Sierra Vista Economic Outlook 2013 by Sierra Vista Chamber

COCHISE COLLEGE

special thanks to our sponsors The organizations listed on the following pages sponsor the Cochise College Center for Economic Research (CER). Their generous contributions allow the CER to undertake various research projects and studies, as well as hold annual economic outlook luncheons and produce this publication. We greatly appreciate their generous support. For information on how you can become a sponsor, please contact the CER at (520) 515-5486 or by e-mail at cer@cochise.edu.

C O C H I S E C O L L E G E P R I N T S E RV I C E S KEITH RINGEY, COORDINATOR

Sierra

DESIGN & PUBLISHING

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table of contents 1

review of the national, state, and local economy by Dr. Robert Carreira, Director, Center for Economic Research

overcoming economic climate change by Charles P. Potucek, Sierra Vista City Manager

the city of Sierra Vista Overview Cost of Living Tax Rates Crime Rate

economic development Overview Sierra Vista Economic Development Foundation Sierra Vista Industrial Development Authority Sierra Vista Municipal Airport West End Development Quality of Life Our Future Vistas â&#x20AC;&#x201C; City Council Strategic Leadership Plan Environmental Codes Foreign Trade Zone Arizona Quality Jobs Tax Credit Arizona Competitive Incentives, Programs, and Grants SouthEastern Arizona Governments Organization Cochise College Small Business Development Center

education Primary and Secondary Education Postsecondary Educational Opportunities Educational Attainment

healthcare Overview Sierra Vista Regional Health Center

demographics Population Estimates and Projections Race and Ethnicity Age Groups Household Characteristics Income Military Veterans employment Arizona Department of Economic Security Southeast Arizona Workforce Connection Employment, Unemployment, Labor Force, and Job Growth Occupations and Classes of Workers Industries Major Employers Wages Cochise County Employment Outlook A Note on Employment Data

retail trade and commerce Sierra Vista Area Chamber of Commerce Population Served by Sierra Vistaâ&#x20AC;&#x2122;s Retail Market Taxable Sales Retail Sales Restaurant and Bar Sales Accommodation Sales Business Establishments and Licenses Sierra Vista Retail Out-Shopping Survey Outlook

housing, real estate, and commercial construction Residential Construction Major Planned Developments Home Sales Manufactured Home Sales Housing Affordability VA Financing Affordable Housing Developments Rental Market Commercial Construction Outlook

banking and bankruptcy filings Banking Bankruptcy Filings

Mexico Overview Naco, Sonora Aqua Prieta, Sonora Economic Impact of Mexican Visitors U.S. Travelers to Mexico

Fort Huachuca Overview Economic Impact

Cochise County agriculture Overview Agritourism

tourism and travel Overview Attractions and Activities Tourism Trends and Marketing in Sierra Vista Cochise County and Sierra Vista Lodging

renewable energy Renewable Energy Incentives

55 57

community resources about the CER

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Photo: City of Sierra Vista

review of the national, state, and local economy National In 2008 and 2009, the national economy lost 8.7 million jobs. From 2010 through 2012, the economy gained back 4.7 million jobs. In 2012, 1.8 million jobs were created, approximately the same level as 2011. The national unemployment rate in 2012 was 8.1 percent. Unemployment declined relatively steadily throughout the year, with the seasonally adjusted monthly rate falling to 7.8 percent in November and December 2012. This was down from the peak of 10 percent in October 2009. The nation’s gross domestic product (GDP), the broadest measure of economic activity measuring the value of all goods and services produced in the economy, was up for 13 consecutive quarters from the third quarter of 2009 through the third quarter of 2012. Real (inflation-adjusted) GDP declined 0.3 and 3.1 Dr. Robert Carreira percent, respectively, in the recessionary years of 2008 and 2009. GDP then increased Director by 2.4, 1.8, and 2.2 percent in 2010, 2011, and 2012, respectively. Advance estimates Center for Economic Research Cochise College suggest GDP declined 0.1 percent in the fourth quarter of 2012 due to cuts in military spending and a decline in exports. Consumer price inflation was 1.6 percent in 2010, 3.2 percent in 2011, and 2.1 percent in 2012. Higher inflation in 2011 was attributable to a spike in oil and energy prices midyear, which also contributed to slower economic growth as consumers pulled back on other spending. Consumer price inflation slowed in 2012 led by declines in oil and energy.

Arizona Arizona’s GDP grew 1.1 percent in 2010 and 1.5 percent in 2011, after falling 1.2 and 8.2 percent in 2008 and 2009, respectively. Arizona’s economic decline in 2009 was the second largest in the nation behind Michigan. In 2011, Arizona’s economic growth was 18th highest nationally, outperforming 32 of the other 50 states. Arizona gained 50,500 jobs in 2012 for job growth of 2.1 percent. The vast majority of the job creation was in the private sector, which added 48,300 jobs for growth of 2.4 percent. Government added 2,200 jobs for growth of 0.5 percent. In 2012, the statewide unemployment rate was 8.3 percent. The monthly rate in December was 7.9 percent, down from its peak of 10.8 percent in March 2011. The Arizona state budget finished

SIERRA VISTA ECONOMIC OUTLOOK • 2013

fiscal year 2012 with an estimated surplus of $450 million, following several years of deficits closed through budget cuts, borrowing, and a temporary increase in the state’s sales tax rate, which expires June 1, 2013.

Cochise County In 2012, Cochise County lost 50 nonfarm jobs for annual job growth of -0.1 percent. The county’s private sector stabilized at 2011 employment levels in 2012, while government lost 50 jobs for growth of -0.4 percent. Within the private sector, construction, manufacturing, educational and health services, leisure and hospitality, other services, and trade, transportation, and utilities expanded, while professional and business services lost jobs. Employment levels in the information industry and financial activities stabilized in 2012. Cochise County’s annual unemployment rate in 2012 was 7.9 percent. The monthly rate in December 2012 was 7.8 percent, down from its peak of 9.2 percent in April 2011. In 2011, retail sales countywide were down 1.2 percent after adjusting for inflation. Retail rebounded in the first 11 months of 2012, with sales up 2 percent compared to the same period of 2011. Retail sales were up in seven of the nine months ended in November 2012. Cochise County’s restaurant and bar sales were down 0.2 percent in 2011 and 4.8 percent in the first 11 months of 2012. Sales were down in 12 of the 14 months ended in November 2012. Countywide accommodation sales, which include hotel, motel, RV park, and other temporary lodging stays of less than 30 days, were down 13.1 percent in 2011 and 17.2 percent in the first 11 months of 2012. The countywide accommodation industry has struggled in recent years with sales down in 23 of the 26 months ended in November 2012. New residential construction permits in Cochise County were down 14.7 percent in 2012—the seventh consecutive year of decline. The number of new home permits in 2012 was down more than 75 percent from its peak in 2005. Sales of new and existing site-built homes in Cochise County hit bottom in 2008. Since then, sales have seen modest growth in 3 of 4 years. Sales volume in 2012 was up 3.8 percent from the trough in 2008, but remained 40 percent below their 2005 peak. The countywide median price of site-built homes fell 6.1 percent in 2012—the fifth consecutive year of decline. The median price in 2012 was 29.1 percent below the peak in 2007, and remained below 2004 levels. In 2012, 26.4 percent of site-built homes sold countywide were foreclosures, down from 30 percent in 2011. Sales of existing manufactured homes countywide were up 29.5 percent in 2012. Countywide sales volume was up nearly 80 percent from the trough in 2009, but remained more than 30 percent below the 2005 peak. The median price of manufactured homes countywide dropped for 5 consecutive years from 2008 through 2012. In 2012, 43.6 percent of manufactured home sales countywide were foreclosures.

Sierra Vista Sierra Vista saw a net loss of 237 jobs in 2012 for job growth of -1.3 percent. Sierra Vista’s annual unemployment rate in 2012 was 7.6 percent. In December 2012, the city’s seasonally adjusted monthly rate was 7.4 percent. In the first 11 months of 2012, retail sales in Sierra Vista were down 1.8 percent compared to the same period the year prior. That was the fifth consecutive year of decline. For most of 2012, Sierra Vista’s monthly retail sales alternated between positive and negative growth compared to the same months the year prior, with sales down in 4 of 7 months from May through November. Restaurant and bar receipts in Sierra Vista in the first 11 months of 2012 were down 10.3 percent, following three consecutive years of growth. The city’s restaurant and bar sales were down in 16 of the 22 months ended in November 2012. From January through November 2012, accommodation receipts in Sierra Vista were down 26.6 percent. This followed a 10.1 percent decrease in 2011. Sales were down in 20 of the 22 months ended in November 2012. In 2012, the number of new residential construction permits issued in Sierra Vista was down 8.2 percent, following a 9.5 percent increase in 2011. The number of new home permits in 2012 was down more than 75 percent from the 2004 peak. Sales of new and existing site-built homes in the Sierra Vista area were down in 6 of 7 years from 2006 through 2012. The only year to see an increase was 2009, with modest growth of 2.4 percent. Sales in 2012 were down more than 50 percent from their 2005 peak. The median home price in the Sierra Vista area declined 6.2 percent in 2012—the fifth consecutive year of decline. The median price in 2012 was 22.4 percent below the 2007 peak and was only slightly above 2004 levels. In 2012, foreclosed homes accounted for 22.5 percent of site-built home sales—the same level as 2011. Sales volume of existing manufactured homes in the Sierra Vista area was up 26.7 percent in 2012. Despite the increase, sales volume remained more than 50 percent below the 2005 peak. The median price of manufactured homes in the Sierra Vista area dropped for 5 consecutive years from 2008 through 2012. In 2012, 47.7 percent of manufactured homes sales were foreclosures.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Sierra Vista Mayor and Council Photo: City of Sierra Vista

overcoming economic climate change Sierra Vista city government continues to adapt to an ever-changing economic climate brought about by the cyclical nature of the defense budget. In fact, the very history of Sierra Vista revolves around these cycles. As we enter 2013, we find ourselves dealing with yet another down cycle on top of the already challenging national and statewide economic situation. Our city council members—building upon strategies used to assist the city in successfully navigating the past four years of economic downturn—will look to use a number of tools to guide us in shaping our future. The first of these is the “Dream Your City” interactive public process to gain community input in formulating our Vista 2030 general plan. The new general plan will go before voters in November 2014, and, if approved, will serve as the Charles P. Potucek framework for all of our planning processes over the next 10 years. To view the City Manager City of Sierra Vista results of the interactive public process, visit www.SierraVistaAz.gov and click on the “Dream Your City” banner. Next, the council will engage in developing the city’s 2013-2015 Strategic Leadership Plan (SLP). The SLP will specify objectives for the city to achieve over the next two years in support of the longer-term goals established by Vista 2030 and other longer-term goals set by the council. The SLP will also serve to establish annual budget priorities, helping to ensure the city continues to provide quality services to residents. The current economic climate certainly impacts how the city provides those quality services. Over the past five years, budgetary constraints have resulted in reductions of approximately 20 percent of city staff, primarily in administrative and middle management capacities. We accomplished this while maintaining levels of police officers, firefighters, and public works employees. We successfully addressed staffing losses through restructuring, increased productivity through technological improvements, or by simply asking remaining employees to take on more responsibilities. I thank them for responding so well to sometimes difficult circumstances.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

Because we cannot predict when defense spending will increase, the city council wants to place increased emphasis on economic development. Currently performed via contract with the Economic Development Foundation, the council envisions a community-wide approach with a focus on diversifying our economic base while maintaining an emphasis on Fort Huachuca and its missions. While the nature of those missions will keep the post strong, we must vigilantly watch how the Department of Defense changes will impact Sierra Vista in the future. Despite the challenges of the past few years and the ones presented by the current economic climate, Sierra Vista remains a vibrant community with a bright future. We owe that to the individual hard work, volunteerism, and adaptability of the people of our community.

Despite the challengesâ&#x20AC;ŚSierra Vista remains a vibrant community with a bright future.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Carr Canyon Peak Photo: courtesy of City of Sierra Vista

the City of Sierra Vista Overview Sierra Vista—the largest city in Cochise County—is located along State Routes 90 and 92, approximately 94 miles southeast of Tucson, 205 miles southeast of Phoenix, and 30 miles from Interstate 10. The city is at an elevation of 4,623 feet. Monthly temperatures range from an average low of 34°F in January and December to an average high of 93°F in June. The founding of Sierra Vista was tied to the establishment of what is today Fort Huachuca. Early ranchers, homesteaders, and business entrepreneurs began to settle and build around the army encampment in the late 1800s and the city was incorporated in 1956. In 1971, Fort Huachuca was annexed into the city. Sierra Vista is the retail hub of Cochise County, serving a commercial market of more than 110,000 people. Large retail chains including Wal-Mart, Target, Kmart, Sears, Dillard’s,

SIERRA VISTA WEATHER MONTH AVG. HIGH January 61°F February 65°F March 70°F April 77°F May 85°F June 93°F July 92°F August 89°F September 87°F October 79°F November 70°F December 62°F

AVG. LOW 34°F 37°F 42°F 47°F 55°F 63°F 66°F 65°F 60°F 51°F 41°F 34°F

Source: The Weather Channel ©

MEAN 48°F 51°F 56°F 62°F 70°F 78°F 79°F 77°F 74°F 65°F 56°F 48°F

AVG. PRECIP. 0.98 in 0.72 in 0.52 in 0.41 in 0.30 in 0.51 in 3.11 in 3.82 in 1.45 in 0.93 in 0.44 in 1.03 in

SIERRA VISTA ECONOMIC OUTLOOK • 2013

COST OF LIVING COMPARISONS Marshall’s, Home Depot, Lowe’s, SIERRA VISTAPRESCOTTStaples, PetSmart, and Best Buy BULLHEAD LAKE PRESCOTT DOUGLAS are located in the city and serve MICRO AREA* TUCSON PHOENIX SCOTTSDALE FLAGSTAFF CITY HAVASU VALLEY YUMA customers from across Cochise 2008 100.2 99.6 101.1 N/A 118.3 N/A 112.2 107.2 105.4 County, neighboring Santa Cruz 99.2 99.1 98.4 N/A 114.1 N/A 109.7 105.3 103.2 2009 County, and across the U.S. bor97.8 96.4 100.6 N/A 114.8 N/A 111.7 103.6 101.1 der with Mexico. The city is 2010 2011 99.6 95.0 96.5 N/A 113.3 N/A 108.9 103.7 103.5 home to The Mall at Sierra Vista, 102.5 95.5 96.8 115.4 111.6 91.9 104.3 98.6 105.2 a one-story enclosed regional 2012 shopping mall. In recent years, N/A = data not available. The Sierra Vista-Douglas Micropolitan Area is a statistical area designation for all of Cochise County. Sierra Vista and Douglas are included in the title since they are the principal cities that meet the criteria for establishing Cochise County as a Micropolitan area. the city’s restaurant industry has Note: The average for all participating places nationwide equals 100 and each participant’s index is read as a percentage of the average for all places. expanded considerably and now Source: Council for Community and Economic Research (C2ER), Cost of Living Index. includes such large chains as Applebee’s, Buffalo Wild Wings, Chili’s, IHOP, Olive Garden, Outback Steakhouse, Panda Express, and Texas Roadhouse. A boom in commercial construction from 2005 through 2011 added several new hotels, restaurants, large retailers including a new Wal-Mart Supercenter, office complexes, and other businesses.

Cost of Living According to the Council for Community and Economic Research’s Cost of Living Index, Cochise County’s cost of living in 2012 was 2.5 percent higher than the average of more than 300 participating places nationwide. This was up from 0.4 percent below the average in 2011. In 2012, all categories of cost were higher in Cochise County than nationwide except grocery items and health care. Local grocery costs were 2.2 percent below the national average, up from 4.4 percent below in 2011. Healthcare costs were 0.5 percent below the national average, up from 2 percent below in 2011. Transportation costs, which include gasoline and automobile maintenance, were 6.6 percent above the national average in 2012, down from 8.8 percent above in 2011. The local cost of utilities was 3.4 percent above the national average, up from 8 percent below in 2011. The cost of housing in Cochise County was 2.8 percent above the national average in 2012, up from 0.4 percent below in 2011. The local cost of miscellaneous goods and services was 2.7 percent above the national average in 2012, up from 0.9 percent above in 2011. The cost of living in Cochise County in 2012 was 7.3 percent higher than Tucson and 5.9 percent higher than Phoenix.

Tax Rates TRANSACTION PRIVILEGE TAX In 2010, with the passage of Proposition 100, Arizona’s transaction privilege tax (sales tax) rate increased from 5.6 to 6.6 percent for a period of 3 years, reverting to 5.6 percent on June 1, 2013. The county rate is 0.5 percent for most categories of sales. The general sales tax rate in Sierra Vista is 1.75 percent for a total (city, county, and state) tax rate of 8.75 percent, which reverts to 7.75 percent with the expiration of the Proposition 100 increase. City rates are higher for utilities, telecommunications, construction contracting, lodging, and restaurant and bar (see table). The city also levies a tax of 1 percent on rental real estate. SIERRA VISTA/DOUGLAS MICROPOLITAN AREA COST OF LIVING PROPERTY TAX. The combined total of all primary and secondary MISC. COMPOSITE GROCERY TRANS HEALTH GOODS & city, school district, county, state, and special district INDEX ITEMS HOUSING UTILITIES PORTATION CARE SERVICES property taxes for property located in Sierra Vista is 2008 100.2 104.9 103.1 97.7 100.9 100.5 96.4 $9.6788 per $100 assessed value for the 2012-2013 tax 2009 99.2 100.3 104.1 94.3 102.6 97.4 94.7 year, up from $8.8410 the year prior. In Arizona, assessed value is based on an assessment ratio of the 2010 97.8 96.5 99.4 97.4 104.0 95.9 95.5 2011 99.6 95.6 99.6 92.0 108.8 98.0 100.9 property’s value, as follows: 2012

102.5

97.8

102.8

103.4

106.6

99.5

102.7

Note: The Sierra Vista-Douglas Micropolitan Area is a statistical area designation for all of Cochise County. Sierra Vista and Douglas are included in the title since they are the principal cities that meet the criteria for establishing Cochise County as a Micropolitan area. The average for all participating places nationwide equals 100 and each participant’s index is read as a percentage of the average for all places. Source: Council for Community and Economic Research (C2ER), Cost of Living Index.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

SIERRA VISTA TRANSACTION PRIVILEGE (SALES) TAX RATES COUNTY CITY OF AND STATE SIERRA VISTA

CATEGORY

SIERRA VISTA PROPERTY TAX RATES, 2012-2013 (PER $100 ASSESSED VALUE)

Privilege Tax

7.10%

1.75%

8.85%

Use Tax – Utilities

7.10%

1.75%

8.85%

Use Tax

6.60%

1.75%

8.35%

Restaurant & Bar

7.10%

2.60%

9.70%

Hotel/Motel

7.05%

5.50%

12.55%

Utilities/Telecommunications

7.10%

2.00%

9.10%

$0.03355

$0.02

$0.05355

Rental of Real Property

——

1.00%

Construction Contracting

6.10%

2.45%

9.55%

Jet Fuel (per gal.)

DISTRICT

TOTAL

PRIMARY SECONDARY TOTAL

2007 . . . . . . . . . . . . . . . . . . . . . . . .43.6

City of Sierra Vista

0.1136

——

0.1136

Buena Elementary School District

2.6159

——

2.6159

2009 . . . . . . . . . . . . . . . . . . . . . . . .35.9

Buena High School District

1.6217

——

1.6217

2010 . . . . . . . . . . . . . . . . . . . . . . . .33.8

Cochise County General Government*2.6276

——

2.6276

Library*

——

0.1451

Flood Control*

——

0.2597

1.7329

——

1.7329

——

0.0906

Cochise College* Fire District Assistance Tax*

Note: Rates as of January 1, 2013. Source: Arizona Department of Revenue and Cochise College Center for Economic Research.

