Tempe becomes a blue job mecca in the red sea of Arizona

Lauren Kuby doesn’t mind being a poster child.

Kuby also doesn’t mind making Tempe a poster child for her politically liberal causes in an otherwise conservative Arizona — causes she said can be good for businesses.

A Tempe councilwoman and community engagement manager for Arizona State University’s Global Institute of Sustainability, Kuby is the lead progressive and a lightning rod on the council — and increasingly a leading liberal in a state dominated by Republicans and their business allies.

Among what could be considered more liberal city efforts, Kuby has led Tempe to:

  • Expand workplace and contracting anti-discrimination protections to the lesbian, gay, bisexual and transgender community
  • Restrict plastic grocery bags
  • Require employers to offer earned paid sick leave
  • Prohibit pet stores from selling dogs and cats from breeders feared to run puppy mills
  • Encourage employers to publicize equal pay for women’s efforts
  • Increase the city’s investment in renewable energy

Those efforts have put Kuby and Tempe at odds with some business interests worried about government mandates. They also have drawn action from state legislators looking to curb the powers cities have over businesses. “They said the sky was going to fall down,” said Kuby of business reactions to her efforts on paid sick leave, an issue now heading to the November ballot as part of a package for state voters to approve.

To Kuby and others, Tempe looks more like Austin, Texas — a politically progressive college town with substantial technology and creative business sectors in an otherwise conservative state.

The leftward move is not without its economic benefits. Donna Kennedy, Tempe’s economic development director, said the city’s progressive — and often controversial — issues have put Tempe on the map for companies that prioritize diversity, inclusion and sustainability.

“We’re getting out in front of some issues,” she said. Kennedy said Tempe’s politics are appealing to startups with younger executives and globally-minded workers. “Everybody wants to be inclusive,” she said.

A progressive approach
While Arizona has faced boycotts and lost conventions because of crackdowns on illegal immigrants, and almost lost the Super Bowl in 2015 over the Senate Bill 1062, better known as the religious freedom bill, Kennedy said Tempe’s “headlines” are appealing to progressive-minded businesses.

Kuby said she looks at what Austin and other college towns, such as Boulder, Colorado, are doing when it comes to diversity and sustainability and their ability to draw in businesses.

“Austin is definitely one of the cities we look at,” she said.

A progressive agenda can appeal to technology and creative businesses, big national companies and millennial workers. They tend to lean left on issues such as LGBT rights, transit and renewable energy.
State FarmNorthern Trust, GoDaddy and most recently John Hancock Investments have located new offices and big operations to Tempe.

Northern Trust executives specifically mentioned Tempe fitting into the company’s diversity policies as factoring into its decision. Tempe and Phoenix have extended discrimination protections to sexual orientation and gender identity.

Tempe also has ASU’s 83,000 students, the Metro light rail system and Mill Avenue’s restaurants and bars to tout to businesses. Those are often more important than politics.

One of the city’s biggest new employers is State Farm, which is consolidating as many as 8,000 employees at the Marina Heights development on Tempe Town Lake across from Sun Devil Stadium. State Farm spokeswoman Angela Thorpe said culture and diversity are important.

“At State Farm, we’re committed to an inclusive environment where all our associates and customers are treated with respect and dignity, and differences are valued all throughout the company,” she said.
But Thorpe said State Farm also likes its new location’s proximity to ASU and the light rail, and having major operations in a larger market such as the Phoenix region. State Farm has regional hubs in Atlanta and Dallas in addition to Tempe.

GoDaddy opened a new large operations center in Tempe in 2014. GoDaddy Senior Director of Global Real Estate Calvin Crowder said sustainability is a big focus at that center.

Other companies are hesitant to wade into the debate of LGBT issues. One veteran commercial real estate broker asked that a name and comments not be used after being asked about Tempe’s anti-discrimination protections being extended to LGBT persons. Several other companies were contacted for this story, but were leery about commenting on Tempe’s liberal policies.

Worries about mandates
Tempe Chamber of Commerce President and CEO Mary Ann Miller said her group is a long-time advocate of transit in Tempe. The chamber understands millennials, as well as creative and higher-wage companies, often favor some progressive policies.

Where the chamber departs from liberal city policies is when Tempe tries to mandate business practices or increase costs.“Why are they telling me how to run my business” is the dissenting refrain Miller said she hears from some businesses.
The fear is businesses have the luxury in a market such as Phoenix to move to a neighboring city such as Scottsdale, Mesa or Chandler if they are put off by something Tempe does, Miller said. “That’s our concern,” she said.

But Tempe is among the region’s fastest recovering areas since the recession. Class A office rents in north Tempe have gone from the $22-per-foot range between $35 and $40 per square foot. Of the 3.1 million square feet of office space under construction in the Valley at the end of 2015, 2.1 million were being built in Tempe, according to Cushman & Wakefield.

There also are several hotels and some large new office developments proposed. The Arizona Coyotes hockey team and ASU may partner on a new arena and development at Karsten Golf Course site east of the Tempe campus.

The northern part of Tempe also had more leasing activity last year than any other submarket.
​“Our real estate market is booming,” Kennedy said.

Courting a backlash
Some liberal pushes in Tempe and Phoenix have prompted business interests to go to the Republican-controlled Arizona Legislature to block those actions. The National Federation of Independent Business lobbied, with the owner of the Puppies ’N Love and Animal Kingdom, for a bill that takes regulation of pet stores away from cities. That came after Phoenix and Tempe, led by Kuby, looked to restrict retail pet sales from so-called puppy mills.

​NFIB Arizona Director Farrell Quinlan said the pet store bill has the state punishing and overseeing retailers and breeders. He said it’s better to have uniform state oversight rather than various local ordinances. Kuby and the League of Arizona Cities and Towns disagreed, arguing it should be a local matter.

The NAIOP Arizona real estate group took a similar stance in getting the Legislature to stop Phoenix from a proposal to mandate landlords and other commercial property owners to report their energy use. Retailers and grocery stores also fought a Tempe plan, again led by Kuby, to join cities such as Austin, Santa Monica, California, and Boulder in banning plastic bags.

Gov. Doug Ducey approved those bills restricting cities’ regulatory power over businesses.
Kuby said she believes it’s better to have cities decide such issues in part because city councils are more accessible to constituents than the Legislature, where measures often are passed with limited public input.

“We have a real public engagement process,” Kuby said. For issues such as paid sick leave, for example, the city met with various stakeholders and interested parties, Kuby said.
But Miller said business and other constituencies have been caught by surprise by some proposals coming out of city work groups on issues. Not all businesses are on board with liberal policies such as LGBT workplace protections.

Breanna Koski and Joanna Duka, owners of calligraphy and art studio Brush & Nib, filed a lawsuit in Maricopa County Superior Court in May challenging Phoenix’s LGBT anti-discrimination ordinance, saying they could be fined if they don’t serve same-sex customers. The pair specialize in wedding invitations and argue same-sex marriage goes against their Christian beliefs.
“Our rights are being violated,” said Jonathan Scruggs, an attorney with the Scottsdale-based Alliance Defending Freedom legal group representing the studio. Tempe’s LGBT protections have not been challenged, but could hinge on the Phoenix lawsuit.

Kennedy said she hasn’t come across a business prospect that has cited politics or public policy in not locating to Tempe.

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