WHERE CO-WORKERS GO TO CONGREGATE Spoke6 is hot hub for space-sharing young independents PAGE 15
Your Weekly Business Journal for the Tucson Metro Area WWW.INSIDETUCSONBUSINESS.COM • NOVEMBER 23, 2012 • VOL. 22, NO. 25 • $1
In the pipeline Gas company and Mexican partners push ahead despite lack of approvals Page 11
Put a lock on metal theft Tougher laws, penalties under consideration Page 17
Rebuilding Retail New retailers may signal start of slow comeback PAGE 3
??????????
Housing permits are so yesterday
Patrick McNamara
Totals on pace to Blast past 2010 Page 19
FC Tucson to host international soccer match here By Patrick McNamara Inside Tucson Business Building on the success of this year’s Major League Soccer (MLS) preseason games at Kino Sports Complex, FC Tucson has announced that an international soccer match has been schedule for Tucson. The national soccer teams of Denmark and Canada have agreed to play a friendly match at Kino Stadium Jan. 26. “This is an historic day for sports in Arizona,” said Chris Keeney, managing partner and chief business officer with FC Tucson. The game marks the first time an international soccer match between national teams would be played in
Tucson, according to FC Tucson officials. Following the international match, FC Tucson has planned several friendly games between MLS teams, beginning Jan. 29 and running through Feb. 8. After that, four MLS teams plan to hold their spring training at Kino Sports Complex. The teams, including New England Revolution, Seattle Sounders, New York Red Bulls and Real Salt Lake, will play games as part of the FC Tucson Desert Diamond Cup, Feb. 13-23. More than 30,000 spectators attended MLS spring training games in Tucson last February. A major draw for those games was the presence of international sports superstar Da-
vid Beckham, who spent many years as a player with the English Premier League team Manchester United before going to play with the Los Angeles Galaxy. Visit Tucson boss Brent DeRaad said the announcement was good news for the regional tourism industry, which has been slow to recover from the economic collapse. Tourism, DeRaad said, accounts for more than $2 billion of the regional economy. Visit Tucson was formerly the Metropolitan Tucson Convention and Visitors Bureau. FC Tucson and Visit Tucson officials hope the game would attract additional international visitors. “Canada is Tucson’s second largest international market,” DeRaad said.
Mexico is Tucson’s largest partner. More than 700,000 Canadians visited Arizona in 2011, according to statistics from the Arizona Office of Tourism. Canadians also make up an increasing portion of international visitation to the metro-Tucson area. Pima County Supervisor Richard Elías said the soccer events also provide an opportunity for in-state tourism. “Those people from north of the Gila River are going to be coming down her to spend their money, and that’s what they should do,” Elías joked.
Contact reporter Patrick McNamara at pmcnamara@azbiz or (520) 295-4259.
2 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
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NOVEMBER 23, 2012
3
NEWS
New retailers could be good sign for region’s slow economic recovery
Tally finally gives Barber Congressional seat victory
Patrick Mcnamara
As Pima and Cochise county officials finished counting early and provisional ballots, what had earlier been a narrow margin and evaporated and disappeared for Republican Martha McSally who on Nov. 17 conceded the election to Democrat Ron Barber. “It was a hard fought campaign and I’m proud of the race we ran with integrity, honor, authenticity, and grace,” McSally said in her statement. “While ultimately we didn’t get the results we hoped for, I’m amazed at the historic nature of what we did with the odds stacked so high against us. Across this district, people of all political stripes who voted for President Obama and Richard Carmona also voted for me. As the single highest Republican vote getter in the district, over 141,000 people believed in our message of putting leadership and independent thinking ahead of party politics.” The outcome sends Barber back to Congress. He has been serving since this summer when he won a special election to replace Gabrielle Giffords who stepped down to continue her recuperation from being shot Jan. 8, 2011. One of McSally’s supporters had filed a legal challenge to about 130 dispute ballots in Cochise County. An agreement allowed for those ballots to be counted but the tabulation kept separate from others. As it turned out those ballots wouldn’t have made a difference. As of earlier this week, Barber had gained a nearly 2,400-vote advantage over McSally, getting 50.3 percent of the vote to McSally’s 49.5 percent.
Hobby Lobby and Stein Mart are among the many retailers entering the Tucson market for the first time or expanding their presences here. The two are opening at the intersection of Broadway and Craycroft Road where a Mervyn’s store sat empty for five years.
By Patrick McNamara Inside Tucson Business A wave of new retailers coming into the Tucson region could indicate good news for the larger economy. “I think it’s a good sign that retailers are beginning to look at Tucson in a good light,” said Marshall Vest, director of the Economic and Business Research Center at the University of
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Arizona’s Eller College of Management. Retailers that have made a push into the Tucson market include new arrivals Hobby Lobby, Curacao and Conn’s. Existing retailers expanding with additional stores include Stein Mart and Mattress Firm. “Now that the recession is over, we’re getting back on our expansion plan and we’re heading west,” said Mike Poppe, CEO of Conn’s, which is based in Beaumont, Texas.
The electronics and furniture retailer is remodeling a store at the southeast corner of Broadway and Craycroft Road that had been vacant since Circuit City liquidated and closed in early 2009. Poppe said the demographics of the Tucson region played a part in the company’s plan to enter the market.
RETAILERS PAGE 7
PUBLISHER THOMAS P. LEE tlee@azbiz.com
STAFF WRITER PATRICK MCNAMARA pmcnamara@azbiz.com
RESEARCHER JEANNE BENNETT list@azbiz.com
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EDITOR DAVID HATFIELD dhatfield@azbiz.com
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ART DIRECTOR ANDREW ARTHUR aarthur@azbiz.com
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Inside Tucson Business (ISSN: 1069-5184) is published weekly, 53 times a year, every Monday, for $1 per copy, $50 one year, $85 two years in Pima County; $6 per copy, $52.50 one year, $87.50 two years outside Pima County, by Territorial Newspapers, located at 3280 E. Hemisphere Loop, Suite 180, Tucson, Arizona 85706-5027. (Mailing address: P.O. Box 27087, Tucson, Arizona 85726-7087, telephone: (520) 294-1200.) ©2009 Territorial Newspapers Reproduction or use, without written permission of publisher or editor, for editorial or graphic content prohibited. POSTMASTER: Send address changes to: Inside Tucson Business, P.O. Box 27087, Tucson, AZ 85726-7087.
Brewer puts off decision on state health exchange Gov. Jan Brewer postponed her decision on whether Arizona will create a state-run health insurance exchange as part of the Affordable Care Act. Brewer, who had put off making the decision until the mandated deadline, got a month’s reprieve when the federal government extended the deadline. Business organizations, hospitals and insurance companies have encouraged Brewer to allow for a state-run exchange but conservative Republicans have opposed the idea. The exchange would be subject to Legislature approval and among those who have opposed the health care reform law known as Obamacare, are state Sen. Andy Biggs, R-Gilbert, who will become Senate President next year.
EDITION INDEX Public Notices Lists Meals and Entertainment Arts and Culture Profile Calendar
6 8, 9 14 14 15 16
Finance Real Estate & Construction Biz Buzz Editorial Classifieds
18 19 20 20 23
4 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
NEWS City voters approve $100M in road bonds Tucson city officials claimed victory this week as voters by a slim margin — fewer than 1,000 votes out of 143,700 — approved Proposition 409, a plan to spend $100 million over five years to repair 130 miles of major roads and 114 miles of neighborhood streets. “I’m hoping this is the first step toward rebuilding our city,” Tucson Mayor Jonathan Rothschild said. “I don’t think the City of Tucson has invested in itself in nearly 15 years.” The mayor thanked residents saying he wants the city to gain the trust of people. He pledged that he and City Manager Richard Miranda would make sure the money from the bond package is spent as promised. To that end, the city has established a Citizen Bond Oversight Commission. Each the member of City Council will make an appointment to the commission and the city manager will make four selections for a total of 11 members. City residents are invited to apply by Dec. 31 for the commission by sending résumés to the Tucson City Clerk’s office at cityclerk@tucsonaz.gov or 255 W. Alameda St., 85701.
Latest airfare survey finds Phoenix savings amounts to just $16 .
TOP DESTINATIONS FROM TUCSON Average daily pa passengers each way 2012
Survey
2011
2011
2012 lowest fare
non-stop
lowest fare
non-stop
1
Los Angeles (LAX)
327
319
$150
$150
$139
$139
2
Denver (DEN)
276
292
$228
$228
$139
$139
3
Las Vegas (LAS)
247
248
$150
$150
$139
$139
4
Chicago (ORD, MDW)
226
225
$220
$341
$260
$260
5
Washington (DCA, IAD, BWI) *
153
153
$259
n/a
$378
n/a
6
San Diego (SAN)
191
197
$192
$192
$139
$139
7
Seattle (SEA)
172
174
$202
$260
$299
$299
8
New York (LGA, EWR, JFK)
149
130
$271
n/a
$247
n/a
9
Dallas (DFW, DAL)
138
140
$218
$218
$304
$323
Marijuana dispensaries getting final state OKs
10
San Francisco (SFO)
108
97
$246
$265
$252
$415
11
Minneapolis (MSP)
95
92
$252
$388
$303
$345
The Arizona Department of Health Services are performing the final inspections on medical marijuana dispensaries that could mean as many as a dozen will be open by the end of December, according to Will Humble, director of the department. A dispensary at 112 S. Kolb Road was due for final inspection on Tuesday (Nov. 20). On Nov. 15, the Department of Health Services approved the first dispensary in the state in Glendale. Under the terms of the law passed by voters in November 2010, holders of state-issued medical marijuana cards have been allowed to grow their own so long as there are no dispensaries within 25 miles of their address. That changes with the opening of dispensaries. The state has issued 33,600 medical marijuana user cards.
28
Orange County, Calif. (SNA)
37
43
$247
n/a
$139
n/a
Tucson unemployment goes to 7.1% in Oct. Job creation, which had been showing signs of improving, sputtered in October and as a result, the unemployment rate for the Tucson region moved up to 7.1 percent from 7.0 percent in September, according to the Arizona Department of Administration. The data show 424,300 Tucsonans were employed in October, down from 424,700 in September. The unemployed number rose to 32,300 in October from 32,100 in September. A year ago in October 2011, 428,600 Tucsonans were employed and 37,800 were without jobs for an unemployment rate of 8.1 percent. Statewide Arizona’s unemployment rate in October ticked down to 8.1 percent from 8.2 percent in September. In October 2011, it was 9.2 percent.
P OPTION ONE
OPTION TWO
Car- Mileage 13 miles (6.5 ea. way) @ .51per mile
Average of top 12 destinations
$228
+
$6.63
Average of top 12 destinations
Shuttle (Arizona Stagecoach RT)
$228
$31
By David Hatfield Inside Tucson Business Yes, it is possible to get cheaper airfares flying out of Phoenix Sky Harbor versus Tucson International Airport. You’ll save all of $16 on a round-trip ticket, according to the sixth annual airfare comparison by Inside Tucson Business to the top 12 destinations the two airports have in common. In this year’s comparison — and four of the five previous years — the average available airfare from Tucson was higher but not high enough to outweigh the added costs — not to mention time — spent in traveling to and from Phoenix to catch a flight. The average available round-trip airfare this year was $220 from Tucson and $204 from Sky Harbor, a difference of 7.8 percent. The difference over the years has ranged from as little as $4, a 1.6 percent difference, in 2008 up to $32, a 13.8 percent difference, in 2009. Last year, in a surprise, the Tucson fare actually averaged lower, by $1, than the fare from Sky Harbor.
