Inside Tucson Business 04/06/12 by Territorial Newspapers

THE GOOD LIFE, AND TACOS ITB’s own Dan Gibson shares his insights as a future food contest judge PAGE 6

Your Weekly Business Journal for the Tucson Metro Area WWW.INSIDETUCSONBUSINESS.COM • APRIL 6, 2012 • VOL. 21, NO. 45 • $1

  SPACE RACE Commercial real estate market has lifted oﬀ the bottom

Pushing boundaries Oro Valley looks to annex Ina, Oracle area Page 9

More nasty voices

Otis Blank photo

Home foreclosures nearly double sales figures Page 22

John Yarborough (left) and Dave Carroll of Romano Real Estate at Plaza Colonial.

Car rental firms drop airport bids by 38% Inside Tucson Business Another example of just how hard the economic recession has hit some industries came this week when the Tucson Airport Authority board approved proposals for new five-year contracts with car rental firms, which could drop revenue to Tucson International Airport by as much as 38 percent in the first year. Under the previous five-year contract, which was bid in 2007 before the recession hit, the seven car rental

agencies at the airport will pay almost $8.2 million for the 12 months ending July 31. Under the new five-year agreement, the car rental companies are guaranteeing a minimum of $5.1 million in the first year that starts Aug. 1. Dick Gruentzel, chief financial officer of the airport authority, said most likely the first year’s amount will exceed that $5.1 million because language in the contracts with car rental companies stipulates that their minimum guarantee must be at least 85 percent of what was paid the previous

year. Under the new agreements, the same seven car rental brands — Hertz, Enterprise, Avis, Budget, National, Alamo and Dollar — will be represented at the airport. Thrifty also bid but it wasn’t included among the new contract because there is room for only seven agencies on site and it had the lowest minimum guarantee. As the high bidder, guaranteeing a minimum of more than $1 million per year, Hertz gets the first choice of counter space and the largest facili-

ties at the airport. The other firms bid guarantees of under $1 million per year with Dollar offering the least, at less than $500,000 per year. In addition to the minimum guarantee, car rental agencies lease their space from the airport and collect a $4.50 per rental contract customer facility charge that goes to the airport. In this final year of the previous contract the airport expects to collect $1.8 million in leases from the car rental companies and more than $1.1 million in customer facility charges.

2 APRIL 6, 2012

INSIDE TUCSON BUSINESS

InsideTucsonBusiness.com

APRIL 6, 2012

NEWS

The Space Race: Commercial building leases rocket upward

Four Points closes to be renovated into Aloft

Otis Blank photo

Starwood Hotels and Resorts this week confirmed it is converting the Four Points By Sheraton Tucson University Plaza into Aloft Tucson University. As part of the change, the hotel on the southeast corner of Speedway and Campbell Avenue has closed and will undergo a total renovation gutting the building back to its girders. The plan is to reopen it as a 150-room Aloft in early 2013, according to an announcement Wednesday by Craig Martin, general manager. Speculation that the hotel would be converted first surfaced three years ago when Starwood announced it was introducing the Aloft brand but it has been delayed due to various issues, including ownership of certain parcels and demolition. In the meantime, Starwood has opened 55 Aloft hotels around the world. They fit into a category that used to be called limited service similar to what Courtyard is to Marriott. In this case, Aloft would be the limited service version of Starwood’s W hotel brand. In that vein, Aloft hotels have a modern and industrial-influenced design of the hotels feature free-flowing open spaces with lots of tech features including high-speed Internet access throughout, touch-and-go self-service kiosks and what’s called an electric w xyz bar featuring music played by live and virtual DJs. They also have active social spaces, swimming pools, gyms and quickserve snacks, salads and sandwiches.

Move-up tenants have filled Class A sites such as Plaza Colonial, represented by John Yarborough (left) and Dave Carroll of Romano Real Estate.

By Roger Yohem Inside Tucson Business Insiders are calling it “the space race,” lingo for describing a rush to rent commercial real estate. Since January, activity has “rocketed” up.

Phone: (520) 295-4201 Fax: (520) 295-4071 3280 E. Hemisphere Loop, #180 Tucson, AZ 85706-5027 insidetucsonbusiness.com

The uptick has touched all commercial real estate markets except heavy industrial and manufacturing. Those two sectors are continuing to struggle while absorption for office, retail, health care and professional services space improves. The swing is so evident brokers are in

unanimous agreement that the commercial real estate market in the region has finally lifted off the bottom. “We’re seeing the worst is over, there has been a lift,” said Bruce Romano, presi-

see SPACE page 4

PUBLISHER THOMAS P. LEE tlee@azbiz.com

STAFF WRITER PATRICK MCNAMARA pmcnamara@azbiz.com

LIST COORDINATOR JEANNE BENNETT list@azbiz.com

INSIDE SALES MANAGER MONICA AKYOL makyol@azbiz.com

EDITORIAL DESIGNER DUANE HOLLIS dhollis@azbiz.com

EDITOR DAVID HATFIELD dhatfield@azbiz.com

STAFF RESEARCHER CELINDA ARGUE cargue@azbiz.com

ART DIRECTOR ANDREW ARTHUR aarthur@azbiz.com

CARTOONIST WES HARGIS

STAFF WRITER ROGER YOHEM ryohem@azbiz.com

WEB PRODUCER DAN GIBSON dgibson@azbiz.com

ADVERTISING DIRECTOR JILL A’HEARN jahearn@azbiz.com

CIRCULATION MANAGER LAURA HORVATH lhorvath@azbiz.com

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.

City, police to send alarm owners notice of fees The Tucson Police Department says it has begun notifying security alarm owners of the city’s new annual fee for fire alarms. Although the fee schedule went into effect April 1, there was no requirement for alarm owners to pay it before that date as police officials worked to set up the system. Information about the fee is on the police department’s website — http://cms3. tucsonaz.gov/police/alarm-education. The city will also send notices by mail to alarm owners. So far, about 300 alarm owners have paid the annual fee of $20 to register, according to a police spokesperson.

EDITION INDEX Public Notices Meals and Entertainment Arts and Culture Sales Judo Inside Media People in Action Calendar

6 8 8 10 11 12 17

Briefs Lists Finance Real Estate & Construction Biz Buzz Editorial Classifieds

18-19 20 21 22-23 24 24 27

4 APRIL 6, 2012

INSIDE TUCSON BUSINESS

NEWS Tucson’s unemployment rate improves to 7.8% With about 3,700 more Tucsonans working in February, the region’s unemployment rate dropped 0.1 percent to 7.8 percent, according to the Arizona Office of Employment and Population Statistics. The drop was even more pronounced from February 2011 when Tucson’s unemployment rate was 8.7 percent. Tucson’s unemployment is not seasonally adjusted so month-to-month comparisons are not as easily made as year-to-year comparisons. Most of the gains came in three areas; leisure and hospitality was up 1,100 jobs, state government and education grew by 600 jobs, and health services was up 400 jobs. Arizona’s statewide unemployment rate, which is seasonally adjusted, remained unchanged for February 8.7 percent. The national unemployment rate also was unchanged in February at 8.3 percent. State officials said that overall, the employment situation in Arizona continues to gradually improve and some industries are starting to an increase in momentum.

SPACE continued from page 3

Since January, Bill DiVito of Grubb & Ellis has seen more multiple offers for buildings that will be owner-occupied.

What is expected to be a record amount of scrap metal from decommissioned military aircraft stored at the “boneyard” at Davis-Monthan Air Force Base is to be auctioned off this month. Government Liquidation, a contractor to the U.S. Department of Defense will accept bids on its website — www.govliquidation.com — from 9 p.m. Tuesday (April 10) through 5 a.m. April 13 on the end-oflife aircraft including F-111 Aardvarks, C-5 Galaxies, F-15 Eagles, C-130 Hercules, S-3 Vikings and A-4 Skyhawks that will be sold as 27 million pounds of ferrous and nonferrous scrap metal in the form of parts made of aluminum, steel, titanium and other metals. The planes have been stripped of their components. They are considered top grade aerospace metals.

Otis Blank photos

Air Force ‘boneyard’ planes to be auctioned

As money comes off the sidelines, Brian Harpel of The Harpel Company believes there is renewed optimism for commercial building sales.

Tucson No. 31 destination for U-Haul moves in 2011 When it comes to using U-Haul to move more than 50 miles, Tucson ranks as the No. 31 most popular destination in the U.S. While the region made the company’s list of top 50 destinations on the latest list, the rank is down from No. 28 last year. Phoenix ranked No. 14 both years. The listing is part of the annual U-Haul National Migration Report and is based on more than 1.6 million transactions. It considers every city in the country, regardless of size. The top five cities this year are Houston, Orlando, Las Vegas, Chicago and San Antonio. Tucson ranked just behind Portland, Ore., and just ahead of Queens, N.Y.

dent of Romano Real Estate. “There is shifting optimism, a perception that things are going to get better. The fear is gone, the fear of the economy getting worse.” Romano said small “mom and pop” businesses are leaving their home offices and garages to rent space. That is “a strong first sign” of a rebound. Others are trying new ventures. Also emerging are young retirees and serial entrepreneurs launching clothing, crafts or jewelry shops. “It’s not big established companies opening two more locations. What’s important is the fact that there is any expansion at all,” he said. Romano’s focus is on the shopping center, office/condo office, and light industrial sectors. His firm manages about 50 properties and handles leases in 30 others. As the recession played out, there were many businesses that moved to take advantage of opportunities. Elements Home Décor did just that, relocating from 6380 E. Grant Road to Plaza Colonial at 2870 E. Skyline Drive. “They got an A location at a B rental rate, something not achievable in a good economy. A year ago, they couldn’t make that deal,” said Romano, who handles Plaza Colonial, which is now 100 percent occupied. Since January, business people appear more willing to invest again. “There’s always been money on the sidelines. But until they perceived that the economy and conditions improved, that money was stagnant. There is a definite uptick in the market, renewed optimism,” said Brian Harpel, president of the Harpel Company that specializes in retail space. Grocery anchors and drug stores have made the biggest impact in this sector. “Well-positioned corners are in demand. Values have recovered and in some cases, exceed prices seen at the height of the market,” said Harpel. “At the top of retail food chain are Walgreens and the c-stores: Circle K and QuikTrip. After the top three is a precipitous drop.”

Picor on industrial

Business parks are a specialty of Rick Kleiner (left) and Rob Glaser of Picor. They represent Presson Corporation’s properties that house 350 small businesses.

Industrial specialist Rob Glaser of Picor Commercial Real Estate said the manufacturing sector “has a pulse, but nothing significant.” He agreed with others that more industrial jobs are needed so the “significantly higher pay will trickle down and benefit” other sectors. “It’s very expensive to do business in California, too much regulation is a financial burden. Some are starting to look at Tucson again. It’s a trend to be pursued the next few years,” he said. However, Glaser was quick to point out that Tucson’s solar manufacturing companies “are vulnerable.” “Our advantage is in developing the solar technology, that has more potential here. The manufacturing can be done

InsideTucsonBusiness.com

APRIL 6, 2012

NEWS DiVito currently has multiple offers on a high-tech building that will be userowned. He also has three clients considering industrial research buildings. “Each is good business acumen, they realize we’ve hit rock bottom,” he said.

CBRE recession fatigue CBRE executive Buzz Isaacson, who specializes in downtown office space, tempered his enthusiasm for the overall commercial market. There is upward movement “but we’re not rockin’ and rollin’ like it used to be,” he said. He believes the increase is due to pentup demand, that business people are tired of the bad economy and looking for signs of good news. As people monitor the economy, they have decided conditions are better now than a few months ago. “There is good anecdotal evidence that

For a sampling of the higher sales and leasing activity, see the listings on Page 22 in Inside Real Estate & Construction. Contact reporter Roger Yohem at ryohem@azbiz. com or (520) 295-4254.

This Week’s

Good News Best license plate The Automobile License Plate Collectors Association has named Arizona’s Centennial plate the best new license plate design of the year. The association said its members voted and picked Arizona’s plate from among nine that were introduced last year based on two judging criteria: overall attractiveness of the design and legibility as a tool for public safety and law enforcement. The plate was designed by P.S. Studios graphic design and advertising in Phoenix.

The Tucson

INSIDER Insights and trends on developing and

The Space Race:

A landlord’s perspective

Andy Seleznov oversees leases for 2.4 million square feet of Larsen Baker space.

Grubb & Ellis deals Since late 2011, the biggest office sector shift has been longer leases. Grubb & Ellis vice president Tari Auletta has seen more activity across all general office sectors. “Because they have more overall confidence, clients are not afraid of signing long-term leases. One or two-year leases are becoming three or five-year leases,” she said. On the sales side, brokers are once again getting multiple offers on some properties, added vice president Bill DiVito. For various reasons, more companies are buying their own buildings. Certainly, a good deal is a factor; plus the realization that new construction costs are high; development permits are often delayed; and impact fees are a deterrent. “Some want a good deal before the good properties go away. Others have outgrown their space. And there are cases where a building is only for sale, not lease, so they’ll buy it and figure out something later,” DiVito said.

we are in the early stages of some sort of recovery. People are tired of being on the sidelines. As their leases expire or space requirements change, they are at a point where they have to make some tough decisions for their businesses,” he said. “I’ve heard it called recession fatigue. People need to feel better about their businesses,” he added. Of all the brokers, Isaacson best characterized the big picture. “More activity” means landlords and brokers are seeing more inquiries, more appointments to view properties, more detailed data being requested, and more strategic negotiating by all parties to make a deal.

Otis Blank photo

elsewhere, cheaper than here,” he said. “That reality is what makes high-end manufacturing like B/E Aerospace so valuable. They can’t move from Tucson to Asia or Mexico.” Rick Kleiner, also with Picor, has observed “a huge shift” recently, that buyers and sellers “are on the same page.” Looking back at how the recession destroyed their business peers, “now we have both parties understanding where they need to be financially.” “We’re even seeing some sales but it takes a lot of time to get there,” he said. For more than six months, Kleiner had a listing for a “distressed” office building at 7042 E. Broadway at the southwest corner of Kolb Road. There was little interest in it until early 2012 when activity picked up. The property has now been bought for $240,000 by Stewart Title for its own use. “The client was focused on a particular location and didn’t want to go elsewhere. To their credit, the buyer and seller both hung in there to get what they both needed. It took six weeks to negotiate,” he said. In the category of business parks, Picor represents Phoenix-based Presson Corporation in Tucson. Presson is the largest owner of business parks in the Tucson region with eight sites housing 350 small business tenants. Most of the sites are on major traffic corridors such as Midway Business Park, 4500 E. Speedway, and Broadbent Business Park, at West Grant Road and Interstate 10. “They are the litmus test for activity,” Glaser said. “Late in the recession, small businesses in business parks were devastated. In the last two months, Broadbent is now 100 percent occupied.” Glaser also credits a surging stock market for the “space race.” There is a definite improvement, “but leasing is not yet off the charts.”

