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NOVEMBER // DECEMBER 2017
BEST STOCKS IN ARIZONA
$4.95 $4.95
5 HOLIDAY PLANNING
EXPERTS GIVE TIPS TO GROW WEALTH IN 2018
34
CFO OF THE YEAR AWARDS
Steve Sanghi, CEO, Microchip Technology
44
ARIZONA BANKERS ASSOCIATION
81
ARIZONA FORWARD
97
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Table of Contents 6
Trendsetters
12
CEO Series
14
Law
Companies that
GIVE BACK
are gifts to us all
20
Healthcare
24
Small Business
26
Technology
32
Marketing
34
Holiday Parties
38
Holiday Venues
42 Dining
12 I
26
44 CFO of the Year 74 Wealth Management 81 Arizona Bankers Association 97 Arizona Forward
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On the cover: Steve Sanghi, CEO, Microchip Technology 2
AB | November - December 2017
t’s nice to enter the holiday season with an economy that is more stable and robust than the one we had to wrestle with just a few short years ago. With the holidays also comes a spirit of giving and no one needs that spirit of giving more than Valley nonprofits. One of those nonprofits — the Valley of the Sun United Way — relies heavily on the support of Arizona businesses to help it fulfill its mission of improving the lives of children and families in need. To give an annual shoutout to those companies that make the most dramatic impact on the work done by the organization, the Valley of the Sun United Way announces its “Live UNITED Top 20.” Those companies making the list for 2017 are American Airlines, APS, Arizona State University, Bank of America, Blue Cross Blue Shield of Arizona, Desert Schools Federal Credit Union, Edward Jones Investments, Enterprise Holdings, FreeportMcMoRan, General Dynamics, Intel, Macy’s, Nationwide, QuikTrip, PetSmart, Salt River Project, UPS, USAA, Vanguard and Wells Fargo. Companies like those that made the Live UNITED Top 20 list — along with HomeSmart International, Wilson Electric, Goettl Air Conditioning and other Valley companies that pitched in and helped with cleanups following natural disasters around the country — are gifts that keep on giving back to our communities. Do you know a company that deserves a special shoutout for the impact it has on our communities? Send me an email at michael.gossie@azbigmedia.com and we will do our best to give them the recognition they deserve within these pages, within the pages of Az Business Angels or on azbigmedia.com. Let’s continue to be kind to one another. Happy holidays.
Michael Gossie Editor in chief michael.gossie@azbigmedia.com
SHOUT-OUTS HomeSmart CEO rises to the occasion Matt Widdows, CEO of HomeSmart International, flew his plane to the Caribbean Islands after they were devastated by Hurricane Irma to help deliver medical supplies, generators and cold sodas to those in need. “I knew that I had a resource in myself and the plane that I have,” Widdows said. “I felt like I just needed to do something and help out.” Hickman’s prioritizes sustainability Hickman’s Family Farms recently rolled out a new container made of 100 percent recycled PET plastic; the first egg company to do so. It takes about three bottles to make a 12-count egg container; preventing millions of bottles from ending up in a landfill. Wilson Electric lends a hand After hurricane Harvey hit Houston, Garret Mallonee, a superintendent for Wilson Electric, knew he had to help. Mallonee pitched the idea to other employees at Wilson Electric and soon traveled to Houston to help victims with the cleanup efforts in the aftermath of the storm. The company donated tools, company vehicles and bought cots, shower tents and supplies for the volunteers to use.
ART Art director: Mike Mertes Graphic designer: Bruce Andersen MARKETING/EVENTS Marketing & events manager: Cristal Rodriguez Marketing designer: Jennifer Childres OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Amanda Bruno
AZ BUSINESS ANGELS Director of sales: Brit Kezar
Garret Mallonee
• Paul Johnson Drywall, one of the largest specialty contractors in the Southwest, is also celebrating its 50th anniversary. PJD began building homes in Arizona in 1967, teaming up with legendary Phoenix developer John F. Long. This partnership resulted in the construction of more than 33,000 homes in West Phoenix, creating the community of Maryvale. Throughout the past five decades, PJD has continued to form partnerships with the most successful single-family and multifamily builders in the Southwest. AB | November - December 2017
EDITORIAL Editor in chief: Michael Gossie Associate editors: David McGlothlin | Jesse A. Millard Interns: Erica Apodaca | Lauren Marshall | Nikole Tower Contributing writers: Melissa DiGianfilippo | Erin Thorburn Sarah O’Keefe
AZ BUSINESS MAGAZINE Senior account manager: David Harken Account managers: Cindy Kurtze | April Rice
Local companies celebrate 50 years in business • Big Two Toyota of Chandler recently celebrated its 50th anniversary. Originally founded by Lon E. Hoeye in 1967, the Toyota dealership is known for its unique amenities, such as its barbershop and salon services, as well as its community giving. Big Two Toyota is also ranked among the Top 60 Toyota dealerships nationwide in terms of new vehicle sales volume.
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President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb
AZ BUSINESS LEADERS Director of sales: Sheri Brown AZ HOME & DESIGN Director of sales: Joe Freedman AZRE | ARIZONA COMMERCIAL REAL ESTATE Director of sales: Ann McSherry EXPERIENCE ARIZONA | PLAY BALL Director of sales: Donna Roberts RANKING ARIZONA Director of sales: Sheri King 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 2017 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.
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TRENDSETTERS
WHAT SALARY
do you need to afford a home in Phoenix HSH.com did research to calculate the average yearly salary required to afford a median-priced home in 50 of the largest metropolitan areas. Homebuyers in the Phoenix metropolitan area would need to earn a salary of $48,654.62, an increase of $702 during the second quarter of 2017. Home prices in Metro Phoenix grew by 3.95 percent during the same time period. Here’s more from the Phoenix metro area: • Year-over-year, home prices have risen by 5.37 percent. • Mortgage rates in Metro Phoenix fell by 0.18 percent. • If homebuyers put 10 percent down instead of 20 percent, the required salary increases to $56,894.62.
How much time do employees
‘SLACK’ during the
DAY?
We’ve all been distracted at work, but how much time do we actually waste during the day? A new OfficeTeam survey shows employees squander an average of 56 minutes per day on nonwork activities, such as using their cell phones for personal errands. Some other interesting stats: Ages 18-34 rack up 70 minutes on mobile devices and 48 minutes on personal tasks, the most of all age groups.
While 62 percent of managers think staff spend the most time on social networks, workers said they’re most occupied by personal email (30 percent).
Male employees most frequently check nonwork email on their cell phones (32 percent), while females browse social networks more (33 percent).
MARKS the SPOT
Is Generation X the demographic driving the housing boom?
A
ccording to a recent report by the National Association of Realtors, last year marked the third straight year that Millennials made up the largest group of homebuyers, at 35 percent, while Generation X made up 26 percent. However, these statistics do not tell the entire story. “A deeper dive shows the median age of Millennial buyers is 30 – those really on the cusp of being considered Gen X,” said Lisa Davey of Washington Federal in Phoenix. “In addition, NAR reported that Gen X buyers are in their peak earning years and thus their incomes are the highest among all generations of buyers.” According to Davey, this makes Gen X the most likely generation to work with experienced lenders on remodeling, renovating or rehabbing properties in upand-coming neighborhoods with great schools and amenities like nearby restaurants and recreational activities that they – or members of their family – already own. “So while Millennial might be the buzzword of the decade, Gen X is the demographic making itself at home in homes across the Valley thanks to smart financing options,” said Davey.
C. Adam Buck, partner, Radix Law: “I love to fly fish … There is nothing like getting away from my cell phone and the demands of work and standing in a flowing stream, listening to the peaceful sounds and the rhythm of casting my fly line.”
Kimberly Davids, general manager, The Weitz Company: “Words cannot express the majestic beauty of the ocean and the adrenaline rush felt when encountering a sea creature or swimming through a massive reef. It is truly humbling to be a visitor in ocean’s habitat.”
Patrick Joyce, Arizona commercial lending manager, Bankers Trust: “I feel fortunate to live in Phoenix where we have so many beautiful golf courses. I enjoy the sport because it affords me opportunities to meet different people and get to know them well.”
Bridget Olesiewicz, principal, Vanguard: “I love hiking with friends and family in Arizona’s great outdoors. The scenery is beautiful and I find long hikes bring opportunities to really catch up and connect with others.” Wendy Riddell, managing member, Berry Riddell: “I am an avid equestrian. Not unlike zoning, I enjoy the fact that I cannot bully around a 1,200-pound animal and must use skill and finesse to accomplish my objective.” 6
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6 TRENDSETTERS
tips
for leaders from
SAM FOX
You did
what? at your last job
When a resume loo ks too good to be tru e, it just might be. Almost half of workers (46 percen t) surveyed by OfficeTeam said th ey know someone who included false information on a re sume, a 25-point jum p from 2011. Job experience (76 percent) and dutie s (55 percent) were cited as the m ost frequently embe llished. Some additional findings:
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3% of managers suspect candidates often stretch the truth on resumes
More male workers (51 percent) know some one who’s fibbed, comp ared with their female counter parts (39 percent)
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8% of managers said their compan y has removed an applica nt from consideration for discovering false inf ormation
55% of employees ages 18-34 can name a person who lied, the most of all age groups
S
am Fox, founder and creative visionary of Fox Restaurant Concepts, took a giant leap of faith when he decided to open restaurants. And he didn’t open just one restaurant — which is a challenge in and of itself — he launched a restaurant empire, amassing almost 50 restaurants with 15 unique concepts. Here are his six tips for becoming an effective leader: Know what you want, know what you love, know what you believe in and stick to it: “I opened a seafood restaurant in the desert. That’s weird, right? I started a food truck, The Rocket, because sometimes it’s OK to do something that doesn’t make sense.”
Don’t be afraid of failure: “Not being afraid of failure has given me the courage to take big risks and make mistakes — and that’s what moving forward is all about.” Success doesn’t mean stop: “Even when things are running smooth, I come in and want to switch something up. It’d be easy to think that if everything is going well, why fix what’s not broken? It’s not about fixing, it’s about mixing things up a bit. It’s about being innovative and coming up with fresh ideas.” Admit what you don’t know (yet): “Life is like a classroom. Take notes, seek out advice and never stop listening to others.” Wake up every single day and ask, “How will today be better than yesterday? Or, as we like to say in the restaurants, how will dinner be better than lunch?” Refuel: “If you love what you do, even when you’re not officially working, you’re still working, collecting inspiration and developing an integrated perspective. When I travel, the world map is my inspiration board. When I’m in town, I eat breakfast with my family at The Henry every morning. My kids have taught me to think outside the box about what kids like to eat.” 8
AB | November - December 2017
Phoenix tech execs report BARRIERS TO HIRING
The tech sector bodes well for job seekers market, the odds are often stacked against employers. In a new survey from Robert Half Technology, Phoenix CIOs offered insights on today’s hiring difficulties.
47%
33%
19%
are not able to meet are not finding enough are not being seen as salary demands, qualified candidates an employer of choice which is higher than the national average Nationally, 41 percent of CIOs admit to taking longer to hire than they would like – an average of of 44 percent 4.5 weeks — to fill a role “We’ve seen an increase in the number of skilled technology professionals moving here,” says Kathleen French, Phoenix metro market manager for Robert Half Technology, “but the supply is still quite low, which is creating more competition for talent.”
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TRENDSETTERS Phoenix ranks among top cities for tech talent Entrepreneur has ranked Phoenix No. 6 among cities competing with Silicon Valley for tech entrepreneurship, citing the Valley’s close proximity to Silicon Valley and low median home prices as prime factors for the high ranking. “With a population of 1.5 million, the city is well-established,” the magazine writes, “and the presence of companies such as Datashield, MST Solutions and General Dynamics has helped contribute to a oneyear job increase of 188 percent in the technology sector.”
How do Phoenix salaries rank? Curious to know how Phoenix salaries compare with the rest of the country? Robert Half’s 2018 Salary Guide shows Phoenix salaries are 13 percent higher than the national average. Here’s how other cities fare: • Washington, D.C.: 33% higher than the national average • Atlanta: 6% higher • San Francisco: 40% higher • Salt Lake City: 5% higher Here are 2018 Phoenix salary projections for high-demand positions: • Executive assistant: $58,760 • Front-end Web developer: $82,207 • Senior accountant: $84,750 • User-experience designer: $105,090
Joshua Becker
Alisa Gray
Ed Novak
Nonnie L. Shivers
JOSHUA BECKER, shareholder, Gallagher & Kennedy: “The use of presidential pardon power, the allegations regarding improper campaign activities, the calls for impeachment of the president, etc., are likely to remain on the front page of newspapers, news websites, social media, and television news throughout 2018.” ALISA GRAY, shareholder, Tiffany & Bosco: “Anything with Trump involved. Tax issues are going to get headlines as well as proposed legislative changes.” ED NOVAK, shareholder, Polsinelli: “The congressional and senate openings will dominate the headlines. City and county incentives to new industry will continue to face court challenges. Education funding, which impacts the state’s ability to attract new business, will also be critical to the governor’s race.” NONNIE L. SHIVERS, shareholder, Olgetree Deakins: “2018 will continue to see daily headlines on LGBTQIA (lesbian, gay, bisexual, transgender, queer, questioning, intersex and ally) employees and their rights. Along with cases battling it out over this core legal question as to Title VII’s scope, other important LGBTQIA employment issues continue to wind themselves through the courts.” JONATHAN FRUTKIN, attorney, Radix Law: “There will likely be some tax reform. That will be a main topic for the media and business leaders. Second, the changes in relationships with foreign governments will inevitably impact businesses that do business internationally. With our current president, this topic will remain at the forefront as the administration pursues more protectionist trade policies. And let’s face it, President Trump knows how to generate headlines.”
Is texting appropriate in a professional setting? Ours is an increasingly digital age with shifting social mores. With more connectivity, come more questions—and gaffes. Is texting colleagues perfectly acceptable or extremely uncouth? Cheryl Hyatt, a partner Hyatt-Fennell who has 20 years of executive-search consulting experience, offers some guidelines: 1. CONSIDER THE COMPANY. Texting is going to be much more acceptable at a tech-savvy start-up than at a law firm. Take your cues from coworkers — follow norms rather than forging them. 2. CONSIDER THE RELATIONSHIP. Texting peers, particularly ones you interact with frequently, is going to be much more common than texting your supervisor. Texting is inherently more informal and use it accordingly. 3. C ONSIDER THE SITUATION. Are you getting together with the team after work? Text away. The more social the communication, the more texting is appropriate. Most of us don’t want our phones inundated with project-relevant texts. That’s what email is for. 4. C ONSIDER THE TONE. Negative messages should never be texted. Going to be late for an appointment? Do the other person the courtesy of calling. Feel like venting to a coworker about the email your boss just sent out? Resist the urge. Know the limitations of texting. It can be tempting to try to sidestep uncomfortable conversations via text, but it is never a good idea.
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Jonathan Frutkin
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CEO SERIES
NEW WAY
TO PAY
Move over, Bitcoin, Scottsdale-based Dash may be the hottest cryptocurrency available
By JESSE A. MILLARD
B
usiness is all about change, and there are few things that can change as much as cryptocurrencies. You’ve heard of Bitcoin, but meet Dash, one of the fastest-growing cryptocurrencies in the world. And it was started in Arizona. Dash is like many digital currencies, decentralized and based around the use of the blockchain – the digital ledger that records all transactions with digital currency. Blockchains are supported by vast computer networks controlled by users of the cryptocurrency. Right now, there are huge concerns over volatility in the emerging cryptocurrency market as investors pour huge amounts of money into Bitcoin. But Dash is trying to avoid investment, opting for real-world use instead. “We want to attract real use and volume and we want to avoid people investing because it’s going up,” says Ryan Taylor, CEO of the Dash Core Team, the organization that supports the Dash digital currency ecosystem. To keep the digital currency operating, cryptocurrencies are backed by foundations, which rely on volunteer donations, but the Dash protocol allocates Dash generated from each transaction to groups that propose projects. The Scottsdale-based Dash Core Team, which has roots to the creator of the cryptocurrency, receives the majority of the Dash that is generated during transactions. As values skyrocket for digital currencies like Dash and the world increasingly goes digital, Az Business sat down with Taylor to talk more about Dash and the core team’s plans: Az Business: What makes Dash stand out from other digital currencies? Ryan Taylor: (Bitcoin) has very poor ability to make decisions
on their network, such as this block size debate that’s been raging for two and a half years and nothing’s been done. (Bitcoin) allocates all of its resources towards one thing (mining), and it’s very poor at making changes for adapting to the marketplace. We recognize those problems. First, we split our block rewards and transaction fees in three ways (rewarding those who 12
AB | November - December 2017
work to secure the network via mining, infrastructure support and costs for a vote-based proposal system) ... And literally anyone, including yourself, can put a proposal up on the Dash network proposing to provide some service to the network in exchange for Dash, and the Dash network will vote on it. The outcome of the vote is people with the highest votes dictate out of the budget first until the budget is gone.