SIERRA VISTA CRIME RATE (PER 1,000 RESIDENTS)

School District Assistance Tax**

0.4717

——

0.4717

TOTAL

9.1834

0.4954

9.6788

2008 . . . . . . . . . . . . . . . . . . . . . . . .36.7

2011 . . . . . . . . . . . . . . . . . . . . . . . .32.8 Source: Federal Bureau of Investigation (Uniform Crime Reports), U.S. Census Bureau, Arizona Office of Employment and Population Statistics, and Cochise College Center for Economic Research.

Note: Rates are established the third Monday in August. *Rate applies to all property in Cochise County. **Rate applies to all property in Arizona. Source: Cochise County Treasurer and Cochise College Center for Economic Research.

•

Class 1: Mines, mining claim property, and standing timber; local telecommunications, utilities, pipelines, and oil and gas producing; and commercial and industrial real property not included in other classes. Assessment ratio is 19.5 percent, scheduled to decline as follows: 19 percent in 2014; 18.5 percent in 2015, and 18 percent in 2016.

•

Class 2: Agricultural real property, golf courses, and vacant land. Assessment ratio is 16 percent, scheduled to decline to 15 percent in 2016.

•

Class 3: Owner-occupied residential property (10 percent).

•

Class 4: Leased or rented residential property (10 percent).

•

Class 5: Railroads, private car companies, and airline flight property (21 percent).

•

Class 6: Noncommercial historic property, foreign trade zones, military reuse, environmental technology, and environmental remediation property (5 percent).

•

Class 7: Improvements to commercial historic property (1 percent for up to 10 years).

•

Class 8: Improvements to historic residential rental property (1 percent for up to 10 years).

•

Class 9: Possessor interests (1 percent for up to 10 years).

Crime Rate

CRIME RATE (PER 1,000 RESIDENTS), 2011

LOCATION

POPULATION

VIOLENT CRIME

PROPERTY CRIME

ARSON

United States

311,587,816

1,203,564

9,063,173

N/A

10,266,737

6,438,178

26,311

230,422

N/A

256,733

39.9

130,537

N/A

*30.5

Arizona Cochise County

TOTAL CRIME

CRIME RATE (PER 1,000 RESIDENTS) 32.9

Benson

5,077

N/A

Bisbee

5,474

167

259

47.3

Douglas

17,118

N/A

580

N/A

1,827

15.3

Sierra Vista

45,098

145

1,326

1,480

32.8

Tombstone

1,358

101

118

86.9

Huachuca City

Willcox Unincorporated Areas

3,692

232

243

65.8

50,893

367

797

1,180

23.2

N/A = Data not available. *Estimated by the Cochise College Center for Economic Research based on reporting for all areas except Benson and Douglas. Source: Federal Bureau of Investigation (Uniform Crime Reports), U.S. Census Bureau, Arizona Office of Employment and Population Statistics, and Cochise College Center for Economic Research.

The crime rate in Sierra Vista has declined steadily in recent years. In 2011, the rate was 32.8 crimes per 1,000 residents, down from 33.8 in 2010. The 2011 crime rate in Sierra Vista was below state and national levels, but above the countywide rate due primarily to lower levels of crime in the county’s rural unincorporated areas. The crime rate reflects data reported in the Federal Bureau of Investigation’s (FBI) Uniform Crime Report and includes violent crimes (murder and non-negligent manslaughter, forcible rape, robbery, and aggravated assault), property crimes (burglary, larceny-theft, and motor vehicle theft) and arson.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

IHOP Restaurant

economic development Overview Since 1985, the City of Sierra Vista has maintained a close working relationship with, and has made a significant investment in, the Sierra Vista Economic Development Foundation (SVEDF). City staff works closely with SVEDF and other stakeholder agencies on wide ranging projects. Over the past several years, the mayor and city council have expressed interest in increasing the city’s role in local economic development efforts. In early 2013, the city hired a consultant to facilitate development of a collaborative, community-wide economic development vision to help determine the city’s appropriate role in the process. Together with a full analysis of strengths, weaknesses, opportunities, and threats (SWOT) of the area’s potential, the analysis will lead to the creation of short and long term strategies designed to enhance city partnerships and investment in economic development over the next several years. For more information, visit www.SierraVistaAZ.gov.

Sierra Vista Economic Development Foundation The Sierra Vista Economic Development Foundation (SVEDF) has been incorporated as a nonprofit 501(c)(3) corporation since 1985. Its mission and purpose is to increase the economic strength of Sierra Vista and to diversify the region's economy through the provision of resources to existing businesses and recruitment of top-performing industries to the greater Sierra Vista area. SVEDF promotes community development through media exposure, to include serving as a spokesperson on economic operations and strategies at conferences throughout the region, and providing commentary on a variety of economic topics to various media sources; local business development, including a business enrichment program to help entrepreneurs deal with obstacles to success; provision of co-space for business startups with onsite counseling and financial assistance; recruitment of new companies to the Sierra Vista area, to include assistance in site selection, site certification, deal negotiation, and customized demographic reports; business support and resource referral, including personal counseling sessions on organizational issues, revenue reductions, and expansion plans; and the establishment and maintenance of partnerships with other agencies, the City of Sierra Vista, Cochise County, and the State of Arizona. For more information, visit www.svedf.org.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Sierra Vista Industrial Development Authority The Sierra Vista Industrial Development Authority (IDA) promotes industry and trade by inducing manufacturing, industrial, and commercial enterprises to locate to the city. In 1985, the IDA formed the Sierra Vista Economic Development Foundation (SVEDF) to promote industrial and commercial growth, and the IDA became the principal nonprofit organization that provides financial assistance and leadership to stimulate development of qualified projects with an emphasis on affordable housing. In 2004, the IDA established Sierra Housing Resource Partner, Inc., a 501(c)(3) set up to develop low-income housing. In the city’s West End, the Crossing Point community, developed in partnership with the Sierra Vista Industrial Development Authority, is a 57-unit affordable housing development. The Crossing Point community offers moderately priced two-story, three- and four-bedroom homes with down payment assistance for those who qualify. For more information on the IDA, call (520) 458-1666 or email frank@fwpc.net.

Sierra Vista Municipal Airport Sierra Vista Municipal Airport, a civilian/military joint-use airport, serves southeastern Arizona and northern Mexico sharing runways with Fort Huachuca’s Libby Army Airfield. The military owns and operates land and facilities on the south side of the airport including the control tower, while the city owns 75 acres on the north side including hangars and tie-down sites, which it leases out. Hangar access is available 24hours a day, seven days a week, through electrically operated security gates. Self-fueling services are available. The airport has three runways: Runway 08-26 is 12,001 feet long by 150 feet wide and is constructed of reinforced concrete; Runway 12-30 is 5,365 feet long by 100 feet wide, constructed of asphaltic concrete; and Runway 03-21 is 4,300 feet long by 75 feet wide, also constructed of asphaltic concrete. Currently, there is no commercial air service to the Sierra Vista Municipal Airport. For more information, visit www.SierraVistaAZ.gov.

West End Development Sierra Vista’s West End (west of Seventh Street to Buffalo Soldier Trail, and north of Golf Links Road to State Highway 90) has been the focus of redevelopment efforts by the city in recent years due to its potential to advance small business ownership and entrepreneurship. The area is the oldest community in the city and includes most of the original area that made up Sierra Vista when it was first incorporated in 1956. City staff has worked with residents, business owners, Fort Huachuca officials, West End Commissioners, and other community leaders to develop strategies to revitalize the area and promote private investment and redevelopment. The city offers several incentives to encourage redevelopment in the West End, to include an expedited review process and flexibility regarding issues such as parking requirements, setbacks, and height limitations. The city also gives consideration to fee waivers for development in the West End. Commercial projects that replace existing structures automatically qualify for a development fee waiver.

Quality of Life A primary focus of the city’s economic development efforts in recent years has been the enhancement of quality of life factors that help lure new businesses and residents to the area. This includes parks, well designed and maintained streets, affordable neighborhoods, cultural and recreational opportunities, dining and shopping opportunities, successful commercial districts, open space, a system of bicycle and walking/multiuse paths throughout the city, and other amenities. In 2012, the city accepted the donation of the King’s Court Tennis Club and Sports Gallery Bar & Grill and has initiated a process to obtain community input on potential uses for the facility. Other city facilities developed in recent years to promote quality of life include Centennial Pavilion, which provides a venue for performances ranging from intimate events to fullscale concerts; Ethel H. Berger Center, which includes an active-adult lounge, activity rooms, dance studio, the Henry F. Hauser Museum, horseshoe pits, kitchen and dining room, and stage; Oscar Yrun Community Center, which offers activity rooms, auditorium, arts and crafts studio, shuffleboard, and tennis courts, in addition to providing the location of the Sierra Vista Visitor's Center and Sierra Vista Aquatic Center (“The Cove”), which provides beach entry, wave pool, children's lagoon with slide, diving pool, sunning decks, lap and competition lanes, 150-foot tube water slide, party area, snack bar, warm water pool, and a walking path. As of early 2013, the city was planning to open a new youth center.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Our Future Vistas – City Council Strategic Leadership Plan Since 2007, the Sierra Vista City Council has used “Our Future Vistas”—a two-year strategic leadership plan process. The document provides a vision for the future, supported by focus areas, goals, and objectives. In spring 2013, the city council will develop a new strategic plan to cover the next two fiscal years. The plan guides budget investments and staff time on programs, issues, and projects identified as priority items. For a downloadable copy of the current strategic plan, visit www.SierraVistaAZ.gov.

Environmental Codes Current city code requires developers to use water saving devices in new construction, including waterless urinals in commercial buildings and hot water recirculating pumps in new residential construction. City codes also impact landscaping decisions by eliminating turf in new commercial landscapes in favor of low-water-use plants, and limiting turf in the front yards of new homes to 200 square feet. Codes also prohibit water misters in commercial development, and require new car wash facilities to recycle 75 percent of their water and new commercial developments to build on-site detention basins. For more information, visit www.SierraVistaAZ.gov.

Foreign Trade Zone Cochise County has industrial property designated as a foreign-trade zone (FTZ-139). Companies located in the FTZ can use special procedures that allow delayed or reduced duty payments on foreign merchandise. Other benefits include no duties or quota charges on re-exports; deferred customs duties and federal excise tax on imports; in cases where manufacturing results in a finished product that has a lower duty rate than the rates on foreign inputs (inverted tariff), the finished products may be entered at the duty rate that applies to its condition as it leaves the zone (subject to public interest considerations); access to streamlined customs procedures such as weekly entry or direct delivery; and exemption from state/local inventory taxes for foreign and domestic goods held for export. Merchandise in a zone may be assembled, exhibited, cleaned, manipulated, manufactured, mixed, processed, relabeled, repackaged, repaired, salvaged, sampled, stored, tested, displayed, and destroyed. Retail trade is prohibited in the zone. For more information, contact the Sierra Vista Economic Development Foundation at (520) 458-6948 or hollism@svedf.org.

Arizona Quality Jobs Tax Credit The Arizona Quality Jobs Tax Credit (QJTC) program offers incentives to encourage business investment and creation of high-quality employment opportunities. Within Cochise County, including all municipalities and unincorporated areas, employers creating 5 or more jobs and making capital investment of at least $1 million are eligible for up to $9,000 in Arizona income or premium tax credits per new job over a 3-year period with provisions to carry forward unused amounts for up to 5 consecutive taxable years. To qualify, net new jobs must be full-time permanent positions that pay at least the median county wage ($32,739 for 2012) and the employer must offer to pay at least 65 percent of health insurance costs of the employee. The program is capped at 10,000 jobs claimed each year by all participants statewide, and each taxpayer is limited to credits for a maximum of 400 new jobs per year. For more information, visit www.azcommerce.com.

Arizona Competitive Incentives, Programs, and Grants The Arizona Competitiveness Package (HB2001) is economic development legislation offering a host of programs and incentives including more than $200 million in refundable tax credits, reimbursable grants, and property tax reductions; tax-exempt bond financing for specific projects; loan programs to stimulate financing to small businesses and manufacturers; the Arizona Innovation Challenge, which awards a total of $1.5 million to the most promising technology ventures that participate in the Challenge (awards may range from $100,000 to $250,000); renewable energy incentives; training programs; and other incentives. For more information, visit www.azcommerce.com.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

SouthEastern Arizona Governments Organization (SEAGO) SEAGO is a Council of Governments serving local and tribal governments in the four-county region of Cochise, Graham, Greenlee, and Santa Cruz counties and is a designated Economic Development District (EDD) by the U.S. Economic Development Administration. The SEAGO EDD program assists distressed areas, planning regions, cities, and counties in economic development planning, policymaking, and implementation. As an EDD, SEAGO has responsibility for developing the Regional Comprehensive Economic Development Strategy (CEDS), a wide-ranging guide to economic development initiatives throughout the region. The CEDS process, which includes input from member entities, enables SEAGO members to apply for federal grant funding. For more information, visit www.seago.org.

Cochise College Small Business Development Center (SBDC) The SBDC sponsors workshops and seminars specifically for small business owners and provides free one-on-one counseling on small business topics including marketing, financial planning, business planning, computer information systems, human resource management, government procurement, and recordkeeping. The SBDC also makes available a library of business resources including many of the latest small business books, videos, audio, newsletters, and magazines. For more information call (520) 515-5478 or email sbdc@cochise.edu.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Buena school house

education Primary and Secondary Education SIERRA VISTA UNIFIED SCHOOL DISTRICT The Sierra Vista Unified School District (SVUSD) consists of one high school, one middle school, and six elementary schools. The district’s total enrollment as of October 1, 2011 was 5,562, down 5.8 percent from the year prior. In 2012, voters approved membership of the district’s Buena High School in the Cochise Joint Technical Education District (JTED). Membership will lead to greater funding for career and technical education (CTE) programs through a local property tax with additional three-to-one state funding. With the 2012 approval of Buena High membership, along with simultaneous approval of Bisbee High in that city, all high schools in Cochise County are now members of the JTED. Based on 2012 CTE enrollment, Buena High School has the potential to generate more than $740,000 in additional funding for CTE programs through the local property tax and state funding. Current plans are to expand marketing, culinary arts, sports medicine, automotive technology, and engineering sciences programs and potentially implement construction technology, fire science, police science, information technology, heating ventilation and air conditioning, and unmanned aerial systems programs. The Arizona A-F Letter Grade Accountability System, a program within the Arizona Department of Education (ADE), evaluates each Arizona school and assigns a letter grade with respect to the school’s performance on Arizona's Instrument to Measure Standards (AIMS) and how much students grow academically each year. Other factors such as dropout rate, graduation rate, and English language learner reclassification rate are taken into consideration, when applicable. A parallel model to evaluate alternative schools, accommodation schools, extremely small schools, and K-2 schools takes into account unique characteristics of those schools. Ratings follow the traditional academic letter grade system of A for excellent, B for above average, C for average, D for below average, and F for failing (a grade of F is assigned to schools that score a D for 3 consecutive years and are placed in school improvement by ADE). For alternative schools, the grade is further designated with –ALT (e.g., A-ALT, B-ALT, etc.). For the 2011-2012 school year, Carmichael Elementary and Town & Country Elementary were rated C. All other schools in SVUSD were rated B. In fiscal year 2011, the student/teacher ratio in SVUSD was 19.2 to 1, which was higher than the statewide

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

average of 18.1 and peer average of 15.1. The average experience for teachers at SVUSD in 2011 was 12.2 years, compared to 10.9 statewide and a peer average of 11.1. The average teacher salary in SVUSD in fiscal year 2011 was $44,507, higher than the peer average of $39,479 but lower than the statewide average of $45,637. The districtâ&#x20AC;&#x2122;s graduation rate in 2010 was 86 percent, considerably higher than the peer average of 77 percent and the statewide rate of 78 percent. SVUSD spent an average of $6,864 per student in 2011, lower than the statewide average of $7,485 and the peer average of $7,026. From 2007 to 2011, total spending per pupil increased by 10 percent while spending in the classroom declined from 56.9 to 53.6 percent. For more information on the Sierra Vista Unified School District, visit www.svusd68.org. FORT HUACHUCA ACCOMMODATION SCHOOLS Fort Huachuca Accommodation Schools (FHAS) consists of one middle and two elementary schools located on Fort Huachuca. FHAS are Arizona public schools that fall under the Arizona Department of Education. As such, enrollment is not limited to military personnel or those associated with the fort. Under the Arizona A-F Letter Grade Accountability System, Colonel Johnston Elementary was rated A, General Myer Elementary was rated B, and Colonel Smith Middle School was rated C for the 2011-2012 school year. For more information on FHAS, visit www.fthuachuca.k12.az.us. CHARTER SCHOOLS In addition to SVUSD and FHAS, Sierra Vista also has five charter schools, which had a combined enrollment of 1,457 students in 2011-2012. In recent years, charter school enrollment has been on the rise, increasing 21.5 percent from 2010 to 2012. For the 2011-2012 school year, Imagine Charter School at Sierra Vista (imaginesierravista.com), Center for Academic Success #1 and Center for Academic Success #5 (www.cas-schools.com), and The Berean Academy (berean-academy.com) were rated C under the Arizona AF Letter Grade Accountability System. PPEP-TEC Colin L. Powell Learning Center (www.ppeptechs.org), an alternative high school, was rated A-ALT. SIERRA VISTA PRIMARY AND SECONDARY SCHOOL ENROLLMENT SCHOOL Sierra Vista Unified School District Apache Middle School (6-8) Bella Vista Elementary School (K-6) Buena High School (9-12)

2009-10

2010-11

2011-12

6,313

5,903

5,562

629

394

417

376

2,414

2,211

1,968

Carmichael Elementary School (K-6)

378

396

409

Huachuca Mountain Elementary School (K-6)

535

613

569

Joyce Clark Middle School (formerly Sierra Vista Middle School) (7-8)

616

779

751

Pueblo Del Sol Elementary School (K-6)

538

613

633

Town & Country Elementary School (K-6)

414

417

400

Village Meadows Elementary School (K-6) Fort Huachuca Accommodation District

395

457

456

1,044

1,023

1,015

Colonel Johnston Elementary School (pre-K-2)

397

377

Colonel Smith Middle School (6-8)

319

295

317

General Myer Elementary School (3-5) Charter Schools

328

351

321

1,199

1,392

1,457

The Berean Schools Academy (K-12)

296

416

464

Center for Academic Success #5 (K-5)

244

291

298

Center for Academic Success #1 (9-12)

174

188

128

Imagine Charter School at Sierra Vista (K-8)

413

434

505

PPEP-TEC Colin L. Powell Learning Center (9-12)

Note: Figures reflect enrollment as of October 1 of each school year. Beginning 2010-11, Apache Middle School closed, Joyce Clark Middle School converted from grades 6-8 to 7-8, and all elementary schools in the Sierra Vista Unified School District converted from K-5 to K-6. Source: Arizona Department of Education and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

DISTRIBUTION OF PER PUPIL SPENDING

ARIZONA A-F LETTER GRADE ACCOUNTABILITY SYSTEM SCHOOL

2011-2012

2010-2011

Sierra Vista Unified School District

Buena High School (9-12)

Joyce Clark Middle School (6-8)

Bella Vista Elementary (K-5)

Carmichael Elementary (K-5)

Huachuca Mountain Elementary (K-5)

Pueblo del Sol Elementary (K-5)

Town & Country Elementary (K-5)

Village Meadows Elementary (K-5)

Fort Huachuca Accommodation District

Colonel Smith Middle School (6-8)

General Myer Elementary School (3-5)

Colonel Johnston Elementary School (pre-K-2)

A-ALT

Total

SIERRA VISTA UNIFIED SCHOOL DISTRICT

PEER

ARIZONA

UNITED STATES

$6,864

$7,026

$7,485

$10,591

Classroom Dollars

$3,678

$3,783

$4,098

$6,456

Non-classroom Dollars

$3,186

$3,243

$3,387

$4,135

Administration

$786

$736

$728

$1,147

Plant Operations

$937

$917

$927

$1,033

Food Service

$299

$351

$375

$404

Transportation

$336

$360

$352

$443

Student Support

$490

$528

$571

$573

Instruction Support

$338

$351

$434

$535

Note: Data for the Sierra Vista Unified School District, peer districts, and Arizona are from 2011; national figures are from 2009. Source: Arizona Office of the Auditor General.

