasa’s U.S. operations.

Tippett and Albiasa’s chief project engineer, Albert Fong, said they are negotiating with utilities in the region to purchase the power from the plant, which is a major factor in getting financing for large power projects.

They also said that they are looking to utilities, such as Arizona Public Service Co. or Pacific Gas and Electric in California, that might be willing to finance the power plant now that utilities qualify for the same federal incentives that only developers qualified for last year.

Albiasa is building a 50-megawatt plant in Spain, and plans to use the same technology in Arizona, Fong said.

One megawatt of power-generating capacity is enough for about 250 homes in Arizona at once while a power plant is running.

Solar-thermal power plants don’t use the common black panels to make electricity. Instead, they use mirrors to focus sunlight on liquid-filled tubes. They use the hot fluid to make steam and spin turbines, much like coal, natural-gas and nuclear plants operate, but without the need for fuel.

Albiasa officials said they planned to use molten salt to store heat from the plant so it can keep generating power after sunset.

That also is the plan for Solana Generating Station, a 280-megawatt solar-thermal plant planned for Gila Bend by Abengoa Solar Inc. of Spain.

APS announced that it would buy the energy from that power plant once it is running in 2011. Last year, officials said they were struggling to get financing for the project, but APS spokesman Steven Gotfried said Friday the plans were moving forward.

Another 250-megawatt solar-thermal plant announced in December 2007 by APS, Salt River Project, Tucson Electric Power Co. and several smaller utilities has been shelved because the power companies apparently couldn’t come to agreement on the project.

Five Arizona companies were named to Fortune Magazine’s Fortune 500 list, down one from the six that made the list last year, according to a report released Sunday on Fortune.com.

The former Allied Waste Management was dropped from the 2008 list after being purchased by the smaller Republic Services Inc. late last year.

Avnet Inc., an electronics parts distributor, moved up sharply from 163rd place in 2007 to 144th, leading Arizona’s companies on the list. Avnet nudged out mining company Freeport-McMoRan Copper & Gold, which fell in rank to 146.

Companies are ranked by revenues.

US Airways Group, pet products retailer PetSmart and technology solutions provider Insight Enterprises Inc. rounded out Arizona’s list. PetSmart and Insight made the list for the second year in a row.

Will Flower, a spokesman for Republic Services, said the company did not end up on the list because the merger occurred in December and was too late to be counted. Republic had not been big enough by itself to place on the Fortune 500 list.

However, Flower said the Phoenix-based Republic expects 2009 revenues of $8 billion to $9 billion, which would probably give the company a berth on the 2009 list of Fortune 500 members.

On the national list, Exxon Mobil, with revenues of $442 billion, took the No. 1 spot from Walmart, which placed second.

They were followed by Chevron, ConocoPhillips, General Electric, General Motors, Ford Motor Co., AT&T, Hewlett-Packard and Valero Energy Corp., the nation’s largest refiner.

The magazine, in an accompanying article to be published April 27, said companies on the 2008 list suffered the largest drop in profits over the past two years in the 55-year history of the list. Profits fell from a record $785 billion in 2006 to $98.9 billion last year, an 87 percent decrease.

Companies that lost the most in revenue included American International Group, Fannie Mae, Freddie Mac, General Motors, Citigroup, Merrill Lynch and ConocoPhillips.

Of the five Arizona members on the list, only Avnet reported a growth in profits in 2008. But that was for its fiscal year through June 30; the company reported a rapid slide in sales and profits in the last quarter of the 2008 calendar year.

Three of Arizona’s companies had large losses, according to the list: Freeport McMoRan, $11 billion; US Airways Group, $2.2 billion, and Insight, $152 million.

As the ranks of Arizona’s unemployed swell, state officials are falling further behind in processing the thousands of new claims for jobless benefits.

Arizona has added staff, and employees have worked nights and weekends, but a processing backlog persists.

“We know how important these benefits are to those unemployed,” said Liz Barker, an Arizona Department of Economic Security spokeswoman. “And while we’re not where we want to be, we are working very hard to process claims as quickly as we can.”