Ryan Taylor
AB: A lot of coins out there are very volatile and there are concerns with the transaction times for Bitcoin, but it sounds like Dash has more stability instilled in its system for long-term use? RT: We want people to actually use our network, not just
invest in it. I think that when you advertise your coin (price), you’re just attracting people who are chasing momentum. When that momentum turns the other way, you know you’re likely to experience a lot of volatility. That actually goes against the very mission of providing a stable currency. So, we want to attract real use and volume and we want to avoid people investing because it’s going up. AB: If I were a business owner, how could I use Dash? RT: On the business side, we’re seeing a lot of international
transfers being a strong use as well as closed eco-systems in which there’s a limited number of parties who need to settle transactions. On the former, just as an example: there are debit cards that integrate with Dash. So, you could use Dash to pop up debit cards anywhere in the world instantly. So, people are using this to pay some of their international employees or vendors. With Dash, they’re basically able to send that money across border and across currencies without incurring those hefty fees that are typically three on up to 10 percent — if they’re allowed at all.
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LAW
Not you, too 3 ways to prevent a Weinstein scandal in your workplace
I
n October, producer Harvey Weinstein, arguably one of the most powerful men in Hollywood, made headlines again. But this time he is not receiving accolades from a well-produced television show or movie. Instead, more than 50 women to date have come forth alleging sexual harassment dating back decades. The story has sent shock waves through the film industry, with many speculating that numerous lawsuits could lead to the sale or bankruptcy of The Weinstein Company. In one fell swoop, the company went from a thriving film studio to trying to figure out how to survive. It is a story that will keep entrepreneurs, business owners, and human resources employees up at night wondering if this could happen to their business. And with good reason. Employers can be held responsible if harassment occurs in the workplace, even if they are not made aware of it. Protecting your business from such a scandal can be done if you put in the effort to foster a solid culture. Work to eliminate gender inequality As you evaluate what your business looks like and how it operates, ask whether the hiring practices encourage or discourage a gender parity. Critically evaluate the diversity in the organization’s structure and assess whether or not there is a gap between sexes and races at the top. In Hollywood, for example, there’s a significant gap at the top. In 2016, only seven percent of the top 250 grossing films were directed by women. It’s easy to see how power in the hands of a few could create a scandal, especially in the film industry.
RALLYING CRY: After the Harvey Weinstein scandal, actress Alyssa Milano urged
any women who have been sexually harassed or assaulted to use the word “Me too” on their social media platforms to give people a sense of the magnitude of the problem. Those two words soon became a hashtag, the top trend nationwide on Twitter and yet another rallying cry for women — and men — who have experienced sexual harassment or assault.
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If your business has a clear imbalance, which most do, consider career path programs that can be implemented for promoted upward movement within the existing employees, and adjusting recruitment strategies to attract a diverse pool of qualified applicants. Workforce diversity not only moves toward closing the gap in employment between men and women, but it is also a main driver of internal innovation and business growth. And of course, it can help you stay out of court.
Sarah O’Keefe Law
executives and managers, on policies and procedures helps prevent scandals like the one faced by The Weinstein Company. As they say, an ounce of prevention is worth a pound of cure. Especially when Implement and follow sound the “cure” could be bankruptcy. Consider policies and procedures implementing annual refresher training Make sure you have equal opportunity that includes real-world scenarios, such and anti-discrimination policies clearly as the latest celebrity lawsuit to foster posted in the workplace, as well engagement and drive home the point. as clear and concise written Not only is training a good business procedures outlined in your practice, but it helps create a culture where employee handbook that harassment is not tolerated and where specify a commitment to, and employees feel comfortable to speak up mechanism for preventing without fear of retaliation. harassment and handling The bottom line? Harassment is not only complaints. Procedures could illegal, but it violates trust between an include an open-door policy, employee and employer. When that trust where employees are free to is broken, not only does the business have communicate with any manager unnecessary liability and face financial or human resources personnel consequences, but the culture negatively regardless of the chain of command. shifts as well, working against the This helps identify potential issues profitability and longevity of the company. early, and provide opportunities to If you are made aware or become aware address them in their infancy. Hopefully, of harassment, you must take immediate this helps your business to avoid a costly and appropriate corrective action to stop lawsuit. it. Developing and disseminating clear policies, keeping them updated, and Training, education and culture consistently enforcing them can help Of course, it is not enough to prevent litigation and limit your liability ask employees to simply “sign off,” should a complaint arise. acknowledging that they received such policies and expect the culture to change. Sarah O’Keefe’s practice practices on Training and education, early and often, employment law, including litigation at for all employees, including top-level Burch & Cracchiolo in Phoenix. AB | November - December 2017 15
LAW
CATERING TO THE
future majority
Do law firms need to do a better job reaching out to Hispanic business owners? By LAUREN MARSHALL
A
s the Hispanic population continues to grow in Arizona, so does the number of Hispanic-owned businesses. However, Hispanic business owners receive legal counseling at a lower rate than their non-Hispanic counterparts, according to the Small Business Administration. From a legal advice standpoint, experts say there is a tremendous underrepresentation of Hispanic business owners in Arizona. As Arizona is projected to be a “minority majority� state in the next 10 years, serving this business segment is something every law firm in the state needs to begin addressing. Marcos Tapia, an associate attorney at Renaud Cook Drury Mesaros in Phoenix, says law firms need to make an effort to bridge the gap.
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LAW
...”by embracing and learning about the cultures and customs of Hispanic business owners, the legal community can become a better partner to the Hispanic business community.” Ayana Meraz and Marcos Tapia
“There’s not a lot of Latino lawyers to begin with,” Tapia says. “The need for access has grown, but the access to someone who speaks the language and has the same cultural background with legal knowledge hasn’t grown.” Tapia and other experts say the unmet need for legal counsel among Hispanic business owners has implications far beyond the Latino community. The Hispanic Chamber of Commerce estimates that there are 123,000 Hispanic-owned businesses in Arizona and Tapia says they need good legal counsel to run successful businesses. “Otherwise, a Latino entrepreneur — when they are making a business — is stepping into a world that is even more foreign,” Tapia says. Tapia says that he counsels many Hispanic business owners on basic legal needs, like contracts, city permits and insurance that are essential to any small business. “It’s making sure they have a strong foundation,” Tapia says. Latino-owned businesses drive the economy and bring innovative ideas, Tapia says. “A lot of people in the Latino community, they are ready to work,” Tapia 18
AB | November - December 2017
says. “I think what I’ve seen lately, and especially since my time in Arizona. It’s been a growth in the community.” Businesses owned by Hispanic women are the largest growing small business sector in the United States. One example of this is Ayana Meraz, owner and vice president of the public relations firm Moss Tucker Group, who manages business and clients in both Mexico and the U.S. Meraz says one of the main differences she sees in Mexico is the emphasis on relationships and the legal community needs to build relationships to form stronger connections with the Hispanic Business community. “It’s definitely helped keep me on my toes with relationships with people when doing business,” Meraz says. “Because in Mexico, even if you don’t see people for a year, you need to maintain a relationship.” Meraz says Hispanic business owners may be wary of the legal community initially out of fear of being taken advantage of, but that makes the need for the legal community’s help even more important. “They have been taken advantage of by the housing and lending industries, so they don’t trust anyone,” Meraz says. Latino business owners want to better
Ayana Meraz
Marcos Tapia
themselves and their businesses just like American-born business owners and would respond to leadership from the legal community, Meraz says. Another reason Meraz says many Hispanic business owners do not receive legal counsel is the lack of business regulation in countries like Mexico. “Historically, people in Mexico do not use lawyers for business because it was easy to do things like sell chips and soda in your front yard,” Meraz says. “As time has gone by, the government has tried to get things under control and now the government requires permits.” Meraz and Tapia both say that by embracing and learning about the cultures and customs of Hispanic business owners, the legal community can become a better partner to the Hispanic business community. “People of all ethnicities like to turn to someone who understands them and gets their needs,” Meraz says.
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HEALTHCARE
By ERICA APODACA
A
rizona has a serious physician shortage. The state is a “Designated Health Professional Shortage Area” and according to the latest numbers from the Health Resources & Services Administration, the department that makes these designations, slightly less than half of Arizona’s primary care health professional needs are met. Since only 49 percent of the state’s needs are met, Arizona residents, particularly those in the rural parts of the state, are subject to long wait times for regular checkups. Arizona needs to add 520 physicians in order to lose its “shortage” designation. These doctors won’t appear out of thin air, but Arizona does have a great pool to reel new doctors from — its growing medical schools. Midwestern University’s Arizona campus in Glendale sees an estimated 20
AB | November - December 2017
40 percent of its graduates residing and practicing in Arizona, says Dr. Kathleen H. Goeppinger, president and CEO of Midwestern University. The University of Arizona College of Medicine in Phoenix offers a pipeline to local communities. The efforts include Saturday Scrubs and Summer Scrubs, where those interested in the medical field are welcomed into simulation labs to watch students care for mannequins — or faux patients. The hope is the program will spark the interest in those considering a career in the medical field. And Mayo Clinic welcomed its first class of about 50 students to the Valley this year, making Arizona the third state to receive a Mayo Medical school, behind Minnesota and Florida. The Mayo Clinic School of Medicine has created a curriculum that is designed to not
only teach students how to do certain medical procedures, but also teach them the ins and outs of the healthcare delivery system. “We want to prepare physicians to meet the needs and challenges of the healthcare system,” says Michele Halyard, MD, dean of the Mayo Clinic School of Medicine’s Arizona campus. “We are hoping that many of the students will wind up staying in Arizona for their residency and ultimately becoming a physician within the Arizona community.” CLASS ACT In late September, several medical groups in the state formed an alliance that will work to increase the number of doctors and healthcare professionals in Arizona. Maricopa Integrated Health System, Creighton University School of Medicine, Dignity Health’s St. Joseph’s Hospital
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HEALTHCARE
Michele Halyard
Kathleen H. Goeppinger
and Medical Center and District Medical Group will work together as the Creighton University Arizona Health Education Alliance to expand Arizona’s offerings of healthcare education programs. “With this alliance, we have the opportunity to continue to strengthen Arizona’s reputation as the home of some of the best medicine in the nation,” says Patty White, president and CEO of St. Joseph’s. “The affiliation will enable us to increase the numbers of doctors and other healthcare professionals who will want to make Arizona their home.” Arizona is also on the cutting edge of medical education, training and creating doctors who will be prepared to deliver care in a modern healthcare setting. This is being done through various medical simulation centers in the state. Simulation is still fairly new in medical training and preparation. However, many medical schools across Arizona are adopting this new practice in hopes of producing better trained physicians. Simulation centers vary from facility to facility, but they typically involve mannequins that enable students, practitioners and residents to learn how to deal with many different aspects of medical care and treatment. INNOVATION ABOUNDS The Banner Simulation Medical Center’s 55,000-square-foot simulation center is one of the largest simulation centers in Arizona, where trainees can fully experience a hospital-like atmosphere. The center is nestled in a decommissioned, hospital where students can immerse themselves in simulations 22
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Karen Josey
Guy Reed
at an intensive care unit, surgery center, operating rooms and training labs. Students learn how to take blood samples, utilize proper sanitary measures and more, says Karen Josey, senior director of simulation at Banner Health. “Simulation is all about patient safety,” Josey says. “Simulation goes from simple training such as putting in an IV, to the more complex tasks and scenarios, such as a chest tube insertion.” The center also offers a day in the life of a nurse, where students are assigned a number of patients that they must watch, prioritize and care for throughout the day. This is followed by hours of debriefing on what needs to be improved and what was done correctly. The University of Arizona currently has two simulation labs. One located in Tucson — which will open in May of 2018 — and one in Phoenix. The Phoenix simulation center consists of three wings, 14 hospital rooms, two surgical stations, nine debriefing rooms, six onsite training rooms, three scrub sinks, ultrasound machines, 3-D models of the brain and eyes and a virtual reality simulation. All of this is in hopes of accomplishing the UA’s “mission of providing the best training to students, residents and fellows, but it also helps recruit and expand our pipeline of students who might consider entering careers in medical fields,” says Guy Reed, dean of the University of Arizona College of Medicine - Phoenix. Midwestern University is also home to a simulation lab. Its lab is made up of 19 exam rooms and extends to seven veterinary-based exam rooms. Also,
Patty White
there’s an ICU, emergency/trauma room, a pediatric floor, maternal fetal simulator, operating rooms and more. Arizona is filled with simulation labs, including two more with Mayo Clinic. Mayo’s facility contains about six fully equipped exam rooms that are identical to those in the Mayo Clinic Cancer Center, and another simulation center within its hospital. REAL-WORLD READINESS Students begin their simulation journey with Mayo at the simulation center at its school. This is where the student will learn proper interview techniques and physical diagnosis with people acting out the symptoms based on scripts. From here, the students are transferred to the simulation center in the hospital to learn more complex techniques. “The science of medicine is changing at an amazing rate and so, because of that, the education has to evolve as well,” says Halyard. Each and every simulation lab has the same goal in mind: to provide better, more experienced physicians for the patients of Arizona. Simulation labs are in pursuit of bridging the gap in physicians and patients in Arizona. These simulation centers help prepare physicians for real-life circumstances and are giving them the confidence to make their mistakes in a controlled environment, so that they may be more adequate once they enter the healthcare industry. “I like to say that we want to prepare physicians who not only heal patients, but who can heal the healthcare system as well,” Halyard says.
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SMALL BUSINESS
DUPLICATING SUCCESS
Arizona becomes a launching pad and testing grounds for franchises looking to grab their slice of the economic pie By JESSE A. MILLARD
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rive down nearly any street in the Valley and you’ll find familiar signs: Blaze Pizza, Cold Stone Creamery, Five Guys, Massage Envy, McDonald’s, Orangetheory Fitness, Subway and many others. Arizona is a hotbed for franchises, which are typically associated with faraway corporations. The reality is different. Many of these franchises have local roots and they’re finding a lot of success here.
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Franchisors, both local and not, use Arizona as a testing ground for what they hope to be the next name brand. And local entrepreneurs take over these business models as franchisees in hopes of creating a steady flow of income for themselves. “Franchising really covers a broad spectrum of industries,” says Jeffrey H. Wolf, partner and franchising attorney at Quarles & Brady. “From food and clothing and other retail to handyman services or massage therapy services, franchising is much broader as an industry than a lot of people realize.” This year, Scottsdale-based Massage Envy celebrated its 15th year in business and announced that it will continue to expand both nationally and in Arizona. Last year, Massage Envy had plans to hire 200 employees in Arizona alone. The success of the franchise industry runs both ways — coming into Arizona and leaving Arizona. But franchises still benefit the state by offering good options for entrepreneurs and consumers. Franchisees of Scottsdale-based Amazing Lash Studio announced plans to open at least 35 studios in the Los Angeles area in the next two to four years. Outside brands like California-based Blaze Pizza, a fast-casual pizza concept that started in 2012, have already opened six franchise locations in Arizona.
Ty Brewster
These announcements are in contrast to the lean years of the Great Recession, Wolf notes, when there were virtually no new franchise sales for several years. Now, Wolf has been seeing a lot of new franchise work on his end, including work on a new concept a franchisor is rolling out. ARIZONA: HOME OF THE NAME BRAND Ty Brewster, a franchise-focused retail broker at Scottsdale-based tenant-oriented brokerage firm Keyser, attended the International Franchise Expo in New York City. At the expo, Brewster was impressed by the number of franchisors who were growing and expanding. There were more franchisors presenting at the expo than in years past. “That tells me the industry is pretty solid and in growth mode,” Brewster notes. That’s especially true in Arizona. “There’s quite a bit of franchise activity in Arizona,” Brewster says. “Specifically in Arizona, we are a little bit of what I would call a hotbed for new brands, franchisors.” Brewster points out that Massage Envy — one of the most well-respected franchises in the country — Amazing Lash, The Joint Chiropractic, Cold Stone and many more got a start here. A few years ago, the most popular franchises were brands like Chipotle and Five Guys — food-based concepts focused on the fast-casual landscape. But now, Arizona’s franchise success is related to health and wellness, Brewster says. Franchises like Massage Envy are filling in gaps for services that didn’t exist a few years ago, Brewster says. In the past, the only legal massage available in town could
Joe Sawyer
be found at the resorts for large sums of cash, he says, but now Massage Envy has changed that business model. “Massage Envy created this whole new industry where there was none,” he says. “Nobody did that five years ago. It’s like new-found money in the economy.” The same is happening with Amazing Lash. Half a decade ago, you got your eyelash extensions in someone’s kitchen, but now you’re getting it done at a reputable business. The common theme here is that by doing something new that isn’t already being done, success will follow. That’s why legacy franchise brands like McDonald’s has to reinvent itself every few years, Brewster says. If you recall, McDonald’s was pushing its salads, dollar menu, then its coffees and now its all-day breakfast. SUCCESS FOR THE FRANCHISEE Local franchisees get excited when the brands they’re invested in reinvent themselves. “Any business that’s going to go through long-term growth is going to have periods of readjustment,” says Rick Ueable, CEO of Foods 2000 Inc., a company Ueable co-founded and operates the 41 Arizona Subways he’s come to own since 1989. Since the passing of Subway founder Fred Deluca, the Subway brand has been getting stripped down to the basics, Ueable says. If you believe in the core concept of a brand, like Subway for Ueable, those readjustments periods offer the perfect time to invest and expand. And this is exactly what Ueable is doing, as he plans to open up seven more Subway locations in Arizona by the end of the year.