+
Parking 3 days, economy lot
+
$12.00
TOTAL
=
$246.63 TOTAL
+
When Inside Tucson Business initially set out to conduct its first airfare comparison in November 2007, there was a prevailing sentiment among Tucsonans that fares were significantly higher here than from Phoenix and that that’s why as many as 1 million Tucsonans per year were traveling to Sky Harbor for their flights. That figure has dropped in recent years, according to the Tucson Airport Authority. The survey is conducted essentially the same way each year. U.S. Department of Transportation data is used to determine the top 10 destinations by the average number of passengers traveling each way per day. The data is from the second quarter of the year, which are the latest available in November. There is one difference this year. Baltimore’s airport was included, along with Reagan National and Dulles International, with the destinations for Washington, D.C. As a result, Washington as a destination moved up in the Phoenix rankings to No. 9 from No. 27 last year. The combination is in keeping with the
=
$259
way the Department of Transportation tracks passengers to regions. Among other regions, New York includes La Guardia, Kennedy and Newark airports; Chicago is made up of both O’Hare and Midway; Dallas is both Dallas-Fort Worth and Love Field; and Houston is both Bush Intercontinental and Hobby. Baltimore’s change resulted in dropping John Wayne Airport in Orange County, Calif., out of the top 10 to No. 11 from Phoenix but for the sake of a direct comparison to last year’s numbers it was left in for both cities. There are only two other cases where an airport makes the top 10 from one Arizona airport but not the other. San Francisco is No. 10 from Tucson but No. 12 from Phoenix and Minneapolis is No. 6 from Phoenix but No. 11 from Tucson. In the end, the airfare survey compared the same 12 destinations this year
CONT. ON NEXT PAGE
InsideTucsonBusiness.com
NOVEMBER 23, 2012
5
NEWS This Week’s TOP DESTINATIONS FROM PHOENIX Average daily passengers each way 2012
Good News
Survey
2011
Sounds of the season 2011
2012 lowest fare
non-stop
lowest fare
non-stop
As if you needed anything else to get you into the spirit, tune in your radio today to 94.9FM, Mix-FM KMXZ, and most likely you’ll be hearing holiday music. Are we clairvoyant? Nah. If the station doesn’t start playing holiday music, it would be the first time in 20 years. And that would be the news.
1
Denver (DEN)
1,388
1,393
$112
$112
$139
$139
2
Chicago (ORD, MDW)
1,358
1,357
$269
$276
$316
$345
3
New York (EWR, JFK, LGA)
1,323
1,237
$274
$274
$292
$294
4
Seattle (SEA)
1,051
1,020
$245
$245
$239
$239
5
Las Vegas (LAS)
947
913
$112
$112
$119
$119
The Tucson
6
Los Angeles (LAX)
881
820
$140
$140
$139
$139
7
Minneapolis (MSP)
880
907
$242
$288
$338
$353
INSIDER
8
San Diego (SAN)
807
800
$150
$150
$119
$119
9
Washington (DCA, IAD, BWI)*
785
340
$263
$364
$369
$471
10
Dallas (DFW, DAL)
725
723
$252
$252
$338
$368
11
Orange County, Calif. (SNA)
679
685
$140
$140
$139
$139
12
San Francisco (SFO)
648
631
$244
$274
$199
$199
P OPTION ONE
OPTION TWO
Car- Mileage 118 miles ea. way @ .51 per mile
Average of top 12 destinations
$229 Average of top 12 destinations
$229
as it did a year ago. Unlike the government’s data, the Inside Tucson Business survey does not combine airports for California’s two major urban areas, the Los Angeles basin or the San Francisco Bay Area. Early on we heard from employers that they make a distinction when traveling to those areas compared to the major metropolitan areas that are farther away. One large computer company told us it does not consider Oakland an acceptable alternative to San Jose when making a short trip to California. Another company in the automobile and financial business told us they’re southern California offices were in Orange County and it insisted on using either John Wayne or Long Beach airports and would consider Los Angeles International only rarely. To play out the airfare comparison, Inside Tucson Business also calculates the costs of driving and parking or taking a shuttle to both airport. Only one of those calculations changed this year, the shuttle ride to and from Tucson International was lower priced. The costs are calculated from the geographic center of Tucson’s population, which as of the 2010 Census is near the in-
+
$120.36
Parking 3 days, economy lot
+
$27.00
TOTAL
=
Shuttle (Arizona Stagecoach RT, from/to Park Ave. & Aviation Hwy)
+
$78
$376.36 TOTAL
+
tersection of South Park Avenue and Aviation Highway, according to demographers at the Pima Association of Governments. Previously the center had been at East First Street and Cherry Avenue near the University of Arizona campus. Using the government allowance of 51 cents per mile, the drive to Sky Harbor plus three days of parking totals $147.36 compared with $18.63 to do the same to Tucson International. Neither airport has changed its normal parking fees over the past year, however, Sky Harbor has begun to offer discount coupons on its website. Obviously there are cost efficiencies when multiple people make the trip to either airport in one care. An alternative to driving is to take a shuttle. According to its website, Arizona Shuttle is $78 round-trip to Sky Harbor, with a $19.50 discount for the second and third passengers. Arizona Stagecoach’s fare to and from Tucson’s airport dropped this year to $31 from $42 last year. It also offers discounts for multiple passengers on the same itinerary. Inside Tucson Business conducted the airfare survey this year the same as it has been done all but the first year. Using Google’s ITA Matrix software search engine — http://matrix.itasoftware.com — the survey asked for
=
$307
lowest available airfare for a three-day trip at any time over the course of a month starting Dec. 15, which was one month out from the date of this year’s survey. Although ITA does not sell tickets, we clicked through to the airline websites to make sure the fares were available. Southwest Airlines airfares were checked separately on its website since it does not permit ITA to show its fares. Any result that showed a required connecting flight layover of more than three hours was not considered. All of the lowest airfares found this year were available on flights after the holidays — Jan. 8 and 9 seemed to be especially popular days to start a low-fare trip. That hasn’t always been the case. In previous years the survey had found some low fares were available just ahead of the December holiday period but that wasn’t the case this year. Among the findings in this year’s airfare survey: • Adding Baltimore’s airport significantly dropped the average price on available airfares to Washington, D.C. A year ago without Baltimore, the lowest
CONT. ON NEXT PAGE
Insights and trends on developing and ongoing Tucson regional business news.
Trivia victory for GOP A trivia point maybe but considering the drubbing Republicans took in this month’s election, it’s worth noting that when they take office in January, there won’t be a single Democrat holding a statewide elected office for the first time in Arizona’s 100-year history. Since 1912, the state has elected at least one Democrat to either U.S. senator, governor, secretary of state, attorney general, superintendent of public instruction, mining inspector or corporation commission. But with this month’s election of Jeff Flake as U.S. senator and the clean sweep of three Republicans to the Arizona Corporation Commission, come January no candidate in office can lay claim to a statewide victory. Obviously that’s not the case when it comes to Congress where Democrats won five of the state’s nine seats.
Less Tucson focus? Republicans may have lost their super majority in the Legislature but the Tucson region can’t claim much of a victory when it comes to its elected lawmakers gaining too many leadership positions. If anything, the new leadereship is even more heavily from the Phoenix area. Sen. Andy Biggs, R-Gilbert, has unseated Sen. Steve Pierce, R-Prescott, to be the new Senate president. Rounding out the leadership positions are John McComish and Adam Driggs, both from Phoenix, as Senate majority leader and whip, respectively. All are considered staunchly conservative Republicans who first won their seats in the 2010 elections. Over in the House the move to the right wasn’t so prounounced. Rep. Andy Tobin, RPaulden, fought off an attempt by conservative Republicans to be unseated and remain as Speaker of the House. Rep. David Gowan, R-Sierra Vista, was elected majority leader and Rick Gray, R-Sun City, was elected whip. As might be expected, Tucson is better represented in the Democrats’ minority caucus. Sen. Linda Lopez, D-Tucson, was elected assistant leader in the Senate and Rep. Bruce Wheeler, D-Tucson, was elected minority whip in the House.
6 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
PUBLIC NOTICES Selected public records of Southern Arizona bankruptcies and liens.
BANKRUPTCIES
TUCSON INTERNATIONAL AIRPORT 2012 PASSENGER STATISTICS Airline passenger traffic through Tucson International Airport in October was down 4.1% to 303,700 from 316,775 in October 2011. Available seat capacity in October was down 10.7 from a year ago to an average of 5,635 per day. Through 10 months of 2012, passenger totals are down 0.7%. This chart shows each airlines’ passenger totals and market share so far for 2012 compared to the first 10 months of 2011.
Chapter 11 - Business reorganization James R. Klay and Holly A. Klay, 8897 S. Anvil Ranch Place, Vail. Principal: James R. Klay and Holly A. Klay, joint debtors. Estimated assets: $50,000 or less. Estimated liabilities: More than $50,000 to $100,000. Largest creditor(s): Schedule not filed. Case No. 12-24708 filed Nov. 14. Law firm: Eric Slocum Sparks
Airline
Jan.-Oct. 2012 Jan.-Oct. 2011 Change Passengers Market Passengers Market Passengers % Share
Nonstop destinations
Southwest
1,046,167
34.7%
Tucson, Phoenix airfares below national average
Share
1,019,660 33.6%
+26,507
+2.6%
696,114 22.9%
+10,838
+1.6%
412,320 13.6%
+22,739
+5.5%
Albuquerque, Chicago Midway, Denver, Las Vegas, Los Angeles, San Diego
FORECLOSURE NOTICES No filings for businesses
LIENS Federal tax liens Nordbrock Family Limited Partnership and Evelyn R. Nordbrock, 6642 E. Calle De San Alberto. Amount owed: $2,369.97. Nordbrock Family Limited Partnership and Niel T. Nordbrock and Evelyn R. Nordbrock, 6642 E. Calle De San Albertro. Amount owed: $8,242.92. Shane’s Trucking LLC (re-filing), PO Box 22110, 85734 (8665 S. Alvernon Way). Amount owed: $23,369.91. Blue Skies Heating and Cooling LLC, 16580 W. Little Alex Lane, Marana. Amount owed: $14,423.24. Amaryllis Contractors Inc., PO Box 335, Rillito 85654. Amount owed: $8,400.09. Cimaco Floor Service Inc., 3812 E. 38th St. Amount owed: $8,661.81. Perma-Glaze Inc., 1671 S. Research Loop. Amount owed: $8,519.84. CattleTown Steak House and John R. Kocis, 3141 E. Drexel Road. Amount owed: $13,989.25. K&B Asphalt Co., PO Box 17538, 85731. Amount owed: $688,549.38. Hector J.F. Barillias Phd PC LLC, 2102 N. Country Club Road, Suite 4. Amount owed: $19,317.29.
State liens (Liens of $1,000 or more filed by the Arizona Department of Revenue or Arizona Department of Economic Security.) Tucson Hotel Partners LLC, 1300 N. Stone Ave. Amount owed: $47,047.78. Red Room Grill Inc., 100 E. Congress St. Amount owed: $12,870.92.
Mechanics liens (Security interest liens of $1,000 or more filed by those who have supplied labor or materials for property improvements.)
Ace Asphalt of Arizona Inc., 4030 E. Michigan St., against Lazy Creek II Homeowners Association, c/o of Copper Rose Community Management, 6601 E. 22nd St. Property: 3319 N. Glen Creek Drive. Amount owed: $9,500.58. Ventura-Pacific Development Inc., 10371 N. Oracle Road, Oro Valley, against Pennington Street Partners LLC, 6700 N. Oracle Road, Suite 233. Property: 101 E. Pennington St. Amount owed: $123,368.00.
Release of federal liens Luxor Cafe LLC and Fayez M. Sailem, 3699 N. Campbell Ave. Loren Yunk CPA PC, 2016 E. Broadway Enhelder Ent Inc., 2862 W. Alaska St. Ventana Timber Resources LP, 33 N. Stone Ave. Tohono Appliance and George Ackerman, PO Box 863, Sells 85634 AAA Security Products Inc., 4101 S. Sixth Ave. 3 Cristina’s Cleaning Service and Celia Cristina Fontes, 1946 W. Waverly St.
American
706,952
United (Continental)
435,059
US Airways
345,450
11.4%
359,983 11.9%
-14,533
-4.0%
332,291
11.0%
331,823 10.9%
+468
+0.1%
Phoenix
Delta
Atlanta, Minneapolis-St. Paul, Salt Lake City
Alaska
97,802
3.2%
88,725
2.9%
+9,077
+10.2%
53,796
1.8%
130,383
4.3%
-76,587
-58.7%
-21,491
-0.7%
Seattle
Frontier
Discontinued service as of May 18
Total
3,017,517
3,039,008
Source: Tucson Airport Authority Airline totals include passengers on branded flights operated by contracted carriers: American (includes American Eagle), Delta Connection (SkyWest), United Express (ExpressJet and SkyWest) and US Airways Express (Mesa and SkyWest).
