Inside Tucson Business 03/22/13 by Territorial Newspapers

STATE TRUST LAND SEES RESURGENCE Officials preparing for real estate’s return PAGE 5

Your Weekly Business Journal for the Tucson Metro Area WWW.INSIDETUCSONBUSINESS.COM • MARCH 22, 2013 • VOL. 22, NO. 43 • $1

Just in time for summer Blue Bell Ice Cream scoops up site for new facility Page 6

With clock ticking, Gadsden says westside project will meet schedule PAGE 3

Velocity has value

Gordon Bates

New home prices are rising fast Page 19

Four Tucson auto dealerships sold to megadealer Larry H. Miller By David Hatfield Inside Tucson Business The new car buying experience in Tucson is about to undergo a significant change. The Salt Lake City-based Larry H. Miller Dealership Group has acquired four dealerships formerly owned by Avondale Auto Group. The dealerships are: Tucson DodgeRam, 4220 E. 22nd St.; Tucson Chrysler Jeep, 7800 E. 22nd St.; Tucson Volkswagen, 900 W. Auto Mall Drive; and Tucson Fiat, 1000 W. Wetmore Road. Officials with the Miller Group said they weren’t ready to talk about their plans or the acquisition, which closed on March 14. Some top-ranking management at the dealerships have already been changed. The most outwardly visible change likely to occur, say competitors, is that under the new ownership the dealerships will be open on Sundays. In fact, a representative of the Miller Group, who was not authorized to speak about the acquisition, was surprised when told that members of the Tucson New Car Dealers Association close voluntarily on Sundays. That had been the case at all Tucson new car dealerships for years until AutoNation, owner of Dobbs Honda, 810 W. Wetmore Road, and BMW Tucson, 855 W. Wetmore Road, stayed out of the dealers group and quietly broke the tra-

dition four years ago. Whether that will happen with the new competition is yet to be determined and people at other dealerships said they had not discussed it yet. Three of the four dealerships being acquired sell brands competitive with other dealers in the Tucson market. Jim Click also operates Dodge Ram and Chrysler Jeep dealerships and the Chapman Automotive Group has a Volkswagen dealer. The Fiat dealership is exclusive in the Tucson market. The Larry H. Miller Automotive Group is big and tends to operate independently, say people at other Tucsonarea dealerships familiar with their new competitor. The auto industry trade publication WardsAuto ranks the Miller group as 11th largest megadealer in the U.S. with total 2012 revenues of $2.43 billion. The company sold 98,875 units that year, according to WardsAuto. AutoNation topped the list with $13.83 billion in total revenue, selling 508,769 units. The only other megadealer on the list with Tucson operations was Chandlerbased Chapman Automotive, which ranked No. 25 with $1.05 billion in revenues and 36,557 units sold. The largest individual dealership in Tucson is Jim Click Ford Lincoln, which WardsAuto ranked No. 210 on a separate list of the 500 largest dealers in the U.S., based on 2011 sales that included

financing and parts and service. According to the ranking, the Click dealership sold 2,806 units in 2011 and had total revenue of $85.4 million. Holmes Tuttle Ford Lincoln was the next largest, at No. 280 selling 2,340 units with total revenue of $74.4 million. Other Tucson dealerships on the list were Chapman Honda, with total revenue of $62.3 million selling 2,341 units; Mercedes-Benz of Tucson, $55.5 million in revenue selling 998 units; and Jim Click Nissan with revenue of $48.4 million and 1,808 units sold. The Larry H. Miller Dealership Group was started by its late namesake, who after selling auto parts partnered with an uncle in 1979 to open a Toyota dealership in suburban Salt Lake City where Miller grew up, according to the company’s website. From that dealership the company has grown to 56 dealerships selling 40 brands of cars in nine metropolitan areas: Salt Lake City; Denver and Colorado Springs; Albuquerque; Portland, Ore.; Spokane, Wash.; Boise, Idaho; Phoenix and now Tucson. The one brand that is new to the company with the Tucson acquisitions is Fiat. In the Phoenix area, the company has operated a Toyota dealership since 1980 and also has dealerships for Dodge, Hyundai, Nissan and Volkswagen. The dealership group is one of two main profit-making divisions of the Lar-

ry H. Miller Group of companies. The other is the Larry H. Miller Sports & Entertainment division, which owns properties including the NBA Utah Jazz, the Triple-A Salt Lake Bees baseball team, entertainment venues, retail sports apparel stores, movie theaters and a TV and radio station in Salt Lake City. All totaled, according to the company’s website, it owns more than 80 businesses and properties doing business in 41 states. In addition to the primary businesses, the company operates support businesses including a real estate division, financing division and an advertising agency. The company also operates a nonprofit foundation, Larry H. Miller Charities. Miller died in February 2009 at the age of 64 from complications of diabetes, but the company is still run by his family. His wife, Karen Miller, is now the CEO. The couple had five children. The Avondale Auto Group had been in Tucson since 2005 when it acquired the former Bill Breck Dodge and two years later acquired Steve Christy Chrysler Jeep, both of which had been locally owned. The Fiat and Volkswagen dealerships are new and were opened last summer.

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237.

2 MARCH 22, 2013

INSIDE TUCSON BUSINESS

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MARCH 22, 2013

NEWS

With deadline looming, deal could amend Gadsden westside development By Patrick McNamara Inside Tucson Business As the clock ticks down on the latest phase of the City of Tucson and Gadsden Company mixed-use development project on West Congress Street, questions have come up about where the venture stands. “It’s clearly a question that nobody wants to answer,” said City Councilman Steve Kozachik. Gadsden was granted “preferred developer” status as part of a 2008 development agreement with the city that gave it rights to develop four phases of the 14-acre city owned property south of Congress Street and west of Interstate 10. As part of the deal, the company agreed to meet certain deadlines that include contributing $3 million toward construction of the Sun Link modern streetcar project by the end of the second phase. To date, Gadsden has not paid the $3 million, and the second phase is scheduled to end on May 16. “Their first obligation is to pay for the streetcar by May 16th, and I don’t think they have the money,” Kozachik said. The councilman said he’s asked city officials about the status of the development agreement and the streetcar-funding component for months but has not gotten any concrete answers. The issue has been placed on a council study session for April 9 at the request of City Councilwoman Regina Romero. The project is within Ward 1, which Romero represents. When the initial deal was finalized in 2008, the plan divided the property into four development phases, which included construction of retail, hotel, office and residential components.

Phone: (520) 294-1200 Fax: (520) 295-4071 3280 E. Hemisphere Loop, #180 Tucson, AZ 85706-5027 insidetucsonbusiness.com

The first phase of the development was the now-completed Sentinel Plaza affordable senior housing project at 795 W. Congress St. The May 16 deadline for the second phase represents 24 months after the completion of the first phase. The time schedules were established in the 2008 agreement. That second phase includes development of the two sections of the property that front Congress west of Sentinel Plaza. The section known as Block A, at the southeast corner of Congress and Avenida del Convento, was slated for a mix of residential units and retail and the other, known as Block F to the east of Block A. Neither of those properties has been developed to date. Gadsden partner Jerry Dixon said the company is confident it will meet its obligations and the development will move ahead on schedule. “We plan to acquire the land from the city in May,” Dixon said. He said the company has been working with the U.S. Department of Housing and Urban Development for about $20 million to build 236 units of “workforce housing” in Block A. Closing conditions of the second phase include Gadsden conveying infrastructure improvements completed as part of phase 1 to the city, which Dixon said the company has done. Other conditions include Gadsden closing on a construction loan sufficient to pay estimated costs of infrastructure improvements for all the subsequent phases and streetcar improvements. The company also is required to put up a $500,000 performance bond as a guarantee against failure to meet its obligations

under the terms of the deal. Dixon said he anticipates all of the deadlines to be met. As for its obligation to the streetcar infrastructure, Dixon said the company is not required to pay the entire $3 million in one sum. Rather, he said, it pays the city in installments at the closing of each phase. For instance, Dixon said Gadsden intends to make a $525,000 payment to the city when phase 2 closes. When the council meets in April to discuss the Gadsden development, Romero said there likely would be some changes to the time schedule and other amendments to the 2008 agreement. Another possible change would remove Block F from phase 2 and include it in phase 3, which according to the original agreement would close within 3 years of phase 2 closing. Dixon and Romero both said the city has not met some obligations it had under the development deal. That likely will come into play in negotiating with the city. “There’s some things that the city is obliged to do that we might waive,” Dixon said. One of the city’s commitments was to make site improvements to the so-called hole-in-the-ground property south of Cushing Street on the west bank of the Santa Cruz River. Whatever the outcome, Kozachik said he doesn’t want to see the council delay a decision on the issue. “This was supposed to be done back in December,” he said. “I’m not inclined to kick the can down the road.”

Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259.

PUBLISHER THOMAS P. LEE tlee@azbiz.com

STAFF WRITER PATRICK MCNAMARA pmcnamara@azbiz.com

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EDITOR DAVID HATFIELD dhatfield@azbiz.com

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CARTOONIST WES HARGIS

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EDITORIAL INTERNS LAUREN SHORES ALEX WAINWRIGHT`

Inside Tucson Business (ISSN: 1069-5184) is published weekly, 53 times a year, every Monday, for $1 per copy, $50 one year, $85 two years in Pima County; $6 per copy, $52.50 one year, $87.50 two years outside Pima County, by Territorial Newspapers, located at 3280 E. Hemisphere Loop, Suite 180, Tucson, Arizona 85706-5027. (Mailing address: P.O. Box 27087, Tucson, Arizona 85726-7087, telephone: (520) 294-1200.) ©2009 Territorial Newspapers Reproduction or use, without written permission of publisher or editor, for editorial or graphic content prohibited. POSTMASTER: Send address changes to: Inside Tucson Business, P.O. Box 27087, Tucson, AZ 85726-7087.

Pedicone resigns as superintdent of TUSD After nearly 2½ years as superintendent in the Tucson Unified School District (TUSD), John Pedicone decided he has done all he can to put the district “on a positive trajectory” and is resigning as of June 30 so the new school board can find a person for the long-term. In making the announcement Wednesday (March 20), Pedicone noted that when he took the job he said he didn’t view it as lasting any more than three to five years and that he’s only leaving the job about six months sooner than that. School Board President Adelita Grijalva said the board “reluctantly accepted” the resignation, insisting that the board did not force the decision. Pedicone said he came to the conclusion that the timing was right because of the newly constituted five-member school board that as of this year includes newcomers Kristel Ann Foster and Cam Juarez. Pedicone listed numerous accomplishments including increasing the number of students meeting or exceeding state AIMS tests requirements, doubling the number of “B”-rated schools by the Arizona Department of Education and reducing the number of “D” schools by 40 percent, improved training for teachers and administrators and launching full-day kindergarten at every school. Pedicone said he would remain with the district to oversee the preparation of next school year’s budget which needs $17 million in cuts. Grijalva said TUSD would begin a nationwide search for a new superintendent.

PCC chancellor Miles to resign Interim Pima Community College Chancellor Suzanne Miles says she will resign earlier than her previously scheduled departure. Miles notified Pima College employees and board members she will step down as of April 12, instead of the end of June as was originally planned. “It has been an honor serving in this position. Pima Community College is a wonderful, vibrant institution that will surely overcome our present difficulties,” Miles wrote. “However, it has now become clear that my continued service as Interim Chancellor could be viewed as an obstacle to moving forward.” Earlier this month an accreditation organization, the Higher Learning Commission, notified the college it has considered placing Pima on probation, which could affect the college’s future accreditation status.

EDITION INDEX Public Notices Lists Inside Media On the Menu Arts and Culture Profile Briefs

6 7-8 10 14 14 15 17

Finance Real Estate & Construction Biz Buzz Editorial Classifieds

18 19 20 20 23

4 MARCH 22, 2013

INSIDE TUCSON BUSINESS

NEWS

Accelerate celebrates grand opening, says ‘potential’ brought it to region

SynCardia Systems, 1992 E. Silverlake Road, the privately-held maker of the first Total Artificial Heart, announced Wednesday it has raised $19 million in long-term growth capital to grow its product line. The money includes $15 million in structured financing from Athyrium Opportunities Fund and $4 million in additional equity investment from existing shareholders. Michael Garippa, chairman, CEO and president of SynCardia, says the money will help the company with its commercialization of a wearable power supply for the Total Artificial Heart and accelerate the launch of a new Total Artificial Heart designed for people of smaller stature, including women and adolescents. Garippa said the company generated $25 million in revenue in 2012 from a recordbreaking 125 implants at more than 50 centers around the world. SynCardia’s Total Artificial Heart is the only such device that has been approved by the U.S. Food and Drug Administration, Health Canada and the CE in Europe.

