AzBusiness magazine May/June 2015 by AZ Big Media

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MAY // JUNE 2015

Legislation and innovation help Arizona become a

tech hub It’s coming

Business owners don’t realize the risk of data breaches, experts warn

$4.95

Anthony Wanger is president and founder at IO.

Corporate Angels 29

Visit Phoenix 49

HEAT 65

Small firm...

...big results. {

Doug Christian, Steve Dichter and Gena Sluga are honored to be listed among Arizona Business Magazine’s 2015 Top 100 Lawyers

}

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Table Of Contents 6 12 14 16 18 20 22 24 26 29 40

p Front U CEO Series Healthcare Real Estate Banking Marketing Real Estate Law Dining Corporate Angels San Diego Travel Guide 46 FEI 49 Visit Phoenix 65 HEAT

Healthy outcomes

We’ve all ridden the rocky road of the economy over the past several years. Hopefully, the road ahead will be a little more smooth than it’s been in the past. But for Arizonans, one sector of the economy has remained healthy. Appropriately, that’s healthcare. According to a recent study by ZipRecruiter, Phoenix is No. 1 city for healthcare jobs. Thankfully, we can expect that sector to remain a strength, thanks to the forward-thinking innovators who orchestrated Arizona’s Bioscience Roadmap in 2002. The 10-year plan was designed to boost bioscience in Arizona and it worked. Since the Bioscience Roadmap was launched in 2002: • Bioscience jobs in the private sector increased more than 45 percent in Arizona. • The number of bioscience firms in Arizona increased by more than 31 percent. • Bioscience wages increased by 44 percent in Arizona. The best thing is Martin L. Shultz, chair of the Arizona Bioscience Roadmap Steering Committee, helped update the Bioscience Roadmap to reflect new goals, strategies and potential action steps to lead the state to its vision of becoming a global competitor and national leader in select areas of the biosciences. The updated Roadmap will carry us through the next 10 years. In this issue of Az Business magazine, AZBio President and CEO Joan Koerber-Walker writes about what lies ahead for the bioscience sector. The business community knows that the work being done in bioscience in Arizona is improving the health for everyone. That’s not just good for Arizona. That’s changing the world.

On the cover: Photo by Shavon Rose, AZ Big Media.

Az Business on the Go: azBIGmedia.com 2

AB | May-June 2015

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

Banking locally is banking better.

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AB | May-June 2015

Honoring healthcare’s best

Each year, Az Business presents the Healthcare Leadership Awards, which honor the women, men and institutions whose passion and innovation are saving lives, extending lives, and improving the quality of our lives. The 2015 winners were honored at an award dinner April 9. Winners of the 2015 Healthcare Leadership Awards: • Behavioral health company of the year: Southwest Behavioral Health Services • Healthcare advocate or educator of the year: Catherine Ivy of the Ben & Catherine Ivy Foundation • Bioscience company of the year: VisionGate • Insurance provider of the year: Blue Cross Blue Shield of Arizona • Legal advocate of the year: Martin Shultz of Brownstein Hyatt Farber Schreck • Medical research company of the year: Barrow Neurological Institute • Researcher of the year: Dr. Daniel D. Von Hoff of TGen and HonorHealth • Medical company of the year: SynCardia • Physician of the year: Dr. Robert J. Arceci of Phoenix Children’s Hospital • Healthcare executive of the year: Tim Bricker, president and CEO of Chandler Regional and Mercy Gilbert medical centers • Medical center or hospital of the year: Cancer Treatment Centers of America at Western Regional Medical Center • Lifetime Achievement Award: Peter Fine, president and CEO of Banner Health

GCU student innovators

Recent Grand Canyon University graduates Brad Scruggs, Brian Scruggs and Ahmad Saleem won GCU’s fourth annual Canyon Challenge for their software application Joblyt, an application that connects people who need to get jobs done and those who are looking for work.

Nowaczyk earns recognition

The Association for Corporate Growth named Christine Nowaczyk, senior vice president for for Bank of Arizona, as a recipient of the 2015 Meritorious Service Award. She is one of just seven recipients this year out of the more than 14,000 ACG members globally.

Big night at Addy Awards

It was one for the record books as Cramer-Krasselt swept four of the top five honors at the Phoenix Advertising Awards, the industry’s version of the Oscars.

AB | May-June 2015

President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Editor: Amanda Ventura Staff Writer: Meryl Fishler Interns: Laura Burnett | Kaci Demarest | Maria Lopez Katie Malles | Jade Yeban Contributing writers: Cheryl Hurd Diego Mendoza-Meyers | Alisa Stone ART Art director: Mike Mertes Graphic designer: Shavon Thompson DIGITAL MEDIA Director of sales: Mark Blum Web developer: Eric Shepperd Digital coordinators: Ashley Incardone | Robin Sendele MARKETING/EVENTS Marketing & events coordinator: Melanie Ploussard Marketing coordinator: Lorin Parkhurst Marketing Intern: Lea Martin OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Cindy Johnson Az BUSINESS MAGAZINE Senior account manager: David Harken Account managers: Megan Gould | Shannon Spigelman AZRE | Arizona Commercial Real Estate Directors of sales: Jeff Craig AZ BUSINESS LEADERS Director of sales: Mark Blum RANKING ARIZONA Director of sales: Sheri King EXPERIENCE ARIZONA | Play Ball Account managers: Ryan Moore AZ BIG MEDIA HOME SHOWS SCOTTSDALE HOME & TRAVEL SHOW 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 2015 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.

AB | May-June 2015

UP FRONT What a trip As we prepare for summer vacations, Arizona business leaders share their bucket list destinations By MICHAEL GOSSIE

Benito Almanza

Charles Berry

Mark Bonsall

Glynis Bryan

Bryon Carney

Pamela Conboy

Mark Feldman

Peter Fine

Beth HarmonVaughan

Lynn Herndon

Jeffrey M. Trent

amela Conboy, lead regional president of Wells Fargo, makes a new bucket list each year. “Traveling to new and different places to experience different cultures tends to top the list,” she said. “My last trip was to Spain and it was wonderful.” Conboy isn’t alone. With the start of vacation season on the horizon, it’s not surprising that many of the state’s greatest business minds, who were all featured in the 2015 edition of Az Business Leaders, have dream destinations on their bucket lists. Here are a few:

Peter Fine, president and CEO, Banner Health: “I’d like to go on a safari in Botswana.”

Thomas J. Sadvary, president and CEO, HonorHealth: “A

family vacation to South Africa is No. 1 on my bucket list right now. It would be an opportunity for all of us to be together and enjoy exploring the world as a family, undeterred by work or other life priorities.”

Benito Almanza , Arizona market president, Bank of America:

“Hiking the 225-mile John Muir Trail from Yosemite to Mt. Whitney in California. I took up hiking a number of years ago to stay fit, clear my mind and offer a challenge different than I face every day in the office.”

Mark Bonsall, general manager and CEO, SRP: “I want to go to New Zealand. The country is beautiful, the culture is very warm and I liked what I saw in ‘Lord of the Rings.’” Glynis Bryan, CFO, Insight Enterprises: “Hiking Kilimanjaro – for the physical challenge, the mental discipline required and for the awe-inspiring views of sunrise at the top.” Mark Feldman, CEO and managing partner, Miller Russell Associates: “I would like to visit Israel with my wife to learn more about religious culture, its birthplace and its role in our lives.”

Beth Harmon-Vaughan, managing principal, Gensler: “Visit the top 10 art museums in the world by train. They’re all located in amazing cities and it’s a continuation of my lifelong passion for fine art.” Bryon Carney, executive managing principal, DTZ: “My family

heritage is nearly 100 percent Irish and visiting the Emerald Isle is a dream. I’d play a round of golf at Carne Golf Links in Belmullet, hoist a pint of Guinness at St. James Gate in Dublin and even kiss the Blarney Stone.”

Dr. Jeffry M. Trent, president and research director, Translational Genomics Research Institute (TGen): “Spelunking

in the Yorkshire Dales. Who wouldn’t want to go spelunking in the Yorkshire Dales?”

AB | May-June 2015

Charles Berry, senior counsel, Clark Hill: “Visit the Galápagos Islands. I have done most things that I really want to do, but I’d love to see what caused Darwin to fashion his theory of evolution.” Lynne Herndon, Phoenix city president, BBVA Compass: “I look

forward to the day when I can vacation at the beach with family for one month with no business responsibilities. Although not here yet, the day will come sooner rather than later.”

To read more bucket list items and fun facts about best and brightest business leaders in Arizona, get a copy of the 2015 edition of Az Business Leaders at azbigmedia.com or by calling 602-277-6045.

Make-A-Wish Arizona, the founding chapter of the international organization, has moved into our new home!

We are so thankful to The Bob & Renee Parsons Foundation for this generous gift, as well as all of the other companies who helped to make our new home a reality.

Thunderbirds Charities Butler Design Group Rick & Judy Cox Mountainside Fitness QK Holdings/Denny’s Restaurants Dr. & Mrs. Michael McQueen Frank A. Bowman Brandon & Jamie Luna Elizabeth and Kaleim Manji Jay Petkunas Quarles & Brady LLP Ryan Companies US, Inc. SRP Beth Scarano

With this new home, Make-A-Wish Arizona will work toward our vision of granting the wish of every eligible child in Arizona. 7802 East Thomas Road · Scottsdale, AZ 85251 602.395.WISH (9474) · www.Arizona.Wish.org This ad was generously donated by Stevens Leinweber Construction

AB | May-June 2015

UP FRONT How do cutbacks impact HR?

While trying to be lean, businesses still need go-to person for personnel issues By MARIA LOPEZ

ccording the U.S. Bureau of Labor statistics, human resource manager positions are expected to rise 13 percent through 2022, but what about the move toward cloud technology and outsourcing? Nancy Silver, president of Silver Consulting Services, says the three biggest reasons for this trend is that it saves money, shifts the responsibility of confronting complaints and avoids having to deal with legal issues like healthcare. Silver, who spent 17 years as a human resources director in the hospitality industry, says that nothing compares to the “human touch” in employee relations. Businesses are so wrapped up in doing more with less, Silver says it’s vital to keep employees intellectually and emotionally connected to a product. “Outsourcing, in my understanding and experience, is targeted more at small to medium sized businesses,” Silver says. “Companies that want to be associated

with a quality workplace are going to keep their HR function in place.” At one time, there would be about one HR employee per 80 employees. Now, it is about one per 160, Silver says. Companies are transferring the HR function to a different internal leader or to an automated number, she says. “Outsourcing the administrative work financially makes sense for a business,” Silver says. But, Silver warns, companies must have a go-to person who handles personnel matters. As for the future of human resources, Silver says even if duties are deferred to another leadership position not under the title “human resources,” the function still needs to be executed. “Human Resources has ridden this wave from being very paperwork driven, to being touchy-feely people driven, and now technology driven,” Silver says. Silver says that companies like hers can help businesses that are trying to cut back with recruiting, training and building a passion for service.

Coffee may actually improve workplace morale As many of us can agree, coffee plays a very important role in our lives and according to new governmental reports, might actually be good for us. The government panel reported there is strong evidence that three to five cups a day can be part of a healthy diet and can reduce the risk of Type 2 diabetes and heart disease. Additionally, a recent “Coffee Break Survey” released by Keurig Green Mountain, found coffee also helps to improve workplace environment and morale. The survey found that for nearly 89 percent of workers, a good cup of coffee can make their entire workday better. And, without their cup of Joe, coffee drinkers can feel a range of negative emotions — exhausted (36 percent), irritable (35 percent), unproductive (30 percent), disorganized (20 percent) or forgetful (14 percent).

AB | May-June 2015

Nancy Silver

Healthcare will dominate job growth through 2022 According to the U.S. Bureau of Labor Statistics, healthcare support jobs will see the biggest growth from 2012-2022, rising 28.1 percent. The next largest group includes healthcare practitioners and technical occupations with 21.5 percent growth projected. “Some of these are considered ‘replacement jobs’ which involve replacing older employees who are leaving the workforce,” says Ryan Naylor, founder of LocalWork.com. “The other positions are newly created to handle increased demand from an aging population and more people who are now insured under the Affordable Care Act.” Some of the hot healthcare support jobs include home health aides, psychiatric aides, nursing assistants, orderlies, pharmacy aides, phlebotomists and medical equipment preparers. At the top of the list of practitioners and technical occupations are doctors, nurses and dentists.

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UP FRONT

Cool wardrobe Fashion experts offer advice on ways to stay stylish as Arizona’s temperatures heat up By KATIE MALLES

ummer is quickly approaching, and triple-digit temperatures will soon be standard operating procedure in the Valley. It can be tough to dress professionally for the workplace and stay cool during Arizona’s hot summer months. Light colors, breathable fabrics and glistening

Tips for men

• If wearing a suit, the fabric on the outside should be a natural fabric and then lined with a synthetic fabric. Natural fibers such as cotton, merino and other wools are better at regulating moisture and heat than synthetic fibers. Although those synthetic fibers may seem to feel better on the skin, they don’t breathe as well and hold on to moisture and bacteria. • When wearing a suit in the office, wear a linen shirt made of natural fiber, breathable and comfortable. • Try wearing items made of “seersucker,” a cotton fabric that is woven with variations in tension that produce inconsistent texture. The ripples caused by the manufacturing technique allow for less of the fabric to come in contact with the skin. • A black suit is death in the summer because the color absorbs light and heats up very quickly in the sun. Most men will find that gray or even a lighter blue to be agreeable options. White slacks or dress pants are also a good idea, so long as they have a looser fit. • Instead of wearing a whole suit, opt for a blazer instead.

AB | May-June

2015

accessories begin to find their way into the office; while heavy, restrictive suits, blazers and pencil skirts make their way out. Nishantha de Gruiter, fashion stylist and vice president of Suitsupply, and Scottsdale Quarter’s Alison Goodman offer some style tips to keep our professionalism up, but our temperature down in the hot summer months.

Tips for women

• Choose lightweight dresses that need no accessorizing – when you can just throw a dress on with embellished sandals, it’s easy to stay cool and look fabulous. • Layers are key, so try a structured blazer over a flowy sundress. • Incorporate layers with a colored cardigan over a simple pair of slim pants and a sleeveless top. The top layer is easy to take off if you’re out in the sun, but will keep the look professional while indoors. • Use accessories to your advantage. A simple white T-shirt tucked into a black or grey skirt looks office-appropriate with a statement necklace. • Invest in a pair of embellished peep-toe flats. They are the most convenient shoes to grab when temperatures are on the rise.

