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When Visions Diverge

When Visions Diverge: What Happens When Property Owners and Cities Want Different Land Use

The crack of the gavel thunders through the room over the buzz of hushed whispers. Alone at the podium, the property owner stands stunned by the city council action denying the vision for a property. The investment in preplanned designs, attorneys, consultants and engineering circles the drain.

Hanging above it all is the “vision.” A parcel of land, lines on a drawing, colors on a map and the ghost of a citywide vote. A document, called a general plan, presses down on the hope, the plan and the decision, “Motion to deny the development proposal passes. The council finds the project is not consistent with the general plan.”

Jordan Rose, founder of Rose Law Group

Jordan Rose, founder of Rose Law Group.

“During the recession, some investors looked at bargains and not zoning,” says Scottsdale land use attorney Jordan Rose, founder of Rose Law Group. “There was less diligence, and some acquired land without regard to what the general plan said about the property.”

Development plans have been stalled or blocked by recent Valley city zoning actions. Several cases―primarily in the East Valley―have brought the issue into greater focus. The recovery-driven interest in turning properties or resurrecting old plans causes some of the conflict.

In many ways, local governments are market-driven, but driven by a different market than commercial real estate. The Arizona legislature forces towns and cities to depend on sales tax for general fund revenues―the basic operating income for key community services. This in turn drives local governments to create retail and employment site opportunities through the general plan. Without revenue-generating undeveloped land, a city council is not going to have the wherewithal to fund future growth and the requisite public safety, parks and libraries.

The sales-tax dependence led to cities to be very protective of revenue-generating land set aside in the general plan. Retail business has significantly changed over the past decade, but local government funding mechanisms continue to use 20th century revenue models for a 21st century economy.

The General Plan
In Arizona, every city and county needs a general or comprehensive plan to provide a long-range blueprint of development patterns within current and future boundaries. Plans are supposed to be updated every decade and ratified by the voters. Several plans are slated for ratification this year―including Tempe, Scottsdale and Mesa.

“A general plan is a large and complex document, it carries a lot of implications that are not apparent when voting for ratification,” says Ralph Pew, member and manager, Pew & Lake, PLC, Mesa.

The comment “the plan can’t be changed because voters approved it” is often raised during a project hearing when there are proposals to amend the land use map. Pew says, “The plan itself contains the standards for approving major and minor amendments. Change is a planned part of the process.”

John Berry, founder of Berry Riddell & Rosensteel LLC, Scottsdale, says that preparation is the key, “When a client comes to us, we start with the staff, listen to neighbors and talk with elected officials to try to foresee any major issues. It’s incumbent on the developer to give the city the facts to support the project. Opinions and project economics alone are not going to gain an approval.”

Rose agrees, “We’ve seen clients with plans that just don’t fit with the general plan. This means a lot of work up front to move the project forward, but sometimes, we have to tell them, ‘it isn’t going to be approved.’”

Before the recession, development was moving so quickly that a zone change or general plan amendment denial just meant the developer moved on. “We don’t have a lot of land use litigation in Arizona,” says Pew. “Pre-recession, the pace of development and number of opportunities, made it possible for the developer to shrug off a denial and move on to the next project.”

It’s different in the planning pipeline now. “When the recession ended, we were tickled to get applications once again,” reminisces Mesa Planning Director John Wesley. “There was an appetite to make things happen, and most projects were approved. That’s different now.”

Developers are seeing the difference during the hearing process.

“Councils are busy and they don’t like controversy,” says Berry. “The key to success is to listen closely to any objections early in the process and eliminate as many issues up front. When I go before a city council, I want to be able to say we have many points of agreement and just a few points of disagreement, if any.”

Pew emphasizes that getting an approval requires more work on the facts up front, “The more information we can give a city with the application showing the need for change, the easier it is for the city council to ultimately say ‘yes.’”

All three attorneys say that they will provide economic analysis, traffic reports and other empirical facts to back up an application.

Wesley says that he’s seeing more of that too, “It used to be developers would come in and say the project doesn’t pencil without the changes being approved. That doesn’t show any benefit to the city, and today, the council is less likely to be persuaded.”

