The Real Problem With TREO

Tim Steller is doing an excellent job at The Arizona Daily Star, having given our community commentary backed up with real intelligence and insight in stark contrast to the knee-jerk smart-assery of his predecessor.

On Wednesday, the Star ran a Steller piece about TREO, (Tucson Regional Economic Opportunities), Southern Arizona’s most prominent economic development entity. Steller is a guy who has been reporting about these things for years and brought that historical perspective to the column. He argues that TREO serves a useful purpose and that if it went away, it would soon be replaced by something just like it.

Steller is right on this point, but I think he misses a very basic problem with TREO and its predecessors such as GTEC.

Back when I was in the legislature, TREO did a little presentation for the Pima County delegation. They had a map which showed the locations of the businesses that they ostensibly helped bring to Tucson, each one marked with the number of people employed there. A few of these markers had numbers, but no names. I asked why these businesses were not named, and a TREO official said “Some of these businesses would prefer to remain under the radar.”

I found this a tad disturbing. A business that wants “to remain under the radar” is unlikely to give to local charities, to support arts and culture, or to sponsor a youth soccer team. In fact, the desire to remain anonymous implies a certain footloose attitude, and that they would not give a second thought to abandoning Tucson at a moment’s notice when a better opportunity arises elsewhere. This does not advance the goal of creating a sustainable economic future for Tucson, nor does it build a better community.

TREO has a reputation for having attracted outfits such as call centers which provide employees with low wages, few benefits and no future. Some have attributed this to a lack of effort or competence, but I would argue that this is a result of a shortage of imagination. When your only idea is to sell your town as a place where you can pay low wages and low taxes, you attract businesses who pay low wages and who are cranky about their obligations to local schools and the community in general. This should go without saying.

But there is a systemic issue that extends well beyond this, something that has doomed every such economic development entity. The conventional wisdom is that such things must be put in the hands of the business community, as they have some special wisdom about these issues which is necessary to success. This has proven, however, not to be the case. The business leaders that are on their board are prominent because they are already doing very well for themselves, and therefore have little motivation, or arguably a disincentive, to do anything that would substantially change Tucson’s economy. A truly ambitious plan for economic development would ultimately lead an upsetting of the apple cart and is thus a potential threat to their leadership.

The business community in Tucson is surprisingly insular. They are organized into what seems to be dozens of chambers, clubs, councils, and other such groups that seem to exist largely to provide opportunities for chairmanships. They are very good at networking and talking to each other, but do very little to reach out to anyone else. There is no attempt to understand what Tucson values as a community, and a dismissive, sometimes hostile, attitude toward its elected leadership. They clearly do not get this town, and have no desire to do so. Recent elections have shown that this attitude may be slowly changing, which is good news.

While some cynics say that economic development in Tucson is a hopeless task, it should be pointed out that some efforts in the region are working. The Downtown Tucson Partnership has managed to bring a corporate headquarters to Downtown, which is 1 more than TREO has attracted to Southern Arizona, and by all accounts, this business has operated as a responsible corporate citizen. They have also managed to attract some $120 million in investment, a remarkable achievement in the face of a down economy and a meddling legislature. While what they have been doing is by no means a model for the region as a whole, it shows that success is possible if we stop doing the same thing over and over again.

Meanwhile, TREO itself may well be doomed, but as Steller points out, it is likely to be replaced by something else. Of course, this replacement will face a similar end unless we bring actual new ideas to our economic development strategy. This will require a very different kind of organization than we have seen in TERO and its predecessors, one that actively involves our elected leadership and the community as a whole rather than a relatively small clique of utilities, auto dealers, and their golfing buddies.

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