Inside Tucson Business The Larsen Baker firm, 6298 E. Grant Road, owns about 50 commercial properties in Southern Arizona totaling 2.4 million square-feet of space. The buildings are a mix of street-side retail and office space to power centers with multiple anchor tenants. The real estate company does it all: develops, re-develops, owns, operates, manages and leases properties. As landlords, leasing director Andy Seleznov has seen rental activity gain momentum since January and has “several contracts in the pipeline.” “From the stats I’ve seen, there is a lot of confidence that consumer confidence is up. That makes retailers interested,” he said. “The economy changed things, especially in strip plazas. We’re seeing non-traditional retail and more varied-use taking space.” Those atypical transactions have included renting to hair salons, dental groups, and urgent care ventures. Typical space needs are 1,000 to 2,000 square feet. Few large national companies are looking to expand. To attract tenants, Larsen Baker adapted to the changing market. At its Crossroads Festival, on the northeast corner of East Grant and North Swan roads, tenant accommodations trumped tenant improvements. The abandoned Buddy’s Grill building was divided to accommodate Paradise Bakery. That still left 2,000 square-feet of vacant space. “As landlords, we realized we had to be more flexible. If we don’t downsize and split the building, we would not have signed the bakery,” said Seleznov.

ongoing Tucson regional business news

Airport stance on F-35s Amidst the public debate over the Air Force’s proposal to possibly locate F-35 training facilities at the Arizona National Guard’s 162nd Fighter Wing at Tucson International Airport, some may have noticed the Tucson Airport Authority has been quiet on the subject. One who did is a member of the airport authority, which prompted an explanation by Chairman Tom Zlaket at this week’s authority board meeting. If a decision is made to bring the F-35s to the airport, “we will welcome them, we will provide for them, we will do everything we can for them,” but he said the airport authority doesn’t feel it’s appropriate to take a position at this time on whether the F-35s should come. However, that hasn’t stopped Zlaket, an attorney and former justice on the Arizona Supreme Court, from taking a personal stand on the issue. He said he has personally written letters in support of bringing the F-35s to Tucson.

UA Wildcats top Kentucky OK, so Kentucky won the NCAA men’s basketball championship this week. By one measure, those Wildcats don’t compare to the University of Arizona Wildcats when it comes to basketball. What? You say the Arizona Wildcats weren’t even invited to the tournament this year. We’re not talking about that. We’re talking about a study put out by an assistant professor of finance at Indiana University-Purdue University Columbus that calculated the intrinsic worth of Division I college basketball programs as if they could be bought and sold like professional sports franchises. According to Ryan Brewer’s research, Kentucky ranked No. 16, worth $73.7 million. Arizona is No. 5, valued at $110.4 million. The only other Pac-12 team to make the top 20 was UCLA at No. 17, valued at $73.5 million. At No. 1 is Louisville, worth $211.5 million, followed by Kansas, which beat them in the final four, worth $146 million.

6 APRIL 6, 2012

INSIDE TUCSON BUSINESS

NEWS Public notices of business bankruptcies, foreclosures and liens filed in Tucson or Pima County and selected filings in Phoenix. Addresses are Tucson unless otherwise noted.

BANKRUPTCIES Chapter 11 Business reorganization Julie Mamatou Zakari, 9121 E. Autumn Sage St. Principal: Julie Mamatou Zakari, debtor. Assets: $431,857.00. Liabilities: $761,023.24. Largest creditor(s): Bank of America, Simi Valley, Calif., $179,500.00; Nationstar Mortgage, Lewisville, Texas, $138,070.00 and Wells Fargo Home Mortgage, Frederick, Md., $124,961.00. Case No. 12-06522 filed March 29. Law firm: Eric Slocum Sparks James C. Counts Sr., 3931 Vista De La Cima. Principal: James C. Counts Sr., debtor. Estimated assets: More than $100,000 to $500,000. Estimated liabilities: More than $50,000 to $100,000. Largest creditor(s): Not filed. Case No. 12-06697 filed March 30. Law firm: Eric Slocum Sparks

FORECLOSURE NOTICES Eagle Peak LLC 2840, 2851, 2920, 2930, 2940, 2950, 2960, 2980, 3000, 3005, 3010, 3020, 3025, 3030, 3040, 3045, 3050, 3055, 3060, 3061, 3067, 3073, 3079, 3080, 3085, 3090, 3095, 3100, 3110, 3120, 3125, 3130, 3140, 3150, 3160, 3170, 3180, 3190, 3195 and 3200 N. Camino Cascabel and 2984, 2985 and 2995 N. Placita Preciosa (Lots 1-42, A and B and adjacent parcel) 85749 Tax parcel: 205-39-001S and 205-39-0380 through 205-39-0810 Original Principal: $3,109,986.00 Beneficiary: Donald D. Hedberg, as trustee of the Hedberg Revocable Trust, Lake Geneva, Wis. Auction time and date: 1:30 p.m., June 20, 2012 Trustee: Samuel S. Chang, Lewis & Roca, 40 N. Central Ave., Suite 1900, Phoenix Sonoran Elements Development Group LLC 2251 N. Dragoon St. 85728 Tax parcel: 115-19-018B6 Original Principal: $320,000.00 Beneficiary: First Bank, Houston, Texas Auction time and date: 11:30 a.m., June 19, 2012 Trustee: Cal-Western Reconveyence Corporation, 525 E. Main St., El Cajon, Calif. Blake Hunter Phillips Inc. 2577 N. First Ave., Unit 6, 85719 Tax parcel: 107-14-43406 Original Principal: $139,500.00 Beneficiary: Bayview Loan Servicing, Coral Gables, Fla. Auction time and date: 11:30 a.m., June 15, 2012 Trustee: Jason P. Sherman, Shapiro Van Ess and Sherman, 3300 N. Central Ave., Suite 2200, Phoenix

LIENS State liens (Liens of $1,000 or more ﬁled by the Arizona Department of Revenue or Arizona Department of Economic Security.) Native Tucson Builders LLC, 6601 E. Grant Road, Suite 111. Amount owed: $24,813.29.

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

Fidelity Mechanical Contracting Inc. against Smith Food & Drug Centers Inc. Amount owed: $15,762.20. Richard McAvoy Tile against Smith’s Food & Drug Centers. Amount owed: $3,941.00. Rio West Development & Construction Inc. against Noble Investment Real Estate Holdings LLC. Amount owed: $28,283.96.

Release of mechanic’s liens Ace Asphalt of Arizona Inc. against CRS DQ Holdings LLC E2 Power & special Systems Group Inc. against Park Mall LLC Tucson Flooring Concepts against Plaza at Williams Center Allied Acoustics Inc. against Living Hope Family Church Inc. P&B Mechanical Inc. against Campbell Avenue Shopping Center LLC and Riley-Tucson LLC Haugebak Construction Company Inc. against Fry’s Store #36 and Gold Canyon Plaza

My amazing life as a taco judge By Dan Gibson Inside Tucson Business Once I was like you, dear reader. I enjoyed tacos. I ate them for nourishment and enjoyment, sometimes choosing flour, sometimes corn, mixing up the meats, trying different salsas and toppings. Then, one day, in a magical burst of providence, I was transformed. I transcended the ranks of ordinary people (perhaps you know some of them) who just eat delicious food, living in the moment as the flavors of Mexico flew by my taste buds. Not that you’ll ever know, but life on the other side of the judging fence is amazing. In the interest of full disclosure, I have not actually worked as a taco judge yet, since my debut in that capacity will be at the inaugural Tucson Taco Festival, to be held at Rillito Downs on April 28th. However, even a few weeks before the day when delicious meats accompanied by expertly chosen toppings, presented in handheld form by a thin slice of griddled dough will be brought to me to apply my expert grading, my entire perspective on tacos has changed. I haven’t started bringing a magnifying glass to Taqueria El Rapido on 99-cent taco day, but I feel I have some responsibility to the office I have been chosen to hold. I’m not entirely familiar with how our legal system works, but I imagine judges probably oversee everyday decisions with a little extra gravity because of their appointed position. They probably bang the gavel down when they decide who’s supposed to do the dishes at home. I certainly would. This isn’t to say that I’ve gone mad with power, demanding special treatment at local taquerias, sending back plates that fail to meet my exacting standards. Instead, I try to think about what makes a taco great: the texture and flavor of the meat, how the tortilla holds up under the weight of the toppings, etc. Surely, this is a subjective exercise, but there is something to be said for trying to understand what exactly makes something great. I’ve had absurdly expensive tacos that I

Photo by Patrick McNamara

PUBLIC NOTICES

Dan Gibson, taco judge, contemplates his fortuitous side career and the perks that come with it.

puzzled over what exactly I was paying for, and I’ve had four tacos and a Mexican Coke for $5 that seemed like a culinary revelation. I’ve learned that one thing I love about the taco is that the medium provides a framework for nearly anything, but still, there’s hardly anything I enjoy more than a carne asada taco and a salsa bar. The Tucson Taco Festival is an offshoot of the Arizona Taco Festival, held up in Phoenix yearly, which is a little befuddling to me, considering it was an challenge to find a great taco during the five years I spent living in the area. Now that the taco festival concept has come home to Tucson, a city with a dizzying number of great places to find Mexican food, I’m proud to be a part of it. If you see someone at Pico De Gallo seemingly over, examining his lunch in the next few weeks, say hello. I’ll be there, strictly for research purposes, of course.

BIZ FACTS

Tucson Taco Festival Teams are welcome to enter for the chance to win a share of $5,000 in cash and prizes Saturday (April 28) 11 a.m. to 7 p.m. Rillito Downs 4502 N. First Avenue Admission: $10 Events include taco eating contest, tequila tastings, chile eating contest and Lucha Libre wrestling. More information at www.tucsontacofestival.com or (480) 466-0579.

Contact web producer Dan Gibson at dgibson@azbiz.com or (520) 295-6449.

Corrections • Tucson Realty & Trust is the fee-based managing member and listing agent for Eagle Peak LLC, a 141-acre planned development near Reddington Pass that has been noticed for foreclosure. Contrary to a report in the March 30 issue, Tucson Realty & Trust nor any of its affiliate companies are investment partners in Eagle Peak. A separate entity, the Amos Group, whose principal is George “Hank” Amos III, president and CEO of Tucson Realty & Trust, is an investment partner in the project with majority owner Hedberg Revocable Trust, Lake Geneva, Wis., which initiated the foreclosure following a decision not to complete development of the site. • Tucson Medical Center has been using magnetic resonance imaging goggles for children’s surgery since 2009. A report in the March 30 issue incorrectly said the recently acquired goggles now also in use at Diamond Children’s at University of Arizona Medical Center were the first in Tucson. • The headline on the “Your Money” column in the March 30 issue should have read “Communicating with bank is key in commercial loan modifications.” The word “in” was missing in the printed issue.

InsideTucsonBusiness.com

GOP saves former foe Patterson By Hank Stephenson Inside Tucson Business PHOENIX — Republicans in the state House of Representatives found themselves in the unlikely position this week of defending former Democrat Rep. Daniel Patterson from calls by his previous party’s leaders for an immediate expulsion — twice. Democrats attempted to toss Patterson out of the House of Representatives Tuesday after the release of an ethics report claiming the Tucson representative continually harassed, threatened and intimidated lawmakers, legislative staff and lobbyists at the Capitol, among a myriad of other concerns. But Republicans, in a standing vote, shot down the motions made by Rep. Steve Farley, D-Tucson, and Rep. Chad Campbell, DPhoenix, to expell Patterson immediately. “We have a responsibility to make sure due process is upheld,” said Rep. Ted Vogt, R-Tucson, after the vote. Republicans instead passed a substitute motion by Vogt, chair of the House Ethics Committee, to hasten the Ethics Committee proceedings, and give Patterson until Tuesday (April 10) to respond to the report before sending the committee reccomendation to the full House. It would take a two-thirds vote by the House to kick Patterson out of the Legislature. The report called for Patterson’s expulsion, citing a long of personal, professional and possibly legal problems facing the lawmaker, including: • A broad-based distrust and fear of him by members and staff • A legacy of ignoring House rules, decorum and professionalism • Verbal abuse and harassment and physical threats of those who disagree with him • Past and continued violation of court orders • A history of dishonesty and lying about bills • Frequent marijuana use • Manipulation of his former campaign manager and girlfriend Georgette Escobar into recanting her domestic violence allegations via Facebook • Seeking sex from a lobbyist in exchange for his vote. Patterson called the report a politically-motivated fishing expedition that was pieced together from annonymous sources with a predetirmined outcome in mind: his political lynching. “It’s not my intention to intimidate anyone,” Patterson said. “I think people who know me know that I have a pretty direct approach to things at the Capitol and sometimes I take a strong position, but I also think there are some people at the Capitol who have some thin skins.

APRIL 6, 2012

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American business has selected recipients of the ninth annual American Brand Excellence Awards. Created by The Business Journals, the awards honor leading business brands that are recognized by small and mid-sized business decision-makers as companies that deliver the products and services to help them achieve success. Winners were determined based on an independent nationwide survey of over 2,000 respondents who rated the strength of over 250 brands in multiple categories. For more information, call 800.433.4565 or visit www.thebusinessjournals.com.

