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The headquarters you never heard of

by Paola Banchero
Arizona Daily Star

Tucson lost AlphaGraphics. MDA may be next. But plenty of companies still call the Old Pueblo home - including some potential corporate powerhouses.

The company began in a two-car garage in Sierra Vista. All five founders worked for the Information Systems Engineering Command at Fort Huachuca.

We have Larson, not Lucent.
Buffalo Exchange, not Boeing.

Ephibian, not ExxonMobil.

Tucson has none of the household-name headquarters that bring to mind spacious office campuses, armies of well-paid, white-collar workers and generous corporate philanthropy.

What's more, it has lost one of its best-known headquarters and could lose another: AlphaGraphics left for Salt Lake City earlier this year, and now the Muscular Dystrophy Association is considering a move to Los Angeles.

But many smaller companies with offices throughout the nation - often largely unknown outside their industries - proudly call the Old Pueblo home.

Those firms may not lend Tucson the clout, civic pride or philanthropic power of a nationally known Fortune 500 company. But because they are small and agile, they can afford to take risks larger companies cannot. Some may even join the ranks of those coveted economic powerhouses that create jobs, invest in their communities and pull other firms to town.

* Ephibian

What they do: Internet applications development and enterprise management for Fortune 500 companies and online ventures.
Founded: 1996
Employees: 32 in Tucson, 42 companywide
Corporate address: 5151 E. Broadway

* The Larson Company

What they do: Build natural-looking and themed environments for places such as the Monterey Bay Aquarium in California and the Bronx Zoo
Founded: 1976
Locations: Tucson Employees: 200 in Tucson, 100 in the field
Corporate address: 6701 S. Midvale Park Road
First known as the "fake rock" people, Larson occupies 150,000 square feet of design, fabrication and construction space on Tucson's South Side.

"We're not a huge company, but we have an impact internationally and nationally. That can bring a little shine to Tucson," said Andrew Messing, president of The Larson Co., which builds naturalistic habitats for zoos, private homes and other settings worldwide.

To keep, attract and help expand similar businesses here, Tucson must provide the nudge that growing businesses need - capital, a skilled work force and an atmosphere supportive of entrepreneurship, said state Rep. Carol Somers, R-Tucson.

"You have to grow your own corporate headquarters," said Somers, who has spoken with business owners recently at forums around the state. "Very seldom do you see a big headquarters move to Tucson. But we can look for ways that encourage start-up companies. Then we have to retain them here."

Corporate clout

Communities prize large headquarters for the prestige and philanthropy they bring home.

Having a couple of big headquarters can bring more firms to an area, as corporations like areas vetted by their peers.

To a lesser extent, headquarters also mean jobs, specifically coveted high-paying positions.

"If we had a concentration of headquarters, it would be easier to attract companies here," said Scottsdale executive recruiter Bill Swartz, an economic-development veteran. "A headquarters raises the profile of a city. It's an acknowledgment that the environment is in place."

A tale of two cities

Phoenix and Tucson are buffeted by the same winds.

In Phoenix, Dial Corp. is for sale. Homebuilder Del Webb sold to Pulte in the summer, plucking another headquarters out of the Valley of the Sun.

As a result, Phoenix slogged through an identity crisis, as residents wrote, met and talked about what went wrong.

Tucson went through a similar episode after AlphaGraphics claimed a limited number of workers and nonstop flights all but forced it to leave. Now, the MDA's plan to study a move to Los Angeles has reignited Tucson's insecurity.

Pima County Supervisor Ann Day asked whether the MDA thinks it is "too big and too important for Tucson." A neighbor wrote MDA officials: "We could not ask for worse neighbors, so hurry away."

The response has left MDA's longtime executives smarting.

* Universal Avionics Systems Corp.

What they do: Flight management systems for small aircraft
Founded: 1981; headquartered in Tucson since 1988
Locations: Norcross, Ga.; Redmond, Wash.; Wichita, Kan.; Zurich, Switzerland
Employees: 195 in Tucson, 610 systemwide
Corporate address: 3260 E. Universal Way
Universal Avionics transferred its manufacturing arm to Tucson from Seattle in early 1999.

"We don't want to leave Tucson, and we may not be going elsewhere," said Gerald C. Weinberg, MDA senior vice president. "But we do have to figure out what is economically better for the MDA - we have an obligation to do that."

Not quite the Fortune 500

On the Fortune 500 list of publicly traded companies, only a few call Arizona, Colorado, New Mexico, Utah and Idaho home. Cities from Chicago to New York have the greatest number of headquarters.

"It's tough to uproot a company deeply entrenched in a community, like Eli Lilly and Johnson and Johnson," said Steve Weathers, CEO of the Greater Tucson Economic Council.

Tucson has planted the seeds of entrepreneurship here. It has formed a task force to solve work-force-development issues that includes members from the public and private sectors. A network of independent investors, called "angels," just celebrated its first anniversary. Two venture capital firms have raised about $35 million in 2001 and are poised to fund firms.

The city also is home to the Tucson Technology Incubator, which nurtures startups to profitability. And it is encouraging technology transfer that turns academic ideas into marketable products.

The Greater Tucson Economic Council is also making sure the business climate helps employers such as Raytheon and Texas Instruments, both of which are based elsewhere but operate here. GTEC representatives joined Mayor Bob Walkup and University of Arizona President Peter Likins on a visit to Texas Instruments' headquarters in Dallas to say thanks for its investment in Tucson after buying Burr-Brown Inc.

"Headquarters generally don't mean that many jobs. It's like the jewel in your crown," Weathers said. Still, Tucson wants to be in the running for any jobs Raytheon, Texas Instruments and IBM create.

Home-grown successes

The biggest push toward a more mature economy comes from small businesses themselves. Weathers estimates that they account for nine out of 10 local companies.

* Buffalo Exchange

What they do: New and used clothing sales
Founded: 1974
Locations: 24 in nine states.
Employees: 329 companywide, 76 in Tucson
Corporate address: 209 E. Helen St.
Kerstin Block turned her habit of scavenging thrift stores into Buffalo Exchange.

One of those home-grown firms is The Larson Co. It recently completed work on a surf-themed restaurant inside the Pascua Yaquis' Casino del Sol and is bidding on the proposed aquarium in the Rio Nuevo Downtown district.

Larson Co. President Messing is aware of Tucson's shortcomings, such as the limited number of nonstop flights and small pool of managerial talent. But he says they rarely hamper business. His employees crisscross the globe and when the firm has a management position to fill, it usually can find the person here at home, he said.

Growing our own

Most locally headquartered companies are home-grown.  A few, such as Universal Avionics Systems Corp., are imports.

The manufacturer of flight management systems moved to Tucson in 1988, due to the work force. Salaries were higher in Southern California, and workers lived so far away that the firm had to stagger shifts.

"Any company that is in a growth mode is going to have this problem: You need more people," said Universal Avionics Executive Vice President Chuck Edmondson.

Recognizing that the shortage of talented workers is a nationwide problem, Universal Avionics has become involved in work-force development. One executive chairs the Pima County Workforce Investment Board, and the firm is recognized as the No. 1 employer of graduates from the Southern Arizona Institute of Advanced Technology.

"Would it help to have other headquarters here? Sure. But hiring has not been a problem to date. On the contrary, we've hired people from all over the States that fell in love with this place," Edmondson said. "We're not going anywhere."