Arizona Democratic Party Chairman Jim Pederson’s future professional and political interests nicely intersected in the 1970 Senate campaign of real estate developer Sam Grossman (D).

Grossman challenged freshman Sen. Paul Fannin (R-Ariz.) that year, losing by 12 points after residency questions evaporated his early lead. [IMGCAP(1)]

Pederson, a staffer on that campaign, joined Grossman’s shopping center development business following the defeat.

Thirty-four years later, Pederson is one of the most successful shopping center developers in Arizona and has used his personal wealth to rebuild the state party since taking it over in 2001.

Pederson has given better than $4 million to the party in that time, most of which went to elect Gov. Janet Napolitano (D) in a 2002 open-seat race.

That free spending has rubbed many Republicans the wrong way, including state GOP chairman Bob Fannin — the son of the former Senator.

“He virtually bought the governor’s office and virtually bought the state chairmanship,” Fannin said.

He also dismissed Pederson’s political acumen, calling him a “real estate developer who has had some luck in his efforts.”

Regardless of his methods, Pederson has done much to revitalize a Democratic Party that he described as “dead” before he took over.

“The situation was ripe in Arizona because people were ready for a change,” explained Pederson. “It is not the hard-right, Barry Goldwater state that people thought it was.”

In his first full cycle as party chairman, Pederson saw Napolitano as well as state Attorney General Terry Goddard and 7th district Rep. Raúl Grijalva win open-seat elections.

Those victories “satisfied my wildest expectations,” according to Pederson.

Seeking a repeat performance, Pederson has established the goals of helping Massachusetts Sen. John Kerry win the state on the presidential level, cutting into Republicans’ margins in the state Legislature, and winning back the 1st district House seat for Democrats in 2004.

Arizona is one of the 18 or so states being targeted by the campaigns of Kerry and President Bush.

In 2000, Bush beat then-Vice President Al Gore by 5 points but then-President Bill Clinton (D) carried the state by 3 points in 1996.

Republicans currently hold a four-seat majority in the state Senate and a more formidable 18-seat majority in the state House.

In the Congressional race, Pederson — along with Napolitano — did yeoman’s work in clearing the field for former Flagstaff Mayor Paul Babbitt (D) as he prepares to take on freshman Rep. Rick Renzi (R).

Renzi won the newly created seat in 2002 after a late Democratic primary produced a damaged nominee.

Faced with the prospect of a similar scenario in 2004, state and national Democrats made it clear that Babbitt was their preferred choice.

Along with short-term victories at the ballot box, Pederson has also sunk significant resources into the state party apparatus in hopes of achieving sustainable long-term success.

Prior to Pederson’s arrival, the state Democratic party did not even have a voter file; for the past two years it has employed a full-time voter file administrator.

As a result, Democrats have vastly improved their turnout operation.

In 1998, Republicans had a 13 percent turnout advantage over Democrats among registered voters. Four years later that margin narrowed to 6 points, according to state party Communications Director Sarah Rosen.

“He has professionalized the party,” said Rosen. “We get paid pretty well and he wants a level of permanence on the party staff.”

Pederson has also turned Arizona into a destination for national Democrats.

In March, the Democratic Governors Association held its Spring Policy Conference in Phoenix; two months later the Democratic Leadership Council held a “National Conversation” in the same town.

Those two events were followed by a May 27 fundraiser featuring New York Sen. Hillary Rodham Clinton (D) that drew 1,500 people and raised more than $850,000 for the state party.

“There were never events like this before Jim came on board,” Rosen said.

The newfound excitement and organization seems likely to benefit Pederson when he decides to enter the political arena in his own right.

He said that to this point he has chosen to build the state party because “I don’t think I could have gotten that kind of thrill by just running for the U.S. Senate or U.S. House.”

Pederson will be termed out as state party chairman at the end of this cycle, however, and most Democrats and Republicans expect him to take on Sen. Jon Kyl (R) in 2006.

“Do I have an interest in challenging Senator Kyl? Somewhat,” said Pederson. “Do I spend 24 hours a day thinking about it? No.”

Fannin was quick to pooh-pooh the idea of a Pederson Senate run.

“He has no experience that qualifies him to run for the U.S. Senate,” Fannin said.

The Republican chairman did seem resigned to an eventual Pederson political bid, however.

“When he started spending all that money I thought there must be something he wants more than good government,” Fannin said.