Tag Archives: arizona state university

2015 RED Award logo

RED Awards 2015: Best Higher Education Project

On Feb. 26, AZRE hosted the 10th annual RED Awards reception at the Arizona Grand Resort & Spa in Phoenix to recognize the most notable commercial real estate projects of 2014 and the construction teams involved. RED Award trophies were handed out in 10 project categories, to six brokerage teams and safety, subcontractor, architect, general contractor and developer of the year awards were also presented. AZRE also recognized Sunbelt Holdings President and CEO John Graham with a lifetime achievement award. Click here to view all 2015 RED Awards Winners.

01-ASU-CACCollege Avenue Commons

Developer: Arizona Board of Regents
Contractor: Okland Construction
Architects: Gensler; Architekton
Size: 137KSF
Location: Tempe
Completed: July 2014

Arizona State University’s five-story College Avenue Commons is the new home for the Del E. Webb School of Construction, School of Sustainable Engineering and the Built Environment, University Tour and Sun Devil Marketplace. The building contains a 200-seat auditorium, classrooms, BIM, materials testing and computational labs. Every tenant has a unique entrance off College Avenue, and the building is rife with didactic features. Elements of the design and construction were modeled in 3D so students can study the building’s construction. It also includes exposed mechanical, structural and electrical systems as well as chilled water, fire alarm and data systems that can be used for instruction.

T Mobile IPhone

ASU study reveals formula for app success

Americans love our smartphones, and we’re constantly downloading more apps to use on them. So, how do you know which apps are going to be the most worthwhile to get — the ones that will ultimately be the best sellers? A new study from the W. P. Carey School of Business at Arizona State University breaks down the formula for a winning app.

“More than 1,200 apps are released each day, and we found a number of ways to determine which ones would be the most successful,” explains Professor Raghu Santanam, one of the study’s authors, who teaches in the Information Systems Department at the W. P. Carey School of Business. “For example, simply providing updates for an existing app can really add to its popularity.”

Santanam and Ph.D. student Gun Woong Lee conducted the new research, recently published in the Journal of Management Information Systems. Since Apple doesn’t release sales figures to the public, the researchers tracked individual apps and their presence on the “Top 300” charts in Apple’s App Store over 39 weeks. The final dataset covered about 7,600 apps by almost 4,000 sellers, and the researchers found a number of factors that make an app more attractive to buyers.

“Free app offers, high debut ranks, expanding into less popular categories, continuous quality updates and high user-review scores all have positive impacts on an app’s sustainability,” says Lee.

In fact, the study found that each time a seller just expands to a new app category, it bumps up that seller’s presence on the top-grossing charts by about 15 percent. The researchers also discovered that free apps generally stay on the charts up to two times longer than paid apps. In addition, when sellers keep updating and improving the features in an app, it can help the app stay on the charts up to three times longer.

“For app sellers, it is a great idea to implement some type of portfolio-management strategy to app markets that focuses on developing multiple apps with low production costs,” explains Lee. “Then, they can take advantage of a large network of different user groups by selling many apps in multiple categories and offering frequent updates to those apps.”

Santanam adds, “The App Store launched with only 500 apps back in summer 2008, and seven years later, users can now download about 1.2 million different apps from that store. Developers and sellers have the opportunity to change the features and characteristics of the apps based on user feedback, reviews and other factors listed in our research, even after those apps go on the market. We’re hopeful this new study will provide them with useful information about how to make adjustments to benefit both consumers and their own company bottom lines.”

More on the study is available at http://www.jmis-web.org/articles/1202 and http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2560677.

housing.prices

Phoenix home prices rose 5 percent in 2014

The final numbers are out for 2014, and the median single-family-home prices in the Phoenix area officially went up 5.4 percent. That’s according to the latest monthly report from the W. P. Carey School of Business at Arizona State University. Here are the highlights of that report on Maricopa and Pinal counties, as of December:

• The median single-family-home sales price rose 5.4 percent in 2014 – from $204,000 to $215,000.
• Demand for townhomes and condos is strengthening, and the median sales price for those types of homes went up a whopping 15 percent in 2014.
• Demand for rental homes also remains strong.

After the housing crash, Phoenix-area home prices shot up from September 2011 to summer 2013. Then, the median single-family-home price rose just another 5.4 percent — $204,000 to $215,000 — from December 2013 to December 2014. Realtors will note the average price per square foot went up about 3 percent. At the same time, townhomes and condos really took off, with their median sales price up about 15 percent – from $123,900 to $142,000.

“The most promising signs in 2014 were for townhomes and condominiums, where both sales volumes and prices were higher than expected,” says the report’s author, Mike Orr, director or the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Demand is shifting away from single-family homes and toward smaller attached homes that are easier to maintain and to ‘lock and leave.’ Growing numbers of baby boomers, whose children have grown up and left, are downsizing. Many millennials also seem to show a preference for smaller, easy-to-maintain homes in central locations.”

Orr adds that mid-range and luxury homes continue to do relatively well in the Phoenix market, while it’s tougher to find homes priced below $150,000. The amount of single-family home sales overall was up 3 percent from December 2013 to December 2014.

Meantime, the supply level remains low. The number of active listings available on Jan. 1, 2015 was down 3 percent from the already low level of Jan. 1, 2014. Fewer “distressed” homes are coming onto the market, with completed foreclosures down 42 percent from December 2013 to December 2014. That lack of cheap inventory is keeping investor interest significantly lower than it was during the initial housing recovery.

Other home buyers weren’t filling the gap, but we may see a positive turn soon.

“We anticipate a modest increase in sales in 2015, as compared with 2014,” says Orr. “The primary increase in demand is likely to come from boomerang buyers who have repaired their credit after foreclosure or short sale several years ago.”

Multifamily units and rental homes continue to command local attention. The multifamily vacancy rate for the end of 2014 was at an all-time low, and multifamily construction permits have been on a strong upward trend. Rental homes are seeing relatively fast turnover and low vacancy rates. As a result, rents are up 6.8 percent in the Phoenix area over the past 12 months.

Lastly, Orr mentions that some Canadians may decide to lock in profits made on Phoenix-area homes bought since the housing crash. In 2014 alone, the prices went up an additional 15 percent when converted to the Canadian dollar.

Those wanting more Valley housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

Warren-Buffett

Warren Buffett headlines new ASU speaker series

Leading business figures, including BerkshireHathaway CEO Warren Buffett, are participating in a new speaker series at Arizona State University.

The “Iconic Voices” lecture series, to be held at the Walter Cronkite School of Journalism and Mass Communication, features candid in-person and video interviews with business notables that include Buffett and Freeport-McMoran CEO Richard Adkerson as well as Andrew Fastow, the former Enron chief financial officer who was at the center a scandal with the energy company.

Jeff Cunningham, professor of practice at ASU’s Cronkite School and the W. P. Carey School of Business, is the creator and host of the series, which is scheduled  for select Thursdays during the spring semester.

Cunningham, who is the former publisher of Forbes Magazine, said, “‘Iconic Voices’ will focus on candid discussions about the everyday lives of extraordinary people.”

“We have chosen to bring these important leaders and disruptors to the Cronkite School to impart the lessons from disruption in non-media industries that could be applied to the digital transformation taking place in the media,” he said. “They have relevance to our student journalists’ understanding of how different leaders approach change, innovation and disruption.”

“Iconic Voices” kicks off on Feb. 26 with an in-person interview with Fastow and concludes March 19 with an interview with Adkerson. The hourlong talks are open to the public and will take place in the Cronkite School’s First Amendment Forum on the ASU Downtown Phoenix campus.

The interviews will be featured on iconicvoices.org, currently under development, with articles written by Cunningham.

Cunningham joined ASU in 2014 as a professor in the areas of disruptive innovation and the business of media. In addition to serving as publisher of Forbes Magazine, he also was publisher of American Heritage magazine, founder and editor-in-chief of Directorship Magazine, the leading publication for corporate board directors, and a senior executive with BusinessWeek.

Cunningham has profiled or interviewed many key business and public policy leaders, including former Supreme Court Justice Sandra Day O’Connor, former Securities and Exchange Commission Chair Mary Schapiro and Goldman Sachs Chairman and CEO  Lloyd C. Blankfein.

“Iconic Voices” Schedule

Thursday, Feb. 26, 2015
7-8 p.m.
Andrew Fastow, former chief financial officer, Enron Corporation; convicted in 2006 of two counts of securities fraud
“Failed, Jailed, and Recovered”
Live interview conducted by Jeff Cunningham, professor of practice, Cronkite School and W. P. Carey School of Business

Thursday, March 5, 2015
7-8 p.m.
Warren Buffett, chairman and chief executive officer, Berkshire Hathaway
“When I Buy a Company, I’m a Journalist”
Video interview conducted by Jeff Cunningham,professor of practice, Cronkite School and W. P. Carey School of Business

Thursday, March 19, 2015
7-8 p.m.
Richard Adkerson, vice chairman, president and chief executive officer, Freeport-McMoRan
“The World of the Global CEO”
Interview conducted by Jeff Cunningham, professor of practice, Cronkite School and W. P. Carey School of Business

rsz_cushman&wakefield

Matt Nebeker joins Cushman & Wakefield

Matt Nebeker, Cushman & Wakefield

Matt Nebeker, Cushman & Wakefield

Matt Nebeker has rejoined the Office Properties Division of Cushman & Wakefield of Arizona, Inc.

Nebeker is a 10-year veteran of the Phoenix commercial real estate industry, focusing on East Valley office leasing. He previously worked at Cassidy Turley (now DTZ) and Trammell Crow, and returns to Cushman & Wakefield, where he worked from 2006-2008.

“We are thrilled to have Matt back with Cushman & Wakefield,” said Jerry Noble, Market Leader | Managing Broker at C&W of Arizona. “Matt’s energy and experience are a terrific addition to our office properties group.”

