inside tucson business 04/27/12

Inn Trouble

Kudos to Kittle and KaisermanKaiserman honored; Kittle to lead ABA

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Tucson wants more fl ightsChamber pilots effort to attract more airlines

Page 10

City’s streets get Band-Aid fi xLong-term solutions kicked down the road

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Your Weekly Business Journal for the Tucson Metro Area

WWW.INSIDETUCSONBUSINESS.COM • APRIL 27, 2012 • VOL. 21, NO. 48 • $1

LOOKING BACK AT WESTWARD LOOK

PAGE 9

Formal home and guest ranch has 100-year history

American closes reservations center, not ‘cutting’ jobs Inside Tucson Business

Th e “for sale” sign should go up sometime next month on American Airlines’ 83,000 square-foot building at 3350 E. Valencia Road that is its Southwest Regional Reservations center but contrary to reports elsewhere, the airline isn’t “eliminating more than 700 jobs” when the facility closes Aug. 24.

American spokesman Tim Smith says that based on experience and seniority close to two-thirds of the 680 em-ployees are being off ered a choice of either transferring to another location with the or staying in Tucson and working from home. Th e remaining less experienced employees won’t have a choice but will be given the opportunity to continue working from home.

American says it has about 150 home-based reservation workers in the Tucson region.

For employees, either option could mean going to a diff erent wage scale. And while it’s theoretically possible American could keep every employee currently working at the reservations center, the likelihood is that some will chose not to stay with the company.

In announcing the change, American offi cials said their overall goal is to cut employee expenses by 20 percent.

To that end Smith said selling the reservations center building will eliminate some overhead. Also, if it happens fast, a sale could bring in some extra cash as American’s parent AMR Corp. makes its way through Chapter 11 bank-ruptcy reorganization.

Smith said the decision to close the Tucson reservations center was a matter of maximizing resources and shouldn’t be construed as a refl ection on the employees working here. Th e Tucson offi ce was the smallest of three reservations centers. One at American’s corporate headquarters in Fort Worth, Texas, has 1,900 employees and the other Cary near Raleigh, N.C., currently has 1,027. Smith said all of Ameri-can’s domestic reservations are handled by centers in the U.S.

American opened the Tucson reservations center in 1991 replacing one it closed in Los Angeles. At one point, the airline had numerous such offi ces across the country.

In addition to closing to the reservations center, some job cuts were announced by American, including outsourc-ing jobs at nine North American airports where the airline has a limited number of fl ights — Calgary, Alberta; Colum-bus, Ohio; Hartford, Conn.; Memphis, Tenn.; Ontario, Calif.; Portland, Ore.; Reno, Nev.; Sacramento, Calif.; and Vancou-ver, B.C. — and closing two Admirals Clubs, at Washington Dulles and Kansas City airports.Ke

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Despite closure of Hotel Arizona, owner still seeks city deal PAGE 33333333333333333333333333333333333333333333333333333333

2 APRIL 27, 2012 INSIDE TUCSON BUSINESS

APRIL 27, 2012 3InsideTucsonBusiness.com

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CARTOONISTWES HARGIS

NEWSClosing Hotel Arizona is no ploy by Humberto Lopez to get leverage on city

By Patrick McNamaraInside Tucson Business

Word spread quickly Monday (April 23) that Humberto Lopez had closed the down-town Hotel Arizona and almost immediately, speculation began that Lopez had shuttered the 1970s-era hotel as a ploy to gain leverage over the City of Tucson.

Th at’s simply not the case, according to Lo-pez’s lawyer.

“In fact, this owner has talked about closing the hotel for three years because of the econo-my,” said attorney Ted Hinderaker.

Hinderaker, of the law fi rm Hinderaker Rauh & Weisman, said Lopez has poured hundreds of thousands of dollars into the hotel each year for years to keep it afl oat. Clsoing it this week was purely a business decision, he said.

But the closure doesn’t mean Lopez plans to

quit pushing the city help for the hotel adjacent to the Tucson Convention Center (TCC).

Th e latest proposal Lopez has sent the city includes allowing him to keep sales and bed taxes generated by the hotel to be used to repay a renovation loan.

Under the proposal, Lopez agrees to partner with a national brand chain to run the hotel, spend as much as $35,000 to build a connec-tion with the TCC, fully renovate the 308-room hotel within 24 months of approval of a deal with the city, provide preferential rates for TCC events and deed the property to the city until a complete reimbursement of sales tax and other abatements is made.

“Th ere really is no downside,” Hinderaker said, adding that all the fi nancial obligations would be born by Lopez’s company. “If the busi-ness community and people of Tucson believe in convention business and a downtown hotel

is important to economic development, this is a proposal they should support.”

He also said the sales and bed tax abate-ments would not go into eff ect until after Lopez completes the hotel renovations, secures funding and becomes part of a na-tional brand.

Th e estimated cost to refurbish the hotel would be between $25 million and $35 mil-lion, Hinderaker said.

Th e nature of the renovations would be determined based upon what a national ho-tel chain wants to do with the property.

Hinderaker said he thinks that such an agreement would not run afoul of the state constitution’s gift clause provisions that restrict governments from making special deals with private entities because all the tax

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Employees and guests discovered Monday that the hotel would close for an indefi nite time.

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Carondelet’s Heart Instituteto move to St. Mary’s campus

Carondelet Health Network on Monday (April 23) announced its Heart and Vascular Institute, currently at 4888 N. Stone Ave., will relocate to the westside campus of Caronde-let St. Mary’s Hospital, 1601 W. St. Mary’s Road, over the next six to nine months.

Carondelet said the relocation will allow the St. Mary’s campus to become a state-of-the-art premier cardiac and vascular care facility just as the eastside St. Joseph’s Hos-pital campus is home to Carondelet Neuro-logical Institute.

During the transition the Heart and Vascu-lar Institute at Stone Avenue and River Road will continue to operate at full-strength.

SB 1070 provisions might get OK’d by Supreme court

Aggressive, skeptical questioning of So-licitor General Donald Verrilli from U.S. Su-preme Court justices on Wednesday (April 25) suggest the Obama administration could face defeat on at least some of the provi-sions in Arizona’s anti-illegal immigration law SB 1070.

At one point, Justice Sonia Sotomayor advised Verrilli, who represents the Obama administration at the high court, that his ar-gument was “not selling very well.” She add-ed: “Why don’t you try to come up with something else?”

At another point Verrilli said the law amounted to an attempt by a state to en-force federal law, which is the federal gov-ernment’s responsibility.

“It’s not an eff ort to enforce federal law,” Chief Justice John Roberts replied. “It is an eff ort to let you know about violations of federal law. Whether or not to enforce them is still entirely up to you.” Roberts later com-mented, “It seems to me that the federal government just doesn’t want to know who is here illegally or not.”

Th e federal government’s case centers on federal preemption, a legal doctrine that recognizes federal law as the supreme law of the land. When a federal law and a state law clash, generally the federal law trumps the state provision.

Th e case is being heard by eight justices, following the recusal of Justice Elena Kagan, who worked on the Arizona case as solicitor general in the Obama administration prior to joining the high court.

A decision in the case is expected by late June.


NEWSCity could increase street repair fund, but long-term solutions remain miles down the road

By Patrick McNamaraInside Tucson BusinessConclusion of two parts.

As roadway conditions continue to de-teriorate, Tucson city offi cials have started to scramble to fi nd money to fi x crumbling streets.

Tucson City Manager Richard Miranda presented the Tucson City Council with a 2012-2013 fi scal year budget proposal on Tuesday (April 24) that included an addi-tional $2.9 million for streets maintenance.

Th at fi gure represents more than 54 times the amount of general fund support for streets maintenance than the city has al-located in this fi scal year’s budget.

Th e general fund is the budget area used to pay for most city core services like police, fi re and other departments that don’t have independent revenue sources.

In the past, the city has relied almost ex-clusively on statewide gas tax funding to pay for roads maintenance. Th e state’s Highway User Revenue Fund (HURF), an 18-cent per-gallon tax on gasoline makes up the bulk of the fund, which the state distributes to local governments on a formula basis.

In the current fi scal year, the city is using HURF money for 97 percent of it streets and roads maintenance budget.

Th e fi scal 2013 proposal would lessen that reliance to 86 percent.

“HURF funds are not enough,” Tucson City Councilman Steve Kozachik said at a recent constituent meeting at his midtown Ward 6 council offi ce.

Kozachik has requested city fi nance of-fi cials consider numerous options to make more money available for road repair work.

One idea would be to refi nance some of the city’s past transportation department debt, which would make available an esti-

mated $12 million that could be spent for repairs.

Kozachik also has asked that the city lob-by Pima County for additional help.

While facing similar problems with fal-tering road conditions, Pima County Ad-ministrator Chuck Huckelberry recently proposed to the county board of supervisors that as much as $9 million be released from the general funds of fi scal 2012 and 2013 to begin needed roadway repairs.

Huckelberry said the county could pro-vide from $2 million to $3 million to the city for repair work. Th e money would come from cuts to the juvenile court system and other areas.

Kozachik has said since Tucson repre-sents about 40 percent of the county’s prop-erty tax base, an equal amount of the fund-ing should be given to the city.

County offi cials have not responded to the proposal.

Th e councilman also has proposed al-lowing voters to approve reallocations of Regional Transportation Authority (RTA) funding to fi x area roads.

Voters approved the RTA plan in 2006, which imposed a 1-cent sales tax in the county to fund transportation and transit infrastructure expansions over the a 20-year span.

Kozachik said some of the projects ap-proved under the RTA have become ob-solete or might need reductions of scale, in which case he would like voters to have the choice to redirect the already approved funding to roadway repair work.

Other Tucson City Council members have not yet provided their own ideas for roadway repair funding options, although Councilman Richard Fimbres asked for de-tails on how much of the proposed repair work in the city manager’s budget would oc-

cur in each council ward. Although the options presented for

roadway repair at the council meeting and those proposed by Kozachik seek to tackle the ongoing problem of city streets in disre-pair, none of the ideas address how the city intends to pay for repairs in the long term beyond one-time infusions of cash.

Since the Legislature established the HURF system in 1974, it’s become common for Arizona municipalities to rely almost exclusively on the funding to pay for the majority of local street maintenance. But some cities have sought ways to lessen their reliance on HURF funding and supplement street maintenance budgets through local sources.

Th e City of Mesa, as an example, dedi-cates a portion of local sales taxes to road re-pair. In the current budget year, the city has a $33.4 million budget for streets mainte-nance, nearly half of that total coming from local sales tax collections.

Mesa has more than 3,200 lane miles of roadways, and has projected to have 94 per-cent of its collector streets and 89 percent of arterial roadways at or above acceptable condition, according to Mesa’s 2011-2012 fi scal year budget.

Th e City of Phoenix also has diversifi ed its revenue sources used to fund streets maintenance.

In the current budget year, 42 percent of its maintenance funds comes from HURF. Th e remainder of the budget stems from various sources including state and federal grants and a two-percent local tax on tele-communication services.

In fact, of the state’s three largest cities — Phoenix, Tucson and Mesa, respectively — Tucson relies most heavily on HURF money to maintain roads.

Th e City of Tucson has more than 5,400 lane miles of roadway and in the current budget year has an estimated budget of $21.4 million. Transportation Department offi cials estimate that more than half of Tucson’s residential streets and more than a quarter of major roadways and intersec-tions are in poor or failing condition.

Th e city briefl y sought to address road conditions through a certifi cate of partici-pation program beginning in 2004. About $20 million was allocated for surfacing and reconstruction of streets in 2005 and 2006.

City offi cials have estimated that it would cost as much as $850 million over the next ten years to repair roads and bring them into and maintain excellent condition.

How or even if that would occur has not been determined.

Contact reporter Patrick McNamara at

[email protected] or (520) 295-4259.

This patch of road near the intersection of Park Avenue and Drachman Street is an example of some of the worst roads in the city.

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Janos to close Foothillsrestaurants next month

Acclaimed chef Janos Wilder has decid-ed to close his namesake Janos and J-Bar restaurants, 3770 E. Sunrise Drive on the grounds of the Westin La Paloma Resort and Spa.

Th e lease on the restaurants’ space was due to end this fall and by mutual agree-ment with the new owners of the resort, both sides decided it was time to go their separate ways. In an interview with Inside Tucson Business columnist Michael Luria, Wilder was complimentary about his deal-ings with the new owners.

From now through May 26, which will be the restaurants’ last day, the nightly menus will consist of guest favorites over the years along with classic dishes Wilder has served since the original Janos opened downtown in 1983.

Th e closures do not aff ect Wilder’s Downtown Kitchen + Cocktails, 135 S. Sixth Ave., that was opened last year.

He moved Janos to the Westin La Paloma in 1998 and a year later added the more ca-sual J-Bar concept.

Among his honors, in 2000 Wilder was named Best Chef in the Southwest by the prestigious James Beard Foundation.

“I’m both honored and proud to have spent the last 30 years contributing to the culi-nary community in Tucson and I am so ap-preciative of the support from my wonderful guests as well as the collective eff orts of thou-sands of staff members who have worked with me over the years,” Wilder said.

