CONNECT » GUIDE » INSPIRE
MAY // JUNE 2016
THE LEADERS IN HEAT: HEALTHCARE, ENERGY, AEROSPACE AND TECHNOLOGY Small Business
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Table Of Contents 6
San Diego Getaways
Arizona innovators take the spotlight
49 On the cover
(Clockwise from front left) Shawn Linam, co-founder and CEO, Qwaltec; Alan Nelson, PhD, founder, chairman and CEO, VisionGate; Michele Finney, market CEO, Abrazo Community Health Network; Dr. Jeffrey Trent, president and research director, TGen; Rick Kettner, Gilbert site director, Orbital ATK; Michelle De Blasi, director, Fennemore Craig; Robert L. Meyer, president and CEO, Phoenix Children's Hospital; Becky Kuhn, executive vice president of community delivery, Banner Health; and Steven G. Zylstra, president and CEO, Arizona Technology Council. 2
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his issue of Az Business impacts me personally because this issue puts a spotlight on those innovators who pack HEAT. We’re not talking about the Dirty Harry kind of packing heat. We’re talking HEAT as the acronym for healthcare, energy, aerospace and technology, which are the industries driving Arizona’s new economy in this millennium. It affects me personally because I know the impact these innovators are having. VisionGate has developed a test that identifies lung cancer before it develops. My maternal grandfather died at my side of lung cancer and might have been saved by this technology. Medtronic created a pacemaker the size of a vitamin. My paternal grandfather had a pacemaker the size of a toy truck. Medtronic’s creation would have given him a better quality of life. And in 1999, I was diagnosed with a genetic disease and given three months to live. Without genetic research like that which is going on at TGen and the advent of personalized medicine, my life would have been reduced to just another statistic, like my sister, who died of the same genetic disease. So this issue salutes those innovators and groundbreakers who are changing lives and building a new knowledge-based economy for Arizona. Enjoy this issue of Az Business.
Michael Gossie Editor in chief email@example.com
Healthcare’s best and brightest earn HCLA Awards
President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Associate editor: Erin Davis Interns: Kaia Evans | Samantha Pouls | Gianna Tracey Contributing writers: Mike Arce | Robert L. Meyer | Eric Miller Amanda Ventura | Steven G. Zylstra ART Art director: Mike Mertes Graphic designer: Anita Richey Intern: Michael Bodnar
ach year, Az Business magazine honors the most innovative healthcare leaders in the state at its Healthcare Leadership Awards. Winners of 2016 awards were: BIOSCIENCE COMPANY: Translational Genomics Research Institute. While it’s already a global leader in genomics research, TGen’s annual economic impact on Arizona is $174 million. COMMUNITY IMPACT: Lana Whitehead, president, SWIMKids USA. Since opening her own swim school in 1973, Whitehead and her staff have taught more than 100,000 children to be safer in the water. HEALTHCARE EXECUTIVE: Michele Finney, market CEO, Abrazo Health Network. Finney oversees six acute care hospitals, two free-standing emergency centers, a physicians group and nearly 5,000 employees. INSURANCE PROVIDER: Blue Cross Blue Shield of Arizona. Every year, BCBSAZ supports hundreds of charities and organizations and encourages employees to be active participants in their communities. LEGAL ADVOCATE: Richard Mallery, partner, Snell & Wilmer: Mallery was the driving force bringing the International Genomics Consortium and the Translational Genomics Research Institute to Phoenix. MEDICAL CENTER: Tucson Medical Center. Last year, 84,058 patients visited TMC’s emergency room, the hospital had 31,990 admissions and its physicians performed 9,356 inpatient and 12,492 outpatient surgeries. MEDICAL COMPANY: One Medical Group. One Medical Group focuses on building the physician-patient relationship and improving the average doctor’s office visit. PHYSICIAN: Richard Heuser, MD, chief of cardiology, St. Luke’s Medical Center and Phoenix Heart Center. Heuser is an internationally-recognized cardiologist, inventor, educator, author and one of the early pioneers of the angioplasty procedure. RESEARCHER: Glen J. Weiss, MD, director of clinical research and medical oncologist, Cancer Treatment Centers of America at at Western Regional Medical Center. Weiss has been actively researching the impact of immunotherapy. LIFETIME ACHIEVEMENT AWARD: Dr. Edward B. Diethrich. Diethrich developed of the sternal saw that is used routinely today for open chest surgery and initiated Phoenix’s first heart and heart/lung transplantation program.
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DIGITAL MEDIA Digital editor: Jesse A. Millard MARKETING/EVENTS Marketing & events manager: Heidi Maxwell Marketing coordinator: Kristina Venegas OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Cindy Johnson AZ BUSINESS MAGAZINE Senior account manager: David Harken Account managers: Ann McSherry | Bailey Young AZRE | ARIZONA COMMERCIAL REAL ESTATE Director of sales: Jeff Craig AZ BUSINESS LEADERS Director of sales: Sheri Brown RANKING ARIZONA Director of sales: Sheri King EXPERIENCE ARIZONA | PLAY BALL Director of sales: Joe Freedman 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 2016 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.
ADDYs showcase the best in Arizona advertising
Brian H. Blaney Shareholder Greenberg Traurig gtlaw.com
T Blaney concentrates his practice on corporate and securities law, mergers and acquisitions, and private equity investments. He has extensive experience in capital markets transactions, including public and private offerings of equity and debt securities. Greatest accomplishment: “Helping my clients achieve their business objectives provides me with a tremendous source of professional satisfaction. When a client achieves, for instance, a successful M&A transaction that transforms their company or provides well-deserved liquidity, I take pride in the fact that I helped make it happen.” Business advice: “Hard work and intelligence are simply the price of admission, so new lawyers today need to do more. Lawyers need to provide real value in helping their clients build successful businesses, and the best way to do that is to fully understand the client’s business, financial drivers, and key industry issues.” To read more about the best and brightest business leaders in Arizona, get a copy of the 2016 edition of Az Business Leaders at azbigmedia.com. 6
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he ADDY Awards is the advertising industry’s largest and most representative competition, recognizing the creative spirit and excellence in the art of advertising. Here are the 2016 winners (numbers in parentheses indicate the number of awards won in that category): Best of Show: RIESTER, Arizona Department of Health Services, DeNoble Files, integrated campaign Copywriting of the Year: RIESTER, Arizona Department of Health Services, DeNoble Files, integrated campaign — Troy Pottgen, Tom Ortega, Victor DeNoble, Bernadette Smith, Davis Kovacs Art Direction of the Year: RIESTER, Arizona Department of Health Services, DeNoble Files, integrated campaign — Ben Dveirin, Gregg Trotter, Andrew Enzweiler, Aaron Smitthipong Sales & Marketing Gold Awards: PS:STUDIOS (2), Fisher, MM Brand Agency, Lavidge, WHYFOR, R&R Partners Mirja Riester Out-of-Home & Ambient Media Gold Awards: R&R Partners, Lavidge, Cramer-Krasselt, Anderson Advertising Online/Interactive Gold Awards: R&R Partners (2), Mindspace, Fisher, HAPI Film, Video & Sound Gold Awards: RIESTER (5), LaneTerralever, Clydesdale Manhattan, True Story Films Cross Platform Gold Awards: Lavidge, Cramer-Krasselt, Anderson Advertising & Public Relations, RIESTER (3), Mindspace (3), Off Madison Ave, EME Design Studio Elements of Advertising Gold Awards: Lavidge (3), Copper Post (3), Kitchen Sink Studios (2), R&R Partners, Moses Inc, ELP SABS Creative Director of the Year: Jason Hackett, owner and creative director, HAPI Ad Person of the Year: Mirja Riester, principal and chief strategic officer, RIESTER. Riester supervises research and strategic planning, in addition to managing the integration of all services within RIESTER. She established the European method of brand planning and strategy at RIESTER when she joined the firm in 1997 and has successfully launched new products and built brands for many regional and national clients in consumer packaged goods, education, environmental protection, financial services, healthcare, pharmaceuticals and tourism.
Kathleen H. Goeppinger, Ph.D. President and CEO Midwestern University midwestern.edu
Tips to fit health into your schedule Experts say even busy executives have time to exercise By AMANDA VENTURA
Background: Goeppinger leads Midwestern University, an upper division academic institution specializing in graduate level health professions, including two medical schools, two dental colleges, two colleges of pharmacy, a college of optometry, a college of veterinary medicine and 19 separate graduate level health science programs. Midwestern has two campuses: one in Downers Grove, Ill., a western suburb of Chicago that has more than 2,900 students); and one in Glendale with more than 3,100 students. Goeppinger has served Midwestern University since 1985. In 1995, she was appointed president. Industry advice: “Get to know your faculty and staff. Have empathy for your students and their challenges and don’t be afraid to take a risk to make things better for everyone.” Surprising fact: “My husband never proposed to me.” To read more about the best and brightest business leaders in Arizona, get a copy of the 2016 edition of Az Business Leaders at azbigmedia.com. 8
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on’t let the excuses of long work days and extravagant business lunches collect at your waistline. Even a busy schedule is something that Angie Witte, a master personal trainer at LA Fitness in Phoenix can work around. All you need is 25 minutes. Witte’s workout will not only help you build strength, but jumpstart your energy level before hitting the office. “Building muscles means more fat loss overall,” Witte says. “Many people shy away from strength training for fear of bulking up, but there are exercises that will keep you toned and your stamina up”. At LA Fitness, which offers personal training in 25-minute increments, Witte helps clients tailor their workouts to fit their busy schedules. Her goal is to get you through a workout consisting of as many as six circuits, each focusing on a different part of the body, into those 25 minutes. Here are Witte’s tips for Arizona’s busy movers and shakers: Pre-workout: Fuel up with a light protein or carb snack. The workout: 5 minutes: Warm up the body with stretches 5 minutes: Three reps of box step-ups with light weights (Targets: glutes, quads
and hamstrings) 5 minutes: Three reps of core crunches (Target: abs) 5 minutes: Three reps of push-ups (Targets: biceps and back) 5 minutes: Three reps of body squats (Target: entire body) Post-workout: People who want to burn stored fat or expand their cardio endurance could add an optional session after their personal training workout on one or more of the workout machines. Replenish your body with a protein shake and always remember to stay hydrated before, during and after any workout.
July/August 2016 CONNECT » GUIDE » INSPIRE
MAY // JUNE 2016
IRE E » INSP T » GUID CONNEC
THE LEADERS IN HEAT: HEALTHCARE, ENERGY, AEROSPACE AND TECHNOLOGY Small Business
San Diego Travel Guide
I A LS ENN MILL 113 97 MOST IZONA'S
Arizona el Couns Corporate s Award
a of Arizon
S LE BUSINES YOUNG
Greater Phoenix ic ouncil Econom
Arizona & Tourism Lodging Association
COMING NEXT ISSUE • Meet the Most Influential Women in Arizona Business • How big is the economic impact of healthcare in Arizona? • How will WESTMARC and the West Valley capitalize on improved infrastructure? • How has Glendale become the king of mega sporting events?
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Give and get
Not volunteering can be hazardous to your (business) health By ALISON BAILIN BATZ
id you know that improving someone else’s life may very well save yours – not to mention boosting your business’ bottom line? According to the Corporation for National and Community Service, there is more than just a causal connection between giving back and one’s overall health. Researchers found that those who volunteer have lower mortality rates, greater functional ability, higher self-esteem and higher overall wellness than those who do not volunteer. “In addition to the proven benefits to the individual through volunteerism, there is a litany of evidence that companies with proactive corporate volunteer programs enjoy greater employee satisfaction, higher morale, and – as a result – greater profitability,” says Nicole Stanton, office managing partner of Quarles & Brady in Phoenix. Stanton’s sentiment is backed by a recent report from Realized Worth, which found that in companies where employees were more engaged than not: • Profitability jumped by 16 percent • General productivity grew 18 percent • Customer loyalty increased 12 percent • Quality improved by 60 percent There are many ways to go about developing an engaging company volunteerism program. Here are some great examples of local businesses doing it right. Quarles & Brady – Quarles Cares: “Through our Quarles Cares initiatives, we provide opportunities for attorneys and staff to commit themselves personally to civic and charitable efforts,” says Stanton. Among the most popular of the firm’s many Quarles Cares initiatives – the Capitol School program. “Through this program, we roll up our sleeves to take on the roles of tutors and homeroom parents in classes at the Capitol Elementary School several times a year,” says Stanton. Pioneer Title Agency – Agency in Action: In 2015, Pioneer took the concept of Agency in Action to a whole new level with its “Take a Hike” initiative. “For our 30th anniversary, we partnered with the Arizona Trail Association on this first-ever fundraising and employee wellness challenge utilizing the Arizona National Scenic Trail,” says Brenda Silveus, marketing director at Pioneer Title Agency. Through
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the program, Pioneer team members across the state came together to collectively hike, bike, run and/or ride across all 800-plus miles of the Arizona National Scenic Trail. In addition, the company set a goal of raising at least $30,000 to support the trail and Mike Brown far exceeded it, donating more than $45,000 toward the cause.