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Offers valid at IKEA Tempe only. Some products require assembly. See store for country of origin information. We apologize for, but will not be bound by or responsible for, any errors in our advertisements. Valid in the US only. © Inter IKEA Systems B.V. 2015

CEOs

Game changer Machado brings conventional business approach to unconventional tech sector

ina Machado’s business background is eclectic, to say the least. She specialized in land development in Hawaii. She was the CEO of a Phoenix-based bottling company. She is the current president of Scottsdale-based Rarity, which provides working capital to early stage start-ups. Machado’s latest venture is CodeRed-I, a mobile app development company that she hopes will help Arizona’s technology sector continue to grow. “It is a major objective of mine to connect with other app development studios,” Machado says. “Together as a whole, we can strengthen the technology industry in Arizona and create the next major hub for app and game development here in our state.” Az Business sat down and talked tech with Machado.

Az Business: Why did you get into the app development business? Tina Machado: We had been investing in technology quite a

while and one of the companies we were investing in came to us and said, “The future is really in mobile applications. It’s going to be everything.” So we invested in that company, but sometimes when you make investments, the business owners aren’t business minded; they are more creative people. As I researched it, I saw there were a lot of start-ups in Arizona developing apps, but there weren’t any conventional businesses that offered app development. I mean an old school, shake your hand and offer substance style of business. Business is business and tech is tech and this is a big investment for companies to develop an app. So we developed CodeRed-I to bring a more traditional business model to app development and give people more confidence when they come in.

AB: What has been your biggest challenge? TM: Part of what I’m trying to do is educate people about

the difference between a Web app and a native app and what you should expect when you want an app. It’s intimidating for many people to understand the difference and what it should cost. We know there is a niche in Arizona, even though

AB | May-June 2015

PHOTO BY SHAVON ROSE, AZ BIG MEDIA

TINA MACHADO: “What websites are to us today in terms of credibility of business, apps will be in the very near future,” says the president of Scottsdale-based CodeRed-I.

there are many start-ups; but the start-ups don’t have the conventional business experience that we offer. If a company comes in and wants to build an app that is going to aid them in a mobile sense, we understand their business, we look at their competitors and we make a difference. We develop apps that make a bottom-line difference.

AB: How do you explain the technology to business owners who may not be tech-savvy? TM: I’m 56 years old, so I’ve seen the transition. The majority of the population utilizes their phones. We don’t even realize how many times we go on our phones. What we usually do is we give them a concept. Then, we show them what it’s going to look like, what it’s going to do and how it’s going to impact their business. Once they see that and gain that confidence, they’re in. They see how it transitions them to a sleeker and more efficient business model.

AB: Who is your target market? TM: Business to business. We target everyone from retail stores to contractors. Contractors have a lot of subcontractors and a lot of people to watch. They can actually see when the subs show up on the site. The client can have all the documents and have change orders on the app.

AB: Is is tough being a woman in a the male-dominated technology sector? TM: I know there are a lot of women in technology who are trying to stand out, I just think we’re a bit more quiet when we do things. We just have a different demeanor. As a woman in technology, I just look at it as another business opportunity. I know what I know and I know what I don’t know. I let my team know that if I get too involved and become too knowledgable about what they’re doing, then they’re not doing their jobs.

AB | May-June 2015

HEAlthcare

The great ‘vape’ debate Unregulated e-cigarette industry raises concerns for healthcare experts By ALISA STONE

AB | May-June 2015

t’s common now to spot someone in public holding an electronic cigarette and “vaping,” or inhaling and exhaling a cloud of flavored vapor. Oxford Dictionaries even picked up on the trend, naming “vape” the 2014 word of the year, signifying the beginning phase of replacing an age-old habit of smoking tobacco. But is vaping a trend that is better or worse than smoking tobacco when it comes to the user’s health? At Arizona’s first e-cigarette and vapor expo in October, people — some young, some older — walked through the maze of booths looking and testing out handheld devices that are commonly used to replace smoking a tobacco cigarette. “What now I believe people are being turned on to, why the gums and patches don’t work, is because there’s a whole level that is missing in people’s lives and that’s the social aspect (of smoking),” said Michael Guasch, president of Molecule Labs, which manufacturers e-liquids. “So when you can sit around and vape with someone and enjoy good conversation in a much more healthy manner, you’re not destroying your clothes and the environment you’re in.” The two most common styles of electronic cigarettes, or e-cigs, are the traditional disposable cartridge style, which looks more like a tobacco cigarette; and the refillable tank-style“vaping device”, which can look like a pen, is reusable, rechargeable and more commonly used today, according to Guasch. “An e-cigarette is comprised of a battery, an atomizer, which has a wick with a heating element and then that produces the vapor upon the draw,” said Stephen Beckers, owner of TKO Vapor.

Inside the debate While the types of liquid flavoring and the catchy names are enticing, it’s what is inside of these e-liquids that counts for consumers. “E-cigarettes typically contain three main ingredients: nicotine, a flavoring of some kind and propylene glycol — a syrupy synthetic liquid added to food, cosmetics and certain medicines to absorb water and help them stay moist,” said Frank LoVecchio, D.O., a medical toxicologist at the Banner Good Samaritan Poison and Drug Information Referral Center. The ingredients inside of the e-liquids are not only responsible for satisfying cravings, but also for creating nationwide debate on just how safe and healthy they are for consumers. “Various studies suggest the vapors from e-cigarettes contain several cancer-causing substances, as well as incredibly tiny particles of tin, chromium, nickel and other heavy metals, which, in large enough concentrations, can damage the lungs,” LoVecchio said. “These particles likely fleck off the solder joints or metal coil in the devices when heated. Because they are so small, the tiniest bits of metal, known as nanoparticles, can travel deep into the lungs. There, they could exacerbate asthma, bronchitis — an inflammation of the tubes that carry air to and from the lungs — and emphysema — a disease in which the lungs’ many air sacs are destroyed, leaving patients short of breath. So far, there are not enough data to say with certainty whether e-cigs worsen these disorders.” Since the e-cig industry is still young, the lack of research and studies performed to determine whether e-cigs are a healthier option than using traditional tobacco cigarettes leaves the question unanswered. While tobacco isn’t used in e-liquids, nicotine is and can be addictive. “Using e-cigarettes avoids the harms of smoke, but the nicotine they contain is addictive and has many known harmful effects,” said Rodney D. Altman, M.D., of Abrazo Health. “It is possible that the aerosol could somehow enhance the delivery of nicotine into the blood or tissues which could outweigh the benefit of avoiding smoke.” “The primary established danger of nicotine is that the stimulant is highly addictive, although emerging science also links it to an impaired immune system,” LoVecchio said.

The risks for kids Altman said health concerns with nicotine are not just for vapers themselves, but for children if proper caution isn’t taken when using e-cigs. “Young children are typically poisoned from traditional cigarettes when they eat them,” Altman said. “Poisoning related to e-cigarettes involves the liquid containing nicotine used in the devices and can occur in three ways: by ingestion, inhalation or absorption through the skin or eyes. Poisonings for electronic cigarettes are increasing dramatically. About half of these occur in children under 5 and 6 years of age.” There is, however, an option for no nicotine in e-liquids, with typical levels ranging from 0-24 mg of nicotine. Selling flavored liquid with no nicotine or lowering a vaper’s nicotine levels throughout a period of time are options provided by some e-cig shops and manufacturers. “It’s right to have a wide variety of different levels,” Gusich said. “Let the customer pick whatever works best for them. We don’t want them to be at a higher dose of nicotine than what they were normally smoking in regular cigarettes. This is their

erminology confusion, inaccurate labeling and just who exactly is making the e-liquids...present areas for health concerns.

chance to be able to choose what they want and make it easier for them to adjust to this lifestyle.” However, even if there is no nicotine present in the e-liquid cartridge someone is inhaling, there is still a potential for health risks with propylene glycol. “Propylene glycol, for example, is usually eaten (in cupcakes, soft drinks and salad dressings) or slathered onto the body (in soaps, shampoos and antiperspirants) — not breathed into the lungs,” LoVecchio said, “so this needs to be studied. For example, flour can damage the lungs when inhaled.” Terminology confusion, inaccurate labeling and just who exactly is making the e-liquids also present areas for health concerns. Since the e-cigs industry is still relatively new and lacks standardizations and regulations by the FDA, potential risks arise with inexperienced manufacturers — or even consumers — handle the nicotine. “I think the risks from e-cigs come from lack of standardization and not knowing what some companies are putting in their liquids,” Beckers said.

Booming business E-cigs have become so popular in the short eight years they’ve been available, the industry surpassed $1 billion in sales in the United States in 2013. “There’s so many different companies trying to get into it, it’s almost like a gold rush,” said Geoff Habicht , chief operating officer of Smoking Vapor. “You have these vape shops opening up on every corner and there’s several thousand in Arizona. The market this year will be about $4 billion and is expected to be $7 billion or $8 billion next year.” The e-cig industry may seem like a great place for entrepreneurs to get rich fast, but it won’t be for long. With the impending FDA regulations on the selling and manufacturing of e-liquids, a lot of the small shops could disappear because of the inability to meet strict guidelines. “Like any business, there are a lot of businesses that fail,” Habicht said. “We’re going to reach a point of saturation where you can’t have a vape shop on every single corner.” When it’s all said and done, there will be more than two sides to this story. The e-cig industry advertises itself as healthier alternatives to smoking tobacco cigarettes. Some lawmakers and medical professionals are pointing out that there is no scientific evidence to back up these claims. Experts say consumers, especially Millennials, are more focused on the social aspect. Regardless of who is right or wrong, consumers need to be educated on what they’re putting into their bodies. “This is a product that should not be advertised at all to kids,” Guasch said. “They should never be a product that makes you look cool.” AB | May-June 2015

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AB | May-June 2015

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AB | May-June 2015

Hide and seek

What kind of impact will Obama’s fiduciary plan have on advisors and consumers? By MICHAEL GOSSIE

resident Barack Obama recently announced a “new” ruling requiring financial advisors to put their clients’ interests above their own. Sounds like a good thing, right? Not so fast. “We have ongoing concerns that the Department of Labor and the White House have completely ignored the existence of the robust regulatory regime under the SEC and (Financial Industry Regulatory Authority),” said Kenneth Bentsen, president and CEO of the Securities Industry and Financial Markets Association. “This re-proposal could make it harder to save for retirement by cutting access to affordable advice and limiting options for savers.” Obama’s “new” initiative is actually not so new. It’s a rewrite of a 2010 rewrite of the 40-year-old fiduciary rule that was eventually withdrawn in 2011 amidst industry furor. Despite the retread, something needed to be done to address the “backdoor payments” and “hidden fees” that cost Americans up to $17 billion a year in lost retirement savings, according to The Effects of Conflicted Investment Advice on Retirement Savings. The new Department of Labor rules would require brokers to be held to a fiduciary standard, meaning that they must put their clients’ interests first. For example, given the choice between two similar funds, the broker would have to recommend the one with the lowest fees and commissions. “Many consumers are not aware that the advisors they have hired to manage their investments are not required to act as a fiduciary,” said Mark Feldman, CEO and managing partner of Miller Russell Associates. “In other words, the advisor may not be required by law to recommend products or solutions that are in the best interest of the consumer. Many of these professionals receive commissions or fees for recommending certain products over others. The standard differs between different types of advisors (registered investment advisors vs. non-registered advisors or brokers). A suitability standard is not the same as a fiduciary standard.”

AB | May-June 2015

Feldman said SEC or state-registered investment advisors will see little impact even if Obama’s initiative is implemented. “These advisors have always been held to the fiduciary standard,” he said. “However, advisors of retirement accounts only, not currently registered with the SEC or state as an investment advisor, will be significantly impacted. It is not yet clear how that will look from a regulatory and accountability standpoint. We will likely see significant changes with FINRA, state departments of insurance and other organizations that provide oversight of advisors who are not currently required to act in a fiduciary capacity.” Phil Kim, divisional vice president of AXA Advisors Southwest, said by raising the fiduciary standards by which advisors must be held accountable, Obama’s initiative will improve the profession and weed out the individuals who lack the knowledge and skills and do not place the consumers’ best interests first. “With the implementation of this new initiative, I hope that a more open dialogue between consumers and financial advisors will be fostered,” Kim said. “Over time, I think people will start to regard professionals in our industry with the same respect as they do with their personal physicians.” Until then, Sean McCarthy, regional chief investment officer for Wells Fargo Private Bank, said advisors should be prepared for the possibility of more stringent oversight with increased need for disclosure and heightened regulatory requirements. “Beyond that, advisors should anticipate greater demand from clients that they clearly articulate their value,” McCarthy said. “Clients will want to understand what it is they are paying for and what they should expect from the relationship with their professional.” While the potential impact on financial planners and financial advisors remains uncertain, the potential impact of the initiative is clear for consumers. “Consumers should expect to see more benefits — free advice if the rule change is implemented, as well

as potentially lower investment fees inside retirement accounts,” said Paul Rutkowski, managing partner, investment strategy for Nelson Financial Services. While the impact on consumers is positive, McCarthy said the industry must be prepared for the potential effect on profitability. He said Obama’s initiative could negatively impact income statements in two ways: • Slower revenue growth is possible if fee transparency creates fee compression • Expenses — in time and dollars — would be greater

Mark Feldman

Phil Kim

to comply with increased regulation “Depending upon the severity of these implications, some participants may need to exit the industry, leaving consumers with an unfortunate and unintended consequence of less selection,” McCarthy said. Despite the possible impact on the bottom line, most financial experts see the initiative’s silver lining. “A uniform fiduciary standard for advisors who manage retirement accounts clearly favors the consumer,” Feldman said. “This is good.”

Sean McCarthy

Jason R. Miller

Paul Rutkowski

Choosing a financial planner Here is what Valley financial experts advise consumers to think about before hiring a financial planner:

» Mark Feldman, CEO and managing partner, Miller

Russell Associates: “Consumers should understand the fee structure and be aware of hidden fees. Ask the advisor if he/she receives fees in addition to any management fee paid by the consumer. Professionals who also receive commissions or other fees for recommending certain products have an inherent conflict of interest and the White House report released in February states that conflicted advice leads to lower investment returns.”

» Phil Kim, divisional vice president, AXA Advisors Southwest: “This business is about building trustworthy relationships. Consumers can begin their due diligence by looking for a clean (Financial Industry Regulatory Authority) record, as well as the backing of a financially healthy firm. Referrals and recommendations from other trusted advisors, along with attainment of industry designations and appropriate licenses and registrations are other items to look for in a financial professional.”

