Phoenix Economy

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A new report by the Brookings Institution found that the Phoenix and Tucson metro areas are not doing as well economically as other areas in the Mountain West market. Mark Stapp, the Fred E. Taylor professor in real estate and director of the Master of Real Estate Development at the W. P. Carey School of Business at Arizona State University, will talk about the report.

TED SIMONS: Coming up next on "Arizona Horizon," we'll find out why the Phoenix economy lags other major western cities. Also tonight, remembering an Arizona lobbyist who had a big impact on education. And we'll learn what it takes to self-publish a book. Those stories next on "Arizona Horizon."

"Arizona Horizon" is made possible by contributions from the friends of Eight, members of your Arizona PBS station. Thank you.

TED SIMONS: Good evening and welcome to "Arizona Horizon," I'm Ted Simons. State Senator Kelli Ward made it official today, she is a candidate for John McCain's U.S. Senate seat. Ward says that she's taking on McCain because quote, "Arizonans deserve a senator who will fight for their values and not just go along with the beltway crowd." A McCain spokesperson says that senator looks forward to the campaign.

TED SIMONS: A Maricopa county superior court judge today dismissed a lawsuit filed by State Superintendent of public instruction Diane Douglas that involved a turf battle over the State Board of Education. Douglas claimed that she had power to fire board employees. But judge Patricia Starr ruled otherwise saying that the board has the power to hire and fire staff, not Douglas.

TED SIMONS: A new report by the Brookings Institution finds that the Phoenix and Tucson metro areas are not doing as well economically as other major western cities. Joining us now to talk about all this is ASU economist Mark Stapp. Good to see you, thanks for being here.

MARK STAPP: You're welcome.

TED SIMONS: The Brookings Institution looked at jobs, looked at housing, looked at outputs -- we're doing okay, but we're not doing as okay as those other guys. What's going on here?

MARK STAPP: Well, it's a very competitive landscape. We are competing with people who have infrastructure that's been in place sometimes longer than we've had infrastructure in place. We're a relatively young metropolitan area. And I think that some of this has to do with our maturity, and some of the struggles we have in our maturity and that process. But I think some of it has to do with things that we are not doing, that make it harder for us to compete for those jobs.

TED SIMONS: What are we not doing?

MARK STAPP: You know, you look at some of the things that employers want in employees, and what employees want in a place to live. And education, arts, culture, and some supportive infrastructure. We've done some things with the light-rail, we've done some things where we've begun developing some interesting places that make us a distinctive place in creating place-making opportunities. But we're not there yet. And I don't think that where we are right now puts us in a highly competitive position with some of these other cities.

TED SIMONS: I know you've written in an op-Ed piece that's going to appear shortly, that we're in danger of becoming a commodity. The area becoming itself a commodity as opposed to as you mentioned place.

MARK STAPP: Yeah. You know, Ted, we've talked about some of these things before. Simply trying to be the low-cost provider doesn't necessarily make you the most competitive place that. Race to the bottom to be the low-cost provider begins to attract only people that want the low-cost service. And in the environment that we're in, where we're trying to attract young people, young professionals and establish conglomerations of highly educated, motivated, creative people to drive our economy, simply being the cheapest place to do business isn't going do it for us. That's why I say trying to support things like arts, culture, education and infrastructure becomes really important. Those are the elements that help establish a place and place-making.

TED SIMONS: We should mention in this report by the Bookings Institution Denver, Salt Lake City, Provo among those doing well, Las Vegas not doing as well, we can always count on New Mexico to be behind us in some way, shape or form. They mention Phoenix is still too dependent on real estate, too dependent on the service sector. Valid arguments?

MARK STAPP: -- I think so. We've been a service sector economy for a long time. We're growing out of that. I think there are real important changes that have occurred, especially around biomedical and some of the other things. We've always had a very good defense spending economy here that's shifted because of the shifts in defense spending and so forth. And some of the tech side is emerging now even more so. But certainly on the medical side, you know, the question is, what is it that we have to offer an employer, in terms of a quality employment base of highly educated, highly motivated people that, come out of our schools and find more interesting places to go live. And part of it is making sure that we continue to mature as a distinctive, unique, interesting and culturally diverse community.

TED SIMONS: Real quickly, Phoenix ranking eighth out of ten for overall performance, unemployment is down but yet job growth slowed. What is going on with that? The unemployment rate dropping by job growth was practically nil in the first quarter.

MARK STAPP: I haven't looked below the surface of those numbers to tell you exactly why some of that is happening. Going back to the service sector side for a moment, you know, the idea that we can simply drive what we want to drive off of more call centers as people refer to, or by driving some of our tourism business, I think those markets are maturing and changing drastically. In order to be really attractive as a tourism place, we've got to do more than simply have a terrific natural environment, and have people stay in resorts.

TED SIMONS: Is it -- we're talking simply branding here, to make it not just -- obviously you want those advance manufacturing jobs and those advanced college degrees in the workplace. But just saying you're going to get there, saying you're going to do it, does that help?

MARK STAPP: No. So what is our brand? I've talked about this before. I'm not sure that we have a really definitive, well-thought-out brand and brand proposition. And what has happened to us is, our brand has been handed to us by default through actions of our legislature that get plastered all over the news, by other kinds of things that we don't like to recognize, as the things that make us who we are. I think there's a lot going on the very local level, we need to have more going on, on the state level to try and drive some of these brand opportunities. We need a really distinctive brand that we don't have right now.

TED SIMONS: What does Phoenix take from this report, the Phoenix metro area?

MARK STAPP: I think that's one of the things it takes. One is we really do need to establish that brand, who are we? A lot of people refer to Austin, keep Austin weird. That's something very distinctive and they do a lot around that idea of maintaining that incredible cultural diversity, and the art and music field. In addition to doing the other things. These are not mutually exclusive. We're not going get these other kinds of jobs unless we do these things over here that make us really distinctive. That op-Ed piece, I referred to Gertrude Stein and her reference to Oakland where she said, there's no there, there. What is our there? That is so distinctive, that's unique and that is genuine? We see elements of it developing where we've got Roosevelt row starting to emerge, -- Grand Avenue, -- central and Camelback, Sunny Slope and downtown Gilbert and Chandler, we need lots of those. We were just in New York, we were in Lower Manhattan in the lower east side. And young people everywhere and it's dynamic. Those were the slums. And the number of restaurant opportunities and food and beverage and entertainment was just amazing but it's very distinctive.

TED SIMONS: Well, we'll see if Phoenix can get that distinction and certainly get a brand going. Thank you so much, interesting stuff. Good to have you here.

MARK STAPP: Thank you.

Mark Stapp : The Fred E. Taylor professor in real estate and director of the Master of Real Estate Development at the W. P. Carey School of Business at Arizona State University

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