AZRE magazine May/June 2012

MAY-JUNE 2012

TOWER POWER

of

Will Hensel Phelps' solar power project reach for the sky in western Arizona?

INSIDE

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CHASE TOWER, PHOENIX: 483 ft.

EMPIRE STATE BUILDING: 1,454 ft.

ENVIROMISSION SOLAR TOWER: 2,800 ft.

Sophisticated Senior Living p. 6 Kitchell: Innovative Healthcare Builder p. 16 Valley Partnership Celebrates 25 Years p. 41

4/27/12 5:38 PM

T E A M W O R K Success depends on p u l l i n g t o g e t h e r.

At Sundt, our team goes the extra mile, working with you to make your project a success.

We combine innovation with hands-on construction experience and management expertise to ensure a winning project every time.

Contact: Jeff Fairman (480) 293-3000 2620 S. 55th Street Tempe, Arizona 85282 www.sundt.com

Arizona Contractor License Nos.: ROC068012-A; ROC068013-B01

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MAGAZINE.COM Time flies when you're having fun

A

s I celebrate my second year as Editor of AZRE magazine in June, I ask myself … “Where did the time go?”

It seems as if it was just yesterday that I was trying to learn all I could about vacancy rates, foreign trade zones, REITs, BIM and CMARs … and then write about it.

After almost two years of attending at least 50 commercial real estaterelated conferences, financial outlooks, breakfasts, lunches, discussions, you name it … I can honestly say I feel right at home among the many knowledgable professionals in attendance.

I guess you can teach an old dog new tricks.

Speaking of anniversaries, this issue features coverage of a well-respected advocacy organization (Valley Partnership) and a well-known general contractor (Hensel Phelps), which are both celebrating notable milestones. » Valley Partnership, which proudly calls itself “The Valley of the Sun’s Premier Advocacy Group for Responsible Development,” is celebrating its Silver Anniversary — 25 years. Our coverage includes a roundtable discussion with six past chairmen and a Q&A with the new chairman. » Hensel Phelps, a Colorado-based GC with major projects in Arizona, is celebrating its 75th anniversary (more than 30 years in our state). HP is wrapping up work on Stage I of the PHX Sky Train at Sky Harbor International Airport. It also has been selected to build a proposed 2,800-foot Solar Tower power station in La Paz County for EnviroMission of Australia.

As for my two-year anniversary celebration … I think I’ll just read up some more on cap rates, GPLETs, permitting regulations …

President & CEO Michael Atkinson Publisher Cheryl Green Vice President of Operations Audrey Webb AZRE: ARIZONA COMMERCIAL REAL ESTATE EDITORIAL Managing Editor Michael Gossie Editor Peter Madrid Associate Editor Kristine Cannon Interns Stephanie Gonzalez | Michelle Lauer | Kevin Ngai Maria Thompson ART Senior Graphic Designer Christin Gangi Senior Graphic Designer Mike Mertes Contributing Photographer Cory Bergquist Intern Mohammed T. Munir DIGITAL MEDIA Web Developer Eric Shepperd Web & Graphic Designer Melissa Gerke Interns Samantha Belli | Josh Estes | Lilia Ortiz Shaima Shahin | Julia Swem MARKETING/EVENTS Manager Whitney Fletcher Interns Diane Luna | Jennifer Hillman SALES Account Manager Steve Koslowski OFFICE Special Projects Manager Sara Fregapane Executive Assistant Kathy Mutschler Database Solutions Manager Cindy Johnson ARIZONA BUSINESS MAGAZINE Senior Account Manager David Harken Account Managers Michelle McBay | Shannon Spigelman RANKING ARIZONA Vice President / Sales & Marketing Lenore Grobstein EXPERIENCE ARIZONA | PLAY BALL Account Manager Scott Firle SCOTTSDALE LIVING Account Manager Anita Weldon AZ BIG MEDIA EXPOS HOME & LIFE SUPER EXPO WOMEN’S SUPER EXPO SCOTTSDALE SUPER EXPO Exhibit Directors Kerri Blumsack | Sheri King | Tina Robinson HOME & DESIGN IDEA CENTER Showroom Manager Joanne Stanley Account Manager Marianne Avila Event Coordinator Sara Fregapane

Editor (602) 424-8844 peter.madrid@azbigmedia.com

AZRE: Arizona Commercial Real Estate is published bi-monthly by AZ BIG Media, 3101 N. Central Ave., Suite 1070, Phoenix, Arizona 85012, (602) 277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $3.95.

Bulk rates available. ©2012 by AZ BIG Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without permission in writing from AZ BIG Media.

2 | May-June 2012

3101 North Central Avenue, Suite 1070 Phoenix, Arizona 85012 (602) 277-6045 · www.azBIGmedia.com

TABLE OF CONTENTS May-June 2012

Hensel Phelps is general contractor for a proposed 2,800-foot Solar Tower to be built in La Paz County in western Arizona starting in 2013. Hensel Phelps is celebrating 75 years of innovative construction projects — including many in Arizona. (Renderings: EnviroMission)

TOWER OF POWER SPECIAL SECTION

FEATURES

2 4 6

Editor’s Letter

21 Brokerage

New to Market

22 Events

46 Chairmen's Roundtable

23 Newsmakers 24 After Hours 25 Hensel Phelps

62 25 Years of Leadership

Time fl ies when you're having fun

Projects in the pipeline

The top sales and leasing transactions in the books

Who, what & when

Development

Senior and assisted care facilities take on feel of a resort

14 Project News

TI’s keep LGE Design Build busy; work at Cub’s facility set to begin

16 Kitchell

People & promotions

JLL’s Dennis Desmond

Celebrating 75 years of building a better world

A leader in state-of-the-art healthcare construction

04 06

VALLEY PARTNERSHIP 25TH ANNIVERSARY Six past chairmen look back to the future

The faces and voices of those who helped guide Valley Partnership

68 Partner Profiles

VP members share thoughts on what makes organization important

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COMING NEXT ISSUE » Statewide real estate update » Women in commercial real estate » ABA: Arizona Builders’ Alliance

Access AZRE online with this QR code 3

NEW TO MARKET

OFFICE 1  HAYDEN FERRY LAKESIDE PHASE III Developer: Ryan Companies US, Inc. General Contractor: Ryan Companies US, Inc. Architect: DAVIS Broker: CBRE Location: NEC Mill, Ave., and Rio Salado Parkway, Tempe Size: 250,000 SF The final phase of Hayden Ferry Lakeside will be a 10-story, Class A office tower in Tempe. The building design will maintain the same nautical theme as its predecessors, Hayden Ferry Lakeside I and II. It will be the first high-rise to break ground in Downtown Tempe since 2007. Construction is expected to begin in 4Q 2012.

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MEDICAL 2 3 2  BANNER HEALTH VERRADO Developer: Banner Health General Contractor: McCarthy Building Companies Architect: SmithGroupJJR Location: NWC of I-10 and Verrado Way, Buckeye Size: 12,566 SF The $4.5M freestanding outpatient clinic is the first project of a master plan for an acute care campus on the Greenfield site in Buckeye.

Subcontractors include Midstate Mechanical, S&H Steel, Echo Canyon Electrical, Iron Tree Plumbing and Brothers Masonry. Expected completion is 3Q 2012.

3  IRONWOOD CANCER & RESEARCH CENTER General Contractor: TBD Architect: SmithGroupJJR Location: 3600 block of S. Rome St., Gilbert Size: 25,000 The $10M project is an expansion of Ironwood Cancer & Research Center’s clinical operations. The new facility will be patient-centered and will include multiple modalities, such as medical oncology, radiation oncology, surgical urology and clinical trials. The facility will have state-of-the-art patient areas, exam rooms, full-service chemotherapy suite, pharmacy and radiation therapy vaults. Expected completion is 4Q 2012.

PUBLIC 4

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4  ARIZONA STADIUM — NORTH END ZONE EXPANSION Developer/Owner: University of Arizona General Contractor: Mortenson Construction Architect: Heery International Location: 640 N. Vine Ave., Tucson Size: 189,000 SF The $56M project includes construction of the new north end zone facility at Arizona Stadium, which will provide upgraded premium seating and fan amenities. The work will also provide new facilities for the football program and provide new concourses cross-connecting access to the east and west seating section. Expected completion is 3Q 2013.

NEW TO MARKET

INDUSTRIAL 5  COLDWATER DEPOT LOGISTICS CENTER Developer: Trammell Crow Company General Contractor: TBD Architect: Butler Design Group Location: 1110 N. 127th Ave., Avondale Size: Phase 1 — 603,863 SF The $27M (Phase 1) industrial building will consist of state-of-the-art warehouse design with ample trailer parking and truck maneuverability. The 56-acre can accommodate up to 1MSF of cross-dock distribution warehouse space. Expected completion is 4Q 2012.

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MULTI-FAMILY 6  DOWNTOWN PHOENIX HOUSING PROJECT Developer: Concord Eastridge General Contractor: hardison/downey Architect: Ayers Saint Gross Location: Roosevelt St. to the north; McKinley St. to the south; Fourth St. to the east; Third St. to the west Size: 2.9-acre site comprising 2 parcels The $52M, 2-building, mixed-use project is the first private investing supporting Downtown Phoenix student housing. Plans call for 325 apartment units and 5,000 SF of retail space. Subcontractors include Spectrum Engineers, Dibble Engineering, PK Associates and SmithGroupJJR (landscape architect).

Expected completion is 3Q 2013.

EDUCATION 6

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7  ROOSEVELT CHILD NUTRITION WAREHOUSE & EDUCATION CENTER Developer: Roosevelt Elementary School District General Contractor: D.L. Withers Construction Architect: Orcutt|Winslow Location: NEC 10th St. and Baseline Rd., Phoenix Size: 27,000 SF The $4.6M project will include a hydroponic growing area for vegetables and spices, a Tilapia farm and outdoor fruit-bearing trees. The multipurpose facility is designed to not only serve as the hub for the district’s Child Nutrition Department but also serve as an instructional resource to enhance and support Wellness and Nutrition Education within the school district. Food preparation classes will be offered to RSD students as well. Subcontractors include CSI, MJ Schneider Plumbing, EF Charles, Thunderbird Masonry, Swisher AC, Western Underground, Gunsight and Schuff Steel. Expected completion is 2Q 2012.

RETAIL 8  TANGER OUTLET CENTER WESTGATE Developer: Tanger Outlets General Contractor: C70 Builders (Minneapolis) Architect: Adams & Associates (Mooresville, N.C.) Location: Loop 101 and Glendale Ave., Glendale Size: 368,043 GBA The $100M project will feature more than 80 brand-name retail outlets in an open-air mall setting. The building architecture will be based on a modern Southwestern theme of intersecting forms and clean lines.

Subcontractors include Markham Contracting, Speedie & Associates, Stormwater Plans, PTR Mechanical, Parsons Electric, Apel Steel and E&K of Phoenix. Expected completion is 4Q 2012.

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HEALTHCARE DEVELOPMENT

BY MICHELLE LAUER

Swanky Seniors

Sophisticated a ssisted l iving a nd s enior c are d evelopments

The indoor common area at Sagewood, 4555 E. Mayo Blvd., in Phoenix, includes high ceilings, fireplaces and the expansive use of natural lighting.

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a

A rendering of Orchard Pointe which broke ground in March in Surprise.

look more like resorts than the traditional ‘old folks home’ As America’s senior population swells to an unprecedented volume — 62 million seniors, almost double the number of seniors at the turn of the century — luxury senior care and assisted living development is on the rise in Arizona.

Thankfully, assisted living no longer means sending Mom where bingo is all she looks forward to. Many developers in the assisted living field are building contemporary, sophisticated senior care facilities to accommodate expensive tastes and active lifestyles.

These residencies are opulent and lavish, more like resorts than the gloomy, industrialized “old folks homes” of decades past.

When considering livability factors, such as decreased mobility or heightened sensitivity to cold, Arizona’s fl at terrain and temperate climate are a natural draw for seniors. In the past several years, senior housing has been the most active type of development in Scottsdale.

Anticipating the influx of a mammoth demographic, several senior care facilities are in the planning and developmental stages.

Orchard Pointe, a 104-unit assisted living apartment facility in Surprise, broke ground in March. Developed by Heritage Management Services and Telis Commercial Real Estate, Orchard Pointe will open in spring 2013.

Mark Huey, president of Telis Commercial Real Estate, says Orchard Pointe will “bring a Midwestern ethic of care and concern to the Valley, packaged in a high-luxury lifestyle.”

Mountain West Contracting is general contractor and RAR

Architects is the architect.

In Tucson, The Freshwater Group is building a new assisted living community called Hacienda at the River.

Hacienda at the River will provide remarkable taste and services, from greenhouses on site to serve organic foods in dining facilities to an all-pets-welcome policy.

Hacienda will also raise horses on site for equine therapy for residents with memory affl iction, dementia, and other animal therapy aids.

David Freshwater, president of the Freshwater Group, says the revolution in senior care is palpable.

“Our spas, workout rooms, and cafes look more like Starbucks and LA Fitness rather than the traditional old folks homes,” he says.

“They really, truly have changed in design to reflect the different clientele than who we’ve been serving the last 25 years.”

Hacienda at the River is still in the design phase. “It will be assisted living, Alzheimer’s or what we call ‘memory care,’ as well as skilled nursing and rehabilitation,” Freshwater says.

Maravilla Scottsdale, which was scheduled to open in May, will also cater to epicurean tastes. Boasting multiple landscaped courtyards, a cinema, Internet lounge, chip-and-putt golf course, spa, and multiple dining venues, Maravilla Scottsdale is indisputably of the new generation of assisted living.

The 120,000 SF facility offers 178 apartment-style living units and 39 villa-type living units, plus common areas such as the lodge, 7

HEALTHCARE DEVELOPMENT

“People have all kinds of choices in terms of size and location, and they really can customize what they would like. There’s a vibrancy embedded in the neighborhood and the greater community and that creates excitement and the opportunity to continue to be educated. We offer innovation, fitness and overall wellness.” — Sharon Harper, The Plaza Companies

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Vi at Silverstone in Scottsdale is a 2011 RED Award winner.

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HEALTHCARE DEVELOPMENT The indoor swimming pool at Sagewood in Phoenix is one of numerous amenities at the 878,559 SF community, built in 2010

by The Weitz Company.

fitness center, commercial kitchens, and an indoor swimming pool.

The Weitz Company is building Maravilla Scottsdale. It’s also the general contractor for Sagewood, a multi-phase retirement community comprised of 12 casitas, four villas and eight buildings housing independent living, assisted living and skilled nursing units in North Phoenix.

Sagewood offers diversity in the levels of care provided, often easing the transition from minimal to increased living assistance.

Future phase expansions are planned to complete this site’s development. Once completed, the community in its entirety will carry the promise of progressive living in an environment that emphasizes choice, flexibility and independence for its residents, says Kelly Billings of The Weitz Company.

Scottsdale’s The Colonnade, another resort-style assisted living facility, opened in 2004. Now, The Colonnade will break ground later this year on the second phase of construction, adding villa type housing units to its existing residencies.