Tucson Chamber and city adopt business strategy In an effort to foster business-friendly conditions, City of Tucson and Tucson Metro Chamber officials have adopted a Joint Business Objectives agreement focusing on efficiency and regulatory consistency. It will be led by city Development Services Director Ernie Duarte. The agreement outlines how developers, contractors and other parties will be served by the city. It also cites the expectations of city employees for those same parties. “The document demonstrates that the city is serious about having positive relationships and outcomes with the private sector,” said mayor Jonathan Rothschild. The pact addresses several permitting, inspection and licensing issues that have been the source of people in the private sector. For example, the city is pledging to operate in a “predictable regulatory environment” whose inspectors will apply regulations in a uniform, consistent manner. It also pledges that comments and complaints will be accepted anonymously without fear of retribution. In addition, fees and taxes will be assessed fairly to encourage businesses to locate and remain in the city. Chamber president Mike Varney commended Rothschild and city officials for “memorializing their commitment” to the business community. The chamber has posted the agreement online at www.tucsonchamber.org/jointbusinessobjectives.

Chance Agrella/TREO

Artificial heart maker raises $19M for growth

Accelerate CEO Larry Mehren, center, introduces some of the new employees the company has hired since moving to Tucson from Colorado.

By Patrick McNamara Inside Tucson Business It was a huge score for Tucson Regional Economic Opportunities (TREO): Convincing a bonafide high-tech company from out of market to relocate to the Tucson region. Now that score has come to fruition, as the formerly Denver-based Accelerate Diagnostics has completed the build-out of its 15,000-square foot laboratory and office space in the Pima County Health Department’s Dr. Herbert K. Abrams Public Health Center, 3950 S. Country Club Road. “This is a really great deal for us and we think a great deal for Tucson,” said Larry Mehren, CEO of Accelerate. The company showed off its new facilities March 14 to invited business leaders and elected and other government leaders. It made sense for government leaders to attend, as they no doubt want to see what their investment bought. In an effort to entice Accelerate, which changed its name Dec. 26 from Acceler8 Technology Corp., TREO, Pima County and the Arizona Commerce Authority plied the company with potential financial incentives. The Commerce Authority provided the company with a package worth $1.7 million in the form of a grant and a loan. Pima County pitched in with $700,000 to help fund laboratory and workspace upgrades. The company also will receive reduced rent at the county building until 2016, when the monthly rent is increased to market

prices. To benefit from the incentives, Accelerate must meet an employment threshold of hiring at least 65 employees in three years at an average salary of $63,000 per year. Accelerate has already hired at least 30 employees and says it plans to hire 20 more soon. The company also must invest at least $4.52 million in capital expenditures over the next three years. It also must acquire or lease what Arizona classifies as business personal property used in operating or advancing its Tucson operation. “In our decision to come to Tucson, it was always about potential,” Mehren said. He also cited examples of regional potential that helped Accelerate make the decision to move, including the University of Arizona, other medical science companies in the regional cluster, downtown redevelopment and the Sun Link modern streetcar project. But the incentive package that state and regional leaders pulled together for the company also played an important role in the decision, Mehren said. A report in the Denver Business Journal in September, quoted Mehren saying the incentives available in Tucson were too great to pass up. While Colorado had offered some income tax breaks as a way to keep the company, Mehren told the Journal that since the company did not turn a profit and likely wouldn’t for some time, breaks on income tax were meaningless. Accelerate also fielded offers from officials in Michigan before agreeing to come to Tucson.

The company also must invest at least $4.52 million in capital expenditures over the next three years. It also must acquire or lease what Arizona classifies as business personal property used in operating or advancing its Tucson operation. “This is absolutely the right place for us to be,” Mehren said. The company was founded in Colorado in 1982. It develops instruments used in the detection of pathogenic microorganisms. Its in-development BACcel rapid diagnostic system is able to count and identify dangerous pathogens and their drug resistance expression within the same day of obtaining a patient specimen, instead of the two to three days required for standard methods.

Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259

Correction Cox Communications was among the businesses honored by the Society for Human Resource Management Greater Tucson chapter for Innovation Awards. It was one of ﬁve companies that won awards but was left out of a report in the March 15 issue. Cox Communications won the award for its Community Champion program that allows employees to give back to the community. Each quarter an employee is randomly selected from among those who’ve volunteered 24 or more hours and awarded $1,500 to donate to a local school charity.

InsideTucsonBusiness.com

MARCH 22, 2013

NEWS

State land department getting ready for real estate resurgence

This Week’s

Good News Bottom 10 ... for car insurance rates Being in the bottom 10 is good sometimes. Insure.com calculated the rates of more than 750 vehicles at insurance companies in every state. Arizona has the 10th least expensive average rate, at $1,227. That’s $283 less than the national average of $1,510. The highest average was Louisiana, at $2,699. Insure.com said that was due to a high number of bodily injury claims and judges who tend to side against insurance companies. The lowest average was Maine, at $934. Being largely rural with laws that restrict young drivers help keep premiums low.

George Howard

The Tucson

From left, State Land commissioner Vanessa Hickman; Don Diamond of Diamond Ventures; State Land Real Estate Division director James Adams; and MPA executive director Amber Smith.

By Roger Yohem Inside Tucson Business Although buyers have a renewed interest in state trust land in the Phoenix area, it’s still quiet in the Tucson region. Serious offers are still months away but when interest picks up, the most desirable land will be in the Houghton Road Corridor, which they’re already referring to as the HRC. “The HRC is definitely one of our core focus areas. It is probably going to be the place to see a lot of interest here,” said Vanessa Hickman, commissioner of the Arizona State Land Department. “In general, we’ve fielded a few calls about the Tucson area but haven’t seen anything specific. Maybe another year. For Phoenix metro, we’re seeing a resurgence,” she added. Hickman, keynote speaker at a March 15 Metropolitan Pima Alliance forum, said land management and development now operates in “a new reality.” Since the collapse of the housing market, the department has worked to re-plan and re-prioritize state trust land parcels, especially “superblocks” that are larger than 500 acres. The HRC is a superblock of 12,000 undeveloped acres on Tucson’s southeast edge. The intent is to break it into smaller pieces that people “could bite off ” and be more interested in buying. That approach will be tested in an April 24 public auction of 289 acres along Mary Ann Cleveland Way. In January 2008, State Land Department awarded an Urban Planning Permit for the 12,000 acres to shopping center developer

Westcor to develop a master plan for the area. At the time, it was second largest parcel of land in Arizona ever designated for master planning. But that November, Westcor announced it was pulling out of the project, citing the economy at the time. But in 10 months, the company completed preliminary work that is being used for breaking up the site. Hickman and her staff of 116 employees manage 9.3 million acres of state trust land; that’s 12.7 percent of all land in Arizona. They are uniquely part state agency and part fiduciaries. They must maximize revenue for the trust’s 13 beneficiaries that include K-12 education, state universities and even the corrections department. “Every acre has a specific, identified beneficiary. All lands must be appraised at fair market value and cannot be disposed of for less than that amount. If there are natural products on our lands, those must all be appraised and valued,” said Hickman. “On a daily basis, many different issues and opportunities pop up on different types of land uses. We do our best to work diligently through all the proposals. We have a lot of restrictions (in the Arizona constitution). That’s often why we can’t move faster on proposals,” she explained. To adjust to a changing market, some recent transactions have included leasing land in northern Arizona for wind-power generation and in Yuma for solar projects. In the Tucson region, Freeport McMoRan Copper & Gold bought 8,300 acres for $29.6 million; Caterpillar Proving Grounds acquired 4,500 acres for $12.6 million; and Pima

County bought 1,400 acres for $3.8 million. Together the $46 million “were significant returns for the trust,” said Hickman. Income from traditional uses is still important, such as grazing leases, mineral royalties and sales for development. In the last 18 months, the trust has made $430 million for beneficiaries. Trying to balance the department’s state agency and fiduciary duties can be difficult. On occasion, the dual purposes conflict. Staff can get pulled between factions wanting to do a deal that benefits the state but not necessarily the trust. “We speak for the trust. Everybody doesn’t always understand why we are not doing something that might be in the best interests of the state. We do the best we can to harmonize the two, but sometimes they can be at odds,” the commissioner said. “That explains why and how some decisions are made and takes some of the mystery out of the process.” Statewide, the department controls 650,000 acres of urban land, much of it directly in the path of future development. One of the larger proposals now being reviewed is for a 100-acre residential project in the Phoenix market. “We are everybody’s neighbor. We have land adjacent to every community in this room,” Hickman said. “We’re trying to plan with the communities, to get ready for when the real estate market comes back.”

Contact reporter Roger Yohem at ryohem@azbiz.com or (520) 295-4254.

INSIDER Insights and trends on developing and ongoing Tucson regional business news.

Hearing it ﬁrst-hand State Rep. Ethan Orr, R-Tucson is working to bring people with all points of view together to hear each other’s concerns firsthand. “I want to bring people who very much influence our community into our community,” Orr says. Last week, he scored a success with the Metropolitan Pima Alliance. It was his idea to bring State Trust Land Commissioner Vanessa Hickman to Tucson to keynote a special forum. The room at the Tucson Association of Realtors was packed, with nearly 200 people. Next up, Orr is working to identify and convince other state leaders to come down from Phoenix “to have a conversation with our community.”

Marketing gimmick goes only so far University of Arizona Athletics Director Greg Byrne was asked recently whether had considered Arizona Wildcat red instead of green for the new artificial turf currently being installed at Arizona Stadium, like Boise State has done to its football field. Byrne quickly discounted the idea, but seemed as if he had thought about it. The trouble, he said, is what happens to the color red after it has been exposed to the sun— it turns pink.

6 MARCH 22, 2013

INSIDE TUCSON BUSINESS

Selected public records of Southern Arizona bankruptcies and liens.

By Patrick McNamara Inside Tucson Business

BANKRUPTCIES Chapter 13 Reorganization Arizona John’s Enterprises & Equipment LLC, doing business as Arizona John’s Recycling Centers, 12505 N. Musket Place, Marana. Principal: John C. Buchanan, president. Assets: $1,200,000.00. Liabilities: $123,719.63. Largest creditor(s): Scottsdale Mortgage and Investment, Scottsdale, $82,519.63. Case No. 4:13-bk-03934 ﬁled March 18. Law ﬁrm: Pro se

FORECLOSURE NOTICES DeMarranville Corporation Inc. 8168 S. Cover View Road, Three Points 85736 Tax parcel: 209-23-3020 Original Principal: $23,000.00 Beneﬁciary: Newland Investments LLP Auction time and date: 11:30 a.m. June 6, 2013 Trustee: Jeffrey S. Katz, 2823 E. Speedway, Suite 201

LIENS Federal tax liens Meyer’s Creative Concepts Paint & Body LLC and Michael Holmes, 2550 E. Grant Road. Amount owed: $1,811.22. A&L Auto Care and Arturo P. Estrada, 4325 S. Sixth Ave. Amount owed: $8,642.51. Checkered Flag Construction LLC and Armando R. Rico, 3042 W. Carnauba St. Amount owed: $1,847.22. Tucson Rehabilitation Medicine Associates PC, 1921 W. Hospital Drive. Amount owed: $3,154.70. Tucson Fleet Transmission & Transaxle Exchange Corp., 2208 N. Stone Ave. Amount owed: $1,223.71. Hermosillo Door To Door Tourist Van and Hermosillo Shuttles LLC, 5117 S. 12th Ave. Amount owed: $5,733.44. Appliance Installation of California and Appliance Installations Inc., 7932 E. Shimmering Way. Amount owed: $20,469.42. Murray Appraisal & Claims and Hutsell Enterprises Inc., 9440 W. Placita Chivato. Amount owed: $12,527.44. Mise-Scene Productions Ltd., 8323 E. 22nd St. Amount owed: $17,408.52. Casa Molina Northwest Inc., 7161 N. Mona Lisa Road. Amount owed: $6,305.40. Majestic Cleaning Service LLC and Eunice Richard, 2321 S. Double O Place. Amount owed: $5,228.05. C&S Management Inc., 4625 E. Broadway. Amount owed: $55,479.98. Mourelatos Tile Inc., 659 S. Watering Hole Place. Amount owed: $18,825.23. Makes Artist Management Co.-MJLJR Propert and Michael J. Lembo Jr., PO Box 35880, 85740. Amount owed: $1,722.65. Steve’s Sound & Security and Charles S. Mihaliak, 3745 N. Gunnison Drive. Amount owed: $4,596.78. Sunset Quality Builders Inc., 131 W. Rolling Hills St., Oro Valley. Amount owed: $46,618.88. Dwight’s of Green Valley LLC, 620 W. Ward Lane, Green Valley. Amount owed: $7,675.94.

