Breaking Ground: The plants were there first

This episode explores the environmental and economic impacts of urban development, focusing on the preservation of native plants during construction projects in Phoenix, Arizona.

1. Urban development in Phoenix is accelerating, challenging the balance between growth and environmental sustainability.
2. Local laws require developers to save and sometimes replant native plants, integrating environmental conservation into urban planning.
3. Rob Cater’s business capitalizes on these laws by salvaging plants and selling them back to developers, highlighting a unique model of eco-conscious entrepreneurship.
4. The construction of semiconductor factories, supported by federal funds, is reshaping the local landscape and economy.
5. The episode discusses the broader economic and environmental implications of development projects, including their impact on local water resources.

1: Introduction

Overview of the episode's theme on the balance between development and environmental preservation in Phoenix.
Kyle Riesdahl: "We start today with a ground truth on how businesses cope with economic growth and environmental responsibilities."

2: The Business of Plants

Discussion on Rob Cater's business of salvaging native plants and its impact on local development projects.
Rob Cater: "We've been doing this for 30 years, turning a mandatory conservation effort into a profitable business model."

3: Economic Impact

Exploration of the economic implications of the Chips act on local businesses and infrastructure.
Austin Golding: "The semiconductor boom has accelerated development, changing the economic landscape dramatically."

4: Environmental Considerations

Insight into how urban development affects local ecosystems and the importance of plant conservation.
Kyle Riesdahl: "Local laws and business models like Rob Cater's are crucial in preserving Phoenix’s natural heritage amidst rapid development."

1. Understand Local Regulations: Familiarize yourself with local environmental conservation laws that may affect your property or business.
2. Consider Eco-Friendly Business Models: Explore opportunities to integrate sustainability into your business practices.
3. Support Local Conservation Efforts: Engage with and support local businesses that focus on environmental preservation.
4. Educate Others: Share knowledge about the importance of balancing development with environmental sustainability.
5. Advocate for Sustainable Policies: Participate in community planning and advocacy to push for sustainable urban development policies.

In the latest installment from their trip to Phoenix, “Marketplace” host Kai Ryssdal and Washington Post columnist Heather Long visit Native Resources — a plant relocation, nursery and landscape company — that sits at the intersection of conservation and development amid a semiconductor boom. Plus, takeaways from the Federal Reserve’s policy-setting meeting, a check-in with business owners about wages and an update on a Mississippi barge business.

People

Kyle Riesdahl, Rob Cater, Austin Golding, Justin Ho, Jennifer Nizgota, Madeline Reeves

Companies

Eckiben, al Fresco, Fearless Foundry, Golding Barge Line

Books

None

Guest Name(s):

Rob Cater

Content Warnings:

None

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Kyle Riesdahl
Someday the Federal Reserve is going to cut interest rates. That day, however, is not today. From American Public Media, this is Marketplace in Los Angeles, I'm Kyle Riesdahl. It is Wednesday today, the first day of May. Good as always, to have you along, everybody.

All right, let's see if we can do this. Fed Chair Jay Powell's press conference in two minutes or less. The important points, the subtext and what happens next. You ready? All right, here we go.

The important point when, oh, when chair Powell, are you gonna cut rates? So I don't know how long it'll take. I can just say that when we get that confidence, then rate cuts will be, will be in scope, and I don't know exactly when that will be. Okay, fine. Some subtext then, please.

Jay Powell
What do we now see in the first quarter? We see strong economic activity, we see a strong labor market, and we see inflation. We see three inflation readings. So I think you're at a point there where you, where you should take some signal. We don't like to react to one or two months data, but this is a full quarter and I think it's appropriate to take signal now.

And we are taking signal. And the signal that we're taking is that it's likely to take longer for us to gain confidence that we are on a sustainable path down to 2% inflation. That's the signal that we're taking a lot of signal. Right. Signal for noise.

Kyle Riesdahl
Okay, finally. Now what happens? I think there are paths that the economy can take that would, that would involve cuts and their paths that wouldn't, and I don't have great confidence in which of those paths, I think I would say my personal forecast is that we will begin to see further progress on inflation this year. I don't know that it will be enough, sufficient. I don't know that it won't.