Last week alone, DES received 13,722 new claims for new and extended unemployment-insurance benefits, on top of 12,356 claims the week before, Barker said. As of the week ending April 11, a record 107,097 Arizonans were receiving unemployment insurance, compared with 28,000 in January 2008, a 283 percent increase.

The department almost doubled its staff to 232 last year and is hiring 95 more by July. Still, those filing for benefits frequently complain they can’t get answers about their claims because they can’t reach anyone at the office.

“While the new staff has helped us to be able to answer more phone calls and take more phone claims, we continue to struggle with timeliness,” Barker said. The slowness is causing hardship, according to Ellen Katz, an attorney for the William E. Morris Institute for Justice, a Phoenix group that represents low-income clients.

The institute filed a suit last month in U.S. District Court to speed up processing for four people, including one woman who had been waiting five months for benefits and a man who ended up in a homeless shelter after waiting unsuccessfully for 10 weeks.

The suit was dismissed Monday, after the four plaintiffs got their benefits, but could be refiled.

Federal regulations require each state to pay 87 percent of all first-time claimants within 14 days if there is no dispute, Katz said. That 14 days starts after a one-week waiting period.

She said state records show that in March only 65 percent of those claimants received their first checks and that it took almost six weeks to reach the 87 percent level.

———

New job search sites

We all know the granddaddy job-hunting Web sites like Monster (www.monster.com), CareerBuilder (www.careerbuilder.com) and Jobing.com.

Career expert Alison Doyle (http://alisondoyle.typepad.com) has her list of favorite newer job-search sites. Here are five:

• www.visualcv.com: Allows users to create a résumé that “comes alive with informational keyword pop-ups, video, pictures, and social networking.”

• www.linkup.com: Bills itself as a way into the “hidden” job market and promises only real jobs from real companies.

• www.realmatch.com: Matches applicants only with employers that appear to make a good fit.

• www.standoutjobs.com: An “interactive career site that leverages social media tools and principles, including video, blogging and widgets.”

• www.glassdoor.com: Allows users to find “real-time reviews, ratings and salary details about specific jobs for specific employers – all for free.”

MESA – The East Valley Tribune is dropping its Saturday print edition effective May 16, just four months after the one-time daily eliminated three other days of publication and began giving copies away for free.

The decision to eliminate Saturday editions, which will result in 13 layoffs, was the result of the ongoing sluggish economy, which has meant fewer automotive and real estate advertisements, Publisher Julie Moreno said Tuesday. Such ads traditionally have bolstered Saturdays.

Those laid off will mostly come from employees who work in production-related functions, Moreno said.

“At the onset, we knew that we needed to be willing to assess the strategy and make adjustments along the way,” Moreno said. “Now that we have some experience with our new model, we have begun the process of looking at what is working well, and what elements should be adjusted.”

The suburban Phoenix newspaper, owned by Freedom Communications Inc., will continue to publish print editions on Wednesdays, Fridays and Sundays for distribution in Mesa, Gilbert, Chandler and Queen Creek.

Dozens of newspapers around the country have been dropping one or more days of print publication as advertising revenue plummets because of the recession. The idea is to print newspapers on the days with the most advertising, preserving revenue while cutting newsprint, delivery and other costs.

In making the switch from seven to four days in January, the Tribune also went from a paid subscription to a free model and scaled back its delivery zone to four growing communities, dropping Scottsdale and Tempe.

Those changes resulted in a reduction of 40 percent of the newspaper’s staff, or about 140 workers.

Freedom Communications, based in Irvine, Calif., operates 33 daily and 77 weekly newspapers, including The Orange County (Calif.) Register and two Arizona dailies, The Sun in Yuma and the Daily News-Sun in Sun City.

Despite law that makes it harder to escape debts

RALEIGH, N.C. – The number of U.S. businesses and individuals declaring bankruptcy is rising amid the recession, despite a three-year-old federal law that made it much tougher for Americans to escape their debts, an Associated Press analysis found.

In March, bankruptcy filings jumped the highest across the West. In Arizona, filings rose 91 percent from a year ago. They were up 84 percent in Idaho, 82 percent in California and 79 percent in Nevada, though those were trumped by Delaware, home to many large corporations, which saw a 127 percent jump.