Rick Ueable
Jeffrey H. Wolf
But being a franchisee is a challenge in 2017. Rising labor costs and the huge amount of competition between other franchises are key issues, Ueable notes. “There are a lot of people chasing down that consumer dollar,” Ueable says. “Concepts that really want to wring out their brands come to Arizona. This is where a lot of new brands are flushed out.” Several years ago, Joe Sawyer came to Arizona from Illinois, where he owns many Subway franchises, to spend some leisure time. But, after speaking with franchisees like Ueable and other locals, Sawyer soon found himself going into business in Arizona, too. Sawyer first started with Five Guys, opening locations outside of Phoenix and Tucson. More recently, Sawyer purchased the sole rights to operate Blaze Pizza in Arizona. Blaze Pizza is a fast-casual pizza concept, a crowded field with many franchisors and franchisees related to pizza operating in Arizona, including Arizona-born-and-raised Fired Pie, which has seen meteoric growth. Sawyer knows of a couple of pizza-related concepts that have already came and went unsuccessfully in Arizona. Both Sawyer and Ueable agree that Arizona is a sort of testing grounds for concepts. “If you can’t make it in Phoenix, you’re not going to make it in Minneapolis, Minnesota,” Sawyer says. “And people try to come here and you establish your brand and you get people to write about you and talk about you and it gives other people the confidence to move the brand forward in other places.” AB | November - December 2017 25
TECHNOLOGY
G N I H C A E R E H R T O F
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S R A T S
ust r y d n i pace ns s e h t io d for d propor t e b t a ho worl e s i m h o t s bec o out-ofa h e t By JESSE A. MILLARD Temp uld grow o he cosmos is billions of years old. But the idea of and c
T
exploring the unknown, infinite universe beyond Earth’s orbit from Tempe is much, much younger. Arizona State University has been active for years. ASU was involved with the NASA’s Viking missions to Mars in the 1970s and, more recently, with Curiosity, a car-sized robotic rover whose mission is to explore Mars. The university isn’t the only place in Tempe exploring the cosmos. There’s a vibrant commercial space industry that is looking beyond our blue planet. This commercial space industry has its roots in the prebankruptcy Tempe operations of Motorola spin-off, Iridium, which started in the 1980s. You might not have known it then, but when Iridium settled its engineering operations and primary gateway for the satellite phone company in Tempe, that was the catalyst for what could become a rocketing space industry in the Tempe area. As Iridium embarked on its ambitious $5 billion journey to build and launch its satellite network, many engineers and NASA alumni came to Arizona as contractors and employees. Unfortunately, shortly after Iridium’s network made orbit, it filed one of the 20-largest bankruptcies in U.S. history at the time, according to Time magazine. As a result, employees were let go, contractors found themselves without work and Motorola was left with a satellite network worth billions that wasn’t making any money. While Motorola considered letting the satellite network plummet back to the Earth in fiery fashion, a few former Iridium contractors decided to create Tempebased Qwaltec from the ashes of Iridium.
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TECHNOLOGY There was another contracting firm that had moved its operations to Arizona to provide support for satellites that had an uncertain future. “KinetX owes its existence in Arizona to Iridium,” says Peter Vedder, director of strategic development at KinetX Aerospace, which moved its operations to Arizona in 1993 for Iridium. “The company was formed in California, but relocated here when it secured a major contract with Iridium.” Fast forward to the present. Iridium found its way out of bankruptcy and currently employs 160 people in the Tempe area and 220 across the state. And Orbital ATK, which has a large manufacturing presence in Arizona, is manufacturing Iridium’s next generation of satellites in Gilbert. So thanks to the amount of groundwork Iridium laid and the active programs at Arizona State University, the Tempe area is home to a burgeoning space hub within an already thriving industry. And the area is counting on building on the success of ASU’s School of Earth Space Exploration, KinetX Aerospace and Qwaltec to propel the rest of Arizona to the cosmos in the process. DREAM BIG, THINK SMALL Commercial contractors have played an important role in space exploration, whether it was with the Apollo missions to the moon, or on the Space Shuttle program. Typically, NASA contracts to large aerospace companies, like Lockheed-Martin and Boeing, says Jim Bell, professor at Arizona State University School of Earth Space Exploration. “What we’re seeing now is that NASA is taking more of a calculated risk in investing in smaller companies, newer companies, more nimble companies,” Bell says. Not too long ago, people were looking at companies like Elon Musk’s SpaceX as an ambitious startup. Now it’s playing a major role in space exploration and innovation. SpaceX is not only running supply missions to the International Space Station, it’s also launching the next generation of Iridium satellites — Iridium Next. Then there are firms like Moon Express, which is the first company to get approval for a private mission beyond Earth’s orbit. Moon Express’ destination? The moon, of course, and it plans to launch three missions to our closest celestial companion between 2017 and 2020. Mining asteroids, colonizing other planets and deep space exploration isn’t exactly science fiction anymore as firms have sprouted up around these concepts or in support of possible future missions. With opportunities knocking, Tempe is in a position to get a slice of the commercial space industry pie, both with NASA — where several Valley firms and ASU have already seen success — along with commercial firms. BUILDING CONNECTIONS ASU has been building more connections with commercial companies, not just for building instrument components for missions, but working with them on entire missions as well, Bell says. Shawn Linam, co-founder and CEO of Qwaltec in Tempe, has been looking to get involved with smaller commercial space companies that have been active in the industry. 28
AB | November - December 2017
Robin Arredondo- Jim Bell Savage
Donna Kennedy
Shawn Linam
Peter Vedder
Kjell Stakkestad
Qwaltec provides systems engineering, mission readiness, technical training and program management for both government and commercial programs. Many years ago, Linam worked on NASA’s Space Shuttle Program, delivering training for the Shuttle’s astronauts. Although her firm is still reliant on traditional NASA contracts, Linam says there are opportunities for Qwaltec to get involved with commercial space operators, while it also pursues NASA contracts. The same is true for KinetX Aerospace. There are many opportunities to provide mission support and training for commercial space companies while going after NASA missions and contracts. The types of opportunities KinetX Aerospace and Qwaltec have aren’t with manufacturing components and spacecraft, though. These companies provide mission support and training, a highwage, highly skilled field. Arizona — already a manufacturing jewel in the aerospace and defense industry — could also become home for software development firms for the space industry, as firms focused on analyzing and selling data from satellites become increasingly popular. If you ask Vedder and KinetX Aerospace CEO Kjell Stakkestad, Arizona isn’t doing enough to capitalize on these high-wage opportunities, which could turn Tempe into a space mecca. But there is plenty going on to help that happen. TEMPE LOOKS TO THE STARS The City of Tempe has shown interest in its up-andcoming space industry as city officials have met with firms like KinetX Aerospace and Qwaltec. ASU had a place at the table, too, as firms explained recent challenges and successes, says Tempe Vice Mayor
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AB | November - December 2017 29
TECHNOLOGY Robin Arredondo-Savage, who was at the meetings. “We didn’t know a lot about what (the aerospace companies) were working on. So this is a great way to open up that communication, at least at the local level,” Arredondo-Savage says. Tempe is hoping to have its local space companies co-locate at its planned 18-acre biomedical and technology campus, which is slated for construction just west of the Tempe Center for the Arts, says Donna Kennedy, economic development director for the City of Tempe. The campus has the potential to attract more aerospace researchers to the facility, Kennedy adds. Campuses like the planned 18-acre facility at Tempe Town Lake help boost collaboration between like-minded firms. Aerospace researchers and companies could play a role in the collaboration mix at this campus. While the city is working with local space firms, ASU’s School of Earth and Space Exploration is partnering with local and national companies on missions through its Space Technology and Science Initiative, otherwise known as the New Space Initiative. Bell, one of the ASU professors working on the program, says ASU is partnering with companies to provide ASU’s scientific and theoretical expertise on commercial projects. Some of the firms ASU has worked with include the Tempebased space darlings. Partnering with local commercial space companies gives ASU proposals a competitive edge, Bell adds, which is mutually beneficial. The New Space Initiative also helps grease the wheels for ASU’s pipeline of students for internships and eventually jobs, Bell notes. Students don’t just want to work for NASA anymore, he says. Elon Musk, Richard Branson and Jeff Bezos have their attention for possible future employment in the space industry, Bell explains. Then there are some students who are thinking about their own entrepreneurial space endeavors. GOOD, BUT WE NEED MORE When the economic development teams are convincing entrepreneurs and businesses to move to Arizona, KinetX CEO Stakkestad wants them to talk about the aerospace industry, not just real estate and vacation options. He says the problem with creating a viable space hub in Tempe isn’t that there aren’t talented people to work at these firms, but it doesn’t seem there is willpower from the state to help boost the space part of the aerospace industry. “You’ve got everything you need, except we need the will of the government here to do something,” Stakkestad says. “And it doesn’t have to be lots of money. But you have to spend time to think it’s important and then advertise in a way.” Often, the aerospace industry gets lumped in with aerospace and defense. And Arizona focuses mainly on the manufacturing components of the industry. Orbital ATK is making satellites in Gilbert. Boeing is making Apache attack helicopters in Mesa. And a number of aerospace and defense firms across Arizona are actively involved in the supply chain for the industry. But that’s just manufacturing alone. With the space industry going more commercial, Vedder believes the state government should focus more on the space portion of the aerospace industry in Arizona. Not only that, but Vedder says Arizona could focus more on the 30
AB | November - December 2017
non-manufacturing portions of the aerospace industry. There are amazing programs at ASU and the University of Arizona that are generating talented, high-wage employees for firms like KinetX, or for software firms on the data side of space exploration. When those students graduate, it would be nice for those graduates to stay in Arizona and work at local companies, Vedder says. “We’re missing out if we’re not doing things to keep students here once we’ve captured them,” Vedder adds. There is a lot more opportunity for commercial space firms, and experts say now is the time for Arizona to start investing in what it takes to become a leader in space. Space isn’t something that’s just for NASA astronauts. Space has become an entrepreneurial endeavor, a thriving commercial industry Tempe and Arizona can tap into. Vedder says there are many investors who are seriously looking to throw their weight onto a space mission. People are looking at space as the new frontier. Scientists are talking about colonizing other planets. “Space is going to become sort of the next major industrial revolution at some point,” Vedder says. “And to be involved at the early stages is going to be important.”
STARS
OF SPACE E
xploring space may be a difficult task, but Tempe companies make it look so easy. Here are several missions that Tempe firms and ASU have had a hand on or will be working on:
• KinetX Aerospace and Honeywell Aerospace contributed to the navigation system for the Pluto fly-by mission by the New Horizons spacecraft in 2015. • Honeywell Aerospace is working on the University of Arizona mission to study the near-Earth asteroid Bennu. The mission, OSIRIS-REx launched in September 2016. • Qwaltec worked with NASA in making sure the GOES-16 weather satellite made its way to orbit in November 2016. • Qwaltec was recently tapped by the U.S. Navy to provide satellite operations and maintenance services at the Navy Satellite Operations Center in California. • KinetX Aerospace has been selected for navigation and mission design support of the Lucy spacecraft, a NASA mission set to explore six Jupiter Trojan Asteroids. • NASA chose an ASU mission to study the asteroid, Psyche, in orbit around the sun between Mars and Jupiter. The spacecraft, named Psyche after the asteroid, is planned to leave earth in 2023 and arrive at Psyche in 2030 to study the asteroid.
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MARKETING
INFLUENCER MARKETING How having the right influential person can catapult your brand
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nfluencer marketing is one of the hottest marketing tactics to date for getting a brand in front of a large yet targeted audience. This style of outreach allows the brand to connect with its audience organically compared to traditional forms of digital marketing. Influencer marketing focuses on working with influential people to help promote a brand through digital marketing, whether that’s on Instagram, Twitter, Facebook, a personal blog, etc. As companies implement influencer marketing into campaigns, there are efficient processes to identifying influencers, strategies for successful implementation and importantly, tips for measuring every campaign’s success that can make or break your campaign. WHY INFLUENCERS? PEOPLE TRUST OTHER PEOPLE There are many times when direct marketing may not feel as authentic to a potential customer Melissa DiGianfilippo compared to a recommendation Marketing from a peer. Someone who is interested in your business is more likely to trust a person who has used the service or product rather than relying on what the brand has to say. With an influencer, people tend to take their reviews or comments more seriously, even if it’s nearly the same message that the brand pushed out. It will be the influencer’s spin on that message that resonates and makes it feel real. HOW TO IDENTIFY INFLUENCERS WHO FIT WITH YOUR BRAND Your brand is unique, and those helping you market your brand should fit right in. As you identify social influencers, keep your brand top of mind. There are thousands of powerful influencers out there covering a variety of topics and it’s easy to get distracted and go after an influencer who has the most followers or the flashiest personality, but think of their demographic, style, and interests and if that influencer truly resonates with your brand. When beginning your search to identify the right influencer, first try organically searching Instagram, Twitter, Facebook, etc.
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Searching through social media gives businesses the opportunity to review the influencer’s previous work and check his or her credibility. You should also look inside your brand and see if you have any current customers who are social media influencers - that is sometimes the easiest place to start. WHAT YOU GET: AUTHENTIC CONTENT A reputable social influencer will be picky about the brands they partner with because their reputation is on the line. To become a well-known influencer takes a lot of hard work as they have to build a large following and strong personal brand. With that said, an influencer wants to provide their following with compelling content that fits well with the brand they have established. Once you identify reliable influencers that make sense for your brand and they agree to work with you, you’ll start to see authentic and unique content that you can’t possibly replicate on your own. You must repurpose this content in every way possible to make sure you get the maximum exposure. MEASURING SUCCESS IS KEY For influencer posts to be seen as valuable and successful, adding a trackable link is key. This link will help the business identify how many leads, sales, etc. are coming from the social influencer and the post or content they share. Chances are good that you will have to invest to get the right influencer on board, whether it’s through product or service trade or cash. Make sure you track the success so you can understand what you paid for, and if you should do it again. Sometimes your goal is simply “brand awareness” which is hard to track, but find some kind of measurement that works for you whether it be an increase in website traffic, calls, or something else. The reality is: if you aren’t jumping on to the social media influencer bandwagon, you are missing out on a major opportunity to build your brand and gain new customers. Melissa DiGianfilippo is the co-owner and president of public relations at Serendipit Consulting, where she leads the firm’s clients’ public relations and communications efforts including traditional media relations, crisis communications, internal communications, community outreach and more.
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HOLIDAY PARTIES
PARTY SAVERS Experts offer advice on creating a holiday event that inspires visions of sugar plums — and better By ERIN THORBURN
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or a few years in corporate holiday culture, largely due to the recession, chestnuts were left to roast and gone was the traditional champagne toast. A study conducted by the Society for Human Resource Management in 2015 showed that 30 percent of companies declined to host any kind of holiday party. Don’t blame it on coal in the stockings of HR employees. Cast responsibility on the recession. And, even though the economy has improved as 2017 wraps up and the corporate planning scene appears to be experiencing a Renaissance, budgets and time constraints still pose real restraints for many. So how do the Valley’s holiday hosts recommend reviving the holiday spirit without draining company resources? Nix the nog “Alcohol consumption is often underestimated,” cautions Paul Rossi, director of food and beverage for the JW Marriott Camelback Inn Resort & Spa. If removing alcohol from the menu seems too Scrooge-like, there are options to help keep the booze budget from skyrocketing. For example, Rossi suggests exclusively offering beer and wine rather than a full bar. Another means of keeping alcohol consumption under control is providing drink tickets for guests. Distributing two drink tickets per guest (or even couple) can significantly reduce the bill for booze. Simply having a discussion with the venue point person can also help to limit gray areas. “We prepare a detailed cost sheet for the planner and estimate a higher number of drinks per person, so there are no big surprises with the final bill,” Rossi says. Be adventurous with your advent calendar There are other ways to maximize corporate holiday party cost savings.
