inside tucson business 8/24/12

Local real estate risesHousing sector scores better at mid-year

9

Ramping up revenueEller College finds financial sustainability

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Act IIAdvocates for film and TV industry incentive bill restart campaign

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Your Weekly Business Journal for the Tucson Metro Area

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PAGE 13

Mayor’s trip likely to result in meeting with Mexico’s new presidentBy Keith RosenblumInside Tucson Business

Most likely one of the most im-portant benefi ts of Tucson Mayor Jonathan Rothschild’s trip to Sonora and Mexico City this month was the pledge of an audience in March with soon-to-be President of Mexico, En-rique Peña Nieto.

Rothschild and his Phoenix coun-terpart Greg Stanton met with busi-ness and government offi cials with an immediate on eye helping to in-crease regional commerce, expedit-ing cumbersome border crossings and boosting tourism.

“What I found was just how much people appreciate the mayors of Ari-

zona’s two largest cities reaching out to them,” Rothschild said this week after his return. “We both came back believing that Arizona is going to be the benefi ciary of more tourism and commerce in the years to come.”

Th e specifi c date for a meeting with Peña Nieto was not set. Th e new president is due to be sworn-in to his six-year term on Dec. 1, after win-ning the country’s national election July 1.

Rothschild said he and Stanton were questioned by Mexicans about Arizona’s perceived hostility toward foreigners as a result of passage of the state’s anti-illegal immigration law, SB 1070.

“We made it clear that this law did

not refl ect the hospitable intentions of the people of Arizona,” Rothschild said.

Th e mayors visits to Guaymas and Hermosillo included a tour of Leoni Wiring Systems Mexicana, a global company that has operations in Tuc-son. Th ere Rothschild touted South-ern Arizona as a place where Mexican companies can buy raw materials and then use it as a logistics center for shipping fi nished products.

Th e mayor also met with Omar Canizales, president of Liga Mexi-cana del Pacífi co a baseball league that will bring four teams — from Hermosillo, Ciudád Obregón, Culi-acán and Mazatlán — to Tucson in October to play against prospects for

the Los Angeles Dodgers and San Di-ego Padres.

In Sonora, Rothschild’s group in-cluded Maricela Solis, city business advocate; Joe Snell, president of Tuc-son Regional Economic Opportuni-ties (TREO); Mike Hammond, presi-dent and managing shareholder of Picor Commercial Real Estate Serivc-es; and Fletcher McCusker, chairman and chief executive of Providence Service Corp. and a member of the Downtown Tucson Partnership.

On the Mexico City leg of his trip, Rothschild was accompanied by Brent DeRaad and Felpe Garcia, president and vice president, respec-tively, of the Metropolitan Tucson Convention and Visitors Bureau.

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Not Pictured: Lauren Rayner- *SUSD, Tameela Acosta- VUSD, Hoang Le- VUSD, Stephen Lee- VUSDKey: SUSD: Sunnyside Unified School District, ASD: Amphitheater School District, MIL: Military, *SUSD: Sahuarita Unified School District, FWSD: Flowing Wells School District,

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NEWS

Tucson looks at ways to stop city golf from losing more than $1M per yearBy Patrick McNamaraInside Tucson Business

With more than 40 golf courses in the metropolitan area, Tucson has long been considered a national capital of golf.

But the abundance of golf courses belies the suff ering of the industry generally and the looming troubles with the City of Tuc-son’s municipal golf operations.

Tucson City Golf, a division of the Parks and Recreation Department, has been los-ing money on a large scale for several years. In fi scal 2011, the city’s golf course fund ran a $1.2 million defi cit, requiring a subsidy from other city funds to make up the diff erence.

Over several years, the city golf fund has accrued nearly $7 million in subsidies, which accounting offi cials call interfund balances.

Th e city operates golf as an enterprise fund that is supposed to be self-sustaining. Th e growing annual losses have sparked a debate among elected offi cials and city management as how best to address the is-sue.

“Th e status quo is unacceptable,” said City Councilwoman Regina Romero.

Romero brought the issue of golf rev-enues to the table in April. Since then, the council has begun look for ways to make golf operations truly self-sustaining, to pay off the accumulated debt and develop a fi ve-year plan for city golf’s future.

“I want to be as fi scally prudent as pos-sible,” Romero said. “As I see it, nothing is off the table.”

Th e troubles with city golf appear to have started around 2002. Th at year nearly 300,000 rounds of golf were played on the fi ve city courses. In 2011, the number of rounds dropped to 193,000.

A decline in revenues followed. In fi scal 2007, city golf brought in more than $9.7 million in revenue. By fi scal 2011, that had fallen to slightly more than $7 million.

SEE GOLF PAGE 6Tucson City Golf has received nearly $7 million in subsidies since 2003. The city has established a committee of stakeholders to address the fi nancial issues and put together an action plan.

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Scottsdale fi rm buys semiconductor maker

Analog semiconductor manufacturer Apex Microtechnology, 5980 N. Shannon Road, has been reacquired by Scottsdale-based Alerion Capital Group for $26 million.

Alerion had sold the company fi ve years ago to Cirrus Logic Inc.

“It’s a very good, solid business,” said James Unruh, founding principal of Alerion. “I like the analog sector in the semiconduc-tor world.”

Although analog accounts for a smaller sector of the overall semiconductor market, the devices are used in a variety of business-es from cars to toys.

Apex currently supplies high-power mi-croelectronics for motor controls. Unruh said the company will look to expand into diff erent market sectors, including medical and aerospace.

Unruh said part of the appeal in buying back the company was the familiarity both with the product and the employees.

Alerion said it will retain Apex’s 80 em-ployees as well as its 50,000 square-foot fa-cility. Greg Brennan, president and CEO of Apex, was in charge of the company’s sales and marketing eff orts fi ve years ago when it was owned by Alerion.

Tire distributor building$19.5M center on south side

A North Carolina-based tire distributor-ship plans to build a 125,000-square-foot distribution center at the southwest corner of Valencia Road and Alvernon Way on the south side, according to Tucson Regional Economic Opportunities (TREO).

American Tire Distributors Inc., head-quartered in Huntersville, about 12 miles away from Charlotte, is spending $19.5 mil-lion to buy the property and build out the warehouse. Construction has already begun and is expected to be fi nished next month, according to TREO.

Th e facility will have 30 employees and be the company’s second such center in Ar-izona. Th e company has an operation and about 100 distribution centers nationwide. Th e Tucson center will serve the company’s retail tire clients in parts of Arizona, New Mexico and California.

American Tire selected the Tucson site be-cause of its logistical access, according to TREO.


NEWS

Supporters mount eff ort to revive fi lm industry incentives

By Patrick McNamaraInside Tucson Business

Undaunted after failing the last two years to get state lawmakers to approve of an in-centive plan that could lure movie and TV productions to Arizona, supporters of the idea are gearing up to launch a new cam-paign for the next Legislature.

“We have a legacy of fi lm in Arizona that’s just magnifi cent,” said Shelli Hall, director of

the Tucson Film Of-fi ce and one of the organizers behind the eff ort.

Hall and other supporters of the fi lm plan meet Aug. 16 in a public forum at the University of Arizona Center for

Creative Photography to discuss how that legacy could be reclaimed.

Th e heart of the proposal that supporters pushed in the last legislative session would provide fi lm and television production com-panies state tax credits of up to 30 percent of the costs they incur for production in Ari-zona.

Companies would have to spend at least $250,000 on a production before becoming eligible for the credit.

Th e dollar amount of credits the state would allow under the proposals would be capped at set levels. Th e Arizona Depart-ment of Commerce would determine the eligibility for credits based on a set of criteria that includes minimum in-state spending requirements and hiring Arizona residents for at least 50 percent of its full-time workers

while in production in the state. Productions also would be required to

acknowledge in the end credits that fi lming was done in Arizona.

In the coming legislative session, sup-porters plan to push a similar bill.

“Th e second this hits the streets it’s going to start creating jobs,” said Tucson City Coun-cilman Steve Kozachik, one of the panel par-ticpants and a supporter of the proposal.

Kozachik said the bill should be consid-ered a jobs bill fi rst and foremost because of the potential it has to bring outside money into the state and spur additional employ-ment.

“It will create thousands of jobs and it will put millions of dollars into our economy,” he said, adding that fi lm and television produc-tion helps support numerous support indus-tries from food service, lodging and building supplies, to name a few.

Arizona is one of 13 states without an ac-tive fi lm and television industry incentive program.

“One of the western states has no incen-tives because it has no income tax, there’s nothing to incentivize,” said Mike Kucharo, president of the Arizona Film and Media Co-alition, referring to Nevada.

As an example of how much incentives have played into the industry’s location choices, Kucharo said Arizona had fi ve fi lm studios at one time but today has none.

Meanwhile, the fi lm industry in New Mexico grew from nearly non-existent to be-coming a hub of motion picture and televi-sion production over the past decade follow-ing the adoption of an incentive program.

Hall also said the growth in incentive-off ering states has contributed to Arizona’s

decline in fi lm production. “When I started here, Arizona was No. 3 in

terms of amount of productions happening,” she said, referring to the 1990s. “Today, I’m sad to say, we’re in the bottom three at least in feature fi lm and television production.”

Hall said the state no longer funds the Arizona Film Offi ce, which in other states of-ten serves as the fi rst point of contact for fi lm and television productions seeking informa-tion about fi lming locations and the local business climate.

“It sends the wrong message to the indus-try,” Hall said.

In an eff ort to send the right message to lawmakers, attorney and lobbyist Barry Aar-ons said supporters of fi lm and the incentive proposals should attempt to educate people.

“Part of the anti-tax credit crowd’s objec-tion was that this was a refundable tax credit,” Aarons said.

But many of those lawmakers who op-posed the fi lm industry tax credit supported a similar one passed for the benefi t of semi-conductor manufacturer Intel, which is building a $300 million research and devel-opment facility in Chandler.

“Th at’s good news,” Aarons said, noting that it provides the opportunity to educate those lawmakers who opposed fi lm incen-tives.

Additional information on fi lm incentives can be found at the Arizona Film and Media Coalition website at azfi lmandmedia.org or the Tucson Film Offi ce at www.fi lmtucson.com.

Contact reporter Patrick McNamara at

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

BIZ FACTS

Arizona Film and Media Coalitionwww.azfi lmandmedia.org

Tucson Film Offi cewww.fi lmtucson.com

Lobbyist Barry Aarons, left, and Tucson Film Offi ce Director Shelli Hall discuss strategies to gain lawmaker support for a fi lm incentive bill. About 100 people showed up at the University of Arizona Center for Creative Photography for a discussion about attracting the fi lm industry.

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Fewer Tucsonans working, but unemployment rate falls

Th e number of Tucsonans in the work-force and the number of Tucsonans who actually have jobs is down and the statisti-cal combination of the two also results in a falling unemployment rate

Th e Arizona Offi ce of Employment and Population Statistics reports the unemploy-ment rate for the Tucson region in July was 7.7 percent, down from 9.0 percent in July 2011. Th e Tucson unemployment is not sea-sonally adjusted so year-to-year compari-sons are more valid than month-to-month comparisons. In June, the unemployment rate was 7.6 percent.

But the statewide unemployment rate, which is seasonally adjusted, also rose in July to 8.3 percent after holding at 8.2 per-cent for three consecutive months. It was at 9.6 percent in July 2011.

For the most part job losses were slightly less than what is typical for July, although the number of government jobs were 0.4 percent more than average mostly due to school districts cutting back over the sum-mer months.

All totaled, jobs in the government sec-tor were down 15.7 percent.

Th e biggest losses in the private sector were in leisure and hospitality where jobs were down 5.7 percent.

Th e Tucson region’s available workforce in July totaled 447,600, down 457,500 in July 2011. Th e number of Tucsons with jobs dropped to 413,000 from 416,300 in July 2011.

More Arizonans to travelover Labor Day weekend

Th e number of Arizonans expected to travel at least 50 miles away from home for the Labor Day weekend will be up about 3.4 percent to about 674,000, according to AAA Arizona.

Nationwide, the number expected to travel between Aug. 30 and Sept. 3 is fore-cast to jump 2.9 percent from a year ago to 33 million.

“Slight improvements in the economy are giving travelers across the country a boost to take advantage of the fi nal three-day week-end of the summer,” said Amy Moreno, di-rector of travel services for AAA Arizona. “Th is is especially true in Arizona, as the projected number of Labor Day travelers is set to outpace nationwide travel growth.”

Although more people are expected to travel, the distance they will travel this year is down 7.5 percent to an average of 905 miles and the amount of money spent on trips is down 14 percent to $596.

Th e research was done for AAA by IHS Global Insight.


NEWS

Head of Eller College pleased with fi rst year and school’s fi scal sustainabilityBy Clayton R. NormanInside Tucson Business

One year into his gig as dean of the Eller College of Management at the Uni-versity of Arizona, Len Jessup is manning the helm of a school that is entirely self-sustaining, highly ranked in multiple cat-egories and looking to grow.

Jessup took over the deanship in May 2011 after leaving Washington State Uni-versity where he had served as dean of the college of business and director for En-trepreneurial Studies and where he had worked since 2000. In an interview last summer, Jessup told Inside Tucson Busi-ness his main goals were to improve Eller’s national rankings against other business schools and to make the school generate enough revenue to pay its own way.