» Jason R. Miller, CFP, market manager, regional

director, financial planning, BMO Private Bank: “While formal training is certainly not the only factor in choosing a financial provider, it is a very important one. Look for professionals who have demonstrated the appropriate level of formal training as well as a commitment to continuing education. Research and understand the requirements for the different designations and/or certifications these professionals may have. Financial matters are often complex and it is invaluable to have a knowledgeable partner on your side.”

» Paul Rutkowski, managing partner, investment strategy, Nelson Financial Services: “Ask your CPA, attorney, neighbor or family member who they work with and what level of satisfaction they have with that person. Don’t be afraid to ask the tough questions about costs, the amount of risk for each strategy recommended and how an advisor gets paid. Advisors should provide 100 percent full disclosure on how much they get compensated for their service.”

AB | May-June 2015

Marketing

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o brand or not to brand, that’s not the question – it’s a requirement. And it’s something that doesn’t come easy nor without much thought and strategy. All good brand positions start with research insights. These insights are learned from the client’s current or prospective customers regarding how they perceive the company. In addition to gaining external-customer and prospectivecustomer insights, it’s important to look at the competitive market: what are they doing? What are the trends in the industry? What are people in the industry navigating toward? A successful brand must possess the following six qualities: 1. Different: Consumers notice what stands out. People are naturally enticed by exceptional ideas and products. Find a way to filter out unnecessary information to give a streamlined representation of what your company embodies and expand on those ideas to successfully differentiate your product or service from competitors. 2. Dynamic: Rather than reactively setting the brand, set your industry trends using your own twist of innovation. 3. Authentic: Every successful brand has to be authentic and sincere, anything less than that can be grasped as untrustworthy. How will the use of your service impact the world? Consumers have to know that the repercussions of your service will go beyond the immediate benefits. Believe in the purpose of your company and the brand will follow. 4. Relevance: In order to establish any sort of relationship with a product or business, the brand needs to provide relevance to the consumers’ lives. Oftentimes, brands re-invent themselves to adapt to the current time and culture, but never abandon their roots. Relevance helps to provide the emotional connection that is necessary to differentiate your brand. 5. Engagement: The interaction between product and consumer is an important key to the brand’s success. Every contact with the brand counts, so the more engaging it is, the more people will connect and become loyal. 6. Consistency: This is the most important aspect of your brand. Consumers must be able to rely on the fact that whenever they interact with your brand it unswervingly delivers on the experience. Every effective brand begins to unfold within the business itself. Among establishing a brand, business owners must not only take into consideration how consumers see their brand, but how their own employees perceive it as well. Using these six qualities will directly translate into efficient business. An effective brand creates greater awareness and relevancy, influence on consumer purchase, opportunity to introduce new brand extensions and added value to the business.

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Why building your brand is more than just a logo

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Tim Trull Marketing

Tim Trull is managing director of strategy for Lavidge, a Phoenix-based advertising, marketing, interactive and public relations agency whose clients include McDonald’s, Banner Health, United Rentals, Cable ONE, Republic Services, Blue Cross Blue Shield of Arizona and Arizona Commerce Authority. 20

AB | May-June 2015

Sign of optimism

he weather isn’t the only thing that’s favorable in Arizona. “The biggest overall trend we see in residential real estate is the market trending upward from relief to optimism,” says Matt Widdows, founder of HomeSmart International. “We are continuing to see an uptake in the market across the board. Housing prices are on the rise and so is the rental market. We are seeing very early signs of multiple offers, which could possibly be an indication of the return of a seller’s market.” According to the latest monthly report from the W. P. Carey School of Business at Arizona State University, all signs point to the Phoenix area housing market having having better results in 2015, compared with 2014. Here are the highlights of that report on Maricopa and Pinal counties for January: The median single-family-home sales price went up 5.6 percent from January 2014 to January 2015 — $197,000 to $208,000. • The average price per square foot gained 5.1 percent from January 2014 to January 2015.

AB | May-June 2015

Residential real estate experts expect a stronger year in the Phoenix housing market By MICHAEL GOSSIE • Condos and townhomes continue to gain a larger share of the market. Their median price is up 11.6 percent – from $121,000 to $135,000 February figures show demand about to boom, with the number of homes under contract dramatically rising. “January is always a quiet month, but we believe this was a lull before the storm,” explains Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School. “We have already seen early signs of much stronger activity from buyers in February and March. Looking at the number of homes going under contract, there was significantly increased demand in the lower and middle price ranges.” According to the Fannie Mae February 2015 Housing Survey, consumer optimism toward the housing market and the economy has reached a new all-time survey high. Fortyseven percent of respondents said they believe the economy is headed in the right direction. Likewise, the share of respondents who believe it would be easy to get a mortgage today rose to 54 percent, another record survey high.

Photo by SHAVON ROSE, AZ BIG MEDIA

“Population growth is on the rise and home values, after a few years of steady growth, are now providing homeowners with more flexible equity positions,” according to Doug Reynolds, vice president, loan officer and division manager at Washington Federal Bank. “These improvements, along with long-term rates staying low and financing remaining readily available, should continue to be positive drivers of new construction and increased values.” Orr notes that listings for non-distressed homes under contract in the Phoenix area were up 26 percent from last year on a typical day in February. Listings from $150,000 to $600,000 were up more than 30 percent. He attributes this largely to lenders starting to relax their tight loanunderwriting guidelines and “boomerang buyers” who went through foreclosure or short sale being able to come back into the market. “I’m noticing a lot more showings at all of my listings, which is a sign of activity in the market,” says Mike D’Elena, a Realtor with HomeSmart and co-owner of Northgate Group. “Most of the buyers out looking right now are new buyers just beginning their search. I’m also working with a lot of move-up buyers — these are people who have recognized that rates are trending upwards and want to take advantage of current low rates and get a bigger home.” Experts says supply is an issue when it comes to all types of homes, including affordably priced rentals, which Orr says are at the lowest level he has seen in 14 years. But Tom Davis, vice president at Pioneer Title Agency, says in some areas, pending listings are up as much as 33 percent and this appears to be the trend throughout the Valley. Davis is quick to add that Arizona is still in somewhat of a seller’s market, with only about a six week inventory of homes on the MLS. “Supply remains relatively low except at the high end of the market,” Orr says. “At the moment, we are seeing early signs that demand is likely to recover quite a bit faster than supply. It would only take a modest increase in first-time home buyer demand to overwhelm the current weak level of supply, making it tougher to find affordable homes for sale.” Orr says home builders aren’t enjoying 2015 much yet. In January, newly built single-family homes hit their lowest monthly sales total in three years. However, most experts expect that trend to reverse, too. “Traffic is running about the same as it has been, but sales are substantially up,” says Dennis Webb, vice president of operations for Fulton Homes. “We are seeing more buyers that have experienced a short sale or foreclosure and now want to move into a new home again. We are also seeing people who have a home to sell being able to move up because the value of their existing home has increased.”

Walt Danley

Tom Davis

Mike D’Elena

Mike Orr

Real estate outlook Here is what residential real estate experts say the Valley can expect to see over the the 12 months:

» Walt Danley, founder, Walt Danley Realty: “I firmly believe that 2015 will be better than 2014 for the luxury market. Not by leaps and bounds, but the market is slowly headed in the right direction. I also think 2016 will be better than 2015. The things that have always made the Valley a great place to live are still here — the weather, the natural beauty and the terrific people.”

» Tom Davis, vice president, Pioneer Title Agency: “With the terrible weather in most other parts of the country compared with the enviable climate here in the Valley, the Metro Phoenix market is a highly desirable place to live. This can only continue to help drive the residential home sales upward as the year progresses.” »

Mike D’Elena, Realtor with HomeSmart and coowner of Northgate Group: “By the end of the year, I predict we are in a full-blown seller’s market. We currently have low inventory and low, but rising demand. Rates are going to trend up, which will temporarily hurt demand,. However, when boomerang buyers and Millennials fully enter the market, the market will heat up fast.”

Doug Reynolds, vice president, Washington Federal Bank: “I believe values have somewhat stabilized, and the market will show modest gains over the next year. New home inventory will continue to be available as smaller infill projects and larger outlying land areas are developed.”

» Dennis Webb, vice president of operations, Fulton Homes: “We expect to see steady sales increases as the market continues to recover. We also anticipate more Millennial buyers, as that group is just too large to ignore. We don’t anticipate any large spikes in the business as we have seen in the last several years.” » Matt Widdows, founder, HomeSmart International: “I think we will continue to see a rise in the market across the board, with steady numbers. Recently Forbes put out a list of the top real estate markets for investors and Phoenix ranked No. 11, and I think this ranking is supported by the flurry of positive activity we are seeing in the Valley.”

Doug Reynolds

Dennis Webb

Matt Widdows AB | May-June 2015

LAW

The business benefits of mediation

isputes erupting from business agreements gone awry are nothing new, and savvy businesses have evolved their approach from a “fight everything” to first attempting to resolve disputes through mediation. Recognizing the distinct advantages to mediation has increased its popularity. There are three strategic advantages of mediation: Steve Gonzales 1. When one or all parties are Professor of Law concerned about their customer service reputation or brand, mediation is preferred because the process is confidential. It ensures the circumstances surrounding a dispute remain private, while litigation is conducted in a public forum. 2. Mediation and other forms of alternative dispute resolution tend to be considerably less expensive than litigation. 3. There is a greater possibility for a positive relationship to continue through mediation. A good example to recall on this topic arose between Ford and a tire manufacturer in the 1990’s. The relationship was nearly a century old when problems began with the Ford Explorer. It was unclear whether the tires or the vehicles were defective. Ford and the manufacturer aggressively cross-claimed and blamed each other throughout a very public litigation process. The century-old, mutually beneficial relationship was destroyed and has never recovered – a complete “lose - lose” result.

Preparing for mediation Arizona law, A.R.S. 12-2238 (A), expressly permits and encourages mediation before or during litigation, and whether by law, court order or voluntary decision of the parties. The same law also makes the process confidential. Frequently, mediation clauses are written into contacts requiring that the parties “preagree” to first attempt mediation if a disagreement arises. In preparation for mediation, businesses should spend

AB | May-June 2015

time determining what they really want from the bargaining and enter the process with a willingness to explore options and communicate their desires. Once a settlement is signed, the parties must fulfill their end of the agreement.

Choosing an effective mediator A mediator should have mediation training certification. The training is beneficial for those who formally serve as mediators and for those who regularly mediate disputes, such as human resource professionals, real estate agents, homeowners’ association leaders and city officials. An effective mediator remains completely impartial and does not show favor to any party. The mediator’s role is to empower the parties and facilitate them to brainstorm “win – win” options for resolving the conflict. A retired judge or someone who has been trained as lawyer, but does not have specific mediator training, has been known to make a situation worse because mediation is the art of being neutral and impartial. Lawyers are trained to be advocates and this adjustment requires training to complete successfully. Also, the role of a judge is to apply the law and render a decision. Both are opposites of mediation skills. Mediators do not advocate for any party and do not enter judgments. Also, legal training tends to be “backward looking” in that it seeks to first find the facts. Fact-finding often puts parties on the defensive and inflames the process. Good mediators move the parties to looking forward and help the parties find how they can craft a settlement agreement without fault-finding that satisfies the needs and protects the future security of each party. While there are no guarantees, many disputes can be resolved with the help of a certified mediator. By including mediation clauses in contracts, discerning small and large businesses have been able to minimize the negative impact of disagreements. Steve Gonzales is a professor of law at Arizona Summit Law School, a certified mediator and mediation trainer.

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This event is the most prestigious financial executive awards in Arizona and the one not to miss! Nominations deadline is August 14, 2015

Visit azBIGmedia.com

AB | May-June 2015

DINING

Roar of approval Thirsty Lion Gastropub & Grill brings style and sophistication to traditional bar food By MICHAEL GOSSIE

PHOTOS PROVIDED

AMAZING APPETIZER: The Bacon Wrapped Dates and Bacon Wrapped BBQ Prawns are served with Newcastle BBQ sauce, Napa slaw and grain mustard vinaigrette.

STYLE WITH SUBSTANCE: Thirsty Lion Gastropub & Grill’s culinary commitment is to provide an eclectic variety of multi-cultural cuisines with an emphasis on local ingredients, bold flavors and scratch recipes.

Thirsty Lion Gastropub & Grill TEMPE: 2000 E. Rio Salado Pkwy., #1041; 480-968-2920 SCOTTSDALE: 7014 E. Camelback Rd., #1423; 480-284-7292 thirstyliongastropub.com

hen a restaurant has a menu that features everything from sushi to pizza to burgers to Chinese dishes, it’s generally a path to a dining disaster. Happily, Thirsty Lion Gastropub & Grill in Scottsdale is the exception. The Fashion Square hot spot, which opened in February, comes on the heels of the success of Thirsty Lion’s first Arizona Valley location at Tempe Marketplace, which opened in 2011. The Scottsdale gastropub features 8,500 square feet of interior seating, handcrafted food, 24 craft beers on tap, signature cocktails and more than 1,500 square feet of prime patio space for enjoying Arizona’s great weather. “Thirsty Lion is the perfect fit for this area of town and we look forward to providing Scottsdale with great service, a diverse menu, local quality ingredients and a great selection of local craft beer,” says Thirsty Lion CEO John Plew. Plew says Thirsty Lion’s culinary goal is to provide an eclectic variety of cuisines, with an emphasis on local ingredients and bold flavors. A seasonal fresh sheet focuses on the changing season’s offerings and features ingredients including fresh seafood, quality meats and local vegetables and fruits. The great thing about having 24 craft beers on tap is that there is a beer to complement every plate and every palate. “We work hard to combine quality ingredients and scratch recipes to create menu items that satisfy the foodie in all of us,” says Thirsty Lion Executive Chef Keith Castro. “The flavor profiles are complex, yet blend well in their simplistic approach to create ‘craveable’ food; an intense desire for more.”

AB | May-June 2015

To put it simply, Thirsty Lion’s goal is to do bar food with a style and sophistication. Judging from a recent visit, Thirsty Lion is hitting it out of the park. While it was impossible to try everything on the menu, here are some can’t miss items that come highly recommended. The Bacon Wrapped Dates and Bacon Wrapped BBQ Prawns. First of all, you can never go wrong wrapping anything in bacon. But the flavors in these two bacon-wrapped appetizers packed so explosiveness, they rose to the top of the favorites list. The Pepperoni, Spicy Sausage & Prosciutto Pizza features a combination of cured Italian meats, roma pear tomato sauce and a four-cheese blend that combine to create an incredible appetizer to share or a satisfying main course. The tender roasted pork shoulder was so packed with flavor that it makes the Roasted Pork Cubano Sandwich stand out among the sandwich offerings. The Thirsty Lion has such a classic English pub atmosphere that it’s hard to resist ordering the I.P.A. Beer Battered Fish & Chips. The crispy batter provides such an exquisite complementary crunch to the fish that this dish alone warrants to return to Thirsty Lion. The Thirsty Lion has incorporated two bars into the space and the open exhibition kitchen and centerpiece bar create a sense of community, which make it a perfect spot for date night or a business lunch. Multiple flat screens also make it a perfect spot for sports fans to enjoy a great meal while watching their favorite teams.