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“One of the ways that companies can still recognize their employees and celebrate the holidays would be to host a holiday luncheon,” says Melanie Volkers, director of sales and marketing for the Hermosa Inn. “Not only is it more costeffective than a dinner, it’s also beneficial to the employees since it doesn’t interfere with their personal time since it can be held during work hours.” Being flexible, not only with the timing of a corporate holiday party but with dates is another tactic for which experts unanimously agree can be a budget saver. “January and February are more affordable months to throw a holiday party,” says Lee Smith, Hotel Valley Ho’s director
Stephanie Quincy
Paul Rossi
of catering and conference services. “While not traditional, we are seeing more and more companies go this route. It’s a fun way to kick off the New Year and also helps eliminate conflicting dates on a busy holiday calendar.” If the idea of managing mistletoe beyond the traditional festive months is too taxing, there are still ways to be creative when it comes to the calendar – even if booking a venue outside of the recommended six-to-nine month, holidaybooking window. “If you are flexible and can consider a weekday, you can wait a bit longer to book,” Volkers says. “We always have a push to re-sign our holiday clients in January and
Lee Smith
Melanie Volkers
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HOLIDAY PARTIES
then again in June/July to guarantee they get the dates they want.” Yuletide with fun on the side It’s one thing to be creative with budgeting. It’s an entirely different matter to keep employees “eyes all a-glow.” How can holiday inspiration be infused back into corporate festivities? “A great holiday party needs a wellthought-out theme,” Smith says. “Some unique themes we’ve seen are murder mysteries, statement balloons, techfocused events and chef stations. Guests love the interaction element and it adds a special touch.” Consider another 2017 company party trend: holiday movie themes. Since classics such as “A Christmas Story,” “A Charlie Brown Christmas” and “It’s a Wonderful Life,” cross generations, forming a theme that centers on one of these movies will appeal to many, while not being overly cumbersome to pull off. For example, if a corporate party planner picked “A Christmas Story,” the movie could be showcased throughout the event, with 1940-inspired décor complete with the infamous “leg lamp.” For a fun twist, instead of traditional festive fare, Chinese food can be served. The important thing to remember is not to be overwhelmed at the prospect of party logistics. An open conversation with a potential venue operator can eliminate unnecessary worry, and consulting with a professional party planner can make all the difference. “Think of the flow of how you would like the event to go,” Volkers says. “Will there be any announcements, celebrations or giveaways? If so, work with your catering manager so that the flow of your evening pairs nicely with the flow of service.” Experts also encourage remaining open and flexible – even before the initial planning takes place. “There can be a misconception that resort hotels are too expensive for a party,” Smith says, “but it really is the best deal. Once a planner gets the costs for renting chairs, linen and décor, they quickly appreciate the value we provide, not to mention the great service and locale.” 36
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PARTY FOULS
According to Stephanie Quincy, chair of the Labor & Employment Practice Group at Quarles & Brady in Phoenix, here are four things you should consider when planning and hosting an office holiday party to avoid costly liability:
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If a you are providing alcohol at your party, take precautions.
If a person is served alcohol and then injures himself or herself (or someone else), the company could be liable. Train managers to encourage responsible drinking and model the behavior themselves. Identify anyone who appears to have been overserved, and insist they take a companypaid Uber, taxi, or another ride home. Many companies limit the number of drinks (using drink tickets or otherwise) or the length of time when alcohol is served. If you are using a caterer, bartender or other service provider, confirm insurance coverage and make clear that anyone who appears intoxicated should not be served any more.
3
Approximately one-third of employers report some form of employee misconduct at holiday parties. This misconduct
The chances are great that a number of your employees don’t celebrate Christmas and may not celebrate any holidays at all. This is not a war on Christmas. Just have the respect for others in the workplace by ensuring the office party is religion-neutral and open and friendly to all faiths.
may lead to employer liability in the form of harassment, discrimination or other legal complaints. Supervisors should be alert and ready to intervene if any such activities occur at the holiday gathering and again should be acting as examples for others, rather than acting badly. All employees should be reminded of the harassment policy and to report any incident in accordance with your normal harassment policy and procedures. Remind all of your leadership team that the work environment includes these types of events and everyone can be social without crossing any lines.
Never, never, never hang mistletoe. See No. 2.
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HOLIDAY VENUES
FUN 15 PLACES
to book a last-minute
holiday party By MICHAEL GOSSIE
Y
ou’ve worked hard. You’ve had a better year than last year. In fact, you’ve been so busy that you neglected to book a venue for your company’s holiday party. Even if the office holiday party is something that slipped your mind, there are plenty of dynamic Valley venues still available to create a memorable holiday event for employees. Here are 15 hot spots where you can book a last-minute holiday party or an offsite event to boost company morale. Dave and Buster’s Options: Book your corporate holiday party — featuring chef-crafted buffet, private and semi-private rooms and more — today at Dave and Buster’s in Glendale, Phoenix or Tempe and get 20 percent off. There is still space available throughout November and December for up to to 1,900 guests. How to book: daveandbusters.com./holiday Fort McDowell Adventures Options: Host your event at these uniquely Arizona venues that can accommodate parties of 50-1,500. Fort McDowell Adventures is located on 25,000 acres of pristine Sonoran Desert and offers horsedrawn wagon rides, hot air balloons and more. You will wow your guests with a holiday event experience they will never forget. How to book: 480-789-5306 or aimee@ fmadventures.com 38
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Hermosa Inn & LON’s Options: Unique event spaces will help you create the most exquisite holiday celebration for groups from 10-60 guests in an exceptional location. Private events at this legendary boutique hideaway are enhanced with globally-inspired Arizona fare from LON’s, paired with wines from an award-winning wine list. How to book: 602-792-1914 or submit an RFP online at hermosainn.com
Hotel Valley Ho Options: Book a holiday party by November for the Sky Line Rooftop, SoHo Ballroom or other venues and enjoy 10 percent off published food pricing, or receive a complimentary suite room night for every $3,000 contracted as foodand-beverage minimums. Valid for new bookings only, for events held Sunday through Thursday. How to book: 480-248-2017 or hotelvalleyho.com.
*
NEW CHEF-C RAFTED BUFFET • PRIV ATE AND SEMI-PRI VATE ROOMS SIGNATURE COCK TAILS • SOME THING FOR EVERYONE !
*PROMOTIONAL. OFFER EXPIRES: 12/7/2017. This offer must be referenced at the time of booking. Offer valid ONLY with events held between 11/27/17 -12/7/2017. 20% discount requires a buffet and $1,000 minimum spend prior to tax, gratuity and outside vendors. 20% discount applied on food, non-alcoholic beverages, Power Cards and Rental Fees only and excludes all other charges including alcohol, outside vendors, tax and gratuity. Not valid with any other offer. Promotion excludes the following buffet packages: Ultimate Happy Hour Buffet, Ultimate Party Package Buffet, Playoff Buffet & Field Trip Buffet. Should event need to be rescheduled outside of valid dates, the 20% discount will not apply. Revenue minimums apply and vary by location. Subject to availability. Valid at participating locations only and prices may vary by location. Minor policies vary by location. See store for details.
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HOLIDAY VENUES iFLY Phoenix Options: iFLY offers an unrivaled, one-of-a-kind venue for any team outing, holiday party or client event. Customizable packages offer everything from catering to transportation. Indoor skydiving offers an exhilarating experience while creating the right environment for developing confidence, enhancing creativity and building camaraderie. How to book: iflyworld.com/corporate-events Marcellino Ristorante Options: In Italy, gatherings always involve food lovingly prepared and beautifully served. Marcellino Ristorante’s goal is to create a stress free, unique and memorable event, tailored to your needs. Private, semi-private, at the bar or on one of two patios. Marcellino can accommodate small or large groups up to 80 guests. How to book: 480-990-9500
T. Cook’s at Royal Palms Options: The Holiday Reception Package includes three-hour hosted bar service with house select brand liquor, domestic and imported beer, house wine, soft drinks, still and sparkling water, along with choice of tray-passed hors d’oeuvres or display platters for $55 per person. How to book: katherine.mcneill@ royalpalmshotel.com or 602-977-6461 Talking Stick Resort Options: With more than 100,000 square feet of beautiful indoor and outdoor event space, Talking Stick Resort is the perfect destination for any holiday event. Large scale to intimate, party planners will have their choice of exciting venues from the grandest of ballrooms to chic restaurant and lounges to outdoor space so to take advantage of the beautiful Arizona winters. How to book: 480-850-8747
The Market Restaurant + Bar by Jennifer’s Options: The restaurant can be made Mountain Shadows available for a private party on Sunday Options: Any new holiday party contract evenings or Mondays (they are normally signed in November for this holiday season closed for business at these times). will receive 10 percent off published menu How to book: 602-579-5327 pricing on food or one free room night in an Immerse Premium room for every The Scott Resort & Spa $4,000 confirmed in minimums. Valid for Options: Steps from downtown new bookings only. Only valid for events Scottsdale, The Scott features all new Sunday through Thursday. meeting space, lobby and Canal Club How to book: 480-624-5420 and restaurant and bar. Book your holiday mention the holiday meetings special party and receive waived room rental, complimentary valet and discounted room Musical Instrument Museum rates. Learn how to receive even more from Options: An unparalleled setting for your free room nights to passed hors d’oeuvres. distinctive holiday party, MIM offers a How to book: tsrleads@thescottresort. variety of options that can harmonize with com or 480-945-7666 any occasion. Menus are tailored to fit the needs of each event and feature cuisines Dave and Buster’s from around the world. MIM chefs cook from scratch using fresh, authentic ingredients. How to book: 480-245-6972 or events@mim.org OdySea Aquarium Options: Host an enchanting holiday party while gazing at fascinating sea life as OdySea Aquarium will provide a unique experience and lasting memories. OdySea offers a variety of unique venue space options and the guest list can even include a penguin or otter. How to book: 480-291-8237 or events@ odyseaaquarium 40
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Tomaso’s Italian Restaurant Options: Tomaso’s has been serving high-end classic Italian cuisine for 40 years making the restaurant an iconic destination for all celebratory occasions. Tomaso’s can accommodate smaller parties up to a full buy-out of 207 people. The restaurant boasts variety of dining spaces including the fully-private “Serena Room” and the semi-private “Cove.” Tomaso’s recently expanded and now has a large winter-white dining room that can host up to 175 people. How to book: 602-956-0836 WeKoPa Resort & Conference Center and WeKoPa Golf Club Options: Mistletoe and Margaritas … who’s in? Call for holiday party specials good through January 31, 2018. Holiday packages include holiday décor & linen, champagne toast and complimentary venue fee. Resort rates from $89 per night, includes Breakfast, waived resort fee and more. How to book: 480-789-5536 or kfrus@ wekoparesort.com
Hermosa Inn & LON’s
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DINING
FLAVOR SAVER Mora Italian turns traditions inside out to create a new culinary experience By MICHAEL GOSSIE
M
ora Italian isn’t your grandmother’s red-checkeredtablecloth Italian restaurant. Think “The Sopranos” meets “Extreme Makeover.” The TV analogy is appropriate because Mora is the brainchild of celebrity chef, restaurateur and cookbook author Scott Conant, who may be best known as a judge on the popular Food Network show, “Chopped.” Forget everything you thought you knew about Italian food and Italian food restaurants because Conant has redefined both with Mora. Let’s start with the atmosphere. Think about the interior of Mora as the girl that would make your grandmother crack you with a ruler. It’s stylish. It’s sexy. You cannot stop staring. Pop-flavored art and candy-apple-red upholstered seats define the space. Think industrial hip … squared. If you consider people watching an art form, Mora is a canvas that keeps producing one masterpiece after another. While the hip factor and beautiful people grab your initial interest, the true tour de force that will keep you coming back to Mora is the food. Every item on the menu has a flavor and sophistication that transcends categorization as Italian food as we know it. Conant takes traditional ingredients, concepts and flavors, turns them inside out and puts them through the Italian to Conant dictionary. Then, he redefines them, while honoring the heritage from which these flavors were born. Great examples are Conant’s pasta dishes. Don’t leave Mora without trying Conant’s signature pasta al pomodoro
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PROVIDED BY MORA ITALIAN
— homemade spaghetti in a sweet and buttery sauce with a hint of basil and chile. It’s a dish as traditional as you will find in any Italian restaurant, but unlike anything you will find at Grandma’s redcheckered-tablecloth Italian restaurant … or anywhere else for that matter. Some other deliciousness that you cannot miss at Mora: The fritto misto — a crisp and hot mix of fried seafood and vegetables — is simply prepared with just a dash of salt and a hint of lemon, but without any sauce. This dish proves that less really is more and may be as perfect an appetizer as you will find in Phoenix. The ricotta and mascarpone gnudi — irresistibly airy cheese dumplings with a touch of tomato that surround a pile of butter-poached lobster — are so mouthwatering that you won’t even have to chew to take in this dish’s deliciousness. This can be best described as little bites of heaven.
PLATE OF PASTA: Mora Italian’s
housemade fettuccine with mushrooms, roasted garlic and escarole.
The pizzas — whose flavors come via Conant’s partnership with Stefano Fabbri, who also owns and operates Pomo Pizzeria Napoletana — are perfectly crunchy with a wood-fired crush that are as good — if not better — than you will find at any other Valley pizzeria. For salads, the heirloom tomato and antipasti salads stand out on a cannot-gowrong salad menu. Olive oil cake, warm chocolate cake and the Mora sundae stand out on the dessert menu. It’s comforting to know Conant isn’t just a celebrity chef who swooped in to launch a Valley restaurant before moving on to the next city. He is now a Valley resident and Mora Italian is now the star of exploding culinary scene of Seventh Street. We are happy they are both here to stay.
MORA ITALIAN WHERE: 5651 N. Seventh St., Phoenix HOURS: 4-10 p.m. Sundays through Thursdays; 4-11 p.m. Fridays and Saturdays; brunch 10:30 a.m.-4 p.m. Saturdays and Sundays DETAILS: 602-795-9943 or moraitalian.com
Scott Conant
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Recognizing professionals for outstanding performance in their roles as corporate financial stewards
2017
602-264-6835 www.cbiz.com
602-264-6835 www.mhm-pc.com
2017 LETTER FROM THE PRESIDENT
T
he Arizona Chapter of the Financial Executives International (FEI) appreciates and thanks you for your interest in the 11th Annual CFO of the Year Awards. FEI Arizona is presenting the CFO of the Year Awards to senior level financial professionals for outstanding performance in their roles as corporate financial leaders and stewards. The nominations and awards recognize exemplary financial management in three business sectors: public, private and nonprofit. An independent set of carefully selected and well-qualified judges from Arizona’s business community and academia have chosen winners based on their contributions to their respective organizations and their overall involvement in the Arizona business community. FEI’s mission is to advance the success of senior level financial executives, their organizations and the profession. The FEI Arizona chapter is comprised of Phoenix Metro-area executives who represent and advocate for the interests of finance professionals of companies in all industries and all sizes within the public, private and nonprofit sectors throughout the state. FEI Arizona serves the community by offering its members opportunities to network with their peers, stay apprised of current financial policy, standards and regulatory guidelines, continue their professional development and form valuable relationships with community leaders. We also maintain an academic awards program to encourage professional advancement of promising, finance-focused students and offer career assistance and development to members. FEI Arizona also contributes to the research and advocacy activities of our national FEI organization which impact the strategic planning of the profession’s policy, standards and regulatory structure. FEI continuously recruits new members who meet our membership criteria and who are interested in the value gained from becoming an FEI chapter member. Membership is open to CFOs, controllers, James Walbom treasurers, tax executives, academic professors, and other senior-level finance professionals whose positions and company size meet FEI’s membership criteria. Additional information may be found on the national and chapter websites, financialexecutives.org and feiaz.org. Finally, FEI Arizona would like to thank our sponsors who have worked so closely and diligently with us to make this event a success: Stephen AZ Big Media, Chase, CBIZ MHM, Keyser, McCaskill Marsh USA, and Vaco. Very truly yours, James Walbom, President, FEI Arizona Stephen McCaskill, Chairman, CFO of the Year Committee
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CFO of the Year Sponsor Representatives Ian Davie, member, Keyser
Deborah Kimes business development manager, CBIZ MHM
Cheryl Green Publisher, Az BIG Media
Dan Mahoney, executive director, JPMorgan Chase
Mike Green Partner, Vaco
Allan Smith Senior Vice President, Marsh USA
FEI Arizona Chapter officers President: James Walbom, CFO, Tiempo Development First Vice President: Rachael Piergallini, VP of Finance Derma Health Skin And Laser Secretary/Treasurer: Robbie Molnar, CFO, Resolute Performance Contracting Past President: Larry Eisel, CFO, Total Transit
FEI Arizona Board Members Bret Lawson, Chief Financial Officer at Hourigan Construction and member of the national board of directors, Financial Executives International Chris Niezgodzki, Director of Budget, Planning and Analysis, Grand Canyon Education, Inc. Adam Remis, Chief Financial and Human Resources Officer, InnSuites Hospitality Trust Mike Suriano, Vice President of Finance, Bar-S Foods Company Paul Vadovicky, CFO, Gadsden Growth Properties, Inc.
