Tag Archives: July 2009

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.

nurses, healthcare, doctors

The State’s Health Care Industry Is Strong, But The Recession Is Taking A Toll

Although I have only been in Arizona 11 years, St. Joseph’s Hospital and Medical Center has been providing high-quality care to Valley residents since 1895. And for the past century, St. Joseph’s has been known for two primary missions: Service to the poor and underserved; and outstanding care, particularly in the neurosciences, driven by groundbreaking innovation.

In the past 25 years, the innovations at St. Joseph’s have been significant, and other hospitals in the state have seen significant growth and expansion of services, as well. We have had unprecedented growth in the Metro Phoenix area, and hospitals have tried valiantly to keep up with the demand for acute care services. In the past 25 years, we have seen many new hospitals built, particularly in the suburban areas, and central hospitals have continued to expand.

Arizona was the very last state in the country to adopt a state Medicaid program in the early 1980s, but the Arizona Healthcare Cost Containment System (AHCCCS) has since been considered a national model of cost effectiveness. We missed out on substantial federal funds for the Medicaid system by being the last state to join, but we have nonetheless run an efficient system with the public dollars Arizona has received.

The health care system has continued to evolve in very interesting ways during the past quarter century. We have seen a clear movement to reduce the length of hospital stays, and many procedures are done in outpatient settings that were once only performed in hospitals.

We have made extraordinary progress in diagnostics and minimally-invasive procedures, which help people recover faster and get treated earlier when disease occurs. In a past era, patients who needed lung surgery had to have their ribcage cracked open and had weeks of extended recovery; now they have it laproscopically and are up walking around the very next day. Cancer used to be a death sentence; now it is often a chronic illness that can be virtually cured. We are better at treating chronic illnesses such as diabetes and heart disease, and we now know how important prevention is to limiting the impact of disease.

But significant challenges still remain. We have evolved into a system of “sick care” not “health care,” and although we know prevention pays dividends, that is not what physicians and hospitals are reimbursed for. The system rewards us when we treat the sickest patients, but not always for keeping them well.

In America, the concept of employer-sponsored health care is considered foundational to our economy. Yet, more than 46 million Americans do not have health insurance, and many of them are vulnerable children. In Arizona, the majority of employees work for small businesses that are under a tremendous strain to provide affordable health insurance. When people transition to public insurance, the reimbursements are declining so much that community physicians are refusing to accept new Medicaid and Medicare patients, while safety-net hospitals struggle to treat all who present themselves at their doors.

The boom-and-bust cycle is hard on the economy, but it is also hard on health care providers. We face a physician shortage in the Valley and a dearth of key sub-specialists for a region this size. In a recession, more people turn to public assistance at the same time the state is trying to cut budgets to compensate for diminished reserves.

Still, I remain hopeful for our state and our industry. Health care continues to be a strong economic engine for Arizona; good paying jobs, great career paths for a wide variety of disciplines and many avenues for innovation. Catholic Healthcare West, of which St. Joseph’s is the flagship hospital, is actively working with the new president and Congress to help shape health care reform so all Americans can have affordable and accessible health coverage. I believe there has never been a time when so much good is possible, and that change can help all of us live better.

giesha a go go sushi

Geisha A Go Go Serves Up A Japanese View Of The West

When life-sized posters of iconic rock stars line the bar — in this case, Jimi Hendrix, Jim Morrison and Sid Vicious — you know you’re in for a wild ride.

A colorful hallway filled with neon-lit, arcade-style games marks the entryway. The dark wood walls and stone-like floors, along with a large boulder directly in the middle of the floor, make up the eclectic mood of the place. It’s clear as soon as you walk in that Geisha A Go Go is not your typical Japanese restaurant. Instead, it is a Westernized twist on the Japanese lifestyle.

On the cozy, intimate patio space, we had a front row seat to the action on Old Town Scottsdale’s streets. But people-watching aside, we dove right into the menu to begin our evening. With two pages of appetizers it was difficult to choose, so we selected a variety of items including edamame, Japanese pork dumplings, and shrimp and vegetable tempura. Pretty soon we were on a roll — literally — sampling what Geisha A Go Go had to offer. We began with some traditional choices, and the California, yellowtail, rainbow, soft shell crab and tuna rolls disappeared quickly. After scanning the menu to decide which rolls to order next, I spied the Gaijin roll, described as “an Asian twist on the chimichanga” and I realized that we were in for a Japanese dining experience like no other.

Much like the whimsical décor of the restaurant itself, the sushi rolls were quite an adventure for the palate. And there’s more where the Gaijin roll came from; other unique rolls had names such as Red Samurai, Harajuku Lover and even the Pokemon topped with Fritos — yesFritos! At Geisha A Go Go, no flavor combination is off-limits and we plunged into these exotic concoctions. One of the favorites of the table was the Dragonball made with shrimp tempura, crab mix, salmon, avocado, spicy mayo and unagi sauce, topped with masaga and scallions. This bright orange delectable was a feast for the eyes and mouth.

