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As Shutdown Orders Spread, Arizona CRE Is Well-Represented In Corridors Of Power



Gov. Doug Ducey issued a statewide stay-at-home order Monday to stop the spread of the novel coronavirus, while naming essential businesses that can continue operations for now.

Commercial real estate and construction industries are still on that essential services list, a status that remained intact after his executive order.

“We worked closely with the governor’s office last week to submit a request that construction was included in the essential services list, and we were very happy with being a part of that list,” DeMenna Public Affairs partner Ryan DeMenna said.

DeMenna represents the Arizona Subcontractors Association, which carefully observed other states’ essential services lists, where some included construction and commercial real estate services, and some did not. This led to a more proactive and simplified approach from the association when it came to lobbying Arizona officials.

Critics, including many of Arizona’s mayors, believe Monday's executive order doesn't go far enough to penalize those who violate the order or restrict businesses where close contact is required. They also took aim at some of the businesses that have been deemed essential.

“I am sorry, but manicures are not an essential service right now,” Phoenix Mayor Kate Gallego said. “I would like to see the state of Arizona invest more in testing to stop the spread of COVID-19 and provide more support in social distancing. Cities like Seoul, South Korea, that took these measures seriously from the start come out with a healthier community and economy.”

How does the mayor of Phoenix think the city’s commercial real estate industry can pitch in?

“We would love to see our city’s commercial real estate industry use their resources to support the reopening of St. Luke’s Hospital and helping convert Veterans Memorial Coliseum into a step-down health resources facility,” Gallego said. “We are applauding those in commercial real estate who are looking at facilities that could expand healthcare or provide essential services for the homeless.”

The Phoenix City Council will vote Wednesday on a measure to extend resources for current Banner Health hospital construction, as well as new zoning changes.

“We do not have enough hospital beds in Maricopa County during the regular flu season,” Gallego said. “This is the first time in U.S. history an emergency has caused deaths in all 50 states, and we need to act as such.”

The Arizona Subcontractors Association and its CEO, Carol Floco, said they don't want to see the industry grind to a halt like it did during the Great Recession. With elected officials like Arizona Senate President Karen Fann, who has personal experience in the construction industry, they said the industry is well-represented.

“After the recession, we learned that we always have to keep our state’s industry infrastructure intact, and we cannot stop everything all at once or it will cripple our industry,” Floco said. “We worked with several industry associations to identify how to stay smart and keep moving forward during times of crisis, like the one we are experiencing now.”

The tactics include employing as many people as possible and eliminating sudden stops to projects. While this helps the commercial real estate industry, Gallego said that she wants all industries to put humanity first.

“I think we have a lot of elected officials focused on people’s livelihoods, but now we have to focus on people’s lives,” Gallego said. “I am proud of the economic development gains we have made as a state, but the more seriously we take COVID-19 now, and limit essential services, the better our economic development will be in the future.”