The next time you see several Sonora license plates in the parking lot of a Tucson store, you’re seeing your taxes being cut.

The Tucson area reaped $968.7 million in direct economic benefits from July 2007 through June 2008. That’s up from $280.2 million in 2001, according to a University of Arizona study released this week.

Dollars that Mexicans spend in Tucson boost our economy and are responsible for employing many Tucsonans.

Sales and other taxes paid by those shoppers are taxes that don’t have to be collected from the rest of us.

Many complain about the problems of living close to the international border. But there is a substantial upside.

Their spending more than triples since 2001

Ana Cota, Carlos Silva and their daughter, Carla Silva, 7, of Hermosillo, Son., arrive at Park Place mall, where they planned to shop for clothing and a large-screen television. The family makes the 4- to 5-hour trip to Tucson to shop about once a week.

Mexican visitors’ annual economic impact on the Tucson area has grown dramatically and is approaching the $1 billion mark, according to a University of Arizona study released last week.

“It’s a huge economic driver for us here in Tucson,” said Felipe Garcia, vice president of community affairs and Mexico marketing at the Metropolitan Tucson Convention & Visitors Bureau.

Metro Tucson reaped a $968.7 million direct economic benefit from Mexican tourists from July 2007 through June 2008, up 245 percent over the $280.2 million in 2001, according to “Mexican Visitors to Arizona: Visitor Characteristics and Economic Impacts 2007-2008.”

Pima County reaped the largest share of their economic impact in Arizona, with more than 36 percent of the $2.7 billion in statewide spending occurring here, the report said.

Carlos Silva, Ana Cota and their daughter, Carla Silva, 7, make the four- to five-hour drive from Hermosillo, Son., weekly to shop in Tucson.

Tucson offers a better selection of products than he can find at home, Silva said Sunday as the family prepared to enter Park Place, ranked in the study as the No. 2 shopping destination in Tucson, behind Tucson Mall.

The family’s favorite stores at the mall are Old Navy, Sears and Macy’s, he said. They also like to get to Tucson Mall, Best Buy, Wal-Mart and Target, he said.

Silva said he was looking for clothing for Carla and a large-screen television.

The family typically spends six to eight hours shopping per trip to Tucson, he said.

Carla said the trips are about more than shopping. The family had breakfast at IHOP to celebrate Mother’s Day before hitting the mall, she said.

And her mom would be getting a nice gift at the mall, Carla said.

About 65,000 Mexican residents on average came to Arizona each day to legally work, visit friends and relatives, shop and play in 2007-08, the study says.

That comes to 24 million visitors for the year, a 4.9 percent increase over the 2001 total of 22.9 million.

Each day, visitors from Mexico spent $7.3 million in Arizona stores, restaurants, hotels and other businesses, an increase of 213 percent from 2001.

“Over 5 percent of taxable sales in Pima County are attributed to the Mexican visitors,” Garcia, of the visitors bureau, said. “It’s really good for us.”

The study was prepared by Vera Pavlakovich-Kochi and Alberta H. Charney of the University of Arizona Eller College of Management’s Economic and Business Research Center for the Arizona Office of Tourism.

Mexican tourism “really plays a significant role,” Pavlakovich-Kochi said. “Spending has occurred when our regional economy shows signs of recession. It has really offset to a degree the effect of the declining regional economy.”

Mexican consumers seem to be more willing to spend during the current economic downturn than Americans, Garcia said.

“When we talk to our visitors, they don’t seem to have a lot of anxiety about the economic turmoil,” Garcia said.

“They don’t stop spending because of what they see and read. The Mexican consumer is more used to it, better prepared, and they know things happen. They say things are bad but we’ll get out of this.”

More staying overnight

Local efforts to boost Mexican visitors and spending have paid off, Garcia said.

Mexican visitors who stayed here overnight jumped from 4 percent in 2001 to 16 percent in 2007-08, Garcia said.

“Overnight visitors always spend more than day trippers,” Pavlakovich-Kochi said.

A Tucson tourism office in Hermosillo, Son., has helped boost the number of visitors and their spending in recent years, Garcia said.

The office sells tickets for concerts or shows at Tucson-area casinos and offers other Tucson tourism services, he said.

Lower prices and greater product selection draw shoppers from Mexico, Garcia said.

Many textile and electronic products sold in Mexico are imported from Asia, he said.

Mexico and China are engaged in a “non-declared” tariff war, which means high prices for goods in Mexico, which pushes shoppers to Tucson, Garcia said.

Growing challenges

The Convention & Visitors Bureau has increased its spending aimed at attracting Mexican visitors from $30,000 to $300,000 in recent years, Garcia said.

But other communities – Scottsdale, Phoenix, Tempe and Las Vegas – are also going after Mexican visitors, he said.

Maricopa County’s economic benefit from Mexican visitors jumped from $36.5 million in 2001 to $694.2 million in 2007-08, an 1,800 percent increase.

“We’re definitely ahead of the curve,” Garcia said, “but there are a lot of communities that are trying to position themselves and gain market share. Here in Tucson, we know that retail is directly impacted by tourism. We cannot slow down, we cannot say we have been successful.”

