City of the Future Strategically positioned in the Southwest, the Greater Phoenix area is one of 10 U.S. markets projected to experience 85% of the nation’s growth over the next 35 years. Greater Phoenix, which consists of the City of Phoenix, much of the rest of Maricopa County, a large section of Pinal County, and small parts of southern Yavapai County, currently is the 13th largest area in the United States, with an estimated population of four million. The City of Phoenix is the largest state capital in the U.S. in terms of population and is the only state capital with a population of more than one million. With a labor force of over two million people, Greater Phoenix is known as a business and innovation hub with international access for aerospace, high-tech, bioscience, advanced business and sustainable technologies companies. Currently, over 20 major Fortune 500/1000 companies are located in Phoenix, such as Allied Waste, AT&T Inc., Bank of America, Boeing, Google, Morgan Stanley, and Wells Fargo. Honeywell’s Aerospace division is headquartered in Phoenix, and the valley hosts many of its avionics and mechanical facilities. Intel has one of its largest sites in the city, employing about 10,000 employees. Businesses are easily connected to the region, nation and the world with two major airports—Sky Harbor International Airport and Williams Gateway Airport—and a new light-rail system being launched in December 2008. Hot Spot for Solar With an average of 321 days of sun, a high semiconductor workforce concentration, and a lower cost of doing business compared to California, Greater Phoenix is emerging as a leader in the solar industry. Greater Phoenix is now the world’s fourth largest solar market and is home to companies such as American Solar Electric, Green Ideas, Inc., ETA Engineering Inc., Kyocera Solar, Inc., and First Solar. In June 2008, California-based SolarCity, one of the fastest growing solar power companies in the country, announced it is expanding its operations in Phoenix. The company is transferring regional operations to a new 8,200-square-foot facility, which it plans to use as a base to install solar electricity systems for area businesses and residents. “SolarCity is an innovative company, and its unique SolarLease program will promote and accelerate the adoption of solar across the region,” says Greater Phoenix Economic Council (GPEC) President and CEO Barry Broome. GPEC, comprised of 18 communities, Maricopa County, and more than 140 private-sector companies, serves as a catalyst to strengthen the region’s economic base and promote Arizona’s sustainable industry. Its efforts are helping create high-wage jobs, […]
Kathleen Ellis, senior Vice President of Chubb & Son, also is the firm’s Multinational Risk Group manager of Global Accounts. BF: Why is it riskier for small businesses, compared to large companies, to invest or relocate overseas? KE: You need resources to manage risk. Larger companies often have the people and capital they need to navigate the global patchwork of different laws and languages, currencies and styles of conducting business and create corporate risk management standards throughout the world. Small and midsize companies that do business overseas don’t have those luxuries. But if they’re lucky, they’ll have good business partners to help them create standards that will help reduce foreign property and liability losses and injuries to employees. Additionally, smaller companies have less capital, and what they do have often is tied up in the expansion plans. There is seldom a surplus of extra capital to pay for a mistake or unforeseen costs associated with inefficient practices or poor decisions. A small or midsize company will have fewer staff members and less time to anticipate all of the cultural nuances and business practices that go unspoken in foreign locales. Having a good partner—either a joint venture, attorney, accountant, or consultant—can make the difference between winning and losing. Losing money is just part of the risk; losses can damage long-term relationships in a country. Finally, expanding into foreign markets, while strategic, will lengthen the supply chain of the company. Buying raw materials or components from multiple sources in multiple countries and then coordinating them to create a final product is a challenge. Focusing on logistics and a good management process is required. BF: How has the troubled US economy shifted concerns of corporate executives? KE: According to Chubb’s 2008 Multinational Risk Survey, senior-level executives and risk managers agreed that the top three threats to their business operations or business conducted outside the United States and Canada are: currency risk (23%); supply-chain failure (16%); and credit risk (13%). In our 2007 Multinational Risk Survey, the top three threats were terrorism, natural catastrophes and political instability. Some of these are business risks, and others are insurable through property/casualty insurance. Compliance with local laws and practices is a keen concern for companies doing business abroad. They want to be viewed as good corporate citizens in order to maintain strong relationships with a country’s regulators. For expanding firms, there is a heightened awareness of risks due to liabilities pertaining to employment practices, pensions, and directors/officers. According to Chubb, in 2009… • 75% of companies will […]
