BUILDING GREAT TUCSON LEGACIES The Kivel family [Lee (left) and Foster] with Amos and Long are real estate legends PAGE 4
Your Weekly Business Journal for the Tucson Metro Area WWW.INSIDETUCSONBUSINESS.COM • FEBRUARY 24, 2012 • VOL. 21, NO. 39 • $1
The great debt debate Maricopa has highest per capita liabilities Page 4
Arizona filmmakers hope for Legislative boost | PAGE 11 Go it alone Personal bankruptcies opt out of legal help Page 6
Clearance sale
Pasidg Productions
Distressed home sales dominated 2011 market Page 23
22nd and Park site being developed as luxury student housing By Roger Yohem Inside Tucson Business A 183-unit luxury cottage-style student housing complex to be called The Retreat is being developed on a 22-acre site just to the southeast corner of South Park Avenue and East 22nd Street. The project is a joint venture by national student housing specialists Landmark Properties, Athens, Ga., and Harrison Street Real Estate Capital, Chicago. Capable of housing 774 students, it’s targeted to be open in time for the fall 2013 semester at the University of Arizona. Landmark Properties special-
izes in the development of off-campus student housing and has done about 15 other similar projects across the country. Collegiate Construction, an affiliate of Landmark Properties, is the general contractor and construction financing is from Wells Fargo. Land preparation and preliminary construction is already underway. Local commercial real estate broker John Ash, of CBRE, was retained by Landmark Properties to assemble land for the complex. He negotiated the purchase of 31 public and privately owned parcels on behalf of the developers. There were
15 different property sellers and CBRE officials would not disclose the total value of the acquisitions. Assembling the land “was a challenge,” a process that took 18 months to complete, according to Ash. Located just over a mile south of the UA campus, The Retreat will offer cottages in sizes from two to six bedrooms. It will be Landmark’s first project to include a six bedroom/six bath student cottage design. Sixteen different floor plans will be offered, featuring large living rooms, gourmet kitchens, large bedrooms with walk-in closets, built-in bookshelves, outdoor decks and
other higher-end features that are not usually found in standard university housing projects, said CBRE communications manager Katherine Haug. According to Landmark, The Retreat also will include a large pool, a 10,000 square-foot clubhouse, and a spa and fitness center for the exclusive use of its student-residents. The developer’s plans also include a computer lab. Pre-leasing is scheduled to begin this summer.
Contact reporter Roger Yohem at ryohem@azbiz.com or (520) 295-4254.
2 FEBRUARY 24, 2012
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InsideTucsonBusiness.com
FEBRUARY 24, 2012
3
NEWS
State lawmakers take aim at Pima County over bond debt By Patrick McNamara Inside Tucson Business
GOVERNMENT BOND DEBT
State lawmakers have once again cast their eyes south, this time with Pima County’s debt in their gaze. Rep. Terri Proud, R-Tucson, has sponsored a bill that would remake how Pima County administers voter-approved bonds. Proponents of the bill (HB 2656) have argued that Pima County has a checkered history with bond spending that mandates the increased oversight. In a guest editorial piece that recently that ran on some online opinion sites, Proud took specific aim at Pima County Administrator Chuck Huckelberry. “Since he’s (Huckelberry) repeatedly taken bond money and spent it on projects other than what voters intended, it’s only fair to have those who he’s taking it from be fairly represented by the people they have elected,” Proud wrote. The bill would not apply to Arizona’s 14 other counties. She and other proponents also have criticized the level of Pima County’s bond debt. “Pima County alone has almost $1.5 billion in bond debt, more than two-and-a-half times all the other counties in Arizona — combined,” Proud wrote. The $1.5 billion figure, which others also have cited, appears inaccurate. Pima County carries $997.8 million in bond debt, according to an Arizona Department of Revenue report of government bond indebtedness published in late 2011. Other counties have a combined bond debt of $227.9 million. Even that clarification, however, doesn’t tell the whole story of municipal debt in Arizona. While it’s true that Pima County has considerably more debt than other counties, overall bond indebtedness in Pima pales in
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Total principal-only debt by county, including municipalities, schools and special districts. Listed in order of debt per capita
County
Total Bond Debt (as of June 30, 2011)
Maricopa Pima Yuma Mohave Yavapai Santa Cruz Pinal Coconino Navajo Gila Graham La Paz Cochise Apache Greenlee
Total
$18,550,723,306 $3,489,869,737 $609,648,313 $584,869,357 $548,926,256 $110,250,494 $790,258,606 $240,457,189 $131,129,382 $57,210,337 $30,663,754 $16,379,723 $100,300,820 $35,887,539 $3,414,450 $25,299,989,263
Population (2010 Census)
Per capita Debt
3,817,117 980,263 195,751 200,186 211,033 47,420 375,770 134,421 107,449 53,597 37,220 20,489 131,346 71,518 8,437
$4,859.88 $3,560.14 $3,114.41 $2,921.63 $2,601.14 $2,324.98 $2,103.04 $1,788.84 $1,220.39 $1,067.42 $823.85 $799.44 $763.64 $501.80 $404.70
Source: Arizona Department of Revenue
comparison to Maricopa County. Taken together, cities, towns, school districts, special districts and Pima County, have a total outstanding bond debt of $3.4 billion. Maricopa County governments together carry more than $18.5 billion in bond debt, according to the Arizona Department of Revenue. By way of comparison, the per capita governmental debt load in Pima County stands at $3,560. The per-capita debt in Maricopa stands at $4,859, the most in the state. Proud did not return calls requesting comment. Part of the reason Pima County carries a heavier debt load lies in the demographic peculiarities of the region. More than a third of all residents of Pima County, 350,000 people, live in unincorporated areas. Because of the large unincorporated population, many of whom live in urban areas
in the Tucson metro region, Pima County provides many of the governmental services. In southern Arizona, Pima County has taken the lead on the majority of bond-funded infrastructure projects. Since 1974, voters have approved 11 bond issues giving Pima County authorization to borrow billions of dollars to fund transportation improvements, build bridges, construct libraries, create parks and establish new sheriff ’s department substations. The legislation would require the creation of a regional bond accountability committee, whose membership would be made up of appointees from each incorporated city and town in the county. Tucson, Marana, Oro Valley, Sahuarita and Pima County all would have one member on
SEE BOND DEBT PAGE 7
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Caterpillar picks Georgia for new production plant Caterpillar Inc. has selected a site near Athens, Ga., as the location for a new production facility. The state-of-the-art, 1 million square-foot facility is expected to directly employ 1,400 people once it is fully operational. Caterpillar announced last year it was looking for a North American location for a plant to replace one in Japan. That prompted speculation the company could consider the Tucson region because it already has a training and test facility near Green Valley. In its Feb. 17 announcement, Caterpillar says it will be spend about $200 million to open the Georgia facility. According to the Atlanta Business Chronicle, Caterpillar is eligible for up to $77.7 million in state and local incentives for deciding to build the manufacturing plant in Georgia. That includes $45 million in state job tax credits and project development grants and up to $32.7 million local economic development incentives. The local incentives include county government buying the privately owned site for $9.5 million then over time transferring its ownership to Caterpillar. Caterpillar said it will break ground next month and hopes to have the plant start production late in 2013.
Part of southside center faces foreclosure auction A portion of Santa Cruz Plaza, a 260,000 square-foot retail center at 3660 S. 16th Ave., has fallen into default and noticed for a foreclosure auction in May. The seven-acre portion that is in default includes a large vacant retail store and a section currently housing a Desert Sports & Fitness location. Not included in the foreclosure are other parcels in the center including a Fry’s Food Store, VF Factory Outlet and Wells Fargo Bank. The section facing foreclosure is part of a $265.7 million portfolio of commercial properties throughout Arizona that have been noticed for a trustee’s sale. The other properties are in Chandler, Mesa and Phoenix, according to public records. The owner of Santa Cruz Plaza is listed as DDR MDT MV Tucson LLC, Beachwood, Ohio. It is an affiliate of Marylandbased 2005-C4 DMM Portfolio Properties LLC, that is list as the beneficiary.
EDITION INDEX Public Notices People in Action Arts and Culture Meals and Entertainment Lists Profile Calendar
6 7 8 8 10 11 12
Inside Media Briefs Finance Real Estate & Construction Biz Buzz Editorial Classifieds
14 15 22 23 24 24 27
4 FEBRUARY 24, 2012
INSIDE TUCSON BUSINESS
NEWS The Tucson office for commercial real estate company Grubb & Ellis sees a positive future as it prepares to move into new offices, even as the national company this week filed for Chapter 11 bankruptcy reorganization. The reorganization plan includes an agreement for BGC Partners Inc., a New York-based broker of financial products, to acquire Grubb & Ellis out of bankruptcy with a $30 million line of credit plus a $4.8 million loan. “This is a big-time transaction,” said Bob Davis, senior vice president of the Tucson office. “We are thrilled.” The Tucson office has 15 employees who are preparing to move to new office space at 3709 N. Campbell Ave., Suite 135. Currently, the Grubb & Ellis office is at 3333 E. Speedway. The company filed for bankruptcy reorganization Monday in the face of $30 million in debt that’s coming due March 1. In the filing Grubb & Ellis, based in Santa Ana, Calif., said its financial situation was created by the loss of its largest property management contract, a merger that created $10 million in losses last year and the slow recovery of the economy. An attempt to sell the company last year outside of bankruptcy proved unsuccessful. The company listed $150 million in assets and $167 million in deb debt. Nationally, Grubb & Ellis manages 250 million square feet of property and completed about 12,000 sales and lease transactions in 2011.
Brewer signs tax breaks law for multi-state firms After Apollo Group, owner of the University of Phoenix, threatened to take jobs out of Arizona because Gov. Jan Brewer vetoed legislation last year giving it tax breaks, a similar measure got her signature this week. Brewer signed the law (SB 1046) Tuesday allowing Arizona businesses with operations in other states to choose from among different formulas to determine their tax liabilities. Besides Apollo Group, the new law could benefit other companies with significant operations in Arizona and other states, such as Cox Communications and some telecommunications companies. An analysis by the state’s Department of Revenue estimates the law will cost the state $3 million when it goes into effect in 2014 and $4.4 million when it is fully implemented in 2017. Brewer vetoed similar legislation last year citing the state’s budget deficit.
Legends of real estate: 3 old family businesses now run by third generation By Roger Yohem Inside Tucson Business Amos. Kivel. Long. Each family is a dynasty in the real estate business. By 1932, each had set up companies in Tucson. Over the years, these first-generation entrepreneurs became well-known throughout the community and have legacies that still thrive through their grandchildren. “These are three pioneer business families who shaped Tucson as real estate agents, builders and developers. Each company is now in the hands of their third-generation,” said George Larsen, owner of Larsen Baker. On Feb. 23, the Southern Arizona CCIM Chapter (Certified Commercial Investment Member) honored its “Legends of Real Estate” at Loews Ventana Canyon. Larsen co-hosted the tribute with Jim Marian, principal of Chapman Lindsey Commercial Real Estate. The Amos family has been involved in Tucson Realty & Trust Company since 1911. The Long Realty Company has roots back to 1926. And the Kivel family is best known as the developers of El Con and Park Place malls.
In 1933, the federal government ruled that banks could no longer own real estate companies. For $10,000, George bought half of TRT with a partner and owned it all by 1955. Over the years, the firm helped develop many Tucson landmarks, including Tucson Country Club, San Clemente Estates, Valley Bank Plaza, Catalina Foothills Estates and Colonia Solana. On the mortgage side, TRT did a $6 million deal with the Kivels to finance the El Con Shopping Center in 1960. When George died in 1976, his son
George “Buddy” Amos Jr. took over. Buddy served as president and Albert Gibson was board chairman. In 1981, Hank joined the company and became a director in 1986. In 1989, Buddy died and son Hank became the third George Amos to run Tucson Realty. In 1996, Hank bought out all remaining family members and became sole owner. Five years later, the residential division was sold to Long Realty’s corporate parent. “The most enduring thing about grandfather was that his word was everything,” said Hank.
Amos Family As Tucson Realty & Trust (TRT) marks its 100th anniversary, George “Hank” Amos III jokes that they have succeeded simply because “grandfather got lucky as one of the first families to come here.” In 1911, one year before Arizona became a state, three co-owners opened TRT in a converted adobe home downtown. At 17, George Amos Sr. was hired soon after to clean the office and spittoons. He advanced into rent collections and “led TRT into the insurance business. He sold the first automobile policy in Arizona in 1915,” said Hank. The origin of the company’s distinct red-target logo is an Arizona Territory legend. One of the owners was a big-time gambler who was gunned down in a card game. “That’s where our bulls-eye logo came from,” Hank said. “When Target stores came along, they disputed our logo. Look close, we have the real target: one dot, one circle.” After several mergers, the company was acquired by Consolidated National Bank in the late 1920s. By that time, George was the region’s leading insurance agent and a vice president.
George Howard photo
Grubb & Ellis seeks buy-out in bankruptcy
Amos brothers Phil (left) and Hank.
Kivel Family The Kivel family traces its Tucson roots to 1928, when Simon Kivel arrived for health reasons. By 1932, he had recovered enough to build Tucson’s first supermarket: The Market Spot at Speedway and Park Avenue. Soon after, younger brother Joseph joined the business. He ran the market’s liquor concession until the two brothers ventured into development. Simon developed the Catalina Shopping Center at Campbell and Grant. Then later with Joe, they developed El Rancho Center at 3360 E. Speedway. The brothers also owned and operated Korby’s Department Store at 3400 E. Speedway.
“At that time, Speedway and Country Club was out in the suburbs,” said Foster, Joe’s son. “I know Dad really would have appreciated this honor along with Simon.” In 1951, Simon, Joe and Gus Papanikolas purchased the old El Conquistador Hotel and land along East Broadway. The hotel was torn down, one of the city’s first redevelopment projects, and El Con Mall was built. Foster said they really didn’t want to raze the hotel but the consensus was that the site was an eyesore. When it opened in 1960, El Con Mall was a major shopping complex with department stores that heretofore had been downtown. In the early 1970s, Simon and Joe were developing Park Mall at 5850 E. Broadway, just three miles east of El Con Mall. CONTINUED ON NEXT PAGE
InsideTucsonBusiness.com
FEBRUARY 24, 2012
5
NEWS This Week’s son. Victor has since passed away. Joe’s two sons are Foster and Lee. Foster came aboard in the early 1980s and Lee in the early 1990s. Joe died in 1995. Lee became a rabbi and is semiretired. The family’s third generation is in
Good News
the hands of Al’s son Bob and Foster’s daughter Margaret. They are continuing the Kivel family tradition that has included the development of not only malls and shopping centers, but also restaurants, apartments and hotels.
