Tag Archives: squire sanders and dempsey

Arizona Commerce Authority - AZRE Magazine November/December 2010

Arizona Commerce Authority: Team Effort in Arizona CRE

If there’s one person who can help give Arizona the home-field advantage when it comes to attracting new businesses, new jobs and making the state more competitive in the global market, it’s Jerry Colangelo, the vice chairman of the Arizona Commerce Authority.

Perhaps that’s why Gov. Jan Brewer picked the Valley businessman as vice chairman of the newly formed Arizona Commerce Authority, a private sector board that will replace the Arizona Department of Commerce. The 35-member board includes a diverse group of business and educational leaders from across the state.

No matter what you’re in, it takes teams and people to win,” Colangelo said. “It’s true in every walk of life. Look at the disconnect that has existed in our state for such a long time, with the Legislature, with the business community, the lack of a game plan. Everyone has to be on the same page. And so the good news is this: There’s only one way to go. There is plenty of space here for us to be very, very successful.”

There definitely is room to grow when it comes to business attraction in Arizona.
According to Department of Commerce statistics, 47 companies located or expanded in Arizona in 2007, bringing a capital investment of $1.6B, almost 10,000 new jobs and an annual payroll of $483M. Then the recession hit and in just two years those figures took a nose dive: 24 companies located or expanded in Arizona with a capital investment of $255M, 2,649 jobs and a $124.6M payroll.

“When I became governor, I promised to get Arizona back on track by creating quality jobs, attracting high-growth industries, and advancing our competitive position in the global economy,” Brewer said. “With this board, I have now delivered a model to advance Arizona.”

Arizona Commerce Authority: Addressing the Industry’s Needs

How that model will advance Arizona is a question those in commercial real estate are asking. To its credit, the Arizona Commerce Authority includes several board members with direct business ties to the industry.

They are: Drew Brown, chairman of the board, DMB Associates; Peter Herder, chairman of the board and CEO, Herder Commercial Development; Mike Ingram, CEO and president, El Dorado Holdings; Doug Pruitt, chairman and CEO, Sundt Construction; and Mo Stein, principal and senior vice president, HKS Architects.

How do those in the industry envision an entity such as the Arizona Commerce Authority boosting a sagging commercial real estate market in Arizona?

“I look for the Arizona Commerce Authority to create a business model for all aspects of development in the state,” Stein said. “The authority will allow leverage of both public and private strengths that go beyond individual projects to opportunities that impact large segments of our communities and industries throughout the state.”

Mike Haenel, executive vice president, Industrial Division at Cassidy Turley BRE Commercial, noted: “I would like the Arizona Commerce Authority to communicate to the State Legislature exactly what it would take to relocate a company to Arizona. Thanks to a sophisticated local commercial real estate development industry, we have well-located and functional real estate available. Given the current economic conditions, pricing is extremely attractive, which translates into a perfect time to rent and or buy real estate in Arizona. The Arizona Commerce Authority needs to figure out what our state government should do to be competitive in attracting and retaining companies.”

Jim Gibson, senior associate in real estate at Squire, Sanders & Dempsey adds: “There has always been a long-standing partnership between economic development and the commercial real estate industry. Because of its role attracting new businesses to the state, I suspect that the Arizona Commerce Authority will be a tremendous resource for lead generation to brokers, developers and others in the industry. In addition, because of the Arizona Commerce Authority’s make-up of leaders in the private sector, it seems well-positioned by having both the business savvy to understand the wants and needs of companies looking to expand or relocate to Arizona, as well as having established relationships in the real estate industry to help each company assemble the right team depending on its particular real estate needs.”

Brewer made sure the new Arizona Commerce Authority is a statewide endeavor. While most board members are from the Metro Phoenix area, there also are four board members from Tucson, two from Flagstaff, and one each from Prescott and Yuma.

By creating a more competitive landscape and making economic development a higher priority, commercial real estate opportunities and transactions will result,” said Joe Snell, president and CEO of Tucson Regional Economic Opportunities (TREO). “The ability for the authority to assist groups like TREO in attracting and expanding primary jobs will result in significantly more commercial opportunities downstream.”

Listening to the Industry’s Concerns

While those involved are excited over the prospects of what the Arizona Commerce Authority may be able to achieve, there also is guarded optimism. Mark Singerman, regional director of Rockefeller Group Development Corp., said that just to stay even with what most other states offer, Arizona needs to become more competitive in attracting businesses to relocate here. He cites SB 1403, a bill giving special tax breaks and incentives to the solar energy industry.

Within several months of that incentive for renewable energy companies becoming law, there were at least a dozen solar companies looking to locate here,” Singerman said. “This type of incentive program needs to be expanded to all desirable industries.”

Up until 2006, Singerman said, Arizona became complacent about attracting residents and businesses. By virtue of being in close proximity to high-cost California, the state enjoyed steady growth with little effort.

“We now have to up our game to stay even with other states,” Singerman said. “If we have competitive economic incentive programs similar to what other states offer, our total package will be hard to beat when companies do their comparisons. But we are not there yet.”

Added Tim Lawless, president of NAIOP-AZ, adds: “While strategically targeting specific industry sectors like aerospace in the hopes of further diversifying our state’s economy is laudable, it is very unclear what the Arizona Commerce Authority can or will do to assist the vast number of firms that are already in the state, especially with their very limited budget. We need to keep in mind that we have more than 350,000 firms in our state and we need policies that will create an environment for them to survive and add jobs.

