AzBusiness magazine May/June 2014

HEAT: Healthcare 96 // Energy 100 // Aerospace 104 // Technology 108 Connect » Guide » Inspire

MAY // JUNE 2014

Louis Basile, CEO of Wildflower Bread Company and Steve Chucri, president and CEO of the Arizona Restaurant Association

sizzle

Helping the economy $4.95 $4.95

Arizona’s restaurant industry leads nation in growth

1 AB | May-June 2014

Table Of Contents 6 Up Front

8 First Job

14 CEO Series

16 Healthcare

18 Marketing

22 Law

24 Banking

26 Dining

28 AZ Small Business Association 34 Corporate Angels

38 AREA Awards

46 San Diego Travel Guide 52 Foodist Awards 65 Phoenix CVB

The HEAT is on Consider what happened in the decade after the Flinn Foundation helped launch Arizona’s first Bioscience Roadmap in 2002: • The bioscience sector added jobs at nearly four times the national rate.

• Bioscience establishments in Arizona grew at a rate that exceeded the national average.

• Bioscience wages in the state outpaced those in other private-sector industries.

So the economy of Arizona is rejoicing at the prospect that the strategic plan that has guided Arizona’s fast-growing bioscience and healthcare sector since 2002 has been rebooted and Arizona’s Bioscience Roadmap: 2014-2025 will provide a blueprint for success for another decade.

But that’s not the only Roadmap in Arizona. The Arizona Energy Consortium’s Energy Roadmap is expected to help the state diversify its energy menu.

And the recently launched Arizona Chapter of the Aerospace & Defense Forum is expected to provide a boost to that industry.

With all the innovation happening in Arizona, the minds behind Az Business magazine decided those industries needed a voice of their own. So inside this issue, you will see the first issue of HEAT, which is an acronym for healthcare, energy, aerospace and technology. HEAT spotlights the innovators, trends and economic engines that are shaping Arizona’s business landscape.

We should have known all along that Arizona would be known for its HEAT.

81 HEAT Cover photo by Shavon Rose Az Business on the Go: AzBusinessMagazine.com 2 AB | May-June 2014

Michael Gossie Editor in chief michael.gossie@azbigmedia.com

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So stop wondering and start saving with SRP. Find your rebate and more at savewithsrpbiz.com.

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Arizona innovators earn Healthcare Leadership Awards Az Business magazine presented its 2014 Healthcare Leadership Awards on Thursday, April 10 at the Ritz Carlton in Phoenix. Here are the winners:

➤ Legal advocate: Kristen Rosati, Polsinelli. Rosati helped establish two nonprofits in Arizona that support health information exchange and health information technology.

➤ Physician: Jimmy Chow, IASIS Healthcare. Chow improved the field of orthopedics by helping to design and teach a hybrid technique of a minimally invasive total hip replacement where the surgeon builds a new hip from inside the body.

➤ Healthcare executive: Robert L. Meyer, Phoenix Children’s Hospital.

Meyer is credited for the turnaround of Phoenix Children’s Hospital from the edge of financial failure to a $588 million expansion that created one of the largest pediatric medical centers in the country.

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➤ Bioscience company: Translational Genomics Research Institute (TGen).

TGen has received numerous grants to support research into brain cancer and brain injuries, advanced cancers, Parkinson’s, rare childhood disorders, and more. ➤ Community outreach: Barbara Kavanagh, Arizona Myeloma Network.

Kavanagh’s mission is to change the lack of information and support resources for myeloma cancer by forming the Arizona Myeloma Network and the Living with Myeloma Conference. ➤ Healthcare advocate: Dr. John Chen, Maricopa Integrated Health System.

Chen sees patients who are in urgent need of treatment because of their lack of dental insurance or location in third world countries. ➤ Insurance provider: Blue Cross Blue Shield of Arizona. Marking its 75th anniversary in Arizona, BCBSAZ focuses on providing the best value in health insurance as well as outside programs targeted to children and their families to help reduce childhood obesity. ➤ Medical center or hospital: Scottsdale Healthcare. As a nonprofit, Scottsdale Healthcare not only employs 6,500 staff members, but is known for its innovative technology, research and patient care. ➤ Medical company: Ventana. Ventana is driving personalized healthcare through the development of “companion diagnostics” to identify patients most likely to respond favorably to specific therapies. ➤ Medical research company: Banner Alzheimer’s Institute. BAI has undergone a major prevention trial to evaluate a treatment in cognitively healthy older adults at the highest known genetic risk for developing Alzheimer’s disease at older ages. ➤ Researcher: Venkatesh G. Ramaiah, Arizona Heart Hospital. Ramaiah successfully created the “un balloon,” which is used to remodel thoracic endografts without the wind sock effect. ➤ Lifetime achievement: Linda Hunt, Dignity Health. Hunt has worked diligently with legislators, business leaders, educators, scientists and community organizations to give Arizonans better healthcare and raise the bar of knowledge.

President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Associate editor: Amanda Ventura Interns: Jacob Green | Jesse Millard Sara Parker | Leslie K. Hughes Az BUSINESS MAGAZINE Senior account manager: David Harken Account managers: Ann McSherry | Shannon Spigelman ART Art director: Mike Mertes Graphic designer: Shavon Thompson Photo intern: Courtney Pedroza DIGITAL MEDIA Web developer: Eric Shepperd Digital manager: Perri Collins MARKETING/EVENTS Manager: Angela Vaughn OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Cindy Johnson SCOTTSDALE LIVING MAGAZINE AZRE | Arizona Commercial Real Estate Director of sales: Steve Koslowski AZ BUSINESS LEADERS Director of sales: Jeff Craig RANKING ARIZONA Director of sales: Sheri King EXPERIENCE ARIZONA | Play Ball Director of sales and marketing: Zoe Terrill AZ BIG MEDIA HOME SHOWS SCOTTSDALE HOME & GARDEN SHOWS Exhibit directors: Kerri Blumsack | Tina Robinson

Az Business magazine is published bi-monthly by AZ BIG Media, 3101 N. Central Ave. Suite 1070, Phoenix, Arizona 85012, (602) 277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $4.95. Bulk rates available. Copyright 2014 by AZ BIG Media. All rights reserved. No part of this publication can be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from AZ BIG Media.

O

EDUCATION CONFERENCE & BUSINESS PARTNER EXPO Greater Phoenix - Valley of the Sun Chapter of the Association of Legal Administrators

O

n behalf of the Greater Phoenix-Valley of the Sun Chapter of ALA, I invite you to attend the Chapter’s Annual Education Conference & Business Partner Expo.

We are thrilled to be hosting this year’s event at the Phoenix Convention Center. The event will offer: A strong educational program giving you the opportunity to learn from leaders in the fields of employment law, diversity, marketing and legal project management.

Discover new products, resources and services from over 50 Business Partners in the Exhibit Hall.

Stop by the Chapter’s booth to learn more about the Association of Legal Administrators.

Lunch will be served, and there will be an afternoon reception with exciting prize drawings courtesy of the Chapter and our Business Partners.

Registration opens May 1, 2014. Register online at www.alaphoenix.org/expo_2014

Hope you can join us for a day of education, networking and fun!

DeDe Drenning, CLM Chapter President

AUGUST 13, 2014 PHOENIX CONVENTION CENTER, SOUTH BUILDING

Speakers: Breakout Session Room I 9:00 a.m. – 11:00 a.m. - Joseph Clees, Ogletree Deakins, “Hot Topics in Employment Law” 1:00 p.m. – 3:00 p.m. - Marianne Trost, The Lawyers Coach, “The Art of Rainmaking” Breakout Session Room II 9:00 a.m. – 11:00 a.m. - Mark Lassiter, The Law Offices of Mark T. Lassiter, “Introduction to Legal Project Management” 1:00 p.m. – 3:00 p.m. - Booker Evans, Gallagher & Kennedy, “Diversity” REGISTER ONLINE AT www.alaphoenix.org/expo_2014 *All Sessions May Qualify for Continuing Legal Education Credit

UP FRONT Fashion forward

Buffalo Exchange celebrates 40 years of success by taking a road trip By SARA PARKER

L

PROVIDED

SHE’S TRENDING: Founder and President Kerstin Block

opened the first Buffalo Exchange in Tucson in 1974 with her husband, Spencer.

ike some of the fashion items it sells, Buffalo Exchange is going retro for its birthday.

The Tucson-based fashion reseller is celebrating its 40th anniversary with a cross-country tour featuring a renovated 1969 Airstream trailer converted into a vintage pop-up shop. The sleek, silver trailer is decked out with the store’s name, hippie buffalo logo, designs and website information as well as a personalized Bufex74 license plate.

Three reasons “This project has highlighted the great artistic talent we have Phoenix business in our company,” says Kerstin websites fail Block, who opened the first Buffalo David Chen, CEO of Strikingly.

Exchange near the University of Arizona in 1974 and has grown com and one of the world’s the company to 48 locations in foremost experts on how 16 states. “It truly celebrates the to create more simple and unique creative culture of Buffalo effective business websites, Exchange.” did an in-depth analysis of Block’s focus on buying, selling, hundreds of Phoenix business and trading fashionable and websites and found that most affordable clothing set the store fail because of three key apart from other resellers from the mistakes: beginning. >No. 1: Unusable on mobile Also setting the company apart was its commitment to the Mobile traffic now accounts for communities it serves. Buffalo 20 percent of all website traffic, Exchange’s Tokens for Bags but most Phoenix business program donates five cents to a websites don’t optimize for local charity every time a customer mobile navigation, reduced opts out of taking a plastic bag. clicking and infinite scrolling.

Buffalo Exchange has raised nearly > No. 2: Too much content $525,000 for local charities and Most business websites in saved 10.4 million bags with this Phoenix have excessive content program. in complicated page hierarchies In keeping with the company’s environmentally friendly values, instead of focusing visitors on almost everything in the renovated what is most important. trailer was purchased at thrift > No. 3: Out-of-date news stores, flea markets, and salvage Because most businesses in yards. The trailer’s clothing racks Phoenix don’t have a plan to were fashioned from plumbing keep their website current (and pipes in tribute to the original pipe have to pay an outside company wall racks used in the first Buffalo to do so), their websites are Exchange store. chock full of old information The tour will run through May 22.

The billion-dollar branding club Ever ask yourself this question: What is the most valuable brand in Arizona?

In the first and only study of its kind, leading brand valuation consultancy Brand Finance has answered that question and determined how much the brands of America’s top companies are really worth.

According to the Brand Finance US 500, Arizona’s most valuable brand is Avnet, 6 AB | May-June 2014

with a brand value of $2.4 billion. The other Arizona companies to make the list are PetSmart ($2.3 billion), Freeport McMoRan ($1.9 billion) and Swift ($1.3 billion).

In case you’re wondering, Apple has been crowned the world’s most valuable brand for three consecutive years, with a brand value of $105 billion.

that harms the brand.

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UP FRONT

The most unusual items submitted on employee expense reports Costs for a family vacation, wedding anniversary dinner and pet food are items you’d expect on personal credit card statements.

Unfortunately, they’ve also appeared on employee expense reports, according to a Robert Half Management Resources survey.

Some of the most questionable items CFOs said they’ve seen on employees’ expense reports include lottery tickets, a teepee, a fine for crashing into a toll booth, cigarettes, hot tub supplies, expenses for his son’s birthday party and a submission for something that had already been expensed and reimbursed..

Whoops!

SLICE OF SUCCESS: Joseph Ciolli, CEO of Grimaldi’s Pizzeria, celebrated his company’s 11th anniversary in February.

Read more of Ciolli’s interview at azbigmedia.com.

Photo by COURTNEY PEDROZA, AZ BIG MEDIA

Ciolli knows how to deliver

Grimaldi’s CEO learned the importance of customer service while handling a newspaper route

J

By LORIN PARKHURST

oseph Ciolli is CEO of Grimaldi’s Pizzeria, which has seven Arizona locations, more than 30 across the country, and close to 2,500 employees.

What was your first job?

For approximately five years — from ages 13 to 18 — I had a paper route that was about three miles from my house. I lived in New York and had to ride my bicycle even in the winter.

What lesson did you learn from that first job?

Keep good records. Some people only wanted Sunday deliveries, so I had to keep track of the different accounts. Sometimes I would let the account balances add up too long and had to handle collection of dues. I also had to realize

that people depended on me. This was before the Internet — before any other digital means of communication to stay up on the news ... All these things really taught me that the customer comes first as long as it is within reason. I still to this day do my best to accommodate all my customers.

What was your first job in your current industry?

I worked for one company that had restaurants around the country. For about two years, they had me doing everything from cooking to waiting tables to bartending.

Do you remember your salaries from those first jobs?

In 1980, I was making $75 per month for the route, plus $50 in tips. In 1993, as a full-time (working 70-80 hours per week) manager at the restaurants, I was making $500 per week.

What’s the key to surviving in Arizona’s dining industry?

Consistency. Quality. Offering the best service.

A lot of restaurants come out of the gate really strong, but then they start losing that edge. I think it is important to realize that our customers are spending their hard-earned money and they want consistency. They want to know that when they go some place, they will get the same quality and service every time they dine with us. Solid structure, procedures and systems ensure the consistent quality of our products and service.

Recognizing the importance of advertising to business Effective advertising enables sellers to compete with one another for the attention of buyers. Some of the Valley’s best enablers were honored at the 2014 Phoenix ADDY Awards. ~ Big Winners were Mark Anthony Munoz, principal at RIPE 8 AB | May-June 2014

Creative, who was named Ad Person of the Year; Doug Bell of Kitchen Sink Studios, who was named Creative Director of the Year and Copywriter of the Year; and Shane Tang of the James Agency, who earned the title of Art Director of the Year.

This ad was generously donated by Stevens Leinweber Construction

Leadership, integrity and fresh ideas.

T

“ he bank’s responsiveness and accessibility have been the key ingredients in making our aggressive expansion plans happen. As a result, we purchased a new headquarters building and opened eight new locations, hiring 400 employees.” — Joe Ciolli, Owner, Grimaldi’s

It’s a recipe for growth, no matter what’s on your plate.

Like many local businesses, Grimaldi’s Pizzeria has an appetite for growth. When owner Joe Ciolli wanted to expand his restaurant nationally, he relied on the strategic expertise of a bank that shares his passion for hard work and forward thinking.

Alliance Bank knows that when it comes to opportunity, timing is everything.

And no bank is better poised to act quickly and think strategically than the state’s largest locally-owned and headquartered bank.

Put Alliance to the test. Call us at 602.386.5500 to have one of our decision-makers in your office this week.

AllianceBankofArizona.com

A division of Western Alliance Bank. Member FDIC. 04/14

UP FRONT

PERSONALIZED SERVICE: Fired Pie lets customers choose their own dough, sauce and toppings for 11-

inch fresh-made custom pizzas that are ready in four minutes. Read more about Fired Pie at azbigmedia.com.

Rolling in the Dough Fired Pie owners create a unique concept to take a slice of the fast-casual dining pie

F

ast casual is trending. For proof, look no further than Fired Pie, the build-your-own pizza and salad concept created by Rico Cuomo, Doug Doyle and Fred Morgan, who met while working at California Pizza Kitchen. Their business exploded from nothing into four locations in eight months.

“We decided to take the jump and open our own restaurant,” Morgan said, “and that’s how we’ve come to be here.”

Cuomo, Doyle and Morgan all opened up 80-100 restaurants during their careers, so when it came to opening a business, they knew what they were doing.

When looking for locations, they sought out second-generation restaurants that had already been built and could easily transition into a new location. They bought two such restaurants and are leasing two as well.

At those second-generation locations, everything that is needed for a fully functional restaurant is already installed,

By JESSE MILLARD

Morgan said, making it at least 50 percent cheaper to open up a new location.

“We had limited money and knew we wanted to get several locations open quickly,” Morgan said. “(Buying second-generation restaurants) was the quickest way to do that.”

That strategy allowed the partners to open up a new Fired Pie in just two weeks. They are utilizing that cost-effective plan to open a new location every 90 days. Morgan said Fired Pie hopes to have 15-20 restaurants open within two years. While the partners have financed the venture, they are looking for a financial partner to help fund expansion.

Depending on who becomes their partner, franchising could become a possibility, but that isn’t in the owners’ immediate plan.

What is in their plan is to capitalize on the popularity of fast-casual dining and on a product they know: pizza.

“We deliver an awesome product at an awesome price in a quick amount of time,” Cuomo said.

Workplace illness: Real and imagined There are a lot people going to the office when they’re sick and a lot of people staying out of the office when they’re not sick.

According to an OfficeTeam survey, seven in 10 professionals admit they frequently go to work when they’re feeling sick. And managers know that: 65 percent said ailing employees 12 AB | May-June 2014

head into the office frequently.

On the flip side, a poll conducted

by Monster found that 44 percent of respondents would say they had a medical appointment and another 15 percent would just say they were ill when they are actually interviewing for a new position.

Photo by COURTNEY PEDROZA , AZ BIG MEDIA

App helps you get the dirt on potential employees His resume shows great experience and the interview made him a strong candidate for the job. But did you know that the applicant sued two of his previous employers and was arrested several times? Erik Knight, founder of Phoenix-based dirtsearch.org, has created a free app to give you the “dirt” on potential employees. After finding that 60 percent of DirtSearch’s website traffic came from cell phones, Knight developed an app that allows users to obtain information on the go. “Mobile people are much more impatient,” Knight said, and his DirtSearch app caters to today’s fast-paced world by ensuring quicker results.

The current app provides basic information about people, but an upcoming version will offer additional information about businesses and individuals, giving users a more “deep search.”

The app can be downloaded

from DirtSearch’s website or Android and iPhone app stores.

CEO SERIES Personalized approach

CTCA’s new CEO says research will reduce fear for cancer patients

By MICHAEL GOSSIE

P

ersonal experience led Matt McGuire to begin a career at Cancer Treatment Centers of America.

“I’ve lost three of my four grandparents to cancer,” said McGuire, who was named CEO of CTCA at Western Regional Medical Center in January. “I remember when I was 13 years old, my mom told my brother and I that Grandma had cancer and I could just see the fear in my mother’s eyes.”

To help ease some of that fear for patients, McGuire is leading CTCA at a time when the hospital is taking an aggressive role in cancer research. Most recently, CTCA was part of of study that found two cell surface receptors that might be responsible for the most common form of lung cancer spreading to other parts of the body.

What have been the biggest challenges of CTCA’s increased focus on research?

We had to essentially build the program from the ground up.

The hiring of (Director of Clinical Research) Dr. Glen Weiss and the progress he has led has been extraordinary. We have to be more responsive to new ideas. We have 14 people now on the research team and it’s been a challenge to find those people and to learn the complexities and regularities of the pharmacy industry.

Why did you decide to add research?

The primary driver is that it brings additional hopeful options to patients. As personalized and genomic medicine takes hold as we look into the future, having the most recent targeted therapies available for our patients is so in line with our mission that we knew it was time.

What qualities does an effective CEO need to possess?

Good communication skills. A clear vision and an ability to rally people around that vision. Energy and passion. The last thing is they need to be resilient. The perseverance that is needed to adapt in this ever-changing world is absolutely fundamental. I try to put relationships front and center. I want our stakeholders to know that their voice and concerns will always be heard.

14 AB | May-June 2014

Photo by SHAVON ROSE, AZ BIG MEDIA

SETTING PRIORITIES: “The founding principal of CTCA

is putting patients first in everything we do and being on a constant quest to bring them hope,” says CEO Matt McGuire.

“They push us to innovate.”

What are your goals as CEO of CTCA? We have to be the leader in the delivery of personalized cancer care. We are going to be the leader in how genomics medicine will change the way we administer cancer care.

With what we are starting in our research program, it’s going to be an amazing evolution about how cancer care is delivered. We have to lead in that space.

I expect that 10 years from now, because of innovations that are going to come, the cancer diagnosis won’t be nearly as fearful as it is today. It will be hopeful because people will know there are places like CTCA and other cancer care providers who can help. I liken it to how the ACL injury was a career-ending injury in sports 10 or 15 years ago. Now, you have Adrian Peterson leading the NFL in rushing after an injury that would have ended his career 10 years ago. I think we’re going to look back 10 or 15 years from now and say, “Back then, cancer used to scare people.”

GO BIG Make azBIGmedia.com your new home page for news

New to Market: Arizona Center for Law and Society

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HEALTHCARE

An Iron will Couple’s battle against cancer helps inspire an innovative healthcare business

By ALISON BAILIN BATZ

H

“

e’s a techie,” says Mary Purkiss of her husband, Ed. “And she’s a visionary,” says Ed Purkiss of his wife, Mary.

Together, they took a pair of tumor-sized lemons and made more than lemonade – they made a future for themselves while helping medical practices nationwide.

Here’s how.

In 2000, the Purkisses were parents to three children under age 10 and business partners with a successful group of call centers. Their business allowed them to travel the world and help oversee the careers of more than 500 employees.

Then, while the couple was getting ready for their annual company holiday party, Ed noticed a lump in Mary’s breast. He convinced Mary to get it checked out – just in case.

“Your wife has breast cancer and we need to schedule a mastectomy immediately,” the doctor told a shocked Ed. Less than three weeks later, Mary was taken away for surgery and began a healing process and reconstruction process that required six surgeries and took two years.

“We decided to sell our business to focus on both Mary’s cancer battle and the children,” Ed says.

16 AB | May-June 2014

Photo by SHAVON ROSE, AZ BIG MEDIA

The entire family’s life revolved around doctors’ offices. It was there that Mary and Ed were continuously mystified at how busy the specialists and doctors were dealing with the business of cancer – and its technologies – and how it took precious time from patient care.

Because they had experience running a business and were comfortable with rapidly changing technology, the Purkisses ended up as paid consultants to radiation oncology practices, eventually handling their doctors’ technology and electronic medical records needs as well.

“Doctors got into business to save lives, not to deal with (technology),” said Mary.

The Purkisses studied the issues doctors faced with “the cloud,” online storage and other technology issues.

By 2008, the time seemed right to launch their own venture: Iron Medical Systems.

In that first year, the Purkisses – working from their home – had three clinics as clients.

By summer end – less than a decade later – the Purkisses will have grown the business to more than 70 clients and medical clinics or centers across the country.