Construction, hospitalitylead Tucson job gains

Even though 4,900 more people in the Tucson region were unemployed last month compared to March 2011, 6,900 fewer people had jobs and the total available workforce was down 1,900 so the unemployment rate dropped to 7.6 percent, from 8.5 percent a year ago, according to the state’s Offi ce of Employment and Population Statistics.

Th e unemployment rate for February was 7.8 percent but the state does not seasonally adjust the rate so year-over-year compari-sons are better than month-to-month.

Th e rate statewide, which is seasonally adjusted, edged down to 8.6 percent from 8.7 percent. Th e national unemployment rate for March also dropped, to 8.2 percent from 8.3 percent.

Statewide, 18,900 jobs were added dur-ing the month, which was a gain exceeding the historic average and the largest over-the-month gain in March since 2006. Of those jobs, 18,300 were in the private sector and 600 were in the government sector.

Th e leisure and hospitality sector led statewide gains, followed by construction. In the Tucson region those were reversed with the construction industry adding 2,300 jobs, a 15.5 percent jump from a year ago. Th e leisure and hospitality sector added 1,700 jobs for a 4.3 percent.


NEWS

Picor’s ‘no-agenda’ roundtable is remarkably insightful eventBy Roger YohemInside Tucson Business

For a get-together with no set program, Mike Hammond runs a terrifi c business “roundtable.” Once a year “or whenever,” the president and CEO of Picor Commer-cial Real Estate Services hosts about 25 business-related guests for lunch.

Picor’s principals and brokers are re-quired to attend and bring a guest. Ham-mond emcees the luncheon, telling every-one, “We are here to have an open dialogue on business. Th ere is no specifi c agenda.”

On Tuesday (April 24), a diverse mix of executives and managers gathered at the Arizona Inn. Among the organizations rep-resented were Raytheon Missile Systems, Solon Corp., Merrill Lynch, Chase Bank, Arizona Commerce Authority, Metropoli-tan Pima Alliance, Diamond Ventures, Uni-versity of Arizona, United Way of Tucson and Southern Arizona, Holualoa Compa-nies, Miramonte Homes, Microbusiness Advancement Center, Tucson Mayor Jona-than Rothschild’s offi ce, and Inside Tucson Business.

With a fi rm grasp of time, topics, and the talent in the room, Hammond led the group through a lively discussion across many subjects. Among the notable comments:

• Jay Meridew, vice president of fi nance for Solon, said China has over-produced solar modules to the point that “no one can make money manufacturing them.” Th at has forced several foreign fi rms and Solon out of the production business.

Basically, the Chinese government is subsidizing solar’s global growth and “eat-ing the losses,” he said.

Th e over-supply has driven down panel costs from about $1.70 to 90-cents per watt. In Tucson, that means it is now possible to get a six- or seven-year payback on resi-dential solar without any electric company incentives or tax credits.

• Ken Chapa, business attraction man-ager for the Arizona Commerce Authority, talked about economic development. Due to rising fuel costs, “land and buildings near rail lines or spurs are popular. Most inquiries are coming from California and Texas,” he said.

Typically, clients who contact him provide a list of specifi c needs, which are then distributed to applicable economic development groups for their review. Th e Arizona Commerce Authority does not try to steer businesses to any specifi c part of Arizona.

Locally, Tucson Regional Economic Op-portunities “is an important partner. Th is is

their back yard,” he said.• Chris Kemmerly, owner of Miramonte

Homes, is feeling more positive about real estate. Coming out of the housing crash, three home closings a month was a volume that became a sales norm.

“Th is month, we will sell 10 homes. I am ecstatic,” he said. “Our housing mar-ket’s supply-demand balance point is six months. Tucson is down to four months of inventory. Offi cially, that puts us in a sell-er’s market.”

But rising materials prices and a choke-hold on available land tempered his enthu-siasm a bit. With material costs projected to increase 20 percent this year, “new home prices will spike.”

• Very carefully, public policy vice presi-dent Priscilla Storm of Diamond Ventures explained a sensitive political issue. With local governments facing ongoing budget issues, several elected offi cials have called for more public-private partnerships to help fi x some community problems.

“Th ere are issues with public-private partnerships,” she said. “Business has a major concern; will their private dollar investments be well-cared-for by govern-ment?”Contact reporter Roger Yohem at ryohem@

azbiz.com or (520) 295-4254.

HOTEL continued from page 3money provided would be paid back.

Such an agreement with the city would not be unprecedented, according to Hinderaker who described hotel convention center proj-ects as a chicken-and-egg scenario. In other words, he said, convention centers need a hotel nearby to ensure success as much as the hotel needs the convention center.

“No city has developed a downtown hotel without a public-private partnership,” Hin-deraker said.

Th at depends on where you look, accord-ing to University of Texas-San Antonio profes-sor Heywood Sanders, who last year argued against Tucson’s plan to build a new conven-tion hotel downtown.

“It has often been the case that hotels ad-jacent to and designed to service convention centers usually have involved some sort of subsidy,” Sanders said. “But there is no indus-try standard.”

Las Vegas, for example, has been almost exclusively privately developed. Other cities, like Chicago and San Antonio, have publicly funded convention center hotel projects, and have seen mixed results.

Convention attendance at Chicago’s Mc-Cormick Place has dropped signifi cantly over several years.

In 2006, McCormick had 1.1 million trade

show attendees. By 2011, the number of at-tendees had fallen to 768,000.

Sanders said Chicago provides a good ex-ample of the volatility of the convention busi-ness.

It’s not just Chicago either, which has one of the largest convention spaces in the coun-try in McCormick. Phoenix tripled the size of its convention center while attendance has remained fl at.

“Th e fundamental reality is the conven-tion business is not a very reliable fi ller of hotel rooms,” Sanders said.

Th e problem is compounded in Tucson where the aged TCC sits empty most of the year and requires nearly $40 million in im-provements.

In addition, smaller markets like Tucson trying to emulate what large markets like Chicago and Phoenix have done with their convention business have resulted in a glut of convention space.

Lopez has been criticized for his eff orts to get city help to refurbish his Hotel Arizona while at the same time fi nding private inves-tors to purchase separate hotels and apart-ment complexes.

In recent months, Lopez has assumed ownership of the Embassy Suites Tucson Wil-liams Center, 5335 E. Broadway. He also owns

the Randolph Park Hotel, 102 N. Alvernon Way.

Hinderaker said Lopez has been able to attract private investment for these and other projects because he has a record of successes. But he said the other hotel projects diff er from what is planned for the Hotel Arizona because he purchased the other properties when they had fallen to the brink of insolvency, which made the investments a particularly good deal because purchase prices and interest rates were low.

“If Bert hadn’t raised the money, those properties likely would have closed,” he said.

When Lopez pulled the plug on Hotel Ari-zona this week, about 20 people were work-ing at the hotel. Hinderaker said employees were provided severance pay and many will be placed in jobs in Lopez’s other hotels or apartment properties.

Th e hotel originally opened in 1973 as Braniff Place and over the years has also been a Marriott and Holiday Inn. Th e hotel includes a 311-space parking garage and nearly 25,000 square feet of meeting space.

Contact reporter Patrick McNamara at pmc-


This Week’s Good NewsSprucing up the medians

Th e City of Tucson is nearly one month into a four-month project cleaning up me-dians and roadsides removing weeds, de-bris and dead plans from major roadways.

According to city offi cials this week, crews have made it through almost 20 miles worth of roads, including:

• Broadway, from Camino Seco to Country Club Road• Miracle Mile, from Oracle Road to Interstate 10• Golf Links Road, from Wilmot Road to Swan Road• Speedway, from Campbell Avenue to I-10• Silverbell Road, from Grant Road to St. Mary’s RoadNext up:• Speedway, from Wilmot Road to Camino Seco• Mission Road, from 22nd Street to Ajo Way• Campbell Avenue, from Grant Road to 22nd Street• Golf Links Road, from Wilmot Road to Houghton Road and Swan Road to Ajo Way• Oracle Road, from Drachman Street to Genematas Drive• Kino Parkway, from 22nd Street to Benson Highway • 22nd Street, from Camino Seco to Kino Parkway

The Tucson

INSIDERInsights and trends on developing and

ongoing Tucson regional business news

What we’re up against Tucson Mayor Jonathan Rothschild told

a group of folks gathered recently at the midtown Ward 6 council offi ce, that he and other city leaders had been hard at work try-ing to attract a major employer to come to Tucson. Offi cials at the unnamed company were responsive, particularly when the mayor informed them the Arizona Com-merce Authority had agreed to sweeten the deal with $2 million in tax breaks and other incentives.

In the end, the deal fell apart when com-pany representatives told Rothschild the state of Louisiana was willing to cough up $7 million in incentives to consummate the deal.

Starr Pass hang up Th e twice postponed foreclosure auction

of the JW Marriott Starr Pass Resort and Spa is in limbo due to some extenuating circum-stances that could arise regarding land own-ership needed for access and utilities to the resort development.

Without those, apparently bidders are unwilling to come anywhere close to the $145 million loan that developer Christo-pher Ansley has defaulted on.

Th e 575-room resort in the Tucson Mountains, which opened in 2005, has con-tinued to operate normally through the re-ceivership process.


Tech fi rms push, win change in state’s public records law By Hank StephensonInside Tucson Business

PHOENIX — Tucson is already see-ing some benefi ts from a tweak to public records laws designed to spur job growth and high-tech investment by fostering public-private partnerships between state universities and big research companies.

When Sanofi -Aventis, the international pharmaceutical company with a research facility in Oro Valley, wanted to contract with the University of Arizona for some projects, it looked into state laws govern-ing public records and became concerned their research would be subject to univer-sity open records laws, which could expose trade secrets.

Th e company contacted state Rep. Vic Williams, R-Tucson, who drafted a bill (HB 2272) that sailed through the Legislature and was signed into law this month by Gov. Jan Brewer. It included an emergency clause, which means it became eff ective immediately.

“What we were trying to ensure is pri-vate investment is protected,” Williams said. “Before this they were not protected and they were not doing business in Ari-

zona because of that.”Th e law exempts information or intel-

lectual property from prepublication re-search developed in public-private part-nerships from public records, and clarifi es that private businesses working with state universities can outline in their contract what will be published.

Williams said that although in practice, contracts between the two are already ex-empt this type of information from public record, putting it into state law protects businesses and encourages high-tech companies to invest in Arizona, partner with the universities and create jobs.

“Th e net eff ect is this is going to bring jobs to universities,” he said. “Th e whole state will benefi t from this but Southern Arizona is in a much better position to reap from this than other area of the state.”

Sanofi representative Jack Cox said the company is already moving forward on one clinical research project contract with the UA that would not have been possible without the change to public records law, he said. Under the new law, the company would also be comfortable conducting clinical research trials for new drugs with the University of Arizona.

Th ough Cox couldn’t talk specifi cs of the contract because of ongoing negotia-tions, he said the decision to work with the UA hinged on the change in the law.

“Th e bottom line is these possibilities now exist for Sanofi and for other research-based high-tech companies because of these change in the public records law,” Cox said.

Steven Zylstra, president of the Arizo-na Technology Council, said the change brings Arizona into line with many other states that already exempt this type of in-formation from public records, and gives Arizona a competitive edge when research companies are looking to contract with universities.

But Leslie Tolbert, senior vice president for research at the UA, said she doesn’t ex-pect a fl ood of contracts now that the new law has been enacted, because the uni-versity handles many contracts with pri-vate companies, and she has never heard of any concerns about the public records laws before.

She said the contracts the UA writes al-ready protect their business partners, but making it clearer doesn’t hurt.

Despite what lawmakers pass, Brewer is using her veto stamp By Hank StephensonInside Tucson Business

PHOENIX — State lawmakers have so far heeded Gov. Jan Brewer’s warning against sending her any more bills until they have agreed on a budget. She threat-ened to veto any bills until she receives a budget she deems acceptable.

But even before that, of more than 300 bills legislators passed this year, Brewer ve-toed 18 bill, including:

• HB 2647 that would have made several changes to Tucson’s downtown revitaliza-tion Rio Nuevo district. Sponsor Rep. Ted Vogt, R-Tucson, said it would have allowed Rio Nuevo to evolve to meet current needs downtown, including working more close-ly with businesses. Th ere is still hope the measure could be revived and signed once the budget issue is resolved.

• HB 2729 that would have allowed guns

into public buildings including libraries, city halls and courts, except where signs, metal detectors, public safety personnel and secured gun lockers were provided. Brewer said she was concerned about secu-rity costs and the fact that legal precedence has recognized the legitimary of laws pro-hibiting fi rearms in “sensitive places such as schools and government buildings.”

• HB 2362 that would have put state parks funds off -limits from fund sweeps that have been used to balance the state budget in recent years. Brewer said the is-sue involves certain specifi c fund accounts but the measure included all funds at the State Parks Department.

• SB 1310 that would have doubled the amount of money to $5,000 for small claims cases in justice courts. Sponsor Sen. Frank Antenori, R-Tucson, said the bill was intended to address changes due to infl ation. Brewer sided with the William E.

