Quarterly Report Fiscal Year 2011-2012 3rd Quarter · MVP Zone Gilbert Rd & Germann Rd 2 15,000 The...

City of Chandler

Economic Development Division

Quarterly Report Fiscal Year 2011-2012 3rd Quarter

INDEX

Table of Contents INTRODUCTION .............................................................................................. 3

ECONOMIC DEVELOPMENT OUTLOOK .................................................... 5

ECONOMIC TRENDS ..................................................................................... 7

RETAIL ............................................................................................................ 10

INDUSTRIAL/OFFICE DEVELOPMENT ....................................................... 13

TOURISM ........................................................................................................ 17

2 Economic Development Division May 14, 2014

INTRODUCTION

Economic development activity continued on a positive trend during the third quarter. For the quarter ending March 31, 2012, Economic Development staff combined efforts identified 6,417 leads and 20 prospects, representing an estimated 463 jobs, occupying approximately 457,336 square feet of space and $4.5 million in capital investments. 3rd Quarter Combined Efforts

Retail Industrial/Office Tourism Total Leads 16 41 6,360 6,417 Prospects 13 7 20 Jobs 48 415 463 Square Footage 50,280 462,856 513,136 Capital Investment $213,225,000 $213,225,000

Retail: During the third quarter, Economic Development Retail staff continues to work with developers, brokers, and shopping center owners on major retail developments, while tracking all existing retail centers and tenants, including those projects under construction or planned. Staff continues to work with clients by keeping track of when the construction permits are reviewed and issued. For Q3, Retail staff participated in the following activities: Activity Location Date ICSC Southwest Idea Exchange Phoenix, AZ February 22, 2012 For Q3, Industrial/Office staff participated in the following activities: Activity Location Date Vibrant Phoenix Chandler, AZ March 6, 2012 Western States Bank Annual Meeting Tucson, AZ March 29, 2012 Science & Technology Festival Chandler, AZ February 16-18, 2012 Word Camp Chandler, AZ February 26-27, 2012 Tourism: Tourism staff conducted the following trade and media activities for Q3: Activity Location Date Pennsylvania Sales Mission Greater Philadelphia and

Harrisburg, PA January 9-14, 2012

AOT LA Media Marketplace Los Angeles, CA January 24, 2012 LA Travel and Adventure Show

Los Angeles, CA January 24-27, 2012

Sunny Arizona Media FAM Chandler, Tempe, Mesa, Apache Junction

February 16-19, 2012

WACVB Tech Conference Pasadena, CA March 28-30, 2012


INTRODUCTION In addition to trade and media activities and travel, staff operates the City of Chandler Local Bites; a unique list of restaurants that supports Chandler’s one-of-a-kind dining experiences whether they are independently owned or extraordinarily unique in the market. Downtown: Economic Development Downtown Redevelopment staff continues to work with the merchants to collaborate in advertising and promoting business in Downtown Chandler. Staff coordinated efforts with the Downtown Chandler Community Partnership (DCCP), Arts Commission, Façade Grants, Site 8 Parking, Urban Gardening and various Special Events. Disclaimer: Content is intended to provide general information to the public and every effort has been taken to ensure that the information is accurate. Data is submitted subject to the possibility of errors, omissions and changes, but is obtained from sources and/or formulas deemed reliable.


ECONOMIC DEVELOPMENT OUTLOOK

Locating and expanding quality industrial, commercial, retail, and small business opportunities throughout the City of Chandler and Downtown Chandler are of great importance to Chandler’s future economic impact and it is essential to the City of Chandler’s estimated population of 239,042 citizens and approximated 95,559 housing units located in the City’s borders as of March1, 2012. Economic Development personnel continually update economic data, and demographic and development trends to maintain current information to better assist clients with their search for potential development opportunities. The information also aids Economic Development staff in identifying areas of opportunity and specific gaps, in targeting retail markets and linkages to key census information, which assists in presenting available sites.

200 95 48

223

610

415

10110210310410510610710810

Q1 Q2 Q3

Jobs Created FY 11-12

Industrial/Office Jobs

Retail Jobs


99,866 85,435 50,280

51,179

237,497

462,856

0

100,000

200,000

300,000

400,000

500,000

600,000

Q1 Q2 Q3

Square Footage FY 11-12

Industrial/Office S.F.

Retail S.F.

ECONOMIC DEVELOPMENT OUTLOOK The economic vitality of the City of Chandler relies on job growth and demographic factors.

The influx of educated workers, sustainable increases in population, higher education choices and a pro-business record, lay the groundwork for healthy job creation and employment opportunities.

