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SPECIAL REPORT 2014

THE REGION’S BUSINESS MAGAZINE

Driving a New Economic

PARADIGM for Southern Arizona

TREO Chairman’s Circle provides insight, impact and influence for our future.


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for a Building economic prosperity requires a solid game plan, one that anticipates change on the horizon. It calls for a roadmap, a master plan for success. To help Tucson realize its economic prowess, Tucson Regional Economic Opportunities – or TREO – in 2007 created its Economic Blueprint to guide development efforts in the region. The 300-page analysis of Tucson’s assets established a framework for private and public sectors to work together to build prosperity, target industries that can shape our future and establish priorities. But much has changed in the region – and in the world – in the last seven years, and TREO is crafting a Blueprint Update to accelerate development efforts in this new economy. What’s different this time? The original blueprint helped TREO to identify the area’s economic drivers, strengths and gaps, while the update will focus on how to best leverage emerging opportunities, according to TREO leadership. The Blueprint Update will build on what has worked with the goal of shoring up areas where progress is still lacking. Committees made up of leaders from private, public and non-profit sectors – armed with input from the community – are studying the issues critical in build70 BizTucson

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ing the economy, and are developing an action plan for optimizing success. Perhaps the greatest challenge to future prosperity lies in identifying and supplying the pipeline of human talent required to meet today’s business demand. It’s a daily concern for some local employers.

Today and in the future, the availability of skilled labor at all levels will drive all market decisions. –

Joe Snell, President & CEO, TREO

Judy Rich, president and CEO of TMC Healthcare, said finding that human talent is critical to Tucson’s success. “As an employer of 3,300 people, I am always concerned about the availability of qualified candidates for our business,” she said. “Talent and workforce development are key components in building our local and regional economy.” Philip Tedesco, CEO of Tucson As-

sociation of Realtors, said the region is currently unable to meet the demand for skilled labor. “When companies are considering moving to the region, access to a skilled labor pool is a critically important part of the decision-making process,” he said. Joe Snell, TREO president and CEO, said strengthening our competitiveness is the main focus of the Blueprint Update. The updated Blueprint will take a “bold and bigger approach” by redefining the concept of “region” and how we will meet market needs, Snell said, which is critical for Arizona to compete in a global economy. At the annual TREO luncheon last fall, it was noted that there are about 150 key markets around the world, and that Arizona competes with about 75 of those “megapolitan” markets that are attracting successful economic enterprise. While Arizona historically has not embraced the concept of marketing shared assets, the rebranding of the region as the Sun Corridor – from Flagstaff south to the border at Nogales – is critical for Arizona’s success in a global market, business leaders contend. “How Arizona goes about proving that it has the means to meet the supply needed lies in redefining the market in the Sun Corridor, and not as individual www.BizTucson.com


BizPROGRESS

Economy By Mary Minor Davis

silos or markets,” Snell added. “Talent has options,” he continued. “Skilled people have options. They’ve got the front range of Colorado, the Austin-Dallas corridor, Route 128 in Boston, the LA-San Diego corridor and the global markets to choose from. It’s just good business to be part of the Sun Corridor. We have all the right assets.” Paul Bonavia, chairman and CEO of UNS Energy, Tucson Electric Power & UniSource Energy Services – which sponsored the first Blueprint and is also sponsoring the update – agrees. “If we don’t see ourselves as part of a larger megapolitan area, we won’t succeed.”

If we don’t see ourselves as part of a larger megapolitan area, we won’t succeed.

– Paul Bonavia, Chairman & CEO UNS Energy, Tucson Electric Power & UniSource Energy Services

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He said TEP’s support of this effort is just “good business.” “We’re the most local business in the world,” he said. “We’re only as strong as our community. For a company like TEP, being interested in creating wealth in our community is the most natural thing for us.” Within the Talent Committee, three areas will be explored – development of 21st century skills, where the talent gap lies from the employers’ perspective, and what the community can do to attract and keep young professionals. Identifying the types of jobs that go unfilled will be included in the work, to help define the steps needed to become more competitive. Healthcare, regional economic development, business environment and infrastructure are other critical issues to be addressed by the TREO committees. Success in these areas greatly determines succees in attracting talent, Snell said. He said while the first Blueprint was “wildly successful” in laying out the region’s first economic development vision, the update must clarify what success looks like in terms of the types of jobs needed. Snell and Bonavia hope that by expanding the collaboration – including industry participation and viewpoints – the process will send the message that

the prosperity of the community is dependent on contribution and ownership among all segments of society. “TREO is not a vending machine that you just put a couple of quarters in and jobs come out,” Snell said. “I hope that by engaging the community more deeply in this update, (everyone) will understand that we don’t outsource economic development in our region. We own it – this is a collective responsibility.” Committees are expected to submit recommendations to TREO by January, and the Blueprint Update is expected to be released in April 2014.

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Blueprint Update Sponsor: Tucson Electric Power Committee Leads: Healthcare Fletcher McCusker, CEO Sinfonia HealthCare Corporation Infrastructure Dennis Minano, vice chair, Sonoran Institute Talent Daisy Jenkins, president Daisy Jenkins & Associates Business Environment David Hutchens, president & COO, UNS Energy, Tucson Electric Power & UniSource Energy Services; and Omar Mireles, executive VP, HSL Properties Regional Economic Development Satish Hiremath, mayor, Town of Oro Valley

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TREO CHAIRMAN OF THE BOARD

Showcasing Our Strengths

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By Mary Minor Davis

It’s been only three years since Guy Gunther and his family moved to Tucson from Denver, but already the VP and GM for Greater Arizona CenturyLink has a keen sense for Southern Arizona’s business assets and its potential to be a global market leader. Serving as TREO’s chairman of the board, Gunther is excited about the opportunities he sees not only for his company, but for Arizona’s economic success. “I stepped in just as some interesting things were happening,” he said, referring to the growing concept of the Sun Corridor, the proposed Interstate 11 project, recent business interest in Tucson and the Blueprint Update. “I see a lot of opportunity for growth, not only for CenturyLink, but also an opportunity to rebrand TREO and the region and establish a strong competitive market.” Rebranding is something Gunther is familiar with. Having been a part of Qwest Communications and the merger with CenturyLink in Colorado, he came to Arizona to showcase the business services offered by CenturyLink and grow market share. “From the CenturyLink perspective, we see a lot of opportunity for growth,” he said. “My role is to look for those additional opportunities to grow the business portfolio. I quickly realized that Tucson and Southern Arizona have a lot to showcase.” CenturyLink’s mission – improving lives by connecting the community and strengthening business – aligned well with TREO’s mission, Gunther said. “The challenge that I saw early on is the fractionalized nature of the community,” he added. “There are different groups out there that all want the best for the region, but I’m not sure that people connect how it all goes hand-in-hand.” As a newcomer, Gunther has read studies conducted by Arizona State University, Arizona Forward, Imagine Greater Tucson and others. “They show we share the same core values – moving forward environmentally, economically and socially. “I see the role of TREO as creating that coalition and seeking defined commonality with the ultimate goal of creating jobs and economic prosperity.” This cannot be accomplished by TREO alone. Gunther is reaching out to groups in the community – neighborhoods, businesses, government entities and other business groups. “We need a coalition that speaks with one voice so that those who are making the larger decisions hear us.” Supporting this effort is a TREO board of “relentless leadership,” Gunther said. “It is remarkable to me the people we have involved are spending time day in and day out because they care about this region and our success. That makes me very proud and it’s what makes it fun for me.” Biz www.BizTucson.com

Guy Gunther VP & GM, Greater Arizona CenturyLink

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TREO IMMEDIATE PAST CHAIR

Q: A:

The one constancy is change. Change in our tastes, preferences, wants and needs. The way a successful organization responds to change is through continuous workforce and talent development. The entity that is successful in this development secures a competitive advantage in attracting and retaining the greatest talent from a shrinking pool. If our region is successful in this effort, it will serve as a key driver to economic prosperity. But it’s not an easy assignment. The workforce from a demographic standpoint presents challenges to companies trying to stay ahead of the competition. That’s why it’s critical to attract a variety of businesses and industries that provide high-paying and diverse opportunities to the workforce.

Q: A:

Why do you invest in and support economic development initiatives?

Q:

Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

A:

Photo: BalfourWalker.com

What is your perspective on the importance of talent and workforce development as a key economic driver?

Q: A:

We rely on economic development as fuel for growth. Economic development provides communities with a growing revenue base that is an attraction for others looking for a stable and prospering community. Economic development allows a community to build a strong educational system and a healthy and sustainable infrastructure. One of the best things we can do for our children is to build a healthy and attractive community where they can raise their own children. This creates a sustainable pipeline of new employees that is vital to our success.

