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Major League Mayors:

City leaders rally around ‘regional teamwork’ to keep
Valley in game when it comes to attracting businesses

 

Valley Partnership Special Event for Board of Directors and Sponsors

Photo Credit: SRP



The Legislature. To GPLET or not to GPLET. The I-11 transportation corridor. Landing Amazon’s HQ2. The Legislature – again.

All were topics of interest Sept. 29, 2017 at the Arizona Country Club as Valley Partnership brought together a panel of five Valley mayors for an event attended by Valley Partnership Board Members, top Sponsors, and 2017-2018 Advocates class of future leaders in the real estate industry.


“Why is this event important as Valley Partnership closes 2017 and gears for 2018?” asked Valley Partnership President/CEO Cheryl Lombard. “Valley Partnership is different because we were founded to work directly with the cities on responsible development issues. This year these five cities are where we spent our time and the efforts of our city/county liaisons.”


From East to West, mayors in attendance included: John Giles, Mesa; Mark Mitchell, Tempe; Greg Stanton, Phoenix; Georgia Lord, Goodyear; and Sharon Wolcott, Surprise. Wellington “Duke” Reiter, Senior Advisor to the president at Arizona State University, moderated the event.


First up was a discussion about the importance of fostering cooperation among the five cities.


“Within a regional economy we compete together,” Mayor Stanton said, “but we do so in terms of building an exporting, innovative, diverse, and sustainable economy. We are doing it now.”


“We are very competitive,” Mayor Lord added, “but we’re honest about it. We don’t hide anything. I’m excited when my city gets something (development). If we have a problem in Goodyear and need some support, I go to these mayors and ask for help. We are a team.”


There was plenty of discussion as the mayors addressed the GPLET, or Government Property Lease Excise Tax. It was established by the State of Arizona as a redevelopment tool to initiate development by reducing a project's operating costs by replacing the real property tax with an excise tax.


In the last Legislative session, t
he Arizona House of Representatives approved compromised changes to property tax breaks used by cities for big developments and jobs projects. It approved an amended version of HB2213.


“Our toolbox is not as robust as it is in other areas (states),” Mayor Giles said. “That’s why the GPLET is attractive to the development community. We are banking on GPLET to continue to be a tool to use. We have to come back this Legislative session and point out we can’t do economic development if we don’t have the tools to be effective.”


One Valley city that has benefitted from the GPLET is Tempe.


“The GPLET can make or break a project, or affect the way it is developed,” Mayor Mitchell explained. “With it you can take a vacant lot making zero dollars and develop it. We need to make sure each city gets an opportunity for economic development. We are competing against cities that provide money for good, quality projects. Where GPLET tools come into play are in K-12 schools. We have to look forward to a modern technology economy. This includes amenities such as art and culture. It’s all tied together.”


A modern and viable transportation system in the Valley represents a home run for everyone, the mayors agreed. Having the proposed I-11 run through the Valley could be a game changer.


“Transportation is something I’m very passionate about,” Mayor Wolcott said. “Connectivity is critical to a region’s success. When I moved here from Minnesota what I saw that was missing – not enough north-south connectivity. I-17 is great, but it’s not adequate. I-11 won’t just be an asset to the West Valley, it will be a tremendous asset for all of us if we get it right.”


Other topics raised included immigration, DACA and NAFTA; what’s happening in Washington, D.C.; bidding on the lucrative Amazon HQ2; developing the Rio Salado; and making sure business leaders let the Legislature know they mean business.


“The best chances for us to win is for us to work together,” Mayor Stanton said. “We must leverage our assets as a community. We must be one economic unit and one economic region. We must act that way to be successful. We need to do what will make us a tier 1 region, not tier 2 or tier 3.


“We can get there, but only as teammates,” Mayor Stanton said.


These mayors hit it out of the park.



 

September Breakfast

 

If you build it, they will come:

Valley’s economic development leaders are leveraging a

multitude of key amenities to attract new companies



 

 

While location is important when it comes to attracting and retaining major employers, there are new driving forces when companies look to open shop in a new city.

 

The September 20 Valley Partnership Friday Morning Breakfast brought together three economic development experts who shared their thoughts on these nuances.

 

“A new trend I’ve seen the past three years is that in eight times out of 10, the person leading the site selection team is the head of HR (human resources),” said panelist Christine Mackay, Economic Development Director for the City of Phoenix. “We had never seen that before.”

 

All three panelists agreed that most important asset of their respective municipalities is a talented and quality workforce.

 

“That’s the No. 1 thing we sell here,” said Michelle Lawrie, Economic Development Director for the City of Goodyear. “It has evolved over time. Cost and things like that used to drive decisions. Now it’s the quality of the workforce.”

 

Added Bill Jabjiniak, Economic Development Director for the City of Mesa: “We have a young and large workforce, not to mention great location. Think of the proximity to West Coast destinations and ports. That’s why we spend time recruiting in California. We are still affordable and have a talented workforce.”

 

Mackay added that it helps to have three major universities that are doing cutting edge research and are great partners.

 

“We’re leveraging our universities like never before,” she gushed.

 

Moderator and Senior Vice President of CBRE, Jerry Roberts, drew varied responses when he asked the panelists what industries their respective cities are looking to attract.

 

“In the West Valley we’re all about diversification,” Lawrie said. “We are looking to grow density and build in areas like Goodyear and Avondale. Really in the past couple of years we are seeing the fruits of our labor with the industrial opportunities we’ve had. We have lots of land in the 303 corridor. Aerospace and aviation are key industries (to attract). With healthcare the largest employer in Arizona, we are fortunate to have Abrazo West and Cancer Treatment Centers of America.”

