Report: Tucson ranks high for economic distress, startups could be solution

Published: Jul. 10, 2015 at 6:41 PM MST|Updated: Mar. 2, 2018 at 4:23 PM MST
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TUCSON, AZ (Tucson News Now) - A new report highlighted the City of Tucson as one of the most economically distressed large cities in the country.

Tucson is ranked as ninth in the Distressed Communities Index released by the Economic Innovation Group, a bipartisan advocacy group based in Washington D.C.

Phoenix was ranked 11th.

The index analyzes factors such as from education, housing vacancy rates and income to determine rankings.

Other Arizona cities that made the list were mostly Native American reservations, such as Chambers, Kings Canyon, Lukachukai and Kaibito.

The state of Arizona as a whole, is ranked as the sixth most distressed state in the nation.

Economists said good entrepreneurship and startup companies are the solution to leading Tucson into a better economy.

Startup Tucson was cited as one great example of an initiative that has supported new businesses and helped them thrive.

Justin Williams, CEO of the non-profit company Startup Tucson, agreed with the economists, and said he felt innovation and creativity were crucial in helping Arizona rise financially.

The company helped improve the economy by encouraging entrepreneurship and innovation.

There were about 50 companies working within the program right now.

"On one end we've got rocket scientists looking at building launch systems for schools and bringing the capacity of launching rockets and doing space research down to the level of high schools and universities, to mobile apps," Williams said.

Williams also cited Ventana Medical Systems as being an example of a great startup venture that started with a few people out of the University of Arizona. Now, the company has about 1,000 employees.

Ryan Flannagan credited Startup Tucson with his success. He had once owned a failed tech company, and lost $300,000. He moved to Tucson with a masters degree, and started working as a pizza delivery boy for Papa John's while starting his digital company, Nuanced Media.

"Now we have 12 full time employees and are the leading agency in the state of Arizona," Flannagan said.

Along with hard work, he credited community involvement and support from other small businesses as recipes for success.

"If you do fail, failure is part of life so get up and keep moving," Flannagan said.

Erika and Jake Munoz followed their dreams of owning a restaurant, and quit their day jobs to dedicate their lives to their passion.

The couple started Seis Kitchen and Catering as a food truck in 2012.

Now, they own a brick and mortar restaurant with more than 20 employees at the Mercado San Agustin.

"It probably took six to seven months until we started to feel okay, this is going to work and we were very fortunate to start out when the food truck scene took off," Jake Munoz said.

Erika Munoz added that collaborations with other small businesses to serve food for their establishments also helped fuel their success.

Erin Nutting worked for national insurance companies, when she decided to quit her day job and start her own insurance company.

She kept her overhead low by working out of the house, and launched Integrity Insurance services with one policy, in 2014.

Today, Nutting has hundreds of policies under her.

"I refused to give up, my biggest thing is I wanted to teach my kids if you really work hard, you can achieve anything, and not just say that I wanted to actually let them see me live it," Nutting said.

She added that strong networking and calling experts for advice helped her down the road to success.

"Honestly, I thought I'd be eating Top Ramen for the next three years of my life. Failure is not an option," she added.

For more information on becoming part of Startup Tucson, can check out their website at The nonprofit is currently accepting applications for businesses who are looking to grow. Williams said companies who want to apply should have $150,000 in revenue and have been in business for about two years.

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