Nebeker is a member of NAIOP Arizona and Executive Council Charities of Greater Phoenix. In 2009 and 2010 he was top overall broker in the Southeast Valley. Landlord clients served include Parkway Properties, Hannay Investment Properties, Wilson Properties and LBA Realty. Nebeker’s tenant representation clients include such companies as Schein Inc., Kyocera of America and Hubbard Engineering.

Nebeker is an Arizona native and attended high school near San Diego.  He graduated from Arizona State University in 2002 with a Bachelor of Science degree in Finance.

RED-Awards-Logo10

AZRE announces 2015 RED Awards finalists

Every February for the last 10 years, AZRE magazine has shone a spotlight on the commercial real estate industry through its annual Real Estate Development (RED) Awards. This year, a record number of projects and brokerage teams were nominated for a chance to be recognized at this year’s RED Awards.

For tickets to this year’s RED Awards, click here.

After lively debate and a few unanimous decisions among this year’s selection committee, AZRE proudly announces the 2015 RED Award finalists are, in alphabetical order:

Congratulations to this year’s contending projects:
Adelante Healthcare Peoria
Banner Estrella New Tower Addition
Banner MD Anderson Cancer Center Phase II Clinic Expansion
Bottled Blonde/Livewire
Broadstone Lincoln
Chandler Regional Medical Center
CityScape Residences
College Avenue Commons
Coyote Center at Chandler-Gilbert Community College, Pecos Campus
CyrusOne, Building 4
General Motors IT Innovation Center
GoDaddy Global Technology Center
Great Hearts Academies, Arete Preparatory Academy
Heritage Marketplace
Lewis Prison Complex Expansion
Liberty Center at Rio Salado
Marketplace at Lincoln & Scottsdale
Mesa Community College Performing Arts Center
MZ
Ocotillo Brine Reduction Facility
Phoenix Sky Train Stage 1A
SkySong, The ASU Innovation Center — SkySong 3
Start @ West-MEC, Innovation Center
Sun Devil Marketplace
Sunset Heights Elementary School
Sussex Properties for TLC Label
The Newton
University of Arizona—McKale Center Renovation
University of Arizona—Old Main renovation

And the companies that have been nominated as finalists with the above projects:
ADM Group
AECOM
Alliance Residential Builders
Alliance Residential Company
Ameris Construction
Architekton
Arizona Board of Regents
Arizona Department of Administration
AV3 Design
Axis Projects Corporation
Balmer Architectural Group
Banner Health
Butler Design Group
BWS Architects
Cam-8, LLC
Carollo Engineers
Cawley Architects, Inc.
Chasse Building Team
City of Phoenix
Corgan Associates, Inc.
CyrusOne Inc.
Dick & Fritsche Design Group
Dignity Health
DLR Group
DPR Construction
Emc2 Architects Planners, PC
Evening Entertainment Group
Fanning Howey
Fimbres Studio
Follett Higher Education Group
Gannett Fleming, Inc.
Gensler
Great Hearts Academies
HKS, Inc.
Hunt Construction, an AECOM Company
Iconic Design Studio

Intel Corporation
JAVCON
JE Dunn Construction
John Douglas Architects
Jones Studio
Kitchell
Layton Construction Co., Inc.
Liberty Property Trust
LGE Design Build
Maricopa Community Colleges
Mark IV Capital
McCarthy Building Companies, Inc.
McCarthy Kiewit Joint Venture
MD Heritage LLC
Modus Development
Mortenson Construction
Okland Construction
ORB Architecture, LLC
Orcutt | Winslow
Peoria Unified School District
PHArchitecture
Plaza Companies
Poster Frost Mirto
RED Development
RJM Construction
RSP Architects
Ryan Companies US, Inc.
SmithGroupJJR
Sundt Construction, Inc.
Sussex Properties
The Whiting-Turner Contracting Company
Venue Builders
Venue Projects
Wespac Construction Inc.
West-MEC

 

Brokerage Team Finalists

CBRE
Pat Feeney, Dan Calihan and Rusty Kennedy
Todd Fogler, Ryan Eustice and Jami Savage-Gray
Tom Adelson, Jim Fijan, Jerry Robert and Corey Hawley

CPI
Leroy Breinholt
Trent Rustan
Tyson Breinholt

Cushman & Wakefield
Chris Toci and Chad Littell
Jackie Orcutt, John Grady and Mackenzie Ford
Larry Downey

DTZ
Mike Haenel, Andy Markham and Will Strong
Robert Buckely, Tracy Cartledge, Steve Lindley

JLL
Anthony Lydon and Marc Hertzberg
Bill Honsaker, Anthony Lydon and Marc Hertzberg
Dave Seeger, Karsten Peterson and Mark Gustin
John Bonnell and Brett Abramson
Mark Detmer and Bo Mills
Pat Harlan, Steve Sayre and Kyle Westfall
Pat Williams, Steve Corney, Vicki Robinson and Andrew Medley

Lee & Associates
Craig Coppola and Andrew Cheney

Velocity Retail
Andy Kroot
Darren Pitts and Dave Cheatham

The project and brokerage team winners will be announced at the RED Awards reception on Thursday, Feb. 26, at the Arizona Grand Resort between 6 and 8 p.m. At the event, winners of AZRE’s 2015 developer, general contractor, architect and subcontractor of the year awards will also be announced.

Tickets are now available for the RED Awards. here for more information.

housing.prices

Are investors returning to Phoenix housing market?

Investors appear to be returning to the Phoenix-area housing market. The latest monthly report from the W. P. Carey School of Business at Arizona State University examines that new trend, as well as the possibility of a future supply problem. Here are the highlights of the new report on Maricopa and Pinal counties, as of November:

  • The median single-family-home sales price went up 5.5 percent from November 2013 to November 2014 – from $200,000 to $210,990.
  • President Obama announced a housing plan in Phoenix last week that might help create both more demand and a supply problem.
  • Investors are returning to Phoenix, with their percentage of the area’s home purchases up over the past four months.

After the housing crash, Phoenix-area home prices shot up from September 2011 to summer 2013. Then, the median single-family-home price rose just another 5.5 percent from November 2013 to November 2014. Realtors will note the average price per square foot went up about 5 percent. The median townhome/condo sales price actually dropped 2 percent.

“Prices in the Phoenix-area housing market remained relatively flat in 2014, when you take into account the general level of inflation,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “When you look at the change in the mix of sales – with more expensive luxury homes being sold – there is not much real upward price momentum.”

Orr adds there also isn’t much downward price momentum because both supply and demand remain relatively low. The number of single-family-home sales dropped 9 percent from November 2013 to November 2014. The low demand has largely been masking the fact that the market also has a low supply of homes – a situation that appears to be getting worse.

“The rate of new listings has dropped significantly since April, and active listings even dropped slightly in November, which is unusual and signals a weakening supply,” explains Orr. “It would not take much of an increase in demand to overwhelm the current level of supply, and if this occurs, we should expect prices to start rising once more. We will have to wait and see how first-time home buyers react to the new lending environment in 2015.”

Orr’s concern about the potential supply problem stems from a number of things meant to stimulate housing demand:

  • Down payments being reduced to 3 percent on certain Fannie Mae and Freddie Mac conventional loans
  • Continued drops in mortgage interest rates for all types of loans
  • Reduced mortgage insurance premiums announced by President Obama in Phoenix last week

Orr weighed in on the president’s new housing initiative by saying it may help middle-income renters buy their first homes. However, he also doesn’t think the overall impact will be that great.

“By the government’s own numbers, it will only add 250,000 sales nationally over the next three years – increasing sales only about 1.6 percent,” Orr says. “It’s a step in the right direction, but only a small step. A resurgence in home buying will probably occur anyway.”

Meantime, foreclosures remain well below long-term averages for the Valley. Completed foreclosures were down 39 percent from November 2013 to November 2014. Earlier, the loss of these bargain properties prompted a trend of investors leaving the Phoenix area for cheaper areas of the country, but now, that’s changing. The percentage of residential properties bought by investors was up to about 16 percent in November, the highest level since May. All-cash purchases are also back on the upswing.

“While investor purchases are still below the peak levels we saw in the Phoenix area after the housing crash, the levels have started to recover over the last four months,” says Orr. “However, we may see fewer international buyers in the market now because of the recent dramatic rise in the value of the dollar against most foreign currencies.”

Rental-housing demand in the Valley remains strong, partly because many people had their credit damaged during the housing crash and because millennials are waiting until later in life to enter the home market. Rents rose 4.8 percent in the Phoenix area from November 2013 to November 2014.

Those wanting more Valley housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. They also hear directly from Mike Orr about his latest housing report at an event co-hosted by The Arizona Republic and the W. P. Carey School of Business tomorrow morning at Arizona State University. More information and tickets are available attickets.azcentral.com.

Image provided by ASU

ASU ranks high in U.S News & World Report

Arizona State University ranks among the top 10 best schools in the nation for online education, according to rankings released today by U.S. News & World Report.

ASU is ranked eighth place overall for undergraduate online programs in the U.S. News & World Report 2015 edition of “America’s Best Online Programs” among public and private universities. That’s a move up from No. 9 last year.

The university also claimed five spots among the top 25 graduate online programs.

“We are pleased that ASU continues to be recognized for its academic excellence and as an innovator in higher education,” says Phil Regier, dean and executive vice provost of ASU Online. “We are committed to offering the best experience possible to all of our students and ensuring that anyone who is motivated to pursue a bachelor’s degree has the opportunity to achieve his or her educational and career goals.

U.S. News & World Report rankings are based on factors such as graduation rates, indebtedness of new graduates and academic and career support services offered to students. Only degree-granting programs offering classes online were considered. For more information on the Best Online Programs rankings, visit www.usnews.com/online.

ASU Online (http://asuonline.asu.edu) currently offers 41 undergraduate and 38 graduate online degrees and continues to see tremendous enrollment growth, with a 42.6 percent increase since 2013.

