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1912 ARIZONA 2012

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JULY 29, 2011

Exploring the road ahead for Arizona’s

next 100 years

20 ARIZONA’S CENTENNIAL PHOENIX BUSINESS JOURNAL July 29, 2011phoenix.bizjournals.com

View Avnet’s history on www.avnetondemand.com

Roy ValleeChairman and CEO, Avnet

Celebrating Avnet’s 50th year on the New York Stock Exchange.

Founder/CEO Charles Avnet (middle) flanked by

sons Lester and Robert Avnet, who both served

as Avnet CEO after their father.

Since the Avnet family started selling surplus radio parts in New York City in 1921, Avnet’s leaders and talented employees have defined what makes a world-class company. On December 15, 2010, Avnet commemorated a milestone that only 350 other companies have ever achieved in the history of the New York Stock Exchange – we celebrated our 50th anniversary on the NYSE. This milestone distinguishes Avnet as a premier company – one with global scale and scope, five decades of demonstrated adaptability, a strong global culture, and leading financial strength. It is these capabilities that

have allowed Avnet to grow consistently and profitably over time, and become the leader in technology distribution. Avnet would like to thank our 16,000 plus employees who have made our company so great, our trading partners who have placed their trust in us to deliver the highest service and value, our shareholders who invest in us as well as our business and community partners who work with us to help make the world a better place to live and work. We are proud of our legacy and look forward to achieving far more in the next 50 years than we can only imagine today!

A Legacy of Industry Leadership

We are extremely proud to be a part of Arizona’s Centennial Celebration.

Founded by Arizonans with deep roots in our communities, Alliance Bank has both pride in our state’s history and an unwavering commitment to Arizona’s future growth and prosperity. From inception in 2003, Alliance Bank has always been a reliable Arizona business lending resource, posting loan growth of $182 million in 2010, while maintaining strong capital and liquidity positions. We are also proud that our parent Western Alliance Bancorporation, is the newest publicly held company to be headquartered in Arizona and ranks as the 88th largest publicly held banking company in the U.S.

We are grateful to our state’s leadership over the fi rst 100 years and look ahead with optimism as we continue together to build a better future for all in this magnifi cent state we call home.

Sincerely,

James H. Lundy Chief Executive Offi cer

Sincerely,

d

Over the last 100 years, Arizona has faced and overcome many challenges. Issues

surrounding infrastructure, economic growth, and resources will continue to be major concerns. How we handle these challenges today will greatly impact Arizona’s future. As the state begins to recover from the effects of the recession, our success will be dependent on the collaboration of political, business and community leaders who are focused on moving the state forward.

For over seventy years, Jennings, Strouss & Salmon has played an instrumental role in helping shape Arizona’s dynamic growth. With generations of legal knowledge and experience, combined with fresh, new ideas, we help clients prepare for the future. We welcome the opportunity to help you build on your success.

Jennings, Strouss & Salmon is proud serve Arizona communities and we look forward to participating in the amazing things to come in the next century.

Sincerely,

J. Scott Rhodes Managing AttorneyJennings, Strouss & Salmon, PLC

y

July 29, 2011 PHOENIX BUSINESS JOURNAL ARIZONA’S CENTENNIAL 21 phoenix.bizjournals.com

Arizonans have done a lot in the past 100 years to help the state get where it is today.

But it’s still a long way from where gov-ernment and business leaders want it to be 100 years from now. The state’s centennial represents a time to refl ect, but also a time to look at what challenges Arizona faces go-

ing forward.The fi rst is defi ning

new industries. Many of the “Five C’s” that buoyed Arizona during its infancy aren’t what they used to be, and the state is looking at other industry sectors to pick up the slack on job creation.

There are other fac-tors as well. The state’s

business environment and how it relates to the development of new industries likely will play a role in how Arizona grows.

Then there are the rivalries. Sure, there’s always been ASU vs. UA, but geographic competitions also have played a part in eco-nomic development, and it can be both good and bad for Arizona going forward.

Then there’s infrastructure investment, from power lines and water to technology.

The second in the Phoenix Business Jour-nal’s four-part look at the Arizona centen-nial focuses on how the Valley and state are pivoting to prepare for the future.

