Economic & Business News Spring 2009
Baseball Spring Training big Business in Phoenix Spring training is underway in Phoenix with now twelve professional teams playing nearly daily exhibition games from late February through early April. Three teams moved their training programs to stadiums in the Phoenix area in 2009, the Los Angeles Dodgers, the Chicago White Sox and the Cleveland Indians. The Dodgers and White Sox share a brand-new stadium in western Phoenix, but the stadium is surrounded by 12 practice fields (illustrated below), including one that is a replica of the Dodger’s home field and one that replicates the home field of the White Sox. With the new teams, the number of people buying tickets to the exhibition games will probably exceed the 1.3 million recorded in 2007 when a careful survey showed that 61 percent of the fans were from out of state and spent about $310 million in Arizona. For more information, go to CactusLeague.com.	Phoenix Convention Center Expansion Completed The new North Building of the Phoenix Convention Center opened for business in January. The gorgeous, four-level building contains 502,500 square feet of exhibition halls, 86,000 s.f. of meeting rooms and a 45,600 s.f. ballroom. The three buildings of the Convention Center, including the new West Building and the renovated South Building, contain 900,000 s.f. of exhibition and meeting space putting the Phoenix Convention Center among the 20 largest in the country. The new light rail line has a stop between the North and South buildings of the Convention Center and provides a quick connection to the Phoenix Sky Harbor Airport, about a 15 minute ride. Already more than 70 conventions are signed up for the Convention Center in 2009 with an estimated attendance of over 290,000. Associations like the setting for meetings because the Symphony Hall, Herberger Theater, Chase Field baseball park and U.S. Airways basketball arena are literally next door.
Freeway Expansions Booming in Phoenix Four major construction projects to add extra lanes and interchanges to the local freeways are about to get started. These projects are funded by a half-cent sales tax that the residents of Maricopa County voted for in 2004. The revenues collected from that sales tax are supporting construction of freeways, arterial streets, regional bus service and the light rail extension. The five major freeway construction projects currently underway should be completed by the end of 2009. The half-cent sales tax will expire in 2025 (unless renewed by the voters), but by that time the Phoenix freeways will all have at least three lanes in each direction, including HOV lanes, right up to the edge of the urban area. For details, see mag.maricopa.gov	NBA All-Star Events Inject $35 million into Phoenix Phoenix hosted the National Basketball Association All-Star Game on February 15 at its downtown arena, the US Airways Center. Events leading up to the game brought huge crowds to downtown. About 120,000 people attended the NBA Jam Session, the fan amusement park that was staged in the Phoenix Convention Center. Another 40,000 people attended a free block party held across the street from the arena. The number of people boarding the light rail train that passes right by the arena jumped by 30,000 per day for the days of the NBA events. Two hundred countries broadcast the event, giving viewers a look at downtown Phoenix. Estimates of visitor spending, plus the money spent by the NBA and the TNT cable network came to at least $35 million.
City of Phoenix Earns Rebate for Energy Savings Arizona Public Service Company (APS), the largest electric utility in the state, gave the city of Phoenix a check for $825,000 for implementing several energy saving projects during 2008. The most visible one was the installation of solar panels on the Phoenix Convention Center. But other installations of more efficient motors on pumps and air conditioners at the airport, a wastewater treatment plant and the Phoenix Art Museum also contributed. The new installations are projected to save the city $16.7 million in electricity costs over the life of the machinery. The electricity saved each year will be enough to power 19,500 Arizona homes. For information about the APS rebate program, go to APS-SolutionsForBusiness.com	Filming Industry Impact in Phoenix Exceeds $33 M During 2008 the city of Phoenix Film Office assisted with 192 “shootings” that had a total impact of $33 million. This assistance was with all those filming events in Phoenix that required the use of public space, from streets to parks to court houses. These filming projects hired more than 2,000 people locally. Almost a third of the projects were for commercials and another third for still photography. The rest of the projects spanned the gamut of TV reality shows to feature films. The size of the economic impact of the film industry is much larger than $33 million however, because the Phoenix Film Office does not have information about the many filming projects done at studios or on private land. (phoenix.gov/FILMPHX)
Huge Bottling Plant Converted to Data Center In January, i/o Data Centers announced that it had signed a 20 year lease for a nearly new, 530,000 square-foot industrial building in Phoenix. The firm is now installing data storage systems and its company headquarters there. The handsome building was completed in 2005 as a state-of-the-art bottling plant by a company that then went bankrupt. What attracted i/o Data Centers to this building was the fact the proximity of one of the largest joint fiber trenches in the country and a dedicated electric substation from the local utility on its 31-acre campus. The company stores and manages data for about 160 companies, including hospitals, law firms and financial corporations. Now it will be able to take data-storage contracts from many more companies. Go to iodatacenters.com for more information.	Electricity Utility Planning $18 Billion Expansion APS, the largest utility in Arizona, announced plans to invest $18 billion over the next 20 years to expand its generating capacity by 50 percent. APS, one of two large utilities serving Phoenix, currently has 6,078 megawatts of generating capacity with a mix of coal, gas and nuclear plants. But APS does not plan to build coal plants, instead counting on renewable sources – primarily solar – for 45 percent of is new generating capacity. The utility has set a goal of holding carbon emissions to its current level through 2025. To do so, APS is keeping open the option of building a new nuclear plant after 2020. To meet its target for solar generation, APS will have to find partners to build at least five more solar plants at the 280 MW size of the Solana Power Plant being designed for a location near Phoenix.
