Sun Corridor Inc. 2019

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SUCCESS

IN THE SOUTH 2019

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REGION IN Sun Corridor Inc. drives economic development and helps make Tucson a hot spot for technology and innovation By ERIN THORBURN

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here’s a reason why nationally-recognized companies such as Amazon, Caterpillar, Raytheon Missile Systems, Bombardier, GEICO, Homegoods, Hexagon Mining, and other powerhouses set their sights and sites on Tucson. How did this former seemingly small college town transform into a home for more than 1 million people, 160 new and expanding companies, and a dynamic, expanding downtown? In addition to the tireless economic development efforts and strategies of Sun Corridor Inc. and its board members and Chairman’s Circle, the collaboration of Tucson’s educational, government and private sectors has kicked Tucson’s growth into the highest gear in years — with no signs of stopping or even slowing down.

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N MOTION IMPACT OF SUN CORRIDOR INC. Sun Corridor Inc. data shows that the Tucson area continues to be a region in motion. Sun Corridor Inc.’s qualified projects are up 12 percent from last year and up 26 percent from two years ago. Site selectors see the value that Tucson and the region has to offer resulting in more businesses relocating and expanding here. This trend is expected to continue and see more companies like Caterpillar, Amazon, Banner Health, and Northwest Healthcare growing and expanding their presence in the region. • Tucson was recently named one of the fastest-growing tech metropolises in the U.S. This study, by The Oliver Wyman Forum, shows Tucson tied Austin with 33 percent tech job growth from 2007-2017. • Tucson and Southern Arizona are key players in this growth. Since 2015, 55 companies have announced relocations or expansions, representing 13,770 direct jobs, more than $1.5 billion in capital investment and a $19.2 billion economic impact over the next five years. • George Hammond, the director of Economic and Business Research Center at the UA’s Eller College of Management reports that the Tucson metro area saw a 1.5 percent increase in jobs in 2017 and is on pace this year to post the fastest job growth since 2006, before the Great Recession. • With the current unemployment rate in the Tucson metropolitan statistical area (MSA) at 4.5 percent, Tucson is able to provide the skilled workforce that companies need. • Since Sun Corridor Inc’s inception 13 years ago, the organization has seen 162 company successes, 48,000 jobs and $24.8 billion economic impact.

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INNOVATION DESTINATION: Sun Link, also known as the Tucson Streetcar, is a single-line streetcar system that connects riders to five of Tucson’s most unique districts. (Provided photo)

MOMENTUM BUILDS Tucson currently exemplifies Newton’s First Law: bodies in motion, stay in motion. “We are a region in motion,” says Sun Corridor Inc. President and CEO Joe Snell. “We’ve had a dramatic two-year turnaround that has involved a tremendous amount of behind-the-scenes work. The best times are ahead of us.” Snell’s assertion is an understatement. Economic development for Tucson has become the proverbial snowball that has amassed into a monolith for the entire Southern Arizona region. Since 2015, 55 companies have announced relocations or expansions in the region. Those moves represent 13,770 direct jobs, more than $1.5 billion in capital investment and $19.2 billion in economic impact over the next five years. What catalyst kicked Newton’s First Law into motion for Tucson? “Tucson has historically been filled with a lot of missed opportunity when it comes to the economy,” Snell says. “The main reason being, that we weren’t working collaboratively in years past. The turnaround for us was the great recession. When the recession hit, everything just stopped.” Not only stopped, according to Snell but devastated Tucson, driving unemployment to 11 percent, in addition to creating unprecedented commercial vacancies. 110

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“We had to look at things through a new lens,” Snell says. Under the leadership of Snell, the Sun Corridor Inc. Chairman’s Circle and board of directors established a three-pillar economic development strategy that focused on fostering relationships with education, government, and business leaders. “Education is critical to the development of talent,” Snell says. “A large majority of our board is comprised of leadership from the University of Arizona, Arizona State University, and Pima Community College.” Government relationships have dramatically improved, according to Sun Corridor Inc. Chair David Hutchens, president and CEO of UNS Energy Corp, Tucson Electric Power & UniSource Energy Services. UNITY PAYS OFF “I’ve been involved with Sun Corridor Inc. for over 10 years and have witnessed the transformation of Tucson’s government and municipalities,” Hutchens says. “It used to be that there was an ‘us versus them’ mentality. Now, everyone is collectively setting common economic development goals and pulling in the same direction.” The result of collaboration has been Southern Arizona’s mass attraction of new business builds and relocations.


