Tag Archives: may-june-2012

Valley Partnership - Rick Hearn - AZRE Magazine May/June 2012

Valley Partnership: Chairman Q & A – Rick Hearn

Rick Hearn joined the Valley Partnership Board of Directors in 2005 and has been an integral part of its leadership team, culminating with the chairmanship in this, the 25th anniversary of the organization. A 25-year veteran of the commercial real estate industry, Hearn joined Vestar in 1994 as its director of leasing, overseeing much of the leasing, marketing and broker management of Vestar’s retail portfolio in the Southwest, complementing his duties and capacities as its designated broker. Over the years, Vestar and Valley Partnership have enjoyed a rich heritage. Three of Valley Partnership’s chairmen — Lee Hanley (chairman/CEO), who participated in the original framework and served in 1995; and Pat McGinley (VP of property management), who guided the board in the 2003; and now Rick Hearn — are affiliated with Vestar.

Q: WHAT DOES IT MEAN TO BE AN ADVOCATE FOR THE COMMERCIAL REAL ESTATE INDUSTRY?

A: One word, “important.” As a Metro Phoenix-based organization advocating for the industry, our focus is precise yet flexible, and extends throughout the entire “Valley of the Sun.” The importance and responsibility of being the only real estate-based organization, not a chapter or division of a regional or national entity, but native to the Valley … “invaluable.” We are sought after and respected for our responsible positions on industry-related issues whether local, regional, statewide or federal.

Q: HOW IMPORTANT IS THAT ADVOCACY DURING THESE TOUGH ECONOMIC TIMES?

A: Advocacy is important all of the time. Each economic cycle creates differing challenges for our industry, and, bad policy decisions, regardless of timing, impact subsequent cycles. A balanced advocacy approach minimizes potential negative outcomes, while fostering prosperity for all stakeholders, both public and private.

Q: WHAT ARE VALLEY PARTNERSHIP’S GOALS FOR 2012?

A: Continued application of our founding principles — advocacy, networking, education and community projects. This past October, bolstered by our board retreat, one facilitated by Todd Hornback, a respected non-profit professional; we developed four centric goals for our 2012 focus — board development and leadership, organizational communication, development and enhancement of strategic alliances and organizational fiscal policies.

Q: HOW WILL VALLEY PARTNERSHIP ACHIEVE THESE GOALS?

A: Each element of the organization has specific objectives or goals developed at the retreat. Measurable action items are continually evaluated, whether at the organizational, board, staff or committee level. The organization’s biggest direction and efforts come from the 10 standing committees, comprised of volunteer executives (partners) that execute on those goals and objectives. Our partners are our biggest assets. For the organization to continually evolve, and pursue its mission objectives, we must develop future leadership from these committees, thus fostering partner involvement.

Q: WHAT ARE THE BIGGEST CHALLENGES IN 2012?

A: Preparing for the eventual turnaround of our industry and that of the “Valley of the Sun” we all call home, while working with our partners through this still very challenging economic cycle. Valley Partnership’s mission remains constant, continual support for all of our partners and to help their organizations prosper.

Q: AS VALLEY PARTNERSHIP CELEBRATES ITS 25TH ANNIVERSARY, WHAT LIES AHEAD?

A: The road ahead includes a reflection of our past, a continual focus on the present mission, and a strategic look at how our industry will manage the next two decades of Valley growth, which could include more than two million new Phoenicians.

This reflection has allowed us to touch our past 21 chairs so as to re-engage and respect our heritage, including the “founding” chairman, Ron Haarer Sr. (1987). And, we said a final farewell to a trusted leader and past chair in Gregg Alpert. We’ve catalogued our past accomplishments (municipal and legislative successes) or the more than 25 community projects completed, with more than $3.5M in charitable dollars raised and countless man-hours volunteered.

As to our near-term future, continued organizational governance, growth of new partners and/or new partner firms, adding emerging business sectors to our already diverse business base and strengthening our alliances. And, through our actions always declaring “Valley Partnership is the Valley of the Sun’s premier advocacy group for responsible development.”

For more information on Valley Partnership and Rick Hearn, visit Valley Partnership’s website at valleypartnership.org.

AZRE Magazine May/June 2012

crescent ballroom

Crescent Ballroom – More Than Just Music And Munchies

Crescent Ballroom extends its hours to accommodate the downtown lunch-hour crowd

Don’t let the size of this venue fool you. It’s a triple-threat host to seven nights of live music and a full-service bar, as well as two well-known chefs in its kitchen. And — it’s no longer limiting itself as a Downtown Phoenix happy hour hot spot and music joint. Crescent Ballroom is extending its hours and its demographic — opening up for lunch.

Opened in October 2011, owner Charlie Levy transformed the F.L. Hart Garage into the live music venue it is today, hosting a wide range of local and national musicians and artists. But it isn’t just the music that customers are walking, biking and light railing to experience; the food has become quite the headliner, too.

Levy joined forces with Chris Bianco of Pizzeria Bianco, and Doug Robson of Gallo Blanco, to create Cocina 10 with its locally-sourced menu comprised of what they call “Mexican-accented road food,” featuring common finger foods with a border-inspired twist.

“Even if they don’t come for a show or they’re taking a chance on a band, I always hope they enjoy the experience and the food,” Levy says. “I want them to enjoy their meal and think it’s exceptional and at a fair price, and that they enjoy the atmosphere.”

And they have, and they do.

“We kept getting feedback from customers who kept asking why the hours were so limited and why we were only open at night,” Levy says.

In April, Crescent Ballroom opened its doors during the lunch hour, starting at 11 a.m., appealing especially to the business crowd on their lunch break, Levy adds. Cocina 10 will continue to have the same menu operated by Bianco and Robson.

Crescent Ballroom is open daily with a diverse range of live music in the lounge — always free. For more information about Crescent, to view its menu or its events calendar, visit crescentphx.com.

Crescent Ballroom
308 N. 2nd Ave., Phoenix, AZ 85003
(602) 716-2222

valley partnership - AZRE Magazine May/June 2012

Valley Partnership Former Chairmen Discuss Phoenix Development – Part 1

Valley Partnership is celebrating 25 years as Metro Phoenix’s premier advocacy group for responsible development. In looking back – and also looking ahead – AZRE magazine brought together six former chairmen to discuss goals the group has successfully achieved and challenges that lie ahead.

With the commercial real estate industry making a slow recovery from the Great Recession, the advocacy role undertaken by a group such as Valley Partnership is magnified. “The surge in commercial real estate is evident,” says Richard Hubbard, president and CEO of Valley Partnership. “The comments from our past chairs provide great direction to Valley Partnership for the next several years. “With the increasing activity, it is imperative we re-energize our advocacy efforts with particular focus on the local communities while always monitoring our state and federal governments for any issue that affects our industry.” Participating were John Graham (JG), Sunbelt Holdings, chairman in 1989; Dave Scholl (DS), Westcor-Vintage Partners, chairman in 1990; Clesson Hill (CH), Grayhawk Development, chairman in 1997 and 1998; Jim Pederson (JP),  The Pederson Group, chairman in 1999; Pete Bolton (PB), CBRE/Grubb & Ellis (Newmark Grubb Knight Frank), chairman in 2004; and Charley Freericks (CF), DMB Associates, chairman in 2006. Rick Hearn (RH) of Vestar, the current chairman, served as moderator.

RH: During the past 25 years, has the level of economic development undertaken by local governments and the state been inadequate, adequate or exceptional?

PB: Frankly it’s all three. Over the years, it’s been inadequate, and it’s gone to adequate, and then I think in some cases it’s been exceptional. It also depends on which state we compare ourselves with because some states are exceptional and then some states are just barely adequate. And then you can go in the opposite direction, say inadequate, compared to Texas, and some of the other big ones across the country. Overall, we are doing a better job today.

CH: I would agree. I think there is lack of funding these days and I think that education has suffered greatly and that is a major infrastructure that needs to be rebuilt. Not just here but everywhere, and as we move forward and embrace new technology, it is a new way of life as we look toward the future.

DS: When I looked at this question, I really focused on the side of economic development and “are cities making investments?” I think that a lot of ways the cities have been trying to operate with their arm tied behind their backs. The constitution and our legislators have never really given our local government a whole lot of choices in their tool boxes. With the limited tools they have in there, they have done a pretty good job. I think that the industry I have been in has had a lot of city participation in economic development, and I think that they have been pretty aggressive about getting the most out of what limited tools the state’s constitutional statues have given.

RH: Charley, your company was impacted by this exact thing at Eastmark (in Mesa) in regard to Apple. What are your thoughts?

CF: Well it was not just Apple. It happened to us positively with First Solar. We were able to compete and win there. And with Apple, to be in the mix, I’m where Pete was. It is an evolution where economic development has come a long way since 1987. I had to think about 25 years, and I didn’t know I had been in the business that long. I look at what has happened now as the communication level of real prospects is very high and people know they’re coming and looking, which in the old days you would hear about it and it was here and gone. I’ve been in that side of the business almost my entire career chasing prospects from out of state. We come in second place to states that want to write checks. When we lose, we lose because somebody wrote a check and throws money at it to the prospect. I’ve never been a huge advocate at writing big checks. It’s a complicated business. I think we are doing a lot better chasing these deals and being in the running and again the tool kit is very limited.

JG: I’m actually optimistic about many things and this is actually one of them. My view is that being a young state one of the things that we did probably an amateurish job in early on was in economic development. I think that was a maturity problem not a “we didn’t quite get it problem.” With what we have now with GPEC and ACA and trying to address some of our structural and political and legislative problems, we got a really good pipeline of stuff that is being looked at and is being professionally handled.

JP: Certainly economic development depends on how you define it. A lot of people think that dangling a check in front of a major company is going to bring jobs into the state. But as Clesson mentioned, it’s more than that. It is infrastructure investment; it’s education and venture capital.

RH: Has Valley Partnership had a positive effect of creating a better image for developers?

Pete Bolton - AZRE Magazine May/June 2012

Pete Bolton

JP: There is a word that has been overused but I think that it is applicable. In this case, that is sustainability — the sustainability of our communities. It directly relates to our industry because we plunk down projects, neighborhoods or communities, and we depend upon a standard of living that is directly dependent on the rents that we get for our properties. During recession times, construction prices go down, land prices go down, but you have to achieve the rents if you are going to be successful at the end of the day. What Valley Partnership has done, by emphasizing how development relates to a sustainable lifestyle in the various communities where we live, is to look more beyond the block of where you are developing. It’s looking at your community, looking at your neighborhood. Looking at the various infrastructure investments that are critical to the kinds of things we do. We manufacture a product. And to manufacture the product, you need certain things, at least in the shopping center business. You need good tools. You need quality neighborhoods. You need good infrastructure investments. All of those things that directly relate to the level of rents we are going to get. In that regard I think Valley Partnership over the past 20 years has been excellent. I think it’s an organization that has emphasized the sustainability concept.

JG: I think the short answer is yes, that is has improved the reputation of how people view the development industry. The other part of that is the role that Valley Partnership will never go away because inherently we are in a conflict relationship with neighborhoods and other people. No matter how good of a job we did, it’s always going to be viewed that way. I think we have changed the conversation from one that was always in essence an adversarial, to at least everyone understanding that it is a two- or three-legged stool at a minimum, and that things have to be done by more than consensus. It has to be more by partnership and good conversation. That is why Valley Partnership will always have a role to the extent of how we want to have it because no matter how good a job we do, we will have different rubs with different constituency groups. But I think the role we need to continue to take is being the group that is not adversarial, rather constructive in those conversations for solutions.

CF: I was more optimistic on this one. My immediate reaction was absolutely that my focus was on the government. As an industry dealing with all of the city, town and county issues for regulations of our industries locally, I think Valley Partnership’s reputation really had a big impact because we have rational and moderate voices coming through consistently saying, “Gee, your regulation here is either irresponsible or maybe needs a little tune-up or maybe you missed a big idea here.” So from the professionals within our industry that we deal with, staff level government in particular, I think our reputation over the past 20 years has improved radically. I’m with the other guys here. The challenge we face will always be in conflict with residents and neighborhoods, and we need to keep doing our jobs well to keep doing that and not be controversial.