Jay Powell
I think we're going to have to let the data lead us on that. The upshot, then no rate cuts, but no hikes either. Inflation is still too high and they're going to wait for the data. Not bad. Minute and 45 seconds, right?

Kyle Riesdahl
Wall street today, traders do love them some j pal. I'll tell you what, we'll have the details when we do the numbers.

There was some discussion of wages at chair Powell's press conference this afternoon, and that as the chair said, wage growth is going to have to slow down for inflation to get back to the 2% the central bank is looking for. Not completely slow down, Powell said, but to a level that is, and this is his quote, more sustainable over time. So Marketplace's Justin Ho asked a couple of business owners how they are thinking about pay these days, and to the Fed's point, whether the pressure they feel to raise those wages is easing. Things have been pretty busy at Eckiben, a sandwich chain in Baltimore. Owner Steve Chu says he's working on opening up a new location and developing a different restaurant concept, which means he's been doing a lot of hiring all the time.

Austin Golding
We're hiring 24 7365. Chu says to find talented people to fill positions, he has to offer them competitive wages. During the pandemic, Chu says he raised wages around 40% to 50%, in large part because he had no other choice. You know, to be able to compete with Target or Walmart, you know, we have to pay somewhere in like the $20 an hour range. So it was a very, very hard.

Justin Ho
Shock to everybody, including his customers. Chu raised menu prices to cover the higher wages. And he says some customers felt sticker shock. We thought it was going to be awful. We thought we were going to get a lot more blowback than we did.

Austin Golding
But the second we kind of explained why we were doing it, you know, our guests were really receptive and really supportive. And now, since Chu already raised wages, he says the band Aid's been ripped off, even though he's trying to fill about 40 positions right now, the pressure. Is not there to raise wages as much because we already pay higher than our competitors. Not every business has been able to keep up with the competition. Jennifer Nizgota runs a market near San Diego called al Fresco.

Justin Ho
She hired a couple new workers in April, and she's been paying them $17 an hour, just above the California state minimum. You know, these people are qualified for more, but it's also challenging for us to be able to afford to pay those wages. Honestly, Nizkota's been thinking about other ways of boosting your employees compensation. For example, her business runs events, wine tastings, wedding showers, corporate parties, both in the back of her market and at clients homes. This gota says her employees can earn a lot more working those events because her clients are footing the bill.

Jennifer Nizgota
If they want a server to stay, we can charge a different wage than the minimum wage hourly. And as Gota says, for a lot of these events, clients will tip to the tune of a few hundred bucks. And so then that service or Gratuity plus the higher hourly goes directly to our staff. Some businesses have been stretching their payroll dollars by finding workers who want part time positions. All of our team members want to be able to show up about 30 hours a week.

Justin Ho
That's Madeline Reeves, the owner of Fearless Foundry, a marketing and consulting firm near Seattle. Last summer, she decided to only hire part time employees. She's expanded her staff from three to nine. Reeves says a workweek that's 10 hours shorter than usual is a big selling point for her new hires. Some of us put that time towards our families.

Jennifer Nizgota
Some of us put that time towards other creative endeavors, Other Clients, other projects that they have. Outside of fearless, Reeve says there are plenty of benefits for her business, too. For one, part time employees are a lot cheaper than a full time staff. Running a payroll that at Times was upwards of $80,000 a month on top of 401 ks, on top of PTO. All the things that I offered people, it literally didn't work.

Justin Ho
Reeve says her part time staff is also more productive. Like if you're going to be showing up for 30 hours, those have to be 30 really clearly defined productive hours where we're getting, you know, great work from you. Reeve says over the past year, nobody has left the company voluntarily. She says that's a sign that her new Staffing model is working. I'm Justin Ho from Marketplace.

