Ambassador Event: Site Selector Insights Panel

Site selectors share perceptions of Greater Phoenix business environment

When businesses consider expansion or relocation, they often use site selectors to locate advantageous markets and connect with local companies and economic development organizations.

A group of site selectors joined the Greater Phoenix Economic Council’s Ambassador Event in February to provide insight on the national perception of the region and clients’ considerations of Greater Phoenix. The panelists were:

• Alex Baker, Consultant, Avison Young
• David Hickey, Global Managing Director, Hickey & Associates
• Andrew Ratchford, Senior Consultant, Global Location Strategies
• Alan Reeves, Senior Managing Director, Newmark
• Moderator: Samantha Pinkal, Vice President, Business Development, Greater Phoenix Economic Council

The group participated in a Q&A with GPEC partners. The following answers have been lightly edited for clarity.

Q: In terms of site selection, what stands out to you as the biggest change in perception of Greater Phoenix over the last five to 10 years?

Baker: Phoenix’s growth as compared to the other major data center cities, among them being Northern Virginia, the top global center. Phoenix is rising and being able to compete with Northern Virginia, particularly with respect to the fact in Northern Virginia, they’re lacking land and are looking at redevelopment plays. So, they are taking over existing development and redeveloping for data centers, while here in Greater Phoenix you all are blessed to have a lot of land, access to power and relative utility cost to go on with that. I think that’s something to continue to watch.

Reeves: I’d echo that. From a perspective of projects that require heavy infrastructure, Phoenix has definitely taken front stage as far as companies and others perceiving it as opportunity for that. Shifting to office space a little bit, from my perspective of what I’ve been seeing working with tech clients, is this shift from thinking of Phoenix as a back-office type of market to really focusing on enterprise tech with the top-notch software engineers. For a long time, people out of California, people off the East Coast would look at Phoenix as that opportunity to establish back-office operations, and now they’re really starting to focus more on, ‘Here’s where we get top talent because it’s migrating in.’ You talk about the single-family permits, that’s going to be a big part of it. That’s what companies are seeing too, and they see that opportunity to come in and establish operations as an HQ2 type of deal.

Ratchford: I wonder if it’s less about a change of perception of the market and more of an opportunity that’s now presenting itself to highlight the Phoenix area in particular. You’ve always sort of been an alternative to California, or an alternative to some other places, but now, whether it be the pandemic or it be other things that are driving an exodus from other areas, or new incentives and whatnot, I think that there’s an attention that’s being placed on markets like this that now companies are paying attention to -- ‘OK, well maybe I would’ve written that off because it's in the desert and I don’t think they have any water.’ And so [they’re] willing to think a little longer about it and then find out that it doesn’t have the same restraint from the Colorado River that the neighbors do, so maybe [they] can think a little longer at it.

Hickey: When you have that opportunity for land, for infrastructure to build out the (Loop) 202, to build the (Loop) 303, and be able to do that in advance and some incredibly forward thinking that has led to some of the projects that the Phoenix area has won in recent years. I think it also then comes down to the greatest asset class of all today, and that’s the people in that workforce and the talent pipeline of tomorrow.

Q: What are your clients most surprised to learn when they consider Greater Phoenix?

Ratchford: A lot of our companies need a lot of water. … Sometimes they’re not used to looking in this sort of region where there is a water management system and there’s a process to getting allocation for that and managing that, and so learning what that timeline is and how to incorporate that into their ultimate timeline is something to add into their consideration.

The pure stats on ASU and on the workforce that’s growing here, and you look at the growth trends and certain SOC codes and you look at that technology in some of those engineering-related jobs – that’s really attractive, especially at the cost that it’s being offered within the market, within proximity, and you just start layering these other things on top of it so that you can produce something in proximity to a large market such as California or Texas without being in those.

Reeves: Phoenix really lives up to its billing. You hear all these positive things, but then they come here and they realize it and they see it themselves. … It’s the best type of confirmation you can get, that it is what people said it was.

Hickey: When we come to the people-side and the office-side, it’s not a back-office destination. It’s not that contact center that perhaps it was, or perhaps that perception was, in the past. These are real companies, they’re companies that are coming in, they’re expanding, they’re setting up and ultimately as we see it, what we’re continuing as we weigh in our large benchmarking, a headquarters destination as well.

Baker: Every company is looking for labor. The fact that Phoenix and Maricopa County is the No. 1 place for population growth over the past year highlights the fact that there’s a reason people want to be here for living, for working, for their recreation. I think that speaks to the companies that have come here, the brand names that you see as you fly in, and so the clients that we’re working with would be thinking about, ‘Florida’s got more population growth,’ or ‘the southeast has a lot of population growth,’ but no, it’s here in the southwest and it’s specifically here in Maricopa County.

That’s another reason why they are giving this area a first look – their top decisions are labor and real estate and so they’re looking at that through the lens of, ‘I can build a Taiwan Semiconductor, but am I going to have the labor force to be able to both recruit and retain and hire?’ And this community, through the ASUs and the University of Arizonas and others allows for there to be a pipeline plus all the things that you all know, climate and quality of life.

Q: What can our private sector members do to make themselves more visible to your clients, considering the market?

Reeves: Convening the Community is a great example of an opportunity to really trumpet what’s happening in Greater Phoenix. … (GPEC) is limited by 30 people, but you talk about the expanse that the actual community can provide, and your ability to take that message out to the world, talk about the positive things – at the end of the day, it’s often about third-party validation. It’s great to hear that positive message from GPEC, but they’re paid to tell us positive things. If we hear it from the community members, from the companies, from those stakeholders, that so many times means so much more than something that can feel a little bit more staged.

Ratchford: I think back to a time that I was serving on a local YMCA board and we were doing some fundraisers and we had these success story cards. We had stories about individuals that had benefited from the program and what they had come from. I think I saw some of these statements on your website and some of these things that are quasi-success stories or success stories that are already out there. Continuing to share those is one of those items.

When we’re doing a visit, whether virtually or in-person, we do reach out to existing employers and service providers in the market. Particularly companies that are operating or recently hiring, and we want to talk to those companies and get a good, honest look at what their experience was in that industry and to understand where the challenges are and where they might meet those gaps. … I would encourage you as companies, maybe even competitors too, be open to telling that story.

Hickey: It’s all about relationships still. That people-side. All of us up here are huge data nerds in everything we drive. It unbelievable, the amount of millions of data points that come into in any of the decisions that we work alongside our clients, but at the end of the day they’re still going to make a decision and a lot of the time it’s where do they feel the most comfortable.

Q: What is the point of origin of most of your projects?

Reeves: It’s pretty diverse. What we’ve been seeing some recently, and this is may be more anecdotal than evidence of a significant shift or trend, is companies out of the southeast that are looking westward for potential expansion opportunities. Phoenix is usually top-of-mind, it’s going to be in that kind of top-five list about, ‘We should really take a look at that.’

Ratchford: We’re starting to see a good bit of investment in traditional products made in a new way, a more renewable way. They’re wondering ‘Where should we go,’ ‘Where’s good for this,’ and they’re asking of some these preliminary questions about how friendly are they to environmentally friendly products on the generation side, and what’s their story and culture like. Those companies, some of them being in the southeast, looking to better serve as they’re growing a western market and they don’t want to be in certain states, they want to be near them.