Tag Archives: W.P. Carey School of Business

WPCarey-School-Sign

W. P. Carey School Ranks Top 30 Again

U.S. News & World Report announces its prestigious annual list of the “Best Graduate Schools” in the country today. For the seventh year in a row, the W. P. Carey School of Business at Arizona State University ranks Top 30 nationwide among full-time MBA programs. The school’s evening MBA program also ranks Top 20 among part-time MBA programs.

“We’re happy the new rankings confirm we’re achieving consistent excellence here at the W. P. Carey School of Business,” says the school’s dean, Amy Hillman. “We have a phenomenal group of faculty, staff and students who repeatedly boost us to the top, year after year.”

On the new rankings list, the W. P. Carey School’s full-time MBA program comes in at No. 27, the best ranking for any Arizona school. The numbers are largely based on the positive reputation of schools among corporate recruiters — who offer students jobs — and among top administrators from peer business schools in the know.

“We are proud to offer one of the three least expensive programs in the Top 30,” explains Stacey Whitecotton, the W. P. Carey School’s senior associate dean of graduate programs. “We also have one of the two smallest programs in the Top 30, allowing us to keep the class sizes small and personal.”

The W. P. Carey School’s evening MBA program ranks No. 18 for part-time MBA programs nationwide. The evening program is offered in both Tempe and north Scottsdale, and it’s the highest ranked part-time MBA program in Arizona. The school also offers other part-time programs not eligible for inclusion in this particular set of new rankings: an acclaimed online MBA program that U.S. News & World Report ranked No. 2 nationwide earlier this year and a weekend MBA program that mixes online learning and campus classes every other Friday and Saturday.

The new U.S. News & World Report rankings also include other graduate-level “specialties” lists. The W. P. Carey School’s renowned supply chain management program ranks No. 3 for supply chain/logistics. The information systems program ranks No. 12 in its category. In addition, ASU’s Ph.D. program in economics ranks No. 36.

Other recent high rankings for the W. P. Carey School of Business:

> U.S. News & World Report ranks the school’s undergraduate business program No. 27 in the nation.
> Britain’s Financial Times ranks the school’s online MBA program Top 10 worldwide.
The Financial Times ranks the school’s China-based executive MBA program No. 28 worldwide.
> The University of Texas at Dallas ranks the W. P. Carey School Top 25 in the United States and Top 30 worldwide for business-school research productivity.
The Center for World-Class Universities at Shanghai Jiao Tong University ranks the W. P. Carey School No. 21 in the world for economics/business.

housing.prices

Phoenix Home-Price Rebound May Be Over

The big home-price rebound in the Phoenix area may officially be over. For the first time since last summer, the market experienced a month-to-month decrease in the median single-family-home sales price. A new report from the W. P. Carey School of Business at Arizona State University reveals that and other details about Maricopa and Pinal counties, as of January:

> The median single-family-home sales price was $196,900.
> Demand is very low, from both investors and normal homeowner-occupiers.
> Phoenix-area home prices are finally back in line with the Consumer Price Index, as if the recession and recovery had never happened.

Valley home prices started quickly rising after hitting a low point in September 2011, but they began slowing down this past July. Finally, this January, the median single-family-home sales price hit $196,900 — down 4 percent from December. It was the first month-to-month drop since the normal summer seasonal blips, and it’s largely due to a big drop in demand/sales activity.

“January is usually the quietest month of the year for sales, but this January was far weaker than January 2012 and 2013,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Despite the huge price increases between January 2013 and 2014, the total dollars spent on homes here this January actually dropped by 7 percent. This is the second lowest level of demand we’ve seen in 14 years, behind only 2008.”

Still, the median single-family-home sales price remained up 21 percent from last January, when it was at $163,000. Realtors will note the average price per square foot was up 19 percent. The median townhouse/condo price was up about 17 percent.

“The price gains now are weak, but it’s not clear that they’ll get much weaker or stronger,” explains Orr. “We’ve already seen a significant change in the market, which has completed its rebound from the artificially low prices between 2009 and 2011. Pricing is back to the level it would have attained if it had increased from 2000 in line with the Consumer Price Index.”

Demand from both investors and ordinary owner-occupiers is way down. Even though the available supply of homes for sale was up 47 percent from Feb. 1 of last year to Feb. 1 of this year, sales activity plummeted. Sales of single-family homes were down 23 percent from last January to this January. Sales of townhomes and condos were down 18 percent.

Luxury homes are one of the only bright spots in the market, with homes above a half-million dollars representing 14 percent more of the sales transactions this January than last January. However, even the supply of luxury homes is quickly rising, so sellers in that space will face tougher competition in 2014.

Investors continue looking to other parts of the country for bigger bargains, since Phoenix prices have risen. In January, the percentage of residential properties bought by investors was down to 21.1 percent from the peak of 39.7 in July 2012.

New home sales were also down 21 percent from last January to this January, representing the steepest fall in new-home closings in several years. Millennials and those who lost their homes to foreclosure or short sale in the recession appear more interested in renting than buying. That’s led to an upward trend in multi-family construction permits. It could also lead to higher rental rates in the next two years, during which time, home sales may continue to be relatively slow.

“The market conditions suggest prices will struggle to make any further upward progress in 2014,” Orr adds. “With February through June the strongest part of the year, we may yet see a little forward movement, but it’s likely to be tentative at best. The real test will come in the second half of the year, which is likely to see lower prices unless demand takes a distinct turn for the better.”

Foreclosure levels remain below the normal, historic trends for Maricopa and Pinal counties. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – were down 55 percent from January 2013 to this January. Completed foreclosures were down 54 percent.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

McCordHall, WEB

REIAC Forms Alliance with MRED Program at W. P. Carey School of Business

The Southwest Chapter of REIAC, an organization of real estate executives involved in developing, acquiring and/or financing real estate, has formed a partnership with Arizona State University’s Masters of Real Estate Development (MRED) program at the W. P. Carey School of Business.

REIAC has provided $5,000 in scholarships for the 2013-14 academic year and recently awarded two MRED students with $2,500 awards. Requirements of the scholarship program include being a full-time student, an Arizona resident and preferably, having the desire to work locally upon graduation.

“Aligning with the MRED program is a way to bridge the gap between academic knowledge and professional standards, strengthen the investment management arena and ultimately better the commercial real estate community as a whole,” said Todd Jarman, board president of REIAC Southwest and senior vice president, BBVA Compass.

In addition to the scholarship program, REIAC is hosting the REIAC/Rockefeller Group Challenge in the spring, a MRED student case study competition sponsored by The Rockefeller Group. The competition will be judged by REIAC members and MRED faculty, for a cash prize of up to $6,000 to the winning student team.

REIAC is looking for MRED teams to demonstrate their strategy for a local development project that includes acquisition, financing, entitlements and design.

“Our students will be demonstrating their ability to apply mastery of a real estate investment and development opportunity and determining the feasibility of development, from analyzing existing buildings to working with local agencies, dealing with market realities, design, construction, finance and legal issues,” said Mark Stapp, executive director of MRED.

“The REIAC/Rockefeller Group Challenge provides students an experience that teaches them how to apply the theory of real estate in a practical way only available because of local industry support that comes from this Challenge,” Stapp said.

“Many of Phoenix’s real estate executives have ties to ASU and a significant number are also members of REIAC. The alliance allows for the students to have access to local real estate leaders and we’re looking forward to seeing the teams showcase their talents in the annual REIAC/Rockefeller Group Challenge,” said Mark Singerman, REIAC board member and regional director-Arizona for The Rockefeller Group.

The Rockefeller Group has a longstanding history of supporting education. The W.P. Carey Evening MBA program will be located at The Rockefeller Group’s Chandler 101, an 844,000 SF mid-rise office development in Chandler’s Price Corridor.

WPCarey-School-Sign

W. P. Carey School Ranks No. 2 in the Nation

Online degree programs are skyrocketing in popularity, and if you’re looking for an online MBA or other graduate degree, then the W. P. Carey School of Business at Arizona State University is an excellent choice. For the second year in a row, U.S. News & World Report ranks the school No. 2 nationwide on its list of “Best Online Graduate Business Programs.”

“Increasingly, people want the convenience of an online degree, but they don’t want to sacrifice the high quality of a recognized, top university,” explains Amy Hillman, dean of the W. P. Carey School of Business. “With the W. P. Carey School, you get the best of both worlds: the flexibility of an online format and the same stellar faculty members who teach in our other highly ranked graduate programs. The W. P. Carey School was one of the first highly respected business schools to launch online degrees more than a decade ago, and we use in-house course designers specializing solely in business classes.”

U.S. News & World Report already ranks the W. P. Carey School’s undergraduate business, full-time MBA and evening MBA programs among the Top 30 in the nation in their categories. This new ranking covers both the W. P. Carey School’s popular online MBA program and its online Master of Science in Information Management (MSIM) program. The list is based on student engagement, admissions selectivity, peer reputation, faculty credentials and training, and student services and technology.

“Students serving in the military, starting their own businesses, and traveling extensively for their jobs are among those who have chosen our online graduate business programs,” says Stacey Whitecotton, senior associate dean for W. P. Carey School graduate programs. “Participants have a dedicated financial aid specialist and a career center for those who want help with job searches.”

