Inside Tucson Business 01/18/2013 by Territorial Newspapers

ZEMAM’S ETHIOPIAN CUISINE From refugee to entrepreneur: An owner’s pursuit of happiness PAGE 12

Your Weekly Business Journal for the Tucson Metro Area WWW.INSIDETUCSONBUSINESS.COM • JANUARY 18, 2013 • VOL. 22, NO. 33 • $1

GET READY to RUN

Arizona seeks a sixth ‘C’ Gov. Brewer adds ‘competition’ into state’s 5-C legacy Page 3

Getting more with less juice Working to cut supercomputers’ super use of power Page 15

Real estate’s bona fide recovery

George Howard

After 6 years, the free fall is finito Page 19

At the Tucson Association of Realtors 2013 Forecast, economist Lawrence Yun, left, explained to TAR president Cathy Erchull and TAR CEO Phil Tedesco why Tucson is “uniquely positioned” for a run-up in housing prices this year.

NOMINATE TODAY

Search is on for 2013 Up & Comers honorees Inside Tucson Busienss Here’s your chance to make some news. Positive news. Starting today, Inside Tucson Business is launching its annual search for Up & Comers. This will be the 11th year of the special recognition in which nine people will be selected from your nominations. We’re looking for people who, while still early in the careers, are already making a difference for the better, on the job, in the community

or in some other fashion. In keeping with the notion that these are Up & Comers who are destined to make even bigger contributions there is an arbitary age limit: All nominees must be under the age of 45. Other than that, it can be difficult to pinpoint exactly what makes an Up & Comer. We know they’re committed to making a difference, whether it’s their chosen career paths, overall leadership, in some form of community service, mentoring or doing

good in some other way. Sometimes they’re people who are making a difference but have been overlooked. We’re looking for the qualities in a person you think are making the crucial difference that will make the Tucson region better in the future. Nominations are being taken online at www.InsideTucsonBusiness. com. Look for the Up & Comers icon. Click on it to find the form. If you’ve been through this exercise in previous years but were overwhelmed

by the form, please check out this year’s form. We’ve tried to make easier than ever. Self-nominations are welcome. The deadline to submit nominations is 5 p.m. Feb. 18. Then, look for our honorees to be profiled in a special section in the April 12 issue of Inside Tucson Business, which will be followed up by a special reception. Here’s looking for your nominations and honoring those who will make a difference for Tucson.

2 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

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InsideTucsonBusiness.com

JANUARY 18, 2013

NEWS

Economic competition also on Brewer’s platform

Kozachik switches to Democratic Party

Buried in all the buzz about Gov. Janice Brewer’s plan to now have the state participate in ObamaCare were her businessrelated proposals to make Arizona more competitive. In her State of the State address on Tuesday (Jan. 15) in Tucson at the Westin La Paloma Resort and Spa, the governor said her 2013 business agenda will focus on “removing the barriers to economic growth in Arizona.” Specifically, the governor called for reforming the state’s sale tax system. Sales taxes are the most critical source of revenue for core state programs but “one of the most complicated systems in the nation,” she said. “It is an accountant’s dream but a business owner’s nightmare. Arizona’s local and state governments have created a tax system with so many twists and turns that we make it difficult for businesses to simply pay what they owe,” Brewer said. A menu of reforms will be considered, such as standardized licensing, centralized auditing, state-run collection and changes in the construction industry. “This complicated system acts as one more barrier to economic growth. This has gone on long enough,” said Brewer. Historically, Arizona has relied on its famous “five C’s” to drive the economy: copper, cattle, cotton, citrus and climate. But as the state enters is second century, Brewer added another “C” to the mix: competition. “Today, Arizona must compete for the most desirable jobs for our citizens, the finest teachers for our schools and the most talented students and faculties in our universities. Likewise, citizens must compete to earn a living, build a future and raise a family,” she said. To prepare for the future, state legislators had to address the financial crisis of the past. Fallout from the Great Recession crushed the real estate market, cost the state 300,000 jobs and caused a $3 billion budget deficit. To put the state back on the road to recovery, lawmakers made many unpopular and

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

Kevin Van Rensselaer, KVR Creative

By Roger Yohem Inside Tucson Business

Gov. Jan Brewer and Tucson Metro Chamber CEO Mike Varney.

tough decisions. Brewer credited legislators for working together to restore the state’s financial stability. Today, the budget is balanced and $150 million has been restored to the “rainy day” fund. “Together, we made great strides in the past four years to improve Arizona’s competitive position. We faced the hardest of times, but sustained and strengthened state government through the downturn,” she explained. “We’ve limited regulation and enacted the largest and most deep-reaching tax cuts in state history.” Per capita, Arizona now has the secondlowest number of state employees in the nation. The state’s personnel system was reformed to maintain a stable workforce that is motivated by performance and accountability. “In this new economy, talent is king. Cre-

ativity is the new capital and competition is worldwide,” she said. To move forward, Brewer emphasized that education is the “most fundamental and lasting key” to Arizona’s competitiveness. The state’s universities are critical economic drivers and every year, the state awards $1 billion in research funding. The University of Arizona receives more than 60 percent of that funding. “As Arizona fights to compete in the years ahead, I know our universities will be among our greatest assets,” Brewer said. The State of the State Address was presented by the Tucson Metro Chamber. Brewer took the podium and received a long standing ovation from over 700 people in attendance. Contact Reporter Roger Yohem at ryohem@ azbiz.com or (520) 295-4254.

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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.

Tucson’s outspoken Ward 6 City Councilman, Steve Kozachik, has changed his party registration from Republican to Democrat. “The Arizona Republican Party is an ideological outlier. I am not, and I see nothing that indicates that leadership is inclined to move in any direction but further away from what I believe are the values of this community,” Kozachik wrote in a statement explaining his decision. Kozachik has often clashed with GOP leaders, particularly Republican members of the state Legislature, who he had accused of ideological rigidness and working against the interests of Southern Arizona. The councilman noted that he has often worked in a collaborative manner with his city council colleagues, all of whom are Democratic Party members. “During the past three years, I have maintained my commitment to study issues individually, invite to the table the diverse set of voices that make up our community, and participate in crafting public policy that attempts to reflect the varying points of view I have heard,” he wrote. Despite his generally pro-business positions and willingness to take on issues like Rio Nuevo, road maintenance and the potentially underestimated costs of operating the city’s streetcar project, many in the GOP had grown increasingly critical of Kozachik. There also was the looming possibility of the party running a primary challenger against Kozachik in this year’s election.

IRS requests Rio Nuevo documents for audit Rio Nuevo Multipurpose Facilities District officials this week said the Internal Revenue Service has requested documents for the purpose of an audit. The documents requested are related to a 2002 bond, which funded the $35 million purchase of the Tucson Convention Center from the city. Rio Nuevo then leased the facility back to the city. As part of the original law that established Rio Nuevo, the body was required to own or lease a multipurpose facility like the TCC to receive tax increment financing funds. Those funds are gathered from sales taxes paid within district boundaries, roughly from downtown to Park Place Mall along Broadway.

EDITION INDEX Public Notices Lists Profile Inside Media On The Menu Arts and Culture Briefs

6 7-9 12 14 16 16 17

Finance Real Estate & Construction Biz Buzz Editorial Classifieds

18 19 20 20 23

4 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

NEWS Arizona Commons II, a student housing complex near the University of Arizona, has been sold to a Phoenix investor for $5.6 million. The property, located at 1920 N. First Ave., was a financially distressed property held by affiliated entities of banks Wells Fargo Bank and Morgan Stanley. The complex features 247 student beds in 88 units, four swimming pools, a fitness center, recreation room and on-site laundry facilities. It was built in 1972 and last renovated in 2012. The buyer was MCS Capital Partners LLC of Phoenix. The seller was C-III Asset Management LLC, acting as special servicer for Wells Fargo Bank, as trustee for the holder of Morgan Stanley I Inc. commercial mortgage pass through certificates, series 2006 - 1st Quarter 2012. The sale represents a value of $63,636 per unit and $22,672 per bed.

Good Friday morning, at least we hope it is If you are reading this week’s printed issue of Inside Tucson Business on Friday morning, then the switch to direct delivery for you was a success. This week’s issue is the first to be delivered primarily by newspaper carrier. Over the past six weeks, Inside Tucson Business has been asking subscribers to switch their delivery address to their homes to take advantage of the new delivery system. Any subscribers who experience a problem with the new delivery system can report those either online at www. InsideTucsonBusiness.com or by calling (520) 295-4219. Redelivery on Saturday is available for missed copies reported by no later than 11 a.m. Fridays. Subscribers who specifically requested they continue receiving their copies via the U.S. Postal Service will continue to receive them that way, as well as subscribers using post office boxes or living outside the Tucson region delivery area. Due to changes at the U.S. Postal Service, postal deliveries will be delayed, especially once the Tucson mail sorting center is closed in February. Any subscribers that would like to make a change in their delivery address can do so by emailing circulation@azbiz. com, printing their mailing address as it currently appears and the new address where you like to start receiving copies in future weeks.

Research Corp. president James Gentile to step down, return to academics By Patrick McNamara Inside Tucson Business After eight years as president of the Research Corporation for Science Advancement, James Gentile has decided to retire and move back into academics. “I wouldn’t have left the Research Corporation,” Gentile said. “This literally showed up at my doorstep.” Gentile plans to leave his position as president of the scientific-research granting organization and return to Hope College in Holland, Mich., where he’ll be the dean of sciences and a classroom instructor. He worked at the college for nearly 30 years before moving to Tucson to head the Research Corporation. “The Research Corporation was a great place to be,” Gentile said. During his tenure, Gentile said he was proud to have helped Research Corporation thrive during the down economy, helping to build new partnerships with other foundations and indusMORE INFO tries and helping to increase Research Corporation’s na- Research Corporation for James Gentile plans to retire from the Research Corporation for Sccientific Advancement. He has accepted a position as dean of tional profile through his fre- Scientiﬁc Advancement sciences at Hope College in Michigan. quent writings in publications 4703 E. Camp Lowell Drive “There’s a time dean of sciences. like the Huffington Post, Sci- Suite 201 “I’ll be replacing my replacement,” he when an organizaence Magazine, The Chronicle (520) 884-7810 tion has to stick its joked, noting the person hired to replace him of Higher Education and Sciwww.rescorp.org flag in the ground as dean in 2005 plans to move on. entific American. For Gentile, his volunteer work in Tucson and say, ‘success’,” The 100-year old Research Unified School District’s John B. Wright EleCorporation for Science Advancement, t now Gentile said. That new direction could look toward mentary School helped to reignite his interest headquartered at 4703 E. Camp Lowell Drive, was founded in 1912 by Frederick Gardner funding specific areas of scientific research in teaching. He and others in the community, many with University of Arizona connecCottrell, who invented the electrostatic pre- or directly funding scientists. Jack Pladziewicz, a former vice president, tions, have essentially adopted the mid-town cipitator, a device used to reduce the polluschool, donating time and money and giving has been named as interim president. tion pouring from industrial smokestacks. While he wasn’t planning to leave, Gen- science lectures. He started the organization with the inGentile said university centric collaboratention of buying inventions and patents then tile said organizational rules would have relicensing the technologies to industry. Profits quired he retire in four years at age 70. The tion with public schools should act as model to better educating area students for careers from the ventures were intended to fund sci- same holds for board members. Representatives from Hope College con- in the sciences. entific research. “It’s going to take a university center to Over the decades, Research Corporation tacted Gentile late last year to see if he was drive that,” he said. moved away from patent collection and fo- interested in returning to his old job. The region’s science-based industries also “The biggest hook for me was to get back cused mostly on funding scientific research should have a hand in strengthening educathrough grants. It has funded the work of into the classroom,” Gentile said. He plans to keep the job on a transitional tion by working with schools to build curricuthousands of scientists, 40 of whom have lums designed to meet their employment basis for two years. been awarded Nobel prizes. Gentile worked much of his career in aca- needs, Gentile said. In 2011, it had assets valued at more than The Tucson region’s growing bio-tech and $128 million and gave out $3.6 million in demics. Originally from Chicago’s south side — high-tech economies have great potential, grants. The organization came to Tucson in 2003 home of the White Sox, he reminds — Gen- Gentile said, but that has yet to be fully realtile earned an undergraduate degree from St. ized. but maintains a New York charter. “I think Tucson should diversify in the Many of its board members also live in the Mary’s University of Minnesota. He went on New York area and the northeast. None of the to earn a master’s and doctorate from Illinois scientific industries,” he said. “That would be State University and spent two years at Yale my recommendation — bio-tech is great, but board members lives in Tucson. “From a stepping down standpoint, the University conducting post-graduate work in I think we need a diversified portfolio.” human genetics. timing is right,” Gentile said. In 1976, Gentile began teaching biology Contact reporter Patrick McNamara at He said the group has reached a stage at Hope College and later was promoted to pmcnamara@azbiz.com or (520) 295-4259. where it should re-evaluate its focus.

