The East Valley region continues to be a destination for business attraction, thanks to its large population — 1.4 million people according to the economic development organization PHX East Valley Partnership — and favorable regulatory environment. The region is also home to high-paying jobs in a variety of industries such as aviation, defense and advanced manufacturing, and is expected to add another 300,000 new jobs over the next three decades.
AZRE magazine sat down with three East Valley economic development directors to learn more about how they attract businesses, the impact of the semiconductor boom and what lies ahead for their cities. The following responses have been edited for clarity and length.
Jaye O’Donnell
Economic development director
City of Mesa
AZRE: What sort of conversations do you have with businesses interested in locating in Mesa?
Jaye O’Donnell: Our sales pitch is always a business case that is compelling and customized for the company or industry that we’re recruiting. So, the points are nuanced accordingly, because a semiconductor manufacturer is going to be interested in different things than what a hospitality project is going to care about.
AZRE: The semiconductor industry is making a huge impact on the Valley’s economy right now. How is Mesa positioning itself to capture some of that growth?
JO: With the large semiconductor manufacturers like Intel and TSMC expanding here in Greater Phoenix, we are doing well in landing some of those supply chain companies that serve those bigger fish, if you will.
Mesa in general has a lot to offer. If there’s one thing we do well, it’s infrastructure. As a city, we invest heavily in streets, water, sewer and fiber, so there’s real connectivity here that makes it easy for businesses to land here and then grow. We are also close to a couple of airports.
What’s really attractive about the East Valley generally is that there are other advanced manufacturers here, meaning there is a large, highly educated workforce here. That’s usually No. 1 for these businesses as far as what they look for in a location.
AZRE: You mentioned airports, and there has been a lot of development around the Phoenix-Mesa Gateway Airport area. Can you talk about that growth?
JO: Mesa has seen unprecedented growth in Southeast Mesa. We’ve had a lot of high-tech manufacturers locate around the airport. One of them is XNRGY Climate Systems, which is in the process of expanding. Phase one was 275,000 square feet on the east side of the airport, and they’re creating more than 900 jobs, which is incredible. When all four phases are complete, the project will be 1 million square feet with over $300 million in capital investment.
AZRE: Many cities in the Valley are investing in their downtown areas. What is happening in Downtown Mesa?
JO: Downtown Mesa will continue to evolve and transform, as it has been doing the last several years. The city has invested millions of dollars and has seen some return from that, which is positive.
We’re adding residential, we’ve added ASU’s Sidney Poitier film school and the MIX Center. We’re also unveiling a new city hall, which will be a centerpiece as we continue to attract unique restaurants and shops.
We also see that Downtown Mesa has become a real innovation district with cool specialty spaces for innovators, entrepreneurs, startups and students. LaunchPoint is located there, as is Co+Hoots. There’s a lot going on downtown, and it’s getting closer to being an 18-hour destination.
AZRE: What is LaunchPoint?
JO: Mesa has invested in business incubators for more than a decade, and LaunchPoint is our technology incubator. It started in Southeast Mesa, but moved downtown about nine years ago, and it has been wildly successful. We’ve hosted more than 35 companies, and we’ve spun out some incredible companies like GT Medical Technologies, a cancer therapeutic company.
LaunchPoint has wet and dry lab spaces, as well as offices, which allows companies to not only come in and work on their technology but also figure out what they need to do to get to the next phase. We allow businesses to participate in LaunchPoint at a very affordable rate, and they also get access to all our services under our Mesa Business Builder, which is our small business assistance program and small business development service.
It’s an exciting time in Mesa, and we have significantly expanded our small business and entrepreneurship offerings because we recognize how important they are to a thriving economy here in Mesa and really every community. It all starts with small businesses.
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Mike DiDomenico
Economic development director
City of Tempe
AZRE: What are some aspects of Tempe you highlight when talking to companies?
Mike DiDomenico: Not to undersell the skill and workload of my team, but we’ve got it pretty easy. The old adage in real estate is that location is everything, and we’re blessed with a terrific location.
There’s a lot of activity in the Valley right now, and the City of Tempe is benefiting from that. If a company is working with the Arizona Commerce Authority or GPEC, they’re often looking at Tempe because we’re in the middle of everything. We’re a few minutes away from Sky Harbor International Airport, which has a big impact on companies because they’d rather not have a 45-minute commute when their people are coming in and out of town. The Valley has a robust freeway system, and we’ve got four freeways that cross our borders. We also have the light rail and streetcar.