Again, the W. P. Carey School’s online MBA program garnered a No. 2 ranking last year, too. Among those who have completed the program: NFL Pro Bowl kicker Billy Cundiff and Lt. Col. Scott Coulson — a recipient of the Bronze Star, a Purple Heart and a Combat Action Badge for his service in Iraq — who completed his degree while serving in the U.S. Army in Afghanistan.

The 21-month MBA program allows students to meet at a face-to-face orientation just once at the ASU campus, then complete the rest of the courses online. Students work in small, personalized teams with peers from other industries, focusing on one course at a time. This is also one of the few online MBA programs in which students can earn their degrees with an area of emphasis, such as finance, international business, marketing or supply chain management.

The 16-month online MSIM program just launched in 2012 and is already drawing praise from those in the fast-growing information technology (IT) field. The degree is designed to provide professionals in any career area with a well-rounded education in IT and explain how they can apply that knowledge to their companies overall. American Express, Intel Corporation, Mayo Clinic and US Airways are among the companies that send students to the school’s MSIM programs. The W. P. Carey School’s MSIM programs have an exceptionally high retention rate, thanks to efforts by the world-class faculty and collaborative-learning training for students during orientation.

The W. P. Carey School also offers a weekend/online hybrid MBA and will launch an online version of its master’s program in business analytics (“big data”) this fall. All of the school’s online programs include small class sizes and comprehensive online-learning technologies that are easy to use. For more information, visit wpcarey.asu.edu.

housing.prices

Phoenix Housing Market Quiets Down

The Phoenix-area housing market is quietly ending the year, with a drop in demand and activity. A new report from the W. P. Carey School of Business at Arizona State University provides the latest data for Maricopa and Pinal counties, as of October:

* The median single-family-home price was up 27 percent, to $200,000, since last October, but price increases are slowing down.
* Demand is rapidly dropping, and the supply of homes available for sale is quickly rising.
*First-time home buyers, especially those under 30, are showing little interest in getting into the market.

Phoenix-area home prices have been going up since they hit a low point in September 2011. The median single-family-home price went up an incredible 71 percent from October 2011 to October 2013. It rose 27 percent – from $157,000 to $200,000 – from just last October to this October. Realtors will note the average price per square foot went up about 24 percent year-over-year. The median townhouse/condo price rose 27 percent, to $119,900.

However, the report’s author says the market has been cooling since July and will continue to lose momentum.

“I anticipate sales will be way down in November and through the holidays, when some people even take their homes off the market until late January,” says Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “We also anticipate a much slower rate of price appreciation in 2014 than the furious pace we have witnessed over the last two years.”

Conditions are getting better for buyers and worse for sellers, as the supply of homes available for sale has been rising fast. The Phoenix area had 40 percent more active listings (those not under contract) this Nov. 1 than last Nov. 1. At the same time, demand has been plummeting. The amount of single-family-home sales activity dropped 19 percent from last October to this October.

Orr believes supply will exceed demand before the end of the year, even though supply is still 15 to 20 percent below what would be considered normal. He blames the sudden weakness partly on poor consumer sentiment, including concern over the recent government shutdown. He also notes Census numbers showing fewer households are forming, as some young adults stay with their parents and others show little interest in leaving their rentals to buy a home.

“When you ask people under 30 whether they want to buy a home, they’re not planning on it like past generations,” explains Orr. “Also, demand for starter homes is limited by the difficulty of first-time home buyers in qualifying for loans. Plus, less than 3 percent of the new homes sold in Maricopa County in October were priced below $150,000, so new entry-level homes are getting very scarce.”

Investors and out-of-state buyers are also losing interest in the Phoenix area. The percentage of residential properties purchased by investors has dropped from the peak of 39.7 percent in July 2012 down to 22.6 percent this October. The percentage of Maricopa County homes sold to out-of-state buyers was down from 20.1 last October to 16.4 this October. That’s the lowest percentage since January 2009.

The luxury home market continues to gain ground, with the stock market booming and the growing availability of jumbo loans. Sales of single-family homes priced above $500,000 grew 34 percent from last October to this October. At the same time, sales of lower-end homes priced below $150,000 fell by almost half — 49 percent.

Cheap homes are hard to find as foreclosure levels continue to drop. The number of completed foreclosures fell about 64 percent from October 2012 to this October. The number of foreclosure starts — owners receiving notice their lenders may foreclose in 90 days – dropped 50 percent at the same time.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

microchip technology

Phoenix Joins Initiative to Promote Global Trade

The Greater Phoenix Economic Council announced the region has been selected as one of eight metro areas in the country to join a new exchange network created by the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase. The Exchange is a network of metropolitan areas committed to promoting greater global trade and economic competitiveness. As part of the inaugural Exchange, Greater Phoenix will be required to design and implement a regional export plan in 2014.

In Greater Phoenix, the Global Cities Initiative will be led City of Phoenix Mayor Greg Stanton and a core leadership team including the following representatives:

> Joe Stewart, market manager – AZ & NV Middle Market, Chase
> Dennis Hoffman, professor and director, L. William Seidman Research Institute at the
W. P. Carey School of Business at Arizona State University
> Barry Broome, president and CEO Greater Phoenix Economic Council

“A strong trade and export strategy is critical to our region’s economic vitality, so I’m honored to lead this initiative for Greater Phoenix,” Mayor Stanton said. “I look forward to working with my fellow mayors and business and community leaders to build a regional export plan that capitalizes on our unique assets and advances a stronger and healthier economic platform by expanding our global trade and investment strategies.”

Other participating groups include the Arizona Export District Council, Canada-Arizona Business Council, Intel and the Arizona Commerce Authority.

Brookings selected metropolitan areas to join the network after an extensive application process that evaluated regions’ readiness and capability to pursue the Exchange’s curriculum and commitment to fulfill its goals. Greater Phoenix joins Atlanta; Greenville, S.C.; Indianapolis; Jacksonville, Fla.; Milwaukee; Phoenix; Sacramento, Calif.; and Wichita, Kan., in the Exchange’s inaugural class, which will work together over the next four years to establish new metro-to-metro relationships and to share best practices in global economic development.

“For the Exchange, we selected metro areas that are committed to expanding their global economic reach by working together to identify regional competitive strengths and increase exports,” said Brad McDearman, Brookings fellow. “The eight metro areas selected for this round represent a growing group of U.S. metro areas that understand the need to embrace the global market to remain competitive in the 21st century economy.”

Over time, the network will expand to include additional U.S. and international cities working together to strengthen their local economies through increased engagement with the rest of the world. This builds on the Global Cities Initiative’s work, which equips metropolitan leaders with the information, policy ideas, and global connections they need to bolster their regions’ positions in the global economy.

“I’m delighted Greater Phoenix will be a part of this new network – it’s exactly the kind of innovative planning that is needed to ensure our community’s long-term economic success,” said Joe Stewart, market manager – AZ & NV Middle Market, Chase. “We have a long history of helping businesses connect to global markets and now the Exchange brings additional resources to help our region’s leaders design strategies to further create jobs and grow our economy through greater global engagement.”

The Global Cities Initiative supports the region’s existing efforts to implement the Brookings Metropolitan Business Plan (MBP), where business, university, political and civic leaders have adopted several core strategies to leverage  the region’s assets in a way that secures economic strength for Greater Phoenix through the 21st century. The Global Cities Initiative will serve to fulfill the MBP’s global export and foreign direct investment strategy. Further details about the MBP will be announced in early 2014.

“It’s fantastic that Greater Phoenix is participating in this initiative – a reflection of our unified commitment to attract and retain export-based businesses that are ultimately responsible for regional economic growth and prosperity,” said Dennis Hoffman, professor and director, L. William Seidman Research Institute at the W. P. Carey School of Business at ASU. “A strong research university is an important attractor for businesses seeking talent and knowledge capital that can help them succeed in global markets, and I am pleased to represent ASU in this initiative.”

Metro area leaders play a critical role in promoting trade and developing infrastructure. Regional economic development leaders representing both the public and private sectors can help local firms access new markets and align existing export services because they know their regions best. These leaders are also best equipped to coordinate regional assets—such as skills training, innovation capacities, and freight and logistics—to better support global trade.

“In Greater Phoenix, we are already making exports and foreign direct investment a central and consistent part of our broader regional economic development strategy. Adding this partnership with the Global Cities Initiative will only strengthen our results,” said Barry Broome, president and CEO of the Greater Phoenix Economic Council. “I look forward to the collaboration involved – not only within our own regional leadership but also with the other participating metro areas – to advance and diversify our region’s economy and solidify our future prosperity.”

In December, the Greater Phoenix Exchange team will join those of the other accepted metropolitan areas at Brookings in Washington to participate in their first working group session, where they will learn how to develop an export plan as part of a global economic development strategy. Throughout the four-year Exchange, participating metros will periodically convene for in-person working groups and will continually engage in curriculum via conference calls and webinars.

