Phoenix falls somewhere in the middle of the pack of large Western cities for its cost-worthiness to a company considering relocation, says John Boyd, who recently completed a study on Phoenix and where it ranks among other Western cities. The Boyd Co. helps such national clients as Time Inc., Pratt & Whitney, Chase Manhattan Bank and Progressive Insurance in the site-selection process.

The cost of running a large company in Phoenix is about $14.5 million annually. The survey based its figure on a company in an 85,000-sf space with 350 employees. That figure is lower than the operational costs for a company relocating to most California markets, as well as Denver and Houston, but is greater than what a company might pay in Salt Lake City or Portland.

The list is based on operating variables such as, labor, electric power, office space rent prices, corporate travel and benefits packages.

In the past decade, it has become more expensive to do business in Phoenix, he says. Office and industrial rental rates are higher in Phoenix than in other regional markets that used to have high lease rates, and the cost of housing for employees has risen in the past 10 years also, he says.

On the plus side, he says, Phoenix has Sky Harbor International Airport, with convenient flights both nationally and internationally; an always growing labor pool; and large tracts of available land. Phoenix also possesses a climate that not only makes it easy to get employees to relocate to, but reduces the likelihood that there will be some kind of work stoppage due to poor weather or natural disasters.

The competition for Phoenix for corporate relocations is no longer restricted to just Western cities or even the rest of the country, he says. Phoenix is now going up against cities like Edmonton in Alberta, Canada, which Boyd places on the top of his list of affordable cities for companies. A national healthcare system and a low exchange rate make Edmonton attractive, he says.