Inside Tucson Business 9/14/2012 by Territorial Newspapers

TIME TO TUNE TO AZTECA AMERICA New owners plan changes to Spanishlanguage TV station PAGE 10

Your Weekly Business Journal for the Tucson Metro Area WWW.INSIDETUCSONBUSINESS.COM • SEPTEMBER 14, 2012 • VOL. 22, NO. 15 • $1

Entrepreneuers embrace Startup Weekend Tucson They came, they pitched, they recruited and achieved Page 4

Bauer Financial rates the ‘stars’ Banks and credit unions continue slow recovery Page 21

The fate of foreclosures

Photo illustration by Andrew Arthur

Distressed sales slipping behind Page 23

Repatriation program for Mexican immigrants evolving By Khara Persad Cronkite News Service The U.S. Department of Homeland Security would like you to know that reports of the death of a Mexican immigrant repatriation program have been greatly exaggerated. Tight budgets forced a halt this year to the Migration Interior Repatriation Program (MIRP), which has flown illegal immigrants deep into Mexico since 2004 instead of dropping them at the other side of the border. But government officials said they are working out the details of a new, “more robust program.”

“Discussions regarding flights to the interior of Mexico in coordination with the government of Mexico are ongoing and an announcement is expected soon,” according to a statement issued by the Department of Homeland Security (DHS). Similarly, a Mexican Embassy official in Washington, D.C., said both countries “remain fully committed to the objective of having all repatriations of Mexican nationals be conducted in a safe, dignified and orderly manner, with safeguards that guarantee the respect of human rights.” The MIRP was a joint effort by Immigration and Customs Enforce-

ment, and Customs and Border Patrol that offered a flight to Mexico City to certain Mexican nationals without criminal records who were caught illegally in Arizona. Immigrants could reject the offer. The program began in 2004 and operated only in the summer, when the risk to illegal border crossers is greatest because of desert heat. It ran through last summer, when 8,893 immigrants were flown home. The objective, as cited by the Department of Homeland Security, was to “save lives and disrupt the human trafficking cycle.” A DHS spokesman said the pro-

posed new program, the Interior Removal Initiative, is “the same program but with a different name.” He said it builds on MIRP and the pilot will be launched in October. Under the new program, immigrants who qualify will not be given the option of accepting the flight home. It will also be expanded to a Mexican national apprehended anywhere in the country, not just those in Arizona. Immigrants deemed qualified for the program will undergo a medical screening and an interview with Mexican consular officials to determine if they should be placed on a charter flight to Mexico City.

2 SEPTEMBER 14, 2012

SBA Lending Getting the right business financing is key in today’s economy. A Wells Fargo SBA loan is a smart choice, because the low down payment and low monthly payments help you maintain capital and cash flow. If you’re looking to purchase real estate for your business, acquire another business, expand to an additional location, or simply buy equipment or inventory, turn to Wells Fargo SBA Lending to help you do it. You can be confident in our experience as an SBA lender. In 2011, we approved over a billion dollars in SBA loans to businesses across America — more than any other bank in SBA lending history.2 We’ll use that experience to guide you through the process and make sure you get the financing you need. Apply for a loan or learn more today. Stop by a Wells Fargo location to talk with a banker, or call 1-800-545-0670 (Monday – Friday, 7 a.m. – 7 p.m. Pacific Time). You can also visit wellsfargo.com/sba.

Wells Fargo is the #1 SBA 7(a) lender by dollars according to the U.S. Small Business Administration as of September 30, 2011. Based on data from U.S. Small Business Administration, for federal ﬁscal year 2011. All credit decisions subject to approval. © 2012 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. (709199_04421)

INSIDE TUCSON BUSINESS

Proud to be America’s #1 SBA lender for the 3rd straight year 1

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SEPTEMBER 14, 2012

NEWS

Mexico prepares to receive natural gas ... from Arizona pipeline hardly anyone talks about

Rathbun Property in transition with clients

Plans are proceeding on a massive project to make natural gas available throughout northern Mexico even though it hinges at least in part on getting regulatory approval from U.S. authorities to run a connecting pipeline through Arizona. The hope is that President Felipe Calderón will preside at ceremonies in Mexico inaugurating an 800-mile grid prior to his leaving office Dec. 1, according to Dr. Enrique Velasco Ibarra, assistant director of Modernization and New Areas of Opportunities for Mexico’s Federal Electricity Commission (CFE). Velasco also said Mexico’s Secretary of Energy Jordy Herrera intends to visit Washington, D.C., next month to emphasize the importance of the project to both the U.S. and Mexico. Crucial to the proposed natural gas network is approval of a 60-mile pipeline in Southern Arizona that would go from Picture Rocks, northwest of Tucson, south through sparsely populated parts of Pima County to the twin border towns of Sasabe. Tiny Sasabe, Ariz., has a population of just 54, according to the 2010 Census, while the town on the Sonora side has a population of about 2,500. The gasline project is being spearheaded in the U.S. by Kinder Morgan Inc., which says it’s in a “pre-filing” mode, That means a formal application has not yet been submitted and any decision would be about 18 months off. In May this year, Kinder Morgan acquired the pipeline operations of El Paso Natural Gas as part of $21 billion deal. Failure of both the U.S. and Mexico to take advantage of ample U.S. reserves and eliminate pollution throughout the Sea of Cortez would be “just a terrible waste of an opportunity,” Velasco told Inside Tucson Business in an interview. “The contamina-

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

Keith Rosenblum

By Keith Rosenblum Inside Tucson Business

Richard N. Wheatley, manager of corporate communications and public affairs for Kinder Morgan, outlines the gas pipeline company’s proposal at a June 6 meeting in Arivaca.

tion will continue — and so will the high cost of power.” The pre-filing process in Arizona has been underway for months. Public meetings held three months ago near two proposed pipeline routes had a combined attendance of about 60 people, most of whom voiced opposition to the project. The meetings, hosted by Kinder Morgan and overseen by the U.S. Federal Electricity Regulatory Commission (FERC), will help determine whether the project receives regulatory approval as being “in the public convenience and necessity.” The community input is but one of many factors regulators will take into

account before making a decision. The comments by Velasco, who holds a doctorate in economics and international policy from John Hopkins University School of Advanced International Studies (SAIS), are the first to news media recognizing the profound importance to Mexico’s economy as well as air quality issues in both Mexico and the U.S. Mexico will need 30,000 megawatts of new power in the next two decades and natural gas is going to be a primary fuel source, regardless of its origin, he said.

SEE PIPELINE PAGE 6

PUBLISHER THOMAS P. LEE tlee@azbiz.com

STAFF WRITER PATRICK MCNAMARA pmcnamara@azbiz.com

LIST COORDINATOR JEANNE BENNETT list@azbiz.com

INSIDE SALES MANAGER MONICA AKYOL makyol@azbiz.com

EDITORIAL DESIGNER DUANE HOLLIS dhollis@azbiz.com

EDITOR DAVID HATFIELD dhatfield@azbiz.com

STAFF RESEARCHER CELINDA ARGUE cargue@azbiz.com

ART DIRECTOR ANDREW ARTHUR aarthur@azbiz.com

CARTOONIST WES HARGIS

STAFF WRITER ROGER YOHEM ryohem@azbiz.com

WEB PRODUCER DAVID MENDEZ dmendez@azbiz.com

ADVERTISING DIRECTOR JILL A’HEARN jahearn@azbiz.com

CIRCULATION MANAGER LAURA HORVATH lhorvath@azbiz.com

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

The Arizona Department of Real Estate has issued a notice to Rathbun Property Management that “encourages” it to work with clients “to ease the transition away” from the troubled company. The firm is under a cease and desist order from the department related to $1.8 million missing in trust accounts. On Sept. 7, three days after the cease and desist order, Rathbun announced it had signed Walter Sample, owner of Sample Realty Investment, 5502 E. 25th St., to be an interim broker. State officials want Rathbun Property Management and Rathbun Realty, 5650 E. 22nd St., to return to clients non-monetary items such as keys and rental contracts. Also, the Department of Real Estate encouraged Rathbun officials to provide contact information to property owners and their tenants so they can contact each other. On Aug. 21, Rathbun Property Manager co-owner George Glover filed a complaint with the Department of Real Estate claiming employee Cassandra Arnold had taken the missing funds. Glover and Arnold are the two designated brokers that were disciplined under the cease and desist order. Founder Bette Rathbun, whose license was revoked in 2006, is the other co-owner. They have hired legal counsel and have 30 days to appeal to the state’s decision and remain open. The Department of Real Estate says it does not have authority to take custody of the Rathbun companies’ trust funds.

Locally made sci-fi series teams with distributor A locally produced sci-fi Web series will be featured on the website of media company that focuses on the gaming industry. “Zhon: The Alien Interviews,” will be distributed and available on Pulp Gamer Media’s website. The multi-part science fiction series produced by local actor and director Eric Schumacher was filmed almost entirely in the Tucson region on a microbudget. Tucson-based Pulp Gamer Media also distributes audio books, board games and syndicated video series. The video can be seen at pulpgamer.com and whoiszhon.com.

EDITION INDEX Public Notices Lists Inside Media Briefs Calendar Profile Meals and Entertainment

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

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4 SEPTEMBER 14, 2012

The Tohono O’odham Nation won a major victory Tuesday when a federal appeals court upheld a government decision creating Indian reservation land in Glendale where political officials are fighting the tribe’s plans to build a casino. Arizona Attorney General Tom Horne issued a statement saying the decision would be appealed based on the 10th ammendment’s provisions for state sovereignty. A divided three-judge panel of the 9th U.S. Circuit Court of Appeals said the U.S. Interior Department “reasonably applied” the law when it ruled that the 54 acres of land in Maricopa County could become reservation land for the Tohono O’odham. The tribe acquired the property in 2003 under a federal program allowing the Tohono O’odham buy up to 9,880 acres of land in Arizona to replace a similar amount of tribal land near Gila Bend that was flooded beginning in the late 1970s after the construction of a federal dam. The provision allowed for the land to be designated as reservation provided it was not within a municipal jurisdiction. The land in question is outside the city limits of Glendale. It’s also just north of University of Phoenix Stadium, the Arizona Cardinals home field. “To say this plan has been controversial is an understatement,” the federal appeals court said in its ruling. “But the strong feelings and emotional drama of the casino fight do not dictate the outcome here.” The court rejected Glendale’s argument the land was within its boundaries simply because those boundaries encircled the parcel.

Pac-12 Networks stike deal with Dish Network The new Pac-12 Networks landed a multi-year deal with Dish Network late Sept. 7, within hours of the conference’s second week of football games. The deal was considered a landmark because while there were deals with a handful of cable providers, including Cox and Comcast and a cooperative of smaller operators, the Pac-12 had been stymied in its negotiations with other cable operators and the two major satellite providers, Dish Network and DirecTV, that would make the league’s games available to viewers in other parts of the country. Basically, the Dish deal will allow subscribers to its sports tier package to view the Pac-12 national network plus alternative feeds of all regional games when more than one are played simultaneously such as Saturday when Houston at UCLA will be shown on the national network at 7:30 p.m., the same time as the Pac-12 Arizona network will be showing South Carolina State at Arizona.

NEWS

Startup Weekend Tucson seeks to bring together entrepreneurs By Patrick McNamara Inside Tucson Business They came to pitch business ideas, recruit help and accomplish over a weekend what normally would take months. Put another way: “It’s a chance to work your ass off,” said Ryan Goins, 23, a facilitator with Startup Weekend, a nonprofit organization that helps organize events around the world. That’s what many of the more than 50 participants did at the second Startup Tucson Startup Weekend Sept. 7, 8 and 9. Nearly 30 participants pitched their startup ideas at the Friday kickoff of the event at the University of Arizona Tech Park’s Arizona Center for Innovation. From those 30 pitches, participants formed teams, narrowing the field to 12 proposals, and set to work. “We don’t want people to write business plan, we want them to do it,” Goins said. “Maybe this company they start over the weekend won’t be successful, but their third one might.” The idea of the startup weekend event, more than launching any one company, was to bring together people from the community who might not otherwise meet to collaborate. “Our goal is to create an economic development support structure from the bottom up,” said Justin Williams, founder of Startup Tucson and one of the driving forces behind the local effort. Williams said the focus of the events is to bring together entrepreneurs throughout the creative community, whether they are computer programmers, graphic designers, accountants or marketing pros. More than half the participants were new to startup weekend and most were young, in their 20s and 30s, Williams said. “That was terrific,” he said. Startup Weekend began in 2007 in Boulder. Colo. Since then, the non-profit organization headquartered in Seattle has helped facilitate nearly 500 of the weekend long events in North America, South America, Europe, Asia and Africa.

Samantha Sais

State vows appeal of latest casino ruling

INSIDE TUCSON BUSINESS

Teams present their business pitches to judges at the second annual Startup Tucson, Startup Weekend event, Sunday (Sept. 9).

According to Goins, there’s probably an event happening within driving distance of most major American cities on any given weekend. While many of the startup weekend events have tended toward technology ideas, Goins said each event produces different results. “It completely molds to the community around it,” Goins said. “Tucson has the resources to make it happen, not every community has that.” Williams said tapping into the assets already in place in the community is exactly what he hopes for Startup Tucson. “We want to figure out how to take this cookie-cutter event that tends to gravitate toward mobile apps and make it our own,” Williams said. Mobile apps of course featured heavily among the ideas pitched, from one that would provide a compatible networking forum at events to the winning idea to come out of this year’s Startup Weekend, an app that helps users find the best deals at local grocery stores. The winner, Cheap Avacado, will get free admission to the Arizona Center for Innovation, a business incubator program at the University of Arizona Tech Park. There, the startup will have access to work space and, more importantly, to the business

mentors the center works with to help better formulate their idea, create a business plan and take their idea to the market. The team also will get free access to the Desert Angels’ screening panel, where startup ventures present their ideas to the angel funding group in hopes of attracting investors. Williams and Startup Tucson also included additional mentoring for the winners this year. The teams have to commit to an eightweek training program through Gangplank Tucson called Lean Launchpad. Williams said the program was devised as a way to better prepare the teams for the intensive incubator process at the Arizona Center for Innovation. “The incubator process is best for teams that are more developed than those that come directly from Startup Weekend,” Williams said. The second and third place teams from Startup Weekend also will get the chance to attend Lean Launchpad and the Arizona Center for Innovation incubator program. “We’re trying to create a community and a culture,” Williams said.

