A Successful Economic Development Effort in Tucson, Arizona

  Background

For the past 10 years or so, the City of Tempe, Arizona has had a dedicated economic development department whose sole aim has been to expand new and existing business projects in the community. During its inception, the Economic Development team was tasked with providing a wide range of services that were designed to support all small businesses as well as various Fortune 500 corporations that had set up shop in Tempe. The city representatives were instrumental in helping companies liaise with community leaders, choose excellent business locations and find appropriate tax saving programs that often facilitate the birth of business groups. It is however important to note that even with the urban advantage of having an educated workforce and a central location in the Greater Phoenix Metropolitan Area, the City of Tempe has not been able to reach its full economic development potential. The economic development after the establishment of the Raytheon Missile System in the City of Tucson can be used as successful economic development effort that can be similarly aped by the City Of Tempe.

             The Setting Up Of Raytheon Missile System in Tucson, Arizona

            The City of Tucson had suffered from an economic malaise for a long period. In the last couple of years, Tucson’s luck seems to have changed with the recent fixing of roads, job opportunities, building of new infrastructure and the filling of vacant buildings.  The development observed in this city is due to the recent announcement of the Raytheon Missile Systems’ immense expansion into the area (HCIBGO et al.,2016). The development is courtesy of the groundwork that has been laid by the local government as well as the incentives that have been offered by the state government. Raytheon’s decision to set up a base in Tucson was not random. The local officials in the city had observed earlier that luring Raytheon to the city would definitely stimulate economic development through the buying of buffer property to establish an aerospace corridor.

In addition to Raytheon creating nearly 2,000 jobs, a positive feed-back was created when other employers joined the aerospace corridor mix (Devine, 2015, 40). The jobs offered aren’t the usual low-wage call-centre type but lucrative high paying opportunities. Economists such as Dennis Hoffman, the director of Arizona State University’s (ASU) L. William Research Institute noted that Tucson was finally ‘turning the corner’ as far as economic development was concerned. The institute happens to also conduct contract tasks for Raytheon Missile Systems. The federal government also offers incentives that are important for economic development. Among the key items that Raytheon brought to the table was the buying of 382 Acres of prime buffer land for a cool $5.9 million, the building of the relocated Aerospace and Raytheon Parkway at $12.7 million and the process of moving electric lines that cost $3.9 million.

The huge benefits that accrued from Raytheon’s expansion in the City of Tucson helped it pay for $33 million worth of infrastructure development while also cutting their taxes. An upshot for the county taxpayers was that Raytheon ended up paying the highest share of the whole county’s tax burden. Tucson has thus been able to build a sustainable economy that has been based on this individual corporation’s subsidies as it is easy to eventually run out of taxpayers’ money (Crouch and Maclean, 2012, 267). All these incentives have been responsible for the decisive turn-around of Tucson’s economy. Incentives that attract compelling companies can be the only move that would grow Tempe into the business hub that it is supposed to be. The City of Tempe is an attractive and dynamic place that is capable of driving a hard bargain to attract large firms capable of economically developing it.

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