Tag Archives: Barry Broome

Barry Broome, GPEC - AZ Business Magazine January/February 2012

GPEC’s Barry Broome Outlines Plan To Attract More High-Paying Jobs

Roadmap for the future: GPEC President Barry Broome outlines plan to attract more high-paying jobs, keep the ones we have

The Greater Phoenix Economic Council ( GPEC ) is beginning 2012 with an updated roadmap, the first leg of a five-year strategic plan, says its CEO and President Barry Broome.

Along with its historical mission to attract high-quality, high-paying jobs to the Valley, Broome says 2012 will also see GPEC bolstering its retention and expansion efforts, particularly in the aerospace industry.

Broome took time recently to list four of this year’s goals in the strategic plan. Look for GPEC to:

1. Help the Arizona Commerce Authority get off the ground. The public-private entity was established last year to create jobs and investment in Arizona. Broome says GPEC is working to coordinate efforts, leverage each other’s strengths and avoid duplicating efforts.

2. Work more diligently on retention and expansion, particularly in the aerospace industry, which is facing potential cuts by Congress’ Joint Select Committee on Debt Reduction, otherwise known as the Supercommittee.

“We’re analyzing 800 aerospace companies as we speak,” Broome says. “We want to make sure we really understand the aerospace sector.”  Information gleaned from analyses will be used to help cities identify companies under threat of budget cuts and find ways to support them.

Using the analytical skills of GPEC’s research team and internalizing it to Arizona is a new undertaking, he says, one that will help everyone better understand the sectors that drive the Valley’s economy. Historically, researchers have — among other things — focused on understanding the California market and which companies there may be candidates for relocation.

3. Support with data and information solid economic development tools. GPEC will be “meticulously” going over Gov. Jan Brewer’s veto letter for Senate Bill 1041, which would have cut the rate at which a business’ property is assessed if it committed to constructing or expanding in Arizona. The bill was meant to complement the larger, business-friendly tax package passed earlier by the Legislature. Broome says if a policy effort emerges to resurrect some of those ideas, GPEC will support it with data and technical expertise.

4. Focus on science and technology. GPEC established an Innovation Council last summer whose mission is to better understand and cultivate opportunities in the high-tech sector, says GPEC board member Steve Shope, president of Sandia Research Corporation and a member of the council.

For more information about GPEC and CEO/President Barry Broome, visit gpec.org.

Arizona Business Magazine January/February 2012

 

Solar Companies - AZRE Magazine March/April 2011

The Fight To Lure Solar Companies To The Valley Is Fierce

The fight to lure solar energy companies to Arizona will be fierce in 2011, as states become more competitive in their efforts to land solar companies that are themselves battling for funding in a stagnant capital market.

“(This year) will be more competitive than 2010 because the states are feeling more pressure and the idea that we’ll emerge out of this recession soon is just falling out of people’s heads,” says Barry Broome, president of the Greater Phoenix Economic Council, a major player in the efforts to bring solar and renewable energy companies to the Valley.

At least 10 renewable energy companies have located or announced plans to locate in Arizona since the state Legislature passed a tax-incentive program in 2009, Broome says. The most notable players are Chinese giant Suntech Power Holdings Co., the leading solar manufacturer in the world, and Power-One, which makes solar and wind inverter products.

Their arrival not only burnishes Arizona’s reputation as a potential leader in the effort to harness renewable energy, but also creates a burgeoning supply chain for solar energy manufacturers.

For example, United Kingdom-based FAIST GreenTek plans to open its first U.S. plant, a 56,000 SF facility in Phoenix, to provide metal steel containers for Power-One’s inverter boxes. Additionally, Spanish glass manufacturer Rioglass located to Arizona to provide materials for Abengoa’s Solana plant near Gila Bend, which is expected to be the largest concentrating solar energy power plant in the world.

“The tentacles that are caused by these companies will grow long over time,” says Eran Mahrer, director of renewable energy for Arizona Public Service, which will purchase the electricity generated at the Gila Bend site.

