Tag Archives: Public


Public, private sector bend communication challenges

It’s a story everyone has experienced to some degree since 2007: When the economy was healthy, cities were doing everything possible to keep up with the growth. When the recession hit, everything slowed — some projects were stopped in their tracks. Cities were no longer able to build the infrastructure necessary for rapid growth due to the slowdown as well as restrictions on impact fee-related funding. Belts tightened on public and private sectors alike.

As the recovery shakes its way fully to the surface over the next few years, cities are beginning to see dirt pushed around, projects come off drawing boards and economic development efforts in full force. Communities are waking up, stretching for their full potential. “Every city wants to see healthy development, wants to create a welcoming community and wants to meet the demands of its residents. The private partners are essential in building those beautiful communities,” says Ken Strobeck, executive director of the League of Arizona Cities and Towns. That said, there is no one size fits all approach to development. The only common denominator is the importance of communication.

“Arizona is full of cities that have decades of growth ahead of them,” says Strobeck. “In order for us to continue growing and build sustainable communities, it is essential that developers and cities work very closely together to be creative, form partnerships and find ways to meet the needs of growth, while not creating an extreme burden on existing residents.” These partnerships are something Curt Johnson, senior vice president at CVL Consultants, helps facilitate on a daily basis between his clients and the public sector. “A lot of cities have the same passion as we do when it comes to design,” he says, noting that while it sometimes takes “trial and error” to figure out what makes a city tick, it’s ultimately about a balance of needs.


“Private developers don’t like surprises, so having things approved or mocked up with city’s conditions is starting on the right footing,” says Johnson. Developers “owe the public sector the details they need to make a decision,” he says, adding that the city should return that courtesy. He notes one example of when communication between parties broke down. In Buckeye, he says, fire trucks require larger culde- sac loops with a 60-foot radius to accommodate their size. However, this fact wasn’t brought up by the city to one of his clients until late in the design process. Other things, like city street and sidewalk width restrictions can sometimes be changed to lower overall construction price as well as reduce heat island effects. It’s a city’s openness to these types of changes that can bring balance to developers and the public sector alike.

That said, all it takes is enough residents to file a legal protest at the city council level for a project to be stalled for about a year unless a super majority vote is reached. A recent example happened last May, when Mesa property owners near the location of a proposed medical marijuana dispensary development triggered a failed majority vote to rezone the property, despite the General Plan approval.

“Some owners may never be satisfied, as I have encountered adjacent owners that do not want any development on the privately owned land next to them,” he says. “This puts a tremendous burden on the land owner, who may not be able to entitle their land appropriately and for the developer, who may not have the time or financial resources to fund a long drawn out entitlement process. In that case, the developer would move on to another project someplace else.”

Often, developers have thrown so much money at a project they won’t just pack up and leave if it’s protested. One such developer and client who wishes to remain anonymous, he notes, was working on a five-acre infill piece in Scottsdale. Infill is particularly difficult as it usually has neighbors on multiple sides that must be appeased. It took the developer more than two years to get the design approved by council and even then the developer had to compromise a design of 22 housing units per acre to 10 units per acre.

“Most of my clients are gritty and willing to stick it out and do what they need to develop that piece,” Johnson says. Since the downturn, he adds, the mood toward development has changed.

“We need each other,” he says.

According to Strobeck, for city growth to come into fruition, zoning and general plans may need to see minor changes or amendments. City leaders. Strobeck adds, always need to consider economic conditions and market needs as they grow.

“Whether it is a recession or economic boom, sometimes the initial zoning is a hindrance to growth and needs to be adjusted. This is common and healthy exercise,” says Strobeck, adding it’s important for residents and developers alike to pay attention to public rezoning hearings so all parties can voice concerns and stay in touch with what the other wants.

When Bell Lexus wanted to move into a space among the core of auto dealerships along north Scottsdale Road, the City of Scottsdale and Arizona State Land Department (ASLD) had to reevaluate the existing zoning to the Crossroads East Planned Community District. The partnership turned into a win for the respective parties. The dealership was able to relocate to one of the highest traffic intersections in the city, the land reaped the highest value achieved for State Trust Land at auction and the sale also resolved long-standing drainage and infrastructure repayment issues while ensuring Scottsdale received high-value sales tax revenue.