Kyle Riesdahl
Inflation is still a thing. Yes, the economy is growing more slowly, sure, but growing consumers, whatever, their notoriously volatile Moods, are still spending and most businesses are doing all right. So we decided today would be a good day to get a little ground truth on how one of those businesses is doing. Austin Golding is the CEO of Golding Barge line down in Vicksburg, Mississippi. Austin, it's great to talk to you again.

Austin Golding
Great to talk to you, Kai. How is business in the barge business? First things well, volumes are good. We're seeing our business has, definitely is better this year than when I've talked to you in years past. I think we've seen a lot of stabilization in our volumes and demand, and we haven't had things like pandemics to try to recover from or go through.

We have had low water, which we dealt with. We had a low water condition in the entire lower Mississippi river valley, but we've persevered and this year has been pretty consistent, predictable and profitable. That is a function, that strength you're seeing is a function of the strength of the economy. Right. The underlying, the fundamentals, as the politicians like to say, are good.

Kyle Riesdahl
And so you're seeing that. We are. We are seeing the inflation that we've all experienced still linger within the new construction and repair part of our business, though. Oh, say more about that. You know, to build our equipment is more expensive than ever.

Austin Golding
To repair it is more expensive than ever. The ability for me to grow is really inhibited by that cost. Structures. Yeah, we've been talking a long time, you and I, Austin and I have never asked you this, and I probably should have. Where does golding barge line fit in the pantheon of Mississippi river barge companies?

Kyle Riesdahl
Are you guys a giant? Are you medium sized? What are you. Well, the short answer is medium size, kind of a more drilled, a more drilled down on answer in the tank barge world. I would guess we're somewhere between number ten and number 15 with the unique, I would say, disposition that we operate nationwide.

Austin Golding
You have a lot of regional carriers that may be bigger than us, but our ability to go nationwide is really what separates us. How do you get nationwide from the Mississippi river? Do you go out into the gulf and go to other waterways, or you just go up and around sort of the Mississippi? Well, that's kind of. I'm glad you brought that up.

You know, we're connected not only through the parts of the country that everybody's familiar with, the Ohio river, the Illinois river, but we also go all the way along the Gulf coast from Brownsville, Texas, all the way to Panama City, Florida, which includes a lot of locks and dams that help connect us to the system down there that are really aging and are really starting to come on the back end of their useful life. You know, it's interesting you mentioned locks and dams and by extension, infrastructure, because we've been doing a lot of infrastructure on this program with the chips bill and the, the infrastructure law and all that. What I hear you saying is maritime infrastructure ain't getting the attention it needs. No, it's not. I think we're easily overlooked because you do not have locks and dams in your everyday life.

You'll use the same roads, you'll use the same railways, you'll use the same airports, but locks and dams. And I'll throw dredging in. There are things that are out of sight, out of mind that have a huge impact on everyday life. It's a lot harder to lobby for it when the average citizen isn't that aware of it. Do you get good response when you go lobbying?

Kyle Riesdahl
I imagine you spend your time, some of it, on the phone with your relative congresspeople and all that. Oh, yeah. You know, everybody loves a infrastructure idea until they have to pay for it. And, you know, the democratic side, of course, they have their methods of paying for it, which is a higher tax platform, and the Republicans typically want to toll and feed it to death. And so I find myself in a very purple posture going around and asking for these infrastructure projects.

Austin Golding
It's a situation, and I'll run through some quick dates for you. There's four locks into the New Orleans area that really allow our Gulf coast product to be moved in and out. These were all built between 1923 and 1961. Wow. These are four locks and dams that have all had outages within the last six months.

These four locks have caused the american consumer to pay a lot of extra money due to underinvestment in their health and wellness. Well, you have a key point there, right? You have to pass those costs along. You just have to. Well, and there's no choice.

I mean, there's a lot of these cases. There's no pipeline to be built. There's no rail spur to jump on, and there's for sure no highway to offset this type of tonnage. These are things that our country could invest in that would be major, major benefits to everybody and allow, I think, new projects to come online, not just existing projects to benefit. Do you, do you still have your master's license or permit or captain's license, whatever it is that you need to run those barges?