The developer behind The Colonnade is Sun Health, an up-andcoming player in the healthcare industry.

“Our standard finishes are high end, including full GE appliance packages, wood line window covering, and ceramic tile flooring,” says Sharon Grambow, Sun Health’s senior living coordinator.

“Residents can select premium package upgrades, including quartz-

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10 | May-June 2012

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The common dining area at Vi at Silverstone. Summit Builders was the general contractor and DAVIS was the architect.

THE POWER OF

NOW

The Alter Group thinks the moment is now.

When corporations can access debt for 1%; when operating efficiencies and rental rates are driving relocation; when manufacturing and exports are picking up; when small businesses are hiring at a rate of 250,000 new jobs a month. This is the time for a developer with a 55-year track record and a balance sheet that hasn’t wavered over five recessions. The time for new Class A office at the intersection of opportunity and operational excellence. Like our new 1,000-acre Algodon Center in Phoenix, AZ, which brings premier corporate office space to the Loop 101.

Contact Kurt Rosene at 480.302.6630 or visit alterwestvalley.com.

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HEALTHCARE DEVELOPMENT

Sagewood is a prime example that senior and assisted living facilities no longer resemble the gloomy and drab 'old folks homes' built years ago. ite countertops and cherry cabinetry tile with diamond metal decorative inserts.”

Belmont Village Scottsdale, a three-story assisted living apartment building, contains of 136 units — 111 independent living apartments and 25 dementia care units — at the 100,000 SF facility. It sits on a 4.17-acre site with a courtyard pool and walking path.

Houston-based Belmont Village AP has 20 assisted living facilities in seven states, and opened its Scottsdale location in February.

Th is project cost more than $30M, says Belmont CEO Patricia Will.

Located southeast of 100th St. and Frank Lloyd Wright Blvd., the community was built by W.E. O’Neil Construction.

12 | May-June 2012

Vi at Silverstone also opened in 2010 on 32 acres and offers 270 independent-living units to Northeast Valley seniors. Developed

by The Plaza Companies, built by Summit Builders and designed by DAVIS, the $195M project is all about individual preferences.

More importantly, says Sharon Harper of The Plaza Companies, it offers seniors an abundance of choices.

“People have all kinds of choices in terms of size and location, and they really can customize what they would like,” Harper says. “There’s a vibrancy embedded in the neighborhood and the greater community and that creates excitement and the opportunity to continue to be educated. We offer innovation, fitness and overall wellness.”

AZCREW Joins the State Bar of Arizona’s

JUNE LUNCHEON Friday, June 22nd

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BUSINESS LESSONS FROM THE LEDGE State Bar of Arizona’s 2012 Convention keynote guest speaker Alison Levine is no stranger to risk taking. She has survived sub-zero temperatures, hurricane-force winds, sudden avalanches, and a career on Wall Street.

In January 2008, she made history as the first American to complete a 600-mile traverse from west Antarctica to the South Pole following the route of legendary explorer Reinhold Messner.

Her professional career has encompassed health care, technology and finance. After earning her MBA from Duke University she moved to New York to work for investment banking firm Goldmans Sachs. In 2003, she left Wall Street to serve as Deputy Finance Director for Arnold Schwarzenegger in his successful bid to become Governor of California.

Levine currently service as an adjunct professor at the United States Military Academy at West Point in the Department of Behavioral Science & Leadership. She also has her own consulting firm, Daredevil Strategies, which specializes in organizational effectiveness, leadership development and team dynamics.

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CONSTRUCTION: PROJECT NEWS

LGE Design Build's 3,643 SF office tenant improvement project for Child & Family Support Services in Phoenix.

 LGE BEGINS WORK ON QUARTET OF TI PROJECTS

 MCCARTHY BUILDING CHANDLER’S 30TH ELEMENTARY SCHOOL

LGE Design Build has begun work on four tenant improvement projects, including a renovation of the popular Valley eatery Lolo’s Chicken & Waffles. LGE’s projects include: construction on a 35,200 SF office TI for Integrated Device Technology in Tempe; construction on a 23,643 SF office TI for Child & Family Support Services in Phoenix; a 17,607 SF major manufacturing expansion for Galco International in Phoenix; and a 4,200 SF restaurant renovation for Lolo’s Chicken & Waffles in Phoenix.

McCarthy Building Companies is in the process of completing the Chandler Unified School District’s 30th elementary school, Carlson Elementary School, in southeast Chandler. The $12.4M, K-6 school will have room for 950 students. The 80,000 SF building will include a gym/multipurpose room, media center, classrooms and office space.

HDA Architects Inc. is the architect and subcontractors include Midstate Mechanical, Suntec Concrete Inc. and Hawkeye Electric.

Two other projects of note: McCarthy recently completed a new multipurpose room and kitchen facilities at the Arcadia Neighborhood Learning Center that is undergoing a complete remodel. When completed next fall, the $14.8M project will include a 62,000 SF, 2-story building. McCarthy and DLR Group are combining their efforts on the West-MEC Phase II maintenance building. The $3M, 18,900 SF project is the addition of a pre-engineered building at the school in Glendale.

 HARDISON/DOWNEY DONATES SERVICES TO GALLERY@CITY HALL hardison/downey construction inc. played a significant role in building out the new Gallery@City Hall, an art gallery that features rotating exhibitions at Phoenix City Hall. As a nearly pro-bono project, hardison/downey donated its services to ensure the space was ready for its inaugural exhibit, which celebrates the cultural legacy that Phoenix residents began building nearly a century ago. The space features rotating exhibitions from the city’s historic and contemporary art collection, and is free and open to the public from 10 a.m. to 2 p.m. Monday through Friday. hardison/downey is one of approximately 40 businesses and residents that contributed to the privately funded effort.

 WORK BEGINS IN EARNEST AT CUBS NEW SPRING FACILITY Riverview Golf Course closed its doors in March as work began for the Chicago Cubs new spring training complex in Mesa. Initial work will include the salvaging and relocation of about 300 trees.

Riverview Park closed on April 2, and the softball fields are scheduled to close June 28. Once that is done, major construction work at the $99M will commence. Hunt Construction is the general contractor; Populous is the architect.

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 DPR PROJECTS INCLUDE WORK WITH BANNER, EBAY DPR Construction has been awarded the Banner Boswell Chiller Replacement project in Sun City and the eBay Quicksilver project in S. Jordan, Utah. DPR is working with Affi liated Engineers on the $1.2M installation of a new, 750-ton chiller and 750-ton heat exchanger, new plumbing and new electrical service for the chiller and support equipment at Banner Boswell. Expected completion is 2Q 2012. DPR is working with Winter Street Architects/AHA Consulting Services on the high-density data center that includes a 130,000 SF shell and 10,000 SF of whitespace built out in the first phase. Expected completion is 2Q 2013.

 KITCHELL BREAKS GROUND AT PREMIUM OUTLET MALL Kitchell broke ground as general contractor of the $70M, 360,000

CONSTRUCTION SF Phoenix Premium Outlet adjacent to the Wild Horse Pass Hotel and Casino on the Gila River Indian Community. The single-level village style setting will feature 90 store fronts in 9 buildings. It will include outdoor pedestrian courtyards, but there will also be sufficient coverage for all-weather shopping. The project is expected to create more than 300 construction jobs over the next year. Expected completion is 2Q 2013. Architects Orange is architect of the project.

 AIID MOVES INTO NEW FOUNTAIN HILLS FACILITY The American Institute of Interior Design recently relocated from an outdated space it occupied for the past 23 years and is now in a new facility in Fountain Hills. The $1M (suite value and tenant improvement) 4,400 SF project was developed by GMK Building and Development. General contractor was George Kasnoff and architect was Colin Edward Slais. The school design merges classical with contemporary styling in an open floor plan that includes cement flooring, a reflected ceiling plan sculpted at four heights and 37 panorama view windows.

bed luxury, student cottage project near 22nd St. and Park Ave. in Tucson. It will serve University of Arizona students and is expected to open in time for the 2012 fall semester. ... Zaremba Residential of Ohio plans to develop a 420-unit luxury apartment complex near Indian School Rd. and Goldwater Blvd. in Scottsdale. Plans call for a 5-story complex. ... JLB Partners of Dallas purchased ±9.7 acres in Scottsdale and plans to build a 369-unit luxury apartment community of the former Portales Place property. Sale price was $13.87M. ...

Alliance Residential Co. plans to build a 259-unit apartment community behind the Scottsdale Waterfront mixed-use project at the SWC of Scottsdale and Camelback roads. Broadstone Scottsdale Waterfront LLC paid $13.5M for the 3.35-acre parcel. ... A Charleston, S.C. company plans to develop a 370-unit apartment complex within the Desert Ridge community in northeast Phoenix.

CONSTRUCTION: P&Z  TOWN OF BUCKEYE The Town of Buckeye is requiring new or increased development fees related to the Development User Fee Schedule. The new fee schedule is to be presented to the Town Council May 15. For more information, visit the Town Development Services website at buckeyeaz.gov or call (623) 349-6211.

 MARICOPA COUNTY

The AIID's recent relocation in Fountain Hills included $1M in tenant improvements.

 PHOENIX ARCHITECTURAL FIRM HELPS DESIGN MOB MUSEUM Phoenix architectural firm Westlake Reed Leskosky was the lead design team behind the $42M Mob Museum in Las Vegas. The 40,000 SF historic 1933 U.S. Post Office and Federal Courthouse includes 17,000 SF of exhibit galleries on three floors, including the restoration of a historic courtroom, famous as the site of the Kefauver Committee hearings that marked the exposure of organized crime and the beginnings of federal prosecution in the early 1950s.

 BILTMORE ON THE LAKE UNDERGOES $1M RENOVATION Biltmore on the Lake, 11050 N. Biltmore Dr. in Phoenix, underwent a $1M renovation with J&L Construction serving as the general contractor. Biltmore on the Lake is a 420-unit multi-family property developed by B.H. Properties.

 ON THE DRAWING BOARD Landmark Properties of Athens, Ga. and Chicago-based Harrison Street Real Estate Capital LLC plan to develop the Retreat, a 774-

Maricopa County is proposing a Text Amendment (CPA2011010) that will redefine a “Major” Comprehensive Plan Amendment by raising the acreage threshold from 100 acres or less to more than 640 acres. For more information, contact Robert H. Kuhfuss at (602) 506-3301. The proposed Text Amendment was tentatively scheduled for the April 11 Board of Supervisors hearing.

 CITY OF AVONDALE The City of Avondale is completing an updated version of its General Plan. The Avondale General Plan 2030 was to be presented to the City Council on April 2 for possible approval. The General Plan 2030 update is scheduled for a citywide vote for adoption on Aug. 28. For more information, visit the City website at ci.avondale.az.us.

 CITY OF PEORIA The City of Peoria secured a new long-term lease agreement with the Seattle Mariners and San Diego Padres, keeping the Peoria Sports Complex as the teams’ spring training site up to 2034. The Peoria Eighty Three Arrowhead Entertainment District, where the Peoria Sports Complex is located, may positively benefit from the lease renewal. For more information about the Entertainment District, visit p83az.com.

P&Z column compiled by Dave Coble and Karl Woodard, MEUP, with Coe & Van Loo Consultants Inc. cvlci.com

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COMPANY PROFILE: KITCHELL

A Lean, Mean Construction Machine Transformative technology revolutionizes hospital construction

Examples of Kitchell’s use of cutting edge Building Information Modeling (BIM) software include the Banner Heart Hospital cath lab wireframe (above) and Phoenix Children’s Hospital (right).

“Humanity is acquiring all the right technology for

W

ith apologies to the sage Buckminster Fuller, the technology that is being developed for construction is being done so for all the right reasons: to enhance quality, increase speed, decrease waste, save money and boost safety.

On the current, and extensive, renovation of Chandler Regional Medical Center, which features 180,000 SF of new construction anchored by a 5-story tower, Kitchell is harnessing the latest technologies, and refining new ones, that will continue to evolve as construction unfolds until the opening in spring 2014. The project began with evidence-based design of the re-envisioned hospital featuring a triangle-shaped bed tower and a complete reorientation of the entrance.

Some of the challenges facing the construction team include reorienting the main entrance, extensive infrastructure work, upgrading the central plant, doubling the emergency room and an intricate kitchen renovation — all while patients continue to receive uninterrupted care with no risk of infection. Fortunately, Kitchell has teamed with other professionals eager to utilize the latest technology to streamline the building process while enhancing quality and preserving safety. And it certainly helps that the entire team is committed to tearing down the traditional “wall” between the design and construction sides, which is a win-win-win (owner, designer, construction firm — not to mention the building’s inhabitants) for all.

An integrated team was established from the start that includes

16 | May-June 2012

owners, architects, engineers, facility users, subcontractors and suppliers. Here are some tactics the team is deploying to achieve success:

 Virtual model created three years out

From the beginning, Kitchell, architect Orcutt | Winslow, Van Borem and Frank, Paragon and LEA Engineers designed and coordinated the project utilizing the most up-to-date BIM software.

Integrating Archicad and REVIT into a federated model of the building (include an accompanying image) yielded a virtually constructed facility three-plus years in advance of the tower receiving its first patient.

 Continuous collaboration courtesy of the Human Factor

At the job site, a free-flowing workspace complete with design studios and interactive spaces facilitates innovation and consolidates the creation of intellectual property and management of construction.

All of the project’s principal players are empowered to make decisions and to commit resources on the spot, all in the same room, to keep momentum moving forward. Work studios are defined by activities to be tackled, not disciplines. This co-location “no silos” approach breaks down traditional barriers between engineers, designers and construction personnel while stimulating dialogue and innovation.

all the wrong reasons.” — R. Buckminster Fuller  Lean and streamlined

Each step of the building process is analyzed to promote continuous and reliable workflow throughout and identify ways to avert possible clogs in the project stream. As the project moves from design to construction, Kitchell is using the earlier planning and knowledge of technology to make the construction process as lean as possible.

Pull planning, bringing subcontractors into the scheduling process, has been critical.

Early BIM planning is setting the stage for prefabrication of interior corridors, systems and bathrooms. Th is is not your grandfather’s prefabrication — this is highly sophisticated off-site, controlled building of highly complex and technical components which, once built, are literally “plug and play.”

T he philosophy behind this strateg y is to maintain qualit y and increase speed of constr uction while decreasing waste.

 Full-scale (foam or wood) mock-ups

Kitchell will construct a full-scale mock-up of the prefabrication areas to demonstrate not only what the finished rooms will look like but also what it will feel like to physically experience the spaces.

Even the smallest details were designed in REVIT to enhance the authenticity of the final mock-up.

 In the field

Vela Systems enables real time data to be gathered and tasks assigned and transmitted right from where the work is happening via Kitchell’s mobile application on iPads. There is no distinction between in-the-office and in-the-field. RFIs, submittals, project specifications, drawings, etc. are available to everyone — including owners and subcontractors — for immediate, actionable information. Being able to identify and communicate potential issues saves time- and labor-intensive, costly rework caused by incomplete or old information.