One area being investigated for growth is drawing visitors here from Mexico for medical services.

That includes cosmetic and elective surgery, Garcia said.

“We are working with the medical industry to develop more medical tourism into Tucson,” he said.

“They come here and they pay cash. No insurance, no billing.”

A slide in the peso’s value against the dollar has made it more expensive for Mexicans to shop in the U.S., so fewer customers may be crossing now.

In April, the average exchange rate was 13.3944 pesos to a U.S. dollar compared with 10.5146 in April 2008, a decline of 27 percent.

Increasingly restrictive regulations for crossing the border and more stringent entry documentation policies could pose another challenge to Mexican visitor spending, Pavlakovich-Kochi said.

Making it tougher for Mexican visitors to get here means less revenue for local merchants – something few people consider when pushing for making crossing more difficult, she said.

“The focus has really been on the border issues and the illegal immigration,” she said. “This (economic benefit) has been on the back burner.”

While spending by Mexican visitors may decrease from 2007-08 levels, the area will continue to reap some economic benefit, Pavlakovich-Kochi said.

“Realistically, looking at the near future, we will probably expect a decrease in total spending,” she said.

“Maybe we had an extraordinary year of Mexican visitors and expenditures in Arizona. But it will continue: It is not something that will be totally erased overnight.”

Cronkite News Service contributed to this report.

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TOP DESTINATIONS

Where Mexican visitors to metro Tucson shopped 2007-2008.

Malls/shopping centers

1. Tucson Mall

2. Park Place

3. Foothills Mall

4. Plaza Palomino

5. El Con Mall

6. St. Philip’s Plaza

7. La Encantada

8. Casas Adobes Plaza

9. Crossroads

Other stores

1. Wal-Mart

2. Costco

3. Best Buy

4. Target

5. Ross

6. Mervyn’s*

7. Walgreens

8. Circuit City*

8. Marshall’s

9. Home Depot

10. Food City

* now closed

Metro Tucson attractions visited by Mexican tourists

1. Casinos

2. Reid Park Zoo

3. Old Tucson Studios

4. Arizona-Sonora Desert Museum

5. Other museums

6. Saguaro National Park

7. San Xavier Mission

8. Tucson Convention Center

9. Concerts/theaters

10. Colossal Cave

11. University of Arizona

12. Downtown

———

WHY TUCSON?

A number of factors led to an increase in local expenditures by Mexican visitors between 2001 and 2007-08, said Vera Pavlakovich-Kochi of the University of Arizona Eller College of Management’s Economic and Business Research Center.

Metro Tucson saw a fourfold increase in overnight visitors from Mexico, she said.

The peso/dollar exchange rate was very favorable to Mexican visitors, who could purchase more goods for their cash, particularly in the first half of 2008, she said.

Fears of an impending peso devaluation, which occurred later that year, saw Mexican consumers increase their Arizona spending during the time of the study, she said.

And 2008 was the last year Mexican visitors were allowed to enter the U.S. before more stringent documentation requirements were enforced, she said.

———

$968 million

Tucson-area expenditures by Mexican visitors in 2007-08

245%

Increase in Tucson-area expenditures by Mexican visitors from 2001 to 2008

5.2%

Portion of taxable sales Mexican visitors accounted for in Pima County in 2007-08

Private firm cleaning up at Tucson’s expense

Bill Hill and Chris Landeen dump their trash at the Los Reales Landfill, 5300 E. Los Reales Road.

Tucson officials estimate a transfer station opened in November by garbage giant Waste Management will siphon 100,000 tons of trash and $3 million in revenue from the city over the next year.

The lost revenue, in combination with plummeting prices for recyclables and high prices for gas, mean the 5-year-old and much scorned city garbage fee is set to go up. Landfill fees have already seen increases.

Environmental Services Department Director Andrew Quigley has asked the City Council to raise the trash fee to $14.50 per month beginning July 1.

A City Council vote on the proposed 3.6-percent increase is set to follow a public hearing June 2.

That day, the council also is slated to tentatively approve a $1.3 billion budget that, as of Friday, included $12.4 million in new or increased taxes and millions more in raised fees. The same day, the council will weigh whether to raise bus fares.

With a budget that relies heavily on sales tax receipts, the city has been struggling to pay its daily bills.

The Environmental Services Department is in similar shape, also having to contend with volatile gas and recyclables prices and relying on sources of funding that are on the decline, most notably private haulers’ landfill fees.

While the public landfill business appears on a downhill slide, Waste Management is reporting increased landfill profits.

The company stated in its first quarter earnings statement that its landfill revenues rose 3.1 percent from the same year before even as its overall earnings dropped more than 16 percent amid a recession.

Waste Management operates the largest network of landfills in the country, with 277 sites accepting more than 116 million tons of waste per year, according to its Web site.

Two of those sites are in the Tucson area, and both have represented challenges to the local governments operating nearby dumps.

A transfer station at 5200 W. Ina Road contributed to Pima County raising landfill fees last year and second-guessing the timing of the closure of its Northwest Side landfill at Tangerine Road.

