Tag Archives: First Solar

Arizona

Taliesin West Gets Solar Power System

The Frank Lloyd Wright Foundation today inaugurated a new 250-kilowatt solar photovoltaic (PV) power system donated by First Solar, Inc. (Nasdaq: FSLR) which will help power the historic Taliesin West campus. The commissioning marks the successful completion of the first phase of the Energizing Taliesin West initiative, a pioneering effort to transform the entire National Historic Landmark Taliesin West site into a “net zero” energy customer, producing as much energy as it consumes annually, while maintaining the historic and architectural integrity of the site. The comprehensive project, led by energy efficiency consultant Big Green Zero, is focused on the twin goals of maximizing the campus’ energy efficiency through improved lighting, insulation, climate controls and other techniques while also generating renewable energy on-site.

Many local Arizona companies donated materials and labor to make the project possible. Tempe-based First Solar designed the system and donated approximately 4,000 of its advanced thin-film solar panels as well as Engineering, Procurement and Construction (EPC) services. Power-One donated an Aurora PVI-Central-250kW inverter manufactured in nearby Phoenix and the associated performance-monitoring equipment for the project, and Klondyke Construction donated electrical construction services. Other companies with operations in Arizona that contributed include Buesing Corp. (structural post installation), OMCO Solar (panel mounting structural materials), CLP Resources (structural and modular installation labor), Rummel Construction (site grading), Rapid (electrical equipment), Syntech (surveying), and Oldcastle (precast inverter pad). Other donors included Highway Safety Corp. (structural steel posts) and Olson Motor and Control Co. (electrical equipment).

The entire solar power system is engineered to provide maximum renewable energy with minimal impact. The ground-mounted First Solar PV system at Taliesin West is expected to generate more than 500 megawatt-hours per year of emission-free electricity with no water or waste, displacing more than 300 tons of carbon dioxide annually, the equivalent of taking more than 50 cars off the road. Native cacti and other plant species which were removed during construction will be transplanted throughout the project site, and the entire site will be seeded to restore native vegetation. Visible portions of the mounting system have been painted to help blend into the desert environment. In addition, the solar modules at the site are covered by First Solar’s industry-leading, prefunded module and recycling program, under which the company will collect and recycle its modules at no additional charge.

“We are excited to have partnered with Big Green Zero and First Solar to complete the first phase of Energizing Taliesin West and are on track to making a world-famous National Historic Landmark site entirely self-sustaining,” said Sean Malone, CEO of the Frank Lloyd Wright Foundation. “As we continue to move forward with this endeavor we remain consistent with the values of Taliesin West and advancing the Foundation’s mission to preserve and expand the heritage of Frank Lloyd Wright. We will continue to educate and empower new generations of innovative thinkers to address the critical issues of sustainability and healthy living environments.”

“We are very proud to be a part of this historic landmark, and we are confident the integration of clean solar power into Taliesin West will help advance the legacy of Frank Lloyd Wright and educate visitors from around the world about renewable energy,” said Jim Lamon, First Solar’s Senior Vice President of Engineering, Procurement and Construction and Operations and Maintenance. “This project represents a microcosm of the solar industry in Arizona, and we are gratified that many of the same partners we work with to build utility-scale projects like Agua Caliente and APS Paloma joined in to support our community and make this vision a reality.”

Bob Roth, CEO of Big Green Zero, explained that the Energizing Taliesin West™ project started with a 2011 energy audit which found the site’s nearly $200,000 energy bill could be reduced 51 percent through energy efficiency improvements and balance could be offset by renewable solar energy. As a result, Big Green Zero proposed developing the Energizing Taliesin West™ program to demonstrate best-of-breed energy efficiency and solar energy technologies at this profoundly historic property.

“Today, we are celebrating this absolutely beautiful 250 kilowatt solar system,” Roth said. “And in the pursuit of energy efficiency, this is just the beginning. Over the next several years, the Energizing Taliesin West team will be installing and experimenting with additional energy efficiency technologies. Our goal is to make Frank Lloyd Wright’s Taliesin West a Big Green Zero.”

For more information on Taliesin West visit their website at www.franklloydwright.org.

first solar - new ceo

First Solar Appoints Hughes CEO

First Solar, Inc. announced that James Hughes has been appointed Chief Executive Officer. Hughes succeeds Mike Ahearn, First Solar’s founder and Chairman, who has been serving as interim CEO since Oct. 2011. Hughes joined First Solar in March as Chief Commercial Officer. Ahearn will continue in his role as Chairman of the Board.

“Jim has been instrumental in developing the strategic plan that will enable us to compete and win in this new era for the solar industry, and it became clear he is the right person to lead the execution of that plan,” said Ahearn. “Jim brings a wide range of experience that will be invaluable in leading our organization, having owned and operated utilities, built power projects, cultivated partnerships and led profitable growth in a wide array of key markets around the world.”

