Horizon, Host: Ted Simons

April 18, 2012


Host: Ted Simons

Economic Growth: Chandler & Intel


  • Chandler Mayor Jay Tibshraeny talks about the potential economic impact of Intel’s new $5 billion fabrication facility that’s currently being built in his city and what Chandler has done to position itself as a leading manufacturing hub for the state’s high tech industry.
Guests:
  • Jay Tibshraeny - Mayor, Chandler
Category: Business/Economy   |   Keywords: economic, growth, intel, chandler, mayor, ,

View Transcript
Ted Simons: In our continuing coverage of the valley's economic growth. We focus on Chandler's development for the high-tech manufacturing industry. It's a sector anchored by Intel, which is currently building a $5 billion manufacturing plant in Chandler. Joining us now to talk about the impact high-tech has on his city is Chandler Mayor Jay Tibshraeny. Thanks for joining us. What's the status of this thing?

Jay Tibshraeny: it's billion with a b. And it's under construction. It's a significant project. I think that sometimes we take it for granted when we have an Intel in our city or state, but there is a project of worldwide recognition. It is the second largest construction project in the world. The only project that was larger over last year has been the, the London Olympics.

Ted Simons: that bears repeating. Other than the Olympics, nowhere else in the world is something of this size going on.

Jay Tibshraeny: Nowhere. Just in chandler. $5 billion project. Just to get people an idea of the scope of the project, at any one time there is 3,000 or 4,000 construction workers on-site at any time. It's like a little city. There is, throughout the course of the project, there will be over 7,000 construction workers, different construction workers.

Ted Simons: Let's talk about the impact right now. With those construction workers, with the contractors. What are you seeing? It sounds like the sales tax revenues are up?

Jay Tibshraeny: Our revenues are up. The significance of the sales tax on the construction is, because there is construction and sales tax, for the city and for the state so those numbers are up significantly. And all the workers. There's not a day that I can't go downtown and see, I’m here, I came in from the east coast and I’m an ironworker. I am working at the Intel plant. I am staying here in your community. I am using your restaurants and your towns. A significant impact on the construction alone.

Ted Simons: The hotels? Doing very well?

Jay Tibshraeny: Yeah. They are. All of the sales tax related categories are doing well, and some of that's because the economy is better. A lot of that is because the Intel has brought a lot of people into the city.

Ted Simons: And does that fluctuate? There is a point that it goes to A, and then B and C and how do you see that working out here in the coming here's, I guess?

Jay Tibshraeny: well, that site is a 700-acre site so this is fab 42, to give folks an idea. We had fab 12. We had fab 22. We had fab 32. And now 42. So there's been a constant stream of construction activity in Chandler. Since 1998, Intel in Chandler spent 12 billion on construction, so we have had a stream of activity in our community. This particular project, when it's done, and it will be operational about a year and a half from now. You have the shell, and then you have all that finite equipment that goes in, and that's where 5 billion is, it's in that equipment and setting that up. When they are done, they will have 1,000 new permanent workers, high-paid salary workers at the plant. So, we're pretty that you said about that. So there is continuing thing. People are looking for houses so they can be close to the plant. And engineer types, high-paid types.

Ted Simons: As far as the city is concerned, what does this do to offset the property taxes? And to impact other areas of the economy?

Jay Tibshraeny: It helps. The revenues coming in have helped us to weather the recession. We were able to pay down bonds with one-time money. You can attribute that it Intel and other one-time funds. That helped us to maintain the property tax rate and with assessed values going down people will see property rate decrease, at least for the city portion of the property tax. So there is a lot of benefits. Plus Intel is such a good corporate citizen in our community and all they do in the schools and in the city and the nonprofits and the social media and very good corporate citizen.

Ted Simons: As a city leader you look at different businesses, and ways to get industry and different sectors if, you will. The high-tech sector, how does that differ in good things? Challenges city faces?

Jay Tibshraeny: It's a challenge. We have a lot of good businesses. Chandler has led the state in attracting jobs and industry, but this particular industry and the plant, itself, presents unique challenge as a city. The water and sewer alone on a project like this, is $200 million. The city and Intel has to bear the brunt of those costs putting those infrastructures in. And so, there is a real command on our staff. And on the city to make sure that we do it right, that Intel pays their fair share, but then just to implement it, put in 200 million of water and sewer, to serve that plant, is a major undertaking, so, it's very challenging. We are working with the legislature this year because when I say, talk about 200 million of, of infrastructure, the city, alone, can't undertake that, and besides, it's difficult for the company. We are working on bill that's going through the legislature that would help with infrastructure costs for major manufacturing facilities. Like this. It's Senate Bill 1442. It has worked its way through the House and the Senate and back in the Senate now.

Ted Simons: What response is that getting?

Jay Tibshraeny: Pretty good. It passed with good votes it, passed with good votes out of the House, and they have got some work to do, and they want to make sure that, that we address any concerns that the governor has before we send it up to then, but that would help with infrastructure related costs for major manufacturing facilities in the state. We need that if we are going to attract the Intels of the world.

Ted Simons: And for city like Chandler and for any, really, any municipality, can you be too dependent on one industry, one industry leader? Intel is not just a big gorilla out there, that's the big thing in the corner of the room. Can you be too dependent on that?

Jay Tibshraeny: I think a city could be, and we try to be very diverse, but it's so -- the size of the projects are so large, that there is always probably bit of a risk of that. So, we do continually try to diversify in chandler and have other types of sectors in our community. There is no question that that's big part of, of our, our industry base. And they have two plants in Arizona. they are both in Chandler. One on the west side, which does a significant, a couple hundred million a year in R and D work, research and development, on 170 acres. They are not built out, but the fab 42, where that is, they bought 700 acres in the 1990s when I was mayor the first time around. And they are building on that and they have a lot of room to expand. But, there will be expansion. So we have to find a good balancing act there.

Ted Simons: So the market is not so volatile that there are concerns somewhere down the road that some bumps in the road could be popping up?

Jay Tibshraeny: As a mayor and city leader, we always work about everything. It's a good worry to have. But nonetheless, it is worry. They employ 11,000 people in our city. Chandler is the fourth largest city in the state. And at one time, not too many years ago, that was about our entire population in Chandler. 11,000 people. 30, 35 years ago.

Ted Simons: Things are happening out there. It's good to get an entertainment. Good to see you.

Jay Tibshraeny: Nice to see you and thanks for having me.

Ted Simons: You bet.

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