This year, the Arizona Association for Economic Development (AAED) released its third State of Economic Development Report, which compiled survey responses from more than 100 professionals across the state concerning the challenges and opportunities that lie ahead. Katie Hurst, executive director of AAED, explains that economic development takes place both in the short- and long-term, which means a report such as this helps the association sense of what is needed from members.
“This report gives us valuable information about what folks are going through and a better understanding of their work so we can drive our programming and resources accordingly,” she continues.
Jennifer Lindley, downtown development manager for the Town of Queen Creek and president-elect of AAED, adds that two of the top two persistent issues facing economic developers is the lack of building inventory and skilled labor.
“The scarcity of available buildings drives up prices and limits options, especially for mom-and-pop businesses that our communities want to support,” she continues. “The shortage of skilled workers hinders projects not only from a timeline standpoint, but overall quality.”
While one-size-fits-all solutions are hard to come by, Lindley notes there are steps that can be taken to address these issues. Proactively installing essential infrastructure, repurposing existing structures, streamlining the permitting process and encouraging speculative development can help increase the supply of buildings, which would be especially helpful in more rural communities.
“The shortage of skilled labor will have to be addressed with the strategic partnerships we can create with colleges and universities, and encouraging the creation of more training programs,” Lindley says. “We have to raise awareness about career opportunities within the trades so we can also attract young people to the industry.”
Priceless partnerships
According to AAED’s survey results, economic developers in communities of all sizes highlight the importance of partnerships to their work. Tim Bourcet, vice president of corporate development and community engagement for GPEC and chair of AAED’s Government Affairs Committee, notes that these partnerships look different across the state.
In smaller and mid-sized communities, those ties are formed with chambers of commerce, workforce development groups and local colleges. In regions with a state college nearby, partnerships with the universities are also critical.
“I’m a Prescott boy myself,” Bourcet says, “and the people in the Prescott area and Yavapai College are going to understand their needs and what resources they have available far better than we do, and those will be different from what we need here in Phoenix. It’s about empowering those private and public sector folks in those regions, whether they’re official public-private partnerships or loose affiliations.”
Hurst adds that one of the benefits of AAED being a statewide organization is having a network of people that are willing to share insights about what is happening in their region with others.
“A great example is our Rural Committee, which focuses on smaller communities in Arizona,” she continues. “Many of these places are looking to build business incubators and were looking for resources, so we were able to connect them with Jaye O’Donnell in Mesa who happened to be working on business incubation, and now metro and rural folks are sharing best practices about how that can be implemented in their communities.”
Legislative priorities
Another key finding in AAED’s State of Economic Development Report reflects members’ concern over political interference. In the context of the survey, political interference refers to policies or legislation that hinder economic development efforts, and typically come from the municipal level. These can take the form of administrative tasks and policies, such as tax rates and zoning.
For example, multifamily and mixed-use projects often draw a lot of attention from NIMBYs, which stands for “Not In My Backyard” and refers to people who are against developments for different reasons such as a perception of overcrowding or reduced property values.
“I’ve personally have sat through too many city council meetings waiting for my agenda item to come up, but had to listen to a two-hour discussion on why a project is or isn’t a good idea. If you’re a developer, that becomes onerous,” Bourcet says.
Many of the top concerns of economic developers, whether it’s infrastructure or workforce development, are highly political issues. That’s why AAED recently adopted a new set of legislative priorities to address these challenges, which are especially important in an election year.
Bourcet explains that there are three major ballot initiatives that AAED is supporting. The first is Prop 479, which extends a half-cent sales tax to fund transportation infrastructure.
READ ALSO: Here’s why Prop 479 is crucial to the growth of Metro Phoenix
“[The half-cent sales tax] has been in existence for 40 years,” he continues. “Here at GPEC, we recently did an analysis that showed since our founding in 1989, about 1,000 companies have located to the region, and nearly 90% of them are within one to two miles of a major thoroughfare, such as the Loop 101. Companies go there because they are good roads and are maintained properly, and we must continue that.”
Showing support
AAED is also backing Prop 486 in Pinal County, which will also renew a dedicated funding mechanism that will pay for repair, maintenance and improving county roads. Pinal County is the fastest growing county in the state, and Bourcet notes that the region is seeing high levels of business activity.
Lastly, AAED supports another Prop 486, which is an initiative focused on raising the expenditure limit for Maricopa Community Colleges.
“The expenditure limit was designed 40 years ago using an equation 40 years ago, so it’s a bit out of date. But we have to play by the rules,” Bourcet says. “If this doesn’t happen, and Maricopa Community Colleges exceeds their expenditure limit, there are some penalties. We’ve heard that there could be cuts in excess of $100 million if this is not passed, and our community college network is crucial.”
While AAED does not endorse specific candidates, Bourcet says publicly supporting these three propositions is needed since they represent what he calls “the bread and butter of butter” of economic development.
“Many organizations, AAED included, have historically been apolitical, if you will,” Bourcet concludes. “Now, many have switched to a nonpartisan viewpoint. Everything is political, and we could make the argument that anything [that happens politically] ties into economic development. That said, it is important to be at the table with legislators and peer groups, because we are the experts and need to provide our perspective.”