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

Correction Because Arbitron radio ratings data is released separately for commercial stations from non-commercial stations, the List of radio stations in the Sept. 7 issue was not complete. The List was sorted based on Spring 2012 ratings of number of listeners ages 12 and older per average quarter hour Monday-Sunday from 6 a.m. to midnight, which is Arbitron’s broadest measurement. By that ranking, Arizona Public Media’s NPR station KUAZ 89.1-FM/1550-AM averaged 5,200 listeners and should have been ranked No. 7; classical music station KUAT-FM 90.5-FM/89.7-FM averaged 2,800 listeners and should have been ranked No. 14, community station KXCI 91.3-FM averaged 1,400 listeners and should have been tied for No. 19, Christian station KGMS 940-AM averaged 800 listeners and should have been tied for No. 24, Family Life’s KFLT 830-AM and the Tohono O’odham Nation’s KOHN 91.9-FM Sells averaged 500 listeners each and should have been tied for No. 27, and KFLT-FM 88.5-FM averaged 400 listeners to be ranked No. 29. The corrected complete List will be included in the 2012 Book of Lists when it is published in January. An Insider item in the Sept. 7 issue had the wrong amount for the amount of money it costs to water the 45-hole El Conquistador golf course in Oro Valley. The bill has been running $1 million a year.

InsideTucsonBusiness.com

SEPTEMBER 14, 2012

NEWS

Tucson manufacturers plan changes, including outsourcing to China

This Week’s

Good News From No. 49 to No. 4 Looking for work? Arizona is the second best place to be, according to an AOL jobs report based on data from Moody’s Analytics. The report found seven states that are expected to see job growth rates exceeing 2.1 percent over the next year. Arizona’s job growth rate was forecast 2.9 percent. Arizona sectors with the greatest percentage increase in employment are: • Transportation and warehousing: 6.5 percent. • Construction: 5.4 percent. • Professional and business services: 5.4 percent. • Wholesale trade: 5.2 percent. • Financial activities: 4.8 percent. • Educational and health services: 4 percent. • Information: 3.8 percent. • Other services: 3.3 percent. • Leisure and hospitality: 2.8 percent. • Manufacturing: 2.1 percent. The other six states projected to see job growth are North Dakota at 4.5 percent, Florida at 2.5 percent, Texas at 2.4 percent, Nevada at 2.3 percent, New Mexico at 2.1 percent and Washington at 2.1 percent.

Patrick McNamara

The Tucson Illinois Tool Works, which bought Genuine Innovation in 2011, plans to move the company’s Tucson-based manufacturing to China. A portion of the company’s building at 2700 E. Bilby Road is for lease.

By Patrick McNamara Inside Tucson Business Recent ownership changes at two longestablished Tucson businesses will result in one of the companies moving its manufacturing operations to China. Genuine Innovations, a 23-year-old manufacturer of bicycle accessories, has decided to shut down production in Tucson. Although a spokesperson for the parent company of Genuine Innovations, 2700 E. Bilby Road, confirmed the move by email, the company did not elaborate further about the timing of the move or how many employees would be affected. In previous years, the company has reported it had about 50 employees in Tucson. Tri-Tronics Inc., a 44-year-old company that makes electronic dog training equipment, also plans some changes, though its parent company says it will maintain its Tucson operations, at 1705 S. Research Loop. Genuine Innovations was acquired late last year by Illinois Tool Works, a publicly traded company based in Glenview, Ill. Founded in 1989 as Innovations in Cy-

cling, Genuine Innovations designs and manufactures CO2 inflation devices for bicycle and motorcycle tires as well as other sports equipment. The company also designs and makes custom valves and other pressurized gas devices. In the 1990s, it make the CO2 inflation device that was used in Reebok’s “Pump” series of shoes. Parent company Illinois Tool Works dates to 1912, when it began manufacturing metal-cutting tools. It has been listed as ITW on the New York Stock Exchange since the 1950s, when it began a series of acquisitions and expansions. Those efforts were stepped up again last decade when Illinois Tool Works acquired more than 200 companies between 2004 and 2008, according to published reports. Today, Illinois Tool Works owns more than 800 companies around the world and has more than 65,000 employees. Some of its better-known brands include Hobart, maker of industrial dishwashers and food equipment; Foster Refrigerator, maker of commercial refrigerators, and Space Bag, which are vacuum-sealed storage bags. Illinois Tool Works reported net income of $2.07 billion in 2011 on total revenue of

$17.8 billion. Tri-Tronics was acquired in June 2011 by Garmin Ltd., the Swiss company known for making global positioning system equipment. While Garmin plans changes at TriTronics, a company spokesman said closure of the Tucson facility was not among them. “There are no plans to close the TriTronics office in Tucson,” Ted Gartner, international corporate communications director for Garmin, said in an email. “We do expect to transition that office into primarily an engineering and customer support facility in 2013. Some positions will be affected, but the timing and number will be based on business need.” Tri-Tronics has designed and built numerous remote training collars for sporting dogs. Today the company has an extensive line of sporting dog collars equipped with global positioning systems and other electronic devices.

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

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

About those Albertsons You might have caught a local media report assuring us that no Tucson stores were on a list of 60 Albertsons supermarkets slated to close by the end of the year. But the fact is the Tucson stores would never have been on that particular list because they aren’t owned by the company that was doing the closings, a Minnesota-based firm named SuperValu that operates a variety of chain supermarkets, but none in Arizona. The Albertsons stores in Arizona, New Mexico, Texas, Colorado and Florida are operated by a separate company named Albertsons LLC, headquartered in Boise, Idaho, and majority-owned by the private equity firm Cerberus Capital Management. The Albertsons chain was split into two companys in 2006.

6 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

NEWS PUBLIC NOTICES

Auction time and date: 11:30 a.m. Dec. 6, 2012 Trustee: Adam B. Nach, Lane & Nach, 2025 N. Third St., Suite 157, Phoenix

Selected public records of Southern Arizona bankruptcies and liens.

Plants of Distinction 6930 E. Tanque Verde Road 85715 Tax parcel: 133-15-2930 Original Principal: $300,000.00 Beneﬁciary: Wells Fargo Bank, Mesa Auction time and date: 11 a.m. Nov. 29, 2012 Trustee: Ronald M. Horwitz, Jaburg & Wilk, 3200 N. Central Ave., Suite 2000, Phoenix

Chapter 11 – Business reorganization Todd H. Dunaway and Jiliane F. Dunaway, 4313 E. Whitman St. Principal: Todd H. Dunaway and Jiliane F. Dunaway, joint debtors. Assets: $848,804.14. Liabilities: $2,202,216.00. Largest creditor(s): MidFirst Bank, Oklahoma City, $921,000.00 and Midland Loan Services, Shawnee Mission, Kan., $407,000.00. Case No. 1219736 filed Sept. 4. Law firm: Eric Slocum Sparks ABC Containers LLC, 4261 S. Country Club Road #141. Principal: Miguel P. and Maria C. Larios, members. Estimated assets: $50,000 or less. Estimated liabilities: $50,000 or less. Largest creditor(s): Schedule not filed. Case No. 12-19759 filed Sept. 4. Law firm: Eric Ollason TBM Equities LLC, 919 N. Stone Ave., Suite 1101. Principal: Tirdad Bozorgmehr, member. Assets: $1,693,099.11. Liabilities: $8,543,123.10. Largest creditor(s): Pi’Ikea LLC, $7,500,000.00. Case No. 1219923 filed Sept. 6. Law firm: Breen Olson & Trenton Samuel Marquez and Maria T. Morales De Marquez, Samuel Marquez also known as Samuel B. Marquez and Samuel Marquez-Morales and Maria T. Morales De Marquez also known as Maria T. Morales and Teresa Marquez, 6370 N. Camino Aguante. Principal: Samuel Marquez and Maria T. Morales De Marquez, joint debtors. Assets: $677,691.17. Liabilities: $962,971.27. Largest creditor(s): Bank of America, Los Angeles, $556,519.89. Case No. 12-19940 filed Sept. 6. Law firm: Eric Slocum Sparks Richard P. Chagnon and Rebecca A. Chagnon, 2825 E. Malvern St. Principal: Richard P. Chagnon and Rebecca A. Chagnon, joint debtors. Assets: $1,713,795.47. Liabilities: $2,106,237.53. Largest creditor(s): Tucson Federal Credit Union, $1,672,746.00. Case No. 1219948 filed Sept. 6. Law firm: Eric Slocum Sparks Bellwest Holdings LLC, 4801 E. Broadway #400 (principal assets at 15495 Bell Road, Surprise). Principal: Paul Grasser, manager of Bell & Reems Properties LLC. Estimated assets: More than $10 million to $50 million. Estimated liabilities: More than $10 million to $50 million. Largest creditor(s): Schedule not filed. Case No. 1220126 filed Sept. 10. Law firm: Eric Slocum Sparks

FORECLOSURE NOTICES Valerio Sonoran Palms LLC, Stanridge Lancaster Apartments LLC and Wendorff Sonoran Palms LLC Multiple units of Sunset Foothills Condominiums, 350 N. Silverbell Road 85745 Tax parcel: 116-15-5290, 116-15-5300, 116-15-532A, 116-15-5450, 116-15-5690, 116-15-5740, 116-15576A, 116-15-5770, 116-15-589A and 116-15-683A Original Principal: $2,700,000.00 Beneficiary: First Fidelity Bank, Scottsdale Auction time and date: 11:30 a.m. Nov. 28, 2012 Trustee: James R. Harrison, O’Steen & Harrison, 300 W. Clarendon Ave., Suite 400, Phoenix Del Bac Building Contractor Inc. Lot 100 of Madera Reserve Phase III, 730 E. Josephine Canyon Drive, Green Valley 85614 Tax parcel: 304-80-1220 Original Principal: $102,000.00 Beneficiary: BMO Harris Bank, successor by merger to M&I Marshal & Ilsley Bank, Milwaukee, Wis. Auction time and date: 11:30 a.m. Nov. 28, 2012 Trustee: Larry O. Folks, Folks & O’Connor, 1850 N. Central Ave., Suite 1140, Phoenix Del Bac Building Contractor Inc. Lot 191 of Madera Reserve Phase III, 811 E. Vault Mine Court, Green Valley 85614 Tax parcel: 304-80-2380 Original Principal: $53,000.00 Beneficiary: BMO Harris Bank, successor by merger to M&I Marshal & Ilsley Bank, Milwaukee, Wis. Auction time and date: 11:30 a.m. Nov. 28, 2012 Trustee: Larry O. Folks, Folks & O’Connor, 1850 N. Central Ave., Suite 1140, Phoenix Devkey LLC Units 201 and 205, 2292 W. Magee Road 85742 Tax parcel: 225-44-569 and 225-44-574 Original Principal: $713,200.00 Beneficiary: Wachovia SBA Lending Inc., Roseville, Calif.

Plants of Distinction 6930 E. Tanque Verde Road 85715 Tax parcel: 133-15-2930 Original Principal: $487,500.00 Beneﬁciary: Wells Fargo Bank, Mesa Auction time and date: 11:30 a.m. Nov. 29, 2012 Trustee: Ronald M. Horwitz, Jaburg & Wilk, 3200 N. Central Ave., Suite 2000, Phoenix SNV Properties LLC and Larry Finman and Anita Nichols 3350 N. Oracle Road 85705 Tax parcel: 106-03-122D, 106-03-123A, 106-03-124A and 106-03-122C Original Principal: $575,000.00 Beneﬁciary: Oracle Properties Limited Partnership, El Paso Auction time and date: 10 a.m. Dec. 11, 2012 Trustee: Kasey C. Nye, Quarles & Brady, 1 S. Church Ave., Suite 1700

LIENS Federal tax liens Vets4Vets, 7030 E. Broadway. Amount owed: $10,798.46. Coast To Coast Electric LLC and Christopher J. Lorenzen, 2968 W. Ina Road, Suite 201. Amount owed: $8,528.02. Famous Sam’s and Mokelly Inc., 2305 W. Ruthrauff Road, Unit B11. Amounts owed: $255,653.93 and $49,059.67. RJ&J LLC and Jose Quiroz-Miranda, 3081 W. Idaho St. Amount owed: $4,154.97. Hildreth’s Market and Merle D. Hildreth, 3542 N. Geronimo Ave. Amount owed: $10,642.83. Lucid Security and Kent Lewis, 12419 N. Wing Shadow Lane, Marana. Amount owed: $9,397.83. Saguaro Canyon Ranch Development Corp., PO Box 70207, 85737. Amount owed: $23,400.00. Floors To Go of Tucson LLC and Suzanna T. Harrison, PO Box 89655, 85752. Amount owed: $404,687.95.

State liens (Liens of $1,000 or more ﬁled by the Arizona Department of Revenue or Arizona Department of Economic Security.) Club 21 and Jacob Enterprises Inc., 2920 N. Oracle Road. Amount owed: $15,518.03. Amelia Grey’s Tea Garden and Annette Hartman Catering LLC, 5055 E. Speedway. Amount owed: $31,065.48. Ventana Tire Brake & Auto Service Inc., 6885 E. Sunrise Drive. Amount owed: $75,182,86. M&M Truck Boutique and M&M Truck Boutique LLC, 5819 S. Palo Verde Road. Amount owed: $21,126.60.

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

AllGlass LLC against Alan Solot, Solot Trust and Rame Family LLC. Amount owed: $5,465.00. Servpro Northeast Tucson against Corbett Partners. Amount owed: $79,144.78.

Release of federal liens Blue Lagoon Tanning LLC, 2145 N. Jacamar Lane Thermal Engineering of Arizona Inc., 2250 W. Wetmore Road Janitor’s Closet Inc., 3249 E. Lincoln St. Carter Pictures LLC, 1202 N. Venice Ave. Brian Lockhart Architect Ltd., PO Box 41795, 85717 Mathew Aaron Sears LLC, 3050 W. Tia Place Tucson Rodeo Parade Committee Inc., PO Box 1788, 85702 Kyosushi Chinese Combo & Vietnamese and Ung Vo, 9040 E. Valencia Road Santa Cruz Excavating, PO Box 37 AMNOO, 85001

Release of state liens Allied Homes Inc., 1741 N. Sixth Ave. BMC Development and Mary Lowe Barnett, PO Box 89400, 85752 Friendly Automotive Sales, Ronald Bush, Frank Bush and Marge Bush, 3100 N. Oracle Road JL&S Electrical Construction Inc., PO Box 515, Marana 85653

Keith Rosenblum

BANKRUPTCIES

Houston-based pipeline builder Kinder Morgan, outlined the company’s proposal for the natural gas pipeline at a recent meeting at the Arivaca Community Center.