Zerorez of Phoenix – Rezoteer Volunteer Program: “The
Rezoteer Volunteer Program provides our staff and their family members a way to get involved with volunteer projects in Brenda Silveus Nicole Stanton our local communities and to share in the benefits of giving back alongside their co-workers, who they might not get to see on a regular basis if out on cleaning jobs all over the Valley,” says Nathan Perrins, co-owner of Zerorez. “As often as once a month, our team is able to work together on a project that impacts their neighborhoods, and our entire community-at-large.” Washington Federal – Focus on Arizona: Eager to show just how local his team truly is, Arizona Regional President Mike Brown launched the Washington Federal Focus on Arizona community volunteer program, which aims to fundraise for, volunteer with and facilitate direct giving to community-based nonprofits serving the needs of low and moderate-income individuals as well as support local business and civic endeavors that better the community.
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r dir ct Former Phoenix mayor’s innovative ideas are changing the cost of healthcare for businesses By MICHAEL GOSSIE
aul Johnson has always been a groundbreaker. In 1990, he became the youngest mayor of a major American city when he became mayor of Phoenix at age 30. Under his leadership, Phoenix was voted Best Run City in the World. Since leaving politics, Johnson has turned his attention to healthcare, founding Redirect Health, which helps employers build affordable healthcare plans using a self-insurance model. Az Business sat down with Johnson to talk about his latest passion. Az Business: How has your political background helped you in the private sector? Paul Johnson: It helped me with contacts, with maturity and with developing an understanding of how things work. Politics also gave me a clear understanding about how the economy works. What drives the economic engine isn’t government, it’s the private sector. It’s innovation, creativity and people producing products. As that happens, government taps into that engine and draws off money to pay for things we see as important — education, police, transportation. But if you overload the engine with too much friction, the engine shuts down. So you have to constantly recognize that there is a benefit to keeping both moving. AB: What prompted you to found Redirect Health? PJ: As mayor in 1990, I started off having a series of challenges. The budget had crashed. We were trying to find ways to save money. I began the process of doing a self-insurance model for the City of Phoenix. They were able to complete the process later and it did create significant savings for the city. When I left, I went onto a couple boards, including Arrowhead Health Center. They had some unique things they did that focused on the patient. We had different challenges we had to face and the biggest one was the rising cost of healthcare. We went to a self-insurance model. David Berg, who built Arrowhead Health Centers with his wife, Janice Johnston, is a little crazy, but he’s a genius. He did things that 12
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every other insurance company would have said you cannot do. He got rid of deductibles, he got rid of co-pays, he began watching and negotiating claims and made certain the claims were brought down in price. It made a dramatic difference. He actually cut his costs 50 percent below the cheapest quote in the fully-insured world. Two years ago, we had friends ask us about the system and we decided to create a commercial product, and that was the beginning of Redirect Health. AB: How does Redirect Health work? PJ: Redirect Health’s EverydayCare is available for less than $100 per employee per month. Not only does this plan meet all Minimum Essential Coverage (MEC) requirements stipulated in the Affordable Care Act, but it addresses the vast majority of healthcare needs that people will encounter, such as treatment of coughs and colds, diabetes, asthma, pain and injury — including chiropractic and virtual rehabilitation — and other common ailments. Care is included at no additional cost at Redirect Health Accredited Health Centers. AB: So, are you an insurance company? PJ: Redirect Health is not an insurance company. However, its health care plans do provide companies with an avenue to meet Minimum Essential Coverage (MEC) and Minimal Value Plan (MVP) requirements stipulated by Obamacare. Plans fall under a portion of the law that enables employers to self-insure. While the EverydayCare plan meets the total needs of many employers, Redirect Health also offers Premium Plans that use health insurance companies to supplement risks specific to a company’s workforces, such as coverage for specialists, hospital stays and drug benefits. AB: $100 per month is less than my bi-monthly healthcare payment. How are costs kept low? PJ: We eliminate waste in the system so members can get care quickly and efficiently. We also have a care logistics team that helps members navigate the system and identify the most
PHOTO BY MIKE MERTES, AZ BIG MEDIA
PAUL JOHNSON: “My view of the presidential race is that it doesn’t matter anymore,” says the former mayor of Phoenix. “Where I have great hope and optimism is what’s happening outside the political system. Our ability to invent and have the human mind create and develop a product gives me great hope for where we are going.” efficient and affordable route for treatment – without sacrificing quality. In many cases, we even improve the quality of care. Most healthcare companies are filled with waste, administrative burdens, inefficient processes and unnecessarily high procedure rates due to unreasonable requirements from traditional, status quo insurance agencies. Redirect Health is different. We eliminate waste and unnecessary administration so we don’t have to charge more. We redirect care through the most efficient means possible. For instance, certain procedures that cost thousands of dollars in a hospital can actually be performed in select clinics for a small fraction of the cost and with the exact same quality. AB: How do you think Redirect Health will change the healthcare industry? PJ: It already is changing the industry. It starts by understanding that everything we are being told about Obamacare is not true. People are utilizing Obamacare as a means to move their product. That’s what is happening. Here’s an example: A stucco company is told it has 100 employees and only five were insured last year and now it has to offer 100 percent of them insurance this year and it can get a policy for $500 per person and if the company doesn’t buy the policy, it won’t be in compliance. Nothing about that statement is true, but it’s being told to employers all the time. AB: So what’s the truth? PJ: Companies have to meet minimal essential care standards to
get out of the $2,000 penalty. They have to file the forms. If companies do those two things, they are 90 percent of the way there. Companies do not have to have the strategy of buying health insurance. That’s not what the law did. It allowed for a self-insurance model. AB: How important are innovative companies like Redirect Health to growing the economy? PJ: One of the greatest strengths in the United States is weird people. We exalt weird people. We allow them to do miraculous things. Over time, we take their inventions and products and create revenue and tax revenue from it that creates the ability to educate a whole new group of weird people — Steve Jobs, Bill Gates and others. The real challenge is when people begin to believe that you can fix the problems by making everyone equal and getting rid of the gap. When that happens, they quit creating, they quit innovating. AB: Do you miss politics? PJ: When I left politics after I lost the governor’s race, I had to think about what I wanted in my life and what was important to me. I came to the conclusion that it didn’t have to be politics. I realized what was important to me and it became my mantra: I needed to think the unthinkable. I needed to change the world. And I needed to have a blast. Redirect Health is a group of likeminded people who are thinking way beyond the unthinkable, they are trying to change the world and they are a fun group of people to be around. AB | May - June 2016
Factors to consider as companies look to grow globally 14
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By MICHAEL GOSSIE
oing global. It’s a phrase uttered often in the business world. But how do business leaders know when it’s time to take a company global? “Regardless of size, Arizona businesses should take a serious look at expanding into the global marketplace,” says Tony Braida, vice president of global banking for Bankers Trust. “With more than 95 percent of the world’s consumers residing outside the United States, any company that wants to grow its business and customer base needs to eventually expand its presence outside of our national borders.” So, where should you start? Alliance Bank of Arizona put together a list of due diligence factors companies of all sizes should consider as they look to grow globally. Alliance Bank of Arizona has become a local authority on collaborating with local international trade experts to provide workshops and tools to help educate local companies on international finance, logistics and shipping, legal structures and tax planning as it relates to global business. For local businesses of all sizes looking to grow their business outside of the U.S., experts at Alliance Bank encourage business owners to consider the following: • Knowledge is king: Small and mid-size businesses have such a big local, regional or even national market that many of them haven’t considered exporting if it’s not a natural pull from the customer. When they do consider exporting, a lack of knowledge on how to facilitate regulations, shipping, payments, etc. can make it seem very challenging. Businesses should seek out trusted advisors, which may include a banker, CPA, attorney, existing business exporter and a representative from the U. S. Commerce Department or the Arizona Commerce Authority who know the ins and outs of global business. A top reason Metro Phoenix Export Alliance (MPEXA) was created is to make these connections available to business owners. • Trusting people on the ground: From far away through cultural filters, it’s hard to see who is really capable and trustworthy to help companies grow in new regions, whether as a partner, distributor, attorney or other service provider. Take the time to align with known and trusted providers that will assist with the day-today operations. A good place to start is with the U.S. Commercial Services Gold Key program. • Protecting intellectual property: It is important to protect intellectual property. But, for most companies it’s difficult to keep a secret sauce “secret” and protect the dissolution over time. Good legal advice goes a long way in protecting yourself and your business. Arizona is home to some very knowledgeable international intellectual property specialists. • Currency volatility: Global economic conditions have caused major currency fluctuations, which can impact the viability or profitability of international business activity. Companies that accept payment in foreign currencies need a way to manage that risk. Knowledgeable foreign exchange bankers, like those at Alliance Bank, can provide AB | May - June 2016
BANKING Although it might seem like a daunting task at first, there are many local professionals who can help Arizona companies navigate the seas of international business...
consultation on how to utilize tools such as foreign exchange hedging instruments, including Forward contracts and Swaps to reduce currency volatility risk for your company. • Understanding how to get paid: Selling to a foreign buyer comes with payment risks that include commercial and political risk causing the buyer to default. Small business exporters often lack the knowledge of what tools are available to them to help mitigate payment risk. Cash in advance is the best way to get paid, but when that is not an option speak to a financial advisor that specializes in international payment solutions such as international letters of credit or the use of payment insurance products. • Regulatory compliance fallout: One of the unanticipated fall-outs of Anti-Money-Laundering (AML) requirements is that many of the global banks are now refusing to send Letters of Credit if they have no way of knowing the ultimate client. Therefore, credit and financing can be rejected. It’s essential to work with a bank, like Alliance, that establishes direct relationships with key banks in a specific international city on your behalf. • Working capital to grow: Getting the money needed for growth is always a priority, and with longer shipping and lead times, cash requirements for international growth can be higher and more difficult to obtain. To accommodate exporters' need for capital to support international sales, 16
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Alliance Bank utilizes credit insurance provided by the Export-Import Bank of the United States (EXIM), as well as some private insurers, which enables the bank to make loan advances secured by foreign accounts receivable. For companies experiencing high volumes of international growth, Alliance Bank utilizes export working capital loan guarantees provided by the EXIM Bank and the U.S. Small Business Administration. Loan guarantees support higher loan advance rates that can free up working capital to enable exporters to grow at a faster pace. • Understanding tax benefits: Exporters can obtain beneficial tax treatment by creating Domestic International Sales Corporations, but most CPAs are not familiar with these entities and expertise on the subject is required. A qualified financial advisor will be able to discuss the tax benefits and find the ones that work best for your business and export needs. “Although it might seem like a daunting task at first, there are many local professionals who can help Arizona companies navigate the seas of international business, including global bankers, legal professionals and documentation and logistics specialists,” Braida says. “Whether it’s a toe in the water or a cannonball splash, it is vital that Arizona companies enter the waters of the global marketplace in order to grow their businesses.”