Their Iron Medical System cloud product allows physicians to work anywhere from any device. The system is built to run efficiently and backs up constantly. The cost of the system is lower than if clients bought the hardware themselves and tried to comprehend it all. It does not replace practice tech staff either – just helps them become more efficient.

“We are actually in the process of expanding to the East Coast to keep up with all the work we have out there,” says Ed.

THE RULES HAVE CHANGED now vote every hour

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Midwestern University Arizona College of Osteopathic Medicine College of Pharmacy–Glendale College of Health Sciences College of Dental Medicine–Arizona Arizona College of Optometry College of Veterinary Medicine Midwestern University Clinics Multispecialty Clinic | Dental Institute | Eye Institute Which companies would you recommend doing business with?

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Industry Leaders of Arizona recognizes businesses and business leaders who through hard work and innovation think beyond traditional boundaries and help lead the future of Arizona business.

NOMINATE at azBIGmedia.com Nominations close August 22, 2014

Awa and Drids Reception nn Februa er Event in ry 2015

MARKETING

The pathway to gold Winning awards is great, but it’s not the end goal for an effective advertising campaign

A

wards are a prize or other mark of recognition given in honor of an achievement. And undoubtedly no matter what type of business you’re in, it’s certain that everyone loves to win them.

However, for the the team at Cramer-Krasselt, if you go into a creative brand assignment with the goal of just winning awards, you’re most likely not going to win anything, not the least of which is the consumers’ hearts and wallets.

Every agency zeroes in on output. What’s the ad, what’s the commercial, what creative can we bring to the client? C-K zeroes in on outcome. If you get that figured out and concentrate on that as the goal, you will not only get great creative, but great creative that works. If you make the goal to drive real businessbuilding results, ADDY-winning campaigns will simply be the gold icing on the cake.

So what’s an ADDY? Hosted by the Metro Phoenix Chapter of the American Advertising Federation, the annual ADDY Awards honor advertising excellence in print, radio, television, digital, out-of-home and other categories. And this year, our team at C-K proudly brought home 18 of these distinguished, shiny trophies.

At C-K, we believe the brand with the most friends wins. At its core is a big, truth-heavy insight. And when it’s delivered with the right execution, a big truth changes the conversation and connects in a way that lasts.

We have a process that looks for ideas that not only fascinate, but motivate new behavior. With help from data, debate, psychology and math, we look for the things a brand can do, not just say, what brings people closer to it.

We work on the real problem.

Einstein once said if he had just one hour to save the planet from an impending crisis, he’d spend 55 minutes of his precious little time figuring out the true nature of the crisis.

Digging deep to understand the real root of the “problem” and to find the real inflection point that leads to insights can ultimately help to change the way people see a brand; and that specific change in the category conversation about a brand is what truly matters.

It’s a journey.

18 AB | May-June 2014

Ian Barry Marketing

Bringing people closer to a brand works best when you leverage the nature of a prospect’s decision-making process.

We call this the consumer journey. And using it makes our thinking organically true to the people it hopes to influence.

No category operates the same way. And different segments walk their own ways to a brand. Understanding the path that prospects are on unlocks enormous marketing power.

It’s collaborative and fast.

In today’s world of connected media and connected consumers, brands need connected thinking.

Our process features a series of fast-moving collaboration points: leaders from advertising, digital, media, public relations, search engine optimization (SEO), search engine marketing (SEM), engagement planning, you name it. All thinking together to develop creative ways to leverage the insights we’ve discovered.

Last but certainly not least, to create noteworthy work means surrounding yourself with top talent. We hire the very best people in the industry, from around the country, and internationally, both on staff and outside partners.

C-K has been fortunate to have a history of success at the ADDYs. As mentioned, we took home 18 awards, in multiple categories, for clients including Arizona Science Center, MGM Grand, Monterey County Convention and Visitors Bureau, Phoenix Coyotes, Salt River Project (SRP) and the Valley Toyota Dealers.

Most importantly, we’re proud that these award-winning campaigns helped grow our clients’ business and make them a lot of new friends.

Ian Barry is senior vice president and executive creative director of the Phoenix office of independent marketing and communications agency Cramer-Krasselt.

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LAW

Trollpatrol Lawmakers hope patent reform will curb frivolous litigation that exploits innovation

By JACOB GREEN financial resourses so drastically that it doesn’t make sense to fight.”

The broad nature of these vulnerable patents allows the firms to rake in profits as they draw in settlement fees from hundreds of “violators,” functioning with very low operating costs as they do not produce anything themselves.

David Anderson, a board member of Entrepreneurs’ Organization Arizona, has been a victim of patent trolling.

“They kind of hold you hostage,” he said.

In 2013, Anderson was threatened with a lawsuit for violating a patent relating to multiuse computers his company used. The computers transferred data to be printed or scanned from printers to the machine. The threat was issued through a letter, he said, that claimed the lawyers’ client owned the patent to the copiers and would press charges if a settlement couldn’t be reached.

“It’s like old mafia money where you have to pay thugs to back off,” he said.

Anderson is among the lucky minority who challenged the patent troll and did not have to settle. Nevertheless, the frustration did not escape Anderson.

“It’s incredibly frustrating because they don’t even provide a service,” he said. “It’s not like I could have called them if the copiers broke and said, ‘Hey, our copiers aren’t working, can you come fix them?’ But they still want money.”

The issue has gained steam since the end of 2013, with Obama drawing focus on the issue in his State of the Union address.

“Let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation,” he said in the address.

Obama has been particularly active on this cause, issuing five executive actions and seven legislative recommendations last year.

A piece of legislation has emerged from the increased attention on patent trolls. Despite some resistance, the legislation is gaining steam.

The Innovation Act, which has already passed the House of Representatives, is waiting to be reviewed by the Senate Committee on the Judiciary.

“That’s significant because that levels the playing field with patent trolls,” Catalfio said.

Their cases are usually weak and frivolous and they have a lot more risk in actually suing on those because whereas now they have no operating expense, they would have significant potential liability.”

20 AB | May-June 2014

financial resourses so drastically that it doesn’t make sense to fight.”

The broad nature of these vulnerable patents allows the firms to rake in profits as they draw in settlement fees from hundreds of “violators,” functioning with very low operating costs as they do not produce anything themselves.

David Anderson, a board member of Entrepreneurs’ Organization Arizona, has been a victim of patent trolling.

“They kind of hold you hostage,” he said.

In 2013, Anderson was threatened with a lawsuit for violating a patent relating to multi-use computers his company used. The computers transferred data to be printed or scanned from printers to the machine. The threat was issued through a letter, he said, that claimed the lawyers’ client owned the patent to the copiers and would press charges if a settlement couldn’t be reached.

“It’s like old mafia money where you have to pay thugs to back off,” he said.

Anderson is among the lucky minority who challenged the patent troll and did not have to settle. Nevertheless, the frustration did not escape Anderson.

“It’s incredibly frustrating because they don’t even provide a service,” he said. “It’s not like I could have called them if the copiers broke and said, ‘Hey, our copiers aren’t working, can you come fix them?’ But they still want money.”

The issue has gained steam since the end of 2013, with Obama drawing focus on the issue in his State of the Union address.

“Let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation,” he said in the address.

Obama has been particularly active on this cause, issuing five executive actions and seven legislative recommendations last year.

A piece of legislation has emerged from the increased attention on patent trolls. Despite some resistance, the legislation is gaining steam. The Innovation Act, which has already passed the House of Representatives, is waiting to be reviewed by the Senate Committee on the Judiciary.

“That’s significant because that levels the playing field with patent trolls,” Catalfio said.

Their cases are usually weak and frivolous and they have a lot more risk in actually suing on those because whereas now they have no operating expense, they would have significant potential liability.”

The resistance to the bill is coming from small businesses and universities that believe the bill would harm legitimate patent litigation. The concern is that businesses with a legitimate patent would be scared to protect it if they have to fear reimbursing the defendants legal fees.

Catalfio believes that this resistance is unwarranted.

“I think that those concerns are being overplayed and I think the legislation will ultimately help curb patent abuse,” she said.

While the Innovation Act waits in Congress, Catalfio said that she encourages small businesses to voice support for the reform to their trade associations and to Attorney General Tom Horne to push for “Arizona-specific legislation.”

In the meantime, if you do get a letter, she suggest that you do not react immediately.

“It’s probably not best to be first out of the gate,” she said.

“You’re probably one of many and you want to stay off their radar screen as long as you can.”

If the letters keep coming, though, she said to contact a lawyer to calculate your next move based on your circumstances.

“You want to force them into it and make them do the work,” she said.

The Innovation Act The Innovation Act hopes to make procedural changes to the patent system to discourage the tactics preferred by patent trolls. The major provisions are these: ➤ Require specificity in patent lawsuits.

Right now, patent plaintiffs can file lawsuits that are vague about exactly how the defendant allegedly infringed the plaintiff’s patent. The bill would require lawsuits to be more specific.

➤ Make patent ownership more transparent.

The Innovation Act requires patent plaintiffs to name anyone who has a financial interest in the patent being litigated.

➤ Make losing plaintiffs pay. The Innovation Act makes it easier for a victorious defendant to recover the costs of defending against an unsuccessful patent lawsuit.

➤ Delay discovery to keep costs down.

A big reason patent lawsuits are so expensive is that plaintiffs often force defendants to produce millions of pages of e-mails and other internal documents to help them build their case. The Innovation Act would delay this phase of the litigation process until after the courts have addressed legal questions about the meaning of patent claims.

➤ Protect end users. A common troll tactic is to sue end users (such as coffee shops offering their customers WiFi access) rather than technology vendors (such as the manufacturer of the WiFi equipment). The Innovation Act allows technology vendors to step into the shoes of their customers and fight lawsuits

against trolls on their customers’ behalf.

Donna Catalfio

David Anderson 21 AB | May-June 2014

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22 AB | May-June 2014

23 AB | May-June 2014

BANKING The

dollar dilemma M

ost of us put more effort into planning a vacation than planning our financial future.

According to a study issued by BMO Harris Financial Advisors, only 38 percent of Arizonans have a financial plan, yet a majority admit a financial plan plays a critical role in achieving key life goals, such as saving for a home and being comfortable in retirement.

“There’s an obvious disparity when it comes to financial plans – most people know they need one, but they don’t have one,” says Larry Skolnik, regional sales manager, BMO Harris Financial Advisors. “No matter your income level, a financial plan can be an essential component to achieving your financial goals and ensuring the fiscal security of you and your family.”

Experts say a financial plan helps people work toward their short and long-term goals, providing a roadmap that outlines the path from where they are today to where they want to be in the future.

“Everyone should have some type of financial plan,” says Jason Miller, vice president and director of financial planning – Western U.S., BMO Private Bank. “Whether you are just starting out in your working years or nearing retirement, a solid plan is crucial to reaching your goals and protecting yourself and your loved ones.”

One crucial mistake people make is assuming

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Financial plans play a critical role in achieving key life goals, but most people don’t have one

By MICHAEL GOSSIE

that they cannot afford to create a financial plan and will do so when they are making more money in the future, says Lisa S. Jackson, a certified public accountant and financial advisor with Whitman & Jackson CPAs. “There is no better time to start than immediately,” she says.

Miller says the goal of a financial plan is to understand exactly where you are today and where you want to be in the future and then determine the necessary steps to get from point A to point B. A financial plan should include an analysis of where you currently are and what risks and/or challenges you currently face, as well as an analysis of how likely you are to reach your financial goals. Common areas included in a financial plan may be: $ Budgeting and cash flow management $ Asset allocation and investment

management $ Retirement planning $ Risk management (e.g. life insurance coverage, disability insurance coverage, long-term care, creditor protection, etc.) $ Estate planning “When establishing goals, it is recommended to include dollar and time specific targets in order to regularly measure the plan with clarity,” says Mary Collum, senior vice president and director of private banking, National Bank of Arizona. “Staying true to the vision is very important and will take discipline on both the planner and individuals’ part. Circumstances such as consistent injections of savings for the future, coupled with a plan to enjoy life today and live within one’s means, will weigh in on how successful the plan is.”

One of the most important elements to consider is making sure your financial plan is comprehensive and takes into account various possible outcomes, experts say.

“One of the most important elements of a plan is to make sure you are testing the outcome of your goals based on various economic environments such as rising interest rates, inflation, economic expansion or deflation and unforeseen events,” says Curtis L. Smith, registered investment advisor and wealth advisor for Raymond James Financial Services.

Smith’s list of things to consider when establishing your financial plan include: $ Asset and investment allocation $ Retirement accumulation and retirement income forecasts $ Risk management items (liability coverage, life, disability, long-term care and health insurance) $ Estate and philanthropy planning $ Your economic and lifestyle goals (retirement needs, savings goals, housing goals, vacations, etc.) $ Family legacy goals Another mistake people make when establishing the goals for their financial plan is not looking at all their investment options.

“People can get too focused on one investment strategy and forget to look at all options,” says Erik Pedersen, vice president of AXA Advisors. “The one they are focused on might not be the most suitable to reach their goals.”

Once your goals and plan are established, experts say you must remember to keep your financial plan organic and revisit the plan often.

“Be sure to revisit the plan when your goals have changed or events have happened in your life such as marriage, divorce, loss of job, inheritance or children going off to college,” Pedersen says. “But, there is truly never a bad time to revisit your financial plan.”

Mary Collum

Jason Miller

Lisa S. Jackson Megan Koopman Hope Leibsohn

Erik Pedersen

Larry Skolnik

Curtis L. Smith

Advice from experts Thinking about creating a financial or estate plan? Here is what experts advise: Megan E. Koopman, Certified Financial Planner Professional, MK Financial Solutions: “Do not wait. I have heard amazing feedback from my clients after establishing their financial plan. Their only wish is to have done it sooner.”

Hope Leibsohn, member, Sherman & Howard: “Planning for death as well as incapacity is critical. However, the appropriate documents are not one size fits all. One element is clear and that is to focus on the individual’s distinct objectives and then craft the estate plan accordingly.”

“Jason Miller, vice president and director of financial planning – Western U.S., BMO Private Bank: “Remember that financial planning is not a one-time event, but rather something that you do throughout your life.”

Curtis L. Smith, wealth advisor, Raymond James Financial Services, Inc.: “Start the process by having a discovery meeting to make a priority list of things that are important to you, your family, and your business. Arrange your goals by time-frame — long-term (more than 20 years), intermediate (10-20 years) and short-term (5 years or less).”

Once established, it’s been proven that financial plans will keep you financially responsible and healthy. According to the BMO Harris Financial Advisors study, 85 percent of Americans who have a financial plan say those plans have helped them achieve their goals, and 61 percent wish they had created a financial plan sooner.

“We are quick to take our car into the shop when the engine light blinks, giving us peace of mind our vehicle will take us safely to the next destination,” Collum says. “Take charge of your financial world with this same sense of urgency in order to create and ensure you are headed on a successful journey to your financial destination.”

25 AB | May-June 2014

DINING Paul Martin’s American Grill 6186 N. Scottsdale Rd. Scottsdale, AZ 85253 480-991-9342 paulmartinsamericangrill.com

PROVIDED

CLASSIC CUISINE: Renowned restaurateur Paul Fleming, the man behind Fleming’s Steakhouse and Valley-based P.F. Chang’s China Bistro, has now opened Paul Martin’s American Grill,which focuses on natural, sustainable and seasonal food at a moderate price.

Taste of success

Fleming creates another winner with Paul Martin’s American Grill By MICHAEL GOSSIE

P

aul Fleming has defined Arizona’s dining scene.

He is widely regarded as one of the restaurant industry’s most innovative and creative concept developers. Associated with a number of critically acclaimed restaurants, Fleming developed P.F. Chang’s China Bistro, Fleming’s Prime Steakhouse & Wine Bar and Pei Wei Asian Diner. Scottsdale-based P.F. Chang’s grew rapidly during its first five years and went public in 1998.

“I like the excitement of adapting to the evolving needs of customers and the changing trends that affect us all,” says Fleming. Searching out investments in the 1980s, he found the restaurant business particularly appealing. Ruth’s Chris Steakhouse in New Orleans impressed Fleming and eventually, he obtained the development rights in California, Arizona and Hawaii. Opening his first restaurant in Beverly Hills in 1984, Fleming operated Ruth’s Chris Steakhouses for 12 years.

A businessman with a degree in criminal justice, Fleming spent nine years in the oil and gas leasing industry before pursuing his passion for restaurant concept development.

For his latest concept, Fleming partnered with restaurateur Brian Bennett to create Paul Martin’s American Grill. Based on their mutual vision to create the restaurant they always wished was in their neighborhood, Paul Martin’s serves contemporary, yet classic American dishes made with the same high quality ingredients found in top chef-driven restaurants but offered at accessible prices. The Paul Martin’s mantra is “seasonal and delicious.”

The minds behind Paul Martin’s could have added “fresh” to that mantra. As I learned on a recent visit, everything on the menu is prepared from scratch (they even do their own

26 AB | May-June 2014

butchering) and they keep it local by using seasonal products from Valley farmers and purveyors, including Black Mesa Ranch, Crow’s Dairy Farm, Schreiner’s, Hayden Mills, Queen Creek Olive Mill and others.

My friends and I started with Spinach Dip, Town Dock Calamari, Jumbo Wild Prawn Cocktail and the Asian Salad.

While all were exceptional, the buttermilk batter on the calamari was perfect.

For our main courses, we decided to all order something different and pass the plates, which proved to be a brilliant decision. The Blackened Ribeye, Grilled Polenta, Black Cod and Brick Chicken all tantalized our taste buds in different ways.

But all were so exquisitely prepared that it’s impossible to pick a favorite. That said, the Brick Chicken came with mashed potatoes that melt in your mouth like cotton candy.

The desserts — particularly the Raspberry Creme Brulee and the Banana Cream Pie — were the perfect ending to an extraordinary dining experience.

Beyond the extraordinary food that we’ve come to expect from Fleming’s establishments is a drink menu that features 75 wines by the glass. The service, atmosphere and ambience at Paul Martin’s are also phenomenal.

“Paul Martin’s timeless interior design and floor plans, combined with our well-trained and gracious staff, creates an atmosphere that is both inviting and comfortable,” Fleming says.

“We serve excellent food, from top quality meat and peak-of-theseason produce to carefully sourced seafood and more. At the same time, we price our menu and wine lists to draw customers back again and again.”

Winton Churchill once said, “My tastes are simple. I am easily satisfied with the best.” He would be more than satisfied after dining at Paul Martin’s.

Master-Salt Cellar-AZBusMag-12.10:Layout 1

12/7/10

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Featuring the Valley’s largest selection of fresh fish and seafood • Live Maine lobster, Alaskan King Crab and Yakimono Hawaiian Ahi are just some of the delicacies that make the Salt Cellar Restaurant so popular • Maryland crab cakes, shrimp San Remo on artichoke pasta as well as charcoal broiled fish and Cajun-style blackened seafood are additional menu items you’ll want to try • Quiet, cozy and intimate, the Salt Cellar is a favorite for those who appreciate fine seafood • Don’t miss our popular twin happy hours daily from 4:00pm to 7:00pm and again from 10:00pm to 1:00am.

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3:33 P

ARIZONA SMALL BUSINESS ASSOCIATION

Membership

has its privileges Arizona Small Business Association’s legislative efforts and mentoring program help move small businesses from start-ups to successes By MICHAEL GOSSIE

R

ick Murray, who became chief executive officer of the Arizona Small Business Association in February of 2012, has moved the organization into the 21st Century, helping ASBA get engaged in social media so it can become even more connected with its membership.

Az Business caught up with Murray to talk about small business in Arizona.

What IS the biggest issue facing small business owners in Arizona?

Staying relevant. In this world of technology, trying to find out what the small business customer’s needs are is a constantly moving target. That’s how it’s always been, but the landscape of those barriers has changed. How does a small business market itself with social media? There are so many different ways to get the word out and it can be a very complicated and expensive proposition, but it can also be a very inexpensive proposition, depending on how well they know their market.

ASBA offers programs to help small business owners with marketing and understanding social media.

Has the impact of the economic downturn eased?

One of our major pain points is access to capital for small businesses. We’ve seen small business lending start to improve 28 AB | May-June 2014

since the economic downturn.

Banks are seeing a lot more applications come in, but they have higher standards they have to comply with in order to give a loan. As small business owners, it’s even more important to have solid credit in order to have access to those traditional funding sources. There is also a new industry of alternative financing that is growing in popularity. We teach our businesses not to look at the interest percentage, but at the cost of the money and the return on investment. If you take out a high-percentage loan that you pay back in five years, the cost of money is going to be less than if you took 12 years to pay it off.

What is ASBA’s GREATEST RECENT accomplishment?

Last year, when we looked at the transaction privilege tax, Arizona was one of only four states that did not have a statewide mechanism to pay your sales tax. In Arizona, we had about 60 different taxing entities. In the Valley, every city had its own taxing entity. It created a logistical nightmare for those businesses that had clients in several different communities.

We found that some of our small businesses were being asked to prove their taxes from three, four or five communities every year.

Imagine the regulatory burden that created for a community. So getting tax reform passed was a major win for us and it makes Arizona a much better place to do business.

Photo by SHAVON ROSE, AZ BIG MEDIA

OPPORTUNITY KNOCKS: “When we talk about small

business, we talk about economic development opportunities,” said Rick Murray, CEO of the Arizona Small Business Association. “Economic development opportunities that bring jobs to Arizona are good for small business.”

Legislative priorities Here are the Arizona Small Business Association’s Top 5 legislative priorities for 2014, according to Jerry Bustamante, ASBA’s senior vice president of public policy: HEALTHCARE: Ensure Arizona small businesses have access to superior healthcare plans, while complying with the Affordable Care Act. TAXATION: Working to reduce taxes for Arizona small businesses and making it easier to comply with the state’s tax code.

REGULATION: Reducing burdensome regulations, reporting requirements and rules that increase the cost of doing business and stifles innovation.

ECONOMIC DEVELOPMENT: Providing resources and focusing on measures that will retain Arizona businesses and support their expansion.

EDUCATION: Advocating for higher educational standards and appropriate funding to meet the needs of Arizona employers.