Morris Institute for Justice, which opposed the increase saying the small claims divi-sion doesn’t have the time or expertise to take on more complicated cases.

• SB 1323 that would have allowed the volunteer Arizona Rangers to equip their vehicles with fl ashing red and blue lights. Brewer said it would be “dangerous to con-fuse the public by using red and blue lights on civilian vehicles” and suggested they use amber colored lights instead.

• HB 2757 that would have allowed for electronically-lit commercial advertising billboards on highways. Astronomers op-posed the measure saying it would created light pollution that could endanger their future research. Brewer said the industry that employs more than 3,000 people and and puts more than $250 million annually into the state’s economy was too impor-tant.

PUBLIC NOTICESSelected public records of Southern Arizona bankruptcies and liens.

BANKRUPTCIESChapter 11 - Business reorganization Nimbus Brewing Company LLC, 3850 E. 44th St. Principal: Jim Counts, member. Assets: $906,540.00. Liabilities: $161,840.08. Largest creditor(s): DAL Inc., Clifton Heights, Pa., $45,727.80, and Arizona Department of Revenue, $40,000.00. Case No. 12-08122 fi led April 17. Law fi rm: Eric Slocum Sparks

Mark T. Kahlich and Marilyn M. Kahlich, 585 S. Cherry Ave. #151. Principal: Mark T. Kahlich and Marilyn M. Kahlich, joint debtors. Assets: $1,619,823.00. Liabilities: $3,380,747.00. Largest creditor(s): Citimortgage Inc., Gaithersburg, Md., $494,000.00; US Home Bank Mortgage, Owensboro, Ky., $395,939.00; and Henry L. Beken, Tucson, $365,000.00. Case No. 12-08500 fi led April 20. Law fi rm: Eric Slocum Sparks

FORECLOSURE NOTICES Sierra Industrial Park Delaware LLC and 26 Palms Delaware LLC 7125 and 7245 E. Golf Links Road and 2511 S. Kolb Road 85710Tax parcel: 135-10-150H, 135-10-150J, 135-10-150L and 135 10 150R Original Principal: $7,260,000.00 Benefi ciary: US Bank NA, as trustee, successor in interest to Bank of America NA, as trustee, as successor by merger to LaSalle Bank NA, as trustee for Bear Stearns Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certifi cates, Series 2006-TOP 22, care of C-III Asset Management LLC, Irving, Texas Auction time and date: 11:30 a.m., July 6, 2012 Trustee: Michelle Ghidotti, Assured Lender Services Inc., 2552 Walnut Ave., Suite 110, Tustin, Calif.

LIENSFederal tax liens Luxor Cafe LLC and Fayez M. Swailem, 3699 N. Campbell Ave. Amount owed: $8,806.10.Diamond Jade Concrete Cutting LLC, 512 E. 28th St., South Tucson. Amount owed: $2,788.57.Worley Engineering LLC and Roger Worley, 9191 N. Alabaster Place. Amount owed: $19,877.81. Nelson Works Inc., 4140 W. Camino Del Yucca, Sahuarita. Amount owed: $5,138.09. Dominguez Earthmovers Inc., 3750 W. Calle Dos, Green Valley. Amount owed: $20,850.30. TICICO LLC and Cindy Cox, PO Box 90244, 85752 (2640 E. Ganley Road #100). Amount owed: $160,208.05. Crystal Auto Glass Enterprises LLC and Shane Johnson, PO Box 41814, 85717 (2414 N. Forgeus Ave.). Amount owed: $57,736.20.Appliance Installations Inc. and Appliance Installations of CA, 7932 E. Shimmery Way. Amount owed: $155,889.52.Subs By Serendipity LLC and Lana Attar, 5401 N. Ventana Vista Road. Amount owed: $1,560.00. Fred J. White DDS PC, 3822 E. Fifth St. Amount owed: $4,115.56. Corpuz Holdings LLC, 1211 W. Calle Del Ensayador, Sahuarita. Amount owed: $4,639.49. Meridian Design & Construction Inc., 10651 E. Calle Nopalito. Amount owed: $1,243,66. Lloyd’s of Benson Auto Repair & Towing Inc., 1650 W. Sunset Road. Amount owed: $8,212.15. Rusty’s Equine Service Inc., PO Box 196, Arivaca 85601. Amount owed: $5,197.48. AAA Pool Service of Tucson Inc., 4039 S. Escalante Place. Amount owed: $1,395.82. Day-Night Deli-Mart and JT Whiteside Enterprises Inc., 2759 W. Camino Llano, Oro Valley. Amount owed: $21,437.83.Southern Arizona Medical Specialists Ltd., 4733 N. First Ave. Amount owed: $32,090.27. Frankie’s South Philly Cheesesteaks and Frank Santos, 2547 N. Campbell Ave. Amount owed: $12,253.19. Autoworld of Tucson Inc., 2411 W. Wetmore Road. Amount owed: $3,843,13. Bloom’s Heating & Cooling and Ron J. Bloom, 802 S. Catalina Ave. Amount owed: $10,705.30. Sonoita Fuel Stop LLC and Bradley Haber, 3270 Highway 82, Sonoita. Amount owed: $2,272.02.

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PROFILEWestward Look Resort celebrates its own 100th birthday By Christy KruegerInside Tucson Business

While nearly all of us, in some way, observed the 100th birthday of our state in February, Westward Look Wyndham Grand Resort & Spa is the only resort in Tucson celebrating its own centennial this year. Commemorative events are being held throughout the year, and the public is welcome to join in.

Back in August 1912, William and Maria Watson built their rustic home on 172 acres at the base of the Santa Catalina Moun-tains. Th ey soon added cottages to make room for all the guests who wanted to visit the new state and see the “wild West.” Th e property changed hands several times and the accommodations grew.

“It became a dude ranch in the 30s and the horse component started then,” said Jerry Jensen, director of sales and market-ing for the resort.

In the 1940s, Bob and Beverly Nason bought the property and named it West-ward Look, drawn from a 19th century poem by Arthur Hugh Clough.

Chicago artist Haddon Sundblom, known for creating modern-day images of Santa Claus for the Coca-Cola Company, became a regular visitor and close friend of the owners. Sundblom often painted at the ranch, and in the 1950s he portrayed the Nason children with Santa Claus in his famous Christmastime Coca-Cola advertis-ing art. Other milestones of the decade included the installation of air conditioning at Westward Look and the arrival of Walt Disney Studios to fi lm its nature documen-tary “Th e Living Desert.”

Th e evolution continued as more rooms were added, half the acreage was sold, tennis courts were built in the 1960s and the Gold Room restaurant opened in 1972.

“RKO (fi lm studio) owned the resort in the 80s and into the 90s. We saw more celebrity visitors then,” Jensen said. “What is now the gift shop was once the Dean Martin suite.”

Fortunately, the resort’s many owners retained archives of its history. In recogni-tion of its centennial, Jensen and new general manager David Yamada are expanding the collection through a “Call for Treasures” contest going through this year and a commemorative book that’s to be released in June.

For the contest, former guests are asked to submit photos and souvenirs from their stays at the resort. Th e top three submis-sions, as judged by Yamada, will earn the entrant a resort gift certifi cate. Th e 64-page keepsake book, “History of Westward Look: 100 Years in the Making,” will include a selection of items submitted during the early part of the contest. Jensen said the book, which will be unveiled at a public event along with an exhibit of the contest items, will be sold in the gift shop and

online.Memorabilia collected to-date include

photographs from guests’ visits, old brochures and postcards, a room registra-tion receipt for $5, a 40-year-old T-shirt and a 1970s-era base plate from the Gold Room. Th e plate’s owner said she bought it on eBay.

Another page in the history of Westward Look opened on Feb. 1 when the resort became affi liated with the Wyndham brand, the fi rst in Arizona to be a part of its premiere Wyndham Grand Collection. Properties in the collection represent what Wyndham sees as unique and refi ned guest experiences in key locales.

“Th e brand affi liation allows a greater awareness of the property. It’ll open doors to those who hadn’t heard of us before. Jerry has already seen an infl ux of activity,” Yamada said.

“We have a national sales force we didn’t have before and national clout, as well as central reservations,” Jensen added. “Th ere’s only so much an independent can do. A certain segment feels strongly toward brands. Th is is an assurance of the level of service and product.”

In 2010, Westward Look was designated a Certifi ed Green Hotel by Arizona Hotel & Lodging Association (AzHLA) for its environmentally friendly initiatives. Practices followed by the resort to minimize its carbon footprint include recycling, water

BIZ FACTS

Westward Look Wyndham Grand Resort & Spa245 E. Ina Roadwww.westwardlook.com(520) 297-1151

preservation, xeriscaping and the use of low-energy light bulbs. Wyndham brought an additional aspect to the property with its emphasis on going paperless.

“We have our own garden to make our produce and we cut back a lot on the amount of grass we had. AzHLA has pre-selected criteria that must be main-tained. It was a great start for us, but it’s not enough. Our next goal is to be LEED certifi ed,” Jensen said.

Even with his eye on the global market, Jensen doesn’t forget the locals. He brought music back to the resort’s Lookout Bar & Grille on weekends, and a Centennial Summer Special, starting in late May, will off er guest rooms for $100 per night.

“We’re still formulating plans for the 100th anniversary party,” he said. “As a culmination of the year, we want to have a really special Christmas season. It will allow us to put the icing on the gingerbread house.”

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Clockwise: Bob and Beverly Nason and their daughters, Lani and Sancy, circa 1950s; Westward Look today; Front entrance Westward Look, 1968.


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MEDIAClear Channel radio once again goes without top Tucson execBy David Hatfi eldInside Tucson Business

For the second time in less than two years, the operator of the largest group of radio stations in Tucson is without a top local executive and, due to a vacancy at the No. 2 spot, the highest ranking executive is the local sales manager.

Shanna McCoy departed April 19 as market manager of Clear Channel Media and Entertainment’s seven-stations group, just 14½ months after taking over the job. Th ere was no offi cial explanation and Clear Channel didn’t immediately name a replacement except, according to advertis-ing clients, local sales manager Rodney Shepherd, who has been in the job for eight months, is now overseeing the operation on an interim basis.

Steve Clement, who had been in the No. 2 position as director of sales, transferred last month to Clear Channel’s Phoenix operations, after 21 years in Tucson.

Although McCoy had worked for Clear Channel and other broadcast companies for several years, Tucson was her fi rst market manager assignment. Th e year before her arrival, she was director of sales for Clear Channel in Albuquerque and had made other career stops in Fayetteville, Ark., and Phoenix.

While some trade publications have suggested recently that Clear Channel might eliminate the position of market manager at its stations outside the 50 largest markets — Tucson is ranked No. 62 — the departure of McCoy doesn’t apppear to be part of a larger number of managers who are exiting their jobs.

McCoy’s tenure in Tucson was marked by what insiders described as micromanage-ment and condesencion in dealing with employees and a bunker mentality to the outside world. Last fall, she had her offi ce moved to the center of Clear Channel’s building at 3202 N. Oracle Road, apparently so she could keep closer tabs on employees.

(As far as talking to the outside world, I can say from fi rst-hand experience, McCoy never returned a phone call or email to me in the time she was here, which wasn’t the case with her predecessors.)

Competitors suggest a factor that might have contributed to McCoy’s departure is that the Clear Channel stations haven’t kept pace with the market in advertising revenues. Miller Kaplan Arase & Co., a Los Angeles-based accounting fi rm that issues confi dential monthly revenue reports in markets across the country, has been showing that Tucson market radio rev-enues are up by double-digit percentages this year but Clear Channel has fallen behind Cumulus Broadcasting in billing,

despite the fact that Clear Channel has two more radio signals than Cumulus.

Last November, three Clear Channel stations fl ipped formats as My 92.9 KMIY replaced the Mountain KWMT on 92.9-FM, the conservative news-talk format of KNST replaced Spanish hit music on 97.1-FM and Spanish oldies replaced an all-comedy format on 1450-AM.

Before McCoy’s arrival in February 2011, Clear Channel went without a Tucson market manager for fi ve months after Tom Zlaket Jr. was let go. Zlaket, who previously was director of sales, was named market manager, fi rst as interim and then perma-nently, immediately after the departure of Debbie Wagner in December 2008. Wagner had spent most of her 24-year career in Tucson media and had been Clear Channel’s top local executive all but 14 months since the company acquired its Tucson stations in 1999. Since leaving Tucson, Wagner has been Clear Channel’s market manager in San Diego.

Th e Clear Channel cluster of Tucson radio stations is made up of KRQ 93.7-FM, Hot KOHT 98.3-FM, KMIY, KNST 97.1-FM/790-AM, La Preciosa KTZR 1450-AM and Tejano KXEW 1600-AM.

New at KLPXBeth Simmons is the new 2-7 p.m.

personality on KLPX 96.1-FM. She comes to the rock station from American Forces Network in Italy where she worked while her husband served tours of duty in Afghanistan and Iraq. She has also worked for stations in the El Paso, Las Vegas and San Francisco markets. Simmons replaces Scott Barnett who left in March. Barnett previously had been part of the station’s morning show but was moved to the afternoons in the summer of 2010 when parent company Arizona Lotus Corp. moved “Th e Frank Show,” hosted by Frank Brinsley, to KLPX from KFMA 92.1-FM/101.3-FM.