Converging Goals
Cities and developers are looking more closely at project and city objectives to see how the divergent goals can be brought closer together. “In Mesa, we had a pattern of putting commercial development on every major street corner. Recently, an owner showed us that the area was barely supporting existing commercial on two of the corners, and a third corner still had undeveloped commercial zoning. Their argument made sense and the city approved a residential rezone.”

Even with numbers and well-reasoned arguments, sometimes visions are irreconcilable. “There are some properties in cities where general plan amendments are just not going to be approved,” cautions Rose. “We see cities with long range plans for an area, and the council is not going to change their vision on a piece-by-piece basis.”

“In Mesa, we have some neighborhoods where there is flexibility, if an owner makes a case,” points out Wesley. “But there are some areas where we need to protect the city’s plans even if the land remains vacant for a while.”

A Need for Change
Some point to the success of the Price Corridor in Chandler where the city held firm on keeping land use for large corporate and single-tenant users. That is changing this year following a report by The Maguire Group the city commissioned. Changing economics and use patterns opened the door to maintaining the same corporate center feel, but now permitting smaller users and multi-tenant buildings. As soon as the amendment’s approval was imminent, the Douglas Allred Company filed plans for a hotel and mid-rise office on the Park Place campus.

Allred Park Place building five shell.

Allred Park Place building five shell.

“We’re starting to see cities, like Queen Creek, take a look at actual absorption rates and land use needs when considering general plan amendments,” says Pew. “Policy is starting to move away from the pre-recession rigidity that all commercial and employment lands needed to be preserved.”

Before the economy plunged, it was common for land owners to seek highest-and-best use zoning in order to better position the land for sale. The convergence of Internet shopping, the housing crisis and a push for infill development changed land use demand and affected patterns.

“Cities are becoming aware that we’re starting to run out of land area,” explains Wesley. “We’re looking more carefully at changes, because there is generally no going back.”

“As long as land remains undeveloped, it is possible and sometimes reasonable to change zoning again,” says Pew. “With the real estate market shift, owners start looking at what’s going to work. It’s possible cities are going to see requests to shift zoning to match market demand rather than market value.”

Finding Balance
Wesley talks about listening to developer ideas and goals, “Sometimes what’s wanted isn’t a perfect fit, but we’ve worked with owners to try and accomplish their objectives. We had a recent project where we mixed land uses so that both (Mesa) and developer goals were mostly achieved.”

“A lot of the time, the public is wed to the general plan,” reflects Rose. “The general plan is a vision for a community, it can’t just be simply dismissed. There are a lot of moving parts.”

In conversation with each of the three attorneys, one word is in their comments again and again: “understand.”

“Listen and understand what the neighborhood expects from a development,” Berry says.

Rose advises, “Understand what’s expected and be creative to bring ideas to the table.”

“Understanding the stakeholders and the project neighborhood is a big key to success,” counsels Pew.

Understanding city expectations can be the first step on the road to meeting an owner’s property objectives.

Frutkin Law Firm Names New Senior Counsel

This month, the Frutkin Law Firm has announced Stephanie Fierro, Esq. has been named Senior Counsel Attorney at the Firm.

Fierro serves clients in general counsel business law and estate planning. She also has experience in business litigation and alternative dispute resolution inherent in any general counsel practice. She brings the firm a wide range of experience and interests including all aspects of corporate transactional work, estate planning, and tax representation. Before joining The Frutkin Law Firm, PLC, she managed her own law practice, Fierro Law, PLC.

“Stephanie’s contribution to the firm has grown leaps and bounds since she joined us years ago. We are excited that she has developed her expertise to take her career to the next level,” said Principal Jonathan Frutkin.

Fierro graduated from New England Law | Boston in 2005 with honors and was awarded the President Anna E. Hirsch Award for service to the law school and the Dean’s Award for making a unique contribution to the school. She earned her Bachelor of Science degree from Arizona State University in 2002. Stephanie currently serves as an alumni mentor for students of New England Law | Boston. Fierro is very involved in the community and has served on many not-for-profit boards, including serving as a Board Member for the Ahwatukee Foothills Chamber of Commerce. Stephanie is currently working with Hospice of the Valley as a volunteer on the committee for their AAHA!, An Auction of Heirlooms and Art event.
In 2013, Fierro was named among the top business and corporate lawyers in the state by Arizona Business Magazine. She has previously been the contributing editor for Attorney at Law Magazine and Public Accountant Magazine. As a part of her role with the firm, Fierro appears on local news stations to discuss a broad range of timely legal topics which have included the Affordable Care Act, Estate and Tax Planning and Pinterest to name a few.