29 AB | May-June 2014

ARIZONA SMALL BUSINESS ASSOCIATION What are ASBA’s legislative policy priorities?

Things have been relatively quiet because it’s an election year, but our priorities were really more about economic development opportunities. Economic development opportunities that bring jobs to Arizona are good for small business.

How do economic wins like landing Apple affect small business?

The impact is exponential.

The Intels of the world and the Apples of the world support small business. They are members of ASBA because all of their vendors are small businesses, so they have a keen interest in making sure that the small business climate is healthy and vibrant in the communities where they do business. Having a healthy small business climate helps those big companies coming into Arizona because they know the services will be available to support the functions they need to do business.

30 AB | May-June 2014

Who are the mentors?

They are business consultants who do this for a living or they are retired executives who want to volunteer their time and give back. We do put all potential mentors through a vigorous process to make sure they are qualified and will add value to the program.

What can aspiring business owners do before launching their business to ensure success?

ASBA is developing a relationship with Everest College to develop and offer a small business degree program. That education side is lacking in the small business community, so we want to give potential small business owners all the information they need to be successful. Everest has a nationwide footprint and classes will be offered online.

We hope to eventually expand the program beyond Arizona’s borders.

What is ASBA’s Business Mentoring Program?

What advice would you give to aspiring small business owners?

Many times, we find a small business that has five or six employees, but their efficiency doesn’t equate to five or six employees. Their efficiency might be that of two or three employees. Having a mentor or coach who can help them become more efficient is the thing we do at ASBA that is by far the most valuable service we provide to our members.

We have about 40 or 50 mentors and our members get up to four months of personal consulting to help small businesses start up, go to the next level, or just become more organized and efficient.

It’s not just one mentor they get. The team of mentors meet and talk about the issues each client has and each mentor then offers their thoughts on the next steps that can be taken. So it really is a mastermind of a program.

Make sure you have enough capital. The No. 1 reason small businesses fail is because they run out of money before they get their foothold in their industry.

Statistics show that the majority of small businesses fail within the first year and that’s because of undercapitalization.

Unless you have a rich uncle, small business owners take a lot of financial risk.

They put their personal finances at risk. They put their retirement at risk.

They put their home at risk.

If you’re going to take that risk, you need to have a defined plan for every step along the way and you also need to have the ability to be nimble. This is a dynamic economy and you have to be a dynamic business to adjust to that.

31 AB | May-June 2014

RESERVE YOUR BOOTH TODAY! Put your company’s name in front of gaming industry executives at Arizona Indian Gaming Association’s 2014 EXPO. November 5-7 at the Radisson Fort McDowell Resort & Casino in Scottsdale, Arizona.

With Arizona as the site for next year’s Big Game, AIGA is proud to offer an expansive conference agenda and exciting trade show floor. Be an exhibitor or sponsor and increase your company’s visibility in the gaming industry.

AIGA Associate Members will receive premium EXPO and Exhibitor pricing. Not a member yet? Join Today!

D E S E RT C L A S S I C G O L F TO U R NA M E N T | C O N F E R E N C E & T R A D E S H OW | C H E F ’ S C H A L L E N G E

For information email: AIGA.EXPO@azindiangaming.org or call (602) 307-1570.

ARIZONA CORPORATE ANGELS

Giving back

A

Majority of Arizona’s affluent residents support local charities, study shows

By MICHAEL GOSSIE

rizonans don’t need to look any further than Celebrity Fight Night or Arizona Gives Day to see that residents gives back to the communities they call home.

Now, there is hard data to support that observation.

A new study by BMO Private Bank has revealed that high-net-worth individuals in Arizona are more likely than other Americans to favor local community programs and charities to national ones. More than half of the state’s wealthy (53 percent) support programs at the local level, compared with 36 percent of affluent Americans nationally who reported the same.

The study is the third in a series by BMO Private Bank examining trends among high-net-worth Americans (those with investible assets of $1 million or more). The study also found:

• Affluent Arizonians preferred causes to support include education programs (45 percent), children’s charities (38 percent), health programs and disease research (38 percent), the arts (33 percent), religious institutions (33 percent) and animal welfare (30 percent).

• Thirty-eight percent have increased their charitable giving since the 2008 recession.

• Affluent Arizonans expected to donate an average of $5,500 to charitable causes in 2013.

• On average, Arizonans plan to donate 3.5 percent of

their estates to charitable causes in their wills.

“It’s promising that so many Arizonans support local programs, especially since a large portion of residents have moved here from other states,” said Patricia Stalzer, regional director, Western U.S., BMO Private Bank. “Hopefully this is a sign that more individuals and families are quickly becoming part of our local community and culture.”

Twice a year, Az Business spotlights the organizations that benefit from the generosity of their corporate supporters. Over the next several pages, Corporate Angels will spotlight some of the nonprofits who are making a difference in their communities and the businesses that help them make the magic happen.

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ARIZONA CORPORATE ANGELS

United Cerebral Palsy of Central Arizona

Mission Statement: UCP of Central Arizona provides comprehensive services to individuals with disabilities and their families by providing physical and developmental support, as well as educational growth which is the foundation for independent living.

To contribute: Donations can be made at your neighborhood Circle K stores in the coin collection cannisters.

To volunteer: Volunteers, interns, peer mentors, administrative work and help with special events are always needed.

Achievements: Opened Cafe Without Limits, a snack bar and retail store that provides job skills training for adults with disabilities.

United Cerebral Palsy of Central Arizona 1802 W. Parkside Lane Phoenix, AZ 85027 (602) 943-5472 ucpofcentralaz.org

34 AB | May-June 2014

of Central Arizona

UCP of Central Arizona assists individuals with disabilities and their families. Those served have disabilities including cerebral palsy, autism, Down syndrome, developmental delays and learning disabilities.

Our services include early intervention, an early learning center, day treatment & training, home & community based services, and information & referral.

To learn more about our services and how you can help visit www.UCPofCentralAZ.org 1802 West Parkside Lane - Phoenix, AZ - 85027 1-888-943-5472

35 AB | May-June 2014

ARIZONA CORPORATE ANGELS

ASU Foundation

Mission Statement: To ensure the success of Arizona State University as a New American University that offers academic excellence, broad access to all qualified students and meaningful societal impact. The ASU Foundation for A New American University connects generous philanthropists with their areas of passion, generating the enrichment dollars that produce the ASU margin of excellence and a rewarding, successful university experience.

Did you know: Through the support of philanthropists large and small, the ASU Foundation for A New American University helps provide as many as 40,000 student

scholarships annually, while also attracting some of the top teachers in the world who prepare ASU students for meaning and impactful professional careers.

How to help: Invest in ASU today. Philanthropy creates critical university partnerships that advance higher education, provides the resources necessary to strengthen faculty and programs and expands student learning opportunities. Your investment in ASU, its students, faculty and programs is your legacy and the cornerstone of a better tomorrow.

ASU Foundation for A New American University 300 East University Drive, P.O. Box 2260 Tempe, Ariz. 85280-2260 480-965-3759 asufoundation.org

36 AB | November-December May-June 2014 2013

37 AB | May-June 2014

Forecast is After a surge in home values over the past year, Arizona’s real estate recovery takes a breather By MICHAEL GOSSIE

Y

ou would think the forecast would be sunny.

Arizona’s population is growing, Maricopa County is among the national leaders in adding jobs and all signs indicate that the state’s economy will continue to expand.

Despite all the positive economic indicators, 2014 housing sales aren’t living up to industry expectations after beginning a robust comeback in 2013 that saw the median single-family-home price rise 27 percent from the preceding year. Unfortunately, the comeback slowed to a halt and the Phoenix area is now observing negative milestones in its housing market.

“Unfortunately, I think what happened was that we went through a period where sellers thought their homes were worth more and more and more,” said Sandra Wilken, founder and designated broker of Engel & Völkers Sandra Wilken Partners. “For a while, we were OK. But now we’ve out-priced ourselves again and unless we can get our sellers to be realistic, their homes are going to sit on the market for a long time.”

A report from the W. P. Carey School of Business at Arizona State University reveals the latest details about Maricopa and Pinal counties, as of February: * The median single-family-home sales price was $195,000, the lowest since August. * Demand and sales activity were dramatically lower than at the same time last year. * Spring may bring a normal seasonal boost in sales activity, but the market is still on track to possibly have little or no appreciation by the end of the year.

38 AB | May-June 2014

Phoenix-area home prices started rising quickly after hitting a recession low point in September 2011. Then, the price increases began slowing down in July, with the market experiencing two monthly drops in the median single-family-home sales price this January and February -- totaling about 5 percent.

“Home-sales activity was a startling 26 percent below February 2013,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Despite the large price gains since last year, the total dollars spent on homes dropped 16 percent between last February and this February. This is the weakest February in four years.”

The news isn’t all doom and gloom if you look at the complete picture. * The median single-family-home sales price was $195,000 in February, up about 15 percent from February 2013. * Average price per square foot gained 15 percent, from $110.44 to $126.57. * The median townhouse/condo sales price was up 13 percent.

Home sales in February (single family, townhouse and condo) were just 1.6 percent higher than January, traditionally the weakest month of the year. They were a startling 26 percent below the total for February 2013.

Despite the large increase in median single-family-home sales price between February 2013 and February 2014, the total dollars spent on homes dropped by 16 percent year over year.

Though the supply of homes for sale continues to grow, low demand is affecting almost all types of houses. Even at the high end of the market, which had been going pretty strong, the Phoenix area saw 2 percent fewer luxury-home sales this February than last February.

“The quietness in the market is spreading from the bottom up, but it hasn’t reached the very top yet,” said Orr. “Homes priced at $2 million and more are still doing OK.” A luxury market report put together by Walt Danley Realty in collaboration with Orr confirms a strong upward trend in luxury home prices over the last two years. The three month moving average has moved from $213 per square foot in August 2011 to reach $267 per square foot in March 2014, a rise of 25 percent. In addition, the supply of luxury homes is 31 percent higher than last year at this time.

“We were just in a meeting here about the MRA Custom Homes in the $8 million to $10 million range,” Wilken said.

“When we got into the beginning of the season in October, we were having some really nice high-end sales. We felt the momentum really going and anticipated more buyers in this price range. Unfortunately, we have not seen the buyers. The buyers we are getting are primarily from California. They are taking a real hard look at their future and weighing out their options. The California buyers see that they can get so much more for the money here and really improve their lifestyle by making the move to Arizona.”

With an increasing number of companies moving to Arizona to escape the crippling California taxes, Wilken said she has seen a surge in property sales at the lower end of the market, but she has not seen a ripple effect in the high-end market.

“The period from March to May is almost always the strongest part of the year for demand, and it is highly probable we will see some upward movement in pricing over the next three months,” Orr said. “However, it’s also likely this advance in pricing will be reversed during the hot summer months of June through September. We may be looking at little to no annual appreciation by the end of the year, if prices behave as we currently expect. Still, the Phoenix market is highly volatile, and nothing is certain.”

Wilken summed up the industry outlook for the next year with a simple observation.

“I was just on a panel,” she said, “and we all agreed that we are optimistically uncertain.”

Trends to watch According to Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business, these are some of the trends defining Arizona’s residential real estate market: • With new-home sales falling 23 percent from February 2013 to February 2014, some builders are increasing incentives to stimulate buyer interest.

• With single-family-home construction permits way down by historic standards, more developers appear to be focusing attention on multi-family options. In fact, multi-family permits exceeded the number of single-family permits in both December and February, which is very rare.

• Expect to see a lot of high-end apartment construction. The single-family rental market is doing extremely well, especially with millennials and those who lost their homes to foreclosure.

• Investors continue to lose interest in the Phoenix area, with more bargains to be found in other areas of the country. In February, the percentage of residential properties bought by investors was down to 20 from the peak of 39.7 in July 2012.

• Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – were down 50 percent this February from last February. Completed foreclosures were down 47 percent.

39 AB | May-June 2014

Arizona Real Estate Achievement Here are the finalists for the 2014 Arizona Real Estate Achievement (AREA) Awards, which will be presented by Az Business magazine on Thursday, May 15 at the Ritz Carlton in Phoenix.

Residential agent of the year JoAnn Callaway, Those Callaways In her first 10 years selling real estate, Callaway sold more than four thousand homes, totaling in excess of $1 billion dollars. She is also the author of “Clients First: The Two Word Miracle.”

Andrew Monaghan, Your Phoenix Home Source

Mortgage lender of the year Bank of America

Bank of America participates in affordable housing and down payment assistance programs and also features its Clarity Commitment, which helps borrowers understand what they’re getting into with a simple one-page summary of loan terms.

Chase

Monaghan has been a full-time Realtor since 2001 with sales volume of more than $48 million in 2013. He contributes a portion of the commission from every home he sells to his nonprofit children’s foundation, Kids4Kids.

With $17.71 billion in Arizona deposits and 201 branches in Maricopa County, Chase mortgage offers competitive mortgage rates, home loans, and home loan products.

Jeff Sibbach, Realty One Group

Using his Internet marketing prowess, Sibbach helped his company grow 100 percent from 2012 to 2013, closing $50 million in residential sales under the Sibbach Team.

Susan Walker, the regional manager for Wells Fargo Home Mortgage, has more than 34 years mortgage experience as a mortgage banker leading both originations and fulfillment and is responsible for managing retail mortgage production in Arizona.

Real estate company of the year

Mortgage company of the year

Bair Group

Founder Brian Bair was the No. 1 MLS agent for both properties closed and volume sold in both 2012 and 2013. Since 2005, he has acted as an agent, investor or principal in more than 3,000 transactions.

RE/MAX Excalibur Realty

With three offices serving Phoenix and its surrounding communities and another office in Tucson, RE/MAX Excalibur uses technology to give buyers and sellers an edge.

The Carin Nguyen Team

Founder Carin Nguyen was ranked No. 1 in Arizona in 2013 for total dollar volume closed and she and her team were ranked No. 42 nationally by the Wall Street Journal.

40 AB | May-June 2014

Wells Fargo

Amerifirst Financial, Inc.

2013 turned out to be a year of survivors. With the mortgage industry in constant regulatory change mode, Amerifirst was able to keep up and excel closing $1.3 billion in mortgage transaction.

Homeowners Financial Group

HFG is known as the No. 1 Best Place to Work with a heavy focus on giving back to the community. In 2013, the company closed 3,275 loans for a total value of $755 million.

Nova Home Loans

NOVA Home Loans had a phenomenal year in 2013, becoming one of the fastest-growing companies in Arizona and continuing its 33-year tradition of giving back to the community.

Congratulates all of the Nominees and Winners

2014 Arizona Real Estate Achievement Awards Bruce E. Beverly Great American Title Agency, Inc. 7720 North 16th Street, Suite # 450 Phoenix, Arizona 85020 (602) 445-5529 路 beb@azgat.com www.azgat.com

41 AB | May-June 2014

Arizona Real Estate Achievement

Environmentally responsible company of the year Cypress Development Group

Cypress has a portfolio that includes multiple real estate investments totaling more than $60 million and specializes in high-end residential and commercial projects that combine progressive sustainable features with impeccable finishes.

Fulton Homes

Fulton Homes takes pride in the fact that 100 percent of the homes it builds are Energy Star Certified, which means that homeowners who buy from Fulton save money on energy costs.

Diamond Ventures

Diamond Ventures works independently and with strategic partners to develop, manage and invest in residential real estate throughout the southwest. Current projects include Saddleback Heights and Rocking K.

DMB Associates

DMB is an Arizona-based, diversified real estate investment and development firm whose portfolio includes commercial properties, resort/recreational and Eastmark, DMB’s new highprofile community in Mesa.

Sunbelt Holdings

KB Home

KB announced in March that homebuyers at its Arizona communities have the opportunity to own a solar-powered home, which will help reduce their monthly energy bills by as much as 80 percent.

Homebuilder of the year

Sunbelt Holdings has developed award-winning communities including McDowell Mountain Ranch, Power Ranch, Johnson Ranch and Vistancia achieving No. 1 rankings for Best Master Planned Community since 2010.

Residential service provider of the year

Blandford Homes

Blandford is an award-winning Arizona builder specializing in resortstyle master-planned living communities, including Las Sendas and Mountain Bridge in Mesa, Power Ranch in Gilbert, and Pecan Groves in Queen Creek.

Cachet Homes

Founded by Matt and Whitney Cody in 1990, Cachet Homes’ success goes back to basics with a team approach that utilizes superior architects, designers, contractors and vendors to produce exceptional homes.

Taylor Morrison

Developer of the year

Taylor Morrison currently builds almost two dozen communities throughout the Valley, stretching from Ironwood Ridge in Peoria to Eastmark in East Mesa, from Adora Trails in Gilbert to Mirabel Village in North Scottsdale.

APS

In 2013, APS customers experienced 71 minutes of interrupted service, compared with an industry median of 111 minutes, placing APS within the top quartile of the nation’s investor-owned electric utilities.

Cox Communications

Cox serves nearly 3 million rsubscribers in Arizona and has topped numerous J.D. Power and Associates’ studies of customer satisfaction, most recently receiving top honors for residential telephone and high speed Internet.

State Farm

More people buy their homeowners insurance from State Farm than any other insurer. Its claims network is one of the largest in the world and is accessible 24/7, online or by phone.

Philanthropic contributor of the year Bill Rogers, Care Fund, Homeowners Financial Group HFG founder and CEO Rogers wanted to create a workplace that embraced a family culture and commitment to give back to the community, so he created the CARE Fund, which provides support for Arizona families who endure financial hardship while experiencing extended illness or injury of their children.

42 AB | May-June 2014

Bank of America is a proud Sponsor of the 2014 AREA Awards

Bank of America is Helping clients with their financial goals An exceptional neighborhood deserves exceptional service. When you call Bank of America, you can rest assured that our top priority is providing the information you need to help your clients make well-informed home financing decisions. With our commitment to responsible lending, we help qualified homebuyers become satisfied and successful homeowners. We bring personal service to the neighborhood, including: • Extensive industry experience

• Jumbo Mortgages

• Timely closing • Competitive pricing

• A wide variety of home lending options • A convenient and efficient home loan process

Additional Benefits with Your Home Morrgage: • Mortgage payment options, including automated payments or same day payments through Online Banking • Eligibiity for no monthly checking fee when you link a checking account and an eligible Bank of America first mortgage • Free financial review by our financial services advisors located within our banking centers across the Arizona market

To Learn more about Neighborhood Lending Resources, Strategic Alliances, or our Short Sale/REO Program visit the Agent Resource Center https://realestateagent.bankofamerica.com The Bank of America Agent Resource Center is your source for keeping up with industry trends and getting the latest information about Bank of America Home Loans products, processes and educational resources. In addition to this online center, you can always reach out to our local mortgage loan officers, who are dedicated to supporting and building relationships with real estate professionals.

Contact a Mortgage Loan Specialist in your area David Hyde

Paul Klimke

Alex Peifer

Scottsdale david.a.hyde@bankofamerica.com

Chandler paul.a.klimke@bankofamerica.com

Glendale alex.peifer@bankofamerica.com

Lynn Zobott

Adam Stewart

Flagstaff / Havasu lynn.zobott@bankofamerica.com

Tucson / Yuma / Sierra Vista Adam.stewart@bankofamerica.com

Bank of America, N.A., Member FDIC. Equal Housing Lender. ©2012 Bank of America Corporation. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Borrowers should become fully informed by reviewing all loan and disclosure documentation provided. Programs, rates, terms and conditions are subject to change without notice. 00-62-0112D 02-2013 ARF36B68

43 AB | May-June 2014

Arizona Real Estate Achievement

Lifetime

ACHIEVEMENT

Award

Wilken earns 2014 honor for her leadership and innovation in the Valley’s luxury real estate market Sandra Wilken is the founder and designated broker of Sandra

Wilken Luxury Properties, which she started in 1995 and grew into a leader of buying and selling in the Valley’s luxury real estate market. In 2013, a merger created Engel & Völkers Sandra Wilken Partners.

To stay ahead on the technology trend, Wilken launched a social networking and internet marketing campaign to attract clients who look to the internet first. Az Business caught up with the Lifetime Achievement Award honoree for the 2014 Arizona Real Estate Achievement Awards.

What made you get into the residential real estate industry?

I was working for an architect in Tulsa in the mid 1970s. He asked me to get my real estate license. So my background is in architecture, design, marketing and sales. Once I combined the two careers, it really made me one-stop shopping for clients.

What has been your greatest challenge?

The challenge is being clear with our clients in establishing realistic views and goals.

Photo by COURTNEY PEDROZA, AZ BIG MEDIA

SANDRA WILKEN:

The residential real estate icon said she started her own real estate company so she could make a difference in the real estate industry and create a dynamic service and mentoring program.

We have to communicate that today’s market is not the same as it was six months ago or even three months ago. And it may not be the same a month from now. Once we are totally honest with our clients, it is easier for them to accept the situation if they truly want to sell or truly want to buy.

What do you consider your greatest accomplishment?

Engel & Volkers named me as a “Private Office Advisor,” which is a prestigious designation in their client service network. I qualified by achieving X number of dollars, being heavily involved in the community, mentoring and so on. The importance of that is that out of all the U.S. offices, only seven people qualified. I was then honored to have two agents within my office qualify as well. We were the only office in the U.S. to have three people qualify. In May, we go to New York to be honored. It is an incredible accomplishment.

We would like to congratulate all the finalists for their excellence in the industry!

44 AB | May-June 2014

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45 AB | May-June 2014

San diego tourism Authority

Beach hoppinG

Old Town Trolley Tour helps you sample San Diego’s

surf, sand & sun

By AMANDA VENTURA

46 AB | May-June 2014

t’s hard to beat a day at the beach in San Diego. The weather midday is almost always a few degrees north of 70 and the water is generally cool and invigorating. Just sit and think about it: soft sand between your toes, surf beneath your feet, the sun sparkling atop the ocean just before it sets. It’s a lovely, Instagramworthy experience and there’s plenty to go around in San Diego.

San Diego-Coronado beaches stretch 70 miles along the coast of the Pacific Ocean. Each one has a personality, defined by its coastal neighborhoods, cliffs and reeds, wildlife, and, of course, the surf spots and other recreational activities. The best way to get a sampling of the beaches, especially if you don’t want to brave parking, is to hop on the newly routed Old Town Trolley Tour (trolleytours.com) of La Jolla and Mission Beach.

