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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

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

Take it with you! On your mobile, go to m.issuu.com to get started.

Real Estate Outlook

AZRE Magazine March/April 2012: Real Estate Outlook

March/April 2012:

2012 Real Estate Outlook

In this issue, AZRE taps key players from a variety of real estate-related disciplines and asks them to check their crystal balls and predict whether commercial real estate will soar, slump or stagnate in 2012. You’ll also find the winners and honorable mentions of the prestigious 7th Annual RED Awards. In addition, AZRE begins its coverage of Valley Partnership’s 25th anniversary with a roundtable discussion of federal issues that affect development in Arizona. Our annual “Construction in Indian Country” profile examines how Native American communities are building and investing in retail projects.

Take it with you! On your mobile, go to m.issuu.com to get started.

November Commercial Real Estate Networking Events

November Networking Events

November Networking Events

Western Maricopa Coalition (WESTMARC)

Best of the West Awards
Nov. 3 & 5 p.m.
9495 W. Coyotes Blvd., Glendale

Come join the Western Maricopa Coalition for its 19th annual Best of the West Awards, which celebrates the best of Western Maricopa County, recognizing outstanding contributions to the image, lifestyle and economic development in the county. Business or cocktail attire is required at this event. The reception starts at 5:30 p.m., while the dinner and awards start at 7:00 p.m.


NAIOP

NAIOP Golf Tournament
Nov. 17, 8 a.m.
9998 E. Indian Bend Rd., Scottsdale

Show off your best athletic skills at the NAIOP Golf Tournament at the Talking Stick Golf Resort. The pre-reception and registration begin at 8 a.m., with the shotgun start at 9 a.m. and the post-reception at 3 p.m.


Valley Partnership

Friday Morning Breakfast
Nov. 18, Dec. 16, 7 – 9 a.m.
2901 N. 7th St., Phoenix

Come check out Valley Partnership’s annual holiday wreath raffle at this month’s Friday Morning Breakfast, held at the Phoenix Country Club. Members are strongly encouraged to donate a holiday wreath, which will be presented and raffled off during the event. All proceeds from the raffle tickets will be donated to Maggie’s Place, the charity chosen for this year.


American Subcontractors Association of Arizona

Holiday Open House
Dec. 14, 4 p.m.
4105 N. 20th St., #230, Phoenix


Arizona Commerce Authority

Board Meeting
December 13, 10 a.m.
333 N. Central Ave., Phoenix

ACA focuses on recruitment of quality companies and jobs for Arizona as well as the expansion of established, local companies already here and will hold a board meeting December 13.

AZRE Magazine November/December 2011

AZRE, AZ Commercial Real Estate

AZRE | Arizona Commercial Real Estate

A bi-monthly publication that debuted in January 2005, AZRE | Arizona Commercial Real Estate is Arizona’s only publication dedicated to covering up-to-date happenings within commercial development, brokerage, finance, construction, architecture, real estate law and property management.

Additionally, Arizona Commercial Real Estate is an active voice within the commercial industry with local media partnerships to organizations such as NAIOP, ABA, ICSC AZ, AIA AZ and Valley Partnership.

Pulling together the multiple facets of the commercial real estate industry in Arizona, Arizona Commercial Real Estate reaches out to the largest local and national commercial real estate audience within the Grand Canyon State, West Coast and beyond.

Arizona Commercial Real Estate has gained not only local, regional and national attention from its pool of readers, but international attention as well.

With a 25,000 circulation, AZRE began publishing its own annual publication, People to Know, in 2008. PTK is an annual resource guide and a useful informative tool that further supports the local industry’s mission to build great communities throughout the state of Arizona. AZRE created this publication to open new lines of communication, better inform those who enter our state, as well as connect natives who have seen the state prosper and grow over the years.


