AzBusiness Magazine May/June 2013

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MAY // JUNE 2013

WE’RE BACK! Residential real estate market makes an amazing recovery after economic downturn

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Steven J. Hilton, chairman and CEO, Meritage Homes; Elliot Pollack, CEO, Elliott D. Pollack & Company; K. Michelle Lind, CEO, Arizona Association of Realtors; Matt Widdows, CEO, HomeSmart International.

SOCIAL RESPONSIBILITY

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Table Of Contents Job 6 First Z’Tejas CEO started professional life as an attorney Biz 8 Small Coup Des Tartes owner adds catering to the menu CEO Series 10 Jeff rey P. Gaia and Biltmore Bank focus on businesses in Biz 12 Women Kitty Maloney-Langmade breaks the mold in plumbing 14 Banking How will new mortgage guidelines impact the industry?

18 Legal Language issues become a legal problem for employers 22 Healthcare Demand on and for nurses has impact on the profession Responsibility 26 Social Spotlight on companies, nonprofits that impact our lives 34 Travel Iconic Hotel Del Coronado celebrates 125th birthday 36 Dining Famed TV chef brings his own flavor to Scottsdale Awards 38 Foodist Arizona’s dining industry delivers a huge economic boost Estate Outlook 46 Real Residential housing experts expect continued recovery Chamber of Commerce 56 Arizona Industry leaders call for improvements in education 62 HEAT Trendsetters in health, energy, aerospace, technology 68 ASBA New CEO leads small businesses out of the Recession CVB 81 Phoenix Sky Train, new restaurants energize visitors’ experience

Good economic news abounds

Th is is one of those issues of Az Business magazine that was really fun to put together because it’s brimming with positive economic news.

We learn in the residential real estate outlook — that runs in conjunction with the announcement of the winners of the Arizona Real Estate Achievement (AREA) Awards — that we can expect Phoenix-area home prices to keep soaring in 2013.

“The residential market continues to improve,” said Elliot Pollack, CEO of Elliott D. Pollack & Company, a real estate and economic consulting firm. “The excess supply is dwindling. While population flows are still way below normal, demand is increasing. The result — higher resale and new home prices — helps the economy because fewer homeowners are under water and people feel better off (the wealth effect). These positive trends should continue over the next year and beyond.”

In our Arizona Small Business Association supplement, we learn that big banks are approving small business loans at the highest rate in more than two years. “With an improving economy, Wells Fargo is ... providing more dollars to help small businesses stay competitive today and for the long term,” said Jennifer Anderson, business banking manager for Wells Fargo Arizona.

Now that’s a pretty good sign about our economic recovery.

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

Az Business on the Go: AzBusinessMagazine.com 2 AB | May-June 2013

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Shout Outs PCH exPands its Care

Phoenix Children’s Hospital has opened its Southwest Valley Center in Avondale, a 35,355-square foot facility that brings world-class pediatric care closer to patients and families in the Southwest Valley. The new specialty and urgent care center houses some of the most updated technology and services exclusively for pediatric care.

rosewood Homes earns Honor

Eliant, a customer experience management company, named Scottsdale-based Rosewood Homes as winner of the 2013 “Homebuyers’ Choice Award” for providing the “Best Overall Purchase and Ownership Experience” in North America. This is the first time a homebuilder has been honored in four consecutive years and Rosewood Homes is the only Arizona builder to ever receive this prestigious award.

driving innovation

Marc Chesley of Infusionsoft, creator of the all-in-one sales and marketing software for small businesses, has been named 2013 IT Leader of the Year by the Arizona Society for Information Management (SIM). Chesley won the award for driving innovation and execution excellence, including company, community and staff development, through information technology.

PanCreatiC CanCer breaktHrougH

A multi-center Phase III clinical trial conducted through a partnership between Scottsdale Healthcare and the Translational Genomics Research Institute demonstrates that Abraxane (nab-paclitaxel) plus gemcitabine extends survival of late-stage pancreatic cancer patients compared with the standard treatment.

sHowing goodwill

Michael Pollack, owner of Michael A. Pollack Real Estate Investments, made a $100,000 contribution to Goodwill of Central Arizona, which put Pollack’s lifetime of giving to Goodwill at more than a $1 million. Goodwill also said that Pollack’s $100,000 contribution is also its biggest cash contribution from an individual made to the organization so far in 2013.

4 AB | May-June 2013

President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Editor: Peter Madrid Contributing writer: Isabelle Novak Interns: Emily Nicholson | Rochell VanDeurzen | Desiree Toli Huan Vo | Courtney Merz ART Art director: Mike Mertes Graphic designer: Lillian Reid Art intern: Alisha Hurst DIGITAL MEDIA Web developer: Eric Shepperd Web and graphic designer: Melissa Gerke MARKETING/EVENTS Manager: Whitney Fletcher Intern: Sabrina Spector Az BUSINESS MAGAzINE Senior account manager: David Harken Account managers: Arthur Alcala Shannon Spigelman | Zoe Terrill OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Cindy Johnson AzRE | ARIzONA COMMERCIAL REAL ESTATE Director of sales: Steve Koslowski Az BUSINESS LEADERS Director of sales: Carol Shepard RANKING ARIzONA Director of sales: Sheri King SCOTTSDALE LIVING Account manager: Gail Rosier EXPERIENCE ARIzONA | PLAy BALL Director of sales and marketing: Scott Firle Az BIG MEDIA EXPOS SCOTTSDALE SUPER EXPO/APRIL SCOTTSDALE SUPER EXPO/NOVEMBER Exhibit directors: Kerri Blumsack Tina Robinson | Marianne Avila Az Business magazine is published bi-monthly by AZ BIG Media, 3101 N. Central Ave. Suite 1070, Phoenix, Arizona 85012, (602) 277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $4.95. Bulk rates available. Copyright 2013 by AZ BIG Media. All rights reserved. No part of this publication can be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from AZ BIG Media.

AB | May-June 2013 5

FIRST JOB

◆ BY MICHAEL GOSSIE

interest in my classes. Eventually, if I told them I had an upcoming test, I would give them my notes and they would quiz me. It was pretty funny to see a bunch of waiters asking me question about constitutional law. When I finally graduated from law school and started practicing, I had this ache every so often and I eventually figured it out that my true vocation was being in the restaurant business.

PHOTOGRAPH BY LILLIAN REID

what was your first job in restaurant management?

STEVEN MIChELETTI CEO of Z’Tejas what was your first job?

Delivering bread on my uncle’s bread delivery route at the age of 11. I worked every Saturday from 8 a.m. – 6 p.m. for two years. When I became a teenager, it just didn’t seem like a cool job to be talking to your friends about, so I moved on to work in a fast-food restaurant called Spaghetti Bowl. Instead of serving buckets of chicken and fries, we served buckets of spaghetti and meatballs. My job was to make 500 pounds of meatballs every Saturday. It took me several months to stop longing for delivering bread.

do you remember how much you earned at that first job?

I think my uncle paid me $5 a day and I also got tips from his customers. He had over 100 stops, so I made about $25 dollars in tips, which was a lot of money as an 11 year old.

6 AB | May-June 2013

what did you learn from your first job that still impacts you today?

Consistency. Folks expected to have their delivery occur at the same time every day and they would get quite upset if their delivery was late. Oddly enough, the consistency of time mattered almost as much as the quality of bread that was being delivered. You have to deliver on the promises you make to your guests and your team consistently or they start looking elsewhere.

You started your career as an attorney. what made you decide to evolve into the restaurant industry?

I have always worked in restaurants. My first bartending job was down the street from The Palm restaurant in Washington, D.C. I had the worst shift, but I learned to love it because all the staff from The Palm would come in and eventually they took an

While studying for the bar exam, I become a weekend manager for a great little bar in D.C. called PW’s Saloon on 19th Street. The PW stood for the nicknames of the two owners, the Prince and the Walrus. I’ll leave the explanation of the nicknames to your imagination.

what is the biggest difference between the legal and restaurant industries?

This is an easy answer. Practicing law is an adversarial process; someone wins, someone loses. Someone is happy, someone is not. Restaurants exist to satisfy and please. When you do it right, it’s a win-win for just about every stakeholder.

what has been your biggest challenge and how did you overcome it?

My biggest challenge was admitting that the restaurant I opened in Portland, Maine was failing and needed to close. It wasn’t just about the money that I had lost, but the passion that went into creating it. It took me years to get over. For me, it was worse than being dumped by your first true love. Time heals all wounds and you analyze what went wrong and you learn to start over again.

if you weren’t doing what you are doing now, what would you like to be doing?

I originally thought when I finished law school I would go and work for a movie studio in L.A. because I have always loved spending time in movie theaters. So I guess that would be an acceptable alternative even today. I truly believe that you are where you are because that’s where you’re supposed to be. I love the restaurant business and wouldn’t change anything.

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SMALL BIZ

◆ BY COURTNEY MERz

PHOTOGRAPH BY LILLIAN REID

TAKE DEUX

Coup Des Tartes owner opens special events and catering company in Central Phoenix

R

anked as the No. 1 French restaurant by Ranking Arizona for four years in a row, Coup Des Tartes is a charming, 15-year-old, bistro-style restaurant that patrons call one of the most engaging and intimate dining experiences in all of Phoenix.

With his exquisite attention to detail, owner Ron Pacioni has turned Coup Des Tartes into the longest-running BYOB (bring your own beer, wine or champagne) restaurant in Phoenix, while dominating that niche in the process.

Now, Pacioni is bringzing his golden touch and exquisite taste to the catering and special events industry.

Rendezvous Catering and Events is another masterpiece in which Pacioni has immersed himself. Rendezvous offers the same exquisite delicacies as Coup De Tartes, just at a greater production scale.

With a thoughtful and dedicated staff, 8 AB | May-June 2013

Rendezvous Catering and Events vows to make any party an event. To help give those parties and events a place to call home, Pacioni has opened a new sister venue called Les Deux, which is located south of Coup Des Tartes on 16th Street.

“We can bring in a large corporation or a small group and provide great quality experiences,” says Pacioni, “At Les Deux, guests can receive a hotel experience without having to rent out a banquet room.”

Accompanied by an intimate setting and relaxing feel, Les Deux is designed to seat only 40-120 people. Pacioni created his new catering company because Central Phoenix was in desperate need of an eclectic special events corporation. By catering to all parties — whether they are weddings, corporate events or everyday social gatherings — Pacioni prides himself on finding a happy medium for all clients and providing a four-star meal with fantastic quality services.

“With any type of food — from

Italian, Mexican or even Coup Des Tartes style — the chefs are very talented and exceptional at customizing the menu for guests,” says Pacioni.

For whatever mouth-watering food the client is craving, Pacioni says his team at Rendezvous Catering and Les Deux will work with each individual to craft an eating arrangement to suit the needs of any party.

Since opening in December, Pacioni says he has high hopes and aspirations for his latest business venture. In the first quarter, Pacioni says the special events corporation has exceeded his expectations and standards as he plans to use Les Deux as an outreach to the events community.

Coup Des Tartes 4626 N. 16th Street  Phoenix, AZ 85016 602-212-1082  nicetartes.com

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CEO SERIES

◆ BY MICHAEL GOSSIE

PHOTOGRAPH BY GLORY SHIM

their wives. We’re much more intimately involved and knowledgeable about our customers in an environment like this than when I was at a big bank.

JEFFREy P. GAIA Chairman and CEO The Biltmore Bank of Arizona what differentiates biltmore bank from its competition?

We started Biltmore Bank of Arizona in 2003 with the intent to concentrate on the needs of small and mid-size businesses.

We felt that was very important, relative to what this local economy really was. It’s not really a lot of Fortune 500 companies.

It’s a lot of small and mid-size businesses.

Successful companies find a need in the economy and fill it. That creates job opportunities and economic opportunities.

We’re a bank and what banks do is react and fill the needs of society. We finance several hundred local businesses. We know that if we continue to be responsive to their needs, we will be successful.

tell us something about biltmore bank that would surprise most people.

Our lineage. The founder of the bank, Richard Lehmann, is the retired vice 10 AB | May-June 2013

chairman of Bank One Corporation. I worked for Rich for 30 years. It’s unusual that we are a smaller community bank, but were populated with large bank bankers.

We understand the positive aspects of big banks and the negative aspects of big banks and we’ve tried to distill the best of both business models — the big bank model and small bank model — into what we are here at Biltmore Bank.

How does being Ceo of biltmore bank differ from being Ceo of a larger banking company?

I certainly get involved in a lot more things. The last job that I had at Bank One was running the national business banking group, which was the small business franchise. We had 500,000 small business customers and the interesting thing is I never knew one of them. Here, I know every customer. I know their birthdays. I know their kids. I know

what qualities make you an effective Ceo for biltmore bank?

Clarity of message is mission critical when you’re leading an organization. I think it’s important to be respected. It’s nice to be liked, but its important to be respected. The combination of a clear and direct communication style and the fact that I’m not afraid to jump in and handle a task when something needs to be done helps me lead by example.

what’s been your biggest challenge at biltmore bank?

The last four years, it’s been the economy.

The economy has been an absolute train wreck. The Recession has affected every sector of the economy. Every day, we would walk in and try to figure out what we’d have to do to help our customers stay in business because 2009, 2010 and 2011 were really tough, particularly for small businesses where revenue streams were dropping much faster than they could cut expenses. Every customer had challenges and it was our responsibility to find a way to respond to those challenges to help keep them in business.

what’s your greatest accomplishment?

The fact that we’ve made it through this economy. There are eight or 10 banks in town that didn’t make it. The fact that we made it and we made it without any layoffs shows the strength of the organization we have here. We looked people in the eye and knew that they had houses, cars and children to pay for.

It wasn’t easy and everyone pitched in.

Even I took a pay cut. But it’s a testament to this bank’s core values that we worked together to make this thing work.

WOMEN IN BIZ

◆ BY MICHAEL GOSSIE

was always working in the field and my mother performed the bookkeeping.

Upon returning from my honeymoon, I learned my mother’s secretary had left the company. My mother asked me to come to the plumbing shop to help her out with payroll and I never left.

PHOTOGRAPH BY LILLIAN REID

are there any aspects of the industry that are made more difficult because you are a woman?

A LEADER OF MEN Maloney-Langmade powers plumbing company in a male-dominated industry

T

here are not many people in the world who can say they are a licensed plumber, have an MBA in International Management from the Thunderbird School of Global Management, and are a mother to three daughters, ages 7, 11 and 12.

Kathryn “Kitty” Maloney-Langmade can make those claims.

The president of W.J. Maloney Plumbing, Heating & Cooling leads a vibrant plumbing contracting company in a male-dominated industry. Some of her company’s recent projects include the new Chicago Cubs spring training complex 12 AB | May-June 2013

in Mesa, the Veteran’s Administration Southeast Healthcare Clinic in Gilbert, Phase IV of CityScape Phoenix, a major solar thermal project at the University of Arizona in Tucson, and the Sky Train Project at Phoenix Sky Harbor International Airport.

Az Business magazine caught up with Maloney-Langmade — whose company won consecutive Best of the Best Awards for safety from SCF Arizona — for a Q&A.

How did you get into the plumbing business?

My father and mother started W.J. Maloney Plumbing in 1964. I grew up in and around the business. My dad

Growing up, I always heard and learned about construction but I was not in the field with my father. Often times, I wish I had the mechanical, hands-on expertise and years of experience that my father had. To carry on his tradition of quality workmanship, I have had to surround myself with key people who have the same mechanical skill that he possessed.

are there any benefits to being a woman in a male-dominated industry?

My experience is that both men and women in construction go out of their way to be supportive, kind, courteous and helpful. People want me to succeed. They know construction is a tough road. I am lucky to have received good advice and help.

what has been your biggest challenge?

Turning the company around during difficult times. We were in a pattern of winning work and doing jobs, but were losing money. Meeting and listening to my key foremen who have been with the company for years, I was able to learn and understand changes that needed to happen. I was able to get the company moving in the right direction when I put together a solid leadership team. We are now able to estimate, win and perform good work. We have a great team in place now and the momentum continues to build and grow.

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BANKING

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IT’s sTAnDARDs TIME How will the Consumer Financial Protection Bureau’s new mortgage guidelines impact consumers, lenders?

A

s part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), the Consumer Financial Protection Bureau has released several guidelines for lenders and servicers to determine a customer’s ability to repay (ATR) a mortgage and how they interact with homeowners who are facing foreclosure. The final guidelines become effective in January 2014.

With respect to the ATR Rule, the final guidelines describe certain minimum requirements for creditors in making abilityto-repay determinations. The eight underwriting factors a residential mortgage lender must consider include:  current or reasonably expected income or assets;  current employment status;  the monthly payment on the covered transaction;  the monthly payment on any simultaneous loan;  the monthly payment for mortgage-related obligations;  current debt obligations, alimony and child support;  the monthly debt-toincome ratio or residual income; and  credit history.

Az Business asked Valley banking leaders to examine the impact.

How will the Consumer Financial Protection Bureau’s new rule for assessing a borrower’s ability to repay a mortgage loan impact consumers?

Jack Barry, president and CEO, Enterprise Bank & Trust Arizona: Underwriting guidelines will be more stringent due to 14 AB | May-June 2013

the new requirements and it will be more difficult for individuals to be approved for mortgage financing. The types of loan products offered may change or be more limited. The new loan programs will have a limit on acceptable debt-to-income (DTI) ratios that can be considered. The proposed DTI ratio is less than the figure that is currently being used. Consumers will have more power to pursue litigation against lenders. The CFPB has done an excellent job in informing the public of their rights related to the mortgage loan process, making the complaint process more fluid for homebuyers.

Robert Winter, Arizona manager of mortgage lending, Mutual of Omaha Bank: The proposed rules basically cover all of the same documentation requirements as previously defined over the past 30 years, except the CFPB: a) tightened certain requirements, which will make it more difficult, and even costly, for borrowers to qualify for a mortgage; and b) defined certain loan programs that have “toxic” features, such as negative amortization loans.

Tim Disbrow, senior vice president, Wells Fargo Home Mortgage: Many consumers have grown accustomed to providing limited documentation to qualify for loans and mortgage loans. Consumers now need to expect that they will need to provide detailed documentation to support their income, assets and liabilities when qualifying for a mortgage loan – regardless of their credit history, or the amount of money they may be using as a down payment. Additionally, the faster and earlier they are able to provide the needed documentation will help make the process smoother.

tim disbrow

Jack barry

kevin sellers

Gil Rudolph, co-chair of the national Financial Institutions Practice, Greenberg Traurig: As lenders implement the CFPB’s ability to repay and companion qualified mortgage requirements, consumers are going to discover that their ability to obtain a mortgage loan will become more limited and, if they can qualify, the terms of that loan will be more standardized. Additionally, consumers likely will see a significant increase in the paperwork and information they must provide as well as the verification process they must undergo.