Unlike a standard online lecture, ASU’s courses are highly interactive, engaging each student and ensuring the subject matter is fully understood. This structure also facilitates interaction with the highly recognized faculty on campus and classmates to encourage learning through collaboration. The courses are specifically designed to provide access to the vast academic, research and career resources that ASU offers – to anyone, anywhere.

Individual ASU programs recognized for online excellence in the rankings include:

  • ASU School of Criminal Justice, in the College of Public Service and Community Solutions, ranked No. 2 in the country for best online graduate program in its field.
  • The W.P. Carey School of Business, named third best for online graduate business program and No. 4 for online graduate MBAprograms.
  • The Ira A. Fulton Schools of Engineering, ranked 14thin the nation for best online graduate engineering programs.
  • The Mary Lou Fulton Teachers College, rated 23rdfor online graduate education
  • The College of Nursing and Health Innovation, rated 74thfor online graduate nursing programs.
Photo by Shavon Rose/AZ Big Media

Vanessa Hickman resigns for role at ASU

On Jan. 9, Arizona State Land Commissioner Vanessa Hickman informed Gov. Doug Ducey of her resignation. Hickman has accepted a role at Arizona State University, which she will pursue after Jan. 12.

Hickman has worked at the Arizona State Land Department for five years and has been the commissioner since Nov. 2012. As state land commissioner, she oversaw the use of 9.3 million acres of State Trust Land. In 2013, under Hickman’s leadership, the ASLD sold more land in one year than any other year in the department’s history.

“Moving forward, I aspire to help improve the business as usual perspective on the intersect between real estate development, regulatory impacts and natural resource management with the support of a world renowned higher learning institution,” she wrote.

At ASU, Hickman will create an initiative to explore the issues impacting real estate, natural resources and economic development.

“I am confident this initiative will prove useful to the State of Arizona, Arizona State University and many others interested in thoughtful land use,” she wrote.

 

technology

Growing tech firms reflect emerging Arizona business sector

Don Hawley is the quintessential product of Silicon Valley. He went to college at the University of California, Berkeley, became a serial entrepreneur and founded and developed many successful technology companies in the San Francisco Bay area.

So why is he doing business in Arizona?

“Arizona is infinitely more business friendly,” said the founder, chairman and CEO of Scottsdale-based Innovative Green Technologies, which creates environmentally friendly products that reduce emissions and save users money. “Favorable tax rates make it less costly to do business in Arizona compared with California, which is attractive to newer companies that have to watch their pennies. Arizona is also blessed with Arizona State University and the University of Arizona, which supply a constant stream of high-quality young talent, which is a great resource.”

Hawley isn’t alone. The recently expansions of Zenefits and Weebly into the Valley and the emergence of Valley-based WebPT and Infusionsoft as technology powerhouses reflect an exploding techn industry in Phoenix that is transforming the state’s economy.

“The technology ecosystem in Arizona has never been more robust and these recent business attractions are going to become more commonplace,” says Steven G. Zylstra, president and CEO of the Arizona Technology Council. “One of the vital attractions for startups in the Silicon Desert as compared with Silicon Valley is the drastically lower cost of living, especially in the area of housing. The word is getting out about Arizona.”

Valley economic developers are doing more than using lower tax rates and promises of sunshine to convince tech companies to relocate here, the state is building its home-grown success stories. A great example is WebPT, which launched its cloud-based physical therapy software in 2008 and has evolved from startup into one the fastest-growing software company in Arizona, creating more than 200 jobs in Phoenix.

“There are great incentive programs available to businesses looking to grow,” says Brad Jannenga, co-founder, chairman, president and chief technology officer at WebPT. “The Angel Tax Credit program offered by the state is a great opportunity for investors to have peace of mind when backing startups and knowing they can take a tax break when doing so. This was a major win for us when we went out for our Series A round back in 2010. Investors were lining up around the block partly because of the early stage success we had, but also largely because of the Angel Tax Credit.”

It’s the success of emerging companies like WebPT that are driving the robust growth of Arizona’s technology sector, says Barry Broome, president and CEO of the Greater Phoenix Economic Council (GPEC).

“What we’ve done on the policy side was working with the legislature and governor so they understand that even though the headlines belong to Apple and Intel and companies like that, it’s the hundreds if not thousands of small and medium technologically based enterprises that have the chance to be the next GoDaddy,” Broome says. “Maybe you get lucky and you get a Google or a Microsoft or maybe an Infusionsoft becomes a Microsoft. Having the ability to get those small companies to go to scale and having the economic development programs and policies in place to help them are where we’ve been most helpful.”

Jannenga credits organizations like GPEC for helping the technology sector grow by tirelessly looking at new ways to diversify the economy and working closely with Arizona’s universities to produce the next wave of talent needed to feed the workforce demands of the technology industry.

But Phoenix Mayor Greg Stanton put it simply: “WebPT is a game-changer, not only in terms of showing the growth in the tech sector in Phoenix, but growth in the warehouse district in downtown Phoenix.”

Experts say Arizona has actually done a number of things well to build a business environment that fosters innovation and an entrepreneurial spirit.

“The state has emphasized economic development through support of key economic development groups like the Arizona Commerce Authority and GPEC,” says Jacque Westling, partner at Quarles & Brady in Phoenix. “(Arizona) has created and maintained some key tax incentives, such as the Refundable Research and Development Credit and the Angel Investment Tax Credit Program, promoted tech transfer from the universities and supported emerging areas of strength such as biotechnology, data centers, energy and other areas.”

Zylstra says having facilities with ready-to-go infrastructure in desirable hot spots such as downtown Phoenix and downtown Scottsdale has been a major part in attracting technology companies to the Valley.
“Knowledge workers like the type of amenities available in these locations,” he says. “When you add Arizona’s ample workforce, low taxes and low cost of doing business, the foundation is very strong.”

Jannenga says the state’s deep awareness of the emerging technology sector and what it means to our state’s economic future has been helpful to WebPT and other early stage companies.

“I think when people began to recognize that we couldn’t rely on the traditional engines that had previously fueled our growth — tourism and migration from colder climates chief among them — to provide the type of jobs we need, it caused a basic shift in how progressive leaders thought about the future,” says Don Pierson, CEO of SpotlightSales, which has developed a sales performance optimization tool.

With the foundation for building a successful technology sector in place, Pierson says he has seen tremendous growth in the software industry and expects that growth to continue.

“I think biofuels are really interesting,” he says, “and I’m always amazed by what comes out of the biotech area.”

Greg Head, chief marketing officer at Infusionsoft, agrees with Pierson that Arizona quickly becoming a center for software businesses.

“Right now, there are thousands of entrepreneurs incubating new innovations, hundreds of software business growing and employing more people and several bigger software companies like GoDaddy, LifeLock, Infusionsoft and WebPT that are growing fast,” Head says. “The Arizona software community is growing up quickly.”

Experts agree that diversifying Arizona’s tech sectors will continue to power its growth. Zylstra expects aerospace and defense and semiconductor and electronics to continue to be strong, “but IT, especially software and data centers, healthcare, bioscience and alternative energy will help lead us into the future,” he says.

“We need to have all tech industries thriving in Arizona,” says Mike Auger, CEO and founder of PikFly, a technology-driven same day delivery network for local businesses. “A focus in one area puts us into a corner. Semiconductors have been great for our state, but that is really what we are known for — we need to be known for all types of tech.”

While Arizona’s growth in the technology arena is impressive, the state must tackle one major issue to maintain that positive trajectory.

“I spend more of my time as mayor in economic development recruiting and retention than I do anything else,” Stanton says. “The reality is this: the companies are concerned about workforce development. Do we have the pipeline of employees that they are going to need as their companies grow?”

Jannenga agrees that Arizona needs to invest heavily into all levels of our education system and diversify our skilled workforce.

“The places where we’re falling short is we’re not delivering the engineering talent necessary for the tech sector to really take off,” Broome says. “We need to make a big move on the production of engineers and make a big move on the production of information communication technology people.”
Broome says that big move can come from anywhere from community colleges to higher education to unique specialty certification programs that are putting students through six-month boot camps and producing a qualified workforce. He cites the Maricopa Corporate College as a unique training program that is developing and delivering customized workforces.

“You’re going to see continued movement in creating new educational options and a huge infusion of these intermediate training strategies to build the technology sector,” Broome says.

Creating a viable workforce to feed the needs is of the technology industry is a must to maintain the state’s robust growth and quality of life, experts say.

“We either grow the tech sector of the economy or we will fail,” Broome says. “That’s how important it is. It’s where the wages are. It’s where the high-end people are. It’s the part of the economy that is most sustainable. If you’re not building a tech sector, you’re relying on your current industries to remain relevant and we know from history that just doesn’t happen.”

Broome says the Valley has learned from companies like Motorola and General Motors than mature companies in mature industries contract and fade away, so it forces the business community to continually recycle its economic strategy around new industries.

“From my perspective, you’re looking at a make-it-or-break-it situation,” Broome says. “The reason the economy is so sluggish is because it’s waiting for consumption. It’s waiting for government spending and it’s waiting for retail spending and it’s waiting for construction and home buying. When your economy can only recover on that basis, you’re going to continue to have ebbs and flows and dips and falls. Even a place like San Francisco, which has a very difficult business climate because it’s expensive to the point of being unimaginable, its net year-to-year economic growth is much more robust than Phoenix and the rest of the country because its economy is built around talent, innovation and the high-tech sector. If we do a good job and build that out better, there’s no reason why Phoenix can’t be the most exciting community in the United States.”

“I think I’m a little bit neurotic,” said the executive director of Arizona SciTech Festival. “I’m always thinking, ‘Was my day spent effectively?’ ‘Have I done the most I could during my day.’”  Photo by Robin Sendele, AZ Big Media

SciTech Festival director plants seeds of innovation

Science advocate. Executive director of Arizona SciTech Festival. Assistant research professor at both Arizona State University and University of Arizona chemistry and biochemistry departments. Married with four children. All those accomplishments are listed on Jeremy Babendure’s impressive resume.