PIPELINE CONTINUED FROM PAGE 3 In Mexico, the gas pipeline is being presented as a done deal. From Sasabe, 625 miles of pipelines will distribute natural gas to several Sonoran cities and the coastal populations of Puerto Libertad and Guaymas and eastward to Chihuahua state. The gas would replace fuel oil, one of the most polluting of fuels, at four CFE generating plants. The Puerto Libertad facility, less than 240 miles south of the border, generates 632 megawatts and emits a steady plume of black smoke, high in sulfur, over the Sea of Cortez. Conversions to natural gas would follow at power plants at Guaymas, Topolobampo and Mazatlán. Behind the plan is the bargain price of natural gas, which is now available to only a fraction of Mexican industry and few residential customers. An abundant supply of natural gas in the U.S. now sells at prices that are the equivalent of oil priced at $10 a barrel. If prices stay at this level, Velasco said, “the annual savings of converting just the Puerto Libertad plant is enough to pay for the project.” If the project doesn’t go through, “it would be a loss for everyone,” he said. “CFE and Mexico will lose lots of money having to run Puerto Libertad on fuel oil and both Sonora and Arizona will have to bear the hazards of smog.” The new grid adds a full 20 percent to the existing natural gas pipelines in Mexico. CFE decided to reach outside of Mexico for assistance on this project and conducted a “road show” last May in Houston, Texas. The gathering was attended by suppliers, builders and financiers. “The idea was to bring new players in to the industry,” Velasco said, “and it succeeded. In my 20 years in the energy business, I never seen such an event.” The Mexican government has now awarded six contracts. Three segments are in operation, three are under construction

and another three — including those in the area around Sasabe, Sonora — are pending. On the U.S. side, gas is to be provided by a U.S.-subsidiary of Pemex, Mexico’s national oil company, and is to be carried by Kinder Morgan pipelines. Up until now, neither CFE nor Kinder Morgan has publicly addressed the issue of a disconnect between Mexico’s aggressive pipeline construction schedule — which calls for breaking ground in the coming months — and the possibility, however remote, that a pipeline might not get regulatory approval. Whether that is a deliberate strategy or a communications breakdown among the partners isn’t clear. The latter may be more likely, however. In an interview last month, Tucson Mayor Jonathan Rothschild said Kinder Morgan officials had talked to him but were “vague, almost non-informative” about the project. Kinder Morgan officials would not comment for this report. The natural gas pipeline on the U.S. side would be 36 inches in diameter and pump 200 million cubic feet per day in its first year, enough for conversion of the Puerto Libertad plant and much of a new combinedcycle generating plant in Guaymas that is planned for 2017. If approved, the project would create 500 temporary jobs and provide royalties to a variety of landowners in Arizona. If rejected, it would delay the project and create consequences about which Mexican officials wouldn’t speculate. The FERC issued a notice Aug. 1 of its intent to prepare an environmental impact statement for the pipeline project and to request comments. In the notice, the FERC said it will be planning for the “scoping process,” during which it examines geology, soil, water resources, fisheries and wetlands, vegetation, wildlife, air quality, public safety and endangered and threatened species.

InsideTucsonBusiness.com

SEPTEMBER 14, 2012

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8 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

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InsideTucsonBusiness.com

SEPTEMBER 14, 2012

TOURISM TOURISM IN TUCSON

Fostering trade and tourism relations with Mexico I was fortunate to be part of a delegation of Arizonans going to Mexico, headed by Tucson Mayor Jonathan Rothschild and Phoenix Mayor Greg Stanton. The trip was created to build relationships and commerce with top trade and tourism officials and with privatesector businesses in Mexico. Mayor Rothschild, along with Maricela Solis, the business advocate in his office, and Felipe Garcia, executive vice president of the Metropolitan Tucson Convention and Visitors Bureau, conducted productive meetings in Guaymas, San Carlos and Hermosillo. The rest of the delegation then joined them for the remainder of the trip in Hermosillo and Mexico City. In meeting with people from the U.S. Ambassador to Mexico to Mexican tour operators, it is apparent stronger relationships need to be built, which will lead to additional trade and tourism between Arizona and Mexico. Arizonaâ&#x20AC;&#x2122;s reputation after passage of SB 1070 and a lack of tourism marketing in key Mexico markets are negatively impacting Mexican investment in Arizona. Conducting additional trade missions and increasing our tourism advertising are essential to growing Tucsonâ&#x20AC;&#x2122;s trade and tourism business from Mexico. A new initiative beginning this month is a weekly, 30-minute TV show, produced by the Metro Tucson CVB, which is airing throughout Sonora state and northern Sinaloa. This program allows us to better educate potential visitors about why they should visit Tucson. The Metro Tucson CVB operates visitor centers in the Sonoran cities of Hermosillo and Ciudad Obregon. We booked more than 9,000 Tucson hotel room nights last year just through those visitor centers. Leisure visitors to Arizona can also benefit from SENTRI (Secure Electronic Network for Travelers Rapid Inspection) at ground ports of entry and Global Entry at airports. These programs allow visitors who have been prequalified and screened, to enter the United States in a safe and expedited way. The Metro Tucson CVB is working closely with the U.S. Customs and Border Protectionâ&#x20AC;&#x2122;s field office to offer workshops in Mexico promoting these programs and to use our visitor centers as places where visitors from Mexico can fill out their applications. A 2008 study conducted by the University of Arizonaâ&#x20AC;&#x2122;s Eller College of Management found that Pima County, at 41 percent of the job impact, benefits more than any other Arizona county from Mexicans traveling to Arizona. More than 5 percent of Pima Countyâ&#x20AC;&#x2122;s taxable sales are attributed annually to visitors from Mexico. Increasing Mexican visitation to Tucson is

essential to continuing the local tourism recovery weâ&#x20AC;&#x2122;re finally starting to see. Meanwhile, Mayor Rothschild is focused on increasing the $6 billion in goods that BRENT DERAAD Arizona exports to Mexico every year. One opportunity is to create a stronger transportation corridor between Tucson and the deepwater port at Guaymas, which could greatly enhance exports and imports between Tucson and Mexican businesses. During the trip to Mexico, the mayor was able to visit three companies with a strong connection to Tucson. The first visit was to the Offshore Group, a Tucson-based company with manufacturing facilities in Guaymas, Hermosillo, Saltillo and Guadalajara. One of the companyâ&#x20AC;&#x2122;s tenants is Sargent Aerospace, a company that after expanding into Mexico, expanded its operations in the Tucson region. In Hermosillo, the mayor also had the opportunity to visit Leoni Wiring Systems, part of a German-based global firm that also has a presence in Tucson. We were able to attest that Tucson companies have great opportunities to become suppliers to the many manufacturing companies in Mexico. The trade and tourism mission to Mexico was a start to increasing business between Mexico and Arizona. Mexican government officials and private business executives were impressed that the mayors of Arizonaâ&#x20AC;&#x2122;s two largest cities would travel together with a delegation throughout Mexico to build relationships and increase commerce. Much work remains, however. Itâ&#x20AC;&#x2122;s vital that we find specific opportunities to attract Mexican investment in Tucson companies and seek scenarios where Mexican businesses can expand or create U.S. operations in Tucson. We also need to explore situations where Tucson businesses can export more of their products to Mexico. My thanks to Mayor Rothschild for taking a leadership role in building trade and tourism relationships between Tucson and Mexico. We at the Metro Tucson CVB look forward to helping deliver local and regional results from these initiatives.

Contact Brent DeRaad, president and CEO of the Metropolitan Tucson Convention and Visitors Bureau, at bderaad@visittucson. org. This monthly column is prepared by the MTCVB.

AAM WILL BE HOSTING A FREE DISCUSSION PANEL WITH INDUSTRY PROFESSIONALS. OPEN TO ALL HOA BOARD MEMBERS. Speakers include:

Jason Smith - Attorney, Scott McLaughlin - Insurance Specialist & Adam Escobar - VP of Finance

LEGAL & LEGISLATIVE CONCERNS HOA INSURANCE ISSUES & RESPONSIBILITIES BUDGET & FINANCE STRATEGIES September 22, 2012 | 9am - Noon Windmill Suites at St Philipâ&#x20AC;&#x2122;s Plaza 4250 North Campbell Ave, Tucson, AZ 85718

Limited seating, RSVP to AAM at 520.219.7200 Board members from any Tucson area HOA are encouraged to attend. Event is FREE and refreshments will be served. Bring non-perishable food items for the Community Food Bank of Southern Arizona and receive a rafďŹ&#x201A;e ticket to win a $100 Visa Gift Card.

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10 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

MEDIA

New owners of Azteca America TV station make plans for changes Tucson’s Azteca America station, KUDF 14, is preparing to introduce a half-hour local newscast in the next two months, making it the only Spanish-language TV to offer a full newscast produced in Tucson focusing on local content and border-area issues. That’s just one of the changes planned by the new owners of the station. Viewers should expect to see frequent “Mexico regional programming, mostly from the north” with both hard news and useful information for travelers, said Roberto Lemen Meyer, 44, a Hermosillo businessman and principal of the new ownership group, LM Media Group. Behind-the-scenes KUDF is in the process of hiring reporting and sales forces that should reach 15 in the next three months, Meyer said. The 30-minute local newscast is planned to air at 5:30 p.m. following Azteca America’s half-hour network newscast. As a precursor to the launch, KUDF is currently running five-minute, locallyproduced “news capsules” at the end of the network newscast. Azteca America, based in Glendale, Calif., is the U.S. subsidiary of TV Azteca, Mexico’s second largest media company after Televisa and lays claim to being the world’s second largest producer of Spanish-language TV programming. Within Mexico, TV Azteca operates Azteca 13 and Azteca 7 on more than 300 stations. In the U.S., Azteca America, launched in 2006, is the baby among Spanish broadcast networks. Univision, based in New York, traces its roots to 1968 when it started as the Spanish International Network. It is the largest Spanish broadcaster in the U.S. and its affiliates include KUVE 38 in Tucson. Telemundo goes back to 1954 when it was launched in Puerto Rico and is now headquartered in the Miami suburban of Hialeah, Fla. Telemundo is now part of NBCUniversal and broadcasts in Tucson on KHRR 40. Rodolfo Martin Velez, Lemen Meyer’s brother-in-law, acquired KUDF in March for $810,000, according to filings with the Federal Communications Commission. LM Media Group purchased the station from Una Vez Mas Holdings LLC., a Dallas-based group that operates 22 other stations, all affiliated with Azteca America. It had owned KUDF for seven years. Under different call letters, channel 14 has been on the air since 1989, operating at times as an affiliate of Telemundo, an English-

Keith Rosenblum

By Keith Rosenblum Inside Tucson Business

Roberto Lemen Meyer at his office at Torre Hermosillo

language religious station and as a rebroadcaster of Telemax, a station based in Hermosillo and owned by the state of Sonora. By FCC standards, KUDF is a low-power station broadcasting with 10,000 watts from its transmitter on top of Mount Bigelow. That’s the same site used by other TV stations in the Tucson market. In addition to broadcasting to most of the Tucson region, KUDF’s signal is carried by Cox cable on channel 61, Comcast cable on channel 13 and Dish Network on channel 14. Currently, KUDF broadcasts its signal in analog but by the end of the year, it plans to switch to digital, which will allow it to upgrade to high definition. The acquisition of KUDF is a foray into the U.S. for Lemen Meyer, an attorney

Inside Media David Hatfield’s media column is scheduled to resume in the Sept. 21 issue.

whose business interests in Mexico are varied. He is founder and CEO of several companies including Corporativo Legaxxi, a Hermosillo-based financial firm that employs 1,200 and has branches throughout the country. A native of Mazatlan, he is also owner and operator of Marina Terra Hotel and Spa, a luxury hotel in San Carlos, Sonora, and a partner in several real estate and land ventures. He was among those who hosted Tucson Mayor Jonathan Rothschild last month during the mayor’s visit to Sonora. In an interview at his offices in the iconic Hermosillo 19-story high-rise, Torre Hermosillo, Lemen Meyer answered more questions about the plans for KUDF:

Q. Why buy a TV station in Tucson? A. Spanish-language television is still a growing market. We’re betting we can fill an information and entertainment void between northern Mexico and Southern Arizona. Q. Is there enough of a Spanish-speaking market in Tucson to justify three channels in the market? A. More than enough. One of every three homes in the market is Mexican or Mexican-American and we think there’s plenty of room for all three to do well. Q. What’s the difference in the three? A. We are focused far more on Mexico while the other stations are more generically Latin America. Azteca’s brand is a strong one for all Mexicans. Its lineup is particularly good with sports and soapoperas, and we intend to speak directly to our marketplace in Sonora, Sinaloa, Chihuahua and beyond. Q. Azteca has increased its visibility in Sonora — www.aztecasonora.com — where there are now eight newscasts covering Nogales, Ciudad Obregón, Navojoa, Guaymas and Hermosillo. Is your move an extension of this? A. No, not deliberately so, but it is the expansion of content that appeals to Mexicans, wherever they are. Q. You had no interest in the Phoenix market? A. None. The Tucson market is much more fertile for opportunities. Q. What’s an example of local programming to come? A. We’ve already got promo spots for “De Vagaciones,” a weekly half-hour show presents vacation destinations to Arizonans. (The program, whose name is derivation of the words vacaciones, and “de vaga,” a slang term for “wandering,” is to premier with a segment on San Carlos.) I’ll be selling space to restaurants, diving outfits and anyone else who wants to appear in Arizona. Q. Can you get anyone from Arizona to go to Mexico today? A. Right now, it’s almost impossible to attract the anglo market, no matter what we say, no matter what we offer. There’s this ongoing stream of bad news, defamation, about the country. The U.S. press depicts violence in the streets and nothing could be farther from the truth. Hopefully, we get past this. Meanwhile, we are doing very well with the domestic market and with Mexicans in the U.S. They aren’t frightened off.

InsideTucsonBusiness.com

SEPTEMBER 14, 2012

BRIEFS GET ON THE LIST

Next up: Commercial printers, Copying/Duplicating firms, Mailing services, Promotional product suppliers Inside Tucson Business is gathering data for the 2013 edition of the Book of Lists. Categories that will be published in upcoming weekly issues of Inside Tucson Business are: â&#x20AC;˘ Sept. 21: Locally owned restaurants, Chain-owned restaurants â&#x20AC;˘ Sept. 28: Commercial printers, Copying/Duplicating firms, Mailing service firms, Promotional product suppliers â&#x20AC;˘ Oct. 5: Home builders, Custom home builders, Largest apartment complexes â&#x20AC;˘ Oct. 12: Franchises, Employment agencies â&#x20AC;˘ Oct. 19: Alarm system companies, Security firms, Insurance agencies and brokers, Property casualty insurance If your business fits one of these categories, now is the time to update your profile. Go to www. InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page. New and unlisted businesses can create a profile by following the directions.