The namesake roll of the restaurant was also a hit — a balance of both sweet and spicy flavors with lobster tempura, crab mix, avocado, and even cream cheese, all wrapped up with soy paper.

After what seemed like an endless array of rolls, sweet tempura ice cream, a cinnamon banana crisp and smoothsake rounded out our dizzying journey of flavors.

Geisha A Go Go is definitely not your average sushi restaurant nor is it trying to be. In addition to some of the most interesting sushi combinations you can think of, Geisha A Go Go offers private karaoke rooms available for rental. The restaurant is the perfect place to start your night off with some appetizers and drinks or for a casual lunch. Either way, the food, the atmosphere and the service form a winning combination.

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.

money in vice

The Economic Recovery Begins In 2009, But It Will Be Slow Going

The national and state economies are expected to start feeling the effects of a recovery during the last quarter of 2009. However, the recovery over the next year will be slow, with unemployment continuing to rise and economic growth anemic at best. Meanwhile, the state’s expenditures are rising, even as revenue continues to fall, setting the stage for future budget cuts and an expected tax increase.

That was the consensus forecast unveiled by top economic experts from the W.P. Carey School of Business at Arizona State University and the Arizona governor’s office at the annual Economic Outlook Luncheon on May 20. Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at W.P. Carey and editor of Economy@W.P. Carey, provided an overview of current economic conditions on the state and national level, and offered a forecast for the coming year.
“The economy is going to show some signs of recovery in the last part of 2009, but the way I like to look at this is that lots of our economic indicators will still be underwater in a sense — they just won’t be as far underwater,” he said. “We’ll probably see positive growth in GDP, we will see job losses getting smaller, but there will still be job losses. There will still be people claiming unemployment insurance and, of course, unemployment rates will still be going up.
“It’s going to be a deep, sort of U-shaped recovery and 2011 will probably be a pretty good year of job growth,” McPheters added. 
In the meantime, job losses will continue to mount. In March, with an over-the-year employment decline of 7.1 percent and 136,000 jobs lost, the Valley just edged out Detroit as the weakest large metro labor market in the nation. And even as the economy begins to recover, the Greater Phoenix area will still see its labor market contract by 1 percent in 2010, according to McPheters.
Nationally, McPheters stressed that while the current recession has been painful, it still is not on par with the Great Depression. The Great Depression was marked by four consecutive years of decreases in Gross Domestic Product (GDP), while the current recession is expected to result in four consecutive quarters of decrease in inflation-adjusted GDP. In fact, in the first year of the recession, the national GDP actually increased by 1.1 percent.
“During 2008, the first year of the recession, you would expect that the GDP would be decreasing,” he said. “Well, one of the factors holding it up was exports. Exports continued strong in the United States through 2008.”
This year, however, exports are expected to drop by 10 percent. That’s just one example of how the national and state economies will continue to struggle as the recovery begins to take hold. Another example is the expected freefall in the commercial real estate market, especially in Arizona.
“Commercial is the next shoe to drop and we have seen this pattern before,” McPheters said. “Even as you see residential (construction) begin to pick up, I think you can expect that commercial building is going to be very, very weak all the way through 2010 and probably 2011, because what we need to see is population growth come back and job growth to come back. There’s no point in building retail space and office space if the jobs are not there and the consumer is not coming out to shop.”
And it is consumers, who account for 71 percent of GDP, who really hold the key to the economic recovery.
“The consumer is the only part of this economy that can bring us back,” McPheters said. “Consumers are not going to come back into the game until home prices stop falling, until the stock market stabilizes, until they see unemployment rates have peaked out and job losses start to get smaller and smaller. And the consumer has to have confidence to buy, and believe it or not, the consumer has to back off of their inclination to save their money.”
In March, the savings rate as a percent of disposable income was 4.2 percent, up from 2.6 percent six months earlier. While increased savings are considered a good thing in robust economic times, a pullback by consumers as an economy tanks can have devastating effects. McPheters pointed out that for each 1 percent increase in the savings rate, approximately $100 billion are being pulled out of the consumer-spending stream.
However, McPheters expressed confidence that the very calamity that sent our state and national economies reeling will eventually add to Arizona’s attractiveness to new residents and businesses — falling home prices.
“Housing prices have now returned to the traditional level, where Arizona housing prices are now more affordable than the national average,” he said. “In 2005 and 2006, we had come to the point where we were one of the least affordable markets. That has turned around and it has turned around very quickly. Of course that has been very painful.”

Dennis Hoffman, director of the L. William Seidman Research Institute at W.P. Carey, agreed with McPheters, adding that he believes the state’s economic rebound will be strong.

“This of course is the big question: What kind of bounce will take place? Now, I’ll have to say that the dramatic shakeout in prices in housing, while it has been absolutely disastrous for a number of folk and put a lot of pressure in a lot of different places, it might set us up for a more robust recovery than I would have thought six to nine months ago,” he said. “The thinking is really, very, very simple; an attractive attribute of Arizona has historically been great climate, affordable housing and a place to get a job. That third aspect really doesn’t exist right now, but it could exist if our economy recovers at a little faster pace.”
In the economic downturns of the past four decades, Arizona has bounced back strongly, and Hoffman is confident history will repeat itself, especially if the state and Valley can re-create the environments that people from around the country have found so attractive.

