Building Small Business

by Alison Stanton

The many cities and towns that make up the Valley of the Sun may be diverse in their geography and population size, but they do share one goal in common: growing and supporting their small businesses. The Phoenix metropolitan area is a hotbed of entrepreneurial activity and without a doubt contributed to Arizona’s recent ranking by the Kauffman Index of Entrepreneurial Activity as the top state in the country for business start-ups.

Small business is the engine of commerce, and one way that local governments are fueling this activity is through programs focused on education, incentives and professional services meant to catapult business starts and give small business “a leg up” in their communities.

In Business Magazine has spoken to many people behind these efforts of local governments, to identify what is available to small-businesspeople and what successes they have had on our overall economy.

East Valley Ascending

Chandler  High-wage priority
Chandler Mayor Jay Tibshraeny says that, although the city does not offer incentives to small businesses per se, it does provide a very friendly atmosphere in which to do business. “Our Small Business Assistance Team works with those entrepreneurs who need help in moving through the system to ensure a successful start-up. We also offer direction and advice through our Economic Development staff and in partnership with the chamber of commerce.”

The Small Business Assistance Team is available to assist small businesses that are considering leasing commercial space in Chandler. “The team is available to businesses free of charge to walk the potential space with them and discuss their plans for the space,” says James Smith, economic development specialist for the City of Chandler’s Economic Development Division, explaining the team then provides feedback to the business to let them know of any prohibitions and/or work that would be necessary before the space could be occupied and the business opened.

In general, Chandler’s economic development is primarily directed at retaining and attracting high-wage jobs in fields like research and development, high-tech manufacturing, electronics, biotechnology and aerospace/aviation. Smith notes that, as Chandler’s largest employer, Intel tends to attract additional companies to the city. And Chandler has an incubator that provides start-up companies in high-technology fields the opportunity to get started in modern laboratory space that is not only available at below-market lease rates but has a number of amenities not typically provided in other leased spaces, including electricity, water, sewer, phone systems and Wi-Fi.

Gilbert  Science & technology abound
In the next 20 years, Gilbert will become a net importer of science and technology jobs, predicts Dan Henderson, director of economic development. “This will be achieved through stakeholder collaboration, encouraging innovation and the promotion of entrepreneurial activities within the Gilbert business community.”

The Gilbert Office of Economic Development assists small businesses in four specific areas, Henderson says: site selection, research and information, connectivity and collaboration, and project management. The department offers assistance with navigating the internal development processes such as design and building plan review, state and local business licensing and obtaining certificates of occupancy. Says Henderson, “The client has an internal advocate guiding them through the entire start-up process to ensure their facility is up and running in as short a time frame as possible.”

Henderson says fiscal year 2012 will conclude a four-year pilot program utilizing a community development block grant as the funding source to deliver entrepreneurship-focused programming services. “Through a community partnership between the Gilbert Office of Economic Development, the Gilbert Chamber of Commerce, Stealthmode Partners and Gilbert-based Infusionsoft, this program provided services to over 150 entrepreneurs in the community and concluded with a success rate of over 450 percent above the job creation and job retention requirement by the federal CDBG program,” he says.

Evidence of this kind of success is Banner MD Anderson Cancer Center, located in Gilbert, which has helped bring in a variety of businesses of all sizes, Henderson notes. Spin-off activity from the soon-to-be 630,000-square-foot facility includes additional research facilities and medical practices, pharmacies, medical device identification, hotels and retail development.

Mesa  City of the future
Reducing red tape and unnecessary regulations that hinder small-business growth, which can help allow the government to be a facilitator of its success, are the greatest incentives Mesa can offer small businesses, says Mesa Mayor Scott Smith. “Mesa’s overall focus for economic development is two-fold. First, we are concentrating on our core industries identified by our H.E.A.T. Initiative: healthcare, education/energy, aerospace and tourism/technology. Second is building and expanding opportunities for entrepreneurs and small businesses to prosper in an environment where government is there to facilitate their success, not regulate it.”

Bill Jabjiniak, economic development director for the City of Mesa, credits quality infrastructure and a talented work force for the city already seeing “significant benefit” in each industry space. And once a small business comes to Mesa, the city continues to foster a relationship with it to ensure it grows and prospers. Assistance from his department aims to minimize risk, facilitate development and grow the organization. An example he cites is the Neighborhood Economic Development Corporation Light-Rail Business Support Program, a partnership with the City of Mesa to achieve the Council’s Economic Development Strategic Initiative by administering an electric utility rebate program for eligible businesses during periods of construction along the light rail line.

