Kate Gallego knows economic development. Before she ever became a member of the Phoenix City Council, she served on the economic development staff at water and power utility Salt River Project. Today she serves as the second elected female mayor in Phoenix history and at age 40 is among the youngest big city mayors in the United States.
Other than the pandemic that received everyone’s focus, since her election her focus has been on the city’s economic diversification, sustainability leadership and infrastructure, continuing a theme that saw her lead the campaign to pass a transportation plan for the area through 2050 when she was on the city council. She also has led efforts on criminal justice reform and ensuring equal pay for equal work, in addition to pursuing a solution to the digital divide.
Balance could be her watchword. Even through the COVID-19 pandemic downtown Phoenix saw continued growth after she designated construction as an essential service, with 20 cranes and thousands of personnel working on a broad use range of commercial, industrial, education, bioscience, healthcare and multi-use projects to further build out the city’s downtown core. She also was a central player in helping attract the multi-billion-dollar chip fab project from Taiwan’s TSMC (see her insights into that project elsewhere in this report).
Among the many projects she’s championed is the attraction of the $70 million Wexford Phoenix Biomedical Campus to downtown and the concurrent growth of Arizona State University, University of Phoenix and Northern Arizona University in the heart of the city. “This is place that you want to work, where you’re going to come up with the next cure for cancer, which I’m convinced is coming through the downtown biomedical campus,” Gallego told an ASU audience last spring.
In October, the Harvard and Wharton School graduate responded to some questions from Site Selection.
We’ve all read about the meteoric growth in Greater Phoenix’s population. How are you working with partners to recruit and welcome more talent to the area while simultaneously addressing issues that such growth can bring?
Mayor Kate Gallego: Our growth combines a focus on sustainability, world-class talent, and high-quality job opportunities. From global companies headquartered in Phoenix to our small businesses, from our recognized universities to schools and neighborhood workforce development partners, and from our researchers to entrepreneurs, Phoenicians tackle solutions as a team, and that is what companies discover when they come here.
Phoenix Community and Economic Development Director Chris Mackay and her team have done a stellar job with support from regional partners including GPEC [Greater Phoenix Economic Council]. Everyone talks about our big win in attracting Taiwan Semiconductor Manufacturing Corporation, which in itself is incredibly significant.
However, if you remove TSMC from the equation, we still experienced our largest year of capital investment — and that was all during the pandemic. We are systematically strengthening our pipeline of talent, working with our schools and universities to ensure programs can meet the future needs of the businesses we are attracting, and implementing workforce upskilling and reskilling programs, even dedicating ARPA funds to help displaced workers pivot into new careers.
In 2014 when I was a Councilwoman, the average annual salary for a job the city attracted was $36,000, and today it has doubled to more than $72,000. My work with our partners in economic development has brought about growth in advanced manufacturing, electric vehicles, unmanned systems and aerospace, bioscience and healthcare, advanced patient care, implantable devices, and important R&D. We are growing the jobs important to a sustainable future for the health of our city and for the families who are proud to call Phoenix home.
What are the topics of highest priority and concern among business leaders in Phoenix, and how are you and your team working with stakeholders to address them?
Mayor Gallego: Across all stages of business today, there is a focus on recruitment and retention. Education and workforce training is paramount for our future and growth. My goal is to get people into jobs — it is one of the most effective things we can do to get families back on their feet. As part of our strategic plan for distribution of federal funds allocated through the American Rescue Plan Act (ARPA), Phoenix is committing $10 million for training and education primarily through our local community college system, with part of those funds allocated to participants for emergency expenses such as transportation and childcare. By also ensuring families and individuals receive wrap-around services — including childcare, training, and direct assistance — we increase the chances that the gains they’re able to make now will become permanent. This is a transformative moment in the history of our community.
You seek to balance growth and development with sustainability and equity priorities. How have corporate leaders in Greater Phoenix worked with you on these issues?
Mayor Gallego: Corporate leaders, new and established, prioritize sustainability and equity, which has helped propel critical steps we are taking as a community. The City of Phoenix strongly supports the prioritization of renewable energy and energy efficiency— they are key for preventing pollution, reducing our electricity costs, and adding green jobs. I started in public service serving on the Phoenix Environmental Quality and Sustainability Commission, and at the time we were celebrating small-scale solar wins. Now, Arizona ranks fifth in the nation for total solar installed (up from eighth in 2020), with 5,175.7 MW. This is enough solar installed to power more than 800,000 homes, and accounts for nearly 8% of the state’s electricity. We want to ensure all residents can enjoy the benefits of clean energy. One program that I’m particularly excited about is Arizona Public Service’s Solar Communities Program. Through this program we’ve provided solar on carports at six public housing sites. Residents earn a $15 credit on their energy bills.