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Businesses with more than 100 workers may be forced to reveal pay by gender By MICHAEL GOSSIE
he federal government announced its intent to gather additional pay information from larger employers, forcing all businesses with more than 100 workers to provide detailed information about their pay practices in an effort to address gender discrimination. If the president’s plan moves forward as expected, employers will be subject to a heightened pay transparency standard by the end of this calendar year. “First, employers should know that the proposal to include ‘pay data’ applies only to employers that already submit annual reports for the number of employees per job by ethnicity, race and gender, also known as an EEO-1 report,” says Susie Ingold, co-chair of the employment law practice area at Burch & Cracchiolo. “Second, the additional element of pay data can be pulled from W2 earnings information. Employers can implement new ‘queries’ within their existing payroll systems to report newly required pay data. Lastly, if approved, the first EEO-1 report with pay data would not be due until September 30, 2017.” Az Business talked with attorneys at Fisher & Phillips to get answers to the most commonly asked questions about this issue. Question: What has been proposed? Answer: The Obama Administration has proposed executive action through the Equal Employment Opportunity Commission (EEOC) to require certain businesses to provide detailed information about how much each of their employees is earning. Affected employers must break down pay information by gender, as well as race and ethnicity, after the law goes into effect in order 18
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to make it very easy to identify pay gaps. Question: Who will be impacted? Answer: This executive action will apply to all businesses that employ 100 or more workers. According to the White House, the proposal would cover more than 63 million Americans. Question: How will employers report the information? Answer: Currently all employers with 100 or more workers already complete the EEO-1 form on an annual basis, providing demographic information to the government about race, gender, and ethnicity. Once the new revisions take effect, the EEO-1 form will also require that salary and pay information be included. Question: Why has the government proposed this change? Answer: The federal government has specifically stated that the goal of this additional data-gathering is to identify businesses that might have pay gaps, and then target those employers who are discriminating on account of gender. It is no coincidence that this plan was announced on the seventh anniversary of the Lily Ledbetter Fair Pay Act, a federal law that overturned a Supreme Court decision and made it easier for employees to bring equal pay claims. In other words, once this new law takes hold, the EEOC will have greater ease in identifying disparities and areas of potential pay discrimination to determine where it will take enforcement action. Question: When will employers be subject to the new law? Answer: The EEOC chair has stated that she anticipates the rulemaking process to be completed by September 2016, when
What should companies do to prepare for transparency? John Alan Doran, member, Sherman & Howard: “Review your policies, practices, handbooks and the like to ensure your own documents comply with the rules. Train and retrain your HR team, supervisors, managers and executives so they understand what is permissible conduct under the new rules versus what can properly be used to discipline an employee. Make sure you get your mandatory pay transparency policy statement properly disseminated to employees.” Susie Ingold, partner, Burch & Cracchiolo: “To be ready, employers should consult their payroll and Human Resources Information Systems to ensure that the proper queries targeting pay data can be established. Employers should also designate an associate within the organization who is responsible for collecting the information and timely submitting the EEO-1 report with all required data.”
the new rules would officially go into effect. If this holds true, employers will have to submit their pay data for the first time in September 2017. Question: What should employers do now? Answer: In light of these developments, affected companies should make it a priority to review current pay systems and identify and address any areas of pay disparity. It is critical to take steps now to minimize increased scrutiny once the data begins to be reported next year. By conducting your own gender-specific audit of pay practices, you will be able to determine whether any pay gaps exist that might catch the eye of the federal government when you turn over this information next year. You will have time to determine whether any disparities that may exist can be justified by legitimate and non-discriminatory explanations, or whether you will need to take corrective action to address troublesome pay gaps.
Adam Merrill, associate, Polsinelli: “Businesses need to take a hard look at their pay practices and meaningfully address any pay disparities between male and female employees before the new requirements take effect in 2017. Business owners, in cooperation with their human resources and finance departments, should conduct an audit of their records to determine what changes can be made.” Tracy A. Miller, shareholder, Ogletree, Deakins, Nash, Smoak & Stewart: “As a first step, employers should conduct an audit of their current employee pay in a manner designed to protect it as privileged. If an employer identifies
pay differences that cannot be explained by legitimate factors, it should take steps to correct any pay disparities and fix any weaknesses in the company’s pay system.” Craig O’Loughlin, partner, Quarles & Brady: “Because this rule could go into effect this year, requiring employers with at least 100 employees to break down pay data by gender, race, and ethnicity on EEO-1 forms, employers should already be performing gender, race, and ethnicity-specific audits on their pay data to discover and correct pay gaps for which there are not legitimate, nondiscriminatory justifications.” Patrick Whelan, associate, The Frutkin Law Firm: “Conduct an internal audit to analyze and address, or at least be prepared to explain, potential pay discrepancies prior to submitting the data to the EEOC. It is imperative that companies are diligent about this privileged pay analysis in order to — first — determine whether disparities exist and — second— determine whether disparities can be justified or whether corrective action will be needed to remedy inequitable pay gaps.”
John Alan Doran
Tracy A. Miller
Patrick Whelan AB | May - June 2016
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Effective use of Facebook will boost business T
he biggest digital marketing trend for 2016 is a Facebook advertising strategy that has been known to make a business’ campaign work 10 times better. To start, a lot of local business have a hard time finding the right customer to show their Facebook ads to. How would a gym target prospects? You can include people interested in nutrition and fitness, who are near your studio, etc., but that’s not niche enough — you can get so much more granular. Here’s how: When you use content the right way with blogs, you can actually segment your audience to get in front of the right people more often. This strategy, which I’ll break down, lowers cost per conversion so that every customer becomes way more valuable. Mike Arce Start with your current Marketing email list that includes both customers and prospects. You’ll then import your list into Facebook to create a custom audience. The point here is to ensure that your email list sees your ad. These are people who you know are already interested in your business, so the conversion rate is higher. You can also use lookalike audiences. This is where Facebook targets people who have the same interests and demographics as those already on your email list. Your current customers are your ideal audience, so targeting people similar to them is a great way to up opt ins. Aside from your email list and lookalike audiences, set up basic targeting that’s broad. This way your content can do all of the segmenting. Now let’s get to the blog. Let’s take John as an example. He is an owner of a fitness studio that focuses on HIIT. He wants to get more members to his studio, but isn’t sure how to advertise to people who want to get in shape. So John writes a blog, “3 Things You Can Easily Implement to Shed Pounds Before Summer.” When someone clicks on John’s ad from their newsfeed, that means they’re currently interested in getting in
AB | May - June 2016
shape. Fitness is on their mind, which means they want to shed the pounds enough to actually read his article. Let’s say Sally clicks on John’s blog and reads the three tips. One tip will be about physical training, which includes a free offer for John’s HIIT workout. Sally may or may not opt in to the offer, but we at least know she wants to get in shape and is a potential client. But it doesn’t end there. Here’s where businesses really capitalize. The next time Sally’s on Facebook she’ll see John’s ad about the HIIT offer because the article had retargeting in place. Essentially, the blog had a pixel installed that triggers the retargeting campaign so Sally specifically sees John’s ad in Facebook even after she leaves his site. This allows John to segment his audience. And since users who are retargeted to are 70 percent more likely to convert, this is a huge part of the process. We did this for a fitness studio and it generated 31 leads in just 24 hours. You’re probably already brainstorming what you can do for your own business. If you want more guidance on your content marketing and how to kill it with Facebook, our chat feature or other digital marketing experts would be more than happy to help. Mike Arce is the founder and CEO of Loud Rumor, an online advertising company that gets local businesses more customers using Facebook, AdWords, YouTube and more.
When you’re looking to maintain a positive cash flow. We can help you manage your business finances. With Wells Fargo small business resources, you’ll have access to: • Online tools and resources that cover managing cash flow, operations, financing options, tax strategies, and more. • Support and guidance of a banker from your community. • Innovative products, services, and programs. Stop by and speak to a local banker today, or go to wellsfargo.com/appointments to schedule an appointment at a time that’s most convenient for you. Additional tools and resources are available on wellsfargoworks.com/run.
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Triple threat Desert Rose takes backyard-style restaurant concept to a whole new level By MICHAEL GOSSIE
alley restaurants are starting to resemble the best back yards ever. Venues that take advantage of the boom of backyard-style restaurants and bars have been popping up all over the Valley and have had an enormous impact on the hospitality industry. This trend is defined by hot spots like the Monastery (one of the originals), the Yard, Blasted Barley and many others. Now, the West Valley has a backyard-style restaurant to call its own, but owners Teresa Outzen and Pete Gliniak have taken the concept to an entirely new level. The Desert Rose Steakhouse, Desert Rose Pizza & Gastro Pub and Desert Rose Cigar Lounge & Club opened earlier this year in a renovated Glendale welding facility and brings fine food, high-quality pub food, cigars and a whole lot of backyard fun to one property. It’s not easy to take several different concepts and roll them into one place, but Outzen and Gliniak have succeeded. And what makes the Desert Rose complex teeter on the edge of perfection is that if offers something for everyone: • The steakhouse offers sophisticated dining in an atmosphere defined by wooden trusses, perfect lighting, exposed duct work and just the right level of hipness. • The Pizza & Gastro Pub offers patio with plenty of tables but with room to stretch, comfortable couches and more than enough TVs if you’re into watching sports while you’re eating. • The patio is dog friendly and offers enough room so you don’t feel like you’re infringing on the folks at the table next to you if you bring your dog. • Near the patio is a Disneyland of outdoor games — Cornhole, Jumbo Jenga, Giant Connect Four and many others — that will keep the big kids and little kids so entertained that they might miss dinner. 24
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• An adobe cigar lounge is draped in Cuban-style décor and the cigar lounge offers more than 90 types of cigars and is staffed with experts who can assist you with your cigar questions. • All that is great, but how is the food? The dishes that Desert Rose Steakhouse and Desert Rose Pizza & Gastro Pub do well, they do extremely well. There were some can’t miss items that stood out during two recent visits: • Bacon-Wrapped Shrimp ($15): Jumbo white shrimp stuffed with Oxaca cheese, wrapped in bacon and fried to a golden brown. The shrimp are huge and exceed all expectations on the deliciousness meter. • Lobster Roll ($20): This amazing tasty treat is stuffed with huge chunks of lobster tossed in an aioli sauce atop lettuce in a lightly grilled French baguette. • Prime Rib (16-ounce Middleweight size is $32): This herb, cracked pepper and garlic
crusted, slow-roasted prime rib was the best thing on the menu during both visits and might be the best prime rib in the Valley. The best thing about it? It can be ordered at both Desert Rose Steakhouse and Desert Rose Pizza & Gastro Pub with equal levels of perfection. • The pizza: The crust on the pizza served in the Pizza & Gastro Pub is exquisite. The variety of toppings offered make it easy to build the perfect pizza to suit your tastes. Generally, trying to mix too many concepts under one banner is a recipe for disaster. But Desert Rose Steakhouse and Desert Rose Pizza & Gastro Pub have struck the perfect combination of delicioius food, fun and perfect atmosphere. Desert Rose Steakhouse, Desert Rose Pizza & Gastro Pub and Desert Rose Cigar Lounge & Club, 6729 N. 57th Dr., Glendale, AZ 85301, 623-680-9163 desertrosesteakhouse.com
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matter Why should Congress pass the Employees Rights Act?
rizona’s economic success in recent years can be attributed to our pro-business environment, fiscal conservatism and common sense approach to government regulation. But it is Arizona employees that make and keep businesses strong, their skills and productivity are the foundation success is built upon. Despite Arizona’s right to work laws and current low rate of unionization, Arizona employees and businesses are increasingly exposed to big labor’s stranglehold on the workplace and economic growth. For too long, federal statutes have equated employees with unions Rick Murray and ceded worker’s fundamental Small Business rights to the labor organizations claiming to represent them. Labor organizations are ramping up recruitment efforts in our state and fighting to maintain their influence in Washington, the interests of their members and potential members have fallen by the wayside. That is why Congress must pass the Employees Rights Act. This legislation would increase accountability by union leaders to members and allow employees to make the choice of whether to join, remain with, or leave a union by requiring a recertification 26
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vote whenever more than 50 percent of the workforce turns over. Federal statistics show a mere 7 percent of today’s workforce actually voted for their own union because certification was achieved decades before they were employed. In addition, certifying unions using public card checks rather than a secret ballot vote leaves employees vulnerable to intimidation and threatens the integrity of the certification process. In surveys, union members by 81 percent approved of the requirement that unions receive prior approval from its members before spending their dues on politics. To be clear, this legislation does nothing to hinder the right to unionization, but sets some basic rules to ensure fairness. Employees will continue to have the right to benefit from collective bargaining and other union benefits if they so choose. The Employee Rights Act guarantees employees greater transparency, enhanced accountability and a strong democratic process which ensures employees are treated as the valuable asset they are within Arizona’s economy. Arizona Sen. John McCain, Rep. Trent Franks, Rep. Paul Gosar and Rep. David Schweikert are a few of the prominent co-sponsors of S. 1874 / H.R. 3222 The Employee Rights Act and should be commended for their support and taking a stand to guarantee the citizens of Arizona and our county their right to work. Rick Murray is chief executive officer of the Arizona Small Business Association.