“It was a great year, I felt like we accom-plished a lot as a team, we made a lot of traction on a whole array of strategic ini-tiatives,” said Jessup when asked how he would describe his fi rst year at Eller. “We’d said we wanted to collectively help to bring everything up to the next level of qual-ity that the MIS (Management Informa-tion Systems) program and the McGuire Center (for Entrepreneurship) achieve and from that point of view, the external metrics, it was a good year we did really well in rankings in particular with the grad programs that we really focused on.”

U.S. News and World Report ranked Eller’s MIS program seventh and the en-trepreneurship program 10th among na-tional MBA programs in 2012.

Jessup said the school is working on to continue improving the MBA off erings in-cluding a pilot run of a new course this fall that pairs students in the MBA program at Eller with graduate students in other disci-plines to write business plans and develop commercialization strategies for emerging technologies developed at the UA.

Jessup said the school has already reached the other main goal that he came into the deanship with — ramping up rev-enue so the college would be self-sustain-ing. Besides improving revenue fl ows and fundraising, Jessup said, higher enroll-ment and rising tuition costs helped get the school into the black.

“All of that has kinda come together for the Eller College,” he said. “We just saw the data, we’re now self-sustaining. When you think about all the money that everybody brings into the building with the students and the tuition they bring into the build-ing with them, the grants the faculty bring in with them and our revenue generating programs like executive education, execu-

tive MBA, private giving and philanthropy — we’re now self-sustaining.”

Jessup said that from those diverse sources the school brings in somewhere between $80 million and $90 million in revenue. Th at includes the roughly $5 mil-lion in gifts and pledges that Jessup and his four-person fundraising team brought in this year. Th e school spends roughly $50 million to operate.

“Th is college doesn’t use any state tax dollars,” Jessup added. “We’re generating more than we use.”

In addition to fundraising Jessup said last year he intended to ramp up execu-tive education courses as a way to tap into a lucrative market. Executive education revenues at other major business schools bring in as much as $20 to $30 million annually at schools like the University of Texas at Austin and the University of Cali-fornia at Berkeley.

“If you look back over the last 10 years, we’ve averaged about $300,000 a year in revenue generation from those programs,” said Jessup who cited southern Arizona’s mild winters as a major advantage in at-tracting winter visitors for executive edu-cation programs. “We think that the mar-ket is there for us to be doing 10x of that. We think that could be a $3 million a year program for us.”

Eller already off ers executive educa-tion retreats at Loews Ventana Canyon resort and is in negotiations with Miraval and Canyon Ranch resorts to develop cur-ricula for programs there, Jessup said.

So with fi nancial self-suffi ciency out of the way and a year of strong national rank-ings for the program Jessup can focus on a

new initiative to try and export Eller’s en-trepreneurial spirit to the wider campus. Tech Launch Arizona was announced last year as a way to streamline and consoli-date the offi ces and processes of geting university-developed technology out into the marketplace.

“(Tech Launch Arizona) is all for the purpose of getting more technologies from the U of A either get licensed or to spun out as companies — kind of like Ven-tana Medical Systems — into the local and state economy to try and help the state to grow,” said Jessup.

Jessup headed a commission that spent the past eight months searching for a director for the initiative. He says an an-nouncement about the fi lling of that slot is forthcoming.

Parallel to the Tech Launch Arizona initiative are plans for a new building to house the Tech Launch Arizona offi ces as well as the McGuire Center for Entre-preneurship. Jessup said estimates for the cost of the building, which is currently in the concept stage, run around $45 million. Th e building, he said, will house all of the market end components needed to cre-ate what he calls a “pipeline” of product development. When talking about the fu-ture of that pipeline Jessup compares the potential in Tucson to places like Austin, Texas, and La Jolla, Calif., that have capi-talized on technologies emerging from universities nearby to develop resilient in-dustries and fuel economic growth.

“Somewhere like La Jolla, they’re en-gine is up and running, it has been for 20 or 30 years,” said Jessup who visited the community near San Diego several times in the past year. “So they’ve got his pipe-line just cranking, of drugs and devices and diagnostics and delivery and every-thing is just there it’s all been built up — the funding services, the professional ser-vices everything. So that pipeline never really missed a beat. During the downturn those were industries that kept going and people kept investing in them because people needed those medical services and treatments.”

All the elements are in place here in Tucson to create a pipeline of our own, says Jessup.

“We’ve got the makings for that here,” he said. “And you see evidence of it. We’ve got a great medical school and a couple of companies in diagnostics that are doing a good job up in Oro Valley and I think the same thing could happen around clean energy, we just have to keep building that ecosystem.”

LEN JESSUP

This Week’s Good News Mrs. America is back

We almost missed it, but guess who is back in Tucson right now. Th e Mrs. America Pag-eant. Yes, after leaving town last year for the venue of the Greenbrier in West Virginia, the pageant has returned to Loews Ventana Can-yon Resort where contestants from 50 states and the District of Columbia arrived earlier this week.

Th e fi nal pageant and crowing of the win-ner is scheduled for Wednesday (Aug. 29).

One of the pageants struggles has been get-ting TV coverage. Th anks to new technology anyone anywhere can see it via live streaming at www.mrsamerica.com/ .

Started in 1977, the Mrs. America Pageant honors married women. Th e winner of Mrs. America goes on to compete in a Mrs. World competition.

The Tucson

INSIDERInsights and trends on developing andongoing Tucson regional business news.

TREO fi lls vacuum With a multitude of chambers of commerce

and other organizations all fi ghting for survival in the Tucson region, there should be little sur-prise that Tucson Regional Economic Oppor-tunities (TREO) was quick to fi ll the vacuum when the Tucson Metro Chamber looked like it was dropping the ball on organizing a business coalition to develop incentives that might at-tract airlines to improve service to Tucson.

Actually Michael Guymon, vice president of regional development for TREO, helped devel-op the business air service survey that was con-ducted earlier this summer even though the eff ort was done under the auspices of the chamber.

In retrospect, Insider noticed that when the survey was unveiled Aug. 8, there didn’t seem to be anyone from the chamber taking charge. In fact, the closest person to representing the chamber was Bill Holmes, whose position as chief operating offi cer had been eliminated less than two weeks earlier.

Plastic bag survey Chances are you’ve heard the Tucson City

Council is considering an ordinance that would ban the use of plastic shopping bags.

Now Insider comes to fi nd they’re doing a survey. If you’re so inclined, go here — www.surveymonkey.com/s/plasticbagsurvey — and let them know how you feel.


NEWS

PUBLIC NOTICESSelected public records of Southern Arizona bankruptcies and liens.

FORECLOSURE NOTICES Crystal Homes Development LLC 4801 S. La Cholla Blvd. 85746Tax parcel: 119-41-283Original Principal: $240,000.00 Benefi ciary: Commerce Bank of Arizona Auction time and date: 11:30 a.m. Nov. 6, 2012 Trustee: Steven J. Itkin, Waterfall Economidis Caldwell Hanshaw & Villamana, 5210 E. Williams Circle, Suite 800

Crystal Homes Development LLC 375 E. Elvado Road 85706 Tax parcel: 138-17-035BOriginal Principal: $260,000.00 Benefi ciary: Commerce Bank of Arizona Auction time and date: 11:30 a.m. Nov. 6, 2012 Trustee: Steven J. Itkin, Waterfall Economidis Caldwell Hanshaw & Villamana, 5210 E. Williams Circle, Suite 800

Pamaha LLC 6444 and 6416-6418 S. 12th Ave. 85706 Tax parcel: 38-05-045J4 and 138-05-045H2Original Principal: $585,000.00 Benefi ciary: Wells Fargo Bank, Diamond Bar, Calif. Auction time and date: 11:30 a.m. Nov. 7, 2012 Trustee: Wade M. Burgeson, Engelman Berger, 3636 N. Central Ave., Suite 700, Phoenix

Neon Enterprises LLC 2602 N. Tucson Blvd. 85716 Tax parcel: 112-07-22805Original Principal: $952,000.00 Benefi ciary: US Bank, Oak Park, Ill. Auction time and date: 11:30 a.m. Nov. 16, 2012 Trustee: Margaret L. Steiner, Lane & Nach, 2025 N. Third St., Suite 157, Phoenix

TBM Equities LLC 919 N. Stone Ave., 10 W. Second St. and 928 N. Ninth Ave. 85701 Tax parcel: 117-02-191GOriginal Principal: $5,922,000.00 Benefi ciary: Pi’Ikea LLC, Kahului, Hawaii Auction time and date: 10 a.m. Nov. 15, 2012 Trustee: John W. Dorris, Dorris and Giordano, 2 E. Congress St., Suite 1000

DMJJJ Dental Inc. 3405 N. First Ave. 85719 Tax parcel: 106-04-142A7Original Principal: $210,400.00 Benefi ciary: Bayview Loan Servicing, Coral Gables, Fla. Auction time and date: 11:30 a.m. Nov. 7, 2012 Trustee: Jason P. Sherman, Shapiro Van Ess and Sherman, 3300 N. Central Ave., Suite 2200, Phoenix

PBI River LLC and PBI Oracle LLC 6760, 6770 and 6780 N. Oracle Road 85704 Tax parcel: 102-03-150F and 102-03-150GOriginal Principal: $2,050,000.00 subsequently raised to $2,880,000.00 Benefi ciary: National Bank of Arizona Auction time and date: 1:30 p.m. Nov. 13, 2012 Trustee: Craig K. Williams, Snell & Wilmer, 400 E. Van Buren St., Phoenix

LIENSFederal tax liens Taqueria Juanitos Mexican Fast Food and Antonia Suazo, 708 W. Grant Road. Amount owed: $2,123.59. RJ&J LLC and Jose Quiroz-Miranda, 3081 W. Idaho St. Amount owed: $34,825.45. Learning Bee Preschool & Day Care Center Inc., 3966 E. Camino De Palmas. Amount owed: $1,364.75. P&B Mechanical Inc., 3132 E. 45th St. Amount owed: $34,164.10.Van Rylan Associates, 6879 N. Oracle Road, Suite 111. Amount owed: $1,620.13. Plants of Distinction Inc., 6930 E. Tanque Verde Road. Amount owed: $11,794.79. Oasis RV Center Inc., 2111 E. Benson Highway. Amount owed: $10,031.27. Keila Enterprises LLC and William B. Womack, 18 S. Eastbourne Ave. Amount owed: $5,075.52. Val’s Trucking and Valentine Kozielski, PO Box 950, Sahuarita 85629. Amount owed: $4,984.22.Jeff’s Total Performance Inc., 219 W. Calle De Las Tiendas, Green Valley 85614. Amount owed: $7,265.88.

Despite the falling revenue, Tucson City Parks and Recreation Director Fred Gray said the division has been able to cut costs to alleviate the losses. Th e department has reduced its budget from roughly $11 mil-lion in fi scal 2008 to about $6.5 million this year.

“We’ve been aggressive in controlling costs, we can’t control how many people play,” Gray said.

A subcommittee of the city’s greens committee was assembled earlier this year to study the options. Th e group has been meeting twice monthly through the sum-mer to parse the issue and come up with a recommendation for the city council.

Subcommittee chairman Jeff Farkas said one issue has been discussed at length — marketing as a way to attract more golf-ers.

“Th at is one of my central focuses,” Far-kas said.

He said city golf has an annual budget of less than $30,000 for marketing the city’s fi ve courses.

Th at’s a sparse budget for marketing, ac-cording to Ben Blake, executive vice presi-dent of business development at Kemper-Sports, an Illinois-based golf management company that manages 35 municipal golf courses across the country.

Blake said it’s not unusual for Kemper-Sports to spend more than $50,000 a year on marketing for just one course.

But it’s not just traditional advertising, Blake said. Courses are now using social media as a way to attract players.

Marketing alone, however, isn’t likely to fi x the ongoing fi nancial issues Tucson City Golf faces.

“Even if we add another 75,000 rounds of golf, it still doesn’t solve the structural problems,” Romero said.

Other options for the subcommittee in-

clude changing the operating structure of city golf.

Other communities across the country have privatized golf operations. Th is has generally two forms — a standard service-provider agreement whereby a municipali-ty pays a management company to run golf operations or a long-term lease agreement, which a management company assumes all the costs and associated fi nancial risks and receives greater autonomy to set fees and other policies.

Blake said the fi rst alternative is what’s used most often but he said a lease agree-ment holds benefi ts for a municipality that a service provider agreement doesn’t. For instance, leases will generally require the service provider to invest a specifi ed amount in capital improvements.

“In that case, the management compa-ny assumes all the risk,” Blake said.

In either agreement, though, Blake said a management company like KemperSports brings to the table the expertise of running multiple courses across the country.

Other cities have gone to a nonprofi t model for course management. Often called the Baltimore model after the city where it originated, the municipal golf op-erations are run by a semi-autonomous nonprofi t group.

Although at this point no option has been ruled out for Tucson City Golf, neither of the alternative management structures would guarantee solvency.

“I wouldn’t say privatization is the in-stant answer,” said City Councilman Paul Cunningham.