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tbusiness environme

Patrick O’GradyProject Editor

Arizona pivots to face next 100 years

The Five C’s revisitedArizona has a long history with copper, cotton, cattle, citrus and climate, and they all still are contributing to the economy — some more than others. 22

The ListRanking the most signifi cant events in Arizona’s history. 23

Regional rivalriesThe state is no stranger to rivalries, whether it is the East and West Valleys competing for business or sports battles between Arizona

State University and the University of Arizona. 24

Leaders talk regionalismEast Valley Partnership President and CEO Roc Arnett and Westmarc President and CEO Michelle Rider talk about what’s good and bad about regionalism, and what the Valley will see in the future. 24

Key factorsGlenn Hamer, president and CEO of the Arizona Chamber of Commerce & Industry, discusses what factors will be key to the state’s future business

success — and a lot is riding on education. 25

Business changesCompanies have had

to adapt to many changes in the past

100 years, but the past 20 to 30 years have prepared Arizona most

for the next century. 26

Timeline, 1937-62A look at the businesses and organizations that made waves 50 to 75 years ago. 28

Arizona By the NumbersThe state and Valley have done a lot of growing, and projections call for that to continue during the next 25 to 50 years. 29

Environmental concernsWith a bounty of land yet to be developed, Arizona will face continuing clashes between what’s good for growth and what’s good for the environment. 32

Budding infrastructureWith greater population comes more strain on the Valley and state’s infrastructure, including roads and power lines. 34

In the cloudThe Phoenix area could be a hub for technology infrastructure based on a number of factors, and it already has a head start in the telecommunications sector. 35

Foreign investmentGlenn Williamson, founder and CEO of the Canada Arizona Business Council, believes foreign direct investment is one of the keys to Arizona’s economic success. 36

y p gfor business or sports battles between Arizona

y,discusses what factors will bekey to the state’s future business

success — and a lot is riding oneducation. 25

Business changesCompanies have had

to adapt to manychanges in the past

100 years, but thepast 20 to 30 yearshave prepared Arizona most

for the next century. 26

TABLE OF CONTENTS

Metro light rail became theValley’s latest mode of public transportation when it beganrunning in December 2008.JIM POULIN PHOTOS | PHOENIX BUSINESS JOURNAL

STAFFPatrick O’Grady: Project editor

Kat Bryant: Copy editor

Jim Poulin: Photo editor

Amy Morrison: Graphic designer

As we celebrate Avnet’s 50th Anniversary on the NYSE, it’s a time to refl ect

on Avnet’s history of corporate citizenship – from green initiatives focused on reducing the company’s global carbon footprint to award-winning community relations programs focused on education, children’s issues and technology.

Through programs such as Dollars for Doers and Matching Grants, Avnet Cares encourages and supports employee volunteer efforts in their local communities.

From HandsOn Greater Phoenix to Avnet Tech Games, from back-to-school and holiday drives to serving on nonprofi t boards of directors, Avnet employees exemplify the generosity at the heart of our community outreach efforts.

Thank you to all our employees, business and community partners who work tirelessly to make our world a better place to live.

Sincerely,

Teri Radosevich Vice President,Community Relations and Public Affairs

gn eys 36

STAFFPatrick O’Grady:Projecj t editor

Kat Bryant:CCopCopy ey editditditoror

Jim Poulin:Photo editor

Amy Morrison:GraGraphiphip c dc desiesignegneg rr

ucturellatatioionn cocomemeValley and

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22 ARIZONA’S CENTENNIAL PHOENIX BUSINESS JOURNAL July 29, 2011 phoenix.bizjournals.com

BY JENNIFER A. JOHNSON | Phoenix Business Journal

The Five C’s revisitedThe industries Arizona once thrived on still part of the equation

Arizona’s economy has evolved from its mining and agricultural foundation since it was granted statehood in 1912.

Aerospace, defense, technology, renewable en-ergy, health care and small business represent Arizona’s economic future. Still, the state’s traditional Five C’s — cotton, citrus, copper, cattle and climate — remain an inte-gral part of its economy after nurturing Arizona through its fi rst 100 years.

“Some people want to dismiss the Five C’s, but they are still pretty darn important,” said Barry Broome, president and CEO of the Greater Phoenix Economic Council.