Take it to the bank Arizonaâ€™s independent businesses see jump in revenue, but struggle to obtain loans
ZAC PACLEB, CRONKITE NEWS
ALTERNATE FINANCING: While one survey indicated that local businesses in Arizona are thriving, they struggle to find approval for a bank loan more than the national average. The Velo in Phoenix obtained funding from four investors.
By ZAC PACLEB, CRONKITE NEWS
recent national survey indicated an uptick in revenue for independent businesses nationwide. And in Arizona, those numbers were even higher. Survey respondents in Arizona said they saw revenue grow 7.1 percent, about half a percent higher than the national average. The Institute for Local Self-Reliance in partnership with the Advocates for Independent Business conducted the survey. The survey gathered data from more than 3,200 independent business, including about 560 from Arizona, according to Local First Arizona, which promoted the surveyâ€™s findings. Although many businesses have found success, Arizona independent businesses struggled with obtaining bank loans, according to the survey. In Arizona, 45 percent of the surveyed 28
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businesses failed to secure a bank loan over the past two years, higher than the national rate of about 33 percent. James Christensen, president and CEO of Mesa-based Gateway Bank, cited the lack of a strong community bank presence in Arizona for the failure rate. Large banks approved about 22 percent of small-business loan requests nationwide, while small banks approved those requests at a 49 percent clip, according to Biz2Creditâ€™s Small Business Lending Index. Charles Ruscher, senior lecturer in finance at the University of Arizona, said big banks are less likely to approve a loan request from a small business as opposed to chain businesses. And that puts small businesses at a disadvantage.
SMALL BUSINESS “Independent local businesses have fewer financing options than do larger chain stores,” Ruscher said. Ruscher added that chain stores have more financing choices because they usually have more options to go to geographically because they are normally nationwide establishments. Christensen said that’s why community banks are so important: They can provide a small business more help in figuring out how to obtain loans and other financial aid. Ruscher agreed. “Community banks play an educational role in assisting businesses with their financing requirements more so than do national banks,” Ruscher said. “In addition, the loan underwriting for most national banks is centralized in hubs geographically, far away from the location where the loan will be financed.” It is in this realm where Christensen tries to help. “I think we give (small businesses) a path and get them organized,” Christensen said. “There’s so many things to think about that – especially if you’ve never been a small business
person before – how to handle your sales tax, how to handle your payroll tax, how to handle your payroll processing, your insurance, on and on and on. There’s just so many things to think about, and I think the community banker can guide them to a certain degree a whole lot further than the big banks do.” Businesses often turn to other sources for financing. For example, The Velo, a locally owned bike repair and coffee shop that opened last year, was financed by four investors, something manager Justin Bush said made a difference in its first year of operation. “It makes people – when it’s their own money – they’re a lot more in tune with how it’s being used,” Bush said. Still, Arizona seems to be doing as well as any other state when it comes to growth. “We’ve had growth that’s comparable nationwide. We’re doing very well even on our own expectations. We’re very happy with the growth,” said Scott Hermanson, practice manager of the Scottsdale Cat Clinic.
GIVE IT A SPIN: The Velo Bike Shop & Cafe opened in 2015 and has created a customer experience — combining espresso and bicycles — that is unparalleled. PROVIDED PHOTO
AB | May - June 2016
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SAN DIEGO TOURISM
San Diego offers high-end getaway options By ERIN DAVIS
ost Arizonans have at least one summer-reprieve escape. A five-hour drive is a minor price to pay for a break from the Valley’s toasting temps. This summer, try setting your sights on nearby Carlsbad, California. Just a few hours from the sizzle, Hilton’s Cape Rey resort is much more than simply a hideaway from the heat. Established in 2012 and loaded with amenities and ongoing upgrades since its inception, Cape Rey is nestled on the San Diego
Editor’s perfect Cape Rey day Take out: Family beachside picnic to go — handcrafted sandwiches for adults and kids, seasonal side dishes, chips, homemade cookies and a beverage. Take in: Beachside views from Chandler’s. Be sure to try Chef Teri’s Green Tea Yogurt Bowl during brunch and Ahi Salad for dinner. Try: The Oceancrest Spa Brown Sugar and Acai Berry Body Smoothing Exfoliating Scrub is heavenly.
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coastline — literally a stone’s throw from the beach. For those seeking R&R, this is the place to go. For eats, guests can visit onsite restaurant Chandler’s, spearheaded by Culinary Director Teri McIllwain, who routinely shops local farmers markets to offer a varied and fresh farm-to-table menu. Also on the property is Ocean Crest Spa, where services range from massage and seasonal scrubs, to organic and rejuvenating facials and couples massages. Cape Rey has a number of concurrent and seasonal packages, such as specialized beach picnics including the Sunset Beach Picnic, which offers a basket loaded with a cheese and charcuterie appetizer, seasonal fruit, heirloom tomato and spinach salads, a Maine lobster roll, lamb lollipops and chocolate-covered strawberries and truffles for dessert. Or, for the more adventurous, there’s the Carlsbad Lagoon Adventures option, including watercraft rentals and shuttle transportation to and from the lagoon — a 400-acre watershed giving guests a front-row view to marine life, sea birds and more. Cape Rey adventurers seeking offproperty activities are minutes away from such attractions as LEGOLAND California, Sea World, the San Diego Zoo, the San Diego Zoo Safari Park, Birch Aquarium and the Gemological Institute of America (where you can cut your very own diamond). And again, the ocean is just down the road for a walk on the beach or a coastline drive along Route One Pacific Coast Highway.
Escape to luxury While San Diego offers getaways to fit all Arizonans’ budgets, sometimes we just feel the need to live it up a bit and spoil ourselves. Here are some San Diego options for those looking for a more luxurious getaway.
• The Fairmont Grand Del Mar, San Diego’s most luxurious destination resort, shines as Forbes Travel Guide’s only triple Five-Star resort in California, along with other impressive recognitions including TripAdvisor’s No. 1 Luxury Hotel in California and recipient of AAA’s Five Diamond Award for six years running. The 249-room resort offers plush accommodations and unrivaled amenities including a championship golf course, an award-winning 21,000-square-foot full-service spa, acclaimed restaurants, an equestrian center offering trail rides through Los Peñasquitos Canyon and four sparkling swimming pools. Information: fairmont.com/san-diego • La Valencia Hotel has long delighted guests with 112 sumptuous guestrooms and villas — including the new ICON Sky Suite, the pinnacle of panache — perched atop La Jolla Cove. Overlooking the beautiful Pacific Ocean, the trademark pink facade and distinctive mosaic-tiled tower have become landmarks within walking distance of elegant art galleries, boutiques and museums. Since opening its doors in 1926, “The Pink Lady of La Jolla” has been a special hideaway for Hollywood stars seeking personalized attention, exceptional privacy and graciousness. Information: lavalencia.com
• One of the most famous luxury spas in the world, The Golden Door in San Diego’s bucolic North County earned the designation as the World’s Best Destination Spa in the Travel + Leisure 2015 World’s Best Awards. The harmonious, Japanese-style facility envelops guests in a beautiful,
health-promoting environment featuring exercise studios, the Dragon Tree Gym, swimming pools, tennis courts and a private hillside for hiking to the on-site restaurant where chefs prepare healthy gourmet meals with fresh ingredients from the spa’s organic gardens. Information: goldendoor.com • Named one of the Top 25 Spas in the U.S. by Condé Nast Traveler, the Spa at Rancho Bernardo Inn offers a luxurious menu of massages, treatments and body wraps which can be experienced in a lush garden oasis or five temperature-controlled outdoor treatment cabanas. With a focus on seasonal ingredients, the spa’s customized “Made Fresh Daily” spa package includes a special “spa at home” body treatment recipe from the spa therapist and a recipe from their culinary expert. Information: ranchobernardoinn.com
• The San Diego Zoo Safari Park offers several VIP experiences, including a tailored 5- to 8-hour Ultimate Safari ($599-$999 per person) that includes access to the most exclusive areas of the park, up-close animal encounters and a personal tour guide. The park also offers Roar & Snore Safari, a thrilling “glamping” adventure where guests overnight in a luxury tent ($220 per person) surrounded by the sights and sounds of wildlife. Information: sdzsafaripark.org • The new Sky Combat Ace offers extreme air adventures where guests zip into flight suits and take the controls of high-performance stunt planes to experience aerial dogfights and wild aerobatic flights of non-stop spins, barrel rolls and loops high above the San Diego coast. Experiences range from the Top Gun ($599 per passenger) and signature Sky Combat ($999 per passenger) to Operation Red Flag ($1999 per passenger), the ultimate fighter pilot flight. Information: skycombatace.com
AB | May - June 2016
Arizona resorts’ summer staycation deals let local folks experience the state’s finest facilities at low prices By MICHAEL GOSSIE
rizona is home to some of the world’s most fantastic pools, luxurious spas, romantic retreats, spectacular golf courses and best restaurants. So if you need a summer getaway, why not stay home and save money? Forget about flight delays and rental cars because many of Arizona’s award-winning hotels and resorts offer summer deals that are designed specifically for local residents who want a staycation to get away from it all. The best part about experiencing Arizona’s best resorts in the summer is that many offer great deals and low rates.
Boulders Resort & Spa The deal: Rediscover a truly peaceful vacation getaway at the newly-renovated Boulders Resort with rates that start at $109/night. With luxurious casita accommodations, a legendary Spa, four swimming pools, world-class golf and culinary adventures at the newly designed restaurants, this peaceful paradise offers summer amenities and programs designed for a blissful adult getaway. To book: 480-488-9009 or visit theboulders.com 34
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The Scottsdale Resort at McCormick Ranch AB | May - June 2016
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ARIZONA GETAWAYS Carefree Resort & Conference Center The deal: Carefree Resort allows guests who stay two nights to get a third night free. Rates start at $68/ weekday and $78/weekend. Kids under 12 eat free. Book by Aug. 8 and stay between May 25 and Sept. 25. To book: Call 888-692-4343 and mention “Staycation”
Fairmont Scottsdale Princess The deal: Summer Beach Party at the Princess kicks off Memorial Day weekend with the grand opening of 102 all-new guest rooms and the resort’s sixth and largest pool, Sunset Beach, with 9,000 square feet of luxurious white sand, a splash pad and glamorous cabanas, further making this AAA Five Diamond resort a play-cation paradise. Summer fun also includes cool rides down waterslides and a disco Techno Glo Party, Dive In movies and the new Mermaid University. At the lagoons, the fun is fishing or taking a nature walk with Ranger Rick. After dinner, fireworks light up the sky every Saturday night all summer long. The 4th of July Freedom Fest and Labor Day Dreamcation weekends have even more themed festivities. Summer rates start from $169 per night. To book: scottsdaleprincess.com
FireSky Resort & Spa The deal: There are two summer offers and deals at FireSky Resort & Spa in Scottsdale. The Arizona Locals Package, from $139 per night for summer stays, includes deluxe accommodations and a daily $25 dining credit. The Cheers to Brews, from $149 per night for summer stays, includes deluxe accommodations, a welcome round of four beers and an appetizer in Taggia Bar. To book: fireskyresort.com or 800-528-7867 and mention rate code PBRO
Hassayampa Inn Fairmont Scottsdale Princess
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The deal: The Hassayampa Inn is just a short 90 minute drive north, located in the Historic District
of Prescott, this hotel offers comforting small town charm set near the sights and sounds of Prescott. It is walking distance to the courthouse square, eateries, antique and one-of-a-kind shops. To book: hassayampainn.com or 800-322-1927
Hotel Valley Ho The deal: Experience the ultimate summer stay starting at $149 nightly with the Stay2Play Package. Enjoy a $50 daily resort credit, two welcome drinks, complimentary upgraded internet and a special gift upon arrival. Stay between May 1 and Sept. 30. You must book by Sept. 5. To book: hotelvalleyho.com or call 480-376-2600.