The TREO Blueprint is not designed to be a final solution or answer – I wish it was that simple. It is meant to be a framework that we can use to focus our efforts on economic development. We need this framework to focus our increasingly scarce resources in areas that result in the greatest payoff. I serve on the Talent Committee. If public and private sectors can get the right talent at the right time, the rest will fall into place. What is the outlook for the defense industry in 2014?

Stephen G. Eggen Retired CFO Raytheon Missile Systems

Government sequestration, budget pressures and general lack of progress on these issues in government will continue to put pressure on the industry. The survivors will be those who remain focused on the mission – providing the best products to our war fighters, on cost and on schedule. Companies like Raytheon – which are diversified in product offerings and relentless in the mission – have a strategic advantage. Biz

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TREO SECRETARY/TREASURER

Q: A:

What is your perspective on the importance of talent and workforce development as a key economic driver?

The way Cox Communications brings information and entertainment to our customers is changing daily. We need employees who can deal with a dynamic product set and who can interact with customers whose expectations are also evolving rapidly. A home-grown workforce that can handle the complexities of telecommunications technology and effectively interact with and serve a diverse, experienced and demanding customer base is critical to our business needs today and into the future.

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Q: A:

Why does Cox Communications invest in and support economic development initiatives?

Every Cox Communications customer lives and works in our local market. Our business success is tied to the health and prosperity of our local economy. Economic development efforts are necessary to bring more jobs and industry to our region. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

How our community develops and delivers healthcare services is a foundational economic imperative. Our local community needs to have the best possible healthcare services in the region â&#x20AC;&#x201C; this is critical, not just to the health of our citizens, employees and friends, but to the health and well being of our local economy. What is the outlook for Cox Communications in 2014?

Cox Communications is and will continue to be a success story in Southern Arizona. Our products, services and locally focused workforce give Southern Arizona the telecommunications infrastructure needed for commercial and residential growth now and in the future. Going forward, we are well positioned to expand our operations and networks throughout the region and state.

Lisa Lovallo Market VP, Southern Arizona Cox Communications

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TREO LEADERSHIP

Laser Focus on Talent Gap By Mary Minor Davis

Joe Snell

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President & CEO TREO

Joe Snell has seen tremendous change in his eight years at the helm of TREO. History, the Great Recession and global competition have reshaped his organization’s focus, with new paradigms in economic development bringing about innovative approaches to enhancing economic prosperity. “Arizona has never had to truly compete,” Snell explained. “Blessed with in-migration from 1957 into 2007, Arizona led the country in population growth and a certain amount of income growth – we held a lot of No. 1 rankings. Then the bottom fell out in 2007. The recession changed everything. We can no longer rely on wealth and in-migration.” The secret to success in this new economy is our ability to fill open jobs with a skilled workforce, Snell said. Talent attraction and retention is now the chief driver of the economy. Several thousand jobs go unfilled each year in our region because companies cannot find employees with the skills they need, Snell said. While TREO continues to aggressively recruit new companies and help existing ones expand, the economic development organization is helping to lead the charge in developing strategies that attract and retain talent that companies require. “The old days of recruiting companies and filling those jobs once they are up and running are over,” Snell said. “It’s a new world. We must recruit and develop talent if we want to win. We must help shape our community so that the best and brightest want to live here.” This is a new approach for economic development. Groups like TREO traditionally focused on deals with companies while workforce development groups focused on the supply of employees. The old model is no longer sufficient, Snell said. Both systems must now be connected for success. In this new role, TREO must serve as a “Match.com” – connecting companies with skilled employees. “We must bridge the gulf between the workforce supply system and the economic development demand system so they become one system,” Snell said. “That’s how we’ll win.” Key in this model is the creation of a region that is attractive to highly-skilled workers. “We must build a community where the most sought-after workers want to live and build their lives.” He said the region must have a megapolitan mindset, understanding that one of our greatest strengths is our location in the heart of the Sun Corridor, stretching from north of Phoenix south to Nogales. “We must combine our strengths with those of our neighbors to attract talent and new business,” Snell said. “The days of competing jurisdictions are over.”

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TREO CHAIRMAN’S CIRCLE

Q: A:

Why does Ventana Medical Systems invest in and support economic development initiatives?

Q: A:

Regarding the TREO Blueprint Update, why is this strategic planning initiative important to you?

It is the only way to succeed. Tucson and the region are hidden gems and we need to tell the world about our strengths. Economic development brings in new companies, people and resources to fuel innovation and technology breakthroughs that will benefit our community for generations to come.

First, we need an integrated Blueprint to ensure that the business community and government are aligned in the priorities. I serve on the Healthcare and Talent Committees. Like many employers in Southern Arizona, we find it challenging to attract and maintain a professional talent pool when complementary opportunities for new recruits’ spouses and partners are lacking. TREO’s Gateway Tucson program was formed to address these issues. The Talent Committee will provide strategies for other equally important issues – including working with our schools and universities to help ensure that our young people are developing the 21st century skills needed to meet tomorrow’s business demands.

Q: A:

What is the outlook for Ventana Medical Systems in 2014?

Strong and expanding. We are growing in every part of our business in every part of the world. We are the fastest growing business area within Roche Diagnostics. Our mission at Ventana is to improve the lives of all patients afflicted with cancer. We fulfill our mission through enabling accurate and timely diagnoses and customized treatment options for cancer patients. We are committed to advancing personalized healthcare by developing diagnostics for targeted new drugs. The value of this approach is rooted in positive outcomes for patients — saving lives and improving quality of life. With Ventana and the Roche Group together, there is no better company in the world to make this approach a reality.

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President & CEO

Ventana Medical Systems depends upon Southern Arizona’s strengths in science, engineering and skilled manufacturing, as well as a host of supporting professions. Our business is growing very quickly, so developing and retaining talent is a critical component of our success. If we are unable to bring in and keep the stellar talent we require, Ventana and other businesses could be at tremendous risk. We must make Southern Arizona attractive to the best and brightest in the nation and world.

Q: A:

Mara G. Aspinall Ventana Medical Systems, Inc.

What is your perspective on the importance of talent and workforce development as a key economic driver?


TREO CHAIRMAN’S CIRCLE

Q: A:

Q: A:

Q: A:

Q: A:

What is your perspective on the importance of talent and workforce development as a key economic driver?

Our field requires an extremely skilled workforce. Our professionals must be knowledgeable and well-trained. They must be dedicated and compassionate. This combination is critical to a successful medical outcome for our patients. Recruitment of the right individuals – who together become a dynamic healthcare team – is important to our organization’s reputation. The ability of any healthcare system or medical practice to become a vital and respected community partner is intrinsically linked to its ability to build a workforce that shares its values and commitment to community. Why does Carondelet Health Network invest in and support economic development initiatives?

The most successful and stable economies in our country appear to be those in which major businesses help one another. The community’s overall economic strength lies in its business leaders sharing ideas, supporting one another’s growth, encouraging expansion by other potential employers, providing support and incentives for small business development, and working together to better the future outlook for all residents. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

As a Healthcare Committee member, I am encouraged by the incredible enthusiasm of the members of our group toward strengthening the well-being of this community. Carondelet made a commitment more than a year ago to move away from a focus on reactive medical care and toward a model that provides Tucsonans with avenues to proactively manage their health. We are committed to keeping the healthy well, working with at-risk patients to mitigate problems before they develop into chronic illnesses, and managing the chronically ill so they can live their very best lives. I see an interest among all members of our committee to make Tucson a healthier place to live and to build a reputation as one of the healthiest places in America.

James K. Beckmann President & CEO Carondelet Health Network

What is the outlook for your industry in 2014?

The healthcare industry and healthcare reform have taken center stage nationally. People are more aware of the status of their own health and the cost of managing their medical care. They are willing to educate themselves about both. I think 2014 will see greater focus on individual responsibility for one’s health and drive forward the concept of strengthening well-being as a way to manage healthcare costs in America.

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TREO CHAIRMAN’S CIRCLE

Q: A:

Q: A:

Q: Paul Bonavia

A:

Chairman & CEO UNS Energy, Tucson Electric Power & UniSource Energy Services

What is your perspective on the importance of talent and workforce development as a key economic driver?