The Frutkin Law Firm now consists of ten attorneys with decades of experience in the core areas of business law, bankruptcy, estate and tax planning, and civil litigation. For more information on The Frutkin Law Firm and practice areas, visit www.frutkinlaw.com.

rebecca

Goldberg joins Stein Law

Stein Law, PLC announced that Rebecca C. Goldberg has joined the firm as Of Counsel.

Goldberg brings with her over ten years of experience in the areas of commercial leasing, real estate and finance transactions to expand and compliment Stein Law’s thriving real estate and corporate transactional practice.

For more informationm call (480) 889-8948, or visit www.SteinLawPLC.com.

Untitled

Clark, Suciu Join Jones, Skelton & Hochuli

Jones, Skelton & Hochuli, PLC announced that Andrew Clark and Kimberly Suciu have joined the firm as Associates.

Clark will focus his practice on general civil litigation and insurance defense, bad faith, personal injury and construction defect.  Clark grew up in the valley and attended the Ira A. Fulton School of Engineering at ASU prior to attending ASU law school. Prior to joining Jones, Skelton & Hochuli, Clark was a law clerk with the Arizona Corporation Commission, legal extern with the Arizona Department of Administration, a law clerk for the Yuma County Legal Defender’s Office, and legal extern with City of Mesa Prosecutor’s Office.

Suciu joins Jones, Skelton & Hochuli as an Associate focusing her practice on medical malpractice defense and general civil litigation and insurance defense. Prior to joining the firm, Suciu served as a Judicial Extern for the Honorable Patricia A. Orozco, of the Arizona Court of Appeals, Division.

Untitled

Clark, Suciu Join Jones, Skelton & Hochuli

Jones, Skelton & Hochuli, PLC announced that Andrew Clark and Kimberly Suciu have joined the firm as Associates.

Clark will focus his practice on general civil litigation and insurance defense, bad faith, personal injury and construction defect.  Clark grew up in the valley and attended the Ira A. Fulton School of Engineering at ASU prior to attending ASU law school. Prior to joining Jones, Skelton & Hochuli, Clark was a law clerk with the Arizona Corporation Commission, legal extern with the Arizona Department of Administration, a law clerk for the Yuma County Legal Defender’s Office, and legal extern with City of Mesa Prosecutor’s Office.

Suciu joins Jones, Skelton & Hochuli as an Associate focusing her practice on medical malpractice defense and general civil litigation and insurance defense. Prior to joining the firm, Suciu served as a Judicial Extern for the Honorable Patricia A. Orozco, of the Arizona Court of Appeals, Division.

Goldwater Institute

Ben Quayle joins Clark Hill PLC

Former Rep. Ben Quayle is moving on from politics after losing to another sitting congressman in last year’s Republican primary.

Quayle is joining the law firm of Clark Hill PLC as a senior director in the firm’s government and public affairs practice group. The son of former Vice President Dan Quayle will work in both Phoenix and Washington.

Quayle served one term after winning an open Phoenix-based seat in 2010 in a race featuring an attack ad on President Barack Obama. He decided to take on Rep. David Schweikert in the 6th District after redistricting made his old seat more competitive.

Clark Hill announced Quayle’s hiring on Monday. He told the Arizona Republic he could make another political run but has no plans to do so in the immediate future.

Goldwater Institute

2013 Top Lawyers list: Business/corporate law

Az Business magazine’s 2013 top lawyer list was created after the editorial department asked Arizona law firms to nominate their two best attorneys from 16 different categories for consideration. Those nominees were put on a ballot and were voted on by their peers in the legal community and the readers of Az Business magazine to determine the exclusive 2013 Az Business Magazine Top Lawyers list.

