Inside Tucson Business 1/11/13 by Territorial Newspapers

A REAL GEM OF A GHOST TOWN Ruby sparkles as authentic Old West PAGE 10

Your Weekly Business Journal for the Tucson Metro Area WWW.INSIDETUCSONBUSINESS.COM • JANUARY 11, 2013 • VOL. 22, NO. 32 • $1

An inside job The costly crimes of employee theft and financial fraud Page 5

Amnesty back on the agenda Immigration reform reconsideration likely by Congress Page 17

A skinny dip

Illustration by Andrew Arthur

Foreclosure notices take a little dive Page 19

‘Enough’: Gabrielle Giffords speaks out against guns By Patrik Jonsson The Christian Science Monitor Former U.S. Rep. Gabrielle Giffords, who was shot in the head during a mass shooting that killed six others Jan. 8, 2011, stepped into the national spotlight on the anniversary of that to offer a one-word opinion about gun violence in this country: “Enough.” The comment was part of an interview that aired on ABC News in which Giffords and her astronaut husband Mark Kelly announced the formation of a group intended to influence the national debate on gun violence and counter the political and financial influence of the National Rifle Association (NRA). The goal, according to the

couple, is to ensure “legislators will no longer have reason to fear the gun lobby.” The national tragedy that played out Dec. 14 at Sandy Hook Elementary School in Newtown, Conn., has shifted the tenor and substance of the debate over the Second Amendment, which guarantees the rights of Americans to own and carry firearms, for the first time in decades. The decision by Giffords, herself a gun owner and a one-time defender of the Second Amendment, shows a sense of urgency in capitalizing on post-Newtown emotions. The Obama administration, too, is trying to move quickly – this week initiating conversations with gunmakers, Hollywood pro-

ducers, gun-crime victims, and gunrights groups about how to proceed. But the efforts risk exposing cracks in a notably fractious gun-control movement. In evidence of improving coordination, Giffords and Kelly traveled both to Newtown to meet with parents and to New York to discuss their plans with Maor Michael Bloomberg before deciding to launch their group, which is called Americans for Responsible Solutions. In the ABC News interview, Kelly says he almost “lost it” when a Newtown parent showed him a picture of one of the slain Sandy Hook first-grade students. “In response to a horrific series of

shootings that has sown terror in our communities, victimized tens of thousands of Americans, and left one of its own bleeding and near death in a Tucson parking lot, Congress has done something quite extraordinary – nothing at all,” Giffords and Kelly wrote in an opinion column in USA Today. Unlike other mass shootings, including the one in Tucson, the Newtown massacre of 20 school children and six staffers appears to have actually changed American opinions on gun rights and gun control. On Dec. 20, a CBS News poll found an 18-point surge in the share of Americans who support more firearms restrictions — a finding supported by a Pew Research poll conducted after the Newtown shootings.

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JANUARY 11, 2013

NEWS

Chambers and industry groups gear up for Legislative session

By Patrick McNamara Inside Tucson Business With the Arizona Legislature set to start a new session next week, business and trade associations and chambers of commerce are gearing up to try persuade lawmakers to address their concerns. Investments in infrastructure, creating a more business-friendly tax policy and improvements to education are common causes among many groups. The region’s largest chamber, the Tucson Metro Chamber, which has 1,350 members, set an agenda that includes improving the equity of the public-school funding formula and continuing to sup-

Phone: (520) 295-4201 Fax: (520) 295-4071 3280 E. Hemisphere Loop, #180 Tucson, AZ 85706-5027 insidetucsonbusiness.com

port the construction of the Union Pacific rail yard project near Picacho that has been under discussion with state leaders for more than five years. “That project is huge,” said Robert Medler, director of government affairs at the Tucson Metro Chamber. The proposed 900-acre rail yard has the potential to create a significant shipping logistics hub for Southern Arizona. It would include about 75 train tracks at the widest point of the switching yard and stretch six miles long and a mile wide. In addition to the boost to the construction sector, the rail switching yard brings the possibility for commercial and industrial expansions and thousands of jobs to

the area. The project has been held up because the land the Union Pacific wants is in a holding of the Arizona State Land Department. State budget cuts in recent years have diminished the Land Department’s staff resources so processes are taking even longer times to complete. There have also been debates over the value of the property. For education, the Metro Chamber wants to support a new model for funding and reinstate full funding for Joint Technical Education Districts (JTEDs), which are coalitions among school district to provide career and technical education. CONTINUED ON PAGE 6

PUBLISHER THOMAS P. LEE tlee@azbiz.com

STAFF WRITER PATRICK MCNAMARA pmcnamara@azbiz.com

RESEARCHER JEANNE BENNETT list@azbiz.com

INSIDE SALES MANAGER MONICA AKYOL makyol@azbiz.com

EDITORIAL DESIGNER DUANE HOLLIS dhollis@azbiz.com

EDITOR DAVID HATFIELD dhatfield@azbiz.com

LEGAL REPORTER CELINDA ARGUE cargue@azbiz.com

ART DIRECTOR ANDREW ARTHUR aarthur@azbiz.com

CARTOONIST WES HARGIS

STAFF WRITER ROGER YOHEM ryohem@azbiz.com

WEB PRODUCER DAVID MENDEZ dmendez@azbiz.com

ADVERTISING DIRECTOR JILL A’HEARN jahearn@azbiz.com

CIRCULATION MANAGER LAURA HORVATH lhorvath@azbiz.com

Inside Tucson Business (ISSN: 1069-5184) is published weekly, 53 times a year, every Monday, for $1 per copy, $50 one year, $85 two years in Pima County; $6 per copy, $52.50 one year, $87.50 two years outside Pima County, by Territorial Newspapers, located at 3280 E. Hemisphere Loop, Suite 180, Tucson, Arizona 85706-5027. (Mailing address: P.O. Box 27087, Tucson, Arizona 85726-7087, telephone: (520) 294-1200.) ©2009 Territorial Newspapers Reproduction or use, without written permission of publisher or editor, for editorial or graphic content prohibited. POSTMASTER: Send address changes to: Inside Tucson Business, P.O. Box 27087, Tucson, AZ 85726-7087.

AAA: Gas prices will be lower throughout 2013 Gasoline prices this year should be lower than they were in 2012 due to increased oil production and lower demand, according to AAA Arizona. In the Tucson region, gas prices have remained steady for the start of the new year, after steadily falling for 14 consecutive weeks. The average price for a gallon of regular this week was $2.86½, up from $2.85 a week ago. Tucson continues to enjoy the lowest average price in the state, according to AAA. “Given market factors, AAA is predicting that prices will remain high this year, but are likely be less expensive than 2012, barring unforeseen events,” said Linda Gorman, director of communications and public affairs for AAA Arizona. Prices are expected to rise steadily through the spring as is typical for this time of year because of seasonal demand increases and refineries’ switch-over to more expensive summer-blend gasoline. Following a late-spring peak, prices should drop during the first half of the summer before rising again in advance of the Gulf Coast hurricane season and the switchover to winter-blend gasoline. Nationally, the annual average price of gasoline in 2012 was the most expensive on record at $3.60 per gallon, but the situation improved at the end of the year and gas prices now are lower than they were a year ago, a trend AAA expects to continue.

Ballot measure seeks to stop medical marijuana An anti-drug group financed by the Arizona Cardinals is organizing to help put a new ballot measure before voters that would rescind Arizona’s medical marijuana law and outlaw dispensaries. Keep AZ Drug Free has endorsed a bill put forward in the Legislature asking voters to repeal the medical marijuana legalization measure that was passed in November 2010. The group says its largest financial contributor has been the Arizona Cardinals football team, which donated $10,000 during the 2010 campaign. The state’s medical marijuana law has faced legal and bureaucratic hurdles from Gov. Jan Brewer, Maricopa County Attorney Bill Montgomery and others who are opposed to it. The first two dispensaries in the Tucson region have opened just within the past few weeks. The new bill (HCR 2003), asks voters to repeal the law effective in 2014.

EDITION INDEX Public Notices Lists Inside Media Profile Calendar Briefs On the Menu

6 7 8 10 12-13 14-15 16

Arts and Culture Finance Real Estate & Construction Biz Buzz Editorial Classifieds

16 18 19 20 20 23

4 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

NEWS Hendricks & Partners, a Phoenix-based multifamily investment banking firm with 38 offices across the U.S. including one in Tucson, has been acquired by a Warren Buffett-backed firm in Pennsylvania for an undisclosed price, according to a company statement Wednesday. The firm was taken over Dec. 31 by Berkadia Commercial Mortgage LLC, a joint venture between Buffett’s Berkshire Hathaway Inc. and Leucadia National Corp. that offers commercial real estate lending and servicing. The acquisition includes all of Hendricks’ offices and more than 180 apartment professionals nationwide, which Berkadia hopes will propel its expansion efforts, the statement said. Although the firm plans to remain headquartered in Phoenix, it is now operating under the name Hendricks-Berkadia, according to the statement. The new structure forms another business unit with apartment real estate advisors alongside Berkadia’s other mortgage lending operations. Don Hendricks, who founded Hendricks & Partners in 1995 and was chairman and CEO, is CEO under the new company structure and an executive vice president with Berkadia. The Hendricks & Partners office in Tucson is at 3567 E. Sunrise Drive, Suite 237. Berkshire Hathaway also owns the Tucson-based real estate firm Long Companies.

Pima County ‘tops off ’ new court complex By Roger Yohem Inside Tucson Business About 125 spectators watched as Sundt Construction ceremoniously “topped off ” Pima County’s new downtown courthouse complex on Monday by raising the last steel beam into place on the seven-story structure, symbolizing completion of the tower’s foundation and framework. Construction now will focus on enclosing the 290,000 square-foot complex at 300 N. Stone Ave. Before the beam was placed 140 feet above ground, members of the Pima County Board of Supervisors, and several court judges and construction workers signed the beam. “Sundt is honored to be constructing the complex. In a time when the Tucson construction industry is in need of work, this project is an excellent example of a public jurisdiction benefitting our local economy,” said senior project director Kurt Wadlington. He added that the county is “maximizing the value received for public funds through historically low construction pricing.” Sundt’s $48 million contract is for the tower’s core and shell. The project will employ about 520 construction workers and use 5.6 million pounds of steel. Work began last February with tenant

Photos courtesy Pima County

Buffett firm acquires Hendricks & Partners

Pima County Administrator Chuck Huckleberry, left, and Sundt project director Kurt Wadlington “sign off” on the building’s last steel beam.

improvements to begin this fall. Occupancy will be in 2015 as the new home for the Pima County Consolidated Justice Court.

“The new courthouse is an important civic contribution to the revitalization of downtown Tucson,” Wadlington said.

Inside Tucson Business on your driveway next Friday For most subscribers of the print version of Inside Tucson Business, this is the final issue you will receive in the mail. The next copy you receive, next Friday, Jan. 18, should land on your driveway early in the morning, along with any other newspapers you receive. If you have not changed your delivery address, you still have time to do so, but do it quickly, says Laura Horvath, circulation manager. Send an email to ciruclation@azbiz.com, put change my address in the subject line and include your mailing address as it appears on the mailing label of this week’s issue, along with the address where you’d like to receive your copies starting next week. Mail delivery via the U.S. Postal Service will remain an option but, unless you’re using a post office box or receive your copies outside the Tucson area, please specifically request that option. You can do that by sending an email to circulation@azbiz.com and put “ITB mail delivery” in the subject line and include the delivery address as it appears on your mailing label this week. Please be aware that due to changes at the U.S. Postal Service, mail deliveries of Inside Tucson Business will be delayed, which is the reason for making the switch to direct home delivery.

The county’s new courthouse is designed to meet LEED (Leadership in Energy and Environmental Design) standards with energy and water-efficient features, and other “green” technology. The final beam (right) was placed 140 feet up on the 7th floor.

Clariﬁcation The Remembering Tucson feature by Mary Levy Peachin that appeared in the Jan. 4 issue made reference to Lee Levitz, widow of furniture store owner Sam Levitz, living with her daughter Kandie Vactor, son-in-law Drew Vactor and his mother Alma Vactor, the subject of the feature. At the time the feature went to press, Inside Tucson Business was unaware that Lee Levitz had died Jan. 1.

