Ariz. groups unite to woo Calif. firms

by Chad Graham - Feb. 13, 2009 12:00 AMThe Arizona Republic

Phoenix and Tucson's regional economic-development groups launched a $100,000, six-month pilot program on Thursday to try to attract companies looking to leave California.

The campaign, called "Arizona Sun Corridor: Open for Business," will focus on the aerospace-defense, health care/bioscience, transportation/logistics, renewable energy and information communications technology sectors.

The Greater Phoenix Economic Council and Tucson Regional Economic Opportunities Inc. will hire an on-the-ground contractor in California to find specific companies that could be expanding or relocating.

The groups are pitching Arizona as a low-cost alternative with a favorable tax climate.

California is the world's eighth-largest economy and the world's fourth-largest solar market. The state has had its fair share of recession- related problems, and some companies have already left.

Last month, Neptune Orient Lines, a Singapore-based container shipping company, announced plans to move its Americas regional headquarters from Oakland to Phoenix during the second half of this year.

In a statement, the company's regional president deemed Phoenix a "cost-effective base of operations."

Economic-development officials also hope to duplicate efforts like last month's Catapult Bio announcement.

The biotech organization launched with a $14 million investment from a Los Angeles-based bioscience company and its chief executive. It hopes to fund Arizona bioscience startups to develop products such as new drugs and medical devices.

Still, "when companies leave California, Arizona is not one of their top two or three choices," said Barry Broome, president and CEO of GPEC. "A lot of it has to do with a lack of state economic-development incentives. A lot of it has to do with not having a state agency focused on a state strategy."

He added that "states like North Carolina and Tennessee are actually starting to outperform Arizona as a location decision for California companies."

Arizona's economic-development officials have struggled to diversify the state's economy, which has been heavily dependent on housing and growth-related industries since the end of World War II.

Reach the reporter at chad.graham@arizonarepublic.com or 602-444-8577.