Tag Archives: business

CrossFit Push Up

Building A Better Body And Community

Plastered against the windows of the entrance to an intense workout company in Scottsdale is a sign that reads: Motivated People Only.

CrossFit Scottsdale, started by husband-and-wife team Luke and Najla Kayyem in 2008, is striving to provide the best results to their clients while building a positive community atmosphere.

The CrossFit method shies away from typical workouts seen at traditional gyms. Instead, it focuses on sessions that involve strength and conditioning training programs with exercises that are executed at high intensity.

“It may look a little intimidating, but we scale everything,” says Najla Kayyem, co-owner and coach. “We’ve got a very wide spectrum of skill-level, from at-home moms to military personnel; everybody can benefit.”

Classes are led by one of the three coaches and workouts are kept under an hour. Some are even as short as 10 minutes, depending on the intensity level. Routines are constantly varied so that different muscle groups are worked and progress can be made.

CrossFit Scottsdale features a new Workout of the Day, or WOD, which often is named after a CrossFit member. The WOD is performed in class as directed by a coach and can also be found online for those who are unable to make it to class.

All of the coaches at CrossFit are trained to enforce basic nutrition policies to their students. Members are taught that proper nutrition maximizes recovery and refuels their body after workouts.

“Accountability is big here,” said Tiffany Divelbiss, CrossFit nutritionist and coach. “Whether it’s showing me a food journal or talking to me about what they ate, it helps our clients stick to their plans.”

Food and Fuel classes are offered for free along with cooking seminars that suggest quick and easy food to pack for on-the-go meals.

CrossFit Scottsdale even offers members a chance to meet with a coach for one-on-one grocery shopping at Trader Joe’s to help choose the right foods to fuel their bodies.

Not only is nutritional support readily available to members, but CrossFit Scottsdale also works to foster a strong sense of community.

While stretching out before the WOD, new and returning members introduce themselves and tell how long they have been attending CrossFit Scottsdale.

Along with building community, accountability is highly valued.

“We have agreements with them,” Najla Kayyem says. “We’ll call, e-mail, or even call them out on Facebook; anything to help them achieve their goals.”

At the end of each workout, members record their personal fitness goals and time frames on a whiteboard that is openly displayed so that they can be held accountable.

“It was really difficult for me to get started,” says Don Wong, who has been going to CrossFit Scottsdale for more than a year. “But being a part of this community and people who are motivating and encouraging has really helped me reach my goals.”

CrossFit Scottsdale Connections, a once a month networking event held over lunch, creates even more of a sense of community among coaches and members.

During lunch, members and coaches learn about each other’s professional lives in addition to their fitness life and network their businesses with one another.

CrossFit Scottsdale also offers a kids program that focuses on teaching teamwork, fitness and nutrition at a young age.

“We’re changing people’s lives,” Divelbiss says. “They’re not here for a workout. They’re here for a full lifestyle change and because of that we get results really quickly.”

CrossFit Scottsdale memberships run between $99 and $289 a month. For more information visit www.crossfitscottsdale.com or call (480) 922-3253.

CrossFit Workout

CrossFit Workouts

Auction Systems had TLC show - Auctioneer$

Phoenix Auction House Spends Time In The Television Limelight

From businesses to bulldozers, anything can be sold at auction — and all with the trademark bang of a gavel.

Deb Weidenhamer and her Phoenix-based company, Auction Systems Auctioneers & Appraisers, brought the fast-paced world of auction houses to the small screen this fall on TLC’s “Auctioneer$.” The show premiered Oct. 9, and each episode followed about three pieces through the auction process. It showed why it was being sold, the actual auction and why the buyer wanted the piece.

Unfortunately, after four episodes “Auctioneer$” was put on hiatus, but Weidenhamer and her team are glad they were part of the program.

“It was certainly some great media for us,” she says, adding that the show allowed people to get a look at what auctions are all about, as well as leaving them entertained and informed.

Auction Systems already was expanding its business before “Auctioneer$,” but that growth has since accelerated and the company is looking to add four additional locations in the Southwest in 2011. As a result of the show, however, Weidenhamer says that auction attendance, and the number of individuals and companies looking to auction off items, has increased. Now, many corporations are calling Auction Systems looking to auction off surplus or discontinued items.

“Doing a television show is really something that teaches you a lot about corporate messaging,” she says, adding that her company had to “get succinct on what our message was.”

The company’s message was, and continues to be, you can live better by buying at auction, she says.

“Auctioneer$” also shared with viewers one important piece of information about the auction industry.

“It’s different every day,” Weidenhamer says. “You never know what’s going to show up to be sold. It’s always intriguing. The buyers and sellers all have very different motivations.”

Weidenhamer’s favorite auctioned item is an antique time recorder clock that appeared on the TLC show. During the boom of the Industrial Revolution, the four-foot time clock recorded up to 100 employees’ hours at a time.

“I think that’s just really fascinating because it’s such a piece of history. They’re very rare to find. It was just such a beautiful piece,” she says.

The auction industry’s ever-changing ways were what drew Weidenhamer to the business in the first place. In 1995, while on a flight from San Francisco to Phoenix she sat by an 80-year-old former auctioneer. He detailed the excitement and diversity of his career and Weidenhamer was sold. Within a month, she resigned from her job in the mergers-and-acquisitions field and enrolled in auction school. She’s been in the auction business for about 15 years.

In the seven months the TLC crews filmed “Auctioneer$,” Weidenhamer picked up a bit of the reality show way of life — she learned to ignore the cameras.

“You really get used to it,” she says. “They just kind of become a part of the background and you don’t even think about it anymore.”

hardison/downey

hardison/downey Becomes Part of Kitchell

Two familiar names in Arizona’s construction industry are joining forces as hardison/downey construction inc. becomes part of Kitchell Corp., it was announced today.

The move is a transitioning from a joint-venture partnership between the two companies for the past four years.

“We have both historically served very distinct markets and rarely compete for business,” Kitchell CEO Jim Swanson said. “Our joint venture partnership in recent years demonstrates that our corporate values and cultures are closely aligned, so this transition makes perfect sense.”

Both Bob Hardison and Pat Downey, as well as the current management team including Jim Kurtzman, Mike Mongelli and Terri Rosko will remain involved in the company, overseeing the day-to-day operations and client relationships.

“I can’t imagine a better segue at this juncture in hardison/downey’s growth,” Hardison said. “We have worked with Kitchell for decades on various projects, and I’ve always had tremendous respect for their entrepreneurial spirit and diversity of services. Now hardison/downey will be a part of that storied success.”

Kitchell and hardison/downey have had a longstanding partnership that has spanned more than 20 years, and in 2006 evolved into a joint venture partnership specializing in building campus and senior housing communities. Under the name hardison/downey/kitchell, the JV’s projects include the LEED-Gold certified Barrett Honors College and Vista del Sol at Arizona State University. The JV’s current projects are Amethyst Gardens, a retirement and assisted living community in Peoria and student housing projects at the University of New Mexico.

hardison/downey will maintain its autonomy and its location – down the street from Kitchell’s corporate offices. The company will retain all of its employees, many whom have been with the company since its inception.

Arizona Business Magazine's Editor-in-Chief Janet Perez

The Buzz on AZNow.Biz – October 4, 2010

This week on AZNow.Biz, listen to a podcast from our partners at the W.P. Carey School of Business at Arizona State University about what it takes to become a great leader. Our tech columnist looks at how Microsoft needs to shake itself out of its doldrums, and our political columnist writes about the upcoming mid-term elections.

