Daily Archives: September 30, 2009
[Source: Ryan Randazzo, Arizona Republic] — One hundred years ago today, cheap power gave Phoenix a jolt. Until Oct. 1, 1909, the city of 11,000 relied on gas lanterns and electricity from small wood- and gas-burning power plants. But on that day, the homes and businesses in Phoenix received their first cheap, free-flowing electricity from the Theodore Roosevelt Dam.
The power boosted development at a time when Tucson and Clifton-Morenci both had larger populations than Phoenix, and Bisbee wasn’t far behind. But buoyed with abundant electricity and water from the dam, Phoenix became the biggest city in the state by 1920, and grew to the fifth-largest city in the nation early in the 21st century.
The U.S. Reclamation Service, which ran the dam before Salt River Project took over, found cheap electricity was a side benefit. “It really solidified Phoenix as the capital of Arizona,” said Doug Kupel, a historian with the city’s legal department. “All the activity in Arizona — mining, agriculture, banking — Phoenix was at the center of that.” [Note: Read the full article at Dam power promoted era of Valley growth.]
[Source: Wall Street Journal] — Moody’s Ratings Service lowered its ratings outlook on the city of Phoenix, Arizona, to negative, citing ongoing revenue declines and expected tax-base losses in the city, which will weaken its credit profile. Arizona’s largest city, and the fifth most populous in the U.S., is in the midst of a severe recession that began with the housing crisis and now includes most other sectors of the economy.
Unemployment has been less of a burden in the city, reaching 8.7% in July, compared with 9.5% for the state and 9.7% for the nation. But a weak job market combined with the potential for more foreclosures means many consumers in the area will severely limit their discretionary purchases well into 2010, Moody’s said.
The ratings agency said that, despite the city’s efforts to maintain fiscal stability during the recession, the outlook cut reflects Moody’s expectation that finances will remain under pressure for the foreseeable future, given those broader economic concerns and uncertainty about the region’s next economic expansion. Moody’s has Phoenix at Aa1, which is one notch under Aaa. The outlook change affects about $2.4 billion of debt.
Earlier this month, Moody’s lowered its ratings outlook on Arizona’s Aa3 issuer rating, which is three notches under Aaa, to negative. The ratings agency cited similar concerns about revenue underperformance. Despite those concerns, once the housing market levels off, Moody’s said Tuesday, Phoenix will resume its above-average long-term growth due to its high-skill office jobs and high-tech manufacturing sector. The city continues to develop a number of revitalization efforts, including a convention-center expansion, light-rail construction, and development of a downtown campus for Arizona State University. Moody’s said those efforts and ongoing population increases should help the city recover at a faster rate. [Note: Read the full article at Moody’s lowers ratings outlook on City of Phoenix to negative.]
[Source: Betty Beard, Arizona Republic] — A new study shows that TGen, the downtown Phoenix-based bioscience research group, last year produced about $8 for every $1 invested by the state — more than twice its economic benefits of two years earlier. The study by the Tripp Umbach company in Pittsburgh estimates that the 2008 economic benefit reached $77.4 million, compared with $21.7 million in 2006. TGen’s economic benefits have grown because it has almost 300 employees, its research has helped create or incubate seven companies to commercialize technology, it contracts with outside businesses such as software developers, and the bulk of its $65 million annual budget comes from federal and corporate grants.
The Translational Genomics Research Institute, as it is officially known, commissioned the 2006 and 2008 studies to show that the state and public investments that created TGen in 2002 have more than paid for themselves and continue to produce results, said Jeffrey Trent, TGen president and research director. Arizona pays about $5.5 million a year into TGen, using tobacco funds earmarked for health research. Phoenix contributed the building, and the group receives substantial donations, such as $685,000 awarded by Safeway earlier this year for breast-cancer research.
Even though TGen continues to attract multimillion-dollar contracts and grants, Trent said he hopes the group can continue to receive money from the state earmarked for medical research. It expects to continue receiving the $5.5 million a year through 2012. “We are focusing on leveraging state dollars vs. replacing state dollars,” Trent said. “Bioscience was never intended to be the sole component that would change the economy in Arizona. But I think it is an important knowledge-based pillar that the state has invested in, and I think if it continues to invest, it is likely to have an economic impact.”
The Tripp Umbach report released Tuesday said that TGen operations in 2008 produced $8.09 for every $1 invested by the state, 461 direct and indirect full-time jobs, $2.7 million in state taxes and a direct annual economic benefit of $44.5 million. Adding the business spin-offs and commercialization, TGen produced about $14.07 for every $1 in state investment, $5.7 million in taxes and $77.4 million in total annual economic impact. [Note: Read the full article at Economic benefits of downtown Phoenix’s TGen more than doubled in 2 years.]
From an article in the Sacramento Press about the possibility of a new sports arena in downtown Sacramento… “[Mayor Kevin] Johnson also pointed to his time as an NBA player, which he said he doesn’t talk about a whole lot. ‘I lived in Phoenix when there was no arena downtown, and I was also part of a team that helped bring an arena downtown,’ Johnson said. ‘Phoenix was a ghost town, much worse than Sacramento. If you go to downtown Phoenix now, it’s a whole new town because of the catalytic impact that the arena had [on] downtown. I think the year was 1993; if you look at what has transpired over the last 16 years, [it proves] that [an arena] can galvanize a downtown community.'”