Read articles from AZRE’s September/October 2011 issue, or pick up a copy today:

AZRE Magazine Nov/Dec 2011 Cover

In this issue of AZRE, find out how Arizona’s Native American tribes are diversifying their economic portfolios in our Development section of the magazine. In our Centennial section, we feature the biggest and best commercial buildings in Arizona history; and DPR, Cannon Design and Banner Health are teaming up — find out why.


AZREMagazine.com

AZRE’s website features everything you’d find in the magazine, including new to market projects, including education, hospitality, industrial, IT and more; newsmakers, including awards, new hires and promotions; economic development, events, articles about green and sustainability, breaking commercial real estate news and more.

If you’d like to contact the editor of AZRE and send him press releases, story ideas and more, please email Peter Madrid at Peter.Madrid@azbigmedia.com.


AZRE | Arizona Commercial Real Estate’s Archive


Valley Partnership Community Project, AZRE May/June 2011

Valley Partnership Annual Community Project

The Valley Partnership Annual Community Project restored the old Phoenix Day playground.

The old playground at Phoenix Day was an assortment of aging equipment — it met state standards for safety but wasn’t quite what educators at the inner-city child enrichment center wanted: a fun, vibrant outdoor learning environment for children who usually don’t have access to great amenities.

All that changed last November when more than 100 volunteers from Valley Partnership descended on the Phoenix campus for the annual Community Service Project. Their goal was to transform the sandy, walled-in courtyard into an outdoor haven for young learners.

By the time volunteers finished, Phoenix Day’s new playground boasted bright, engaging equipment; grassy, green play areas; a sand pit in which to dig and build; a meandering tricycle path; a garden; a brightly painted infant courtyard; and plenty of new plants and trees.

“Valley Partnership helped us realize the dream of a quality outdoor environment,” says Phoenix Day Executive Director Karyn Parker, who is serving her second term overseeing the center. “We wanted an outdoor environment that was a learning environment as well, and now we have one.”

Valley Partnership, AZRE May/June 2011Phoenix Day was a good fit for Valley Partnership’s annual project, which draws volunteers and in-kind donations from the organization’s diverse partners throughout the commercial real estate industry.

“We try to find projects that are the right size for us,” says Ben Shunk, current chairman of the Community Project Committee and a senior project manager at Adolfson & Peterson Construction. “We want to make sure the project’s not too big for us to make an impact.”

The impact on Phoenix Day has been a powerful one, Parker says, and is both immediate and long-term.

The immediate impact of the Valley Partnership project includes:

  • Play equipment that now includes pieces especially designed for toddlers.
  • An infant area that is brightly painted and visually stimulating.
  • A long-dreamed-of tricycle path that allows children to traverse the grounds, all the while riding on different textured surfaces.
  • Synthetic grass with a resilient surface and cushioned padding.
  • A sandpit area with play backhoes.
  • New plants and trees, as well as a brand new sprinkler system.
  • Fresh paint on cement walls.

The long-term benefits are an environment that allows Phoenix Day instructors to teach outdoors, particularly in the garden, where children can learn about sustaining plant life. The center also plans to add features such as a rabbit hutch and a butterfly garden, complete with worms and caterpillars.

“This will allow for seasonal learning,” Parker says, adding that an “indoor-outdoor connection” is an important part of a child’s development.

Almost 80 percent of Phoenix Day’s children come from homes in which the average income is between $14,000 and $18,000 for a family of four, she says. Parents often don’t have the money or the means of transportation to take their children out and about in the community. Now, they have a great spot right in their own neighborhood.

The annual service project is an important component of Valley Partnership’s mission, which also includes networking, education and advocacy.

“Everyone feels great being a part of it,” says this year’s board chair Mindy Korth, anValley Partnership, AZRE May/June 2011 executive vice president at CB Richard Ellis. “At Valley Partnership, we believe even an organization should tithe back to the community.”

While the actual group project takes one day, Shunk says planning for the event starts months before. Committee members typically choose an organization and then spend months preparing, which culminates in a well-coordinated, well-timed workday.