Kimpton’s Amara Resort and Spa The deal: Kimpton’s Amara Resort and Spa in Sedona is offering Escape the Heat this summer. Stay dates from May 31 through Sept. 11. Rates are from $260 and include two welcome cocktails per stay. To book: amararesort.com and use rate code PHEAT
Kimpton’s Hotel Palomar Phoenix The deals: Hotel Palomar is offering several summer deals that are valid May 30 (Memorial Day) through Sept 5 (Labor Day). • $132 and a Bucket of Brew: Rates from $132 per night and includes a bucket of beer at Blue Hound Kitchen & Cocktails. Available for Sunday through Wednesday stays only. • 100 Days of Summer: Rates from $109. Includes a VIP discount card good for 10 percent off both Blue Hound and LUSTRE Rooftop Bar. • Tequila and Tan Lines: From $135. Includes a pitcher of margaritas at LUSTRE Rooftop Bar. • Uber Package: Flat room rate of $139 for king/queen and queen deluxe skyline rooms. Guest receives one $20 credit to use Uber per stay. To book: hotelpalomar-phoenix.com/
Youâ€™ll Love Every Minute Glendale, Arizona & the West Valley It is more than a perfect blend of the old and the new, the wild and the tame, the luxurious and the rustic. With so much to see and do, youâ€™ll love every minute of your visit. Call us for your personalized itinerary at 623.930.4500.
Glendale Visitor Center 5800 W. Glenn Dr., Suite 140, Glendale, Arizona VisitGlendale.com | #GlendaleAZ
HIP RETREAT: Set in Downtown’s Arts District, Hotel Valley Ho is a trendy vintage hotel dating to the 1950s and is a two-block walk from multiple restaurants and bars in Scottsdale. PROVIDED PHOTO
Lodge on the Desert The deal: “Stay More Play More.”
Celebrating 80 years on the old pueblo, Lodge on the Desert is an authentic staycation destination. Unplug and unwind by the pool, dine alfresco on the Saltillotiled patio or slumber in plush pillow-top beds. Stay two nights and save 10 percent; stay three nights and save 15 percent. To book: lodgeonthedesert.com and click on “promotions”
The McCormick Scottsdale The deal: The McCormick Scottsdale
is a newly renovated, idyllic retreat featuring stunning views of Camelback Lake, McCormick Ranch Golf Club and the McDowell Mountains. Golf, swimming, fishing and boating can all be enjoyed during a stay at this lakeside hotel. Packages begin at $99 and include room and daily $50 food and beverage credit. Complimentary shuttle service provided to downtown Scottsdale Friday and Saturday evenings. To book: themccormickhotel.reservations.com or 480-948-5050 40
AB | May - June 2016
The Phoenician The deal: Discover AAA Five Diamond
luxury at The Phoenician with rates starting at just $169 per night. Enhance your stay with signature spa specials at The Centre for WellBeing. Savor the experience with the Culinary Countdown Summer Dining Series, featuring $40, $30 and $20 menus at the resort’s most popular restaurants. Summer rate valid dates are May 27-Aug. 31. To book: 800-888-8234 and ask for rate plan SUMMER, or visit thephoenician.com/offers
Pointe Hilton Squaw Peak Resort The deal: This summer, “Amazing Memories” can be made at Pointe Hilton Squaw Peak Resort. All-suite accommodations, daily poolside activities, lazy river and waterslide, Saturday divein movies, spa & fitness centre, dining options all at rates as low as $109 per suite, per night, based on availability. To book: 800-HILTONS and ask for plan code SUNSP or visit squawpeakhilton.com and go to the “Specials” page.
Royal Palms Resort and Spa, A Destination Hotel The deal: Royal Palms is offering Luxe Lounging — rooms from $149 per night (available Memorial Day through Labor Day). Includes accommodations, two $40 Alvadora Spa credits, one $25 T. Cook’s credit and two welcome cocktails at The Mix Up Bar. To book: royalpalmssummer.com
The Scottsdale Resort The deal: Splash into the ‘70s, ‘80s and ‘90s this summer at The Scottsdale Resort with weekend live music and poolside movies from each of those iconic decades. Rates from $159 include $50 nightly food and beverage credit, two $25 Luna Spa vouchers and kids under 12 eat free. Offer subject to availability from May 26 until Sept. 6. To book: thescottsdaleresort.com or 800-540-0727. Use promo code SUMMER
Talking Stick Resort The deal: Experience world-class entertainment and mouthwatering cuisine at Talking Stick Resort. The
The real beauty of this moment is having the time to lose yourself in it. Your best summer yet awaits you at JW Marriott Desert Ridge Resort & Spa. Come to life and explore 316 acres of fun with ﬁve sparkling pools, lazy river and water slide, championship golf, award-winning spa, ﬁve restaurants, unlimited recreation and resort activities for every member of the family.
Come to Life Golf Package: rates starting at $179 plus a $50 resort credit, unlimited golf and free kids meals. Come to Life Spa Package: rates starting at $239 plus a $50 resort credit, one Swedish massage and free kids meals. Visit www.SummerAtJWDesertRidge.com.
Valid seven days a week through 9/15/16 based on availability. Packages are for up to two adults and three children (15 years and under) per guest room. Free golf oﬀer is available from 3:00 pm on the day of arrival and after 11:00 am each day after. Complimentary meals for children 12 years of age and under are from the kid’s menu in Meritage and stonegrill. Credit may be applied toward Marriott managed outlets only. Limited number of rooms are available for this promotion. Tax is additional. Oﬀer does not apply to groups of 10 or more rooms. Oﬀer cannot be combined with any other promotions. Blackout dates may apply. Advance reservations required. Other restrictions apply. Rates are per room, per night and based on availability at the time of reservations. ©2016 Marriott International.
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ARIZONA GETAWAYS property is offering a Hot Rates and Hot Dates promotion this summer, and rates start at $109. Stays are available June 1-Aug. 26, 2016, Sunday-Thursday only. Some blackout dates apply.
To book: talkingstickresort.com or call 866-877-9897
Tucson El Conquistador Golf & Tennis Resort The deal: “Conquer The Summer” at Hilton Tucson El Conquistador. The Conquistador’s newly renovated pool, new poolside cabanas and outdoor fire pits deliver the ultimate
MANY OPTIONS: Beyond an amazing pool, Wild Horse Pass Hotel & Casino offers seven dining options, including a 24hour cafe and a steakhouse. PROVIDED PHOTO
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indoor/outdoor resort experiences with dramatic views of the Santa Catalina Mountains. Rates are from $109 per night for summer stays Memorial Day through Labor Day. There is daily programming and activities for families and kids, including desert animal programs, Arizona star tours, cooking with the chef and poolside DJs. To book: hiltonelconquistador.com
We-Ko-Pa Resort & Conference Center The deal: Enjoy a one-night Sunsational Summer package at the We-Ko-Pa Resort & Conference Center that includes a deluxe
guest room, waived resort fee, $25 food and beverage credit, 25 percent off spa treatments and $10 casino slot play. As low as $99 per night. Valid June 1-Aug. 31; not valid on July 3 or July 4. To book: 480-789-5320
Wild Horse Pass Hotel & Casino The deal: Run wild at Wild Horse Pass Hotel & Casino with its Wild Nights Stay and Play Package. This package includes a $25 food and beverage credit and $10 table game match play. To book: 520-796-4900 or wingilariver.com
Tasting success Downtown Phoenix’s exploding dining scene drives the economy and tourism
By GIANNA TRACEY
he food scene in downtown Phoenix has gone to the next level and is thriving, opening up new opportunities for businesses and for people who like adventure. According to dtphx.org, there has been a plan to help create 60 new restaurants and bars downtown since 2008. And their research shows that from 2007-2013, revenue has increased 76 percent for restaurants, hotels and retail downtown. With this burst in business and options, downtown Phoenix has had the ability to host more conventions and events. For instance, Arizona just hosted Super Bowl 50 in 2015 and the 2016 College Football Playoff National Championship, where fans were able to enjoy the NFL Experience, concerts and food and drinks. In addition to the locals who came to enjoy the events, 1 million visitors visited downtown Phoenix for the two mega events. Scott Dunn, senior director of marketing and communications at Visit Phoenix said, “Without downtown’s new dining and nightlife options, those big events and conventions can’t be true crowd pleasers.” 44
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RETRO CHIC: Durant’s is an upscale, old-school chophouse serving steak, seafood and martinis in a vintage red-velvet setting.
Sparking the surge “Downtown is starting to see an increase in businesses relocating, college expansion and increase in residents, which have naturally attracted new restaurants to cater to the new needs,” said Shawn Connelly, managing partner for DeSoto Central Market. The ASU downtown campus, which opened in 2006, is also seen as a reason for the renewed life of downtown dining. There are more than 11,500 students downtown and those students bring new needs, wants and desires for restaurants to appease. Five years ago, Aaron Chamberlin started the process of opening his business — Phoenix Public Market Café — which is a four-minute walk from the ASU downtown campus. “I realized that there was a lot of things missing in the food industry, but one of them was a casual place for people to go to on a regular basis,” Chamberlin said. Chamberlin designed the Phoenix Public Market Café so that people can go anytime to do a multitude of things, like drink beer or coffee with friends, study on their computers, have dinner with family and more. Desaray Klimenko, a graduate student at the downtown ASU campus, has been coming downtown for more than four years. In the last couple of years, she said she not only comes downtown for school and work, but she also comes just to enjoy time with her family and friends due to the increased dining and attractions.
“I’ve seen a really huge growth in the businesses in downtown Phoenix,” Klimenko said. “So, not only restaurants, but even just like bars and places to go and see and things to do, which is awesome because I feel downtown Phoenix does have a lot of potential for growth, so it’s nice to see that we’re starting to have a lot more businesses that are mom-and-pop shops or individually owned that are starting to open up and bring in a younger crowd.”
CityScape effect Another reason for downtown’s improved dining is CityScape. This mixed-use design brought more than 20 entertainment and dining hot spots to its location, such as Arrogant Butcher, Tilted Kilt, Lucky Strike and Stand Up Live. Not only do people working downtown get to enjoy CityScape, but so do residents and visitors. CityScape has 224 apartments and the Kimpton’s Hotel Palomar attached to it, bringing in more people and visitors. However, according to Dunn, most of the out-of-town visitors come downtown for conventions, sports, concerts or meetings, not so much for the dining. “But, the evolution of the downtown dining scene and the national reputation of Roosevelt Row as a neighborhood worth checking out have certainly made downtown a must-see for visitors who come to the Valley for traditional reasons,” Dunn said. This emerging atmosphere includes more than 38 independently
UNIVERSAL ACCLAIM: Nationally recognized for its pizzas, Pizzeria Bianco’s small seating capacity can lead to wait times that sometimes surprise casual patrons. The restaurant features a wood-fired oven and homemade mozzarella cheese. PROVIDED PHOTO AB | May - June 2016
ARIZONA DINING owned restaurants downtown, each one with its own taste and style. People that don’t live in Phoenix or work in downtown still perceive it the same, according to Dunn. They don't see the multitude of independent restaurants. “Downtown might lack the sort of ‘bug light’ conglomeration of chain restaurants that attracts less-adventuresome eaters, but people who would rather discover a restaurant than have it thrust upon them are in high cotton,” Dunn said. And according to QSR Magazine, Phoenix was rated one of the top cities to start a new restaurant. “I think you’ll see more of the Valley’s best chefs hanging a shingle here in the next couple of years,” Dunn said.
Increased traffic The increase in traffic downtown has affected all business, but especially restaurants. Brian Richards, the
“...according to QSR Magazine, Phoenix was rated one of the top cities to start a new restaurant.” 46
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director of food and beverages at Blue Hound Kitchen & Cocktails, said that they have become so busy and highly recommended that people need reservations. “Business is definitely increasing year over year, there’s no doubt about that,” Richards said. “We’ve seen a very big increase in large party dining, which is really fantastic. That means more large parties are coming downtown to not only eat, but to go to more events. We stay extremely busy.” During summer when there aren’t as many tourists downtown, Richards said Blue Hound Kitchen & Cocktails puts up new programming to entice the locals around Phoenix. The fact that the restaurants are within walking distance not only pleases locals downtown, but also people visiting. Anyone can walk to one restaurant for a drink, another for an appetizer and one for dinner without having to drive. Brenda Soto Lucio has lived downtown for three years. She said that she saw an increase in small restaurants in less than a year. “Downtown has many attractions such as bars and places to shop, but restaurants are my main reason to love it,’ Soto Lucio said. “The culture in each place is very unique.” Dunn, who has also lived downtown for almost a decade, said he has “watched downtown transform into this simmering melting pot of urbanists and placemakers.” Downtown Phoenix is transforming. These changes are not only bringing more people downtown, but they are providing a variety of restaurants with an extended availability as well.