The opening of Rincon Transfer Station at 5890 S. Mann Ave. in November is causing consternation among city officials because private haulers who once dropped waste at the city’s Los Reales Landfill have begun using the Waste Management facility.

Quigley estimates the shift will mean 20 percent less trash – 100,000 tons – entering the city’s Los Reales landfill next fiscal year, which begins July 1.

Waste Management Arizona spokeswoman Melissa Quillard would not say how much trash the Mann Avenue transfer station accepts. She said publicizing the information could give competitors an advantage.

But Quigley is certain a large proportion of the trash that had been going to Los Reales is now headed for ultimate disposal at Waste Management’s Maricopa and Pinal county dumps.

In a bid to recoup some of the financial losses that follow from the diverted trash, Quigley has offered cut rates to haulers that promise to deliver a set amount of waste.

He hasn’t received any responses yet, though he said haulers expressed interest when he first came up with the deal.

“Right now, we’re just waiting,” he said.

Councilwoman Nina Trasoff praised Quigley for his attempt to extend a deal to the haulers.

“I think that the money he’s going to recoup that way is a very creative approach,” she said.

Regardless of how successful the contract program is in luring haulers back to Los Reales, Environmental Services will almost definitely need other revenue to stay in the black.

That leaves the City Council with an unpopular political decision and one that brushes up against campaign promises made by at least two council members.

Both Trasoff and Councilwoman Karin Uhlich campaigned against the $14 a month trash fee four years ago, saying it was too expensive and implemented inappropriately.

They said when the fee was imposed the year before – 2004 – public comment opportunities were lacking and the waiver program for low-income city residents was inadequate.

Now they’re faced with upping the price.

“(Raising the trash fee) will never make me happy,” Trasoff said. “But it’s been demonstrated that there’s a real need and the money is used for garbage services. I can live with it so long as I know that we have a meaningful waiver program in effect.”

Uhlich takes a similar stance, though she puts the proposed increase in the context of a plan to attach fees to indexes.

“I think there seems to be support on the council to apply indexes across all city fees so that we avoid the large adjustments, which are historically more the norm,” she said.

The reason for indexing, Uhlich said, is that increases will be predictable and therefore easier to incorporate into budgets.

So that applying an index wouldn’t simply mean prices increase gradually but without any relationship to cost trends, Uhlich suggests using indexes that apply directly to the fee at hand.

A fuel index, for example, could be applied to a garbage fee because fuel is one of the primary costs in collecting trash, she said.

Councilman Rodney Glassman, like Trasoff, is not entirely opposed to indexing, though he is wary of applying indexes across the board.

“It’s important when looking at the question of indexing to consider other factors such as the economy and the actual cost of providing the services,” he said. “I support indexing as part of a pricing model but not something that can be relied upon as the sole indicator of price adjustment.”

He advocates giving department directors more leeway in setting fees and running departments more like businesses.

He also thinks the trash fee increase is a better alternative to letting garbage services suffer because there’s not enough money to pay for them.

“It’s unrealistic to think that the department can continue to provide services without adjusting their rates over time,” he said.

Councilwoman Regina Romero also seems to accept the fee increase but is less enthusiastic about using an index.

“It seems that the fees are accumulating,” she said. “At the same time, I see the budget holes.”

The Rincon Recycling and Transfer facility, 5890 S. Mann Ave.

———

TRASH AT A GLANCE

Los Reales Landfill, 5300 E. Los Reales Road

Hours: 6 a.m. to 5 p.m. Monday through Saturday

Residential rates: $10 for a covered load weighing less than a ton; $30 per ton for heavier, covered loads; uncovered loads cost $5 more

Commercial rates: $30 per ton for covered loads; $5 more for uncovered loads

Waste Management’s Rincon Transfer Station, 5890 S. Mann Ave.

Hours: 7 a.m. to 3 p.m. Monday through Friday; 7 a.m. to noon Saturday

Residential rates: $38 per ton plus $14 per load for loads weighing less than 500 pounds

Commercial rates: $38 per ton plus about $5 in variable fees

Source: City of Tucson and Waste Management

CHANDLER – Just weeks before a deadline that could send it into bankruptcy, General Motors is entertaining 500 of its biggest customers at a luxury spa and golf course in Arizona.

GM, which has borrowed $15.4 billion from the U.S. government in the past six months, shipped in 150 cars and trucks to the event this week at the Sheraton Wild Horse Pass Resort & Spa, and paid for airfare and hotel lodging for 90 percent of the guests.

The affair is scaled back from previous years, says GM spokesman Terry Rhadigan. Guests have to pay for their own golf outings, he says, and most of the days are packed with informational sessions on GM’s 2010 product line. The guests are GM’s fleet and corporate customers, which accounted for 27.6 percent of GM’s business in 2008. Fleet customers can buy dozens of vehicles at a time.

“Our approach this year has been noticeably austere,” he says. “We obviously had the option to cancel the event or move it … but … do we want to just let our competitors move in and take this important business from us?” Business with fleet customers is “highly profitable,” he says. They often order next year’s models in June.