Padres en espanolTh e Tucson Padres this week an-

nounced they’re now broadcasting their games in Spanish on Radio Vida KEVT 1210-AM. Jaime Cardenas and Jose Luis Olmos will call the games in Spanish with Francisco Gamez, director of Hispanic marketing for the Padres, also providing analysis. Th ese are not to be confused with the English broadcasts called by Tim Hagerty airing on Tejano KXEW 1600-AM.

Contact David Hatfi eld at

dhatfi [email protected] or (520) 295-4237.

Inside Tucson Media appears weekly.


SOCIAL MEDIASOCIAL MEDIA IN THE WORKPLACE

Asking job applicants for passwords is legally risky Should employers ask job applicants for

their user names and passwords to access the applicant’s personal social media accounts? Th e idea of logging in to someone’s social media account as part of a job interview seems intrusive, but the practice has become increasingly popular among employers.

One high-profi le example of this practice surfaced when the Associated Press reported in April that the Maryland Department of Public Safety and Correctional Services asked an employee at a reinstatement interview for his Facebook log in information to ensure that the employee was not affi liated with a gang. Shortly after the report, the American Civil Liberties Union commented on how this interview tactic was a gross invasion of privacy, akin to reading someone’s snail mail.

Facebook’s chief privacy offi cer released a similar statement, cautioning employers that extracting user names and passwords from job applicants “undermines privacy expectations and the security of both the user and the user’s friends.” Moreover, according to Facebook, the practice “exposes the employer who seeks this access to unanticipated legal liability.”

Legislators are joining in the debate. In response to the Maryland state agency’s asking for Facebook passwords from prospective employees, the Maryland legislature passed a bill making it unlawful for employers to ask employees for social media passwords. At least four other states are considering similar measures.

Two U.S. senators, Richard Blumenthal, D-Conn., and Charles Schumer, D-N.Y., have asked the Equal Employment Opportunity Commission and the Department of Justice to investigate the recent surge in employer practices for violations of federal law.

Setting aside the potential violations of federal and state laws aimed at protecting privacy, employers who engage in this practice also are exposing themselves to liability for job discrimination. When logging into someone’s social media account, an employer may inadvertently learn about a person’s protected characteristic — a characteristic protected by federal law, such as anyone over the age of 40 — which would not have been otherwise apparent. If the employer then subsequently declines to hire the individual, it is possible the prospective employee would allege a failure to hire on the basis of that protected characteristic.

As a best practice, employers are well-advised to not ask applicants for social

media account log in information. At most, employers should only view the informa-tion publicly available through social media. Even then, however, the employer should use a neutral third party, or, at the very least, appoint one person who is not directly responsible for hiring to review the social media accounts. Th en, the neutral

third party, who is aware that protected characteristics should not be considered in hiring decisions, can screen the informa-tion provided to the decision-maker.

Such a practice allows the employer to gain information about prospective employees through social media while also minimizing the extent to which improper

information will be passed on to the individuals responsible for hiring.

Contact John Balitis, an attorney with

Fennemore Craig practicing in the labor and

employment area representing employers in

arbitration, litigation and administrative

proceedings, at [email protected].

JOHN BALITIS


Th e Rogue Th eatre, 300 E. University Blvd. in the Historic Y, wraps up its 2011-2012 season with a presentation of William Shakespeare’s “Th e Winter’s Tale” at 7:30 p.m. Th ursdays through Saturdays and 2 p.m. Sundays through May 13.

First published in 1623, the play is both a drama and a comedy and each perfor-mance is followed by a discussion with director Cynthia Meier and the cast. Tickets are $30 each with the May 3 and 10 performances half-price. Buy them online at www.theroguetheatre.org/.

Th e Rogue Th eatre goes into its eighth season in September with these plays: “Journey to the West,” a 16th century Chinese epic about a monk’s 17-year journey to India; “Th e Night Heron,” a black comedy about two middle-aged men recently unemployed and being blackmailed who are struggling to survive; “Mother Courage and Her Children,” a play written by German playwright Bertold Brecht in 1939 after the invasion of Poland about the eff ects of anyone trying to profi t from war; “Kafka’s Monkey” and “Metamorphosis,” billed as two parables about the modern world, the fi rst shows how a chimpanzee reveals what it is to be human and the second is about a young man who awakens to discover he has become an enormous insect; and wrapping up the season with another Shakespeare play, “Richard III.”

New next season, the Rogue Th eatre will have Saturday matinees. As encour-agement to buy early, season ticket packages purchased by May 13 will include one free ticket per package.

Planning ahead And, as long as we’re looking ahead,

both UApresents and Broadway In Tucson have announced their 2012-2013 seasons.

UApresents has scheduled 32 events starting with the season opener Sept. 26 featuring nine-time Grammy Award-win-ner Bonnie Raitt. Other marque perform-ers on stage at Centennial Hall on the UA campus include a road show titled “Indecision 2012” featuring some of the comedians from Comedy Central’s “Th e Daily Show” on Oct. 1; Celtic Woman’s Christmas show Dec. 16; Carol Burnett (co-presented with Broadway In Tucson) Jan. 26, dancer-illusionists MOMIX Feb. 24, jazz musician Wynton Marsalis

March 9 and celebrity chef, TV host and author Anthony Bourdain on April 21. Th ere will also be three performances of the Broadway musical “Fela!” April 12 and 13.

Besides the aforementioned co-presentation of Carol Burnett, Broadway In Tucson’s 2012-2013 season at the Music Hall in the Tucson Convention Center complex features fi ve stage productions: the Cole Porter classic comedy “Any-thing Goes” Nov. 20-25; the musical “Memphis” Feb. 26-March 3; the return of “Wicked” March 20-April 7; Blue Man Group April 23-28;

and “Million Dollar Quartet,” a musical inspired by the true story of record executive Sam Phillips bringing together Elvis Presley, Johnny Cash, Jerry Lee Lewis and Carl Perkins for an impromptu jam session the night of Dec. 4, 1956, will wrap up the season May 7-12, 2013.

Art Th ere are three student artwork shows

I suggest you check out. First let me commend to you a pair of student exhibits with the annual Master of Fine Arts Th esis exhibit at the University of Arizona Museum of Art and the Joseph Gross Gallery, 1031 N. Olive Road on the UA campus, features the work of 15 graduating students. Up though May 13, the annual showcase of graduating artists is always thought provoking.

Meanwhile in the Louis Carlos Bernal Gallery at Pima Community College’s west campus, 2202 W. Anklam Road, has the annual juried student art exhibit up through May 4.

FilmAt the multiplexes, the Edgar Allen Poe

drama “Th e Raven” starring John Cusak, opens this week. Th ere’s also a new comedy, “Th e Five Year Engagement,” starring Jason Segel and Emily Blunt and their long road to the altar despite their best intentions.

Contact Herb Stratford at herb@

ArtsandCultureGuy.com. Stratford teaches

Arts Management at the University of

Arizona. He appears weekly in Inside

Tucson Business.

ARTS & CULTURE

Wrapping up and lookingahead to 2012-13 seasons

OUT OF THE OFFICEMEALS & ENTERTAINMENT

Th e organizers who created the Ari-zona Taco Festival in Scottsdale are bring-ing the event to Tucson. From 11 a.m. – 7 p.m. Saturday (April 28), the infi eld at Rillito Downs, 4502 N. First Ave., will be transformed for the Tucson Taco Festival.

A $10 ticket gets you into the festival and then you can sample as many tacos as you desire for $2 each. Beyond taco tasting, there will be a boutique tequila tent, a lucha libre wrestling ring, a hot chili pepper and taco eating contest, a bartender margarita challenge and a kids zone. Th ere will also be live music throughout the day.

• Tucson Taco Festival — www.tucsontacofestival.com/

90 años de fi estasCinco de Mayo is next weekend and

if there’s one Tucson restaurant that has a lot of experience celebrating the holi-day, it’s El Charro Café. Th is year marks the restaurant’s 90th celebration of the holiday that is rooted in the victory of Mexico’s army over the French in 1862.

So for El Charro, the number “90” will play a signifi cant role is celebrations, with 90-cent seven-ounce Corona and Pacifi co cervezitas or Sauza tequila margaritas. Th ere will also be 90-cent food specials.

In addition to fi ve El Charro Cafés, the Flores family now also operates two Sir Veza’s Taco Garage restaurants which

will be celebrating with two-for-one Dos Equis XX drafts and $5 Patron tequila.

• El Charro Café — www.elcharrocafe.com — locations: 311 N. Court Ave. (520)

622-1922; 6310 E. Broadway in El Mercado (520) 745-1922; 7725 N. Oracle Road in Oracle Crossings, Oro Valley, (520) 229-1922; 6910 E. Sunrise Drive in Ventana Village (520) 514-1922; and 15920 S. Rancho Sahuarita, Sahuarita, (520) 325-1922

• Sir Veza’s Taco Garage — www.sirvezas.com/ — 4699 E. Speedway (520) 323-8226 and 220 W. Wetmore Road (520) 888-8226

Tequila tasting For a more tranquil celebration of Cinco

de Mayo, the JW Marriott Starr Pass Resort and Spa is off ering a tequila tasting. From 5-8 p.m. May 5, the resort’s Salud Lobby Lounge will have samples from 21 anejo, reposado and blanco tequilas and representatives from seven diff erent brands to answer ques-tions. Live entertainment will be provided by resident guitarist Gabriel Francisco Romo. Th e event is an expanded version of the resort’s complimentary nightly tequila toast.

• Salud Lobby Lounge at JW Mar-riott Starr Pass Resort and Spa, 3800 W. Starr Pass Blvd. — www.jwmarriotts-tarrpass.com/ — (520) 791-6015

Contact Michael Luria at mjluria@

gmail.com. Meals & Entertainment appears

weekly in Inside Tucson Business.

With Cinco De Mayor coming,let’s talk about eating tacos

MICHAEL LURIA HERB STRATFORD

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WOMEN IN BUSINESS

Tips on how to bring dream of retirement back within reachFor most people these days, the idea of

retiring early is just a dream — it’s not very realistic. Th is is due, in part, to the costs associated with obtaining health insurance before age 65, when Medicare eligibility kicks in. And, even with Medicare, a retiree’s younger spouse or dependents often aren’t covered.

Fortunately, the 2010 Patient Protection and Aff ordable Care Act (PPACA) has changed the playing fi eld somewhat, opening up new avenues for the early retiree; however, its provisions will take several years to be fully eff ective. So what can you do to fi nd aff ord-able care in the interim?

Here are some tips for bridging the gap:• Enroll in a working spouse’s group

plan. Th is is probably the most common and least expensive way for a retired spouse to obtain health insurance. Some companies off er family coverage for domestic partners. Be aware, however, that the working spouse usually has a limited time in which to enroll the retired spouse after the retiree has lost health insurance coverage.

• Qualify for retiree health insurance with your current employer. Although employers seldom subsidize the cost of retiree health insurance, such coverage still tends to be much less expensive than an individual insurance policy. Few employers off er this option, however, and you should not assume you, or your spouse, are eligible. Aslo, if it is available, be aware that premiums can increase, benefi ts can change and/or employers can discontinue coverage. Be sure to determine whether retiree coverage will replace or supplement Medicare. Missing the enrollment date for Medicare could be an expensive oversight.

• Continue group health insurance under the federal Early Retiree Reinsur-ance Program (ERRP). Th e new ERRP reimburses employers up to 80 percent of the premiums for group insurance for retirees age 55 or older, their spouses, and their dependents. While this may prove to be an

aff ordable option, be aware that the federal subsidies for the employer do not automati-cally reduce the retiree’s premium cost.

• Elect COBRA benefi ts. Retirees and their dependents may be eligible for contin-ued employer benefi ts under the Consoli-dated Omnibus Budget Reconciliation Act (COBRA). COBRA mandates that employers with 20 or more employees must continue group health insurance for terminating employees for a period of time. Th e number of months someone can retain group insurance coverage depends on the state. In Arizona, the extension period is 18 months, though some people with special qualifying events may be eligible for a longer extension. Th e extension of coverage is not subsidized, which can cause sticker shock. Today, most states, including Arizona, require group plans to off er a conversion privilege after COBRA is exhausted. Again, be aware that the benefi ts are generally limited and the rates expensive.

• Buy a state-sponsored guaranteed health insurance plan. Th ese are plans eligible under Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Under PPACA, states must off er insurance coverage for qualifi ed residents, regardless of preexisting conditions. By 2014, uninsured retirees who make too much to qualify for subsidized health plans will be able to buy coverage, regardless of health, through private insurers via a state-sponsored insurance exchange. Th e cost for state-spon-sored guaranteed health insurance will be higher than insurance purchased through private insurers, but you cannot be turned down.

