August 27, 2004 Phoenix, Arizona

Volume 7 | Issue 4

Why would you want to call Phoenix home? How about year 'round nice weather and a business environment that foster growth and opportunity?

History tells of a Spanish Franciscan friar, Marcos de Niza, who was the first to explore what would become Arizona in 1539 in search of the mythical Seven Cities of Gold. He was only off 465 years, because if the good friar were to venture forth on his expedition today, he’d find one of those cities basking in the golden glow of its incredible meteoric success.

The Greater Phoenix area is not a desert wasteland, a place for cactus and scorpion and cowboys and Indians. It is, in fact, a thriving mecca that contains 14 dynamic communities, each with its own distinct characteristics, ranging in size from 5,000 to 1.4 million people. Its splendid climate has seduced people from all over the country; its magnificent landscape has compelled paintings and poetry. But it is the convergence of other factors – good schools, affordable housing, and a progressive mindset – that has catapulted Phoenix into the position as one of the nation’s fastest-growing regions for the last 50 years. Currently more than 3.4 million people, with a median age of 32.9 years, call Greater Phoenix home.

Innovative community leaders have managed the region’s growth and continue to maintain its celebrated quality of life. This commitment to excellence helps Greater Phoenix stand apart from other major metropolitan areas.

“We try to make people aware of the advantages here,” says Jack Swonson, Executive Board Chairman of the Greater Phoenix Economic Council (GPEC). “People tend to think of this as a desert community but in fact, it’s not. Many far-sighted pioneers did amazing things and built canals and reservoirs to bring water into the area and to protect the aquifers.” In fact, through its various water management programs, Phoenix has been able to sustain and grow into a viable economic force.

As vice president of USAA, a military insurance provider, Swonson recalls the site search his company performed when looking to relocate: All roads ended in Phoenix. “We were attracted by the labor pool – it is good sized and well skilled with good work ethics,” he explains. “One of the most attractive features was the reasonable cost of living and doing business. The legal and regulatory climate is also helpful.”

The area features a host of business amenities as well, including an international and six regional airports. A solid transportation structure includes major interstates such as I-10 that runs from Los Angeles to Florida and right through another growth area, San Antonio. Rail lines include Transcontinental and Union Pacific, which run 60 trains a day. Recreational features include representation in all four of the major professional sports, as well as the Phoenix International Raceway and more than 230 golf courses and several lakes for boating and water recreation activities.

“The population growth has continued unabated, even in the economic downturn,” Swonson adds. “Businesses here continue to expand.”

Managed growth
To facilitate the growth, GPEC and other organizations collaborated and formed a business coalition to work on making the area even more attractive to business. The jointure has fostered growth in the technology sector and cooperation among businesses and nearby universities: Arizona State University, Northern Arizona University and the University of Arizona, Tucson, as well as 10 major community colleges.

Additionally, in 2002, GPEC launched a 10-year regional economic development strategy that outlines how the region can build a focused economic identity and increase the quality of jobs in Greater Phoenix. The overall goal of the strategy is to create one out of every six jobs in a high-wage industry by the end of the 10-year period. The strategy has enjoyed increasing success around the region. The key objectives of this strategy are to shift the development approach from quantity to quality growth; organize and execute a comprehensive regional strategy and plan; improve education, transportation, and tax/fiscal policy and align with the economic development strategy.

In 2004, GPEC commenced several additional initiatives to improve its competitive stance. These include partnering with IBM Global Location Strategies to better understand the screening its region undergoes in the site selection process, and to conduct a survey of economic development organizations in its peer competitor regions.
But while Phoenix may have competitors, it has few peers, for there are not many areas that offer the affordable economic mix and the vibrant business environment. Many businesses that have located into Greater Phoenix believe their operations are the better for it. And some have also learned that it’s not a bad thing to be able to barbecue all year ‘round.

Where the grill’s never cold
Calling Phoenix home since 1986, Southwest Specialty Foods was started by Jeff Jacobs who wanted to devise a food product line based on his family’s BBQ sauce recipe, served in their restaurant up north. “His dad used the sauce on their chicken and ribs,” explains Marketing Representative Linda Jacobsen, Jacobs’ wife. “He was trying to find a place where people barbecued all year and had moved here to assist a family friend.” Experiencing the climate first-hand that allowed 12-month grilling outdoors, Jacobs decided he’d found his utopia.