However, a major wrench in making the state attractive again is Arizona’s current budget crunch. In fiscal year 2009, the state’s budget gap stands at $1.6 billion. In fiscal year 2010, that’s expected to almost double to $3 billion dollars. As the economy has worsened, unemployment has soared to almost 8 percent, foreclosures have skyrocketed and businesses have closed their doors. As a result, billions of dollars in revenue from income, property, sales and business taxes have evaporated. Conversely the need for state services has exploded.

“We’re really seeing the effects of the downturn in the economy, both in terms of state revenues — our collections are down at a very significant rate — and likewise, our caseloads are up at a very significant rate, because more of our citizens are in need of services,” said Eileen Klein, director of the Arizona Governor’s Office of Strategic Planning and Budgeting, adding that in the past two months alone the Arizona Health Care Cost Containment System (AHCCCS) has enrolled 50,000 people.
Hoffman pointed out that in the past, $48 to $50 out of every $1,000 of personal income had gone into the state’s general fund.

A New Study Provides Lessons On Enhancing Hospital Board Effectiveness

A New Study Provides Lessons On Enhancing Hospital Board Effectiveness

It’s no secret that nonprofit hospitals, which account for the majority of hospitals in the U.S., are under growing scrutiny from legislators and regulators. In exchange for being exempt from paying taxes, nonprofit hospitals must provide benefits to their communities, including charity care. As health care reform efforts are beginning to get underway, an increasing emphasis has been placed on tax-exempt hospitals, and legislators are questioning the level of benefits actually provided to the local communities. At the core of this debate is how these hospitals are governed. Consequently, effective health care governance has never been more important.

So, what should health care systems be doing to maximize governance effectiveness? And what can these organizations learn from the governance practices of the most-effective community health systems?

According to a recent study, “Governance in High-Performing Community Health Systems: A report of trustee and CEO views,” which Grant Thornton co-sponsored in collaboration with the University of Iowa, College of Public Health and the American Hospital Association, there are a number of important lessons to consider. The study examines the governance of community health systems based on feedback from 123 hospital CEOs, and follow-up visits and onsite interviews with CEOs and trustees of 10 “high-performing” systems. The “high-performing” systems were selected from a set of performance and governance metrics.

Six principal factors emerged from the study as critical to effective governance at high-performing systems:

Strong values-based CEO leadership and effective management teams
Effective CEO leadership is vital to achieving and maintaining a high level of health system operating performance. Among the specific attributes mentioned by interviewees were a commitment to the system’s mission and values, excellent communication and relationships with the board and medical staff, expertise in financial management and cost controls, a passion for improving the system and its patient care, and strategic vision. They also cited the importance of a strong, effective management team with expertise in the full range of management functions.

Well understood systemwide mission, vision and values
Interviewees emphasized that key internal and external stakeholder groups must understand and support a meaningful systemwide mission statement, a compelling vision for the system’s future and a clearly stated set of core values. These expressions of organizational mission, vision and values can be powerful in unifying the stakeholders and galvanizing energy toward established goals and standards, but only if they are consistently reinforced by organizational leaders throughout the system. Interviewees also recognized that building the understanding and support of key constituencies within the system, and in the communities the system serves, requires continuous attention by the board and management.

A highly committed and engaged board of directors
Trustees commented that a highly committed, well informed and proactive governing board is extremely important to achieving and maintaining organizational success. The board should work collaboratively with the CEO and physician leadership. In addition, many board members stressed the importance of well organized and staffed board committees, the leadership role of the board chairperson and a mutually supportive relationship between the board chair and the CEO. They also noted the need for trust-based relationship between the board of directors and its CEO.

Strong clinical leadership and capabilities
The majority of interviewees underscored the need for committed, competent clinicians as a critical determinant of operational performance. They commented that without strong physician leadership, no hospital or health system can achieve enduring success. A number of interviewees also noted the importance of excellent nursing leadership. Also critical were strong, mutually beneficial partnerships between the system and physicians.

Clearly defined organizational objectives, targets and metrics
Interviewees stressed the importance of working toward well defined organizational targets and evidence-based metrics. These enable the board, management team and clinical leadership to monitor actual performance in relation to established standards in key aspects of system operations. Metrics should include the health systems’ community benefit program, financial performance and quality of patient care.

Healthy organizational culture
Interviewees frequently mentioned the importance of organizational culture. They commented that the prevailing culture within their systems included broad-based commitment to excellence in patient care and operating performance.

In addition to the importance of these six factors, there is ample room for improving board performance, particularly related to boardroom culture, board evaluations and community benefit programs. We recommend the following:

Devote time and energy to serious reflection and dialogue about the board’s fundamental role, responsibilities and the overall caliber of its performance in recent years. Then, develop a concrete strategy for creating a better, more proactive and more effective board.