GM is operating on a taxpayer-funded lifeline, having taken $15.4 billion in government loans. It has said it needs up to $30 billion. It faces a June 1 deadline to slash debt and sign new contracts with its labor union, or the government has said it won’t provide any more money.

A small number of the customers attending the event were government employees who paid their own way, Rhadigan says.

Helio Fred Garcia, a professor of crisis communications at New York University, says GM’s fleet meeting isn’t the same as events by other companies that have been criticized for sponsoring lavish entertainment while taking taxpayers’ dollars.

“If GM is going to survive … it has to maintain sales in a competitive marketplace,” Garcia says.

President Obama has called for “shared sacrifice” among all of GM’s stakeholders.

“I would hope that GM management would spend our financial dollars wisely, and in a manner that would be certainly appropriate in the taxpayer’s minds,” says Jack Dickinson, president of GM retiree group OverTheHillCarPeople.com. White-collar retirees lost health care benefits at the start of 2009. “I would hope that our management has the foresight to stay away from things that would project a negative image with the public.”

GM, Chrysler and Ford executives were harshly criticized last fall for flying on private jets to Washington to ask for government aid. Leslie Paige of Citizens Against Government Waste says it’s clear GM didn’t learn from that.

“GM has a tin ear to these things,” she says. “There shouldn’t be any wining and dining right now. They took taxpayer money. If you’re going to do that, you need to make some very public displays that you get that the taxpayers are part owners of the company now.”

Tom Donaldson, a professor at the Wharton School at the University of Pennsylvania, says GM and other companies accepting government aid should be working hard to stay under the radar.

“Even legitimate functions that help sales, that create partnerships, that are not over the top and luxury, they are almost out of bounds from the public standpoint,” Donaldson says.

GM says the Treasury wasn’t consulted on the event, nor would it ask for permission. The Treasury has said it doesn’t want to interfere with GM’s day-to-day operations.

Tucson-area bankruptcy filings in April jumped 85 percent from the same month a year ago, according to statics released Wednesday.

Arizonans, stung by particularly heavy job losses and housing weakness, are filing for protection at a much higher rate than Americans generally.

“People are throwing in the towel like we’ve never seen before,” said Brad Stroh, co-CEO of Freedom Financial Network, a firm with a debt-negotiation unit in Tempe that employs 250 people. “A lot of them are saying, ‘I need to hit the reset button.’ ”

There were 643 bankruptcy filings last month in the Tucson sector, compared with 348 in April 2008, according to the report by the U.S. Bankruptcy Court for the District of Arizona. Sixty-one percent of those filings were in Pima County. The Tucson sector also includes Cochise, Graham, Greenlee, Pinal and Santa Cruz counties.

The majority of the filings were Chapter 7, which is liquidation for individuals and small businesses. There were 532 Chapter 7 filings in April, a 105 percent increase over the same month last year.

Personal reorganization filings, Chapter 13s, were up 23 percent. And Chapter 11 filings, business reorganizations, jumped 40 percent over last year, though the total number is small: seven.

In the first four months of 2009, there were 2,023 filings in in the Tucson sector.

James Portman Webster, a bankruptcy attorney in Mesa, sees consumers pressured from several angles, including high credit-card debts and job losses. Even for workers who keep their jobs but face pay cuts or temporary furloughs, the income disruption can be enough to push some over the edge. “Any wiggle room some of these people had is just gone,” he said.

Webster attributes the April surge in part to the tax-return filing season, since refund money provides the cash for some debtors to pay attorney fees and other bankruptcy expenses.

Other factors might be at work, too. Stroh said he senses a shift in public attitudes toward bankruptcy, as filing for protection from creditors has lost the stigma it once had.

In years past, “People would do anything to avoid filing,” he said. “But from (General Motors) and Chrysler down to the neighbors next door, it has become the American thing to do.”

Stroh has noticed fewer people seeking to work out their financial woes through his firm’s Freedom Debt Relief unit by consolidating debt and negotiating with creditors outside of bankruptcy.

“Demand for our products is still high, but it’s off from the peak,” he said. “We often can cut their monthly payments by 50 percent, yet a ton of people can’t afford even that.”

The statewide total of 2,902 filings in April marked an 87 percent increase from a year earlier. For the entire U.S., consumer filings rose 36 percent in April from the same month a year earlier, reported the American Bankruptcy Institute, using data from the National Bankruptcy Research Center. The overall April total of 125,618 filings was up 3.5 percent from March and puts the nation on pace for 1.4 million cases in 2009.

The Arizona Republic contributed to this report.

General Growth Properties included Tucson Mall in its bankruptcy filings, but lenders say the mall is financially stable.

NEW YORK – A group of lenders accused shopping mall operator General Growth Properties of including eight properties in its bankruptcy filing that do not need court protection.

The shopping centers, including the Tucson Mall in Arizona and the Stonestown Mall in San Francisco, are financially stable and do not need to be rehabilitated through a Chapter 11 reorganization, according to a filing Monday by ING Clarion Capital Loan Services LLC, a loan administrator.

The creditors claimed General Growth had “swept” the properties into bankruptcy to benefit from their slightly better financial condition.