TUSD win-back
George Howard photo
KIVEL FAMILY CONTINUED FROM PAGE 4 Simon died in 1974 and Park Mall was dedicated in 1975, leaving Joe as the sole owner. Simon’s three sons were Dan, Al and Victor, who continued their family’s real estate interests. Dan and Victor moved to Los Angeles while Al stayed in Tuc-
Kivel family, from left: Lee, Foster, Bob and Al.
Long Family
George Howard photo
Like the Amos and Kivel patriarchs, the Long family moved to Tucson in 1920 for health reasons. As a young man, Roy Long Sr. worked for Tucson Realty & Trust. In 1926, Roy started his own realty company from his home. He focused on selling land and homes on the “far eastside” around Grant Road and Tucson Boulevard. Among Roy’s many accomplishments, he helped establish Tucson’s first rodeo and combined some “suburban land” for Himmel Park at Speedway and Tucson Boulevard.
“In those early years, he was known around town as Mr. Acreage. To us, they were just Pop and Mimi,” said grandson Russell Long of his grandparents. Russell is a Long Realty third-generation executive. In the early 1950s, Roy’s sons Bob and Barrington (Barry) took over as he readied for retirement. In 1957, Barry expanded into insurance. As Barry neared retirement in 1980, he turned the company over to his sons Roy II, Russell and Steve. They added several experienced executives in Robert Piersol, Sam Woods, Lex Sears and Steve Quinlan. The company thrived and became Tucson’s dominant residential real estate firm. In 1999, Long Realty merged with Home-
Long family, from left: Steve, Russell and Roy.
Services of America, now part of Berkshire Hathaway. Rosey Koberlein is Long Companies current CEO. “My favorite story about my grandfather was in the late 1920s. He was driving east on Ft. Lowell, which was dirt, towards Craycroft when he saw two geese flying overhead and land in one of those artesian wells,” said Russell. “The only thing around was an old rundown adobe home.” Roy went to the house and the woman who answered did not speak English. Using awkward flapping arm and hand signals, and acting like a hunter, the two began to “communicate.” The woman smiled, disappeared inside and brought out a gun and two shells. With those two shells, Roy bagged two geese. He returned the gun and gave the woman one of the birds. She was very gracious, getting food from the odd-acting visitor. “He took the other goose home for dinner,” Russell laughed. Tucson Realty’s 100-year legacy was profiled in Inside Tucson Business on Dec. 23, 2011. Read it online at http://www. insidetucsonbusiness.com/news/profiles/ george-hank-amos-iii-embraces-the-legacy-of-his-grandfather/article_314ec7f22cd9-11e1-9757-0019bb2963f4.html Contact reporter Roger Yohem at ryohem@azbiz.com or (520) 295-4254.
Another positive sign for Tucson Unified School District: This month it received $1.6 million — the first of $10.2 million in federal funding commitments — that will be used to pay for telecommunications upgrades, some of which have already been installed. Due to a variety of problems, TUSD had not been able to qualify for the money since 2002. The money comes through a federal program called E-Rate, which is administered by the nonfor-profit Universal Service Administrative Company. In 2010 TUSD Chief Information Officer John Gay set out to win the E-Rate funding and those diligent efforts are now coming to fruition. This month’s payments will go toward reimbursing the district for technology upgrades done between 2007 and 2010. Future money will go toward paying for both upgrades that have already been done as well as future upgrades. Money for the E-Rate program comes from the Universal Service Fee charge consumers pay on their telephone bills.
The Tucson
INSIDER Insights and trends on developing and ongoing Tucson regional business news
Self-employed not big When it comes business, there are some who want us to believe the Tucson region is a hot-bed for the small business entrpreneurial spirit. By one gauge that’s not entirely the case. American Cities Business Journals runs a numbers-crunching division called On Numbers that has found 6.95 percent of the Tucson region’s workforce is made up of the self-employed. That’s just slightly above the national average of 6.5 percent, which equates to one out of every 15 workers. The highest percentage of self-employed people in Arizona are in Prescott where it’s 9.38 percent. The Phoenix metro was just 5.77 percent. Among the nation’s major metro areas, the San Francisco Bay Area had the highest rate at 9.3 percent. Virginia Beach-Norfolk, Va., had the lowest rate, 4.4 percent.
New MTCVB chief Insider doesn’t know names but is being told the search for a new CEO for the Metropolitan Tucson Convention and Visitors Bureau has resulted in two very strong finalist candidates. The biggest challenge for the board may be choosing between them. In either event, the board should have no difficulty meeting the timetable for naming a replacement for retiring Jonathan Walker.
6 FEBRUARY 24, 2012
INSIDE TUCSON BUSINESS
NEWS PUBLIC NOTICES Public notices of business bankruptcies, foreclosures and liens filed in Tucson or Pima County and selected filings in Phoenix. Addresses are Tucson unless otherwise noted.
BANKRUPTCIES Chapter 7 - Liquidation Luttrell’s Welding Inc., 436 W. Triboulet Lane, San Tan Valley. Principal: Robert J. Shayne Luttrell, president. Assets: $4,800.00. Liabilities: $11,453.00. Largest creditor: Chae Bank, San Antonio, Texas, $11,453.00. Case No. 12-02885 filed Feb. 17. Law firm: Dodge & Vega, Mesa
FORECLOSURE NOTICES No filings for business foreclosures.
LIENS Federal tax liens Diamond Groundskeeping LLC and Robert M. Brito, 17834 W. Husker Lane, Marana. Amount owed: $2,901.33. Cattletown Steak House and John R. Kocis, 3141 E. Drexel Road. Amount owed: $14,227.87. Steve’s Building & Repairs and Steven L. Graves Enterprises Inc., 4111 N. Flowing Wells Road, Unit 8101. Amount owed: $10,143.76. Dan Lewis Inc., 2455 N. Campbell Ave. Amount owed: $120,186.46. Casa Molina and Casa Molina Inc., 6225 E. Speedway. Amount owed: $11,166.84. Corpuz Holdings LLC, 1211 W. Calle Del Ensayador, Sahuarita. Amount owed: $11,289.96. KPI Inc., 5020 N. Gerhart Road. Amount owed: $66,842.01. Thai Family Restaurant LLC and Tangbai Woods, 9136 E. Valencia Road. Amount owed: $1,170.00. Radius Architects LLC and Robert Castle Gay, 8220 N. Rancho Catalina Ave., Oro Valley. Amount owed: $11,185.76. Expert Documents Inc., 12501 E. Chukut Trail. Amount owed: $10,065.11. All Seasons Desert Landscaping and OND Contractor Services LLC, 2977 E. Manzanita Ave. Amount owed: $12,994.66.
State liens (Liens of $1,000 or more filed by the Arizona Department of Revenue or Arizona Department of Economic Security.) J&J Signs LLC, 3746 E. 32nd St. Amount owed: $9,986.57. Senor Sanchez Inc., 8320 N. Thornydale Road, Suite 110. Amount owed: $11,520.40. Malek’s Cars & Trucks, 3641 E. Fort Lowell Road, Suite 1. Amount owed: $3,742.16.
Mechanic’s liens (Security interest liens of $1,000 or more filed by those who have supplied labor or materials for property improvements.)
Oracle Control Systems Inc. against Wilmot Apartments Limited Partnership. Amount owed: $10,000.00. Chester Zygmont against Z-3 Capital Management. Amount owed: $12,538.00. Winroc Southern Arizona Tucson Division against Park Mall LLC. Amount owed: $23,992.79. Catalina Drywall LLC against 119 E Toole Avenue LLC Attn: Ron Schwabe. Amount owed: $6,590.00.
Release of federal liens Grandma’s Attic and Yolanda C. Doran, 2788 N. Campbell Ave. ENT Inc., 11353 E. Chuckwagon Circle, Suite 102 Advanced Masonry LLC, 1860 W. Price St. Precision Engineering & Manufacturing and John K. Kaurmann, 815 W. Grant Road Hallmark Landscape & Design Inc., 7320 N. La Cholla Blvd. 154 202 Parra’s Restaurant LLC and Jerry Boss, 2680 E. Valencia Road, Suite 110 Professional Cleaning Supplies Inc., 3670 E. Speedway On A Roll LLC, 63 E. Congress St. Joel R. Steinfeld DMD, 6761 E. Tanque Verde Road Indigenous Solutions Inc., PO Box 91500, 85752 Southwest Polygraph Service Inc., 615 N. Swan Road UPS Store and BJB 2 Enterprises LLC, 5189 N. Via Doniella Sonoran Rectractables LLC, 8573 N. Crosswater Loop, Marana
More Arizonans are filing for bankruptcy without legal help By Patrick McNamara Inside Tucson Business As the national and local economies continue to drag along the bottom, bankruptcy filings continue to pile up. Overall bankruptcy filings in the United States have soared by nearly 100 percent over the last five years, according to a report from the Administrative Office of the U.S. Courts. At the same time, the report notes, pro se bankruptcy filings, those that individuals file without a lawyer, have grown 187 percent. “I think a lot of it has to do with costs,” said Eric S. Sparks, a Tucson-based bankruptcy attorney. Sparks said the average Chapter 7, the most common form of bankruptcy, can cost a person $2,500 or more. While not an overwhelming financial burden, for a person in an already dire financial situation the expense can make a difference. A Chapter 13 filing can cost a person considerably more, an average of $4,500, Sparks said. People with a steady source of income often file Chapter 13, which allows them to establish a debt repayment plan with creditors. Pro se filings in Arizona have more than tripled since 2007. In 2010, the number of such filings peaked with 8,726, up from 2,714 in 2007. Figures from 2011 show a slight dip in pro se filings, with 8,010 logged. Federal Bankruptcy Court in Arizona had one of the highest rates of pro se filings in the country, which made up more than 20 percent of all bankruptcy filings in 2011. Only the central and eastern districts of California had more pro se filings than Arizona. Sparks said people filing pro se potentially expose themselves to additional risks. “I’ve seen people lose their houses,” he said. “It’s a complicated process. It’s a foreign language — like the tax code.” Victoria King, an Arizona certified legal document preparer, said many people filing pro se don’t have the background or knowledge to complete the process correctly. They can end up with a judge rejecting their paper work or mistakenly not ridding themselves of all creditors. “Even smart people can make grandiose mistakes,” King said. Certified document preparers like
BANKRUPTCY FILINGS Arizona Total
Pro se
% Pro se
2011
36,556
8,010
21.9%
2010
42,829
8,726
20.4%
2009
34,637
7,319
21.1%
2008
19,532
4,534
23.2%
2007
10,920
2,741
25.1%
Source: U.S. Courts Administrative Office
United States
2011
1,410,653
124,733
8.8%
2010
1,593,081
126,507
7.9%
2009
1,473,675
101,250
6.9%
2008
1,117,771
70,860
6.3%
2007
850,912
51,369
6.025.1%
Source: U.S. Courts Administrative Office
King’s Expert Documents Inc., help people fill out legal documents and forms for less money than a lawyer would charge. A Chapter 7 filing costs $200. Document prepares can’t provide legal advice. Despite the slight drop in pro se and overall bankruptcy filings seen in 2011, the poor economy continues to fuel the bankruptcy fire. “It’s not at all slowing down,” King said. She’s had more clients file for bankruptcy as did in the peak year of 2010, although the economic status of many filers has changed. In the first years following the economic recession of 2008 many people filing personal bankruptcies had lost their homes in the subprime mortgage crisis. Many of those people had smaller incomes and few assets. Today, more people filing for personal bankruptcy have more assets and income and were able hold out for a change in the economy that still eludes many.
“They just can’t hold out any longer,” King said. Another factor contributing to the increase in pro se filings has been the heavy case loads many bankruptcy attorneys have. “I think that many people wait to the last minute and find out that the attorneys are busy and can’t see them,” Sparks said. There were more than 36,000 bankruptcy filings in Arizona in 2011, up from 10,900 in 2007. Historically, Sparks said the 1990s probably saw more overall filings of all sorts, the result of the savings and loan scandal and subsequent collapse. But unlike the 1990s, the current economy has seen a housing market crash and sustained high unemployment figures, which sparks said makes the situation today worse. “In the 90s,” he said, “at least people had jobs.” Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259.
InsideTucsonBusiness.com
FEBRUARY 24, 2012
NEWS BOND DEBT | CONTINUED FROM PAGE 3 the new board. The new body would give prior approval to the Pima County Board of Supervisors to put a bond question before voters. County officials have said the new body would give disproportional representation to smaller incorporated areas. The bond accountability committee also would give approval for any proposed changes to bond programs before the board of supervisors would. Bill co-sponsor Vic Williams, R-District 26, said the county’s debt load wasn’t why he decided to sponsor the legislation. Rather, he said he wants there to be more openness and accountability in the bonding process. “Pima County is about ready to issue a bond request for a quarter of a billion dollars,” Williams said. “I can’t think of a better time to do this.” The county has proposed a new bonding plan that would improve traffic and other infrastructure around the airport and Raytheon south of Tucson to facilitate industrial development. Williams said he’d support changes to the bill to make it applicable to all Arizona counties, saying the goal of the proposed law would be to provide more transparency in county bond spending. Pima County Supervisor Richard Elías said the bill’s sponsors appear to have ulterior motivations. “It appears to me to be politically motivated,” Elías said, noting that all of the seats
on the board of supervisors are up for re-election, one of which Williams has begun a run for. Elías is one of the three Democrats on the five-member board. He also said that Pima County has been successfully retiring its debt. Pima County bonds have come under scrutiny in the past as well. The most glaring example was the 1997 bond package that prompted an Arizona Auditor General report, which found many projects’ costs were underestimated and financial reporting was often inaccurate or incomplete. Since then, the county passed a truth in bonding ordinance. Pima County leaders have been critical of the bill, saying the truth in bonding ordinance already provides transparency. Elías said the bill would strip municipal governments of local control over their own affairs. “It’s totally undemocratic,” he said. Proud also fired a shot at the City of Tucson in her online opinion piece. “Tucson ranks among the worst in the nation for foreclosures yet has the highest property taxes in the state,” Proud wrote. Just two incorporated cities or towns in Pima County charge a property tax, Tucson and South Tucson. Tucson’s combined primary and secondary tax rate is $1.16 per $100 assessed property value while South Tucson’s combined rate stands at $2.66.
Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259.
PEOPLE IN ACTION
J. LYLE BOOTMAN
BRUCE E. STEWART
AWARDS
APPOINTMENTS
J. Lyle Bootman, Ph.D., Sc.D., senior vice president for health sciences and dean of the College of Pharmacy at the University of Arizona, has been selected to receive the Distinguished Person of the Year Award for 2012 from Pharmacists Planning Service, Inc. The organization selected Bootman for the honor because of his many contributions to the profession of pharmacy.