The beach tour route has four stops — Old Town, Mt. Soledad, La Jolla and Mission Beach — where you can hop on and off throughout the day.

Round trip takes at least an hour and a half to finish — and much longer if you get off at stops to explore the area (tours run through the 4 p.m. hour).

Taking the tour

Surf’s up

The next stop heads south, along the coast of La Jolla and passes Windandsea and Pacific beaches, where you’ll most likely see young surfers fresh out of school for the day waxing their boards. The former beach is thought to be well-suited for experienced surfers, but trolley riders itching for a wipe out can get their chance on the last stop.

Before returning to Old Town, the tour rolls through Mission Beach — a favorite among Arizonans, who apparently flock there by the thousands during Spring Break and summer. Many of the Arizonan visitors, the tour driver says, prefer this shore for its boardwalk, Belmont Park, which offers the traditional attractions, a mild surf, more youthful shopping and dining options as well as ride the Giant Dipper, a wooden roller coaster built in 1925.

The tour ends back at Old Town, which is more than a station stop. If you have time, use it to explore Old Town’s haunted buildings, historically informed old shops, restaurants and courtyard entertainment.

W h e r e to s u r f

The trolley departs from Old Town San Diego, then heads north to Mt. Soledad. Along the way, you’ll learn about the history of the city — from its botanicals to its businesses that have ranged from lemon groves to horse racing and most recently telecommunications. After a 10-minute stop at Mt. Soledad (Mountain of Solitude), which is a veteran’s memorial and also has some of the best views within San Diego (you can see Tijuana on clear days), the trolley heads farther north toward the La Jolla Cove. If you catch the 10:15 a.m. tour, you will have enough time to stop at the cove, rent a kayak and do some exploring before catching a later trolley.

Next up is the descent of Mt. Soledad, full of blooming florals and glimpses of multi-million dollar homes, a priming for La Jolla. Old Town Trolley Tours is the first beach tour company to go as far north as La Jolla, the guide says. It’s the epitome of uptown San Diego. You’ll probably see a few Teslas just before you spy the surfers and families splashing in tide pools or checking out the seals. A brisk 10-minute walk from the beach gets you to a handful of art museums, galleries, boutiques and patio restaurants ideal for a light lunch. This stop, according to the trolley guide, was a difficult one to secure for the tour as La Jolla residents didn’t want a “tour bus” running through the city. Fortunately for technicalities, the trolley didn’t cut it as a bus. Here, you’ll learn about San Diego’s roots in art patronage.

The South Bay at Coronado:

Gentle slopes and waves between Outlet and Imperial beaches are ideal for beginners.

Mission Beach: Intermediate, though often crowded. You can always catch an artificial wave at Belmont Park Wave House.

Sunset Cliffs at Point Loma:

A local favorite, though best for serious and advanced surfers.

47 AB | May-June 2014

San diego tourism Authority

All ale

the new king

Exploding craft beer industry is becoming the guts and glory of San Diego tourism By AMANDA VENTURA

B

rewHop founder Summer Nixon is eight months pregnant and drinking water from a swingtop glass beer bottle at Coronado Brewing Co.’s new manufacturing facility. She’s just delivered two flights of beer to the table while waiting for cofounder Rick Chapman to join her. It’s loud in here.

The industrial sounds of pressure escaping massive steel kettles and the Tool song just audible enough to recognize it from the tasting room speakers has people occasionally looking at one another’s mouths to make out what they’re saying. The three dogs sitting at their owners’ feet don’t seem to mind the commotion. It wouldn’t be a stretch to assume these dogs have laid in their fair share of San Diego County’s 84 breweries’ corresponding tasting rooms or brewpubs. In fact, just one stroll through North Park and it’s obvious craft beer is a popular passion of San Diego locals and a growing one among tourists.

Nixon is the founder of BrewHop, a personalized tour company that over the last seven years has 48 AB | May-June 2014

formed partnerships with more than 70 breweries in San Diego. The Seattle native is absolutely entrenched in the scene and is one of the more respected authorities on the craft beer industry. Though beer tourism is a year-round attraction for the city, Nixon says it was in December 2013 that she really started to see an uptick in her business. She’s booked about a month in advance. This is unusual, since it’s March, and her peak season begins in July.

The craft beer scene in San Diego has been gaining steam since its mainstream revival in the late ’90s. In the last three years, the number of licenses has doubled and 32 breweries are expected to join the existing 84 before the year is out.

Where the magic of the sea comes to life.

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849 W. Harbor Drive | San Diego, CA 92101 | 619-235-4014 | seaportvillage.com 49 AB | May-June 2014

San diego tourism Authority LEADING THE REVOLUTION

Many locals consider the beginning of the San Diego craft beer scene to have started in 1996 with the opening of Ballast Point, Stone Brewing Company and Coronado Brewing Co. The three 1996 breweries, with Karl Strauss, were situated in the four corners of San Diego County. They were in suburban and rural industrial areas. As the industry grew, it worked its way toward the urban core. Today, many attribute the revitalization of neighborhoods such as North Park and up-and-coming Imperial Beach to the craft beer culture.

“The gentrification of neighborhoods has been a benefit of the craft beer scene here in San Diego,” says Stone’s Sales Director Chad Heath. “From downtown, to North Park, South Park and surrounding areas, bars and restaurants that center on supporting local have helped shift these areas into some of the hippest parts of San Diego because you can enjoy great food and a craft beer from the brewery down the street. You can see the same effect happening in parts of Los Angeles as well.”

Mike Hess, of Mike Hess Brewing Company, is a North Park brewer. Hess, a former financial services professional, started brewing in his garage. In 2010, he opened for business as a nanobrewery.

Opening day, 100 craft beer enthusiasts showed up and drank his entire inventory.

He had to shut down for two weeks to replenish his stock. Eighteen months later, he signed a lease for a former JCPenney and Christian bookstore in North Park.

Hess went from making 300 barrels a year in his garage to 5,000 a year after signing the lease in March 2012 for his North Park brewery.

“Seven years ago, most of us wouldn’t have come here after dark,” Nixon says.

North Park, which used to be a location for USO dances in the ‘40s before its decline, has turned around and recently landed on Forbes’ list of hippest neighborhoods.

Hop-forward thinking

IPA, short for India Pale Ale, is the fastest growing beer segment in craft beer sales.

It’s characterized by hoppy flavor, generally high IBU (International Bitterness Units), and, until recently, high alcohol content. San Diego is known for its IPAs. In particular, it’s known for putting out IPAs that are lighter in color, lower in alcohol and a hop-forward taste.

The taste is created by a dry-hopping technique in which brewers add hops a second time after the beer is fermenting. This style is generally associated with West Coast IPAs, but Hess

50 AB | May-June 2014

(and many other San Diegans) insist a San Diego IPA is unique.

“Even ours are different than what’s farther up the coast,” Hess says. “They’re drier beers, also they finish less sweet. I’m seeing more people interested in sessional IPAs in the 3 to 5 percent (alcohol content) range. Usually it’s between 7 and 8 percent.”

Brandon Richards, Coronado Brewing.’s sales and marketing director, says Stone Brewing led San Diego’s IPA movement.

“We just really like hops here,” he says, adding that about 30 percent of all craft beer consumed comes from San Diego. It was 4 percent, he says, when Coronado Brewing Co. started. (Stone opened two weeks before Coronado.)

In 2012, Coronado bought a

20,000-square-foot facility in San Diego to boost manufacturing. It has seen 70 percent growth and more than doubled the annual number of barrels it produces.

As for the rapid growth of breweries, no one seems too concerned.

“Beer isn’t sitting on shelves,” says Coronado’s CEO Rick Chapman. “Our market is moving faster than everyone else’s and has been for the last decade.”

The money shot

Stone, arguably one of San Diego’s most well-known craft beer brewers and distributors, and one of the original ’96ers, has never paid for advertising. Yet, the gargoyle imagery on its beer bottles is as recognizable as its bold flavors.

In 2005, Stone moved from a small facility in San Marcos to Escondido, where it opened its current brewery. The following year, it opened Stone Brewing World Bistro & Gardens, a farm-to-table restaurant and one-acre beer garden. This allowed them to provide tours of the brewery as well as a dining-tasting experience that Heath attributes to a steady influx of tourists.

One thing that doesn’t stop at Stone, Heath says, is construction and expansion. In 2013, Stone added a second 120-barrel brewhouse and constructed Stone Packaging Hall, which is where its finished beers are bottled and kegged.

“I believe Stone and other great San Diego-based breweries are making a lot of great beers that are getting our region international attention,” says Heath.

San Diego Brewing Co. General Manager Karen Bernauer says the scene is set apart by collaboration between brewers and support from restaurants.

The National University Institute for Policy Research, a nonprofit, nonpartisan organization, reported craft brewers and brew pubs generated nearly $300 million in direct economic impact for San Diego County in 2011, based on $680.9 million in sales. That’s 1.5 times greater than Comic-Con International, the city’s largest annual convention. It’s estimated that 2,796 jobs were created or sustained by brewery industry jobs in 2011.

Brewery tourism in particular was found to be a year-round attraction.

NUIPR’s research reported beer festivals alone attract nearly 100,000 attendees.

The largest festival is San Diego Beer Week in November. More than 20,000 people attend and it’s estimated to have created 3,612 room nights and $469,307 in hotel revenue. A little more than half of brewery tourists, according to a University of North Carolina study, have an income more than $80,000. Many indicated a stay of three nights. Those who were traveling with friends or family were also staying at a hotel. On average, a brewery tourist will visit two breweries.

To help drive awareness to these events and local companies as well as create a united force among the breweries, the San Diego Brewers Guild was founded.

The guild hosts four annual events and supports 15 additional annual events.

To get more consumers involved, the SDBG started the Craft Coalition last summer. It has more than 200 members who have the option for behind-the-scenes tours and tasting room discounts.

AleSmith Brewing Company was named the top brewery in California — and the world — in RateBeer’s “Best of 2013” list. This was awarded shortly before the company went public with its expansion plans.

Additionally, Brew Hop’s Summer Nixon, shared that AleSmith founder and brewmaster Peter Zien plans to open San Diego’s first creamery. The plans began with a partnership between Zein and a company that owns goats that eat scrub brush — a common fire hazard — from yards. Nixon alleges that Zein trades the company grains for goat milk. Over the last few years, he has used that milk to make craft cheese to pair with his beer.

To learn more about San Diego beer tours, visit brewhop.com For a visitor’s guide and to learn more about San Diego brewers and beer events, visit sandiegobrewersguild.org

Experience San Diego’s

BEST Local Brewery Tour

GREATfriends, cold BEER and ™ a HOT RIDE San Diego Brewery Tours in style 1-858-361-8457

brewhop.com

s s e c c u S

foo ist AWARDS

r o f e p Reci

dustry growth in t n ra u ta s re the nation in d a le a n o z ri A lp blishments he ta s e t n e d n e p e Ind

By LESLIE K. HUGHES

Arizona can proudly call itself a “foodie state.”

Locals crowned their state as such years ago. But now, people from all over the country and world are catching up. Tourists are flocking to Arizona to see what the buzz is about and they are greeted with open arms and menus from nearly 9,000 restaurants. Thanks to the residents of Arizona and the tourists who vacation here, our state is slated to see a 4.9 percent increase in restaurant sales in 2014, which gives Arizona the nation’s biggest increase. This impressive growth will put the 2014 restaurant industry income for Arizona at $11 billion, the equivalent economic impact of hosting two Super Bowls a month.

The growing restaurant industry also brings a tremendous number of jobs to Arizona.

Currently, the restaurants of Arizona employ 265,000 people, representing 11 percent of our state’s labor market. These numbers are expected to continue to grow over the next nine years. By 2023, it is projected that there will be nearly 42,000 new jobs in the restaurant industry.

Welcomed competition With their sights set on a continually growing restaurant industry, restaurants in Arizona have been working hard to bring diners the eating experience they desire. For some, that may be the neighborhood local eatery. For others, that may be the chain restaurant they are familiar with.

“They both have their place,” said Steve Chucri, president and CEO of the Arizona Restaurant Association. Local restaurants and chain restaurants offer different things to consumers, making the growth in both types of restaurants strong in Arizona.

“Phoenix is a hub to test chain restaurants,” said Lucia Schnitzer, owner Luci’s Healthy Marketplace, a neighborhood favorite in Phoenix.

Schnitzer said she doesn’t see chain restaurants as competition. A Dunkin’ Donuts is scheduled to open across the street from her eatery and Schnitzer sees it as a sign of her business’s success.

“It’s a real compliment when I see a chain restaurant want to build next to mine,” she said.

Adapting to diners Every item in Luci’s Healthy Marketplace has been handpicked by Lucia herself, which allows her to accommodate a variety of diners: vegans, gluten-intolerants and lactoseintolerants are among many special-diet diners which are becoming a large part of the dining population today.

Kimber Lanning, founder and director of Local First Arizona, believes that there are 52 AB | May-June 2014

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r 2014, aurant sales fo st re a on riz A in ojected growth U.S. 4.9% : Pr e th in t es rg la e th s for 2014

restaurant sale a on riz A d te ojec $11 billion : Pr people employed by Arizona restaurants 0 : Number of

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Carolyn Vangelos

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265,00

two different types of consumers — “people who don’t think much about what they eat” and people who are more conscious of the food they are consuming.

“More and more people who used to not think so much about food are now starting to catch on,” Lanning said.

And restaurant owners have caught on to this consumer awareness as well. Both local and chain restaurant owners pay close attention to changing food trends and work to incorporate these trends into their menu.

For the past few years, the National Restaurant Association’s annual report on current food trends has seen spots No. 1 and 2 go to locally sourced produce and meats.

“This is a trend that has taken hold without question,” said Chucri.

People are curious about where their food is coming from and they are also looking to support locals, even when dining at a non-local restaurant.

Carolyn Vangelos, a franchisee of Dallas-based Twin Peaks restaurant, said that offering local beer is a big factor in the draw of people to her Camelback Twin Peaks. However, Vangelos goes further and makes it a point to use local produce company Stern whenever possible. Vangelos recognizes the importance and popularity of local food not only to her customers, but also feels it herself.

“Some of my favorite restaurants are local restaurants,” she said.

And the same can be said for the majority of people today. This is reflected in the increasing number of independent restaurants in today’s economy. Chucri estimated that 65 percent of food establishments in Arizona are independent and 35 percent are chain restaurants.

Independents’ day The economic impact and significance of that independent restaurant majority is easy to see.

“It helps our economy and we are able to cycle revenues back into the economy,” said Schnitzer.

A study done by Local First Utah showed that eating at a local restaurant produces more than twice the economic impact of dining at a chain restaurant. However, Lanning feels that for Arizona, “it is more – three times more.” Not only are independent restaurants here using local foods, they are also using local interior designers, local web designers and a variety of other local services that allows a much larger portion of the money coming from those restaurants to remain in Arizona’s pocket.

However, because of the variety in consumers’ desired dining experiences, chain restaurants are also vital to Arizona’s economy, as evidenced by the growing number of each.

“Both independent and chain restaurants are expanding, not just by location but by their cuisine types as well,” said Chucri. “If you add that together, that is the secret to Arizona’s expanding restaurant economy.”

Throw in some highly regarded awards, and you have the recipe for success. Our state is home to a number of James Beard Award-winning chefs who are offering dining experiences only available here in the Grand Canyon State. Coupled with national award-winning wineries, Arizona has become a destination for food.

For both independent and chain restaurants, Arizona is the ideal place to be and the food culture is thriving here. With the numbers projected for our state in 2014, there is no denying that, as Lanning said, “Arizona is poised to do amazing things.”

53 AB | May-June 2014

foo ist AWARDS

To commemorate the growth of the culinary landscape within Arizona, the Arizona Restaurant Association selected 30 finalists and 10 winners for the second annual Foodist Awards. Here are the 2014 finalists and winners:

Virtu

Photo by SHAVON ROSE, AZ BIG MEDIA

Food Pioneer

Winner: Craig DeMarco and Lauren Bailey, Upward Projects The hallmark of Upward Projects’ restaurants — three Postino locations, Windsor & Churn, Federal Pizza and Joyride Taco House — is featuring delicious food with local ingredients at eateries that are connected to the communities they serve.

Finalists · Sam Fox, FOX Restaurant Concepts · Joe Johnston, Joe’s Real BBQ/Liberty Market Top Chef

Winner: Gio Osso, Virtù

Named one of the top 20 “Best New Restaurants” in the U.S. by Esquire Magazine, Virtù features a menu created

by Osso that offers contemporary cuisine inspired by his Mediterranean roots and global influences.

Finalists · Charlene Badman, FnB · Cullen Campbell, Crudo

Good Neighbor

Winner: Community Kitchen

Community Kitchen at St. Mary’s Food Bank is a food service training program for those with barriers to employment. Students gain the skills to get jobs offering livable wages, benefits, and opportunities for advancement through hands-on training.

Finalists · The Vig · Upward Projects

Emerging Restaurant of the Year

Winner: Original ChopShop Co.

Original ChopShop Co. was founded on the premise that today’s on-the-go can eat healthy without sacrificing fresh, memorable flavors or affordability. Its chef has paired inventive cuisine with familiar dishes, but twisted into delicious new combinations.

Finalists · Gadzooks · The Henry Outstanding Restaurant Concept

Winner: Proof

A railroad track runs through the dining room in this casual neighborhood hang-out that features homestyle comfort fare sourced exclusively from the 50 states.

Televisions, games and a bar bring energy to Proof on a nightly basis.

Photo by SHAVON ROSE, AZ BIG MEDIA

Chips and salsa at Joyride Taco 54 AB | May-June 2014

Finalists

· POSH · O.H.S.O.

Congratulations Sysco would like to congratulate all the finalists nominated for the 2014 Foodist Awards!

We appreciate your passion and dedication to excellence.

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Durant’s

Photo by SHAVON ROSE, AZ BIG MEDIA

Best Dish: Steak

Winner: Durant’s

A true Nirvana for classic steaks, Durant’s — complete with red velvet wallpaper, tuxedo clad servers, classic martinis and Rat Pack vibe — has been delivering amazing meals to movers and shakers for 60 years.

Finalists

· Bourbon Steak · Donovan’s Steak & Chop House Outstanding Food Truck

Winner: The Maine Lobster Lady

The Valley’s only lobster shack on wheels brings diners responsibly harvested Maine lobster. Try the lobster roll with chunks of chilled lobster meat tossed with a touch of lemon aioli in a butter grilled roll. It’s wicked good.

Finalists

· Nogales Hot Dogs · Hao Bao Outstanding Multiple-Location Restaurant

Winner: Mastro’s

Mastro’s collection of sophisticated steakhouses and Ocean Club Seafood locations are recognized for its combination of world-class service, highly acclaimed cuisine, and live entertainment in an elegant yet energetic atmosphere.

Finalists · Pita Jungle · Postino Wine Café Uniquely Arizona

Winner: Elote

Elote Cafe is the brainchild of chef Jeff Smedstad, who spent more than 15 years traveling Mexico to broaden his knowledge about food. He incorporates local and healthy products into dishes that delight the tastebuds.

Finalists · Cartwright’s Sonoran Ranch House · Quiessence Master Mixologist

Winner: Stephanie Teslar, Blue Hound Kitchen & Cocktails and Hotel Palomar

Teslar, 30, is a certified specialist of wine whose search for a more creative role behind a bar led to her passion for spirits and fresh, artisan cocktails.

Photo by SHAVON ROSE, AZ BIG MEDIA

Master Mixologist Stephanie Teslar created Blue Hound Kitchen & Cocktails’ entire cocktail menu.

56 AB | May-June 2014

Finalists · Andrew Record, Kadence Restaurant Group (Tucson ) · Micah Olson, Bar Crudo

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Financial Executives International

Counting

success Creation of FEI Arizona Chapter’s dynamic platform for financial leaders helps drive growth By MICHAEL GOSSIE

F

Photo by COURTNEY PEDROZA, AZ BIG MEDIA

NUMBERS GAME: “We don’t want our members’ money,” said Bret Lawson,

president of the Financial Executives International (FEI) Arizona Chapter, “we want their engagement.”

58 AB | May-June 2014

or financial executives, it’s all about the numbers.

And any way you look at the numbers, the Financial Executives International (FEI) Arizona Chapter is a success. At FEI’s 2014 Summit Leadership Conference in June, the Arizona Chapter will earn an award for the Tier 3 (100-200 members) chapter with the greatest growth in the last year. To put the extraordinary success of the Arizona Chapter in perspective, the group grew membership by almost 16 percent in the last year, compared with a high of about 2 percent growth for FEI’s 84 other chapters.

“We have been able to grow because this is not the same old FEI,” said Bret Lawson, CFO of Ipro Tech and two-term president of the Arizona Chapter. “People who came in the past thought FEI was a bit cliquish and boring. Those same people are coming back now and are finding an organization that is more dynamic, open and friendly.”

FEI is the preeminent association for CFOs and other senior finance executives. Members have access to unrivaled networking opportunities with their peers, continuing professional education (CPE) programs, career services and the opportunity to build relationships with other professionals in the business community.

“People think that finance people are boring,” Lawson said, “but a lot of us are a lot of fun and we’ve tried to create events that are both fun and great networking opportunities.”

Because of the turnaround and growth of the Arizona Chapter, Lawson will be making a presentation at FEI’s national convention to share his success stories and advice with leaders of other FEI chapters.

Az Business sat down with the leader of FEI’s only Arizona chapter to talk about the impact FEI has had on his financial career and the potential impact it can have on future members.

What attracted you to the financial side of business?

Bret Lawson: When I was a child, I had a paper route and really enjoyed the business side of it. From an early age, I was always interested in how to make money and how to make a business grow.

Is Arizona a good place for finance leaders to build a career?

I didn’t grow up in Arizona. I grew up in Southern California.

I didn’t go to school in Arizona. I went to UC Berkley. I didn’t start my career in public accounting in Arizona. I started in San Francisco. I moved here 13 years ago not knowing anyone in the business community. I think Arizona presents a great opportunity for people to come because the business community is very welcoming here because most people who live here are not originally from Arizona.