Jessica Benford
Ryley Carlock & Applewhite
602-440-4866
www.rcalaw.com
Benford counsels clients regarding general corporate representation, including corporate formation and governance. She also handles securities enforcement and regulation matters.

Charles E. Davis
Davis Miles McGuire Gardner, PLLC
480-733-6800
www.davismiles.com
Davis has an “AV Preeminent” rating by the Martindale-Hubbell Peer Review Ratings system, which connotes the highest possible rating in both legal ability and ethical standards.

Gerald Gregory Eagleburger
Sanders & Parks, P.C.
602-532-5692
www.sandersandparks.com
Eagleburger’s practice includes all types of transactional, commercial/business and personal asset matters, including formation and governance of corporations, partnerships and limited liability companies.

Stephanie Fierro
The Frutkin Law Firm, PLC
602-606-9300
www.frutkinlaw.com
Fierro’s practice focuses on general counsel business law and estate planning. She brings the firm a wide range of experience and interests including all aspects of corporate transactional work, estate planning, and tax representation.

Jonathan B. Frutkin
The Frutkin Law Firm, PLC
602-606-9300
www.frutkinlaw.com
Frutkin is the principal attorney at The Frutkin Law Firm and brings areas of expertise in the practice areas of corporate and business law, corporate bankruptcy, and commercial litigation.

Phillip Guttilla
Polsinelli
602-650-2327
www.polsinelli.com
Guttilla Guttilla serves as general corporate counsel to his clients ranging from emerging growth companies to multi-national enterprises.

Gregory R. Hall
DLA Piper
480-606-5128
www.dlapiper.com
Hall regularly counsels clients on a broad range of corporate, securities and business-related matters and matters affecting corporate policy and strategy, including directors’ duties and responsibilities and other aspects of corporate governance.

Travis J. Leach
Jennings Strouss
602-262-5806
www.jsslaw.com
Leach focuses his practice in the area of corporate, securities, and finance. He also helps lead the firm’s Sports and Entertainment practice, coinseling professional athletes, coaches, entertainers, and ownership groups.

Brian Moll
Polsinelli
602-650-2302
www.polsinelli.com
Moll practices in the areas of corporate law, mergers and acquisitions, and commercial contracts. He has extensive experience in assisting businesses in all stages of their operations, from start-up to a mature business.

Robert A. Royal
Tiffany & Bosco, P.A.
602-255-6011
www.tblaw.com
Royal’s practice emphasizes intra-corporate dispute and director, officer and manager liability issues.

Terence W. Thompson
Gallagher & Kennedy, P.A.
602-530-8515
www.gknet.com
Thompson’s practice emphasizes corporate business acquisitions; public-private projects, including strategic joint ventures; Native American enterprises and projects; water/wastewater infrastructure development; sports facility financing; and physician-hospital contracts.

Nancy White
Steptoe & Johnson LLP
602-257-5213
www.steptoe.com
White’s practice emphasizes international and domestic transactions, including mergers and acquisitions, purchases and sales of capital assets and real property, project finance, asset-based financings, asset securitizations, and private placements of debt and equity securities..

SkySong

Innovation unites Arizona’s economic engines

When Arizona became a state 100 years ago, it was easy to identify its economic engines, those industries, innovators and locations that drove the state’s economy and employment.

They all started with C — copper, cotton, citrus, cattle and climate.
A decade later, it’s not so easy.

“We must find ways to diversify our economy, including investing in bioscience and technology, health science and innovation,” Phoenix Mayor Greg Stanton says. “We are coming out of the recession, and we need to move forward in a strategic way.”

Today’s economic engines are doing just that. They innovate, they collaborate, and the only one that starts with C is CityScape, and the only copper you’ll find there is Copper Blues Rock Pub and Kitchen and the cotton is at Urban Outfitters.

But today’s economic engines have to clear vision and direction for driving Arizona’s economy during its second century.