Bruce E. Stewart, M.D., has been appointed assistant professor in the University of Arizona Department of Surgery Division of Otolaryngology – Head and Neck Surgery. With more than 20 years experience in medical and surgical treatments for conditions of the ear, nose and throat, Stewart provides full-time clinical care for pediatric and adult patients at The University of Arizona Medical Center — South Campus. He
JASON T. SHUFFITT
received a bachelor’s degree in electrical engineering and a medical degree from the UA, where he also received the Lange Award for Academic Excellence. He completed residency training in otolaryngology at the University of Utah in Salt Lake City. Jason T. Shuffitt, DNP, FNP-BC, clinical assistant professor, community and systems health science division, has been appointed director of the Rural Health Professions Program at the University of Arizona College
of Nursing. He will provide leadership for increasing rural inter-professional educational opportunities for students entering or advancing within the profession of nursing and collaborate with other UA health colleges to enhance rural health professions development. He holds a doctorate of nursing practice from the UA and a master’s degree in nursing from Western Kentucky University.
BOND DEBT BY MUNICIPALITY Total principal-only debt of Arizona municipalities owing $1 million or more in bond listed in order of debt per capita.
Municipality
County
Total Bond Debt (as of June 30, 2011)
Population
Per capita Debt
Cave Creek Williams Tolleson Queen Creek Sedona Lake Havasu City Scottsdale Phoenix Glendale Cottonwood Tempe Goodyear Yuma Fredonia Mesa San Luis Bisbee Gilbert Quartzsite Chandler Safford Peoria Tucson Casa Grande Prescott Valley Page Chino Valley Sahuarita Marana Prescott Avondale Nogales Kingman Flagstaff South Tucson Willcox Oro Valley Somerton Show Low Taylor Bullhead City Benson El Mirage Douglas St. Johns Eagar Buckeye Snowflake Surprise Paradise Valley Payson Sierra Vista Holbrook Fountain Hills Globe Eloy Guadalupe Winslow Thatcher Maricopa Coolidge Superior Wickenburg
Maricopa Coconino Maricopa Maricopa Yavapai Mohave Maricopa Maricopa Maricopa Yavapai Maricopa Maricopa Yuma Coconino Maricopa Yuma Cochise Maricopa La Paz Maricopa Graham Maricopa Pima Pinal Yavapai Coconino Yavapai Pima Pima Yavapai Maricopa Santa Cruz Mohave Coconino Pima Cochise Pima Yuma Navajo Navajo Mohave Cochise Maricopa Cochise Apache Apache Maricopa Navajo Maricopa Maricopa Gila Cochise Navajo Maricopa Gila Pinal Maricopa Navajo Graham Pinal Pinal Pinal Maricopa
$64,024,452 $26,064,684 $53,466,029 $168,317,124 $59,930,000 $294,739,809 $1,151,264,889 $7,206,987,949 $1,079,650,044 $51,955,000 $731,786,092 $267,902,217 $302,226,582 $4,171,711 $1,364,734,313 $78,819,657 $14,537,729 $522,285,000 $9,021,768 $564,990,000 $22,623.754 $340,544,415 $1,117,214,825 $102,189,191 $76,531,298 $14,119,805 $20,782,857 $47,371,545 $64,970,000 $73,263,386 $102,055,000 $36,875,000 $46,159,,624 $101,563,352 $7,905,000 $5,170,451 $57,198,750 $19,506,524 $13,815,566 $4,813,003 $44,325,000 $5,240,000 $28,589,053 $14,553,140 $2,800,505 $3,887,034 $39,095,234 $4,185,000 $87,109760 $9,365,000 $10,867,205 $28,075,000 $3,153,579 $12,275,000 $4,098,132 $8,387,123 $2,720,000 $4,515,000 $2,270,000 $19,270,000 $5,233,654 $1,035,000 $2,092,000
5,015 3,023 6,545 23,361 10,031 52,527 217,385 1,445,632 226,721 11,265 161,719 65,275 93,064 1,314 439,041 25,505 5,575 208,453 3,677 236,123 9,566 154,065 520,116 48,571 38,822 7,247 10,817 25,259 34,961 39,843 76,238 20,837 28,068 65,870 5,652 3,757 41,011 14,287 10,660 4,112 39,540 5,105 $31,797 17,378 3,480 4,885 50,876 5,590 117,517 12,820 15,301 43,888 5,053 22,489 7,532 16,631 5,523 9,655 4,865 43,482 11,825 2,837 6,363
$12,766.59 $8,622.13 $8,168.99 $6,385.08 $5,974.48 $5,611.71 $5,289.97 $4,985.35 $4,762.02 $4,612.07 $4,525.05 $4,104.21 $3,247.51 $3,174.82 $3,108.44 $3,090.36 $2,607.66 $2,505.53 $2,453.57 $2,392.78 $2,365.02 $2,210.39 $2,148.01 $2,103.91 $1,971.34 $1,948.37 $1,921.31 $1,875.43 $1,858.36 $1.838.80 $1,338.64 $1,769.69 $1,644.56 $1,541.88 $1,398.62 $1,376.22 $1,394.72 $1,365.33 $1,296.02 $1,170.48 $1,121.02 $1,026.44 $899.11 $837.45 $804.74 $795.71 $768.44 $748.66 $741.25 $730.50 $710.23 $639.70 $624.10 $545.82 $544.10 $504.31 $492.49 $467.63 $466.60 $443.17 $442.59 $364.82 $328.87
Apache Junction
Pinal
$3,530,000
35,840
$98.49
Compiled from Arizona Department of Revenue and U.S. Census Bureau data Bond debt figures include general obligation bonds, revenue bonds, municipal corporation debt, certificates of participation and special assessment bonds.
7
8 FEBRUARY 24, 2012
INSIDE TUCSON BUSINESS
ARTS & ENTERTAINMENT MEALS & ENTERTAINMENT
ARTS & CULTURE
Brewd offers a jolt of java and comfort in downtown
See ‘Great Gatsby’ on stage before new movie hits screens
Billed as a coffee lounge, Brewd opened about a month ago opposite the Ronstadt Transit Center in downtown Tucson. Kate Preble and her partner Phil Bryson are the proprietors of the venture. She works in IT for the City of Tucson and he brings experience working in the bicycle industry to their endeavor. Brewd has both both traditional table seating as well as several couches to lounge on. There’s also a community room that seats about 15 and its use is complimentary so long as you are a drinking or eating something from the menu. For coffee, Brewd is using beans roasted by Adventure Coffee Roasting Company, teas are sourced from tea guru Manish Shah and his Maya Tea Company and baked goods are from Small Planet Bakery. Brewd also features a steady stream of musicians who visit the coffee shop regularly. The coffee lounge is open seven days a week. Their website is in the midst of an update. In the meantime you can get updated info from their Facebook page. • Brewd - A Coffee Lounge, 39 N. Sixth Ave. — http://www.brewd.co — (520) 623-2336
Farmers dinner Sunday Maynards Market + Kitchen has partnered with the Santa Cruz Valley Heritage Alliance for its monthly farmers market dinner series. February’s dinner is this Sunday starting at 5 p.m. The dinner will be served family style with menu items including house made charcutercie, soup of confit Amish chicken and San Javier beef (cowboy style) served with Native Seed SEARCH cannellini beans. For dessert there will be a French pear tart with
homemade Sauvignon Blanc ice cream. Cost is $60 per person and includes local wine pairings. Seating is limited to just 30 guests. • Maynards MICHAEL LURIA Market + Kitchen, 400 N. Toole Ave. in the Historic Depot — www. maynardsmarket.com — (520) 545-0577
Pinkberry swirls California transplants and other fans of Pinkberry’s tart frozen yogurt can now get their fix in Tucson, which is also the chain’s first location in Arizona. It’s inside the Student Union on the University of Arizona campus, which isn’t exactly conducive to a spur-of-the-moment visit but at least those who know and love the swirl can get it. The UA location is open from 10 a.m. to 10 p.m. weekdays and 11 a.m. to 9 p.m. Saturdays and Sundays. If you’re up for it, there’s free parking in the Second Street Garage, Second Street and Mountain Avenue, on the weekends except when there is a special event. • Pinkberry, 1303 E. University Blvd. in the Student Union on the University of Arizona campus — www.pinkberry.com — (520) 621-0040.
Contact Michael Luria at mjluria@gmail. com. Meals & Entertainment appears weekly in Inside Tucson Business.
Once again Arizona Theatre Company is on the cutting edge of contemporary entertainment, with a presentation of a stage version of F. Scott Fitzgerald’s “The Great Gatsby.” A new film version of 1920s-era story starring Leonardo DiCaprio and Carey Mulligan is due to come out at Christmas this year. The Arizona Theatre Company presentation will be on stage at the Temple of Music and Art, 330 S. Scott Ave., starting Saturday (Feb. 25) through March 17. The production is the first officially authorized version of the book since 1926, and I can tell you first hand, it will not disappoint audiences from the costumes to the staging.
Art Obsidian Gallery, now at 410 N. Toole Ave. in the Historic Depot, has an exhibition titled “Storytelling” featuring the work of artists Debra Fritts, George Penaloza and Cheryl Tall. The work — figurative sculpture — is on display through March 10. Also currently up through March 13 are paintings by C. J. Shane and sculpture by Lynne Yamaguchi at the Fine Art Gallery in the Tucson Jewish Community Center, 3800 E. River Road.
Music Show business royalty arrives in Tucson next week with a singing performance by Lucie Arnaz, daughter of legends Lucille Ball and Desi Arnaz. She’ll perform as part of the Invisible Theatre’s season at the Berger Performing Arts Center on the campus of the Arizona State
Schools for the Deaf and the Blind, 1200 W. Speedway. Showtimes are 8 p.m. March 2 and 3 p.m. March 4. Buy tickets through www.InvisibleTheatre.com. HERB STRATFORD
Film
With the Oscars due to be handed out Sunday — starting at 6:30 p.m. on KGUN 9 — it’s worth taking a look at one of this year’s foreign film nominees. “A Separation,” from Iran is a powerful film about family, obligation and consequences and is playing at the Loft Cinema, 3233 E. Speedway. Also newly out on Tucson movie screens are “Wanderlust” with Paul Rudd and Jennifer Aniston about a Manhattan couple who flee their life for a new existence on a rural commune; “Tyler Perry’s Good Deeds” telling the story of man whose organized life is thrown into turmoil when he meets a new woman; and “Act of Valor,” a fictionalized Navy Seals action piece about a rescue mission.
Contact Herb Stratford at herb@ ArtsandCultureGuy.com. Stratford teaches Arts Management at the University of Arizona. His column appears weekly in Inside Tucson Business.
W FOLLO DER A E L E TH
http://twitter.com/#!/azbiz
InsideTucsonBusiness.com
FEBRUARY 24, 2012
9
SOCIAL MEDIA SOCIAL MEDIA IN THE WORKPLACE
Legal questions raised over business social media creations Asking employees to create social media accounts to promote your business can be risky. It’s important to have a policy that addresses issues such as these: Who owns social media pages generated at work? Recent legal developments regarding ownership of social media pages generated at work can create public relations disasters for companies that rush into the process. Does the employer or employee own Twitter account they established in the office? Formulating a company policy, having employees sign written agreements and using technological safeguards can help avoid costly and embarrassing disputes. Do you own your “followers?” The mobile technology review site, PhoneDog, currently is embroiled in litigation with a former employee for the continued use of a Twitter account after his departure. During his four-year tenure at PhoneDog, and as part of his job there, Noah Kravitz posted hundreds of product reviews and video blogs and amassed over 17,000 followers using the screen name @PhoneDog Noah. When Kravitz and PhoneDog parted ways, Kravitz changed his account’s handle to @noahkravitz and continued to grow his base of followers. With an industry value of $2.50 per month for each follower, PhoneDog was not pleased when Kravitz began tweeting for a competitor. Kravitz refused to relinquish control over the account. In turn, PhoneDog sued Kravitz for misappropriating trade secrets and is seeking over $300,000 in damages against him. The parties dispute numerous material facts, like whether PhoneDog actually encouraged Kravitz to use the account after departing, and the case is pending in federal court in California. Needless to say, that hasn’t
So far, Twitter and Facebook have stayed out of the legal battles. But that may change if social networks perceive their customers’ rights are being abused. JOHN BALITIS stopped Kravitz from creating a legal and public relations nightmare for his former employer. Employee privacy and publicity rights In Maremont v. Susan Fredman Design Group Ltd. (SFDG), marketing director Jill Maremont sued her former employer, a fashion and interior design firm, for accessing her personal social media accounts without her permission. Maremont had used her own Facebook and Twitter pages to promote the design firm. After building a strong following, a serious accident sidelined Maremont and left her unable to work for several months. Not wanting to lose traction in its social media marketing campaign, the company logged on to Maremont’s accounts, informed her followers about the accident, and continued making posts using her name and profile photo. When Maremont became aware of this, she asked the firm to stop. The posts persisted, and she eventually filed suit against the firm for false endorsement and invasion of privacy. A federal district court judge in Illinois denied the firm’s motion to dismiss the lawsuit and ruled that Maremont is entitled to maintain her suit, including a claim for violation of the Stored Communications Act, which prohibits unauthorized computer access. Developing social media law
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The judge in the Maremont case noted the plaintiff, having stated that “if she left her employment at SFDG, she would promote another employer with her Facebook and Twitter followers,” sufficiently demonstrated that she “has a protected, commercial interest in her name and identity within the Chicago design community.” Although the case is ongoing, it’s current posture supports former employees like Noah Kravitz by acknowledging a person’s legal interest in the followers he or she develops while promoting someone else’s business. This personal legal interest certainly is at odds with what most employers expect and assume; namely, that on line promotional platforms belong to the business, not the individual worker. Social media sites may enter the legal battle soon So far, Twitter and Facebook have stayed out of the legal battles. But that may change if social networks perceive their customers’ rights are being abused. At the heart of the plaintiff ’s legal argument in Eagle v. Morgan, in which an acquiring firm hijacked the recently terminated CEO’s LinkedIn profile, is the social network’s user agreement. The plaintiff had allowed other staff members to access her profile to help manage the account and keep in touch with clients. All executives at the com-
pany used a standard template for consistency, so when she was terminated, staff easily switched out the plaintiff ’s name and photo with that of the new CEO. The plaintiff claims the company is wrongfully leveraging her “connections” with other users on the site. LinkedIn’s user agreement states that each user may only operate one account at a time, and that the information the user provides is the user’s personal property. This lends credence to the theory that the Linkedln account belonged to the plaintiff as an individual, and cannot belong to the company. Should Linkedln join in the Pennsylvania district court lawsuit to take a position on its user agreement, the litigation no doubt will become even more protracted and costly for the employer. Safeguarding your company The time to think about your company’s social media strategy is before, not after, employees start promoting the business. Simply keeping a ledger of your company’s social media accounts’ usernames and passwords will do your firm no good if a disgruntled employee decides to take the social media account they created at work when they get fired. Whether your company is already using social media, or you are about to start building your online presence, it is a good idea to have a clear social media policy in place. Or you may be stuck in a no win situation.
