Tag Archives: Tucson Regional Economic Opportunities

economic development - 8 honored

APAC Customer Services’ expansion to create 1,100 jobs

APAC Customer Services, Inc., a leader in global customer care outsourcing solutions, in partnership with the Arizona Commerce Authority (ACA) and Tucson Regional Economic Opportunities, Inc. (TREO), announced Monday an expansion in Phoenix and Tucson that is expected to bring more than 1,100 jobs to Arizona’s Sun Corridor over the next three years.

Jack Jones, Chief Operating Office of Expert Global Solutions, Inc., APAC’s parent company, stated, “Having lived in the state of Arizona for a number of years, I am a big fan of the ‘Sun Corridor.’ Access to qualified and experienced customer service personnel, top educational institutions and great weather make the state an ideal place for us to grow.”

City of Tucson Mayor Jonathan Rothschild echoed Jones’ sentiments and recognized APAC’s long history and significant presence, “APAC has been a major employer in Southern Arizona for many years, currently employing nearly 2,000 of our citizens. We know every business has a choice of where to operate and the City of Tucson continues to make this a business-friendly climate for its existing employers to expand.”

“This is a positive step for Phoenix, Tucson and the entire Sun Corridor,” Phoenix Mayor Greg Stanton said. “For our economy to grow, we must continue to work together as a region and as a state.”

During the first year, the partnership is expected to generate over 300 new jobs in Tucson – split between APAC’s two sites in the city – and an additional 135 jobs to its site in north Phoenix. Throughout the next two years, the state is expected to benefit from 669 additional jobs (382 in Tucson and 287 in Phoenix), bringing the overall three-year job creation total to over 1,100 jobs for Arizona.

“APAC is the global leader in its industry serving top brands around the world, and we thank the company for its continued commitment to Arizona as it undertakes its next phase of growth,” said Sandra Watson, President and CEO, Arizona Commerce Authority. “APAC’s investment and expansion in Phoenix and Tucson will create hundreds of professional services jobs for Arizonans across our state.”

Commenting on the growth, Joe Snell, President and CEO, TREO, stated, “State leaders, local officials and economic development partners joined together to deliver an important win for the economic recovery: nearly 700 new jobs here in Southern Arizona.”

“We’re pleased that APAC’s existing presence in the Sun Corridor mega-region continues to grow,” said Sharon Bronson, Chair, Pima County Board of Supervisors. “Tucson’s high-quality, bilingual workforce is a key competitive advantage in today’s global economy.”

APAC delivers tailored solutions to leading companies in many industries, including communications, education, financial services, government, healthcare, insurance, retail, technology, transportation and logistics, travel and hospitality and utilities. Headquartered in Illinois, APAC currently operates at the following locations in Arizona:

·       Tucson East: 1650 S. Research Loop, Tucson, AZ  85710
·       Tucson West: 2929 E. Corona Road, Tucson, AZ  85756
·       Phoenix: 20401 N. 29th Avenue, Phoenix, AZ  85027

In terms of the jobs that are coming to the state, Jones commented, “We’re excited about the opportunities we’re bringing to local communities. For us, it’s not simply about jobs. It’s about providing a chance for people to build a rewarding career and make a difference within our company.”

The new jobs created by this expansion are full-time positions that will work to support major clients. The positions will include both call center, leadership and support roles.

Michael Crow (current)

TREO Luncheon features university presidents

Tucson Regional Economic Opportunities, Inc. (TREO) will feature state university presidents, Dr. Ann Weaver Hart, of the University of Arizona and Dr. Michael M. Crow, of Arizona State University, at its 8th Annual Luncheon on Wednesday, September 25th at the Westin La Paloma Resort in Tucson.

Strong economies are defined by well-paying jobs, held by individuals possessing knowledge and skills that are in demand. Post-secondary education most often provides these skill sets. While US citizens have traditionally been among the best-educated in the world, the nation now ranks 12th in the number of 25- to 34-year olds with college degrees. Businesses often cite the difficulty of finding qualified workers as a barrier to growth. Talent is always the number one factor in site selection decisions.

What is being done in the Sun Corridor to address talent development? Join TREO for a higher education update and a frank discussion on educating the next generation for jobs of today and the future.

When: Wednesday, September 25, 2013
Where: Westin La Paloma Resort, 3800 East Sunrise Drive, Tucson, AZ
Time: 11:30 a.m. – 1:30 p.m. – Luncheon and Presentation
Registration: http://conta.cc/12e195U

 

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Phoenix ranked Top 10 for foreign direct investment

Greater Phoenix was named one of fDi Magazine’s top 10 “American Cities of the Future” for foreign direct investment (FDI) strategy in 2013/14. Greater Phoenix ranked sixth among overall North and South American cities, and second in the United States behind Chicago.

“One of GPEC’s primary objectives has always been an international presence and strong performance in foreign direct investment. The fact that we were ranked second to Chicago – a true world leader in FDI – speaks volumes about our success and how far we’ve come in a relatively short period of time,” said Barry Broome, GPEC President and CEO. “While Chicago is one of America’s most illustrious cities, Greater Phoenix is still developing its brand, giving everyone living and doing business here an incredible opportunity to be a part of its legacy. There’s no question in my mind that being a top international city for business will be one of our marquee features.”

The rankings are part of fDi Magazine’s “Locations of the Future” series, which are designed to identify the most promising destinations around the world for future inward investment. Each world region is assessed over two years.

The Greater Phoenix region has seen particular success this year with the launch of an international toolkit and forum series targeting international business executives. Called “Doing Business in Greater Phoenix, U.S.A,” the toolkit is a compilation of how-to advice ranging from human resources issues, immigration law, investment parameters, taxes, import/export laws and banking.

In addition, GPEC also partnered with the Arizona Commerce Authority, Arizona State University, Green Card Fund and Tucson Regional Economic Opportunities, Inc. to form the China-Arizona Alliance, which seeks to establish extensive contacts within the government and Chinese business communities and to promote Arizona as a destination for Chinese investment.

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Tucson Market Update: Q&A with Joe Snell

Q&A with Tucson Regional Economic Opportunities President & CEO Joe Snell

Screen Shot 2013-07-19 at 12.31.25 PMQ: TREO recently launched a new economic development strategy focused on strengths of diagnostics in Southern Arizona. How important are biomedical sciences to economic development?

A: Our bioscience assets, particularly in the field of diagnostics, are world class. It’s no secret that the size of the bioscience industry and its projected growth represent a massive opportunity, so positioning our region to benefit from the industry is very important. We identified bioscience as a targeted industry as part of our original Economic Blueprint, and we’ve stayed focused on building the cluster and refining our focus. We’ve worked very hard to help our large companies like Ventana Medical Systems, now a member of the Roche Group, and smaller companies like the newly-relocated Accelerate Diagnostics secure the talent and facilities they need to continue to prosper here. The presence of a top research university is a very strong asset.  The economic impact is just beginning.
 