Fresh Seafood... 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

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Restaurant so popular • 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.

550 North Hayden Road • Scottsdale 480.947.1963 • www.saltcellarrestaurant.com Reservations Suggested

2/9/15 10:53 AM

AB | May-June 2015

COMING NEXT ISSUE • Meet the Most Inﬂuential Women in Arizona Business for 2015 • The enormous economic impact of hospitals • WESTMARC shows potential employers that there is a ready supply of qualiﬁed employees in Arizona

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ARIZONA CORPORATE ANGELS

Giving back

Arizonans show their love for organizations 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.

AB | May-June 2015

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: Created and oversees the successful Cafe Without Limits, a snack bar and retail store that provides job skills training for adults with disabilities. UCP now accepts insurance for therapy services including speech, physical, occupational, and feeding therapy.

United Cerebral Palsy of Central Arizona 22601 N. 17th Ave. Phoenix, AZ 85027 Phoenix, AZ 85027 (602) 943-5472 ucpofcentralaz.org

of Central Arizona

AB | May-June 2015

]

AB | May-June 2015

ARIZONA CORPORATE ANGELS

John C. Lincoln Health Foundation

Mission Statement: The John C. Lincoln Health Foundation supports the health and human service needs of the not-for-profit health care system, HonorHealth, through innovative fundraising strategies and the prudent investment of donations.

How to help: You can make a positive impact on the quality of life of members of our community by giving specifically to a program or service thatâ&#x20AC;&#x2122;s close to your heart such by making a financial contribution, donating an item or giving your time.

Did you know? One in four children go to bed hungry in our community.

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AB | May-June 2015

John C. Lincoln Health Foundation 9100 N. Second St., Suite 301, Phoenix AZ 85020 602-331-7860 JCL.com/Foundation

]

When APS employees see a need, they commit to action As the state’s largest utility company, APS doesn’t simply support Arizona communities, it connects with them. At HonorHealth’s Desert Mission, you can find APS employee volunteers participating in the annual turkey distribution, adopt-a-family program or sorting, filtering and assembling food in the food bank. APS’ more than 6,400 employees embrace every opportunity to strengthen and enrich Arizona and create a brighter future for us all. Through volunteerism, in-kind support and philanthropic contributions, APS is a leading partner in the John C. Lincoln Health Foundation’s efforts to Change Lives and Save Lives. Learn how your organization can make a difference. Visit JCLhealthfoundation.com.

JCLhealthfoundation.com AB | May-June 2015

ARIZONA CORPORATE ANGELS

CPLC Community Center

Mission Statement: The mission of the CPLC Community Center is to promote academic achievement, health and wellness, and leadership development for the youth in the Carl Hayden community in West Phoenix. The Center also provides adult education and workforce development services. Did you know: Many children in west Phoenix are attending schools with a â&#x20AC;&#x153;Dâ&#x20AC;? rating?

[ 34

AB | May-June 2015

How to help: With your financial support, the CPLC Community Center can continue to support low-income children in the Carl Hayden Community with: - academic tutoring - homework help - leadership/ character development - recreation/ fitness activities - arts and cultural activities to ensure they are equipped to succeed in school and beyond.

Chicanos Por La Causa, Inc. 1112 E Buckeye Road Phoenix, AZ 85034 602-257-0700 www.cplc.org

]

AB | May-June 2015

ARIZONA CORPORATE ANGELS

Special Olympics Arizona

Mission Statement: Special Olympics Arizona provides year-round sports training and competition in a variety of Olympic-type sports for children and adults with intellectual disabilities, giving them continuing opportunities to develop physical fitness, demonstrate courage, experience joy and participate in their communities.

How to help: You can make a difference for children and adults with intellectual disabilities. Donate time, talents or treasure. Volunteer as a coach or day-of-event helper. Participate by becoming a Unified Partner. Shop cool Special Olympics gear.

Did you know? 91 cents of every dollar donated to Special Olympics Arizona goes directly to support programs?

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AB | May-June 2015

Visit us online at www.SpecialOlympicsArizona.org 2100 S. 75th Avenue Phoenix, AZ 85043 602.230.1200 www.SpecialOlympicsArizona.org

]

Great Service, Great Cause, EVERYBODY WINS.

This year is Parker and Sons 40th anniversary and we decided we should celebrate! Our employees decided the best way to celebrate was to give back to the community. With that in mind, Parker and Sons has teamed up with the Special Olympics to make a big difference in the community and many people’s lives. Over the course of this year, and on behalf of our customers, Parker and Sons will donate to Special Olympics Arizona:

$25 for each AC system or water softener we install $5 for every maintenance or repair call we perform With the help of our customers, our employees, and the Arizona Diamondbacks, we look forward to this exciting opportunity and hope to contribute more than $400,000 to Special Olympics Arizona. We have raised $250,000! When you use Parker and Sons, you are supporting a great cause and helping us reach our goal of donating $400,000!

• Heating • Cooling • Plumbing

• Drain Cleaning • Water Softening • Reverse Osmosis

602-2-REPAIR

Phoenix - (602) 273-7247 • East Valley - (480) 963-1829 • West Valley - (623) 979-7011

www.ParkerandSons.com/Everybodywins

ARIZONA CORPORATE ANGELS

Childhelp

Mission Statement: Childhelp exists to meet the physical, emotional, educational and spiritual needs of abused, neglected and at-risk children. We focus our efforts on advocacy, prevention, treatment and community outreach. Did you know: The estimated lifetime cost associated with confirmed cases of child abuse in Arizona is more than $210,000 per child.

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AB | May-June 2015

How to help: Investing in Childhelp Speak Up Be Safe, a child abuse prevention education curriculum, provides children with the skills they need to stay safe. This innovative prevention program brings together parents, caregivers, teachers, school administrators and community stakeholders to create a responsive safety network where children feel safe to address abuse, neglect or bullying.

Childhelp 4350 E. Camelback Road, Building F250 Phoenix, Arizona 85018 Telephone (480) 922-8212 Childhelp.org

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Grimaldi’s Pizzeria•THANK YOU FOR INVESTING IN OUR CHILDREN•Origami Owl

How will you impact our children’s safety? childhelp.org/corporate-sponsors

*Childhelp.org 2015 Statistics

San diego tourism Authority

It’s a

celebration

Some of San Diego’s most iconic attractions reach milestones in 2015

an Diego is a hot spot for celebrations this year. With a number of notable San Diego landmarks, worldclass attractions and signature events celebrating anniversary years in 2015, visitors to San Diego can join the festivities and discover a wealth of history and heritage all year long.

Balboa Park Originally built for temporary use during the 1915 PanamaCalifornia Exposition, the iconic Balboa Park celebrates its 100th anniversary in 2015. The centennial celebration kicked off December 31 with a special anniversary concert at the Spreckels Organ Pavilion and continued on January 1 with the momentous reopening of the California Tower at the Museum of Man, which was closed to the public for 80 years. The 1,200acre Balboa Park and its many institutions have also lined up a year-long celebration of innovative programming and unique events to enjoy during its centennial year.

Flagship Cruises

Quarter of downtown San Diego, is celebrating its 125th anniversary. The Keating Hotel, which currently occupies the space, will celebrate all year long offering exclusive packages, a handful of overnight room rates at $125, special events throughout the year and an exclusive New Year’s Eve celebration.

Coronado On December 11, 2015, the seaside village of Coronado celebrates the 125th anniversary of its incorporation in 1890. Coronado is situated just across the Big Bay from downtown San Diego and is known for its pristine sand, gentle surf and charming community with a small-town feel. The “Coronado Celebrates 125” festivity will include a 125-day countdown kick-off event in August and other community-sponsored events.

WIZARD OF OZ

This year marks 100 years since Flagship Cruises started operating in San Diego Harbor. The locally, family-owned company is planning a special 100th anniversary celebration in spring of 2015. Flagship Cruises offers a variety of harbor tours, gourmet dinner cruises and whale watching tours and private events.

While visiting Coronado for its 125th anniversary, fans of the “Wizard of Oz” should visit The Hotel del Coronado. With its iconic red castle-like turrets and fairy tale setting, th hotel was author L. Frank Baum’s inspiration for the Emerald City. The Hotel del Coronado’s grand Crown Room is home to four spectacular crown-shaped chandeliers designed by Baum, which visitors can still enjoy seeing today.

The Keating Hotel

Borrego Springs

The Keating building, located in the heart of the Gaslamp

AB | May-June 2015

The charming dessert town of Borrego Springs celebrates the

Waterfront makes a new splash Visitors to downtown San Diego’s bustling bayside will find a new, more pedestrian-friendly Embarcadero thanks to enhancements by the Port of San Diego. Two years in the making at a cost of $31.1 million, a new esplanade located along Harbor Drive between the Navy and B Street piers welcomes visitors, including cruise ship passengers boarding and disembarking from San Diego’s two adjacent cruise ship terminals. Representing the first phase of San Diego’s Embarcadero Visionary Plan, the improvements include a two-block area of West Broadway between North Harbor Drive and Pacific Highway. The following are some notable features visitors can find along San Diego’s premier waterfront destination: Two sleek metallic shade pavilions feature colorful and inviting new glass ticket kiosks for the Old Town Trolley Tours, Flagship Cruises and Hornblower Cruises. The pavilions also house a new visitor information center, projected to open in April 2015, gift shop and Carnitas Snack Shack, a popular local restaurant scheduled to begin operating in late May/early June. Eye-catching public art by internationally-known artist Pae White integrates seamlessly throughout the architecture of the Embarcadero’s new buildings. Inspired by the novelist Jonathan Livingston Seagull, White adorned the pavilions, ticket booths, restaurant, information center and a new public restroom with large cutout letters and words that represent the aerial views of a seagull in flight. Lush, colorful gardens, landscaped plazas and pathways feature comfortable wooden benches and seating areas, groves of 42 purple-blooming jacaranda trees — San Diego’s official tree — and an environmentally-friendly water filtration system that captures street and sidewalk runoff, filtering pollutants from the water before it enters San Diego Bay. New York lighting designer Leni Schwendinger installed dramatic sculptural lighting fixtures in the medians along West Broadway, complementing 18 towering palm trees.

» Firework

s o ve r C

oronado

Bridge

50th anniversary of the annual Borrego Days Desert Festival. Located in San Diego’s East County and surrounded by the Anza-Borrego State Park, Borrego Springs is a quaint village with golf courses, a tennis center, horseback riding and much more. From October 23-25, the festival will feature arts and crafts, food vendors, live entertainment, the Miss Borrego Springs Pageant and a parade with marching bands and floats.

End of World War II Throughout 2015, San Diego will take part in the commemoration of the 70th anniversary of “the Greatest Generation’s Greatest Day,” the remembrance of the end of World War II. Yearlong activities will include a “Kiss-In” event at San Diego’s Bay Greatest Generation Collection, a wreath laying ceremony, the 4th Annual Spirit of ‘45 Day National Leaders Conferences, a celebration dinner at the San Diego Air and Space Museum, the Spirit Fest on the USS Midway and “America’s Longest Veterans Day Parade” in Balboa Park.

Comic-Con From July 9-12, the San Diego Comic-Con International celebrates its 45th anniversary. Comic-Con began in 1970 when a group of comics, movie, and science fiction fans teamed up to put on the first comic book convention in southern California. Comic-Con started as a one-day “minicon,” called San Diego’s Golden State Comic-Minicon, on March 21, 1970, at the U.S. Grant Hotel in downtown San Diego. Attendance has topped 130,000 in recent years for this premier pop culture event. Comic-Con, San Diego AB | May-June 2015

Seeds of success Crowdfunding law gives Arizona small businesses and start-ups a boost By DIEGO MENDOZA-MEYERS

t was appropriate that Gov. Doug Ducey signed HB 2591 at TechShop Chandler, an engineering and technology-based hub that provides Arizona’s brightest minds the space to innovate. “This legislation reaffirms our commitment to making Arizona the most attractive, easiest place to start and grow a business,” Ducey said. The new Arizona law will help small Arizona businesses and start-ups grow and thrive in Arizona by allowing entrepreneurs to raise equity for their company from the general public. The passage of HB 2591 allows people to invest and potentially hold stock in companies that raise money through crowdfunding websites such as Kickstarter and Indiegogo. “Allowing entrepreneurs and start-ups to sell equity in their companies in exchange for public funding will help smallbusinesses raise up to $2.5 million, save businesses from going into debt, employ thousands of Arizonans and encourage investment in local companies,” Ducey said. “It’s an all-around win for Arizona.” Experts say the new law is great news for aspiring small business owners. “It’s basically the idea that companies shouldn’t be limited to having just rich people be their investors and individuals shouldn’t be restricted from investing small amounts of money in companies that they know and love,” said Jonathan Frutkin, a Scottsdale attorney and author of “Equity Crowdfunding: Transforming Customers into Loyal Owners.” Crowdfunding has become a popular method used by upstart businesses to raise money for product launches or other business ventures. It works by allowing anyone to funnel money into thousands of projects you can find online. However, concerns over fraud loom over the different crowdfunding websites. Although many remain hesitant to give money to companies electronically, concerns over fraud and

AB | May-June 2015

embezzlement may be unfounded, Frutkin said. “When an organization asks, ‘Hey, you want to raise money online?’ Give me a copy of your articles of organization, your lease, intellectual properties. When you ask those question, the fraudsters say, ‘There’s a lot easier ways to steal money that this,’” Frutkin explained. HB 2591 was originally introduced to the legislature by Rep. Jeff Weninger, R-Phoenix. The Arizona Small Businesses Association helped write it. Besides Arizona, 17 other states have passed crowdfunding bills. Frutkin said he expects at least 25 states to pass similar bills to HB2591 by the end of 2015. Only Arizona residents would be allowed to invest in Arizona companies, according to the bill. Investors can donate up to $10,000, while companies can raise up to $2.5 million through crowdfunding campaigns. Arik Tasa-Bennett, a finance major at Arizona State University, has run his own phone-resale business for several years. Tasa-Bennett said he hopes to become a successful entrepreneur and sees the potential for future businesses to grow through crowdfunding. “I think this system could be more efficient than traditional ways of financing a product,” Tasa-Bennett said. “With this idea, where the public can see the product and get an opportunity to invest in it, the advantage is that it brings the product closer to the end-user. That’s the whole goal of marketing. You want to know your consumer as well as possible.” Said Frutkin: “The ability for the small investors, regular people, to invest $100, $200 in a company they love, a night club or restaurant they go to, that really doesn’t exist now. That’s what the Arizona crowdfunding bill will allow. It will allow Arizona people to invest in Arizona businesses.”