Research Corporation for Scientific Advancement

Arizona Commons sold for $5.6 million

InsideTucsonBusiness.com

JANUARY 18, 2013

NEWS

George Howard

Loose fiscal policy will boost housing market for 2 years

Lawrence Yun, chief economist for the National Association of Realtors.

By Roger Yohem Inside Tucson Business Mortgage rates that are at “unimaginable, life-time lows” will boost the housing market for two more years before inflation returns. Home prices in the Tucson region could increase by as much as 10 percent on average this year. In the short term, the Federal Reserve’s “ultra loose” monetary policy, known as Quantitative Easing, will sustain the nation’s slow recovery from the Great Recession. This strategy allows banks to borrow money from the government at virtually zero percent interest. Looming on the horizon, however, are seriously dark economic clouds in the form of trade and budget deficits. “Although the fiscal cliff was avoided, it did not solve the budget deficit issue. The deficit is scheduled to go up and up, it is out of control. Put it this way, you have a $1,000 credit card debt and your rich uncle helps by giving you $60. Is that going to help your debt situation? That was the

deal that was signed,” said Lawrence Yun, chief economist for the National Association of Realtors. “There will be a continuing war of nerves in Washington, D.C. The debt ceiling comes up in about two months,” he said. Yun was the keynote speaker at the Jan. 11 Tucson Association of Realtors’ 2013 Real Estate Forecast. Quantitative Easing is a “non-traditional” fiscal policy that enables the government “to run the economy by printing a lot of money. Inevitably, that means higher inflation by 2015,” Yun explaind. At that time, he projects inflation will be 4 to 6 percent. For 2012, the rate was about 2 percent. This year he expects inflation will tick up slightly. And although growth in the gross domestic product is essentially zero nationally and net job creation locally “has flat-lined,” the next two years look promising for real estate in the region. “Inflation and interest rates are related. So even if mortgages go up to 4 percent, it’s nothing to panic about. Tucson

is uniquely positioned for housing price increases,” said Yun. Looking back, 2005 was housing’s bubble year and 2008 the crash. In 2009, housing data had already started to stabilize as measured by unit sales. Prices, however, were still in a free fall as the U.S. dealt with the financial market crisis and 8 million lost jobs. “From my perspective, the data was stabilizing. Not the market. We still had an economy where 90 percent of the population had jobs. From your perspective, 2009 was awful. And 2010 and 2011 were awful. In 2012, things were breaking out because prices always lag sales,” Yun said. “This momentum will continue into 2013.” Last year, Phoenix was one of the nation’s hottest price-recovery markets. Investors drove prices up 20 to 25 percent and bought thousands of homes at bargain prices. For investors still wanting distressed real estate, “Phoenix is no longer in play. Many will look to surrounding areas like Las Vegas and Tucson,” said Yun. Nationally, most housing trends will find and benefit the Tucson market. Job creation, “foot traffic,” new home construction and total sales were higher last year. Distressed “shadow inventory” is falling and listings are trending down. For five consecutive years, household formation has been suppressed. “This is highly unusual, rare to have such an extended period. There are many, many people living in crowded spaces,” Yun said. “Young adults moved in with their parents or found that third or fourth extra roommate. In 2012, we saw a bursting out and that increases housing demand.” Housing is now one of the economy’s strengths, but Yun cautioned the sector still faces uncertainties. Although the economic metrics are positive, the downside concerns are almost all political. Facets of the housing industry “are seen as potential sources of revenue in Washington. The downside is potential regulation,” Yun said, “including continuing tight underwriting standards.” Given the nation’s massive budget deficit, the home mortgage deduction will continue to be in play. Other issues include a capital gains and/or sales tax on home transactions, larger down payment minimums and higher loan processing fees. “Certainly two years from now, mortgage rates will be measurably higher,” Yun said. Contact reporter Roger Yohem at ryohem@azbiz.com or (520) 295-4254.

This Week’s

Good News Great weather The six consecutive nights of below freezing temperatures Tucson experienced through Wednesday were miserable. How many of us would have traded those for a hot dry 110-degree day in June? The fire danger in June, though, is another matter. So why are freezing temperatures good news? Because when it comes to weather, this is about as bad as it gets. This weekend, temperatures are supposed to be back into the 70s. And more than 300 soccer teams from all over Arizona, New Mexico, west Texas and Sonora will descend upon Fort Lowell Park and other venues for the 22nd annual Tucson Association of Realtors Shootout to enjoy the weather and some good times.

The Tucson

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

Beware of car bargains Anyone shopping for a late-model car who comes upon a terrific bargain might want to do a little more checking. Thousands of cars that were damaged by flooding as a result of Superstorm Sandy in late October are now being sold in auction, presumably for their salvageable parts. But as many as 20 percent could have their titles “washed” and re-sold whole. Arizonans have some safeguards, mainly because it is one of only nine states fully participating in a federal database tracking every vehicle title history electronically by VIN. Experts say ask for a vehicle history report, such as CarFax, and make sure it’s recent, doesn’t include any time gaps or the tell-tale sign of a short stay in any state.

Together again Considering the bad rap private venture capital firms such as Bain Capital took during last year’s election, Tucson area consumers have witnessed a success story over what Cerberus Capital Management has done with about 300 underperforming Albertsons supermarkets since acquiring them in 2006. Another 300 Albertsons stores were acquired by Supervalu, a chain based in Minnesota. The financial fortunes of the two halves of Albertsons have been reversed. In mid-March Cerberus will reunite the chain along with three others, Acme, Jewel-Osco and Shaw’s — under a $100 million in cash plus $3 billion debt deal. The acquisition includes 877 stores and will bring the company to a total of 1,069 stores across the country. Of the original 300 Cerberus acquired in 2006, the company is now operating 197. Not a single Albertsons was closed in the Tucson market which was and remains strong.

6 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

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

FORECLOSURE NOTICES SC118119 LLC 5263 W. Gallery Canyon Place, Marana 85658 and 1226 W. Weathered Stone Place, Oro Valley 85755 Tax parcel: 218-40-505 and 219-19-4470 Original Principal: $400,000.00 Beneﬁciary: Northern Trust Company Auction time and date: 10 a.m. April 4, 2013 Trustee: Elizabeth S. Fella, Quarles & Brady, 1 S. Church Ave., Suite 1700

LIENS Federal tax liens El Sol and Mark S. Mendoza, 1905 E. Elm St. Amount owed: $28,575.78. Mikes Artist Mgmnt Co-MJLJR Propert and Michael J. Lembo Jr., PO Box 35880, 85740. Amount owed: $11,299.21 Blue Horizon Consultants LLC and Daniella Zepeda, 890 E. Pentecrest Road. Amount owed: $3,928.65. Asian Bistro Osake LLC and Mitsuyuki Watabe, 5414 N. Moccasin Trail. Amount owed: $5,796.80. Bahti Indian Arts and Bahti Inc., 4330 N. Campbell Ave., Suite 73. Amount owed: $62,596.76. Fred’s Carpentry and Fred Alonzo Slunaker, 7590 W. Illinois St. Amount owed: $11,460.69. Pryde Business Systems LLC and Lyle S. Wood, PO Box 31888, 85751. Amount owed: $8,057.57. Coupe’s Village Bakery and Thomas Scott, 706 W. Mountain Ridge Drive, Oro Valley. Amount owed: $27,115.10. Langley Village Bakery and Thomas Scott, 706 W. Mountain Ridge Drive, Oro Valley. Amount owed: $16,291.27. Ross Intertraders LLC and Samuel Sainz Rodriguez, PO Box 35381, 85740. Amount owed: $1,062.05. HDA Impression Preservations and Matthew Lyman Disraeli, 4990 W. Waterbuck Drive. Amount owed: $24,137.86. Oasis at Wildhorse Ranch LLC, 6801 N. Camino Verde. Amount owed: $1,270.00. MDB-Tucson Distributors Inc., 7006 W. Dupont Way. Amount owed: $10,061.52. Carefree Landscaping Inc., 2075 E. Benson Highway. Amount owed: $1,068.00. Amereno’s Little Italy and Bon Seba LLC, 2933 E. Grant Road. Amount owed: $33,384.36.

State liens (Liens of $1,000 or more ﬁled by the Arizona Department of Revenue or Arizona Department of Economic Security.) Production Contracting Inc., 744 E. 34th St. Amount owed: $2,821.32. Better Bodies Personal Training Corp., 7285 E. Tanque Verde Road, Suite 135. Amount owed: $7,790.52. Le Gourmet Inc., 7573 E. Truces Place. Amount owed: $2,437.62. IRI Sabino Springs Golf Cource LLC and Arizona National, 11622 El Camino Real, Suite 100, San Diego. Amount owed: $17,163.26. Vistoso Golf Course LLC, 955 W. Vistoso Highlands Drive, Oro Valley. Amount owed: $23,866.26.

Mechanics liens (Security interest liens of $1,000 or more ﬁled by those who have supplied labor or materials for property improvements.)

CMR Construction LLC, PO Box 26725, 85728, against Ventura Paciﬁc Development, 2469 N. Country Club Road, and Pennington Street Partners LLC, c/o Fenton Investment Co. Inc., 6700 N. Oracle Road, Suite 233. Property: 101-103 E. Pennington St. Amount owed: $11,164.50. FJS Construction, 585 S. Cherry Ave., against Southwest Gas Corporation, PO Box 98510 LVC435, Las Vegas 89193 and Midstate Mechanical Inc., 1850 E. Riverview Drive, Phoenix. Property: 3401 E. Gas Road. Amount owed: $7,302.70. Intermoutain Lock & Security Supply Co. Inc., 306 S. Main St., Salt Lake City, against JMDH Real Estate of Tucson LLC, 1265 N. Kraemer Blvd., Anaheim, Calif. Property: 601 W. 22ndSt. Amount owed: $2,784.24.

Bio-tech in Tucson growing, but has challenges By Patrick McNamara Inside Tucson Business Tucson has small but growing bio-tech and medical technology industries. At a Greater Tucson Leadership class meeting on healthcare issues at Tucson Medical Center this month, attendees heard from industry leaders about the challenges and strengths of the bio-tech sector. Mara Aspinall, president of Ventana Medical Systems; Kathleen Perkins, board chair University of Arizona Bio 5; and Dr. Carolyn Compton, CEO and president of the Critical Path Institute (C-Path) were on hand to speak with the Greater Tucson Leadership class, which meets one Friday each month to learn from experts from specific industries. Perkins told the group that a strong suit for the industry in general has been a new spirit of collaboration among researchers. “Things are not happening in individual scientists’ offices like they used to,” she said. In addition, scientists more frequently work across disciplines to solve problems and further research. “C-Path is all about collaboration,” Compton said, addressing the issue of strengths in the bio-tech industry. She said the group brings together the work of more than 1,000 scientists and researchers with the goal of getting more medications to market faster. C-Path also works closely with the U.S. Food and Drug Administration to get new medications approved, a process that in past could take as long as 10 years and cost as much as $11 billion, she said. “There is a new collaborative business model,” Compton said. “The old megabreakthrough drugs in medicine are going the way of the brontosaurus.” Aspinall said Ventana Medical, which was bought by international pharmaceutical company Roche in 2008, also has begun to work in collaboration. “We collaborate well, but we don’t collaborate as well as we should,” Aspinall said. As to where the industry stands today in terms of jobs and building the much sought after industry cluster, like the high-

tech cluster that came together in Silicon Valley, the foundation has been laid but there’s still a way to go, Aspinall said. “We have made tremendous progress, but we’re not where we need to be,” she said. As more companies relocate to Southern Arizona and more startups emerge, a critical mass could develop that would make the region a real player in bio-tech. As that continues to develop, however, Aspinall said the industry will begin providing more and varied employment possibilities. “Bio-tech is not an industry with all Ph.D.’s,” she said. “It’s like any other industry, there’s a full universe of different jobs that need to be done.” While a company like Ventana has little trouble filling positions, Aspinall said some people have turned down offers because they didn’t want to live in Tucson. Perkins said that speaks to a problem of identity that Tucson has. “Tucson is still working on its image,” Perkins said. She said places like Silicon Valley, Boston and New York all are known to people outside of the market. Even a smaller market like Austin, Texas has a recognizable image. “Austin is a place where you can get a job in 48 hours if you’re a scientist,” Perkins said. Leadership class attendees also heard from experts on issues of mental health, healthcare economics and pediatric care. Nancy Johnson, chief operating officer of El Rio CHC; Jennifer Cabe, executive director of Canyon Ranch Institute; Cyndi Thompson, with the UA Zuckerman College of Public Health;

As more companies relocate to Southern Arizona and more startups emerge, a critical mass could develop that would make the region a real player in bio-tech.