DS: I agree. I think that whenever you look at an image, you have to talk about which audience you are talking about. I think among consumers or neighborhood groups and homeowners, I don’t know if they have enough regular engagement to really understand who Valley Partnership is. I don’t know if the developers’ image among the average fellow on the street has improved that much. I agree with Charley. I think we are front of mind when a city or a local government says, “We need input, or we are thinking about changing this part of our code.” I think we are one of the first people they think of to come to the table and have the dialogue; whereas before Valley Partnership, it was a very splintered industry, and I don’t think there was a common voice and more importantly a common set of ears that listened to cities when they needed have that dialogue, too. So I think it has been vastly improved.

PB: What Valley Partnership has really accomplished with the local municipalities is to provide them with a dependable, educated voice. I remember sitting on a board and something would come up and a local municipality would ask, “Can you guys put something together on this billboard issue?”, and we would have six very educated voices at the table later that afternoon. That just doesn’t happen in any other organization. From my side of the business (brokerage), that has been extremely positive. As soon as we get the local municipalities on board, which they are, the neighborhoods rarely follow, but they don’t have much depth of voice anymore because if the politicos are truly believing the intelligent voices of the marketplace, they have a tendency to be more objective.

CH: I think part of the sustainability of 25 years of leadership is that Valley Partnership has been able to maintain frontline guys and women who are involved in development and kept them passionate about Valley Partnership. It has never faded away or lost its image in the cities to know that if we come, we will get quality people stepping up and get engaged and deliver some kind of end product. I think it’s a tribute to the leadership inside Valley Partnership to maintain that constant level of quality people.

Continue reading this article.

For more information on Valley Partnership, visit Valley Partnership’s website at valleypartnership.org.

AZRE Magazine May/June 2012

valley partnership - AZRE magazine May/June 2012

Valley Partnership Past Chairmen Discuss Phoenix Development – Part 2

Valley Partnership is celebrating 25 years as Metro Phoenix’s premier advocacy group for responsible development. In looking back – and also looking ahead – AZRE magazine brought together six former chairmen to discuss goals the group has successfully achieved and challenges that lie ahead. This is part 2 of this discussion.

Go to page one of this article.

RH: We asked this question more than 20 years ago: Do you feel the local and state government officials have a good understanding of the current real estate and banking problems in Arizona? Can that same question be asked today?

JP: I think they understand it because it is affecting their revenue significantly. Development to cities is a mixed blessing. They appreciate all of the sales taxes and the fees paid by the developers, but they have to contend with all of the complaints. Charley made an interesting point dealing with cities. Sometimes what I call the newer cities, the ones on the outskirts, don’t have the staff , the continuity or the maturity that some of the older cities have, so it’s sometimes more difficult to deal with the smaller cities. But most governments are strapped right now. That’s due to the economy and a city that is accustomed to the fees and the taxes that are derived from development. I don’t think we are ever going to have the kind of economy we did between 1994 and 2006-2007. We all have to make adjustments. Our industry has to make adjustments in terms of what we do and how we do it. We have a product to produce. Cities are going to have to make adjustments. Should cities be totally sales tax dependent? Shopping centers produce a lot of sales tax, and they welcome us with open arms. Car dealerships produce a lot of sales taxes. Shouldn’t we have a more level playing field in regards to tax generation? Just because Scottsdale has more commercial than an adjoining city, does that mean that they are going to have more revenue to support their services? I think that it is a global approach, and our cities are going to come together and address some of those concerns.

JG: I don’t think there is any question that they understand the depth of our problems. It’s all the way from their fiscal problems to the operational issues of not seeing zoning cases and their staff being cut down to skeleton-type levels. I think it is obvious that they understand that part of it. I think that when something bad or negative happens, something good comes out of it. One of the things that we are all going to benefit from in the future is that the cities are more reticent to restaff and go back to business as usual. I think from the standpoint of processing procedures, processing costs, processing time frames, and some of our worst enemies over the last decades, some of those will see some level or relief. We are also seeing some of the cities are courting us to do something in their communities. Not that they have much to give us, other than a friendly hand and encouragement to do something. But it is nice to see that they are reacting to figure out how to jump-start their own economies and their own development of their communities.

CF: I gave this question a lot of thought. We are in these long-lived projects; 20-plus years projects so you are guaranteed to have cycles. It was early in my career somebody gave me the analogy of real estate cycles. When you’re on the downhill slide, no one ever believes that there will ever be an uphill again. So the reaction is that when I talk to most of my peers, like you guys, we are starting to observe that our days are spent on positive activities or improving activities, whereas a year ago we were slugging through tenant failures, defaults and bank loans and all of that stuff . The cities are still in that downhill-looking position, so their reaction time is slower, which is frustrating. At the other end of it nobody ever thinks there is going to be a downhill again. So I love the industry. We have a balancing act; you want to take advantage of those mood swings when they work for you. But when you step back as a responsible player in this industry, you’d like to see a little more perspective and a little less reaction on the staff level. We have been fortunate. We have been in very difficult cities to deal with, which is a blessing because their staff level thinking is very good. Mesa has been through an amazing evolution with its entire team — from mayor down through the ranks. Scottsdale is a very challenging city, but it is very sophisticated and a lot of time they have a really good point. I like being held to that higher standard, even on the days I’m complaining about it. It’s nice to have lots of examples to refer different towns and cities to, and it’s nice to have Valley Partnership as a sounding board for some of those revolving towns, too.

DS: I think when the savings and loans crisis hit, maybe because it was my first downhill cycle, it seemed that more people were sort of “deer-in-the-headlights-look” than when this crisis hit. A lot of people said, “I know what mode to go into,” and even the cities knew that it was going to be a tough 4-5 years to get through. At least for me the memories of the late ‘80s early ‘90s, those that are veterans knew what you had to do and what was required at that point in the cycle.

CH: I’m going to go on a little twist. I thought Pete was going to go there first, but I’m going to the first one to throw a question back. The question is good. We talked about local and state, but what about the Feds? Is it different now than 20 years ago with the Fed? I know that for the homebuilders and mortgage regulation, it has been a lot harder on them.

PB: John made a comment about the municipalities understanding current real estate. That hit pretty solid. I don’t think what anybody understood is the way the banking system has changed and how many assets that were initially were held under the CMBS, and it is daunting to look at the RTC days and look at the special servicers of today. The banks play a role in the recovery in the downturn, and the bank’s FDIC, but the real power is coming out of Wall Street. You know what, the fascinating part of this is that they are just rebranding and heading back into something else. I mean it really is amazing to watch that place operate. And 90% of the population does not even know what is even going on in those four city blocks.

RH: What are the greatest challenges that lie ahead for Valley Partnership?

PB: Wall Street financing and the influence they have on our businesses. I think it would be a great seminar sometime. Bring in people who know how to chat about it. It’s something that now. As far as greatest challenges, I think nimbyism is right up there. We got to go vertical. The density is an issue. The economics of density is an issue. What Scottsdale has been doing lately is almost unbelievable with the 6-, 7- and 8-story apartment buildings. I thought I’d never see this. I think the downturn has some fascinating outcomes much to so many people’s dismay. But from the standpoint of Valley Partnership, how do we start switching that mentality? I don’t know if all of you agree with this, but I think that horizontal development has got to take a leap vertically, forward. And we need the politicos to support us with that.

Rick Hearn - AZRE Magazine May/June 2012

Rick Hearn

CH: I agree with that sentiment. What you’ll find is that you’ll get a number approved and then they’ll shut the door. I think it is erratic. I don’t think that they will be consistent necessarily when they determine density. I’ve already seen just in Scottsdale, with apartments, it’s a four-letter world. Even though they have enough planned, everybody is getting afraid of what’s planned, even though they won’t all show up. I think that when you have erratic behavior in a city, it’s impossible which direction. It is an opportunity to keep them educated and keep in front of them as it relates to what are the benefits.

DS: Most of the built environment that you see every day in this town has happened in the past 60 to 65 years. One of the biggest challenges that Valley Partnership has is that its membership must go forward, make a change and start addressing vertical construction. Our industry will have to start becoming better at harvesting tougher deals. I think that the days of “blow and go” at the surface is coming to a stop. In 1985, we all decided to pass a bill that we invest billions and billions into a freeway system and I don’t see a next super giant equivalent economic development dump of money like that was. I do think one of the biggest challenges for our membership, and therefore for us, is this change that is going to have to take place and really look into more sophisticated ways to do a better job.

CF: John and I were talking at a ULI gathering, saying we have a foot in each camp because we are both in very urban projects in Downtown Tempe. Pete’s right that vertical development is here to stay and it is the wave of the future. It’s complicated because the infrastructure in the cities was not sized to take on big vertical projects, so it really drives a complicated bargain for the cities and the municipalities. It has been really fun the past 5 to 6 years watching Phoenix, Scottsdale, Tempe and Mesa. When they get into that infill, they have to throw their zoning codes out and go to form-based management or some type of regulatory procedure. It is really fascinating to watch because some of these old style, stodgy cities have brought in these new-style thinkers and they’re throwing the books out and starting over. It’s really what it requires. They are going to have address the infrastructure because most of it is not sized right to go that dense.

JG: I have a general answer that I give to any organization to start with. I think that anybody that doesn’t continually evaluate purpose, value and leadership will go the way of a dinosaur at some point. The thing that Valley Partnership has actually done a good job over the past 25 years is constantly asking those questions and generating legacy-type leadership. First and foremost my hope is that we continue to adapt – as an organization. I do think, and Charley is right, that we have talked about it a lot. One of the interesting things that we can and should weigh in on is this more densification of the city and change the urban form. I think it is going to happen and if it is not done thoughtfully, the result is going to be much less fulfilling and rewarding.

JP: Maybe we are using the wrong words. I have heard vertical. What about the context of urban? Urban applies to a lot more things than verticality. It applies to design. It applies to use. It’s a small example, but look what has happened on 7th Avenue and McDowell. By converting the property, it’s jobs. It’s a planners dream. Jobs, housing, entertainment, and shopping in one spot. I don’t think that if you have a well-conceived project like that, then maybe they (cities) will have to redo their codes and maybe they might have to redo their outlook. But they get it. It’s what they were taught in school and if you can generate that excitement not only on the city level but on the community level, I think most people would get it instead of being absolutely terrified.

RH: What are the greatest opportunities that lie ahead for Valley Partnership?

JP: We are going to have to understand that our industry is going to change, I think, drastically. I don’t think we are going to Buckeye or Queen Creek anytime soon. We are necessarily talking about infill development; we are talking about the more urban concepts. That is going to involve a transformation of thinking and that is going to involve everyone in our industry. I’m excited about it. I can see opportunities within 4 or 5 miles from where we are sitting now. Same thing in Downtown Tempe. Same thing in Downtown Glendale. The same thing in any area that has a great mass of density. Hopefully an income level that would sustain a good quality development that needs the services that I provide; the need for services that all of us provide. That is the exciting challenge. It was pretty easy back in the day. You go out and buy 20 acres and put down a grocery store, some shops, and a couple of paths and you go on your way. But 6 months later you have Walmart pouring footings across the street. Our experience with infill, once is happens, it is tougher to do. You’re dealing with land assembly. You’re dealing with environmental remediation. You’re dealing with high-priced land. If you can get it done, your competition is limited.

JG: The issue is – and I have seen this a lot recently – is who is waiting for the momentum play versus things just getting better regardless of what you do? Prosperity versus the creativity play. I do think that this urbanism issue is one that will give us more lengths to recovery; a better place to live. It isn’t the only thing that Valley Partnership should focus on, but I think it is uniquely qualified to do a lot in that discussion just because of the cross section and the diversity it has in its membership.

CF: There is another dimension of redevelopment that we haven’t really touched on. Our first big project as a company was Centerpoint in Downtown Tempe. When I was going to ASU there was a lot of old, rundown stuff there. It is immensely rewarding to just go see a re-creation of things that have deteriorated and were once rundown. My personal experience, I was on the front of what was the old Caterpillar Tractor Desert Proving Grounds, and now we are doing Eastmark. We are taking these vast pieces of really underused infilled properties.

CH: There may be the need to guide the committee structure and leadership toward urban redevelopment and higher density issues. How do you back fill for infrastructure? Water lines need to be this big. There needs to be more priority put on the types of issues that Valley Partnership needs to focus on. Valley Partnership has never been a self-policing type of situation. If there was a way to get a grassroots raising of the bar in our industry, have a position and a dialogue that causes the membership to say that they want to operate at a higher bar than they are used to, a lot of good leadership could come out of it. Valley Partnership could drive the message of its own.