8 APRIL 6, 2012

INSIDE TUCSON BUSINESS

OUT OF THE OFFICE ARTS & CULTURE

MEALS & ENTERTAINMENT

ATC, Invisible Theatre wrap Perfect weather, enjoy Easter brunch outdoors while you can up their seasons this month The weather should be perfect for Easter be served on the patio (and restaurant) from 10 a.m. to 2 p.m. Cost is $49 for adults, Sunday Brunch al fresco. With a high of 91 which includes a mimosa, and $29 for degrees — and, as I heard someone tell an out-of-town friend at the grocery store, that children 6-14. • Ritz-Carlton, Dove Mountain, 15000 can be depressing because those of us who N. Secret Springs Drive, Marana live here know what comes next. — www.ritzcarlton.com — (520) So, get out and enjoy it while 572-3000. Core Kitchen & Wine you can. Bar is serving a holiday-themed In earlier years, I might have brunch for $65 for adults, or $30 said you’re too late if you haven’t for children. made Easter brunch reservations • Tohono Chul Tea Room, but, considering the economy, 7366 N. Paseo del Norte in you might find some of these Tohono Chul Park — www. available and to your liking. Each tohonochulpark.org/wordpress/ one takes advantage of the dine/tearoom — (520) 797-1222. outdoors in some way. MICHAEL LURIA Easter brunch offering ham, • Arizona Inn, 2200 E. Elm chicken, lamb and mahi mahi St. — www.arizonainn.com served from 8 a.m. to 4 p.m.. Cost for adults — (520) 325-1541. A four-course plated is $28.95, children ages 5 to 10 are $14.95. meal served from 11 a.m. to 9 p.m. for $55 • Westward Look, 245 E. Ina Road for adults or $30 for children, which — www.westwardlook.com/tucson-restauincludes champagne or sparkling cider. rant/gold — (520) 297-1151. Gold restau• Dakota Cafe & Catering, 6541 E. rant is serving a three-course brunch from Tanque Verde Road in Trail Dust Town — www.dakotacafeandcatering.com — (520) a special menu. Cost is $49 for adults and $12 for children. 298-7188. Both brunch and lunch menu items will be served from 10 a.m. to 3 p.m. with entree prices ranging from $19 to $24. • Hacienda Del Sol, 5501 N. Hacienda And, starting Sunday (April 8) Maynards del Sol Road — www.haciendadelsol.com Market + Kitchen is introducing a new — (520) 529-3500. Is serving Easter brunch weekend brunch menu which after this from 9:30 a.m. to 2:30 p.m. Cost is $55 for weekend it will be serving from 9 a.m. to 2 adults, $27.50 for those ages 6 to 14. • JW Marriott at Starr Pass Resort, 3800 p.m. both Saturdays and Sundays. The menu features creations such as red velvet W. Starr Pass Blvd. — www.jwmarriottstarpancakes, smoked pork shank confit and rpass.com/ — (520) 791-6064. Easter foraged mushroom galette. brunch in the Signature Grill starts at 9:30 • Maynards Market + Kitchen, 400 N. a.m. with the last seating at 3 p.m. Cost is Toole Ave. in the Historic Depot — www. $55 for adults, $25 for children 6 through maynardsmarket.com/ — (520) 545-0577 12.

Brunch at Maynards

• Lodge on the Desert, 306 N. Alvernon Way — www.lodgeonthedesert.com — (520) 325-3366. A brunch buffet including a prime rib carving station and seafood will

Contact Michael Luria at mjluria@gmail. com. Meals & Entertainment appears weekly in Inside Tucson Business.

Arizona Theatre Company concludes its 2011-2012 season with “Red,” a 2010 Tony award-winning play that depicts Ballet Tucson presents its 15th annual conversations between abstract expresUrban Picnic from 11 a.m. to 3 p.m. April sionist painter Mark Rothko and his 15 at La Encantada, 2905 E. assistant. Skyline Drive. The event features In the play, the artist a gourmet picnic lunch, enterwrestles with both a large tainment and a live and silent commission and issues acution or art and artist-designed concerning art and commerce. lunchboxes. It opens Saturday (April 7) What began as a downtown and runs through April 28 at the fund-raiser for art space developTemple of Music and Art, 330 S. ment now benefits Ballet Tucson. Scott Ave. Tickets are $45 each and can be Invisible Theatre, 1400 N. purchased at www.ballettucson. First Ave. at Drachman Street, is HERB STRATFORD org. presenting “The Blonde, The Brunette and the Vengeful Redhead,“ April 11-29. The play, a Southwestern stage preIt feels like a rerun week at the multimiere, tells the story of a cheating husband, plex. First. the blockbuster romance film a nosey neighbor and circumstances that “Titanic” starring Leonardo DiCaprio and get out of hand quickly. Star Betsy Kruse Kate Winslet is being re-released in 3D. Craig, portrays seven different characters Then, there is the next chapter in the with their takes on the events of one fateful low-brow “American Pie” series, this one day. called “American Reunion,” which

Ballet fundraiser

Film

Art Two art exhibitions of note include a show of work by artist Emilia Arana at Conrad Wilde Gallery, 439 N. Sixth Ave. Arana whose paintings are built up over time and feature intriguing layers of color and motion, are mesmerizing. Obsidian Gallery, 410 N. Toole Ave. in the Historic Depot, has an exhibit of work by Mary Fischer and Patricia Sannit on display through May 12. Fischer’s architectural sculptures are delicate and beautiful renderings of architectural landmarks, while Sannit’s ceramic works speak of mysterious cultural artifacts and rituals.

promises to feature more cringe-worthy behavior from the original cast as their characters return home for a high school reunion. But all is not lost as the Loft Cinema, 3233 E. Speedway, is offering up two highly acclaimed films, “Jiro Dreams of Sushi,” about a famed 85-year old sushi chef, and “Pina,” an amazing documentary about the late German choreographer Pina Bausch.

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

InsideTucsonBusiness.com

APRIL 6, 2012

NEWS

Oro Valley plans southward annexation By Patrick McNamara Inside Tucson Business Oro Valley is looking to expand its southern municipal limits. The town filed paperwork with the Pima County Recorder’s office for a proposed annexation of 107 acres northwest of the intersection at Ina and Oracle roads in an area bounded by Ina Road on the south, Oracle Road on the east, Paseo del Norte on the west and Chapala Drive on the north. Tohono Chul Park is the largest parcel in the proposed annexation area, which also includes a handful of vacant properties and 11 residential parcels. St. Odilia Catholic Church is also in the annexation area as are nine commercial properties. The commercial properties, however, would not generate large sums of tax revenue for the town. “We don’t think this will be a huge windfall for the town,” Kevin Burke said, an assistant to Oro Valley’s interim Town Manager Greg Caton. Burke said the town has conducted a study of the sales-tax generating potential of the area, but was unable to discuss the details because the report was presented to the town

council in a closed executive session. Generically, however, Burke said the estimated finances would figure slightly in the town’s favor if the annexation was to go through as proposed. The annexation could pave the way for a further southward push in the future. Dozens of commercial and retail properties line much of Oracle Road south to Orange Grove Road, including Casas Adobes Plaza, Plaza del Oro and La Toscana Village. Last year Oro Valley amended its general plan to extend its planning boundaries south to Orange Grove Road. The planning boundaries also were pushed west to Thornydale Road. The stretch from Ina to Thornydale also holds many commercial and retail properties, including Foothills Mall, which the town made an unsuccessful bid to annex in 2006. Burk said extending the town’s planning area does not necessarily mean it has plans to annex all the areas within the boundaries. But as a town without a property tax, Oro Valley has few means to raise new revenue. Capturing additional sales taxes through annexation is one way. The town would also get a greater share of state shared revenue from state sales and gas taxes along with vehicle

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licensing fees. Burke said in addition to the normal public safety and road maintenance obligations Oro Valley would take on through its latest annexation proposal, the town has agreed to improve the badly degraded stretch of Northern Avenue that runs north and south between Oracle and Tohono Chul Park. The town also has considered annexing a 562-acre piece of Arizona State Land Department property between Shannon and Thorndale roads south of Tangerine Road. That proposed annexation would bridge the gap between Oro Valley and Marana, giving the two a common boundary at Thornydale Road. That proposal, however, remains in the planning stages as the state Land Department contends with recent budget cuts and layoffs. The same holds for a much larger annexation plan called Arroyo Grande the town worked on through much of 2007 and 2008. The 14-square mile state-land property stretches north from Oro Valley to the Pinal County line. Meanwhile, Oro Valley has begun notifying property owners in the Ina and Oracle area of its proposed annexation. A public

hearing is scheduled for the April 18 Oro Valley Town Council meeting. More than 50 percent of property owners representing more than 50 percent of the assessed valuation of the area would have to agree. Following that, a majority vote on the town council would solidify the annexation.

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

ITB BLOG only @ INSIDETUCSONBUSINESS.COM

Local Biz News

ONE CLICK AWAY

10 APRIL 6, 2012

INSIDE TUCSON BUSINESS

SALES SALES JUDO

How to design a compensation plan to A‘ RM’ your revenue producers Continuing our series on attracting, retaining and motivating — in another word, ARMing — your revenue producers, this week let’s explore just how much you can afford to pay revenue producers so you stay in business and make it profit while the stay “ARM”ed. By way of a quick review, ARM is a function of job fit, dollar compensation, recognition, management style, support, culture and wild card, the details of which were in the first column in the series (Feb. 3 issue of Inside Tucson Business). The starting point for designing a sales compensation plan is to assign a targeted amount of annual compensation for an “average” producer and the end of her or his first year of employment. The targeted amount shouldn’t be arbitrary. Usually it can be obtained during the normal interviewing process from producers who work for competitors or from colleagues in companies that hire similar producers. The targeted amount will vary from market to market, depending upon the cost of living. In the example chart the targeted amount was found to be $100,000 (row 8). The next step is to decide what part of the targeted amount should be fixed and what part should be variable. In this case, since these particular producers must prospect for new accounts most of the time, 75 percent of compensation is variable and is driven by production (rows 2, 4 and 11). After the first year these producers have a base salary of $25,000, roughly $2,000 per month, so 25 percent of their compensation is fixed (rows 6 and 10). It was decided not to have 100 percent of their compensation come from commissions alone due to a number of factors. The size of the average sale is large, which would result in “choppy” payouts of commissions. In some months a producer might receive a huge commission and in other months get little or nothing. This

uneven flow can place a lot of stress on producers and their families and that could lead to high rates of voluntary and costly turnover. The next step SAM WILLIAMS is to determine the range of revenues a normal group of producers is likely to generate each year (rows 1 and 2). Our example shows a range of revenues that begins at $1.5 million (column A) and grows by increments from $500,000 to a high of $3.5 million (column E). This range of revenues also takes into account the variability of revenue potential in different territories and the time needed to ramp-up revenues from new producers. For example, a new producer may only generate $1.5 million during her or his first year in a new territory, and this may actually represent good to very good performance. Revenues of $2.5 million (column C) and a 3 percent commission (row 3) produce total compensation of $100,000 (row 8), 100 percent of the targeted compensation (row 9). This represents good solid performance at the start of a producer’s second year on the job. In this particular case the plan designer believes 15 percent of the company’s producers will only generate $1.5 million of revenue per year and will achieve 70 percent of their targeted compensation (rows 1, 2 and 9). That’s largely due to the presence of new producers rather than to poor performance. The next 15 percent will generate $2 million, achieving 85 percent of their targeted compensation. The 25 percent of producers in the middle will generate the mean amount $2.5

W FOLLO DER A E L E TH

Twitter

http://twitter.com/#!/azbiz

A SALES COMPENSATION PLAN This is an example of a sales compensation plan by the amount of revenues generated..

1. % of sales team that achieves these revenues 2. Producer’s annual revenues

Below target A B 15% 15% $1.5 million

On target C 25%

$2 million

Above target D E 25%

$2.5 million (mean)

$3 million

25%

$3.5 million

3. x Sales commision %

4. = $ sales commission

$45,000

$60,000

$75,000

$90,000

$105,000 $30,000

$15,000

6. + Annual base pay

5 + Bonus

$25,000

7. = Total compensation

$70,000

$85,000

$100,000

$130,000

$160,000

8. Targeted compensation

$100,000

9. % Attained

70%

85%

100%

130%

160%

10. Fixed sales cost compensation percentage

36%

29%

25%

19%

16%

11. Variable sales cost compensation percentage

64%

71%

75%

81%

84%

12. Percentage of cost of goods sold

40%

$600,000

$800,000

$1 million

$1.2 million

$1.4 million

13. $ cost of goods sold 14. Net variable contribution

$830,000

$1.115 million

$1.4 million

$1.67 million

$1.94 million

15. Non-sales fixed costs

$20 million

16. Pre-tax profit goal

$10 million

17. Total revenues goal

$54 million

Number of producers needed to reach goal

million and achieve targeted compensation. Continuing across (column D), the next 25 percent will produce $3 million, receive a bonus of $15,000 for doing so and exceed the target by 30 percent. Finally, the top 20 percent of the team will generate $3.5 million, receive a bonus of $30,000, exceeding the compensation target by 60 percent. In this model the plan designer opted to provide bonuses to high performers to encourage as large a percentage of the sales team as possible to produce these higher levels of sales, as well as to recruit high performers away from other companies. As you read this, you might be thinking, “This is fine in theory but can we afford this?” Well, let’s find out. In this example the cost of goods sold is about 40 percent of revenues. If a Producer generates an average of $2.5 million in revenues (column A), $1 million of labor and materials (row 9) will be consumed. If you add the producer’s compensation on top of that (row 6), then $1.1 million will have been consumed to produce a net

variable contribution of $1.4 million (row 10) per producer per year. That’s good, but is it good enough? In this case the company has fixed costs of $20 million and a pretax profit goal of $10 million (rows 11 and 12), resulting in the need for $30 million of net variable contribution. Under these circumstances it would take $54 million of revenues (row 13) and a sales force of 21 average producers (row 21) to hit this goal. Likewise, 15 to 18 above average producers could accomplish the same results. So this compensation plan should work well, provided that producers are properly selected and trained and that they come up to speed fairly rapidly to generate $2.5 million of revenues each year. In the next column (April 20), I’ll cover how to build a first year compensation planfor new producers as they ramp-up revenues to this figure.

Contact Sam Williams, president of New View Group, at swilliams@ newviewgroup.net or (520) 390-0568. Sales Judo appears the first and third weeks of each month in Inside Tucson Business.

InsideTucsonBusiness.com

APRIL 6, 2012

MEDIA

Nielsen shakes up Tucson TV market with latest ratings By David Hatfield Inside Tucson Business Just when it seemed the quarterly TV ratings for the Tucson market might be getting predictable, Nielsen Media Research released its latest data shaking things up. The first thing most media types check out are how local newscasts fared with viewers and in these ratings, taken Feb. 2-29, KVOA 4 is clearly back into ratings contention among targeted 25-to-54 year-old viewers. The NBC affiliate’s newscasts have the most viewers in the targeted demographic weekdays at noon, 4 p.m. and 6 p.m. CBS affiliate KOLD 13, which has been No. 1 most often in recent years, held on for wins at 5 p.m. and 10 p.m. weekdays. In the early-morning hours it’s a split, with KOLD winning the 5-6 a.m. hour and KVOA taking the 6-7 a.m. hour and when the two hour combined, the average is a statistical dead heat (KOLD’s number rounds up but it’s by the narrowest of margins, accounting for only about 200 viewers). Meanwhile, ABC-affiliate KGUN 9’s newscasts drew the short straw this time, with ratings for most newscasts down from a year ago for close, but third-place, finishes in each of the weekday newscast time slots. Going beyond the basic ratings themselves, Nielsen’s latest data also suggests we Southern Arizonans did a few things differently this February. While the month is always a busy one when it comes to outside-the-home activities, this February’s weather appears to have made it even more so. Overall TV viewership didn’t set many records this February, though some time periods were affected more than others. For instance, the numbers of people watching prime time and late-night TV were comparable to what they were a year ago and in November but early evening viewership was off by as much 10 percent. And clearly, there weren’t many earlyrisers — or at least early-risers who turned on their TVs. Compared to February 2011, 45 percent fewer viewers between the ages of 25 and 54 turned on their TVs before 6 a.m. Nevertheless, all three stations were close with fewer than 1,300 viewers ages 25-to-54 separating the three stations in the early morning. In other news ratings, the impact of KOLD taking over the newscasts on Fox-affiliate KMSB 11 didn’t register much in this first time out, most likely due to the fact that they took effect just one day before Nielsen began taking these ratings. Viewership for the 9 p.m. Fox 11 newscast was in keeping with ratings the station had posted previously. And the new Fox 11 “Daybreak” program at 7 a.m. registered

numbers comparable to what the station had been doing previously with the Phoenixoriginated morning show “Good Morning Arizona.” For the stations that were winners in these latest ratings or, for that matter stations that didn’t do so well, there’s not much time to relish the success or sulk about the loss, Nielsen is due back for the next four-week ratings survey starting April 26.