Tempe is also home to ASU, which is a big part of our economic development efforts. They have the largest engineering school in the country with 30,000 students in that program. On top of that, GCU, U of A and NAU all have a presence in our market, along with a thriving community college system that’s also a big part of workforce development.
We also have a dense, walkable downtown, and we don’t chase away development, we encourage it — affordable housing in particular. If you’re a company looking for somewhere to locate, Tempe is a place where your workers are going to find places to live close to where they’re going to work, no matter whether they’re in the C-suite or entry level.
AZRE: Compared to other cities in the Valley, Tempe is small by landmass. What impact does that have on economic development?
MD: Our biggest challenge is that we don’t have many greenfield sites for companies looking to come to the area. Our largest undeveloped parcel is about 46 acres near Tempe Town Lake. Other than that, we’re a city that mostly does redevelopment projects. We’re about 42 square miles large and completely landlocked. We’ll grow a little bit over the next decade because there’s a small county island in the middle of Tempe that we’ll annex, but that’s our only ability to expand.
AZRE: Does that mean Tempe hasn’t been able to land companies coming to the Valley to be a part of the growing semiconductor cluster?
MD: The activity from TSMC, Intel and some of the other big players in the Valley is leading to all these ancillary companies coming here as well. I recently had lunch with Chris Camacho of GPEC, and he told me that Tempe is crushing it and we’re getting more than our share of interest and success.
He’s right. My deputy director and I went to a seminar where we pitched about 40 people from the Japanese delegation and site selectors from the Los Angeles market looking at Arizona for opportunities to locate. We showed a slide that listed all the semiconductor-related companies that are already here, and everyone in the delegation knew those businesses. It’s impressive that we’ve had such a high number of locates considering Tempe’s land restrictions. We’re doing six or seven tours a month for new companies looking to come to our city.
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Micah Miranda
Economic development director
City of Chandler
AZRE: What are some of Chandler’s advantages you highlight when speaking with businesses?
Micah Miranda: We have very simple pillars for economic success. It’s a very pro-business and politically stable community that values education. We also have a can-do attitude, and when companies are looking for locations, they want to be in a place where they know they’re going to be taken care of and not have roadblocks unnecessarily thrown in the way. We have people at that help get them open and operating quickly.
Another thing I’ll add is that we’re a financially stable community. We have extremely low taxes, and that’s predicated on our bond rating. We are AAA bond rated from all three rating institutions. There are approximately 20,000 towns in America, and we’re one of three dozen that has an AAA bond rating. If you’re looking for a stable investment location, having three independent agencies agree that Chandler is well run and knows how to take care of its money is valuable.
AZRE: Semiconductors has been the most talked about industry in the Valley in recent years. Has Chandler benefited from this?
MM: There is a semiconductor cluster that is emerging across Arizona, and it’s scaling quickly. But there have always been high-tech manufacturers in Chandler. To put it in context, we have a location quotient of 4.54, so we punch well above our weight. What that means is 19% of employment in Chandler is in advanced manufacturing, while the rest of the region is about 4%, and we’re going to continue to have that advantage as the semiconductor industry grows.
We have Intel, NXP, Microchip Technology and a whole host of high-tech companies that have long been present in Chandler, which has solidified our position as the leading place for advanced manufacturing in Arizona.
AZRE: You mentioned that there’s a high concentration of advanced manufacturing jobs in Chandler. Does that provide a sense of gravity to attract more of these roles to your community?
MM: Gravity is a good way to put it. The existing companies we have serve as the core of that gravity, and as semiconductors become increasingly more important to national and economic security, Chandler will benefit from having advocates already in our community.
These executives, real estate teams, you name it — they all talk to one another. And if you’re Intel and are continuing to invest billions of dollars into Chandler over 40-plus years, word gets out. Just recently, we had a pipe leak, and we got a note from Intel praising our team for fixing it before they even knew the problem existed.
The other thing that makes Chandler stand out is that our staff is so experienced in anticipating the needs of these companies that we’re giving them solutions prior to them even realizing they have problems. We save them time, money and frustration. If you’re setting up a new facility and you’re looking for somewhere to go, coming to a place like Chandler that has decades of experience working with these types of companies, it’s a no-brainer to land here.