POLITICS

State high court puts 9th measure on ballot Voters in the Nov. 6 election will get a chance to vote on whether Arizona should go to whatâ&#x20AC;&#x2122;s called a â&#x20AC;&#x153;top twoâ&#x20AC;? primary system in which the two top vote getters in a primary, regardless of political party, move on to the general election. The Arizona Supreme Court issued the ruling Sept. 6, one day before the deadline to print ballots. All totaled, there will be nine state-wide propositions on the November ballot. The â&#x20AC;&#x153;top twoâ&#x20AC;? measure will appear as Proposition 121 on the ballot. Under the provision if passed, instead of having separate party primaries all candidatesâ&#x20AC;&#x2122; names local, county, state and federal offices would appear on a single primary ballot. Party labels would be optional. The other eight ballot propositions are: â&#x20AC;˘ Proposition 114: Would amend the state constitution to exempt a crime victim from liability or damages incurred by the perpetrator of a crime if it is classified as a felony offense. For example, it would protect victims from lawsuits by a person who was injured while fleeing from a felony crime. â&#x20AC;˘ Proposition 115: Would change the

way Arizona selects judges to give the governor more flexibility in appointments, add in a legislative review and reduce the Arizona Bar Associationâ&#x20AC;&#x2122;s influence. â&#x20AC;˘ Proposition 116: Would increase the state tax exemption on new equipment purchased by businesses from what is currently $68,079 to the full cash value up to an amount equal to the annual earnings of 50 workers. For example, if the measure had been in effect in 2010, the cap would have been $2.4 million, based on 50 times the average annual earnings per job in Arizona of $45,753, according to the Federal Bureau of Economic Analysis. â&#x20AC;˘ Proposition 117: Would cap the annual increase in property valuations done by county assessors to no more than 5 percent above the previous year. While there are currently provisions for limited increases for most primary taxes, there is no cap on valuations used to calculate secondary property taxes for such things bond issues and school district budget overrides. â&#x20AC;˘ Proposition 118: Would create a permanent annual distribution to recipients such as public education, to revenues of state trust land that would be equal to 2.5 percent of the average market value of the lands for preceding five years. â&#x20AC;˘ Proposition 119: Would allow the state to exchange state trust land for other public land in Arizona to preserve and protect military facilities. Such trades also would have to meet other conditions, including appraisals. â&#x20AC;˘ Proposition 120: Called the State Sovereignty Act, it would grant Arizona exclusive control over air, water, public lands, minerals, wildlife and other natural resources within the stateâ&#x20AC;&#x2122;s boundaries. â&#x20AC;˘ Proposition 204: Would permanently extend the stateâ&#x20AC;&#x2122;s 1 percentage point sales tax thatâ&#x20AC;&#x2122;s due to expire May 31, with revenues to go primarily to support education.

Final counts change candidates for Nov. 6 Final tabulations from the Aug. 28 primary election have decided who will represent District 4 in the state Legislature. Lynn Pancrazi, D-Yuma, wonâ&#x20AC;&#x2122;t face a Republican challenger in the Nov. 6 general election after Perla Inzunza, from Goodyear, got only 37 write-in votes, below the minimum 187 that was required. And Juan Carlos â&#x20AC;&#x153;J.C.â&#x20AC;? Escamilla, DSan Luis, won the second seat from District 4 in the House, with a final 173-vote victory over Charlene R. Fernandez, DYuma. Lisa Otondo, D-Yuma, also won election as the top vote getter in that race.

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12 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

GOOD BUSINESS PR CORNER

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On a recent trip to Washington, D.C., I was once again inspired by our 16th president, Abraham Lincoln. I was captivated by his high ethical standard. His greatness was evident in historical events. He held the Union together and led it to victory in the Civil War. His actions and beliefs led to the emancipation of slaves. Before any these events made history, he laid the foundation that paved the way for his success by demonstrating a high standard of ethics and integrity that built public support. Abraham Lincoln was a man of character who also knew the value of good public relations. He understood the underlying work involved in building good public relations and his reputation for being honest and fair gained him the respect of the public. These attributes were fundamental to his accomplishments. Lincoln utilized his reputation of honesty and fairness to broaden his constituency. By the time he was president, statements he had made previously — such as “I have never tried to conceal my opinions, nor tried to deceive anyone in reference to them,” and “I am glad of all the support I can get anywhere, if I can get it without practicing any deception to obtain it” — had become a source of strength for him. All professionals who interface with the public can learn a valuable lesson from Lincoln. Impeccable ethical behavior is the foundation of public relations. In today’s world, we all practice PR by trade or by default. We communicate to the public in so many facets; through responses to the media, postings on social media, comments in public settings, behavior during professional events, and more. Every comment, and “no comment” is a reflection of you and your organization’s character. What are you presenting to the public? With what adjective would your public label you? Have you earned a reputation like “Honest Abe”? Character and integrity build public trust, trust builds credibility, and relationships built on trust develop advocates. Lincoln’s good name earned him favor and helped him get elected to public office. Lincoln teaches us to be transparent. This behavior earns respect and builds alliances. Trust, of course, is the essential building block for any successful relationship.

Abraham Lincoln embodied ethics as the foundation of public relations. His honest and straightforward communication style earned him the respect of his friend and his JESSA TURNER enemies alike. He once said, “Truth is generally the best vindication against slander.” This statement still holds true today. As Lincoln once said, “Public sentiment is everything … with public sentiment nothing can fail. Without it, nothing can succeed. He who molds public sentiment goes deeper than he who executes statutes or pronounces decisions. He makes statutes or decisions possible or impossible to execute.” We may not always be correct or have all the information, but we can always be honest and transparent in our interactions with the public. Trust me, the public will remember. September is Ethics Awareness Month for the Public Relations Society of America (PRSA). The Southern Arizona Chapter of PRSA will explore ethics issues at a Sept. 25 luncheon with Ron Sable, president of Concord Solutions Ltd. and former special assistant to President Ronald Reagan. In that latter role he often briefed and responded to the media and the public on the president’s policies. Inside Tucson Business readers are invited to attend. Here are the details: • 11:45 a.m.-1 p.m., Sept. 25 at the Arizona Inn, 2200 E. Elm St. • Cost: $35; or $25 for members of PRSA Southern Arizona Chapter, International Association of Business Communicators Tucson, American Advertising Federation Tucson and Tucson Chapter of the American Marketing Association; and $15 for students. • Reservations: www.prsatucson.org

Jessa Turner manages media and public relations for the University of Arizona Office of University Research Parks and serves as ethics chair for the Southern Arizona Chapter of the Public Relations Society of America, whose members write this monthly column.

InsideTucsonBusiness.com

SEPTEMBER 14, 2012

SMALL BUSINESS

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Don’t be limited to networking when prospecting for business Tucson is a networking town. How many times have you heard or said that yourself? We hear that because it’s true. Networking is effective because it is a relevant sales activity in the business culture we have created in this region. We are open and receptive to a random stranger walking up to us at a business function and introducing himself or herself. It’s not outside our comfort zone; it’s how we hunt for new business. Try walking up to a random stranger in Boston to network. You’ll quickly relate to Dorothy in “The Wizard of Oz” when she realized she wasn’t in Kansas anymore. We in Tucson are fortunate to have so many diverse business groups that host networking events. Many are open to the public and all welcome prospective new members. In recent years, we’ve seen the emergence of non-dues paying and industryspecific networking groups, many of which can be found in the calendar section of Inside Tucson Business. Networking is an affordable and effective way to make new contacts while enjoying a cup of coffee in the morning or something stronger to drink late in the afternoon. I view networking as an activity where people are working to make new contacts that they can do business with and receive referrals from — to essentially help them climb the food chain. It’s also a give-and-take. Successful networkers do an excellent job of helping people connect with others. The drawback to networking is that eventually successful networkers reach a point where they are giving much more than they are receiving so the incentives and rewards to networking diminish. As much as Tucson is a networking town, the reality is the majority of businesses do not network. There are successful businesses in Tucson we do not know about because they fly under the radar. They don’t network, belong to a chamber of commerce or sponsor community events. They are in industries such as manufacturing, research and development or mining, and are found tucked away in industrial areas throughout

the region with little visibility. They are established businesses employing anywhere from five to 50 people and want to do business with other local businesses. JERRY BUSTAMANTE So, how do you get to them? Contrary to popular belief, cold calling does work in Tucson, and it’s a great way to get your foot in the door. I’m not suggesting you dial for dollars, but for appointments. If you do your homework and develop your prospecting skills, cold calling a prospect does work. Simply introduce yourself and ask for 15 minutes to learn about their business and to talk about yours. Cold calling is like batting in baseball, you will fail more than you will succeed but you will develop a batting average. It’s a numbers game. The more you practice, the better you will get, and your cold calling batting average will improve. It is a skill that needs to be refined and mastered. Learning how to deal with gatekeepers who stand between you and your prospect is huge and they are people you cannot take for granted. The payoff is when that 15-minute appointment turns into a one-hour visit, including the nickel tour of their facilities. You are in great shape at that point. Using social media and marketing resources, such as Constant Contact and Infusionsoft, are excellent tools to help you stay in front of your clients and top-ofmind with your prospects. Networking is effective and works great in Tucson, but you have to include other sales activities so as not to limit your potential. Take advantage of every tool in your sales arsenal, including the phone on your desk in your pocket. Happy hunting!

Jerry Bustamante is senior vice president of public policy and oversees the Southern Arizona office of the Arizona Small Business Association, 4811 E. Grant Road, Suite 262, in Crossroads Festival, phone (520) 327-0222.

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INSIDE TUCSON BUSINESS

CALENDAR SPECIAL EVENTS

Employment Law Breakfast BrieďŹ ng Tuesday (Oct. 2) 7:30 to 9:30 a.m. Westward Look Resort 2450 E. Ina Rd. Contact: Shirley Wilka swilka@ tucsonchamber.org or (520)792-2250 www.tucsonchamber.org Presented by Fennemore Craig, learn how to protect yourself from costly NLRB charges and ADA complaints SAHBA Fall Home and Garden Show Friday (Oct. 5) through Sunday (Oct. 7) 10 a.m. to 7 p.m. Friday and Saturday

and 10 a.m. to 5 p.m. Sunday Tucson Convention Center 260 S. Church Avenue Contact: Amy McReynolds amy@ sahba.org or (520) 795-3025 $8 for adults www.sahbahomeshow.com 8th Annual Tucson Record Show Sunday (Nov. 11) 9 a.m. to 3 p.m. Las Cazuelitas Event Center 1365 W. Grant Road Contact: Bruce Smith cassidycollectibles@ earthlink.net or (520) 622-0104

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Cost: $4 Dealers from all over the Southwest will be selling vinyl, tapes, CDs and music memoribilia. Dealer tables are $35. PRSA of Southern Arizona Ethics Luncheon Tuesday (Sept. 250 11:45 a.m. to 1 p.m. Arizona Inn 2200 E. Elm Street Info: Lisa Wilkinson, lisagentilini@ gmail.com or (770) 617-9044 $25 to $35 www.PRSATucson.org RSVP required

REGULAR MEETINGS

Tucson Association of Executives Every Wednesday 6:30 to 8 a.m. Tucson Country Club 2950 Camino Principal RSVP: (520) 321-0879, taeofďŹ ce@aol.com Tucson Business Connection First Wednesday 5 to 7:30 p.m. Pearl Nightclub 445 W. Wetmore Road Information: (520) 219-0266, WArnold@ trayersinsurance.com or www.tbcnetworking.com

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CALENDAR RSVP: Not required Cost: Free to attend, free snacks, cash bar Tucson Christian Business Connections First and third Thursdays 7 a.m. 3516 E. Grant Road Information: Robert E. Hinske, (520) 795-7195 or (520) 990-5374 Tucson Computer Society Third Monday 6 p.m. (pre-session) 7 p.m. (meeting) Pima County Medical Society Auditorium 5199 E. Farness Drive Information: (520) 625-4419 or www.aztcs.org Cost: Free *No meeting in September Tucson Downtown Sertoma Club First and third Wednesday 11:30 am to 1 p.m. Viscount Suites 4855 E. Broadway Information: www.tucsonsertoma.org RSVP: tdsertoma@yahoo.com Tucson Goal Getters Every other Sunday 1 p.m. Spill the Beans 2920 N. Swan Road Information: www.meetup.com/TheTucson-Goal-Getters or (520) 370-6961 Cost: $20 Tucson GLBT Chamber of Commerce Monthly breakfast meeting Third Thursday 7:30 to 9:30 a.m. Hotel Tucson City Center 475 N. Granada Ave. RSVP: (520) 615-6436 or info@ tucsonglbtchamber.org Cost: $15 members, $20 guests Tucson Hispanic Chamber of Commerce Monthly Networking Luncheon Third Thursday 11:30 a.m. The Manning House 450 W. Paseo Redondo RSVP: www.tucsonhispanicchamber.org. Cost: $25 members, $30 nonmembers Tucson Hispanic Chamber of Commerce Monthly Fiesta Mixer First Thursday 5:30 p.m. Locations vary Information: www.tucsonhispanicchamber.org. Cost: $10 members, $15 nonmembers Tucson-Mexico Sister Cities Monthly Board Meeting Second Thursday 5:30 p.m. Ward VI ofďŹ ces, 3202 E. 1st Street Information: (520)250-3901 or http:// tucsonmexicosistercities.org Tucson Presidio Rotary Club Every Wednesday Noon to 1 p.m. Providence Service Corp. 64 E. Broadway Information: Jay McCall, (520) 909-9375 Cost: free, lunch provided

Tucson Utility Contractors Association Second Wednesday 7 to 8 a.m. Locations vary RSVP: (520) 623-0444 Tuesday Morning Business Club Leads and networking Every Tuesday 7 to 8 a.m. The Hungry Fox 4637 E. Broadway RSVP: Mike Ebert (520) 320-9311 www.tucson-networking.com

Varsity Clubs of America Midtown Mixer First Tuesday 5 to 7:30 p.m. 3855 E. Speedway RSVP: midtownmixer@excite.com Information: (520) 918-3131 Cost: free, cash bar, menu available Alliance of Construction Trades Third Wednesday 5 to 7 p.m. Hotel Tucson City Center 475 N. Granada Ave. Information: www.actaz.net RSVP: By noon on Monday prior