InsideTucsonBusiness.com

JANUARY 11, 2013

Financial fraud: the thieves inside your business

This Week’s

By Roger Yohem Inside Tucson Business

All-Stars auditions

Financial fraud starts small. If no one notices, the employee starts to take more. Small businesses get hit harder with fraud and internal theft because they have fewer controls in place. Typically, they aren’t aware of their exposure to fraud and don’t have enough employees to split up the financial duties. That situation creates more high-risk opportunities like theft, embezzlement, skimming, payroll and financial statement fraud, phony billing, misappropriation and the conversion of assets. Some cases will never be discovered due to the variety of schemes, clever employees and weak internal controls. And when fraud is found, it can be hard to identify who did it and exactly what assets are missing. “In today’s business world, yes, there is a bigger proliferation of fraud opportunities. Outside the workplace, there are often drug and alcohol abuse issues that affect people. There is a growing importance of self-celebrity in society. People have greater job expectations and if they don’t receive it, it is easier for them to rationalize theft. It’s called the fraud triangle,” said accountant Phillip Dalrymple, a certified fraud examiner with R&A CPAs, 4542 E. Camp Lowell Drive. “All these factors are part of human nature. For a business, the only thing they can control is the opportunity. How can I limit the fraudster’s opportunities?” he added. “In these economic times, a business can least afford theft and fraud. No company is immune.” In small businesses with fewer than 100 employees, the typical loss from a “discovered” fraud is $140,000, according to the Association of Certified Fraud Examiners. “Undiscovered” fraud/theft losses cost companies about 5 percent of their revenue every year. Most scams run for 18 months before being discovered. About half of victimcompanies recover nothing from the fraudster who often is long gone. As businesses head into tax return season, Dalrymple emphasized the risk of fraud can be reduced in any-sized organization. Prevention and deterrence starts by going beyond the routine auditing of annual financial statements. “The best way to combat fraud risk is to eliminate the opportunity. We advise prevention, to implement mitigating internal controls and create the impression someone is always watching,” he said. For example, no single “do it all” employee should do purchasing and receiving, payroll, make deposits, write checks

“All these factors are part of human nature. For a business, the only thing they can control is the opportunity. How can I limit the fraudster’s opportunities? In these economic times, a business can least afford theft and fraud. No company is immune.” PHILLIP DALRYMPLE

and post cash activity to the accounting system. All cash reconciliations should be reviewed by others. Owners should open bank statements personally before releasing the papers for processing. Anyone with access to financial and “desirable” assets and inventory must pass a strict background check. And “dedicated” employees should be required to take vacation in full-week periods every year. Dalrymple, a member of the Association of Certified Fraud Examiners, noted that several local accounting firms have added the service in recent years. Due to the economy and changing societal standards, “discovering financial fraud is a natural offshoot of doing financial audits. Often, financial statement manipulation is done after the fact of journal entries.” Two of Dalrymple’s more challenging cases involved investigating an Arizona municipality where the mayor was suspected of securing reimbursement for personal expenses. And while conducting a routine audit of an insurance company, he discovered irregularities in their re-insurance procedures. Last year, R&A was involved in four financial fraud cases and currently is working on four others. As needed, the firm investigates to the level needed by the businesses to prosecute. “Sometimes, the long-term employee who is totally trusted is the fraudster,” Dalrymple said.

Contact reporter Roger Yohem at ryohem@azbiz.com or (520) 295-4254.

Breaking the Fraud Triangle In the 1950s, criminologist Donald Cressey coined the term “fraud triangle” to explain why people commit fraud. Under his theory, three factors must exist for someone to commit employee theft or financial fraud: 1. Motive (pressure): The need for money, such as financial pressure from a gambling addiction. 2. Rationalization: The mindset that justifies the fraud, i.e., the company will never miss the money. 3. Opportunity: The business conditions that enable fraud to occur, such as weak or no internal controls, i.e., no one will discover the missing inventory. Breaking the triangle is the key to reducing fraud. When any one factor is removed, the likelihood of fraud declines. Businesses have the most control over “opportunity,” so simply limiting this factor deters fraud. The best prevention is to establish a system of internal financial controls; screen employees who have access to “desirable” assets; and initiate operating procedures that minimize the triangle’s “opportunity” point.

Good News There could be more scouts and other representatives of all 32 NFL teams than the 102 players on the roster for tonight’s Casino Del Sol College All-Star Game as graduating college seniors try-out to move on to the next level of playing football. This is the second year of the game. Last year, 67 out of the 93 players who participated made an NFL roster for training camp. Good tickets are still available, as they say, ranging from $12 to $36. Kickoff is at 7 p.m. at Kino Stadium, 2500 E. Ajo Way.

The Tucson

INSIDER Insights and trends on developing and ongoing Tucson regional business news.

Tucson has less government In an age when plenty of people are calling for less government, Tucsonans can take some solace in one measure that says we’re pretty far down the “too much government” scale. David Miller, director of the Center for Metropolitan Studies at the University of Pittsburgh, in cooperation with Governing magazine has come out with a “metropolitan power diffusion index” that measure both the number of different governments in an area administering common services and each government’s related expenditures. The result is an indicator of how authority is divided within a region. In this case, like golf, a lower score is better. The higher the score means there is more fragmentation. Tucson comes in at 656 out of 942 metro areas with a power diffusion index of 2.56. Compare that to the highest score, 17.97 for the greater Chicago area. Several small cities came in with the lowest score of 1.

Wildcats’ worth Talk about big business. The University of Arizona’s football team is worth $126.8 million. Impressively, that value grew 36 percent from $93.2 million a year ago. Ryan Brewer, an assistant professor of finance and researcher at Indiana UniversityPurdue University Columbus, analyzes the values of college football teams based on expenses, cash-flow, risk and revenues from ticket sales, broadcast rights and royalties. All Pac-12 schools saw sizeable jumps this year due mainly to the conference’s new TV rights deals. Probably not surprisingly, Oregon is tops among Pac-12 schools, valued at $264.6 million, up from $102 million. Arizona ranks seventh in the conference behind Washington, Colorado, USC, Arizona State and Stanford but ahead of UCLA, Utah, Oregon State, California and Washington State.

6 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

LEGISLATIVE SESSION CONTINUED FROM PAGE 3

PUBLIC NOTICES Selected public records of Southern Arizona bankruptcies and liens.

FORECLOSURE NOTICES Tri Pointe Tucson LLC (14.47%), Gregory R. Fretz and Anne B. Fretz (17.86%), William C. Kao and L.S. Kao (5.95%), Dana Denardi (12.97%), Paul F. Ward and Lynn C. Ward (5.95%), John C. Adams (4.46%), Patricia J. Rahn (2.26%), Rita L. Boren (7.86%), Brian D. McNay (22.86%) and Noel Singh and Sandhya Nath (5.36%) 6363, 6365, 6367, 6369, 6373, 6375, 6377, 6411, 6445 and 6451 E. Tanque Verde Road 85715 Tax parcel: 133-16-030E and 133-16-030J Original Principal: $14,600,000.00 Beneficiary: CSFB 2005-C3 Tanque Verde LLC, c/o LNR Partners LLC, Miami Beach, Fla. Auction time and date: 10 a.m. March 26, 2013 Trustee: Jacob A. Maskovich, Bryan Cave LLP, 2 N. Central Ave., Suite 2200, Phoenix PSM Grace LLC and 1749 South 6th Avenue, Tuscon, AZ 85713 also known as 1749 South 6th Avenue, Tucson, AZ 85713 1749 S. Sixth Ave., South Tucson 85713 Tax parcel: 118-18-1800, 118-18-1880, 118-18-1930 and 118-18-1940 Original Principal: $1,122,000.00 Beneficiary: EH National Bank, formerly known as Excel National Bank, Beverly Hills, Calif. Auction time and date: 11:30 a.m. April 2, 2013 Trustee: Robert W. Saxton, c/o SBS Trust Deed Network, 31194 La Baya Drive, #106, Westlake Village, Calif. NSC LLC 200 S. Stratford Drive, Unit 102, and 208 S. Stratford Drive, Unit 103, 85716 Tax parcel: 129-02-4520 and 129-02-4530 Original Principal: $186,600.00 Beneficiary: BOT Real Estate Holdings I LLC Auction time and date: 11 a.m. March 22, 2013 Trustee: Ronald M. Hortwitz, Jaburg & Wilk, 3200 N. Central Ave., Suite 2000, Phoenix VNM Foothills TIC LLC (80%) and DK TIC LLC (20%) 6944 E. Tanque Verde Road 85715 Tax parcel: 133-15-291 Original Principal: $6,225,000.00 Beneficiary: RFH Servicing LLC, Las Vegas Auction time and date: 11:30 a.m. March 27, 2013 Trustee: Security Title Agency Inc. Default Services Division, 3636 N. Central Ave., Third Floor, Phoenix

LIENS Federal tax liens Zytoon LLC, 2744 E. Broadway. Amount owed: $9,076.81. Stormwater Pollution Erosion and Sediment Control Consulting LLC and Howard Myers, 7111 N. Pampa Place. Amount owed: $9,140.41. Shear Performance and Foothills Metro Salon Inc., 8324 N. Rose Marie Lane. Amount owed: $2,539.67. Pallanes Assisted Living Home and Tommy Pallanes, 441 E. 34th St., South Tucson. Amount owed: $17,339.06. J-3 Construction LLC and Jerry M. Burns, 9420 E. Golf Links Road PMB 362. Amount owed: $4,578.83. Sonoran Builders Ltd., PO Box 26443, 85726. Amount owed: $97,563.46. Maven Group LLC and Carolyn Jeanne Kraus, 8682 E. Placita Pueblo Bonito. Amount owed: $4,383.00. Post-Grad Inc., 740 E. Chula Vista Road. Amount owed: $8,591.05. Party Carousel LLC, 903 N. Swan Road. Amount owed: $2,567.65. Cappsco International Corp., 805 S. Park Ave. Amount owed: $194,619.71. Lee Ross Teran Inc., PO Box 327, Sahuarita 85629. Amount owed: $22,134.88. Jade Garden LLC and Che Sam, 3720 W. Ina Road, Marana. Amounts owed: $127,960.70 and $34,858.02. Snelling Temporaries and Banick Inc., 4329 E. Broadway. Amount owed: $309,369.83. Rage Electric LLC and Gilbert Elam, 5534 N. Jusnic Court. Amount owed: $69,192.40. Southern Arizona Credit and Business Services Inc., 426 S. Pemberton Ave. Amount owed: $25,517.23.

State liens (Liens of $1,000 or more ﬁled by the Arizona Department of Revenue or Arizona Department of Economic Security.) VIP Printing & Promotions, PO Box 22133, 85734. Amount owed: $19,034.97.

NEWS

State lawmakers were criticized over vides the majority of HURF revenue. Medler said funding of JTED has been The state has charged the same 18-cent a concern for the chamber because of the the past several years for enacting changes program’s past successes. A 2010 report by to the HURF distribution formula, giving a per-gallon tax on gasoline since the 1990s. “I think it’s something that should be the Arizona Department of Education not- larger portion of the vehicle licensing and ed that statewide JTED students have a 95 gas tax funds to support the Department discussed,” Gaanderse said. He noted that the cost of construction percent graduation rate, compared to less of Public Safety (DPS). Cities, towns and county governments received a smaller material, which is closely tied to the price than 70 percent for non-JTED students. of petroleum, has increased. During the 2011 legislative session, share and therefore less money. “There’s a larger issue here than people TUCA president and CEO Ramon lawmakers cut funding for JTED. The cuts realize,” he said, conended funding for freshnecting the issue of man students in JTED HURF funding to the programs. poor condition of roads “Not every JTED in in the Tucson region. the state is the same, Gaanderse does and ours has been very not excuse local leadsuccessful,” Medler ers for their roles in the said. dilapidated conditions The Tucson Hispanic of streets, saying local Chamber of Commerce governments have nelists increasing trade glected infrastructure with Mexico and retainand deferred mainteing existing businesses nance for many years. and attracting new ones The Southern Arias a priority for the 2013 zona Home Builders Legislative session. Association (SAHBA) To those ends, the hasn’t finalized a speHispanic Chamber supcific list of legislative ports changes to tax Some of the issues business and industry groups in the Tucson region will priorities for the sespolicy that would help be following in this session of the state Legislature include: sion, but president and increase revenue, acArizona Technology Council CEO David Godlewski cording to the group’s • Enhance the existing Refundable Research and Development Tax said the group plans Legislative Principles Credit by increasing the cap to $15 million from $5 million to pay close attention for 2013. • Create a state-supported Arizona Investment Fund for investment to potential changes “We’re always lookin early- and growth-stage technology companies. Greater Oro Valley to transaction priviing at the tax burden on Chamber of Commerce lege taxes that Gov. Jan businesses,” chamber • Accelerate pace of statewide highway and other road construction Brewer has explored president and CEO Lea • Support restoration of Highway User Revenue Fund (HURF) funding through the TransacMárquez Peterson said. to roadway projects tion Privilege Tax Sim“It’s tough to balance • Fund the state’s Medicaid program, the Arizona Health Care Cost plification Task Force. the burden on business Containment System (AHCCCS), to maximize the number of insured and In particular, with the needs of the increase fiscal responsibility Godlewski said the state.” • Support an equitable system of education funding group has followed poOn increasing trade • Streamline permitting processes tential changes to state between Arizona and and local taxes on conMexico, Márquez PeTucson Hispanic Chamber of Commerce tracting activity. terson said the group • Increase trade opportunities with Mexico “It would be a more hopes the incoming • Improve educational standards simplified for of taxaLegislature stays away • Invest in improvements to infrastructure vital to job creation tion,” Godlewski said. from controversial im• Support policies that reduce government regulation of business State and local govmigration issues, which ernments don’t impose she said have in the Tucson Metro Chamber a standard point-of-sale past been hurtful to the • Construction of the proposed Union Pacific railroad switching yard tax on contracting acstate’s economy. near Picacho tivity, instead taxes are “We think going • Restore road repair money to HURF set on a formula based down the immigration • Support efforts to attract the F-35A Joint Strike Fighter on 65 percent value of path would not help • Support tax incentives for the film industry the construction activArizona,” Márquez Pe• Encourage more trade with Mexico ity. The construction terson said. “I think our Tucson Utility Contractors Association trades have argued this state has learned from • Change the HURF funding formula creates a confusing sitthis.” • Support new penalties for metal theft uation for business. The group also wants Godlewski also said, to see greater investdespite the changes ments in job training Gaanderse said the group wants to see in the Legislature the November election and workforce development. Another industry group, the Tucson the formula revert back to favor pavement brought, he thought the climate at the CapUtility Contractors Association (TUCA), maintenance efforts. Or, Gaanderse said, itol would remain business friendly. “We have had for the past few years a lists a re-evaluation of the Highway User perhaps the state should consider funding Legislature that is pro-homebuilder,” he Revenue Fund (HURF) allocation formula DPS from different sources. “That way DPS can still get its share,” he said. “I don’t think that will change much.” among its legislative priorities for 2013. HURF money is used by local govern- said. Contact reporter Patrick McNamara He said the group also would like to see ments to maintain transportation infrathe Legislature look at the gas tax that pro- at pmcnamra@azbiz.com or (520) 295-4259. structure.