Actually, I don't. Speaking of economics, I came into the working world here in 2009. I got sent to Houston with a brand new suit my dad bought me to go find some business to survive, and unfortunately, didn't get the onboard experience that I was hoping for. It's a pity. It's a pity.

Kyle Riesdahl
You ought to get out there, man. Austin Golding. He's run the family business, Golding bars lines in Vicksburg, Mississippi. Thanks for your time. Thank you, Kyle.

Rob Cater
Coming up, we refer to the summer as El Diablo Bienni, which means the devil has come to town. Well, that can't be good, can it? First low. Let's do the numbers. Dow industrial is up 87 points on this Fed day.

Kyle Riesdahl
Two tenths percent closed at 37,903. Nasdaq down 52 points. Three tenths percent, finished at 15,605. The S and P 500 subtracted 17 points. Also three tenths percent.

5018. You just heard about the state of the barge biz. So let's check out a few marine shipping companies did on Wall street, shall we? Barge operator Kirby Corporation fell nine tenths percent. Commodities shipper Star bulk carriers up nine tenths percent.

Honolulu based Matson Incorporated fell 2%. Hey, let's not get out of the water just yet. In his debut, cruise operator Viking gained 9%. All right, toweling off now. The american maker of clothes dryers and other appliances, whirlpool, shaved off three tenths percent today.

General Electric declined one and three tenths of 1%. Hey, so sometimes it's good to be a malicious hacker, I guess. In a Senate finance committee meeting today, United Health Group CEO Andrew Woody confirmed the company had paid a $22 million ransom to hackers who breached the systems of a subsidiary. Said Woody to the committee. And this is a quote, this is one of the hardest decisions I ever had to make, and I wouldn't wish it on anyone.

UnitedHealth eked out less than a 10th percent today. You're listening to marketplace.

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Kyle Riesdahl
Marketplace with access to so much information, it's hard to feel like an informed, discerning citizen. That's why on make me smart, which is a podcast from Marketplace, we make it easy for you to stay in the know. Hi, I'm Kai Risdahl. Every weekday, Kimberly Adams and I unpack the latest from Washington, DC, the Senate. Minority leader has announced that he will step down as the republican leader.

What's happening in AI? I mean, don't buy at the top, but holy cow, artificial intelligence and all the companies related to it are the hot new thing. And we do the numbers so as a refresher. Inflation is the rate of increase in the prices of things. It's not just sort of things getting more expensive, speed at which things get more expensive, because in a world that's.

Constantly changing, we all need to stay smart. Listen, to make me smart, wherever you get your podcasts, this is marketplace. I'm Kai Rysdal. We've been doing a series past couple of months called the breaking ground about how the trillions of dollars from the Inflation Reduction act, the bipartisan infrastructure law and the Chips act are changing the way the government is in this economy and what that change actually looks like on the ground. This is one of the biggest construction sites I've ever seen.

That's Washington Post columnist Heather Long, one of our Friday regulars. Yesterday we were at a construction site in Phoenix, Arizona, where TSMC, the world's biggest semiconductor manufacturer, is building three new factories. I'm actually surprised how much they have for all that you hear in the headlines of delay, delay, delay. Looks like an airplane hangar, except on, you know, steroids or something. It's enormous.

Today, though, we start in a sort of an oasis in a rapidly developing part of town. Good thing we got the off road rental car. You heard us reporting yesterday about all the stuff getting built in Phoenix, but this story is about the stuff that was on that land first. Man, there's a lot of trees out here. Good morning, ladies and gentlemen.

Rob Cater
Welcome to native resources. Morning, sir. Carter rsdahl. How are you? Good to see you.

Good to see you. This is my colleague Heather. We're in a gated area with rows and rows of desert plants, trees and saguaro cacti, the kind you see on Arizona license plates. We have some things moving in and out, so from a sound point of view, you can let us know whether that is. It's all good.