Reexamine the organization’s current board size and composition. Consider adding greater racial and gender diversity, as well as respected and experienced nursing leaders as voting members. Keep in mind that large boards can be unwieldy; nine to 17 members is considered ideal.

Take a hard look at existing board-development programs. On that basis, adopt a strong commitment and a concrete plan for improving them.

Initiate an overall review of the present board evaluation process. Objectively assess the value it has provided for the organization and determine how to improve its effectiveness. Board evaluation must not be a pro forma exercise with minimal value.

Give careful attention to the boardroom culture and determine steps to make it healthier and more effective. Board members must feel free to express their views and constructively challenge each other and the system’s management team. Directors should actively engage in discourse and decision-making.

Devote attention and resources to meeting emerging benchmarks of good governance for community benefit responsibilities. Establish formal measurable policies and measurable objectives for community benefit plans, with regular reporting on the achievement of those objectives. It’s also important to collaborate with other organizations in ongoing community needs assessment and to provide thorough reports to the communities served regularly at least once per year.

Current and emerging benchmarks of good governance for nonprofit hospitals and health systems should be reviewed, refined and compiled into authoritative, consolidated documents to provide guidance for trustees and CEOs as they strive to meet these benchmarks.

With growing attention from the IRS, Congress and the media, forward-looking health care organizations are taking steps to examine their governance and identify opportunities to strengthen it. Organizations that are committed to continuous improvement not only will enhance their performance, but also improve their systems’ contributions to the communities they serve. The time has never been better to apply these lessons learned.

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.

Small Businesses Continue To Power The Valley’s Economy While Maintaining A Personal Touch

Small Businesses Continue To Power The Valley’s Economy While Maintaining A Personal Touch

As we approach a new era in Arizona business, I find myself reminiscing about the small business environment in the Valley 25 years ago, recalling the pioneering spirit of many courageous and determined entrepreneurs. In that era, the Five Cs were predominant revenue sources: cotton, copper, climate, citrus and cattle.

That is no longer the case in today’s marketplace. Technology, biosciences and health care are now dominant industries. Although today’s business climate is faster paced, it still preserves the attitude, perseverance and independence of the earlier years, and 97 percent of Arizona commerce is still fueled by small businesses.

In the Valley of 25 years ago, Motorola and Honeywell were key players in the corporate arena, and the “good old boys” network was alive and well. Though there were fewer participants and less competition, who you knew played an important role in opportunities. And, yes, business was done face to face. Often, a small business venture was cinched with a sincere handshake or a proposal outlined on a paper napkin over a cup of coffee.

And don’t forget the “good old girls.” Arizona has always been progressive with women’s involvement in business and political leadership. Arizona gave women the right to vote before the nation did. We have had four female governors in the past 25 years — no other state comes close.

’ve always called Phoenix “the biggest small town.” Even though it has grown to become the fifth largest metropolitan city in America, it still feels like a big small town to me. And, in many ways, Phoenix’ small business community connects much the same as it did in the small-town era, with networking, referrals, camaraderie and support.

The explosive change that arrived 25 years ago was technology. That’s when the microcomputer industry propelled us into a new era where cell phones, the World Wide Web and computer automation were about to be unleashed on our small businesses. I remember hauling around phone books and city maps in my car or stopping at a convenience store to use the pay phone to verify directions to a meeting — no MapQuest, no Google, no GPS. And today, if you want to know about social media, ask a 13-year-old.

Of course, 25 years ago there was less traffic and fewer freeways. For relaxation, I would head to Tempe, where I’d stroll along Mill Avenue and wander into Changing Hands Bookstore, and then head to Cookies From Home. With my new book and chocolate chip cookie,

I’d settle into a comfortable bench. Today, Mill Avenue is a much different business setting in the heart of Tempe. Also, light rail has rejuvenated many small businesses along its pathway through Phoenix.

In the past, the Valley’s small businesses have experienced many economic storms. Any downturn forces small businesses to reexamine expenses, processes and strategies, while requiring more efficiency, resourcefulness and creativity. Sometimes the hard decision must be made to retool, reinvent or even to start from scratch.

I think it is important for businesses that are doing well at this time to reach out to their suppliers and partners and “pay it forward” by doing business with those who may be struggling. Surviving these challenging times will fortify these businesses and poise them to recapture markets and revenues, and flourish in the upturn.

The sun shines on our business climate, with Arizona consistently in the running for one the top five states for small business. I believe small business will always be an integral part of the identity of Arizona; a place where we nurture creativity, value independence, respect stamina and expect tenacity.

Remember, the threads of small business weave a strong and vibrant tapestry, like the blanket you toss onto the back of a bronco. Sometimes it’s a wild ride and you need to hold on.

Technology

Arizona’s High-Tech Sector Has Grown And Diversified Over The Years

Intel. Boeing. The Mayo Clinic. Try finding anyone who hasn’t heard these renowned names. Fortunately for Arizona, they and other companies like them have been key to our state’s technology scene growing dramatically over the past quarter century.