LEGISLATIVE AGENDAS >>

InsideTucsonBusiness.com

JANUARY 11, 2013

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8 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

MEDIA

Prediction: Broadcaster vs. cable company will rerun By David Hatfield Inside Tucson Business If you thought that was just a skirmish this month that took KOLD 13 programming off Cox Cable for most of four days, a top-ranking executive says his major network is losing about $1 billion in operating cash flow largely due its failure to get the kind of money from cable and satellite companies that its competitors are getting. More to the point, that top-ranking executive is Stephen B. Burke, CEO and president of NBCUniversal, who it just so happens also holds the title of executive vice president of the network’s majority owner, Comcast. For 12 years before Comcast acquired its majority interest in NBC at the beginning of 2010, Burke had fought the fees that come as part of retransmission consent agreements between broadcasters and cable and satellite operators. The fees, which he said generally range from about 25 cents to 75 cents per month per subscriber, add up to some big money. News Corp., owner of the Fox network, bugeted $308 million in revenue from that source in 2012. Fox has been especially aggressive in requiring its affiliates to get its re-

transmission consent fees up, targeting $1 per month per subscriber. CBS has projected that by 2016 it will take in $1 billion in both retransmission consent fees for its own TV stations as well as a cut of the money its affiliates will get. Therein lies the rub that resulted in the standoff between Cox Communications and Raycom Media that resulted in KOLD 13 programming being off Cox’s Southern Arizona cable system from midnight Jan. 1 until about 8:30 p.m. Jan. 4. Since the negotiations are confidential — especially in this case since both Cox and Raycom are privately held companies — nobody knows for certain what the negotiations entailed, much less what’s in the settlement agreement. By most accounts, my estimate in last week’s column was probably on the high side. Several who are familiar with similar negotiations say Raycom was probably seeking an increase from about 20 cents per month per subscriber to about 70 cents. While public statements from Cox indicated a major sticking point was the percentage of increase — initially the cable company said Raycom wanted a 250 percent increase — other broadcasters note that the previous

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volved only five markets: Tucson; Cleveland; Panama City Fla.; Baton Rouge and Lake Charles, La.; and Richmond, Va. Until now, most negotiations never got to the stage of an impasse. On the other hand, 2012 was a particularly rugged year for public clashes with station blackouts taking place in several markets including Boston, Albany and Syracuse, N.Y.; and Harrisburg, Pa. One that was particularly rancorous happened in Corpus Christi, Texas, where a station owned by Cordillera Communications, the same company that owns KVOA 4, was taken off the Time Warner Cable system for five months last year, a period of time that included the Super Bowl. Time Warner organized Super Bowl viewing parties at local bars and restaurants that had access to the NBC-affiliate’s programming via DirecTV. Time Warner also gave away 22,000 antennas to subscribers so they could get the station over the air. While it’s unknown when or where the next fight will break out, it will happen as broadcasters face increasing pressure from their networks to secure payments from cable and satellite operators who will push back in their efforts to try to control costs against the growing trend of “cord cutting” — subscribers leaving their systems for other entertainment sources, including the Internet.

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237. Inside Tucson Media appears weekly.

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agreement was five years old, two years older than the typical time frame for such agreements. Raycom also noted the rate it was asking was something other cable and satellite companies, including Comcast, DirecTV and Dish Network, had already agreed to pay. Broadcasters estimate about 109,000 households in Southern Arizona are served by Cox. At 20 cents per household, that’s $21,800 per month in revenue to KOLD. A rate of 70 cents per household jumps that to $76,300 per month. Most likely both sides compromised. When negotiations reach the point that a station is removed from a cable line-up, the initial loss goes to the broadcaster who loses access to viewers but as time goes on the balance switches as frustrated cable subscribers go elsewhere, according to Dave Joseph, a former Tucson broadcast executive who has worked as a consultant negotiating retransmission agreements in other markets. For Cox customers wondering how much the deal will mean to them in terms of higher monthly fees, broadcasters note that Raycom says it had already negotiated the same rate with other distribution companies so Cox’s fees should be commensurate with what the others are charging. The bigger unknown for viewers is where the next skirmish may crop up. That’s difficult to say. Each broadcast company and each cable and satellite company negotiate their retransmission agreements individually. This time it just happened to be Raycom and Cox. Between the two of them, it in-

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JANUARY 11, 2013

INSIDE TRAVEL TOURISM IN TUCSON

Sports tourism is a driving market for Oro Valley Tourism itself is a $2 billion industry for the Tucson region. To reap the potential benefits of such a powerful industry, the Town of Oro Valley has been partnering with the Metropolitan Tucson Convention and Visitors Bureau (MTCVB) for the past 10 years. The MTCVB provides a comprehensive sales promotion and advertising program to attract an increasing number of convention delegates and vacationing tourists to the town. The efforts provide revenue to the community through transient rental and sales taxes, and contributing to the overall economic growth and continued viability of the tourism and hospitality industry, one component of which is sports tourism. Sports tourism is currently part of Oro Valley’s Community Economic Development Strategy. The town’s partnership with MTCVB is one that is built on trust and expectations. Over the years the MTCVB has successfully attracted national competitions to Oro Valley, including the IronKids National Triathlon Series and the USA Triathlon Duathlon National Championship. Events like these result in a positive economic impact for Oro Valley for many reasons — simply put, because the athletes and their companions are traveling to our community, staying in our hotels, dining in our restaurants and shopping in our stores. Oro Valley does not have a local property tax and relies heavily on local sales and bed taxes, most of which are generated by visitors. Sports tourism began nine years ago in Oro Valley with the Arizona Distance Classic Half Gold Marathon, back then, a community event that has since grown into a world class event. The Arizona Distance Classic is, arguably, the fastest growing distance race in the world, representing 45 states and five countries. Over 2,200 athletes participate and it has an estimated economic impact of $491,588. In April 2011, the IronKids National Triathlon attracted 900 participants and generated an estimated economic impact of $286,000. The USA Triathlon - Duathlon National Championship, entering its third year in Oro Valley, attracts 1,800 athletes and generates an estimated economic impact of $477,270. To continue the momentum created by these high caliber endurance events, the Town of Oro Valley has invested in its own resources to capture additional opportunities for sports tourism.

In 2012, the town council approved $5 million in capital improvements to transform the municipal pool at James D. Kriegh Park, 23 W. Calle Concordia, into AMANDA JACOBS one of Southern Arizona’s premier, competition-level facilities. The new aquatic center includes a 50-meter pool, a splash pad, water slide, four diving boards, a six-lane 25-yard lap pool, shaded bleachers, classroom space and a concession area. Phase I, completed in September 2012, is open for lap swimming. Phase II is scheduled for completion in March. Because of this new development, the town has already attracted a number of events, including the Arizona Eight & Under State Championship Meet, bringing 250 youth swimmers and their families to the area; and the 2014 U.S. National Synchronized Swimming Championships, that will bring 560 athletes with the potential to generate around $429,000 in estimated economic impact. Not bad for a facility that isn’t officially open yet. The Town of Oro Valley recently unveiled a new brand identity that includes the tagline, “It’s in our nature.” With miles of multi-use trails, open space, parks, an archery range and a new premier aquatic center, Oro Valley is positioned to be a destination of choice, not only for tourists, but for athletes as well. In this new year, through innovative partnerships with organizations such as the one with the MTCVB, we will continue to expand on our existing resources, develop new programs, attract new events and lure visitors. It’s in our nature.

Contact Amanda Jacobs, economic development manager for the Town of Oro Valley, at ajacobs@orovalleyaz.gov or for more information about Oro Valley, visit http://orovalleyaz.gov. This monthly column is prepared by the Metropolitan Tucson Convention and Visitors Bureau.

We confidently attack the market with bold, precise strokes. Because we know the terrain and we understand what you want. Resolute, tenacious, decisive, and when called for, daring. Some call it “nerve.” We call it “success.” You will too. CORPORATE REAL ESTATE SERVICES 3709 N. Campbell Ave, Suite 201 | Tucson, AZ 85719 | 520.881.8180 | FAX 520.881.5844 Contact us at 1.800.831.4090 or at www.cotlow.com | Dean P. Cotlow Cotlow@cotlow.com

10 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

PROFILE

Ruby: A real honest-to-goodness ghost town

Lee Allen

By Lee Allen Inside Tucson Business Pull off to the side of the road and you can almost hear Ray Charles in the background crooning, “Ruby, you’re like a dream...” Once a gem in Southern Arizona’s mining town showcase, the town of Ruby lost its sparkle in 1940 when, after taking out $7 million worth of lead, zinc, silver and copper ore, the mine at the foot of Montana Peak was closed. Within a year the entire town was abandoned. Now a ghost town, Ruby is back in action — part-time anyway — ready to entertain adventurous souls willing to brave an often bumpy ride to explore a bit of history. Founded as Montana Camp, a mining camp sometime a few years before 1880, the town was named by Julius Andrews, who owned the general store and established the post office in 1912, naming it after his wife. The population peaked at about 1,200 in the 1930s. Today, Ruby is a shell of its former self recognized by the National BIZ FACTS Registry of Historic Places. Ruby What you see has been there Visitors are welcomed during for decades, daylight hours Thursdays through though victimSundays. ized by the Admission is $12, which goes to the weather. Still Ruby Mines Restoration Project available for (520) 744 4471 sight-seeing and shooting To get there: From Tucson take Interstate snapshots are a 19 south to Exit 48, go west about 23 number of aging miles to the town of Arivaca, turn left structures, (south) on Fifth Avenue which becomes including a 1916 Fragutta for two miles before a split in the schoolhouse, road, veer to the left for Ruby Road and, Some of the aged and dilapidated buildings that still stand in Southern Arizona ghost town Ruby. what used to be after about 12 miles of “winding mounowners about creating a Ruby historical site an unprotected victim of decades of sun iisolation doesn’t bother a mercantile tain” and dirt road, will take you to Ruby. by restoring the old mining location and and rain. There are weathered timbers, me,” he says. m where two Return via the same route, or if you have turning it into a collection of museums.” crumbling adobe, rusted tools and mine Thistle took over from double murders a high-clearance vehicle continue on Ruby One of the owners of the acreage, shafts with vertical drops of 750 feet — now Sundog, aka Perro del Sol, S took place in Road south through Coronado National Howard Frederick, says plans aren’t quite a pony-tailed refugee from home to thousands of Mexican Freetail the early 1920s, Forest land on a 28 mile-route that will that grandiose. bats that appear nightly. tthe 1960s who formerly an old bunktake you by Pena Blanca Lake and back to “The buildings have taken a lot of wear Ruby has retained its wild and rustic handled visitation details h house for I-19, Exit 12. and tear and the goal of our restoration elements and visitors are cautioned: “If you see ffrom collecting entry fees miners, a scale efforts is to maintain those that are wild animals like bats, bobcats, and skunks, tto providing a map and that weighed salvageable, but it’s a never-ending battle,” leave them alone. There are rattlers. They are narrative about the ore trucks on Frederick said. “Last year we established a residents. Please let them pass unharmed.” property and its past. the way to the smelter, remnants of a 1936 non-profit Ruby Mines Restoration Project Although there are roads, Ruby is best Spartan doesn’t begin to describe the jailhouse and a two-hole outhouse of to stabilize the buildings, develop a habitat appreciated walking through the town. lifestyle living in a tin-roofed clapboard undetermined age. restoration plan and continue documentTallia Pfrimmer Cahoon grew up in what building without electricity or running water. Vehicles are generally parked to minimize ing the mining operation’s history.” noise and dust. All-terrain vehicles are not is now a nearly 100-year-old house that still As if to allay fear over the lack of amenities, For now, the town stands as it did more allowed. There are picnic areas with fire Sundog noted to Thistle, “We have two stands. Co-author of the book “Ruby, than 100 years ago. pits near two small lakes where catch-andwell-kept outhouses on the property.” Arizona: Mining, Mayhem, and Murder,” “The value of Ruby is what it is historirelease fishing for bass, catfish and bluegill Sundog is gone, but the outhouses Cahoon refers to her former childhood cally, environmentally, and aesthetically,” is permitted. The lakes, former reservoirs remain as do other vestiges of the Montana home as “truly a gem of a ghost town.” says Frederick. “Part of the town’s attracfor mining operations, also act as swimMine that produced more lead and zinc The sign “RUBY: Population 1” is no tion is its remoteness and rustic beauty. ming holes on really hot days. than any other mine in Arizona. joke. The lone townsman is now caretaker Ruby has changed little since the mine “The future of Ruby is anything but Those who venture to Ruby shouldn’t Michael Thistle, an adventurer and closed and that’s the charm and allure. The certain,” writes author Cahoon. “Over the expect a “touristy”-type ghost town. Little herbalist who enjoys a silence that is way it is now is the way it was then.” years, there has been talk among the has been done to alter the original setting, seldom broken. “It’s peaceful here. The

InsideTucsonBusiness.com

JANUARY 11, 2013

SMALL BUSINESS SMALL BUSINESS

What small business can expect from the Legislature this year Certainty is good. Fortunately, we enter Arizona’s 2013 Legislative session with answers to a number of critical questions that we had at this time a year ago. Will Arizona have a state-run healthcare exchange if the Affordable Care Act is not repealed? Will our state’s economy continue to improve? Will the balance of power in our Legislature remain far to the right or will it shift more to the center? We now have the answers to those questions and with them have a better idea of what confronts us and what we have to work with.

Education reform Kindergarten-through-12th grade, state-run universities and community colleges have all felt the the effects of the economic downturn with significant cuts in recent years. Proposition 204 on the November 2012 ballot was intended to solve the funding woes and provide a dedicated and permanent source of revenue to fund education in our state. But the proposition’s failure brings education funding back to the drawing board. Most will agree the Legislature must find a way to increase funding for education, so expect this to be among the top issues this year. Also, expect to see education funding related bills introduced and promoted as workforce and economic development related.