Contact John Balitis, an attorney with Fennemore Craig practicing in the areas of employment and labor law, jbalitis@fclaw.com. David McDeVitt, a law student at Arizona State University, helped co-author this column. Social Media in the Workplace is a monthly feature of Inside Tucson Business.
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INSIDE TUCSON BUSINESS
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InsideTucsonBusiness.com
FEBRUARY 24, 2012
PROFILE
Arizona filmmakers hope for Legislative boost Filmmaking in Arizona has a chance for a comeback if a bill currently in the Legislature gets approved. An incentive program that expired in 2010 helped boost the motion picture industry in the state and those in the industry believe this new bill (SB 1170) would do the same. Independent filmmakers Tommy Stovall and Marc Sterling make movies under the name Pasidg Productions. They live and work in Sedona. After their first film “Hate Crime” earned strong reviews in 2005, Stovall and Sterling decided to take what they learned and make a second movie. “Sedona,” which takes place in and around its namesake town, was shot in 2010 — in time to take advantage of the tax credits had at the time. “Sedona” is due to open March 16 in Tucson, Scottsdale and Sedona. “The old bill, what it did was it gave credit of 30 percent of all money spent in Arizona back to the filmmakers. It was incentive to make films here,” said Stovall. “New Mexico has good incentives. Without incentives here, it would have been better for us to go there.” This latest measure, has been approved by the full state Senate and now must go through the House. If approved it would benefit both in-state and out-of-state filmmakers and would offer varying levels of tax credits based on production budgets. The benefits would extend until 2042. Although it seems like an obvious way to boost the economy and create jobs, Stovall said the law’s sticking point is that some see the incentives as corporate welfare. “They say, ‘Who wants to give tax breaks to big Hollywood studios with lots of money?’ But there are indies like us and you’re competing with other states and that’s why you want tax incentives. We spent a lot of money in Sedona.” Sterling, a tax accountant, explained that fewer films have been made in recent years everywhere due to the economy, but independents have been hit especially hard. “Companies like Smith Barney used to have hedge funds for funding indie films and they’d promise certain returns.” But that source, he said, is no longer available, so indie producers are relying more on individual investors. Stovall, who also wrote and directed “Sedona,” described it as a lighthearted, feel-good movie with a theme of self-discovery. “Our intent was for people to have a fun experience.” Many in the audience will recognize lead actors Frances Fisher, Beth Grant, Christopher Atkins and Barry Corbin. According to Stovall, Atkins is just getting back into the movie business after taking an extended break to raise his kids.
Some of the film’s characters are based on actual Sedona residents, including Deb Lovejoy (played by Grant), a holistic pedicurist. “I told her you’d BIZ FACTS make a great “Sedona” character in a movie,” www.sedonamovie.com Stovall Opens March 16 recalled. “I Harkins Tucson Spectrum 18 asked if I 5455 S. Calle Santa Cruz, at Interstate 19 could write and Irvington Road her in and she said OK. Sedona residents will definitely recognize people in the film.” Almost all remaining crew and cast members are from Arizona. Jessica Amerson and Dan Hollings represent Tucson in their behind-the-scenes contributions. Hollings, who was the marketing genius behind the 2006 film “The Secret,” is using internet-based tools to help get the word out about “Sedona.” From a promotional standpoint, Stovall’s production may have advantages over other locally made films. “One of my goals was to have the movie be a marketing piece for Sedona and the “Sedona” Director Tommy Stovall whole state,” Stovall said. Arizona Office of Tourism and Sedona Chamber of Commerce are promoting the film through their websites and other advertising avenues. The producers also hope to turn “Sedona” into a television series. A 2011 Salpointe Catholic High School graduate and now an 18-year-old college student, Amerson was just 17 when she co-wrote and sang “Woman Changed” for an important scene in the movie. Music supervisor Ebony Tay was so impressed by Amerson’s YouTube videos, she insisted the young singer/songwriter get to Sedona right away. Stovall said he, too, was “blown away” by the teenager’s voice. “It happened really fast. I got a call and drove up the next weekend. We wrote and recorded the song in one day,” Amerson said. “The cool part was writing the song and seeing where it would go. It’s a pivotal scene where the character had it with her life. She’s struggling with herself and that’s when the song is played.” The experience showed Amerson that while music in film is very important, it comes last in the production process. “It also taught me to communicate with others who have been in it a long time, and they treated me almost as an equal.” Amerson is aiming for a career in music and is currently studying at the Mike Curb College of Entertainment and Music Business at Belmont University in Nashville, Tenn. “I hope this movie goes far,” she said. “It’s a great movie and the people in Sedona worked very hard on it.” Pasidg Productions
By Christy Krueger Inside Tucson Business
11
12 FEBRUARY 24, 2012
INSIDE TUCSON BUSINESS
CALENDAR SPECIAL EVENTS
Fair Labor Standards, Break Time for Nursing Mothers Seminar Wednesday (Feb. 29) 11:30 a.m. to 1 p.m. Tucson Metro Chamber 465 W. St. Maryâ&#x20AC;&#x2122;s Road Contact: Cindy Brown cbrown@tucsonchamber. org (520) 792-2250 ext.154 Cost: $5 www.tucsonchamber.org Women In Construction Week Tucson Chapter of the National Association of Women in Construction Sunday (March 4) to Saturday (March 10)
Contact: Michelle Quinn mquinn526@hotmail. com or (520) 440-7627 Website: www.nawictucson.org Free Going Solo: Starting and Building Your Own Business Wednesday (March 7 and 21) 10 a.m. (March 7) and 11:30 a.m. (March 21) Venue: Joel D. Valdez Main Library 101 N. Stone Avenue Contact: askalibrarian@pima. gov or (520) 791-4010 www.library.pima.gov Free REGULAR MEETINGS
Tucson Computer Society
Third Monday 6 p.m. (pre-session) 7 p.m. (meeting) Pima County Medical Society Auditorium 5199 E. Farness Drive Information: (520) 6254419 or www.aztcs.org Cost: Free *No meeting in September
Tucson Downtown Sertoma Club First and third Wednesday 11:30 am to 1 p.m. Viscount Suites 4855 E. Broadway Information: www. tucsonsertoma.org RSVP: tdsertoma@yahoo.com
{YOUR EVENT HERE} Submissions: Deadline for calendar submissions is 10 days prior to publication. Post your event online at www. insidetucsonbusiness.com/calendar. Email any questions to pmcnamara@azbiz.com.
A complete calendar listing is at
InsideTucsonBusiness.com
Tucson Goal Getters Every other Sunday 1 p.m. Spill the Beans 2920 N. Swan Road Information: www.meetup. com/The-Tucson-GoalGetters or (520) 370-6961 Cost: $20 Tucson GLBT Chamber of Commerce Monthly breakfast meeting Third Thursday 7:30 to 9:30 a.m. Hotel Tucson City Center 475 N. Granada Ave. RSVP: (520) 615-6436 or info@tucsonglbtchamber.org Cost: $15 members, $20 guests
Tucson Hispanic Chamber of Commerce Monthly Networking Luncheon Third Thursday 11:30 a.m. The Manning House 450 W. Paseo Redondo RSVP: www. tucsonhispanicchamber.org. Cost: $25 members, $30 nonmembers Tucson Hispanic Chamber of Commerce Monthly Fiesta Mixer First Thursday 5:30 p.m. Locations vary Information: www. tucsonhispanicchamber.org. Cost: $10 members, $15 nonmembers
InsideTucsonBusiness.com
FEBRUARY 24, 2012
GOOD BUSINESS WOMEN IN BUSINESS
Women-only travel is growing trend for experience and fun Women-only travel is a growing trend within the travel industry, with more destinations and types of travel being offered in the U.S. and worldwide. They range from short girlfriend getaways to extended journeys, and luxury to highadventure tours. Women are venturing out with girlfriends, sisters or as a mother-daughter team. According to the Travel Channel, however, more than 32 million American women traveled alone in 2007 and that number continues to grow. Not always having a travel partner, women traveling solo are seeking women-only travel groups to have fun and meet other like-minded women. Escorted women-only tours emphasize fun and camaraderie, and provide a safe way for women to travel. Groups are typically small in size, ranging from six to 14 women, allowing for flexibility and an opportunity to get to know everyone. Choices include itineraries that are adventurous, luxurious or anywhere in between. As a result, there is something available for every budget. Much of my foreign travel over the years has been exploring on my own, with girlfriends or my sister. I discovered that a lot of other women also want to travel, which is why I decided to create and escort women-only journeys. I believe they help build a stronger sense of self, nurture an adventurous spirit, enrich one’s understanding of the world around you, and allow women to express their independence in a fun and safe environment. I love sharing Europe’s charm, history and beauty with other women with the assistance of local professionals I have come to know and trust. Favorite countries include France and Italy, but I look
forward to exploring Spain this spring. Our company also partners with other womenowned companies to offer additional venues beyond Europe. These inviting destinaJAN ACORN tions include a women’s safari in South Africa, as well as a unique journey in Peru celebrating women’s influence on the local economy. It is wonderful to experience unforgettable travels and there are now many options for specially-designed women only tours. Traveling with friends allows you to deepen your friendships as you relax and explore new destinations together in a memorable and fun way. Unmarried or perhaps your spouse doesn’t enjoy the same type of travel as you? Single woman travel is an enriching experience – not only for the areas you visit and learn about, but the other women you meet on your journey. Women-only travel is for women of all ages and is an ideal way to share quality time without the distraction of everyday life.
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13
14 FEBRUARY 24, 2012
INSIDE TUCSON BUSINESS
MEDIA
Lou Raguse off â&#x20AC;&#x2DC;the beachâ&#x20AC;&#x2122; and headed for Buffalo By David Hatfield Inside Tucson Business As it turns out former â&#x20AC;&#x153;Fox 11 News at Nineâ&#x20AC;? anchor Lou Raguse is only going to be â&#x20AC;&#x153;on the beach,â&#x20AC;? as they say, for about a month. He and his wife, Emily Guggenmos, weekend news anchor on KVOA 4, are headed to Buffalo, N.Y., where theyâ&#x20AC;&#x2122;re going to work for that marketâ&#x20AC;&#x2122;s news ratings leaders, WIVB and WNLO, the CBS and CW affiliates. Raguse was among those who departed KMSB 11 Feb. 1 when the stationâ&#x20AC;&#x2122;s owner, Belo Corp., turned over the operations of both KMSB and KTTU 18 to KOLD 13, owned by Raycom. And by operations it included KOLD producing KMSBâ&#x20AC;&#x2122;s newscasts. Raguse says he was interviewed by KOLD but there was no job offer. For Guggenmos, this will be her final weekend anchoring on KVOA. She had already planned to take off next weekend to be in a wedding in San Diego. She will, however, return to do her reporting work before the couple leaves March 7 for the cross-country trek to western New York. Raguse says station officials in Buffalo havenâ&#x20AC;&#x2122;t set a specific date for when they will be on the air and there are still some other details that have yet to be worked out. He says his job will involve anchoring. Guggenmos has been hired as a reporter and fill-in anchor, he said. â&#x20AC;&#x153;We were pretty lucky. They actually came looking for us,â&#x20AC;? Raguse said. Between what airs on WIVB and WNLO, the Buffalo newsroom produces more than 35 hours of newscasts per week. Raguse and Guggenmos met while both worked at competing stations in Sioux
Lou Raguse
Emily Guggenmos
Falls, S.D.. He worked at the CBS affiliate and she worked at the NBC affiliate. The two were married in 2010. The two worked at separate stations in Tucson so the Buffalo gig is their first at the same station, though they wonâ&#x20AC;&#x2122;t be on the same newscasts. â&#x20AC;&#x153;Someday weâ&#x20AC;&#x2122;d like to co-anchor together,â&#x20AC;? Raguse says.
day on the air will be March 9. A graduate of Salpointe Catholic High School, Romo graduated from the University of San Diego and worked in Yuma and San Luis Obispo, Calif., before returning to Tucson. Greg Newton is the new national sales manager at KVOA 4. Previously he had been senior account manager since January 2010 with what is now Tucsonâ&#x20AC;&#x2122;s Cumulus Broadcasting group of radio stations. Before that he had been at Clear Channelâ&#x20AC;&#x2122;s radio stations for nearly seven years. Newton is a 1995 graduate of the University of Arizonaâ&#x20AC;&#x2122;s Eller College of Management. At Clear Channel Media and Entertainment, Steve Clement is heading to Phoenix to work for the companyâ&#x20AC;&#x2122;s eight-station group there as an account executive. Clement started his media sales career in 1991 with what is now the
Names in news â&#x20AC;&#x153;Good Morning Tucsonâ&#x20AC;? co-anchor Kimberly Romo and KGUN 9 are parting ways. A ninth-generation Tucsonan, Romo decided she wanted to spend more time being a wife and mom to her two daughters and is going into pharmaceutical sales. Romo has been KGUNâ&#x20AC;&#x2122;s morning show co-host since March 2007. Her last
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seven-station Clear Channel group in Tucson working his way up into the management ranks as national sales manager in 1997 and then director of sales in April 2011. He officially starts in Phoenix on March 1. Does the last name Weiss ring a bell? Aaron Weiss is now the news director at KMEG and KPTV, the CBS and Fox affiliates in Sioux City, Iowa. In 2001 and 2002 Weiss was a news producer at KVOA 4 and for the last nine years he had been at KGW, the NBC affiliate in Portland, Ore. And, yes, he is the son of former Tucson TV news anchor Patty Weiss and longtime local marketing executive Howard Weiss. A reader asks: Whatâ&#x20AC;&#x2122;s happened to David Close, host of â&#x20AC;&#x153;Morning Editionâ&#x20AC;? on KUAZ 89.1-FM/1550-AM? After getting up early for more than 20 years, Close retired in January, says Wendy Erica Werden, director of marketing and strategic partnerships for Arizona Public Media. Steve Shadley, who joined the station last summer as the news anchor for â&#x20AC;&#x153;Morning Editionâ&#x20AC;? is now also doing double-duty as host, though Werden says a final decision hasnâ&#x20AC;&#x2122;t been made as to whether that will be permanent.
Clarification In last weekâ&#x20AC;&#x2122;s column I said KOLD 13 beat KVOA 4 in the latest local Nielsen ratings without specifically saying that it was in the 25-54 year-old demographic. KVOA had higher total ratings at 4 p.m.
Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237. Inside Tucson Media appears weekly.
InsideTucsonBusiness.com
FEBRUARY 24, 2012
BRIEFS GET ON THE LIST Next up: Environmental resources, Recycling firms, Janitorial services, Pest control companies Now that the 2012 Book of Lists has been published, we’re collecting data for the 2013 edition. Upcoming categories that will be published in the weekly issue of Inside Tucson Business are: • March 2: Wedding planners, Convention and meeting facilities, Caterers • March 9: Environmental resources, Recycling firms, Janitorial services, Pest control companies • March 16: Acute-care hospitals, Rehabilitation centers, Nursing care centers and Home healthcare agencies • March 23: Airlines serving Tucson, Top airline destinations from Tucson • March 30: 501(c)(3) organizations, United Way allocations, Charitable trusts If your company fits one of these categories, now is the time to update your profile. Go to www.InsideTucsonBusiness.com and click the Book of Lists tab. New and unlisted businesses can create a profile by following the directions. The Book of Lists is a year-round reference for thousands of businesses and individuals. To advertise your business, call (520) 2941200.
PROFESSIONAL SERVICES
Beach Fleischman opens Phoenix accounting office Beach Fleischman, Southern Arizona’s largest locally-owned certified public accounting firm, has opened a full-service office in Phoenix. Founded by five shareholders in 1990, Beach Fleischman has grown to an office of 95 professionals including 45 CPAs and 19 shareholders. CEO and Chairman Bruce Beach said the expansion will serve the company’s growing client base in Phoenix and help create career opportunities. Chris Lutes has joined the firm as a shareholder and will oversee the Phoenix office, which is located at 2375 E. Camelback Road, Suite 600. Lutes has more than 20 years of experience in the accounting profession and is the past chair of the Accounting and Auditing Standards Committee for the Arizona State Board of Accountancy. He is a graduate of Arizona State University and a member of the American Institute of Certified Public Accountants and the Arizona Society of Certified Public Accountants. Beach Fleischman’s Tucson headquarters is at 1985 E. River Road, Suite 201.
Log on. Discuss. www.insidetucsonbusiness.com
PUBLIC SAFETY
Sheriff offers to shred old documents for free The Pima County Sheriff ’s Department has teamed with Arizona Verified Destruction (AVID) to hold a “Shred-A-Thon.” The public is encouraged to participate in this free event by bringing old personal documents and papers to be shredded. Shredding old documents can reduce the chances of identity theft. The Shred-A-Thon is scheduled for Saturday (Feb. 25) from 8 to 11 a.m. in the parking lot of the Marana High School, 12000 W. Emigh Road. The goal of these events is to promote identity theft awareness and education. Similar events are held throughout the year at different locations in Pima County.
COMMERCIAL REAL ESTATE
Isaacson named to run CBRE office A change at the top of the Tucson office of the commercial real estate firm CBRE: Ike Isaacson will take over as managing director from Tim Prouty, who has decided to step down after 12 years effective July 1. Prouty will remain with CBRE as a leader of its Capital Markets group. Prouty, who started his career in 1981, came to CBRE as president and CEO of the Tucson office when it was joint partnership and oversaw its conversion into a fully company-owned office, now headquartered at 3719 N. Campbell Ave. Isaacson, who joined in CBRE in 2008, has nearly 15 years of commercial real estate experience in the Tucson market, specializing in office, medical and research and development buildings. He is also active in civic organizations and owns Ike’s Coffee and Tea stores.
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EDUCATION/RESEARCH
Hart gets $475k contract to be new UA president The Arizona Board of Regents on Feb. 17 unanimously approved a contract for Ann Weaver Weaver Hart to serve as president of the University of Arizona starting July 1. Hart’s three-year contract provides for an annual salary of $475,000. She also will receive an annual $50,000 housing allowance, a $10,000 car allowance, $20,000 in moving expenses and a $100,000 “transition expense payment,” which would not be paid from university funds. According to the contract, Hart also is eligible to participate in a cash balance defined pension plan at $85,500, which is 18 percent of her base salary. Hart was the sole finalist in a national search conducted by the Board of Regents after former president Robert N. Shelton quit to take a job with the Fiesta Bowl. Hart currently is the president of Temple University in Philadelphia.
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16 FEBRUARY 24, 2012
INSIDE TUCSON BUSINESS
CAPITOL
Lawmakers put changes to workersâ&#x20AC;&#x2122; comp on ice, mostly By Hank Stephenson Inside Tucson Business PHOENIX â&#x20AC;&#x201D; State lawmakers are tinkering with the way workersâ&#x20AC;&#x2122; compensation operates, but some of the more drastic proposed changes to the system have been put on the back burner, at least for now. State Rep. Karen Fann, R-Prescott, knew she was facing an uphill battle in passing legislation designed to streamline workersâ&#x20AC;&#x2122; compensation, but she decided to push the programs anyway because she says the system needs reform. The first-term lawmaker said the ideas in her package of three bills heard earlier this month in the House Banking and Insurance Committee have been proposed in past years. However, each time legislators examined the types of reforms she is looking for â&#x20AC;&#x201D; including cutting down on workersâ&#x20AC;&#x2122; compensation fraud, allowing state and municipal governments to enter into agreements with directed care medical provider networks, and making sure the system covers only â&#x20AC;&#x153;evidencebased medicineâ&#x20AC;? â&#x20AC;&#x201D; the proposals were kicked down the road. But Mike Colletto, director of legislative affairs with the Professional Firefighters of Arizona, said the reforms havenâ&#x20AC;&#x2122;t been implemented before because theyâ&#x20AC;&#x2122;re bad policy. He has been involved in stakeholderâ&#x20AC;&#x2122;s meetings on proposed workersâ&#x20AC;&#x2122; compensation legislation since the 1980s and op-
posed the efforts. â&#x20AC;&#x153;There have often been stakeholders meetings in the past and the Legislature chose not to move forward with it because they saw the reasons not to,â&#x20AC;? Colletto said. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s the reason that it gets socalled kicked down the road, because once they fully reviewed the ins and outs of this complex system, they saw the balance of rights and responsibilities they chose not to move forward.â&#x20AC;? Even other Republicans said the sponsor put a lot on her plate with the highly technical, bigchange bills. â&#x20AC;&#x153;Representative Fann, boy, you really know how to bite off a big apple, thatâ&#x20AC;&#x2122;s for sure,â&#x20AC;? said Rep. Carl Seel, R-Phoenix, during a Banking and Insurance meeting Feb. 6. One bill (HB 2368) tries to combat fraud in the workersâ&#x20AC;&#x2122; compensation system by authorizing insurance carriers and employers processing a workersâ&#x20AC;&#x2122; compensation claim access to contribution and wage reports to verify income. The bill also increases payout for an unemployed person seeking benefits by implementing a modified index for calculating average monthly wages, and allows an injured employee to pursue remedy against the person who further aggravated the employeeâ&#x20AC;&#x2122;s previously accepted industrial injury. Supporters say the system contains no fraud prevention method now, and allowing insurers and employers to access outside information re-
garding employment and income will allow them to better combat fraudulent claims. The modified index, supporters say, is a more stable way to calculate wages that doesnâ&#x20AC;&#x2122;t dip and soar with employment shifts. The bill was the only one of the three to make it out of the committee, and it now awaits a full vote by the House. Before becoming law, the bill would also need approval from U.S. Department of Labor to allow insurers and employers to access wage reports. Under another bill (HB 2365) workersâ&#x20AC;&#x2122; compensation providers would have to use American College of Occupational and Environmental Medicineâ&#x20AC;&#x2122;s (ACOEM) occupational medicine practice guidelines to establish evidence-based treatment practices for workersâ&#x20AC;&#x2122; compensation cases. Dr. Mitchell Lichton, a hand surgeon, told the committee that he looked at the ACOEMâ&#x20AC;&#x2122;s book, and looked up the section about his practice. While it might be good for a new doctor as a guideline, he said it simply isnâ&#x20AC;&#x2122;t extensive enough as a list of accepted treatment. â&#x20AC;&#x153;They have here 20 hand wrist and form disorders, of which they will tell you how to treat,â&#x20AC;? he said. â&#x20AC;&#x153;Instead of going to 11 years of school after high school, I could have learned those 20 and probably been pretty good at it. Thereâ&#x20AC;&#x2122;s a lot more than that.â&#x20AC;? The third bill (HB 2367) proposed the biggest changes in workersâ&#x20AC;&#x2122; compensation and would
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allow state and municipal governments to enter into medical care networks to provide their workersâ&#x20AC;&#x2122; compensation coverage. If the employer decided to use a medical care network, workers would have their option of doctors limited to doctors within that network. The Arizona Chamber of Commerce and Industry supported the bills, and its lobbyist, Marc Osborn, said allowing state and municipal governments to use medical care networks for workersâ&#x20AC;&#x2122; compensation will make the system easier and cheaper, and will allow employers to drive down rates. â&#x20AC;&#x153;The whole idea is you can provide care in a much more streamlined, cost effective way,â&#x20AC;? Osborn said. â&#x20AC;&#x153;On behalf of the privately insured, weâ&#x20AC;&#x2122;ve seen huge benefits. Things like being able to get our employees into a physician in a much quicker manner, which means their injuries get taken quicker, which means they get back to work, and weâ&#x20AC;&#x2122;re able to negotiate aggressive rates with those providers.â&#x20AC;? Detractors agree the networks will drive down costs, but they say the savings will come at the expense of workers, who will have limited options in their doctors and who will use workersâ&#x20AC;&#x2122; compensation less. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve heard today this is going to drive down costs,â&#x20AC;? said Barry Aarons, a lobbyist for the Arizona Association of Chiropractic and the Injured Workers Pharmacy. â&#x20AC;&#x153;Oh yeah, itâ&#x20AC;&#x2122;s going to drive down costs â&#x20AC;&#x201D; itâ&#x20AC;&#x2122;s going to drive down costs by driving down utilization. Thatâ&#x20AC;&#x2122;s the only way that they have to drive down costs.â&#x20AC;? Aarons said the measures are too draconian and he likened using these bills to try to cut down on excesses in workersâ&#x20AC;&#x2122; compensation to trying to kill a mouse with a gun meant for an elephant â&#x20AC;&#x201C; â&#x20AC;&#x153;Youâ&#x20AC;&#x2122;re going to succeed in killing the mouse,â&#x20AC;? he said. â&#x20AC;&#x153;But youâ&#x20AC;&#x2122;re going to have an awful lot of collateral damage on the side.â&#x20AC;? Opponents also argue that the proposed changes would constitute a reduction of benefits, which the state constitution says would require voter approval through a referenda. Article 18, Section 8 of the Arizona Constitution, which established the workersâ&#x20AC;&#x2122; compensation system, reads: â&#x20AC;&#x153;The percentages and amounts of compensation provided in house bill no. 227 enacted by the seventh legislature of the state of Arizona, shall never be reduced nor any industry included within the provision of said house bill no. 227 eliminated except by initiated or referred measure as provided by this Constitution.â&#x20AC;? Rep. Debbie McCune Davis, D-Phoenix, worried the legislation would make it harder for rural Arizonans to get access to treatment in areas where networks arenâ&#x20AC;&#x2122;t as robust as they are in bigger cities. Committee chair Rep. Nancy McLain, R-Bullhead City, was concerned the legislation did not provide an opt out option for employees, as she is required to do with the employees of her janitorial service company. Because of these concerns and more, Fann decided to ask the committee to hold the last two bills, and they have not had a hearing since. Opponents of the bills plan to keep a lookout for similar proposals to surface in the Senate.
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FEBRUARY 24, 2012
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FEBRUARY 24, 2012
19
REMEMBERING TUCSON
Ed Updegraff — ‘One of the best’ amateur golfers in the world Beneath the radar screen, longtime Tucsonan Dr. Ed Updegraff “is a man who holds a reverence for the game of golf that’s almost equal to the reverence Tucson golfers hold for him. He was one of the country’s best amateur players during his younger years. The retired Tucson urologist is still one of the best — if not the very best — 90-year-old golfer on the planet. He has no idea how many times he has shot less than his age. If you really press the subject, it’s still every round.” Updegraff received MARY PEACHIN his bachelor’s and master’s degrees from the University of Iowa. After earning a medical degree in urology from the University of Colorado’s School of Medicine, he arrived in Tucson in 1951 to set up his practice. During those early years in Tucson, he loved to get out and play. He played regular rounds at El Rio with with community leaders Leon Levy, Ralph Bilby and Harry Cameron. Across town on the eastside, Ted “T.K.” Shoenhair had been a driving force in establishing Tucson Country Club in 1946, which had about 50 charter members. Updegraff liked playing there. “We pretty much had the golf course to ourselves. The course was nice, so was the dining,” Updegraff recalls. He especially appreciated be-
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Editor’s note: In recognition of the Accenture Match Play Championship this week, this is a bonus column in Mary Peachin’s Remembering Tucson series.
The 1966 Citizen Cup Champions, Ed Updegraff holding trophy, at the Tucson Country Club.
ing able to have a specific tee time. The gentleman is a true champion. His accolades — which are not simple chip shots — include being Tucson’s city golf champion a dozen times, the first four-time winner of the Arizona Amateur Golf Tournament, three-time Southwestern Amateur and Western Amateur twice. He also won the USGA Senior Amateur. Tucson Country Club had made him an honorary member after winning the highly respected Western Amateur tournament, first in 1957 and then again in 1959. He nearly did a third time in 1964 when he finished as the runner-up. Updegraff has played in six Masters Golf Tournaments, and has qualified for 12 U.S. Amateur Championships. In 1963, 1965
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and 1969, he played on the U.S. Walker Cup team. After winning Tucson Country Club’s championship 27 times, the club renamed the award the Updegraff Cup. The late Bill Healy had Updegraff ’s photo posted in the clubhouse and renamed the trophy. When the Pima County Sports Hall of Fame named Updegraff an honoree in 1990, they referred to him as “the quintessential amateur golfer, a man who left a trail of friendships on golf courses everywhere.” Updegraff says he never gave a second thought to becoming a pro. While he enjoyed competition in his younger days, he now enjoys playing with friends three times a week. Since retiring from medicine 20 years ago, Updegraff continues to play
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Do you have a historical Tucson story to share? Contact Mary Levy Peachin at mary@ peachin.com. Her historical columns usually appear the first week of each month in Inside Tucson Business.