Helping small businesses grow

Here are 10 Arizona-based incubators that help innovators build their businesses: AZ Center for Innovation:

MAC6:

9070 S. Rita Rd., #1750, Tucson Website: techparks.arizona.edu

1430 W. Broadway Rd., #201, Tempe Website: mac6.com

AZ TechCelerator:

Seed Spot:

12425 W. Bell Rd., Surprise Website: aztechcelerator.com

2828 N. Central Ave., Phoenix Website: seedspot.org

BioAccel:

Spoke6:

2702 N. 3rd St., #3001, Phoenix Website: bioaccel.org

439 N. 6th Ave., #101, Tucson Website: spoke6.com

Co+Hoots:

Tallwave:

1027 E. Washington St., #107, Phoenix Website: cohoots.com

6263 N. Scottsdale Rd., #180, Scottsdale Website: tallwave.com

Gangplank:

TechShop Chandler:

260 S. Arizona Ave., Chandler Website: gangplankhq.com

249 E. Chicago St., Chandler Website: techshop.ws/ts_chandler.html

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financial executives international

ADAM MILLER: “I picked accounting as a major because I wanted to have a degree where you went to school for four years and came out as a professional,” says the CFO of Barron Lighting Group. PHOTO BY SHAVON ROSE, AZ BIG MEDIA 46

AB | May-June 2015

Spotlight on

dam Miller brought a broad range of experiences in finance, accounting, auditing, personnel, real estate, manufacturing and operational management to his role as president of the Arizona Chapter of Financial Executives International (FEI). Miller became CFO of Barron Lighting Group in 2010 and has helped the company achieve double-digit growth in the years since joining the executive team. Az Business talked with Miller about the evolving role of the CFO.

Az Business: What attracted you to the financial side of business? Adam Miller: When I was in high school, my guidance

CFOs

CFO of Barron Lighting Group hopes to help chapter give back to the community and the financial profession By MICHAEL GOSSIE

counselor asked me what I wanted to do and I said, “I want to make money.” He set me up in a bookkeeping class and I loved it. I fell in love with accounting. It clicked with me. It made sense.

AB: How has the role of the CFO changed since you started your career? AM: It’s become a lot more about managing risk and

information than it has about debits and credits. My job has become much more about managing people, managing information and managing risk. Probably the most important thing is when someone asks what I look at every day. I say I’m looking at cash availability because that really tells you what you can and cannot do in the future. Eventually, interest rates are going to go up, so, if you’re a net borrower, that’s going to impact your bottom line. Even though money is very cheap, be cautious because when those rates start going up, I don’t think it’s going to be little.

AB: What impact are today’s CFOs having on the businesses that might not have been the case 20 years ago? AM: A CFO has to be much more strategic and forward-

thinking. Twenty years ago, CFOs were responsible for what was being reported and what happened. They were the financial watchdogs for their companies. That’s still there, but the expectation is that today’s CFOs are the most important adviser to owners and CEOs. The CFO has become much more of a strategic partner to the executive team. Making the right decision is not always about percentage return. Sometimes a return on investment might be happier employees or a lower turnover rate.

AB: How do you see the role of the CFO evolving over the next 10 or 20 years? AM: The CFO is going to be pulled in more directions. When I was in school, I always hated the group

AB | May-June 2015

fei assignments because I always thought I was the best thing since sliced bread and I could do everything by myself in half the time. The CFO in the future is going to have to become ingrained in the culture of all the different departments and be part of their process. The CFO will have to be a student of the rest of the organization so the CFO understands how decisions effect each department and also help each department understand the potential returns of the decisions that are made.

AB: Is Arizona a good place for financial professionals to build careers? AM: There are a lot more opportunities to start a career here

than when I moved here in 1987. People who are starting their career should choose a company that will give them different experiences. You need a variety of experiences to get to the executive level so you have more to draw upon than simply being with a company for 15 years. I was in real estate for a while. I was in home building and did multifamily management and land development. When we bought this building, that background was a huge help. Arizona is a dynamic environment. Having the diversity of experiences that Arizona offers is invaluable in building a career as a financial professional.

AB: How did you become affiliated with FEI? AM: I was introduced to FEI when I was in between careers.

They had a transition group than met every week. When you’re in that, you think that you’re the only one. I got in there and the caliber of people who were sitting in the room amazed

me. That was the first time since I was 15 that I didn’t have a job, but it made me realize that a lot of people go through transitions and a lot of people share the same path that you’re on and it’s not always a smooth path.

AB: What kind of impact can FEI have on financial professionals? AM: One of the most important aspects of FEI is meeting

with your peers. When I first started coming to FEI, I knew of people but never got to meet them face to face until FEI. In addition to the members, meeting the sponsors and speakers can be a tremendous resource for financial professionals. FEI is exclusive to a point, but it is much more inclusive than it has ever been. So it continues to become more relevant to members.

AB: How has the CFO of the Year program impacted the visibility of FEI and financial executives? AM: To hear the stories and to make the CFO more human is

encouraging and amazing. That event is a showcase event for financial executives. The people who are honored have really done things that are uplifting for the entire profession.

AB: What are your goals as president of FEI? AM: One of the things we pride ourselves on as a local chapter

is we have excellent programming and we want to continue that, diversify it and make it even more meaningful. We want to engage as many members as possible. We are also expanding our scholarship program with the help of our sponsors. That, to me, is very important because that’s a way we can give back to the community and give back to the profession.

Financial Executives International

VISION BENEFITS CFO

of the year

TO JOIN 48

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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

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V isit Phoenix

Changes in the air Sky Harbor renovations elevate travelers’ experience By CHERYL HURD

riends embrace. Families explore an art exhibition. Shoppers admire handcrafted wares and hungry travelers survey a myriad of local eateries before settling on a lunch destination. This is the scene at the newly renovated Terminal 4 at Phoenix Sky Harbor International Airport. It’s where about 85 percent of the airport travelers, more than 100,000 people a day, have their first encounter with Arizona — an encounter that will help shape their impression of the state and the Phoenix metro area. “For many travelers, Phoenix Sky Harbor International Airport is the first experience they have of the Phoenix area, so our goal is to provide them with a world-class experience,” explains Heather Lissner, acting public information manager for the City of Phoenix Aviation Department.

Impact on tourism The $590 million facelift is more than strategically placed art displays, designer walkways and vibrant southwest décor. Seamless transportation, sustainable design and streamlined customer service enhance the airport’s reputation and reflect upon the local tourism industry.

AB | May-June 2015

“The recent additions to Phoenix Sky Harbor International Airport, from the Sky Train to public art to the abundance of local restaurant options, have extended the unique qualities of the metro Phoenix area and created an improved visitor experience,” says Toni Smith, director of communications for the Tempe Tourism Office. “We’re lucky to have an airport that travelers want to see, which helps set us apart as a destination and encourages repeat visits.” If travelers’ destinations are along the Valley Metro light rail line, the PHX Sky Train provides a seamless transition between the terminals and the 44th and Washington streets station. From there the light rail transports travelers east through Tempe and Mesa, or west into Phoenix. Douglas MacKenzie, director of media relations for Visit Phoenix, appreciates the 15-minute trip from the airport to the downtown area. “Phoenix is primarily a fly-in market for both our leisure and meetings visitors so the airport is very important to our convention and leisure business.” Whether travelers are coming for a convention or mega event like the Super Bowl, the transition from airport, to PHX Sky Train, to Metro light rail adds great value. “It’s a wonderful plus for attendees. It’s the ease of convenience for our meeting delegates to get into downtown,”

MacKenzie says. “It’s a perfect tourism factor in more people choosing Phoenix as a destination.”

Authentic Arizona dining MacKenzie says a mix of eateries that includes delicious local choices can also encourage return visitors. Two companies, HMSHost Corporation and SSP America, have orchestrated a blend of local, regional and national eateries with more than 40 establishments providing dining options from the fast food national brands to locally owned wine bars. Part of the strategy to provide authentic Arizona dining was to offer the best restaurants in the area and keep the street prices. Among the eateries chosen to enhance Phoenix’s reputation as a foodie destination are Barrio Café, Cowboy Ciao, Sauce Pizza & Wine, Lo-Lo’s Chicken & Waffles and Joe’s Real BBQ. “What has truly happened is that the culinary offerings at Sky Harbor — for the first time ever — are probably some of the best in the nation,” says Tad Peelen, operating partner at Joe’s Real BBQ in Gilbert. “I think people who travel a good deal recognize the fact that it is not the preponderance of national chains. “We are happy to have a Gilbert presence at the airport for the first time,” Peelen says. “We think the brand extension is fantastic. We like the fact that when people get off the airplane

they see a logo of a place east of the airport and in many cases more of those people are staying east of the airport. “They say they are America’s friendliest airport and I think this is an extension of that. It was a very passenger friendly thing to do to give so many independent really tasty options at the airport.” MacKenzie agrees. “It’s a wonderful culinary entrance into the Southwest. If people don’t have a chance to visit all of our local restaurants, it gives them a taste of what they’ve missed,” he says.

Memorable connection Passengers with connecting flights also benefit from the new design and abundant shopping and dining. Additional amenities include water bottle filling stations, strategically placed kiosks and a pet park. Airport navigators wearing purple jackets and “Ask Me” buttons answer questions and direct travelers needing assistance. There is also an indoor walking trail with ample views of the area. “It’s a little over a mile long,” Lissner says. “You can see Camelback Mountain, the Buttes at Papago Peak, the Sky Train bridge and South Mountain. At Terminal 3, the Phoenix Sky Train station has some very gorgeous views of downtown Phoenix as well as the airfield.”

AB | May-June 2015

V isit Phoenix Sustainably styled The beauty of the project is supported by an environmentally conscious design. The first phase of the electric-powered PHX Sky Train construction received a Leadership in Energy and Environmental Design (LEED) Gold designation from the U.S. Green Building Council, while the Terminal 3 segment earned a LEED Silver designation. The PHX Sky Train is part of the overall sustainability management plan that consists of investing in renewable energy, improving air quality, minimizing greenhouse gases, reducing waste and conserving water. “We do strive for sustainability,” Lissner says, adding that the plan aligns with the City of Phoenix in terms of recycling and sustainability goals. “We’re doing our part to help the environment.”

Heather Lissner

Doug MacKenzie

Tad Peelen

Toni Smith

Continuing renovations When renovations are complete, Terminal 3 will have a consolidated security checkpoint, additional ticket counters, new baggage carousels and expanded curb area. More shops and restaurants are included in the plan. “I think Terminal 3 is going to be stunning,” says MacKenzie, who has seen the plan. “It’s going to be more open, with more windows and more restaurants. It will certainly enhance the service and experience of every traveler.” Eventually, Terminal 2 will be closed and those airlines will move to Terminal 3, Lissner says. The project is scheduled to be complete by 2020. The approximately $590 million price tag is being paid by airport revenues generated through parking, tenant and concession fees. Local tax dollars are not used to support the airport, which has an annual economic impact reported to be nearly $29 billion. Lissner says the changes are essential to quality travel. “We pride ourselves on being America’s friendliest airport,” Lissner says. “We’re really looking to provide travelers with a world-class experience that is more efficient, more pleasant and something they can really enjoy so we can really welcome them to the state of Arizona.”

Terminal 4

PROVIDED PHOTOS

DELICIOUS DESTINATION: To enhance Phoenix’s reputation as a foodie destination, Phoenix Sky Harbor International Airport has added local favorites Barrio Café, Cowboy Ciao, Sauce Pizza & Wine, Lo-Lo’s Chicken & Waffles and Joe’s Real BBQ.

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Stay home &

relax

Arizona resorts’ summer staycation deals let you experience the state’s finest facilities at low prices By MICHAEL GOSSIE

Need a summer getaway? Stay home and save money.

Arizona is home to some of the world’s most fantastic pools, luxurious spas, romantic retreats, spectacular golf courses and best restaurants. You can forget about 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 a staycation to get away from it all. The best part about experiencing Arizona’s best resorts in the summer is that many offer great deals and low rates.