State liens (Liens of $1,000 or more ﬁled by the Arizona Department of Revenue or Arizona Department of Economic Security.) Ground Effects Landscaping Inc., 1602 S. Burning Tree Ave. Amount owed: $9,066.46. Solar Store LLC, 2833 N. Country Club Road. Amount owed: $3,515.32. Casas Bonitas Development and Casa Bonitas Development LLC, 4460 W. Ina Road, Marana. Amount owed: $9,960.91.

Mechanics liens (Security interest liens of $1,000 or more ﬁled by those who have supplied labor or materials for property improvements.)

Paciﬁc Insulation Co., 2741 S. Yates Ave., Los Angeles, against General Growth Properties Tenant Coordination, 110 N. Wacker Drive, Chicago; DND Neffson Co. c/o General Growth Properties, PO Box 617905, Chicago 60661; and Boomtown Entertainment LLC, 6263 N. Scottsdale Road, Suite 145, Scottsdale. Property: 4500 N. Oracle Road, Suite 370. Amount owed: $10,959.22.

Blue Bell Creameries is expanding its presence in Southern Arizona with the construction of a distribution facility on Tucson’s southeast side. The company announced the new 14,000-square foot facility, at 9398 E. Old Vail Road, at a groundbreaking event Monday March 18. “We’re absolutely thrilled about what’s happening at this facility,” said Joe Granson, regional sales manager with Blue Bell. Granson said the new facility represents an investment of about $3 million. The company’s 16 Southern Arizona employees will work out of the new location and an additional eight workers are expected to be hired in the future. All Blue Bell ice cream products are made in Texas and Oklahoma and the company, which is based in Brenham, Texas, keeps tight control of its products. They are currently distributed in just 20 southern states from Arizona to Virginia. The limited distribution has helped to create something of a cult following for the company’s products. Granson said Blue Bell, which first became available in Arizona in 2005, has seen rapid growth in the state over the past two years.

Patrick McNamara

PUBLIC NOTICES

NEWS Blue Bell building Tucson ice cream distribution center

From left, Blue Bell regional sales manager Joe Granson, Tucson Metro Chamber Board Chairman Bruce Dusenberry, City of Tucson representative Maricela Solis and Tucson Ward 4 City Councilwoman Shirley Scott at the Blue Bell Creameries Tucson groundbreaking event on Monday (March 18).

“We’ve definitely upped our marketing,” Granson said. Tucson City Councilwoman Shirley Scott attended the groundbreaking and extended a welcome to Blue Bell. Maricela Solis, business advocate for Tucson Mayor Jonathan Rothschild, and Bruce Dusenberry, president and CEO of Horizon Moving Systems and chair of the Tucson Metro Chamber board, also attended the groundbreaking. Construction will be done by the Renais-

sance Companies, Phoenix. Dave Tilson, executive vice president of Renaissance, said the company plans to use Tucson-area subcontractors to complete the build. He said Renaissance was chosen because it previously built other facilities for Blue Bell in the Phoenix area and has a familiarity with its needs. Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259.

Hospitals’ parent forms ‘alliance’ with Cleveland Clinic By Alan M. Petrillo Inside Tucson Business Community Health Systems, the parent company of Northwest Medical Center and Oro Valley Hospital, has formed a “strategic alliance” with Cleveland Clinic, a nonprofit multispecialty academic medical center to focus on three specific areas: quality and reducing costs, cardiovascular services, and clinical and operational services. Both hospitals will maintain their separate identifies and the strategic alliance doesn’t involve the exchange of any ownership stakes, though the Cleveland Clinic will be paid for some of its services. Kim Chimene, director of system marketing for Northwest Medical Center and Oro Valley Hospital, said the alliance is designed to enhance quality patient care, improve access to health services, reduce costs and drive operational excellence for both organizations. She said the alliance “reflects positively on our commitment to quality and clinical excellence, and the strong positive relationship we have established with physicians on our medical staffs. We look forward to being a part of this groundbreaking and innovative

partnership.” Eileen Sheil, executive director of corporate communications for Cleveland Clinic, said the changing face of healthcare means nonprofit and for-profit health care entities are now coming together. “The goal of this alliance is to focus on quality and reducing costs, so we’re hoping we can learn from each other through this strategic relationship,” Sheil said. On the quality alliance front, Cleveland Clinic will assist Community Health Systems in establishing clinical integration programs at its affiliated hospitals. For cardiovascular services, Cleveland Clinic’s Heart & Vascular Institute will assess selected Community Health Systems-affiliated hospitals for the opportunity to apply the institute’s expertise in enhancing the quality and data infrastructure of their programs. The pilot sites have not yet been slected, according to Tomi Galin, vice president for corporate communications with Community Health systems. “Ultimately, we expect all of our affiliated hospitals to benefit from this collaboration through our collective work to continuously increase quality,” Galin said. “The outstanding physicians and employees at Northwest

Medical Center and Oro Valley Hospital provide excellent care for their patients and we look forward to seeing how this relationship can support their work.” Community Health Systems is a publicly traded company headquartered in Franklin, Tenn. It owns or operates 135 hospitals in the U.S. Northwest Medical Center, 6200 N. La Cholla Blvd., is a 300-bed hospital offering inpatient and outpatient services, including cardiology, orthopedics, emergency services, pediatric and adult urgent care, and the Women’s Center for Obstetrics, Gynecology, Oncology and Diagnostics. Oro Valley Hospital, 1551 E. Tangerine Road, Oro Valley, is a full service 96-bed facility with outpatient and inpatient services, including cardiology, cosmetic surgery, emergency services, general surgery, laboratory, oncology, physical rehabilitation, urgent care, cardiopulmonary testing, day surgery, endoscopy-GI lab, imaging, diagnostics, neurology, orthopedics, physical therapy and urology. In Arizona, Community Health Systems also operates Payson Regional Medical Center in Payson and Western Arizona Regional Medical Center in Bullhead City.

InsideTucsonBusiness.com

MARCH 22, 2013

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InsideTucsonBusiness.com

MARCH 22, 2013

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10 MARCH 22, 2013

INSIDE TUCSON BUSINESS

MEDIA

Tucson Weekly no longer available at Circle K stores

Yes, we do have great maps... but we’re more concerned about the direction your business is going. Join the Tucson Metro Chamber today. Phone (520) 792-1212 or visit TucsonChamber.org. TucsonChamber.org

Growing Businesses. Building Communities.

No autographs please. There’s only one credit union in Tucson that has maintained its 5-Star rating for the past six consecutive years. But we won’t tell you who. (nudge, nudge, wink, wink)

By David Hatfield Inside Tucson Business As of this week, readers of the Tucson Weekly are no longer able to find copies of the alternative news publication in Circle K stores. The convenience store chain notified the Weekly March 12 that the March 14 issue would be the final edition of the free weekly it would carry in its stores. Circulation Manager Laura Horvath said Circle K officials told her they were concerned about the content of the Weekly, particularly citing a February issue that had the word “Sex” on the front page. But Horvath said she suspects the decision had more to do with an entertainment publication, AZ Weekly, which has been promoting that it is “the only local weekly entertainment publication” in Arizona Circle K stores. Circle K removed Phoenix New Times from its stores in February. Attempts to reach Circle K officials in Tucson and Phoenix were unsuccessful. It should also be noted the Tucson Weekly is published by Wick Communications, the same company that publishes Inside Tucson Business, which has a different distribution model. Horvath said she is replacing Circle K distribution points as quickly as possible and that racks at locations near high volume stores received additonal copies of the Weekly this week. The Tucson Weekly has also posted an interactive map on its website — www. tucsonweekly.com — showing free distribution locations for the publication. Click on “Find A Weekly” on the navigation bar at the top of the home page. “When a company has as many locations as Circle K does, it’s obviously disappointing that the Tucson Weekly won’t be there each week, for whatever reason,” said editor Dan Gibson. “Still, we have nearly 700 racks around the city and we’re looking for new businesses that would like to be a distribution point. Tucsonans will still be able to find us and if they can’t, we’ll find a way to get a copy into their hands.” That last point he said was a reference by several readers who said they would be willing to pay for delivery of a subscription.

Pimafederal

CREDIT UNION

www.pimafederal.org Federally insured by NCUA

It turns out that KIIM 99.5-FM isn’t being required to go all in rebranding itself with parent company Cumulus Media’s new Nash branding. Astute listeners may have noticed the station is now branding itself, “KIIM FM, powered by Nash, Country for Life.” In a question-and-answer session at a

Country Radio Seminar in Nashville, Tenn., Cumulus CEO Lew Dickey said that while all 83 of the company’s country stations will be affiliated with the brand, the name “Nash” was not a “take it or leave it thing,” he told Sean Ross, a trade media writer specializing in country radio. Considering that KIIM went on the air 30 years ago in December and has been at or near the top of Tucson’s radio ratings almost from the beginning, it’s safe to say the brand is solidly entrenched and probably not worth tampering with at this point.

Names in news Ryan McCredden, who since August 2010 has been program director for Journal Broadcast Group’s the Truth KQTH 104.1-FM and ESPN Radio KFFN 1490-AM/104.9-FM, has left that position to become program director for a pair of CBS-owned sports-talk stations in Houston, where he starts to work Monday (March 25). Before coming to Tucson, McCredden had worked for CBS as assistant program director of the company’s news-talk and sports-talk stations in Dallas. Chris Kelly departed March 8 from his job as operations manager overseeing Clear Channel Media and Entertainment’s Tucson radio stations. According to trade reports, he sent an email to staffers telling them he was moving back to northern Colorado saying, “While I am not completely shutting the door forever on other radio opportunities, I’ve long had a few creative projects I’ve wanted to work on and will pursue them now as ‘Plan A’.” Kelly came to Tucson from Fort Collins in May 2012. In addition to being operations manager, he did an on-air shift from noon-3 p.m. weekdays on My 92.9 KMIY 92.9-FM. In Phoenix, Tim Richards has left his job as program director for Clear Channel’s KZZP and show director for the morning “Johnjay and Rich” show. Before going to Phoenix, Richards was Clear Channel operations manager in Tucson for 7½ years until March 2011. Last week, I wrote that Forrest Carr and the management of Journal Broadcast Group had not determined Carr’s final day on the job as news director. It turns out, it’s today (March 22). Starting Monday, the company is bringing in Wendy MacNeill to be the interim news director.

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237. Inside Tucson Media appears weekly.