20 to try
Here are 20 independent restaurants in Central Phoenix that are delighting locals and visitors: Angels Trumpet Ale House, 810 N. 2nd St., Phoenix: Gastropub with 31 rotating taps of craft beer The Arrogant Butcher, 2 E. Jefferson St., Phoenix: Seafood, steaks, wine and cocktails, comfort food Barrio Cafe, 2814 N. 16th St., Phoenix: A neighborhood eatery providing authentic southern Mexico cuisine Beckett’s Table, 3717 E. Indian School Rd., Phoenix: A regional respite for comfort cuisine Blue Hound Kitchen & Cocktails, 2 E. Jefferson St., Phoenix: Contemporary American gastro-lounge The Breadfruit & Rum Bar, 108 E. Pierce St., Phoenix: Award-winning modern Jamaican cuisine Cibo, 603 N. 5th Ave., Phoenix: Amazing pizzeria tucked into a comfortable historic home Corduroy, 2601 N. Central Ave, Phoenix: Occupies a building built in 1928 for an old grocery market Coup Des Tartes, 1725 E. Osborn Rd., Phoenix: Consistently ranked as the city best French restaurant Desoto Central Market, 915 N. Central Ave., Phoenix: Combines several boutique eateries under one roof Durant’s Fine Foods, 2611 N. Central Ave., Phoenix: One of Phoenix’s legendary restaurants The Henry, 4455 E. Camelback Rd., Phoenix: Ideal place to grab lunch with a colleague or dinner with family La Piazza PHX, 1 N. 1st St., Phoenix: Continually ranked one of the best pizzerias in the city Los Dos Molinos, 8646 S. Central Ave., Phoenix: Spicy Mexican dishes and margarita pitchers Moira Sushi Bar & Kitchen, 215 E. McKinley St., Phoenix: Expands on the Japanese tradition with bold flavors Pizzeria Bianco, 623 E. Adams St., Phoenix: Cozy, brickwalled restaurant serving wood-fired pizzas Postino Winecafe, 5144 N. Central Ave., Phoenix: Italian cafe serving a wide selection of bruschetta and wine Quiessence at The Farm, 6106 S. 32nd St., Phoenix: Set in a historic home with a warm country feel The VIG Fillmore, 606 N. 4th Ave., Phoenix: Located in the historic 100-year-old Cavness House Windsor, 5223 N. Central Ave., Phoenix: Global comfort food and retro cocktails
Cancer Moonshot Initiative pushes Valley innovation Why isn’t Arizona using more renewable energy? Arizona’s assets could boost aerospace industry Education rises to support knowledge-based economy Kjell Stakkestad is president and CEO of Tempe-based KinetX Aerospace.
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mind What are the keys to growing a knowledge economy in Arizona? By Michael Gossie
ou don’t hear many people in Arizona use the C-words these days. It’s become archaic. We are talking, of course, about Arizona’s economy and the fact that there was a time when it was defined by the five Cs — copper, cattle, cotton, citrus and climate. They were the forces that drove Arizona’s economy and students even learned about them in school. Times have certainly changed. AB | May - June 2016
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The C-words that drive Arizona’s economy today are computers, chips, cancer research, the Cloud and cutting-edge technology. And it’s a proven fact that a knowledge-based economy is good business for Arizona. “As proven over the past 14 years, the State of Arizona’s investment in the biosciences has provided a solid return,” says Dr. Jeffrey Trent, president and research director of the Translational Genomics Research Institute (TGen). “TGen’s (return on investment) provides an annual economic impact that now exceeds $174 million. Over the next decade, we will see unparalleled advances in the biomedical sciences, due in great part to the seed money provided by the Arizona Legislature.” But how does Arizona bury those archaic C-words for good and make sure success stories like TGen drive Arizona’s knowledgebased economy into a more stable future? “Only when we can claim measurable graduates in STEM fields, who then choose to stay in Arizona, can we attract the number and caliber of high-paying jobs to the state,” says Ed Zito, president of Alliance Bank of Arizona. To make that happen, Zito says this is what companies need to do: • Support STEM programs in local schools with both dollars and corporate projects. • Offer high school internships to draw clear road maps to career pathways. • Act as brand ambassadors for the state as you deal with out-ofstate customers. “It is also important to recognize that funding education needs to be considered an investment, not an expenditure,” Zito says. “This all starts with the needed passage of Prop 123, which provides $3.5 billion to K-12 education over 10 years.” Another way to continue building the base for a knowledge-
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based economy, business leaders say, is for industry leaders and public institutions to be open to working together for the advancement of Arizona’s future economy. “An example of this is the 30-year academic affiliation agreement established between the University of Arizona and Banner Health,” says Kathy Bollinger, executive vice president or academic delivery for Banner Health. “This historic public-private partnership, that just completed its first year, supports cutting edge teaching, research and patient care while creating a supply of new physicians for Arizona for decades to come.” Az Business talked with other leaders in HEAT — healthcare, energy, aerospace, technology — to get their take on what needs to be done to boost Arizona’s knowledge-based economy.
Healthcare Kenneth Briggs, associate, Polsinelli: “Stakeholders in healthcare need to understand how to analyze and use healthcare data collected from payors, patients, and providers. Data generated from healthcare services is increasingly becoming the basis for payment and a basis for change in the way services are delivered. Arizona healthcare stakeholders can improve their position by expanding opportunities for collaboration and integration with providers across the healthcare spectrum. The Arizona Biomedical Corridor is a great step in the right direction. Opportunities from increased collaboration and integration will leverage data to provide more efficient services, improve quality, and increase the likelihood of receiving payment for the full range of their services.” Michele Finney, Market CEO, Abrazo Community Health Network: “As we move to Population Health Management rather
than just caring for the patient who presents himself or herself in front of us, the healthcare industry will need to rely on data
Michelle De Blasi
and technology to both understand the health needs of the population as well as to address them. Technology in healthcare, in communications and in analyzing data are all going to be essential elements to successful population management.” Jake Golich, administrator, Tempe St. Luke’s Hospital:
“As the healthcare environment and industry is rapidly changing, it will be key to disseminate information on a real time basis. With consumers becoming increasingly more involved in their personal healthcare decision making, they want to see meaningful and real data that can translate into making appropriate decisions. Currently, the majority of data is retrospective and unfortunately often times many changes in care have occurred that skews that data.” Becky Kuhn, executive vice president of community delivery, Banner Health: “Arizona can bolster its knowledge-
based economy through the development of a stronger technology industry. Using electronic medical records, teleHealth and other technological advancements Banner Health has improved patient safety and mortality, delivers better patient outcomes and can provide more advanced care in remote areas of our state. Health care will continue to benefit from technology that allows us to improve patient outcomes while reducing the cost of delivering health care.” Alan Nelson, PhD, founder, chairman and CEO, VisionGate:
“Because companies like VisionGate are often hiring for jobs that don’t exist anywhere else today, I think the business leaders should work alongside the lawmakers to help ensure candidates with the right training and education are available to be sourced locally. To keep the brightest minds here, they need innovative companies in which to work. And to keep, grow and attract the most innovative
companies, we need to think about what those ‘jobs of tomorrow’ require of us today.”
Energy Mark Bonsall, general manager and CEO, SRP: “While we all play different roles, one common theme we should continue to follow is enhance Arizona’s brand as business friendly, entrepreneurial, strategically located and a terrific place for your business and your employees to be domiciled. It’s also critical that we continue to promote a vibrant and highly respected higher education infrastructure. There are a lot of good things happening – business expansion, businesses moving here, support for education (Prop 123), a governor with an excellent business mind, and a business community that deeply wants Arizona not only to succeed, but succeed robustly. SRP has one of the most high-tech electric grids in the nation, and a world-renowned system of water storage, delivery, and management mechanisms. We are funding groundbreaking research on forest management through NAU and are working with businesses across the state to secure stable and productive watersheds. We encourage others to continue doing their part to help grow Arizona’s economy.” Michelle De Blasi, director, Fennemore Craig and co-chair of the Arizona Energy Consortium: “True civic leadership will
continue the growth of Arizona’s knowledge-based economy. This means taking decision making out of the political realm and bringing together both public and private sector leaders at every level to roll up their sleeves and make some difficult decisions for the benefit of all Arizonans. We’ve seen past examples of this successful collaboration, such as the creation of the Bioscience Roadmap that led to 30,000 new bioscience and hospital jobs and the addition of
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200 new firms in the first decade. To be successful, the discourse must be one that respects differences and seeks common ground.”
Aerospace Rick Kettner, Gilbert site director, Orbital ATK: “The key to growing Arizona’s knowledge-based economy centers on a tighter partnership between Arizona’s academic, business and government institutions. There are currently a number of challenges along the path that takes a young STEM student all the way to being a contributing member of the economy. These three pillars — government, business, education — of the community need to look at this pathway as a collaborative effort, all working together to produce an individual capable of innovating and challenging the future of Arizona.” Shawn Linam, co-founder and CEO, Qwaltec: “When I first came to Arizona, kids who were interested in science and technology tended to leave the state and we were losing our knowledge base. The STEM emphasis in the state is important to maintaining that knowledge base, but they need to know that there is somewhere to go in Arizona. In the past, all they saw was
real estate and construction, but if they can see that there are local technology start-ups and employers, that the universities are focused on technology transfers and technology start-ups, that works together and flows down to the high schools and middle school and allows us to retain talent and attract new talent.” Kjell Stakkestad, president and CEO, KinetX Aerospace: “If we had a vibrant advocacy group fighting for the aerospace industry, you would see commercial space and space work in Arizona grow dramatically. Arizona is a place where people want to come. The only drawback is that we have to do something about the education system. When people come and we try to attract people here, they say, ‘You’re 49th in education.’ I remind them that we have small pockets that are the best in the country. The problem is you want the statewide education system to work that way.” Peter Vedder, director of strategic development, KinetX Aerospace: “There are two tiers where Arizona’s aerospace industry
needs help — the first is the advocacy and the visibility side and the second is the economic front. There has been a very disjoint set of philosophies as to where the (aerospace) industry advocacy should
The future of Arizona’s knowledge-based economy will be a direct correlation of our ability to attract, develop and retain talent... 56
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come from. Should it come at the state level? Should the state as an entity, through something like the Arizona Commerce Authority, be the organization that is the focal point for representing aerospace to the world? Or should it be a private, nonprofit organization that represents the industry. Colorado and Florida both have successful nonprofits which advocate for the industry. We need a consistent vision for what the state should do. On the economic side, what types of programs could cities, counties, the state offer? Is it matching grants, R&D tax credits, zones that are designed for lower taxes based on the types of research you’re doing? That’s what is needed for this industry to flourish.”
the state as a hub for certain industries such as technology. This will bring a lot of positive attention to Arizona and as well create more jobs and revenue.”
Nate Reis, founder and CEO, Railway Technologies: “The future of Arizona’s knowledge-based economy will be a direct correlation of our ability to attract, develop and retain talent which is largely dependent upon access to capital. Community support for our startup community is growing. It’s critical we put a few wins on the board to develop a reputation for investors and entrepreneurs that Arizona has what it takes to build companies with a high probability of success.”
Jacob DiMartino, founder and CEO, RAADR, Inc.: “I think we
need to work as an ecosystem more closely. We should be helping everyone elevate his or her businesses. We can do this by working together through partnerships and competing for bringing more dollars into Arizona for all sizes of businesses alike. This would really strengthen our economy in Arizona. More than that, we need to proactively get others outside Arizona to start recognizing
Tomas Gorny, CEO, Nextiva: “I believe it’s less about policy, and more about providing opportunities that challenge and excite people. Arizona is a great place to live and a friendly state for doing business. We need to keep a pulse on what businesses are doing both locally and across the country so we can stay competitive and keep top talent here to grow with us. Bringing national awareness to the innovative companies and career opportunities right here in Arizona is going to be vital to our growth and success.”