DS: When I look at the greatest opportunity or challenges, I have two thoughts. One is I continue to believe that the best work that Valley Partnership does is at the grassroots levels and what it does with all of its cities and towns and educating the staff and working with them to write new ordinances. Urban infill is a green field. They are going to have a lot of homework to do. In the job of being the communicator and sharer of great ideas, Valley Partnership can really play a great leadership role. I think that the challenge and opportunity is to make sure that you have the right staff and have the right committees and have people who are committed and engaged to get in there. I have been blessed to see the impact we have on city managers and planning directors and staff people by just having a dialogue and saying this doesn’t work and let me tell you why. I think that there is great opportunity.

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5 Most Important Advocacy Issues
1. Passage of Proposition 303 in 1998, which created the Growing Smarter Act and allowed for municipalities to purchase Arizona State Trust Land for Conservation. This combined with the all-out effort to defeat a Portland-Style Growth Boundary Proposal, Proposition 202, which was on the ballot at the same time.

2. Collaborated with the City of Phoenix to draft the “Big Box Ordinance,” which protected the ability of retailers to operate facilities larger than 100,000 square feet.

3. Revised the Arizona State Statutes, which regulate municipality’s ability to use sales tax revenue to reimburse commercial real estate developers for the installation of public infrastructure.

4. Revised the Arizona State Statutes to preserve the Government Property Lease Excise Tax (GPLET) to promote redevelopment in blighted areas of municipalities.

5. Supported the City of Phoenix at the Arizona Supreme Court by filing an Amicus Brief in Turken v. Gordon. The Amicus Brief helped persuade the Supreme Court that a municipality’s use of sales tax to reimburse developers for the cost of public infrastructure was not in violation of the Arizona Constitution.

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For more information on Valley Partnership, visit Valley Partnership’s website at valleypartnership.org.

AZRE Magazine May/June 2012

Steve Grauer - AZRE Magazine May/June 2012

Q&A: Vice President/Western District Manager Steve Grauer

Steve Grauer shares how he got started in the construction industry and what he thinks about the future of Hensel Phelps Construction in Arizona.

Q: How did you get your start in the construction industry?

A: As a young boy, I was constantly around the construction business. My father was a vice president of an interior subcontractor in the Northwest. During high school, my brother and I worked part time on residential projects doing laborer work and light carpentry. While attending college (University of Washington), I continued to work on commercial projects as well. I knew from an early age that construction was an industry that I wanted to be part of and that would provide a challenging career. Construction has certainly done that for me.

Q: Hensel Phelps has made its mark in Arizona for more than 30 years, with 30 projects worth an estimated $1.8B. How proud are you of that mark?

A: I am extremely proud to continue the legacy whose foundation was set in 1979. A repeat corporate client, IBM, brought us to Tucson from Colorado. Our continued success with IBM on their projects in Tucson created the opportunity to continue to work together and took us further West to California, where today we have two district offices. The construction market has changed greatly in Arizona since then. With the approval of Alternate Project Delivery Methods in the early 2000’s, the diverse portfolio of project types that Hensel Phelps undertakes, as well as the experience of our people on those projects, has allowed for growth and opportunities with many new owners. Regionalization and establishing a permanent presence here is key to developing longterm relationships with owners, subcontractors, designers, trade associations and the communities our people live in. We are proud to live and work in a community and state as great as Arizona.

Q: How did Hensel Phelps weather the Great Recession, which took its toll in Arizona on the commercial real estate industry?

A: This year marks Hensel Phelps’ 75th anniversary in business. From that first farmhouse in Northern Colorado that Hensel built, we have come a long way and seen many tough and challenging times. The Hensel Phelps organization and the Western District each had their 3 best years in our 75-year history during the Great Recession. We attribute this to our repeat clients that continue to entrust their projects to us, relationships in the Industry as a whole and the unparalleled performance of our people. We are grateful for all of them.

Q: Hensel Phelps is completing its portion of PHX Sky Train this year and embarking on another major project – the Solar Tower in La Paz County. How optimistic are you about Hensel Phelps’ presence in Arizona the next 10, 20 or even 30 years?

A: I am extremely optimistic and confident about our continued presence in Arizona in the future. In the construction industry, change is constant. Market sectors and economic conditions are always providing challenges to change. It is a matter of survival. While we may not look exactly the same 30 years from now, we will be here.

Q: You went to college in Washington and now live in Arizona. How important is the Western Division to the overall picture at Hensel Phelps?

A: The Western District, covering Arizona, Southern Nevada, New Mexico and Oklahoma, is extremely important to Hensel Phelps. Establishing a local presence, committing to the communities in which our families live and developing relationships is critical to our continued success. Prior to our corporate commitment of establishing a district office in Arizona, these states where covered by other district offices. Our CEO and President, Jeff Wenaas, is from Tucson and attended both UA and ASU. There is a strong commitment from the top. Arizona and the Southwest have been and will continue to be very important to us. We are the local contractor with the national reach!

Q: As Vice President and Western District Manager, what project (or projects) are you most proud of?

A: As a district manager, I am proud of all of our projects, but most importantly our people and performance on those projects. We are fortunate to get the opportunity to perform a wide range of project types for both public and private owners, utilizing a wide variety of project delivery methods. The depth of experience of our people allows them to seamlessly operate on these different projects and exceed our owner’s expectations in the overall construction experience.

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STATS:

  • Number of years with HP: 22, with stints in Washington, California, Nevada, Utah and Colorado.
  • Number of years as Vice President/Western District Manager: 4
  • Family: Wife Stephanie and daughters Morgan and Skyla; and two Labrador Retrievers, Dakota and Mocha.
  • Hobbies: Traveling, fishing, hunting and shooting.
  • Favorite sports teams: Denver Broncos – and of course the Arizona Cardinals.

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For more information on Steve Grauer of Hensel Phelps Construction, visit Hensel Phelps’ website at henselphelps.com.

AZRE Magazine May/June 2012

McCarthy - Bo Calbert - AZ Business Magazine May/June 2012

First Job: Bo Calbert, SW President McCarthy Building Companies

Bo Calbert, Southwest President McCarthy Building Companies, discusses his first job as a caddy and the things that helped him get to where he is today in the construction industry.


Bo Calbert

Title: Southwest President
Company: McCarthy Building Companies

What was your first job?
When I came home from the last day of sixth grade, my father said, “Son, it’s about time you got a job.” We lived right across the street from Hickory Hills Country Club in Springfield, Mo., which is where (deceased PGA star) Payne Stewart learned to golf and where his father was a big golfer. So I walked across the street and got a job as a caddy. It was tough. I’d get there at seven in the morning, had to sweep all the sidewalks to earn the privilege to caddy, and at the end of the day I had to pick up all the balls on the driving range.

What did you learn from that first job?
Working as a caddy at a country club was all about service and dependability, and developing relationships were important. If you didn’t build good relationships with people, they wouldn’t request you to be their caddy.

Describe your first job in your industry.
It was building a high-rise office building in Houston, and I was low man on the totem pole. I was the field engineer, doing all the layout. It was a concrete frame, and I was holding the dumb end of the tape. I got a battlefield promotion because the lead engineer hurt his back. I’d been out of school six weeks when I got that promotion.

What lesson did you learn in your first industry job that still helps you today?
If you’re willing to take responsibility and you’re not afraid to ask for the tough jobs, you will get a lot of recognition early.

What were your salaries in your first job and in your first industry job?
I got $1.60 an hour to shag balls and $3.50 to caddy for 18 holes. My first salary was $22,000 a year in the construction industry.

Who would you consider as your biggest mentor?
Chuck Thompson was the chairman of 3D International, a large engineering construction firm. He’s the one who got me my first interview with McCarthy, and he is the smartest, most talented individual I know. If you had to credit someone with the development of construction management as a process, Chuck would probably get the credit. He’s got a tremendous amount of integrity. In our business, people put a lot of trust in you when they hire you to build their project. You have to have the integrity to make all the right decisions.

What advice would you give to someone starting today in your industry?
What worked for me is that I volunteered for tough assignments that other people might not want to do. Taking on challenges and getting the reputation as someone who is not afraid to take on those challenges is a key thing that people should do early in their career.

For more information on McCarthy Building Companies, visit McCarthy’s website at mccarthy.com.

Arizona Business Magazine May/June 2012

green schoolhouse - AZRE Magazine May/June 2012

This Green Schoolhouse Rocks

Phoenix’s Roadrunner Elementary School is going green thanks to Hensel Phelps and a California-based organization

Investment in a child’s education takes on an entirely new meaning with the Green Schoolhouse Series project. Started in 2008, the Green Schoolhouse Series is in the process of creating the world’s first LEED Platinum design schoolhouse.

In Arizona, it’s happening at Roadrunner Elementary School in Phoenix. Hensel Phelps Construction Co. is the general contractor and one of the first companies to reach out to the project.

“Hensel Phelps’ participation is all about giving back to the community where our employees and their families live and work,” says project manager Alex Bertolini.

“Hensel Phelps’ teamwork, drive and passion for the project continues to amaze the (Cause and Effect Evolutions) team as well as the other partners that have signed onto the project,” says Stefanie Valles, public relations coordinator for San Diego-based Cause and Effect Evolutions, a cause marketing/business development organization.

The Green Schoolhouse Series is a collaboration bringing together corporations, foundations, school districts, communities, media outlets, and volunteers to build high-performance, environmentally-sustainable, LEED-Platinum designed Green Schoolhouses at Title I, low-income, public schools. Hensel Phelps was the right pick for the project because of its reputation in the school-building market as well as being a leader in sustainability, Valles says.

The work at Roadrunner Elementary, 7702 N. 39th Ave., will provide students the opportunity to learn the importance of sustainability and its relevance. Construction began in May and is expected to be complete in July.

Green Schoolhouse Series projects are not just rewarded “Platinum” because of sustainability features, but also for being an influence that ultimately increases students’ performance in school. More than 300,000 trailers are used as classrooms across the country. A quarter of U.S. classrooms are considered dangerous and cause health problems in students, leading to their absence and overall neglect of educational benefits.

According to Greening America’s Schools Reports, the American Federation of Teachers and National Clearinghouse for Educational Facilities, there is a significant improvement in the following areas:

  • Improved learning: 26% progression in math and 20% progression in reading;
  • Healthier students: 5% increase in attendance and 9% decrease in asthma-related absences;
  • Cost savings: 33% reduction in energy usage and 30% reduction in water usage.

The founders of the Green Schoolhouse Series project, Marshall and Jeff Zotara, began school makeovers long before the company formed. In 2001 they influenced the growth of elementary school sustainability by implementing energy conservation and gardens.

The Green Schoolhouse Series focuses on students in K-12. The Safari model, which is being built at Roadrunner Elementary, will be completed for grades K-5. The Studio is for grades 6-8 and the Loft is for high school students. The project’s purpose at Roadrunner will lead the students and community through a journey of discovery of sustainability through the plan’s technology and education.

While the school is intended for students to move forward in education, the architectural plan, produced by architectural firm Stantec, was designed entirely backwards. All the components were donated before the building process began; therefore the design had to revolve around the various materials that were provided.

If the features mentioned weren’t fascinating enough, the schoolhouse construction would not be built by contractors but by at least 1,000 volunteers. Now that’s an investment in education.

Cause and Effect Evolutions “looks and asks for any skilled volunteers that would like to give back (to the community),” Valles says, as well as the corporate sponsors of the project. More than 1,000 volunteers have donated their time and effort into producing the LEED Platinum design schoolhouse. The volunteers were presented with an “accelerated extreme home-makeover schedule, which is unlike any other building project,” Bertolini says.

The Safari model was also rewarded the Edward E. Kirkbride award in May 2011 for excellence in educational and innovative planning and design. Roadrunner’s added on, versatile space will affect students, parent groups and the community.

“The Green Schoolhouse is geared toward a modern learning environment and provides students with a green mode of thinking,” Bertolini says.

For more information on the Green Schoolhouse Series, visit Hensel Phelps’ blog at henselphelpsconstructionco.wordpress.com.

AZRE Magazine May/June 2012

Food Truck Friday - Short Leash Hotdogs

Taking It To The Streets On Food Truck Friday

The Phoenix public market and Food Truck Friday stimulate the community and economy.