Arizona Business Magazine's Editor-in-Chief Janet Perez

The Buzz on AZNow.Biz – September 27, 2010

This week on AZNow.Biz: Want to push it to the limit? The Sanctuary on Camelback is offering a program to help you train for triathlons. Remember what Mom said about eating your vegetables? Our health columnist says which vegetables can help you avoid a serious disease. Also, find the best apps to increase your web productivity. Log on every day to find all this and many other interesting business news and features on AZNow.Biz


Photo from Wikimedia Commons.

Newly Formed Arizona Commerce Authority Convenes Its Inaugural Board Meeting

Vowing that “today the rubber hits the road,” Gov. Jan Brewer and Jerry Colangelo assembled and introduced 35 state leaders representing diverse backgrounds for the inaugural board meeting of the Arizona Commerce Authority.

The private-sector board will work to align diverse assets and opportunities within the state to compete economically in both domestic and international markets to create high-quality jobs for the Arizona residents.

“For the first time in our state’s history, we convene the Governor, the Speaker of the House and the Senate President, and more than 35 of our nation’s most acknowledged leaders within both the private sector and academia – all with one express purpose: to advance the global competitiveness of our state the economic prosperity we seek for each person, each family and, perhaps more importantly, each child – it’s about a vision for a strong, vibrant economic future for this great state,” Gov. Brewer said.

“When I became Governor, I promised to get Arizona back on track by creating quality jobs, attracting high-growth industries, and advancing our competitive position in the global economy. We are doing just that. With this board, I have now delivered a model to advance Arizona.”

Presentations to the board outlined the impacts of the global economic crisis on the state, the forecasts if Arizona does not address diversification and growth in base industries, the state’s overall global competitiveness, and a focused approach to four core areas on which the ACA will focus and develop a planned approach to advance the state.

The authority will focus on improving the state’s infrastructure and climate to retain, attract and grow high-tech and innovative companies. That focus will be on aerospace and defense, science and technology, solar and renewable energy, small business and entrepreneurship.

“During one of the most challenging economic conditions in our nation’s history, Arizona is competing for something that is even greater than Olympic Gold; we are fighting for the health and future of our families and this state,” said Colangelo, co-chair of the board. “Today, with the expertise and leadership of each board member, we begin to compete aggressively for what really matters.”

Don Cardon, current director of the Department of Commerce, will serve on a selection committee to recruit a president and CEO of the ACA. Other committee members are Gov. Brewer’s chief of staff Eileen Klein; Mo Stein, senior vice president of HKS; Jerry Fuentes, president, AT&T Arizona/New Mexico; and Michael Kennedy, co-founder and partner, Gallagher & Kennedy.

Other notable board members include Kirk Adams, speaker, Arizona House of Representatives; Benito Almanza, state president, Bank of America; Michael Bidwill, president, Arizona Cardinals; Dr. Michael Crow, president, Arizona State University; Linda Hunt, president, St. Joseph’s Hospital and Medical Center; Anne Mariucci, chairman, Arizona Board of Regents; Doug Pruitt, chairman and CEO, Sundt Construction; and Roy Vallee, chairman of the board and CEO, Avnet.

Investors Need Transparency AZ Business Magazine Sept/Oct 2010

Investors Need Improved Transparency When Dealing With Illiquid Assets

Now more than ever, investors and regulators are demanding greater transparency when it comes to hedge funds that invest in illiquid financial instruments. This should come as no surprise given that so many recent defining business failures were related to illiquid assets.

For example, AIG’s downfall was caused by investments in structured credit derivatives that were difficult to value. Bear Stearns’ and Lehman Brothers’ descents were due in part to the illiquid non-agency mortgage assets they held. Many hedge fund investors suffered significant losses in the recent financial downturn, and consequently want a closer view of portfolio assets and valuation processes.

What are illiquid investments?

Illiquid assets are investments that can be difficult to sell and value due to limited market participants, infrequent transactions, complex structures or highly uncertain future performance. In some cases, it can take years to realize a return on the investment. Illiquid investments are frequently held in portfolios managed by hedge funds, private equity groups or investment banks. Examples may include investments in private equity or venture capital companies, distressed credit, bankruptcy claims, over-the-counter (OTC) derivatives, whole loan pools, convertible bonds, auction rate securities and collateralized debt obligations (CDOs). Because of the lack of observable transaction prices, illiquid investments often are valued using models that may include significant management judgment.

Upfront due diligence

In order to mitigate the risk posed by illiquid investments, institutional investors need to perform increased due diligence relating to a fund’s investment strategy. They need to be able to answer questions such as:

What experience has management had with liquidity shocks?

What informational advantages or specialization do they have in the marketplace?

What else is required in order to implement the fund’s strategy, such as sufficient ability to sell/hedge positions in a dealer market or continued financing terms?

It’s also important to ensure that the fund structure is appropriate to meet the cash flow needs of investors and the investment strategy, as well as the financing requirements of asset managers. Is the fund’s structure appropriate given the liquidity profile of its investments? Consider issues of leverage, redemptions and side-pocket accounts that have been used to separate illiquid assets from other, more liquid investments. Is the financing or leverage of the fund appropriate given the composition of its assets? For example, a highly leveraged capital structure with short-term financing is not advisable when combined with illiquid investments.

Lock-up periods, which may restrict an investor’s ability to exit a fund investment, are another area of growing attention due to the recent liquidity crisis. While many funds that specialized in illiquid assets were able to negotiate long lock-up periods for redemptions, other firms were forced to sell in order to satisfy investors’ requests for cash. Funds with long lock-up periods were well-positioned to buy assets at favorable valuations when their competitors had insufficient capital available to make investments. For funds with large concentrations of less liquid investments, a long lock-up period is an appropriate structure.

Hedge funds with long lock-ups need to be able to instill investor trust in their managers’ investment approaches and their funds’ interim values. If investors are restricted in redeeming their fund investments, they should have sufficient information to assess the value and report to internal constituents.

Valuation policies and procedures with an independent third-party review

Hedge funds need to establish and follow clear policies and procedures for the valuation of all assets, but this is particularly true with regard to illiquid investments. During due diligence, investors should review the fund’s written valuation methodologies to ensure management is adhering to industry best practices.

Hedge fund management can ease investor uncertainty by engaging an independent third party to review the fund’s valuation policy, process and the resulting asset prices used for investor reporting. The third party may be hired to review the valuation process and inputs for reasonableness, or alternatively, to provide an independent value of the defined assets.

Additional disclosures to investors

In response to market dislocation, many hedge funds have made disclosures above and beyond what may be required by generally accepted accounting principles (GAAP) in their financial statements to investors. Currently, these disclosures are not part of the regular financial statements, but are provided in an investor letter or as part of a supplemental investor reporting package. However, we may also see additional disclosures required related to fair value measurement, as well as structural or contractual risks.

Such disclosures can help clarify the risks to investors, such as an estimate of transaction and search costs required to liquidate assets, a discussion of market participants and exit strategy, or an estimate of the time necessary to sell or unwind a position — especially a large position. Hedge fund disclosures may also include the liquidation or quick-sale value, i.e., the price if the manager is compelled to sell.

Types of illiquid assets

  • Private equity or venture capital companies
  • Distressed credit
  • Bankruptcy claims
  • Over-the-counter derivatives
  • Whole loan pools
  • Convertible bonds
  • Auction rate securities
  • Collateralized debt obligations

Arizona Business Magazine Sept/Oct 2010

E012850

Greater Phoenix Economic Forecast 2011: “Painfully Slow”

The economy may be better in 2011 than it was in 2010, but the road to full recovery will remain long and full of potholes. But hey, it could be worse. It could be 2009.

That’s according to economist Elliott D. Pollack, CEO of Elliot D. Pollack & Company. Pollack was speaking at the Greater Phoenix Chamber of Commerce’s Economic Outlook 2011 breakfast today at the Arizona Biltmore Resort & Spa.

