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SOUTHWEST
From Site Selection magazine, November 2019
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Vital Statistics

Facts and Figures Behind Success in the Southwest

SOUTHWEST
by GARY DAUGHTERS

Looking for a business location in the Southwest?

You’re not alone. Arizona, Nevada and New Mexico all are reaping rewards from diversifying their economies and, to varying degrees, adopting policies friendly to businesses large and small.

What follows should serve as a guide to the region’s top locations, complete with comments from two leading site selectors: Chris Lloyd of Virginia-based McGuire Woods Consulting and Jim Renzas of The RSH Group, who’s based in Mountain View, California. 

Phoenix

2018 POPULATION: 1,660,272 (+25,288, or 1.5%)
KEY SECTORS: Financial services, aerospace, distribution, healthcare, data centers
COST OF LIVING INDEX: 113.4*
2019 MEDIAN HOME PRICE: $246,000 (up 4.6%)
ELECTRICITY: $11.96/kWh (residential) $6.53/kWh (industrial)
AIRPORT: Phoenix Sky Harbor Intl, 5 miles (8 km.) from city center; direct flights to 130 destinations
ECONOMIC DEVELOPMENT: Greater Phoenix Economic Council
THE GOOD: Nation’s third-fastest growing economy
THE CHALLENGE: Managing rapid growth
WHAT THEY SAY:
“Phoenix was overly dependent on services and construction and they got whacked in the last recession. The key story now is around diversification of their economy, and I think they’re succeeding.”
— Chris Lloyd
“The business climate is dramatically improved in the last five years. The west side is great for distribution centers to serve the California market. For general manufacturing, Phoenix is a bit pricey compared to what some of the alternatives might be.”
— Jim Renzas
*Cost of living indices from Sperling’s Best Places from a baseline of 100

Tucson

2018 POPULATION: 545,975 (+4,196, or 0.77%)
KEY SECTORS: Aerospace, automotive, shared services, corporate headquarters
COST OF LIVING INDEX: 99.4
2019 MEDIAN HOME PRICE: $194,100 (up 5.3%)
ELECTRICITY: $10.15/kWh (residential)
$7.22/kWh (industrial)
AIRPORT: Tucson International, 8 miles (13 km.) from city center; direct flights to 20 destinations
ECONOMIC DEVELOPMENT: Sun Corridor INC
THE GOOD: Cheaper alternative to Phoenix
THE CHALLENGE: High poverty rate
WHAT THEY SAY:
“Tucson is more of a secondary market, and that’s not a knock on it. They understand what their value proposition is and they’re succeeding. The investment that’s going on downtown is phenomenal.”
— Chris Lloyd
“Tucson is the affordable alternative to Phoenix. Great workforce, huge university and a good place to look if you’re talking manufacturing.”
— Jim Renzas
ALTERNATIVE ARIZONA LOCATIONS: Casa Grande, Flagstaff, Prescott

Las Vegas

2018 POPULATION: 644,644 (+9.106, or 1.4%)
KEY SECTORS: Hospitality, manufacturing, distribution, technology, data centers
COST OF LIVING INDEX: 119.9
2019 MEDIAN HOME PRICE: $273,800 (up 1.8%)
ELECTRICITY: $12.15/kWh (residential)
$7.56/kWh (industrial)
AIRPORT: McCarran International, 7 miles (11 km.) from city center; direct flights to 150 destinations
ECONOMIC DEVELOPMENT: Las Vegas Global Economic Alliance
THE GOOD: Tax friendliness
THE CHALLENGE: Land and labor costs
WHAT THEY SAY:
“They’re making great progress toward being seen as a city that people want to live in and not just visit.”
— Chris Lloyd
“There’s a lot of money there and it tends to drive up costs for real estate and for labor.”
— Jim Renzas

Reno

2018 POPULATION: 250,998 (+9,016, or 3.5%)
KEY SECTORS: Technology, distribution, financial services, manufacturing, energy
COST OF LIVING INDEX: 127.0
2019 MEDIAN HOME PRICE: $371,900 (up 3%)
ELECTRICITY: $11.05/kWh (residential)
$4.26/kWh (industrial)
AIRPORT: Reno-Tahoe International, 5miles (8 km.) from city center; direct flights to 22 destinations
ECONOMIC DEVELOPMENT: Economic Development Authority of Western Nevada
THE GOOD: Proximity to California market
THE CHALLENGE: Housing shortage
WHAT THEY SAY:
“Being only three hours from the Bay Area makes Reno an interesting play.”
— Chris Lloyd
“The tech sector is going crazy. It’s getting difficult to find buildings and there’s pressure on the labor market because so many companies realize that it’s great alternative to Sacramento and Bay Area.”
— Jim Renzas
ALTERNATIVE NEVADA LOCATIONS: Fernley, Fallon, Carson City

Albuquerque

2018 POPULATION: 560,218 (+107, or .04%)
KEY SECTORS: Film, technology, manufacturing, call centers, renewable energy
COST OF LIVING INDEX: 98.3
2019 MEDIAN HOME PRICE: $205,200 (up 4.2%)
ELECTRICITY: $12.31/kWh (residential)
$5.87/kWh (industrial)
AIRPORT: Albuquerque International Sunport, 7 miles (11 km.) from city center; direct flights to 20 destinations
ECONOMIC DEVELOPMENT: Albuquerque Economic Development
THE GOOD: Low cost of living
THE CHALLENGE: Labor force depth
WHAT THEY SAY:
“New Mexico as a whole needs to continue to look at how to continue to improve its regulatory and business climate, particularly vis-à-vis its neighboring states.”
— Chris Lloyd
“Albuquerque is the biggest little secret in the West right now. Land prices and labor prices are affordable because the area hasn’t been discovered. They’re hungry for deals.”
— Jim Renzas
ALTERNATIVE NEW MEXICO LOCATIONS: Las Cruces, Santa Fe, Los Alamos

Gary Daughters
Senior Editor

Gary Daughters

Gary Daughters is a Peabody Award winning journalist who began with Site Selection in 2016. Gary has worked as a writer and producer for CNN covering US politics and international affairs. His work has included lengthy stints in Washington, DC and western Europe. Gary is a 1981 graduate of the University of Georgia, where he majored in Journalism and Mass Communications. He lives in Atlanta with his teenage daughter, and in his spare time plays guitar, teaches golf and mentors young people.

 




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