From the Desk of the Editor in Chief
In June, we took note in this space of Sheriff John Green of Philadelphia’s refusal to enforce court-ordered foreclosure auctions in the city. The soul-searching stance of Sheriff Green (we called him ”Not the Sheriff of Nottingham”) prompted city officials to set up a unique program to facilitate negotiations between financial institutions and homeowners in danger of losing their property to foreclosure. We are very pleased to report that, according to an article in Sunday’s New York Times, the city-sponsored plan has averted almost 80 percent of the foreclosure sales of properties referred to it in its first three months. The plan, started in June by the city government and the Philadelphia Court of Common Pleas, requires all owner-occupied properties scheduled to be foreclosed and auctioned off to have their mortgages reviewed by borrowers, lenders, and the court before they can be sold. The Times reports that of the 522 homes referred to the program during the past three months, 230 were permanently removed from sale, and 200 had their planned sales postponed for up to five months. The program is administered by Judge Annette Rizzo of the Court of Common Pleas. Like everywhere else in the United States, the subprime mortgage crisis produced a tsunami of foreclosure filings in Philadelphia in the past two years. Since the beginning of 2006, more than 14,000 foreclosure filings have been recorded in the City of Brotherly Love. This depressing state of affairs seemed beyond the control of local officials until Sheriff Green decided he was fed up with forcing his friends and neighbors out of their homes. Sheriff Green, who has worn a badge for 37 years, astounded the legal and financial movers-and-shakers in Philly when he refused to hold court-ordered foreclosure auctions. Without the sheriff and his 241-person department on board to enforce the court’s action, foreclosures in Philadelphia ground to a halt. Soon after, the City Council opened a legal umbrella over the sheriff’s unilateral (and illegal) action by unanimously enacting a temporary moratorium on foreclosures, and Judge Rizzo asked civic leaders, lenders’ attorneys and housing advocates to set up a process that would determine which homeowners deserved a delay, aid through government programs, or at least a ”graceful exit” from their house. This committee also developed a streamlined process to make loans more affordable for delinquent homeowners who still live in their houses, and homeowners were offered free lawyers for court-supervised ”conciliation sessions” with their loan-servicing companies. The nation’s attention has been focused in recent days on the U.S. […]
Here’s the understatement of the year for you: The United States is in some pretty deep trouble. As our presidential nominees debate whether or not to have a debate tomorrow, our current head honcho, George Bush, broadcast himself into our living rooms to tell us “our entire economy is in danger.” Thanks, W, for that update from the Department of the Obvious. He must still be trying to determine how many zeros to write on that $700 billion bailout check. Meanwhile, the $27 billion in damages caused by Hurricane Ike this month has left large swatches of Texas and the Gulf coast in disarray. The storm also caused gasoline prices to surge throughout the nation, which already is in an energy crisis. Offshore drilling is a contemptuous issue enough, but it does not help our unstable situation that one of our primary oil suppliers, Venezuela, is controlled by Hugo Chavez, an ardent American antagonist who unceremoniously sent home the U.S. ambassador nearly two weeks ago on September 11–coincidence? I think not. Last week, our embassy in Yemen was blown up and, just yesterday, Iranian figurehead Mahmoud Ahmadinejad declared to the UN assembly that “the American empire…is reaching the end of the road.” This statement comes from the man who infamously told Columbia University that there are no homosexuals in Iran. Brilliant. Did I forget to mention that our troops (and dollars) are still…in…Iraq? Here’s a simple idea: Let’s bring our women and men home and use some of the millions of bucks we are spending in the Persian Gulf to give them jobs in Ohio, Michigan, Louisiana..we have 50 places to choose from! We can call this plan Economics 101. Sarcasm aside, it sure has been a rough several weeks, months, years for the United States. When things get this dire, it can be difficult to find that clichÅ½d light at the end of the tunnel. But as I flip through my calendar, I do see something to look forward to. It’s called Election Day, and it’s November 4. If you aren’t registered, don’t know where to vote, or need an absentee ballot, check out www.stopandvote.org. This may be the most important election of our lifetime.