Each Friday on Central and Fillmore, students, seniors and dressed-down businessmen and women mingle and munch at an event that not only satiates the appetite, but stimulates the economy, too — the Friday Food Truck event at the Phoenix Public Market.

In 2010, the Phoenix Street Food Coalition joined forces with the Phoenix Public Market to create the first Food Truck Friday event, which launched that November with five trucks. Since then, the event has had to adapt to the growing number of patrons.

Brad Moore, owner of Short Leash Hotdogs and founder of the Phoenix Street Food Coalition, says the number of food trucks has doubled, increasing from five to 11.

“(Food Truck Friday) has been instrumental in helping food truck owners grow their business, and I think its helped to contribute to the overall awareness and success of the Phoenix Public Market,” Moore says.

The Phoenix Public Market recently added a covered patio with family-style seating where customers are able to converse and catch some shade. Moore says, on average, about 750 customers attend each Friday; and it’s quite the diverse group, too.

“We’ve seen everything from stay-at-home moms and those in the workforce, to senior citizens taking field trips to the Market, ASU classes reserving tables and civic groups,” says Cindy Gentry, executive director of Community Food Connections. “We’ve seen quite the range of people.”

Gentry, Moore and Cindy Dach, director of Roosevelt Row, all agree that the weekly Food Truck Friday event helps strengthen the sense of community within downtown area.

“It has a significant impact,” Dach says. “The success of Phoenix relies on the experience. People want to walk and bike and see a familiar face. The Market is a catalyst for that community impact.”

Because of the growing success and popularity of the event, the Market has added Wheel Food Wednesday to its events calendar, which features about nine food trucks. They have also extended the time of Food Truck Friday an extra half hour. They’re even planning to expand the venue’s space — into the street.

“Because the event is growing and more people are attending,” Gentry says, “the next frontier is to close off the street.”

For more information about the Phoenix Public Market and its weekly events, including Food Truck Friday and Open Air Saturday, visit foodconnect.org.

PHX skytrain - AZRE Magazine May/June 2012

All Aboard The PHX Sky Train

PHX Sky Train Stage 1 at Sky Harbor is a moving example of Hensel Phelps’ grand presence and reputation in Arizona

Ask Allan Bliesmer what’s most special about the $644M PHX Sky Train project, and his answer isn’t that surprising.

“The team effort toward a common goal,” responds Bliesmer, operations manager for Hensel Phelps Construction Co., general contractor for the Stage 1 fixed facilities of the massive project at Sky Harbor International Airport. “The city, designer, and Hensel Phelps addressed each challenge with a solutions-orientated approach.

“The people involved in the project refrained from developing or maintaining personal agendas, and worked together, utilizing each member’s expertise, to develop the best design and construction solutions for the project.”

Once Hensel Phelps was selected as construction manager for the first phase of the train’s stations and elevated guide-way tracks, preliminary work began and lasted 20 months — from June 2008 to February 2010. (Bombardier Transportation was chosen as the system provider).

Stage 1 — a 1.7-mile stretch — will transport airport visitors and employees between METRO light rail, east economy parking and Terminal 4, which serves 80% of Sky Harbor’s passengers. Stage 1 is scheduled for completion in 2Q 2012.

What was it about the company that helped Hensel Phelps land such a historic project? Prior to the start of the PHX Sky Train project, Bliesmer says, Hensel Phelps had just completed the automated train project at the Dallas-Ft. Worth International Airport. The Dallas-Ft. Worth system was installed throughout the entire airport and spanned a total of 5 miles in length with 8 stations.

In addition, Hensel Phelps has completed billions of dollars of aviation work around the country including automated train systems, terminals, hangars, administration facilities, rental car facilities, air traffic control towers and parking structures at a number of airports.

But one feature that makes PHX Sky Train different from other projects is a 350- foot bridge that carries the train above an active taxiway that is large enough for a 747 to pass through. An article in a national construction magazine boasted that the project “features many innovative design elements,” including the bridge.

“The Taxiway R crossing is a unique item not generally featured at other airports around the world,” Bliesmer says. “In order to maintain full use of the taxiway, the design had to accommodate a ‘bridge’ that would not encumber the use of the largest aircraft planned at the airport.

“To satisfy this, a 350-foot cast in-place concrete ‘bridge,’ at an elevation of 80 feet above grade, was incorporated to provide the necessary clearance. Another innovative approach was the use of precast tub girders in lieu of cast in-place concrete structural elements for a majority of the guideway structure,” Bliesmer adds. “The use of precast allowed the construction team to minimize the real estate needed on the ground to install shoring required for a traditional cast in-place concrete approach, resulting in minimization of issues associated with public access, airport operations and safety.”

The automated train was a necessity. Sky Harbor serves 42M passengers a year, and the number is projected to rise to 40M to 50M in 2013. The goal is to remove about 20,000 cars and trucks — up to 20% of the traffic circling Sky Harbor — from the airport area. The project is also a boon to the local economy. Stage 1 has created an estimated 6,000 jobs.

What are some of the challenges Hensel Phelps faced?

“The primary challenge with the integration of such a large construction project into an active airport,” Bliesmer explains, “is completing the work without causing interruption to the airport and airline operations, as well as maintaining safe access by public and airport employees.”

In order to accomplish public safety and minimize any impact to the airport operations and airline operations, much of the work activity is conducted during night-time hours when flight activity and public access at the airport is at a minimum, Bliesmer adds.

Stage 2, which will continue through the airport to the rental car center, was scheduled for completion in 2020. But last June, the Phoenix City Council voted to move up completion of a .6-mile section to connect Terminal 4 with Terminal 3, along with a walkway for passengers to access Terminal 2, to early 2015. Final cost of the project: $1.5B.

“The state-of-the-art system installed at Sky Harbor is the latest and greatest in the industry,” Bliesmer says proudly. “Having the opportunity to work with the City of Phoenix and the aviation team at Sky Harbor has furthered Hensel Phelps’ experience and recognition throughout the industry.”

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PHX SKY TRAIN BY THE NUMBERS

  • 14M: Pounds of precast concrete
  • 12M: Pounds of structural steel
  • 5,000: Drawings issued for construction
  • 340: Subcontracts issued
  • 40: Miles of wiring (power cabling)

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For more information on PHX Sky Train, visit Sky Harbors’ website at skyharbor.com/about/automatedtrain.html.

AZRE Magazine May/June 2012

enviromission solar tower - AZRE Magazine May/June 2012

Super Solar Tower To Rise From Desert Floor

‘Look, up in the sky!’ Super Solar Tower will rise 2,800 feet from the desert floor in Arizona’s La Paz County.

For 75 years, Hensel Phelps Construction Co. has made a name for itself around the world with innovative building projects. However, the best is yet to come.

In 2013, the Western District Hensel Phelps office in Phoenix is to begin construction on a proposed $740M, 2,800-foot Solar Tower in La Paz County in western Arizona.

“The project is fantastic on several fronts,” says Mark Watson, chief estimator for the Phoenix office, “from its size to the simplicity behind its great power generation capabilities and we are extremely excited to be part of this renewable energy solution that will change the way the world looks at alternate power generation.”

To appreciate the height of the Solar Tower, which is being built for EnviroMission of Australia, consider that the tallest building in Arizona is the Chase Tower in Downtown Phoenix at 483 feet. Now picture six Chase Towers stacked atop each other and you have the Solar Tower — which also has a diameter of 450 feet.

To appreciate its simplicity, here’s how it works. A 4-square-mile greenhouse will heat air and direct it up through the concrete chimney. The hot air will turn turbines to produce 200 MW of electricity, enough to power 50,000 homes.

Despite its simplicity, the project is challenging. And that’s why Hensel Phelps was chosen. Hensel Phelps has built other challenging projects that included specialized infrastructure components such as rocket launch facilities for NASA in Florida and California, aviation infrastructure at airports around the country (including the PHX Sky Train at Sky Harbor International Airport), military bases, and U.S. ports of entry.

When asked why Hensel Phelps was the right fit for the solar tower project, Chris Davey, president of EnviroMission, says the decision was twofold.

“One, their internal culture is second to none,” Davey says. “They tend to recruit people young out of college and train them the Hensel Phelps way. They stay there for extended periods of time. That reflects the kind of work they do.

“And two, Hensel Phelps takes on projects that are the first of their kind — and not just high-rises or hospitals. They build launch pads, sky trains … and solar towers.”

The pricing approach for a project of this scale requires the components to be broken down into manageable subsystems that can be supported by the local, state, national and world market, Watson says. Solar Tower’s components consist of a concrete tower, collector system, foundation systems, turbines, transmission and electrical infrastructure. Each of these components has been built in other applications throughout the world and are easily quantifiable. The real challenge for this project, Watson adds, is not the uniqueness of the components or design, but the logistics of corralling the various stakeholders.

“The exceptional development team assembled by EnviroMission draws experts from all over the world that in itself requires a high level of collaboration that is not always apparent on many projects,” Watson says. “On one hand, efficiencies and cost savings are achieved through commoditizing the relatively few but high quantity materials. On the other hand, given the size and location of the project, consideration is given to the transport of men and materials to the point of installation. Whether it is getting the resources to the project site or 2,800 feet in the air, logistical challenges exist due to the project scale.”

A company and its capabilities are defined by the people who work there. And it is those people within the organization that bring the necessary experience for any project.

“Hensel Phelps has the best professional builders in the industry,” Watson says proudly. “They are a diverse team of determined, can do, problem solvers with a culture that continuously challenges its people to think outside the box and develop creative solutions for the most challenging problems.”

Hensel Phelps also understands the importance of collaborative planning and analysis during the early stages of this challenging project, Watson says.

“We utilize proven pre-construction processes to ensure that the project will receive accurate and reliable data with regard to cost, constructability, and key systems selections to ensure EnviroMission’s is a facility that exceeds the expectations for functionality, efficiency, maintainability, and cost effectiveness for the life of the structure.”

Davey says Hensel Phelps’ experience is a key component to the Solar Tower, which will generate electricity to 10 municipal utility companies in the Southern California Public Power Authority.

“So many things have to happen for a project like this to succeed,” Davey says. “You need to have the right partners on board.”

The EnviroMission Solar Tower is a significant project. Hensel Phelps builds unique projects regularly throughout the country that require construction innovation and an adaptable approach in order to be successful. From those experiences, Watson says, the company has created a solutions orientated team of construction professionals.

The project’s significance likely will also be felt in the state’s fragile commercial real estate industry.

Adds Watson: “Part of the significance of this project is the positive impact it will have on the Arizona construction industry by maximizing the use of local subcontractors and vendors.”

For more information on Hensel Phelps Construction, visit Hensel Phelps’ website at henselphelps.com.

AZRE Magazine May/June 2012

homebuyers - Arizona Business Magazine May/June 2012

Homebuyers Bounce Back

The rules have changed a bit, but it’s still a perfect time to purchase a home.

If you have good credit and a good job history and can put money down for a house, it’s a great time to buy, say experts in real estate and finance. In fact, the sooner the better, because it may soon turn into a seller’s market for housing.

And mortgage rates could be climbing as well. Mortgage buyer Freddie Mac recently announced that the average rate on 30-year loans had jumped to the 4 percent level for the first time in three months.

According to attorney Kevin Nelson of Tiffany & Bosco, whose practice focuses on mortgage and real estate, homebuyers can get very attractive packages if they have the solid down payments and credit. “Homeowners can also refinance if they have substantial value in their homes. But lenders are still very cautious about permitting homeowners to have lines of credit,” Nelson says. “And they probably still will be until the financial problems in Europe and unrest in the Middle East calm down.”

Both larger banks and mortgage companies say business is very good. “In the past 10 years, we have never done as many loans per month as we are doing right now,” says Tim Disbrow, regional sales manager for Wells Fargo Bank. “We are the No. 1 lender by a longshot for all mortgages across the state, including Fannie and Freddie and FHA.”

Although some in the lending industry say big banks are moving very slowly in making home loans and can’t keep up with the volume, Disbrow disputed that. “Consumers who go to banks for mortgages are just being asked to document their savings, job history and salaries, something that they weren’t asked to do in the boom years,” he says.

The same rules apply with all lenders now, he says, whether they are banks or mortgage companies. Customers everywhere have to meet the same requirements based on Fannie and Freddie guidelines.