Charter Schools The Berean Academy (K-12) Center for Academic Success #1 (9-12) PPEP-TEC Colin L. Powell Learning Center (9-12) Imagine Charter School at Sierra Vista (K-8)

Center for Academic Success #5 (K-5)

*Small schools, K-2 schools, and alternative schools did not receive letter grades in 2011. Source: Arizona Department of Education.

Postsecondary Educational Opportunities COCHISE COLLEGE Cochise College is a 2-year community college with campuses in Sierra Vista and Douglas and learning centers in Benson, Willcox, and Fort Huachuca. The college also offers classes in Bisbee and online, as well as in neighboring Santa Cruz County. Cochise College offers two-year degrees in a variety of fields, including administration of justice, early childhood care and education, elementary education, secondary education (in several teaching fields), economics, journalism and media arts, mathematics, political science, psychology, social work, business administration, computer information systems, allied health, computer science, engineering, physics, pre-nursing, agriculture, automotive technology, avionics technology, building construction technology, culinary arts, fire science technology, hospitality administration, intelligence operations, paramedicine, professional pilot technology, registered nurse, welding technology, and several other arts and sciences fields. Cochise College also offers certificate programs in several fields, non-credit personal enrichment classes, GED, English Language Acquisition, workforce training, and numerous other learning opportunities through its Center for Lifelong Learning, Adult Education Center, and Small Business Development Center. The college’s Center for Economic Research conducts community outreach activities, tracks trends in the local economy, and publishes local economic research. The college’s athletic programs draw students nationally and internationally. Cochise College is accredited by the Higher Learning Commission of the North Central Association. To learn more, visit www.cochise.edu. UNIVERSITY OF ARIZONA (UA) SIERRA VISTA UA Sierra Vista offers upper-division courses for students to complete undergraduate degree programs in cooperation with Cochise College and other Arizona community colleges. Undergraduate degree programs are offered in anthropology, commerce, computer science, early childhood education, elementary education, English, government and public service, history, informatics, intelligence studies, Latin American studies, mathematics, network administration, and psychology. Undergraduate degree programs in human services, supervision, and family studies and human development, and graduate degree programs in educational technology and secondary education are offered online. UA Sierra Vista is a commuter campus with schedules designed to accommodate working adults and returning students. For more information, visit www.uas.arizona.edu.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

WAYLAND BAPTIST UNIVERSITY Wayland Baptist University has campus locations in Sierra Vista and on Fort Huachuca, catering to working adults to include military, border patrol, and other government employees. Undergraduate degree programs are offered in management, business administration, computer information systems, teacher education, justice administration, human services, Christian ministry, and occupational education. Graduate degree programs are offered in management, business administration, Christian ministry, and public administration. For more information, visit www.wbu.edu. EMBRY-RIDDLE AERONAUTICAL UNIVERSITY Embry-Riddle Aeronautical University on Fort Huachuca offers undergraduate degree programs in aviation business administration, aviation maintenance, professional aeronautics, and technical management, and graduate degree programs in aeronautical science and business administration in aviation. For more information, visit www.erau.edu. HORIZON HEALTH CARE INSTITUTE (HHCI) HHCI is licensed by the Arizona State Board for Private Postsecondary Education to operate as a private, non-accredited vocational school. HHCI is approved by the Arizona State Board of Nursing to conduct a nursing assistant training program and the Arizona Department of Health Services to conduct a caregiver training program. Other training programs include billing and coding for the medical office, clinical medical assistant, dental assistant, electronic health records-front office specialist, entry-level phlebotomy skills workshop, nursing assistant, nursing rehab technician workshop, patient care technician, pharmacy technician, and phlebotomy technician. For more information, visit www.horizonhealthcareinstitute.com.

EDUCATIONAL ATTAINMENT COMPARISONS 40%

2000

35%

20092011

30% 25% 20% 15%

11.2% 7.5%

Bachelor's Degree

Graduate or Professional Degree

Associate Degree

18.5% 18.2%

12.6%

Note: Population 25 years and older. Source: U.S. Census Bureau (20092011 American Community Survey 3-Year Estimates) and Cochise College Center for Economic Research.

10.9%

United States

28.2% Some College 32.1% NO DEGREE

Arizona

High School grad or equivalent 9th to 12th grade

Cochise County

20.7% 22.8%

Sierra Vista

5.3% NO DIPLOMA

BACHELOR’S DEGREE OR HIGHER

5.7%

HIGH SCHOOL GRADUATE OR HIGHER

Less than 9th grade

29.8% 21.4% 26.2% 28.2%

3.0%

10% 91.3% 85.1% 85.4% 85.6%

3.2%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

SIERRA VISTA EDUCATIONAL ATTAINMENT, 2000-2010

Note: Population 25 years and older. Source: U.S. Census Bureau (Census 2000 and 2009-2011 American Community Survey 3-Year Estimates) and Cochise College Center for Economic Research.

Educational Attainment According to the U.S. Census Bureau’s 2009-2011 American Community Survey (ACS), 91.3 percent of Sierra Vista’s population aged 25 years and older has at least a high school diploma or equivalent. This is above countywide, statewide, and national levels. Approximately 29.8 percent of Sierra Vista residents hold a bachelor's degree or higher, which is also higher than county, state, and national levels. Between Census 2000 and the 2009-2011 ACS, the share of Sierra Vista residents aged 25 and older with less than a 9th grade education declined from 3.2 to 3 percent. Over the same period, residents with a 9th to 12th grade education but no high school diploma increased from 5.3 to 5.7 percent. High school graduates (or equivalent) decreased from 22.8 to 20.7 percent, while residents with some college but no degree decreased from 32.1 to 28.2 percent. The share of residents with an associate degree increased from 10.9 to 12.6 percent of the city’s population aged 25 and older, the share with a bachelor’s degree increased from 18.2 to 18.5 percent, and the share of residents with a graduate or professional degree increased from 7.5 to 11.2 percent.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

Sierra Vista Regional Health Center

healthcare Overview In addition to the Sierra Vista Regional Health Center (SVRHC), described in detail below, Sierra Vista is home to a Veterans Administration Community Based Outpatient Clinic, the Raymond W. Bliss Army Health Center on Fort Huachuca (an Ambulatory Health Center supporting TRICARE eligible beneficiaries offering primary care, internal medicine, pediatrics, aviation medicine, behavioral health, physical therapy, sports medicine, optometry, immunizations, nutrition care, occupational health, pharmacy, laboratory, and radiology) and numerous private-practice physicians and healthcare providers. The Cochise County Health Department, with a location in Sierra Vista, offers preventative services and resources.

Sierra Vista Regional Health Center In early 2013, SVRHC announced its intent to partner with Tennessee-based RegionalCare Hospital Partners (RCHP). The partnership would lead to a potential new $100 million, 100-bed hospital in Sierra Vista, funded and constructed by RCHP. A formal agreement on the partnership is anticipated to be complete in spring 2013, with groundbreaking on a new hospital by the end of 2013 and opening in three to four years. In addition to the new hospital, the partnership will give SVRHC access to reduced prices for supplies, equipment, and services, along with other benefits of being part of a network of hospitals. RCHP is a system of seven rural community hospitals in Alabama, Iowa, Texas, Connecticut, Pennsylvania, and Ohio. The partnership with SVRHC would expand this to eight. Currently, SVRHC is an 88-bed, Joint Commission-accredited acute care facility with 70 active, 37 courtesy, and nine Allied Health physicians, along with a full-service laboratory. Helicopter services are based at SVRHC staffed by flight nurses and professional pilots certified in emergency care. Ground transportation, staffed by certified paramedics and emergency medical technicians, is readily available. SVRHC also offers Trauma Telemedicine, which provides a real-time connection to trauma doctors at the University Medical Center in Tucson. SVRHC also operates outpatient clinics in Sonoita, Douglas, and Tombstone.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

OUTPATIENT SURGERY SERVICES Outpatient surgery services include endoscopy, general surgery, gynecological surgery, orthopedics, otolaryngology, urology, and podiatry. The cardiopulmonary services department provides newborn, pediatric, adolescent, adult, and geriatric services. DIAGNOSTIC IMAGING SVRHC’s diagnostic imaging department offers X-ray; multi-slice CT, which includes diagnostics, biopsies, trauma, vascular services, and QCT bone density tests; magnetic resonance imaging (MRI); PET/CT; nuclear medicine; ultrasound; stereotactic biopsy; DEXA scan; breast MRI; cardiac CTA, cardiac scoring, and full-service mammography. INFUSION SERVICES Infusion services include blood transfusions; hydration/infusion; injections; central line maintenance/lab draws; wound care with or without debridement; wound vac dressing changes, and phlebotomies. CRITICAL CARE SERVICES Critical care services include an eight-bed intensive care unit, 12-bed telemetry (step-down) unit, and cardiac catheterization laboratory. MATERNAL CHILD SERVICES The maternal child unit delivers more than 1,400 babies each year and offers an atmosphere of soft low lighting and private birthing rooms. There is an on-unit surgical suite to facilitate quick and efficient return to a private room. The SVRHC nursery is certified by the Arizona Perinatal Trust as a Level II nursery. MEDICAL/SURGICAL The medical/surgical department is SVRHC’s largest department, offering care before and after surgery, observation, recuperation during and after illness, disease management, and wound care.

HOSPITAL MILEAGE CHART Copper Northern Queen Holy Cochise Northwest Benson Community Cross Community Medical Hospital Hospital Hospital Hospital Center

Southeast Sierra Vista Arizona Regional St. Medical Health Joseph’s Center Center Hospital

St. Mary’s Hospital

Tucson Medical Center

Tucson University University Heart Medical Physician Hospital Center Hospitals

Benson Hospital

Copper Queen Community Hospital

118

100

108

Holy Cross Hospital

110

111

Northern Cochise Community Hospital

110

103

Northwest Medical Center

118

103

137

Southeast Arizona Medical Center

111

137

115

120

119

128

118

114 71

Sierra Vista Regional Health Center

St. Joseph’s Hospital

115

St. Mary’s Hospital

100

120

Tucson Medical Center

119

Tucson Heart Hospital

108

128

University Medical Center

118

University Physician Hospitals

114

Source: Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

MEDICAL TELEMETRY/PEDIATRICS The medical telemetry/pediatrics department offers care before and after surgery, observation, recuperation during and after illness, disease management, and wound care. The medical telemetry unit cares for patients who require cardiac monitoring for electrolyte imbalance, and patients who require chemotherapy, COPD, CHF and GI bleeds. For pediatric patients, the department offers oxygen saturation monitoring in addition to basic services. REHABILITATION The rehabilitation services department includes licensed and certified physical, occupational, and speech therapists, assistants, and support professionals who provide regional services to patients of all ages and health conditions and treat the consequences of disease or injury by addressing impairments, functional limitations, and disabilities. The department treats patients with orthopedic conditions, neurologic conditions, acute and general medical conditions, wounds, diabetes, connective tissue conditions, chronic pain, cardiopulmonary/circulatory conditions, amputations, lymphedema, athletic/sports injuries, industrial injuries, hand/wrist/elbow injuries, speech/language conditions, cognitive disorders, and voice disorders. Specialty programs include certified manual therapy, aquatic therapy, wound management, pediatric intervention, hand therapy, functional capacity evaluations, work conditioning/industrial rehabilitation, preoperative teaching classes (TKA & THA), pre-feeding skills, tongue thrust correction, and videofluoroscopy swallow evaluation. SVRHC has two outpatient rehabilitation sites in Sierra Vista. For more information, visit www.svrhc.org.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Dawn to Dust mountain biking. Photo: City of Sierra Vista

population and demographics Population Estimates and Projections The population of Sierra Vista as of July 2012 was 45,794, up 1.5 percent from 2011. If recent trends continue, the city’s population will reach 48,223 in 2017—for average growth of 1.1 percent annually. Because the city is the economic hub of Cochise County, its daytime population is much higher. Sierra Vista accounts for 35 percent of the countywide population but about 70 percent of its retail sales. In 2010, according to the Arizona Department of Transportation, 31,500 vehicles per day traveled through the heart of Sierra Vista’s commercial district. This is projected to increase to 34,000 in 2030. The city also serves a large number of shoppers from Mexico. Based on the share of countywide retail sales, and border-crossing data, Sierra Vista’s retail market serves an estimated population of more than 110,000. Sierra Vista’s population includes Fort Huachuca as a result of the city’s annexation of the fort in 1971. The resident population of Fort Huachuca (those residing on post) was 7,084 as of January 2012, which included 1,079 military personnel and 2,805 military family members residing in on-post family housing, along with approximately 3,200 unmarried or unaccompanied military personnel residing in troop billets, including students assigned temporarily to the fort for training. Many military personnel and their families also reside in Sierra Vista and surrounding communities. POPULATION SIERRA VISTA 1990 2000 2010 2011 2012

COCHISE COUNTY

ARIZONA

POPULATION

GROWTH

POPULATION

GROWTH

POPULATION

GROWTH

32,983 37,775 43,888 45,098 45,794

—— 14.5% 16.2% 2.8% 1.5%

97,624 117,755 131,346 130,537 130,752

—— 20.6% 11.5% -0.6% 0.2%

3,665,228 5,130,632 6,392,017 6,438,178 6,498,569

—— 40.0% 24.6% 0.7% 0.9%

Note: Growth rates shown for 2000 and 2010 reflect preceding 10-year period; rates for 2011 forward are annual. Source: U.S. Census Bureau, Arizona Office of Employment and Population Statistics, and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

POPULATION PROJECTIONS YEAR 2013 2014 2015 2016 2017

SIERRA VISTA 46,098 46,401 47,008 47,615 48,223

% GROWTH 0.7% 0.7% 1.3% 1.3% 1.3%

COCHISE COUNTY 131,688 132,769 134,166 135,764 137,452

% GROWTH 0.7% 0.8% 1.1% 1.2% 1.2%

Source: County projections by Arizona Office of Employment and Population Statistics; city projections by Cochise College Center for Economic Research.

Race and Ethnicity As of Census 2010, 19.4 percent of Sierra Vista’s population is Hispanic or Latino (of any race), up from 15.8 percent in 2000. Sierra Vista’s Hispanic/Latino population is considerably below that of the county and state (32.4 and 29.6 percent, respectively). Nationally, Hispanics/Latinos account for 16.3 percent of the population. Sierra Vista’s population as of 2010 is 74.5 percent White, 9 percent Black or African American, 1.1 percent American Indian and Alaska Native, 4.1 percent Asian, 0.6 percent Native Hawaiian and other Pacific Islander, and 10.7 percent other (including two or more races combined). (Note: The U.S. Census Bureau considers Hispanic an ethnicity, not a race; therefore, there is no separate racial classification for Hispanics. According to the Census Bureau, people identifying themselves as Hispanic may be of any race.) HISPANIC/LATINO POPULATION 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

SIERRA VISTA RACIAL COMPOSITION

White 74.5%

19.4%

32.4%

Sierra Vista Cochise County

29.6%

16.3%

Arizona

United States

Note: The U.S. Census Bureau considers Hispanic an ethnicity, not a race; thus, there is no separate racial classification for Hispanic. According to the Census Bureau, people identifying themselves as Hispanic may be of any race. Source: U.S. Census Bureau (Census 2010) and Cochise College Center for Economic Research.

Other 10.7% Black/African American 9.0% American Indian or Alaska Native 1.1%

Native Hawaiian or other Pacific Islander 0.6% Asian 4.1%

Note: Discrepancies are due to rounding. The U.S. Census Bureau considers Hispanic an ethnicity, not a race; thus, there is no separate racial classification for Hispanic. According to the Census Bureau, people identifying themselves as Hispanic may be of any race. Source: U.S. Census Bureau, Census 2010; and Cochise College Center for Economic Research.

Age Groups As of Census 2010, the median age of the city’s population is 33.1 years, considerably below 39.7 years for all of Cochise County and the statewide median age of 35.9 years. The generally younger population is largely due to military personnel stationed at Fort Huachuca, who tend to be between the ages of 18 and 40. As of 2010, 77 percent of Sierra Vista’s population is aged 18 years and older (up from 74.2 percent in 2000); 17.5 percent is aged 62 and older (up from 14.6 percent in 2000); and 14.6 percent is 65 and older (up from 12.1 percent in 2000). Although the population is generally younger than countywide and statewide, the fastest-growing age groups in the city between 2000 and 2010 were all in the 60 years and older categories. The fastest-growing age group was 85 years and older, which grew from 0.9 to 1.7 percent of the population, followed by the 75 to 84 years age group (4.1 to 4.9 percent), 60 to 64 (4.2 to 4.8 percent) and 65 to 74 (7.1 to 8 percent). Contributors to growth in the upper age groups include the area’s increasing popularity as a retirement destination, longer life spans, and the aging baby-boomer generation. All age groups 24 years and younger decreased as a share of the population, as did those 35 to 44 years old, between 2000 and 2010.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

SIERRA VISTA CHANGES IN AGE GROUP DISTRIBUTION

SIERRA VISTA AGE GROUPS 85 and over - 1.7%

65-74 8.0%

5-9 6.4% 10-14 5.6%

60-64 4.8%

15-19 7.3%

55-59 4.9%

20-24 8.7%

45-54 11.3% 35-44 11.9%

2000 7.7% 7.1% 6.9% 8.2% 9.0% 15.4% 13.8% 11.0% 4.7% 4.2% 7.1% 4.1% 0.9%

Under 5 - 7.5%

75-84 4.9%

25-34 16.9%

Note: Discrepancies are due to rounding. Source: U.S. Census Bureau, Census 2010; and Cochise College Center for Economic Research.

Under 5 5 to 9 10 to 14 15 to 19 20 to 24 25 to 34 35 to 44 45 to 54 55 to 59 60 to 64 65 to 74 75 to 84 85 and over

2010 7.5% 6.4% 5.6% 7.3% 8.7% 16.9% 11.9% 11.3% 4.9% 4.8% 8.0% 4.9% 1.7%

Source: U.S. Census Bureau (Census 2000 and Census 2010) and Cochise College Center for Economic Research.

Household Characteristics As of Census 2010, the average household size in Sierra Vista is 2.39 persons, down from 2.48 in 2000. The declining household size is likely due to the growing population of those aged 55 and older—empty nesters who tend to have smaller household sizes. As of 2010, 65.3 percent of Sierra Vista households are families, down from 70.4 percent in 2000. A total of 32.3 percent of households have children under 18 years old (down from 37.3 percent) and 26.4 percent have seniors 65 and older (up from 22.1 percent). A total of 6.7 percent of Sierra Vista households are headed by single mothers, slightly higher than 6.4 percent countywide but below 7.1 percent statewide. As of the 2009-2011 American Community Survey, 12.8 percent of Sierra Vista’s population had relocated to the city within the previous year from outside Cochise County. The high relocation rate, which is nearly two-and-a-half times the national rate, is attributable to military personnel transferring to and from Fort Huachuca. INCOME COMPARISONS, 2009-2011 $70,000 $60,000 $50,000 $40,000

Military Veterans

$30,000

MEDIAN HOUSEHOLD INCOME

Sierra Vista

MEDIAN FAMILY INCOME

Cochise County

Arizona

$27,158

$22,815

$24,541

$27,448

$62,735

$57,477

$67,260

$53,872

$48,518

$10,000

$51,484

$20,000 $60,055

The median household income in Sierra Vista from 2009 to 2011 was $60,055 (in 2011 dollars). Median family income is $67,260 and per capita income is $27,448. Each measure of income in Sierra Vista is considerably higher than county, statewide, and national levels.

$45,152

Income

PER CAPITA INCOME

United States

Note: All figures expressed in 2011 dollars. Source: U.S. Census Bureau, 2009-2011 American Community Survey 3-Year Estimates and Cochise College Center for Economic Research.