Pollack said population growth in the Valley should settle at 1 percent this year and rise to 2 percent in 2011. Net job growth will contract by 1 percent in 2010 and climb by 2 percent in 2011. Retail sales will increase 1 percent this year and rise by 8 percent next year. Building permits will increase by 20 percent in 2010 before jumping 50 percent in 2011.

In summarizing his 2011 forecast for the Valley, Pollack read a laundry list of good news and bad news:

  • The housing market is at or past bottom, but there are many negatives still trumping a full recovery, most notably slower migration flows.
  • The commercial real estate market is at or past bottom, but recovery will be slow and “take a long time.”
  • Sales tax revenues are no longer falling, but they aren’t growing quickly enough to fix the state’s battered budget.
  • Retail sales have past bottom and there is pent-up demand among consumers, however, those same consumers are still so worried about personal debt that they will continue to curb spending, thus thwarting a big recovery.

While Pollack said the Valley’s economic recovery will be “painfully slow,” he points out that a recovery is indeed underway. For example, the state’s standing in employment growth compared to the rest of the nation is gradually improving — but only after a precipitous decline. In 2006, Arizona ranked second in the nation in job growth; that dropped to 22nd in 2007; 47th in 2008; and 49th in 2009. Up to July of this year, the state had moved up to 42nd in job growth.

Another indication that the Valley’s economy is showing improvement is in the number of economic sectors that have shown net job gains. Of the state’s 12 major economic sectors, five have shown net job gains so far this year (education and health services; trade; leisure and hospitality; professional and business services; other services). That compares to the same time last year, when no economic sectors reported net job gains.

But, Pollack pointed out again, the Valley and state can’t expect the robust and recoveries that have accompanied past recessions.

He says the Valley’s housing market continues to be weighed down by:

  • Weak job growth
  • Tough underwriting standards
  • Negative home equity
  • Loan modification failures
  • High foreclosures
  • Option ARMs (adjustable rate mortgages) peaking in 2011

In terms of equity, 51 percent of houses in the state have negative equity. The national average is 23 percent. Such negative equity severely curtails people’s ability to buy and sell homes. In addition, supply still outstrips demand in the single-family home market, with an excess inventory of houses somewhere between 40,000 to 50,000 units, Pollack said. A balance between supply and demand will not be fully achieved until about 2014, he added.

The picture is bleaker for the commercial real estate market, with delinquencies on loans still very high. In the office market, Pollack cited forecasts from CB Richard Ellis that said vacancy rates would peak at 25.6 percent in 2010 before dropping to 23.9 percent in 2011. As Pollack pointed out, there currently is no multi-tenant office space under construction in the Valley. In fact, he expects “no significant office building in Greater Phoenix for the next five years.”

Industrial space vacancy rates are faring only slightly better, with CB Richard Ellis predicting year-end vacancy rates of 16.4 percent for 2010 before falling to 15.2 percent in 2011. As for the retail market, the vacancy rate will rise to 12.3 percent in 2010 and hit 12.9 percent in 2011.

For office, industrial and retail commercial real estate, Pollack said he did not expect vacancy rates to reach normal levels until 2014-2015.

Still, Pollack maintained that the economic outlook for the Valley “remains favorable,” thanks to the recovering national economy, increased affordable housing in the Valley, a rise in single-family home building permits, unemployment bottoming out, consumer spending improving and continued problems in California.

Luxury Residential Ship Live And Work Onboard

Luxury Residential Ship Allows People To Live And Work Onboard

You know what a cruise ship is — a small floating city packed with people, all-you-can-eat buffets, frosty umbrella drinks and a few families wearing matching T-shirts that say things like, “Thompson Family Reunion.”

But have you heard of a “community at sea”?

Imagine, if you will, a luxury community where residents have access to the best amenities. Now imagine that luxury community on water and you have The World residential ship.

That’s right, you can buy an apartment on The World and travel the world. You must have a minimum net worth of $10 million just to apply to buy one of the exclusive residences, which range from 357-square-foot studios to 4,200-square-foot, six-bedroom apartments. Besides the crew and staff, the only ones onboard are owners or their guests. The ship is managed and staffed by ResidenSea Management out of Miramar, Fla.

Although capacity on the ship is 600, rarely are more than 300 people onboard at one time. Main thoroughfares and community spaces are often vacant, especially when the ship is in port. That’s when residents are off exploring solo or participating in ship-facilitated group activities on land such as Pretty Women Day, a nine-hour shopping spree on Rodeo Drive.

The World is for those who love luxury travel. But it’s not for everyone. The quiet, reserved vibe, neutral interior design of common areas, and strict dress code help create a community culture that doesn’t seem to fit anyone with mildly eccentric tastes.

While rock stars and other nonconformist types aren’t found here wearing the standard pantsuit, there’s another breed of folks who are plentiful — business people.

Take Richard Reed for example. He is founder and chairman of a company and one of the many World residents who hasn’t hit retirement yet.

Reed lives onboard about four months every year, winters at his penthouse in Puerto Vallarta, Mexico, and spends the rest of his time in Scottsdale. Despite this jet-setter lifestyle, Reed manages to stay well connected while on the high seas.

“It is just as easy to do business in our apartments onboard as it is on land,” says Reed, a resident of The World since its maiden voyage in March 2002.

Every apartment has Internet access and a private fax and telephone line (a Miami area code makes it convenient for domestic callers to get in touch with residents). A conference room equipped with cutting-edge technology and a library offering an array of daily newspapers make doing business at sea easy.

With two networked computers and an all-in-one printer in his condo, Reed has everything he needs to check on business, pay bills and manage his stock portfolio online.

“Just last week I was able to purchase a piece of real estate in Mexico, complete all the paperwork and close — all while the ship was sailing in the Bering Strait, far from civilization,” he says. “Frankly, it’s a lot more fun doing business from the ship than anywhere else I can think of.”

www.residensea.com

Bike Sharing Program

Green Jobs In Arizona And Around The Nation, Bike-sharing Program And More

There’s so much going on in sustainability, it’s hard to narrow down what news to share. Here’s a couple of interesting bits from this week. We’ve gathered stories about new green jobs in Arizona and around the nation, a bike-sharing program and Valley Forward’s Environmental Excellence Awards, among others.

Arizona Gets 100 Solar Jobs
Rioglass Solar, which makes reflector components for solar thermal power plants, is building a $50 million manufacturing facility in Surprise, Ariz.  The facility is going to bring 100 jobs by the time it is operational in 2011.

Valley Forward Chooses Judges for Environmental Excellence Awards
John Kane, founding partner and design principal of Architekton, will be the lead judge for Valley Forward’s 30th annual Environmental Excellence Awards.  The eight other judges include: Steve Gollehon, vice president and managing partner, HDR Architects; Tim Lines, managing vice president, Stantec Consulting Inc.; and Caroline Lobo, director of the Education Studio at The Orcutt/Winslow Partnership.  The winners will be announced Saturday, Oct. 2, at the Phoenician Resort.

President Obama’s Push for Green Energy to Create Jobs
Not only does Obama want America to be greener; but his push for green energy could create up to 800,000 jobs by 2012.  The major issue for green energy jobs in America is that employers are being forced to outsource jobs to stay competitive in the industry. Watch President Obama’s speech at ZBB Energy in Wisconsin.

Do-It-Yourself Solar Panel
CNN’s “One Simple Thing” series takes a complicated process – installing a solar panel – and turns it into something anyone with an electrical outlet can do. Clarian Power’s president, Chad Maglaque, talks about how his company is trying to make the biggest cost in solar power, the installation, a non-issue.