For conventional conforming mortgages of $417,000 or less that are insured by Fannie Mae and Freddie Mac, down payments must be 5 percent or more. Down payments for FHA loans are 3.5 percent. Jumbo loans also seem to be widely available, but lenders generally do not sell them to Fannie Mae and Freddie.

“The big difference between us and mortgage companies is that customers may have to pay other loan originators more in fees,” Disbrow says.

Foreigners are helping fuel the rising demand for homes in the Phoenix area, but plenty of Americans are buying as well. Canada, New Zealand and Australia are well represented. Many foreign buyers pay cash, but some mortgage companies offer loan programs for them. Buyers are often investors attracted to the housing market by low home prices and the potential for high rents.

Eric Bowlby, president of AmeriFirst Financial in Mesa, estimated that about 40 percent of the homebuyers in Maricopa County are cash buyers, while 60 percent get mortgages.

Surprisingly, even those who lost their homes in a foreclosure or short sale can finance homes with mortgages, but they must put down fairly substantial down payments. They can even get an FHA-insured loan from three to five years after losing their previous home.

But to get a Fannie Mae-backed mortgage or one from Freddie Mac, someone who had a foreclosure has to wait from five to seven years. However, if a buyer can verify that some hardship led him or her to walk away from their property – like the loss of a job or an illness – they may get relief from the time requirements.

According to Bowlby, even if someone was upside down in their mortgage and walked away, AmeriFirst has a hard money hedge fund that will finance mortgages almost immediately for those who have the income to qualify and make a 25 percent down payment.

“Even those who are one day out of foreclosure or bankruptcy may be able to qualify,” he says, “but the interest rate is 12 percent.

The rate may be high, he says, but it’s still cheaper to buy than to rent because of the homeowner’s tax deduction and the current increases in rental rates.

ATTRACTING BUYERS

Recently, Wells Fargo announced that it is bringing a new pilot program to Phoenix in an effort to help stabilize housing markets.

The Neighborhood LIFT program, already available in Atlanta and Los Angeles, is designed to help communities attract qualified prospective homebuyers to neighborhoods that are struggling with high inventories of unsold homes.

In Phoenix, the bank has a five-year goal of making $3 billion in such loans. Prospective homebuyers can qualify for down payment assistance grants of up to $15,000, covering home and renovation financing and will also participate in home buyer seminars and tours of properties for sale. There are limits on the amount of income families can have and limits on the size of loans.

Arizona Business Magazine May/June 2012

 

CityScape Plaza - Arizona Business Magazine May/June 2012

CityScape At The Center Of It All

CityScape revitalizing downtown Phoenix with its myriad dining, shopping and entertainment choices.

The arrival of CityScape has done more than change the business and entertainment landscape of Downtown Phoenix.

“CityScape has been a boon for booking meetings and conventions because of the dining, shopping and entertainment options it provides right at the doorstep of the convention center and downtown hotels,” says Scott Dunn, associate director of communications for the Greater Phoenix Convention & Visitors Bureau. “It’s not like downtown has a dearth of restaurants or nightlife; but what it largely lacked before CityScape was a sort of concentrated, recognizable ‘bug light’ zone that attracts pedestrian visitors. With CityScape and the nearby Legends Entertainment District, downtown now has that, and meeting planners the CVB brings to town take notice.”

Since CityScape opened in 2010, the $500 million, mixed-use urban development has become Downtown Phoenix’s destination for business, nightlife, shopping, entertainment, and special events. CityScape has capitalized on being bordered on three sides by the city’s new light rail transit system, and the fact that its neighbors include US Airways Center, Chase Field, the Phoenix Convention Center, Arizona State University’s 8,000-student downtown Phoenix campus, City Hall and the Maricopa County administrative and court complex.

“CityScape has become an authentic urban space for residents and tourists to organically gather and interact in a way that has never existed in Downtown Phoenix,” says Jeff Moloznik, general manager of CityScape.

Because of that, CityScape has come to define the resurgence of Downtown Phoenix.

“Probably the biggest indication that the perception of Downtown Phoenix has changed is the NFL’s decision to bring the Super Bowl back to Arizona in 2015,” Dunn says. “The transformation of downtown was a major part of the Arizona Super Bowl Host Committee’s pitch to the NFL, and the NFL obviously liked what it saw. Remember: The last time the Super Bowl was here, there was no CityScape, there was no light rail, there was no new Sheraton or Westin. Downtown was pretty much a construction zone. CityScape embodies the renaissance of the city’s urban core — and in 2015, when the world is watching, it will be even better.”

CityScape, like downtown, continues to evolve. It added three new restaurants in late 2011 — The Breakfast Club, The Strand and Chipotle — and will continue add to its dynamic roster in 2012.

“Starbucks and Chloe’s Corner opened earlier this year and Palomar Phoenix at CityScape, a 242-room luxury boutique hotel operated by Kimpton Hotels, will open later this spring,” Moloznik says. “Silk Sushi is also a new local spot that will join our diverse restaurant offering this summer.”

CityScape has started to drive more traffic downtown through special events and activities, including an ice skating rink over the winter and a well-received Saint Patrick’s Day party.

“No matter the time or day, something is always happening at CityScape,” Moloznik says. “We’ve introduced a community-focused lineup of unique, interactive outdoor events at Patriots Square, which is located in the heart of CityScape. Just one example is our weekday ‘Pop Up Park,’ where lunch-goers can soak up the sunshine and socialize with fun, free activities from 11 a.m.-1 p.m. At no cost, you can play Scrabble, Jenga, corn hole, get books and magazines from a free loaner library, use lawn chairs and blankets, Frisbees and a basketball hoop. A DJ spins live music and you can have a picnic in the park by grabbing a quick lunch at Chipotle, Jimmy John’s, Five Guys, Vitamin T or Chloe’s Corner.”

Beyond the delicious food from The Arrogant Butcher and the fun of Stand Up Live, Copper Blues, and Lucky Strike, CityScape has become an epicenter for the Phoenix business community. The office tower at CityScape is at nearly full with major employers, including UnitedHealthcare, Alliance Bank and several of the Valley’s most powerful law firms.

“CityScape is a collection of the best of businesses and individuals in the Valley,” Moloznik says. “From (restaurateur) Sam Fox’s Arrogant Butcher to (Phoenix Suns owner) Robert Sarver’s Western Alliance Bank, the most progressive and entrepreneurial talent in the Valley have convened at CityScape. The impact our tenants’ businesses have brought to Downtown Phoenix is noticeable and significant. In an area that once lacked a central core, there is now energy, creativity, enterprise and excitement all day, every day in once central location.”

Calling CityScape Home

Alliance Bank  *  Alvarez and Marsal  *  Ballard Spahrz  *  Brownstein Hyatt Farber Schreck  *  Buzz Mouth  *  Cantor Law Group  *  Charming Charlie  *  Chipotle  *  Chloe’s Corner  *  Copper Blues Rock Pub and Kitchen  *  Corporate Office Centers  *  CVS Pharmacy  *  Fidelity Title  *  Five Guys Burgers and Fries  *  Gold’s Gym  *  Gordon Silver  *  Gust Rosenfeld  *  Jennings, Strouss and Salmon, PLC  *  Jimmy John’s  *  Kimpton Palomar (opens in June)  *  Lucky Strike  *  Mybullfrog.com Verizon Wireless Premium Retailer  *  Par Exsalonce  *  Polsinelli Shughart  *  Raza Development Fund  *  RED CityScape Management Office  *  RED Development  *  Republic of Couture  *  Silk Sushi  *  Squire Sanders (US) LLP  *  Stand Up Live  *  Starbucks  *  The Arrogant Butcher  *  The Breakfast Club  *  The Strand  *  Tilted Kilt  *  UnitedHealthcare  *  Urban Outfitters  *  Vitamin T  *  West of SoHo  *  Yogurtini

Arizona Business Magazine May/June 2012

Dan Pierce, President of Kitchell, AZRE Magazine May/June 2012

Q&A: President Dan Pierce of Kitchell

Q&A: Dan Pierce, President of Kitchell

Q: Technology is playing an important role in today’s construction market. What are some of the latest advancements you’re seeing utilized to make building better?

A: We’ve seen remarkable advances with respect to building information modeling (BIM) technologies. The capacity to share information efficiently has enhanced our ability to collaborate with owners and architects. Tablets, iPads, laptops and smartphones are commonplace — the line between design and construction has blurred. And I’ve been very impressed with the caliber of the young people who have chosen construction as a career. Their aptitude in leveraging the various technologies are enhancing our capacity to service our customers.

Q: How has Kitchell developed such a strong presence in healthcare?

A: I think that we’ve managed to develop strong relationships with our customers over the years. For example, we have worked on the hospital campuses that are now part of Banner Health since 1962. Those types of relationships have helped us anticipate many of the challenges that face healthcare providers in our marketplace. We see ourselves as strategic partners.

Q: Are you seeing signs of promise in Arizona’s commercial construction industry?

A: Despite Arizona’s oversupply in most market sectors of the built environment and the fact that we will likely be lagging most areas of the country in terms of economic recovery, we are seeing more activity in 2012 with a number of our design partners. Our development company is also seeing more activity. I see that as a very positive sign and I am optimistic.

Q: How has Kitchell managed to stay successful during the past five years?

A: Because of our diversity, we have been able to remain nimble and adaptive to the marketplace. This is what makes us unique. The size of our company — and the fact we’re employee-owned — is perfectly suited to be fluid and flexible, to be able to adjust workloads to exactly where we need to be at any given moment.


Dan Pierce has had a hand in the construction of numerous commercial projects throughout the Southwest, and has been with Kitchell for more than 30 years, having joined the company right out of college. As President of Kitchell Contractors, Pierce oversees divisions, including everything from renewable energy and healthcare to custom homes and medical technology planning.

Pierce has a bachelor’s degree in construction from Arizona State University. He served on the Accreditation Review Board and the Department Advisory Council when the construction management program was established at Northern Arizona University. An ASHE-Certified Healthcare Builder, he is on the Board of Barrow Neurological Foundation, has served on the Board of the Foundation for Blind Children and is involved in the American Society for Healthcare Engineering.

For more information on Dan Pierce, President of Kitchell, visit Kitchell’s website at kitchell.com.

AZRE Magazine May/June 2012

ManufacturerOfTheYearAwards

Manufacturer Of The Year Awards 2012

The Arizona Manufacturers Council and the Arizona Chamber of Commerce and Industry recognized the achievements and contributions of four exceptional manufacturing companies at the 2012 Manufacturer of the Year Awards on May 11 at the Hyatt Regency Downtown Phoenix.


Manufacturer of the Year:
Suntron Corporation

Suntron CorporationPhoenix-based Suntron’s largest market segment is the defense industry. Given the importance of the defense and aerospace industry in Arizona, Suntron enhances the state’s current efforts to develop this industry and helps position Arizona as a strong candidate to be designated by the FAA as a testing site for unmanned aircraft systems. Suntron led efforts — and continues to lead efforts — in re-shoring. Suntron educates other companies about benefits of manufacturing in the U.S. and risks and costs associated with offshore manufacturing. Suntron’s renewable energy manufacturing and assembly experience includes electronics for hybrid and electric cars, smart grid power reduction equipment, and green initiative lighting fixtures, as well as solar-powered GPS rotation control systems and field measurement devices for the nuclear industry.

“Our competitive strengths allow Suntron’s renewable energy customers to enjoy the benefits of leveraging our integrated model to improve their time to market,” says Michael Seltzer, vice president of sales and marketing for Suntron. “We can enhance manufacturing flexibility, reduce inventory liability, remove redundant and non-value add processes, and simplify customers’ supply chain.”

Outstanding Small/Medium Manufacturer:
CMC Steel Arizona

CMC Steel Arizona LogoCommercial Metals Company’s Mesa facility is the nation’s first micro-steel mill. The facility is the most cost effective producer of rebar in the world due to the technology employed by the plant. The facility was built according to the latest environmental standards. CMC employs environmentally conscious designs for manufacturing steel and reinforcing bar. The company plans to add nearly 200 manufacturing jobs at the facility by the end of this month. CMC will boost the Gateway area’s plan to become a major economic center due to the plant’s proximity to Mesa Gateway Airport and the surrounding local businesses, as well as ASU’s Polytech campus. CMC chose its Mesa location due to the positive business environment of the Gateway area. Commissioned in August 2009, CMC Arizona quickly ramped up to full capacity within the fi rst year of operation. The mill’s compact, effi cient footprint is designed to economically serve the Southwest and surrounding markets. CMC Steel Arizona leveraged the engineering and steelmaking knowledge of its most talented employees and strives to continue to improve its efficiencies to benefit both customers and shareholders. This cutting-edge technology helps CMC deliver high quality products on time, every time.