Stephen McCaskill, Controller, Institute for Supply Management Richard Skufza, CFO, Phoenix Rescue Mission Nathan O’Connor, Executive Vice President, Equity Methods Adam Miller, CFO, Barron Lighting Group Andrea Jones, Director of Finance, Bemo USA Corporation Susan Hunsaker, CFO, Triax Turbine Components
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2017
KAREN ABRAHAM Senior vice president and chief financial officer Blue Cross Blue Shield of Arizona
BACKGROUND: Abraham has worked with
BCBSAZ since 1983. She is responsible for BCBSAZ’s financial operations and systems (reporting, cost accounting and budgeting, tax and treasury), as well as the company’s finance, actuarial, group underwriting, healthcare economics, facilities and support operations teams. BIGGEST CHALLENGE: “The
implementation and interpretation of the Affordable Care Act brought many challenges, including complex new accounting, estimating, cash flow issues and risk, along with competitive and political uncertainty. Networking with my peers in the Blues system and working with my team has helped me to overcome this new environment.” GREATEST REWARD: “I see all aspects of
the company and work collaboratively with the executive team to find the solutions that are best for the company and our members. It is extremely rewarding to work for a company who is so dedicated to the community it serves.”
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DAVID ALDERSLADE
Chief financial officer and vice president of finance and adminstration Edgenuity Inc. BACKGROUND: Alderslade is responsible for
all areas related to accounting, finance, financial reporting, budgeting, forecasting, acquisitions, financing and tax reporting. He also oversees human resources and legal affairs. BIGGEST CHALLENGE: “My biggest professional challenge has been building the foundation to support the growth of Edgenuity from a start-up to a leading provider of K-12 online education. We’ve been able to do that by fostering proper business controls and effective management systems that deliver the business insights that helps us drive our business.” GREATEST REWARD: “What is most
rewarding is the ability to significantly impact both day-to-day operations and overall company strategy due to the broad financial and operational roles that I’ve played over the course of my career, and especially at Edgenuity. With that, comes the pride of having built the high-performing team that enables us to achieve our goals.”
LISA M. AUTINO Chief financial officer Caliente Construction, Inc.
BACKGROUND: When Autino joined
the rapidly growing company in 2014, she immediately begin to analyze the accounting and operational processes. While still a work in process, she has made significant contributions to the company’s operational efficiency and productivity, as well as laying a foundation for better growth management and improvement of the company’s bottom line. BIGGEST CHALLENGE: “The biggest professional challenge I have faced is making a decision to leave long term employment when faced with an ethical dilemma. Overcoming it involved fearless determination that I was doing the right thing, stepping back to re-gain confidence, and have resilience to bounce back in a new opportunity.” GREATEST REWARD: “The most rewarding
aspect of being a financial executive is the ability to influence the direction of the company, while the leadership team truly appreciates the value I add to the role.”
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2017 GREG BARBER
Controller and vice president of finance EPCOR Water USA BACKGROUND: Barber oversees all matters
related to finance, accounting, human resources and employee relations. BIGGEST CHALLENGE: “Like the
water industry, the business and the finance profession changes rapidly and significantly year over year. Professional development and continuous learning, from keeping up to speed on the latest solutions in trade journals or challenging myself to learn how other areas of our business, like human resources, intersect with finance, keep me current and on the edge of our changing business environment.” GREATEST REWARD: “You wouldn’t typically think that utilities are exciting or fastpaced environments. But EPCOR is, and that in itself is rewarding. Our people are genuinely passionate about what we do every day. We’re very fortunate to have a seasoned leadership team with diverse expertise. Working alongside them to get projects done, find the right solutions and move our company and the water industry forward is deeply rewarding.”
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CHERYL CAMPBELL TIM BARONE
Chief financial officer Vantage Mobility International BACKGROUND: Barone has led two private
equity sales processes over the last three years, which have resulted in internal rates of return of more than 65 percent for VMI’s partners and valuation increases in excess of 10 times. Barone has simultaneously held most other executive positions in the company. BIGGEST CHALLENGE: “My biggest professional challenge occurred during the sale of our business when we decided to go to due diligence with four potential buyers. As the project manager, a successful outcome required delegation to my staff and teammates, leaving me to accomplish the tasks that I was best suited to complete.” GREATEST REWARD: “The most rewarding
part of being a financial executive is being an integral part of the leadership team and creating the company’s strategic direction. Then being able to celebrate with the team in the successes and participating in the recalibration when inevitably some assumptions don’t come to fruition.”
Chief financial officer Wildflower Bread Company
BACKGROUND: Upon joining Wildflower,
Campbell immediately recognized the company is positioned for persistent growth both in Arizona and beyond. She led a successful recapitalization of the company in 2012 by working diligently with all financial stakeholders, including investors, banks, consultants, and auditors. She managed negotiations to determine value, process and structure of stakeholders transitioning out of the company. As a result of Campbell’s leadership, Wildflower is now 100 percent locally and family owned. BIGGEST CHALLENGE: “As a controller, the company I worked for experienced revenue growth over 500 percent during a five-year period. Seems like a great problem, except we were always running in many directions at the same time. Clear and effective and constant communication was the key to success.” GREATEST REWARD: “I enjoy helping teams understand how their business decisions impact the company financial position and coaching them to decisions that will deliver the best possible financial results.”
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2017
PATRICIA CHIODO American Traffic Solutions Chief financial officer
BACKGROUND: Chiodo is an accomplished
STEVE CHUN
Co-founder and chief financial officer DEPCOM Power, Inc.
business leader with a successful track record as CFO for both public and private companies. She has a unique ability to combine financial acumen with operational understanding to drive change, achieve results and grow shareholder returns.
BACKGROUND: Chun has more than 20
IMPACT ON COMPANY: Since joining ATS a little more that two years ago, Chiodo’s leadership has helped lead the company to higher financial performance. A hallmark of Chiodo’s leadership is a genuine intellectual curiosity that drives her to uncover root causes of problems and provide pragmatic solutions. In 2016, due in much part to Chiodo’s simple rallying cry of “hit the plan,” ATS enjoyed its most successful year in the company’s history. ATS increased EBITDA by almost 50 percent year over year without launching new products or major changes in the markets ATS serves. These strong financial results culminated in the successful transaction of ATS to Platinum Equity in May of 2017.
BIGGEST CHALLENGE: “Starting DEPCOM with nine other co-founders was my greatest professional challenge. We embarked on this challenge determined to build a national, utility-scale solar engineering, procurement, and construction/operations and maintenance company with no debt and minimal outside investment. Relying on experience, hard work and perseverance, we have built a $200 million EPC/O&M business in less than three years.”
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years of financial, consulting and renewable power experience, overseeing more than 3.5GW of utility solar power. He previously held leadership positions at First Solar and Accenture.
GREATEST REWARD: “Undoubtedly, the ability to strategize and solve operational challenges. Working with sales and operational teams to develop debt/equity capital structures or developing strategic joint venture partnerships that increase market share, improve operational efficiencies as well as directing our philanthropy donations are the most rewarding aspects of being a CFO.”
KEVIN COYLE
Senior vice president and chief financial officer Cable One BIGGEST CHALLENGE: “In the 1990’s, the government passed legislation which forced cable industry rate reductions. I was the CFO of a cable company with 21 SEC reporting entities with 21 separate lines of credit and all 21 bank loans went into default simultaneously due to the reduced cash flow. Refinancing all of the loans in a tense lending environment was arduous, but possible because I had carefully developed strong banking relationships in the previous years.” GREATEST REWARD: “The multi-faceted nature of the position, which encompasses leadership, peer collaboration and the cultivation and maintenance of external business relationships in order to drive positive results. The position is always evolving and challenging and requires flexibility and open-mindedness. A good example of this was recent M&A activity that required teamwork and perseverance resulting in substantial value creation for our company.”
2017 BRIAN DEAK Chief financial officer Arion Care Solutions
BACKGROUND: Deak is responsible of
the accounting and finance functions of the company. Deak has also found innovative opportunities that resulted in financial savings to the company, including establishing an overtime monitoring process and implementing a Working Opportunity Tax Credit program that resulted in significant savings for the company. BIGGEST CHALLENGE: “When I came on board, the Affordable Care Act was just becoming a statute. I had to learn about fully insured and self-insured health plans as quickly as possible. I did and we established a selffunded plan that has been beneficial to Arion Care Solutions.” GREATEST REWARD: “The most rewarding aspect is knowing that individuals within the company you work for are relying on you for solutions to difficult challenges related to a highly regulated environment and that you are able to come up with solutions.”
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ELIZABETH DODD Chief financial officer TriWest Healthcare Alliance
BACKGROUND: In September 2013, TriWest
was awarded a $4.2 billion Department of Veterans Affairs contract. Dodd led the charge as the company grew from 200 employees to more than 3,200 employees. Dodd negotiated leases with the nine additional locations and helped set up the facilities within a short timeframe. BIGGEST CHALLENGE: “The biggest challenge was undergoing a significant downsizing, which impacted the lives of our employees. We communicated frequently to help our fellow employees handle the stress; we offered job fairs, resume building classes, interview skills training, as well as a financial bridge to their next employment opportunity.” GREATEST REWARD: “The most rewarding
aspect is being a member of a leadership team which values input from each executive to help drive the organization to effective and efficient performance and meet its strategic goals. Sometimes it takes ‘out of the box’ thinking to overcome challenges which makes it even more rewarding.”
KURT GRAHAM
Vice president, controller and treasurer Elizabeth Arden Salon-Holdings BACKGROUND: Graham oversees all
financial and treasury functions of the business, including financial accounting and reporting, tax, payroll, accounts payable, risk management, loss prevention, cash management and treasury services. Graham leads the company’s annual budgeting process for two operating divisions (comprised of 42 discrete retail locations, including The Red Door by Elizabeth Arden), four corporate facilities, and 77 different general and administrative cost centers. IMPACT ON COMPANY: A recent example of Graham’s industriousness is the company’s decision to move to being self-insured. Graham leads the annual insurance renewal process and saw an opportunity. Working with an outside broker, Graham helped identify different selfinsured health insurance models available and helped negotiate rates, collateral requirements and other terms. This process required communication with several partners as well as internal benefits and accounting resources. The result was a significant one-time liquidity pickup with no increase in the Company’s risk exposure.
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2017
PEGGY HOUREN Chief financial officer EOS Fitness
BACKGROUND: Houren has more than 30
years of progressive experience in a breadth of roles. For most of her career, she has been working in the accounting or finance organizations of her companies, but she has also led information technology and member services organizations. BIGGEST CHALLENGE: “The biggest challenge was ascertaining the safety of my 70 employees and reassembling them post-9/11. Displaced from our office just blocks from Ground Zero, within two days I established a plan that enabled continuous operations. Despite the trauma endured, this was made possible through the team’s dedication and cross-function coordination.” GREATEST REWARD: “The most rewarding aspect of this role is utilizing broad knowledge of the company to provide financial leadership in strategy-setting and decision-making across the board to maximize ROI and company growth. Contributing to a successful company provides opportunities for employees and customers and stimulates economic growth in the community.”
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SEAN HUSMOE
Chief financial officer Southwest Autism Research & Resource Center BACKGROUND: Since 2009, Husmoe has
served on the leadership team of SARRC, a nonprofit organization dedicated to autism research, education, evidence-based treatment and community outreach. Husmoe collaboratively leads the entire organization in the development, implementation, and ongoing management of the organization’s annual budget. BIGGEST CHALLENGE: “Our biggest challenge at SARRC is managing growth while ensuring we maintain the quality outcomes that are a critical part of our double bottom line. To help manage this, we have identified key measures that we track weekly to keep us focused on the critical items that drive our finances as well as our outcomes.” GREATEST REWARD: “The most rewarding part of being the CFO for SARRC is being able to help direct the organizational growth and strategic plan. I enjoy the scenario planning and building financial forecasts as well as helping to come up with innovative solutions to challenges.”
TED KARDASZ
Controller, vice president of finance Total Dental Administrators BACKGROUND: Kardasz has more than
14 years of experience in the accounting industry serving in a variety of roles including audit manager, financial accounting manager, controller and vice president of finance. Kardasz is the primary financial contact with TDA’s parent company, Blue Cross Blue Shield and with the respective Department of Insurances, where TDA has licenses to administer insurance. IMPACT ON COMPANY: Kardasz has worked to make TDA’s financial reporting process more efficient and to follow a detailed timeline that assures results are provided in a timely manner. Reshaping the financial reporting process included meeting with all parties involved in the process. After multiple meetings, Kardasz was able to create a new financial reporting process with a detailed timeline that flowed more efficiently and reduced TDA’s month-end closing by two business days. This reduction in days allowed the accounting department to focus on areas to improve the company’s bottom line.
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2017 RENEE KRUG Chief financial officer GlobalTranz
BACKGROUND: Krug brings more
than 20 years of executive leadership and more than seven years of transportation industry experience to GlobalTranz. She provides strategic vision, champions process improvement initiatives, drives margin improvements, implements cost reduction initiatives and develops programs benefiting GlobalTranz’ employees, their families and the communities in which they work and reside. BIGGEST CHALLENGE: “My biggest
challenge, which is also a source of excitement, is managing our fast-paced growth. It has been a huge challenge to evolve our capital requirements, systems, people and processes while doubling the size of the company over a few years. I needed to recruit an expanded team to develop executive level reporting and analysis, implement new systems, improve cash flow, automate functions, develop an M&A function and implement controls. Now that Globaltranz is optimized for growth, we have completed three acquisitions this year with more underway.”
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DONALD LAUGHLIN Chief financial officer Pinnacle Transplant Technologies
BACKGROUND: Laughlin is responsible
for the financial reporting and monitoring of the organization. He has built a strong team at PTT to ensure the organization can continue to scale at a growth rate of 30 percent annually. Laughlin reworked PTT’s financial reporting into a robust model that measures performance across every sector of the business. BIGGEST CHALLENGE: “The CFO role continues to expand as a strategic organizational influencer. The challenge is balancing the carat of managing, structuring and building the profitable business of tomorrow against the avalanche of daily involvements and decisions around the more traditional accounting and finance responsibilities.” GREATEST REWARD: “The opportunity to make change and foster growth on all organizational levels. We have access to all the data for visibility into enterprise wide operational efficiency, creating the platform to impact all employees on every level. What a profound opportunity and dramatic challenge all at the same time.”
GREGORY LEE
Chief financial officer Arizona Cardinals Football Club BACKGROUND: In addition to his
responsibilities as CFO of the Cardinals, Lee is responsible for all financial, reporting, compliance, and insurance requirements for Rojo Hospitality Group. This includes financial planning for the company’s operations at University of Phoenix Stadium, Arizona Sonoran Desert Museum, game/event and monthly reporting to ownership, compliance reporting to the stadium’s owner and addressing various operating risk. BIGGEST CHALLENGE: “Transitioning from public accounting to a financial executive. It was a humbling experience realizing exactly how much I did not know. I overcame this challenge by seeking the advice of other professionals and by looking at it as an exciting opportunity versus an exhausting challenge.” GREATEST REWARD: “The most rewarding aspect of being a financial executive is being surrounded by highly intelligent and driven co-workers. The reason it is most rewarding is it constantly motivates me to be a better person and leader.”
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2017
LORRAINE MURRIETTA
MORGAN R. OLSEN
BACKGROUND: By ensuring that each
BACKGROUND: Olsen’s responsibilities
Vice president, chief financial officer and human relations director Off Madison Ave client initiative at Off Madison Ave is grounded in terms that tie back strategically to ROI, Murriett certifies the solvency and growth of the agency from a financial and operational perspective. BIGGEST CHALLENGE: “I am currently living the biggest professional challenge in that I am running a traditional and a start-up business out of one agency. We are trying to overcome the juxtaposition of these two entities by raising capital to spin off the start-up, while balancing all resources to maximize value for both entities.” GREATEST REWARD: “The most rewarding aspect of being a financial executive is being able to have the strategic responsibilities coupled with the financial responsibilities to help lead at our agency. This is rewarding, it gives me an opportunity to add value to our agency in various ways.”
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Executive vice president, treasurer and chief financial officer Arizona State University at the University include overseeing treasury and financial functions, real estate, facilities operations, human resources, police, environmental health and safety, information technology, business and auxiliary services and capital projects at the University’s five campuses. ASU currently has over $1 billion in active capital projects in various phases of design, construction, or close out. IMPACT ON COMPANY: Olsen arrived at ASU during the recession and was responsible for ASU’s financial maneuvering to survive and thrive during hard financial times. He steered ASU through a nearly 50 percent funding reduction per student in state investment, while at the same time balancing a 20 percent growth in full-time equivalent enrollment. He identified areas of reorganization for academic units and the consolidation of schools and departments to adjust for the changes in funding, allowing ASU to flourish during this challenging time.
RACHAEL PIERGALLINI
Vice president of finance and operations Derma Health BACKGROUND: As part of Derma Health’s
strategic plans around talent development and retention, Piergallini helped develop a mentorship program to build leadership skills within the clinics, which keeps them successful and challenged. She wrote and taught weekly classes from areas such as understanding business acumen to planning and strategic thinking. BIGGEST CHALLENGE: “My biggest challenge has been a work life balance. Being passionate about professional development, I derive a lot of personal satisfaction from executing and completing my work. Remembering to take time for myself to develop in other areas, makes me better for my family and my business.” GREATEST REWARD: “Working for small,
high growth companies, the rewards have been tremendous. It’s so much more than just finance. I get to be a part of creating something great, and utilize all my skills and talents beyond just the left side of my brain.”