General Growth filed for protection from creditors last month in the largest U.S. real estate bankruptcy case in history. The Chicago-based real estate investment trust has $27 billion in debts.

Malls in other cities are in Bakersfield and Visalia, Calif.; Jacksonville, Fla.; Lancaster, Pa.; Bartlesville, Okla.; and Murray, Utah.

“When a debtor has no current need for relief under the bankruptcy code, its case should be dismissed under the rubric of a ‘bad faith’ filing,” court papers read.

General Growth Properties Inc. spokesman David Keating said he had no comment because he had not yet seen ING’s request.

A U.S. Bankruptcy judge delayed making a decision about a proposed reorganization plan for Tucson-based copper miner Asarco LLC until May 15.

The delay gives more time for Asarco’s estranged parent Grupo Mexico SAB to submit a competing reorganization plan for the company.

Grupo, which lost corporate control of Asarco when it filed for bankruptcy in Corpus Christi, Texas in 2005, has been trying to regain power of the firm.

Judge Richard Schmidt already has given Asarco approval to sign a deal with India-based Sterlite Industries Ltd. Under the deal, which is dependent on approval of Asarco’s proposed reorganization plan, Sterlite would buy Asarco’s assets for $1.1 billion in cash and $600 million in notes.

But earlier this month Grupo said it planned to submit a competing offer for Asarco worth $1.3 billion in cash.

If Grupo fails to file the reorganization plan by May 15, Schmidt would allow Asarco to continue with its plan.

Bashas’ Markets said Thursday that it would close an unspecified number of underperforming stores around the state to hold down costs in an “extremely challenging retail environment.”

Spokeswoman Kristy Nied said the exact number of stores has not been determined, but that it would only be a “handful.”

The number is thought to be between five and 10. A typical store has 100 to 150 workers so they affected jobs could range from 500 to 1,500.

Nied said the company would make every effort to find jobs for the impacted employees at other stores.

“It was one of the most difficult decisions we’ve made,” she said.

The announcement follows the closure of five Bashas’ stores earlier this year which affected between 500 and 750 jobs.

Those stores included two Bashas’ and a Food City Latin market in Phoenix, an Ike’s Farmers Market in Tucson and another Food City store in Yuma.

In addition to the jobs lost due to store closures, Bashas’ has had two rounds of layoffs in the past year that have eliminated about 550 corporate and support jobs.

The store closures are the result of increased competition and lower margins due to the recession. So far Bashas’ is the only supermarket chain to announce multiple closures, but analysts believe there could be more on the horizon.

There are six Bashas’ stores in Tucson and one at Dove Mountain in Marana. There are also eight Food City stores, and the high-end AJ’s Market at La Encantada.

Job seekers line up at a National Career Fair in Long Beach, Calif.

The Tucson metropolitan area lost another 2,300 jobs in March, and the area’s unemployment rate spiked half a percentage point, to 7.1 percent.

That is still lower than the state’s overall rate, which is 7.8 percent after the loss of 7,600 nonfarm payroll jobs in March, according to a report released Thursday by the Arizona Department of Commerce.

Since March of last year, the Tucson area, which includes all of Pima County, has lost 18,600 jobs. The unemployment rate in Tucson in March 2008 was 4.3 percent.

In the latest round of cuts, most of the jobs lost – 1,800 – were in service industries, including trade, transportation and utilities and professional and business services.

Construction jobs again declined, with another 300 jobs lost.

There was slight growth in the clothing and general merchandise and the leisure and hospitality sectors, but statewide gains were less than expected for March, a tourism-heavy period.

Since December 2007, the beginning of the national recession, Arizona has lost 230,400 jobs, according to the report. Most of those jobs – 183,000 – have been lost since March 2008.

The March 2009 increase in the jobless rate is part of a pattern that puts Arizona on track to hit 8 percent in the next monthly report, said Dennis Doby, a Commerce Department researcher.

“You can’t say when this is going to turn,” Doby said.

An unemployment rate of 10 percent is possible by late 2009, he said. “You’re getting a percent every three months,” he said.

There has been more positive talk about the economy recently, but a renewed confidence among both consumers and businesses is key for a recovery to take hold, Doby said.

The state’s unemployment rate could keep rising once the economy appears to stabilize, Doby said.

That’s because workers now too discouraged to look for work would resume looking for jobs and be counted in the work force, he said. “Unemployment is going to be a lagging indicator,” he said.

The national unemployment rate also continues to rise. Last month, it stood at 8.5 percent.

The Associated Press contributed to this report.

Economic activity up 57% in 5 years, study says; 87,417 jobs in sector

Bioscience work such as the research done in the Thomas W. Keating Bioresearch Building at University of Arizona contributes billions of dollars to the Arizona economy.

Arizona’s bioscience sector posted $12.5 billion in state economic impact in 2007, and that figure is expected to continue to grow, according to a study released Tuesday.

Arizona had 87,417 bioscience jobs – 2.5 percent of total state employment in 2007 – paying $5.3 billion, according to the report prepared by Ohio-based Battelle Technology Partnership Practice for the Flinn Foundation in Phoenix.