Healthcare in Arizona Access to and the cost of quality healthcare in the state is an increasing expense that impacts the bottom line of Arizona businesses. Prospective businesses can also measure in real dollars how Arizona stacks up against other states when determining the cost of doing business. Healthcare in Arizona was already a big and complex issue prior to the passage of the Affordable Care Act, or Obamacare. Now Arizonans must also get ready to navigating through a new health exchange that will be run by the federal government. Expect to see efforts to block a federally run exchange by advocates for local control.

Taxes Simplification of Arizona’s complicated tax system will continue to be a top issue as momentum has increased after two years

of significant progress. Recent tax reforms have reduced the burden on capital gains tax, corporate income tax and the assessment of business equipJERRY BUSTAMANTE ment and property. A significant burden that remains concerns the the administrative hassles facing Arizona businesses to comply with the state’s complex tax system. Compliance represents a real cost to Arizona businesses and, along with the state’s current tax rates, it’s a major factor in our ability to be competitive in attracting new businesses to Arizona and encouraging existing businesses to stay and expand. Expect the Legislature to begin to adopt recommendations recently proposed by Gov. Jan Brewer’s Transaction Privilege Tax Simplification Task Force.

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State budget With a temporary 1-cent sales tax scheduled to end on June 1, expect the state budget to once again be an issue widely discussed and debated. Since the state expects an increase in revenues of more than 5 percent this year, state-run programs that were cut or reduced significantly will resurface and be promoted as priorities. The relentless pressure to expand Arizona’s tax base by taxing services will continue and vigilance by those who oppose it will remain as strong as ever. While Republicans’ control of the Legislature remains after last year’s elections, the margins are slimmer as Democrats picked up seats. Overall, expect the Legislature to shift a bit to the center with lawmakers becoming more cooperative across party lines in order to get things done. Jerry Bustamante is senior vice president of public policy and oversees the Southern Arizona office of the Arizona Small Business Association, 4811 E. Grant Road, Suite 262, in Crossroads Festival, (520) 327-0222.

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12 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

CALENDAR SPECIAL EVENTS

City of Tucson Retail Tax Workshop Tuesday (Jan. 22) and Tuesday (Jan. 29) 10:30 a.m. to noon Martha Cooper Library 1377 N. Catalina Ave. Local businesses are invited to learn more on license requirements and reporting privilege (sales) and other taxes at a free open house. Workshop outlines city business license requirements and reporting privilege/use taxes Contact: Yvonne TaxpayerEducation@tucsonaz.gov (520) 791-4681 www.tucsonaz.gov/ﬁnance

Maximize Your Direct Mail Muscle: Links into Lists, Leads and More Tuesday (Feb. 12) 11:30 a.m. to 12:30 p.m. The Tucson Metro Chamber 465 W. St. Mary’s Road A Business Growth Series Workshop presented by Tom Farmer of the Pima County Public Library and Dawn Vandaveer of Prototypes. Contact: Shirley Wilka swilka@tucsonchamber.org (520) 792-2250 ext. 132 $10/person; nonmembers: $20/person tucsonchamber.org

Building a Diverse and Vibrant Community Award Dinner Saturday (Feb. 9) 6:15 to 9 p.m. Westin La Paloma Resort & Spa 2800 E. Sunrise Drive Contact: Naomi Weiner director@aifltucson. org 520.322.9544 www.aifltucson.org Proceeds from this dinner event will benefit the Arizona Israel Friendship League

11:30 a.m. to 1 p.m. Tucson Country Club, 2950 N. Camino Principal RSVP: Kevin Wood (520) 260-3123

REGULAR MEETINGS

Casas Adobes Rotary Club Every Wednesday 7 to 8 a.m. La Paloma Country Club, 3660 E. Sunrise Drive Information: www. casasadobesrotary.org

BNI Professional Partners Chapter Business Network International Every Wednesday

Catalina Tucson Rotary Weekly meeting of the Catalina Tucson Rotary Club Every Friday noon Viscount Suites Hotel 4855 E. Broadway Info: Steve Pender steve@ familylegacyvideo.com or (520) 745-6500 Cost: $20 www.catalinarotary.org

Business Principals of Tucson First and third Thursdays 7 to 8 a.m. The Hungry Fox, 4637 E. Broadway RSVP: Steve Dunlap at (520) 622-0554

Cienega Rotary Club Every Tuesday 5 to 6:15 p.m. Del Lago Golf Club 14155 E. via Rancho Del Lago Information: http:// cienegarotary.org

Connections Monthly contacts luncheon First and third Wednesdays 11:30 a.m. to 1 p.m. McMahon’s Prime Steakhouse 2659 N. Swan Road RSVP: Cindy Morgan at (520) 403-8798 or morgansautoshop@aol.com Cost: $16 includes lunch Conquistador Toastmasters Every Wednesday 7 to 8:30 p.m. ASBA conference center 4811 E. Grant Road, Suite 261 Contact: Saul Silven at (520) 885-3497 RSVP: requested for guests Cost: guests free

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Foothills Optimist Club First and third Wednesdays, noon Macayo’s Restaurant 7360 N. Oracle Road Info and RSVP: (520) 744-5927 Foothills Rotary Club First and Third Fridays Noon Michelaneglo’s 420 W. Magee Road Lunch Optional Info: (520) 909-9375 The Foothills Club of Tucson Second Friday 12:30 to 2:30pm Hacienda Del Sol 5501 N. Hacienda Del Sol Rd Contact: Leslie Hargrove (520) 445-9237 www.foothillscluboftucson.com Fountain Flyers Toastmasters Every Tuesday 6:30 a.m. Coco’s Restaurant 7250 N. Oracle Road Information: Cheryl at (520) 730-4456 Cost: Free to visit Got a business challenge, 30 minutes & 20 bucks? Every Tuesday and Thursday 8 to 9 a.m. Savaya Coffee Market 5530 E Broadway Ste.174 Info: Dale Bruder, Dynamic Strategist strategy@dalebruder.com (520) 331-1956 www.dalebruder.com $20 Group Referral Organization networking group First and third Wednesdays Luna Bella 2990 N. Swan Road Suite 145 Information: www.grotucson.com GRO II Second and fourth Thursdays Sam Hughes Championship Dining 446 N. Campbell Ave. Suite 150 Info: www.grotucson.com

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Society fo rH

Tucson ter

Financial Workshops for Women Every Tuesday at 6 p.m. Barca Financial Group 5470 E. Speedway Suite A106 Information: www.barcaﬁnancial.com

Company Nominees

INNO VATIO N t LEA

Innovation in the Workplace Individual Nominees

Air System Components Arete Associates Arizona’s Children Association BE Aerospace Carondelet Health Network Casa de los Ninos Community Partnership of Southern Arizona Cox HTG Molecular LazyDays Mindplay Paragon Space Development Corporation Safari Club International Sierra Southwest Cooperative simpleview SOLON Southwest Gas Corporation Syncardia Town of Oro Valley Tucson Airport Authority Tucson Electric Power Company Universal Avionics Vante

Announces

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Entrepreneurial Mothers Association Monthly luncheon First Thursday 11:30 a.m. to 1 p.m. Old Pueblo Grill 60 N. Alvernon Way Information: Sherry Goncharsky, sherry@ tucsoncomputerskills.com

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Desert Stars Toastmasters Every Tuesday, noon U of A Science & Tech Park Building 9040, Room 2216 Contact: Jim Eng (520) 663-9118 or jim_eng@juno.com Information: www.Desertstars.freetoasthost.com

JANUARY 11, 2013

Celebrating Innovation in the Workplace Event

Andrea Lightfoot Aric Meares Bernard Stickell Bonnie Mattes Chris Dominiak David Dowling Diane Marie Landsinger Elaine Jackson Garrett Kowalewski Gladys Nasser Greg Flatt Hannah Lozon Hilda Slanina Ida Alexandrino Jenny Coomler Tuesday, March 12, 2013 Jill O’Rourke 2:00-5:00 pm Joy Hall Kate Goldman 5:00 pm Champagne Toast Kevin Krieger Double Tree Hotel at Reid Park Lily McCarthy 445 S. Alvernon Way, Lisa Raines Lori Prince Tucson, Arizona 85710 Lupita Chavez Lynn Cosgrove Mary Keysor Pam Summers Rosemary Smith Sandra Abbey Sandra Lueders Stephanie Pella Tim White

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COMMUNITY

14 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

BRIEFS GET ON THE LIST

Next up: Public school districts, Private elementary and secondary schools, Charter schools

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Charvoz & Fortino PLLC

to our team!

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The 2013 Book of Lists will be published Jan. 25. Inside Tucson Business is now gathering data for the 2014 edition. Upcoming lists are: â&#x20AC;˘ Jan. 18: Advertising agencies, Public relations firms, Graphic design firms â&#x20AC;˘ Feb. 1: Public school districts, Private elementary schools, Private secondary schools, Charter schools â&#x20AC;˘ Feb. 8: Colleges and universities, Specialty and training schools, Child care providers â&#x20AC;˘ Feb. 15: Commercial real estate brokers, Commercial building contractors, Commercial real estate managers â&#x20AC;˘ Feb. 22: Commercial photographers and Video production companies If your business fits one of these categories, update your profile now. Go to www. InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page. New and unlisted businesses can create a profile by following the directions. The Book of Lists is a year-round reference for thousands of businesses and individuals.

ECONOMIC DEVELOPMENT

The University of Arizona projects get recognition

Have you seen these people?

Or maybe these people?

Territorial Newspapers, the publishers of Inside Tucson Business needs your help! Our award-winning business journal is seeking a dynamic sales professional that is committed to driving new business and servicing existing clients. t *G ZPV BSF TPNFPOF XIP JT TFMG NPUJWBUFE BOE IJHI FOFSHZ XJUI B DPNQFUJUJWF ESJWF UP BDIJFWF BOE TVDDFFE XF E MJLF UP IFBS GSPN ZPV t 5IJT QPTJUJPO JT BO PVUTJEF TBMFT QPTJUJPO BOE SFRVJSFT B WBMJE ESJWFS T MJDFOTF BOE B HPPE ESJWJOH SFDPSE t 5FSSJUPSJBM /FXTQBQFST PĂ˛FST DPNQFUJUJWF QBZ BOE B DPNQSFIFOTJWF CFOFĂśUT QBDLBHF JODMVEJOH L

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The University of Arizona has received national recognition from the International Economic Development Council (IEDC) for two economic development projects that have had a significant impact on the Tucson region. The Bridges/UA Bio Park was recognized as one of the top economic development projects in the United States during 2012. The project earned a silver award for PublicPrivate Partnerships. The project was recognized as an outstanding and innovative development that has significantly enhanced the economic revitalization of a distressed communities, state or region. The Bridges is a master-planned, 350acre mixed-use development at Campbell Avenue and 36th Street. It is a partnership of the University of Arizona, 5151 LLC (Lennar Homes and KB Home) and Retail West/Eastbourne Investments. The Bridges is anchored by the UAâ&#x20AC;&#x2122;s 65 acre bio park which is being developed and managed by the UA Office of University Research Parks. The Bridges is bringing much needed retail and residential development to Tucsonâ&#x20AC;&#x2122;s central city. It is home to two large retailers with several smaller retail pads under development. The UA Bio Park is being developed as a site for high technology companies, especially those in the fields of biosciences, life sciences and health care. The park will include commercial facili-

ties, a science high school hotel and conference center and multi-family housing.

INTERNATIONAL TRADE

Arizona exports are up but not back to pre-recession Arizona exports for the first three quarters of 2012 were up 4 percent compared with the same period for 2011, but are still not back to pre-recession levels and are lagging trade numbers nationally and for some other Western states. Arizona businesses exported more than $13.8 billion worth of goods during the first nine months of this year, according to the U.S. Department of Commerce. Thatâ&#x20AC;&#x2122;s up from roughly $13.2 billion during the same time frame last year for growth of 4 percent. But Arizonaâ&#x20AC;&#x2122;s outgoing trade has not yet recovered from the recession. The state had close to $15 billion in exports during the first three quarters of 2008, according to the Commerce Department figures. State exports of semiconductors and computers are still down. Computer chips and electronics components account for 27 percent of Arizonaâ&#x20AC;&#x2122;s outgoing foreign trade and are the stateâ&#x20AC;&#x2122;s largest export. For the first nine months of 2012, the state exported $3.7 billion worth of semiconductors and other computer parts and electronics components. That is down from $3.8 billion for the first three quarters of 2011 and $5.2 billion from the same time frame in 2008. Arizonaâ&#x20AC;&#x2122;s 2012 trade with Mexico has rebounded to 2008 levels. Exporters sent $4.7 billion worth of goods to Mexico during the first nine months of 2012. That compares with $4.3 billion worth of exports to Mexico from Arizona in 2008. But trade with some other markets, including Europe, Singapore and Canada, are still not back to pre-slowdown levels.