This can only happen should the Commerce Authority advocate for broad-based tax reform, rather than exclusively relying on esoteric tax breaks that create winners and losers,” Lawless continued. “Cake and ice cream tax breaks for industries like solar are fine, but only after a more substantial and well-balanced economic development diet is put on the table for all firms.”

For the Arizona Commerce Authority to make the state more competitive in business attraction, Lawless said Arizona needs to lower overall commercial property tax burdens, which are among the highest in the U.S.; create a significant deal-closing fund (non-tax benefit related) to land large employers that leverage the highest paying jobs; and lower corporate income tax rates that would put the state in a better position to compete with other Western states.

Arizona’s political climate could be another stumbling block in attracting new businesses, said Marty Alvarez Sr., CEO of Sun Eagle Corp.

“Part of the problem is the perception throughout the country that Arizona is a racist state with no upside for their companies to move here,” Alvarez said. “The Hispanic business community needs to be part of the marketing effort to dissuade the thought that our state is in political turmoil. This is the time to bring national and international firms to Arizona.
The collaboration led by the ACA needs political, social and business direction from the Hispanic business community in order to create a positive atmosphere for incoming companies,” he added. “The idea and implementation of the ACA is not only good but is a necessary solution for the future economic well being of our state. The leaders chosen to enact this organization and jumpstart the dialogue must be a public-private partnership.”

AZRE Magazine November/December 2010

Social media sites are no longer just places to reconnect with childhood friends or college roommates.

Social Media And The Hiring Process: Your Profile Can Sink Or Save You

Social media has set up camp in the professional world and is there to stay.

Social media sites are no longer just places to reconnect with childhood friends or college roommates. Companies now use social media websites to do unofficial background checks on potential employees.

A Cross-Tab Marketing Service study, released earlier this year, reveals that 70 percent of companies have rejected a candidate based on an inappropriate social media website posting.

This is a scary reality for everyone who uses these sites as a harmless way to catch up with friends, but may have crossed the line by uploading funny, yet work-inappropriate pictures. In today’s world, a world inextricably tied to the Internet, anything posted on a public page can and will be found by potential employers, says Lew Clark, an attorney with Squire, Sanders and Dempsey.

However, there are ways to prevent shooting yourself in the social media foot and, if you’re smart, work the system.

There are a few obvious things not to have on Facebook, MySpace, Twitter, YouTube or other social media websites — including inappropriate photos or conversations. Poor grammar, spelling or writing skills, use of profanity, and poor people skills also can turn off a potential employer, Clark says.

“One of the huge no-nos that we discuss with folks … is to never, ever post anything negative about a former boss, co-worker, employer. It creates the wrong image. No matter if it’s true, valid, anything else, you just do not want to go there,” says Cindy Jones, vice president of human resources at Synergy Seven.

Don’t despair. Companies aren’t just looking for reasons to disqualify you. They’re also looking for reasons why you’re perfect for the job, Jones says. Especially on professional social media sites, such as Linkedin, companies look to see prospective employees’ connections.

If used properly, social media can be an effective marketing tool, Jones adds, providing a real-world example of how to use social media as an advantage.

When a woman decided to switch careers from Realtor to sommelier, she changed both her professional — Linkedin — and personal — Facebook — social media pages to reflect her new career path. She posted her excitement about passing tests toward receiving sommelier certification and changed her main picture to one of her toasting with a glass of wine.

While this type of online makeover won’t work for all fields, Jones says it’s an example of using social media to one’s advantage.

“There’s nothing at all improper with a prospective employer (looking) on someone’s public Facebook page, their public Twitter page, or any other online networking website that you can access publicly,” Clark says.

However, accessing a potential employee’s private page by figuring out the password, accessing it through someone else’s page or by pretending to be someone else is illegal, he adds.

Aside from accessing a page illegally, employers can find themselves in other sticky situations.

Employers may find information about a person’s religion, health, age or personal life that they wouldn’t otherwise learn and can’t legally take into consideration in the hiring process, Clark and Jones say.

“The risk to the employer is that someone could allege that you used information that is legally protected to decide whether to hire somebody or not,” Jones says. “Our guidance with most companies starts at the place of there’s nothing illegal about it, but be careful.”

Clark adds: “Employers are looking for whatever resource they can to try to get information about candidates so they can make a good hire.”

Background checks, including checking social media websites, can reduce costs, encourage honesty among employees and ensure the best person gets the job, says Marcia Rhodes from WorldatWork, a global human resource association.

Although using social media in the hiring process offers many perks, Jones and Rhodes say they’ve seen a trend in which companies are limiting social media background checks on possible employees, contrary to the report previously cited.

Kim Magyar, an attorney with Snell and Wilmer, says she doesn’t see the number of companies using social media decreasing, but companies are being more targeted and cautious with their searches.

Some companies wait until they’ve already interviewed a candidate to check social media, while others check before they conduct an interview, says Magyar, who has given presentations on social networking and the workplace.

Many companies believe social media can be a treasure trove of information; information that might not always be accurate, Magyar says.

“There’s nothing to prevent an employer from making decisions based upon what they see (on social media sites),” Clark says.

Nothing, except the awareness that public social media pages are fair game and the preparedness of prospective employees to maintain their pages in a way that represents them in a respectable, hire-able way.