Posts Tagged ‘Solar’
By Joe Higgins and Chris DeSimone, Inside Tucson Business | 0 comments
Has Tucson’s Democratic machine overplayed it’s hand? Are moderate Democrats and the growing number of independents ready to make some changes in this year’s Tucson City Council races or next year’s Pima County Board of Supervisors races?
Will the business community show up with their dollars and their support? Have we hit the tipping point?
Here are the facts:
1. Rio Nuevo gets new board to wrest control away from the Tucson City Council.
State Attorney General and FBI investigations have been launched find out what happened to $230 million of taxpayers money spent on downtown redevelopment with little to show.
2. Buses and light rail priorities.
The city council panics over 10-cent low-income bus fare while at the same time prepares to build a $196 million streetcar system that will cost millions per year to run and will need dense development in old neighborhoods to sustain any ridership. To build a much-needed student housing project in the hole that was an old YMCA at Fourth Avenue and Sixth Street, the developer pays $15,000 and monthly payments of $2,500 for 15 years to the surrounding neighborhood in order to get the council’s approval. How much longer will developers pay to play to invest with uncertainty or skip by Tucson?
3. The City Council refers a half cent sales tax to voters only to be defeated by 20 percent margin.
Voters have lost confidence in city government and the Mayor and Council. Did the council get the message that it’s time to tighten belts and reprioritize? Tucson moved $13 million in federal money for pothole repairs to build a bridge over the Santa Cruz River to qualify for other federal money for the four-mile streetcar. Priorities?
4. University of Arizona versus University Medical Center.
The UA makes a public power play to bring UMC back under its control. The hospital was spun off in 1984 to keep if from folding. Today, UMC generates $90 million per year to support future nurses, doctors and pharmacists. Follow the money. And yet just two weeks ago, Inside Tucson Business’ 2011 List of Largest Employers showed the UA surpassing Raytheon Missile Systems for No 1. This despite state budget cuts, tuition increases and a hiring freeze.
5. Where are the jobs?
A 300-acre solar farm in an old cotton field near Marana gets caught in the political buzzsaw of neighbors and paybacks for old political scores. Supposedly, Tucson is a top 25 Solar City in the United States yet we continue to delay and politicize an investment in green technology? County Supervisor Sharon Bronson and her colleagues are delaying the project by Fotowatio Renewable Ventures, the Spanish firm that is one of the world’s leading solar power operators, may look to go elsewhere. We already know about the supervisors trying to block the Rosemont Copper mine. And now a solar farm?
6. U.S. Rep. Raúl Grijalva.
The five-term congressman’s call for a boycott of Arizona over passage of SB 1070 almost cost him re-election from previously unknown Ruth McClung. Are voters tired of the rhetoric?
7. Back-room deals.
The city council votes on a land deal to sell downtown redevelopment property in Rio Nuevo to the Gadsden Company for $250,000, which resells the property to a low-income housing project for $1.43 million, according to the Arizona Daily Star’s Rob O’Dell (March 22). Councilwoman Shirley Scott joined the majority after she received a letter from Gadsden’s attorney, Larry Hecker, detailing the $1.5 million Gadsden said it put into the project. “I think that speaks well for this group,” Scott said, adding Gadsden is not asking for any special treatment. And, it just so happens, Hecker is Scott’s campaign chair for re-election. He was also campaign chair for City Councilwoman Nina Trasoff’s unsuccessful 2009 campaign and Bronson’s 2008 campaign. When will Tucsonans say enough is enough?
8. Marana wastewater fight.
Pima County’s heavy-handed clout using its wastewater management system as awakened Marana and now the town’s voters may be ready to change find a supervisor in 2012 that is more in turned with their goal of becoming a world-class municipality.
9. Pima County property taxes keep going up.
The Pima County Assessor’s office actually increased the values of most of the commercial property in the county, despite three years of the most depressed real estate market in generations. Now, the supervisors are looking at raising the county’s property tax rate by 17 cents per $100 of assessed valuation. Pima County government had 8,396 full-time equivalent employees in 2008 and has 8,132 today. Take out a loss of 450 positions through a contract shift at Pima Health Systems and the number of Pima County employees actually grew.
10. Democratic party primary endorsements.
Typically, political parties don’t weigh picking favorites until after their electorates choose candidates in the primary election. But Pima County’s Democratic Party already has picked its slate for the Tucson City Council and the primary isn’t until Aug. 30. The endorsements brought a sharp letter of rebuke from six Democratic state representatives, including Tucsonans Sally Ann Gonzales, Matt Heinz, Bruce Wheeler and Macario Saldate.
11. All mail elections.
Under the guise of trying to “save money,” the Tucson council changed the rules of the election game just as its Democratic incumbents face tough re-election campaigns. An investigation is underway over irregularly marked mail-in ballots in South Tucson and now mail ballots have gone missing in this month’s Sahuarita council elections. The “save money” argument is a smokescreen.