Coinciding with the work of the Exchange, Greater Phoenix will host a forum in 2014, bringing together regional and national experts on trade. Greater Phoenix is the only metro participating in the Global Cities Initiative to host such a forum. Its proximity to Mexico and trade relationships position the region as the ideal host of a conversation on global trade and exports.

housing.prices

Phoenix Housing Market Affected by Government Shutdown

The government shutdown may have dampened interest in buying Phoenix-area homes this fall. A new report from the W. P. Carey School of Business at Arizona State University shows the latest data for Maricopa and Pinal counties, as of September:

* The median single-family-home price was up about 33 percent from last September, to $199,000.
* However, demand is waning, and that may be at least partly due to the recent government shutdown creating economic uncertainty.
* Meantime, housing supply continues to rise, with more people willing to put their homes on the market as prices go up.

Phoenix-area home prices have been rising since hitting a low point in September 2011. The median single-family-home price rose 32.7 percent — from $150,000 to $199,000 –from last September to this September. Realtors will note the average price per square foot went up 22 percent. The median townhouse/condo price went up 30 percent, to $117,000. However, the price gains are expected to slow down.

“Since the beginning of July, the Phoenix-area housing market has cooled dramatically,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “The main change is a steep fall in demand, which we can see in the 12-percent drop in single-family-home sales activity just between August and September alone. Going forward, we anticipate a much slower rate of price appreciation than the furious pace we have witnessed over the last two years.”

Orr says the recent government shutdown may be at least partly to blame for the hard brakes on the housing market.

“The sudden weakness in owner-occupier demand since July is unusual and unexpected,” says Orr. “Poor consumer sentiment and concern over the government shutdown seem to have accelerated the decline. We also have no government information available yet on new-construction permits because of the shutdown.”

On the positive side, the number of available homes for sale continues to rise, after the area experienced a very tight supply for months. Active listings, not including those already under contract, went up 32 percent from Oct. 1 of last year to Oct. 1 of this year. More people appear willing to put their homes up for sale as prices rise.

“If the current trend continues, supply will exceed demand by the end of the year,” says Orr. “We now expect a balanced market to prevail during November. This is great news for buyers since they will experience less competition and be in a strong position to negotiate.”

The luxury market continues to perform well, thanks to the rising stock market and a big increase in the availability of jumbo loans. Sales of $500,000-plus, single-family homes grew an incredible 51 percent from September 2012 to September 2013.

However, cheap homes are tough to find, with fewer foreclosures coming onto the market. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – dropped 61 percent from last September to this September. Completed foreclosures declined 63 percent. Orr expects foreclosures to keep falling over the next several years, thanks to tight underwriting standards.

Institutional investors and out-of-state buyers continue to lose interest in the Phoenix area, since better bargains can now be found elsewhere. The percentage of homes and condos bought by investors in September was down to 22.7 percent, from the peak of 39.7 percent in July 2012. Also, the percentage of Maricopa County residences sold to owners from outside Arizona was only 16.4 percent, the lowest percentage since January 2009.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

customer.service

Getting Better Customer Service

How can your favorite businesses improve your customer experience and offer better types of service? Business leaders from around the world will gather in Phoenix next week to learn how to gain an advantage and win your loyalty. The 24th annual Compete through Service Symposium will feature speakers from Cisco, Disney Institute, FedEx Services, HP, IBM, Vanguard and other household names.

Some of the topics being covered this year: How services can help differentiate your business, lessons in innovation, how to use smart analytics, and how to create “wow” through the smallest things to make a difference for your customers.

This event is hosted by the prestigious Center for Services Leadership at the W. P. Carey School of Business at Arizona State University. The center was created in response to the unique challenges faced by companies as services have become a driving force in economies around the world, with less growth happening in products and manufacturing. The center’s member firms include Boeing, FedEx, GE, IBM, Mayo Clinic, Michelin, PetSmart, State Farm Insurance Company and other household names. The center also offers online courses, a list of which can be found at http://wpcarey.asu.edu/research/services-leadership/online-courses.

WHEN: Wednesday to Friday, Nov. 6-8, Full schedule available at http://wpcarey.asu.edu/symposium

WHERE: Marriott Renaissance Phoenix Downtown Hotel, 50 E. Adams St., Phoenix, AZ 85004

WPCarey-School-Sign

W. P. Carey School Dedicates New McCord Hall

One of the nation’s largest and highest-ranked business schools dedicated a brand new, state-of-the-art facility today. The W. P. Carey School of Business at Arizona State University held a ceremony to mark the official opening of its 129,000-square-foot McCord Hall.

“We believe we’ve built the most advanced learning environment available for graduate business students,” says W. P. Carey School of Business Dean Amy Hillman. “Every detail was designed to teach students in a way that makes them better contributors to today’s work environment. The building has an emphasis on collaboration, discussion-based learning and flexibility.”

The new building is being added to the school’s two existing structures, which were renovated during this project. Together, they will ease overcrowding for the 10,000-plus students who attend the W. P. Carey School. McCord Hall will be home to the school’s graduate and executive-education programs, including the Top 30 nationally ranked MBA programs.

The impressive facility features modern architecture, technologically advanced tiered and flat classrooms, a multipurpose event space, a new graduate-level career center, team rooms, study areas, outdoor assembly areas, a lounge for honors undergrads, and a health-conscious café. McCord Hall is also environmentally friendly, with less water and energy use than similar buildings and a solar array that returns power to the campus grid. The project totaled $57 million, and the return on investment is expected to be great.

“We estimate the project has already had an economic impact on the gross state product of $64 million and the creation of 880 jobs,” says Professor Dennis Hoffman, director of the L. William Seidman Research Institute at the W. P. Carey School of Business. “Of course, the value of the construction does not include the added value that will accrue from the human capital produced in McCord Hall’s learning environment, allowing students to acquire knowledge and skills to compete in today’s economy.”

ASU President Michael Crow and Hillman presided over the dedication ceremony at the university’s Tempe campus. Philanthropist Sharon Dupont McCord and other building donors also took part. McCord and her late husband, Bob, are the major donors behind the facility’s name. More than $17 million in gifts and pledges from area companies and families, as well as other various sources, are helping to fund the building. Student support has been robust.

To learn more about the W. P. Carey School of Business, visit wpcarey.asu.edu. For more information about McCord Hall, go to http://building.wpcarey.asu.edu/. Donations to the building campaign can still be made at asufoundation.org/wpcbuilding. The W. P. Carey School’s full-time MBA, evening MBA, online MBA and undergraduate business programs are all currently ranked Top 30 in the nation by U.S. News & World Report.

Amy-Hillman

W.P. Carey dean wants the world to know about school

Amy Hillman, a renowned management professor and noted researcher, replaced Robert Mittelstaedt as dean of Arizona State University’s W.P. Carey School of Business in March and became the school’s first female dean.

Az Business sat down with the leader of the W. P. Carey School, ranked in the top 30 among the best graduate business schools in the nation by U.S. News & World Report, to talk about her goals as dean and how her background as a researcher impacts her leadership.

Az Business: What is your biggest challenge as dean of the W. P. Carey School of Business?
Amy Hillman: Keeping the school nimble as an organization. Technology is playing a transformative role in higher education. The skills and expertise needed to succeed in an organization change as a result. We have to stay close to our corporate partners to make sure we stay on the leading edge of business education.

AB: How has the transition from second in command to dean been so far?
AH: Great. In the second-in-command position, I focused internally. We have amazing students, faculty and staff, and we work with some great partners within ASU, outside of the business school. Now, I also get to spend time with alumni, corporate partners and donors. In addition, I interact a lot more with other business-school deans. It’s a full circle.

AB: What are the W. P. Carey School’s strengths?
AH: We have hard-working students, dedicated staff, a supportive community, and a really desirable and unusual faculty combination. It’s not that hard to find good teachers or good researchers, but our faculty members are both, and that’s much more difficult to achieve. They are world-class researchers on the cutting edge of new knowledge in their fields, as well as excellent teachers. Therefore, what they discover one day, they teach in class the next. Add to this, they care about the students’ success in school and future careers. We have a dynamite combination. That’s why we’re currently ranked Top 30 in the nation by U.S. News & World Report for all of our marquee programs — undergraduate business, full-time MBA, part-time MBA and online MBA.

AB: What makes you an effective dean for the W. P. Carey School?
AH: I love my work. I value relationships, but also performance. It also doesn’t hurt to be a management professor with real-world managerial experience. We have a lot of stakeholders to manage.

AB: How has your background prepared you to educate the entrepreneurs and business leaders of the future?
AH: In addition to my decades of work as a management professor and then executive dean, I also originally got my MBA because I needed skills to be a better manager in retail, before I ever went into academia. What I learned one night in my classes, I would apply the next day on the job. I also come from a family of entrepreneurs, so innovation and practicality loom large. I think this helps me stay focused on what we need to do to advance the practice of business.

AB: What are your goals as dean of the W. P. Carey School of Business?
AH: I’d like to build stronger — deeper and broader — corporate relations, increase lifelong value to our alumni, make our student experience a personal one, and make working at the W. P. Carey School of Business rewarding and fun. I’d also like to make sure the W. P. Carey School is no longer a “best-kept secret.” More people need to know all we do and how well we do it.