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“Tucson is now being described as what Austin was about 10 years ago.” Fletcher McCusker, Sun Corridor Inc. Chairman’s Circle member, CEO of UAVenture Capital

David Hutchens

Fletcher McCusker

John Patterson

“Tucson is now being described as what Austin was about 10 years ago,” says Sun Corridor Chairman’s Circle member Fletcher McCusker, CEO of UAVenture Capital. “Typically, Tucson was not one of the top-five economic development contenders. Now, we see Tucson consistently mentioned because of companies like Amazon, HomeGoods, Comcast, and Caterpillar.” And, where markets like Denver used to be among the most prolific in tech job growth, Tucson has rivaled those industry hotbeds as one of the fastest-growing areas for technology. The Oliver Wyman Forum shows Tucson tied Austin with 33 percent tech job growth from 2007-2017. In addition to job growth and economic development in the tech sector, Tucson has shown tremendous growth and strength in the aerospace and defense sector, automotive industry (with a huge push and presence with autonomous vehicles), bioscience, healthcare, renewable and mining technology, and transportation and logistics. LAW OF ATTRACTION In addition to Newton’s First Law, Tucson exemplifies the law of attraction. With a critical mass already established in the previously mentioned industries, companies from across the nation can’t help but zero in on Tucson. “Raytheon is in the middle of a major expansion in Arizona,” explains Raytheon Missile Systems PR Director John Patterson. “Last summer, Raytheon executives, along with federal, state and local leaders, formally dedicated six new buildings at the company’s Tucson plant site.” According to Patterson, the $275 million, 18-month construction project will support many of the more than 2,000 workers the company plans to hire by 2021. 112

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Joe Snell

Similarly, Amazon’s new 855,000-square-foot distribution center will provide an estimated 1,500 full-time jobs for Tucson residents. And, while positive job growth and economic growth are major advantages to the presence of nationally-recognized companies such as Raytheon and Amazon, there are more benefits to consider. “Raytheon employees volunteer thousands of hours annually in Arizona classrooms, tutoring students in math and science,” Patterson says. “The company sponsors numerous outreach efforts to help spark student interest in science, technology, engineering and math. Raytheon also supports military veterans and their families through various programs.” While offering employees a career choice that enables them to receive tuition reimbursement for two years of community college, Amazon also strives to partner with local businesses and vendors. “In terms of day-to-day interaction, Amazon fulfillment centers partner with local vendors for T-shirts, gear, catering, construction, and more,” says Zeshan Kazmi, Amazon’s regional public relations manager for the Greater Los Angeles Area. “There are many different partnerships we can form with the local community.” GRAVITATIONAL FORCES In discussing the expansion of Tucson’s economic development, downtown Tuscon has — and continues to be — an integral focus. “Downtown Tucson has been the center of Tucson’s resurgence,” McCusker says. “Caterpillar just moved their headquarters downtown; we have a light rail; and real estate investment banks


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have collaboratively created 21 projects in downtown, partnering with the city and county.” The Caterpillar hub to which McCusker refers is for the company’s Surface Mining & Technology Division, which accepted Rio Nuevo’s offer to build a new building for its headquarters to be leased back to Caterpillar for a 25-year term. The 150,000-square-foot building has helped to create between 750 and 1,000 engineering, product development and support position jobs. The concerted efforts of Rio Nuevo’s Tax Increment Finance (TIF) District has also made several other downtown projects possible. A partnership with Bank of Tucson and development group Bourn Companies has yielded the five-story City

Park project, a retail, restaurant, office and entertainment building planned for downtown’s Congress Street at what is now the site of the U.S. headquarters of Hexagon Mining. Similar partnerships are adding a new home for the Tucson Roadrunners, new AC Hotel Tucson Downtown at Broadway Boulevard and Fifth Avenue and countless dining and entertainment options. “We made deliberate effort to collaborate to create a very sustainable effort of collaboration,” McCusker says, “and it’s been especially successful with inbound companies, which is Sun Corridor Inc.’s purpose.” For businesses ready to relocate, expand, or start a business in Tucson — now is the time — the welcome mat awaits.