Prime time top 10 So what are Southern Arizonans’ favorite prime time shows? Here’s what Nielsen says were the 10 most popular series in February among 18-to-49 year-olds (the demographic the networks use), with estimated average number of viewers: 1. “Modern Family,” 8 p.m. Wednesdays, KGUN 9 - 34,265 2. “The Voice,” 7 p.m. Mondays, KVOA 4 - 33,375 3. “The Office,” 8 p.m. Thursdays, KVOA 25,365 4. (tie) “NCIS,” 7 p.m. Tuesdays, KOLD 13 - 24,920 “Criminal Minds,” 8 p.m. Wednesdays, KOLD - 24,920 “How I Met Your Mother, 7 p.m. Mondays, KOLD - 24,920 7. “Grey’s Anatomy,” 8 p.m. Thursdays, KGUN - 24,475 8. “Big Bang Theory,” 7 p.m. Thursdays, KOLD - 23,140 9. “2 Broke Girls,” 7:30 p.m. Mondays, KOLD - 22,250 10. “Smash,” 9 p.m. Mondays, KVOA 21,360 If you’re keeping score that’s five for CBS, three for NBC and two for ABC — one of the best showings in recent years for NBC but one of the more disappointing for ABC and Fox. In fact, Fox only had one series ranked in the top 20, “American Idol” at 7 p.m. Wednesdays on KMSB 11, which tied for No. 17 with an average of 17,355 viewers 18-49 years-old. Those “American Idol” ratings are happening all across the country. The series, now its 11th season, is no where near the ratings powerhouse it once was an Fox officials have publicly stated they’re looking for ways to pump some fresh energy into the series.

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

TUCSON TV NEWS RATINGS Viewers 25-54*

Household share *

Trend*

Feb 2012

Nov 2011

Feb 2011

Feb 2012

Nov 2011

Feb 2011

1.2

1.8

2.9

15.9%

19.6%

21.7%



5-7 a.m. Monday-Friday KOLD 13

News 13 This Morning

KVOA 4

News 4 Tucson Today

1.1

1.3

1.4

15.9%

15.1%

17.0%



KGUN 9

Good Morning Tucson

0.9

1.6

0.8

14.6%

14.5%

10.4%



7 a.m. to 9 a.m. Monday-Friday KVOA 4

Today Show

2.2

1.9

3.7

20.8%

21.3%

24.2%



KOLD 13

Good Morning America

1.6

1.3

0.6

15.6%

14.3%

10.7%



KGUN 9

Early Show

1.3

0.8

1.6

11.3%

9.8%

12.5%



KMSB 11

Fox 11 Daybreak **

0.3

0.2

2.3%

2.5%

1.4%



0.1

0.2

2.0%

4.1%

3.8%



11 a.m. Monday-Friday KGUN 9

Morning Blend

Noon Monday-Friday KVOA 4

News 4 Tucson

0.8

1.0

14.3%

18.4%

15.4%



KOLD 13

News 13

0.6

1.0

0.9

17.8%

14.0%

13.4%



4 p.m. Monday-Friday KVOA 4

News 4 Tucson

1.0

0.7

8.7%

10.2%

6.3%



KOLD 13

News 13 **

0.6

0.9

2.3

6.5%

7.8%

14.2%



5 p.m. Monday-Friday KOLD 13

News 13

2.1

3.6

3.2

16.2%

14.3%

15.3%



KVOA 4

News 4 Tucson

1.4

2.6

14.1%

15.7%

19.0%



KGUN 9

KGUN 9 News

1.0

1.4

1.7

11.9%

14.8%

13.4%



5:30 p.m. Monday-Friday KVOA 4

NBC-Brian Williams

2.3

2.8

18.8%

17.0%

21.7%



KOL 13

CBS-Scott Pelley

1.9

3.8

3.0

15.1%

15.0%

13.1%



KGUN 9

ABC-Diane Sawyer

1.1

1.5

11.1%

14.0%

12.3%



6 p.m. Monday-Friday KVOA 4

News 4 Tucson

1.7

1.6

2.4

11.9%

10.9%

12.3%



KOLD 13

News 13

1.6

2.7

2.8

11.0%

10.7%



KGUN 9

KGUN 9 News

0.9

1.5

1.8

7.5%

11.0%

8.7%



9 p.m. Monday-Friday KMSB 11

Fox 11 News

1.4

1.1

1.7

3.8%

3.6%

5.5%



KWBA 58

KGUN 9 News-CW

0.2

0.5

0.6%

0.7%

2.3%



10 p.m. Monday-Friday KOLD 13

News 13

4.5

4.4

3.4

22.1%

22.4%

19.8%



KVOA 4

News 4 Tucson

3.1

2.8

2.6

16.2%

12.7%

14.2%



KGUN 9

KGUN 9 News

2.4

3.2

2.3

10.8%

15.0%

10.8%



* Viewers 25-54: Each whole rating point represents an estimated 4,230 viewers ages 25-54 in February 2012 and November 2011 and 4,520 viewers in February 2011. Household share: Percentage of households watching TV. Trend:Year-over-year 25-54 ratings changes of more than 15 percent or at leat 0.4 of a ratings point.. ** Fox 11 Daybreak replaced Good Morning Arizona effective Feb. 1. News 13 at 4 p.m. replaced Oprah Winfrey in September 2011.

12 APRIL 6, 2012

INSIDE TUCSON BUSINESS

PEOPLE IN ACTION AWARDS Four students from Pima Community College have been recognized nationally for their efforts in the 2012 Coca-Cola Community College Academic Team scholarship competition. Adam James was named a 2012 Coca-Cola New Century Scholar for earning the top rating in Arizona in the scholarship competition. He will receive a $2,000 scholarship. Maya

Swainson has been named a Coca-Cola Gold Scholar and will receive a $1,500 scholarship. Sharon Buhs and Lorre Laws also were named Coca-Cola Silver Scholars. Each will receive a $1,250 scholarship. NEW HIRES

as Life Care Centers of America’s Saguaro Region vice president. Prior to that appointment, he worked for Arizona Baptist Retirement Centers in several positions, including vice president of operations and executive director of several of the company’s buildings.

La Cañada Care Center has hired David Kafora as executive director. Before joining La Cañada Care Center, Kafora served

with a concentration on human resources.

GINGER SWITZER

ELLEN LANGER

Ginger Switzer has been hired as a sales resource officer with National Bank of Arizona. She is responsible for developing new and enhancing existing customer

{TELL US ONLINE} Now your business can tell Inside Tucson Business about new hires, promotions and special awards online. Go to www.insidetucsonbusiness.com and click the “People in Action” button. From there you can submit your announcement and we’ll publish it online and in print.

Keynote Speaker

Master of Ceremonies

A Celebration of Marketplace Excellence

Tom McNamara

Dale Dauten

Author of six books, including The Gifted Boss and The LaughingWarriors

KVOA Anchor

Title Sponsor

Further Instructions Needed

relationships through networking, community involvement and referrals. Her primary focus will be with Women’s Financial Group and not-for-profit customers. She has several years of experience in business development in the Tucson community with an emphasis in commercial construction. PROMOTIONS Old Pueblo Community

Services has promoted Ellen Langer to director of finance where she will manage all of the organization’s accounting duties. She graduated from the University of Texas at Austin with a bachelor’s degree in accounting. Langer also has worked as an auditor for the Comptroller of the State of Texas.

InsideTucsonBusiness.com

APRIL 6, 2012

GOOD BUSINESS ON GUARD

BBB celebrates 100 years of building trust If you asked me to use one word to describe what the Better Business Bureau is all about I would say, “trust.” Building and maintaining trust between both businesses and consumers is at the core of what BBB does. It’s our fundamental mission — and one we continue to carry forward as we celebrate our 100th anniversary this year. BBB was founded by a group of advertising executives who looked out upon their industry and saw a profession rife with dishonesty — an industry that consumers thoroughly mistrusted. In an attempt to save their beleaguered profession from itself they formed the first Better Business Bureau to help restore the public’s trust in advertising. Of course these days BBB aims to build and maintain trust in every corner of the marketplace — not only in advertising. Trust is what gets customers in the door, and trust is what keeps them coming back. BBB’s founders realized that trust was the foundation of the marketplace in 1912, and today that hasn’t changed. However, to many business people the fact that trust is at the center of their business is an obvious truth — almost an afterthought. The real challenge for businesses is figuring out how to foster trust, not just between themselves and their customers, but within their companies as well. Writing in the Harvard Business Review, Linda Hill and Kent Lineback say the first thing a business needs to realize is how “context sensitive” trust is. That is, what do your customers and employees trust you to do in the various contexts of their interactions with you? It’s common for business owners and managers to think trust will take care of itself, but Hill and Lineback say it’s actually something owners and managers need to think about deeply. One reason many owners and managers may not spend a lot of time thinking about building trust is “most of us resist the idea that trust is something you can actively and consciously encourage,” Hill and Lineback write. Nothing could be further from the truth — trust is something that must be earned constantly throughout a company’s relationships with its customers and employees. Many of the ways a business cultivates trust will depend on context unique to that particular business, but there are a number of basic steps all businesses can take to help their cause. Writing for Bloomberg Business Week, Michelle Nichols identified five basic ways a business can build trust between itself and its customers: • Build trust in your company. If your company has any type of certificates that attest to the trustworthiness of how you do business, make sure all sales reps carry

color copies. If customers or vendors come to your office, post copies in the reception area of your business. These certificates are “silent sellers.” • Build trust in KIM STATES your products and services. Testimonial letters are a great way to build customer trust in what you sell, especially those letters that describe how life or business changed for the better after a customer bought from you. Make color copies; put them in plastic page protectors, and, again, have all the sales reps carry them and frame them for your office walls, too. • Build trust in you. Earning a customer’s trust in you as a person starts with the basics. Are you on time? If you say you’ll be there at 9 in the morning and you show up at 9:10, how do you expect your customer to believe you when you say your copier makes 25 copies per minute or your products are within a 0.001 millimeter of the specifications? • Build trust in your marketing. Don’t

stretch the truth in any of your sales or marketing materials. Customers have their radar on for “sins of omission and commission,” so stick to the truth. This applies to all your marketing — materials, sales presentations, press releases, advertising, business cards and websites. • Build trust in your industry. Sometimes, entire industries have a bad reputation. Even if you run a trustworthy operation in such an industry, it will be a challenge persuading your customers to trust your industry as well as your particular operation. For 100 years BBB has strived to bring trust to the marketplace, because when businesses and consumers trust each other everyone wins. On April 26 we have the privilege of celebrating nine companies in our community that foster marketplace trust, through their commitment to ethics, customer excellence and their communities. They’re called the Torch Awards details are online at www.tucson.bbb.org/torchawards.

Contact Kim States, CEO of the Better Business Bureau of Southern Arizona, at kstates@tuc son.bbb.org or (520) 888-6161. The BBB website is www.tucson.bbb.org. On Guard appears the first

TUCSON BBB ACTIVITY REPORT MARCH 2012 Top 10 most complained about industries

I.T. Genius

The

best employees you never had.

Complaints

Settled

Nurseries - plants, trees, etc.

16.67%

New car auto dealers

80%

Martial arts supplies and equipment

40%

Plumbing contractors

100%

Wouldn’t you love to

Air conditioning contractors and systems

100%

have a top IT team,

Propane gas

66.67%

Auto repair and service

100%

Health clubs

66.67%

Martial arts

100%

Swimming pool equipment and supplies

100%

10.

Top 10 most inquired about industries

Inquiries

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Travel clubs

1,388

Air conditioning contractors and systems

1,380

get top-notch IT results, without

Roofing contractors

1,329

busting your budget.

Auto repair and service

1,191

Used car auto dealers

1,001

Plumbing contractors

951

General contractors

934

Landscape contractors

755

Property management

607

Dentists

596

10.

