News

Arizona Legislature Adjourns, Special Session Anticipated

The Arizona State Senate and House of Representatives have both adjourned sine die. After holding committees, caucus and floor action, the House made and passed the motion to adjourn the 54th Legislature, Second Regular Session on Thursday, May 21. After previously adjourning on May 8, the Senate returned on May 26 and reaffirmed the vote to adjourn. This killed two late introduction bills that the House discussed and voted on before adjourning its session: HB2912 COVID-19; civil liability; evidence; penalties and HB2913 supplemental appropriations; child care facilities. HB2912 would have limited enforcement actions and civil liability during the state of emergency declared by the Governor relating to the COVID-19 outbreak. HB2913 would have appropriated federal Child Care Development Fund monies to the Arizona Department of Economic Security for child care facilities and Arizona enrichment centers. We anticipate that there will likely be at least one special session in the coming months to address the budget and COVID-19 relief.

Posted in Legislative News |

CARES Act Funding in Arizona

Another topic being discussed by local business organizations is CARES Act funding. The U.S. Small Business Administration (SBA) is approving a second round of $310 billion in CARES Act Paycheck Protection Program (PPP) funding after running out of the first round of $349 billion in 13 days. Of Arizona’s 114,000 small businesses, 19,280 PPP loans totaling $4.8 billion were approved in round one (amounting to only 17 percent of small businesses), and, as of May 1, 43,915 round two Arizona loans have been approved for $3.7 billion. This puts Arizona in the top 10 states receiving PPP funding in round two, recovering from 45th in the first round, according to Kimber Lanning, Executive Director of Local First Arizona. Arizona improved its rank in the second round because an increased percentage of loans went through small lenders and community banks with smaller queues of applicants and a larger focus on smaller businesses. Arizona’s dedicated economic development community also valiantly increased efforts to educate Arizona businesses on how to get funding. The City of Phoenix expects two thirds of businesses with 30 employees or less won’t receive PPP or Economic Injury Disaster Loan funds provided under the CARES Act. For more information on this topic or COVID-19’s impact on Arizona’s economy, check out our full analysis here, the GPEC webinar, Greater Phoenix Chamber webinar, and City of Phoenix Policy Session.

Posted in Community News |

Mexico’s factory shutdowns strain U.S. production of critical supplies

In recent weeks, the Trump administration, a bipartisan group of 11 U.S. Senators, and U.S. business and industry groups — like the National Association of Manufacturers and U.S. Chamber of Commerce – have all urged Mexico to sync its guidance with the U.S. on what is considered an essential business during the pandemic. Canada and the U.S. have deemed many manufacturers of parts and materials across a variety of industries such as aerospace, automotive, and defense essential. But Mexico is only allowing companies to operate if they are directly involved in critical industries such as health care, food production or energy — and not if they supply materials to companies involved in those industries. So Mexican firms along the supply chain that make everything from cleaning products to ventilator motors have shut down. There is growing concern that Mexico’s response could hinder the U.S.’s ability to produce food, medical, and other critical goods needed during the coronavirus crisis, dampen plans for reopening the U.S. economy, and cost U.S. companies billions of dollars.

Mexico, which registered its first cases of coronavirus more than a month after the United States, plans to begin reopening its economy in some areas by May 17 and across the country on June 1. The country has not yielded to U.S. pressure to reopen shuttered factories sooner, saying it is prioritizing the health of its citizens and following advice of Mexican health officials. Mexican President Andrés Manuel López Obrador said he plans to slowly go back to normal manufacturing productivity only after the U.S. economy starts to reopen.

Posted in International News |

Republic Services is Committed to Serve

Republic Services provides an essential service. Most of their employees have remained on the frontlines during the COVID-19 global pandemic. “Committed to Serve” is their $20 million initiative to recognize their frontline employees and to help support small business customers that are the economic engines of local communities. Their goal is to support the economy at the local level – benefiting their small business customers and communities when they need it most. This includes: $3 million to the company’s charitable foundation to support the rebuilding of small businesses, $11 million in gift cards to frontline employees to support the local economy, and $6 million to local restaurants for meals for employees and their families.