Kyle Riesdahl
Tell us who you are and where we are. First of all, my name is Rob Cater, and you're in north Phoenix, an area that 20 years ago was just a cotton farm, but right now has been just fully developed. Fully developed is right across the street. There's a goodwill and a pet care center, a brand new luxury apartment complex. Five minutes down the road, there's a movie theater and a shopping center.

Rob Cater
We have a property here of about eight acres, and we store plants that we salvage from the field and resell to the public, as well as store for developers that we work with, it's quite the business. How long you been doing this? We've been doing this for about 30 years. Rob Cater's company works with landowners to salvage native plants from and for future construction sites. And for 30 years now, local laws have required developers here to save certain species and in some cases, replant them back into the landscape.

From an aesthetic point of view, we look at each and every tree as being a living statue. So when we replace the trees, we put them in areas of the project that show their best side, that we. The way we prune trees, we look at them as living art, and that is appreciated, especially in the retail market. This is a business at the intersection of conservation and development. Rob Kater found a niche saving trees from destruction because local laws require it.

Kyle Riesdahl
And he's making money doing it by selling some of those trees back to high end property owners. The company does more than 10 million in Revenue every year. Let's. Let's take a stroll over this one. That'd be great, because we got literally, we have trees on.

On Flatbed, Gooseneck trailers here. These trees are going to customers who are buying them in the. In the retail market. So. All right, so how much is.

So what is this tree, and how much do I have to pay for it? Okay. That tree is called an ironwood tree. It's a five foot tree in diameter, and it's about $8,000. Wow.

So if I'm a developer doing a project and I need 150 trees, it's not nothing. It's not nothing. And that's a really important point. Kai. What we have been able to do with development developers is make them understand that not only is there an environmental advantage to saving the trees, both water and also shade and doing the right thing, but there also is a monetary advantage.

Rob Cater
You can't buy these trees at a nursery. These trees grow too slowly. So as they look out at these trees, they see a value that really makes sense. So how many people do you employ? Have you been on a hiring spree?

We employ about 80 full time, and then we employ and utilize what's called the h two B temporary worker program, and we bring in anywhere from about 60 to 100. And how do you handle working outside in the summer? That's really a key, and it's a safety issue for all of us. The answer is, get out there early. We start at 04:00 in the morning, often before the, you know, before the sun really comes out.

But the other aspect of that is the increased water usage that we have to go ahead and deal with. So winter is nice like today, and, you know, we refer to the summer as El Diablo bienna, which means the devil has come to town. But I wanted to show you a story. Saguaro. I'm here to see the saguaros.

Right, so we're going to walk past. All these plants on the flatbed. So has business picked up with the semiconductor boom? Business has picked up for the last 30 years. Phoenix has been on a tear for a long period of time, but it has accelerated and decelerated at times.

Kyle Riesdahl
As we said yesterday, Phoenix has been key to the US semiconductor industry for decades. Decades. Intel has been making chips here since the 1980s. But recently, with the federal money coming in through the Chips act, huge expansions are happening. Remember, TSMC, the world's biggest chip maker, is building three new factories at a cost of more than $65 billion, just a couple of miles from where we're standing.

And that is a business opportunity. TSMC came here about three years ago and we had daily call to Taiwan to explain to them our system, which went from one manager to another manager to another manager every day because it was difficult for them to wrap their hands around why we have to save the trees. But eventually they caught on when we explained to them that we could save not only the trees, but in the long run, these trees would save them money on water. So basically, once we were able to monetize the concept to them, then it's easy to do the right thing if you see it as being an advantage to the company. So we were out there yesterday.

I mean, obviously it's a building site right now, huge. Are you saying that some of these plants and trees will go back to that site? What we did at TSMC and what we normally do is we salvage the materials and then we nursery them on site. So up to 1000 trees were salvaged at TSMC and right now 600 have been replanted and 400 are still in their nursery, ready to replant. So they're somewhere out there in the corner of that construction site?

Rob Cater
That's right, that's correct. It can take Saguaro cacti up to 100 years to start growing arms, which is why the fully grown ones can sell for thousands of dollars. So back in the corner. Oh, there you go. Yeah, now we're starting.