There is one name, however, many may have forgotten. Although no longer a huge presence here, one company paved the way for others, as well as gave birth to offspring that garnered their own recognition. Its name? Motorola.

After World War II, the Signal Corps asked officials at radio communications pioneer Galvin Manufacturing Corp. to move parts of their operations out of Chicago for fear an atomic bomb could wreck needed production capabilities. Following the Windy City’s snowbirds, Motorola headed West and eventually built its landmark 56th Street facility in Phoenix, signaling the start of phenomenal growth. Eventually creating other electronics as well as semiconductors, the company grew to more than 20,000 Arizona employees at locations across Phoenix and the East Valley. You could argue that our high tech golden era began a little more than 25 years ago, when Motorola unveiled a device that changed the world forever: the portable cellular phone for commercial use.

Another significant presence began when the Valley proudly proclaimed “Intel Inside” and the company’s “fab” plants and related campuses became part of Chandler’s landscape. Now using the innovative 45nm technology, Intel is the city’s largest employer and has about 10,000 employees in the state.

Also in the mid-80s, biotechnology research started with the opening of Sun Health Research Institute in Sun City. The following year, the Mayo Clinic opened its campus in Scottsdale. The next year, Arizona State University granted master’s and doctorate degrees in bioengineering.

When it came to getting the United States and other nations into orbit and keeping them secure, the world already had discovered Arizona. Key to that reputation is Honeywell. In 1986, it purchased Sperry Aerospace and became the world’s leading integrator of avionics systems. At the end of the 1990s, Honeywell made major headlines again when it merged with AlliedSignal. When the dust settled, Honeywell Aerospace called Phoenix its home.

Tucson-based Raytheon Missile Systems also claimed a piece of history when its Patriot missile became the star of the Persian Gulf War.

By the end of the 20th century, Boeing was ready for the next conflict, as its Apache Longbow helicopter took off.

The new millennium brought a new order and the beginning of the end for Motorola as we knew it. After ON Semiconductor was spun off, the company sold its Scottsdale-based government IT division to General Dynamics, and its life-sciences arm to Britain’s Amersham. Motorola spun off its Freescale Semiconductor operation in 2003, shrinking Motorola’s Arizona payroll to 3,500. Some observers now put that number at 500 after Emerson Network Power acquired the Embedded Communications Computing group in Tempe last year.

The real growth was happening in biotechnology. One of the biggest coups occurred when the International Genomics Consortium announced it was moving to Phoenix to create the Translational Genomics Research Institute. Also in 2002, Arizona’s Bioscience Roadmap, commissioned by the Flinn Foundation, began outlining recommendations for the state to become a national biosciences leader.

ASU and the University of Arizona joined the effort. The first building of ASU’s acclaimed Biodesign Institute opened in late 2004, followed by the facility’s completion two years later. UA’s BIO5 Institute was launched to pursue life sciences research.

As you can see, the infrastructure is in place for the future to bring even more. Everyone has a chance to share the rewards. The technology industry is viewed as the bright spot of what has been a dismal economy. Arizona companies already are reporting new hires to help serve new contracts. There’s no doubt we live in a top-tier technology state.

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.”

AZ Big Media 25 years

Arizona Business Magazine Celebrates Its 25th Anniversary

An important lesson in the launch of any business or new product is to learn everything you can about your target consumer, and that’s exactly what Mike Atkinson did when he bought the Office Guide to Phoenix 25 years ago. He approached leaders in the community in such industries as health care and law, and asked them what they wanted and needed from a local business magazine.

“I took reams of notes and what came out of it was Arizona Business Magazine,” Atkinson says. “The research led me down a path of this is how it should look and read.”

Atkinson was inspired to enter the publishing arena because it presented the chance to exercise his artistic abilities. He wanted to create “a product that was fundamentally art-related and a product that could help inspire, excite and help educate,” he explains. “I’m an artist at heart, so the magazine’s pages were like my mini-canvases.”

Initially, Atkinson was the sole employee of the publication — he wrote the stories, shot the photos and sold the ads. Today, however, the company has increased to nearly 30 employees and publishes an additional six titles, including AZRE: Arizona Commercial Real Estate, Ranking Arizona, Experience AZ, People to Know, Creative Designer and Scottsdale Home & Design. The flagship publication has also undergone many changes over the years, including its frequency, which has gone from quarterly to bimonthly, and in February 2008, to monthly. The company has evolved as well, and last year was re-named AZ Big Media.

Atkinson didn’t limit his creativity to the magazines, however. In 1991, the company launched its first Arizona Home & Building Expo, which is now in its 18th year. AZ Big Media also hosts a series of awards and events that honor various segments of the business community, from health care to finance. In March 2009, the company held its inaugural Southwest Build-it-Green Expo & Conference. AZ Big Media’s newest venture, the Home & Design Idea Center, opens this summer. The company is also building a strong presence online with its new Web site, www.azbigmedia.com, where readers can find many of the stories featured in each magazine.

“If you go to our Web site, you’ll see ‘online’ is where we’re heading in the future,” Atkinson says. He adds that the future will include more home shows when the market is ready for them. He also hints of possibly even adding a radio station.