The Biodesign Institute at ASU
What it is: The Biodesign Institute at ASU addresses today’s critical global challenges in healthcare, sustainability and security by developing solutions inspired from natural systems and translating those solutions into commercially viable products and clinical practices.
Economic impact: The Biodesign Institute has met or exceeded all of the business goals set in mid-2003 by attracting more than $300 million in external funding since inception, and generating more than $200 million in proposals advanced in 2011 alone.
Companies it has helped grow: Licensed next-generation respiratory sensor technology to a European medical device developer; executed an exclusive license agreement for DNA sequencing technology to Roche, which includes a sponsored research agreement to develop devices in collaboration with Roche and IBM; and launched two Biodesign Commercial Translation companies.
Latest news: Led by electrical engineer, Nongjian Tao, ASU researchers have formulated a new sensor technology that will allow them to design and create a handheld sensor that can contribute to better diagnosis of asthma.
Michael Birt, director of the Center for Sustainable Health at the Biodesign Institute at ASU: “By establishing biosignatures centers, we hope to build a global network that will provide the scale necessary to overcome scientific limitations while creating a global platform to share methods, results and experiences.”

CityScape
What it is: A highrise mixed-use development in Downtown Phoenix consisting of residential, retail, office, and hotel components. The project covers three downtown Phoenix city blocks and is located between First Avenue and First Street, and between Washington and Jefferson streets.
Economic impact: Officials credit the evolution of Downtown Phoenix — led by CityScape — with helping the Valley land the 2015 Super Bowl, which will bring an economic impact of an estimated $500 million.
Companies it has helped grow: In addition to entertainment venues and top-notch restaurants, business leaders calling CityScape home include Alliance Bank, Cantor Law Group,  Fidelity Title, Gordon Silver, Gust Rosenfeld, Jennings, Strouss and Salmon, PLC, Polsinelli Shughart, RED Development, Squire Sanders and UnitedHealthcare.
Latest news: The 250-room boutique hotel, Hotel Palomar Phoenix by Kimpton, opened in June.
Jeff Moloznik, general manager, CityScape:  “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.”

Intel

What it is: Intel is a world leader in computing innovation. The company designs and builds the essential technologies that serve as the foundation for the world’s computing devices.
Economic impact: Since 1996, Intel has invested more than $12 billion in high-tech manufacturing capability in Arizona and spent more than $450 million each year in research and development. Intel is investing another $5 billion in its Chandler site to manufacture its industry-leading, next-generation 14 nanometer technology.
Companies it has helped grow: Intel has been a catalyst for helping to create Chandler’s “tech corridor,” which includes Freescale, Microchip Technology, Orbital Sciences, Avnet, Amkor, and Marvell Technologies.
Latest news: Intel and ASU’s College of Technology and Innovation (CTI) are developing a customized engineering degree for some of the chip maker’s Arizona-based employees. The program is based on CTI’s modular, project-based curriculum and upon completion will provide a Bachelor’s of Science in Engineering degree from ASU, with a focus in materials science.
Chandler Mayor Jay Tibshraeny: Intel likes the partnership it has with Chandler, likes doing business in Arizona, and they’re a very good corporate citizen.”

Phoenix Mesa-Gateway Airport

What it is: Formerly Williams Gateway Airport (1994–2008) and Williams Air Force Base (1941–1993), it is a commercial airport located in the southeastern area of Mesa.
Economic impact: The airport helped generate $685 million in economic benefits last year, and the airport supports more than 4,000 jobs in the region.
Companies it has helped grow: Able Engineering & Component Services, Cessna, Hawker Beechcraft, Embraer, CMC Steel, TRW Vehicle Safety Systems Inc..
Latest news: The Airport Authority’s Board of Directors announced Monday the airport will undergo a $1.4 billion expansion. There is also an effort to privately raise $385 million to build two hotels and office and retail space near the airport.
Mesa Mayor Scott Smith: “Phoenix-Mesa Gateway Airport has gone through tremendous growth and expansion and has truly arrived as a major transportation center in the Valley.”