When you turn the ignition key in your car and nothing happens, the first thing most of us do is get out and check the battery. Well, if you happen to be sitting behind the wheel of General Motors’ hydrogen-powered Chevy Equinox, don’t bother. Just wait for the red light on the dashboard to turn green — that’s the only way you are going to know that this car of the future is ready to roll. We were invited this week to test drive one of the 100 fuel-cell powered Equinox cars GM has hand-built at the General Motors Fuel Cell Activities Center in Honeoye Falls, NY, a few miles from Rochester. We have to admit we had some trepidation about taking a ride in the Equinox prototype. The last time we inspected a hydrogen-powered vehicle, we were looking at some grainy photos of the Hindenburg’s ill-fated arrival in Lakehurst, NJ. Our jitters were not eased when, immediately upon arrival at the Honeoye Falls facility, GM execs seated us in a conference room a few feet from the front door, pointed to the door, and said ”this is the fastest evacuation route if something happens.” They didn’t tell us what ”something” might be, but we had a vague feeling it might create a cloud shaped like a mushroom. All these concerns evaporated when we pulled out of GM’s parking lot and headed up the road into a beautiful fall afternoon in the Genesee Valley. Also evaporating was the Equinox’s ”exhaust” — the only thing the car emits out of its tail vents (no need for pipes) is a fine mist of water vapor. We are pleased to report that this Chevy of the future — disguised as a run-of-the-mill SUV crossover to limit cultural shock — is a fine cruising machine. GM says it’s as safe as any other car on the road (Jay Leno is driving one around Hollywood), and when we put it to the test on a local hill it accelerated effortlessly. The fuel-cell design features a single-gear drivetrain, which lets the driver power up to 100 mph without so much as a shudder. Most amazing of all was something that was completely missing — noise. The only sound coming out of the car was the quiet hum of the tires on the road. Add an eight-speaker stereo and you’re in vehicular heaven. We jokingly told our GM guide that we were tempted to try and receive the first hydrogen-powered speeding ticket. Never mind, he replied: he’s […]
In one of our favorite Honeymooners episodes, Ralph Kramden’s buddy Ed Norton is bragging about an investment he just made in a new firm called ”Merrill Lynch Pierce Fenner and Ziggy.” The guy who sold him the shares was Ziggy. Ziggy worked in the sewer with Norton. This week, the U. S. Treasury gave an $85 billion loan to the largest U.S. insurance giant, AIG, to keep it from collapsing. According to U.S. Treasury Secretary Hank Paulson, this emergency infusion of swag is a temporary, two-month ”bridge loan” that will be repaid by selling off AIG’s assets. The loan is secured by the transfer of 80 percent of AIG’s equity to the government, which means that while they were sleeping on Monday night the American people became the proud owners of a huge financial conglomerate that is in the final stages of bleeding to death. Not to worry. Paulson promised American taxpayers that he would try really, really hard to make sure that they aren’t stuck with the bill for AIG’s staggering debts, which of course were accumulated in the drunken speculative orgy that has consumed what used to be known as the international financial system. The day before AIG was granted this spectacular rescue package, Paulson looked the other way while another financial giant, Lehman Brothers, bled to death. There was still a wall on Wall Street when the brothers Lehman set up shop in the mid-19th century. Paulson is beginning to look like a haggard surgeon in an overwhelmed Army Mash unit, desperately hooking up financial transfusions in a battlefield littered with critically wounded bankers. He apparently began running low on ”blood” supplies a few weeks ago, so now he is draining the walking wounded to keep the basket cases going for another few days. President George W. Bush, presumably busy packing up his cowboy boots in advance of his eagerly awaited retirement, trotted out his spokesperson to explain why AIG had to live and the Lehman siblings had to die. AIG’s failure was much bigger than Lehman’s, she explained, therefore AIG needed to be rescued and Lehman did not. Message: If you are going to fail in America, fail BIG. This lesson was quickly absorbed by America’s Big Three automakers, each of whom is teetering on the brink of bankruptcy. While everybody was distracted by the carnage on Wall Street this week, GM, Ford and Chrysler quietly tapped Congress on the shoulder and reminded it that somebody in Washington promised them a $50 billion ”bridge loan” a […]
