Tim Steller: Need for TREO, or something like it, will remain

2013-02-06T00:00:00Z 2013-02-06T09:25:55Z Tim Steller: Need for TREO, or something like it, will remainTim Steller Arizona Daily Star Arizona Daily Star
February 06, 2013 12:00 am  • 

The same forces that led to TREO's creation have been threatening to tear it apart.

Fragmentation, competition and duplication in local economic-development efforts were big factors in Tucson Regional Economic Opportunities' founding in 2005. All have been cropping up again in recent years, as local municipalities sought visible results for their small investments in TREO.

Marana left in 2008, demanding more for its $50,000 in annual funding. Tucson officials were working to cut their spending on TREO to $400,000 last year and funnel the saved money to their own economic development efforts.

Then in September, TREO, the regional economic-development group for the Tucson area, found a way to survive by eliminating funding from towns and cities. Now, the $2 million budget is about 77 percent funded by private business donations, with $450,000 coming from Pima County.

This is good, even though TREO has had plenty of critics, because if it were to fall apart now, we'd be rebuilding TREO from scratch again in a couple of years. It's our pattern in Tucson.

I started learning this 10 years ago, when I was new to the Star's business desk, covering the economic-development beat. I wrote a story, published Aug. 3, 2003, showing that more than 20 local entities - nonprofit groups, city departments and others - were trying to attract businesses, help ones here grow, or incubate new businesses.

Theoretically, the leading agency was the Greater Tucson Economic Council, which had existed since 1989, but its leadership was waning as other groups horned in.

That story helped inspire three players in local business - attorney Larry Hecker, venture capitalist Larry Aldrich and property-management executive Duff Hearon - to begin re-evaluating our economic development efforts, Hecker told me Monday. Two years later, in 2005, TREO existed and GTEC had disappeared.

That transition should teach us something: Whether we like how they're doing their job or not, the need for one local go-to group, selling the Tucson area to employers, is not going away.

GTEC had formed out of a moment of crisis in the late 1980s, when IBM announced it was closing its manufacturing operation here. We needed to figure out how to soak up thousands of laid-off workers.

GTEC took the lead in regional economic development matters, but eventually, parochial interests took hold. Each city formed its own economic development department to try to bring businesses within its own borders, and individual industry groups flourished.

"It worked great until it was perceived as no longer needed," said Hecker, who was one-time chairman of the group. "GTEC was fairly successful until good times, because the need to have a cohesive, common economic development strategy was not as great."

Now, TREO plays that role, funded mostly by annual dues of $25,000 to $50,000 from companies like Raytheon, UniSource and Cox Communications.

Functionally, what this means is that TREO is the group that companies - especially high-tech, export-oriented companies - contact when they're thinking of locating in the Tucson area. So do companies already here that are thinking of expanding, as Sargent Aerospace did in 2010.

TREO can then sell them on the area and pass on tips to towns and cities for more detailed come-ons. In fact, local municipalities are once again hiring economic-development staffers, but now that TREO is privately funded, cities no longer need to struggle with which agency to fund.

"The companies want a TREO," Vice President Laura Shaw said when I spoke with her and President Joe Snell at their downtown office Tuesday. "They want a one-stop shop."

Shaw and Snell are two of the seven - yes, just seven - TREO employees. This is not a flabby bureaucracy, though Snell has taken heat for making around $300,000 per year.

The salary may be arguable, as may the details of the group's performance year-to-year. But the need for such an entity will be there, whether we call it TREO or GTEC or form something new - again.

Contact reporter Tim Steller at 807-8427 or tsteller@azstarnet.com

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