Economic Development Roundtable

Three of the State’s top economic development leaders, Barry Broome, CEO and President of the Greater Phoenix Economic Council, Barry Albrecht, CEO of Central Arizona Regional Economic Development, and Joe Snell, President and CEO of Tucson Regional Economic Opportunities, talk about what they’re doing to create and retain jobs, and how Arizona can become more attractive to business.

Transcript:

TED SIMONS: ARIZONA'S BUDGET CRISIS, JOB LOSSES AND EMPTY HOUSES ARE CLEAR INDICATORS THAT SOMETHING MUST BE DONE TO DIVERSIFY THE STATE'S ECONOMY. TONIGHT, ECONOMIC DEVELOPMENT. LEADERS ARE HERE TO TALK ABOUT PLANS OF ACTION THEY THINK THE STATE SHOULD TAKE. JOINING US IS BARRY BROOME, PRESIDENT AND CEO OF G-PEC, THE GREATER PHOENIX ECONOMIC COUNCIL, JOE SNELL, PRESIDENT AND CEO OF TUCSON REGIONAL ECONOMIC OPPORTUNITIES AND BARRY ALBRECHT,EXECUTIVE DIRECTOR AND CHIEF OPERATING OFFICER FOR THE CENTRAL ARIZONA REGIONAL ECONOMIC DEVELOPMENT FOUNDATION. THANK YOU, ALL, FOR JOINING US TONIGHT ON "HORIZON."

ALL: THANK YOU.

TED SIMONS: BARRY, LET'S START WITH YOU. IS ARIZONA PREPARED, PREPARED FOR AN ECONOMIC TURNAROUND?

BARRY BROOME: I WOULD SAY WE'RE NOT PREPARED. SOME OF THIS HAS TO DO WITH CLARITY OF THOUGHT, YOU KNOW, TAKING A CLOSE LOOK AT WHERE THE RECOVERY IS GOING TO OCCUR AND WHAT THE UNIQUE POSITION THE STATE IS TO TAKE ADVANTAGE OF RECOVERY, WHAT THE MECHANICS ARE THE EXECUTION, WHAT TYPE OF DELIVERY SYSTEM YOU NEED,YOU KNOW, I WOULD SAY WE'RE NOT IN A POSITION ON THAT SUBJECT MATTER. I DON'T KNOW IF ANY OF MY COLLEAGUES WANT TO COMMENT ON THAT.

TED SIMONS: DO YOU AGREE WITH THAT?

JOE SNELL: I AGREE. IT COMES DOWN TO ARE WE COMPETITIVE? ARE WE OPERATING AT A COMPETITIVE FRAMEWORK? I WOULD SAY AS PAINFUL AS IT IS, NO. AT THE END OF THE DAY, WE HAVE TO EXAMINE WHAT OUR TAX POLICY, WHETHER IT'S BUSINESS FRIENDLY, WHETHER WE HAVE THE RIGHT INFRASTRUCTURE, WHETHER WE'RE SUPPORTING BOTH HIGHER EDUCATION IN K-12 TO ADEQUATE LEVELS TO MAKE SURE BUSINESSES CAN COMPETE. I'D SAY RIGHT NOW THE OUTSIDE WORLD IS PROBABLY WEIGHING IN. THE ANSWER IS, NO, WE'VE GOT SOME WORK TO DO.

TED SIMONS: IT DOESN'T SOUND VERY ENCOURAGING. HAVING SOME WORK TO DO DOES BUT ARE WE READY FOR THE WORK?

BARRY ALBRECHT: THE FACT OF IT IS THAT DURING ECONOMIC DEVELOPMENT HERE IN -- I'VE BEEN DOING ECONOMIC DEVELOPMENT HERE IN ARIZONA FOR ALMOST 20 YEARS. WE'VE EVER ABOUT ANYONE SO CLOSE IN THE WAY WE DO BUSINESS IN ECONOMIC DEVELOPMENT IN THE STATE. WE'VE GOT THE ATTENTION OF THE GOVERNOR'S OFFICE AND THE LEGISLATORS LOOKING AND COMPARING ARIZONA TO OTHER STATES. WE CLEARLY CANNOT COMPETE, COMPARED TO OTHER STATES LIKE TEXAS, FLORIDA, VIRGINIA, WE'RE -- WE'RE AS A STATE, WE'RE AT AN AIR SHOW WITH A KITE. WE JUST ARE NOT COMPETITIVE.