Th e nonprofi t model has struggled in many places it has been adopted due to the waning popularity of golf.

It’s also the case that golf nonprofi ts haven’t been freed of political machina-tions, as evidenced by frequent squabbles

over funding and controling Baltimore Mu-nicipal Golf.

Private courses haven’t been spared from the loss of interest in golf as numer-ous courses have closed or fallen into in-solvency.

In the Tucson region, fi nancial issues plagued the Vistoso Golf Club for years. Forty-Niner Country Club also suff ered and at one points was cut off from water service for not paying its bills until it was sold this summer for about $500,000, a fraction of the more than $3 million sales price the former owners paid a decade ago.

Gray noted that two other private courses in Southern Arizona have recently closed, Santa Rita Golf Course in Corona de Tucson and San Ignacio in Green Val-ley. San Ignacio’s website says the course is scheduled to reopen in the fall following maintenance work.

Aside from golf, it’s also possible the city might discuss alternative uses for under-performing courses. Both El Rio, 1400 W. Speedway, and Fred Enke, 8251 E. Irving-ton Road, are performing below expecta-tions which has led to some talk of convert-ing them to parks.

“Based on water usage, parks are cheap-er to run and benefi t more people,” Romero said, adding that wants to ensure golf does not drain city resources away from other programs.

“It’s not an attack on golf, I don’t want to dismantle golf,” she said.

Th e subcommittee’s fi ndings likely will be a study session item at a city council meeting in October or November.

Contact reporter Patrick McNamara

at [email protected] or at (520)

295-4259.

GOLF CONTINUED FROM PAGE 3

Accelr8 arrival adds to vaunted Southern Arizona biotech ‘cluster’ By Patrick McNamaraInside Tucson Business

Th e arrival early next year of Accelr8 Technology Corporation adds another piece to the south-after biotech cluster for the Tucson region.

On Aug. 16, Accelr8, which is current-ly headquartered in Denver, announced its plans to relocate to the Pima County Herbert K. Abrams Public Health Cen-ter, 3950 S. Country Club Road, near the University of Arizona Medical Center - South Campus.

Offi cials with Tucson Regional Eco-nomic Opportunities (TREO) have long targeted biotech companies to develop the critical mass that will make a clus-

ter, bringing with it the synergies that will create more high-paying jobs and a ripple eff ect throughout the region. A viable cluster of like industries also benefi t the companies that comprise the cluster.

“It’s crucial, it really is,” said Accelr8 President and CEO Lawrence Mehren.

Crucial because the more biotech in-dustries in a region, the larger the talent pool becomes.

“What really drives the success in this industry is the science and the science is the people,” Mehren said.

Pima County plans to spend as much as $1.4 million to build wet-lab space in the building for Accelr8. Th e Arizona Com-merce Authority will provide $700,000 in

a low-interest loan and the Pima Health System transition fund will provide the re-mainder of the funding.

Th e company would lease the property at $9.25 per usable square foot, per year for an initial three-year period.

Accelr8 plans to fi ll 65 positions over the fi rst three years in Tucson with the po-tential to grow to more than 200 employees later.

Founded in 1982, Accelr8 trades on the New York Stock Exchange under the ticker symbol AXK.

Contact reporter Patrick McNamara

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


CONTINUED


4 p.m. and Sundays noon to 4 p.m.

FilmTh is week, in

addition to a pair of horror fi lms, the local fi lm landscape features two special event screenings. First the horror

fi lms, “Th e Apparition” and “Th e Day.” “Th e Apparition” deals with a scientifi c experi-ment on paranormal activity gone wrong and “Th e Day” features a post-apocalyptic world where an abandoned house is a trap for wandering survivors.

Also in theaters this week is “Premium Rush” with Joseph Gordon-Levitt as a bicycle messenger and “Hit and Run” with Bradley Cooper and Dax Shepard as former partners in crime now estranged.

At the Loft Cinema, 3233 E. Speedway, a full schedule of fi lms and special events are on tap. Starting with the return today (Aug. 24) of the fi lmed-in-Tucson indie fl ick “Goats” starring David Duchovny and Vera Farmiga. Th ere is also a special one-night screening tonight of the excellent docu-mentary “Paul Williams Not Dead.” On Saturday, the fan favorite “Found Footage Festival” returns with an amazing collec-tion of odd and unique orphaned video content culled from thrift stores nation-wide. Finally, the haunting documentary “Th e Imposter” opens this weekend and tells the tale of a missing child and the man who pretended to be what he wasn’t.

Contact Herb Stratford at herb@

ArtsandCultureGuy.com. Stratford teaches

Arts Management at the University of Arizona. This

column appears weekly in Inside Tucson Business.

HERB STRATFORD

ARTS & CULTURE

I don’t often have a lot of news to report about puppets — even though Tucson is home to a world-class puppet community — but that changes this week due to a special event at 7:30 p.m. Saturday (Aug. 25) at the Rogue Th eatre. Th e Tucson puppet company, Puppets Amongus, headed by artist Matt Cotton, has created many special puppets for Rogue Th eatre performances over the years as well as for the annual All Souls Procession. Now Puppets Amongus has been invited to travel to Tucson’s sister city, Almaty, Kazakhstan, for the World Puppet Carnival Sept. 20-23, and a performance of “El Sueño de Frida” (“Th e Dream of Frida”) will serve as a fundraiser to help support the trip.

Dealing with the subconscious of Mexican artist Frida Khalo, and the colorful day of the dead trappings, the show is most appropriate for mature audiences due to artistic, puppet romance scenes. However, depending on their age, there are children who can enjoy the show.

Tickets are $20 each and can be pur-chased through the Tucson-Almaty Sister City Comittee by email at [email protected] or (520) 628-1309. Tickets can also be purchased at the door, cash or check only.

Th e Rogue Th eatre is at 300 E. Univer-sity Blvd. in the Historic “Y” building.

MuseumMini-Time Machine Museum, 4455 E.

Camp Lowell Drive, celebrates its third anniversary with free admission Sept. 1. Th e museum has seen 115,000 visitors since it opened. With 275 miniature houses and roomboxes along with changing special exhibits, the collection is unique in the Southwest. Th e museum is open Tuesdays through Saturdays from 9 a.m. to

Puppet performance to raisemoney for Kazakhstan trip

OUT OF THE OFFICEMEALS & ENTERTAINMENT

High-tech liquor shopping at newest Total Wine store

Total Wine & More has opened its second location in the Tucson region, and 84th store nationwide, in the old Border’s store at Park Place Mall.

What makes this store diff erent, is that it’s Total Wine’s fi rst “next generation” store in the Southwest. By next generation they mean that it includes more technology in the shopping experience.

For instance, they have iPads in the tasting bar allow customers to use an app that recommends specifi c wines to pair with foods. You can print the recommenda-tions right there or have the results emailed to yourself.

Th e store has Wi-Fi and they’re confi -dent enough about their pricing that they even encourage customers to compare shop using smartphones or other connect-ed portable devices.

Th ere’s also an education center for classes on beer, wine and spirits. Nonprof-its can book the education center at no charge to host organized meetings.

Th e 26,000 square-foot store features more than 80,000 wines, 3,000 spirits and 2,500 beers.

Total Wine is an East Coast-based chain headquartered in Potomac, Md.

Its fi rst Tucson store is at 4370 N. Oracle Road, at the southeast corner of Oracle and Wetmore.

• Total Wine & More, 5870 E. Broadway in Park Place Mall — www.totalwine.com/ — (520) 745-0540

Azul makeoverAzul Restaurant & Lounge in the Westin

La Paloma Resort and Spa has revitalized its lunch, lounge and dinner menus. Although responsible for all of the food at the resort, executive chef Serge Delage has taken a renewed interest in Azul.

Items include a tomato and fresh buff alo mozzarella salad with mari-nated olives, basil and balsamic reduction; a Peruvian shrimp ceviche with avocado, jalapenos and cilantro; jumbo scallops

with fried crispy onions and a citrus butter reduction; a grilled double pork chop with a sour cherry bourbon glaze; a beef rib eye steak with shallot herb butter; and a Provencale-crusted rack of lamb. Side dishes include chipotle macaroni and cheese.

Azul also has a happy hour from 5-7 p.m. weekdays in the lounge featuring signature martinis, house wine and well drinks for $5. Drafts are discounted by $2 and any of the small plate appetizers are half price.

Th e Azul changes are just the beginning of things to come at La Paloma as part of a massive $30 million rejuvenation of the resort under its new ownership group.

Every one of the resort’s 487 rooms will be made over.

• Azul in the Westin La Paloma Resort and Spa, 3800 E. Sunrise Drive — www.azullapaloma.com/ — (520) 742-6000

Contact Michael Luria at mjluria@

gmail.com. Meals & Entertainment appears

weekly in Inside Tucson Business.

MICHAEL LURIA


TRAVEL

More of what businesses want in air service By David Hatfi eldInside Tucson Business

Th e people tasked with trying to improve air service at Tucson International Airport say they weren’t surprised by the overall re-sults of an air service survey of businesses in the region. Wanting more fl ights to the Los Angeles and San Francisco Bay areas as well as nonstop fl ights to Washington, D.C., and New York have been long-standing requests.

But Mary Davis, senior director of business development and marketing for the Tucson Airport Authority, and Jamie Kogutek, an air service consultant hired by TAA, mined a few nuggets from the survey released earlier this month that could help defi ne future needs.

For instance:• While United Airlines is the No. 3 air-

lines at the airport, accounting for 13 percent of passengers at the airport last year — and now up to 14.5 percent so far this year — four other airlines have as good or better relation-ships with businesses in the Tucson region. Kogutek explained a relationship includes frequent fl ier memberships or a possible contract with the airline.

• Business travelers who frequently fl y to cities in Mexico tend not to use Tucson’s air-port for any of their travel. Th at may be due to those passengers being more accustumed to other airports so those airports are more top of mind, Kogutek said.

• After Washington, D.C., and New York, the next highest ranking new destination business travelers want from Tucson is Port-land, Ore. Two other destinations that got signifi cant responses were Miami or south Florida in general and Sacramento, Calif.

• A couple of other destinations that ranked surprisingly high on the survey were Santa Barbara, Calif., and Montgomery, Ala. In both cases, virtually all of the respondents said they originated their trips in Tucson.

Davis and Kogutek said they have meet-ings alredy scheduled with executives of air-lines to sell their case for improving airline service at Tucson International.

In the case of United Airlines’ Kogutek said one argument that can be made is that the airline and Tucson would mutually ben-efi t from improved marketing of its Mileage-Plus frequent fl ier program. Despite the fact that it has the only nonstop fl ights to San Francisco, United ranks third for relation-ships with travelers to the Bay Area.

Kogutek said American Eagle’s introduc-tion of nonstop fl ights to LAX in April 2011 was likely infl uenced by American’s strong busi-ness relationships in Tucson, despite the fact that United had a long history fl ying the route.

As for Mexico, Kogutek said there is high interest in air service to Sonora by compa-nies that conduct business there and much of it is generated by trade missions. While more defi nitive research needs to be done he said Tucson could become an air gateway to Sonora.

Despite the lack of nonstop air service, 81 percent of business travelers say they fl y out of Tucson to Washington and 73 percent choose Tucson for their trips to the New York area. Kogutek said a separate study done by his fi rm, Sixel Con-sultng Group, found 82 percent of all passengers from the Tucson area bound for Washington use the local airport but that 66 per-cent of those going to New York do. Th at’s indicative of a higher number of leisure travelers most likely book-ing fl ights from other airports due to the perception of lower airfares.

For her part, the airport’s Davis said she is meet-ing with represen-tatives from the University of Arizona and other large employers to get a better handle on how they book their travel. For instance, she said, that while the UA has a checks-and-balance system it is highly decentralized.

“At the end of the day, our job at the air-port is to connect the customer with the sup-plier,” Kogutek said of his mission. “We’re the middleman in this process. But as part of that we need to make sure the suppliers (the air-lines) know there is demand.”

American in bankruptcy Tug-of-war battles on multiple fronts con-

tinue in American Airlines’ bankruptcy case. US Airways executives have promised vari-

ous offi cials in the Phoenix area that the airline intends to maintain Sky Harbor as a hub airport if it’s successful in merging with American. But those Phoenix offi cials as well as the commeri-cal real estate industry is becoming resigned to the fact that US Airways’s nine-story headquar-ters building in Tempe will likely be down-sized, if not vacated. US Airways has said all along the combined airline, which goes by the name American, would take over American’s headquarters in Fort Worth, Texas.

US Airways currently has 50 gates and 265 daily departures at Sky Harbor, making it the busiest airline at the airport. For Tucsonans fl ying US Airways, the fl ight to Phoenix is a necessary endurance to reach the rest of the system but the airline’s market share has been dropping this year. Th rough seven months of 2012 US Airways has accounted

for 11.1 percent of Tucson’s traffi c, down from 12 percent in the same time a year ago.

M e a n w h i l e American has gown to 23.6 per-cent market share, from 22.2 percent a year ago. American is Tucson’s second busiest airline fl y-ing to its hubs at D a l l a s - F o r t Worth, Chicago O’Hare and LAX. US Airways ranks fourth in Tucson.