AB: What’s been the biggest change in education since you entered academia?
AH: I’d say one of the biggest changes to education as a whole — not specifically to business education — is the questioning of the value of education. This is unimaginable in developing nations like China. I was recently there with our executive MBA students in Shanghai. One of our speakers at an event was Nobel Laureate Ed Prescott, a W. P. Carey School of Business faculty member. Young kids wanted to have their pictures taken with him for his intellectual achievement. Sadly, I see too many people here in the United States who believe education isn’t the main driver of economic achievement.

AB: How has your background as a researcher impacted the way you educate the business leaders of the future?
AH: As a researcher, I’m strongly influenced by data, not anecdotes. So let’s analyze what’s happening before we jump to conclusions based on our personal observations. That said, most business research questions are big, complex ones without “one right answer,” so we need to train our students to look for patterns among data, but at the same time to embrace uncertainty. Make the best decisions with incomplete information. That’s the real world.

education.business

Educators say executives can increase workplace value

Despite signs of what most people view as a recovering economy, more than half of Arizona’s workforce stresses over job security.

A recent University of Phoenix survey revealed that 61 percent of working adults worry about losing their jobs in the current economic climate and 20 percent anguish over it at least once a week.

“In a challenging economic environment, workers should be doing more to position themselves as leaders in their organizations, but the survey finds that many are holding back at work, and this can have a negative effect on performance and productivity,” said Dr. Sam Sanders, college chair for University of Phoenix School of Business and a former human resources executive with more than 20 years of hiring and employee relations experience. “Those who understand the big picture and how their own skill sets help their companies achieve goals should have more confidence and can have an advantage in the workplace.”

To separate themselves from others and to create more job security, many executives are strengthening their skill sets through education.

“The trends in executive education is for shorter duration programs than those that preceded the recession, with emphases on acquiring skills that lead to promotions or career advancement and new market opportunities,” said Dr. Kevin McClean, interim dean, Ken Blanchard College of Business at Grand Canyon University. “Another key ingredient is the opportunity to network. These objectives are not really different from those that motivated people to pursue executive education in the past.”

Executive trends

Some of the shifts that educators are incorporating into graduate business programs include more emphasis on leading in turbulent times, developing organizational talent, innovation and creativity, and flexible, participative strategic planning.

“Executives are being asked to take on more responsibility and act more holistic in understanding the interdependencies of people and functions in organizations,” said Dr. Kirk Wessel, dean of Angell Snyder School of Business at Ottawa University. “This is being reflected in curricula.”

Educators are also being asked to help prepare executives and business students to deal with increasingly more complex business issues.

“For example, rather than teaching executives innovation or risk, we are talking about ‘risk-bound innovation,’” said Dennis Baltzley, Ph.D., senior vice president of executive education at Thunderbird School of Global Management. “Leaders want to know how to create an environment of innovation, while creating a ‘boundary’ of risk management. We must innovate, but more than ever, a bad decision can be fatal.”

Baltzley said Thunderbird is also seeing a dramatic interest in global global leadership.
Our customers want to know how to lead effectively across borders, cultures, different business models and philosophies,” Baltzley said. “Since 2008, growth has been slow in the U.S. and other mature markets. This led many businesses to leap into emerging markets with the promise of double digit growth whether they were ready or not, and most were not as ready as they would have liked.”

Paul Melendez, assistant dean of executive education at the Eller College of Management at the University of Arizona, said he is seeing four specific trends:
* Customization: Executive education is becoming much more tailored to specific organizations, with programs, content, and learning customized to the unique needs of the organization. While many business schools still offer one- or two-week open-enrollment programs, organizations are finding it more beneficial to develop a program that is tailored to their executives.
* Consulting: The natural extension of customized programs is a consulting model where education and problem-solving are combined into a program. “We have helped organizations develop their culture, strategically plan, and develop a wide variety of business improvement plans through programs that also provide education for leaders,” Melendez said.
* Strategic partnerships: Eller Executive Education has developed strategic partnerships with Miraval and Canyon Ranch to offer programs that join cutting-edge leadership and management principles and with world-class health and wellness programs which they have dubbed “integrative leadership.”
* Privatization: A year ago the university spun Eller Executive Education out of the UA to allow greater operating flexibility. “As a result, we are now providing many more custom program for private, governmental, and non-profit organizations,” Melendez  said. “We have seen a number of other state business schools also privatizing their executive education organizations.”

Increasing your stock

Michael Bevis, director of academic affairs at University of Phoenix, said more executives have started to approach their careers in the same way they approach business management by focusing on building their personal brands.

“When you think about a company brand, it isn’t just about what you are communicating, but how that brand addresses the needs of the intended audience,” Bevis said. “One of the things I work on with executives and other business students at University of Phoenix, is developing a personal business plan that starts with the personal mission statement. You wouldn’t run a business without a plan and the same should be true about your career. If you are not setting goals, measuring progress and making sure your knowledge stays current and relevant, your personal brand — like that of a company’s — can become stagnant.”

So what programs are out there for executives to utilize to strengthen their brand?

* University of Phoenix: Within the MBA programs, concentrations allow executives to grow specific skills. It is common for executives or business owners to have specific knowledge about an industry or certain aspects of business management, but skills or knowledge gaps in other areas. Concentrations can help professionals hone certain skills, such as people management, finance or marketing.

* Thunderbird School of Global Management: Thunderbird offers a range of options from its short programs — less than a week — to its more in-depth MBA offerings. “We have a Global MBA Online that allows you to learn global business from anywhere in the world and an Executive MBA that’s on-campus, but provides a schedule suited to the working professional. “ Baltzley  said. “We also offer online certificate programs which are designed specifically for working professionals looking to improve their marketability and gain a leading edge over their competition.

* W. P. Carey School of Business at Arizona State University: “Our executive-education programs, such as our leadership development workshops and our certificate programs in real estate, supply chain management, and service excellence, can give executives deeper skills and expose them to new ideas,” said Amy Hillman, dean of the W. P. Carey School of Business. “However, if they want to move into leadership roles beyond their current functional areas, then the MBA is the best option, though short non-degree courses that develop leadership skills are also helpful.”

* Eller College of Management: Eller Executive Education offers a variety of week-long programs and year-long programs for leaders of different types of organizations. “We are also launching a program in early 2014 that is specifically oriented toward CEOs of mid-sized to large companies,” Melendez said.

* DeVry University: Keller Graduate School of Management offers seven specialized master’s degree programs and 13 graduate certificate programs.

* Ken Blanchard College of Business: GCU offers very practical programs that include a master’s in leadership, a masters in accounting, and a masters in public administration.

* Angell Snyder School of Business: Case teaching methodologies teach executives to think critically about all internal and external factors that come into play in developing effective organizational strategies, irrespective of the industry.

Moving forward

The most important message that educators have for executives who may be worried about maintaining their position in the current economic climate is to stay current on trends in your industry, keep your brand current by understanding how your skills and experience fit into the big picture of an organization.

“This past year, we were asked repeatedly how to be effective in managing a diverse, multicultural, and geographically dispersed workforce, and how to stay relevant in a Volatile, Uncertain, Complex and Ambiguous (VUCA) world,” Baltzley said. “Without question the term ‘VUCA’ has come of age and has several implications for executives who want to remain relevant today.”

To stay in the game, Baltzley has three pieces of advice for executives:
1. Get your head into what it means to think globally. If you think your company is domestic and American, and it will never go global, you are wrong, global is coming to you. In fact, global is probably already there, in the form of complex supply chain issues or direct competitors, so you better get prepared.
2. A term coined in the late 1970’s is important here – “Permanent Whitewater” – That is, if you think the whitewater is going to slow down, or that a calm patch is just around the corner, you are mistaken. You have to prepare yourself for leading in constant change in scale and speed.
3. Check your personal leadership style. Are you able to influence people very different than yourself? Do you enjoy variety, the unknown, surprises? Is your self-confidence and personal energy level pretty high? Do you like to test yourself, take some risks? If you can’t answer “yes” to most of these, you have some work to do to become a more adaptive leader.

credit

Study: Young Credit Card Users Are MORE Responsible

If you think young people don’t know how to manage money and pay down their credit cards, then you should think again. A new study from the W. P. Carey School of Business at Arizona State University and the Federal Reserve Bank of Richmond shows young borrowers – 18 to 25 years old — are among the least likely credit card users to have a serious default on their cards. Not only that, they’re also more likely to be good credit risks later in life.

“Young credit card users actually default less than middle-age borrowers,” says Assistant Professor Andra Ghent of the W. P. Carey School of Business. “Also, those who choose to get credit cards early in life are more likely to learn from any minor defaults and move on, avoiding major credit card problems in the future. Plus, they’re more likely to be able to get a mortgage and become a homeowner at a young age.”

The new research by Ghent, as well as Peter Debbaut and Marianna Kudlyak of the Federal Reserve Bank of Richmond, is now a Federal Reserve working paper. In it, the researchers analyzed consumer data from the New York Federal Reserve Bank Consumer Credit Panel/Equifax to determine whether young borrowers are worse credit risks than others and to estimate the effect of individuals choosing to get a credit card at a young age.

The results demonstrate that part of the Credit Card Act of 2009 may not have been necessary. The act made it illegal to issue a credit card to individuals under 21 unless the person has a cosigner or submits financial information indicating an independent means of repaying the debt. It also includes a provision banning companies from recruiting credit card users within 1,000 feet of any college campus or at college events.