SEPTEMBER 14, 2012

to meeting, (520) 624-3002 Cost: $20 American Society of Training and Development Third Friday (excluding August) 7:30 to 9:30 a.m. Breakfast and professional development meeting El Parador 2744 E. Broadway Information: www.ASTD-Tucson.org

16 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

PROFILE

Pharmacists create ready packaged remedies By Keith Rosenblum Inside Tucson Business When two men with doctoral degrees in pharmacy struggle themselves to distinguish between hundreds of over-the-counter products, it’s time to prescribe a new approach to selling remedies. That need — for simpler, holistic choices at non-traditional locations — underlies creation of New Bloom Pharmaceuticals, a newcomer at Arizona Center for Innovation at the University of Arizona Science and Technology Park. New Bloom hopes to have its first products on the market before the end of the year. Behind the initiative are Atal Wassami, 31, a pharmacist at Tucson Medical CenBIZ FACTS ter, and partner MiPharmacists Atal Wassami, left, and Michael Lamhang have developed chael Lamhang, 25, New Bloom Pharmaceutimedicine packets designed to treat specific ailments. a pharmacist whose cals LLC c/o Arizona Center it, most recent stint has for Innovation University of i it was the perfect by helping them make good choices when it and required comes to their health. But when I get sick and s been at United Health Arizona Science and Technol- size no n measuring, and I have to go to the pharmacy, even I am overCare. The two have ogy Park thought, ‘This is how whelmed with the choices. Imagine if the det known one another 9040 S. Rita Road, Suite 1270 I want medication cisions are daunting for a pharmacist, what since 2007. to t be, simple, dosed they must be like for an average citizen.” www.azinnovation.com It was Wassami just for you, nothing A week after their conversation, the two j who first articulated (520) 382-3260 to t fear. You only use men created New Bloom Pharmaceuticals his frustration about it LLC. One week later, they were accepted as i as you need it.’” the remedies for life’s Wassami thought he might have a soul- participants in the Center for Innovation’s headaches and other maladies. The epiphany came at one of life’s corporate hotcake mate in his school-mate. “I specifically re- business incubation program and that is membered Michael’s goals to integrate a love where they are now making plans to enter mainstays. “I was sitting in an IHOP and I started of computer programming into pharmacy ac- the commercial marketplace. The doctors are now preparing what they call playing with a single packet creamer,” Was- tivities and so one day we got to chatting. We sami recalled. “I had been thinking about met for an hour and we talked about appro- “symptom-based kits for a variety of ailments.” Society is overwhelmed with product making medication more convenient for priate packaging medication. He loved it!” Lamhang, a native of Montreal, shared lines sold through pharmacy chains, the two years and I couldn’t understand why it had to be so confusing or confounding. The the perspective. “As pharmacists, our fore- reasoned. What is needed was not only the packet was simple. You wanted to play with most goal is always to improve people’s lives chemical compound that, for example, would

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help a person relax and fall asleep, but a kit with a sleep mask, ear plugs and a simple-tounderstand explanation about what a customer needed to do and why. Moreover, the product needed to be available at the point where it was needed and not just in aisle 12 of a drugstore. “We want to move away from the pharmacy altogether and make ourselves available in airport stores, hotels, mini-bars and on airplanes,” Wassimi said. Not everything has been as easy as preparing a pharmacological compound. New Bloom has changed its product name three times. It has had two designers and three lawyers. Neither pharmacist has quit — literally or figuratively — his day job. Yet, if everything goes as planned, the company will introduce its brand, allo!, in December with a cough and allergy kits complementing its sleep pack. How the products are to be marketed is not yet defined. The two want to wholesale under their own brand but will look at selling generically to other suppliers, and expect that online sales will be key. They have spoken with their alma mater about offering kits through UA Campus Health, the student health service, and have been told may be considered as long as “continuing education” materials are included in the packets. New Bloom Pharmaceuticals joined the Arizona Center for Innovation (AzCI) in the spring. Like most of the startups we serve, the founders, Lamhang and Wassimi, bring unique and valuable industry expertise to their venture and are trying to solve a challenging problem in a very innovative way. However, both Lamhang and Wassimi have more than industry expertise and a great idea. They have focus, commitment, passion and vision.

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InsideTucsonBusiness.com

SEPTEMBER 14, 2012

OUT OF THE OFFICE MEALS & ENTERTAINMENT

ARTS & CULTURE

With summer now over, restaurants get new life

Next generation theater talent on stage at the UA

With the return of families and University of Arizona students — not to mention the end of summer heat — September is the month Tucsonans can put the summer dolldrums behind us. That as big as it gets for the restaurant industry. In coming weeks and months you’ll see new restaurants opening and I’ll be highlighting what’s new and noteworthy in future columns. This week though, I want to point out two existing restaurants that are making significant changes. At the corner of Campbell Avenue and Sixth Street near the University of Arizona, Social House Kitchen + Pub — we’re supposed to call it “SoHo” for short — last month replaced Sam Hughes Place Championship Grill. It’s trying to capitalize on the gastropub phenomenon with a re-designed and updated décor and a totally revamped menu. Even with the change, it appears they’re targeting you, readers of Inside Tucson Business, rather than students with many of the salads, sandwiches and burgers priced in the mid-teens. As an example, the Wildcat Burger, a grass-fed beef patty with roasted green chile, avocado, mayonnaise and pepper jack cheese, is $16, though you can save yourself $3 by going for non-grass-fed beef. • Social House Kitchen + Pub, 446 N. Campbell Ave. — www.soho-az.com/ — (520) 747-5223

Vero Amore’s new digs This week, the original Vero Amore completed a move about half-mile south

MICHAEL LURIA

into a larger digs in Plaza Palomino. When Vero Amore opened in 2006 in the Bashas’ center at Camp Lowell Drive and Swan Road, it caught on quickly serving its Neopolitan-style pizza with fresh-made

mozarella. Brother owners Aric Mussman and Joshua Mussman have since opened a second Vero Amore in Marana’s Dove Mountain, at Dove Mountain Boulevard and Tangerine Road, as well as one of the region’s first gastropubs, Noble Hops, at Lambert Lane and La La Cañada Drive, in Oro Valley. All the while their original Vero Amore remained, shall we say, small and intimate. But even this move is only temporary. Vero Amore has taken over the space last used by Red Sky restaurant, which closed quietly over the summer, while new permanent space is built out in Plaza Palomino for the new Vero Amore. But even in the temporary location, the Mussmans have introduced a larger menu, full bar and patio dining. • Vero Amore, 2990 N. Swan Road in Plaza Palomino — www.veroamorepizza. com/ — (520) 325-4122

Contact Michael Luria at mjluria@ gmail.com. Meals & Entertainment appears weekly in Inside Tucson Business.

The University of Arizona School of Theatre, Film and Television has opened its season with a repertory theater production, “How I Learned To Drive.” The 1998 Pulitzer Prize winner for drama and 1997 Drama Desk Award winner uses the driving metaphor to deal with control and manipulation and sexual issues as it follows a relationship between an uncle and a young girl from adolescence through post-college. It contains adults themes and content. Performances are at 7:30 p.m. next Thursday (Sept. 20) and Fridays and Saturdays and 1:30 p.m. Sundays through Sept. 30 in the Tornabene Threatre in the College of Fine Arts Building, 1031 N. Olive Road at the southeast corner of East Speedway and Park Avenue on the UA campus. Tickets are $28 each, $26 for seniors, military and UA employees, and $19 for students. Buy them at http://tftv. arizona.edu/ or (520) 621-1162.

Exhibits A photographic exhibit, “Desert Initiative: Looking Across the Border” at the Louis Bernal Gallery features images by David Taylor, Paul Turounet and Alejandro Cartagena taken from the Arizona-Sonora border. The exhibit also features video work and performance pieces from artists on both sides of the border. It will be up until Oct. 5. The Louis Bernal Gallery is on the West Campus of Pima Community College (PCC), 2202 W. Anklam Road. The gallery’s normal hours are 10 a.m.-5 p.m. Mondays through Thursdays and 10 a.m.-3 p.m. Fridays. Separately, an exhibition of five works by Pete Trexler, an artist and photography instructor at PCC, is on display through Nov. 26 at the Behavioral Health Pavilion Gallery at the University of

Arizona Medical Center-South Campus, 2800 E. Ajo Way. Entitled “Meditations,” these large scale, abstract works are beautiful and thought-provoking. The work can be HERB STRATFORD seen from 8 a.m.-7 p.m. weekdays and 1:30-4 p.m. weekends.

Film This weekend, there’s something for all tastes debuting on the big screen. For families, there’s a new 3D version of the Disney/Pixar animated feature “Finding Nemo.” For horror/action fans, there’s the latest chapter in the long-running “Resident Evil” series with Milla Jovovich. And for a laugh, there’s “For A Good Time Call,” which details the exploits of a pair of girls who start a phone sex business. You’ll find all three at the multiplexes. Meanwhile, at the Loft Cinema, 3233 E. Speedway, features include “Hari-Kiri: Death of a Samurai,” “Wild Horse, Wild Ride,” about wild mustang trainers and the annual competition to turn these spirited animals into show stoppers in just 100 days, a campy Nazis-in-space science-fiction romp “Iron Sky,” and the Wall Street Thriller “Arbitage” with Richard Gere. But the most unique cinema event coming up is a screening of the silent 1928 film “Passion of Joan Of Arc” Sunday and Tuesday at the Loft.

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

18 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

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InsideTucsonBusiness.com

SEPTEMBER 14, 2012

City fires two, others resign from TDOT after investigation By Patrick McNamara Inside Tucson Business A westside electrical firm got a retaining wall and a parking lot. A pizza shop near the University of Arizona got its back parking lot repaved. And there were cases of personnel paving projects not to mention a few instances where other governmental entities also benefitted from City of Tucson Transportation workers using city equipment and materials to do side jobs. A year-long investigation by the city that turned up the wrong-doing resulted in the firings of two Transportation Department employees. Two others resigned to avoid being terminated and another long-time employee chose retirement. City officials released the documents of the investigation Sept. 6. The investigation found misuse dating back to at least 2004. City officials could not say how much money the employees cost the city in terms of use of equipment and stealing of construction material. â&#x20AC;&#x153;In excess of six figures, I would guess,â&#x20AC;? said Tucson City Attorney Mike Rankin. Rankin said the decision whether the employees would be subject to criminal

prosecution would be up to the Pima County Attorneyâ&#x20AC;&#x2122;s Office. The two fired employees were identified as Dan Carpenter and Fernando Martinez. The employees who resigned were Kurt Hough, director of the streets division, and Robert Palomarez. Fred Gradillas is the employee who retired. According to documents the city released, Hough and Palomarez acted as ringleaders of what was essentially a private enterprise run from the Streets Division. The city says Hough and Palomarez used city equipment, material and employees to build a retaining wall and parking lot on the property of Kelly Electric, 1144 W. Miracle Mile. The investigation says Hough was personal friends with Kelly Electric owner, Ken

Kelly. Hough also was suspected of being in debt to Kelly to at least $5,000. Kelly did not return a phone call requesrting comment. The documents also say Hough had a Streets Division employee deliver several tons of soil to the home of one of Kellyâ&#x20AC;&#x2122;s person friends to build a BMX bicycle track. Another allegation against Hough was that he instructed city employees to pour a concrete slab at the cityâ&#x20AC;&#x2122;s complex at Park Avenue and Ajo Way, so he and fellow workers could park their motorcycles. The job was done incorrectly, however, and had to be done a second time. City documents said Palomarez used onduty city employees and equipment to pave a parking lot of a restaurant near South Sixth Avenue and Irvington Road. He was also accused of using employees

The city says Hough and Palomarez used city equipment, material and employees to build a retaining wall and parking lot on the property of Kelly Electric, 1144 W. Miracle Mile.

and equipment to grade and chip seal entry roads to Evergreen Cemetery, at Miracle Mile and Oracle Road. Palomarez also was accused of using city employees and trucks to have two loads of sand delivered to Sunnyside High School for use on the baseball fields. The documents say Palomrezâ&#x20AC;&#x2122; brother is a coach at the school. In addition to the wrongful use of city equipment, the documents indicate that much of the side work the employees did was done while on the clock for the city. Newly hired Transportation Department Director Daryl Cole said new measures have been put in place to ensure similar incidents donâ&#x20AC;&#x2122;t continue to occur. Those include the installation of global position system devices on department vehicles, keeping closer track of materials and checking that the amount taken was equal to the job required, and using a new time card system to better track hours. Rankin said other employees with the department still face disciplinary actions for their connection to the incidents.

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

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INSIDE TUCSON BUSINESS

TREO goes to 75% private funding but asks governments to stay By Patrick McNamara Inside Tucson Business Calling it an evolution of the model for economic development agencies, Tucson Regional Economic Opporunities (TREO) this week announced it would restructure its funding formula and invite local municipal governments as well as the Tohono O’odham Nation and Pascua Yaqui Tribe to have seats on its board at no charge. “When we launched, we were 100 percent publicly funded,” said TREO President and CEO Joe Snell. Under the new structure, he said 75 percent of TREO’s funding will come from the private sector members with Pima County continuing to contribute

about $350,000 per year. When asked why Pima County would continue to pay while other governments wouldn’t, Snell said, “They’re a regional government. There’s no turf with them.” When it comes municipal jurisdictions, each has a vested interest in trying to locate firms within their boundaries. Snell said Pima County does not have that same concern within the region. TREO was launched in 2005 but since then some governmental jurisdictions have withdrawn the memberships. Prior to the announcement Monday night, which Snell said was effective immediately, dues-paying government entities were Pima County, the City of Tucson and the towns of Oro Valley

and Sahuarita. In addition to the two tribal governments, Snell said he hopes Marana and South Tucson will also now participate in TREO. Snell said he hopes the governments who will no longer be required to pay to be members of TREO will use those savings to create some kind of business incentive fund. He also said he encourages governments to continue to fund their own economic development offices because those office can do things beyond TREO’s narrow scope of attracting export and manufacturing companies. Despite the restructuring, TREO still intends to issue periodic reports and presen-

tations to its public sector members. As for TREO’s bottom line, Snell said $466,000 that had come from the public sector government has been more than made up in private funding. “The private sector votes one way — with its money and they’ve voted load and clear,” he said. Although the change took effect immediately, TREO doesn’t have to issue any rebate payments because none of the local governments had yet made any payments for this fiscal year.

