MAG Lite > An Update from The Chair on Economic Development in Maricopa County

October 4, 2016 Meeting Summary

Message From the Chair
Scottsdale Mayor W.J. “Jim” Lane

Blogger's Note: It's so nice getting information from an Economic Development Committee that isn't first "spoon-fed" to some reporters ahead of time.

This month, the MAG Economic Development Committee (EDC) completes its sixth year. The committee remains a unique forum where a variety of topics involving economic development in our region are heard, discussed and considered for implementation in our communities. The EDC also can play a role by working with our partners in the private sector to provide data and information that will help to attract investment and cultivate job creation opportunities.

At the October meeting, we heard a presentation from the Greater Phoenix Economic Council (GPEC) regarding an emerging strategy for attracting foreign direct investment (FDI) to the region. The focused efforts of GPEC over the last several years with international prospects have yielded remarkable results in a short period of time. With a winning strategy focused on advanced technologies, communities throughout the region will have an opportunity to participate in attraction of international investment to diversify their employer base.

We also heard presentations from MAG staff on the role of transportation and the importance of transportation funding to support business attraction in the region and state. The freight viewer MAG is constructing will bring critical transportation connectivity, capacity and logistics together with economic development information. This effort will provide another informative tool that promotes the MAG region as a top place for business. The geographical proximity of our region to California, as well as to Mexico, enables us to be at the crossroads of several supply chains. As a result, our region’s ability to analyze trade flows, identify concrete opportunities and build upon them to enhance existing and emerging sectors will greatly impact our value as a domestic and international market.

As a member of GPEC’s International Leadership Council (ILC), it is encouraging to see the increasing teamwork between GPEC and MAG in the area of data analytics that will support a regional FDI initiative that will bring investment and jobs to our communities. This convergence of transportation, data, and international business development will contribute to collaborative initiatives to attract international business, such as ongoing efforts with our colleagues from Mexico to expand the Latino marketplace in the region. The DATOS presentation from the Arizona Hispanic Chamber of Commerce reminded us that the Latino market makes up a substantial part of our economy and that this growing market segment will continue to play an important role in our communities.

As we look toward collaborating around a common international strategy with GPEC’s leadership, it will be critical to identify how we can work in a coordinated fashion with state leadership. With states like Alabama, Florida, Idaho, North Carolina, Ohio, Pennsylvania and Massachusetts stepping up their presence in key targeted international markets, Arizona needs to be at the table. I look forward to working with members of the EDC, including our economic development and industry partners, to maximize those initiatives that will yield a better economy and competitive marketplace for years to come.

EDC Meeting Summary

Update on Foreign Direct Investment Efforts

Foreign Direct Investment (FDI) is a key component to the economic growth of a region. The Greater Phoenix Region has seen many efforts with an international focus but never a formal FDI strategy. International projects before 2006 represented less than one percent in the GPEC pipeline. Currently, in 2016, international projects represent 18 percent of the pipeline. In March 2016, GPEC was selected to develop a regional plan to attract and leverage FDI. The plan builds off its existing Greater Phoenix Export Plan as part of the Global Cities Initiative, a joint project of the Brookings Institution and JPMorgan Chase. This plan will be formally presented on November 17, 2016. GPEC Senior Vice President of Business Development Stephane Frijia provided an update on this effort. The November event will highlight the importance of FDI, such as bringing jobs with high wages to the region, providing economic stability, and bringing technologies from overseas, which makes the technology clusters stronger. The plan identified eight key findings, including the opportunity for our region to focus on the advanced technology sector. Next steps include identifying the best ways to implement the plan, such as developing a marketing and branding campaign, gathering marketing intelligence, partnering with key stakeholders, and focusing on strategic targets.

Freight Viewer Update

The primary focus of MAG’s Freight Plan is to review and evaluate the region's transportation system and to enhance the transportation network to facilitate freight movement. This includes improving access to and from major employment centers, which will increase economic development potential for the region. The Freight Plan was initiated in early 2016. As one of the deliverables of this project, MAG staff is developing a Freight Viewer, or interactive map, that will illustrate freight-related transportation corridors, projects, manufacturing/logistics clusters and identify economic development opportunities for the region. MAG staff provided an overview of the draft freight viewer. A key feature of this interactive online map is that it will showcase freight clusters, highlight key transportation projects, show available parcels and empty buildings, identify supply chains in those clusters and provide the contact information needed. Another component of this viewer is that it will include employment data as well.