To attract employers that offer quality, high-wage jobs, our community needs a highly skilled workforce that can fill those positions. We already have diverse educational resources with The University of Arizona, Pima Community College and other institutions. Our economy is changing, and opportunities emerge and develop over time. Our workforce needs to remain flexible to remain competitive. Why do UNS Energy, Tucson Electric Power and UniSource Energy Services invest in and support economic development initiatives?

As a public utility company, we rise and fall with the communities that we serve. We provide service here in the Tucson metropolitan area, our employees live here and our customers live here. Not only is this company’s livelihood tied to the community, so is the quality of life for our employees and their families. We are part of this community and we want it to succeed. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

Building a regional economic plan – or updating one, as we’re preparing to do – is an inclusive process that requires discussion among many participants with many different perspectives. It should spark discussion and collaboration between businesses, government entities, nonprofit organizations and residents of the community. That’s important because it gives members of the community an opportunity to identify their needs and how they can contribute to improving our economy. The original blueprint gave us a foundation and an action plan to follow. This update is important because we’ve seen many changes in the global marketplace and emerging opportunities for our region in international commerce. Aspects of our economy are showing signs of improvement and projections suggest that Arizona’s economic growth will outpace the national average in the coming years. The Blueprint Update will help our community to pursue these developing opportunities. What is the outlook for your industry and business in 2014?

New environmental regulations and developing technologies will continue to affect our industry and how TEP delivers the most cost-effective, reliable service to our customers. We’re making significant progress toward diversifying our generating fuel mix. Although we anticipate generally flat retail sales next year, we continue to focus on working efficiently, keeping our operating expenses down and investing in our electrical system to ensure we continue to meet or exceed our customers’ expectations.

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Q: A:


TREO CHAIRMAN’S CIRCLE

Q: A:

What is your perspective on the importance of talent and workforce development as a key economic driver?

Let’s face it – big companies moving to town are the superstars that grab the headlines, while workforce development efforts remain in the background. Sexy or not, workforce development is the foundation of the local economy. Our prosperity is tied to whether our residents can find work and whether companies can hire our residents. Building productivity in a time of increased global competition and accelerating innovation is a complex undertaking that demands focus and investment. We must keep up with the skills required to capitalize on emerging technologies.

Q: A:

Why does Pima County invest in and support economic development initiatives?

As a major funder, Pima County supports TREO’s economic development efforts because the organization represents a “one stop” service that clients demand. It has long been recognized that fragmented, “go it alone” approaches will lose out every time to a regional, cohesive approach that emphasizes the strength of a community – regardless of jurisdictional boundaries. The reality is that local jurisdictions have far more in common than they have apart. A unified voice is key when competing with other communities that may have greater resources and name recognition.

Q: A:

Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

Sharon Bronson Vice Chair Pima County Board of Supervisors

When the Blueprint was first developed, we were in a very different economic environment, so I am highly engaged in revisiting some of the key features, such as developing local talent. We are no longer competing with each other locally or even across the state. We’re competing globally. That changing dynamic will force us to start thinking as partners while finding our own niche. That’s why I am pleased that we’ve been successful in several grants that leverage our border connections – both in strengthening our logistics positioning and in developing a strategic plan for manufacturing.

Q: A:

What is the outlook for Pima County in 2014?

Uncertainty is not helpful in a recovering economy, but I am optimistic about 2014 at a local level. Energy is building around our southern corridor, providing new opportunities for growth around our strengths – including military & defense, international trade and new technologies. Our partnerships are strong with The University of Arizona and Pima Community College, which are committed to growing the talent pipeline that companies require. We can’t be ambivalent about seizing opportunities that ultimately will help fuel the high-paying, science-based jobs we seek. Biz

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TREO CHAIRMAN’S CIRCLE

Q: A:

What is your perspective on the importance of talent and workforce development as a key economic driver?

Clearly all metropolitan areas are in a race to add primary industries and the resulting jobs and wages. It is increasingly evident that the depth and breadth of the local talent pool is the primary differentiating factor for companies deciding where to locate. For our region to be competitive going forward, it is imperative that we understand this and take the necessary holistic actions to be competitive – not only regionally, but nationally and internationally. If we are to ever take advantage of the potential opportunities the growing Sun Corridor has to offer, we must develop the strategies and tactics necessary to attract and retain world-class talent. Economic development in Southern Arizona will stagnate without a concerted effort in this area.

A: James H. Click, Jr. President Jim Click Automotive Team

Q: A: Q: A:

Why does the Jim Click Automotive Team invest in and support economic development initiatives?

Long-term economic development is the lifeblood that a business needs to grow and provide adequate capital returns. Failure to continually invest in economic development efforts exposes businesses to the potential of “the well drying up.” This is not a recipe for a vibrant region. Choosing to not invest in economic development is perilous. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

The Talent Committee is a critical piece in the blueprint. The future of our region depends on the development of the talent pool. What is the outlook for the automotive industry in 2014?

The auto industry continues to rebound consistently from the depths of the recession. We anticipate that 2014 will follow that trend. In fact, we anticipate an even stronger growth rate year over year. The average age of the U.S. vehicle fleet is more than 11 years, a number that continues to grow. Clearly the need to replace aging vehicles is significant as businesses and consumers make those purchase decisions.

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Q:


TREO CHAIRMAN’S CIRCLE

Q: A:

Q: A:

Q: A:

Q: A:

What is your perspective on the importance of talent and workforce development as a key economic driver?

We are now in a knowledge economy, where industries follow the workforce as opposed to the other way around. With the increasing pace of innovation and the intensity of global competition, the quality of an organization’s workforce has become a prime determinant of whether it survives or fails. Likewise, the quality of a region’s workforce is a prime determinant of whether or not there are plentiful high-wage jobs and a strong tax base. Why does Arizona State University invest in and support economic development initiatives?

ASU is a public university whose mission – as a public trust – includes serving as an economic engine for Arizona. We produce more highly skilled college graduates – by orders of magnitude – than any other institution. That makes us a major supplier of the human capital necessary for Arizona’s economic growth and prosperity. We are also interested in making sure there is an ample supply of high wage, attractive jobs so students will remain in Arizona after they graduate.

Michael Crow

Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

President

Businesses in Tucson and throughout the Sun Corridor are having trouble finding qualified employees because of the level of education or training required in the knowledge economy. To address this, all elements of the Arizona educational pipeline must be strong, including K-12, community colleges and universities. Quality-of-life issues are also important to the modern workforce, especially the “creative class” that Richard Florida has shown to be a key driving force for economic development in U.S. cities. Quality-of-life issues include having libraries, museums, performing arts venues, symposia and lectures, as well as continuing education for employees and educational options for their children.

Arizona State University

What is the outlook for ASU and higher education in 2014?

At ASU, we have two principal products – education and research. In 2012, U.S. college enrollment declined for the first time in six years. In Arizona, enrollments have continued to increase – due to an overflow of qualified students from California combined with moderate tuition increases and high levels of financial aid for those with financial need. On the research front, cuts in federal funding are an issue for all research universities. At ASU, we are continuing to compete for and win federal projects and programs at a high level, and we are diversifying our portfolio by pursuing corporate and international projects.

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TREO CHAIRMAN’S CIRCLE

Q: A:

Q: A:

What is your perspective on the importance of talent and workforce development as a key economic driver?

The knowledge-based economy we face today is considerably different than the economy of the past where skills could be quickly acquired and utilized in a specific trade. Companies are attracted to potential employees who are able to learn new skills and drive the inevitable changes in disciplines and technology through innovative and synergistic approaches to the challenges of the 21st century. Why does The University of Arizona invest in and support economic development initiatives?

The UA is committed to developing Arizona into a dynamic leader in the global economy. We already have world-class industry and businesses in biosciences and healthcare, astronomy, aerospace and other fields. With economic growth and innovation, the people of Arizona can build on this foundation to create job security, adequate and affordable healthcare, a thriving culture and community, top-quality education and a fulfilling life. We must work together to break with conventional business models and diversify sources of revenue for higher education and government. Building economic partnerships will ensure that Arizona is a viable destination for industries to prosper and to benefit from each other’s successes.

A: Ann Weaver Hart President The University of Arizona

Q: A:

Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

For the UA to be successful in reinventing our land grant mission for the 21st and 22nd centuries, it is critical that we work with our partners to ensure our teaching and research target the real-world problems faced by Southern Arizona’s residents, families, businesses and leaders. I see TREO’s Blueprint as instrumental in ensuring synergy between the UA’s strategic priorities and those of the Tucson and Southern Arizona region to build on existing strengths and create new areas of economic development. What is the outlook for UA and higher education in 2014?