“NEDCO also partners with the city through the Community Development Block Grant program to offer Downtown Business Development loans and Micro Enterprise Development loans designed to support and encourage business development in Mesa,” Jabjiniak says. “The loans can range from $5,000 to $50,000, with flexible terms and fixed interest rates. NEDCO also provides technical assistance in general business, marketing, accounting, financing, human resource planning, organizational development and IT systems,” he adds. These examples demonstrate the city’s efforts to build business in Mesa.

Tempe  A tech hotspot
Lisa Collins, interim community development director for the City of Tempe, says, “We concentrate on businesses that would benefit best from the unique characteristics of our community, such as our educated work force, our location in the middle of the Greater Phoenix metropolitan area and our city’s vibrant downtown.” Observing that one out of every five jobs in Tempe is technology-based, she notes this sector is very important.

Incentives are offered on a case-by-case basis. Collins says the city looks at the specific needs of each company and determines specifically what Tempe has to meet them. “We offer customized processing for building permits and a very high level of customer service for our businesses. We also work with the Arizona Commerce Authority to ensure that businesses in Tempe are introduced to the variety of incentives offered at the state level.”

In order to help small businesses succeed, the city works closely with ASU Venture Catalyst, SCORE, the Tempe Chamber of Commerce, Arizona Tech Council and a variety of other organizations. “Our local colleges also offer great small-business programs, such as the Maricopa County Community College District’s Small Business Development Center, located in Tempe,” says Collins. “By working closely with the companies already doing business within Tempe, we can offer introductions to other non-competing businesses who can partner with them for success.”

Large businesses that are already in Tempe, like Silicon Valley Bank and Sunbelt Holdings, have helped bring in additional businesses, as has Arizona State University. “There are dozens of companies that spin out of ASU research and millions of dollars invested in ideas by companies who want to be part of that innovation,” Collins explains in identifying the great opportunities that Tempe offers to small business.

Phoenix at the Center

Phoenix  A model for success
“For qualifying business owners, we can help them with business-planning strategies, accounting assistance, finance, public and private procurement, organizational development and information technology solutions through local, private-practice business consultants,” says Kedrick Ellison, project manager for the City of Phoenix’s Community and Economic Development Department. Hundreds of local businesses have used these consulting services at no cost to the business owner, according to Ellison, who notes that many of these businesses then went on to create jobs. “Our business consultants can also assist with the development of human resource plans, including employee handbooks,” he says to demonstrate what Phoenix is doing on a basic level to build and maintain successful small businesses here.

Other services Phoenix provides are candidate screenings, referrals, interview scheduling and customized job fairs. Through its Business & Workforce Development Division, the city can help employers with finding and training talent.

Because accessing capital is another challenge that a small-business owner typically encounters when growing and expanding, Ellison says the city helps business owners through a collateral enhancement program called EXPAND. Local lenders have used this program to provide additional collateral for loan packages that did not originally meet their institution’s borrowing requirements, he explains.

Ellison also credits two local companies — the utilities Salt River Project and Arizona Public Service — for encouraging the growth of other companies and helping small-business owners become stronger. “SRP has partnered with the W. P. Carey School at ASU to provide mentorships for small-business owners, and they provide valuable information through their Business Resource Center,” he says. “APS has a program called Advancement of Small, Minority and Women-owned Enterprises that has been developing small-business owners by having them meet at least twice a month, and paired with an advisor for a period of two years, while they work on their individualized goals.”

Recently, to give a competitive edge to small and local businesses seeking to do business with the city, Phoenix Mayor Greg Stanton worked with the city council to pass an online procurement system weighted in favor of local small businesses. Reiterating a point he makes as Guest Editor of this issue, he contends that “helping small and local businesses to compete in our procurement process is one crucial way that we can support our homegrown businesses and help them to grow and thrive.”