How has the role of the CFO evolved since the start of your career?

It’s not about just counting the beans and reporting the numbers.

CFOs have to be a lot more strategic today, work more directly with senior management and have a lot more responsibility in regards to managing risk. One has to develop a greater skill set than just understanding accounting. You have to understand business. You have to understand insurance. CFOs today must

be able to take the numbers and interpret the numbers in order to create a strategy to drive the business.

How did you become involved with FEI? Because I didn’t grown up in Arizona, didn’t go to school here and didn’t really know anyone here, I had heard about the organization through co-workers in California who were members of the chapter back there. I got involved and met people, then joined the board and took on leadership roles. It’s allowed me to network, meet local business leaders, meet and build relationships with local vendors that — as a CFO — I do business with, and meet other CFOs that I can talk with about business issues or consult with.

How has your affiliation with FEI impacted you professionally?

In reality, I got my current job through my FEI connections. Our COO was looking for a new CFO and he had served on a board with one of our FEI sponsors who told him, “You need to talk with Bret.” He reached out to me, we met and I got the gig.

Why should financial leaders become part of FEI? There are great networking opportunities as well CPE programs that are required for most financial professionals. The greatest

Financial Executives International

VISION BENEFITS CFO

of the year

TO JOIN

FEI’s vision is to be recognized globally as the leading organization for senior-level financial executives. FEI strives to be the eyes and ears of the typical finance officer facing the day-to-day challenge of enhancing his or her shareholders’ investment. FEI helps members anticipate and react to change, acquire new resources to enhance shareholder value, and build the personal skills needed to further their careers.

FEI membership includes many key members-only benefits and services, including FEI Career Center and career management services, local peer networking and education through chapter involvement, professional advancement resources, continuing professional education (CPE) opportunities, as well as emerging issues alerts and regulatory updates.

The CFO of the Year Awards are given annually by FEI Arizona to professionals for outstanding performance in their roles as corporate financial stewards. This program provides many benefits to the business community by highlighting the important roles that financial executives play within the region.

Visit feiaz.org 59 AB | May-June 2014

Financial Executives International benefit is that FEI gives members an opportunity to build relationships. You can build banking relationships, insurance relationships and real estate relationships because all those folks are involved in FEI and they all become people you can add to your rolodex.

For anybody in business, it’s too easy to get too involved in your career and not do enough to build relationships outside of your organization and network. FEI provides great opportunity to do that.

The more people know you, the more opportunities will present themselves to you. FEI helps members add to their knowldge base by meeting people who experience the same challenges. It helps you do your job better because you have resources you can draw from and best practices you can learn by drawing on the experiences of other members.

How has the CFO of the Year program impacted the visibility of FEI? Each November, the FEI Arizona Chapter and its sponsors present the CFO of the Year Awards to outstanding CFOs from Arizona organizations at a special dinner and networking event. Being a member of FEI is not a prerequisite to being a nominee for CFO of the Year. But it’s a testament to FEI and to the reach of our sponsors that the CFO of the Year Awards have become a premier event and have become a prospecting tool for new members. Many of the nominees come to meetings and several nominees end up joining FEI. FEI Arizona’s CFO of the Year event has become so popular — we had 400 atttend the event last year — that many other chapters have followed our blueprint to put on CFO of the Year events of their own.

How do you see FEI Arizona evolving over the next decade?

We have been able to grow our chapter because we listened to members who said the greatest benefit of membership was networking, so we increased networking time. We have added a modified career development program and personal branding training so members can develop their personal brand. We will continue to grow by continuing to make sure there is a value added for our members, adding different types of education, dynamic speakers and webinars.

We are the premier organization for financial leaders in the Valley and even though we are living in a digital age, at the end of the day, success in business is built on personal relationships. Beyond Skype, texting and email, face-to-face, one-on-one personal relationships make a difference in business.

And that’s what FEI provides as a networking organization: the ability for members and sponsors to develop relationships that will impact the way they do business and their ability to become more successful in business.

60 AB | May-June 2014

Sponsor spotlight Jonathan Keyser, founder of Keyser and a Gold Sponsor of the Arizona Chapter of FEI: “Involvement with FEI enables us to stay abreast of the issues facing financial executives today so that we can better advise and counsel our clients.

It is also an excellent relationship development tool, providing a strong local forum for CFOs to interact with each other, share best practices, etc.”

FEI Arizona sponsors: AON Risk Services Avanade Bank of America Bank of Arizona, NA BBVA BDO USA, LLP DataBank Deloitte Ernst & Young, LLP Experis Keyser Lovitt & Touche Insurance & Bonds Marsh McGladrey LLP Protiviti Robert Half Management Resources Ultimate Software US Bank Vaco Resources Vincent Benjamin

L 8 UA N N A TH

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61 AB | May-June 2014

Financial Executives International

Leadership spotlight Skufza will become next president of the FEI Arizona Chapter

R

ichard Skufza brings more than 20 years in the advertising, marketing and design industry experience to his role as executive vice president and CFO of LaneTerralever. Although his greatest talents are at crunching numbers, colleagues say Skufza regularly contributes to the creative mix at the advertising and public relations agency.

Skufza will draw upon all the tools in his skill set as the next president of the FEI Arizona Chapter, succeeding Bret Lawson this summer.

Why did you go into financial leadership?

I originally wanted to go into physical education and during one of my motivational talks with my father, he said, “Why would you want to go into physical education? There’s no money in it.” That resonated with me, so I decided to go into business and knew the language of business was accounting, so I went into accounting.

discipline that athletics teaches you, the competitiveness that it brings out and developing the ability to work together as a team are all skills that also serve you well in business.

How did you become involved with FEI? I went to FEI events previously and didn’t feel a connection. But as a CPA, there are continuing professional education requirements that you need to comply with, so I started attending FEI programs again about seven years ago and they really made guests feel comfortable and connected.

So that got me in. Then, I got involved at the board level.

What are your goals as the next president of FEI Arizona?

CFOs have a lot of demands on their time, so work pressure and family pressure make it hard to get away for a networking event or How did your love of sports dinner. I want to continue to show impact you professionally? value to existing members, grow I define myself as a frustrated jock membership, add value through turned accountant. Everybody continuing education and help wants to be the star halfback, members enhance their career quarterback or wide receiver. development. Some people say FEI I didn’t have the skill set to do is the best kept secret for CFOs. that, so my contribution came as I want to make sure CFOs really a lineman and I did that well. The know about us.

62 AB | May-June 2014

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64 AB | May-June 2014

Greater Phoenix Convention & Visitors Bureau

2014

Phoenix Convention & Visitors Bureau

H

ot ticket

Success from hosting mega events helps Phoenix tourism industry build foundation for future propersity By MICHAEL GOSSIE

P

hoenix is on a roll with tourism. The Valley is hosting the next Super Bowl and Pro Bowl and will also be home to the 2016 College Football Championship Game. Az Business asked Steve Moore, president and CEO of the Greater Phoenix Convention & Visitors Bureau, about the impact these big-ticket events will have on the tourism industry and what Arizona is doing right to land these economic engines.

What is the short-term impact of hosting high-profile sporting events?

The Super Bowl is a proven generator of international exposure, local economic impact and “heads in beds.” In terms of economic impact, it’s been well chronicled that the W.P. Carey School of Business estimated the impact of the 2008 Super Bowl at $500 million. If you dig a little deeper into that study, you get an idea where a lot of that money comes from.

More than 90,000 out-of-state visitors traveled to the Phoenix area for the game, and they directly spent $218 million on hotels, food, shopping and transportation. The average length of stay was 3.9 nights, and each visitor spent $617 per day. Nearly all of these visitors arrive at Sky Harbor, generating tremendous revenues for the city’s airport and car-rental facilities. In terms of hotel performance, Smith Travel Research data shows that during the four days leading up to the 2008 Super Bowl, there was a 22 percent increase in hotel occupancy, a $32 million increase in hotel room revenue, and a 157 percent increase in revenue per available room over the same four days the prior year.

66 AB | May-June 2014

What is the long-term impact of hosting these high-profile events?

How has Sky Train impacted Phoenix’s tourism industry?

The Super Bowl is the biggest media spectacle in the U.S. Millions of television and web viewers will be focused on the Valley that week. More than 5,000 media members will be headquartered downtown, including major television networks that set up remote studios from which to anchor their news, sports and entertainment broadcasts. Having all those eyes trained on our destination—for not just one night, but an entire week, when most of the country is in the depths of winter—is a marketing opportunity without parallel. The cost of TV spots during the Super Bowl broadcast is a good indicator of the value of exposure Greater Phoenix will realize.

Sky Train is part of a bigger story of convenience and value.

Thanks to the major presence of the new American Airlines and Southwest, Sky Harbor is already one of the most affordable airports to fly into among the nation’s 10 busiest airports. And thanks to the combo of the Sky Train and light rail, we can now tell visitors — including meeting planners and prospective convention attendees — that they can travel from the airport to downtown in 15 minutes, for $2, without burning a drop of gasoline. Of course, when Sky Train is extended to Terminal 3 and the rental car center, the Sky Harbor experience will become even more convenient.

What does Visit Phoenix do to capitalize on these high-profile events?

What are tourism officials doing right to land so many high-profile events?

Hosting Super Bowl events downtown garners Phoenix tremendous positive exposure as a place to hold a convention or event. Many activities leading up to the game will occupy our downtown convention footprint. The message it allows us to communicate to our customers is that if our new downtown has what it takes to host the country’s biggest sports spectacles, it can accommodate and entertain your meeting and convention attendees.

In the realm of mega events, success begets success. The Super Bowl is the ultimate symbol of a destination’s ability to host big events and the area CVBs have leveraged Arizona’s successful 2008 bid into a succession of other hosting opportunities.

The 2008 Super Bowl helped the Valley land the NBA All-Star Game and NRA Convention in 2009; the success of those events helped us land the MLB All-Star game and WWE WrestleMania in 2011; and the success of those events, in turn, helped us land another Super Bowl and the 2016 College Football Championship Game. When Major League Baseball experienced record attendance at its Home Run Derby, in the middle of July, they wrote that downtown Phoenix was the easiest and tightest package they had experienced due to the proximity of Chase Field to hotels, the convention center and dining. The Valley doesn’t win every time it bids for a big sporting event, but the success of the events we do host gives assurance to meeting professionals that our city can handle most anything.

Is there anything state officials or lawmakers can do to help land even more high-profile events?

Sufficient funding for the state and local visitors industry is essential to keeping our destination relevant in a highly competitive marketplace. Our CVBs and the Arizona Office of Tourism are woefully underfunded compared with our competitors. That funding is necessary to define, maintain and increase exposure for our brand. It’s also crucial to capturing a greater share of group business at the convention center. Sunshine is no longer the only key attribute these events evaluate.

What do you see as the greatest benefit of the makeover to Sky Harbor’s dining options?

Having restaurants like Barrio Café and Matt’s and LGO at Sky Harbor communicates to incoming travelers that our city cherishes local businesses and independent chefs featuring local sourced ingredients. The choice of local eateries gives visitors a glimpse of how the culinary scene in Phoenix has dramatically changed for the better. When the dining options at your airport are getting national media attention — as Sky Harbor’s new restaurants have — that bodes well for the greater culinary reputation of your destination.

How has the renaissance of downtown Phoenix impacted the Valley’s tourism industry?

Major cities are defined by their downtowns. And our renaissance has given us a story to tell. It has transformed from an albatross to an attribute. Downtown is the star of Visit Phoenix’s latest meeting-magazine advertising and its rise was cited by the Arizona Super Bowl Host Committee as a big reason our bid for the 2015 Super Bowl was successful. But in terms of measurable impact, you have to consider that since the Phoenix Convention Center was expanded in late 2008, the sales teams at Visit Phoenix and the convention center have hosted and booked more than 2 million delegates into its campus. That’s greater than the population of Philadelphia.

How will downtown Phoenix’s role in the 2015 Super Bowl differ from its role when Arizona hosted the Super Bowl in 2008?

When we last hosted the Super Bowl, in 2008, downtown was still largely a construction zone. Light rail wasn’t finished and neither was the downtown Sheraton or the Convention Center expansion or CityScape. Next year’s game will give us a chance to showcase the new downtown — all the hotels, restaurants and event venues in the city’s urban core. A dozen city blocks in downtown Phoenix will be transformed into “Super Bowl Central,” a hub for worldwide media and fanfriendly entertainment. The Phoenix Convention Center will house both the NFL Experience — billed as the world’s largest interactive football theme park — and the NFL Media Center.

And CityScape will be the site of NFL House, the hospitality headquarters for business partners and Super Bowl VIPs. The Arizona Super Bowl Host Committee expects 1 million fans to visit Super Bowl Central in the days leading up to the big game.

Steve Moore President and CEO of The Greater Phoenix Convention & Visitors Bureau 67 AB | May-June 2014

Phoenix Convention & Visitors Bureau

Phoenix gets

cheesy

The exploding pizza industry is taking a bigger slice out of the dining industry

By JESSE MILLARD

W

Photo by SHAVON ROSE, AZ BIG MEDIA

Pepperoni pie from Federal Pizza 68 AB | May-June 2014

ith the heat, vibrant culture and close proximity to the border, many would think that downtown Phoenix would be a hub for Southwestern cuisine. But Phoenix is quickly becoming the epicenter of cheesy deliciousness.

Pizza is everywhere in central Phoenix, with Cibo, Pizzeria Bianco, Pizza People Pub, Pomo Pizzeria Napoletana, The Parlor Pizzeria and Federal Pizza serving the gooey, lovable dish that everyone enjoys. At last count, the Downtown Business Improvement District — from 7th Street to 3rd Avenue and from Fillmore to Jackson Street — boasts a staggering 14 pizzerias, most of them independent restaurants.

“Pizza is a food everyone likes and it’s great to have a choice for different types,” said Doug MacKenzie, director of media relations at Visit Phoenix.

“It’s great to have a wide variety of local pizza. It’s better than having a bunch of chain restaurants, without a doubt.”

MacKenzie said the explosion of independent, gourmet pizza restaurants in the Central Corridor boosts the city’s image when visitors see that Phoenix has more than just Mexican restaurants and places that serve cowboy burgers.

www.grandcanyonwest.com (888) 868-9378 69 AB | May-June 2014

Phoenix Convention & Visitors Bureau

Grab a slice

Here are a handful of the gourmet pizzerias that

are spicing up the Downtown Phoenix dining scene:

• • • • • •

Cibo - 603 N. 5th Ave. (602) 441-2697 | cibophoenix.com Federal Pizza - 5210 N. Central Ave. (602) 795-2520 | federalpizzaphx.com Pizzeria Bianco - 623 E. Adams St. (602) 258-8300 | pizzeriabianco.com Pizza People Pub - 1326 N. Central Ave. (602) 795-7954 | pizzapeopleaz.com Pomo Pizzeria Napoletana - 705 N. 1st St., #120 (602) 795-2555 | pomopizzeria.com The Parlor Pizzeria - 1916 E. Camelback Rd. (602) 248-2480 | theparlor.us

70 AB | May-June 2014

“Pizza is a great food,” said Eric Husti, a manager at The Parlor Pizzeria. “It’s becoming a trend because it’s an easy, go-to food item. More people gravitate to a straight-forward approach.”

Experts said the growing number of pizza restaurants actually adds to Phoenix’s urban sophistication, particular when visitors dine at award-winning independent restaurants like Pizzeria Bianco and Cibo, which makes its home in a restored 1913 bungalow with hardwood floors and exposed brick.

Pizzeria Bianco, originally opened by Chris Bianco in a central Phoenix grocery store in 1987, has been rated as the best pizza in the United States

by Bon Appétit, Vogue, Rachael Ray and Andrew Zimmern. The pizza has also earned raves from Martha Stewart, Oprah Winfrey, GQ and Gourmet.

In 2003, Bianco won the James Beard Foundation Award for best Southwest Chef, becoming the only pizza chef to have won a regional award, and the restaurant received a nearly perfect Zagat score of 29 in 2000. Pizzeria Bianco was also featured in Peter Reinhart’s book, “American Pie: My Search for the Perfect Pizza.”

“We don’t have a definitive idea about whether we’re all higher end or quick-style restaurants,” Bianco said, and added that he doesn’t think that Phoenix has developed a food identity.

With its rapid resurgence and the growing presence of higher education facilities and cuttingedge bioscience research centers, Bianco sees downtown Phoenix becoming a more diverse environment, with more people living downtown and a much more diverse range of restaurants and retail shops.

“We’re on our way to maturing as a city and then we’ll have developed a food identity,” Bianco said.

Until then, many of the tourists and Valley residents who venture downtown for Suns, Mercury or Diamondbacks games, or performances at US Airways Center, Comerica Theatre, Herberger Theater or Stand Up Live, are taking a slice out of downtown’s pizza scene. The rise of such a simple dish shouldn’t be mistaken for a lack of culinary sophistication, experts said.

Chef Glenn Humphrey, an instructor at the Arizona Culinary Institute, said Phoenix has had a solid dining scene for a long time and both casual and fine dining options are on the rise, especially when it comes to pizza.

“Good competition breeds better product,” Humphrey said. “Pizza is America’s favorite food. If they have good, quality pizza, it raises the level of dining excellence all around.”

Craig DeMarco and Lauren Bailey, who have owned Federal Pizza for five years, have seen the explosion of gourmet pizza restaurants in Phoenix and don’t see the growing competition as a problem.

“We believe there is plenty of business to go around,” DeMarco said. “As long as you have a quality product and high standards for what you serve, you’ll do fine.”

Federal Pizza does something that separates them from other artisan-style pizzerias. Federal is the the only place in town where you can go through a drive-through to get an artisan-style pizza.

“We sell beer and wine, too,” Bailey said. “That’s one of the factors that makes us stick out.”

71 AB | May-June 2014

Phoenix Convention & Visitors Bureau

Home-grown

getawaYS Amazing summer deals let local visitors experience Arizona’s greatest

hotels and resorts

Sanctuary Camelback Mountain Resort and Spa 72 AB | May-June 2014

W

ho needs a vacation when we have the world’s most fantastic pools, luxurious spas, romantic retreats, spectacular golf courses and best restaurants right in our backyard? You can forget about the flight delays and rental cars because many of Arizona’s award-winning hotels and resorts offer summer deals that are designed specifically for local residents who want to get away from it all. The best part of getting to experience the best of Arizona during the summer is that as the temperature rises, the rates drop.

cy S

co

tts

da l e

By MICHAEL GOSSIE

H

$169 per room, per night and includes a $50 daily credit for dining, spa, tennis or kids club, based on space availability, May 23 to Aug. 31. ➤

To book: (480)-585-4848 or scottsdaleprincess.com

Four Seasons Resort Scottsdale at Troon North The deal: With rates beginning at $179 per night, locals can experience the best of AAA Five-Diamond luxury with renowned personal service, three pools and complimentary cabanas.

➤

➤ To book: fourseasons.com/scottsdale Hermosa Inn ➤

The deal: Guests of The Hermosa Inn can now become

an artist for a day with their summer package, running May 1 through Sept. 7 and starting from $364 per night.

Perfect for amateurs and experienced artists alike, the package includes a one-night stay in a Rancho Casita, two drink tickets and a one and half-hour private painting lesson (for one person) with on-property artists from Carrie Curran Art Studios. ➤

eg

en

Hotel Palomar Phoenix ➤ The deals: “Night on the Town” includes accommodations and $25 gift card to Copper Blues starting at $129. “$102 and a Round of Brew” includes accommodations and a round of four beers at Blue Hound Kitchen & Cocktails. “Sweet Dreams” features accommodations, “Some Day, Some Night” children’s book by local author Jack Guinan, milk and cookies starting at $129. “Summer Getaway” offers accommodations, $10 iTunes gift card and two welcome cocktails at LUSTRE Rooftop Garden starting from $129. ➤

Fairmont Scottsdale Princess ➤ The deal: The Sip, Savor & Splash Package begins at

tR yat

To book: (602) 253-6633 or hotelpalomar-phoenix.com

Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch ➤ The deal: The Splash Into Summer package is available May 21 to Sept. 3. From just $169 per night, guests get a deluxe room (50 percent off second room), free dinner in SWB for one child with each paying adult, free golf for kids ages 15 and under, 50 percent off Camp Hyatt each day for up to two children per room, and access to the resort’s 2.5-acre water extravaganza complete with 10 pools and three-story, high-speed waterslide. ➤

To book: (480) 444-1234 or

scottsdale.hyatt.com and reference rate code SSPLSH

JW Marriott Desert Ridge Resort & Spa ➤ The deal: The “Fling & Swing” package starting at $169 is available May 22 through Sept. 2. The summer package includes a daily $50 resort credit, free golf on Faldo and Palmer championship golf courses (after 3 p.m. day of arrival, 11 a.m. on for remainder of stay), free meals for kids 12 and under, free access to the Family Escape Center, free in-room Wi-Fi, complimentary appetizer or dessert daily with an entree and free tennis. ➤

To book: familyflingandswing.com/

To book: (602) 955-8614 or HermosaInn.com.

73 AB | May-June 2014

Phoenix Convention & Visitors Bureau

Above: The Phoenician; Below: JW Marriot Desrt Ridge Resort & Spa

Loews Ventana Canyon Resort ➤ The deal: Dive into Summer Savings with Loews Best Rate. Rates start from $99 per night, May 21 to Sept. 4, and some restrictions apply. Rates are also based on availability. ➤ To book: (800) 235-6397 or loewshotels.com

Pointe Hilton Tapatio Cliffs Resort ➤ The deal: Discover refreshing pools, waterslides, complimentary kid’s meals, poolside activities, dive-in movies, all-suite accommodations, themed restaurants, children’s programs, championship golf and relaxing spa services for the ultimate in summer chill time. Rates starting from $89 per room, per night. ➤

To book: (602) 943-7752

or pointehiltontapatiocliffs.com

Kimpton’s Amara Resort & Spa ➤ The deals: Amara offers two summer packages.