“The successful development of Bell Lexus not only was an example of a productive private-public partnership, but will pave the way for additional success stories on the hundreds of remaining undeveloped Trust acres adjacent and proximate to the dealership,” says Arizona State Land Commissioner Vanessa Hickman.

Cities are responsible for regulating the general plan, even if it is beyond their direct control. Many development regulations are imposed on cities by state and federal laws. Cities are also obligated to its residents.

“Each city has its own unique character and wants to form a community that is responsive to its local residents,” says Strobeck. “When approving plans, cities want to make sure that development plans fall in line with that vision.”

If residents feel a development plan doesn’t align with the city’s character or their lifestyle, they can stall or block plans from being approved at council. The most important thing a land owner and developer can do is work with the city staff, educate residents and make sure all respective voices are heard, recommends Strobeck.

“Early and constant communications with the planning department and the office of economic development helps lead to success for both the developer and the city,” says Strobeck. “Many items can be resolved when more time is spent with residents and there is lots of communication. Residents have great investments in their communities and they take their pride of ownership seriously.”


The approach in some cities is to do less regulating and more facilitating in order to help developers’ plans meet the vision of the city.

One such city is Mesa.

Whether holding special zoning meetings to accommodate developer’s timelines or developing a new zoning code, as the city did for DMB Associates’ 3200-acre, master planned development of Eastmark, Mesa has made a conscious push to go the extra mile with developers who return the favor. For the First Solar building acquisition by Apple and GTAT in the city, staff sat down with Apple and discussed the timeline and expectations. What would normally require 18-day turnarounds were whittled down to five, says Mesa’s Director of Development and Sustainability Department, Christine Zielonka.

“We flexed the system to allow for a rapid development,” she says. This is a trend Carolyn Oberholtzer, attorney at Bergin, Frakes, Smalley & Oberholtzer, PLLC, has also observed.

“Some municipalities are trending toward flexibility in an effort to be nimble enough to capture development/ end user opportunities and avoid their communities getting skipped over in favor of a neighboring city that can accelerate the speed to market,” says Oberholtzer. “‘Time is money’ is especially applicable in the development business. Recognizing that, we have seen some municipalities even initiate zoning cases on their own accord to help the process along.”

But this all started with DMB Associates, which City of Mesa Economic Development Director Bill Jabjiniak says went “out of its way to make sure it met with all the right people to make Eastmark a good fit for southeast Mesa and the Gateway area.”

“They worked closely with our planning department to put together a plan that would give them the flexibility they needed, yet adhered closely to the vision and guidelines the city has for the Gateway area,” says Jabjiniak. “The perfect success story is the new Apple/ GTAT manufacturing facility. Because of the flexible approval process developed with DMB, we were able to bring the facility to the Tech Corridor within Eastmark in record time.”

In order to facilitate a strong partnership between Mesa and the private sector, Jabjiniak says, the city has invested heavily in infrastructure and cut development risk by facilitating entitlements. Recently, Mesa’s Planning Board approved an overlay zone for the Elliot Road Technology Corridor.

“This zoning overlay will allow private landowners in the Tech Corridor the opportunity to opt-in to the overlay zone when they have a high-tech company that is interested in building a facility on their property,” he says. “When developers are ready to build, all they need to do is submit the necessary paperwork to the planning department for administrative approval. The overlay zone will cut the entitlement process from several months down to a matter of a few weeks.”

However, when developers don’t pull their weight in communication projects tend to see delays. If developers don’t also consider off-site costs, such as city infrastructure installs or improvements they have a high hurdle to clear through an appeal to the city manager.

“Community Facilities Districts are a critical tool in the public-private partnership tool box that enable a developer to finance large public infrastructure projects,” says Oberholtzer. “Communities that lack facilities in their growth areas will have a difficult time capturing development if they do not allow Community Facilities Districts.”

Any time legislation has cropped up that could potentially put the two entities at odds organizations such as Valley Partnership have worked to broker compromise.

“You saw that in the last session with the Transaction Privilege Tax changes and proposed legislation that could have jeopardized Community Facilities Districts,” says Oberholtzer.

Zielonka says the first time she looked at Mesa’s General Plan map, it looked like a zoning map with small areas. Since 2002, the city has started to loosen its zoning to accommodate more creative causes for density and growth.