Q: The commercial real estate industry in the Valley is making a nice recovery from the recession. How have Tucson and Southern Arizona fared?

A: We’re seeing similar results. The general trends are certainly up and we’ve had two consecutive quarters of strong commercial leasing activity. Companies we’re working with are expressing a strong preference to lease rather than build and lease pricing is generally still attractive, but our supply of prime space is tightening.

Q: How is TREO doing in its mission of creating new businesses, expanding of existing businesses and attracting companies that offer high wage jobs?

A: Last year was very strong — more than 2,200 new jobs — and we’ve had one of our best years this year so far with more than 2,400 jobs announced. Our project pipeline has been very active across a very wide spectrum of industries and we’re excited about a number of working projects that are nearing fruition.
 
Q: The landscape of Downtown Tucson seems to have changed the past 5 years. What are some of the projects you’re excited about?

A: The building boom downtown has been great to watch, and there is tremendous entrepreneurial energy focused downtown right now. The urban feel and increased density, coupled with the mobility provided by the upcoming modern streetcar completion, has attracted a number of new restaurants, new retailers, small business incubation and co-working spaces. I’m excited to see the broad spectrum of the environment — new small and large business, public and private investment — accelerating development.

Q: What challenge or challenges does TREO face now? What will those challenges be in 5 years? In 10 years?

A: Tucson’s economy is very strong in the aerospace & defense sector. With sequestration effects looming, there will be challenges in adapting that industry to new marketplace realities. However, we are the best positioned to meet that challenge for a few reasons. First, our A&D sector has deep experience in commercial aviation, a market expected to grow substantially in future years. We also have a tremendous opportunity to capture the UAV business in coalition with our other state partners.

As president and CEO of TREO, Joe Snell brings 24 years of experience leading regional economic development organizations to an agency focused on the coordination of all economic development activities in Southern Arizona. He has led successful economic development organizations in communities of various sizes. His knowledge on building strategic, competitive and balanced economic development efforts has resulted in national recognition for his leadership role in creating strong economies in high growth communities. In his previous position he was president of the Metro Denver Network. Snell holds a bachelors degree from the University of Nebraska.

Arizona Commerce Authority, AZRE Magazine November/December 2011

Arizona Commerce Authority Celebrates Its 1st Anniversary

With the Arizona Commerce Authority celebrating its 1st year, jobs remain the focus as the state’s CRE industry reaps the benefits.

Arizona Commerce Authority, AZRE Magazine November/December 2011In August, Tempe-based First Solar purchased 635 acres in Pinal County for $9.8M and announced plans to build a generating station on the property.

The rapidly expanding, clean-energy company is still constructing its solar module manufacturing plant in Mesa, expected to be up and running by mid-2012 with as many as 600 new, high-paying jobs.

The company also is building generating stations in Gila Bend and Yuma. In January, Power-One opened its first North American manufacturing facility in Phoenix. The California-based company, which makes inverters to convert renewable energy to usable energy, said it will employ as many as 350 people at build-out.

At Power-One’s grand opening ceremonies, Gov. Jan Brewer credited  the Arizona Commerce Authority for the big win and for wielding CEO clout and corporate incentives in making Arizona a hot spot for solar companies looking to expand or relocate.

“I have been consistently focused on ensuring Arizona is a magnet for business relocation, capital investment and a catalyst for the creation of new business and new jobs. And, with the work of my Arizona Commerce Authority, we’re seeing tremendous results in the solar space,” Brewer said at the time.

A year after the Arizona Department of Commerce, a government agency, morphed into the Arizona Commerce Authority, a public-private partnership led by a board of directors filled with many of the state’s top business leaders, six solar companies boasting a combined 1,700 new jobs have announced plans to expand or move to Arizona, says Bennett Curry, who has been piloting the organization’s business attraction efforts since it launched.

Besides growth in the renewable energy sector, diverse companies are finding Arizona attractive. They include:

  • Amazon, which recently announced plans to add another 1.2 MSF of warehousing space and 200 jobs to its existing Arizona enterprises;
  • Able Engineering, which hopes to expand into new manufacturing facilities in Mesa, eventually more than doubling its 230-employee roster within a few years of the expansion;
  • Ventana Medical Systems, which is expanding and adding another 500 jobs in Oro Valley.

Best is yet to come

Arizona Commerce Authority, AZRE Magazine November/December 2011Arizona Commerce Authority counts new jobs, not the square footage to house them, so it’s difficult to estimate the new office, manufacturing and warehousing space represented by the business growth, Curry says.

But while Arizona Commerce Authority’s mission is to generate jobs, Arizona’s commercial real estate industry is a big beneficiary of the growth, adds Mike Haenel, executive vice president Industrial Division at Cassidy Turley/BRE Commercial.

“Job growth creates absorption, construction and new development opportunities for the state’s commercial real estate industry,” Haenel said.

Arizona Commerce Authority has assisted companies such as Amazon, First Solar, Suntech and others with expansions and relocations, he says, but possibly even more important is the organization’s impact convincing local legislators and other Arizonans about the importance of proffering tax breaks and other enticements to snag coveted business.

He credits the prestige of the corporate leaders backing the group with influencing passage of the Arizona competitiveness package. And their combined weightiness as enticing to national business leaders looking for relocation options.

“Even though the Arizona Commerce Authority has only been in existence for one year, and the fact that we are in a slow recovery cycle, the Arizona Commerce Authority has  been instrumental in educating the business community and those businesses looking to relocate that Arizona has the incentives available for quality job growth,” Haenel says. “We’re still in a tough economy and having Arizona Commerce Authority can only help the state with job attraction.”

Sundt Construction chairman Doug Pruitt, an Arizona Commerce Authority board member, says the organization has logged some early successes.“Working with Arizona Commerce Authority partners, there has been a
massive reduction in vacant space,” he says.  But Pruitt says the biggest bang-for-the-buck is still to come as the organization spent much of its first year laying groundwork.

“Arizona Commerce Authority’s active projects are up 38 percent over a year ago,” Pruitt says. “One of our short-term plans includes aggressive recruitment of California-based firms within our targeted business sectors.”And the vision doesn’t stop at the Pacific Ocean. “Not only are we working to promote the state nationwide, we are taking the message that Arizona is the best place to do business to a global audience,” he says.

DMB Associates chairman Drew Brown, also an Arizona Commerce Authority board member, says each successful recruitment breeds more business. And as the expansions and relocations pile up, a boom in the state’s commercial real estate industry will be a welcome by-product.