CONT. FROM PAGE 5 round-trip fare from Tucson was $378, this year it was $259, or 30 percent less. Interestingly, though, the lowest round-trip fare to Reagan National this year from Tucson was not much more, $265. There was a similar drop in airfare from Sky Harbor that this year was $263, a 29 percent drop from $364 a year ago. • As happened last year, flying non-stop on longer distance flights is often more expensive than making connections along the way. To Chicago from Tucson, for instance, the cheapest non-stop flights cost $341 round-trip but the survey found connecting flights priced as low as $220. From Phoenix a non-stop flight to the Washington area was $101, or 38 percent more expensive than a connecting flight. • There were four instances where the lowest available airfare was from Tucson,
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Western International Aviation Inc., 5951 S. Wilmot Road Ace Appliance Repair Service and William C. White, 3360 E. 25th St. Angulo’s Affordable Roofing LLC and Angulo Socorro, 2787 W. Calle Arandas Acme Door Company, PO Box 27337, 85726
Southwest Polygraph Service Inc. and Valley National Bank, 615 N. Swan Road
14.4%
Denver, Houston Intercontinental, Los Angeles, San Francisco
Rumsey Architecture and Brian F. Rumsey, 3541 S. Calexico Ave.
Independent Nursing Service and Rebecca M. Rendon, 2641 W. Calle Paraiso
23.4%
Chicago O’Hare, Dallas-Fort Worth, Los Angeles
IGN S O T E FRE
UP: G
not Phoenix. The $220 fare from Tucson to Chicago was less than the $269 lowest fare from Phoenix to Chicago. Both require connections. (That wasn’t the case for non-stop flights where Sky Harbor’s lowest round-trip fare was $276 versus $341 from Tucson.) The other three destinations that had lower fare from Tucson were to New York, $271 versus $274 from Phoenix (though Sky Harbor had non-stop flights to Newark and Kennedy at that price), Dallas at $218 from Tucson versus $252 from Phoenix and Seattle at $202 from Tucson versus $245 (the Tucson flight required connections, the Phoenix flight did not). Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237. Inside Business Travel appears the fourth week of each month.
Inside Tucson Business Regardless of whether a passenger chooses to fly out of Tucson International or Phoenix Sky Harbor airport, the fare paid is below the national average, according to U.S. Department of Transportation data. The average domestic fare paid in the second quarter of this year from Tucson was $382, ranking it the No. 45 lowest among the nation’s top 100 airports. From Phoenix, the lowest fare paid was $342, ranking it No. 20. The national average was $385. According to the data compiled by the Bureau of Transportation Statistics, Tucson’s airfares were up 5.4 percent from the previous year and Sky Habor’s fares were up 4.7 percent. The national average domestic airfare was up 4.1 percent. The top five airportss with the highest average airfares were Cincinnati at $535, Houston’s Bush Intercontinental at $518, Memphis at $512 and Huntsville, Ala. and Washington Dulles, both at $504. The five airports with the lowest average airfares paid were Atlantic City, N.J., at $166; Long Beach, Calif., at $244; Bellingham, Wash., at $263; Ft. Lauderdale, Fla., at $276; and Las Vegas at $281.
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retail pads facing Broadway. Another retailer making its presence known in the region is Mattress Firm. The Houston-based bedding outlet has opened five Tucson stores in the past year. In addition to the newcomers, retailers already established in the region have begun to expand their footprints here. Walmart, for instance, recently opened a Supercenter at Park Avenue and 36th Street in The Bridges development and has begun site work at a long-anticipated store in El Con Mall, 3601 E. Broadway. The company is building another Supercenter at Houghton and Golf Links roads. In addition to the Supercenters, Walmart Neighborhood Market is planning to add five Tucson locations to the five it already has in the market. Good prices on real estate and the potential for cheap rents help to make the Tucson market a good location, the UA’s Vest said. “They’ve all no doubt noticed that there are some good deals (on commercial space) in this market,� he said. While the visible signs of an influx of retail shows some positive indications for the economy overall, Vest and his fellow forecast-
The company seeks out markets in racially diverse areas where many people earn from $40,000 to $50,000 annually, Poppe said. That makes Tucson a prime location for Conn’s to expand. Conn’s recently opened stores in Albuquerque, N.M., and in Oklahoma, branching out from its Southern strongholds in Texas and Louisiana. Poppe and Conn’s president of retail David Trahan said the company also does much of its business through financing, which likely would be true at its Tucson location as well. They plan to have the Conn’s store opened by Dec. 1. The company also intends to have a second store in Tucson as well as multiple stores in the Phoenix area. Also at the Broadway and Craycroft intersection, redevelopment work at another long-shuttered store continues. Remodeling of the former Mervyn’s store has already resulted in the opening of Tucson’s second Stein Mart store, which opened Nov. 16. The remaining portion of the building will become a Hobby Lobby, a home crafts store new to the Tucson market. The redevelopment at the site also includes new space for
ers at “Arizona’s Economy,� a quarterly report on the state’s economy, note the recovery still hasn’t reached its full potential here. “The Arizona economy continues to expand at a painfully slow pace,� Vest wrote in the September installment of the publication. The report noted, however, that overall retail sales were expected to continue to grow at about 5 to 5.5 percent. The projections for the Tucson area also show continued growth in retail sales — despite recent projections from the state indicating the region would gain just 5,800 jobs by the end of 2013, compared to 93,000 in the Phoenix area — with 2012 ending at $11.9 billion and 2013 at $12.3 billion. That said, sales tax receipts in Tucson have grown since making a sharp drop in fiscal 2009. Receipts in fiscal 2008 reached a highpoint of $196 million, according to city budget documents. Sales tax receipts fell annually in the following fiscal years, when they reached a low-point in 2010 of $166 million. Sales appear to have picked up in the fiscal 2012, with sales tax revenue reaching $176.7 million. Nationwide, the retail sector continued to
grow slowly as well. The U.S. Department of Commerce reported this month that retail trade sales were up a modest 3.8 percent from last year at this time. More detailed data is scheduled for release next month, which forecasters say will show a slight decrease in retail sales for October, attributed mostly to the hurricane that damaged much of the Northeast. Despite continued challenges in the local economy, Vest said there were some positive signs. The growth in grocery stores, for instance, often precedes office and industrial expansions, he said. But while Vest and colleagues continue to read the numbers in preparation for the December installment of “Arizona’s Economy,� the new retailers area a welcome sign if for nothing else than the improvements they have made to many aging shopping centers. “I think it’s really positive that you’re seeing renovations to these existing spaces,� he said. Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259.
SteinMart opens at Broadway-Craycroft
Benenson Capital photo
Inside Tucson Business
Benenson Capital executives Richard Kessler, right, and Leonard Kreppel at the company’s renovated 7.4-acre retail center.
Characterized as the “No. 1 corner in Tucson,� the first phase in the transformation of a large, long-vacant retail center at 5555 E. Broadway has been completed. Stein Mart, the first of at least six retailers has opened for business at the site owned by Benenson Capital Partners, New York. “Our long-term investment at the center reflects the Benenson family’s confidence in this property as well as our partnership with the City of Tucson,� said Richard Kessler, chief operating officer of Benenson. “We have had an enormously successful lease-up at the property. It’s worth noting that these deals all took hold during the heart of the economic downturn, a virtually unparalleled feat and one that speaks to the strength of our company and our partners.� Kessler led the partnership’s Nov. 16 grand opening ceremonies at the site. Next year a Hobby Lobby store is due to open in the remaining portion of the renovated 81,000 square-foot former Mervyn’s store In a new separate building, tenants that have signed to open stores are Mattress Firm, the Vitamin Shoppe and Broadway Smiles.
7
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10 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
GOOD BUSINESS WOMEN IN BUSINESS
Differences to know for financial security We all know men and women are different in how we approach many areas, but in our finances? Yes, because women face and shoulder different life circumstances than men. Some differences are our choice, but others, quite frankly arenâ&#x20AC;&#x2122;t fair. So how can we deal with them? First, what are women up against? â&#x20AC;˘ Women historically have lived longer than men and this presents financial challenges. â&#x20AC;˘ Women will need more retirement dollars. â&#x20AC;˘ Without their spouses, women face older years alone with possible long-term care needs. â&#x20AC;˘ Women still face wage gaps, so many women have less in savings, yet they need more dollars for a longer life span. With less in financial reserves, economic events such as taking family leave, health issues or even job loss and divorce can have significant overall financial impact. These financial impacts include:
KIM M. FERNANDEZ
â&#x20AC;˘ Less income and the resultant loss of savings, benefits, retirement benefits and Social Security. â&#x20AC;˘ Difficulties on reentry into the workforce. â&#x20AC;˘ Part-time work, when trying to juggle childcare
or eldercare. â&#x20AC;˘ More women are choosing to live on their own without the benefit of combined resources. â&#x20AC;˘ Women tend to be more conservative in their investments. Now that we know what weâ&#x20AC;&#x2122;re up against, what can women do? â&#x20AC;˘ Learn how to manage money. Either on your own or working in concert with
your partner, manage your cash flow with a budget, manage your debt and set aside savings for a cash reserve. â&#x20AC;˘ Put protections in place for health, income, property and life. â&#x20AC;˘ Plan for goals and learn how to make saving for them a priority. â&#x20AC;˘ Maximize savings for retirement. Understand what opportunities and benefits are available for you. Know what amount you will need for retirement and have a plan for how youâ&#x20AC;&#x2122;ll achieve that goal. Learn what your Social Security benefits mean and educate yourself on Medicare. Along the way, make sure to talk to your financial advisor and learn basic investing concepts, such as stability, growth and income. Ask yourself questions and research the answers to, â&#x20AC;&#x153;What is an asset allocation? What is my risk tolerance? What is my time horizon?â&#x20AC;? â&#x20AC;˘ Itâ&#x20AC;&#x2122;s great to see more women than ever as successful professionals, business
owners, community leaders, and degree seekers, yet with wage gaps, we still need to advocate for ourselves in the workplace and through political channels. â&#x20AC;˘ Seek appropriate tax, legal and financial advice prior to making large financial decisions. Knowing what women are up against and knowing what we can do as a result is only half the battle, the rest of the time is meant to enjoy the results that our differences provide.
Contact Kim M. Fernandez, a financial advisor offering securities and investment advisory services through Waddell & Reed, at (520) 745.3090, ext. 116. Fernandez is a member of the Greater Tucson Chapter of the National Association of Women Business Owners (NAWBO), whose members contribute this monthly column.
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NEWS TO YOU!