InsideTucsonBusiness.com

MARCH 22, 2013

MEDIA LEGAL FRONTLINE

Mandatory social media training considerations There’s a movement afoot by some employers to mandate social media training for all employees to maximize the advantages of using social media in the workplace and avoid public relations and legal disasters. Sound like a good idea? What should be included in social media training? Here are four things to keep in mind: 1. Employers should review with employees the company’s written social media policy. Highlight and discuss the purpose of the policy. Proper use of social media helps with marketing and recruiting and it improves employees’ performance and production. 2. Provide specific examples of wellcrafted and timely tweets or posts. Not all employees are well suited to promoting their employer on social media. Providing templates shows employees how such posts can advance the company. Conversely, show how a thoughtless posting can negatively affect the employee’s future as well as the company with clients, other employees and regulatory agencies. 3. Focus on the legal liabilities that come with improper use of social media. The Federal Trade Commission’s endorsement guidelines include social media. These guidelines suggest that tweets, blogs or postings must disclose “material connections” between the employee endorser and the service or product. Thus, an employee of a leading playback device manufacturer who participates in online message board discussions of new music download technology must clearly disclose his or her relationship to the manufacturer and readers of the message board. Also, defamation laws apply to tweets, postings and blogs. Further, regulated industries may have guidelines regarding the use of social media within their specific industry. For example, the Federal Financial Institutions Examination Council has proposed guide-

lines, titled “Social Media: Consumer Compliance Risk Management Guidance,” setting forth consumer compliance and legal risks as well as reputation, operation and ANN MORGAN employee risks associated with the use of social media. Always note, however, that nothing in the company’s social media policy prohibits employees from discussing wages, working conditions or terms of employment with fellow employees. 4. Discuss ownership of social media account. When an employee is mandated to set up a social media account, the company needs to specifically set out who will keep the account should the employee leave the company. This is particularly true where the employee uses the account for both business and personal purposes. Written nondisclosure and rights to work product agreements, where passwords and access to defined accounts are specifically included within the definition of work product, help establish the boundaries and expectations of the employee. Because social media is more than just chat around the water cooler, providing and mandating formal training can both enhance and protect your company’s business.

Contact Ann Morgan, an attorney with Fennemore Craig who practices in employment law and human resource issues, estate and trust litigation, and general business advice at amorgan@fclaw.com. She is the managing partner of the firm’s office in Reno, Nev. This monthly Legal Frontline column addresses various legal issues that may face business leaders.

11th Annual Saguaro Rotary Texas Hold’em Poker Tournament Proceeds benefit Send a Kid to Science Camp

TABLES ARE FILLING FAST!!

Enter at saguaropoker.wordpress.com

OPEN TO ALL

18 & OLDER

or call Keith at (520) 247-7237 today! Doors open at 5pm & Play begins at 6pm

Saturday March 30th Hotel Tucson

475 N. Granada Ave. (East of I-10)

12 MARCH 22, 2013

INSIDE TUCSON BUSINESS

TRAVEL

Enough talk, time for businesses to support Tucson airport By David Hatfield Inside Tucson Business While there are plenty of people complaining about air service at Tucson International Airport, not enough people — especially the right kind of people — are doing enough to change that. Next month a high-ranking executive with Southwest Airlines is due in Tucson to speak to a conference of airport operators, and as part of that, the Tucson Airport Authority is making arrangements for him to speak to a group of local business leaders. John Jamotta, vice president of network planning for Southwest, is being invited to explain what it takes to spark the interest of airline schedulers. It’s not like the airport hasn’t been trying to attract airlines. Mary Davis, senior director of business development and marketing for the airport authority, has been meeting with airline executives on a regular basis, but there’s a limit — set by the Federal Aviation Administration — to what an airport can do to entice an airline to add or increase service. That’s where businesses come in. Tucson tends to be considered a leisure travel market, and that doesn’t help the chances for

better service because leisure travelers choose flights almost solely based on finding the lowest price. Businesses, on the other hand, consider time and other factors and will pay higher fares to get them. Davis says the struggle is getting businesses to make flying out of Tucson a priority. Southwest’s Jamotta may be just the person to do that. He has plenty of experience. He has worked in the planning department at Southwest since 1987, and before that worked for Pan American Airways.

Passenger traffic falls If there’s a sense of urgency about declining passenger numbers at Tucson International Airport, it’s with good reason. February’s passenger numbers were down 10.2 percent from February 2012, to 276,856. It was the slowest February in 20 years, since 1993 when 208,510 passengers went through the terminal. And February is supposed to be the month when winter visitor travel kicks into high gear. There are some explanations. For starters, the number of available outbound airline seats was down 13.9 percent from a year ago, including a 42 percent cutback in the

TUCSON INTERNATIONAL AIRPORT JANUARY PASSENGER STATISTICS Tucson International Airport started out 2013 with passenger totals down 8.7% from January 2012. Available outbound seat capacity was down 14.5% to an average of 5,504 per day. This table shows each airlines’ passenger totals and market share for January 2013 compared with January 2012.

Airline

January 2013 Passengers Market Share

Non-stop destinations

Southwest

January 2012 Passengers Market

87,695

Change Passengers %

32.9%

93,751

32.1%

-6,056

-6.5%

69,898

24.0%

-1,403

-2.0%

40,888

14.0%

+298

+0.7%

Albuquerque, Chicago Midway, Denver, Las Vegas, Los Angeles, San Diego

American

68,495

25.7%

Chicago O’Hare, Dallas-Fort Worth, Los Angeles

United (Continental)

41,186

15.5%

Denver, Houston Intercontinental, Los Angeles, San Francisco

US Airways

31,560

11.9%

34,832

11.9%

-3,272

-9.4%

28,323

10.6%

28,422

9.7%

-99

-0.3%

3.4%

11,538

4.0%

-2,501

-21.7%

12,400

4.3%

-12,400

-100%

-25,433

-8.7%

Phoenix

Delta

Atlanta, Minneapolis-St. Paul, Salt Lake City

Alaska

9,037

Seattle

Other Frontier Airlines ended service as of May 18 , 2012

Total

266,296

291,729

Source: Tucson Airport Authority Totals include passengers on branded flights operated by contracted carriers: American (includes American Eagle), Delta Connection (SkyWest), United Express (ExpressJet and SkyWest) and US Airways Express (Mesa and SkyWest).

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InsideTucsonBusiness.com

MARCH 22, 2013

TRAVEL number of seats to Denver alone. A good chunk of that can be attributed to Frontier Airlines’ pulling out of the market due to its own financial struggles. Beyond that, Southwest did not bring back the non-stop flights it had last year to Baltimore, Alaska dropped one of its two daily flights to Seattle (though made up some of the difference by substituting a larger plane) and even US Airways reduced the number of its flights to Phoenix. And just to show every little bit counts, this February was one day shorter than February 2012. There are positive signs that March traffic will pick up. Dick Gruentzel, vice president of administration and finance and chief financial officer for the airport authority, says Southwest is operating a third daily flight between Tucson and Denver and Delta Air Lines is operating two flights on certain days to Minneapolis-St. Paul.

erators and airlines to Tucson and, hopefully show off the region ina way that might lead to other benefits.

American to Hermosillo As the executives at US Airways and American Airlines continue to speak positively about the benefits of their proposed merger, they’ve said little in the way of specifics about such matters as whether Phoenix Sky Harbor International Airport will will continue to be a major hub. There was a curious development on that front this month when American announced it will begin serving General Ignacio Pesqueira García International Airport in Hermosillo, Sonora, starting June 12. While it’s doubtful Tucsonans will rush to take the flights that will involve connecting at Dallas-Fort Worth, it’s noteworthy that Hermosillo was one of four destinations in Mexico that is currently only served from Phoenix. The Dallas flights will now give Hermosillo-bound travelers an alternative to Phoenix.

Airport conference The primary reason for Southwest Airlines’ John Jamotta trip to Tucson next month is to be the keynote speaker for the Western Airports Conference being put on by the Sixel Consulting Group, the Tucson Airport Authority’s air service consultant. The conference, which will be April 9-11 at the Westward Look Wyndham Grand Resort and Spa, will bring regional airport op-

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237. Inside Business Travel appears the fourth week of each month.

Polish airport execs visit Tucson to see how it’s done Bonnie Allin, president and CEO of the Tucson Airport Authority, is the chair of that organization’s international committee, which probably had something to do with the group choosing to visit Tucson. “I was wondering if it was going to be worth the five hours it took to get out here,” Michorek said. “But it was. It really was. It’s the airport most like ours.”

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Inside Tucson Business As airlines face financial issues, airports all over the world are stuggling to find other ways to boost revenues, which brought 16 executives from airports in Poland to Tucson March 13 and 14 as part of a five-city tour. The Tucson stop included visits to the Port of Tucson, the Offshore Group and to Tucson International Airport. As he prepared to board the commercial flight that would take the delegation to its next stop in Memphis, Grzegorz Michorek, commercial director for Kraków Airport, said he felt the Tucson stop turned out to be most informative because the airport was most like his. Both handle just over 3.5 million passengers a year and are in tourist destinations. The difference, he said, is that about 25 percent of his airport’s revenue is non-aeronautical while U.S. airports often earn half of their revenue from sources other than airline passenger flying. Michorek said he was particularly taken with the amount of planning that is going toward future planning for Tucson’s airport. The trip, which started out in John F. Kennedy International Airport, then went on to Baltimore, Md. and Washington, D.C. and ended up in Chicago, was coordinated by the American Association of Airport Executives.

The Technology Movers A delegation of executives from airports in Poland toured Bombardier’s service center at Tucson International Airport, including a Challenger 300 jet.

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14 MARCH 22, 2013

INSIDE TUCSON BUSINESS

OUT OF THE OFFICE ARTS & CULTURE

ON THE MENU

Celebrate spring and the fruit Mexican films showcased at of the vine at two wine dinners Tucson Cine Festival from her Trefethen Family Vineyards in the Spring officially sprung Wednesday and Oak Knoll District at the southern end of the now is the time of year when Tucsonans Napa Valley in California. Trefethen will be relish things like golfing in short sleeves, hosted by David Torkko, sommelier at desert bluebells and al fresco dining, as well Maynards Market and Kitchen, as the simple joy of sleeping with who says her “rare visit to Tucson the windows open — until we will be a significant element of a collective surrender to air tour de force culinary and wine conditioning. event” he has planned for late next Spring is also a time when week. restaurants like to invite wine Torkko defines the Trefethen industry celebrities to Tucson to family’s portfolio as “some of my unveil the glory of their grapes. very favorite wines,” and he is Two such celebrities in the wine bringing to Tucson the grandworld will be touching down here daughter of the couple who next week to celebrate the season, founded the winery more than 40 and to participate in food and MATT RUSSELL years ago to share their common wine events that will showcase passion. Included in the fivetheir handiwork. course pairing dinner will be the Trefethen Leaving behind chilly 50-degree weather Napa Valley Dry Riesling, Oak Knoll District of northwest Italy, Luciano Racca, a principal Chardonnay, Napa Valley Merlot, Dragon’s with Domenico Clerico, an estate winery Tooth Malbec Blend, HaLo Bordeaux Blend located in the Barolo region of Piedmont, is and Late Harvest Riesling. the guest of Jim Seder, founder and publisher The Trefethen Family Vineyards Wine of the Tucson-based online Wine Inquirer. dinner at Maynards Market and Kitchen, 400 “These wines, ranging from every day N. Toole Ave. in the Historic Depot, begins at selections to longer-term collectibles, are 7 p.m. next Friday (March 29). The cost is designed to pair with big, rustic, Italian $125 per person, plus tax and gratuity. Call dishes,” said Seder, who has partnered with (520) 545-0577 to make reservations. Anthony’s in the Catalinas, 6440 N. Campbell Whether your palette favors northern Ave., on a Domenico Clerico wine dinner to Italy or Napa, you’ll surely find some exciting do just that. food and wines in the coming week, right Each of the dinner’s four courses will be here in Tucson. paired with a select wine, including the estate’s Barolo Ciabot Mentin, Arte, CapismeE and Visadi, additional bottles of which will Contact Matt Russell, whose day job is also be available for retail purchase that CEO of Russell Public Communications, at evening. mrussell@russellpublic.com. Russell is also The Domenico Clerico Wine dinner at the host of “On the Menu Live” that airs 4-5 Anthony’s begins at 6 p.m. Monday (March p.m. Saturdays on KNST 790-AM and he 25). The cost is $100 per person, plus tax and does the Weekend Watch segment of the gratuity. Call (520) 299-1771 to make “Buckmaster Show” from noon-1 p.m. reservations. Fridays on KVOI 1030-AM. Compared to her Italian counterpart, Hailey Trefethen will be making a shorter trip

Convention Center, 260 S. Church Ave. The eighth annual Tucson Cine Mexico Tickets are available for some shows but Film Festival, showcasing the work of they usually sell out by curtain time. Mexican directors and producers, is going on Individual tickets are $45 to $160, online at this weekend. A program of the Hanson Film www.broadwayintucson.com. Institute at the University of Arizona, the film showings are free and open to the public. Knowing Spanish isn’t required as A few high-profile films open films are shown with sub-titles. this weekend at the multiplex. One You’ll find details online at pairs Tina Fey and Paul Rudd in http://tucsoncinemexico.org/ “Admission,” which puts the two but here’s a sampling: comedic talents at Princeton • “Aquí Entre Nos (Between University where they deal with a Us).” Based on a true story, this long-lost child and responsibilities romantic comedy explores twists in adulthood. The action film and turns in family relationships. HERB STRATFORD “Olympus Has Fallen” puts 7 tonight at Fox Tucson Theatre, terrorists inside the White House 17 W. Congress St. for the ultimate showdown, and • “Colosio: El Asesinato (Colosio: The “The Croods” takes a look at an animated Assasination).” A fictional thriller based on caveman family and features an all-star vocal the true story of Luis Donaldo Colosio, the cast. handpicked successor to Mexico President But, the best film of the week is “War Witch,” Carlos Salinas, who was shot dead at a a Canadian film about African warlords and the campaign rally in 1994. 4 p.m. Saturday at kidnapped children they use as soldiers. It’s at Harkins Theatres Tucson Spectrum, 5455 S. the Loft Cinema, 3233 E. Speedway. Calle Santa Cruz.