For November’s workday, volunteers from Trudell Design Studios and Wildwood Design surveyed the property and prepared an overall plan.

Then, Valley Partnership volunteers prepared paperwork regulating state requirements for child-care facilities, created a needs list and distributed it to Valley Partnership members.

Partners then stepped up to prep the site, performing such tasks as removing old cement and grading. So on Nov. 8, Shunk says every volunteer knew what to do to finish the work.

Not only is it well coordinated; it’s a lot of fun.

“It’s a great group of people. Everyone is smiling and working hard,” he says. “Everyone checks their egos at the door and realizes what the end result is.”

AZRE Magazine May/June 2011

Valley Partnership, AZRE May/June 2011

Valley Partnership: Carlyn Oberholtzer

As zoning lawyer with Rose Law Group, Carolyn Oberholtzer meets regularly with municipal employees and elected officials, as well as real estate developers, landowners and clients. As a member of Valley Partnership for the past seven years, she says she believes the organization has benefited her career through its positive connection to different real estate professionals.

“(Valley Partnership) is meaningful not just because of who you associate with, but how you associate with them,” Oberholtzer says. “It really brings the parties of the industry together, who are often working opposite one another, toward a common goal.

“Through those relationships, you are able to accomplish things that really benefit the industry at large from an advocacy standpoint.”

Valley Partnership Friday Morning Breakfast’s

One of Oberholtzer’s favorite aspects of Valley Partnership is its monthly Friday Morning Breakfasts. The breakfast speakers cover specific topics as they pertain to the commercial real estate industry.

A recent Friday Morning Breakfast dealing with economic development in Arizona was especially memorable for Oberholtzer.

“That was a great one because it really helped to frame the issues for what will make our state successful from an economic development perspective,” says Oberholtzer, who is a member of Valley Partnership’s City/County Committee, and the State Legislation and Federal Affairs Committee. Last year she was a member of the Events Committee.

“Our organization is made up of people who develop,” she says. “It’s critical that we know what the market will need so that our developer clients can provide for that demand.”

Despite the recent economic upheaval, Oberholtzer has stayed positive about the future of the real estate industry.

“Where there’s a will, there’s a way,” she says, “and this industry has a lot of will.”


Valley Partnership Advocates and Allies, AZRE May/June 2011

Valley Partnership: Advocates And Allies

As Arizona emerges from a grueling global recession, business and civic leaders are focusing on creating jobs and jump-starting our economy. Valley Partnership, as the state’s only grass-roots organization devoted to promoting responsible development, is poised to play an important role in that process.

“Our goal is to help stimulate the local economy by our actions,” says this year’s board chair Mindy Korth, an executive vice president and capital markets broker at CB Richard Ellis.

With its extensive ties throughout the development community, as well as into municipal and state offices, Korth says Valley Partnership is in a unique position to help get the economy moving again.

To say the past two years have been challenging for the commercial real estate industry would be an understatement.

Speculative construction in the office, industrial and retail sectors just about ground to a halt, with most construction occurring on build-to-suit projects or others already in the pipeline.

And as the Valley begins to see an uptick in business activity and employment, it is more crucial than ever that the principles of responsible development and job creation come to the forefront — something Valley Partnership has been promoting for 24 years.

As in the past, the linchpin of Valley Partnership’s efforts will be its advocacy, Korth says. Historically, the organization has been remarkably successful in rallying its partners — either against measures that would impose onerous restrictions on development, or on behalf of measures that would promote good growth.

“That’s an ongoing effort,” says Richard Hubbard, president and CEO of Valley Partnership. “We’ve always advocated against over-burdensome regulations at the local and state level.”

This year, Hubbard says Valley Partnership also will emphasize partner-to-partner relationships, as well as those between private and public entities.

Standing Apart

Valley Partnership’s more than 500 partners include representatives from all tiers of commercial real estate — from developers to attorneys to general contractors and engineers. Two important characteristics set it apart from other organizations: its relationships with public sector and government representatives and its emphasis on local stakeholders advocating on behalf of local issues.