“I am excited for this opportunity to lead First Solar into a new era for the industry,” said Hughes. “First Solar is unrivaled in terms of talent and experience and has the premier platform from which to implement solar power at a meaningful scale around the world. The rapid cost reductions in the industry position solar at the threshold of the mainstream energy markets, and we are well-positioned to capitalize on that opportunity.”

Hughes has nearly 20 years of experience in the global energy industry. Before joining First Solar, he served as the CEO of AEI, which owned and operated power distribution, conventional and renewable power generation, natural gas transportation and natural gas distribution businesses in 19 countries. Prior to that, he was President and Chief Operating Officer for Prisma Energy.

Hughes earned a juris doctor from the University of Texas at Austin School of Law, a Certificate of Completion in international business law from Queen Mary’s College, University of London, and a bachelor’s degree in business administration from Southern Methodist University.

For more information on First Solar, visit First Solar’s website at firstsolar.com.

First Solar 2 vacancies for board members

First Solar Expands Board Of Directors

First Solar, Inc. announced that it nominated two new candidates for election to the Company’s Board of Directors and that it has expanded the size of the Board to eleven from nine, creating two vacancies as it continues to seek additional independent directors. As detailed in its Proxy Statement, which was filed today with the Securities and Exchange Commission, First Solar nominated George “Chip” Hambro and Richard “Rick” Chapman to stand for election to the Board at the Company’s Annual Meeting of Stockholders, which will be held on May 23, 2012. Chapman will serve as an independent director.

To fill the two new vacancies, First Solar has retained an executive search firm to help identify candidates with experience that will support the company’s strategy to compete as a vertically integrated provider of photovoltaic power plants in energy markets that are sustainable without subsidies.

The company also announced that José Villarreal, a director since 2007, will retire from the Board due to personal commitments and will not seek reelection at the Annual Meeting.

“We are pleased to be adding two distinguished candidates to the First Solar Board of Directors. Chip and Rick are both knowledgeable about First Solar’s strategy and operations and have diverse experience and expertise that will make them valuable additions to our board. We are also committed to further expanding our board by adding two additional independent directors to support our long-term strategic plan,” said Mike Ahearn, First Solar’s Chairman and Interim CEO. “On behalf of the First Solar Board of Directors, I extend my gratitude to José, who has been an engaged and dedicated Director for the past five years.”

Chapman, 58, is CFO of Walton Enterprises, Inc., where he has worked since 1983. In his current capacity, Chapman oversees all aspects of the Walton Family Office in Arkansas. Chapman currently serves as a director on the boards of the Arvest Bank Group; the University of Arkansas Foundation, where he serves on the Executive and Finance Committees; and the Razorback Foundation, where he is a member of the Investment Committee. Chapman was previously a member of the Board of Managers of First Solar Holdings, LLC prior to the Company’s initial public offering and JWMA (formerly True North Partners, L.L.C.), an equity investment firm. Chapman earned a B.S.B.A. in Accounting from the University of Arkansas and is a Certified Public Accountant.

Hambro, 48, previously held various positions at First Solar from June 2001 through June 2009, including serving as Chief Operating Officer from February 2005 through May 2007. Prior to joining First Solar, he held the positions of Vice President of Engineering & Business Development for Goodrich Aerospace from May 1999 to June 2001 and Vice President of Operations for ITT Industries from February 1997 to May 1999. For the last five years, Hambro has been a director of both the Toledo Zoo and Imagination Station, Toledo’s children’s science museum. Hambro currently serves on the board of directors of Soladigm, Inc., a developer of next-generation green building solutions. Hambro graduated from the University of California at Berkeley with a B.A. in Physical Science (Applied Physics).

For more information on First Solar, visit First Solars’ website at firstsolar.com.

First Solar

First Solar Lays Off 2,000 As Demand Wanes

Tempe-based First Solar Inc. will lay off 2,000 workers and close its factory in Germany following a collapse in solar panel prices that has erased the industry’s profits and forced some smaller companies into bankruptcy.

America’s biggest solar manufacturer said the layoffs amount to 30 percent of its global workforce. It’s an about-face for a company that doubled the number of employees at the Frankfurt, Germany, plant to more than 1,200 just last year. First Solar will also shutter some production in Malaysia. It plans additional job cuts in Europe and the U.S.

“The solar market has changed, and so must we,” Mark Widmar, First Solar’s chief financial officer, told analysts in a conference call.