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Century The importance of Cancer Moonshot 2020 to healthcare innovation in Arizona 60
AB | May - June 2016
n February, the state of Arizona took another leap forward in its evolution as a national hub of innovation, technology and bioscience. As part of the aspirational Cancer Moonshot 2020 announced by Vice President Joe Biden and spearheaded by renowned doctor and health care entrepreneur Patrick Soon-Shiong, Phoenix Children’s will assume the national lead position for the Pediatrics Consortium of this bold and transformational initiative. Cancer Moonshot 2020 is the nation’s most comprehensive cancer collaborative initiative aimed at accelerating genomics and immunotherapy as the next-generation standard of care for cancer patients. Its trajectory and vision emulate John F. Kennedy’s historic “man on the moon” call: utilize the nation’s Robert L. Meyer capabilities and resources Healthcare to their maximum potential with the goal of achieving something never done before. Cancer’s grip on the health of our nation is overwhelming and disastrous. The National Cancer Institute reports that approximately 40 percent of men and women will be diagnosed at some point during their lifetime. For many, it’s a death sentence. Sadly, children are profoundly affected, too. Pediatric cancers take the lives of more children than AIDS, asthma, diabetes, cystic fibrosis and congenital anomalies combined, yet pediatric cancer continues to be one of the most overlooked and underfunded categories of all cancer research. In 2016 alone, 10,380 children under the age of 15 will be diagnosed nationwide with this affliction. Cure rates for some pediatric cancers remain below 50 percent, and a full 70 percent of survivors experience serious or even life-threatening side effects later in life from the toxic drugs used to treat their cancer. The time is ripe for leaders in health care, research, education and the business community to fundamentally change the way we treat cancer. The pediatric consortium’s primary mission is to advance benchto-bedside translation of genomic technology to prevent, treat and manage pediatric diseases, first in cancer and then in other conditions. Phoenix Children’s is joined by eight other esteemed children’s hospitals across the country in founding this alliance. Together, we are unified around the vision of the national Cancer Moonshot 2020 of knowledge sharing, collaboration and integration among health care, medical, academic and scientific communities. And it is no accident that the center of this visionary initiative is the state of Arizona and metro Phoenix. As
President Kennedy stated in that daring 1962 speech: “We meet at a college noted for knowledge, in a city noted for progress, in a state noted for strength, and we stand in need of all three, for we meet in an hour of change and challenge.” Dr. Soon-Shiong and the dedicated professionals associated with this most important endeavor understood that we have the amazing schools noted for knowledge and innovation: Arizona State University, The University of Arizona and others. We are a city noted for progress in economic growth with great companies and extraordinary human talent. And we are a state noted for strength; in our schools and health care and the fiery spirit of entrepreneurship, which has spurred so much of our success. Phoenix Children’s leads the consortium in this epic climb with the firmly established infrastructure of the Chan SoonShiong Children’s Precision Medicine Institute at Phoenix Children’s Hospital. At the heart of Cancer Moonshot 2020 is precision medicine, the new tool to fight cancer. Utilizing genomic sequencing analysis to identify a patient’s genetic and proteomic makeup, bioinformaticians can create a precise therapy based on the individual’s susceptibility to disease and predict the subsequent response to a particular drug. As data is collected and disseminated to researchers, we will develop pharmaceutical combinations that increase potency and efficacy in treating each patient’s cancer. The Chan Soon-Shiong Children’s Precision Medicine Institute at Phoenix Children’s Hospital offers whole genome sequencing, RNA sequencing and proteomics. As the consortium leader, an advanced technology ecosystem including a High Performance Computing Platform enables the Institute to offer high-throughput, complex genomic analysis to researchers across the country; a direct high-speed fiber connection for rapid transfer of genomic data and a comprehensive cancer population management platform designed not just to collect and analyze clinical data, but to actively assist in the comprehensive clinical management of patients’ lives. This is all happening here in Arizona – the vibrant and dynamic epicenter of world-class research, innovation and scientific advancement. This is just the beginning, as from around the state, leaders in medicine, education, commerce, political and community organizations will join together in the spirit of collaboration and invention. With each success comes an even more dogged determination to find solutions to the problems that confront us. Arizona’s incredible talent will drive our progress forward, and at Phoenix Children’s we are honored to pick up the mantle of discovery to find new treatments for cancer. As Kennedy said: “If this capsule history of our progress teaches us anything, it is that man, in his quest for knowledge and progress, is determined and cannot be deterred.”
“Cancer Moonshot 2020 is the nation’s most comprehensive cancer collaborative initiative...”
Robert L. Meyer is president and CEO of Phoenix Children’s Hospital. AB | May - June 2016
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cloudy Why isnâ€™t sunny Arizona leading the nation in solar energy use? 64
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By JESSE A. MILLARD
olar energy used to be a backyard hobby. Because of high costs, the emerging technology was a pipe dream for most, but as the green movement gained traction and the price decreased, solar has become a viable energy source of the future. In 2008, President Barrack Obama’s economic recovery included the Solar Investment Tax Credit, which poured more money into the solar industry than anything that came before it. Annual solar installations have grown 76 percent since the incentives were implemented, while employment related to the solar industry has grown 86 percent, effectively lowering the cost of solar, according to the Solar Energy Industries Association. The incentives were supposed to expire at the end of 2016, but have been extended to 2022. Under the new extension, the Solar Energy Industries Association expects solar to account for 3.5 percent of U.S. electricity generation, up from .1 percent in 2010. Phoenix boasts 300 days of sunshine a year, which would make many folks believe Arizona would be the capital of solar in the country. But it’s not. California is. California has consistently beat the state in solar installations, topping out at 3,549 megawatts installed in 2014, with only a slight decline to 3,266 in 2015, according to the U.S. Solar Market Insight. In 2013, Arizona ranked second across in nation for photovoltaic solar installations, with 421 megawatts installed, but has since dropped to sixth nationally, with 234 megawatts installed across the state in 2015, according to the Market Insight report.
Michelle De Blasi
Nasty public battles between the solar industry, utilities and the state’s government over net metering have been ongoing for years, which is what some experts cite as the cause for the drop in solar installations in the state. Dan Whitten, vice president of communications at the Solar Energy Industries Association, says Arizona’s policy environment has not been as welcoming as it should be. It relates back to extra charges that have been placed on customers who are producing their own solar, he explains. Solar consumers ought to be able to sell extra energy they produce to their neighbor at the same price the neighbor would pay for other electricity, he says. There has to be a path forward on how to allocate the funds in a reasonable way, but utilities have been unfailingly unbalanced in how to do that, Whitten claims. Industry experts, like Jim Arwood, who has been working in the solar industry since the 1970s, says the Environmental Protection Agency’s Clean Power Plan will usher a green revolution throughout the country and in Arizona. “If the Clean Power Plan goes into place, it will build upon (the Solar Investment Tax Credit),” Arwood says. “Between the two of them, between 2009 to 2020 we will have re-invented the century-old energy infrastructure and our dependence on fossil fuels.” The Clean Power Plan would create the final emission guidelines for states to follow in order to reduce greenhouse gas emissions from fossil fuels. States will make up their own plans with help from the guidelines. But the Supreme Court stayed the Clean Power Plan in early February. Some states have continued to work with the EPA in implementing the Clean Power Plan, despite the stay. Before the stay was announced, Arizona led the charge, along with 26 other states, in filing a suit against the Clean Power Plan after a federal appeals court declined to block a rule that limits carbon emissions from plants. In a statement released early this year, Chris Davey the Arizona Corporation Commission — the Arizona regulatory agency in charge of protecting rate payers from large utility increases — said “the plan will devastate the coal industry, resulting in job losses and skyrocketing electricity bills for customers.” The plan would cost more than $25 billion annually and consumers would see a 10 percent or more increase in energy bills, according to the Corporation Commission’s January statement. In an email statement from Gov.
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Energy Doug Ducey’s office, Daniel Ruiz says energy policy that has an impact on Arizona shouldn’t be coming from Washington D.C., but from the state itself.
The Clean Power Plan and blackouts Under the initial proposal of the Clean Power Plan, Arizona would have had blackouts, says Arizona Corporation Commission Chairman Doug Little. The original ruling called for all coal production to be eliminated by 2020, Little says. Currently, nearly 40 percent of Arizona’s energy is generated by coal, according to the U.S. Energy Information Administration. Little says the original requirements were impossible to meet and replacing the state’s coal portfolio would have put the reliability of Arizona energy at risk. States and utilities are encouraged to develop more renewable energy, and are discouraged from implementing more coal through the Clean Power Plan, Little says. Even without the Clean Power Plan, utilities are starting to focus on natural gas generation because of its low prices, and due to the expectation the price will stay low for some time, Little says. The Corporation Commission worked successfully with the EPA in changing the original rules, creating a glide path for Arizona, Little says. “The glide path allows us to use the coal plants until the end of their life cycle and replace them at an appropriate time at the end of their cycle, instead of an unnatural time point,” he says. Arizona will purchase emission reduction credits to stay within the emission targets the Clean Power Plan will set up, Little says. And for now, the state plans to replace its coal fleet with natural gas, he says, changing the state’s energy portfolio from around 30 percent gas to 40 percent. Thanks to the glide path and changes that have been made to the Clean Power Plan, Little says the plan is now achievable for Arizona. But the state still opposes the rules. The chairman warns rates will increase if the Clean Power Plan is implemented. There will be expenses to implement more pollution controls on the power plants and it will cost the state money to eventually replace those coal plants, he says. But when it comes to rate increases and extra expenses being forced upon businesses and the rate payer via the Clean Power Plan, Arwood says that’s short-sighted. Arwood believes the Clean Power Plan is all about combating climate change and how it will effect businesses and consumers. “If you want to talk about hurting business and stuff like that, the impact of climate change will do more harm, in greater numbers, than the Clean Power Plan will impact jobs, costs, industries and commerce in Arizona,” Arwood says. Despite all of this, the Corporation Commission is not trying to kill solar, Little says. And he, along with the governor, believe that solar has a bright future amongst the state’s energy mix. In the coming years, Arizona will see an increase of renewables to the current energy portfolio and solar will play a big role in that, Little says.
Rising tides don’t raise all ships Chris Davey moved from Austrailia to Arizona eight years ago. He’s the president of EnviroMission, the developers of Solar Tower technology, and he believes the solar industry has sort of shot its own foot. “The solar industry out here is incredibly fragmented and that’s evidenced by a continual lack of messaging around the solar space,” Davey says. 66
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Energy Many of the sectors in the solar industry, whether it’s installers, or manufacturers, have an “us vs. them” mentality, which really hurts the industry, he explains. It’s all about the messaging, Davey believes. A vocal minority has been boasting solar’s cost effectiveness, Davey says. If that’s true, then Clean Power Plan or no Clean Power Plan, solar would be a logical choice. But it doesn’t seem solar is the logical choice, because utilities across the country are starting to focus more on gas power because of low prices and the advent of fracking, a controversial drilling technique that has opened up access to many natural gas reserves that were previously inaccessible. When the Salt River Project plans for its future energy portfolio, it makes sure to use the least expensive resources, says Tom Cooper, SRP’s director of resource planning and development. And right now, prices have been especially low, but solar prices are dropping too, he added. The energy portfolio’s future depends on many factors and SRP will go the most cost effective way, Cooper explains. The story the energy industry should be selling, Davey says, is the one about jobs. Solar can create green jobs, further diversifying Arizona’s economy and helping the state become a regional player that delivers power without wasting water, he explains. “It’s not about climate change or the feel good that comes with solar, it’s about why it makes sense,” Davey says.
Lost opportunities As utilities, regulators and the solar industry battle it out, solar’s future in Arizona remains uncertain. And that uncertainty can cost the state. Michelle De Blasi, co-chair of the Arizona Energy Consortium and a director at Fennemore Craig, says we’re not just losing solar installations, but also businesses. Over the years, businesses have been relocating headquarters and planning major manufacturing projects, with Arizona being a possible home to those economic developments. Arizona has been business-tax friendly for years, but that’s not the only factor businesses consider when making major moves. What’s the energy policy like? What’s the education policy like? De Blasi says as the future of solar remains uncertain, Arizona is losing business opportunities and the state should be looking at the whole economic picture, not just solar. Stakeholders need certainty in the solar policy in order to move forward, she says. The best way for solar to move forward is for folks to start compromising and it will hopefully come in the future, she says. “What is certain is that if we don’t have a meeting of the minds, it’s going to be a challenge to be effective in this state,” De Blasi says. “And (solar) may continue to dwindle.”