“Letting students apply for credit cards may actually make sense,” says Ghent. “These students are the people who want credit, need to build up a good credit history, and have a steeply sloped income profile. If they don’t have a student loan, then a credit card may be the only way they can establish a decent credit history.”

The researchers found that while people in their early 20s are more likely to experience minor delinquencies (30 or 60 days past due), they are much less likely to experience serious delinquency (90 days or more past due). In fact, someone age 40 to 44 is 12 percentage points more likely to have a serious delinquency than a 19 year old.

However, the Credit Card Act of 2009 has clearly had an impact on how many young people are getting credit cards. Individuals under 21 are 18-percent less likely to get a credit card following passage of the act, and that’s not necessarily a good thing.

“You can’t learn by just watching credit card use,” adds Ghent. “You have to get a card, pay it down every 30 days, and experience, in order to learn. It’s also hard to get a mortgage if you can’t get a credit card to build up your credit history.”

The full study is available at http://www.public.asu.edu/~aghent/research/DebbautGhentKudlyak_July2013.pdf.

Phoenix-Area Housing Market

Phoenix-area Housing Supply Increasing

Over the past two years, the tight supply of homes for sale in the Phoenix area has helped to dramatically drive up prices. However, a new report from the W. P. Carey School of Business at Arizona State University shows change on the horizon. The data for Maricopa and Pinal counties, as of August, reveals:

* The median single-family-home price is up 28 percent from last August, to $192,000.
* However, supply is finally starting to increase to help meet demand, and may be in balance by the end of the year.
* The luxury market is powering back, but might be derailed if the economy is pounded by the government shutdown and other events in Washington, D.C.

Phoenix-area home prices have shot up since hitting a low point in September 2011. From last August to this August, the median single-family-home price rose 28 percent – from $150,000 to $192,000. Realtors will note the average price per square foot went up 22 percent. The median townhouse/condo price rose 31 percent.

“We predicted the price-increase slowdown that happened over the summer months,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Now that temperatures are cooling, prices will start rising again, at least for the near term. However, they’re likely to go up at a less furious pace than the last two years.”

Orr says increases in the amount of homes for sale are helping to stop the price boom. As of Sept. 1 this year, the area had 29 percent more active listings (not under contract) than at the same time last year. As supply has been going up, demand has gone down, with sales of single-family homes 12 percent lower this August than last August.

“Although demand still exceeds supply, they are fast moving toward each other,” says Orr. “If the current pace of change continues, they are likely to be in balance before the end of the year. The seller is no longer holding all the cards in the Greater Phoenix housing market, and if their offers are countered aggressively, some potential buyers may walk away because they now have more alternatives.”

The types of transactions happening in the market are also noticeably shifting. Luxury homes over $500,000 grew their market share from 15 to 21 percent of the money being spent over the past year, while the lowest-priced homes (below $150,000) fell from 25 to 14 percent of the market.

“Access to finance at the high end of the market is very good, and we are seeing interest rates for jumbo loans even lower than the rates for conventional loans,” Orr explains. “However, if the stock market is negatively affected by events in Washington, then this will have an impact on the luxury housing market in Arizona.”

Investors continue to lose interest in the Phoenix market, with better bargains available in other parts of the country. The percentage of residential properties purchased by investors fell from the peak activity of 39.7 percent in July 2012 down to just 23.7 percent this August. The rates of all-cash buyers and out-of-state buyers are also dropping. In fact, the percentage of Maricopa County residences sold to non-Arizona owners in August was only 17 percent, the lowest percentage since January 2009.

Prices in all areas of Maricopa County are up over last year, and cheap foreclosures are tough to find. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – declined 61 percent from last August to this August. Completed foreclosures went down an incredible 73 percent.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

WPCarey-School-Sign

W. P. Carey School Honors Top Business Leaders

Three top business leaders will be honored for their innovation and achievements, when they are inducted into the W. P. Carey School of Business Homecoming Hall of Fame this month. They include the head of a famed jewelry company, a high-profile business founder from China, and a corporate leader at one of Arizona’s biggest companies.

On Oct. 17, they will join previous Arizona State University alumni inductees from such diverse organizations as the American Red Cross, Motorola, the U.S. Air Force, Wells Fargo Bank, XM Satellite Radio and the Arizona Diamondbacks.

“These stellar inductees represent strength, leadership and accomplishment in the business world,” says W. P. Carey School of Business Dean Amy Hillman. “They demonstrate how far our students can go and have gone in making their mark on the global economy.”

The 36th annual W. P. Carey School honorees are:

> Eddie LeVian, chief executive officer of the Le Vian Corporation, who has made Chocolate Diamonds® a red-carpet staple in Hollywood. LeVian earned a business degree from the W. P. Carey School in 1979 and took his innovative marketing ideas back to his family’s fine jewelry business in New York. The company’s sales have more than quadrupled over the past decade, and the LeVian family is active with many charities, raising $75 million in the past decade alone.

> Canglong Liu, a high-profile business leader in China, who founded one fertilizer factory in 1979, which grew into a conglomerate of major companies, including the Sichuan Hongda Group, now with 30,000 employees and 60 subsidiaries around the world. Liu is chairman of businesses that focus on finance, minerals and real estate. He is also a member of the national committee of the Chinese People’s Political Consultative Conference and the standing committee of the All-China Federation of Industry and Commerce. The Hongda Group has given $8 million to AIDS prevention and research in China. Liu received his MBA from the W. P. Carey School’s prestigious executive MBA program in Shanghai in 2007.

> MaryAnn Miller, chief human resources officer and executive leader of corporate communications for Avnet, a Phoenix-based Fortune 500 company with more than 18,000 employees and customers in 80 countries. Avnet is one of the largest distributors of electronic components, computer products and embedded technology in the world. Miller has more than 30 years of experience in human resources and operations management, and is responsible for leading the company’s human resources, organizational development and corporate communications worldwide. She is also a member of the Avnet Executive Board. She received her MBA from the W. P. Carey School’s executive MBA program in 2001.

About 200 alumni, business leaders and students are expected to attend the Homecoming Hall of Fame event on Thursday, Oct. 17 at the JW Marriott Desert Ridge Resort & Spa in Phoenix. A reception starts at 5:30 p.m., followed by the awards ceremony.

Space is limited. For more information on tickets or sponsorship, go to www.wpcarey.asu.edu/homecoming or call (480) 965-2597.

home.prices

Rising Interest Rates Can’t Stop Phoenix Housing Recovery

Rising interest rates don’t appear to be stopping the big comeback in the Phoenix-area housing market. A new report from the W. P. Carey School of Business at Arizona State University reveals highlights for Maricopa and Pinal counties, as of June:

* The median single-family-home price rose again to $190,000, up about 27 percent from June of last year.
* The luxury market is finally booming back, now that more banks are willing to finance jumbo loans.
* Rising interest rates have caused some people to accelerate their housing purchases, not significantly slowed things down.

Phoenix-area home prices have risen dramatically since they hit a low point in September 2011. The median price for a single-family home went up 26.7 percent – from $150,000 to $190,000 – between June 2012 and this June. Realtors will note the average price per square foot jumped 21.1 percent over the same time. The median price for condominiums/townhomes went up 38.9 percent to $125,000.

The tight supply of homes available for sale continues to drive the upward price movement in the market, with multiple bids being offered for most resale homes in the lower price ranges. However, the luxury market is also roaring back, with sales higher this summer than for any of the last six years.

“Access to finance at the high end of the market has improved recently with more lenders offering jumbo loans,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Along with good returns from the stock market, this has strengthened a recovery in the luxury market, where sales volumes were back to 2007 levels in June.”

Overall, the Phoenix-area market had 11,178 active single-family-home listings available without an existing contract as of July 1. However, about 84 percent of those were priced above $150,000, leaving just 26 days worth of inventory for buyers at the lower end of the market.

New-home builders aren’t completing houses fast enough to make a big dent in the supply problem. While analysts expected 17,000 construction permits to be issued this year, the area is only on track to have about 12,500.

“Current new-home sales rates are less than a third of what would normally be needed to keep up with the current population growth in the area,” says Orr. “Census estimates show that between 2010 and 2012, the combined population of Maricopa and Pinal counties grew by 2.9 percent, while the number of dwelling units – both owned and leased – grew by just 1 percent. Tight lending standards and a shortage of construction labor are two reasons for this.”

The Phoenix area is also seeing less cheap, “distressed” supply coming onto the market. Completed foreclosures on homes and condos in June were down 61 percent from last June. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – were down 64 percent. Foreclosure starts finally just dipped back below “normal” historical levels for the area this June.

Institutional investors are showing less interest in the Valley as bargains are more readily available in other areas of the country. The percentage of Maricopa County homes and condos acquired by investors, including mostly “mom and pop” investors, was down from 34.9 percent last June to 26.7 percent this June. However, the area is still seeing a lot of all-cash home purchases. In fact, 44 percent of the Maricopa County property transactions under $150,000 were all-cash deals this June.