If he could go back in time and change one thing, Atkinson says, it would involve the company’s interaction with its audience online.

“At the time, we were just learning about the Internet, and I remember one of my editors came in my office and said ‘Guess where I was today? I was on the computer and I was talking to people all the way in Italy!’ and he began to describe how it took him to different places,” he says. “I thought that was pretty cool, but I didn’t have the foresight to say, ‘This computer Web thing just might turn out to be something really big!’ ”

Looking back on the past 25 years, Atkinson says his success is due to two key things: “Hard work and surrounding myself with the right people.”

Here’s to one day cashing in this 25-year silver achievement for gold.

test tubes

Biotech Startups Need To Take Ideas From Concept To FDA Approval

Arizona has always been known as a great place to start and grow a business. While some industries have been staples of our economy for some time, there’s another growing industry that is bringing jobs, capital, and most of all, innovation, to our state. Arizona has, in recent years, become home to a growing number of biotechnology and medical device companies.

At the heart of every one of these companies is an entrepreneur with a vision and an idea. Some of these entrepreneurs are starting a biotech or medical device company for the first time. That’s scary enough. But the biotech world comes with a whole other set of hurdles that makes it even harder to go to market. One of the first and most important hurdles is getting U.S. Federal Drug Administration clearance. This is a challenging process every biotech, medical device and pharmaceutical company has to face. Here’s an inside look at how startup biotech companies gain clearance for their products and bring them to market.

For starters, which companies need FDA clearance and which ones can bypass the process? Basically, if a company plans to sell its product directly to physicians and hospitals, and wants insurance companies to pay for it, it needs that FDA clearance. All entrepreneurs in this space need to ask themselves that same key question when they start a new venture: Who are you selling this to?

For a small startup biotech business, or even just an engineer with an idea, the FDA process may seem daunting, costly, and in some cases, unnecessary. Many companies try to shortcut the system or choose instead to market under homeopathic regulations, which are quite different than the FDA’s. In these cases, there is often (but not always) less testing or insufficient data to support claims of what the product can do. In some cases, small businesses think the FDA makes the process so difficult and costly they simply can’t do it. It’s important for these startups to remember that gaining FDA clearance should be seen as an investment in their company that allows them to market effectively. It may seem stifling, but it also opens doors to sales channels that wouldn’t be available otherwise and can be very lucrative.

The public often doesn’t realize there are different types of FDA clearances biotech, pharmaceutical or medical device companies can apply for.

Pharmaceutical companies apply for a new drug application, while medical devices fall into three categories:

Class 1 —
This is for low-risk devices and it costs almost nothing to submit for this clearance.
Class 2 — This is for devices that are substantially equivalent to other devices already on the market. This process can cost about $4,000 just for the submission, not including the cost of testing and developing the submission.
Class 3 — This is for new devices or devices that are deemed life supporting/assisting and can cost millions of dollars after testing and the application process is complete. It’s important to remember that only products with a Class 3 are FDA approved, while the others are FDA cleared. FDA approval simply means that the FDA was involved in the testing and it was a new product unlike any other on the market.

Any startup biotech company will want to spend ample time researching the guidelines and class definitions before applying for FDA clearance. It seems like a tedious process, but it is a sound time investment and helps ensure the company only needs to go through the process once per product. Any mistakes along the way can result in going back to the drawing board and starting the process all over again.

To avoid this, these companies need to hire employees and consultants who have been through the process and can lend guidance from experience. Also, it is strongly advised to open a dialogue with people at the FDA. They are there to help companies get through the process smoothly and efficiently, and can help a startup overcome challenges along the way.

So when should you start the process? In most cases, a company will wait until it has a product prototype or a design it’s happy with before starting the application. The process to apply can often begin at the start of the business, but the real work begins once the company has something that can be tested for safety and efficacy. The good news is once the submission is complete, and if everything in the application meets the FDA’s requirements, it will only take 60 to 90 days on average to hear back from the FDA.

Once a company considers FDA clearance they can also expect some changes to their business. As with every form of government licensing, the FDA has rules and guidelines that must be followed, and these are known as the quality systems requirements. This is simply a form of management by the FDA that ensures biotech companies offer a consistent level of quality in every aspect of their business and are marketing products in a way that will not deceive or misguide the public.

In the end, every biotech company has to decide how they are going to grow their business. As we see more and more medical device and other biotechnology companies emerge in Arizona, we’ll see them go to market in vastly different ways.

Arizona State Seal

A Quarter Century Of Wisdom Points To The Right Solution

In 1982, I was beginning my first term in Arizona’s House of Representatives. After years of spending increases, our state was suffering an economic slowdown. Recovery was just around the corner.

In 1984, Ronald Reagan was elected to his second term as president of the United States, the federal government announced that it would build an orbiting space station, and the Phoenix area was one year away from receiving its first deliveries of Central Arizona Project water.

In other words, the more things change, the more they stay the same.

Yes, we are a different state today than we were a quarter century ago.