GPEC currently is working to lure two solar companies to the Valley, Broome says, adding, “I’m not saying we won’t see 10 companies again, but it’s much tougher. The industry is maturing and the capital markets haven’t recovered.”

He believes the market will see a roll up, or a decline in smaller, newer companies and will settle on fewer, major players.

The impact of solar companies on the commercial real estate market is significant. Solar-related companies gave a shot in the arm to Arizona’s persistently high industrial vacancy rates, says Pete Wentis, an industrial broker with CB Richard Ellis.

The second quarter of 2010 saw positive absorption in the industrial sector for the first time in a year and a half, Wentis says. By 4Q 2010, the market saw 4.4 MSF of positive absorption, which lowered the industrial vacancy rate in Maricopa County from 16.1% to 14.7%. Wentis estimates that solar companies contributed between 15% to 20% to that absorption.

The 14.7% vacancy rate means there is 40 MSF of industrial space available.

It is difficult to say whether there is enough available inventory for solar-related companies, as they don’t all require the same type of industrial space, Wentis says, adding that industrial is the most diversified of all the tenant types of space.

Solar proponents agree that Arizona is just starting to establish itself as a leader in the solar industry, but more needs to be done.

“Are we doing a good job? Yes,” Broome says. “Are we doing a great job? No. Could we be doing better? Yes.”

Factors that helped draw solar companies here and drive the production of solar generation include state tax incentives, utility incentives to customers for rooftop photovoltaic systems, a federal grant program that has been extended for one more year, and state renewable energy standards that require utilities to generate 15% of their kilowatt-hours sold from renewable sources by 2025.

Finally, the total installed cost of photovoltaics has dropped 40% in three years due to several factors, including better production, innovation, and the emergence of China into the market, says Nancy LaPlaca, a policy advisor and spokesperson for Arizona Corporation Commission commissioner Paul Newman.

Stable and well-thought-out energy policies would help the industry, Broome says, adding that the state has taken a “herky jerky” approach to renewable energy. A federal energy standard also would bring stability to the market, he adds.

The state also should discuss ways to export green energy, LaPlaca says. Currently, Arizona exports 30% of its electricity to California, but that is “brown” energy derived from coal, natural gas and nuclear.

For more information about GPEC and its efforts to bring solar companies to the Valley, visit gpec.org.

AZRE Magazine March/April 2011

Arizona's venture capital market receives boost

Arizona’s Venture Capital Market Receives Boost

Venture capital is still out there, but startups remain starved for investors

Arizona’s venture capital market has received a welcome boost, but startups and early-stage businesses are still looking for financial angels. Experts in the field say a new wave of venture capital is vital if the state’s economy is to continue growing at the pace it has been in recent years. Because Arizona is an attractive place to do business, experts expect to see an increase in interest by venture capitalists, perhaps later this year. They also believe that the flagging national economy is not a factor.

Yet, a PricewaterhouseCoopers’ report shows slippage in 2007, when Arizona companies received $200.7 million in venture capital compared to $262.6 million in 2006. Providing some relief in 2008 is the recent formation of the Translational Accelerator LLC (TRAC), a private Arizona-based, $20 million bioscience venture capital group. TRAC plans to invest between $500,000 and $2 million in any one company devoted to developing diagnostics, services, prevention agents and treatments directed to cancer and central nervous system diseases, including Alzheimer’s and multiple sclerosis.

Barry Broome, president and CEO of the Greater Phoenix Economic Council, calls the TRAC fund “an example of the investors’ commitment in taking the needed risk to help drive Arizona’s economy.”

Broome says reports indicate that virtually all of Arizona’s recent venture capital funding is in late-stage activity, funding mergers and acquisitions of built-up companies.

“The key component is getting a venture-capital model more aggressively focused around seed and startups,” he says. “That’s where you’re going to get long-term economic benefits.”

Venture capital peaked in 1999-2000 with the telecommunications industry and Internet-based companies. But since the dot-com bust, venture capital has yet to recover.

“People took big losses on them,” Broome says, “and subsequently there was a cooling of venture capital.”