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with low handicappers including former Arizona Regent Fred Boice, retailer Al Touche, travel expert Jim Warren and attorney David Lieberthal, among others. As for courses he enjoys playing at a variety venues — Oro Valley, Ventana, 49ers, Tucson National, and Rolling Hills. He still considers Randolph Golf Course one of the best municipal courses in the country. Golf pro Del Urich, for whom the Randolph South course was named, was one of his buddies. Updegraff appreciates that the game of golf is difficult to learn, and it’s best to start a child between the ages of 5 and 7. The game takes a lot of time. Many of his buddies use range finders to check yardage to the hole. “If it weren’t for those gadgets, we could play in 3½ to 4 hours, the maximum time that should be spent on the course. I always want to pick up the pace because I have to go home to cook dinner,” he says. Updegraff enjoys cooking for wife Jennie to whom he has been married more than 60 years. Time is his biggest concern, not letting a game dragged into 5½-hour ordeal. But when others admire him, they think of Updegraff ’s honesty, integrity and humility. Historically, he is one of greatest of Tucson’s golfers, one who as the Tucson Citizen’s Corky Simpson said, may be the best amateur golfer in the world.
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INSIDE TUCSON BUSINESS
INSIDE TRAVEL
Tucson, Phoenix look at American Airlines bankruptcy differently By David Hatfield Inside Tucson Business The ramifications of American Airlines’ bankruptcy hold two distinctly different potential outcomes for Arizona’s two largest airports and the metro areas they serve. At Tucson International Airport, American is the second busiest airline and carried 23 percent of passengers last year. It is also the airport’s fastest growing airline with passenger counts up 6.4 percent last year. Further, American is a significant employer in the region with about 750 employees at its southwest reservations office, 3350 E. Valencia Road. American has been a major carrier at Tucson since its predecessor Standard Airways was the first airline to set up operations here in 1927. In Phoenix it’s a different story. Although American’s history there dates back nearly as far, to 1930, it now carries just 3.4 percent of Sky Harbor airport’s passengers and is far out-distanced by US Airways that accounts for 46 percent of passengers and Southwest that carries 33 percent. When parent company AMR Corp. filed for Chapter 11 reorganization in November, the airline’s executives outlined plans to emerge from the process as a more cost-efficient carrier, mainly by reducing labor costs and getting out from aircraft leases. Executives at both US Airways and Delta Air Lines seized the opportunity to say they are examining the potential of trying to acquire American. As an added twist, Delta said it’s also looking at the possibility of buying US Airways. Airline analysts and others, including US Airways chairman and CEO Doug Parker, believe consolidation of airlines will lead to financial stability in the industry. At the same time, US Airways as a brand would most likely be a casualty in the merger scenarios. Despite the fact that it is in bankruptcy, American is the nation’s third largest airline and took in $6 billion in revenue in the fourth quarter of 2011. US Airways is the nation’s fifth largest airline with revenue of $3.2 billion in the last quarter of 2011. Delta is the nation’s second largest airline after the newly merged United and Continental, and took in $8.4 billion in revenue in the quarter. With a merger the Tempe headquarters of US Airways would likely go to either to Fort Worth, Texas, home of American, or Atlanta, Delta’s headquarters. Further, Sky Harbor’s position as a hub under a merged airline could be in jeopardy. It would add little value to American’s major international hubs at Dallas-Fort Worth, Chicago and Los Angeles. Its strongest appeal might be for Delta, which would most likely choose
between Phoenix or Salt Lake City, where it currently has a hub. In the airline world of hubs and spokes, Tucson is at the end of a spoke. In terms of service, the biggest loss might be some or all of the flights to Phoenix.
Positive signs This year started out much as 2011 ended with January passenger counts at Tucson International Airport down 0.8 percent from January 2011. But a closer inspection suggests there are some positive signs. Southwest, the airport’s busiest airline, saw its passenger counts drop 8.5 percent but that had all to do with temporary pullbacks on service — dropping one of five round-trips to Las Vegas and one of four round-trips to San Diego. That accounts for about 200 seats of the 226 seats average daily capacity decline at the airport. All totaled the reduction in seat capacity was 3.4 percent compared with January 2011 but with passenger totals down 0.8 percent that means planes left Tucson with more seats filled, something that tends to make airlines happier. Beyond that, American and Alaska substantially increased capacity and saw passenger growth last month. Delta’s passenger totals were also up.
was the fourth airline to start service here. It discontinued service for two years from 1984 to 1986 while it was in Chapter 11 bankruptcy reorganization. United has beein in Tucson since 1980.
Frontier withdrawal It remains to be seen when — or if — Frontier Airlines will return after it discontinues service May 17 under its decision this month to make Tucson a “seasonal destination.” The decision is rooted in Frontier’s precarious finances. Since being acquired out of banktruptcy in August 2009 by Republic Airways Holdings and merged with the former Midwest Airlines, Frontier has faced an uphill battle to be profitable. And now Republic, which is mainly in the business of operating regional airlines under contracts to the major carriers, wants to either sell or spinoff Frontier by the end of the year. To that end it is aggressively cutting costs. Meanwhile, Frontier is getting squeezed by competitors. At Denver’s airport, through which Frontier funnels 80 percent of its passengers, the airline is caught between United, which also operates a hub there, and Southwest, which in just six years has grown to surpass Frontier as the airport’s second busiest carrier.
Tucson service note American Eagle’s fourth daily roundtrip flight to Los Angeles is going to be short-lived. The additional flights, which started Feb. 9 have been removed from the schedule effective April 3. American Eagle will still continue to offer three round-trips a day to LAX.
The name Continental is due to go away as of March 4, which completes the merger of United and Continental airlines. Technically, the two carriers merged in 2010 and they began operating in the Federal Aviation Administration’s eyes as one carrier late last year but full integration had been delayed due to issues mainly surrounding their separate reservations software. Now the race is on to finish up the details at airports. The airline’s officials say they expect to have the signage at all but a handful of airports changed over in time. At Tucson International, the plan is to consolidate the two counters into the space currently occupied by United just east of the entryway to the B concourse. The combined airline will continue to use all three gates the two airlines have been using. Continental has operated at Tucson International since 1961 when it
Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237. Inside Business Travel appears the fourth week of each month in Inside Tucson Business.
TUCSON INTERNATIONAL AIRPORT 2012 PASSENGER STATISTICS Passenger counts at Tucson International Airport in January were down 0.8% from January 2011. This chart shows each airlines’ passenger totals and market share for January 2012 compared with January 2011.
Airline
2012 2011 Change Passengers Market Passengers Market Passengers % Share
Nonstop destinations
Continental goes away
Meanwhile, though, Frontier is going out with a sale. Actually the sale is billed as a Leap Year sale but the airline is offering some impressive fares for tickets purchased by 9:59 p.m. Feb. 29. The fares are for flights on Mondays through Thursdays and Saturdays on flights through May 9 and must be purchased at least seven days in advance. They are capacity-controlled so they are subject to being sold out and there are three blackout dates, March 31 and April 5 and 9. Round-trip purchase is not required. The lowest priced one-way fares from Tucson are $90 each way to Denver; $106 to Austin, Texas; $111 to Colorado Springs or Provo, Utah; $117 to Grand Rapids, Mich.; $121 to Ironwood or Manistee/ Ludington, Mich., Nashville, Tenn., New York LaGuardia, Philadelphia, or Portland, Ore.; $124 to Milwaukee, Wis., or Minneapolis/St. Paul; $126 to Seattle; $129 to Des Moines, Iowa, or Sioux Falls, S.D.; $131 to San Antonio, Texas; $134 to Chicago Midway or Salt Lake City; $139 to Omaha, Neb.; $142 to Oklahoma City; $143 to Rockford, Ill.; and $146 to Louisville, Ky., Spokane or St. Louis.
Southwest
93,751
32.1%
Share
102,416 34.8%
-8,665
-8.5%
61,554 20.9%
+8,344
+13.6%
34,927 11.9%
-95
-0.3%
Albuquerque, Baltimore, Chicago Midway, Denver, Las Vegas, Los Angeles, San Diego
American
69,898
24.0%
Chicago O’Hare, Dallas-Fort Worth, Los Angeles
US Airways
34,832
11.9%
28,422
9.7%
27,364
9.3%
+1,058
+3.9%
9.3%
32,132 10.9%
-4,965
-15.5%
Phoenix
Delta
Atlanta, Minneapolis-St. Paul, Salt Lake City
United
27,167
Denver, Houston Intercontinental, Los Angeles, San Francisco
Continental
13,721
4.7%
14,191
4.8%
-470
-3.3%
12,400
4.3%
12,748
4.3%
-348
-2.7%
11,538
4.0%
8,817
3.0%
+2,721
+30.8%
-2,420
-0.8%
Houston Intercontinental
Frontier Denver
Alaska Seattle
Totals
291,729
294,149
Source: Tucson Airport Authority Airline totals include passengers on branded flights operated by contracted carriers: American (American Eagle), Continental Express (ExpressJet), Delta Connection (SkyWest), United Express (SkyWest) and US Airways Express (Mesa and SkyWest).
InsideTucsonBusiness.com
FEBRUARY 24, 2012
21
CAPITOL
GOP lawmakers unveil state budget and the clash begins By Hank Stephenson Inside Tucson Busines PHOENIX — Before lawmakers could begin reviewing Republican leaders’ proposed state budget this week, Gov. Jan Brewer’s office said it was dead on arrival to her desk. The proposal, released on Monday (Feb. 20) less than 18 hours before committees were scheduled to begin reviewing it, calls for $8.65 billion in spending. That’s about $200 million less than Brewer had proposed in January. The most notable differences between the two budgets is in spending for K-12 education, universities, programs for the poor and public safety. Nearly everyone who appeared at Tuesday’s committee hearings opposed it. Democratic lawmakers also complained Republicans were being sneaky and about the quick speed at which they were expected to decide on the budget. Republican leadership said getting primary committee approval on the budget package was just the beginning of the process, and the public and state agencies would have weeks to comment on the budget as the process continues. Rep. John Kavanagh, R-Fountain Hills, chairman of the House Appropriations Committee, said the budget prepares Arizona for the future, which is uncertain at best. With the voter-approved one-cent sales tax increase ending in 2013, Kavanagh said he expects the state to take a hit of about $1 million the following year. The federal health care law set to go into effect in 2014 will also cost the state, he said, and the economy may not be as rosy some are predicting. The Legislature’s proposed budget puts $250 million into a rainy day fund and banks another $200 million for debt repayment next year. Neither of those were included in Brewer’s plan. “We promised the people a balanced budget without gimmicks, without sweeps, without borrowing and without reductions — and we delivered with this budget,” Kavanagh said. “Clearly, the restorations, if you will, are few and far between... This is a work in progress and you’ll see changes in it, but you’re not going to see big changes in it.”
What’s out Items that Gov. Jan Brewer wanted included in the state budget but left out of the Legislature’s proposal include: • $200 million to K-12 school building repairs and for soft capital funding, which pays for computers and textbooks, and hasn’t been fully funded since 2008. • $50 million to fund reading programs in kindergarten, first and seconds grades to prepare students for a third-grade test
called “Move on When Reading,” which, starting in 2013, students would be required to pass before going into the fourth grade. • $15 million more funding to the state’s three universities to increase retention rates and degree output. • $10 million in scholarships for community college students who work full-time and are in need of tuition help. Students
could receive up to $2,000 a year for two years. • $50 million for a 500-bed maximumsecurity private prison. • $9.3 million to expand the number of corrections officers. • $6.2 million for new cars for the Department of Public Safety. (The Legislature’s budget allows DPS to buy new cars
with money allocated for safety equipment such as guns, bullets and vests.) • $25 million to backfill federal cuts Child Protective Services and services for the elderly. • $17 million to backfill federal cuts to foster care programs. • $7 million for the Arizona Office of Tourism.
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INSIDE TUCSON BUSINESS
FINANCE YOUR MONEY
There is financial power in tax-deferred investments As an investor, you may sometimes feel frustrated. After all, your portfolio seems to be at the mercy of the financial markets, where volatility is beyond anyone’s control. Yet you can control the quality of the investments you own and the diversification of those investments to improve your chances of attaining your long-term financial goals. One way to do this is to put as much as you can afford, year after year, into tax-deferred investments. When you contribute to a tax-deferred account, your money has the potential to grow faster than it would if you placed it in a fully taxable investment — that is, an investment on which you paid taxes every year. Over time, this accelerated growth can add up to a big difference in your accumulated savings. For example, if you put $200 each month into a taxable investment that earned a hypothetical 7 percent per year, you’d end up with about $325,000 after 40 years, assuming you were in the 25 percent federal tax bracket. If you put that same $200 per month into a tax-deferred investment that earned the same hypothetical 7 percent a year, you would accumulate about $515,000 — nearly $200,000 more than you’d have with the taxable investment. This example is for illustrative purposes only and doesn’t represent a specific investment or investment strategy. Of course, you will eventually have to pay taxes on the tax-deferred investment, but by the time you’re retired, you might be in a lower tax bracket. Further, depending on how much you choose to withdraw each year from your tax-deferred account, you can have some control over the amount of taxes you’ll pay. Clearly, tax deferral can be a smart choice, but what sort of tax-deferred vehicles are available? One of your most attractive choices will be your employer-sponsored retirement plan, such as a 401(k). Your earnings have the potential to grow on a tax-deferred
TIM BEITHON
basis, and since you typically fund your plan with pre-tax dollars, the more you put in, the lower your annual taxable income as you contribute. If you’re lucky, your employer will even match some
of your contributions. Consequently, it’s almost always a good idea to put in as much as you can afford into your 401(k), up to the contribution limits, and to boost your contributions every time your salary increases. In 2012, you can contribute up to $17,000 to your 401(k), plus an additional $5,500 if you’re 50 or older. Even if you participate in a 401(k) plan, you can probably also contribute to a traditional IRA. Your earnings have the potential to grow tax-deferred and your contributions may be tax deductible, depending on your income level. In 2012, you can put in up to $5,000 to a traditional IRA, or $6,000 if you’re 50 or older. (If you meet certain income guidelines, you might be eligible to contribute to a Roth IRA, which offers tax-free earnings, provided you don’t start taking withdrawals until you’re 59-1/2 and you’ve had your account at least five years.) Finally, if you’ve “maxed out” on both your 401(k) and your IRA, you may want to consider a fixed annuity. Your earnings grow tax-deferred, contribution limits are high, and you can structure your annuity to provide you with an income stream you can’t outlive. The more years in which you invest in tax-deferred vehicles, the better. So start putting the power of tax deferral to work soon.
Contact Tim Beithon, a financial advisor with Edward Jones, at Tim.Beithon@ edwardjones.com or (520) 546-1839. Beithon’s office is at 9525 E. Old Spanish Trail, Suite 111.