“I think Arizona Commerce Authority’s function of attracting high-quality export jobs will be a big shot in the arm for the local economy,” he says. “The multiplier effect will encourage other new jobs.”

As more businesses come to the state, they will fill up vacant residential and commercial real estate, generating demand for new construction and development and the new jobs associated with that. “It’s out there. It will happen,” he says.

Building lasting relationships

Arizona Commerce Authority, AZRE Magazine November/December 2011Brown, like other Arizona Commerce Authority leaders, says the organization can’t take most of the credit for attracting the impressive influx of new business during its first year.

Arizona Commerce Authority has been forging important strategic relationships with key economic development groups such as Greater Phoenix Economic Council (GPEC) and Tucson Regional Economic Opportunities (TREO) to marshal joint clout, Brown says.

“We are working with the Arizona Commerce Authority on several active projects,” says Laura Shaw, TREO’s senior vice president for Marketing and Communications. “While the authority is still very new and thus getting its legs, so to speak, we have formed a close partnership and have many opportunities moving forward.”

And the Arizona Commerce Authority’s Curry says the new competitiveness package passed early this year opened a lot of doors for Arizona Commerce Authority to pitch the state’s wares.

“Before our toolbox didn’t have a lot of tools,” Curry says. “Now Arizona is ranked high among Western states.”

During a recent trade conference in San Francisco with international companies looking for a U.S. presence, the organization landed 19 meetings with interested prospects, and three are actively pursuing a possible Arizona relocation, he says.

Pruitt adds the Arizona Commerce Authority still faces hurdles — the uncertain global economy and Arizona’s somewhat tarnished reputation regarding school funding, immigration, gun laws and other issues. But he is optimistic.

“Some 300,000 of our residents have lost jobs since the recession began,” Pruitt says. “We realize that people are counting on us to do our job. The Arizona Commerce Authority takes this duty seriously and is focused on a single task — getting businesses to invest in Arizona to create jobs.”

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AZRE Magazine November/December 2011

Solar Zone Activation, Joe Snell

TREO Leader Advocates For A More Diversified Economy In Tucson, Across The State

Time For ChangeJoe Snell, president and CEO of Tucson Regional Economic Opportunities
Q&A with Joe Snell, president and CEO of Tucson Regional Economic Opportunities

Like the Valley, Tucson and Southern Arizona were hit hard by the recession. Joe Snell, president and CEO of Tucson Regional Economic Opportunities (TREO), talked to Arizona Business Magazine about the recovery and challenges still facing Tucson and the rest of the state.

How did Tucson and Southern Arizona fare during the recession?

Since December 2007, Arizona has lost nearly 300,000 jobs and in Southern Arizona about 30,000 jobs. Due to extreme state-level budget deficits, many of the assets and tools that allowed Arizona to compete have been cut drastically or eliminated. Arizona is facing a slow recovery from the worst recession in 70 years and lawmakers are faced with the urgent and challenging task of restoring jobs and creating an environment where we can compete and win.

Arizona is not alone in addressing recovery from the recession — other competitor states face the same challenges. However, our competitor states like New Mexico, Colorado, Texas and Utah have advantages we do not:

  • Lower unemployment
  • Greater investments in education and innovation
  • Better business tax climates
  • Better economic development tools
  • Smaller deficits

Roche/Ventana Medical Systems created 500 jobsFortunately, Arizona has a history of adapting and overcoming challenges. This year represents one of those times in history where we must use our collective strengths and advance Arizona. The recently passed Competitiveness Package is a good start.

In this recovery phase, what are some of the bright spots you are seeing?

Many of TREO’s targeted industries in which we have strengths to compete for business development have held their own during the recession: biosciences, aerospace and defense and solar. In biosciences and aerospace and defense, TREO helped facilitate two major expansions in the last year here in Tucson:

    • Roche/Ventana Medical Systems, 500 jobs, $184 million capital investment
    • Sargent Aerospace & Defense

      Our solar companies are consistently doing well and expanding too. SOLON Corp employs about 150 people in Tucson and is bullish on the future of solar in Arizona. The Solar Zone at the University of Arizona Tech Park continues to attract companies and development.

      In September 2010, Global Solar rolled out a new flexible solar module, the PowerFLEX BIPV, which consists of Global’s CIGS modules laminated into 300-watt strips. The strips can be directly attached to rooftops with adhesive. That avoids the need for costly and heavy glass-clad panels and mounting frames.

      What did TREO do for itself and its members in order to cope with the recession and now the recovery?

      PowerFLEX BIPV, Global's CIGS modules

      During the depths of the recession, we developed a very aggressive plan called Tucson: Job One. We have implemented much of this plan and continue to advocate for more tools and resources to help businesses. More recently we have developed an aggressive strategy to support and expand our aerospace and defense industry, which is a major contributor to Southern Arizona’s economy, with over 200 companies and $5 billion in revenue. The plan is in early stages, but includes exciting new discussions with public sector partners. The plan will be shared further in the coming months. Finally, our TREO investors have continued to support the organization, recognizing its critical role in these tough economic times. Our investor retention rate continues at 90 percent.

      How do you see 2011 shaping up for Tucson and Southern Arizona?

      The time is now to reshape our future economy, take some bold steps and emerge as the state everyone else aspires to be. What do we need to do to reshape our economy? Supporting industries that give us the greatest returns. Over the past 30 years, spurred by its climate and quality of life, the population growth rate of the Tucson region has far surpassed the nation as a whole. The region nears 1 million residents, and economists project that our population base will grow to 1.7 million by 2036. The rapid population growth has presented many challenging issues for the Tucson region, and will continue to do so in the future. Our region needs to provide services and infrastructure to meet the needs of these new families and residents. Equally important, we need to provide quality jobs and career opportunities so our current workforce, our children and new residents to the community can build the life they desire.

      From an economic standpoint, industries like home building and construction have expanded along with the explosive population growth, resulting in an over reliance on these types of service and growth-related jobs to fuel the economy. As long as these non-primary jobs remain the main economic drivers, we will continue to suffer the consequences of a “population boom or bust” economy. Our current situation points out how important it is to diversify our economic engines. In order to build a more diversified economy we must create programs and policies that support those employers that value high skills and reward with high wages. Not all jobs and employers are equal. We must support those employers that give us the greatest return on investment.

      Barry Broome, GPEC president and CEO - AZ Business Magazine Jan/Feb 2011

      GPEC’s President And CEO, Barry Broome Talks About Getting The Valley’s Economy Back On Track

      Give us a look ahead at Greater Phoenix’s major industries.

      The emergence of solar and renewable energy has been, and will continue to be, a big opportunity for us. We need to learn, as a market, how to be involved in new technology initiatives. There are going to be wins, losses and volatility, but the renewable space is going to continue to grow.