In bankruptcy in court, Ameri-can is still trying to work through revisions in its la-bor union con-tracts. And union leaders were maintaining their support for a merger.

Among air-lines that have been identifi ed as potential merger

partners, JetBlue Airways took itself out of contention this week. In an interview with Bloomberg, JetBlue CEO Dave Barger said his airline wasn’t interested in a merger with American or any other airline.

Mesa to Hawaii Mesa Gateway Airport is attracting more

more airlines of the ultra-low cost carrier mod-el — we’ll sell you a seat for cheap but if you want anything else, there’s a charge for that.

Th is week Allegiant Air announced it will up the ante with nonstop fl ights from Mesa to Honolulu on Mondays, Wednesdays and Fridays starting Feb. 8. Th e Las Vegas-based airline will use 223-seat Boeing 757s on the fl ights to Hawaii.

Until Tuesday (Aug. 28), Allegiant is off er-ing fares to Hawaii starting at $199 each way from Feb. 8 through April 16.

Nonstop fl ights to Hawaii from Phoenix aren’t new. Hawaiian Airlines fl ies from Sky Har-bor to Honolulu and US Airways fl ies to Hono-lulu, Kahului, Maui, Lihue, Kauai and Kona on the Big Island. Mesa offi cials are touting Alle-giant’s arrival as the fi rst low-fare fl ights.

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.

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BIZ FACTS

Since the Tucson Airport Authority is restricted in how it can use money to entice airlines to improve service at Tucson International Airport, Tucson Regional Economic Opportunities (TREO) has taken over responsibility for organizing a business coalition that will work to improve air ser-vice, possibly including fi nancial incentives to airlines. Laura Shaw, senior vice president of mar-keting and communications for TREO, said they’re still fl eshing out the membership to include a broader range of major busi-nesses. So far, she said, there is suffi cient representation from small businesses, vari-ous organizations and the tourism sector.Michael Guymon, vice president of regional development for TREO, is leading the busi-ness effort. Contact him at [email protected].

TUCSON INTERNATIONAL AIRPORT 2012 PASSENGER STATISTICS

The number of passengers going through Tucson International Airport in July was down 2.6% to 285,869 from 293,565 in July 2011. Available seat capacity was down 10.6% to anverage of 5,695 outbound per day. Through seven months of 2012, passenger numbers are down 0.1%. This chart shows each airlines’ passenger totals and market share for the fi rst seven months of 2012 compared with the same months of 2011.

Jan.-July 2012 Jan.-July 2011 Change

Airline Nonstop destinations

Passengers Market Share

Passengers Market Share

Passengers %

Southwest 735,666 34.0% 733,514 33.9% +2,152 +0.3%Albuquerque, Chicago Midway, Denver, Las Vegas, Los Angeles, San Diego

American 510,755 23.6% 481,711 22.2% +29,044 +6.0%Chicago O’Hare, Dallas-Fort Worth, Los Angeles

United (Continental)

314,595 14.5% 299,252 13.8% +15,343 +5.1%

Denver, Houston Intercontinental, Los Angeles, San Francisco

US Airways 241,089 11.1% 259,946 12.0% -18,857 -7.3%Phoenix

Delta 236,626 10.9% 230,627 10.6% +5,999 +2.6%Atlanta, Minneapolis-St. Paul, Salt Lake City

Alaska 72,324 3.3% 62,959 2.9% +9,365 +14.9%Seattle

Frontier 53,796 2.5% 98,755 4.6% -44,959 -45.5%Service discontinued as of May 18

Total 2,164,851 2,166,764 -1,913 -0.1%

Source: Tucson Airport Authority

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


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Non-stop destinations. Connections around the world.Alaska, American, Delta, Southwest, United, US Airways

Broadway Plaza sale expected to seed other opportunities

Sahara Apartments student housing complex in default

Ohio-based investors paid $12.7 million for Broadway Plaza.

The Sahara Apartment complex faces a trustee’s sale in November.

By Roger YohemInside Tucson Business

In an eff ort to maximize long-term op-portunities in commercial real estate, Lar-sen Baker has sold the massive 11.7-acre Broadway Plaza complex for $12.7 million to an Ohio-based real estate investment trust.

Th e center at the northwest corner of East Broadway and Pantano Road has more than 80,000 square feet of space and is an-chored by major retailers including PetS-mart, Sprouts Farmers Market and Table Talk.

“We sold a solid, stable, mature property because right now, there are many good opportunities for us to buy distressed prop-erties and turn them around. Th at’s what we’re good at,” said Andy Seleznov, direc-tor of leasing for Larsen Baker. “We already have a few properties in line to replace it, that we would go out and buy and fi x them up. Th at creates long-term value.”

Th e plaza’s four buildings were con-structed from 1980 to 1982 and carry ad-


Seven years after completing a multi-million dollar renovation, the Sahara Apart-ments student housing complex, 919 N. Stone Ave., has fallen into foreclosure. It is set to be sold at public auction in Novem-ber.

Originally built as the Sahara Motor Inn about 50 years ago, it was closed in 1989 and re-opened in 2005 as the Sahara Apart-ments after a three-year, $7 million rede-velopment modernization. Th e property’s buildings were gutted and converted into dorm-style apartments with state-of-the art technology and lifestyle amenities to appeal to Pima Community College and University of Arizona students.

All 139 apartments are furnished. In ad-dition, a free-standing hotel building fea-tures 30 studio apartments.

According to public records, owner TBM Equities LLC of Tucson is delinquent on an original principal balance of $5.9 million. Th e notice of trustee’s sale lists three parcels on the 3.5-acre site: 919 N. Stone Ave., 10 W. Second St. and 928 N. Ninth Ave.

Th e current benefi ciary is Pi’Ikea LLC of

dresses from 7701 to 7865 E. Broadway. Th e plaza was sold by Broadway Powercenter Group LLC, an affi liate of Larsen Baker, 6298 E. Grant Road, to Phillips Edison ARC Shopping Center REIT Inc., Cincinnati.

Th e plaza’s largest building is about 57,000 square-feet and the smallest is 6,200 square-feet. Th e two mid-sized buildings are about 10,000 square-feet each. Larsen Baker acquired the plaza in 1997.

Kahului, Hawaii, successor-in-interest to West CRE Venture 2010-2 LLC and the Fed-eral Deposit Insurance Corporation.

As student housing, the apartment com-plex provided free shuttle service to the Uni-versity of Arizona campus. Th e site’s ameni-ties include a pool, spa, mini-movie theater, computer center, game room and electronic security locks and surveillance cameras.

Th e law fi rm of Dorris & Giordano, 2 E. Congress St., is handling the trustee’s sale. Th e public auction is scheduled for 10 a.m. Nov. 15 in the law fi rm’s offi ces.

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WOMEN IN BUSINESS

Mars and Venus, guys and gals; what it takes to work together

Th ere’s always plenty of buzz about how men and women are diff erent but how has it impacted your business? Many busi-nesses are comprised of husband-and-wife owners. If this is your business model, are you using those diff erences to strengthen your business and reach more clients?

I worked with my spouse for over 20 years, not always the easiest fate. When a client, friend or relative tells me they are thinking of working with their spouse, I look at them, giggle and say “Don’t do it”!

I am half serious and half kidding. I wonder how I can convey to them what is really involved. How do I explain that they have the opportunity to enhance and strengthen their relationship but at the cost of letting go of some role playing and pre-conceived ideas? Many of you business owners working with your spouse know what I mean.

I have said that the yin and yang energy balanced out our fi rm and provided diversity for the clients. It wasn’t always that way; at fi rst it felt like we were totally opposing forces. On the surface, yin and yang appear as opposites but actually are complementary forces.

Yin and yang have been compared to the feminine and masculine, the light and dark and described as the sun moving across the sky, gradually trading places with each other, revealing what was unseen and hiding what was originally seen. Yin and yang combine into a greater whole. Working with your spouse can also be like that. Don’t work around the diff erences, instead work with them and combine your talents into a greater whole.

Men and women tend to approach things in a diff erent manner and do things for diff erent reasons. Most likely you are even in business for diff erent reasons. Sure, you both want to have a successful business and make money. But have you ever asked your spouse why they are in business? What is their defi nition of a successful business? Th e answers may surprise you.

I’ve joked that before people get married they should paint or wallpaper a home. If you can do that and are talking to each other after the home improvement project, you are on your way to a lasting relation-ship. Usually the “divide and conquer” process works. You do the trim and I’ll paint the walls. I’ll roll the paste while you cut the wallpaper sheets. You defi ne your roles, strengths and weaknesses and divide the tasks at hand. It’s the same in your busi-ness. Defi ne your roles in the business and try not to default to the roles you play in your personal life.

How have you assessed your true strengths and weaknesses at the workplace? You and your spouse know each other well. You under-stand the weak-nesses they are not so happy about and the strengths

they have not acknowledged. Don’t push your spouse to complete a task where they may be weak. Strengthen that weakness or fi nd another way. Also, complementing your spouse’s strengths may help your part-ner discover those hidden talents or the confi dence to express them.

So here’s an exercise with a set of questions to help you identify possible misconceptions and hidden talents.

What are the top fi ve reasons you are in business?

What are the top fi ve things that you contribute to the business?

What are three things you would like to change in the business?

What are three things about your business you are proud of?

What impresses you the most about your spouse in the business?

What are your spouse’s top three strengths in the business?

What are your spouse’s top three weaknesses in the business?

Each of you should answer the ques-tions in writing, then exchange papers and read your spouse’s responses.

Here are the ground rules: • Read your responses in separate rooms. • Be honest but respectful. • Don’t be judgmental.• Don’t jump to conclusions. Make

notes as needed so you may ask for clarifi cation when you meet.

• Remember this is in relationship to your business, so try to keep the personal life out of the discussion.

After you have both completed your questionnaire and have read your spouse’s responses, meet in a professional setting with a business meeting tone. Discuss what you learned, what you can change and how you can become a combined force of success!

Contact Deb Alter, Alter & Alter CPA’s, at [email protected] . Alter is immedi-ate past president of the Greater Tucson Chapter of the National Association of Women Business Owners (NAWBO), whose members contribute this monthly column.

DEB ALTER

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PROFILE

Exotic pichuberries coming from Peru By Adam BorowitzInside Tucson Business

An exotic berry with striking health ben-efi ts is making its way into the American market through a company created in a Tucson college classroom.

University of Arizona researchers even say the orange, marble-sized berries can stimulate the body’s natural defense system to such a degree that they could be a valu-able tool in the fi ght against cancer and other diseases.

Th e berry in question is the fruit of the plant physalis peruviana. Indigenous to South America, it’s known as the Cape Gooseberry in Europe and by other names in countries around the world, where it is revered for fl avor and health-promoting properties.

It is still relatively unknown in the United States, but a company created at the UA’s Eller College of Management is looking to change that.

Michael Popescu, general manager of Mojo Tree Farm, says the company’s busi-ness team has worked tirelessly to introduce the berry to local consumers, recently mak-ing a deal with a major grocery store chain that will give the fruit its best exposure yet.

Th e fruit is currently available only at farmers’ markets in Tucson, Phoenix and several California cities, but this month all Whole Foods Market stores in Arizona will start stocking the berry and juice made from the berries. Th e berries will retail for $4 per container and the juice will fetch about $3.50 per 16-ounce bottle.

Popescu created the company in 2010 as part of his Master’s thesis at the McGuire Center for Entrepreneurship at the UA. Th e business was moved to Phoenix to take ad-vantage of distribution opportunities avail-able there.

Popescu says the fi rst step was to rebrand the fruit the “Pichuberry,” linking it to the famed mountain city Machu Picchu of its Pe-ruvian homeland. Th e company then set up stands at farmers’ markets in Tucson and Phoenix and got busy gathering feedback and educating the public about the product.

“We found out that the farmers’ markets are a good place to interact and get real-time feedback from diff erent demograph-ics,” said Popescu. “People go to farmers’ markets to learn and fi nd new things, so that’s helped us out a lot.

Pichuberries are the company’s fi rst product, but the company plans to work with other little-known foods from around the globe as well.

“Mojo Tree Farm is basically the parent company for small products like the Pichu-berry,” said Popescu. “Once we expand and grow it will be responsible for multiple unique treasures from around the world.”

Th e company also established a website

— www.pichuberry.com — where consum-ers can fi nd everything from recipes for Pi-chuberry compote to scientifi c papers detail-ing the fruit’s history and nutritional value.

Nutritional analysis have shown the ber-ries to be extremely high in vitamins A, B and C. Th ey are also packed with other sub-stances that could make them useful in ap-plications ranging from skin creams to man-aging diseases such as cancer and diabetes.

Mojo Tree Farm is currently working with Dr. Donna Zhang at the UA College of Pharmacy to pinpoint the berry’s cancer-fi ghting potential.

“What we are looking at, basically, is the ability of the Pichuberries to enhance the body’s defensive mechanisms,” said Zhang. “What we’ve been looking at specifi cally is their ability to activate what is called the NRF 2 pathway, which regulates cellular de-fense mechanisms.”

Zhang said her research has shown the berries to be extremely eff ective at activat-ing that cellular pathway, which makes them useful in ridding the body of carcino-gens and other harmful substances.