 BIM kiosks — 24/7 access to information without a computer

Once the construction of the new patient tower is in full swing, several BIM kiosks will be activated so subcontractors will be able to pull up documents and the latest coordinated models throughout construction. These are all housed in a digital archive.

Decades ago, even just a few years ago, the type of technologies deployed to make design and construction a seamless, fl awless process were virtually unheard of. But without these advancements, the world of commercial design and construction would involve much more guesswork and risk. In today’s building world, the right technologies are being deployed for the right reasons.

17

COMPANY PROFILE: KITCHELL

Prescription for Success: Healthcare Projects Kitchell, winner of the 2012 RED Award as General Contractor of the Year, is one of the premier construction companies when it comes to building healthcare facilities. A look at some of Kitchell’s top healthcare projects in use or under construction:

1 4 2 3 1. BANNER DESERT MEDICAL CENTER ENDOVASCULAR/HYBRID OR Developer: Banner Health Architect: HKS, Inc. Location: 1400 S. Dobson Rd., Mesa Size: 3,442 Construction includes a new business center and office area for the cathlab, upgrading three cardiac catherization recovery units to fi ll PACU bays, and renovation of the CVICU waiting area to create a new bathroom, conference room and office. The Hybrid OR is equipped with new Siemens Artis Zeego Endovascular Imaging Equipment. Subcontractors include Comfort Systems, Parsons Electric, NKW, ISEC, Spectra Flooring, JMH, DH Pace and Barrett Homes. Expected completion is 2Q 2012.

2. PHOENIX CHILDREN’S HOSPITAL Developer: Phoenix Children’s Hospital Architect: HKS Inc. Location: 20th St. and Thomas, Phoenix Size: 750,000 SF The Phoenix Children’s Hospital’s new 11-story pediatric tower enables it to serve

18 | May-June 2012

5 its patients with 168 new beds, as well as high-quality outpatient care in a new clinics houses on site. PCH is Kitchell’s largest project in the healthcare market at a cost of $538M. It was completed four months ahead of schedule and $48M under budget.

Opened in October 2011.

3. CHANDLER REGIONAL MEDICAL CENTER PATIENT TOWER Developer: Dignity Health Architect: Orcutt | Winslow Location: 475 S. Dobson Rd., Chandler Size: 180,000 SF With the Chandler Regional Medical Center reaching a critical level of high occupancy that demands future growth, CRMC is proposing a $125M expansion of Tower C to increase the number of acute care beds, modernize 1980s era support areas, and resolve parking needs. Expected completion is 4Q 2014.

4. DIAMOND CHILDREN’S MEDICAL CENTER Developer: University of Arizona Architect: NTD Architecture Location: 1501 N. Campbell Ave., Tucson Size: 315,000 SF

Kitchell had previously completed a 5-year remodel and expansion at the UMC campus in Tucson. It included numerous updates to the existing space as well as more than 223,500 SF of new space.

Improvements totaling $124M included a 215,000 SF, 6-story bed tower vertical addition. Three floors of the new tower were built out in Phase I, and three were initially shell space before becoming southern Arizona’s first children’s hospital, which opened in September 2010.

5. PHOENIX CHILDREN’S SOUTHWEST VALLEY CENTER Developer: Ensemble/Devman Architect: HKS Inc. Location: Avondale Blvd. and McDowell Rd., Avondale Size: 35,344 SF Th is $8.5M project will complement children’s health services already in the community. The clinic will feature 25 patient rooms, two treatment rooms, X-ray, ultrasound, MRI, 6-bed triage, and on site lab services. Expected completion is 1Q 2013.

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COMPANY PROFILE: KITCHELL

Q&A: President Dan Pierce

Q

Technology is playing an important role in today’s construction market. What are some of the latest advancements you’re seeing utilized to make building better?

A: We’ve seen remarkable advances with respect to building information modeling (BIM) technologies. The capacity to share information efficiently has enhanced our ability to collaborate with owners and architects. Tablets, iPads, laptops and smartphones are commonplace — the line between design and construction has blurred. And I’ve been very impressed with the caliber of the young people who have chosen construction as a career.

Their aptitude in leveraging the various technologies are enhancing our capacity to service our customers.

Q

How has Kitchell developed such a strong presence in healthcare?

A: I think that we’ve managed to develop strong relationships with our customers over the years. For example, we have worked on the hospital campuses that are now part of Banner Health since 1962. Those types of relationships have helped us anticipate many of the challenges that face healthcare providers in our marketplace. We see ourselves as strategic partners.

Q

Are you seeing signs of promise in Arizona’s commercial construction industry?

A: Despite Arizona’s oversupply in most market sectors of the built environment and the fact that we will likely be lagging most areas of the country in terms of economic recovery, we are seeing more activity in 2012 with a number of our design partners.

Our development company is also seeing more activity. I see that as a very positive sign and I am optimistic.

Q

How has Kitchell managed to stay successful during the past five years?

A: Because of our diversity, we have been able to remain nimble and adaptive to the marketplace. Th is is what makes us unique. The size of our company — and the fact we’re employee-owned — is perfectly suited to be fluid and flexible, to be able to adjust workloads to exactly where we need to be at any given moment.

Dan Pierce has had a hand in the construction of numerous commercial projects throughout the Southwest, and has been with Kitchell for more than 30 years, having joined the company right out of college. As President of Kitchell Contractors, Pierce oversees divisions, including everything from renewable energy and healthcare to custom homes and medical technology planning.

Pierce has a bachelor’s degree in construction from Arizona State University. He served on the Accreditation Review Board and the Department Advisory Council when the construction management program was established at Northern Arizona University. An ASHECertified Healthcare Builder, he is on the Board of Barrow Neurological Foundation, has served on the Board of the Foundation for Blind Children and is involved in the American Society for Healthcare Engineering.

20 | May-June 2012

BROKERAGE SALES

PHX INDUSTRIAL Cassidy Turley BRE Commercial complet-

ed the sale of a ±15,570 SF warehouse at 15270 N. 83rd Place. NAKD Holdings, LLC purchased the property for $1.3M. Paul Boyle and Rick Danis with Cassidy Turley’s Capital Markets Group executed the sale on behalf of the seller, BOKF, N.A. Bill Bayless with CBRE represented the buyers.

PHX MULTI-FAMILY CBRE negotiated the sale of San Portella

Apartments, a 308-unit luxury community at 2155 S. 55th St., Tempe. CBRE’s Tyler Anderson, Sean Cunningham and Asher Gunter represented the seller, Apartments at Fountainhead LLC of Des Moines, Iowa, a joint venture between Principal Real Estate Investors and Mark-Taylor Inc., in negotiating the $45.1M sale.

Pathfinder Partners LLC of San Diego

bought the Academy Apartments, a 96unit property at 3626 N. Fifth Ave. Brian Smuckler and Jeff Seaman of CBRE represented the buyer and the seller, Janna Holdings LP of Santa Monica, Calif., in negotiating the $4.07M sale.

PHX OFFICE CBRE completed the $86M sale of Hayden

Ferry Lakeside II, a 12-story Class A multitenant office building at 60. E. Rio Salado Parkway in Tempe. CBRE’s Brad Anderson and Bryan Taute, along with Kevin Shannon, Todd Tydlaska and Ken White in the firm’s El Segundo, Calif. office, represented the undisclosed seller. Jim Fijan in CBRE’s Phoenix office represented the buyer, an affiliate of Parkway Properties, Inc. BPG Properties, Ltd. acquired Lincoln

Towne Centre, a 223,605 SF, Class A office complex in Scottsdale for $34.25M from Lincoln National Life Insurance Company.

The acquisition is the first that BPG has made on behalf of BPG Investment Partnership IX, L.P., its newly formed, valueadd real estate fund.

PHX RETAIL Westwood Financial Corp. sold Olive

Square, an 86,225 SF retail center in Glendale, to North American Realty Acquisition Corporation for $6.3M. Westwood Financial was represented by Jan Fincham and Patrick Dempsey of Lee & Associates.

PHX LAND Mike Schwab of Land Advisors Organiza-

tion the buyer and the seller in a 180.22acre, $3.063M transaction for property on the W/SWC of Reems Rd., and Peoria Ave., Litchfield Park, Ariz. The buyer was Virgin Farm V, LLC; the seller was Peoria 180 Development, LLC.

TUC OFFICE Walter Hoge purchased 17,331 SF at 205-

215 W. Giaconda Way from Giaconda Tucson, LLC for $1.015M. Tom Nieman and Bob Kaplan with PICOR represented the buyer; Mark Biery with Prudential Foothills Real Estate represented the seller.

TUC INDUSTRIAL 20th Street 691, LLC purchased the 31,962

SF building at 1440 S. Euclid from Champion Shuffle Board LTD. Patrick Welchert, Russ Hall and Rob Glaser with PICOR handled the deal.

3455 S. Palo Verde LLC bought a 20,552

SF building, 4725-4755 S. Coach Dr., from Forell LLC for $900,000. PICOR’s Rob Glaser represented the seller; Tim Healy and Bob Delaney, CBRE, represented the buyer.

LEASING

PHX LEASING MiTek Industries, Inc. leased 259,200 SF

at 7890 W. Lincoln St. in Phoenix. The 10-year deal was signed the beginning of February with a tentative move-in date of May. The build-to-suit manufacturing building broke ground in January on a 15acre parcel in the Tolleson industrial submarket. The structure will be the inaugural building for the planned 149-acre Tolleson Corporate Park, which will continue to be developed with industrial mixed-use structures. Payson MacWilliam and Don MacWilliam of Colliers International represented both the tenant and the landlord.

Sealy, Inc. leased 120,801 SF at the 5-Star

distribution center in Phoenix. The tenant will occupy a portion of the 251,668 SF industrial building at 125 S. 67th Ave. The lessee was represented by Dev Gupta of UGL Services, Inc. The landlord, F-Star 67th Avenue LLC, was represented by Anthony Lydon and Mark Hertzberg of Jones Lang LaSalle. JLL also handled the sale of the building for $1.8M. Cushman

& Wakefield negotiated a 114,000 SF industrial lease at Clarion Partners’ Central Arizona Distribution Center in Casa Grande, one of the largest lease commitments in years for Pinal County. Mid-States Services, a wholesale/ retail distributor, will relocate its regional operation.

Cushman & Wakefield’s Mark Detmer, Bo

Mills, Will Strong and Jackie Orcutt serve as exclusive leasing agents for the 581,038 SF property. Josh Wyss of Cassidy Turley BRE Commercial served as tenant broker in the long-term lease, which carries an aggregate value of nearly $2.6M. Newmark Grubb Knight Frank represent-

ed Mitel in a 10-year lease for 83,264 SF of office space at Riverview Point in Mesa for its U.S. Headquarters. Robert Stephens, Kurt Saulnier and Tricia Gumulka of the Industrial Group represented Mitel in conjunction with Steven Morgan of the Atlanta office.

CBRE negotiated a 25,297 SF lease at San

Tan Tech Center, 145 S. 79th St., Chandler. Innovations, Chandler’s biotechnology incubator site, expands to more than 63,000 total SF. Luke Walker, David Carder and Nick DiPaolo of CBRE represented the landlord, Texas-based Capital Commercial Investments Inc. in the 12-year deal. Tenant is the City of Chandler, which was represented by Mark Detmer and Bo Mills of Cushman & Wakefield.

TUC LEASING TPS Builders, LLC leased 12,664 SF at

2699 E. Valencia from Palice Investments 2699, LLC. Rob Glaser, Industrial Specialist with PICOR Commercial Real Estate Services, represented the landlord. Paul Hooker, also of PICOR, represented the tenant.

21

EVENTS & SEMINARS AMA

EDUCATION CONFERENCE AND TRADE SHOW MAY 9-10 PHOENIX CONVENTION CENTER TRIBUTE AWARDS MAY 10 PHOENIX CONVENTION CENTER

BOMA

REVERSE TRADE SHOW MAY 3 RENAISSANCE PHOENIX DOWNTOWN MONTHLY LUNCHEON MAY 16, JUNE 20 RENAISSANCE PHOENIX DOWNTOWN

CORENET GLOBAL PHOENIX RISING MAY 17, 11:30AM PHOENIX COUNTRY CLUB

ICSC

RECON 2012 MAY 20-23 LAS VEGAS CONVENTION CENTER

NAIOP

NIGHT AT THE FIGHTS JUNE 7 CAMELBACK INN

ULI

NATIONAL REAL ESTATE SUMMIT AT THE SPRING FORUM MAY 8 CHARLOTTE, N.C. RENTAL HOUSING IN THE NEW ECONOMY May 16 Scottsdale Hilton

VP

FRIDAY MORNING BREAKFAST MAY 18, JUNE 29, 7:30-9 A.M. PHOENIX COUNTRY CLUB

TRADE ORGANIZATIONS ABA

Arizona Builders’ Alliance Phx: 602-274-8222 Tuc: 520-881-7930 · azbuilders.org

ACA

Arizona Commerce Authority 602-771-1100 · azcommerce.com

ACA

Arizona Contractors Association 602-246-8627 · azca.com

ACT

Alliance of Construction Trades 520-624-3002 · actaz.net

AGC

Associated General Contractors of America 602-252-3926 · agc.org

AIA AMA

ARIZONA COMMERCE AUTHORITY AZREC ANNUAL MEETING MAY 3 TUCSON BOARD MEETING MAY 22, 10 A.M. PHOENIX

AZRE

PEOPLE TO KNOW NOMINATIONS ARE NOW OPEN FOR PEOPLE TO KNOW 2012-2013. GO TO AZREMAGAZINE.COM

Arizona Planning Association 602-866-7188 · azplanning.org

ASA

American Subcontractors Association of Arizona 602-274-8979 · asa-az.org

AAED AZCREW

Building Owners & Managers Association 602-200-3898 · bomaphoenix.org

DPP

Downtown Phoenix Partnership 602-254-8696 · coppersquare.com

EVP

East Valley Partnership 480-834-8335 · evp-az.org

GPEC

Greater Phoenix Economic Council 602-256-7700 · gpec.org

ICSC

International Council of Shopping Centers 646-728-3800 · icsc.org

IFMA

International Facility Management Association ifmaphoenix.org

IREM

Institute Of Real Estate Management 602-253-1852 · iremphx.org

LAI

Lambda Alpha International lai-phx.org

MPA

Metropolitan Pima Alliance 520-878-8811 · mpaaz.org

SMPS TREO ULI

National Association of Industrial & Office Properties 602-230-1645 · naiop-az.org Phoenix Community Alliance 602-254-7477 · phoenixcommunityalliance.com Society for Marketing Professional Services smpsarizona.org Tucson Regional Economic Opportunity 866-600-0331 · treoaz.org Urban Land Institute 480-449-7920 · arizona.uli.org

VF

Valley Forward 602-240-2408 · valleyforward.org

VP

Valley Partnership 602-266-7844 · valleypartnership.org

WEST 22 | May-June 2012

Arizona Commercial Real Estate Women arizonacrew.org

CoreNet Global Desert Mountain 623-581-3597 · corenetdesertmtn.org

PCA

R E A L E S TAT E

Arizona Association for Economic Development 602-240-2233 · aaed.com

CORE

NAIOP

I N COM M E RCIAL

Arizona Multi-Housing Association 602-224-0135 · azama.org

APA

BOMA

OTHER

American Institute of Architects 602-252-4200 · aia-arizona.org

WESTMARC 623-435-0431 · westmarc.org

NEWSMAKERS COMPILED BY STEPHANIE GONZALEZ

has been named the new leader for its Tucson office and the Southern Arizona market. Isaacson has nearly 15 years of commercial real estate experience in the Tucson market, specializing in the leasing and sale of office, medical and R&D buildings.