Terree Wasley, director of entrepreneurial services at Arizona State University, sees gradual improvement in the venture capital arena, with no huge moves forward or back.

“Things are on a slow but steady incline going forward,” she says. “But if we’re looking at some sort of downturn in the economy, I’m not sure what impact that might have.”

Wasley says ASU Technopolis, which hosted the Invest Southwest Capital Conference in December, and ASU entrepreneurial services strive to train entrepreneurs who are worthy of investments.

“Our mantra is: ‘Good ideas always find funding, even in tougher times,’ ” she says.

Arizona’s venture capitalists often partner with out-of-state firms.

“They’re looking for good deals,” Wasley says. “They hear about them from other investors. Arizona is turning out a lot of good local talent. Investors look for that.”

Investors also look to stay within their geographic area, which bodes well for Arizona’s potential to attract some of the many venture capitalists in California.

“It’s an advantage for Arizona,” Wasley says.

Dee Harris, senior managing director at Alare Capital Securities LLC, an investment banking firm, doesn’t blame the economy for a shortage of venture capital.

“The primary problem is that venture capital firms in Arizona are basically fully invested,” Harris says.

Being fully invested is a two-sided coin.

“It’s a good sign in that they were able to find some good investments,” Harris says. “But, presumably, it’s a bad sign, because until they raise their next fund — which could take months — they’re not going to be much of a player in Arizona.”

Most of the interest is in life sciences, which means venture capitalists are not investing in technology information and semiconductor companies, Harris says.

Bob Morrison, executive director of Desert Angels in Tucson, says angel investors are not necessarily swayed by the general economy. Angels typically invest their own money, unlike venture capitalists who manage the pooled money of others in a professionally-managed fund.

“It’s a fairly small percentage of their total net worth,” he says. “Generally speaking, it’s their mad money. Nobody puts their lifetime savings into very many of these ventures that can be so risky.”

He dismisses suggestions that venture capital is drying up.

“For ventures that are well conceived and have a reasonable prospect for success, there is ample money,” he says.

But angel investors are reluctant to invest in biotech, he says, because it often takes a long time to make money, especially if the project requires approval from the Food and Drug Administration.

What can the state do to improve the venture capital climate? Broome says Arizona could dedicate 1 percent of the state’s pension fund for early-stage investment, as other states have done.

“If well managed, the use of 1 percent, or even one-half of 1 percent, of the pension fund into a venture strategy would be a major source of capital,” he says.

Wasley says angel investment tax credits also could help.

“Anything that gives investors any kind of incentive to invest in Arizona versus someplace else would be welcome,” she says.

For more information visit the following websites,
asuresearch.asu.edu
gpec.org

International business - AZ Business Magazine April 2008

International Business Opportunities Increase In Arizona

Arizona leaders are pushing the state’s businesses to the international forefront

When principals from United Kingdom-based txtNation, a technology solutions provider, wanted to spread their global wings they turned to Arizona to set up a U.S. location. Similarly, when the German firm Ubidyne, a wireless technology developer, was looking to establish its first U.S. global footprint, it zeroed in on Scottsdale and SkySong, the Arizona State University Scottsdale Innovation Center, to make an imprint. Ditto for Sebit, a Turkish e-learning company. Somehow, the Grand Canyon State is on the international radar these days.

Obviously, Arizona’s expansive blue skies and mountain vistas are appealing to these international companies. But the strategy behind such international business in Arizona hasn’t occurred by accident — it has been clearly mapped out by statewide economic development officials keen on building Arizona’s economy far beyond tourism, real estate and retirement mainstays.

Today, Arizona is playing on the global business stage and it is not a bit part. In 2007, according to the U.S. Department of Commerce, Arizona exported $19.18 billion worth of goods to a collection of countries around the globe — up from $18.28 billion in 2006.

The bulk of Arizona’s exports came from the Valley. According to 2006 figures from the U.S. Census Bureau, the metro Phoenix area logged almost $11 billion in exports, placing it in the top 20 metro areas nationwide. Tucson exported more than $3.2 billion worth of goods in 2006.