Higher education faces many challenges. However, by generating a supportive environment where students and faculty can develop creative solutions to real-world problems, the UA will be on the forefront of educating a new, integrative workforce equipped with a global mindset. Our faculty will continue leading the way in innovative research and creative inquiry. The UA’s strategic vision of engagement, innovation, partnership and synergy models Arizona’s path to meeting the challenges of the 21st century, and with our new academic strategic plan – Never Settle – 2014 promises to be an outstanding year.

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Q:


TREO CHAIRMAN’S CIRCLE

Q: A:

Q: A: Q: A:

Q: A:

What is your perspective on the importance of talent and workforce development as a key economic driver?

Workforce quality is the crucial factor in the success of individual businesses and – collectively – in Tucson’s ability to provide high-skill jobs for its residents. Adults who can write clearly, think critically and compute accurately will give Tucson the edge it needs to be a successful player in a brutally competitive 21st century global marketplace. Why does Pima Community College invest in and support economic development initiatives?

Tucson is among the poorest cities in the United States. That fact alone should animate any publicly funded institution to develop strategies to provide those in need with the opportunities for leading more prosperous lives. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

Educational excellence is crucial to PCC because all educators – from pre-K through college – should have as a common goal producing college- or career-ready adults. Education must be integrated to ensure that students have the ability to progress successfully at the next level. PCC will continue to work with local K-12 districts and the state’s public universities to best synchronize our efforts for the benefit of our students.

Lee Lambert Chancellor Pima Community College

What is the outlook for PCC and higher education in 2014?

Technological advances and a push for greater accountability are ushering in a new era of rapid change in higher education. The challenge for institutions such as PCC is to channel these transformative forces so that we can improve services to our students and the community. For example, the classrooms and labs in our new building at Northwest Campus – scheduled to open this spring – are hard-wired with the latest interactive-learning technologies. Similarly, knowing that 20 percent of our students took at least one online class this year, we are exploring the potential of Massive Open Online Courses to enhance learning and give our students affordable education options. Tying government funding of higher education to schools’ performance will be a topic of public policy debate for the foreseeable future. PCC has participated in a pilot program to develop measures of accountability that accurately capture the unique role of community colleges in the education pipeline. We will vigorously advocate at all levels of government for sensible reforms that put students first.

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What is your perspective on the importance of talent and workforce development as a key economic driver?

Tucson has not been an easy place to recruit big-league talent, despite our weather and our quality of life. Recruits often are concerned that their significant other will have difficulty finding quality employment here. They are often concerned about their ability to move to another employer in the same sector. Our sectors are not very deep. We need to develop talent, recruit our colleagues and create a rich spin-off environment so risk-takers see upward opportunity in our region. Nothing is more important.

A: Q: A: Fletcher McCusker CEO Sinfonia HealthCare Corporation

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Why does Sinfonia HealthCare invest in and support economic development initiatives?

A high tide raises all ships. If Tucson thrives and grows, our business grows. The government has not proven to be an effective economic driver, and these efforts are better off in the private sector. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

I chair the Healthcare Committee, which is an inspired group of system executives. We believe the time is right for Tucson to become a major healthcare destination, focused on wellness and prevention, education and state-of-the-art medical care systems. What is the outlook for the healthcare industry and Sinfonia HealthCare in 2014?

Healthcare in 2014 is facing a revolution. As the Affordable Care Act rolls out, millions of people will become eligible for insurance. Home healthcare will grow dramatically as patients and payers look to innovative new delivery models based on the new demand.

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What is your perspective on the importance of talent and workforce development as a key economic driver?

An educational system that prepares students for employment with specific skills identified by the business community is critical to a healthy business climate. Hiring locally develops a broad community attachment, is less costly for businesses and keeps talented young people in our communities. K-12 and higher education must produce graduates with general and specific employment skills. Why does your business invest in and support economic development initiatives?

CopperPoint Mutual Insurance Company – formerly SCF Arizona – believes that a healthy and growing business climate provides more opportunity for our company, broader support to the economic development and cultural strength of our communities and is good for our future. Healthy businesses produce a stronger tax base and volunteer base. Having a diverse business base provides more employment opportunities for our families and our children. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

As a member of the Infrastructure Committee, I can’t emphasize enough our support of the extension of Interstate 11 south to Mexico’s border. The issue is more pressing today than it was 20 years ago when the North American Free Trade Agreement – or NAFTA – was in its infancy.

Judy Patrick Chairman of the Board CopperPoint Mutual Insurance Company (formerly SCF Arizona)

This corridor has the highest potential of any other in the state to become a successful import distribution zone. With its proximity to interstates, Tucson International Airport, the Port of Tucson and adjacent rail it is critical that we make significant investments in this kind of public infrastructure. Thousands of jobs depend on trade with Mexico and thousands more will be created if we commit to extending a gateway that already accounts for more than $20 billion worth of imports and exports annually. This is a cornerstone of the Blueprint Update and it embodies a truly sound economic development strategy.

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What is the outlook for your business in 2014?

CopperPoint’s business is dependent on the health of Arizona’s business community. We believe 2014 will continue with slow but steady business expansion and employment growth. Our efforts will continue to help existing businesses expand while we work on improving our education and transportation systems to encourage business relocations in the future.

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Judy Rich President & CEO TMC Healthcare

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What is your perspective on the importance of talent and workforce development as a key economic driver?

As an employer of 3,300 people, I am always concerned about the availability of qualified candidates for our business. From the ability to read all the way to the mastery of highly technical skills, healthcare is counting on the community to train our future workforce. Talent and workforce development are key components in building our local and regional economy. Why does Tucson Medical Center and TMC Healthcare invest in and support economic development initiatives?

A strong, healthy and vibrant community is critical to us as we recruit talent from all over the country. Growth is essential to sustain our goals as a provider of healthcare. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

The Healthcare committee is bringing together healthcare leaders from across the region in a new and exciting collaboration that I have never before seen in Tucson. Our strength lies in our collective good work, and I am encouraged by our efforts in this area that are critical to the future growth and success of our region. What is the outlook for your industry and business in 2014?

We are expecting many changes in 2014, primarily from Medicaid expansion and the Health Information Exchanges. The shift from simply paying for healthcare to obtaining value in healthcare is strongly influencing our perspective and driving our plans for the future.

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What is your perspective on the importance of talent and workforce development as a key economic driver?

Now more than ever, having a deep, quality workforce is a priority because employers face increasing competitive pressures in this 21st century global economy. Education and skills are vital to economic success. Fulfilling that requirement locally makes K-12 education, technical training and secondary education the keys to the region’s long-term economic strength. Currently, the region cannot meet the demand for skilled labor. Workforce development and retention is the most critical link to retaining existing businesses and attracting new companies that provide high-wage jobs.

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Why does the Tucson Association of Realtors invest in and support economic development initiatives?

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Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

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The Tucson Association of Realtors invests in economic development initiatives to strengthen the region. Increasing capacity, developing additional economic drivers and putting expanded infrastructure in place supports future growth. Increased public/private partnerships and ongoing investment from the business community will continue to be critical to our success.

Serving on the TREO Infrastructure Committee has been important to me and the Tucson Association of Realtors because Southern Arizona’s successful future will rely heavily on an expanded regional transportation plan. The proposed Intermountain West Corridor has been identified as the potential primary Arizona gateway to Mexico for rail, truck, and passenger traffic through Nogales, based on usage and infrastructure investment. The concept is to connect air, freight, trucking, and economic activity centers in a major trade corridor stretching from Canada to Mexico. The most critical infrastructure roadway project will be linking Las Vegas and Phoenix, the two largest cities in the nation not connected by an interstate highway, before running south through Tucson all the way to the port of Guaymas, Mexico. Positioning Tucson as a multimodal transportation hub will ensure its future viability and competitiveness.

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Philip B. Tedesco CEO

What is the outlook for your industry in 2014?

The real estate industry in Tucson is showing positive signs. Home prices are increasing, as are total sale volume and total unit sales. A more traditional market is developing as we come out of the worst economic downturn in years. The Tucson Association of Realtors saw a 34 percent decline in membership over the last six years. The downturn was managed strategically, and the association is well-positioned to continue to be successful in the coming years.

Tucson Association of Realtors

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What is your perspective on the importance of talent and workforce development as a key economic driver?

We are fortunate to have The University of Arizona in our backyard as an incubator for developing talent and expertise in the health professions and biomedical sciences. We must recruit and retain the best of these new physicians, nurses, pharmacists and researchers in Southern Arizona. At The University of Arizona Medical Center ��� South Campus we have expanded our residency spots to better serve the community and offset an impending physician shortage in Arizona. We need even more residencies to develop home-grown talent in our state. The average healthcare worker and physician are getting close to retirement. Who will take care of us? Healthcare will continue to be one of the top job-creating industries. There is tremendous opportunity to contribute to economic development and job creation through teaching and training our future healthcare workforce.