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InsideTucsonBusiness.com
NOVEMBER 23, 2012
11
NEWS
Kinder Morgan announces gas contract before pipeline is OK’d By Keith Rosenblum Inside Tucson Business There is no approval for the marriage, but that doesn’t keep pipeline builder Kinder Morgan and Mexico’s national power company from announcing post-union plans for their natural gas project based in Sasabe, Sonora. The Houston-based pipeline builder announced it was entering into a 25-year agreement to transport natural gas to customers through an interconnection in the border town 60 miles southwest of Tucson. An affiliate, Sasabe Pipeline Co., would initially provide 200 million cubic feet per day of capacity from an existing mainline run by the company’s subsidiary, El Paso Natural Gas, the company said. Mexico, meanwhile, joined the drumbeat, announcing it has awarded bids on a complex system of distribution from Sasabe that would change four major power plants from fuel-oil to natural gas and provide residents of northwestern Mexico their first access to the fuel. The government electric company, Comisión Federal de Electricidad (CFE), has now awarded bids for most of nine pipeline segments packaged as three phases. Eventually, the Mexicans say, the project is to involve building 850 miles of pipe line at costs in excess of $1 billion and eventually creating 35,000 jobs. All of this is predicated, however, on approval of the line from the Tucson area to the border town of Sasabe, home on the Arizona side to a handful of ranchers and on the Sonora side to ranchers and smuggling organizations that transport undocumented workers into Arizona. And based on what federal regulators say, approval is far from certain. Tamara Young-Allen, a spokesperson for
the U.S. Federal Energy Regulatory Commission (FERC), said the pipeline project is still in the “pre-filing” stage, which means that any kind of movement is still a year off. FERC recently held public hearings in Tucson and Sasabe on the feasibility of a line. Hearing officers were greeted by a a single supporter and two dozen residents who rejected — most vehemently — the proposal for environmental, safety and financial reasons. Asked about the propriety of announcing long-term plans for yet-unapproved project, Richard Wheatly, spokesman for Kinder Morgan, said the company would not comment. In Mexico City, Estéfano Conde, a spokesman for CFE, did not respond to inquires. In early November, Mexico announced that Gasoducto de Agua Prieta, a company comprised of capital from San Diego-based Sempra Energy Inc., had won the bid on the first phase, consisting of 325 miles, with its offer of $569.4 million. CFE also announced that the Sempra affiliate had won the second phase with a bid of $429.1 million for the second phase of 190 miles. Mosies Gómez Reyna, said Sempra was in the process of setting up alliances with companies through Sonora state. If approved, first on the list of Mexican priorities is conversion of the 632 megawatt power plant at Puerto Libertad, 250 miles from the Arizona border. Next, is creation of a combined-cycle generating plant planned for 2017 in Guaymas. An abundant supply of natural gas in the U.S. now sells at prices that are the equivalent of oil priced around $10 to $15 a barrel. The pipeline, known as the Sasabe Lateral Project, would run from Picture Rocks northwest of Tucson through the Altar Valley to Sasabe. It would provide residents with royalties and increase tax revenues by at least $3.5 million annually as well as cre-
ate several hundred jobs in Arizona and would pose no safety hazards to ranchers or wildlife, Kinder Morgan contends. Of two routes proposed by Kinder Morgan, an eastern would go through Buenos Aires National Wildlife Refuge and a western route would pass through state and private property. The process is now in the “scoping process,” which takes up to a year and up to 18 months, after which an order would be issued and a 30-day appeals process. The scoping process is to determine if the pipeline is “in the public convenience and necessity” and must take into account if there is “potential for significant adverse affects to the human environment.” Community input is but one of many factors regulators will take into account before making a decision. In October, Pima County went on record
saying it preferred construction of the pipeline along the eastern route. In an Oct. 3 letter to U.S. Rep. Raúl Grijalva, D-Ariz., Pima County Administrator Chuck Huckelberry, wrote the route through the Buenos Aires National Wildlife Reserve “is the most justifiable and prudent route.” The county could have rejected both routes. On Nov. 14, Grijalva himself wrote a letter to U.S. Homeland Security Secretary Janet Napolitano asking her to consider the national security implications of the line. Napolitano should “consider alternatives that avoid the Altar Valley,” he wrote. A pipeline “will very likely create a corridor for illegal activity and complicate Customs and Border Patrol attempts to keep this country and its citizens safe.”
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Territorial Newspapers, the publishers of Inside Tucson Business needs your help! Our award-winning business journal is seeking a dynamic sales professional that is committed to driving new business and servicing existing clients. • If you are someone who is self-motivated and high-energy, with a competitive drive to achieve and succeed, we’d like to hear from you. • This position is an outside sales position and requires a valid driver’s license and a good driving record. • Territorial Newspapers offers competitive pay and a comprehensive benefits package including 401k.
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12 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
Balfour Walker
Women of Influence - 2012
This year’s Inside Tucson Business Women of Influence honorees include, front row, from left, Carolyn Compton, Jane Poynter, Kelle Maslyn, Jeanette Mare and Valerie Diaz. Back row, from left: Carmen Bermudez, Cindy Parseghian, Barbi Reuter, Barbara LaWall, Lori Mackstaller, Linda McNulty, Karen Mlawsky, Kathleen “Rocky” LaRose, Jane McCollum, Neelam Sethi, Amber Smith, Raena Janes and Colleen Edwards. Not pictured are Ginny Clements and Jacquelyn Jackson.
InsideTucsonBusiness.com
NOVEMBER 23, 2012
13
BRIEFS GET ON THE LIST
for thousands of businesses and individuals. The 2013 edition will be published in January. To advertise your business, call (520) 294-1200.
Next up: Computer repair and maintenance firms, Computer network development companies
LOGISTICS/DISTRIBUTION
Inside Tucson Business is in the final weeks of gathering data for the 2013 edition of the Book of Lists. Categories to be published in upcoming weekly issues of Inside Tucson Business are: â&#x20AC;˘ Nov. 30: Computer repair and maintenance firms, Computer network development companies â&#x20AC;˘ Dec. 7: Art galleries, Sign companies â&#x20AC;˘ Dec. 14: Private golf course, Public golf courses â&#x20AC;˘ Dec. 21: Oldest business â&#x20AC;˘ Dec. 28: Health and fitness clubs, Book stores If your business is in one of these categories, please update your profile now. If the List for your business has already been published this year in a weekly edition of Inside Tucson Business but there have been changes since then, there is still time to make those changes before the Book of Lists is published Jan. 25. To make any changes to a List, go to www. InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page. New and unlisted businesses can create a profile by following the directions. The Book of Lists is a year-round reference
38 Tucsonans lose jobs in Hostess shutdown If Hostess Brands goes through with its planned liquidation and shutdown, 38 people working at the companyâ&#x20AC;&#x2122;s distribution center at 3045 N. Stone Ave. would be out of work. On Tuesday, the company and officials of its second largest labor union went into mediated talks to try to avert the liquidation. In May, Hostess Brands filed a notice of layoffs with state officials saying the 38 Tucson employeesâ&#x20AC;&#x2122; jobs were among those for layoffs. Statewide, the company said it had 157 workers. Hostess Brands, maker of Twinkies, CupCakes, DingDongs, Ho Hoâ&#x20AC;&#x2122;s, Sno Balls and Wonder Bread, has been operating under a second bankruptcy protection filing it made in January. It blames its issues on an inability to come to terms with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. â&#x20AC;&#x153;We do not have the financial resources to weather an extended nationwide strike,â&#x20AC;? said Gregory F. Rayburn, CEO of Hostess, in a news release. â&#x20AC;&#x153;Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on sell-
THE
RANCH-STYLE
ing its assets to the highest bidders.â&#x20AC;? Despite $2.5 billion in revenue in 2011, Hostess lost $341 million.
RETAIL
Groups promote shopping at local small businesses For a third consecutive year, American Express and small business organizations are promoting Small Business Saturday â&#x20AC;&#x201D; the Saturday after Thanksgiving â&#x20AC;&#x201D; asking consumers to show their support for smaller retailers and their contributions to local economies. â&#x20AC;&#x153;Shopping local is really what makes a community what it is, especially in the way of employment and taxes,â&#x20AC;? said Jeremy Davis, coowner of Tucsonâ&#x20AC;&#x2122;s Summit Hut, in a statement supporting the event. â&#x20AC;&#x153;For every dollar thatâ&#x20AC;&#x2122;s spent at a local store, 68 percent of that goes to the local community through taxes and payroll.â&#x20AC;? Davis, who owns Summit Hut with his wife Dana, are among 80 small businesses in Tucson that will participate in Small Business Saturday. More than 100 million people participated in the event last year. A list of participating retailers is online at www.smallbusinesssaturday.com .
Loop Jean store adds Robert Graham Shop The Loop Jean Company store, 7047 N.
TRANSPORTATION
Gas prices fall another 23 cents in the last week The average Tucson area gas price dropped another nickel a gallon this week going into the Thanksgiving holiday weekend. According to AAA Arizonaâ&#x20AC;&#x2122;s weekly survey, the average price for regular was $3.23 per gallon this week, down from $3.28 per gallon a week ago. The Tucson price is down 23½ cents per gallon over the past month. Tucson continues to have the lowest prices in the state. Linda Gorman, director of communications and public affairs for AAA Arizona, said gas prices in the state are now down to within 18 cents of their lowest prices over the past year.
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The Tucson Marriott University Park hosts your 2012 Holiday Party
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Join other small businesses and organizations to celebrate a successful 2012 and prosperous 2013 2012
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Oracle Road in Casas Adobes Plaza, will open a Robert Graham Shop inside selling the namesakeâ&#x20AC;&#x2122;s high-end sport shirts, jeans, chinos, polos, shorts, swimwear, hats, socks, and leather goods. A grand opening for the new shop within a store is scheduled for noon to 7 p.m. Dec. 1 during which time 10 percent of all Robert Graham purchases will go to Angel Charity for Childen. Also the first 15 purchasers of $100 or more of Robert Graham products will receive an additional gift. The Robert Graham shop is the first in Tucson and the second in Arizona.
Only $350 inclusive of tax and service charge, gets you a table set for 10, amazing buffet, entertainment, dancing and holiday dĂŠcor
Contact Patrick McKenzie at either 520-6292806 or patrick.mckenzie@jqh.com to reserve your table now.
14 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
EXPENSE ACCOUNT
ARTS & ENTERTAINMENT
MEALS & ENTERTAINMENT
ARTS & CULTURE
Explosive growth on tap for downtown restaurants
Humorist David Sedaris at Centennial Hall Tuesday
The restaurant renaissance in downtown Tucson continues to see explosive growth. Here’s a preview of some of the additions the are anticipated over the next several months: • Lulu’s Shake Shoppe, on the south side of the building housing its siblings, The Hub Restaurant and Creamery, 266 E. Congress St., and The Playground Bar and Lounge, 278 E. Congress St. Owner Kade Mislinski opened this walk-up eatery with a menu of shakes, falafel, tater tots and hot dogs, partly catering to late night noshers — it’s open until 3 a.m. after Thursday, Friday and Saturday nights. www.facebook.com/LulusShakeShoppe • JunXion Bar, 63 E. Congress St. It was scheduled to be open this week but you might want to doublecheck that. The plans were to be open daily serving cocktails, 20 beers on tap and featuring live music and parlor games. The plan was to have food but not from its own kitchen. Instead it was looking to do partnerships with nearby restaurants that will run food over. An out-of-the box approach that I, as a former restaurateur, am a bit skeptical about. Still I’d like to see it first-hand. www.downtowntucson.org/locations/the-junxion-bar/ • Saint House, 256 E. Congress St. Nicole Flowers and Travis Reese, proprietors of 47 Scott and the adjacent speakeasy bar Scott & Co., are working on this as their next big adventure. Taking over the space formerly occupied by Sharks Lounge, Saint House will sport a Caribbean theme and feature cuisine from regions where rum is distilled — think Miami, Fla., Barbados and Venezuela. Saint
House should be open by the latter part of January and given the success that Flowers and Reese have had with their first foray into downtown dining, the anticipation will be MICHAEL LURIA high. • Diablo Burger, 312 E. Congress St. A popular place in Flagstaff, the owners have picked downtown for their second location. • Good Oak Bar, 316 E. Congress St. It will be next door to and owned by the same ownership of Diablo Burger. • Proper, 300 E. Congress St. Touts that it will feature a farm-to-table menu for dinner and brunch. • An as yet-to-be-named restaurant, 50 E. Broadway, is in the final stages of constructin by Ron and Patricia Schwabe of Peach Properties. The Schwabes are extensively involved in the downtown real estate scene and had a prior downtown restaurant presence with Tooley’s Café that once was on Congress and is now on South Park Avenue in the Lost Barrio district. The new restaurant will be open for breakfast, lunch and dinner featuring Mexican fare. Look for an early January opening.
Contact Michael Luria at mjluria@ gmail.com.
Author and satirist David Sedaris returns to Tucson at 7:30 p.m. Tuesday (Nov. 27) in Centennial Hall, 1020 E. University Blvd. on the University of Arizona campus. The UApresents event features one of America’s pre-eminent humor writers sharing his unique observations on the human condition and promoting his book due out early next year titled “Let’s Explore Diabetes with Owls.” Buy tickets online at UApresents.org.