The Boulders Resort

The deal: The Boulders’ summer rates begin at $99, which is more than a 70 percent discount from its current rates. The Boulders’ “Two by Fore” package includes private luxury casita accommodations, one round of golf per paying adult with same day replay, a 20 percent spa discount at The Boulders Spa, complimentary access to spa facilities and unlimited fitness classes for $189 per night. To book: 480-488-9009 or theboulders.com

Courtyard Scottsdale Salt River

The deal: Courtyard Scottsdale Salt River offers a refreshing way to unwind. Book its Sleep In & Save Package and stay two nights, save 20 percent and sleep in with a 2 p.m. late check out. It’s your weekend to hit the snooze button and catch extra pool time. To book: 888-236-2427 or courtyardscottsdalesaltriver.com

FireSky Resort & Spa

The deals: FireSky has four opportunities for locals to enjoy a much-

JW Marriott Starr Pass Tucson Resort & Spa

deserved staycation: • Fast Forward to Summer: Book early and save up to 20 percent off the best available rate, Must book 4 weeks in advance to receive this rate. Mention rate code FAST when booking. • Tequila and Tanlines: Includes one welcome pitcher of margaritas from Taggia Bar, morning coffee and tea service in the living room and hosted evening wine reception in the living room. Mention rate code PTAN when booking. • Girls Just Wanna Have Fun: Includes welcome signature cocktail for each person from Taggia bar, transportation to Old Town bars, $10 “Raid the Mini Bar card” for after hours, Westcor shopping and dining incentive guide and more. Mention rate code PGRL when booking. • Bros and Brews Package: Includes welcome round of four beers, appetizer in Taggia Bar and more. Mention rate code PBRO when booking. To book: 800-528-7867 or fireskyresort.com AB | May-June 2015

V isit Phoenix Fairmont Scottsdale Princess

The deal: The sky lights up this summer at the Fairmont Scottsdale Princess with fireworks every Saturday night, Dive In movies and the Techno Glo party after dark, a zip line across the lagoons, the SplashRider X-treme water ride, dining, spa golf and more activities for the entire family. The summer “Sip, Savor & Splash” package starts at $169 per night with a $50 daily resort credit. To book: 480-585-4848 or scottsdaleprincess.com

Graduate Tempe

The deals: Graduate Tempe offers two staycation options that

appeal to both risktakers and the more reserved: • Round up your comrades for the ultimate test in fortitude and sport with the Weekend Warrior Package. Spend an afternoon with your buddies settling old scores at Tempe Paintball. One-night stay Friday or Saturday comes with a $50 restaurant credit for The Normal or Tapacubo and two passes to Tempe Paintball with transportation included. • What better way to cultivate your intellectual curiosity than with a night at the theater? You pick up the tickets and Graduate Tempe will take care of the rest with its Gammage Theater Package. One night stay includes $50 a restaurant credit for The Normal or Tapacubo and transportation to the theater. To book: graduatetempe.com

The Hermosa Inn

The deal: With rates normally ranging from $306 (for the smallest casita, the Rancho) to $489 (for the largest casita, the grande) per night during high season, The Hermosa Inn’s summer escape package will be offering stays starting from $169 per night. To book: 602-955-8614 or visit hermosainn.com

Hilton Sedona Resort & Spa

The deal: With a recent multi-million dollar renovation, Hilton

Sedona Resort & Spa is offering summer rates from $168 per night for stays May 26-Sept. 8. Splash into the red rocks with three pools, enjoy indigenous spa treatments at eforea: spa and take a swing at 18 holes of golf at the adjacent Sedona Golf Resort. To book: hiltonsedonaresort.com

JW Marriott Desert Ridge Resort

The deal: Escape the hustle, bustle and day-to-day responsibilities with the Fling & Swing package, an amenity-rich package starting at $169. The summer package, available through Sept. 7, includes a daily $50 resort credit, free golf on Faldo and Palmer championship golf courses, free meals for kids 12 and under, free access to the Family Escape Center and no resort fee. To book: jwdesertridge.com

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Kimpton’s Hotel Palomar Phoenix

The deal: Hotel Palomar in the heart of downtown Phoenix is ready for some summer fun in the sun with its “Fast Forward to Summer” Staycation Package, starting at $119 per night. The package includes 20 percent off the best available rate, deluxe accommodations, 50 percent off valet parking, hosted wine reception in the living room and morning coffee and tea service in the living room. To book: 602-253-6633 or hotelpalomar-phoenix.com

The Phoenician

The deal: Dive into summer at Arizona’s premier AAA Five Diamond resort with SunSational Summer at The Phoenician with starting rates of $159. Enjoy luxurious accommodations, signature amenities and incomparable service. To book: 800-888-8234 or thephoenician.com/offers, use promo code SUMMER

L’Auberge de Sedona

The deal: For the past four summers, L’Auberge has had a “Drop it Like it’s Hot” deal that is geared towards Phoenix residents. As the temperatures heat up 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. To book: (928) 282-1661 or lauberge.com

Pointe Hilton Squaw Peak Resort

The deal: Round-up the family for The Great American Summer at Pointe Hilton Squaw Peak Resort, the ultra-family friendly resort with four acres of pools, waterslide, lazy river and more. With rates from $109 per night for stays between May 26 and Sept. 8, each weekend celebrates America’s favorite summertime experiences with beach parties, luaus, carnivals and more. To book: squawpeakhilton.com, use promo code SUNSP

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The deal: The Play Your Way package allows you to escape to cool and comfortable elegance, exciting adventure and delicious dining. From $199 per night — including a $50 or $100 daily resort credit, depending on which package is booked — you can make a splash at the Starr Pass Water Collection, relax and rejuvenate at Hashani Spa, swing into action at the Starr Pass Golf Club or indulge in fresh and flavorful fare of one of the facility’s five restaurants. To book: 800-721-6996 or jwmarriottstarrpass.com, use promo code ES7

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V isit Phoenix Pointe Hilton Tapatio Cliffs Resort

The deal: Leave the kids at home and escape to Pointe Hilton Tapatio Cliffs Resort, where stunning views and a dramatic mountainside location meet luxe amenities, including all-suite accommodations, eight refreshing pools, golf, spa and romantic dining overlooking the city lights. Rates from $89 are available for Thursday-Sunday stays from July 6-Sept. 8. To book: tapatiocliffshilton.com, use promo code TAPRM

The Ritz-Carlton, Dove Mountain

The deal: Summer Returns Package, starting at $239 per night, includes luxury accommodations and a $50 resort credit per night. Summer Fun Package, starting at $249 per night, includes luxury accommodations and a $100 resort credit per night. Summer Fun Package is $999 for a four-night stay and includes luxury accommodations and a $600 resort credit per package. Resort credits may be used for dining, spa or recreational experiences — excluding golf. To book: 800-241-3333 or ritzcarlton.com/dovemountain

Royal Palms Resort and Spa

The deal: The Royal Palms Resort and Spa, at the base of Camelback Mountain in Scottsdale, is offering guests the “Luxe Lounging” staycation package, starting at $149 per night. The package features more than $135 of value, including an upgraded room, complimentary cocktails, $25 dinner credit to the renowned T. Cook’s and two $40 Alvadora Spa credits. To book: 602-840-3610 or royalpalmshotel.com, use promo code PLL

Sanctuary on Camelback Mountain

Royal Palms Resort and Spa

The deals: Sanctuary offers a variety of staycation options to suit any

interest or occasion: • Couples looking to indulge in a quick, romantic escape can enjoy Sanctuary on Camelback Mountain’s Romance in Paradise package, which provides one night’s accommodations, dinner at elements, chocolate-covered strawberries and a rose petal turndown. Rates start at $410. • Friends seeking a sweet staycation can enjoy Sanctuary on Camelback Mountain’s BFF Retreat, which includes three nights’ accommodations, daily breakfast, a guided hike, bento box lunch and “build-a-martini” in-room kit. Rates start at $1,386. • Athletes can hone their skills during Sanctuary on Camelback Mountain’s Triathlon Training package, which offers swimming workouts with Olympic gold medalist Misty Hyman, tandem runs and guided biking excursions with the resort’s staff of fitness experts. The package includes three nights’ accommodations, three days of training, daily breakfast and three spa treatments, designed to soothe the muscles after a hard day of workouts. Rates start at $1,797. To book: 855-245-2051

Talking Stick Resort

Sanctuary on Camelback Mountain

The deal: Talking Stick Resort is the perfect playground for your ideal summer getaway. Enjoy the Summer Playcation Package from just $119 per night. This exclusive package includes a daily $25 food and beverage credit with a minimum of a two-night stay. Valid for stays between May 3 and Sept. 30. To book: 866-877-9897

We-Ko-Pa Resort & Conference Center

The deal: For $129 per room, per night, the Summer Splash package includes a $50 food and beverage credit for the Ahnala Mesquite Room, room service or pool bar and grill; $10 casino slot play for new Fortune Club members; and $5 casino slot play for existing Fortune Club members. To book: 480-789-5320 62

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Renewable energy and tech-friendly legislation make Arizona a hot spot for data centers By CHERYL HURD

hoenix has its head in the clouds. Digital information—everything from financial and medical accounts to media entertainment and social networks—is now being stored in about 60 high-tech data centers throughout the Phoenix metro area, adding to the state’s growing reputation in the technology industry. Renewable energy, geo-stability and tech-friendly legislation are a few of the reasons for Arizona’s popularity. Chris Camacho, president and CEO of the Greater Phoenix Economic Council, says one of the reasons Phoenix has seen a significant level of data center activity is power availability and competitive pricing. “We have very affordable power costs,” Camacho says. “Our utilities have been very flexible in supporting this industry to ensure we have dual feeds from the electrical standpoint. Having affordable power rates has been critical. The other attributes that are important to this industry as to why we have been successful are the level of infrastructure, that’s generally fiber infrastructure, and latency. We’re very favorable to the West Coast in that regard. So our communities, as well as Cox, CenturyLink and others, have done a great job extending infrastructure to support this industry.”

Demand for renewable energy As data centers continue to propagate, the demand for power increases. A recent survey by Mortenson Construction, one of the leading data center contractors in the U.S., reported 84 percent of responding data center executives, developers and operators believe there is a need to consider renewable energy. Energy efficiency is a top concern and nearly half the survey participants believe improved technology can increase energy efficiency. “Technology companies like Apple, eBay, Amazon and Google, all of the organizations that store massive amounts of information, tend to have leaders who are highly environmentally conscious,” explains Steven G. Zylstra, president and CEO of the Arizona Technology Council. “They would much prefer to use renewable energy to power these data centers rather than power coming from a coal-burning plant. It’s less about the economics and more about doing the right thing.” IO president Anthony Wanger agrees. IO, one of the largest colocation AB | May-June 2015

data centers in North America, has created and patented energy efficient data storage modules and operating software. In 2013, APS evaluated IO’s Power Usage Effectiveness ratings and determined the modules were more efficient than the traditional raised-floor data center environment. In February, IO announced an agreement the company made with APS to be able to offer renewable energy to its customers. “We had a breakthrough,” Wanger says. “We were able to negotiate a rate with APS that allows us to buy renewable energy. We were able to get a rate that reflects the scale of our use, and the option for our customers to simply choose to go green. For about a cent and a half more per kilowatt hour they can buy energy that is 100-percent renewable. It’s solar and wind. We have had terrific customer feedback about it. “It’s important for us,” Wanger continues. “We want to be leaders in dematerialization and we want to be leaders in giving our customers the tools and the choices they need to manage their energy needs. Our very largest customer, Goldman Sachs, is committed to zero carbon. “We have taken great strides in moving our energy over to renewables. I’m not going to tell 1,000 customers what they have to do,” he explains, adding that if he puts it on the menu and incentivizes it, he believes they will choose it. “We are committed to renewables, we are leaders in energy efficiency, by putting it out there, it’s going to be a needle mover.”

Making it happen IO began with three businessmen and a folding table from Costco, Wanger says. The table, signed by the co-founders Wanger, George Slessman and William Slessman, is still in the Phoenix facility as a reminder of how they began. “I always liked to build things. I have always been fascinated by buildings and real estate and systems and machines,” says Wanger, who comes from several generations of entrepreneurs. “I was brought up in the ‘you make your job, you don’t get a job’ mentality. Sit down. Figure it out. Make it happen. That’s the only thing that works for me. “We’ve been really fortunate we have a really solid business with terrific institutional backers and terrific institutional customers. We’ve been able to attract some terrific talent. The way we got here is people. When I say make it happen, it isn’t just the three of us, it’s the entire team. “Make it happen. That really is the moral of our whole story here. These data centers didn’t build themselves. These folks didn’t employ themselves. The capital didn’t raise itself. The customers didn’t identify and sign themselves. This is hard work. He suggests that in order for Arizona to continue growing its reputation in the technology arena, it, too, will take hard work. “If Arizona wants to continue its fantastic growth it’s going to be because it chooses to, not because it happens automatically. I feel very positive about Phoenix and Arizona’s prospects, but I think we have to be careful not to take things for granted,” Wanger says. “It’s a very competitive economy. I think we would be well advised to be purposeful in our recruiting and the way in which we create a climate where risk takers can take risks.”

Trending Wanger and his partners at IO, which now has six locations around the globe, were among some of the early risk takers in the data center industry. “We grew up with the GoDaddy guys. If you go back 10 or 15 70

AB | May-June 2015

years ago, they were in data centers. We were in data centers. There was another guy in data centers and that’s about it,” Wanger says. According to a market overview analysis by CBRE, there are about 60 data centers in the Phoenix metro area today, including colocation operations and those used by individual companies. An additional 21 greenfield sites have been identified mostly in the East Valley for build-to-suit data centers. Even with the explosion of data centers in Phoenix, Wanger says he is seeing a trend toward consolidation. “We are moving away from square footage to more power in less space with shared highly utilized banks of computers,” he says. “I think that the Internet went from 400 markets globally to 200 to 50 markets. I think it’s on its way to being in 12 markets globally. That’s mega consolidation. We are doing everything we can do in our power to make sure Phoenix is on the winner side of that equation.”

Tech magnet Energy affordability, access and renewable options are sited as reasons for locating power-intensive data centers in Phoenix, but there are more. Geo-stability is an important factor when deciding a data center’s location. Arizona is free of natural disasters, making it an appealing locale. “We don’t have hurricanes or earthquakes or tornadoes or floods or any of those things that jeopardize a data center. We are a very sound place from that standpoint,” Zylstra says. Moderately priced real estate with relatively low property taxes and legislative incentives sweeten the pot. “A lot of economic policies in the legislature have supported both enterprise use and colocation centers,” Camacho says. “There was legislation in the last few years that provided a sales tax exemption on server and IT equipment. That was one of the last pieces of the puzzle of being a great market in terms of allowing this market to grow and making it competitive against California and these other states.” According to CBRE, “The financial impact of this law to a 1 MW tenant’s bottom line could be as much as $6 million to $7 million in tax credit savings over a 10-year period.” Camacho continues, “There are tax credits available for companies of a certain investment scale, so, in a certain investment threshold, when they meet that level of capital investment, they are eligible, assuming they are going to use significant renewable energy resources, to obtain a corporate income tax credit.”

The future Locating data centers here is often an introductory step for some of the larger companies to test the business waters and learn about the Phoenix area. “We’ve spent a lot of time working to support colocation operations in the market that are already here,” Camacho says. “And we are working as diligently as we can as we travel outside this market and showcase Arizona marketplace to prospective users. We’ll showcase IO data centers and Digital Realty Trust and others that are in this region with the goal of inducing these tenants to come and utilize colocation space and drive new investment and job creation at the same time. Proximity to California has made it convenient for companies with corporate headquarters on the West Coast to

locate their data centers here. “It encourages them to visit and to learn more about the operating environment,” Camacho says. “Then our goal is to talk further with them about future operational expansion. It could be back office, IT, or technology centers. Data centers and data storage are generally their first foray into evaluating this market on the office side. “Once you become a nerve center where companies store data, then you start seeing a lot of these colocation tenants that are in these major facilities evaluating opportunities for back office expansion which generally comes with more job creation,” Camacho says. CBRE reports a high quality of life and low cost of living have encouraged back shop operations for companies such as Wells Fargo, American Express, PayPal, Yelp and others to locate in Arizona. “Companies tend to aggregate around each other,” Zylstra says. “At some point you get to a critical mass that people recognize and they want to be affiliated with it, connected to it. “The recent Apple announcement is a watershed moment for us,” Zylstra says, referring to Apple’s plans to locate a data

Geo-stability is an important factor when deciding a data center’s location. Arizona is free of natural disasters, making it an appealing locale. center in Mesa. “Apple is the most innovative company on Earth today. It’s the most successful company on Earth. When that kind of company makes a commitment here in Arizona it suggests that we have come into our own. I believe it is an important milestone in becoming known for technology.” As the technology sector continues to grow, it is important to attract quality talent, he says.“ The greater the reputation the easier it is to attract and retain talent and that’s your competitive asset in a digital economy,” he says. Drawing in talent is important, Camacho agrees, but he also says it is important to provide a continuing pipeline of trained talent in IT and technical services through Arizona’s local educational system. “That’s what is going to make this industry successful,” Camacho says. “We can see that pipeline coming through our Maricopa Community Colleges and the four-year systems that can meet the demand. “Even though they are not large employers, there’s a very significant level of indirect technology job creation associated with these data centers. On average, you can provide anywhere from two to four indirect jobs for each of the jobs created within the companies themselves.”