Some of the bedrock C’s have fared better than others.

At one point, Arizona was the country’s largest producer of cotton. Today it is a relatively small producer compared with Texas, Georgia and some others, but it still

is holding its own, according to Rick Lavis, executive vice president of the Arizona Cotton Growers Association.

Much of the state’s cotton production still is based around the Phoenix area. Farmers had a good year in 2010, prompting them to plant more in 2011, Lavis said.

Arizona farmers planted 261,000 acres of cotton for the 2011 crop year, up from 197,500 in 2010, according to USDA data released June 30.

“We are defi nitely in an upswing,” said Lavis. “If the price is right, we will continue to see growth.”

The demand for cotton remains strong, but ur-ban development in the past few decades has

swallowed expansive swaths of agri-cultural acreage, Lavis said.

As for citrus, Arizona still grows a tiny percentage,

but USDA data show it signifi cantly lags the leading pro-ducers: Florida, California and Texas.

Lee McPheters, director of the Economic Outlook Center at Arizona State Univer-sity’s W.P. Carey School of Business, said Arizonans shouldn’t write off the Five C’s despite declines in some of the agricultural commodities.

“Arizona is still a major player in many of these industries,” he said.

McPheters pointed out, for example, that the number of cattle in the state is increasing with the demand for milk in metropolitan areas such as Phoenix and Tucson.

Copper has remained strong through the years. Ari-zona is the largest U.S. copper producer, mining 703,000 metric tons of the metal in 2010. By comparison, the next fi ve largest U.S. producers — Idaho, Missouri, Montana, Nevada, New Mexico and Utah — mined a total of 406,000 metric tons, according to data from the U.S. Geological Survey.

In 1910, Arizona produced 494,000 metric tons of copper. The state’s all-time high was of 1.94 million metric tons in 1997.

Mining giant Freeport-McMoRan Copper & Gold Inc. relocated its headquarters to the Valley after its acquisi-tion of Phoenix-based Phelps Dodge Corp. in 2007. Com-pany spokesman Eric Kinneberg said the Phoenix base was chosen because of its proximity to signifi cant mining operations in the Southwest, and because Phelps Dodge had a sizable number of Arizona employees.

Freeport alone contributes about $2.1 billion in direct and indirect economic impact to Arizona’s economy, ac-cording to a recent study by the L. William Seidman Re-search Institute at ASU’s Carey School.

BHP Billiton Ltd. and Asarco LLC also have signifi cant mining operations in Arizona. Resolution Copper Min-ing hopes to start digging at a site near Superior that’s been called the largest copper deposit in the U.S. — but that process has been stalled because the land is federally protected. Congress must approve a land swap before any

mining can take place there. “Mining is a very important industry

here,” said Broome. “This is a high-wage, high-impact industry. This isn’t a sector we should ignore.”

As for climate, the tourism industry ex-perienced a sharp downturn during the Great Recession, but the industry is seeing an uptick now, said Sherry Henry, director

of the Arizona Offi ce of Tourism.“The general consensus is that there is a lot of posi-

tive energy in the industry,” she said. “Tourism remains

Broome

McPheters

2011 crop year, up from 197,500 in 2010, according to USDAdata released June 30.

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CONTINUED ON PAGE 23

Henry

Freeport-McMoRan Copper & Gold Inc.’s Morenci mine, located in Southeast Arizona, about 50 miles northeast of Safford, is one of the North America’s largest producers of copper cathode.

PROVIDED BY FREEPORT-MCMORAN COPPER & GOLD INC.

Heavy demand for milk in Phoenix and Tucson has been good for the state’s cattle industry.


a cornerstone of Arizona’s economy.”The Grand Canyon, Saguaro National Park and other

Arizona wonders remain a huge lure for tourists, Henry said.

“You get this wonderful mix of everything you could possibly want,” she said. “You can have cocktails on the veranda in the morning and go skiing in the afternoon.”

While Arizona already has many upscale resorts and destinations, Henry said the appetite for new tourism-related projects will rebound with the economy.

In addition, the state’s American Indian communities are beginning to tap the growth potential of the casino in-

dustry as well as tribal tourism experiences, said Henry. “Tourism has a huge impact on the state, especially in

rural areas,” she said. “Getting people into those areas is so important.”