Source: BBB of Southern Arizona

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14 APRIL 6, 2012

INSIDE TUCSON BUSINESS

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REMEMBERING TUCSON REMEMBERING TUCSON

Fred Boice: from Arivaca ranch hand to civic leader This “merry-go-round” ride was high on an Axtell windmill — one that pumped water a quarter of a mile downhill to the headquarters of the ranch near Arivaca. It was early morning, the wind was calm, and Fred Boice just didn’t take the time to think about putting on the windmill brake. Climbing the 33-foot tower to do a repair, a gust of wind suddenly caught him spinning in circles desperately grasping hold of one of the fans. Yes, this is the Fred Boice you probably know. The one who served two consecutive terms as president of the Arizona Board of Regents, was also a president of the University of Arizona Foundation, served on the boards of Junior Achievement, Tucson Airport Authority and Tucson Metropolitan Chamber of Commerce, was a director of Pima Savings and more. But let’s go back a generation. In 1893, Henry Gudgell Boice, Fred’s father, was born in Independence, Mo. His mother Margaret Tait was a native of Phoenix. They were married at 5 o’clock in the morning one June day in 1924 to beat the heat. Margaret Tait’s stepmother Addie was a fine seamstress who made delicate undergarments for Margaret’s trousseaux. In those days, y , colored dyes y bled. When people ple

perspired from the heat, the dye from the garments could be absorbed by the body. Margaret Tait’s father Fred Tait was a farm hand from Iowa. He eventually bought MARY L. PEACHIN a thrashing machine, and then a farm. He sold the land that would become known as the Phoenix’ insane asylum at 25th and Van Buren Street. Today it’s officially named the Arizona State Hospital. In 1910, when Margaret’s mother, Anna Behrens, died of tuberculosis, she left Fred Tait with three daughters and a son to raise. Fred wrote an old girlfriend back in Iowa to ask her to “come out and marry me and help raise my family.” Addie Richards agreed. Fred Tait Boice, born in 1930, was the third child of Margaret and Henry. Prior to Fred’s birth, his older brother had died of pneumonia during early childhood, and his older sister Peggy, who currently lives in Prescott, almost died during childbirth.

e family

Courtesy of the Boic

Fred Boice in 1974

InsideTucsonBusiness.com

APRIL 6, 2012

REMEMBERING TUCSON Because his mother Margaret had birthing problems, it was decided she should deliver Peggy in Pasadena, Calif. Henry’s father’s name was Henry Stephen Boice and his mother was Lu Belle Gudgell. In Independence, Mo., the Gudgells had imported the first registered Hereford cattle to America. Just after the turn of the century, they arrived in Arizona and formed the company of Boice, Gates, and Johnson. It would later be known as the Chirichua Cattle Company. Between 1928 and 1930, they leased land on the San Carlos Apache reservation. When the Apaches asked that their lands be returned, the Chirichua Cattle Company purchased the Eureka ranch, north of Willcox, the Rail X, between Sonoita and Patagonia, the Empire Ranch, Sonoita north to the Rincon Mountains, and Arivaca ranch. They gathered 48,000 Herefords from the reservation and moved them to the four ranches. Henry Gudgell was the oldest of five children. His younger brother Charles ran the Arivaca ranch. Fred, at the age of 11 spent his summers working for Uncle Charlie. Fred’s family moved to Tucson in 1937. They built a house in El Encanto when it was “in the middle of nowhere.” John Sundt, son of M.M. Sundt, the founder of Sundt Companies, was both their contractor and carpenter. “He drove nails in our house,” Fred Boice recalls. Fred attended Sam Hughes Elementary, Mansfield Junior High, and Tucson Senior High School prior to enrolling at Occidental College in Los Angeles. He graduated with a B.S. in Economics. When Fred met Ann Kelley at Tucson High School, he was disappointed he couldn’t get her attention. She was more interested in the student body president. But his perseverance won out and she later became his wife. During his college undergraduate years, Boice drove from Tucson to Los Angeles, often giving a ride to Peggy Small, daughter of Bill Small, former publisher of the Tucson Citizen. He would drop her off in Claremont, east of L.A., where Peggy attended Scripps College. Prior to one return trip to Tucson, a friend told Boice that a gal he knew named Ann was attending Pomona College, also in Claremont. He offered to pick her up and give her a ride home to Tucson. Unfortunately, she had spent most of the previous night studying, and instead of chatting, she slept in the back seat for the entire ride. Fred had struck out again. Ann Kelley attended Pomona for two years then transferred to the University of Arizona where she received her bachelor’s degree. After obtaining a graduate degree in Education, she taught at a Sopori school near Arivaca for several years before teaching coming to Tucson to teach in a preschool. Fred Boice returned from Occidental College and enrolled at the UA to take

some graduate courses. One day in December 1950, Fred invited Ann to visit the ranch in Arivaca. Two years later to the day, on Dec. 23, 1952, they were married. The following summer the couple moved to the ranch in Arivaca. The spin on the windmill took place not too long after they arrived. Another time, while riding “half asleep” on a hot summer day, Boice noticed a hawk circling that suddenly dove to the ground. He rode over to take a look and saw that the hawk had grabbed a rattlesnake. The snake was flailing in the hawk’s talons then his fangs struck the hawk and killed it. “You don’t see that happen very often,” he recalled. Uncle Charlie was a hard driving guy. Boice and the ranch hands woke at 4 a.m., and after a hearty breakfast, usually didn’t return to the ranch house until dark. To quench their hunger and thirst, Boice noticed the ranch hands picked chile pepinos. At the time Boice didn’t know they were sucking them to create saliva and that he shouldn’t chew the hot chiles. As a result, he wound up with a mouth full of sores for a week. “That was a hard lesson that I learned.” The Boices had five children. When it came close to her due date for her first child in 1954, Ann drove to Tucson to see Dr. Bill Carrell. Told she was not quite ready to deliver, she returned to the ranch and around midnight, she went into labor. “It was during a monsoon raining pitchforks, and instead of taking an hour and a half, it took us 11 hours to reach Tucson Medical Center,” Boice says. “Water was flowing everywhere, roads were washed out, and the Santa Cruz River was cresting the bridge at Continental.” Before they got to Kingsley Junction, Boice, neighbor Richard Merchant and some other men put Ann on a cot and carried her across Batamote Wash. Twenty minutes after she arrived TMC, their first son, Henry, was born. The other children, born between 1957 and 1962, Mariann, Jennifer, Fred Jr. and Margaret were easier births. In 1968, the Boices bought a house in Tucson so their children could attend schools. Fred Boice commuted back-andforth to the ranch. He started the American Cattle Company which fed investor cattle in 30 feed yards in nine states. Ultimately they had 100,000 cattle on feed. Boice became president of the Arizona Cattle Growers, and served on the executive committee of the National Cattlemen Association. Required to spend time in Washington, D.C., he commuted on an American Airlines red-eye flight to cut down on the amount of time he was away. When his father was president of the association, he had to travel by train, a trip that would 6½ days to Washington, D.C. “Dad would be gone for a month,” Boice said. In the 1970s, Boice was on the board of directors for Pima Savings and Loan.

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16 APRIL 6, 2012

INSIDE TUCSON BUSINESS

REMEMBERING TUCSON

Courtesy of the Boice family

BOICE continued from page 15

Two pages from a 1989 booklet about the Boice family ranch in Arivaca.

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Jack Sakrison was chairman and other board members included George Bideaux, Frank O’Reilly and Elmer Present. It was a sound financial organization with officers Kenny Herman president, Lynn Folger vice president and Larry Brown treasurer. “Harry Wood, presided over the University of Arizona Foundation before my term. One day he asked me if I would consider serving on the Arizona Board of Regents. I thought regents were the wise men of the state, and it would be the pinnacle of community and state service to be appointed. Harry campaigned arduously, but I didn’t get appointed. It was devastating. I was 62 and I thought by the time of the next appointment, I would be too old,” Boice said. Eight years later in 2002, the governor’s office — with a nudge from regent Jack Jewett — called to ask Boice if he would come up to Phoenix, like the next day. “About a week later, I was driving by Randolph Park. The cell phone rang and it was Governor Jane Hull asking me to serve on the board of Regents. I told her I would be honored.” “I thought being a regent was an enormous responsibility. I spent at least 20 hours a week reading, attending meetings, and commuting to Phoenix. The board’s responsibility includes overseeing 20,000 employees, 100,000 students, and a $4 billion budget. There were times while dealing with the Legislature when I would hear ‘we don’t need all this education, why do we need this research, why can’t we just have a state college,’” Boice recalls. Since the 1980s, Boice has worked as a bankruptcy trustee. He continues working for the courts managing assets, businesses, and dispute resolutions. “The best thing that ever happened to me was marrying Ann. She is the light of my life. We have a great family, and they all have done an incredible job with their lives.”

Do you have a historical Tucson story to share? Contact Mary Levy Peachin at mary@peachin.com. Her historical columns appear the first week of each month in Inside Tucson Business.

InsideTucsonBusiness.com

APRIL 6, 2012

CALENDAR SPECIAL EVENTS

Tucson Means Business Forum Thursday (April 26) 11 a.m. to 1 p.m. Tucson Police Department West Division 1310 W. Miracle Mile RSVP: David Higuera ward3@ tucsonaz.gov or (520) 791-4711 http://cms3.tucsonaz.gov/business Description: Learn how to do business with and in the City of Tucson. Hear from Mayor Rothschild and other city ofﬁcials. Lunch provided by Blue Willow. Tucson Dowsers May Presentation Saturday (May 5) 1 to 3 p.m. Unity of Tucson 3617 N. Camino Blanco Wrap-up gathering for the season includes a panel of experienced dowsers. Contact: Terry Klunk TucsonDowsers@ gmail.com or (520) 531-8039 $5 suggested donation www.TucsonDowsers.org

professional development meeting Every third Wednesday, 5:30 to 8 p.m. Sheraton Four Points Hotel 1900 E. Speedway RSVP: Kay at franklin@dakotacom. net or (520) 883-1819 Cost: $18 members, $20 nonmembers, includes dinner “Real Estate Investment Plan” Keller Williams Southern Arizona 1745 E. River Road, Ste. 245 Third Tuesday 6 p.m. Workshop for individuals considering investment

RSVP by noon Mondays (520) 909-9375 Kiwanis Club of Oro Valley Wednesdays, 7 a.m. Holiday Inn Express 10150 N. Oracle Road Info: jepsenaz@comcast.net Cost: $8 LeTip Midtown Every Tuesday, 7:01 to 8:31 a.m. El Parador Restaurant 2744 E. Broadway RSVP: (520) 296-9900 Cost: $10

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Inside Connections Second and fourth Wednesday, 7:15 a.m. Home Town Buffet 5101 N Oracle Road RSVP: Eric Miller at (520) 979-1696 Institute of Management Accountants Third Thursday, (September through May) 6:30 p.m. to 8 p.m. Old Pueblo Grille 60 N. Alvernon Way RSVP: Gale McGuire (520) 584-3480 or gale.mcguire@roberthalf.com International Association of Administrative Professionals San Xavier Chapter monthly dinner &

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LeTip Tucson Executives Chapter meeting Every Tuesday, 11:30 a.m. to 1 p.m. Macayo’s Mexican Kitchen 7360 N. Oracle Road RSVP: (520) 299-9600, bwmartin@cox.net LeTip International I-19 Business Networkers Every Tuesday, 11:30 a.m. to 1 p.m. Amado Territory I-19 exit 48 Information: (520) 591-5500 Cost: $15

18 APRIL 6, 2012

INSIDE TUCSON BUSINESS

BRIEFS GET ON THE LIST

Next up: Largest employers in Southern Arizona Inside Tucson Business is gathering data for the 2013 edition of the Book of Lists. Categories that will be published in upcoming weekly issues of Inside Tucson Business are: â&#x20AC;˘ April 13: Banks, Credit unions â&#x20AC;˘ April 20: Largest employers in Southern Arizona â&#x20AC;˘ April 27: Architectural firms, Interior design firms, Engineering firms

â&#x20AC;˘ May 4: Defense contractors â&#x20AC;˘ May 11: Investment capital and lending, Venture capitalists If your business fits one of these categories, now is the time to update your profile. Go to www.InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page. New and unlisted businesses can create a profile by following the directions. The Book of Lists is a year-round reference for thousands of businesses and individuals. To advertise your business, call (520) 294-1200.

RETAIL

Retailers return for national conference Why do consumers love certain retailers? Industry executives from companies including Macyâ&#x20AC;&#x2122;s, the Home Depot, Walmart, PetSmart, General Growth Partners, Kraft, and Nielsen research will share their formulas for success next week in Tucson at the 16th Annual Global Retailing Conference. Terry Lundgren, president and CEO of Macyâ&#x20AC;&#x2122;s and University of Arizona alumnus,

will open the conference that is a forum for strategies and techniques to better engage and serve customers. The universityâ&#x20AC;&#x2122;s center for retailing is named after Lundgren. â&#x20AC;&#x153;Our industry is changing quickly, with new practices and technologies emerging at every turn to help us win with customers. This conference is designed to provide an in-depth look at some of the leading companies that are changing the face of retailing, and the ideas that continue to drive their success,â&#x20AC;? he said. Among the other CEOs and senior executives scheduled to speak are: Frank Blake,

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InsideTucsonBusiness.com

APRIL 6, 2012

BRIEFS of the Home Depot; Robert Moran, of PetSmart; Steve Church, Avnet; David Calhoun, Nielsen; Michelle Gloeckler, Walmart; Barry Calpino, Kraft Foods; and Sandeep Mathrani, General Growth Properties. The Terry J. Lundgren Center for Retailing is part of the University of Arizonaâ&#x20AC;&#x2122;s John and Doris Norton School of Family and Consumer Sciences. It brings together the resources and expertise of academia and the retail industry for the purpose of developing strong professionals. About 500 students are enrolled. The conference takes place April 12 and 13 at the JW Marriott Starr Pass Resort and Spa, 3800 W. Starr Pass Blvd.

Best Buy starts to reveal store closures After reporting disappointing revenue numbers, Best Buy says it will close 50 of its 1,099 stores in an effort cut costs by $250 million this year and by $800 million over the next three years. The company said it would announce specific store closures as they are finalized. So far, the company has told employees at five stores in its hometown market of Minneapolis and one store in San Antonio that their stores will close by the end of this year. The company has 25 stores in Arizona, including three in Tucson and one in Oro Valley. As part of its plan, Best Buy says it will add

smalleer mobile shops. Currently it has 305 mobile stores and said it anticipates having between 600 and 800 of them open by 2016.

TRANSPORTATION

Gas price hikes stall, but it may be temporary The average price for regular gas in Tucson dipped about a penny per gallon over the past week to $3.72Â˝, according to AAA Arizonaâ&#x20AC;&#x2122;s Fuel Gauge Report. The statewide average also was down a penny per gallon to $3.89. But the stability in prices could be shortlived say experts who say many refineries still havenâ&#x20AC;&#x2122;t converted to production of summertime blends that requires them to shut down thus limiting gas production. In the meantime, AAA Arizona reports gas prices have topped $4 per gallon in a rural areas of the state such as Ajo, Camp Verde, Tuba City, Wickenburg and Williams.

ENTERTAINMENT/SPORTS

Padres open second season at Kino The Triple-A Tucson Padres opened their 2012 season Thursday and will continue an eight-game home stand at Kino Stadium, 2500 E. Ajo Way, through April 12. This season, the Padres will play 72 home

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games, up from 68 last year. In this first series, they are playing the Fresno Grizzlies through Sunday and then the Sacramento River Cats next Monday through Thursday. After that the team will go on the road to Salt Lake City and Colorado Springs before returning home for a four-game stand against the Salt Lake City Bees April 21-24. Tickets for Padres home games are for sale online at www.tucsonpadres.com or (520) 434-1367.

LEGAL

El Guero Canelo extortionist gets 41 months in prison A man who pleaded guilty to attempting to extort a popular Tucson restaurant owner was sentenced in federal court. U.S. District Judge Marvin E. Aspen sentenced Eduardo A. Sabori, 36, in federal court in Tucson to 41 months in prison followed by three years of supervised release. In September, Sabori pleaded guilty to interfering with commerce by threats or violence in connection with a scheme to extort El Guero Canelo owner Daniel Contreras. Sabori, who operated a competing restaurant and hot dog stand, sent letters to Contreras demanding $600,000 to be left in a dumpster at a hotel near Broadway and Wilmot Road.

HEALTH CARE

Hospital group drops lawsuit against AHCCCS The Arizona Hospital and Healthcare Association dropped its lawsuit against the stateâ&#x20AC;&#x2122;s Medicaid program in an effort to focus more on developing a partnership with the program, the Arizona Health Care Cost Containment System (AHCCCS). The hospital assocaition had filed the lawsuit in November seeking to stop a 5 percent cut in hospital payment rates from taking effect. â&#x20AC;&#x153;As we look ahead, we know the state and Arizona hospitals will continue to face economic challenges and we look forward to working with state leaders like Senate President Steve Pierce to prepare for the future and grow our stateâ&#x20AC;&#x2122;s economy,â&#x20AC;? said Laurie Liles, president and CEO of the association. Monica Coury, assistant director in the Office of Intergovernmental Relations at AHCCCS, said her agency applauds the association for dropping the lawsuit. AHCCCS has 1.3 million enrollees who qualify for Medicaid services. â&#x20AC;&#x153;We want to acknowledge the association for determining that it is not in the best interest of the hospital industry or the AHCCCS program to further pursue this litigation, particularly in light of the courtâ&#x20AC;&#x2122;s recent ruling in favor of the state,â&#x20AC;? Coury said.

20 APRIL 6, 2012

INSIDE TUCSON BUSINESS

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InsideTucsonBusiness.com

APRIL 6, 2012

FINANCE YOUR MONEY

TUCSON STOCK EXCHANGE

How to decide when to start taking Social Security benefits

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

The age when one starts Social Security retirement benefits can be arguably the most significant factor in the ability to maintain financial security throughout retirement. Unfortunately, some financial advisors erroneously believe the client should maximize years of payments from Social Security, while others focus exclusively on a present-value break-even age, or money’s worth, analysis. In contrast to those, I found an excellent white paper published in the second quarter 2012 issue of Benefits Quarterly written by Kenn Beam Tacchino, David Littell and Bruce D Schobel. The authors argue that basing the decision on only one way of looking at the question is insufficient and propose that practitioners use a comprehensive decision model that accounts for the net present value, longevity risk and Social Security legal strategies in properly framing the solution. For a person retiring today, a claiming age of 62 (the earliest possible by law) will give him or her a monthly benefit equal to 75 percent of the primary insurance amount. If, however, the same individual were to wait until the age of 72 to collect Social Security retirement benefits, he or she would receive 132 percent of the primary insurance amount. If a person claims Social Security at the earliest possible moment, he will receive $1,140 per month. If he defers collecting Social Security benefits until age 70 (in 2020), he will receive $2,007 per month. Authors Tacchino, Littell and Schobel outline a comprehensive seven step checklist as well as a model. (I’m shortening them here due to space limitations.) 1. Factors affecting the worker’s retirement benefit: Benefit calculation, Earnings, Age benefits begin, Automatic increases in benefits, Earnings after Social Security have begun, Windfall elimination provision, Tax treatment of Social Security benefits. 2. Factors affecting spousal retirement benefits: Spousal benefit, Spousal benefits beginning early, Dependence on worker’s benefits, Spousal benefits divorce rule, Eligibility for multiple benefits, Timing of application for spousal benefits. 3. Factors affecting survivor benefits for married retirees: Purpose of Survivor Benefits, When a widow(er) is entitled to a survivor benefit, Divorced spouse, Amount of spousal survivor benefits, Effect of government pensions on survivor benefits. 4. Factors needed for a net-presentvalue analysis: Appropriate discount rate, Life expectancy, Earnings test impact, Taxation of Social Security benefits impact,

Southern Arizona presence

Factoring in the spousal survivor benefit, Factor the impact of cost-ofliving adjustments, Strategies, Widow or widower strategy, Claim now, claim more later strategy, File and suspend SUSAN MOORE strategy, Triple dip strategy, Maximize the survivor benefit strategy, Minimize the “tax torpedo” strategy, Maximizing through suspensionof-benefits strategy. 6. Key components of a Social Security education program: Use a comprehensive planning approach, Focus on the desired replacement ratio, Care for surviving spouse, Understand the Social Security annuity advantage. 7. Potential differences among clients and their implications: Work and claiming decisions, Key Factors in the claiming decision — the ability or desire to continue working, wealth sources of income outside of Social Security, personal risk tolerance to investing, financial reliance on Social Security, ability to boost Social Security income by working past age 62, age disparity between spouses and the earnings disparity between spouses. The authors then offer a four-step model to help in the process: 1. Change your perceptions through an educational program. 2. Assess funding adequacy 3. Carefully assess your options under Social Security 4. Integrate the claiming decision into a cohesive retirement income plan. The concern is the vast majority of Americans are not properly choosing the optimal start date for Social Security. Fewer than 2 percent claim it at age 70. More than half claim it at age 62. In all probability those numbers could be reversed. This model should enable a process that leads to more rational choices. Read the full article on my website — www.moorefs.com — click on Social Security Claiming Age under “Tools, Articles & Reports.”

Contact Susan L. Moore Vault, president of Moore Financial Strategies, at susan@ moorefs.com or (520) 296-4464. She also hosts “Safe Money Strategies” from 6-6:30 a.m. Saturdays on KNST 97.1-FM/790-AM.

Company Name

Symbol

April. 4 Mar. 28 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 CEXI.OB PRSC UNS

Alcoa Inc (Huck Fasteners) AA AMR Corp (American Airlines) AMR Augusta Resource Corp (Rosemont Mine) AZC Bank Of America Corp BAC Bank of Montreal (M&I Bank) BMO BBVA Compass BBV Berkshire Hathaway (Geico, Long Cos) BRK-B* Best Buy Co Inc BBY BOK Financial Corp (Bank of Arizona) BOKF Bombardier Inc* (Bombardier Aerospace) BBDB CB Richard Ellis Group CBG Citigroup Inc C Comcast Corp CMCSA Community Health Sys (Northwest Med Cntrs) CYH Computer Sciences Corp CSC Convergys Corp CVG Costco Wholesale Corp COST CenturyLink (Qwest Communications) CTL Cvs/Caremark (CVS pharmacy) CVS Delta Air Lines DAL Dillard Department Stores DDS Dover Corp (Sargent Controls & Aerospace) DOV DR Horton Inc DHI Freeport-McMoRan (Phelps Dodge) FCX Granite Construction Inc GVA Home Depot Inc HD Honeywell Intl Inc HON IBM IBM Iron Mountain IRM Intuit Inc INTU Journal Communications (KGUN 9, KMXZ) JRN JP Morgan Chase & Co JPM Kaman Corp (Electro-Optics Develpmnt Cntr) KAMN KB Home KBH Kohls Corp KSS Kroger Co (Fry's Food Stores) KR Lee Enterprises (Arizona Daily Star) LEE Lennar Corporation LEN Lowe's Cos (Lowe's Home Improvement) LOW Loews Corp (Ventana Canyon Resort) L Macerich Co (Westcor, La Encantada) MAC Macy's Inc M Marriott Intl Inc MAR Meritage Homes Corp MTH Northern Trust Corp NTRS Northrop Grumman Corp NOC Penney, J.C. JCP Pulte Homes Inc (Pulte, Del Webb) PHM Raytheon Co (Raytheon Missile Systems) RTN Roche Holdings AG (Ventana Medical Systems) RHHBY Safeway Inc SWY Sanofi-Aventis SA SNY Sears Holdings (Sears, Kmart, Customer Care) SHLD SkyWest Inc SKYW Southwest Airlines Co LUV Southwest Gas Corp SWX Stantec Inc STN Target Corp TGT TeleTech Holdings Inc TTEC Texas Instruments Inc TXN Time Warner Inc (AOL) TWX Ual Corp (United Airlines) UAUA Union Pacific Corp UNP Apollo Group Inc (University of Phoenix) APOL US Airways Group Inc LCC US Bancorp (US Bank) USB Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT Walgreen Co WAG Wells Fargo & Co WFC Western Alliance Bancorp (Alliance Bank) WAL Zions Bancorp (National Bank of Arizona) ZION Data Source: Dow Jones Market Watch *Quotes in U.S. dollars, except Bombardier is Canadian dollars.

0.08 0.02 15.00 36.30

0.08 0.02 15.90 36.50

0.00 0.00 -0.90 -0.20

0.04 0.01 8.35 32.96

0.89 0.10 15.94 39.25

9.81 0.50 2.35 9.20 59.18 7.40 81.05 22.95 55.24 4.03 19.03 35.04 29.32 23.02 29.00 13.30 89.04 38.58 44.31 10.48 63.55 63.01 14.31 38.03 28.29 49.85 60.15 206.05 28.78 59.38 5.22 44.41 34.70 8.60 51.98 23.54 1.16 26.64 31.27 39.71 57.53 40.90 37.66 26.24 47.04 61.45 35.66 8.48 52.44 43.44 20.12 37.68 63.02 10.83 8.38 42.68 31.10 57.82 16.15 32.16 36.92 21.43 108.38 36.58 7.86 31.31 60.26 33.30 33.88 8.39 21.08

9.83 4.88 2.88 9.75 59.70 7.86 81.78 26.62 56.63 4.18 19.99 37.06 29.92 22.16 30.52 13.37 90.62 38.65 44.60 10.00 62.84 61.57 15.91 37.36 29.09 49.91 60.75 207.29 28.60 59.51 5.47 46.27 34.26 9.29 48.97 24.19 1.23 27.67 31.22 39.63 56.98 40.04 38.05 28.79 47.53 0.71 36.17 9.48 52.52 43.98 20.17 38.79 68.99 11.29 8.36 42.59 31.85 58.16 16.01 33.33 36.29 21.89 107.91 38.54 7.79 31.82 61.19 34.75 34.47 8.71 21.80

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8.45 0.20 2.65 4.92 51.83 7.02 65.35 21.79 43.77 3.30 12.30 21.40 19.19 14.61 22.80 8.49 70.22 31.16 31.30 6.41 38.99 43.64 8.03 28.85 16.92 28.13 41.22 157.13 27.68 39.87 2.69 27.85 25.73 5.02 42.14 21.14 0.49 12.14 18.07 32.90 38.64 22.50 25.49 13.68 33.20 49.20 23.44 3.29 38.35 34.02 15.93 30.98 28.89 10.47 7.15 32.12 20.96 45.28 14.10 24.34 27.62 15.51 77.73 37.08 3.96 20.10 48.31 30.34 22.58 4.44 13.18

18.47 6.96 5.58 13.88 66.64 13.01 86.91 32.85 59.59 7.29 29.88 46.90 30.41 41.09 51.43 14.55 92.10 43.49 45.88 11.60 64.50 70.15 16.45 58.75 30.49 50.42 62.28 210.69 35.79 62.33 5.99 47.80 38.40 13.12 57.39 25.85 3.47 28.28 31.57 44.46 58.09 41.26 38.83 29.32 52.57 70.61 43.18 9.69 53.00 45.65 25.43 40.75 87.66 16.92 12.44 43.64 32.79 58.95 22.39 35.98 39.24 26.84 117.40 58.29 10.35 32.23 62.63 45.34 34.59 9.20 24.92

22 APRIL 6, 2012

INSIDE TUCSON BUSINESS

INSIDE REAL ESTATE & CONSTRUCTION Pima County foreclosures: Notices double the rate of sales By Roger Yohem Inside Tucson Business

Notices of Trustee’s Sales Pima County Recorder Foreclosures

Home foreclosure filings in Pima County outpaced foreclosure sales during the first quarter by nearly a 2-1 ratio, keeping optimism in check for the new construction industry. Year-to-date, 2,527 trustee’s sale notices have been issued compared to 1,342 foreclosure sales. Although the pace of notices has slowed moderately, down 5.9 percent year over year, sales have plunged 34.6 percent during the same period. In the 2011 first quarter, there were 2,052 foreclosure sales and 2,685 notices issued. A trustee’s notice is the first step in the foreclosure process. It notifies owners that their property is in default and scheduled to be sold at public auction. Throughout the year, notices are projected to continue to decline. About the end of the third quarter, the timeline ends to reset the last wave of five-year adjustable rate mortgages that caused many of the problems in the housing market. The new data is from the Pima County Recorder’s Office (see table).

At Sycamore Park, five homes remain, priced from $197,990 to $228,990. The subdivision is located one mile south of Interstate 10 off Kolb Road.

Lennar, Long partner

SAHBA Home Show

Lennar Homes has partnered with Long Realty Company to sell out two subdivisions with a small remaining inventory of homes and lots. At Suncrest at Gladden Farms, Long Realty will represent Lennar to close out 15 lots and four homes in various stages of production. Suncrest is at North Tangerine Farms Road and West Moore Road, Marana.

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

TUCSON REAL ESTATE

3/26/2012

2/20/2012

$145,000 6,066 388 444 399

$127,500 5,977 363 477 224

Source: Long Realty Research Center

January February March April May June July August September October November

2007 346 276 305 300 396 377 419 503 394 483 540

December Total Monthly avg.

475 4,814 401

30 YEAR 15 YEAR 3/1 ARM

Current

2009 882 1,016 1,154 1,093 991 1,002 1,063 1,130 1,008 948 859

Last Week

4.95% 4.22%

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 Financial Inc. Tucson, AZ (520) 324-0000. MB #0115327. Rates are subject to change without notice based upon market conditions.

4/3/2012

One 12 Month 12 Month Year Ago High Low

4.00% 4.25%APR 4.13% 4.375%APR 4.95% 3.50% 3.625%APR 3.50% 3.875% APR 4.22% 3.00% 3.375%APR 3.00% 3.375% APR

2010 863 982 1,089 985 890 862 1,111 1,067 1,090 1,019 829

923 1,038 876 8,956 12,148 11,663 746 1,015 972

Southern Arizona’s largest and longestrunning Spring home show opens next weekend, featuring a convention hall full of home improvement and remodeling ideas. This year’s Southern Arizona Home Builders Association (SAHBA) Home & Patio Show is April 13-15 at the Tucson Convention Center (TCC), 260 S. Church Ave. The event’s sponsors and major exhibitors include Mattress Firm, Patio Pools & Spas, Kinetico Water Systems, Southwest Gas, and Home Depot Home Services. Free public parking will be available at all TCC lots, compliments of SAHBA. The SAHBA Central “Ask the Experts” exhibit will feature professional remodelers and members of SAHBA’s Green Build Council to offer free advice on home improvement and sustainable building ideas. Members of SAHBA’s Certified Custom Builder’s Council also will help people put together an action plan to make their dream

WEEKLY MORTGAGE RATES Program

2008 699 598 661 700 720 742 721 814 782 921 675

3.88% 3.16%

2011 975 762 948 721 748 693 666 917 797 816 754

636 9,433 786

2012 705 918 904

2,527 842

home a reality. Show hours are 10 a.m. to 7 p.m. April 13 and 14; and 10 a.m. to 6 p.m. April 15. Discount admission coupons and details are online at sahbahomeshow.com.

Sales and leases Since January, there has been a notable increase in commercial real estate leases (see The Space Race: Commercial building leases rocket upward on pages 3-5.) The change has brokers in agreement that the region’s commercial market has lifted off the bottom. This is a sampling of recent transactions: • Brian K. Scott and Linda M. Scott Trust purchased a 4,122 square foot industrial building at 2560-2602 E. Ganley Road for $245,000 from Alan Farmer G Trucking Inc. The transaction was handled by Ron Zimmerman, Grubb & Ellis. • Campbell & Prince Property LLC purchased a 2,980 square-foot medical office at 1637-1643 E. Prince Road for $190,000 from JEHT LLC, represented by Harlan Stork, Realty Executives. The buyer was represented by Andrew Sternberg, Oxford Realty Advisors. • TMC Holdings Inc. purchased a 1,759 square foot medical office building at 5225 E. Knight Drive for $180,000 from Dr. and Mrs. William Fosdick. The transaction was handled by Tom Knox and Rick Kleiner, Picor Commercial Real Estate Services. • Fiesta Avenue Property LLC purchased 3.38 acres of land at 6415 S. Fiesta Ave. for $159,000 from Crimson Associates, represented by Brandon Rodgers, Picor Commercial Real Estate Services. • Ron Cox, Cox Electric, purchased a 1,568-square-foot building at 3132 E. 46th St. for $120,000 from Kayco Properties, represented by Stephen Cohen, Picor Com-

mercial Real Estate Services. • United Health Care Services leased 81,835 square feet at 9040 S. Rita Road, Suite 1500, in the University of Arizona Science Technology Park from Campus Research Corporation. The transaction was handled by Peter Douglas and Brandon Rodgers, Picor Commercial Real Estate Services. • Trane U.S. leased 16,795 square feet at 2155 N. Forbes Blvd., Suite 104, from Forbes Tucson LLC, represented by Rob Glaser, Picor Commercial Real Estate Services. • TPS Builders LLC leased 12,664 square feet at 2699 E. Valencia Road from Palice Investments 2699 LLC, represented by Rob Glaser, Picor Commercial Real Estate Services. Paul Hooker, also with Picor, represented the tenant. • SizeWise Rentals LLC leased an 8,000 square foot building at 1956 E. Silverlake from Cherrylake Partners LLC. The transaction was handled by Russell Hall and Stephen Cohen, Picor Commercial Real Estate Services. • Tuesday Morning Inc. leased 7,164 square feet at 3981 E. Grant Road from TNP SRT Northgate Plaza Tucson LLC, represented by Debbie Heslop, Volk Company Commercial Real Estate. • Granite Construction leased 5,768 square feet at 721 N. Fourth Ave. from R&R Enterprises, represented by Tom Knox, Picor Commercial Real Estate Services. • Latrikunda Transport Services LLC leased 5,175 square feet at 3450 S. Broadmont Drive from Tin Cup Properties LLC. Ron Zimmerman, Grubb & Ellis, handled the transaction. • Eye Associates Ltd. leased 4,683 square feet at 6130 N. La Cholla Blvd. from HCP/ Utah LLC, represented by Rick Kleiner and Tom Knox, Picor Commercial Real Estate Services. • Chopstix Asian Diner leased 4,500 square feet at 3820 S. Palo Verde Road, Suite 101, from Palo Verde Trust Partners LLC, represented by Rob Glaser and Paul Hooker, Picor Commercial Real Estate Services. • National Bank of Arizona leased 4,364 square feet at 1985 E. River Road, Suite 121, from Campbell Avenue Group LLC, represented by Richard Kleiner, Picor Commercial Real Estate Services. Kawa & Associates, Phoenix, represented the tenant. • Presson Midpoint LLC, represented by Rob Glaser and Paul Hooker, Picor Commercial Real Estate Services, leased space at 3921 E. 29th St. to: RCCG Glory Tabernacle for 4,277 square feet in Suites 301-304; and Deluxe Marketing Inc. for 1,505 square feet in Suite 402. • Arizona Rent To Own leased 4,158 square feet at 815 E Grant Road from JAGOR, represented by David Carroll, Romano Real Estate Corporation. • Air Express International USA leased 4,000 square feet at 2949 E. Elvira Road from

InsideTucsonBusiness.com

APRIL 6, 2012

Holualoa Tucson Airport Inc., represented by Bill Divito, Grubb & Ellis. The tenant was represented by Stephen Cohen, Picor Commercial Real Estate Services. • Traditional Bakery Inc., doing business as Paradise Bakery & Cafe, leased 3,900 square feet at 4821 E. Grant Road from Crossroads Canada LLC, represented by Andy Seleznov, Larsen Baker. Alan Tanner and Paul Schloss, CBRE, represented the tenant. • APN Builders Inc. leased 3,850 square feet at 2102 N. Forbes Blvd., Suites 101-102, from East Park VI Holding Company LLC, represented by Rob Glaser, Picor Commercial Real Estate Services. • Oncology Institute of Hope & Innovation leased 3,750 square feet at 6565 E. Carondelet Drive from Tucson Medical Investors, represented by Rick Kleiner and Tom Knox, Picor Commercial Real Estate Services. • Surety Acceptance Corporation leased 3,672 square feet at 4400 E. Broadway from 4400 Tower LLC, represented by Michael Gross, Tucson Realty & Trust. Bruce Suppes, CBRE, represented the tenant. • Systech International LLC leased a 3,600 square foot building at 1121 W. Grant Road, Suites 407 and 408, from John Schmidt, represented by Stephen Cohen and Russell Hall, Picor Commercial Real Estate Services. • Foot Technologies LLC leased a 3,600 square-foot building at 1121 W. Grant Road, Suites 405 and 406, from Sloat Family Partnership. Stephen Cohen and Russell Hall, Picor Commercial Real Estate Services, handled the transaction. • GeoSystems Analysis leased 3,264 square feet at 2015 N. Forbes Blvd., Suite 106, from Broadbent Square LLC, represented by Rob Glaser, Picor Commercial Real Estate Services. • Choice Rent to Own LLC leased 3,200 square feet at 3923 N. Flowing Wells Road in Flowing Wells Plaza from the Orchards at Arizona II LLC, represented by David Dutson, CBRE. • Richard and Sally Burke leased a 3,120 square foot building at 4175 S. Fremont Ave. from Doubletree Investments. The transaction was handled by Stephen Cohen, Russell Hall and Paul Hooker, Picor Commercial Real Estate Services. • Ismile/CMS PLLC leased 2,826 square feet at 4600 S. Park Ave., Suite 6, from Ohio Street Building No. 2 Ltd. LLC. The landlord was represented by Rob Glaser with Picor. • Oak N’ More leased 2,700 square feet at 1637 W. Grant Road from Rodgers Hoge Partners. Brandon Rodgers and Paul Hooker with Picor handled the transaction. • Shaw Facilities Inc. leased 2,532 square feet at 333 E. Wetmore Road, Suite 180, from Aslan III 333 E. Wetmore LLC, represented by Richard Kleiner of Picor. The tenant was represented by Buzz Isaacson with CBRE. • Exhaust Works leased 2,400 square feet at 5294 N. Casa Grande Highway, Suite 110, from Tucson Sunset Industrial Plaza, represented by David Carroll of Romano

Photo by Roger Yohem

INSIDE REAL ESTATE & CONSTRUCTION

As values recover, premium parcels are in high demand.

Real Estate Corporation. • Martha McSally Political Office leased 2,400 square feet at 8060 E. 22nd St., Suites 136-140 in the Parkview Place Shopping Center from 8060 E. 22nd Street LLC. The landlord was represented by Greg Furrier and Jeff Zellet, Picor Commercial Real Estate Services. • Centennial Contractors Enterprises Inc. leased 2,400 square feet at 1801 S. Alvernon Way, Suites 101 and 102, from Presson Midpoint LLC, represented by Rob Glaser and Paul Hooker, Picor Commercial Real Estate Services. • DNA Personal Training leased 2,332 square feet at 3305 N. Swan Road from Camp Lowell I LLC, represented by Dave Dutson of CBRE. The tenant was represented by Jean Barclay of Oxford Realty Advisors. • Christian Youth Theater leased 2,300 square feet at 210 W. 5th Street, Suite 4 from Rodgers Investment Fund One, represented by Brandon Rodgers of Picor. • Swat Fitness leased 2,233 square feet at 3820 S. Palo Verde from Palo Verde Trust Partners LLC, represented by Rob Glaser of Picor. The tenant was represented by Jean Barclay of Oxford Realty Advisors. • Weight Loss Institute of Arizona leased 2,135 square feet at La Cholla Medical Center, 6261 N. La Cholla Blvd., from Healthcare Trust of America, represented by Howard Schwiebert with The Plaza Companies. • Seeing Machines Inc. leased 2,120 square feet at 2420 W. Ruthrauff Road, Suite 120, from Presson Scottsdale, represented by Rob Glaser with Picor.

• Domino’s Pizza leased 2,000 square feet at 5460 E. Speedway (Speedway-Craycroft Plaza) from Larsen Baker, self-represented by Andy Seleznov. The tenant was represented by Aaron LaPrise of The Harpel Company. • M3 Engineering & Technology leased 2,000 square feet in River Crossing at the northeast corner of west River Road and north La Cholla Blvd., from W.M. Grace Development, represented by Craig Finfrock of Commercial Retail Advisors. • Ideal Rehabilitation LLC leased 2,000 square feet at 1020 S. Harrison Road from BSH Investments LLC, represented by Buzz Isaacson and Alan Tanner of CBRE. The tenant was represented by David Hammack of Volk Company Commercial Real Estate. • Yellowbook Inc. leased 1,982 square feet at 3931 E. Paradise Falls from Chase Group LLC, represented by Andrew Sternberg and Virginia Land of Oxford Realty Advisors. The tenant was represented by Bob Rieden of Lee & Associates. • Open Care Dental Valencia leased 1,960 square feet at Mission Manor Shopping Center, 5530 S. 12th Ave., from GS Properties Management, represented by Robert Nolan of Oxford Realty Advisors. • HRC Medical Centers leased 1,932 square feet at 2055 W. Medical Hospital Drive, from Windrose Northwest Professional Plaza PR, represented by Bruce Suppes and David Volk of CBRE. The tenant was represented by Michael Coretz of Commercial Real Estate Group of Tucson.

• Green Valley Robin’s Nest leased 1,907 square feet at 18805 S. I-19 Frontage Road, Suite A-111 in Sahuarita from Sun Life Assurance Company, represented by Greg Furrier and Rob Tomlinson with Picor. • Salazar Law Firm leased 1,897 square feet at 1 E. Congress, Suite 110 from Holualoa Congress LLC, represented by Tom Nieman of Picor. • Saguaro Physicians LLC leased 1,868 square feet at 9356 E. Rita Road from TMC Holdings, represented by Rick Kleiner and Tom Knox, Picor Commercial Real Estate Services. • Rebecca Sanford State Farm Insurance leased 1,850 square feet at 5655 E. River Road from Larsen Baker, self-represented by Andy Seleznov. Aaron LaPrise, the Harpel Company, represented the tenant. • W.M. Michael Cochran MD leased 1,846 square feet at 140 W. Duval Mine Road, Green Valley, in Valley Verde Center, from CJR Investments, represented by David Carroll, Romano Real Estate. • Academy for Certification of Vision Rehabilitation and Education Professionals leased 1,540 square feet at 4732 N. Oracle Road from Oracle Office Park Associates LLC, represented by Ike Isaacson of CBRE. The tenant was represented by Gary Best of Keller Williams. • Goodwill leased 1,500 square feet at 11931 N. 1st Ave. in Oro Valley from CTWFVP LLC, represented by Craig Finfrock of Commercial Retail Advisors. Barry Kitay of Whirlygig Properties represented the tenant. • Heather Lindquist leased 1,485 square feet at 43 S. 6th Ave. from Rich Rodgers Central Inc., represented by Brandon Rodgers of Picor. • Gaetana’s Salon & Spa leased 1,200 square feet at 8060 E. 22nd St., Suite 112, from 8060 E. 22nd Street LLC & D Ragel Enterprises LLC. The landlord was represented by Greg Furrier and Jeff Zellet, Picor Commercial Real Estate Services. • Performance Sports Therapy leased 1,219 square feet at 310 N. Wilmot Road from Healthcare Trust of America, represented by Howard Schwiebert, the Plaza Companies. • Steve Smith Family Enterprises leased 1,182 square feet at 3860 S. Palo Verde Road, Suite 312, from Palo Verde Trust Partners LLC, represented by Rob Glaser and Paul Hooker, Picor Commercial Real Estate Services. Jeff Zellet, also with Picor, represented the tenant. • Bing’s Boba Tea LLC leased 1,050 square feet at 2040 W. Orange Grove Road, Suite 104, from La Cholla Plaza LLC, represented by David Carroll of Romano Real Estate Corporation. • Skipco LLC leased 1,000 square feet at 3810 E. 44th St. from RR44 Inc., represented by Brandon Rodgers, Picor Commercial Real Estate Services.

Email news items for this column to ryohem@azbiz.com. Inside Real Estate & Construction appears weekly.

24 APRIL 6, 2012

INSIDE TUCSON BUSINESS

EDITORIAL BIZ BUZZ

On opinion columns and Up & Comers When I first got this job as editor of Inside Tucson Business, my inclination was to get rid of the opinion pages. I figured covering the facts of business news would be sufficient. Besides, who cares about opinions on anything? Publisher Tom Lee suggested I rethink that position and we’ve continued to carry opinion columns. Judging from readership surveys and online views, they are some of our most-read items. DAVID HATFIELD Lately, we’ve had a couple of times when there has been a back-and-forth volley between opinions from us or our columnists and political leaders. These are good give-and-take arguments that I think are positive contributions to public discourse. The first time it happened it was over some opinions about Pima County government written by regular contributors Chris DeSimone and Joe Higgins. They resulted in separate rebuttals from county supervisors Ramón Valadez and Sharon Bronson. Now it has happened again over Tucson City Councilman Steve Kozachik’s idea to ask voters to possibly reallocate some money from the 20-year regional transportation plan approved by voters in May 2006 so that it can be used for pothole repairs. Two weeks ago, the idea was outlined in an Inside Tucson Business news story reporter Patrick McNamara wrote as well as in Kozachik’s opinion column. Last week, Inside Tucson Business weighed in with an editorial saying that for all the good Kozachik has brought to the council, this one was a bad idea. If you know Steve Kozachik, you know he is not one to shy away from a fight so the editorial prompted him to write a rebuttal which we’re carrying this week on page 25 in the printed issue. In it he takes a shot at us saying he thought the editorial was tongue-in-cheek. Kozachik believes every issue should be “reconsider-able” by elected bodies. Basically, our argument is that we draw the line on matters that were approved by voters versus those that were approved by the political body themselves. Just as with any other bond issue, the $2.1 billion approved by voters for the regional transportation plan should be spent the way it was promised to voters. It would be opening up a can of worms to start changing the regional transportation plan at this point. Further, what projects would be fair game for consideration? And we didn’t even ask about why municipalities in other parts of Arizona are managing to keep their roads in good condition compared to the pot-hole ridden streets we have — why hasn’t Tucson been maintaining its streets like other cities? But I’ll let Councilman Kozachik have the last word in his opinion piece.

Up & Comers Here’s something to look forward to next week: Inside Tucson Business presents the 2012 class of Up & Comers. A special section will be included in the April 13 print edition in which we profile nine of this region’s young leaders who are making a difference. When it arrives you might want to hold on to it. If ever you start to feel down about the future, these individuals will change that.

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

EDITORIAL

For business sake, vote Dave Sitton Two years ago, Inside Tucson Business endorsed the election of Jesse Kelly to the U.S. House of Representatives from Arizona’s Congressional District 8. It was a mistake. We allowed Democrats to set the agenda for the campaign by railroading out the best Republican candidate, Jonathan Paton. That disheartened us so much we couldn’t bring ourselves to endorse Gabrielle Giffords, even though she was the better candidate. But is something similar about to happen again? We aren’t suggesting the Democrats have an organized effort to effect the outcome of the Republican primary to benefit their chosen heir apparent in the special election but, judging from polls Kelly is the front-runner in this year’s race among four candidates. Readers of last week’s print issue of Inside Tucson Business’s might have noticed the results of the online poll showing that most people expect Kelly will win the primary, followed by Frank Antenori, Martha McSally and Dave Sitton in that order. Yes, we know online polls are about as scientific as asking random 5 year-olds their opinions and the percentages in the poll were laughable but more than a couple of Republican insiders have told us their internal data is somewhat in keeping with the poll. Democrats couldn’t be happier with such an outcome. All they have to do to win in the general election is press the fact that their man, Ron Barber, ran the district office for Giffords and he’ll be a shoo-in over Kelly — and probably by an even bigger margin than Giffords beat him in 2010. Jeff Rodgers, chairman of the Pima County Democrats, acknowledged on KUAT-TV 6’s “Arizona Illustrated” this month that his party helped engineer that showdown two years ago by actively campaigning to defeat Paton in the Republican primary. Paton was the stronger of the two candidates in 2010 and could have beaten Giffords,

according to some political strategists. It used to be Republican candidates represented the values of business and commerce. If ever there was a time when those values need a chance to be heard, it’s now when the economy is struggling to recover and too many people are still out of work. While Kelly talks the party line, he eschews business leaders or getting involved with specific business issues. Going down the list of Republicans, Antenori is an anathema to the business community. In his time in the Legislature he has shown he is willing to throw business interests under the bus if he perceives there is something else to be gained politically. Perhaps, Antenori’s biggest distraction is his demeanor. He regularly has to defend how he says something rather than what he is saying. McSally brings with her candidacy an impressive résumé outside of politics. As an Air Force colonel she was the first woman to fly in combat. She has two master’s degrees and has been an instructor. She also gets how Congress works and could be a worthy representative for Southern Arizona. But it’s Dave Sitton’s candidate that could be the test of whether the business community — especially the small business community — can deliver. Sitton launched his campaign at small businessman Jonathan Landeen’s Cork restaurant and his campaign lists more than 200 small business leaders in the region by name who are backing him. Sitton has talked specifically of his 10-point plan for creating jobs. He also is firm on border security. With just days remaining before the April 17 primary election, time is running out on Republicans to decide which candidate will be able to wrest back the Congressional seat Democratic Party leaders believe is theirs. We believe that candidate is Dave Sitton.

InsideTucsonBusiness.com

APRIL 6, 2012

OPINION WAKE UP, TUCSON

To fix U.S. health care, inject free market principles As the U.S. Supreme Court contemplates the fate of President Obama’s signature piece of legislation, now called Obamacare by even its proponents, we’d like to reflect on how we got here as a country and how we could turn the page to truly set health care on the right path. If we’ve learned anything in our 200-year history of capitalism in this country it’s that the free market is the most efficient way to move goods and services. Those free-market principles are nowhere near what we have currently in the U.S. health care system. America leads the world in medical technology, devices and pharmaceuticals but we also spend double what most of the world does in cost per-capita on caring for the sick. A monopolistic and over-regulated mess — and you ain’t seen nothin’ yet. The solution to healthcare reform is complex but the free market can bring about much-needed reforms. The current U.S. healthcare market is essentially a heavily regulated monopoly dominated by a handful of insurance carriers. There is an artificial market cap set by the federal government in the form of Medicare from which all insurance carriers peg their reimbursements. During the 1980s and 90’s consumers became accustomed to $5 co-pays. Medicine lost its value.

JOE HIGGINS

CHRIS DeSIMONE

Business takes a wait-and-see approach With the uncertainty surrounding the Constitutionality and what’s actually in the 2,700-page healthcare bill, business is patiently waiting on the sidelines. Do you hire your 50th employee? Do you hire temps or outsource portions of your operations? Do you expand? If you’re a medical practice do you buy the new $1 million MRI machine or expand operations

at all? Small business surveys taken by the Arizona Small Business Association (ASBA) echo national small business surveys and point to uncertainty in healthcare as a key concern to operations. ASBA businesses responded that they are holding off on

growth and expansion, not giving raises and or cutting benefits and laying off employees are all attributed to health care costs and uncertainty. Many small business owners have realized they have been priced out of the healthcare market. To fix health care we must: • Create free market forces that post pricing and allow the patient to shop and truly understand what they are buying and how much they’re paying for it. Look what price transparency has done to car buying or TVs. People are smarter than we give them credit for, show prices, features and benefits and convenience and let the market take over. • Put doctors, patients and employers closer together and remove the insurance company from basic medical care. The insurance company as gatekeeper frustrates doctors, patients and leaves employers with little if any say in the system. Allowing employers to set up direct relationships with doctors and putting a little more of the price burden on patients will put the market to work. • Tort reform is critical to stopping the defensive medicine that is practiced just to avoid the possibility of someday a patient could come back and make the doctors life miserable in defending a medical malpractice claim. The malpractice insurance cost

for a doctor practicing internal medicine in Illinois cost $47,731 per year and in Minnesota cost $3,375. Tort laws encourage or discourage defensive medicine. • Doctors can and will give of their time to those that can’t afford to pay full price. Because of insurance and Medicare policies, contracts and price controls it’s difficult to establish sliding fees for service based on need. Why wouldn’t we encourage providers to help out by offering a tax credit or cover their medical malpractice fees as an incentive? No doubt about it health care in American is probably the best in the world and by far the most expensive. The only way the health care costs come under control is through free-market principles, which is completely opposite of Obamacare. If the Supreme Court or the next administration doesn’t strike down the law get ready for fewer doctors, less choice, more government oversight and regulation and much higher costs either paid by everyone or added to the national debt.

Contact Joe Higgins and Chris DeSimone at wakeuptucson@gmail.com. They host “Wake Up Tucson,” 6-8 a.m. weekdays on The Voice KVOI 1030-AM. Their blog is at www.TucsonChoices.com.

GUEST OPINION

Times have changed, RTA money is needed to fix roads My good friends on the editorial page of Inside Tucson Business (March 30 issue) took some issue with my proposal to have voters consider using Regional Transportation Authority (RTA) money for road repairs. Maybe. I’ve read through their points several times and am still trying to figure out if the editorial is satire, and in fact they’re in agreement. Let’s go through their points: First, the editorial says the regional transportation plan was an “extraordinary coming together of interests” and because it included so many diverse component parts, it cannot be touched. Good enough, but they also point out that it took four tries to get sufficient ornaments on the Christmas tree so that enough people found something they liked and jumped on board. My suggestion does not tear down the tree, or even remove any of the ornaments. It simply says, let’s see if we might want to change the color or size of some of what’s hanging on the tree — and save taxpayer money. Inside Tucson Business has raised concerns that are similar to mine about bloated Pima County bond packages in the past.

Next, the editorial says that because the city council voted unanimously to adopt the regional transportation plan, it should not be challenged. Really? Inside STEVE KOZACHIK Tucson Business now embraces a 7-0 Council vote as the standard by which we are to judge the sanctity of a plan or an ordinance. This was the point in reading the editorial at which I began to become suspicious that it wasn’t on the up and up. The third point was that even if we dispute some of the projects, none of us should be able to remove any of them (they cite “even the streetcar.”) But remember, nothing in my proposal suggests that we remove anything from the plan. I’m simply asking that we embrace a second look at the scope of what has been proposed and see if there might be more effective ways to spend taxpayer dollars while still honoring the spirit of the regional transportation plan.

They say the plan was about capacity, not repairs. Later they say that moving money into road maintenance from the RTA sales tax is “subterfuge.” It’s not subterfuge to suggest a simple reallocation of existing tax dollars to take care of an immediate problem. This should be the defining issue of this election cycle in our city, and in fact in the region. Fix what we have before building a larger infrastructure that will only increase that maintenance obligation. The editorial says we need to keep our promises, and that the RTA has done “a remarkable job” of staying on task and delivering projects as promised. In fact, the truth is the RTA considers turning a shovel of dirt as having “implemented” a project. The voters might have been surprised had they been told that “staying on task” was not completing the work identified in the plan, but merely starting multiple projects all around the region and struggling with another $152 million bond offering to keep the multiple balls juggling in the air. Inside Tucson Business is about business. Recognizing a bad business model should be in their wheelhouse. Overextending and over committing is a bad business model.

The derogatory statements about the city being “unaccustomed to keeping promises,” or my suggestion being based on “a politician’s whim” are beneath the level of discourse generally found in Inside Tucson Business. It’s not “whimsical” to suggest the following: The economy has fundamentally changed since 2006 when the regional transportation plan was adopted. The road conditions certainly have deteriorated. We need big suggestions to tackle a big problem. Continuing with incremental band-aid approaches is only going to result in the infrastructure of this region deteriorating to much more significant levels, and the costs for reconstruction becoming so large that following the Inside Tucson Business game plan will force an increase in taxes to address the issue. Businesses don’t need higher property taxes. Homeowners don’t need higher property taxes. My proposal does not result in either of those.

Contact Tucson City Councilman Steve Kozachik, who represents mid-town Ward 6, at ward6@tucsonaz.gov or (520) 791-4601.

26 APRIL 6, 2012

INSIDE TUCSON BUSINESS

OPINION GUEST OPINION

Get behind a real change to tackle cross-border crime The federal government is not doing its job in securing the border. Criminal aliens and drug cartels/gangs south of our border have turned Arizona into the gateway for drug shipping into the United States. Fifty percent of the pot that comes into the U.S. comes through Arizona and, more recently, heroin smuggling has increased as Mexican drug growers expand their cultivation of poppy fields to make Mexico the number 2 heroin producer in the world, second only to Afghanistan. If you don’t believe me, ask Tempe residents about the December 2011 raid which resulted in the arrest of 203 members of the Sinaloa drug cartel, which owns the Mexico-Arizona drug smuggling routes. Or how about the March 3 shooting in a club near Arizona State University in Tempe which left 16 people wounded? The shooting has been tied to rival gangs, traditionally the street distributors of the illegal drugs that come across our borders. Meanwhile, terrorists mingle with all these criminal elements and quietly slip across the border. Some have been captured and arrested, but many have not. New York Congressman Peter King, chairman of the House Homeland Security

Committee, testified on March 21 that hundreds of terrorists, mostly Hezbollah, have already entered the United States and are lurking in sleeper cells throughout the SYLVIA ALLEN nation. All of Arizona’s border counties except Cochise contain massive amounts of restricted federal land adjacent to the border, including: Coronado National Forest, Tohono O’odham Indian Reservation, Organ Pipe Cactus National Monument, several National Wildlife Refuges, and the Barry Goldwater Air Force Range. Law enforcement officers are not allowed to pursue suspects on these restricted federal lands, which gives the illegal border crossers safe passage for, in some cases, at least 100 miles, not to mention a huge advantage over law enforcement. That’s why some of the most intense intervention and apprehension activity is taking place along Interstate 8, west of Casa

Grande, instead of along the border. A Government Accountability Office Report (Number 11-38) describes the many roadblocks that get in the way of law enforcement agencies, including not only remote terrain but also federal policy that blocks law enforcement access to federal lands. Do the drug cartels and human smugglers ask permission to cross these restricted lands? No. They ignore the law, knowing that no one will stop them. State agencies do not have the ability to effectively counter this widespread illegal activity. Sheriffs are limited to law enforcement within their respective counties. The Department of Public Safety is not designed, focused, or trained to counter this type of activity. The federal government could call out the Arizona National Guard, but they won’t and, if the governor activated the guard, it would drain the state coffers. He who calls out the guard pays the bill. For more than six months, a state Senate working group composed of retired military, retired Border Patrol and other experts has been meeting to draft legislation (SB 1083) for an Arizona Special Missions Unit (ASMU) to supplement the

InsideTucsonBusiness.com

Shoul RTA funding be re-directed to fix Should potholes and do street maintenance? po

Yes 49% No 51% Next week’s poll: Do you think you’ll get a pay raise this year?

efforts of law enforcement and state agencies, including county and municipal leaders, in securing the border with Mexico. The ASMU will be a low-cost, welltrained, statewide mobile force with a major focus on cross-border criminal activity and a goal of protecting the lives and property of the citizens of this state. SB 1083 is so important for the safety and welfare of our citizens. We need the Arizona Special Missions Unit. I encourage everyone to contact their legislators and the governor to support this legislation. We cannot lose this one.

Contact state Sen. Sylvia Allen, R-Snowflake, at sallen@azleg.gov or (602) 926-5219.

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InsideTucsonBusiness.com

APRIL 6, 2012

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How to Hard Cook Eggs • Place eggs in saucepan in single layer. • Add cold water to cover eggs by 1 inch. • Heat over high heat just to boiling. • Remove from burner and cover. • Let eggs stand in hot water 9 minutes for medium eggs, 12 minutes for large eggs, or 15 minutes for extra large. • Drain water, then cool completely under cold running water or in bowl of ice water.

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Seeking City Clerk Willcox Arizona Salary Range $37,000/yr – $45,000/yr The City of Willcox is seeking an individual to fill the position of City Clerk. The City of Willcox is located in Southeastern Arizona on Interstate 10 approximately 80 miles southeast of Tucson. Willcox is a “stand alone” rural full service, general law city. Interested parties should visit the City Web Site at: www.cityofwillcox.org Closing deadline for applications is Tuesday, May 1, 2012 at 4:00 p.m.

EXECUTIVE DIRECTOR IMAGINE GREATER TUCSON

Imagine Greater Tucson seeks a dynamic Executive Director to lead the organization in the creation and implementation of a shared regional plan. The ideal candidate will be a recognized community leader who understands public policy making in the Tucson area and has a proven fundraising record. Visit www.ImagineGreaterTucson.org/Careers.

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28 APRIL 6, 2012

INSIDE TUCSON BUSINESS

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