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2016 A new day rising


GREATER PHOENIX ECONOMIC COUNCIL


GREATER PHOENIX ECONOMIC COUNCIL

man mission The

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Research suggests Millennials are increasingly driven and motivated by a sense of purpose. GPEC CEO Chris Camacho is a Millennial whose mission is clear: to turn Phoenix into a technology-driven economic juggernaut. By MICHAEL GOSSIE

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hris Camacho might be the most influential Millennial in Arizona. But who better to guide Arizona’s economy into a technology-driven world than a Millennial? The 35-year-old president and CEO of the Greater Phoenix Economic Council (GPEC) packs an economic punch. During Camacho’s tenure with the economic development association, GPEC has attracted more that 170 companies, created 26,688 jobs and generated $2.2 billion in capital investment. Some of the more notable projects include Apple, Silicon Valley Bank, Zenefits, GoDaddy, Yelp, Gainsight, Amazon, Garmin, General Motors and countless others. Camacho, who took over the top job at GPEC in January 2015, has particular expertise in emerging technology, tax policy and international economic development. Az Business met with Camacho to talk about GPEC’s triumphs, challenges and outlook. Az Business: It’s been a year since you moved into your current role at GPEC. How did coming from within the GPEC system help the transition? Chris Camacho: There’s no question that I had a tremendous amount of institutional knowledge and market knowledge that put me in a position to be successful. Knowing how the market is positioned certainly allowed a smooth transition and allowed us to execute our business plan rather quickly. AB: Has anything surprised you? CC: The public side and private side coming together is a unique apparatus to promote economic viability and sustainability. What excites me is the ambition for the market is very prevalent among both the public and private sides of GPEC. The willingness to push the envelope around what matters, to produce students who meet the competitiveness demands of market conditions and approach policy in a way that allows us to create high-wage jobs is the ambition that exists within our market. AB: What strengths do you bring to your leadership role at GPEC? CC: My strengths are my ability to lead, my ability to work in collaboration with other peer organizations, operating a business plan and executing a business plan that drives measurable results. We are going to be very focused on execution and we will do so in a way that will elevate the national reputation of the organization, 102

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while at the same time getting in front of more companies and getting more companies to select this market. AB: You’re a Millennial. How has your youth helped in the job? CC: This job requires a lot. It requires tenacity and grit to drive an economic strategy. Combining that with the experience I have — I was president and CEO of the Greater Yuma Economic Development Corporation before moving here — gives me a unique vantage point. I understand the next-generation workforce, the needs of communities to attract people, how to retain talent and what the future creators of jobs will be looking for in terms of the balanced live-work-play aspect. I also have the understanding of taxation, finance and core business assessments that companies make. I think having a blend between the two is something that has been very conducive to the needs of this position. AB: GPEC has had a lot of recent success attracting and growing tech companies. Did growing up in the tech generation help you with that effort? CC: I already have to ask my 8-year-old to educate me on how to use my iPhone. With that said, there is a tremendous amount of change occurring in how businesses are performing work today. This new class of workers that are entering the workforce today not only have ambition, but a level of creativity that is probably unmatched because of their exposure to technology. We are going to see continued evolution of new technology impacting the business environment. If you think about Uber (which has offices in downtown Phoenix), it wasn’t even a concept a few years ago. Now, anyone going out on a weekend will likely use Uber. We’re going to see more and more of this kind of social change along with the needs of Millennials. This will create opportunities for technologies to collide and new companies to be born. AB: What impact do you think Millennials with have on Arizona’s economy in the long run? CC: This is one of the largest workforces we’ve ever had coming into the system and the balance on the back end is a Baby Boomer generation that is retiring. They’ve grown up in very different geopolitical and world factions. Today, the Millennials have an incredibly creative spirit and a pretty strong work ethic, but their view of work is very different. I think the employers