Chris Camacho

Steven G. Zylstra

Anthony Wanger AB | May-June 2015

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The connection between medicine and rocket science Andrew Goldstein was a rocket scientist before he was a doctor. “I was working as an aerospace engineer in Southern California and there was a lot of attention around the Jarvik 7 artificial heart,” said the thoracic surgeon at Cancer Treatment Centers of America. “I read a story about a bioengineer that went to medical school and designed this artificial heart.” The heart was a hydraulic device and Goldstein’s background was in hydraulics. “The console that drove that artificial heart was this bulky thing the size of a refrigerator,” Goldstein recalled. “I said to my friend, ‘I bet I could design an artificial heart better than that. I’m going to design it and go to medical school so I can be surgeon who implants the heart.’” Goldstein said the idea would have just passed as a joke among friends, but a couple days later, the friend called and asked Goldstein if he was really going to become a heart surgeon. “It really was an epiphany that hit me like a bolt,” Goldstein said. “Something really struck me about having the ability to use my engineering background in medicine and using it in a way that has a human touch, which was missing with engineering.” Goldstein went back to school at Brown University and later became involved in a patent for an improved artificial heart, which he implanted into a patient before performing the heart transplant a few days later. “This is one of those rare occasions where you develop a drive and a passion for something and are able to see it through to the end,” Goldstein said. / / / / / / / / / / / / / / / / / / / / / / / / / /

The impact of clinical trials in Arizona

Without clinical trials, new medicines could not be approved and made available to the patients who need them. However, beyond the healthcare benefits that biopharmaceutical research and development brings, clinical trials bring a significant economic impact to Arizona. Based on 2013 numbers, here is a look at the impact of clinical trials in Arizona, according to From Hope to Cures Arizona:

1,311

Number of active clinical trials In Arizona 72

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29,291 Number of clinical trial participants

$237.2

$618.4

The amount invested in clinical trials

Total economic impact of clinical trial investments

million

Impact players • In 10 years, Drs. David J. Jacofsky, John A. Brown and Mark D. Campbell have grown The CORE Institute from one office in Sun City West into an innovative orthopedic and neurological practice with 700 employees in two states and 26 facilities. • Championed by Banner Alzheimer’s Institute, the Alzheimer’s Prevention Registry has enrolled more than 100,000th volunteers interested in participating in studies aimed at preventing the disease. • Tucson-based SynCardia Systems received approval from the FDA to conduct a clinical study of the company’s temporary Total Artificial Heart for use as a long-term therapy. • Phoenix Children’s Hospital will use a $200,000 grant from the James M. Cox Foundation to support the hospital’s “Connected Patient Project,” which provides customized patient care information on tablets. • Blue Cross Blue Shield of Arizona recognized Banner University Medical Center with a Blue Distinction Center designation for delivering quality transplant care. • VisionGate received financial backing from Dignity Health in Arizona for development of a revolutionary, noninvasive test for the early detection of lung cancer, the world’s deadliest cancer. • Researchers from Arizona State University’s Biodesign Institute have identified three promising biological signals that could help detect ovarian cancer before patients display any symptoms. ASU’s new study is the first use of high density microarray technology that uses a sample of the patient’s blood to identify biomarkers for ovarian cancer.

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Arizona’s bioscience industry impacts lives while building a healthy business sector

nnovation is doing something in a new way to make life better and across Arizona’s bioscience industry, researchers, industry partners, and healthcare professionals are innovating the latest advancements in the life changing therapies, medical Joan Koerber-Walker devices, and services that are Bioscience providing a higher quality of life for patients here in Arizona and around the world. Companies that discover, develop and deliver life changing innovations have an added benefit. As they grow, they stimulate our economy as they support the local healthcare delivery system and also export technology nationally and globally. In addition to creating high quality, high paying jobs. With an average wage of $85,571, bioscience jobs are some of best in the state and pay well above the state’s average private sector wage of $45, 234. According to the Battelle/BIO State Biosciences Jobs, Investments and Innovation 2014 report, Arizona’s bioscience industry continues to experience rapid job growth, increasing employment by nearly 22 percent since 2007, a period which includes the deep national recession and overall declines for the state’s private sector. State bioscience firms employed 23,545 in nearly 1,300 establishments in 2012. With a direct to indirect employment multiplier of 4.1, the total jobs impact is approaching 100,000. State academic institutions accounted for $409 million in bioscience-related R&D expenditures in 2012 and NIH funding to these and other non-academic institutions totaled $182 million in 2013. Arizona inventors have had more than 1,400 patents issued in bioscience-related classes since 2009 and they span a variety of areas in medical devices and drugs and pharmaceuticals.

Arizona life science innovators deliver To make an impact, new discoveries must be developed and delivered through the best clinical partners to the 74

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lood of the new economy patients. Clinical innovations developed here in Arizona and in other parts of the world are delivered daily by caring and highly skilled healthcare professionals across the state and new therapies and treatment protocols are currently being tested for safety and effectiveness in over 1300 FDA approved clinical trials. By finding new ways to diagnose, manage and treat disease, biomedical innovation is the key to making a difference in the lives of our people and in reducing the cost to keep them healthy. For example, Diabetes is a group of diseases characterized by high blood glucose, or blood sugar, caused when the body either does not produce enough insulin or is unable to use insulin in an effective way. When not controlled, the high level of glucose can lead to serious health complications, including death. Arizona innovators at Medtronic Tempe Campus helped to revolutionize the ways in which people are screened for and live with diabetes. These advanced diabetes technologies don’t just improve quality of life; they also help to cut overall health care costs. Many of the costly complications associated with diabetes—high blood pressure, kidney failure or dialysis, heart attacks, and hospitalization requirements, to name a few—can be prevented or delayed with regular diagnostic testing and better management of glucose control. New medical device innovations, like a fully-functioning artificial pancreas—a technology that links an insulin pump with a continuous glucose monitor to provide automatic, realtime monitoring of glucose levels and delivery of insulin—can make a huge impact. The potential savings to Medicare thanks to artificial pancreas technology is estimated at $1.9 billion over 25 years, according to a study carried out on behalf of the Juvenile Diabetes Research Foundation (JDRF). Arizona’s life science innovators are globally connected. We work hard here at home, but it does not stop there. Arizona biomedical innovations are making an impact globally with life changing innovations from our state being both tested and delivered across North America, Central America, South America, Africa, Asia and Europe.

Strategic investments drive growth TGen was founded through public-private partnerships in 2002 to leverage new scientific discoveries from the mapping of the human genome and accelerated the state into the era of

genomics and personalized medicine. In 2003, Arizona made a $500 million investment in research infrastructure and it paid off 7:1. Facilities that were born from that investment, including ASU Biodesign, UA BIO5, the NAU Applied Research and Development Building, and others are places in Arizona where life changing innovation is discovered, developed and delivered. Additional public-private investments launched the Critical Path Institute (C-Path) in 2005. The City of Phoenix has been a strong partner in the birth of the Phoenix Biomedical Campus and its growth to include both the UA College of Medicine Phoenix and recently the Arizona Cancer Center’s expansion into Phoenix in partnership with Dignity Health. Scottsdale’s Cure Corridor is thriving and a home to both HonorHealth and the Mayo Clinic. To the east, Banner MD Anderson now calls Gilbert home while in the west, Cancer Treatment Centers of America is combining traditional therapies with the latest innovations to bring new hope to cancer patients. In the north, you will find Arizona’s largest medical device employer, W.L. Gore and Associates. In the south, global leaders Cord Blood Registry, SynCardia Systems, Inc., Sanofi and Ventana, a member of the Roche Group, are delivering life changing innovations worldwide. Today, the work of Arizona bioscience innovators has contributed to saving the lives of patients suffering from the Ebola virus, delivered new diagnostics and therapies for cancer patients, created medical devices that help patients manage chronic diseases including heart disease and diabetes, and C-Path is accelerating the path to a healthier world by leading global consortia to address worldwide solutions to diseases including tuberculosis, asthma, Alzheimer’s disease, lung cancer and many more. To be globally competitive, Arizona must to continue to commit to the resources it takes to compete. This requires Arizona citizens, working with our elected leaders to ensure we keep making “life” better while building a stronger economy within our state today and tomorrow. When we all work together to make this happen, we all benefit. Joan Koerber-Walker is president and CEO of the Arizona Bioindustry Association and chairman of the AdvaMed State Medical Technology Alliance in Washington, D.C. AB | May-June 2015

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

Group forms an energy of its own

Michelle De Blasi, an environmental and energy law partner with the law firm of Gammage & Burnham, and Chris Davey, president of EnviroMission, continue to make an enormous impact on Arizona’s energy landscape. The two co-chair the Arizona Energy Consortium, which in April announced the formation of its own 501 (c)(3) nonprofit organization. Before venturing off on its own, the AEC operated under the umbrella of the Arizona Technology Council. “In an ever-changing energy market, the AEC will continue with its collaboration with key stakeholders to develop the Arizona Energy Roadmap and Solar Strategic Plan,” said Davey, who is developing a cutting-edge utility scale solar energy project in Arizona. “We will continue working with others to build on the foundations of a long-term, statewide plan for the energy industry to ensure it is a key economic driver for the state and the region as a whole.” Comprised of more than 200 members, the AEC is the only allencompassing energy group in Arizona.

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Arizona shines bright with clean-energy jobs

Arizona had the fifth-highest number of clean-energy jobs posted in the nation in 2014, according to a report by Environmental Entrepreneurs. The report, which does not track actual hiring but the number of renewableenergy job announcements instead, said Arizona companies announced plans to hire 3,402 last year, out of nearly 47,000 nationwide. Almost all of the jobs estimated for Arizona were solar energy related, with most of those coming from the planned Solar Wind Energy Tower in San Luis, which could create 2,350 jobs, according to its backers.

AB | May-June 2015

Impact players • SRP Senior Engineer Kyle Cormier and Joe Nowaczyk, former director of electronic systems, received the Electric Power Research Institute Technology Transfer Award for enabling technologies to make grid modernization more reliable for SRP customers and the overall power industry into the future. • Banner Health’s Cardon Children’s Medical Center implemented lowcost energy-efficiency measures that resulted in savings of more than 2 million kWh in the first year. Banner also updated several buildings, resulting in 1.5 million kWh of savings. The combined energy savings are equivalent to powering more than 190 homes for a year. • Through APS’ Solar for Schools and Government program, Harmon Solar has completed photovoltaic solar panel arrays for schools in Cottonwood, Douglas, Oak Creek, Prescott Valley and more Arizona cities. The savings in energy consumption is equivalent to removing 5,400 cars from the road. • Tempe-based First Solar announced that Apple has committed $848 million for clean energy from First Solar’s California Flats Solar Project in Monterey County, Calif. It is the largest agreement in the industry to provide clean energy to a commercial end-user.

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Green gen

PHOTO BY SHAVON ROSE, AZ BIG MEDIA

DON HAWLEY: “I’m a huge believer in a leader being able to marry their skill sets with younger, brighter professionals,” said the CEO of Innovative Green Technologies. “There is magic that occurs in that mentor-menthe relationship that will help every company.” 78

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nes

Hawley brings Silicon Valley experience to Arizona technology sector

on Hawley is a lifelong entrepreneur from Silicon Valley who went to school at the University of California, Berkeley and started several technologybased companies in the San Francisco Bay area until about nine years ago. Today, Hawley is CEO of Scottsdale-based Innovative Green Technologies, which is working to reduce harmful emissions and consumption for diesel engines. Az Business: What is Arizona doing right

to foster the growth of companies like Innovative Green Technologies?

Don Hawley: Arizona is infinitely more business friendly than other states. Favorable tax rates make is less costly to do business in Arizona compared with California, which is attractive to newer companies that have to watch their pennies. Arizona is also blessed with Arizona State university and the University of Arizona, which supply a constant stream of new grads. When you have high-quality young talent, that is a great resource. AB: Is there a flip side to that? Are there

things other states are doing better?

DH: California and Silicon Valley has a huge amount of venture capital available to technology companies. You have a very concentrated place to go to raise capital, which is very important for early-stage companies. They are used to that environment in California. In Arizona, that is more difficult. There is not a well-established venture community here. The angel community is not as active as some would like. The capital raised is more difficult in Arizona, but it’s not that difficult for seasoned executives to do their capital raises in California and bring it back to Arizona. AB: Beyond capital, what else can

Arizona do to fuel the tech sector?

DH: There is a group that I am a part of

called Valley Advisory Group. It’s a group of generally retired CEOs who made themselves available to assist Arizona-based companies with not so much economic capital, but with experience capital and networking capital. Arizona is uniquely qualified because there is a huge number of retired executives here. When I participated, we had about 30 retired executives or CEOs who want to give back to the community. That is a humungous asset that is not as well tapped as it could be in Arizona. If I had a magic wand, I would be encouraging more collaboration between groups like Valley Advisory Group and start-ups. The knowledge capital that resides here in Arizona is extraordinary and hasn’t been utilized like it should be. AB: Is Arizona doing enough legislatively

to help companies like your company succeed?

DH: Probably not. One of the things I was very encouraged by was Arizona’s R&D credit opportunity. We participated in it last year, learned that it wasn’t really what it was cracked up to be, and the company didn’t benefit from it. The company is an LLC and the benefit passed through to the owners, who are weather people and don’t need the benefit. The company needs the benefit. The Arizona Legislature had proper intent when creating the benefit, but poor execution. AB: What tech industries have the

greatest potential for growth in Arizona?