Q1 Population 237,776 237,926 238,041

Jul. Aug Sep

Q2 Population 238,199 238,319 238,451

Oct Nov Dec

Q3 Population 238,807 238,922 239,042

Jan Feb Mar

Source: City of Chandler Planning Division March 1, 2012

Population Growth

Source: City of Chandler Planning Division

Source: City of Chandler, Sales Tax & Licenses


ECONOMIC TRENDS According to the Arizona Department of Commerce, by the end of Q3, the City of Chandler’s average unemployment rate is 6.3% while the City of Phoenix has an 8.1% unemployment rate and the state of Arizona has an 8.5% unemployment rate.

Jan Feb Mar

Q3

3rd Quarter Unemployment Rate FY 11-12

Arizona

Phoenix

Chandler

Source: Arizona Department of Commerce

July Aug Sep Oct Nov Dec

Q1 Q2

1st & 2nd Quarter Unemployment Rate FY 11-12

Arizona

Phoenix

Chandler

Source: Arizona Department of Commerce Source: Arizona Department of Commerce


ECONOMIC TRENDS

Employment by Occupation Data identifies and analyzes total employee counts per establishment within various industries.

The City of Chandler employed citizens numbers show a steady increase according to statistics obtained from the Arizona Department of Commerce.

Q3 Jan. 121,946

Q3 Feb. 123,282

Q3 Mar. 123,701

Chandler's Employment Numbers FY 11-12

Source: Arizona Department of Commerce


Employment By Occupation FY 11-12

Service Occupation

Farming, Forestry and Fishing

Managerial and Professional Service

Production, Transport, Material Moving

Technical Sales-Administrative Support

Construction, Extraction, MaintenanceSource: Claritas

Economic Trends

During the third quarter, the number of employed citizens shows a slight decrease for the City of Chandler and the state. According to the Arizona Department of Commerce, Since last quarter, the City of Chandler loss an average of 317 jobs to its 123,294 total from the previous quarter; a 0.26% decrease.

121,512

121,817

122,812

123,063

123,392

123,426

121,946

123,282

123,701

2,720,808

2,728,413

2,749,336

2,753,020

2,757,712

2,750,082

2,718,318

2,747,198

2,755,766

5,000 50,000 500,000 5,000,000

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Q1

Q2

Q3

Employment Comparison: Chandler vs. Arizona

FY 11-12 Arizona

Chandler


RETAIL Economic Development Retail staff located three new companies that included a restaurant, physical therapy specialty and a furniture store to the City of Chandler.

Specific Q3 Retail Activities:

1. Ideal Rehabilitaion Ideal Physical Therapy is an outpatient physical therapy company that provides restorative and professional patient care services through a holistic approach. Their primary goal is to improve patients’ quality of life through the application of rehabilitative and restorative services. These techniques are used to achieve maximal adaptation, function, and independence. The specific modalities utilized are based upon a patient’s individual rehabilitation prognosis and specific patient goals.

2. Pruitt’s For 60 years M.D. Pruitt’s has offered quality name brand furnishings at their location in Phoenix, AZ. This family run business has grown from a small garage operation to an 80,000 square foot home furnishings superstore in Phoenix, AZ and a second 35,000 square foot showroom in Chandler, AZ.

3. Jolie’s Place

Jolie’s Place is a local neighborhood Bar and Grill where the food is made to order, and kids are welcome until 9:00 pm. Joilie’s Place offers happy hour, karaoke, live trivia and bands.

Q 1 Q 2 Q 3

Retail Leads & Prospects FY 11-12

Prospects

Leads


RETAIL

Reta

il NAME LOCATION JOBS S.F.

1st Quarter Locates Culver's Loop 101 & Ray Road 20 3,000 Arco AM/PM Arizona Ave & Chandler Blvd 5 3,000 Wendy's Arizona Ave & Ocotillo Rd 10 4,000 MVP Zone Gilbert Rd & Germann Rd 2 15,000 The Sushi Room Dobson Rd & Queen Creek Rd 10 2,231 Uno Stop Laundromat Arizona Ave & Galveston Rod 2 6,400 Hobby Lobby Loop 101 & Chandler Blvd 4 4,762 Freddy's Frozen Custard Loop 101 & Frye Rd 120 55,175 Jimmy Johns Loop 101 & Chandler Blvd 7 4,098

2nd Quarter Locates Rudy's BBQ 54th St & Chandler Blvd 20 7,297 Five Guys Burgers Arizona Ave & Ocotillo 20 1,355 Ahwatukee Foothills Prep School (Reuse) Kyren Rd & Ray Rd 25 36,743 You Fit Alma School & Chandler Heights 10 18,102 Can't Stop Smokin BBQ 54th St & Chandler Blvd 10 5,000 Planet Fitness Arizona Ave & Loop 202 10 16,938