“It’s the private sector that has to come in and say this is no longer the best use [for a building],” Zielonka says, noting that this long-term thinking of building uses over time began with Eastmark, two days before the recession hit.

“The recession didn’t inform that alternative approach,” she says. “It’s saying [the general plan] is more of a high level, inspirational document, not a detailed document. [Mesa] spent years working through that philosophy internally.”

The same goes for development in Mesa.

“We’re trying to push Mesa forward,” says Zielonka. “We don’t want to allow mediocre development. One of the outcomes of the recession is money is tougher to get. Purse strings have tightened. One thing we’re constantly pushing on is high-quality development… one of our current challenges is we’re not allowing development that won’t hold up in the short-term or long-term.”

From a napkin sketch to something more advanced, Zielonka says starting conversations as early as possible is key to success. For instance – a project doesn’t have to be the size of Eastmark or involve a company like Apple to get special attention. Benedictine University, which now occupies the building of a former hospital in downtown Mesa, was what Zielonka calls a very close collaboration.

“The state and federal government can pass laws and discuss policy but at the end of the day, the partnerships between local communities and their development partners are what will generate job growth, healthy communities and continued economic growth,” says Strobeck.


Greenberg Traurig among ‘Best Corporate Law Firms’

The international law firm Greenberg Traurig, LLP, with more than 50 Arizona-based attorneys, has been named one of America’s Best Corporate Law Firms by Corporate Board Member, an NYSE Euronext company, and global business advisory firm FTI Consulting, Inc. in their annual survey of directors and general counsel of publicly-traded companies. The award was presented Tuesday as part of Corporate Board Member’s 6th Annual Legal Recognition Dinner in New York.

“We are very grateful for this honor,” said John Cummerford, a co-managing shareholder in Greenberg Traurig’s Phoenix office. “This is especially noteworthy since this recognition comes from our peers in the industry – general counsel of public companies – and reflects the respect our firm has earned worldwide.”

Each year, Corporate Board Member and FTI Consulting team up to conduct research to reveal those law firms that directors and general counsels believe to be the most respected legal counsel nationwide. This year, Greenberg Traurig is included on the 2013 Top 25 National Law Firm General Counsel’s Rankings list.

Greenberg Traurig attorneys represent both public and privately-held clients in a wide range of industries and in transactions including mergers and acquisitions, private equity transactions, public and private offerings of securities, as well as litigation, real estate, intellectual property, tax and other matters.


Greenberg Traurig among 'Best Corporate Law Firms’

The international law firm Greenberg Traurig, LLP, with more than 50 Arizona-based attorneys, has been named one of America’s Best Corporate Law Firms by Corporate Board Member, an NYSE Euronext company, and global business advisory firm FTI Consulting, Inc. in their annual survey of directors and general counsel of publicly-traded companies. The award was presented Tuesday as part of Corporate Board Member’s 6th Annual Legal Recognition Dinner in New York.

“We are very grateful for this honor,” said John Cummerford, a co-managing shareholder in Greenberg Traurig’s Phoenix office. “This is especially noteworthy since this recognition comes from our peers in the industry – general counsel of public companies – and reflects the respect our firm has earned worldwide.”

Each year, Corporate Board Member and FTI Consulting team up to conduct research to reveal those law firms that directors and general counsels believe to be the most respected legal counsel nationwide. This year, Greenberg Traurig is included on the 2013 Top 25 National Law Firm General Counsel’s Rankings list.

Greenberg Traurig attorneys represent both public and privately-held clients in a wide range of industries and in transactions including mergers and acquisitions, private equity transactions, public and private offerings of securities, as well as litigation, real estate, intellectual property, tax and other matters.


Advantages and disadvantages of an IPO

The closing concludes and a company suddenly has $50 million cash in its bank account from the sale of its stock.  Champagne corks are popped and celebration ensues―for a brief period.  “Going public” is an exciting event for all involved and may provide many advantages to the company’s operations.  However, being a public company has certain disadvantages that should also be considered.

“Going public” refers to a sale of stock or debt in an initial public offering or IPO registered with the Securities and Exchange Commission (SEC).  A “public company” refers to a company that has undertaken an IPO or is otherwise required to be a reporting company under the Securities and Exchange Act.  A “private company” typically has a limited number of owners or investors and is not required to file reports with the SEC.  This article discusses some of the advantages and disadvantages of “going public.”