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

PEOPLE IN ACTION

PATTI REED-RUSSELL

ELECTIONS The Community Food Bank of Southern Arizona has announced that Patti Reed-Russell and Marnel Camp, were elected to its board of directors. Patronato San Xavier, formed in 1978 to restore and preserve San Xavier Mission, has elected Charles Albanese, FAIA, as the board’s new president. Albanese succeeds James Pyers who served as board president for seven years. Albanese is the retired dean of the University of Arizona College of Architecture and Landscape Architecture. He is a fellow of the American Institute of Architects, and as a practicing architect, he has had major responsibility for 275 built projects in Southern Arizona. He has served on more than 20 community boards and remains active at the University of Arizona. Patty Doerr has been elected vice president of Patronato San Xavier. She has been a community volunteer for the past 35

years. She created the Summer Fine Arts Program for children and served as its director for 27 years. Carondelet Foundation has elected its board of trustees for the 2012-2013 fiscal year. The Foundation Board is responsible for generating charitable support and community awareness to advance the mission of Carondelet Health Network, Southern Arizona’s only faith-based, not-for-profit healthcare system. The new members include: Milton Ames, Wealth Management Advisor, ButtonWood Advisors, LLC; Janet Bingham, Ph.D., president emeritus and consultant, Huntsman Cancer Foundation; Tim Prouty, first vice president, CBRE Capital Markets; Cristie Street, co-founder, Nextrio, LLC; Fred Fruchthendler, chair, president, Jacob C. Fruchthendler & Company; Barbara Fromkin, Ph.D., vice chair, co-owner, Miles Ahead Cyclery; Terri Thorson, treasurer vice president – Investments, Portfolio Manager, UBS

Financial Services, Inc.; W. Craig Gibson, secretary, agent, New York Life; Richard F. Imwalle, chief executive officer; T.K. Warfield, immediate past chair, president, Valley Animal Hospital. Palmer Evans, MD, a member of the Pima Council on Aging Board of Directors has been elected chairman of the board for 2012-2014. Other officers include: Terrence H. Allen, first vice chair; Frank Watts Jr., second vice chair; Rev. Robin Klaehn Quilliam, secretary; and Carol M. Swango, treasurer; and Alan I. Levenson, M.D., immediate past chairman. Jim Murphy is PCOA president and CEO. PCOA members also elected six new board members: Robert Fleming, attorney and partner of the law firm of Fleming and Curti, PLC; Jo Smith, director of regulatory services for Tucson Electric Power Company; Mercy Valencia, Ph.D., vice president of Real Estate Administration at the

CHARLES ALBANESE

DR. RYAN KRETZER

{TELL US ONLINE} Now your business can tell Inside Tucson Business about new hires, promotions and special awards online. Go to www.insidetucsonbusiness.com and click the “People in Action” button. From there you can submit your announcement and we’ll publish it online and in print. University of Arizona, retired; Robert Van Sice, a U.S. Air Force Colonel (ret.), managing engineer at Raytheon; Linda Wojtowicz, a registered nurse and currently serves as the chief operating officer and senior vice president of Tucson Medical Center; and Ronald Zack, a registered nurse and attorney of the law firm Ronald Zack, PLC. NEW HIRES Microbusiness Advancement Center (MAC) has hired Michael Landy as executive director. Landy has more than 25 years of experience in non-profit organizations. Microbusiness Advancement Center has hired Timothy Bruchman as a business analyst.

Bruchman will lead MACs business planning classes on Saturday mornings. He has been involved in many successful high tech Tucson startup companies such as Photometrics Ltd.

PATRICK MACIULLA

Hospital. His specialty is the treatment of degenerative disc disease and spinal tumors utilizing minimally invasive and complex neurosurgical techniques. Lang Wyatt Construction has hired Patrick Maciulla as director of operations. Maciulla will oversee all construction operations and field employee relations. He has 40 years of commercial construction and management. PROMOTIONS

Carondelet Health Network has hired Ryan M. Kretzer, M.D., a neurosurgeon from The Johns Hopkins Hospital in Baltimore to the medical staff of Carondelet Neurological Institute at St. Joseph’s Hospital. Kretzer spent 16 years at the Johns Hopkins teaching facility — as a student, resident and instructor. He graduated from Johns Hopkins University School of Medicine and completed both his training in neurological surgery and his fellowship training at The Johns Hopkins

The University of Arizona’s Office of University Research Parks has promoted Jessa Turner and Anita Bell to senior management positions. Bell was promoted to senior client services manager at the Arizona Center for Innovation (AzCI), a business incubator, located at the Tech Park. In her role, Bell manages AzCI business development programs and activities that assist start-up companies participating in the AzCI programs. Turner was promoted to senior media and public relations

manager for the Office of University Research Parks which oversees the UA Tech Park, Bio Park and Arizona Center for Innovation. Turner manages public and media relations as well as community relations particularly working with the communities surrounding the Tech Park and Bio Park. Mark Mansfield has been named vice president of generation for UNS Energy Corporation. Mansfield, 57, will succeed Andy Hoekstra, 64, who will retire the job by the end of the year. Mansfield will oversee power plants operated by subsidiaries Tucson Electric Power and UniSource Energy Services. Mansfield served as senior director of generation at TEP, managing the operations of the H. Wilson Sundt Generating Station and other local generating resources. He also has overseen TEP’s interest in remote plants co-owned with other utilities, including the gas-fired Luna Energy Facility and three coal fired plants, the San Juan, Navajo and Four Corners

Generating Stations. The University of Arizona’s Office of University Research Parks (OURP) has hired Patrick Murphy and Heather Spitzer Dominguez. Murphy as facilities and construction manager will be responsible for directing the design, construction and maintenance of all facilities, as well as planning, allocating and tracking space requirements and allocations. Murphy has 15 years of technical expertise in the areas of site planning, layouts, budgeting, scheduling, engineering, design, procurement and construction management. Spitzer-Dominquez has been hired as a business development coordinator. She has ten years extensive experience in sales and marketing and will primarily be assisting the business development director with business recruitment and attraction for both the UA Tech Park and Bio Park.

InsideTucsonBusiness.com

SEPTEMBER 14, 2012

NEWS

One bank, one credit union receive improved financial ‘star’ ratings Inside Tucson Business As the financial industry continues to slowly recover from the recession, one bank and one credit union operating in Southern Arizona received improved ratings in the latest quarterly report from the independent bank rating firm, Bauer Financial. One bank was downgraded slightly. Overall, Bauer Financial reported that the data filed with federal regulators as of June 30, showed about two-thirds of the nation’s banks earned its recommended status of either four or five stars, which it notes is the most since March 2008, which was compiled based on data as of the end of 2007. These latest Bauer ratings were issued Wednesday based on data filed for the quarter ended June 30. Among major financial institutions operating in Southern Arizona, Bank of America, the nation’s second largest bank by total assets, was upgraded to “good,” 3½ stars, from “adequate,” three stars, and Desert Schools Federal Credit Union was upgraded to “excellent,” four stars, from “adequate.” The one financial institution to be downgraded by Bauer was Commerce Bank of Arizona, which dropped from “good” to “adequate.” Once again, only one major fiKEY nancial instituion Bauer Financial, Coral Gables, was in Bauer’s Fla., is an independent firm “problematic stathat compiles data on financial institutions and issues quarterly tus,” two stars, Tucstar rankings of them. The latest son Healthcare information is compiled from data filed with federal regulators Affiliates Federal for the quarter ended June 30, Credit Union. 2012. The report was issued Sept. The percentage 12, 2012. of banks in Arizo Superior na ranked as recExcellent ½ Good ommended is just Adequate 25.8 percent, the Problematic lowest of any state Troubled and down from Zero Lowest rating 27.8 percent a year ago. At the same time, the number of banks considered troubled and problematic has fallen significantly to 22.6 percent, from 38.9 percent a year ago. States that have a higher percentage of problematic or troubled banks than Arizona are Florida, at 38 percent; Georgia, 35.7 percent; Idaho and Nevada, both at 25 percent; and South Carolina, 23.9 percent. States with the highest percentage of recommended banks are Alaska, at 83.3 percent, and Texas, at 82.3 percent. Bauer reports credit unions in Arizona have shown even more improvement. The percentage of recommended credit unions in the state now stands at 71.7 percent, up from 56 percent a year ago and the percentage of troubled or problematic credit unions is down to 6.5 percent, from 20 percent a year ago. Nationally, more than 75 percent of credit unions are now ranked in Bauer’s recommended status, which the company is the highest since it started issuing its reports in 1983.

BANKS Star Rating (6/30/12)

Star Rating (3/31/12)

Headquarters city

Bank

Average tangible assets as of June 30

Average tangible assets as of March 31

2nd Quarter 2012 1st Quarter 2012 Net Income Net Income

2011 Net Income

Nonperforming Assets % Total

Alliance Bank of Arizona (Western Alliance Bank)

Phoenix

$2.34 billion

$2.22 billion

$7.8 million

$9.8 million

$19.8 million

1.0%

Banamex USA

Century City, Calif.

$1.43 billion

$1.41 billion

$419,000

-$2.1 million

$4.8 million

0.2%

Bank of America

Charlotte, NC

$1.374 trillion

$1.384 trillion

$3.69 billion

$3.21 billion

$9.64 billion

4.8%

Bank of Arizona (BOKF)

Tulsa, Okla.

$24.97 billion

$95.6 million

$82.3 million

$276.8 million

1.5%

Bank of Tucson

Tucson

$286.6 million

$281.0 million

$913,000

$239,000

$2.1 million

1.3%

Bank of the West

San Francisco

$58.02 billion

$58.62 billion $150.4 million

$128.1 million

$442 million

1.3%

BBVA Compass

Birmingham, Ala.

$59.57 billion

$59.10 billion $139.7 million

$125.8 million

-$1.71 billion

2.4%

BMO Harris (M&I Marshall & Ilsley Bank, Harris Bank)

Chicago

$88.42 billion

$89.75 billion $175.5 million

$100.5 million

$337.4 million

2.7%

Canyon Community Bank

Tucson

$86.8 million

$89.7 million

-$133,000

-$1.3 million

3.5%

$251.2 million

$261.6 million

-$1.7 million

-$143,000

-$1.4 million

6.6%

$7.89 billion

$7.71 billion

$19.3 million

$18.4 million

$62.2 million

3.4%

-$165,000

Commerce Bank of Arizona

Tucson

Great Western Bank

Sioux Falls, SD

JPMorgan Chase Bank

New York

$1.773 trillion

$1.776 trillion

$2.46 billion

$3.67 billion

$12.46 billion

2.0%

Mutual of Omaha Bank

Omaha, Neb.

$5.77 billion

$5.65 billion

$1.9 million

$10.4 million

$44.6 million

1.3%

National Bank of Arizona

Tucson

$4.41 billion

$4.42 billion

$5.3 million

$3.3 million

$25.5 million

2.6%

Northern Trust

Chicago

$91.25 billion

$94.22 billion

$173 million

$189.7 million

$571 million

0.3%

U S Bank

Minneapolis

$318.48 billion

$314.83 billion

$1.38 billion

$1.30 billion

$4.72 billion

2.4%

Washington Federal

Seattle

$13.21 billion

$13.31 billion

$35.3 million

$34.2 million

$120.6 million

2.5%

Wells Fargo Bank

San Francisco

$1.133 trillion

$1.117 trillion

$3.57 billion

$3.77 billion

$13.06 billion

4.4%

Source: Bauer Financial Inc., www.bauerfinancial.com Average Tangible Assets: Total average assets less intangible assets Nonperforming assets as a % of Tangible Assets: Loans past due 90 days or more (60 days for credit unions) + nonaccrual loans + other real estate owned (primarily repossessions) as a percent of tangible assets

CREDIT UNIONS Star Rating Star Rating (6/30/12) (3/31/12)

Credit Union

Headquarters city

Assets (6/30/2012)

Assets (3/31/2012)

2nd Quarter 2012 Net Income

1st Quarter 2012 Net Income

2011 Net Income

Nonperforming Assets % Total

Arizona Central Credit Union

Phoenix

$401.9 million

$403.4 million

$829,000

$837,000

$901,000

1.0%

Arizona State Credit Union

Phoenix

$1.37 billion

$1.35 billion

$4.7 million

$3.2 million

$8.3 million

0.7%

Desert Schools Federal Credit Union

Phoenix

$3.09 billion

$3.08 billion

$15 million

$10.1 million

$23.3 million

1.1%

Hughes Federal Credit Union

Tucson

$648.8 million

$611.6 million

$1.8 million

$1.6 million

$2.3 million

0.3%

Pima Federal Credit Union

Tucson

$381.9 million

$382.9 million

$807,000

$809,000

$2.9 million

0.1%

Pyramid Federal Credit Union *

Tucson

$117.7 million

$174,000

$172,000

$55,000

1.8%

SunWest Federal Credit Union

Phoenix

$255.8 million

$257.6 million

$753,000

$745,000

$2.0 million

0.4%

Tucson Federal Credit Union

Tucson

$348.1 million

$345.1 million

$579,000

$1.3 million

$2.5 million

1.3%

Tucson Healthcare Affiliates Federal Credit Union

Tucson

$15.4 million

$15.5 million

$92,000

-$38,000

-$23,000

0.8%

Tucson Old Pueblo Credit Union

Tucson

$136.2 million

$136.6 million

-$57,000

-$288,000

$1.4 million

1.4%

Vantage West Credit Union

Tucson

$1.16 billion

$1.17 billion

$6.2 million

$2.8 million

$13.3 million

0.8%

Source: Bauer Financial Inc., www.bauerfinancial.com * As of January 2012, Tucson Telco Federal Credit Union and Southern Arizona Communications Credit Union were merged into Pyramid Federal Credit Union.

