Archive for July, 2010
By Joe Higgins and Chris DeSimone, Inside Tucson Business
Published on Friday, July 30th, 2010
A couple columns back, we talked about business groups and organizations that are having a positive impact on our region. A subsequent letter to the editor asked why we had neglected to mention our economic development organization Tucson Regional Economic Opporunties (TREO).
As it turns out, some economic developments in our region which gives us an opportunity to circle back around to the “Where’s TREO?” question.
First some background on TREO. It was founded out of the ashes of the Greater Tucson Economic Council (GTEC), which had started with grand plans but ended up focusing on landing call centers because the local workforce matched the industry. TREO was started in 2005 with a “super group” of employees including some from the economic developments staffs of the City of Tucson and Pima County. Its major funding came from those two government entities and Mayor Bob Walkup and County Supervisor Sharon Bronson were seated on the board to watch over the local tax dollars. Print this story
Fast-forward five years later. Raytheon Missile Systems announced two weeks ago it was passing over Tucson for an expansion and putting 300 new, high-paying jobs in Huntsville, Ala. Tucson was one of three cities on the short-list but didn’t get the nod.
Apparently Alabama offered workforce training incentives, construction/rent incentives and they put together a package that was a better fit for the expansion.
The real story here is that the decision by Raytheon is a tipping point in our region’s future. What does Hunstville have that Tucson doesn’t? A large military base? A major university?
The seeds of Huntsville’s winning this effort were planted 20 or more years ago with a vision and leaders in the government and business sector that set the table for success. Tucson never took the time to plant those seeds. Instead our seeds were planted in environmental policies and bolstering neighborhood associations.
The team that Hunstville put together kicked our fannies! As reported in Inside Tucson Business, “Brian Hilson, president of the Huntsville/Madison County Chamber of Commerce which is also the area’s economic development organization, said with every project that comes their way, a team is put together comprised of state and local leaders to meet with a company and learn their needs. “That team usually includes the governor, staff within the Alabama development office, chamber of commerce, city and county representatives, the mayor and the chair of our county commission and others on a need-to-know basis,” he said. “In the company’s eyes, they see us working and speaking as one team. That’s the only way we know to approach it.””
Contrast that with Tucson’s effort. Mayor Walkup, a former Raytheon executive and still a TREO board member, said he left the Raytheon negotiations to TREO. He also said he wasn’t made aware of the search when it started 18 months ago, saying he relied on Raytheon senior executives to tell TREO and for TREO to tell him.
Do you see the problem with Tucson’s approach compared to Huntsville’s? Do you see why Tucson continues to lose out on opportunities? Do you see how vulnerable the Tucson region is when there are sharp teams like Alabama’s looking to poach our businesses?
Where is Tucson’s “team?”
• Our Pima County Board of Supervisors is firmly against copper mines but what are they doing to create jobs?
• Our Tucson Metropolitan Chamber of Commerce has no involvement in economic development.
• Our governor and legislature push for increasing the sales tax, legalizing sparklers, allowing guns to be carried everywhere and SB 1070 but can’t muster enough support to pass a jobs bill (SB 2050) or find a way to get the state off its boom-or-bust cycles.
• Our economic development organization TREO is stuck between a rock and a hard place. In order to make Tucson more attractive, it needs to have hard conversations with some of the very people at government entities who write the checks to support it.
Losing Raytheon’s expansion should be a wake-up call to this region. It’s time for TREO to stop talking and start doing. To TREO’s credit, the solution may include getting off governments’ payrolls and going to the private sector to fund economic development. But it was forced to do so because government funding is getting harder to come by.
There is a saying among cattle ranchers that fits TREO’s current predicament: “Big Hat, No Cattle.”
Copyright © 2010 Inside Tucson Business
It’s worth noting the Greater Phoenix Economic Council (GPEC) led a 60-person delegation of officials and business leaders that went to Washington, D.C., in April to lobby on behalf of Luke Air Force Base’s efforts. Glendale Mayor Elaine Scruggs and Goodyear Vice Mayor Georgia Lord met with key-decision makers at the Air Force and Department of Defense. Arizona Cardinals President Michael Bidwill and GPEC CEO Barry Broome also campaigned. Officials from Arizona State University also lobbied for the training.
Granted, we don’t know all the things representatives from the Tucson region might have done but whatever they’re doing, it’s not working. And it’s probably a safe bet that by their general silence on losing both the F-35 and Raytheon’s expansion means they haven’t been doing… squat.