The price of solar panels, which generate electricity from sunlight, has plummeted recently. An influx of Chinese competitors has led to a rapid buildup in supply. At the same time governments in Europe, the biggest market for solar power, are reducing generous subsidy programs that had fueled demand. From March to December last year, solar panel prices dropped 50 percent, said Aaron Chew, an analyst with the Maxim Group.

Cheaper solar is good news for consumers, but manufacturers are struggling to stay afloat. Last year, Solyndra LLC of Fremont, Calif., Evergreen Solar Inc. of Marlboro, Mass., and Spectrawatt Inc. of Hopewell Junction, N.Y. all declared bankruptcy.

“Nobody’s making money in this business right now,” Chew said.

Analysts said job cuts, factory closures and even mergers are to be expected in a relatively young industry that still welcomes new players every year. They see the industry following in the footsteps of television and computer makers by locating factories in Asia, where labor costs are low and governments provide few regulatory obstacles.

“It’s a very healthy thing,” Jefferies & Co. analyst Jesse Pichel said. “This is a shakeout period for solar in which uncompetitive technologies are getting kicked out.”

Earlier this year, First Solar Inc. said it would delay operations at its planned Mesa plant, citing a market flooded with photovoltaic panels.

First Solar specializes in “thin film” solar modules that are cheaper than those made by competitors. But the decline in global panel prices has eroded its status as the industry’s low-cost leader. First Solar’s modules are also less efficient than others, limiting their use. For instance, they’re ideal for large-scale projects that deliver power to the electrical grid, but they less effective for smaller systems used on rooftops.

The company lost $39.5 million in 2011 after earning $664.2 million in 2010. Its shares have dropped nearly 85 percent in the past 12 months. They rose about 10.3 percent Tuesday to $22.96 after the company announced the cuts.

“It is essential that we reduce production and decrease expenses,” First Solar Chairman and CEO Mike Ahearn in a statement. “These actions will enable us to focus our resources on developing the markets where we expect to generate significant growth in coming years,” such as the U.S. and China.

First Solar expects the restructuring to reduce its manufacturing costs by $30-$60 million this year and another $100-$120 million a year afterward. It will book a charge of $245 to $370 million, mostly in its first-quarter results.

Analysts said First Solar needs to cut costs even more and demonstrate that its panels are as durable as its competitors. Pichel said that as prices continue to fall, consumers will likely favor more efficient, polysilicon panels made by other solar companies. Goldman Sachs analyst Brian Lee downgraded First Solar to “Neutral” from “Buy” and cut 2014 earnings expectations to $4 from $5.75 per share.

Meanwhile, sales of solar panels and related equipment should keep rising, but nowhere near the blistering pace of the past several years. Solar installations are expected to increase by 3.7 percent this year, compared with a 49.7 percent increase from 2010 to 2011, according to energy research group GTM Research.

For more information on First Solar, visit their website at firstsolar.com.

First Solar

Hughes Joins First Solar As Chief Commercial Officer

First Solar, Inc. announced it has hired James Hughes as Chief Commercial Officer. In this newly created role designed to accelerate First Solar’s entry into emerging markets, Hughes will have comprehensive leadership responsibility for global business development and sales; project development; engineering, procurement and construction (EPC); product management and international public affairs and communications.

Reporting to Hughes will be Jim Brown, Executive Vice President of Global Business Development; Maja Wessels, Executive Vice President of Global Public Affairs; Jim Lamon, Senior Vice President of EPC and Operations and Maintenance; Tom Kuster, Vice President of Product Management and Customer Service; and Ted Meyer, Vice President of Global Corporate Communications.

“Jim is extraordinarily prepared to help First Solar open new markets and reach revenue goals,” said Mike Ahearn, First Solar’s Chairman and Interim Chief Executive Officer. “We will benefit greatly from his diverse and extensive global and operational experience in the energy sector.”

Most recently, Hughes was CEO and Director of AEI, which owned and operated power distribution, power generation, natural gas transportation and services, and natural gas distribution businesses in emerging markets worldwide. Previously, he was President and Chief Operating Officer for Prisma Energy, which was formed out of former Enron interests in international electric and natural gas utilities.

Hughes earned a juris doctor from the University of Texas at Austin School of Law, a Certificate of Completion in international business law from Queen Mary’s College, University of London, and a bachelor’s degree in business administration from Southern Methodist University.

First Solar designs and builds complete photovoltaic (PV) power plants for customers around the world – including the two largest PV projects in the world, which are currently under construction – and is the world’s largest manufacturer of thin-film solar modules. The company is committed to sustainability and created the solar industry’s first prefunded collection and recycling program.

firstsolar.com

Arizona Commerce Authority, AZRE Magazine November/December 2011

Arizona Commerce Authority Celebrates Its 1st Anniversary

With the Arizona Commerce Authority celebrating its 1st year, jobs remain the focus as the state’s CRE industry reaps the benefits.