Within months of the hideous terrorist attack in 2001 that destroyed the World Trade Center, state and city officials in New York unveiled ambitious plans to build five new skyscrapers, a solemn memorial, and a gleaming new transit hub designed by Spanish architect Santiago Calatrava at the 16-acre site that is known as Ground Zero. The plans called for two reflecting pools that would sit atop the Twin Tower footprints next to the entrance to a permanent memorial to the 2,751 victims of the September 11 atrocities in New York. The new Freedom Tower would rise a symbolic 1,776 feet over the Manhattan skyline. Calatrava’s breathtaking design for the train station features the wings of a birdlike structure over a huge glass-covered portal. Seven years after the attack, while some foundation work has been started, the only things that seems to be rising at the mainly empty site are construction estimates for the project. City and state officials, meanwhile, continue to argue over who is to blame. Earlier this week, in an op-ed column in The Wall Street Journal, New York Mayor Michael Bloomberg proposed scaling back the multibillion-dollar transit hub and abolishing the agency that approved the redevelopment plans for Ground Zero. Bloomberg wants to end the Lower Manhattan Development Corp.’s (LMDC) role at the World Trade Center site in order to ”eliminate one redundant layer of bureaucracy” that has stalled rebuilding. The mayor also said that the underground mezzanine of the commuter transit hub, which overlaps with the Sept. 11 memorial, ”is too complicated to build.” Bloomberg, who helped raise $350 million in private funds to build the memorial, said officials should commit to opening the memorial by the 10th anniversary of the 9/11 attacks, in 2011. The city has been mud-wrestling for seven years with state development officials, a private developer and the Port Authority of New York and New Jersey over the WTC site. Three months ago, Gov. David Paterson of New York ordered the Port Authority to re-evaluate all the Ground Zero projects. His predecessor as governor, Eliot Spitzer, branded the LMDC ”an abject failure.” According to the Port Authority, all of the projects are ”over budget and behind schedule,” including the transit hub, now said to cost at least $1 billion more than its original $2.5 billion estimate. The only thing certain at this point is that in coming months there will be more official reports, dire predictions and finger-pointing from political leaders and developers. The people who died at the World Trade Center—and […]
When I was an undergraduate student in Bethlehem, PA, I made a friend from California who told me something I still remember to this day: “You belong in Los Angeles.” I didn’t understand fully what she meant, and she didn’t elaborate. I had always been an East Coast guy—raised at the Jersey shore, and spending a lot of my teenage years and early twenties in the glorious frenzy of Manhattan. But shortly after graduating from college, I boarded a jumbo jet in Newark and soon descended into LAX. I was awestruck by California’s natural beauty—the tallest palm trees I had ever seen soared into the pink-tinged, dusky sky. My friend picked me up in an Infiniti, we opened the moonroof and windows, and hit the highway to Pasadena! We also hit traffic. A lot of traffic. My friend said, “There are more cars than people in LA.” Impossible, I thought. But an hour later, I believed her. “You need a car to live in LA,” she said. “Why don’t people use public transportation?” I asked. My friend looked at me in incredulous horror. “There are buses,” she admitted. “But no one would be caught dead in them.” Turns out that I do love California. From the over-the-top glamor of Hollywood to the beaches and art of Laguna, way up to the vibrant hodgepodge of San Francisco, Cali is an amazing state. But the state of its traffic problem is dire (as is NYC/NJ at rush hour, admittedly). Fortunately, California is on the verge of passing a bill that will mandate “smart growth” throughout the state. This trailblazing land-use initiative of Sen. Darrell Steinberg will require each metro region to enact a “sustainable community strategy” that will encourage development of compact housing options closer to where people work. Shorter commutes equal less greenhouse gas emissions and less traffic. In the urban/suburban sprawls of Los Angeles County, this plan could make residents breathe much more easily—cleaner air and less road rage. For a more detailed explanation of the smart growth proposal, you can check out this article from the LA Times. Business Facilities LiveXchange conference, held in Huntington Beach, CA this November, also will address the topic of smart growth. Here’s an inside peek at our expert speaker.
These gems didn’t just catch our eye with a quick flash. Their consistent economic development sparkle earned them front-and-center display in our annual showcase.