Someday, somehow Tucsonans are going to elect political leaders who will actually do some something proactive to help nurse the region’s economy back to health. In the meantime, their silence, like the F-35s not around us, is killing us.
Contact David Hatfield at or (520) 295-4237.
What about our Mayor and cheerleader in chief on Raytheon relocation decision? Walkup is a retired Raytheon/Hughes executive and he’s the board member on TREO protecting Tucson’s investment in the organization. What did Mayor Bob have to say about Raytheon’s decision?
Walkup said he left negotiations of the site with TREO but that he was willing to help build whatever Raytheon needed here. He also said he wasn’t made aware of it at the start of Raytheon’s search 18 months ago, saying he relied on the Raytheon senior executives to tell TREO and for TREO to tell him.
The loss is a result of systematic cracks in our community that took years to happen. The big problem in our market is that our business and governmental apparatus do not work in concert, they’re competitors. The problem we face in southern Arizona is a whole bunch of business organizations running in circles trying to make sure they are relevant. Each organizations goal is to make sure the boards stay in tact and hired staff and directors keep their jobs. (Tucson Chamber of Commerce, United Way, TREO are a few excellent examples). Our business organizations have learned that keeping your head down and not rocking too many boats is the key to longevity. Staying in their silos and not crossing the isle is KILLING OUR COMMUNITY and it’s time to vote with your dollars and starve the organizations that don’t get it and reward the ones that do.
Compare how Alabama functions to how Tucson doesn’t. From Joe Pangburn at Inside Tucson Busienss:
Brian Hilson, president of the Huntsville/Madison County Chamber of Commerce which is also the area’s economic development organization, said with every project that comes their way, a team is put together comprised of state and local leaders to meet with a company and learn their needs.
“That team usually includes the governor, staff within the Alabama development office, chamber of commerce, city and county representatives, the mayor and the chair of our county commission and others on a need-to-know basis,” he said. “In the company’s eyes, they see us working and speaking as one team. That’s the only way we know to approach it.”
He credited the location proximity to Raytheon’s customers as well as a strong workforce training program. At no cost to Raytheon, the Alabama Industrial Development Training program will provide recruitment screening and pre-employment training for workers at all levels.
“Without knowing what other states were offering, we felt very confident in what we had to offer,” Hilson said. “We have an outstanding Alabama development office, their leadership and the governor’s leadership are always influential on projects we are working on. The influence of Senator Richard Shelby who has relationships with Raytheon executives was important to helping them consider Alabama.”
It was announced last week that our regions largest employer, Raytheon Missile Systems has chosen Alabama over Arkansas and Tucson to expand into a new plant. The plan would employ over 300 people and add the holy grail of economic development; manufacturing jobs to the area economy. Here’s the first part in a series of quotes and statements that should make you ask yourself; who’s running the show around here?
- Is it our Mayor and former Raytheon engineer?
- Is it TREO’s CEO Joe Snell and the board made up of the captains of industry and government (including Mayor Walkup representing Tucson)?
- Is it the Tucson Chamber of Commerce and their leader for the past 30 years along with their powerful board?
- Is there a shadow elite group of business CEO’s that band together to make sure we are ready for every opportunity?
- Is it our Republican controlled legislature and Republican Governor?
- Is it the Arizona Department of Commerce which makes sure our state is where busiensses think to come first?
From Inside Tucson Business:
John Patterson, Raytheon public relations director, said Tucson didn’t fall short in any way and that there is room to grow in Tucson in different ways and the company is still committed to Tucson.
But in the game of economic development, if a city doesn’t land an expansion or can’t help a company grow here, they’ve fallen short.
There were a bunch of other excuses. One was encroachment. Encroachment? Sure Tucson International Airport is north of Raytheon’s assembly plant but there is plenty of other vacant land that could have met explosive facility siting regulations and made “shovel ready.” Tucson Regional Economic Opportunities has been talking about “shovel ready” for more than three years.
Arizona’s leadership got out-maneuvered by their counterparts in Alabama. Sure, Raytheon is getting incentives from Alabama. But are they unreasonable? Brian Hilson, president of the chamber of commerce told the Huntsville Times, Raytheon will get up to $2 million based on job creation goals. Local jurisdictions are also ready to talk tax abatements or credits for more expansion.
Whether its 250 million more or less in over-runs, its still your money. When do you start asking why?
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