Based on the 2006 figures, Arizona’s increase in exports outpaced that of Texas and California. In addition, Arizona’s per capita exports in 2006 were at $2,966, besting Utah, New Mexico and Colorado.

Along with increasing exports, economic leaders’ are also working to bring more international businesses and foreign direct investment to the state.

“We strive to put Arizona on the international map,” says Barry Broome, president and CEO of the Greater Phoenix Economic Council and one of a handful of statewide economic experts pushing for Arizona’s global business success, in large part with his role in an economic statewide partnership called the Arizona Global Network (AGN). “Arizona is emerging as an incubator for international firms expanding in the U.S.”

The AGN includes economic brainpower from Flagstaff to Tucson to Yuma and everywhere in between. All have partnered with the goal to put Arizona’s business on the international scene. This stepped-up spotlight can be attributed to a number of factors. But for txtNation Director Michael Whelan, the decision for his firm came down to the fact that Arizona is a state on the ascension in the international business community.

“TxtNation chose Greater Phoenix due to its location, being a West Coast city on the rise,” he says, adding there is a global sense that Arizona is becoming an international “entrepreneurial hotbed” and that it also played a role in the expansion process.

Northern and Southern Exposure

Of course, Arizona has long counted its brother and sister to the North and South — Mexico and Canada — as global business family partners. These efforts continue today.

Glenn Williamson has experienced success in the international business market. He’s founded, sold and run various enterprises, but today he’s gunning for Arizona to build successful partnerships and business relationships with Canada. Much like Canada’s wide-open lands, the opportunities are vast.

“Our primary goal is to push bilateral trade between Canada and Arizona to the $5 billion mark by the end of 2008,” says Williamson, founder and CEO of the Canada Arizona Business Council (CABC). “We are well on our way to achieving that goal.”
Canada is Arizona’s No. 2 global trading partner behind Mexico. In 2006, according to U.S. Department of Commerce numbers, Arizona exported more than $5.3 billion worth of goods to Mexico compared to just more than $1.8 billion to Canada.

Williamson says the CABC has several primary goals. First, besides significantly increasing the trade between the two countries, the CABC is seeking a direct flight between Montreal and Phoenix, while also upgrading the seasonal flights between various Canadian cities and Arizona. Then, there is fostering the huge impact of Canadian residents who are interested in, or already are, doing business in Arizona.

“Gov. Janet Napolitano gets international business, the tourism folks get it, Tucson gets it and the Arizona Department of Commerce gets it,” Williamson says. “Now, we have to convince everyone else.”

Williamson is quick to praise statewide efforts such as AGN and calls statewide leaders, including ASU President Michael Crow, key catalysts to pushing Arizona onto the international business stage.

“ASU is huge in these efforts,” he adds. “We need their brainpower to make this successful. Everything is pointing in the right direction, but we need to put the pedal to the metal.”

International EDU

Besides Crow’s intensity at ASU and the hotbed of activity at SkySong, which Julie Rosen, ASU’s assistant vice president for economic affairs, touts as an atmosphere of “unparalleled opportunity,” other educational institutions in Arizona are aiming for the international business beacon.
Consistently ranking in the top echelon of international business schools, the Thunderbird School of Global Management has operations in Latin America, Asia, Europe and Russia. The school has forged public sector partnerships like those with ASU to better compete in the international education arena. Over the past two years, Thunderbird has pioneered significant relations with ASU, especially ASU’s West campus and the School of Global Management and Leadership (SGML).

In addition, the Arizona Department of Commerce has foreign trade offices in London, Mexico and Japan, as well as investment offices in Ireland, Japan and Hong Kong.

“Broadly, business executives and community leaders recognize that attracting out-of-state and foreign direct investment and business, as well as increasing trade, should receive significantly more emphasis to secure Arizona’s growth and provide good, well-paying jobs,” notes Gary Waissi, dean of the ASU SGML. “There are several organizations with advanced initiatives working aggressively on these areas.”