As of the 2009-2011 American Community Survey, 24.3 percent of Sierra Vista’s population ages 18 and older are civilian veterans of the military, more than two-and-a-half times the national level. This is largely due to the number of Department of the Army civilian positions at Fort Huachuca, as well as defense contracting personnel, many of whom are former members of the military. Also, the large number of retirees in the area has increased the number of civilian veterans, since many retirees once served in the armed forces though perhaps not in connection with Fort Huachuca.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

The second largest employer in Sierra Vista in 2012 was General Dynamics Information Technology, which employed 855 FTE employees

employment Arizona Department of Economic Security The Arizona Department of Economic Security (DES) offers free employment and training services to employers and individuals. DES helps job seekers find employment and offers customized services to employers including special services for those with a large number of vacancies or unusual needs. Employment specialists screen and refer applicants, while employers make final selection. Employment specialists can also write job orders and descriptions, provide assistance with mass recruitment, and conduct on-site visits. DES also provides career guidance, employment skills workshops, and referrals to other training. For more information, visit www.azdes.gov.

Southeast Arizona Workforce Connection Southeast Arizona Workforce Connection (SAWC), formerly Cochise County Workforce Development, is a 501(c)(3) federally funded private, nonprofit corporation offering one-stop services for businesses, job seekers, veterans, soldiers in transition, military spouses, and youth. For businesses, SAWC offers outplacement services; training and retraining; temporary satellite office space for business access to computers, printer, copier, phone, fax, and internet; and assistance to business closure. For job seekers, SAWC offers career development information, job-search resources, and training programs. For more information, visit seazworkforce.org.

Employment, Unemployment, Labor Force, and Job Growth According to estimates by the Arizona Office of Employment and Population Statistics (EPS), Sierra Vista saw a net loss of 237 jobs in 2012 for job growth of -1.3 percent. Sierra Vista’s annual unemployment rate in 2012 was 7.6 percent, which was below the countywide rate of 7.9 percent, the statewide rate of 8.3 percent, and the national rate of 8.1 percent. The city’s unemployment rate in 2012 was down from 8 percent in 2011. In December 2012, Sierra Vista’s seasonally adjusted monthly unemployment rate was 7.4 percent.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

UNEMPLOYMENT RATE

UNEMPLOYMENT RATE SIERRA VISTA

COCHISE COUNTY

ARIZONA

UNITED STATES

12.0%

2008

3.4%

5.7%

6.0%

5.8%

10.0%

2009

4.8%

7.9%

9.9%

9.3%

2010

5.4%

8.8%

10.5%

9.6%

2011

8.0%

8.8%

9.5%

8.9%

2012

7.6%

7.9%

8.3%

8.1%

Source: U.S. Bureau of Labor Statistics, Arizona Office of Employment and Population Statistics, and Cochise College Center for Economic Research.

2008

X ◆

8.0% 6.0% X

X ◆

◆

◆ 4.0%

SIERRA VISTA LABOR MARKET DATA

◆

CIVILIAN LABOR FORCE

JOB EMPLOY- UNEMPLOY- JOB GROWTH MENT MENT GAINS RATE

18,902

18,259

643

692

3.9%

2009

19,625

18,681

944

422

2.3%

2010

19,521

18,474

1,047

-207

-1.1%

2011

20,423

18,796

1,627

322

1.7%

2012

20,075

18,559

1,516

-237

-1.3%

Source: Arizona Office of Employment and Population Statistics and Cochise College Center for Economic Research.

2.0% 0.0% 2008 ◆ Sierra Vista Cochise County

X Arizona

2009

2010

2011

2012

Source: U.S. Bureau of Labor Statistics, Arizona Office of Employment and Population Statistics, and Cochise College Center for Economic Research.

United States

According to EPS estimates, the 2012 civilian labor force in Sierra Vista consisted of 20,075 potential workers, of whom 18,559 were employed. The civilian labor force consists of those persons 16 years and older residing in the city who either are employed or are actively seeking work, and excludes active duty military personnel. The city also draws from the labor forces of surrounding communities. Countywide, the 2012 civilian labor force, according to EPS estimates, consisted of 60,049 actual or potential workers, of whom 55,286 were employed.

Occupations and Classes of Workers According to the U.S. Census Bureau’s 2009-2011 American Community Survey, 41.6 percent of workers residing in Sierra Vista are employed in management, business, science, and arts occupations, 23.9 percent are employed in sales and office occupations, and 22.3 percent are employed in service occupations. Natural resources, construction, and maintenance occupations employ 8.2 percent, while production, transportation, and material moving occupations employ 3.9 percent. Of Sierra Vista workers, 65.9 percent are private wage and salary and 28.5 percent are government workers. Self-employed workers in unincorporated businesses account for 5.7 percent of Sierra Vista workers. SIERRA VISTA OCCUPATIONS

SIERRA VISTA CLASSES OF WORKERS

INDUSTRIES IN SIERRA VISTA (BY SHARE OF WORKFORCE)

Service

Public Admin

22.3%

18.7% Management, Business, Science, and Arts

Sales and Office

Private Wage and Salary

19.3%

65.9% Government

41.6%

23.9%

28.5%

3.9% Production, Transportation, and Material Moving

8.2%

Source: U.S. Census Bureau (2009-2011 American Community Survey 3Year Estimates) and Cochise College Center for Economic Research.

Self Employed

Prof, Scientific, Mgmt, Admin, & Waste Mgmt

Other

21.8%

18.1% 12.2%

5.7% Natural Resources, Construction, and Maintenance

Education Services, Health Care, & Social Assistance

Unpaid Family Workers 0.2%

Source: U.S. Census Bureau (2009-2011 American Community Survey 3Year Estimates) and Cochise College Center for Economic Research.

9.9% Retail Trade

Arts, Entertainment, Recreation, Accommodation, & Food Svc Note: Includes only industries accounting for at least 5 percent of the workforce; industries accounting for less than 5 percent are grouped in the category “other.” Source: U.S. Census Bureau (2009-2011 American Community Survey 3-Year Estimates) and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Industries The industry grouping employing the largest number of Sierra Vista workers is educational services and health care, and social assistance at 19.3 percent, as of the 2009-2011 American Community Survey. This is followed by public administration (18.7 percent), professional, scientific, management, administrative, and waste management services (18.1 percent), arts, entertainment, recreation, accommodation, and food services (12.2 percent), and retail trade (9.9 percent). All other industries each employ fewer than 5 percent of Sierra Vista workers.

SIERRA VISTA BUSINESS ESTABLISHMENTS BY EMPLOYMENT-SIZE CLASS, 2010 Number of establishments by employment-size class INDUSTRY

TOTAL

1-4

5-9

10-19

20-49

106

Admin, support, waste mgmt, remediation serv. 67

Arts, entertainment, and recreation

Construction

Educational services

0 0

Accommodation and food services

50-99 100-249 250-499 500-999

Finance and insurance

Health care and social assistance

176

Industries not classified

Information

Management of companies and enterprises

Manufacturing

Mining, quarrying, and oil and gas extraction

Other services (except public administration)

109

Professional, scientific, and technical services 124

0 0

Real estate and rental and leasing

Retail trade

173

Transportation and warehousing

Utilities

Wholesale trade

1,091

507

263

150

116

TOTAL

Note: Includes ZIP codes 85635, 85636, and 85650. Source: U.S. Census Bureau and the Cochise College Center for Economic Research.

Major Employers Fort Huachuca is Sierra Vista and Cochise County’s top employer, according to the Cochise College Center for Economic Research’s (CER’s) annual Top 75 Employer Survey. Fort Huachuca has been the top employer in Sierra Vista and Cochise County every year since the CER began conducting the survey in 1999. The fort employed 9,369 fulltime equivalent (FTE) employees in 2012, which includes active duty military personnel and Department of the Army civilian employees. An FTE employee is equal to one fulltime or two part-time employees. The fort also has a large indirect employment impact on Cochise County. According to a 2008 study conducted by The Maguire Company in collaboration with ESI, Fort Huachuca generates and supports 26,921 FTE jobs in Cochise County, which includes the fort’s direct employees, as well as those employed due to government contracts and spending by the fort and its employees. Nearly 83 percent of the indirect and induced employment generated by Fort Huachuca occurs in the county’s retail trade and services industries, according to the study. The second largest employer in Sierra Vista in 2012 was General Dynamics Information Technology, which employed 855 FTE employees, followed by Sierra Vista Unified School District (685), Sierra Vista Regional Health Center (611), and ManTech International Corporation (560). The list includes only those employers that responded to the survey. In some cases, corporate or organizational policies prohibit releasing information regarding the number of workers.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

SIERRA VISTA AREA EMPLOYERS, EMPLOYEES, AND PAYROLL 2006

2007

2008

2009

2010

No. of Business Establishments 1,095 1,136 1,127 1,089 1,091 Number of Employees 15,562 15,989 15,925 15,068 15,655 Annual Payroll $441,190,000 $508,585,000 $493,543,000 $492,851,000 $528,772,000 Annual Payroll Per Employee $28,350 $31,808 $30,992 $32,708 $33,777 Annual Payroll Per Employee Growth 9.0% 12.2% -2.6% 5.5% 3.3% Note: Includes ZIP codes 85635, 85636, and 85650. Does not include government sector or non-employer firms. Source: U.S. Census Bureau and the Cochise College Center for Economic Research.

Most private-sector employers in Sierra Vista are small businesses. According to the U.S. Census Bureau, more than 70 percent of business establishments in Sierra Vista employed fewer than 10 workers as of 2010. More than 46 percent employed fewer than 5 workers each. In 2010, the number of employer business establishments in Sierra Vista increased from 1,089 to 1,091 according to the Census Bureau (this includes only private sector firms with employees). The number of private sector employees increased 3.9 percent to 15,655. Total annual payroll of businesses located in Sierra Vista increased from $492.9 to $528.8 million. On a per-employee basis, private-sector payrolls grew by 3.3 percent in 2010.

SIERRA VISTA’S TOP 25 EMPLOYERS, 2012 NUMBER OF FULLTIME EQUIVALENT (FTE) RANK EMPLOYER EMPLOYEES* 1 Fort Huachuca 9,369 2 General Dynamics Information Technology (GDIT) 855 3 Sierra Vista Unified School District #68 685 4 Sierra Vista Regional Health Center 611 5 ManTech International Corporation 560 6 Aegis Communications Group, Inc. 531 7 Northrop Grumman Corporation 460 8 City of Sierra Vista 380 9 Raytheon Technical Services Company 315 10 Science Applications International Corp. (SAIC) 300 11 TASC, Inc. 293 12 Wal-Mart 290 13 Cochise College 276 14 NCI Information Systems Inc. 269 15 McDonald’s 191 16 Cochise County 154 17 Lawley Automotive Group 152 18 Engility (formerly L3 C2S2) 151 19 Cochise Private Industry Council 139 19 Life Care Center of Sierra Vista 139 21 Fort Huachuca Accommodation School District 135 22 Sulphur Springs Valley Electric Cooperative 105 23 All Star Technical Services 103 24 Lowe’s 99 25 AIRES, LLC 85 *A fulltime equivalent (FTE) employee equals one fulltime employee or two part-time employees. For employers with multiple site locations, the number of FTE employees reflects only those employees reporting to work in Sierra Vista. Note: This list includes only those employers who responded to the CER’s annual top employer survey. Source: Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

HOURLY WAGE COMPARISONS, 2011

ANNUAL WAGE COMPARISONS, 2011

$30.00

$60,000

$25.00

$50,000

$20.00

$40,000

$15.00

$30,000

$10.00

$20,000

$ 5.00 $ 0.00

$10,000

$25.10 $20.88 $21.00 $21.74 AVERAGE HOURLY WAGE

Sierra Vista

Cochise County

$19.29 $16.05 $16.40 $16.57 MEDIAN HOURLY WAGE Arizona

United States

Source: U.S. figures are reported by the U.S. Department of Labor. State and county figures are reported by the Arizona Office of Employment and Population Statistics. City figures are estimated by the Cochise College Center for Economic Research using a census ratio model.

$52,219 $43,441 $43,688 $45,230 $40,134 $33,388 $34,105 $34,466 $ 0.00

AVERAGE ANNUAL WAGE

Sierra Vista

Cochise County

MEDIAN ANNUAL WAGE Arizona

United States

Wages In 2011, the average wage per hour in Sierra Vista was $25.10 ($52,219 annually), considerably higher than countywide, statewide, and nationally. At the county level, the average wage increased 3.9 percent in 2011, compared to statewide growth of 3.1 percent. Wage growth in Cochise County was the fourth highest of Arizonaâ&#x20AC;&#x2122;s 15 counties in 2011, behind La Paz, Gila, and Pinal counties. In recent years, the gap between wages in Cochise County and statewide has narrowed considerably and has nearly been eliminated. In 2004, Cochise County wages were 8.9 percent below the statewide average. This narrowed to 0.6 percent in 2011.

Cochise County Employment In 2012, Cochise County lost 50 nonfarm jobs for job growth of -0.1 percent. Industries that saw positive job growth were construction, manufacturing, educational and health services, leisure and hospitality, other services, and trade, transportation, and utilities. The number of jobs in financial activities and the information industry stabilized at 2011 levels in 2012. Professional and business services lost jobs in 2012. Federal, state, and local government jobs in Cochise County stabilized at 2011 levels in 2012.

Outlook The largest threat to labor market improvement in Sierra Vista and Cochise County comes from defense budget cuts that are the natural upshot of winding down two wars. While the rest of the state and nation suffered through the severe effects of the Great Recession, Cochise County was largely buffered from the worst of it due to increased defense spending on the fort and its missions. Those increases were largely tied to the wars in Iraq and Afghanistan. The local economy has already taken a hit from a decline in defense spending. Changes in travel policy for military personnel on temporary duty to Fort Huachuca now require many to be housed on post instead of in the local economy. Also, defense budget cuts have slowed temporary duty travel to the fort overall for conferences and other official business. This has impacted the local hospitality industries that cater to those on temporary duty. Aside from declines in temporary duty to the fort, other changes are having, and will continue to have, an impact. Many defense contracts have not been renewed and those jobs are now performed by government civil servants who tend to be paid less. The result is an overall decline in disposable income in the area, which impacts retail and other industries. Also, the trend has been to replace contractor positions with fewer civil servants resulting in an overall decline in employment. With a national debt exceeding $16 trillion and an annual budget deficit still close to $1 trillion, budget cuts will be made. As the national economy improves, more cuts will be politically palatable to Congress and the White House. With the ending of two wars, defense spending will be hit especially hard. Fort Huachuca is not likely to be hit as hard as other installations due to its critical missions of unmanned aerial systems, intelligence, communications, and combatting terrorism; however, considerable cuts should be expected. On the positive side, Sierra Vista Regional Health Center recently announced its intent to partner with Tennessee-based RegionalCare Hospital Partners (RCHP), which would potentially lead to a new $100

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

million, 100-bed hospital in Sierra Vista, funded and constructed by RCHP. A formal agreement on the partnership is anticipated to be complete in spring 2013, with groundbreaking on a new hospital by the end of 2013 and construction continuing for three to four years. Healthcare is a growing industry and longer life spans, an aging baby boomer population, and advances in healthcare technology will continue that trend. As the national economy continues to recover, and housing markets in other areas of the nation improve, the Sierra Vista area is likely to see a resumption of the influx of retirees to the area, which will ensure a sustained demand for healthcare. Moreover, updated healthcare facilities have the potential to lure more businesses and residents to the area, providing a boon to economic development efforts. The building of a new hospital, if all goes according to plan, will give a boost to the construction industry and create jobs. The ripple effects will help other industries in the area, as well.

A NOTE ON EMPLOYMENT DATA Employment data are widely regarded as one of the most important economic indicators; however, they are subject to sizable revisions. For the most up-to-date employment data for the local economy, visit the CERâ&#x20AC;&#x2122;s website at www.cochise.edu/cer.

COCHISE COUNTY NON-FARM PAYROLL EMPLOYMENT 2012

2011

CHANGE

% CHANGE

Total Non-farm

36,925

36,975

-50

-0.1%

Total Private

24,125

0.0%

Goods Producing

2,000

1,925

3.9%

Construction*

1,475

1,425

3.5%

Manufacturing

550

525

4.8%

Service-Providing

34,925

35,025

-100

-0.3%

22,125

22,200

-75

-0.3%

Trade, Transportation, and Utilities 6,325

6,250

1.2%

650

0.0%

Private Service-Providing Information

650

Financial Activities

925

0.0%

Professional and Business Services 5,050

5,250

-200

-3.8%

Educational and Health Services

4,200

4,175

0.6%

Leisure and Hospitality

4,050

4,000

1.3%

Other Services

950

925

2.7%

12,800

12,850

-50

-0.4%

Federal Government

5,900

0.0%

State and Local Government

6,925

0.0%

Government

*Includes mining. Note: Numbers are rounded to the nearest 25. Discrepancies are due to rounding. Source: Arizona Office of Employment and Population Statistics and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Chili's Restaurant

retail trade and commerce Sierra Vista Area Chamber of Commerce With a membership of more than 600, the Sierra Vista Area Chamber is the largest business organization in Cochise County. Its mission is to promote business and provide leadership for the improvement of the community. The chamber’s goal is to support the local business community and to partner with other area agencies to help create a strong local economy, in particular the long term viability of Fort Huachuca. To this end, the chamber offers a wide variety of resources and marketing tools to help local businesses grow. Its main focus is on business retention and providing opportunities for area business owners and managers to network and promote their goods and services. The non-profit organization, which is a self-funded 501(c)(6), is also active in the legislative arena. It acts as a voice on behalf of the business community and works to keep its members informed on local, state, and national issues. For more information, visit sierravistachamber.org.

Population Served by Sierra Vista’s Retail Market Although the population of the incorporated limits of Sierra Vista was 45,794 in 2012, the city’s retail market serves a population nearly two-and-a-half times that size. Sierra Vista accounts for 35 percent of the population of Cochise County, yet it accounts for two-thirds of its retail sales making it the economic hub of the county. In 2010, according to the Arizona Department of Transportation, 31,500 vehicles per day traveled along State Route 92 between East Foothills Drive and Snyder Road, through the heart of Sierra Vista’s commercial district. This is projected to increase to 34,000 by 2030. The city also serves a large number of shoppers from Mexico (for more on this, see the Mexico section of this publication). Based on the share of countywide retail sales, and border-crossing data, the CER estimates Sierra Vista’s retail market currently serves a population of more than 110,000.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

AVERAGE ANNUAL DAILY TRAFFIC COUNT, SIERRA VISTA AREA LOCATION

2006

2007

2008

2009

2010

Ft Huachuca (N Gate) to Ft Huachuca (E Gate) 17,400 18,500 18,500 19,000 19,000 Fort Huachuca (East Gate) to 7th St

15,000 16,000 16,500 13,000* 20,500

7th Street to Coronado Dr/San Xavier Rd

17,200 16,000 16,500 18,500 19,500

Coronado/San Xavier to Charleston/MLK Pkwy 17,700 17,500 18,000 16,500 17,000 Charleston Rd/MLK Pkwy to SR 92/Fry Blvd

15,200 14,500 14,500 25,000 24,000

SR 92/Fry to Giulio Cesare/Avenida Del Sol

17,000 17,500 18,000 19,000 19,000

Giulio Cesare/Avenida Del Sol to Moson Rd

8,400

8,600

8,700

9,900

9,800

Moson Rd to SR 80

3,500

4,000

3,600

4,000

4,100

SR 90/Fry Blvd to East Foothills Dr

27,800 29,000 29,000 30,000 30,000

East Foothills Dr to Snyder Rd

26,600 25,000 25,500 31,000 31,500

Snyder Blvd to Avenida Cochise

24,700 26,000 26,500 27,000 27,000

Avenida Cochise to Buffalo Soldier Trail

20,700 21,500 21,500 22,000 22,000

Buffalo Soldier to Glenn Ave/Kachina Trail

22,500 25,500 26,000 22,500 22,500

Glenn/Kachina to Ramsey Canyon/Ramsey Rd 19,900 20,500 21,000 19,000 19,000 Ramsey Canyon/Rd to Hereford Rd - Nicksville 11,800 11,500 10,500 10,500 10,500 *Decline attributable to construction at Fort Huachuca’s East Gate. Note: Figures are rounded to nearest hundred. Source: Arizona Department of Transportation and Cochise College Center for Economic Research.