• Start a small business or work part-time. Some states require insurers to off er group plans to the self-employed. Small group plans are usually more cost-eff ective and off er better benefi ts than most individual health insurance contracts. If starting a business is unrealistic, retirees may get health insurance through part-time work. While it is rare for employers to cover part-time employees, some businesses — such as

Starbucks, Nordstrom, and Barnes & Noble — provide benefi ts for employees working 20 hours or more.

• Buy an individual insurance plan. Because premiums frequently increase along with age and health complications, insurance purchased from a private insurer is the retiree’s most expensive option, if he or she can qualify at all. (Th ough after 2013, insurance companies cannot deny applicants due to pre-existing conditions.) Individual plans often do not provide the comprehen-sive coverage the retiree is accustomed to.

High-deductible plans combined with a Health Savings Account are becoming an increasingly popular solution. Th ese plans usually have a $5,000 to $10,000 deductible with a limit on out-of-pocket costs. Read the fi ne print and understand what expenses meet the deductible. Some plans consider only “normal and customary” expenses. Any excess out-of-pocket expense will not be credited toward the deductible.

Estimating your future medical costs is challenging. Not only are medical and drug costs growing at a rate higher than infl ation, but long-term costs due to an individual’s medical conditions and longevity are hard to predict.

With proper planning, the ability to retire early may be more than just a dream.

Contact Gigi Schneppat, a fi nancial

advisor representative of Commonwealth

Financial Network at Professional Wealth

Strategies, at [email protected] or (520)

529-3644. Schneppat is a member of the Greater

Tucson chapter of the National Association of

Women Business Owners (NAWBO), whose

members contribute this monthly column.

GIGI SCHNEPPAT

GOOD BUSINESS


Metro Chamber looks at paying to add Tucson airline service TUCSON INTERNATIONAL AIRPORT

MARCH 2012 PASSENGER STATISTICSMarch passenger traffi c through Tucson International Airport was up 5.2 percent over March 2011 making it the busiest month in two years, since March 2010 when there were 367,434 passengers. This chart shows each airlines’ passenger totals and market share for March 2012 compared with March 2011 and the totals for the fi rst three months of both years.

March 2012 March 2011 Change

Airline Nonstop destinations

Passengers Market Share

Passengers Market Share

Passengers %

Southwest 116,641 32.5% 117,950 34.6% -1,309 -1.1%Albuquerque, Baltimore (seasonal service ended April 9), Chicago Midway, Denver, Las Vegas, Los Angeles, San Diego

American 87,500 24.4% 76,559 22.5% +10,941 +14.2%Chicago O’Hare, Dallas-Fort Worth, Los Angeles

United (Continental)

58,026 16.2% 47,630 14.0% +10,396 +21.8%

Denver, Houston Intercontinental, Los Angeles, San Francisco

Delta 36,645 10.2% 33,858 9.9% +2,787 +8.2%Atlanta, Minneapolis-St. Paul, Salt Lake City

US Airways 33,148 9.2% 39,011 11.4% -5,863 -15.0%Phoenix

Frontier 15,121 4.2% 16,295 4.8% -1,174 -7.2%Denver (service ends May 17)

Alaska 11,589 3.2% 9,653 2.8% +1,936 +20.0%Seattle

Monthly Total 358,670 340,956 +17,714 +5.2%

Year-to-date 958,674 934,409 +24,265 +2.6%Source: Tucson Airport Authority

Airline totals include passengers on branded fl ights operated by contracted carriers: American (American Eagle), Delta Connection (SkyWest), United Express (ExpressJet and SkyWest) and US Airways Express (Mesa and SkyWest).

INSIDE TRAVEL

By David Hatfi eldInside Tucson Business

Call it putting their money where their mouth is when it comes to improving airline service at Tucson International Airport, the Tucson Metro Chamber is organizing a task force to develop an air service incentive program.

Bill Holmes, chief operating offi cer of the chamber, is leading the eff ort after a meeting he had with Tucson Airport Authority executives.

“Th e problem is the airport is restricted in some of the things it can do,” Holmes said. “But let’s say we could get 100 businesses to put in $5,000 each that be a $500,000 incentive that could make an attractive presentation to an airline. And it’s not just because of the dollars but it shows a commitment to wanting improved air service in Tucson.”

Holmes said he anticipates a third meeting before the end of May and he welcomes business leaders who want to become involved. (Holmes’ email is [email protected] or call him at (520) 792-2250, ext. 134.) Participants so far have included representatives from the major resorts and other major businesses including Raytheon Missile Systems, Tucson Electric Power, University of Arizona Medical Center, Larsen Baker Commercial Real Estate and a growing list of Tucson Metro Chamber members.

Th e incentives to airlines would be separate from an incentive program the Tucson Airport Authority initiated in October that includes up to $75,000 in marketing co-op money and waived landing fees for a year to any airline that starts a new route to a targeted destination and maintains it for a year.

Holmes said the kind of incentives his group is talking about have been successfully used elsewhere, including:

• Pittsburgh International Airport, which is being looked at by a new airline named PeoplExpress.

• Cleveland-Hopkins International, which was considered vulnerable to cuts when its main airline, Continental merged into United. Th e airport has largely been spared from cuts.

Holmes says he hopes the discussion about the incentives is part of a larger conversation the Tucson region needs to have in regards to using Tucson International Airport.

From data derived about airline tickets, it’s estimated that as many as 1.3 million people a year living in Tucson region zip codes are going to Phoenix Sky Harbor Airport. If just half those people last year chose to fl y out of Tucson instead, the airport would have set a record of more than 4.3 million passengers.

Th e people going to Phoenix aren’t properly valuing their time, not to mention the added expenses of getting to and from the airport, Holmes said, admitting that he had been a victim of that mindset, too.

Further, surveys have shown that in most

cases, airfare savings from Phoenix are marginal at best. A survey done last Novem-ber by Inside Tucson Business found that for the fi rst time in fi ve years, the average airfare to the 10 most heavily traveled destinations from both Tucson and Phoenix were actually slightly cheaper from Tucson.

Tourism recession over?Passenger traffi c going through Tucson

International Airport topped 350,000 in March, only the second month that has happened since the eff ects of the economic recession hit the tourism industry in 2008. Th is year’s March total was 358,670 passen-gers, up 17,714, or 5.2 percent, from March 2011. Since July 2008, there has been only one other month that had a higher total. It was March 2010 when there were 367,434 passengers.

Despite a 0.8 percent decline passengers in January, a 3 percent jump in February coupled with the March total means airport passenger traffi c is up 2.6 percent for 2012.

Another promising sign — at least from the airlines’ point of view — is that they fi lled 83.6 percent of available seats going out of the Tucson airport in March, which tops the 83.0 percent average that month for the industry as a whole.

Phoenix Sky Harbor International Airport this month reported its passenger traffi c for February was up 5.6 percent from a year ago to 3.15 million. Sky Harbor traffi c was down

Inside Tucson Business

What’s an airport worth to a region? In the case of Tucson Inter-national Airport and the region it serves, the fi gure totals more than $3.2 billion — or, if you want to get more precise it’s $3,249,540,746.

Th e economic impact study was completed this semester by MBA students at the University of Arizona’s Eller College of Manage-ment through its Experiential Learning project, which works with fi rms such as Raytheon Missile Systems, Intuit and others consult-ing on specifi c endeavors.

Economics professor Price Fishback, who worked with the stu-dents on the project said this was the fi rst economic impact study done on Tucson’s airport since before the signifi cant negative im-pacts to the travel industries from both the 2001 the terrorist attacks and the 2008 start of the economic recession.

Fishback said information used in the study was derived from data gathered from the airport, airlines, businesses and tenants on the airport and more than 250 interwiews with departing passen-

gers. He said the data was then compiled using standard and con-servative formulas for calculating economic impacts.

“Th ey didn’t use some of those outrageous multipliers you some-times see,” he said.

Among the numbers in the report:• 12,999 employees directly work for the airport and its tenants,

which if counted as one employer, would make it the largest em-ployer in the region, topping the more than 11,000 who work at ei-ther Raytheon Missile Systems or the UA.

• 21,574 jobs are a result of businesses that are either associated with the airport or are located in the region due to the airport and its tenants.

• $1.73 billion of economic activity comes from direct spending by the airport and its tenants.

• $971 million of economic activity comes from additional spend-ing induced by businesses related to the airport.

• $406 million came from direct spending of visitors who used the airport.

Tucson International Airport worth $3.2 billion

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1.5 percent but the gain in February puts the Phoenix airport up 1.1 percent compared with the fi rst two months of 2011.

American Airlines’ futureLawyers, labor leaders, and airline experts

and executives spent this week testifying in U.S. Bankruptcy Court in American Airlines’ bid to terminate its union labor agreements as part of its goal to cut costs. Th e hearings follow US Airways’ end-run announcement April 20 that it had reached non-binding collective bargaining agreements with three unions representing American employees that are supporting its bid to acquire the airline.

While some Wall Street analysts are suggesting US Airways may have gained the advantage with the announcement, other airline executives, politicians and even some of US Airways existing labor leaders are publicly saying it would be better if American were allowed to exit bankruptcy as a stand-alone airline.

Among the revelations about a potential US Airways-American tie-up, Dave Bates, president of American’s Allied Pilots Associa-tion, revealed that the company’s headquar-ters would not be Tempe, where US Airways is headquartered, but Fort Worth, Texas, where American is headquartered. Further, the name of the airline would be American.

Whether Phoenix Sky Harbor would remain a hub, when American has hubs at Dallas-Fort Worth and Los Angles International, wasn’t addressed.

Meanwhile, some offi cials with the International Association of Machinists and Aerospace Workers that currently represents US Airways mechanics and other related employees, aren’t happy. Rich Delaney, president of IAM’s District 141, issued a state-ment using the words “insulting,” “disrespect-ful” and “unbelievable” that US Airways “secretly negotiate with labor groups outside of their own airline, and reach contractual

terms for the future, when the state of labor relations within US Airways is so uncertain.”

For his part, US Airways CEO Doug Parker has acknowledged a merger is still far from a done deal. American’s president and CEO Tom Horton insists his com-pany will continue to pursue its plans to exit bankruptcy as a separate airline and, in a letter to employees, said “these tactics are not surprising” and “It’s easy to under-stand US Airways’ sense of urgency to fi nd a way to address the challenges it has faced for a long time. Th at story is well known.”

Service noteUnder the heading it all counts, eff ective

June 3, Alaska Airlines is switching to slightly larger aircraft on the route between Tucson and Seattle that will add a dozen seats on its single daily nonstop fl ight. Th e airline is switching to a “900” model of Boeing 737s with 172 seats from an “800” model with 160 seats.

On time fl ightsFile this away as a trivia factoid: Tucson

International Airport, which almost never has issues with airline delays, dropped to No. 68 on the U.S. Department of Transportation’s list for on-time arrivals in February. Th e data showed 85.2 percent of fl ights on time at the airport. More unusual was the fact that New York’s Kennedy International Airport was ranked No. 19, with 89.0 percent of fl ights on time.

All-in-all, February was an extraordinary month for on-time arrivals. Of the nation’s 100 busiest airports, 97 of them had at least 80 percent of fl ights arrive on time.

Contact David Hatfi eld at dhatfi [email protected] or (520) 295-4237. Inside Business Travel appears the fourth week of each month in Inside Tucson Business.

AIRLINE continued from page 14


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PEOPLE IN ACTIONNEW HIRES

University of Arizona Department of Surgery Division of Cardiothoracic Surgery has hired Samuel Kim, MD as an assistant professor. Kim specializes in video-assisted thoracic surgery (VATS) and robot-assisted surgery, using the da Vinci surgical robot, which allows doctors to perform minimally invasive surgical procedures. Kim also specializes in minimally invasive and robot-assisted procedures for benign and cancerous diseases of the esophagus, including complex esophageal reconstruction surgery, robot-assisted thymectomy

(removal of the thymus) and tracheal resection and reconstruction. Kim received his undergraduate degree in biophysics from Johns Hopkins University and his medical degree from Tufts University School of Medicine. He completed residency training in general surgery at the University of

Pennsylvania Hospital and in cardiothoracic surgery at Massachusetts General Hospital. In addition, he completed a minimally invassive esophageal surgery fellowship at the University of Pittsburg and advanced thoracic surgery training at the Mayo Clinic.

Pinnacle Plan Design, LLC has hired Tammy Shinohara as a retirement plan administration. Shinohara will manage a wide range of qualifi ed retirement plans.

She is a graduate of the University of Arizona with more than 15 years of retirement plan

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PROMOTIONS

Mister Car Wash has named John Lai as president and COO. He will be responsible for helping Mister Car Wash scale its operations and expand its national presence. Lai joined Mister Carwash in 2002

as vice president of market development. Lai received a bachelor’s degree from the University of Arizona.

Pepsico Americas Beverages’ Craig Weissman has been named territory sales manager. He will be responsible for managing Pepsi’s chain grocery store sales and service on Tucson’s east side. Weissman graduated from Arizona State University with a bachelor degree in marketing.