Most impressive is how Babendure established the SciTech Festival in 2012 and had helped build a state-wide celebration of science, technology, engineering and math (STEM). The festival returns in February.

“I wanted to have an impact on the community and have the ability to do something that was meaningful,” the 35-year-old said.

After finding his passion for science in high school, Babendure received a Flinn Foundation Scholarship, which covered all four years of tuition, room and board and is an incentive for Arizona’s brightest students to remain in state for college. Babendure got his undergrad degree in chemistry and biochemistry at Arizona State University and his Ph.D. in biomedical sciences at University of California San Diego.

“As an undergrad, I made a sensor in how to detect how DNA folds around histones,” Babendure said. “It’s just kind of like a fun puzzle.”

After graduate school, Babendure helped launch the ScienceBridge program at UCSD, which created a pathway to bring hands-on science to students, teachers and the general public. Finding grants and helping start the San Diego science festival was a key part of the program. The experience gave Babendure and idea.

“Well Arizona is my home,” he thought. “Why can’t I help Arizona families and kids?”

Babendure used the experience he gained in San Diego to drive the Arizona SciTech Festival, which now has 18 regional initiatives, nearly 700 events and 65 sponsors.

“Our hope is to promote a culture of innovation in Arizona,” Babendure said. “People see sports as an important thing, so how do we get then to see science and technology the same way? It doesn’t exist unless people do events, unless people really own it and create a collective effort to make it happen.”

housing.prices

Phoenix housing market ending relatively flat year

After several years of wild roller-coaster activity, the Phoenix-area housing market is ready to end a relatively flat year. That’s according to the latest monthly report from the W. P. Carey School of Business at Arizona State University. Here are the highlights of the new report on Maricopa and Pinal counties, as of October:

• The median single-family-home sales price went up just 4 percent from last October to this October – from $200,000 to $208,000.
• Demand remains lower than last year, with sales of single-family homes down 5 percent from last October.
• The Valley is experiencing a very small bump up in two areas – investor interest and new-home sales.

After the housing crash, Phoenix-area home prices shot up from September 2011 to summer 2013. Then, the median single-family-home price rose just 4 percent more – from $200,000 to $208,000 – from last October to this October. Realtors will note the average price per square foot also went up 4 percent. The median townhome/condo sales price rose only 2 percent.

“We’ve seen very little change in the Greater Phoenix housing market for the last year, and stability is the order of the day,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Price increases look tame over the last 12 months and even tamer if you examine just the last six months. There is no longer any real upward price momentum greater than the general level of inflation.”

Orr’s report notes that demand in the market remains lower than last year. In fact, the amount of single-family-home sales dropped 5 percent from last October to this October. Activity from first-time home buyers has been unusually low, in part because some people had their credit badly damaged during the housing crash and also because millennials are waiting to enter the home market until later in life than previous generations. These are also reasons the rental market is strong. Rents have increased 3.7 percent over the last 12 months in the Phoenix area.

Meantime, Valley foreclosures have dropped way down over the past year. Completed foreclosures of single-family and condo homes were down 19 percent from last October to this October. The lack of cheap foreclosures here has been largely driving investors to other areas of the country, where bargains are more plentiful. However, there was a little bump back up between this September and October. The percentage of residential properties bought by investors hit 15.5 percent, the highest level since May, but still well below last year’s levels.

“Investors and out-of-state buyers are showing a small recovery in buying interest, but to get our market back to what we would consider normal will still require a major increase in demand from local first-time home buyers,” explains Orr.

Some expect the coming introduction of conventional home loans with a lower, 3-percent down payments next year to stimulate more interest, but Orr isn’t sure this will make a major dent. He anticipates small, incremental improvements.

“The big economic gains of the last few years have helped companies, but not necessarily the average person who might consider taking out a home loan,” says Orr.

One other note from Orr: The market share for new-home sales is doing better and has recovered to 14 percent – the same level as October 2013. Taylor Morrison, Pulte Homes and Meritage Homes are leading the way in the Phoenix area.

Those wanting more Valley housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

Deloitte Report Reveals Mid-Market Companies Expect U.S. Economic Growth

Experts: 2 more years until full economic recovery in Arizona

We can expect our economic recovery to take about another two years in Arizona. That’s what experts said today at the 51st annual Economic Forecast Luncheon co-sponsored by Arizona State University’s W. P. Carey School of Business and JPMorgan Chase.

About 750 people attended the event at the Phoenix Convention Center. Key experts delivered a comprehensive overview of what’s happening in the state and national economies, as well as the stock market and housing market. One main message was that Arizona is now growing at a faster rate than the nation, but we still have some distance to go.

“As of May, the United States finished gaining back 100 percent of its jobs lost in the recession, but in Arizona alone, we’re only 69 percent of the way there,” explained Research Professor Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business. “We expect to regain that last 96,400 jobs in the next year and a half.”

So far this year, Arizona has experienced 2-percent job growth, while our state’s 30-year average is a much higher 4.2 percent. Still, this rate was good enough to rank Arizona as the No. 12 state for job growth as of October. Arizona ranked No. 13 in personal-income growth by midyear. McPheters believes the state will speed up from here.

Among his Arizona predictions for 2015:
• Employment growth could rise from an expected 2.2 percent this year to 2.5 percent next year.
• Personal-income growth could jump from 4 percent this year to 4.5 percent in 2015.
• Population growth could go up from 1.4 percent in 2014 to 1.5 percent next year.

McPheters added Arizona is doing particularly well in creating jobs in finance/insurance and health care. The state is lagging in manufacturing and construction. Arizona unemployment has dropped from 7.8 percent last year to 6.8 percent this year. However, we continue to recover much more slowly than from past economic downturns, and we continue to face risks from ineffective growth policies at the national level.

John Lonski, chief capital markets economist of Moody’s Analytics, addressed the national economy by saying that we can expect more subpar growth in 2015.

“We expect U.S. real GDP (gross domestic product) growth to rise from an expected 2.2 percent this year to about 2.8 percent next year,” said Lonski. “We also anticipate the national unemployment rate may drop from 5.8 percent this October to 5.4 percent by the end of 2015.”

In addition, Lonski predicts U.S. wage and salary income should grow by about 4.5 percent next year. He believes industrial capacity will be more fully utilized. He said the housing collapse, tightening of fiscal policy, and insufficient new product development have been contributing to America’s economic struggle. However, he expects the next major wave of technological innovation to supply stronger-than-expected growth, whether it’s self-driving autos or robotics.

“We’re also experiencing some big changes because of a population shift,” Lonski added. “Only about 1.5 percent of the jobs added post-recession have gone to those ages 16 to 54, while those ages 55 and older gained 20.9 percent. This shift has prompted less spending and more saving, especially by those closer to retirement.”

Lonski also expects the budget deficit to go up, after bottoming out at 2.6 percent of GDP in 2015. That’s because of increased spending on retiring baby boomers, as well as the still-unknown costs of the Affordable Care Act. Decreased defense spending should moderate some of the increases.

James Glassman, managing director and senior economist for JPMorgan Chase & Co., covered the financial markets. He said that, despite the recent rise in stock prices, they are still fairly valued. He added household net worth is back in record territory.

“Credit conditions are improving, and rising vehicle sales prove it,” said Glassman. “Also, we’re seeing some improvements in the housing industry, since builders addressed their previous speculative overbuilding by underbuilding in recent years. Rising home prices are helping to drain the number of ‘underwater’ mortgages.”

Glassman notes the energy sector is also humming along. He expects interest rates to go up next year as the economy continues to improve.

Elliott D. Pollack, chief executive officer of Scottsdale-based economic consulting firm Elliott D. Pollack and Company, covered the Arizona housing market. He repeated that the state has recently experienced a significant slowdown in population flows and only a modest recovery from the sharp downturn in our housing market.

Pollack said there are a few positives, such as slow acceleration of the local economy, decent home affordability, low mortgage rates, a slight loosening of lending standards, and the movement of many all-cash investors to other bargain areas of the country. These factors create more opportunity for local buyers who need financing.

“However, we still see several negatives that outweigh those positives, including relatively sluggish employment growth, fewer people moving, millennials delaying home purchases, many people still waiting out their required seven years in the credit ‘penalty box’ after foreclosures, and overall difficulty in getting home loans,” explained Pollack. “Full recovery is still years away.”

Pollack said more people who have been renting may jump back into the housing market over the next several years as conditions improve. Meantime, apartment construction is up. Pollack believes the Valley won’t see any significant office construction – except in select submarkets like Tempe – until at least 2017.

More details and analysis from the event, including the presentation slides, are available from the business school’s “Research and Ideas” website at research.wpcarey.asu.edu.

tax

Will campaign contributions lower your tax rates?

Many politicians will tell you that donating to their campaigns does not affect the way they vote or design laws. However, a new study from the W. P. Carey School of Business at Arizona State University suggests regular ongoing contributions do help provide access to influential lawmakers and that companies making campaign contributions specifically to tax-writing members of Congress wind up paying lower tax rates over time.

“We found that firms investing in relationships with tax policymakers through campaign contributions do gain greater future tax benefits,” says Assistant Professor Jennifer Brown of the W. P. Carey School of Business, one of the study authors. “We specifically looked at members of the Senate Finance Committee and the House Ways and Means Committee in the research. Overall, we saw that donating companies experienced lower and more consistent effective tax rates in the long run.”

The new research was recently published online by the Journal of the American Taxation Association. The authors are Brown and two recent Ph.D. graduates from the W. P. Carey School at Arizona State University: Assistant Professor Laura Wellman, now of the University of Illinois at Chicago, and Assistant Professor Katharine Drake, now of the University of Arizona. In the study, they remark that political action committee (PAC) contributions to members of Congress, in general, rose 60 percent from the years 2000 to 2008, but PAC contributions specifically to tax-writing members of Congress went up even more — 80 percent.