The report is to be presented by Walter H. Plosila, Battelle senior adviser and consultant, at a luncheon at the Biozona 2009 conference in Phoenix.

“Between 2002 and 2007, economic activity within the bioscience sector increased 57 percent, jobs 20 percent and tax revenues 35 percent,” Plosila said in a statement released Tuesday morning. “This rate of growth is difficult to find elsewhere in the nation.”

Bioscience economic impact jumped from just short of $8 billion in 2002 to $12.5 billion in 2007. Sector jobs increased from 72,855 to 87,417, and bioscience payroll increased from $3.2 billion to $5.3 billion, according to the report.

State bioscience employment is projected to top 142,000 jobs by 2020 if industry and government leaders continue to make progress on Arizona’s Bioscience Roadmap, a 10-year plan launched in 2002 to make Arizona a biotech powerhouse.

The recession may slow expected progress.

“The economic turndown will clearly have an impact on reaching these numbers,” said Plosila, who leads the Roadmap research. “It affects the biosciences, just as it affects all industries.

“Arizona is on the right trajectory, though given the state of the global economy, it may take more time to realize these long-term gains.”

The home at 2385 W. Silver River Way is among thousands that went into foreclosure last year in the Tucson area.

Midvale Park is being targeted by Pima County officials in an effort to combat the negative effects of foreclosures in the neighborhood.

The program, funded by the Pima County Industrial Development Authority using money from the Southern Arizona Land Trust, involves buying foreclosed homes and turning them into low-cost rentals.

Foreclosures continue to pile up in the metropolitan area, with a record number of filings in March. More than 1,100 foreclosure filings were reported during the month, with filings from March 30 and 31 still to be counted, officials said. That follows 1,007 filings in February, which was the monthly record, officials said.

There were more than 9,000 foreclosure filings in Pima County in 2008 and more than 4,500 in 2007, according to Realty Trac, an online foreclosure listing service.

The authority’s hope is that the rentals will help keep neighborhoods stable and provide shelter for people who have been forced out of their homes by foreclosure.

“What we’re trying to do is come a full circle on foreclosures,” said John Glaze, chief operating officer for Family Housing Resources. “I think that is a great thing.”

The organization, a statewide nonprofit focused on affordable housing, is managing a dozen foreclosed properties for the county’s development authority.

The authority’s project is the first of three similar programs coming to the metropolitan area. The city and county are both receiving money from the U.S. Department of Housing and Urban Development to start similar efforts both in the city and unincorporated areas.

The main purpose behind the federal funding is to keep homes from sitting empty on neighborhood streets.

HUD is using data provided by the U.S. Postal Service that shows when a residence has been vacant for 90 days or longer.

“You can see neighborhoods where there is vacant housing that is unmaintained,” said Gary Bachman, a senior housing planner with the county. “Unkept yards and vandalism can really bring down a neighborhood in both the appearance and the morale.”

Betty Villegas, a program manager with the county’s Department of Community and Economic Development, said she is puzzled by the vacancies.

“Right now we really don’t where people that have been foreclosed on are going,” she said. “They’re moving somewhere and the rental vacancy rate is so high that you know that they’re not getting new apartments. Are they going to live with relatives? Do they think they can’t rent because of their credit?

“There’s a lot of unknowns right now but we feel that even if we buy 20 houses, even if we buy 30 houses, it is an impact,” Villegas said. “It is an impact to families and neighborhoods.”

Bachman and Villegas both helped the Pima County Industrial Authority with its program to purchase and fix up foreclosed homes.

“One of the things that we saw right away is that when they started cleaning up the weeds and even fixing up the facade of the house, the other neighbors started fixing up their own houses again,” Villegas said. “It’s really a trickle-down effect. When you start fixing up one house the homeowners start feeling better about their neighborhood.”

The authority spent $1.5 million to buy and repair 12 homes in the Midvale area, said Steven Russo, legal counsel for the authority.

County officials say that the Southwest Side neighborhood has been hit hard with foreclosures over the past year as the subprime mortgage crisis mounted.

Russo said rental proceeds will go back into the Southern Arizona Land Trust, which is funded primarily by general funds from the county.

Resources from the county-run land trust are dedicated to supporting affordable housing.

Nearly half of the homes will be ready for tenants in the next few weeks, Glaze said.

One home is ready and a family of five will move in this week, he said.

The Romero family will be the first to take advantage of these types of programs here.

Abel Romero, 33, is moving his family into a home in Midvale Park this week.

He said he was given 40 days to move out of his South Side home after it was foreclosed on earlier this year.

“Trying to get into a new house is very, very costly and we were fortunate,” Romero said. “This program allows us to move into a house at a very, very low rent.”

He’s paying about $700 a month for a three-bedroom house.

Romero said his financial troubles started six months ago when he was laid off from his job as a repairs processor in the avionics industry.

“I got laid off from my job and our payments were just too high,” Romero said. “We just fell behind on our payments.

“You try to make your payments but when you’re already behind, all you’re paying on is late charges,” he said. “We just got way too far behind and we have other bills that we have to pay. It was just a vicious cycle and we had no choice, pretty much.”