TED SIMONS: WHAT DO WE NEED TO DO TO GET BACK IN THE AIR SHOW?

BARRY ALBRECHT: WELL, WE -- LET'S LOOK AT SOME GOOD EXAMPLES. UM, THERE'S SOME SENIOR -- FOR EXAMPLE TEXAS. ECONOMIC DEVELOPMENT SAY PRIORITY AT THE GOVERNOR'S LEVEL. THEY NO LONGER HAVE A DEPARTMENT OF COMMERCE. THEY HAVE AN OFFICE IN THE GOVERNMENT WITH THE GOVERNOR THAT IS COMMITTED AND THEIR PRIORITY IS JOB CREATION. THEY HAVE SET ASIDE TOOLS, FOR EXAMPLE, AT THE -- THEY'VE CREATED LEGISLATION THAT ACTUALLY PROVIDES CITIES THAT ALLOWS THEM TO CHARGE A HALF CENT SALES TAX DEDICATED TO ECONOMIC DEVELOPMENT SO THEY CAN DRIVE THEIR OWN DESTINY. ADDITIONALLY, THEY ALSO HAVE OVER A $200 MILLION JOB CREATION BUDGET. $200 MILLION! THAT'S A SUBSTANTIAL INVESTMENT. TODAY, LOOK AT TEXAS, THEY'RE ONE OF THE MOST STABLE ECONOMIES AS A STATE IN THE COUNTRY. AND THAT'S BECAUSE THEY MADE THE COMMITMENT FIVE OR 10 YEARS AGO.

BARRY BROOME: AND I THINK THIS IS REALLY IMPORTANT. THIS IS ABOUT BEING A STUDENT OF ECONOMIES. I THINK, YOU KNOW, YOU KNOW, I REALLY WANT TO APPLAUD KIRK ADAMS, SPEAKER OF THE HOUSE, FOR RETAINING POLACK AND TAKING A LOOK AT WHAT ARIZONA NEEDS TO DO IN BASE INDUSTRIES. THERE'S A LOT OF IMPROVED POLICY IN HIS MEASURE THAT IS NOW SITTING IN THE SENATE WAITING FOR A HEARING. ASIDE FROM THAT, JUST IN GENERAL, YOU KNOW, THE CULTURE OF OUR STATE AND THE BODY OF POLITICS IN OUR STATE ISN'T ABOUT GETTING BETTER AND WHEN YOU BRING UP TEXAS, THE FIRST THING A LEGISLATOR WILL TELL YOU IS, WELL WE'RE NOT TEXAS. WHAT THEY DON'T UNDERSTAND IS THE OVERWHELMING LEADER RIGHT NOW IN RENEWABLE ENERGY IN THE UNITED STATES OF AMERICA IS TEXAS. TEXAS IS THE NATION'S LEADER IN RENEWABLE ENERGY, NOT JUST OIL. IT'S ABOUT A CULTURE WHEN WE HAD TEXAS LEADERSHIP IN HERE, ONE OF THE THINGS THAT I ALWAYS JOKE ABOUT IS YOU SEE T-SHIRTS MADE, DON'T MESS WITH TEXAS. I'D LOVE TO SEE A T-SHIRT MADE, DON'T MESS WITH ARIZONA.

JOE SNELL: I AGREE WITH YOU, IT'S ABOUT INTENT. THAT'S WHAT YOU'RE SAYING, I THINK. WE'VE HAD IT EASY IN ARIZONA. OUR ECONOMY HAS GROWN BECAUSE OF THE SUNSHINE AND BECAUSE OF A LOT OF MIGRATION. THE REALITY IS I THINK WHAT YOU'RE SAYING IS WE HAVE TO GO IN IT NOW. WE HAVE THE TO HAVE INTENT. ONE OF THE BEST EXAMPLES OF THAT IS WE TEND TO -- YOU SAID, YOU KNOW, BASE EMPLOYERS OR PRIMARY JOBS OR WHATEVER YOU WANT TO CALL IT ANYONE WHO IS EXPORTING A PRODUCT AND IMPORTING NEW CAPITAL, NEW WEALTH, HAS GOT TO BE A PRIORITY FOR US. WE CAN'T TREAT ALL BUSINESSES THE SAME. UNFORTUNATELY, WE DO. WE TREAT ALL BUSINESSES WHETHER THEY'RE A LOCAL SHOE SHINE SHOP OR A MASSIVE MANUFACTURER LIKE RAYTHEON OR INTEL, WE PUT THEM ON THE SAME PAGE.