“Rise & Dine” includes deluxe accommodations and a $25 daily dining credit starting from $339 per night. “Relax & Recharge” features deluxe accommodations and $100 daily spa credit starting from $339 per night. Packages valid now through December 31. ➤

To book: (928) 282-4828 or amararesort.com

L’Auberge de Sedona ➤ The deal: For the past three summers L’Auberge has had a “Drop it Like it’s Hot” deal that is geared toward Phoenix residents. As the temperatures rise in Phoenix, Phoenicians can escape the heat and drive north to Sedona and “Drop it Like it’s Hot.” At 4 p.m., L’Auberge takes the temperature on Oak Creek and compares it with the temperature at Sky Harbor. The difference will be the discount on your rate. ➤

Lodge on the Desert ➤ The deal: From May 27 to Aug. 14, guests can get deluxe accommodations at $99 per night with breakfast for two (plus tax). Based on availability. ➤

To book: (520) 320-2000

Sanctuary on Camelback Mountain ➤ The deal: Sanctuary offers the “For Arizonans Only” deal, which gives local residents 20 percent off the resort’s best available rate for a two-night stay or more. Guests must present a valid Arizona ID at check-in. Offer is valid June 1 to Aug. 27. In addition, Sanctuary’s starting rates drop 45 percent — from $529 to $289 per night — beginning May 16. ➤

To book: (800) 245-2051 or sanctuaryaz.com

Scottsdale Resort & Conference Center ➤ The deal: Rates from $89, guests choose from the resort’s Stay Scottsdale, Play Scottsdale or Summer Seclusions “Kid Free Zone” packages. Available May 23 to Sept. 1. ➤

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To book: (928) 282-1661 or lauberge.com

To book: (480) 991-9000 or TheScottsdaleResort.com

gReAt weAtHeR. gReAt meetINgS.

Your meetings need more awesome. How can you find it? Have your next meeting at Hotel Valley Ho. From indoor to outdoor, floor to ceiling, we’ve got the coolest spaces for whatever you need. Want Herman Miller executive chairs and the latest digital tech? You got it. Choose from four contemporary boardrooms, two ballrooms, and a full suite of media services. Want fresh landscapes and amazing views? No problem. Take five in the amazing Arizona weather, and enjoy the patios that accompany many of our meeting spaces. Or, host a reception at our Sky Line Rooftop, where you get 360° views of Downtown Scottsdale and Camelback Mountain.

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Phoenix Convention & Visitors Bureau Talking Stick Resort ➤ The deal: This summer, Talking Stick Resort is offering discounted hotel rates starting from $119 per night plus applicable taxes. ➤

To book: (480) 850-7777 or talkingstickresort.com

The Boulders, a Waldorf Astoria Resort ➤ The deal: The Boulders beckons travelers to the “cool side of the desert,” where temperatures are typically 10 degrees cooler than in the Valley. Seasonal rates dip to $99 per night. When booking a stay, request the “Best of Waldorf Astoria Package” and receive $50 resort reward for each night of the stay. The Truly Boulders Package includes luxury casita accommodations, daily $15/adult breakfast credit, 20 percent off spa services, complimentary parking and golf club/tennis racquet rentals for just $159 per night, double occupancy. ➤

To book: (480) 488-9009 or theboulders.com

The Phoenician ➤ The deal: Book and stay between May 30 and Sept. 1 and be entered to win a two-night New Year’s Eve stay at The Canyon Suites, Arizona’s only Forbes Five Star, AAA Five Diamond hotel. Summer rates start at $159 per night.

To book: (480) 941-8200 or thephoenician.com /offers

& reference rate code SUMMER

➤

The Scottsdale Plaza Resort ➤ The deal: At The Plaza, enjoy luxury accommodations from $99 per night plus a $50 food and beverage credit for any resort bar, poolside café or restaurant. ➤

To book: (480) 948-5000 or scottsdaleplaza.com

The Scottsdale Resort ➤ The deals: “Stay Scottsdale, Play Scottsdale Summer Package” offers rates from $89 weekdays and $99 weekends and includes accommodations, $50 food and beverage credit and weekend movie showings in the Pueblo Theater. The “Kid Free Zone” package offers rates from $89 weekdays and $119 weekends and includes accommodations, $50 food and beverage credit and Saturday and Sunday full breakfast buffet for two in the clubhouse. Casita suites available starting from $149 weekday and $179 on weekends.

Summer deals available May 23 to Sept. 1. ➤

To book: (800) 540-0727 or thescottsdaleresort.com

From top: Scottsdale Plaza Resorte; Pointe Hilton Tapatio Cliffs Resort; Hotel Palomar Phoenix; Amara Resort & Spa 76 AB | May-June 2014

RATES FROM

119

$

*

NO DAILY RESORT FEE

Vo t e d B e s t A d u l t S t a y c a t i o n – A ZC e n t r a l 2 0 13 S C O T T S DA L E | 8 6 6.8 7 7.9 8 97 | TALKINGSTICKRESORT.COM * Based on availabilit y May 1 – Augus t 31, 2014. Not valid for groups or with any other of fer.

Loc ally owned and c aringly operated by the Salt River Pima-Maricopa Indian Communit y.

7941-20_TSR-PIS-AZBizMag.indd 1

4/3/14 1:45 PM

Find yourself surrounded by beautiful mountain views and small-town friendliness as you enjoy shopping, dining and unique entertainment opportunities, including experiences at Horseshoe Park & Equestrian Centre, Queen Creek Performing Arts Center, Barney Family Sports Complex, Schnepf Farms, Queen Creek Olive Mill and Old Town Queen Creek Shopping & Dining District.

QueenCreek.org

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7/3/13 5:07 PM

Phoenix Convention & Visitors Bureau Westward Look Wyndham Grand Resort and Spa ➤ The deal: Get Baja Bound starting at $99, Your tropical staycation includes a discount “passport book” with savings on all restaurants, spa, tennis, horseback riding and more. ➤

To book: (520) 297-1151 or westwardlook.com

W Scottsdale Hotel ➤ The deal: The W lets you kick back and take it easy with two special summer packages. The Vitamin W comes with sunglasses, sunblock, beach bag, a poolside pitcher of Vitamin W and a room. The Road Trip includes a $25 gas card, overnight valet parking, a USB car charger and a room. Rates are from $160 per night and available for stays May 11 to Sept. 6

To book: (877) 782-0104 or wscottsdalehotel.com/ specialoffers

➤

Wild Horse Pass Hotel & Casino and Vee Quiva Hotel & Casino ➤ The deal: Gila River Casinos is a great place to stay and play! From June 1 to Sept. 25, guests can stay at Wild Horse Pass Hotel & Casino and Vee Quiva Hotel & Casino for rates starting as low as $69. The best gaming, dining and night life in the Valley, Gila River Casinos offers all the hottest slots and best entertainment destination all under one roof. ➤ To book: WinGilaRiver.com

From top: Sanctuary Camelback Mountain Resort and Spa; Fairmont Scottsdale Princess; W Scottsdale Hotel 78 AB | May-June 2014

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80 AB | May-June 2014

HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY

/// /// /// ///

What $1 billion in research buys us Manufacturing matchmaking Bringing innovative ideas to market The need For energy diversification

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83 AB | May-June 2014

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85 AB | May-June 2014

2014 HEAT advisory board Glenn Hamer CEO

Arizona Chamber of Commerce and Industry

Hamer has been president and CEO of the Arizona Chamber of Commerce and Industry since 2006. He has overseen the organization’s development into one of the most respected pro-business public policy entities in the state. In 2011, Hamer led the business community’s successful advocacy for passage of a landmark economic competitiveness package, which was hailed as the most significant job creation legislation passed in the state in a generation.

Mark Holohan President

Sethuraman Panchanathan Senior Vice President Arizona State University

Panchanathan is the senior vice president of the Office of Knowledge Enterprise Development for Advancing Research, Entrepreneurship and Economic Development. He is a foundation chair in Computing and Informatics; director of the Center for Cognitive Ubiquitous Computing; founding director of the School of Computing and Informatics; and helped found the Biomedical Informatics Department at ASU.

Robert F. Spetzler Medical Director

Arizona Solar Energy Industries Association

Barrow Neurological Institute

Holohan, Wilson Electric’s solar division manager, is a 33-year veteran of engineering and construction that includes well over 150 solar electric installations spanning nine states. As president of AriSEIA, he leads a nonprofit trade association that represents local, national and international solar companies in the Arizona market. The group’s focus is on education, professionalism and promotion of public policies that support deployment of solar technologies in Arizona.

Spetzler is a world-renowned neurosurgeon who specializes in cerebrovascular disease and skull base tumors. He has been involved in pioneering the technique of hypothermia and cardiac arrest for the treatment of difficult brain lesions. He has been honored by the American College of Surgeons and the Congress of Neurological Surgeons. In 1994, Spetzler was chosen to be the Honored Guest of Congress of Neurological Surgeons. At age 49, he was the youngest recipient of this prestigious honor.

Joan KoerberWalker President and CEO

Sandra Watson CEO Arizona Commerce Authority

Arizona BioIndustry Association

Watson brings more than 20 years of economic development leadership to Arizona. She and her teams have successfully attracted hundreds of companies that have invested billions of dollars in capital and created more than 75,000 quality jobs in Arizona. In her 17 years with the Arizona Department of Commerce, and now the Arizona Commerce Authority, Watson has also served as director of innovation and technology and continues to be a leading participant in these sectors.

Bruce Macdonough Steering Committee

Steve Zylstra President and CEO

Macdonough, co-managing shareholder at Greenberg Traurig, has concentrated his legal practice on mergers and acquisitions, public and private securities offerings, other sophisticated corporate finance transactions, and providing general corporate counsel to public and private companies. In 2013, he helped establish the Arizona chapter of the Aerospace & Defense Forum, a global aerospace and defense organization promoting collaboration and commerce among industry leaders.

Zylstra assumed the role of president and CEO of the Arizona Technology Council in December of 2007. He is responsible for strategy, development, operations and accomplishment of policy development, business goals and objectives and all financial matters related to the Council. In 2013, Zylstra assumed the role of chairman of the Technology Councils of North America — comprised of nearly 50 technology councils representing more than 16,000 member technology companies — for a two-year term.

Koerber-Walker works on behalf of the Arizona bioscience and medical device industries to support the growth of the industries, their members and our community on the local and national level.

Her past experience includes two years as the CEO of the Arizona Small Business Association. In 2004, she was recognized by the Stevie Awards, the “Oscar” for women entrepreneurs as one of the leading entrepreneurial women in the United States.

Arizona Aerospace & Defense Forum

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AZ Tech Council

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Here’s the

DeaL

Arizona Commerce Authority uses available tools to build business and bring business By ERIC JAY TOLL

88 AB | May-June 2014

“A

pple is the most profitable corporation in the world. Why does the state give them this huge tax break? I own a business. How come I can’t get the same deal?” The words are heard in a northeast Phoenix coffee shop. They reflect some of the sentiment bubbling under the surface when a new deal is announced and media report millions of dollars in taxpayer incentives going to some out-of-state company.

“Government shouldn’t be picking winners and losers,” Gilbert Public Schools Board Member Julie Smith was quoted as saying in opposing the tax break for the Apple/GT Advanced Technologies multi-billion dollar facility in Mesa’s Eastmark community. Her statement says a lot more than a parroting of political dogma.

“Arizona is not cutting a check and handing it to a company so they pick us,” explains Sandra Watson, CEO of the Arizona Commerce Authority. “This is an investment for taxpayers that has a measurable return on investment for the public dollars. It’s not a hand-out and it’s not corporate welfare.”

“When Intel made its decision to build its $300 million research and development facility in Chandler, Arizona was not competing with Austin (Texas) or Hillsboro (Oregon). Arizona was in competition with Asia,” reports Jason Bagley, Arizona government affairs manager for Intel. “Intel is a capital-intensive business.

We spent $20 billion on capital equipment in Arizona.

When we’re looking to build a new facility, we look at long-term costs. Tax incentives are a major component of that analysis.”

programs to grow and expand our existing businesses.

There’s a lot of value in growing an existing company or helping a new local startup succeed.”

The art of the deal

Able Aerospace is the kind of company Arizona Commerce wants to grow in Arizona. “Export businesses pay employees more and they bring money into the state,” emphasizes Watson. “That’s why we have programs for existing businesses to help them grow as well as for similar businesses looking to build here.”

(See story about AZ Commerce and manufacturing matchmaking on page 106 in this issue) “We do really well with putting up houses and buildings and waiting for people and business to fill the space,” she says. “But we learned in this recession ‘sunshine and cheap real estate’ is not what’s going to build the economy. The fact that we can do that well and fast helped the last boom, but it also caused our economic plummet.”

“We’ve got the right ecosystem for business growth,” says Watson. She uses that base for putting packages together. “The governor and legislature gives us a $25 million closing fund to ‘make the deal.’ The closing fund may be the most important tool we have.”

Bagley at Intel says Arizona’s attractiveness to business is more than job incentives and the closing fund. “They are an important consideration,” he says.

“Intel takes advantage. The most important incentive is the change in corporate taxes. They make Arizona very globally competitive. Companies like Intel and Apple are far more capital intensive than most businesses.

Whether we’re here and want to grow or a company is looking to relocate, the new sales-emphasis tax rates combined with the [research and development] tax credit administered by AZ Commerce are huge.”

Analysis, research and financial projections are the big players in the art of a deal to bring a company to Arizona. Companies that contribute to the Arizona economy and improve the job base are the ones being sought by the Arizona Commerce. The quasi-public agency is responsible for investing millions of taxpayer dollars into measurable returns. The target companies are exporters—meaning the products and services go outside the state and bring money back home.

“Over the last 30 years, Arizona switched from an export economy to a consumption economy,” explains Janet LeBar, vice president of research for the Greater Phoenix Economic Council. “In 1988, our median per capita income was higher than the U.S. average; today it’s 88 percent of the national median.”

Reversing that precipitous drop and the accompanying drop in the Arizona export economy are among primary objectives of the Arizona Commerce Authority. Those two issues are the reason the Authority carries a big toolbox when it talks with businesses interested in relocating to Arizona.

“All our programs are performance-based,” says Watson. “We welcome business to Arizona. We have a great tax climate, a great work force and it’s less expensive to build or open a facility here. Just because someone wants to take advantage of those assets does not mean they qualify for incentives from the state.”

“We’re trying to get the message out that our incentive programs are not just for Apple and new market entrants,” she explains. "We’re here with

Getting in the game

Back at the coffee shop or in the locker room, some may continue to grumble about “government handouts.”

Some business people stopped grumbling and picked up the phone.

“Florida was offering to put up a building for me. I was going to close up shop, take my 200 employees and move two thousand miles. I like Arizona, so I picked up the phone and made some calls to cities.” Lee Benson is CEO of Able Aerospace Services, a growing company that just moved into a new building at Phoenix-Mesa Gateway Airport. He says, “Mesa told me, ‘we can do that for you,’ and they did.”

Last April, the ribbon was cut on the company’s new corporate headquarters, immediately adding 50 employees on its way to a future workforce of close to 500. “Mayor (Scott) Smith put the deal together to build our facility. We lease it from Mesa. He connected us with (the Greater Phoenix Economic Council) and Arizona Commerce Authority,” Benson reflects. “If they hadn’t stepped up, we’d have moved. We’re an export business, we have virtually no Arizona sales, but we work in more than 60 different countries as well as a multitude of (U.S.) states.”

Shining example

89 AB | May-June 2014

System appeals to businesses

Bagley says that the tax system now focuses on sales rather than equipment. The change, started by Gov. Janet Napolitano and enhanced by current Gov. Jan Brewer are perfect for attracting and growing export-based businesses like Apple, Intel, Able Aerospace and others.

“Export businesses are not just companies selling overseas,” Watson points out. “When our businesses sell or move products into California, Texas, Colorado and elsewhere, they are exporting from the Arizona economy. We want to grow that side of business.”

To help Arizona businesses grow, the Authority has opened offices in California. One of those offices is in Silicon Valley Bank in the Bay Area. “Silicon Valley Bank is an Arizona fan, and when we asked for a good place to locate the Arizona office, they offered their own building.” She smiles, “It gives us a prestigious address with entrée and connections into the market.”

Sure, the AZ Commerce offices there are heavily involved with getting California businesses to look at headquarters and regional facility relocation into Arizona, but also getting them to look at buying Arizona-made products. Watson says, “We help Arizona businesses get in doors to sell to California companies.”

Arizona is one of the top locations in the United States for new business start-ups (see related article on AZ Commerce and programs for entrepreneurs and start-ups on Page 110 in this issue). Watson says that Commerce puts as much emphasis in growing a new business as it does in recruiting businesses from outside Arizona. “We want to build Arizona as a headquarters base,” she says. “There is no better way to do that than by helping our existing businesses grow into formidable corporations and our startups to get into the market.”

“Every policy we implement is a policy available to all businesses,” explains Watson. “All regulatory reforms, all new tools, and everything that helps create jobs and grow a business are available to any qualifying company. It is all based on meeting performance standards.”

Jason Bagley

Lee Benson

Janet Lebar

Sandra Watson

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ACA’s major victories Citing Arizona’s competitive cost of doing business, business-friendly atmosphere, access to highly skilled talent, the Arizona Commerce Authority has been at the forefront of major recruitment successes. Here are some of the ACA’s major victories: Apple and GT Advanced Technologies.

700 employees; $1.5 billion in capital spending General Motors IT Innovation Center.

1,000 employees; $21 million in capital investment.

GoDaddy Arizona Operations Expansion and Global Technology Center.

300 jobs; $27 million capital investment

State Farm Insurance Regional Headquarters.

5,000 jobs; $600 million in capital investment.

Picking the right tools

Every project that comes before the Arizona Commerce Authority is different. They go through the same evaluation process, but that helps the agency select the tools fitting business needs. When a business knocks on the door, Watson and her team reach into the toolbox for right program to meet its needs.

“There is no wrong door,” says Watson. “(Commerce) can help just about any business whether it be resource connections, workforce training, encouraging angel investment with tax credits or tapping the closing fund. We provide resources and market access for any Arizona business.”

The Authority is not waiting for the phone to ring. Watson and her team are providing a showcase on the international stage promoting Arizona business and business climate in the U. S., Mexico, Canada and Asia. Along with GPEC, Tucson Regional Economic Opportunities and other economic development organizations, AZ Commerce has also been part of sales pitches in Europe.

One of the organization’s most successful local events is the Requirements Conference. This annual program matches local vendors and suppliers to business buyers in Arizona and other markets. “The conference helps our local companies sell to the new corporations opening facilities and service centers in Arizona,” says Watson.

She concludes, “We’re all about marketing, promotion and education.”

Building relationships and opening dialogues — this is what the Arizona Commerce Authority is all about. It implements policy from the governor, who co-chairs its board of directors, and creates a value proposition for Arizona business. That value proposition is to invest when the results are better paying jobs, an improved tax base, and put down rooting for the businesses Arizona grows best.

Building a better

l ife Focusing on discovery, development and delivery will drive Arizona’s bioscience industry and quality of life

I

By JOAN KOERBER-WALKER

magine a total artificial heart that keeps you alive when your heart can’t, or diagnostic tools that help doctors identify disease early so that they can treat it early and get better results. Envision pacemakers about the size of your pinky nail or therapies that alleviate pain or combat the deadliest of diseases. Can we develop new agricultural products that can drive new industries and help the planet too? This is not a wish list for “someday.” These are just a few of the innovations that are being produced by Arizona’s bioscience industry today.

Bio is life

The life sciences focus on living things. So, if it’s alive, was alive or keeps things alive, it’s bio.

Arizona is home to one of the fastest growing, emerging bioscience industries in the country thanks to a concerted effort by leaders from across the state that is supported by the Flinn Foundation and the unflagging efforts of innovative companies from Flagstaff to Tucson and points in between.

The Arizona Bioscience Roadmap Steering Committee, more than 100 leaders from philanthropy, industry, government, and academia, work together to map out objectives, establish programs, and measure progress. They’ve been guiding the process since 2002, making this collaborative effort the nation's longest running bioscience industry development project.

Building on the 3 D’s

Rising to the level of a top emerging bioscience state is a significant accomplishment in 10 short years. In the overall rankings, this places Arizona in a very respectable place in the middle of the pack. The Biotechnology Industry Association ranks states on a scale from 1-5, with a 1 being the top tier. Today, Arizona ranks as 92 AB | May-June 2014

By the Numbers The success of the Flinn Foundation’s Bioscience Roadmap, a long-term plan launched in 2002 to make the state’s bioscience sector globally competitive, is undeniable and quantifiable. The Flinn Foundation released an updated Roadmap in April.

$463 million: Biosciencerelated academic research and development in 2012. This represents 1.13% of the U.S. total.

106,846: The total number of bioscience jobs in Arizona in 2014.

Of that number, 23,545 are nonhospital bioscience jobs.

$62,775: Average salary for a worker in Arizona’s bioscience industry in 2014.

1,383: Number of bioscience establishments in Arizona in 2014.

$182 million: Amount of National Institutes of Health funding in Arizona in 2013. This represents 0.82% of the U.S. total.

0.91: This is Arizona’s 2014 location quotient, which is the level of industry concentration relative to the nation. 1.0 represents the national average.

$37 million: Bioscience venture capital in Arizona in 2013. This represents 0.38% of the U.S. total.

Joan KoerberWalker is an entrepreneur, investor, and former Fortune 500 executive. She currently serves as the president and CEO of the Arizona Bioindustry Association.

a 3. But, Arizona can be much more.

Moving up the ranks is our next goal.

Top tier bioscience states have mastered the three D’s — from discovery to development to delivery — and strike a balance between investments and results across a continuum. Over the last decade, Arizona has made remarkable progress, but we still have gaps to bridge to get to the top tiers.

Discovery comes from the exploration of what might be possible. It occurs in our universities, in our private institutes like the Banner Alzheimer’s Institute, Barrow, C-Path, International Genomics Consortium and the Translational Genomics Research Institute (TGen), in our private companies and in the clinical setting.

We have attracted top talent and we will need to attract more. That means more investment and support will be required from government, industry and philanthropic partners.

Development comes next in the form of university tech transfer, translational research, industrial development, or clinical development and trials. None of this happens without capital.

Development capital is increasing both from state governments and private sources. It just is not here in Arizona at the needed levels yet. This means innovators must waste time traveling to “follow the money” and sometimes relocate to receive it. Unless Arizona resolves its investment capital crisis in a meaningful way and at bioscience scale, the benefits of our discovery will be realized elsewhere.