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GREATER PHOENIX ECONOMIC COUNCIL and markets that will succeed and successfully integrate those talented Millennials are those that really understand the requirements of moving people across markets in terms of urban transit, how to create the jobs that will allow them to stay in the market, along with attractive residential options that promote walkability and outdoor activities. Those are the things that Millennials are looking for in today’s competitive environment. AB: What are Arizona’s strengths in helping GPEC attract new businesses or in helping existing businesses grow? CC: Today, by far, it’s our current talent base, whether it’s engineers coming out of engineering schools or it’s the 30-year run of advanced business services employees that have fueled everything from customer service centers to technology centers to IT centers. The labor force is very strong in relation to other markets in the Western United States. At the same time, we’ve coupled that with a very strong operating environment that has a very strong pro-business message. We have low taxes and limited regulation. From a speed to market perspective, we are one of the fastest markets to align and get your business up and operational. To complement that, we have this very organically grown entrepreneurial ecosystem that’s evolved largely in the last 10 years. That’s really allowing a lot of localized job growth to occur in the Phoenix small business sector, which allow the service sector to thrive as well. AB: How do you think the governor’s plan to put more money into K-12 education will impact GPEC’s economic development efforts? CC: Putting the $3.5 billion into education through the state Land Reform Plan to the voters is something GPEC supports. We think this is a big leap forward. There are additional reforms required and additional funding required for our market to continue to maintain its competitive edge in terms of producing K-20 talent. But I do feel this is an important continued step to produce the right type of talent to meet industry needs. AB: What kind of impact does Arizona’s education system have

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on GPEC’s ability to attract new businesses to the region? CC: It has an impact on two fronts. First, companies analyze a number of market conditions — notably transportation thoroughfares, infrastructure capabilities, real estate product, operating environment and taxation. Education has elevated itself as one of the primary factors that companies analyze. It’s not just how many workers you have in your environment to work in industries that are our target interest, but what does the future pipeline entail? This measurement is critical for companies analyzing the market. The analytical due diligence is the first piece and the second piece is the brand position and how are we as a market and as a state producing students to meet industry demands? I think the governor’s step to put more money into classrooms and more money into the system is a big first step toward strengthening that brand position. AB: Are there specific industries or sectors that GPEC is targeting for growth? CC: The technology sector is by far the most attractive industry at this point, largely because of the growth in California, New York City, Chicago and other markets. We are a great place to access the California market and operate from and export technologies from. Second — and largely tied to technology — is software. As we continue to seed our university systems with software development talent and software analysts, we are going to continue to feed the job demand with those employees. Third is financial services. Whether it’s the major banks or analyst houses, financial companies are trying to determine the best places to cost optimize. That simply means, “Where can I go and operate and attract the right kind of talent, find a suitable real estate option that meets my occupancy needs and do so in a place that’s very competitive from a cost perspective?” We are very well situated to attract those financial services companies. The fourth is is healthcare, which is largely driven by population growth. We are going to see a tremendous amount of healthcare job growth, well over two times the national average for healthcare job growth. That will probably be the leading industry overall in the Arizona market. AB: What are you doing to capitalize on that explosion in healthcare? CC: At GPEC, we have a Healthcare Leadership Council that’s led by the leaders in the industry. We work closely with them to not only market and brand the healthcare industry as it relates to biomedical research and producing new medical technology and service companies, but understanding the industry’s needs for future labor and ensuring that we have an aligned community college system that meets the demands of future jobs. We are working with a number of these companies — Banner Health, Dignity Health and others — to appraise what their next five- to 10-year job demands will be and how we can ensure that the educational systems are aligned with educating those who will fill those future jobs.


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“In the last three years, we’ve driven more than 100 new companies to the market” AB: Is GPEC seeing results now from its California initiative? CC: Coming on the heels of Prop 30, which took the personal income tax in California to the highest level it’s ever been, we had more than 50 companies express an interest in the market. A number of them had visited the market and assessed the market. Going forward, you’re going to see a lot of these California tech companies — as they look to go to scale — look to Phoenix to evaluate for expansion. They will keep the nerve center of the company in California, but once they hit some level of critical mass, they will look to a market like Phoenix to absorb the scale job growth. That tagline, “scale job growth,” is something we’ve captured because we think — whether you’re in healthcare, medical research, financial services, software, technology — this is the market to go to scale. That message is resonating with a lot of the CEOs with whom we are talking. AB: Is that why we’re attracting so many many companies like GainSight, Zenefits, Uber and Weebly? CC: What’s happening is a lot of these companies we work with in Silicon Valley are backed by venture capital. They get an infusion of capital and they have revenue targets that require them to get to some level of scale quickly. Once they have that injection of capital, these venture capitalists are asking for a return on their investment or a return on the cost of capital. As a byproduct of that methodology, these companies need to go to scale quickly and we are right there with the right labor force, the right turnkey options in terms of local permitting and the right business operating environment. So we spend a lot of 106