RECENT ECONOMIC DEVELOPMENT SUCCESSES Amazon

Amazon.com, Inc. recently announced plans to open its first fulfillment center in Tucson, creating more than 1,500 full-time jobs with competitive hourly wages and a comprehensive benefits package.

Caterpillar Surface Mining & Technology

Caterpillar, the world’s leading manufacturer of construction and mining equipment, has relocated its Service Mining and Technology headquarters to Tucson. The company is expected to hire more than 650 employees. Economic impacts are estimated at $1.9 billion over 10 years.

Southern New Hampshire University announced in April its plans to open a new operations center in Tucson to better support its growing student body across the country. SNHU will hire approximately 100 staff members initially, with plans to hire up to 350 total new staff members in Tucson by 2021. The economic impact of the new Tucson SNHU Operations Center will be $218 million over the next 5 years.

Texas Instruments

GEICO is the second-largest private passenger automobile insurance company in the U.S. and is a leading employer in Tucson with 2,100 employees. The company will relocate to a larger, purpose constructed office complex and expand by 700 jobs.

Texas Instruments, a global semiconductor design and manufacturing company, is building a new facility in Tucson to accommodate their future needs. They anticipate moving into the new facility in the Williams Center by mid 2020. Texas Instruments plans to create 35 new electrical engineering positions at their Tucson facility. Also, Texas Instruments plans to invest $30 million in capital expenditures, which will create an economic impact of $67.8 million over the next five years.

Hexagon Mining

TuSimple

GEICO

Hexagon Mining, an information technology provider of planning, operations and safety solutions for the mining industry, announced the relocation and expansion of its Tucson, AZ-based North American headquarters to downtown Tucson. Hexagon Mining employs 140 people in Tucson and plans to add 120 jobs over the next five years.

Raytheon Missile Systems

Raytheon Missile Systems has selected Tucson/Pima County as the site for a significant expansion. The expansion represents the addition of nearly 2,000 new high-skilled, high-wage jobs and will result in an impact of several billion dollars being added to the regional economy over the next few years.

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TuSimple, a global self-driving truck solutions company, plans to expand its operations in Tucson, by adding 200 trucks to its autonomous fleet in 2019. With 500 trucks worldwide in 2019, TuSimple will be the world’s largest autonomous truck fleet. TuSimple will be adding 500 new jobs, which are primarily engineering and truck driver positions, along with other technical and administrative jobs. TuSimple’s expansion will create an economic impact of $1.1 billion over the next five years.


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PERFECT LANDING SPOT Tucson International Airport becomes a premier place for commercial business to take off

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By ERIN THORBURN

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n addition to serving as a significant transportation hub for Tucson, Tucson International Airport (TIA) is proving to be a valuable driver of economic development. While producing an impactful $7 billion annual economic impact, TIA continues to attract businesses near and far. With plenty of room to grow; an all-access infrastructure, including access to Interstate-19; a location just an hour or so from the Mexican border; and already home to competitive business sectors like aerospace and defense, TIA is Tucson’s premier place to park a business. “TIA plays a critical role in some of Southern Arizona’s largest business sectors,” says Lisa Lovallo, market vice president at Cox Communcations and a member of Sun Corridor Inc.’s Chairman’s Circle. “Our airport is home to one of the largest Air National Guard units in the U.S.. It is also a critical part of our aerospace and defense sector and Davis Monthan Air Force Base and Pima Community College’s workforce development programs. TIA is an important partner in Southern Arizona’s tourism and attractions business as well, with almost 3 million passengers choosing to fly through TIA annually.” A major component of Sun Corridor Inc.’s economic development efforts is to help highlight the existing presence of various industry occupants in the TIA Airport Employment Zone. Harsch Investment Properties, for example, acquired a 113,546-square-foot industrial building with an additional 15 acres of adjacent land for future development. The property is located just one mile north of Tucson International Airport and two miles west of Interstate-10. “My company is fairly new to the Tucson market,” says Bill Rodewald, Harsch Investment Properties’ senior vice president and a member of Sun Corridor Inc.’s Chairman’s Circle. “We AB | May - June 2019 117