President & CEO The University of Arizona Health Network

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Why does UA Health Network invest in and support economic development initiatives?

When I think about economic development, I think about education. Excellent healthcare requires a highly educated, skilled workforce. We need strong schools and we must support education at all levels. Tucson can’t hope to attract the best and brightest without it. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

The Blueprint Healthcare Committee is important to our region. This committee, which includes the major providers in Tucson, provides a forum for us to look at health and healthcare issues from the community perspective. It is a great opportunity for us to network and explore initiatives that will improve the health of our community and examine opportunities to decrease healthcare costs. What is the outlook for UA Health Network and your industry in 2014?

Healthcare reform is here. That brings challenges and opportunities. Thousands of previously uninsured Americans will now be able to afford health insurance, which is a great thing. We may see increased demand for medical services by a population that has been doing without them. We are gearing up to be ready to meet that pent-up demand. Additionally, we are investing millions of dollars in technology. UA Health Network recently implemented an integrated electronic health records system that will make our care more coordinated and improve patient safety and quality. More than 10,000 physicians and staff members received training on this system, and we expect it to translate into improved patient care.

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Dr. Mike Waldrum

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TREO CHAIRMAN’S CIRCLE

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What is your perspective on the importance of talent and workforce development as a key economic driver?

Businesses look for three factors when determining their next corporate move – competitive tax structure, regulatory environment and access to highly skilled talent. Arizona is known as a top state for the quality and availability of its workforce – ranking No. 2 in the country and No. 1 in higher education degree opportunities. We are fortunate in that we have world-renowned university systems and community colleges graduating the best-qualified and most brilliant minds in high-demand disciplines. But we must continue to align industry and academia to better prepare our workforce. That’s why the Arizona Commerce Authority (ACA) continues to execute its Sector Strategies, which have become a national model. The strategies provide an ongoing commitment to bringing together industry and education to cultivate a highly skilled workforce.

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Why does the ACA invest in and support economic development initiatives?

The ACA was created by historic legislation – the Arizona Competitiveness Package, which was a bold plan that overhauled our tax system, streamlined our regulatory structure, developed a portfolio of incentives and honed our focus on business recruitment, expansion and creation. The ACA is the state’s premier economic-development arm. We are committed to attracting quality companies to the state and helping existing companies to create quality jobs for the economic health and well-being of Arizona.

Sandra Watson President & CEO Arizona Commerce Authority

Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

I am proud to serve on TREO’s Business Environment committee, focusing on strengthening Arizona’s competitiveness, business-friendly environment, incentives and more. To attract highvalue, high growth-potential companies, Arizona must improve upon its competitiveness and incentive offerings. What is the outlook for your agency in 2014?

I could not be more excited about the future. The ACA is working with more than 400 companies that are in various stages of expansion and relocation decisions. We are working on bold initiatives that I believe will elevate Arizona as a leader in economic development. The ACA serves as a corporate connector, a problem-solver for the state and will continue to be a go-to leader in credible data for businesses. We are also adopting an idea that I call “economic development without boundaries” – one that capitalizes on Arizona’s assets and leverages the attributes of our neighbors, specifically California and Mexico. We are building an action plan to capitalize on these strengths. Biz

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Q: A: Greg White VP of Finance Raytheon Missile Systems

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What is your perspective on the importance of talent and workforce development as a key economic driver?

Strengthening the talent pipeline is critical to our success as a region. We are fortunate to have one of the nation’s finest research universities right here in Tucson, producing some of the nation’s top talent. The University of Arizona is considered a top tier research institution. Many people don’t realize it, but as a company, Raytheon recruits more engineers from the UA than any other university in the nation. From our sophisticated high-tech research to our commitment to improving educational opportunities for students throughout Tucson, we work closely with the UA on a daily – if not hourly – basis. Raytheon believes the state must adequately fund our higher educational intuitions to build our talent pool to not only benefit our company, but all Arizonans. Why does Raytheon Missile Systems invest in and support economic development initiatives?

Economic development is critical to our future. It’s imperative that our elected officials and business leaders continue working together. If Southern Arizona is to continue growing and strengthening its economy, we must form a bipartisan team to make our part of the state attractive to existing businesses and new ones. Whether it’s improved tax incentives, upgrading our infrastructure, strengthening our educational commitment or developing a new aerospace & defense corridor, these are investments in Southern Arizona’s future we must all support. Regarding the TREO Blueprint Update, why is the committee you serve on in this strategic planning initiative important to you?

It’s important to me to serve on TREO’s Business Environment Committee as it monitors the pulse and supports growth of the region’s businesses, while keeping an eye on the future. Raytheon contributes its perspective as an international export business, and we work to ensure Tucson is attractive to new businesses while striving to retain and provide appropriate support for those already here. What is the outlook for Raytheon Missile Systems in 2014?

We continue to perform well for our customers around the globe. There are certainly challenges – including sequestration, the government shut down and uncertain defense budgets – but with a broad portfolio of products, cutting-edge technology and incredible employees, we are well positioned now and in the future.

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TREO LEADERSHIP

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Bonnie Allin President & CEO Tucson Airport Authority

Duane Blumberg Mayor Town of Sahuarita

Kevin Burnett Senior VP & CFO The Sundt Companies

Vision for Economic Development

Vision for Economic Development

Vision for Economic Development

Enhancing opportunities for growth and employing citizens in living-wage jobs is critical to the region’s prosperity, said Allin, who serves on TREO’s Infrastructure Committee. Tucson International Airport is one of the community’s key economic drivers, contributing $3.2 billion to the local economy annually and supporting 35,000 jobs. She sees TIA is an important component in the multi-modal logistics center that will promote Southern Arizona as a premier location for international business development.

Transportation infrastructure will be a key factor in the growth and development of Southern Arizona and the Sun Corridor, said Blumberg, who serves on TREO’s Infrastructure and Regional Economic Development committees. He believes it’s important for the region to reach consensus on projects – even when there are greatly differing viewpoints – and TREO plays a major role in the leadership of these issues.

The Infrastructure Committee, of which Burnett is a member, is working on initiatives to support infrastructure projects in Southern Arizona that are critical to economic growth. These include the proposed Interstate 11 corridor and area transportation improvements planned for the next five to 10 years. The main challenge, Burnett said, is identifying and obtaining federal, state, local and private sources of funding to make these projects a reality.

2014 Industry Outlook

The future for aviation contains challenges, particularly with regard to passenger air service due to the slow economy and changes in airline business models. Community involvement will be necessary to move ahead through the coming years, she said.

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Recent upticks in economic graphs are reflected in increased business activity in Sahuarita. Developers have resumed investing in additional housing units and amenities, and several new businesses are opening to serve the community.

Winter 2014

Kathy Byrne Executive Director El Rio Community Health Center Byrne, who serves on the Healthcare Committee, is a graduate of Georgetown University School of Foreign Service. Before she came to El Rio, Byrne worked for Carondelet Health Network, where she was responsible for strategic planning and new program development. She served as president and CEO of Mercy Care Plan, a joint venture of Carondelet and St. Joseph’s Hospital, and was assistant director with the state Medicaid program.

2014 Industry Outlook

Burnett believes the commercial construction market in the Tucson area and the state will remain slow in 2014 due to continued governmental budget pressures that limit the number and size of projects awarded. He sees private sector construction improving slowly, mostly in single family and multifamily residential housing and developer-built student housing.

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Bruce Dusenberry Business Development Consultant Suddath Relocation Systems President & CEO Horizon Moving Systems Vision for Economic Development

Dusenberry serves on TREO’s Business Environment Committee, which explores ways to better support political and business leaders who make decisions that are in the best interest of the community. Initiating and continuing positive communication between these important groups is essential in attracting new business and talent to the region in an increasingly competitive global market and to ensure a healthy business environment and quality of life for residents. 2014 Industry Outlook

The housing market crash experienced throughout the country during the recent recession had a harmful impact on the relocation industry. However, increased business volume seen over the past two years suggests continuing growth in 2014.