Romero said he also had to file for bankruptcy. His mother-in-law told him about the program managed by Family Housing Resources.

“It’s mainly something that’s going to get us into a home and allow us to establish ourselves again and get back on our feet,” he said. “Hopefully down the line, once we get back on our feet, we’ll be able to buy another home.”

Abel Romero (left), his son Jacob, 5, and Abel's cousin Daniel Miranda move into a new home in Midvale Park that they are renting through a county neighborhood stabilization program. The Romero family was forced out of a home it owned by foreclosure.

Local officials will soon begin using federal funds to clean up blighted, abandoned or foreclosed homes that they say can devalue and demoralize neighborhoods throughout the county.

Two grants from the U.S. Department of Housing and Urban Development are being allocated to Pima County and the city of Tucson as part of the federal Neighborhood Stabilization Program.

The purpose of the funds is to buy, repair or demolish homes in neighborhoods deemed to be high-stress areas due to foreclosures.

These areas are identified using a formula that combines foreclosure rates, high-cost loan rates and vacant-home rates among other things. These neighborhoods are rated based on a risk score on a scale of 1 to 10, with 10 assigned to the neighborhoods most at risk from foreclosures.

City officials will receive roughly $7.3 million to buy and rehabilitate at least 32 homes while their counterparts in the county hope to use $3.2 million to purchase roughly 20 homes in areas such as South Tucson, Ajo and the Flowing Wells area.

The majority of the high- stress neighborhoods are within city limits and city officials plan to target those areas that have risk scores of 8 or higher when they begin buying houses.

City officials have also noted in the grant application that the area north of Speedway Boulevard between Interstate 10 and Wilmot Road is also critical because those neighborhoods predominantly consist of rentals, and foreclosures will further drop homeownership rates.

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How to apply

To apply for a Pima County Industrial Development Authority program, contact Greg Flatt of FHR Residential at 777-3402.

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Interactive Map

See an interactive map of foreclosed homes

Business leaders in Tucson and Arizona seem to see the tiniest glimmer of light at the end of the economic tunnel.

The Compass Bank Business Leaders Confidence Index for the second quarter records a tiny uptick from 32.1 to 33.0. That’s on an index where 50 is the dividing line between an expanding and contracting economy.

That comes after tumbles of 8 to 12 points in every category in the first quarter.

The statewide index noted small increases in five of the seven categories, though Tucson participants differed in their confidence in two categories: state outlook and profits.

The statewide (read Phoenix) and national outlooks hit record lows, 31.7 and 27.8, respectively. But Tucson business leaders who took part in the online survey in early March have slightly increased confidence with their state outlook, which rose from 30.7 to 31.3.

The confidence for profits rose nearly 3 points in Phoenix (35.2 to 38.1), while dropping in Tucson from 33.8 in the first quarter to 32.2 for the second quarter.

Phoenix, Tucson and the non-metro areas all saw upticks in sales, the strongest category across the state, but the Phoenix area has far more confidence, 44.3, than the Old Pueblo at 38.9. And the nonmetro areas nearly reach positive territory with a 48.3 sales index.

Federal rescue efforts and cheap assets may help nudge the economy forward, said University of Arizona economist Marshall Vest.

Compass Bank and the Eller College of Management at the University of Arizona have collaborated on the BLCI since spring 2003, but the index is coming to an end this quarter.

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BLCI BY THE NUMBERS

Compass Bank BLCI for Tucson’s expectations first two quarters of 2009.

Category Q2 Q1

Overall 31.3 30.5

Sales 38.9 36.1

Profits 32.2 33.8

Hiring 29.7 28.2

Cap. expenditures 29.1 26.1

State outlook 31.3 30.7

National outlook 26.5 28.3

Arizona BLCI index

blci.com/arizona/start.jsp

Shoppers walk along North Fourth Avenue near East Ninth Street during the Fourth Avenue Spring Street Fair on Sunday. About 400 arts and crafts vendors set up booths.

The 40th annual Fourth Avenue Spring Street Fair has wrapped up, after drawing an estimated 300,000 Friday, Saturday and Sunday, with mixed reviews.

Some said the money was good, even with a faltering national economy.

Other said not as much was being spent by visitors this year.

“I think we’ve had a good turnout of people. Despite all the bad news about the economy, people have decided to go to the fair,” said Kanella Conklin, owner of Kanella’s, a North Fourth Avenue clothing store.

John Sedwick, executive director of the North Fourth Avenue Merchants Association, said the word he was getting from art-booth operators was the revenue from sales at the fair were down about 20 percent.

But vendors, many of whom follow a circuit of street fairs around the country, report that revenue at other street fairs is down 30 to 50 percent, Sedwick said.

“People are not spending at the level of past years, but the artists are pleased,” Sedwick said.

Monica Cota, 34, owner of the Rustic Candle Co. said of the fair, “It’s been good, but it’s been a little slower than the winter one.” A street fair is also held along the avenue in the winter.

People are holding back, “maybe a little,” on their spending because of the economy, said Cota, whose business is on North Fourth.