Many of the climate actions we’re taking are important for our residents, including developing a comprehensive and accessible light rail system, and this is also very important to businesses who are looking to move to Phoenix. Chris Camacho’s team at GPEC understands the value of these industries and has been instrumental in their choosing Phoenix and Arizona as their home.
The City of Phoenix just passed an updated Climate Action Plan that accelerates our net-zero emissions goal from 2060 to 2050 or sooner. Additionally, we’ve set a goal for 50% emissions reductions by 2030. We are working with C40 cities, a global organization of leading cities committed to climate action for which I serve as a North American vice chair, to conduct modeling of our proposed climate actions. Our net-zero goal is community-wide, not just for city operations, so it will take a cross-sector full court press to achieve it.
You have led the charge for Phoenix as a life sciences hub. What makes you think Phoenix can compete with national bioscience clusters? And what do you want to see happen next?
Mayor Gallego: CBRE ranks Phoenix as the fifth-best emerging market for life science jobs. That puts us high in the company of the staid science markets. We have three of the top U.S. News & World Report cancer centers, the Norton Thoracic center leads the world in heart-lung transplants, Mayo Clinic has invested in its largest single expansion to house its medical school and research capabilities, Creighton University opened its new medical school, and Translational Genomics Research Institute (TGen) and the International Genomics Consortium are both based in Phoenix. The last two years Phoenix had three of its bioscience companies selected as finalists at the BIO International Startup Stadium. Only 16 companies from around the world were selected this year, and three were from Phoenix.
Right now, there are plans for 4.5 million square feet of new primary bioscience and healthcare facilities in the city of Phoenix Biomedical Campus (PBC). Those facilities represent $3 billion in capital investment and 7,000 new jobs. More than 1.5 million square feet are under construction right now. Not that we are competing, but it took the city of Houston five years to deliver that many square feet of new bioscience healthcare facilities. Each time I speak with ASU President Crow and UArizona President Robbins, along with many of the companies with a presence on the PBC, I am astounded by how far we have come.
Additionally, it is exciting to see the increased partnership and presence of Exact Sciences with TGen and the International Genomics Consortium and their continued spinout of innovative companies advancing precision medicine and the fight against cancer and other life-threating diseases. All of us in Arizona are fortunate to have the innovation and leadership of TGen that has played a pivotal role in the past year in educating the public in understanding of COVID-19. TGen was able to set up a federally-licensed COVID diagnostic laboratory, and the institution of the AZ COVID sequencing reference laboratory, to support Arizona’s public health and healthcare response.
We are fortunate to have TGen, ASU, UArizona and NAU focused on the same vision of creating a global center of innovation right here in Phoenix. (Read elsewhere in this report for more insights into the region’s life sciences momentum.)
Progress is sometimes facilitated by the most mundane infrastructure advances. What do you see as the city’s most improved infrastructure assets?
Mayor Gallego: Companies love our airport, which has received top rankings from JD Power, the Wall Street Journal, and others. We get compliments that range from accessibility to local beer selection. The airport is close to downtown, easy to navigate, and doesn’t suffer from snowstorms. Water and transportation are key infrastructure investments, and, while not as tangible, I would add the city’s recent Climate Action Plan update. We plan for growth every year in our capital budget. Phoenix has had a water management system in place for years, and today, we use the same amount of water per capita that we used in the 1980s. We have a 100-year supply of water reserves and we have invested heavily in ensuring a sustainable water supply.
Our two most visible advanced infrastructure assets include the Metro Light Rail system, which opened in 2008 and is now undergoing its third and fourth expansions. The light rail went to voters four times and passed by a significant majority each time, including as recently as 2018. The other is the Loop 202 South Mountain Freeway. Built with taxpayer funding, this 22-mile freeway went from groundbreaking to fully open in under three years. It was built from scratch to its full capacity. We upgraded intersections, surface streets, water and sewer infrastructure, our local power companies geared up for new energy demand, and thousands of acres of greenfield are now ready for technological and manufacturing development.
When it comes to corporate project/FDI attraction and economic development, mayors are often where the rubber meets the road. Examples?
Mayor Gallego: When I worked for the electric utility in economic development, my work was very focused on numbers. Companies wanted to know how long it would take to get power, how much it would cost and what the power sources were. I find as mayor that the numbers are still incredibly important, but I also get more questions that are focused on what life is like in Phoenix. Corporate leaders want to know if our community will be open to new leaders and if their kids can find great schools. In the Mayor’s Office, I find my involvement on the personal side can be as important to closing a deal as my understanding of cost structure. That’s been a pleasant surprise. I also really enjoy being involved in the site selection process, and I think my genuine interest has been good for the city and for companies that are making huge investments in my hometown.
Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.