Taxable Sales In 2012, the City of Sierra Vista collected $16.6 million in sales tax revenue, down 1.8 percent from the previous year. The largest sales tax revenue generator was retail trade, which accounted for 52.5 percent of the total. This was followed by restaurant and bar (10.8 percent) and communications and utilities (9.9 percent). The construction industry generated the most new sales tax dollars in 2012, increasing by 12.1 percent and bringing in nearly $118,000 in additional tax revenue. Seven of 13 industries brought in more tax revenue in 2012 than the previous year. SIERRA VISTA SALES TAX REVENUE BY INDUSTRY GROUP, 2012 INDUSTRY GROUP Retail Trade Restaurant & Bar Communications & Utilities Real Estate, Rental & Leasing Construction Accommodation Services Manufacturing Other Wholesale Trade Finance & Insurance Transporting & Warehousing Arts & Entertainment TOTAL

SALES TAX REVENUE $8,695,224 $1,791,836 $1,632,235 $1,284,461 $1,089,537 $999,941 $484,159 $253,705 $157,257 $143,679 $9,875 $9,390 $7,926 $16,559,215

SHARE OF TOTALSALES TAX REVENUE 52.5% 10.8% 9.9% 7.8% 6.6% 6.0% 2.9% 1.5% 0.9% 0.9% 0.1% 0.1% 0.0%

Source: Arizona Department of Revenue and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

SIERRA VISTA SALES TAX REVENUE COLLECTIONS, ANNUAL COMPARISON INDUSTRY GROUP Construction Other Communications & Utilities Services Wholesale Trade Finance & Insurance Arts & Entertainment Transporting & Warehousing Manufacturing Real Estate, Rental & Leasing Restaurant & Bar Retail Trade Accommodation TOTAL

2012 $1,089,537 $157,257 $1,632,235 $484,159 $143,679 $9,875 $7,926 $9,390 $253,705 $1,284,461 $1,791,836 $8,695,224 $999,941 $16,559,215

2011 $971,872 $57,020 $1,537,638 $425,739 $127,580 $6,278 $6,258 $9,936 $276,902 $1,348,937 $1,937,648 $8,849,684 $1,313,296 $16,868,784

GROWTH ($) $117,665 $100,237 $94,597 $58,420 $16,099 $3,597 $1,668 -$546 -$23,197 -$64,476 -$145,812 -$154,460 -$313,355 -$309,569

GROWTH (%) 12.1% 175.8% 6.2% 13.7% 12.6% 57.3% 26.7% -5.5% -8.4% -4.8% -7.5% -1.7% -23.9% -1.8%

Source: Arizona Department of Revenue and Cochise College Center for Economic Research.

Retail Sales In the first 11 months of 2012, retail sales in Sierra Vista were down by 1.8 percent in real (inflationadjusted) terms, compared to the same period the year prior. This was the fifth consecutive year of decline. For most of 2012, Sierra Vista’s monthly retail sales alternated between positive and negative growth compared to the same months the year prior, with sales down in 4 of 7 months from May through November. Sierra Vista’s retail sales in the first 11 months of 2012 accounted for 64.9 percent of the countywide total, down from 67.3 percent in the same period of 2011. According to the U.S. Census Bureau, as of 2010 there were 173 employer business establishments in Sierra Vista whose primary business was retail trade, down from 180 the year prior. SIERRA VISTA RETAIL SALES

YEAR

SALES

% CHANGE

INFLATIONADJUSTED GROWTH

2007

$528,011,943

5.4%

2.6%

2008

$513,395,543

-2.8%

-6.6%

2009

$504,423,943

-1.7%

-1.4%

2010

$507,068,457

0.5%

-1.1%

2011

$495,431,943

-2.3%

-5.5%

2012*

$445,668,343

0.3%

-1.8%

*January through November only; percent change and inflation-adjusted growth based on same period a year prior. Note: Data shown are estimates. Inflation-adjusted growth is calculated using the inflation rates as determined by the Consumer Price Index (CPI). Source: Arizona Department of Revenue and Cochise College Center for Economic Research.

SIERRA VISTA SHARE OF COUNTYWIDE SALES CATEGORY

2008

2009

2010

2011

2012*

Retail

66.2%

68.2%

69.0%

67.1%

64.9%

Restaurant & Bar 51.4%

52.3%

53.9%

55.5%

52.4%

Accommodation

54.6%

55.9%

57.7%

51.4%

50.7%

*January through November only. Source: Arizona Department of Revenue and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Restaurant and Bar Sales In the first 11 months of 2012, restaurant and bar receipts in Sierra Vista were down 10.3 percent from the same period of 2011, after adjusting for inflation. This followed three consecutive years of sales growth. The city’s restaurant and bar sales were down in 16 of the 22 months ended in November 2012. From January through November 2012, Sierra Vista’s restaurant and bar sales accounted for 52.4 percent of the countywide total, down from 55.6 percent in the same period of 2011. Prior to 2012, Sierra Vista’s share of countywide restaurant and bar sales increased steadily each year from just 43.1 percent in 2007. This was largely the result of the opening of several new chain restaurants, including Buffalo Wild Wings, IHOP, My Big Fat Greek Restaurant (which closed in early 2013), Olive Garden, Outback Steakhouse, Panda Express, and Texas Roadhouse.

SIERRA VISTA RESTAURANT & BAR SALES

SIERRA VISTA ACCOMMODATION SALES

YEAR

SALES

% CHANGE

INFLATION ADJUSTED GROWTH

2007

$18,699,564

23.9%

21.1%

YEAR

SALES

% CHANGE

INFLATION ADJUSTED GROWTH

2007

$64,832,192

5.7%

2.9%

2008

$66,034,769

1.9%

-2.0%

2008

$23,046,036

23.2%

19.4%

2009

$67,166,692

1.7%

2.1%

2009

$22,499,564

-2.4%

-2.0%

2010

$70,375,231

4.8%

3.1%

2010

$25,337,345

12.6%

11.0%

2011

$74,541,692

5.9%

2.8%

2011

$23,581,436

-6.9%

-10.1%

2012*

$62,862,385

-8.2%

-10.3%

2012*

$16,656,982

-24.5%

-26.6%

*January through November only; percent change and inflation-adjusted growth based on same period a year prior. Note: Inflation-adjusted growth is calculated using the inflation rates as determined by the Consumer Price Index (CPI). Data shown are estimates. Source: Arizona Department of Revenue and Cochise College Center for Economic Research.

Accommodation Sales From January through November 2012, accommodation receipts in Sierra Vista were down 26.6 percent from the same period the year prior, after adjusting for inflation. This followed a 10.1 percent decrease in 2011. From January through November 2012, Sierra Vista’s accommodation sales accounted for 51.4 percent of the countywide total, down from 57.8 percent in the first 11 months of 2011. The city’s accommodation industry has struggled over the past couple of years with sales down in 20 of the 22 months ended in November 2012. Part of the decline is due to changes in travel policy for military personnel on temporary duty to Fort Huachuca, requiring many to now be billeted on post. Also, defense budget cuts have slowed temporary duty travel to the fort overall for conferences and other official business.

Business Establishments and Licenses According to the U.S. Census Bureau, as of 2010 there were 1,091 business establishments with employees located in the Sierra Vista area (zip codes 85635, 85636, and 85650). The industries with the largest numbers of businesses were healthcare and social assistance with 176 establishments, followed by retail trade (173), professional, scientific, and technical services (124), other services (109), and accommodation and food services (106). From 2009 to 2010, the number of businesses establishments in the Sierra Vista area increased by 2, or 0.2 percent. Compared to 2006, the number of business establishments in 2010 was down by 4 (-0.4 percent). According to the City of Sierra Vista, the year-end number of active business licenses SIERRA VISTA BUSINESS LICENSES 2008

2009

2010

2011

2012

New Licenses

437

430

375

408

402

Cancelled/Non-renewed Licenses

116

161

297

151

130

Year-end Total Licenses Source: City of Sierra Vista

2,925 3,194 3,272 3,529 3,801

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

SIERRA VISTA BUSINESS ESTABLISHMENTS INDUSTRY

2006

2007

2008

Accommodation & food services

108

Admin., support, waste mgmt, & remediation services

Arts, entertainment, & recreation Construction

2009

2010

104

106

107

112

Educational services

Finance & insurance

156

168

173

175

176

Health care and social assistance Industries not classified Information Management of companies & enterprises Manufacturing Mining, quarrying, and oil and gas extraction Other services (except public administration)

107

104

101

109

Professional, scientific, and technical services

113

129

116

114

124

Real estate & rental & leasing Retail trade Transportation & warehousing Utilities Wholesale trade TOTAL

188

185

179

180

173

1,095 1,136 1,127 1,089 1,091

Note: Data for zip codes 85635, 85636, and 85650; includes only business establishments with employees. Source: U.S. Census Bureau and Cochise College Center for Economic Research.

within the city increased by 7.7 percent from 3,529 to 3,801 from 2011 to 2012. Business license figures are not directly comparable to Census Bureau business establishment figures discussed above since business licenses are issued to non-employer business, including home-based businesses and sole proprietorships, which are not included in the Census survey.

Sierra Vista Retail Out-Shopping Survey In 2011, the Cochise College Center for Economic Research conducted a survey of Sierra Vista residents to determine their level of retail out-shopping. Out-shopping refers to shopping done by Sierra Vista residents at businesses located outside the city. The survey included 400 Sierra Vista residents. The category of computer hardware and software saw the greatest percentage of out-shopping in 2011. Residents reported conducting 48.2 percent of their shopping for computer hardware and software outside Sierra Vista. This was followed by furniture (46.7 percent), music (CDs, tapes, etc.) (45.6 percent), and hobby supplies (45.1 percent). Out-shopping for all other categories of merchandise was reported at less than 45 percent. The category of groceries saw the lowest level of out-shopping at 22.5 percent, followed by gasoline (23.4 percent) and health and personal care items (25.1 percent). Sierra Vista residents reported conducting 21.6 percent of their retail shopping over the internet and 5.5 percent through catalogs.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

RETAIL OUT-SHOPPING BY SIERRA VISTA RESIDENTS, 2011 CATEGORY OF SALES Computer hardware/software Furniture Music (CDs, tapes, etc.) Hobby supplies Video (DVDs, VHS tapes, etc.) Books Jewelry Electronics Home Furnishings Sporting goods Children’s clothing Appliances Women’s clothing Men’s clothing Auto parts and accessories Building materials Beer, wine, and liquor Hardware Garden supplies Health and personal care items Gasoline Groceries

OUT-SHOPPING 48.2 46.7 45.6 45.1 44.3 44.0 44.0 43.1 42.4 37.9 37.1 36.6 36.3 36.1 35.7 32.0 31.1 31.0 28.0 25.1 23.4 22.5

Source: Cochise College Center for Economic Research.

Outlook Defense budget cuts that are the natural upshot of winding down two wars threaten sales activities in the Sierra Vista area. While the rest of the state and nation suffered through the severe effects of the Great Recession, Sierra Vista was largely buffered from the worst of it due to increased defense spending on Fort Huachuca and its missions. Those increases were largely tied to the wars in Iraq and Afghanistan. The local economy has already taken a hit from a decline in defense spending. Changes in travel policy for military personnel on temporary duty to the fort now require many to be housed on post instead of in the local economy. Also, defense budget cuts have slowed temporary duty travel to the fort overall for conferences and other official business. This has impacted the local hospitality industries that cater to those on temporary duty. Aside from declines in temporary duty, other changes are having, and will continue to have, an impact. Many defense contracts have not been renewed and those jobs are now performed by government civil servants who tend to be paid less. The result is an overall decline in disposable income in the area, which impacts retail and other industries. Also, the trend has been to replace contractor positions with fewer civil servants resulting in an overall decline in employment. On the positive side, Sierra Vista Regional Health Center recently announced its intent to partner with Tennessee-based RegionalCare Hospital Partners (RCHP), which would potentially lead to a new $100 million, 100-bed hospital in Sierra Vista, funded and constructed by RCHP. This would give a boost to construction related spending in the area. A formal agreement on the partnership is anticipated to be complete in spring 2013, with groundbreaking on a new hospital by the end of 2013 and construction continuing for three to four years. Updated healthcare facilities also have the potential to lure more businesses and residents to the area, providing a boon to economic development efforts. Moreover, as the national economy continues to recover and housing markets in other areas of the nation improve, the Sierra Vista area is likely to see a resumption of the influx of retirees, which will help increase sales in the local area.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Casa del Sol Apartments, a multifamily affordable senior rental housing development, was completed in late 2012

housing, real estate, and commercial construction Residential Construction In 2012, the number of permits issued for new residential construction in Sierra Vista was down 8.2 percent, following a 9.5 percent increase the year prior. There were 169 permits issued in 2012, down from 184 in 2011. The number of new home permits was down more than 75 percent from the housing boom peak in 2004. Countywide, new residential construction permits were down 14.7 percent in 2012. The drop represented the 7th consecutive year of declining residential construction in Cochise County. The number of new home permits countywide in 2012 was down more than 75 percent from its peak, which occurred in 2005. Although Fort Huachuca is part of Sierra Vista city limits and the fort’s residents are included in the city’s population numbers, construction on the fort, which is federally owned land, is not subject to the city’s building permit process. For that reason, new construction on the fort is not included in the city or county’s NEW HOME PERMITS (SINGLE FAMILY RESIDENTIAL) YEAR 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

COCHISE COUNTY PERMITS CHANGE 926 1,046 1,108 900 472 404 380 347 320 273

—— 13.0% 5.9% -18.8% -47.6% -14.4% -5.9% -8.7% -7.8% -14.7%

SIERRA VISTA PERMITS CHANGE 595 689 577 427 178 199 197 168 184 169

—— 15.8% -16.3% -26.0% -58.3% 11.8% -1.0% -14.7% 9.5% -8.2%

Source: U.S. Census Bureau, Cochise County, City of Sierra Vista, and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

building permit numbers. In recent years, residential communities on the fort have been constructed by local builders Castle & Cooke Arizona and R. L. Workman Homes. Residential construction is projected to continue on Fort Huachuca through 2014. The overall number of housing units on post is projected to drop from approximately 1,200 in 2010 to 1,064 in 2014. The net decline will result from the demolition of older units and the construction of fewer units to replace them. This may result in an increased demand for offpost housing in Sierra Vista and surrounding communities.

Major Planned Developments Castle & Cooke Arizona plans to develop 2,000 acres in the city. The planned Tribute community will consist of a mixture of single-family lots ranging from 3,150 to more than 20,000 square feet; multifamily units including apartments, townhouses, and condominiums; and commercial and institutional development. The specific plan also provides for a linear park, community and recreational opportunities, and open space. It incorporates neo-traditional neighborhood design, including houses oriented to the street and sidewalk, pedestrian-friendly design, neighborhood parks, and mixed use development. The development is not likely to proceed until housing market conditions at the national, state, and local levels see sustained improvement.

Home Sales In the Sierra Vista area, sales of site built homes were down in 6 of 7 years from 2006 through 2012. The only year to see an increase was 2009, with modest growth that year of 2.4 percent. Sales in 2012 were down more than 50 percent from their 2005 peak. Countywide, sales of site-built homes hit bottom in 2008. Since

COCHISE COUNTY HOME SALES (SITE-BUILT)

YEAR

VOLUME

CHANGE IN VOLUME

MEDIAN PRICE

MEDIAN PRICE CHANGE

AVERAGE SALE/ASKING PRICE

2004 2005 2006 2007 2008 2009 2010 2011 2012

1,591 1,807 1,446 1,289 1,044 1,049 1,078 1,048 1,084

—— 13.6% -20.0% -10.9% -19.0% 0.4% 2.8% -2.8% 3.4%

$150,000 $186,000 $205,250 $206,579 $195,000 $189,000 $173,250 $156,000 $146,500

—— 24.0% 10.3% 0.6% -5.6% -3.1% -8.3% -10.0% -6.1%

97.8% 98.4% 97.6% 96.4% 95.7% 95.5% 94.6% 94.6% 93.9%

AVERAGE PRICE AVERAGE PRICE AVERAGE PER SQ FT PER SQ FT CHANGE DAYS ON (HEATED/COOLED) (HEATED/COOLED) MARKET

$92.74 $113.52 $127.11 $122.44 $115.42 $110.00 $98.40 $88.82 $84.51

—— 22.4% 12.0% -3.7% -5.7% -4.7% -10.5% -9.7% -4.9%

111 107 114 134 150 148 144 157 162

Note: Includes only those homes listed on Southeast Arizona Multiple Listing Service and/or Tucson Area Multiple Listing Service. Includes townhouses and condominiums. Source: Southeast Arizona Multiple Listing Service, Tucson Area Multiple Listing Service, and Cochise College Center for Economic Research.

SIERRA VISTA AREA HOME SALES (SITE-BUILT)

YEAR

VOLUME

CHANGE IN VOLUME

2004 2005 2006 2007 2008 2009 2010 2011 2012

1,263 1,495 1,120 978 796 815 785 752 733

—— 18.4% -25.1% -12.6% -18.6% 2.4% -3.7% -4.2% -2.5%

MEDIAN PRICE

MEDIAN PRICE CHANGE

AVERAGE SALE/ASKING PRICE

$162,500 $199,900 $216,713 $217,479 $209,500 $197,000 $194,463 $179,995 $168,761

—— 23.0% 8.4% 0.4% -3.7% -6.0% -1.3% -7.4% -6.2%

98.4% 99.1% 98.1% 96.9% 96.1% 96.2% 95.8% 95.5% 95.5%

AVERAGE PRICE AVERAGE PRICE AVERAGE PER SQ FT PER SQ FT CHANGE DAYS ON (HEATED/COOLED) (HEATED/COOLED) MARKET

$97.25 $118.67 $132.77 $128.48 $122.31 $114.82 $106.67 $97.04 $92.47

—— 22.0% 11.9% -3.2% -4.8% -6.1% -7.1% -9.0% -4.7%

103 101 110 135 146 141 136 158 166

Note: Includes only those homes listed on Southeast Arizona Multiple Listing Service and/or Tucson Area Multiple Listing Service. Includes townhouses and condominiums. The Sierra Vista Area includes Sierra Vista, Hereford/Palominas, Huachuca City, Tombstone, Whetstone, and surrounding unincorporated areas. Source: Southeast Arizona Multiple Listing Service, Tucson Area Multiple Listing Service, and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

SIERRA VISTA AREA DISTRIBUTION OF HOME PRICES, 2012

$477,909

$433,727

$389,545

$345,364

$301,182

$257,000

$212,818

$168,636

$124,455

$80,273

180 160 140 120 100 80 60 40 20 0

$36,091

SIERRA VISTA AREA HOME SALES, 2012

Number of Units

Note: Includes only those homes listed on Southeast Arizona Multiple Listing Service and/or Tucson Area Multiple Listing Service. Includes site-built homes, townhouses, and condominiums. The Sierra Vista Area includes Sierra Vista, Hereford/Palominas, Huachuca City, Tombstone, Whetstone, and surrounding unincorporated areas. Prices shown are midpoint prices; each bin represents a price range of $44,182 (+/- $22,091 from midpoint price shown). Source: Southeast Arizona Multiple Listing Service, Tucson Area Multiple Listing Service, and Cochise College Center for Economic Research.