3rd Quarter Locates Ideal Rehabilitation Dobson Rd & Frye Rd 12 6,200 Pruitt’s Alma School Rd and Ray Rd 26 38,000 Jolie’s Place Arizona Ave and Warner Rd 10 6,080

The reuse of 38,000 square feet of a former Albertson’s at Alma School and Ray by Pruitt’s Furniture was a positive sign for this intersection. Economic Development and job creation accompany one another and job creation offers ways to advance the economic security of the city’s population. Staff efforts in this quarter produced 48 new jobs and occupied 50,280 square feet of retail space. By the end of the 3rd quarter, staffs combined efforts created 343 new jobs and occupied 235,581 square feet of retail space.


RETAIL

200

95

48

Q1 Q2 Q3

Retail Total Jobs Created FY 11-12

99,866

85,435 50,280

Q1 Q2 Q3

Retail Total Square Feet FY 11-12


INDUSTRIAL & OFFICE Economic Development Industrial and Office staff efforts located five new companies to the City of Chandler with a wide range of office and industrial retention and expansion sites.

Specific Q3 Industrial/Office Activities:

1. Triumph Group, Inc. Triumph Group, Inc., headquartered in Berwyn, Pennsylvania, is a global leader in manufacturing and overhauling aerospace structures, systems and components. Operating in 64 locations worldwide, Triumph designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerostructures, aircraft components, accessories, subassemblies and systems.

2. CyrusOne CyrusOne has built and operated data centers for over ten years. CyrusOne's first data center was built in Houston, Texas, in 2001. As an owner, operator, and developer of enterprise-class, carrier-neutral data center properties, CyrusOne specializes in highly reliable enterprise data center colocation engineering facilities with the highest power redundancy (2N architecture) and power-density infrastructure required to deliver excellent availability. Headquartered in Carrollton, Texas, CyrusOne operates more than two dozen enterprise data centers across three continents (US, Asia, and Europe) and numerous markets – Austin, Chicago, Cincinnati, Dallas, Houston, Chandler, San Antonio, London, and Singapore.

Q 1 Q 2 Q 3

Industrial & Office Leads & Prospects FY 11-12

Prospects

Leads


INDUSTRIAL & OFFICE

3. NextFort NextFort provides software products to monitor activity on virtual and physical networks. Headquartered in Galway, Ireland, NextFort was established in 2002 and has built up a global customer base in the enterprise, education, and government sectors.

4. Unisource Worldwide Inc. Unisource Worldwide, Inc. (Unisource) helps enterprise-level companies improve bottom-line performance by providing innovative, sustainable, highly efficient solutions across the life cycle of core business operations, including product packaging and fulfillment, paper and print management, general supply chain and logistics, and facility solutions.

Unisource has offices and operations in key locations around the world, and is currently ranked as one of the largest privately held companies in the United States.

5. Chandler Regional Medical Center Chandler Regional embarked on the addition of a new patient tower. Construction began on the five-story inpatient tower in December, 2011, with anticipated completion in October, 2014. The five-story tower will add 96 beds, which will expand the capacity of the emergency services medical-surgical unit, add 32 intensive care rooms, six additional operating suites, and chapel.

Job creation offers ways to advance the economic security of the city’s population while capital investment is a major planning tool in which needed improvements to the City's facilities and infrastructure are identified.

Indu

stri

al/O

ffice

NAME LOCATION JOBS S.F. CAPITAL INVESTMENT

1st Quarter National Association Sports Medicine Santan Fwy. & Cooper 40 14,300 $715,000

Soilsworks (Retention) Santan Fwy. & Cooper 53 10,708 $525,000 Levementum (Expansion) Downtown Chandler 40 10,500 $375,500 Dunkin Donuts (Commercial) McClintock & Chandler 30 500 $900,500 Serious Integrated Innovation Incubator 4 500 $0 Amkor Innovation Incubator 15 2,500 $0 BCR Diagnostics Innovation Incubator 5 1,014 $0 NativasMax Innovation Incubator 1 125 $0 Toyko Electron (Retention) Frye & Price 35 11,032 $300,000


INDUSTRIAL & OFFICE

Indu

stri

al/O

ffice


2nd Quarter Ports of America Downtown Chandler 200 66,000 $6,500,000 Garmin (Expansion) Juniper & Galveston 30 6,625 $298,000 International Trading Systems Arizona & Elliot 170 57,026 $1,372,220

Transpac Aviation Academy Ryan & McQueen 10 3,846 $150,000

Phoenix Packaging Arizona & McQueen 200 10,400 $104,000

Indu

stri

al/O

ffice


3rd Quarter Triumph Group, Inc. Chandler & 56th 120 79,163 $6,500,000 Cyrus One Price & Germann 50 188,620 $180,620,000 NextFort Price & Germann 25 126,673 $25,000,000 Unisource Germann & 202 Frwy. 20 6,400 $980,000 Chandler Regional Medical Center Tower Dobson & Frye 200 6,200 $125,000

223

610

415

0

100

200

300

400

500

600

700In this quarter, Chandler Economic Development staff efforts produced 415 new jobs.