Scottsdale & Surrounding Areas Booming

Scottsdale  Up-market, pro-business
Cindi L. Eberhardt, assistant director of economic development for the City of Scottsdale, says the department’s main focus is providing assistance to existing businesses by supporting expansion opportunities and services that will help them succeed by remaining in Scottsdale. “Attracting business to relocate or choose to develop in Scottsdale are also part of this focus. Given Scottsdale’s up-market profile, we concentrate our activities on high-paying jobs and advanced industry sectors,” she says. These sectors are biomedical/healthcare, financial services, education, software/technology, renewable energy and lifestyle/sports-related industries.

Eberhardt notes that ASU’s SkySong incubator has been in Scottsdale for more than five years and contains nearly 60 companies in its 300,000 square feet of space. On the private side, she points to AZ Disruptors as an innovative concept that has offered start-up assistance, including $20,000 in financial assistance, to 20 companies.

Scottsdale does not offer any tax incentives to any businesses, large or small, says Scottsdale Mayor Jim Lane. “However, we do offer an unmatched pro-business environment with a highly educated work force. Our high tourism economic impact allows us to keep property taxes low,” he says. “We also offer the largest concentration of Class A office in Arizona, along with a sophisticated and established infrastructure.”

Lane says that in order to strengthen the relationship between the city and the private sector, he is in the process of organizing a comprehensive review and rework of the city’s entire regulatory and permitting processes. “We are not only going to cut red tape but we are also going to help businesses get in and out of the system as quick as possible. As a businessman myself, I know too well that overburdening red tape can act like a red light to business.”

Carefree  Charm & vision
Carefree’s overall focus for economic development is to first enhance its aging town while maintaining its Southwestern charm, says Melissa Price, vice mayor of Carefree. Noting there are approximately 15 capital improvement projects that are part of a long-term plan recently adopted by the Carefree Town Council as a “vision” for the future, Price says, “Each of the projects is geared toward enhancing and positioning the town to entice future businesses to list Carefree as their number one town choice when the economy starts to recover.”

Although the town does not offer incentives per se, Price says there is a definite willingness to work with new businesses and facilitate their success through interaction and knowledge.

Mayor David Schwan says the town has been working over the past year to increase municipal facilities to help visitors and residents once they get into town. “For example, we are working to get more pedestrian lighting that will help encourage businesses to stay open longer,” he says. “Up until five years ago, we had no pedestrian lighting at all.”

Cave Creek  A new way of doing business
Several years ago, when the economy was starting to crumble, Cave Creek’s Mayor Vince Francia asked a group of citizens with a broad range of experience in the fields of business and finance to make recommendations to the town government for adapting to the changing economic reality. According to Ian Cordwell, Cave Creek’s director of planning, they produced a white paper that yielded more than 30 recommendations for changing the way the town should do business — all of which the town has followed through on.

Mayor Francia says that Cave Creek’s historic town core — one of Cave Creek’s identified business centers — now allows for more “free reign and for things like special promotions that help bring more people into the area.” At the other business center — the intersection of Carefree Highway and Cave Creek Road — a Walmart recently opened, which Francia notes is causing smaller businesses to apply to come in and be near it.

While the town does not offer financial incentives for businesses, Cordwell says the staff is continually planning for and implementing the installation of walking paths and bike lanes throughout the town, intended to make it easier and safer for shoppers to get to and around the shopping areas.

Fountain Hills  Attracting business
The Town of Fountain Hills is reviewing and updating its comprehensive economic development plan, says Lori M. Gary, Fountain Hills’ economic development administrator. Overall emphasis for business attraction is on three industry sectors: professional, technical and scientific services; healthcare, medical and bio-medical; and finance and insurance.

“Promoting Fountain Hills as a visitor destination, putting resources into tourism and local events, will also have the complementary result of increased economic activity for our businesses,” says Vice Mayor Ginny Dickey.

The West Valley Emerging

Glendale Redevelopment & assistance
Business retention and expansion, business attraction, business assistance and redevelopment are the pillars of Glendale’s economic development program, according to Brian Friedman, executive director of the Community and Economic Development Department. “In addition we have identified specific industries we are targeting to attract and retain in Glendale,” he says. These targeted industries include education, technology, hospitality and healthcare.

Glendale has also been working with its existing and small-business partners to establish a consortium of resources that provide a wide variety of assistance to small business in Glendale and all of the West Valley, Friedman notes. “Whether a business needs mentoring, marketing assistance, access to government contracts, inventory control, training, networking opportunities, entrepreneurship assistance, or business plan assistance, this consortium of partners offers specific programs to meet small-business needs.”