Julia Strange, vice president of community benefit with Tucson Medical Center all spoke about collective impact in healthcare. Neal Cash, president and CEO of Community Partnership of Southern Arizona; Mimi Kennedy- Ross, psychology associate with Arizona State Prison; Clarke Romans, executive director for the National Alliance on Mental Illness of Southern Arizona; Mary Redding-Smith, attorney with the Military Spouse Mental Health Professional Association talked about mental health. Dr. Matt Heinz, a former state representative; Dr. Daniel Derksen, professor and chair public health policy and management; Larry Aldrich, chairman and executive director of Arizona Business Coalition on Health spoke about the economics of healthcare. Shay Beider and Jamie Lakin Kelley of Integrative Touch for Kids and Ciara Garcia and Liz McCusker from Tu Nidito spoke about pediatric care issues. Greater Tucson Leadership selects a class of about 35 community leaders each year to attend a series of forums once a month from August through May.

Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259.

InsideTucsonBusiness.com

JANUARY 18, 2013

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10 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

SALES SALES JUDO

Selling Tucson to entrepreneurial college grads with suds and music One evening last week, I drove around downtown searching among the open trenches and building construction for the new Thunder Canyon Brewery. Rumor had it that its owner, Steve Tracy, had OKâ&#x20AC;&#x2122;d the â&#x20AC;&#x153;softâ&#x20AC;? launch of his second location in the region. For those who may not know, Tracy is a talented entrepreneur who transitioned from a first career as a mining engineer to a second as brew master, restaurateur and, in effect, an accidental member of downtown Tucsonâ&#x20AC;&#x2122;s economic team. I spotted his new location as I rolled past it driving east on Broadway just beyond Fifth Avenue. Itâ&#x20AC;&#x2122;s right across the street from the Cadence, a six-story 456-bed student housing development thatâ&#x20AC;&#x2122;s going up and due to open in August. When I slid onto a stool at the bar at the new Thunder Canyon Brewery, on my left sat Gil Gonzales, a doctor and communicable disease investigator for the county. We talked and bought each other a round. He and I are Vietnam vets and we swapped a few stories. Gonzales shoved off to get home in time for dinner with his 10-year-old daughter and 35-year-old wife, which would sound

unremarkable unless you knew that Gonzales admits to being 70. With time to myself, I thought back to my first exposure to downtown Tucson in June 1971. At SAM WILLIAMS that time, downtown was dying. I was 22 and a Captain in the U.S. Armyâ&#x20AC;&#x2122;s Intelligence Branch. I had been assigned to a course at the Intelligence Training School at Fort Huachuca. The school had just been relocated from Fort Holabird near Baltimore in Maryland. The move was made to improve security but it also created some training issues. Two of the courses then taught at the school, counterintelligence and case officer training, required students to learn how to follow people on foot and how to load and unload dead drops in metropolitan settings. Foot surveillance turns out to be an amazing minuet, where the â&#x20AC;&#x153;rabbitâ&#x20AC;? â&#x20AC;&#x201D; the

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person to be followed â&#x20AC;&#x201D; has a team of three agents assigned to trail him or her, one behind, one abreast and one across and parallel to the one behind. This creates a box-like formation of four people walking down the sidewalks on either side of a city street with the rabbit at a forward corner. Now imagine a training class fielding eight of these â&#x20AC;&#x153;boxesâ&#x20AC;? totaling 32 people practicing foot surveillance from 1 to 4 p.m. on a June day in 1971 downtown Tucson. The teams assembled at what was then the Walgreens store â&#x20AC;&#x201D; now the University of Arizonaâ&#x20AC;&#x2122;s downtown building â&#x20AC;&#x201D; at the southeast corner of Stone Avenue and Pennington Street. Each team was on the lookout for their rabbits whose photos they had been given. Often, a rabbit would walk right past the team and, not being recognized, would double back, tap the team leader on the shoulder and say in a sotto voce, â&#x20AC;&#x153;Psstâ&#x20AC;ŚIâ&#x20AC;&#x2122;m the rabbit.â&#x20AC;? And off a gaggle of agents would go. The teams had to practice within the confines of those parts of the city with buildings, and this was an issue. Many buildings had been closed or abandoned, so the teams had to jink around a limited number of street corners. But that wasnâ&#x20AC;&#x2122;t the half of it. Dead drops â&#x20AC;&#x201D; places to hide messages and film â&#x20AC;&#x201D; had to be loaded and unloaded and drop status signals, chalked on telephone poles and the walls or corners of buildings. One of the recommended places for dead drops was under the ledges of retail display windows, such as those in the fronts of jewelry stores. Teams would use magnets and adhesives to affix small plastic film canisters to the undersides of the ledges. The problem was that, as more and more retailers left downtown and boarded up their display windows, there were fewer and fewer candidates for plausible sites. To sum it up, 40 years ago these teams had a first-hand view of downtown Tucsonâ&#x20AC;&#x2122;s decline. But I think thatâ&#x20AC;&#x2122;s changing, thanks to Tracy and entrepreneurs like him as well as the UA and its Eller College of Management. In the late 1980s, years after I had left the Army, I was on a business trip to Austin, Texas. It was then in a deep recession caused by a sharp drop in oil prices. I remember walking along Austinâ&#x20AC;&#x2122;s Congress Avenue and seeing most of the windows on the ground floors of office buildings boarded up, just like those I remembered in Tucson. Ten years later, the plywood was off the windows and Austinâ&#x20AC;&#x2122;s economy had turned around. I was told that one of the major reasons this happened was the McCombs Business School at the University of Texas at Austin and its work with the cityâ&#x20AC;&#x2122;s economic development people to come up with a business plan. One of the most important elements was

harnessing the ideas and talents of young entrepreneurial graduates, commercializing intellectual property developed at UT and turning these into the start-ups and ramp-ups that created high-paying jobs to be filled by residents and graduates. The trick was to keep both good ideas and talent in Austin. Fortunately, the city already had a developed and growing social scene consisting of six blocks along Congress Avenue with cafes, bars, breweries and theaters, most of them with live entertainment and music. They were excellent venues for UT singles, professionals and young-marrieds to mingle and an attractive force for them to remain in the city. Along the way, the venture capitalist community came to stay. One of Silicon Valleyâ&#x20AC;&#x2122;s premier law firms and king makers, Wilson Sonsini Goodrich and Rosatti, set up shop. Austin Ventures contributed to growth with its $3.9 billion. ARCH Ventures, Accent Capital, G-51, Blue Sage and Adams Capital also appeared. There was a strong MIT Club and an Angel Investor group, as well. But things werenâ&#x20AC;&#x2122;t always rosy in Austin. The dot com crash at the beginning of this century had as spectacular an impact as did the oil crash in the mid-1980s. But the McCombs Business School and Austin economic developers did their thing and the economy rose once more like a phoenix. As I sat at the new Thunder Canyon Brewery, I felt downtown Tucson might also be headed in this direction. The Eller College of Management has directly engaged with Tucson. Its new dean, Len Jessup, is the first major player at the UA to have become a board member of the Tucson Metro Chamber. He also has advanced the UAâ&#x20AC;&#x2122;s programs to license and to commercialize its vast resources of intellectual property. Leslie Eldenburg, former vice dean at Eller, has performed her own â&#x20AC;&#x153;stealth launchâ&#x20AC;? of the Eller Economic Development Program, which is funded by the JP Morgan Chase Foundation. The program was pioneered at the University of Washingtonâ&#x20AC;&#x2122;s Foster School of Business, and its executives claim that it has added 6,000 jobs to the Seattle-Tacoma area. Stephen Gilliland, head of Ellerâ&#x20AC;&#x2122;s Department of Management and Operations, has also quietly launched a growing number of â&#x20AC;&#x153;spot educationâ&#x20AC;? programs for Tucson-area executives to improve their business and management skills. Itâ&#x20AC;&#x2122;s a great new place downtown. Grad students and young professionals will like it, too.

Contact Sam Williams, president of the business-to-business sales consultancy firm New View Group, at swilliams@newviewgroup.net or (520) 390-0568. Sales Judo appears the first and third weeks of each month in Inside Tucson Business.

InsideTucsonBusiness.com

JANUARY 18, 2013

GOOD BUSINESS TECHNICALLY SPEAKING

When is choosing a VoIP phone system a marcom decision? Last month column about the importance of keeping Internet-related user names and passwords secure, led one reader to bluntly point out I made no explicit point about marketing and communication (marcom). My writing appears in Inside Tucson Business as “Technically Speaking,” but those same pieces (and about three more per month) also appear on my blog (www.netoutcomes.com) as “Marketing Bytes.” With marcom depending so much on technology, the question becomes: “Can we draw a line between marcom and technology issues? The line gets blurred in so many ways it can be hard to see. One example of the blur is VoIP (Voice Over Internet Protocal) phone systems. VoIP has become popular for many reasons. A key appeal is simple economics. To use a multi-featured, traditional land-line, carrier-connected phone system, an organization usually must make a substantial investment in the phone system itself. VoIP systems, on the other hand, are sold as “free” as long as the organization agrees to terms involving monthly payments over one or more years and separately pays for the Internet bandwidth required to support VoIP. VoIP systems offer other advantages, such as a greater array of features than provided through traditional land-line phone systems. VoIP systems may also come with some oddball issues, including an organization losing its 411 Directory Assistance listing. Depending on the VoIP vendor and how its system is deployed, the organization using VoIP may not be listed in Directory Assistance. With Google and countless other online directory resources available, does an organization really need to be listed in Directory Assistance? Here’s one way to get to an answer. Suppose we were to ask each of four generations this question: “Do you use Directory Assistance?” Gen Y might answer, “Directory what?” (that means “No”). Gen X might respond, “I’ve heard of it but I don’t have a land line and my mobile company charges $1 per use, so I never use Directory Assistance.” Baby Boomers would probably say, “Sure. I still use it from time to time.” Silent Generation members would say, “Of course. I use it whenever I don’t know the phone number.” You might not agree with these characterizations. Or you might have have other issues. Great. That just proves the key point: Any discussion about whether a target mar-

ket uses Directory Assistance raises a marcom issue, not a technology issue. The fact is organizations that go with a VoIP system are not always automatically listed in DAVE TEDLOCK directory assistance. In fact, dig into Google search results and you’ll probably find at least one VoIP vendor, we’ll call him “Mr. VoIP,” who says VoIP makes it impossible to have a Directory Assistance listing. Technically, Mr. VoIP is wrong. An organization can use a VoIP system and appear in Directory Assistance. There’s no space and no need to explain the intricacies of how Directory Assistance works here. The fact is a capable VoIP vendor can get an organization listed in Directory Assistance and, drum roll, like other technologies, VoIP can raise other marcom issues, including voice quality and the handling of incoming calls. In short, VoIP has a marcom component. So does the proper use of user names and passwords in order to prevent a person’s online services from getting hacked. Getting an email account hacked can bring up marcom issues: 1. Customers, referral sources and prospects may get spammed. 2. Email sent and received in confidence, if it’s saved to the cloud, is no longer confidential. 3. The person who got hacked has to admit to not taking adequate precautions or to choosing a bad email vendor. Speaking of admissions, I have to admit here the critic mentioned in my opener had two additional, valid complaints. An apology was required. That plus a client’s VoIP problems were probably the source of a headache and some humble pie. Later the same day, another reader asked our firm to change her email address and added to me, “... I so love the work that you do and I don’t want to miss a word. You totally rock.” My headache vanished. She made my day, and my week.

Contact Dave Tedlock, president of the website development and marketing company NetOutcomes, at dave.tedlock@netoutcomes. com or (520) 325-6900, ext. 157. His Technically Speaking column appears regularly the third week of each month in Inside Tucson Business.