TUCSON STOCK EXCHANGE Stock market quotations of some publicly traded companies doing business in Southern Arizona
Company Name
Symbol
Feb. 22
Feb. 15 Change
52-Week 52-Week Low High
Tucson companies Applied Energetics Inc CDEX Inc Providence Service Corp UniSource Energy Corp (Tucson Electric Power) UniSource Energy Corp (Tucson Electric Power)
AERG.OB CEXI.OB PRSC UNS UNS
0.12 0.03 15.00 37.63 31.50
0.06 0.02 14.98 37.53 31.64
0.06 0.01 0.02 0.10 -0.14
0.04 0.01 8.35 32.96 22.76
0.97 0.10 16.59 39.25 33.55
10.38 0.51 3.09 7.95 58.40 9.12 78.93 25.08 52.77 4.73 18.45 32.36 29.28 23.85 31.89 13.01 84.31 39.29 43.69 9.93 52.20 65.82 13.93 44.12 27.02 46.57 59.51 193.87 30.82 60.92 4.71 38.07 33.35 11.26 52.19 23.64 1.13 22.09 26.95 38.71 53.40 37.68 34.44 24.89 43.02 60.05 41.60 8.33 50.41 43.68 22.67 36.96 52.08 11.99 9.02 42.35 31.69 52.97 17.27 32.96 37.08 20.94 112.08 52.13 7.70 28.81 58.60 34.29 30.59 7.97 18.79
10.10 0.53 3.20 7.78 57.90 9.22 78.07 25.35 52.67 4.65 18.66 31.72 28.52 20.76 32.97 12.86 83.24 37.83 43.53 10.83 48.86 65.63 14.53 42.40 26.13 45.71 59.00 192.25 30.33 56.65 4.76 37.40 32.96 12.39 50.85 23.75 1.17 23.56 27.43 37.59 55.57 34.97 34.73 27.38 43.18 59.65 42.25 9.03 49.34 43.75 22.53 36.94 52.70 13.06 9.53 41.86 29.40 51.81 16.86 33.41 37.48 23.16 109.41 53.01 8.89 28.63 61.76 33.82 30.17 8.10 18.51
0.28 -0.02 -0.11 0.17 0.50 -0.10 0.86 -0.27 0.10 0.08 -0.21 0.64 0.76 3.09 -1.08 0.15 1.07 1.46 0.16 -0.90 3.34 0.19 -0.60 1.72 0.89 0.86 0.51 1.62 0.49 4.27 -0.05 0.67 0.39 -1.13 1.34 -0.11 -0.04 -1.47 -0.48 1.12 -2.17 2.71 -0.29 -2.49 -0.16 0.40 -0.65 -0.70 1.07 -0.07 0.14 0.02 -0.62 -1.07 -0.51 0.49 2.29 1.16 0.41 -0.45 -0.40 -2.22 2.67 -0.88 -1.19 0.18 -3.16 0.47 0.42 -0.13 0.28
8.45 0.20 2.65 4.92 51.83 7.02 65.35 21.79 43.77 3.30 12.30 21.40 19.19 14.61 22.80 8.49 69.54 31.16 31.30 6.41 37.87 43.64 8.03 28.85 16.92 28.13 41.22 151.71 24.53 39.87 2.69 27.85 25.73 5.02 42.14 21.14 0.49 12.14 18.07 32.90 38.64 22.50 25.49 13.68 33.20 49.20 23.44 3.29 38.35 34.02 15.93 30.98 51.14 10.47 7.15 32.12 20.96 45.28 14.10 24.34 27.62 15.92 77.73 37.08 4.53 20.10 48.31 30.34 22.58 4.44 13.18
18.47 7.01 6.29 14.70 66.64 13.01 87.65 33.27 59.59 7.29 29.88 47.60 29.28 42.50 51.43 14.66 88.68 43.49 45.00 11.64 61.08 70.15 14.79 58.75 29.68 48.07 62.28 194.90 35.79 58.90 6.18 47.80 38.40 13.90 57.39 25.85 3.47 24.35 28.46 44.46 56.51 38.22 39.44 28.66 53.20 70.61 43.18 9.31 53.12 45.65 25.43 40.75 90.67 17.28 12.88 43.22 31.89 56.00 23.46 36.71 39.24 27.67 117.40 58.29 10.35 29.74 62.63 47.11 32.97 8.51 24.92
Southern Arizona presence Alcoa Inc (Huck Fasteners) AA AMR Corp (American Airlines) AMR Augusta Resource Corp (Rosemont Mine) AZC Bank Of America Corp BAC Bank of Montreal (M&I Bank) BMO BBVA Compass BBV Berkshire Hathaway (Geico, Long Cos) BRK-B* Best Buy Co Inc BBY BOK Financial Corp (Bank of Arizona) BOKF Bombardier Inc* (Bombardier Aerospace) BBDB CB Richard Ellis Group CBG Citigroup Inc C Comcast Corp CMCSA Community Health Sys (Northwest Med Cntrs) CYH Computer Sciences Corp CSC Convergys Corp CVG Costco Wholesale Corp COST CenturyLink (Qwest Communications) CTL Cvs/Caremark (CVS pharmacy) CVS Delta Air Lines DAL Dillard Department Stores DDS Dover Corp (Sargent Controls & Aerospace) DOV DR Horton Inc DHI Freeport-McMoRan (Phelps Dodge) FCX Granite Construction Inc GVA Home Depot Inc HD Honeywell Intl Inc HON IBM IBM Iron Mountain IRM Intuit Inc INTU Journal Communications (KGUN 9, KMXZ) JRN JP Morgan Chase & Co JPM Kaman Corp (Electro-Optics Develpmnt Cntr) KAMN KB Home KBH Kohls Corp KSS Kroger Co (Fry's Food Stores) KR Lee Enterprises (Arizona Daily Star) LEE Lennar Corporation LEN Lowe's Cos (Lowe's Home Improvement) LOW Loews Corp (Ventana Canyon Resort) L Macerich Co (Westcor, La Encantada) MAC Macy's Inc M Marriott Intl Inc MAR Meritage Homes Corp MTH Northern Trust Corp NTRS Northrop Grumman Corp NOC Penney, J.C. JCP Pulte Homes Inc (Pulte, Del Webb) PHM Raytheon Co (Raytheon Missile Systems) RTN Roche Holdings AG (Ventana Medical Systems) RHHBY Safeway Inc SWY Sanofi-Aventis SA SNY Sears Holdings (Sears, Kmart, Customer Care) SHLD SkyWest Inc SKYW Southwest Airlines Co LUV Southwest Gas Corp SWX Stantec Inc STN Target Corp TGT TeleTech Holdings Inc TTEC Texas Instruments Inc TXN Time Warner Inc (AOL) TWX Ual Corp (United Airlines) UAUA Union Pacific Corp UNP Apollo Group Inc (University of Phoenix) APOL US Airways Group Inc LCC US Bancorp (US Bank) USB Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT Walgreen Co WAG Wells Fargo & Co WFC Western Alliance Bancorp (Alliance Bank) WAL Zions Bancorp (National Bank of Arizona) ZION Data Source: Dow Jones Market Watch *Quotes in U.S. dollars, except Bombardier is Canadian dollars.
InsideTucsonBusiness.com
FEBRUARY 24, 2012
23
INSIDE REAL ESTATE & CONSTRUCTION Distressed sales dominated 80% of 2011 housing market By Roger Yohem Inside Tucson Business Was 2011 just one big year-long clearance sale? Due to an “over stock” of product and drastically reduced prices, about 12,800 homes sold last year, most of them in the distressed merchandise “bargain bin.” “It’s reasonable that 80 percent of sales were distressed,” said housing analyst John Strobeck, owner of Bright Future Business Consultants. In examining the data, Strobeck emphasized there is not a definitive process that pinpoints the exact number of distressed sales. However, there are various ways to dissect the data that results in a fair estimate. For starters, about 33 percent of all sales in 2011 were clearly and correctly identified as foreclosures. “Although short sales aren’t clearly coded as such, my estimate is that short sales made up about another third of sales. And about another 10 percent were home owners who had to do something before being forced into a short sale or foreclosure. I also would classify these as distressed,” he said. Declining prices incented many buyers, as both average and median prices fell from January through December 2011. The average sales price slid to $161,500 from about $167,000. For the same period, median prices dropped to $120,000 from $134,000, according to new year-end data from the Tucson Association of Realtors Multiple Listing Service. To put values into a more meaningful scale, Coldwell Banker Residential Brokerage calculates the selling price per square foot. This “normalizes” the mix of high-end, million-dollar homes that are sold to better determine “the true direction of property values,” explained president Malcolm MacEwen. Their analysis showed a January to December price drop of about 7 percent, from $88 to $82 per square foot. So far this year, there have been some signs of stability that appear to be settling in. The consensus among housing experts is that prices will likely drift downward another 2 percent or so until the fourth quarter when the last of the five-year adjustable rate mortgages reset. “But at this point, any minor drops in home prices are really insignificant,” said Strobeck. Since 2010, home sales have increased slowly. Inventory is beginning to trend down. And January 2012 sales of 915 units were 17 percent higher than a year ago.
Best sellers With a 67 percent sales clip, the southwest side zip code of 85757 was the region’s best-selling neighborhood in January. In this area near Ryan Air Field south of Ajo
For a more precise indication of home values, Coldwell Banker calculates the sales price per square foot.
Way, 29 of 43 listings were sold. The next best area was zip code 85756 where 30 of 58 units sold, a 52 percent ratio. This is the area around Tucson International Airport between Interstates 19 and 10. As for inventory, the most listings were in Green Valley where 299 homes were on the market. Next highest was at the north end of the region in zip code 85739 where there were 285 homes. The zip code is along North Oracle Road from Catalina State Park north to the junctions of State Routes 77 and 79. Overall, there were 4,840 listings in the region in January, 32 percent fewer than 7,147 of a year ago. Compared to December 2011, the number was down by 71, according to the Tucson Association of Realtors Multiple Listing Service.
Sales and leases • Quiktrip Corporation purchased 51,000 square feet of land on the east side of Alvernon Way south of 22nd Street from Evergreen – 22nd & Alvernon for $1.2 million. The site is roughly a one-acre portion of the former 20-acre DeAnza Drive-in Theater. The buyer plans to build a convenience store-gas station on the site. The transaction was handled by Greg Furrier and Rob Tomlinson, Picor Commercial Real Estate
Services. • Fiesta Avenue Property LLC purchased 3.38 acres of commercial land at 6415 S. Fiesta Ave. from Crimson Associates for $159,000. The seller was represented by Brandon Rodgers, Picor. The buyer was represented by Andrew Sternberg, Oxford Realty Advisors. • Mark Sublette Medicine Man Gallery leased 5,819 square foot at 7000 E. Tanque Verde Road, Suite 16, from Westwood Financial Corporation, represented by Craig Finfrock, Commercial Retail Advisors. • Reliance Commercial Construction Inc. leased a 5,000 square foot building at 3540 S. Campbell Ave. from D & L Enterprise LLC, represented by Rick Borane, Volk Company Commercial Real Estate. • Electronic Transaction Systems Corporation leased 4,361 square feet of space at 7601 N. Oracle Road, Suite 101, from National Bank of Arizona, represented by Michael Gross, Tucson Realty & Trust. Ike Isaacson, CBRE, represented the tenant. • Petra M. Meza and Guilibaldo Murrieta leased a 4,009 square foot building at 1285 W. Ajo Way from Jacob F. Struble Properties LLC, represented by David Hammack, Volk Company Commercial Real Estate.
WEEKLY MORTGAGE RATES Program 30 YEAR 15 YEAR 3/1 ARM
Current
Last Week
2/21/2012
One 12 Month 12 Month Year Ago High Low
4.00% 4.25%APR 3.88% 4.125%APR 6.18% 3.50% 3.75%APR 3.35% 3.56% APR 5.94% 3.00% 3.375%APR 3.00% 3.375% APR
6.88% 6.75%
The above rates have a 1% origination fee and 0 discount . FNMA/FHLMC maximum conforming loan amount is $417,000 Conventional Jumbo loans are loans above $417,000 Information provided by Randy Hotchkiss, National Certified Mortgage Consultant (CMC) Peoples Mortgage Company, 1610 E. River Road, Suite-118 Tucson, Arizona 85718 • 520-324-000 MB #0115327. Rates are subject to change without notice based upon market conditions.
3.88% 3.25%
• Tetra Tech leased 3,140 square feet at 3011 W. Ina Road from Sherrill Monter, represented by John Yarborough, Romano Real Estate. • Amelia Grey’s Tea Garden leased a 2,700 square foot building at 3067 N. Campbell Ave. from Campbell Mercado Shoppes LLC. The tenant was represented by David Hammack, Volk Company Commercial Real Estate. • Ron Barber Campaign Office leased 2,390 square feet at 3400 E. Speedway, Suites 112-114, from Rancho Center LLC, represented by Debbie Heslop, Volk Company Commercial Real Estate. • Green Communications LLC leased 1,032 square feet at 2536 S. Kolb Road from Central One Inc., represented by Debbie Heslop of Volk Company. Dave Dutson of CBRE represented the tenant. • Rattlesnake Espresso leased 1,000 square feet at 8407 E. Broadway Blvd. Suite 101, from Garcia Family, represented by Rob Tomlinson of Picor. • Pirate Kustoms leased 1,000 square feet at 2112 N. Dragoon, Suite 10 from Rich Rodgers South Inc., represented by Brandon Rodgers of Picor.
Email news items for this column to ryohem@azbiz.com. Inside Real Estate & Construction appears weekly.