For now, Popescu is focusing on building domestic demand for the berries. He cur-

BIZ FACTS

MojoTree Farmwww.mojotreefarm.com/www.pichuberry.com(520) 261-0486

rently imports the berries from South Amer-ican suppliers, but plans to ramp up domes-tic greenhouse production in Tucson and other cities as demand grows.

Mojo Tree Farm is also working with the Phoenix-based distributor Stern Produce to integrate the berries into school-provided student meals at school districts around the state.

“One of our background initiatives is childhood nutrition, and this food has re-ceived a very positive response from kids when it comes to not only the taste, but the appearance,” said Popescu, adding that the berry has a papery husk that make it look “kind of like a candy with a wrapper on it.”

“So it’s a superfruit that is liked by kids,” said Popescu. “Finding something that tastes good, looks good and is liked by kids is rare. We’re very excited about that.”

Keith Green represents the health qualities of the

pichuberry at a farmers market at St. Philip’s Plaza.

Adam

Bor

owitz


How have we managed to achieve the highest rating by Bauer

Financial* for the past six years? Well, we work hard at creating

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MEDIASOCIAL MEDIA IN THE WORKPLACE

Social media accounts at work — without a policy it gets murkyMany of us use social media throughout

the day at work. We use it to stay connected to our work colleagues and, of course, to our personal friends. Th ese days, more and more employers are crossing the line when it comes to leveraging the equity employees have built through their social media accounts.

What happens when an employee’s bonus structure is tied to the company’s gross profi ts, the employee uses her accounts to promote the company, gets hurt and takes time off to recuperate and the company then begins impersonating

her to continue the momentum she has built on social media?

A case with similar facts is pending in federal court right now. While we wait for the case to resolve,

circumstances like this are not hard to imagine and employers should be thinking about these issues as they develop social

media policies. What can human

resources leaders learn from this suit when it comes to establishing social media policies at their organization?

• Social media policies must address the owner-

ship of social media forums (Does the employee or employer own the forum and the content posted on the account?).

• Policies need to explain who owns the platforms in a variety of circumstances, including when the employer asks the employee to use his or her personal account to market for the employer or, in contrast, when the employer asks the employee to create a social media account for the employer.

• Th e policies, among other things, should explain that the employee must provide the employer with the login information once the account is created and that the employer owns both the account and all content posted on the account.

What are some of the HR challenges associated with creating such policies?

• As some of our previous social media articles explain, businesses need to take care not to run afoul of the National Labor Relations Act (NLRA).

• Th e National Labor Relations Board

(the federal government agency charged with enforcing the NLRA) has aggressively pursued employers who implement overbroad social media policies.

What advice do you have for HR leaders on the topic of creating social media use policies to avoid such lawsuits from occurring?

• A well-written social media policy cannot necessarily avoid litigation but it certainly can help to put a swift end to the litigation once it commences if the policy, which should be signed by the employee at the start of employment or once the policy is implemented, directly addresses ownership of social media forums.

• Th e policy must balance prescribing employee conduct while not off ending employee rights under the NLRA.

• Additionally, a policy might not be the answer for some employers. Th e better approach would be to enter into a contract with the employee regarding the ownership of the social media accounts. Th en, the employer could sue the employee for breach of contract over the ownership issue.

Contact John Balitis, who practices in

the labor and employment area with

Fennemore Craig, at [email protected].

Contact Carrie Pixler-Ryerson, who practices

in the area of appeals as well as in labor and

employment at Fennemore Craig, at

[email protected].

JOHN BALITIS CARRIE RYERSON

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LOOK FAMILIAR?BEFORE AFTER

MEDIATucson News Now games Google search ... for awhile By David Hatfi eldInside Tucson Business

Th e generic term is search engine optimi-zation (SEO), but let’s face it, it’s really about gaming Google. Specifi cally, getting Google’s search engine to prominently display your company’s website.

No doubt anyone responsible for a website has received an email from someone purport-ing to be an expert at SEO who will help you move to the top.

Th e fact is Google keeps its search algo-rithms closely guarded so even the experts are making educated guesses at best on how get the most of its search engine.

So congratulations go out this week to the folks at Tucson News Now for beating the sys-tem. Th e website for the combined news gath-ering organization of both KOLD 13 and KMSB 11 has cracked the code.

For at least two weeks anyone using a Google news search and keying in the word “Tucson” came back with a list of the latest updates from Tucson News Now — regardless of whether the news actually had anything to do Tucson.

For example, a search Tuesday morning this week turned up these results on the fi rst two pages:

• Tucson News Now’s report on Phyllis Diller’s death.

• Tucson News Now’s report on Diana Nyad being pulled from the water in her bid to swim from Cuba to Florida.

• Tucson News Now’s report on Rep. Todd Akin, R-Mo., asking forgiveness for his com-ments on rape and abortion.

• Tucson News Now’s report on Republi-can vice presidential candidate Paul Ryan’s education plan.

• Tucson News Now’s report on Wynonna Judd’s husband having his leg aputated after a motorcycle crash in South Dakota.

• Tucson News Now’s report on a wildfi re in northern California.

• Tucson News Now’s report on an Arkan-sas state crime lab report that a man shot him-self in a patrol car after being arrested and handcuff ed.

• Tucson News Now’s report on a CSX train that derailed outside Baltimore.

• Tucson News Now’s report on federal of-fi cials shutting down a central California slaughterhouse.

• Tucson News Now’s report on Shawnee County District Attorney Chad Taylor’s deter-mination that private state dinners held by Kansas Gov. Sam Brownback were not a viola-tion of the state’s open meeting laws.

Besides Tucson News Now, the only other thing all of those news stories had in common is that not one of them occurred or had any-thing directly to do with Tucson, which most likely is not what a person using a Tucson key-word news search wants.

It was not until the third item on page 3 that Tuesday’s search results off ered up a story from some organization than Tucson News Now. It was an Associated Press report from TriValleyCentral.com — the website of seven jointly owned newspapers in Pinal County — about the fi rst ever White House “kids state

dinner” that included 11-year-old Tucsonan Haile Th omas (last week’s “Good News” item in Inside Tucson Business).

But then Tucson News Now results re-sumed dominating all results until the sec-ond-to-last item on the fi fth screen when a Phoenix Business Journal report on the sale of Apex Microtechnology showed up.

News searches on the keyword Tucson in Ya-hoo and Bing brought up diff erent results, though neither ranked timeliness very high. Former U.S. Rep. Gabrielle Giff ords’ move back to Tucson and shooter Jared Loughner’s guilty plea were the top two Yahoo results and both stories were more than a week old. A search of results only from today resulted mostly in press releases.

As for Bing’s results, the story about the Apex Microtechnology being sold was the only thing newer than 15 hours old. Th e next newest story, that 15-hour old report, was from, sur-prise, Tucson News Now. At least it was a local story on on door-to-door sales scams.

For her part Debbie Bush, vice president and general manager of KOLD, had not done a Google news search until asked about it Tuesday afternoon. Her fi rst reaction when she saw the results was to chuckle. She said they had trouble getting Google to recognize Tucson News Now when the new branding

launched back in February.And, as we all know, Google won’t let Tuc-

son News Now’s good fortune go on forever. Kat Eller with Google sent an email saying,

“Th is is a known issue that the team is investi-gating. We hope to have a fi x in place in the next couple of weeks.”

Names in news Talk about climate change, Alexis Fernan-

dez is about to see about as big a change as is possible in the U.S. when she arrives Sept. 4 to be a general assignment reporter at KGUN 9. She is a native of Fairbanks, Alaska, and up until now has spent most of her life in that state. She’s coming to Tucson from the CBS af-fi liate in Anchorage where she has been a re-porter and weekend anchor. Before that she was at the NBC affi liate in Fairbanks. Fernan-dez earned her bachelor’s degree from the University of Alaska at Fairbanks.

Former KVOA morning show co-host Josh Benson has moved on again. He starts Mon-day as the morning co-anchor for WFOR, the CBS-owned station in Miami, Fla. Since leav-ing Tucson two years ago, Benson has been in Orlando, Fla., where he has anchored evening newscasts on both the ABC affi liate and a sis-ter independent station.

Does the name Dusty Chandler ring a bell? He was a radio personality for 11 years, most re-cently at KIIM 99.5-FM and as program director of what was “Bob” KSZR 97.5-FM, until he left last November. He has dropped his on-air moni-ker and is now going by his real name, Jon Lurie. He owns Fruit Shack Smoothies & Yogurt in Oro Valley and just recently joined Long Realty.

Contact David Hatfi eld at

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

Inside Tucson Media appears weekly.


SPECIAL EVENTS

SAHBA Fall Home and Garden ShowFriday (Oct. 5) through Sunday (Oct. 7)10 a.m. to 7 p.m. Friday and Saturday and 10 a.m. to 5 p.m. SundayTucson Convention Center 260 S. Church Avenue Contact: Amy McReynolds [email protected] or (520) 795-3025$8 for adultswww.sahbahomeshow.com8th Annual Tucson Record ShowSunday (Nov. 11)9 a.m. to 3 p.m.Las Cazuelitas Event Center

CALENDAR

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Save Money, Energy and the Environment

Natural Gas Equipment Rebate Amounts up to 50%Clothes Dryer $30Smart Low-Flow Showerhead $20Storage Water Heater $1,100Tankless Water Heater $450Griddle $600Fryer $1,350Combination Oven $1,100Conveyor Oven $900Dishwashers $750 - $3,000Custom Rebate $1/therm

Solar Water Heating Systems Rebate AmountCommercial water and pool heating systems $15/therm up to 50%

1365 W. Grant Road Contact: Bruce Smith [email protected] or (520) 622-0104Cost: $4Dealers from all over the Southwest will be selling vinyl, tapes, CDs and music memoribilia. Dealer tables are $35.

REGULAR MEETINGS

Small Business Commission MeetingFourth Thursday 3 to 5 p.m.Mayor and Council chambers 255 W. Alameda First fl oorInfo: Ellen Hitchings, (520) 791-4343 ext. 245 or [email protected]

The S.M.A.R.T. GroupEvery Friday12 to 1:30 p.m.Nova Home Loans Multi-Media Conference Room6245 E Broadway Blvd., 5th Floor$25 Members $45 nonmembersContact: Dale Dillon Lips (520) 429-6000 or [email protected]

Society for Human Resource Management - Greater Tucson ChapterSecond Tuesday 11 a.m. to 1 p.m.DoubleTree, 445 S. Alvernon WayMembership:Garrett Kowalewski, (520)

647-9100 [email protected] by Thursday prior to meeting: www.shrmgt.org

Solutions ForumFourth MondayNoon to 4 p.m.Clements Insurance6245 E. Broadway, Suite 310Information: 1-800-716-9626 or (480) 200-5678RSVP requiredOpen only to business owners and divisional heads

Southern Arizona Chapter of Enrolled AgentsThird Tuesday 11:30 a.m.Knights of Columbus Hall601 S. Tucson BoulevardInfo: (520) 751-8986, www.aztaxpros.org/sacea

Southern Arizona Architects & Engineers Marketing AssociationThird Tuesday11:30 a.m. to 1 p.m.Sheraton Tucson5151 E. Grant RoadRSVP: Dana Dietrich [email protected]: $25 members / $35 Nonmembers

Southern Arizona Chapter of the Society for Design AdministrationFourth Tuesday Noon to 1:30 p.m.Viscount Suites Hotel 4855 E. BroadwayInformation: www.sacsda.com or [email protected] RSVP: [email protected] Cost: $20 members, $25 nonmembersSouthern Arizona Logistics Education Organization (SALEO)Third Wednesday Location and times varyInformation: al@saleo, (520) 977-3626 or www.saleo.orgCost: $25 members and 1st-timers; $30 nonmembers

Superior Business NetworkingFirst and third Tuesday 11:30 a.m. to 1 p.m. Info: (520) 631-7398, [email protected]

The Annuity Doctor — Curt ZachariasEvery Tuesday 3:30 p.m. Bookmans 6230 E. Speedway, Community RoomInformation: Curt Zacharias (520) 990-0009Cost: Free

Tucson Association of ExecutivesEvery Wednesday 6:30 to 8 a.m.Tucson Country Club 2950 Camino PrincipalRSVP: (520) 321-0879, taeoffi [email protected]

Tucson Business ConnectionFirst Wednesday 5 to 7:30 p.m.Pearl Nightclub 445 W. Wetmore RoadInformation: (520) 219-0266, [email protected] or www.tbcnetworking.comRSVP: Not required Cost: Free to attend, free snacks, cash bar


Now your business can tell Inside Tucson Business about new hires, promotions and special awards online. Go to www.insidetucsonbusiness.com and click the “People in Action” button. From there you can submit your announcement and we’ll publish it online and in print.

{TELL US ONLINE}

PEOPLE IN ACTION

APPOINTMENTS

Marianne Freitas and Tom Strasburg have been named co-chairs of the sixth annual Tucson Classics Car Show sponsored by the Rotary Club of Tucson. They will oversee the Oct. 13 event at St. Gregory Preparatory School that will benefi t Reading Seed, the Pima Council on

Aging and the YWCA.