REAL ESTATE/LAND

Campbell Plaza center sells for $32.3 million An affiliate of Holualoa Companies has sold the 190,000 square-foot Campbell Plaza for $32.3 million. The center at northeast corner of Campbell Avenue and East Glenn Street was acquired by the company in 1998 and has since been redeveloped. It is currently anchored by an Albertsons grocery store and includes Staples office supply, Ross Dress For Less, Ace Hardware, Panda Express, T-Mobile, Old Chicago restaurant, Five Guys Burgers and Fries, Sauce Pizza and Wine and others. Mike Perlman, senior vice president of Holualoa Companies, oversaw the redevelopment of the property to bring the mix of national retailers to the center. The redevelopment of the plaza â&#x20AC;&#x153;significantly added to the assetâ&#x20AC;&#x2122;s value,â&#x20AC;? said Nancy McClure, CBRE vice president and the

InsideTucsonBusiness.com

JANUARY 11, 2013

BRIEFS plaza’s leasing agent since 2006. The buyer was Krausz Puente LLC and Krausz RC Properties One LLC, Irvine, Calif. The seller was Camelback Corporate Center Joint Venture LLC, a company controlled by Holualoa Companies, 3573 E. Sunrise Drive. McClure and Mike Sandahl in CBRE’s Tucson office, along with Bob Young in CBRE’s Phoenix office, represented the seller. Campbell Plaza was built in 1960.

overseeing utilities and corporation filings. Separately on Monday, Jodi Jerich started her new duties as executive director overseeing the day-to-day operations of the ACC’s divisions, including utilities, securities, corporations and hearings. For the past three years Jerich was the director of the Residential Utility Consumer Office (RUCO), which represents residential utility ratepayers in cases before the ACC.

Realtypin.com ranks Tucson high for 2013

EDUCATION/RESEARCH

The New York City based home listing service Realtypin.com has named Tucson as one of its top five locations to live for 2013. The company produced the list by evaluating the median listing prices, average number of days on the market, inventory, home value stability and the local unemployment rate in a number of communities. Here’s what Realtypin.com had to say about Tucson, which it ranked No. 2: “If you’re looking for a fix-it-up house flipping project, Tucson is the place to buy.” The company notes the high percentage of foreclosures, low median sale price and low unemployment rate in Tucson. “After all, government and military jobs are often unaffected by the economy, so Tucson has a lower unemployment rate than the rest of the country,” the Realtypin. com top five notes. The company ranked Dallas/Fort Worth as the No. 1 market for 2013. Grand Rapids, Mich., was No. 3; Austin, Texas, No. 4; and Phoenix No. 5.

GOVERNMENT

Melvin agrees to sponsor film incentive bill The Tucson Film Office says state Sen. Al Melvin, R-Tucson, has agreed to sponsor legislation this session for an incentive for the film industry in Arizona. The heart of the proposed incentive would likely be a rebate that film production companies could apply to receive once they reach a certain threshold of investment in the community. The goal would be to attract more film and television production to the state, which once was one of the biggest markets outside of Hollywood. At least 40 states have film-industry tax credits of some sort.

All-GOP corporation commission picks leader Bob Stump, who was re-elected to the Arizona Corporation Commission (ACC) last November, was selected by his colleagues on the five-member body to be chairman for the next two years. Two others elected in November took their seats. With the arrival of Bob Burns and Susan Bitter Smith, the commission is now entirely made up of Republicans. The ACC is the state’s regulatory body

Sunnyside to offer GED, diploma option for dropouts In an effort to help high school dropouts earn a diploma or GED, Sunnyside Unified School District has started a new flexible education program called GradLink. “I think this can be a national model,” said Sunnyside Superintendant Manuel L. Isquierdo. Students of any Tucson area school who dropped out with only five or fewer credits remaining and passed the AIMS test can participate in an online, self-paced curriculum geared toward earning a diploma or GED. GradLink is open to students ages 17 to 21 who dropped out of high school within the last two years. The district will loan the students laptops if they need them to access the internet and complete coursework. Isquierdo said the program won’t cost the district more money because the computers were refurbished by Sunnyside staff and the per-pupil funding will be provided by the state. The district has joined forces with Tucson Mayor Jonathan Rothschild, at least symbolically, to promote GradLink. “The bottom line is, the way out of poverty is education,” Rothschild said. “To anyone considering dropping out, the mayor’s message to you is: Don’t.” City funds will not be used for GradLink. More information about GradLink is available at www.susd12.org/GradLink or (520) 261-4723.

has been honored by United Van Lines with a President’s Club Award, honoring the company for generating at least $1 million in sales for the past year. In Horizon Moving’s case, the company reached the $6 million level. Horizon Moving received the award earlier this month during United Van Lines’ 2012 convention in San Francisco. Founded in 1924, Horizon Moving Systems has been owned and managed by the Dusenberry family for three generations. Its corporate headquarters are at 3600 E. 36th St. and has offices in Phoenix, Flagstaff, Sierra Vista and Yuma.

Tucson shoe store named one of nation’s best Fleet Feet Sports Tucson, a specialty running retailer, has been recognized as one of the 50 Best Running Stores in America by trade and consumer publications Running Insight and Competitor Magazine. This was the seventh consecutive year the store, at 7301 E. Tanque Verde Road, has earned the honor A special report on The 50 Best Running Stores in America appears in the December issue of Competitor Magazine.

A Tucson Classic.

Arizona gets ‘C-’ in new education report An education advocacy group headed by former Washington, D.C., schools chancellor Michelle Rhee gave Arizona a C-. The group, Students First, graded states on how well each state’s education policies serve students as opposed to test scores or other criteria. The report gave almost 90 percent of states grades lower than C. No state earned a mark higher than B-. Read the report at reportcard.studentsfirst.org.

KUDOS

Horizon Moving Systems honored by United Van Lines Tucson’s Horizon Moving Systems Inc.

306 N Alvernon Way LodgeOnTheDesert.com 877.498.6776

16 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

OUT OF THE OFFICE ON THE MENU

ARTS & CULTURE

Back from the 1700s, letâ&#x20AC;&#x2122;s say oui to sous-vide

ZoppĂŠ Family Circus performs under the big top this weekend

135-degree bath for approximately 10 Who remembers the 1970s television minutes, to beef short ribs, which enjoy a commercial for Heinz Ketchup chronicling much longer swimming time in a warmer the productâ&#x20AC;&#x2122;s excruciatingly slow journey bath of 170 degrees. from the bottle to the burger while Carly Surprisingly, Buzzaliniâ&#x20AC;&#x2122;s Simon sang, â&#x20AC;&#x153;Anticipation, itâ&#x20AC;&#x2122;s seasoned, seared and sealed making me wait?â&#x20AC;? The company ribeye steaks can spend a full 45 effectively addressed the minutes in the bath and still post a challenge of a condiment that medium rare degree of doneness. didnâ&#x20AC;&#x2122;t exit its bottle very quickly Buzzalini says the sous-vide by marketing it as a â&#x20AC;&#x153;taste thatâ&#x20AC;&#x2122;s process works just as well for worth the wait.â&#x20AC;? vegetables. His menu features Foodies have long promoted sous-vide fennel bulbs with a patience as a prerequisite for mushroom and red wine reducperfection. From â&#x20AC;&#x153;low and slowâ&#x20AC;? tion, â&#x20AC;&#x153;which uniquely transforms in the barbeque pit to the the texture of this beautiful long-term commitment required MATT RUSSELL vegetable to that of a protein.â&#x20AC;? to produce the perfect CajunThereâ&#x20AC;&#x2122;s a sous-vide operation at style roux, a number of chefs the Lodge on the Desert, 306 N. Alvernon Way, have encouraged our otherwise fast-paced as well, under executive chef Ryan Clark. society to simply slow down and savor. â&#x20AC;&#x153;Protein is always under pressureâ&#x20AC;? at the Encouragingly, many of these chefs have lodge, Clark said, as he uses his immersion rediscovered the sous-vide style of cooking, circulator to sous-vide filet mignon, lamb, the theory that dates back to the late 1700s. vegetables, sauces and more. Sous-vide, which translates to â&#x20AC;&#x153;under Clark recently treated his guests to a â&#x20AC;&#x153;pigâ&#x20AC;&#x2122;s pressure,â&#x20AC;? suggests that certain foods that face pate,â&#x20AC;? which confined entire pigsâ&#x20AC;&#x2122; heads have been seasoned and placed in vacuumto the sous-vide bath for 72 hours. After this sealed bags, then dropped into warm-water multi-day immersion, the snout, cheeks, baths for extended periods of time, produce tongue and other facial properties were then more flavor â&#x20AC;&#x201C; and are more tender â&#x20AC;&#x201C; than seasoned with garlic, herbs and brandy, foods prepared more conventionally. pressed into a terrine and served with a Several chefs in Tucson have also house-made mustard and toast points. embraced the beauty of the sous-vide, Clarkâ&#x20AC;&#x2122;s menu currently features a noting the critical preservation of certain butternut squash and ginger puree that foodsâ&#x20AC;&#x2122; juices and aromas that the painstakrests in his sous-vide bath before it joins its ing process yields. companion filet of salmon. Addam Buzzalini, executive chef at Sous-vide, or not sous-vide? That is the Maynards Market and Kitchen, 400 N. question. But as for me, I say oui! Toole Ave. in the Historic Depot, says he employs sous-vide daily. His water bath, called an immersion circulator, is specially Contact Matt Russell, whose day job is designed to keep foods at a constant CEO of Russell Public Communications, at temperature throughout the cooking mrussell@russellpublic.com. Russell is also process within 0.01 of a degree. This ranges the host of â&#x20AC;&#x153;On the Menu Liveâ&#x20AC;? that airs 4-5 from a filet of salmon, which hangs out in a p.m. Saturdays on KNST 97.1-FM/790-AM.

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Art

UApresents, in partnership with the Reid Park Zoological Society, has a six-perforLovers of jazz and photography might mance encore this weekend of one of its want to check out the exhibit currently up most popular shows of last season. The at the Center For Creative Photography, ZoppĂŠ Family Circus performs under the 1030 N. Olive Road southeast of big top, a 500-seat tent set up in the intersection of East SpeedReid Park northeast of the way and Park Avenue on the intersection of East 22nd Street University of Arizona campus. and Country Club Road. â&#x20AC;&#x153;The Jazz Loft Project: PhotoFounded in 1842, the ZoppĂŠ graphs and Tapes of W. Eugene Family Circus honors OldSmith 1957-1965â&#x20AC;? chronicles a World Italian circus tradition as moment in time at a small loft sixth generation circus perapartment in New York when former Giovanni ZoppĂŠ plays jazz legends performed and Nino the Clown leading mingled with literary and artistic audiences on a journey peers of the day. The show will be HERB STRATFORD featuring acrobatic feats, up through March 10. The Center equestrian showmanship, For Creative Photography is open canine capers, clowning and Ninoâ&#x20AC;&#x2122;s own 9 a.m.-5 p.m. weekdays and 1 p.m.-4 p.m. trapeze performance of loop-the-loop. weekends. It will be closed on Jan. 21, Shows are at 7 tonight (Jan. 11), 1, 4 and 7 Martin Luther King Jr. Day. p.m. Saturday and 1 and 4 p.m. Sunday. Tickets are $30 to $35 with discounts for children, students, seniors and military. Buy them through UApresents. As an added bonus, One of the best films of 2012, â&#x20AC;&#x153;Zero anyone who brings a ticket stub from the Dark Thirty,â&#x20AC;? arrives in movie theaters this circus to a Reid Park Zoo ticket booth by Jan. weekend. A riveting and compelling film 18 will get a $5 discount off the $60 annual about the 10-year search for Osama Bin family membership or $144 three-year family Laden, it stars Jessica Chastain, Joel membership to the zoological society. Edgerton and Chris Pratt. Believe the hype, this is a powerful film about humanity in the face of adversity. Two other features opening this weekend are â&#x20AC;&#x153;GangValarie Pettiford, a multi-talented actress, ster Squad,â&#x20AC;? a 1940s Los Angeles crime jazz singer and dancer who has performed in drama with a terrific cast including Sean theater and on TV, is the featured star in a Penn and Ryan Gosling, and the horror/ Broadway-style musical and dance spectacular comedy â&#x20AC;&#x153;A Haunted House.â&#x20AC;? titled â&#x20AC;&#x153;Celebrationâ&#x20AC;? this weekend. There will be two performances, at 8 p.m. and 3 p.m. Sunday Contact Herb Stratford at herb@ in the Berger Performing Arts Center, 1200 W. ArtsandCultureGuy.com. Stratford teaches Speedway on the campus of the Arizona State Arts Management at the University of Arizona. His School for the Deaf and Blind. Tickets are $42 column appears weekly in Inside Tucson Business. each. Buy them through the Invisible Theatre at www.invisibletheatre.com/.