Excellence in Innovation:
Larson Camouflage Dunn-Edwards Corporation

Larson CamouflageLarson — which has grown its business more than 200 percent in the past five years — has a history of coming up with increasingly creative and unusual ways to camouflage antennas for wireless network developers. Utility concealment components made by Larson include saguaros for Arizona customers, broad-leafed trees, palm trees and various conifers, complete with epoxy bark and realistic needles supplied by artificial Christmas tree manufacturers, and flagpoles. Larson works with site developers to ensure each project is being accurately designed, coordinated, fabricated and installed. Larson places the same emphasis on the appearance and integrity of its sites that each carrier places on the functionality of their network.

Among Larson’s more notable clients is Pebble Beach Golf Links. Larson was hired to build four snags, which were designed to look like trees that have been struck by lighting, because that’s what blends with the landscape there. In addition, Larson created a fake chimney to hide antennae at the historic clubhouse.

Excellence in Sustainability:
Dunn-Edwards Corporation

Dunn LogoDunn-Edwards chose Phoenix in 2009 to construct the most automated and eco-efficient manufacturing and distributing paint facility in the world. As a result, the company brought 150 manufacturing jobs to the area in the fields of engineering, process control, instrument technician, research and development, information technology and machine operation. The 336,000-square-foot plant manufacturing facility is the world’s first LEED Gold-certified manufacturing facility. The company was awarded the coveted LEED Gold-certification in June of 2011. LEED is the nation’s preeminent program for the design, construction and operation of high performance green buildings. Recycled materials were used to build the facility. The operations design incorporates innovative technology for the reuse of manufacturing by-products. Products manufactured at the Phoenix facility use the latest and greatest green technology made from renewable resources.

Manufacturers of the Year honored

Arizona Manufacturers CouncilThe Arizona Manufacturers Council recognized winners at the 2012 Manufacturer of the Year Summit and Awards Luncheon on Friday, May 11, at the Hyatt Regency Downtown Phoenix, 122 N. 2nd St.

For more information on the Manufacturer of the Year Summit and Awards Luncheon, visit Arizona Chambers’ website at azchamber.com/events.

 

Arizona Business Magazine May/June 2012

kitchell hospital construction, AZRE Magazine May/June 2012

Technology Revolutionizes Hospital Construction

“Humanity is acquiring all the right technology for all the wrong reasons.” — R. Buckminster Fuller 

With apologies to the sage Buckminster Fuller, the technology that is being developed for hospital construction is being done so for all the right reasons: to enhance quality, increase speed, decrease waste, save money and boost safety.

On the current, and extensive, renovation of Chandler Regional Medical Center, which features 180,000 SF of new construction anchored by a 5-story tower, Kitchell is harnessing the latest technologies, and refining new ones, that will continue to evolve as hospital construction unfolds until the opening in spring 2014. The project began with evidence-based design of the re-envisioned hospital featuring a triangle- shaped bed tower and a complete reorientation of the entrance.

Some of the challenges facing the hospital construction team include reorienting the main entrance, extensive infrastructure work, upgrading the central plant, doubling the emergency room and an intricate kitchen renovation — all while patients continue to receive uninterrupted care with no risk of infection. Fortunately, Kitchell has teamed with other professionals eager to utilize the latest technology to streamline the building process while enhancing quality and preserving safety. And it certainly helps that the entire hospital construction team is committed to tearing down the traditional “wall” between the design and construction sides, which is a win-win-win (owner, designer, construction firm — not to mention the building’s inhabitants) for all.

An integrated hospital construction team was established from the start that includes owners, architects, engineers, facility users, subcontractors and suppliers. Here are some tactics the team is deploying to achieve success:

  • Virtual model created three years out
    From the beginning, Kitchell, architect Orcutt | Winslow, Van Borem and Frank, Paragon and LEA Engineers designed and coordinated the project utilizing the most up-to-date BIM software. Integrating Archicad and REVIT into a federated model of the building (include an accompanying image) yielded a virtually constructed facility three-plus years in advance of the tower receiving its first patient.
  • Continuous collaboration courtesy of the Human Factor
    At the job site, a free-flowing workspace complete with design studios and interactive spaces facilitates innovation and consolidates the creation of intellectual property and management of construction. All of the hospital construction project’s principal players are empowered to make decisions and to commit resources on the spot, all in the same room, to keep momentum moving forward. Work studios are defined by activities to be tackled, not disciplines. This co-location “no silos” approach breaks down traditional barriers between engineers, designers and construction personnel while stimulating dialogue and innovation.
  • Lean and streamlined
    Each step of the building process is analyzed to promote continuous and reliable workflow throughout and identify ways to avert possible clogs in the project stream. As the project moves from design to construction, Kitchell is using the earlier planning and knowledge of technology to make the construction process as lean as possible. Pull planning, bringing subcontractors into the scheduling process, has been critical.Early BIM planning is setting the stage for prefabrication of interior corridors, systems and bathrooms. This is not your grandfather’s prefabrication — this is highly sophisticated off -site, controlled building of highly complex and technical components which, once built, are literally “plug and play.” The philosophy behind this strategy is to maintain quality and increase speed of construction while decreasing waste.
  • Full-scale (foam or wood) mock-ups
    Kitchell will construct a full-scale mock-up of the prefabrication areas to demonstrate not only what the finished rooms will look like but also what it will feel like to physically experience the spaces. Even the smallest details were designed in REVIT to enhance the authenticity of the final mock-up.
  • In the field
    Vela Systems enables real time data to be gathered and tasks assigned and transmitted right from where the work is happening via Kitchell’s mobile application on iPads. There is no distinction between in-the-office and in-the-field. RFIs, submittals, project specifications, drawings, etc. are available to everyone — including owners and subcontractors — for immediate, actionable information. Being able to identify and communicate potential issues saves time- and labor-intensive, costly rework caused by incomplete or old information.
  • BIM kiosks — 24/7 access to information without a computer
    Once the construction of the new patient tower is in full swing, several BIM kiosks will be activated so subcontractors will be able to pull up documents and the latest coordinated models throughout the hospital construction. These are all housed in a digital archive.

Decades ago, even just a few years ago, the type of technologies deployed to make design and hospital construction a seamless, flawless process were virtually unheard of. But without these advancements, the world of commercial design and construction would involve much more guesswork and risk. In today’s building world, the right technologies are being deployed for the right reasons.

For more information on Kitchell and their hospital construction projects, visit Kitchell’s website at kitchell.com.

AZRE Magazine May/June 2012

manufacturing - Arizona Business Magazine May/June 2012

Computer & Aerospace Manufacturing – Arizona Builds Its Financial Future

Computer and aerospace manufacturing plays a significant role in Arizona’s financial future.

The economic storm that has wreaked havoc for most businesses was barely a breeze for Michael McPhie.

“We were really not affected negatively,” says the CEO of Curis Resources, a mineral exploration and development company in Florence. “The economic downturn really did not affect the demand for some commodities, so copper mining continues to be a significant economic engine for the state.”

With 10 percent of the world’s copper supply coming from Arizona, a combination of continued high demand from China and innovative and cost-effective methods of extraction allowed the copper industry — one of Arizona’s oldest professions — to weather the economic storm with little damage.

While Arizona’s Top 10 manufacturing companies added about 3,200 jobs in 2011, some of the state’s other manufacturing companies were not so lucky.

“It certainly wasn’t easy, especially for our smaller manufacturers, who make up 79 percent of Arizona’s manufacturing sector and employ four or fewer people,” says Mark Dobbins, senior vice president and secretary for SUMCO Phoenix Corporation, which manufactures silicon wafers for the semiconductor industry. “Although companies of all sizes were affected by the recession, they were probably hit the hardest.”

While the state’s manufacturing sector is holding steady, the uncertainty coming out of Washington and in the financial markets has not helped its economic recovery, according to Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry.

“The federal health care law, EPA regulations and a National Labor Relations Board that has taken positions hostile to manufacturing has likely done more to slow recovery than spur it on,” Hamer says. “The governor and the Legislature, however, have responded decisively, passing in 2011 a once-in-a-generation economic competitiveness package that makes Arizona more attractive than ever to manufacturers.”

The Arizona Competitiveness Package includes a mix of tax reforms and business incentives designed to encourage expansion among existing Arizona companies, while establishing Arizona as an attractive location for businesses worldwide.

“Arizona manufacturers have underperformed in the export arena as compared to other states in the last several years,” Hamer says. “Economic competitiveness legislation passed by the Legislature and signed by the governor last year goes far in attracting manufacturers, especially those who sell beyond Arizona borders.”

While the landmark 2011 legislation was a shot in the arm for manufacturing and business, the Arizona Manufacturers Council — which serves the state in conjunction with the Arizona Chamber of Commerce and Industry — has identified several legislative issues that are important to manufacturing in 2012, Hamer says. The Arizona Manufacturers Council is striving to:

  1. Streamline regulations and the issuance of permits.
  2. Eliminate barriers to economic development created by inadequate infrastructure for capital intensive manufacturing operations.
  3. Promote a friendlier legal environment through tort reform.
  4. Support policies that will strengthen the solvency of Arizona’s unemployment insurance system.

“We need a clearly defined economic goal and strong collaborative leadership for the next five, 10, 15 and 20 years for the state,” says Dobbins, who is also immediate past chairman of the Arizona Manufacturers Council. “We need a clear education pathway to support Arizonans’ having the job skills to meet the challenges of that goal. We have the infrastructure to become a major player in all of our primary industry sectors. Now we have to create the political will to set the state’s objective to become the international commercial and business hub of the Southwest.”

To get there, Dobbins says, “We need to rid ourselves of outdated policies that discourage businesses from relocating here and be aggressive at pursuing growth. We must invest in education and fund our schools and universities properly so they produce graduates who are vocationally skilled and/or STEM-skilled and job-ready.”

Even in the copper mining industry is transitioning into a knowledge-based workforce, McPhie says.

“We are working with local colleges so we can attract and educate the best and the brightest engineers, hydrologists and geologists,” McPhie says. “There are tremendous opportunities to make significant wages in the copper mining industry, particularly because there will be a significant numbers of retirees due to our industry’s aging workforce.”

It’s not just the mining industry that is looking for a new generation of workers. “We’ve also seen manufacturing (hiring) pick up substantially in the last month,” says Andy Ernst, regional vice president for Robert Half International, a staffing services firm.

While Dobbins says the computer and electronic product manufacturing is generally considered among the state’s strongest manufacturing areas, the production of transportation equipment — which includes the aerospace and defense industries — could be the most captivating, yet challenging, sector to watch in the next several years.

Boeing Phantom Eye

Photo courtesy Boeing

“The advent of Unmanned Aircraft Systems (UAS) in the defense sphere is extremely exciting for Arizona manufacturing,” Hamer says. “The AMC is working with the Arizona Aerospace and Defense Commission and other stakeholders to secure Arizona’s position as a leading location for research and development, manufacturing, and testing of UAS, and we are supporting Arizona’s proposal to be designated by the Federal Aviation Administration as a national UAS testing area.”

Arizona’s largest aerospace and defense companies are investing in the future of UAS, which the military uses to track enemy movements, bomb targets and move supplies without putting soldiers in harm’s way. Boeing moved its unmanned division to Mesa, where it can manufacture the A160T Hummingbird, the company’s flagship unmanned aircraft, once every 12 days. Raytheon in Tucson is working on several UAS innovations, including an operating system that would make it easier to install various brands of sensors and communicate among multiple unmanned aircraft.

But aerospace and defense isn’t the only area expected to create new jobs.

“In addition to the potential growth of Unmanned Aircraft Systems in Arizona, Intel’s $5 billion investment in a new factory in Chandler will require 1,000 workers and is creating 14,000 jobs in the construction sector in anticipation of the facility’s completion in 2013,” Hamer says. “The investment has a tremendous downstream effect on other companies.”
Renewable energy is another potential hotbed for growth.