Kyle Riesdahl
Rob had three of them about 20ft. High, where we're about to transfer about 2000 of these from their native state into a nursery. But as more companies, jobs and people come to Phoenix, the land underneath those plants is getting more valuable, too. You got eight acres here. Developers are, I'm sure, calling you.

It's got to be tempting. It is tempting. It is tempting. Right now we're just taking it day by day. But there's a lot of development.

Rob Cater
We have actually lost three of our largest nurseries to development because of the numbers that were put in front of them. And that caused an incredible change in our market and our supply when these nurseries that we were all dependent upon turned over and sold to large scale development. Is that a good thing or a bad thing? I don't think we're going to stop at. And therefore I think the thing to do is if we're not going to be able to stop it, let's at least figure out a way that we can balance it and make it something where it's just not.

Let's just blow it away. It's becoming supercharged, though, that growth with TSMC and all the money that's coming in here, right? There's going to be literally thousands and thousands of people coming to this area, which 30 years ago was desert to do jobs in high tech and semiconductor development. I mean, it's a big change in a short period of time. Oh, it's a huge change.

And the idea is, if change is coming, we need to understand it and get society ready for it. That's part of the long game that we're talking about here in Phoenix. The government incentives for semiconductor companies are changing what this economy looks like in all kinds of ways. You might not expect from that full to bursting pipefitters training center we visited yesterday to this eight acre tree storage lawn. Both of those places are essential to rebuilding the semiconductor supply chain in the United States.

Kyle Riesdahl
Another essential part of that growth, readying the workers for the factories themselves. I've been unemployed for over a year now, and I came across semiconductor tech and thought I'd give it a shot. On the program tomorrow. A fresh start may be if, by the way, you've been hearing our stories from Phoenix past couple of days and thinking to yourself, water, kai, water Phoenix is a desert. Well, our climate change podcast, how we survive, just did a whole season on that.

You can find it@marketplace.org or wherever you get your podcast. And I would be remiss if I did not point out here that Heather long had a whole big piece in the Washington Post this week about our reporting trip. The link, of course, is on their website or ours. You decide this final note on the way out today, just because it is going to come up in the next, what, seven months until the election. There was a question today to chair Powell about the Fed and how the politics of this moment might affect what the central bank is trying to do.

Here's chair powell one last time. You know, it's hard enough to get the economics right here. These are difficult things. And if we were to take on a whole other set of factors and use that as a new filter, it would reduce the likelihood we'd actually get the economics right. So that's how we think about it around here.

Jay Powell
And, you know, we're at peace over it. We know that we'll do what we think is the right thing when we think it's the right thing, and we'll all do that. And that's how everybody around here thinks. So I can't say it enough that we just don't, we just don't go down that road. If you go down that road, where do you stop?

Kyle Riesdahl
Six months. Six months till the election. But it's going to be long, no matter how long it is. Our media production team includes Brian Allison, Jake Cherry, Jessan Dooler, Drew Jostadt, Gary O'Keefe, Charlton Thorpe, Juan Carlos Dorado, and Becca Weinman. Jeff Peters is the manager of media production around here.

I'm Kai Rizdahl. We will see you tomorrow, everybody.

This is APM. With access to so much information, it's hard to feel like an informed, discerning citizen. That's why on make me smart, which is a podcast from Marketplace, we make it easy for you to stay in the know. Hi, I'm Kai Risdahl. Every weekday, Kimberly Adams and I unpack the latest from Washington, DC.

Justin Ho
The Senate minority leader has announced that he will step down as the republican leader. What's happening in AI? I mean, don't buy at the top, but holy cow. Artificial intelligence and all the companies related to it are the hot new thing. And we do the numbers so as a refresher.

Inflation is the rate of increase in the prices of things. It's not just sort of things getting more expensive, it's a speed at which things get more expensive. Because in a world that's constantly changing, we all need to stay smart. Listen, to make me smart, wherever you get your podcasts.

Kyle Riesdahl
Listen, to make me smart, wherever you get your podcasts.