The Upside of a Down The Upside of a Down Economy: THINK LOCALEconomy: THINK LOCAL

Thomas BarrThomas BarrLocal First ArizonaLocal First Arizona

Chicago?! Chicago?! But you live HERE now!But you live HERE now!

The small businesses in the La Grande Orange complex at 40th Street and

Campbell, an adaptive reuse project, generated $24 million in sales in 2013.

Money Does Not Spend the SameMoney Does Not Spend the Same

For every $100 For every $100 spent in a local spent in a local business, $45 business, $45 re-circulates and re-circulates and stays right Here stays right Here in Arizona.in Arizona.

For the same For the same $100 spent in $100 spent in any national any national chain, only $13 chain, only $13 remains.remains.

Local First ArizonaLocal First Arizona

2500+ locally owned businesses of all sizes 2500+ locally owned businesses of all sizes The largest local business coalition in North The largest local business coalition in North

AmericaAmerica An on-line directory that is searched more than An on-line directory that is searched more than

42,000 of times each month42,000 of times each month A BUY LOCAL campaignA BUY LOCAL campaign Both (c)6 and (c)3 statusBoth (c)6 and (c)3 status An advocacy group working on long-term An advocacy group working on long-term

economic developmenteconomic development Focused on ECONOMIC sustainabilityFocused on ECONOMIC sustainability Focused on business to business interaction and Focused on business to business interaction and

growing “deep wealth” in the regiongrowing “deep wealth” in the region 56,000 social media followers56,000 social media followers

Local First ProgramsLocal First ProgramsWeekendZona: Rural WeekendZona: Rural

Development and TourismDevelopment and TourismDevour Phoenix: Restaurant Devour Phoenix: Restaurant

CoalitionCoalitionShift Arizona: Shift the Way You Shift Arizona: Shift the Way You

Shop!Shop!Fuerza Local: Spanish Language Fuerza Local: Spanish Language

InitiativeInitiativeLocalist: New campaign to build Localist: New campaign to build

civic pride though individual civic pride though individual experiencesexperiences

4 Key Areas of Work4 Key Areas of Work

Land use, adaptive Land use, adaptive reuse, infillreuse, infill

ProcurementProcurement

Cultural TourismCultural Tourism

Economic Economic DevelopmentDevelopment

LFA members by Industry SectorLFA members by Industry Sector

What is Small What is Small Business?Business?

What is Local Business?What is Local Business?

Owners live here in Owners live here in Arizona at least 9 Arizona at least 9 months each yearmonths each year

The business is The business is privately held, and not privately held, and not publicly tradedpublicly traded

The majority of the The majority of the business is done here business is done here in Arizonain Arizona

The business is unique The business is unique to Arizonato Arizona

Small Business is the Backbone of Small Business is the Backbone of the Arizona Economythe Arizona Economy

In 2012, firms with zero to 99 employees comprised 94.7% of all firms in Arizona.

Source: US Census Bureau

In 2012, over $21 billion waspaid to employees of small businesses in Arizona

Source: US Census Bureau

If small business was laying off people at the same rate as big business we would have 950,000 fewer jobs in America today.

-Donovan Rypkema,

Place Economics, 2009

Why We Need to Support Locally Why We Need to Support Locally Owned BusinessesOwned Businesses

Methodology: Methodology: Looking at Net Gains for ArizonaLooking at Net Gains for Arizona

Good jobs vs “poor” jobsGood jobs vs “poor” jobs

Charitable contributionsCharitable contributions

Second-tier jobsSecond-tier jobs

Consider Long Term ImpactsConsider Long Term Impacts

E

Amount of Local Economic Activity Created per $1million in Spending

Chain Stores: $170,000

Independents: $450,000

-source: Civic Economics

Jobs per $10 Million in SalesJobs per $10 Million in Sales

Independent Retailers: 110Independent Retailers: 110

Chain Retailers: 50Chain Retailers: 50

Amazon: 14Amazon: 14

source: Civic Economics 2013source: Civic Economics 2013

Economic GardeningEconomic Gardening

The Secret to Job Growth The Secret to Job Growth in America: Think SMALLin America: Think SMALL

Harvard Business Review- 2010 Harvard Business Review- 2010

Of 15 randomly selected Of 15 randomly selected cities with 1 million or more cities with 1 million or more residents, 90% of Economic residents, 90% of Economic Development teams spent Development teams spent

90% or more of their budget 90% or more of their budget on big, non-local on big, non-local

businesses. businesses. -November 2010-November 2010

Procurement

$5,000 threshold moved to $50,000Open public bid only over $50,000+ contractsUnder $50,000 goes to database populated only with Arizona companies

Efairness

-Amazon kept $800 Million out of state coffers from 2011-2012

-Now required to collect sales tax in 28 states, including Arizona

-Still contributes to economic leakage, purchasing through Amazon doesn’t support 2nd tier jobs

-40,000+ mom and pop companies in Arizona, what would happen without them?

Adaptive Reuse

-Worked for 8 years to streamline a process for the City Of Phoenix

-Began pilot program in 2006, saved 4½ months and $16,000 for businesses to get certificates of occupancy

-80+ new businesses in central corridor

-Tempe is now working on a new initiative to mirror what Phoenix did

BENEFITS of GOING LOCAL

Grow JobsAdditional revenue re-circulatingAdditional tax revenue without raising taxesReduce economic leakageDiversify economy

Making the SHIFT means more Making the SHIFT means more jobs and more money circulating jobs and more money circulating

locally! Find 10% to SHIFT!locally! Find 10% to SHIFT!

A city of 750,000 people shifting 10% of A city of 750,000 people shifting 10% of their spending from national to locally- their spending from national to locally-

owned business creates:owned business creates:

-$137 million in new economic activity-$137 million in new economic activity-Over 1,600 new jobs-Over 1,600 new jobs

-Over $50 million in new wages-Over $50 million in new wages

Broken Social ContractsBroken Social Contracts

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