Film

• “El Lenguaje De Los Machetes (Machete Language).” A drama of a couple in their 30s, who are increasingly drawn to commit an act of terrorism. 7 p.m. Saturday at Harkins Theatres Tucson Spectrum. • “Halley.” A contemporary gothic story about Alberto who has been dead for years and has trouble finding enough perfume and make-up to cover up the fact. He develops a friendship that brings about an unexpected upturn in his condition. 9:30 p.m. Saturday at Harkins Theatres Tucson Spectrum.

‘Wicked’ returns Broadway’s favorite musical “Wicked” is back with performances nightly except Mondays with weekend matinees through April 7, at the Music Hall in the Tucson

Dance UApresents hosts the acclaimed Jose Limon Dance Company for one performance at 7 p.m. Sunday at Centennial Hall, 1020 E. University Blvd. on the University of Arizona campus. The group, founded in 1947, performs both modern classics to specially commissioned works of top choreographers. Tickets are $35 to $55 with discounts for students, children, seniors, military and UA faculty and staff. Buy them online at www.uapresents.org.

Contact Herb Stratford at herb@ ArtsandCultureGuy.com. Stratford teaches Arts Management at the University of Arizona. His column appears weekly in Inside Tucson Business.

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MARCH 22, 2013

PROFILE

Tucson Asphalt’s handiwork can be found from homes to highways By Alan M. Petrillo Inside Tucson Business Laying down a course of good, solid asphalt takes expertise, equipment and experience, all attributes that Tucson Asphalt Contractors brings to jobs as small as home driveways to projects as large as highways and airport runways. Paul Polito, president of Tucson Asphalt, has more than 30 years experience working in concrete and asphalt, starting right out Tucson Asphalt installed an 80-foot metal bridge as of high school with a concrete company. part of a river path paving project along the Rillito He eventually moved on to work for River for Pima County. Granite Construction and finally started his own business — Tucson Asphalt — in 1996 because “I didn’t want to work Saturdays any more. I was 35 years old and quit BIZ FACTS on my birthday. Then I found out I had to work Saturdays and 2425 W. Curtis Road Sundays with my own business.” www.tucsonasphalt.com Tucson Asphalt’s business (520) 292-1125 has mushroomed since its founding, hitting $1.2 million in revenue just before the recession shook the economy in late 2008. “In the spring of 2009, work didn’t slow down, it stopped,” Polito said. “I had about 50 employees working for the company and was losing between $15,000 and $20,000 a week. We were renting five acres and had a building costing us $7,000 a month, so we knew we had to change the size of our business to survive.” Polito cut the size of his staff to 19 employees, then negotiated a 50-50 loan from the Small Business Administration A Tucson Asphalt crew lays down some of 83,000 gallons of pavement sealer on Runway 11-L at Tucson International Airport. and a local bank to purchase a building on River for Pima County from First to training, but also because we value our a smaller lot that would cost him only guys in to ask them questions about what Mountain Avenues and even put in an employees. We share with them in the $3,000 a month. Then he took $200,000 out kind of fix they might suggest for the 80-foot long metal bridge.” of his 401(k) to pay off equipment and keep rewards from the business with bonuses company. We then take their observations Polito said Tucson Asphalt is currently and by purchasing new equipment for the business going. to our managers and use the ones that are doing new construction work for Wal-Mart, them to use, which helps us out-perform “By July of 2011, we were solidly back in good for the company.” handles overflow paving for some larger the competition.” the black,” Polito said. Tucson Asphalt has two superintenpaving contractors, and has worked for the Polito said he hasn’t had to do much Polito believes that Tucson Asphalt is one dents, two foremen, and four estimators City of Tucson, Pima County, the towns of recruiting of new employees because of the leading paving contractors in southern and project managers, which Polito Marana, Oro Valley and Sahaurita, homTucson Asphalt’s turnover is so low. Arizona because of its quality work and admitted is a lot of supervisors for a eowner associations, commercial develop“When we do seek new employees, I look company his size, but necessary. materials, and also because of the extensive ers and highway companies. for someone who hasn’t bounced around a training it offers to all its employees. “We do a lot of small jobs, which takes “We are doing all the asphalt, crosswalks “To stay abreast of the latest and greatest lot and who has accomplished something,” added attention from the staff,” he said. and features for Tucson’s modern streetcar Polito observed. “I look for someone who ways to implement a project, our employ“We have to give good service to every one project,” Polito said. has overcome an obstacle, a person with ees regularly attend paving expos and of our customers.” Tucson Asphalt has won two Marvin M. heart. Those are the folks you want so you training seminars to stay current with But small jobs aren’t Tucson Asphalt’s only Black Awards for outstanding work by the can pull their strengths out and get them to asphalt technology,” Polito pointed out. work — large commercial projects and Associated General Contractors of America. believe in you and the company.” “The company pays for the training our highway work are a big part of the picture, too. One was for a Pima County design-build Polito said he measures his company’s employees get.” “We recently put down 83,000 gallons of improvement project on Skyline Drive, in performance by the lowest people in the Polito noted the hardest thing he’s had pavement sealer on runway 11-L at Tucson cooperation with Sundt Construction; and to do in his own business is to create a good personnel chain. International Airport,” Polito said. “We the other for a day-and-night project for the “We regularly interview the laborers and were the prime contractor on that $450,000 workplace for employees. city of Tucson on the Veterans Memorial trainees and look at their view of the “The most difficult challenge is in job and came in $50,000 below the next Underpass on Palo Verde Road, in cooperacompany,” he said. “We turn the personnel creating a highly-motivated work force,” he lowest bidder. We also recently paved the tion with Hunter Contracting. chart upside down and take a half dozen said. “We do that partly through our river path on the south side of the Rillito Courtesy: Tucson Asphalt Contractors

Tucson Asphalt Contractors Inc.

16 MARCH 22, 2013

INSIDE TUCSON BUSINESS

GOOD BUSINESS WOMEN IN BUSINESS

Finding the ‘Mind,’ ‘Body’ and ‘Spirit’ of your business What successful businesses have taught us is that the basics do work. Smoke and mirrors do not. They have taught us integrity and truth will win out (eventually) and it’s just not worth losing everything to lies and greed. 2013 is the year to smooth our ruffled feathers. 2013 is the year to not step out of the box too far but to assess, analyze and change the things that are not working. 2013 will be the year to clean up our acts and focus on the positive changes that are working personally and professionally. Everything matters and everything counts.

It is looking at our business from a holistic approach. It is time for all of us to treat our business as if it were human. It is the integration of the mind, the body and the spirit of MJ JENSEN the business – just like in our human form one cannot function successfully without the other.

The Mind The Mind symbolizes the people of the business. • The people and the way they are treated is a reflection of the entire business. • This translates to you as an employee, the owners and managers, your colleagues, your customers and your sphere of influence. • Are you taking care of yourself and learning how to be a better businessperson? Are you staying open to new possibilities in your company and in your business? • Are you experiencing employee turnover or conflict within the ranks? There is not a marketing strategy or advertising campaign in the world that will work if your internal customers aren’t happy. Support the loyal employees with training, positive motivation and appropriate incentives for doing more with less. If you are an employee, start by assessing how valuable you are to the company. What can you do to make yourself more valuable? The people who are team players with the best attitudes can thrive through downsizing, right sizing and company change. • Are your customers thrilled to do business with you? If you’re not sure, ask them and be prepared for the worst and best feedback. Take the worst and turn it into the best. Take the best and use it in your marketing material. • Does your circle of influence know what you’re up to? Take time to find out how you can help the people around you and you will discover new opportunities. The objective of the Mind of the business is being open to new ideas, new markets and new opportunities.

The Body The Body of the business symbolizes the branding and the systems that make the business work. • This means paying attention to the “health” of the business and determining how your image is perceived. • This includes your website, your Internet marketing including social media, your computer systems, your contact management systems and your office. • It includes your overall marketing image including advertising, business

cards, brochures, signage and your company vehicles. • Is your office functioning at the highest level of organization and efficiency? Are you proud to have clients in your office? • Everything matters and if you’re not happy with any parts of the Body – change it now. The purpose of the Body of the business is to provide better communication to your clients, your employees, your vendors and to the prospects that you want to do business with. What is important now is to work smarter and more efficiently. Eliminate what is not working and refine the current systems.

The Spirit The Spirit of the business is about truth, integrity and the overall mission of the business. • This includes the company culture, how you communicate your company message and what you are saying. • It’s about how you deal with conflict and the challenges we face in business every day with your employees, your customers and the people around you. • This includes how you follow up and follow through with everything! Not just sometimes or 99 percent of the time, but every time. Is this easy? No, it is not easy, but it is critical to the growth and prosperity of the company. • It is the core commitment to why your company is the best, and that your clients, prospects and vendors know they can trust what you say and they can count on you for what they need. It is about facing tough challenges head-on and telling the truth.

Finally Determine what your own personal goal is for improving your mind, your body and your spirit. Success begins with taking care of ourselves and our families first.

Contact MJ Jensen, chief idea officer of IdeaMagic visionary marketing, at www. IdeaMagic.com or on Facebook. Jensen is a member of the Greater Tucson Chapter of the National Association of Women Business Owners (NAWBO) whose members contribute this monthly column.

InsideTucsonBusiness.com

MARCH 22, 2013

BRIEFS GET ON THE LIST

Next up: Residential real estate firms, brokers, appraisers Research is underway gathering data for Inside Tucson Business’ 2014 Book of Lists. Upcoming lists are: • March 29: 501(c)3 organizations, United Way allocations, Charitable trusts • April 5: Banks, Credit unions • April 12: Residential real estate firms, Real estate brokers, Appraisers • April 19: Architectural firms, Interior design firms, Engineering firms If your business has been on a previous list in one of these categories, look for an email from Jeanne Bennett, List researcher for Inside Tucson Business, with details on how to update your profile. If you would like to add your business to one of these lists, go to www.InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page to create a profile.

NEW IN TOWN

Tucson Hobby Lobby store to open Monday Hobby Lobby Stores, a national arts and crafts retailer, will open its first Tucson store Monday (March 25). The 50,300 square-foot building is in the newly renovated Benenson Retail Center, 5555 E. Broadway at the northeast corner of Craycroft Road. Beginning at 9 a.m. Monday, store man-

ager James Gill will lead a grand opening celebration that will include local dignitaries and business leaders. The retailer now has 13 stores in Arizona and more than 525 across the U.S., carrying more than 65,000 products for crafting and home décor. Regular store hours are 9 a.m. to 8 p.m. Mondays through Saturdays. The store is closed on Sundays. The company’s website is www.hobbylobby.com .

MANUFACTURING

Oro Valley-made battery charger part of 787 test Although federal investigators found that a charger manufactured by an Oro Valley firm was not likely the primary cause of fires in lithium-ion batteries on Boeing 787 Dreamliners, the Federal Aviation Administration is now looking at testing the entire charging system and the battery as unit. Federal authorities ordered the grounding of the Boeing 787 on Jan. 16 after a fire and other instances caused the batteries to experience what was later described as a “thermal runaway,” a rapid uncontrolled increase in temperature. Investigators visited Securaplane Technologies, 10900 N. Stallard Place, Oro Valley, on Jan. 22 to test the battery charger. Two days later Deborah Hersman, chairman of the National Transportation Safety Board, said investigators believed the charger was not likely a primary cause of the battery heating issues.