Our population has doubled from 3.06 million to 6.8 million.

Per capita income has risen 256 percent, from $13,866 in 1984 to $32,953 today.

The world may be suffering the symptoms of an under-the-weather economy, but citizens from high-tax and high-regulation states will continue to move to Arizona, just as they have for the past 25 years. They will come because of our freedom-loving attitudes, our incredible business and environmental climate, and a commitment to nurturing opportunity.

However, since we have ignored history over the past few years, we must re-live the lessons of previous cycles. Once again, after stumbling through several years of free-spending fostered by a previous administration, Arizona must bring spending back to reality.

This is why I offer a five-point plan to cure what ails us:

  • Cut spending as much as feasible.
  • Don’t create or expand programs.
  • Stop treating one-time windfalls as permanent revenue. Even the feds must stop printing money eventually, so don’t think cash will keep flowing out of Washington.
  • Modernize our tax structure. Let’s get spending under control by 2012. Then let’s renovate our tax system to foster well-paying, sustainable jobs.
  • We must be responsible. The previous administration spent too much, and we must pay the bills, even if it leads to temporary tax hikes that automatically expire in three-to-four years.

Some think our political climate has changed. To those people I say, the more things change, the more we need the wisdom of some of the best political minds from the 20th century: Ronald Reagan and Barry Goldwater. They advocated:

  • Keeping taxes reasonable.
  • Limiting government intrusion.
  • Encouraging opportunity.
  • Creating prosperity.

Back in 1984-85, for the first time in state history, Arizona officially became a Republican state. We tended to elect conservative Republicans for decades, but many rural and blue-collar Democrats re-registered and pushed my party over the top.

When I became secretary of state in 1998, I watched a national trend away from political affiliation, which made it look like GOP domination would erode. As of April 1, 2009, our 3.1 million registered voters were split into three semi-equal groups. About 36.8 percent are Republicans, 33.8 percent registered as Democrats and 28.5 percent are not affiliated with either party.

Voters may be disenchanted with both parties, but they still love freedom, want limited government intrusion in their lives, and place their faith in the wisdom of Reagan and Goldwater.

The evidence is clear that Arizonans remain as committed as ever to limited government. This is why, come 2010, I am confident that our state will continue to follow the path blazed by Reagan and Goldwater by trusting sustainable, conservative solutions that realistically and responsibly address Arizona’s financial crisis.

Rhonda Forsyth President and Chief Executive Officer John C. Lincoln Health Network

CEO Series: Rhonda Forsyth

Rhonda Forsyth
President and Chief Executive Officer
John C. Lincoln Health Network

How would you characterize the health care industry in the Valley?
When I think of health care for the Valley, for the most part we’ve been a growth industry. We have had incredible new facilities that have been built and new partners that have come into town. … But we’ve also been experiencing the downturn in the economy right now, so we are struggling like every other business, and it’s somewhat concerning. Hospitals in particular have been a safety net for our patients, for families, for our community for quite a long time and that is being threatened because of changes in the economy.

Is the health care industry recession-proof?
A lot of people think health care is recession-proof. From our perspective though, we find that we still have people coming in for services … but many people don’t have the ability to pay for their care, and that is why we’ve experienced a downturn; people can’t pay their co-pays, a lot more people are uninsured, so they still need our services and we are here to provide for them … So, I don’t think we are recession-proof. We’ve gone through changes, we’ve had to reduce expenditures, we’ve had to look very critically at some of the services that we provide and assure that they are still mission critical.

What are the major legislative and financial issues facing the Valley’s health care industry?
Well, it’s unclear right now from a legislative standpoint, both how health care reform is going to manifest itself and then on more of a local level, what’s going to happen … the (state) Senate has passed a bill that includes pretty dramatic payment cuts for hospitals, and also reduces accessibility for many people in our community. There are proposals right now to eliminate coverage for a number of children with KidsCare. So those things are really concerning. However, nothing is in its final form and we don’t know. I would just encourage our legislators and our congressmen to really look at what it is that health care provides in the community and be thoughtful about changes that are being proposed.

What are some of the new trends in health care delivery?
It’s an exciting time to be in health care. … one of the great things that has happened is really bringing biosciences and biotechnology to Arizona, and we have really benefited by having those kinds of partnerships with researchers and with some of our scientists in the community. So, when you look at health care out in the future, you really see the opportunity to treat you as a patient on much more of an individual level, so that, through biosciences, we understand you at a molecular level, rather than just say, ‘Well, you have heart disease and the standard treatment for heart disease is X, Y, Z.’ Now we’re saying … ‘We’re looking at you and molecularly this is how you will respond to this kind of drug or this kind of treatment and we know what will work and what won’t work.’

As baby boomers age, what type of competitive edge does that give local health care facilities?
It does concern me — obviously there’s opportunity — but it does concern me from the standpoint that we have people who have far more diabetes, we’re seeing more incidences of certain types of cancers and heart diseases, and many more chronic diseases. So when you look at baby boomers aging and the incidences of chronic disease, there’s opportunity in treating those people, there’s also concern about it potentially overwhelming the health care system. We’re going to need many more nurses, physicians, facilities, and we’re going to need to be smarter about how we take care of people.