Posted in Client News |

City of Phoenix Formulates Coronavirus Relief Plan

The City of Phoenix is now deciding how to spend $293 million that they have received from the federal government for COVID-19 relief. The focus has been on financial assistance for residents and small businesses. They have approved adding $5 million in additional funding to the small business grant program administered by the Phoenix IDA, which quickly ran out of funding due to a high need in the community. They additionally approved providing $6 million in grants to microbusinesses (with 5 or less employees) and sole proprietors. Finally, they approved $20 million in rent, mortgage and utility assistance for residents affected by COVID-19. The rest of the expenditures in the city’s Coronavirus Relief Fund plan are here in detail.

Posted in Community News |

Arizona Legislature Expected to Adjourn May 8, Governor Begins Re-Opening

As mentioned in our last update, the Arizona State Legislature was deciding on a plan regarding the remainder of the session. The official decision, confirmed in a press release by Senate President Karen Fann, is now to come in at 11am on Friday, May 8 and adjourn Sine Die. The House of Representatives plans to mirror the Senate’s action. They will also be coming in on May 8 at 1pm in order to adjourn sine die.

Additionally, Governor Doug Ducey held a press conference to address next steps as part of his Return Stronger plan for reopening Arizona. As mentioned last week during a previous press conference, the Governor anticipated that beginning May 12th restaurants will be able to reopen for dine-in services. Today he announced that restaurants will be opening a day early than anticipated, May 11th, for a phased-in approach. Beginning on Friday, May 8th, barbers and salons will be re-opened as well with certain restrictions in order to follow physical distance guidelines like limited capacity. The Governor alluded that gyms and shared pools will likely be the next step of reopening Arizona. In addition, the Governor issued a new executive order to require notification to the next of kin for any resident who has tested positive or been exposed to a COVID-positive individual in a long-term care facility. It will require disclosure of any previous or active COVID-19 cases in the facility to any approved applicant. We will follow up with you as soon as this executive order is posted.

Posted in Legislative News |

COVID-19’s Impact on the Arizona Economy

The Greater Phoenix Economic Council (GPEC), City of Phoenix, and Greater Phoenix Chamber of Commerce have recently put out valuable information about how COVID-19 – and federal funds allocated to address the crisis – have impacted Arizona’s economy. Below are some key insights from their analysis to help you stay in the know.

Economic Impact

The economic downturn created by coronavirus has dealt a huge blow to Arizona, erasing all of the state’s job gains since the last recession, making 36 percent of Arizona jobs vulnerable over the next three months (amounting to 1.1 million jobs), and potentially causing 20-25 percent of Phoenix’s small businesses to close by the time the crisis is over. Additionally, Arizona went from 4 percent unemployment pre-COVID-19 to more than 15 percent unemployment, with 560,000 Arizonans now unemployed. This is worse than during the Great Recession when Arizona unemployment peaked at 10.9 percent. No sector has gone untouched by the crisis, but here is how some of the top industries have been affected:

  • Unable to sustain themselves solely on takeout orders, Arizona’s restaurant industry has seen 70-90 percent job losses and sales down roughly 80 percent.
  • Leisure and hospitality, which accounts for 7 percent of Arizona’s GDP, has seen hotel occupancy rates drop 70 percent compared to the same time last year, which has resulted in massive layoffs.
  • When looking at Greater Phoenix commercial real estate rent payments, in April 90 percent of industrial tenants paid rent, 80 percent paid rent in office, and 40 percent in retail. This suggests the industrial market will recover relatively quickly; office will lag behind by about a year with vacancy rates going up and rental rates coming down; and there will be a major shift in the number of retail, restaurants, and event venues and how they do business.
  • Manufacturing has only seen 7-9 percent job losses overall, with a large portion of Arizona manufacturing tied to defense spending and federal contracts.
  • Healthcare, which represents 14 percent of employment in Arizona, has seen some practices shuttering or reducing hours as non-emergency services and elective surgeries went down, but the industry should recover quickly.
  • Home prices in the Phoenix metro went up in March due to a drop in both supply and demand. Phoenix may see a slight dip to a median price of $300,000 in April due to more lower-priced homes (likely short-term rentals) being listed for sale.
  • Some of the state’s largest single employers, Arizona universities get a large portion of their tuition revenue from out-of-state and international students. The University of Arizona projects 80-100 percent of international first-year students will not come to campus due to inability to get visas from closed embassies, and 20 percent of out-of-state students will not return.

Looking toward the future, a modest recovery is expected to begin in 2021 and Arizona can stay competitive as a business destination by increasing testing to boost investor confidence and providing a strong local government response to the crisis.