Kevin sellers, executive vice president, First Fidelity Bank in Arizona: The “ability to pay” rule requires lenders to make a reasonable, good-faith determination that a mortgage borrower will be able to repay a loan that’s offered. Additionally, “qualified mortgages” will be the standard where all traditional mortgage products will conform to Fannie Mae and Freddie Mac standards. For unorthodox mortgages, those with unusual term lengths, etc., vendors are subject to legal liability if they fail to make good-faith estimates of ability to pay. Th is establishes that heightened scrutiny will be applied to all departures from qualified loans. These measures will restrict loan availability and some households will have a harder time getting loans, but have more protection against being taken advantage of.

How will the Consumer Financial Protection Bureau’s new rule for assessing a borrower’s ability to repay a mortgage loan impact lenders?

Winter: The CFPB has defined a “qualified mortgage” in such a way that, if the loan goes bad, the borrower can dispute whether or not the lender properly took into account the borrower’s ability to repay the loan. This could potentially result in legal disputes, which would ultimately raise the cost of transactions for the consumer.

gil rudolph

robert winter

Barry: Balloon loans will no longer be able to be made.

The maximum payment will now be based on the first five years on ARM loans, which may affect the ability to repay calculation. Non-qualified mortgages or high-priced QMs escrow requirements have been modified/extended. When all rules are finalized, lender compensation may be impacted within the “points/fees”of the loan which will then affect the APR and whether or not a safe harbor QM is being made. The servicing requirements imposed on servicers who service more than 500 mortgage loans are extremely cumbersome.

Disbrow: Wells Fargo’s processes will not be greatly affected.

We have always had in place a process to assess our customer’s ability to repay the mortgage loan. As a result, many would refer to us as being a “conservative” lender. For us and other lenders who have taken this approach to lending, these new rules will not be as impactful. For lenders who may have not followed these lending practices, the changes will be more impactful. The CFPB has the best interests of the borrowers in mind when outlining these practices/processes, and we will support and continue to follow these processes.

Rudolph: To reduce their liability exposure, lenders will only make loans that meet the “qualified mortgage” standards in the new CFPB rule that include assessing a borrower’s ability to repay. To do so, most lenders will underwrite their loans using Fannie Mae or Freddie Mac standards. sellers: Lenders will need to conform to the “qualified mortgages” standard for traditional mortgage products and face legal liability if they fail to make good-faith estimates of “ability to pay” for unorthodox mortgages. The new rule also requires lenders to fully inform borrowers in writing about foreclosure alternatives as a first response when payments are missed.

AB | May-June 2013 15

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16 AB | May-June 2013

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AB | May-June 2013Ω 17

LEGAL

◆ BY MICHAEL GOSSIE

Language issues in the workplace lead to increase in employment discrimination cases

A

s we drive throughout Arizona, we see billboards that are printed in English and others that are printed in Spanish. When we hire contractors to do work on our homes or visit our favorite restaurants, we sometimes have to seek out someone who speaks English to get questions answered.

Those incidents raise an employment law question that leaves many Arizona employers scratching their heads: Can employers require their employees to only speak English in the workplace?

The answer to that question, like the gray area that surrounds many legal questions, is “it depends.”

“While there is no specific law that requires a specific language in the workplace, Title VII of the Civil Rights Act and the Arizona Civil Rights Act prohibit discrimination based upon national origin and language is closely tied to national origin,” said Stephanie Quincy, a partner 18 AB | May-June 2013

with Steptoe & Johnson LLP in Phoenix.

“The Equal Employment Opportunity Commission (EEOC) is a federal agency that enforces Title VII and the Arizona Civil Rights Division of the Arizona Attorney General’s Office enforces the Arizona Civil Rights Act. Both agencies are very concerned that employers will enact language requirements not because of business necessity, but as a way of excluding certain nationalities from the workplace. The Phoenix office of the EEOC sued a restaurant located on the Navajo Nation for enacting an English-only policy, resulting in years of protracted litigation for the employer.”

That restaurant is not alone. The EEOC recently released figures on what kinds of employment discrimination cases are being brought to the agency and complaints of discrimination based on national origin, including those involving perceived problems with language ability or accent, have increased 77 percent since 1997.

The EEOC has suggested that it might be the increasing diversity of the American

workforce, but civil rights advocates think it’s more likely due to a climate of fear, particularly in states like Arizona that have been enacting laws hostile to immigrants, both legal and undocumented.

“Generally speaking, English-only rules are not in and of themselves unlawful,” said John Balitis, director at Fennemore Craig, who practices in the labor and employment area. “They are permissible when needed to promote the safe and efficient operation of the employer’s business.”

According to Joseph T. Clees, shareholder, and Alexandra J. Gill, associate, of Ogletree, Deakins, Nash, Smoak & Stewart, there are some circumstances where an English-only rule may be necessary to further a safety, efficiency or another legitimate business concern. The EEOC has provided examples of such circumstances, including communication with customers, employees or supervisors who only speak English; emergency situations; cooperative work assignments where the English-only rule is necessary for efficiency purposes; and to assist supervisors with monitoring performance.

“This is an extremely high standard and very difficult to meet,” Quincy said.

“Furthermore, some of these categories

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AB | May-June 2013Ω 19

“While there is no specific law

that requires a specific language in the workplace, Title VII of the Civil Rights Act and the Arizona Civil Rights Act

prohibit discrimination based upon national origin

and language is closely tied to national origin,”

–Stephanie Quincy, Steptoe & Johnson”

would only permit an English-only rule where the business necessity is present and would not support a rule completely prohibiting non-English languages completely.”

This is where that gray area comes into play when it comes to language in the workplace, experts said.

“If the employer cannot demonstrate that (speaking English) is a business necessity, it cannot justify such a rule and could be subject to legal action by any employee who is affected by the policy,” Quincy said. “A policy does not have to be a formal written policy. A rogue supervisor can create a policy by simply telling employees speaking Spanish to quit doing so. Such a policy can almost never be supported when enforced on employee breaks or when employees are having nonwork related discussions.”

Because the EEOC has taken the position that English-only policies can violate Title VII, Clees and Gill said employers adopting these policies can face a range of penalties under Title VII if the policy is found to be discriminatory.

“An individual alleging a violation of Title VII may seek to recover damages, including back pay, front pay, compensatory damages, punitive damages, and attorneys’ fees,” they said. “Individuals may also request injunctive relief.”

Because of the potential backplash,

alexandra J. gill 20 AB | May-June 2013

Clees said employers should carefully analyze their reasoning for instituting an English-only policy prior to doing so.

“Employers should consider whether the policy has important safety justifications and/or business justifications, and whether instituting the policy would be effective in advancing the desired business purpose,” he said. “Employers should also consider whether there are any alternatives to an English-only policy that would accomplish the same goals. If an employer decides an English-only policy is necessary, it should ensure that employees are clearly informed of the policy, including when and where it applies.”

While there is no precise test for weighing or evaluating the business reasons for a language policy in the workplace, Quincy said the EEOC suggests considering:  Evidence of safety justifications for the rule.  Evidence of other business justifications for the rule, such as supervision or effective communication with customers.  Likely effectiveness of the rule in carrying out obectives.  English proficiency of workers affected by the rule.

“Employers should only (implement policies that either completely or partially prohibit the use of any language other than English) if they can articulate a

Charitie l. Hartsig

John balitis

business necessity for such policies,” said Charitie L. Hartsig, an associate at Ryley Carlock & Applewhite. “They should also clearly inform employees of the circumstances under which they will be required to speak only English and the consequences of violating the policy. Limited English-only policies have been allowed under Title VII where the policies are in place to ensure clear communications regarding the performance of dangerous and safetysensitive tasks. The EEOC presumes that an employer who completely prohibits employees from speaking their native language disadvantages the employee’s employment opportunities on the basis of national origin under Title VII. However, the Ninth Circuit rejected the EEOC’s per se rule. Nevertheless, Arizona employers should be cautious about implementing English-only policies and do so only when there is a business necessity for doing so.”

Despite an employer’s best business intentions, experts said instituting a language policy in the workplace is most likely a powderkeg ready to explode.

“The EEOC presumes that Englishonly rules applied at all times are discriminatory,” Balitis said. “Because the EEOC looks with disfavor on English-only rules, an employer may be forced to litigate even the most carefully crafted rule.”

Joseph t. Clees

stephanie Quincy

AB | May-June 2013立 21

hEALThCARE

◆ BY LORIN PARKHURST

CHanging role of nurses

The demands, needs and impact of the profession create a shift in healthcare and education

T

hey are the healthcare providers that will see 22 percent job growth – more than any other occupation – through 2018. They are the communicators. They bridge the gap in the medical industry. They are the part of the healthcare team that makes sure that the right patient is in the right place getting the right thing done.

They are nurses and they are now taking on more specialized roles, applying advanced technologies and filling voids created by an anticipated shortage of primary care physicians.

“We are encouraging our nurses to return to school to advance their degree,” said Deborah Martin, senior director of professional practice at Banner Health. “Patients are much more complex in our hospitals, as well as in the home and our communities ... Nurses need to have higher levels of education to manage these complexities in all settings where nurses practice. Advanced degrees are now required for our upper level nursing managers.”

growing demand

About 10,000 Baby Boomers reach retirement age every day, fueling the long-term demand for specialized nurses. To help fill that need, Arizona State University implemented the Adult-Gerontology Nurse Practitioner Doctor of Nursing Practice (DNP) concentration.

“It will prepare nurse practitioners to deliver primary care to adults throughout their lifespan with increased emphasis on care of the aging population,” says Katherine Kenny, clinical associate professor and director of the DNP program at ASU. Johnson & Johnson’s website lists more than 3,000 capacities in which nurses can be employed — from school nurses to jailhouse nurses. Nurses practice in hospitals, schools, homes, retail health clinics, long-term care facilities, battlefields, and community and public health centers. Everywhere there are people, there are patients, and everywhere there are patients, there are nurses.

22 AB | May-June 2013

“Nurses are becoming more influential in the policy changes that are occurring with the Affordable Care Act,” Kenny says.

“More nurses are practicing in ambulatory care settings and public and community health.”

Arizona educational institutions are now offering a wide range of educational opportunities that support the nursing profession’s challenge to improve patient care outcomes for individuals, systems, and organizations. And because of skyrocketing healthcare costs, preventative care and education have become integral elements in reducing chronic illness and minimizing re-hospitalization.

“Nurses are now specializing in everything from palliative care and managing chronic illness, to maintenance and preventative care,” says Ann McNamara, dean of Grand Canyon University’s College of Nursing. McNamara says students at GCU are spending more time concentrating on home healthcare and hospice in their new hands-on simulation labs, complete with live actors, computer-operated mannequins and dynamic patient scenarios.

Profession evolves

Angel MedFlight provides air medical transportation services from bedside to bedside. “[Our] nurses are able to put all the components of the puzzle together and make the medical flight process more efficient, effective and compassionate,” the company’s CEO, Jeremy Freer, says.

Nurses are also assessing the long-range healthcare needs of patients.

“Where once the hospital nurse’s prime responsibility was to provide the best care possible that the patient needed at that moment, now the nurse is also focused on what happens next,” explains Maggi Griffin, vice president of patient care services at John C. Lincoln Health Network.

Griffin says that patient discharge planning and posthospitalization follow up are other key roles of the evolving nursing profession.

Advancements in technology have significantly enhanced patient care in recent years. Nurses now have the ability to monitor patient conditions remotely, and electronic health records enable nurses to track, evaluate, and document patient information.

“Technology is opening doors to deliver nursing care in new and innovative ways, often serving as a second set of eyes to enhance patient safety or monitoring patients from their homes,” says Deborah Martin, senior director of professional practice at Banner Health. Martin adds that Medication Bar Coding is another example of how technology is helping nurses be more effective and prevent errors.

making tHe grade

CHanging roles

Due to the skyrocketing cost of healthcare in general, nurses are becoming more involved in a patient’s primary care.

“As advanced practice providers of healthcare, nurses with master’s and doctoral degrees are able to deliver high quality care to patients in their own individual practice,” Martin says, “as well as work side by side with physicians to provide care in a more cost effective manner.”

deborah martin

Jeremy freer

katherine kenny

“As the major component of hospital rosters, nurses’ salaries account for a significant part of any hospital budget,” Griffin adds. “With financial stresses coming from the economy, from government healthcare program budget cuts and from other areas, nursing is much more tightly controlled.”

A decade ago, nursing shifts were scheduled regardless of room occupancy. Currently, industry experts say those staffing schedules fluctuate based on patient population in each unit.

The other major shift is in the demand for specialized nurses.

Julie Ward, chief nursing officer at St. Joseph’s Hospital and Medical Center, says specialties have nurses working in both the inpatient and outpatient settings.

“We are also exploring roles for nurses to shepherd groups of patients through the maze of care,” Ward says. St. Joseph’s nurses make follow-up phone calls to patients to ensure the patient is safe and able to follow their discharge instructions, Ward says.

Still, the primary evolution of the nursing industry has been in higher education. Gone are the days when nurses were simply bedside attendants. Now, they are replacing the expensive medical doctors and are running their own practices as Family Nurse Practitioners (FNPs) and in other upper level specialties.

Most hospitals are encouraging their nurses to return to school to improve their knowledge base and advance their degrees.

The Robert Wood Johnson Foundation (RWJF) and the Institute of Medicine of the National Academies (IOM) launched a two-year initiative to respond to the need to assess and transform the nursing profession. The IOM appointed a Committee on the RWJF Initiative on the Future of Nursing for the purpose of producing an action-oriented blueprint for the future of nursing. Through its deliberations, the committee developed four key messages:

maggi griffin

ann mcnamara

Julie ward

❤ Nurses should practice to the full extent of their education and training. ❤ Nurses should achieve higher levels of education and training through an improved education system that promotes seamless academic progression. ❤ Nurses should be full partners with physicians and other health care professionals in redesigning health care in the United States. ❤ Effective workforce planning and policy making require better data collection and information infrastructure.

“We are encouraging our nurses to return to school to advance their degree,” Martin says. “Patients are much more complex in our hospitals, as well as in the home and our communities. As noted by the IOM, nurses need to have higher levels of education to manage these complexities in all settings where nurses practice. Advanced degrees are now required for our upper level nursing managers.”

Tucson Medical Center has been a valued community resource for seven decades.

Now, well into the 21st century, TMC is concluding a campus-wide improvement project to further enhance patient care.

Already complete are the expanded, all-private facilities at TMC for Children and the Mom/Baby maternity unit. New roads, walkways and parking facilities are in place. TMC’s new electronic medical record system is among the most advanced in the nation. And at last, the final phase, the four-story Orthopaedic & Surgical Tower, is ready for service May 2013 – employing advanced technologies, efficient processes and superior surgical teamwork to serve the needs of our community at the highest level possible.

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Choose Well

AB | May-June 2013立 25

COMMUNITy IMPACT hONORS

FIRST ANNUAL

COMMUNITY IMPACT HONORS

Az Business honors companies and nonprofit organizations that are making our communities better places to live and work

— CORPORATE SPOTLIGHTS —

APS

The health of APS is directly tied to the health of the communities the company serves. For this reason, APS and its employees strategically invest time, energy and resources. In 2012, APS corporate giving totaled $8.3 million with employees logging a total of 133 thousand volunteer hours. hIGhLIGhTS: With the Arizona Diamondbacks and Aaron Hill, APS recently built Aaron Hill Field, a youth baseball field located in downtown Parker, AZ. It is the 29th youth baseball/softball field APS and the D-backs have built or refurbished across the state. APS employees contribute more than $4 million to the United Way annually, which includes matching funds from APS of 50 cents for every dollar donated by each employee and retirees.

GOAL: To create a sustainable energy future for Arizona, which includes supporting communities and non-profit organizations.

Photo: the arizona diamondbacks’ aaron Hill helps dedicate aaron Hill field in Parker.

Apollo Group

Apollo Group, parent company of University of Phoenix, has been dedicated to the community since 1981. Their national contributions for 2012 included: scholarship donations that totaled $1,760,094; more than 80,000 hours of volunteer service across the United States; in-kind giving; and local Phoenix partnerships with Boys & Girls Club of Metropolitan Phoenix, Everybody Wins!

Arizona, Teach for America – Arizona, Junior Achievement Arizona, Valley of The Sun United Way and Keep Phoenix Beautiful, just to name a few. hIGhLIGhT: In 2012, Apollo Group was recognized as one of America’s Top 50 community-minded companies by Bloomberg Businessweek and Businessweek.com.

GOAL: Apollo Group is expanding the career exploration and postgraduation planning process to bring a holistic approach to education, and they strive to help fill jobs in America today by creating an educated workforce that will prosper well into the future.

26 AB | May-June 2013

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COMMUNITy IMPACT hONORS — CORPORATE SPOTLIGHTS —

Basha’s

Basha’s has created what it likes to refer to as a legacy of giving. As a privately owned and independently operated company, Bashas’ has the sophistication of a major corporation, but the sensitivity of a family business. Dozens of Arizona organizations have benefited from Basha’s generosity through their employees and their customers. The company has been concentrating its efforts to especially contribute to community causes that address education, hunger, family and children. hIGhLIGhT: The number of frozen turkeys donated at Basha’s to St. Vincent de Paul each year on Turkey Tuesday, the nation’s largest one-day turkey drive, is astounding — more than 20,000 frozen birds are donated in less than 24 hours by so many generous Arizonans so that local families in need can enjoy a Thanksgiving meal.

IMPACT: Since the company’s inception in 1932, Basha’s has given back more than $100 million to the communities it serves.

Freeport McMoRan

Freeport McMoRan is focused on partnering with organizations to cultivate sustainable benefits that contribute to the enduring success of the communities where it operates, assisting communities in self-defining priority issues, catalyzing discussions on possible solutions, forging collaborations and offering opportunities for funding that contribute to a community’s long-term success. FMI is committed to sustainable development in its operating communities, building local community capacity and societal trust through stakeholder engagement and improving environmental performance.

hIGhLIGhT: Bloomberg’s National Conference on Citizenship and Points of Light named FreeportMcMoRan to “The Civic 50” ranking of the top 50 community-minded corporations.

GOAL: FMI’s focus for the future is “Transforming Tomorrow Together” – helping create sustainable, quality communities through environmental stewardship and robust stakeholder engagement as it produces metals critical to modern society and create quality jobs.