Advantages of an IPO

An IPO and the result of being a public company may provide significant advantages to the company and its stockholders.  These include cash infusion, ability to “mint coin,” easier future access to equity and debt markets, liquidity for pre-IPO stockholders and institutionalization of the company.  The common theme of these advantages is that a liquid market for its stock “unlocks” value that the company could not otherwise access.  By having publicly traded stock, the discount that is attached to stock of private companies no longer applies.

Cash Infusion The result of an IPO is a significant and immediate infusion of cash into the company.  This cash is typically “earmarked” for specific items described in the IPO disclosure documents, which can be for a variety of purposes.  For example, the company may use the proceeds of the IPO to expand its inventory, property and equipment base, reduce debt, further research and development or expand its services.

Minting of Coin. Having an established value and liquid market for its stock creates additional “coin” for the company through issuance of additional stock.  This “coin” may be used as consideration to acquire other business and to compensate both current and future employees.

The ability to utilize the company’s stock for an acquisition significantly decreases its cash needs and allows it to engage in transactions without tapping into its “war chest” of IPO proceeds, which can be put to use to fund future growth.  In addition, acquisitions using the company’s stock as consideration may be structured as a “tax-free” reorganization, which can allow the sellers to defer taxes on gains associated with the sale of their business.  Using stock as consideration for acquisitions also provides sellers an opportunity to participate in the future growth of the combined organization.

Another benefit of a liquid market for a public company’s shares is that its stock may be used to compensate both its existing and future employees through the grant of options or direct issuance of shares.  Grants of options or stock provide a means to share the company’s success and are a great tool for attracting talented management and employees.

Access to Capital Markets.  Being a public company enhances access to both equity and debt markets.  After the company has been a reporting company for 12 months, it may engage in follow-on offerings using a “short form” registration process.  The ability to use this process reduces both the time and expense of future equity financings.

As a reporting company, the transparency of its financial position and operations makes it better suited to obtain debt financings.  The infusion of cash from an IPO also enhances the balance sheet and makes the company a much stronger candidate for debt financings.

Liquidity An IPO provides liquidity to the company’s founders, employees and pre-IPO investors holding the company’s stock.  While the liquidity may not be immediately realized due to “lockup” requirements imposed by underwriters and other SEC rules, being a public company provides a means for the pre-IPO stockholders to monetize the value of their stock at some point in the future.

Institutionalization.  Being  publicly traded  adds to a company’s stature as an institution, which can enhance its competitive position.  The IPO process itself generates publicity that may enhance the company’s recognition in the marketplace.  As a result, suppliers, vendors and lenders often perceive the company as a better credit risk and customers may perceive it as a better source of products or services.  The stature of a public company can also enhance its ability to attract top level executives and employees.

Disadvantages of an IPO

While going public provides significant advantages to a company and its stockholders, the requirements imposed by securities laws produce disadvantages to the company and its operations.  These include increased costs, securities law compliance, changes in corporate governance structure and becoming a “slave to the stock price.”

Costs.  The costs of an IPO include both the costs of engaging in the offering process and the future costs of being a reporting company.  Typical costs of raising $50 million through the IPO process can range from $3.5 million to $5 million.  Raising less money can increase the percentage of offering costs significantly.  These costs include underwriting commissions, legal and accounting fees, SEC and National Association of Securities Dealers (NASD) filing fees, exchange fees, financial printing, travel and other miscellaneous costs related to the offering.  In addition to these initial costs, as a reporting company subject to securities laws, including Sarbanes-Oxley, and exchange listing requirements, the company will have significant ongoing costs associated with its operations.  These costs include outside directors’ fees and expenses, directors’ and officers’ liability insurance, accounting and legal costs, internal control costs, printing costs for stockholder reports and proxies and costs of investor relations.  According to a survey published by Foley & Lardner LLP, these costs average approximately $2.37 million per year, not including lost productivity costs, for public companies with revenue under $1 billion.

The costs are not just monetary.  The IPO process can take up to six months or longer.  During this period the company’s executive management team must devote substantial time and energy to the IPO.  This takes away from management’s time and ability to run the company’s business, and operations may suffer during the IPO process.