CARES Act Funding

The U.S. Small Business Administration (SBA) is approving a second round of $310 billion in CARES Act Paycheck Protection Program (PPP) funding after running out of the first round of $349 billion in 13 days. Of Arizona’s 114,000 small businesses, 19,280 PPP loans totaling $4.8 billion were approved in round one (amounting to only 17 percent of small businesses), and, as of May 1, 43,915 round two Arizona loans have been approved for $3.7 billion. This puts Arizona in the top 10 states receiving PPP funding in round two, recovering from 45th in the first round, according to Kimber Lanning, Executive Director of Local First Arizona. Arizona improved its rank in the second round because an increased percentage of loans went through small lenders and community banks with smaller queues of applicants and a larger focus on smaller businesses. Arizona’s dedicated economic development community also valiantly increased efforts to educate Arizona businesses on how to get funding. The City of Phoenix expects two thirds of businesses with 30 employees or less won’t receive PPP or Economic Injury Disaster Loan funds provided under the CARES Act.

For more information on the aforementioned topics, check out the GPEC webinar, Greater Phoenix Chamber webinar, and City of Phoenix Policy Session.

Posted in Community News |

Ballots for August Local Elections Finalized

The deadline to submit nomination petitions for Phoenix-metro area elections in August has passed, making it official which candidates have qualified to be on the ballot. The City of Tempe also held an election earlier this year in March, electing former Tempe City Councilman Corey Woods as the city’s new mayor and Doreen Garlid as a new councilwoman. The deadline to qualify for the City of Phoenix’s November election is July 6.

The city and town councils with contested seats in the August elections include:

  • Buckeye (District 1 council seats)
  • Carefree (all 6 at-large council seats)
  • Chandler (3 at-large council seats)
  • Gilbert (open mayor’s seat, 2 at-large council seats with 4-year terms and 1 at-large council seat with a 2-year term)
  • Glendale (mayor’s seat; Yucca District council seat)
  • Litchfield Park (3 at-large council seats)
  • Mesa (mayor’s seat, District 1, 2 and 3 council seats)
  • Scottsdale (open mayor’s seat and 3 at-large council seats)
  • Surprise (open District 2 council seat, District 3 and 5 council seats)
  • Tolleson (3 at-large council seats)

Two cities have candidates running unopposed for vacant mayor positions, with former Buckeye City Councilman Eric Orsborn poised to win in Buckeye and Tolleson Vice Mayor Juan Rodriguez similarly positioned in Tolleson. Click here for more information on the candidates.

Posted in Community News |

Helping the COVID-19 Cause

If you or your organization are interested in helping the national effort to combat the spread of COVID-19, FEMA has established a website (www.fema.gov/coronavirus/how-to-help) with more information. Examples for the private sector include:

  • To sell medical supplies or equipment to the federal government, please submit a price quote under the COVID-19 PPE and Medical Supplies Request for Quotation. Full details can be found in the solicitation.
  • If you have medical supplies or equipment to donate, please provide FEMA with details on what you are offering.
  • If you or someone you know represents a hospital or healthcare provider in need of medical supplies, please contact your state, local, tribal or territory department of public health and/or emergency management agency.
  • If you are interested in doing business with FEMA and supporting the response to COVID-19 with your company’s non-medical goods and/or services, please submit your inquiry to the Department of Homeland Security (DHS) Procurement Action Innovative Response Team (PAIR) team at <http://www.privatedaddy.com?q=awlQdUIEdnFOcRV2bhZbEjoRYmpqLXMBIGt8dGFiMFRQ_19>.
  • If you would like to meet with a federal agency regarding a vaccine, diagnostic, therapeutic or other medical device that you are developing for SARS-CoV-2 or COVID-19, please go to medicalcountermeasures.gov.

If you would like to assist small businesses locally in Arizona or are a small business in need of assistance, click on a city or business organization to access their business resources page: City of Phoenix, City of Tempe, City of Scottsdale, City of Mesa, Maricopa County, Arizona Commerce Authority, Arizona Small Business Association, Greater Phoenix Chamber of Commerce, Tuscon Metro Chamber of Commerce.

Posted in Community News |

Swire Coca Cola Donates Water to Navajo Nation

Swire Coca Cola, in coordination with the Arizona Department of Emergency and Military Affairs, delivered 30,000 liters of Dasani Water and two pallets of Coca-Cola beverages to the Navajo Nation this week. The community has been struggling with water shortages as residents shelter in place, due to many homes being located in remote areas without access to running water. Click here for the full release from the Governor’s office.

Posted in Client News, Community News |