“For those who need mortgages, there has been much talk of rising interest rates and the effect this might have on demand,” adds Orr. “Rising rates have certainly reduced the motivation to refinance existing loans, but they have also sped up purchases by some buyers who want to lock in prices and rates. Still, other buyers will stop to reconsider their options, likely causing a pause in new contract signings in July and August, but I expect normal activity to resume in October.”

Rental activity remains strong, with relatively low vacancy rates and no surge in vacancies expected. Orr says the supply of rental homes in the Phoenix area represents just about two months of inventory, and there’s fast turnover.

“President Obama referred to his objective of making it easier for middle-class renters to qualify for home loans, when he visited Phoenix on Aug. 6,” says Orr. “The low-end market will depend to a considerable extent on whether he can make this happen through the actions of the Federal Housing Administration, Fannie Mae and Freddie Mac.”

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/Full-Report-201307.pdf. A podcast with more analysis from Orr is also available fromknowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

education.business

W. P. Carey Offers New Degrees for Evolving Business World

Thousands of students are descending on the Arizona State University campus for the new school year, with move-in starting tomorrow. Those coming to the highly ranked W. P. Carey School of Business will have several brand new degree options available to them. The three degrees are designed to address the needs of a rapidly changing business world.

“We always try to evaluate what businesses and recruiters are telling us they want in the workplace,” explains W. P. Carey School of Business Dean Amy Hillman. “They say they’re looking for talented individuals to analyze the mountains of ‘big data’ now coming in from social media and other technology. They’re also looking for great hires in HR, and we’re rounding out the new offerings with a degree in sports and media studies, which should be popular with students.”

The new graduate-level program starting this fall is the Master of Science in Business Analytics. The “big data” program is a joint effort between the school’s Information Systems and Supply Chain Management departments, both ranked Top 20 in the nation by U.S. News & World Report. The nine-month program was created largely for those who recently graduated from college, but who want to position themselves for faster advancement in the booming information field.

“The business-analytics program is an opportunity to jumpstart your career in using big data and computer models to solve complex business problems and really add value to your company,” says Professor Michael Goul, chair of the school’s Information Systems Department. “Only about a dozen master’s programs like this exist in the United States. It’s estimated 4.4 million data analysts will be needed worldwide by 2015, so it’s a big area of career growth.”

At the undergraduate level, the W. P. Carey School is introducing a Bachelor of Arts in Business with a human resources concentration and one with a sports and media studies concentration:

The HR degree focuses on learning how to help an organization of any size manage its personnel and make informed decisions about employees. This includes learning about staffing and employment law, as well as developing critical thinking and writing skills for effective corporate communication.
The sports and media studies degree covers fan loyalty, strategically leveraging communication channels, and increasing revenue. Classes include sports administration, sports relationship management, and sports media. The concentration courses for this degree are offered through ASU’s prestigious Walter Cronkite School of Journalism and Mass Communication.

Both of the new undergraduate programs are offered at ASU’s Polytechnic campus in Mesa. That’s also where the school is offering Bachelor of Arts in Business degrees with concentrations in agribusiness, business entrepreneurship, communication, food industry management, management and technology.

The W. P. Carey School of Business is currently ranked Top 30 in the nation by U.S. News & World Report for both undergraduate and graduate business programs. For more information on the school’s programs, go to www.wpcarey.asu.edu.

shopping

Are Republicans More Open to New Product Choices?

Some people may think of political conservatives as having a desire to maintain traditions, but a new study shows they also have a more adventurous side that seeks out variety in products.

The new research from the W. P. Carey School of Business at Arizona State University was recently posted online by the Journal of Consumer Psychology. It includes three experiments in which political conservatives prove they are more likely to choose a variety of consumer products than their liberal counterparts.

“Although political conservatives have been found in previous studies to have a higher desire for control, they have an even stronger motivation to follow social norms when there is no threat to the system or individual,” explains Professor Naomi Mandel of the W. P. Carey School of Business, one of the study authors. “Since we have a very individualistic culture in the United States and Europe, people tend to think of others more favorably when they include more variety in their consumption choices. Therefore, political conservatives may seek out that approval and positive evaluation.”

In a series of experiments, Mandel and her co-author – Assistant Professor Daniel Fernandes of the Catholic University of Portugal – found political conservatives wanted more variety in their products than liberals.

For example, the researchers first used several established scales to question and determine the political leanings of 192 college undergraduates. Then, they told the students to imagine four consecutive weekly grocery shopping trips during which they could select from four brands of snack chips. Overwhelmingly, the politically conservative students chose more variety in their chips for the month than the more liberal students did.

In another experiment, 111 undergrads were polled for their political leanings. Then, they completed other tasks before ultimately being asked to select three candy bars from five options as a reward for participating. Again, the political conservatives exhibited much more variety in the candy bars chosen.

“Differences between liberals and conservatives are rooted in basic personality dispositions that reflect and reinforce differences in fundamental psychological needs and motives,” says Mandel. “We wanted to understand how and why a consumer’s political ideology could affect his or her consumption choices.”

Mandel explains the findings could help marketing managers with future ad placements. For example, if a company wants to introduce a new product, it might decide to target politically conservative neighborhoods and outlets like Fox News and The Wall Street Journal.

To read the full study, go to http://www.sciencedirect.com/science/article/pii/S1057740813000478.

WPCarey-School-Sign

Mayo Clinic and W. P. Carey School Team Up

Mayo Clinic is known as a nonprofit worldwide leader in medical care, research and education. Now, a select number of students from the Mayo Medical School are going through a cutting-edge program that allows them to get both their M.D. degree from Mayo Medical School and an MBA from the highly ranked W. P. Carey School of Business at Arizona State University.

“This program is helping to educate some of the brightest medical minds of our future in such a way that they will be more aware of the business side of medicine, the patient experience and the costs for us, the taxpayers,” explains W. P. Carey School of Business Dean Amy Hillman.

Dr. Michele Halyard, vice dean of the Mayo Medical School – Arizona Campus, adds, “The collaboration between Mayo Medical School and the W. P. Carey School of Business brings valuable synergies to the education of both future physicians and business leaders. The dual-degree program provides Mayo Clinic physicians in training with complementary competencies in business management, payer systems and accounting practices. This, along with a superb clinical education at Mayo Medical School, will prepare them to be leaders in the complex world of medicine in the 21st century.”

ASU began a strong collaborative relationship with Mayo Clinic in 2002. This particular joint degree program was launched in 2009 and has turned into a highly desirable choice for just a handful of select students from the Mayo Medical School.

Yingying Kumar was one of the first to graduate from the joint M.D./MBA program. She was looking for a way to supplement her strong medical education with a business background to help her stand out in the job market.

“I realized that the business and leadership skills I would learn in the MBA program could help me advance to a higher position in a clinic or even run my own practice in the future,” says Kumar. “I got a better understanding of roles and how hospitals run. I also got the perspective of non-medical students from my business classmates. I think the MBA will help me keep the patients’ voice in consideration at all times.”

Students who take the dual-degree program spend two years at the Mayo Medical School. Then they spend one or two years in the W. P. Carey School’s MBA program, currently ranked Top 30 in the nation by U.S. News & World Report. They return to medical school afterward to finish up their studies. The whole experience is facilitated by both schools to be virtually seamless for the Mayo students who qualify.

“I first began considering this program after volunteering in Honduras on a medical service trip and learning that the villagers we helped had little or no access to health care,” says Mayo M.D./W. P. Carey MBA student Jack Jeng. “We visited an empty rural medical clinic abandoned by its staff because it did not have a sustainable business model. That helped me realize that a successful health care organization needs more than a great medical facility, dedicated professionals and good intentions. Proper planning and smart business principles are also required to ensure patients continue to benefit from high-quality care, something I personally experienced at the Mayo Clinic.”

Jeng, who has already completed the MBA portion of the joint program, adds, “I was blown away by the opportunities and support at the W. P. Carey School of Business. They offered me valuable knowledge and experience I hope to use throughout my career. As a future physician with business understanding, I aspire not only to help people directly, but also to make meaningful contributions to improve the lives of countless patients who aren’t actually sitting in front of me.”

Amy Hillman - 50 Most Influential Women in AZ Business

Amy Hillman – 50 Most Influential Women in Arizona Business

Amy Hillman – Dean, W. P. Carey School of Business at Arizona State University

Hillman, a world-renowned management expert, popular teacher and noted researcher, took over as dean of the W. P. Carey School on March 1. Hillman is the first-ever female dean of the school, which has undergraduate, full-time MBA, part-time MBA and online MBA programs all ranked Top 30 in the country by U.S. News & World Report.

Surprising fact: “One of my earliest executive education experiences was helping give tools to Czech professors to train managers in their country after the Berlin Wall came down.”

Biggest challenge: “Managing dual careers, since my husband is also an academic. We commuted long distance and traded off ideal positions. We both couldn’t be happier at ASU.”