Another high priority for building the small-business community is redevelopment of the downtown area. Pointing to the recent action of the city council, approving a lease with Jivemind to use a city building to establish a musical incubator where musicians of all skills can learn, practice and record music, Friedman says the venue will also host weekly jam sessions that the public can attend. “We are making every effort to expand our cultural offerings in the downtown as a way to attract new patrons to our downtown shops and eateries, which further supports many of our small businesses.”

Goodyear Resources & responsiveness
In order to attract small businesses, Goodyear considers incentives on a case-by-case basis, depending on the overall economic impact of the business to the local community, says Harry Paxton, economic development manager for the City of Goodyear. “These incentives could include expediting of permits and funding part of the plan review and permits fees if the economic impacts are significant.”

In addition, Goodyear has committed resources in several ways to help small businesses prosper, including the recent addition of the Business Advocate position, which strengthens the department’s connection with businesses and provides greater responsiveness to the business community’s needs.

Other programs Paxton cites include the “Shop Goodyear” campaign to encourage local purchases for the holiday season, the sign kiosk program to help with marketing, and the city procurement code that provides special consideration for Goodyear businesses. Goodyear has also maintained an active Business Retention and Expansion program for some time, which involves visiting with already-established small and large businesses to ensure the city is meeting their needs and that the community is a place where their business can continue to thrive, Paxton says.

Peoria  Open for business
Peoria is focusing its economic development efforts on bringing in a variety of industries, including biotech, healthcare and higher education, says Mayor Bob Barrett. “As a city, we have three major investment zones, a technically skilled and educated work force, and good infrastructure” — which, he emphasizes, makes Peoria an ideal location for small businesses to relocate and expand.

There is also commercial space available, and the city has been proactive in addressing the issue of vacancies. Debbie Pearson, business development specialist for Peoria’s Economic Development Services Department, says the city presents Broker Open Houses, inviting brokers throughout the metro area to learn about all the good things happening in Peoria.

A small-business program that includes seminars, workshops and/or courses on a wide range of topics is another way Peoria entices small businesses to set up shop. Says Pearson, “They help the small-business owner run their business more successfully. A couple of the courses even include certification and college credits. We regularly partner with other organizations to offer as much expertise [as is] available.”

Such a partnership is BioInspire, which, as of press date for this issue, is on track to open in June in Plaza Del Rio. Peoria’s first incubator-accelerator for biomedical devices is a partnership between the City of Peoria; BioAccel, a nonprofit organization focused on strengthening the economic development of the life-science sector in Arizona; and Plaza Companies, a Peoria-based development company with expertise in healthcare.

The City of Peoria is also focused on attracting targeted industries such as renewable technologies, healthcare and biotech, clean manufacturing, and universities, with the expectation that the larger companies will attract “smaller supporting and complementary companies,” such as has already happened with BioInspire, Pearson explains.

Surprise  Quality, not quantity
Small business is a very big part of Surprise’s economic strategy, says Assistant City Manager Jeff Mihelich. To that end, the city offers a variety of programs and support to help them succeed. “We’re looking to grow more successful local businesses and high-quality job opportunities.”

AZ TechCelerator, the city’s business incubator, is one of the ways Surprise reaches out to support small business. “At the AZ TechCelerator, we offer low-rent space and free mentor connections that many of our young tech-based and innovative companies need access to,” Mihelich says.

A Small Business Advocate has been added to the city’s economic development team, working very closely with the small-business community and assisting them with business licensing, permitting questions and other needs. And Mihelich notes that larger businesses are also helping small businesses succeed.

The city is launching a business roundtable this summer to bring the business community and city staffers together, and Surprise Mayor Sharon Wolcott notes the purpose is to “explore new ideas for how Surprise can be even more supportive of our local employers.” She believes further growth is on the horizon. “I am also very excited about the economic development opportunities that await Surprise when the Loop 303 widening is complete.”

With the commitment these 13 cities and towns have to supporting, growing and maintaining their small-business communities, the future looks bright for small-business owners throughout the Phoenix metropolitan area. Businesspeople may be encouraged by these efforts and the examples of success from the Valley’s local city councils and economic development offices.

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