Phoenix Economic Director: City Moving From Third Tier To Second Tier

Published: Tuesday, November 21, 2017 - 4:28pm
Updated: Tuesday, November 21, 2017 - 4:39pm
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STEVE GOLDSTEIN: When Phoenix hired Christine Mackay three years ago to lead its economic development department she received specific marching orders. They included helping to create and retain high-quality jobs; fostering an environment for entrepreneurs to grow; and helping businesses find qualified talent. Mackay recently updated council members on the strategic plan and Christina you were there. What did she have to say?

CHRISTINA ESTES: Mackay is definitely one of the city’s biggest cheerleaders. In her view, Phoenix is always number one, but in this case she’s pretty happy with second place.

CHRISTINE MACKAY: “In the past, Phoenix has long been considered a third-tier market. We weren’t considered for high tech jobs, we weren’t considered for corporate headquarter jobs. We were considered for third tier manufacturing, distribution, call centers. Things that we’d been known for for years. We’ve moved up into a second tier and are quickly moving into a first-tier market.”  

ESTES: Before we hear more about being a second-tier market, it’s fair to point out Phoenix is still known for distribution centers — Amazon, Target, and others have large warehouses in Phoenix and many of those jobs pay less than $15 an hour. And, some might argue Phoenix is still known for call centers — that today they’re just called customer service centers. Big companies like USAA, Discover and American Express field phone calls and emails in Phoenix, but their operations are considered more professional and high tech than call centers from years ago. Let’s go back to Mackay as she explains what it means to move from a third-tier to a second-tier city.

MACKAY: “When companies are choosing Phoenix they’re choosing us in that same category they’re choosing San Francisco, Boston, New York, Chicago, Denver, Austin. They’re choosing very vibrant, robust markets. We’re no longer competing with the second- and third-tier markets we used to compete against.”

ESTES: A few things to note here: our weather is often a big selling point, especially compared to places like Boston and Chicago. Phoenix also likes to tout its cost of living as being lower than other big cities. And, it usually is. But, how much lower really depends on your source. I did a lot of research for a job series earlier this year and found the U.S. Bureau of Economic Analysis analyzed cost of living across 16 categories — not just housing. The Bureau’s national average was 100. Phoenix came in at 97. So, 3 percent below the national average. It’s also important to keep in mind our wages have been lower than national averages and medians for quite a while. But, incomes are rising and one reason is Phoenix’s focus on high-wage sectors. For example, the city is partnering with ASU and Mayo to create the Arizona Biomedical Corridor just off Loop 101.  

MACKAY: “It will be a leading biosciences area. Mayo continues to grow with their proton therapy facility. We see huge number of patients and research that’s going on in that area and they are locating docs and researchers into the area like nothing I’ve seen before in Arizona. So, it’s a very dynamic area. When you look north of the 101 when you look in other areas, it will in the future be a very strong office market. At ultimate build out my guess is we’ll between 50 and 80,000 jobs in that corridor alone.”  

ESTES: In the next year, Mackay says her department will target employment corridors near Sky Harbor Airport, Metrocenter Mall and Paradise Valley Mall. And, they’ll work to revitalize vacant and rundown strip malls and empty box stores. She says staff is cataloguing all retail centers across the city. They’ll determine vacancies and come up with strategies to help centers that are struggling and bringing down neighborhoods.

MACKAY: “As we’re going out and visiting with some of the center owners there are a number of them that are clear that they’re not going to be retail anymore. They’re never going to be successful retail. Could they be small, entrepreneurial start up spaces reset for the right price? Can they be more community centers, activated as educational institutions?  And, where does it make sense to scrape them? And is there enough in the pot that a private development could come in and buy them that it would make sense to blade them and  bring back high density residential or office uses or educational uses that then further activate the intersection and the area that they’re in. “

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