“There’s no end in sight,” said bankruptcy lawyer Bryan Elliott of Hickory, N.C., who is working seven days a week and scheduling prospective clients a month in advance. “To be doing this well and having this much business, it is depressing. It’s not a laugh-a-minute job.”

Nearly 1.2 million debtors filed for bankruptcy in the past 12 months, according to federal court records collected and analyzed by the AP. Last month, 130,831 sought bankruptcy protection – an increase of 46 percent over March 2008 and 81 percent over the same month in 2007.

In the Tucson sector, total bankruptcy filings in March were up 90 percent over the previous year, with 628 filings. The sector includes Pima County, as well as Cochise, Graham, Greenlee, Pinal and Santa Cruz counties.

The majority of those filings were Chapter 7, which is liquidation for individuals and small businesses. There were 510 Chapter 7 filings in March, a 108 percent increase over March 2008.

Reorganization filings, or Chapter 13s, were up 44 percent.

Bob Lawless, a professor at the University of Illinois College of Law, said bankruptcies could reach 1.5 million this year and level off at 1.6 million next year – around the same time economists expect an economic recovery to begin.

The bankruptcy rate is climbing as well. In the past 12 months, about 4 people or businesses for every 1,000 people in the country filed for bankruptcy, according to the AP analysis. That is twice the rate in 2006, and close to the average of about 5 for every 1,000 in the decade leading up to the change in the law.

Lawless said the shame of bankruptcy may have eased somewhat in recent years, but added, “It’s still a very stigmatizing, traumatic event for most everyone who files.”

———

BANKRUPTCIES

A look at bankruptcy filings by state and their growth in the past year.

Rank. State: March 2009 filings; March 2008 filings; Percent change

1. Delaware: 479; 211; 127%

2. Arizona: 2,700; 1,414; 91%

3. Idaho: 682; 371; 84%

4. California: 16,917; 9,308; 82%

5. Nevada: 2,510; 1,405; 79%

6. Utah: 1,396; 804; 74%

7. Hawaii: 270; 158; 71%

8. Montana: 268; 157; 71%

9. Washington: 2,910; 1,745; 67%

10. Florida: 8,322; 5,146; 62%

11. Oregon: 1,651; 1,033; 60%

12. Illinois: 7,011; 4,551; 54%

13. South Carolina: 902; 593; 52%

14. Maine: 365; 241; 51%

15. District of Columbia: 110; 73; 51%

16. Michigan: 7,238; 4,828; 50%

17. Wyoming: 122; 82; 49%

18. New Mexico: 554; 377; 47%

19. Alabama: 3,138; 2,141; 47%

20. New Jersey: 3,011; 2,066; 46%

21. Rhode Island: 501; 344; 46%

22. Colorado: 2,488; 1,712; 45%

23. New Hampshire: 473; 327; 45%

24. Virginia: 3,278; 2,304; 42%

25. Maryland: 2,237; 1,573; 42%

26. Connecticut: 971; 684; 42%

27. Indiana: 4,904; 3,468; 41%

28. Iowa: 1,078; 765; 41%

29. North Carolina: 2,498; 1,779; 40%

30. Minnesota: 1,958; 1,409; 39%

31. Kentucky: 2,538; 1,828; 39%

32. Wisconsin: 2,533; 1,829; 38%

33. Oklahoma: 1,309; 946; 38%

34. Missouri: 2,827; 2,056; 38%

35. Tennessee: 4,885; 3,564; 37%

36. Kansas: 1,057; 776; 36%

37. Ohio: 6,954; 5,120; 36%

38. New York: 5,235; 3,876; 35%

39. West Virginia: 647; 480; 35%

40. Mississippi: 1,341; 995; 35%

41. Arkansas: 1,509; 1,132; 33%

42. Vermont: 141; 106; 33%

43. South Dakota: 181; 139; 30%

44. Georgia: 6,370; 4,944; 29%

45. Pennsylvania: 3,557; 2,800; 27%

46. North Dakota: 136; 110; 24%

47. Nebraska: 703; 592; 19%

48. Massachusetts: 1,849; 1,571; 18%

49. Texas: 4,521; 4,067; 11%

50. Alaska: 67; 65; 3%

51. Louisiana: 1,529; 1,584; -3%

By Wire Report, Staff

CHARLESTON, W.Va. – The U.S. Postal Service said Thursday it plans to close three mail-processing centers and eliminate approximately 1,490 jobs in West Virginia, Indiana and Arizona.