But, Cota said, “in general, I think it’s going well.”

The street fair, Sedwick said, featured 400 booths, with merchants selling such things as ethnic foods from a variety of cultures, including Greek, Mexican and Thai foods. There also were a variety of arts and crafts and T-shirts being sold along the avenue.

There also were street jugglers, a kids’ hands-on art pavilion, face painting, balloons and a Ferris wheel for the kids, Sedwick said.

In past years, Sedwick said, the fair has drawn between 200,000 and 400,000 people.

The fair, Sedwick said, helps fund a number of non-profit charities each year.

Among those at the fair Sunday were Hector Garcia and his wife, Delores, in Tucson for the weekend from El Paso, Texas, to see a Diamondbacks spring training game.

With the couple was their 9-year-old daughter, Alejandra Garcia.

Sunday was her first time at the street fair and she said, “It’s good, lots of things to look at.

Her mother said the family had not bought anything at the fair other than food, but that was only because they had just arrived early Sunday afternoon.

“We just barely got here,” Delores Garcia said.

She said her family decided to come to the fair after seeing an information pamphlet about it at their hotel.

Alejandra Garcia, 9, of El Paso, Texas, enjoys some brisket on Sunday at the Fourth Avenue Spring Street Fair.

Not clear how many ‘interested parties’ in talks with parent firm Gannett

A spokeswoman for Gannett, owner of the Tucson Citizen, won’t say when negotiations with potential buyers might end.

Tara Connell said Wednesday that negotiations with “interested parties” prevent her from commenting on how close Gannett Co. Inc. and bidders might be to making a deal.

Citizen staffers entered employment limbo Tuesday afternoon when Gannett announced the paper would move to day-to-day publication status because two “very serious” prospects had come forward.

Robert J. Dickey, president of Gannett’s U.S. Community Publishing, informed Citizen interim Editor Jennifer Boice in a phone call that negotiations with the potential buyers would not completed by Saturday, the date Gannett had set to shutter the Citizen if it hadn’t been sold.

The one-paragraph news release given to employees after the announcement said Gannett hoped to resolve the issue in “the very short term.”

“Obviously, we wanted to say ‘very short term,’ but I can’t define what that is because (negotiations) are in progress,” Connell said. “You have to understand that would change the negotiations.”

Connell wasn’t sure where Dickey got the idea there were two contenders.

“I have no knowledge of that fact and that’s not what I wrote in the press release,” Connell said. “There are parties involved, no mention of a number.”

Gannett announced Jan. 16 that it was selling the Citizen and would shutter the paper Saturday if no buyer came forth. Though the announced final date for bids was Feb. 19, the deadline was extended at least once, to March 7.

As those dates came and went with no news of a buyer, Citizen employees prepared for the inevitable. The Human Resources department of Tucson Newspapers – the company that provides joint noneditorial services to the afternoon Citizen and the morning Arizona Daily Star – offered crisis counseling and set up sessions for job training and placement services.

Connell would neither confirm nor deny whether U.S. Justice Department’s investigation of the sale of the Citizen is what prompted the delay. Nor would she say what price Gannett is asking for the Citizen’s assets offered for sale, which do not include its 50 percent interest in the joint operating agreement between Gannett and Star owner Lee Enterprises Inc.

A Justice Department spokeswoman would say only that an investigation is “ongoing.”

Two people who contacted the Citizen in February about bidding on the paper are Mike Hamila, owner of UNIsystems Mainframe Systems LLC in Phoenix and David Ganezer, publisher of the Santa Monica Observer. Both said Thursday they could not comment about anything regarding the Citizen, citing confidentiality agreements they entered.

Grupo Reforma, a Mexican media chain, was rumored to be interested in purchasing the Citizen, but a representative from the company denied that late Wednesday.

Eugenio Herrera Terrazasof Grupo Reforma’s Mexico Citylegal affairs office said that Grupo Reforma had not made any bids and has no plans to do so.

Connell said Gannett’s “overriding interest” was informing Citizen employees when news became available.

“We would hope that employees would be told first when a sale is complete, since it affects their lives the most,” Connell said. “Sometimes that is difficult in today’s world, but that would be the goal.”

Citizen Staff Writer Fernanda Echávarri contributed to this report

Despite employment growth, the jobless rate in Pima County jumped six-tenths of a percentage point last month, according to a report released Thursday.

The Arizona Department of Commmerce report shows that Pima County posted a net gain of 3,400 jobs in February compared with January. Most of the gains were in government.

Despite those gains, which the report calls less than expected, the unemployment rate reached 6.6 percent.

Other areas that gained jobs in February include restaurants, bars and hotels, health services and professional and business services. Much of the gains can be tied to seasonal tourism and tax preparation season.

The construction industry lost another 300 jobs, and clothing and general stores also lost 300 jobs.

Arizona’s unemployment rate was 7.4 percent and the national average is 8.1 percent.

Dennis Doby, an economist for the Arizona Department of Commerce, said the state unemployment rate should start to improve in the latter half of the year if there are no catastrophic shocks to the national or global economies.

Staff and wire reports