12. Tourism in the toilet.
As reported in Inside Tucson Business, passenger traffic at Tucson International Airport for March, normally the busiest month of the year, is at 16-year lows. Tucson didn’t have Major League Baseball Spring Training this year for the first time since 1947. Now the economy is beginning to feel the negative impact of mismanagement of the tourist assets that have been taken for granted. Last month Travel+Leisure called Tucson one of their top 25 “most under-rated cities in the world” – not just the United States, the world. That’s not a good thing for the Metropolitan Tucson Convention and Visitors Bureau whose job it is to get the word out.
13. Arizona is projected to add jobs, but not Tucson.
State economic development officials are projecting Arizona will add more than 17,300 jobs in the next year but the Tucson region won’t see any of them. To accentuate the point, tourism is expected to grow by 3.1 percent statewide but will drop 0.2 percent in the Tucson region.
14. More low-wage jobs.
When Intel announced earlier this year it was spending $5 billion to expand and build in Chandler, it included a projection of 1,000 high-paid new jobs. Within days of that announcement Tucson, landed its expansion that will be bring us another 400 call center jobs. This on top of the announcement that Tucson-based Raytheon Missile division decided to build its newest plant in Huntsville, Ala., not here.
15. Mexican-American Studies.
A student demonstration prevented the Tucson Unified School District governing board meeting from taking place April 26 because the board was due to vote on moving the program to an elective instead of allowing it as a substitute for the core subject of American History.
Moving Mexican-American Studies to an elective would put it in line with African American Studies, Native American Studies and Pan Asian Studies as well as art, music and some foreign languages among other important options students can choose. Mexican-American Studies serves 5 percent of the district’s approximately 53,000 students, yet it has taken an inordinate amount of the attention.
Meanwhile, there are issues with procurement irregularities, school closures and students’ low achievement scores on standardized tests.
Tucson is not a shiny liberal city on the hill. The so-called political progressives like to look up to cities like San Francisco or Portland, Ore. They admire the environmental commitment of Boulder, Colo., and dream of being the Berkeley, Calif., of the desert.
But Tucson’s city core crumbles while suburbs flourish. This region’s vision and planning is taking place in Marana, Oro Valley and Sahuarita.
Lately, people including Comedy Central’s “The Daily Show” have had some fun over Democratic leaders’ idea of Southern Arizona becoming a 51st state. It’s just a diversionary tactic from Democrats trying to gloss over the facts we’ve presented here.
Tucson may be the butt of jokes but those who are struggling to run businesses and earn a living here aren’t laughing. It’s time for a change starting with this year’s city elections.
Contact Joe Higgins and Chris DeSimone at email@example.com. They host “Wake Up Tucson,” 6-8 a.m. weekdays on The Voice KVOI 1030-AM. Their blog is at www.TucsonChoices.com.
But Arizonans are learning that it takes more than blazing rays to make Phoenix the “solar capital of the world.”
The Sonoran Desert is among the most efficient spots on Earth for solar power plants and rooftop solar arrays. State requirements for utilities to get 15 percent of their energy from clean sources by 2025 also would seem an opportunity for solar manufacturing.
But most solar panels, mirrors, frames and other equipment are made elsewhere. In case after case, the state has fallen short of the competition. At least 10 companies have looked at Arizona in the past two years but decided to move their factories and about 4,500 workers to other Western states.
Business experts say the state needs to use some of the tax credits and other tools used by those other states to diversify its housing-dependent economy and deliver the state high-paying manufacturing jobs.
“Just because it’s sunny doesn’t mean we are going to get here,” said Rep. Michele Reagan, a Scottsdale Republican who is co-sponsoring a renewable-energy manufacturing-incentive bill with Sen. Barbara Leff, R-Paradise Valley.
“We have not capitalized on any industry in the solar arena or renewable energy at all.
“If you’re a company and you are trying to decide what state to move to, and some states are embracing you with open arms and you’ve got Arizona saying, ‘We are not doing anything,’ which one are you going to pick?”
In recent years, several states have offered financial incentives to the fledgling renewable-energy industry, helping to establish factories.
With the industry getting much more attention under President Barack Obama, and with nationwide calls to produce more clean power, the future of those factories is looking brighter.
The federal government’s economic-stimulus package includes $50 billion in spending and $20 billion in tax provisions for alternative energy that should spur the industry even further.
With other manufacturing operations shedding their U.S. workforces, renewable-energy jobs are increasingly attractive.
Nevada, California, Colorado, Texas, Oregon, New Mexico and Tennessee all have successfully courted solar manufacturers to their states.
Oregon, for instance, offers a 50 percent tax credit to pay construction costs for renewable-energy equipment manufacturers. Development officials say it has helped them land seven international solar manufacturers in two years. Most of those companies had considered coming to Arizona.