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12 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

PROFILE

Zemams Ethiopian Cuisine: an ownerâ&#x20AC;&#x2122;s pursuit of happiness By Max Efrein Inside Tucson Business

BIZ FACTS

Zemams Ethiopian Cuisine 2731 E. Broadway www.zemams.com (520) 323-9928 Hours: 11-2:30 p.m. and 4:30-9:30 p.m. Tuesdays through Sundays

A customer enters Zemams Ethiopian Cuisine, 2731 E. Broadway.

Max Efrein

Amanuel Gebremariam casually paces his restaurant, Zemams Ethiopian Cuisine, taking orders, checking up on customers, and bringing out food. Manager, cook, waiter, busser, he does it all. â&#x20AC;&#x153;I want to monitor everything,â&#x20AC;? Gebremariam said. Gebremariam came to the U.S. as a refugee more than 30 years from from Eritrea, an East African country just north of Ethiopia. After receiving an education first at the University of Maryland to study English as a second language and then the University of Arizona for a business degree, he worked a number of respectable jobs before concluding he wasnâ&#x20AC;&#x2122;t happy with what he was doing and decided to take a different path: the restaurant business. â&#x20AC;&#x153;My mother showed me how to cook, and I named the restaurant after my mom,â&#x20AC;? Gebremariam said. As with any business, it can be hard to make your business known and establish a solid clientele. However, with a good approach and mind set, Gebremariam feels anything is possible.

â&#x20AC;&#x153;In business you have to have good service, good location, and most of all, a good price,â&#x20AC;? Gebremariam said. â&#x20AC;&#x153;In a restaurant, you have to have consistency. There is no margin of error. If one customer is sick... you lose every customer.

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Owner Amanuel Gebremariam behind the register at Zemams Ethiopian Cuisine.

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But above all, itâ&#x20AC;&#x2122;s none stop job, you finish the days work, you season for tomorrow, tomorrow comes, seven days a week.â&#x20AC;? Zemams presents a down tempo ethnic environment. The walls are plastered with African dĂŠcor. The table layout is reminiscent of a small hometown diner. Faint Ethiopian lounge music sooths the nerves. All of which are characteristics that make this quaint restaurant so unique. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve been going to Zemams for a couple years now, and I love it,â&#x20AC;? said Emily Thompson-Bruder, a dance instructor. â&#x20AC;&#x153;I find it better than the other Ethiopian place downtown. The food is just better and I dig the environment.â&#x20AC;? The other location Emily referred to is Cafe Desta, an Ethiopian restaurant that opened about two years ago and is slightly

more modern in appearance. Instead of feeling threatened by the new establishment, Gebremariam embraces it. â&#x20AC;&#x153;I love that restaurant,â&#x20AC;? Gebremariam exclaimed. â&#x20AC;&#x153;It gave exposure to the African cuisines. See, if Tucson can support 20 Mexican restaurants, seven or 10 Chinese, and some other ethnic foods, why not two African? So I have to compete. If he does better than me, I have to try to do better than him â&#x20AC;&#x201D; it keeps me on my toes. Heâ&#x20AC;&#x2122;s a good friend of mine too.â&#x20AC;? The lack of concern may also have to do with Zemams longevity and the countless recognitions it receives on its food, including the Tucson Weeklyâ&#x20AC;&#x2122;s Best of Tucson and the Tucson Zagat Survey. For nearly 20 years now, Gebremariam has managed to keep his busi-

Promoting a strong local economy. Join the Tucson Metro Chamber today. Phone (520) 792-1212 or visit TucsonChamber.org.

Email your information to jahearn@azbiz.com

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Growing Businesses. Building Communities.

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Tucson ter

um a

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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ness afloat and says he has had very little difficulty maintaining success, even with the recession of the past few years. “I’m really fortunate, you know, with all the economic turn around, ups and downs, it hasn’t affected me, its very consistent,” Gebremariam said. He attributes much of his success with having stayed small, local and not overextending himself. “We know almost all of our customers by name,” Gebremariam said with a chuckle. “Amanuel’s great,” exclaimed Grant Kadowaki, a videogame designer. “He’s always here working during lunch, so I try to go during that time to say hello.” After resisting for so many years, Gebremariam is finally looking to expand. “We are planning on opening another restaurant around the Fourth Avenue area. I am looking for property to buy. Once I buy that property, I want to do an upscale Ethiopian restaurant,” Gebremariam said. The new restaurant will have a full bar according to Gebremariam, a feature Zemams does not have and instead accommodates by having a bring-yourown-bottle policy and a $1.50 corking fee. Gebremariam also plans on featuring new recipes at the new restaurant, the identity of which he insists be kept secret. “All recipes are my mom’s, I’m trying to expand them now, since my mom’s perspective was a little bit narrow,” Gebremariam laughed out. “Americans like to eat with a fork and knife, so these recipes will be meant to be eaten this way.” Although Zemams provides customers the opportunity to use knives and forks, the owner and staff recommend eating the traditional Ethiopian style, with your hands. But don’t panic, diners are supplied with a hearty amount of traditional injera — sour pancake bread made of a North African cereal grass called teff — which is used an edible utensil. With only 16 main dishes on Zeman’s menu ranging from $9.25 to $13.75, and a combination platter option in which three dishes can be sampled, diners can try virtually every dish offered in only a handful of visits. “We are always busy,” Gebremariam said. He attributes his success to not only his hard work, but to the opportunities his adopted country provides. “Coming as a refugee to the United States, it’s a relief, because I don’t think anyone knows unless he or she has been a refugee themselves what to be a refugee is,” Gebremariam explaind. “We come scared, afraid, tortured, everything that could apply to any human being in a negative way. Here you come to this wonderful country that opens its hands, its house, and its heart. I came with a lot of hope, and a lot of happiness, cause the first time I came here, this was the first time I saw people smiling everywhere, in a refugee camp, you don’t see things like that.”

JANUARY 18, 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 Keynote Speaker: Jenny Coomler Jill O’Rourke Pamela Jett, Joy Hall Jett Communications, Inc. Kate Goldman Kevin Krieger Lily McCarthy Tuesday, March 12, 2013 Lisa Raines 2:00-5:00 pm Lori Prince 5:00 pm Champagne Toast Lupita Chavez Lynn Cosgrove Double Tree Hotel at Reid Park Mary Keysor 445 S. Alvernon Way, Pam Summers Rosemary Smith Tucson, Arizona 85710 Sandra Abbey Sandra Lueders Stephanie Pella Tim White

LO G Y t O N H C DERSHIP t DIVERSITY t TE

COMMUNITY

14 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

MEDIA

Ad agency vet Nordensson named Pima County communications chief By David Hatfield Inside Tucson Business After more than 39 years running his own advertising agencies, Jeff Nordensson started work this week as communications director for Pima County government. He replaces Sam Negri, who helped start the department in 2011 and retired in September. Negri and most of the other members of the 10-person staff are former news reporters. Nordensson’s experience is in marketing, public relations and advertising. Nordensson, whose salary is $102,000 per year, said he became interested in “telling the county’s story” a few years ago when his agency had been contracted to do an annual presentation called the State of the County. “I remember thinking at the time there are so many fascinating aspects and stories of what Pima County has to offer but there was no organized structure to get those stories out to people who could use them,” Nordensson said. “Each department did its own thing and they were all in separate silos.” Nordensson said his son Chris will remain a part of the Nordensson Group advertising agency. Nordensson said he also has permission from the county to continue as the voice of Bank of Tucson in radio commercials, provided bank CEO and President Mike Hannley wants to continue with those commercials. Nordensson started his ad agency in 1973 when he bought Jeffers Advertising, which had been founded nine years earlier by Arnold Jeffers, who later became Pima County Assessor. Jeffers died in September 2001. “I know it sounds polyannish, but I really feel like I’m finally going to put everything I’ve learned over the years to work in one great organization,” Nordensson said.

More names in news Changes at Journal Broadcast Group’s MixFM KMXZ 94.9-FM. Morning show personality Bobby Rich will celebrate his 20th anniversary this year and then some under a new “multi-year contract” that will keep him has host of the “Bobby Rich Morning Mix” show. In making the announcement, Shaun Holly, operations manager for Journal’s four Tucson radio stations, said Rich “has been the leading force behind Mix-FM’s ratings success since 1993 and is the most visible radio personality in the city.” For his part, Rich said, “I get to continue doing what I love at a radio station I love, in a town I love, with people I love. Also I’m not really qualified to do anything else.” Before coming to Tucson, Rich had worked, often in management positions, at stations in San Diego; Los Angeles; New York; Philadelphia; Miami, Fla.; and Seattle. One thing Rich is handing off at Mix-FM is the title of program director which goes to Leslie Lois who has worked at the station since 1999. At Arizona Lotus Corp.’s alternative rock station KFMA 92.1-FM/101.3-FM, Pete Mc-

Nair, who goes by the on-air name Creepy Pete, has been promoted to music director mid-day on-air personality. He’s been with the station for 10 years and is moving up from night host. Greg Dunkin, who was operations director at Journal Broadcast Group’s Tucson radio stations for about a year and a half until July 2006, this month was named operations manager and program for a pair of radio stations in Topeka, Kan., owned by Cumulus Media.

Tickets for the anniversary show are priced from $32 each on up to $102 for gold circle tickets that will also include a hosted reception with Lewis and other performers of the show including Tucson Mayor Jonathan Rothschild, U.S. Rep. Ron Barber, the Avanim Rock Band, local band Boreas and others. Buy tickets online at www.foxtuc-

sontheatre.org or at the Fox box office. Proceeds from the anniversary show will go to Jewish Family & Children’s Services of Southern Arizona.

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

TUCSON RADIO RATINGS Average share of listening audience 12 years old and older, Monday-Sunday 6 a.m. - midnight

New AZ Illustrated For those wondering why “Arizona Illustrated” has been replaced by repeats of “The Desert Speaks” since Jan. 2, Arizona Public Media says it has the show in for a major makeover. When it’s unveiled, the show will have a new look and format. On paper, they’ve even shortened the title to “AZ Illustrated,” though I’m not sure whether they’ll pronounce it that way on the air. Tony Paniagua, who has been the Monday-through-Thursday anchor since Kimberly Craft left in 2011 to work for the NPR station in Flagstaff, will continue to have a role in the revamped show. Also, the political round-table on Fridays hosted by Jim Nintzel of the Tucson Weekly, will continue. Target date for the return is Jan. 28. The show airs at 6:30 p.m. weekdays on KUAT-TV 6 and repeats at 9:30 p.m. on the PBS World channel, which broadcasts on KUAS-TV 27.3.

Radio ratings The latest quarterly radio ratings from Arbitron are out with the usual suspects, country KIIM 99.5-FM, adult contemporary MixFM KMXZ 94.9-FM and top 40 KRQ 93.7-FM ranking No. 1, 2 and 3, respectively. Stations that saw audience increases in these ratings, taken Sept. 13 to Dec. 5, are classic hits K-Hit KHYT 107.5-FM, NPR outlet KUAZ 89.1-FM/1550-AM, classical KUATFM 90.5-FM/89.7-FM and Spanish La Preciosa KTZR 1450-AM. Spanish La Caliente KCMT 102.1-FM saw a sharp drop, losing about 18 percent of its share of the market. That, coupled with the jump up by La Preciosa will be something to watch in future ratings. Otherwise most stations held their ground. (See table.)

Celebrate ‘Too Jewish’ A fun thing coming up March 2 to celebrate 10th anniversary of the “Too Jewish Radio Show with Rabbi Sam Cohon and Friends” will be a live radio variety show at the Fox Tucson Theatre, 17 W. Congress St., featuring comedian Richard Lewis. The anniversary show will be broadcast live beginning at 7:45 p.m. on KVOI 1030AM, which airs the show regularly from 9-10 a.m. Sundays.

