I want to expand on comments I made to Steve Goldstein's Here and Now on KJZZ Wednesday about Phoenix Mayor Greg Stanton making a trip to Silicon Valley and the Bay Area to recruit businesses.
Foremost, this is a great start, something I've been advocating for more than a decade. The future to diversifying the Phoenix economy lies in California and Asia, not in Dubai. That the trip is so public is a bit puzzling; real success will come from years of quietly cultivating contacts. Phoenix needs to open offices in Southern and Northern California to recruit companies. I was also disheartened that Barry Broome of the Greater Phoenix Economic Council invited himself along. GPEC must please the suburbs at least as much as the city, and given the preference of the leasing boyz for suburbia, the organization is incapable of addressing the city's needs, particularly for jobs and capital investment in the central city.
Now, a reality check. Phoenix is not going to attract headquarters from Silicon Valley. You can't touch a fixer-up cottage in Palo Alto for less than $1.5 million and it doesn't make the economy skip a step. Workers would rather commute from Modesto than move to Chandler. This is the world's foremost technology cluster, and it happened because of all the things Phoenix lacks: World-class universities, trillions of dollars in government investment, an exceptionally high number of college graduates, attracting vast amounts of capital and a large entrepreneurial class focused on anything but real estate. It has a real downtown, in San Francisco. It is diverse and tolerant. There is no Santa Clara County Sheriff Joe. A real cluster is not a couple of semiconductor fabs in the suburbs. Phoenix can no more be "a mini-Silicon Valley" than the downtown Phoenix Public Market, and I love it, can be a mini-Pike Place Market. Cisco is not going to move from the Valley to "the Valley."
Phoenix can attract data centers and even some lower-end software engineering, perhaps as a gateway to something bigger. Spend some time in San Francisco, one of the world's leading biotech clusters. What's happened at the UCSF Mission Bay campus is what should have happened at the downtown Phoenix Biosciences Campus, leveraging the downtown ASU connection. There may be outfits Phoenix could peel away — but for downtown, not for some nonsensical Desert Ridge "biotech hub" or empty land out near Anthem.
The cautionary tale is Google. Remember when Google opened an office in Tempe in the mid-2000s? There was a huge boostergasm, including a full report on the Republic's Viewpoints section when it was a freestanding section. This was it — the breakthrough! But I cautioned at the time that Google was opening these spec offices all over the country, to see what talent and capacity was out there. Metro Phoenix had to prove itself. Google closed.
The target-rich environment is Southern California. The biomedical manufacturing sector there remains ripe for the plucking and is the kind of "blue-collar high tech" work that Phoenix's workforce could do. Logistics connected with the Ports of LA and Long Beach, the largest in the country, is another opportunity. Back-office work from LA helped Phoenix in the 1990s and could again. Plugging into the world-class biotech hub of San Diego, made so especially because of the Connect project with UCSD, is also essential. But this will require an ongoing effort, which is why the city should have economic-development offices in the Golden State (and Shanghai, Singapore, Monterrey, etc).
Goldstein asked what Stanton should be selling. Not weather (we covered that). Not cheap housing. He should be selling the historic districts along the light-rail line, Encanto Park, Arcadia — the lovely and authentic things that make Phoenix genuinely attractive. He should make the point that Phoenix is tolerant and (relatively) diverse. As I am forced to say now when discussing my background, "I'm from Arizona but I'm not crazy."
None of this will work to Phoenix's advantage if relocating or new operations go to the 'burbs or to empty land on the fringes of the city halfway to Prescott (a la the missed opportunity of USAA). The benefits must work two ways, gaining the corporate investment but also filling in the huge swaths of empty land in the Central Corridor and elsewhere along the Metro line (we built it, you bastards). This is the genuine win-win. Exurbia in general is dead. Fewer people want, or will be able, to own tract houses in lookalike suburbia. These stresses will only grow with higher energy prices and environmental damage. The talent you really want already is accustomed to choices in transportation and living arrangements. Young college grads especially don't even want to own cars.
Reality check No. 2: It would be nice if the Legislature were not so anti-everything, especially against cities and providing economic-development tools. Being cheap is no longer Arizona's advantage — that's moved overseas. Got plenty of production housing? So do Vegas and the rest of the Sun Belt, including Dallas, which has the nation's most extensive light-rail network. Most Southern states have sophisticated economic development operations and they are constantly on the hunt. Sunshine and cheap land won't cut it. And the lack of an aggressive congressional delegation is a towering impediment. In Texas, the delegation talks right-wing Krackpot, but it steers as much federal money and federal assets to the state as possible. That's a big reason Texas has succeeded from LBJ to GWB. In Arizona, these Republican mediocrities might as well not exist. In real-world terms, where it comes to bringing the elements that help power an economy and bring high-wage jobs, Arizona is nearly without representation. Finally, no emphasis on building great universities, no ability to compete in the world economy.
Until these things change, Phoenix will face substantial headwinds in building a quality economy.
Still, give Stanton credit. I've argued before that he gets it. I still think he does.