The Arizona Republic

September 28, 2011

The state’s new job-creation entity, the Arizona Commerce Authority, is talking to 10 companies expected over the next few months to announce about 3,000 new positions and $300 million in capital investments, the head of the group said Tuesday.

Don Cardon, authority president and CEO, told the ACA board its staff is being aggressive because it considers job creation to be urgent.

Arizona has lost about 300,000 jobs since late 2007 and only begun this year to finally start regaining them. Scottsdale economist Jim Rounds said Tuesday that full recovery isn’t expected until 2015 or 2016.

The authority is also talking to another 260 companies considering the state but are not as far along in their plans, Cardon said.

“We are not sitting around waiting for the phones to ring,” he said. “We are driving the effort.”

The authority is a public-private group, supported by $35 million a year in state funds, created in June 2010 to replace the former Arizona Department of Commerce and make the state more competitive in luring employers.

During a four-hour board meeting, Cardon described key programs the authority plans to launch or continue, including:

-Starting an $18 million revolving fund to help small businesses, typically those with 10 to a dozen employees, that want to add workers and that have been unable to get capital from banks or other lenders. Cardon on Tuesday announced that the state has just received an $18 million grant to fund that, as well as a $656,000 grant to aid companies that want help exporting.

-Opening an Arizona Commerce Authority Center for Innovation and Entrepreneurship in a few weeks southeast of Van Buren and First Street in downtown Phoenix. The center would be a place where entrepreneurs could learn about aid, take seminars and discuss ideas.

-Spending $2 million for the next five years on a business-marketing campaign to promote the state’s more friendly business environment. It would be aimed at businesses, not tourists.

-Opening trade offices in Los Angeles, San Jose and China next year to target companies that want to expand or move. It also would open offices in Tucson and Flagstaff to make its services more accessible.

-Continue to invest $2 million a year in rural areas to encourage more jobs there.

-Continue with a $1.5 million annual Arizona Innovative Challenge program that provides money to young innovative companies.

Because the authority gets both private and state funds and is exempt from certain state rules, it has raised concerns about transparency.

On Tuesday, the Arizona PIRG Education Fund, an advocacy group, called on the authority to be more open about, for example, what companies it will give subsidies to and how much.

The bulk of the $35 million a year the authority gets from taxpayers is for a $25 million annual “deal-closing fund” for efforts, such as road improvements, that could be used to persuade a company to choose Arizona over another location.

The authority’s permanent board, appointed in July by Gov. Jan Brewer, adopted a set of policies Tuesday that spell out how the fund will be used, as well as ethics guidelines, and policies governing the staff of about 50.

Rounds and Phoenix economist Alan Maguire have been selected to look over every deal-closing expense and make sure it is necessary to really keep a company from locating somewhere else.