Photo: “our neighbor’s farm” provides fresh produce for the food bank in safford.

Medtronic

As a medical technology company, Medtronic employees are dedicated to “alleviating pain, restoring health and extending life” while they collectively “maintain good citizenship as a company.” In Arizona, employees not only work on life-saving devices, they are highly engaged in the community through volunteerism and giving. In 2011, Medtronic employees logged more than 4,500 volunteer hours.

IMPACT: The Medtronic Foundation is committed to strategic philanthropy, with the majority of grant programs aligning with the company’s commitment to improve access to quality healthcare. Since 2010, the Medtronic Foundation has committed more than $7.5 million in grants to improve patient care for noncommunicable diseases, such as heart disease and diabetes.

GOAL: Now and in coming years, Medtronic’s efforts will be focused on expanding global access to chronic disease care, maximizing the number of people worldwide who can benefit from medical technology. The company plans to do this both through business and through philanthropy.

Sundt

Sundt Construction is one of the country’s largest and most respected general contractors. Known nationally for its innovative approach to construction services, the firm is currently ranked the 58th largest construction company in the United States by ENR, the industry’s principal trade magazine.

IMPACT: The Sundt Foundation was created in 1999 as a way for employees to give back to their communities. This 501 (c) 3 charitable organization is run by employee volunteers, who participate on the board, review grants, etc. It receives donations from employees, usually by payroll deduction, which are matched by the company. This money is used for grants to local non-profits. hIGhLIGhT: Since its founding, the Sundt Foundation has already given more than $2 million to charities in the Phoenix area, and their current goal is give a total of $250,000 to charities in the Phoenix area during 2013.

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— NON-PROFITS —

Arizona School Choice Trust

The organization’s mission is to provide hope and opportunity to low-income children as well as children who are also disabled and/or displaced by awarding tuition scholarships to attend private elementary and secondary schools. They provide quality educational options to students who would not otherwise have a choice to attend a better school. hIGhLIGhT: This school year, ASCT doubled its number of scholarships awarded to students statewide.

ASCT has 12 new corporate donors this year alone, and are encouraging companies that do business in Arizona to use their tax liability to help students succeed through the tax credit program.

GOAL: Arizona School Choice Trust hopes to expand their reach in the business community - encouraging more companies to take advantage of the corporate tax credit, and exposing more individuals to the tax credit opportunity as well. Their goal is to exhaust the scholarship waiting list, so that every student who applies receives a scholarship!

Boys & Girls Clubs of Greater Scottsdale

Banner Health Foundation

Banner Health Foundation secures and stewards philanthropic gifts to support Banner Health – Arizona’s largest nonprofit health care provider.

These gifts support new or expanding patient care services, new technologies, community health education programs, research and more ... all with a goal of building stronger, healthier communities. hIGhLIGhT: With support from volunteer campaign leadership, BHF secured a $5 million gift from the James M. Cox Foundation to establish the Center for Integrative Oncology at Banner MD Anderson Cancer Center.

This center will include individualized prevention, screening and diagnosis programs, rehabilitation and community outreach programs and will be an invaluable community resource for cancer prevention education.

GOAL: BHF will continue to focus efforts on raising funds to support three of Banner Health’s signature service lines – Pediatrics, Oncology and Alzheimer’s – while also raising awareness of Banner’s commitment to every community we serve.

The Boys & Girls Clubs of Greater Scottsdale provides 16,000 Valley children and teenagers with a positive, supervised and fun environment to explore the power of their potential. The Clubs offer more than 100 youth development programs emphasizing five core areas including: the arts; character and leadership development; education and career development; health & life skills; and sports, fitness and recreation. hIGhLIGhT: Its Vestar Branch was chosen as the top Boys & Girls Club in America – the second time in four years a Greater Scottsdale branch took home that honor. With nine branches and 12 outreach sites in Scottsdale, Fountain Hills, Salt River Pima-Maricopa Indian Community, Hualapai Indian Community, Desert Ridge and more, their reach actually extends beyond Scottsdale.

GOAL: Next year, and for many years to come, Boys & Girls Clubs of Greater Scottsdale aims to reach more youth and teens in the communities it serves while maintaining quality youth development programs and services.

Flinn Foundation

The Flinn Foundation aims to improve the quality of life in Arizona for future generations, accomplished by advancing the state’s bioscience sector, offering the Flinn Scholarship for undergraduate studies at an Arizona public university, supporting arts and culture, and strengthening civic leadership through the Arizona Center for Civic Leadership. hIGhLIGhT: Arizona’s Bioscience Roadmap, commissioned by the Flinn Foundation in 2002 as the state’s long-term strategy to build a competitive bioscience sector, recently celebrated its 10th anniversary. Arizona’s bioscience sector added jobs at nearly four times the national rate over the past decade and experienced double-digit job growth during the economic recovery.

GOAL: The Flinn Foundation’s primary goal is to update the Bioscience Roadmap with an emphasis on turning research into jobs and firms while bringing the latest health care innovations to Arizonans.

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COMMUNITy IMPACT hONORS — NON-PROFITS —

Hospice of the Valley

Hospice of the Valley provides compassionate end-of-life care. They support patients and families, and relieve suffering in all realms — physical, emotional and spiritual. Most services are delivered in patients’ homes as HOV serves thousands of families every day throughout central Arizona. Hospice of the Valley also cares for people with late-stage chronic illness who aren’t ready for hospice now but could be within two years. hIGhLIGhT: No one is ever turned away from Hospice of the Valley because of lack of insurance or financial circumstance. Charity care to patients without insurance or means to pay totaled $15.4 million in 2012, up from $13 million in 2011.

GOAL: The goal of all employees at Hospice of the Valley is to continue broadening the spectrum of palliative care services to bring comfort and dignity throughout the course of serious illness.

Phoenix Suns Charities

Founded in 1988 and celebrating its 25th year, Phoenix Suns Charities is the philanthropic cornerstone of the Phoenix Suns. It was established in order to enhance the lives of Arizona’s children and their families by actively creating and supporting programs in the areas of education, health, and sports and recreation. Throughout the past 25 years, more than $13 million has been contributed to more than 200 Arizona charities. hIGhLIGhT: Suns Charities granted Central High School $500,000 and created “SunsCentral,” a program focused on four factors that impact a student’s likelihood of graduating: success in the classroom, attendance, mentoring and work-study. The Phoenix Suns franchise helps to offset the charity’s expenses, allowing us to grant the maximum amount of dollars back to the community.

GOAL: The future focus of the Phoenix Suns Charities is to continue to give at least $1 million to Arizona kids and their families, as well as to find additional ways of supporting students at Central High School.

Science Foundation Arizona

Arizonans want a strong economy, a good education system and the availability of high-quality, highpaying jobs. Science Foundation Arizona was formed in 2006 to help with exactly that. The foundation invests in scientific and engineering research and makes improvements in the education system to help ensure Arizona’s place in the 21st Century global economy. hIGhLIGhT: Gilbert-based algae technology startup Heliae was created from research SFA initially funded through Arizona State University. It’s now a growing algae technology solutions company with significant commercial potential. Science Foundation Arizona generates a very significant return on research and education investments because of their rigorous performance-driven review process.

GOAL: Science Foundation Arizona aims to continue their successful track record of making strategic and long-lasting investments in research and education that will encourage other states to replicate their proven model to help the nation prosper as a whole.

Southwest Autism Research & Resource Center

The mission of SARRC is to advance research and provide a lifetime of support to individuals with autism and their families. In 2012, SARRC provided more than 1,200 individualized services and research for children, teens and young adults with Autism Spectrum Disorders (ASDs); served nearly 3,000 parents, family members, typical peers and community members; and trained more than 3,300 educational and medical professionals. hIGhLIGhT: In July of 2012, SARRC opened Beneficial Beans Cafe at the Scottsdale Civic Center Library to more than 48,000 patrons per month; creating awareness for autism and SARRC. An individual with autism was employed there as a barista and also purchases the baked goods from the Stuttering King Bakery, a bakery operated by an individual with autism.

GOAL: SARRC’s vision is to increase awareness to underserved populations, enhance services throughout the lifespan and expand our services and trainings using technology to all affected by ASDs. 30 AB | May-June 2013

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Who are Arizona’s voices of leadership?

Find out August 2013 Learn from Arizona’s best business leaders in: • Banking/Finance/Wealth Management • CEOs & CFOs • Commercial & Residential Real Estate • Education • Healthcare • Manufacturing & Technology • Professional/Accounting/Law • Tourism/Entertainment/Sports • Who’s Who and More

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Call 602.277.6045 for advertising and sponsorship opportunities.

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For more information about this must-read 32 AB | May-June 2013

Bankers Benito Almanza

Pamela Conboy

A graduate of Stanford University and the University of Santa Clara, Almanza has been with the bank for 34 years. He currently chairs the Phoenix Aviation Advisory Board and is a member of the Teach for America Arizona Board and Greater Phoenix Leadership.

Biggest challenge: “Realizing that a 13hour work day six to seven days per week was not good for myself or my family and doing something about it. I readjusted my 10-year career plan to balance priorities putting my focus on my family and building my professional skills.”

Best business advice received: “Surround yourself with strong leaders and develop them to replace you.”

Best business advice to offer: “Keep the lines of communication open and be sure that credit for good work is delivered regularly and to the right people.”

Conboy manages 4,200 team members, 340 stores and $24.4 billion in deposits. She sits on numerous boards, including the Greater Phoenix Chamber of Commerce, Valley of the Sun United Way and American Cancer Society’s CEOs Against Cancer.

Best business advice received: “Always put the customer, the team and your community first, and your success will follow. It’s Level 5 leadership from one of my favorite books – ‘Good to Great.’ One of my favorite Wells Fargo leaders modeled it for me to follow.”

Best business advice to offer: “The best way to get promoted is by being GREAT in your current role and master your business knowledge and skills. Another favorite book is “Outliers: The Story of Success.”

Consistency is key to mastery and practice makes perfect. Again, success will follow. One of my favorite quotes is, ‘In search of perfection, you just might catch excellence.’”

Arizona Market President, Bank of America bankofamerica.com

Keith Maio President & CEO, National Bank of Arizona nbarizona.com

Maio joined NB|AZ in 1992, was appointed president in 2001 and CEO in 2005. He also serves on the Zions Bancorporation Executive Management Committee. Maio earned a BBA from the University of New Mexico and is a graduate of the Pacific Coast Banking School.

Best business advice to offer: “Ask yourself what activities you are accomplishing today that support your long term goals. Not a day should go by that does not move you a step closer to your vision for yourself and your organization.”

Greatest accomplishment: “I am very proud and honored that NB|AZ has been selected by Arizonans as the No. 1 bank for 10 of the last 12 years (Ranking Arizona). I believe this is a testament to the power of an organization holding true to its core values and demonstrating a consistent approach to servicing customers each and every day.”

Lead regional president, Wells Fargo Arizona wellsfargo.com

Richard J. Lehmann Founder & chairman, The Biltmore Bank of Arizona biltmorebankaz.com

After being associated with large national and international banks since 1969, Lehmann helped found the Biltmore Bank of Arizona in 2003 with a singular mission: to work with Arizona businesses face-toface, ensuring the bank is an integral part of each client’s growth – and the growth of Arizona’s economy.

Biggest challenge: “In my 44 years in banking, I have never experienced a more severe economic downturn than the past five years – with a disproportionate impact on small, community banks. We overcame it thanks to our team, clients and a 2012 agreement with Grandpoint Capital for a capital investment, enabling us to expand our banking capabilities.”

Best business advice received: “I live by two pieces of advice that apply to any and all industry leaders: always try to hire people who are smarter than you; and always pay attention to the details. After all, the devil is in those details.”

Impact Players Dave Ralston, Chairman & CEO, Bank of Arizona bankofarizona.com

Candace Hunter Wiest, President & CEO,

With more than 30 years of professional experience in the banking industry, Ralston has responsibility for market leadership in Arizona for BOK Financial, a $28 billion financial services company.

Wiest is the founding CEO of WVNB, and was the first female community banker elected as a a director of the Federal Reserve Bank of San Francisco.

AZ BUSINESS LEADERS 2013

West Valley National Bank wvnb.net

VOICES OF LEADERSHIP

annual book, please call 602.277.6045.

AB | May-June 2013Ω 33

TRAVEL

◆ BY MICHAEL GOSSIE

FROM Oz TO AHHHHHHS iconic Hotel del Coronado celebrates 125 years of hosting presidents, princes and celebrities

If you join the thousands of Valley residents who swap the Arizona roast for the California coast this summer, here are five other San Diego experiences to have while you’re visiting:

Craft beer tour

San Diego has burst onto the international beer scene, emerging as America’s craftbeer capital. You can tour Stone Brewing Co., Ballast Point Brewing Co., Alesmith Brewin Co., Green Flash Brewing, and The Lost Abbey. brewhop.com

san diego Zoo

The zoo in Balboa Park houses more than 3,700 animals and is also one of the few zoos in the world that is home to the giant panda. sandiegozoo.org.

seaPort village

The waterfront shopping and dining complex houses more than 70 shops, galleries, and restaurants in an assortment of architectural styles, from Victorian to traditional Mexican. seaportvillage.com

gaslamP Quarter

When visiting San Diego, you would be remiss if you did not wander the Gaslamp Quarter for the the most amazing nightlife, eating, and drinking the city has to offer. gaslamp.org

glorietta baY inn It’s hosted 11 presidents, England’s Prince of Wales, and celebrities like Babe Ruth, Charlie Chaplin, Clark Gable, Marilyn Monroe and Thomas Edison, who oversaw the installation of electric lighting. It’s appeared in iconic productions like “Some Like It Hot” and “I Love Lucy.” Some say it served as the inspiration for author L. Frank Baum’s Emerald City in “The Wizard of Oz.” Now, the Hotel del Coronado, a California treasure that sits on one of the finest beaches in the United States, is celebrating its 125th anniversary.

To commemorate the milestone, “The Del” is the centerpiece of special local events, historic-themed exhibits and guest packages.

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If you decide to escape the heat and hit the beach to help celebrate the Del’s birthday, you can expect to be greeted by a multimillion-dollar renovation that has incorporated sleek furnishings and flat-screened TVs while retaining the classic style of the structure that opened in 1888. Other major enhancements include the Del’s award-winning spa; the family friendly Kidtopia, a beach facility for kids; Vibz, a teen lounge; and 1500 Ocean, the Del’s formal dining room with a breathtaking ocean view.

To learn more about the Hotel Del Coronado, its special anniversary events, or to book a getaway, visit hoteldel.com.

Overlooking the Bay, just one block from Coronado’s beautiful beach, the 11-room historic mansion and 89 contemporary inn rooms and suites combine oldworld charm with modern amenities. gloriettabayinn.com

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DINING

◆ BY MICHAEL GOSSIE

‘THE TASTE’ OF SCOTTSDALE Famed TV chef’s Searsucker delivers energy and innovation to Valley dining scene

H

ere is what is great about Searsucker Scottsdale: Its warehouse-chic interior with distressed furniture, oversized drum lamp shades, exposed ceiling beams, and lumberembellished windows creates a hip and cool environment that works equally well for a girls’ or guys’ night or for a romantic date night.

Located in the expansive lobby of an office building at Camelback and Goldwater in Scottsdale at the west end of Scottsdale Fashion Square, Searsucker is a little off the beaten path of Scottsdale’s must-be-seen-at restaurant clusters.

After a visit to Searsucker, it’s a path you’ll want to follow back to time after time.

Searsucker Scottsdale is the brainchild of Brian Malarkey, a 2009 “Top Chef” finalist and star of ABC’s “The Taste,” where he mentored Khristianne Uy to the victory of the show’s first season. Malarkey out-coached celebrity chefs Anthony Bourdain, Ludo Lefebvre and Nigella Lawson for the win.

But the real winners are Valley diners, who asked Malarkey to open a Valley branch of Searsucker while visiting his highly acclaimed and successful restaurant in San Diego. The requests paid off and now foodists can enjoy and try to interpret Searsucker’s menu, which is divided into categories like Bites, Smalls, Greens, Ocean, Ranch and Farm, each consisting of classic New American dishes with a twist.

The fact that the menu does little to offer real descriptions of the offerings makes it even more of a dining adventure.

Thankfully, the skilled servers at Searsucker efficiently and

36 AB | May-June 2013

expertly answer any questions to guide diners to culinary treasures.

From the “Smalls” part of the menu, two dishes left mouthwatering memories — the Shrimp Spicy + Bacon Grits and Egg + Bacon + Pork Belly. Both dishes were reasonably priced at $12 and the portions were larger than one would expect for an appetizer. The Pork Belly plate — think of it like a Pork Belly Benedict — was our table’s favorite dish of the evening.

For our main courses, we had Mahi TNT from the Ocean portion of the menu, Loin Filet from the Ranch section, and Chicken Jidori and Mushroom Risotto from the Farm. All four dishes were brian malarkey, searsucker scottsdale exceptional, but the risotto was cooked and seasoned so perfectly, it stood out from the rest.

Searsucker brings an energy and edge that may force other Scottsdale restaurants to up their hipness quotient ... and that’s not just a bunch of malarkey.

searsuCker sCottsdale

6900 E. Camelback Rd., Scottsdale 480-664-3777 searsucker.com/scottsdale

Hours: lunch - 11:30 a.m. to 2 p.m. weekdays dinner - 5 to 10 p.m. Sundays through Thursdays 5 to 11 p.m. Fridays and Saturdays sunday brunch - 11:30 a.m. to 2 p.m.

Master-Salt Cellar-AZBusMag-12.10:Layout 1

12/7/10

3:33 PM

Page 1

Fresh Seafood...

Featuring the Valley’s largest selection of fresh fish and seafood • Live Maine lobster, Alaskan King Crab and Yakimono Hawaiian Ahi are just some of the delicacies that make the Salt Cellar Restaurant so popular • Maryland crab cakes, shrimp San Remo on artichoke pasta as well as charcoal broiled fish and Cajun-style blackened seafood are additional menu items you’ll want to try • Quiet, cozy and intimate, the Salt Cellar is a favorite for those who appreciate fine seafood • Don’t miss our popular twin happy hours daily from 4:00pm to 7:00pm and again from 10:00pm to 1:00am.

550 N. Hayden Rd • Scottsdale, AZ (480) 947-1963 • www.saltcellarrestaruant.com Dinner served nightly

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FOODIST AWARDS

◆ BY MICHAEL GOSSIE

RESTAURANTS SERVE SUPER-SIZED IMPACT Dining industry delivers big bucks and a growing number of jobs to Arizona’s economy

T

hink about the celebration that occurred after Arizona was awarded the 2015 Super Bowl.