“If it is able to overcome certain global market challenges, certainly the solar industry has big growth potential for the future of our state,” Dobbins says. “Also, as long as we, as a society, continue to be in love with personal electronics — computers, laptops, cell phones — and our cars, manufacturing in Arizona will continue to grow.”

To help that growth, the Arizona Chamber of Commerce and Industry is focused on two initiatives:

  1. Southwest<>Direct, which aims to make Arizona the international commercial and business hub of the Southwestern U.S.
  2. A collaboration between the education community and business to secure highly trained, vocational skills-certified and STEM-certified employees for today and tomorrow’s increasingly technical workplace.

“The Chamber and the AMC are (also) working together to promote a tax environment that attracts manufacturing, including reforms to the state’s treatment of income derived from capital gains, and lengthening the time businesses can carry losses forward against future profits as way of encouraging more startups and businesses that require large capital investments,” Hamer says.

Despite the increase in job creation and slight decrease in economic despair, the state’s manufacturing sector still faces some challenges.

“With looming federal budget cuts, Arizona’s defense and aerospace manufacturers stand to face some big changes,” Hamer says. “It is incumbent upon our leaders to continue to position our state as a leader in this field by aggressively pursuing Unmanned Aerial Systems flight testing, research and manufacturing in Arizona.”

Hamer says that it will be imperative for lawmakers and business leaders to have a unified vision for the future of manufacturing in Arizona.

“Arizona needs to be mindful of the growing creep of regulations and red tape that stifles business’ ability to focus on innovation and investment,” Hamer says. “Gov. Jan Brewer recognized this when her first act as governor was to institute a regulatory moratorium; the Legislature soon followed the governor’s action with a sweeping regulatory reform package of its own. Increased transparency in the regulatory sphere at all levels of government will help attract (new) manufacturing to Arizona.”

ARIZONA AEROSPACE

Here are four of the major players in Arizona’s defense and aerospace industry:

Boeing: The company’s 4,878-employee Defense, Space & Security facility in Mesa is best known for producing the AH-64 Apache attack helicopter for the U.S. Army. Additional work at the Mesa facility includes production of electrical subassemblies for the F/A-18, F-15, and C-17 aircraft.

General Dynamics: With more than 5,400 employees at its Scottsdale headquarters, General Dynamics C4 Systems specializes in command and control, communications networking, computing and information assurance for defense, government and select commercial customers in the U.S. and abroad.

Honeywell International: With more than 10,000 employees at 21 Arizona facilities, Honeywell International contracts with the Department of Defense through both their Aerospace and their Automation and Control Solutions business units. In particular, Honeywell Aerospace is headquartered in Phoenix, with major facilities in Tempe, Glendale, and Tucson.

Raytheon Missile Systems: Headquartered in Tucson with 12,000 Arizona employees, Raytheon Missile Systems designs, develops, and produces weapon systems for the U.S. military and the armed forces of more than 50 countries.

Arizona Business Magazine May/June 2012

Manufacturing Companies

Arizona’s Largest Manufacturing Companies

Arizona’s 10 largest public and privately held manufacturing companies, ranked by the number of employees based on full-time equivalents of 40 hours per week and based on industry research.

ŒRaytheon Co.
Arizona employees in 2012: About 12,000
Employment change since 2011: Added about 500 jobs
2010 revenue: $25.2 billion
Principal: Taylor W. Lawrence, president
Company’s focus: Missile manufacturing
Year founded: 1922
Headquarters: Waltham, Mass.
Phone: (520) 694-7737
Website: raytheon.com

Intel Corp.
Arizona employees in 2012: About 11,000
Employment change since 2011: Added about 1,300 jobs
2010 revenue: $43.6 billion
Principal: Paul S. Otellini, president and CEO
Company’s focus: Semiconductor manufacturing
Year founded: 1968
Headquarters: Santa Clara, Calif.
Phone: (480) 554-8080
Website: intel.com

ŽHoneywell International Inc.
Arizona employees in 2012: 10,100
Employment change since 2011: Added about 384 jobs
2010 revenue: $33.4 billion
Principal: Tim Mahoney, president and CEO, aerospace
Company’s focus: Aerospace manufacturing
Year founded: 1952
Headquarters: Morristown, N.J.
Phone: (602) 231-1000
Website: honeywell.com

Freeport-McMoRan Copper & Gold Inc.
Arizona employees in 2012: About 7,600
Employment change since 2010: Added about 600 jobs
2010 revenue: $19 billion
Principal: Richard Adkerson, CEO
Company’s focus: Mining
Year founded: 1834
Headquarters: Phoenix
Phone: (602) 366-7323
Website: fcx.com

General Dynamics C4 Systems
Arizona employees in 2012: 5,402
Employment change since 2011: Added about 376 jobs
2010 revenue: $32.5 billion
Principal: Chris Marzilli, president
Company’s focus: Defense, communications
Year founded: 1952
Headquarters: Falls Church, Va.
Phone: (480) 441-3033
Website: generaldynamics.com

‘Boeing Co.
Arizona employees in 2012: 4,878
Employment change since 2011: Added about 78 jobs
2010 revenue: $64.3 billion
Principal: Harry Stonecither, CEO
Company’s focus: Aircraft manufacturing
Year founded: 1916
Headquarters: Chicago
Phone: (480) 891-3000
Website: boeing.com

’Freescale Semiconductor
Arizona employees in 2012: 3,000
Employment change since 2011: Stayed about even
2010 revenue: $4.5 billion
Principal: Rich Beyer, chairman and CEO
Company’s focus: Microchip manufacturing
Year founded: 1953
Headquarters: Austin
Phone: (512) 895-2000
Website: freescale.com

“Shamrock Foods Co.
Arizona employees in 2012: 1,828
Employment change since 2010: Added about 47 jobs
2010 revenue: $1.650 billion
Principal: Norman McClelland, CEO
Company’s focus: Processor of dairy products
Year founded: 1922
Headquarters: Phoenix
Phone: (602) 477-6400
Website: shamrockfoods.com

”Microchip Technology Inc.
Arizona employees in 2012: About 1,539
Employment change since 2011: Lost about 21 jobs
2010 revenue: $1.487 billion
Principal: Steve Sanghi, CEO
Company’s focus: Microcontroller, memory and analog semiconductors manufacturing
Year founded: 1987
Headquarters: Chandler
Phone: (480) 792-7200
Website: microchip.com

•Orbital Sciences Corp.
Arizona employees in 2012: 1,378
Employment change since 2011: Lost about 58 jobs
2010 revenue: $1.294 billion
Principal: Christopher Long, vice president and GM Gilbert operations
Company’s focus: Aerospace manufacturing
Year founded: 1963
Headquarters: Dulles, Va.
Phone: (480) 899-6000
Website: orbital.com

RealEstateGuru-TanyaMarchiol

Real Estate Guru Tanya Marchiol Draws On Athletic Background

When athletes suffer catastrophic injuries, it’s usually a game changer. Real estate guru Tanya Marchiol — a collegiate volleyball star who played professionally in Italy — was no exception.

“I was working as a golf cart girl, trying to figure out what to do with my life,” Tanya Marchiol recalls. “One day, the cart flipped and crushed my ankle. I ended up in the hospital for six months, and doctors had to completely reconstruct my leg.”

To help her daughter pass the time and give her some direction while she was on bed rest, Marchiol’s mother gave her some real estate books to read, and a passion was born.
“I brought everything I learned playing volleyball — work ethic, teamwork, problem-solving skills — to real estate,” Marchiol says.

It paid off. After an agonizing six months of surgeries, Marchiol took her real estate exam and started buying and selling properties. Her neighbor at the time, Justin Lucas of the Arizona Cardinals, heard about what she was doing and asked for her help. That year, he bought 13 houses and Marchiol’s company — Phoenix-based TEAM Investments — was born. Marchiol developed a system for educating and empowering athletes — including quarterback Donovan McNabb, former ASU and Miami Heat star Eddie House, and baseball star Bengie Molina — to intelligently handle their financial and business matters.

“No one was really teaching athletes how to use real estate in their portfolios to create income,” Marchiol says. “Most athletes — particularly football players who have an average professional career of three years — will have to do something when they are done playing. I can help them invest in a way that they know they’re going to have an extra $10,000 a month coming in if they get hurt or their career comes to an end.”

Tanya Marchiol AZ Business May/June 2012

It’s not just athletes who have benefited from Marchiol’s advice and guidance. Marchiol teaches entrepreneurs, investors and individuals how to not only maintain their current financial status but also create generational wealth. Her expertise has led to appearances on the NFL Network, Fox News, CNN, FOX Business News, and most recently as a recurring personality on HGTV.

“As a woman who grew up in a family of powerful men, I know what it takes to walk into a room, command respect and get the deal done,” Marchiol says. “Women need to understand the power that they have. They need to believe in themselves and create an air of confidence. When they do that, being a woman becomes an asset in any industry you want to tackle.”

For more information on Tanya Marchiol and Team Investments, visit Team Investments’ website at teaminvestmentsinc.com.

 

Arizona Business Magazine March/April 2012

Swanky Seniors - Sagewood, AZRE Magazine May/June 2012

Swanky Seniors

Sophisticated assisted living and senior care developments look more like resorts than the traditional ‘old folks home’

As America’s senior population swells to an unprecedented volume — 62 million seniors, almost double the number of seniors at the turn of the century — luxury senior care and assisted living development is on the rise in Arizona.

Thankfully, assisted living no longer means sending Mom where bingo is all she looks forward to. Many developers in the assisted living field are building contemporary, sophisticated senior care facilities to accommodate expensive tastes and active lifestyles. These residencies are opulent and lavish, more like resorts than the gloomy, industrialized “old folks homes” of decades past.

When considering livability factors, such as decreased mobility or heightened sensitivity to cold, Arizona’s flat terrain and temperate climate are a natural draw for seniors. In the past several years, senior housing has been the most active type of development in Scottsdale.

Anticipating the influx of a mammoth demographic, several senior care facilities are in the planning and developmental stages.

Orchard Pointe, a 104-unit assisted living apartment facility in Surprise, broke ground in March. Developed by Heritage Management Services and Telis Commercial Real Estate, Orchard Pointe will open in spring 2013.

Mark Huey, president of Telis Commercial Real Estate, says Orchard Pointe will “bring a Midwestern ethic of care and concern to the Valley, packaged in a high-luxury lifestyle.”

Mountain West Contracting is general contractor and RAR Architects is the architect.

In Tucson, The Freshwater Group is building a new assisted living community called Hacienda at the River.

Hacienda at the River will provide remarkable taste and services, from greenhouses on site to serve organic foods in dining facilities to an all-pets-welcome policy.

Hacienda will also raise horses on site for equine therapy for residents with memory affliction, dementia, and other animal therapy aids.

David Freshwater, president of the Freshwater Group, says the revolution in senior care is palpable.

“Our spas, workout rooms, and cafes look more like Starbucks and LA Fitness rather than the traditional old folks homes,” he says. “They really, truly have changed in design to reflect the different clientele than who we’ve been serving the last 25 years.”

Hacienda at the River is still in the design phase. “It will be assisted living, Alzheimer’s or what we call ‘memory care,’ as well as skilled nursing and rehabilitation,” Freshwater says.

Maravilla Scottsdale, which was scheduled to open in May, will also cater to epicurean tastes. Boasting multiple landscaped courtyards, a cinema, Internet lounge, chip-and-putt golf course, spa, and multiple dining venues, Maravilla Scottsdale is indisputably of the new generation of assisted living.

The 120,000 SF facility offers 178 apartment-style living units and 39 villa-type living units, plus common areas such as the lodge, fitness center, commercial kitchens, and an indoor swimming pool.

The Weitz Company is building Maravilla Scottsdale. It’s also the general contractor for Sagewood, a multi-phase retirement community comprised of 12 casitas, four villas and eight buildings housing independent living, assisted living and skilled nursing units in North Phoenix.

sagewoodSagewood offers diversity in the levels of care provided, often easing the transition from minimal to increased living assistance.

Future phase expansions are planned to complete this site’s development. Once completed, the community in its entirety will carry the promise of progressive living in an environment that emphasizes choice, flexibility and independence for its residents, says Kelly Billings of the Weitz Company.

