Caterpillar move seen as 'shot in arm' for Tucson economy

Caterpillar move seen as 'shot in arm' for Tucson economy
Caterpillar is expected to locate its Surface Mining and Technology Division west of Interstate 10 and south of West Congress Street on what now is a large empty parcel. (Source: Tucson News Now)
Caterpillar is expected to locate its Surface Mining and Technology Division west of Interstate 10 and south of West Congress Street on what now is a large empty parcel. (Source: Tucson News Now)

TUCSON, AZ (Tucson News Now) - Caterpillar announced on Tuesday, May 3, it will be moving its Surface Mining and Technology Division to Tucson.

With it comes 600 jobs which pay an average of $92,000 a year.

Caterpillar is a high-ranking Fortune 500 company.

"It's a big win for Tucson," Mayor Jonathan Rothschild said, voicing a sentiment echoed throughout the Tucson business community.

Caterpillar has been searching nearly a year for a site for its mining division, looking at several cities in several states. The search was narrowed to Denver and Tucson.

"This is the first time we've gone against Denver and won," said Fletcher McCusker, the chair of Rio Nuevo. "These (deals) go to Scottsdale, they go to Phoenix, they don't come to Tucson."

The deal was made for several reasons.

Most agree an important factor was Tucson's proximity to Mexico, where Caterpillar has a large footprint in the mining industry.

A second important factor was that a package deal was worked out with the state, city, county, Rio Nuevo and economic development agency Sun Corridor all participating.

"It showed we were hungry and could work together," said Joe Snell, President and CEO of Sun Corridor. "When we all work together, good things happen."

As part of the deal, Rio Nuevo will build Caterpillar a $50 million headquarters west of Interstate 10 and south of West Congress Street on what now is a large empty parcel.

The company will lease it from Rio Nuevo as part of a 25-year lease agreement.

Rio Nuevo will also give the company $2 million to help in its move to Tucson.

The first employees will arrive this summer and be located in a rented space at 97 E. Congress Street, as part of an incentive package with the county.

The company's economic input into the Tucson economy is expected to be $1.9 billion in the first five years.

"Everyone benefits," Snell said. "Philanthropy, charity, restaurants, entertainment."

The decision to move downtown completes the puzzle which started on the east end of downtown and has slowly marched west over the past decade.

"It's a 10-year overnight success," McCusker said.

It also breaks the stranglehold of government jobs and government industry in Tucson and begins the march toward more diversity, which have had recent troubles and a shrinking workforce.

"I think with the Worldview (spaceport) deal and now Caterpillar we're beginning to build that nexus that's going to take us away from government reliance into seeing the private sector grow and flourish," Pima County Board Chair Sharon Bronson said. "I'm very excited."

But it's what will grow up around Caterpillar's move to Tucson that has business leaders pleased as well.

"We can find ourselves with many ancillary companies, providers and contractors," Dist. 4 Supervisor Ray Carroll said. "It's good news and a shot in the arm for our economy."

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