Inside Oro Valley’s Economic Playbook: What’s Working, What’s Not, and What’s Next (Part 2)

The current economic development strategy is a departure from the past… it's a targeted approach

The current Oro Valley Comprehensive Economic Development Strategy (CEDS) represents a targeted approach, marking a clear departure from past economic strategies. It is a strategy of which LOVE and his readers have been critical. It is a strategy that was developed under the leadership of prior town manager, Mary Jacobs.

Though we have a new town manager, Jacobs' community and economic development strategy is still the prevailing strategy of the town is the prevailing strategy of the town. In fact, its implementation is a major objective of the town council's most recent strategic plan. This is the last year of its planning horizon, and a new or updated economic development plan will be required as the town also develops a 10-year general plan. 

The current CEDS seeks to achieve the following:

Attract Bioscience and Technology employers through partnerships and incentives
The CEDS takes a unique approach by targeting specific business sectors for employment growth, focusing on emerging industries such as electronic vehicle battery storage, think films technology,  optics, and destination marketing.  This aligns with previous efforts to collaborate with the University of Arizona on talent development while offering incentives to attract primary employers.  There has been success in this area with companies such as Sigma Tech, Polycharge, Nikon Research Corporation and Simpleview locating in Oro Valley.

Align residential development with workforce requirements
Aligning residential development with workforce needs is a new concept. When this was discussed with the Council, there was much debate about whether a bioscience and technology-focused workforce would prefer homeownership or apartment living. During those discussions, the council was repeatedly informed that younger workers, seen as the primary target group, often favor apartments over homes. A larger question however, was one that was never discussed.  

There is some question as to whether the employees of these companies want to live in Oro Valley. It's not that Oro Valley is not a great place to live. But let's face it. There really isn't any nightlife here and young people, especially those who are single, may well prefer to live in Tucson.

This CEDS strategy element may reflect an effort to justify increased apartment development.

Leverage natural and cultural resources to stimulate tourism
To boost retail and tourism, CEDS seeks to leverage Oro Valley’s natural and cultural resources, linking tourism with retail and the arts in a cohesive strategy. This broader approach contrasts with past efforts, which primarily emphasized sports and outdoor activities to attract visitors. The current strategy includes a broader range of community activities and seeks to create economic benefits for both residents and tourists. There are no metrics that we found can be used to determine if the strategy element is working.

Annex selectively to attract high-tech businesses
The CEDS employs a selective annexation approach, focusing on parcels that support economic development goals in technology and innovation. This approach includes infrastructure initiatives, such as dark fiber and utility expansions, to attract high-tech businesses. This strategy is a shift from past annexation strategies, which were more general, incorporating both residential and commercial areas to increase revenue. However,  the only annexation that has taken place in the past five years is the annexation of the Westward Look resort. This is an extension of a past strategy to annex areas that bring commercial business revenues to the town.

Streamline development approvals and update zoning codes for predictable business processes
The CEDS includes measures to streamline development approvals while retaining resident input. The strategy aims for zoning adjustments, form-based codes, and procedural modifications to improve efficiency across departments, with some updates already presented to the council. Unlike the previous Economic Expansion Zone (EEZ) approach, which was limited to Innovation Park, this CEDS element applies updates town-wide, aiming to maintain community standards while enhancing predictability for businesses. .

Is there an OV Factor when it comes to construction question?

Perhaps some streamlining is necessary. Although we hate to use anecdotal information, about a month ago a comment appeared on the social media platform Reddit. It was entitled: “Are Construction companies refusing to work in Oro Valley?” Two contractors—a home builder and a remodeling company—independently stated they avoid working in Oro Valley due to the building department’s inspectors, who allegedly demand costly requirements beyond the building codes. They claim these demands add thousands of dollars to project costs, which they hesitate to pass on to clients, resulting in lost sales. Contractors say they would need to overcharge to account for what they call the “OV factor,” making Oro Valley projects financially unviable.

Has CEDS Worked? 
The CEDS marked a significant departure from Oro Valley’s previous economic development plans. Past strategies focused on rooftops, shovel-ready lots, broad annexations for growth, and public safety as an economic driver. In their place, CEDS introduced a targeted, industry-focused approach and we have seen some success and attracting target sector businesses.

The questions now are: What tangible results of the CEDS strategy has Oro Valley experienced in the past five years in other areas? Second, should Oro Valley continue with this strategy or is it time to develop a new approach?  

What's next?