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InsideTucsonBusiness.com

JANUARY 11, 2013

NEWS

‘Amnesty’ might be part of immigration reform By David Grant The Christian Science Monitor The momentum of President Obama’s resounding election victory in November — with a big push from Latinos and other minority groups — has catapulted immigration policy to the top of Washington’s 2013 agenda, making reform not only possible but also likely. The shift in the political conversation has been so dramatic that even a pathway to citizenship for some of the estimated 12 million undocumented immigrants in the United States — long rejected out of hand by most Republicans and some Democrats — could be part of the deal. The task is momentous. It involves weighing the wishes of industries from agriculture to high-tech, as well as the sensitivities of opening the door to immigrant workers at a time when unemployment remains high. But this year appears to be ripe for compromise. How reforms might take shape could be a major point of contention between the parties, but lawmakers on both sides now see an opportunity for what could be their most expansive achievement of 2013. “It has to be in 2013,” says U.S. Rep. Raúl Labrador, R-Idaho, an immigration lawyer

who thundered into Congress in the tea party wave of 2010. “If we wait until 2014, it’s going to be election time. And you know how efficient we are here during election time.” There’s been a flurry of activity on Capitol Hill recently. In the Senate, a “Gang of Eight” — led by longtime immigration reformers Sens. Chuck Schumer, D-N.Y.; John McCain, R-Ariz., and Lindsey Graham, RS.C. — has added freshman Sens. Michael Bennett, D-Colo., and Mike Lee, R-Utah, while potential 2016 presidential aspirant Sen. Marco Rubio, R-Fla., is leading his own initiative. There’s been movement in the House, too. “One thing clearly has changed,” says Rep. Luis Gutierrez, D-Ill., the lawmaker who cowrote a 2005 comprehensive immigration reform measure with now Sen. Jeff Flake, RAriz. “Nobody is talking about self-deportation. Nobody is talking about how (Arizona’s SB 1070 anti-illegal immigration law) should be the standard applied across the land. Nobody is talking about vetoing the DREAM Act,” which offers a path to citizenship for some young undocumented immigrants. “We are having wonderful conversations,” Gutierrez says. Critical to the change in tone is that sev-

eral leading lawmakers with near-pristine conservative credentials are also involved. Two tea party superstars — Senators Rubio and Lee, both of whom knocked out establishment Republican figures to win their seats — are going to be key players in any reform. In the House, the involvement of House Judiciary chairman Rep. Bob Goodlatte, R-Va., and Labrador can provide cover to conservative lawmakers from the party’s right flank. “The fact that you’re going to have strong conservative voices helping lead this debate is going to be critical to solving it instead of using it as a political wedge,” says Rep. Steve Scalise, R-La., incoming chairman of the Republican Study Committee, the largest and most conservative caucus in the House. It’s notable that both Labrador and Rubio believe in, one way or another, a path to citizenship for some illegal immigrants, even while they leave open just who can get on that path. Some conservatives say any form of citizenship given to illegal immigrants — no matter the conditions attached to it — constitutes an “amnesty,” which is a guarantee only of more illegal immigration unless the

nation’s borders are firmly secured and stringent workplace verification systems are put in place. But a recent poll by George Washington University and Politico found 62 percent of Americans support a proposal that would allow illegal immigrants to earn citizenship over a period of several years, with 40 percent strongly supporting such a measure. Only 35 percent opposed it. While the parties broadly agree on the need to pursue immigration reform, how to do it remains up in the air. Both Rubio and Labrador — like many Republicans — favor breaking up the immigration issue into smaller pieces. Rubio argues that before Congress deals with the millions of undocumented immigrants, it must prove to the American people that it can secure U.S. borders and establish an effective workplace-verification system. Labrador says he prefers a handful of bills moving simultaneously, with different coalitions able to support each measure. Obama and Democrats in Congress favor a single comprehensive immigration bill, believing that taking one difficult but all-encompassing vote is more secure for lawmakers than having to vote for a halfdozen or more specific proposals.

PEOPLE IN ACTION AWARDS University of Phoenix Southern Arizona Campus has awarded alumnae Tucson Police Department Deputy Chief Sharon Allen and business leader Pamela Crim with Community Service Awards for their individual contributions to nonprofit organizations in the Tucson community. Allen she sits on the board for organizations such as the Northwest Medical Center Women’s Health Advisory, La Frontera Clinic Board of Directors, 100 Club of Arizona and the Heart Disease Association. Crim, director of sales at Cox Business, has volunteered her time with organizations such as the American Cancer Society, and United Way of Tucson and Southern Arizona, facilitating business and life skills workshops for youth. Each year University of Phoenix Alumni Association celebrates alumni who are making

JOE KROEGER

a difference and giving back to their communities. This acknowledgement recognizes graduates for their efforts to better the communities in which they live and work.

Westward Look Wyndham Grand Resort and Spa director of engineering, Al Raso, has been honored by the Arizona Lodging and Tourism Association with a Stars of the Industry Award as Manager of the Year. The Stars of the Industry program was created more than 40 years ago to recognize outstanding

accomplishments in Arizona’s lodging industry and those who symbolize quality service.

NEW HIRES Tucson Old Pueblo Credit Union’s Board of Directors has selected Vern Babilon as president and CEO. Babilon will assume the role previously held by Joseph Mirachi. Before joining TOPCU, Babilon was the owner of GVBabilon Associates—a recruiting firm located in Cypress, Texas. He earned his B.A. in banking, finance and

MERRI PENDERGRASS

SYLIVA M. LEE

{TELL US ONLINE} Now your business can tell Inside Tucson Business about new hires, promotions and special awards online. Go to www.insidetucsonbusiness.com and click the “People in Action” button. From there you can submit your announcement and we’ll publish it online and in print. accounting at Alvernia College in Reading, Penn. He also earned a master’s of business management from Penn State University. APPOINTMENTS Snell & Wilmer has announced the appointment of four new partners,

including Tucson labor and employment attorney Joe Kroeger. Kroeger, who earned his law degree from Stanford Law School, represents employers in a variety of areas, including employment discrimination and harassment, wrongful discharge, breach of contract, misappropriation

MARTY CORTEZ

of trade secrets, noncompetition/non-solicitation, social media, alternative dispute resolution and arbitration agreements and other related matters. Mike Gehret of Salt Lake City, Jeff Scudder of Phoenix and Nicole Skorupka of Denver were also selected as partners. Merri Pendergrass, MD, Ph.D., has been appointed director of the Diabetes Program at the University of Arizona College of Medicine – Tucson. Pendergrass also has joined the faculty of the UA Department of

Medicine as a professor of medicine in the Division of Endocrinology. Prior to joining the UA, Pendergrass was vice president and national practice leader for the Diabetes Therapeutic Resource Center of Medco Health Solutions, Inc. (now Express Scripts, Inc.), maintained a clinical practice in diabetes and endocrinology at Parkland Memorial Hospital and was on the faculty of the University of Texas Southwestern Medical School in Dallas. Prior to that, she was on the faculty of Harvard Medical School and was director of the

diabetes program at Brigham and Women’s Hospital in Boston. Pendergrass earned a doctorate in biopsychology at the University of Texas, Austin, and her medical degree at the University of Texas Southwestern Medical School, Dallas. She completed her internship and residency in internal medicine at the University of Texas, San Antonio, where she also completed a fellowship in endocrinology and metabolism. ELECTIONS Sylvia M. Lee, Ph.D. and Marty Cortez were recently sworn in as Pima Community College Governing Board members. Pima County School Superintendent Linda Arzoumanian administered the loyalty oath to Lee, who was elected to represent District 3 in November, and to Cortez, who represents District 5 and was re-elected to serve a fourth term.

18 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

FINANCE YOUR MONEY

The Alternative Minimum Tax and strategies to minimize it When its was first introduced in 1969, the alternative minimum tax (AMT) was widely considered to be a “rich man’s tax” — a fallback tax for those taxpayers with big incomes and numerous deductibles. But over the years, it was only adjusted twice for inflation. As a result, the Congressonal Research Services estimates 20 percent of taxpayers will face it on their 2012 returns, compared to just 1 percent in 1997. The mechanics of the AMT are complex. But a general understanding of how it works and what triggers it can help you minimize or avoid it — and even use it to your advantage. The AMT truly functions as an “alternative” tax system. It has its own set of rates and rules for deductions, which are more restrictive than the regular rules. It operates in parallel with the regular income tax system in that if you’re already paying at least as much under the “ordinary” income tax as you would under the AMT, you don’t have to pay it. But if your ordinary tax falls below this minimum, you have to make up the difference by paying the alternative minimum tax. The AMT can be triggered by a number of different variables. Although those with higher incomes are more susceptible to the tax, other factors such as the amount of exemptions or deductions also can prompt the tax. Even commonplace items such as a deduction for state income tax or interest on a second mortgage can set off the AMT. AMT rates start at 26 percent, rising to 28 percent at higher income levels. This compares with regular federal tax rates, which currently start at 10 percent and step up to 35 percent. Although the AMT rates may appear to cap out at a lower rate than regular taxes, the AMT calculation allows significantly fewer deductions, making for a potentially bigger bottom-line tax bite. Unlike regular taxes, AMT rates do not have individual exemptions or other dependent exemptions, nor are filers allowed to claim the standard deduction. The AMT also doesn’t allow for deductions of state or local taxes, property taxes or for a number of other itemized deductions, including home equity loan interest, if the loan proceeds are not used for home improvements. Accordingly, the more exemptions and deductions you normally claim, the more likely it is that you’ll have an AMT liability. On the positive side, there is a special AMT exemption designed to prevent the AMT from applying to those with modest incomes. For the 2012 tax year, the exemption is $78,750 for joint filers and $50,600 for individuals. As part of the agreement

this month to avoid going over the fiscal cliff, Congress agreed that in future years the AMT exemption will be indexed to inflation. That means taxpayers who for the 2012 tax year aren’t W. DAVID FAY faced with the AMT won’t have to worry about it in the future unless they see an income boost that outstrips the rate of inflation. Certain circumstances and tax items are likely to trigger the AMT: • If your gross income is above $100,000 • If you have large numbers of personal exemptions • If you have significant itemized deductions for state and local taxes, home equity loan interest, deductible medical expenses (AMT has a slight difference) or other miscellaneous deductions • If you exercised incentive stock options (ISOs) during the year • If you had a large capital gain, which may reduce or eliminate the AMT exemption amount • If you have passive income or losses • If you received income from private activity municipal bonds If any of the above applies to you, you should complete the AMT worksheet when preparing your taxes. If you don’t, rest assured the IRS will. And if they find that you owe AMT, they’ll add penalties and interest. Because large one-time gains and big deductions that trigger the AMT are sometimes controllable, you may be able to avoid or minimize the impact of the AMT by planning ahead. Some practical suggestions include delaying an asset sale or spreading the gain over a number of years by using an installment sale, timing payments of state taxes, home equity loan interest (if the loan proceeds are not used for home improvements) and other itemized deductions to fall in years when you won’t face the AMT, and time when and how you exercise ISOs. Tax planning issues relating to the AMT are comprehensive. Consult your advisor to help you evaluate what steps you can take to avoid or minimize your exposure.

Contact W. David Fay, a second vice president in wealth management and financial advisor with Morgan Stanley Smith Barney, at http://fa.smithbarney.com/ thefaymillergroup or (502) 745-7069.

TUCSON STOCK EXCHANGE Stock market quotations of some publicly traded companies doing business in Southern Arizona

Company Name

Symbol

Jan. 9

Jan. 2 Change

52-Week 52-Week Low High

Tucson companies Applied Energetics Inc CDEX Inc Providence Service Corp UniSource Energy Corp (Tucson Electric Power)

AERG.OB CEXIQ.OB PRSC UNS

0.03 0.11 16.94 43.50

0.03 0.09 17.26 43.71

0.00 0.02 -0.32 -0.21

0.02 0.01 9.56 35.20

0.12 1.00 17.94 44.15

9.08 1.29 2.62 11.43 62.96 9.97 93.32 11.59 55.59 3.90 20.57 42.04 38.42 32.84 41.09 17.03 101.23 39.83 50.28 13.11 80.06 67.23 21.15 35.22 34.56 63.17 66.54 192.32 32.51 62.16 5.21 45.47 37.96 16.48 41.95 25.55 1.17 41.71 34.88 42.11 58.79 36.69 38.90 42.12 52.15 67.04 18.80 19.49 58.21 52.32 17.40 48.07 40.77 13.63 11.00 42.41 42.18 60.18 18.11 32.00 49.63 25.64 130.89 19.32 15.13 33.27 68.57 38.45 34.71 11.44 21.85 53.92 35.50 27.66 5.65 18.67

8.99 0.86 2.53 12.03 62.10 9.57 93.20 11.81 55.51 3.85 20.36 41.25 38.52 31.22 41.50 16.62 101.45 40.18 49.68 12.23 81.53 67.24 20.39 35.17 34.85 63.48 64.75 196.35 32.08 61.95 5.66 44.66 38.18 16.29 42.21 26.37 1.18 39.88 36.19 41.53 58.80 38.31 38.79 38.14 51.81 68.17 20.84 18.60 58.62 51.30 18.35 47.92 41.70 12.71 10.47 43.38 42.07 58.82 17.96 32.31 49.76 24.19 128.46 21.18 13.98 32.97 69.24 38.06 35.05 11.01 21.99 54.06 34.19 27.33 4.82 18.05

0.09 0.43 0.09 -0.60 0.86 0.40 0.12 -0.22 0.08 0.05 0.21 0.79 -0.10 1.62 -0.41 0.41 -0.22 -0.35 0.60 0.88 -1.47 -0.01 0.76 0.05 -0.29 -0.31 1.79 -4.03 0.43 0.21 -0.45 0.81 -0.22 0.19 -0.26 -0.82 -0.01 1.83 -1.31 0.58 -0.01 -1.62 0.11 3.98 0.34 -1.13 -2.04 0.89 -0.41 1.02 -0.95 0.15 -0.93 0.92 0.53 -0.97 0.11 1.36 0.15 -0.31 -0.13 1.45 2.43 -1.86 1.15 0.30 -0.67 0.39 -0.34 0.43 -0.14 -0.14 1.31 0.33 0.83 0.62

7.97 0.32 1.48 6.41 50.95 5.30 76.91 11.20 50.89 2.97 14.97 24.61 25.15 16.37 22.19 12.13 78.98 36.31 41.48 8.22 43.70 50.27 13.45 30.54 21.38 42.92 52.21 177.35 27.10 53.38 3.94 30.83 27.96 6.46 41.35 20.98 0.69 20.97 24.76 37.02 51.43 32.31 32.79 23.41 40.64 56.56 15.69 7.29 47.50 38.63 14.73 33.03 30.54 6.25 7.76 39.01 25.74 48.51 14.04 26.06 33.62 17.31 104.08 18.36 5.67 27.30 57.18 28.53 28.77 7.10 16.40 47.00 21.39 7.80 2.99 5.90

10.92 1.30 3.65 12.20 63.16 9.98 94.34 27.95 60.00 4.93 21.16 43.25 38.58 33.33 41.86 17.50 105.97 43.43 50.28 13.38 89.98 67.92 22.79 48.96 34.92 65.92 66.80 211.79 37.70 62.86 5.85 46.49 38.62 17.30 55.25 27.11 1.81 42.00 36.47 43.36 62.83 42.17 41.84 43.02 53.50 71.25 43.18 19.80 59.34 52.33 23.16 48.65 85.90 14.32 11.27 46.08 42.55 65.80 18.26 34.24 50.28 26.11 131.78 58.29 15.50 35.46 77.60 38.56 36.60 11.64 22.81 55.20 40.69 31.53 9.22 20.97