MINIMUM PRICE

MAXIMUM PRICE

$14,000

$58,182

MIDPOINT NUMBER PERCENT OF PRICE OF HOMES TOTAL HOMES $36,091

7.8%

$58,182

$102,364

$80,273

13.6%

$102,364

$146,545

$124,455

130

17.8%

$146,545

$190,727

$168,636

167

22.9%

$190,727

$234,909

$212,818

115

15.8%

$234,909

$279,091

$257,000

12.7%

$279,091

$323,273

$301,182

5.1%

$323,273

$367,455

$345,364

1.5%

$367,455

$411,636

$389,545

1.1%

$411,636

$455,818

$433,727

1.2%

$455,818

$500,000

$477,909

0.5%

Note: Includes only those homes listed on Southeast Arizona Multiple Listing Service and/or Tucson Area Multiple Listing Service. Includes site-built homes, townhouses, and condominiums. The Sierra Vista Area includes Sierra Vista, Hereford/Palominas, Huachuca City, Tombstone, Whetstone, and surrounding unincorporated areas. Source: Southeast Arizona Multiple Listing Service, Tucson Area Multiple Listing Service, and Cochise College Center for Economic Research.

then, they have crawled along the bottom with modest growth in 3 of 4 years. Sales volume in Cochise County in 2012 was up 3.8 percent from the trough in 2008, but remained 40 percent below the 2005 peak. The median price of site-built homes in the Sierra Vista area fell 6.2 percent in 2012—the fifth consecutive year of decline. The median price in 2012 was 22.4 percent below the 2007 peak and was only slightly above 2004 levels. Countywide, the median price of site-built homes fell by 6.1 percent in 2012—also the fifth straight year of decline. The median price in 2012 was 29.1 percent below the 2007 peak and was below 2004 price levels. Part of the reason for the price declines has been an increasing number of foreclosed homes on the market, which tend to be sold at lower prices. Foreclosures also affect the price of other, nonforeclosed homes as they put downward pressure on prices through the appraisal process, since appraisers consider all recent comparable sales in the area. In the Sierra Vista area, 22.5 percent of site-built homes sold in 2012 were foreclosures—the same level as 2011. Countywide, foreclosed homes accounted for 26.4 percent of sales, down from 30 percent. COCHISE COUNTY HOME SALES (MANUFACTURED HOMES)

YEAR

VOLUME

CHANGE IN VOLUME

2004 2005 2006 2007 2008 2009 2010 2011 2012

234 290 229 211 140 113 169 156 202

—— 23.6% -21.0% -7.7% -33.9% -19.1% 49.6% -7.7% 29.5%

MEDIAN PRICE

MEDIAN PRICE CHANGE

AVERAGE SALE/ASKING PRICE

$76,000 $91,000 $101,050 $110,000 $105,850 $97,000 $71,000 $58,250 $53,000

—— 19.7% 11.0% 8.9% -3.8% -8.4% -26.8% -18.0% -9.0%

93.7% 96.5% 95.1% 94.1% 93.5% 93.0% 90.6% 92.2% 90.4%

AVERAGE PRICE AVERAGE PRICE AVERAGE PER SQ FT PER SQ FT CHANGE DAYS ON (HEATED/COOLED) (HEATED/COOLED) MARKET

$53.28 $65.41 $73.25 $73.52 $68.79 $63.36 $55.67 $46.14 $41.49

—— 22.8% 12.0% 0.4% -6.4% -7.9% -12.1% -17.1% -10.1%

132 131 129 147 158 164 147 156 169

Note: Includes only those homes listed on Includes only those homes listed on Southeast Arizona Multiple Listing Service and/or Tucson Area Multiple Listing Service. Includes mobile homes. Source: Southeast Arizona Multiple Listing Service, Tucson Area Multiple Listing Service, and Cochise College Center for Economic Research.

Manufactured Home Sales Sales volume of existing manufactured homes in the Sierra Vista area and countywide were up considerably in 2012. Sales were up 26.7 percent in the Sierra Vista area and 29.5 percent countywide. In the Sierra Vista area, sales volume remained more than 50 percent below the 2005 peak, despite the strong

SIERRA VISTA ECONOMIC OUTLOOK • 2013

SIERRA VISTA AREA HOME SALES (MANUFACTURED HOMES)

YEAR

VOLUME

CHANGE IN VOLUME

2004 2005 2006 2007 2008 2009 2010 2011 2012

200 258 197 177 118 102 109 101 128

—— 29.3% -23.6% -10.5% -33.1% -13.6% 6.9% -7.3% 26.7%

MEDIAN PRICE

MEDIAN PRICE CHANGE

AVERAGE SALE/ASKING PRICE

$80,360 $97,000 $110,000 $115,500 $115,000 $103,900 $69,000 $60,000 $55,000

—— 20.7% 13.4% 5.0% -0.4% -9.7% -33.6% -15.0% -8.3%

94.9% 96.8% 95.5% 94.5% 94.3% 94.3% 92.2% 93.8% 91.6%

AVERAGE PRICE AVERAGE PRICE AVERAGE PER SQ FT PER SQ FT CHANGE DAYS ON (HEATED/COOLED) (HEATED/COOLED) MARKET

$56.30 $66.86 $75.36 $75.19 $69.56 $65.81 $56.90 $46.52 $40.66

—— 18.8% 12.7% -0.2% -7.5% -5.4% -13.5% -18.2% -12.6%

123 120 117 140 156 165 142 176 185

Note: Includes only those homes listed on Southeast Arizona Multiple Listing Service and/or Tucson Area Multiple Listing Service. Includes mobile homes. The Sierra Vista Area includes Sierra Vista, Hereford/Palominas, Huachuca City, Tombstone, Whetstone, and surrounding unincorporated areas. Source: Southeast Arizona Multiple Listing Service, Tucson Area Multiple Listing Service, and Cochise College Center for Economic Research.

increase from 2011’s trough. Countywide, sales volume in 2012 was up nearly 80 percent from the trough in 2009, but remained more than 30 percent below the 2005 peak. Median prices dropped for 5 consecutive years from 2008 through 2012, both in the Sierra Vista area and countywide. The manufactured home market was hit especially hard by foreclosures, which explains a large portion of the price declines and recent upward pressure on sales volume. In 2012, 43.6 percent of manufactured home sales countywide, and 47.7 percent in the Sierra Vista area, were foreclosures.

SIERRA VISTA HOUSING AFFORDABILITY INDEX (HAI)

YEAR

MEDIAN FAMILY MEDIAN INCOME HOME PRICE

2004

$51,499

$157,750

MONTHLY PRINCIPAL AND AMOUNT EFFECTIVE INTEREST FINANCED INTEREST RATE PAYMENT

HAI

$126,200

141.5

6.02%

$758

2005

$52,983

$191,385

$153,108

6.08%

$926

119.2

2006

$54,468

$212,000

$169,600

6.64%

$1,088

104.3

2007

$55,952

$213,000

$170,400

6.24%

$1,048

111.2

2008

$59,611

$206,500

$165,200

6.18%

$1,010

123.0

2009

$65,220

$195,722

$156,578

5.18%

$858

158.4

2010

$64,929

$191,600

$153,280

4.93%

$816

165.8

2011

$67,260

$180,000

$144,000

4.84%

$759

184.6

2012p

$69,213

$168,761

$135,009

4.04%

$648

222.5

p = preliminary. Note: Based on the median home price for residential homes (site built, manufactured homes, mobile homes, townhouses, and condominiums) in Sierra Vista sold on Southeast Arizona Multiple Listing Service and/or Tucson Area Multiple Listing Service. Presumes a 30-year conventional fixed-rate mortgage, a 20 percent down payment, and a 25 percent qualifying income ratio (principal and interest only). Source: Cochise College Center for Economic Research.

Housing Affordability According to the U.S. Census Bureau, the homeownership rate in Sierra Vista, based on sample data from 2009 to 2011, is 56.3 percent. A large contributor to the relatively low rate of home ownership is the military population, which tends to be younger and transient, and many of whom reside in family housing and group quarters on Fort Huachuca. Another influence on homeownership rates is affordability. The Housing Affordability Index (HAI) gauges whether a family with the area’s median income would qualify for a mortgage on a median-priced home. The HAI for Sierra Vista in 2012 was 222.5, its highest level on record with records going back to 2004. In 2012, homes in Sierra Vista were the most affordable they have been in recent years.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

In interpreting the HAI, a value of 100 indicates a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home, assuming a 20 250 percent down payment and a qualifying income ratio of 25 225 percent (i.e., the monthly principal and interest payment 200 cannot exceed 25 percent of the family’s monthly income). An 175 HAI above 100 indicates that a family earning the median 150 income has more than enough income to qualify for a mortgage on a median-priced home. Sierra Vista’s HAI of 125 222.5 indicates that a family with the median income had 222.5 100 2007 2008 2009 2010 2011 2012 percent of the income necessary to qualify for a conventional p = preliminary. Note: Based on the median home price for residential loan covering 80 percent of a median-priced, single-family homes (site built, manufactured homes, mobile homes, townhouses, and condominiums) in Sierra Vista sold on Southeast Arizona Multiple home. In 2012, the estimated median family income for Sierra Listing Service and/or Tucson Area Multiple Listing Service. Presumes a Vista was $69,213 and the median home price was $168,761 30-year conventional fixed-rate mortgage, a 20 percent down payment, and a 25 percent qualifying income ratio (principal and interest only). (includes site-built, manufactured, and mobile homes, and Source: Cochise College Center for Economic Research. townhouses and condominiums). The HAI considers the average effective interest rate (contract rate plus fees) on a fixed, 30-year conventional mortgage over the 12month period as reported by the Federal Housing Finance Agency (4.04 percent in 2012). SIERRA VISTA HOUSING AFFORDABILTY INDEX

Housing Affordability Index

VA Financing In considering housing affordability in Sierra Vista, it is important to take into account the large number of active duty military and veterans residing in the area. As of the 2009-2011 American Community Survey, 24.3 percent of Sierra Vista’s population ages 18 and older are civilian veterans of the military, more than twoand-a-half times the national level. As of September 2012, approximately 1,800 active duty military personnel, along with their family members, were assigned to Fort Huachuca, with an additional 147 deployed from the fort to other locations worldwide. This is important to housing market analysis since most active duty military personnel and veterans finance their homes using Veterans Administration (VA) guaranteed loans. VA loans continue to offer zero-down financing, even as loan paperwork and credit requirements have increased significantly in recent years, and debt-to-income ratios have become more restrictive. The large number of VA eligible buyers creates an affordability bonus since a major obstacle for many buyers, especially first-time buyers, is the down payment.

Affordable Housing Developments A focus of the city in recent years has been affordable housing. In the city’s West End, the Crossing Point community, developed in partnership with the Sierra Vista Industrial Development Authority, is a 57-unit affordable housing development. The Crossing Point community offers moderately priced two-story, three- and four-bedroom homes with down payment assistance for those who qualify. Another affordable housing development, also in the city’s West End, is Casa del Sol Apartments, an 88-unit, multifamily affordable senior rental housing development completed in late 2012. According to the 2009-2011 American Community Survey, 23.3 percent of SIERRA VISTA RENTAL UNITS homeowners and 39.2 percent of renters in Sierra Vista pay 30 percent or more of their income for housing costs, suggesting a 3,000 considerable demand for affordable housing, particularly for 2,500 renters. Thirty percent of gross income is a common threshold above which housing costs are considered to be not affordable. 2,000

Rental Market From 2009 to 2011, 43.7 percent of occupied housing units in Sierra Vista were renter-occupied, according to the U.S. Census Bureau. The rental vacancy rate was 11.9 percent. The largest number of occupied rental units in the city from 2009 to 2011 rented between $750 and $999 per month (rent plus utilities), accounting for nearly 30 percent of all rentals. Units renting for $1,000 to $1,499 accounted for the second largest share (26.7 percent) followed by $500 to $749 (18.5 percent).

Number of Units

1,500 1,000 500 0

Less than $200

$200 to $299

516

1,242

1,996

$300 $500 $750 to to to $499 $749 $999 Gross Monthly Rent*

1,791

1,071

$1,000 $1,500 or to $1,499 more

*Gross rent includes contract rent plus utilities. Note: Includes occupied rental units only; figures expressed in 2011 dollars. Source: U.S. Census Bureau (2009-2011 American Community Survey 3-Year Estimates) and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

Commercial Construction Sierra Vista has seen extraordinary growth in commercial construction in recent years. From 2005 through 2011, 126 permits were issued for new commercial construction projects totaling nearly $236 million. In 2012, new commercial construction was down by more than half from 2011 as was at its lowest level since 2004. The boom in commercial construction in Sierra Vista over the past few years, beginning immediately following the survival of Fort Huachuca through the Department of Defenseâ&#x20AC;&#x2122;s Base Realignment and Closure (BRAC) process, is evident in new hotels, restaurants, large retailers, office complexes, and other businesses throughout the city. COMMERCIAL BUILDING PERMITS (NEW CONSTRUCTION), CITY OF SIERRA VISTA YEAR 2004 2005 2006 2007 2008 2009 2010 2011 2012

PERMITS 13 14 40 24 12 15 12 9 3

VALUATION $7,305,606 $18,468,233 $61,258,338 $43,160,924 $21,424,347 $43,747,931 $21,276,752 $26,379,585 $12,876,107

VALUATION CHANGE 157.9% 152.8% 231.7% -29.5% -50.4% 104.2% -51.4% 24.0% -51.2%

Note: Valuation does not include value of land. Source: City of Sierra Vista and Cochise College Center for Economic Research.

Outlook Foreclosed homes offered at lower prices will continue to dampen demand for new home construction in Sierra Vista and countywide in 2013. Foreclosure sales will place upward pressure on sales volume for existing homes, but place continued downward pressure on prices. As of early 2013, foreclosures on the market appeared to be moderating, but remained near historical highs. On the commercial construction side, Sierra Vista Regional Health Center announced its intent to partner with Tennessee-based RegionalCare Hospital Partners (RCHP), which would lead to a potential new $100 million, 100-bed hospital in Sierra Vista, with construction funded by RCHP. A formal agreement on the partnership is anticipated to be complete in spring 2013, with groundbreaking on a new hospital by the end of 2013 and construction occurring over three to four years.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

Chase Bank

banking and bankruptcy filings Banking Sierra Vista is served by five banks: Wells Fargo, J.P. Morgan Chase, National Bank of Arizona, Bank of America, and Compass Bank. Bank deposits in Sierra Vista in 2012 were up 8.1 percentâ&#x20AC;&#x201D;the third consecutive year of growth. The year 2009 saw a 35.9 percent decline due primarily to a surge in deposits to Bank of America the year prior as a result of its acquisition of Countrywide Financial, LaSalle Bank, and Merrill Lynch. The acquisitions initially resulted in funds being redirected to local Bank of America branches, driving up deposits. Likewise, deposits at the county level surged in 2008 led by the increase in deposits to Bank of America, then returned to normal levels in 2009. At the county level, deposits were up 4.7 percent in 2012. Bank deposits in Sierra Vista in 2012 accounted for 56.8 percent of the Cochise County market, up from 55 percent in 2011. (Note: Bank deposit data include only those deposits made to commercial banks. They do not include deposits to credit unions or other financial institutions. Annual deposits include those made each year in the 12 month period ending June 30.) SIERRA VISTA BANK DEPOSITS

BANK DEPOSITS YEAR

BISBEE AMOUNT CHANGE

COCHISE COUNTY AMOUNT CHANGE

2008

$825,180,000 54.5%

$1,295,970,000 25.4%

2009

$528,537,000 -35.9%

$1,000,155,000 -22.8%

2010

$551,575,000 4.4%

$1,014,793,000

1.5%

2011

$569,146,000 3.2%

$1,034,039,000

1.9%

2012

$614,967,000 8.1%

$1,082,302,000

4.7%

Note: Data reflect total deposits as of June 30 each year. Source: Federal Deposit Insurance Corporation and the Cochise College Center for Economic Research.

M I L L I O N S

$900 $850 $800 $750 $700 $650 $600 $550 $500

2008

2009

2010

2011

2012

Note: Data reflect total deposits as of June 30 each year. Source: Federal Deposit Insurance Corporation and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

SIERRA VISTA BANK DEPOSITS, MARKET SHARE (CITY), 2012

SIERRA VISTA BANK DEPOSITS, SHARE OF COCHISE COUNTY MARKET SHARE OF COCHISE COUNTY MARKET

YEAR

J.P. Morgan Chase Bank 20.4%

2008 . . . . . . . . . . . . . . . . .63.7% National Bank of Arizona 16.5%

2009 . . . . . . . . . . . . . . . . .52.8% 2010 . . . . . . . . . . . . . . . . .54.4% 2011 . . . . . . . . . . . . . . . . .55.0%

Wells Fargo 39.1%

Bank of America 15.8% Compass Bank 8.3%

2012 . . . . . . . . . . . . . . . . .56.8% Source: Federal Deposit Insurance Corporation and Cochise College Center for Economic Research.

Source: Federal Deposit Insurance Corporation and the Cochise College Center for Economic Research.

Bankruptcy Filings In 2011, there were 325 total bankruptcies (all chapters) filed from within Cochise County, down 8.5 percent from 2010. This followed a doubling of filings from 2007 to 2010. Cochise County’s bankruptcy rate decreased from 2.7 to 2.49 bankruptcies per 1,000 residents in 2011, which was 56.2 percent below the state and 45 percent below the national level, reflecting a relatively healthy environment for lending and borrowing in Cochise County. BANKRUPTCY FILINGS (PER 1,000 RESIDENTS)

COCHISE COUNTY BANKRUPTCY FILINGS FILINGS PER TOTAL FILINGS 1,000 POP.

YEAR

POPULATION

2007

129,522

180

1.39

2008

130,567

234

1.79

2009

130,296

339

2.60

2010

131,346

355

2.70

2011

130,537

325

2.49

Source: U.S. Bankruptcy Court (District of Arizona), U.S. Census Bureau, Arizona Office of Employment and Population Statistics, and Cochise College Center for Economic Research.

YEAR

COCHISE COUNTY

2007

1.39

1.74

2.82

1.79

3.07

3.67

2009

2.60

5.42

4.80

2010

2.70

6.70

5.16

2011

2.49

5.68

4.53

Source: U.S. Bankruptcy Court (District of Arizona), U.S. Census Bureau, Arizona Office of Employment and Population Statistics, and Cochise College Center for Economic Research.

7 6

◆

4 3

◆

◆ ◆

2 1 0

2007 2008 United States ◆

UNITED STATES

2008

BANKRUPTCY FILINGS (PER 1,000 RESIDENTS)

ARIZONA

2009 Arizona

2010

2011

Cochise County

Source: U.S. Bankruptcy Court (District of Arizona), U.S. Census Bureau, Arizona Office of Employment and Population Statistics, and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

With thousands of border crossings into the United States each day at the Naco POE, the area serves as a gateway to Cochise County’s retail shopping outlets

Mexico Overview Cochise County’s economy is significantly impacted by Mexico. The 82-mile border between Cochise County and Sonora, Mexico serves as a crossover point for millions of visitors from Mexico each year—from day shoppers, workers, and commercial traffic crossing legally at the designated ports of entry at Naco and Douglas, to drug and human smugglers who cross illegally. The Naco port of entry is located approximately 35 miles, and the Douglas port approximately 50 miles, southeast of Sierra Vista. Cochise College Center for Economic Research (CER) focus group discussions in Sierra Vista indicate the city hosts a considerable number of Mexican shoppers, indicated by the large share of vehicles with license plates from Sonora, Mexico parked daily at the city’s retail outlets. Recent efforts have been made by the Sierra Vista Area Chamber of Commerce, Southeastern Arizona Governments Organization, and U.S. and Sonoran business and community leaders to strengthen partnerships in an effort to increase business ties and tourism on both sides of the border.