NYC Looks to Start Bike-Sharing Program
Mayor Bloomberg and Transportation Commissioner Janette Sadik-Khan want to start a bike-sharing program that would offer 49,000 bikes to be shared.  Many other cities worldwide including Paris, Copenhagen and Taipei, Taiwan, offer bike-sharing programs.  Right here in Arizona, Northern Arizona University offers the Yellow Bike Program for free.

Solar Installations

New Solar Installations At The University Of Arizona And Luke Air Force Base, Strange Global Weather Patterns And More

There’s so much going on in sustainability, it’s hard to narrow down the news to share. This week we’ve gathered stories about new solar installations at the University of Arizona and Luke Air Force Base, weird global weather patterns bringing to mind global warming, falling worldwide carbon dioxide levels and others.

Arizona Gets Two New Solar Installations
The University of Arizona and Luke Air Force Base will be home to two new solar panel power plants within the next year.  UA will host a 1.6 mega-watt plant while Luke upstages the university with a 15 mega-watt plant.

San Diego Schools will be Home to Solar Roofs
Schools in the San Diego Unified School District will lend their roofs to Amsolar.  In turn the schools can buy power at a significantly discounted rate.

Harvard Offers Online Sustainability Course
Executives and employees have even less time than before, so this online class offered by The Harvard University Extension School gives people a chance to learn at their own time.  The adjunct professor teaching the class expects as many as 130 people from 20 countries to enroll.

“Global Weirding”
With a cornucopia of strange weather events – everything from floods to fires to huge chunks of glaciers breaking off – trouncing the Earth this summer, can we deny global warming?  Or should we just call it global weirding?

There’s Some Good News, and Some Bad News
Global carbon dioxide levels fell 1.3 percent in 2009.  In a world that seems to be falling apart (see article above), it’s good to know that going green does have an effect.  Although the decrease could have been greater, Asian and Middle Eastern countries increased their output while Europe, Russia, Japan and the United States decreased their outputs.

Green tax incentives 2010

Go Green With Government Tax Incentives


The increased cost of energy, the country’s dependence on foreign oil and the environmental impact of current energy use have inspired many companies to “go green.” Federal and state governments are expanding tax credits, tax incentives and grant programs to create economic incentives to help companies produce and/or use energy from renewable sources. Here are a few tips to help your company “go green.” As with all tax advice, be sure to consult with an expert as these laws are subject to various limitations, phase-outs and other nuances.

Federal incentives and credits for general businesses

  • Energy-efficient commercial business deduction – Businesses can deduct up to $1.80 per square foot of space in new or existing buildings where they install interior lighting, HVAC or hot water systems.

  • Business energy investment tax credit – A 10 percent credit (for geothermal, microturbines or combined heat and power systems) or a 30 percent credit (for solar, fuel cells or small wind turbines) for alternative energy property designed to generate power for the taxpayer’s own use.

  • Alternative motor vehicle credit - A tax credit of up to $2,400 for the purchase of a qualifying fuel cell, hybrid, advanced lean burn technology or alternative fuel vehicle. There are various phase-outs depending on the make and model of the vehicle.

  • Plug-in electric vehicle credit - A credit of up to $7,500 (depending on type of vehicle) for consumers, including businesses and individuals, who purchase or lease and place in service a qualifying plug-in hybrid vehicle.

  • Qualified reuse and recycling property - Businesses can take the equivalent of bonus depreciation for qualified reuse and recycling property that otherwise would not qualify. The machinery or equipment must be used exclusively to collect, distribute or recycle qualified reuse and recyclable materials.

  • Fringe benefits for employees – Bicycle commuters are now allowed a $20 per month fringe benefit exclusion and the transit fringe benefit exclusion has been increased to $230 in 2009.


Federal incentives for specific manufacturers and developers

  • Energy-efficient appliance credit - Provides manufacturers of appliances a credit for the production of energy-efficient clothes washers ($75–$250), dishwashers ($45–$75) and refrigerators ($50–$200).

  • Energy-efficient new homes credit – Provides homebuilders and developers a credit of up to $2,000 for newly constructed homes that meet certain energy-efficiency standards.

  • Alcohol fuel (ethanol) producer credit - Businesses can take a 60 cent per 190-proof gallon credit for alcohol produced for use as a fuel or to be blended into fuel. An additional 10 cents per gallon small ethanol producer credit is available, as is a higher credit rate for cellulosic biofuel.

  • Biodiesel and renewable diesel credit - Provides up to a $1.00 per gallon credit for qualifying biodiesel and renewable diesel, similar to the ethanol credit. The incentive may be taken as an income tax credit, an excise tax credit or as a payment from Treasury.


Arizona-specific incentives

  • Renewable energy operations credit - Arizona enacted a refundable corporate income tax credit for qualified investment and employment in expanding or locating qualified renewable energy operations in Arizona.  The credit is available for tax years beginning on or after December 31, 2009 through December 31, 2014. The credit is 10 percent of the capital investment in projects meeting minimum employment requirements.


  • Pollution control equipment credit - Taxpayers may claim an income tax credit for 10 percent of the purchase price of property used in the taxpayer’s business to control pollution.  The credit applies to certain qualifying equipment that reduces the pollution resulting from the taxpayer’s operations in Arizona.  The maximum credit that a taxpayer may claim is $500,000 per tax year.

  • Ken Garrett is a partner and the tax practice leader in the Phoenix office of Grant Thornton, LLP. For more information, please contact Ken at 602.474.3456 or at ken.garrett@gt.com



Green News Roundup-Green Expo Conference & More

The Southwest Build-it-Green Expo & Conference was a great success in numerous ways. You might be wondering why, so let’s go over a few reasons.


  • One-Stop-Shopping: The BIG Conference showcased a wide variety of options for people looking to move their business, organization, or home in more sustainable perspective. Instead of having to hunt for each piece of a project individually, it gave participants the opportunity to get projects started and things moving in one setting.
  • Community Engagement:  Looking to become “greener?” The BIG Conference brought those who are new to the idea and those who are seasoned veterans together under one roof. This provided a great opportunity to make networking contacts, to further your education and understanding of sustainability, and to get involved in local ideas and projects. When people get involved, things start to happen.
  • Education: The impressive array of speakers and topics gave participants the ability to see some cutting edge projects, work, and innovative ideas first hand. Not only were the speakers excellent, they were readily available and happy to chat with the participants about any questions that came up. This was a “two for one” when looked at from a community engagement perspective, as well.
  • Business Development: While the recession is still a reality check, the BIG Conference illustrated that there is current opportunity within the marketplace for ideas, products, and services related to sustainability. I firmly believe that businesses and organizations tied to furthering issues related to sustainability – be it solar, water, wind, materials, et cetera – will be wildly successful in the coming years.
  • The Right Direction: Getting people excited to go green and to move in a more sustainable direction is always a great thing. The conference helps to demonstrate that being green isn’t scary or difficult. To the contrary, the BIG conference helps people understand that it’s easy, fun, and a smart idea – personally, professionally, socially, environmentally – to move towards and adopt ideas of sustainability.


 

hr_director_mega_biz

2009 Mega Business HR Director Of The Year Finalists

Brian BoylanName: Brian Boylan
Title: Senior Vice President of Human Resources
Company: JDA Software

Years with company: 4
Years in current position: 2.5
Company established: 1985
No. of employees in AZ: 360
No. of employees in HR department: 12
www.jda.com

Someone must be doing the right thing when a company’s own employees are its most effective tool for recruiting new talent. At JDA Software, that someone is Brian Boylan, senior vice president of human resources.