The closures are the latest round of cuts to operations begun on a temporary basis in 1999, when the Postal Service opened 55 centers to process hand-addressed mail that couldn’t be read by optical scanners, spokeswoman Freda Sauter said. At the time, scanners read just 2 percent of handwritten addresses, compared with 95 percent today.

Centers in Charleston and Fort Wayne, Ind., are scheduled to close in October, while the Glendale operation will close in May 2010, Sauter said. Centers in Salt Lake City and Wichita, Kan., will remain open. The Charleston center employs 345 people, while 415 work in Fort Wayne and 728 in Glendale.

A Chattanooga, Tenn., center with 536 employees is due to close this month.

The centers employ a mix of temporary employees and career Postal Service workers, who will be given an opportunity to bid on other open jobs within the agency, Sauter said.

“We wanted to give them six months,” she said. “We’re going to offer a job fair with a list of the vacancies so they have an opportunity to bid for them.”

While the cuts are expected to save the financially strapped Postal Service approximately $4.9 million, they’re not directly tied to its financial woes.

“The Remote Encoding Centers were designed as a temporary solution to automate and expedite the processing of handwritten and poorly printed addresses,” manager Michael Thompson said in a statement. “The plan from the start was to phase out the REC operation as technology enhancements enabled us to automate more mail.”

The service is in the midst of broad cost-cutting efforts. It lost $2.8 billion last year and expects a larger loss this year due to the anemic economy.

Postmaster General John Potter told Congress recently that the service is considering cutting back deliveries to five days a week. It already is planning to offer early retirement to 150,000 workers, eliminating 1,400 management positions and closing six of 80 district offices.

The Charleston operation that’s being closed had benefited from an earlier consolidation. It took over processing mail from North Carolina and South Carolina when the Postal Service closed a Fayetteville, N.C., center in 2006.

———

ON THE WEB

Postal Service: www.usps.com

Our supposedly construction-addicted state is faring better than more diversified economies

Thousands of Tucsonans line up at a job fair at Tucson Convention Center in January. Arizona has been hit hard by the burst of the housing bubble, but the state's unemployment rate compares favorably to other states' rates.

One of the most firmly held beliefs about the Arizona economy is that it is too dependent on housing.

This goes beyond the indisputable point that housing is a big part of the Arizona economy. The assertion, almost universally accepted, is that housing drives the rest of the Arizona economy.

The housing sector in Arizona has certainly been hammered. The Case-Shiller Home Price Index tracks home values in 20 large metro areas. According to the index, home values in the Phoenix area peaked in June 2006. Since then, they have declined by 46 percent.

This is the largest decline of any metro area in the index, and nearly twice as much as the index average of 27 percent.

According to the Arizona State University department of Realty Studies, residential building permits in Arizona have declined 73 percent since the housing peak.

So, Arizona’s housing sector has suffered a sharper decline than probably anyplace else in the country. If the rest of Arizona’s economy is dependent on housing, then why does Arizona have a lower unemployment rate than the rest of the country?

January is the most recent month for which comparative figures are available from the Bureau of Labor Statistics. During January, the country had an unemployment rate of 7.6 percent. Arizona’s rate was 7.0 percent.

The paradox is even starker when looking at major metro areas. The Phoenix area’s jobless rate was 6.7 percent. Only one metro area in the Case-Shiller group had a lower unemployment rate: Washington D.C., which has an economy clearly driven by government. The average unemployment rate for the 20 major metro areas was 8.4 percent.

According to BLS, of the 49 metro areas in the country with a population in excess of 1 million, Phoenix had the seventh-lowest unemployment rate.

Phoenix has done much better than many metro areas alleged to be our economic betters. San Diego, the proclaimed bioscience leader, had an unemployment rate of 8.6 percent. Charlotte, in North Carolina that supposedly does right in education what Arizona does wrong, was at 10.5 percent. Portland, the antithesis of an economy driven by housing, was at 9.8 percent. Seattle, which has the big companies we supposedly can’t attract, was at 7.5 percent.