INDUSTRIAL & OFFICE

At the end of the 3rd quarter, staff combined efforts created 1,248 new jobs, occupied approximately 751,532 square feet of industrial and office space and secured $225.0 million in capital investment.

Q1 Q2 Q3

$2,516,000 $9,320,220 $213,225,000

Capital Investment FY 11-12

51,179

237,497

462,856

Q1 Q2 Q30

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Industrial/Office Total Sqare Feet FY 11-12

In Q3, staff efforts occupied approximately 462,856 square feet of industrial and office space, in addition to a projected capital investment of $213.2 million.


TOURISM During the third quarter, the metro-Phoenix tourism market experienced a soft January and February, but March was particularly strong in all Phoenix metro markets, which ultimately saved the quarter. It is worth noting that when comparing this quarter to last year, in January 2011, there was a BCS event, which added compression to the area and the January and February weather in most of the northeast and Midwest was particularly chilly.

This year, the weather was unseasonably warm with many traditionally cold states experiencing mild spring weather and with temperatures that were often warmer than the Valley of the Sun. In addition, the cost of living, airline fees, and fuel prices continue to rise. In this quarter, Chandler experienced a slight decline in hotel occupancy, 1.2% lower than the same quarter in 2011 as compared to the state of Arizona average occupancy, which was only .7% lower than in the same quarter in 2011 for a state average occupancy of 64.5%. Chandler’s ADR increased 4% as compared to the state of Arizona average ADR increase of 3.2%. However, Chandler’s revenue per available increased to $80.99 representing a 2.3% increase as compared to the state average of 2.5%.

The hotel industry in Metro-Phoenix Valley continues to struggle with ADR growth as many operators continue to offer price-conscious travelers low room rates as an incentive for booking thereby trading occupancy at the expense of room rate. This is the driver behind the growth in RevPar. While year to date continued growth in the Valley’s hospitality industry is apparent, the Valley continues to lag behind the rest of the nation for ADR growth. In addition, the Metro-Phoenix Valley resort community has strengthened their average room rate and the market has seen a greater degree of price difference between destination resorts and select service hotel room rates.

In Chandler, much of the substantial growth in hotel occupancy continues to be attributed to the increased business travel prompted by the expansion of Intel - currently the world’s second largest private development.

Smith Travel Research, Inc. (STR) has developed the specific Q3 Chandler and metro Phoenix hotel industry occupancy, average daily rate (ADR), and revenue per available room (RevPar) as a custom set for the Chandler market that are represented in the following charts.


TOURISM

10.0%

30.0%

50.0%

70.0%

90.0%

Q1 Q2 Q3

Chandler Hotel Occupancy Rate FY 2011-2012

10%

30%

50%

70%

90%

110%

Q1 Q2 Q3

$77.16 $88.61 $106.80

Chandler Hotel ADR FY 11-12

10%

30%

50%

70%

90%

110%

Q1 Q2 Q3

$45.06 $55.90 $80.99

Chandler Hotel RevPar FY 11-12


TOURISM

Metro Phoenix Comparison (FY 11-12)

Q1 Q2 Q3

Occupancy 58.4% 62.9% 75.8% Occupancy 48.3% 55.2% 71.7% Average Daily Rate $77.16 $88.61 $106.80 Chandler

Average Daily Rate $81.79 $102.28 $128.22 Metro Phoenix Revenue per available room $45.06 $55.90 $80.99

Revenue per available room $39.49 $56.69 $91.94

Tourism staff generated a combined 13,148 leads by the end of this quarter. Tourism staff also maintains the tourism website, www.visitchandler.com that is featured in each advertisement, brochure, and press release and utilized at trade shows. Staff works with the Chandler Local Bites website, which is a guide to unique and local Chandler eateries & drinks for residents looking for great places to eat or take visitors. Additional information can be obtained on the website, www.Chandlerlocalbites.com or at select locations, local restaurants, hotels, City facilities, and visitor’s bureaus.

Q1 Q2 Q3


http://www.visitchandler.com/

http://www.chandlerlocalbites.com/

Quarterly Report Fiscal Year 2011-2012 3rd Quarter · MVP Zone Gilbert Rd & Germann Rd 2 15,000 The...

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