The company’s original name was Señior Jake’s but Jacobs switched to Southwest Specialty Foods in 1988 and changed the name of his BBQ sauce to reflect its two levels of intensity: BBQ Sauce from Hell and Candy Ass. This, says Jacobsen, got the company noticed on supermarket shelves. “We began selling to supermarket chains and we got noticed because of our unique packaging,” she adds.

Acquiring 80 acres in Goodyear, Southwest Specialty Foods chose the location because it allowed the company to grow its own habanero peppers – 200,000 are in the ground now – used in a variety of its 150 different food items that include hot sauces, and spice blends. “We have the hottest commercially grown pepper,” she says.
Concerning the region’s attributes, she adds, “This is such an accessible city; it’s close to Los Angeles, which makes it inexpensive to move containers to port. The community has grown so much and it’s a great environment for our business.”

Medical advances
With 132,000 employees in 32 countries, Medtronic has a very visible presence as a medical device manufacturer; its operation in Phoenix was founded because of the close proximity to Motorola, which provides the microelectronics for implantable medical devices. With an employee count of 1,400 in Phoenix, its complex consists of nine buildings with a total footprint of 440,000 square feet.

In the 30 years since Medtronic targeted Phoenix for its medical device operations, the company has witnessed significant growth in the implant medical device industry. Says Director of Strategic Technology Glen Vaughn, the operation is, in effect, a semiconductor manufacturer inside of a medical device organization; the semiconductor industry, he adds, has a significant presence in the Phoenix region supporting a host of cluster industries, including biosciences.

The proximity of major universities as well as a highly skilled, professional workforce are two main reasons for maintaining its facilities in Phoenix, Vaughn says, adding, “Arizona is a unique state: In three hours you can be at 12,000 feet in snow or in an hour’s flight on the beach outside of San Diego. And because of the climate there’s a strong recreational base.”

To space and beyond
Dave Thompson, founder, president and CEO of satellite manufacturer Spectrum Astro, said he started his company in Los Angeles 16 years ago, and moved to Phoenix in 1992. “We moved here because of the high costs in California,” he says. “It was a great move.”

Thompson had been a research and development officer in the Air Force, and was an Air Force Academy graduate, with a master’s degree from Stanford. He spent 10 years involved in the buying side of satellites, and witnessed many inefficiencies in manufacturing. “I was focused on smaller satellites,” he explains, “and we saw a niche in the 500-pound class.” Thompson’s vision paid off: The $150 million company has done a billion dollars worth of business since its inception.

Initially, Spectrum Astro’s satellites were used for missile defense research to test new technology, then eventually its equipment was put to use in planetary exploration. For example: The company teamed with the University of California, Berkeley to provide the RHESSI spacecraft for NASA Goddard’s Small Explorer (SMEX) series of space science missions. RHESSI uses a sun-pointed, spin-stabilized spacecraft to investigate the physics of particle acceleration and energy release in solar flares, observing X-ray and gamma ray emissions with a combination of high-resolution imaging and spectroscopy.

Another program in which Spectrum Astro is prime contractor is called Coriolis. This is an Air Force Space Test Program (SMC Det 12 ST) and Space and Naval Warfare Systems Command (SPAWAR) three-year meteorological science mission to demonstrate the viability of using polarimetry to measure ocean surface wind speed and direction from space. Spectrum Astro has Total Space Vehicle Responsibility (TSVR), which includes spacecraft design, manufacture, integration and test; experiment integration; space vehicle verification; launch processing; and on-orbit checkout.

Needless to say, these important satellite programs received a boost when Spectrum Astro recently acquired by General Dynamics, decided to move to Phoenix. “When we moved to Arizona in 1992 our medical premiums went down 40 percent and workers compensation costs went down 50 percent,” Thompson recalls, adding cost of land was equally as reasonable, at 1.65 per square foot as opposed to California, where it was $27 a square foot. Costs aside, he adds, the high standard of living in itself makes Phoenix an attractive place to live. “The education system is great,” he says, “and we have many wonderful family oriented communities.”

For more information on locating a business in the Greater Phoenix region, contact: Greater Phoenix Economic Council, 2 North Central Avenue, Suite 2500 Phoenix, AZ 85004 (602) 262-8609 Fax (602) 256-7744 www.gpec.org

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