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purchased our first industrial building four years ago. Because of the multi-tenant distribution product we sell, we fell in love with the TIA location.” In addition to the physical placement of Harsch Investment Properties, Rodewald has been equally pleased with the process of site selection and development. “We’ve never been in an environment that collaborates as successfully as Sun Corridor Inc., the City of Tucson and Pima County,” Rodewald says. “In Tucson, we felt that everyone is pulling on the same oar and it’s very exciting to us.” The Airport Employment Zone has also attracted companies such as Bombardier, Raytheon Missile Systems, Universal Avionics, and FedEx, among many others. “We’re always looking to attract new industries,” says Joe Snell, Sun Corridor Inc.’s president and CEO. “Commercial aerospace, maintenance and repair hubs and organizations, flight schools and MROs (maintenance, repair and operations) work well close to airports. We’re also really trying to take a visionary and bold approach in our focus on commercial development.” Snell spends a significant amount of time focusing on his time focusing on TIA as a transformative market. “We need to turn 118

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Lisa Lovallo

Bill Rodewald

this into a commercial economic driver and that’s what we’re working on full bore,” he says. “The future is very bright for Tucson and TIA,” Lovallo adds. “We have secured a $280 million runway safety enhancement grant from the federal government, which will improve our overall efficiency and safety. This large-scale project will be completed in 2022. In addition, TIA’s refreshed 10-year strategic plan will be completed this summer. We are focused on providing the best airport possible today and into the next decade.”


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FLYING It’s more than just magic driving Tucson’s economic growth and prosperity

By ERIN THORBURN

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hen it comes to driving Tucson’s growth, Sun Corridor Inc.’s leadership doesn’t simply sit back, relax and wait for the magic to happen. They make it happen. It’s understandable in light of the leadership that comprises the organization’s Chairman’s Circle and board of directors. Sun Corridor’s collegiate presidents, government representatives, CEOs and other notable business leaders propel Sun Corridor Inc.’s economic development — aggressively and collaboratively. From some of the most ambitious minds, strategies pour forth to invigorate and draw top industries to Tucson and Southern Arizona. No wallflowers Who makes up Sun Corridor Inc.’s leadership? They are David Hutchens, president and CEO of UNS Energy Corp, Tucson

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HIGH Electric Power & UniSource Energy Services; Bonnie Allin, Tucson Airport Authority’s president and CEO; Robert Robbins, University of Arizona’s president; Michael Crow, Arizona State University’s president; Fletcher McCusker, the CEO of UAVenture Capital; and a who’s who of Arizona thought leaders. They come from different backgrounds and from various industries, but what they all have in common is the drive to push Tucson’s “economic blueprint.” “The Chairman’s Circle isn’t comprised of wallflowers,” says Hutchens, Sun Corridor Inc.’s chair. “They all work for the good of the community. Partnerships are the most critical component of Sun Corridor Inc. As a collaborative community, it’s important for us to have representatives in education, government, business and the general public.” The results of this steadfast collaboration has not only developed Sun Corridor Inc.’s economic blueprint to facilitate

job growth and economic growth in Southern Arizona, but it’s also helped define and foster competitive industry targets. These economic development focal points include aerospace and defense, bioscience and diagnostics, transportation and logistics, and renewable and mining technology. Sun Corridor Inc. and the beanstalk Sun Corridor Inc. may not have actual magical properties, but in many ways the organization has become akin to Jack’s beanstalk — strong, reliable and leading to something grand and impressive. “When we have a specific skill set or specific workforce needed for a particular industry, we go after it and we do it with great success,” Hutchens says. “Workforce is always the No. 1 thing folks are looking for. The cluster of industries we’re targeting already has a critical mass here. People will move here because there are other aerospace, defense and bioscience jobs available.”

ECONOMY SOARS: Davis-Monthan Air Force Base is the fourth-largest employer in Pima County and the third-largest installation in air combat command, providing $1.5 billion in economic impact to Tucson’s economy.