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2017 ADAM B. REMIS Chief financial and human resources officer InnSuites Hospitality Trust
BACKGROUND: Remis has been the CFO
at Innsuites Hospitality Trust since 2013. He has almost 20 years of combined accounting, audit, tax and technology consulting experience. His clients have included Palm, Pioneer North America, Meritage Homes, Mesa Airlines, Choice Hotels and InnSuites. He served as the president of the local Arizona chapter of ISACA. BIGGEST CHALLENGE: “At the time
InnSuites recruited me, their CFO just retired followed by a well-qualified replacement who quit after one day, the auditors just quit and the accounting books reflected a team without leadership for three months. Priorities were set and we focused on the most important items first.” GREATEST REWARD: “At the end of the
day, management’s focus is to add significant value to our shareholders. As a CFO, the most rewarding aspect is finding creative costeffective solutions to problems, reducing our costs and therefore increasing profits and shareholder value.”
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CHARLES SERIANNI EUGENE RUIZ Senior vice president and chief financial officer Moon Valley Nurseries Inc.
BACKGROUND: Ruiz has financial and
accounting oversight of a 15-person staff that is responsible for all accounting, banking relations, auditor work, capital structure, budgeting, legal, acquisitions and asset purchasing for the 26-store nursery operation and 10 farming locations that cover more than 2,000 acres. IMPACT ON COMPANY: When Ruiz started with Moon Valley Nurseries in 2013, the company had grown to its limit. The company was in a serious cash crunch, lacked GAAP financials, had a poor point-of-sale system that hindered growth, it lacked reporting of inventory levels or production to sales, had a very poor banking and outside CPA relationships and an outdated accounting system. Under Ruiz’s leadership, the company has replaced or upgraded its outdated systems, replaced and improved banking and accounting relationships, created and hired an IT department and hired an HR director. All this helped the company dramatically improve sales and EBITDA.
Executive vice president and chief financial officer Republic Services, Inc.
BACKGROUND: Serianni is responsible for
maximizing shareholder value by driving longterm growth and efficiently allocating capital, managing enterprise risk and enhancing internal control environment. He oversees financial analysis and planning, accounting, treasury, investor relations, internal audit and tax. BIGGEST CHALLENGE: “Filing Republic Services’ annual financial statements with the SEC 90 days after our $12.5 billion acquisition of Allied Waste was my biggest challenge. Success required a team effort. I was able to assemble a talented and motivated team and focused my efforts on ensuring they had what was necessary to be successful.” GREATEST REWARD: “Developing people is the most rewarding aspect of being an executive. My success is due to the coaching and mentoring I received throughout my career. There is great satisfaction in being able to do the same for others. Nothing is more rewarding than witnessing the success of someone you helped develop.”
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MICHAEL SHENEMAN
Chief financial officer Commerce Bank of Arizona BACKGROUND: While Sheneman has
direct oversight for all financial statement preparation and reporting, balance sheet and income statement management and financial audits, it’s also his responsibility to know all pertinent regulatory and accounting statutes for capital maintenance, interest rate sensitivity, loan reserves and tax policies. Since joining the bank, Sheneman has managed a complete restructure of the bank’s Compliance and Bank Secrecy Act/Anti-Money Laundering (BSA/ AML) programs. BIGGEST CHALLENGE: “The turnaround of Commerce Bank of Arizona is the biggest professional challenge I’ve faced. We overcame that challenge by improving the business in at least a small way every single day. All of those small improvements make a significant impact when you dedicate yourself to them day in and day out.” GREATEST REWARD: “Being a part of
a successful team is incredibly rewarding, particularly being able to see tangible and measurable impacts of your efforts on your team’s success.” 66
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TODD SIFFREN WILLIAM E. SIWEK Chief financial officer TPI Composites, Inc.
BACKGROUND: In 2013, Siwek became
CFO of TPI Composites, the largest independent global manufacturer of wind turbine blades. Since Siwek assumed the CFO role, TPI Composites has grown revenue 52 percent per year on average, tripled global market share from 3 percent to 9 percent in 2016, grew from fewer than 2,000 employees to more than 8,500 employees globally today, successfully listed TPIC on Nasdaq at $11 per share and expanded adjusted EBITDA margin from 3.9 percent in 2013 to 12.4 percent in the company’s most recent quarter. BIGGEST CHALLENGE: “Preparing our company to become a public company. Hiring great people and great advisors and providing a vision and roadmap and then the leadership around the execution.” GREATEST REWARD: “Working with all
functions of our company to better understand how their job/performance ultimately impacts our financial results and then watching them engage and drive overall performance.”
Chief financial officer Global Patent Solutions, LLC
BACKGROUND: During Siffren’s tenure,
Global Patent Solutions has grown from an organization consisting of approximately 15 employees to an organization of more than 120. Siffren has been instrumental in designing and implementing numerous controls and processes to successfully manage the original rapid growth. BIGGEST CHALLENGE: “One of my biggest challenges was creating stability in our IT operational and compliance environment. A key element of the solution was installing the right people, while also identifying and implementing critical processes. Not only did this address the immediate situation, but it also created greater backup and succession paths.” GREATEST REWARD: “I find it most
rewarding to be part of the executive team and see the positive impact that our efforts and plans have on our employees. It is satisfying to make decisions that I believe are best for the company, and then engage the team to execute them to completion.”
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RON VINCENT Chief financial officer Crexendo, Inc.
BACKGROUND: Vincent is CFO of Crexendo, a cloud telecommunications
company that provides enterprise-class cloud services. After spending more than a decade working in public accounting as an auditor, Vincent is an expert when it comes to generally accepted accounting principles, internal controls and SEC reporting. BIGGEST CHALLENGE: “The biggest professional challenge I have faced was a reduction in force. Employees are like family to me. It’s very difficult to deliver bad news to a family member, let alone kick them out of the family. I overcome that challenge knowing I have prepared them for future opportunities.” GREATEST REWARD: “Helping employees you lead achieve their personal and professional goals is the most rewarding aspect of being an executive. Mentoring people is so much more rewarding than completing financial executive responsibilities. If you mentor your employees, they will achieve more than you could ever imagine and together you will succeed.”
JEFF WINZELER Chief financial officer Everspin Technologies
BACKGROUND: In 2016, Winzeler identified an IPO path as a possible
source of funding and worked to gain the directors’ support to further pursue this approach. The strategy culminated in a successful $40 million IPO along with a $5 million concurrent private placement. BIGGEST CHALLENGE: “To be a successful CFO, you must build solid business partnerships. I have turned around a number of situations where the partnership was broken before I arrived. By actively listening, always seeking the best answer for all, delivering opinions based on good analysis and operating with utmost integrity, trust is established and business partnerships flourish.” GREATEST REWARD: “A good CFO has the opportunity to be involved in a multitude of initiatives. It is never boring. Providing analysis and resources for the company to be successful, strategic planning, developing culture, representing the company with investors, customers and employees are all activities that are personally and professionally rewarding.”
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WEALTH MANAGEMENT
10 BEST
By MICHAEL GOSSIE n analysis by Az Business magazine and financial technology company SmartAsset uncovered which Arizona-based stocks have performed the best over the last five years. Az Business and SmartAsset considered four factors in the analysis: stock price, dividends paid, volatility, corporate leadership and stability and found the risk adjusted return of the stocks. The companies were then indexed and ranked. The list below shows the top performing companies in Arizona:
A
THE
Arizona-based firms in which to invest COMPANY NAME
TICKER HEADQUARTERS SYMBOL
AVG. ANNUAL RETURN
Microchip Technology
MCHP
Chandler
20.42% 78.24
STORE Capital Corporation
STOR
Scottsdale
29.72% 77.18
GoDaddy
GDDY
Scottsdale
52.4% 69.83
Grand Canyon Education
LOPE
Phoenix
21.8% 68.67
Western Alliance Bancorporation
WAL
Phoenix
33.46% 64.52
Pinnacle West Capital Corporation
PNW
Phoenix
16.74% 64.38
Northern Tier Energy
NTI
Tempe
30.46% 62.83
Healthcare Trust of America
HTA
Scottsdale
16.59% 61.47
Republic Services
RSG
Phoenix
12.59% 55.27
TASER International
TASR
Scottsdale
31.38% 53.46
Fun facts • Kiplinger named Microchip Technology the “Best Stock in Arizona” for 2018. Over the past 12 months, Microchip’s shares rose 57 percent, compared with a 46 percent gain for the average semiconductor firm. CFRA analyst Angelo Zino rates the stock a “buy” and sees it hitting $90 over the next 12 months.
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• In June, shares of real-estate investment trust Store Capital chalked up their biggest one-day gain since going public after the company unveiled a $377 million investment by a unit of Warren Buffett’s Berkshire Hathaway. Berkshire Hathaway is now STORE’s third-biggest shareholder with a 9.8 percent stake.
PERFORMANCE INDEX
• Yahoo! Finance named Grand Canyon Education one of the Top 3 education stocks for 2018. Shares of Grand Canyon returned more than 100 percent in the last year, outperforming the Zacks School industry. Revenues are also expected to grow 10.5 percent this year.
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WEALTH MANAGEMENT
Liz Shabaker Principal and chief operating officer Versant Capital Management, Inc. // versantcm.com
Shabaker is a member of the national Schwab Advisor Services Advisory Board, a board member of the Central Arizona Estate Planning Council, a member of the Financial Planning Association, National Association of Enrolled Agents, Arizona Society of Enrolled Agents, Planned Giving Roundtable of Arizona and is an adjunct faculty member for the Institute for Preparing Heirs. Shabaker’s reach goes beyond the financial arena into other community-related organizations. She is a member of ASU Women in Philanthropy, she serves as president of the board of directors for Free Arts for Abused Children of Arizona and is a member of The Planned Giving Committee of Phoenix Art Museum. Trend to watch: “With the Department of Labor’s delayed plans to roll out its fiduciary rule of eliminating conflicts of interest among advisors when giving investment advice to people saving for retirement, it will be more critical than ever to make sure that your wealth manager and investment professional is a fiduciary that works in your best interest at all times. It is important to know what type of advisor you’re working with. Fiduciaries provide investment advice and services for a percentage of assets under management, and are legally obligated to their clients. This insight may save you a lot of money.” Advice for 2018: “The importance of aligning your goals to your financial plan is paramount. Helping to identify tangible underlying goals makes it much easier to prioritize what are essential needs, wants, and aspirational wishes. Understanding these goals leads to a more accurate analysis of what you can reasonably expect to achieve and what additional actions or tradeoffs might be needed in order to get where you want to go.”
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MOLINA COMING WEN
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WEALTH MANAGEMENT
Theresa E. Chacopulos Private wealth advisor, senior vice president
Morgan Stanley Private Wealth Management // morganstanley.com
Chacopulos serves ultra-high net worth clients, working to create a customized approach to portfolio management. A 31-year financial services veteran, she holds the Certified Financial Planner and Certified Investment Management Analyst designation. Chacopulos fosters longterm relationships with her clients, often working in close collaboration with their other advisors. She was named a Barron’s Magazine Top 1,000 Advisor in 2009-2013, including two years as the No. 1 advisor in Arizona. Chacopulos is a member of the Central Arizona Estate Planning Council, the Investment Management Consultants Association and the Financial Planning Association. Trend to watch: “Wealth managers and financial planners no doubt will have numerous client discussions over tax reform in the coming months. The odds of a comprehensive tax reform law are likely by early next year but with the volatility that has seen other initiatives fail, the final outcome is uncertain. The framework leaves many of the final details to the tax-writing committees in Congress. Left unanswered is a final top individual rate and the difficult task of picking winners and losers—in other words—which itemized deductions will be discarded. Overall the proposal reduces the seven individual tax brackets to three, eliminates the estate and alternative minimum taxes, and retains the mortgage interest deduction. Financial advisors will find some of their favorite tax-planning tools intact, including deductions for retirement savings and charitable giving.” Advice for 2018: “Financial planning and wealth management as an investment advisory discipline incorporates a number of aggregated financial services. My advice is to find a financial advisor who will properly manage these segments in addition to working with your attorney, CPA or any of your other professional advisors.”
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5 TIPS
to grow wealth in 2018
By MICHAEL GOSSIE While it’s fun to dream of winning the lottery or landing a deal on “Shark Tank,” the reality is both of those wealth-building strategies are just that: dreams. So rather than living in fantasy land, we asked five of the best and brightest wealth management minds in Arizona for tips to help grow your wealth in 2018. M. Todd Smith Chair of Quarles & Brady’s local Estate, Trust & Wealth Preservation Practice Group Quarles & Brady LLP quarles.com Advice for 2018: “After nearly a decade of back and forth between the financial industry and consumer advocates, earlier this year, the Department of Labor rolled out the first phase of the so-called fiduciary rule, which requires financial advisors to act in your best interests. My advice would be to take advantage of the environment that is being created by new fiduciary regulations regarding the transparency of management fees. Ask questions about how your wealth managers are getting paid and expect to get answers explained in a way that you understand.” Calvin Goetz Co-founder and president Strategy Financial Group strategyfinancialgroup.com Advice for 2018: “If my client wanted to invest in Arizona-based firms, I would have them check out Pinnacle West Capital Corporation. They are an investorowned electric utility holding company based in Phoenix with consolidated assets of nearly $17 billion. I also like Microchip Technology Inc. because they are a leading provider of microcontroller and analog semiconductors, providing low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide.”
M. Todd Smith
Lennard van der Feltz
Calvin Goetz
Trevor W. Wilde
Lennard van der Feltz Founding partner Pinnacle Financial Advisors teampinnacle.net Advice for 2018: “There are three key areas of advice. First, be clear about what you want your money to do for you. Next, determine whether your income tax situation could use some attention and how tax code changes could affect you. Finally, don’t go it alone. Select a credentialed, independent financial planning team that’s licensed to provide a broad array of solutions from many sources to help you select the best investments to realize your plan.” Trevor W. Wilde Managing director Wilde Wealth Management Group wildewealth.com Advice for 2018: “We like to keep it simple for people – make it, save it, invest it. Then, repeat.”
Arthur T. Doglione President and senior managing director Alpha Fiduciary alphafiduciary.com Advice for 2018: “Stocks may benefit from upcoming tax reform, as it may improve earnings. We are waiting to see how beneficial reform might affect investors individually, as sustained consumer demand drives economic growth. Consider only investing for growth what you can leave invested for at least five to seven years, and stay organized. You can’t control the markets, but you can plan intelligently. A financial professional can help you best when you provide a clear picture of your situation.” AB | November-December 2017
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Chris Loeffler Co-founder and CEO Caliber – The Wealth Development Company // caliberco.com
As a co-founder and CEO of Caliber, Loeffler has created a wealth-building platform that offers accredited investors direct access private equity investments in commercial, hospitality and residential real estate assets. A former public accountant with PwC and graduate of Cal Poly San Luis Obispo, Loeffler is recognized by LODGING as a “Top 10 Up-and-Comer in Hospitality.” Loeffler has grown the full-service real estate investment firm to $265 million in assets under management in five states and more than 700 team members. Trend to watch: “Simply put, access to alternative investments like real estate private equity. Institutions and family offices have consistently invested more than 25 percent of their assets in alternatives, where the average individual investor has less than 2 percent alternatives. People are waking up to the need to build wealth outside of a traditional stocks and bonds model and gaining access to well-structured real estate opportunities is one of the best options for them. They see the safety and superior returns that institutions are achieving and are seeking the same for themselves.” Advice for 2018: “First, I applaud insight that alternative investing is an important opportunistic component of a welldiversified wealth portfolio. While Caliber does not offer advice on where to invest, I’d recommend working with an independent Registered Investment Advisor (RIA) that understands alternative investments and real estate. I encourage people to continue learning about the alternative investing world and how selfdirecting IRAs/401k plans through reputable companies to build wealth is viable.” Arizona investment: “Today’s affluent investor has access to more wealth building opportunities than ever before and many of those companies to invest in are right here in Arizona. Look to connect with RIAs if you seek out direct investments within our great state.”
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2017
How should banks handle cannabis business? 12 banking topics to watch in 2018
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ARIZONA BANKERS ASSOCIATION
DAZED and As the marijuana industry blooms in Arizona, banks are left in a quandary about how to handle the legal — yet illegal — enterprise
By NIKOLE TOWER
W
here would you put your money if you weren’t allowed access to a bank? In a safe? Under the mattress? Maybe a friend can hold onto it for you? Now, let’s say you’re operating a successful business and the money is flowing in at a generous rate. Putting cash like that in a safe, under a mattress or with a friend might make you feel a little uneasy. This is the problem marijuana dispensaries country-wide face on a daily basis. Laws on what usages of marijuana is legal or illegal may vary state by state, but under the eye of federal law, it should be avoided at all costs. The Department of the Treasury Financial Crimes Enforcement Network laid out the expectations for banks regarding marijuanarelated businesses. The Controlled Substance Act (CSA), “makes it illegal under federal law to manufacture, distribute, or dispense marijuana,” according to the memo. Banks are insured under federal law, so if they decide to do business with a dispensary, then they risk losing their insurance.