Securities Law Compliance A myriad of compliance issues results from an IPO.  The IPO process imposes severe restrictions on the company’s marketing and publicity activities during the “quiet period” preceding the filing of a registration statement.  The registration and reporting process involves the disclosure of significant information about the company that is readily available to the company’s competitors.  Following completion of the IPO, the company will be required to file quarterly, annual and current reports detailing its operations and announcing major events.  This disclosure includes detailed information about operations, executive compensation, financial results and significant customers and vendors.  Proxy statements must be filed with the SEC before a stockholders meeting can be called.  The company cannot release information on a selective basis and must be careful to assure that the information it releases is accurate and complete.  Company insiders and major stockholders also must comply with the Exchange Act requirements for reporting their stock ownership and prohibitions on short swing trading.  Finally, the exchanges where the company’s stock is traded have various listing standards that impose additional governance and disclosure requirements.

The changes to the securities laws resulting from the Sarbanes-Oxley Act have greatly increased the compliance issues that a public company must meet (with corresponding cost increases).  These include enhanced auditing and governance standards, additional responsibilities for the company’s independent directors, development and documentation of control procedures and certifications by the CEO and CFO.  The certification requirements are backed up by possible criminal sanctions for violations.

Change in Corporate Governance Structure A listing requirement of the major stock exchanges is that the company’s board be comprised of a majority of independent directors.  Independent directors cannot be officers, employees, major stockholders or outside service providers.  Independent directors must comprise the audit, compensation and corporate governance committees.  This means that the duties of selection and oversight of auditors, setting executive compensation and determining board candidates and litigation issues are taken away from management and given to “strangers” that may have little past experience with the company’s operations.  Another listing requirement is holding annual stockholder meetings.  Matters such as calling meetings and presenting proposals to stockholders must now be accomplished in compliance with SEC rules.

A major change brought about by Sarbanes-Oxley was empowerment of the independent directors.  Previous “best practices” of having a majority of independent directors are now mandated by exchange listing requirements.  The independent directors are charged with oversight of the company’s management and auditors.  For most companies, particularly where the founders are executive management, the change in corporate governance structure resulting from being a public company may take some adjustment.

Becoming a Slave to the Stock Price It is often said that a professional baseball pitcher is only as good as his last outing and that a CEO of a public company is only as good as her company’s last quarter.  While a fluid and liquid market in a company’s stock unlocks value, a public company’s stock price is frequently subject to rapid fluctuation.  The stock price can be affected by a variety of factors, over which management may have little or no control.  Reporting of quarterly earnings can lead to decision making based on the short term result when a longer term perspective would be better for the company.  The close ties between executive compensation and their personal net worth to operating results enhances the dilemma of seeking short-term results at the sacrifice of long-term perspective.  Wall Street can be impatient and, as with baseball pitchers, may have a tendency to look only to immediate past results rather than the big picture.

A loss of stock value can lead to dire consequences, such as stockholder lawsuits, loss of confidence in management and possible hostile takeovers.  Lawsuits can stem from a sudden decline in stock price.  A stockholder lawsuit can be very costly and distract management from running the business.    Recently stockholder activism has been on the rise and dissatisfaction with directors (including executive management on the board) has been evidenced by stockholders withholding approval of directors.  Various proposals, such as mandatory removal of directors that do not win a majority of stockholder approval in elections, are increasing the pressures on management to perform on a quarterly basis.  If a company loses favor with analysts and stockholders, its stock may suffer additional devaluation, which could lead to it becoming attractive to a hostile takeover bid.  A successful takeover, particularly a hostile takeover, could result in the company’s founders being removed from management positions.


While going public can have many positive effects on a company and its operations, these positive effects must be balanced against the disadvantages.   Going public drastically changes a company’s culture and has an ongoing impact on business operations.  Determining if going public is the right course for a company to pursue is a major decision and must be carefully considered by management before this course is taken.