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When Sun Corridor Inc.’s economic development crew realized that Tucson was competing with Ann Arbor, Mich., and Boulder, Colo., for Accelerate Diagnostics, they initially felt as if they were on the outside looking in, according to Sun Corridor President and CEO Joe Snell. “Accelerate Diagnostics needed a specific kind of ‘clean room,’ which we didn’t have at the time,” Snell says. “So, we built a clean room. It’s not always what’s off the shelf. We’re in the business of why we can — not why we can’t.” Accelerate Diagnostics is simply one example of Tucson staking claim on businesses seeking to relocate through creative vision. Another example is the establishment of technology and bioscience incubators, such as Oro Valley Innovation Labs. The 4,000 square feet of lab and office space is dedicated specifically for bioscience startups and is near Roche Tissue Diagnostics in Innovation Park. “We want to be the leaders in the fourth industrial revolution,” says UA President Robbins. “We have a new director at UA Tech Park and we are focusing our research efforts on what we’re really good at — technology, aerospace, health and engineering.” The UA Tech Park is as much a significant research entity to Tucson as it is an economic driver. Home to more than 40 companies and organizations, including Raytheon, UnitedHealth Group/OptumRx, and others, UA Tech Park generates $50 million annually in state and local taxes, with the average park employee’s annual wage set at $91,145. “The use of artificial intelligence in medicine is going to be massive,” adds Robbins. “Siemens, Philips and General Electric are spending millions on algorithms. That’s all going to be very good for economic development in the state.” As AI continues to become more mainstream, Tucson’s autonomous vehicle research and dominance continue. One particular exciting addition to this realm is TuSimple, a Chinese company that develops self-driving commercial trucks. “As a startup story, TuSimple’s is quite unique,” Hutchens says, “They’ve already had two groundbreakings in Tucson and are planning to add 500 jobs over the next two years.” Digging deep and flying high “Mining is and will continue to have a huge economic impact in Southern Arizona,” Hutchens says. “Caterpillar chose Tucson because of the mines.” Caterpillar isn’t the only one. Hexagon Mining, an information technology provider of planning, operations and safety solutions for the mining industry, also chose to establish roots in Tucson. The company’s new 26,000-square-foot facility will house 140 122

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EYE ON THE FUTURE: “We want to be the leaders in the fourth industrial revolution,” says Robert Robbins, the University of Arizona’s president. “We have a new director at UA Tech Park and we are focusing our research efforts on what we’re really good at — technology, aerospace, health and engineering.”

Hexagon Mining employees, with plans for an additional 120 jobs over the next five years. Aerospace, near space and defense, alongside mining will continue to drive the economy and high-wage employment opportunities for Southern Arizona. “It’s all about retaining our bases and remaining ready for the missions that we currently have and could have,” Hutchens says. “We make sure they have all the support from community, state and federal sources to get the funding they need.” Davis-Monthan Air Force Base, for example, is the fourth-largest employer in Pima County and the third-largest installation in air combat command, providing $1.5 billion to the local Tucson economy. “Space and sustainability science will emerge to lead our market in the future,” says McCusker. “Companies are looking to launch and build their own satellites. There’s also spacerecovery technology and other related spin-outs gaining traction. Raytheon has placed Tucson in a nice position to be viewed for our aerospace work.” All in all, Tucson seems to have it all, and not simply in terms of economic development success. “We have the people we need and we have the education,” Hutchens says. “Southern Arizona sells very well, and not simply from a talent perspective. It offers a beautiful quality of life, weather and recreation. We are a million-plus, but still feel like a small town.”


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SUN CORRIDOR INC. LEADERSHIP

Chair: David G, Hutchens, president and CEO, UNS Energy Corp, Tucson Electric Power & UniSource Energy Services Immediate past chair: Dennis R. Minano, managing director, CMM; vice president of public policy and chief environmental officer, General Motors (retired) Secretary/treasurer: Robert D. Ramirez, president and CEO, Vantage West Credit Union President and CEO: Joe Snell