Much of that excitement came because of the economic impact the Super Bowl will have on the state.

But the restaurant industry in Arizona generates revenue equivalent to hosting two Super Bowls a month.

“Restaurants are critical to Arizona’s visitor industry – and vice versa,” said Debbie Johnson, president and CEO of the Arizona Lodging & Tourism Association. “Arizona attracts more than 37 million visitors annually and dining is the No. 1 activity for those visitors.

So the success of the two industries are defi nitely intertwined.”

Arizona’s restaurant industry, which included 8,885 eating and drinking places of business in 2011, is expected to rake in $10.5 billion in sales this year, according to the National Restaurant Association.

Arizona’s restaurants also employ 262,200 people, roughly 10 percent of the state’s workforce. Th at number is projected to grow 15.9 percent by 2023 to 303,800 - translating into 41,600 new jobs in the industry.

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“While the Recession claimed 500 Arizona restaurants, the industry that was born out of the recession was stronger and more resilient,” said Steve Chucri, president and CEO of the Arizona Restaurant Association. “From 2007 on, Arizona’s industry sales have grown from $7.9 billion to $10.1 billion (in 2012) with extremely modest growth in the hungrier years of 2008-2010.”

debbie Johnson

rachel Pearson

Chucri said Arizona’s rate of restaurant sales growth, while once the top in the nation at 6.2 percent, is starting to fight its way back, growing at a little more than 3 percent each year, boosting this industry’s sales by an estimated $400 million annually.

“I think the restaurant community has stabilized and I sense an increasing

confidence in the community,” said Steven Micheletti, CEO of Z’Tejas Southwestern Grill, which has five locations in Arizona and plans to add two more in the next year. “New restaurants are being built and being opened in interesting parts of the city. There is ongoing collaboration between great entrepreneurs happening, creating some great restaurant experiences. Operators are building

russel owens

steve Chucri

restaurants in all types of buildings, creating really fun dining environments.”

A lot of the growth in Arizona’s restaurant industry is coming from entrepreneurs and chefs who are giving consumers different and unique dining experiences.

“Some of the strengths in Arizona’s restaurant industry include population growth, strong tourism, unmatched

WHAT’S IN STORE?

Here is how experts view the next five years for Arizona’s restaurant industry: RUSSELL OWENS President and Coo fox restaurant Concepts “I can say that I am very bullish on the Arizona market. Fox Restaurant Concepts will open five to eight more restaurants in this market over the next several years including The Henry, LIttle Cleo’s, and a healthy fast casual concept, and we fully expect our existing restaurants to thrive.

However, in order to be successful, we realize we must continue to focus on innovation and delivering the best possible experience.”

STEVE CHUCRI

lifestyle and weather, and access to good produce,” said Russell Owens, president and COO of Fox Restaurant Concepts.

“With all of these factors working together, there is more appeal for great chefs to come to Arizona to offer innovative new restaurants and fresh ideas. I think we are seeing more creativity today than over the last 20 years and this will positively shape the industry in Arizona for years to come.”

That influx of great chefs and innovative ideas has become an economic engine for the tourism industry.

“Scottsdale has seen a growth in chef-driven, independent restaurants, which are fueling our culinary scene,” said Rachel Pearson, vice president of community and government affairs for the Scottsdale Convention & Visitors Bureau. “Not only do our resorts boast award-winning chefs and restaurants, but now you can drive to every corner of Scottsdale and fi nd unique culinary experiences from well-known chefs.”

Not only are many of the new restaurants that are popping up utilizing fresh ideas and concepts, they are also beginning to increasingly rely on local produce and products to help serve their customers.

“Arizona visitors are really looking for a unique and distinct dining experience

President and Ceo arizona restaurant association “We anticipate molecular gastronomy and its nod to modernist cuisine to play a role in unique culinary dishes. People identifying themselves as ‘foodies’ will rise as consumers look at food as more than a dish but an art form. We are looking forward to a robust and growing industry over the next five years and can thank the innovative operators for their part in making that growth possible.”

STEVEN MICHELETTI Ceo Z’tejas southwestern grill “I have learned that my crystal ball is omniscient at best for the next 5 minutes or 5 hours and I get really clouded about the next 5 weeks, but our industry moves in step with the local economy. We improve as it does.

There are some macroeconomic clouds that are casting some shadows like the actual implementation of the Affordable Health Care Act but we’ll have to wait and see. Five-year outlook: cautiously optimistic.”

that they can’t get back home,” Johnson said. “So trends that we’re seeing in both hotel/resort restaurants as well as offsite restaurants include utilizing local ingredients and offering menu items and experiences that provide a taste of the local community.”

Micheletti has seen an increasing shift to supporting local farmers and growers, but the “Local First” trend doesn’t stop there.

“There’s also a growing influence of local crafted beers and wines,” he said. “Guests really are reading menus and asking questions about ingredients and sourcing.

It’s not just about calories anymore.”

In addition to Arizona-grown ingredients,

Chucri said one of the most transcendent trends he sees in the industry is the desire for healthy foods.

“The tendency towards more healthful items for the entire family illustrates that consumers are looking to restaurants for more than an indulgent special occasion meal,” he said. “Restaurants are becoming a part of consumers’ daily lives, an extension of their family. Whether it be a compliment dish for Easter dinner, a post-Little League party, or a gothome-too-late-to-cook family dinner, restaurants have infused themselves into the fabric of families everyday lives ... a trend that is certain to stick around.”

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This ad was generously donated by Stevens Leinweber Construction

FOODIST AWARDS

◆ BY MICHAEL GOSSIE

The best, brightest and most innovative in the dining industry earn honors

The Arizona Restaurant Association’s (ARA) quest to find the culinary standard-bearers that embody the pursuit and the achievement of excellence in Arizona’s food scene resulted in the first winners of the Foodist Awards.

The official awards of the ARA showcase the restaurants, companies and talented people that are the very best in the industry. They are recognized for their superior business acumen, demonstrated leadership and community contributions that help shape the culinary landscape of Arizona.

“We feel strongly that pioneers and high achievers of

Arizona’s restaurant industry deserve this unique recognition,” said Steve Chucri, president and CEO of the ARA. “It’s also a chance for the ARA to recognize local restauranteurs, purveyors and vendors who have distinguished themselves through superior business practices, demonstrated leadership and dedication to the restaurant community and hospitality industry as a whole.”

Here is a look at the winners and the finalists for the first Foodist Awards, who were honored at a reception at the Ritz Carlton on April 25:

FOOD PIONEER winner: kevin binkley, binkley’s Chef Kevin Binkley has a great passion for cooking, fine food and exceptional service. His life goal was to open an award winning restaurant, and his dreams came true with Binkley’s. With the opportunity to work at two of the top 13 restaurants in the nation, his experience makes him quite successful in the industry.

TOP CHEF winner: Justin beckett, beckett’s table Chef Justin Beckett is dedicated to providing his customers with a fantastic dining experience and high quality service. Beckett brings in a majority of his products through local farmers and the culinary community. The effervescent menu of Beckett’s Table changes seasonally, specializing in American comfort foods paired with international wine selections.

finalists Chef Jeremy Pacheco, LON’s at the Hermosa Chef Razz Kamnitzer, Razz’s

GOOD NEIGHBOR winner: rita french, Province, westin downtown While working hard in her profession, Chef Rita French also makes a difference in the community. French works hard to do what’s best for the environment and single handedly changed the way food scraps were disposed in Arizona. She also has a very strong relationship with the Downtown Phoenix Farmer’s Market.

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finalists Wildflower Bread Company Macayo’s Mexican Restaurants

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MIX MASTER MIXOLOGIST OF THE YEAR winner: aaron defeo, Casino del sol The Tucson native is a 12-year veteran in the state’s highest-volume nightclubs and restaurants as a bartender and beverage manager. He has competed in drink competitions on a local, regional, and national level.

His cocktails have won numerous accolades. He was a finalist in the 2013 Bombay Sapphire Most Inspired Bartender competition in Las Vegas.

finalists Richie Moe, Citizen Public House Clint Spotelson, Mabel’s on Main

EMERGING RESTAURANT OF THE YEAR winner: searsucker “Top Chef” finalist and “The Taste” judge Brian Malarkey’s menu features playful dishes that represent his fun personality showcasing New American Classic dishes with creative twists with serious fl avor.

Searsucker also features a striking, but inviting atmosphere.

finalists Crudo St. Francis

OUTSTANDING RESTAURANT INTERIOR DESIGN winner: Culinary dropout at the Yard Th ink of it as a backyard, front porch and kitchen all rolled into one. The Yard, one of Fox Restaurant Concepts’ biggest projects yet, transformed an old motorcycle shop near 7th Street and Bethany Home into the most distinct restaurant environment in Arizona.

finalists Playground Searsucker

FOOD TRUCK winner: short leash Hot dogs Owners Brad and Kat Moore grew tired of the corporate world and wanted to be creative and work for themselves. So in 2010, they launched Short Leash Hot Dogs, a food truck featuring gourmet hot dogs wrapped in a warm naan “bun” that quickly became a food truck favorite throughout the Metro Phoenix area.

finalists Emerson Fry Bread Nogales Hot Dogs

UNIQUELY ARIZONA winner: el Chorro of Paradise valley To honor the Arizona destination dining heritage, El Chorro’s culinary vision features classic cuisine favorites with a Southwestern-inspired influence. The menu offerings center on fresh, seasonal, organic and locally grown ingredients – including herbs and produce from the El Chorro garden.

finalists Elote Café Barrio Café

MULTIPLELOCATION RESTAURANT winner: oregano’s Oregano’s is a Chicago-style pizza restaurant specializing in thin crust, stuffed and pan pizzas. Apart from the great pizzas, Oregano’s has to-die-for salads, unique pasta dishes, great specialty drinks and patio seating. It truly is a great place for the whole family to gather for an event or just an intimate dinner for two.

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finalists Postinos America’s Taco Shop

Congratulations to all the finalists nominated for the

First Annual Foodist Awards!

We appreciate the passion and dedication it takes to become the best.

Sysco Arizona | 611 S. 80th Avenue | Tolleson, AZ. 85353 | www.syscoarizona.com

Casino Del Sol Resort congratulates our very own Resort Mixologist Aaron DeFeo for winning the Arizona Restaurants Association’s coveted FOODIST Award! Aaron’s

mix master mixologist of the year

one-of-a-kind creations are on display at our array of culinary choices; from the finest steaks, chops, and seafood to one-of-a-kind Asian creations, to our unique International Buffet. Casino Del Sol Resort has delicious decisions for you to make.

every day extraordinary

raise your glass… congrats, aaron!

855.sol.play i-19, exit valencia west, 6 miles, tucson, arizona casinodelsol.com

a n e n t e r p r i s e o f t h e pa s c u a yaq u i t r i b e

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REAL ESTATE OUTLOOK

FORECAST IS SUNNY

Metro Phoenix residential land and housing markets have turned the corner and are poised for sustained improvement

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BY STEVE PRITULSKY any are asking why the metro Phoenix housing recovery was so long in the making, and why the rebound currently unfolding is so dramatic. The explanation can be tied to fundamentals of the regional economy and national household formation trends.

eMployMent

Metro Phoenix was one of the top employment growth markets in the nation during the 2003 to 2006 boom years, with peak annual job gains averaging 100,000 per year in both 2005 and 2006. With the onset of the recession, the local economy experienced some of the most dramatic job declines commencing in late 2007.

In all, the metro Phoenix economy lost 228,000 jobs during the Great Recession

between 2008 and 2010. These losses represented 12 percent of the workforce at peak employment in December 2007 when the recession began. In 2011, the metro area saw its first signs of economic recovery, with net employment growth of slightly more than 25,000 jobs. The local economy accelerated in 2012, posting net job gains of 41,500, and with year-overyear gains exceeding 50,000 by year-end.

Most importantly, 2012 proved to be the turning point in the vital construction industry, which represented over 100,000 or 44 percent of total job losses during the recession. By late 2012, the construction sector was consistently adding jobs at more than a 5,000 job year-over-year rate. The most recent consensus forecast for metro Phoenix by ASU’s Blue Chip panel indicates expected job gains across all sectors of over 47,000 in 2013 and accelerating to nearly 58,000 in 2014.

The University of Arizona Economic and Business Research Center concurs with the consensus for 2014, with estimated growth of 56,000 jobs. The EBRC further predicts job gains surging to 72,000 in the Phoenix area by 2015.

population and MiGRation

Reduced migration to Arizona from other regions of the country, coupled with stepped-up immigration enforcement and steep construction and other job losses contributed to a sharp slowing of net inmigration between 2009 and 2011. Recent estimates place the recessionary decline of population growth at 65%, from peak population growth of 140,000 in 2006 to fewer than 50,000 in 2009 and only slightly better in both 2010 and 2011 (each under 60,000). Recently released 2012 population estimates indicate the metro area’s total population surpassed the 4.3

aRizona Real eState: EXPERTS’ FORECAST Jim Belfiore, president, Belfiore Real Estate Consulting: “I expect the residential housing market to continue along the path of recovery in 2013 and 2014. Pent-up demand has eaten away at supply, and will push homebuilders to construct as many homes as they can. In 2013, we should see 63 percent more homes started than in 2012. Growth is expected to continue each year through 2014. My advice to anyone considering a home: Buy now to avoid paying more later.”

John Chadwick, southwest area president, PulteGroup: “The combination of low mortgage rates, increasing rental rates, low inventory levels, and rising new home prices are all signs of a sustainable recovery in the housing market.

We’re focused on bringing consumer inspired home designs to the market and providing homebuyers an unparalleled home buying and ownership experience.”

SEE THE 46 AB | May-June 2013

Andy Warren, president and CEO, Maracay Homes: “The residential real estate market is recovering and Phoenix is a top market, nationally. Our recovery is driven by the fundamentals of job, population growth and affordability. As an Arizona builder, we are committed to this market and see it as a smart investment. Maracay Homes will open 13 new communities in 2013.”

AWARDS ON PAGE 54

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REAL ESTATE OUTLOOK METRO PHOENIX SINGLE FAMILY PERMITS

million mark and slightly faster growth of 67,000 was achieved last year. Although current population growth rates stand at approximately half of the prior cyclical peak, improving population inflows are expected to fuel near-term housing demand growth.

HouSeHold foRMationS

The extremely high foreclosure rates for the past 5 years have made it difficult, if not impossible, for underwater homeowners to trade-up in the market they currently reside or move to new markets. Th is lack of homeowner mobility has hit Sunbelt markets like Florida and Arizona particularly hard. In these markets, a meaningful portion of home purchase activity is discretionary, with a significant component of housing demand driven by seasonal or retirement buyers. Rising home prices across the country, and in particular in Arizona’s key feeder markets in the Northeast

and upper Midwest, are restoring home equity to underwater homeowners.

Pent-up demand from this pool of out-of-state buyers will soon be able to resume the historical migration patterns to the Sunbelt. The severe Recession also exaggerated a household formation effect that comes into play during every business cycle – doubling and un-doubling.

During economic recessions, younger potential households – predominantly singles just exiting college or entering the workforce tend to “double-up” in roommate situations to economize their monthly rent or mortgage payments.

Doubling significantly reduces the rate of household formations during a recession.

The severity of the Great Recession exaggerated the doubling effect nationally and led to reduced housing demand. Socalled “boomerang kids”, high school and college graduates that would normally have launched their careers and moved away from home, returned home jobless

in droves. These factors underscore the fundamental downward shift in housing demand that took place during the recent Recession. With a strengthening economic picture and healthy job gains, roommates and homeward bound working-age children are un-doubling, and will expand household formation rates beyond the expected rate that employment growth would suggest. Metro Phoenix now stands to gain significantly from the reversal of these trends. Near-term job growth in the metro area will have a magnified effect on housing demand across all submarkets and housing sectors.

SinGle-faMily MaRket

Job losses, anemic net in-migration, and greatly reduced household formation rates brought the local home building industry to a near standstill in 2010 and 2011. The two-year average of 7,000 units permitted per year represented a nearly 90 percent decline from more than 61,000 units

aRizona Real eState: EXPERTS’ FORECAST Doug Fulton, CEO, Fulton Homes: “The outlook for 2013 is strong for new home construction — especially with the shortage of MLS properties and the fact that the foreclosure market has dried up. Couple that with the fact that we are running out of finished lots.

Sixty percent of active communities will be sold out by the end of the year. Fulton Homes is well positioned, with a ready supply of move-in ready homes.

Also, Fulton Homes has been proactive in snagging these lots. We have secured 1,800 lots in the last 12 months, which will enable us to meet demand through 2015.”

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Walt Danley, president, Walt Danley Realty: “Our luxury market will continue improving. Short sales and bank-owned properties remain a drag on growth, but are diminishing as values climb — reducing the number of sellers who are short — and banks work through their remaining inventory. An ’05 boom is unlikely, but so is another ’08 crash.”

Patrick Jones, chairman, Scottsdale Area Association of Realtors: “It looks like 2013 is going to be the year the Phoenix real estate market finds its footing. Right now prices are rising at very uneven rates throughout the valley causing a disconnect between many buyers and sellers. I think as we move into 2014, inventory levels will improve and buyers and sellers will feel much more confident about the long-term strength of our market.”

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REAL ESTATE OUTLOOK METRO PHOENIX ANNUAL EMPLOYMENT CHANGE

permitted 5 years prior at the 2005 peak of the housing cycle. Housing activity this low had not been experienced in metro Phoenix since the 1960’s. New home construction at the bottom of the recent cycle was nearly half that achieved during the last significant downturn back in 1989–90.

Reacting to the uptick in employment and pent-up demand, construction activity surged upward by 64% last year, resulting in just fewer than 12,000 new home permits being issued. Despite mounting optimism in the homebuilding industry, last year’s activity was only comparable to the last cycle’s bottom – and there is plenty of room for continued improvement. ASU’s Blue Chip Forecast predicts a 53 percent permit gain in 2013 to over 18,000 new units, and a further 40 percent increase in 2014 to 25,000 units authorized for construction. Beyond 2014, there is the potential for annual permit activity of between 30,000 and 35,000 per year based on historical permit to employment and in-migration ratios.