McPheters and Broome both pointed to health care as a major factor in the Arizona economy going forward.

“When you think about health care, you have a tremen-dous range of jobs,” McPheters said.

Broome also cited growth opportunities in life sciences, information technology and solar energy as keys to Ari-zona’s economy going forward.

Connect with Jennifer A. Johnson at [email protected] or on Twitter at @jajenni.

FROM PAGE 22

FILE PHOTOS

Tourism remains a cornerstone of Arizona’s economy with the Grand Canyon and other natural wonders luring visitors to the state. American Indian communities have helped grow the economy by opening casinos, including Scottsdale’s Casino Arizona, top left.

THELIST ARIZONA’S MOST SIGNIFICANT EVENTSHistorian Marshall Trimble ranks the top 25 since Feb. 14, 1912

Another look...A unique perspective

Rank Year Event

1 1941-1945 World War II brought major changes to Arizona. New industries came to state. Economy booms following Great Depression.

2 1949 The fi rst Motorola plant is built in Phoenix, ushering in a new era of high-technology manufacturing to the state.

3 1963 Arizona wins court decision with California over share of Colorado River water. Hopes revive for a Central Arizona Project to bring water to urban areas.

4 1968 Congress authorizes construction of the Central Arizona Project.

5 1936 Hoover (Boulder) Dam completed on the Colorado River.

6 1985 Central Arizona Project water reaches Phoenix.

7 1991 Central Arizona Project water reaches Tucson.

8 1964 Legislative reapportionment (one man, one vote) revamps districts to represent an equal number of people.

9 1912 Women win right to vote in Arizona.

10 1953 Arizona ends school segregation. The Civil Rights movement kicks into high gear.

11 1948 Native Americans gain the right to vote in Arizona.

12 1944 Legislature ratifi es the Colorado River Compact, setting the stage for the Central Arizona Project.

13 1968 I-10 from Phoenix to Tucson completed.

14 1978 I-17 completed to Flagstaff

15 1926 Route 66 opens across Northern Arizona.

16 1952 Rise of the GOP in Arizona. Barry Goldwater is elected to the Senate, John J. Rhodes is elected to the House and Howard Pyle is elected governor.

17 1964 Barry Goldwater is the Republican candidate for president.

18 1980 Arizona establishes Underground Water Code.

19 1946 Arizona becomes a right-to-work state

20 1929 Sky Harbor International Airport dedicated.

21 1991 Sandra Day O’Connor becomes fi rst woman appointed to U.S. Supreme Court.

22 1998 In a national fi rst, Arizona’s top fi ve elected offi cials are women: Jane Hull, Betsey Bayless, Janet Napolitano, Lisa Graham Keegan and Carol Springer.

23 1974 Raul Castro becomes Arizona’s fi rst Hispanic governor.

24 2001 Arizona Diamondbacks win 2001 World Series over New York Yankees.

25 1917 Striking Bisbee mine workers are deported by rail to New Mexico.

No look at Arizona’s Centennial would be anywhere near complete without consulting with Marshall Trimble.

Named Arizona’s offi cial state historian in 1997, Trimble is an educator, an author (more than 20 books), lecturer, consultant, folk singer and stage performer.

A Mesa native who grew up in Ash Fork and now lives in Scottsdale, Trimble has been referred to as the “Will Rogers of Arizona.”

While he has won nationwide acclaim for his presentations and his range from serious history lectures to stage shows of Western folk music and stories with his guitar, Trimble has been teaching Arizona history at Scottsdale Community College for 35 years.

MarshallTrimble

Regionalism has defi ned de-cades of growth in the Phoenix area, and nothing illustrates that quite as clearly as the division be-tween the East and West Valleys.

While the East Valley pros-pered with high-tech companies and housing communities in the latter part of the 20th century, the West Valley remained the outly-ing area, dominated by farming.

The past decade has seen some role reversal as West Valley com-munities have grown at a blister-

ing pace. The region has become a landing spot for many of the solar and renewable energy companies coming to Arizona.