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Duane Froeschle President Alliance Bank of Arizona Vision for Economic Development

A frank assessment of the competiveness and responsiveness to existing or incoming employers in our area is necessary, said Froeschle, who serves on the Business Environment Committee. He believes clarity will help private and public leaders work together to enhance the environment for growing job opportunities. He hopes this assessment can be referenced in conversations throughout the community to establish a clearer understanding of the importance of maintaining a business-friendly environment. 2014 Industry Outlook

While Froeschle recognizes the existence of several national economic threats in the banking industry, he believes many businesses have improved their operations and that the region is positioned to lead the economic recovery.

Winter 2014

Ed Hadley President, Southwest USA Walton Development and Management Vision for Economic Development

With Walton’s ownership of more than 10,000 acres in Arizona – primarily in the Sun Corridor – Hadley has the opportunity to make a difference in the area’s development. He believes that Arizona’s success in competing in a global economy depends on its ability to plan for and invest in the region’s infrastructure needs. Hadley, who serves on TREO’s Infrastructure Committee, recognizes the importance of sustainable planning that is both flexible and scalable to accommodate the demands of Arizona’s diverse and improving economy. 2014 Industry Outlook

Housing and land development look positive, although Hadley said growth will continue to be gradual and highly concentrated in core submarkets until employment expansion warrants normal growth absorption for all real estate uses.

Mike Hammond President & CEO Cushman & Wakefield ǀ PICOR Commercial Real Estate Services Vision for Economic Development

Hammond serves on the Infrastructure Committee because of its vital role in the region’s economic growth. If the region is to provide a vibrant community offering quality jobs – for today’s workers and tomorrow’s – the region must strategically invest in new infrastructure, he said. 2014 Industry Outlook

Tucson and Southern Arizona depend heavily on government spending, which is not likely to increase significantly in the near term and could drag down the economy. Hammond said the private sector is rebounding, however, particularly in housing. He believes our proximity to Mexico – as well as the recent burst in activity from the bioscience and mining industries – will help our economy. Overall, his outlook is for slow growth in 2014.

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William Harris President & CEO Science Foundation Arizona

Satish Hiremath Mayor Town of Oro Valley

Ed Honea Mayor Town of Marana

Harris leads SFAz, a nonprofit organization that was created in 2006 from the collaboration of Southern Arizona Leadership Council, Greater Phoenix Leadership and the Flagstaff 40. Its goals are to invest in scientific and engineering areas of economic importance to Arizona, facilitate collaborations between research institutions and industry, support education in science, technology, engineering and math, and attract and retain world-class jobs and talent – much the same as TREO’s mission and work.

Vision for Economic Development

Vision for Economic Development

Since he’s been involved with TREO, Hiremath, who leads the Regional Economic Development Committee, said he has come to understand that when a project lands in a particular jurisdiction it benefits the entire region. And regardless of how much private and government sectors might want to work independently, they are very much intertwined and need to be open to partnerships.

Because of his belief in growing the local economy, Honea is dedicated to his work on the Business Environment and Regional Economic Development committees. If we fail to create an atmosphere in our region that is good for business, we are doomed for failure, Honea said. As a leader in economic growth, TREO will continue to alter its business model as needed to ensure long-term success for the Tucson metropolitan area, he said.

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2014 Industry Outlook

Hiremath reported a strong outlook for Oro Valley, with rapid expansion anticipated for 2014 based on growth indicators in all sectors. The town is making strides in business space availability, residential growth and private capital investment. Oro Valley plans to continue its focus on the high-tech and bioscience corridor.

Winter 2014

2014 Industry Outlook

The Town of Marana is excelling in housing and business starts and expects that to continue in the coming year.

David Hutchens President & COO UNS Energy, Tucson Electric Power & UniSource Energy Services Vision for Economic Development

Hutchens, who co-leads the Business Environment Committee, said the original Blueprint helped TREO to identify the area’s driving industries, strengths and growth opportunities, while the update will focus on how to best take advantage of emerging opportunities. 2014 Industry Outlook

TEP is pursuing plans to diversify its generation portfolio, which includes using fewer coal-fired resources, purchasing more natural gas-fired resources, expanding the use of renewable resources and looking at the most cost-effective options available.

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Daisy Jenkins President Daisy Jenkins & Associates

Gregg Johnson Campus Director University of Phoenix

Bill Kelley CFO Diamond Ventures

Vision for Economic Development

After graduating from the University of Utah, Johnson became a Navy pilot and then directed church educational programs. He served as a school administrator in Utah before joining the University of Phoenix, where he leads the six Southern Arizona campuses. His responsibilities include overseeing enrollment, finance, student services and academic affairs. Johnson serves on the Talent Committee, and is active in the community, working with a number of organizations, including Tucson Hispanic Chamber of Commerce, Community Food Bank and Boys & Girls Clubs of Tucson.

Vision for Economic Development

As the lead of the Talent Committee, Jenkins said identifying the challenges and opportunities for talent – or what she calls human capital development – is important to the Tucson region. Talent is a key driver of economic development, and the region must create an environment that both attracts and retains top talent in skills, aptitude, creativity and innovation, she added. The committee’s goal is to keep University of Arizona graduates here and to ensure that a talented workforce becomes a competitive advantage for the Tucson region. This will be achieved by cooperation and collaboration among all sectors of the community, including academic and business populations, city and county governments and numerous local organizations that have initiatives related to economic growth and development.

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Kelley serves on the Business Development and Infrastructure committees, which he believes are two of the most critical issues for Tucson’s future. With his commitment to TREO, Kelley is striving to help attract employers in sectors that will broaden our employment base with higher-paying jobs. His involvement with the Infrastructure Committee is also focused on the long-term future of the region by identifying investment in projects that are necessary to attract such employers. 2014 Industry Outlook

Kelley reports that Diamond Ventures is positioned to take advantage of the recovering real estate market and is actively developing and investing in projects for 2014 and beyond. This includes both residential and commercial development in the Tucson area.

Adriana Kong Romero Senior VP, Tucson Market President Bank of America Vision for Economic Development

As a member of the Talent Committee, Kong Romero embraces the work because she understands that retaining and attracting key talent is important to the growth of Tucson. The committee is identifying gaps, misconceptions and opportunities and working with businesses and local leaders to create a strategy to grow talent, thus building a stronger region economically. 2014 Industry Outlook

Romero sees a positive outlook for financial institutions in the coming year. Specifically in the case of her employer, she’s noticing a continued focus on helping customers attain their financial goals. She feels that this commitment helps drive the economy – on a global, national and local basis.

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Steve Lace Past President Tucson New Car Dealers Association

Xavier Manrique Senior VP, Arizona Regional Commercial Banking Office Wells Fargo Bank

Lace, who serves on the Blueprint Talent Committee, is VP of Royal Automotive Group & Lexus of Tucson. Lace is responsible for the operations of the company’s eight locations and seven new vehicle franchises. He sees a variety of new products and technological advances from automobile manufacturers continuing to grow, which will result in more niche products at reasonable price points. Lace is a former board member of Tucson Medical Center Foundation.

Vision for Economic Development

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Lawrence Mehren President & CEO Accelerate Diagnostics Vision for Economic Development

Frances McLane Merryman VP, Wealth Strategies Group The Northern Trust Company

With TREO’s focus on Southern Arizona’s economic expansion through the bioscience and solar industries and Wells Fargo’s involvement in funding for technology and science, Manrique is excited to serve as an Innovation liaison. Since 2007, Wells Fargo has funded $21 billion for clean technology nationwide, including solar and wind projects.

As a small company competing with multi-billion-dollar international giants, one of the most important competitive advantages is rapid innovation, Mehren said. And at the core of rapid innovation are people … great people. With them, Accelerate – and the region – can compete, win and build a leadership position in a valuable market, he said. Without them, we will struggle.

Vision for Economic Development

2014 Industry Outlook

2014 Industry Outlook

2014 Industry Outlook

Despite a challenging economy, Wells Fargo’s loans and deposits are experiencing strong growth, and credit quality continues to improve, according to Manrique. Increased small business optimism and a dramatic improvement in household net worth are additional positive signs of recovery. Housing is also showing strong momentum going into the future.

Our industry is being shaped by legislative, demographic and economic changes beyond our control. In the end, however, we believe that products that offer real solutions to critical problems will always find a ready market. Our products do just that, and combined with a great team, an innovative pipeline and solid investor support, we are confident that the future for Accelerate Diagnostics is bright.

Northern Trust achieved its objectives of growing and improving productivity in 2013, allowing for a stronger financial future. The financial markets in general, she reported, are projected to show steady and stronger growth in the coming year, assuming political discord in the U.S. government does not result in another standoff. The European economy is expected to show a slow recovery, and China’s growth data has improved in recent months.