Southern Arizona presence Alcoa Inc (Huck Fasteners) AA AMR Corp (American Airlines) AAMRQ Augusta Resource Corp (Rosemont Mine) AZC Bank Of America Corp BAC Bank of Montreal (M&I Bank) BMO BBVA Compass BBVA Berkshire Hathaway (Geico, Long Cos) BRK-B* Best Buy Co Inc BBY BOK Financial Corp (Bank of Arizona) BOKF Bombardier Inc* (Bombardier Aerospace) BBDB CB Richard Ellis Group CBG Citigroup Inc C Comcast Corp CMCSA Community Health Sys (Northwest Med Cntrs) CYH Computer Sciences Corp CSC Convergys Corp CVG Costco Wholesale Corp COST CenturyLink (Qwest Communications) CTL Cvs/Caremark (CVS pharmacy) CVS Delta Air Lines DAL Dillard Department Stores DDS Dover Corp (Sargent Controls & Aerospace) DOV DR Horton Inc DHI Freeport-McMoRan (Phelps Dodge) FCX Granite Construction Inc GVA Home Depot Inc HD Honeywell Intl Inc HON IBM IBM Iron Mountain IRM Intuit Inc INTU Journal Communications (KGUN 9, KMXZ) JRN JP Morgan Chase & Co JPM Kaman Corp (Electro-Optics Develpmnt Cntr) KAMN KB Home KBH Kohls Corp KSS Kroger Co (Fry's Food Stores) KR Lee Enterprises (Arizona Daily Star) LEE Lennar Corporation LEN Lowe's Cos (Lowe's Home Improvement) LOW Loews Corp (Ventana Canyon Resort) L Macerich Co (Westcor, La Encantada) MAC Macy's Inc M Marriott Intl Inc MAR Meritage Homes Corp MTH Northern Trust Corp NTRS Northrop Grumman Corp NOC Penney, J.C. JCP Pulte Homes Inc (Pulte, Del Webb) PHM Raytheon Co (Raytheon Missile Systems) RTN Roche Holdings AG (Ventana Medical Systems) RHHBY Safeway Inc SWY Sanofi-Aventis SA SNY Sears Holdings (Sears, Kmart, Customer Care) SHLD SkyWest Inc SKYW Southwest Airlines Co LUV Southwest Gas Corp SWX Stantec Inc STN Target Corp TGT TeleTech Holdings Inc TTEC Texas Instruments Inc TXN Time Warner Inc (AOL) TWX Ual Corp (United Airlines) UAL Union Pacific Corp UNP Apollo Group Inc (University of Phoenix) APOL US Airways Group Inc LCC US Bancorp (US Bank) USB Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT Walgreen Co WAG Wells Fargo & Co WFC Western Alliance Bancorp (Alliance Bank) WAL Zions Bancorp (National Bank of Arizona) ZION Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT Walgreen Co WAG Wells Fargo & Co WFC Western Alliance Bancorp (Alliance Bank) WAL Zions Bancorp (National Bank of Arizona) ZION Data Source: Dow Jones Market Watch *Quotes in U.S. dollars, except Bombardier is Canadian dollars.

InsideTucsonBusiness.com

JANUARY 11, 2013

INSIDE REAL ESTATE & CONSTRUCTION

A skinny dip: Home foreclosures sink by 146 notices By Roger Yohem Inside Tucson Business Now that 2012 is officially in the books, stronger economic fundamentals are in place for 2013 to be a better year for the region’s real estate market. Notices of trustee’s sales, the first step in the home foreclosure process, trended down for the third straight year in 2012 since peaking at 12,184 notices in 2009. Although the drop was ever so slight, the dip is a welcome sign in an industry that continues its slow recovery from the Great Recession. Last year, 9,287 trustee’s sale notices were filed with the Pima County Recorder’s Office, a dip of just 1.5 percent, or 146 notices, from 2011. That represented the smallest decline since the 2009 peak. Year over year, notices had decreased the most in 2011 from 2010, falling by 19 percent or 2,230 notices (see table). Notices averaged 774 per month in 2012 compared to 786 monthly in 2011. At the back end of the trustee’s notice process, when homes actually go through foreclosure, distressed home sales suffered a steep decline in 2012 from 2011. Year-over-year, trustee’s sales fell by 16 percent, to 5,818 from 6,956 in 2011. Distressed sales averaged 485 per month in 2012 compared to 580 in 2011. For the past five years, foreclosures have impacted the entire market. While the housing market continues to grind out a recovery, the key factor remains the pace of selling off distressed inventory.

THE PULSE:

TUCSON REAL ESTATE

12/31/2012 12/24/2012

Median Price Active Listings New Listings Pending Sales Homes Closed

$141,000 5,023 363 233 140

Source: Long Realty Research Center

$139,000 4,837 166 194 155

Notices of Trustees Sales Pima County Recorder Foreclosure January February March April May June July August September October November

2007 346 276 305 300 396 377 419 503 394 483 540

December Total Monthly avg.

475 4,814 401

30 YEAR 15 YEAR 5/1 ARM

Current

2009 882 1,016 1,154 1,093 991 1,002 1,063 1,130 1,008 948 859

923 1,038 8,956 12,184 746 1,015

2010 863 982 1,089 985 890 862 1,111 1,067 1,090 1,019 829

2011 975 762 948 721 748 693 666 917 797 816 754

2012 705 918 904 910 984 946 797 794 625 638 534

876 11,663 972

636 9,433 786

532 9,287 774

Pima County Recorder’s Office data

Ramada Inn foreclosed Ramada Foothills Inn and Suites, 6944 E. Tanque Verde Road, has fallen into foreclosure and is to be sold at public action scheduled for March. The property features 115 deluxe guest rooms and two-room suites, pool and spa, a 1,100 square-foot meeting room and a business center. Owners DK TIC LLC and VNM Foothills TIC LLC, both registered in Delaware, are delinquent on an original $6.225 million note, according to public records. The property was renovated last year. The beneficiary is RFH Servicing LLC, Las Vegas. The trustee’s sale is being handled by Security Title Agency, 3636 N. Central Ave., Phoenix. The auction is scheduled for 11:30 a.m. March 27 at the Pima County Courts Building, 110 W. Congress St.

Web-based forecast Since Bright Future Real Estate Research will not present an annual housing forecast this year, owner Ginger Kneup is directing interested parties to a colleague in Phoenix. RL Brown will present his outlook as an In-

WEEKLY MORTGAGE RATES Program

2008 699 598 661 700 720 742 721 814 782 921 675

Last Week

1/8/2013

One 12 Month 12 Month Year Ago High Low

3.50% 3.75%APR 3.38% 3.625%APR 4.95% 2.88% 3.125%APR 2.75% 3.00% APR 4.22% 2.63% 2.875%APR 2.63% 2.875% APR

4.95% 4.22%

The above rates have a 1% origination fee and 0 discount . FNMA/FHLMC maximum conforming loan amount is $417,000 Conventional Jumbo loans are loans above $417,000 Information provided by Randy Hotchkiss, National Certified Mortgage Consultant (CMC) Hotchkiss Financial, Inc. P.O. Box 43712 Tucson, Arizona 85733 • 520-324-0000 MB #0905432. Rates are subject to change without notice based upon market conditions.

3.38% 2.75%

ternet forum at 10 a.m., Jan. 24. Brown, CEO of RL Brown Housing Reports, has been a frequent speaker at Bright Future’s forums when it was owned by John Strobeck. Kneup, who took over the business in August, is on maternity leave and unable to organize the event this year. Although Brown’s analysis concentrates on the Phoenix housing market, Kneup believes his forecast could offer some insight into Tucson market trends. He will give a review of housing’s 2012 performance and a forecast through 2016. As a Web forum, multiple people can “tune in” for one admission price. Make reservations online at www.rlbrownreports. com before Jan. 21 for $95. After that, it goes up to $125.

TUCA awards The Tucson Utility Contractors Association (TUCA) will hold its annual installation and awards dinner Jan. 26 at the Marriott University Park Hotel, 880 E. Second St. The cost is $85 per person. TUCA Executive Director Ramon Gaanderse will lead the ceremonies along with the association’s 2012 president Chris Albright of KE&G Construction. The event begins with a 5:30 p.m. reception followed by dinner at 6:45 p.m. For reservations, email tuca@tuca-az. org or call (520) 624-0444. Also, a few sponsorship opportunities remain available.

Sales and leases • Nevada Equity Partners purchased Swanway Plaza, 4700 – 4730 E. Broadway for $10.35 million from Swanway Development Company, represented by Greg Furrier, Picor Commercial Real Estate Services.

The 60,000 square-feet of retail buildings on six acres at the southeast corner of East Broadway and Swan Road consists of tenant s Guitar Center, Ace Hardware, Anna’s Linens, Catherines Plus Sizes, Goodcents Deli Fresh Subs and Walgreens. • MCS Capital Partners LLC of Phoenix purchased Arizona Commons II, 1920 N. First Ave., for $5.6 million from C-III Asset Management LLC, acting as special servicer for Wells Fargo Bank, the trustee for holder Morgan Stanley I Inc. The complex, built in 1972, features 247 student housing beds in 88 units. The transaction was handled by David Fogler and Steven Nicoluzakis with Cassidy Turley Arizona. • Amerco, a division of U-Haul, purchased A Lotta Storage & Mail, 7651 N. Interstate 10 Frontage Road, Marana, for $3.2 million from Pacific Western Bank. The transaction was handled by Bill Alter and Denise Nunez, Rein & Grossoehme. • Armada Financial LLC, Airways Park & Fly LLC and Super Park LLC purchased five commercial parcels totaling 18 acres for $2.25 million. The acquisition includes a 23,172 square-foot building occupied by Raytheon Missile Systems and parking lots near the Tucson International Airport. Addresses of the parcels are: 6840 S. Tucson Blvd., 2299 and 2385 E. Valencia Road, 2320 E. Aragon Road, 2355 E. Elvira Road and 2332 E. Weiding Road. The seller was Sterling Savings Bank, represented by Rick Volk, Volk Company. The buyers were represented by Peter Miller, Keller Williams. • Monterey Water Company purchased 4702 E. Grant Road, for $620,000 from Cox Investment Group LLC, represented by Pat Darcy, Tucson Realty & Trust Co. The parcel consists of a 2,261 square-foot gasoline service station on 21,687 square feet of land. • Corner Stone Homes LLC purchased six vacant 3.33-acre lots on the north side of West Ina Road just west of Silverbell Road for $415,000. The undeveloped subdivision is named Silver Shadows. The seller was SBAZ Real Estate Holdings LLC. The transaction was handled by Thrac Paulette, Vast Commercial Real Estate. • SAJE Investments LLC purchased 29,999 square feet of land near the northwest corner of Sabino Canyon and Snyder roads for $250,000. The buyer, who plans to build a veterinary clinic, was represented by Mike Hennessy, Burris Hennessy. The seller was Brakemax Corporate LLC, represented by Dave Hammack, Volk Company. • Innate Living Chiropractic leased 1,859 square feet at 1050 E. River from Ashland Group, represented by Bruce Suppes and David Volk with CBRE. The tenant was represented by Doug Marsh with Oxford Realty Advisors.

Email news items for this column to ryohem@azbiz.com. Inside Real Estate & Construction appears weekly.

20 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

EDITORIAL BIZ BUZZ

Meet you next Friday morning for breakfast Lord willing and the creeks don’t rise, you should receive next week’s Jan. 18 issue of Inside Tucson Business before the sun comes up that day. That’s the first issue of Inside Tucson Business that will be delivered by the same people who currently deliver other newspapers throughout the Tucson region, including the Arizona Daily Star, Wall Street Journal, Arizona Republic, The New York Times, USA DAVID HATFIELD Today and others. That means this is my final plea for you to double check your delivery address. The mailing label on the front page of your copy of this week’s issue contains the address our circulation department has on hand. That’s the address where next week’s issue of Inside Tucson Business will be delivered by 6 a.m. Jan. 18. But, like other newspapers, next week’s issue will not have a mailing label on it. It will be delivered just like other newspapers, in a bag. If your address is in a large office or other building that’s not conducive to newspaper deliveries, I implore you to change it to your home. Send an email to circulation@azbiz. com, put “Change my delivery address” in the subject line and in the body of the email include your address as it appears on the address label along with the new address where you would like your copy delivered next week. You also can do this via fax to (520) 294-4040. Either way, please do it no later than the end of the day Monday. If you wish to continue receiving your copy via the U.S. Postal Service we can do that but we need for you to specifically request that option. Send an email to circulation@azbiz. com, put “ITB mail delivery” in the subject line and in the body of the email include your address as it appears on the address label. You can also do this by fax to (520) 294-4040. Obviously, those who have their copies of Inside Tucson Business delivered to post office boxes will continue to receive it there as will those who live outside the delivery area. Please note that with changes set to take effect next month at the U.S. Postal Service, including the closure of the Tucson mail sorting facility, in-town deliveries of Inside Tucson Business will likely be delayed. Judging from other business journals that have switched delivery methods, I’m told we can expect some last-minute glitches. I’ve already heard from some subscribers who are wondering where to call about delivery issues. We’re setting up a customer service portal on our website — www.InsideTucsonBusiness.com — and a phone number, which, unfortunately I can’t tell you about as I write this because it hasn’t been established yet. Hopefully it will be in service by next Friday and you’ll be able to find it on our website. Call by 2 p.m. if you don’t receive your copy on Friday morning and it should be delivered Saturday. That’s also where you can take care of matters such as starting and stopping delivery for vacations or changing delivery addresses. When next Friday morning arrives I hope you go out to your driveway to pick up your copy of Inside Tucson Business. As your marketing campaign for the change has been saying, we’re looking forward to joining you for breakfast in the morning.