ASU, GPEC, AGN and others are continually pushing for increased international business opportunities in Arizona. But, as Arizona Department of Commerce Director Jan Lesher points out, while exports and international business opportunities continue to increase in the state, there is a baseline that needs to be established before Arizona can truly “go global” now and into the future.

“Arizona companies need to establish first a solid domestic market, and then consider expanding to national markets,” she says. “International customers can be ideal for Arizona-based businesses; however, this is a decision that needs to be done carefully — international means a company must have the resources, market know-how and commitment to stick with it.”

It’s a point not lost on those who, like Lesher, are continually working to cultivate these relationships.

“It is all about recognizing that in today’s world, business is truly global,” Waissi says. “And at the same time knowing there is a need to strategically diversify in select industries.

For more information visit the following websites:

azcommerce.com
gpec.org
commerce.gov

D'BacksBrass

Cover Story – The Business of Sports

The Business of Sports

The economic reach of the Valley’s pro sports teams extends beyond the games

By Tom Gibbons

 

It’s a little past noon on a football Sunday, and there’s a wait at Jimmy Buffett’s Margaritaville restaurant in the Westgate City Center in Glendale, giving a visitor a few minutes to check out the seaside décor. Painted on the ceiling is a huge, fanciful nautical map that shows Los Angeles as an island, most of southern California under water and the shores of the Pacific lapping up against Glendale. Glendale would not be on the map, of course, if the eatery wasn’t located there.
And it’s likely there would be no map and no Margaritaville in Glendale if it weren’t for a couple of neighbors — the homes of the National Hockey League Phoenix Coyotes and the National Football League Arizona Cardinals.

business_sports

The presence of the pro sports franchises has allowed specialty retail and an entertainment district to pop up in what six years ago were dusty fields by the Loop 101 freeway.
The Phoenix area is home to four major professional sports teams, one of 13 markets with all four. In addition, the Valley is one of just two markets in which no major teams share a venue. All four sports buildings have been built since 1992, with taxpayers footing most of the bill to the tune of more than $700 million.

The Valley of the Sun’s sports building boom mirrors a national trend that began in the early 1990s. Over the years, the projects here and around the country have come under increasing criticism. The costs are easy to tally, but what of the benefits to anyone besides the private businessmen who own the teams and the millionaire athletes they employ?

“That’s the price of admission,’’ says Barry Broome, president and CEO of the Greater Phoenix Economic Council. “Without pro sports, you’re not a top tier city.’’

Ray Artigue, executive director of the MBA Sports Business program at Arizona State University’s W. P. Carey School of Business, believes the benefits to the state and local economy are numerous, such as exposure for the area, branding and the tourist dollars that are brought in by pro sports. One of the strongest examples of pro sports’ economic impact is the Westgate City Center.

“Would something like that exist in Glendale without the sports teams?’’ Artigue asks. “I don’t think it would.”

To be sure, some development would have surfaced anyway in Glendale; after all, it’s flat land with freeway access. In the fall of 2000, when the final leg to Loop 101 was completed on the city’s West Side, Glendale was determined to get the right kind of development, something other than residential or generic big box stores.

Enter Steve Ellman, a developer who owned a money-losing hockey franchise and was trying to build an arena and entertainment venue. Ellman had been fighting with city leaders in Scottsdale to OK a deal to front him money that would be recaptured through sales tax in order to build his arena on the site of a defunct shopping mall. Ellman had twice won voter approval for his project, but it was obvious the Scottsdale City Council was going to make him go through a third election.

Ellman, chairman and CEO of the Ellman Companies, approached Glendale and worked out a deal in which the city committed $180 million for the arena and Ellman promised to build a retail, entertainment and residential district — Westgate City Center.

“There was substantial risk,’’ says Glendale Mayor Elaine Scruggs.

The hockey arena and the planned entertainment district paid off quickly, making Glendale a player in the race to land the site for the Cardinals’ new stadium.

“We could have bid before, but we didn’t have the amenities they were looking for,’’ Scruggs says.

Glendale won out. Jobing.com Arena and the University of Phoenix Stadium made Westgate more attractive to other businesses, such as outdoor equipment giant Cabela’s and Margaritaville, which is one of only six Margaritavilles in the country.