Home pricing has also displayed a dramatic turnaround over the past four quarters, following the false recovery induced by federal tax credits programs in late 2009 and early 2010. According to the Cromford Report, current average sales price per square foot now exceeds $110, up from under $80 per square foot as recently as last summer. Put into context, however, while pricing is massively lower than the artificial peak of nearly $190 per square foot at the height of the housing boom, it is nearly in-line (unadjusted for infl ation) with pre-boom price levels. Viewed in absolute terms, since mid-year 2011 the median sales price has skyrocketed over 60 percent, through a combination of

appreciation of market transactions and significant reduction of foreclosure-driven distressed sales. Current foreclosure levels, at fewer than 1,000 per month, have retreated to near pre-crisis levels not seen since 2007, and are a fraction of the peak levels of between 4,000 and 5,000 per month seen over the 2008–10 period. As a result, most analysts anticipate double digit house price appreciation in the local market in 2013, with price increases moderating to levels still above infl ation for several years to come.

ReSidential land MaRket

Land transaction volume in metro Phoenix has mushroomed over the past three years, doubling from $700M in 2010 to over $1.4B in 2012. The level of distress in the metro area residential land market has greatly diminished through acquisitions by investors, developers and homebuilders over the past three years.

According to MetroStudy, currently there are approximately 37,000 conventional (non-custom) single family finished lots in the entire market, representing less than a two-year supply at anticipated

levels of construction. Ownership of the finished lot supply is roughly equally divided between investor/developers and homebuilders, with less than 2 percent still in the hands of lenders or distressed owners. Finished lot prices have roughly tripled in the past three years. Although pricing varies significantly by submarket, by way of example, a typical 60-foot wide perimeter suburban subdivision lot currently transacts at more than $60,000, compared to less than $20,000 in 2010. In 2006, at the height of the housing cycle, the same lot would have sold for more than $90,000.

Rental MultifaMily MaRket Over the 2009-11 timeframe the metro Phoenix market had very few new multifamily projects developed. In 2010 and 2011 combined, fewer than 2,500 new units were permitted for construction.

However, renewed job creation and population growth, coupled with the evolution of a true urban lifestyle in the key Central Scottsdale, Tempe, Camelback Corridor and Central Phoenix, rental submarkets have stimulated investment

aRizona Real eState: EXPERTS’ FORECAST K. Michelle Lind, CEO, Arizona Association of Realtors: “The outlook for the residential real estate market for 2013 - 2014 is positive. The median and average sale price for residential properties has increase significantly in both Maricopa and Pima Counties. Interest rates remain extremely low.”

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Michael Orr, director, Center for Real Estate Theory and Practice at the W. P. Carey School of Business at ASU: “Today, the Greater Phoenix residential market is defined by a chronic lack of supply. This is severe at the lower end of the market and has caused prices to rise quickly. This situation does not seem to be changing, and so I expect prices will continue to rise.”

Kuldip Verma, CEO of Vermaland: “We are seeing an improving market and expect it to continue this year and be very strong next year. We’ve seen several cycles in this market and know good things are ahead.”

Steven J. Hilton, chairman and CEO, Meritage Homes: “Meritage’s sales in Arizona grew by 46 percent in 2012, and Phoenix was one of our best markets nationwide. We expect that to continue in 2013 and beyond, as more and more buyers turn to our new homes for the many advantages we offer over most used homes available today.”

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REAL ESTATE OUTLOOK aRizona Real eState: EXPERTS’ FORECAST Malcolm MacEwen, president and chief operating officer, Coldwell Banker Residential Brokerage, Arizona: “With the underpinnings of a strong housing recovery the past 18 months, it is no surprise to learn from The Standard & Poor’s/Case-Shiller 20-city home price index that the largest gain in the nation was in Phoenix, where prices jumped nearly 23 percent in the last year. Arizona prices are being pushed higher by rising sales and a tighter supply of available homes. Arizona’s housing future is bright.”

Elliot Pollack, CEO, Elliott D. Pollack & Company: “The residential market continues to improve. The excess supply is dwindling. While population flows are still way below normal, demand is increasing. The result, higher resale and new home prices, helps the economy because fewer home owners are under water and people feel better off (the wealth effect).

These positive trends should continue over the next year and beyond.”

in new rental projects. Last year construction commenced on nearly 4,000 units, and ASU’s Blue Chip Forecast predicts over 5,500 permits in 2013 and nearly 7,700 units in 2014. The rental multifamily market has seen a flurry of new construction activity in the past 18 months and this trend is likely to continue. There are currently more than 18,000 rental units in the development pipeline across the Valley, including projects in various stages of planning or currently under construction. Most of these projects are concentrated in land-constrained, high-barrier entry submarkets and feature higher density “urban” product.

Gen Y renters are attracted to innovative rental properties in prime locations with urban amenities. Several sizeable privately developed student rental communities coming on-line near ASU have added to the dramatic ramp-up of supply. Despite the recent run-up in new units delivered to the market, rental vacancy rates have fallen from over 10 percent in 2010 and 2011 to under 8 percent by the end of 2012. In large part the vacancy decline can be traced to the single family foreclosure crisis, as former homeowners became renters of both rental single family homes and apartments. Th is downward trend is expected to continue to the mid 6 percent range as demand generated by rising employment levels out paces anticipated supply growth.

With interest rates at historic lows, developers can stabilize a completed project with permanent financing in the low 3 percent range, unheard of during the last up-cycle. Investment yields for high-quality rental apartments in core locations are currently in the sub 5 percent range. Typical development densities in these locations have increased to 35 units to 50 units or more per acre as apartment land prices have soared. Th is infi ll activity will continue to be seen as renter demand for prime infi ll locations intensifies and interest rates remain low. We do foresee a shift of development activity in favor of the suburban West and Southeast Valley submarkets such as Peoria, Gilbert and Chandler over the next few years, where multifamily densities of 25 units per acre range are more typical.

Real eState outlook

The worst is behind the metro Phoenix economy and housing industry. The precipitous employment and housing activity declines and pricing correction that resulted from the housing bust have taken roughly five years to reverse and regain at least part of the lost ground. Land transaction volume and pricing has re-traced much of the recessionary losses, and housing prices are poised to continue to recover for the foreseeable future. The peak house prices of 2005-06 will not likely be seen during this cycle, but the most sought after submarkets may approach those 52 AB | May-June 2013

Matt Widdows, CEO, HomeSmart International: “2013 will be the year of the ‘normal’ transaction recovery.

More traditional sellers will enter the market as they look to upsize and lock in all-time-low interest rates; new homes will see their first good year of starts in a while; and land will continue to get gobbled up in places that were all but abandoned during the Recession. All in all, 2013 will be the continuation of a steady recovery ... as long as our elected officials don’t screw it up.”

levels. The rental multifamily market is and will continue to be an investor focus, with declining vacancies and appreciating rents.

Apartment construction activity is ramping quickly in response to employment-driven demand and will soon be spreading from core urban submarkets to higher quality suburban locations.

Steve Pritulsky has more than 25 years experience in real estate economics, residential real estate development, investment and valuation. Steve has been a member of the Metro Phoenix Blue Chip Forecast Panel for more than 20 years. He is a leader in the Land Advisors Capital Scottsdale-based private equity practice, focused on advisory services and sourcing equity investment in homebuilders, land and lot develop and master planned communities.

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REAL ESTATE COMPANY (SMALL)

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REAL ESTATE COMPANY (LARGE) Matt Widdows

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EDUCATION

BUILDING A SKILL SET Arizona Manufacturers Council makes the case for manufacturing and skills certification

N

BY MARK DOBBINS ot too long ago, Arizona’s five C’s — cattle, cotton, copper, citrus and climate — were the foundations of the state’s economy.

Today, the driving engines are a somewhat different set of C’s: choppers, computer chips, cell structure and cruise missiles. Oh, and climate’s still in there.

Gone are the days of Arizona’s insular economy: we are now part of a global economy, one in which the stakes for our future are high; one in which a student graduating from a Greenlee or Maricopa or Mohave County high school competes for a job against not just his classmates, but high school graduates in China and Germany and India, too.

That’s why education has moved front and center in the discussion of economic development goals for the state of Arizona. Businesses already here, as well as those looking to relocate, must know 56 AB | May-June 2013

that they have at their disposal a willing and able workforce that is trained and prepared for the jobs and careers of the 21st century. Th is skilled workforce will also be the catalyst for future innovation and investments in the state’s major industry sectors – science and technology, aerospace and defense, bioscience and healthcare, and renewable energy - leading to even more economic growth and competitiveness, not just for the state, but also for the nation.

ReQuiRed tRaininG Some of these skills require a four-year college degree; others do not, but what they all require is more rigorous training, world-class knowledge and in-depth skills than have been taught in the past.

Students need to be critical thinkers, good communicators and problem-solvers who can work collaboratively. They must be able to see the connection between what they’re learning in the classroom and what they’re going to experience in the ‘real

world.’ And they must be well-versed in STEM (science, technology, engineering, mathematics) skills.

Along with more than 40 other states, our state Board of Education has adopted the Common Core Standards, grounded in research and evidence, and developed over several years with the input of industry, state superintendents of public instruction and governors nationwide. Now, in 2013, we are well along the way toward implementing in local school districts these consistent, strong benchmarks inspired by the education standards of academically high-performing countries.

Assessment of these new, rigorous K-12 standards in English language arts and math will be conducted for the first time during the 2014-15 school year.

Similarly, during the past six years, the Arizona Skill Standards Commission, with the support of the Arizona Department of Education, Arizona State University and the University of Arizona, has developed end-of-program assessments for the state’s high school career and technical education students to ensure that they are workforce-ready when they graduate, regardless of whether they head immediately into the work world or pursue a post-secondary education.

These assessments are based on industryevaluated standards that lead to industry certifications. EVIT (East Valley Institute

of Technology) and West-MEC (Western Maricopa Education Center) lead the way locally among the state’s Joint Technical Education Districts (JTEDs). And they must be doing something right: Arizona’s CTE programs annually graduate 90 percent of their students. Statewide, the on-time high school graduation rate is a disappointing 76 percent.

SkillS needed Yet, while CTE is having a tremendous impact on the students and partner industries served, and community colleges systems statewide are doing a terrific job delivering post-secondary, workforcedevelopment programs, how is it possible that the Arizona Commerce Authority reports that 6,452 Arizona employers, big and small, had 52,871 job openings in February of this year and that the state’s unemployment rate in January stood at 8 percent? In the case of manufacturing, the industry I represent, 190 employers had more than 1,045 positions go unfilled.

Why? Manufacturing has its challenges,

chief among them a major public perception problem. Just say the word ‘manufacturing,’ and most conjure up pictures of pollution-belching smokestacks of yesteryear’s big-city steel plants. That is hardly today’s reality. Manufacturing has gone high-tech. It’s on the leading edge of innovation and plays a huge role in the U.S. economy, consistently giving back more than is put in. In fact, for every $1 spent in U.S. manufacturing, another $1.48 is added to the economy (Source: National Association of Manufacturers).

At the company I work for, employees with GEDs to PhDs use sophisticated process-control software, electronic calibration devices, financial forecasting and product-scheduling programs every day. They use STEM skills as a matter of rote. Yet because of a pervasive, incorrect perception of manufacturing, jobs in our industry and in the many fields that support us go unfilled.

Manufacturing must do a better job of telling its story, not just to students, but also to parents, school counselors and teachers, the people who have the

most influence with them. While studies show that the American public believes a strong manufacturing industry is critical to our economic prosperity, standard of living and national security, we steer our children away from careers in manufacturing, in favor of industries we see as more stable, with jobs less likely to be shipped overseas. A 2012 Manufacturing Institute survey found that manufacturing ranked fifth out of seven key U.S. industries that people would consider beginning a career in if they were starting today. Further, just 20 percent of the Americans polled believe their local schools encourage students to pursue careers in manufacturing. This is the case despite the fact that those possessing the advanced skills required to work in today’s highly technical manufacturing facilities earn 19 percent more in wages and benefits than those employed in nonmanufacturing fields. In Arizona in 2010, that amounted to more than $76,000/year, according to the National Association of Manufacturers. This is clearly a message we need to get out there.

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EDUCATION

fillinG tHe Gap So why did 1,045 Arizona manufacturing jobs go unfi lled in February? Bottom line: There’s a serious skills gap pervading all stages of today’s advanced manufacturing workplaces, from engineering to skilled production.

And despite all the good things going on in secondary and post-second education, ‘baby boomers’ are retiring and the skills gap is growing. Employers aren’t finding enough of the skilled people they need right here, right now.

What do we do about that? There’s plenty of work to go around. First, employers have to do a better job of articulating what they’re looking for.

They need to invest in their local schools and community workforce development programs. They need to take time out from running their business to get in front of as many people as possible and tell them what they need, or one day they won’t have a business to go back to. “I need employees who can perform this set of skills. I need people who show up to work on time and who take pride in what they do. I need people who are willing to take on challenges and work with others to find solutions. I want people who are interested in careers, not drifting from one entrylevel job to the next.”

We need to develop an educationvalidated, employer-endorsed portfolio of industry skill standards certification, such as the ones developed and piloted

by The Manufacturing Institute. Under the auspices of the Arizona Chamber of Commerce and Industry and the Arizona Manufacturers Council (AMC), I have been part of a group that has been working for the past year to develop such a skills gap-closing portfolio. The interest in the Arizona Skill Standards/ Education Pathways to Career Skills task force has been great, and the 21 education 58 AB | May-June 2013

2013

Manufacturer of the Year Summit and Awards Luncheon WHAT: The Arizona Manufacturers Council will present their annual signature event – the Manufacturer of the Year Summit & Awards Luncheon. In addition to a morning summit – which features a tradeshow and panel discussions on the latest issues of concern for Arizona manufacturers – the council will host an afternoon luncheon recognizing those in the manufacturing industry who advance the state economy by producing superior products and providing high-quality jobs.

WHEN: Friday, May 31, 2013 WHERE: Hyatt Regency Downtown Phoenix, 122 N. 2nd Street, Phoenix INFORMATION: azmanufacturing.com THE SCHEDULE 8:00 a.m. – 9:00 a.m. Summit Registration 9:00 a.m. – 11:30 a.m. Summit PANELS:  Arizona MEP of the Future – Helping Small to Medium Sized Manufacturers Grow Organically  Arizona Skills Certification – The Next Generation of Manufacturing Employees  Federal Issues Affecting Arizona Manufacturing 11:30 a.m. – 12:00 p.m. Tradeshow 11:00 a.m. – 12:00 p.m. Lunch Registration 12:00 p.m. – 13:30 p.m. Luncheon and PROGRAM SPEAKERS INCLUDE:  Arizona Governor Janice K. Brewer  Sonora Governor Guillermo Padrés Elías Awards to be presented include:  Manufacturer of the Year  Outstanding Small / Medium Manufacturer  Excellence in Innovation  Excellence in Sustainability

and business leaders who gather each month bring their best practices and vast knowledge to the table in the effort to provide even more paths to manufacturing skills certification. We expect to present our initial plan at the AMC’s annual Manufacturer of the Year Summit May 31 in Phoenix.

In conjunction with similar efforts in other states, our task force is working to arrive at a set of nationally portable, industry-recognized credentials that validate the skills and competencies needed to be productive and successful in entry-level positions of any manufacturing environment. Our goal is to get to the point that an Arizona manufacturingtrained and certified person can present a skills certificate to an employer anywhere in the U.S., who will a) recognize the endorsement and b) know exactly what that person can do. That employer will know that the investment in hiring this person is a smart one because the applicant will be ready to work from day one.

Is the effort worth it? Absolutely.

Manufacturing generates wealth for the nation and supports millions of American families, raising the standard of living for all Americans.

We can’t afford to wait any longer: It’s time to educate and train this nation’s next generation of manufacturing talent.

Mark Dobbins is senior vice president for SUMCO Phoenix Corporation.

SUMCO Phoenix is the U.S. subsidiary of SUMCO Corporation, an international leader in the production of ultra-pure, defect-free, single-crystal silicon wafers for the global semiconductor industry.

SUMCO operates 12 manufacturing facilities located in Asia and the U.S.

Innovation is not just vital for Intel – it’s the lifeblood of our economy. Intel is proud to invest in cutting-edge research and development, right here in Arizona.

Copyright © 2013 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks of Intel Corporation in the United States and other countries. *Other names and brands may be claimed as the property of others.

AZ-Innovation Ad.indd 1

4/10/13 1:18 PM

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59

MEDICAID EXPANSION

MAKING THE CASE FOR MEDICAID Business and healthcare leaders say expanding coverage will be healthy for the bottom line

BY MICHAEL GOSSIE

G

ov. Jan Brewer may be facing strong opposition from many Republicans who don’t support her Medicaid expansion plan, but many economic experts say Brewer’s plan is the best way to help businesses and lower healthcare costs.

“There is no bigger issue impacting employment and the economy in our state than the restoration of AHCCCS (Arizona Health Care Cost Containment System, the state’s Medicaid program),” said Suzanne Kinney, senior vice president of public policy for the Arizona Chamber of Commerce and Industry. “Th is issue affects every business in the state — large and small — because uncompensated care impacts the health insurance premiums paid by employers. Thousands of good paying jobs could be at risk if Arizona declines the federal funds. Further, access to care would likely be reduced, making Arizona less attractive to new and expanding businesses.”

A letter to Brewer signed by Chambers from the state said, “Reducing the amount of uncompensated care and the number 60 AB | May-June 2013

of uninsured in a fiscally responsible and sustainable manner is a critical issue for chambers of commerce in urban, suburban and rural communities across the state.

Due to cost shifting resulting from uncompensated care, businesses’ costs for covering workers are higher than they otherwise should be, a phenomenon often referred to as the hidden healthcare tax.”

The “hidden healthcare tax” is the undisclosed insurance premium surcharge paid by America’s businesses and insured Americans that subsidizes the uncompensated health care costs of the uninsured.

“Because many health providers are required by law to treat uninsured patients without consideration of their ability to pay, the costs of this care are passed on to their paying customers in the form of increased rates,” said Dennis Dahlen, senior vice president and chief financial officer for Banner Health. “Expanded Medicaid coverage will dramatically decrease the number of uninsured patients and, as a result, this hidden tax on Arizona’s businesses.”

Businesses pay a hidden healthcare tax of almost $2,000 per family policy when the uninsured seek care in hospital

emergency rooms, Kinney said. When a patient lacks health insurance and does not have personal funds to pay their hospital bill, the provider must write off the cost. Th is drives up private health insurance rates for employers.

“Restoring AHCCCS coverage will reduce this hidden tax, freeing up employers to invest more in salaries and other core business functions,” Kinney said.

To put it into perspective, Kinney said the healthcare industry has sustained millions of dollars in budget cuts to AHCCCS, resulting in an 8.2 percent increase in uncompensated care for a total of $777 million in 2012.