22 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

FINANCE YOUR MONEY

Investing in municipal bonds is more complex, don’t go it alone Buying municipal bonds used to be relatively simple: Research and select the issues with the highest after-tax yield, then clip your coupons. But times have changed. In the post-financial crisis world, fiscal troubles facing many state and local governments have led to concern about specific issues and the future viability of the municipals market. Consider assessing the potential benefits of municipals with the help of an investment professional. Here are some of the key factors currently affecting the muni market that make selection harder than ever. • Risk analysis: Beyond ratings. Credit ratings are helfpul tools in assessing the credit quality of an individual bond. These ratings (with “AAA” typically being the highest) are arrived at through analysis of such variables as the fiscal condition of the municipality, debt levels, as well as the economic and demographic characteristics of the local area. While it is crucial for you to understand a bond’s credit rating, that alone may not tell the whole story. For instance, a broader analysis might look at the politics of the community to see whether there are underlying threats to its ability to continue to fund debt. • Bond insurance: A changing market. Bond insurers — the companies states, cities and local governments had often used to enhance the credit quality of the bonds they issue — came under scrutiny during the financial crisis of 2008. Most of these insurers saw credit ratings downgrades and some even left the business. Currently only one large insurer remains, Assured Guaranty Ltd., and it insures only about 5 percent of new municipal bond issues. Prior to the financial crisis, insured bonds accounted for more than half of new muni issuance. With the use of bond insurance for new issues all but gone, investor due diligence when evaluating municipal bond offerings is even more important. • Downgrades and defaults. Historically, munis have had a very low rate of default. According to Moody’s, the cumulative 10-year default rate on municipal bonds was 0.13 percent from 1970-2011. This compares to 11.17 percent for corporate issues over the same period. Several recent high-profile defaults, however, have captured news media attention and rattled investor confidence, underscoring the importance of credit ratings and other factors when assessing the quality of a particular issue or issuer. • A diverse market that defies general-

izations. While there are many categories of municipal bonds, from general obligation bonds and revenue bonds, to private activity bonds and federally taxable municipal bonds W. DAVID FAY — all with varying applications and risk/return profiles — any meaningful analysis needs to happen on an issuer-by-issuer basis. Some municipalities may be in good financial standing while others may be struggling. Similarly, a project funded by one bond may be successful and go on to generate significant revenues for the municipality, while another may struggle. Again, the upshot for individual investors: Due diligence must be thorough and done on a case-by-case basis. • Increasing exposure to AMT. Interest on municipal bonds is generally exempt from federal income tax, however, some bonds may be subject to the alternative minimum tax (AMT). The AMT is a parallel tax regime that taxes at a different rate, with different deductions and credits than ordinary income tax. In recent years, more people have found themselves subject to the AMT. Certain municipal bonds issued for not-for-profit 501(c)(3) organizations and other private activity issuers may be subject to the AMT. In exchange for the risk they may become taxable at some point, private activity bonds typically pay higher yields than non-AMT bonds. These are just a few of the dynamics affecting today’s municipal bond market — and complicating the investment selection process. For those who believe in the underlying value of investing in municipal bonds, now more than ever, you should consider the guidance of an experienced professional.

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

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

Company Name

Symbol Sept. 12

Sept. 5 Change

52-Week 52-Week Low High

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

AERG.OB CEXIQ.OB PRSC UNS

0.04 0.02 13.05 41.28

0.04 0.02 11.91 40.41

0.00 0.00 1.14 0.87

0.03 0.01 8.41 34.28

0.43 0.10 15.94 42.10

9.35 0.45 2.75 8.97 59.35 8.51 86.73 18.58 58.15 3.70 18.35 33.05 34.59 27.44 33.06 16.08 100.89 42.60 46.47 9.50 78.21 58.71 20.57 40.10 29.72 57.05 60.10 203.77 33.08 59.92 5.54 39.92 35.69 12.77 53.77 23.92 1.50 34.52 28.22 41.38 60.55 39.22 39.52 39.42 47.94 67.93 29.05 15.55 57.88 46.53 16.45 43.26 60.90 9.85 9.18 43.32 34.70 64.38 17.54 28.59 43.07 20.31 124.94 28.84 11.82 33.94 74.07 35.36 34.33 9.45 20.44

8.52 0.48 2.63 7.95 57.74 7.59 84.25 17.91 57.72 3.38 17.01 29.77 33.71 27.24 32.36 15.84 98.22 42.70 45.53 8.88 74.88 56.96 19.44 35.25 28.21 56.54 57.52 195.04 32.56 58.29 5.46 37.01 33.57 11.35 51.20 22.56 1.50 32.88 28.10 40.93 59.99 39.87 37.40 37.24 46.74 66.52 25.96 14.04 56.84 45.49 16.50 40.98 52.11 9.06 9.09 43.52 32.30 63.73 16.94 28.52 42.25 19.07 119.23 28.19 11.22 33.08 73.55 35.88 33.75 9.37 19.36

0.83 -0.03 0.12 1.02 1.61 0.92 2.48 0.67 0.43 0.32 1.34 3.28 0.88 0.20 0.70 0.24 2.67 -0.10 0.94 0.62 3.33 1.75 1.13 4.85 1.51 0.51 2.58 8.73 0.52 1.63 0.08 2.91 2.12 1.42 2.57 1.36 0.00 1.64 0.12 0.45 0.56 -0.65 2.12 2.18 1.20 1.41 3.09 1.51 1.04 1.04 -0.05 2.28 8.79 0.79 0.09 -0.20 2.40 0.65 0.60 0.07 0.82 1.24 5.71 0.65 0.60 0.86 0.52 -0.52 0.58 0.08 1.08

7.97 0.20 1.48 4.92 50.95 5.30 65.35 16.25 43.82 3.30 12.30 21.40 19.72 14.61 22.19 8.49 78.41 31.16 32.28 6.64 40.01 43.64 8.03 28.85 17.50 31.03 41.22 161.99 27.10 44.82 2.69 27.85 25.73 5.02 42.72 20.98 0.49 12.14 18.53 32.90 38.64 24.38 25.56 13.68 33.20 50.13 19.06 3.29 38.35 36.50 14.73 31.00 28.89 6.25 7.15 34.55 20.96 47.25 14.04 25.78 28.26 15.51 77.73 25.77 3.96 21.84 49.94 28.53 22.61 4.44 13.18

12.09 3.63 4.06 10.10 61.40 9.94 87.14 28.53 60.00 4.93 21.16 38.40 35.16 28.79 33.96 16.15 100.96 43.43 48.69 12.25 78.75 67.20 20.70 48.96 30.49 57.89 62.00 210.69 34.77 62.33 5.85 46.49 35.86 13.12 56.66 24.83 1.81 34.52 32.29 41.80 62.83 42.17 40.45 39.46 48.31 70.20 43.18 15.70 58.00 47.17 23.16 43.53 85.90 14.32 10.05 46.08 34.99 64.99 18.66 34.24 43.84 25.84 126.91 58.29 14.51 34.25 75.24 37.61 35.19 9.92 22.81

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

InsideTucsonBusiness.com

SEPTEMBER 14, 2012

INSIDE REAL ESTATE & CONSTRUCTION

Sales of foreclosed homes lag 2011 by 15% By Roger Yohem Inside Tucson Business

Notices of Trustees Sales Pima County Recorder Foreclosures

Despite a positive and promising upward bump in August, this year’s pace of foreclosed home sales lags far behind the volumes of 2011. The current monthly average of 491 distressed sales is 15 percent behind last year’s rate of 580 per month, according to new data from the Pima County Recorder’s Office. At this time last year, 5,118 foreclosure sales had been closed. Year-to-date, the volume is 3,925 sales. In August, there were 673 sales of distressed homes recorded, the highest monthly total of 2012 and the most since 667 foreclosures were sold in May 2011. August saw a significant, positive increase in monthly activity that had been averaging only 465 closings in 2012. New notices of trustee’s sales in August were basically flat. Only three fewer notices were issued last month compared to July, according to the Recorder’s Office data (see chart). Trustee’s notices, the first step in the foreclosure process, totaled 794 in August, bringing the year-to-date total to 6,958. That is 528, or 8 percent, more than the 6,430 notices issued during the same 2011 period.

tain Boulevard. The lots were finished about a year ago, according to Will White, Tucson manager of Land Advisors Organization, who brokered the transaction.

Richmond buys 63 lots

$2.7M condo default

Richmond American Homes has acquired 63 lots at the Preserve at Dove Mountain in Marana for $3.4 million. The seller was Dove Mountain Miramonte, a real estate entity owned by local builders-developers Chris Kemmerly and Steve Quinlan. The 63 finished lots are at the northeast corner of Tangerine Road and Dove Moun-

THE PULSE: Median Price Active Listings New Listings Pending Sales Homes Closed

TUCSON REAL ESTATE

9/3/2012

8/27/2012

$167,000 4,046 329 321 98

$159,950 4,161 382 385 268

Source: Long Realty Research Center

2007 346 276 305 300 396 377 419 503 394 483 540 475 4,814 401

Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. Total Mo. avg.

30 YEAR 15 YEAR 3/1 ARM

Current

2009 882 1,016 1,154 1,093 991 1,002 1,063 1,130 1,008 948 859 1,038 12,184 1,015

2010 863 982 1,089 985 890 862 1,111 1,067 1,090 1,019 829 876 11,663 972

2011 975 762 948 721 748 693 666 917 797 816 754 636 9,433 786

2012 705 918 904 910 984 946 797 794

6,958 870

Pima County Recorder’s Office data

Sunset Foothills Condominiums, 350 N. Silverbell Road, have fallen into foreclosure and are scheduled to be sold at public auction in November. The owner of the small, 10-parcel development that was built in 1962 is Valerio Sonoran Palms LLC, Calabasas, Calif. According to the trustee’s sale notice, Valerio Sonoran Palms is delinquent on an original $2.7 million note. The beneficiary is First Fidelity Bank in Scottsdale. The sale is being handled by the Phoenix law firm of O’Steen & Harrison. The public auction is set for 11:30 a.m. Nov. 28 at the Pima County Courts Building, 110 W. Congress St.

Landscape foreclosure Trustee’s sale notices totaling $787,500 have been filed against Plants of Distinction, 6930 E. Tanque Verde Road, setting up a pub-

WEEKLY MORTGAGE RATES Program

2008 699 598 661 700 720 742 721 814 782 921 675 923 8,956 746

Last Week

9/11/2012

One 12 Month 12 Month Year Ago High Low

3.63% 3.875%APR 3.50% 3.75%APR 4.95% 2.88% 3.125%APR 2.88% 3.125% APR 4.22% 2.75% 3.00%APR 2.88% 3.125% 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.

3.50% 2.88%

lic auction of the property in November. Public records list the company’s officers as president Thomas E. Black III and secretary Mary Black, both of Tucson. The landscape design and installation firm and retail plant company had won awards for its design work. Thomas Black is a licensed contractor who has worked in the industry for over 30 years. The beneficiary is Wells Fargo Bank. The auction is being handled by the Phoenix law firm of Jaburg & Wilk. The trustee’s sale is set for 11:30 a.m. Nov. 29 at the Pima County Courts Building, 110 W. Congress St.

Sales and leases • Iglesia Ni Cristo purchased a 7,049 square-foot building that was the former Park Avenue Christian Church, 4635 S. Park Ave., for $380,000 from Arizona Christian Missionary Society. Rob Tomlinson, Picor Commercial Real Estate Services, handled the transaction. • Linda and Todd Hood purchased a 9,794 square-foot industrial building at 3420 N. Dodge Blvd. for $380,000 from J-FAM LLC, represented by Rob Glaser, Picor Commercial Real Estate Services. The buyer was represented by Tony Reed, Long Realty. • Northwest Hospital leased 9,851 square feet at 6130 N. La Cholla Blvd. from HCP Inc., represented by Tom Knox and Rick Kleiner, of Picor. • CBIZ leased 9,321 square feet at 1765 E. Skyline Drive from United Insurance Company, represented by Doug Marsh, Oxford Realty Advisors. The tenant was represented by Tom Knox, Picor Commercial Real Estate Services, and Bill Main, CBIZ Gibraltar Real Estate Services, Chicago. • Caliber Funding LLC leased 6,286 square feet at 56 W. Congress St. in Congress

Place from BC Limited LLC, represented by Buzz Isaacson, CBRE. The tenant was represented by Tari Auletta, Newmark Grubb Knight Frank. • Garden Center of Tucson leased 4,000 square feet at 2920-2922 E. Broadway from LMG Investment LP, represented by David Hammack, Volk Company Commercial Real Estate. • Ley Institute of Plastic & Hand Surgery leased 1,763 square feet at 5225 E. Knight Drive, Suite 201, from TMC Holdings, represented by Rick Kleiner and Tom Knox with Picor. Buzz Isaacson with CBRE represented the tenant. • Nails.com LLC leased 1,400 square feet at Cornerstone Plaza, 2485 N. Swan Road, Suite 141, from Tres SEZ Inc., represented by Kirk Costich of Southern Arizona Real Estate Partners. The tenant was represented by Craig Finfrock of Commercial Retail Advisors. • Carlos Hernandez leased 1,390 square feet at 850 E. Ohio, Suite 24 from RRL Inc., represented by Brandon Rodgers with Picor. • Retirement Navigators leased 1,331 square feet at 258 E. River Road, Suite 110 from River Road Professional Plaza. Andrew Sternberg, Oxford Realty Advisors, handled the transaction. • Prayerfully Popped leased 1,200 square feet at 1101 N. Wilmot Road, Suite 117 from Larrinaga Sisters LLC. Jeff Zellet of Picor represented the tenant. • Terry J. and Katie M. Montgomery leased 1,200 square feet at 3933 E. 29th Street, Suite 506 from Presson Midpoint LLC, represented by Rob Glaser and Paul Hooker with Picor. • Golden Scissors Salon, through several principals, leased 1,200 square feet at River Village on the northwest corner of north River Road and west Oracle Road from River Equities LLC, represented by David Hammack of Volk Company Commercial Real Estate. • Hussman Corporation leased 1,000 square feet at 2112 N. Dragoon St., Suite 8, from Rich Rodgers Investments Inc., represented by Brandon Rodgers, of Picor. The tenant was represented by Tricia Gumulka, Newmark Grubb Knight Frank. • Psych Network leased 941 square feet at 1011 N. Craycroft Road, Suite 400, from Larsen Baker, self-represented by Andy Seleznov. The tenant was represented by Andrew Sternberg and Doug Marsh, Oxford Realty Advisors. • Abbaco Insurance & Financial Services leased 932 square feet at 3819 S. Evans Blvd., Suite 307, from Ajo/Evans Business Park LLC, represented by Pat Welchert and Jeff Zellet, of Picor.