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2012

GET ON THE LISTNext up: Defense contractors, Investment capital and lending, Venture capitalists

Inside Tucson Business is gathering data for the 2013 edition of the Book of Lists. Cat-egories that will be published in upcoming weekly issues of Inside Tucson Business are:

• May 4: Defense contractors• May 11: Investment capital and lending,

Venture capitalists • May 18: Residential real estate fi rms,

Real estate brokers, Appraisers• May 25: Electrical contractors, Mechani-

cal contractors, Plumbing contractors • June 1: Law fi rms If your business fi ts one of these catego-

ries, now is the time to update your profi le. Go to www.InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page. New and unlisted businesses can cre-ate a profi le by following the directions.

Th e Book of Lists is a year-round reference for thousands of businesses and individuals. To advertise your business, call (520) 294-1200.

POLITICSNew legislator to besworn in on Monday

Tucson defense attorney Nick Fontana is set to become the newest member of the state House of Representatives Monday (April 30) when he is sworn to fi ll the vacancy left when Daniel Patterson quit amid allegations of wide-ranging ethics violations.

A native Tucso-nan, Fontana is the sole partner of his own law of-fi ce and judge pro tem for the Tohono O’odham Tribal Court. He has worked as the chief public de-fender for the Pas-cua Yaqui Tribe and as a public de-

fender for the City of Tucson and for Pima County.

By a 3-2 vote, the Pima County Board of Supervisors appointed Fontana to fi ll the vacancy. Th is is Fontana’s fi rst-time hold-ing public offi ce and he says he won’t run for the Legislature in this year’s elections. So his time in the Legislature will be short, with the session now already running beyond the body’s self-imposed 100-day time limit.

EDUCATION/RESEARCHPima College names possible vice chancellor

Pima Community College has named longtime Spanish instructor Dolores Durán-Cerda, as a candidate for acting assistant vice chancellor. Durán-Cerda has taught at the college for 15 years.

Her duties will include coordinating re-search projects, responding to constituent concerns and working closely with the pro-vost, interim chancellor and board of gov-ernors on college curriculum, policies and initiatives.

Durán-Cerda has an undergraduate degree in Spanish, French and secondary education from the University of Iowa, and master’s and doctoral degrees from the Uni-versity of Arizona.

She replaces Deborah Yoklic, who was named Acting Vice President of Instruction at East Campus earlier this month. Interim Chancellor Suzanne L. Miles announced the planned appointment late Friday in an email to faculty and staff .

Durán-Cerda’s appointment requires ap-proval by the PCC Governing Board, which is scheduled to meet May 16.

NONPROFITSLa Fiesta fundraiserfor Nogales shelter

Th e International Child Foundation (ICF) will hold a fundraiser May 12 to bene-fi t Refugios de Dios Para Ninos, a shelter in Nogales, Sonora, for abused and exploited children.

La Fiesta will be an evening of music, food and a silent auction from 6-10 p.m. at

Paniola Ranch, a private gated luxury estate at 6515 W. Ina Road, west of Interstate 10. Tickets are $45 each and can be purchased online at ICF’s website — www.childfound.org — click on the “about” tab.

Refugios de Dios Para Ninos provides care, education, and psychological services in a safe and cheerful environment.

“Th e girls at Refugios are the children most vulnerable to exploitation – the chil-dren who need to be protected and served,” said Jackie Semar, executive director of ICF.

La Fiesta is being organized by Tiff any Ragels and Jacques Mauger, along with Bobby Astengo, president of Refugios, and Ricardo Gallego, director and founder of the shelter.

KUDOSBBB honors McCaleb Const.,Golden Eagle and Temp-Con

McCaleb Construction Inc. was honored Th ursday (April 25) as the recipient of this year’s Ethics Award from Better Business Bureau of Southern Arizona.

It was one of three awards handed out as part of the BBB’s second annual Torch

Awards luncheon event at the JW Marriott Starr Pass Resort and Spa.

Golden Eagle Distributors Inc. was given the Good Neighbor Award, which honors busineses that demonstrate a commitment to making Southern Arizona a better place through community service. Founded in 1974, Golden Eagle is a third-generation family-owned distributor of Anheuser-Busch and other products.

Temperature-Control Inc. was honored with the Customer Excellence Award that goes to a business that demonstrates a com-mitment and history to outstanding cus-tomer service. Temperature-Control, which is better known through its trade name Temp-Con, is a full-service HVAC company that was founded in 1982.

Th e Ethics Award honors businesses for their management policies and practices in all aspects of business including dealing with customers, vendors, suppliers. Winner McCaleb Construction was founded in 1981 by John and Judy McCaleb on the idea that they could focus on customer satisfaction in the remodeling business.

Kim States, president and CEO of BBB of Southern Arizona, said there were 78 nomi-nations submitted for this year’s awards.

BRIEFS

NICK FONTANA

LOG ON www.InsideTucsonBusiness.comStay in the know with breaking news, in-depth reporting and business facts


TUCSON STOCK EXCHANGEStock market quotations of some publicly traded companies doing business in Southern Arizona

Company Name Symbol April. 25 April. 18 Change52-Week

Low52-Week

HighTucson companiesApplied Energetics Inc AERG.OB 0.06 0.06 0.00 0.04 0.89CDEX Inc CEXI.OB 0.02 0.02 0.00 0.01 0.10Providence Service Corp PRSC 14.54 14.79 -0.25 8.35 15.94UniSource Energy Corp (Tucson Electric Power) UNS 36.30 35.76 0.54 32.96 39.25

Southern Arizona presenceAlcoa Inc (Huck Fasteners) AA 9.82 9.95 -0.13 8.45 17.96AMR Corp (American Airlines) AMR 0.58 0.48 0.10 0.20 6.96Augusta Resource Corp (Rosemont Mine) AZC 2.52 2.59 -0.07 2.10 5.55Bank Of America Corp BAC 8.26 8.92 -0.66 4.92 12.71Bank of Montreal (M&I Bank) BMO 60.02 59.69 0.33 51.83 66.64BBVA Compass BBV 6.93 6.80 0.13 6.43 13.01Berkshire Hathaway (Geico, Long Cos) BRK-B* 79.94 79.74 0.20 65.35 86.91Best Buy Co Inc BBY 22.08 22.06 0.02 21.13 32.85BOK Financial Corp (Bank of Arizona) BOKF 56.36 54.20 2.16 43.77 59.59Bombardier Inc* (Bombardier Aerospace) BBDB 4.04 4.10 -0.06 3.30 7.29CB Richard Ellis Group CBG 18.67 18.34 0.33 12.30 28.03Citigroup Inc C 33.68 35.08 -1.40 21.40 46.00Comcast Corp CMCSA 29.65 29.86 -0.21 19.19 30.41Community Health Sys (Northwest Med Cntrs) CYH 23.38 24.03 -0.65 14.61 32.24Computer Sciences Corp CSC 27.77 27.85 -0.08 22.80 51.43Convergys Corp CVG 13.19 13.33 -0.14 8.49 14.55Costco Wholesale Corp COST 87.28 88.07 -0.79 70.22 92.10CenturyLink (Qwest Communications) CTL 38.03 38.40 -0.37 31.16 43.49Cvs/Caremark (CVS pharmacy) CVS 43.80 43.60 0.20 31.30 45.88Delta Air Lines DAL 10.48 10.53 -0.05 6.41 11.60Dillard Department Stores DDS 63.88 64.29 -0.41 38.99 64.84Dover Corp (Sargent Controls & Aerospace) DOV 61.51 61.04 0.47 43.64 70.15DR Horton Inc DHI 15.71 14.87 0.84 8.03 16.45Freeport-McMoRan (Phelps Dodge) FCX 37.32 38.29 -0.97 28.85 56.78Granite Construction Inc GVA 27.45 27.77 -0.32 16.92 30.49Home Depot Inc HD 51.91 51.81 0.10 28.13 52.15Honeywell Intl Inc HON 60.48 58.73 1.75 41.22 62.28IBM IBM 203.57 200.13 3.44 157.13 210.69Iron Mountain IRM 30.17 29.22 0.95 27.68 35.79Intuit Inc INTU 57.40 61.43 -4.03 39.87 62.33Journal Communications (KGUN 9, KMXZ) JRN 4.27 4.68 -0.41 2.69 5.72JP Morgan Chase & Co JPM 43.16 43.29 -0.13 27.85 46.49Kaman Corp (Electro-Optics Develpmnt Cntr) KAMN 34.52 33.67 0.85 25.73 38.40KB Home KBH 8.22 7.72 0.50 5.02 13.12Kohls Corp KSS 49.76 51.01 -1.25 42.14 57.39Kroger Co (Fry's Food Stores) KR 23.19 23.49 -0.30 21.14 25.85Lee Enterprises (Arizona Daily Star) LEE 1.13 1.15 -0.02 0.49 1.92Lennar Corporation LEN 25.90 25.55 0.35 12.14 28.28Lowe's Cos (Lowe's Home Improvement) LOW 31.73 31.96 -0.23 18.07 32.29Loews Corp (Ventana Canyon Resort) L 40.64 39.65 0.99 32.90 44.46Macerich Co (Westcor, La Encantada) MAC 61.80 58.62 3.18 38.64 61.83Macy's Inc M 39.94 40.13 -0.19 22.66 41.27Marriott Intl Inc MAR 39.02 37.83 1.19 25.49 39.89Meritage Homes Corp MTH 28.20 25.96 2.24 13.68 29.32Northern Trust Corp NTRS 46.91 46.55 0.36 33.20 50.20Northrop Grumman Corp NOC 63.01 61.92 1.09 49.20 70.61Penney, J.C. JCP 35.66 33.87 1.79 23.44 43.18Pulte Homes Inc (Pulte, Del Webb) PHM 8.70 8.37 0.33 3.29 9.69Raytheon Co (Raytheon Missile Systems) RTN 52.91 52.93 -0.02 38.35 53.55Roche Holdings AG (Ventana Medical Systems) RHHBY 46.00 44.47 1.53 34.02 45.65Safeway Inc SWY 21.60 21.92 -0.32 15.93 25.43Sanofi -Aventis SA SNY 37.55 36.98 0.57 30.98 40.75Sears Holdings (Sears, Kmart, Customer Care) SHLD 52.25 56.01 -3.76 28.89 87.66SkyWest Inc SKYW 9.48 9.68 -0.20 9.63 16.92Southwest Airlines Co LUV 7.98 7.89 0.09 7.15 12.44Southwest Gas Corp SWX 41.80 41.36 0.44 32.12 43.64Stantec Inc STN 31.20 30.94 0.26 20.96 32.79Target Corp TGT 56.83 57.38 -0.55 45.28 58.95TeleTech Holdings Inc TTEC 15.08 15.77 -0.69 14.10 22.39Texas Instruments Inc TXN 31.97 32.72 -0.75 24.34 35.98Time Warner Inc (AOL) TWX 37.18 36.22 0.96 27.62 39.24Ual Corp (United Airlines) UAUA 22.97 22.70 0.27 15.51 26.84Union Pacifi c Corp UNP 113.49 109.65 3.84 77.73 117.40Apollo Group Inc (University of Phoenix) APOL 34.93 35.92 -0.99 33.71 58.29US Airways Group Inc LCC 9.60 8.20 1.40 3.96 10.35US Bancorp (US Bank) USB 31.68 31.30 0.38 20.10 32.23Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT 57.36 62.06 -4.70 48.31 62.63Walgreen Co WAG 35.30 35.51 -0.21 30.34 45.34Wells Fargo & Co WFC 33.35 33.57 -0.22 22.58 34.59Western Alliance Bancorp (Alliance Bank) WAL 8.97 8.51 0.46 4.44 9.20Zions Bancorp (National Bank of Arizona) ZION 20.19 21.17 -0.98 13.18 24.71Data Source: Dow Jones Market Watch

*Quotes in U.S. dollars, except Bombardier is Canadian dollars.

FINANCEYOUR MONEY

Even with low interest rates,you can invest for income

Not long ago, the Federal Reserve — aka the Fed — announced that it plans to keep short-term interest rates near zero until late 2014. Th e Fed initially pushed rates to that level in 2008, in an eff ort to stimulate economic growth. Clearly, low interest rates have a wide-ranging impact — but what eff ect will they have on you, as an individual investor?

If you need income from your invest-ments, then the continuation of ultra-low interest rates may be a matter of some concern, particularly if you own certain types of fi xed-income investments, such as certifi cates of deposit.

While CDs are insured, off er return of principal at maturity and provide regular interest payments, they are not risk-free. With low interest rates, you risk losing purchasing power. Still, fi xed-rate vehicles may well have a place in your portfolio. If you’re even somewhat dependent on your investments for income, you may need to broaden your search. Here are a few ideas to consider:

Build a bond ladderLong-term bonds, by their nature, are

more subject to interest rate risk than shorter-term vehicles. In other words, interest rates are more likely to rise during the life span of a longer-term bond — and when rates go up, the prices of existing bonds will fall. To help lower this risk, you may want to build a “ladder” of bonds of varying maturities. Th en, if market interest rates are low, you’ll still have your long-term bonds earning higher rates, but if rates rise, you can take advantage of them by reinvesting the proceeds of your maturing short-term bonds.

But remember to work with your fi nancial advisor to evaluate whether a bond ladder and the securities held within it are consistent with your investment objectives, risk tolerance and fi nancial circumstances.