Update on the Surface Transportation Funding Task Force

On May 12, 2016, Governor Doug Ducey signed Senate Bill 1490, Chapter Law 228, establishing the Surface Transportation Funding Task Force. Jim Rounds, with Rounds Consulting Group, is a member of the task force and provided an update on this effort. This task force will review transportation needs and recommend revenue proposals for funding interstates, state highways and local roads and streets. The task force began working in September to find solutions to funding revenue shortfalls. In the upcoming months, the group will put together a list of priorities to address transportation funding needs.
An overview of transportation needs and funding in the MAG region was also presented by MAG staff. The Phoenix metro area has been ranked by the “crowd source” WAZE traffic app as the best driving experience in the world. One of the facts that contributed to this great transportation system is the historical investment the region has made in the transportation system. The estimated transportation funding for fiscal year 2017 in Maricopa County is about 1.5 billion dollars, for which almost 48 percent will be generated at the local level. The estimated needs of the regional freeway and highway program between now and 2040 are almost 16 billion dollars. However, this is subject to the growth of the region. These needs include annual operation and maintenance costs within the corridors, illustrative projects, one-time large maintenance projects and deferred Proposition 400 projects. In addition, the transit need will depend on the level of transit that the region chooses to have. This could range between 6.3 and 32.7 billion dollars. Lastly, the estimated needs of the regional arterial-parkways are approximately 3 billion dollars.
On the funding side, since 1991 prices have gone up; however, the Arizona gas tax has remained the same at 18 cents a gallon. The gas tax represents about half of the funding for the regional transportation system. Potential transportation revenue sources include fuel tax options and sales tax options. Other alternatives include property taxes, driver’s license fees, registration fees and so-called “sin” taxes. In the upcoming months, the task force will play a key role in addressing funding issues.

Update on DATOS: The State of Arizona’s Hispanic Market

On September 27, 2016, the Arizona Hispanic Chamber of Commerce hosted DATOS: The State of Arizona's Hispanic Market event, which marked the release of the single most comprehensive report on the economic impact of Arizona's 2.1 million Hispanics. Arizona Hispanic Chamber of Commerce Vice-President Monica Villalobos and Arizona Hispanic Chamber of Commerce Director of Communications James Garcia provided an overview of the report. The DATOS report is the state's most comprehensive compilation of research about the Hispanic market in Arizona. It tracks changes in a wide range of categories, including politics, population, education, technology, media and business development. The Latino population is about one third of the state’s population. Some key findings of the Hispanic population in Arizona highlighted in the report are:

• The current estimated purchasing power is about 42 billion dollars.
• The growth in buying power among this population is expected to increase by 28.2 percent, while non-Hispanic buying power will grow 23.6 percent from 2014 to 2019.
• Since 2002, Hispanic-owned business have more than doubled.
• There is a need to increase voter turnout among Hispanics.

Update from the Arizona Commerce Authority

Arizona Commerce Authority (ACA) staff noted that this month Arizona Governor Ducey is leading a mission to one of Arizona’s largest foreign direct investment markets, Canada. October is manufacturing month and ACA is offering various workshops related to the sector. ACA continues conversations with Las Cruces regarding the border port of entry priorities. In San Luis I, a remodeling project is starting in December, which will reduce time agricultural workers wait to cross the border.

Update from the Greater Phoenix Economic Council

Greater Phoenix Economic Council (GPEC) staff commented that a food manufacturing company recently located in Goodyear, bringing 300 jobs to the region. Last month, GPEC, in partnership with NAIOP, the Commercial Real Estate Development Association, hosted the national conference here in Arizona. GPEC also promoted the Phoenix region at the International Economic Development Council conference held last month in Cleveland.

Next Meeting

Please note that the November 8, 2016, meeting of the EDC is cancelled. The next meeting of the EDC will be on Tuesday, December 6, 2016, at 11:30 a.m. at the MAG Office, 302 N. First Avenue, Phoenix, second floor, Saguaro Room.

The EDC E-Update is a monthly electronic newsletter providing information about the activities of the MAG Economic Development Committee. For questions regarding this e-mail, or to be removed from the distribution list, contact Denise McClafferty at (602) 254-6300, or via e-mail at dmcclafferty@azmag.gov or Alana Chávez-Langdon at (602) 254-6300, or via e-mail at alangdon@azmag.gov.