Our Family Services has announced its senior leadership team following a July merger with New Beginnings for Women & Children. Patti Caldwell has become the executive director of the merged Our Family organization.

Caldwell served 23 years with Planned Parenthood in Arizona, including seven years as CEO and four years as COO, before becoming executive director of New Beginnings. Caldwell has a master’s in social work from Arizona State University and a bachelor’s in social work and women’s studies from

Michigan State University.Lisa Reams is Our

Family’s senior director. Reams joined Our Family 21 years ago as a community mediator and later moved into program management and agency administration. Reams has a bachelor’s degree in sociology from the University of Arizona

and a certifi cate in public policy and management from the UA’s Eller College. She graduates from Capella University with her MS in human services with a specialization in nonprofi t management in September.

Kim Egita has become Our Family’s director of fi nance and assets, which

encompasses accounting, housing and facilities and offi ce management. At the time of the merger, Egita was administrative director of New Beginnings for Women and Children, where she had worked for nine years. Egita has a bachelor’s in fi nance from the University of Arizona and is currently working toward CPA certifi cation.

PATTI CALDWELL LISA REAMS KIM EGITA MARIANNE FREITAS TOM STRASBURG

GET ON THE LISTNext up: TV stations, Radio stations

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

• Aug. 31: New car dealers• Sept. 7: Television stations, Radio sta-

tions• Sept. 14: Minority-owned businesses,

Exporters• Sept. 21: Locally-owned restaurants,

Chain-owned restaurants • Sept. 28: Commercial printers,

Copying/Duplicating firms, Mailing ser-vice firms, Promotional product suppliers

If your business fits one of these cat-egories, now is the time to update your profile. Go to www.InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page. New and unlisted busi-nesses can create a profile by following the directions.

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

LEGALPatterson acquitted in domestic violence case

Former Tucson state representative Daniel Patterson has been acquitted of misdemeanor domestic violence charges in Pima County Superior Court.

Patterson had been accused of domes-tic violence following an altercation with former girlfriend Georgette Escobar.

Patterson resigned from his seat follow-ing allegations he verbally abused staffers and other conduct-related issues.

His resignation came before a House subcommittee recommended taking action for his expulsion.

HEALTH CAREAccess to care tops Health Needs Assesement

Tucson’s nonprofit hospitals joined forc-es on a Pima County Community Health Needs Assessment that suggests access to care is the county’s top health gap.

The Pima County Community Health Needs Assessment is an outcome of the Affordable Care Act, which requires tax-exempt, non-profit hospitals to complete a Community Health Needs Assessment every three years and to implement strate-gies to address the needs identified in the report.

Access to care — specifically, lack of insurance coverage, cuts in AHCCCS funding, limited coverage for behavioral health and lack of access to medications and funding for primary care — is the top health issue identified in the Community Health Needs Assessment jointly pub-lished by, Carondelet Health Network, Tucson Medical Center and The University of Arizona Medical Center.

Among the findings of the hospitals’ Community Health Needs Assessment for Pima County: access-to-care issues topped the needs list; other critical areas of need include rising obesity rates, dia-betes, shortages of primary care provid-ers, and mental health; many areas Pima County did well compared with the rest of the state; obesity, diabetes and substance abuse led the list of top medical health issues in the county.

The 121-page Pima County assessment was completed with information obtained through written questionnaires and focus groups attended by key informants and

BRIEFScommunity leaders representing the vari-ous needs and interests of Pima County. The assessment draws from county health rankings, the Arizona Department of Health Services Vital Statistics, Primary Care Area Statistical Profiles and the U.S. Census Bureau.

To view the Pima County Community Health Needs Assessment in its entire-ty, visit any of the following websites: Carondelet Health Network — www.caron-delet.org; Tucson Medical Center — www.tmcaz.com; The University of Arizona Medical Center — www.uahealth.com.

POLITICSAsarco PAC comes outin support of Carroll

Th e political action committee for min-ing company Asarco, has announced it sup-ports the re-election of Ray Carroll to the Pima County Board of Supervisors.

Th e endorsement came in a letter from Th omas L. Aldrich, chairman of the Asarco Political Action Committee who is also vice president of Environmental Aff airs for the company who expressed Carroll’s support of Asarco’s operations in Pima County.

Tucson-based Asarco is a subsidiary of Grupo Mexico. It operates 13 mines around the world, including the Mission Mine near Sahua-rita and the Silver Bell Mine near Marana.

Th e endorsement is seen as signifi cant by some because Carroll has been among the most vocal opponents against Augusta Resrouce Corp.’s plans to develop the Rose-mont Copper mine in the Santa Rita Moun-tains. Th at has become a major of distinction in the primary election campaign between Ray Carroll and his Republican challenger, Sean Collins. Th ere is no Democrat seeking the seat so the Republican primary is virtu-ally assured of election.

Tech council issues legislative endorsements

Using a report tracking lawmakers’ past records in support of technology along with responses from both a written survey and can-didate interviews, the Arizona Technology Council has issued its endorsements of can-didates for the state Legislature.

The council’s endorsements in Southern Arizona legislative districts are:

• District 2 - Senate: Linda Lopez, Democrat. No endorsements for the House.

• District 3 - House: Sally Ann Gonzales and Macario Saldate, both Democrats. No endorsement for Senate.

• District 4 - Lynne Pancrazi, Democrat. No endorsements for the House.

• District 9 - House: Ethan Orr, Republican, and Victoria Steele, Democrat. No endorsement for Senate.

• District 10 - Senate: Frank Antenori, Republican. House: Ted Vogt, Republican, and Bruce Wheeler, Democrat.

• District 11 - Senate: Al Melvin, Republican. House: Steve Smith Smith, Republican.

• District 14 - Senate: Gail Griffin, Republican. House: David Gowan and David Stevens, both Republicans.

The tech council also came out in favor of two propositions that will be on the Nov. 6 ballot.

Proposition 116 would allow a state tax exemption equal to the amount of annual earnings of 50 employees on the value of business equipment or machinery. The group says it would help small businesses grow.

Proposition 199 would allow the exchange of state lands for public lands to maintain military installations in Arizona. Under current mandates the state land must be sold to the highest bidder, which the tech council sees as a potential conflict for the growth of technology associated with defense and aerospace contractors.


FINANCEYOUR MONEY

Keep income investments working when rates are low

Next weekend we observe Labor Day, which honors the hard-working men and women in the United States. As an investor, you’d like to think that all your investments are working hard, too — including the ones that are producing income.

But can your income-oriented invest-ments be productive when short-term interest rates are at historic lows? Or can you fi nd other investment possibilities that could potentially boost your cash fl ow?

Th e answers to both of these questions is “yes” — but you may have to take a closer look at where you stand on the risk-reward spectrum.

For example, you might need to consider longer-term income producers, which typically pay higher yields than shorter-term equivalents.

Longer-term fi xed-rate securities, such as bonds, must pay these higher rates to reward investors, who face both interest-rate risk — the possibility that interest rates will rise, causing the value of existing bonds to fall — and infl ation risk — the threat of losing purchasing power by the time long-term bonds have matured.

Still, you may be willing to accept those risks in exchange for the higher yields.

However, you may be looking for income producers that can work hard for you without having to hold them for a long period to maturity because the “yield curve” — the line that plots the relationship between yield and maturity — is fairly steep right now.

In plain English, this means you can gain noticeably higher yields just by modestly increasing the maturity of your investments. Your fi nancial advisor can suggest some short-term and intermediate-term vehicles that may be appropriate for your needs. And while these rates will still not be as high as those off ered by longer-term vehicles, they do off er fl exibility — along with less interest-rate risk and infl ation risk.

You can also help protect yourself from these risks by building a “ladder” consist-ing of short-, intermediate- and longer-term bonds and certifi cates of deposit (CDs).

Once you’ve built your ladder, it can help you weather changing interest-rate environments. When market rates are low, you’ll still have your longer-term bonds

and CDs earning higher interest rates. And when market rates rise, you’ll be able to reinvest your maturing short-term investments at the higher levels.

If you need the cash, you can liquidate the

maturing bonds and CDs. Th us far, we’ve only looked at fi xed-rate

investments — but you may also be able to boost your income by owning dividend-paying stocks.

Some companies have paid — and have even increased — their stock dividends for several consecutive years. If you’re not in need of the cash, you can reinvest the dividends and boost your ownership stake, which is a key to increasing your wealth. But if you do need the money, you can take the dividends as cash.

Keep in mind that income producers are not a “sure thing” because companies can decide to reduce, or even discontinue, their dividends at any time.

In addition, history tells us that you may experience more price volatility from stocks, and they can be worth more or less than the original investment when sold.

As you can see, you can fi nd ways to keep income-producing investments working hard for you, despite the prevailing low interest rates. So consider your options, weigh the risks — and then work with your fi nancial advisor to make those choices that are right for you.

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.

Certifi cates of deposit (CDs) are federally

insured up to $250,000 (principal and

interest accrued but not yet paid) per issuing

institution. Additional information is online

at fdic.gov or contact your fi nancial advisor.

Also, bond investments are subject to interest

rate risk such that when interest rates rise,

the prices of bonds can decrease, and the

investor can lose principal value if the

investment is sold prior to maturity.

TIM BEITHON

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

Company Name Symbol Aug. 22 Aug. 15 Change52-Week

Low52-Week

HighTucson companiesApplied Energetics Inc AERG.OB 0.04 0.04 0.00 0.03 0.48CDEX Inc CEXIQ.OB 0.02 0.02 0.00 0.01 0.10Providence Service Corp PRSC 11.60 11.07 0.53 8.35 15.94UniSource Energy Corp (Tucson Electric Power) UNS 40.05 40.25 -0.20 34.28 42.10

Southern Arizona presenceAlcoa Inc (Huck Fasteners) AA 8.97 8.73 0.24 7.97 12.93AMR Corp (American Airlines) AAMRQ 0.49 0.50 -0.01 0.20 3.73Augusta Resource Corp (Rosemont Mine) AZC 2.81 2.77 0.04 1.48 4.30Bank Of America Corp BAC 8.22 7.87 0.35 4.92 10.10Bank of Montreal (M&I Bank) BMO 58.19 57.96 0.23 50.95 62.80BBVA Compass BBVA 7.30 7.05 0.25 5.30 9.94Berkshire Hathaway (Geico, Long Cos) BRK-B* 85.69 84.71 0.98 65.35 86.01Best Buy Co Inc BBY 17.72 19.36 -1.64 16.25 28.53BOK Financial Corp (Bank of Arizona) BOKF 57.56 57.91 -0.35 43.82 60.00Bombardier Inc* (Bombardier Aerospace) BBDB 3.61 3.63 -0.02 3.30 5.29CB Richard Ellis Group CBG 17.89 17.56 0.33 12.30 21.16Citigroup Inc C 30.49 28.74 1.75 21.40 38.40Comcast Corp CMCSA 33.97 34.19 -0.22 19.57 35.16Community Health Sys (Northwest Med Cntrs) CYH 25.91 24.71 1.20 14.61 28.79Computer Sciences Corp CSC 32.94 31.34 1.60 22.19 33.80Convergys Corp CVG 15.34 15.65 -0.31 8.49 15.84Costco Wholesale Corp COST 95.53 96.47 -0.94 75.05 97.76CenturyLink (Qwest Communications) CTL 41.51 42.29 -0.78 31.16 43.43Cvs/Caremark (CVS pharmacy) CVS 45.70 44.22 1.48 32.28 48.69Delta Air Lines DAL 9.53 9.26 0.27 6.64 12.25Dillard Department Stores DDS 74.92 74.19 0.73 40.01 76.33Dover Corp (Sargent Controls & Aerospace) DOV 57.51 57.03 0.48 43.64 67.20DR Horton Inc DHI 19.00 18.11 0.89 8.03 19.35Freeport-McMoRan (Phelps Dodge) FCX 37.00 34.76 2.24 28.85 48.96Granite Construction Inc GVA 26.51 25.81 0.70 17.50 30.49Home Depot Inc HD 56.64 55.00 1.64 31.03 57.18Honeywell Intl Inc HON 58.88 58.47 0.41 41.22 62.00IBM IBM 197.25 198.40 -1.15 158.76 210.69Iron Mountain IRM 32.86 33.39 -0.53 27.10 34.77Intuit Inc INTU 59.65 59.20 0.45 44.44 62.33Journal Communications (KGUN 9, KMXZ) JRN 5.65 5.72 -0.07 2.69 5.85JP Morgan Chase & Co JPM 37.83 37.07 0.76 27.85 46.49Kaman Corp (Electro-Optics Develpmnt Cntr) KAMN 33.37 33.14 0.23 25.73 35.86KB Home KBH 10.74 10.32 0.42 5.02 13.12Kohls Corp KSS 51.49 51.03 0.46 42.14 56.66Kroger Co (Fry's Food Stores) KR 21.96 22.09 -0.13 20.98 24.83Lee Enterprises (Arizona Daily Star) LEE 1.57 1.59 -0.02 0.49 1.81Lennar Corporation LEN 32.35 31.33 1.02 12.14 32.81Lowe's Cos (Lowe's Home Improvement) LOW 27.24 26.83 0.41 18.28 32.29Loews Corp (Ventana Canyon Resort) L 40.44 40.44 0.00 32.90 41.80Macerich Co (Westcor, La Encantada) MAC 57.36 57.78 -0.42 38.64 62.83Macy's Inc M 39.33 38.54 0.79 23.64 42.17Marriott Intl Inc MAR 37.24 36.79 0.45 25.49 40.45Meritage Homes Corp MTH 37.85 35.65 2.20 13.68 38.65Northern Trust Corp NTRS 46.88 46.49 0.39 33.20 48.31Northrop Grumman Corp NOC 68.34 68.28 0.06 49.97 70.20Penney, J.C. JCP 24.40 23.67 0.73 19.06 43.18Pulte Homes Inc (Pulte, Del Webb) PHM 13.29 12.78 0.51 3.29 13.91Raytheon Co (Raytheon Missile Systems) RTN 55.81 56.24 -0.43 38.35 56.92Roche Holdings AG (Ventana Medical Systems) RHHBY 45.29 45.03 0.26 36.50 46.40Safeway Inc SWY 15.97 16.02 -0.05 14.73 23.16Sanofi -Aventis SA SNY 41.16 42.21 -1.05 31.00 42.31Sears Holdings (Sears, Kmart, Customer Care) SHLD 55.94 56.60 -0.66 28.89 85.90SkyWest Inc SKYW 8.67 8.14 0.53 6.25 14.32Southwest Airlines Co LUV 9.32 9.02 0.30 7.15 10.05Southwest Gas Corp SWX 42.93 43.48 -0.55 34.24 46.08Stantec Inc STN 31.72 32.00 -0.28 20.96 32.99Target Corp TGT 63.68 64.50 -0.82 47.25 64.99TeleTech Holdings Inc TTEC 16.75 17.00 -0.25 14.04 18.66Texas Instruments Inc TXN 29.38 29.90 -0.52 24.34 34.24Time Warner Inc (AOL) TWX 42.19 42.69 -0.50 28.26 43.05Ual Corp (United Airlines) UAL 19.35 18.20 1.15 15.51 25.84Union Pacifi c Corp UNP 124.69 123.71 0.98 77.73 126.91Apollo Group Inc (University of Phoenix) APOL 27.95 28.15 -0.20 25.77 58.29US Airways Group Inc LCC 11.61 10.15 1.46 3.96 14.51US Bancorp (US Bank) USB 32.90 33.17 -0.27 20.75 34.10Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT 71.77 74.45 -2.68 49.94 75.24Walgreen Co WAG 35.55 35.56 -0.01 28.53 37.61Wells Fargo & Co WFC 34.18 33.97 0.21 22.61 34.80Western Alliance Bancorp (Alliance Bank) WAL 9.31 9.30 0.01 4.44 9.92Zions Bancorp (National Bank of Arizona) ZION 19.33 19.16 0.17 13.18 22.81Data Source: Dow Jones Market Watch