Thomas Morgan is a partner in Lewis and Roca’s (www.lrlaw.com) Phoenix office in Phoenix, Arizona. He practices securities, corporate and tax law with an emphasis in public and private securities offerings, private equity fundings, mergers and acquisitions, regulatory compliance, and general tax planning. He can be reached at 602.262.5712  or TMorgan@LRLaw.com


The Secret To Success For The Nation’s First 100% Online Public University

Colorado State UniversityOnline education was not a new idea, but the scale and scope of what it could achieve may not have fully been realized when the Board of Governors for the Colorado State University System pioneered a new vision for a completely online, independent university in late 2007. As a state university system with ground campuses in Fort Collins and Pueblo, trailblazing with such plans was an especially risky endeavor. But the Board’s vision and conviction remained unwavering, and they created a university with both the innovation and flexibility of for-profit institutions and the quality and academic standards of a public university within the renowned CSU System.

That university is Colorado State University-Global Campus. Ranked as a top online university by the Online Education Database, CSU‑Global’s success can be attributed to its innovative design and continual advancements in key areas related to its students. The mission of CSU‑Global differs from other universities that offer online courses because it was specifically designed for adult learners and working professionals. Its degree programs are all based in the development of practical knowledge and leadership skills that can help students advance their careers through education.

Courses are designed and built exclusively for the online learning platform, making the curriculum more engaging and interactive than traditional classroom lessons simply placed into a virtual space. Faculty are specially trained to teach and mentor in the online environment and are equipped to communicate with students from anywhere in the world.

“CSU-Global has a recognizable name with strong credentials,” stated Amy Stanton, a recent graduate from the Bachelor of Science in Business Management program. “I was a working mom who wanted to finish my education. My time was limited but my drive was strong. This program worked well for my busy schedule.”

Stanton is one of the many students who benefit from the online format of CSU‑Global’s degree programs and courses with no set class times or locations. The structure of the CSU-Global coursework includes discussion posts and other written assignments due Sunday nights throughout an 8-week class. Students can work during their lunch break, children’s nap times, Saturday mornings, or any other times that are most convenient for them.

“I had the opportunity to finish my degree without stopping my life…which helped me succeed in my profession. I am now an insurance agency owner who feels I can manage my family and career,” Stanton said with pride.

CSU-Global President, Dr. Becky Takeda-Tinker, agrees that CSU‑Global’s fully online learning platform is one of the many reasons why the university has grown so quickly, “Earning a degree is a significant and worthy aspiration,” she said, “but our students know that education is only part of their overall life goals. At CSU‑Global our students can find the time to excel in class as well as in their personal and professional lives.”

CSU-Global students receive one-on-one advisor support from admission to graduation with the ultimate goal of making sure they can complete their degree or other learning goals. CSU-Global’s fixed tuition rate ensures that the cost of obtaining a degree won’t go up, and allows incoming students to budget for educational expenses in advance. Maximizing transfer credits from previous colleges attended, identifying alternate ways to secure credit, and the accelerated 8-week courses helps adult students finish their degree as efficiently as possible. A full scale Career Center is also available to all students and alumni to help increase their earning potential and help businesses find highly motivated and talented employees.

“We are truly driven by our student’s success,” continued Dr. Takeda-Tinker. “Our hard working faculty and staff are inspired daily by their accomplishments. Our students are the real secret to all of our success as a university.”

RED Awards Banner

Best Public Project 2011

Musical Instrument Museum

Best Public Project 2011: Musical Instrument MuseumDeveloper: Musical Instrument Museum
Ryan Companies US
RSP Architects
190,000 SF
4725 E. Mayo Blvd., Phoenix
April 2010

As the first global musical instrument museum, the 190,000 SF ground-up project houses more than 12,000 instruments and objects representing musical traditions. The museum’s modern massing and modest mix of simple forms and materials blend with the desert landscape. MIM includes a state-of-the-art, 299-seat theater. Much of the façade was constructed of sandstone imported from India. The lobby/atrium space, known as “El Rio,” is finished in Venetian plaster  and Italian porcelain tile. Sustainable features were integrated, including the use of fly ash in the concrete, 25,000 SF of photovoltaic solar panels on the second-story roof areas, a chemical-free chiller water system and extensive xeriscaping.

Honorable Mention: Randall McDaniel Sports Complex

Honorable Mention 2011: Randall McDaniel Sports Complex, SmithGroupDeveloper: City of Avondale
Sundt Construction
113,000 SF
755 N. 114 Ave., Avondale
October 2010