Dividend-paying stocksYou can fi nd companies that have paid

dividends for many consecutive years — and in some cases, increased their divi-

dend payout each year. In 2012, companies listed in the S&P 500 are on track to pay out more than $252 bil-lion in dividends, a record amount, according to data compiled from Standard & Poor’s. (Th e S&P 500 is an

unmanaged index and is not available for direct investment.)

Of course, stock prices will fl uctuate in value, and you may receive more or less than your original investment when you sell. Historically, dividend-paying stocks have been less volatile than non-dividend-paying stocks.

Be aware, though, that companies can lower or discontinue dividend payments at any time without notice. Past performance is not a guarantee of future results.

Refi nance your mortgageToday’s low rates are good news for

borrowers. With tougher standards in place, it may not be as easy to refi nance a mortgage as it once was, but if you qualify, you may want to think about refi nancing. You may be able to save quite a bit of money on your monthly payments — and lower payments can translate into a greater cash fl ow.

Plus, if you don’t need all the savings, you can put some of the money into an Individual Retirement Account (IRA) or another retirement savings vehicles.

Ultimately, an extended period of low interest rates is just one more factor to consider in creating and adjusting your investment strategy. Work with your fi nancial advisor to help ensure low rates won’t aff ect your income needs.

Contact Tim Beithon, a fi nancial

advisor with Edward Jones, at Tim.Beithon@

edwardjones.com or (520) 546-1839. Beithon’s

offi ce is at 9525 E. Old Spanish Trail, Suite 111.

TIM BEITHON


INSIDE REAL ESTATE & CONSTRUCTION

By Roger YohemInside Tucson Business

Tom Kittle, owner of Kittle Design & Construction, has been named 2012-13 chairman of the board of the Southern Divi-sion of the Arizona Builders’ Alliance (ABA). Kittle is a third-generation Tucsonan who established his company in 2000.

Kittle succeeds Nelson Brown, chairman of J.B. Steel who completed his one-year term. Also taking offi ce was Mark Riggi, owner of Millwork by Design, who will serve as vice-chairman for 2012-13 and chairman for 2013-14.

Th e organization’s 2012 Volunteer Day recipient is Esperanza en Escalante, a tran-sition center for homeless veterans. Th e make-over event that focuses on property improvements for non-profi ts is Dec. 1.

In ceremonies held April 20, Tucson Mayor Jonathan Rothschild swore in Kittle and Riggi. Randy Bond, project manager for Epstein Construction, received the group’s 2011 Volunteer of the Year award.

Th e builders’ alliance is a trade association that represents about 150 local businesses af-fi liated with commercial construction.

Long honors KaisermanReal estate veteran Robin Sue Kaiserman

of Long Realty has received her company’s highest award that honors a lifetime of ca-reer achievement. Kaiserman, with over 25 years of experience as a real estate agent, has received the Barrington L. Long Life-time Achievement Award.

Th e annual award is presented to a Long Realty sales associate whose professional experience and accomplishments have made a signifi cant and lasting impact in the

industry. It also considers the employee’s character, respect from their peers, and rep-utation in the community.

“Robin’s real estate career is an excep-tional example of hard work, innovation and self-suffi ciency,” said Rosey Koberlein, CEO of Long Companies. “Her commit-ments to the profession and this community are a testament to her dedication and we are honored to recognize her.”

Company offi cials said Kaiserman was the fi rst real estate agent in Tucson to reach $10 million and $60 million in sales, along with every $10 million increment in be-tween. Th e award is named after Barrington Long, president and owner of Long Realty from 1952 to 1980, and son of company founder Roy H. Long.

2 zips sell outHere’s a fi rst: During March, every home

listed in zip codes 85706 and 85757 was sold. Offi cials at the Tucson Association of Realtors, who did the data analysis, couldn’t recall ever seeing a 100 percent sales ratio, let alone two in one month.

Builders’ Alliance taps Kittle; Long honors Kaiserman

THE PULSE: TUCSON REAL ESTATE

4/16/2012 4/9/2012

Median Price $123,000 $140,500Active Listings 5,818 5,899New Listings 334 329Pending Sales 478 477Homes Closed 251 192Source: Long Realty Research Center

WEEKLY MORTGAGE RATES

Program Current Last WeekOne

Year Ago12 Month

High12 Month

Low

30 YEAR 3.88% 4.125%APR 3.88% 4.125%APR 4.95% 4.95% 3.88%

15 YEAR 3.38% 3.50%APR 3.38% 3.50% APR 4.22% 4.22% 3.16%

3/1 ARM 3.00% 3.375%APR 3.00% 3.375% APRThe above rates have a 1% origination fee and 0 discount . FNMA/FHLMC maximum conforming loan amount is $417,000 Conventional Jumbo loans are loans above $417,000Information provided by Randy Hotchkiss, National Certifi ed Mortgage Consultant (CMC) Peoples Mortgage Company, 1610 E. River Road, Suite-118 Tucson, Arizona 85718 • 520-324-000MB #0115327. Rates are subject to change without notice based upon market conditions.

4/24/2012

In zip code 85706, on the city’s southeast side near Tucson International Airport around Drexel Road and Alvernon Way, all 52 available homes were purchased. In zip code 85757, the far west side near Ryan Air-fi eld south of Ajo Way, all 21 units sold.

And due to a timing quirk, two more homes sold in each area that were not offi -cially categorized as active listings.

Northwest side zip code 85741 had a more normal month, where 48 of 56 homes sold for an 86 percent ratio. Th e area is gen-erally from Interstate 10 east to La Cholla Boulevard between Cortaro Farms and Riv-er roads.

Clearly, low prices drove sales. In each area, the majority of sales were in the $120,000 range or less, with several around $100,000. For the entire market, the March median price was $132,900, according to the Realtors’ report.

During March the most listings were in Vail where there were 279; followed by 250 listings in the northeast side zip code 85750 near Sabino Canyon. Catalina Foothills zip code 85718 was third-highest at 240.

Most inventory in cityBy jurisdiction within the region, the

highest inventory of homes during March was in the city of Tucson where there were 3,410 listings, according to new data from Coldwell Banker Residential Brokerage. Th at is down 19.6 percent from February’s 4,239 homes and a 42 percent drop from 5,874 units in March 2011.

Home sales totaled 1,002, up 26 percent from 793 sales in February and 12 percent more than the 894 sales in March 2011. Th e average selling time was 92 days compared

to 98 days in February.Th e March median sales price was

$127,500, up 7 percent from $119,250 in February. Th e March 2011 mark was $119,000. Average sales prices were $167,225 for March; $166,545 for February; and $159,139 for March 2011.

In Marana, the March inventory was 218 units, down 54 from February and 125 fewer than one year ago. Sales were 51 homes, 14 more than in February, closing after an av-erage 147 days on the market.

Selling prices in Marana were mixed with the March median at $190,000 compared to $195,000 in February.

In contrast, average sales price increased. For March, the average was $272,311, signifi -cantly higher than $195,185 in February. On a price-per-square-foot basis, values jumped from $89 in February to $115 in March.

In Sahuarita, the third-largest submarket, March inventory totaled 150 homes com-pared to 179 in February. Since March 2011, the inventory has plunged 44 percent from 269 listings. Th ere were 47 sales in March; 34 in February; and 52 in March 2011. On aver-age, homes sold in 101 days in March.

Regarding prices, the March median was $145,000 compared to $147,550 in Febru-ary. In March 2011, the mark was $128,750. Th e average sales price was $146,152, down 7 percent from $156,758 in February.

Sales and leases• TV Grant PAD LLC purchased a 5,023

square-foot building that was formerly a Village Inn restaurant on a 1.4-acre parcel at 6635 E. Grant Road for $1.05 million. Th e seller was Hazelwood Properties Inc., rep-resented by Pete Villaescusa and Jesse Per-on, CBRE. Th e buyer was self-represented.

• Regina and Th omas Graham pur-chased a 16,000 square-foot vacant com-mercial lot at 16624 N. Oracle Road, Catali-na, and a 66-unit self-storage complex at 16625 N. Avenida del Oro, also Catalina, from Neier Family Revocable Trust for $290,000. Th e transaction was handled by Andrew Sternberg, Oxford Realty Advisors.

• Chuze Fitness leased 16,040 square feet at 4329 N. Oracle Road, from Larsen Baker, self-represented by Andy Seleznov. Chad Iafrate, Cassidy Turley BRE Commer-cial, represented the tenant.

• Eye Associates Ltd. leased 4,683 square feet at 6130 N. La Cholla Blvd., Suite 245, from HCP/Utah LLC, represented by Rick Kleiner and Tom Knox with Picor Commer-cial Real Estate Services.

• Varitech Commercial Services leased 3,946 square feet of warehouse and offi ce space at 1646 S Research Loop, from Eastside Center LLC. Th e transaction was handled by Dave Gallaher, Tucson Industrial Realty.

Contact reporter Roger Yohem at


Tom Kittle Robin Sue Kaiserman


One of the few pleasures left to the those of us who stick out the summer days in Tucson, is that we can enjoy the sights and amenities of our region without the long waits in line. Th at wasn’t always the case.

Back in the days BC — before condensers, as in air conditioning condensers — Tucsonans holed up wherever they could fi nd a shady spot or a burst of swamp cooler air.

What resorts we had, a lot of them were dude ranches, usually closed for the entire summer. It also was common for restaurants to shut down for weeks for vacation.

Anyone who could get away left town, for at least part of the time. You think San Diegans have only recently begun com-plaining about us Zonies?

Schools got out in late May or early June but because administrators didn’t have to build in snow days, they could get off until Labor Day to start back up again.

Since then, air conditioning has changed the way we live in the Arizona desert. Th e Central Arizona Project has given us a more assured supply of water.

We didn’t quite make it to 1 million in October 2006 like some had but statisticians are nevertheless confi dent we will get there, probably by this time of year in 2014.

Th is summer, it looks like we’re reverting back to some of our old BC habits. Th e revitalized Old Tucson has announced that it’s going to be closed after Memorial Day until the end of September.

Similarly, the Science Downtown exhibit Mars and Beyond in the Rialto Building, 300 E. Congress St., is planning to close after Sunday (April 29). In their case, offi cials are saying it has to do with construction of the streetcar line through downtown. Th e exhibit will remain closed while Congress is closed for construction.

When the street closed this month, foot traffi c at the exhibit “came to a standstill,” according to a statement by board member Don Martin. He also made a point of saying his organization supports the streetcar’s construction 100 percent.

“We realize that the construction of Sun Link is an important part of downtown revitalization and the long-term health of the downtown area. At the same time, businesses have to take appropriate actions and this is a necessary step in the process,” Martin said.

Th is week, Janos Wilder told his staff he is closing his Foothills Janos and J-Bar restaurants after May 26 because his lease was due to expire this fall and without a new one from the new owners of the Westin La Paloma Resort and Spa, he didn’t want to slug it out through the slow summer season.

Time marches on and things change. I guess this is progress but it sure doesn’t seem like it.

Contact David Hatfi eld at dhatfi [email protected]

or (520) 295-4237.

EDITORIAL

DAVID HATFIELD

BIZ BUZZ

Closing for summer,is this progress?

EDITORIAL

Government should have seen potholes comingImagine if your business could have had the luxury

of a year or two warning of the economic recession. You could have prepared for it. You would have budgeted dif-ferently.

Well, governments did have that luxury. Th e lag creat-ed in collecting sales, property and income taxes means entities that derive revenues from these sources could and should have been able to plan for the downturn.

What’s worse is that for all of us who rode out the rough times of 2009, 2010 and 2011 and are now just be-ginning to see the fi rst glimmers of a recovery, govern-ment entities are still deep in the throes of the down rev-enues. Sales taxes may be starting to pick up, but there’s still a long way to go for property and income taxes to rebound.

In the meantime though, when it comes to the pot-hole-riddled streets we’re riding on in the Tucson region, we’re hearing local government offi cials try to pin the blame on state lawmakers who swept away gas tax mon-ey, called the Highway User Revenue Funds (HURF), to help balance the state’s budget shortfall.

But as reporter Patrick McNamara showed in last week’s Inside Tucson Business, that’s not necessarily the case.

While it is true the City of Tucson saw its HURF in-come fall by $6.6 million to $18.2 million in the 2009-2010 fi scal year, from $24.8 million three years earlier, those are the extremes over the past dozen years. In fact HURF money coming into the city over the past 12 years has averaged $21.51 million.

Th is year’s amount of $20.66 million is within 5 per-cent of that. Further, HURF has been higher the last two fi scal years.

What has changed is how much money the city adds to HURF revenues for the total transportation program.

In 2005 under former City Manager James Keene, Tucson set out on an aggressive road upgrade and main-

tenance program adding $23.8 million through city-sold certifi cates of participation. Th at was followed by a stretch of four years when the city continued to boost the Transportation Department’s streets maintenance bud-get contributing from 12 to 23 percent of the total.

Th e past three years, no more than 2 percent of the city’s streets maintenance budget comes from sources other than HURF money. Th is fi scal year, just $154,260 of the $21.24 million streets maintenance budget came from the general fund.