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


INSIDE REAL ESTATE & CONSTRUCTION


When it comes to a tight supply of lots for new home construction, Oro Valley is the region’s most challenged municipality. Yet in recognition of the value and revenues that new homes generate, the town makes the best of the situation and works collab-oratively with developers and builders.

Th e economic results are in the numbers. Year to date, Oro Valley has issued permits at the fastest velocity of any local entity. Th e town’s volume is up 100 percent, having spiked from 32 to 64 building permits (see chart).

Overall, every jurisdiction has issued at least 11 percent more permits year over year, according to Ginger Kneup, owner of Bright Future Real Estate Research. Th e sec-ond-fastest pace was in Marana. Th e mu-nicipality’s volume has risen from 181 to 309 permits, a 71 percent increase.

New home construction is clearly off the market’s bottom, Kneup noted. At this time last year, 892 permits had been issued. Th e current gain of 324 permits equates to a 36 percent increase.

Restaurant/offi ce defaultAn affi liate company of developer Don

Bourn is in default on a commercial real es-tate parcel that contains a restaurant and offi ces in the North Oracle Road corridor. A notice of trustee’s sale has been fi led on 6760-6770-6780 N. Oracle Road related to a $2.88 million note.

According to public records, a public auction will be held in November. Th e on-site tenants include Hifalutin Restaurant, Realty Executives, Fidelity National Title, and Fairway Independent Mortgage.

Th e trustee’s sale notice lists PBI River LLC and PBI Oracle LLC, both at 3915 E. Broadway, as the property owners. Th e ownership group includes Don Bourn, founder of Bourn Properties; Louis J. Sher-man, Scottsdale; and the Patricia/Kevin Ki-ernan Revocable Trust, Coronado, Calif.

Th e auction is being handled by Snell & Wilmer. Th e property is scheduled for pub-lic auction at 1:30 p.m. Nov. 13 at the law fi rm’s offi ce, 1 S. Church, Suite 1500.

Breakdown by entityNew data from Coldwell Banker’s Resi-

dential Market Report off ers further evi-dence that local real estate is rising from the bottom. Based on a July year-over-year analysis by municipality:

• At mid-year in the city of Tucson, there have been 6,524 sales, 8 percent ahead of last year’s 6,042 pace. Th e July average days-on-market was 94, just two days faster than in July 2011.

Th e selling price per square foot indi-cates the direction of property values since the mix of high and low-end sales impact

median and average sales prices. In Tucson, the July selling price per square foot was $92, up from $86 a year ago.

Th e median sales price was $134,900, up 12.4 percent from $120,000 in July 2011. Th e July average sales price was $179,464, up 6.3 percent from $168,906 in July 2011.

• In Oro Valley year-to-date, there have been 454 sales. Th at is 24 percent ahead of last year’s 366 closings. Th e July selling time was 116 days, four days faster than a year ago.

In July, the median sales price was $235,000 up 9 percent from $216,000 in July 2011. Th e average sales price of $306,014 was 11 percent higher than the $276,547 level in July 2011. Th e July selling price per square foot was $128 compared to $120 a year ago.

• In Sahuarita, there have been 294 sales since January, 10 percent less than last year’s 327 pace. Th e July days-on-market was 71, down from 85 days a year ago.

Th e median sales price was $172,000, a 46 percent increase from $117,750 in July 2011. Th e average sales price of $173,011 was 35 percent higher than the July 2011 level of $128,256. Th e July selling price per square foot was $78 compared to $66 a year ago.

• In Marana, sales were only fi ve ahead of the 287 closings in the fi rst half of 2011. Over the past 12 months, the average selling time dropped to 79 from 95 days.

Last month, the $235,450 median sales price was 65 percent higher than the $142,550 level in July 2011. Th e average sales price however, stayed basically fl at at about $250,000. High-end sales had the ef-fect of increasing the selling price per square foot by 18.5 percent, from $92 to $109, ac-cording to Coldwell Banker.

New home sales upAt the mid-point of 2012, the sales of

new-built homes across Southern Arizona are up a strong 15 percent. Th ere have been 806 new home closings compared to 700 for the same six-month period in 2011, accord-ing to Ginger Kneup, owner of Bright Future Real Estate Research.

Due to “the strong permitting activity of the past few months, total closings for 2012 will most likely fall between 1,500 and 1,600,” she said.

Th ere were 1,281 new home closings last year; 1,778 in 2010; and 1,307 in 2009.

Sales & leases• Tucson Roller Derby leased 13,000

square feet at 1145 E. Valencia Road from Va-lencia Holdings LLC. Th e transaction was handled by Gary Emerson, GRE Partners.

Email news items for this column to

[email protected]. Inside Real Estate &

Construction appears weekly.

Housing sector scores better at mid-year THE PULSE: TUCSON REAL ESTATE

8/13/2012 8/6/2012

Median Price $134,900 $160,000Active Listings 4,114 4,101New Listings 350 353Pending Sales 390 346Homes Closed 213 198Source: Long Realty Research Center

MONTHLY BUILDING PERMITS: JULY 20122012 2011 2010 2009

Pima County 62 42 44 71

Marana 70 31 44 29

Sahuarita 21 20 20 50

Tucson 32 25 30 44

So. Pinal 53 14 8 26

Oro Valley 25 4 4 5

Total 263 136 150 225

Source: Bright Future Real Estate Research

YEARTODATE BUILDING PERMITS JULY 20122012 2011 2010 2009

Pima County 360 323 465 425

Marana 309 181 243 83

Sahuarita 174 112 238 334

Tucson 183 141 220 206

So. Pinal 126 103 115 92

Oro Valley 64 32 35 32

Total 1,216 892 1,316 1,172

Source: Bright Future Real Estate Research

WEEKLY MORTGAGE RATES

Program Current Last WeekOne

Year Ago12 Month

High12 Month

Low

30 YEAR 3.75% 4.00%APR 3.50% 3.75%APR 4.95% 4.95% 3.50%

15 YEAR 3.13% 3.25%APR 3.00% 3.125% APR 4.22% 4.22% 3.00%

3/1 ARM 2.88% 3.125%APR 2.88% 3.125% 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) Hotchkiss Financial, Inc. P.O. Box 43712 Tucson, Arizona 85733 • 520-324-0000MB #0905432. Rates are subject to change without notice based upon market conditions.

8/21/2012

Every month, new home building permits data is published from Bright Future Real Estate Research, exclusively in Inside Tucson Business.


An old expression is to never discuss religion or politics. It’s too dangerous. What may be worse for business is to put the two together and discuss religion AND politics.

Th at may seem hypocritical coming from a guy who writes a column on the opinion pages of a publication, but as I’ve recounted previously, I initially wanted to get rid of these opinion pages in Inside Tucson Business until the owners and publisher suggested I rethink that stance. Our owners, Wick Communications, has long encouraged expression of opinions as a service to the communities served by their publications.

So Inside Tucson Business continues to off er up viewpoints, trying always to respect our audience of business leaders and owners. (As I wrote last week, we welcome as many viewpoints as we can accommodate within the limitations of time and space.)

In trying to respect the views of our readers, we’ve intention-ally stayed away from getting too involved in social issues. Frankly, I’m not sure how we would formulate a business stance on something such as defi ning marriage, for example.

Th at hasn’t stopped others, as we saw last month when Chick-fi l-A President and CEO Dan Cathy told a devotional radio program host that he believed in a biblical defi nition of the family unit, adding “I think we are inviting God’s judgment on our nation when we shake our fi st at him and say we know better than you as to what constitutes a marriage.”

Th at brought out the knee-jerk reactions calling for a boycott, then the counter-call for a Chick-fi l-A appreciation day and the ultimate in stupidity from a Tucsonan who posted a YouTube video in which he verbally berated a Chick-fi l-A drive-through employee for what he called the company’s horrible policies

Th e man — who has since apologized — was fi red the next day from his job as chief fi nancial offi cer from the medical device manufacturing fi rm Vante, which was compelled to issue a statement saying the man’s actions shouldn’t be construed as representing the company as a whole.

Th at chain of events should stand as a lesson in why busi-nesses shouldn’t mix religion and politics because there’s no possible benefi t to be had.

As Comedy Central’s Stephen Colbert demanded to know last month, “I’ve got to know what positions my food has taken on all the issues. For example, I love Carl Jr’s Western Burger. It must be anti-ObamaCare, because it is clearly trying to kill us. And whenever I go to Applebee’s, I insist that they only give me right wings. After all, you are what you eat. And now, you also believe what you eat.”

Seriously, what’s supposed to happen when a business fl aunts a political and religious viewpoint? Th ose who don’t share it aren’t welcomed? Whether that’s intended, it’s the probable outcome. In this economy I’m not sure there are too many businesses that can aff ord to exclude customers based on their beliefs.

I’m a member of an organized religion. I also vote. You, as a reader, should not care one whit what I believe in either of those two areas.

Th ere’s more respect to be gained by showing an exemplary style of leadership. Customers can fi gure out the political and religious stuff later.

Contact David Hatfi eld at dhatfi [email protected]

or (520) 295-4237.

EDITORIAL

DAVID HATFIELD

BIZ BUZZ

No gain: mixing politics and religion

EDITORIAL

Nice catchWithin hours after the Aug. 16 announcement that

Accelr8 Technology Corporation is moving its corporate headquarters to Tucson from Denver, news releases started arriving from those who wanted to take credit.

First there was the announcement in the board room of Tucson Regional Economic Opportunities (TREO) and its press release.

Th ere was Gov. Jan Brewer who was on the phone. And the Arizona Commerce Authority that off ered a $700,000 loan at a low interest rate to Pima County to help it build out more than 15,000 square-feet of wet labs in the 180,000 square-foot, four-story Herbert K. Abrams Public Health Center, 3950 S. Country Club Road, near the University of Arizona Medical Center - South Campus. Once the county repays the loan, the money would be available for more economic development projects.

Pima County also sent out its own announcement. It wanted credit as landlord and the entity responsible for spending an estimated $1.4 million to build out the wet lab space. Under terms of the agreement, the county would receive just under $140,000 a year in lease payments. Th e rate of $9.25 per square foot is below market rate so that Accelr8 can recoup its moving costs. Th e rate would move up to market rates after three years.

Even the City of Tucson stepped in to take some credit because, well, the Herbert K. Abrams Public Health Center is inside the city limits. And of course, it gave the city an opportunity to say it is working “to become more welcoming to businesses.”