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time in California because there is a great message to be sent to that marketplace that says, “Let us be your partner.” In the last few years, we’ve had more than 25 California-based companies expand into the marketplace and we’re going to see that continue even more explosively than we have in the last decade. AB: What do you consider GPEC’s major success stories over the last year? CC: From a leadership standpoint, we’re hitting our metrics. We’re hitting what our business plan has asked us to do, which is drive new business activity to the market. In the last three years, we’ve driven more than 100 new companies to the market. Over the last few years, the level of capital investment and job creation has has outpaced any other three-year stint in GPEC’s history. Looking forward, we have to continue to do more. In addition to building a strong job base, GPEC is looking inward to examine how we continue to expand the local base of jobs. We have further strategies that we hope will elevate our entrepreneurial ecosystem and help it flourish. We are also looking at ways to connect workforce development with the community college system so we have a workforce that is prepared for future jobs and create a continuous pipeline of people. GPEC will recruit about 20 percent of the jobs that come to the market, but 80 percent are grown from the local base. If 80 percent are grown from the local base, we want to ensure that those jobs are also adding to personal income. The jobs that GPEC brings are $60,000-plus and we want to ensure that the 80 percent of jobs that are homegrown are being driven by higherwage job focuses as well.

GPEC’s 2015-2016 Board of Directors: A true public-private partnership, the Greater Phoenix Economic Council (GPEC) is the regional economic development organization for Greater Phoenix. Working with 23 member communities, Maricopa County and more than 170 private investors, GPEC’s mission is to attract quality businesses to the region. Here are the Arizona business leaders that make up GPEC’s 2015-2016

Board of Directors: Chairman: Don Smith, president and CEO, CopperPoint Mutual Vice chairman: Chris Zaharis, executive vice president, Empire Southwest Secretary: Tammy McLeod, vice president of energy resource management, APS Treasurer: R. Neil Irwin, partner, Bryan Cave, LLP

Executive committee members: • James H. Lundy, immediate past chair, CEO, Alliance Bank of Arizona • Chris Camacho, president and CEO, GPEC • Ed Aaronson, vice president, Cox Communications • Jennifer Anderson, senior vice president and regional manager, Wells Fargo Bank, N.A. • Jason Bagley, government affairs manager, Intel Corp. • Steve Betts, president, Chanen Development Corp • Timothy Bidwill, vice president, Vermilion IDG • Ron Butler, managing partner, Ernst & Young LLP • Brian Campbell, managing partner, Campbell Law Group • Michael Crow, president, Arizona State University • Kathleen H. Goeppinger, president and CEO, Midwestern University • John Graham, president and CEO, Sunbelt Holdings • Derrick Hall, president and CEO, Arizona Diamondbacks • Sharon Harper, president and CEO, The Plaza Companies • Ann Weaver Hart, president, University of Arizona • Paul Luna, president and CEO, Helios Education Foundation • Richard Marchant, executive vice president, Global Ops., Crescent Crown Dist. • Matt McGuire, president and CEO, Cancer Treatment Centers of America, Western Regional Center • Brian Mueller, president and CEO, Grand Canyon University • Curtis Reed Jr., market manager, JPMorgan Chase • David Rousseau, president, Salt River Project • Timothy Slottow, president, University of Phoenix • Karrin K. Taylor, executive vice president, DMB Associates, Inc. • Andy Warren, president, Maracay Homes • John Zidich, publisher, president and CEO, The Arizona Republic • Ed Zuercher, city manager, City of Phoenix


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Mega events have monster impact on economy and tourism industry, but could state cash in even more? By MICHAEL GOSSIE

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rizona won at the Super Bowl last year. No, the Cardinals didn’t hoist the Lombardi Trophy. That honor went the the guys who were accused of deflating footballs. But the real winner was the state of Arizona, which got a $720 million economic boost from hosting the game. “You undertake these kinds of efforts because (you want to show) what’s great about Arizona to the world,” says David Rousseau, president of Salt River Project and chairman of the Arizona Super Bowl Host Committee. “We hope to harvest additional returns on that investment (and exposure) over the coming years.” Along with bragging rights that come with hosting the mostwatched sporting event of the year comes opportunities, including the opportunity to showcase the state to visitors who will come back and fill Arizona’s hotels, restaurants and attractions. “Super Bowl XLIX not only brought 100,000 visitors to the state, but it was also the highest rated television event in history with 108