“Having improved operational efficiencies and cut unnecessary costs, many hospitals are now at a breaking point,” Kinney said. “AHCCCS restoration will enable these employers to retain jobs and continue serving patients at the level communities expect.”

Brewer said her plan, which would extend Medicaid coverage to anyone who made up to 133 percent of the federal poverty line, would add about 300,000 Arizonans to the nearly 1.3 million now receiving AHCCCS coverage. It would also prevent 60,000 childless adults now enrolled in the state

program from losing coverage at the end of the year. The state used to provide coverage for childless adults who made up to 100 percent of the federal poverty line, but discontinued it as a way to cut costs during the economic downturn.

“Since 2011, approximately 150,000 Arizonans have lost healthcare coverage due to state budget reductions for the ‘childless adult’ or Prop 204 population,” Dahlen said. “Without the governor’s Medicaid plan, an additional 60,000 of our citizens — many of them with chronic and expensive medical conditions — will lose coverage at the end of 2013. The resulting increase in the free care provided by our state’s hospitals and other providers has been particularly impactful with approximately 38 percent of the state’s hospitals losing money in the most recent year. Restoration of this coverage will reverse this trend, allowing the state’s health care industry to continue or accelerate investment in its own transformation and be a significant contributor to the state’s growth.”

To pay for her plan, Brewer will rely on a new hospital bed tax to pay the state’s share of the cost of expanding Medicaid to Arizonans. The proposal gives the director of the state’s Medicaid program the ability to levy what Brewer calls an assessment. It also makes exceptions to the tax for hospitals that don’t treat a significant number of patients without insurance and object to the assessment, including the Mayo Clinic and Scottsdale Healthcare. Despite the proposed

dennis dahlen

Suzanne kinney

hospital bed tax, many healthcare industry leaders back the expansion.

“We’re at an inflection point,” said Dr. Delphis Richardson, vice president of the Arizona Chapter of the American Academy of Pediatrics. “Choices can be made that will help more children across our state receive care, stave off short- and long-term challenges, and prevent families from going through financial despair.”

If approved in Arizona, the expansion of Medicaid would bring in $8 billion to the state over the next four years. That funding is crucial for rural hospitals that are struggling under the financial burden of caring for the uninsured who seek treatment in their emergency rooms, experts said.

“At the very least, (the expansion of Medicaid) will reduce the cost inflation in employer-sponsored coverage by removing a significant driver of annual price increases,” Dahlen said. “Thinking more broadly, if we — the healthcare industry — are successful in changing the way we

dr. delphis Richardson

Gov. Jan Brewer

deliver healthcare — greater transparency, greater involvement of consumers in their own care, greater coordination between providers and elimination of duplication — consumers will see a much more convenient and cost-effective delivery system. That is only possible if providers have the resources to invest in the necessary new tools and clinical redesign.”

Beyond gaining control of healthcare costs and insurance premiums, experts believe AHCCCS restoration will have a major and positive impact on Arizona’s overall economy.

“Hospitals are a key component of Arizona’s burgeoning biosciences sector, which offers great promise for our economic future and for patient care,” Kinney said. “Already, hospitals are a significant employer accounting for almost 84,000 direct jobs, each of which supports at least two additional jobs in other industry sectors. Restoring AHCCCS means that we can keep these good paying jobs and grow more in the future.”

Understanding AHCCCS Q. What is AHCCCS? A: The Arizona Health Care Cost Containment System (AHCCCS) is Arizona’s version of Medicaid. It was the final Medicaid program to be enacted in the United States, and was, therefore, able to build upon the lessons learned in other states in order to develop some of the best practices in the country. AHCCCS marked its 30th anniversary in 2012 and currently covers 1.26 million Arizonans.

Q. What populations are covered under AHCCCS? A: The federal government sets minimum coverage standards for each category of beneficiary. Arizona has chosen to

provide a higher level of coverage for certain populations in order to reduce the number of uninsured. Eligibility for each population is based on income as a percentage of the federal poverty level (FPL). Currently, for a single person the FPL is $11,170. For a family of four it is $23,050.

Q. What is FMAP? A: FMAP stands for Federal Medical Assistance Percentage and refers to the portion of Medicaid costs borne by the federal government. For every dollar the state contributes to AHCCCS, the federal government contributes two or

more dollars.

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Trendsetters

HEALTHCARE | ENERGY | AEROSPACE | TECHNOLOGY

HEALTHCARE | ENERGY | AEROSPACE | TECHNOLOGY

uniVeRSity of aRizona canceR centeR The latest project for the Phoenix Biomedical Campus, which includes the UA College of Medicine – Phoenix and the Translational Genomics Research Institute, the 220,000-square-foot, five-story, $100 million facility will offer comprehensive cancer services when it opens in 2015. “The University of Arizona Cancer Center and the College of Medicine will make Downtown Phoenix a worldclass center for medical innovation and care,” Phoenix Mayor Greg Stanton said.

“Not only will the UACC be an economic engine for our city and state, contributing to our downtown urban core, but we’ll also be on the forefront of cancer care and finding the cure.”

BaRRow neuRoloGical inStitute Barrow’s Muhammad Ali Parkinson Center has launched a new clinic aimed at streamlining the process for the growing number of patients who are potential candidates for Deep Brain Stimulation (DBS), a surgical treatment involving the implantation of a medical device called a “brain pacemaker,” which sends electrical impulses to specific parts of the brain. DBS in select brain regions has provided remarkable therapeutic benefits for otherwise treatment-resistant movement and affective disorders such as Parkinson’s disease, tremor and dystonia.

Ventana Medical SySteMS, inc.

Ventana, a member of the Roche Group, innovates and manufactures instruments and reagents that automate tissue processing and slide staining for cancer diagnostics. Led by CEO Mara Aspinal, Ventana is driving personalized healthcare through accelerated drug discovery and the development of companion diagnostics to identify the patients most likely to respond favorably to specific therapies.

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iMpact playeRS

 Cold Plasma Medical Technologies, Inc. has developed a device and method known as Harmonic Cold Plasma that helps eradicate bacteria, fungi, and viruses related to infections in wounds, burns, and surgical sites.  BioInspire is a partnership between BioAccel, Plaza Companies, and the City of Peoria that provides capital and space for up-and-coming companies to focus on the challenges of commercializing medical devices.  Researchers at the Translational Genomics Research Institute (TGen) are unraveling the genetic components of common and complex diseases, which will help patients with cancer, neurological disorders and diabetes.  Sanofi, a pharmaceutical company with a research facility in Oro Valley, stands at the leading edge of drug research with more than 60 drugs in its research pipeline and an expected 17 new products that have the potential to reach the market by 2015.  Cancer Treatment Centers of America at Western Regional Medical Center increased its emphasis on research when it hired Dr. Glen J. Weiss as director of clinical research. Weiss previously led the Lung Cancer Unit of the Cancer and Cell Biology Division at TGen.

HEALTHCARE | ENERGY | AEROSPACE | TECHNOLOGY

HEALTHCARE | ENERGY | AEROSPACE | TECHNOLOGY

apS Arizona Public Service Company has been recognized as one of the top 10 electric utilities in North America for energy innovation according to GreenTech Media and GTM Research, a leading source for clean energy news, analysis and trade events. Among its energy innovation projects, APS is testing an energy storage system that is the size of a shipping container and can generate the equivalent power output of 1,200 hybrid cars. Eventually, the system will support a solar power plant and help to get more renewable energy generation onto the grid.

iMpact playeRS

Salt River Project (SRP) and SunPower Corp. built a 1-megawatt solar photovoltaic power plant at Arizona State University’s Polytechnic campus. It is the first commercial deployment of SunPower C7 Tracker technology, a solar photovoltaic tracking system that concentrates the sun’s power seven times.

SRp SRP has a long-term view of sustainability initiatives as demonstrated by its programs and services, including using renewable technologies to produce cleaner power, implementing changes to improve operations, and assisting customers in increasing their energy efficiency. SRP’s Board of Directors set a goal of 20 percent of retail sales to be met through sustainable resources by fiscal year 2020. As of the end of fiscal year 2012, SRP achieved more than 9 percent of its retail sales from sustainable resources by expanding its energy portfolio through a variety of resources including solar, wind, biomass, geothermal and hydroelectricity.

fiRSt SolaR Tempe-based First Solar Inc., the world’s biggest maker of thin-film solar panels, set a new world record this year for cadmium-telluride (CdTe) photovoltaic (PV) solar cell conversion efficiency, achieving 18.7 percent cell efficiency in tests confirmed by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL). The record-setting cell used processes and materials — including the glass substrate — that are designed for commercial-scale manufacturing.

 EnviroMission Ltd. plans to build a 2,600-foot-tall tower in La Paz County that uses solar energy to heat air beneath a large translucent collector (greenhouse) that in turn creates a constant flow of air to drive turbines.  ASU scientists are developing cyanobacteria and algae as sources of environmentally friendly fuel that is produced by solar energy conversion.  Ecotality Inc., a leader in clean electric storage technologies, is in the midst of creating one of the largest electric vehicle charging infrastructure projects in the U.S.  SOLON Corporation, which has corporate offices in Tucson and Phoenix, is one of the largest providers of turnkey solar power plant services in the United States and recently expanded across several growing solar markets in California, the Northeast, the Southeast and the Caribbean.  Lewis and Roca attorney Thomas Campbell has been named to the Clean Tech 100 list

by Legal Media Group, which lists the top 100 clean technology and renewable energy attorneys practicing in the industry today.  Surprise’s Skyway Business Park has turned into a solar hub, becoming home to both RioGlass Solar and Gestamp Solar Steel.

Rioglass manufactures reflector components for solar thermal power plants and Gestamp supplies steel needed to build solar facilities.

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In Arizona, we kick the future into high gear. So do our visionary entrepreneurs, turning ideas into innovation, igniting startups and expansions. Our state is in the top tier for job growth. We’re a Best State for Business. Our renowned universities lead in science, engineering and aerospace. Arizona’s undisputed top-line priority is supporting and backing business. Icons Intel, Avnet, Boeing, Mayo Clinic, Banner, General Dynamics – and thousands of others – thrive here. Our aggressive pro-business policies and pro-growth legislation continue to lead the nation.

Simply put, our state leads the pack. If you’re looking to start up or expand, we can help. Because when it comes to success, Arizona is all business.

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65

Trendsetters

HEALTHCARE | ENERGY | AEROSPACE | TECHNOLOGY

HEALTHCARE | ENERGY | AEROSPACE | TECHNOLOGY

eMBRy Riddle aeRonautical uniVeRSity Embry-Riddle Aeronautical University is the world’s largest, fully accredited university specializing in aviation and aerospace and is also a major research center in partnership with the aerospace industry, other universities and government agencies. This fall, students in Embry-Riddle’s flight programs in Prescott will receive training in sophisticated motion-based full-flight simulators in preparation for new Federal Aviation Administration training requirements.

iMpact playeRS

Honeywell aeRoSpace Phoenix-based Honeywell Aerospace is the largest manufacturer of aircraft engines and avionics as well as a producer of auxiliary power units (APUs) and other aviation products. It generates approximately $10 billion in annual revenue from a 50/50 mix of commercial and defense contracts. Thousands of Honeywell Aerospace products and services are found on virtually every commercial, defense and space aircraft worldwide. As a community leader, Honeywell has made a difference in STEM education through its award-winning and extensive corporate citizen initiative, Honeywell Hometown Solutions.

RaytHeon MiSSile SySteMS Raytheon Missile Systems is headquartered in Tucson and employs more than 11,900 in Arizona. RMS designs, develops, and produces missile systems for U.S. and allied forces, including air-to-air, strike, naval weapon systems, land combat missiles, guided projectiles, exoatmospheric kill vehicles, and directed energy weapons. In April, the company was awarded a $155.6 million contract to manufacture Block 2 Rolling Airframe missiles for the German navy, the largest single RAM award by Germany. “It complements the $100 million RAM Block 2 production contracts with the U.S. Navy signed in 2012 and follows our company’s 11 critical Block 2 development test flights,” said Dr. Taylor W. Lawrence, president of Raytheon Missile Systems.

66 AB | May-June 2013

 Defense budget cuts haven’t impacted Boeing, which has a manufacturing plant next to Falcon Field in Mesa. The company has received a $41 million order for Apache helicopter work.  This year, General Dynamics C4 Systems successfully completed critical ground system modifications and technology updates needed to support the mission of NASA’s three nextgeneration Tracking and Data Relay Satellites (TDRS).  Lockheed Martin, which employs about 800 people at its facility in Goodyear, develops highly advanced sensors, radar and intelligence systems for the U.S. military and intelligence agencies.  Tucson-based Paragon Space Development Systems has been contracted to do a conceptual design study as the first step towards developing life support and space suit systems for the Mars One mission, a bold step toward the goal of establishing a human settlement on Mars.  Vicki Panhuise, who retired from Honeywell Aerospace after 30 years in multiple roles in engineering, program management, operations and business leadership, is chairman of the Arizona Aerospace and Defense Commission.

HEALTHCARE | ENERGY | AEROSPACE | TECHNOLOGY

HEALTHCARE | ENERGY | AEROSPACE | TECHNOLOGY

GeneRal MotoRS General Motors’ new IT innovation center planned for Chandler will mean 1,000 new jobs in Metro Phoenix, but the work there will have a global reach. The technology to be developed will touch every facet of the automaker’s business, from marketing and sales to manufacturing and engineering, said Randy Mott, GM’s chief information officer. He said GM chose Chandler because of the pool of talented IT workers and because Arizona’s universities offer a steady stream of new graduates.

iMpact playeRS  Construction is expected to start during the second quarter of 2013 for the third office building of SkySong, The ASU Innovation Center that is projected to generate more than $9.3 billion in economic growth over the next 30 years.

intel Intel employs about 11,000 workers in Arizona and plays a key role in the state’s economy, with new facilities opening this year. Intel is investing $5 billion in a new factory in Chandler, as well as $300 million in a new research-and-development facility and billions to revamp its two existing Chandler fabrication facilities.

The world’s largest computer chip maker consistently brings high-paying jobs to the Phoenix area and improves the technology used to power computer servers, smartphones and other devices.

infuSionSoft Infusionsoft provides sales and marketing software for small businesses with 25 or fewer employees. Recognized as one of The Fastest Growing Companies in North America (Deloitte’s 2012 Technology Fast 500), Infusionsoft has secured more than 13,500 customers with more than 50,000 users to date. Staffed by 390 employees, Infusionsoft expects to grow to more than 1,000 employees by 2016. The company is planning to make an even bigger impact after securing $54 million in capital to “go for it,” said CEO Clate Mask.

 IO, the leading provider of next-generation modular data center technology and services, was the recipient of the Pioneering Award at the 2012 Governor’s Celebration of Innovation, the highest honor given at the annual event.  Scottsdale-based Tallwave, founded in 2010 by former senior executives from Google, Yahoo!, Microsoft, and iCrossing, is a lean business accelerator and venture management firm specializing in validating, commercializing and scaling emerging technology and digital media ventures.  Scottsdale-based domain name registrar GoDaddy continues to innovate as it starts to shift its focus toward growth in mobile and international markets. CEO Blake Irving expects 50 percent of Internet traffic to come from mobile devices within five years.  The University of Advancing Technology in Tempe is an urban campus that gathers digital technology mavens and develops them into top technology executives, master programmers, robotic engineers, and other innovators for entertainment and government animation applications.

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READY FOR A

CLOSE-UP Arizona Small Business Association CEO leads organization out of the Recession

BY MICHAEL GOSSIE

68 AB | May-June 2013

R

ick Murray followed an eclectic path to becoming chief executive officer of the Arizona Small Business Association in February of 2012.

After college, he worked as a broadcast news photographer before starting a small advertising agency and production company, which grew into a sports production company before he ended up back in broadcast news, this time in front of the camera as a business and education reporter.

The bonds he developed in journalism led to jobs heading up the community and government relations department for the Albuquerque Public Schools, leading the New Mexico State Fair, working as the executive director of the New Mexico Dental Association, and then growing the Arizona Dental Association nearly $2 million by developing relationships with businesses for mutual success.

Az Business caught up with Murray to talk about small business in Arizona.

Az Business: What have you learned in your first year as CEO of ASBA? Rick Murray: The thing that has surprised me the most is how little the business community knows about the Arizona Small Business Association. We have estimated there are nearly 400,000 small businesses in Arizona. Only 11,000 of them have discovered the tremendous value of membership through discounted products and services like office products, shipping, credit card processing, and health and dental insurance, just to name a few. Businesses are saving thousands of dollars a year using our endorsed programs. These are real dollars that goes back into the pockets of hard-working business owners. We are sort of the AAA of small business. We understand that small business owners rarely have a chance to come up for air so we need to do a better job of reaching out to them and communicating the value of the Arizona Small Business Association.

ENTERPRISE BUSINESS AWARDS LUNCHEON WHAT: The Arizona Small Business Association celebrates its 40th Anniversary with inaugural conference and the 20th Annual Enterprise Awards Luncheon featuring a panel of leading Arizona entrepreneurs, including Billy Malkovich, CEO of Mountainside Fitness; Rich Rector, president of Realty Executives International; and Ann Siner, owner of My Sister’s Closet.

WHEN: Thursday, May 16 WHERE: The Phoenician Resort – Camelback Ballroom. 6000 E. Camelback Road, Scottsdale, 85251 REGISTER: azsmallbizcon.com or call (602) 306-4000

AB: What are ASBA’s legislative priorities for 2013?

RM: We knew coming into this legislative session that reform of the Transaction Privilege Tax (TPT), Arizona’s way of collecting sales tax, was going to be a major issue which we are strongly advocating for.

It didn’t happen overnight either, much work was done in previous years which has led us up to this point and we are confident we will have some success this year simplifying our complicated tax code.

Improving the regulatory environment for Arizona businesses has been a long standing priority for ASBA, especially in the area of employer/employee relations.

Unemployment benefits is an area where too many undue burdens have been placed on businesses making it difficult to comply. Bills such as HB 2147 that alleviate some of the burden on businesses and shifts some responsibility on an applicant seeking unemployment benefits, helps level the playing field and makes it easier for businesses to comply with the law. We are also supporting the Governor’s plan to expand Medicaid in Arizona.

AB: Where do small businesses fit into the overall economy of Arizona?

RM: Small business is the economic driver for not only Arizona, but the

entire country. Without small business, there is no economy. Never before has small business played such a pivotal role in an election season as in 2012, with candidates of every political persuasion promising their support of and ties to the small business community. But what really matters is what lawmakers are doing to move our economy forward. Between the ever-present economic uncertainty, the failure of Congress to truly address the deficit and widespread confusion over the Affordable Care Act, there are very few incentives to start or grow a small company. ASBA will continue to encourage government at every level to embrace the entrepreneurial spirit of small business owners who must lead, innovate and make tough decisions every day—always with the bottom line in sight.