Theater Broadway in Tucson is offering up six more performances of “Anything Goes” this weekend at the Tucson Music Hall in the Tucson Convention Center complex, 260 S. Church Ave. The Tony Award-winning musical is one of composer Cole Porter’s most popular offerings, packed with memorable musical numbers including “I Get a Kick Out of You” and “Anything Goes.” The curtain goes up at 2 p.m. and 8 p.m. today (Nov. 23) and Saturday and at 1:30 p.m. and 6:30 p.m. Sunday. Buy tickets online at BroadwayinTucson.com.
Art At the University of Arizona Museum of Art, 1031 Olive road on campus, there is a unique show of German ceramics on display through Jan. 27. Titled “In Relief: German Op-Art Ceramics, 1955–1975,” it’s a first-ever exhibition of mid-century
ceramics style. It was organized by UA associate art professor Laurence Gipe, who has collected the works for years and wanted to explore the history and stories of the art HERB STRATFORD form. The Tucson holiday tradition of “El Nacimiento” is now open at the Tucson Museum of Art, 140 N. Main Ave. The beloved nativity contains more than 800 figurines in an awe-inspiring display that was created and has been maintained for more than 30 years by one family. Free and open to the public, this is a must-see. The museum is open Wednesdays through Saturdays from 10 a.m. - 5 p.m. and Sundays from noon to 5 p.m.
Film A few films snuck into the multiplex early this week due to the Thanksgiving holiday including the remake of the 1980s classic action film “Red Dawn” and the new animated film “Rise of the Guardians,” which presents a super hero team of Santa Claus, the Easter Bunny and the Tooth Fairy.
Contact Herb Stratford at herb@ ArtsandCultureGuy.com. Stratford teaches Arts Management at the University of Arizona. He appears weekly in Inside Tucson Business.
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InsideTucsonBusiness.com
NOVEMBER 23, 2012
15
PROFILE
Co-working spaces taking hold in Tucson By Alex Dalenberg Inside Tucson Business Don’t go looking in a coffee shop to find some of Tucson’s most dedicated freelancers. The city’s hub for independent workers is in a former tile showroom near the southwest corner of Sixth Street and Sixth Avenue. Spoke6, 439 N. Sixth Avenue, is a fully equipped, professional office space dedicated to independent workers and small business owners. The workers who spend their days there are a mix of Web developers, programmers, consultants and writers who would otherwise be working from home, a rented office or the occasional café. This kind of shared work environment is part of an international trend known as “coworking.” A second co-working space on the south side, Gangplank Tucson, opened in November last year at 5120 S. Julian Drive and a co-working directory - wiki.coworking. com - shows hundreds of locations throughout the world. “I see it as a no-brainer,” said Spoke6 founder Tim Bowen. “Working on your own can be secluded. It doesn’t inspire you to do great work.” Bowen opened Spoke6 with his own money in January 2010. He recently sold collaborative workspace to Nathan Puente of Graphic Fusion, who was an early member of Spoke6. Bowen also owns a web design firm called Creative Slice that employs about 10 contractors. Before opening Tucson’s first coworking space, he worked from a rented office downtown where he shared the space with few other like-minded entrepreneurs. “Working from home or a coffee shop isn’t really an option for me,” Bowen said. “I’ve always had an office.” With a defective air conditioning in their building, Bowen said that he and his office mates eventually got tired of sweating it out. When he went looking for a new space, he knew he didn’t want to go it alone, so he latched onto the growing co-working trend, inspired by what his peers were doing in other cities. Bowen himself is typical of the co-working scene, which is dominated by young, tech-savvy professionals in new media and other creative industries. According a 2011 survey by Deskmag, a publication dedicated to co-working, most coworkers are in their late-20s to early-30s and are typically a mix of freelancers, entrepreneurs and telecommuters. Bowen said he picked the location because of its “cool, creative ambience” and proximity to downtown and Fourth Avenue. The former showroom has plenty of open space and huge windows that let in lots of natural light. Playing on the location at the intersection of Sixth and Sixth, he christened his new co-
BIZ FACTS
Spoke6 439 N. Sixth Ave. www.spoke6.com (520) 261-2676
Spoke6, at Sixth Avenue and Sixth Street, sits in a converted tile showroom near the downtown core.
Josh Shaloo, left, of Few Loose Screws, Gabriel Luethje, middle, of F Stop Design and Scott Stanley, right, of Association Blogs are among the 20 regulars who work at Spoke6.
working venture “Spoke6.” The name also speaks to a metaphor about a bicycle spoke, which is integral to the effective working of a bike just as a workspace is essential to the working of a business. Since opening, Spoke6 has roughly doubled in size and members, expanding its of-
fice space to about 2,700 square feet and with about 20 regulars. The office is equipped with wireless Internet, printing, a small break room with two refrigerators and coffee machines, plenty of open desk space and a two conference rooms that can be used for meetings and presentations.
Memberships start at $150 per month key members with special 24-hour privileges pay $300 per month. Drop-in use costs $20 per day. Prospective members can use a free trial day to see if they like co-working. “Usually people find they’re a lot more productive than they would be at home,” Bowen says. “There are no dishes to do.” That’s been the case for member Josh White, who joined last December and uses the space for his tech company JIBWA LLC, which builds software applications and websites. “It’s almost impossible to get things done at home,” White says. “And there is a lot less to worry about than having your own office. Tim takes care of the details.” Because many of the coworkers are in related fields, it’s also a great referral network Puente said. “If we can’t do something for a client, we’ve got someone sitting right next to us who does,” Puente said. Bowen sees Spoke6 as a collaborative workspace for talented like-minded people to gather, share ideas and feed off each other’s collective energy. And as the economy continues to add more Web-based independent workers, Bowen said he expects to see even more interest in spaces like Spoke6. “I hear about new ones opening every day around the country,” Bowen said.
16 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
PEOPLE IN ACTION APPOINTMENTS Bruce Stubbs has been named as an exclusive agent for The Horace Mann Insurance Companies. Stubbs’ insurance agency, Champions Choice Insurance and Financial Services, serves Tucson school employees. Stubbs was formerly a teacher and coach, and has been in the insurance industry for over 10 years with The Horace Mann Companies. Horace Mann is the largest national multiline insurance company focusing on educators’ financial needs. Amy Beiter, MD, has been appointed President and Chief Executive Officer (CEO) of Carondelet St. Mary’s Hospital. Beiter has been a member of the St. Mary’s medical staff since 1992. In 2007, she joined St. Mary’s administration and was named the hospital’s Chief Medical
AMY BEITER
TONY FONZE
Officer in 2008. Beiter has worked tirelessly to improve the quality of care at Carondelet’s west side campus. Tony Fonze, formerly Carondelet Health Network’s CIO and a vice president of Ascension Health Information Systems, has assumed the role of president and CEO at St. Joseph’s Hospital. Fonze has been integral in the planning and implementation of many key strategic initiatives for Carondelet Health Network. He is a founder, trustee and vice chair of Arizona’s health
information exchange, the Health Information Network of Arizona, and has worked extensively toward the improvement of patient experience in our hospitals and across our Ministry. Carondelet has announced several Network-level leadership appointments, including Don Denmark, MD, FAACP, FCFP, MMM, CPE, as Senior vice president and Chief Medical Officer for the Network; Martha Gerganoff, RN, MSN, as senior vice president and Chief Nursing Officer for the Network; Tawnya
DON DENMARK
MARGARET GERGONOFF
{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. Tretschok as vice president, executive director of physician practices. NEW HIRES The San Diego Padres and Tucson Padres have hired Pat Murphy as
manager for the Tucson team. Murphy spent 15 seasons as a coach for the Arizona State University baseball team. Murphy managed the Padres Short-Season affiliate in Eugene, Ore. for the past two seasons. He was one of only three coaches in NCAA Division 1 history to
TAWNYA TRETSCHOK
reach 1,000 career wins before age 50. The San Diego Padres and Tucson Padres also have announced the hire of new hitting coach and pitching coaches for the 2013 season. Former Major League pitcher Bronswell Patrick is the new pitching coach. Tom Tornincasa joins the staff as hitting coach. AWARDS Pima Community College educator Laura Porfirio has been honored by the Arizona Association of Lifelong Learning for
KI MOORE
fostering ongoing education in the community. Porfirio is an advanced program coordinator in the PCC Adult Education Services who has been involved in adult education for more than 17 years. She coordinated PCCAE’s civics program when it became an Arizona Department of Education Civics Model Program in 2002, and participated in statewide development of civics standards. Ki Moore, DNSc, RN, FAAN, professor at the University of Arizona College of Nursing, has
been awarded the Association of Pediatric Hematology/Oncology (APHON) Distinguished Researcher Award for her research focused on central nervous system toxicities in children with cancer. The APHON Distinguished Researcher Award recognizes a nurse who has sustained a program of substantive research that has made a significant contribution to the scientific foundation for pediatric hematology/ oncology nursing and advanced the care of children with cancer and/ or hematological disorders and their families. Moore’s research identifying central nervous system toxicities provided new knowledge regarding cognitive changes that had previously received little attention and recognition.
CALENDAR REGULAR MEETINGS
The S.M.A.R.T. Group Every Friday, 12 to 1:30 p.m. Nova Home Loans MultiMedia Conference Room 6245 E Broadway Blvd., 5th Floor $25 Members $45 nonmembers Contact: Dale Dillon Lips (520) 429-6000 or dillonadvisory@gmail.com Society for Human Resource Management Greater Tucson Chapter Second Tuesday, 11 a.m. to 1 p.m. DoubleTree, 445 S. Alvernon Way Membership:Garrett Kowalewski, (520) 647-9100
garrettk@staffmattersinc.com RSVP by Thursday prior to meeting: www.shrmgt.org Solutions Forum Fourth Monday, Noon to 4 p.m. Clements Insurance 6245 E. Broadway, Suite 310 Information: 1-800-7169626 or (480) 200-5678 RSVP required Open only to business owners and divisional heads Southern Arizona Chapter of Enrolled Agents Third Tuesday, 11:30 a.m. Knights of Columbus Hall 601 S. Tucson Boulevard
Info: (520) 751-8986, www. aztaxpros.org/sacea Southern Arizona Architects & Engineers Marketing Association Third Tuesday, 11:30 a.m. to 1 p.m. Sheraton Tucson 5151 E. Grant Road RSVP: Dana Dietrich ddietrich@eectuc.com Cost: $25 members / $35 Nonmembers Southern Arizona Chapter of the Society for Design Administration Fourth Tuesday , Noon to 1:30 p.m. Viscount Suites Hotel
4855 E. Broadway Information: www.sacsda. com or tamara.g@wt-us.com RSVP: mormsby@hmwstructural.com Cost: $20 members, $25 nonmembers Southern Arizona Logistics Education Organization (SALEO) Third Wednesday Location and times vary Information: al@saleo, (520) 977-3626 or www.saleo.org Cost: $25 members and 1sttimers; $30 nonmembers Superior Business Networking First and third Tuesday
11:30 a.m. to 1 p.m. Info: (520) 631-7398, vthompson@az-health.com The Annuity Doctor — Curt Zacharias Every Tuesday, 3:30 p.m. Bookmans, 6230 E. Speedway, Community Room Information: Curt Zacharias (520) 990-0009 Cost: Free Tucson Association of Executives Every Wednesday, 6:30 to 8 a.m. Tucson Country Club 2950 Camino Principal RSVP: (520) 321-0879,
taeoffice@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 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
InsideTucsonBusiness.com
NOVEMBER 23, 2012
17
LEGAL FRONTLINE LEGAL
Employment-at-will doctrine is under attack from NLRB The employment-at-will doctrine, which is followed in Arizona, provides that an employer can fire an employee for good cause or no cause at all — just not for an unlawful reason (such as the employee’s membership in a protected category like race, national origin, etc.). This doctrine has caught the attention of the National Labor Relations Board (NLRB). Earlier this year, the NLRB took an aggressive approach toward invalidating the at-will statements that most employers include in their handbooks and employment agreements. At-will employment can be altered by contractual agreement between the employer and employee, so most employers include an at-will employment statement in their handbooks and offer letters and other employment documents to prevent these statements from being construed as a contract for employment that could alter the at-will relationship. This month, an administrative law judge working on behalf for the NLRB issued a decision against American Red Cross
Arizona Blood Services Division, determining that a portion of an employment-atwill policy violated the National Labor Relations Act. The portion was a statement that SHERRY DOWNER read, “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The administrative law judge concluded that the policy violated the National Labor Relations Act because it was essentially a waiver of the employee’s right to advocate concertedly to change his or her at-will employment status. The NLRB caused even more concern when its acting general counsel, Lafe Solomon, announced this as a focus area and was reported to have said the use of blanket at-will employment disclaimers may violate the National Labor
Relations Act. On Oct. 31, the NLRB’s associate general counsel’s office issued advice memoranda relating to two cases involving at-will employment statements, providing two examples, one from Mimi’s Café and the other from Rocha Transportation, it found acceptable: “No representative of the Company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ relationship.” And: “No manager, supervisor or employee of [company] has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.” The general counsel’s office concluded these statements do not violate the National Labor Relations Act because the provisions do “not require employees to refrain from seeking to change their at-will
status or to agree that their at-will status cannot be changed in any way.” Instead, the provisions simply prohibit the employer’s own representatives from modifying an employee’s at-will status. In light of the recent advice, employers should review the at-will statements in their employment materials to determine if the statements require employees to waive their right to seek to change their at-will status. Employers can expect to see more on this topic in the future, given that the general counsel’s office warned that the law in this area remains unsettled and instructed the regional offices to submit all cases involving at-will statements to the board’s Division of Advice.