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viewers from 180 countries and more than 114 million U.S. viewers, who all witnessed the hospitality and leadership that Arizona has to offer,” says Kim Sabow, president and CEO of the Arizona Lodging & Tourism Association. “That type of positive and vast exposure is invaluable. And the good news is more opportunities of this nature are on the horizon for Arizona.” On the heels of hosting a Super Bowl that had the largest economic impact of any Super Bowl for which publicly released figures are available, Arizona will host this month’s College Football Playoff National Championship Game and Phoenix will be the center of the sports universe again in 2017 when it hosts the NCAA Final Four. “If past BCS games and Super Bowls are an example – and I think they are – we’ll see our hotel rooms full, we’ll see our restaurants busy, we’ll see our golf courses and other amenities being taken advantage of,” says Brad Wright, co-chairman of the Arizona Organizing Committee for the 2016 College Football Playoff National Championship Game.


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“There’s the direct and the indirect activity that these events generate that’s really helpful.” Some of that indirect activity comes long after the game’s final whistle. Chris Camacho, president and CEO of the Greater Phoenix Economic Council, says GPEC hosted dozens of David Rousseau CEOs for the Super Bowl, hoping those business leaders saw the virtues of doing business in Arizona while they were here to enjoy the game. Again this month for the College Football Playoff National Championship Game, GPEC will take advantage of the moment to attract more Tom Sadler businesses to the state. “We are teaming up with the Arizona Commerce Authority and the governor’s office to host a CEO program, which is intended to bring 25 to 50 CEOs to the market, some that are already in the pipeline and considering the market and others Jon Schmieder whom we want to educate on opportunities in the market,” Camacho says. “What you see from these big events are opportunities to get people to visit the market who otherwise might not consider the market.” Camacho says the College Football Playoff National Championship Game with further reinforce Arizona’s ability to host mega events, bring people to the market and expose people the the opportunities that are available in Arizona. Camacho says Arizona’s ability to spin mega events into economic development opportunities is similar to the way Texas used mega events to drive its economic development efforts. The biggest difference between the two states: Texas has a mega events fund. The Texas legislature passed a funding mechanism in 2003 called the Texas Major Events Trust Funds. As of April 2013, Texas taxpayers had contributed $277 million to lure these big events. The fund has allowed Texas to land events ranging from Super Bowls to Final Fours to the Academy of Country Music Awards. In contrast, Arizona has to scramble to find funding

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every time it bids on an event. “We’re playing with a bow and arrow and everybody else is playing with a howitzer,” says Jon Schmieder, founder and CEO of the Phoenix-based Huddle Up Group, which consults with sports commissions across the country. Rousseau worries the current system of assembling a different committee each time a new event comes to town could hinder future attempts to secure and produce mega events. “That (system), at some point, is going to start to be this frayed, fragmented effort,” he says. “I think there’s some value in just continuing to improve upon and refine that effort and you can only do that if you have that one platform model as opposed to startup efforts every time a new bid opportunity comes by.” So without a sports commission or mega event fund in place, how will Arizona be able to maintain its hot streak when it comes to landing mega events? “Mega event funding would be immeasurably helpful in attracting additional future events,” Sabow says. “It would provide our state leaders with a significant additional tool in the tool box. Beyond the immediate fiscal impact from the visitors and the event itself, Arizona’s economic development efforts would be enhanced into the future significantly. These events bring leading CEOs from around the country to town and provide the opportunity for us to showcase all the best that Arizona has to offer. The positive worldwide media coverage doesn’t hurt either.” Texas has adjusted and amended its model over the years, but the concept has remained the same. If an event hosted in the state can prove a certain level of revenue was generated during its run, the state will reimburse the host committee for a percentage of its operating budget on par with the money earned. “We just can’t year in and year out count on the support from the private sector,” says Tom Sadler, president and CEO of the Arizona 2016 College Football Championship Organizing Committee. “I think it’s possible to do it for a few years in the short run, but year after year would be very difficult, and that’s why we need the state’s help.” As an economic catalyst, Camacho says he’d like to see Arizona host more mega events because of the success GPEC has derived from events like the Super Bowl, which helped convince Apple to look at Mesa and make its most significant investment outside of Cupertino, Calif. “You cannot capture the marketing exposure that mega event give the state in any other way,” Camacho says. “Mega events not only drive economic impact, they drive investment. They also allow us to bring in CEOs who otherwise might not be exposed to the market and allow us to further reinforce Arizona’s ‘open for business’ message.” Cronkite News writers Jason Axelrod and Rebecca Winn contributed to this report.


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