There’s a reason why nationally-recognized companies such as Amazon, Caterpillar, Raytheon Missile Systems, Bombardier, GEICO, Homegoods, Hexagon Mining, and other powerhouses set their sights and sites on Tucson. How did this former seemingly small college town transform into a home for more than 1 million people, 160 new and expanding companies, and a dynamic, expanding downtown?
In addition to the tireless economic development efforts and strategies of Sun Corridor Inc. and its board members and Chairman’s Circle, the collaboration of Tucson’s educational, government and private sectors has kicked Tucson’s growth into the highest gear in years — with no signs of stopping or even slowing down.
Momentum builds
Tucson currently exemplifies Newton’s First Law: bodies in motion, stay in motion.
“We are a region in motion,” says Sun Corridor Inc. President and CEO Joe Snell. “We’ve had a dramatic two-year turnaround that has involved a tremendous amount of behind-the-scenes work. The best times are ahead of us.”
Snell’s assertion is an understatement. Economic development for Tucson has become the proverbial snowball that has amassed into a monolith for the entire Southern Arizona region.
Since 2015, 55 companies have announced relocations or expansions in the region. Those moves represent 13,770 direct jobs, more than $1.5 billion in capital investment and $19.2 billion in economic impact over the next five years.
What catalyst kicked Newton’s First Law into motion for Tucson?
“Tucson has historically been filled with a lot of missed opportunity when it comes to the economy,” Snell says. “The main reason being, that we weren’t working collaboratively in years past. The turnaround for us was the great recession. When the recession hit, everything just stopped.”
Not only stopped, according to Snell but devastated Tucson, driving unemployment to 11 percent, in addition to creating unprecedented commercial vacancies.
“We had to look at things through a new lens,” Snell says.
Under the leadership of Snell, the Sun Corridor Inc. Chairman’s Circle and board of directors established a three-pillar economic development strategy that focused on fostering relationships with education, government, and business leaders.
“Education is critical to the development of talent,” Snell says. “A large majority of our board is comprised of leadership from the University of Arizona, Arizona State University, and Pima Community College.”
Government relationships have dramatically improved, according to Sun Corridor Inc. Chair David Hutchens, president and CEO of UNS Energy Corp, Tucson Electric Power & UniSource Energy Services.
Unity pays off
“I’ve been involved with Sun Corridor Inc. for over 10 years and have witnessed the transformation of Tucson’s government and municipalities,” Hutchens says. “It used to be that there was an ‘us versus them’ mentality. Now, everyone is collectively setting common economic development goals and pulling in the same direction.”
The result of collaboration has been Southern Arizona’s mass attraction of new business builds and relocations.
“Tucson is now being described as what Austin was about 10 years ago,” says Sun Corridor Chairman’s Circle member Fletcher McCusker, CEO of UAVenture Capital. “Typically, Tucson was not one of the top-five economic development contenders. Now, we see Tucson consistently mentioned because of companies like Amazon, HomeGoods, Comcast, and Caterpillar.”
And, where markets like Denver used to be among the most prolific in tech job growth, Tucson has rivaled those industry hotbeds as one of the fastest-growing areas for technology. The Oliver Wyman Forum shows Tucson tied Austin with 33 percent tech job growth from 2007-2017.
In addition to job growth and economic development in the tech sector, Tucson has shown tremendous growth and strength in the aerospace and defense sector, automotive industry (with a huge push and presence with autonomous vehicles), bioscience, healthcare, renewable and mining technology, and transportation and logistics.
Law of attraction
In addition to Newton’s First Law, Tucson exemplifies the law of attraction. With a critical mass already established in the previously mentioned industries, companies from across the nation can’t help but zero in on Tucson.
“Raytheon is in the middle of a major expansion in Arizona,” explains Raytheon Missile Systems PR Director John Patterson. “Last summer, Raytheon executives, along with federal, state and local leaders, formally dedicated six new buildings at the company’s Tucson plant site.”
According to Patterson, the $275 million, 18-month construction project will support many of the more than 2,000 workers the company plans to hire by 2021.
Similarly, Amazon’s new 855,000-square-foot distribution center will provide an estimated 1,500 full-time jobs for Tucson residents.
And, while positive job growth and economic growth are major advantages to the presence of nationally-recognized companies such as Raytheon and Amazon, there are more benefits to consider.
“Raytheon employees volunteer thousands of hours annually in Arizona classrooms, tutoring students in math and science,” Patterson says. “The company sponsors numerous outreach efforts to help spark student interest in science, technology, engineering and math. Raytheon also supports military veterans and their families through various programs.”
While offering employees a career choice that enables them to receive tuition reimbursement for two years of community college, Amazon also strives to partner with local businesses and vendors.
“In terms of day-to-day interaction, Amazon fulfillment centers partner with local vendors for T-shirts, gear, catering, construction, and more,” says Zeshan Kazmi, Amazon’s regional public relations manager for the Greater Los Angeles Area. “There are many different partnerships we can form with the local community.”
Gravitational forces
In discussing the expansion of Tucson’s economic development, downtown Tuscon has — and continues to be — an integral focus.
“Downtown Tucson has been the center of Tucson’s resurgence,” McCusker says. “Caterpillar just moved their headquarters downtown; we have a light rail; and real estate investment banks have collaboratively created 21 projects in downtown, partnering with the city and county.”
The Caterpillar hub to which McCusker refers is for the company’s Surface Mining & Technology Division, which accepted Rio Nuevo’s offer to build a new building for its headquarters to be leased back to Caterpillar for a 25-year term. The 150,000-square-foot building has helped to create between 750 and 1,000 engineering, product development and support position jobs.
The concerted efforts of Rio Nuevo’s Tax Increment Finance (TIF) District has also made several other downtown projects possible. A partnership with Bank of Tucson and development group Bourn Companies has yielded the five-story City Park project, a retail, restaurant, office and entertainment building planned for downtown’s Congress Street at what is now the site of the U.S. headquarters of Hexagon Mining. Similar partnerships are adding a new home for the Tucson Roadrunners, new AC Hotel Tucson Downtown at Broadway Boulevard and Fifth Avenue and countless dining and entertainment options.
“We made deliberate effort to collaborate to create a very sustainable effort of collaboration,” McCusker says, “and it’s been especially successful with inbound companies, which is Sun Corridor Inc.’s purpose.”
For businesses ready to relocate, expand, or start a business in Tucson — now is the time — the welcome mat awaits.