“Proactive firms build relationships with policymakers through continued campaign support, with the expectation of gaining some economic benefit,” says Wellman. “There is an advantage to getting in the game early and maintaining your seat at the table. Our research provides evidence that increasing the number of political ties to tax policymakers produces a stronger effect on future tax rates.”

The paper points out that one member of the Senate Finance Committee raised more than $11 million in his 2008 campaign, even though he was running essentially unopposed. The research isn’t aimed at showing that anything inappropriate is happening, but rather, that contributions to tax policymakers may help supply more access, such as a receptive ear.

The study utilizes PAC data from the Federal Election Commission and lobbying data from the Center for Responsive Politics. The researchers found that when a firm moved from the 25th percentile to the 75th percentile of “relational” activity – equal to supporting at least five more candidates — then that firm experienced a lower future cash effective tax rate, which added up to an average of about $33 million in annual savings. The frequency of the donations and the power level of the candidates also play a role in the equation.

The article adds that lobbying and contributions work together in achieving firms’ tax-policy outcomes. The full study is available at http://aaajournals.org/doi/pdf/10.2308/atax-50908.

Arizona businesses win Spirit of Enterprise Awards

We all win when local companies grow, create jobs and help boost our still-recovering economy. Today, several of the state’s best businesses were honored for their positive role in our communities. They’re the winners of the 18th annual Spirit of Enterprise Awards from the W. P. Carey School of Business at Arizona State University.

“We enjoy recognizing locally owned companies that introduce innovation, empower employees, impress customers, and make a real difference in Arizona,” says Sidnee Peck, director of the Center for Entrepreneurship at the W. P. Carey School of Business. “This year’s Spirit of Enterprise Award winners are in a variety of industries, and they all meet a market need and have a great impact on the Valley.”

Hundreds of business and community leaders attended today’s awards luncheon at the JW Marriott Desert Ridge Resort & Spa in Phoenix, where the winners were announced. The finalists’ impressive stories were shown on video, as the firms were lauded for ethics, energy and excellence in entrepreneurship.

The 2014 Spirit of Enterprise Award winners are:

• Ersland Touch Landscape – Overcoming Adversity Award. This state-of-the-art landscape maintenance company started as a one-man, one-mower operation run out of a garage. After 30 years in business, it now has a complete customer “feedback log,” an Adopt a Highway commitment, work with nonprofits, and more than 400 residences and 20 homeowner associations as clients.

• IO – Emerging Enterprise Award. This growing firm is focused on rethinking data-center technology, using software solutions, instead of just physical locations. It has more than 650 global clients, including Goldman Sachs and LexisNexis, as well as two patents and an emphasis on energy efficiency.

• I-ology – Gary L. Trujillo Minority Enterprise Award sponsored by Blue Cross Blue Shield of Arizona. This woman-owned technology company offers Web design and related services. It features close client relationships, heavy community involvement, and no management hierarchy, offering all employees a chance to participate in revenue sharing, stock options, flexible schedules and industry events.

• Kitchell – The Hahnco Companies Special Achievement in Entrepreneurship Award. This 100-percent employee-owned commercial builder, developer and program manager launched 65 years ago. It now has more than 850 employees, international operations, an internal leadership program, significant charitable contributions, and a focus on enabling employee-driven innovation.

• Melrose Pharmacy – Innovation in Entrepreneurship Award. This independent pharmacy offers fast, highly personalized service; utilizes cutting-edge equipment; and supports charities like the March of Dimes and local community issues. It has also achieved a 119-percent increase in net income already for this year.

The other Spirit of Enterprise finalists this year were Clean Air Cab, Endless Entertainment, India Plaza/The Dhaba, The James Agency and Potter’s House Apothecary.

Also this year, the Spirit of Enterprise Student Entrepreneur Award went to Anthony Gonzales, a recent W. P. Carey School of Business MBA graduate. Gonzales is a finalist in Entrepreneur magazine’s College Entrepreneur of the Year competition with his grant-winning, ongoing development of FITGuard, a mouthguard designed to indicate levels of head impact for athletes, as well as a smartphone application that can provide data to a diagnosing physician.

The event also included its first-ever National Founder of the Year award. The honoree is Sam Calagione, founder and president of Delaware-based Dogfish Head Brewery. Calagione’s family-owned business started small and grew about 400 percent in just four years. He still experiments with new products, works creatively with other breweries and food companies, and has written books about his experiences as an entrepreneur.

The Spirit of Enterprise Awards are just one focus of the Center for Entrepreneurship, which helps hundreds of businesses each year. The center offers companies the chance to recruit and meet with top student talent, while also allowing students to get hands-on business-creation experience. The center recently introduced the Sun Devil Select competition to honor ASU alum-owned or alum-led businesses. The center is also self-funded and utilizes community sponsorships to sustain its activities. For more information, visit wpcarey.asu.edu/entrepreneurship.

stem.cell

ASU revises royalty policy, more proceeds to researchers

Arizona State University researchers with inventions licensed to existing companies or to form new startups will be entitled to a larger share of the proceeds under a new university policy developed by the Intellectual Property and Institutional Review Committee and approved by President Michael Crow.

Under the previous policy, net licensing proceeds (after administrative and legal fees) were split equally between the inventor(s), their lab(s) and the university. Effective as of Nov. 1, the “lab share” will be reduced so that a greater percentage of royalties flow directly to inventors.

“For the modern American research university, technology transfer is a critically important pathway for disseminating the knowledge needed to solve major societal challenges and boost our state and regional economies,” said Crow. “For the past decade we have reshaped our efforts in this area to engage more of the faculty in this process, speed the journey from lab to market and reward inventors for their time and effort.”

Technology transfer at U.S. research institutions is governed by the 1980 Bayh-Dole Act, which set consistent ground rules for inventions arising from federal funding. Prior to Bayh-Dole, the rights to most university technologies reverted to the funding agencies, with the result being that the government had successfully licensed fewer than five percent of the technologies represented by the 28,000 patents it had accumulated.

Bayh-Dole sought to spur innovation and increase the number of research discoveries that were translated into treatments, products or services that benefit the general public. Under its provisions, universities own these inventions and are required to share royalties with the inventors, though they have broad flexibility in how they structure the payouts.

“The changes to ASU’s royalty-sharing policy are designed to incentivize innovation and were adopted after an intensive process involving faculty input and deliberation,” said Sethuraman “Panch” Panchanathan, ASU’s senior vice president for Knowledge Enterprise Development. “The new model recognizes and incentivizes the transformational research being done by ASU faculty across every department and campus.”

For the first $10,000 in net income for a licensed technology: The creator(s) receive half of net royalties, with the lab receiving one-sixth and the university one-third.

After the first $10,000 in net income: The creator share varies by the number of listed inventors on a sliding scale from 40 percent for a solo inventor up to 50 percent for five or more. The university share remains one-third and the lab share adjusts accordingly. The lab share is capped at $2 million on an annual basis.

The full policy on royalty sharing is available here.

Arizona Technology Enterprises (AzTE) is a separate limited liability company formed in 2003 that acts as ASU’s exclusive intellectual property management and technology transfer organization. Funded by ASU, AzTE comprises industry and university professionals with extensive experience in technology evaluation, product development, marketing, capital formation, IP protection and licensing and commercialization.

ASU, through the activities of AzTE, is annually one of the top-performing U.S. universities in terms of intellectual property inputs (inventions disclosed by ASU researchers) and outputs (licensing deals and start-ups) relative to the size of the university’s research enterprise.

The Association of University Technology Managers (AUTM) prepares an annual report collecting the technology commercialization results for almost 200 universities and research hospitals. In the past five years, among research institutions that achieved at least $300 million in annual research expenditures, ASU was one of just four schools to achieve top 10 rankings for licensing agreements, startups and invention disclosures per $10 million in research.

In FY14, ASU faculty working with AzTE set new record highs in invention disclosures (261), U.S. issued patents (56), startups (12), and licenses and options (90).
To date, more than 70 companies have been launched based on ASU discoveries. In just the last three years, these companies and their sub-licensees have attracted $163 million in funding from venture capital firms and other investors.

housing

Phoenix Housing Market in Low Gear Until Next Year

The Phoenix-area housing market is unlikely to see a significant boost until next year. That’s according to the latest monthly report from the W. P. Carey School of Business at Arizona State University.

Here are the highlights of the new report on Maricopa and Pinal counties, as of September:

• The median single-family-home sales price was up 5 percent from last September, but that’s largely just because fewer sales are clustered at the bottom end of the market, not because individual home prices are rising much.
• The area has been experiencing sluggish demand and low sales activity for more than 14 months.
• Because there are fewer people buying, the rental market is hot, with both rents and construction permits for new multi-family housing rising.

After the housing crash, Phoenix-area home prices shot up from September 2011 to last summer. This year, prices leveled off and then rose somewhat. The median single-family-home price went up 5 percent from last September to this September – from $198,997 to $209,900. Realtors will note the average price per square foot rose 7 percent. The median townhome/condo price went up 15 percent.

However, the report’s author says the median increases happened primarily just because fewer sales are now clustered at the lower end of the market, with fewer foreclosures and short sales available. Only luxury homes above $2 million are seeing stronger-than-normal demand. Overall, the number of single-family-home sales is down 7 percent from last September to this September.

“Demand has been much weaker since July 2013 and still shows little sign of recovery,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Supply is also fairly limited. We anticipate pricing will continue to move sideways over the next few months, and a significant increase in demand will be required to change things.”

Investors are unlikely to bring that increase in demand. They’ve largely lost interest in the Phoenix area, now that better bargains can be found in other parts of the country with more foreclosures. Investors accounted for only 14.4 percent of residential-property purchases in September — way down from the peak of 39.7 percent in July 2012.

“To get the market back to what we would consider normal will require a major recovery in demand from local first-time home buyers,” explains Orr. “The last quarter of the year is rarely one in which first-time home buyer demand takes off without some unusual stimulus, so it looks as though our hopes for a livelier market will have to rest on a stronger start to 2015.”