      From January to November 2010, 1,350 jobs and $153 million in capital investment have been created. Renewable energy projects now make up about 28 percent of the companies looking at our region.

      In addition to the renewable energy industry, health care, life sciences and information communication technology will expand next year. All of this is plagued by inconsistency in the capital markets. There is not enough private equity and there is no real IPO (initial public offering) market. Whenever you are building a new technology, it is really important that capital markets are responsive.

      What kinds of jobs does GPEC look to attract and grow in Greater Phoenix?

      We’re probably having the best year for attracting engineers and professional jobs that GPEC has ever had as an organization. These quality jobs are fueled by the fact that renewable energy is the new technology space.

      GPEC is performing at a high level, even though the country is still in a recession. We have already driven 4,400 jobs to Greater Phoenix from July to October 2010. Of those jobs, 66 percent provide high wages. We want to see even more high-quality jobs this year. Hopefully, we will continue to drive regional headquarters, and professional services and technology jobs in the region.

      GPEC talks a lot about competitiveness. Why is this important, and what specifically is GPEC doing to make the region more competitive?

      For a long time, GPEC has focused efforts on increasing the region’s competitiveness. It’s absolutely critical because every major investment is analyzed by people with very astute backgrounds for its financial implications, talent and long-term viability. The most common differentiating point for a market is its competitive position. We look at the cost of doing business, the speed of doing business, ability to attract talent and access to capital.

      GPEC has several initiatives to push Greater Phoenix into more globally competitive circles. The region — historically — has relied on retail, construction and real estate sectors to our own detriment. We have a high-quality job formula. Arizona will increase its competitive position with GPEC’s proposal to drive large company expansions, increasing our local, talented work force, and improving our tax climate. Working on job creation legislation with Tucson Regional Economic Opportunities (TREO), rural partners, the Arizona Commerce Authority and chamber partners is going to be really important this year. GPEC also works closely with the Arizona Chamber of Commerce, Arizona Small Business Association, Greater Phoenix Chamber of Commerce, Greater Phoenix Leadership, and our communities and mayors.

      It wasn’t that long ago, just four years ago, that Arizona was ranked No. 1 in the country for job growth. Now, we have fallen to almost last in the country — 48th place. We need to understand how to improve the environment for business and compete in new technologies and industries. That is going to make the difference for Greater Phoenix as it recovers from the housing slump and shifts the job base away from the real estate industry to export industries.

      Arizona Business Magazine Jan/Feb 2011

      Arizona Mega-Region, Sun Corridor

      Developing the Road Map to Growth in the Sun Corridor

      With the housing industry in the slumps and fewer construction jobs, now is the time for Arizona to look at ways to diversify its economy to guarantee a sustainable future. The region’s population is poised to grow from 5 million to 10 million by 2050, so we will also face the environmental challenges of accommodating rapid population growth in a fragile desert community.

      The changing demographic and economic situation is prompting researchers and leaders to think about how the mega-region known as the Sun Corridor can one day become a significant economic, technological and cultural center. In moving forward, how do we ensure a balance between economic growth and environmental quality?

      If the region between Phoenix and Tucson becomes a new paradigm in Arizona for sustainable development with a diverse economic base, our state — quite possibly — will be on track to advance globally. With that said, it will take a substantial amount of cooperation between business and government as well as much better marketing of the region to encourage the wave of investment to continue and accelerate.

      Next month, Valley Forward Association is hosting a luncheon focused on opportunities for the Sun Corridor. Panelists include:


      The program will be moderated by Janet Perez, editor-in-chief of Arizona Business Magazine, and will focus the discussion on ways Phoenix, Central Arizona and Tucson might work together to enhance growth opportunities and the quality of life issues in the Sun Corridor. Be part of the dialogue that will help shape Arizona’s future!

      Arizona Commerce Authority

      Arizona Commerce Authority Is Tasked With Re-Invigorating The State’s Economy

      As Arizona enters 2011, unemployment continues at about 9.5 percent, and according to one national ranking of commercial real estate site selectors, Arizona’s reputation as a business-friendly state continues to slide. That’s where the newly formed Arizona Commerce Authority comes in.

      “It’s not about re-branding, and it’s not about a committee,” says Don Cardon, ACA president and CEO. “This is about a plan that has the governor involved. We want to significantly advance Arizona’s economic future into a pronounced global competitive position.

      “This is not about politics or any industry in particular. It is how we distinguish Arizona within a global market,” Cardon adds. “The competitive nature of global markets requires the state’s absolute focus and collaboration with private-sector partners to achieve growth and diversification of the economy.”

      Gov. Jan Brewer took steps to accelerate the ACA’s mandate at the board’s second meeting. Besides officially naming Cardon head of the ACA, Brewer vowed to work with the state legislature to finish “re-creating the authority as a streamlined, modern organization that unleashes the most innovative minds in the business community.”

      In outlining some of the details of her economic development plan for Arizona, Brewer touched on three items:

      • Creating a “deal-closing fund’’ for the government to provide cash to companies willing to expand or relocate here.

      • Expanding the tax credits available to corporations that conduct research and development in Arizona.

      • Eliminating capital gains for investments made in small businesses.

      Putting Cardon in charge of the ACA is the first step in implementing that plan. He will lead the organization, which will focus on attracting new businesses and retaining existing businesses that create more high-wage, quality jobs.

      “My intention was to return to the private sector. However, Governor Brewer and Mr. (Jerry) Colangelo convinced me this is the most critical time for Arizona,” Cardon says. “Since the Governor has allowed me to assist her in designing the road map we are pursuing, I realized this was a unique time in life where my continued involvement may be best concerning all the ACA is aggressively endeavoring to achieve.”

      “Don Cardon’s work with me in restructuring and revitalizing the new Commerce Authority has been groundbreaking,” Brewer says. “His credibility in the arena of business and industry is essential to our success in advancing Arizona’s economy.”

      In an executive order last summer, Gov. Jan Brewer established the 35-member, statewide ACA to replace the Arizona Department of Commerce. The ACA is led by a private-sector board that will work to align diverse assets and opportunities within the state in order to compete economically in both domestic and international markets to create high-quality jobs for Arizona residents.

      In picking a board vice chairman, Brewer reached out to one of the Valley’s most successful and visible businessmen, Jerry Colangelo. Under Brewer, Cardon and Colangelo, the ACA will have a focused approach to four core areas on which to advance the state.

      The ACA will work on improving the state’s infrastructure and climate to retain, attract and grow high-tech and innovative companies. The focus will be on aerospace and defense, science and technology, solar and renewable energy, and small business and entrepreneurship.

      At the board meeting, committee reports detailed sustainable strategies that will help Arizona compete globally.