CHAIRMAN’S CIRCLE Bonnie Allin, president and CEO, Tucson Airport Authority Sharon Bronson, Board of Supervisors, District 3, Pima County Michael Crow, president, Arizona State University Larry M. Goldberg, president, Banner – University Medicine Division Lee Lambert, chancellor and CEO, Pima Community College Taylor W. Lawrence, vice president, Raytheon Company; president, Raytheon Missile Systems Lisa Lovallo, market vice president, Southern Arizona, Cox Communications Fletcher McCusker, CEO, UAVenture Capital Ian McDowell, vice president and regional director, Tucson, Sundt Construction Judy Patrick, board director, CopperPoint Mutual Insurance Company

Jon Dudas, senior vice president and chief of staff, University of Arizona Michael Eastman, vice president, customer service strategy and operations, Tucson National Center of Excellence, Comcast Ali Farhang, partner and founder, Farhang & Medcoff Marc Fleischman, CEO, BeachFleischman Tom Florino, senior manager, economic development, Amazon Sarah Frost, CEO, Banner University Medicine Mike Groeger, vice president of commercial group and specialty sales, Blue Cross Blue Shield of Arizona

Mara Aspinall, CEO, Health Catalysts Groups Don Bourn, CEO, Bourn Companies Joseph Coyle, managing director, The Patrick Group 124

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Walter Richter, public affairs administrator, Southwest Gas Corporation

Jonathan Rothschild, mayor, City of Tucson

Nancy Johnson, CEO, El Rio Health

Jeffrey S. Rothstein, vice president and head of legal, Roche Tissue Diagnostics

Steve Lace, vice president, Royal Automotive Group & Lexus of Tucson

David Adame, president and CEO, Chicanos Por La Causa

Barbi Reuter, president and principal, Cushman & Wakefield | PICOR Commercial Real Estate Services

Mary Jacobs, town manager, Town of Oro Valley

Clinton Kuntz, CEO, MHC Healthcare

BOARD OF DIRECTORS

Chuck Potucek, city manager, City of Sierra Vista

Steven E. Rosenberg, publisher and owner, BizTucson

Robert C. Robbins, president, University of Arizona

Sandra Watson, president and CEO, Arizona Commerce Authority

Ricardo Pineda Albarran, Consul of Mexico, Consulate of Mexico in Tucson

Larry Hecker, (of counsel, Sun Corridor Inc.), managing member, Hecker

Judy Rich, president and CEO, TMC Healthcare

Anthony Smith, Board of Supervisors, District 4, Pinal County

Steve Odenkirk, Southern Arizona regional manager, Alliance Bank of Arizona

Randy Rogers, CEO, Tucson Association of REALTORS

William Kelley, CFO, Diamond Ventures

Jean Savage, vice president, Caterpillar Surface Mining & Technology Division

Tom Murphy, mayor, Town of Sahuarita

Guy Gunther, senior director, Central Region consumer markets, CenturyLink

Diane Quihuis, board of directors, The Industrial Development Authority of the County of Pima

Bill Rodewald, senior vice president and regional manager, Harsch Investment Properties

Farhad Moghimi, executive director, Pima Association of Governments/Regional Transportation Authority

Adriana Kong Romero, SVP, Tucson market president, Bank of America

Rob Lamb, COO, GLHN Architects & Engineers David Larson, president, BFL Construction Co. Clint Mabie, president and CEO, Community Foundation for Southern Arizona Xavier Manrique, senior vice president, Wells Fargo Bank Edmund Marquez, agency principal, Edmund Marquez Allstate Agency Enrique J. Marroquin, president, Hunt Mexico Kelle Maslyn, executive director, community relations, ASU Tucson Omar Mireles, president, HSL Properties Mark Mistler, CEO - Tucson and Southern Arizona, BBVA Compass

Mary Seely, lead human resources manager, Caterpillar Surface Mining & Technology Division Keri Silvyn, partner and owner, Lazarus, Silvyn and Bangs David Smallhouse, managing director, Miramar Ventures Kevin Stockton, market CEO, Northwest Healthcare James V. Stover, Medicaid president, Arizona Complete Health Guillermo Valencia, chairman, Greater Nogales and Santa Cruz County Port Authority Robert Walkup, honorary consul, South Korea in Arizona Josh Weiss, president and CEO, Hexagon Mining Steven G. Zylstra, president and CEO, Arizona Technology Council


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