DH: Because of the hub of positive activity around the downtown medical school, biotech is a big opportunity for Arizona. The other area with potential for growth is the energy area in which we are participating, which I call transitional technologies in the green area. The focus isn’t on renewable energy, because its economic time hasn’t come yet, but finding ways to make fossil fuels more efficient. I can see that really taking hold in Arizona.

AB | May-June 2015

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

Impact players • Arizona State University has been selected by NASA to design, deliver and oversee the Mastcam-Z imaging investigation, a pair of color panoramic zoom cameras, on the next rover mission to be launched to the surface of Mars in 2020.

PHOTO BY SHAVON ROSE, AZ BIG MEDIA

LEE BENSON: The CEO of Able Engineering and Able Aerospace operates his companies out of a state-of-the art, 200,000-square-foot facility at Phoenix-Mesa Gateway Airport.

Sky’s the limit

Sequestration hasn’t hurt every Arizona aerospace company. “For the last 12 years, we are growing at better than a 20 percent compounded annual growth rate,” said Lee Benson, CEO of Able Engineering and Able Aerospace. “This year, we could grow as much as 35 percent.” Benson has turned Able in an Arizona success story. Since buying the business that would become Able Group of Companies in 1993, Benson has taken the company from $30,000 in sales in 1994 to a projected $100 million in sales this year. He has also gone from three employees in 1993 to more than 450 today and is expecting to employ more than 1,000 by 2020. Able includes two main divisions — Able Engineering & Component Services and Able Aerospace. Able Engineering & Component Services provides component repair, overhaul and approved replacement parts solutions for rotorcraft and fixed-wing aircraft. Able Aerospace develops and manages Able’s FAA approved replacement parts inventory. This division has built a global reputation for its engineering and development of lower cost and typically longer lasting replacement parts solutions. “We intentionally designed our company to be recession proof,” Benson said. “We knew we needed a lot of customers to do that and we now have 1,000 customers in 60 countries.”

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Using drones to review insurance claims

The Federal Aviation Administration approved USAA’s request to test how unmanned aircraft systems, also known as drones, could help speed review of insurance claims from its members following natural disasters. USAA is one of the first insurers to be granted the approval for such testing. “We’re proud to be among the first insurers approved to test this technology,” said Alan Krapf, president, USAA Property and Casualty Insurance Group. “It’s our responsibility to explore every option to improve our members’ experience.” USAA will work with PrecisionHawk to efficiently research and develop best practices, safety and privacy protocols and procedures as it further develops plans for operational use. 80

AB | May-June 2015

• The Arizona Division of Occupational Safety and Health Consultation Department recently acknowledged Honeywell Aerospace’s Deer Valley location as a “STAR Site,” for demonstrating exemplary and comprehensive, safety and health management systems. • Tucson-based World View Enterprises, a 2014 Arizona Innovation Challenge grant recipient, develops and manufactures high-altitude balloon technology that provides trips to near space for tourism, R&D and industry uses. World View’s unmanned balloons carry payloads for communications, surveillance, research and for launching microsatellites. • For the third consecutive year, Mesa Airlines’ Maintenance and Engineering Department has been awarded the Federal Aviation Administration’s prestigious Employer’s Diamond Award of Excellence. • In April, Sen. John McCain recognized the contributions of Raytheon’s Tucsonbased missile defense experts, honoring them for programs that protect the United States, deployed forces and allies abroad from the growing threat of shortto long-range ballistic missile attacks.

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HEALTHCARE / ENERGY / AEROSPACE / TECHNOLOGY

Life after sequestration Arizona aerospace companies capitalize on stateâ&#x20AC;&#x2122;s advantages to overcome defense cuts

AB | May-June 2015

s budget-balancing attempts go, sequestration can have Steven G. Zylstra Technology an especially chilling effect. By its very design, it was supposed to be so bitter a pill to swallow that it would practically force legislative cooperation on budget reform. Who could rationally favor across-the-board, automatic budget cuts over strategic budget reduction? Because compromise couldnâ&#x20AC;&#x2122;t be reached in Washington, Arizona now lives in a reality of inelegant cuts to defense spending, where successful programs and those with peacetime merit are both impacted. The math is simple. When there is a lowered defense budget, companies that fulfill military contracts have less business, which means secondary and tertiary suppliers feel the impact, too. Thatâ&#x20AC;&#x2122;s sobering news for Arizona, where almost 80 percent of military spending is in the form of contracts. More than 95,000 jobs in the state are supported by that spending, according to findings from the National Conference of State Legislatures. Arizona defense spending reached its peak in 2012, when the state fulfilled $13 billion in federal defense contracts. Post sequestration, that spending stands at $8 billion, down 38 percent. The hard truth is that billions of dollars less are entering the Arizona economy. While it is an especially blunt instrument, sequestration is merely one specific cause of reduced defense spending. Other sources contribute, too, like the drawdown of U.S. operations

in Iraq and Afghanistan. With fewer soldiers stationed abroad, less spending on logistical support is required. In times like this, it is important to remember our state does not have its military bases as a matter of historical accident. The bases were opened in Arizona because it makes a wonderful natural laboratory for technological testing, training and innovation. Four of our seven bases specialize in aviation training. With 300 clear days every year, plus open desert suitable for propellant and collision testing, the Grand Canyon state is especially suited for the training. Such virtues serve commercial aviation just as well as they do military aviation, which means companies with diversified contracts will weather this reduction in military spending. Arizona companies can continue to meet the avionics needs of the private sector and develop aeronautic innovations that keep airlines competitive. The growing field of private space tourism represents an emerging opportunity for Arizona to shine. Arizona is a leader in unmanned drone technology, a growing field that remains in military demand even after troop withdrawals. While there is general war-weariness after two decade long overseas conflicts, a Washington Post/ABC News poll has found that two out of three Americans favor the use of airstrikes against enemies abroad. With the worldâ&#x20AC;&#x2122;s largest unmanned aerial systems training program at Fort Huachuca, Arizona is positioned to benefit from post-war changes in defense priorities. Yes, sequestration is a hard pill to swallow for the organizations that fulfill military contracts but business has always been defined by evolving to meet demand. Companies that address needs in the private sector as well as serve realigning military interests can continue to thrive post sequestration, thanks in part to the many aerospace testing advantages provided by our state.

Steven G. Zylstra is president and CEO of the Arizona Technology Council. AB | May-June 2015

HEALTHCARE / ENERGY / AEROSPACE / TECHNOLOGY

Software industry powers Arizona’s economy

According to findings from the Greater Phoenix Economic Council’s Market Intelligence program, the Valley’s Information and Communication Technology (ICT) sector is is poised to grow by 14 percent in the next five years, 4.5 percent faster than the national average. The ICT sector represents the convergence of telecommunication and information technology. It has ushered a new era of next-generation computing and electronics, cloud computing and big data. The ICT sector is significant to the current and future Greater Phoenix economy, the report says. It represents a strategic opportunity to drive innovation and technology development for sustained economic growth. Here’s a look at the numbers: • Nearly 70,000 people are currently employed in ICT industries across more than 3,770 establishments in Metro Phoenix, contributing in excess of $11 billion to the Gross Regional Product in 2014. • ICT is projected to reach 76,000 jobs within the next five years in Metro Phoenix. • By sub-industry categories, custom computer programming services is the largest with more than 10,800 jobs and it is projected to add 4,410 jobs by 2019. • Other high growth ICT industries include computer systems design services, which will add 2,180 jobs, and data processing, hosting and related services, which will add 1,220 jobs by 2019.

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Providing power to students

Gilbert-based CampusLogic emerged victorious as the winner of Venture Madnes, a bracket-style pitch competition presented by Invest Southwest in partnership with the Arizona Commerce Authority. CampusLogic is a student financial aid self-service platform that gives students a simple, TurboTax-like way to apply for and receive financial aid. CampusLogic delivers a Software as a Service (SaaS) solution for colleges and universities, which decreases administrative costs, lowers security risks and dramatically improves the student experience. The company’s goal is to increase borrower understanding and simplify the financial aid process.

AB | May-June 2015

Impact players • The Anita Borg Institute named Scottsdale-based GoDaddy to its Top Companies for Women Technologists Leadership Index. • San-Francisco-based Beepi, which allows customers to buy and sell their car from the comfort of their home, chose Phoenix as its first expansion city outside of California. • The Department of Commerce said BioAccel and the Greater Phoenix Economic Council will receive a portion of the $10 million grant from its Regional Innovation Strategies program. • In a recent ranking by Bestcollegereviews.org, Northern Arizona State University was listed as the No. 1 online school of 2015. • Texas-based Cypress Growth Capital made its first Arizona investment at a Tempebased digital advertising consultant, Genius Monkey. The investment of $2 million was royalty-based. • Phoenix-based OrbHealth launched mobile applications for both patients and physicians to collect, disseminate and provide health data for both parties. • Phoenix Children’s Hospital will provide tablets geared with an educational-based mobile app to every patient bedside by this fall. • Avnet’s MaryAnn Miller was named among the National Diversity Council’s 2015 Top 50 Most Powerful Women in Technology.

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Not if, but when HEALTHCARE / ENERGY / AEROSPACE / TECHNOLOGY

Arizona businesses need to realize the risk of data breaches, experts say By MICHAEL GOSSIE

“It will never happen to us.”

That misperception puts businesses at risk for data breaches, experts say. “The most common mistake is assuming your company won’t be breached because you’re not a large, multi-national company similar to the ones whose breaches are covered by the national media,” says Ari Bai, shareholder at Polsinelli. “In reality, however, every company is a target. Hackers, be they individual vigilantes, criminal organizations or nation-states, look for any and all data, and often the most accessible is that in smaller companies. Plus, small companies make for good ‘practice’ for hackers. Thus, when a company ignores the risk and does not set forth the proper protocols for protection and response, it is essentially asking to be breached.” The 2015 Association of Corporate Counsel (ACC) Chief Legal Officers Survey revealed that one quarter of general counsel report their companies have been hit by data breaches. And according to the 2015 Cyberthreat Defense Report, more than seven in 10 respondents said their networks were breached in 2014, up from 62 percent in 2013. The average cost of a data breach in 2013 for companies in the Unites States was $5.85 million. The scariest part about the threat of a data breach is that experts agree that there is no way to completely protect a business from becoming the victim of a data breach. “Once we develop a way to protect ourselves from something, the hackers are already using a new technique,” Bai says. “This is

AB | May-June 2015

why preparation is so important. Liability for lack of preparation can financially devastate a company. You are going to get hacked — with preparation, you don’t have to lose lawsuits.”

Being prepared Like any potential business catastrophe, limit a business’ risk of becoming the victim of a data breach starts with preparedness, according to Paul Stoller, shareholder at Gallagher & Kennedy. “Every company should work with its legal professionals and IT staff to create and to implement a comprehensive data privacy and security plan, which will help to remove, or at least to reduce, the risk of many of the common causes of breach,” Stoller says. Leon B. Silver, office co-managing partner at Gordon & Rees, says all companies, no matter their size, need to adopt data security as a core business practice throughout the organization and not look at it as something that is taken care of by one department or by an outside vendor. “Policies on mobile devices, passwords and encryption are just part of an overall culture of data security awareness,” Silver says. “But be aware, a breach can happen.” Heather Buchta, partner at Quarles & Brady says business leaders need to engage in some internal due diligence and ask themselves these questions: • What internal policies are in place to protect data? • Is there a policy against removing devices from the business location? • Is there a policy to encrypt data? • Even more basic, what kind of data does a company have?

Advice from experts Here is what Valley legal experts advise businesses to do to lower their risk of a data breach:

Ari Bai, shareholder; and Nick Verderame, associate, Polsinelli: “Start preparing now. Bring in technical and legal help to assess your data and risk levels, create technical protections, implement company procedures to protect against leaks, educate your employees and leadership, organize annual ‘fire drill’ tests and prepare a reaction and notification procedure.”

» Heather Buchta, partner, Quarles & Brady: “Know your business. Know what data you have. Have an incident response plan in place in advance to facilitate the handling of an event when it occurs. Note I said, ‘when it occurs,’ not ‘if it occurs.’”

Ari Bai

Heather Buchta

» Leon B. Silver, office co-managing partner, Gordon & Rees: “Begin by assessing risk, including the availability of special ‘cyber risk’ insurance, which is not just for hacking and may provide coverage for both investigation and response costs, as well as defense and/or indemnity for third-party claims.”

» Paul Stoller, shareholder, Gallagher & Kennedy: “The best practice for a business is to create and maintain a comprehensive data privacy and security plan. That begins with an audit of the business’s data and the development of policies and procedures to manage its confidential information. Then, it is essential to train employees on both the policies and procedure and the potential threats to the data’s security.”

Leon B. Silver

“Risk of a breach increases as the volume of data a company has increases and oftentimes the data wasn’t even used by the business,” Buchta says, “which is creating an increased risk for no business purpose.” Despite a company’s best efforts to lower its risk of a data breach, Buchta says today’s hackers are getting more sophisticated and businesses always have the added risk of employee error. “The risk really lies in what was done ahead of time to try and prevent and breach and how the incident is handled afterward,” she says.

After the breach While a business can be proactive in taking the appropriate steps to minimize risk and being well equipped to handle a loss or theft if data or information, there are no measures that provide a guarantee of security, Silver says. “In fact, virtually every mid- to large-size company has already likely been breached, but the extent is either not known, or is not significant,” Silver says. “A big source of loss continues to be human error. That, coupled with continually evolving technology and more sophisticated theft/hacking measures equates to an ongoing need to stay ahead of the curve and simply arm yourself the best you can by adhering to and enforcing strict privacy policies following a thorough risk assessment.”

Paul Stoller

Nick Verderame

So what should you do if you’ve taken all the proper steps to reduce your risk of a data breach and your businesses is still victimized? “The first thing is always to identify the source and to fix the issue that caused the breach so that there is not any further loss or theft of data,” Stoller says. “After that, the business needs to work with its IT professionals to investigate what caused the leak, to identify those persons who may be affected and to preserve evidence of what happened.” Stella says it’s also imperative to work with legal professionals to determine a business’ legal obligations after a breach, including notifications to affected persons and government agencies. “Don’t delay in investigating and don’t delay in calling in the experts,” Buchta says. “Businesses should have an incident response plan and that plan should identify the key players to investigate and manage a breach — legal counsel, IT forensics, operations/HR, public relations and the executive team.” Because experts say a data breach is almost inevitable, it’s crucial for a business to develop and enforce sound privacy policies, including a response plan should a breach or loss occur, Silver says. “Such policies will also need to evolve over time as technology continues to improve,” he says. “The bottom line is to expect the unexpected, think ahead, keep thinking ahead, and do your best to prepare.”

AB | May-June 2015

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