Boylan is praised for helping establish a culture at the Scottsdale-based technology company that allows employees to succeed professionally and earn recognition for their accomplishments through extensive award programs. Although JDA uses recruitment and assessment tools, ultimately job candidates who interview are impressed by JDA’s culture and the collaboration among its staff members. Employees feed the candidate pipeline by offering referrals for openings.
JDA’s culture is in part created by a performance-management program strongly supported by Boylan. The program emphasizes continuous learning plans, 20 hours of professional development annually and 360-degree reviews centered on leadership skills. Boylan also developed an emerging-leaders program that brings potential company leaders together for development and pairs them with senior-executive mentors.

Boylan and his staff understand that well-rounded employees need balance in their lives. Employees may work from home to take care of personal matters. The human resources department also offers FranklinCovey’s Seven Habits of Highly Effective People seminar to give employees the tools they need to find a balance between work and home. Onsite, JDA provides a wellness program, yoga and a Nintendo Wii game room.

Diversity is another hallmark of JDA’s culture. As a global company, JDA has a presence in many countries with varied cultures, all of which are reflected in the company’s workplace.


Tina HuffName: Tina Huff
Title: Executive Director of Human Resources and Organizational Development
Company: Pro’s Ranch Markets

Years with company: 3
Years in current position: 3
Company established: 1992
No. of employees in AZ: 1,945
No. of employees in HR department: 24
www.prosranch.com

As a growing upscale Hispanic grocery-store chain, Pro’s Ranch Markets takes extra steps to create diversity within its employee ranks and Tina Huff is deeply involved.

As executive director of human resources and organizational development for the Ontario, Calif.-based company, Huff works out of the regional office in Phoenix. Her department coordinates with several nonprofit agencies to provide work opportunities for refugees the organizations resettle in the United States. Huff’s department also offers jobs to Central and South American college students who work summers in the U.S. on visas. Onsite English-as-a-second-language classes are offered through Scottsdale Community College.

With more than 20 years of human resources management experience in several industries, Huff has a variety of responsibilities with Pro’s Ranch. This year, she directed development of the Ranchie Steps Program, which provides job-training modules and establishes compensation structures for each department companywide. This program shows how employees can grow professionally within Pro’s Ranch. In Arizona this year, Huff rolled out a retail management certificate program, tuition assistance, an apprenticeship training program for bakers and the ESL classes.

Pro’s Markets has been growing the past few years, opening two new stores in Arizona and expanding into Texas and New Mexico. Huff worked with the company’s operations and advertising departments to craft a plan for bringing in new staff. An internal talent assessment offers new employment opportunities for existing employees. Job candidates are recruited from local nonprofit and employment associations and through job fairs that attract as many as 5,000 people.

ValleyForward

Valley Forward: Lynn Paige

Lynn Paige
CEO
PerfectPower
www.perfectpowernetwork.com

When Lynn Paige, CEO of PerfectPower in Phoenix, first joined the company six years ago she lacked a background in solar energy. But it didn’t take her long to see the light.

She was brought in to grow the company, which designs and installs solar energy systems, focusing primarily on Arizona.

“I quickly fell in love with the solar industry,” Paige says. “It’s been a six-year crash course.”

Paige, who has been a member of Valley Forward since 2005, brought an accounting degree, an MBA and some 30 years of business experience to PerfectPower. She established solid management systems, hired a professional sales team, facilitated an alliance with a professional training group and instituted strict guidelines for working with commercial and residential clients.

Although Arizona is the sunshine capital of the country, it’s also one of the nation’s heat capitals, which presents a bit of challenge for solar, as well as other energy industries.

“Heat de-rates a solar system, which means it produces less electricity than the same system would in, for example, Kansas City,” Paige says. “Our big goal at PerfectPower is to figure out a way to design a system around that heat factor that will produce more kilowatt hours than it would otherwise. We’ll be using the sun to do that.”

Yet another challenge is convincing consumers that solar energy is cost effective.

“People do not believe that solar is less expensive than producing electricity through nuclear or coal plants,” Paige says. “It pays for itself in a short time with federal and utility incentives and tax credits. There’s really no excuse today for anyone not to be using solar.”

For a commercial customer, solar would pay for itself in 18 months. For residential, depending on the size and type of system, the break-even point is three to seven years, Paige says.

“If you’re not using solar, at the end of seven years you’re still paying the utility company,” she says. “With solar, at the end of seven years you could have all of your energy for free. It’s a no-brainer. I’ve had solar at my home for three years and I have no energy bills. I can’t tell you how liberating that is. It’s kind of heady to be your own little power plant. It’s really a neat thing.”

What’s more, solar improves Arizona’s quality of life.

“It’s cleaner and it produces a steady line of electricity — no sporadic spikes,” Paige says.

Recycling Bins

Green News Roundup-Greener Building, Education & More

For those of you involved in the green/sustainability arena, you are probably still decompressing from the impressive event that was the Greenbuild 2009 Conference and Expo that was held last week. With over 27,000 attendees, the Phoenix Convention Center, Chase Field, local businesses, and the entire community were host to a remarkable event.

Produced by the United States Green Building Council (USGBC), the conference aimed to bring leading minds, businesses, and the community together around the premise of green building, education, and professional networking.

During my time visiting the impressive conference, some of the following thoughts came to me:

  • The Gargantuan Expo: The expo (which was an exhausting feat to see all of it in detail) was filled with an incredible array of vendors showcasing their particular products that contribute to green buildings and lifestyles. There are – it is not a stretch to say – innumerable creative manners in which a business or individual may contribute towards a “greener” building, property, and subsequent environment.
  • Intellectual Development and Discussion: There were several intriguing presentations by industry experts, academic researchers, community members, and perspicacious interdisciplinary practitioners. The presentations that blended elements of “green” building/design with a social cohesion element had particular merit.
  • Keynote Speeches: Nobel prize laureate Al Gore gave the keynote address on Wednesday evening at Chase field. While much of Mr. Gore’s speech was information that many of the participants may have already heard via self subscription to the “green” lifestyle, he did offer a particularly compelling charge to the audience. It was a call to arms advocating that the audience move beyond discussing green tactics and immediately work to make a substantive difference, now.

Given the participation of the conference, I would challenge each individual to consider some of the following points:

  • How do we, as individuals who have a particular interest in this field (and its success), bring the tenants of green building to those who need it most? What are the ways in which we are enabling and setting up our communities – of all socioeconomic and demographic representation – for success? Are the technologies and methods we recommend commensurate with a practical application to those who need it most?
  • What are the implications of the commoditization of green building ideals? While there are too many integrated issues to list here, how could the exhibitors at the Greenbuild expo make a difference in areas of abject poverty and subsistence-level construction (i.e. the applicability and practicality of technology towards the greater good)?
  • Given the awesome level of experience and mental aptitude that accompanies these conferences, what type of demonstrable impact can they have on the community in which they are held?

I’d love your thoughts, reactions, and recommendations on what you thought of Greenbuild and how to make conferences, like this one, better in the future.

Patent

Failing To File Patent For New Technology Could Cost Company More Than Money

It is arguably one of the most exciting moments for a technology entrepreneur — seeing that invention for the first time. Whether it’s a new software program, mechanical device or a breakthrough biotech discovery, the feeling is always the same, pure elation. If you’re a technology entrepreneur you know the feeling. You spend months, possibly years, working toward this moment. Now that you’re here, you’re ready to turn this exciting innovation into a business. But before you take that costly leap of putting together a company and going to market, consider one very important step that can save you, and your company, everything you’ve worked for — the elusive patent.

Who needs it?
Many technology companies and entrepreneurs initially think they don’t need, or just can’t afford, patent protection at the very initial stages of their business development. “No one else could develop this right now in the exact same way we have,” or “It’s already protected by trade secret laws,” or “It’s going to cost a lot of money right now, so we’ll wait until the product is making us a profit.” The truth is, not filing a patent to protect your proprietary technology could cost a great, great deal more in the end, and might even make your company less attractive to investors and business partners.