Intel Planning $3 Billion Upgrade in Arizona Intel announced that it plans to spend $3 billion to upgrade two of its semiconductor fabricating plants in the Phoenix area during 2009. Both plants will produce its new 32 nanometer-size chips, a number that refers to the size of the circuitry on the chip. The smaller chips mean that Intel can make more processors from a single silicon wafer, which translates into lower production costs per chip. Users will benefit from the smaller chips because they run faster without using more energy. The construction of the new plants will employ about 1,500 workers this year, but the upgrade should be finished by 2010. During the upgrade, some of the Intel employees will transfer to Oregon for training, before returning to Arizona. Intel has about 10,000 employees in Arizona.	Bioscience Accelerator Launched in Phoenix A very special type of venture capital fund just opened in Phoenix. Catapult Bio will provide capital to help scientists take their discoveries from the laboratory to the market, focusing on drug development, diagnostic tools and medical devices. Initial funding for Catapult Bio, a non-profit company, comes from Abraxis BioScience whose CEO has pledged a $14 million donation over five years. Abraxis established a presence in Phoenix in 2007 when it bought a laboratory and manufacturing facility in order to make its cancer-fighting drug. Catapult Bio plans to invest between $50 and $300 thousand per project, taking minority equity in the companies it will help to create. The money will go only to scientists at universities and non-profit research institutes, not to biotech companies.
Company Highlights	Upcoming Trade Shows
USAA Adding 450 Jobs in Phoenix The insurance / banking company USAA is planning to increase employment at its north Phoenix campus from about 2,800 to nearly 3,300 this year. Most of the new positions will be filled by USAA employees relocating from a Sacramento office being closed by USAA in a money-saving consolidation. However, the company plans to hire some people in Phoenix with banking and financial-advisory experience. Others may be needed for customer service and resolving insurance claims, depending on how many California employees decide to relocate.	American Inst. of Steel Construction, April 1 - 3 About 3,000 structural engineers, steel fabricators and builders are expected to attend the annual North American Steel Construction Conference at the Phoenix Convention Center this year. The conference will include more than 80 technical sessions with practical information about steel construction. In addition, the Steel Conference offers an extensive trade show, featuring products and services ranging from fabrication machinery, galvanizing, and connection products to detailing and engineering software. For details, visit aisc.org.
Neptune Orient Lines Moving to Phoenix The world’s seventh largest shipping company, based in Singapore, announced that it would move its U.S. headquarters from Oakland, California to the Phoenix area. Neptune has 300 to 400 employees in the Oakland area, and many will relocate to Phoenix. The Director of Corporate Communications explained that Neptune looked at several cities and chose the Phoenix area because it offers lower operational costs, a good quality of life, including affordable housing and an international airport. The U.S. office manages the operations of 130 ships and thousands of containers.	Society of American Surgeons, April 22 - 25 More than 2,200 doctors and surgical technicians are expected to attend the annual meeting of the Society of American Gastrointestinal and Endoscopic Surgeons (SAGES) which will be held at the Phoenix Convention Center. The conference features “hands on” instruction with endoscopic tools as well as dozens of lectures on the newest types of minimally invasive surgery. More than 100 companies have reserved booths in the exhibit hall. The International Pediatric Endosurgery Group conference will be running concurrently in the Convention Center. Visit sages.org for more information.
Avnet Acquires IT Distributor in Turkey In February, Avnet, one of the Fortune 500 companies headquartered in Phoenix, completed its purchase of 50.1 percent of Ankora Technology and Industry Corporation, one of the largest IT distributors in Turkey. Ankora distributes servers, storage devices, workstations and computer components to around 3,000 resellers all over Turkey. Avnet is one of the largest distributors in the world of electronic components, computer products and embedded technology with customers in more than 70 countries. Avnet’s revenue came to almost $18 billion for its fiscal year ending last June.	National Rifle Association, May 14 - 17 The newly expanded Phoenix Convention Center will host its largest convention in May when about 50,000 members of the National Rifle Association are expected to participate in the annual NRA conference. The program includes seminars, workshops for clubs and associations, and receptions in the exhibit hall. More than 450 companies have already signed up for booths that will be occupying the main exhibit hall with more than 300,000 square feet of continuous space. Past surveys have shown that 57 percent of people attending the NRA conventions travel more than 200 miles. (nra.org)
Responses are welcome. Please send questions and suggestions about this quarterly newsletter, or requests to be removed from the mailing list, to Michael Shelton at business@phoenix.gov.