Orr says if lenders decide to lower their standards for home loans, then that might create some additional demand next year. Many people who went through foreclosure in 2008 will be allowed to enter the market again, after spending the required seven years in the credit “penalty box.”

Until then, the rental-home market is red hot, with fast turnover and a constrained supply of rental homes available. The Phoenix area has already seen a 5.7 percent boost in rents over the past 12 months. Construction permits to build new multi-family housing to meet the demand are also on a strong upward trend.

Those wanting more Phoenix-area housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

ASU's Arizona Center for Law and Society

ASU law school to break ground next week

The official groundbreaking for Arizona State University’s new $129 million law school building in downtown Phoenix, the Arizona Center for Law and Society, is set for Nov. 13.

The ceremony will take place at the northwest corner of Taylor and First streets starting at 8 a.m. Attending the ceremony will be ASU President Michael M. Crow, retired U.S. Supreme Court Justice Sandra Day O’Connor and Sandra Day O’Connor College of Law Dean Doug Sylvester. Phoenix Mayor Greg Stanton and Phoenix Councilman Michael Nowakowski also are expected to attend.

“The Arizona Center for Law and Society is another wonderful addition to our growing campus in the heart of Phoenix,” Crow said. “Having the Sandra Day O’Connor College of Law in Downtown Phoenix fits perfectly with ASU’s mission of building strong learning and career connections with media, health care, corporate and government organizations for the more than 11,500 students in the downtown campus.”

Construction on the Arizona Center for Law and Society began in July. The new building will be ready for classes by August 2016. The College of Law currently occupies its home of almost 50 years, Armstrong Hall, on the Tempe campus. ASU and the College of Law are committed to ensuring that the Armstrong name will be honored in the new law school.

The Arizona Center for Law and Society is being funded by the city of Phoenix — which is providing land and $12 million — construction bonds through Arizona State University and private donations. ASU Law has set a capital campaign goal of $50 million for construction of the building. The College has raised more than $34 million so far.

“This could not have been possible without the generosity of our alumni and connected legal communities,” Sylvester said. “We are particularly honored that long-time Phoenix attorney Leo Beus and his wife, Annette, recently made a $10 million contribution to the building’s capital campaign. ”

The building is planned to be approximately 280,000 gross square feet with two levels of underground parking. It will have 18 rooms in which classes will be regularly scheduled, including one large lecture hall dedicated to university undergraduate education. Features of the new law school include a high-tech courtroom and an active learning classroom.

“Not only will the new law school have state-of-the-art learning facilities, it also will provide our students with incredible opportunities,” Sylvester said. “The downtown location is near the courts and the city’s legal district, which will prove invaluable to our students in the form of internships, externships and networking.”

The Ross-Blakley Law Library, currently located in a separate building near the law school in Tempe, will be moved to the new building. The library will occupy multiple floors and create the main circulatory structure of the center. The first floor of the building will have retail space consisting of a school bookstore and a café.

The Arizona Center for Law and Society also will include space for two think tanks, multiple centers with cross-disciplinary focus and the new ASU Alumni Law Group, the first teaching law firm associated with a law school.

The lead architects on the project are Ennead Architects and Jones Studio, with DPR Construction as the lead builder.

phoenix

Arizona drops from Top 10 for job growth

We’re still slowly recovering from the staggering loss of jobs during the Great Recession, but some cities and states are rebounding faster than others. The job-growth numbers for the first three quarters of 2014 are now out. Research Professor Lee McPheters of the W. P. Carey School of Business at Arizona State University provides rankings and analysis of the winners and losers, based on the latest figures from the U.S. Bureau of Labor Statistics.

Top 10 cities and surrounding metro areas (1 million or more workers), for non-agricultural job growth — comparing January through September of this year to the same nine months last year:

Orlando, Fla. – up 3.7 percent
Houston – up 3.5 percent
Dallas – up 3.4 percent
Miami – up 3 percent
Portland, Ore. – up 2.9 percent
Riverside, Calif. – up 2.8 percent (tie)
Denver – up 2.8 percent
San Francisco – up 2.6 percent (tie)
Seattle – up 2.6 percent
10.  San Diego – up 2.4 percent

Top 10 states for non-agricultural job growth – comparing January through September of this year to the same nine months last year:

North Dakota – up 4.6 percent
Nevada – up 3.6 percent
Texas  – up 3.3 percent
Utah – up 3.1 percent
Florida – up 2.9 percent
Oregon – up 2.8 percent
Colorado – up 2.7 percent
Delaware – up 2.5 percent
California – up 2.2 percent (tie)
Washington – up 2.2 percent

Analysis:

The United States has added about 2.4 million jobs so far this year. The monthly average from January through September was 1.8-percent job growth nationwide. That pace is only slightly better than last year’s, when we saw an overall annual increase of 1.7 percent, so the recovery remains relatively slow.

On the state list, North Dakota has held the No. 1 spot every year since 2009, largely thanks to its oil and gas production. Nevada, Texas and Utah also topped 3-percent job growth this time, with Nevada’s economy receiving a big boost from building activity and impressive construction gains of more than 10 percent.

“Seven of the top 10 job-growth states so far this year are in the West,” says McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business. “Oregon and Delaware are new on the list this time, replacing Idaho and Arizona.”

Arizona actually fell out of the top 10 for the first time in two years. Even though it ranked No. 3 in health-care job growth and No. 5 in financial-activities job growth, the state has now dropped to No. 14 overall. Manufacturing, government and construction contributed to the decline.
The bottom 10 states so far this year are Michigan, Pennsylvania, Connecticut, Maryland, Illinois, Vermont, Virginia, New Jersey, New Mexico and last-place Alaska.  Five of these states were also on the bottom in 2013: Pennsylvania, Vermont, Virginia, New Mexico and Alaska.

McPheters notes very high interest in state economic performance right now because 30 governors are up for reelection, including those in top-10 states Nevada, Florida, Oregon, Colorado and California, as well as bottom-10 states Michigan, Pennsylvania, Connecticut, Illinois, Vermont, New Mexico and Alaska.

On the top 10 cities list, Orlando holds the No. 1 position with 3.7-percent job growth, double the national pace.

“Eight of the top large cities for job creation are in the West,” explains McPheters, “However, Florida also did well, with two cities on the list.”

Seven of the top 10 cities are clustered in Florida, Texas and California. They include Orlando, Miami, Houston, Dallas, San Francisco, San Diego and Riverside, Calif.

The greater Phoenix labor market dropped out of the top 10, as its rate of job growth slipped from 2.7 percent in 2013 to a more modest 2.2 percent during the first three quarters of this year. Phoenix is currently No. 12 among labor markets with 1 million or more workers.

Still, seven large labor markets have job creation below 1 percent: Chicago, Cleveland, Philadelphia, Kansas City, Pittsburgh, northern Virginia and lastly, Detroit.

The full rankings and other job-growth data from McPheters can be found at the W. P. Carey School of Business “Job Growth USA” website: www.wpcarey.asu.edu/jobgrowth. Use the “year to date” function for the current 2014 numbers.

dan_students_edit_2

ASU grant aims to transform global energy landscape

Changing the way the nation generates and consumes energy is at the heart of a multimillion dollar grant awarded to Arizona State University from the Department of Energy.

Under the grant, the university will develop an efficient and cost-effective carbon capture technology using an innovative electrochemical technique to separate carbon dioxide from other emissions originating from power plants.

In what could be an economically enabling breakthrough in the drive to reduce carbon emissions, ASU researchers will explore the real possibility of reducing energy and cost requirements by more than half.

Led by Dan Buttry, professor and chair of ASU’s Department of Chemistry and Biochemistry in the College of Liberal Arts and Sciences, the grant is part of a special Department of Energy program designed to pursue high-risk, high-reward advances in alternative energy research.

“Through this type of venture we are working to advance research and spur economic development in the areas of renewable energy and energy security to create solutions that address society’s grand challenges,” said Sethuraman “Panch” Panchanathan, senior vice president for ASU’s Office of Knowledge Enterprise Development. “This innovative project is a collaborative effort of faculty at ASU from multiple disciplines, as well as collaborators from Proton OnSite and the University of Colorado, who are all developing a new carbon capture technology.”

Where solutions happen

Arizona State University has been building its portfolio in alternative energy research for several years, and currently includes among its capabilities a center for research into electrochemistry for renewable energy applications; several advanced programs on solar energy research; one of the leading testing and certification centers for solar energy; and research into solar-generated biofuels, including advanced work on algae-based biofuels.

The university’s awarded grant of $2.9 million over two years follows an initial “seed” grant where the team demonstrated proof of concept of efficient and cost-effective carbon dioxide capture. ASU’s project was selected through a merit-based process from thousands of concept papers and hundreds of full applications.

The projects are based in 24 states, with approximately 47 percent of the projects led by universities – all supported by the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) program, which aims to develop clever and creative approaches to transform the global energy landscape while advancing America’s technology leadership.

Inspired by the Defense Advanced Research Projects Agency, ARPA-E was created to support high-risk, high-reward research that can provide transformative new solutions for climate change and energy security.

“The potential of this project to advance solutions to the problem of excessive carbon dioxide in the environment is exciting, and we look forward to the team’s progress in this area,” said Gary Dirks, director of ASU LightWorks. “ASU is a place where the convergence of laboratory research and real-world application creates a unique environment where imaginative energy-related projects are fostered and encouraged.”

A new approach

The carbon capture program was initially supported by ASU LightWorks, which brings together the intellectual expertise across the university centered on leveraging the power of the sun to create solutions in the areas of renewable energy, including generating electricity, alternative fuels and preparing future energy leaders.