THE PULSE: Median Price Active Listings New Listings Pending Sales Homes Closed
TUCSON REAL ESTATE
2/13/2012
2/6/2012
$129,000 6,584 374 74 207
$123,500 5,429 413 455 149
Source: Long Realty Research Center
24 FEBRUARY 24, 2012
INSIDE TUCSON BUSINESS
EDITORIAL BIZ BUZZ
Eeny, meeny, miny, moe where should vote go? I’ve got my suspicions that a lot of Republicans read Inside Tucson Business. Maybe even a majority of our readers are registered with the Grand Old Party. I don’t know that for a fact, though. One very well-known local businessman once told me the Republican Party tends to be the one that supports business, even though he himself was a registered Democrat. Quite often he DAVID HATFIELD contributes money to Republican candidates. I wouldn’t be surprised if most people who’ve heard his name believe he is a Republican. Anyway, Arizona Republicans have a decision to make by Tuesday (Feb. 28) in choosing which candidate they’d like to see be at the top of their party’s ticket this year to challenge President Obama. It’s a tough call, not helped by the fact that there are 23 candidates on the ballot, most with names you’ve never heard before. Among the front-runners, Mitt Romney seems to have been the candidate to beat and a lot of Republicans want to see that happen. He gets support from business leaders. Judging by what friends who’ve heard him speak say, he is smart. Others say that while he is a pleasant enough individual, his public persona doesn’t portray that very well. The question I would ask is if Romney were to be president, what changes? It’s not like Obama has done all that much to change Washington’s course. Wall Street has been taken care of while Arizona businesses are finding it difficult to feel the love. Rick Santorum is supposed to be hot right now but he’s scary. His candidacy is based on an interpretation of Christian values. You get the feeling he’d be among those yelling the loudest if someone were to propose the U.S. adopt Sharia law but would have no problem adopting a view of Christian law. The Founding Fathers separated church and state for a reason and it’s the basis for many of the freedoms in this country. Newt Gingrich has had successes in other states knocking off Romney but is there another human being running who is less likeable? I couldn’t care less about his marriages but why does he have to be so blatantly hypocritical about American social values? He should quit trying to blame others. One of my most cherished memories was working in Sacramento, Calif., when Ronald Reagan was governor. There was a guy who knew what he wanted and how to get it done, careful not to let a faction get too much influence over what he saw as the defining issues of conservatism. Even if he didn’t get all that he wanted, he did what he could to move the needle. I’m not sure today’s candidates are capable of that. What Republican candidate will make fundamental changes where necessary to get the U.S. economy back in gear for all Americans? What candidate sees that as the priority? Maybe it’s somebody in those other 19 candidates who are on the ballot. Arizona Republicans might be hard-pressed to come up with the answer. After all, has anyone seen a candidate here lately? It makes it hard to choose.
Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237.
EDITORIAL
You missed the point: We need less government The ink had no sooner dried on the Inside Tucson Business editorial two weeks ago when we began to hear about it — namely from Tucson Mayor Jonathan Rothschild, who in his State of the City speech, called on his and other municipalities to get to work annexing more of unincorporated Pima County. What part of the statement “we don’t want more government” isn’t getting through? Proponents of the notion that we should all live in a city keep harping on the idea that the Tucson region is losing out on state shared revenue that is disproportionately going to Phoenix. Yes, it is true that the formula for doling out money favors incorporated municipalities. But a resident currently living in an unincorporated area will have to pay more in city sales taxes and possibly property taxes to get that money. We all know extra layers of government don’t come cheap. Further, the amount of revenue from some taxing sources, such as the gas tax or sales tax, wouldn’t change as a result of incorporation so the formula merely divides up the same sized pie into smaller pieces. There are concerns that Pima County is carrying far more bond debt than any other county in Arizona but that is directly attributable to the fact that 36 percent of Pima County’s nearly 1 million people live in unincorporated and largely suburban areas. That doesn’t happen in any of Arizona’s other 14 counties. But as noted in reporter Patrick McNamara’s story in this week’s Inside Tucson Business, the per capita share of Pima County’s debt is 27 percent less than what the typical Maricopa County resident is on the hook for. And the Pima County resident’s share is less than 15 percent more than the resident of Yuma County. Then there’s the issue of municipal debt. Be thankful you’re not a resident of Cave Creek
where the per capita bond debt tab works out to $12,766.59 — far and away the highest in the state. Even though there’s a significant population that loves to hate the City of Tucson, when it comes to per capita bond debt, Tucson’s $2,148.01 is less than half that of Phoenix ($4,985.35), Glendale ($4,762.02) or Tempe ($4,525.05). We can all argue — and indeed we should argue — whether our respective governments are bonding and spending money appropriately. State Rep. Terri Proud, R-Tucson, has introduced legislation at the prodding of the Town of Marana that would establish a regional bond accountability committee to have oversight of Pima County bonds. The measure strictly targets Pima County in that it applies to any county with population of at least 900,000 but not more than 1.5 million. Any opportunity to keep government spending in check isn’t something we’ll argue against except that the committee created under the bill unduly tilts power to the smallest of municipalities. For example, the 6,562 residents of South Tucson would get a vote equal to 520,116 residents of Tucson that the 353,624 people living in unincorporated Pima County would not have. (There would be one representative for the county who is supposed to represent the entire county, both inside and outside of municipalities.) Our point in that editorial two weeks ago still stands. People who live in unincorporated areas have seen the difference, they know the difference and they don’t think the difference of living in a municipality is worth the taxes. People who are arguing for more incorporation merely want those in unincorporated areas to share their misery. What we should be talking about is less government. Let’s talk de-annexation or disincorporation.
InsideTucsonBusiness.com
FEBRUARY 24, 2012
25
OPINION GUEST OPINION
Failing to maintain transportation will choke recovery Voter approval of the 20-year regional transportation plan in 2006 and the half-cent sales tax to help fund it was a major stroke of good fortune for the region. It has been a most effective stimulus program for our economy. The excise tax has become critically important regionally; several major think-tank studies have recently concluded that communities without funding for needed transportation infrastructure and service improvements now will be at a big disadvantage as economic recovery begins. The funding from the sales tax — over $368.7 million to date — has provided the Regional Transportation Authority (RTA) and its member jurisdictions with vital funding for improvement projects that otherwise would not be possible, especially during the ongoing recession where federal and state dollars for public works projects have been drastically cut. The $370.1 million spent so far has created more 1,800 permanent jobs through the 460 RTA projects completed and transportation services either created or expanded under the $2.1 billion transportation plan. $196 million of RTA funded roadwork is anticipated to begin over the coming year, creating more than 1,000 jobs. Another nearly 500 jobs will be created with the construction of Tucson’s Modern Streetcar that is to run 3.9 miles from the area of the University of Arizona Health Sciences Center, through downtown, and to the west side of the Santa Cruz River. Construction is to start next month, with service beginning in 2014. The RTA is contributing $75 million to the project.
The importance of both the RTA sales tax and the long-term plan it helps support are underscored by several recent think-tank studies that state funding for transportation JAMES DEGROOD infrastructure and services — now — will be key to the economic recovery of communities across the nation. A 2009 report by the American Society of Civil Engineers Report Card for America’s Infrastructure graded U.S. infrastructure a “D,” and a 2011 report showed that deterioration of U.S. roads, bridges, and transit systems cost households and businesses about $130 billion, including $97 billion in vehicle operating costs, $32 billion in travel time delays, $1.2 billion in additional safety costs and $590 million in environmental costs by 2010. Without substantial increases in funding for vital transportation improvement nationally across the board, the report projects that 877,000 high-skill jobs will be lost and U.S. exports would decline by $28 billion per year. Another study, by the National Transportation Infrastructure Finance Commission, states that federal transportation infrastructure funding must increase 175 to 240 percent in the next 20 years to meet anticipated needs for the nation’s highways, bridges, rail and public transit services. Wonder how the Phoenix metropolitan area has been able to get all those freeways,
overpasses, and wide major arterial roadways? The area has had a voter-approved half-cent sales tax for transportation project funding since 1985. Phoenix voters also extended the transportation sales tax for another 20 years in 2005, prior to our region’s successful RTA election. Locally, there are several revenue streams for transportation improvements, including stagnant state and federal gasoline taxes. The purchasing power of our state’s gas tax has been substantially eroded since it was last raised in the early 1990s. Arizona’s road improvement funds have also been reduced as the Legislature has taken funds from the Highway User’s Roadway Fund (HURF) for other purposes. Is it any wonder that our local public works organizations struggle to keep our roads passable? And it will get worse. Auto manufacturers are committed to doubling fuel economy over the next 20 years, which translates to cutting gas tax revenues in half. The RTA also has provided funding to allow for a major boost for regional public transportation, while other sources of transit funding have gone away. The Arizona Lottery used to provide over $3 million a year for transit operations in our region. After more than 20 years this voter-approved direction of lottery revenues was ended during the state budget crisis, putting greater pressure on local governments already struggling to provide basic services. RTA funding has enabled expanded transit services while our regional economy has struggled, providing greater transit opportunities to our area workforce. The Sun Tran bus system is under the aegis of
the City of Tucson. The RTA has provided the funding to buy 123 new buses for the Sun Tran fleet, along with expansion of service hours and new bus routes. According to the American Public Transportation Association, “Many transit agencies saw decreases in state and local funding in the past year. In order to survive, agencies have been forced to cut services, raise fares, or lay off employees, and implement hiring freezes. The actions come even as agencies are expected to serve an increased number of riders.” That infusion of RTA revenue for the new buses and service expansion has paid off in a big way: a recent Brookings Institute study found Tucson to be the fourth highest-ranking public transit system in the country in terms connecting people with jobs using public transit. It’s important because the Tucson metropolitan area has about 32,500 households with no motor vehicles — about 8 percent of the total population, according to the Brookings Institution. Not surprisingly, about 64 percent of those households are low-income, where job-holders or those seeking employment must rely on feet, bicycle pedals or mass transit as their only means of transport. “People take transit for any number of reasons, but one of the most common is to get to work,” the Brookings Institute Metropolitan Policy Program recently observed.
James R. DeGrood, PE, is director of transportation services for the Regional Transportation Authority.
GUEST OPINION
Businesses can help choose how our region grows The Imagine Greater Tucson survey needs the voice of the region’s business community to help choose how our region grows. The survey — available online at www. imaginegreatertucson.org — closes after next Wednesday (Feb. 29). This is your chance to have a say in what is important to you. Things such as less travel time, a vibrant downtown or costefficient infrastructure and public facilities. You also can indicate your preference for placement of new offices and businesses, as well as levels of density as the region builds out over the coming decades. The survey, which compares our region’s future scenario based on current trends with three alternatives, will help guide Imagine Greater Tucson on developing a hybrid scenario to address these big
picture issues that should have been planned out 40 years ago. You may ask why this is important now in light of our current economic conditions. The current BEN KORN conditions, in fact, emphasize why addressing this now is more important than ever. Someone recently stated, “If the economy is good, everything is good,” which is true. Successful people pay taxes on better profitability, which generates more jobs, happy citizens and families and, in turn, funds the safety net needed for
those less fortunate. As the economy builds, regardless of its pace, we have a chance to shape it. We live in a great region, but within that region we must not be blind to the issues we face, such as a lack of resources for needed transportation infrastructure, a lack of funding for landscape improvements on some of our key corridors or roadblocks to improving infill development or better land use planning. This vision, generated from the voices of literally thousands of local survey participants cannot succeed without your buy-in — and most importantly in my opinion — a voice from the small businesses in this community. The Imagine Greater Tucson regional visioning process does not stop after the presentation of the hybrid scenario. In fact,
the visioning process then moves into its implementation phase. So it is crucial that you lend your voice in this portion of the visioning process. Your voice can go a long way toward shaping the recommendations that IGT will ask local jurisdictions to consider and incorporate into their respective general or comprehensive plans. Imagine Greater Tucson is built on the things we all value. I hope you join in on helping to build a stronger foundation for our region’s future to create the community we want.
Ben Korn is vice president of Safeguard Tucson and is part president current board member and development chair of Tucson Young Professionals. He is also board member of Imagine Greater Tucson.
26 FEBRUARY 24, 2012
INSIDE TUCSON BUSINESS
OPINION WAKE UP, TUCSON
Get out the plutonium, we’re going Back to the Future The scene: You’re sitting back in your favorite chair, grab your cup of coffee made from organic shade-grown beans and crack open your Inside Tucson Business. As you meander through the pages you notice a few items that catch your attention. “Tucson Metro Chamber hits 2,500 member mark” After a great year of advocating for local business, the Tucson Metro Chamber doubled its membership in the time since Mike Varney and Bill Holmes took the reins. In a year that featured great networking events and fine service to its members, the chamber took a major step in becoming the true voice of business in Southern Arizona. The chamber merger with Tucson Regional Economic Opportunities, Southern Arizona Leadership Conference, Southern Arizona Lodging And Resort Association and others provided additional members and resources to serve business owners of the region. “Visit Tucson CEO puts Tucson firmly on the map” Despite stakeholder and municipal frustrations with the board of directors Visit Tucson — formerly the Metropolitan Tucson Convention and Visitors Bureau — and its new CEO has the organization back on track. With a new lean and mean approach, Visit Tucson’s focus on hammering home our new brand, special events and truly accountable sales practices has the tourism community’s spirits on an
upward path. “The City of Tucson may be on the right track” Mayor Jonathan Rothschild is starting to see some results from his 180-day plan coming to fruition. JOE HIGGINS After getting through some dicey votes that featured some surprising backbone moments, Rothschild helped manage a smart overhaul of the archaic land use code. The city’s Development Services departCHRIS DeSIMONE ment also went through some big changes, after an undercover investigative reporter did a segment on national TV titled “This Really is the Worst Place to Open a Business.” In a classic “Out of the frying pan and into the fire” moment, Rothschild was heard to quip, “Now only if this damn streetcar doesn’t kill this city!” “Construction of Rosemont Mine is underway” After a December groundbreaking,
construction at the Rosemont Copper mine is underway. After resisting repeated attempts at compensating Pima County more than was necessary, the mine is a go. Setting up headquarters at a local hotel, the employment process for almost 2,000 people, including Democrats, Republicans and Independents, is happening. “A new direction for Pima County” After a stunning November election victory, the Pima County Board of Supervisors’ new Republican majority has launched several initiatives that have shaken the status quo. In a joint statement the majority vowed to address major issues that have confounded taxpayers and business owners, including: • Embracing the municipalities within the county and encouraging their success. The more incorporated land in the county, the more state shared revenue will make its way down from Phoenix. • Providing a fair and predictable environment in which to start and operate businesses. All business owners and developers, regardless of party affiliations or the politicians they throw fundraisers for, will know all of the fees and processes before they put their investment at risk. • Making the Pima County budget 100 percent transparent and accountable. It will start with each supervisor actually appointing three members to the county’s budget committee so it can have a quorum
and hold meetings. There are other headlines that catch your eye, too: “Cats football has great recruiting class after 8-3 season” “David and Posh Beckham buy a home in Stone Canyon” “Ex-President Obama on ‘Dancing with the Stars’ score high local ratings on KGUN” Then you hear phone ring and close up your copy of Inside Tucson Business, thinking to yourself, “That’s the best issue I’ve read so far ... in 2013.” As the director would say “And ... scene!” These headlines will happen if business owners and their employees make it happen. Important changes only come when key leadership changes occur. The next change needs to take place this November. Breaking the majority control on the Board of Supervisors is the game changer for the region. As your golf pro tells you: “Pre-visualize a successful shot and good things will happen.” Start visualizing a great future for the region and make it happen.
Contact Joe Higgins and Chris DeSimone at wakeuptucson@gmail.com. They host “Wake Up Tucson,” 6-8 a.m. weekdays on The Voice KVOI 1030-AM. Their blog is at www.TucsonChoices.com.
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InsideTucsonBusiness.com
FEBRUARY 24, 2012
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