Tucson, Arizona – Pima County’s economic development depends more on demographic, geographic, and political factors. Unlike Phoenix, which is seeing rapid growth, Yuma is agriculturally focused, leaving Pima County at a crossroads.
Current Pima County Projects
One of the county’s first projects is to expand roads and enhance public transportation. The most significant project regarding expanding roads is the Sonoran Corridor transportation project. The project was brought to life in 2018 and plans to connect I-10 and I-19, improving access to the Tucson International Airport, attracting new businesses, and growing existing ones. Despite years of planning, actual construction remains dependent on federal funding.
Raytheon Missiles & Defense, one of Pima County’s largest employers continues to expand its operations adding approximately 1,000 jobs over the last three years. Their new facilities south of the airport represent over $500 million in investment. The presence of Davis-Monthan Air Force Base further solidifies the region’s critical role in national defense.
The University of Arizona’s Tech Park continues growing, hosting over 80 million companies. Recent additions include several biotech startups and renewable energy firms. The nearby “The Village” development, once stalled, has resumed construction with new housing and retail spaces.
Downtown Tucson’s revitalization has slowed compared to previous years. While several multi-purpose developments, including the Bautista complex, broke ground, the pace lags behind Phoenix’s downtown transformation.
Challenges Pima County Faces
Water scarcity challenges Pima County, which has limited CAP water compared to Phoenix. This has forced stricter development restrictions. The Drought Contingency Plan further reduced Colorado River allocations, complicating future service expansions.
The Mexican border creates a unique economic ecosystem for Pima County, with much trade going through Nogales. Cross-border manufacturing supports thousands of jobs, with Mexican assembly paired with U.S. distribution centers. Local companies specialize in cross-border logistics, and Mexican shoppers generate about 30% of sales at shopping centers near I-19.
Pima County continues to grow but, at roughly half the rate of Phoenix’s Maricopa County, which creates different economic development needs.
What’s Working
Aerospace and Defense remains crucial to Pima County’s economy, with Raytheon employing over 13,000 workers and 200 smaller suppliers forming near Tucson International Airport. This area benefits from skilled labor, specialized facilities, and tax incentives, showing stability during economic downturns. Davis-Monthan Air Force Base contributes an estimated $1.5 billion annually to the local economy.
Healthcare is expanding in response to demographic shifts, with Banner-University Medical Center’s $400 million project adding 650 new positions. Employing about 40,000 people (12% of the workforce), while the UA medical school helps address physician shortages despite nursing vacancies still being a problem. Specialized centers serve both locals and medical tourists from Mexico.
Tourism generates $2.1 billion annually and supports 25,000 jobs, with peak activity from October through April. Hotel occupancy exceeded pre-pandemic levels in 2023-2024, reaching a record 87% in February. Outdoor recreation drives significant tourism, with Saguaro National Park reporting record visitation and cycling tourism growing considerably.
Missed Opportunities
Manufacturing recruitment in Pima County falls short of the 2020 strategic plan goals, with only one major facility (Vector Launch) materializing instead of the projected four. Despite advantages like rail access and proximity to highways, the region struggles against Phoenix and Yuma due to Sonoran Corridor project delays, higher utility costs, a smaller industrial recruitment budget, and persistent skills gaps in advanced manufacturing.
Tech growth remains uneven and limited compared to Phoenix. While downtown Tucson hosts about 150 startups, venture capital investment totaled just $87 million in 2024 versus Phoenix’s $1.2 billion. Challenges include difficulty retaining homegrown startups, slow progress on innovation initiatives, remote work complications, rural broadband gaps, and brain drain with 60% of STEM graduates leaving within three years.
Housing affordability presents significant challenges, with development failing to meet demand, especially for workforce housing. Construction costs have risen 35% since 2020, pushing average new home prices above $450,000. Regulatory hurdles, neighborhood opposition, low rental vacancy rates (under 3%), and inadequate affordable housing initiatives exacerbate the problem. These housing constraints now directly impact economic recruitment efforts and force longer commutes for workers.