HUMAN RESOURCES

Tucson’s unemployment rate jumps to 7.3% Tucson’s unemployment rate did not start off 2013 on a positive note — 2,500 more people were without jobs in January than in December to put the unemployment rate at 7.3 percent, up from 6.8 percent in December, according to the Arizona Department of Administration. The total civilian workforce remained about the same, 461,500 from 461,400 in December. The workforce has fallen 4.6 percent since January 2012 when it was 466,200. Of the job losses, 87 percent were in the private sector and the lion’s share of those were the typical reduction in retail jobs after the holiday season. There was also significant loss in the number of people working in the employment services sector.

HEALTH CARE

Tucson Chamber supports Brewer plan on Medicaid The Tucson Metro Chamber has come out in support of Gov. Jan Brewer’s proposal to restore and expand coverage under the state’s Medicaid system, the Arizona Health Care Cost Containment System (AHCCCS). The chamber said it would benefit the state by fulfilling coverage for the voter approved Proposition 204 population and will be a significant economic boost the state. The governor’s proposal would maintain health coverage for 50,000 adults whose

coverage is scheduled to end at the end of 2013 and restore coverage to 240,000 childless adult workers in Arizona. “Reducing the number of uninsured families, individuals and children, along with decreasing the amount of uncompensated care is a critical issue for the business community,” according to a Chamber news release. “This in turn results in business having to invest more in healthcare costs, instead of investing in their business.”

REAL ESTATE

State revokes licenses for Rathbun Realty The Arizona Department of Real Estate has revoked the operating and designated brokers’ licenses of Rathbun Realty Inc. and Rathbun Property Management, 5650 E. 22nd St. Since September, the firms had been under a cease-and-desist order from the department related to the alleged embezzlement of $1.8 million in trust account funds. The license revocation affects brokers Cassandra Leigh Arnold and co-owner George W. Glover. Co-owner and founder Bette (Rathbun) Glover’s license was revoked in 2006 also for trust account irregularities. In August 2012, George Glover filed a complaint with the Department of Real Estate claiming Arnold had embezzled $1.8 million in trust funds. Trust accounts hold tenant deposits separate from a company’s operating funds. The FBI was to asked to investigate the embezzlement but the results of that investigation has not been made public.

PEOPLE IN ACTION NEW HIRES The YWCA Board of Directors has selected Kelly Fryer as executive director of the YWCA Tucson. Fryer has worked as a nonprofit executive, small business owner, teacher and ordained minister. She comes to the YWCA Tucson from Arizona List, a statewide organization working to elect women to public office where she was executive director. Fryer also served as assistant professor of leadership at Luther Seminary in St. Paul, Minn. Fryer replaces Janet Marcotte, who served as executive director of the YWCA Tucson for 25 years. Marcotte retired on Jan. 4, 2013. Truly Nolen has hired Mike Vialpando as brand and marketing strategist.

Vialpando has more than two decades of brand development, graphic design and leadership experience. He plans to build Truly Nolen’s recognizable brand and support its marketing efforts to expand the company’s national footprint. Vialpando most recently worked as the interim vice president of marketing and sales for HF Coors Dinnerware. Raskob Kambourian Financial Advisors has hired Phillip B. Kaiser as a financial analyst. Kaiser has a master’s degree in liberal arts with a concentration in finance from Harvard University and a bachelor’s degree in management/accounting from Park University. He is currently working to achieve the Chartered Financial Analyst designation.

PHILLIP B. KAISER

The Westin La Paloma Resort & Spa has hired Russell Michel as executive chef. Michel will oversee all culinary functions at The Westin La Paloma Resort & Spa, including restaurant concepts and menus for AZUL, La Paloma Country Club, meeting and group banquets, event catering, guest room dining, and all culinary staff recruitment and training. Prior to joining La Paloma, Michel served as the

RUSSELL MICHEL

TERRY BADGER

{YOUR NAME HERE} To announce a professional promotion, appointment, election, new hire or other company personnel actions, fax press releases to (520) 295-4071, Attention: People; or email submissions to pmcnamara@azbiz.com. Include an attached photo at 300 dpi. executive chef at Morgan’s Restaurant and the Sheraton Grand Hotel in Sacramento, Calif. for nearly seven years. He has more than 30 years of hospitality experience. The Arizona Mining

Association has hired Kelly Norton as president. Norton will oversee all operations, management and fundraising. Norton has more than 25 years of experience in government affairs, management, public

relations, marketing and development to her new role. Since 2006, she has also been a consultant to various small businesses and non-profit organizations with experience in research, political campaigns and government relations. AWARDS University of Arizona College of Nursing Professor Terry Badger, Ph.D., PMHCNS-BC, RN, FAAN, has been inducted into the inaugural class

of American Psychosocial Oncology Society (APOS) fellows. This first class of fellows has 10 members, with only two nurses. This new honor reinforces the contributions Badger has made to psychosocial care for oncology patients. Her research is focused on treating psychological distress of breast and prostate cancer survivors and members of their social network using telephone psychosocial interventions. APPOINTMENTS The Pima County Board of Supervisors has approved two new members of the Pima County Workforce Investment Board. The new members are: Rita Martinez-Purson and Pamela Kirkpatrick Sutherland. MartinezPurson has been the assistant dean of the

University of Arizona Outreach College since August 2012. Previously, she was dean of Continuing Education and Community Services at University of New Mexico. Sutherland is the economic development director for the Downtown Tucson Partnership. She also is a member of the City of Tucson Small, Minority, and Women-Owned Business Commission. The Workforce Investment Board is authorized by the Department of Labor and appointed by the Pima County Board of Supervisors to provide recommendations on local workforce policy and oversight of the Pima County One-Stop, which connects eligible job-ready youth, adults and dislocated workers to local growth, high-demand industry occupations.

18 MARCH 22, 2013

INSIDE TUCSON BUSINESS

FINANCE YOUR MONEY

Investors check again; Is your portfolio truly diversified? Life is full of ups and downs — and the financial markets are no different. As an investor, you’re no doubt happy to see the “ups” — but the “downs” can seem like a, well, real downer. Is there a way to help smooth out the volatility in your investment portfolio? First, to cope with volatility, it’s helpful to know what causes it — and there can be many causes. Computers that make trades in milliseconds, based on mathematical models, are sometimes blamed for intraday volatility, but large price swings can also occur following the release of government economic reports, such as those dealing with unemployment and housing starts. Global events, such as the European economic malaise, can also send the financial markets into a tizzy. By being aware of the impact of these events, you can see the workings of the markets — especially their volatility — may not be as mysterious as you thought. Still, while knowing the causes of volatility can help you prepare for market swings, it won’t blunt their impacts on your portfolio. To do that, you need to create a diversified mix of investments because your portfolio can be more susceptible to negative price movements if you only own one type of asset. To illustrate: If you owned mostly bonds, and interest rates rose sharply, the value of your bonds would likely drop, and your portfolio could take a big hit. But if you owned stocks, bonds, government securities, certificates of deposit (CDs) and other investment vehicles, the rise in interest rates would probably affect your portfolio less significantly. But owning a few stocks and a bond is not being diversified. You can actually extend your diversification through many levels — and you should. For the equity portion of your portfolio, try to own stocks representing many market sectors and industries. Also, consider international

stocks. And rather than just owning U.S. Treasury bonds, consider corporate bonds and municipal bonds, and diversify your fixed-income holdings further by purchasing TIM BEITHON short-term, intermediate-term and long-term bonds. Work with your financial advisor to determine the mix of asset classes and investments that are appropriate for your financial goals and objectives. How you ultimately diversify your portfolio depends on your risk tolerance, time horizon and long-term goals. Obviously, there is no one “correct” asset mix for everyone. And over time, your diversification needs may change. As one example, as you enter your retirement years, you may need to increase your percentage of income-producing investments while possibly reducing the amount of growth investments you own. These growth-oriented investments tend to be more volatile, and you may want less volatility during retirement. However, even during retirement, you will need to own a certain percentage of growth investments to provide you with the growth potential you’ll need to stay ahead of inflation. Keep in mind diversification can’t guarantee a profit or protect against loss. Nonetheless, building a diversified portfolio may help take some of the volatility out of investing — so look for diversification opportunities whenever possible.

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.

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TUCSON STOCK EXCHANGE Stock market quotations of some publicly traded companies doing business in Southern Arizona

Company Name

Symbol

Mar. 20 Mar. 13 Change

52-Week 52-Week Low High

Tucson companies Applied Energetics Inc CDEX Inc Providence Service Corp UniSource Energy Corp (Tucson Electric Power)

AERG.OB CEXIQ.OB PRSC UNS

0.02 0.07 18.89 47.18

0.03 0.08 16.47 46.79

-0.01 -0.01 2.42 0.39

0.02 0.01 9.56 35.20

0.09 0.51 19.67 48.01

8.54 4.26 2.56 12.78 62.29 9.56 102.34 23.07 62.63 4.25 24.83 46.09 40.98 44.97 49.10 17.19 103.08 34.58 55.15 17.07 79.61 73.38 25.43 33.24 31.79 68.88 74.70 215.06 36.28 65.17 6.71 49.12 35.32 21.57 46.76 31.87 1.28 43.40 38.41 44.01 62.57 42.55 40.02 48.10 54.55 68.64 16.17 21.38 57.00 58.30 25.27 50.73 52.30 16.10 12.79 47.74 42.51 68.52 20.52 35.06 56.36 32.50 139.13 17.01 17.23 33.93 72.99 46.02 37.44 14.44 25.44

8.54 3.93 2.60 12.06 62.43 9.91 103.65 20.96 60.98 4.24 25.36 46.97 40.59 43.23 49.39 16.99 103.42 34.72 52.90 16.36 80.21 73.70 24.02 33.08 31.21 70.76 73.95 212.06 36.40 66.25 6.30 50.16 35.15 20.28 48.82 31.31 1.29 41.18 39.40 43.97 61.99 42.11 40.18 43.35 54.85 67.18 15.65 19.87 57.18 55.90 24.00 49.07 51.01 15.52 12.45 46.80 42.07 67.43 20.33 35.29 56.63 30.84 139.56 16.92 15.91 34.22 73.65 42.78 36.77 13.91 25.58

0.00 0.33 -0.04 0.72 -0.14 -0.35 -1.31 2.11 1.65 0.01 -0.53 -0.88 0.39 1.74 -0.29 0.20 -0.34 -0.14 2.25 0.71 -0.60 -0.32 1.41 0.16 0.58 -1.88 0.75 3.00 -0.12 -1.08 0.41 -1.04 0.17 1.29 -2.06 0.56 -0.01 2.22 -0.99 0.04 0.58 0.44 -0.16 4.75 -0.30 1.46 0.52 1.51 -0.18 2.40 1.27 1.66 1.29 0.58 0.34 0.94 0.44 1.09 0.19 -0.23 -0.27 1.66 -0.43 0.09 1.32 -0.29 -0.66 3.24 0.67 0.53 -0.14

7.97 0.36 1.48 6.72 50.95 5.30 78.21 11.20 53.12 2.97 14.97 24.61 28.09 20.71 22.19 12.40 81.98 32.05 43.08 8.42 60.76 50.27 13.80 30.54 21.38 46.37 52.21 181.85 27.10 53.38 3.94 30.83 27.96 6.46 41.35 20.98 1.07 23.48 24.76 38.14 54.32 32.31 33.93 24.31 41.11 56.59 14.20 7.63 49.03 38.63 14.73 33.03 38.40 6.25 7.76 39.01 25.77 54.68 14.04 26.06 33.62 17.45 104.08 15.98 7.23 28.26 57.18 28.53 29.80 8.00 17.45

10.45 4.27 3.13 12.94 64.79 10.57 104.25 27.95 62.86 4.93 25.45 47.92 42.00 45.13 50.59 17.21 105.97 43.43 55.35 17.09 89.98 74.62 25.56 43.65 37.74 71.45 74.87 215.90 37.70 68.41 6.72 51.00 38.62 21.79 55.25 32.10 1.81 43.90 39.98 44.78 62.83 42.78 41.84 48.50 55.50 71.25 37.46 21.97 59.34 58.34 25.66 50.93 80.54 16.32 12.84 47.29 43.17 68.87 20.88 35.73 57.85 32.95 141.78 43.80 17.33 35.46 77.60 46.33 38.20 14.50 25.86