Canada

O'Connell

Poulin

» McCarthy Building Companies has appointed Scott Canada to the merit review committee for the SunShot Concentrating Solar Power R&D funding opportunity solicitation in Phoenix. The initiative is an aggressive research and development plan led by the U.S. Department of Energy and aimed at developing solar technologies to meet a levelized cost of energy target of 6 cents/kWh without subsidy by 2020. McCarthy also promoted two associates to project directors. They are Lee O’Connell in Albuquerque and Steve Poulin in Tempe.

Morrow

» Voit Real Estate Services appointed Donald Morrow as managing director of the firm’s Phoenix operations. Morrow will oversee all aspects of Voit’s operations in the Phoenix market, including brokerage, asset and property management. Prior to joining Voit, Morrow served as a partner at Biltmore Holdings.

» Sundt Construction chairman and former CEO J. Doug Pruitt was named among the recipients of the prestigious 2012 Golden Beaver Award. Pruitt received the Management Award from The Beavers, a heavy civil engineering construction association. He retired as CEO of Sundt in September 2011, but remains involved with the company serving as chairman. Sundt also added Tom Auay-Fuay to serve as project manager in the Southwest. He will concentrate his efforts on preconstruction activities relating to mining and industrial construction projects. » Commercial Properties Inc. (CPI) hired John B. Daley, who brings 30 years of commercial, retail, office and industrial real estate experience. Daley has coordinated some of the largest commercial real estate deals in Arizona. CPI also was selected by CoStar Group as recipient of a CoStar Power Broker Award. In addition, four brokers won individual awards as Top Industrial Leasing Brokers.

They include Leroy Breinholt, Darin Edwards, Cal Johnson and Eric Jones. » The Arizona Builders’ Alliance was honored by the Associated General Contractors of America as a 2011 Community Award recipient, one of 13 organizations recognized as the construction industry’s best charitable work. The ABA Community Board supported four projects in 2011. » Lincoln Property Company hired Tina Byrd as property manager in the Desert West Region office in Phoenix. Byrd is responsible for managing the newly renamed and remodeled Camelback Square. »

CBRE announced that Ike Isaacson

Byrd

» Erin Harper joined Alliance Project Advisors as senior project manager in Phoenix. Prior to joining Alliance Project Advisors, Harper worked with CBRE Global Corporate Services on site at American Express’ TRS Division since 1996. She has more than 20 years of project management experience.

Gaylord

Hawks

Bladine

» Jennings, Haug & Cunningham expanded its legal services with the addition of a prominent Arizona environmental law practice group. The three attorneys include senior partner Karen Gaylord, Ronnie Hawks and Janis Bladine. They have been representing clients in environmental law. » Scottsdale-based MC Companies has announced the new joint venture with Phoenix-based Clark-Wayland Construction. This venture will focus mainly on development and construction of new multi-family projects in Phoenix and Tucson. The combined company has more than 75 years construction experience and has built more than 25,000 units in Arizona. » Colliers International announced that senior associate Danny Plapp joined the office properties team of Charles Miscio, Greg McMillian and Niki Ward. Plapp will focus on procuring new tenants for property owners, while working with the specific needs of users. He joins Colliers Plapp from LevRose Commercial Real Estate in Scottsdale. Plapp has more than four years of commercial real estate experience, specializing in office properties. » Carlyle Development Group announced a leasing and management team for the newly acquired Metrocenter in Phoenix. This team includes the addition of Brent Meszaros as general manager, real estate veteran Anita Blackford as senior VP of leasing, and locally based Phoenix Commercial Advisors as Metrocenter’s exclusive retail broker representative. » Gensler added three new associates to its Phoenix staff.

They include Jennifer Gozzi, interior designer; Lori Stenguist Johnson, project coordinator; and Stephanie Gomez, marketing manager.

23

AFTER HOURS

Knowing more about the people we work with is the fun side of the business. It helps start conversations and strengthens business relationships. To nominate a colleague, request an After Hours form from Peter Madrid, peter.madrid@azbigmedia.com.

PHOTOGRAPHY CORY BERGQUIST

Dennis Desmond

Managing director, Jones Lang Lasalle Born in Chicago Attended Loyola Marymount University (Los Angeles), where he received a BS in personal and industrial relations Married to wife, Kathleen, for 38 years Has been with JLL for 2 years; has been in commercial real estate for more than 30 years

Responsibilities

Desmond leads the investment sales practice within the Capital Markets Group of Jones Lang LaSalle’s Phoenix office, specializing in office investment sales for institutional clients and private owners of real estate.

Favorites

SPORTS TEAM: Arizona Diamondbacks, Chicago Cubs and Chicago White Sox ACTIVITIES: Baseball games and time with my grand kids.

DESTINATIONS: I’m Irish, so Ireland tops my list. My favorite spots are Kinsale and Dingle.

Both are small, picturesque coastal seaport cities.

What did you think you’d be when you were growing up?:

A major league center fielder.

My goal was to play in Yankee Stadium. I fell a little short — played minor league ball for two years for the Coos Bay/ North Bend A’s.

What accomplishment are you especially proud of?:

Our children (son, Ryan, 34; daughter, Megan, 32). They are wonderful people.

What would people be surprised to know about you?

24 | May-June 2012

I'm a two-time cancer survivor of Non-Hodgkin’s lymphoma. I was diagnosed 15 years ago and told there was no cure. My advice to others: “Enjoy every day.”

Desmond also served 8 years as a special agent in the U.S. Secret Service. In between protection assignments, he investigated forged U.S. Savings Bonds and worked in Washington, D.C., during Watergate.

28

30 75 Years of Performance

34 2012 SPECIAL SECTION: Solar Tower to rise from the desert 28 All aboard! PHX Sky Train on track 30 A green schoolhouse that rocks 34 Projects deďŹ ne Western District 36 Q&A with VP/District Manager 38

36

Retool your business‌

azBIGmedia.com

Hensel Phelps Construction Co., celebrating their 75th anniversary, is proud to be a construction partner with Arizona communities

University of Arizona Chemistry Building, Tucson

Arizona Cancer Center, Phoenix

Sky Train - Sky Harbor International Airport, Phoenix

University of Arizona Law Commons, Tucson

University of Arizona McClelland Park, Tucson

Yuma Municipal Government Complex, Yuma

City North Phoenix Phase I, Phoenix

Mariposa Land Port of Entry, Nogales

PHOENIX OFFICE

TUCSON OFFICE

444 North 44th Street Phoenix, AZ 85008 480.383.8480

2701 East Speedway Boulevard Tucson, AZ 85716 520.624.2216

www.henselphelps.com

BY PETER MADRID

‘Look, Up in the

F

or 75 years, Hensel Phelps Construction Co. has made a for this project, Watson adds, is not the uniqueness of the components name for itself around the world with innovative building or design, but the logistics of corralling the various stakeholders.

“The exceptional development team assembled by EnviroMission projects. However, the best is yet to come.

In 2013, the Western District Hensel Phelps office in draws experts from all over the world that in itself requires a high level Phoenix is to begin construction on a proposed $740M, of collaboration that is not always apparent on many projects,” Watson says. “On one hand, efficiencies and cost savings are achieved through 2,800-foot Solar Tower in La Paz County in western Arizona.

“The project is fantastic on several fronts,” says Mark Watson, chief commoditizing the relatively few but high quantity materials. On the estimator for the Phoenix office, “from its size to the simplicity behind other hand, given the size and location of the project, consideration is its great power generation capabilities and we are extremely excited to given to the transport of men and materials to the point of installabe part of this renewable energy solution that will change the way the tion. Whether it is getting the resources to the project site or 2,800 feet in the air, logistical challenges exist due to the project scale.” world looks at alternate power generation.”

A company and its capabilities are defined by the people who work To appreciate the height of the Solar Tower, which is being built for there. And it is those people within the orgaEnviroMission of Australia, consider that nization that bring the necessary experience the tallest building in Arizona is the Chase for any project.

Tower in Downtown Phoenix at 483 feet.

“Hensel Phelps has the best profesNow picture six Chase Towers stacked atop sional builders in the industry,” Watson each other and you have the Solar Tower — says proudly. “They are a diverse team of which also has a diameter of 450 feet. determined, can do, problem solvers with To appreciate its simplicity, here’s how a culture that continuously challenges its it works. A 4-square-mile greenhouse will people to think outside the box and develheat air and direct it up through the conop creative solutions for the most chalcrete chimney. The hot air will turn turbines lenging problems.” to produce 200 MW of electricity, enough to Hensel Phelps also understands the power 50,000 homes. importance of collaborative planning and Despite its simplicity, the project is chalanalysis during the early stages of this lenging. And that’s why Hensel Phelps was challenging project, Watson says. chosen. Hensel Phelps has built other chal“We utilize proven pre-construction prolenging projects that included specialized cesses to ensure that the project will receive infrastructure components such as rocket accurate and reliable data with regard to cost, launch facilities for NASA in Florida and constructability, and key systems selections California, aviation infrastructure at airports to ensure EnviroMission’s is a facility that around the country (including the PHX Sky exceeds the expectations for functionality, Train at Sky Harbor International Airport), efficiency, maintainability, and cost effecmilitary bases, and U.S. ports of entry. tiveness for the life of the structure.”

When asked why Hensel Phelps was the Davey says Hensel Phelps’ experience right fit for the project, Chris Davey, presi- The Solar Tower will produce 200MW of electricity. is a key component to the Solar Tower, which will generate electricity dent of EnviroMission, says the decision was twofold.

“One, their internal culture is second to none,” Davey says. “They to 10 municipal utility companies in the Southern California Public tend to recruit people young out of college and train them the Hensel Power Authority.

“So many things have to happen for a project like this to succeed,” Phelps way. They stay there for extended periods of time. That reflects Davey says. “You need to have the right partners on board.” the kind of work they do.

The EnviroMission Solar Tower is a significant project. Hensel “And two, Hensel Phelps takes on projects that are the first of their kind — and not just high-rises or hospitals. They build launch pads, Phelps builds unique projects regularly throughout the country that require construction innovation and an adaptable approach in order sky trains … and solar towers.”

The pricing approach for a project of this scale requires the com- to be successful. From those experiences, Watson says, the company ponents to be broken down into manageable subsystems that can be has created a solutions orientated team of construction professionals.

The project’s significance likely will also be felt in the state’s fragile supported by the local, state, national and world market, Watson says.

Solar Tower’s components consist of a concrete tower, collector system, commercial real estate industry.

Adds Watson: “Part of the significance of this project is the positive foundation systems, turbines, transmission and electrical infrastructure. Each of these components has been built in other applications impact it will have on the Arizona construction industry by maximizthroughout the world and are easily quantifiable. The real challenge ing the use of local subcontractors and vendors.”

28 | May-June 2012

Sky!’

Super Solar Tower to rise 2,800 feet from the desert floor in Arizona’s La Paz County

An aerial rendering shows the 4-squaremile greenhouse that will encircle EnviroMission’s Solar Tower, which is scheduled to be built by Hensel Phelps starting in 2013. (Renderings: EnviroMission)

29

BY PETER MADRID

All Aboard

PHX Sky Train Stage 1 at Sky Harbor is a moving example of Hensel Phelps’ grand presence and reputation in Arizona

A

sk Allan Bliesmer what’s most special about the $644M ports around the world,” Bliesmer says. “In order to maintain full use PHX Sky Train project, and his answer isn’t that surprising. of the taxiway, the design had to accommodate a ‘bridge’ that would “The team effort toward a common goal,” responds not encumber the use of the largest aircraft planned at the airport.

“To satisfy this, a 350-foot cast in-place concrete ‘bridge,’ at an Bliesmer, operations manager for Hensel Phelps Construction Co., general contractor for the Stage 1 fi xed elevation of 80 feet above grade, was incorporated to provide the facilities of the massive project at Sky Harbor International Airport. necessary clearance. Another innovative approach was the use of “The city, designer, and Hensel Phelps addressed each challenge with precast tub girders in lieu of cast in-place concrete structural elements for a majority of the guideway structure,” Bliesmer adds. “The a solutions-orientated approach.

“The people involved in the project refrained from developing or use of precast allowed the construction team to minimize the real maintaining personal agendas, and worked together, utilizing each estate needed on the ground to install shoring required for a tradimember’s expertise, to develop the best design and construction tional cast in-place concrete approach, resulting in minimization of issues associated with public access, airport operations and safety.” solutions for the project.”

The automated train was a necessity. Sky Harbor serves 42M pasOnce Hensel Phelps was selected as construction manager for the first phase of the train’s stations and elevated guide-way tracks, sengers a year, and the number is projected to rise to 40M to 50M in preliminary work began and lasted 20 months — from June 2008 2013. The goal is to remove about 20,000 cars and trucks — up to to February 2010. (Bombardier Transportation was chosen as the 20% of the traffic circling Sky Harbor — from the airport area. The project is also a boon to the local economy. Stage 1 has created an system provider).

Stage 1 — a 1.7-mile stretch — will transport airport visitors and estimated 6,000 jobs.

What are some of the challenges Hensel Phelps faced? employees between METRO light rail, east economy parking and “The primary challenge with the integration of such a large conTerminal 4, which serves 80% of Sky Harbor’s passengers. Stage 1 is struction project into an active airport,” Bliesmer explains, “is comscheduled for completion in 2Q 2012.

What was it about the company that helped Hensel Phelps land pleting the work without causing interruption to the airport and such a historic project? Prior to the start of the PHX Sky Train proj- airline operations, as well as maintaining safe access by public and airport employees.” ect, Bliesmer says, Hensel Phelps had In order to accomplish public safety just completed the automated train projand minimize any impact to the airport ect at the Dallas-Ft. Worth International operations and airline operations, much Airport. The Dallas-Ft. Worth system of the work activity is conducted during was installed throughout the entire airnight-time hours when flight activity port and spanned a total of 5 miles in and public access at the airport is at a length with 8 stations. minimum, Bliesmer adds.

In addition, Hensel Phelps has comStage 2, which will continue through pleted billions of dollars of aviation work the airport to the rental car center, was around the country including automatscheduled for completion in 2020. But ed train systems, terminals, hangars, last June, the Phoenix City Council administration facilities, rental car facilvoted to move up completion of a .6-mile ities, air traffic control towers and parksection to connect Terminal 4 with ing structures at a number of airports.