AB: What is your five-year economic outlook for the small business sector in Arizona?

RM: Small-business owners today are feeling less optimistic about the outlook of their own firms and the overall U.S. economy than they did this time last year, according to our most recent economic report. Despite modest gains in the number of small businesses projecting U.S. economic expansion, the overwhelming majority, 86 percent, still believe the U.S. economy will be fl at or recessionary in the coming year. Just over one-third (38 percent) anticipate their firms will grow in the coming year — the lowest this indicator has been since the National Small Business Association has began asking this question in December 2009. Additionally, many economists are concerned when the Affordable Care Act is implemented in January, it could add tremendous downward pressure to an already sluggish recovery, wiping out any gains we may have seen. In spite of this, Arizona businesses seem to be ahead of the curve compared to the rest of the country. As we see the credit market lighten up and the real estate market improve, we will see greater consumer confidence which is always a good sign for small business.

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BANKING ON

OPTIMISM Economic recovery is helping small businesses get loans in record numbers

BY MICHAEL GOSSIE

A

common complaint since the financial crisis began was that some of the Wall Street banks that were being bailed out by the federal government weren’t doing enough to help the mom-and-pop shops on Main Street.

“In 2008 when the recession hit, the impact on small business lending was pretty catastrophic,” said Greg Lehmann, managing director of Biltmore Bank of Arizona. “Not only did you have small businesses struggling with lost revenue and weakening balance sheets, but all the banks were retrenching and looking inward. The unique element about the Recession was that it hit every business sector; small business, large businesses, banks, etc.

Nobody was immune to its impact.”

In 2013, small business owners and entrepreneurs have a little more reason for optimism. So far this year, big banks are approving small business loans at the highest rate in more than two years, 72 AB | May-June 2013

according to Biz2Credit, which calculates its monthly Small Business Lending Index using 1,000 loan applications made over its online lending platform.

“With an improving economy, Wells Fargo is growing new lending commitments, providing more dollars to help small businesses stay competitive today and for the long term,” said Jennifer Anderson, business banking manager for Wells Fargo Arizona. “The business owners who see increased demand for their products and services are investing in their businesses now. As business owners become more confident and find more opportunities to grow and improve their businesses, we expect to do more business.”

LOANS BEING MADE Wells Fargo literally puts its money where its mouth is. According to SNL Financial, the bank was the nation’s largest lender to small business in 2012, lending $32.8 billion to small businesses.

But Wells Fargo isn’t alone. If you look

at recent reports, small business lending is up across the board:  Biz2Credit found that big banks — those with more than $10 billion in assets — approved 15.9 percent of the small business loan applications in February 2013, up from 11.7 percent in February 2012. Small bank approval rates have also ticked up — 50.3 percent in February, up from 47.6 percent in February 2012.  Government-guaranteed loans have increased 6 percent year-over-year in fiscal 2013. That represents $9.2 billion, an 18 percent increase over the dollars approved during the same period a year ago.

Approvals in the last two years have set Small Business Administration records.

Despite the positive reports, the general belief is that small businesses aren’t getting loans, which isn’t true, said Dee H. Burton, executive vice president of Alliance Bank of Arizona.

“Yes, small businesses can get loans now,” Burton said. “At Alliance Bank, we have always been actively engaged in lending to small business — and we never

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stopped lending even through the toughest times of the Recession.”

LENDING STANDARDS UNCHANGED What about the perception that lending standards have changed or tightened?

That’s another misperception, bankers said.

“General underwriting guidelines have not really changed over the years,” Burton said. “Unfortunately, the Recession has made it more challenging for businesses to qualify. For most businesses, a reduction in revenue may have resulted in a negative impact on cash flow or resulted in a more leveraged balance sheet. Further, the value of assets which banks often look to take as collateral — equipment, real estate, accounts receivable, etc. — are not at the levels they were pre-Recession. All-inall, these factors have impacted small businesses’ ability to meet the typical standards under which banks underwrite business loans.”

While Lehmann said banks were more willing to bend on some of the fundamentals prior to the Recession, he said banks always look to cash flow, collateral, and capital levels to make a credit decision.

At Wells Fargo, Anderson said lending standards have remained consistent.

Before the bank extends credit, it looks for a business to show:  Steady cash flow. Cash flow is a key indicator of a business’ financial health and its future prospects. When it can show

reliable cash flow, we can see it has the resources to repay new loans.  Debt load is manageable. Banks want to make sure a business has the ability to take on additional debt and is in a strong financial position to manage its debt payments.  Good payment history. Payment history provides an important record of its ability to responsibly pay down debt.

As for lines of credit for small businesses, Ward Hickey, business banking manager for National Bank of Arizona, said, “Small business lines of credit are based on business cash flow and collateral values. As both of these improve for small businesses in Arizona, the underwriting standards will ease and more small business lines of credit will be available.”

Dee H. Burton, executive vice president, Alliance Bank of Arizona: “The key is to have an organized, well thought out business plan and clear financial statements. It says a lot about a business owner’s approach to business when you see they have a well-organized plan and are prepared. Next, business owners should meet personally with a banker to discuss their plans and go over their financing needs. An experienced banker will be able to quickly determine if the 74 AB | May-June 2013

Jennifer Anderson

Dee H. Burton

Ward Hickey

GOOD TIMES AHEAD As the economy in Arizona continues to strengthen, bankers see a better environment for small business.

“We can point to a number of positive signs in small business lending,” Anderson said. “There is more small business activity in our stores, more small businesses are applying for credit, and loan delinquencies continue to decline.”

As businesses shift from survival mode to growth mode, the outlook for lending to small and medium-sized businesses — which Lehmann called “the life blood of the Arizona economy” — continues to be positive, which will help small businesses grow and add workers.

“Arizona will continue to be a growth

IMPROVING YOUR CHANCES Here are some tips for small business owners who are looking to improve their chances of being approved for a small business loan:

Greg Lehmann

business meets underwriting standards, present to the business owner what those standards are and provide some feedback as to options that may be available including conventional and/or possible SBA financing programs.”

Greg Lehmann, managing director, Biltmore Bank of Arizona: “Talk to your banker. If you don’t have a business banker that you trust and can talk to you’re already behind. The key metrics that all banks look at revolve around cash flow, collateral, and capital, and a good business banker should be able to help you sort out how to grow your balance sheet for success.”

state and businesses that have survived this Recession will be able to grow as the state continues to grow,” Burton said.

“We see businesses are now investing in items such as new equipment and new expansion, which had been put on hold during the Recession. Businesses are also taking advantage of the current interest rate environment to fund their expansion.”

Lehmann agreed.

“As the economy continues to heal and grow,” he said, “so will the small businesses of Arizona.”

Ω Ward Hickey, business banking manager, National Bank of Arizona: “A small business owner can improve their chances for obtaining credit in the future by managing business cash flow and creating a strong business balance sheet.

These are primary items financial institutions review when underwriting credit applications.”

Jennifer Anderson, business banking manager for Wells Fargo Arizona: “Be able to thoroughly explain your business to your banker with identified risks to the business, and what plans you have for the future. Also, personal credit scores are important because it shows a prudent and responsible approach to credit obligations.”

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LIMITING THE MAZE OF TAXES Tax reform aims to help small businesses grow and add more workers

BY MICHAEL GOSSIE

D

uring the State of the Union address, President Obama said that tax reform is a key issue for small businesses today. Specifically, the president stressed that many small businesses are overwhelmed with 76 AB | May-June 2013

administrative tasks associated with tax filing and deserve the opportunity to focus on strategic areas of their business that could help them grow and hire more workers.

“For many businesses, the complexity of the tax code is challenging,” said Ron Butler, partner at Ernst & Young in Phoenix. “Small businesses and

entrepreneurs incur significant costs to interpret and apply federal tax rules and regulations and to produce the required information necessary to prepare accurate returns. They would benefit from a system that modernizes and simplifies their tax compliance and reporting obligations.”

According to the National Federation of Independent Business, tax compliance costs are 65 percent higher for small businesses than for big businesses, costing small business owners $18 billion to $19 billion per year. In addition, nearly nine out of ten small businesses rely on outside tax preparers. With about half of the private sector workforce employed by a small business — a total of nearly 60 million Americans — these costs, along with tax rates as high as 44.6 percent, carry a heavy burden for small businesses.

“Record keeping and record retention are probably the most overwhelming administrative tasks (for small businesses),” said Donna Witherwax, tax partner at Grant Thornton in Phoenix. “Not only do they contribute to unproductive costs, they also divert attention from the more important tasks a small business owner should focus on.

Small businesses often lack the resources to fully understand how the tax law affects their business.”

To put the need for reform succinctly: “Tax reform presents an opportunity to achieve tax code simplification and improve our nation’s present fiscal path,” Butler said.

To help put us on a better path, the House Ways and Means Committee released a set of proposals in March that are aimed at reforming tax laws for small businesses. As part of a broader, comprehensive tax reform package that would significantly lower rates for small businesses, the proposal would reform and try to simplify tax compliance for small businesses and provide certainty with respect to the ability of small businesses to recover certain costs immediately.

These include widely supported reforms such as permanent Section 179 expensing and expansion of the “cash accounting” method, amongst other provisions.

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For more information and to RSVP, visit gcu.edu/ceoseries

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“The most important thing for lawmakers to focus on in this tax reform is re-establishing rate equality,” Witherwax said. “That is, making sure that the current tax rate applied to income earned by an active small business that is organized as a partnership, S corporation or sole proprietorship is no higher than the rate applied to income earned by a normal C corporation. Normally, I would say they should focus on making it easier for small businesses to comply by providing simple and direct rules and additional safe harbors, as well as focusing on minimizing the record keeping burden. But this is not a normal tax reform process.”

Witherwax said the tax reform that is currently being discussed in Washington began as a quest to reduce the statutory corporate tax rate in order to address the disadvantage U.S multinationals face in competing with the multinationals of other nations as a result of the U.S. rate.

“There are good reasons to do that,” she said. “But reducing corporate rates alone would disadvantage those active small businesses that operate as partnerships, S corporations or sole proprietorships. Leaving their rate where it is while reducing the rate of their larger C corporation competitors would put these small businesses at a competitive disadvantage. A disadvantage that would be exacerbated if the revenue lost by reducing the corporate rate is offset by changes that eliminate some

of the business tax benefits that small businesses rely on. For these reasons, in this tax reform, rate equality is the most important thing.”

The good new is that the discussion draft released by the House Ways and Means Committee is designed to provide more uniform tax treatment for pass-through businesses such as sole proprietorships, partnerships and S corporations. The draft also includes proposals that would spur investment in equipment needed to grow business operations by providing permanent

“The most important thing for lawmakers to focus on in this tax reform is reestablishing rate equality,” -Donna Witherwax expensing of investments and property; would simplify tax and accounting practices by expanding the use of the simpler “cash accounting” method to businesses with gross receipts of $10 million or less; would provide relief for start-up and organizational costs by establishing a unified deduction for these expenses; and make tax compliance easier for partners and S corporation shareholders by reordering and simplifying the due dates of tax returns for partners and S corporations.

To create reform that’s going to work, experts say, it’s vital that they solicit firsthand feedback.

“Lawmakers should ask small business owners and their tax advisors what changes they want,” said John Hanson, a tax attorney with Sacks Tierney in Phoenix. “ They are best suited to propose worthwhile changes because they are dealing with these issues daily.”

Dave Camp, R-Mich., chairman of the tax-writing House Ways and Means Committee that released the set of proposals aimed at reforming the tax laws for small businesses, said he encourages small business owners and stakeholders to review the discussion draft and to share feedback with their lawmakers and the Ways and Means Committee.

“More Americans get their paycheck from small businesses than any other type of business or government,” Camp said in a statement. “If we really want to strengthen our economy and put more money in the pockets of American workers, we must fi x the Tax Code and how it treats small businesses. In addition to all the complexity these Main Street businesses face, Washington currently taxes them at top rates nearly 10 percentage points higher than their corporate counterparts.

That’s simply unfair to small businesses ...

These are the businesses we see every day, where so many of our friends, family and neighbors work ... They need and deserve a Tax Code that works for them.”

IMPACT OF REFORM

Here is what experts believe will be the long-term impact that tax reform will have on small businesses:

Ron Butler, partner, Ernst & Young: “A broader, comprehensive tax reform package that lowers rates and simplifies tax rules for individuals, small businesses and corporations could be a driving force for economic growth and job creation in the American economy.”

78 AB | May-June 2013

John Hanson, tax attorney, Sacks Tierney: “Tax reform that reduces the compliance burden on small business owners will allow them to invest more resources in their businesses, become more profitable and create more jobs.”

Donna Witherwax, tax partner, Grant Thornton: “It depends on the tax reform we get. If business rate equivalency can be restored, and a more efficient tax code adopted, small business could be a winner.”

Curtis A. Hildt, tax managing partner, Deloitte Tax LLP: “Small businesses will be able to focus their efforts toward business operations instead of weaving their way through a complex tax system.”

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80 AB | May-June 2013

THE GREATER PHOENIX CONVENTION & VISITORS BUREAU

Home of the Super Bowl in 2015

2013 Photos: Greater Phoenix CVB

Published by

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GREATER PHOENIX CONVENTION & VISITORS BUREAU

On the fast track

Sky Train improves travel experience and helps boost business

BY ISABELLE NOVAK

T

he concept originated as an idea to make the travel experience easier and more pleasant for the passenger.

Now, nearly a quartercentury and $1.6 billion later, Phoenix Sky Harbor International Airport has ushered in the era of the PHX Sky Train. Th is electrically powered train

82 AB | May-June 2013

creates a more efficient travel experience for passengers heading to east economy parking, Terminal 4, or the 44th St. and Washington light rail station near the airport. Those connecting from this light rail station will reach Terminal 4 in only five minutes, a drastic improvement from the typical shuttle ride.

Phoenix Sky Harbor Airport Public Information Manager Julie Rodriguez says the Sky Train will provide travelers with added convenience.

“The PHX Sky Train will provide a seamless connection with the light rail, reduce airport roadway congestion and enhance customer service,” Rodriguez says. “Compared with the current shuttle buses, the train will be much easier to access for passengers in wheelchairs, customers with large amounts of luggage and families using strollers.”

Sky Train is the latest upgrade for passengers moving through Sky Harbor, which has grown from a one-terminal airfield serving 3 million people in the early 1970s to a three-terminal international hub that served 40 million

passengers in 2012. Sky Harbor expects to serve 60 million passengers annually by 2030.

With the opening of Sky Train, Southwest and US Airways passengers can also check their bags in early for free at either Sky Train’s 44th Street or East Economy stations, a service that the airport and airlines are paying for to improve efficiency inside the terminals.

According to many travel experts, Sky Harbor is the first airport in the country to offer free remote curbside early bag check.

Sky Train will operate 24 hours a day, every day of the year, and trains are scheduled to depart every three to four minutes. It has already earned Leadership in Energy and Environmental Design (LEED) gold level certification and will provide new amenities for travelers. These include a boarding pass kiosk, pet parks, early bag check, and a cellphone waiting lot for those picking up passengers from

the airport.

Not only is the Sky Train anticipated to improve transportation in the Valley, but also bring new life into surrounding businesses through tourism.

“It will provide much more convenient access between the airport and light rail,” says Rodriguez. “Th is should benefit hotels, restaurants, and other businesses along the light rail route.”

Coast Phoenix Sky Harbor Hotel manager Darlene Heavlin talks about how the Sky Train will have a positive impact on hotels near the airport.

“Yes, we do believe there will be an increase of visitors and convention business for the Valley due to the ease of travel that will now be an option for them,” Heavlin says. “We are very excited about the proximity of the Sky Train to the hotel and believe it will have a positive effect on occupancy.”

Heavlin also predicts positive changes in tourism due to the Sky Train’s connection to the airport and light rail station.

Tourists will no longer face the hassle of shuttle and taxi rides.

“We anticipate the Sky Train to bring

an easiness in travel to the Valley tourism and convention business,” Heavlin says. “The ‘Valley of the sun’ is already a wonderful destination for leisure and convention businesses with the amazing climate, Spring Training, and all the attractions the Valley has to offer, now another travel transportation element just makes it better.”

Like the Sky Train, Heavlin says the Coast Hotel is new to the market and she is excited to have it positioned in a location close to the transportation system. Whether guests want to go downtown for a game, dinner, show, or simply to enjoy a day of leisure, Phoenix will now be more manageable to navigate.

“Getting around in an unfamiliar city is always difficult, and the Sky Train will make it easier,” Heavlin says.

Construction of the Sky Train didn’t end on opening day. Plans for the Sky Train to expand to Terminal 1, Terminal 2, and the rental car return by early 2015 are already set into motion. Soon, all travelers flying into Sky Harbor will be able to enjoy a more streamlined transportation experience in Phoenix.

BY THE NUMBERS $1.6 billion Cost of the project

5 minutes

Time it will take to get from Metro light-rail system to Terminal 4

2.5 million Number of passengers expected to ride the first year

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84 AB | May-June 2013

THIS IS PHOENIX. Somewhere, twilight slips past unnoticed. Somewhere, a resort stay will rob you of a mortgage payment.

Somewhere, surfing requires an ocean and watching a movie means sitting in a sticky-floored cineplex.

But not here. Not in Phoenix.

Here, every sunset sends you reaching for your camera. Here, summer makes five-star luxury a three-star expenditure. Here, any resort guest with a swimsuit can hang ten, and families can watch big-screen hits while floating on pool noodles.

This is Phoenix. Why bother with somewhere this summer when you can make memories right here?

Visit. Share. This is #myphx.

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GREATER PHOENIX CONVENTION & VISITORS BUREAU

Barrio Café

DINING TAKES FLIGHT Local restaurants give visitors a great first impression at Sky Harbor Airport

F

BY ISABELLE NOVAK liers in Phoenix can now experience Sky Harbor International Airport’s revamped restaurant scene. Airports are notorious for a limited selection of cuisine, but these changes venture far beyond typical fast food chains and burger joints.

The airport now offers travelers a little taste of Arizona through local favorites like Chelsea’s Kitchen, La Grande Orange and Cartel Coffee Lab. These restaurants are not only destined to provide culinary comfort to travelers looking to unwind, but boost business for local restaurants by expanding their range.

Jennifer Cole of LGO Hospitality talks about new restaurant additions and where to find them in the airport.