Arizona Commerce Authority, AZRE Magazine November/December 2011In August, Tempe-based First Solar purchased 635 acres in Pinal County for $9.8M and announced plans to build a generating station on the property.

The rapidly expanding, clean-energy company is still constructing its solar module manufacturing plant in Mesa, expected to be up and running by mid-2012 with as many as 600 new, high-paying jobs.

The company also is building generating stations in Gila Bend and Yuma. In January, Power-One opened its first North American manufacturing facility in Phoenix. The California-based company, which makes inverters to convert renewable energy to usable energy, said it will employ as many as 350 people at build-out.

At Power-One’s grand opening ceremonies, Gov. Jan Brewer credited  the Arizona Commerce Authority for the big win and for wielding CEO clout and corporate incentives in making Arizona a hot spot for solar companies looking to expand or relocate.

“I have been consistently focused on ensuring Arizona is a magnet for business relocation, capital investment and a catalyst for the creation of new business and new jobs. And, with the work of my Arizona Commerce Authority, we’re seeing tremendous results in the solar space,” Brewer said at the time.

A year after the Arizona Department of Commerce, a government agency, morphed into the Arizona Commerce Authority, a public-private partnership led by a board of directors filled with many of the state’s top business leaders, six solar companies boasting a combined 1,700 new jobs have announced plans to expand or move to Arizona, says Bennett Curry, who has been piloting the organization’s business attraction efforts since it launched.

Besides growth in the renewable energy sector, diverse companies are finding Arizona attractive. They include:

  • Amazon, which recently announced plans to add another 1.2 MSF of warehousing space and 200 jobs to its existing Arizona enterprises;
  • Able Engineering, which hopes to expand into new manufacturing facilities in Mesa, eventually more than doubling its 230-employee roster within a few years of the expansion;
  • Ventana Medical Systems, which is expanding and adding another 500 jobs in Oro Valley.

Best is yet to come

Arizona Commerce Authority, AZRE Magazine November/December 2011Arizona Commerce Authority counts new jobs, not the square footage to house them, so it’s difficult to estimate the new office, manufacturing and warehousing space represented by the business growth, Curry says.

But while Arizona Commerce Authority’s mission is to generate jobs, Arizona’s commercial real estate industry is a big beneficiary of the growth, adds Mike Haenel, executive vice president Industrial Division at Cassidy Turley/BRE Commercial.

“Job growth creates absorption, construction and new development opportunities for the state’s commercial real estate industry,” Haenel said.

Arizona Commerce Authority has assisted companies such as Amazon, First Solar, Suntech and others with expansions and relocations, he says, but possibly even more important is the organization’s impact convincing local legislators and other Arizonans about the importance of proffering tax breaks and other enticements to snag coveted business.

He credits the prestige of the corporate leaders backing the group with influencing passage of the Arizona competitiveness package. And their combined weightiness as enticing to national business leaders looking for relocation options.

“Even though the Arizona Commerce Authority has only been in existence for one year, and the fact that we are in a slow recovery cycle, the Arizona Commerce Authority has  been instrumental in educating the business community and those businesses looking to relocate that Arizona has the incentives available for quality job growth,” Haenel says. “We’re still in a tough economy and having Arizona Commerce Authority can only help the state with job attraction.”

Sundt Construction chairman Doug Pruitt, an Arizona Commerce Authority board member, says the organization has logged some early successes.“Working with Arizona Commerce Authority partners, there has been a
massive reduction in vacant space,” he says.  But Pruitt says the biggest bang-for-the-buck is still to come as the organization spent much of its first year laying groundwork.

“Arizona Commerce Authority’s active projects are up 38 percent over a year ago,” Pruitt says. “One of our short-term plans includes aggressive recruitment of California-based firms within our targeted business sectors.”And the vision doesn’t stop at the Pacific Ocean. “Not only are we working to promote the state nationwide, we are taking the message that Arizona is the best place to do business to a global audience,” he says.

DMB Associates chairman Drew Brown, also an Arizona Commerce Authority board member, says each successful recruitment breeds more business. And as the expansions and relocations pile up, a boom in the state’s commercial real estate industry will be a welcome by-product.

“I think Arizona Commerce Authority’s function of attracting high-quality export jobs will be a big shot in the arm for the local economy,” he says. “The multiplier effect will encourage other new jobs.”

As more businesses come to the state, they will fill up vacant residential and commercial real estate, generating demand for new construction and development and the new jobs associated with that. “It’s out there. It will happen,” he says.

Building lasting relationships

Arizona Commerce Authority, AZRE Magazine November/December 2011Brown, like other Arizona Commerce Authority leaders, says the organization can’t take most of the credit for attracting the impressive influx of new business during its first year.