      • Focus on science, technology, engineering and math in K-12 education.

      • Focus on the innovation cycle to grow knowledge-based businesses.

      • Develop toolbox and retain policy enablers for capital intensive industries to encourage high-wage employers to invest in Arizona.

      • Make positive changes to Arizona’s regulatory environment.

      • Foster collaboration that enables development of Arizona’s small-business community within the industry sectors.

      • Enhance the ACA’s industry sectors by establishing the leadership required to connect all stakeholders, companies, universities, private-public partnerships and other organizations.

      “During one of the most challenging economic conditions in our nation’s history, we are fighting for the health and future of our families and this state,” Colangelo says. “It’s also about business retention … to put everyone in the position where they can be successful. Let the people who know how to do these things take charge.”

      Adds Joe Snell, president and CEO of Tucson Regional Economic Opportunities (TREO): “The ACA needs to work with the state Legislature to ensure that we have the tools and programs needed to compete with other states. Arizona desperately needs a competitive jobs bill that must address incentives.”

      Creating jobs and attracting new businesses are at the top of the ACA’s list. While there are projections that Arizona will add more than 400,000 jobs by 2018, about 300,000 will be needed just to make up for those lost since the recession began in December 2007. Not helping matters is the state’s murky business climate.

      The Pollina Corporate Top 10 Pro-Business States for 2010 ranks Arizona the 27th friendliest state for business. Arizona was a Top 25 state in 2004 (15th), 2005 (20th) and 2006 (25th). It dropped from the Top 25 in 2007.

      In Site Selection magazine’s poll of state business climates, however, Arizona climbed to No. 17. Two major announcements at the end of 2010 helped buoy that ranking: pharmaceutical giant Roche Group’s expanded operation at Oro Valley-based Ventana Medical Systems (500 new jobs in biomedical research) and Intel Corporation’s announcement that it was upgrading and adding jobs at its facility in Chandler.

      “The ACA brings a much-needed public/private partnership to lead the state in these difficult economic times,” says Don Keuth, president of the Phoenix Community Alliance. “They can address those issues that make Arizona less competitive and create strategic solutions to allow us to compete. And, they can focus on growing those industry clusters where we have a competitive edge.”

      The renewable energy bill passed by the Legislature in 2009 demonstrates that economic development programs can immediately impact an industry cluster.

      Case in point: Arizona is leading the country in the creation of new solar jobs. Recent examples include Rioglass Solar, a Spanish company, building a $50 million reflector manufacturing plant in Surprise; and China-based Suntech selecting Goodyear for its first manufacturing plant outside of that country.

      “We need a broad vision to accept that new rules and new tools will be needed,” says board member Mo Stein, principal and senior vice president of HKS Architects, whose company designed the Valley’s newest spring training facility, Salt River Fields at Talking Stick. “It is no longer business as usual; not the same questions and certainly not the same answers.”

      For more information about the Arizona Commerce Authority, visit azcommerce.com.

      Arizona Commerce Authority - AZRE Magazine November/December 2010

      Arizona Commerce Authority: Team Effort in Arizona CRE

      If there’s one person who can help give Arizona the home-field advantage when it comes to attracting new businesses, new jobs and making the state more competitive in the global market, it’s Jerry Colangelo, the vice chairman of the Arizona Commerce Authority.

      Perhaps that’s why Gov. Jan Brewer picked the Valley businessman as vice chairman of the newly formed Arizona Commerce Authority, a private sector board that will replace the Arizona Department of Commerce. The 35-member board includes a diverse group of business and educational leaders from across the state.

      No matter what you’re in, it takes teams and people to win,” Colangelo said. “It’s true in every walk of life. Look at the disconnect that has existed in our state for such a long time, with the Legislature, with the business community, the lack of a game plan. Everyone has to be on the same page. And so the good news is this: There’s only one way to go. There is plenty of space here for us to be very, very successful.”

      There definitely is room to grow when it comes to business attraction in Arizona.
      According to Department of Commerce statistics, 47 companies located or expanded in Arizona in 2007, bringing a capital investment of $1.6B, almost 10,000 new jobs and an annual payroll of $483M. Then the recession hit and in just two years those figures took a nose dive: 24 companies located or expanded in Arizona with a capital investment of $255M, 2,649 jobs and a $124.6M payroll.

      “When I became governor, I promised to get Arizona back on track by creating quality jobs, attracting high-growth industries, and advancing our competitive position in the global economy,” Brewer said. “With this board, I have now delivered a model to advance Arizona.”

      Arizona Commerce Authority: Addressing the Industry’s Needs

      How that model will advance Arizona is a question those in commercial real estate are asking. To its credit, the Arizona Commerce Authority includes several board members with direct business ties to the industry.

      They are: Drew Brown, chairman of the board, DMB Associates; Peter Herder, chairman of the board and CEO, Herder Commercial Development; Mike Ingram, CEO and president, El Dorado Holdings; Doug Pruitt, chairman and CEO, Sundt Construction; and Mo Stein, principal and senior vice president, HKS Architects.

      How do those in the industry envision an entity such as the Arizona Commerce Authority boosting a sagging commercial real estate market in Arizona?

      “I look for the Arizona Commerce Authority to create a business model for all aspects of development in the state,” Stein said. “The authority will allow leverage of both public and private strengths that go beyond individual projects to opportunities that impact large segments of our communities and industries throughout the state.”

      Mike Haenel, executive vice president, Industrial Division at Cassidy Turley BRE Commercial, noted: “I would like the Arizona Commerce Authority to communicate to the State Legislature exactly what it would take to relocate a company to Arizona. Thanks to a sophisticated local commercial real estate development industry, we have well-located and functional real estate available. Given the current economic conditions, pricing is extremely attractive, which translates into a perfect time to rent and or buy real estate in Arizona. The Arizona Commerce Authority needs to figure out what our state government should do to be competitive in attracting and retaining companies.”

      Jim Gibson, senior associate in real estate at Squire, Sanders & Dempsey adds: “There has always been a long-standing partnership between economic development and the commercial real estate industry. Because of its role attracting new businesses to the state, I suspect that the Arizona Commerce Authority will be a tremendous resource for lead generation to brokers, developers and others in the industry. In addition, because of the Arizona Commerce Authority’s make-up of leaders in the private sector, it seems well-positioned by having both the business savvy to understand the wants and needs of companies looking to expand or relocate to Arizona, as well as having established relationships in the real estate industry to help each company assemble the right team depending on its particular real estate needs.”

      Brewer made sure the new Arizona Commerce Authority is a statewide endeavor. While most board members are from the Metro Phoenix area, there also are four board members from Tucson, two from Flagstaff, and one each from Prescott and Yuma.