Winter 2014

Merryman serves as an Education liaison because she believes that providing an outstanding educational environment is critical in developing a qualified workforce to fill 21st century jobs and raising the wealth of our region. The communities that can educate, attract and retain human capital will come out ahead.

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Dennis Minano Vice Chair Sonoran Institute

Omar Mireles Executive VP HSL Properties

Vision for Economic Development

Mireles manages the property portfolio for HSL Properties, a real estate investment firm with a focus on apartment investing, development and management. HSL is the largest apartment-community owner and operator in Southern Arizona and is answering the economic demand for more rental housing with the development of three new luxury, energy-efficient apartment communities. Mireles coleads the Business Environment Committee and serves on the board of directors of Arizona Multihousing Association, Salpointe Catholic High School, Tu Nidito Children and Family Services, Tucson Airport Authority and Tucson Conquistadores.

Infrastructure is fundamental to the region’s ability to preserve, expand and attract businesses of all types and the jobs they represent, said Minano, who leads the Infrastructure Committee. Infrastructure is foundational to economic prosperity for future generations, and with Tucson’s high tech and competitive international marketplace, delivery of raw materials and speed to market of finished products is a deciding factor in determining where businesses expand, he added. 2014 Industry Outlook

Minano said that the federal government and confidence in government will determine if we can expect something other than a snail’s pace of growth in the near future.

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Farhad Moghimi Executive Director Pima Association of Governments/Regional Transportation Authority Vision for Economic Development

Moghimi sees community leadership and cooperation as key components in helping to drive the region and the Sun Corridor toward its fullest economic capacity. He believes that supporting efforts to hear and explore new ideas, expand local industries and encourage more local startup businesses will influence community pride and an improved standard of living. The community must strive to improve education and focus on generating better paying jobs, he said. 2014 Industry Outlook

Pima Association of Governments has a full plate for the future, particularly with the 20-year, $2.1 billion regional transportation plan. Moghimi said a solid transportation infrastructure goes hand-inhand with a strong economy.

Tony Penn President & CEO United Way of Tucson and Southern Arizona Vision for Economic Development

One of the most important objectives of the Economic Blueprint for Penn is the pursuit of excellence in educational systems that will enhance our ability to support growth and innovation in existing companies and to attract new businesses. He feels privileged to serve as an Education liaison involved with educational issues that prepare the region’s workforce for the jobs of today and tomorrow. This requires an all-inclusive effort between educational systems, government and businesses sharing the responsibility for workforce development. 2014 Industry Outlook

Penn said the outlook for United Way of Tucson and Southern Arizona is optimistic, as it continues to serve as the backbone organization in the effort to create large-scale positive social change.

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Virgil Renzulli VP, Public Affairs Arizona State University

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Walter Richter Administrator, Corporate Public Affairs, Southern Arizona Division Southwest Gas

Jonathan Rothschild Mayor City of Tucson

Keri Silvyn Partner Lazarus, Silvyn & Bangs Vision for Economic Development

TREO’s Talent Committee, on which Renzulli serves, plays an integral part in Arizona’s economic growth, he said, because the need for highly trained and skilled workers will increase at a time when employers are experiencing a labor shortage. He said the committee can help identify what the business community needs from post-secondary education and vice versa so that goals are met for both.

Vision for Economic Development

Vision for Economic Development

2014 Industry Outlook

Now recognized as the bridge to our renewable energy future, clean-burning natural gas is consistently cited as a key reason for the recent drop in greenhouse gas emissions. Richter is noticing a rising number of fleet vehicles using natural gas and expects that to continue in 2014 and beyond.

Rothschild said improving transportation infrastructure – which includes addressing bottlenecks at the border and Interstate 19, freight and passenger rail, transit, bikeways and walkways – is important because it helps people get to work, adds to our quality of life and is a factor in economic development. Rothschild, who serves on the Regional Economic Development and Infrastructure committees, also sees growing technologies and startups as priorities for our region.

Serving on TREO’s Business Environment Committee allows Silvyn to take an active role in the region’s economic development, which includes portraying a business-friendly perception to the rest of the world. As a longtime proponent of Tucson, she’s able to learn from the past successes while continuing to see future opportunities. She said the backbone of success is a strong, vibrant and diverse business community that welcomes all types of jobs, from entrepreneurs to large corporations.

2014 Industry Outlook

2014 Industry Outlook

The outlook for Tucson is better than it’s been for some time, Rothschild said. Downtown is thriving again, there’s renewed energy and hope and the city is coming together more as a community around common goals. He reports that Tucson’s business incentives are having the intended results and sparking downtown development.

As a land-use specialist, Silvyn sees a positive outlook for the next two years due to the improving national economy and projected growth in Arizona. She predicted an increasing demand for expertise in this area and an ability to bring projects to successful completion.

Vision for Economic Development

The forecast for the state’s university system is good, according to Renzulli. Enrollments are increasing, student quality is improving and the research enterprise ranks among the best in the country. The two problems that continue to present a challenge are scarce resources and the need to strengthen the PreK-12 pipeline.

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Improving our region’s competitiveness is a goal for Southwest Gas and Richter, who contributes his time to TREO’s Business Environment Committee. Creating a business-friendly atmosphere in Southern Arizona is essential, Richter said, for existing businesses to thrive and expand while new companies are attracted to the area. 2014 Industry Outlook

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David Smallhouse Managing Director Miramar Ventures Vision for Economic Development

Innovation is at the core of creating a vibrant economy in Southern Arizona and it’s the engine that keeps an economy competitive for all business ventures, according to Smallhouse, who serves as an Innovation liaison. He said all sectors must constantly strive to improve if they are to prosper, and complacency is the enemy of prosperity, as competition will sooner or later drive margins down. A culture of innovation must be a priority if we are to grow our economy. 2014 Industry Outlook

Smallhouse sees the slow growth of the Gross Domestic Product contributing to the current trend of decreased risk taking by financial institutions, businesses and investors. Recent IPO activity in select technology sectors, however, may be the beginning of a new era of liquidity.

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Teri Lucie Thompson Senior VP for University Relations & Chief Marketing Officer The University of Arizona

Matthew Wandoloski VP, Corporate Strategy and Analytics Blue Cross Blue Shield of Arizona

2014 Industry Outlook

Vision for Economic Development

From a university viewpoint, Thompson continues to witness higher earnings and lower unemployment rates among college graduates, making higher education a valuable long-term investment. Unfortunately, lower federal research funding, a slowdown in household income and more student debt are affecting opportunities in higher learning. On the positive side, The University of Arizona is positioned to capitalize on its research strengths, attract well-qualified students, deliver on its land grant mission and partner with its sister institutions, businesses and government.

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Development and growth of Tucson and the Sun Corridor are Wandoloski’s passions, offering future graduates from Arizona universities and colleges more opportunity to remain in the state. These goals complement his professional philosophy of improving the lives of residents both in Southern Arizona and around the state. Wandoloski serves on TREO’s Healthcare Committee. 2014 Industry Outlook

The longevity of Blue Cross Blue Shield of Arizona – in business since 1939 – demonstrates how health insurance in the state has kept pace with the growth of its population.

Raymond L. Woosley President AZCERT Vision for Economic Development

Serving on TREO’s Healthcare Committee is important to Woosley as it addresses how the community will be affected by current healthcare changes. His company has similar goals, as well. AZCERT focuses on safe medication use and is founded on the belief that personalized prevention of illness will be a cost-effective alternative to the nation’s current focus on illness care. 2014 Industry Outlook

Woosley’s forecast for healthcare is that its availability will likely increase, but the quality of care will depend on whether the community is prepared to deliver the most cost-effective and scientifically-based medicine. AZCERT is forming healthcare collaborations to define the path to optimal physical and economic health for the people of Southern Arizona.

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Bruce Wright Associate VP Tech Parks Arizona The University of Arizona Vision for Economic Development

The technology sector is leading the country out of the recession, but for Tucson to take part in this economic growth, we must aggressively promote development in key sectors, said Wright, who serves on TREO’s Infrastructure Committee. These include aerospace & defense, renewable energy, mining and the biosciences. 2014 Industry Outlook

Wright expects modest growth among the companies located at the UA Science and Technology Park. He said the region has a competitive advantage in attracting others – in part due to our location in the Sun Corridor and the proposed construction of Interstate 11. Also key to the region’s success is the development of a corridor connecting Raytheon Missile Systems and Tucson International Airport to UA Tech Park.