TED SIMONS: HOW DO YOU DO THAT? HOW DO YOU EMPHASIZE WEALTH CREATION AS OPPOSED TO SIMPLE JOB CREATION? OR SHOULD YOU EMPHASIZE WEALTH CREATION OVER JOB CREATION?

JOE SNELL: I DON'T THINK ALL JOBS ARE CREATED EQUAL. I THINK YOU EMPHASIZE IT BY FOCUSING ON THE BASE INDUSTRIES THAT HAVE A MULTIPLIER EFFECT THAT CREATE ADDITIONAL JOBS. LET ME PICK ON RAYTHEON DOWN IN THE TUCSON AREA. YOU KNOW, A COMPANY WHY WE SPEND SO MUCH TIME ON RAYTHEON, I KNOW BARRY DOES UP HERE IN PHOENIX, THE IMPACT IS $3 BILLION TO ARIZONA ON AN ANNUAL BASIS. 13,000 DIRECT EMPLOYEES AND 14,000 INDIRECT EMPLOYEES. AT THE END OF THE DAY, WE SHOULD HAVE A TOP 10 LIST. AT THE END OF THE DAY WHETHER IT'S RAYTHEON OR INTEL, WHAT HAVE WE DONE FOR RAYTHEON.

BARRY BROOME: IMPORTANT POINT, JOE, YOU'RE MAKING IS INTEL, FOR INSTANCE WHEN YOU GO DOWN TO THE LEGISLATURE, YOU KNOW, THEY LOVE TO MURMUR THAT THEY'RE GOING TO TAKE A SHOT AT INTEL. INTEL IS CREATING 10,000 TO 11,000 JOBS THAT PAY $122,000 A YEAR. WHY WOULD SOMETHING LIKE THAT EVER EXIT THE LIPS OF A POLICY MAKER IN ARIZONA? THE ONE THING JOE AND I HAVE TALKED ABOUT MANY A TIMES AND BARRY IS WE NEED TO TREAT INDUSTRY FAIRLY, NOT EQUALLY. LIKE A COACH SAYING I TREAT EVERYONE FAIRLY BUT THE STAR QUARTERBACK MAY GET DIFFERENT TREATMENT. INTEL HAS OVER 1,700 SMALL BUSINESS SUPPLIER RELATIONSHIPS HERE IN ARIZONA. I'M SURE RAYTHEON HAS A SIMILAR STATISTIC. YOU KNOW, THE AMAZING THING TOO, HERE IN ARIZONA AROUND SMALL BUSINESSES, ABOUT 60% OF ARIZONA SMALL BUSINESSES ARE EXPORT INDUSTRIES. BASE INDUSTRIES. SO WHEN YOU BUILD POLICY TOWARDS AN INTEL, TOWARDS A RAYTHEON, NOT ONLY DO YOU GET BETTER JOBS AND RETAIN JOBS BUT THAT SUPPLY CHAIN FEEDS RIGHT TO SMALL BUSINESSES IN ARIZONA AND GROWING SMALL BUSINESS THAT ARE EXPORT INDUSTRIES IS THE RIGHT SMALL BUSINESS STRATEGY IN ARIZONA.

JOE SNELL: AND THAT CREATES WEALTH.

BARRY BROOME: AND THAT CREATES WEALTH.

TED SIMONS: INDEED. CAN YOU DO THAT, THOUGH, WITHOUT FORCING THE ISSUE TO THE POINT WITH WHERE SOMETHING ARTIFICIAL GROWS AND IT'S JUST AS TENUOUS AND JUST AS DELICATE AS WHAT WE'VE BEEN GOING THROUGH WITH THE BOOM AND BUST CYCLE HERE FOR GOODNESS KNOWS HOW LONG?