“We are extremely excited about this new grant from the Department of Energy ARPA-E program,” said Buttry. “The effort is focused on a key issue in fossil fuel-based energy production – how to reduce atmospheric carbon dioxide emissions without consuming too much of the energy content of the fuel. We have recently developed a new approach to carbon dioxide capture that uses an electrochemical process with some design features similar to those in a fuel cell.”

Co-principal investigators on this project are Cody Friesen, School for Engineering of Matter, Transport & Energy one of ASU’s Ira A. Fulton Schhols of Engineering; Vladimiro Mujica, Department of Chemistry and Biochemistry; and Ellen Stechel, Department of Chemistry and Biochemistry and also deputy director of LightWorks. Buttry and Friesen previously worked on an ARPA-E project developing a radical new design for automotive batteries.

Mujica will use quantum chemical calculations to help understand the binding of carbon dioxide to the carrier compounds. Stechel is simulating the cell behavior, Friesen’s group is working on cell design, and Buttry’s on the chemistry and electrochemistry of the binding process.

Also collaborating on this grant are two researchers from the University of Colorado, Boulder; Doug Gin, in chemistry, and Rich Noble, in chemical engineering, who are helping to make very thin membranes for the separation process. Katherine Ayers of Proton OnSite, CT, will be involved with cell design and engineering.

The only proven commercially viable technology for flue gas capture uses compounds called amines in the so-called monoethanolamine (MEA) process. Several plant scale demonstrations use this old technology, first patented in 1930. The MEA process has several drawbacks, particularly the energy required for thermal regeneration of the amine capture agent. As discussed in a recent Department of Energy report (DOE/NETL-2009/1366), for typical conditions, the energy required for this process consumes roughly 40 percent of total plant output, and increases the cost of electricity by 85 percent.

Buttry predicts their innovative approach as having an overall efficiency far better than existing efforts.

ASU’s Department of Chemistry and Biochemistry ranks 6th worldwide for research impact (gauged by the average cites per paper across the department for the decade ending in the 2011 International Year of Chemistry), and in the top eight nationally for research publications in the journals Science and Nature. The department’s strong record in interdisciplinary research is also evidenced by its 31st national ranking by the National Science Foundation in total and federally financed higher education research and development expenditures in chemistry.

housing.prices

Could Looser Lending Standards Boost Phoenix Market?

Will banks start to drop their standards and let people with slightly lower credit scores and much lower down payments buy homes? That’s the big question, after the Federal Deposit Insurance Corporation (FDIC) and other agencies voted to approve new, looser lending rules this week. A well-known expert from the W. P. Carey School of Business at Arizona State University says if the change happens, and the adjustments are reasonable, then it could be good for the Phoenix-area housing market, stimulating growth.

Here are the highlights of the school’s monthly housing-market report on Maricopa and Pinal counties, as of August:

• The median single-family-home sales price went up 11 percent from last August, but that’s largely just due to having fewer sales clustered at the bottom end of the market.
• Both supply and demand in the market remain relatively low.
• Lenders have been reluctant to expand the number of people eligible for home loans, which is helping to stunt market growth.

After the housing crash, the Phoenix area had a fast boost in home prices from September 2011 to last summer. This year, prices leveled off and then rose somewhat. The median single-family-home price went up 11 percent – from $192,000 to $213,500 — from last August to this August. The average price per square foot jumped 7 percent. The median townhouse/condominium price went up 10 percent. However, the report’s author explains the median gains are not reflective of higher home values across the board.

“The median went up largely just because we saw a big drop in sales clustered at the low end of the market,” explains Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “The average price per square foot actually dropped last month. I expect prices to move sideways to slightly down over the next few months until supply and demand get back into balance.”

Both supply and demand are relatively low in the Phoenix-area housing market right now. Single-family-home sales activity dropped 15 percent from last August to this August. Investor interest, in particular, has dramatically fallen over the last year. The percentage of homes bought by investors in August was 14.4 percent, way down from the peak of 39.7 percent in July 2012. There aren’t a lot of cheap “distressed” homes to buy, with completed Phoenix-area foreclosures down 43 percent from last August to this August.

“Better bargains for investors can be found in other parts of the country,” says Orr. “Over the last three months, the percentages of homes bought by investors have been lower than we have seen for many years, confirming investors are no longer driving the market the way they did between early 2009 and mid-2013.”

Rental homes remain popular for those who don’t want to buy a house or who can’t qualify for a home loan. Fast turnover and low vacancy rates have already pushed rents up 5.8 percent over the last year in the Phoenix area.

Meantime, we’re seeing a lot of speculation about whether banks will lower their standards and start letting people with good – but not great – credit scores qualify for home loans. Also, conventional loan down payments could be dropped from 10 percent to as little as 3 percent. The chairman of the Federal Housing Finance Agency spoke in Las Vegas this week and indicated that Fannie Mae and Freddie Mac would likely still purchase and retain those loans, if the banks make them.

“Right now, funds are flowing only to a small proportion of potential buyers, who have excellent credit, which is contributing to weaker-than-normal demand for homes to purchase,” explains Orr. “Lenders are reluctant to take any unusual risks in an environment when Fannie Mae and Freddie Mac might take negative, profit-damaging action against the banks on loans sold to them. It appears it will take a major move by Fannie and Freddie to limit those risks before mortgage availability can get back to a normal level and support the next stage in the housing recovery.”

Orr adds, “Banks have to walk the line on their lending standards. They went from the porridge being too hot (standards too lax) to the porridge being too cold (standards too tight). It’s still a while until we get to ‘just right,’ but striking the right balance could move the Phoenix-area housing market toward more sales and more demand.”

Those wanting more Phoenix-area housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

ItsGoTimeGlass

GoDaddy Opens Global Technology Center in Tempe

Ryan Companies today joined Tempe Mayor Mark Mitchell, GoDaddy executives, Arizona State University, government and economic development officials and local business leaders to celebrate the opening of the GoDaddy Global Technology Center at ASU Research Park.

Ryan Companies is the developer for the project and provided design/build services along with its partner, the Smith Group. The GoDaddy facility was the 9th project constructed by Ryan Companies at ASU Research Park.

“The GoDaddy Global Technology Center is exactly the type of project for which the ASU Research Park was created – to provide a best-in-class environment for knowledge-based and technology companies to innovate and for their creative employees to flourish and succeed.  We welcome GoDaddy to the Park and look forward to their interactions with our leading research faculty and entrepreneurial students,” said Dr. Morgan Olsen, President of the Board at ASU Research Park.

“We are so proud to be a part of the team that brought another outstanding project to ASU Research Park. GoDaddy has really set the bar for corporate facilities that support their workforce with this unparalleled campus,” said Molly Ryan Carson, Vice President of Development at Ryan Companies.

The two-story, 150,000 square foot, state-of-the-art facility was built to promote the creative and collaborative spirit that GoDaddy, the world’s largest technology provider dedicated to small businesses, is known for. The space includes a full-service kitchen with on-site chefs, a slide into the cafeteria area and plenty of opportunities for fitness and fun including a fitness area, locker rooms, an indoor climbing wall, a go-kart track, relaxation stations, a putting green, a yoga room, large outdoor areas, a shaded basketball and sand volleyball courts and a soccer field.

“I am thrilled to welcome GoDaddy and its employees to our city,” said Mayor Mark Mitchell. “This corporate expansion will ultimately bring hundreds of high quality technology jobs to Tempe and continue the tremendous level of quality job growth the city has experienced in the past year.”

The new GoDaddy facility will house engineers, developers, corporate staff and small business consultants. To date, 200 employees have been hired to work in the new Global Technology Center and 250 additional people will be hired in the coming months.

“This is a killer facility. It embodies our GoDaddy spirit, which is energetic, innovative and passionate. It also supports our company culture and values to be extraordinary, own outcomes and join forces,” said GoDaddy CEO Blake Irving. “We are here to help our customers succeed and it all starts at our core, with our own employees. This environment is collaborative, fun, open and stimulating – exactly what fuels creativity for our customers, helps us attract top-tier talent and gives us a competitive advantage.”

starbucks

More than 1,000 enrolled for Starbucks tuition program

Starbucks says more than 1,000 of its workers have enrolled for an upcoming fall semester at Arizona State University to take advantage of a program that helps pay for their tuition.

That’s from about 4,000 workers who started the application process, 2,000 who completed it, and 1,800 who were accepted by the school, according to Starbucks. The Seattle-based company said the most popular degree programs being pursued are psychology, organizational leadership, health sciences, mass communications and media studies and English.

Starbucks said it is too early to tell how much the company will end up paying in tuition reimbursement for the first batch of students. Reimbursements to workers will vary, with many employees expected to qualify for financial aid such as federal Pell grants because of their limited incomes. Over time, however, Starbucks said it expects to spend “tens of millions of dollars” a year on the tuition reimbursement as more workers take advantage of it.

The company is partnering exclusively with Arizona State University’s online school to offer the benefit.

The program was greeted with fanfare this summer because tuition reimbursement is a rare benefit for low-wage retail and food workers. Starbucks also isn’t requiring workers to stay with the company once they finish their degrees. Some of the program’s terms also drew criticisms, however, such as its requirement that students complete 21 credits before being reimbursed.

The program’s terms also vary depending on the student’s year.

For freshmen and sophomores, Arizona State University is giving workers an upfront discount of about $6,500 to cover the estimated $30,000 in tuition for two years, according to Starbucks. To cover the remainder of the costs, workers would apply for financial aid, such as Pell grants, and pay for the rest either out of pocket or by taking out loans.

Students will not be reimbursed for those first two years, meaning Starbucks won’t incur any costs.

For the junior and senior years, ASU is giving a discount of about $12,600 of the $30,000. Starbucks would reimburse whatever tuition workers have to pay for after the financial aid they receive.

On Tuesday, Starbucks was set to announce that 70 percent of the workers who enrolled in the program this fall are juniors or seniors, meaning they will get full reimbursement. About half the workers are baristas and 35 percent are shift supervisors. The rest have positions of assistant store manager or above, the company said.