Arizona Commerce Authority has been forging important strategic relationships with key economic development groups such as Greater Phoenix Economic Council (GPEC) and Tucson Regional Economic Opportunities (TREO) to marshal joint clout, Brown says.

“We are working with the Arizona Commerce Authority on several active projects,” says Laura Shaw, TREO’s senior vice president for Marketing and Communications. “While the authority is still very new and thus getting its legs, so to speak, we have formed a close partnership and have many opportunities moving forward.”

And the Arizona Commerce Authority’s Curry says the new competitiveness package passed early this year opened a lot of doors for Arizona Commerce Authority to pitch the state’s wares.

“Before our toolbox didn’t have a lot of tools,” Curry says. “Now Arizona is ranked high among Western states.”

During a recent trade conference in San Francisco with international companies looking for a U.S. presence, the organization landed 19 meetings with interested prospects, and three are actively pursuing a possible Arizona relocation, he says.

Pruitt adds the Arizona Commerce Authority still faces hurdles — the uncertain global economy and Arizona’s somewhat tarnished reputation regarding school funding, immigration, gun laws and other issues. But he is optimistic.

“Some 300,000 of our residents have lost jobs since the recession began,” Pruitt says. “We realize that people are counting on us to do our job. The Arizona Commerce Authority takes this duty seriously and is focused on a single task — getting businesses to invest in Arizona to create jobs.”

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AZRE Magazine November/December 2011

First Solar, Mesa

First Solar To Open Manufacturing Plant In Mesa

First Solar is moving to Mesa after consolidating its Vietnam manufacturing plant. The First Solar manufacturing plant will bring approximately 1,200 jobs to Mesa. The plant is currently in its construction phase and the estimated completion for the manufacturing plant’s first phase will be in the third quarter of 2012.

First Solar’s Reciprocal Benefits For Company and Community

Greater Phoenix Economic Council president and CEO Barry Broome is excited to bring another big name in solar technology and manufacturing to the Valley.

“The Greater Phoenix region is in a prime position to capitalize on this momentum,” Broome says. “Already home to First Solar’s headquarters in addition to its Mesa manufacturing facility, the region is also home to nearly one dozen solar and renewable energy or clean technology companies such as Suntech Power Holdings, Power-One, Gestamp Solar Steel, Rioglass Solar, Clear Energy, Maxwell Technologies and hundreds more within their supply chains.”

The United States Southwest holds the largest global manufacturing opportunity for solar, clean and renewable technologies. Broome says that First Solar’s choice to manufacture in Mesa will not only be beneficial for the company by being able to take advantage of renewable and sustainable tax credit program, but for the Arizona economy by creating solar technology careers.

University and community college students in the Valley will have an advantage for finding careers in solar technology and engineering when they complete their programs.

“Greater Phoenix turns out superb engineering talent through its universities and technical talent through its community college system,” Broome says. “Mesa was selected over Vietnam because of the [full pallet of renewable resources] that are produced in the East Valley, the leadership of the Mayor of Mesa, Scott Smith and the opportunity that has been built around the U.S. market.”

One advantage for First Solar manufacturing in the United States is the increase for efficiency and that of supply chains in relation to other parts of the country.

“Here in Arizona we have the chance to be an international leader in very important technology,” Broome says. “First Solar, Suntech and all these companies are a clear sign that [solar] is the technology of the future and we have to be strong and focused on this success.

“As illustrated today by First Solar’s decision to embrace Mesa over a low-cost overseas market, we can and will dominate the solar renewable energy and clean technology market.”

 

NAIOP Roundtable 2011 - AZRE Magazine September/October 2011

NAIOP Roundtable 2011

NAIOP Roundtable 2011

The commercial real estate industry is clearly recovering. Companies are absorbing vacant space, build-to-suit development is active and abundant capital is pursuing core real estate. The key question remains, however, how do we compare with the other major markets when it comes to job and population growth?
In short, when will the market justify new development and how will the state and our local commercial real estate industry assist in this effort? To be sure, the future remains bright in Arizona but the recovery will last longer before the next boom.

— Mike Haenel


NAIOP Roundtable Participants Key NAIOP Roundtable - AZRE Magazine September/October 2011

Roundtable Participants

 

1 — SB: Scott Bjerk
President
Bjerk Builders, Inc.

2 — MC: Megan Creecy
Leasing and Development Manager
EJM Development Co.

8 — JD: John DiVall
Senior VP
Liberty Property Trust

MH: Mike Haenel
Executive VP, Industrial Group
Cassidy Turley BRE Commercial
Chairman Profile

6 — TH: Todd Holzer
VP of Development
Ryan Companies US

5 — KM: Keaton Merrell
Principal
Legacy Capital Advisors

7 — BM: Bob Mulhern
Managing Director Greater Phoenix
Colliers International

3 — DW: Deron Webb
Managing Principal
Wentworth Webb & Postal

4 — CW: Clay Wells
Director, Business Development
McShane Construction Co.


