Economic & Business News Fall 2007
Planning for the Phoenix “Megapolis” The Arizona Department of Transportation announced that it is already looking at possible routes for a new freeway that would run east-west traffic around both Phoenix and Tucson. The proposed freeway would cut off of Interstate 10 on the west side of Phoenix and reconnect on the east side of Tucson. Currently, I-10 is the only freeway connecting those two cities whose downtown areas are about 120 miles apart. But the suburbs of Phoenix already stretch 60 miles south toward Tucson and the suburbs of Tucson reach 40 miles to the north. State planners expect the gap between the cities to fill over the next decade and the population of the two metro areas, now about 5 million, to double by 2040. The U.S. Census Bureau designation of this twin city as a “megapolis” may help Arizona get more federal funds for this $4 billion project.	High-Rise Apartments Slated for Downtown Phoenix The Phoenix City Council recently approved a second high-rise apartment complex for the downtown area. The Jet complex will include 20,000 square feet for shops, 120,000 square feet for offices and 675 apartments configured in two towers. One tower will have 23 floors and the other tower will rise 36 floors, 360 feet high. The other apartment building, Alta Phoenix, will include 10,000 square feet of retail, a parking garage and 326 apartments in an eight-story tower. The Alta Phoenix is already under construction and its modernistic, loft-style apartment will be ready for occupancy by summer of 2008. The city of Phoenix has promoted these projects in order to assure an adequate supply of affordable rental properties in the downtown area. In order to keep the rental prices down, the city will buy the land under the buildings, once they are completed, and lease the land back to the developers at low rates.
Airport to be called Phoenix-Mesa Gateway The authority that runs the Williams Gateway Airport is considering a name change to make it easier for the public to identify the location of the airport. Almost certainly the authority will adopt the name “Phoenix-Mesa Gateway Airport” after considering public comments. Some veterans who trained at the former Williams Air Force Base are objecting to the name change. After 60 years as a military base, it became a civilian airport in 1993. Then in 2006 the city of Phoenix bought a share of that airport, located on the eastern edge of the metropolitan area in the city of Mesa, with the intention of developing it as a reliever airport, particularly for cargo. The airport has three parallel runways, two of them are more than 10,000 feet long.	US Airways to Buy 92 New Planes US Airways, now headquartered near the Phoenix airport following the acquisition by America West Airline, announced that it plans to buy 92 passenger jets from Airbus. The new planes will replace older aircraft, specifically B 767 planes, keeping the US Airways fleet at about 360 aircraft. Currently, US Airways has 205 Airbus planes and 148 Boeing aircraft, the result of the merger of the two airlines. Airbus will deliver ten 330-200 planes starting in 2009 followed by 60 A320 planes between 2010 and 2013. An additional 22 Airbus A350 aircraft will be delivered in 2013. US Airways hopes to use some of these A350 planes for a route to China that it is bidding on now. The airline did not reveal the price of the contract for the 92 planes, but the list price would total between $10 and 11 billion.
Amazon.com Opening Distribution Center Amazon.com, Inc. announced that it will open a massive distribution center on the western side of Phoenix. It is leasing a brand-new, 600,000 square-foot-warehouse near Interstate 10 which leads to Los Angeles. Even though the Amazon.com facility will be highly automated with sophisticated equipment to catalogue, store, retrieve and pack thousands of books and CDs, the company plans to hire about 950 employees. During the busy season the number of employee will expand to around 1,400. The good news for Phoenix residents is that they will now get same day delivery for most products they order from Amazon.	Operating Costs Lower in Phoenix Phoenix ranked as one of the least expensive U.S. cities for operating a large, administrative corporate office. The Boyd Company, a location-consulting firm in New Jersey, recently completed a detailed study about the annual costs of operating a hypothetical 55,000 square foot office with 350 employees in 30 major U.S. cities. New York City was the most expensive at $28 million, followed by San Francisco at $26.7 million. Phoenix ranked number 28 at just $22.4 million. The study included labor costs, property and sales taxes, facility amortization, corporate travel and utilities.
Phoenix School of Law Accredited by ABA In June, the Phoenix School of Law gained provisional accreditation from the American Bar Association. This is good news for Arizona’s only private law school, because this means its students will be allowed to take the Bar exam upon graduation. The school opened in January 2005 and currently has 128 students. The school will be eligible for full accreditation in three years following further evaluation. The dean of Phoenix School of Law predicts that enrollment will climb to 800 students within eight years. The school offers part-time and evening degree programs that are geared to practical training for lawyers.	Upgrades Planned for Deer Valley Airport The Phoenix Aviation Department is planning about $130 million of improvements to the city-owned Deer Valley airport. Deer Valley is one of the busiest general aviation airports in the U.S. with more than 400,000 takeoffs and landings in 2006. City officials are expecting that number to rise to 650,000 by 2025. In anticipation, the City is planning to extend one runway from 4,500 feet in length to 6,080 feet and to widen it from 75 to 100 feet. Corporate jets will be restricted to the southern runway while the smaller, private airplanes will be restricted to the northern runway. The new airport layout will have to be approved by the Federal Aviation Authority before construction begins.