We also need to thank the company itself. Accelr8 is a biotech fi rm whose arrival hits a bulls eye among industry clusters TREO has specifi cally targeted. Th is is a company that develops instruments used for the detection of pathogenic microorganisms. When it arrives early next year, the company will join with Roche Group’s Ventana Medical Systems, Sanofi , the Critical Path Institute, Bio5 and others in creating the synergis-

tic critical mass that will make the Tucson region a biotech hub.

While the number of jobs — 65 in the fi rst three years — may not sound overwhelming, these are well-paying positions for engineers, scientists, sales and marketing, management, fi nance, quality control and regulatory and manufacturing. Th e hope is that the number of jobs can grow to 200, maybe 300, within a decade.

Th is is precisely how Ventana Medical and Sanofi started and grew. Th ere’s no reason to believe Accelr8 can’t do the same. We’ll take that over another an-nouncement of a few hundred more low-wage call center jobs.

Th e truth of the matter is that scoring an economic development win like Accelr8’s arrival took cooperation among many entities along with a healthy mix of the stars aligning just right and a few lucky intangibles.

In this case Lawrence Mehren, who has been president and CEO of Accelr8 since June, had previously been head of global business at Ventana Medical Systems where he had worked since 2007. Mehren said it wasn’t a slam-dunk that Accelr8 would move to Tucson. In fact, he said the company’s fi rst choice was to remain in Colorado, but he said company offi cials were impressed with the unifi ed, organized eff ort put on by Tucson and Arizona.

It also couldn’t have hurt that two of Accelr8’s board members and investors are Jack Schuler and John Patience, principals and founders of Crabtree Partners LLC, which has been instrumental in the success of other biotechs, including providing capital for Ventana Medical’s fi rst instrument.

So congratulations and thanks to TREO, state offi cials, the Arizona Commerce Authority, Pima County, the City of Tucson and to anyone and everyone else who had a hand in helping Accelr8 make its decision to come to Tucson. Nice catch.


OPINIONWAKE UP, TUCSON

A ‘10 Commandments’ for Tucson’s public offi cials We have a lot of fun on our radio show

every morning. Sometimes it’s tough waking up at 4 a.m. to take on the powers that be in this region.

Once the opening bars of the Beatles song “Revolution” fi re up shortly after 6 a.m. and we are engaging with our listen-ers, it is all forgotten. It seems as if we’ve covered every subject under the sun with our listeners, including their concert, their fi rst car and even “boxer or briefs.”

A couple of weeks ago, we asked listeners to help us compile a “10 Com-mandments for Public Offi cials” in Tucson.

1. Th ou shalt live to serve and not be served. Check your ego and selfi shness at the door. When U.S. Rep. Raúl Grijalva called for a boycott of Arizona, it was to serve his ego in an appearance the Keith Olbermann show, not the thousands of people, including those in his own district, who work in the tourism industry.

2. Th ou shall not overstay thy wel-come. We wouldn’t hear the cry of term limits if incumbents would recognize they should move on. After eight to 10 years in the same gig, it’s time to start looking for a real job.

3. Th ou shall make decisions to benefi t your constituents as a whole, not just the people who cut you checks. Th e City of Tucson’s coddling of neighborhood associations and Pima County’s environ-mental obsession has helped lead this region into a dead-end of stagnation.

4. Th ou shall honor the eff orts of small business everyday of your term, not just

the last six months leading into your re-election. Former Tucson City Councilwom-an Nina Trasoff is the poster child for his. Th e week before her loss to Steve Kozachik in 2009, the city council pro-claimed “Small Business Apprecia-tion Week.” Trafoff then proceeded to do a press confer-ence on Congress Street announcing a new develop-ment deal that kicked most of the existing tenants to the curb, most of whom found out

about it from her press conference. Trasoff was supposed to be a PR expert. Ooops.

5. Th ou shall be transparent about the use of each and every taxpayer dollar. Democratic County Supevisors Ramón Valadez, Richard Elías and Sharon Bronson haven’t appointed anyone to the Citizens Budget Advisory Committee in years. Without those appointees, the committee hasn’t had a quorum since Color Me Badd had a hit on the top 40 charts. Meanwhile, Republican Supervisor Ray Carroll has

been refused budget information from County Administrator Chuck Huckelberry. Th at doesn’t sound too transparent for three folks looking for votes in November so they can stick around another four years.

6. Th ou shalt not hold meetings during business hours. If you work or own a business, it’s tough to go to a 9 a.m. Tuesday government meeting. As a result Board of Supervisors meetings are for retirees, activists and the favored few.

7. Th ou shall answer all reasonable questions. Even the tough ones.

8. Th ou shall truly care about the environment for business. If you saw our last column two weeks ago, the map showed it all. State government and other jurisdictions within Arizona set a table for true economic development. In the Tucson region, we’re at the bottom of lists and one in four kids goes to bed hungry every night.

9. Th ou shall not fl uff the numbers. Th e county supevisor incumbents are already touting that Accelr8 Technology Corpora-tion’s relocation to Tucson next year is bringing 300 jobs. It’s bringing 10 jobs. Th ey’re planning to add 55 within three years and if everything aligns in the future that could grow to 300 in 10 years. Th e supervisors also like to talk about the 500 new biotech jobs created at Roche Group’s Ventana Medical Systems. So far the publicly revealed numbers aren’t anywhere close to that.

10. Th ou shalt not be an ingrate. Republican City Councilman Steve Kozachik got a lot of support to beat Nina

Trasoff three years ago. Even if he was upset that Bob Walkup, the Republican mayor at the time, wouldn’t endorse him. But since then, Kozachik has turned on the very people who helped him, including state Sen. Frank Antenori and the rest of the Republican delegation to the the Legislature. So what happened when a quality guy like Republican Tyler Vogt calls on Kozachik in 2011 and asks for support? Kozachik refuses to support the one guy who could have helped him change Tucson. And that’s not the end of it, Kozachik has since endorsed Democrats Ron Barber for Congress and Richard Carmona in his bid to go to the U.S. Senate. Neither of those guys are going to help Kozachik at Tucson city hall. Memo to Mr. Kozachik: You’re not taking heat because you’re supporting Democrats, you’re taking heat because you’re ungrateful.

We’ve probably missed a few potential commandments along the way. If you’ve got one, we’d love to hear from you.

In the meantime, as you consider how you will cast your ballot use these com-mandments as a guide to scrutinize the candidates running for the county Board of Supervisors, Tucson Unifi ed School District governing board and state legislative seats.

Contact Joe Higgins and Chris DeSimone at [email protected]. Th ey host “Wake Up Tucson,” 6-8 a.m. weekdays on Th e Voice KVOI 1030-AM. Th eir blog is at www.TucsonChoices.com.

JOE HIGGINS

CHRIS DeSIMONE

Tucson still wants F35A TO: The EditorFROM: Ray Carroll, Pima County Supervisor, District 4RE: ‘Tucson Forward Sets Tucson Back,’ editorial Aug. 10 issue

While I completely agree with the editorial, particularly your excoriation of the “near invisible public profi le” of the shadow group Tucson Forward, I must disagree with your comment that elected offi cials of Pima County were “not showing themselves to be leaders” in the organized eff ort to bring the F35A fi ghter plane to Tucson International Airport (TIA).

As verifi cation of my statement, I am enclosing my July 23, 2012, letter to the Assistant Secretary of the Air Force in

support of basing the F-35A at TIA. In addition, I am enclosing my follow-up letter of Aug. 14, 2012, which urges training in the F-35A at Tucson as well as at Luke Air Force Base.

I was pleased to work with such business leaders as Ron Shoopman of the Southern Arizona Leadership Council, Mike Varney of the Tucson Metro Chamber and Darren Venters, retired lieutenant colonel in the U.S. Air Force, in this endeavor. Th is cooperation between the private sector and the public sector is the type of partnership our community needs to continue to grow and prosper.

Th e military installations in our area are a major economic engine that provides jobs and revenue for Pima County. You can be assured that I will continue to support them.

LETTERSStakeholders did notOK Broadway wideningTO: The EditorFROM: Laura TabiliRE: ‘Don’t blame the RTA for Broadway widening project,’ opinion July 27 issue

Apologists for the misbegotten Broad-way widening project consistently misrep-resent its opposition. For years, city and Regional Transportation Authority staff have repeated the lie that stakeholders approved the plan. Yet the record shows consistent opposition from the 1980s to 2005 to today.

Th e project will not remedy downtown bottlenecks but worsen them, running

eight lanes of traffi c into the already clogged and even dangerous east end of Congress Street. Downtown Links (con-necting the end of the Barraza-Aviation Parkway at Broadway with Interstate 10) would off er little relief as it would only be four lanes, not eight.

Th e 2012 Traffi c Study admits on page 1 that the Country Club Road intersection will fail 7-10 years after the expenditure of $74 million we do not have.

I urge readers of Inside Tucson Business to examine for themselves this report as well as the 1987 Draft Final Report and other documents posted on the Broadway Project website: http://dot.tucsonaz.gov/projects/broadway.

LOG ON TODAY! www.InsideTucsonBusiness.com


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Make the news

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Facebook Likes: 2,532Next week’s poll: What should the City of Tucson do about it’s golf courses?__ Nothing__ Go to a non-profi t model__ Privatize (hire a management company)__ Sell underperforming courses__ Sell all courses and get out of the golf business

OPINIONGUEST OPINION

Social Security is defi nitely not a good deal for retirementWhen I saw the headline in the Arizona

Daily Star that read, “Social Security: Is it really no longer a good deal?” my initial reaction was that the media had fi nally caught on. But then I realized the report avoided answering the question in the headline and instead focused on the other benefi ts of Social Security: insurance for the disabled, widows and widowers.

So let me go back and ask the question again, slightly rephrased: “Are Social Security taxes a good deal for their retire-ment benefi t?”

Th e short answer is a resounding “no.” And it’s not what you think.

Th e Associated Press report published in the Star Aug. 5, 2012, stated today’s retirees can expect to pay more in Social Security taxes than they will receive in future retirement benefi ts. But the reason Social Security is a bad deal for retirement has nothing to do with the fact that we now have to pay more than we get back in benefi ts. Social Security is a bad deal for retirement because individuals in the current Social Security system don’t benefi t from the most fundamental investment principle, “compound interest.”

Compound interest means we earn interest on both the original principal and the previously earned interest. Th us, the amount of money earned increases based

on a return to a growing amount of money. We get no interest on retirement monies paid in to Social Security.

Let’s look at what is really going on. By law, individuals and their employers

currently pay an annual Social Security tax of 12.4 percent on the fi rst $110,100 of annual wages and salaries. Th e tax would amount to $13,652.40 on $110,100. Th at amount of money could equal mortgage payments for an entire year or a year’s worth of tuition plus room and board at a state university.

More importantly, the money taken out in Social Security taxes could be invested in separate individual accounts, based on U.S. stock index funds, such as the Standard & Poor’s 500, one of the most widely used benchmarks in U.S. stocks. As of July 30 this year, the average rate of return over the last 40 years for the S&P 500, was 10.49 percent. Over an individual’s working life, say from 26 years of age to 66, the total of 40 years of annual Social Security taxes at the current maximum income of $110,100 would equal

$546,096. Assuming the historical annual compound rate of growth of the S&P 500 stock index at 10.49 percent, an individual’s retirement savings would be $6,887,422.

Th us the benefi t the individual receives from compounding of their individual tax account is the diff erence between the amount of taxes and the fi nal account balance. Th at equals $6,341,326. As previously stated, compounding is the most fundamental benefi t of investment.

Since most people don’t make $110,100 a year, let’s take an average person’s income. Currently the average salary in the U.S. is estimated to be $47,000 annually. Th e 12.4 percent Social Security tax on that amounts to $5,828 per year or $233,120 over 40 years. Applying the same rate of growth of the stock fund, after 40 years the average individual would have a retirement account of $3,234,581. Th at spectacular amount of money results from individual accounts enjoying the benefi ts of a rate of return being applied to a growing amount of principal. In this example, compounding accounts for 93 percent of the retirement account.

Th at is money that should belong to the individual for retirement. Instead under Social Security the federal government spends it.

It is misleading to not even mention the

lost fi nancial opportunity for growth. Th e loss of opportunity to have Social Security taxes grow in an individual account through compound interest is far more signifi cant than whether a retiree receives as much from Social Security as he or she pays into it. Th at means the government believes a zero percent rate of return on Social Security taxes is a good deal. Indeed it even suggests that a negative rate of return on Social Security taxes is a good deal.

One reason citizens do not have their own individual Social Security tax accounts is that the federal government has for almost 30 years been using the funds for other purposes and leaving IOUs — IOUs that contribute to a total budget defi cit of $2.7 trillion. And now, the government is looking at adding $166 billion to cover this year’s shortfall in money coming in from Social Security taxes.

So what is a citizen to do?Demand a change.Individual accounts for Social Security

taxes would create a nation of savers rather than a nation clamoring for dependency on government. But that may have been a goal of Social Security all along.

Steven Cole, a commercial real estate appraiser in Tucson since 1975, is president of Southwest Appraisal Associates.

STEVE COLE


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