SkySong

What it is: A 1.2-million-square-feet mixed use space that gives entrepreneurs and innovators the resources they need  to grow and thrive, and provide them an exceptional home for when their businesses begin to take off.
Economic impact: Projected to generate more than $9.3 billion in economic growth over the next 30 years, according to an updated study by the Greater Phoenix Economic Council.
Companies it has helped grow: Emerge.MD, Channel Intelligence, Adaptive Curriculum, Alaris, Jobing.com/Blogic, webFilings.
Latest news: Jobing, an online company that connects employers and job seekers nationally, relocated its corporate headquarters from Phoenix to SkySong.
Scottsdale Mayor Jim Lane: “It is hard to think of a business attraction initiative the city has recently used that has not mentioned SkySong as a major attribute. SkySong has a national reputation and as it grows it will continue to elevate Scottsdale’s standing.”

Talking Stick

What it is: This economic engine encompasses a complex that includes the 497-room Talking Stick Resort, Courtyard Marriott Scottsdale Salt River, Casino Arizona at Talking Stick Resort, Talking Stick Golf Club, and Salt River Fields at Talking Stick, the spring training home of the Colorado Rockies and Arizona Diamondbacks.
Economic impact: Salt Rivers Fields аt Talking Stick accounted fоr 22 percent оf the the attendance for Cactus League baseball, which generates more thаn $300 million а yeаr іn economic impact tо the greater Phoenix metropolitan area economy.
Companies it has helped grow: In 2011, nearby Scottsdale Pavilions — which features 1.1 million square feet of select retail and mixed-use properties — became The Pavilions at Talking Stick. Pavilions has added Hobby Lobby, Mountainside Fitness, Buffalo Wild Wings and Hooters.
Latest news: Salt River Fields at Talking Stick will be one of the ballparks selected to host the first round of the 2013 World Baseball Classic in the spring.
David Hielscher, advertising manager, Casino Arizona and Talking Stick Resort: “Our property’s diverse, entertainment-driven culture and convenient locations allow us limitless opportunities for future expansion and development.”

Translational Genomics Research Institute

What it is: TGen is a non-profit genomics research institute that seeks to employ genetic discoveries to improve disease outcomes by developing smarter diagnostics and targeted therapeutics.
Economic impact: TGen provides Arizona with a total annual economic impact of $137.7 million, according to the results of an independent analysis done by Tripp Umbach, a national leader in economic forecasting.
Companies it has helped grow: TGen researchers have collaborated with Scottsdale Healthcare, Virginia G. Piper Cancer Center, Mayo Clinic, Ascalon International Inc., MCS Biotech Resources LLC, Semafore Pharmaceuticals Inc., Silamed Inc., Stromaceutics Inc., SynDevRx Inc., and Translational Accelerator LLC (TRAC). and many others.
Latest news: When TGen-generated business spin-offs and commercialization are included,  Tripp Umbach predicts that in 2012 TGen will produce $47.06 for every $1 of state investment, support 3,723 jobs, result in $21.1 million in state tax revenues, and have a total annual economic impact of $258.8 million.
Michael Bidwill, president of the Arizona Cardinals: “TGen is one of this state’s premier medical research and economic assets, and is a standard-bearer for promoting everything that is positive and forward-looking about Arizona.”

University of Arizona’s Tech Park

What it is: The University of Arizona Science and Technology Park (UA Tech Park) sits on 1,345 acres in Southeast Tucson. Almost 2 million square feet of space has been developed featuring high tech office, R&D and laboratory facilities.
Economic impact: In 2009, the businesses that call Tech Park home had an economic impact of $2.67 billion in Pima County. This included $1.81 billion in direct economic impacts such as wages paid and supplies and services purchased and $861 million in indirect and induced dollar impacts. In total, the Tech Park and its companies generated 14,322 jobs (direct, indirect, and induced).
Companies it has helped grow: IBM, Raytheon, Canon USA, Citigroup, NP Photonics, and DILAS Diode Laser.
Latest news: A 38.5-acre photovoltaic array is the latest addition to the Solar Zone technology demonstration area at Tech Park. Power generated from the facility will be sold to Tucson Electric Power Co., providing power for  about 1,000 homes.
Bruce Wright, associate vice president for University Research Parks:  “By 2011, the park had recaptured this lost employment (resulting from the recession) with total employment increasing to 6,944. In addition, the number of tenants had expanded from 50 to 52 reflecting the addition of new companies in the Arizona Center for Innovation and the development of the Solar Zone at the Tech Park.”