So, most large metro areas have unemployment rates substantially above the national average while Phoenix, whose housing sector has been hit the hardest, has an unemployment rate substantially below the national average.

What gives?

Arizona has suffered large job losses during the housing decline. Construction employment in Arizona also peaked in June, 2006. Since then, Arizona has lost 88,000 construction jobs, a decline of 36 percent from the peak. Nationally, construction jobs declined by 13 percent.

Construction represented two-thirds of all jobs lost in Arizona. Outside of construction, the job loss in Arizona was less than 2 percent.

It’s rather clear that a lot of Arizona’s residential construction work force was itinerant. And much of it also was illegal.

All of this unveils what should have been obvious all along. Housing does not create its own demand. Something else has to draw people to an area, which in turn creates the demand for housing.

Arizona has a fundamentally solid underlying economy that benefits from, but is not dependent on, housing. And it has a frothy real estate sector that depends on growth generated primarily by other factors.

The real estate sector is oversized. But that is inevitable in a place that is growing faster than other places. That’s not the same as the rest of the economy being dependent on housing.

These days, various advocates of various dubious schemes to “diversify” Arizona’s economy frequently assert that housing is to Phoenix what cars are to Detroit.

If that’s true, why does Detroit have an unemployment rate nearly twice as high as Phoenix’s?

HOUSING MYTH

The Associated Press

Robert Robb, an Arizona Republic columnist, writes about public policy and politics in Arizona. E-mail: robert.robb@arizonarepublic.com

LAKE HAVASU CITY – Stephanie Conn was sitting at home in Tucson when a friend called her telling her she was missing out on spring break in Lake Havasu.

The University of Arizona student had no problem rounding up friends to make the five-hour drive to the city where rap and hip hop music blasted from speakers, bikini-clad girls danced atop boats and seemingly everyone had a drink in their hand.

“I got up early and have just been partying,” said the 21-year-old Conn, holding a purple drink as she readied to hop on a boat and go cliff diving.

From March through mid-April, tens of thousands of college students head to Lake Havasu in western Arizona for spring break. Local officials say they’re benefiting this year from people like Conn who are making last-minute decisions to travel close to home and who are staying away from Mexico because of increased drug violence there.

Char Beltran, president and chief executive of the Lake Havasu City Convention and Visitors Bureau, said the negative publicity about Mexico has led many students to Lake Havasu, just miles from the California border.

Businesses have also been reaching out to college students within a 300-mile radius for months through online promotions, pamphlets and newspaper advertising.

Hotel and boat rental shop managers say business is booming after a slow start to the spring break season. “We’re not solid yet, but we’ll get there,” said Cal Sheehy, general manager at the London Bridge Resort. “We’re confident.”

Other destinations are seeing similarities.

At South Padre Island, Texas, students are booking their trips 60 days later than usual and travelers are opting to drive instead of fly, with gas prices at half of what they were last spring break, said Dan Quandt, executive director of the South Padre Island Convention and Visitors Bureau.

At Panama City Beach, Fla., businesses are offering promotions to students in an effort to lure them to the popular spring break spot, and students were shopping for the best deals more so this year than previous years, said Dan Rowe, president and chief executive of the Panama City Beach Convention and Visitors Bureau.

“Most of them, from what I’ve seen, are living for the moment,” he said.

Conn, from Berkeley, Calif., went to Mexico for spring break last year and planned it months in advance.

But after UA officials sent out warnings earlier this year about traveling to Mexico and her mom and aunt chimed in on what they said would be a dangerous trip, Conn said, “we’d be stupid to go, really.

“That’s why everyone’s here now,” she said.

Students at Lake Havasu spend much of the day last week on the beach tanning, drinking and dancing or lounging on boats on the lake, trying to attract members of the opposite sex. When the sun goes down, they head to the nightclubs.

Josh Plummer, 24, who graduated from Lake Havasu High School, sounds much like a spring break recruiter for the city.