Southern Arizona presence Alcoa Inc (Huck Fasteners) AA AMR Corp (American Airlines) AAMRQ Augusta Resource Corp (Rosemont Mine) AZC Bank Of America Corp BAC Bank of Montreal (M&I Bank) BMO BBVA Compass BBVA 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) UAL 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

MARCH 22, 2013

INSIDE REAL ESTATE & CONSTRUCTION By Roger Yohem Inside Tucson Business To builders and real estate agents, the selling prices of new-built homes have “velocity.” In nine out of the last 10 months, both average and median sales prices have been in sync with all of the scientific requisites for speed, magnitude and direction. To put it more simply, prices are rising faster and faster. Housing analyst Ginger Kneup, owner of Bright Future Real Estate Research, characterized the momentum as “dramatic. Demand is healthy right now.” Since May 2012, both new-home metrics are significantly higher. The average selling price has increased to $277,256 as of February from $210,852 in May 2012. The only anomaly was an $800 dip in September. Over the same period, the median sales price jumped to $244,973 from $195,000. The only slip in that was a $4,000 dip in January. Kneup credited the “velocity increase” to a mix of market conditions. Foreclosure volumes appear to be stabilizing, traditional resales are “crawling” upward, inventories are steady, there is more demand for new homes, and price appreciation has returned. As a result, builders are closely watching trends in the resale market which “will impact demand in the new construction market,” said Kneup. In February, builders in the region pulled 169 permits, 20 fewer than in January. D.R. Horton Homes’ 44 permits represented 26 percent of those pulled. Ten of Horton’s new starts are in Saguaro Bloom, Marana, the former Saguaro Springs development. Behind Horton, Lennar pulled 23 permits and Richmond American Homes pulled 17 permits.

THE PULSE: Median Price Active Listings New Listings Pending Sales Homes Closed

TUCSON REAL ESTATE

3/11/2013

3/4/2013

$159,750 4,938 427 478 224

$150,000 4,980 411 478 214

Source: Long Realty Research Center

Roger Yohem

New-built home prices gaining ‘velocity’

D.R. Horton Homes’ 44 permits in February was a 26 percent market.

Best seller is 85756 Neighborhoods near Tucson International Airport continued to be popular with home buyers in February, continuing a trend that goes back about two years. The best-selling houses were in the 85756 zip code, the general area around the airport between Interstates 10 and 19, where 25 of 43 listings sold, which represents a 58 percent success ratio. The second-best selling zip code is 85757 where 16 of 29 listings sold, a 55 percent pace. This area is on the far west side near Ryan Airfield, south of Ajo Way. In areas with at least 100 listings, the top seller was zip code 85710, which is basically the area surrounding East 22nd Street and South Pantano Parkway, where 58 of 168 listings sold, a 34.5 percent rate. In February, Green Valley had 336 listings, the only area with more than 300 homes in inventory for sale. The secondhighest inventory was zip code 85739 with 274 listings. That is basically along North

WEEKLY MORTGAGE RATES Program 30 YEAR 15 YEAR 5/1 ARM

Current

Last Week

3/19/2013

One 12 Month 12 Month Year Ago High Low

3.63% 3.75%APR 3.63% 3.75%APR 4.95% 4.95% 3.38% 3.00% 3.25%APR 3.00% 3.25% APR 4.22% 4.22% 2.75% 2.63% 2.875%APR 2.63% 2.875% APR 2.87% 2.87% 2.63%

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) Hotchkiss Financial, Inc. P.O. Box 43712 Tucson, Arizona 85733 • 520-324-0000 MB #0905432. Rates are subject to change without notice based upon market conditions.

Oracle Road from Catalina State Park to the junction of State Routes 77 and 79. The Sabino Canyon area zip code of 85750 had the third-highest amount of inventory with 248 listings. The data is from the Tucson Association of Realtors Multiple Listing Service.

SAHBA Home Show Just for the health of it, this spring’s Southern Arizona Home Builders Association Home & Patio Show has a health and wellness theme for people and their homes. The event will feature experts on topics including solar, LED lighting, smoke detection as well as spa therapy and swimming fitness. The home show is April 5-7 at the Tucson Convention Center (TCC), 260 S. Church Ave. At the main entrance, hosts from the Home Depot will greet attendees and hand out prize keys. Keys that fit Home Depot’s special door display will receive gift cards, equipment, discount coupons or other prizes. On April 6, University of Arizona College of Medicine staff will teach chest-compression CPR. For children ages five to 12, April 6 also is Kid Clinics Day and Mad Science Day. Parking is free at all TCC lots. Show hours are 10 a.m. to 7 p.m. April 5 and 6 and 10 a.m. to 5 p.m. April 7. More details are online at www.sahbahomeshow.com .

prices climbed 4.4 percent. The federal government’s Producer Price Index (PPI) surveys what contractors pay for all materials. Year-over-year, the PPI is now 2 percent higher, impacting the cost of renovating and building new commercial projects. Since February 2012, wallboard/plaster prices have increased 17.8 percent. Plywood and lumber prices are 15.8 percent higher than a year ago and insulation is 5.9 percent higher, according to the Associated General Contractors of America (AGCA), which analyzes the government’s data. Steel product prices are currently 9.7 percent lower than in February 2012 and copper and brass mill prices are 2.1 percent lower. Similarly, aluminum mill prices are down 1.5 percent. Year-over-year, asphalt paving has edged up 1.1 percent and concrete prices are 2.3 higher. Through fuel surcharges, soaring diesel prices “mean contractors are paying more for the deliveries of materials and equipment,” said Ken Simonson, chief economist for AGCA. Price increases are projected to continue, making it harder for both the public and private sector to fund construction. For example, the cost to build a new school is 1.2 percent higher than in February 2012. In the private sector, the cost to build a new warehouse is now 2.6 percent higher and new industrial construction is 1.3 percent higher, according to the PPI.

Sales and leases

Material prices rising

• Caffe Torino leased 2,718 square feet at 5655 E. River Road in River Center from Larsen Baker, self-represented by Andy Seleznov and Melissa Lal. • Presson Midpoint LLC, 1801 S. Alvernon Way, leased space to the following: 2,400 square feet in Suites 101-102 to Centennial Contractors Enterprises; and 900 square feet in Suite 213 to Rivera Tax Services. The transactions were handled by Rob Glaser and Paul Hooker, Picor Commercial Real Estate Services. • TitleMax of Arizona leased 2,277 square feet at 1280 W. Prince Road in Flowing Wells Plaza, from Orchards at Arizona II LLC, represented by David Dutson, CBRE. • Community Provider of Enrichment Services leased 2,240 square feet at 4444 E. Grant Road, Suites 119-120, from Kolvoord Family LP, represented by Rob Tomlinson, Picor Commercial Real Estate Services. The tenant was represented by David Hammack, Volk Company Commercial Real Estate.

Building construction materials jumped 1.3 percent in February from January, equaling the entire increase for all of 2012. Diesel prices alone soared 7.2 percent in just one month, and gypsum wallboard and plaster

Email sales and leases and other real estate news items to ryohem@azbiz.com. Inside Real Estate & Construction appears weekly.

20 MARCH 22, 2013

INSIDE TUCSON BUSINESS

EDITORIAL BIZ BUZZ

Hagel, Lou Waters one in the same? Some random brief items to pass along. At the root of a reporter is someone who asks questions. The trouble is, I don’t always get answers. For instance, when comedian Carol Burnett came to Tucson in January, she noted that in 1973 when CBS moved her TV variety show to be a part of the network’s Saturday night line-up it capped a night of true “Must See TV” that led off with “All In The Family,” “M*A*S*H,” “Mary DAVID HATFIELD Tyler Moore Show” and then “Bob Newhart.” All were among the top 30 highest rated series of the 1973-74 TV season. So what came first? Did viewers find other things to do besides watch TV on Saturday night? Or did the networks drive viewers away by putting lousy programs on Saturday night? Lou Waters

Chuck Hagel

EDITORIAL

What drives Tucson’s economy? Speaking of TV, folks in these parts who don’t know Lou Waters as an Oro Valley town councilman, might remember him from his long career as a TV anchorman on CNN, KOLD 13 and KVOA 4. Friend and former Tucson broadcast executive Bob Lee now raises the question that may indicate he’s leading a double life as our nation’s new Secretary of Defense Chuck Hagel. You’ve got to wonder. After all, have you ever seen the two of them in the same room together? With high temperatures in the 70s and 80s, this is the season you’ve really got to like being in Tucson. Later comes the heat, but I’ll even deal with that so long as we don’t have go through bone-chilling cold. But why is it in such a hot place, Tucson has no historic iconic local ice cream place? I mean one that made really good, decadent ice cream.

New List As part of Inside Tucson Business’ weekly compilation of Lists, which then go together in the annual Book of Lists, we invite readers to give us ideas on how we can improve them or change them. This week for the first time in more than two years we’re adding a List — the most expensive properties sold. It’s a List compiled of real estate sales from 2012. Thanks to the Pima County’s Assessor’s Office for its help in preparing the new List.

Up & Comers Thanks to all who submitted nominations for this year’s Up & Comers. We’re at work compiling the special section that will appear in the April 12 issue of the printed Inside Tucson Business. I’m also happy to report we’re going to hold this year’s reception honoring our newest class of Up & Comers April 30 at the Playground, 278 E. Congress St. Mark your calendars.

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237.

In the ongoing search for positive economic news for the Tucson region, one of the most promising items came earlier this month when Fiserv Case-Shiller issued a report saying the median home price in the Tucson region increased by 8.2 percent last year and is chugging along to go up another 2.2 percent by the third quarter of this year. Even better, the forecast predicts that over the next four years home prices in the Tucson region will continue to climb at an annualized rate of 7.2 to 7.5 percent. Good news, right? Yes, if it weren’t for the fact that home prices fell at an annualized rate of 8.7 percent from 2007 to 2012. And that they were down 40.4 percent from their peak in the first quarter of 2006. Anyone who bought a home that year, isn’t likely to break even on that investment during the time frame of the Fiserv Case-Shiller projection. But, hey, we’ll take the increases. At least it’s better than the alternative of no increases. And it’s probably not healthy for us to think about going back to the heady days before the bottom fell out of the housing market. Every boom and bust offers a learning experience. Among other things, the dot-com bubble that burst in 2000 taught us that a few success stories in new technology won’t make everyone who goes there a billionaire. You still need a viable product and a business plan. Imagine that. Across the U.S. there are numerous lessons to be learned from the housing crash and judging from what’s going on in Washington, D.C., and on Wall Street the jury is still out as to whether anyone learned something. For us in the Tucson region, there is at least one other lesson we should take away from the crash. We’ll start by asking a question: When someone asks you what drives Tucson’s economy? How do you answer? Raytheon Missile Systems is our largest private employer but does it drive Tucson’s economy? Put all defense contractors together, do they drive Tucson’s economy? A high percentage of Tucsonans work in government

jobs thanks to the University of Arizona, Davis-Monthan Air Force Base and the U.S. Border Patrol. Does government drive Tucson’s economy? There is promise of technology transfer from the UA to start up companies, especially in the biosciences fields, but most are still early in development. Do the biosciences drive Tucson’s economy? Tourism — especially at this time of the year — is estimated to have an economic impact of $2 billion annually for the Tucson region. But that industry has been on the ropes and only now showing consistent signs of improving. For the fragility it has had the past few years, does tourism drive Tucson’s economy? Tucson was supposed to be big on solar. But between foreign production and changing government incentives, that industry is shriveling as fast as anything left out in the Tucson sun on a June day. Does, or did, solar ever drive Tucson’s economy? Economists refer to manufacturing as the “gold standard” for economic development. There’s nothing better than making and selling something that brings in money from outside the region. But just 6.4 percent of people working in the Tucson region are employed in the manufacturing sector. By any stretch, does manufacturing drive Tucson’s economy? The one somewhat unique product in the Tucson region that isn’t found elsewhere is copper. Historically mining has played a significant role in Tucson’s and Arizona’s economy. But does mining still drive Tucson’s economy? Growth has driven Tucson’s economy right up until the first quarter of 2006. Developers built tracts of houses to feed the demand of people who wanted to move here. So what’s supposed to be the impetus that’s going to drive the demand to meet the projections from Fiserv Case-Shiller? For as much as we hope they’re right that house prices will increases, it seems to us that the first order of business is answering the question: What drives Tucson’s economy?