BARRY ALBRECHT: I THINK YOU MADE A GOT DISTINCTION A LITTLE WHILE AGO, THE DIFFERENCE BETWEEN WEALTH AND JOB CREATION. WE'RE FEELING THE PAIN NOW. ARIZONA FOCUSED NOT JUST ON PRIMARY JOBS BUT WE EMBRACE TOURISM ANOTHER AND WE FACTORS AND THE RETIREMENT COMMUNITIES, AS WE SHOULD, BUT WE DIDN'T DEDICATE OUR INVESTMENT INTO PRIMARY JOB CREATION. TOURISM IS GOOD BUSINESS FOR ARIZONA. NO DOUBT. BUT WHEN YOU LOOK AT A RESORT AND THE PROFILE OF THE JOBS THAT A RESORT PROVIDES, YOU'LL LOOK AT OVER 90% OF THE EMPLOYEES ARE PART-TIME MINIMUM WAGE. THOSE AREN'T HOME BUYERS. THOSE AREN'T THE PEOPLE THAT JUSTIFY EXPANDING THE MEDICAL SERVICES AT OUR HOSPITAL. WHAT WE NEED TO DO IS BRING IN THE PRIMARY JOBS THAT INSPIRES ENTREPRENEURIALSHIP OF THE SPINOFF BUSINESS THAT HAS WILL EXPORT THOSE PRODUCTS.

TED SIMONS: HOW BEST DO WE DO THAT? DO WE MUSCLE UP THE COMMERCE DEPARTMENT OR START GETTING PUBLIC-PRIVATE PARTNERSHIPS THAT SUPERSEDE WHAT THE LAWMAKERS ARE TRYING TO DO OR THINK IT'S THEIR RESPONSIBILITY TO DO? WHERE DO WE GO? WHAT DO WE DO?

JOE SNELL: YES, YES, YES, YES. I'LL LET THESE GUYS JUMP IN I THINK, FIRST -- AND I WOULD SPEAK PROBABLY FOR THE THREE OF US, I THINK WE HAVE A PRETTY GOOD SENSE OF WHICH INDUSTRIES ARE GOING TO HELP SHAPE OUR FUTURE WHETHER THAT BE IN THE SOLAR SIDE OR DEFENSE INDUSTRIES OR BIO-TECH. AND I THINK WE ALL NEED TO GET ON THE SAME PAGE. WE NEED THE STATE TO DO THAT. WE NEED TO BE WORKING ARM TO ARM AND WE CAN'T HAVE SOMEONE OFF IN LEFT FIELD WHILE WE'RE IN RIGHT FIELD THAT KIND OF THING. I THINK WE'RE GOING TO HAVE TO LOOK AT A SYSTEM OVERHAUL. WE'RE GOING TO HAVE TO LOOK AT TORT REFORM, A TAX OVERHAUL, BECAUSE WE'VE GOT SOME AGGRESSIVE TAX STRUCTURE IN THIS STATE. WE HAVE GOT A SITUATION WHERE WE TALK ABOUT BEING BUSINESS-FRIENDLY. WE PUT A -- IN MY OPINION, A LARGE BURDEN ON THE CORPORATION AND MAYBE IT'S TIME TO SHARE THAT BURDEN WITH RESIDENTS. AND JUST LOOKING THAT THE KIND OF STUFF.

UNKNOWN: THAT'S RIGHT.

JOE SNELL: I THINK IT'S BEING VERY DELIBERATE IN UNDERSTANDING THAT I THINK WE FORGET SOMETIMES THAT THE OUTSIDE WORLD IS WATCHING OUR VERY MOVE. IT'S IMPORTANT TO REALIZE THAT EVERY DECISION WE MAKE HAS A LONG-TERM CONSEQUENCE AND PEOPLE ARE WATCHING. YOU GUYS MIGHT JUMP IN.

TED SIMONS: YEAH, PLEASE, PLEASE DO.