“This is a one of kind. There probably won’t be another one in Arizona,” Scruggs says, adding that businesses such as Margaritaville help make Glendale a destination.

“We’re very proud to have been the first team out here and an anchor for all the development that followed,’’ says Jeff Holbrook, the Coyotes executive vice president and chief communications officer.

Retired chairman and CEO of Swift Transportation, Jerry Moyes, is now the principal owner of the Coyotes and was a key investor when the team decided to set up shop in Glendale. He is also a longtime West Valley resident.

The Cardinals are taking a page out of the Coyotes’ development play book. The Bidwill family, which owns the Cardinals, has a development project in the works called cbd 101, which is on 77 acres just south of the University of Phoenix Stadium. The plans include a 35-story tower with residential, office and hotel space.

“This would be a signature feature for Glendale,’’ says Michael Bidwill, president of the Cardinals (see full story on p. 10).

The National Basketball Association’s Phoenix Suns with US Airways, and Major League Baseball’s Diamondbacks with Chase Field, have a similar effect on Downtown Phoenix, slowly transforming the area from a ghost town after 5 p.m. into a 24/7 hot spot that city leaders envisioned.

The Diamondbacks play 81 games a season downtown and the Suns play 41, plus playoffs.

“There are also the Mercury and the Rattlers,’’ ASU’s Artigue says, referring to the women’s pro basketball team and the Arena Football League franchise.

Pro sports events also provide a place for deals to get done.

“The Suns have pretty much become a must-go place for business deals,’’ Broome says.

The Suns have the AOT club for anyone who buys a floor-level seat. The 510 floor-level seats are all sold out at prices ranging from $400 to $1,700 a seat.

Suns President and Chief Operating Officer Rick Welts says the fans often wanted to meet other floor-level ticket-holders and discuss business. The AOT Club was created to give them a chance to meet and greet before and after the game.

“We have created the best business-to-business social network in the Valley, without question,’’ Welts says. “That’s the single most frequent comment I get from those people.”

The pro teams also bring in tourist dollars.

The Diamondbacks, for instance, drew 16 percent of their parties from outside of Maricopa County, according to a 2001 Maricopa County Stadium Commission study.

Then there’s the mega event of all — the Super Bowl.

“You’re looking at $400 million to $500 million in economic impact from one week,’’ Artigue says. “Of course, that’s an extreme example.”

And the teams give back to the community. The Diamondbacks, for example, gave $3 million through their foundation.

The teams are privately held and do not release financial information; however, it’s generally believed the Coyotes have been consistently unprofitable. With the smallest venue, the team also has the smallest attendance of the major Arizona pro teams, but its following is a devoted one. For many transplants from colder climates, a Coyotes game is a taste of home.

“Hockey is a game that sort of becomes ingrained in you,’’ says Holbrook, who came here from Buffalo, N.Y. “Hockey has really loyal fans.”

The Suns have been break-even or profitable. The Cardinals were believed profitable except for their last few years playing in Sun Devil Stadium in Tempe, when they drew around half the league average.

Arizona Business Magazine March 2008The Diamondbacks, who were brought to Phoenix by the Suns’ legendary former owner Jerry Colangelo, were winners on the field in their early years, taking the 2001 World Series, but they ran up massive finasncial losses. In 2004, after a series of clashes with the Diamondbacks’ four majority owners, Colangelo was ousted from the CEO chair. Under current managing general partner Ken Kendrick and general partner and CEO Jeff Moorad, the Diamondbacks have been profitable for the past three years, the executives say. Last year, the Diamondbacks were winners on the field as well. They led the National League in victories with 90 and went to the league championship series.

Moorad stressed that the team’s ownership sees running the baseball team as sort of a stewardship.

“Ownership hasn’t taken a penny out of this team,’’ he says, prompting Kendrick to add with a laugh, “Of course, for the first seven years, there wasn’t anything to take.’’

 

AZ Business Magazine March 2008 | Next: The Ground Game