Terminal 3, along with a walkway for But one feature that makes Sky Train passengers to access Terminal 2, to early different from other projects is a 35014M: Pounds of precast 2015. Final cost of the project: $1.5B. foot bridge that carries the train above concrete “The state-of-the-art system installed an active taxiway that is large enough 12M: Pounds of structural steel at Sky Harbor is the latest and greatest for a 747 to pass through. An article in a in the industry,” Bliesmer says proudly. national construction magazine boasted 5,000: Drawings issued “Having the opportunity to work with the that the project “features many innofor construction City of Phoenix and the aviation team at vative design elements,” including the 340: Subcontracts issued Sky Harbor has furthered Hensel Phelps’ bridge.

40: Miles of wiring experience and recognition throughout “The Taxiway R crossing is a unique (power cabling) the industry.” item not generally featured at other air-

PHX SKY TRAIN BY THE NUMBERS

30 | May-June 2012

Experience with automated train systems at other U.S. airports made Hensel Phelps the perfect general contractor to undertake PHX Sky Train at Sky Harbor International Airport.

31

I N COM M E RCIAL

R E A L E S TAT E

NOMINATIONS FOR 2012-2013

ARE NOW OPEN

Attorneys • Accountants • City Planners • Property Managers Economic Developers • Brokers • Financiers • Developers/Investors Architects/Engineers • General & Sub-Contractors • Up-and-Comers

Nominations for candidates are being accepted at: MAGAZINE.COM For sponsorship and advertising information Call 602-277-6045

ROC#158422 ROC#158423

BY MARIA THOMPSON

This Green Schoolhouse Rocks Phoenix’s Roadrunner Elementary School is going green thanks to Hensel Phelps and a California-based organization

The Green Schoolhouse Series Safari model was selected for Roadrunner Elementary. (Renderings: Cause and Effect Evolutions)

I

nvestment in a child’s education takes on an entirely new meaning with the Green Schoolhouse Series project. Started in 2008, the Green Schoolhouse Series is in the process of creating the world’s first LEED Platinum design schoolhouse.

In Arizona, it’s happening at Roadrunner Elementary School in Phoenix. Hensel Phelps Construction Co. is the general contractor and one of the first companies to reach out to the project.

“Hensel Phelps’ participation is all about giving back to the community where our employees and their families live and work,” says project manager Alex Bertolini.

“Hensel Phelps’ teamwork, drive and passion for the project continues to amaze the (Cause and Effect Evolutions) team as well as the other partners that have signed onto the project,” says Stefanie Valles, public relations coordinator for San Diego-based Cause and Effect Evolutions, a cause marketing/business development organization.

The Green Schoolhouse Series is a collaboration bringing together corporations, foundations, school districts, communities, media outlets, and volunteers to build high-performance, environmentallysustainable, LEED-Platinum designed Green Schoolhouses at Title I, low-income, public schools. Hensel Phelps was the right pick for the project because of its reputation in the school-building market as well as being a leader in sustainability, Valles says.

The work at Roadrunner Elementary, 7702 N. 39th Ave., will provide students the opportunity to learn the importance of sustainability and its relevance. Construction began in May and is expected to be complete in July.

Green Schoolhouse Series projects are not just rewarded “Platinum” because of sustainability features, but also for being an influence that ultimately increases students’ performance in school. More than 300,000 trailers are used as classrooms across the country. A quarter of U.S. classrooms are considered dangerous and cause health problems in students, leading to their absence and overall neglect of educational benefits.

According to Greening America’s Schools Reports, the American Federation of Teachers and National Clearinghouse for Educational Facilities, there is a significant improvement in the following areas: » Improved learning: 26% progression in math and 20% progres-

34 | May-June 2012

sion in reading; » Healthier students: 5% increase in attendance and 9% decrease in asthma-related absences; » Cost savings: 33% reduction in energy usage and 30% reduction in water usage.

The founders of the Green Schoolhouse Series project, Marshall and Jeff Zotara, began school makeovers long before the company formed. In 2001 they influenced the growth of elementary school sustainability by implementing energy conservation and gardens.

The Green Schoolhouse Series focuses on students in K-12. The Safari model, which is being built at Roadrunner Elementary, will be completed for grades K-5. The Studio is for grades 6-8 and the Loft is for high school students. The project’s purpose at Roadrunner will lead the students and community through a journey of discovery of sustainability through the plan’s technology and education.

While the school is intended for students to move forward in education, the architectural plan, produced by architectural firm Stantec, was designed entirely backwards. All the components were donated before the building process began; therefore the design had to revolve around the various materials that were provided.

If the features mentioned weren’t fascinating enough, the schoolhouse construction would not be built by contractors but by at least 1,000 volunteers. Now that’s an investment in education.

Cause and Effect Evolutions “looks and asks for any skilled volunteers that would like to give back (to the community),” Valles says, as well as the corporate sponsors of the project. More than 1,000 volunteers have donated their time and effort into producing the LEED Platinum design schoolhouse. The volunteers were presented with an “accelerated extreme home-makeover schedule, which is unlike any other building project,” Bertolini says.

The Safari model was also rewarded the Edward E. Kirkbride award in May 2011 for excellence in educational and innovative planning and design. Roadrunner’s added on, versatile space will affect students, parent groups and the community.

“The Green Schoolhouse is geared toward a modern learning environment and provides students with a green mode of thinking,” Bertolini says.

IM AZRE ¼ Hensel 0412_Layout 1 04/06/12 1:55 PM Page 1

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Best of the West

A look at some of the notable construction projects managed by the Western District Hensel Phelps office over the years: ARIZONA

PROJECT

OWNER

ARCHITECT

CITY

SIZE

VALUE

COMPLETION DATE

University of Arizona UA Medical Research Building

Zimmer Gunsul Frasca Partnership

Tucson

152,000 SF

$44.6M

06/30/06

UA Chemistry Building expansion

Zimmer Gunsul Frasca Partnership

Tucson

65,624 SF

$35.459M

06/14/07

UA

UA McClelland Park

UA

SmithGroup

Tucson

71,746 SF

$18.8M

05/01/08

UA Law Commons

UA

Gould Evans Associates

Tucson

112,896 SF

$13.4M

07/25/08

City North Phoenix Phase I

Thomas J. Klutznick/ Related Midwest Corp.

Nelsen Partners

Phoenix

1.207 MSF

$148.3M

11/30/08

City North Phoenix Phase II

Thomas J. Klutznick/ Related Midwest Corp.

JACOBS

Phoenix

30,000 SF

$93.78M

12/31/09

Military Training Simulation Lab

Scottsdale Healthcare

Devenney Group

Scottsdale

8,300 SF

$1.05M

10/15/10

Mariposa Land Port of Entry

General Services Administration

Jones Studios

Nogales

53 acres

$23.343M

11/15/10

PHX Sky Train

City of Phoenix

Gannett Fleming Engineers

Phoenix

160,053 SF

$343M

03/31/12

ADOT Truck Weigh & Credential Processing Facility

U.S. Dept. of Energy

Burns & Roe

Nogales

3,800 SF

$7.13M

04/24/12

P573 Intermediate Maintenance Activity Facility

NAVFAC FEC Southwest

NAVFAC Mid-Atlantic

Yuma

45,000 SF

$13.86M

09/25/12

Banner Alzheimer Institute

Banner Health

RTK Associates

Phoenix

17,921 SF

$4.638M

10/03/12

UA Environment and Natural Resources Phase II

UA

Richard+Bauer

Tucson

150,000 SF

$49M

08/01/14

Arizona Cancer Center

UA

Zimmer Gunsul Frasca Partnership

Phoenix

250,000 SF

$101M

06/01/14

Commissary at Twentynine Palms

U.S. Air Force

The Jenkins Group

Twentynine Palms, Calif.

52,000 SF

$10.948M

11/12/03

Commissary Tinker AFB

DECA

CTA Architects and Engineers

Midwest City, Okla.

88,000 SF

$14.241M

09/12/05

Consulate Compound

U.S. Dept. of State

Zimmer Gunsul Frasca Partnership

Cape Town, South Africa

97,952 SF

$36.4M

11/15/05

U.S. Embassy

U.S. Dept. of State

Moore Ruble Yudell Architects & Planners

Berlin, Germany

163,000 SF

$93.993M

05/21/08

MRO Transformation Program – F100

Tinker AFB

Frankfurt Short & Bruza

Oklahoma City, Okla.

217,000 SF

$62.277M

06/13/08

SOF C0130 Fuel Cell & Corrosion Hangar

U.S. Army Corps of Engineers

Michael Baker Jr. Inc.

Cannon AFB, N.M.

88,802 SF

$32.766M

02/26/12

NMSSUP II South PIDADS

U.S. Dept. of Energy

Burns & Roe

Los Alamos, N.M.

10,124 SF

$3.506M

04/20/12

Twentynine Palms – North NAVFAC Mainside Expansion

Parsons Brickerhoff – RBF Consulting

Twentynine Palms, Calif.

26 acres

$102.799M

03/28/12

UAS Maintenance Hangar U.S. Air Force

JACOBS

Holloman AFB, N.M.

59,997 SF

$19.487M

05/30/13

36 | May-June 2012

SOURCE: HENSEL PHELPS

ELSEWHERE

Congratulations Hensel Phelps on 75 years

Proud supporter and the preferred HVAC & Plumbing Contractor chosen for the University of Arizona Cancer Center in downtown Phoenix. www.belairemechanical.com Bel-Aire.indd 1

4/27/12 10:22 AM

Coming next issue: Arizona Builders’ Alliance yearly update.

■ Mid-year report on the Valley’s industrial and office markets.

■ Women in commercial real estate: It’s not a ‘good old boy’ network anymore.

■ Statewide update: How has the commercial real estate industry fared outside the Valley.

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30

The Valley's multi-family market will be brisk in 2012 with projects such as Optima Sonoran Village in Scottsdale.

INSIDE 2012 Outlook by Industry p. 8 Valley Partnership Roundtable p. 28 AZRE's 7th Annual RED Awards p. 40

4/27/12 37 9:27 AM

Q&A

Vice President/Western District Manager Steve Grauer

Q

How did you get your start in the construction industry?

A: As a young boy, I was constantly around the construction business. My father was a vice president of an interior subcontractor in the Northwest. During high school, my brother and I worked part time on residential projects doing laborer work and light carpentry. While attending college (University of Washington), I continued to work on commercial projects as well.

I knew from an early age that construction was an industry that I wanted to be part of and that would provide a challenging career.

Construction has certainly done that for me.

Q

Hensel Phelps has made its mark in Arizona for more than 30 years, with 30 projects worth an estimated $1.8B. How proud are you of that mark?

A: I am extremely proud to continue the legacy whose foundation was set in 1979. A repeat corporate client, IBM, brought us to Tucson from Colorado. Our continued success with IBM on their projects in Tucson created the opportunity to continue to work together and took us further West to California, where today we have two district offices. The construction market has changed greatly in Arizona since then. With the approval of Alternate Project Delivery Methods in the early 2000’s, the diverse portfolio of project types that Hensel Phelps undertakes, as well as the experience of our people on those projects, has allowed for growth and opportunities with many new owners. Regionalization and establishing a permanent presence here is key to developing longterm relationships with owners, subcontractors, designers, trade associations and the communities our people live in. We are proud to live and work in a community and state as great as Arizona.

Q

How did Hensel Phelps weather the Great Recession, which took its toll in Arizona on the commercial real estate industry?

A: Th is year marks Hensel Phelps’ 75th anniversary in business.

From that first farmhouse in Northern Colorado that Hensel built, we have come a long way and seen many tough and challenging times. The Hensel Phelps organization and the Western District each had their 3 best years in our 75-year history during the Great Recession. We attribute this to our repeat clients that continue to entrust their projects to us, relationships in the Industry as a whole and the unparalleled performance of our people. We are grateful for all of them.

Q

Hensel Phelps is completing its portion of PHX Sky Train this year and embarking on another major project – the Solar Tower in La Paz County. How optimistic are you about Hensel Phelps’ presence in Arizona the next 10, 20 or even 30 years?

A: I am extremely optimistic and confident about our continued

38 | May-June 2012

presence in Arizona in the future. In the construction industry, change is constant. Market sectors and economic conditions are always providing challenges to change. It is a matter of survival.

While we may not look exactly the same 30 years from now, we will be here.

Q

You went to college in Washington and now live in Arizona. How important is the Western Division to the overall picture at Hensel Phelps?

A: The Western District, covering Arizona, Southern Nevada, New Mexico and Oklahoma, is extremely important to Hensel Phelps. Establishing a local presence, committing to the communities in which our families live and developing relationships is critical to our continued success. Prior to our corporate commitment of establishing a district office in Arizona, these states where covered by other district offices. Our CEO and President, Jeff Wenaas, is from Tucson and attended both UA and ASU. There is a strong commitment from the top. Arizona and the Southwest have been and will continue to be very important to us. We are the local contractor with the national reach!

Q

As Vice President and Western District Manager, what project (or projects) are you most proud of?

A: As a district manager, I am proud of all of our projects, but most importantly our people and performance on those projects. We are fortunate to get the opportunity to perform a wide range of project types for both public and private owners, utilizing a wide variety of project delivery methods. The depth of experience of our people allows them to seamlessly operate on these different projects and exceed our owner’s expectations in the overall construction experience.

Number of years with HP: 22, with stints in Washington, California, Nevada, Utah and Colorado.

Number of years as Vice Grauer President/Western District Manager: 4 Family: Wife Stephanie and daughters Morgan and Skyla; and two Labrador Retrievers, Dakota and Mocha.

Hobbies: Traveling, fishing, hunting and shooting.

Favorite sports teams: Denver Broncos – and of course the Arizona Cardinals.

CITY NORTH, PHOENIX, AZ

Congratulations!

Hensel Phelps Construction Co. 75 year milestone

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39

ArizonA All-StAr BrokerS SpeciAl edition!

✭ ALL-STAR BROKERS

Winners will be posted on-line @ AZREmagazine.com and will be featured in the September/October issue of AZRE magazine.

Categories include: Office Broker l Land Broker l Retail Broker l Industrial Broker l Investment Broker l Healthcare / Medical Broker l Brokerage Firm: Small & Large l Most Notable Transaction: Sales & Leasing

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4/27/12 2:33 PM

To nominate visit AZREmagazine.com or Call: 602-277-6045

Celebrating 25 Years of Responsible Development

2012 Special Section: President’s Letter 44 Past Chairmen Roundtable 46 2012 Chairman Q&A 60 25 Years of Leadership 62 Partner Profiles 68 Community Project 71

Building Alliances for Growth — “Having Alliance Bank’s deep knowledge of commercial real estate in this market was a great benefit to us.

They take the time to listen and are truly solutions-driven.”

— Mark Hansen, Owner, Santé of North Scottsdale

Ericka LeMaster, Vice President, Commercial Real Estate Lending, Alliance Bank with Santé Owner Mark Hansen. Alliance Bank provided the construction and permanent financing of Santé of North Scottsdale, a resort style, short-term rehabilitation facility. The new center will employ 150 full and part-time staff and include a full range of amenities. The North Scottsdale location is one of four facilities in Arizona.

