SIERRA VISTA — Taking the temperature of business countywide is not an easy task, so on Monday the Cochise County Board of Supervisors and six city managers held a forum to find out just how sick the local economy is in these troubled economic times.
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Owners and managers from some of the largest businesses, like Castle & Cooke and Freeport McMoRan Copper and Gold Inc. to some of the smallest, like Tombstone’s Castlebrook Construction and a Willcox Radio Shack. There was a lack of participation of ranchers and farmers, mom and pop businesses, tourism, health care, defense contractors and other commercial areas. When and if the forum meets again, people from those areas of business will be included.
“We all have heard so much about the economy, we thought it was time to see how we’re doing. The thought has been that Cochise County is unique. We have (Fort Huachuca), cross border traffic and retirees that provide some insulation. I don’t feel that we’ve taken as big a hit as the state or the nation,” said Mike Ortega, county administrator.
As owner of Big Nose Kate’s and The Longhorn Restaurant in Tombstone, Steve Goldstein pointed out that since the various cities are “destination locations,” it might be in the best interests of all business that rely on tourism to work together to promote the county in a more comprehensive way. He supports cross-marketing with other destination locations in the county so that the tourist dollars can be kept inside the county.
“Our business is in a decline,” Goldstein said.
Jacque Cook, owner and operator of Coronado Vineyards, indicated her business at the vineyard has also dropped off a bit.
There was talk about how the rising fuel and food prices continue to strap people who otherwise might be out there spending money.
Vickie Merritt, owner of the investor Edward Jones branch in Sierra Vista, said, “People in the lower economic levels have trouble finding the extra cash now to invest or save. We’ve been seeing people dip into the savings and retirement accounts. They have no choice. It’s sad.”
Speaking for National Bank of Arizona, which has several branches in Cochise County, Kerry Holyoak of Sierra Vista said the company was seeing fewer foreclosures than other parts of the state and nation, but the company is not where it was last year. That is a good thing though since the housing market needed correction.
“It’s now where it should be,” Holyoak added.
The developers at the forum agreed.
Rick Coffman of Castle & Cooke commented, “I agree we are somewhat protected here.”
Thanks to the expansion of Fort Huachuca and the stream of retirees coming into the county, the company is still doing a good business.”
VA loans alone make up 70 percent of the business. But, he added, contractors and sub-contractors are having some trouble with fuel costs and increased cost of materials. Right now the company has scaled down to build homes for first-time buyers to make the homes more affordable to house hunters.
“We’re below where we were three years ago,” Coffman told the group. “And I don’t think things will improve until 2009. It’s getting hard to pass real costs on to the consumer.”
With development in India and China and the materials needed to follow through on projects, the international market is more or less dictating the prices of construction materials and metals, like copper for power lines and appliances, Coffman explained.
While higher copper prices are good for mining companies, like Freeport McMoRan Copper and Gold Inc. they’re not good for the manufacturing companies and contractors.
“There is a ripple effect, and we will continue to see costs continue to move up. That will squeeze us,” Coffman lamented.
Century 21 Real Estate owner George Scott of Benson is not disheartened with the current housing market. After all, Benson sits in a prime location on I-10 and near Tucson. Still, his business today is not what it was three years ago. His beef is not with the oil companies or the lending trade but with heavy regulation in the county and some of the municipalities.
“We’re getting so many regulations that it’s hard for a developer to come in and do business. There are some opportunities in the housing market, but it seems to have bottomed out,” said Scott, a former mayor of Benson and current executive director of the new Southeast Arizona Economic Development Group.
For a small construction company in Tombstone, it’s hard to keep the crews working. Shirley Castle, owner, said the majority of her business has been in home repairs and maintenance. Gone are the days of remodeling and home expansion. She isn’t sure the prognosis is good and thinks it may be too soon to tell. The really bad news could be yet to come.
“I’m not complaining, but I see it coming. It’s hard to keep the costs down to the customers when everything is increasing. My crew won’t get a raise this year,” Castle added. “For some reason, people don’t think contractors are affected by high costs.”
Business isn’t so good for those in the small business sector. Judy Gignac, Bella Vista Ranches, owns several commercial properties that are leased. Some have been vacant for a while and some are unable to keep up with the rent.
“They tell me that the people who used to come in and spend $30 are now only spending $10. They’re finding it hard to pay their bills,” Gignac said. “Even the nonprofits are hurting since donations are down.”
People are also buying fewer cars pointed out Frank Gonzales of Lawley Automotive in Sierra Vista. Though the service departments have been kept busy with maintenance and repairs, figures are not what they were last year.
In Bisbee, Tom Mosier, owner of the Copper Kings Baseball team and the Lavender Jeep Tour, was one of the few who saw an increase in business. He’s aiming to bring folks from Phoenix and Tucson down for a fun trip. With fuel prices so high, driving great distances and even flying can keep people closer to home and a Bisbee trip is not that far. Mosier promotes the team and the tours he offers, as well as Tombstone and other areas of the county where day trips to the parks will leave the visitors wanting to stay longer or come back again.
The Copper Queen Hotel in Bisbee is seeing a drop in business but not as bad as Phoenix’s 30 percent, said owner Dan Fink. For the first time, the hotel may not be able to meet the monthly budget as estimated.
“We had to look at different ways to improve cash flow, so we started selling wine under our own label, and that has helped,” he said.
As for Ron Bastian, owner of the Radio Shack in Willcox, he is still selling goods to customers, though not the big-ticket items.
“People still come in to buy small things, so we’re holding our own right now,” Bastian stated.
Debbie Roche, CEO and general manager of Tombstone Federal Credit Union, offered, “We’re looking through rose-colored glasses here. We could be in trouble. This could get worse.”
So, it appears that it’s not quite business as usual in Cochise County, even though most all were upbeat about their state of affairs.






Comments
Copperhead wrote on Jun 30, 2008 2:04 PM:
Juarez wrote on Jun 26, 2008 1:26 PM: