AZRE Magazine November/December 2012
AZRE magazine is published bi-monthly with its in-depth coverage, projects news, economic development issues and other compelling CRE articles that our readers have come to expect.
NOVEMBER-DECEMBER 2012 DRAMATIC DESIGNS Collaboration produces stunning projects SPECIAL SECTION p. 41 SPECIAL SECTION p. 30 An investment in your career. BETTER UNDERSTAND YOUR INVESTMENT AND THE VALUE OF FEI MEMBERSHIP FOR YOU AND YOUR COMPANY. EMPOWERED. “Ongoing personal and professional growth at each stage of my career.” Katherine Anderson Chief Financial Oﬃcer Seattle Opera CONNECTED. “Member relationships with ﬁnancial thought leaders.” Mary Jo Green Senior Vice President & Treasurer Sony Corporation of America INFORMED. “Leading edge content and objective research at my ﬁngertips.” Taylor Hawes GM, Finance Systems & Operations Microsoft Corporation Member since 1994 Member since 1988 Member since 2002 Your membership includes the following high-quality beneﬁts and services. Public Policy Education and Advocacy Representation before U.S. Congress, SEC, FASB, PCAOB, IASB and more Inﬂuencing policy, accounting and ﬁnancial reporting issues from K Street to Wall Street. 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Face it, new media has us all atwitter President & CeO: MIChAEL ATkInSOn Publisher: ChERYL GREEn ViCe President Of OPeratiOns: AuDREY WEBB Editorial editOr in Chief: MIChAEL GOSSIE editOr: PETER MADRID assOCiate editOr: kRISTInE CAnnOn interns: ARSELIA GALES • DAnIEL ESCOBEDO • CAROLInA LOPEZ TRAVIS MCknIGhT • COOPER RuMMELL art seniOr GraPhiC desiGner: ChRISTIn GAnGI seniOr GraPhiC desiGner: MIkE MERTES COntributinG PhOtOGraPher: CORY BERGQuIST intern: GLORY ShIM diGital Media Web deVelOPer: ERIC ShEPPERD Web & GraPhiC desiGner: MELISSA GERkE MarketinG/eVents ManaGer: WhITnEY FLETChER interns: ABRIELLE SWIShER • BRITTAnY hARRIS OffiCe sPeCial PrOjeCts ManaGer: SARA FREGAPAnE exeCutiVe assistant: MAYRA RIVERA database sOlutiOns ManaGer: CInDY JOhnSOn arizOna business MaGazine seniOr aCCOunt ManaGers: DAVID hARkEn aCCOunt ManaGer: ShAnnOn SPIGELMAn • ARThuR ALCALA arizOna COMMerCial real estate aCCOunt ManaGers: STEVE kOSLOWSkI • MIChELLE MCBAY rankinG arizOna ViCe President / sales & MarketinG: LEnORE GROBSTEIn direCtOr Of sales: ShERI kInG exPerienCe arizOna/PlaY ball direCtOr Of sales and MarketinG: SCOTT FIRLE sCOttsdale liVinG aCCOunt ManaGers: SuSAn hARkEn • MARIAnnE AVILLA az biG Media exPOs SCOTTSDALE SuPER ExPO/nOVEMBER SCOTTSDALE SuPER ExPO/APRIL exhibit direCtOrs: kERRI BLuMSACk • TInA ROBInSOn • ShERI kInG hOMe & desiGn idea Center shOWrOOM ManaGer: JOAnnE STAnLEY aCCOunt ManaGer: MARIAnnE AVILA eVent COOrdinatOr: SARA FREGAPAnE AZRE: Arizona Commercial Real Estate is published bi-monthly by AZ BIG Media, 3101 N. Central Ave., Suite 1070, Phoenix, Arizona 85012, (602) 277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $3.95. Bulk rates available. ©2012 by AZ BIG Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without permission in writing from AZ BIG Media. T his is how far technology has come since my journalism career officially began in 1980: I was sent to cover the “Show Me Bowl,” the state high school football championships in Missouri, at the old Busch Stadium in St. Louis. I remember lugging this Texas Instrument “portable” computer the size of a small suitcase. It had a teeny-weeny screen, and transmission required a dedicated line and a rotary dial telephone. To send a story to the newsroom, you put the receiver in a set of couplers, and hoped for the best. During the baseball season, I sat in the press box at Chase Field and watched as a new generation of sportswriters posted news on Facebook pages; tweeted the latest trade rumor; and chatted with fellow sports scribes at stadiums across the country. AZRE magazine is all about social media now, too. We have a Facebook page, a Twitter account, we send out a weekly “eblast,” and of course — we have azremagazine.com, a site that lets us break stories affecting the local and national commercial real estate industry. If I’m at a Valley Partnership breakfast, for instance, and the speaker says something noteworthy, I tweet about it. If I’m at BOMA’s TOBY Awards or AIA Arizona’s Design Awards, I post winners on the Facebook page. Our goal is to inform — and entertain. Sometimes I post photos from the various events — tastefully done, of course. Editor (602) 424-8844 email@example.com 2 | November-December 2012 CON T E N T S November/December 2012 DRAMATIC DESIGNS 6 16 26 FEATURES 6 8 New to Market Projects in the pipeline 14 Project News VA campus gets new mental health building; Linthicum completes Boccieri Golf corporate HQ Economic Development The advantages of gaining foreign trade zone designation. Healthcare Trends Building the Valley’s cancer battleground; Banner’s Health Clinics just what the doctor ordered SPECIAL SECTIONS 16 30 10 Executive Q&A Four faces of industry leadership After Hours Ex-Vikings receiver now a star for Ryan Companies US 22 26 Valley Partnership Looking back at 25 years of community projects AAED The Arizona Association for Economic Development is the state’s premier organization for economic development and has served Arizona in many capacities since 1974. 12 AIA Arizona Collaboration the key in the design and construction of two academic gems 41 On The Cover: The Hub on Campus is a student housing project on Arizona State University’s main campus in Tempe. Beal | Derkenne Construction is the general contractor and HPA is the architect. Subcontractors include Arizona Partition, Peterson Associates Consulting Engineers Inc., AERO, Spectrum, SECON, JFN and CECO Concrete. BOMA The Building Owners & Managers Association Greater Phoenix was established in 1936 and provides a united body representing the commercial real estate community. 3101 N. Central Avenue Suite 1070 Phoenix, Arizona 85012 » » » » COMING NEXT ISSUE Top Companies to Watch in 2013 Institute of Real Estate Management The Weitz Company: 35 Years in Arizona International Council of Shopping Centers Access AZRE online with this QR code 4 | November-December 2012 NEW TO MARKET MULTI-FAMILY 1 1 ARGO AT TOWN LAKE Developer: Evergreen Development General Contractor: Adolfson & Peterson Architect: Todd & Associates Location: Lakeside and Rio Salado Pkwy., Tempe Size: 600,000 SF The $40M Argo at Town Lake is a mixed-use development that will cover 5.72 acres on the south side of Rio Salado Parkway. It will feature 328 apartment units and leasable commercial space. It will feature a rooftop swimming pool, cabanas, ﬁre pits and ﬁtness facility. Estimated completion is 2Q 2014. 2 RESIDENCES AT SKYSONG Developer: Plaza Companies in partnership with the ASu Foundation and uSAA Real Estate Company General Contractor: MT Builders Architect: Todd & Associates Property Manager: Lincoln Property Company Location: 1475 n. Scottsdale Rd., Scottsdale Size: 325 residential units The $44M project will mark the next step in the eventual buildout of the ASu Scottsdale Innovation Center. The apartments will be built around the existing parking structure. Estimated completion of the ﬁrst 83 units is 4Q 2013. All 325 units are scheduled to be built out by 2Q 2014. 2 OFFICE 3 3 AETNA INSURANCE OFFICE BUILDING Developer: Liberty Property Trust General Contractor: Wespac Construction Architect: Balmer Architectural Group Location: Liberty Cotton Center Business Park, 4405 E. Cotton Center Blvd., Phoenix Size: 140,000 SF Aetna Insurance will move into a 140,000 SF, 2-story LEED certiﬁed office building in 2Q 2013. With the completion of the building, the business park will offer more than 1.225 MSF of Class A office and ﬂex space. 4 ALLRED I-10 AND UNIVERSITY BUILDING Developer: Douglas Allred Company General Contractor: Willmeng Construction Architect: Balmer Architectural Group Location: 4025 S. 32nd St., Phoenix Size: 80,252 SF new construction and site development for a single-story shell office building is scheduled for completion in 1Q 2013. Subcontractors include hawkeye Electric, Star Rooﬁng, niemeyer Plumbing, Milam Glass, hardrock Concrete, Ace Asphalt and Pro-Steel. 6 | November-December 2012 4 INDUSTRIAL 5 5 PROLOGIS PARK RIVERSIDE Developer: Prologis, Inc. General Contractor: nitti-Graycor Architect: Ware Malcomb Broker: Colliers International Location: SWC 55th Ave. and Lower Buckeye Rd., Phoenix Size: 486,241 SF The $25M speculative development will sit on a 27.7-acre parcel. It will feature 185-foot, full concrete truck courts on both sides of the building and 32-foot clear height. The park is pursuing foreign trade zone status. Expected completion is Q 2013. 6 INTEL RESEARCH & DEVELOPMENT FACILITY Owner: Intel Design/Builder: M + W Group Location: 5000 W. Chandler Blvd., Chandler Size: 285,000 SF Intel’s new $300M facility on its Chandler campus will support packaging operations for the company. The project is expected to create 1,000 construction jobs. Expected completion is 3Q 2013. 6 RETAIL 7 7 BUTTERFLY WONDERLAND Developer: Butterﬂy Wonderland LLC General Contractor: The Renaissance Companies Architect: Brisette Architects Inc. (Design: Montgomery Design Group) Location: 9500 E. Via de Ventura, Scottsdale Size: 25,000 SF Phase I of the $170M, multi-phase entertainment complex will be a for-proﬁt attraction featuring the largest butterﬂy pavilion in north America in an indoor rainforest. Butterﬂy Wonderland is Phase I of Odysea in the Desert, a 522,000 SF, multi-million-dollar entertainment and retail development. Expected completion is 2Q 2013. HEALTHCARE 8 Banner Estrella Medical Center — Tower 2 Expansion Developer: Banner health General Contractor: McCarthy Building Companies Architect: SmithGroupJJR Broker: Lee & Associates Location: 9201 W. Thomas Rd., Phoenix Size: 297,000 SF The new $151M, 175-bed patient tower is the second on the Banner Estrella campus. The project will include numerous infrastructure improvements that will allow for future expansion. Also being built are 5-story visitor and 3-story staff parking structures. Expected completion is 3Q 2015. 8 7 CONSTRUCTION: PROJECT NEWS Rendering of the new Mental Health Building on VA campus D.L. WITHERS COMPLETING WORK AT ELLIOT BUSINESS PARK The ﬁnal phase of two, 158,000 SF tilt-up concrete distribution buildings at Elliot Business Park is scheduled for completion in 1Q 2013. D.L. Withers is general contractor and Euthenics Architecture is the architect of the $75M (total cost) project south of the SEC of Elliot Rd. and hardy Dr. in Tempe. The buildings will feature premium R-30 insulated steel roof decks covered with Energy Star rated single-ply rooﬁng, 30-foot clear height, dock-high loading, ESFR ﬁre sprinklers, a 127-foot deep concrete truck court, insulated glass and insulated roll-up doors, 1,600 AMP (expandable to 3,600 AMP) 277/480 volt power service provided by Salt River Project. The ﬁnal project will total 1 MSF. CBRE is the broker. LINTHICUM COMPLETES CORPORATE HQ FOR BOCCIERI GOLF Linthicum completed construction of the 9,000 SF Boccieri Golf corporate headquarters, research and performance center, 15816 n. Greenway-hayden Loop in the Scottsdale Airpark. The commercial office tenant improvement included creating a custom environment for Boccieri Golf’s showroom with putting green, golf club assembly for its proprietary club ﬁtting program, storage facility and corporate office space. Boccieri Golf relocated from Connecticut. >> Linthicum has started construction of a new retail boutique store for James Elliot, a high-end jewelry designer moving from the Borgata of Scottsdale. That TI project is at 7293 n. Scottsdale Rd. VA CAMPUS GETTING NEW MENTAL HEALTH BUILDING Phoenix VA health Care System is developer, D-Square is the general contractor and SmithGroupJJR is architect for the $8.6M, 40,000 SF Mental health Building on VA campus, 7th St. and Indian School Rd. It will house in-patient substance abuse programs and other mental health functions for eligible veterans receiving care at PVAhCS. Subcontractors include S&h Steel, Martin Valley Grading, Sun-Tech Concrete, Innovative Electric, Velocity Communications and City-Wide Plumbing. Expected completion is late summer 2013 DANSON CONSTRUCTION BUILDS FILM SCHOOL AT SCC Danson Construction and SPS+ Architects completed the $2.3M, 7,520 SF Film School hub Building at Scottsdale Community College, 9000 E. Chaparral Rd. The hub building includes new classrooms, meeting space, editing labs, storage and a distribution center. 8 | November-December 2012 Film School Hub Building at Scottsdale Community College CONSTRUCTION MCCARTHY RENOVATES AUDITORIUM AT PVHS McCarthy Building Companies recently began construction on a $5M, 24,000 SF auditorium renovation at Paradise Valley high School. The inside of the auditorium has been completely gutted to modernize the space, complete with ADA access modiﬁcations, new seating, new theatrical lighting, sound upgrades and a more open entry. The auditorium is closed while the construction team installs new steel beams to support the added weight for additional catwalks and other safety structures. The remodel will be complete 1Q 2013. nTD Architecture is the architect for the project. Subcontractors include Pueblo Mechanical, urban Energy, Schuff Steel, McCarthy Plumbing and Pete king Construction. DPR UNDERTAKING WVMC EXPANSION AND RENOVATION DPR Construction is general contractor for Vanguard health Systems’ West Valley Medical Center expansion and renovation. The patient tower addition is a design-assist collaborative approach with owner Vanguard health Systems, DPR and architect Earl Swennson Associates, Inc. The 31,500 SF, 3-story patient tower will expand the existing tower vertically adding two new patient ﬂoors. The multiplephase expansion will provide 31 new med-surg patient rooms, two new isolation patient rooms, as well as the support systems. The project team is implementing BIM for clash detection. Vanguard is investigating and analyzing options to implement green lighting options in the patient rooms and common areas. CONSTRUCTION: P&Z CITY OF CHANDLER The Chandler City Council amended the zoning code parking regulations for businesses and developments. The amendments included, among other things, an effort to provide more ﬂexibility in the determination of the number of required spaces for various developments. chandleraz.gov CITY OF MESA A resolution adopting the Citizen Involvement Plan (CIP) for the Mesa 2040 General Plan update was voted on and approved as part of the consent agenda. The CIP establishes a program City staff will use to educate and inform the public on what the General Plan is, why it is important, and what their role is in the update process. The CIP will include the formation of a citizen Plan Advisory Committee, providing opportunities for stakeholders and local agencies to provide input, and building on the Mesa initiative to solicit citizen involvement. CITY OF COOLIDGE The Coolidge City Council, in an effort toward updating the General Plan for 2013, considered rewrites to portions of it. After reviewing the General Plan, Alton Bruce, growth management director, determined that several portions of it are lacking in detail and are in need of updates to make allowances for a changing/ growing city. Some of those sections in need of work include the Land use portion, the Transportation portion, the housing portion, and the Energy and Water portions. TOWN OF QUEEN CREEK The Queen Creek Town Council approved a text amendment that provides for changes to its Sign Ordinances. These changes are the result of recommendations by the home Builders Association of Central Arizona (hBACA) to the Town as a way to provide builders with additional signage options. These changes relate speciﬁcally to the sizes, height and number of various types of general and directional signs and ﬂ ags within a model home complex. Additional information is available at queencreek.org/ index.aspx?recordid=7725&page=30. TOWN OF FLORENCE In an effort to meet the growing demand for building permits on Fridays, the Town of Florence Community Development Department returned to a ﬁve-day work week. The new schedule is Monday to Friday, 8 a.m. to 5 p.m. STATE OF ARIZONA All counties and municipalities within Arizona require all new subdivisions to prove to the Arizona Department of Water Resources that they have a 100-year water supply. A report (draft) from the Arizona Water Resources Development Commission (AWRDC) suggests making this requirement easier for local governments. Presently, the ﬁve-year-old state law (SB 1575) requires counties to get unanimous Board of Supervisor approval to enact the requirement, but the AWRDC is recommending that only a simple majority vote be required. The report also recommends allowing local governments to create regional water authorities that would augment local water supplies and any required infrastructure by pooling their money for water development. The report would suggest that all new subdivisions could beneﬁt from such pooled funds once they can prove they have 100-year water supplies. The AWRDC ﬁnal report and press release can be found at azwater.gov/AzDWRwatermanagement/ wrdg_hb2661/default.htm. e P&Z column is compiled by Dave Coble and George Cannataro with Coe & Van Loo Consultants, cvlc.com. 9 TOWN OF GILBERT Since november 2005, the Town of Gilbert has required the approval of a Subdivision Amenities Package (SAP) prior to issuing building permits. If you are a builder and are expecting to start building once you receive ﬁnal plat approval, this process could delay you by six weeks or more. It is recommended that the SAP plan set be prepared and submitted simultaneous to the improvement plans. The SAP is a stand-alone plan set, under a separate cover, intended to show everything that will need a building permit related to a parcel except for housing. The majority of the items are landscape/open space-related, such as site monuments, landscape amenities and site lighting. The plan set also needs to show utilities and structural engineering improvements. It can be submitted following Design Review, and after the ﬁrst review of the improvement plans is complete. For a copy of the checklist, please contact the Building Plan Review Manager at (480) 503-6719. EXECUTIVE Q&A BY PETER MADRID Patrick Hayes PRESIDENT / CEO PHARCHITECTURE Years in commercial real estate: 29 Years at company: 13 Q: WHAT WAS IT ABOUT THE INDUSTRY THAT ATTRACTED YOU? A: A couple years ago my mother gave me a gift box — inside were all of the cards that I made her since I was in kindergarten … they all had pictures of buildings drawn on them. I am certain I was destined to do this from the very start. I love the idea of graphically solving the ‘wants and needs’ problems and the ability to create the 3D space of those solutions and having an impact on the daily environment(s). Q: HOW HAS THE INDUSTRY CHANGED SINCE YOU STARTED? A: When I ﬁrst started almost everything was ‘hand drafted’ and computer drafting was just beginning to become a mainstream concept — as a tool. We have evolved into utilizing 3D computer animation and now BIM. Q: WHAT PROFESSIONAL ACHIEVEMENT ARE YOU MOST PROUD OF? A: We have been very fortunate to have our work acknowledged with many accolades and design awards. I am, of course, very proud of those achievements. however, I think I take the most pride in developing a legacy reputation of the value of our collective work — this is much more than the end product of a building — it is the thought process, innovation, design skills, business ethics, evolution, and the employees who breathe this. Anna E. Riley REGIONAL DIRECTOR OF MANAGEMENT RYAN COMPANIES US, INC. Years in commercial real estate: 30+ Years at company: 7 Q: WHAT WAS IT ABOUT THE INDUSTRY THAT ATTRACTED YOU? A: The dynamic opportunities centered around the physical real estate and its place within the community. Q: HOW HAS THE INDUSTRY CHANGED SINCE YOU STARTED? A: The management business has evolved from a world of mere caretaking to a critical and strategic role in creating real value. Q: WHAT PROFESSIONAL ACHIEVEMENT ARE YOU MOST PROUD OF? A: My successes in mentoring my 30 plus staff and creating a supportive and creative work environment for them to thrive within. Darin A. Sender PRESIDENT/OWNER LAW OFFICES OF SENDER ASSOCIATES, CHTD. Years in Commercial Real Estate: 18+ Years at Company: 12 Q: WHAT WAS IT ABOUT THE INDUSTRY THAT ATTRACTED YOU? A: My dad is a developer near Chicago, so I grew up around commercial and residential development. I learned at a very early age how a building was constructed, and subsequently obtained an architecture degree from ASu. Then, the summer before I started law school at DePaul, I handled a small zoning case for his company. After dealing with a few unhappy neighbors, working with the city, and taking the zoning case through the city council, I knew this was what I wanted to do as a lawyer. Q: HOW HAS THE INDUSTRY CHANGED SINCE YOU STARTED? A: Zoning ordinances have become much more sophisticated and responsive to each community’s unique attributes. The creation and advancement of entitlement tools such as PAD’s, PuD’s, and zoning incentives results in projects that relate better to their context. I have seen a signiﬁcant enhancement in required public participation for developments. There are also many more women working in the ﬁeld. Similar to the gains women have made in the development and construction ﬁelds, I am happy to see this percentage increase. Q: WHAT PROFESSIONAL ACHIEVEMENT ARE YOU MOST PROUD OF? A: My achievement teaching students in my entitlements courses at ASu. For the past 10 years, I have taught the real-world aspects of zoning entitlements to more than 600 future planners, architects, and developers through courses in the Planning School and the W.P. Carey Master of Real Estate Development program (MRED). I am so proud when I see them working in the development industry. I know that I contributed in a small way to their futures. Some of my past students have achieved careers such as city managers, planning directors, economic development directors, municipal planners, architects, and successful developers, among many others. Doug Leventhal PRINCIPAL AND COO EVERGREEN DEVCO, INC. Years in commercial real estate: 16 Years at company: 13 Q: WHAT WAS IT ABOUT THE INDUSTRY THAT ATTRACTED YOU? A: Originally I studied to become an architect. At ASu, I took a course called Architect as a Developer. That sealed it for me. I didn’t want to just design or produce the drawings for a project, I wanted to put the deal together, learn everything there was to know about what goes in to getting a project off the ground and then manage the entire project. The bonus was realizing we have the ability to add signiﬁcant value to a community by turning a blighted or vacant property into a local amenity. Q: HOW HAS THE INDUSTRY CHANGED SINCE YOU STARTED? A: We now work harder than ever, with fewer resources. Municipalities have shifted to adopting stricter codes and often the design or site layout our client wants has to be adapted to comply with the local requirements. Q: WHAT PROFESSIONAL ACHIEVEMENT ARE YOU MOST PROUD OF? A: Reaching the point in my life where I can work to make a signiﬁcant impact in the development community through the time I spend volunteering. I’m thrilled to serve on the board of directors for Valley Partnership and am looking forward to serving as next year’s vice chair. 10 | November-December 2012 AFTER HOURS Knowing more about the people we work with is the fun side of the business. It helps start conversations and strengthens business relationships. To nominate a colleague, request an After Hours form from Peter Madrid, firstname.lastname@example.org. PHOTOGRAPHY GLORY SHIM STEVE JORDAN Director of Construction Services, Ryan Companies US, Inc. With Ryan Companies for 16 years Born in Phoenix, received a BS in Civil Engineering from Brown University in Providence, R.I. Wife Anita; sons Geoﬀ rey, 25, and Cameron, 23; daughter Steﬀanie, 20 What did you think you’d be when you were growing up?: Chemical engineer/research scientist. What accomplishment are you especially proud of?: Being actively involved with my kids’ activities and either coaching or attending most of their events. Responsibilities: Jordan is a hybrid construction professional. He is involved with the pre-construction and construction phases of speciﬁc projects. He is also responsible for third-party business development and managing client relationships. What would people be surprised to know about you?: Yes, I was one of those marching band members in high school. Advice: Favorites: Sports/teams: Minnesota Vikings — Jordan played tight end in Minnesota for 13 seasons (1982-94), catching 498 passes for 6,307 yards and 28 touchdowns — and any teams his kids are involved with (Cal football, Boise St. track, and the New Orleans Saints. His son Cameron, a star at Chandler High and Cal-Berkeley, is a rookie defensive end for the Saints). Activities: Golf, ﬁtness-related activities, watching sporting events. Destinations: My favorite places include Sedona; McCall, Idaho; and Ghana, Africa. I’d like to see the Pyramids and the Sphinx in Egypt. Received: Treat others as you would like to be treated. I’ve found it to be key in business (and personal) relationships. To Share: Get connected and involved in industry groups. It’s a great way to learn about your profession, network, and hopefully use your talents to progress and improve the industry. Visit AZREmagazine.com to see what Tara does After Hours. Tara Lewis, an Associate with Cushman & Wakeﬁeld of Arizona, is a diehard fan of the Washington Redskins, completed The Escape From Alcatraz Triathlon, and is an incurable DIY-er. 12 | November-December 2012 ➙ on AZREmagazine.com FOREIGN TRADE ZONE BY HARRY PAXTON PROVIDING A GOLDEN OPPORTUNITY T City of Goodyear has designated FTZ status to 3 industrial parks of more than 600 acres ho ensure that the City of Goodyear was best positioned to attract future opportunities, it partnered with land owners, WESTMARC and IMS Worldwide, Inc. to lead the effort in creating the Greater Maricopa Foreign Trade Zone (GMFTZ) to serve West Valley communities. In late 2010, the foreign trade zone was federally approved, and over the next 18 months it became one of the most active in the country. Goodyear has been fortunate to have played a large part of that success. Foreign trade zones were ﬁrst created with the Foreign Trade Zone Act of 1934. The program currently provides special customs procedures to domestic and foreign companies with operations in the u.S. that are engaged in international trade-related activities. Any foreign or domestic material can be moved into a foreign trade zone without being subject to u.S. Custom’s duties. Material that is processed in foreign trade zones and then re-exported is duty free. Items brought out of the trade zone for sale in the u.S. market are provided a duty deferral until it is shipped out of the foreign trade zone. In essence, the foreign trade zone program improves cash flow, reduces paperwork, provides a higher level of security and speeds up the supply chain time. An additional beneﬁt of foreign trade zones for qualiﬁed companies operating in Arizona are property tax reductions. Currently, companies that are activated in an approved foreign trade zone reduce their real and personal property taxes by 75 percent. Foreign trade zones provide an attractive business climate and encourage foreign and domestic companies to expand and/ or retain operations in our community that may otherwise be relocated overseas. The overall result is that more jobs are created in our community. Goodyear has designated three industrial parks comprising more than 600 acres as foreign trade zones. to more than 400 employees when fully operational. Dick’s Sporting Goods’ Western Distribution Center is currently under construction and will eventually employ more than 300 people. Another manufacturing company is also planning to begin operations in the Palm Valley 303 foreign trade zone soon. AIRPORT GATEWAY FTZ The Airport Gateway foreign trade zone is a 230-acre site located just south of I-10 and stretches from Van Buren St. to Yuma Rd. It is located in close proximity to the Phoenix Goodyear Airport and will have approximately 3 MSF of industrial space at buildout. Companies requiring a foreign trade zone are currently considering this location for major operations. GOODYEAR CROSSINGS FTZ Goodyear Crossings is a 250-acre business park that is home to fulﬁ llment centers for Macy’s and Amazon. Also, Suntech, the largest solar panel manufacturer in the world based in China, has its only u.S. manufacturing facility in this location and employs more than 100 workers at the Goodyear plant. Th is business park still has approximately 128 acres available in the foreign trade zone. USER DRIVEN FTZ SITES One of the beneﬁts of foreign trade zones are their ﬂexibilities. If a qualifying company decides to locate its operations outside of one these established zones, it can be accommodated through a user Driven Site foreign trade zone. Goodyear has already attracted Schoeller Arca Systems due to the ﬂexibility of the program. Based in the netherlands, Schoeller Arca Systems is a global leader in the plastic container industry and is conducting its operations in a portion of the former Rubbermaid building on Cotton Lane. Schoeller Arca Systems is investing more than $31M in equipment and tenant improvements and will employ more than 160 employees when fully operational. The City of Goodyear created a streamlined and efficient process in designing its foreign trade zone program with the assistance of IMS Worldwide. One of the premiere foreign trade zone ﬁ rms in the u.S., IMS Worldwide, provided free expert analysis to company representatives wishing to qualify their operations for Goodyear’s program. The City’s program provides the ﬂexibility of site location, expert evaluation, guidance and a very competitive business operation environment through the process. In the past 18 months, Goodyear’s foreign trade zones have helped attract more than 1,000 jobs and will continue to keep it competitive for the location of new company expansions in the future. Harry Paxton is Economic Development Manager for the City of Goodyear. PALM VALLEY 303 FTZ Located along the Loop 303 just north of Interstate 10 is the Palm Valley 303 master-planned industrial park that is just beginning to ﬂourish. The Palm Valley 303 foreign trade zone includes 235 acres that have already attracted two companies, creating more than 700 jobs and bringing in more than $130M in capital investment. Sub Zero, a luxury appliance manufacturer, already employs more than 300 people in the trade zone and will ramp up 14 | November-December 2012 k n a h T you Fidelity National Title Insurance Company Identity Sign Group Phoenix Community Development & Investment AZRE Roofing Southwest Wells Fargo Cassidy Turley BRE Commercial Jaburg & Wilk Sage Tax Group To Our Sponsors... Cushman and Wakefield Alliance Bank of Arizona Colliers International Ernst & Young Paradigm Tax Group Cole Real Estate Investments Commercial Service Solutions FirstBank of Arizona Wentworth, Webb & Postal Alliance Residential Pivot Building Services We appreciate all that you do for us! www.ArizonaCrew.org 15 HEALTHCARE: TRENDS BY PETER MADRID THE DOCTOR IS ALWAYS IN ‘Neighborhood’ Banner Health Centers meeting healthcare needs in one location Banner Health Center in Maricopa was the ﬁrst such facility to open. W ith the future of healthcare a concern among politicians, providers and more importantly the millions of Americans who need affordable medical attention, a viable solution is taking root in Arizona. In May, Banner healthcare opened its ﬁrst Banner health Center in the City of Maricopa. The center offers patients a new healthcare experience — one that meets many medical needs in one location. The $17.2M, 40,000 SF Maricopa facility, built by DPR Construction and designed by SmithGroupJJR, offers family medicine, internal medicine, ob-gyn, pediatrics, lab work, general imaging, and after expansion, general surgery and orthopedics. “We like to think of them as ‘medical homes,’ ” says Pam nenabar, COO of Banner Medical Group. “These health centers will be different sizes, according to what the demographic is. The idea is to provide comprehensive care — mostly primary care — to those that are in the neighborhood. And to get them there as soon as possible. “As healthcare reimbursements change,” nenabar says, “we want to keep the people as healthy as we can.” Banner’s building schedule for these centers is bold and aggressive, considering that Arizona is slowly climbing out of the recession. Besides Maricopa: >> 2012: Banner’s Verrado location opened in September at Verrado Way and I-10 in Buckeye. Also opening in 2012 is the Surprise location at Litchﬁeld Rd. and Statler St. The Goodyear location at Estrella Pkwy. and Cotton Ln. breaks ground but will open in 2013. Surprise and Goodyear are leased properties. All of the others were ground-up projects. (Banner also opened a clinic in Southwest Loveland, Colo.). >> 2013: Banner will open Southeast Valley locations in Gilbert (Warner and Gilbert roads), Queen Creek (Ellsworth Loop and Ocotillo roads), Chandler (Alma School and Willis roads), and East Mesa (Crimson and Baseline roads). kitchell will be general contractor and hMC Architects will handle design duties for the clinics, which will total $45.2M. “Banner has adapted to where the economy and the healthcare system are going in general,” says Chris nickle, project director for McCarthy Building Companies, GC of the $7.5M, 13,000 SF Phase I at Verrado. “The Verrado Pam Nenabar Chris Nickle Steve Whitworth facility will be very adaptable. As the community and population grow, it will easily have the ability to expand to get to a much larger clinic. The plan is the same in Maricopa.” nickle says he foresees this trend in healthcare construction for at least the next three years. “It’s following the way our healthcare system is going,” nickle says. “The days of multiple, big expansions are probably not going to be seen. Verrado is now 13,000 SF, and the plan is to have six doctor providers (and 18 exam rooms). The ﬁnal buildout will grow to about 36,000 SF (54 exam rooms).” As with any healthcare project — including those on an aggressive construction schedule — nickle says there were some challenges. One he mentioned was building a Banner facility on a much smaller scale. Recent McCarthy projects include a 297,000 SF expansion at Banner Estrella and a 470,000 SF patient tower at Banner Thunderbird. Time was also an issue. nickle estimates the construction time — start to ﬁnish — at Verrado was about six-anda-half months. “Th is turned out to be a great project,” nickle says. “hopefully we’ll get to do more. Banner did a great job with lessons learned (from the Maricopa facility). That knowledge really helped. They will get better as they move forward.” kitchell now takes the baton as GC for the next wave of Banner health Centers. According to healthcare Division Manager Steve Whitworth, kitchell’s nearly 60 years of design and construction in the Valley brings tremendous expertise in the healthcare market to the table. “We see this as a new wave of healthcare facility and appreciate the opportunity to lead the industry in delivery of an efficient, cost-effective solution to our clients,” Whitworth says. “The approach that we have taken requires full team buy-in, and we have had a great experience working with our design partners (hMC, AEI, Atwell). “Banner is on the cutting edge here. With healthcare reform continuing to be phased in, u.S. healthcare is quickly changing from a ‘sick care’ to a ‘well-care’ model. healthcare providers will actually share in the savings generated by keeping some patients out of their hospitals.” 16 | November-December 2012 Building Health Centers for tomorrow mccarthy.com HEALTHCARE: TRENDS BY PETER MADRID Rendering of Mayo Clinic’s expanded cancer facility. With 3 major treatment centers undergoing or anticipating major expansion, the Valley is at the national forefront in the ﬁght against the killer disease s the battle against cancer intensiﬁes across the united States, the Valley is taking the lead as a major ﬁghter. There are three cancer treatment facilities in operation, with a fourth on hold. And all three already are exploring expansion in order to keep up with patient demand and hopefully a cure for the killer disease. >> The Banner MD Anderson Cancer Center opened in 2011 at Banner Gateway Medical Center in Gilbert. The $103M, 130,000 SF project was built by DPR Construction and designed by Cannon Design. Plans for a second phase of construction include a 7-story patient tower, a 6-story parking garage and two additional ﬂoors in the existing hospital. Total SF would reach 770,000. >> Cancer Treatment Centers of America (CTCA) at Western Regional Medical Center in Goodyear opened in 2008 with a 213,000 SF facility. It has spent $8.6M the past year on expansion, 18 | November-December 2012 A and is currently adding another 22,000 SF that will include 21 exam rooms. Okland Construction, the original general contractor, is doing the expansion. >> Mayo Clinic is consolidating and integrating its Cancer Center at the Phoenix campus with the construction of a $130M, 217,200 SF facility. Three additional ﬂoors will be built above the ﬁrst level of Mayo’s Proton Beam Therapy Building currently under construction. hunt Construction Group is the general contractor and AECOM is the architect. (The $135M, 250,000 SF university of Arizona Cancer Center in Downtown Phoenix is currently on hold. hensel Phelps is the general contractor and ZGF is the architect). Why has the Valley become a magnet for cancer treatment facilities? The answers are as varied as the projects themselves. Banner Medical Group COO Pam nenabar says the idea started at the top — with the board of directors. “Those community-minded people saw that the largest city in the state had no coordinated cancer care — and the people here deserve that,” nenabar says. “But they also realized that Banner didn’t have the internal wherewithal, so they decided to partner with a well-known cancer center. That’s how MD Anderson and Banner came together.” Alan Swain, director of operations at CTCA, says such projects magnify the fact that the “Phoenix area is booming from the cancer side.” “When we opened four years ago, we had 143 employees,” Swain says. “We are almost at 450 now. We expect to grow 15 percent to 20 percent per year to coincide with the expected patient volume.” Is there enough demand to support the growth of these cancer facilities? Absolutely, says Ruben Mesa, M.D., deputy director, Mayo Clinic Cancer Center. “We are privileged to take care of cancer patients not only from Maricopa County, but also from around Arizona, nationally and around the world who are seeking state-of-the-art cancer treatment,” Mesa says. “Metro Phoenix is experiencing substantial growth and is fast becoming a destination for cancer treatment.” In addition to being an attractive 19 HEALTHCARE: TRENDS area with weather hospitable to patients battling cancer, Mesa adds, the Valley is becoming well known for its collaborative research. Mayo Clinic is engaged in collaborative studies with local entities, including Arizona State university and Translational Genomics Research Institute (TGen) to apply the latest scientiﬁc discoveries to the improvement of clinical treatment for cancer patients. nenabar agrees that data here and across the nation shows there is enough demand. Also helping in the growth process are the Valley communities involved, she says. Banner Gateway has been a key to Gilbert’s strategy of developing a bio/ health/medical corridor and hub. Banner has been there every step of the way, sharing its vision and helping execute the plan. “Banner’s role and the community’s role in helping to bring Gilbert this biomedical hub is a great example of partners working together,” nenabar says. “They (the community) were tremendous in helping with the permitting process and that there was access to land, to just making everything go smoothly.” At CTCA, Swain says there is a great sense of excitement and anticipation for all the expansion, including work at the Infusion Center, physical plant and a slew of new technology. Work includes expansion of the pharmacy, a quality of life clinic, and a Pall Filtration water system. Cancer Treatment Centers of America Future construction calls for expansion in patient-related spaces, including the dining area and outpatient/guest accommodations. Swain adds an organic farm will be breaking ground soon as well. At Mayo, the buzz is all about the Proton Beam Therapy Building. Proton beam therapy is a precise form of cancer treatment that allows greater control over radiation doses, using pencilbeam scanning. Project design and programming for the new building is expected to take three years, with staged occupancy expected in 2015. “Th is is the largest construction project for Mayo Clinic in Arizona since completing the Specialty Building on the Phoenix campus,” says Cheryl Lisiewski, Mayo Clinic project manager. “It will encompass roughly 160,000 square feet spread over three levels (utility, concourse and partial ﬁrst ﬂoor). “Technically, this is a very complex construction project. The proton therapy equipment has very precise requirements regarding structural support, dimensions and other infrastructure needs that affect the functionality of the equipment.” Most of the concrete walls surrounding the proton therapy treatment area are between 6- and 12-feet thick. Every aspect of these walls, ﬂoors and ceilings have to be determined and placed correctly the ﬁrst time. There is no opportunity to ﬁ x a mistake when working with an 8- or 10-foot-thick concrete wall. “The communication and professionalism of the contractor and subcontractors to ensure these requirements are being met has been extraordinary and very commendable,” Lisiewski says. Mayo’s addition atop the proton beam facility (yet to be named), will house hematology/oncology, bone marrow transplant, chemotherapy infusion and research. It will also create space for six operating rooms, three of which will be completed as part of the initial construction. The proton beam facility, the ﬁrst of its kind in the Southwest, is expected to open in the 2Q 2016. Ground was broken in 4Q 2011 for the $182M facility located east of the Mayo Clinic Specialty Building in Phoenix. More than 500 construction jobs are expected to be created. Banner MD Anderson Cancer Center 20 | November-December 2012 21 VALLEY PARTNERSHIP BY CAROLINA LOPEZ Valley Partnership celebrates a quarter century of community projects W ith the ﬁnal tree planted and the last stroke of a paint brush, Valley Partnership celebrated 25 years of community projects on nov. 3 when more than 200 volunteers worked side by side with members at the Southwest Autism Awareness and Research Center’s two facilites — 300 n. 18th St. and 2225 n. 16th St. — in Phoenix. It marked a quarter of a century of Valley Partnership’s community outreach as the center’s garden was expanded and additions made to the main facilities. “We are honored to be the group selected for such a milestone year,” said SAARC President Jeri kendle. “Th is is a huge project for us and for Valley Partnership, too. They’ve worked with so many different organizations and we’re just so happy to have been chosen.” For 25 years Valley Partnership has selected nonproﬁt organizations that assist those in need with renovations and facility enhancements. The selection process is careful and thoughtful. Although the records of each year’s community project are not detailed, AZRE magazine researched the board minutes from each year and various board members were able to provide information on the capstone community project event. A look at the past 25 years: 2012: Southwest Autism Research & Resource Center Location: The Colonel Harland Sanders Center for Autism Studies, Phoenix Date: Nov. 3 Work completed: Expansion of the center’s garden and additions to the main facilities. VP Chairman: Rick Hearn, Vestar 2011: Maggie’s Place Location: Magdalene House, Phoenix Date: Nov. 5 Work completed: More than 150 volunteers attended and assisted in refurbishing the backyard of the facility, which helps expectant mothers in need or those on the streets. The backyard was transformed into a more welcoming and kid-friendly environment used for event hosting as well. VP Chairman: Mindy Korth, CBRE 2010: Phoenix Day (daycare facility) Location: South Phoenix Date: Nov. 6 Work completed: The courtyard and playground were renovated as the exterior of the facility received most of the work. During this project, a tree was planted in honor of former Valley Partnership chairman Gregg Alpert, who died suddenly of a heart attack. VP Chairman: Mark Winkleman, ML Manager 2009: Tempe Salvation Army Corps Location: Tempe Date: Nov. 7 Work completed: Renovation of the building included adding fencing all around the side, landscaping, a community garden, installing children’s play equipment, painting the building, installing a volleyball court, installing a basketball half court and a prayer garden. About 200 volunteers participated. VP Chairman: Sean Walters, Sunbelt Holdings 22 | November-December 2012 2008: Foundation for Blind Children Date: Nov. 8 Work completed: The project included the addition of a merry-go-round, a swing set, landscaping additions of trees and shrubbery, a sensory garden, a “Tot Lot” with a shaded structure, a splash pad, a passive turf area for a smaller soccer ﬁeld and an area for kickball. VP Chairman: Steve Betts, Suncor 2007: The Salvation Army Chandler Corps Date: Nov. 3 Location: Chandler Work completed: The bathroom was remodeled, various interior and exterior painting projects were completed in addition to new fencing, concrete curbing, and lighting. VP Chairman: Keith Ernest, RED Development 2006: Herbert Kieckhefer Branch Boys & Girls Clubs Location: Phoenix Date: Nov. 4 Work completed: A covered playground area for children was added, lighting to the parking lot and landscaped bases were added as well. Signage and exterior painting were also part of the project. VP Chairman: Charley Freericks, DMB 2005: The Boys & Girls Club of Phoenix, Homes Branch Location: Phoenix Date: Nov. 5 Work completed: The Homes Branch received site and building improvements including: painting of building surface, construction of a regulation Little League baseball ﬁeld complete with backstop, bases, and dugout benches, the construction of a high school regulation basketball court, the installation of court/area lights, construction of patio/picnic area, box trees, shrubs, automatic irrigation system, parking area, repaired asphalt shingled gabled roof. VP Chairman: Jay Tubbs, Ryan/Monte Vista Consulting More than 150 volunteers (above) worked to transform Maggie’s House in 2011. Personalized paving bricks (right) helped raise funds. People to Know AZRE Magazine is proud to invite you and your guests to attend a cocktail reception honoring the 2013 People to Know in Commercial Real Estate. Don’t miss the opportunity to network with the top leaders in Commercial Real Estate. Get in the Know with 2004: Project beneﬁciary: Las Fuentes Health Clinic of Guadalupe Date: Nov. 6 Work completed: The interior was painted, basketball court nets added, and all new plumbing was installed. The electrical wiring was ﬁxed and a fence added. Sod was placed in certain areas outside and a jungle gym was also added to the facility. VP Chairman: Pete Bolton, CBRE/Grubb & Ellis 2003: Starshine Academy Location: Phoenix Date: Nov. 8 Work completed: An outdoor classroom was designed and constructed. Picnic tables and benches were donated. A shade cover for the outside patio area was donated and installed and the exterior was cleaned up. Library shelves were added and the interior building wiring was checked. VP Chairman: Pat McGinley, Vestar 2002: Improving Chandler Area Neighborhoods, ICAN Location: Chandler Date: Nov. 2 Work completed: ICAN aids youths ages 5-19. The interior and exterior lighting were replaced. Water fountains were added along with a ramada, cabinets and shelves. The exterior was painted and carpet installed in the computer rooms. VP Chairman: Heidi Kimball, Sunbelt Holdings 2001: The Salvation Army Location: Maryvale Date: Nov. 3 Work completed: Renovations to the center were made and included exterior and interior painting, removal of shrubbery, addition of trees and plants, and checking the electrical wiring. VP Chairman: Ken Roth, Roth Development 2000: Booker T. Washington Child Development Center Location: Phoenix Date: Oct. 14 Work completed: The center’s playground was rebuilt and classrooms were renovated. More than 200 volunteers took part in this project to paint, plant, and polish the center. VP Chairman: Gregg Alpert, Evergreen Cocktails & Appetizers will be served! coming January 2013 For advertising information & sponsorship opportunities: MarK your calendar! Deadline for space reservation: December 7, 2012 Presenting Sponsor: 602.277.6045 Top People to Know are honored in the following categories: Attorneys • Accountants • City Planners Property Managers • Economic Developers • Brokers Financiers • Developers/Investors • Architects/Engineers General & Sub-Contractors • Up-and-Comers 23 ULI VALLEY PARTNERSHIP 1999: Drug Elimination Family Awareness Project Location: Glendale Date: Oct. 16 Work completed: The facility was improved with the help of 125 volunteers. A total of 112 companies donated money for the project. Volunteers landscaped and assisted with the ﬂower garden. Some of the additions included a dance ﬂoor and amphitheater. VP Chairman: Jim Pederson, Pederson Group 1998: Phoenix Youth at Risk Location: Phoenix Date: Oct. 17 Work completed: More than 100 volunteers gathered at the facility to install ﬂower gardens, trees, grass, and a lighted basketball court. Landscaping material and an irrigation system were donated. The plans were designed by Carnoyer Hedrick Inc. VP Chairman: Clesson Hill, Grayhawk Works completed: Renovations were made to the building including painting. Work that required contractors, such as building walls, was done as well. Between 40 to 50 volunteers assisted. VP Chairman: Meyer Turken, Turken Industrial Properties 1993: Tempe Boys & Girls Clubs project Location: Tempe Date: Nov. 6 Works completed: Improvements were made to the exterior of the building. Landscaping, irrigation, lighting, general painting, and signage were also completed. VP Chairman: John Ogden, Suncor Development 1992: Thomas Pappas School for Homeless Youth, Pappas Kids Schoolhouse Foundation Location: Phoenix Date: N/A Works completed: Valley Partnership assisted with an already existing foundation for the school with money donations. VP Chairman: John Ogden, Suncor Development 1991: Central Park Neighborhood Association Location: Phoenix Date: May 11 (homes began being painted) Work completed: Homes in the neighborhood were painted as part of a “paint-a-thon.” Ultimately the project committee had a goal of painting and rehabilitating 30 homes by the end of 1991. VP Chairman: Charlie Byxbee, Byxbee Development Partner Salvation Army Chandler Corps, 2007 1997: Glendale Family Development Center Location: Glendale Date: Oct. 18 Work completed: This project included painting, landscaping, building a masonry fence and purchasing appliances for the center. About 130 volunteers assisted in the renovation endeavors. VP Chairman: Clesson Hill, Grayhawk 1996: Central Arizona Shelter Services, Horace Steele House Location: Phoenix Date: Dec. 7 Work completed: An old Phoenix motel was transformed into 60 units of efﬁciency apartments for working people that had been formerly homeless. VP Chairman: Tim Terrill, Cella Bar/Walton 1995: Tumbleweed Youth Crisis Center Location: Phoenix Date: Oct. 14 Work completed: Renovations were made and about 100 companies and 60 volunteers donated their time and supported this project. VP Chairman: Lee Hanley, Vestar 1994: Rosenzweig Boys & Girls Clubs of Phoenix Location: Phoenix Date: Oct. 15 24 | November-December 2012 Foundation for Blind Children 1989-1990: Project beneﬁciary: U.S. Desert Botanic Garden Location: Washington, D.C. Work completed: Plant material was donated to the U.S. Desert Botanic Garden as it received its ﬁrst saguaro cactus. It was donated by Troon North. VP Chairmen: 1989 John Graham, Sunbelt Holdings, 1990 David Scholl, Vintage Partners 1987-1988: Casa Teresa Women’s Shelter Location: Phoenix Date: Construction began May 23, 1988 Work completed: Renovations to the building, formerly an old abandoned nursing home, were made to create a place for transitional housing for Phoenix women. VP Chairman: Scott Haarer, Sr., Westwind Aviation ULI AMERICAN INSTITUTE OF ARCHITECTS ARIZONA BY PETER MADRID COMING TOGETHER In the Name of Education Collaboration is key as 2 state-of-the-art academic facilities open and grace the Valley skyline Steve Schultz Peter Berg Ryan Abbott Jack Black construction process. “CO Architects and Ayers Saint Gross made a commitment to be full participants throughout the construction process,” Black says. One example is participation in a 5-month subcontractor BIM coordination process where CO Architects and Ayers Saint Gross met with the subs on a weekly basis to help finalize their coordination and fabrication drawings. “Th is saved crucial time in schedule and saved countless contingency dollars,” Black says. “Those funds were used to enhance the project throughout the construction process.” There were some challenges along the way, Black adds. The original permit submittal was scheduled to be phased into a core package followed by an interior package two months later. After some consideration, however, the design and construction team decided that a comprehensive core and interior package would help ensure schedule, expedite buyout, and ease the construction process. Further, Black says, the scope of interior build-out was changed midway through the documentation process, requiring the revision of more than 40,000 SF of program. The design team delivered the full package on time and on schedule. What is Black most proud of about the project? “The full coordination of the interior program, systems, finishes, and furniture really was a true orchestration and was quite an accomplishment,” he says “It is hard to believe that it was possible to manifest the ideas and inspirations of so many people into a singular solution. Beyond making wonderful places for people … we pride ourselves on making the design and building process a wonderful experience for all who we work with. “We are truly proud of the fact that we now have a new group of friends who collectively will not only remember this special project but will also smile with pride while remembering the fun we had while doing it.” Added Paul Zajfen, Design Principal for CO Architects: “To bring this building in on time and on budget was a very difficult exercise involving the cooperation of several parties: two clients, two architecture firms, two construction firms, and several subcontractors. “We had weekly meetings to review the design model with itemized costs so we could make decisions as a team. There was Health Sciences Education Building C ollaboration: The dictionary defines it as “... working jointly with others or together especially in an intellectual endeavor.” Arizona is the beneficiary of two extraordinary collaborative efforts in the Valley: The $114M, 297,000 SF Interdisciplinary Science & Technology Building 4 (ISTB4) on Arizona State’s main campus in Tempe; The $129M, 268,000 SF Health Sciences Education Building (HSEB) on the Downtown Phoenix Biomedical Campus. Both buildings opened to rave revues – for their breathtaking design and most important, for exemplifying education as a priority with all the major players uniting for a successful end result. Both were also built during the height of the Great Recession. The design team behind the HSEB was Ayers Saint Gross and CO Architects and the general contractors were DPR Construction and Sundt Construction. The design team behind the ISTB was HDR Architecture and Steve Ehrlich Architects. The GC was Sundt. The developer in both cases was the Arizona Board of Regents. HEALTH SCIENCES EDUCATION BUILDING According to Jack Black, Principal at Ayers Saint Gross, the key to a complete collaboration is full participation and communication throughout a project’s duration. Often, he says, communication between the design team and the construction team wavers throughout the 26 | November-December 2012 real-time costing of design, so when the contractor specified the cost, the owner knew the building could be built within the established financial parameters. This allowed us to produce a fairly radical design with the confidence that it would be built on budget.” In his firm’s joint venture with DPR, Ryan Abbott, Sundt’s Science and Technology leader, says “Never underestimate the power of purpose and direction. There is nothing, nothing that a group of highly motivated individuals with a common goal cannot accomplish.” Challenges from the construction side? “Doing something that has never been done before,” Abbott says. “There are many aspects of this project that are unique and different, the ‘canyon-esque’ skin being one of them.” During the preconstruction phase, the original building was proposed with a large atrium. Upon evaluation of the lower initial cost and reduced cooling costs associated with a covered courtyard, taking into account the expense of more exterior wall, a courtyard scheme was utilized. This created some amazing opportunities for lighting. The canyon’s tensile fabric roof became a diffuser, sending evenly balanced natural light in every adjacent interior space. Aspect of the project Sundt is most proud of? “As an organization, we are founded in the belief that we can change the world through the built environment,” Abbot says. “We feel that HSEB is going be a catalyst in creating a place (city) that is becoming, rather than one that has been. Being a part of that transformation is exciting.” Added DPR’s Peter Berg, Design-Builder Director for the HSEB: “The successful implementation of HSEB’s ambitious iconic architectural vision hinged upon absolute commitment and unyielding support from every project team member. The finished product is an inspiration to all who experience it and has exceeded everyone’s expectations; it is a defining example of cooperation, collaboration and integration for education, as well as healthcare and research and development. We are extremely proud to have constructed the landmark HSEB for the downtown Phoenix Biomedical Campus, and to be part of an institution that will serve Arizona for many generations to come.” INTERDISCIPLINARY SCIENCE & TECHNOLOGY BUILDING 4 ISTB4 was exemplary of Integrated Project Delivery involving the owner, Sundt Construction and HDR Architecture, along with design architect Ehrlich Architects, says Steve Schultz, Associate Project Manager and Senior Architect for HDR. “Though contracted separately by ASU, Sundt and its key subcontractors were on board early and involved throughout the design process,” Schultz says. “A project collaboration workspace located at HDR’s office was used to house representatives from our architecture and engineering team, Ehrlich Architects, and Sundt through the duration of design.” User group meetings were held either at HDR’s project collaboration space or on campus at existing ASU facilities. From stage 1 programming through construction documents (a total of 2 years), all three partners met, discussed, designed, and developed the concepts and scope of the project — as an integrated collaborative process. What were some of the challenges of the project? “The greatest challenge was the downturn in the economy, which coincided with issuing the construction documents package,” Schultz says. ASU decided to postpone the start of construction for about 4 months in 2009, while determining the cost viability of the project. When ASU decided that it was ready to move forward, it sought a 20% reduction in the construction cost. According to Schultz, this triggered a large “cost reduction re-scoping” and design evolution of the project, which the project team was able to implement with no discernible loss of aesthetic or functional quality. Additionally, ASU directed a holistic change of the brick veneer color after completion of the design which required some reconsideration and redesign of the facade aesthetic concepts. What is Schultz most proud of? “The ISTB4 is impressive in many of its attributes and features,” he says. “The exterior concept is majestic and is Interdisciplinary Science & Technology Building 4 representative of the purpose of the facility as a high-rise, multi-disciplinary research laboratory facility. It is bold and complex, yet inviting.” From Sundt’s perspective, having worked in a similar IPD fashion on the Walter Cronkite School of Journalism, its team decided to live together during the project’s design and construction phases, according to Sundt’s Abbott. For nine months Sundt’s preconstruction and operations team moved into HDR’s Phoenix office. Ehrlich Architects (the project’s design architect) would fly in from Los Angeles and work in the same space for 2-3 days a week. Abbott says the collaboration space: Increased trust, “we became friends,” which led to lower cost (better ideas more alternatives); Increased coordination among disciplines, changes were analyzed across multiple specializations and trades rather than myopically (we made better decisions); Communication became more efficient; small break-out meetings replaced a dozen emails flying back and forth. What was Sundt most proud of? “This project breaks every conventional rule,” Abbott says. “We like to say it is a ‘sewing machine,’ meaning exact, efficient, highly functional and purposefully beautiful. It is ASU’s single-largest research building. ISTB4 was delivered faster, for less cost and with the highest quality.” 27 AIA ARIZONA 2012 The American Institute of Architects Arizona Design Awards recognize excellence in design, planning and construction of projects located anywhere in the world that are designed by AIA Arizona architects registered and licensed in Arizona. Design Awards Awards are given the categories of honor, merit and citation (in order of importance). Certificates were presented to awardwinning AIA Arizona members at the 2012 Celebrate Architecture Awards Presentation held Nov. 3 at the Heard Museum. The Design Awards honor the highest standards of design in response to user requirements, site, context, climate and environment. Each entry, regardless of size or classification, is judged individually on the basis of total design merit. MERIT HONOR CITATION South Mountain Community Library Owner: Maricopa County College District Architect: richard+bauer Contractor: Jokake MERIT HONOR CITATION MERIT HONOR CITATION Dialogue House Owner: Thomas and Laura Hyland Architect: Wendell Burnette Architects Contractor: The Construction Zone, Ltd. Cavalliere Park Owner: City of Scottsdale Architect: Weddle Gilmore Black Rock Studio Contractor: Markham Contracting Company 28 | November-December 2012 MERIT HONOR CITATION MERIT HONOR CITATION MERIT HONOR CITATION MERIT HONOR CITATION Okland Construction HQ Owner: Okland Construction Architect: Weddle Gilmore Black Rock Studio Contractor: Okland Construction MERIT MERIT HONOR HONOR CITATION Miramar College Heavy Duty Advanced Transportation Building Architect: Marlene Imirzian and Associates, Architects Contractor: Soltek Paciﬁc Construction Arizona Western College Owner: Arizona Western College Architect: Gould Evans Contractor: Pilkington Construction CITATION MERIT HONOR Integrated Education Building at GateWay Community College Owner: Maricopa County College District Architect: SmithGroupJJR Contractor: CORE Construction Parker Hannifan Corporation European Headquarters Owner: Park Hannifan Corporation Architect: Westlake Reed Leskosky Contractor: HRS Real Estate SA-Enterprise totale, Switzerland CITATION MERIT HONOR CITATION Q Building Renovation at Paradise Valley Community College Owner: Maricopa County College District Architect: SmithGroupJJR Contractor: Jokake Chandler City Hall Owner: City of Chandler Architect: SmithGroupJJR Contractor: Sundt Construction Sales ofﬁce designed to be community arts center Owner: Line and Space Architect: Line and Space in Joint Venture with Sundt Construction, Inc. Health Sciences Education Building on the Phoenix Biomedcial Campus BUILDING GREAT HEALTHCARE FOR ARIZONA 602.808.0500 | www.dpr.com DPR Construction-AZRE AIA section-2012 11 - 12 Thursday, October 25, 2012 11:57:25 AM 29 ARIZONA ASSOCIATION FOR ECONOMIC DEVELOPMENT BY PETER MADRID ACTION he Arizona Association for Economic Development (AAED) is the premier organization for economic development in Arizona and has served the state in many capacities since 1974. Its strength stems from the diverse membership, its public foundation and the strength of its board of directors and committees. Its commitment to its membership continues to be providing advocacy for economic development related issues, educational opportunities leading to certiﬁcation for economic development or maintaining certiﬁcation and learning and networking opportunities. Its goals for 2013 will be to create new opportunities with new partners that affect economic development. Four its members — former AAED President Chris Camacho with the Greater Phoenix Economic Council; current AAED President Teri Drew with Northern Arizona Council of Governments; Julie Engel with the Greater Yuma Economic Development Corporation; and Joe Snell with Tucson Regional Economic Opportunities — share their victories, setbacks, and visions with AZRE magazine. WHEN IT COMES TO MAJOR DEVELOPMENT PROJECTS, WHAT IS ON THE HORIZON AND WHAT IS YOUR ORGANIZATION DOING TO HELP THE PROCESS? AAED IN Leaders from 4 of the state’s economic development entities share their victories, setbacks and visions T Teri Drew Chris Camacho Julie Engel Joe Snell CC: GPEC’s prospect list for FY13 is strong, with about 200 projects considering the region for a new corporate locate or expansion. We continue to see major interest in one of the region’s core strengths — back office facilities — including regional corporate headquarters, financial services operations, IT centers and large-scale customer service facilities. We’ve also seen sustained activity in large fulfi llment and logistics centers, particularly in the West Valley. At the same time, there is still a shortage of properties with facilities of 300,000 SF or more. As such, many companies are turning to build-to-suit properties in this sector. Fortunately, several developers are planning to engage in new industrial spec 30 | November-December 2012 development starting in 4Q 2012. GPEC’s Community Building Consortium, an active group of professionals within the commercial real estate sector, has identified available Mega Sites (500-2,000 acres) and is now marketing them to national site-selection consultants. As the economy improves and financial markets stabilize, Greater Phoenix will continue seeing increased corporate campus activity. On a national level, high-tech manufacturing is gaining momentum. GPEC has seen growing interest from such prospects in California, Canada, Illinois and Ohio — all major high-tech manufacturing hubs. Consumer demand, along with an improved regulatory and tax environment in Arizona, are the driving forces behind this increased activity. TD: There are two major projects emerging in Apache County. The most recent is the development of a potash mining project by American West Potash/ Prospect Global Resources and another is the development and drilling for CO2 by Kinder-Morgan. The Verde Valley area is currently pursuing road improvement projects. The area is also looking to improvement of vacant properties and will promote LEED commercial development in the future. In the Prescott Valley area Superior Industries is completing its second plant expansion to 75,000 SF and adding 22 new jobs. Superior Industries specializes in portable conveying equipment. In the Chino Valley area, Hothouse Naturals has added a 10,000 SF greenhouse facility and will add 8-10 new jobs. Also in Prescott Valley, there are two major retail developments underway. The Prescott Valley Crossroads is a 310,000 SF facility under one roof which just added another 10,000 SF. Walmart will begin construction of a 150,000 SF supercenter, which is scheduled for opening in 1Q 2014. Major development projects in the Navajo County region have been the expansion of existing businesses and the re-utilization of existing vacant spaces. The Summit Healthcare facility is expanding along with Overseas Aircraft Services expansion site. In the Flagstaff area, Innovation Mesa Phase 2 project will expand with a 25,000 SF business accelerator facility, which will house Phase 1 graduates and Tier 2 companies looking for additional space. Th is project was funded through Economic Development Administration with support from NACOG’s Economic Development District. With assets like Embry-Riddle Aeronautical University (ERAU) and Ernest A. Love Field (PRC) it’s natural Accelerating success. Realize your vision We know it’s all about location, location, location. And setting your sights on the next move. At Colliers International, we have the real estate expertise and strength to lead you into new territory locally or around the world— taking you to new heights. www.colliers.com | Phoenix +1 602 222 5000 | Scottsdale +1 480 596 9000 AAED that Prescott is home to international manufacturers, particularly in the field of aerospace. Presently the city has a $9M runway development project underway at Ernest A. Love Field. JE: The Federal Aviation Administration will be selecting six centers of excellence where Unmanned Aerial Aircraft will be integrated into national airspace. The assets at Yuma Proving Ground and Yuma International Airport coupled with assets across the State make Arizona a top contender for this designation. GYEDC has been working collaboratively with Yuma Proving Ground, YIA and the Arizona Commerce Authority in preparation for the RFP submittal. JS: We are working with Pima County, regional jurisdictions and private sector leaders to advance the development of a competitive Aerospace & Defense Corridor that enhances the region’s competitive offering in this sector, and working to increase the inventory of shovel ready land and buildings available to meet market demands and growth opportunities. Our supply of ready buildings is very low right now, and demand is building. It’s crucial that we enhance the region’s competitiveness through analysis and engagement of the private, public and academic sectors. We continue to work with local corporations and local governments to develop tools and strategies that will make the region more attractive for businesses, ranging from enhanced incentive programs to assisting existing companies recruit critical talent. For example, TREO continues to assess the landscape of state and local incentives that target the reduction of capital and operating costs among the Tucson region’s top competitor cities for business development. We are encouraging local jurisdictions to invest their economic development funds into incentive programs that will improve our 32 | November-December 2012 chances for success. TREO leads the regional effort to advocate for critical economic drivers which provide high wage jobs including bioscience, solar/alternative energy and aerospace & defense. Th is includes engaging elected leaders at the local and state levels of government to further understanding of impact and opportunities in these industries. WHAT IS THE STATE OF THE COMMERCIAL CONSTRUCTION INDUSTRY IN YOUR REGION? Large spec fulﬁllment, distribution and logistics centers are planned for Metro Phoenix, speciﬁcally the West Valley. Arizona is fast becoming a hotspot for industrial buildings. CC: The region’s commercial construction industry has held steady and is showing signs of a comeback. In 2Q 2012, we absorbed nearly 2 MSF of vacant space (office, flex and industrial). In the most positive sign of all for the commercial construction sector, the amount of square footage under construction has also seen outstanding year-over-year growth — from 1.3 MSF just in 2Q 2011 to 4.75 MSF in 2Q 2012. TD: Most of the NACOG region is experiencing a slow recovery in construction projects. In the PinetopLakeside area, expansion of the Garden Chinese restaurant is taking place with an investment of $200,000. Another project on the horizon is a site plan approval for a new industrial building for Overseas Aircraft Support with an investment of $500,000. The commercial construction industry in the Flagstaff area is slowly, but surely improving. Although Flagstaff is seeing more permits, the construction industry is still down considerably. Prescott has seen some increases in commercial construction. Prescott Valley also has seen some increases in commercial construction including retail store expansions, medical center emergency room expansion and a new BreastCare center for the hospital. JE: Construction has had a significant bump this past year. There have been several federal projects totaling half a billion dollars at the Marine Corps Air Station and the new Federal Court House. Housing and commercial permits have increased this year along with valuations. JS: Commercial construction remains quite slow, but there are certainly areas of gradual improvement. Commercial retail redevelopment projects have picked up, along with a few new projects correlating to corporate relocations and expansions. Significant existing activity continues downtown, fed by publicly funded projects like the Sun Link Modern Streetcar, and Pima Count/City of Tucson Joint Courts Complex. A number of privately funded student housing and other residential projects are well underway along the streetcar route, spurring significant private investment in the city core. WHAT EFFECT DID THE RECESSION HAVE ON FUTURE ECONOMIC DEVELOPMENTS PLANS AMONG YOUR MEMBERS? CC: Arizona lost more than 300,000 jobs in the recession, a staggering figure that affected all our municipalities resulting in further emphasis on building a diverse and more sustainable economy. As we now know, an economy based solely on growth industries like real estate and construction is neither healthy nor sustainable, and will force more boomand-bust cycles in the future. While Arizona’s policymakers have been extremely active producing positive economic development programs over the past two years to reverse this trend, there AAED Yuma Roll Courthouse will house two magistrate courtrooms, judges chambers, jury facilities, U.S. Probation and Pretrial Services, District and Bankruptcy Court Services and the U.S. Marshals Service. It is expected to be completed in spring 2013. is still more work to be done. GPEC will continue to provide technical guidance to legislators interested in giving the state the most competitive business environment in the Mountain West region. TD: Naturally, construction almost ceased during the recession in most of the NACOG region. Several projects were placed on hold in the communities of St. Johns and Springerville. In Prescott Valley, there has been some job loss in the area over the past 5 years but there were 200 new jobs added over the same time frame. The recession took its toll primarily on residential projects, as well. The Prescott Valley area was hard hit by the recession with home construction coming to a halt and with no population growth all this combined to make it almost impossible to attract new businesses, especially in the retail arena. Due to the access to capital being limited, many Prescott businesses had to hold off on plans for expansion. Those projects are now beginning to grow again. The construction industry has all but stopped in the Flagstaff area. Many retailers pulled back on expansion plans when the recession hit, so recovery has been slow. JE: GYEDC used the excess time that what created from the recession to ramp up the business retention and expansion in this area. Strategies were revisited and studies were launched in order to build a marketing campaign aimed at a stronger logistics strategy for this region. JS: Our members adjusted their expansion plans during the economic downturn. Many now express cautious optimism and some expansion plans are underway, however, companies still appear more comfortable sitting on cash rather than aggressively expanding until more consistent signs of economic recovery appear. 34 | November-December 2012 IN TERMS OF ECONOMIC DEVELOPMENT, WHAT IS YOUR ORGANIZATION PURSUING IN THE NEXT 1 TO 3 YEARS? CC: GPEC will continue a multidimensional, collaborative, regional strategy that includes the following: a comprehensive science and technology initiative; aerospace and defense retention in the face of potential cuts due to sequestration; increased competitiveness; foreign direct investment (China, Canada, Western Europe); emerging technologies; and the Sun Corridor strategy for California — a joint marketing and business development effort with Tucson Regional Economic Opportunities, Pinal County, Greater Yuma Economic Development Corporation and the City of Flagstaff that seeks to optimize shared geographic proximity, favorable tax climate and affordable cost structure to increase corporate investment. TD: NACOG will continue to support business and labor development through various revenue sources. Particular goals include building foundations for economic growth. Th is includes a sector strategy process to examine strategies that support various sectors in northern Arizona in partnership with Digital Arizona Council. JE: Continued emphasis on renewable energies, logistics and aerospace. Yuma will be standing up the very first squadron for the entire Department of Defense, of the F-35 Joint Strike Fighter. This combined with the Unmanned Aircraft Center of Excellence creates a catalyst for the region. University and higher education research are leading the renewable energy opportunities and our new commercial port of entry on the border of Mexico make logistics a primary focus. JS: TREO will continue to focus diversifying our economy by developing our growing industry clusters and leveraging intellectual and human capital from the University of Arizona. Recent expansions and relocations have demonstrated the ongoing potential of Tucson’s strong Aerospace and Defense industry and solid Bioscience presence. We expect more significant activity in these areas, as well as our Solar/Alternative Energy cluster and our Transportation and Logistics operations. WHAT IS THE BIGGEST JEWEL IN YOUR ECONOMIC DEVELOPMENT CROWN? CC: One of the region’s biggest success stories is the development of the solar and renewable energy cluster and the international activity it has spurred. TD: The crown jewel for the NACOG District has to be the development of the Northern Arizona Center for Entrepreneurship and Technology (NACET) business incubator. JE: Our abundant natural resources and the workforce in Yuma County. JS: TREO has worked continually to speed a transformation of our regional economy from a growth and servicerelated economy to a diversified exportbased economy, with high quality jobs and a strong industry foundation built by leveraging and commercializing intellectual property. Additional NACOG information provided by Jodie Filardo, Community and Economic Development Director, Clarkdale; Gary Marks, Executive Director, Prescott Valley Economic Development Foundation; Greg Fister, Town Manager, Prescott Valley; Paul Esparza, Community Development Director, PinetopLakeside; Stacey Button, Economic Vitality Director, Flagstaﬀ; and Wendy Bridges, Economic Development Specialist, Prescott. 35 AAED Arizona’s Most Comprehensive Annual Real Estate Awards SHARING COMMON GOALS AAED, SRP and APS long time supporters of economic development SRP Although more than 70 years separate the formation of the Salt River Project and the Arizona Association for Economic Development, the two organizations share a common bond and symbiotic relationship toward advancing economic development in Arizona. In 1903, SRP was formed with the incorporation of the Salt River Valley Water Users’ Association. The AAED began in 1974 as the Arizona Association for Industrial Development. SRP has been a major economic driver in Arizona by providing high-value water and power for more than 100 years. The delivery of these resources, especially in an arid climate, forms a solid foundation for a diversified economy. These essential services, delivered reliably and efficiently, are catalysts for attracting new types of industries in Arizona. The AAED has tapped into that economic diversity by cultivating a diverse membership that includes both private and public entities. Its diverse membership is one of the primary strengths of AAED. The organization also is a source of strength for economic development in the state by providing educational opportunities for professional economic development practitioners. For decades, SRP has recognized the importance of welleducated economic development professionals by providing scholarships for certification and training through AAED. With SRP reliably serving water and power and AAED delivering well-informed economic development professionals, Arizona is better positioned to encourage businesses to expand and locate in Arizona for the long term. — James LaBar, Principle Policy Analyst at SRP; AAED member 2013 Nominations Accepted November 1 – December 31 to download the nomination form Visit AZREmagazine.com begining November 1st PROJECT AWARD CATEGORIES • INDUSTRIAL • HEALTHCARE • MIXED-USE • MOST CHALLENGING • MULTI-FAMILY • EDUCATION • OFFICE • HOSPITALITY • R E-DEVELOPMENT • RETAIL • PUBLIC • SUSTAINABILITY • TENANT IMPROVEMENT PLUS • ARCHITECT OF TH E YEAR • B ROKER/B ROKE R TEAM OF TH E YEAR • DEVELOPE R OF TH E YEAR • GENE RAL CONTRACTOR OF TH E YEAR Judging encompasses all aspects of the projects including the design, purpose, economic impact and overall usability. Award recognition will be give to the project team deﬁned as the developer, architect, general contractor and brokers. APS In the economic development arena, AAED is a necessity. AAED provides the forum for open discussion on state-wide economic development policy and allows for professional training for the practitioners. I believe it is because of networking facilitated through AAED, that our state is known as one that works together to bring economic vitality to Arizona. Even the AAED directory is a vital tool since it contains virtually every name that I need to conduct business recruitment and expansion in Arizona. — David J. Bentler, Manager, APS Statewide Community & Economic Development; AAED member RED Awards Sponsorship Opportunities Put your company in front of Arizona’s leaders in public and private development with print, electronic and event marketing. Sponsored in part by For more information call 602-277-6045 or www.AZREmagazine.com 36 | November-December 2012 CUSHMAN & WAKEFIELD IS PLEASED TO ANNOUNCE LARRY DOWNEY HAS BEEN APPOINTED VICE CHAIRMAN OF THE FIRM Mr. Downey is the first in the Phoenix office to receive this title and one of an elite few to be selected Vice Chairman worldwide. This honor recognizes tenured brokerage professionals who consistently demonstrate outstanding client service and achievement, leading the way in charitable endeavors. The Vice Chairmen exemplify the core values of the firm: integrity, respect, collaboration, trust, confidence, and mentorship. Cushman & Wakefield would like to extend its sincere gratitude to Mr. Downey’s clients for their lasting business relationship and contribution to this honor. LARRY DOWNEY CUSHMAN & WAKEFIELD OF ARIZONA, INC. Vice Chairman (602) 229 5833 email@example.com 2555 East Camelback Road, Suite 300 Phoenix, Arizona 85016 (602) 253 7900 www.cushmanwakefield.com 37 AAED MEMBER PROFILES Dierdre Booth President TankGirl Marketing Years with TankGirl: Founded in October 2011 Years in AAED: 7 PROFESSIONALLY, WHAT DOES IT MEAN TO YOU TO BE A MEMBER OF AAED? Being an active member of AAED means that I am directly contributing to the economic health of Arizona. By having a better understanding of the intricacies of economic development, as well as personal relationships with the people working hard every day to increase our economic vitality, I feel better armed to go out and do things that help our state. WHAT ARE YOUR TASKS AS CHAIR OF THE MEMBERSHIP COMMITTEE? I have had the opportunity to meet almost every new member. Our group is tasked with mentoring each new member, so often I am the first impression of their experience. We work hard to get new members engaged in the first few weeks so that they get the most out of their membership. WHAT ABOUT AAED DO YOU FIND THE MOST REWARDING? The networking. I have made lifelong friends at AAED as well as mutually beneficial business relationships. AAED provides numerous opportunities for networking across the state of Arizona. Tammy Carr Vice President, Business Development Howard S. Wright Years with Wright: 1 Years in AAED: 10 Mike Hammond President/CEO Cushman & Wakefield | PICOR Commercial Real Estate Services Tucson Eric Larson Years with AVB: 2 Years in AAED: 33 Director of Acquisitions AVB Development Garrett Newland Years with Macerich: 8 Years in AAED: 19 Vice President, Development Macerich Nicole Snyder Director of Marketing & Business Development Associate DWL Architects + Planners, Inc. Years with DWL: 5 Years in AAED: 4 PROFESSIONALLY, WHAT DOES IT MEAN TO YOU TO BE A MEMBER OF AAED? AAED has really helped me to become more aware of the issues that are impacting Arizona’s growth. Participating in the events and activities offers great networking opportunities, although where I have found most personal value is in the professional development it provides. WHAT ARE YOUR TASKS AS CHAIR OF THE PUBLIC RELATIONS/ COMMUNICATIONS COMMITTEE? AAED has made tremendous progress in responding to the needs of the economic development industry. My committee ensures we are communicating this information thoroughly and effectively. We work hard to make certain we are disseminating the AAED message to as many people and by as many methods possible. Whether it be through the Update newsletter, media, social media or the website, we are doing our best to utilize current tools and methods. It’s not without challenges, but I have learned so much from the experience. WHAT ABOUT AAED DO YOU FIND TO BE THE MOST REWARDING? AAED is such a remarkable resource for anyone associated with development in Arizona. The people are what make up an organization, and this group is filled with some amazing people. I enjoy working with and learning from these talented, committed and energetic people. Years with PICOR: 1 PROFESSIONALLY, WHAT DOES IT Years in AAED: 33 MEAN TO YOU TO BE A MEMBER OF AAED? PROFESSIONALLY, WHAT DOES IT AAED is the only statewide MEAN TO YOU TO BE A MEMBER economic development agency. OF AAED? Its ability to bring together the As a member of AAED, I have differing needs of communities always valued greatly the ability from all over the state is to meet and have access to the remarkable. The synergy among organizations and individuals the members all pulling for the who are at the forefront of common goal of creating an economic development within advantage for Arizona to attract, the state of Arizona. retain and provide assistance to employers within our WHAT ABOUT AAED DO YOU FIND TO BE THE MOST REWARDING? communities provides a great sense of pride and reward both As someone not directly working for an economic development personally and professionally. organization but often needing WHAT ARE YOUR TASKS AS CHAIR access to their professionals OF THE GOVERNMENT AFFAIRS and ability to act as ombudsmen COMMITTEE? for our client’s needs, the To assure that all of the networking component of AAED communities both rural and is invaluable. metro within the association have a voice as we pull together WAS THERE AN “AHA MOMENT” our resources and efforts to WHEN YOU REALIZED BEING inﬂuence legislation affecting A MEMBER OF AAED WAS economic development. It would WORTH IT? not be possible to accomplish Not really, but there have been this on my own. I must innumerable occasions when I recognize the tremendous time have pulled out the membership commitment and efforts of our directory to find a telephone vice chairs (Rebecca Timmer number of an AAED member in and Scott Powell). another Arizona city to ask for help or obtain information for a WHAT ABOUT AAED DO YOU FIND client. As far as the “worth” of THE MOST REWARDING? the organization, I think of the numerous other organizations at When I joined 10 years ago, I appreciated the networking every level of government within Arizona who have come and as I found the group to be so incredibly welcoming and easily gone, and AAED continues to created inﬂuential business not only survive but thrive. There is no question that AAED is an connections, which have assisted in my professional important addition to Arizona’s growth and success. I respect effort to attract and retain the hard work of the events, quality jobs. The networking, training and education offered to professional education and conference committees. ED professionals is unparalleled. PROFESSIONALLY, WHAT DOES IT MEAN TO YOU TO BE A MEMBER OF AAED? AAED members make up a broad cross section of highly talented representatives from the state’s economic development and private sector business communities. To be able to call these individuals my peers, business associates and friends has enabled me to be a much more informed and effective business executive. PROFESSIONALLY, WHAT DOES IT MEAN TO YOU TO BE A MEMBER OF AAED? AAED offers unparalleled access to economic development practitioners and service providers, both public and private, that are doing business in the state. Membership gives you the opportunity to network with key people in the industry, learn about what’s going on, and join forces on the advocacy front. For me, both previously as a practitioner and now on the WHAT ABOUT AAED DO YOU FIND provider side, AAED is that oneTO BE THE MOST REWARDING? stop-shop for everything related It became obvious to me early to economic development. in my real estate development/ construction career that there WHAT ABOUT AAED DO YOU FIND would be no need for the product TO BE THE MOST REWARDING? I was good at producing if there Networking, advocacy and was not continued job creation. education continue to be Job creation allows people to the primary platform of the move here, buy homes and organization. I continue to be ultimately desire convenient impressed by the value they shopping centers near their create with the events they host, homes to satisfy basic needs for from the spring conference to retail goods. AAED provides me the golf tournament to monthly an effective platform from which luncheon programs. I can (selfishly) help inﬂuence attitude and policy that supports WAS THERE AN “AHA MOMENT” continued efforts to stimulate WHEN YOU REALIZED BEING job creation in our state. A MEMBER OF AAED WAS WORTH IT? WAS THERE AN “AHA MOMENT” Not one “aha moment,” but I WHEN YOU REALIZED BEING believe that membership is really A MEMBER OF AAED WAS what you make of it. I’ve been WORTH IT? involved as a committee chair, My “aha moment” was when board member and now past I took to heart the often-used president — the relationships phrase that “you get out of your I’ve developed over 19 years membership what you are willing are incredibly valuable to to put into it.” After several me personally as well as years of peripheral involvement, professionally. I committed to a much more active level of participation, including committee work, conference attendance and social event participation. 38 | November-December 2012 39 AAED Q&A Executive Director Joyce Grossman WHAT IS AAED’S VISION? AAED is the leading advocate for responsible economic development for all of Arizona. One way to achieve this vision is the creation of the Economic Development Academy of Arizona, which trains professionals specifically on performing economic development in the state. Upon completion of the Academy, the attendees receive an AZED PRO designation. AAED also advocates for economic tools such as the Governor’s Competitiveness Package in 2011 that ultimately created the Arizona Commerce Authority and the $25M dealclosing fund. ARIZONA WAS ONE OF THE HARDEST HIT STATES DURING THE GREAT RECESSION. DO YOU SEE IT COMING BACK, AND HOW CAN AAED HELP IN THE RECOVERY? Some parts of the state are showing a stronger recovery than others. Many of our members are busy working on potential deals. We are hearing from members that building permits are rising along with retail sales, albeit modest but yet in the right direction. AAED’s membership enrollment is on pace to return to pre-recession levels by late 2013. Our sponsorship subscriptions are at an all-time high, which shows that companies and organizations are seeing value in supporting the vision of our association. 40 | November-December 2012 Joyce Grossman became AAED Executive Director in 2011. She has a B.A. from the University of California-Davis and a M.P.A. from California State University, Sacramento. Prior to joining AAED, Grossman was a deputy director with the City of Phoenix having completed more than 26 years. She helped in attracting the International Genomics Consortium/Translational Genomics Research Institute. ARIZONA IS POISED TO BECOME A NATIONAL LEADER IN TECHNOLOGY, BIOSCIENCE AND SOLAR INDUSTRIES. WHAT IS AAED DOING TO HELP PROMOTE THE STATE IN THESE AREAS? Our Governmental Affairs committee will continue to monitor these industry sectors and will be proactive in identifying and advocating for state and federal programs that can benefit our membership in their endeavors to attract and retain these vital industries. We will share industry successes through our membership luncheon programs throughout the state as a way to benchmark and broaden collaboration. WHO MAKES UP THE MEMBERSHIP? AAED has a membership of more than 470 from all over the state of Arizona. Our membership is 53% economic development and workforce practitioners, the individuals who are bringing in new business and retaining what’s here; and the other 47% are service providers representing the fields of brokerage/real estate, banking, construction, architecture, engineering, communication, interior furnishing, etc., that aid economic development. AAED serves its membership through three pillars: education, networking and public advocacy. We provide professional economic development training, networking event opportunities and public advocacy on behalf of economic development initiatives. WHO SHOULD BE A MEMBER OF AAED? Anyone that has a desire to advance the state of Arizona through economic development. You certainly don’t have to have economic development in your job title to be a member of this association. If you are an economic developer you will find a network of like minds that will help you benchmark your program and share tips. You will also have access to top-notch, affordable professional training. Service providers will build relationships with the economic development community and with other providers for future collaborations. INSIDE 42 44 52 54 Distressed Out What to do when a commerical building goes into receivership 2012 TOBY Awards BOMA Members Q&A Executive Director Mark Covington PUBLISHED BY BOMA Buildings in receivership present property managers with tough choices BY PETER MADRID eceivership is becoming a hot topic in the world of commercial buildings, according to distressedpro.com. According to the website, with stacks of distressed commercial real estate loans piling up with banks across the country and an increasing number of vacant commercial properties, property preservation and receivership assignments are on the rise. As members of BOMA Greater Phoenix, property managers may find themselves asking: “What do I do now? My building is in receivership, the loan is almost due, what are my best practices?” “A receivership can be an unsettling time for everyone,” says Brandye Coley, Real Estate Manager for CBRE Asset Services. “While property managers wonder how to be effective in their new role, tenants are worried about the stability of their work space and the impact it may have on their business. “Property managers need to inform and reassure tenants that the building will be maintained and their businesses won’t be negatively impacted,” Coley says. “If left uninformed, fear and insecurity can lead to tenants ‘jumping ship.’ The biggest change, however, is the lack of a reserve account, which is often used to replace big ticket items.” In a receivership, Coley says, these items must be managed within the operating account, and all expenses incurred and paid during the receivership must be approved by the receiver. In this situation, managers must defer any budgeted capital items; placing more emphasis on identifying areas were money is lost through waste or money for repairs can be saved through good maintenance practices. With little or no money to repair or replace HVAC units, she adds, managers need to be conscientious about fi lter changes to keep existing units in top operating condition. Managers must make roof checks, keeping gutters and drains clear to avoid leaks. Landscaping should also be checked for broken sprinkler heads that are wasting water. Once a property is preserved, says Michael J. DiDomenico, President of Wessex Commercial Management, the receiver will determine if there are any cosmetic upgrades that need to be done to the property before marketing it for sale. 42 | November-December 2012 R “If touchups are needed, and are approved and funded by the lender, managers must execute these tasks quickly and cost effectively,” DiDomenico says. “Once completed, the building is ready for auction.” Once a court appointed receiver is put in place, there is very little gray area. “If you are retained as manager (and often times the receiver will replace you with their own in house property Michael J. DiDomenico President of Wessex Commercial Management manager or a related entity) then you essentially work for the receiver under the supervision of the court,” DiDomenico says. “Where the manager may have had certain duties and powers under the management agreement with the debtor/property owner prior to the receiver, that is all out the window now.” The manager should immediately enter into a new management agreement with the receiver so as to be clear on what the limitations to their management authority is, he adds. Often, the receiver will require approval of all vendors, contracts and expenditures. Th is means no repairs or service requests be made without going through the receiver first. “The biggest surprise will be that the manager is specifically prohibited (by the court order appointing the receiver) from paying any outstanding bills for prior services on the property,” DiDomenico says. “Th is means that all vendors (janitorial, landscape, utilities, etc) who are owed money at the time will likely never be paid. Often it is the small service providers who have already paid their employees who will be hard pressed to recover from the lost revenue.” In many ways the process is worse than a Chapter 11 bankruptcy in that the vendor will not receive any advance warning and won’t get their day in court. Their account is simply not paid and gets wiped out through the eventual foreclosure of the property. To make matters worse, often times the vendor contracts are immediately cancelled and new vendors are brought in by the receiver – all in the name of protecting the cash flow from the collateral real estate for the lender. “Obviously, the property manager’s role has changed,” DiDomenico says. “They no longer act as professional operators of the property, balancing the best interests of their client/property owner with the needs of the tenants to create value. Under a receiver they must focus on staying within a limited scope of authority and preserving cash within the entity.” BOMA Under 100,000 SF Mesquite Corporate Center Owned by Mesquite Partners I Managed by Marie Dunn, Senior Real Estate Manager, CBRE TOBY 2012 THE OUTSTANDING BUILDINGS OF THE YEAR THIS YEAR’S BOMA GREATER PHOENIX TOBY AWARDS WERE PRESENTED ON SEPT. 14 AT THE RENAISSANCE PHOENIX DOWNTOWN. 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Fortitude 480.497.2300 • fax: 480.497.9610 • www.bjerkbuilders.com Building Successful Arizona Projects for 26 Years License B1-088897 45 BOMA 100,000 SF — 249,999 SF Desert Ridge Corporate Center Owned by FCA Fund Phoenix I, LLC Managed by Serena Wedlich, Real Estate Manager, CBRE 250,000 SF — 499,999 SF Biltmore Commerce Center Owned by Muller Tower Biltmore LLC Managed by Cathy Zocolli, Sr. PM/Designated Broker, The Muller Company 500,000 SF — 1 Million SF 20 East Thomas Owned by LBA Realty Fund II — Company V, LLC Managed by Karen Piper, Regional Operations Manager/Property Manager, LBA Realty 46 | November-December 2012 47 BOMA Medical Ofﬁce Building McAuley Medical Center Owned by LaSalle Investment Management Managed by Margaret Foster, Associate Asset Services Director, CBRE Government Building Arizona Game & Fish Department Headquarters Owned by Arizona Game & Fish Managed by Kelly Bast, Senior Property Manager, Lincoln Property Company Suburban Ofﬁce Park — Low Rise Target Tempe Owned by Target Corporation Managed by Cina Brady, CRE Building Operations Manager, Target 48 | November-December 2012 Commercial Construction — High Rises — New Construction — Remedial Repairs Tilt Panel Joints Masonry Control Joints Window and Door Frames Concrete Floor Joints Sidewalk Joints EIFS and Stucco Pedestrian and Trafﬁc Coatings Custom Colors Available 602.943.1902 ROC#242360 K-5 49 BOMA Suburban Ofﬁce Park — Mid Rise Fountainhead Corporate Park Owned by Principal Real Estate Investors, LLC Managed by Michael Chadwick, Real Estate Manager CBRE Industrial Ofﬁce Park Westside Business Park Owned by LBA Realty Fund III — Company IX, LLC Managed by Karen Piper, Regional Operations Manager/Property Manager, LBA Realty Earth San Tan Corporate Center I & II Owned by Wells REIT-San Tan Corporate Center I & II, LLC Managed by Maricella Nunez, Real Estate Manager, CBRE 50 | November-December 2012 Third-party Property Management and Development with an owner’s perspective. RENAISSANCE SQUARE 24TH AT CAMELBACK For information contact William Olson, 602.385.4000 firstname.lastname@example.org hines.com US AIRWAYS 51 BOMA PROFILES Anderson Security Anderson Security is a 17-year old, locally women owned and operated firm that provides security officers, investigation services, security consulting and academy training services for a portfolio of government, private and commercial sector clients. Anderson prides itself on swift responsiveness, flexibility and implementing cost-effective innovations. “BOMA is a great membership and allows us to surround our company with outstanding people who are experts in the field,” says sales representative Sherry Sentgeorge. “I have enjoyed connecting with the building professionals and having the opportunity to not only do business with them but learn from them and what BOMA brings to the table. BOMA Greater Phoenix is very diverse and has many educational events as well as networking events, and of course it is great that we also have access to the national body.” Caretaker Landscape and Tree Management Caretaker Landscape and Tree Management offers commercial and HOA landscape management throughout the Valley. It provides landscape installation among other services. “Being a BOMA member is vital to our business,” says Mischelle Arreca, director of business development. Arreca oversees the direction and growth of Caretaker’s development team. BOMA, Arreca says, gives employees of Caretaker Landscape the opportunity to develop their business and create and maintain relationships with a large number of professional managers and associate members. Highland Commercial Rooﬁng Highland specializes in installing energy-efficient “CoolRoof” systems for commercial, industrial and multi-family buildings. The company services California, Arizona and Nevada. “Being a member of BOMA is extremely important,” says Vice President Greg Pender, who is involved in BOMA and received the Committee Chair of the Year Award in 2010 and 2011. He currently is on the BOMA Board of Directors and has served two terms. Professional Sky Climbing Service Professional Sky Climbing Service has been in the Valley for 30 years and a member of BOMA for almost as long. Pro Sky Climbing is the largest commercial window cleaning company in Arizona and provides window cleaning services for all building types, including high-rise offices and store fronts. President Paul Gould has been in the industry for 30 years and says he believes that membership in BOMA Greater Phoenix is important. “It’s one of the few places you can see your customers in an informal setting,” Gould says. Waste Management Waste Management (WM) provides collection, transfer, recycling and disposal services and is the leading provider of comprehensive waste management services in North America. The company’s mission is to minimize environmental impact so that the economy and 52 | November-December 2012 environment can thrive. “Waste Management is a proud supporter of BOMA, an organization critical to the success of the industry,” says Janette Coates, Communications Specialist Sr. for Arizona and New Mexico. In addition to their other services, WM offers education and training programs. Skyscrapers Need Love, Too When the Great American Tower went up in Phoenix in 1985, it stood 24 stories above one of the city’s most historically charming neighborhoods, making it one of the tallest skyscrapers in Phoenix at the time. But time passes, and neighborhoods – homes, businesses, skyscrapers and all – must weather the elements of our dry, dusty desert. The revitalization of the Encanto-Palmcroft neighborhood near the tower is one of the city’s great success stories, but keeping the tower itself ahead of the times is a bit more challenging due to constant tenant movement and other factors. At the Great American Tower, situated on Central Avenue just south of Osborn Road in midtown Phoenix, crews from Hernandez Companies recently freshened up the interior aesthetics to make sure they were alluring for current and prospective occupants. They removed old commercial wallpaper, which left the hallway walls coated with a rough texture. While some maintenance companies may have just painted over it and called it a day, our building whisperers expertly applied a mud coating to the walls (a practice called skim coating) and sanded them down to a Level 5 finish – wavy enough to have that nice drywall texture, but smooth like buttah. All the dust required special preparation work to protect the building’s HVAC system. The suite for Carlson Wagonlit, a corporatetravel company and tenant at the tower, was also enhanced with unique bathroom improvements. Crews installed new lighting and a pearlescent paint called Liqua Pearl, giving the walls a metallic, reflective coating that glimmered in the light. The lobby elevator also got the same eye-popping paint treatment. Now the view from inside the Great American Tower glows like the neighborhood gem around it. Homes and neighborhoods need to be spruced up every now and then. But skyscrapers need love, too. Does your high-rise need help? For more information on hiring our building whisperers for your next project, contact us directly at (602) 438-7825 or visit our website. (http:// www.hernandezcompanies.com) BOMA Q&A 602-268-7877 Executive Director Mark Covington Mark Covington manages BOMA/ Greater Phoenix’s office in the support of the association’s more than 275 local members who collectively manage more than 60 MSF of office, industrial, retail, medical and other commercial real estate in Metro Phoenix. The economy and general business climate are challenging and full of uncertainty. What are the most immediate concerns facing your members? POWER One of the most painful areas of uncertainty is what will happen with the International Accounting Standards Board (IASB) and Financial Accounting Standards Board’s (FASB) proposed lease accounting standards changes. A coalition of nonprofit and commercial real estate associations, including BOMA, released a study this year showing that these changes would increase public company liabilities by $1.5 trillion and annual costs by $10.2 billion. We’ve made great efforts at the national level to advocate for reconsideration of these changes. What other financial issues are of great concern? Congress’ continuing vacillation on capital gains tax rates is troubling and makes long-term decisions difficult. The last “temporary extension” of the 15% capital gains rate runs through the end of 2012. BOMA has asked our representatives to, at a minimum, extend the current rate through 2013. If an extension is not passed, rates will return to 20% in 2013. Once again, we’re working with our representatives on a last-minute reprieve for the current 15-year schedule. If not passed retroactively to the beginning of 2012, the depreciation schedule returns to the completely unrealistic 39-year schedule to which it reverted this year. This depreciation schedule affects $15 billion in annual improvements, with a corresponding impact on jobs and investment. We’ve also heard quite a bit about leasehold depreciation. What is BOMA’s position? Where is BOMA on sustainability issues? Nominations close December 31, 2013 Nominate Today AzPowerBrokers.com We feel pretty confident that we’re in the forefront of sustainable building performance. We have a voluntary challenge to our membership, which matures this year. In 2007, we challenged our members to reduce their energy usage by 30% across their building portfolios by 2012. We are in the process of assessing our performance and feel confident that many of our members will have met the challenge. What’s on BOMA’s radar for 2013? We’re looking forward to working with the City of Phoenix on their new commercial solid waste project. This has the potential to be of great benefit to businesses, the city and our Valley environment in general. 54 | November-December 2012 * ** VISIT REMAXCOMMERCIAL.COM A BETTER WAY IN COMMERCIAL REAL ESTATE * This ranking is based on responses to NREI’s top brokerage survey, conducted in February and March 2011. 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