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

24 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

EDITORIAL BIZ BUZZ

Stop investigating, it’s time to move on I got a phone call the other day from a person who is active in local political and business issues and still a friend — I hope — in spite of the fact that Inside Tucson Business hasn’t been too supportive lately of this particular person’s efforts. And by not supportive, I mean that we’ve criticized this person by name in recent opinion columns and editorials. It’s not that the two two of us have DAVID HATFIELD deviated in our points of view; it has more to do with tactics. Whether you’re dealing with an errant child or an errant politician, it’s important to point out the wrongdoing but then, I believe, once the child or politician involved recognizes the errors of their ways we move on — making certain there are no reoccurrences of the same mistake. My friend says that when it comes to local politics, Tucson City Hall and Pima County government have long histories of repeated wrongdoing. Those responsible are never held accountable. Even if some have seen the errors of their ways, my friend insists it’s important to get to the bottom of what went wrong so that it’s exposed and the guilty are held accountable. Plenty has gone wrong in Tucson over the years. We’re one of the largest cities in the U.S. left to choke on our own exhaust fumes because we have no cross-town freeway. We had Mayor Tom Volgy from 1986-1991 who lead the charge to drive IBM’s manufacturing business away. From the day it opened in 1971 as the Tucson Community Center, what’s now called the Tucson Convention Center (TCC) has been a white elephant. The list can go on and on. Lately, with the economy in such misearble shape, it’s understandable that people’s ire would focus on money. Whether it’s to fix potholes or more cash to flush down the TCC drain, people want to know what’s happened to their money. While politicians are pointing fingers, others — my friend included — are demanding investigations. We know what’s happened to at least some of the money for roads. Highway User Revenue Fund (HURF) money, which mostly comes from gas taxes, vehicle registration and license fees, has been spent in government transportation departments in ways that don’t directly contribute to road maintenance. When revenues fell, governments were slow to pare down their employee counts and instead let the roads rot. When it comes to the TCC and downtown Tucson, we know the Arizona Attorney General’s office has the FBI conducting an investigation into how the Rio Nuevo Multipurpose Facilities District squandered $230 million with little to show for it. In this case, it’s likely a forensic audit will show what went wrong. In these instances, money wasn’t spent the way most of us expected. But now what needs to be done to best serve all concerned is for government to come clean, mend the errors of its ways and move on. In other words, start getting things done, the right way. If not, there’s Election Day on November 6 when we can do something to change that. In the meantime, what good is served by bringing things to a halt while politicians insist on conducting investigations?

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

EDITORIAL

Everyone should speak up for the F-35 Last month we had an editorial about the shadow group Tucson Forward and its nefarious scheme to have just the opposite effect — move Tucson backward. Since then we’ve heard from Inside Tucson Business readers who want to step up to do what they can to let the U.S. Air Force know the Tucson region wants to welcome an F-35 training facility here. So we’re here to oblige and encourage all who want to make their support known to write letters. The most important letter is to Terry Yonkers, assistant secretary of the U.S. Air Force in charge of installations, environment and logistics. For good measure, send copies to your Congressman and to U.S. Sen. John McCain. Here’s Yonkers’ address: • Honorable Terry A. Yonkers SAF/IE 1665 Air Force Pentagon Room 4E996 Washington, DC 20330-1665 Others who should receive letters are: • Michael B. Donley Secretary of the United States Air Force 1160 Air Force Pentagon Washington, DC 20330-1160 • General Mark A. Welsh, III HQ USAF/CC Chief of Staff, USAF 1670 Air Force Pentagon Washington, DC 20330-1670 • General Mike Hostage Commander, Air Combat Command 205 Dodd Blvd, Suite 100 Langley AFB, VA 23665-2788 • Lt General Burton Field HQUSAF A-3/5 1630 Air Force Pentagon

Washington, DC 20330-1630 • General Larry O. Spencer HQUSAF/CV Vice Chief of Staff, USAF 1670 Air Force Pentagon Washington, DC 20330-1670 Here’s an example of a letter written by one local business executive: Assistant Secretary Yonkers: As (describe something about yourself, your position in your business or the community), I am writing to express my complete support for the 162nd Air National Guard Fighter Wing and the arrival of the F-35A joint strike fighter. Along with a majority of Southern Arizona citizens, we embrace the mission of the 162nd and consider it to be a vital factor in the defense of our country and the training of our allies’ pilots. As the next chapter in this long-term success story, we eagerly anticipate the arrival of the first F-35A. There is a small vocal minority in our community that opposes the F-35A. While we respect the views of others, it is important to recognize that their arguments have included inaccuracies and even false information in an effort to influence our local citizenry. The fact is that Southern Arizona overwhelmingly supports the mission and future of the 162nd and the arrival of the F-35A despite the efforts of this vocal fringe group to adversely impact the decision-making process. We welcome the F-35A! (Your signature) The Air Force has already selected Luke Air Force Base in Glendale to be the site of the first F-35 training facility but the opportunity remains that the 162nd’s base at Tucson International Airport could be selected in future rounds.

InsideTucsonBusiness.com

SEPTEMBER 14, 2012

OPINION BUSINESS INK

Monsoon gladness: When was the last time you watered? As of Sept. 14, it’s 72 days and counting. In gratitude and celebration of one of the best boomin’ monsoons in many a year, the Yohem Household hasn’t had to water any outside vegetation since July 3. (Except of course, a few potted plants under the overhang.) Think back to the blazing days leading up to the Fourth of July. Due to an underproduction of precipitation and tinderbox fire conditions, we desert denizens were placed under a fireworks ban. It doused some planned patriotic spectaculars throughout the region. Also off limits were boomers for consumers. It was a bemusing paradox that only a bureaucracy could ignite. By Arizona law, it is legal for consumers to buy fireworks. By the same law, it also is legal for jurisdictions to ban the use of fireworks under certain conditions. So just ’cuz you buy ’em doesn’t entitle you to light ’em. That logic is akin to a popular political cop-out: I was for it before I was against it. Once fireworks were outlawed, parents struggled to entertain their kids on a nothing-to-do holiday night in Tucson. (Or, as many young people now call this city: “Nothing to Do-son”). The littler tykes were saddened by the ban, akin to having their

soft Happy Meal cookie taken right out of their hands and replaced with a stringy celery stick. And all those “Fireworks for Sale!” tents at busy intersections around town? They disappeared like a ROGER YOHEM Rio Nuevo dollar. On July 4, the colossal cumulo-nimbus clouds burst. From the Santa Ritas to the Catalinas, the rains came. I remember that night well. During a barbecue at the home of friends, we playfully debated the proper plurality of the monsoon makers. Some argued for cumulo-nim “busses.” Others claimed precedent in the plural word for cactus: cacti. That made the clouds cumulo-nim “bussi.” Amazing how a few margarita pops can expand your vocabulary. Regardless, that was the first day we marked a little “R” on the big wall calendar in the kitchen. By the end of July, there were 10 widely scattered Rs in place. August brought eight more, and already in

September, an R is in six boxes. What constitutes an R? Although my wife was a scientist early in her career, the determining factors are clearly unscientific. Was the storm wild enough to cause awe? How many shingles blew off the roof? Did the power go out? Is the chimney leaking (again)? Did lightning hit the neighbor’s saguaro? Is rainwater seeping in under the doors (again)? How thick is that flying termite swarm on the patio? Did the thunder scare the pee out of the cat? These are the little joys that make monsoons so special. Tucson International Airport, the city’s official site for measurement, has recorded just under seven inches of rain this year. Officially, that is about two inches below normal. Really? How credible is that when there are eight inches of “mostly cloudy” running down the Santa Cruz River? Does that count as undocumented rain? Perhaps there’s a conspiracy underfoot, a ruse to intentionally under-report official rainfall in the Old Pueblo. It appears to be a “less is more” strategy. Maintaining a “less” than normal precipitation perception gives “more” clout to Pete the Beak to quack down on water conservation. Mr. Mayor, you promised Tucsonans a new

era of government. Stop this monsoon scandal and hang an official rain gauge from the rainbow-maker on top of City Hall. (Perhaps the Tucson Airport Authority Board can help you pick one out from the SkyMall magazine.) So, what affect did all this drizzle have on utility bills? More monsoons bring more humidity. So although it seemed like the air conditioner ran 24/7, our electric consumption in July and August was about 15 percent less than a year ago. For water, we are pool-free but teenager abundant. There were concerns since we did not take a summer vacation, took two or three showers each on some days, and our daughter hosted two big sleepovers in parties of 12 and 16 teens. Compared to last year, our water use fell about 45 percent in July and 25 percent in August. Thanks to Mother Nature, conserving water was easy this summer. And we did it without any highly paid government publicists telling us how to do it.

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

ADVOCATING FOR BUSINESS

Improving education outcomes is not as simple as ABC Let me share two real case histories with you that provide perspective for the problems of workforce development fasing Southern Arizona. These may be isolated instances, but are nevertheless representative of a major challenge to the future of our local economy. In one case, a company was having trouble hiring individuals to read electric and gas meters. The manager of the company told me he receives about 500 applications for every opening. Job requirements are basic math (being able to add and subtract); basic English (being able to read and comprehend instructions); a clean drug test and a clean background check. By the time 500 candidates have gone through the screening process, the manager said only five qualify for hiring. That’s sad. In another case, a local distributor had trouble filling a variety of open positions from forklift operator to sales to middle management. This employer’s struggles were pretty much like those of the meter reading company. Lots of applications. Few who qualify. So what’s going on? After hearing from teachers, school administrators, parents and just plain private citizens, I’ve concluded we a complex challenge upgrade our workforce. The challenge goes way beyond school

funding, Common Core Standards, AIMS testing and the three Rs. • We have children going to school on Monday morning who have not eaten a solid meal since they left MICHAEL VARNEY school Friday afternoon. • We have way more drugs in our K-12 school system than any of us on the outside realize. Many of them are mom and dad’s prescriptions. • With increased unemployment has come increased domestic abuse and child abuse. • There are too many homes where young people receive little or no attention to or assistance with their studies. When parents fail, it is difficult for students to succeed. • Discipline in schools has been eroded by a legal system that inserts lawyers into situations that used to be handled between schools and families. Parents who do not insist that little Johnny respect authority are not doing little Johnny a favor. • Technology and a massive onslaught of social change swamp today’s students

with a barrage of harmful messages and distractions that are seemingly impossible for the young person to escape. It is true that Tucson has its share of high-performing schools and it is true that many parents are involved in their children’s scholastic performances. My point is that society’s pendulum has swung in a dangerous direction for more and more of the young people who will be tomorrow’s employees. Does it have to be this way? No. But the remedies will take some resolve and require some serious change. An example of what change can look like is Tucson’s San Miguel High School, at 6601 S. San Fernando Road. The San Miguel student body comes from low-income neighborhoods. San Miguel students and parents are both invested in the students’ education. San Miguel students go to school in an environment that is all about getting a good education. College placement is virtually much 100 percent. Social skills are taught and are the cultural norm. Respect for self and others is impressive. The social maturity and a sense of discipline jump out at you. The results speak for themselves. If San Miguel can do it, so can other schools. My recommendations:

• Improve parental involvement and where possible, hold parents responsible for the conduct of their children. Make parental attendance at certain school meetings mandatory. • Increase the level of discipline and respect for teachers and administrators. • Drug test. Yup. If kids have a drug problem in K-12, they’ll undoubtedly have a drug problem when they graduate and apply for a job. (See examples in second and third paragraph above.) Make the penalties for drug use progressive, right up to expulsion. Drugged students are a drag on teachers and their classmates and belong in rehab, not chemistry class. Absent from this column to this point is the subject of school funding. That is a discussion for another time. The bottom line is that the issue of improving education goes beyond funding. Funding won’t fix any of the issues that I have described above.

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

26 SEPTEMBER 14, 2012

INSIDE TUCSON BUSINESS

OPINION GUEST OPINION

Small, vocal Tucson Forward misrepresents Tucson on F-35 Whether the F-35 comes to Tucson remains to be seen but make no mistake, Washington, D.C., the Air Force and the Department of Defense are watching. Right now, they see a community that does not support the Air Force’s mission. Thanks to Tucson Forward, a small but vocal group, Washington’s decision-makers believe Tucson no longer values the missions of the 162nd Fighter Wing of the Air National Guard and Davis-Monthan Air Force Base. Tucson Forward and their allies will tell you it is simply about noise and flight patterns. Don’t believe it. They want these bases gone. Luke Air Force Base near Glendale was recently selected as an F-35 training base. In Maricopa County, they had rallies where mayors, county supervisors, city council members and businesses showed up voicing full-throated support. At public hearings, elected officials spoke in support. The selection of Luke AFB was a foregone conclusion yet the Air Force held public Environmental Impact Statement comment meetings related to all communities under review for this mission, including Tucson. Not one elected official from the City of Tucson showed up to express support. Tucson Forward will tell you the F-35 is unacceptable. What should be unacceptable is the very real possibility of downsiz-

HANK PECK

ing and loss of our valued community partners: the 162nd Fighter Wing and DavisMonthan AFB. Given our national deficit and economic realities, you can be sure there will be future base closings and

consolidations. If Tucson lost the 162nd and D-M, the impact to our economy would be staggering. Tucson Regional Economic Opportunities has done the numbers and is glad to share them. Think about Raytheon Missile Systems’ connections to D-M and their assessments of Tucson when they are offered good opportunities in other communities. Think of the message we continue to send: “No thanks, we don’t want you.” Is this really what Tucson has become? A larger question is whether Tucson supports the mission of the Air Force in defense of our country? Is the noise of an airplane too much sacrifice for our civilian population? I grew up in Tucson under the flight path and ran outside to see those planes the minute I heard them. Those pilots were my heroes and they still are.

Our bases are important to Tucson for economic and cultural reasons. They are vital to our country because of the access to the Goldwater Range, weather, and flying and maintenance conditions that replicate actual fighting conditions encountered by Air Force pilots and airmen. If one pilot’s life was saved, was it worth the noise? The word is that neighborhood associations do not support the F-35. I wonder if there are military veterans living in those neighborhoods? Or business owners, or people who work at any business dependent on our local economy? Or parents with children who worry about how fewer jobs and lower property values will affect their schools? Many of our most involved citizens are here because the Air Force brought them — or their parents or their grandparents — here. How do we count the value these people have added to our community? If you think losing the 162nd Fighter Wing and Davis-Monthan is an alarmist scenario, think again. Tucson Forward is engaged in an active campaign writing letters and sending emails to Air Force and Department of Defense leaders in opposition to Operation Snowbird. This is a training mission for Air National Guard units and our international allies in our

fight against terrorism. Tucson Forward is fighting a study by the Air Force on the impact of Operation Snowbird. This traffic represented only 4.77 percent of the total traffic at Davis-Monthan over the past 10 years and 2.3 percent of traffic in 2011. Despite the facts of minimal impact, Tucson Forward sees an opportunity to sow more “bad-will” to promote their cause. What can we do? With support from U.S. Rep. Ron Barber’s office, community and business leaders are organizing to speak strongly in a unified voice for support of the Air Force’s mission in Southern Arizona. We need the support and active help of employers, employees, veterans and elected officials. Visit www.tucsonf35.com and sign up. Write letters to the editor, call and email your mayor and council member, write to members of Congress. The opposition voices in Tucson are doing all this and more. And when you hear the planes and see military personnel, give thanks that they risk their lives so that we may freely debate these issues.

Hank Peck is a native Tucsonan and chair of the Public Policy Committee of DM-50, a group of community and business leaders who support the mission of DavisMonthan Air Force Base.

InsideTucsonBusiness.com

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