Ranking This

Station

Format

Owner

SeptDec 2012

JuneSept 2012

SeptDec 2011

Cumulus Journal

9.0 8.2

10.1 8.5

9.6 7.7

Clear Channel Cumulus

6.1

7.6

7.7

5.5

5.0

4.5

5.2

4.3

4.6

4.5

5.5

3.7

4.3 4.3

3.7 4.1

3.9 3.6

4.0

4.3

4.2

3.6 3.5 3.1 3.0

4.8 3.2 2.6 2.1

4.4 2.8 3.3 2.7

3.0

2.8

3.1

Last

1 2

KIIM 99.5-FM Mix-FM KMXZ 94.9-FM

KRQ 93.7-FM

Country Adult contemporary Top 40 hits

K-Hit KHYT 107.5-FM

Classic hits

KUAZ 89.1-FM/1550-AM

NPR/jazz

KLPX 96.1-FM

Rock

7T 7T

10 9

KFMA 92.1-FM/101.3-FM KNST 97.1-FM/790-AM *

New rock News-talk

Hot 98.3 KOHT 98.3-FM

R&B hits

10 11 12 13T

6 11 13 15T

La Caliente KCMT 102.1-FM The Truth KQTH 104.1-FM The Groove KTGV 106.3-FM * KUAT-FM 90.5-FM/89.7-FM

Regional Mexican News-talk Rhythmic oldies Classical music

13T

My 92.9 KMIY 92.9-FM *

15 16 17 18

15T 14 17 24T

Hot adult contemporary Regional Mexican Pop standards Top 40 hits Spanish oldies

20 21T

21T

21T 21T

18 20

24 25 26 27

24T 19 27T 27T

The Voice KVOI 1030-AM KCEE 690-AM KFLT 830-AM KFLT-FM 88.5-FM

21T

Star KWFM 1330-AM *

La Poderosa KZLZ 105.3-FM KTUC 1400-AM i97-5 KSZR 97.5-FM * La Preciosa KTZR 1450-AM ESPN KFFN 1490-AM/ 104.9-FM KEVT 1210-AM KGVY 1080-AM/100.7-FM The Source KCUB 1290-AM Tejano KXEW 1600-AM

Sports-talk Spanish variety Oldies/ pop standards Sports-talk Tejano News-talk Pop standards Christian Inspirational music Adult contemporary

Arizona Public Media Lotus Lotus Clear Channel Clear Channel Lotus Journal Journal Arizona Public Media Clear Channel KZLZ LLC Cumulus Cumulus Clear Channel Journal

2.6 2.5 2.2 2.0

2.1 2.4 2.0 0.5

2.6 2.5 1.6 0.7

1.2

0.6

1.3

One Mart KGVY LLC

1.1 1.0

< 0.7

0.7 0.6

Cumulus Clear Channel Good News Good News Family Life Family Life

1.0 1.0

1.6 1.2

0.9 0.6

0.7 0.5 0.4 0.3

0.5 1.4 0.4 0.4

0.8 1.4 0.5 0.2

0.7

Hudson

Source: Arbitron Inc. Latest survey was conducted Sept. 13-Dec. 5. Previous survey was une 21-Sept. 12. Year ago survey was Sept. 15-Dec. 7, 2011. < - Indicates ratings below minimum for reliability. n/a - Noncommercial or religous station ratings unavailable. * Notes: KMIY was formerly The Mountain KWMT with modern music format until Nov. 18, 2011. KNST began broadcasting on its FM effective Nov. 28, 2011. KSZR was formerly branded as Bob-FM with adult contemporary music format until Feb. 3, 2012. KTGV was formerly Mega KGMG with R&B and oldies format until Oct. 17, 2011. KTZR was formerly Funny KWFM with all-comedy format from Jan. 26-Nov. 21, 2011. KWFM was formerly The Jolt KJLL until Jan. 21, 2012. Format changed from talk effect. Sept. 30, 2012.

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JANUARY 18, 2013

NEXT GENERATION

Getting more with less: UA researcher works to save power consumption in supercomputers By Patrick McNamara Inside Tucson Business Modern techniques, coupled with technological innovation, have provided researchers and academics the ability to compile near-infinite amounts of data. But sorting through that data requires an inordinate computing power. “Scientists seem to want more computing power than exists,” said David Lowenthal, professor and associate department head at the University of Arizona department of computer science. That desire for computing power comes at a cost, not just in expensive computer infrastructure, but in energy. Lowenthal recently was awarded a $400,000 National Science Foundation grant to research and develop ways to minimize

Patrick McNamara

that the coming generation of supercomputers likely will represent an increase in computing force by a factor of 50. In other words, he and his graduate students have to find a way to allow supercomputers 50 times the output with only twice the amount of power that they use today. “How do we get there?” Lowenthal asked. His idea, in simplified terms, is to design software that allows the next generation of supercomputers to perform as designed while minimizing their power consumption. In effect, the software would ration the energy feed to a supercomputer. “I’m not a hardware person, I don’t build the computer,” he said. “I look at this problem the other way.” A possible solution to the energy consumption issue, which Lowenthal has begun to explore, would be to divide the available power to the various parts of a supercomputer, with some receiving larger allocations than others. Lowenthal said laptop computer designers have successfully managed a similar issue. In laptops, processors run at varying speeds David Lowenthal at his office on the University of Arizona campus. He seeks to as a means to find a way for supercomputers to consume less power. increasing batthe power consumption of the next genera- tery life and a similar philosophy could be imtion of high-output computers, also known plemented on a grander scale. as supercomputers or, for those with longer That’s easier said than done, however. memories, mainframe computers. Lowenthal said his research likely would Just how much power do these comput- run the course of the three-year funding peers consume? riod or longer. Today’s supercomputers can consume The task also involves working closely with nearly 10 megawatts of power, Lowenthal computer engineers to ensure the software said. A megawatt is roughly equivalent to packages can be successfully integrated into amount of energy needed to power 1,000 the increasingly massive supercomputers. homes for one hour. Whereas installing a new software package “That’s like a reactor,” Lowenthal said, on a PC can be done with relative ease and only slightly exaggerating. only a few minutes inconvenience, Lowenthal As the need for more computing horse- said the same isn’t the case on a new-generapower increases, the amount of power these tion supercomputer. These machines, which computers need will increase proportional- fill entire buildings sometimes, can have tens ly, if current trends continue. of thousands of processors, compared to one Take for instance Lowenthal’s charge. or two in a home computer. Working under goals the U.S. Department The challenge lies in designing and impleof Energy set, his research aims to find ways to menting software that can be integrated into limit power consumption to 20 megawatts. a supercomputer that’s essentially an array of That would be fine, he explained, except hundreds of thousands of machines.

Universities across the country have been building their own supercomputers to handle the research demands of faculty. The University of Arizona also has a highoutput computing center, Research Computing Data Center. Its computers hold the equivalent of 6,000 processors and will likely expand as need arises. The available storage space is measured in petabytes, or more than a quadrillion bits of data. “Any science department does high-out-

put computing,” Lowenthal said. “From a societal point of view, any scientific area is affected by the ability of supercomputers.”

Next Generation is a monthly feature of Inside Tucson Business profiling Southern Arizonans on the cutting edge of developing their ideas. If you’ve got an idea or someone you think should be profiled, contact reporter Patrick McNamara at pmcnamara@azbiz. com or (520) 295-4259.

16 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

OUT OF THE OFFICE ARTS & CULTURE

ON THE MENU

A culinary experience and a ATC plays out pre-WWII â&#x20AC;&#x2DC;beer wallâ&#x20AC;&#x2122; at new Whole Foods meeting of Freud, Lewis

hand-crafted pizzas, custom-made Coffee? sandwiches, house-made chips and dips, Yes, down this aisle to the right. soups and salads. His in-house smoker Laundry detergent? adds a woodsy touch to proteins on the Of course, over on that aisle. â&#x20AC;&#x153;smokehouseâ&#x20AC;? menu, and a Paper towels? taqueria features tacos, burritos Sure, straight down the aisle and quesadillas. here on the left. Arizona beers occupy nine of Grass-fed hamburger with the E. River Barâ&#x20AC;&#x2122;s 24 beer taps, Divina roasted tomatoes, with one from Tucsonâ&#x20AC;&#x2122;s Dragoon poblano peppers, local goat Brewing Company crafted cheese and sun-dried tomato exclusively for Whole Foods, aoli? aptly named the â&#x20AC;&#x153;E. River.â&#x20AC;? Absolutely. Head for the E. If you canâ&#x20AC;&#x2122;t find what you like River Bar at the back of the on tap, thereâ&#x20AC;&#x2122;s a 47-foot-long store...and how about a cold â&#x20AC;&#x153;beer wallâ&#x20AC;? of suds from around draft beer to wash it all down! MATT RUSSELL the world. All of the draft beers Huh? are also available to take home in A culinary experience, in a half-gallon â&#x20AC;&#x153;growlers.â&#x20AC;? relaxed bar atmosphere, in a grocery store? Wines are served by the glass at the E. Sure thing, says Executive Chef Nathan River Bar, or you can purchase a bottle from Hirsch, a graduate of the Culinary Institute the store shelf and a bartender will uncork of America, who oversees the kitchen it for you and your shopping companions operation at the new Whole Foods Market to enjoy. that opened Wednesday at 5555. E. River The next time you head for the market Road. for a weekâ&#x20AC;&#x2122;s provisions, set aside some time â&#x20AC;&#x153;We encourage our customers to sit to enjoy the root beer braised beef barbadown, relax, and experience the best coa with green chili polenta and chipotle organic and natural foods available,â&#x20AC;? he crema, alongside a glass of Arizona craft said, as he described this new â&#x20AC;&#x153;dining beer. Now thatâ&#x20AC;&#x2122;s shopping. destination.â&#x20AC;? The E. River Bar at Whole Foods Market Tucked at the back of the 36,000 is open daily from 11 a.m. to 9 p.m., with square-foot store is the E. River Bar â&#x20AC;&#x201D; and last call at 8:30 p.m. After last call, you can with large-screen TVs, bar stools, pub finish your grocery shopping. Donâ&#x20AC;&#x2122;t forget tables, 24 beers on tap, a wide selection of the paper towels. wines by the glass, and a pub-style menu that offers choices for a late breakfast, lunch or dinner, you may forget you Contact Matt Russell, whose day job is actually went to the store to go grocery CEO of Russell Public Communications, at shopping. mrussell@russellpublic.com. Russell is also Hirsch has prepared the E. River Bar the host of â&#x20AC;&#x153;On the Menu Liveâ&#x20AC;? that airs 4-5 menu to satisfy a range of palettes, from the p.m. Saturdays on KNST 97.1-FM/790-AM. aforementioned grass-fed burger to

50% OFF for 2 months

Music

Film

Art A trio of new exhibits at the Tucson Museum of Art, 140 N. Main Ave., debut next week. One is titled â&#x20AC;&#x153;Desert Grasslandsâ&#x20AC;? featuring works by 16 artists using a variety of media to interpret the flora and fauna of this region. It will be up through July 7. The second exhibit is â&#x20AC;&#x153;Feminina: Images of the Feminine from Latin Americaâ&#x20AC;? focusing on representations of the feminine from both a sacred and the profane perspective over several centuries, as seen in art from Latin America. It will be up through Sept. 14. And the third exhibit is

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â&#x20AC;&#x153;Elements in Western Art: Water, Fire, What would happen if the founding Earth and Airâ&#x20AC;? examining the representafather of psychoanalyst Sigmund Freud and tion of the elements in western art and how novelist and scholar C.S. Lewis were to have they were used to define how the world had a conversation? How fascinating would sees the West. It will be up through June 14. it be to eavesdrop on their discussion about The museum is open WednesGod and Christianity, science, days through Sundays, from 10 family, free-will and even sex? If a.m. to 8 p.m. Thursdays, noon to the idea is intriguing then see 5 p.m. Sundays and 10 a.m. to 5 the Arizona Theatre Compap.m. the other days of the week. nyâ&#x20AC;&#x2122;s Southwest premiere of â&#x20AC;&#x153;Freudâ&#x20AC;&#x2122;s Last Session.â&#x20AC;? Set in 1939 as England enters World War II against Jazz legends Chick Corea and Germany, the play imagines a Gary Burton perform at 8 p.m. pivotal conversation between Saturday (Jan. 19) at the Fox Freud and Lewis. The play has HERB STRATFORD Tucson Theatre, 17 W. Congress been an Off-Broadway sensatin St., under the auspices of UAprefor two years. sents. Tickets range from $45 to $60 The Arizona Theatre Companyâ&#x20AC;&#x2122;s presenwith discounts for students, educators, tation at the Temple of Music and Art, 330 S. children, seniors and military. Corea and Scott Ave., begins with five preview perforBurton, who are perhaps best known for the mances Saturday and Sunday nights and landmark 1972 album â&#x20AC;&#x153;Crystal Silence,â&#x20AC;? donâ&#x20AC;&#x2122;t continuing Tuesday through Thursday often perform live so this one-night-only event nights next week before opening night on is a rare opportunity. Jan. 25. It runs through Feb. 9. Buy tickets online at www.arizonatheatre.org or throughthe box office at (520) 622-2823. Films of note opening this weekend

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include the crime drama â&#x20AC;&#x153;Broken Cityâ&#x20AC;? starring Russell Crowe and Mark Wahlberg in a story about an extra-marital affair, a big city mayor and a cop; the horror film â&#x20AC;&#x153;Mamaâ&#x20AC;? telling the story of a family trying to raise two girls who had been abandoned in a forest for five years; and the acclaimed French film â&#x20AC;&#x153;Rust and Boneâ&#x20AC;? starring Marion Cotillard as a damaged soul looking for love after a tragic accident.