Scottsdale’s The Colonnade, another resort-style assisted living facility, opened in 2004. Now, The Colonnade will break ground later this year on the second phase of construction, adding villa type housing units to its existing residencies.

The developer behind The Colonnade is Sun Health, an up-and-coming player in the healthcare industry.

“Our standard finishes are high end, including full GE appliance packages, wood line window covering, and ceramic tile flooring,” says Sharon Grambow, Sun Health’s senior living coordinator. “Residents can select premium package upgrades, including quartzite countertops and cherry cabinetry tile with diamond metal decorative inserts.”

Belmont Village Scottsdale, a three-story assisted living apartment building, contains of 136 units — 111 independent living apartments and 25 dementia care units — at the 100,000 SF facility. It sits on a 4.17-acre site with a courtyard pool and walking path.

Houston-based Belmont Village AP has 20 assisted living facilities in seven states, and opened its Scottsdale location in February. This project cost more than $30M, says Belmont CEO Patricia Will. Located southeast of 100th St. and Frank Lloyd Wright Blvd., the community was built by W.E. O’Neil Construction.

Vi at Silverstone also opened in 2010 on 32 acres and offers 270 independent-living units to Northeast Valley seniors. Developed by The Plaza Companies, built by Summit Builders and designed by DAVIS, the $195M project is all about individual preferences.

More importantly, says Sharon Harper of The Plaza Companies, it offers seniors an abundance of choices.

“People have all kinds of choices in terms of size and location, and they really can customize what they would like,” Harper says. “There’s a vibrancy embedded in the neighborhood and the greater community and that creates excitement and the opportunity to continue to be educated. We offer innovation, fitness and overall wellness.”

AZRE Magazine May/June 2012

Phoenix Convention Center

Conventional Wisdom – Catering To Phoenix Visitors

Debbie Cotton has gone from helping people travel around Phoenix to trying to convince people to travel to Phoenix.

Cotton, the former director of the Phoenix Public Transit Department, is about six months into her role as director for the Phoenix Convention Center.

“The biggest difference for me is that each day is very different,” says Cotton, who replaced John Chan, who became community and economic development director for the City of Phoenix. “Each customer of the Convention Center has their own set of individual needs, so we have to come in here and reinvent ourselves every day so that we can fulfill our clients’ needs.”

Catering to convention-goers’ needs are more important than ever. To compound the hit that the economic downturn placed on the convention industry, Arizona’s tough stance on illegal immigration has put the state in a negative light in some decision-makers’ eyes, and an incident where a lesbian couple was asked to leave a downtown restaurant ignited a social media firestorm.

“People are very aware of some of the social unrest we’ve had in the community,” Cotton says. “That is one of the things that people have questions about when we talk with them about coming to Phoenix.”

If you look at the numbers, the controversies don’t seem to have an impact on tourism’s bottom line. A report from Dean Runyan Associates shows that gross sales at state hotels have increased more than 12 percent since 2010, and travel spending in Arizona has increased 7.9 percent since 2009. Gov. Jan Brewer signed SB 1070 — the strictest anti-illegal immigration measure in recent history — into law in 2010.

“In the next five years, we will have 900,000 delegates come through the Convention Center doors with an economic impact of $1.3 billion,” Cotton says. “That is a slight increase from the previous five years.”

A $600 million expansion project that tripled the size of the Convention Center and was completed in 2009 has raised the profile of both the center and the convention industry in Phoenix. In 2010, the Convention Center received the Inner Circle Award from Association Meetings Magazine, which ranked the facility as one of the 15 best Convention Centers in the nation for service excellence. And in April, the Phoenix Convention Center was ranked seventh among the best U.S. convention centers by Business Review USA.

“The addition of ASU and CityScape have given downtown more vibrancy and a youthful exuberance that has really made a difference for visitors,” Cotton says. “People want to play and have fun here. We need more of that.”

To get the Convention Center to the next level, Cotton and her staff plan to launch a redesigned website and use social media — Twitter and Facebook — to engage their customers and increase their speed to market.

“One of the things that we’ve found creates a more dynamic experience for visitors are the Downtown Phoenix Ambassadors,” Cotton says of the orange-shirt-wearing, information-wielding walking concierges of downtown. “We want to get them more involved on the front end so that we differentiate ourselves from other communities. Once we get them here, we know they will come back.”

To help fill some of the vacancies the Convention Center has on the books, Cotton instituted a sales training program that will complement the comprehensive guest experience training that the staff has undergone since the center was expanded.

“We have been so busy over the last few years with our growth, that we didn’t have time to slow down and focus on some of the finer details,” Cotton says. “Now that things have slowed down and our expansion is complete, we have more time to incorporate training, build leads and close deals. Now it’s time for us to become the best of the best.”

For more information on the Phoenix Convention Center, visit the Phoenix Convention Center’s website at phoenix.gov/phxpccd.html.

Michael Pollack - Real Estate Investments

Michael Pollack, Real Estate Investments

Michael Pollack discusses his experience in the real estate industry in Arizona.

Michael Pollack

Title: President and Founder
Company: Real Estate Investments


What was it about the real estate industry that attracted you?

My grandfather and father were in the real estate industry. Growing up, all I really knew was real estate. When I was in the fourth grade, I gave a presentation on how to read working blueprints. So I’ve been doing this a long time.

Video by Cory Bergquist

What qualities helped you become successful in your industry?

I believe that you have to be honest, you have to have integrity, and you have to work really hard. This is not a business that is easy. You have to be able to roll up your sleeves and work really hard.

What qualities do you think a successful CEO needs to possess?

I work sometimes seven days a week and four or five nights a week. But it’s not working to just work, it’s working smart. It’s important that you lead by example.

Are there any obstacles to working in Arizona that you might not face in other states?

We’re still not compared equally with metropolitan areas like New York, Chicago or San Francisco. They are seen much more as financial hubs. Our state leaders really need to focus on what’s important today: employment and diversification. We built this state on construction. We built the economy by building homes to house the construction workers. Now, we need to diversify so that we build a more sustainable economy.

How has your industry changed since you started?

When I started, you could do a residential contract on one page. So it’s changed a lot in that it takes a lot more paper to do essentially the same thing.

How do you think your industry is going to change in the next 10 years?

One of the things that is going to be very important going forward is the lessons learned — hopefully — in 2004, 2005, 2006 and 2007. That lesson is that you cannot have the attitude of “build it, and they will come.” We have to build for a reason. Hopefully, that lesson will be in the forefront as we emerge from what has been some very dark days. The other big change is that we are going to see retailers getting smaller again. They grew into these supermega-sized boxes that were so big you needed a golf cart to go through them. That’s going to shrink. We’ve learned that the biggest is not necessarily the best anymore.

What has been your most significant challenge as CEO of your company?

The biggest challenge of my career was not getting carried away with the hype and exuberance of the marketplace in 2004, 2005, 2006 and 2007 to the point where I could have easily over-leveraged and put myself in a position where I would be unable to make a recovery during the economic downturn. I watched so many friends and colleagues feasting on debt and getting to do all these projects while I watched from sidelines, telling myself, “This does not making economic sense.” Having the discipline to do that was the biggest challenge of my career.

What achievement are you most proud of?

I think we’ve truly been able to make a difference in the communities that we have worked in. Some of our redevelopment projects have changed neighborhoods and changed areas of our cities. My goal is to continue to make the communities we work in a better place one day and one project at a time.

Vital Stats: Michael Pollack

  • Has been involved in more than 11 million square feet of projects.
  • Is the drummer for Corporate Affair, a band that plays charitable events.
  • The Pollack family business began in 1937 in San Jose, Calif., when Sidney Gambord,
    Michael Pollack’s grandfather, decided to enter the real estate development business.
  • Entered the real estate business in 1973 while he was still in his teens, building
    single-family homes.
  • Began doing business in Arizona in 1991 with the purchase of a 23,623-square-foot
    shopping center that was 90 percent vacant. Within months, the occupancy rate climbed to
    more than 90 percent.

Arizona Business Magazine May/June 2012

ab-digitalissue-featured

AZ Business Magazine May/June 2012

Arizona Business Magazine May/June 2012

EVER-CHANGING ECONOMY

Michael GossieIn 2007, when SRP commissioned its Metro-Phoenix Business Study, just 1 percent of those business owners and executives surveyed cited the economy as a challenge or obstacle they had to overcome in the previous two or three years. When the same study was released this year, 56 percent of the responses cited the economy as a major challenge that they had to be overcome. Times have changed. We’re entering a new, more optimistic, yet significantly more cautious era. Despite enduring a tumultuous four years, 50 percent of those businesses surveyed for the 2011 SRP study anticipate their financial position will improve in the next 12 months. This issue of Arizona Business Magazine reflects that simmering optimism. Our special report shows that manufacturing, technology, healthcare and bioscience are leading the charge in Arizona job growth. And our Arizona Energy Consortium supplement introduces you to the folks who are drafting a comprehensive and cohesive energy plan that will create a brighter future for Arizona literally and figuratively. We have sunny days ahead, and not just because we live in Arizona.

Michael Gossie Signature

Michael Gossie, Managing Editor

Read more articles from this issue on AZNow.Biz.

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AZRE Digital Issue

AZRE Magazine May/June 2012

AZRE Magazine May/June 2012

Time flies when you’re having fun

Peter MadridAs I celebrate my second year as Editor of AZRE magazine in June, I ask myself … “Where did the time go?”

It seems as if it was just yesterday that I was trying to learn all I could about vacancy rates, foreign trade zones, REITs, BIM and CMARs … and then write about it.

After almost two years of attending at least 50 commercial real estate-related conferences, financial outlooks, breakfasts, lunches, discussions, you name it … I can honestly say I feel right at home among the many knowledgable professionals in attendance.

I guess you can teach an old dog new tricks.

Speaking of anniversaries, this issue features coverage of a well-respected advocacy organization (Valley Partnership) and a well-known general contractor (Hensel Phelps), which are both celebrating notable milestones.

» Valley Partnership, which proudly calls itself “The Valley of the Sun’s Premier Advocacy Group for Responsible Development,” is celebrating its Silver Anniversary — 25 years. Our coverage includes a roundtable discussion with six past chairmen and a Q&A with the new chairman.

» Hensel Phelps, a Colorado-based GC with major projects in Arizona, is celebrating its 75th anniversary (more than 30 years in our state). HP is wrapping up work on Stage I of the PHX Sky Train at Sky Harbor International Airport. It also has been selected to build a proposed 2,800-foot Solar Tower power station in La Paz County for EnviroMission of Australia.

As for my two-year anniversary celebration … I think I’ll just read up some more on cap rates, GPLETs, permitting regulations…

Editors Letter Signature

Peter Madrid, Editor

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AREA Awards

AREA Awards 2012: Real Estate Company Of The Year, Small

The Arizona Real Estate Achievement (AREA) Awards — selected by a panel of industry experts — honor the state’s best and brightest real estate companies, real estate agents, real estate brokers, mortgage companies, bankers, home builders, individuals who give back to the community, and those in the real estate business whose careers have left an indelible mark on the community and on the industry.

AREA AWARDS: REAL ESTATE COMPANY OF THE YEAR — SMALL

Winner: TEAM Investments

AREA Awards: Tanya MarchiolAs founder and President of TEAM Investments, Tanya Marchiol has built an empire on coaching others how to make money and prosper. Marchiol teaches professional athletes, entrepreneurs, investors and individuals how to not only maintain their current financial status but also create generational wealth. Her business acumen, sharp strategies, personalized approach, and attention to detail have earned her a reputation for excellence. A sought after expert and motivational speaker, Marchiol’s repertoire includes experience as a host and special correspondent for Sirius Satellite Radio, NFL Networks, Fox News, CNN, FOX Business News, and most recently a recurring personality on HGTV.


Honorable Mention: Kirans & Associates

AREA Awards: Kiran VedantamKiran Vedantam, a first-generation immigrant from India, came to Arizona in 1988 to pursue his Master’s degree at ASU. After working for eight years as a software engineer at Intel, he followed his dream of becoming an entrepreneur. He used his engineering background to develop a dynamic loan modification software that has the intelligence of a professional loan modifier. He started his own real estate company in 2010, and in 2011 — just his second year in business — he ranked No. 4 in Maricopa County for the most short sale closings.


Arizona Business Magazine May/June 2012