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CONGRATULATIONS TO VALLEY PARTNERSHIP ON 25 YEARS OF LEADERSHIP AND SUCCESS IN ADVOCATING FOR RESPONSIBLE DEVELOPMENT.

Transforming Extraordinary Land Legacy Properties INTO

Founded in 1984, DMB Associates, Inc. creates unique environments that enrich people’s lives, enhance the greater community and achieve enduring business success.

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W W W. D M B I N C . C O M

VALLEY PARTNERSHIP: PRESIDENT’S MESSAGE

25 Years of Commitment

B

eginning at the end of 2011, I was charged with the responsibility of reviewing the 25-year history of Valley Partnership in anticipation of the yearlong celebration of our Silver Anniversary.

The only records kept by a small organization with a historically small staff were the binders of corporate minutes (required by law) and some photographs — not pictures on websites, CDs, JPEGs or TIFFs — of events and Community Projects. I dreaded the thought of combing through tedious legalese and staged pictures of people holding shovels pretending to do heavy lifting at some children’s facility one day a year.

I was wrong.

Reading the corporate minutes from 1987 through 2011, each year came alive with the personalities of the Chairs of the Board of Valley Partnership. They were business people who led the organization and the commercial real estate industry in some of the direst times and in some of the most successful. I read of the dedication of the Partners who served on Valley Partnership committees with missions ranging from Government Advocacy to Business Development to our Community Projects.

Although 25 years have passed and the Valley has grown beyond the boundaries that existed in 1987, one thing has been consistent: Valley Partnership is a partnership among strong individuals who are dedicated to the four corners of the Valley Partnership Mission: Advocacy Education Networking Community Service I hope you enjoy this look back over the past 25 years, particularly the comments of the past Chairs of the Board of Directors, a collection of prestigious commercial real estate professionals who committed a significant amount of their career and time to Valley Partnership.

I invite you to join Valley Partnership for the next 25 years and become a part of the Valley of the Sun’s Premier Advocacy Group for Responsible Development.

Richard R. Hubbard President & CEO Valley Partnership 44 | May-June 2012

Congratulations to

Valley Partnership on their 25th Anniversary!

Vestar is honored to have been a part of Valley Partnership’s leadership for more than 20 years.

Lee Hanley Pat McGinley Rick Hearn 1987-1995

ACQUISITIONS

MANAGEMENT

DEVELOPMENT

2425 East Camelback Road, Suite 750 | Phoenix, Arizona 85016 602.866.0900 | www.vestar.com PHOENIX

LOS ANGELES

SAN DIEGO

LAS

VEGAS

1999-2003

2006-2012

VALLEY PARTNERSHIP: ROUNDTABLE

BY PETER MADRID · PHOTOGRAPHY BY CORY BERGQUIST

Back to the Future

V

alley Partnership is celebrating 25 years as Metro Phoenix’s premier advocacy group for responsible development. In looking back – and also looking ahead – AZRE magazine brought together six former chairmen to discuss goals the group has successfully achieved and challenges that lie ahead.

46 | May-June 2012

Six past chairmen reminisce about the past, discuss what lies ahead for Metro Phoenix development

Past and present: (L to R) Valley Partnership chairman Rick Hearn and past chairs John Graham, Pete Bolton, Clesson Hill, Dave Scholl, Charley Freericks and Jim Pederson.

1997 and 1998; Jim Pederson (JP), The Pederson Group, chairman in 1999; Pete Bolton (PB), CBRE/Grubb & Ellis (Newmark Grubb Knight Frank), chairman in 2004; and Charley Freericks (CF), DMB Associates, chairman in 2006. Rick Hearn (RH) of Vestar, the current chairman, served as moderator.

RH

: During the past 25 years, has the level of economic development undertaken by local governments and the state been inadequate, adequate or exceptional?

With the commercial real estate industry making a slow recovery from the Great Recession, the advocacy role undertaken by a group such as Valley Partnership is magnified. “The surge in commercial real estate is evident,” says Richard Hubbard, president and CEO of Valley Partnership. “The comments from our past chairs provide great direction to Valley Partnership for the next several years.

“With the increasing activity, it is imperative we re-energize our advocacy efforts with particular focus on the local communities while always monitoring our state and federal governments for any issue that affects our industry.”

Participating were John Graham (JG), Sunbelt Holdings, chairman in 1989; Dave Scholl (DS), Westcor-Vintage Partners, chairman in 1990; Clesson Hill (CH), Grayhawk Development, chairman in

PB

: Frankly it’s all three. Over the years, it’s been inadequate, and it’s gone to adequate, and then I think in some cases it’s been exceptional. It also depends on which state we compare ourselves with because some states are exceptional and then some states are just barely adequate. And then you can go in the opposite direction, say inadequate, compared to Texas, and some of the other big ones across the country. Overall, we are doing a better job today.

CH

: I would agree. I think there is lack of funding these days and I think that education has suffered greatly and that is a major infrastructure that needs to be rebuilt. Not just here but everywhere, and as we move forward and embrace new technology, it is a new way of life as we look toward the future.

DS

: When I looked at this question, I really focused on the side of economic development and “are cities making investments?” I 47

VALLEY PARTNERSHIP: ROUNDTABLE think that a lot of ways the cities have been trying to operate with their arm tied behind their backs. The constitution and our legislators have never really given our local government a whole lot of choices in their tool boxes. With the limited tools they have in there, they have done a pretty good job. I think that the industry I have been in has had a lot of city participation in economic development, and I think that they have been pretty aggressive about getting the most out of what limited tools the state’s constitutional statues have given.

RH

: Charley, your company was impacted by this exact thing oat Eastmark (in Mesa) in regard to Apple. What are your thoughts?

CF

: Well it was not just Apple. It happened to us positively with First Solar. We were able to compete and win there. And with Apple, to be in the mix, I’m where Pete was. It is an evolution where economic development has come a long way since 1987. I had to think about 25 years, and I didn’t know I had been in the business that long. I look at what has happened now as the communication level of real prospects is very high and people know they’re coming and looking, which in the old days you would hear about it and it was here and gone. I’ve been in that side of the business almost my entire career chasing prospects from out of state. We come in second place to states that want to write checks. When we lose, we lose because somebody wrote a check and throws money at it to the prospect. I’ve never been a huge advocate at writing big checks. It’s a

48 | May-June 2012

complicated business. I think we are doing a lot better chasing these deals and being in the running and again the tool kit is very limited.

JG

: I’m actually optimistic about many things and this is actually one of them. My view is that being a young state one of the things that we did probably an amateurish job in early on was in economic development. I think that was a maturity problem not a “we didn’t quite get it problem.” With what we have now with GPEC and ACA and trying to address some of our structural and political and legislative problems, we got a really good pipeline of stuff that is being looked at and is being professionally handled.

JP

: Certainly economic development depends on how you define it. A lot of people think that dangling a check in front of a major company is going to bring jobs into the state. But as Clesson mentioned, it’s more than that. It is infrastructure investment; it’s education and venture capital.

RH JP

: Has Valley Partnership had a positive effect of creating a better image for developers?

: There is a word that has been overused but I think that it is applicable. In this case, that is sustainability — the sustainability of our communities. It directly relates to our industry because we plunk down projects, neighborhoods or communities, and we depend upon a standard of living that is directly dependent on the rents that we get for our properties. During recession times,

neighborhood. Looking at the various infrastructure investments that are critical to the kinds of things we do. We manufacture a product. And to manufacture the product, you need certain things, at least in the shopping center business. You need good tools. You need quality neighborhoods. You need good infrastructure investments. All of those things that directly relate to the level of rents we are going to get. In that regard I think Valley Partnership over the past 20 years has been excellent. I think it’s an organization that has emphasized the sustainability concept.

JG

John Graham and Charlie Freericks construction prices go down, land prices go down, but you have to achieve the rents if you are going to be successful at the end of the day. What Valley Partnership has done, by emphasizing how development relates to a sustainable lifestyle in the various communities where we live, is to look more beyond the block of where you are developing. It’s looking at your community, looking at your

: I think the short answer is yes, that is has improved the reputation of how people view the development industry. The other part of that is the role that Valley Partnership will never go away because inherently we are in a confl ict relationship with neighborhoods and other people. No matter how good of a job we did, it’s always going to be viewed that way. I think we have changed the conversation from one that was always in essence an adversarial, to at least everyone understanding that it is a two- or three-legged stool at a minimum, and that things have to be done by more than consensus. It has to be more by partnership and good conversation.

That is why Valley Partnership will always have a role to the extent of how we want to have it because no matter how good a job we do, we will have different rubs with different constituency groups.

But I think the role we need to continue to take is being the group that is not adversarial, rather constructive in those conversations for solutions.

49

VALLEY PARTNERSHIP: ROUNDTABLE

CF

: I was more optimistic on this one. My immediate reaction was absolutely that my focus was on the government. As an industry dealing with all of the city, town and county issues for regulations of our industries locally, I think Valley Partnership’s reputation really had a big impact because we have rational and moderate voices coming through consistently saying, “Gee, your regulation here is either irresponsible or maybe needs a little tune-up or maybe you missed a big idea here.” So from the professionals within our industry that we deal with, staff level government in particular, I think our reputation over the past 20 years has improved radically.

I’m with the other guys here. The challenge we face will always be in confl ict with residents and neighborhoods, and we need to keep doing our jobs well to keep doing that and not be controversial.

come up and a local municipality would ask, “Can you guys put something together on this billboard issue?”, and we would have six very educated voices at the table later that afternoon. That just doesn’t happen in any other organization. From my side of the business (brokerage), that has been extremely positive. As soon as we get the local municipalities on board, which they are, the neighborhoods rarely follow, but they don’t have much depth of voice anymore because if the politicos are truly believing the intelligent voices of the marketplace, they have a tendency to be more objective.

CH

: I think part of the sustainability of 25 years of leadership is that Valley Partnership has been able to maintain frontline guys and women who are involved in development and kept them passionate about Valley Partnership. It has never faded away or lost its image in the cities to know that if we come, we will get quality people stepping up and get engaged and deliver some kind of end product. I think it’s a tribute to the leadership inside Valley Partnership to maintain that constant level of quality people.

RH

: We asked this question more than 20 years ago: Do you feel the local and state government officials have a good understanding of the current real estate and banking problems in Arizona? Can that same question be asked today?

JP

Rick Hearn

DS

: I agree. I think that whenever you look at an image, you have to talk about which audience you are talking about. I think among consumers or neighborhood groups and homeowners, I don’t know if they have enough regular engagement to really understand who Valley Partnership is. I don’t know if the developers’ image among the average fellow on the street has improved that much. I agree with Charley. I think we are front of mind when a city or a local government says, “We need input, or we are thinking about changing this part of our code.” I think we are one of the first people they think of to come to the table and have the dialogue; whereas before Valley Partnership, it was a very splintered industry, and I don’t think there was a common voice and more importantly a common set of ears that listened to cities when they needed have that dialogue, too. So I think it has been vastly improved.

PB

: What Valley Partnership has really accomplished with the local municipalities is to provide them with a dependable, educated voice. I remember sitting on a board and something would

50 | May-June 2012

: I think they understand it because it is affecting their revenue significantly. Development to cities is a mixed blessing. They appreciate all of the sales taxes and the fees paid by the developers, but they have to contend with all of the complaints. Charley made an interesting point dealing with cities. Sometimes what I call the newer cities, the ones on the outskirts, don’t have the staff, the continuity or the maturity that some of the older cities have, so it’s sometimes more difficult to deal with the smaller cities. But most governments are strapped right now. That’s due to the economy and a city that is accustomed to the fees and the taxes that are derived from development. I don’t think we are ever going to have the kind of economy we did between 1994 and 2006-2007. We all have to make adjustments. Our industry has to make adjustments in terms of what we do and how we do it. We have a product to produce. Cities are going to have to make adjustments. Should cities be totally sales tax dependent? Shopping centers produce a lot of sales tax, and they welcome us with open arms. Car dealerships produce a lot of sales taxes. Shouldn’t we have a more level playing field in regards to tax generation? Just because Scottsdale has more commercial than an adjoining city, does that mean that they are going to have more revenue to support their services? I think that it is a global approach, and our cities are going to come together and address some of those concerns.

JG

: I don’t think there is any question that they understand the depth of our problems. It’s all the way from their fiscal problems to the operational issues of not seeing zoning cases and their staff being cut down to skeleton-type levels. I think it is obvious that they understand that part of it. I think that when something bad or negative happens, something good comes out of it. One of the things that we are all going to benefit from in the future is that the cities are more reticent to restaff and go back to business as usual.

I think from the standpoint of processing procedures, processing costs, processing time frames, and some of our worst enemies over

would like to congratulate VALLEY PARTNERSHIP on 25 YEARS of responsible development in Arizona.

We look forward to the next 25 years of outstanding leadership as the Valley braces for 2 million more residents.

3101 N. Central Ave., Suite 1070 | Phoenix, Arizona | (602) 277-6045 | www.azBIGmedia.com

Š 2012 CBRE, Inc.

CBRE would like to congratulate VALLEY PARTNERSHIP for 25 years of leadership in the commercial real estate industry and for advocating responsible development throughout metropolitan Phoenix.

CBRE IS A PROUD SPONSOR OF VALLEY PARTNERSHIP.

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51

VALLEY PARTNERSHIP: ROUNDTABLE

5 Most Important Advocacy Issues

1.

Passage of Proposition 303 in 1998, which created the Growing Smarter Act and allowed for municipalities to purchase Arizona State Trust Land for Conservation. This combined with the all-out effort to defeat a Portland-Style Growth Boundary Proposal, Proposition 202, which was on the ballot at the same time.

Pete Bolton the last decades, some of those will see some level or relief. We are also seeing some of the cities are courting us to do something in their communities. Not that they have much to give us, other than a friendly hand and encouragement to do something. But it is nice to see that they are reacting to figure out how to jump-start their own economies and their own development of their communities.

CF

: I gave this question a lot of thought. We are in these longlived projects; 20-plus years projects so you are guaranteed to have cycles. It was early in my career somebody gave me the analogy of real estate cycles. When you’re on the downhill slide, no one ever believes that there will ever be an uphill again. So the reaction is that when I talk to most of my peers, like you guys, we are starting to observe that our days are spent on positive activities or improving activities, whereas a year ago we were slugging through tenant failures, defaults and bank loans and all of that stuff. The cities are still in that downhill-looking position, so their reaction time is slower, which is frustrating. At the other end of it nobody ever thinks there is going to be a downhill again. So I love the industry. We have a balancing act; you want to take advantage of those mood swings when they work for you. But when you step back as a responsible player in this industry, you’d like to see a little more perspective and a little less reaction on the staff level. We have been fortunate.

We have been in very difficult cities to deal with, which is a blessing because their staff level thinking is very good. Mesa has been through an amazing evolution with its entire team — from mayor down through the ranks. Scottsdale is a very challenging city, but it is very sophisticated and a lot of time they have a really good point.