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Laura Bianchi
Paul Hickman
DON’T ASK, DON’T TELL? Under the Obama administration, Attorney General Eric Holder told financial institutions that they wouldn’t be investigated if they worked with marijuana-related businesses inside of states where it was legal and the businesses were acting according to state law. However, it wasn’t reassuring for banks, because there was nothing stopping the government from investigating them regardless. Today’s administration is likely to take a different approach. Current Attorney General Jeff Sessions is blatantly opposed to the idea of legalizing marijuana and any progress toward the industry being able to work with banks can be temporarily stunted. “Is there a way to do this without legislation?” asks Paul Hickman, president and CEO of the Arizona Bankers Association. “Frankly there isn’t. I can’t tell you why. I can just tell you the Arizona Bankers Association looked at it. Marijuana has to get rescheduled legislatively. Congress has to direct the Drug Enforcement Agency (DEA) to reschedule it under the Controlled Substances Act.” There are some banks that choose to take a gamble and work with the industry. They benefit just as much as the business would. They’re able to profit from them and charge interest rates just like they are able to with any other business. There are certain ways that banks have found to get around it. Banks will help a business by dealing with them indirectly. They’ll handle transactions with everything surrounding the institution — like providing a loan for improvements to the grow facility — but they won’t touch the money that comes from sales or get their hands in payroll for employees. A GROWING RISK “The problem is if you work with dispensaries, you’re risking your insurance,” Hickman says. “It doesn’t matter if you’re a state charter or a federal charter. You only have one insurance carrier if you’re a bank and that’s the FDIC (Federal Deposit Insurance Corporation). If you don’t have insurance, you’re out of business.” AB | November-December 2017
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ARIZONA BANKERS ASSOCIATION
“You can’t have a business this cash-intensive and not have access to a bank.” Paul Hickman What options do marijuana businesses have then? Besides trying to build a relationship with a local bank, they typically store their cash in a safe away from the site of the actual business. They have ATMs installed in their store for easier cash transactions. In an exaggerated sense, yes, they’re basically hiding their money under the mattress. “You can’t have a business this cash-intensive not have access to a bank,” Hickman says. “Sooner or later, someone will get hurt.” Prop 203, or the Arizona Medical Marijuana Act, passed by a slim margin in 2010. It went into effect in the spring of 2011 and Arizona became the 14th state to adopt such a law. The cannabis industry is overseen by the Arizona Department of Health Services (ADHS). The state has yet to hop on the recreational train, but it’s likely that’s where things are heading after Prop 205 was narrowly rejected in 2016. A BUDDING BUSINESS It’s not the state’s laws that makes it stand out, but the regulations. Arizona is a highly-regulated state when it comes to the distribution of marijuana, which is no small feat when taken into account how quickly the industry has grown. Between 2011 and August of this year, the number of active medical marijuana cardholders more than quadrupled, from 35,641 to 144,947, according to ADHS. “We’re a very successful industry,” says Laura Bianchi, director of Rose Law Group’s Cannabis Practice. “We’ve done very well in Arizona. The number of patients have continued to grow each year and we have a lot of quality dispensaries. We have a vertically integrated license here, so you can dispense and cultivate.” At the rate it’s going now, the likelihood of recreational marijuana usage becoming legal in Arizona in the near future is high. What will keep Arizona ahead of the game is maintaining these strict regulations. States like Colorado and California have been watching how the industry operates here. Arizona has a limit to the number of licenses given out and the zoning and land use are also more restrictive in the state, whereas unregulated states may have hundreds of dispensaries in one city alone.
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“I know that because it takes time and money and effort to actually get a license and maintain a license and operate successfully, it starts to kind of, for lack of a better phrase, weed out the people who maybe wouldn’t make the greatest industry leaders,” Bianchi said. WORKING TOGETHER While it has been a factor in accidental deaths, marijuana has not reportedly killed someone through overdose, yet it’s still categorized by the Controlled Substances Act as a Schedule 1 drug, next to ecstasy, LSD and heroin. There were 20,101 overdose deaths related to prescription pain relievers in 2015, according to the American Society of Addiction Medicine. With that kind of label, it’s understood why banks don’t want to get their hands “dirty,” in a sense. However, it’s making legal marijuana business operators feel like criminals that need to sneak around. “They pay federal taxes,” Bianchi said. “They just don’t have the opportunity to bank like everyone else does. It’s a constant battle. It’s politics, though. It’s a slowmoving train. We do the best we can.” The state has come a long way since first legalizing the medical use of marijuana in 2010. However, the states can only do so much before it has to be left up to the federal government. People within the industry continue to lobby their politicians on every government level. The level of sophistication from within the business — from growing the plant to the paperwork that’s necessary to be a cardholder — has raised eyebrows. More professionals have begun to join the industry. It’s a system from which everyone can benefit. “We continue to mature as an industry,” Bianchi said. “It’s here. It’s in 29 states. It’s not going anywhere.”
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THINGS TO WATCH
IN 2018
From evolving technology to regulatory relief, there are plenty of uncertainties that could transform the banking industry
By MICHAEL GOSSIE
N
o industry — with the possible exception of healthcare — has faced as much uncertainty over the last decade as banking. It seems change is imminent in banking As we head into 2018, it’s not “if” banking will change, it’s “how” banking will change and what factors will drive that change. So, over the course of 2018, what is going to transform the banking industry the most and have the biggest impact? Well, Arizona banking leaders have some ideas.
2 CHANGING
BUSINESS MODEL
Bernard Narine, regional president and head of retail banking for Arizona and Florida, BMO Harris Bank: “Our industry is being transformed by digital technology. Customers are changing priorities around how they prefer to manage their financial lives and how they want to do business with us and this is introducing new challenges to our traditional business and operating models.”
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1
OMMUNITY C BANKS
Candace Hunter Wiest, president and CEO, West Valley National Bank: “Dodd Frank — aka the ‘Community Bank Genocide Act’ — will force continued, accelerated consolidation in community banks if it isn’t reformed. Since enactment, the Big 10 banks have actually gained market share. Weren’t they the guys that caused the crisis? If community banks disappear, lending to small businesses and in rural areas will decrease and it will impact the economy.”
3 RETAIL LANDSCAPE Patrick Joyce, Arizona commercial lending manager, Bankers Trust: “We’re paying close attention to changing demands for retail space and the outlook for malls. Online retailers, led by Amazon, are growing, while mall and big box retail development is slowing. In banking, this means fewer retail projects to finance and more conservative underwriting for clients developing retail space.
4
EDUCATION
Curtis Reed, region manager for Arizona, JPMorgan Chase & Co.: “The economy requires a more skilled workforce and our youth needs the right education and skills to have a shot at getting these types of jobs.”
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6 SOCIAL MEDIA
5
ARTIFICIAL INTELLIGENCE
Mark Young, president and CEO, National Bank of Arizona: “Artificial intelligence and its impact on decision making and modeling is the trend that will impact banking the most. This technology will disrupt how teams are staffed and the delivery of products and services.”
Brad Parker, Phoenix CEO, BBVA Compass: “The speed and ease of electronic payments provides a great customer experience, but accuracy and security will play a bigger role in the long-term success of each platform. Social media and the speed of news has the ability to severely damage the viability of a payment platform that violates the trust of the customer.”
7 COST OF COMPLIANCE
8
Dave Ralston, CEO, Bank of Arizona: Banks have recovered from the Great Recession and are on strong financial footing. However, earnings are muted due to Dodd-Frank imposed regulations and low interest rates. Most added compliance costs are now embedded in bank income statements and increased earnings are anticipated. With the new administration in Washington, the industry is hopeful of regulatory relief, but significant changes are not likely.
Don Garner, CEO, Alliance Bank of Arizona: “The economic environment is strong and banks will continue to support business growth during this cycle. There is much activity on the mergers and acquisitions front and I anticipate we will see further consolidation of the banking industry and fewer independent organizations in the coming years. It’s evident that larger banks will continue to dedicate meaningful resources to corporate governance and risk management.”
CONSOLIDATION
9 HUMAN
10
FIDUCIARY STANDARDS
11
Jim Patterson, CEO, UMB Bank Arizona: “Finding the balance between supplying state-of-the-art technology while still managing faceto-face relationships could have the biggest impact on the banking and financial services industry.”
Annette Musa, Arizona market president, Comerica Bank: “A Department of Labor rule that requires retirement advisers to abide by a ‘fiduciary’ standard has and could continue to change how investments are delivered, not just in retirement accounts, but all accounts. These changes could not only affect the delivery model, but the product choices as well.”
Teresa Mandelin, president and CEO, Southwestern Business Financing Corporation: “Government regulations relating to small business — minimum wage, healthcare, etc. — are impacting profitability of small business. This will slow the growth of Arizona small business and impact our borrowers’ ability to invest in capital assets. No need for loans when you are not growing/ investing.”
INTERACTION
12 EVOLVING TECHNOLOGY Neal Crapo, Southwest division manager, Wells Fargo Middle Market Banking: “Technology will continue to result in significant changes to the financial services industry. Whether it comes from artificial intelligence, virtual reality, payment technologies, mobile technology, or something else, the face of how banks interact with customers continues to change. The customer expectations of banking products changes as technology provides new capabilities.” 90
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SMALL-BUSINESS REGULATION
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CHIPS ARE DOWN
Banks deploy a wide range of technology-based efforts to combat fraud and protect customers By JESSE A. MILLARD
T
he digital era has ushered in a new world where anything online is vulnerable at any given time, which is why bank security professionals are constantly in the trenches defending their institutions against increasingly sophisticated threats. “(Combatting fraud) used to be as simple as training your tellers on how to get good ID,” says Laura Schaeffer, director of operations and technology at National Bank of Arizona. “Now, there are so many different ways that fraud could occur, that it’s just not that simple. It’s a much more complex task than it was in the past.” Fraudsters have become great impersonators, as they increasingly use sophisticated social engineering techniques to commit acts of fraud, Schaeffer says. Email-based fraud against its customers is the most common type of malicious activity Schaeffer deals with, but bank executives have been targeted, too. “Bank executives are not exempt from receiving some of these emails,” Schaeffer says. No one is. Banks are combatting fraud in a variety of ways. Debit and credit cards have largely been transitioned to chip cards as a way to prevent credit card skimmers from stealing precious bank data off of the antiquated magnetic strip.
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Michael Cocanower
Neal Crapo
Often, you’ll need two-factor authentication to access accounts. Most of us have received emails about how someone accessed your bank account from an unfamiliar device. And some banks immediately notify you about any purchases made with your account if they seem abnormal. Your inbox is a scary place Business email breaches, dubbed the “$5 billion scam,” have risen so much that the Federal Bureau of Investigation released a public service announcement about these types of scams in May. Michael Cocanower, founder and president of itSynergy, a Phoenix-based IT consulting firm, says these scams can be as simple as receiving a fake email informing you that your account has been compromised and it’s time to change your password. The email then directs you to a web page that looks like
James Kaplan
Laura Schaeffer
your bank’s web page, but it’s just a front to obtain your information. The emails can be more sophisticated. Scammers who have already gained access to an email account of someone you trust, say the president of your company, can do serious damage. Once inside an email account, hackers will analyze and study how the owner of the compromised account writes email messages. Once the hacker has that down, they’ll send an email, written just as your firm’s president would. The hackers could then ask for a W-2 for an employee or ask the CFO to transfer company funds to an account. “The bad guys are observing communication patterns and they can really make those emails seem legit,” Cocanower says. Regulations and other measures Banks are heavily regulated, which is why bank customers are often the target
of fraud, Cocanower says. Bank fraud is a quicker way to make a buck for hackers because they don’t have to go through the extra steps that are involved with identity theft, such as applying for new credit cards. “With bank fraud, if I can fraudulently convince you to wire transfer me some money, then there’s a very direct, fast financial benefit,” Cocanower says. “And I think that’s what makes bank fraud appealing to the bad guys.” Regulatory efforts to get banks to combat fraud started after the 9/11 terror attacks when the Patriot Act was passed with portions that made banks beef up their anti-money laundering and know-your-customer efforts, says James Kaplan, senior banking lawyer and partner at Quarles & Brady. Efforts against cyber-based threats started to kick off after the Great Recession, Kaplan notes, as online banking became increasingly used. Banks have been deploying a wide range of technology-based efforts to combat fraud and protect their customers, he says. Banks have been installing firewalls, designing their systems in a way where — if it’s hacked — hackers won’t have access to the entire network, among other tools. Banks like JPMorgan Chase Bank utilize 128-bit encryption to protect customer information. Its mobile apps are designed in a way to protect the identity and information of users, by even disabling some of the application features when downloaded onto a jailbroken device, which can often be an access point for hackers. Kaplan believes most banks today have proper cybersecurity measures in place to combat fraud. “Banks read the newspapers, they see what the dangers are,” Kaplan says. “They see, given the nature of their business, they’re most at risk.” What can be done? When a customer of National Bank of Arizona is the victim of fraud, the bank will work with both the customer and law enforcement to report the incident, Schaeffer says. The bank also works with the Federal Trade Commission on reporting cyber fraud. Like with other forms of cybercrime, fighting bank fraud is a preventative game. Cocanower says picking up the phone to make sure emails are legit is one of the best tools you can use to fight fraud. And for those IT teams out there, keeping software up to date with the latest patches is crucial, Cocanower says. Once those patch notes are released, they’re basically a how-to guide on hacking old software, he adds. Many cybersecurity experts believe that there will never be a one-fix solution to prevent cyber-based fraud and attacks, but one thing is certain: despite the threats, bank customers have embraced technology and there is no going back. “Technology will continue to result in significant changes to the financial services industry,” says Neal Crapo, Southwest division manager for Wells Fargo. “The customer expectations of banking products changes as technology provides new capabilities.” Along with new capabilities come new risks. Which experts say banks are prepared to defuse. AB | November-December 2017
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2017
The ‘Queen of Green’ reflects on association’s successes How will autonomous vehicles impact environment?
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ARIZONA FORWARD 2017
DIANE BROSSART: “I’ve loved my time at Arizona
Forward,” says the retiring president and chief executive officer of Arizona Forward. “I feel blessed to be in a position where I can help contribute to a stronger Arizona, both economically and environmentally.”
PHOTO BY BRUCE ANDERSEN, AZ BIG MEDIA
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queen
green The
of
Retiring CEO reflects on Arizona Forward’s growth, successes and the key to lasting relationships By MICHAEL GOSSIE
F
or someone who has had a monumental impact on Arizona’s environment, Diane Brossart wasn’t much of a tree-hugger growing up in Michigan. “When I moved here, I fell in love with Arizona — the blue skies, the sunshine,” says Brossart. “I asked myself, ‘How can we protect this and ensure that it stays this way.’” She answered that question with a 26-year reign as the president and CEO of Arizona Forward, which brings business and civic leaders together to promote cooperative efforts to improve the environmental sustainability and economic vitality of our state and local regions. The list of environmental accomplishments for Brossard, who announced in June that she was retiring from Arizona Forward, is vast: • She spearheaded the award-winning expansion of Maricopa Countybased Valley Forward to a statewide entity — Arizona Forward — in 2013. Her advocacy of Rio Salado, regionally and locally, resulting in the creation of the Tempe Town Lake and Phoenix Rio Salado Restoration Project. She was part of the collaborative leadership that resulted in a regional light rail system that continues to expand. She led desert preservation and open space initiatives that protect public lands in multiple Valley communities. She organized educational and outreach programs on water issues that brought business and civic leaders together on ways to ensure a reliable water supply for Arizona. “I’ve been privileged to lead one of Arizona’s most impactful nonprofits and work with amazing ambassadors of the Grand Canyon State,” Brossart says. “I’ll always support the mission of this exceptional and unique organization, which is poised for growth and ongoing success.” Az Business sat down with Brossart, who was named one of Az Business magazine’s Most Influential Women of 2013, to talk about how Arizona is doing as a steward of its environment.