 

“In Mesa, we’re picking up on the word diversity,” Jabjiniak said. “We are an older city and will be crossing the 500,000-resident threshold in the next year. Healthcare and the medical device field help drive our economy. We’ve always been strong in aerospace and aviation with two large and busy airports. Manufacturing to me is huge and in tremendous demand. We’d also like to play in the office environment.”

 

“Phoenix is more about, ‘yes, please,’” Mackay said with a laugh.

 

Phoenix is much different, she said, as it comprises 517 square miles.

 

“There is so much difference between all of the corridors,” Mackay said. “Between the ‘7s,’ traditionally it’s been social services, banks, financial institutions. Now it’s turning into a true tech hub. Tech is where the workforce wants to be.”

 

A telling sign of the times: In 2012, according to Mackay, there were 67 tech companies in Phoenix. Today there are 296. Mackay said she is also thrilled with the opening of the Loop 202 South Mountain Freeway.

 

“I never got to create an entire employment corridor,” she said. “That (the 202) is Phoenix’s next frontier for industrial.”

 

What are Valley cities lacking?

 

>> Jabjiniak: “There is always room for improved state incentives.”

 

>> Mackay: “The ability to redevelop existing infrastructure.”

 

>> Lawrie: “Infrastructure is the No. 1 issue we can enhance.”

 

How have employers’ wants and needs changed?

 

>> Mackay: “Employees are now asking how do they connect with the community and be an influence in the city. This is also the first year millennials will be managing Generation Z. To me that is going to be fascinating to see.”

 

>> Lawrie: “It’s about placemaking; working to attract people and not just companies. Cost has been taken over by the workforce. It’s a different conversation now.”

 

>> Jabjiniak: “Having the HR director at the table saying personnel is No. 1. It no longer is location or real estate cost.”

 


 

August Breakfast

Food Fight:


How the competitive, shifting grocery industry

is affecting real estate and consumer decisions



The August 18, 2017 Valley Partnership Friday Morning Breakfast event focused on the shifting grocery industry and how it is affecting real estate and consumer decisions.  A panel representing all segments from developer, grocer, and city decision-maker made this topic relevant to the Valley area.

 

The grocery store has long reigned as more than just a place to buy food. It serves as a gathering place. It provides an experience to those who shop there. In some cases, it’s what defines a neighborhood.

 

In the past five years, the grocery industry has undergone dramatic shifts. Behind these changes are consumer needs, competition, and most recently technology. As this industry evolves, so do the demands and impacts on the commercial real estate industry.

 

Why have grocery stores been the best anchor tenants in retail centers, asked panelist Gordon Kieg, Principal, Pennant Development?

 

“Because they provide gravity,” Kieg said. “Everyone knows where the closet grocery store is. These stores get between 20,000 and 25,000 shoppers a week. On a pure economic level, after paying the mortgage and the car loan, the third largest expenditure for a family is going to the grocery store.”

 

As competition for the grocery dollar has increased, a food fight of sorts has broken out. The food business is big business. It’s evident on every street corner. It’s also evident when consumers fire up their laptops, home computers, and smart phones to order their groceries online.

 

“There are so many different venues where you can buy groceries or food of any kind,” said Jan Martin, Senior Vice President of Real Estate, Safeway/Albertson’s Southwest Division. “There are dollar stores and drug stores. Online you have services like Blue Apron and Amazon.”

 

Online shopping is where Greg Laing, Principal, Phoenix Commercial Advisors, sees the biggest impact. He related that his daughter, who has small children, orders groceries online, opens the back of her SUV, and her groceries are loaded up.

“Some consumers aren’t making those two visits a week to the grocery store,” Laing said. “That means they’re not stopping next door to pick up a sandwich at Subway. That’s not doing well for sales (at other retailers in the center). They’re losing that little bit extra that people used to buy.”

 

While some neighborhood centers are losing customers, a new trend in grocery stores is evolving in Downtown Phoenix. For decades, it has been considered a food desert, an urban area in which it is difficult to buy affordable or good-quality fresh food.

 

Block 23, a mixed-use development scheduled to open in 2019, will feature the area’s first grocery store by Fry’s Food Stores. The project will include multi-family and office components. And it will be on the Metro light rail.

 

Councilman Daniel Valenzuela represents a great number of constituents in one of the Valley’s most diverse areas, District 5. More than 30 languages are spoken in his diverse and densely populated district. While he’s optimistic the city is working with the private sector on easing some building codes – Block 23 is being developed by RED Development – there are still some challenges.

 

“Some of the things we’re doing right now is mapping the city looking at where food deserts exist,” Valenzuela said, “and where our transportation corridors are. Light rail is crucial. If you’re going to a grocery store and not in a transportation corridor you might as well be in California.”

 

What does the future hold for the grocery industry? Plenty of changes, the panelists agreed. Will online grocery ordering replace stepping foot into the store? Do consumers want someone else to pick their bananas?

 

“Grocery shopping is a reasonably intimate experience,” said moderator Barry Shannahan, Executive Vice President, Acquisitions & Development, RED Development. “When it comes to picking produce, personally I want to touch and feel my own food.”

 

Competition will increase as well. Aldi, a sister company of Trader Joe’s, is entering the Arizona market. Online sales continue to increase. Amazon recently purchased Whole Foods. More than 50 percent of Costco’s sales are for food products. Then there’s Walmart, which isn’t going away.

 

Kieg predicts consumers will also see more remodeling of their favorite grocery stores.

“You will see novelty concepts like a bar, a sushi place,” he said. “Consumers want to go somewhere cool. It’s a real opportunity for brick and mortar stores that Amazon will not be able to provide.

“There is so much talk about disruption in every industry. In our economy in the 90s there was an enormous disruption in the grocery industry.”

 

 

 

 

2017 Annual Sponsors

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