What kind of companies should file for patent protection?
Companies in a wide variety of technology fields increasingly rely on patents as a key tool to protect their technology. For example, companies in the high-tech industry (software, semiconductors, etc.), the low-tech industry (consumer gadgets, etc.) and the life sciences/biotechnology industry (pharmaceuticals, medical devices, etc.) are spending more and more money on research and development and, thus, are increasingly looking to patents as a mechanism for protecting this expensive investment.

If you’re a typical technology startup, you will likely need to find early-stage, mid-stage and, eventually, late-stage investors for capital to continue to fund your research and development, and pay the tremendous costs associated with commercializing your products and services. Every kind of investor, from angels to venture capitalists, will scrutinize the adequacy and strength of a company’s intellectual property assets as a part of the investor’s decision to invest in that company. More than ever, investors are expecting a company to have either filed for patent protection or already have some patents. Another significant ramification of failing to obtain adequate patent protection is that investors may place a significantly lower valuation on your company. Thus, taking steps to file for patents, and then eventually obtaining patents, is often a critical and significant step in proving credibility to any kind of investor.

Another major benefit of patent protection is using your patents as a legal mechanism to protect your company’s most critical proprietary technology from infringement by competitors and others. Competition is fierce in the technology and biotech/life sciences industries and your competition may knowingly, or inadvertently, use your technology to gain market share. Your patent is often the most valuable tool to combat these serious situations and could be a key factor that differentiates your company from your competition.

How patents pave the way to new markets?
Many technology companies, particularly startups, are not in a position to commercialize their technology in every country in the world and in every “field of use.” A solution to this problem is to find business partners who can be given a license to use these technologies in other markets, both here in the U.S., and globally. Taking steps to file for patent protection can increase your company’s ability to find proper licensees who will scrutinize the technology and opportunity as much as any investor. Patent protection can also increase your negotiating leverage when entering into contracts with licensees and could have a significant impact on the level of royalties and other compensation that licensees agree to pay you for the use of your technology. Indeed, potential licensees who still want rights to your technology very often negotiate significantly lower royalty payments if you have failed to obtain proper patent protection because the licensee deems your technology to simply be unprotected “trade secrets.” As a bottom line, taking steps to obtain proper patent protection can potentially increase the revenue stream to your company from others who want to use your technology.

chart increase, AZ NASDAQ listed companies

An Analyst’s Look At How Arizona’s Nasdaq-Listed Companies Are Faring This Recession

Arizona has 52 Nasdaq-listed companies and the performance of those with the most capitalization during this economic downturn has been fairly good.

In early June, Stephen Taddie, managing member of Stellar Capital Management in Phoenix, reviewed the top 10 Arizona Nasdaq companies using Thomson Analytics as his data source. Those companies comprise nearly all the capitalization for Arizona Nasdaq-listed firms. They are Apollo Group, First Solar, Microchip Technology, PetSmart, ON Semiconductor, P.F. Chang’s, Amkor Technology, Mobile Mini, JDA Software and TASER International.

There was positive news concerning stock performance and internal company performance for the group as a whole.

Looking at stock performance for the three-month period from April 5 through June 5, Taddie found that “90 percent of the Arizona companies outperformed their peer group as a national comparison and all by a significant margin.”

Taddie next looked at stock prices for the year to date through May 31. While the Standard & Poor’s 500 stock index was approximately even for that period, seven of the top 10 Arizona companies outperformed the index by a fairly wide margin, Taddie says. Those that did not tracked the index closely, he adds. The seven companies were First Solar, Microchip Technology, PetSmart, ON Semiconductor, P.F. Chang’s, Amkor Technology and JDA Software.

“Apollo Group, the largest of the top 10 as measured by market capitalization, fared better than the rest through the first quarter of 2009, but was surpassed by the others as investor confidence rose significantly in April and May, encouraging investors to look past the current economic data and the financial statements of smaller, less capitalized companies to the earnings potential many of these companies will have in a more stable environment,” Taddie says.

Taddie also reviewed a compilation of analysts’ estimates for internal company performance for 2009. As a group — not as individual companies — analysts estimate revenue for the top 10 will be flat this year, up just .49 percent, but that it will grow 13.5 percent in 2010.

“Over the last six months, we saw many analysts lengthen the duration of the downturn but also decrease its severity,” Taddie says. “If we break it down quarter by quarter, the data reflect a fairly dismal first half of 2009, followed by a fairly decent last half of 2009.”

Estimates for next year’s revenue vary widely, Taddie says, because it is difficult to measure the impact of federal stimulus packages and significant cost-cutting measures in many industries.

“A significant capital-expenditure decline has frozen budgets,” says Taddie, who also is a member of the Western Blue Chip Forecast panel for the W.P. Carey School of Business at Arizona State University. “One firm’s cost reduction is another’s revenue shortfall and that has been trickling down the supply chain.”

Taddie says the data paint a picture in which Arizona firms, like many other companies across the country, are trying to preserve shareholder value by more closely aligning capital expenditures with expected revenue growth, or the lack thereof.

“Typically, the larger the company, the more apt they are to take a bet and invest into a downturn, so when the tide turns, they capture more market share,” Taddie says. “The smaller the company, the less apt they are to do that because they can’t take that risk.”

Managing expenses and growth in an environment where revenue expectations are “jumping all over the place” is a challenge, Taddie says.

“References to this period will show up in economics and business-management textbooks for quite some time,” he says. “The data is showing that the Arizona top 10 are faring at least as well as other companies and, when compared to stock-price performance so far this year, better.”

Green Advisers on a Mission

Green Advisers On A Mission

Name an industry and you’ll find a consultant — investment, finance, marketing, and so forth.

You can add eco-consulting to that list.

After reading an interesting article from the New York Times about eco-consulting, I was curious to see exactly what this new type of profession would encompass.

Is it a passing phase or a legitimate way to better educate citizens about how to live a greener life? To find out more, I contacted Valley eco-consultant Linda Benson. She trained to become an eco-consultant with Green Irene, a company founded by a husband-and-wife team that now trains consultants throughout the country.

After contacting Green Irene for additional information, I received an e-mail from Jessica Clark, marketing manager at Green Irene, who supplied me with the following statement:
“Green Irene is on a mission to ‘Green Our World, One Home And Office At a Time.’ Green Irene trains independent, authorized distributors of Green Irene consulting services and recommended green home and office products. Through these services, eco-consultants assist neighbors, family, employees and coworkers implement proven green solutions in their homes and small businesses, and starts them on the path to a healthier, safer and more sustainable lifestyle.
As of July 2009, Green Irene has more than 425 eco-consultants in 45 states offering Green Home Makeovers, Green Office Makeovers, GO GREEN Workshops and many of the best green home and office products available.”

Guess this isn’t a phase after all.

Benson has been in the interior design industry for three years and her specialty is green, sustainable and universal design, so becoming an eco-consultant was a “good fit.”

She goes on to explain various initiatives offered by Green Irene, including but not limited to, green makeovers as well as “actual blueprints for converting your living, home products and just the way you carry out life on a daily basis in a green and sustainable manner.”

“I enjoy the challenge of re-using and re-engineering furniture and soft goods (bedding, window treatments) from items my clients already have,” Benson adds “I also love educating them on how to save money by making small changes to their lifestyle, such as changing light bulbs to CFLs (compact fluorescent lamps) in a main living space, and using proper window treatments to hold down the energy loss in a room, just to name a few things.”

green consultingThis sounds like a great idea for people who are trying to make a positive change to better the environment and aren’t really sure how to begin. As Benson points, out the changes don’t have to be costly, and customers can start small and work their way up to more significant changes. The consultations can be done for private residents as well as commercial companies.