I like being held to that higher standard, even on the days I’m complaining about it. It’s nice to have lots of examples to refer different towns and cities to, and it’s nice to have Valley Partnership as a sounding board for some of those revolving towns, too.

DS

: I think when the savings and loans crisis hit, maybe because it was my first downhill cycle, it seemed that more people were

52 | May-June 2012

2.

Collaborated with the City of Phoenix to draft the “Big Box Ordinance,” which protected the ability of retailers to operate facilities larger than 100,000 square feet.

3.

Revised the Arizona State Statutes, which regulate municipality’s ability to use sales tax revenue to reimburse commercial real estate developers for the installation of public infrastructure.

4.

Revised the Arizona State Statutes to preserve the Government Property Lease Excise Tax (GPLET) to promote redevelopment in blighted areas of municipalities.

5.

Supported the City of Phoenix at the Arizona Supreme Court by filing an Amicus Brief in Turken v.

Gordon. The Amicus Brief helped persuade the Supreme Court that a municipality’s use of sales tax to reimburse developers for the cost of public infrastructure was not in violation of the Arizona Constitution.

Source: Valley Partnership

CENTENNIAL  SERIES

Valley Par tn e rs h ip I s You r Advocate For R e s p on s ib le R e al E s tate Deve lop me n t

VALLEY PARTNERSHIP: ROUNDTABLE

sort of “deer-in-the-headlights-look” than when this crisis hit. A lot of people said, “I know what mode to go into,” and even the cities knew that it was going to be a tough 4-5 years to get through. At least for me the memories of the late ‘80s early ‘90s, those that are veterans knew what you had to do and what was required at that point in the cycle.

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CH

: I’m going to go on a little twist. I thought Pete was going to go there first, but I’m going to the first one to throw a question back.

The question is good.

King Crab and Yakimono Hawaiian Ahi areWe justtalked about local and state, but what about the Feds? Is it different now than 20 years ago with the some of the delicacies Salt Cellar and mortgage regulation, it Fed? I know thatthat formake the the homebuilders has been a lot harder on them.

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and it is daunting to look at the RTC days and look at the special fromTh 4:00pm to 7:00pm 10:00pm to 1:00am. servicers of daily today. e banks playand a again role from in the recovery in the downturn, and the bank’s FDIC, but the real power is coming out of Wall Street. You know what, the fascinating part of this is that they are just rebranding and heading back into something else. I mean it really is amazing to watch that place operate. And 90% of the population does not even know what is even going on in those four city blocks.

RH PB

: What are the greatest challenges that lie ahead for Valley Partnership?

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we all need to get educated on. I’m getting a severe education right now. As far as greatest challenges, I think nimbyism is right up there. We got to go vertical. The density is an issue. The economics of density is an issue. What Scottsdale has been doing lately is almost unbelievable with the 6-, 7- and 8-story apartment buildings. I thought I’d never see this. I think the downturn has some fascinating outcomes much to so many people’s dismay. But from the standpoint of Valley Partnership, how do we start switching that mentality? I don’t know if all of you agree with this, but I think that horizontal development has got to take a leap vertically, forward. And we need the politicos to support us with that.

CH

: I agree with that sentiment. What you’ll find is that you’ll get a number approved and then they’ll shut the door. I think it is erratic. I don’t think that they will be consistent necessarily when they determine density. I’ve already seen just in Scottsdale, with apartments, it’s a four-letter world. Even though they have enough planned, everybody is getting afraid of what’s planned, even though they won’t all show up. I think that when you have erratic behavior in a city, it’s impossible which direction. It is an opportunity to keep them educated and keep in front of them as it relates to what are the benefits.

DS

: Most of the built environment that you see every day in this town has happened in the past 60 to 65 years. One of the biggest challenges that Valley Partnership has is that its membership must go forward, make a change and start addressing vertical construction. Our industry will have to start becoming better at harvesting tougher deals. I think that the days of “blow and go” at the surface is coming to a stop. In 1985, we all decided to pass a bill that we invest billions and billions into a freeway system and I don’t see a next super giant equivalent economic development dump of money like that was. I do think one of the biggest challenges for our membership, and therefore for us, is this change that is going to have to take place and really look into more sophisticated ways to do a better job.

CF

: John and I were talking at a ULI gathering, saying we have a foot in each camp because we are both in very urban projects in Downtown Tempe. Pete’s right that vertical development is here to stay and it is the wave of the future. It’s complicated because the infrastructure in the cities was not sized to take on big vertical projects, so it really drives a complicated bargain for the cities and the municipalities. It has been really fun the past 5 to 6 years watching Phoenix, Scottsdale, Tempe and Mesa. When when they get into that infill, they have to throw their zoning codes out and go to form-based management or some type of regulatory procedure. It is really fascinating to watch because some of these old style, stodgy cities have brought in these new-style thinkers and they’re throwing the books out and starting over. It’s really what it requires. They are going to have address the infrastructure because most of it is not sized right to go that dense.

JG

: I have a general answer that I give to any organization to start with. I think that anybody that doesn’t continually evaluate purpose, value and leadership will go the way of a dinosaur at some point. The thing that Valley Partnership has actually done a good job over the past 25 years is constantly asking those questions and 55

VALLEY PARTNERSHIP: ROUNDTABLE

the services that I provide; the need for services that all of us provide. That is the exciting challenge. It was pretty easy back in the day. You go out and buy 20 acres and put down a grocery store, some shops, and a couple of paths and you go on your way. But 6 months later you have Walmart pouring footings across the street. Our experience with infill, once is happens, it is tougher to do. You’re dealing with land assembly. You’re dealing with environmental remediation. You’re dealing with high-priced land. If you can get it done, your competition is limited.

JG

: The issue is – and I have seen this a lot recently – is who is waiting for the momentum play versus things just getting better regardless of what you do? Prosperity versus the creativity play. I do think that this urbanism issue is one that will give us more lengths to recovery; a better place to live. It isn’t the only thing that Valley Partnership should focus on, but I think it is uniquely qualified to do a lot in that discussion just because of the cross section and the diversity it has in its membership.

Jim Pederson generating legacy-type leadership. First and foremost my hope is that we continue to adapt – as an organization. I do think, and Charley is right, that we have talked about it a lot. One of the interesting things that we can and should weigh in on is this more densification of the city and change the urban form. I think it is going to happen and if it is not done thoughtfully, the result is going to be much less fulfi lling and rewarding.

JP

: Maybe we are using the wrong words. I have heard vertical.

What about the context of urban? Urban applies to a lot more things than verticality. It applies to design. It applies to use. It’s a small example, but look what has happened on 7th Avenue and McDowell. By converting the property, it’s jobs. It’s a planners dream. Jobs, housing, entertainment, and shopping in one spot. I don’t think that if you have a well-conceived project like that, then maybe they (cities) will have to redo their codes and maybe they might have to redo their outlook. But they get it. It’s what they were taught in school and if you can generate that excitement not only on the city level but on the community level, I think most people would get it instead of being absolutely terrified.

RH JP

: What are the greatest opportunities that lie ahead for Valley Partnership?

: We are going to have to understand that our industry is going to change, I think, drastically. I don’t think we are going to Buckeye or Queen Creek anytime soon. We are necessarily talking about infill development; we are talking about the more urban concepts. That is going to involve a transformation of thinking and that is going to involve everyone in our industry. I’m excited about it. I can see opportunities within 4 or 5 miles from where we are sitting now. Same thing in Downtown Tempe. Same thing in Downtown Glendale. The same thing in any area that has a great mass of density. Hopefully an income level that would sustain a good quality development that needs 56 | May-June 2012

CF

: There is another dimension of redevelopment that we haven’t really touched on. Our first big project as a company was Centerpoint in Downtown Tempe. When I was going to ASU there was a lot of old, rundown stuff there. It is immensely rewarding to just go see a re-creation of things that have deteriorated and were once rundown. My personal experience, I was on the front of what was the old Caterpillar Tractor Desert Proving Grounds, and now we are doing Eastmark. We are taking these vast pieces of really underused infilled properties.

CH

: There may be the need to guide the committee structure and leadership toward urban redevelopment and higher density issues. How do you back fill for infrastructure? Water lines need to be this big. There needs to be more priority put on the types of issues that Valley Partnership needs to focus on. Valley Partnership has never been a self-policing type of situation. If there was a way to get a grassroots raising of the bar in our industry, have a position and a dialogue that causes the membership to say that they want to operate at a higher bar than they are used to, a lot of good leadership could come out of it. Valley Partnership could drive the message of its own.

DS

: When I look at the greatest opportunity or challenges, I have two thoughts. One is I continue to believe that the best work that Valley Partnership does is at the grassroots levels and what it does with all of its cities and towns and educating the staff and working with them to write new ordinances.

Urban infill is a green field. They are going to have a lot of homework to do. In the job of being the communicator and sharer of great ideas, Valley Partnership can really play a great leadership role. I think that the challenge and opportunity is to make sure that you have the right staff and have the right committees and have people who are committed and engaged to get in there. I have been blessed to see the impact we have on city managers and planning directors and staff people by just having a dialogue and saying this doesn’t work and let me tell you why. I think that there is great opportunity.

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VALLEY PARTNERSHIP: CHAIRMAN Q&A

BY STEPHANIE GONZALEZ

R

ick Hearn joined the Valley Partnership Board of Directors in 2005 and has been an integral part of its leadership team, culminating with the chairmanship in this, the 25th anniversary of the organization. A 25-year veteran of the commercial real estate industry, Hearn joined Vestar in 1994 as its director of leasing, overseeing much of the leasing, marketing and broker management of Vestar’s retail portfolio in the Southwest, complementing his duties and capacities as its designated broker.

Over the years, Vestar and Valley Partnership have enjoyed a rich heritage. Three of Valley Partnership’s chairmen — Lee Hanley (chairman/CEO), who participated in the original framework and served in 1995; and Pat McGinley (VP of property management), who guided the board in the 2003; and now Hearn — are affiliated with Vestar.

Q

WHAT DOES IT MEAN TO BE AN ADVOCATE FOR THE COMMERCIAL REAL ESTATE INDUSTRY? A: One word, “important.” As a Metro Phoenix-based organization advocating for the industry, our focus is precise yet flexible, and extends throughout the entire “Valley of the Sun.” The importance and responsibility of being the only real estate-based organization, not a chapter or division of a regional or national entity, but native to the Valley … “invaluable.” We are sought after and respected for our responsible positions on industry-related issues whether local, regional, statewide or federal.

Q

HOW IMPORTANT IS THAT ADVOCACY DURING THESE TOUGH ECONOMIC TIMES? A: Advocacy is important all of the time. Each economic cycle creates differing challenges for our industry, and, bad policy decisions, regardless of timing, impact subsequent cycles. A balanced advocacy approach minimizes potential negative outcomes, while fostering prosperity for all stakeholders, both public and private.

Q

WHAT ARE VALLEY PARTNERSHIP’S GOALS FOR 2012?

A: Continued application of our founding principles — advocacy, networking, education and community projects. Th is past October, bolstered by our board retreat, one facilitated by Todd Hornback, a respected non-profit professional; we developed four centric goals for our 2012 focus — board development and leadership, organizational communication, development and enhancement of strategic alliances and organizational fiscal policies.

Q

HOW WILL VALLEY PARTNERSHIP ACHIEVE THESE GOALS?

A: Each element of the organization has specific objectives or goals developed at the retreat. Measurable action items are continually evaluated, whether at the organizational, board, staff or committee 60 | May-June 2012

level. The organization’s biggest direction and efforts come from the 10 standing committees, comprised of volunteer executives (partners) that execute on those goals and objectives. Our partners are our biggest assets. For the organization to continually evolve, and pursue its mission objectives, we must develop future leadership from these committees, thus fostering partner involvement.

Q

WHAT ARE THE BIGGEST CHALLENGES IN 2012?

A: Preparing for the eventual turnaround of our industry and that of the “Valley of the Sun” we all call home, while working with our partners through this still very challenging economic cycle. Valley Partnership’s mission remains constant, continual support for all of our partners and to help their organizations prosper.

Q

AS VALLEY PARTNERSHIP CELEBRATES ITS 25TH ANNIVERSARY, WHAT LIES AHEAD? A: The road ahead includes a reflection of our past, a continual focus on the present mission, and a strategic look at how our industry will manage the next two decades of Valley growth, which could include more than two million new Phoenicians.

Th is reflection has allowed us to touch our past 21 chairs so as to re-engage and respect our heritage, including the “founding” chairman, Ron Haarer Sr. (1987). And, we said a final farewell to a trusted leader and past chair in Gregg Alpert. We’ve catalogued our past accomplishments (municipal and legislative successes) or the more than 25 community projects completed, with more than $3.5M in charitable dollars raised and countless man-hours volunteered.

As to our near-term future, continued organizational governance, growth of new partners and/or new partner firms, adding emerging business sectors to our already diverse business base and strengthening our alliances. And, through our actions always declaring “Valley Partnership is the Valley of the Sun’s premier advocacy group for responsible development.”

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VALLEY PARTNERSHIP: PAST CHAIRMEN

BY MARIA THOMPSON

25 B

Years of Exemplary Leadership

ehind every great organization are great leaders. And Valley Partnership is no exception.

With the Valley-based development group celebrating its 25th anniversary, AZRE magazine posed the following question to its past chairmen: What was Valley Partnership’s most significant or greatest accomplishment while you were chairman?

1987-88 1989 1990 1991 1992-93 1994 62 | May-June 2012

Ron Haarer, Sr., Westwind Aviation

Haarer

“Valley Partnership’s first Board of Directors was comprised of members of the development community, city officials and community activists. Watching these diverse groups working together was the ultimate reward for months of soulsearching and persistence and 25 years of continual existence.”

John Graham, Sunbelt Holdings

“I’m proud that a new organization was able to survive a difficult real estate downturn and was a positive participant in working through the RTC era. A large number of people have contributed to (V.P.’s 25-year) success.”

Graham

David Scholl, Westcor/Vintage Partners

“Valley Partnership’s participation in a yearlong discussion with the Regional Transportation Commission, and making efforts in communication and partnership was a success.”

Scholl

Charlie Byxbee, Byxbee Development Partners

Byxbee

“Sustaining the organization through such a harsh real estate environment. In addition, we were actively involved with the policies of the Resolution Trust Corporation, and Valley Partnership was able to provide input to the RTC, including offering testimony during oversight hearings that were held in Phoenix.”

John Ogden, Suncor Development

"Staying alive — I served for two years and it was clearly, 'staying alive.' We were just coming out of the RTC era and everybody was broke or being sued."

Ogden

Meyer Turken, Turken Industrial Properties

“We hired qualified executive directors and became more politically and legislatively active. Our industry can be proud of the way we led the charge and have made Phoenix and Maricopa County the great metropolis it is today.”

Turken

1995 1996 1997-98 1999 2000 2001 2002 2003

Lee Ha nley, Vestar

“Our objectives for 1995 were influencing government positions on real estate, expanding our membership, and providing networking opportunities. V.P. created a new category of membership for government agencies. Perhaps our greatest achievement was to retire a promissory note created in 1987 to finance Valley Hanley Partnership operations in the early years. We became self supporting.”