“We are specific to the Valley,” says Rick Hearn, director of leasing for Vestar, one of Valley Partnership’s original corporate partners. Hearn has served on the board of directors for six years, and in that time has witnessed the organization’s partners tackle thorny local issues.

“We advocate on behalf of this industry better than anyone else,” he says, adding, “Not one of the national organizations comes close to touching the value proposition of what we do. We work at so many levels and have so many relationships.”

Not only does Valley Partnership share information and expertise with municipal and state leaders, it also has ties to federal officials and even someone at Luke Air Force Base.

City, state and federal partners can dip into Valley Partnership’s brain trust and glean important information on many pressing issues, Korth says.

For example, a municipality that is re-examining its city plan can garner feedback from Valley Partnership. The organization’s task forces dig deeper into issues, then forwards recommendations to a committee before the organization arrives at a public stance.

Some of the measures its committees are examining include:

  • The Maricopa Association of Government’s efforts to design a dark-sky ordinance to reduce excessive light, while also addressing safety issues for tenants and customers.
  • Maricopa County drainage permits and other building permit issues.
  • Incorporating Green Building Codes within Valley cities’ building codes.
  • Proposed city general plans.

Valley Partnership Value Proposition

Another important initiative this year is to make partners more aware of the value that Valley Partnership adds to their efforts. Korth says the communications committee is working hard to articulate back to all partners on what is being accomplished.

“We need to let them know that there is no one else like us here and if we did go away there’d be a gaping hole,” she says.

While membership did drop some during the recession, it is starting to tick back up, Hubbard says. As it does, Valley Partnership also is setting goals for its other key functions: education, networking and public service.

Hubbard said the organization surveyed its members to see what issues they would like to see addressed at educational events and Friday breakfast meetings, a staple for many partners.

Respondents said they would like to hear from industry leaders in the community and those involved in important development issues.

Signs are evident, Hubbard says, that their message is resonating with people in the commercial real estate community. More than 50 people attended the first January meeting of the committee that oversees city and county issues, a big jump from the usual six to eight attendees.

Partners recognize that advocacy on behalf of responsible development reaps dividends for everyone. Korth says: “If you go alone, you may go faster, but if you go together, you go farther.”

AZRE Magazine May/June 2011

Mindy Korth, Valley Partnership - AZRE Magazine May/June 2011

Valley Partnership: Mindy Korth

Mindy Korth has served in a variety of capacities during her 26-year commercial real estate career and has been on the front lines of an up-and-down industry. Korth, an executive vice president at CB Richard Ellis and this year’s Valley Partnership chair, says the advocacy role Valley Partnership plays is crucial to its members in the current recession.

A graduate of Arizona State University with a bachelor’s degree in business administration, Korth is Valley Partnership’s first chair who is an active real estate broker as a capital markets sales professional for the past 14 years. She has been on the Valley Partnership board of directors since 2007, serving as vice chair in 2010. Korth serves on boards for several other organizations, including Social Venture Partners, Channel Eight/KAET Public Television and the Discovery Triangle Development Corporation. She is also a member of Soroptimists and Arizona Commercial Real Estate Women (AZCREW), where she is a past board member.

Q: What does it mean to be an advocate for the commercial real estate industry?

Valley Partnership works to stay in touch with its real estate industry partners’ needs and to understand how local, regional, state and federal policy will affect their ability to thrive in this metropolitan area. We support those public-sector initiatives that promote the health of our industry.

Q: How important is that advocacy during these tough economic times?

Advocacy is important in all economic times. Valley Partnership was established to pool the resources of many in the real estate industry, and to address and bring awareness to the myriad of real estate-related issues that impact our community.

Q: Valley Partnership’s 2011 goals?

The board has set goals that include partner retention, new partner recruitment, outstanding programs that inform and inspire our partners, fun events, community service and most importantly, working closely with our municipal partners to support their initiatives.

