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Weathering GTEC's Storm 

Is Steve Weathers a maverick, or has he been duped by a micro-managing board?

When Steve Weathers arrived to the dance of economic development, Tucson style, he may not have known what he was getting into. The Greater Tucson Economic Council's decision to hire Weathers as chief executive officer last year was based on his experience in a state with the world's sixth-largest economy and a knowledge of high-tech. San Diego tech clusters mirror Tucson's revamped focus on cluster development and Weathers was hired to "lure companies out of there."

In spring 2001, GTEC Chair Duff Hearon, who headed the search committee, called San Diego business leaders about Weathers' role in recruiting high technology companies. The skinny was that Weathers--vice president of the San Diego Regional Economic Development Corp. (EDC) since 1990--helped lure major companies like Merck, Gateway and Swiss-based life sciences company Novartis to San Diego. And an expensive background check of Weathers by GTEC turned up clean.

But a year after Weathers took GTEC's helm, a procession of critics questioned whether the organization is doing enough to attract companies and charged GTEC with thumbing their nose at lower-paying companies.

The 44-year-old Weathers came to Tucson in July 2001 after being at the San Diego development corporation for 11 years. Before that he spent eight years as a banker in California after receiving his B.S. in economics from California State University, Chico in 1982.

While Weathers' GTEC contract was renewed for another year, the board's annual meeting on Oct. 23 has the potential of digressing into a finger-pointing match. But is it Weathers' fault, or is GTEC's board out to get him because he represents change? Criticism is so fierce that GTEC officials are squeamish about talking on the record, but it doesn't mean they aren't talking.

"The thing about Tucson is that we've got a real old-boy network here," says a GTEC insider who didn't want to be identified. "All they care about is selling cars and selling space and they typically resent interlopers--especially from California, and especially young, maverick guys. They're the same people who want to undermine (Weathers') position and discredit him."

During Weathers' first year, GTEC took credit for assisting only four companies in locating to Tucson, generating 455 jobs--the same numbers achieved by Sierra Vista. None of those companies were the promised high-tech relocations from San Diego, and only one biotech, Pittsburgh-based ProlX Pharmaceuticals, will bring its headquarters and research center to Tucson--but with only 30 mostly-transferred workers.

At first blush, this seems dreadful but GTEC--as well as other economic development "leaders"--say it's to be expected in a "post 9/11 economy."

In September, Universal Avionics Systems Corp. announced it will move its Redmond, Wash., research and development operation, and more than 125 high-paying jobs as part of an estimated $10 million capital investment here. Most of the jobs pay more than $50,000 per year, but Redmond workers are expected to move to Tucson, taking up to 40 percent of the jobs. Only an estimated 75 jobs will be local hires.

This falls far short of GTEC's $4 million, four-year "Future Now" campaign announced in late 2000, which projected 120 new companies with 30,000 new jobs, and another 4,000 jobs through growth of existing companies, by 2004. With four companies per year, many feel GTEC's new CEO shouldn't be focusing on high-tech but taking what they can get.

Criticism of Weathers' recruiting came to a head after Anaheim-based Cristek Interconnects announced in August it would expand to Sierra Vista instead of Tucson--a painful loss since Cristek, which expects to create 150 jobs with pay for assemblers ranging from minimum wage to $15 an hour in Sierra Vista, lists Tucson-based Raytheon as its main client.

GTEC Chair Hearon told a July 17, 2002, board meeting the council will seek companies involved in life sciences, biosciences, information technology and optics and sees the greatest opportunity in small high-tech firms with "jobs that pay at least $15 per hour."

But Mayor Bob Walkup, a former GTEC chairman and a voting board member (who challenged economic development officials shortly after taking office to add 10,000 local aerospace jobs), brought Cristek to GTEC's attention four months earlier. When the deal fell through, Walkup asked former GTEC Chair Larry Aldrich to investigate.

Yet GTEC insiders say the reality of the Cristek decision was that the head of the company was only interested in Tucson as an afterthought after scouting sites in Prescott, and it had nothing to do with Weathers.

"The owner told everybody from the outset she was looking for a rural location," says another GTEC source on condition of anonymity. "But to cover her own actions with her company board over the Sierra Vista decision, she suggested GTEC dropped the ball."

Weathers took the heat for Cristek and told the Tucson Citizen that GTEC does work all leads, "whether a prospective company pays workers $8 an hour or $75,000 a year."

Nonetheless, Hearon had dismissed the lost jobs as "low-paying" at a meeting of local real estate professionals. That may have been just the right audience for dismissing low-paying jobs. Consider the result of the influx of high-tech in San Diego: a spike in the area cost-of-living and an incentive for builders to focus on expensive, high-end home construction over affordable, middle-income homes.

"They do go into targeting high-income, higher cost housing and that adds to our high cost of living," says Kelly Cunningham, director of the Economic Research Bureau of the San Diego Regional Chamber of Commerce, who worked closely with Weathers. "It's looked at the other way. We have such a high cost of living that we need jobs where people can afford that, and those jobs have been in high tech."

At issue for local Tucsonans is squeezing out $8 per hour jobs for high-tech engineering jobs which require a better educated work force. The result is workers are being brought in rather than hiring locals. A Milken Institute report issued in September gave Arizona its lowest marks for educational investments in science and technology fields, stating Arizona "basically is not training its home-grown talent."

While Weathers was at San Diego's EDC there was a change a few years ago in focus there as well, favoring high-paying tech jobs over anything else.

"That's one of the reasons I think San Diego's economy right now is doing better compared to the rest of the U.S.," says Cunningham.

But an October 1998 article in the local business publication, San Diego Metro Magazine, explored the fact that EDC didn't play well with others when recruiting firms such as biotech Idec. According to the article, Centre City Development Corp. (San Diego's version of the City of Tucson Economic Development Office) didn't know Idec needed space when negotiations were taking place with Weathers' EDC.

Overall, though, there was little controversy about San Diego's EDC just before Weathers left, according to Timothy J. McClain, editor of Metro Magazine.

"On the other hand, they are kind of boring. I can't think of a major accomplishment in recent years that would not have happened if they were not around," says McClain.

But the San Diego chamber's Cunningham says Idec was actually a great win for Weathers and EDC, and a lesson for Tucson. Traditionally, when biotech firms graduate from research and development to manufacturing, they leave San Diego because it's too expensive to manufacture there. "But Idec--through EDC--was successfully convinced to stay in the San Diego region," says Cunningham, who credits Weathers for the deal.

Meanwhile, GTEC's 2003 marketing budget was increased to $442,125, up from the $252,500. Critics wonder if GTEC has its priorities straight and questions the group's expensive marketing effort to "brand" Tucson with a Big Apple-like image to foster a glitzy, high-tech image of Tucson as an enclave of the "New Economy." GTEC expects to unveil the image at its Oct. 23 board meeting. While this was a project in the works before Weathers came on board, if it's a dud he could be tarred and feathered and his future here in doubt.

"People have targeted that (Weathers') job for 20 years, and it doesn't matter who's in there," says another reluctant GTEC source. "They've never liked anybody who's had that job."

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