BARRY BROOME: A COUPLE OF THINGS. THERE'S A REALLY IMPORTANT POINT. NUMBER ONE, WORK TO YOUR STRENGTHS. WHAT ARE THE INDUSTRIES THAT ARE GROWING? WHAT ARE YOUR STRENGTHS? GOOD NEWS, ARIZONA HAS STRENGTHS IN DEFENSE, STRENGTHS IN HEALTH CARE AND STRENGTHS IN SOLAR RENEWABLE BUT YOU HAVE TO WORK ON THESE STRENGTHS AND MAKE A COMMITMENT TO IT. ABOUT THE WHOLE WORLD WATCHING, A GOOD EXAMPLE IS THE WHOLE RENEWABLE INDUSTRY HERE IN ARIZONA. GOODYEAR ARIZONA WAS SELECTED FOR THEIR NORTH AMERICAN MANUFACTURING LOGISTICS CENTER. TODAY, A BILL'S BEEN INTRODUCED TO ELIMINATE ARIZONA'S COMPETITIVE POSITION IN SOLAR. IT'S HOUSE BILL, I THINK, 2701. ONE OF THE SPONSORS SAY STATE REP FROM GOODYEAR WHERE SUN TECH IS LOCATED AND SUN TECH NOW ANNOUNCED TODAY THAT IF THAT BILL MOVES FORWARD, THEY'RE GOING TO LEAVE ARIZONA AND THE REPRESENTATIVE FROM THAT CITY IS SPONSORING THAT BILL, BECAUSE HIS POLITICAL PHILOSOPHY IS BIGGER THAN THE JOB CREATION THAT SUN TECH IS GOING TO DO FOR THE DISTRICT. THESE ARE THE KINDS OF THINGS THAT NEEDS TO GET ERODED. THIS IS ABOUT BUSINESS, BEING PRACTICAL AND BEING CONSISTENT AND ABOUT COMPETITIVENESS. IT'S REALLY NOT ABOUT IDEOLOGY AND PHILOSOPHY. IT'S ABOUT COMPETITIVENESS. WE NEED TO MOVE TOWARDS THAT DIRECTION.

TED SIMONS: SO MUCH OF WHAT IS GOING ON RIGHT NOW AT THE STATE CAPITOL IS ABOUT IDEOLOGY AND POLITICS. LET'S GET DOWN TO THE BRASS TAX HERE. IS ARIZONA CAPABLE? IS IT READY POLITICALLY? IS THE WILL THERE POLITICALLY TO DO WHAT NORTH CAROLINA, TEXAS, FLORIDA, ALL THESE OTHER REGIONS HAVE DONE?

BARRY ALBRECHT: WELL, I'LL TELL YOU, THE STATE RIGHT NOW YOU, LIKE I SAID EARLIER, HAS NEVER BEEN SO CLOSE, BECAUSE NOW WE'RE STARTING TO SEE THE RESULTS OF OUR FAILURES OF THE PAST. OUR ECONOMY HAS BEEN BASICALLY BREACHED. RIGHT NOW, WE DO NOT HAVE ANY BUSINESS ARGUMENT OR THE ARIZONA DIRTY WORD, INCENTIVES, TO BRING AND KEEP THE INDUSTRIES WE HAVE IN ARIZONA RIGHT NOW. JUST IN THE LAST SEVEN MONTHS, WE'VE LOST TWO HIGH-TECH UNMANED AERIAL VIEW COMPANIES TO UTAH BECAUSE THEY MADE A BUSINESS ARGUMENT TO MOVE THEM OUT OF ARIZONA. AND TEXAS AND THESE OTHER STATES ARE GOING TO CONTINUE TO PURSUE OUR COMPANIES UNTIL WE CREATE THE BUSINESS ARGUMENT TO NOT ONLY KEEP THEM HERE BUT BRING IN OTHER NEW INDUSTRIES.

JOE SNELL: YOU KNOW, IF -- IF -- GREAT QUESTION. IF NOT NOW, WHEN? I MEAN, WE'RE IN THE HEELS OF THE WORST RECESSION THAT I THINK THE STATE HAS EVER SEEN. I MEAN, I'VE NOT BEEN HERE FOR 100 YEARS BUT IF NOT, I THINK WE'RE AT A REAL MAJOR CROSSROADS. WE EITHER HAVE TO DECIDE TO GET IN THE GAME AND GET COMPETITIVE OR MY FEAR -- AND I DON'T KNOW IF MY COLLEAGUES SHARE IT -- BUT MY FEAR IS IT'S GOING TO BE LOSS WE MIGHT NOT EVER RECOVER FROM.