Contact Herb Stratford at herb@ ArtsandCultureGuy.com. Stratford teaches Arts Management at the University of Arizona. His column appears weekly in Inside Tucson Business.

InsideTucsonBusiness.com

JANUARY 18, 2013

BRIEFS GET ON THE LIST

GOVERNMENT

conducted by Sunshine Review, a nonprofit dedicated to government transparency. The only county to get higher marks for transparency was Pinal County, which got an A+, according to the Sunshine Review. “We are pleased to be recognized for our efforts to provide as much information as possible to our constituents,” Pima County Administrator Chuck Huckelberry said in a news release. “Open government builds trust, reduces confusion and ensures that citizens have the tools they need to fully participate in democracy.” La Paz County earned the lowest marks, receiving an F grade. Navajo County had a D, according to the survey. Graham and Greenlee counties also received low marks on the review, both earning a C- grades. Apache, Cochise, Coconino and Santa Cruz counties got C grades. Maricopa, Mohave and Yavapai counties were given B grades. Gila and Yuma counties got B- grades. The Sunshine Review measures the “affirmative disclosure” of information on government websites. The scores reflect availability of public information on websites in categories like budgets, public meetings, elected officials, administrative officials, permits, audits, contracts, lobbying, public records and local taxes. The group gave the City of Tucson an A- on its most recent analysis. Sunshine Review gave the state’s website a C. For more, visit the Sunshine Review website at http://sunshinereview.org/core/ transparency.

Pima earns high marks on transparency review

City of Tucson to meet on El Rio Golf Course

Next up: Colleges and universities, Specialty and training schools, Child care providers The 2013 Book of Lists will be published Jan. 25. Inside Tucson Business is now gathering data for the 2014 edition. Upcoming lists are: • Feb. 1: Public school districts, Private elementary schools, Private secondary schools, Charter schools • Feb. 8: Colleges and universities, Specialty and training schools, Child care providers • Feb. 15: Commercial real estate brokers, Commercial building contractors, Commercial real estate managers • Feb. 22: Commercial photographers and Video production companies • March 1: Event planners, Convention and meeting facilities, Caterers If your business has been on a previous list in one of these categories, look for an email from Jeanne Bennett, List researcher for Inside Tucson Business, with details on how to update your profile. If you would like to add your business to one of these lists, go to www.InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page to create a profile. The Book of Lists is a year-round reference for thousands of businesses and individuals.

Pima County recently received an A- on a government transparency measurement

City officials plan to hold a public meeting covering the recent actions by mayor

and council relating to Tucson City Golf. The meeting is scheduled for Wednesday (Jan. 16) at 5:30 p.m. at the El Rio Neighborhood Center, Multipurpose Room, 1390 W. Speedway. Officials will provide background on unmet infrastructure needs for Joaquin Murrieta Park and El Rio Golf Course, and detail opportunities for park planning and improvement. This is the first meeting of a master-planning process for the area. City golf has been under scrutiny because it has lost more than $7.5 million over the past several years. The difference has been made up from other city funds. City leaders have considered closing El Rio and Fred Enke golf courses, because the two are the city’s worst performing. For more information, call (520) 7914040 or e-mail ward1@tucsonaz.gov.

TECHNOLOGY

Tech Council plans technology recycling events The Arizona Technology Council Foundation, Data Doctors and Westech Recyclers plan to hold a technology recycling event. Those wishing to address the issue of electronic waste can safely dispose of computers, manufacturing and other electronic equipment at drop-off locations. In Tucson, drop-off locations are scheduled for Thursday (Jan. 24) 7 a.m. to 6 p.m. and Friday (Jan. 25) 7 a.m. to 2 p.m. at Texas Instruments in the Williams Centre, 5411 S. Williams Blvd. The electronic equipment and components acceptable for drop-off include personal computers, computer peripherals, networking equipment, main frames,

servers, point-of-sale equipment, printers, audio/visual and telecom devices, surplus metals, wire, cable and power strips. Miscellaneous electronic items such as test or lab equipment are also acceptable. All donated equipment will be handled through the Arizona Technology Council Foundation’s TechTerra Program in partnership with Westech Recyclers. As part of that program, a portion of the equipment is donated statewide to support Arizona educational programs.

MILITARY

Raytheon wins $12.3M Air Force contract The U.S. Air Force awarded Raytheon Company a $12.3 million contract to begin production of High-Speed Anti-Radiation Missile (HARM) Control Section Modification (HCSM) upgrade units. The modification adds a GPS receiver and an improved inertial measurement unit for precision navigation to the existing HARM. HCSM also features a digital flight computer that merges targeting solutions from navigation and seeker systems. Raytheon is scheduled to begin modification of existing HARMs early this year with delivery of HCSM units beginning in the fourth quarter of 2013. Raytheon has teamed with Honeywell, Rockwell Collins and others for the HCSM program.

PEOPLE IN ACTION NEW HIRES Former Congressman Jim Kolbe has joined the Arizona-based federal government relations firm of Capitol Strategies, LLC to provide strategic advice and counsel focused on Arizona public and private sector clients. Jim Kolbe served 22 years in the U.S. Congress and has been involved in many issues important to Arizona, including water, land, mineral resources, border issues, trade and Mexico relations. He held important positions in the Congress, including serving for 20 years on the Appropriations Committee, with 10 of those years as Subcommittee Chairman, and was the House leader for passage

of the North American Free Trade Agreement (NAFTA). Since leaving Congress, Kolbe has served on the U.S. Trade Representative’s Advisory Committee on Trade Policy Negotiations, as senior advisor to McLarty Associates, a strategic consulting firm, and on the U.S. Secretary of State’s prestigious Foreign Policy Review Board. The Pima Community College Governing Board unanimously approved the hiring of attorney Jeffrey Silvyn as the college’s general counsel. Silvyn has been general counsel at the Morris K. Udall and Stewart L. Udall Foundation in Tucson since 2008. Silvyn also has seven years’ experience at the Waterfall

JEFFERY SILVYN

Economidis Caldwell Hanshaw & Villamana law firm in Tucson, and worked nine years at Fennemore Craig in Tucson and Musick Peeler & Garrett in Los Angeles. He has a bachelor of arts degree in international studies from Johns Hopkins University and a law degree from the University of California Los Angeles School of Law.

BOB SCHWARTZ

TIANA RONSTADT

{YOUR NAME HERE} To announce a professional promotion, appointment, election, new hire or other company personnel actions, fax press releases to (520) 295-4071, Attention: People; or email submissions to pmcnamara@azbiz.com. Include an attached photo at 300 dpi. Bob Schwartz, formerly of the law firm of Russo, Russo & Slania, P.C., has been named Chief Executive Officer of Southern

Arizona Land Trust, Inc. (SALT). In addition, Schwartz will serve as in-house legal counsel of SALT’s sister company, Family Housing

MICHELLE HUNTER

Resources, Inc. (FHR). Both SALT and FHR are non-profit supporting organizations of the Industrial Development Authority of the County of Pima. SALT operates as a land bank and FHR is a leader in affordable housing in Southern Arizona. APPOINTMENTS Tiana Ronstadt has been appointed to

the Woodbury Financial Services President’s Advisory Council. Membership in this organization is offered to a select group of registered representatives who, through their influential partnership with Woodbury Financial senior leaders, play a key role in transforming the future of the industry-leading brokerdealer. Ronstadt has more than 20 years experience in the financial planning industry. She is the founder of Power Women Investing, a comprehensive financial services firm whose mission is to empower individuals to gain financial independence. AWARDS Michelle Hunter has been named Vantage West Credit Union’s

employee of the year. As a loan center operations coordinator, Hunter is responsible for the implementation of a new loan origination platform that has streamlined the lending process. Hunter has been with Vantage West for 14 years. Carlos Raygoza also was named a Vantage West Credit Union employee of the year for his work as a senior financial representative. Raygoza provides leadership at the Rita Ranch branch. He recently earned a master’s of business administration from the University of Phoenix.

18 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

FINANCE YOUR MONEY

TUCSON STOCK EXCHANGE

‘Cliff ’ averted, but what does it really mean?

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

The 112th Congress was the least productive Congress in history — even less productive than the 80th Congress, which President Harry S. Truman called the “Do-Nothing Congress.” When it ended on Jan. 2, 2013, the 112th Congress had 228 bills make it into law while the 80th Congress got 906 bills into law. (Notwithstanding Truman’s line, the previous low since the U.S. House Clerk’s office started keeping track was set by the 104th Congress, which passed 333 bills into law in 1995 and 1996.) As a final act, after technically going over the fisal cliff, the 112th Congress managed to pass the American Taxpayer Relief Act of 2012. It stopped some of the measures from taking effect that would have had a severe negative impact on the U.S. economy, called the fiscal cliff. The Congressional Budget Office projects the legislation will add $4 trillion to the federal deficit over the next 10 years compared to what would have happened had the tax cuts enacted during the Geroge W. Bush administation been allowed to expire. The act also sets up what is likely to be an even more-heated fight in late March when the Treasury Department must come to Congress to seek an increase in the government’s borrowing limit. Here are some of the key provisions of what got passed at the last minute: • Tax rates will be allowed to rise to a maximum rate of 39.6 percent on incomes of more than $400,000 per year for individuals and $450,000 per year for households. • The tax on estates will rise to a maximum of 40 percent, with a permanent exemption of the first $5 million, indexed for inflation. • Tax rates on long-term capital gains and dividends are pemanently set at 20 percent for individuals earning more than $400,000 per year and households earning more than $450,000. • Tax rates on long-term capital gains and dividends are permanently set at a maximum 15 percent for individuals earning less than $400,000 or households earning less than $450,000. • Itemized deductions and personal exemptions will be phased out for those making more than $250,000 annually or $300,000 filing jointly. • The 2 percent temporary decrease in FICA payroll taxes relief was allowed to expire. This has a disproportionate impact on those making less than $113,700 (the FICA limit in 2013) and is expected to remove $125 billion from consumer income nationwide. • The tuition tax credit and child and dependent care tax credits were extended for five years.

Southern Arizona presence

• Rollovers of 401(k) funds to a Roth IRA will be allowed for those still actively participating in a 401(k) plan. Think of this as an “in-service” distribution. Remember, a DREW BLEASE conversion to a Roth IRA is taxable although future earnings will be tax-free and it’s not subject to the required minimum distributions at age 70½. • Alternative Minimum Tax exemption amounts will be indexed to inflation starting at $50,600 for individuals and 78,750 for joint filers for the 2012 tax year. This impacts 32 million Americans who may have been subjected to the tax. • Postpones for two months $109 billion in spending cuts known as sequestration. • Extends unemployment insurance for 2 million long-term unemployed Americans (providing approximately $60 billion). • Extends the 2008 Farm Bill through Sept. 30, which will keep the price of milk from potentially doubling, • Prevents a 27 percent reduction in payments to doctors and other health care providers treating patients on Medicare. • State and local sales tax deductions, the child tax credit of $1,000, adoption/ credit assistance, child and dependent care credit, employer-provided child care credit, American Opportunity Tax Credit deduction for qualified tuition and related expenses, student loan interest deduction, teachers classroom expense deduction, mortgage insurance premiums and IRA distributions to charity are among deductions and credits that were either extended temporarily or permanently. The American Taxpayer Relief Act will reduce some of the drama in Washington, D.C., by eliminating the need to renew tax rates every year. However, now that Congress has experienced its biggest takeover of the public consciousness, expect to see even more partisan bickering, especially when it comes to the debate over whether to raise the federal debt ceiling from its already record-setting $16.4 trillion or shut down government. Considering the American Taxpayer Relief Act has a 41-1 ratio of tax hikes to spending cuts, it looks as if deficits will continue to soar. Contact Drew Blease, president and founder of Blease Financial Services, 7358 N. La Cholla Blvd., Suite 100, at drewblease@ bleasefinancial.com or (520) 299-7172.