“They come here for the fun, the entertainment, the sun, for the parties, for London Bridge,” he said. “It’s an all-around good time.”

FLAGSTAFF — A Flagstaff company that makes small wind turbines for homes, commercial buildings and even sailboats has laid off more than 10 percent of its staff because of the slowing economy.

Southwest Windpower laid off 14 workers at its Flagstaff manufacturing plant on Friday. Chief executive Frank Greco says lower-than-expected revenues over the last few months forced the company to make the move.

Greco says he had hoped an increase in the federal tax credit for renewable energy from $2,600 to $4,000 would boost sales of home-use wind turbines, but that hasn’t happened. With the credit, the cost of the company’s Skystream home unit is roughly $10,000.

The first quarter is the company’s slowest sales period, and Greco says the workers may be rehired if sales increase.

Framer Patrick Chischillie works at the construction site for the new Wild Horse Pass Hotel and Casino, opening Nov. 1.

The Valley’s newest casino, a $200 million facility under construction by the Gila River Indian Community off Interstate 10 west of Chandler and south of Ahwatukee, will open by Nov. 1, officials said recently. The skeleton of the 10-story, 242-room Wild Horse Pass Hotel and Casino can be seen for miles by cars approaching Ahwatukee and Chandler from I-10 or Loop 202.

The new Wild Horse Pass will replace a facility with the same name built in 1997 at 5550 W. Wild Horse Pass, just a short drive away.

It will have 1,002 slot machines, up from 875; 44 blackjack tables, up from 24; and 25 poker tables, up from 17, Wild Horse Pass general manager John Straus said.

Gila River Casino officials said the new hotel will not replace the 2002 Sheraton Wild Horse Pass Resort and Spa, which caters increasingly to convention and business travelers.

Instead, Wild Horse Pass officials say the new hotel will primarily go after customers who are there for casino games and other Vegas-style entertainment.

The hotel is being funding entirely by the Gila River Indian Community, which also will manage it, Straus said.

“My ultimate goal is to have 100 percent of the rooms ‘comped’ to players,” Straus said. “It’s all about giving back to our VIPs.”

It’s an understatement to say the economy is not the best for opening a business that depends entirely on consumers’ discretionary income.

Last quarter, Arizona casino earnings were down a collective 16 percent, the biggest quarterly drop since Arizona legalized tribal gaming in 1993.

But Gila River opened its new Lone Butte casino in Chandler during the economic gloom of late 2008.

Officials say Lone Butte, which caters to gamers who live nearby, is busy – even though customers are spending less than when they felt flush.

Officials have said the new Lone Butte and Wild Horse Pass are part of their community’s long-range plans, and they saw no reason to delay them.

Wild Horse Pass intends to compete with Harrah’s Ak-Chin Casino, a resort and casino with 1,089 slot machines in Maricopa that is part of the international Harrah’s Entertainment chain.

Many Harrah’s guests come from elsewhere in the country – or world – for free rooms, meals, gifts and gambling vouchers that are part of the perks of being members of the Harrah’s Total Rewards players club.

Harrah’s is tough competition, but Wild Horse Pass officials say they are up for the game.

“This will be as close to Vegas as you can get without leaving town,” said Arlene Alleman, Gila River Casino’s director of corporate marketing.

Along with more gaming, the new Wild Horse Pass will have a nightclub, 1,400-seat showroom and Arizona’s first Don Shula’s American Steakhouse, which has a theme based on the 1972 undefeated Miami Dolphins. Menus are to be painted on NFL footballs and signed by the legendary coach.

———

New Wild Horse Pass Hotel and Casino

Estimated opening date: Nov. 1.

CEO: Harold Baugus.

General manager: John Straus.

Cost: $200 million.

Casino square feet: 100,000.

Number of restaurants and bars: 9.

Number of slot machines: 1,002.

Number of blackjack tables: 44.

Number of poker tables: 25.

Hotel: 10 stories, 242 rooms and a parking garage.

Number of employees: 1,500, including members of Gila River Casinos’ corporate staff.

Location: Interstate 10 about 3 miles south of Ahwatukee, at Exit 162.

Web: wingilariver.com.

Source: Gila River Casinos