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Steven G. Zylstra President & CEO Arizona Technology Council 2014 Industry Outlook

In today’s environment, nothing is more critical to economic development success than having a qualified workforce to meet the challenges of the 21st century. Serving on the TREO Talent Committee gives Zylstra the opportunity to weigh in and represent the employer perspective on behalf of technology concerns. 2014 Industry Outlook

Zylstra believes the technology sector will continue its growth trajectory in 2014, and while certain subsectors may fluctuate, the industry will continue to gain steam throughout the year.

OF COUNSEL Lawrence M. Hecker Partner Hecker & Muehlebach Vision for Economic Development

An economy based on innovation and entrepreneurship is critical in the creation, attraction and retention of sustainable, well-paying jobs for all sectors of our community, Hecker said. The region is fortunate to have The University of Arizona generating technologies that have tremendous commercial potential and growing industry segments that can take these technologies to market. This includes UA’s Tech Launch Arizona, which is hard at work identifying and supporting the commercialization process.

TREO offers a comprehensive approach of programs and services to facilitate the creation of high-wage jobs, through the attraction of new primary companies, the retention/ expansion of existing primary companies and increased business creation/entrepreneurship strength within the region. For more information, visit www.treoaz.org.

2014 Industry Outlook

With an increased level of business startups and growth in industries built on innovation and technology, Hecker sees no reason why this improvement shouldn’t continue – and possibly accelerate – into 2014.

BizTucson Magazine is published quarterly by Rosenberg Media, LLC.,Tucson, AZ © 2014 All rights reserved. Reproduction in whole or in part without written permission is prohibited. Opinions expressed in columns or articles do not necessarily reflect the views of the publisher. For information regarding advertising or subscriptions, please contact Steve Rosenberg at 520-907-1012 or, steve@BizTucson.com

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By Mary Minor Davis Creating an international trade corridor in Southern Arizona would bring economic prosperity and relevancy to the region. At the heart of that corridor is the proposed Interstate 11. The feasibility of I-11 – or the Intermountain West Corridor – is being studied by transportation departments in Arizona and Nevada. The vision for this interstate connector began in the 1990s, but has taken on more urgent prominence as the study for the alignment gets underway and business leaders call for increased focus on infrastructure to accelerate the economic recovery. The proposal, which links Phoenix and Las Vegas, currently does not include Southern Arizona. The business community – led by TREO, with involvement by the Southern Arizona Leadership Council, Tucson Metro Chamber and others – made a strong business case to the state Transportation Board to connect the I-11 not just between Phoenix and Las Vegas, but to extend it to Mexico and Canada, passing through the Tucson region. The issue is a critical component in TREO’s Blueprint Update. “Infrastructure is fundamental to future planning,” said Dennis Minano, a TREO board member who chairs the Infrastructure Committee for the Blue114 BizTucson

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print Update. “It’s the hard wiring that a community needs to be successful,” said Minano, who is vice chair at the Sonoran Institute. While the Sun Corridor represents an aggregate of population and business activity that could establish itself as an economic juggernaut in future years, infrastructure demands are at the center of Southern Arizona’s opportunities to provide the underlying support for economic development.

People don’t make the connection between infrastructure and economic growth.

– Chuck Huckelberry Pima County Administrator

“If we get bypassed by I-11, we’re done,” said Joe Snell, president and CEO of TREO, who was recently named to

the board of directors of the Interstate 11 Coalition. “We’re right on the fringe with limited highway infrastructure,” in terms of competing effectively. Pima County Administrator Chuck Huckelberry agreed. “We have an infrastructure deficit to meet the population and economic demand that we are anticipating. Historically, people don’t make the connection between infrastructure and economic growth.” Huckelberry – who sits on the TREO Infrastructure Committee – says it will be necessary to emphasize I-11 as a trade corridor vital to tying in our other assets. “We need to convince people that it is truly a trade route, not a commuter route,” he explained. “This is not going to be a route that brings local buyers to businesses next to the interstate. It’s designed to bring about competitive trade advantage in the national distribution of goods and products.” Huckelberry said those assets include two major highways, rail to Mexico, the Port of Tucson, the Tucson International Airport and surface transportation. “When you put these together, you start to see that we can become a real logistics center for the western region,” he said.

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BizPROGRESS TREO Projects Since March 2013 Hanergy Holding Group Sector: Alternative Energy www.hanergy.com/en/

Reginald Bennett International Industry Sector: Aerospace & Defense www.rbi-inc.com

Beijing-based Hanergy Holding Group – said to be the world’s largest thin-film photovoltaic company – has completed the equity acquisition of Global Solar Energy. Hanergy will resume Global Solar’s operations in Tucson. The company plans to hire 183 employees and invest $4.9 million, with a total economic impact of $260 million.

RBI is a certified manufacturer of retro-reflective runway, taxiway and heliport lighting. This environmentally friendly technology is used by military, government, civil and commercial operators worldwide. RBI, which currently employs seven people, is relocating operations from Ontario, Canada.

Ascent Aviation Sector: Aerospace & Defense www.ascentmro.com Ascent Aviation is a premiere narrow body aviation maintenance and storage center located at the Tucson International Airport. The company is expected to hire an additional 100 employees and the capital investment is estimated at $4 million. Total economic impact is estimated at $96 million. Universal Bio Mining Sector: Bioscience www.universalbiomining.com Universal Bio Mining is applying synthetic biology to the mining industry, improving mineral extraction processes and remediation processes. The company relocated from California and is partnering with the Arizona Center for Innovation at The University of Arizona Science and Technology Park. The company plans to hire 40 employees with a capital investment of $500,000. The total economic impact is estimated at $39 million.

Mister Car Wash Industry: Other www.mistercarwash.com Mister Car Wash is the largest full-service car wash and lube chain in the United States. The company is headquartered in Tucson and has nearly 4,000 employees. It plans to add 50 employees to the HQ operations. New York Life Insurance Company Industry: Insurance www.newyorklife.com New York Life Insurance Company is the largest mutual life insurance company in the United States, and one of the largest life insurers in the world. The company announced plans in May 2013 to hire 60 new employees in the region. CaptionCall, a Sorenson Company Industry: Call Center www.captioncall.com CaptionCall offers telephone service for customers with hearing loss. In March 2013, the company announced plans to hire 270 employees in Tucson within the first year.

TREO PERFORMANCE Since Inception 2005 to 2013 Total New Jobs Supported* Capital Investment Total Economic Impact Successful Projects *Direct and Indirect

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Recent Fiscal Year FY 2012 – 13 19,916 $799 million $3.9 billion 69 companies

Total New Jobs Supported* Capital Investment Total Economic Impact Successful Projects

2,791 $44.4 million $1.58 billion 8 companies

*Direct and Indirect Source: TREO Winter 2014

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TREO INVESTORS* El Rio Community Health Center Freeport-McMoRan Copper & Gold GEICO HDR Hecker & Muehlebach Hilton Tucson El Conquistador Golf & Tennis Resort HSL Properties Jim Click Automotive Team Lazarus, Silvyn & Bangs Miramar Ventures Nova Home Loans Peto & Company CPAs Pima Association of Governments/ Regional Transportation Authority Pima Community College Pima County Randstad Staffing and Recruiting Raytheon Missile Systems Science Foundation Arizona SOLON Corporation Sonoran Institute Southwest Gas Corporation

Suddath Relocation Systems Sundt Companies The Northern Trust Company The Temp Connection Tucson Association of Realtors TMC Healthcare Tucson New Car Dealers Association Tech Parks Arizona United Way of Tucson and Southern Arizona The University of Arizona The University of Arizona Health Network University of Phoenix UNS Energy, Tucson Electric Power & UniSource Energy Services Vantage West Credit Union Ventana Medical Systems, a member of the Roche Group Walton International Group (USA) Wells Fargo Bank Wist Office Products *As of December 2013

TREO staff from left â&#x20AC;&#x201C; Laura Shaw, senior VP, marketing and communications; David Welsh, executive VP; Cathy Casper, senior VP, administrative services; Michael Guymon, VP, regional development; Jerah Yassine, office manager; Daniela Gallagher, economic development director and Joe Snell, TREO president & CEO 120 BizTucson

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Photo: BalfourWalker.com

Accelerate Diagnostics Alliance Bank of Arizona Arizona Commerce Authority Arizona State University Bank of America BBVA Compass Bank BeachFleischman BizTucson Blue Cross Blue Shield of Arizona Bluespan Networks Bourn Partners Carondelet Health Network CBRE CenturyLink Chase CopperPoint Mutual Insurance Company COX Communications Cushman & Wakefield | PICOR Commercial Real Estate Services D.L. Withers Construction Diamond Ventures DPR Construction


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