Fifty Most Influential Women in Arizona Business – Every year in its July/August issue Arizona Business Magazine features 50 women who make an impact on Arizona business. To see the full list, read the digital issue >>

98427193

Phoenix-area Foreclosure Saga Ending

The Phoenix-area housing market has finally hit “normal, historical levels” for those going into foreclosure. After years of severe foreclosure trouble, a new report from the W. P. Carey School of Business at Arizona State University reveals that good news and more for Maricopa and Pinal counties, as of May:

* The median single-family home price rose again to $185,000, up about 26 percent from May of last year.
* The final chapter of the foreclosure crisis is wrapping up in Phoenix, as foreclosure starts — homeowners receiving notice their lenders may foreclose in 90 days – finally hit normal, historical levels in May.
* On the negative side, the chronic shortage of area homes available for sale continues to be an issue and could last for years.

Phoenix-area home prices hit a low point in September 2011 and have risen dramatically since then. The median single-family-home price reached $185,000 this May, up from $147,000 last May. That’s a boost of 25.9 percent. Realtors will note the average price per square foot went up 22 percent at the same time. The median townhouse/condo price went up about 27.1 percent.

“Between this January and May alone, the average price per square foot rose about 13 percent for area single-family homes,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “However, the upward pricing pressure should disappear during the summer. I expect the prices to resume their strong upward direction in the fall, once temperatures drop below 100 degrees and snowbirds return.”

Rising prices don’t appear to be dampening the housing recovery in the Phoenix area at this point. In fact, home-and-condo sales activity went up 6.6 percent between April and May. May is the second month in a row where activity increased from the same time during the prior year, reversing a long negative trend. Even the luxury market is gaining, with more sales in May than in any other single month over the past six years.

“There has been much talk of rising interest rates and the negative effect this might have on demand,” says Orr. “The sudden and recent increase in rates has certainly reduced the motivation to refinance existing home loans. However, it is almost certainly increasing buyers’ determination to purchase homes now, rather than later, when rates may go even higher.”

Orr adds he sees early signs some lenders may react to higher interest rates by easing up their rules, allowing more people to buy homes. He also believes prospective buyers may simply settle for purchasing smaller, more affordable houses than they originally wanted, in order to manage the higher interest payments.

At the same time, the wave of foreclosures triggered by the housing crisis appears to be ending in the Phoenix area. Completed foreclosures on single-family homes and townhome/condos in May were down 53 percent from last May. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – went down an incredible 67 percent in the same period. Given population growth, this means the area finally hit its normal, historical level of foreclosure starts this May.

“Foreclosure starts dropped 15 percent just between April and May alone,” says Orr. “Foreclosure levels are now far below the peak levels of March 2009, and the number of pending foreclosures is below the level from the first quarter of 2002. We expect these numbers to continue to fall over the next several years due to the very tight underwriting standards in place.”

Without cheap foreclosures coming into the market — and with ordinary homeowners reluctant to sell because they’re either locked in by negative equity or waiting for prices to keep rising — the Phoenix-area housing market continues to struggle with a chronic shortage of homes available for sale that may last for years. The number of active single-family listings without an existing contract was just over 11,000 as of June 1. That’s down 0.4 percent since May 1, and 83 percent of the available homes are priced above $150,000, creating a problem for those looking in the lower price range. At least the shortage has improved somewhat from last year, when supply was dropping at a rate of 6 percent per month.

“The chronic shortage applies to both homes for purchase and homes for lease,” Orr explains. “The average time for a leased home to be on the market is down to about one month. With this fast turnover and relatively low vacancy rates, it’s perhaps surprising that single-family and condo rents have only very modestly increased.”

New-home builders don’t appear too anxious to help meet the demand. They are trying to make sure they don’t overbuild like they did before the housing crisis, and they want to keep prices moving up. Current new-home sales rates are less than a third of what would normally be needed to keep up with local population growth. As a result, Orr says the combined population of Maricopa and Pinal counties grew 2.9 percent from 2010 to 2012, but the number of owned and leased dwelling units only grew by 1 percent.

Lastly, institutional investors continue to lose interest in the Phoenix area. Their buying spree that began in 2011 is in a downward trend. The percentage of the area’s total single-family-home and condo sales carried out by investors is down from 39.7 in July 2012 to 27.3 percent this May. Most investor transactions are actually going to so-called “mom and pop” purchasers. Orr says they own roughly 96 percent of the area’s rental-home inventory.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/Full_Report_201306.pdf. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

housing.prices

No Housing Bubble for the Phoenix Area?

Despite dramatic home-price boosts, don’t expect another housing bubble anytime soon in the Phoenix area. A new report from the W. P. Carey School of Business at Arizona State University breaks down what’s happening in the Maricopa and Pinal County housing market, as of April:

* The median single-family home price climbed again to $181,399, up almost 30 percent from April of last year.
* The report’s author sees no housing bubble on the way, with a very tight supply of available homes for sale.
* He also sees no significant negative effect yet from rising interest rates on local housing demand.

Phoenix-area home prices have been soaring since they reached a low point in September 2011. The median single-family home price rose 29.6 percent — from $140,000 to $181,399 — between April 2012 and April 2013. Realtors will note the average price per square foot went up 23.5 percent. The median townhouse/condo price went up 34.6 percent.

“In previous reports, we predicted prices would rise significantly during the strong annual buying season that lasts until June,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “From February through April, the average price per square foot did rise more than 9 percent for single-family homes, but the upward pricing pressure may finally ease somewhat this month.”

One big reason for the price gains has been the chronic shortage of available homes for sale in the Phoenix area. The number of active single-family-home listings (not including those already under contract) fell 7.3 percent just from April 1 to May 1. Only 24 days of lower-end supply (priced under $150,000) is out there. However, the frequent drops in supply have at least slowed down enough to let the market accumulate 20 percent more listings than it had at the same time last year.

Investor interest in Phoenix has also waned as prices went up and better bargains were still available in other areas of the country. Orr says the institutional-investor buying spree here began in 2011, peaked in summer 2012, and is now in a downward trend. The percentage of homes purchased by both small and institutional investors in Maricopa and Pinal counties in April was 26.8 percent, down all the way from 39.7 percent in July 2012, and most of these purchases were actually made by small-scale investors.

Many of the investor-purchased homes have already been turned into rentals for people who lost their houses during the recession. Some commentators have been saying there might be another housing bubble when investors decide to sell these homes, but Orr strongly disagrees.

“Some commentators talk ominously of a bubble bursting when these homes come back onto the market,” he says. “Such talk gets a lot of attention because we are over-sensitized to bubble talk after the disruptive events of 2004 to 2006. However, this idea falls flat when we examine the actual number of homes involved. The entire institutional inventory of 10,000 to 11,000 rental homes here represents a tiny fraction, less than 1 percent, of our housing stock. If every single one were to be placed for sale next month, we would still have less supply than in a normal balanced market.”

Demand from investors is already being replaced by demand from owner-occupiers and second-home buyers. Most homes priced below $600,000 continue to attract multiple offers within a short time. The luxury market is also gaining some steam. Single-family-home sales activity overall went up 4 percent from April 2012 to this April, beginning to reverse a long downward trend in year-over-year activity.

“There has been much talk of the negative effect that rising interest rates might have on demand,” says Orr. “So far, the increases have been minor, and the main effect has been to reduce the motivation to refinance existing home loans. At the same time, higher interest rates often create a greater sense of urgency among home buyers, so if lenders simultaneously relax their underwriting rules, this could stimulate demand, rather than reduce it.”

The market also continues to recover from the foreclosure crisis. The number of completed foreclosures on homes and condos in April of this year was down 46 percent from April last year. Foreclosure starts – homeowners receiving notice their lenders may foreclose in 90 days – dropped 60 percent. Orr expects the rates to fall below long-term averages soon.

With fewer foreclosures coming on the market, some buyers have turned to new-home builders. However, Orr says the construction industry is still building far fewer homes than needed to keep up with rising population and demand in the area. This is partly because the prices of land, materials and construction labor are all rising as subcontractors struggle to attract more workers. He says the developers are also being very cautious in their expansion. They enjoy the fact that limited supply allows them to continue increasing prices faster than their costs and don’t want to disturb this trend by overbuilding.

“Given the balance between supply and population growth in Phoenix, home prices are unlikely to fall below today’s level and are more likely to continue to climb for a long time, though at a more gentle pace.”

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/Full-Report-201305.pdf. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

Arizona Is Losing Economic Grounds To Other Southwestern States, 2008

Rebound for Arizona and U.S. Slows Down

Jobs, home prices and population growth are all slowly rebounding in Arizona. However, experts from the W. P. Carey School of Business at Arizona State University say we still have a long way to go, and the automatic federal budget cuts known as the sequester aren’t helping our momentum. The experts delivered their forecasts today at the annual Economic Outlook Luncheon sponsored by the Economic Club of Phoenix.

Research Professor Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School, confirmed Arizona is once again a Top 15 growth state for both employment and population, but we’re not back to normal levels. From 1960 to 2007, we routinely ranked among the Top 5 states for both employment and population growth. In the rough years from 2008 to 2011, we dropped down to No. 48 and No. 14 in those areas.

“Last year, we finally bounced back to No. 8 for employment growth and No. 7 for population growth,” said McPheters. “However, the sequester and other factors have been clouding the economy here in recent months, and the year-over-year job-growth ranking issued this March dropped Arizona down to No. 13. The state will have to wait a couple more years for full recovery.”