Company Name

Symbol

Jan. 16

Jan. 9 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

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.

0.04 0.08 17.17 43.85

0.03 0.11 16.94 43.50

0.01 -0.03 0.23 0.35

0.02 0.01 9.56 35.20

0.12 0.80 17.94 44.15

8.85 1.56 2.50 11.57 63.30 10.31 95.02 14.63 55.97 3.99 20.59 42.50 39.17 35.01 41.67 16.91 101.15 39.60 51.91 13.65 81.01 66.68 20.97 34.33 34.39 63.76 66.55 192.26 33.46 63.13 5.13 46.45 36.66 16.14 42.75 26.14 1.24 40.61 35.83 42.44 58.18 37.94 38.76 41.91 50.65 66.95 18.72 19.35 57.71 53.05 17.64 48.30 45.00 13.57 11.20 42.88 41.33 61.22 18.34 32.37 49.00 26.02 131.11 20.20 14.40 33.18 69.17 39.55 35.16 11.25 22.25 53.92 35.50 27.66 5.65 18.67

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 54.06 34.19 27.33 4.82 18.05

-0.23 0.27 -0.12 0.14 0.34 0.34 1.70 3.04 0.38 0.09 0.02 0.46 0.75 2.17 0.58 -0.12 -0.08 -0.23 1.63 0.54 0.95 -0.55 -0.18 -0.89 -0.17 0.59 0.01 -0.06 0.95 0.97 -0.08 0.98 -1.30 -0.34 0.80 0.59 0.07 -1.10 0.95 0.33 -0.61 1.25 -0.14 -0.21 -1.50 -0.09 -0.08 -0.14 -0.50 0.73 0.24 0.23 4.23 -0.06 0.20 0.47 -0.85 1.04 0.23 0.37 -0.63 0.38 0.22 0.88 -0.73 -0.09 0.60 1.10 0.45 -0.19 0.40 -0.14 1.31 0.33 0.83 0.62

7.97 0.36 1.48 6.46 50.95 5.30 77.83 11.20 50.89 2.97 14.97 24.61 25.31 16.37 22.19 12.13 80.59 36.50 41.48 8.42 43.70 50.27 13.45 30.54 21.38 43.70 52.21 179.50 27.10 53.38 3.94 30.83 27.96 6.46 41.35 20.98 0.75 21.33 24.76 37.02 52.31 32.31 33.55 23.41 40.64 56.59 15.69 7.29 47.50 38.63 14.73 33.03 36.81 6.25 7.76 39.01 25.77 48.74 14.04 26.06 33.62 17.45 104.08 18.36 5.81 27.30 57.18 28.53 28.77 7.14 16.40 47.00 21.39 7.80 2.99 5.90

10.92 1.66 3.65 12.20 63.16 9.98 95.48 27.95 60.00 4.93 21.16 43.25 39.22 35.35 42.30 17.50 105.97 43.43 51.94 13.74 89.98 67.92 22.79 48.96 34.92 65.92 66.92 211.79 37.70 63.39 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 53.79 23.16 49.28 85.90 14.32 11.27 46.08 42.55 65.80 18.48 34.24 50.28 26.11 132.09 57.46 15.50 35.46 77.60 39.57 36.60 11.64 22.81 55.20 40.69 31.53 9.22 20.97

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JANUARY 18, 2013

INSIDE REAL ESTATE & CONSTRUCTION

Housing market has made a bona fide recovery By Roger Yohem Inside Tucson Business Based on the year-end data for 2012, all signs indicate that Southern Arizona’s housing market is in a bona fide, sustainable recovery. After being hammered for six years by the housing collapse and Great Recession, real estate is back on track to regain jobs, increase home ownership and overall, strengthen the local economy. Over the past 12 months, all the positive trends that gained traction will drift into 2013: Median sales price: From December 2011 to December 2012, the median sales price increased 23 percent. Sold homes moved up in price from $120,000 to $147,500, a gain of $27,500. Average sales price: Year over year, this metric is now 13 percent higher. Average sales prices for sold homes increased from about $161,500 to $183,000, a gain of $21,500. Units sold: During 2012, the number of homes sold was the most since 2006 when there were 15,710 closings. Last year, 13,448 homes sold compared to 12,791 units in 2011. That was an increase of 657 sales, or 5 percent. During the Great Recession, the low point of sales was 10,616 in 2008. Market value: The market value of all homes sold last year was $2.36 billion. That was $260 million more compared to $2.1 billion in sales in 2011. Prior to the market’s collapse, the peak was $4.61 billion in 2005. Listings: Listings are 9 percent lower, having fallen from 4,911 to 4,449 over the past 12 months. That is net decrease of 462 homes in inventory. During the market’s darkest days, inventory peaked at 10,387

THE PULSE:

TUCSON REAL ESTATE

1/7/2013 12/31/2012

Median Price Active Listings New Listings Pending Sales Homes Closed

$150,000 5,189 503 396 159

Source: Long Realty Research Center

$141,000 5,023 363 233 140

MONTHLY BUILDING PERMITS: DEC. 2012 2012

2011

2010

2009

Pima County

Marana

Tucson

Sahuarita

So. Pinal

137

118

104

158

Oro Valley Total Source: Bright Future Real Estate Research

YEARTODATE BUILDING PERMITS: DEC. 2012 2012

2011

2010

2009

Pima County

572

499

683

777

Marana

526

328

341

191

Tucson

330

218

314

368

Sahuarita

270

186

309

516

So. Pinal

175

164

172

168

Oro Valley

167

2,040

1,438

1,865

2,077

Total Source: Bright Future Real Estate Research

listings in April 2007 before ending the year at 8,708 homes. Foreclosures: Notices of trustees’ sales, the first step in the foreclosure process, trended down for the third straight year in 2012 since peaking in 2009 at 12,184 notices. Last year, 9,287 trustees’ sale notices were filed, a dip of just 146 notices compared to 2011. New home permits: A six-year slide in new home construction ended in 2012. After free-falling from a peak of near 12,000 permits, builders notched a solid gain last year. For the first time since 2009, over 2,000 permits were pulled. Last year, 2,040 per-

WEEKLY MORTGAGE RATES Program 30 YEAR 15 YEAR 5/1 ARM

Current

Last Week

1/8/2013

One 12 Month 12 Month Year Ago High Low

3.38% 3.625%APR 3.50% 3.375%APR 4.95% 2.88% 3.125%APR 2.88% 3.125% 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%

mits were issued compared to 1,438 in 2011 and 1,865 in 2010. Although stronger fundamentals are in place for sustainable improvements in 2013, stricter lending guidelines will hamper the ability of some potential buyers to move into home ownership. On January 10, the federal government’s new Consumer Financial Protection Bureau set new guidelines for banks that issue home loans. The tighter rules will force banks and lenders to verify a potential borrower’s income, their debt obligations and their employment status. Regulators hope to squash loose-lending practices based on falsified loan documents than enabled people to buy homes they couldn’t afford. Those actions a few years ago pushed the nation’s economy into recession. The year-end statistics are from the Tucson Association of Realtors Multiple Listing Service and Bright Future Real Estate Research.

First increase since 2004 For the first time since 2004, the number of residential building permits increased year-over-year in 2012. The improvement

stopped a six-year slide when 11,783 permits were issued in 2005 across Southern Arizona. “We have now recovered most of the lost ground since 2009 and expect continued improvement. While all municipalities did see an increase in permit volume, the lion’s share of demand went to the northwest,” said housing analyst Ginger Kneup, owner of Bright Future Real Estate Research. In 2012, builders pulled 2,040 new home permits, a 30 percent increase over the 1,438 permits in 2011 (see table). Since the housing boom peak of 2005, construction activity had been in a free fall until last year. Many signs of stability have now returned to the market. An average 170 permits were issued per month in 2012 compared to 120 in 2011. For the year, there were 1,506 new home closings across the market, an improvement of 214 over 2011. That level of activity however, was lower than anticipated. “There used to be a push by the major builders to close by year end. However, some now operate under a fiscal year that does not coincide with the calendar year, which contributes to the change in year-end trends,” Kneup said. During 2012, new-built home pricing metrics improved substantially. Both the median and average price levels increased about 15 percent. The median price finished 2012 at $240,265, a gain of $31,765 in a year. The average sales price was $262,632 last month, an increase of $34,609 over 2011. “Underlying these increases is strong demand in the $250,000 to $400,000 price range in the communities along the Tangerine Road Corridor,” said Kneup.

Sales and leases • Youth On Their Own purchased a 4,800-square-foot two-story office building at 1660 N. Alvernon Way for $597,500 from P&J Enterprises LLC, represented by Bruce Suppes and Ian Stuart of CBRE. The tenant was represented by Mark Irvin of Mark Irvin Commercial Real Estate. • Wilson, Wilson & Wilson purchased the 18-unit El Ranchito Sereno Apartments at 3800 E. Fourth Street for $500,000 from El Ranchito Sereno LLC, represented by Mike Chapman of CBRE. The buyer was represented by Glenn Bancroft of Bancroft & Associates. • RMP Catalina & Tanque Verde LLC purchased 81,099 square feet of land for $424,000 on the southwest corner of Tanque Verde Road and Catalina Highway from Chivas Partners LLC, Attessa ENT LLC, and the Gabriel Family 1993 Revocable Trust, represented by Craig Finfrock, Commercial Retail Advisors. The buyer was represented by Britt Sanchez of Rand Enterprises.

E-mail sales and leases and other real estate news items for this column to ryohem@azbiz. com. Inside Real Estate & Construction appears weekly.

20 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

EDITORIAL BIZ BUZZ

Tucson loses creative mind of Earl Wettstein

Balfour Walker

“I wake up every morning at nine and grab for the morning paper. Then I look at the obituary page. If my name is not on it, I get up.” Benjamin Franklin was supposed to have said that. Over the years, I’ve heard others try to make jokes in a similar vein. I was always too busy to relate to such things. Much less, see the humor in them. Now I’m among those who can relate. It happens fast. DAVID HATFIELD As someone who has worked in Tucson media since 1972, I’ve had the privilege of meeting some people who’ve left some pretty impressive marks. They don’t always get the respect I feel they deserve. That’s the way it is these days. There’s little institutional memory in media. But I believe these people do have important things to say. One of those guys was Earl Wettstein. He was a principal in his own advertising agency for 31 years until he retired in 1995. He died suddenly Jan. 9 at the age of 81. He had written some opinion columns for Inside Tucson Business and was contemplating a piece about how he felt talented local creative minds were being passed over by Tucsonbased entities. What had him bothered was the Metropolitan Tucson Convention and Visitors Bureau had picked a Kansas City agency for its Visit Tucson branding change this year. The MTCVB and Tucson tourism held a particular spot in Wettstein’s heart because he was the guy who developed the “I’d Earl Wettstein, second from right, Rather Be in Tucson” camwith, from left Howard Weiss, Rich paign with a smiling sun. Moret and Jeff Nordensson: four of It even had its own the Tucson market’s best advertising minds on the cover of the Febtheme song. It worked, ruary 1987 issue of the Southern until the brain trust at the Arizona Home Builders Association MTCVB decided in the Builder magazine. early 1980s to change campaigns to “Resort to the Possibilities,” somehow believing that because Tucson now had resorts — just like lots of other places — that was something marketable. It wasn’t and that campaign was short-lived. As it turned out, Wettstein decided the Kansas City agency was one of the best when it comes to tourism branding so he was OK this time. Especially since it was going to be a one-off project. But he was going to keep his eye on other entities. Besides, the big thing on Wettstein’s mind was a showing of his oil paintings coming up Jan. 27 through Feb. 8 at DeGrazia Gallery in the Sun, 6300 N. Swan Road. He and Inside Tucson Business reporter Roger Yohem had met for coffee just the day before he died. Wettstein was excited for the exhibition, which I understand is still going to happen. In the meantime, the loss of Wettstein is one more loss of a creative mind. Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237.