BARRY ALBRECHT: IF WE DON'T DO ANYTHING THIS YEAR, WE'LL BE IN THE SAME POSITION IN OUR ECONOMY TODAY FIVE YEARS FROM NOW. WHEN DO WE MAKE THE CHANGE? IT'S DIFFICULT TO MAKE THESE CHANGES. JUST BECAUSE IT'S DIFFICULT DOESN'T MEAN IT CAN'T BE DONE.

TED SIMONS: OK, IT CAN BE DONE AS WE'VE SEEN IN A VERY POOR AREA OF NORTH CAROLINA WHICH IS NOW A RESEARCH TRIANGLE AND AN EXAMPLE TO ALL THIS WAS DIRT POOR BEFORE THIS PROJECT GOT GOING SO IT CAN BE DONE. DOES ARIZONA HAVE THE TIME, BARRY TO WAIT FOR THE KIND OF DEVELOPMENT THEY SAW IN NORTH CAROLINA OR IN OTHER REGIONS? DO WE HAVE THE TIME TO WAIT FOR THAT KIND OF DEVELOPMENT?

BARRY BROOME: WELL, WE DON'T BUT IN SOME CASES -- YOU KNOW, IT'S A MIX OF SHORT-TERM AND LONG-TERM STRATEGIES. YOU KNOW, ONE OF THE THINGS THAT MAKES THIS BILL BEING INTRODUCED IN THE HOUSE THAT'S SO DISCERNING IS ENERGY IS A HUGE INDUSTRY AND THERE'S -- PEOPLE ARE JUST STARTING TO GET A HANDLE ON HOW HUGE A DOMESTIC INDUSTRY COULD BE FOR THE UNITED STATES OF AMERICA BECAUSE WE'VE BEEN IMPORTING OIL FROM ROGUE STATES THAT AREN'T FRIENDS OF THE UNITED STATES AND, YOU KNOW, IT'S ABOUT SITTING DOWN SAYING HOW DO WE WIN TODAY? HOW DO WE WIN LONG TERM? WHAT'S THE MIX OF ACTIVITIES THAT DO THAT. I THINK ON THE WILL SIDE, YOU KNOW, AND I THINK THIS IS REALLY IMPORTANT AND I TALK A LOT ABOUT THIS WITH MY CHAIRMAN, MIKE BEDWELL, THE WILL HAS TO BE DRIVEN BY THE BUSINESS LEADERSHIP. AND THERE'S TOO MANY BUSINESS LEADERS IN ARIZONA SITTING ON THE SIDELINES NOT IN THE TRENCHES WORKING WITH THE POLICYMAKERS TO MAKE A DIFFERENCE. I MEAN, MOST CREATIVE, SMART -- IF YOU GO INTO THE STATES WE'RE TALKING ABOUT, THEIR BUSINESS LEADERSHIP ARE INTIMATELY ENGAGED IN A VERY SERIOUS WAY WITH REAL RESOURCES AND REAL HOMEWORK, REAL EXPERTISE AND GUIDING THE POLICYMAKERS TO A COMPETITIVE PATH. ARIZONA DOESN'T HAVE A BUSINESS LEADERSHIP ENGAGED LIKE IT SHOULD BE EITHER THIS ALL CAN'T BE PLACED AT THE FEET OF POLICYMAKERS.

TED SIMONS: VERY QUICKLY, YOU HAVE 30 SECONDS LEFT. YES OR NO, WILL WE BE HAVING THE SAME DISCUSSION A YEAR FROM NOW?

BARRY BROOM: YES.

TED SIMONS: WHAT DO YOU THINK?

JOE SNELL: YES, BUT HOPEFULLY NOT.

TED SIMONS: WHAT DO YOU THINK?

BARRY ALBRECHT: I'M NOT WAITING FOR THE STATE TO GUIDE OUR DESTINY. WE'RE GOING TO CREATE THE KIND OF PROGRAMS WE NEED TO DO TODAY SO WE CAN HAVE THE JOBS FOR TOMORROW.

TED SIMONS: GENTLEMEN, THANK YOU VERY MUCH.