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ARIZONA FORWARD 2017 Az Business: How do you think Arizona is doing in 2017 in terms of taking care of its environment? Diane Brossart: We’ve come a long way as a state in protecting and enhancing the environment. I’m encouraged by what I see not just in Central Arizona, but in Northern Arizona and Southern Arizona as well. We are making great strides in managing our water supply and forging partnerships between cities. On the land use side, I see lots of parks and open space, more walkable communities and a balanced multi-modal transportation system with alternatives to the automobile. It’s very encouraging. Are we perfect? No, but there will always be a place for a group like Arizona Forward to keep shining the light on how to grow in a responsible manner in a desert environment. AB: What has changed the most since you started at Valley Forward in 1991? DB: When I moved her from Michigan in 1982, each community was kind of siloed in how they thought of things. Over the years, that’s definitely changed. When the transportation initiative Prop 400 came around — light rail was important to Phoenix, arterial streets were important to Tempe, Glendale wanted freeways — everyone had to work together to split the pie and it was good. When Valley Forward went statewide and became Arizona Forward, we were told people in Tucson didn’t want to hear what people in Phoenix had to say. But we found that the business communities statewide are really interested in elevating Arizona and our position in the marketplace globally. They perceive the competition as Texas, Colorado and New Mexico, not Phoenix, Tucson and Flagstaff. So there is a real interest in working together and collaborating today that wasn’t always there in 1991. AB: What is the state doing well? DB: Water management is an area where we really excel and we need to because we have a finite supply of water and we are in such a unique environment here. Being that, we are seeing a lot more collaboration between private and public sectors. When I started in this job in 1991, it was very much an us against them — environmentalists vs. the business community — mentality. Now, the business community is leading the way and it’s commonplace, it’s not just trendy anymore.
AB: Where does the state need to do some work? DB: We just did a statewide survey of Arizona residents and their biggest concern was water, where I think we are doing some of our best work. Two-thirds of the respondents don’t think the state is doing enough in terms of climate change and climate change mitigation. Arizona residents are worried about that and we should be, not just here, but globally. AB: What has been your toughest challenge? DB: When I first started in 1991, it was more about, “How do we raise enough money to keep the doors open?” than it was about, “What is the mission and how are we driving to it?” Those two have to go hand-in-hand. Fundraising is always a challenge for an organization. But today, we are very financially solvent, and that’s a very good thing. AB: What accomplishment gives you the most pride? DB: Taking Valley Forward statewide and becoming Arizona Forward. I’m very proud of the number of members we’ve been able to convene statewide. We now have Pima County, Coconino County, Pinal County, Maricopa County, ASU, the University of Arizona, NAU and the community colleges, so we have the best of the best from around the state. We’re into our fifth year as Arizona Forward and friendships have been made and trust has been built. Getting everything thinking together collaboratively and trying to solve the problems and address the issues collectively, which has been Arizona Forward’s strength over the years, has been very gratifying. AB: What can other businesses learn from Arizona Forward’s successful transition into a statewide organization? DB: The key to success in any business is being collaborative. Sometimes, that’s difficult because we are all very protective of our niche. But as soon as you open the floodgates, good things happen. Compared with how business was done when I started in 1991, things are completely different in 2017. But I believe that relationship building will be key no matter what the year. And it’s not texting or emailing, it’s sitting down and looking at someone’s face and building that relationship.
ABOUT ARIZONA FORWARD What it is: Arizona Forward is an advocate for a balance between economic development and environmental quality, and convenes business, community and civic leaders in thoughtful public dialogue on critical sustainability issues. The association is a blend of members including large and small businesses, government jurisdictions, the education and nonprofit communities, as well as others that share a goal of promoting cooperation to improve the environment
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and quality of life in Arizona. It encompasses 250+ member companies representing tens of thousands of employees working together to help shape local communities and move Arizona forward. Arizona Forward mobilizes the state’s business leaders and policymakers to leverage their collective power to influence how we best grow our communities, stimulate our economy and enhance our environment. Information: arizonaforward.org
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ARIZONA FORWARD 2017
NOT
IN THE DIVER’S SEAT
How do we move forward in Arizona as autonomous vehicles change the landscape of transportation?
By ERIN THORBURN
O
nce autonomous vehicles could only be found in fiction — like an episode of “The Jetsons.” With Gov. Doug Ducey’s Executive Order 2015-09 approving the testing and development of automated vehicles in Arizona, self-piloted cars are now transitioning from fiction to fact. And, while more recent cinematic depictions of autonomous vehicles — like “iRobot” — portray vehicles with minds of their own, or on “Silicon Valley,” where misfortuneshrouded “Jared” is trapped and shipped to an obscure island, seem to paint a bleak outlook of autonomous vehicles, the reality of autonomous cars in Arizona is actually quite the opposite. How will the exciting advent of autonomous cars impact our roadways and environment?
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NOT QUITE AS COOL AS KITT, NOT NEARLY AS SCARY AS HAL For all the anecdotal examples of driverless cars, not everyone interprets autonomy with optimism. For those who’ve watched “2001: A Space Odyssey” too many times, the thought of a machine that drives itself may elicit an adverse reaction. After all, hasn’t research demonstrated that artificial intelligence (AI) can develop an affinity for disobeying the wills of man? Before lamenting: “Open the pod bay doors, HAL!” consider a few common misnomers of autonomous vehicles. “Some people are concerned about letting a machine make decisions for them and they express their continued desire to be a driver,” explains, national lead of transportation technology for
HDR. “I would say that if you bought a new vehicle in the last five years, you are already being assisted with driving tasks; especially in the case of having a Level-1 autonomous vehicle.” Aside from self-piloted cars going rogue, other concerns center on potential safety and environmental concerns. Just how safe will autonomous vehicles be on our Arizona roadways? “We all focus on the car,” says Lauren Evans, Pinyon Environmental’s president and CEO. “There has been less discussion concerning how roadways are constructed or in compliance with precise measurements and radars in conjunction with how autonomous vehicles will operate. Policy issues may need to be more vetted.”
As for the environment, there are many positives to consider, according to Pierce, Evans and Gregory Rodriguez, of counsel for Best Best & Krieger. HARMONY ON ARIZONA’S HIGHWAYS “Transportation harmony,” describes Rodriquez, is what we can expect to see in the manifestation of minimized congestion on roads, reduction in greenhouse gas emissions and increased productivity as a result of autonomous vehicle integration. “This productivity can come in many different ways,” Rodriguez explains. “More time working while commuting. Less time sitting in traffic. Less time commuting so that more time can be spent with family.” Harmony on the roadways will also be demonstrative in ease of traffic. “More autonomous vehicles will mean fewer people sitting in traffic, which will, in turn, eliminate emissions,” Evans says. “We know that we can expect to see an increase in capacity and safety as a result of autonomous vehicles,” Pierce adds. “For example, we should see speed on freeways begin to harmonize and idling time at intersections to be greatly reduced.” EXPLORING AUTONOMOUS VEHICLES AND INFRASTRUCTURE While much ground has been covered on the mechanics, safety and environmental impacts of autonomous vehicles during the current pilot and testing phase, going back to Evans’ earlier assertion concerning deeper refinement of policies, there continues to be much left to explore in regard to infrastructure. “It’s still too early to tell what type of infrastructure will be needed to support the safe operation of automated vehicles,” Rodriquez says. “What does make Arizona interesting is that it has wide roads with large lanes. This may provide an opportunity for managed lanes for automated vehicles that are separated from normal traffic at the outset.” Rodriguez says the result of this separation could very well provide an opportunity to avoid the difficulties that are expected in a “mixed-use” world, where you have traditional and automated vehicles operating at the same time on roadways. There are other elements of surrounding infrastructure to consider, such as parking areas and structures.
Lauren Evans
Ben Pierce
“There is a belief that there will not be a need for parking garages,” Evans says. “Thinking ahead, there is discussion on how current structures can be repurposed. For example, parking garages are usually sloped. If they are built flat, they can later be converted to condos.” Arizona will still have roads, bridges, highways and other infrastructure, as Pierce points out, but this infrastructure will no longer be static. “It will change with demand and conditions to optimize travel, such as modular lanes that dynamically reconfigure from 12-feet- to 10-feet-wide lanes,” he says, “and it will happen seamlessly and be communicated directly to your vehicle!” Other key factors to contemplate with the implementation of autonomous vehicles in tandem with Arizona’s existing infrastructure will be further refined with the involvement from ADOT and Valley Metro (among other similar agencies), a crucial piece to successful assimilation, according to Rodriguez. “As seen in the Phoenix area and across the country, billions of dollars are being invested in our public transportation systems through modernization and extensions,” Rodriguez says. “Hopefully, we can make sure automated vehicles work in conjunction with public transportation projects to help people get to transit through ‘First/Last Mile’ projects, rather than on-demand-mobility and automated vehicles competing with public transportation options.” LAW OF THE LAND OF AUTONOMOUS VEHICLES As key topics of safety, environment and infrastructure circulate in respect to driverless cars, so do legal ramifications.
Greg Rodriguez
“Automated vehicles cross legal borders and will require a rethinking of existing laws,” Rodriguez says. “For example, recently watching a YouTube video depicting someone intoxicated and riding on top of a fully automated car at a low speed calls into question whether that person can be charged with a DUI since they were technically not operating the vehicle at the time of being stopped and were not even in the driver’s seat for that matter.” This also brings to mind the safety of pedestrians and cyclists. Take, for example, the “Complete Streets” initiative, designed to not only improve accessibility for pedestrians, cyclists and other alternative forms of transportation, but also increases livability, comfort and convenience of Arizona’s roadways. It has the potential to increase city investment by providing a “low relative cost per improved mile.” “The street accommodates more than simply cars,” Evans says. “One of the things we want to make sure of, “is that Complete Streets will take into consideration the relationship our streets will have with autonomous vehicles.” “Our laws were drafted at a time when drivers were contemplated,” Rodriguez adds. “We will need to rewrite our vehicle codes to accommodate automated vehicles and the new legal issues that technology brings with it, including privacy and cybersecurity concerns. We are working with clients to evaluate whether reviewing and revising existing codes is the right approach, or whether new ‘innovation’ codes should be prepared to avoid legal inconsistencies.” Experts agree that integrating autonomous vehicles will be a process of patience on part of everyone – from passenger to pedestrian to policymaker. AB | November - December 2017 105
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ARIZONA FORWARD 2017
AWARDS Arizona Forward honors projects that protect natural resources and build in harmony with the environment By AZ BUSINESS
T
he new Liberty Wildlife campus earned the President’s Award at Arizona Forward’s Environmental Excellence Awards presented by SRP. Jurists also named the David and Gladys Wright House Foundation the first-ever recipient of the Diane Brossart Legacy Award, recognizing the 26-year tenure of Arizona Forward’s outgoing president and CEO. The new award was presented to a landmark project that spans multiple award categories and transcends beyond the State of Arizona.
FIRST EVER: The David and Gladys Wright House Foundation was the first-ever recipient of the Diane Brossart Legacy Award.
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“These projects represent what’s best about Arizona,” Brossart said. “Leaders in communities of all sizes are thinking far into the future and crafting a legacy that will make Arizona environmentally and economically sustainable in the years to come.” Liberty Wildlife was recognized for transforming a sand and gravel pit along an industrialized section of the Rio Salado habitat into a LEED Platinum-certified community gathering space. For more than 30 years, Liberty Wildlife has nurtured the nature of Arizona by providing wildlife rehabilitation, environmental education and conservation services. Designed by WEDDLE GILMORE black rock studio, the new campus was lauded for its energy efficiency and conservation features that have resulted in a 63 percent reduction in potable water needs. With this year being the 150th anniversary of Frank Lloyd Wright’s birth, it is a fitting tribute that the Wright House earned a legacy award as one of the state’s most iconic structures. The home was threatened with demolition by local developers in 2012, galvanizing a collaborative effort to preserve one of Wright’s last masterpieces. The home was gifted back to the institution from where it was born — The School of Architecture at Taliesin, which will take over planning for the preservation of the house and citrus groves. The school will realize Wright’s vision for the house as a place of community, celebration, inspiration and education. Among the other special awards presented were the Governor’s Award for Arizona’s Future; Northern Arizona University Environmental Education & Communication Award; Vitalyst Health Foundation Award for Healthy Communities; and SRP Award for Environmental Stewardship. Other award categories include Buildings and Structures, Energy and Technology Innovation, Site Development and Art in Public Places. Arizona Forward and SRP presented 14 first-place Crescordia Awards and 26 Awards of Merit. Projects from Maricopa, Pima and Yavapai counties earned firstplace Crescordias, a Greek term that means, “To Grow in Harmony.” Among
cities and towns to take top honors were Avondale, Buckeye, Mesa, Phoenix, Prescott, Tempe and Tucson. In addition to the David and Gladys Wright House Foundation and Liberty Wildlife, Crescordia winners included: • Colorado River Conservation Agreement (City of Phoenix Water Services Department) — Governor’s Award for Arizona’s Future
Desert Botanical Garden
• Desert Botanical Garden Horticulture Center Phase 1 (coLab Studio, LLC) — Buildings & Structures (Civic) • Desoto Central Market (Motley Design Group LLC) — Buildings & Structures (Historic Preservation) • Pueblo Viejo Fields and Food Hub (City of Phoenix) — Vitalyst Health Foundation Award for Healthy Communities (Sustainable Communities)
Liberty Wildlife
• City of Phoenix Greenhouse Gas (GHG) Emissions Reduction Program (City of Phoenix) — Vitalyst Health Foundation Award for Healthy Communities (Public Policy/Plans) • Jones Studio Office (Jones Studio) — Vitalyst Health Foundation Award for Healthy Communities (Sustainable Workplaces)
Prescott College Housing
• Underwood Family Sonoran Landscape Laboratory (University of Arizona College of Architecture, Planning & Landscape Architecture) — Site Development (Public Sector) • Prescott College Housing (Colwell Shelor Landscape Architecture) — Site Development (Private Sector) • Desert Hills Trailhead (J2 Engineering and Environmental Design, LLC) — Site Development (Parks and Trails) • Recyclery (i.d.e.a. Museum) — Northern Arizona University Environmental Education & Communication (Public and Private Sectors)
Jones Studio Office
Desoto Central Market
• Downtown Tucson 2050 Plan (University of Arizona College of Architecture, Planning & Landscape Architecture) — Northern Arizona University Environmental Education & Communication (Educators, Students and Nonprofit Organizations) • Cox Communications Turning Waste Into Growth in Arizona (Cox Enterprises) — SRP Award for Environmental Stewardship AB | November - December 2017 109
ARIZONA FORWARD 2017
Climate
control
Arizona Forward survey shows Arizonans are very concerned about climate change
By ERIN THORBURN
A
rizona Forward, in cooperation with WestGroup Research, conducted an environmental issues and climate change survey in April and June 2017. The results from the surveys included feedback from approximately 1,000 Arizona residents on issues ranging from water availability and overall environmental concerns to climate change. Of the survey participants, 27 percent said they were “very concerned” in regard to climate change in Arizona. While this may not appear to be overly disconcerting, when coupled with 66 percent of the survey recipients’ expressing at least “concern,” climate change is undoubtedly a conversation the state is ready to further discuss and examine. “Although it has been the topic of discussion for years, climate change has not been addressed head-on historically,” says Debra Duerr of Godec Randall & Associates, who is co-chair of Arizona Forward’s Natural Resource Committee. There are several reasons for this, according to local experts. “Unfortunately,” says Eric Marcus, chair of Arizona Forward’s Natural Resources
Issues, “the public discourse on climate change has been polarizing and politicized. It is so important for us to focus on the data and the evidence and make decisions based on facts, not unfounded posturing. This speaks to the opportunity our government, community and business leaders have to lead and offer evidencebased solutions and guidance.” SURVEY SAYS! Why, then, after years of circling around public and political sensitivity, is Arizona Forward inviting further discussion on climate change now? The answer has much to do with current events. With increased droughts and a shortage of water supply from the Colorado River, combined with rampant forest fires not only in Arizona but nationwide, there is a heightened awareness of how these types of phenomena are linked to climate change. “We felt it was time to find out if people connect issues such as water shortages, fires and hurricanes with climate issues,” says Duerr, “and how those things specifically affect Arizona.”
The collaborative efforts of Arizona Forward and WestGroup Research determined climate change is a topic of concern among Arizonans, but what environmental issues ranked the highest among survey participants? The following issues ranked “very/ somewhat concerned” among survey takers:
34%
Global warming, increased heat (longer and/or hotter summers)
16% 9%
Climate change is a fact and it’s getting worse
Lack of rain and/or water
Additional areas of concern were air quality/pollution, population growth, political ambivalence, funding cuts and odd weather fluctuations.
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Debra Duerr
Eric Marcus
According to Marcus, the survey demonstrated that 85 percent of Arizonans agree that climate change is real and 58 percent believe that it’s mostly caused by humans; a sentiment for which Marcus (and other experts) find troublesome. “It’s concerning to me that only 14 percent of respondents think that the state of Arizona is doing a good job addressing this issue,” Marcus says. “While Arizonans see the local impacts of climate change with their own eyes, they do not always make the connection.” CONNECTING THE DOTS What, then, can Arizona do to help connect the dots for its residents and increase awareness and understanding of climate change? “Choosing to address the issues of climate change through public policy changes will position Arizona to positively and proactively deal with pollution, water availability, food, wildfires, land use and health issues,” Marcus says. “We can still face these issues and apply evidence-based approaches.” “What we would like to do as part of the Natural Resources Committee,” Duerr adds, “is to learn more from people in water agencies, as well as hear from agriculture experts and federal land managers as to what ordinary businesses and individuals can do together to help find solutions.”
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