Contact Sherry Downer, an attorney with Fennemore Craig practicing in the areas of labor and employment and business litigation, at sdowner@fclaw.com. Downer is also an adjunct professor at the University of Arizona James E. Rogers College of Law teaching employment courses.
NEWS
Tougher laws and penalties target metal thieves By Roger Yohem Inside Tucson Business Increase the penalties. Limit the financial incentives to steal. In the escalating battle against metal thieves, a statewide ad hoc committee released 10 proposals for legislative consideration last week in Phoenix. The Metal Theft Ad Hoc Committee, chaired by state Rep. Tom Forese, R-Gilbert, is seeking a statewide, “no tolerance” policy regarding metal theft. The “united community front,” consisting of dozens of public and private sector interests, began earlier this year in Tucson through the efforts of the Metropolitan Pima Alliance (MPA) that formed a local metal theft task force. “There is no silver bullet solution. There’s a growing realization that metal theft compromises public safety. If someone is convicted of metal theft, they go to jail. We’re trying to pass a no-tolerance policy,” said MPA executive director Amber Smith. Legislatively, Southern Arizona is represented on the ad hoc committee by Rep. Ted Vogt, R-Tucson. On November 15, the committee finalized these 10 recommendations:
1. Register all scrap yards with the state. 2. Implement a metal theft alert system between law enforcement and scrap yards. 3. Zero tolerance policy: jail time if convicted (based on South Dakota law) 4. Prosecute with a public endangerment focus (Class 2 felony). 5. Zero dollar threshold for recordkeeping ( down from $25). 6. Cashless transactions (down from $300). 7. Fund a sting operation pilot program for one year. 8. Fund public education and law enforcement training program. 9. Automatic police review of individuals who sell $15,000 of copper scrap. 10. Lower insurance premiums for landlords that secure their metal-theft property. These points also address the repair of property damage as part of the restitution process. Typically, when thieves rip out materials worth only a few hundred dollars for scrap, they cause thousands of dollars in structural damage. In Southern Arizona, the push for tougher laws and penalties has the overwhelming support and participation from every local
jurisdiction’s elected and law enforcement officials. At the state level, the governor’s and the state attorney general’s offices are involved. From the private sector, there is enormous support from electric, water, gas, communications, and cable utility companies; professional construction-related trade associations; commercial building owners and managers; 88-Crime; and many in the general business community. Metal theft, especially copper, has become an extremely costly issue for both businesses and homeowners. Thieves are targeting copper in air conditioners, plumbing and other fixtures the most. Other popular items are sheet metal, aluminum and copper-aluminum coils Utility companies such as Southwest Gas and Tucson Electric Power have stepped up the pressure, pointing out that damage to facilities caused by metal theft endangers public safety. Cut power lines, for example, increase the chances of electrocution. Developing an effective solution to the problem will be complex. Both the local task force and the statewide ad hoc committee realize several issues that need addressed cannot be fixed simply.
Among the challenges are how to crack down on rogue scrap dealers without overregulating ethical scrap yards. What is the best financial and legal support for law enforcement and the courts? What penalties, if any, are the best deterrents? What changes in the law can best help businesses? In earlier statewide meetings, Forese pointed out that the fight against metal theft has two key stumbling blocks. When a theft is reported, law enforcement simply cannot respond within a reasonable amount of time. And when arrests are made, the courts do not impose penalties so there is little prosecution. The inability to prosecute has caused “a lot of discussion,” said Smith. “The problem is having enough evidence that this individual took this specific piece of copper from this specific place and link it all together.” There were some 2,400 arrests on metal theft charges last year and only 25 people were prosecuted, she added.
Contact reporter Roger Yohem at ryohem@azbiz.com or (520) 295-4254.
18 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
FINANCE YOUR MONEY
3 types of income that can help fight low interest rates If you depend on fixed-income investments for at least part of your income, you probably haven’t been too happy in recent years, as interest rates have hit historic lows. Nonetheless, even in a low-rate environment, you can broaden the income-producing potential of your investment portfolio. However, before taking action, it’s helpful to know what the near-term direction of interest rates may look like. The Federal Reserve has stated it plans to keep short-term rates at their current historic lows until at least mid-2015. The Fed doesn’t control long-term rates, making them somewhat less predictable, but it’s still likely that these rates will rise sooner than short-term ones. In any case, rather than worry about something you can’t control — that is, interest rate movements — try to focus on those things you can accomplish. And one achievable goal is to create an investment mix that includes three types of income: variable, reliable and rising.
Variable income investments Some variable income investments, such as certificates of deposit (CDs), offer significant protection of principal, and the value of your investment won’t change with fluctuating interest rates, provided you hold your CD until maturity. Of course, current rates are quite low, which means CDs provide you with little income today, but their rates have the potential to rise along with short-term interest rates.
Reliable income investments When you purchase reliable income investments, which can include individual bonds, you have the opportunity to earn more income today, and more consistent income over time, than you’d typically get from variable income investments. However, you will likely also experience greater price fluctuations as interest rates change. Specifically, as interest rates rise, the price of your existing bonds typically will fall.
Rising income investments When investing for income, you’ll want to keep at least one eye on inflation — beTIM BEITHON cause if the interest rates paid on your CDs and individual bonds are lower than the annual inflation rate, you may lose purchasing power. If this gap persists over time, it could grow into a real problem for you. Consequently, you’ll want at least some of your investment income to come from rising income investments, such as dividend-paying stocks. Of course, not all stocks pay dividends, but with the help of your financial advisor, you can find companies that have paid – and even increased — their dividends for many years running. And if you don’t actually need the dividends to supplement your cash flow, you can reinvest them to build your ownership stake in these stocks. Keep in mind, though, that companies can reduce or discontinue dividends at any time. Also, remember that stock prices will constantly rise and fall, so the value of your principal could decline. As you can see, all three types of income-producing investments — variable, reliable and rising — offer some benefits, along with some risks of which you need to be aware. But putting together a mix of these investments that’s appropriate for your individual needs, goals and risk tolerance may help you boost the productivity of the “income” portion of your portfolio — no matter what’s happening with interest rates.
Contact Tim Beithon, a financial advisor with Edward Jones, at Tim.Beithon@edwardjones.com or (520) 546-1839. Beithon’s office is at 9525 E. Old Spanish Trail, Suite 111.
TUCSON STOCK EXCHANGE Stock market quotations of some publicly traded companies doing business in Southern Arizona
Company Name
Symbol
Nov. 19 Nov. 14 Change
52-Week 52-Week Low High
Tucson companies Applied Energetics Inc CDEX Inc Providence Service Corp UniSource Energy Corp (Tucson Electric Power) UniSource Energy Corp (Tucson Electric Power)
AERG.OB CEXIQ.OB PRSC UNS UNS
0.02 0.11 11.85 40.50 31.50
0.03 0.18 11.66 40.05 31.64
-0.01 -0.07 0.19 0.45 -0.14
0.02 0.01 9.56 34.62 22.76
0.12 1.00 15.94 43.12 33.55
8.34 37.40 2.49 9.49 58.20 7.98 86.76 13.75 55.50 3.13 17.79 36.10 36.01 29.47 35.91 15.11 96.57 37.91 45.08 9.55 84.90 62.98 19.02 38.28 29.09 63.33 60.44 190.35 33.31 58.95 5.40 40.59 33.44 14.08 52.23 24.63 1.19 36.81 33.96 40.84 55.97 40.93 35.45 34.89 47.35 64.72 16.75 15.90 55.26 47.11 16.76 43.27 47.83 11.35 9.10 40.72 37.58 63.01 16.10 28.90 45.28 19.70 119.71 19.62 12.07 32.08 69.02 32.65 32.40 9.81 19.71 53.92 35.50 27.66 5.65 18.67
8.13 0.37 2.58 8.99 57.55 7.84 84.88 15.33 54.80 3.19 17.35 35.02 35.40 27.83 34.80 15.59 94.47 38.15 45.41 9.56 82.50 60.60 18.39 37.41 28.43 61.47 59.96 185.51 33.20 58.41 5.41 39.29 32.99 14.09 51.23 24.47 1.56 35.01 31.98 39.92 55.24 38.90 34.38 33.76 46.09 63.59 16.89 15.23 54.48 47.56 16.06 43.02 58.42 11.16 8.76 40.10 36.38 61.38 16.07 28.76 44.10 19.98 117.46 19.17 12.01 31.33 71.31 32.26 31.43 9.65 19.33 54.06 34.19 27.33 4.82 18.05
0.21 37.03 -0.09 0.50 0.65 0.14 1.88 -1.58 0.70 -0.06 0.44 1.08 0.61 1.64 1.11 -0.48 2.10 -0.24 -0.33 -0.01 2.40 2.38 0.63 0.87 0.66 1.86 0.48 4.84 0.11 0.54 -0.01 1.30 0.45 -0.01 1.00 0.16 -0.37 1.80 1.98 0.92 0.73 2.03 1.07 1.13 1.26 1.13 -0.14 0.67 0.78 -0.45 0.70 0.25 -10.59 0.19 0.34 0.62 1.20 1.63 0.03 0.14 1.18 -0.28 2.25 0.45 0.06 0.75 -2.29 0.39 0.97 0.16 0.38 -0.14 1.31 0.33 0.83 0.62
7.97 0.20 1.48 4.92 50.95 5.30 72.60 13.52 51.29 2.97 14.18 23.30 20.90 15.97 22.19 11.40 78.81 34.81 36.44 7.08 42.54 50.14 10.75 31.08 21.38 36.41 48.82 177.06 27.10 48.91 3.72 28.28 26.10 6.17 42.72 20.98 0.49 16.31 22.39 35.59 45.62 29.43 27.53 18.58 34.87 52.69 15.69 5.08 42.00 36.50 14.73 31.61 28.89 6.25 7.37 37.05 23.21 47.25 14.04 26.06 32.09 15.51 95.15 18.46 3.96 23.72 56.32 28.53 23.19 5.46 14.52 47.00 21.39 7.80 2.99 5.90
10.92 1.81 3.79 10.10 60.99 9.75 90.93 28.53 60.00 4.93 21.16 38.72 37.96 32.70 37.80 17.42 104.43 43.43 49.23 12.25 86.71 67.20 22.79 48.96 30.97 64.44 63.89 211.79 37.70 62.33 5.85 46.49 37.54 17.30 55.25 25.44 1.81 39.33 34.50 43.36 62.83 42.17 41.84 42.59 49.68 71.25 43.18 18.30 58.68 50.82 23.16 45.72 85.90 14.32 10.05 46.08 38.00 65.80 18.23 34.24 46.59 25.84 129.27 58.29 14.51 35.46 77.60 37.35 36.60 10.99 22.81 55.20 40.69 31.53 9.22 20.97
Southern Arizona presence Alcoa Inc (Huck Fasteners) AA AMR Corp (American Airlines) AAMRQ Augusta Resource Corp (Rosemont Mine) AZC Bank Of America Corp BAC Bank of Montreal (M&I Bank) BMO BBVA Compass BBVA Berkshire Hathaway (Geico, Long Cos) BRK-B* Best Buy Co Inc BBY BOK Financial Corp (Bank of Arizona) BOKF Bombardier Inc* (Bombardier Aerospace) BBDB CB Richard Ellis Group CBG Citigroup Inc C Comcast Corp CMCSA Community Health Sys (Northwest Med Cntrs) CYH Computer Sciences Corp CSC Convergys Corp CVG Costco Wholesale Corp COST CenturyLink (Qwest Communications) CTL Cvs/Caremark (CVS pharmacy) CVS Delta Air Lines DAL Dillard Department Stores DDS Dover Corp (Sargent Controls & Aerospace) DOV DR Horton Inc DHI Freeport-McMoRan (Phelps Dodge) FCX Granite Construction Inc GVA Home Depot Inc HD Honeywell Intl Inc HON IBM IBM Iron Mountain IRM Intuit Inc INTU Journal Communications (KGUN 9, KMXZ) JRN JP Morgan Chase & Co JPM Kaman Corp (Electro-Optics Develpmnt Cntr) KAMN KB Home KBH Kohls Corp KSS Kroger Co (Fry's Food Stores) KR Lee Enterprises (Arizona Daily Star) LEE Lennar Corporation LEN Lowe's Cos (Lowe's Home Improvement) LOW Loews Corp (Ventana Canyon Resort) L Macerich Co (Westcor, La Encantada) MAC Macy's Inc M Marriott Intl Inc MAR Meritage Homes Corp MTH Northern Trust Corp NTRS Northrop Grumman Corp NOC Penney, J.C. JCP Pulte Homes Inc (Pulte, Del Webb) PHM Raytheon Co (Raytheon Missile Systems) RTN Roche Holdings AG (Ventana Medical Systems) RHHBY Safeway Inc SWY Sanofi-Aventis SA SNY Sears Holdings (Sears, Kmart, Customer Care) SHLD SkyWest Inc SKYW Southwest Airlines Co LUV Southwest Gas Corp SWX Stantec Inc STN Target Corp TGT TeleTech Holdings Inc TTEC Texas Instruments Inc TXN Time Warner Inc (AOL) TWX Ual Corp (United Airlines) UAL Union Pacific Corp UNP Apollo Group Inc (University of Phoenix) APOL US Airways Group Inc LCC US Bancorp (US Bank) USB Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT Walgreen Co WAG Wells Fargo & Co WFC Western Alliance Bancorp (Alliance Bank) WAL Zions Bancorp (National Bank of Arizona) ZION Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT Walgreen Co WAG Wells Fargo & Co WFC Western Alliance Bancorp (Alliance Bank) WAL Zions Bancorp (National Bank of Arizona) ZION Data Source: Dow Jones Market Watch *Quotes in U.S. dollars, except Bombardier is Canadian dollars.