Delivery — taking products to market and gaining market acceptance — is the final step. All the discovery and development in the world will mean little if there is not a final benefit for customers, patients, and investors. Delivery requires still higher levels of investment and a labor force that can support it.

Next steps

Arizona’s success in biosciences to date has been derived through collaborative efforts, strategic investment in research facilities and talent, innovators committed to bringing new life saving and life sustaining products to market, and partnerships between philanthropy, industry, government, and academia.

Success comes through deliberate actions and activities. Here are just a few that will happen in 2014: • June 19, 2014 – Exciting Arizona based companies and innovations will be showcased

at the 2014 AZBio Expo, with speakers including the leader of one of Arizona’s most respected medical device manufactures and the CEO of Insys Therapeutics, the top performing biotech IPO of 2013.

Learn more at AZBioExpo.Com. • Aug 20-21, 2014 – Program mangers from the National Science Foundation and the Nation Institutes of Health will travel to Arizona and provide insights on how to best access Small Business Innovation Research (SBIR) Grants.

• September 17-18, 2014 – Arizona will host companies from across the Rocky Mountain and Southwest region and life science specific investors at the First Annual White Hat Life Science Investor conference in Phoenix. Learn more at WhiteHatInvestors.com.

Future Opportunities

Investments by the State of Arizona have helped to get us to where we are today. Our elected leaders have the opportunity to continue drive our momentum.

Here are two ways we can move forward faster: • Investing in research infrastructure at our state universities: Our universities have committed to doubling the research dollars they bring into the state by growing from today’s rate of $1.1 billion per year to $2.2 billion by 2020. The Arizona Board of Regents is asking for State approval of a onetime, $1 billion bond initiative to put in place the facilities they need to achieve this goal. Just do the math.

That’s a smart investment.

• Leveraging federal investment via SBIR: Federal SBIR programs provide grants to companies that are discovering and developing new life science innovations. The Federal Agencies evaluate the potential, award the grants and measure the accomplishment of the outcome of the project. Today, 10 states provide matching grants to these small business innovators to help them drive from discovery to delivery. It’s time that Arizona does too.

To become a top tier bioscience state, Arizona must master the three D’s and support our intentions with committed and sustainable investments across Arizona’s public, private, and philanthropic sectors.

When we do, we grow.

If we do not, Arizona life science innovations will still emerge, but the benefits of increased employment and an increased tax base will be harvested elsewhere. That’s not the way we do things in Arizona.

93 AB | May-June 2014

Roadmap to

success Updated plan aims to make Arizona a global competitor and national leader in bioscience by 2025

94 AB | May-June 2014

T

he strategic plan that has guided Arizona’s fast-growing bioscience sector for nearly 12 years is gearing up for a new decade.

“Arizona’s Bioscience Roadmap: 2014-2025” was unveiled in April in Phoenix, Tucson and Flagstaff, the state’s three metropolitan areas that feature growing bioscience hubs.

The plan includes updated strategies that can strengthen and diversify Arizona’s economy while providing Arizonans access to the latest healthcare innovations.

“The updated Bioscience Roadmap builds on the successes of its first decade and adds contemporary strategies to take Arizona’s bioscience base to the next level,” said Jack Jewett, president and CEO of the Flinn Foundation, which commissioned the update and the original Bioscience Roadmap in 2002. “Arizona is now known as a top emerging bioscience state, but we have far to go to reach our full potential.”

The updated Roadmap will continue to focus on developing Arizona’s biomedical research infrastructure but will emphasize turning this research into new therapies, products, diagnostics, jobs, firms, and other benefits to Arizona. Commercialization, entrepreneurship, creating a critical mass of bioscience firms, and the development of talent are prime themes.

The Roadmap’s overarching vision is for Arizona — a young but rapidly growing state in the biosciences — to become a global competitor and national leader in select areas of the biosciences by 2025.

Over the first decade, Arizona built major research facilities at its universities, formed new private research institutes, attracted top talent, created high-tech business incubators, and greatly expanded statewide STEM (science, technology, education, math) education programs. The number of Arizona bioscience industry jobs grew by 45 percent, nearly four times greater than the nation.

“Arizona has many bioscience strengths and opportunities, but a substantial increase in private and public investment will be needed over the next decade to realize the Roadmap’s goals,” said Walter Plosila, senior advisor to the Battelle Technology Partnership Practice, the Columbus, Ohio-based nonprofit research and development organization that authored the original Roadmap and its update.

Plosila noted that Arizona’s greatest needs are access to risk capital by startup and emerging bioscience firms, building a stronger bioscience entrepreneurship culture and an expansion of the research infrastructure combined with commercialization at the state’s universities.

The new Roadmap plan features five goals, 17 strategies, and 77 proposed actions. The actions are meant to evolve as needs change over the course of the decade. The plan was developed

by Battelle following research, interviews and focus groups with more than 150 local and national bioscience leaders, including extensive input from Arizona’s Bioscience Roadmap Steering Committee.

“An emphasis on the full spectrum of the biosciences — from research to hospitals to bio-agriculture — and a renewed focus on resources, collaboration, and long-term patience is needed for Arizona to continue its ascent in the biosciences,” said Martin Shultz, senior policy director for Brownstein Hyatt Farber Schreck, who chairs the Roadmap Steering Committee. “The impact can be profound — the biosciences are a multibillion-dollar industry for Arizona.”

There are six industry segments that comprise the biosciences in Arizona: agricultural feedstock and chemicals; drugs, pharmaceuticals, and diagnostics; medical devices and equipment; research, testing and medical labs; bioscience-

Jack Jewitt

Martin Shultz

Goals of the Roadmap

Arizona’s Bioscience Roadmap 2014-2025 is a long-term strategic plan to make the state globally competitive and a national leader in select areas of the biosciences. The Roadmap is available for download at flinn.org. Here are the Roadmap’s goals:

Goal 1: Become an entrepreneurial hub. Form a hub of bioscience entrepreneurs and new enterprises across Arizona.

Goal 2: Evolve research into practice. Increase the ability

of research-performing institutions to turn bench research results into improved disease/ illness prevention, detection, and treatment, plus bioagriculture and industrial biotechnology products.

Goal 3: Develop bio-talent. Make Arizona a bio-talent powerhouse where such talent is developed, educated, trained, and retained.

Goal 4: Connectivity. Promote Arizona to economic

partners in neighboring states, Canada and Mexico as a place where bioscience research, health care delivery, and commercialization seamlessly intersect.

Goal 5: Collaboration. Pioneer a new level of commitment to partnerships to sustain and enhance the state’s “collaborative gene” reputation.

related distribution; and hospitals. A new economic-impact analysis by Battelle estimates the total revenue generated annually by Arizona’s bioscience industry—not counting hospitals—to be $14 billion. With hospitals included, the figure exceeds $36 billion.

Based on the latest industry data (2012), Arizona has 106,846 bioscience jobs spread across 1,382 establishments and an annual average wage of $62,775 — 39 percent higher than the private-sector average. The numbers do not include academic research jobs at universities or private research institutes.

Hospitals account for the majority of the state’s bioscience jobs. With hospitals removed from the equation, the other segments combine for 23,545 jobs, 1,266 establishments, and average annual wages of $85,571. Growth in the non-hospital segments accelerated dramatically over the last few years.

The Roadmap also includes analyses of Arizona’s bioscience sector that were critical in developing the strategies and actions, such as an assessment of Arizona’s bioscience strengths, weaknesses, opportunities, and challenges. It identified Arizona’s core competencies as cancer research, neurosciences, bioengineering, agricultural biotechnology, imaging sciences, precision medicine, diagnostics, health information technologies, and health economics.

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HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY

Impact players ➤ In addition to spearheading the international Alzheimer’s Prevention Initiative, researchers at Banner Alzheimer’s Institute have an average of 30 clinical trials being conducted at any given time. These range from treatment studies on the use of investigational drugs to research studies to better understand the aging process and the impact Alzheimer’s and other memory disorders have on the brain.

GlobalMed

Telemedicine has become a reality for those who are in locations where immediate healthcare isn’t a possibility. By providing connected health with remote specialists, more patients can stay at their local hospital. This allows facilities to retain patient revenues, lowers healthcare costs by 30 percent and reduces hospital readmissions by 83 percent. Scottsdale-based GlobalMed, which develops integrated telemedicine solutions for healthcare providers and corporate health programs, is helping to meet the growing demand of healthcare telecommunications in the United States.

And demand for GlobalMed’s products and services is staggering. The company has grown more than 1,000 percent in the last year, increasing its revenue to $32.2 million and creating more than 100 jobs.

Guided Therapy Systems

Under Michael Slayton’s leadership as CEO and chief technical officer, Guided Therapy Systems has grown from a small, Arizona-­based R&D company to a world leader in intense therapeutic ultrasound and imaging with technologies sold around the globe by corporate partners representing the most recognizable and respected names in medical devices.

Slayton is also the founder of two of Guided Therapy Systems’ most notable and entrepreneurial successes: Ulthera in 2004 and Xthetix in 2006.

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➤ Under a new grant from the National Institutes of Health, Phoenix Children’s Hospital, Barrow Neurological Institute and the Translational Genomics Research Institute are studying the role of extracellular RNA as biomarkers in hemorrhagic brain injuries. ➤ Fueled by Subsys, the company’s breakthrough treatment for cancer pain, Chandler-based Insys Therapeutics delivered $40.2 million in revenue during the fourth quarter, a 673 percent increase over the year-ago quarter. The company plans to file at least one new drug application and four investigational new drug applications in 2014. ➤ Tucson-based HTG Molecular Diagnostics provides simple, cost effective solutions for accurate RNA testing. In 2013, the company commercialized its Edge instrument platform and has been expanded to fully automate sample and targeted library preparation for nextgeneration sequencing. ➤ Ventana Medical Systems and Tucson Medical Center have collaborated to implement what they call the “lab of the future” at TMC, connecting state-of-the-art technologies for the best patient results. It allows the hospital to perform more in-house tests, reducing the need for outside laboratories and creating a greater continuity of care.

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HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY

$1billion us

What will

buy

State looks to expand universities’ research facilities and capabilities, opening doors to healthcare and bioscience breakthroughs By ERIC JAY TOLL

I

t’s quite a return on investment. Put a dollar in the pot. Five years later, take home double the money and improve the quality of life for Arizonans in the process. The investment strategy worked in 2003, so why not try it again, especially after those who were part of the last deal have taken home $5 for every $1 invested?

That’s exactly what some Arizona officials are trying to do.

The Jobs 2020 Proposal, or Senate Bill 1378, hopes to pump $1 billion into research. It is modeled after the successful 2003 plan that became a catalyst which helped Arizona earn a reputation as one of the nation’s fastest-growing bioscience regions.

In 2003, the Arizona State Legislature authorized $34.6 million per year for 23 years to fund new research facilities

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at all three universities. A total of $500 million was invested into research and development infrastructure at Arizona State University, Northern Arizona University and University of Arizona. In five years, the Arizona Board of Regents (ABOR) reports that $2.5 billion in direct economic benefit was pumped into the state’s economy. During that time, high-paying bioscience jobs grew substantially faster in Arizona than the rest of the nation. Nationally recognized bioscience research institutes, facilities, companies, incubators and education programs cropped up throughout the state. Star scientists relocated to Arizona, bringing their labs and research grants with them. The result: A sector of Arizona’s economy has developed that is producing high-wage jobs and helping the state weather

economic storms, while making the latest healthcare therapies and products available to Arizonans.

Now, ABOR wants to try to duplicate its success on a larger scale — double the scale. ABOR wants the Legislature to approve $1 billion in bond money to pay for new facilities in hopes of doubling the research grant funding pulled in by the three universities and attracting top researchers who are working to discover cures for diseases. It was high on the Regents’ wish list for the 2014 legislative session.

“Research at Arizona’s universities pumps $1 billion per year into our state’s economy,” said ABOR President Eileen Klein. “We believe that this is one of our greatest opportunities to broaden our economy, which is why the Arizona Board of Regents has set goal to grow the research output to $2 billion annually to make it one of Arizona’s largest economic segments.”

$1 billion investment

With charts and numbers, smiles and plans, the Regents, university presidents, business groups and entrepreneurs went to the Legislature with a blueprint. State economy and business leaders want ABOR to invest the $1 billion into 10 new buildings, a half dozen major additions and renovations, and laboratory and research facility upgrades. With its proven track record, ABOR projects at least a $5 billion direct economic return. Some economic development officials project the indirect return could be greater than $7 billion in five years.

“Top-flight research facilities attract talent, grants and equipment,” Klein said. Marking her first year leading the board, Klein said the enterprise plan is the key to the future of the $4 billion public enterprise that is the state university system. The three colleges have risen dramatically in the national stature as a result of the 2003 initiative.

“The research and development program is needed to create new partnerships and ensure that we are turning out graduates to meet the needs of Arizona’s businesses,” said Klein. Out of the 2003 program, she said ASU research and development spun off more than 100 companies — many of which are major players in Arizona today.

Shopping for future

The three schools are not monument building or slapping lipstick on old facilities. The enterprise program directs the dollars to carry out a strategic research plan. “(University of Arizona) plans to double research expenditures and needs the space to house the researchers and facilities,” said Jennifer Barton, interim vice president for research. “Our strategic research areas are space sciences, water and the arid environment, defense and security, and biomedical research.”

Barton said that UA’s proposed share — $450 million for five new buildings, four in Tucson and one in Phoenix — are tied to measured returns. The university’s share of the previous

program generated $1.2 billion in economic impact, she said.

Construction at ASU is projected at $400 million for biodesign, engineering and technology facilities. NAU plans a new biological sciences building and laboratory upgrades for $150 million.

Reaping the rewards

“For businesses in Arizona, first there is the immediate multiplier from the $1 billion in new construction,” Klein pointed out. “Then there’s the expanded staff, the equipment and supplies, support services and the value of the research and development product.”

There are real results, too, she said. “An undergraduate student working in an NAU public health program discovered the source of the cholera epidemic in Haiti following the earthquake. The result saved thousands of lives.”

The direct economic value of construction alone, reported Ken Simonson, chief economist for the Associated General Contractors of America, will be $2.3 billion pumped back into the economy and 21,000 new and retained jobs.

Barton said UA’s program will also generate spin-offs. “We saw a number of high-technology companies grow from the previous program.” Barton said that Arizona expects the new program to at least match the return on investment from the 2003 program. The Wildcats’ return to the state was $1.2 billion from its share of the $500 million program.

Business gets the return

ABOR wants to finance the construction with state-backed bonds. Repaid from general tax revenues, the bond money will not impact tuition, operating budgets or dedicated revenue streams to the schools. The state will repay the bonds with the revenue generated by new tax revenues generated by the successful research partnerships, patent commercialization and technology transfers.

Arizona’s universities are already heavily committed to state economic contribution. The three schools are involved with cutting-edge programs designed to connect entrepreneurs with patents ready for commercialization. The three universities have cut a process that normally takes years in other states to a matter of months. NAU and ASU run the AZ Furnace program, incubating businesses from concept to angel financing in 12 months — a previously unheard schedule for development.

“The investment we’re making in research and development facilities is not just for researchers,” she said. “We work with companies to help businesses grow, expand and develop products using our technology and talent.”

Officials now need to keep the conversation going to ensure that the $1 billion baby is a high priority on the Legislature’s 2015 agenda. With a new governor and shift in state leadership, the door is open for Arizona economic opportunity.

Biggest healthcare companies Here are Arizona’s 10 biggest healthcare companies, based on 2013 employment: 1. Banner Health, 28,011 employees

6. Abrazo Health Care, 4,123 employees

2. Dignity Health, 7,744 employees

7. Carondelet Health Network, 3,668 employees

3. University of Arizona Health Network, 6,118 employees

8. Phoenix Children’s Hospital, 3,414 employees

4. Scottsdale Healthcare, 6,700 employees

9. John C. Lincoln Health Network, 3,211 employees

5. Mayo Foundation, 4,855 employees

10. TMC HealthCare, 2,977 employees

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HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY

Impact players ➤ With the help of new, large-scale solar photovoltaic plants and customer-owned solar, APS added approximately 410 megawatts of solar capacity to its generating portfolio in 2013. Overall, APS has spent nearly $1 billion on solar projects across the state and now utilizes 750 megawatts of solar capacity, enough to serve the needs of 185,000 APS customers.

PROVIDED

POWER MOVE: The energy generated by Cove Fort Geothermal plant will offset enough

carbon dioxide emissions each year to equal removing 15,000 cars from the road.

SRP

SRP is purchasing the output of the 25-megawatt Cove Fort Geothermal plant in Beaver County, Utah. Geothermal power plants produces electricity from naturally occurring heat below Earth’s surface. Geothermal energy is considered renewable energy because no fuel is consumed and the energy is from a naturally occurring source. Under SRP’s Sustainable Portfolio goals, it must meet 20 percent of its retail electricity requirements through sustainable resources by 2020. SRP’s sustainable portfolio is currently providing more than 10 percent of retail energy needs with sustainable resources such as solar, wind, landfill gas, geothermal, biomass, hydro and energy-efficiency measures.

Intertek

Intertek, a leading provider of global testing, quality and safety solutions, is working with the United States Department of Energy and several national laboratories taking the lead on collecting “real world” data on a variety of alternative energy vehicles.

Testing at Intertek’s Phoenix location includes vehicle performance, durability and operational costs, helping consumers and the automotive industry better understand how vehicle technologies intended to reduce the consumption of petroleum actually perform in the streets.

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➤ Questar Fueling Company, subsidiary of Questar Corporation, plans to build a compressed natural gas (CNG) fueling station in Phoenix. The public-access station will provide fast-fill CNG fueling for fleet operators with mediumand heavy-duty trucks as well as motorists who drive light-duty natural gas vehicles. The station will open later this year. ➤ Gilbert-based Jatrobiofuels is creating sustainable biodiesel and bio jet fuel from non-food sources.

The company is cultivating Jatropha Curcas, which has a higher oil content than most oil seeds at greater than 40 percent.

It can also grow in marginal and poorly irrigated land that is not suitable for food crops.

JatroBiofuels has a production goal of 1 million gallons by 2015. ➤ KB Home has given Arizona homebuyers the opportunity to own a solar-powered home. Combined with the energy-efficient features already included in its Energy Star certified homes, solar power will help KB homeowners reduce their monthly energy bills by as much as 80 percent when compared with a typical resale home.

PROVIDED

BEING WATCHED: The 2013 Ford Fusion Energi Titanium and the 2014 Honda Accord plug-in hybrid electric vehicle (PHEV) are among the models currently under evaluation

by Intertek in Phoenix.

➤ In March, First Solar set a world record for cadmium-telluride (CdTe) photovoltaic module conversion efficiency, achieving 17 percent total area module efficiency in tests performed by the U.S. Department of Energy’s National Renewable Energy Laboratory. The company also achieved a world record in CdTe research cell efficiency of 20.4 percent.

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HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY

Power

Play The Arizona Energy Roadmap plays a vital role in diversifying Arizona’s energy mix

By CHRIS DAVEY and MICHELLE DE BLASI

Chris Davey, president at EnviroMission, and Michelle De Blasi, attorney at Gammage & Burnham, co-chair the Arizona Energy Consortium.

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I

t’s no secret that fossil fuels comprise a substantial portion of the U.S. energy generation resources. Even with several western states’ recent decisions to retire their coal generation resources, currently those resources are more often being replaced with natural gas than with clean energy resources. These decisions are being driven in large part by the current price of natural gas and new discoveries through “fracking,” the process of drilling and injecting fluid into the ground at a high pressure in order to fracture shale rocks and release the natural gas trapped inside. Natural gas prices have historically been volatile, and with liquefied natural gas terminals being developed for export, this pricing trend is likely to continue and be more closely tied to global pricing.

Although Arizona hosts Palo Verde, the largest nuclear power plant in the country, the state does not have many of its own oil or natural gas resources and most of its coal reserves reside on Sovereign Nations, namely Navajo and Hopi. Arizona does benefit, however, from renewable resources with its abundance of sunshine and a small amount of wind. When one considers the lack of diversity in its own natural resources, it is concerning that less than 2 percent of Arizona’s entire energy mix is renewable. Although current renewable technologies have found it difficult to compete with more efficient fossil fuel and nuclear generation, there is clearly a strong societal movement toward the importance of including renewable resources in the mix. EPA’s recent push toward more stringent regulation of carbon and greenhouse gas emissions has severely impacted the western states’ dependence on coal resources, forcing the utilities with coal-fired generation to take a hard look at what the future will hold for their energy mix.

Despite its current somewhat diverse mix of energy generation, it will be difficult, if not impossible, for Arizona to continue to adjust to the changing market conditions and environmental regulations without a comprehensive energy plan to provide long-term direction and focus. Such a plan will need to address issues such as developing supportive state and federal policies to promote industry growth and providing better access to capital for further development of the industry. It is for this reason that the Arizona Energy Consortium (AEC) has worked within the energy industry to develop The Arizona Energy Roadmap. The AEC provides a forum to have an open discourse on these types of issues in a thoughtful and methodical way to help further develop the industry. The roadmap is a living document that will evolve with the development of the energy sector through the implementation of innovation and changes in policy, and by incorporating other private and public sector efforts to guide the industry.

Arizona has had its share of uncertainty within its energy industry. The deregulation and net metering battles are just two of the issues that have brought uncertainty to

our market. Without a clear plan as to how Arizona desires to develop and transform its energy mix, finding common ground to resolve these issues will remain difficult. It is critical to remember that Arizona competes for business that will go to other states if we do not have the appropriate policies in place to be competitive, and these policies cannot be made in a partisan vacuum. It is equally important that an energy plan come from both industry and regulators so that it works in the real world, and benefits both the providers and users of energy. Any imbalance of equities will ultimately result in an unstable market that prevents growth instead of encouraging it.