EXCHANGE RATE: MEXICAN PESO TO U.S. DOLLAR

Pesos to the Dollar

16 15 14 13 12 11 10 9

Jan

Apr

Jul

2009

Oct

Jan

Apr

Jul

2010

Oct

Jan

Apr

Jul

2011

Oct

Jan

Apr

Jul

Oct

2012

Note: As of the last business day of each month. Rates vary daily. Source: International Monetary Fund and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

INFLATION RATE, CONSUMER PRICES MEXICO

UNITED STATES

2008

5.1%

3.8%

2009

5.3%

-0.4%

2010

4.2%

1.6%

2011

3.4%

3.2%

2012

*4.0%

2.1%

REPRESENTATIVE EXCHANGE RATES: MEXICAN PESO TO U.S. DOLLAR 2011

*Estimate. Source: International Monetary Fund and U.S. Bureau of Labor Statistics.

2012

January . . . . . . . . . . . . . . . . . . . .12.1519 February . . . . . . . . . . . . . . . . . . .12.1062 March . . . . . . . . . . . . . . . . . . . . .11.9084 April . . . . . . . . . . . . . . . . . . . . . . .11.5868 May . . . . . . . . . . . . . . . . . . . . . . .11.5780 June . . . . . . . . . . . . . . . . . . . . . .11.7230 July . . . . . . . . . . . . . . . . . . . . . . .11.7425 August . . . . . . . . . . . . . . . . . . . . .12.3480 September . . . . . . . . . . . . . . . . . .13.7994 October . . . . . . . . . . . . . . . . . . . .13.1802 November . . . . . . . . . . . . . . . . . .13.6100 December . . . . . . . . . . . . . . . . . .13.9787 January . . . . . . . . . . . . . . . . . . . .13.0077 February . . . . . . . . . . . . . . . . . . .12.7891 March . . . . . . . . . . . . . . . . . . . . .12.8093 April . . . . . . . . . . . . . . . . . . . . . . .13.2093 May . . . . . . . . . . . . . . . . . . . . . . .14.3047 June . . . . . . . . . . . . . . . . . . . . . .13.4084 July . . . . . . . . . . . . . . . . . . . . . . .13.2833 August . . . . . . . . . . . . . . . . . . . . .13.2571 September . . . . . . . . . . . . . . . . . .12.8695 October . . . . . . . . . . . . . . . . . . . .13.0112 November . . . . . . . . . . . . . . . . . .12.9268 December . . . . . . . . . . . . . . . . . .12.9880

Note: As of the last business day of each month. Rates vary daily. Source: International Monetary Fund.

Trends in the numbers of shoppers from Mexico are impacted by exchange rates: A strong peso makes U.S. goods and services less expensive for Mexican visitors encouraging shopping in the United States, while a weak peso makes U.S. goods and services more expensive. The peso weakened against the dollar from the first half of 2011 through the first half of 2012. From mid-2012 through the end of the year, the peso strengthened. Inflation rates, which have traditionally been higher in Mexico, also influence cross-border commerce. As prices rise in Mexico, relative to those in the United States, this encourages shopping in the United States.

US-MEXICO BORDER CROSSINGS, NACO PORT (PASSENGERS & PEDESTRIANS)

VEHICLES 2006 2007 2008 2009 2010 2011 2012*

CROSSINGS

% CHANGE

321,357 323,422 266,225 278,960 262,809 236,330 107,503

0.3% 0.6% -17.7% 4.8% -5.8% -10.1% 9.5%

PASSENGERS CROSSINGS

915,501 866,682 708,382 663,231 516,889 468,816 194,776

% CHANGE

-19.2% -5.3% -18.3% -6.4% -22.1 -9.3% 2.0%

PEDESTRIANS CROSSINGS

90,020 97,729 89,174 81,815 78,748 79,115 28,066

TOTAL

% CHANGE

CROSSINGS

% CHANGE

-9.9% 8.6% -8.8% -8.3% -3.7% 0.5% -20.3%

1,005,521 964,411 797,556 745,046 595,637 547,931 222,842

-18.5% -4.1% -17.3% -6.6% -20.1% -8.0% -1.5%

*January – May only; percent change based on same period one year prior. Note: Includes only those crossing from Mexico into the United States. Source: U.S. Customs and Border Protection.

Naco, Sonora The town of Naco, Sonora, Mexico shares a border with Naco, Arizona, an unincorporated area of Cochise County bordering Bisbee. The population of Naco, Sonora as of 2010 was approximately 6,400, according to Mexico’s Instituto Nacional de Estadística y Geografía (INEGI). The population of Naco, Arizona as of Census 2010 was 1,046. The Naco Port of Entry is open 24 hours a day, 7 days a week to vehicle and pedestrian traffic. With thousands of crossings each day, the Naco Port of Entry serves as a gateway to Cochise County’s retail shopping outlets. A 2007-2008 study by University of Arizona indicated 80.1 percent

SIERRA VISTA ECONOMIC OUTLOOK • 2013

of Mexican residents entering the United States through Naco did so for the purpose of shopping—the second highest of all ports in Arizona behind Douglas, also located in Cochise County. In recent years, numbers of vehicles, passengers, and pedestrians through Naco have been on the decline; however, the first 5 months of 2012 showed signs of a rebound in vehicle and passenger crossings, although pedestrian counts remained down. US-MEXICO BORDER CROSSINGS: NACO, AZ 1,400,000 1,200,000 1,000,000 ◆ ◆

800,000

◆ ◆

600,000

◆

400,000 200,000 0 2007

2008

◆ TOTAL

2009 PASSENGERS

2010

2011 PEDESTRIANS

Note: Includes only those crossing from Mexico into the United States. Source: U.S. Customs and Border Protection.

Agua Prieta, Sonora The City of Douglas shares a border with Agua Prieta, Sonora, Mexico. As of 2010, Agua Prieta’s population was just under 80,000, according to Mexico’s Instituto Nacional de Estadística y Geografía (INEGI). Since the early 1990s, Agua Prieta has seen a considerable increase in maquiladoras (twin factories with a presence on both sides of the border that manufacture and assemble products for export). Many of the manufacturing plants in Agua Prieta operate under the maquiladoras concept in which Douglas serves as the warehouse distribution center and Agua Prieta the manufacturing epicenter. Agua Prieta has more than 20 manufacturing plants with multiple warehouse operations in Douglas. Major industrial employers in Agua Prieta include Levolor Kirsh, Commercial Vehicle Group, Takata, Velcro USA, Standex International, and Alstyle Apparel & Activewear, which built a 700,000 square-foot manufacturing facility in 2011 employing approximately 3,000 workers. The Douglas Port of Entry is open 24 hours a day, 7 days a week to vehicle and pedestrian traffic. A 2007-2008 University of Arizona study indicated 81.6 percent of Mexican residents entering through Douglas did so for the purpose of shopping—the highest of all ports in Arizona. In recent years, numbers of vehicles, passengers, and pedestrians through Douglas have been on the decline; however, the first 5 months of 2012 showed a considerable rebound due to a surge in pedestrian crossings.

US-MEXICO BORDER CROSSINGS, DOUGLAS PORT (PASSENGERS & PEDESTRIANS)

VEHICLES 2006 2007 2008 2009 2010 2011 2012*

PASSENGERS

PEDESTRIANS

TOTAL

CROSSINGS

% CHANGE

CROSSINGS

% CHANGE

CROSSINGS

% CHANGE

CROSSINGS

% CHANGE

1,983,618 1,776,456 1,711,176 1,514,446 1,431,813 1,393,181 584,809

-7.2% -10.4% -3.7% -11.5% -5.5% -2.7% 0.8%

4,557,279 4,155,386 3,921,971 3,323,084 2,933,057 2,659,508 1,095,965

-3.6% -8.8% -5.6% -15.3% -11.7% -9.3% -0.3%

760,211 1,014,174 1,289,903 1,294,459 1,096,084 1,030,357 505,079

6.7% 33.4% 27.2% 0.4% -15.3% -6.0% 14.9%

5,317,490 5,169,560 5,211,874 4,617,543 4,029,141 3,689,865 1,601,044

-2.3% -2.8% 0.8% -11.4% -12.7% -8.4% 4.0%

*January – May only; percent change based on same period one year prior. Note: Includes only those crossing from Mexico into the United States. Source: U.S. Customs and Border Protection.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

US-MEXICO BORDER CROSSINGS: DOUGLAS, AZ 7,000,000 6,000,000 5,000,000 ◆

◆

4,000,000

◆

3,000,000 2,000,000 1,000,000 0 2007

2008

◆ TOTAL

2009 PASSENGERS

2010

2011 PEDESTRIANS

Note: Includes only those crossing from Mexico into the United States. Source: U.S. Customs and Border Protection.

DOUGLAS INTERNATIONAL PORT AUTHORITY The Douglas International Port Authority is led by private and public sector executives from the area’s trade/logistics business service sector, cross-border manufacturing, agribusiness industries, and community and economic development. Their primary mission is to promote trade and commerce with a focus on the expansion and further development of the Douglas Port of Entry, the second largest commercial port in Arizona with more than $1 billion in trade conducted each year.

Economic Impact of Mexican Visitors A 2007-2008 study by the University of Arizona found that Mexican visitors to Cochise County accounted for 5.3 percent of countywide taxable sales. Mexican visitors spent an annual $186.4 million in Cochise County, with 55 percent of that occurring in retail stores, 24.1 percent in grocery stores, and 7.3 percent in restaurants. Accounting for indirect and induced impacts, Mexican visitors were responsible for $211.8 million in sales, 1,763 jobs, and $36.5 million in income countywide. Statewide, direct expenditures by Mexican visitors crossing through Douglas totaled $466.4 million ($253 per party) according to the study. Those entering through Naco spent $98.4 million ($277 per party) while in Arizona. Although statewide direct expenditures totaled $564.8 million for both ports, only $186.4 million, or about one-third, was spent within Cochise County, with more than two-thirds of that spent in Douglas.

U.S. Travelers to Mexico The Douglas and Naco ports also serve as crossover points for more than 2 million U.S. visitors traveling to Mexico each year. As of 2009, most U.S. citizens reentering the United States from Mexico must now have a passport, passport card, or other travel document approved by the U.S. Department of Homeland Security (visit www.GetYouHome.gov for more information on current travel requirements). This has likely led to a decline in U.S. crossers between the United States and Mexico in recent years. Another factor potentially contributing to a decline is concern over violence resulting from clashes between drug cartels and Mexican government officials in some Mexican border towns. Numbers of drug and gang-related killings throughout Mexico have increased considerably in recent years. Violence has been much more prevalent in Mexican cities sharing borders with Texas and California (particularly Ciudad Juarez and Tijuana, respectively) than in those bordering Arizona. However, Nogales, Sonora, which shares a border with neighboring Santa Cruz County, Arizona, is specifically mentioned in the U.S. State Department’s most recent travel warning for Mexico, which notes travelers should exercise caution in the city. Neither Agua Prieta nor Naco, which share a border with Cochise County, was specifically referenced in the State Department’s travel warnings as of early 2013. CER focus groups in Bisbee and Douglas suggest border-related violent crime has not been a major problem in those areas aside from a very small number of isolated incidents, but one very high profile incident in which a Douglas-area rancher was killed by suspected illegal crossers.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

Brown Parade Field Photo: Fort Huachuca Public Affairs Office

Fort Huachuca Overview Fort Huachuca is an active U.S. Army installation located in Sierra Vista. The fort provides critical resources, infrastructure, and services to more than 50 unique tenant units and missions with national-level requirements, including three of the fastest-growing missions in the Department of Defense: unmanned aircraft systems (UAS) training and operations, military intelligence, and cyber-security. The main and auxiliary installation properties cover more than 100,000 acres and the fort manages 962 square miles of restricted air space and 2,575 square miles of electronic ranges outside installation boundaries. The fort maintains, operates, or oversees more than 5.5 million square feet of operational facilities, 1,200 family housing units, three remote airstrips, and three accommodation schools. Libby Army Airfield with its 12,001 foot concrete runway is the Armyâ&#x20AC;&#x2122;s sixth busiest continental U.S. airfield with more than 350 days of good flying weather per year and more than 150,000 manned and unmanned air operations annually. As of September 2012, approximately 1,800 active duty military personnel, along with their family members, were assigned to the fort, with an additional 147 deployed from the fort to other locations worldwide. There are also approximately 3,000 military trainees (students) temporarily assigned to the fort for training on any given day, with more than 13,000 trained on site each year. The resident population of Fort Huachuca (those actually residing on post) was 7,084 as of January 2012, which included 1,079 military personnel and 2,805 military family members residing in on-post family housing, along with 3,200 unmarried or unaccompanied military personnel residing in troop billets, including students assigned temporarily to the fort for training. Many military personnel and their families also reside in surrounding communities. The number of housing units on post is projected to decline from approximately 1,200 in 2010 to 1,064 in 2014. This will result from the demolition of older housing units and the construction of fewer units to replace them, which may lead to an increased demand for off-post housing in surrounding communities. Housing communities on post are constructed by private-sector firms as part of the Armyâ&#x20AC;&#x2122;s privatization efforts under its Residential Communities Initiative.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Economic Impact COCHISE COUNTY’S TOP EMPLOYER Fort Huachuca is Cochise County’s largest employer according to the Cochise College Center for Economic Research’s (CER’s) annual Top 75 Employer Survey. The fort has been the largest employer every year since the CER began conducting the survey in 1999. In 2012, the fort employed 9,369 fulltime equivalent (FTE) employees, which included active duty military personnel permanently assigned to the fort, Department of the Army civilian employees, part-time civilian workers directly employed by the fort, and military students temporarily assigned to the fort for training. An FTE employee is equal to one fulltime or two part-time employees; for students temporarily assigned to the fort, the average number at any given time are counted as FTE employees. Not included in the fort’s numbers are workers who report to work on Fort Huachuca but are not employed directly by the fort. Those include employees of defense contracting firms, Fort Huachuca Accommodation Schools (although located on Fort Huachuca, these are Arizona public schools that fall under the Arizona Department of Education), the Army and Air Force Exchange Service, the U.S. Post Office, colleges and universities, and concessionaires located on post. THE MAGUIRE REPORT In 2008, the Maguire Company released its Economic Impact of Arizona’s Principal Military Operations report. The report estimated the direct, indirect, and induced impact of Fort Huachuca on Cochise County at $2.4 billion annually, nearly 42 percent of which was attributable to indirect and induced economic activity in the county’s retail trade and services industries. The employment impact was estimated at 26,921 jobs countywide, which include the fort’s direct employees, as well as those employed due to government contracts and spending by the fort and its employees. The report also estimated the fort generated $23.2 million per year in local sales tax and $17.3 million in local property tax. For more information on Fort Huachuca, visit www.army.mil/huachuca.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

Sierra Vista Food Co-op

Cochise County agriculture Overview Agriculture is a significant part of the Cochise County economy. As of 2007, top crop items are forage land, corn, pecans, and harvested vegetables. Top livestock are cattle and calves (mostly beef cows), layers, horses and ponies, goats, and bee colonies. Between 2002 and 2007, the number of farms in Cochise County grew by 12 percent. This was mostly the result of deconsolidation of farmland evidenced by a 15 percent decline in total farm acreage. Cochise County saw an increase in the number of farms of all size classes except 1,000 acres or more, which stabilized. Most of the growth occurred in smaller farms, particularly those 179 acres or smaller. The number of farms with annual sales valuing less than $2,500 grew by 35 percent, while those with sales of $100,000 or more declined by 10 percent. The market value of agricultural products sold grew by nearly 50 percent between 2002 and 2007; the market value of crops was up by a third while livestock was up nearly 90 percent. Crops accounted for 63 percent of total sales in 2007 (down from 71.2 percent in 2002).

Agritourism Cochise County offers numerous agritourism opportunities, particularly in the Sulphur Springs Valley area, including U-PICK Farms, wineries, and farmers markets. Annual agritourism events in Cochise County include the Willcox Wine Country Fall Festival and Vintage Bisbee, which feature local wines. Wineries/vineyards in Cochise County include Coronado Vineyards, Keeling-Schaefer Vineyards, and Lawrence Dunham Vineyards. For more information, visit www.explorecochise.com or www.willcoxchamber.com. SIERRA VISTA FARMERS MARKET The Sierra Vista Farmers Market operates two markets for local food growers and producers. Its goals are to strengthen the local food economy and provide citizens with a local alternative to corporate and global food production. The markets offer locally produced fruits, vegetables, herbs, sprouts, microgreens, dried

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

beans, nuts, honey, meat, fish, eggs, baked goods, specialty products, plants and native trees, natural body care, locally roasted coffee, crafts, and entertainment by local musicians. For more information, visit www.sierravistafarmersmarket.com. COCHISE COUNTY FAIR The Cochise County Fair is held each September at the Cochise County Fairgrounds just north of Douglas, offering agricultural, commercial, educational, and entertainment activities, including a live rodeo. Exhibits include livestock, buildings, dogs, small stock, and horses. The carnival at the fair offers rides, attractions, games, and food booths. For more information, visit cochisecountyfair.org.

COCHISE COUNTY AGRICULTURE 2007

Farms (number) Land in farms (acres) Land in farms - Average size of farm (acres) Estimated market value of land and buildings - Average per farm (dollars) Estimated market value of land and buildings - Average per acre (dollars)

2002

CHANGE

% CHANGE

1,065

950

115

12.1%

824,226

969,253

-145,027

-15.0%

774

1,020

-246

-24.1%

$1,475,858

$704,895

770,963

109.4%

$1,907

$631

1,276

202.2%

$77,792

$53,260

24,532

46.1%

Farms by size - 1 to 9 acres

122

110

10.9%

Farms by size - 10 to 49 acres

252

211

19.4%

Farms by size - 50 to 179 acres

285

227

25.6%

Farms by size - 180 to 499 acres

149

147

1.4% 2.7%

Estimated market value of all machinery and equipment - Average per farm (dollars)

Farms by size - 500 to 999 acres

Farms by size - 1,000 acres or more

181

0.0%

Total cropland (farms)

496

557

-61

-11.0%

Total cropland (acres)

141,156

131,382

9,774

7.4% -20.0%

Irrigated land (farms)

368

460

-92

Irrigated land (acres)

67,598

64,593

3,005

4.7%

Market value of agricultural products sold ($1,000)

$117,130

$78,307

38,823

49.6%

Market value of agricultural products sold - Average per farm (dollars)

$109,981

$82,429

27,552

33.4%

$74,358

$55,737

18,621

33.4%

Market value of agricultural products sold - Livestock, poultry, and their products ($1,000) $42,771

$22,570

20,201

89.5%

Market value of agricultural products sold - Crops ($1,000) Farms by value of sales - Less than $2,500

490

363

127

35.0%

Farms by value of sales - $2,500 to $4,999

119

22.7% -22.9%

Farms by value of sales - $5,000 to $9,999

118

-27

Farms by value of sales - $10,000 to $24,999

120

111

8.1%

Farms by value of sales - $25,000 to $49,999

6.1%

Farms by value of sales - $50,000 to $99,999

-9

-15.3%

Farms by value of sales - $100,000 or more

108

120

-12

-10.0%

Source: U.S. Department of Agriculture and the Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Coronado Cave Photo: City of Sierra Vista

tourism and travel Overview Tourism and travel, which includes business and leisure, is an important component of the Sierra Vista and Cochise County economy. As an export-oriented industry it brings dollars to the local area from other regions, generating local sales, jobs, income, and tax revenue. According to a study conducted by Dean Runyon Associates for the Arizona Office of Tourism, the tourism and travel industry is one of the top two export industries in Arizona measured by its contribution to the state’s Gross Domestic Product. In Cochise County, tourism and travel includes military and Department of Defense civilian and contractor personnel on temporary duty to Fort Huachuca for training, attendance at conferences, or other military or defenserelated activities, as well as other government travel unrelated to the fort. According to Dean Runyon Associates, total travel-related spending in Cochise County was $329 million in 2011, down 1.6 percent from 2010. Approximately 3,990 jobs, $77.1 million in direct earnings, and $11.4 million in direct local government tax revenue were generated by travel-related spending in 2011.