Arizona solar facts In 2006, the Arizona Corporation Commission approved the Renewable Energy Standard and Tariff, which requires the regulated electric utilities in the state to have 15 percent of their energy produced by renewable resources by 2025. • Each regulated utility has to file annual reports about how they implement the newest requirements, and the rules have led the way to Arizona’s renewable future.
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• The first solar photovoltaic commercial facility opened in Arizona in 1997. More recently, one of the world’s largest solar projects — the $1.8 billion Agua Caliente Solar Project — came online in 2014. • The Agua Caliente project produces 250 megawatts, which is enough to power 35,500 homes. • Arizona Public Service’s solar capacity sits at 875 megawatts, which produces enough energy for 220,000 homes.
• The Salt River Project set a renewable energy goal to have 20 percent of its retail energy requirements filled with sustainable resources by 2020, a benchmark the utility says it will meet at its current pace. • According to the U.S. Energy Information Association, solar energy contributed less than three percent to Arizona’s net electricity generation, but that number is a 50 percent increase from the previous year.
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How does the aerospace industry impact Arizona’s economy? 70
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By AUDREY WEIL, CRONKITE NEWS
he world’s premier attack helicopter is made only in Mesa, and it’s one of the many reasons Arizona ranks fourth in the nation in employment for aerospace and defense manufacturing. “Even though, they’re working here in Mesa, Arizona, they’re making a difference in Afghanistan, they’re making a difference in Saudi Arabia, they’re making a difference in Asia Pacific,” said Mark Ballew, director of global sales and marketing for Boeing Attack Helicopter Programs. According to the Arizona Commerce Authority, Arizona trails only California, Washington and Texas in employment for aerospace and defense manufacturing. Boeing, one of the state’s major defense contractors, has been producing AH-64 Apache attack helicopters in Mesa since the early 80’s. “Historically, it’s been about a quality workforce, affordable land, favorable tax and regulatory environment, and all of that put together has created quite a strong climate for aerospace and defense contractors,” Arizona State University W.P. Carey School of Business Professor Dennis Hoffman said. Currently, 52,592 Arizonans work in aerospace and defense, according to the ACA. Approximately 4,300 of them work for Boeing. The industry continues to grow. The ACA said Arizona’s aerospace and defense exports rose nearly 22 percent from 2011 to 2014, and experts predict industry employment will increase 10 percent each year through 2018. But as established companies like Boeing flourish, attracting new companies to the state can be difficult, and other industries haven’t been as successful. Arizona dropped from 13th to 34th last year in CNBC’s state rankings for business. “It’s a challenge because you’ve described what every development organization, every state, every city, region is aspiring to,” Hoffman said. “How do we get mobile capital to locate in our state?” As Arizona competes with other states for capital, certain characteristics set it apart in the aerospace and defense industry. “We have a number of advantages when it comes to aerospace defense, most of it is air space, wide open spaces, places for them to test aircraft, places for defense systems to operate,” Hoffman said. The Boeing plant in Mesa has solid production through 2026, but Ballew said the U.S. Army could be using Apaches through 2070.
Arizona’s advantages in aerospace and defense Located west of Phoenix, Luke Air Force Base is home to the 56th Fighter Wing, the largest fighter wing in the world and the only active-duty Air Force F-16 training wing, and also operates as the sole pilot training center for the F-35A Lightning II.
Fort Huachuca in southern Arizona is the largest unmanned aerial systems (UAS) training facility in the world. The $10 million facility contains 25,000 square feet of space and 10 simulators.
The Yuma Proving Ground in western Arizona is the secondlargest military installation in the world, spread over 838,000 acres, roughly the size of Rhode Island.
Within the state, there are 15 industry and trade associations for aerospace & defense.
Source: Arizona Commerce Authority AB | May - June 2016
RISE Tucson-based World View plans to offer balloon rides to space By BEN BROWN, CRONKITE NEWS
pace, a place that seems foreign to us earthlings, could be the next hot trip destination for the public. One Tucsonbased company plans to offer space tourism in two years. “The sun comes up. You see these amazing colors,” said Taber MacCallum, World View chief technology officer. “Our cameras have captured some phenomenal sunrises from the edge of space.” World View specializes in high-altitude balloon flights they use for scientific research. MacCallum said they plan to expand to their services to the public. “One of the things we want to do is offer people a way to change their world view – not only by going to the edge of space, but by providing instrumentation and scientific ways of understanding our Earth with unmanned balloons as well,” MacCallum said. A capsule attached to the balloon will carry six passengers and two crewmembers as they float 100,000 feet up to the stratosphere. The trip takes several hours to complete.
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“The balloon we’re using is known as a zero pressure and that just has to do with differential pressure of the atmosphere,” said Eli Todd, World View manufacturing technician. As the balloon leaves Earth, the gas inside it will expand and lift the capsule. It will expand so much that a football stadium could fit inside the balloon once fully inflated. And don’t worry, there’s Wi-Fi on the capsule as well. “You see the terminus of light coming below you, lighting up the ground, watching morning happen on our Earth,” MacCallum said. “Hang out there for a few more hours, have a drink at the bar, ultimate status update on Facebook.” But, this adventure of a lifetime comes with a price – $75,000 per person to be exact. World View plans on launching its first manned flights in 2018 out of Tucson and possibly Page.
SKY’S THE LIMIT: World View plans to start taking passengers to the outermost edge of earth’s atmosphere in high-altitude balloons by 2018. CRONKITE NEWS
Impact players Major aerospace and defense operations
Among the companies taking advantage of Arizona’s favorable aerospace and defense climate are: • Raytheon • Honeywell International • General Dynamics C4 Systems • The Boeing Company • Northrop Grumman • Orbital Sciences Corporation • United Technologies • L3 Communications • Standard Aero (MRO) • Bombardier Inc. • Nammo Talley
Aerospace and defense fast facts
• Arizona ranks No. 1 in employment in guided missile systems manufacturing. • A 2015 study by the International Trade Administration revealed that Arizona’s aerospace and defense total exports rose by more than 21.8 percent from 2011 to 2014, reaching a $3.47 billion total. The increase was primarily due to a near $400 million increase in aircraft, engines and parts exports. • Arizona is No. 4 for employment in space and defense systems manufacturing. • Arizona is No. 4 for employment in aviation and aerospace manufacturing. • According to a 2012 Deloitte study, Arizona ranks fourth nationwide in aerospace industry payroll and fourth in aerospace revenue at $14.99 billion. • Arizona has the nation’s third-largest A&D supply chain, responsible for the third-largest contribution to GDP by state in the nation. • Arizona is No. 6 for employment in maintenance repair and overhaul occupations. • Arizona is in the Top 10 for employment in aviation and aerospace services.
making lasting change. Here’s to the recipients of the AZ Business Magazine 2016 Healthcare Leadership Awards. Thank you for making a real difference in the community.
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BIGGEST GROWTH STORY
Ed-tech may be the key to fueling state’s knowledge-based economy
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he Valley’s educational technology (ed-tech) scene has been growing critical mass for decades and odds are it’s not going to stop anytime soon. John Sperling was ahead of the curve in 1976 when he founded for-profit University of Phoenix with the mission to educate working adults. In 1989, the university launched its online program, which grew to be the largest student body in North America in 1997, according to the school. U.S. News & World Report recently named Arizona State University the country’s “most innovative school.” It beat out Stanford University and Steven G. Zylstra the Massachusetts Institute Technology of Technology, which ranked second and third, respectively. In 2014, ASU unveiled the Starbucks College Achievement Plan, a partnership with the coffee company and coffeehouse chain that offers full tuition reimbursement to Starbucks employees who pursue an online degree through ASU. And last year, ASU debuted its Global Freshman Academy, in which students can take online classes and decide after completion whether they want to pay for the credits, which are offered at a rate of $200 per hour. Yuma-based Carpe Diem Collegiate High School and Middle School has used technology to upend the way students are taught, forging a new K-12 academic model that has drawn attention nationwide. Students split their time between online instruction and face-to-face critical thinking workshops in a “blended learning” approach. In 2012, Carpe Diem was ranked among Arizona’s Top 10 highest-performing charter schools, having boosted its graduation rate to almost 90 percent. In a major coup for Phoenix, computer-coding school Galvanize plans to open a downtown campus this fall. The Denver-based company specializes in a six-month training program to create a new pipeline of tech-savvy workers. In addition to the innovation occurring in our schools and universities, our ed-tech entrepreneurs have also been putting Arizona on the map. Founded by serial entrepreneur Matt Pittinsky, Blackboard arguably is the most successful ed-tech company in the country — possibly the world — with its software being used in more than 100 countries. After founding Blackboard, Pittinsky invested in Los Angelesbased Docufide, moved it to Scottsdale and renamed it Parchment. Since then, the company has raised more than $50 million in venture capital and facilitated the exchange of more than 20 million academic credentials. Another success story can be found in CampusLogic. The Gilbert-based company is behind self-service student financial aid software that was last year’s winner of Venture Madness, presented by Invest Southwest in partnership with the Arizona Commerce Authority. CampusLogic already has raised over $4 million in its seed round. Our lawmakers are also doing their part. Working hand in
“U.S. News & World Report recently named Arizona State University the country’s “most innovative school.”
hand with the Arizona Technology Council, Reps. Tom Forese, R-Gilbert, and Ruben Gallego, D-Phoenix, in 2014 spearheaded the passage of HB 2265 that permits school district governing boards to count computer science courses as the math courses required for graduation. It sent a strong message to our community that Arizona is a high-tech state and computer science is one of our priorities. Gov. Doug Ducey’s recent blessing for restoring funds to joint technical education districts (JTEDs) also sent a clear signal that he values technical education. JTEDs are set up by school districts to provide training in technical fields such as health care, which can require expensive equipment or supplies that can make them unaffordable to any single school. The deal will help JTED programs in the state and provide their 100,000 enrolled students some relief. Ed-tech remains one of the most exciting areas of economic development in Arizona and is perhaps the biggest growth story of our state. If we continue to work together, we can build an even stronger knowledge-based economy with high-paying jobs that will have a positive impact on generations to come. Steven G. Zylstra is president and CEO of the Arizona Technology Council. AB | May - June 2016
Large tech companies are critical to a startup community
uring a recent interview on the local tech startup community, I was asked to list the features of a vibrant startup ecosystem. I ticked off the standard items like access to capital, research universities, smart people, support and a positive regulatory and tax environment. But I felt like something was missing. Later that week, I met some other seasoned business owners and we started talking about the large corporations we came from. That was the missing piece. Lightbulb over head: Strong and highly technical Eric Miller large companies are Technology critical to a startup ecosystem, and especially for hardware startups. Although it makes for a great story, not a lot of entrepreneurs I’ve met go directly from school into launching new companies. They usually gain experience and build their network at a large firm. This was reinforced while I was reading applications for the 2016 Venture Madness competition. Many of the strong entries list a major employer when they describe their key team member’s background. The three of us who co-own PADT actually developed our technical expertise while working at Honeywell Aerospace, a division that started as Garrett Turbine Engines. We also learned how to work in teams, manage projects and interact with vendors. Equally important is the network we developed. Almost 22 years later and many of the people we do business with and experts we get advice from are people we met while designing, simulating and prototyping turbine engines. Many of our successful customers can trace their heritage to Motorola and its descendants. Medtronic and TGen have contributed many of 76
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the key entrepreneurs to the Arizona biotech space. Intel, Raytheon, IBM, ASM America and many others also play critical roles. Even if the startup founders didn’t come from a large tech company, many of their key employees did. And don’t forget that money part. Many of the state’s investors obtained their capital from working at large corporations. Those companies are often the biggest customers, and eventual acquirers of startups. The taxes they and their employees pay fund our education system and government support for startups. Those of us who are dedicated to strengthening the startup ecosystem in the state should be mindful of the roll big tech plays. The relationship is symbiotic because the big firms in turn get technology and talented employees from startups. And that success increases income and tax revenue in the state, benefitting everyone. Startups are cool these days. There is no HBO show called “Electrodyne: The Corporation.” Even without a hit TV show, big tech is still important. We should all remember that and work to attract and keep large technology employers, make it easier for them to spin off tech as small companies and encourage them to participate in the startup community. It takes the big and the small to build a strong technology business ecosystem. Eric Miller is a principal at PADT Inc. He is often called on to speak on the use of simulation and 3D printing to enhance product development.
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This event is the most prestigious financial executive awards in Arizona and the one not to miss!
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