Poised for Recovery

Forbes Ranks Tucson in Top 10 Best Positioned U.S. Cities

By Jay Gonzales

While communities everywhere are far from free of the grips of the COVID-19 pandemic, the Tucson region finds itself in a spotlight of sorts.

To start, Tucson was highlighted in a Forbes magazine article on a report by Moody’s Analytics, earlier this year, that lists the region as one of “the 10 U.S. cities best positioned to recover from coronavirus.”

In July, the Site Selectors Guild, an association of site selection consultants that advises large companies trying to find the right cities for their businesses, listed Tucson among the top 11 mid-sized U.S. cities for relocation and expansion.

And after the pandemic took full force in March, Tucson had the highest increase in searches on Google by internet users searching the term, “homes for sale.”

This all suggests that the word is out that Tucson may be one of the places to be in the post-COVID-19 economy for jobs, for lifestyle, for industry and for relocation.

“These are smart people that are projecting this,” said Joe Snell, president and CEO of Sun Corridor Inc., the region’s economic development engine. “We can’t just sit back and say, ‘Well, it’s gonna happen because they ranked us.’ It’s going to be cities that get ahead of the curve now that win.”

The first welcome news hit in May with the Forbes article, released amid the stay-at-home order and the overall shutdown of the economy. At that point, good news was hard to come by.

The Moody’s report concluded that Tucson is attractive to big-city residents who see the population density of places like New York, Chicago and San Francisco as a safety issue in the post-COVID-19 environment. “Small college towns” and “fast-growing tech hubs” are two more characteristics that helped Tucson earn the ranking, according to Forbes.

“The generation that is growing up today could remember the impact of the COVID-19 pandemic on large, densely populated urban areas and be more likely than its predecessors to opt for less densely packed pastures in the decades to come,” the Moody’s report said. “Firms will need to follow those workers.”

The Site Selectors Guild essentially echoed the Moody’s report, noting “the pandemic has brought suburban areas and mid-size cities into the forefront of consideration for future site selection projects. When Guild members were asked about locations that are ‘likely’ or ‘very likely’ to be considered by corporations looking to expand, relocate or open new facilities in the next 12 months, 64% chose suburban areas, 57% chose mid-size cities, 31% chose rural areas, and just 10% chose large urban areas.”

Tucson fits nicely in there, and has for some time, Snell said.

“For us, this isn’t about COVID at all. It’s about resuming and building on success we saw going into the COVID stuff,” he said. “It’s great that we have some independent groups that are saying we’re well-positioned, but it is largely building on some of the things that we’ve already been winning with. We fit that sweet spot where we’re big enough, but small enough.”

In fact, the region’s economic development and business leaders have been building the very base of industry and employment that positions Tucson to recover more quickly than others. 

For example, one of the four industry clusters that has been a focus for several years is transportation and logistics. The region has attracted distribution centers for Amazon, Target and HomeGoods. It boasts an inland port in the Port of Tucson. Access to ports in Southern California and to the U.S.-Mexico border via interstate highways and Union Pacific rail lines adds to the region’s prowess to fuel the important supply chain. TuSimple, a company developing self-driving truck technology, is building and testing the technology here.

“The disruptions that happened (in the supply chain) as a result of COVID have companies rethinking how they’re responding to that and where they’re going with their businesses,” said Steve Eggen, a retired CFO of Raytheon Missile Systems. Eggen is heading up a Sun Corridor Inc. committee developing a post-COVID-19 recovery plan.

“When you look at the characteristics that we have in our region, it becomes attractive being close to the rail lines, being close to the border, being close to access to two areas of the country that have a lot of high manufacturing,” Eggen said. “They’re very accessible to us.”

Factor in the biggest disruption for companies – the need for employees to work remotely – and Tucson has the potential to capitalize on what may be a decentralization of businesses from the big cities as employees can work virtually from anywhere.

“We’re seeing that companies are probably never going to go back to the way things were,” Snell said. “More people will be working from home. We know that. We realize that with that trend, that lack of density is definitely playing out.”

Still, challenges lay ahead. 

As a college town – one of the factors cited by Forbes – pivotal for Tucson is the University of Arizona’s ability to recover from its financial hit. UArizona is the region’s largest employer with more than 15,000 employees and an annual $4 billion economic impact. 

“We play a really central role on so many fronts, including economic development,” said UArizona President Dr. Robert Robbins.

And while UArizona must find ways to work through a massive financial crisis, Robbins said the university’s standing as a major research institution puts it in position – and even gives it the duty – to help with the recovery. 

“We’re one of the top-ranked, globally recognized research universities in the world,” Robbins said. “There are so many positive things that are going on; the university is going to continue to be an engine for economic development in Southern Arizona, across the state, the nation and the world. We take that stewardship responsibility very seriously.”

Snell noted the region has learned many lessons, after struggling for decades before it reached the point where it was solidly attractive to companies like Caterpillar Inc. and Raytheon Missiles & Defense for relocation and expansion, respectively.

“This turnaround in the last five years – it’s taken 15 to get here with all this learning and some tough lessons,” Snell said. “It’s our time, and shame on us if we’re not smart enough to go answer the door and step through the threshold.”

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