In the Midwest, Ohio is offering low taxes and incentives such as job-creation tax credits.
And just next door to Arizona, New Mexico is looking to set itself apart.
When Gov. Bill Richardson formed the state’s economic recruitment team in 2003, renewable energy was one of its primary targets.
The state landed Advent Solar Inc. after that company licensed technology from New Mexico’s Sandia National Laboratories in 2003.
Advent opened a small manufacturing and research facility in Albuquerque that began production in 2005.
Then the state’s economic development team successfully used $130 million in a variety of tax incentives to recruit Schott Solar from Germany to build a plant near Advent.
In December, the state announced that Signet Solar of California would build a manufacturing plant south of Albuquerque that could qualify for as much as $185 million in tax incentives.
Both Schott and Signet also had considered sites in Arizona.
New Mexico doesn’t just sweeten the pot with tax benefits. It also provides reimbursement to companies for job training and helps foot the bill for infrastructure needs.
When Schott Solar announced last year it would build a plant in Albuquerque, it not only qualified for all the state’s tax breaks, but the governor said he would ask the Legislature for an additional $12 million to pay for infrastructure. The city itself kicked in $1 million.
“When I was in Phoenix, we didn’t consider New Mexico competition,” said Jim Colson, a former economic-development official for New Mexico, Glendale and the Greater Phoenix Economic Council. “That has shifted. Now, New Mexico doesn’t consider Phoenix competition.”
How Arizona rates
That sun-soaked Arizona isn’t leading the solar-manufacturing frontier perplexes some experts in the field.
The state is often one of the first places looked at by executives shopping for factory sites. But financial analyses usually keep Arizona off the short list when companies make their final decisions because the cost of doing business in other states is lower once incentives are factored in.
Arizona traditionally has shunned tax incentives and relied on its climate and population growth to drive industry.
Some oppose tax benefits for a few when they believe an overhaul of the tax code is needed to lower taxes on all businesses. When similar incentives were proposed last year during the final weeks of the legislative session, they didn’t pass.
“Arizona should be more competitive than it is,” said Colson, now president of site selection for Austin-based Angelou- Economics Inc.
With AngelouEconomics, he helps companies decide where to open new facilities, including solar companies trying to decide on U.S. locations.
“I’ve had several projects where Arizona was included in the mix, and it didn’t stay there very long,” he said. “It wasn’t all because of the lack of incentives. The property-tax impacts were significant when comparing it to its neighbors.”
The business property tax rate on a factory not in an enterprise zone is 2.95 percent in Arizona. Oregon has the next-highest rate in the West, at 1.52 percent. Rates are 1.13 percent in Nevada, 1.03 percent in New Mexico, 0.5 percent in California and 0.6 percent in Colorado, according to Scottsdale-based Incentives Advisors, which analyzed the effect incentives would have in Arizona.
However, some of those states have higher levies than Arizona for corporate income, unemployment or other taxes. Incentives Advisors concluded that the tax incentives proposed at the Legislature would make Arizona more competitive for solar-manufacturing factories.
Such incentives can help level the playing field.
When a state has a particular weakness, such as a high commercial property tax, tax credits and other incentives can be the final factor that drives a factory to that location, said Andy Mace, a principal with Cushman and Wakefield Consulting in Pennsylvania.
“It’s not always the place with the most incentives that wins, it’s the place with the total lowest cost of operating,” Mace said. “Over 10 years, where will I spend the least on labor, land, energy and transportation?”
Arizona has strong selling points, such as its weather and a workforce with manufacturing skills. But factories require expensive buildings, lots of energy and hundreds of employees, making the economics much more important than, say, a corporate headquarters that simply needs office space for a few dozen employees.
“If you’re comparing Portland, Albuquerque and Phoenix, I know I can get real estate, labor, transportation, they’re all within one or two points of each other,” Colson said. “Then I overlay the incentives on top of that. Albuquerque jumps up, Portland jumps up and Phoenix actually goes down.
“That’s why the Greater Phoenix region is not winning these projects.”
Economic development officials say the solar industry isn’t likely to spread evenly over the country but grow around those cities established as hubs.
They say Arizona still has a narrowing chance at being one of those hubs.
“Right now, there are 11 companies looking to decide (on factory sites) this year,” said Barry Broome, president of the Greater Phoenix Economic Council, a proponent of the incentive bill. “We may be in or out (of the industry) after two quarters.”
Arizona has an available workforce, mostly because of continuing job losses in the semiconductor and construction industries.
The state not only represents a large market for solar devices but is next door to California and its large population. Transportation is on par or better than some of its competition.
The research taking place at Arizona State University, along with the recently upgraded solar-testing lab there that international companies use to certify their products, also are among its strengths.
But those pluses haven’t added up to much yet.