How has health care evolved locally?
The most exciting thing that I’ve seen in health care in Arizona is that providers recognize … that we do a much better job of taking care of patients when we work more closely together. So a lot of our initiatives are really bringing a health care team together to look at you as a patient and say what’s going to make sense through an entire continuum of care, and make sure you get the right treatment at the right time. Also, that we work much more cooperatively with you to do preventative work.

To what do you attribute your success at the C-level?
I think I have a great passion for John C. Lincoln and a great passion for our mission. I feel so honored to come to work every day and to work for people who are really making a difference in people’s lives. … I think I’m also analytical, I like to think strategically, I try to think beyond what are the issues of today, but look to where do I want John C. Lincoln, where do I think we should be five years from now, 10 years from now. I also very much value getting the right person in the right job, and we just have some excellent, excellent people here at John C. Lincoln. While I can look to things where I really feel I’ve made a difference here at John C. Lincoln, I know I’ve done that in the context of a really fabulous team of people.

    Vital Stats





  • Appointed president and CEO of John C. Lincoln Health Network in April 2009
  • Joined the network in 1987
  • Held executive posts at both network hospitals
  • The network includes John C. Lincoln Deer Valley Hospital and John C. Lincoln North Mountain Hospital
  • Under her leadership, North Mountain Hospital was recognized for excellent patient care by U.S. News and World Report
  • Earned a Maser of Science in business administration from Arizona State University
  • Is involved with the Better Business Bureau, the Phoenix Boys Choir and the American Cancer Society
As The Valley And State’s Hospitality Industry Has Grown So Has Its Contribution To The Economy

As The Valley And State’s Hospitality Industry Has Grown So Has Its Contribution To The Economy

Tourism is a vibrant and diverse industry, and I have been fortunate to be part of it for the past 25 years. This exciting industry encompasses culture, history, natural wonders, state parks, sports, resorts, spas, restaurants and shopping. And it’s supported by a variety of other industries such as laundry services, food services and transportation — all of which help to keep Arizona’s economy moving forward. As one of the state’s major economic generators, contributions by the travel and tourism industry have been immense. In 2007, more than 35 million visitors traveled to the Grand Canyon State and contributed $19.3 billion to the state’s economy. Additionally, tourism has generated millions in tax revenue and has employed directly and indirectly thousands of residents. 

Twenty-five years ago, tourism wasn’t nearly as lucrative. There were fewer than 20,000 hotel rooms throughout the Valley, and no spas. Visitors came to Arizona because of its scenic beauty and outdoor adventures. But the Valley, more often than not, served as a gateway to other Arizona communities and attractions. Phoenix was rarely seen as the “main” attraction for a family vacation. In 1984, Phoenix Sky Harbor International Airport had only two terminals available for travelers. The freeway infrastructure consisted mainly of the I-10 and I-17 freeways. And the Phoenix Suns were the only major professional sports team playing in the Valley.

However, because of the dynamic growth and development of the Valley, we have been able to greatly expand our tourism marketing efforts. In addition to the state’s signature beauty, outdoor adventures and Wild West history, we now market arts and culture, culinary opportunities, resorts with spas, and plenty of great shopping.

What the Valley now offers has helped define the Phoenix area and Arizona as premier travel destinations. To accommodate the growing number of domestic and international travelers, the airport has added Terminal 4, increasing passenger traffic to 40,000 travelers annually. The addition of the loops 101 and 202 has eased traffic, and the Valley now boasts 55,000 hotel rooms. The new Phoenix Convention Center has more than tripled in size, expanding from 300,000 square feet to an incredible 1 million square feet, allowing for more conventions to take place. 

The Phoenix Suns now have plenty of company — the Arizona Cardinals, the Arizona Diamondbacks and the Phoenix Coyotes — that bring visitors to the state. We have also become a featured destination on the national sports scene by hosting two Super Bowls, Cactus League spring training, the FBR Open and the Fiesta Bowl, including the Bowl Championship Series.

While we can be proud of the way tourism has evolved, like many other industries we have been hit with challenges. As a result of the struggling economy, people are traveling less. The unfortunate misconception about corporate meetings and events has had a negative impact on the industry, as well. However, it’s important to understand that although people are traveling less they are traveling closer to home, giving us opportunities to promote the wonders of Arizona to our own residents and neighbors. 

The tourism industry is resilient and will continue to be so. It is the only export industry that drives revenue to all 15 Arizona counties, and is second only to microelectronics in generating earnings that benefit Arizona’s residents. The earnings generated from tourism are spread throughout the state and have shown consistent growth, helping to create a stabilizing effect on the Arizona economy. It’s vital to our economy to continue promoting Arizona as a vacation destination.

We are fortunate to live in such an incredibly diverse state with breathtaking scenery, culture and heritage, sports, fine dining and shopping. It’s what people from thousands of miles away want to experience.