Benson has a positive outlook on the future of eco-consulting, not only locally, but also globally.

“I see eco-consulting encouraging people to save on resources, giving motivation to explore new design modes and methods, pushing people to think outside of the box, helping people who spend hard-earned money to use it more efficiently and to encourage saving,” she says. “I see eco-consulting bringing people to the outdoor style of living again by cooking more during the pleasant sunny days. I even see eco-consulting prompting healthy eating and encouraging more community activities again!”

www.greenirene.com

Law Review - Arizona’s Legal Landscape

A Look Back Finds Substantial Changes To Arizona’s Legal Landscape

Rapid-fire change has become the status quo in the legal and business community over the past 25 years. This change is particularly apparent to me, as my firm, Fennemore Craig, will celebrate its 125-year anniversary in Arizona next year, and I have practiced law for more than three decades.

One of the most pronounced and positive changes over the years has been who becomes a lawyer. Through an increased emphasis on diversity, law firms and legal departments have become places of opportunity for people of all backgrounds, reflecting the diverse nature of our communities and clients. We can do better, but the profession has made significant strides in the area of diversity since the 1980s.

While the face of the state’s law firms has changed, so has their size. Not too many years ago, the largest firms in the Southwest were still relatively small, with client bases dominated by locally headquartered companies and financial institutions. Since the 1980s, the region has lost quite a few headquarters, yet law firms like Fennemore Craig have benefited from strong economic growth in the Sun Belt, with Phoenix emerging as a regional business hub.

Notwithstanding the current economic downturn, the long-term economic prospects for the region promise continued opportunity. This economic strength has led to growth among several of Arizona’s home-grown firms and it also has attracted firms with their principal offices in other states. In turn, Arizona firms have responded with a growing platform of offices and lawyers expanding into other markets. The influence of technology in changing the legal profession over the past 25 years cannot be overstated. The pace and volume of work for us and for our clients have increased exponentially. Research, which is central to the law, has been almost totally automated. While successful lawyers still must be good communicators and excellent practitioners, information flow occurs literally around-the-clock. Waiting to work on a transaction or litigation based on deliveries through the U.S. Postal Service has gone the way of the typewriter and the mimeograph machine. Transmittal of documents, filings and other activities occurs primarily on an electronic basis and the demand for quick responses has increased accordingly.

The professional aspects of practicing law have shifted as well. Training is better than ever, though time pressures mean some of the one-on-one mentoring and discussions with senior lawyers that characterized much of my early professional learning curve are more rare.
As a credit to Arizona, it is also important to note that the state’s institution of the merit selection system for its judges created a better, more professional judiciary. Merit selection has improved both the state’s justice system and the practice of law here in terms of professionalism, fairness and quality.

One of the appealing aspects of the legal profession is its strong tie to tradition. We must discern when tradition is fostering positive values, rather than preserving the status quo for its own sake. The positive values inherent in the profession 25, even 125 years ago, remain true today regardless of the changes in pace, volume and complexity in the practice of law. Then as now, we have the opportunity and responsibility to help people solve problems and get things done.

money, cash, hundred dollar bills

This Isn’t the First Crisis The Valley’s Banking Industry Has Faced

The Valley has come a long way over the past 25 years, and the banking and financial sector is no exception. Challenges, crises and legislation brought about dramatic change that has created a new era in banking and finance. In the mid-80s local banks dominated the sector, while regional and national banks were nonexistent. The Valley was home to the “big three” — Valley National, First Interstate Bank of Arizona and The Arizona Bank.

The financial sector was real estate driven, with a considerable concentration in housing and commercial real estate development. Second to real estate were the “Five C’s” of Arizona’s economy: climate, cotton, citrus, cattle and copper.

The savings and loan and real estate crises of the late-80s were the turning point in the Valley’s banking sector. At a time when Arizona’s “big three” were suffering, large banking corporations invaded. Bank of America’s first “real” presence in the Valley was assimilating five different savings and loans in the state.

In summary, there have been many milestones over the past 25 years that have shaped the banking sector. Such milestones include sustaining itself through the S&L crisis and the severe commercial real estate downturn of the late-80s; recovering from the infamous Lincoln Savings and American Continental debacle; weathering the “dot-com” implosion of 2000; and passing the Interstate Banking Act that led to dramatic industry consolidation of local banks into regional, national and global banking organizations. More recently, the securitization boom in both the residential and commercial real estate market revolutionized real estate lending.

Today’s “big three” — Chase, Wells Fargo and Bank of America — control the vast majority of deposits statewide and a much more dramatic concentration of banking resources overall. But more importantly, small and mid-size banks have reemerged. 
There is also now more proactive leadership in the business community.

Arizona and the Valley have a more diverse economic base due to the dramatic progress of our investment in education, as well as the high-tech, defense, life sciences, health care, biotech, telecom, optics, hospitality, entertainment and transportation industries. We now have an “alignment” of stakeholders, including the public, business, academic and philanthropic sectors, and therefore stronger initiatives for more diverse economic development, such as sustainable systems, solar and renewable energy and land management.

That said, in 2009 we are again faced with many economic challenges that will no doubt continue to shape our industry and affect how we operate. Banks need to grow wiser and smarter in serving their communities and Arizona’s businesses. We are resource constrained from a state revenue standpoint and by expenditures driven by our phenomenal population growth and federal-mandated programs. Arizona is a high-growth state and we need to strike the right balance between infrastructure “catch-up” and smart and balanced growth. The banking industry has and will continue to support a more knowledge-based and service-oriented economy.

What does the future hold for the banking and financial sector? Banks will need to play a transformational leadership role in public issues, specifically economic diversification and development, as well as public finance. The industry must become a recognized leader for innovative approaches to capital formation and connecting intellectual capital with financial capital.

We must also promote a diverse array of financial institutions from small local community banks and mid-size niche banks to larger regional and global institutions that promote cross-border trade finance and strategic alliances.

There is no doubt that the next 25 years will bring as many challenges and reforms as we have overcome in the past, but our state’s banks will regain their strength; the strong will survive, consolidate the weak and prosper with our state’s growth. And as Arizona’s banking industry continues to grow stronger and smarter, we foster confidence as we reaffirm the leadership role in Arizona’s economic foundation.

first job john j. bouma

First Job: John J. Bouma, Snell & Wilmer

John J. Bouma
Chairman
Snell & Wilmer

Describe your very first job and what lessons you learned from it.
My first job was working for my father at the Rialto Theater in Pocahontas, Iowa. It was a very nice, small town theater. I ushered guests, changed the names of the movies on the marquee, switched out movie posters, took tickets, sold tickets, and occasionally ran the projectors. I learned how important it is to be on time, to be courteous and attentive to customers, and to take into consideration people’s individual circumstances. People, and particularly kids, who did not have the ticket price would often get in free.

Describe your first job in your industry and what you learned from it.
My first job in the legal field was as a brand new lawyer at a law firm in Milwaukee. After a few months, I went on active duty as a lieutenant in the Army Judge Advocate General’s Corp (JAG).  Through both jobs, I learned the importance of listening and of preparation. I learned to try cases in the Army, first as a defense lawyer, and then as a prosecutor.

What were your salaries at both of these jobs?
During my years at the Rialto Theater my father gave me an allowance. I may have received an additional quarter or two on the nights I changed the marquee or ushered.
The law firm I joined in Milwaukee following college was one of the top-paying firms in the country at that time, paying new associates a yearly salary of $7,800.

Who is your biggest mentor and what role did they play?
My biggest mentor was my father. He had run away from school in the sixth grade, but became a very successful businessman. He encouraged me in sports, throwing or catching baseballs endlessly, encouraged me to go to law school (on the principle that since I argued so much, I should get paid for it), and then encouraged me to settle in Arizona. My father taught me to say what I think, and to stick to my position if I believe I am right.