EDITORIAL

Looking at streetcar wrong A radio talk show host and his guest were talking on air the other day about the boondoggle they saw in Sun Link, the $196.8 million modern streetcar line under construction that will travel a 3.9 mile route from the University of Arizona Medical Center past the UA campus, through the Main Gate and Fourth Avenue retail areas into downtown Tucson and ending up on the west side of Interstate 10 and the Santa Cruz River. “It goes from nowhere to nowhere,” the guest on the radio show said. “Yes, nobody’s going to ride it,” the host chimed in. They’re looking at it all wrong. Yes, it is part of the 20-year, $2.1 billion Regional Transportation Plan that voters approved in May 2006, which included$75 million of funding. And the U.S. Department of Transportation came up with a $63 million grant. So with so much “transportation” funding, it’s understandable that anyone would think of the streetcar as a transportation solution. We believed that, too, at one point. But we’ve come to some realizations about the streetcar. What Sun Link is not: • Like any other light rail system. Officials have insisted on calling it a “modern streetcar” — not only to differentiate it from old-fashioned streetcars most cities gave up on long ago but also to not compare it to other light rail systems. • An efficient mode of mass transportation. Moving people efficiently has never been a forte of transportation officials in Tucson. Instead of freeways we have a patchwork of different modes of transportation, none of which works well. Heck, we even have at least five different ways to make a left turn — leading, lagging, protected, unprotected and, soon, Michigan. • Something most readers of Inside Tucson Business will use on a regular basis. People who commute to

work will not be heavy users of Sun Link. It might come in handy for a night out. Come into the downtown-UA area park your car in one place. Or better yet, take a cab so as not to mix drinking and driving and have access to a whole area for entertainment. What Sun Link is: • A link that will help facilitate the UA’s plans to get student enrollment up to 50,000 by the end of this decade. • Something students will ride. Students don’t want to put up with the hassles of commuting to and from campus in a car. That’s why large student housing complexes not near campus provide transportation. Students will also use Sun Link when going out at night. (It will be critically important for Sun Link to run well into the night and early-morning hours.) • An economic boost. The area around the streetcar line is already enjoying the strongest economic revival in the Tucson region. There are reasons for concern. City Councilman Steve Kozachik has already raised questions about the amount of subsidies that will be needed to keep Sun Link running. The company manufacturing the streetcars is behind schedule and deliveries may be delayed. And just wait until there’s an accident. Urban rail systems are notoriously dangerous. Designers try to keep rail lines separate from other traffic but Tucson’s system will run on city streets mixed with vehicular traffic which only increases the statistical odds of an accident. It will happen. But really, we have to stop thinking of Sun Link as a means of efficient transportation like a major roadway or freeway or a subway or any other transit system. Let’s just consider it an amenity like Jácome Plaza is next to the Joel D. Valdez Main Library downtown or the 12-foot orange griffin on Scott Avenue.

InsideTucsonBusiness.com

JANUARY 18, 2013

OPINION GUEST OPINION

‘60 Minutes’ gullible in saying newspapers are dead In the late 1990s, I left the newspaper world for a few years to be director of communications for the United Methodist Church in my part of the United States. I had a staff that created publications, online content, PR material and a newspaper. Some of the most interesting aspects of my job came under the heading of “crisis communication.” As crisis communication director, I prepared the organization for emergencies we hoped we’d never see. Several thousand professionals made up the clergy and staffs of these congregations and it was my job to be sure they were ready in the event of a “media event.” I was quite adept at getting TV reporters to report just about anything. Newspapers weren’t as quick — you might say “gullible” — to accept everything as the truth, so I generally used television to get information out to the masses. This meant I would create text that ministers and others were to use if called by a member of the media during a crisis. They were always instructed, if the reporter wanted more information than I had provided, to contact me directly. Understanding this will come in handy as you read further. I was having dinner with a friend Jan. 6 when I got a text that read, “Are you watching 60 Minutes?” “They’re saying the newspaper industry is dead. I thought you’d want to know.” Within minutes I got an email. “Did you

see 60 Minutes? It’s a story about The Times-Picayune. They’re saying newspapers are dead.” The evening continued with more texts, emails and calls. I found the KEVIN SLIMP 12-minute clip from “60 Minutes online. I watched it. Then I watched it again. Then I watched it and took notes. In less than 11 seconds, Morley Safer said, referring to newspapers, “virtually an entire industry is in free-fall.” The story was about the New Orleans Times-Picayune’s move from publishing daily to three days a week. Steve Newhouse, chairman of Advance Publications Inc., owner of the Times-Picayune, declined to be interviewed by “60 Minutes.” That job fell to Jim Amoss, long-time editor. Safer’s first question to Amoss seemed simple enough. “Did you agree with the decision to start publishing three days a week?” I’ve listened to the interview four times as I write this and for the life of me, I never head Amoss answer the question. He gave what sounded like a “packaged” response, the kind I might have written as a crisis communication director.

It reminded me of my 13-year-old who received an iPod Touch this past Christmas. He lost it. When I asked where it was he told me about the possible places an iPod could be, without coming out and telling me he’d lost it. I felt for Amoss. I wanted him to tell us what he really thought, one way or the other. All I got from listening to his interview was that the newspaper industry was grappling with options. Safer equated that to surgery where all the limbs are amputated and replaced by artificial limbs. In an open letter to Advance Publications, some high profile citizens of New Orleans wrote “The Newhouses are losing the trust of the community.” Seeing an opportunity to fill a vacuum, The Advocate 80 miles away in Baton Rouge started up a daily newspaper in New Orleans. Carl Redman, executive editor of The Advocate, tells me his group was overwhelmed by the response. They had hoped for a circulation of 10,000 by February 2013. Instead, more than 10,000 subscribed to the newspaper within a week. Between home delivery and single copy sales, The Advocate now reaches approximately 20,000 homes each day in New Orleans. I’ve tried to reach someone at the Times-Picayune, sending emails to the publisher and several managers, but received no response. I decided to talk with Rob Curley, deputy editor of the Orange County Register

in California. Curley’s résumé includes more experience in online journalism than anyone I can think of and I figured he could give me insight on whatever it is I’m missing related to the Times-Picayune’s conversion to a non-daily. Instead we spent most of our conversation talking about Curley’s new role as one of five deputy editors of the Orange County Register, one of the 20 biggest papers in the country. Since July, the newspaper has increased its newsroom staff from 185 writers and editors to 300. I could sense his excitement when he discussed his work. After talking with Redman and Curley, I found it difficult to understand why Safer referred to newspapers as “dying.” I found it even harder to understand after reading reports from Wall Street that six of eight publicly traded newspaper companies showed increases in their stock prices in 2012. I’ve also visited with two newspapers in Virginia and Kentucky the past few weeks to work with their staffs. Both papers are doing well and continue to invest in the future. While the Orange County Register may be America’s largest community paper, you can bet that thousands of newspapers will continue to serve their communities and surprise Morley Safer at the same time.

Contact Kevin Slimp, a newspaper technology consultant and instructor, contact him at kevin@kevinslimp.com.

GUEST OPINION

Pima County, Metro Chamber work to help create, keep more jobs In the long journey toward economic recovery, the old epigram “many hands make light work” is an important one to remember. A successful rebound and the creation of a vibrant economic climate depend less on individual, isolated decisions than they do on cooperation between the public and private sectors. The goal is clear: to retain existing jobs and create new ones. More workers mean more money in the economy and more consumers boosting local businesses. This creates increased net revenue to businesses and generates more tax dollars to improve the infrastructure and services that benefit the region as a whole. The Tucson Metro Chamber and Pima County are committed to working together more closely, with our leadership meeting regularly to talk about areas of common interest. Recently, we embraced a series of joint business objectives designed to further strengthen the cooperation between the

sectors and work toward conditions that are favorable to private investment. The objectives identify 10 steps the county can take to help create a more secure CHUCK HUCKELBERRY environment for business interests. Among the elements for success, Pima County has agreed to provide a simple, predictable regulatory environment and to provide prompt, courteous responses to requests for information. When it comes to construction projects, the county also agreed to employ knowledgeable inspectors who will provide an explanation about any code violations they find and will provide a timely forum to appeal the denial of permits or licenses.

As partners in the project approval process, the business community acknowledged 10 steps it can take to smooth the process, including submitting complete and accurate planning documents MIKE VARNEY and permit applications, contracting with knowledgeable professionals and ensuring requests are well-defined and courteous. An important component: meeting with county staff early in the planning and design phase to head off any potential sticking points before construction of projects begins. Pima County has been working on improving operating efficiencies and streamlining the Development Services Department, as well as meeting regularly

with stakeholders and measuring customer satisfaction. The Pima County tax levy is as low as it has been for the past five years. We have reduced fees where appropriate, most significantly in sewer connections. It is, nevertheless, important to set standard expectations that we can post at workstations and in the lobby of Development Services that will serve as a reminder to both parties as we work toward our common goal of stimulating economic activity. We look forward to making cooperative choices and strategic alliances for a productive 2013.

Contact Chuck Huckelberry, Pima County Administrator, at CHH@pima.gov or (520) 724-8661. Contact Mike Varney, president and CEO of the Tucson Metro Chamber, at mvarney@tucsonchamber.org or (520) 792-2250.

22 JANUARY 18, 2013

INSIDE TUCSON BUSINESS

OPINION BUSINESS INK

Under ObamaCare, the magic number is 46 Bigger government has a cost. Three friends who work at three different small businesses have told me the magic number is 46. The number was set separately, never discussed among themselves. In fact, they don’t even know each other. One owns her business. The two others are managers. One is in professional services, one in retail and one in sales. Each is a long-time “townie.” Their identities are shielded behind an unwritten code of conduct between close friends. They openly share their business experiences with me as confidential “buddy talk,” not as fodder for “news talk.” It’s a delicate, silent oath to honor. Reporting news pays the mortgage and feeds my family. Blabbermouth chatterboxes have no true friends. That makes a deep and valued friendship more important than spewing personal information in a short-lived news story. As a result, what’s said among amigos stays among amigos… except when it comes to politics. All three have businessrelated worries with the Affordable Care Act, dba ObamaCare. They are struggling with the extra cost of bigger government. Many of the 2,000-page law’s negative impacts on business have been well-rhetorical-ized. Companies with more than 50 full-time employees are required to buy

them health insurance. This mandate also includes an annual fee of $63 per worker. Non-complying companies will pay a penalty of $2,000 per employee. For individuals, going ROGER YOHEM “naked” on health care insurance carries a $695 fine or 2.5 percent of annual income, whichever is higher. All three friends stressed the fact that private sector businesses — like theirs — typically pass on higher operating costs to their customers and employees. It’s a simple economic principle that most bureaucrats don’t want to understand. To make his point, my sales friend directed me “to look it up” on an official ObamaCare government website. The site’s text read: Under ObamaCare, the overall quality of health care is increased, while the cost, in theory, will be reduced. Only in government does theory trump reality. The reality of ObamaCare in Southern Arizona is that some small businesses already have laid off people, cut the hours of others and frozen expansion plans.

Personally, I know of three companies. Their magic number is 46 full-time employees. “That’s safe, with some wiggle room,” my sales friend said. To match his company’s current workload, the staff should be at about 55 people. Beginning in October, my retail friend told me his company started cutting jobs. He knew of about 15 long-timers who were let go, each with more than five years of service. The layoffs wiped out most of the full-time people. Himself included. The owners said they had no choice but to get below the law’s 50-employee threshold. Then going even further, most remaining workers had their time slashed to under 30 hours a week. Part-timers with few hours don’t get benefits. My friend in the service industry has stayed frozen at about 46 employees for more than 18 months. After her accountants analyzed the law, they told her she couldn’t afford to grow her business as planned. Today, full staffing should be about 60 employees and that expansion would compel her to buy three more company vehicles. Employees drive company cars to clients’ locations. ObamaCare is changing the way businesses do business. My friends’ companies already have been hurt and to

InsideTucsonBusiness.com

put it bluntly, they are cheesed off. Later this year, there’s been some chatter about plans for a nationwide, town hall-style educational blitz about ObamaCare. The forums will focus on business owners and juicing public opinion. The messengers will be members of Congress and their staffs. The message will be that businesses are over-reacting. Their accountants and lawyers don’t understand the law and are giving clients bad advice, ie., let us tell you how incompetent they are. Once the bureaucrats explain things, the private sector will no longer fear the number 50. There is nothing magical about 46. Don’t you get it? Under ObamaCare, the quality of health care is increased while the cost is reduced… in theory. So as a business owner, when facing a complex law that impacts your investment in equipment and employees, expansion plans, profits and taxes, who do you turn to for advice? Do you trust your professional accounting firm and tax lawyer? Or your congressional representative and their staffers who have no risk and nothing to lose?

Contact Roger Yohem at (520) 295-4254 or ryohem@azbiz.com. His Business Notebook appears biweekly and weighs in on local political, social and business issues.

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