      By creating a more competitive landscape and making economic development a higher priority, commercial real estate opportunities and transactions will result,” said Joe Snell, president and CEO of Tucson Regional Economic Opportunities (TREO). “The ability for the authority to assist groups like TREO in attracting and expanding primary jobs will result in significantly more commercial opportunities downstream.”

      Listening to the Industry’s Concerns

      While those involved are excited over the prospects of what the Arizona Commerce Authority may be able to achieve, there also is guarded optimism. Mark Singerman, regional director of Rockefeller Group Development Corp., said that just to stay even with what most other states offer, Arizona needs to become more competitive in attracting businesses to relocate here. He cites SB 1403, a bill giving special tax breaks and incentives to the solar energy industry.

      Within several months of that incentive for renewable energy companies becoming law, there were at least a dozen solar companies looking to locate here,” Singerman said. “This type of incentive program needs to be expanded to all desirable industries.”

      Up until 2006, Singerman said, Arizona became complacent about attracting residents and businesses. By virtue of being in close proximity to high-cost California, the state enjoyed steady growth with little effort.

      “We now have to up our game to stay even with other states,” Singerman said. “If we have competitive economic incentive programs similar to what other states offer, our total package will be hard to beat when companies do their comparisons. But we are not there yet.”

      Added Tim Lawless, president of NAIOP-AZ, adds: “While strategically targeting specific industry sectors like aerospace in the hopes of further diversifying our state’s economy is laudable, it is very unclear what the Arizona Commerce Authority can or will do to assist the vast number of firms that are already in the state, especially with their very limited budget. We need to keep in mind that we have more than 350,000 firms in our state and we need policies that will create an environment for them to survive and add jobs.

      This can only happen should the Commerce Authority advocate for broad-based tax reform, rather than exclusively relying on esoteric tax breaks that create winners and losers,” Lawless continued. “Cake and ice cream tax breaks for industries like solar are fine, but only after a more substantial and well-balanced economic development diet is put on the table for all firms.”

      For the Arizona Commerce Authority to make the state more competitive in business attraction, Lawless said Arizona needs to lower overall commercial property tax burdens, which are among the highest in the U.S.; create a significant deal-closing fund (non-tax benefit related) to land large employers that leverage the highest paying jobs; and lower corporate income tax rates that would put the state in a better position to compete with other Western states.

      Arizona’s political climate could be another stumbling block in attracting new businesses, said Marty Alvarez Sr., CEO of Sun Eagle Corp.

      “Part of the problem is the perception throughout the country that Arizona is a racist state with no upside for their companies to move here,” Alvarez said. “The Hispanic business community needs to be part of the marketing effort to dissuade the thought that our state is in political turmoil. This is the time to bring national and international firms to Arizona.
      The collaboration led by the ACA needs political, social and business direction from the Hispanic business community in order to create a positive atmosphere for incoming companies,” he added. “The idea and implementation of the ACA is not only good but is a necessary solution for the future economic well being of our state. The leaders chosen to enact this organization and jumpstart the dialogue must be a public-private partnership.”

      AZRE Magazine November/December 2010

      TREO Is Working To Position The Tucson Region For Post-Recession Growth

      The past year was unprecedented in the U.S. economy. As experienced nationwide, the recent credit and housing crises resulted in rapid job losses and extreme economic uncertainty. While the situation at the national and state level is critical, leaders in the Tucson region are working to take our destiny into our own hands, providing leadership in developing local tools and programs to create jobs for our citizens.

      Gains experienced in 2009 were a result of our ability to react quickly and develop programs and initiatives to mitigate the effects of the worst recession in 30-plus years. Significant progress was made in addressing the work force skills gap, improving and expanding our best practices, communications to internal and external customers, and thought leadership.

      In response to the economic conditions, Tucson Regional Economic Opportunities (TREO) developed a plan called Tucson: Job One. In conjunction with all our community partners, we created a proposed immediate action plan with clearly defined priorities to address strengthening the local economy, creating and maintaining jobs, and spending. This is our chance to synergize the region’s recent strategic planning efforts and priorities, demonstrating how all local economic drivers can work together to emerge stronger and with a much more diversified economy.

      To address local economic conditions, in early 2008 TREO embarked on a comprehensive survey of 170 of the top local companies in an effort to gather data on those planning to hire new employees within the next year. Companies that responded to the survey reported a total of more than 2,200 open positions anticipated to be filled within the next 12 months. TREO then created a job portal on its Web site as part of the Tucson: Job One program. Available at www.treoaz.org/Tucson-Job-Portal.aspx, the job portal provides links to the career pages of a sampling of companies that reported plans to hire despite the state of the economy.

      The region realizes it needs to be poised and ready when the economy improves, so TREO has instituted some programs to help facilitate readiness.

      Shovel ready and fast track permitting
      TREO’s Shovel Ready and Fast Track Permitting program involves the certification of shovel-ready sites for fast-track permitting and development processes. The program makes the Tucson region more competitive in attracting and expanding new, high-skilled/high-wage jobs.

      Certified shovel-ready sites are parcels that are on the market for sale or lease, appropriately zoned, pre-qualified to meet local planning requirements, served by utilities, and with identified access to transportation linkages. The certification requirements are designed to ensure the ability of a firm to proceed immediately to the building permit phase and be able to receive approval of plans within 90 days.

      California job development program
      Arizona Sun Corridor: Open for Business is an unprecedented partnership between the Greater Phoenix Economic Council (GPEC), TREO, the Greater Yuma Economic Development Corp., and the city of Flagstaff that is designed to bring high-wage jobs and investment to the Sun Corridor, a megapolitan projected as one of the 10 U.S. markets expected to see most of the nation’s growth in the next 35 years.

      The program pools resources to place a contractor in California who will be responsible for researching companies and qualifying those poised to expand operations. The contractor actively generates business development leads in targeted industries such as aerospace/defense, health care/bioscience, transportation/logistics, renewable energy, and information communications technology.

      Transportation and logistics focus
      TREO’s efforts in the transportation and logistics industry focus on developing and presenting a regional implementation plan that positions the Tucson region as a recognized global logistics and distribution hub. The goal is to facilitate economic growth, prosperity and opportunity for the Tucson region through the promotion of freight, transportation and logistics.

      The Tucson region possesses a strong transportation infrastructure, including interstate highway, railroad and air freight connections. The convergence of Interstate 10 and Interstate 19 provides the region with connections to major east-west and north-south trade corridors. The same advantage holds for the region’s rail connections — the Union Pacific Sunset Route runs east-west through Tucson, along with the north-south connection to Mexico via Nogales. The existing Port of Tucson intermodal operation is a huge asset for the expansion of rail opportunities in Southern Arizona. Additionally, current air freight operations include integrated carriers such as Federal Express and cargo operations provided via passenger carriers. Expansion possibilities exist for air freight with the ongoing expansion of the air cargo warehouse facilities at Tucson International Airport. Recent surveys indicate more than 150 logistics-based businesses are currently serving the needs of freight movement in the region, and more than 72,000 jobs are associated with the existing manufacturing, warehouse, and transportation sectors.