At least some of the blame for that goes to the failed two-year administration of City Manager Mike Letcher, who was fi red last September.

And it’s not just Tucson either.Pima County received $38.97 million in HURF money

last year, which is within about $1.5 million of the $40.5 million average over the past 12 years.

And while driving on some roadways in the city of Tucson and unincorporated Pima County is getting to be a test of drivers’ four-wheeling capabilities, other mu-nicipalities in Arizona, including some in Pima County, are maintaining their roads.

As Tucson transportation offi cials told McNamara in his report, the city hasn’t adequately kept up with the maintenance of roads. Another way of saying that is a lack of commitment on the part of leadership.

So let’s not hear any more whining from elected of-fi cials about the lack of HURF money as the reason Tucson’s potholes are so bad. Revenues are down com-mensurate with what they should be, considering the economy.

But then again, governments have the luxury of know-ing that in advance.


OPINIONBUSINESS INK

In fi rst year, Chamber CEO Varney often drew a line in the sandOn May 9, Tucson Metro Chamber CEO

Mike Varney marks his one-year anniver-sary on the job. He hit the ground running, tearing into anti-business roadblocks that drag down Southern Arizona’s economy.

Pun intended, it’s been an uphill sprint. Th e word is out about our little old pueblo. It is not a good city for business. Forbes magazine ranks Tucson No. 165 in the nation for best business conditions and careers.

Resolute, Varney has faced the challeng-es in stride. With a laser focus, he has advanced his four-legged agenda: pro-busi-ness advocacy, community aff airs, educa-tion, and to “super serve” small business.

To the credit of the chamber board, they hired two executives to replace CEO Jack Camper who retired a year ago. Th ey ran with an idea pushed by director Colleen Edwards, TWS Premium Appliance Center, to go for outside new blood and local community roots.

Varney was recruited from the North Las Vegas Chamber of Commerce where he was CEO and a director with the Western Association of Chamber Executives. He clearly understood the nuances of running a chamber.

As his wingman, Tucson community relations guru Bill Holmes was brought in from Wells Fargo where he was a vice president, to fi ll the new post of chief operations offi cer.

Together, they restructured staff . As a “back to basics” guy, Varney changed the internal operations so they could function “from a solid platform of effi ciency.”

Among key additions was Lori Banzhaf as vice

president of business development. Banzhaf is a hyper-positive, former marketing maven who could build a bonfi re in a monsoon with no matches.

Th e communications baton was passed to Gina Babunovic, former top executive with Youth on Th eir Own.

For continuity, someone who knew “the Varney way,” Jackie Chambers-Bond was named member relations manager. She and Varney were chamber collegues in the Las Vegas area.

It didn’t take long for Tucson’s business community and politicos to feel the chamber’s revival. As then-board chairman Wendell Long, CEO of Pascua Yaqui Gaming Enterprises, put it: “Th e vibe is back.”

For Varney, it didn’t take long to discover Tucson’s quirky political dynam-

ics. Specifi cally, Tucson has a large number of very small special-interest groups with very narrow self interests.

To fi x that, he has a straightforward, big picture solution: “We need leaders who will do what is right for the greatest number of citizens instead of listening to who can scream the loudest.” He feels they have political swag because the region lacks a master plan for business growth.

Until a plan is in place, “the little fi efdoms will continue to play a game we call ‘I’m the tallest pygmy.’ Until we get past our need to wage petty turf battles, it will be tough to make the changes that will yield a better community for all citizens.”

At the chamber, a better community starts with better jobs. Th e chamber’s crusade started with an endorsement of the Rose-mont Copper mine southeast of Tucson, contingent on it meeting federal standards.

Th e fi nancial benefi ts are impressive: 400 jobs at the mine, another 1,100 off -site support jobs, and $9 billion in economic benefi ts in Pima County over the mine’s lifecycle.

City and county government and economic development offi cials love to promote the region as a solar city and solar technology hub. Yet, many of those same public offi cials oppose the mine.

Th ose bureaucratic quirks have chal-lenged the chamber’s eff orts to tear down

the political roadblocks delaying the mine. And in step with his pro-business advo-cacy, Varney has drawn a line in the sand.

At a February forum before some 225 business people, Varney critiqued the region’s inability to create signifi cant job growth. Th e local economy can’t prosper as a national nexus for call centers.

From the audience, Varney was asked about the Rosemont Mine. In his reply, he shared some insight from a meeting with Pima County Administrator Chuck Huckelberry.

Varney said he asked Huckelberry for a straight yes or no answer to: Are you against the Rosemont Mine?

Yes.Huckelberry’s resistance, said Varney,

was based on two main reasons. When the mine ceases operations, Huckelberry wants Rosemont to fi ll in the pit. Varney said this condition is government over-reach, not required, far exceeding any federal, state or local environmental law.

But “what really ticks him off ” is that the county will get little revenue compared to Rosemont’s profi ts. He wants a bigger share.

Contact Roger Yohem at ryohem@

azbiz.com or (520) 295-4254. His Business Ink

appears biweekly and weighs in on local

political, social and business issues.

ROGER YOHEM

SPEAKING OUT

If I could be queen for a day, election processes would be diff erentI hereby appoint myself queen of

election processes. I don’t expect these to “catch on.” But I can dream!

Th ose of us who live in Congressional District 8 have “survived” a special primary to nominate candidates to run in the June 12 general election. Th e winner in June will represent us for the last eight months of former Rep. Gabrielle Giff ords’ term.

Primary turn-out was 27.9 percent. A majority of the electorate stayed home. Some favor penalizing those who don’t vote. However, I would suggest serving coff ee and doughnuts at polling places because food always attracts people.

After receiving several robo calls on election day, I would appreciate 24 hours of absolute silence — no calls, no ads on election day! About a third of us vote early, so a lot of these last-minute calls and ads are a waste of eff ort. Many of us have made our decisions about the candidates to support long before the actual election day.

Some might want to ban the robo calls altogether, but there is that delicate matter of free speech. Th e candidates themselves should be required to make calls to voters. We like to be asked for our votes.

And speaking of money, the U.S. Supreme Court, ruling in the Federal Elections Commis-sion (FEC) versus Citizens United case, decided that “corporations are allowed to spend money on political speech.”

Prior to that, corporations were banned from political activity. Most shareholders are probably unaware of what their companies are doing in this regard. (Some might even want the corporation to support a diff erent candidate.)

In 1975, Congress established the FEC to administer and enforce the Federal Election Campaign Act. I demand the FEC commissioners actively urge Congress to pass a Constitutional amendment ratifi ed by the states to “clarify that money isn’t free speech and corporations aren’t persons under the U.S. Constitution.”

People who run negative campaigns do so because they don’t want to reveal their

own shortcomings. Rather than tearing apart their opponents, those running for offi ce should be required to give us some clear ideas on what their qualifi cations are and what they stand for. Yes Virginia, the Golden Rule still exists! “Do unto others as you would have them do unto you.”

As queen, I would ban pollsters. Some of us may not respond truthfully, and the results are usually based on how the questions are phrased. Th e best way to con-duct a local poll is for the candidate to go door-to door and listen to the citizens! Th ey will say exactly where they stand on issues; the only cost is shoe leather!

One vexing problem with polls is that East Coast election results are often announced before West Coast folks have even voted. Common courtesy is needed here.

All Arizona counties should adopt the same voter registration form. Most voters are unaware that each county has its own form. I learned about this when I registered voters at a state-wide meeting. Th ank good-ness our Pima County election offi cials were good natured and willing to forward registrations to other counties!

Early voting is readily available nowa-

days, but there are still many people who like to vote at their polling places; they like to greet their neighbors on election day.

Th ere are complaints that early voting takes away the secret ballot. We have to write our signatures on the inner envelope enclosing the ballot for our votes to be counted. For the sake of validity, it is important that each voter’s signature be compared to that on fi le with county elections.

Tucson’s hybrid election procedures were just upheld by the state Supreme Court. A charter city has the right to conduct its elections as prescribed in its charter, the Court unanimously agreed.

Now it is time for Tucson voters to take another look at their election process and vote to conduct non-partisan elections. Th ey could go a step farther and prescribe ward-only elections and give the mayor the same rights that the council members have — mayoral parity. If I were “queen,” that would be happening this fall!

Contact Carol West at [email protected]. West served on the Tucson City Council from 1999-2007 and was a council aide from

1987-1995.

CAROL WEST


Phone: (520) 295-4201Fax: (520) 295-40713280 E. Hemisphere Loop, #180Tucson, AZ 85706-5027 Internet: www.azbiz.com

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InsideTucsonBusiness.com

Next week’s poll: Should the City of Tucson partner with HSL Properties to renovate The Hotel Arizona?

• Letters to the editor — Opinions on business-related issues or coverage of is-sues by Inside Tucson Business are encour-aged and will be published. Submit letters to the editor via email at [email protected]. Letters also may be mailed to Letters to the editor, Inside Tucson Business, P.O. Box 27087, Tucson, AZ 85726-7087. Let-ters must include the writer’s name and telephone number. Inside Tucson Business reserves the right to edit and may not print all letters that are received.

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Do you believe the controversial “sweep” of HURF money is what caused local roads to fall into disrepair?

OPINIONGUEST OPINION

Why President Obama can’t control gas pricesPresident Obama is being lambasted by

Republicans for not doing enough to lower gas prices. And that can hurt him politically because according to a recent Reuters/Ipsos online poll, 68 percent of Americans disapprove of how he’s handling gas prices.

Republicans argue that Mr. Obama should do things like “drill, drill, drill,” build the Keystone pipeline and exploit America’s natural gas. John Boehner, Speaker of the U.S. House of Representatives, has accused Obama of leaving the national gas tank on “E,” and the gas-price issue has sparked a TV ad war between Republicans and Demo-crats. Meanwhile, Newt Gingrich promised $2.50 per gallon gas.

And so the president responded by asking Congress to give regulators more power to curb speculation in the oil market.

Such curbs might work but only if Congress agrees, the curbs are extensive, foreign oil markets follow suit with similar curbs and traders see them as serious and lasting. Even then, Obama will only be one of many actors involved.

Many of us fail to understand a near-max-im of gas prices: No one can really control them and certainly not an American president. And we should know why that is the case since gas prices impact us all and the global economy.

Let me tell you a little story.

I visited the headquarters of the Organization of Petroleum Exporting Coun-tries (OPEC) in May 2003. OPEC leaders were happy to tell me they had created a price range aimed at keeping oil prices

roughly between $28 to $35 dollars per barrel (in New York Mercantile Exchange oil prices).

Th ey showed me that they had kept oil prices in that price band for 95 percent of the days between May 2001 and May 2003. Th ey increased oil production when oil prices rose toward $35 dollars per barrel and decreased production as it approached $28 per barrel. Th is way they could make good money without having prices rise so high that others would have an incentive to develop alternatives to OPEC oil.

Fast forward a few years. Oil prices rocketed from $50 per barrel in February 2007 to over $147 per barrel in July 2008. So much for OPEC’s price band. If OPEC failed miserably to control prices over time, what can an American president do — or any actor for that matter?

It’s vital to understand why oil prices are so hard to control, if we are ever to going to get a grip on this issue. First, since 1983, oil has been traded on futures markets. Th e combined action of traders who buy and sell oil futures decides the price of oil at any time. If you think Obama or any actor can control these prices, that means you think they can control markets.

Markets are unpredictable, impacted by greed, speculation, fear, global events, and economics — almost none of which Obama can easily impact, even if he tries to nudge actors to put curbs on speculation.

Second, even if Obama could impact some of these factors, all of them combine to shape the actions of oil traders in ways that nobody can easily guess. In fact, some studies show that professional money managers are no better than monkeys in predicting such markets.

Th ird, Obama could aff ect longer-term oil prices by spearheading a serious comprehensive energy policy, and working with China and India to do the same. But traders probably won’t sell oil futures now for a policy that will take eff ect in three, fi ve or 10 years, unless perhaps it is constructed and marketed exceedingly well.

Fourth, short-term measures like the ones

Republicans are stressing won’t be enough to alter prices. For example, greater drilling in Alaska represents a drop in the global oil bucket. Moving America’s truck fl eet to natural gas — a smart move — could impact oil prices, if that move were truly comprehen-sive and went into eff ect sooner rather than later. But those things are doubtful.

Fifth, American presidents are not all powerful as they are sometimes viewed or portrayed to be. Obama, like any president, has to work with others and faces many obstacles, which check his infl uence. For instance, agreeing on a comprehensive energy policy is no easy task, much less getting China, India, and others to join.

America should certainly launch a major energy policy that includes moving to hybrid and electric vehicles, as well as exploiting domestic natural gas as a bridge to a cleaner future. But let’s not be deluded into thinking that any one actor, much less the president, can do much about short-run oil prices. It’s a near maxim of modern energy that he can’t do so.

Steve Yetiv is a professor of political

science at Old Dominion University in

Norfolk, Va. He is the author of “Th e Petro-

leum Triangle” and “Th e Absence of Grand

Strategy.”

STEVE YETIV


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