Q: What is different in July 2011 in our local commercial real estate industry than a year ago?

BM: The short answer is that the market is stronger, but still burdened by vacancy rates that are high by historical standards, despite being lower than recent peaks. What is decidedly different, however, is that the outlook is considerably brighter than it was a year ago.

Last year at this time, uncertainty was the overriding theme and it plagued the market. The industrial market had posted just one quarter of positive absorption, and it was unclear whether that was a one-time burst in activity or a sign that tenants were more optimistic and the industrial market was beginning to turn a corner. Now we can see that tenant demand for industrial space has been sustained for more than a year, vacancy is tightening, and rents are stabilizing. We are also seeing headline-making announcements from companies such as Amazon and First Solar that not only improve the numbers, but also renew confidence in the market as a whole.

The office market has been slower to bounce back, but it is far more stable today than it was a year ago. A year ago, we were averaging negative net absorption of more than 500,000 SF per quarter, and the vacancy rate was shooting higher. While absorption has been mixed in recent quarters — up one quarter, down the next — the overall vacancy trend is essentially flat. The market hasn’t necessarily started to improve, but it’s no longer in free fall. We’re forecasting slightly positive absorption in the second half of 2011 and then positive absorption of nearly 1 MSF in 2012. We think rents will likely tick lower through the remainder of this year, because the high availability of space will continue to create competition in the marketplace.

MC: Activity is up, but it is still the quintessential “tale of two tenants.” National companies with 200,000 SF+ warehouse requirements are in the market. And, there are definitely more of those types of requirements (including build-to-suits) in the market today than there were last year at this time.

When looking, however, at say deals in the 5,000 SF to 20,000 SF range, there has been an increase in activity, but the regional and local tenants who comprise a large portion of that market segment are still facing a lot of challenges, such as difficulty obtaining financing, and economic uncertainty. These challenges result in a constraint on their ability to expand and the lack of confidence needed to make long term real estate decisions, which is why we are still seeing a number of these tenants in the smaller size ranges wanting only short-term extensions in their current spaces.

TH: I sense that we are now a local real estate industry made up of survivors. The attrition of firms is over for the most part. Those remaining have right sized for this “new normal” that we find ourselves in. Companies in our business have had to make changes in their business plans and doing activities that they did not anticipate 4 to 5 years ago. I think that this transformation has completed where a year ago it was still finding itself.

Q: How would you compare our Metro Phoenix commercial real state market to other major markets throughout the Western U.S.?

BM: At present, the characteristic that best describes the Phoenix commercial real estate market is the vacancy rate, which is among the highest, if not the highest of the major markets in the Western U.S. In the period immediately preceding the recession, development in Phoenix was fairly active, and when the economy cratered and companies slashed payrolls, there was a significant supply/demand imbalance.

The difference between Phoenix and the major California markets — where employment losses were nearly as dramatic as losses here — is that those markets didn’t have nearly as much speculative construction in the pipeline. As a result, vacancies rose in California, but not to the heights that they rose in Phoenix.

The other state that makes for an interesting comparison is Texas, where development has historically been quite active — just like Phoenix. The primary difference between Phoenix and the major Texas markets in the recession and thus far in the recovery is that the Texas markets weren’t hit nearly as hard by job losses during the downturn and the state has led the way with job gains during the recovery.

Looking ahead, the picture brightens significantly. Most forecasts call for Phoenix to rebound favorably once the economic recovery really gains traction nationally. Long-term forecasts call for annual population and employment gains in the 2.5% range, which should be similar to the major Texas markets and far outpace the California markets. This anticipated expansion is the primary source of optimism in the Phoenix market — now we’re just waiting for it to happen.

CW: The Metro Phoenix commercial real estate market has actually fared no worse or better than the other major Western U.S. markets. Retail and office continue to struggle in most markets while industrial vacancies for building over 500,000 SF have started to decrease. Recently a 500,000 SF speculative building broke ground in the Inland Empire and I believe if the economy stays as is we will see a speculative industrial building in Phoenix breaking ground by 3Q 2012. Where the Phoenix market differs from the rest of the Western U.S., with the exception of Las Vegas, is the residential real estate market. Metro Phoenix was too dependent on the residential construction market for creating jobs.