The company said the most applications came from California, Washington, Arizona, Texas, Florida and Illinois.

classroom-update

Experts say quality education equals quality jobs for Arizona

The formula is simple: W = $. A well-qualified, educated workforce equals high-paying, deeply entrenched Arizona jobs and statewide economic growth.

“There are too many buzzwords and not enough solutions,” muses Rick Heumann, Chandler’s vice-mayor and a passionate education advocate. “If we don’t do something now, we’re going to lose an entire generation. The legislature cannot continue to starve schools and colleges and expect the economy to grow. Incentives will not overcome lack of qualified workforce.”

Heumann, and other business leaders also say that the solutions are more than just funding. It’s a challenge through the whole system to create opportunities and relevance for today’s students to become tomorrow’s well-qualified workforce.

“Arizona education has to produce the talent needed to find a job and fill the gaps in the workplace,” says Steve Zylstra, president and CEO of the Arizona Technology Council. “We need to create more robust opportunities to inform students about career opportunities and the need for education.”

The Arizona business community is finding opportunities and step-by-step trying to bring change to the state’s education system. This is a marked contrast from political attacks on Common Core that one business leader confided are demonstrations that the legislature just doesn’t understand education or economic development.”

“There’s too much rote and not enough reason,” sighs Joan Koerber-Walker, president and CEO of the Arizona Bioindustry Association, Inc. “America is a world power because we know how to think. We’re losing our edge. Not only does STEM (science, technology, engineering and mathematics) need to be at the core of what’s being taught, students must see relevancy to real life and learn to be creative and critical thinkers. It amounts to a needed change in the way we teach.”

Student retention through high school

“Ensuring that all our students are graduating from high school is simply the biggest priority,” sums Cathleen Barton, Arizona education manager for Intel. “We need students to graduate and be career- or college-ready,” she adds.

Study-after-study shows that students need education to get ahead. Barry Broome, CEO of Greater Phoenix Economic Council says that education is part of good economic development. “Improving education is a long-term investment for Arizona. Right now, only a small percentage of high schools generate half our college enrollment. That needs to change,” he says.

“We’re losing students at an unacceptable rate,” worries Bob Enderle, director of community relations at Medtronic. “About a quarter of our students don’t graduate high school, and that rate is higher in ethnically diverse populations.”

“Making education connect; making it more relevant will help keep students in school,” echoes Dave Cano, the company’s senior manager for continuous improvement and a member of Grand Canyon University’s STEM External Advisory Board. “When students don’t graduate, they earn less, the spend less and the add more costs to the system.”

Heumann adds that workers in minimum wage jobs do not earn enough to cover the costs of their services. “We need to help our students qualify for better jobs and then we need to make sure we have the jobs in the market,” he says. “With a high-paying job, a worker adds more value to the Arizona economy.”

Better education means a better economy

Eve Ross, W.L. Gore & Associates, Inc., director of public policy and strategic initiatives Ross about the vicious cycle, “Students are not getting a connection between what’s being learned and how it applies to careers. There are many well-paying careers that require some college, but not necessarily a four-year or graduate degree,” she says. “We need a whole class of student understanding and interested in manufacturing. We’re not talking about a worker tightening bolts on a parade of black Fords. We’re talking about workers who can see how things are made, and come up with ideas to make it better.”

“It’s a simple formula for economic growth. If we can’t attract well-paying careers, Arizona is not going to collect tax revenue for basic services,” she says. “We need a workforce who can read and understand a workplace; students who can do the math and innovate.”

Arizona does education well, but in pockets, says Koerber-Walker, “Schools are short on resources and there are many gaps creating ‘haves’ and ‘have-nots.’ We’re at the bottom of the barrel in too many ways with education. Business will not come if kids are prepared for the jobs.”

The investment in education for tomorrow’s economy comes at a crucial time. Arizona has invested millions of dollars to ready the education system for Common Core standards. “Common Core came out of the business sector,” explains Broome. “Industry needs a uniform standard by which is can compare education achievement to the same standards in every state. This is going to create some concern in Arizona when the results start coming in.”

Building passion for learning

“The world is rapidly changing. Tomorrow’s workforce needs to be able to adapt to a rapidly changing world.” Hal Halladay is the chief people officer for Infusionsoft, “The system needs to focus on training and teaching students to love learning. Education does not end at graduation. Students must be able to continue to learn in order to be able to handle global change.”

Medtronic has jumped into the partnering role with education. It’s been incredibly rewarding and equally frustrating. “We tried to bring students to demonstrate relevancy between what they’re learning and career opportunities, but the process was filled with road blocks,” says Ederle. “We ended up bringing in teachers as interns. One of the science instructors going through the program said it would change the way he taught physics. That’s a success, as we see it.”

Connecting science and technology to something students understand is the key of generating a passion for education. Zylstra talks about the Arizona SciTech Festival, “We had a physics professor talk about the science of baseball. All of the sudden, the kids were seeing how math and physics are in the world relevant to their interests. It’s this type of change we need in education to connect students to learning.”

“We have a mismatch between skills and opportunity,” Barton emphasizes. “Jobs are changing too fast, and education is not changing rapidly enough to keep up. We need to take schools to the next level of teaching.”

Koerber-Walker is concerned that there has been so much focus on what needed to be learned to pass the standardized tests, students weren’t given an opportunity to understand how to use the learning. “There needs to be improvement in outcomes,” she explains. “Students are lacking in soft skills. They need to learn critical thinking, problem solving and an ability to write and communicate.”

“We’re getting good workers coming out of college,” comments Halladay. “The problem is that while the students have the technical skills, they are not getting training on how to function in a face-to-face environment. They need an ability to adapt to changes and creatively solve challenges.”

Partnership part of a solid solution

“This is not going to be resolved by just giving schools more money,” Zylstra says. “It start with motivating parents to be participants in their child’s education. It requires business to partner with schools.” Enderle and Cano at Medtronic, agree. Barton and Heumann cited examples in their conversation.

Heumann doesn’t mince words. “We’re not competing with Alabama, Louisiana and Mississippi for jobs. We’re competing with Texas, California, Washington and New York. Our education investment needs to be at their levels, not the bottom of the heap.”

“We need to re-fund education. The way education is funded does not reflect the needs of business in Arizona,” suggests Koerber-Walker. “Teachers are spending major portions of their own incomes supplying classrooms. That has to stop. We need to invest some dollars to provide schools with the tools to teach the workers we want to offer new business.”

“We have a lot of thoughtful people involved in the process of bettering our schools and workforce. In business, we know that if you don’t invest in training, you start losing ground to competition.” Barton is listing off the solutions she’d like to see for schools. “We want teachers to have the resources to make the curriculum relevant to keep students engaged.”

“Charter schools need to have the same public accountability as public schools,” insists Heumann. “If we have a well-balanced education with pay encouraging bright and effective teachers into the profession, we’re going to do a lot better with students coming out.”

Halladay sums up what a good education system means, “When I try to recruit top-level knowledge workers for my company, the quality of schools is a big reason they will accept or walk away from the job offer. The inconsistency of education quality across the Valley is a major recruiting challenge.”

Heumann sighs, “We can spend millions on cutting taxes and offering incentives. If we don’t have good workers, we’re not going to get good companies locating here. It’s simple economics.”
A well-educated workforce equals strong economic development.

Not making the grade
Personal finance social network WalletHub conducted an in-depth analysis of 2014’s states with the best and worst school systems. WalletHub used 12 key metrics, including dropout rates, test scores and bullying incident rates to assess the quality of education in each state. According to the analysis, Arizona has the 9th worst school system. Here is where Arizona schools rank in individual categories (1=best):
35th – Dropout rate
8th – Champlain University High School Financial Literacy Grade
36th – Math test score
46th – Reading test score
49th – Student-to-teacher ratio

Executive Education
Here are the colleges and universities in Arizona that offer post-graduate programs:

Argosy University
602-216-3118
Website
Number of campuses: 1
Online classes: Yes
Highest degree offered: Doctorate
Leadership: Norma Patterson, associate vice president of academic compliance

Arizona State University
480-965-7788
Website
Number of campuses: 4
Online classes: Yes
Highest degree offered: Doctorate
Leadership: Michael Crow, president

A.T. Still University
480-219-6000
Website
Number of campuses: 1
Online classes: Yes
Highest degree offered: Doctorate
Leadership: Craig M. Phelps, president

Communiversity @ Surprise
480-384-9000
Website
Number of campuses: 1
Online classes: Yes
Highest degree offered: Master’s
Leadership: Todd Aakhus, Ph.D., director

DeVry University
602-870-9222
Website
Number of campuses: 4
Online classes: Yes
Highest degree offered: Master’s
Leadership: Craig Jacobs, metro president

Grand Canyon University
800-800-9776
Website
Number of campuses: 1
Online classes: Yes
Highest degree offered: Doctorate
Leadership: Brian Mueller, CEO

Midwestern University
623-572-3200
Website
Number of campuses: 1
Online classes: No
Highest degree offered: Doctorate
Leadership: Kathleen Goeppinger, president and CEO

Northern Arizona University
928-523-9011
Website
Number of campuses: 34
Online classes: Yes
Highest degree offered: Doctorate
Leadership: Rita Cheng, president

Ottawa University
800-235-9586
Website
Number of campuses: 3
Online classes: Yes
Highest degree offered: Master’s
Leadership: Dr. Kirk Wessel, dean of Angell Snyder School of Business

Thunderbird School of Global Management
602-978-7000
Website
Number of campuses: 1
Online classes: Yes
Highest degree offered: MBA
Leadership: Larry Edward Penley, Ph.D., president

University of Arizona
520-621-1162
Website
Number of campuses: 2
Online classes: Yes
Highest degree offered: Doctorate
Leadership: Ann Weaver Hart, president

University of Phoenix
480-557-2000
Website
Number of campuses: 5
Online classes: Yes
Highest degree offered: Doctorate
Leadership: Timothy P. Slottow, president