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237.

EDITORIAL

A less tempestuous Legislature? The 51st Arizona Legislature opens its first session next week and there’s an air that this year will be different. There is a real feeling that lawmakers may actually listen to constituents’ concerns and work to address issues facing the state rather than trying to ramrod a perceived agenda. For business interests that’s a positive step for a state that has been made the laughingstock of the nation. As Inside Tucson Business reporter Patrick McNamara found in his report this week on the Legislative goals of business groups, most have a positive outlook for what could come from this session. Republicans continue to hold majorities in both the state Senate and House, though no longer a super majority. That means the dynamics of how the 30 state senators and 60 representatives interact will most likely present opportunities for new and different alliances. For example, while conservative Andy Biggs, R-Gilbert, has replaced moderate Steve Pierce, RPrescott, as state Senate president, Biggs has already made an impression by being outwardly conciliatory and willing to listen. Fletcher McCusker, chairman of the Rio Nuevo Multipurpose Facilities District board, tells of how he had initial concerns with the actions Biggs might take with regard to revitalization of downtown Tucson. After the senator visited a Second Saturdays event, however, he told McCusker he wasn’t interested in wasting time going back to past misdeeds. “He basically said stay the course,” McCusker said. Other Republicans in Senate leadership positions, majority leader John McComish and whip Adam Driggs, also are considered staunch conservatives but the fact is they will need moderates — and maybe even a few Democrats — to get some legislation passed. Over in the House, Rep. Andy Tobin, R-Paulden, held on to his House Speaker position. Although he took criticism from some conservatives, Tobin has conservative bona fides, especially when it comes to taxes and

financial matters The other two Republican leadership positions in the House this session are majority leader David Gowan, Sierra Vista, and whip Rick Gray, Sun City. Of the three, Gowan is arguably the farthest to the right. Gray touts making Arizona business friendly as his highest priority. From what reporter McNamara found there is a general concern among Southern Arizona business interests that the state must get back on track with education funding. A temporary 1 percent sales tax expires May 31 and, thanks to increased state revenues, there will be pressure from educators for lawmakers to replace money that was going to education, both K-12 and higher education including the state universities and community colleges. There also will be discussion on how the federal government’s Affordable Care Act, or Obamacare, plays out in Arizona, especially now that Gov. Jan Brewer has decided to cede responsibility to Washington, D.C., to establish and run the state’s exchange or marketplace that will be used by small businesses and consumers to buy health insurance with federal subsidies. There also will likely be a push to restore some of the cuts made in the state’s Medicaid program, which has severely hurt Arizona hospitals’ bottom line. There’s also an effort to simplify the various tax rates facing businesses across the state, especially the construction sales taxes levied by various jurisdictions. Also, expect proposals to encourage growth in the technology sector. No doubt lawmakers will revisit the kind of legislation that tends to get them national attention, such as gun rights and illegal immigration. Let’s hope there’s some reason in the debate. When all is said and done, what could be the real victory from this session of the Legislature may be traced to the decisions voters made in November when they elected senators and representatives who are willing to listen and act for their constituents.

InsideTucsonBusiness.com

JANUARY 11, 2013

OPINION WAKE UP, TUCSON

A Q&A with Dr. Clark Petula, downtown know-it-all I sat down with noted downtown know-itall, Dr. Clark Petula. The success of downtown and the “modern streetcar” will be a crucial component to Tucson climbing out of the amazingly deep economic pit we find ourselves in. Here’s what we talked about: Chris DeSimone: What is your take on the modern streetcar? Dr. Clark Petula: This deal is done. It can’t be rewound. It’s happening. Now, you have to make sure it’s executed execute correctly. The construction of the streetcar must be coupled with other actions to maximize the impact of such a massive investment of tax dollars. DeSimone: What other actions are you referring to? Petula: First, the city needs to ensure the higher density of commercial and residential development along the streetcar line. This is crucial to promote high rider usage. This will help mitigate taxpayer subsidy, which will still be pretty substantial. Mayor Jonathan Rothschild deserves some kudos for helping along some of this private student residences near the line. Predictably, some of the neighbors are upset by the high-rise development, but tough. They live next to a university with aggressive enrollment plans. They despise the mini-dorm trend. This should take some

market pressure off of that situation. They will never be happy with all of this. The city is making some strides, but they still need to make it easier to open a business. I have CHRIS DESIMONE been conversing with city staff who are telling me there are City Development Services personnel who are angry that business owners are going to the mayor’s office for help in getting their plans done in a timely manner. These employees are saying things like they will try to make it even harder for those folks. That kind of petty foolishness must stop. It’s time to go forward, not backward. DeSimone: What about the existing businesses down there? Petula: They have had a heck of a time. The city has dropped the ball. This is a project of almost $200 million, there must have been some dollars in there for business assistance. I know Britton Dornquast and the crew at Mainstreet are trying their best. Owners have complained

about a variety of problems: inconsistent information on completion dates, poor signage and lack of a marketing effort to inform folks about what is happening and how to get around it. We are in danger of losing some of the family-owned business council members say they are so concerned about. If they don’t watch it they may be stuck with chain stores. They are the big companies that can withstand the bureaucracy of the city. DeSimone: What about the Tucson Convention Center? Petula: It is simultaneously both the albatross and the elephant in the room. For the past 20 years, that place has been a soap opera. City Manager Richard Miranda is to be commended for bringing in the (Tucson Police Captain Mark) Timpf team in to clean up the place. For those who think the thing should renovated so Tucson can get into the convention business, chill out. It would take more than $100 million just to try to compete against much better facilities in cities with real air service and plenty of hotel product adjacent or nearby. It is not feasible. But what Tucson needs to do first is preserve the February gem show. Taking some of the money from the Rio Nuevo tax increment finance district and putting it to

fixing up the exhibit hall, manager’s offices and bathrooms would be a good step. After that, take the Leo Rich Theater, the Music Hall and some of the other downtown theaters and operate them under one entity. These would be smart uses of time, money and people. Anything leftover should probably be converted to museum space. Museums — some paying $1 rents — could be put them under one roof. Imagine the Children’s Museum Tucson, Museum of Contemporary Art and other museums and galleries all in one place. It would be a great draw from all over the region and the interstate. Oh, and we should probably invest in billboard advertising to promote this excitement to the zillions of cars that pass by every day. DeSimone: We are running out of time and column space. Any other quick ideas to help downtown? Petula: Kill the name Rio Nuevo. Make sure the streetcar is open late enough for the bar-goers. They may be your key demo for the first couple of years. DeSimone: Thanks for your time. Contact Chris DeSimone at provenpartner@comcast.net. DeSimone co-hosts “Wake Up Tucson,” 6-8 a.m. weekdays on The Voice KVOI 1030-AM.

GUEST OPINION

Unexpectedly, there’s one kind of care not covered by Medicare With all the talk about government entitlement programs and “Obamacare,” you might think we’re all covered for everything all the time. But a nasty surprise is waiting, and it’s likely to spring when you’re elderly, frail and on a fixed income. Or when you’ve become disabled. When you need long-term care. Long-term care is not hospital care. It’s personal and support care you receive in a nursing home, residential care facility such as assisted living or retirement community or your own home. It’s often the ongoing care you need as you age and are coping with chronic illness. The nasty surprise is that Medicare doesn’t pay for long-term care. Only Medicaid or our in-state version, the Arizona Long Term Care System (ALTCS) provides long-term care for the general public. And, believe me, you don’t want to rely on ALTCS if you can avoid it. Like Medicaid, ALTCS is a low-income program. To qualify as an individual you must have no more than $2,000 in assets and a monthly fixed income of not more than $2,094. For couples both the asset and income levels are higher. Still, it’s a dismal way to end a lifetime of hard work. If going on ALTCS still sounds pretty

good, please stop reading right now. But if you have assets to protect — or would rather not experience the sort of care a generous state like Arizona provides — there is a JUDY CLINCO solution: long-term care insurance. Maybe starting yet another insurance policy is not your top spending priority, but it could pay off hugely in the future. The U.S. Department of Health and Human Services says 40 percent of all Americans over age 65 will enter a nursing home at some point, and half of those will stay an average of 2½ years. In Tucson, 24-hour care — at home or in a facility — is $225 or more a day, or more than $82,000 a year. That kind of out-ofpocket spending can burn through your life savings in a hurry. Having a long-term care policy puts you in charge of your risk and your costs. Your regular monthly premium buys the comfort of knowing that you won’t be blindsided by a huge bill for long-term care. Long-term care policies typically run

between about $150 a month for a basic policy to about $400 a month for a more comprehensive policy. Every policy is customized for the client, based on five major points: • How much the policy will pay per day of care • How many years of care the policy will provide • The number of days you pay out-ofpocket before benefits begin (often this is 90 days) • What percentage of care will be provided in your home (many policyholders choose 100 percent) • How much the benefits will increase each year to adjust for inflation Riders added to the policy can increase both premiums and benefits. Naturally, the more generous the policy is, the more it will cost. Starting a policy earlier can save a lot; if you’re in your 40s or 50s and are looking ahead to retirement, it’s not too soon to consider starting a policy. It can be an important piece of your overall financial planning. Who am I to tell you all this? I run a home care company. My screened, trained, qualified caregivers are scheduled to the clients’ homes to help with the activities of daily life such as personal hygiene, dressing,

shopping and cooking, home management, transportation, and medication reminders. Having a long-term care policy can make it possible for you to hire my company. True, family members can — and often do — provide this care. But the work is often exhausting physically and emotionally and it can require the family caregiver to put his or her own life on hold. It can also redefine the relationship between the adult child and the aging parent in ways that are not good for either party. If you want to enjoy your family, protect your assets, and plan responsibly for the future, please consider investing in a longterm care policy. To get started, there’s a free booklet titled ”A Shopper’s Guide to LongTerm Care Insurance” published by the National Association of Insurance Commissioners that gives a great deal of helpful, unbiased advice and information. It’s available wherever this type of insurance is sold. The National Clearinghouse for Long Term Care Information, a website published by the U.S. Department of Health and Human Services, is another useful resource. You’ll find it at www.longtermcare.gov.

Judy Clinco is founder and president of Catalina In-home Services Inc.

22 JANUARY 11, 2013

INSIDE TUCSON BUSINESS

OPINION ADVOCATING FOR BUSINESS

Timeless business wisdom based on certainties Years ago, I had my own small marketing company. I worked with clients from Alaska to the Carolinas, so I was on the road a lot. One of my clients was in Kalamazoo, Mich. When I first walked into the lobby of that company, I noticed a little business card holder on the front desk. Instead of the name and contact information of the president or some other executive, there was a card with some timeless business wisdom. I took one and have the card to this day. Here’s some of that timeless wisdom:

Certainties for the year to come • Business will continue to go where it is invited and remain where it is appreciated. What is your company’s strategy for inviting new customers to do business with you? No matter how good your company is, you’re probably going to lose some customers this year. Replacing them merely keeps you even. To grow, you have to create more customers than you lose. While you’re thinking about new customers, ask yourself if you have a strategy for hugging your current customers. Your current

customers will stay loyal as long as they know you care. • Reputations will continue to be made by many acts and lost by one. A customer MIKE VARNEY service expert I once heard speak said, “Customers will remember you by only two acts of customer service: their best experience and their last experience.” Great companies have customer service down to a science and it shows. There’s quite a bit of difference between the clerk, who when thanked by a grateful customer responds, “My pleasure,” and the ubiquitous uncaring response heard from most clerks: “No problem.” • People will go on preferring to do business with friends. It’s true. We do business with people we like. We even give people we like a little margin for error once in a while because we like them and want to see them

InsideTucsonBusiness.com

succeed. Southwest Airlines just sent me some free drink coupons for my birthday. Nice. And they don’t charge a change fee when I screw up a reservation. Nice. Guess which airline I check first when making reservations? Being friendly and making it easy to do business has advantages. • Performance will continue to outsell promises. Have you seen the latest craze with plumbers, electricians and cable company installers? They are starting to guarantee they will arrive on time. Doing what you say you are going to do when you say you are going to do it used to be the stuff reputations were built on. Now, it’s so out of the norm that it has become novel again. Performance will always outsell promises. • Trust, not tricks, will keep customers loyal. The explosion of online product and service ratings opportunities, Angie’s List, etc. are the latest ways we consumers have to find out who we can trust and who we can’t. Trust is a powerful force in business. People want a square deal, not fast talk and excuses. Trust is the stuff customer referrals are made of.

Are you confident that Congress achieved a good resolution in the “fiscal cliff” issue? Yes 7.7% No 92.3%

Next week’s poll: What do you think should be the top priority of the Arizona Legislature in the 2013 session: Funding education Simplifying the tax code Restoring funding for roads Enhancing trade with Mexico Reducing regulations

• The extra mile will have no traffic jams. I once knew a sales rep who drove four hours each way to see an important customer when the customer was planning to make a major purchase. The rep’s competitors stayed home and used the telephone to reach out to the customer. Guess who got the sale? Another rep I know made a sales call at 2 a.m. on a company that did its baking production in the middle of the night and was too busy serving what they made to customers during the day to see sales reps. Guess who got the sale? • Enthusiasm will be as contagious as ever. Yup. There is just no substitute for fire in the belly. When you like what you do it shows — and it’s contagious. Have a great year of success in 2013.

Contact Mike Varney, president and CEO of the Tucson Metro Chamber, at mvarney@tucsonchamber.org or (520) 792-2250. His Advocating for Business column appears monthly in Inside Tucson Business.

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