The reason this is so important until we create new jobs to replace these lost jobs, the retail and office sectors will continue to be slow to recover. People have to have a job, which allows them to have diposable income to spend at stores creating a need for new retailers. The same can be said for the office market. Until new companies locate to Metro Phoenix or are created here the need for office space will remain depressed. Most activity we are seeing in the office market are new investors coming to Metro Phoenix and buying distressed properties at a discount. This allows them to quote reduced rents forcing a downward pressure on existing landlords, who must rent space at a loss or lose a tenant. Office markets in some cities that have a more diverse economic base are recovering at a better pace than Metro Phoenix.

MC: While there has been increased activity across the Western U.S., the divergence is in the stage of recovery in primary markets such as the Inland Empire, vs. secondary markets like Phoenix.

The Inland Empire, for example, is one of the strongest industrial markets in the country with vacancy at 6.3%, which is the lowest vacancy rate in 14 quarters. By comparison, Phoenix’s Q2 2011 industrial vacancy rate was 13.9%, which was our 5th consecutive quarterly decline. But, I would say that the steady decline in vacancy we are experiencing here in Phoenix is a positive indicator, and it is only a matter of time before our recovery picks up speed.

Arizona Forward, State Park Issues

Arizona Forward Enhances Awareness of Arizona’s Park Issues

Arizona Forward Enhances Awareness of Arizona’s Park Issues

Arizonans value their parks and open space, consistently ranking them as key quality of life indicators. A recent survey conducted of residents statewide shows that 87 percent visit a park or recreation area at least once a year, with 23 percent doing so on a weekly basis. In addition, parks and open spaces create thousands of jobs and billions of dollars in revenue.

Multiple land ownerships and funding mechanisms have produced parks and open space issues that are complex, confusing and sometimes controversial. In fact, the telephone survey conducted by WestGroup Research further revealed that most residents (80 percent) rate their knowledge of how state and local parks are funded as very low or in the middle range. Meanwhile, a depressed economy and recession has impacted parks negatively at every jurisdictional level from federal and state to county and municipal governments.

Recognizing the need for public education on the subject of parks and open space issues, Arizona Forward, a new statewide environmental/business coalition launched by Valley Forward earlier this year, developed a comprehensive report to provide unbiased facts, background information and answers to frequently asked questions about state and federal lands as well as county and municipal parks.

Designed to enhance awareness of and interest in solving Arizona’s parks issues, the primer is among Arizona Forward’s first projects towards its mission to promote cooperative efforts to improve the livability, sustainability and economic vitality of cities and towns across Arizona. Readers can sort out how much open space is available in the state, who is responsible for it and the challenges facing various jurisdictions of government. The user-friendly reference guide is described as ‘parks and open space 101’ and can be downloaded at arizonaforward.org.

While the primer doesn’t take a formal position on how to solve funding issues relating to parks, it communicates the economic impact of recreational and open space amenities and why Arizonans should care about these natural resources.

Charter members of Arizona Forward include: Arizona Community Foundation, First Solar, Freeport McMoran Copper and Gold, National Bank of Arizona, Solon Corporation, Sundt Construction, The Nature Conservancy, Total Transit and Wells Fargo.

For more information about Arizona Forward, visit arizonaforward.org.

First Solar

First Solar and Mesa Proving Grounds: East Valley Center for Economic Growth

CoreNet Global brought together panelists who were instrumental in the planning that led to First Solar’s decision to locate their second US manufacturing facility in the City of Mesa. On March 17, 2011, First Solar announced it was acquiring 135 acres within the Mesa Proving Grounds to build the first phase of a $300 million solar module fabrication plant, their second facility in the U.S. To meet growing demand for photovoltaic solar panels, First Solar needed construction underway in 2011, with four manufacturing lines in production by late 2012.

CoreNet Global
Tues June 7, 2011, Phoenix Country Club
11:30 a.m. – 1 p.m.

Moderator:
Karrin Kunasek Taylor, DMB, Exec. VP, Chief Entitlements Officer

Panelists:
Steve Krum, First Solar, Director of Communications
Barry Broome, Greater Phoenix Economic Council, CEO& President
Mayor Scott Smith, City of Mesa

Background: In 2006, DMB bought 3,200 acres of the former 5,000-acre General Motors Desert Proving Grounds located in the City of Mesa and previously used for hot weather vehicle testing. DMB’s acreage became the Mesa Proving Grounds: the last significant, privately-owned contiguous land holding in Metro Phoenix’s southeast Valley. The City of Mesa has actively pursued employers for their Gateway Planning Area, which includes the Phoenix-Mesa Gateway Airport, ASU Polytechnic campus, and major freeway access.