Q: How will you achieve these goals?

Our board has engaged in strategic planning sessions through which we created definitive action items and a scorecard to track our progress. Our board is comprised of very talented real estate professionals who have great vision on what is needed and how Valley Partnership can serve our community. Our City/County Committee has a goal to form task forces as needed and already has created three to address and provide input on proposed policy changes. Legislative proposals are reviewed by members of our State Legislative Committee, which then forms recommendations for further action.

Q: What are the biggest challenges in 2011?

There are many controversial issues being discussed within city, county, state and federal chambers. Our role is to be the steady sounding board, bridging and partnering to promote responsible growth. We have found ourselves often asking the question “Should we take a position?” If we say “Yes,” then we ask, “How can we do this in a balanced manner?”

Q: Any advice for partners?

Get involved. Attend our events. Have fun. Create relationships and promote business-to-business among your fellow partners. If you are not familiar with advocacy and want to learn, participate in one of our advocacy committees. You may not be adept the first year, might start feeling comfortable the second and by the third year you will be surprised at what you can do.

For more information about Mindy Korth and Valley Partnership, visit www.valleypartnership.org.

AZRE Magazine May/June 2011

Valley Partnership, AZRE Magazine May/June 2011

Valley Partnership: Ben Shunk, Adolfson & Peterson Construction

Ben Shunk, senior project manager for Adolfson & Peterson Construction, was first attracted to Valley Partnership when he learned about its Community Project Committee.

Six years later, he remains active in all aspects of the organization, and is finding career success in its networking opportunities.

“(Valley Partnership) has helped me in my career because it’s a local organization where people who are trying to make a difference in the commercial industry as a whole can meet,” Shunk says. “This includes architects, developers, contractors, engineers, subcontractors, city personnel, attorneys — basically everyone who touches the private and public real estate industry.”

Shunk hasn’t lost his passion for community service, though, and served as chairman of the Community Project Committee in 2010.

The project Shunk spearheaded was with Phoenix Day, one of three day care facilities in South Phoenix. The team spent the first Saturday in November renovating the facility’s courtyard playground.

Shunk says he believes that was his single best experience with Valley Partnership.

“Even though it was a tough year for the economy, we had a great group of committee members, and it turned out to be an amazing project even in the tough economy,” he says.

Shunk adds that he is proud to be a part of Valley Partnership because he believes the organization serves a vital purpose in real estate, calling it “the voice of industry professionals.”

“If there are issues that the industry is passionate about, (members) can have a voice and an impact,” he says. “If it wasn’t for an organization like Valley Partnership, I don’t think those opinions would be heard.”

Shunk says he has high hopes for the real estate industry after a difficult few years, adding that “2010 was a little rough for everyone. We’re seeing a lot of momentum for 2011.”

For more information about Ben Shunk and Adolfson & Peterson Construction, visit www.a-p.com.

AZRE Magazine May/June 2011

Todd Holzer, NAIOP-AZ - AZRE Magazine September/October 2010

NAIOP-AZ Chairman Todd Holzer Provides Leadership At Crucial Time

After more than a quarter century in commercial real estate, Todd Holzer, chairman of NAIOP-AZ, has been witness to many industry ups and downs.

Holzer began his career with Opus Southwest in Phoenix and San Diego. After 12 years at Opus, he moved on to DeRito Partners, where he spent eight years developing retail projects. Now in his sixth year at Ryan Companies US Inc., specializing in office and industrial projects and overall marketing for its Southwest regional operation, Holzer says market conditions in Arizona make for some intriguing times.

“Two things that I find interesting about our local market: First, the volatility of the Metro Phoenix market has to be among the greatest of all major U.S. markets,” Holzer says. “It seems that in my career, the overall market conditions for office and industrial have either been on fire or in the dumps. There are days I wish we were a little more steady, like some other Ryan offices in the Midwest. The feast-or-famine scenario we have can be an emotional and economic roller coaster for those in the business.