Roc Arnett, president and CEO of the East Valley Partnership, and Michelle Rider, the new CEO of Westmarc, provide some in-sight on what makes regionalism in Phoenix work:

Why is regionalism good or bad for the Valley?

ARNETT: When re-gionalism is used for the good of the re-gion, it is obviously good. When groups, entities or parts of the region are against each other, regionalism is not good.

RIDER: Regionalism isn’t just good for the Valley; it is essential. Municipalities are a key source of economic development in the state of Arizona. Many recent wins for Arizona would have been lost had the municipalities not come together in support of a common goal. A good example of this is the municipalities’ support of state eco-

nomic development programs. Al-though some state-level programs may bring more direct benefi t to certain cities than others — such as a recent program to bring renewable energy manufacturing to Arizona — other municipalities realize that a rising tide lifts all boats, and indirect benefi ts will be worth their support. A good example is Luke Air Force Base and its candidacy for the F-35. Although Luke is in the West Valley, East Valley communities have spent considerable time and effort sup-porting the base.

What does regionalism look like now compared with 25 to 50 years ago?

ARNETT: One hundred years ago, the farmers and property owners of this region came together and mort-gaged their property to Congress to establish the Salt River Project and build the Roosevelt Dam. That was the ultimate in regionalism. A second example started 40 years ago, when some of our senior statesmen lob-bied Congress to build the Central Arizona Project canal, bringing an assured water supply to this region for years to come. A more recent ex-ample was in 1985, when the region

came together to pass the half-cent sales tax for freeways; and then again in 2004, when businesses and government entities came together to craft a 20-year transportation game plan and passed an extension of the half-cent sales tax. The region has benefi ted greatly from these major regional efforts.

RIDER: The practice of regionalism in Arizona seems to go in cycles. While regionalism seems to have been alive during the 1940s through the 1970s, the increasing strength of the state’s municipalities during a key growth period of the 1980s seems to have highlighted divisions among them. This enhanced competition caused community leadership to create re-gional organizations like the Greater Phoenix Economic Council to ensure that, in the case of an economic op-portunity not being a fi t for a certain municipality, the entire region has a chance to capture it. I think most would call that a major success for regionalism. Although competition at some level will always exist among

municipalities, there seems to be a broader and better understanding of the concept and its benefi ts now.

What are you looking at in the next century for economic growth?

ARNETT: Those regional next-generation industries will sustain the economy over a long period. Ex-amples of the past are the defense industry that was developed in the 1950s and ’60s in this region. Future industries that will drive economic growth for next generations include the entire gamut of emerging solar products; aviation, aerospace and defense; and the emerging biosci-ence and health care industries. Additionally, the research and edu-cation complex supporting these three industries will be a thriving industry in the future.

RIDER: The U.S. Mountain West in general, and Arizona in particu-lar, will be a hot spot for economic growth. Some communities in the West Valley are projected to grow up to 600 percent within the next 10 years alone. Regionalism will be a major factor as to whether the economic growth will be sustain-able or not.


BY MIKE SUNNUCKSPhoenix Business Journal

Arizona has developed just a few intrastate rivalries over the past 100 years.

Some of them are regional, such as Phoenix vs. Tucson; or even neighborly, such as Glendale and El Mirage clashing over Luke Air Force Base issues, or Phoe-nix and Scottsdale fi ghting over retail, transit and economic development.

There have been several rivalries among the leading business, sports and political fi gures in Arizona’s contemporary his-tory. Some of those have been toxic and personal. They have held back economic development and public policy, and sent out negative images about the state.

Valley cities’ bidding wars for shopping centers and malls in the past two decades have not fostered an economic develop-ment focus on high-wage jobs.

ASU and UA have sparred over programs and dollars, but those collegiate sports ri-vals have buried the hatchet on some pro-grams and budget issues.

Tom Kelly, CEO of Schaller Anderson, a health insurer, said one of the “less effec-tive” local rivalries involves Scottsdale and Phoenix. The years-long battle between the Valley’s largest city and its most affl uent major sub-urb have involved retailers, development and tax revenue along Scottsdale Road.

For example, Scottsdale opted not to be part of the Phoenix- and Tempe-backed Metro light rail system. This denied ASU denizens access to Old Town bars and Scottsdale Fashion Square. It also quashed potential tourism links between Scottsdale and Phoenix.