Phoenix is the Safest Big City for Drivers Allstate Insurance Company released the results of its annual survey on accident rates in 200 U.S. cities. For the third year in a row, Phoenix ranked as the safest city with more than one million people. The average Phoenix driver will have an accident every 9.8 years, according to the Allstate study. In the overall list, Phoenix ranked as 78^th safest city, well ahead of New York City at 169, Chicago at 183 and Los Angeles at 185. The safer driving record of Phoenix can be attributed to the newer, wider streets, generally clear skies, dry weather and the near absence of snow. For those same reasons, most of the suburbs of Phoenix also ranked among the top 100 safest cities.	TGen Finds Genes Related to ALS and Cancer The Phoenix-based, non-profit Translational Genomics Research Institute (TGen) announced that it had identified slightly over 50 genes with consistent aberrations in the blood of people suffering from Amyotrophic Lateral Sclerosis, commonly called Lou Gehrig’s disease. Now it should be easier to test for the disease and to find cures. TGen identified these aberrations after screening the genomes of 1,250 people with ALS and 2,000 people without ALS. In a separate research project at TGen, undertaken with Eli Lilly and Company, scientists from the two companies discovered a recurring mutation of a particular gene, the AKT1 gene, in people with breast, colorectal and ovarian cancers. This is an important clue for finding a cure to cancer.
Company Highlights	Upcoming Trade Shows
First Solar, Inc. Expanding Production Phoenix-based First Solar, Inc. broke ground on a new plant to manufacture photovoltaic cells in Malaysia in August. The company also has plants in Ohio and in Germany. Its shares have increased sharply from the $20 range when it went public in November 2006 to around $100 per share in mid-2007. Sales revenue totaled $144 million for the first half of 2007 with most of the sales in Germany. First Solar, Inc. manufactures solar modules with an advanced thin film semiconductor process that significantly lowers solar electricity costs.	Assoc. of Neuromuscular Medicine, Oct 17 - 20 The American Association of Neuromuscular and Electrodiagnostic Medicine (AANEM) will hold its 52^nd annual meeting at the JW Marriott Desert Ridge Resort & Spa in Phoenix in October. About 1,000 neurologists, physical medicine and rehabilitation physicians, and other specialists who treat patients with muscle and nerve disorders are expected to attend the conference. There is space for about 50 exhibitors. The AANEM meeting is the premier event for physicians to learn about the latest treatments and research related to neurological and musculoskeletal pain. Visit aanem.org for more information.
Avnet to Acquire European Computer Vendor Avnet Inc., a Fortune 500 firm based in Phoenix, announced plans to purchase the European Enterprise Infrastructure Division of Magirus Group, an international IT company. The transaction should close in October, after regulatory approval. The acquisition should greatly expand Avnet’s sales of HP and IBM servers, storage systems software and services in seven European nations and Dubai.	National Assoc. of EMS Physicians, Jan 10 - 12 The National Association of EMS Physicians is planning its next annual meeting in January at the Pointe Hilton Squaw Peak Resort in Phoenix. About 500 medical specialists are expected for the conference and trade show, mostly EMS doctors. There is room for some exhibitors. The conference will provide continuing education opportunities to providers of out-of-hospital emergency medical services. For more information, visit naemsp.org.
Mayo Clinic Hospital Expanding in Phoenix The Mayo Clinic Hospital in north Phoenix is expanding its medical services and its physical plant. The 208 bed hospital opened a 175,000 square-foot-specialty clinic last October and now it is adding rooms for 36 more beds. In addition, Mayo is shifting surgical doctors from its research clinic in Scottsdale to the hospital in Phoenix. The hospital specializes in cancer care, solid-organ transplants, cardiovascular programs and neuroscience.	Sports Turf Managers Association, Jan 14 - 20 The annual conference and trade show of the Sports Turf Managers Association will be held at the Phoenix Convention Center in January 2008. The Association is projecting an attendance of more than 900 men and women who manage sports fields and facilities at schools, parks and professional stadiums. Over 150 companies are expected to exhibit their products and services. The conference will feature the newest technologies for maintaining natural turf and synthetic surfaces to safe and pleasing standards. Visit stma.org for more information.
Responses are welcome. Please send questions and suggestions about this quarterly newsletter, or requests to be removed from the mailing list, to Paul Katsenes at business@phoenix.gov.