These are questions that will be answered as the Town begins to plot its financial future, a future without substantial bond funding, without outlandish federal giveaways, and [hopefully] without the luxury of seeing increases in sales taxes because of inflation. 

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Inside Oro Valley’s Economic Playbook: What’s Working, What’s Not, and What’s Next (Part 1)

Economic development is essential to the long term financial viability of Oro Valley 

On Thursday, Mayor Winfield will deliver a “State of the Town” address. We suspect that a key focus of his remarks will be on the town’s economic viability.

Oro Valley cannot simply raise sales taxes to boost revenue. This makes economic development and careful fiscal management essential to the town’s long-term financial health. Over time, Oro Valley must continue to revitalize its economy to sustain the revenue needed for its services.

Oro Valley has tried many things in the past to spur economic development. Some things have worked. And some have not.

Oro Valley has long pursued diverse strategies to drive economic development, in its efforts to sustain financial viability. From accelerating business approvals to expanding housing options, the town has explored multiple pathways to attract businesses and residents alike. Some approaches, like developing sports tourism and maintaining a strong public safety record, have shown tangible benefits.  Others, such as efforts to streamline planning or create shovel-ready business sites, have encountered challenges. Here's what's been tried over the years. Click the links to learn more about each.

1. Streamlining development approvals
The EEZ (Economic Expansion Zone)
This strategy aimed to speed up development in Innovation Park by simplifying the approval process for businesses in Innovation Park; notably removing neighborhood meetings and Planning and Zoning Commission reviews. Although intended to reduce delays, it hasn’t led to noticeable new developments in Innovation Park, suggesting limited effectiveness.
Integrating the Planning and Zoning Department with Economic Development
Former Town manager Mary Jacobs made an organizational change that attempted to allign planning and zoning and economic goals by placing the Planning and Zoning Department under the Economic Development Department. This has created a situation in which planners also become mediators between developers and residents.

2. Preparing infrastructure for building
Shovel-Ready Lots in Innovation Park
By preparing land for quick business setup, the town hoped to attract companies ready to establish themselves. Despite the investment, the initiative hasn’t drawn interest from businesses, partly because available lots don’t meet the scale or accessibility requirements many businesses desire, such as highway access or larger parcels. After all, in reality, more of all is 10 miles from interstate 10 whether you travel west or south.

3. Housing expansion
Increasing rooftops
Based on the idea that more housing would attract businesses to serve a larger population, this approach has expanded Oro Valley’s residential community but hasn’t attracted significant business diversity beyond healthcare and other personal services. This trend highlights that more rooftops alone do not meet business attraction goals.
Adding multifamily dwelling units (apartments)
A similar approach focused on increasing rental options to attract employees for potential high-paying jobs. However, demand is currently lukewarm; For instance, the Linda Vista rentals have had substantial vacancies, suggesting that the need for upscale apartments may be overestimated.

4. Tourism and sports attractions
Use Parks and Recreation facilities to attract visitors to the town
Oro Valley has invested in sports venues to attract visitors, and while there’s limited town data, activities like aquatics events do bring non-residents to the area. Sports facilities have had success in driving local economic activity, particularly in hospitality and dining sectors.
Make Oro Valley a destination or visitors
Recently, Oro Valley took over as its own Destination Marketing Organization, aiming to bring more tourists directly rather than relying on regional efforts. Early efforts, including partnerships for sports events and planning public art tours, are underway, but it’s too soon to assess the overall impact.

5. Expansion through annexation
Annex for growth
Oro Valley has used annexation to incorporate nearby areas, both residential and commercial. Commercial annexations bring tax revenue and support public services, while residential expansions provide initial fees but may add long-term service costs without corresponding revenue.

6. Developing a knowledge economy
Incubate businesses
Through a partnership with the University of Arizona, the Oro Valley Innovation Center serves as a business incubator. The aim is to foster startups that remain and grow within the community, though progress is gradual due to the incubation timeframe and risk of external acquisitions relocating businesses.

7. Public Safety as an economic incentive
Maintain strong public safety
Oro Valley’s reputation for safety is a draw for both residents and businesses, exemplified, years ago, by Rancho Vistoso’s willingness to be annexed for dedicated police coverage. Public safety remains a foundational element of Oro Valley’s appeal.