Even the companies that have so far passed up Arizona for factories say the state is a potential home of solar manufacturing.
“I can’t fathom why this isn’t a hotbed of solar activity,” said Peter Green, president and chief executive of Advent Solar in Albuquerque and a former executive with ON Semiconductor in Phoenix.
But Green said that building a solar-manufacturing industry in Arizona will be challenging.
He agreed, when asked, that even if the tax-incentives bill passes, the state lacks the strong political backing, the money for sweeteners such as infrastructure improvements, and the word-of-mouth industry buzz that help foster a solar industry.
“I think it is going to be a struggle,” he said.
Reach the reporter at ryan .firstname.lastname@example.org.
Other states eclipse Arizona’s efforts to lure solar industry
People have asked me why we reprint Emerine’s articles in their entirety here on our blog. My simple answer is that Steve speaks truth to power. His institutional knowledge of our region makes his opinion’s especially pointed. In our world of 24 hour news cycles and spin induced smoke and mirrors, Steve sums up the issues presented to our community in about a clear as way possible. We are glad he has a platform to preach from, we hope to give him another pulpit with our blog.
This weeks article opinion is addressing the our local governments approach towards funding of our law enforcement agencies. FBI statistics show violent crime and murder decreasing all over the county. Locally we had a record breaking year in homicides. What’s governments core function again?
While crime rises, local politicos look to spend money elsewhere
Published on Saturday, January 10, 2009
Only Tucson and Pima County would insist on doing more crazy things than a columnist could comment on 52 times in a year.
Republican Mayor Bob Walkup and Democratic Council members Regina Romero, Rodney Glassman, Karin Uhlich, Shirley Scott, Steve Leal and Nina Trasoff use every opportunity they get to profess their undying support for Tucson police.
The men and women in blue need that backing. Tucson just experienced 74 murders in 2008 – more than in any year in history.
But the mayor and council are about to cut three proposed police academy classes to only one, knowing that it won’t produce enough new officers to replace those the department will lose through retirements and resignations.
Yet the mayor and council are also about to approve $7.6 million in bonds to build new solar panels on seven city buildings.
Why? Because they want some “free” federal money and solar power is a cool topic.
The federal government would pay part of the interest on the bonds, leaving the principal and up to 2 percent of the interest for the city to pay.
Think of when your supermarket cashier announced you’d saved more than $20 on your last grocery shopping trip. It may have cost you $80, but look what that plastic store card did for you!
Are you tempted to come back after lunch to double your savings or do you realize you can’t afford to spend another $80?
Solar panels aren’t groceries, but we’re constantly bombarded by messages extolling the virtues of anything “green” or “sustainable.”
Most products using those words cost more, but we’re told that if we use them long enough, we’ll eventually save money.
That’s probably true. But it doesn’t mean a family whose breadwinner has just been laid off should rush to buy a green gizmo before their savings account is exhausted.
Richard Elías, the Democratic chairman of the county Board of Supervisors, and his colleagues (Democrats Ramón Valadez and Sharon Bronson and Republicans Ann Day and Ray Carroll) also have problems.
They must also reduce their current budget and make more cuts or raise taxes in 2009-2010. They’ll probably have to do both.
They’ve told Sheriff Clarence Dupnik they’ll try not to cut his current budget if he agrees to not replace any deputies he loses between now and June 30.
You can see that the supervisors, like the council members, also favor law enforcement and oppose crime. Unless it costs money.
Solar panels aren’t the supervisors’ addiction. They’re hooked on vacant land.
They’ve bought 159,000 acres of ranch land and acquired 127,280 acres of leased land in recent years, but it isn’t enough. Nearly 12 percent of Pima County land is still privately owned. Until last year, it was 13 percent.
The supervisors are about to adopt their fifth draft habitat conservation plan for their Sonoran Desert Conservation project. They’ll submit it to the U.S. Fish and Wildlife Service for approval, then hold a bond election to raise more money for their addiction to dirt.
They plan to spend $324,000 a year from 2009 to 2011 and $568,000 for the 2011-2012 fiscal year to monitor and study their vacant land. The total cost for the next decade would be more than $40 million.
Despite a tight budget, they say they must ensure they own enough land and have enough rules in place to guarantee survival of their favorite critters.
Surely you’ve also been worried about the Huachuca water umbel, the lesser long-nosed bat, the Marana piranha, the southwestern willow flycatcher, the western yellow-billed cuckoo, the Gila chub and Mexican garter snake.
But neither you nor the supervisors have seen all of them or discussed their status with anyone.
I made up the third one on that list because I just might apply for a county grant of a couple of million bucks to keep writing about the Marana piranha.
Frankly, though, I’d really rather have a few more deputy sheriffs.
Contact Steve Emerine or e-mail comments for publication to email@example.com. This column appears weekly in Inside Tucson Business.
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