InsideTucsonBusiness.com
NOVEMBER 23, 2012
19
INSIDE REAL ESTATE & CONSTRUCTION
Building permits zero in on blasting past 2010 mark By Roger Yohem Inside Tucson Business
YEARTODATE BUILDING PERMITS: OCT. 2012
With the 2011 benchmark already in the distant past for this year, building permits for new single-family homes likely will now exceed the 2010 total as well. Year-to-date, 1,748 permits have been issued compared with 1,438 for all of 2011. Home builders blasted past last year’s mark in September. Now in sight is the 2010 mark of 1,865 permits. To achieve that, just 117 more permits are needed to be issued for November and December. The outlook is positive, as every local jurisdiction is up at least 8 percent over 2011 in the number of permits authorized so far this year (see chart). “October’s permit volume was higher than expected with 211. High volumes are often supported by a few highly performing subdivisions but the market-wide distribution of October’s activity was a very positive indicator of the optimism home builders have in the Tucson-area market,” said Ginger Kneup, owner of Bright Future Real Estate Research. “Permit activity typically falls in the last two months as home buyers are distracted by the holidays. Nonetheless, we are happy to see permits climb back up to 2009 levels with total single-family permits expected to be around 2,000 for this year,” she added. On a percentage basis, Oro Valley’s yearover-year volume has increased the most at 239 percent. The town has approved 129 permits compared to only 38 a year ago. Next was Marana at 70 percent, having jumped from 260 to 442 permits. Their 182-permit increase also was the region’s highest in real numbers.
THE PULSE: Median Price Active Listings New Listings Pending Sales Homes Closed
TUCSON REAL ESTATE
11/12/2012
11/5/2012
$161,500 4,859 355 354 148
$150,000 4,831 427 345 183
Source: Long Realty Research Center
2012
2011
2010
2009
Pima County
497
446
602
645
Marana
442
260
310
167
Tucson
284
192
283
315
Sahuarita
238
160
285
469
So. Pinal
158
146
148
155
Oro Valley
129
38
42
47
1,748
1,242
1,670
1,798
Total Source: Bright Future Real Estate Research
MONTHLY BUILDING PERMITS: OCT. 2012 2012
2011
2010
2009
Pima County
50
34
23
71
Marana
57
30
22
14
Tucson
37
17
7
33
Sahuarita
27
11
6
24
So. Pinal
14
13
1
24
Oro Valley
26
3
3
4
211
108
62
170
Total Source: Bright Future Real Estate Research
Year-to-date, Pima County has issued the most single-family permits at 497, followed by Marana at 442.
Best sellers near airport During October, the demand for resale homes held strong in two zip code areas where more than 60 percent of listings in each neighborhoood sold. The month’s best sales were in the 85706 zip code area where 36 homes sold although only 32 were listed. This is the southeast part of the city near Tucson International Airport
WEEKLY MORTGAGE RATES Program 30 YEAR 15 YEAR 3/1 ARM
Current
Last Week
11/19/2012
One 12 Month 12 Month Year Ago High Low
3.63% 3.875%APR 3.50% 3.75%APR 4.95% 3.00% 3.25%APR 3.00% 3.25% APR 4.22% 2.75% 3.00%APR 2.75% 3.00% 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%
around Drexel Road and Alvernon Way. In zip code 85756, 62.5 percent of listings sold, or 35 out of 56 available homes. This area also is near the airport, between Interstates 10 and 19. Due to timing quirks with listings, more homes than officially listed can be sold during a month. The new data is from the Tucson Association of Realtors Multiple Listing Service. Three areas continue to have consistently high levels of inventory with the most in Green Valley with 289 listings. Zip code 85739 was next highest with 267 listings, the general neighborhoods along North Oracle Road from Catalina State Park north to the junction of State Routes 77 and 79. The third-highest level was in the Catalina Foothills area with 237 homes in inventory.
Russell earns CCIM Steve Russell, director of development for Larsen Baker, has earned professional designation as a Certified Commercial Investment Member (CCIM) from the CCIM Institute. Russell was among 215 commercial real
estate professionals who passed the CCIM Comprehensive Examination who were honored recently in ceremonies in Las Vegas. Russell holds a bachelors degree in regional development from the University of Arizona and has been with Larsen Baker since January 2007. While attending the UA, he interned with Desco Southwest, a fullservice real estate firm. The CCIM designation recognizes an individual’s expertise in commercial real estate brokerage, leasing, asset management, valuation, and investment analysis. The Southern Arizona CCIM Chapter is affiliated with the CCIM Institute and National Association of Realtors.
Sales and leases • Arizona Community Physicians leased 3,889 square feet at St. Josephs Medical Plaza, 6565 E. Carondelet Drive, from Tucson II MOB, represented by Tom Knox and Rick Kleiner, Picor Commercial Real Estate Services. The tenant was represented by David Montijo, CBRE. • The Jewish Community Foundation of Southern Arizona leased 3,834 square feet at 3567 E. Sunrise Drive, Suite 143, from La Paloma Corporate Center, self-represented. The tenant was represented by Rick Kleiner, Picor Commercial Real Estate Services. • Burns Pest Elimination leased 3,812 square feet at 3865 E. 34th St., Suite 109, from A&P Investments. Rob Glaser, Picor Commercial Real Estate Services, handled the transaction. • La Mia Toscana leased 3,210 square feet at 7332 N. Oracle Road from Cottonwood Plaza LLC, represented by Dave Carroll, Romano Real Estate. The tenant was represented by Craig Finfrock, Commercial Retail Advisors. • Healthcare Realty Services leased 3,117 square feet at 1055 La Canada Drive, Green Valley, from Retina Associates Southwest, represented by Tom Nieman, Picor Commercial Real Estate Services. Andrew Sternberg, Oxford Realty Advisors, represented the tenant. • Plaza Bonita Family Mexican Restaurant leased a 3,039 square foot building at 9165 E. Tanque Verde Road from 2006 Thu Family Trust, represented by Craig Finfrock, Commercial Retail Advisors. The tenant was represented Fred Wang, Fred Wang Brokers. • Vista Insurance leased 1,156 square feet at 3600 E. Prince Road, Suite 104 from LPR Properties, represented by David Carroll of Romano Real Estate. • Sugar Sweet Bakery leased 997 square feet at 18 S. Eastborne Ave. from CRI Broadway Village Partners, represented by Craig Finfrock, Commercial Retail Advisors.
Email news items for this column to ryohem@azbiz.com. Inside Real Estate & Construction appears weekly.
20 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
EDITORIAL BIZ BUZZ
Relishing the inspiration of Women of Influence So here I am, thinking back to last Friday morning and Inside Tucson Business’ annual Women of Influence breakfast. It’s always inspiring event. Just the way to start the holiday season. There was Amber Smith from the Metropolitan Pima Alliance talking about “rational people” wanting to make a change. Carmen Bermudez, who while growing up in Costa Rica turned to bull DAVID HATFIELD fighting as a way out of the jungle. Her advice for anyone thinking of doing likewise: “Stay away from the horns.” We missed a couple of people. Ginny Clements, of Golden Eagle Distributors, who I know and have the deepest respect for, was out of town with her family, and Jacquelyn Jackson of Tucson Values Teachers couldn’t make it. My contact lenses were floating on my eyes when Cindy Parseghian talked. I’ve known Cindy since before three of her children were diagnosed with the fatal Niemann-Pick Disease Type C. I suspect Jane Poynter bowled over the audience of more than 300 talking about cutting-edge science and NASA’s achievements. There was the promise from Dr. Carolyn Compton of pharmaceutical cures coming out of the Critical Path Institute. I owe Linda McNulty an apology. I wrote the script emcee Matt Russell used and in it said she was the independent chair of the Arizona Independent Redistricting Commission. As most Southern Arizonans know, the odds are a McNulty in these parts is a Democrat. I also had a bit of an issue with Jane McCollum who felt our profile of her in the Oct. 26 issue gave her too much credit and not enough credit to the visionaries of the Marshall Foundation who preceded her. Both deserve our praises. Barbi Reuter from Picor Commercial Real Estate Services offered her insight on the Tucson’s economic recovery. It’s getting better. Pima County Attorney Barbara LaWall was only our second elected official to be honored as a Woman of Influence. (It was also good to see County Schools Superintendent Linda Arzoumanian, the only other elected official honoree, at the breakfast.) Raena Janes, owner of the successful La Paloma Academy charter schools, gave us hope that education in Arizona is improving. Colleen Edwards, of Tucson Appliance and Tucson Wholesale Supply, seems as genuine as they come. It’s easy to see how that helps her succeed in business. We heard from Valerie Diaz, who in her job at Casino Del Sol is literally an ambassador to the world for this region. Neelam Sethi talked about her Indian heritage and using it to “give back to Tucson.” I didn’t realize it ahead of time, but the University of Arizona connection was well-represented. If you want UA spirit, we had it with Kathleen “Rocky” LaRose, deputy director of athletics. There was Karen Mlawsky, CEO of the hospital division of the University of Arizona Health Network; and Dr. Lori Mackstaller, who is with the UA’s Sarver Heart Center. Jeanette Maré, founder of Ben’s Bells, said she felt overwhelmed to be in the same room with the other honorees. What a phenomenon she has created. And what a spirit they must have at Comcast’s Tucson office. Corporate Affairs Manager Kelle Maslyn talked of the connections both the company and she have made in the community. She poked fun at those who are frustrated over DirecTV’s refusal to carry the Pac-12 Networks, inviting them to contact Comcast. What would life in Tucson be without these women? Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237.