8. Digital promotion and policy adjustments
Build an award-winning website for businesses to explore the town
The “Choose Oro Valley” website serves as a digital face for the town’s economic efforts, recognized for excellence in design and functionality, aimed at attracting potential investors and residents. We have no idea if this generation significant leads. But it appears to be a good start.
Amend the General Plan to switch from residential to a commercial and back
Historically, General Plan amendments allowed for changes in land use. These are changes that allow the land to be used in a manner that was not approved by the voters. These changes are made in response to whatever the current market supposedly supports. The approach has shifted under different administrations, with fewer amendments in recent years, reflecting an adherence to the voter approved 2016 general plan.

Here's what's really worked

Over the past decade, Oro Valley has experienced notable population growth. Combined with significant inflation and the taxation of internet purchases, this population growth has increased town sales tax and state shared revenues. Yes. We think that many people moved here did so because of the Town's terrific public service presence.  We have not seen, however any significant new businesses that offer . What we have seen is something that should've been anticipated: An increase in medical and personal service businesses.

Tomorrow we take a look at Oro Valley's current community and economic development plan, a plan that was put in place five years ago. It is a bit different from what the Town did historically.

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Another Season Begins

Another season begins

September starts a new season for Oro Valley. The election is over. The council is returning to work after a month’s hiatus (like LOVE). A new council, which is the same as the current council, was ratified in a three minute special council meeting on August 24. They will be seated in November. They’re rested. We’re rested. So, let’s get going!

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Some pressing business in the queue

There are zoning changes and one general plan amendment pending. Public hearings have occurred on all of these. Some have occurred in recent weeks. Here’s a quick update of what is to come.

General Plan amendment and zoning change requests

• A rezoning  project and general plan amendment and for 85 to 90 rental homes of one or two stories to be located at the southeast corner of LaCholla and Tangerine. This property is currently in the general plan for neighborhood commercial and low density residential use. The change to high density residential use will require a five person council member approval, if it comes before council.  There’s lots that will happen before that. Lots of neighborhood opposition to this one.
• Avila Rancho Vistoso East is a rezoning project that would allow tiny rental homes located just north of Safeway on Rancho Vistoso Blvd.  Lots of neighborhood opposition to this one too. And there’s another of these, Avila Rancho Vistoso West, in the queue also. This would add 125 tiny rental homes. The property is located at the west corner of Tangerine and Rancho Vistoso Blvd.
• Oro Valley Church of the Nazarene wants to build a sports complex next to its Concordia and Linda Vista location. Yes. Lots of opposition to this one too. This is a rezoning project.
• Town West has yet to submit a revise plan for the Oro Valley Market Place rezoning. We expect this to be filed in the not too distant future. We don’t expect a lot of opposition to this as long as the applicant keeps the building height within a reasonable limit and maintains a reasonable building setback.

Conditional Use Permits

There are also conditional use permits being requested for…

• A storage and RV Storage facility in the mostly vacant, shovel-ready Mercardo Del Rio “Plaza”. This is behind the Rooney Ranch Shopping Center
• Another storage facility at the southeast corner of LaCholla and Lambert Lane
• And yet another one at La Canada and Tangerine
• A car wash in the Oro Valley Marketplace

Zoning code amendments

There are town staff recommended zoning code amendments that are working through the process and will eventually find their way to town council. Last night, for example, the Planning and Zoning Commission considered changes to the development review process; and, as a separate discussion,  changes to recreational requirements for residential and multi-family units.

New regulations

Tonight, the council will consider regulations regarding vacation and short term rentals. Among other things, the regulations may include a licensing requirement.

Water: “The Elephant In The Room”

Most of these projects have two things in common: When completed, they will use lots of water. They will add to traffic congestion. 

Town assurances aside, residents are concerned about their ability to get the water they want at a reasonable price to do the things they moved to Oro Valley to do; like have a pool or a nicely landscaped property. They should not be asked to squash their dreams so others can move here. 

The council’s position appears to be one one of ignoring the water issue entirely, relying on water conservation penalties and assurances by the town water administrator that the town has an assured water supply of 100 years. 

Congestion: “The Other Elephant In The Room” 

The council has never addressed traffic congestion. Oracle Road, from Tangerine south, will be a higher traffic corridor than it is today once the apartments planned along that road are built.  The Rancho Vistoso Blvd-Tangerine intersection will become much more congested. Residents who use Woodburne Avenue will be negatively impacted.

The future holds even more

Add to all of this, the continued buildout of the town’s park system… the golf courses’ irrigation… a possible community center rebuild… use of drinking water to water public parks… the need for a new police station… use of reclaimed water… A 2025 General Plan.

All of this is yet ahead.

LOVE will report as it sorts out.

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