“Secondly, and again unfortunately, I always think about what could have been a very cool, relevant Downtown Phoenix. Despite some good vision out of the City of Phoenix political leaders, we are still a metro area that has grown outward with sprawl. I wonder if true urbanism can happen here. Most people live here to take advantage of activities that are suburban in nature: golf, hiking and other outdoor activities that don’t occur in a downtown setting.”

Holzer takes the reins at NAIOP-AZ during rocky economic times, but he says he is up to the challenge. When he started at Opus, he joined NAIOP-AZ mainly for networking purposes.

“When I moved into retail development, I spent more time and energy in other organizations such as ICSC, Valley Partnership and ULI,” he says. “But when I came to Ryan with an office and industrial focus, I decided that I needed to get back into NAIOP and take on a leadership role.”

Holzer has been on NAIOP’s local board of directors for five years and on the national board for three. After about two years on the local board, he was asked to take on the time and challenge of training for his eventual role as chairman.

“I have served under a few visionary and hard-working chairmen that have given me the experience to run the local chapter in what are very challenging times,” he says.

Holzer is not one to dwell on the negative. Instead, he says focus should be put on the quality of projects being built today, including NAIOP-member LEED certification initiatives.

“I take my hat off to some developers in our market that build with quality and with vision,” he says. “RED Development building CityScape and SunCor building Hayden Ferry are great projects that went to a level that most developers would not go.

“In my opinion, there has not been an increase in the quality of office projects over the last 15 to 20 years. The granite exterior projects built in the ’80s and early ’90s have stood the test of time. Most developers don’t build true quality because they are building to the level requested by the tenant and user market, and tenant and user groups have been fixed upon cost rather than quality and amenities.

“On the other hand, industrial projects have been built in the last cycle to a much higher standard of function than in the past.”

Among those higher standards is building to LEED specifications and the move toward more energy-efficient projects. Nationally, Holzer says, NAIOP has become fully engaged in LEED initiatives by having educational events tied around the green movement, with the major event being an annual conference dedicated to energy-efficient development. Phoenix hosted the conference a few years ago.

“Locally, we are giving awards to the best energy efficient new development each year at our Best of NAIOP event,” he says.

Examples of recent projects, Holzer cites, are Liberty Property Trust and its Scottsdale building for Vanguard; Lincoln Property Company and the Arizona Game and Fish Department building; Ryan’s 3900 E. Camelback building; and Hines’ office building at 24th Street and Camelback. There also are numerous local municipal and higher-education projects that have been built to LEED standards.

For those in the commercial real estate industry preparing for the future, Holzer offers this advice:

“At the present time, our industry is going through a monumental change,” he says.

“Speculative development will not re-appear for approximately five years in the Valley, so new development will be way down and that side of the business will not be hiring. People and companies will need to reinvent themselves. Take your strengths and use them in different ways within our industry.

“We are still the fifth-largest city in the country and our role as a major place of commerce in the Western U.S. will continue to grow.”

Holzer predicts 2011 will be a sequel of 2009 and 2010; users and tenants are price sensitive and looking for deals.

“We are in a period where land, rents and construction costs are on sale,” he says. “Those with a long-term approach and sufficient funding can solve real estate needs at very attractive costs.”

Some of the biggest challenges Holzer sees in 2011 are lack of capital and nominal job growth. The industrial sector needs capital to be available to companies for expansion and purchasing of inventories and equipment, he says, and the office sector is tied to job creation.

“Unless we can get local and national job creation to pick up dramatically, high-vacancy rates and shadow space inventory will continue with us,” Holzer explains. “The main challenge facing most sectors of commercial real estate is the national political scene and the decisions coming out of Washington, D.C. There is too much uncertainty currently for small business owners to make real estate decisions.”

For more information about NAIOP-AZ and Todd Holzer, visit naiop-az.org.

AZRE Magazine September/October 2010