In Arizona, some of the top business stories of 2016 stem from strong gains in such sectors as housing, defense and autos.
The economy, stupid — be it up, down, rising, declining, stable, flat or growing — still dominates any debate over the state of the nation and its myriad geopolitical entities nearly 2½ decades after the sound bite was first uttered during the 1992 presidential campaign.
In Arizona, some of the top business stories of 2016 stem from strong gains in such sectors as housing, defense and autos. But not all was rosy: Regulation and reregulation got in the way of a burgeoning arts district, and party animals contributed to the downfall of a once-promising online health insurer.
In no particular order, here are 10 of the top business stories of the year selected by The Republic‘s business staff:
Real estate rebounds
A strong year in real estate in Phoenix could get even stronger in 2017 if Realtor.com’s prediction is right that the Valley will be the No. 1 housing market in the U.S. In December, the real-estate website forecast that Valley home prices will climb 5.9 percent, and sales will jump by 7.2 percent in the coming year. That comes on top of an increase of $20,000 in average home-sale price to more than $235,000 during 2016. April was the area’s best month in a decade, as home sales jumped almost 8 percent from April 2015. Luxury homes were hot, too, including two sales over $11 million. At the same time, rents were increasing by 7 percent and apartment construction was responding. Investors had spent $4.5 billion in Valley apartment complexes through November.
Streetscout.com’s home valuation tool uses the most accurate real estate data in Arizona. What’s your home worth?
Raytheon adds jobs
Raytheon Co. said in November it will add about 2,000 jobs to its Tucson missile-making facility over the next five years. The Waltham, Mass.-based company will be expanding several of its missile lines, as well as hiring technology workers and those from other fields, such as finance, to add to its current staff in Tucson of more than 10,000. Taylor Lawrence, Raytheon Missile Systems president, said the city, Pima County, state and leaders such as U.S. Sen. John McCain were all helpful in the company’s decision to expand in Arizona.
Freeport stock doubles
Freeport-McMoRan began 2016 amid a slump that brought four consecutive quarters of losses to the Phoenix-based mining company, but the company has seen a substantial turnaround since then. The company agreed to about $6 billion in assets sales throughout the year, which will reduce its debt level. The stock started the year at less than $5 a share but has been above $10 a share since October.
Waymo in Chandler
Palo Alto, Calif.-based Alphabet Inc. brought its self-driving car program, now called Waymo, to Chandler and eventually to parts of neighboring cities, praising the region’s technology-friendly atmosphere as the catalyst for the tests. Recently, Gov. Doug Ducey rode in one of the vehicles and General Motors has also brought self-driving tests to Scottsdale. Then, facing registration regulations it disagreed with in California, Uber brought its small fleet of self-driving Volvo’s to Arizona.
Gov. Doug Ducey takes a ride in a Waymo self-driving car around downtown Chandler on Dec. 15, 2016. David Wallace/azcentral.com
Zenefits hits wall
Zenefits, an online health-insurance broker, ran into troubles that resulted in the elimination of many jobs in Tempe. The company once promised 1,300 jobs in Arizona, but after 80 job cuts were announced in the summer, it promised fewer than 400. The San Francisco company’s CEO quit in February amid disclosures of problems with several state regulators and reports of employees drinking and having sex in the California offices during working hours. Later that month, Zenefits laid off 160 workers in Arizona as part of cutbacks companywide.
Arizona formally matched its pre-recession employment levels in December 2015, though the news didn’t break until March of this year. The recovery closed a job hole that lasted eight years and lingered 19 months longer than the nation’s. The numerical milestone was a reminder of how severely Arizona was hit by the Great Recession and how unevenly it recovered. Only Nevada lost a greater share of its workers during the downturn than Arizona. The state’s Office of Employment and Population Statistics reported that as of November, the seasonally adjusted jobless rate had fallen 0.2 percent to 5 percent.
Arts district stumbles
Some owners of Roosevelt Row’s shops, restaurants and galleries in downtown Phoenix spent roughly two years designing a proposal to incorporate the arts corridor into a business improvement district, a designation that allows property owners to tax themselves to pay for various improvements. But less than two months after Phoenix approved parts of the plan, the Legislature blocked it with a bill signed by Gov. Doug Ducey to retroactively change the rules for how districts are formed. Those new rules pose significant barriers to forming the Roosevelt Row district as originally proposed. They shift the balance of power in the neighborhood and give several opposing landowners more control over its approval.
Downtown gets grocery
Downtown Phoenix will get its first grocery store after the city committed $18 million in incentives to the project. RED Development plans a Fry’s grocery store as part of a high-rise apartment, office and retail project. Phoenix would provide the company financial incentives as well as a long-term lease-to-purchase agreement for the city-owned land between Washington and Jefferson streets and First and Second streets.
The Phoenix City Council is considering a package of financial incentives worth millions for a downtown project that includes a high-rise apartment building, office space and a Fry’s grocery store. Wochit
Car factory on tap
A startup car company called Lucid Motors announced it will build a factory in Casa Grande with an estimated $5 million in cash and about $41 million in other incentives. Lucid of Menlo Park, Calif., is aiming to compete with electric-vehicle maker Tesla. Gov. Doug Ducey, Sonora Gov. Claudia Pavlovich and company executives said the assembly plant could bring up to 2,000 jobs and as much as $700 million in capital expenses over five years. Parts for the vehicles would be manufactured by suppliers in Sonora, Mexico.
Terminal 3 upgrades
Sky Harbor International Airport unveiled $150 million in upgrades at Terminal 3, including ticket counters, security, a desert garden and dog park. The terminal opened in 1979 and has been in need of upgrades. New restaurants are still a couple years away.