A strong emphasis throughout The Arizona Energy Roadmap is that energy policy must create a stable climate for investment, be sustainable, and protect the needs of the current generation without compromising the availability of energy for future generations. The continued adoption and expansion of the clean energy sector cannot happen until investment capital is easier to access. Securing capital for the continued diversification of Arizona’s energy mix remains an issue for much of the industry due to the lack of a clear and stable policy and regulatory environment. There are tools that can be developed, such as Master Limited Partnerships (MLPs) and Real-Estate Investment Trusts (REITs) that allow tax benefits to be enjoyed by a larger investor base to enable renewables and efficiency measures to leverage the same tools that have enabled the expansion of oil and gas exploration in the U.S. As with building a strong investment portfolio, it is critical to diversify and pursue multiple resources with energy. For a low carbon environment to continue to flourish, the industry mindset must shift from viewing renewable generation and energy efficiency as a means to satisfy a series of mandates to an opportunity diversify its energy mix, while at the same time stimulating and enhancing Arizona’s economy. New business and development is attracted by consistent policy and access to capital. To be successful, Arizona must adopt an energy policy conducive to both.

Arizona has had its share of uncertainty within its energy industry.

Goals of Energy Roadmap Leaders of the Arizona Energy Consortium say a fully realized vision and execution of its Arizona Energy roadmap, supported by consistent policies, will provide the following sustainable benefits to Arizona: ➤ A more diverse energy mix, including an increase of renewable energy for in-state use and export ➤ Enhanced energy export potential ➤ Heightened energy self-sufficiency and national and state security ➤ Increased transmission reliability ➤ Continued low cost energy ➤ Enhanced job creation and higher-wage jobs within Arizona ➤ Increased state economic revenue 103 AB | May-June 2014

TRENDSETTERS

HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY Orbital Sciences Corporation Orbital Sciences Corporation in Gilbert has started production of 81 satellites for the Iridium NEXT program as part of a contract between Orbital and Iridium’s prime contractor, French-Italian aerospace company Thales Alenia Space. The production signifies the opening of a Foreign Trade Zone at the Gilbert facility, which allows Orbital to reduce program costs by importing foreignsourced hardware from Thales Alenia Space.

Aerospace & Defense Forum The Arizona chapter of the Aerospace & Defense Forum was launched in October 2013 as part of a global aerospace and defense leadership community. Members of Arizona’s steering committee represent the Greater Phoenix Economic Council, General Dynamics C4 Systems, Arizona Commerce Authority, Snell & Wilmer and Greenberg Traurig. Chapter Chair Stephane Frijia, director or research and strategy for GPEC, answered a few questions.

How have defense cuts impacted Arizona?

“In FY2013, Arizona received the fifth-largest share of new defense obligated awards in the country. The number of companies awarded new prime awards was 15 percent lower compared with previous years. However, these top line measures understate a very complex procurement dynamic. Total spending of purchases of certain types of procured products and services, decreased significantly, yet increased for others. Thus, the impacts of the cuts have not been felt uniformly across the industrial base.”

How is Arizona an innovator in aerospace?

“Arizona is well known for continuing to produce cutting-edge technologies from avionics, guiding systems and life support in extreme environments to remote sensing instrumentation, communication and cyber.”

Where is the future of aerospace and defense in Arizona?

“The future will depend on our aerospace and defense firms’ ability to continue to pivot toward emerging technology opportunities; remaining focused on developing cutting edge technologies; and on the ability to diversify the custom base away from over-reliance on DoD and other federal spending. It is critical that these firms find commercial application for their technology. With the right support mechanisms, these firms can become more commercially viable, productive and export oriented.”

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Impact players ➤ Raytheon Missile Systems, which employs 11,500 in Arizona, successfully tested communications advancements to the Tomahawk Block IV cruise missile this year. The missile maintained communications and provided updates on its location before hitting the target, validating its capability to engage challenging targets. ➤ Phoenix-based Honeywell Aerospace is the largest manufacturer of aircraft engines and avionics as well as a producer of auxiliary power units and other aviation products. It generates $10 billion in annual revenue from a 50/50 mix of commercial and defense contracts. ➤ SwissTeknik in Tempe is a three-time Inc. 500/5000 company specializing in the teardown and salvage of retired aircraft. The company re-certifies the components and sell directly to Boeing, Bombardier, Airbus and Gulfstream operators worldwide. ➤ Gilbert-based Rigid Industries has experienced three-year growth of 2,528 percent as it transitions from being a leading supplier of LED lights for recreational vehicles into being a leading manufacturer of military LED lights. ➤ Embry-Riddle Aeronautical University in Prescott is the world’s largest, fully accredited university specializing in aviation and aerospace and is also a major research center in partnership with the aerospace industry, other universities and government agencies. ➤ Paragon Space Development has has experienced threeyear growth of 49 percent as it designs, builds, tests, and operates life support systems and thermal control products for astronauts and designs and builds thermal control products for unmanned space missions.

i

t used to be when I traveled to different business meetings across the country, people would ask me about Arizona’s politics. While we still have reputation issues to repair, the questions I’ve been getting recently are more focused on the buzz they’re hearing about our growing technology sector.

There’s good reason Arizona is getting noticed for its growth. Over the last five years, Arizona has developed one of the most robust technology entrepreneurial ecosystems in the country. The state is home to five of Deloitte’s 2013 “Technology Fast 500” firms, specifically First Solar, LifeLock, Telesphere, Inilex and GPS Insight.

Other start-ups that have been home grown in Arizona into industry leaders include Axosoft, GoDaddy, iCrossing, Infusionsoft, Insight Enterprises, LimeLight Networks and WebPT. We were able to accomplish our strong entrepreneurial spirit in part by drawing the attention of the media and the state’s policy makers to the need to diversify our economy away from construction and climate into a knowledge-based economy with higher paying jobs. Our efforts resulted in a tax credit for qualified research and development that is the best in the nation and a successful angel investment tax credit.

A lot of other resources have been invested. Over a dozen business incubators and accelerators call Arizona home, providing resources to support technology entrepreneurs. In addition to graduating a vibrant workforce to fuel quality jobs, Arizona’s world-renowned universities and community colleges are also heavily engaged.

Arizona State University (ASU) runs the Edson Student Entrepreneur Initiative and the ASU SkySong Innovation Center was recently awarded one of the best organizations of its kind in the country. University of Arizona (UA) is helping create the technology of tomorrow in its Bridges/UA Bio Park and UA Tech Park that includes a Solar Zone. UA also participates in Startup Tucson – an organization dedicated to growing a vibrant ecosystem of entrepreneurship through educational events. Northern Arizona University fosters business growth through it Center for Entrepreneurship and Technology and benefits from its affiliation with NASA. All of that bodes well for Arizona’s innovation economy.

Other efforts are focused solely on exciting people about technology and science. We just celebrated the third annual statewide Arizona SciTech Festival with more than 300,000 people attending more than 500 events this year.

And although we have a long way to go, there’s a growing pool of capital. We’re home to two of the largest and top rated angel investor networks in the U.S. — ATIF and Desert Angels. The Arizona Commerce Authority has created the Arizona Innovation Challenge that awards the most money in the country to the most promising entrepreneurs meeting technology challenges. Grayhawk Capital just raised $70 million in funds for early and growth stage technology investments. And Tallwave Capital recently announced it has deployed $500,000 in capital in early-stage ventures.

The 2010 census reports Arizona’s population at 6.4 million, with a median age of 35.9 years. The predicted growth rates for Arizona by the federal and state government expect that between 1.5 million and 3 million people will move to Arizona by the year 2020. That type of robust regional population growth combined with an improved U.S. economy translates into high potential for investors.

It’s true we enjoy more than 300 days of sunshine each year.

But we offer a lot more than golf and spas. Venture capital sitting on the sidelines should put money into promising Arizona high tech firms and start-up ventures.

Now is the time to invest in Arizona.

Now isthe timeto investin Arizona

Steven G. Zylstra Technology

Steven G. Zylstra is president and CEO of the Arizona Technology Council.

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HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY

M atchmaking anufacturing

Arizona Commerce Authority strives to help innovation meet business acumen By ERIC JAY TOLL

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“W

hat is the overview of manufacturing in the U.S. and Arizona?’ That’s the question no one is asking. It’s a landscape of profound changes — especially for manufacturers who up their game and move up the value chain.”

Brian Sherman is filled with enthusiasm. As the senior vice president of business development for the Arizona Commerce Authority, he is the manufacturing “yenta” for the state’s official economic development agency; a “yenta” being a marriage broker hooking up couples perfect for each other.

“My No. 1 goal for 2014 is bringing together wellestablished manufacturers with business experience and an eye on growth with the young entrepreneurs who are building businesses from ideas and need prototypes and business acumen,” says Sherman. As the designated matchmaker, Sherman and his team have a new role at Arizona Commerce.

“Arizona is a land of innovation, and that’s what gives us an edge for manufacturers,” he says. “The day of business sitting back and waiting for orders is over. ‘Cranking it out’ has moved offshore, and businesses competing in that marketplace are going to get hit hard on price points.”

“Where a small- or medium-size manufacturer is going to succeed is with technical solutions and not just products.

Innovation is what makes this state great,” Sherman’s on a roll.

“We’ve got well-established manufacturing businesses aligned with our key sectors—but those same businesses could move into parallel sectors and grow even more. That’s what our team at Arizona Commerce is doing. We’re positioning these businesses for the next trend.”

Parallel sectors: Family classics meet Generation Z “We have classic family manufacturers across the state.

They’ve been around for decades; some for multiple generations.

They make stuff.” Sherman calls them ‘salt-of-the-earth’ companies. “They’re starting to feel some of the pressure of the sequestration and recognizing that depending on defense or government is not the road to the future.”

“Then we’ve got the young entrepreneurs. They want to write code. They want to make games and apps,” he enumerates the issues. “They think manufacturing is stodgy, dead end and offshore. But they don’t really see the full picture.

They’ll tell me, ‘yes, I have this vendor over in Taiwan and he’ll make this.’ Trying to prototype a product from 10 thousand miles away doesn’t let you see how it’s going to be built.”

“Back at the small manufacturer, let’s say it’s an aerospace or defense business. That’s high-precision work. The skills going into what it’s making now can be adapted into other high-precision manufacturing—like biomedical devices.”

Sherman’s enthusiasm is contagious. “So we take the tech startup and the established business, bring them together and show the young entrepreneur that manufacturing can be pretty sexy. We show the manufacturer that the tech startup has the innovations and ideas that can be adapted for future growth.”

RevAZ: Arizona Commerce Authority consulting services Sherman’s teams at Commerce work with manufacturing businesses as consultants — and in some cases bring in outside consultants — to help businesses transition into

the next economy. The service is designed to revitalize Arizona manufacturing. “Rev AZ is just a phone call away,” explains Sherman. “We show how innovation, diversification, and shared knowledge helps companies position for trends and profitably grow. We bring in the experts to help businesses manufacture — both new and old.”

Back to that prototype, he says, “If the tech start-up can have the prototype built here, it gives the view of how the production floor needs to function in order to turn out the product. It brings the new generation of innovation and technology into the experienced hands of our existing manufacturing businesses. It also opens new sectors for old business.”

Top 5 in aerospace and defense Here are Arizona’s five biggest aerospace and defense companies, based on 2013 employment: Raytheon Company ➤ 11,500 employees, missile manufacturing Honeywell International Inc. ➤ ➤ 10,000 employees, aerospace manufacturing Boeing Company ➤ 5,000 employees, aircraft manufacturing General Dynamics ➤ ➤ 4,816 employees, defense, communications Orbital Sciences Corp. ➤➤ 1,668 employees, aerospace manufacturing

Top 5 in manufacturing Here are Arizona’s five biggest non-aerospace and defense manufacturing companies, based on 2013 employment: Intel Corp. ➤ ➤ ➤ 11,000 employees, semiconductor manufacturing Freeport-McMoran Copper & Gold Inc. ➤ ➤ 8,200 employees, mining Freescale Semiconductor ➤ ➤ ➤ 3,000 employees, microchip manufacturing Asarco Inc. ➤ ➤ ➤ 2,356 employees, copper mining W.L. Gore & Associates Inc. ➤ 2,000 employees, manufacturing

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TRENDSETTERS

HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY EyeTech Digital Systems The next decade is expected to be about the technology we never see but improves the user experience. Natural user interface (NUI) technologies — touch, voice and gesture — have been revolutionizing human-machine interaction.

Now, imagine being able to simply look at your computer screen and open a file. A broad new range of products will now be able to incorporate eye control thanks to the new “AEye” technology from Mesa-based EyeTech. The AEye technology consists of a compact camera board which contains its own internal processor using the Xilinx Zynq System on Chip (SoC), combined with the world’s most robust eye tracking algorithm. The AEye hardware is suitable for computer displays, TVs, laptops, and other devices appropriate for this form factor. For more challenging devices, like smart phones, the algorithm can be licensed and run on the internal hardware.

Fennemore Craig Fennemore Craig is changing the way lawyers interact with clients by lending them Google Glass.

With the use of Google Glass, first-hand, live-action experiences are shared in real time between clients and attorneys, creating new mechanisms to convey evidence to juries, judges and mediators. The pilot program, called “Glass Action,” was launched in January when personal injury attorneys James Goodnow and Marc Lamber equipped several business and personal injury clients with the new Google Glass technology, not currently available to the public. “It’s the experience of the client unfiltered,” says Goodnow. “Jurors will now be able to see the nuances of a victim’s daily challenges firsthand.” Because of their use of technology, the ABA Journal named Goodnow and Lamber to its list of “America’s Techiest Lawyers.”

108 AB | May-June 2014

Impact players ➤ Inilex, which manufactures and sells a vehicle recovery system that uses GPS and cellular technologies to locate stolen vehicles, made Forbes’ list of America’s Most Promising Companies, which recognizes the fast-growing U.S. businesses with brilliant prospects. ➤ Tempe-based Dixon Golf is

the creator of the world’s first biodegradable golf ball. “We had this idea of saving the world one golf ball at a time,” says William Carey, CEO of Dixon Golf.

➤ Tucson-headquartered CyraCom

International, the largest provider of over-the-phone interpretation operating solely in the U.S., ranked as the 32nd-fastest-growing job creator nationwide on Inc. Magazine’s Hire Power Awards.

➤ ON Semiconductor introduced

a new family of semiconductor “battery fuel gauge” integrated circuits that provide accurate measurements of the remaining power level of batteries used in smart phones, tablets and digital cameras.

➤ Invest Southwest, which

offers year-round opportunities for investors to connect with startups, teams up with the Arizona Commerce Authority for Venture Madness, which pits 64 start-ups against one another in a bracketstyle, head-to-head competition to crown the champion.

➤ Ziver Birg is founder and CEO of

ZIVELO, a Scottsdale-based public computing technology company that designs, manufactures and distributes self-service kiosk and digital signage systems globally. For three consecutive years, Birg has been honored at the White House as one of the Top 100 Entrepreneurs Under the Age of 30. In 2013, ZIVELO was recognized by Forbes as one of six fast growing tech companies in the U.S.

now

The future is

Arizona educators help tomorrow’s innovators make an impact today

A

PROVIDED

STUDENT INNOVATOR: David Strait, a senior at the University

of Advancing Technology, created a 3-D printable prosthetic arm with a headset that controls the arm. “I never expected to do this much in two years,” Strait said.

By JESSE MILLARD

rizona’s universities are known as places of innovation, but Tempe-based University of Advancing Technology (UAT) has taken that role to a new level by driving every student at the university to be an innovator of technology.

Since 2007, UAT has required all students to innovate and add to the ever-expanding world of technology in order to graduate.

“They have to innovate,” said UAT President Jason Pistillo. “We fanned the flame of innovation with this new requirement.”

David Strait, a former Marine who is a senior robotics and embedded systems major at UAT, has seen many fellow veterans and friends who are amputees as a result of their service. Strait turned UAT’s challenge to innovate into an opportunity to help those amputees.

“I go to hospitals and constantly see veterans that are swiveling around on peg legs,” Strait said. “We have better technology than that.”

Strait used that technology to create an open source 3-D printable prosthetic arm with a headset that allows the wearer to control the arm with his or her mind.

Strait said advanced prosthetics are too expensive for veterans to afford. 3-D printable prosthetics are much cheaper to produce, so Strait’s innovation gives veterans and amputees more advanced prosthetic technology that is much more affordable.

The neural headset that goes with the prosthetic arm works by reading the user’s EEG brainwaves through the skull without any surgery or connections to the brain. In order to make the arm move, the user must think of a simple and readable thing, which allows the headset to translate the brainwave and then tell the arm to perform a specific action.

To help students like Strait see their technological ideas come to fruition, Pistillo said UAT promotes an open environment where all students have access to every lab, regardless of major. While creating his prosthetic arm project, Strait said he was able to create everything he needed inside of UAT’s Maker Studio. He also said there was never a need to send schematics to a factory to build his project. Strait was able to make it at UAT himself.

To continue as a breeding ground for innovators, Pistillo said UAT looks only for students who are passionate and smart about technology and for students that are actually creating technology.

“Someone making solar robots will get in over a student with a 4.0 GPA who hasn’t even made a webpage yet,” Pistillo said. “When all peers have that same innovative personality, you have an entire environment of innovation.”

As UAT looks toward the future, Pistillo said that it is enrolling students in a new Digital Maker and Fabrication program, which trains students to create technologies that will revolutionize the world through 3-D printers, MakerBots and robotics.

“This program is as ahead of the curve in today’s world as a university would have been if it had been teaching classes on internet programing in 1991,” Pistillo said.

109 AB | May-June 2014

HEALTHCARE /// ENERGY /// AEROSPACE /// TECHNOLOGY

Bringing ideas

to market

110 AB | May-June 2014

Arizona Commerce Authority helps create programs designed to grow successful companies

“N

By ERIC JAY TOLL

ot long ago, there were just five or six incubators and accelerators in Arizona.” Arizona Commerce Authority CEO Sandra Watson looks up to the ceiling in her office, she’s running the numbers in her head. “I think we now have close to 50 active in the state — plus collaborative workspaces, too.”

For the entrepreneur thinking about starting a new company, Arizona has a better business climate than just its golf courses and sunshine. The metric is not precise, but there may be no state in this country that does as much for new business’ growth than Arizona. Local governments, regional economic development organizations, the three state universities, community colleges, and the Arizona Commerce Authority all offer programs designed to grow successful companies.

While AZ Commerce business attraction wins have garnered much news and talk, the quasi-public agency has an equal emphasis for existing business expansion and new business startup. The agency offers a full menu of incentives, programs and innovation assistance for Arizona businesses.

“Those big moves by companies like Apple draw attention to Arizona from business leaders around the world,” says Watson.

“That kind of attention is good for our companies to market products globally.”

The state and its regional economic development agencies are focused on building export businesses and increasing the number of high paying jobs in the state. An export business is a business that ships the majority of its services and products outside local borders. Its result is money coming back into to be recirculated and grow the Arizona domestic product.

Brian Sherman, Arizona Commerce Authority’s senior vice president of business development, heads the team that deploys start-up programs. This isn’t just a toolbox for new business, Brian has the key to a garage filled with programs designed to scale up new companies.

“When we help a business grow roots in Arizona, we’re building the future of our corporate community,” says Watson.

“Our programs are designed to help a business from its early start-up stage into the marketplace to compete.”

“We have a number of different programs,” explains Sherman.

“We’re seeking companies ready to move up. Although we can help a very early stage start-up, we are looking for a business that has formed a company. They have to have two employees, a product concept and a business plan.” Under the “Start Up” tab at AZCommerce.com, there is a menu of incentives and programs for new business—see the sidebar for the list.

Arizona offers an angel investment tax credit. This incentive program for home-grown start-ups and entrepreneurs essentially reduces investors’ risk by 30 to 35 percent. This offset encourages angel investors to open checkbooks.

Getting an investor to sign that check takes a lot of effort and AZ Commerce’s business development unit has a program for that. “Newly-formed companies and small businesses may not be able to afford expensive consulting advice,” says Sherman. “What we’re doing is helping them become venture-ready by offering technical and business assistance and advice they can’t afford.”

It’s a practical MBA, Sherman says. In some ways, it’s a preliminary reality check. With the program, Commerce engages the business community and establishes mentor

Getting started The Arizona Commerce Authority offers assistance for start-ups. To learn more about the help and the programs available, visit azcommerce.com/start-up

Incentives

* Angel investment * Research and development * Job training * Quality jobs * SBIR/STTR * Additional depreciation * Sales tax exemption for machinery and equipment * Work opportunity

Programs

* Arizona Innovation Challenge * Arizona Innovation Accelerator Fund * Small business services * Rev AZ * Arizona Fast Grant * PIII Playbook * Energy reduction grant * Small Business Checklist for start-ups

relationships in front of making presentations to angel investors or venture capitalists. The same process can be used to help businesses compete in the Arizona Innovation Challenge, a state-funded grant program to help businesses get a product into the marketplace. This is for businesses doing research and development but more in the ‘D’ stage than the ‘R’ stage.

“There are steps to make this work,” explains Sherman.

“Businesses need to ‘certify’ in order to qualify for some of the programs. We offer a research and development tax credit that is similar to federal programs and small business grants that connect with federal funds. We have lending assistance programs to help close the loan gap and structure debt for a company.”

The tools stacked in Sherman’s garage are different for each business stage. The agency’s technical assistance has one primary goal in mind—move the business into the marketplace. Arizona wants its new companies to grow and hire people.

A business person with an idea for a new company should call the Commerce Authority. Types of businesses for which there are many open doors are those associated with technology, aerospace, health care, and bio and life sciences. That’s a wide playing field, and Watson says there are no closed doors for business who want to talk to the Arizona Commerce Authority about growth and expansion.

111 AB | May-June 2014

PATENT YOUR FUTURE

Earn tech respect with a Digital Maker and Fabrication Bachelor of Science degree Digital fabrication is about to revolutionize how we invent and create. Learn to lead this revolution while developing your own inventions in an unprecedented university-wide, open lab environment. As part of their curriculum, graduates of this program will file for their own U.S. patent. This unprecedented degree is the first of its kind being offered from the elite private university that first focused at the dawn of the computer revolution on advancing computer technology.

Be the first to join a long line of trail blazing graduates that will lead the next transformation of technology and industry.

Only 45 candidates will be admitted for the class of 2014. Will you be in?

TECH RESPECT 112 AB | May-June 2014

Learn more today at www.uat.edu/DMF