Tim Terrill, Sella Barr/Walton

“Substantially expanding our public sector membership and broadening out private sector reach. Advocating responsible development and input on real estate and growth policies at the state and local level.”

Terrill

Clesson Hill, Grayhawk Development

“Focusing on the growth of the community project and making it into an integral part of Valley Partnership’s membership and the efforts of our active committees.”

Hill

Jim Pederson, The Pederson Group

Pederson

“During my tenure, I was most proud of our progress in promoting quality development in Arizona. Such initiatives as ‘Growing Smarter’ provided a set of guiding principles to help Arizona not just grow, but reach for the next level in developing quality growth.”

Gregg Alpert, Evergreen Development

Valley Partnership and the commercial real estate community lost a leader and a friend on Sept. 25, 2010, when Gregg Alpert unexpectedly passed away. He was 45.

Alpert

Ken Roth, Roth Development

“Valley Partnership’s greatest and most challenging accomplishment was trying to make sense of the events of Sept. 11 and assessing the relationship between the attacks and the real estate business.”

Roth

Heidi Kimball, Sunbelt Holdings

Kimball

“Valley Partnership assumed a leadership position in formulating the Outreach Task Force that was challenged with creating a coalition to work proactively on issues confronting business and the real estate development industry, thereby leveraging the industry’s influence at the local and state levels.”

Pat M cGinley, Vestar

“Created the framework for the Annual Sponsorship Program that was instituted for the following calendar year. Also, organized the first Flat Tire Tour and increased financial reserves for Valley Partnership to more than $200,000.”

McGinley

63

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Valley Partnership: Congratulations on 25 successful years!

As we’ve evolved from a start-up office in 2000 to a division of a global consulting corporation, we have highly valued our alliance with Valley Partnership.

We look forward to the next 25 years together, shaping the future of development in our community.

CONGRATULATES Valley Partnership

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on advocating responsible development for 25 years.

HERE’S WHAT WE ARE MADE OF: TiTle & Job PosiTions:

37% . . . . . . . . . .owners/Partners/Presidents 13% . . . . . . . . . . . . . . . . . . . . . Vice President 25% . . . . . . . . . . . . . . . . Middle Management 17% . . . . . . . . . . . . . . . . . . . . . sales/Marketing 5% . . . . . . . . . . . . . . . . . . . . . . . . . . . brokers 3% . . . . . . . . . . . . . . . . . . . . . . . . . . . . .other

79%

of readers utilize AZRE Magazine as their primary media source for information on all aspects of commercial real estate .

Circulation: . . . . . . . . . . . . . . . 25,000 Readership: . . . . . . . . . . . . . . . 122,000 64 | May-June 2012 AZRE Stats.indd 1

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VALLEY PARTNERSHIP: PAST CHAIRMEN

2004 2005 2006 2007 2008 2009 2010 2011 66 | May-June 2012

Pete Bolton, CBRE/Grubb & Ellis

“We needed someone well connected with the Legislature and Governor’s Office and were fortunate to get Maria Baier (as President and CEO). She was considered one of the true experts on the subject (of development). We also put together the Cross Association Collaboration, which included Valley Partnership, Bolton NAIOP, ICSC, BOMA and almost every development association.”

Jay Tubbs, Ryan/Monte Vista Consulting

“The biggest accomplishments during my tenure were the growth in our membership, Valley Partnership’s leadership role in the effort to achieve reform at the State Land Department and the continued focus and growth of the annual community project, which I consider one of the most important works of Valley Tubbs Partnership each year.”

Charley Freericks, DMB Associates

“Working closely with State Land Commissioner Mark Winkleman to draft Proposition 106 and staff the lobbying effort. V.P. formed task forces under the county committees, providing prompt review of the proposition.”

Freericks

Keith Ernest, RED Development

“Collaborating with our membership to assist suburban municipalities in their efforts to streamline the development processes. V.P. preserved the practice of allocating sales tax revenues toward infrastructure reimbursement.”

Ernest

Steve Betts, Suncor Development

“Bringing together a coalition of business groups, cities and legislative leaders to pass innovative authority for local economic incentive development agreements with the appropriate protections of public interests.”

Betts

Sean Walters, Sunbelt Holdings

Walters

“The board worked quickly and diligently with CEO Richard Hubbard to cut costs and increase benefits to our partners. We increased our focus on networking and helping unemployed members find jobs with new enterprises. Valley Partnership additionally made adjustments to create a balanced budget for 2010.”

Mark Winkleman, ML Manager

“Valley Partnership’s greatest accomplishment was holding together the primary voice for the real estate community during the toughest economy any of us have ever endured.”

Winkleman

Mindy Korth, CBRE

“Valley Partnership members re-energized the commitment and focus of the organization and then getting the word out about our accomplishments through a thoughtful and branded communication plan.”

Korth

Redefining the Community Builder McCarthy. Our Difference is Building.

速

mccarthy.com

VALLEY PARTNERSHIP: PARTNERS

BY MICHELLE LAUER

Mike Markham Jr.

Markham Contracting

M

ike Markham Jr., vice president and chief operating officer at Markham Contracting, isn’t involved in many trade organizations.

“But I’ve chosen to stay in Valley Partnership because of the value it brings,” Markham says. “It goes beyond just the business connections, it’s about to the community service we do.

That’s why we stay involved — Valley Partnership is moving forward and trying to be influential in the Phoenix area while remembering it’s important to give back to the community.”

The fifth-generation Arizonan established membership with Valley Partnership through the community project committee. Eight years later, he’s still involved with both Valley Partnership and the committee, which manages annual donations to local nonprofits to enhance facilities for children and those in need.

Markham began working in the construction industry in 1995, receiving his bachelor’s degree in construction engineering from Arizona State University in 1999. After several years at another company, he went to work for his father’s business, Markham Contracting, in 2001.

“We’re a family business my father started in 1977, so I grew up around Markham Contracting,” he says. “My dad founded it, and now we’re moving into our second generation — my sister and I are taking over the day-to-day operations, transitioning to the second generation.”

Heidi Kimball

H

Sunbelt Holdings

eidi Kimball, vice president and designated broker at Sunbelt Holdings, exemplifies the American Dream. She started working at the commercial real estate firm in 1982 as the receptionist, and worked her way up through decades of loyalty and dedication.

Kimball became involved with Valley Partnership in 1994, first participating in the state legislation committee. Her first year on the Board of Directors was in 1998, and, after several terms, she served as Valley Partnership president in 2002. Still active in the organization, she foresees Valley Partnership will continue its work as a channel between the public and private sectors.

“I think V.P. will carry on as the single point of contact for parties seeking resolution of a variety of development issues,” she says. “From a public policy standpoints, we provide the resources, the contact to the development community, as well as a bridge to municipalities and government to the citizens through village planning committees and neighborhood associations.”

Kimball, who says she’s proud to see more women entering the construction industry and earning leadership roles, notes that Valley Partnership’s diversity serves in its favor.

“I think Valley Partnership serves a unique role in being able to speak to, really, all sides of an issue by virtue of our diverse membership,” Kimball says. “We can address governmental, citizen and developmental concerns.”

Jeff Chaves

J

Abacus-Abengoa

eff Chaves joined Valley Partnership four years ago because he shares common values with the organization — action and advancement.

“Valley Partnership has a very strong reputation for being the premier advocacy group in the Valley of the Sun, and I wanted to be part of that,” Chaves says.

Chaves spent the first 15 years of his career as a consulting hydrogeologist, and then ventured into business development with civil engineering firm Olsson Associates. After serving as director of business development at Kitchell, he accepted a position at Abacus-Abengoa as market sector leader and where he currently serves in a consulting and advisory capacity. Abacus-Abengoa is an international company applying innovative technology solutions for sustainable development.

The father of four, baseball coach and California native serves as a member of Valley Partnership’s Board of Directors. Chaves was enthusiastic when asked to join the board last year because Valley Partnership’s impact is a tangible, influential force, he says.

“When you look back 25 years ago, when Valley Partnership first started and industry professionals were trying to get an audience with legislators, for example, it was difficult,” Chaves says.

“Now, they come to us. That, as much as anything, is a good indication of the powerful impact of Valley Partnership in the Valley.”

Chaves foresees real estate developers will emphasize sustainability in the future, both economic and environmental. Valley Partnership, he says, will remain a pivotal player in Arizona.

68 | May-June 2012

COMING NOV/DEC 2012 Reflecting back on 25 years of Valley Partnership’s community projects Looking forward to the next 25 years

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VALLEY PARTNERSHIP: PARTNERS Debra Stark

D

City of Phoenix

ebra Stark, planning director for the City of Phoenix, joined Valley Partnership in the mid-1990s when the organization was first forming and establishing professional ties throughout the Valley. She was working for Maricopa County at the time and recalls being pleasantly surprised when Valley Partnership representatives appeared at the county’s Department of Transportation meeting, hoping to collaborate.

“I thought, ‘That’s refreshing!’ ” Stark recalls. “They want to partner with us instead of us writing some legislation or ordinance and then them reacting negatively, and it’s better to partner than continue to fight. The next thing you know, I was drawn into the organization.”

Stark, who earned her master’s in planning from Arizona State, is on the city/county committee. The Wisconsin native says she’s remained loyal to the organization for so many years because of Valley Partnership’s tangible, constructive impact on the Valley.

“Valley Partnership brings a reputation of quality, and I think any Arizonan wants a quality city, so this organization knows how to reach out and promote that level of excellence,” Stark says. “They’re a voice in Arizona; they’re certainly a voice in Maricopa County and Phoenix, and they get involved for the right reasons, and that’s to improve the quality of life.”

Dick Crowley

A

Kitchell

fter graduating from the University of New Haven with a degree in civil engineering, Dick Crowley entered the general contracting industry in 1980. Deciding he found his niche, he stuck with the field. “I’ve been involved in projects in 20 states, including retail, commercial, healthcare, parking structures — a vast array of various projects,” he says.

Crowley has since spent his entire career in commercial construction, both in operational functions and in marketing and development. Crowley is eight years into a flourishing career at Kitchell, an employee-owned construction, real estate and contracting company operating primarily in the Southwest, where he serves as vice president of marketing.

Crowley is also an avid pilot, father to 4-year-old Grace, and a strong believer in sustainable expansion. He joined Valley Partnership two years ago.

“Both Kitchell and myself, personally, have a vested interest in our community, particularly in Maricopa County,” Crowley says. “Valley Partnership really has become the premier advocacy group for real estate development, and as such it has created an opportunity for its members to have unique access to the policy makers that influence development in our community.”

Crowley serves on the sponsorship and events committees, and particularly enjoys Valley Partnership’s Friday breakfasts. “There’s a networking function that people enjoy, but what keeps people coming back is that education component where they learn something.”

Molly Ryan-Carson

Ryan Companies US, Inc.

M

olly Ryan-Carson is a legacy at Ryan Companies US, Inc., a national developer and commercial real estate firm. Her grandfather founded the company in 1938, blazing a trail for a family business that would eventually span three generations.

Ryan-Carson has been with Ryan Companies for 11 years. She served as retail development director for eight years, then earned a promotion to vice president of development in 2010.

She joined Valley Partnership at the recommendation of a colleague two years ago, when the commercial real estate market wasn’t exactly prospering.

“Though the last two years have been no picnic, it’s been very interesting to see Valley Partnership focus to maintain relevance and importance for individuals who are now looking for jobs, thereby strengthening the community,” Ryan-Carson says. “They really put their money where their mouth is, and they work hard to achieve important goals. Both myself and Ryan Companies are certainly active supporters; we believe in V.P.” Ryan-Carson sits on Valley Partnership’s Board of Directors, where she says she’s established relationships and connections that have positively impacted her career. She also serves on the events committee and often frequents the Friday morning breakfasts.

“I remain involved because I feel Valley Partnership is out to make a difference for individuals at every level of commercial real estate and development,” she says.

70 | May-June 2012

COMMUNITY PROJECT

BY MARIA THOMPSON

Extreme Backyard Makeover Valley Partnership's annual community project transforms a Maggie's Place facility

More than 150 Valley Partnership volunteers helped transform the grounds of the Magdalene House into a suitable environment for future moms and their kids.

I

f there is one thing that every house should have it’s a dream backyard.

Even on a rainy November morning, Valley Partnership volunteers came together for their annual community project to bring the potential for an ideal backyard to fruition.

The mission was to refurbish the yard of one of the community facilities for Maggie’s Place, a home for expectant mothers who wish to achieve their goals in a dignified atmosphere.

The only significant feature of the backyard at Magdalene House’s in Phoenix, one of Maggie’s Places, was an old gazebo that was removed as part of the project’s construction. Additionally, there wasn’t much functionality with the lack of grass and a play structure.

The 2011 project brought in more than 150 volunteers — more than last year’s event — with the chance for each helper to contribute. The volunteers could participate in any of the activities: Scraping the ground to level it out for the incoming playground; Filling the removed gazebo space with personalized bricks used from donations; Building a small play area, including equipment for mothers to have meetings while also watching their children; Planting, painting and ornamenting the yard to add decoration.

The new backyard, completed in a day’s work, was a combination of the volunteers’ vision and the residents’ excitement.

Selecting a project each year is a collaborative effort usually by a core group of volunteers on the Valley Partnership project committee.

Project chairperson, Terri Martin-Denning of NAI Horizon, says the group decided on Maggie’s Place because “it fit Valley Partnership’s mission; their needs aligned with our (Valley Partnership) goals.”

Once the project is chosen, a development team is assembled to plan the construction process. The committee members then look

for those with skilled labor to complete the heavy building; removing the worn gazebo was one of those arduous tasks. Finally, the volunteers are recruited and the renovations can commence.

Those behind Maggie’s Place founded the first house on Mother’s Day of 2000 — a suitable day to express gratitude for current and future moms. Magdalene’s House in Phoenix began with five pregnant women in need of a home. It has since expanded to five houses located in Tempe, Glendale and Cleveland, Ohio.

The mission of Maggie’s Place is to: Provide hospitality for pregnant women alone or on the streets; Connect expectant and new mothers to resources involving prenatal care, health insurance and education; Inform and encourage the use of savings programs to prepare mothers for life after Maggie’s Place.

Valley Partnership is the only grass-root organization in Arizona dedicated to promote responsible development. Its commitment was particularly revealed in the restoration of Maggie’s Place and the enthusiasm of both the volunteers and the recipients.

Director of facilities at Maggie’s Place, Dave Kriegl, says they are always looking for outreach from volunteers and organizations. He also says that despite the rain that November day, there was “quite a transformation and a remarkable change” after the volunteers finished the job.

Both Martin-Denning and Kriegl say they believe the expectations of the committee and the women residing in Maggie’s Place were fully met.

Through the laborious work of the volunteers, the residents of the Magdalene House are able to relish in a renewed and kid-friendly backyard, host events and enjoy all the benefits that Maggie’s Place has to offer.

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