Attractions and Activities The Sierra Vista area is home to attractions and activities that lure hundreds of thousands of visitors annually, including the Cochise Cowboy Poetry and Music Gathering, Southwest Wings Nature Festival, and group tours and sites for specialty niches (e.g., birding and history) including Ramsey Canyon Preserve, San Pedro Riparian National Conservation Area, and Fort Huachuca’s National Historic Landmark District, all of which attract national and international visitors; meetings and conferences for groups such as Arizona Federation of Women’s Clubs and the Creative Writing Celebration, which attract hundreds of participants; and Fort Huachuca events, which contribute millions of dollars to the Sierra Vista economy each year. Other attractions and destinations in the Sierra Vista area and Cochise County include Sierra Vista’s aquatic center (“The Cove”), Henry Hauser Museum, Arizona Folklore Preserve, Coronado National Forest and Coronado National Memorial, Lehner Mammoth Kill Site, Murray Springs Clovis Site, Kartchner Caverns State Park, the Amerind Foundation and Museum, John Slaughter Ranch, Whitewater Draw, Chiricahua Mountains and Chiricahua National Monument, Cochise Stronghold, Texas Canyon, San Bernardino Wildlife Refuge, Fort

SIERRA VISTA ECONOMIC OUTLOOK • 2013

SIERRA VISTA VISITOR CENTER, VISITOR COUNTS 1ST QTR

CHANGE

2ND QTR

CHANGE

3RD QTR

CHANGE

4TH QTR

CHANGE

ANNUAL

CHANGE

2008

10,966

74.6%

6,031

50.9%

5,233

-14.5%

4,399

-25.3%

26,629

19.5%

2009

8,518

-22.3%

4,578

-24.1%

3,994

-23.7%

4,343

-1.3%

21,433

-19.5%

2010

9,442

10.8%

4,725

3.2%

3,023

-24.3%

3,480

-19.9%

20,670

-3.6%

2011

5,823

-38.3%

2,323

-50.8%

2,116

-30.0%

2,529

-27.3%

12,791

-38.1%

2012

3,646

-37.4%

2,294

-1.2%

1,833

-13.4%

1,701

-32.7%

9,474

-25.9%

Source: City of Sierra Vista and Cochise College Center for Economic Research.

Bowie National Historic Site, 16 public and private observatories, more than 15 Arizona wineries, the cities of Bisbee and Tombstone, the ghost towns of Charleston and Dos Cabezas, and the Mexican cities of Naco and Agua Prieta and Historic Arizpe in Sonora, Mexico, just south of the border. The following events are held in Sierra Vista each year: FEBRUARY: Cochise Cowboy Music & Poetry Gathering / High Desert Gardening & Landscaping Conference / Hummingbird Stitchers Quilt Guild Show MARCH: Cochise Community Creative Writing Celebration / Sierra Vista Symphony APRIL: John Cooper & Perimeter Trail Tour / Men Who Cook / Festival of the Southwest / Goin’ to the Dogs Show JULY: Independence Day (July 4) festivities AUGUST: Southwest Wings Birding & Nature Festival SEPTEMBER: Elks Oktoberfest / City of Sierra Vista Oktoberfest / Dine under the Stars OCTOBER: Art in the Park / Cars in the Park / Huachuca Gem, Mineral & Jewelry Show / Brown Canyon Ranch Open House DECEMBER: Christmas Parade / Fort Huachuca Tour of Historic Officers’ Homes / Old World Santas in the Park JANUARY THROUGH DECEMBER: Sierra Vista Farmers Market For more information on attractions and activities in the Sierra Vista area, contact the Sierra Vista Visitor Center at (520) 417-6960 / (800) 288-3861 or visit www.VisitSierraVista.com.

SIERRA VISTA VISITOR CENTER VISITOR COUNTS 27,000 25,000 23,000 21,000 19,000 17,000 15,000 13,000 15,000 11,000 9,000

SIERRA VISTA VISITOR CENTER, VISITOR COUNTS, AVERAGE BY QUARTER 10,000 8,000 6,000 4,000 2,000

2008

2009

2010

2011

2012

Source: City of Sierra Vista and Cochise College Center for Economic Research.

7,679

3,990

3,240

3,290

JAN-MAR

APR-JUN

JUL-SEP

OCT-DEC

Based on data from 2008-2012. Source: City of Sierra Vista and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

COCHISE COUNTY NATIONAL PARK VISITATIONS CHIRICAHUA NATIONAL MONUMENT YEAR

VISITATIONS

CHANGE

CORONADO NATIONAL MEMORIAL VISITATIONS

FORT BOWIE NATIONAL HISTORIC SITE

CHANGE

VISITATIONS

CHANGE

2008

56,557

-3.2%

91,028

27.0%

10,095

0.7%

2009

60,846

7.6%

103,811

14.0%

9,641

-4.5%

2010

55,430

-8.9%

136,281

31.3%

9,491

-1.6%

2011

37,030

-33.2%

153,040

12.3%

8,429

-11.2%

2012

41,159

11.2%

97,579

-36.2

7,966

-5.5%

Source: Arizona Office of Tourism and Cochise College Center for Economic Research.

Tourism Trends and Marketing in Sierra Vista Annual visits to the Sierra Vista Visitor Center declined nearly 65 percent from 2008 through 2012. According to the city’s director of Leisure and Library Services, the decline is due largely to expanded use of technology, particularly smart phones and tablets, by potential visitors to obtain information. While inperson visits have been down, traffic to the city’s visitor website increased nearly 30 percent in 2011 and stabilized at that level in 2012. In response, the city has expanded its use of digital and social media to supplement print, radio, and television efforts. According to the Sierra Vista Visitor Center, bird watching continues to be extremely popular and a multimillion-dollar activity. In 2012, 43,328 bird-watching brochures were downloaded from the city’s visitor website—up 75 percent from the year prior. According to the visitor center, Sierra Vista and surrounding areas are one of the top birding destinations in the nation, and a large share of the city’s visitor base consists of birders and other geotourists. While continuing to target geotourists and history enthusiasts with strategic advertisements and features on the city’s website, in 2012 the city expanded its marketing efforts in the Tucson and Phoenix markets for travelers interested in day or weekend trips. Additionally, two emerging markets identified by the city are star-gazing and exploring Arizona’s wine county (Cochise and Santa Cruz Counties). Besides its own marketing efforts, Sierra Vista is an active partner in the Cochise County Tourism Council, whose marketing efforts promote Cochise County as a region (for more information, visit www.ExploreCochise.com).

Cochise County and Sierra Vista Lodging In 2012, according to Arizona Office of Tourism (AOT), Cochise County’s lodging occupancy rate decreased 9.2 percent, dropping from 53.3 to 48.4 percent. The county’s lodging occupancy rate for 2012 was below the statewide rate of 57.5 percent and the nationwide rate of 61.4 percent. The average daily room rate in Cochise County decreased by 0.6 percent from $69.11 to $68.72 in 2012. Revenue generated per available room was down 9.7 percent from $36.86 to $33.29. Lodging room demand was down 9.2 percent and supply was down by less than one-tenth of a percent in 2012.

COCHISE COUNTY STATE PARK VISITATIONS KARTCHNER CAVERNS STATE PARK YEAR

VISITATIONS CHANGE

TOMBSTONE COURTHOUSE STATE HISTORIC PARK VISITATIONS

CHANGE

2008

153,224

-4.2%

51,932

0.1%

2009

144,089

-6.0%

44,403

-14.5%

2010

123,999 -13.9%

49,825

12.2%

2011

116,757

-5.8%

46,037

-7.6%

2012*

117,496

18.7%

38,395

-2.4%

*January—October only; percent change based on same period one year prior. Source: Arizona State Parks and Cochise College Center for Economic Research.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

There are approximately 1,780 lodging rooms in the Sierra Vista area, according to the Sierra Vista Visitor Center. In 2012, the average daily room rate declined to $70 per night, down from $79.11 in 2011. The Sierra Vista Visitor Center did not track occupancy rate in 2012 but opined the rate dropped in line with declines seen at the county level.

COCHISE COUNTY TRAVEL IMPACTS 2007

2008

2009

TOTAL DIRECT TRAVEL SPENDING ($MILLION) 350.9 350.0 329.9 Visitor Spending at Destination Other Travel* 0.9 1.0 1.2 Total Direct Spending 351.8 351.0 331.1 VISITOR SPENDING BY TYPE OF TRAVELER ACCOMMODATION ($MILLION) Hotel, Motel 106.1 110.0 97.6 Campground 52.5 52.0 46.3 Private Home 67.2 63.1 58.8 Vacation Home 7.0 7.3 7.0 Day Travel 118.0 117.6 120.2 Spending at Destination 350.9 350.0 329.9 VISITOR SPENDING BY COMMODITY PURCHASED ($MILLION) Lodging 49.0 50.8 46.0 Food & Beverage Services 81.1 80.0 80.1 Food Stores 58.9 59.2 64.7 Ground Tran. & Motor Fuel 53.7 55.8 36.8 Arts, Entertainment & Recreation 43.8 41.9 39.9 Retail Sales 64.3 62.4 62.6 Spending at Destination 350.9 350.0 329.9 INDUSTRY EARNINGS GENERATED BY TRAVEL SPENDING ($MILLION) Accommodation & Food Services 41.6 43.7 43.2 Arts, Entertainment & Recreation 20.2 20.3 19.3 Retail** 18.6 19.5 18.1 Auto Rental & other ground tran. 0.3 0.3 0.3 Other Travel* 0.7 0.7 0.9 Total Direct Earnings 81.4 84.6 81.7 INDUSTRY EMPLOYMENT GENERATED BY TRAVEL SPENDING (JOBS) Accommodation & Food Services 2,270 2,280 2,210 Arts, Entertainment & Recreation 1,380 1,410 1,330 Retail** 800 810 730 Auto Rental & other ground tran. 10 10 10 Other Travel* 20 20 20 Total Direct Employment 4,480 4,530 4,290 GOVERNMENT REVENUE GENERATED BY TRAVEL SPENDING ($MILLION)*** Local 11.8 11.7 11.5 State 12.8 12.5 12.1 Total Direct Gov't. Revenue 24.6 24.3 23.6

2010

2011

334.4 1.3 335.7

329.0 1.4 330.4

113.3 44.9 61.2 7.3 107.7 334.4

107.4 44.8 64.8 7.8 104.1 329.0

50.8 81.9 53.9 45.8 40.6 61.3 334.4

46.5 79.2 50.1 56.0 39.0 58.2 329.0

43.3 19.3 16.7 0.3 1.0 80.6

41.9 18.1 15.7 0.3 1.1 77.1

2,190 1,340 670 10 20 4,230

2,050 1,290 630 10 20 3,990

11.9 12.8 24.7

11.4 13.2 24.6

Note: 2011 data are preliminary. Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payment of travel industry employees not included. Source: Dean Runyon Associates and Arizona Office of Tourism.

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

In early 2011, Fort Huachuca began the installation of a $2.8 million, 300-foot Nordic Windpower wind turbine Photo: Fort Huachuca Public Affairs Office

renewable energy Renewable Energy Incentives Sulphur Springs Valley Electric Cooperative (SSVEC), which provides electrical service to Sierra Vista and other areas of the county and state, offers several incentives to promote the use of alternative energy. Customers may also qualify for federal and state tax credits. For detailed and up-to-date information on renewable energy incentives in the SSVEC service area, visit www.ssvec.org. RESIDENTIAL AND SMALL COMMERCIAL (UNDER 10 KW) REBATE PROGRAM This program provides incentives for the installation of qualifying renewable energy programs (solar, wind, and biomass). SSVEC provides incentives of $2 per installed watt or up to 40 percent of the total installed cost of the system, whichever is less. Individuals interested in forfeiting the rebate can qualify for a performance based incentive (PBI) over a period of 10, 15, or 20 years up to 50 percent of the systemâ&#x20AC;&#x2122;s cost. Funding is limited; members must contact SSVEC prior to construction to ensure availability. LARGE COMMERCIAL (OVER 10 KW) PROGRAMS Contact the SSVEC Commercial Representative at (520) 515-3472 for program guidelines.

NEW HOME BUILDERS PROGRAM SSVEC offers homebuilders a $1,500 incentive for 2kW or larger systems. This rebate is in addition to the residential and commercial rebate program and is payable only to the builder. RESIDENTIAL AND SMALL BUSINESS LOAN PROGRAM SSVEC members may borrow $2 per watt up to a maximum of 25 percent of the total cost of the renewable energy project at an interest rate of 3 percent. The loan is secured by a lien on the house or property and is repaid in equal monthly installments over 5 years for loans under $10,000 and 10 years for loans over $10,000, with no prepayment penalty. There is a cap on loan amounts of $8,000 for residential systems and $20,000 for small business systems. Funding is limited and available on a first come, first served basis. SOLAR WATER HEATERS Solar water heaters are eligible for a rebate of $0.75 per kWh of the first year savings as determined by the Solar Rating and Certification Corporation (www.solar-rating.org).

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Sierra Vista Public Library

community resources CITY OF SIERRA VISTA 1011 N. Coronado Drive, Sierra Vista, AZ 85635 City Hall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-3315 Website . . . . . . . . . . . . . . . . . . . . . . . . . www.SierraVistaAZ.gov

SMALL BUSINESS DEVELOPMENT CENTER AT COCHISE COLLEGE 901 North Colombo Ave., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 515-5478 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.cochise.edu

SIERRA VISTA VISITORS CENTER 3020 E. Tacoma Street, Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . (520) 417-6960 / (800) 288-3861 Website . . . . . . . . . . . . . . . . . . . . . . . www.VisitSierraVista.com

SIERRA VISTA AREA CHAMBER OF COMMERCE 21 E. Wilcox Drive, Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-6940 Website . . . . . . . . . . . . . . . . . . . . . www.sierravistachamber.org

SIERRA VISTA ECONOMIC DEVELOPMENT FOUNDATION

SOUTHEAST ARIZONA ASSOCIATION OF REALTORS 125 S. Second Street, Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-7802 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . seazrealtor.com

COCHISE COUNTY 1415 Melody Lane, Bisbee, AZ 85603 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 432-9200 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.cochise.az.gov

750 E. Bartow Dr., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-6948 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.svedf.org

ARIZONA DEPARTMENT OF ECONOMIC SECURITY / SOUTHEAST ARIZONA WORKFORCE CONNECTION

SIERRA VISTA INDUSTRIAL DEVELOPMENT AUTHORITY

1843 Paseo San Luis, Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-9309 Website . . . . . . . . . . www.azdes.gov / www.seazworkforce.org

Frank T. Moro 1700 S. Hwy 92, Sierra Vista, AZ 85636 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-1666 Website. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.fwpc.net

FORT HUACHUCA Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 533-2752 Website . . . . . . . . . . . . . . . . . . . . . . . . www.army.mil/huachuca

SIERRA VISTA ECONOMIC OUTLOOK • 2013

FINANCIAL INSTITUTIONS AMERICAN SOUTHWEST CREDIT UNION

CHASE

3090 E. Fry Blvd., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 459-1860 Website . . . . . . . . . . . . . . . . . . . www.americansouthwestcu.org

3932 E. Fry Blvd., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 459-1235 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.chase.com

ARMED FORCES BANK

NATIONAL BANK OF ARIZONA

52035 Arizona St., P.O. Box 12778, Fort Huachuca, AZ 85670 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 452-8630 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.afbank.com

1160 E. Fry Blvd., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 439-5469 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.nbarizona.com

BANK OF AMERICA

WELLS FARGO BANK

3148 E. Fry Blvd., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-1441 Website . . . . . . . . . . . . . . . . . . . . . . . . www.bankofamerica.com

50 E. Fry Blvd., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 459-8489 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . www.wellsfargo.com

BBVA COMPASS BANK 211 S. Carmichael Ave., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-1088 Website . . . . . . . . . . . . . . . . . . . . . . . . . www.bbvacompass.com

UTILITIES ARIZONA WATER COMPANY

PUEBLO DEL SOL WATER COMPANY

77 Calle Portal, Ste. B-120, Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-5660 Website. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.azwater.com

4226 Avenida Cochise, Ste. 13, Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-3742 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.pdsh2o.com

CENTURYLINK

SOUTHWEST GAS

Website . . . . . . . . . . . . . . . . . . . . . . . . . . . www.centurylink.com

COX COMMUNICATIONS

202 E. Wilcox Dr., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 459-1702 Website. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.swgas.com

150 E. Wilcox Dr., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-4705 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.cox.com

SULPHUR SPRINGS VALLEY ELECTRIC COOPERATIVE

LIBERTY UTILITIES 4055 E. Campus Dr., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-5470 Website . . . . . . . . . . . . . . . . . . . . . . . . . . www.libertywater.com

311 E. Wilcox Dr., Sierra Vista, AZ 85635 Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (520) 458-4691 Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.ssvec.org

SIERRA VISTA ECONOMIC OUTLOOK â&#x20AC;˘ 2013

The CER hosts economic outlook luncheons each year throughout Cochise County

about the Center for Economic Research The Cochise College Center for Economic Research (CER), founded in 1995, provides economic information, analysis, and forecasting to help leaders in the public, private, and nonprofit sectors make informed decisions; provides opportunities for Cochise College students to conduct and publish research on local and regional economic issues; and educates residents of Cochise County on the local, state, and national economy through public presentations, newspaper columns, radio show appearances, and social media networking. The CER hosts economic outlook luncheons each year in Benson, Bisbee, Douglas, and Sierra Vista. The center also produces four major publications annually as part of its Cochise County Economic Outlook Publication Series: Benson Economic Outlook, Bisbee Economic Outlook, Douglas Economic Outlook, and Sierra Vista Economic Outlook. Throughout the year, the CER responds to a wide range of information requests from business and community leaders throughout Cochise County and across the state and region. The CER director serves on community projects, committees, and task forces providing technical expertise in research methodology and serving as a source of economic and demographic information, analysis, and forecasting. As an extension of Cochise Collegeâ&#x20AC;&#x2122;s educational mission, the CER prepares weekly press releases that are published in newspapers countywide and provide insight into economic issues affecting Cochise County. The CER maintains an official Facebook page providing updates on the local, state, and national economies. The CER has economic advisory committees in Benson, Bisbee, Douglas, and Sierra Vista. These committees include representatives from various sectors of the local economy who provide advice, expertise, and input to the content of the economic outlook publications and luncheon presentations. They also serve as focus groups for the study of the qualitative aspects of the local economy and provide specialized expertise related to the organizations and industries they represent. The CER is a member of the Association for University Business and Economic Research (AUBER), one of only two community college organizations in the nation holding membership. In addition, the CER is a state data center affiliate, receiving and disseminating U.S. Census Bureau data to local governments and nongovernmental data users at no charge or on a cost-recovery or reimbursable basis. The CER is charged with raising its own operating budget through sponsorships, gifts, donations, sponsored research, and other sources.

SIERRA VISTA ECONOMIC OUTLOOK • 2013

Dr. Robert Carreira has served as director of the CER since 2005. He holds a doctor of philosophy degree in public policy, and master’s degrees in public administration, education, and international relations (international political economics).

Contact the CER Center for Economic Research Cochise College 901 North Colombo Avenue Sierra Vista, AZ 85635 Phone: (520) 515-5486 Fax: (520) 515-5343 E-mail: cer@cochise.edu

Center Staff Dr. Robert Carreira – Director Iris Routhieaux – Information Specialist Rebecca M. Horlick – Office Assistant

Sierra Vista Economic Advisory Committee Amanda Baillie—Sierra Vista Area Chamber of Commerce Rick Coffman—Castle & Cooke, Arizona Kay Daggett—City of Sierra Vista Frank Gonzalez—Lawley Automotive Group Angelica Hernandez—Southeast Arizona Workforce Connection Mignonne Hollis—Sierra Vista Economic Development Foundation Mary Jacobs—City of Sierra Vista Angela Camera—Fort Huachuca Public Affairs Frank Moro—First West Properties Corporation Tom Reardon—Sierra Vista City Council Mark Schmitt—Cochise College Small Business Development Center Victoria Yarbrough—City of Sierra Vista