EDITORIAL
The hope of holiday shopping Today is Black Friday, the day that is supposed to signal the beginning of the season that retailers work all year to achieve — profitability. Aside from the trite news media stories of shoppers pushing and shoving to get some bargain, the real importance of the day, and the entire weekend, lies in the numbers that will tell whether this ends up a good year or not. Economists tell us that more than 70 percent of the economy comes from consumer spending. It doesn’t take a genius to figure out consumer spending comes from consumer confidence and that’s been a problem. Here it is 2012 and every year for the past five years we’ve hoped it would get better. In 2007, it all came crashing down. In Tucson we felt it with the sudden closure and bankruptcy filing by First Magnus Financial Corp., a Tucson-based mortgage company that had 350 offices and 6,000 employees before its collapse in August. The previous year it had arranged the funding for $30 billion in loans. That was a huge, painful blow to the Tucson, economy. But at the time, knowing that just a year earlier the region had reached a population of 1 million people, we thought we could weather it. Little did we know. By Thanksgiving 2008 we had seen the worst of the recession, which we were told officially started in December 2007. September 2008 was particularly brutal. Unemployment rates in Arizona were at 14-year highs, home building had dropped to its lowest levels since 1945 and consumers were “in full retreat,” as University of Arizona economist Marshall Vest put it then. It was a severe recession that was going to last at least another year. There was no way around it, Black Friday took on every negative connotation it could that year. In 2009, it got worse. Bloomberg reported that companies world-wide lost $14.5 trillion in value. U.S.
and Arizona economists started using terms like “bumping along the bottom” to describe the state of the recovery. Tucson and Arizona would take longer to recover. At Thanksgiving time we took that to mean that things might not be getting any better but they wouldn’t get worse either. Again, we got it wrong. In 2010, the median income in the U.S. fell below what it had been in 1968. The Tucson region had lost 26,000 jobs and the unemployment rate was still going up. Home prices had plunged and Arizona had the second highest rate of underwater homeowners — those who owed more on their mortgages than the home was worth. The good news at Thanksgiving was that the recession was over — at least from an economist’s technical point of view. Finally in 2011, there was evidence the recovery was underway. Some of the jobs started to come back and homes began to sell again, though at nowhere near the values of six years earlier. For the Tucson region, it became clear that it was going to take us a little longer to recover than most. At Thanksgiving, consumers were starting to spend money once again but much of it was due to pent-up demand and making purchases of necessities rather than splurging on extravagances. Now it’s 2012, and the politicians in Washington are talking of a financial cliff and sequestration. In Tucson, retail is trying to come back. New stores are opening in buildings that stood vacant for years. Other retailers that have struggled the past five years are finally beginning to see glimmers of hope signaling that just maybe this would be the year that consumers start spending again. We’ve made it this far. It looks as if hope is going to carry us through another holiday season. It can’t get any worse, can it?
InsideTucsonBusiness.com
NOVEMBER 23, 2012
21
OPINION BIZ INK
Black Friday: Shop ‘til you drop or stroke ‘til you croak? websites to find the best price for an Xbox? And keying in those 16 credit card numbers isn’t half the rush of zipping that little flat plastic bugger through a real card reader on Black Friday at 5:17 a.m. ROGER YOHEM Tell me, how does sipping leftover coffee from a stainy brown mug at home compare to a fresh cup of Starbucks? Yeah right, this is the hip new era of “social” networking.
Internet shopping isn’t half the fun of “being there.” Typically, Black Friday crowds are large, friendly, talkative, upbeat, excited but not rowdy, and well-behaved… until the moment the doors open. Then, it’s like an episode of “Survivor.” You’re competing against all the other hunters and gatherers to save $50 on that giant pink plastic Barbie playhouse made in China. Black Friday is an experience many younger people will never experience. That’s why if it’s done right like we did, it becomes an experience. Last year, we did a family trip to New York for the Thanksgiving Day Parade. By 7:30 a.m. Black Friday, we were deep inside Macy’s store
Roger Yohem photo
Black Friday isn’t half the fun it used to be. Retailers are still shaking off the financial stress of The Great Recession. Thousands of former home owners who lost their casitas to foreclosure are living on damaged credit. Cautious consumers who are under-employed or laid off are doing less with less. After 328 days in business, Black Friday is the tipping point for retailers. It is the longestablished celebratory day they start to make a profit. Sales explode and the red-inked losses disappear from their books. By tradition, Black Friday is when mobs of shoppers, still drowsy after gorging on tryptophan-laced turkey the day before, swarm to the bright lights of the TV news trucks at 4 a.m. outside their store du jour. Black Friday is not just another normal shopping day. It’s a time for pushy, prehistoriclike hunters and gatherers to converge in crowded aisles to stalk their prey: a red-hot red-tag sale. But sheesh, the Internet is ruining all the fun. Most retailers now release their Black Friday sales early via Facebook, Twitter, et. al. Cripes, even Santa came to town this year on Nov. 10. Internet entrepreneurs also are helping to trash the Black Friday tradition. Websites like blackfriday@gottadeal.com and www.bfads.net posted retailers’ ads and holiday discounts weeks early. Also in the digital maze are www.blackfriday.com and www.theblackfriday.com, conspiring to “net” sales from traditional brick and mortar stores. At home on the Internet, how does sitting at a monitor in a raggedy Wildcats T-shirt compare to the pleasure of actually holding that hot bargain in your hands? At the mall, you come, you wait, you see, you touch, you pay, you conquer. From home, how thrilling is it toggling between the Target and BestBuy and Walmart
Last year, the Yohem family started Black Friday with Santa at Macy’s in New York City.
50
million
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.
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on Herald Square. With two teenage girls, we went straight to the eighth floor to see Santa. Macy’s Santaland is quite Disney-esque, with a winding long path decorated with gorgeous holiday displays, bright lights, music and even live elves. To handle the volume of kiddies, there were actually four Santa sitting rooms, cleverly laid out to conceal each from the others. Seeing Santa, the girls fell under his magic spell and giggled like silly six-year-olds again. We didn’t want to leave after our souvenir photos were taken. Try getting that Black Friday memory with Santa from an Internet site. After checking out Macy’s bargains, we headed for Fifth Avenue, Rockefeller Center and other interests. At 11 p.m., we ended a long, memorable Black Friday in Hershey’s chocolate store at Times Square. Although Tucson isn’t New York, this annual shopping extravaganza is a tradition for many local families. Black Friday marks the official start of the holiday season. But geesh, it’s being ruined. It’s fading to gray. Thanks to the Internet, retailers post all kinds of premature, innovative sales online. Plus, many opened Thanksgiving night after dinner. That’s clever: open for gaggles of people stuffed with turkey and pumpkin pie – traditional gut-busters - to hunt for bargains known as door-busters. Black Friday isn’t half the fun it used to be. The best half is the hassle and inconvenience of it all. Depending on your preference, you can shop ‘til you drop or keystroke ‘til you croak.
50
%
Yes . . . . . .50% No . . . . . . .50% Ne week’s poll: Next For Black Friday, did you sho shop in a store or online or bboth or neither?
Facebook Likes: 2,590 Make the news • Letters to the editor — Opinions on business-related issues or coverage of issues by Inside Tucson Business are encouraged and will be published. Submit letters to the editor via email at editor@azbiz.com. Letters also may be mailed to Letters to the editor, Inside Tucson Business, P.O. Box 27087, Tucson, AZ 85726-7087. Letters must include the writer’s name and telephone number. Inside Tucson Business reserves the right to edit and may not print all letters that are received.
22 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
OPINION GUEST OPINION
‘Express left’ will make intersections safer, more efficient Express lefts will The Grant Road and Oracle Road not only help intersection project now under construclessen motorist tion will introduce area drivers to indirect aggravation, it will “express left” turns, though indirect left also produce turns already are familiar to area drivers measureable who make U-turns at medians in major reductions in fuel roadways to access businesses or side consumption and streets on the opposite side of the road. vehicle emissions. Once the Grant-Oracle project is Express left turn complete, drivers on Grant Road wanting JAMES R. DEGROOD intersections are to turn left onto Oracle will go through the planned for many intersection to a signal, make a U-turn at a of the major intersections in the Grant new, dedicated U-turn signal, return to the Road reconstruction project in the Regionintersection and turn right. While this may al Transportation Plan that was approved seem an inconvenience to those drivers by voters in 2006. Besides Oracle, these wishing to make a left-turn, there are include Stone Avenue, First Avenue, compelling reasons for this change in Campbell Avenue, Country Club Road, intersection operation. Alvernon Way and Swan Road. Studies by the federal government and Other major intersections across the major universities have shown that left turns Tucson region will likely get this type of at major intersections are among the most treatment. The heavily used intersection at common causes of crashes on America’s Oracle and Ina roads also will be reconroadways. The two most frequent are structed as an express left turn intersection collisions involving turning vehicles and and may be completed at about the same vehicles entering the intersection from the time as Grant-Oracle. opposite direction, along with rear-end The Tucson area is not unique in the crashes involving vehicles in the left turn lane. adoption of new intersection designs. These types of accidents have been signifiAcross the nation, a number of alternative cantly reduced at intersections with express intersection designs are offering solutions left turns, compared to the left-turn intersections they are replacing here and in other metropolitan areas. BIZ FACTS Left turns at heavily traveled intersections are also a major These websites have more information about contributor to traffic congestion. express left turn intersections: Removing left turns at busy www.grantroad.info/left_turn_video.htm intersections results in significantly improved traffic flow, www.grantroad.info/pdf/indirect_left_turn.pdf more efficient than those m greater capacity and will allow www.grantroad.info/faq.htm without such restrictions. w for better synchronization of www.roadprojects.pima.gov/InaOracle/projectdocuments.html A University of Toronto traffic signals in the region. sstudy found that about 40 Neighborhoods near these percent of accidents p express left-turn intersections involving pedestrians and motor vehicles to the problems posed by heavy turn benefit because a smaller footprint is movement demands at major intersections. occurred at intersections. Left turning required to build them than many alternavehicles accounted for the most accidents A publication by the Federal Highway tive designs. involving pedestrians, with the exception of Administration drew on several studies of Pedestrians and cyclists benefit from vehicles passing straight through intersecsuch median U-turn intersections and having a shorter crossing. And there will be tions. reported that the simple elimination of crosswalks with signals at each of the Based on experiences from communities direct left turns results in reductions of 20 U-turn medians. already using express left turn intersections, to 50 percent of head-on and angle crashes The amount of time drivers spend we expect to see positive impacts like these: at intersections. backed up at intersections will be reduced. • Reductions of all crashes at these A study by North Carolina State University of It is not uncommon for vehicles to wait for intersections of at least 16 percent. several variations of restricted left-turn several traffic lights to make left turns or • Reductions of crashes causing injury of intersections found that all proved safer and simply get through a major intersection.
about 30 percent. • Reductions in motorists’ time wasted sitting at traffic signals express left intersections of 42 percent. • Fuel savings due to shorter waiting times of at least 9 percent. The express left turn intersections being developed on Grant Road and other corridors around our region and state will be different, but they will be well signed so drivers will know how to use them.
James R. DeGrood, PE, is the director of transportation services for the Pima Association of Governments’ Regional Transportation Authority.
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NOVEMBER 23, 2012
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24 NOVEMBER 23, 2012
INSIDE TUCSON BUSINESS
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