“We’ve opened two restaurants in Terminal 4,” Cole says. “Chelsea’s Kitchen 86 AB | May-June 2013

is just before security and La Grande Orange is post security in the D gates.

Both locations are serving our same street side menus and have been very popular.

The sales and numbers in both locations are breaking records for the airport.”

Cole says the skyrocketing sales match the positive responses from travelers who have expressed approval for the updated selection of cuisine.

“The most consistent statement we hear and read in Yelp is, ‘Th is is not your typical airport food!’ That’s the experience we were going for so we’re pleased to see it happen,” Cole says. “But we want to bring more than just great food – we want to bring a great experience. It is just as important to us that our customers get great service, a nice environment, consistency and creative options.”

Cole explains that these changes haven’t just improved the airport, the

restaurants benefit as well. Travelers who experience these restaurants for the fi rst time at the airport are seeking out other locations for more.

“It promotes us more with customers from out of state,” Cole says. “We have people reaching out to us to ask if we have plans to expand to their cities. Th at has been nice to hear from people all over the country.”

The expansion isn’t over. Cole says that LGO Hospitality wants to encourage other local restaurants to make the leap toward airport dining. However, it takes a strategic type of infrastructure to become successful in such a unique environment.

“We are actively seeking to expand to other airports based off the experience that we’ve garnered,” Cole says. “If a business has the resources to support this and goes in understanding that it is a different environment, the upside is worth it.”

More continue to follow in the footsteps of these local restaurants. New restaurants soon to open at Sky Harbor Airport include Lo-Lo’s Chicken and Waffles and Four Peaks Brewing Company.

Chelsea’s Kitchen

Focaccia Fiorentina

Local restaurants land at Sky Harbor Chelsea’s Kitchen Chelsea’s Kitchen is a traditional American roadhouse with an authentic Arizona flair. This gourmet restaurant provides extensive brunch, lunch, and dinner menus, along with a wide selection of cocktails and spirits. Favorites include rib-eye steak tacos and crispy lobster sliders with pancetta and a spicy sauce. They put a Southwestern twist on traditional drinks with concoctions like their prickly pear cactus margarita.

Cartel Coffee Lab The idea of piping hot coffee in the desert might surprise some, but Cartel Coffee Lab has quickly expanded into one of the most-loved coffee shops in the Phoenix area. With a sustainable business model and standards exceeding fair trade, Cartel serves traditional coffee drinks alongside breakfast and lunch items. Their dirty chai latte incorporates a shot of espresso into the sweet and spicy tea.

La Grande Orange Breakfast bar, pizzeria, and grocery in one that brings simple and organic ingredients to Sky Harbor’s dining. Equally revered for their breakfast

selection and pizzeria, La Grande Orange serves up gourmet cuisine for any time of day. Stop by for French pancakes, eggs rancheros, or a guacamole B.L.T.

Barrio Café Arizona knows Mexican food. Since 2002, Barrio Café has provided Phoenix with just that. Arizona natives and faraway travelers alike can now enjoy authentic Mexican cuisine at the airport.

Barrio Café specializes in a variety of burritos, enchiladas, and house sandwiches like the grilled chicken with poblano peppers, onions, goat cheese and cream sauce.

Focaccia Fiorentina Focaccia Fiorentina offers fresh, handcrafted Italian food. Famous for their hand-stretched pizza dough and focaccia bread, this restaurant is a family business that has served downtown Phoenix for over seven years. Without additives or preservatives, Focaccia Fiorentina offers traditional Italian pasta, pizza, calzones and more.

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GREATER PHOENIX CONVENTION & VISITORS BUREAU

The Phoenician

HOME-GROWNGETAWAYS Amazing summer deals let local visitors experience Arizona’s greatest hotels and resorts

T

hey are home to some of the world’s most fantastic pools, luxurious spa treatments, spectacular golf courses and best restaurants. But the best thing about them: You don’t have to take a plane, book a rental car, or waste time in airports to experience them. They are all in our backyard.

Many of Arizona’s award-winning hotels and resorts in Phoenix offer summer deals that are designed especially for local residents who want to get away from it all.

The best part about it? During the summer, the rates are very low.

ARIZONA BILTMORE THE DEAL: Stay at a legendary resort this summer, the Arizona Biltmore, at more than 40 percent off high-season rates. The 2013 summer rates, offered May 19 September 12, start at just $129.

TO BOOK: 800-950-0086 or arizonabiltmore.com COURTYARD BY MARRIOTT SCOTTSDALE SALT RIVER THE DEAL: Salt River’s Sizzling Summer Special lets you save up to 40 percent this summer. The hotel features a resort-like pool, fitness center, and wellequipped guest rooms with mini refrigerators and microwaves. Wi-Fi and parking are complimentary, as well as shuttle service within a 3.5-mile radius.

TO BOOK: 888-236-2427 or courtyardscottsdalesaltriver.com. Enter “BQ7” in the “Corporate/Promotional” box or ask for the “BQ7” rate if calling.

FOUR SEASONS RESORT SCOTTSDALE AT TROON NORTH THE DEAL: With rates beginning at $139 per night this summer, why not experience the best of AAA Five-Diamond luxury at Four Seasons Resort Scottsdale at Troon North. Enjoy casual comfort, renowned personal service, and temperatures up to 10 degrees cooler than the Valley below from the Resort’s scenic position in north Scottsdale.

TO BOOK: 480-513-5039 or fourseasons.com/scottsdale 90 AB | May-June 2013

BY MICHAEL GOSSIE HASSAYAMPA INN THE DEAL: The Stay & Play Package includes one round of golf, golf cart rental, and breakfast in Hassayampa Inn’s restaurant for each person in the room. The package also includes an overnight stay in one of the Inn’s luxurious, historic, and beautiful rooms. Rates from $225 for two people. Upgrade to a suite for $50 more.

TO BOOK: 928-778-9434 or hassayampainn.com HERMOSA INN THE DEAL: Valid from June 1 through September 2 and starting from $169 per night. The Hermosa Inn’s summer package offers all the luxury at nearly half-off, along with two welcome drinks, an upgrade to the next room type (based upon availability), $25 daily credit toward food and beverage, daily poolside cabana rental with afternoon snacks, and free wireless internet TO BOOK: 602-955-8614 or HermosaInn.com HILTON TUCSON EL CONQUISTADOR THE DEAL: Hilton Tucson El Conquistador is offering guests a fun and educational summer getaway with the “Edutainment” event series. Held throughout the summer these exciting and enlightening activities will create lasting memories for the whole family. “Edutainment” offerings include desert discovery tours, visits from desert animals, stargazing, science experiments and more. Rates start at $109 a night during the week and $119 on weekends.

TO BOOK: 520-544-5000 or hiltonelconquistador.com HOTEL VALLEY HO THE DEAL: This summer, book the “Stay 2 Play” package at Hotel Valley Ho, Scottsdale’s downtown resort and spa. Enjoy complimentary drinks upon arrival, a nightly resort credit of $20, daily internet access, free dessert with dinner purchase in ZuZu, 10% off your retail purchase in VH Spa Boutique, $20 off a poolside cabana rental Sunday through Thursday, and for each night you stay, you are entered into the Ultimate Stay 2 Play Give-a-Way. TO BOOK: 480-248-2000 or hotelvalleyho.com

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GREATER PHOENIX CONVENTION & VISITORS BUREAU

Hotel Valley Ho

HYATT REGENCY SCOTTSDALE RESORT & SPA THE DEAL: The “Splash Into Summer” package is available from May 24 – September 8, 2013. From just $139 per night, guests receive Deluxe Guest Room (50 percent off second room); free dinner for one child with each paying adult (12 or under); kids play free golf, ages 15 and under, when playing with a paying adult; free Camp Hyatt for Kids (ages 3-12, half- or full-day programs offered daily); and guests can splash into the 2.5-acre water extravaganza.

TO BOOK: 480-444-1234 or scottsdale.hyatt.com. Reference offer code SPLSHS

treat yourself in May. The deal is $190 per person and includes choice of one of Montelucia’s fitness classes, including yoga options, circuit training, cycle and circuit, rock the core and many other options suited for any fitness level; 50-minute body scrub of your choice with the option of Joyambrosia Body Polish, Cranberry Orange Summer Body Glow, or Montelucia’s Custom Men’s Body Scrub; a spray tan following your day of fitness and skin prep; and lunch credit on Joya Terrace TO BOOK: montelucia.com/grown-up-spring-break

JW MARRIOTT CAMELBACK INN RESORT & SPA THE DEAL: Camelback Inn’s 2014 Concession Package offers 40,000 square feet of flexible meeting space in the heart of the cactus-studded Sonoran Desert. This year, when groups book by July 31 for a 2014 arrival, they can choose a variety of services and discounts from the Concession Pick List (based on total room nights booked). The list of choices includes complimentary Spa Fitness Center access, complimentary spa services, $50 resort credit per room, and more.

TO BOOK: camelbackinn.com

POINTE HILTON SQUAW PEAK RESORT THE DEAL: With summer rates starting from $109 per night, the all-suite Pointe Hilton Squaw Peak Resort features the River Ranch water park with a waterslide, lazy river and putt putt golf. Throughout the summer, the resort offers complimentary activities, including dive-in movies, water games, arts and crafts and more. Book from May 19 through Aug. 31 and stay from May 28 to Sept. 7.

TO BOOK: 800-283-9230 or pointehiltonsquawpeak.com. Booking code: OY

JW MARRIOTT DESERT RIDGE RESORT THE DEAL: The Family Fling & Swing package, starting at $149 and available May 17 through Sept. 5, includes a daily $50 resort credit, free golf on Faldo and Palmer championship golf courses (after 3 p.m. day of arrival, 11 a.m. on for remainder of stay), free meals for kids 12 and under, free access to the Family Escape Center, and free resort fee providing free in-room Wi-Fi, complimentary appetizer of dessert daily, free tennis and complimentary self-parking.

TO BOOK: jwdesertridgeresort.com L’AUBERGE DE SEDONA THE DEAL: L’Auberge de Sedona’s summer deal is called “Drop it Like it’s Hot.” The package rates are dependent on the temps in Phoenix in comparison with L’Auberge’s creekside and sycamore tree shaded location. The “Drop it Like it’s Hot” package entices guests to reserve a premiere room at the best available rate, and then at 4 p.m. on the day of check-in, the rate will drop. L’Auberge de Sedona will take the temperature on Oak Creek and compare it to the temperature at Phoenix Sky Harbor Airport. The difference between the two temperatures will be the discounted dollar amount on the the pre-booked room rate.

TO BOOK: lauberge.com MONTELUCIA RESORT & SPA THE DEAL: Montelucia is offering a “Grown-Up Spring Break” spa package to 92 AB | May-June 2013

POINTE HILTON TAPATIO CLIFFS RESORT THE DEAL: Pointe Hilton Tapatio Cliffs Resort has summer rates starting from $89 per night and features all-suite accommodations, the Falls Water Village and Lookout Mountain Golf Club. The resort hosts several complimentary summer activities for guests, including dive-in movies, visits from the local zoo, crafts, water games and more. Book from May 19 through Aug. 31 and stay from May 28 to Sept. 7.

TO BOOK: 800-283-9230 or pointehiltontapatiocliffs.com. Booking code: OY RENAISSANCE PHOENIX DOWNTOWN HOTEL THE DEAL: Stay this summer and enjoy an urban night out with Notes ’N’ Ale. A personal navigator will curate your downtown experience, which will include an Arizona craft beer tasting at Phoenix Ale Brewery; two tickets to live music at the Crescent Ballroom; free parking; and breakfast for two in Marston’s Café. Rates from $199.

TO BOOK: RenaissancePhoenixDowntown.com SAGUARO SCOTTSDALE THE DEAL: The Saguaro Scottsdale, a Joie de Vivre hotel in the heart of Old Town Scottsdale, is home to Distrito, an Iron Chef Jose Garces restaurant. The Picante pool hosts Swim Socials every weekend, as summer rates at the Saguaro dip to as low as $89 a night.

TO BOOK: 480-308-1100 or thesaguaro.com

RATES FROM

119*

$

NIGHTLY

NO DAILY RESORT FEE

FREE WIFI

The pool is hopping, the games are happening, and the entertainment is the Valley’s hottest. The time is now to Play In Style at Talking Stick Resort.

S C O T T S D A L E | 8 7 7. 5 6 3 .5 7 19 | T A L K I N G S T I C K R E S O R T. C O M *Based on availability May 24 – Sept. 8, 2013. Not valid for groups or with any other offer. Locally owned and caringly operated by the Salt River Pima-Maricopa Indian Community. ©2013 Talking Stick Resort

7171-8_TSR_PIS_SmmrRate_AzBsnsMag.indd 1

4/29/13 4:48 PM

JOB #: 7171-8_TSR_PIS_SmmrRate_AzBsnsMag · Client: Talking Stick Resort · Agency: RIESTER · Trim: 7.125" x 4.75" · Bleed: none · Color: CMYK Pub: AZ Business Magazine · Insertion Date: 05/01/13 · Contact: Bill Robbins · brobbins@riester.com

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GREATER PHOENIX CONVENTION & VISITORS BUREAU

Pointe Hilton Squaw Peak Resort

TALKING STICK RESORT THE DEAL: With rates from $119 nightly, there’s no better place to play in style this summer than Talking Stick Resort. Experience exciting gaming, luxurious rooms, rejuvenating spa treatments and outstanding dining. Then head to RELEASE, Scottsdale’s hottest pool parties every Saturday and Sunday from 11 a.m.-6 p.m. all summer long.

TO BOOK: talkingstickresort.com THE BOULDERS RESORT THE DEAL: To escape summer heat, head to the higher ground of The Boulders Resort, where the temperatures are typically10-15 degrees cooler than in the valley. The Truly Boulders Package includes breakfast, 20 percent off services at Waldorf Astoria Spa, and the cost is $189 per night including resort fee, gratuities, internet, and newspaper.

TO BOOK: 480-488-9009 or theboulders.com THE RITZ-CARLTON, DOVE MOUNTAIN THE DEAL: The Summer Returns Package (includes $50 resort credit) is from $199 weekday and from $229 weekend. The Summer Fun Package (includes $100 resort credit) is from $219 weekday and from $249 weekend. Resort activity package includes in-room Internet access; shuttle service to the golf clubhouse and to Cayton’s Restaurant; 24-hour access to the fitness center and the movement studio; use of tennis court and tennis balls; use of mountain bikes; and daily recreation activities which can include guided morning hikes, family board games, bocce ball, badminton and more.

TO BOOK: ritzcarlton.com SHERATON PHOENIX DOWNTOWN HOTEL THE DEAL: Sheraton Phoenix Downtown Hotel brings you “The Downtown Experience – Your Key to the City.” This package includes an overnight stay along with a key to “unlock” special offers or discounts at shops and attractions through the downtown area. This offer will allow guests to explore and discover what downtown Phoenix has to offer.

TO BOOK: sheratonphoenixdowntown.com/keytothecity THE PHOENICIAN THE DEAL: The Phoenician will celebrate its 25th anniversary on Oct. 1, 2013, but the AAA Five Diamond resort is starting the festivities early with the “25th Anniversary Celebration” summer offer: Stay one night at a special summer rate starting at $199, and get the second night for just $25. The deal is available May 94 AB | May-June 2013

30-September 30. The $25 rate available every other night, regardless of length of stay (4th night, 6th night, etc.)

TO BOOK: 480-941-8200 or phoenician.com. Mention rate code OUR25TH THE RITZ-CARLTON, PHOENIX THE DEAL: Summer rates for the Professional Pursuits Package are from $219 per night and includes deluxe accommodations for one night, American breakfast for one in Bistro 24 or through in-room dining, in-room Internet access, overnight valet parking, pressing of up to three garments, shoe shine, and business center services. Summer room rates (non-package rates) begin at $169 (weekends) and $199 (weekdays).

TO BOOK: ritzcarlton.com WESTIN KIERLAND RESORT THE DEAL: The Westin Kierland Resort’s 5th Annual Summer Sale features rates starting from $139 per night, based on availability. Rates are valid for stays from Monday, May 27 through Monday, September 2nd, 2013. The special rate includes a $30 Kierland FlowRider credit per day and if reservations are booked

by Friday, May 17, guests also receive a $30 J. Swillings food and beverage credit per stay. Blackout dates and restrictions may apply and there is limited availability around summer holidays.

TO BOOK: 480-624-1202 or ilovekierlandresort.com. Mention rate code SUMMER WESTIN PHOENIX DOWNTOWN THE DEAL: The Westin Phoenix Downtown’s summertime Dine & Stay Package includes a delectable three-course customizable dinner in Province (per person), followed by a relaxing overnight stay in luxurious rooms that feature the signature Westin Heavenly Bed. Available Fridays–Sundays. Redeemable May 25 – August 31, 2013. Rates from $129 per night.

TO BOOK: 866-716-8137 and mention rate plan DINESTAY, or book online atwestinphoenixdowntown.com/dine-stay WILD HORSE PASS HOTEL & CASINO THE DEAL: Discounted Room Rate as low as $69 a night includes welcome reusable shopping tote with VIP coupon book for use at neighboring Phoenix Premium Outlets. Phoenix Premium Outlets is packed with discounted treasures.

From casualwear at Banana Republic and J.Crew to designer fashions at Elie Tahari and Saks Fifth Avenue Off 5th, shoppers are sure to find many designer labels and name brands all at great savings.

TO BOOK: 520-796-4900 or wingilariver.com

They've Waited All Year For Vacation...

Only $79.00/Night*

(Fri/Sat/Sun Nights Only 5/1/2013—8/30/2013)

3 Great Phoenix/Scottsdale Locations!

MIDTOWN SCOTTSDALE 2520 N Central Ave 3131 North Scottsdale Rd (((602) 716-9900 (480) 675-7665

Impressed

BILTMORE 2310 E. Highland Ave (602) 956-3221

Each Hotel Includes: Free Breakfast

Free Internet

Outdoor Pool Exceptional Service

Professionally Managed by Concord Hospitality Enterprises

“Over the last several years, I have had the pleasure of hosting numerous Continuing Legal Education Classes in the Executive Conference Center.

Each and every event has been absolutely flawless.

The pleasant, professional atmosphere of the venue and its staff provides an effective learning environment that not only allows the participants to be more focused, but enables them to be more productive as well.”

– Harry Beans, President of CLE West ECC Features: Ergonomic accommodations.

Close to airport and light rail.

Keep up with the Phoenix Convention Center:

192-seat lecture hall.

Phoenix Convention Center & Venues Executive Conference Center | Symphony Hall | Orpheum Theatre

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