More recently, Scottsdale Mayor Jim

Lane eschewed an attempt by some busi-ness advocates to form an economic devel-opment alliance with Phoenix and Tempe. The Discovery Triangle effort was a push for transportation and economic develop-ment among the three cities. Lane said no thanks, believing a “three musketeers” approach might dilute Scottsdale’s brand, which already is pretty well-known.

Conversely, Kelly said Tempe and Phoe-nix have found common ground on issues such as transportation.

Lane’s predecessor, Mary Manross, had her own rival-ries within Scottsdale, turn-ing down plans by Steve Ellman to move the Phoe-nix Coyotes from downtown Phoenix to the former Los Arcos Mall site. Manross then opposed big-box stores planned for that location. Scottsdale ended up buying the parcel from Ellman, who moved the Coyotes to Glendale (where he now owns

the troubled Westgate City Center), while Scottsdale got the SkySong Innovation Center from ASU.

Glendale is the most recent epicenter of controversy. Spats there have included battling El Mirage over land annexations and F-35 training at Luke Air Force Base; fi ghting the Goldwater Institute over the city’s attempted deals to keep the Phoenix Coyotes at Jobing.com Arena; and oppos-ing the Tohono O’odham Nation’s plans for a casino at 95th and Northern avenues.

The Coyotes organization isn’t the only local sports franchise that has been caught up in battles. The Bidwill family, which owns the Arizona Cardinals, ran into nu-merous pitfalls in efforts to build a new stadium, which eventually landed in Glen-dale. The NFL team since has battled with the Fiesta Bowl over University of Phoe-nix Stadium and had a court fi ght with Glendale over signage near the stadium.

Also, Bill Bidwill took the Phoenix name off the Cardinals in 1994, renaming them

the Arizona Cardinals in hopes of at-tracting more fans to the underachieving

franchise. The change irked some Phoenix folks.

Ray Artigue, president of the Artigue Agency, says the biggest rivalry impact-ing the state may not be be-tween strong personalities or jurisdictions. Instead, the public relations veteran

cited an external clash, with Las Vegas and Nevada competing with the Grand Canyon State.

“Next up, of course, is Arpaio — and I guess you could say these days, it’s him against the world,” he said, referring to the Maricopa County sheriff ’s fi ghts with county offi cials, the media, Hispanic groups and even some fellow Arizona Republicans.

Connect with Mike Sunnucks at [email protected] or on Twitter at @mikesunx.

Arizona’s regional rivalries can hurt economic growth

Lane

Artigue

BY YVONNE GONZALEZPhoenix Business Journal

ing pace. The region haslanding spot for many ofand renewable energy cocoming to Arizona.

Roc Arnett, presidentof the East Valley Partand Michelle Rider, the nof Westmarc, provide sight on what makes regn Phoenix work:

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FILE PHOTOS

Manross

Metro Light Rail University of Phoenix Stadium SkySong Innovation Center

When I was shopping law schools 20 years ago, I found myself on the Arizona State Univer-sity campus in Tempe in early

spring. The sun was shining, there were leaves on the trees and there wasn’t a snowfl ake in sight. In other words, it was

the exact opposite of New York, which was my home at the time. I was sold.

After law school, I had a chance to work in Washington for two great Arizonans: U.S. Sen. Jon Kyl and Rep. Matt Salmon. Even liv-ing in the Beltway, it was like I’d never left Arizona.

Fast-forward to 2004, when my wife and I

were preparing to move back to Arizona with our kids. The questions at the front of our minds were suddenly more substantive than the weather: How were the schools? What part of town would we live in?

I’m an unabashed cheerleader for our state. I believe there’s no better place in the country to work and raise a family. Even in the midst of this weak economy, Arizona is in a great position, poised to reach new heights in the next 100 years.

We’re fortunate to be in a golden age of reform, with a governor and a Legislature working together to make our state even stronger.

Consider where we were just a few years ago: At the onset of the Great Recession, Arizona was lumped in with such basket cases as New York, New Jersey and Cali-fornia. Faced with a crippling budget short-fall, some were saying our best days were behind us.