      Aerospace and defense industry recognized
      According to economy.com, Tucson’s highly concentrated aerospace product and parts manufacturing sector has an 8.35 location quotient, a ratio calculated to compare a region’s industrial activity level to the rest of the United States. The location quotient means Tucson is 8.35 times more concentrated in the aerospace product and parts manufacturing industry than the average of all metropolitan statistical areas across the country.
      In August 2009, Business Facilities magazine named Tucson No. 6 on its list of the top 10 metro areas for aerospace/defense manufacturing in its fifth annual ranking report. The ranking is primarily based on a comparison of industry sector employment and wages. Also evaluated were major projects and facility expansion/relocation activity for a region in the past 12 months, and the number of major aerospace and defense contractors headquartered in the region.

      Solar heats up
      Tucson is home to a growing number of companies involved in the development and production of solar technology, including several recent investments from Germany, Europe’s solar hub. In 2009, TREO conducted an economic analysis revealing that there are close to 50 companies in the region involved in solar-related activities, directly or indirectly supporting more than 2,000 jobs with a total annual economic impact of more than $400 million.

      New expansions and relocations
      Switzerland-based Roche bought Ventana Medical Systems in early 2008, and purchased 17.1 acres for $8.9 million to expand its campus. Ventana is now the headquarters of one of Roche’s global business units that focuses on diagnostics. Roche CEO Severin Schwan says the company plans to expand research and development laboratories at Ventana’s campus and increase staffing levels from about 750 to more than 1,000.

      Tucson-based Salutaris Medical Devices, a startup medical devices firm, received $1.5 million in Series A financing by Arizona venture capital firm Translational Accelerator (TRAC). TRAC, a private, Arizona-based, $20 million bioscience venture capital group, is Arizona’s first venture fund established to target early-stage bioscience companies. TRAC investments only support firms located in Arizona or those planning to move to the state.

      The Rockefeller Group Development Corporation broke ground on the first of three distribution buildings on a 21.5-acre, pad-ready approved industrial site in the Tucson Airport Commerce Center. The first building, a 113,000 square foot state-of-the-art speculative distribution building was completed and ready for occupancy in June 2009.

      Schletter, a manufacturer and distributor of solar mounting systems based in Germany, chose Tucson for its first U.S.-based operations center. Schletter has operated more than 40 years in the design and manufacturing of steel and aluminum products, and rose to be the largest provider of solar mounting systems in Europe, supplying utility-sized PV-projects. Following the German lead, the Tucson facility offers everything from design and development to manufacturing of Schletter products.

      Since TREO was formed in 2005, more than 40 companies have announced their relocation or expansion in the region, adding thousands of new jobs and contributing more than $1 billion in fiscal and economic impact.

      Laura Shaw, senior vice president of marketing and communications for TREO contributed to this report.


      Arizona Business Magazine

      January 2010

      Wooing businesses to AZ in the recession

      Despite Tough Times, Economic Development Groups Continue To Woo New Businesses To Arizona

      Economic development experts in Arizona hope to parlay the state’s convenient geographic location, and even a stagnant housing market, into attracting new businesses.

      Toss in relatively low taxes, a freeze on new regulations and a well-honed reputation as a business-friendly state, and recruiters have a tool box full of reasons why businesses should consider relocating to Arizona.

      But that’s not all the economic development agencies tout. Local experts know that businesses looking to relocate are interested in those intangible quality-of-life issues: an available and educated work force, a higher-education community that excels in research and churns out highly qualified workers, and a relatively low cost for starting up and doing business.

      Television commercials are generally cost-prohibitive, officials say, leading them to rely heavily on the Internet for their recruitment efforts. Feature articles in national trade publications also represent a low-cost way of spreading the Arizona story.

      Two of Arizona’s largest economic development agencies — the Greater Phoenix Economic Council (GPEC) and Tucson Regional Economic Opportunities (TREO) — are collaborating on a campaign to lure California businesses to Arizona.

      Scarlett Spring, GPEC’s senior vice president of business development, says her team makes targeted trips to California at least once a month, with specific emphasis on the Bay Area, Los Angeles and San Diego. Often, GPEC invites local mayors along to give recruitment efforts an official flavor. Bringing mayors, Spring says, gives recruiters leverage and “opens doors that might not otherwise be open.”

      The GPEC message to California?

      “Arizona has a business-friendly environment and a reputation of having lowered taxes in some shape or form for 10 consecutive years,” Spring says. “It’s a lower-cost environment for their employees, whether through workers’ comp, competitive wages or health care insurance. Those are the operational costs that a company looks at when considering a financial move or expansion.”

      Noting that virtually every phase of running a business is more expensive in California, Spring adds, “What we’re doing is trying to position Arizona as being complementary to the California marketplace.”

      DGPEC also invites businesses to Arizona for special events. For example, last November biotech and solar companies from the Bay Area were hosted for a weekend in the Valley. The visit included attending a game between the Arizona Cardinals and the San Francisco 49ers. Two of those companies are close to moving to Arizona, Spring says.

      Laura Shaw, senior vice president of marketing for TREO, agrees with the strategy of taking advantage of Arizona’s location. California businesses struggling under mounting operating costs have the ability to move to Arizona and still access California markets.

      TREO targets such industries as aerospace, defense, biosciences and alternative energy, and only meets with companies that have been pre-qualified as likely candidates for relocation.

      “Research shows that labor drives all market decisions — whether a company can find the labor that fills their needs,” Shaw says. “We focus on matching our assets with a company’s needs.”

      Despite the national perception that Tucson is a low-wage community, TREO presses for higher-paying jobs.

      What the Tucson area offers is a high-growth Southwestern region situated at the doorstep of California and Mexico, with young talent graduating from the University of Arizona. Tucson is also in the heart of one of the most heavily traveled trucking networks, linking Mexican markets to the California coast.

      Meanwhile, the Arizona Department of Commerce, though on a limited basis because of budget cuts, continues to participate in trade shows and foreign direct investment events in Canada, Mexico and Europe. Commerce officials and hired contractors work with foreign companies that are interested in expanding to Arizona. They also help match Arizona firms with foreign customers.

      Kent Ennis, interim director of the Commerce Department, confirms that a tight budget makes recruiting more difficult, yet the agency reaches out to major industries, including bioscience and solar. In fact, the Commerce Department led an Arizona delegation to a national convention of bioscience technology companies in Atlanta on May 18.