InsideTucsonBusiness.com

MARCH 22, 2013

OPINION WAKE UP, TUCSON

Municipal March Madness, a tourney to determine who done it Another March is upon us, and that means an annual sporting event is once again upon us. No, it’s not Major League Baseball Spring Training. That’s up the road now. It’s March Madness, and by the time this prints it will have already started. This annual rite has inspired me to come up with a thing called “Municipal March Madness.” The idea is to play off, bracket-style, the top 64 individuals who have ruined Pima County and Tucson. While I knew it was a decent comedy bit, my radio co-host Joe Higgins and I have been overwhelmed by the response. We’re leaving the nominations and the outcomes in the hands of our listeners and Facebook community. Within 72 hours of announcing the tournament, we received 97 nominations. They included elected officials, bureaucrats, business “leaders,” environmentalists, Democrats, Republicans, and our local media. Much like the conclave of cardinals at the Vatican, we sat down over a platter of wings at Rocco’s and whittled the list of 97 nominees down to 64 impressive names. Cue the NCAA theme music…. We started off Tuesday with some intriguing tip-offs. In an “all-chains match,” we had a face-off of two Tucson Unified School District board members and ethnic studies devotees, Judy Burns (may she rest in peace) and Adelita Grijalva. While both

sacrificed student achievement to the altar of ethnic studies and teachers’ union, Grijalva’s parentage was just too much. She moved on to the next round. CHRIS DeSIMONE The West University Neighborhood Association then took on our own reconquista, Pima County Legal Defender Isabel Garcia, who is also co-chair of the Coalición de Derechos Humanos. It was a tough match. While the Joe Arpaio effigy-beating taxpayer-paid legal defender put up a good fight, she was no match for the neighborhood juggernaut. The group’s history of mini-dorm wars, low interest pizza oven loans and taking payoffs not to frustrate projects at the council level was just too much. The moment the association took settlement money from the developers of the district, they showed their true selves. Our next donnybrook — we were still in a St. Patrick’s Day mood — featured a Democrat in R clothing versus the “Sergeant Schultz” of Rio Nuevo downtown redevelopment. Pete Hershberger was a liberal state legislator who had family

history in the Republican party. It was like he was a hippie child who didn’t really dig Republicans growing up, until he needed his last name to get elected in the northwest side district he represented. When the Arizona Daily Star got upset over his being thrown off a committee assignment for not cooperating with his own party’s leadership, it was clear he had a problem. No wonder Tucson city councilman Steve Kozachik, who in fact did turn Democractic, and Hershberger swooned over Richard Carmona for U.S. Senator. Ann Brown worked for the Arizona Daily Star for 12 years, eventually heading up the Editorial page. It was an important responsibility keeping local officials in line — even if the newspaper’s influence has waned. Brown was there during the Rio Nuevo debacle, raising nary a peep of objection. Then, all of a sudden, $230 million was spent with nothing to show for it, according to an audit. Other bouts pit Chuck Huckelbery, Pima County administrator, up against Lisa Lovallo, vice president and system manager for Cox Communications; Mike Hein verus Mike Letcher, Tucson’s previous two city managers, both of whom were fired, Imagine Greater Tucson going up against the Center for Biological Diversity and former Tucson Metropolitan Chamber of Commerce president and CEO Jack

Camper versus the Southern Arizona Leadership Council. These battles are full of facts, tears and lots of laughs. All laughs aside, Higgins and I learned a lesson winnowing down the names to a manageable 64. To paraphrase Hillary Clinton — a first for me — it takes a village to bring a whole region down. To take a great region like Tucson down this rabbit hole of cronyism, potholes and fingerpainting, it took a full-court press of government, bureaucrats and private business people to make it happen. While the top seeds feature the names you might expect, there is a power-ranked dark horse ready to make a deep run in the tournament. It was a last-minute contribution by a classic small business owner who has seen the ups and downs of this region for more than 30 years. The group enables and empowers most of the folks in the brackets. We will be hosting the Final Four balloting at our four-year anniversary party April 1 at Anthony’s in the Catalinas. Don’t be surprised if you see the voters of Pima County cutting down the nets afterward.

Contact Chris DeSimone at provenpartner@comcast.net. DeSimone co-hosts “Wake Up Tucson,” 6-8 a.m. weekdays on The Voice KVOI 1030-AM.

GUEST OPINION

Why America isn’t the only country that wants guns for self-defense Tony Martin, a British farm owner, shot and killed Fred Barras, a home intruder, in 1999. Neighborhood Watch volunteer George Zimmerman, of Sanford, Fla., shot to death 17-year-old Trayvon Martin a year ago. And last month, South Africa’s “Blade Runner,” Oscar Pistorius, shot and killed his model girlfriend Reeva Steenkamp, whom he claims to have mistaken for a home intruder. All three faced — or currently face — criminal charges in connection with the shootings. All have claimed self-defense. These sensationalized cases from around the globe suggest the American penchant for firearms is less exceptional than many in the United States may think. The appeal of guns is global. Civilians in Mexico have started “self-policing” in the wake of increased fears of crime and inadequate public law enforcement. In India, after the New Delhi gang rape in December 2012, women’s demands for gun permits have escalated precipitously. Even Britain is seeing small but meaningful increases in gun permits amid concerns about increasing crime and police efficacy, according to The Guardian newspaper. If Americans want to move forward in

our national conversation about gun control, we need to understand gun culture less as an example of American pathology or a source of U.S. pride — depending on what JENNIFER CARLSON side of the debate you take — and more as a social practice embedded in inequality, violence, and fear that is aggravated in the U.S., but not unique to it. Americans like to think of themselves and their society as unique. In our national gun debate, this means emphasizing the Second Amendment, a hunting heritage, and the general ethos of rugged individualism that set Americans apart. For gunrights advocates, these are virtues to celebrate; for gun control advocates, these are often seen more as roadblocks in the path toward sensible gun control already adopted by our European counterparts. There is no doubt that America’s gun

ownership stands out globally: With an estimated 300 million-plus guns in the hands of civilians, Americans own more guns than any other nation in the world. And without America’s particular legal foundations and history, it is hard to imagine that the country would be as much of a hotbed for gun rights as it is today. But the appeal of guns for self-defense and personal protection purposes is hardly a simple case of American exceptionalism. Consider South Africa, Britain, India and beyond. India does not have a constitutional equivalent of the Second Amendment, but amid fears of crime, gun proponents are organizing in groups like the National Association for Gun Rights in India. And South Africa’s “private defence” law allows citizens to defend themselves and others. Guns in America, India, South Africa, Britain, Mexico: What do these societies have in common? All are dealing with the unfinished business of racial and gender inequality that have been exacerbated by economic austerity measures, a renewed focus on crime and criminal justice, and public

services in crisis. These are societies that breed rampant fears and concerns about insecurity (if at times disproportionate to the actual rates of crime) and the sense that the police cannot, or will not, provide protection to the average citizen. Guns may be as “American as apple pie,” but they are not exclusively American because the problems that drive people to guns are not exclusive to the U.S. Taking a global look at guns reveals the folly in gun debates that focus merely on regulating and restricting guns themselves. To address guns, we must also address why people – in America and elsewhere – are turning to them in the first place.

Jennifer Carlson is a Ph.D. candidate in sociology at the University of California, Berkeley. She will become an assistant professor of sociology at the University of Toronto this summer. Carlson is working on a book manuscript entitled, “Clinging to their Guns? The New Politics of Gun Carry in Everyday Life.”

22 MARCH 22, 2013

INSIDE TUCSON BUSINESS

OPINION GUEST OPINION

Proposals to ban purchase of sugary drink with food stamps won’t work A court ruling earlier this month blocked Mayor Michael Bloomberg’s “soda ban” and restored New Yorkers’ freedom to supersize their sugary drinks. The judge reasoned the rule limiting the size of sugary drinks to be sold at New York City eateries was arbitrary and capricious because it applied to some but not all food establishments, it excludes other beverages with higher concentrations of sweeteners, and because the loopholes in the rule – such as no limits on refills – “serve to gut the purpose of the rule.” Proposals to limit soda consumption have been popular among the public health community. Advocates ranging from the Center for Science in the Public Interest to New York Times food writer Mark Bittman have called for a ban on the purchase of sugar-sweetened beverages with food stamps. Media outlets recently reported health officials in South Carolina are considering requesting permission to implement such a ban. A similar proposal in New York City was recently rejected. The same types of flaws that caused the New York judge to overrule the soda size-limits are inherent in these proposals to ban the purchase of sugary drinks using food stamps. Not only will this policy likely not change what food-stamp recipients drink, but it may also harm the overall food-stamp program. The food stamp program – officially known as the Supplemental Nutrition Assistance Program (SNAP) – is a cornerstone of America’s safety net, providing food assistance to just more than 1 in every

7 Americans. Monthly SNAP benefits are distributed via electronic benefit transfer cards that function like debit cards, which can be used at most grocery stores and DIANE WHITMORE many other outlets such as convenience stores and farmers markets. Since its inception in the 1960s, the program’s recipients have been able to use their benefits to purchase almost any foods at the grocery store, except for alcohol, vitamins, and hot foods intended for immediate consumption like rotisserie chickens. Public-health advocates rightly point out that sugar-sweetened beverages are the largest source of excess calories in the average American diet, and they provide no nutritional benefit. Assuredly, low-income and higher-income Americans alike would be better off if they substituted water for some of their daily soda consumption. But the policy recommendation to disallow the purchase of sugary drinks with SNAP benefits exaggerates the potential impacts on obesity such a ban would have. This is because the rationale for the ban is based on a false understanding of how SNAP benefits work. By design, almost all SNAP recipients with children use the benefits in addition to some of their own cash income to

purchase groceries. Indeed, that’s why the program is called the Supplemental Nutrition Assistance Program; it is intended to work to extend a family’s food purchasing power, not to cover 100 percent of food purchases. According to the best available data on spending patterns in the United States, the Consumer Expenditure Survey, a family on food stamps usually receives an average of $225 per month in benefits (currently increased to $280 because of temporary stimulus funding) but spends a total of $350 on food and drinks, making up the difference with $125 in cash. About $13 total is spent on sugar-sweetened beverages eligible for purchase with SNAP, or the dollar equivalent of about two cases of Coca-Cola. What will happen to this family if they cannot use SNAP benefits to purchase soda and sweetened beverages? Probably nothing. They can continue to purchase the same $13 worth of Coke or Dr Pepper, but just have to make certain to pay for them out of their own cash instead of their benefits. In addition to likely failing to curb the purchase of sugary drinks, this policy proposal may also harm the SNAP program. Additional restrictions on eligible foods will increase the administrative costs of the program, which is probably not a good idea in the current budgetary environment. They will also increase the stigma faced by recipients when they use the benefits. There are better policy ideas out there that are more likely to improve the diets of food stamp recipients. For example, over

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the past decade, fresh fruits and vegetables have become relatively more expensive compared to foods that are considered less healthy. Policies can be designed to make these foods more affordable and provide incentives for low-income families to purchase them. Some local areas and even a few states give bonus dollars for benefits used at farmers markets, allowing recipients to stretch their food budget farther when they buy fresh produce. Public-health advocates are right to call attention to our excessive consumption of sugar-sweetened beverages as one cause. But in order to make progress against this public-health crisis, we need constructive policy solutions aimed more broadly, not initiatives that single out and stigmatize recipients of public assistance. Without question, the advocates for a policy to ban the purchase of sugar-sweetened beverages using SNAP benefits have the best of intentions. But policymakers need to be careful not to let their zeal for combating obesity push them into hastily adopting policies that at best are unlikely to help fight obesity, and, at worst, can do substantial damage to the safety net.

Diane Whitmore Schanzenbach is an associate professor in the School of Education and Social Policy at Northwestern University, a research associate at the National Bureau of Economic Research, and a Public Voices Fellow with the OpEd Project. She studies the impacts of public policies on children.

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24 MARCH 22, 2013

INSIDE TUCSON BUSINESS

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