Mark Wilmer was also an important mentor to me. He was an outstanding trial lawyer and a real gentleman. From working with him and trying cases with him, I learned that being gentle and courteous is not inconsistent with being a great trial lawyer.

What advice would you give to a person just entering your industry?
It is crucial to establish a reputation for absolute honesty and integrity that can never be compromised or subject to question. Beyond that, if you don’t recognize law as a calling –– an opportunity to help people solve problems –– rather than just a way to make a living, you are in the wrong profession.

If you weren’t doing this, what would you be doing instead?
I would be involved with some nonprofit or public enterprise where I could keep my mind active and where my background and experience could be helpful to the organization. I would also devote even more time to a variety of outdoor activities and travel with my wife and family.

Real Estate - A Changing Landscape

Some Of The Troubles Facing The Real Estate Sector Today Ring Familiar

The landscape of the Valley’s real estate market in the mid 1980s was vastly different from today, but, as most developers are painfully aware, many of the challenges are markedly the same. What is different today is the solid foundation that has been built over the past 25 years, which has helped the Valley remain an extremely attractive place for businesses and residents to call home.

Twenty-five years ago, the biggest challenge in the market was tied to the fact that we had virtually no transportation infrastructure. Commuters today might have more traffic to contend with, but at least we have more freeways. In the mid-80s, drivers had long and incredibly laborious commutes to an employment base that was quite limited in variety. Of course, 25 years ago, a commute into Phoenix from Surprise, Goodyear, Gilbert and El Mirage was unheard of.

The Valley’s expanded transportation infrastructure has opened up all of these new submarkets and allowed for an effective and functional distribution of goods and population. The I-10 was finally completed through Downtown Phoenix in 1990. The Scottsdale Airpark has grown into the second-largest office submarket in the Valley. Highway 51 and the loops 101 and 202 were constructed.

Our metro area has now grown so large in size and population that companies and retailers have multiple locations and stores. Larger warehouse facilities were built on the west side of the metro area near the I-10 transportation corridor. We began to see mixed-used projects of a large scale. The Phoenix industrial market benefited from steady job growth, great positive inward migration and affordable housing.

In addition, the Arizona Department of Real Estate has played a major role in planning future growth, establishing land values, encouraging competition and adding substance to our educational trust fund. The growth of local, competent developers in every development discipline has also contributed to shaping the sector.

But the major challenge today, like that of 25 years ago, is an abundance of available space coupled with a very low level of tenant activity. Based on typical annual absorption rates, new speculative construction will take another two-to-three years to occur. Dramatically reduced valuations are another major problem affecting all of commercial real estate. No one knows what anything is really worth. This, coupled with the lack of capital for permanent financing, has brought development to a halt and continues to negatively impact values. Add high unemployment, slow retail sales and difficulty in home sales, and you have a very long pause that seems vaguely familiar to the situation of the 1980s.

However, pauses end. There is definitely a bright future ahead for Valley real estate. Unlike the 1980s, today we have excellent infrastructure we can build upon to rise out of this crisis much more quickly and effectively. What’s more, people will still want to move here. We will benefit from relocated businesses and jobs as other states tax and regulate their economies to the extreme. This slowdown is temporary. But we have to remember that Arizona will continue to attract businesses and residents, and we must stay poised to develop opportunities for them as they become more available.

Wooing businesses to AZ in the recession

Despite Tough Times, Economic Development Groups Continue To Woo New Businesses To Arizona

Economic development experts in Arizona hope to parlay the state’s convenient geographic location, and even a stagnant housing market, into attracting new businesses.

Toss in relatively low taxes, a freeze on new regulations and a well-honed reputation as a business-friendly state, and recruiters have a tool box full of reasons why businesses should consider relocating to Arizona.

But that’s not all the economic development agencies tout. Local experts know that businesses looking to relocate are interested in those intangible quality-of-life issues: an available and educated work force, a higher-education community that excels in research and churns out highly qualified workers, and a relatively low cost for starting up and doing business.

Television commercials are generally cost-prohibitive, officials say, leading them to rely heavily on the Internet for their recruitment efforts. Feature articles in national trade publications also represent a low-cost way of spreading the Arizona story.

Two of Arizona’s largest economic development agencies — the Greater Phoenix Economic Council (GPEC) and Tucson Regional Economic Opportunities (TREO) — are collaborating on a campaign to lure California businesses to Arizona.

Scarlett Spring, GPEC’s senior vice president of business development, says her team makes targeted trips to California at least once a month, with specific emphasis on the Bay Area, Los Angeles and San Diego. Often, GPEC invites local mayors along to give recruitment efforts an official flavor. Bringing mayors, Spring says, gives recruiters leverage and “opens doors that might not otherwise be open.”

The GPEC message to California?

“Arizona has a business-friendly environment and a reputation of having lowered taxes in some shape or form for 10 consecutive years,” Spring says. “It’s a lower-cost environment for their employees, whether through workers’ comp, competitive wages or health care insurance. Those are the operational costs that a company looks at when considering a financial move or expansion.”

Noting that virtually every phase of running a business is more expensive in California, Spring adds, “What we’re doing is trying to position Arizona as being complementary to the California marketplace.”

DGPEC also invites businesses to Arizona for special events. For example, last November biotech and solar companies from the Bay Area were hosted for a weekend in the Valley. The visit included attending a game between the Arizona Cardinals and the San Francisco 49ers. Two of those companies are close to moving to Arizona, Spring says.

Laura Shaw, senior vice president of marketing for TREO, agrees with the strategy of taking advantage of Arizona’s location. California businesses struggling under mounting operating costs have the ability to move to Arizona and still access California markets.

TREO targets such industries as aerospace, defense, biosciences and alternative energy, and only meets with companies that have been pre-qualified as likely candidates for relocation.

“Research shows that labor drives all market decisions — whether a company can find the labor that fills their needs,” Shaw says. “We focus on matching our assets with a company’s needs.”

Despite the national perception that Tucson is a low-wage community, TREO presses for higher-paying jobs.

What the Tucson area offers is a high-growth Southwestern region situated at the doorstep of California and Mexico, with young talent graduating from the University of Arizona. Tucson is also in the heart of one of the most heavily traveled trucking networks, linking Mexican markets to the California coast.

Meanwhile, the Arizona Department of Commerce, though on a limited basis because of budget cuts, continues to participate in trade shows and foreign direct investment events in Canada, Mexico and Europe. Commerce officials and hired contractors work with foreign companies that are interested in expanding to Arizona. They also help match Arizona firms with foreign customers.

Kent Ennis, interim director of the Commerce Department, confirms that a tight budget makes recruiting more difficult, yet the agency reaches out to major industries, including bioscience and solar. In fact, the Commerce Department led an Arizona delegation to a national convention of bioscience technology companies in Atlanta on May 18.

In addition, the Commerce Department assisted in the relocation of Spain’s Albiasa Solar, which in April announced plans to build a $1 billion renewable solar energy plant near Kingman. The project will create 2,000 construction jobs and more than 100 permanent positions when it is completed in 2013, Ennis says.

The Arizona Association of Economic Development, which is more of a trade organization representing Arizona firms and does not embark on recruiting efforts, nevertheless gets its share of contacts from businesses considering a move to Arizona, says Bruce Coomer, executive director of AAED. But first, he makes sure to sing Arizona’s praises. He mentions the usual advantages, but adds an unlikely twist.

Because our housing market crashed,” he says, “that’s a plus. Now there is affordable housing if a company wants to move here, especially from California. Their employees can really get some bargains.”