Kunasek-Taylor: Mesa Proving Grounds is unique… it is a strategic site east of the Phoenix Mesa Gateway Airport which offers three runways that can land any aircraft in the world. This airport is one of the priorities of the Federal Aviation Authority for future funding. The adjacent ASU campus now has 10,000 students and plans for growth up to 30,000 students. 11% of the jobs in Metro Phoenix are in the Southeast Valley, and ADOT (Arizona Department of Transportation) will soon award the contract for first phase of construction connecting the 202 freeway to the airport. Zoning for Mesa Proving Grounds future development was based upon dividing the 3,200 acres into nine development unit plans, with pre-approved densities and uses. First Solar announced in the fall of 2010 that it was hunting for new manufacturing space capable of accommodating 5,000 employees.

Krum: Why was Mesa selected, when a solar panel manufacturing facility can be located anywhere since the manufacturing process doesn’t need sun? First Solar needed immediate availability of land and a quality workforce. There was a sense of urgency and commitment by Barry Broome of GPEC, the leadership of the City of Mesa and its economic development team, and DMB had a fantastic master plan for the Mesa Proving Grounds. With manufacturing facilities around the world, First Solar has choices. But it was very clear that the City of Mesa wanted First Solar. A lot of people here were trying to help us achieve our vision. Our fastest growing market right now is the Southwestern United States. The Agua Caliente project (290 megawatt solar photovoltaic generating facility) in Yuma County, southwestern Arizona. — we want to be in close proximity to projects like that. Pacific Gas & Electric has contracted to purchase Agua Caliente’s output for 25 years. There will be more projects like this to serve California, since utilities there have to meet California requirements for alternative energy sources.

Broome: In 2007 we saw the unprecedented spike in solar — we saw an incredible opportunity for Arizona. We went after every German solar company, but lost them (locating) to states like Oregon, New Mexico, Texas and California. It’s a capital intensive industry: we’ve got to help them recover their capital, help lower their operating environmental over 10-15 years, and we’ve got to deliver talent. Most of the guys who run solar companies are ex-Intel and Motorola guys. So we put together a platform that delivered engineering, real estate, and demand. On a policy level, we removed personal property taxes for a ten year period. With this program, the state of Arizona and the city of Mesa will make millions of dollars of corporate taxes in the coming years. There are many related solar supply chain companies coming into this market – we expect to announce another 16 solar related companies in the coming 18 months. The price of solar electric power will continue dropping, as technology improves. It was 28¢/kwh; not it’s down to 14¢/kwh, and it will go lower. This means more demand for solar.

Smith: The First Solar project is a great example of how economic development should work. Companies go to places where they can succeed. Tax policy is not an end-all. State policy has to be in place. Business attraction tools are set at the state level. Barry helped create the policy level, which gave us the tools. The three key things that make a deal are infrastructure, people, and real estate. We decided this was a deal that we were not going to lose. We brought out every resource we have in the City of Mesa. We needed 1 million square feet, all entitlements, and fast tract for opening in 2012. We needed the right zoning — that’s why DMB was part of this. I’ve got to give DMB credit for being flexible and having the right vision to make this work. They did not make money on this deal. It was a giant leap of faith to make the community better. The complexity of this type of structure — power, roads, water — Mesa passed a bond issue two years ago that allowed us to accommodate this size of project. We were able to solve the problems and create a environment so that First Solar couldn’t say no. First Solar will succeed, and others will come. This truly was a team success — state, county, city and private companies.

For more information about First Solar and more, visit:

firstsolar.com
dmbmesaprovinggrounds.com
mesaaz.gov
corenetdesertmtn.org

Feature Big Green 2011

Speaker: David Erhart ~ BIG Green Expo & Conference 2011

David Erhart, First Solar

David Erhart, First Solar

David Erhart serves as a marketing communications specialist for First Solar, the largest thin film solar company in the world. In this role he oversees a range of activities, including global inquiry handling, brand research, and competitive analysis. Mr. Erhart also manages a cross-functional marketing team whose members are based in the U.S. and Europe. He has participated in
numerous renewable energy conferences and trade shows.

Prior to joining First Solar, Mr. Erhart was an account coordinator for REISTER, one of the largest independent advertising and PR firms in the Western U.S. While there, he supported the company’s largest client, wrote numerous press releases, and conducted in-depth market research and analysis. Mr. Erhart was also employed as a unit marketing director by Chick-fil-A, where he built relationships with businesses, schools, and pharmaceutical representatives in a successful effort to increase location sales and community support.

Mr. Erhart holds a B.S. in marketing from Arizona State’s W. P. Carey School of Business.


Topic: An Arizona Success Story, First Solar: An overview of the world’s largest, thin film solar company.

Conference Speaker
Friday, April 15, 2011
9:00 a.m. – 10:00 a.m.
Room 157

BIG Green Conference 2011

 

 


BIG Green Expo
Friday & Saturday
April 15th & 16th 2011
9 a.m. – 4 p.m.



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