      In addition, the Commerce Department assisted in the relocation of Spain’s Albiasa Solar, which in April announced plans to build a $1 billion renewable solar energy plant near Kingman. The project will create 2,000 construction jobs and more than 100 permanent positions when it is completed in 2013, Ennis says.

      The Arizona Association of Economic Development, which is more of a trade organization representing Arizona firms and does not embark on recruiting efforts, nevertheless gets its share of contacts from businesses considering a move to Arizona, says Bruce Coomer, executive director of AAED. But first, he makes sure to sing Arizona’s praises. He mentions the usual advantages, but adds an unlikely twist.

      Because our housing market crashed,” he says, “that’s a plus. Now there is affordable housing if a company wants to move here, especially from California. Their employees can really get some bargains.”

      Tucson, Arizona

      Southern Arizona Trying To Set The Stage For A Post-Recession Surge

      Like the rest of the state, Southern Arizona has been in a recession since 2007, and at least one prominent economist says the situation won’t be getting better anytime soon.

      “My forecast is that it’s going to take a while to get (credit markets) straightened out again and functioning as they should,” says Marshall Vest, director of the Economic and Business Research Center at the University of Arizona’s Eller College of Management. “I think that takes up most of 2009. Then we have all the excess housing that needs to be absorbed. That’s going to take some time and we’re not really absorbing the housing right now because credit markets have been essentially frozen. So, I think it’s the end of 2009 before the economy really regains its footing. I think we’ll start to move up in 2010. By move up, I mean the economy will once again begin to expand and enter a recovery phase.”

      Joe Snell, president and CEO of Tucson Regional Economic Opportunities (TREO), says that despite the already deteriorating economic conditions, Tucson still managed to draw new companies and expansions in 2008.

      “We’re definitely seeing a slow down in a lot of ways, both in the recruitment of companies and the expansion of companies, but not a massive downtick,” he says. “Our pipeline is as full as it’s ever been. But what we are seeing are companies that may have been ready to announce a $100 million expansion in November saying, ‘We’re going to wait on that until January, we’re cautious, we want to see what’s going to happen in the next three months.’ ”

      Last year, the region still saw growth in the health care, bioscience, alternative energy and aerospace industries. Of particular note was the purchase of Ventana Medical Systems in Oro Valley by Swiss drug maker Roche for $3.4 billion. Roche also announced plans for a $100 million expansion at Ventana that would increase employment from 750 to about 1,000. In addition, Roche purchased more than 17 acres of land around the Ventana site to expand the location.

      “Possibly the most significant thing we can point to though, is that 57 percent of the successful projects were in our targeted industries, and that’s important because those targeted industries represent quality rather than quantity, meaning, closing the wage gap,” Snell says. “Historically, Tucson has ranked somewhat below both the state and the national average in wages. So we’re rapidly moving in the right direction to close that gap. To me, that’s a big takeaway.”

      Southern Arizona has not been immune to the effects of the housing market collapse and its devastating impact on the construction industry. For example, one of the first companies TREO recruited, window and doormaker Pella Corp., announced in November 2008 that it was idling its Tucson plant, affecting 65 workers. When Pella first located to Tucson in 2005, company officials said it had plans to employ more than 400 people at its facility.

      Still, as Vest points out, since the construction boom was not as great in Southern Arizona as it was in the Phoenix area, the drop has been less precipitous. For example, year-over-year job losses in the construction industry in October 2008 stood at 4,000 in the Tucson metro area, according to figures from the Arizona Department of Commerce. In the Phoenix-Scottsdale-Mesa area, 30,000 construction industry jobs were lost during the same period.

      “Commercial (construction) is still in relatively good shape. Vacancy rates are moving up, but they are still fairly low. Tucson didn’t see the construction boom in commercial that you saw in Phoenix, so, commercial construction here in Tucson doesn’t have as far to fall,” Vest says. “For residential, the indicators that I see are pretty comparable to Phoenix, except for the housing price data. I don’t think the declines have been quite as large (in Southern Arizona).”

      Snell says that so far, Southern Arizona has managed to hold its own on employment.

      “We have losses in construction, but we’re gaining it on biotech, we’re gaining it on solar, we’re gaining it in logistics companies. I think right now we’re sort of a wash,” he says.

      Vest, however, expects more job losses across the state as the recession drags on through 2009. In fact, comparisons of unemployment rates from 2007 and 2008 already are startlingly eye opening.

      In October 2008, the unemployment rate for the state, the Phoenix metro and the Tucson metro stood at 6.1 percent, 5.5 percent and 5.8 percent, respectively. In October 2007, the state’s unemployment rate was 3.9 percent, Phoenix’s was at 3.4 percent, and Tucson came in at 3.9 percent.

      “I think the unemployment rate will likely reach 8 percent before we’re through,” Vest says.

      Vest adds that rate is in line with the jobless figures of the last major recession of the early 1980s. Back then, unemployment peaked at 13 percent in the state, 8.9 percent in Phoenix and 10.5 percent in Tucson.

      Fortunately for Southern Arizona, Vest says, the region’s economy is considerably more diverse than it was in the early ’80s. But with credit still tight and the housing market stuck in freefall, Vest cautions about being too optimistic on the strength of a recovery.

      “I really think this recovery is probably going to be muted. I don’t see us rebounding very strongly. The process is going to take awhile,” he says. “This recession is going to be longer than the recessions of the early ’80s or mid ’70s. If it stretches through 2009 and the recession began in the fourth quarter of 2007, we’re talking about a two-year-long recession. Nationwide, the longest recession has been 16 months.

      “It’s been a very long time in this country since we have encountered a very severe recession. The recessions of 2001 and 1991 were both very short and shallow. They barely qualified as recessions, rather than a growth slowdown. It’s only the gray hairs that remember what a severe recession is like,” Vest adds. “This is scary. This is messy. But we’ve been through this before. If you are a business and you can hang on and remain solvent and get through this, there will be plenty of opportunities on the other side. I would also say that it’s during times like this that the seeds are sown for fortunes to be made. Savvy investors will take positions in markets where assets are cheap and will benefit handsomely as the economy recovers —as surely it will. And the deep pockets know that and there is a lot of money on the sidelines waiting for the right opportunity.”

      Snell agrees, adding that now is the time for Southern Arizona to stake a claim in future growth and prosperity.

      “We’re not going to ride out the recession. I’m a big believer that now is the time to get aggressive,” he says. “I think we have a good head of steam. At this point, I would say Tucson is as competitive as any major city in the country, including Phoenix. That’s a first for us. Are we going to get cooled off by the national economy? Yes, absolutely. But I think we’re in as good a position as anyone coming out of this recession to capitalize, and maybe within this recession to capitalize.”

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