Phoenix competes heavily against Salt Lake City, Denver, Austin and Dallas for companies and business expansion.
Recently, two companies chose from among those other cities rather than Phoenix. I spoke with the relocation decision-makers in both cases with a promise that the firms and people would not be identified.
“I don’t want to embarrass any city. (Greater Phoenix Economic Council) and (Arizona Commerce Authority) did an excellent job in trying to land the deal, ” said the CEO of one company. “It’s not their fault, they have to work with the realities of the market and the realities of competition.”
The total number of jobs between both of these companies totaled 3, 000. And they were high-paying, too. The average wage at each company was more than double the Phoenix average per capita wage.
While Phoenix was highly competitive, one company I spoke with said it came down to Arizona's reputation on education.
“My key managers didn’t want to relocate to Arizona despite the golf and the weather, " said one decision-maker. "They were afraid they would not find good schools for their own children. They also felt that the state’s reputation for poor education would affect the ability to recruit talent from outside.”
The other company told me that workforce competition was a deal-killer.
“We dropped (another city) from the list for the same reason, " said one decision-maker. "Most of our hires are specialists, and there we felt that there were too many similar companies in Phoenix and the other city to try and hire from the same workforce.”
This isn’t to say that Phoenix wasn’t competitive.
“Phoenix came close to making the final cut, ” said one. “It has a good business climate, it’s not the cheapest place, but it’s not overly expensive either.”
The other decision-maker said Phoenix is a strong competitor, but some of the management team were concerned about how welcoming the market would be to attracting a diverse workforce.
“We hire foreign nationals, too, and we don’t want to see them feel like they are not welcome in the city where we build, ” he told me. “Your sheriff puts a bad face on your brand out here (in the business world).”
There is more to this story, and in our Aug. 28 special feature on Phoenix economic development, we'll look at the other reasons Phoenix missed the cut, as well as what site selection consultants are hearing from their clients about locating in the region.