Arizona added 48,900 jobs in 2012. The state is projected to add 61,000 jobs this year. The fastest-growing industries are construction, wholesale trade, information, state government and leisure/hospitality.

“Arizona has gained back 39 percent of the 314,000 jobs we lost in the recession,” explained McPheters. “However, that’s a pace well behind the nation as a whole, which has regained 67 percent of its 8.8 million lost jobs.”

In recent years, population growth in Arizona had dropped from the state’s typical 2- to 3-percent range to less than 1 percent. Finally last year we popped back up to 1.3 percent.

Personal income may also be coming back. The consensus of Arizona Blue Chip economists shows growth in this area of 3.7 percent in 2012, 5.1 percent expected in 2013, and 6 percent expected in 2014.

“The bottom line is that Arizona is doing better than most states, but this will still be the seventh year in a row of lean, subpar growth for us,” said McPheters.

Dennis Hoffman, economics professor and director of the L. William Seidman Research Institute at the W. P. Carey School of Business, reiterated that Arizona is recovering more slowly from this recession than from others in the past. However, we are coming back stronger than the nation as a whole in most areas of the economy. Hoffman expects the United States to see 2- to 3-percent gross-domestic-product (GDP) growth this year. That will likely include more moderate job growth and low inflation.

“The economy is plodding along, assisted by the real-estate and stock-market recoveries, low fuel prices and innovation in the business world,” said Hoffman. “Still, we face a lot of uncertainty from our national-debt crisis, political squabbling in Washington, economic difficulties in Europe and China, and changing demographics. One huge issue remains the problem of future funding for Social Security and Medicare.”

At the state level, Hoffman says we’re going to be strongly affected by the decisions still to be made this year on possible Medicaid expansion, the loss of the temporary sales tax, the potential taxing of online sales, and other big issues. For now, state revenue has been coming back with the rebounding economy.

When it comes to the housing market, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business, delivered good news about the recovery. Specifically, the median Phoenix-area home price was up a whopping 58 percent from a low of $111,000 in May 2011 to $175,000 this March. Foreclosures were down 60 percent just over the last year from March 2012 to March 2013, and Orr expects foreclosure rates to dip below long-term averages by the end of next year. Also, less than 5 percent of Arizona home loans (not already in foreclosure) are delinquent now.

However, we do face some problems in the housing market. For one thing, there’s a chronic shortage of homes for sale. Now that there’s no flood of cheap foreclosures and short sales coming onto the market, buyers are dependent mostly on normal resales and new-home sales.

“Higher prices would normally bring more ordinary home sellers into the market, but many are either locked into their homes because of negative equity, or they’re simply waiting for prices to go up more,” explained Orr. “As a result, some buyers are turning to new-home sales, but developers are reluctant to overbuild as much as they did at the market peak. Therefore, we may see about 50,000 to 60,000 new people being added to our local population this year, but only around 12,000 new single-family homes being built.”

Today’s Economic Outlook Luncheon was held at the JW Marriott Desert Ridge Resort & Spa in Phoenix. The Economic Club of Phoenix hosts this event every spring, as one of its opportunities for Valley business leaders and others to network and engage. The club was founded by a group of prominent business executives called the Dean’s Council of 100, in conjunction with the W. P. Carey School of Business. More information about the club can be found at www.wpcarey.asu.edu/ecp.

Today’s presentations will be posted at knowWPCarey, the business school’s online resource, at http://knowwpcarey.com.

home.prices

Phoenix-area Housing Prices Keep Soaring

Home prices continue their upward climb in the Phoenix area, with more momentum expected until at least June. A new report from the W. P. Carey School of Business at Arizona State University reveals the latest information about the Maricopa and Pinal County housing market, as of March:

The median single-family home price was all the way up to $175,000, about a 30-percent increase from March of last year.
The supply of homes for sale continued to fall, but the problem is not so much the high demand, but more the lack of sellers getting into the market.
Rebounding population growth in the Phoenix area is also blasting past the rate at which builders are constructing new homes.

Phoenix-area home prices reached a low in September 2011 and have largely shot up since then. The median single-family home price went up 29.7 percent – from $134,900 to $175,000 – in the year from March 2012 to March 2013. Realtors will note the average price per square foot went up 23.6 percent during the same time. The median townhouse/condo price increased 43.2 percent – from $81,000 to $116,000. A big reason for all this upward movement is the scarcity of affordable homes for sale.

“The number of active single-family listings has been dropping fast and went down another 4 percent from March 1 to April 1,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Fewer than 12,000 single-family homes were up for sale (without an existing contract) on April 1, and 80 percent of those were priced above $150,000, making it very tough to find properties in the lower price range.”

Orr adds it’s actually not high demand that’s the major culprit here.

“The low number of sellers is what’s unusual, not the number of buyers, which is only slightly above normal,” he says. “Higher prices would normally encourage more ordinary home sellers into the market, but many are either locked into their homes because of negative equity, or they’re simply waiting for prices to go up more.”

Orr says most homes priced below $600,000 continue to attract multiple offers, and March is the peak of the buying season that lasts from January to June. However, due to the chronic supply shortage, the amount of single-family home sales actually went down 8 percent from March 2012 to March 2013.

Investors are also starting to lose some interest in the Phoenix area, since bigger bargains can be found in other areas of the country that haven’t rebounded as fast. The percentage of residential properties bought by investors dropped from 29.2 percent in February to 27.1 percent in March, the lowest percentage in several years. The market is now seeing increased demand from owner-occupiers and second-home buyers, instead.

Completed foreclosures were down an incredible 60 percent from March 2012 to March 2013. Foreclosure starts – homeowners receiving notice their lenders may foreclose in 90 days – dropped 53 percent. Orr believes we’ll see foreclosure-notice rates “below long-term averages” by the end of next year.

Meantime, new-home sales are also going up, in tandem with resale prices. In Maricopa County alone, new-home sales increased 37 percent from March 2012 to March 2013. However, new-home construction isn’t keeping pace with the Phoenix area’s rebounding post-recession population growth. The U.S. Census reports 1,220 single-family-home construction permits were issued in March, a very small number by historic standards. For example, the total in March 1996 was 3,071, and the total in March 2004 was 5,490.

“The population is growing much faster than the housing supply, with an expected 50,000 to 60,000 people being added to the Phoenix-area population this year, but only around 12,000 new single-family homes being built,” Orr explains. “Builders are scratching their heads, trying to figure out what to do. They don’t want to overbuild like they did during the peak, and they don’t want to build a bunch of new homes for people who can’t secure the mortgages needed to buy them with such tight lending conditions.”

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/Full-Report-201304.pdf. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

energy.bill

Navajo Generating Station worth Billions to Navajo Nation

The Navajo Generating Station in northern Arizona will help contribute nearly $13 billion to the Navajo economy and help support thousands of jobs from 2020 through 2044 – if agreements can be reached to keep the plant operating beyond 2019 – according to a study prepared for the Navajo Nation and Salt River Project by the L William Seidman Research Institute at the W.P. Carey School of Business at Arizona State University.

Located on the Navajo Nation, near Page, NGS is one of the largest and most important suppliers of electricity in the Southwest.

According to the ASU report, Navajo Generating Station and Kayenta Mine: An Economic Impact Analysis for the Navajo Nation, NGS and the Kayenta Mine, the plant’s coal supplier, will contribute $12.94 billion to the Navajo Nation economy through sustained jobs and wages if the plant was to remain operational through 2044.

NGS currently employs about 518 people, nearly 86 percent of whom are Native American.  The Kayenta Mine has more than 400 employees, of whom about 90 percent are also Native American.

“I have been saying we need to protect existing jobs on the Navajo Nation,” said Navajo Nation President Ben Shelly.  “This study shows that the plant and the mine not only support existing jobs at the plant and mine, but support other jobs in the area.”

The ASU report examined the direct, indirect and induced economic impact of NGS and Kayenta Mine on the Navajo Nation using the IMPLAN model employed by the state of Arizona to examine various economic projections.  A full copy of the report is available at www.ngspower.com.

The study on the plant’s economic impact on the Navajo Nation is separate from a 2012 study from ASU that concluded that NGS and the Kayenta Mine will provide more than $20 billion in economic contributions throughout the state for the period measured from 2011 to 2044.  The new study examined the economic effects exclusively for the Navajo Nation.

Despite its economic importance, a number of significant challenges threaten the future viability of NGS.  To ensure future operations of NGS, the plant’s lease and various rights of way with the Navajo Nation must be extended and the coal supply contract with Peabody Energy renegotiated prior to any additional costly emission controls from the EPA.

The plant’s lease and various rights of way with the Navajo Nation are set to expire around 2019 and the Navajo Nation Council is currently considering legislation to extend them.  In addition, the plant’s owners are also renegotiating the coal supply contract with Peabody Energy.  Perhaps most significantly, the U.S. Environmental Protection has proposed additional and costly environmental rules to address regional visibility.

NGS is a coal-fired power plant that provides electricity to customers in Arizona, Nevada and California, and energy to pump water through the Central Arizona Project.  The participants in NGS include the plant’s operator, SRP; the U.S. Bureau of Reclamation; Arizona Public Service Co.; Los Angeles Department of Water and Power; Tucson Electric Power Co. and NV Energy.