But the Legislature and governor in 2011 rallied together to pass a once-in-a-generation economic competitiveness package to make our state more attractive to job creators. Our state is now better posi-tioned to emerge from this downturn ready to compete for good jobs.

We could have gone in the opposite direc-tion. Faced with a growing budget gap of its own, Illinois instituted a huge corpo-rate tax increase. While Arizona no longer is showing up on those lists of declining states, Illinois is watching its employers leave the state.

This legislative session also saw jobs-friendly reforms in the legal and labor environment that ensure defendants’ ac-cess to the appeals process and protect employee paychecks from union political agendas.

But going forward, let’s keep our foot on the gas pedal. It’s no coincidence that Texas, the state that has shown the most post-recession job growth, also has pursued the most aggressive tort reform agenda.

Arizona also must continue its jobs-friendly posture toward red tape. When Gov. Jan Brewer took offi ce, her fi rst move was to put a freeze on new regulations. That signifi cant move was followed up by the Legislature’s passage of a sweeping regu-latory reform package.

Another critical determinant of whether the next 100 years will be prosperous is the quality of our education system. From K-12

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MY VIEW

Glenn Hamer

through college, our education system is tied directly to our state’s potential for eco-nomic success. We can’t hope to compete with other states for high-paying jobs if our pipeline of qualifi ed college graduates is dry, nor can we attract new business here if our commitment to a quality K-12 system is lacking.

In the past few years, taking a page from Florida’s playbook, Arizona has passed a number of reforms to make our education system more transparent and accountable.

There’s no single public policy innova-tion that will lead to economic success

in our second century as a state. Rather than tinkering here and there, I would encourage our lead-ers to adopt an “all of the above” approach to public policy. By fos-tering an environment that pro-motes entrepreneurial spirit and innovation, Arizona’s next 100 years will have many more highs than lows.

Glenn Hamer is president and CEO of the Arizona Chamber of Commerce & Industry, which also includes the Arizona Manufacturers Council. Reach him at [email protected]


Education, jobs key to Arizona’s future success

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BY LYNN DUCEYPhoenix Business Journal

In 100 years, the Arizona economy has evolved from a hardscrab-ble group of farmers into a budding tech and bioscience hub.

These changes did not occur overnight. In fact, local leaders say it wasn’t until relatively recently that Phoenix started to

shake off its Old West image.“There is a dramatic difference between the 1970s and 1980s and

where we are now,” said Martin Shultz, senior policy director at Brownstein Hyatt Farber Schreck, a Denver-based law fi rm with of-fi ces in Phoenix.

“We had a concentration of business and political leaders who knew each other, grew up together and worked together,” he said. “Today, we have so many new leaders that have really just come to town in a matter of less than a decade.”

Shultz saw the Valley’s business community change from a unique vantage point. The retired Arizona Public Service Co. executive served as chief of staff for three Phoenix mayors: John Driggs, Tim Barrow and Margaret Hance.

“When I came to Phoenix in 1953, we had less than 500,000 people,” he said. “Today it is three times that amount, and our metro area is estimated at about 4.6 million.”

GROWING UPTony Narducci, president of O’Neil Printing, has watched the

changes in the city’s core since he started working at the company’s headquarters on Second Avenue in the early 1980s.

“There has really been an amazing change,” he said. “With the advent of the (Arizona State University) campus downtown, that has really made some of the biggest changes in the downtown demographic in my mind.”

O’Neil Printing was founded in 1908, making it four years older than the state.

“In the very beginning, our founder Bucky O’Neil’s business was a typewriter letter-writing business,” Narducci said. “He had people set up in rooms who would reproduce handwritten documents by typewriter.”

O’Neil then mailed those documents to local residents using voter records.

Technology has changed the way the company operates: It now uses digital photography, printing and computer processes to create a range of printed materials.

“It wasn’t until fi ve years ago that we got back into the mail services business as part of our product offerings, so we really have come full circle,” Narducci said.

The Valley’s growth has meant different things to everyone. The lack of highways is something Evelyn Casuga, general manager of community development at APS, remembers quite well.

“If I were driving from Eloy to a lunch in Phoenix, I was lucky. I had Interstate 10,” she said. “But it took anyone driving from Gilbert or Buckeye just as long, because they were using only surface streets.”

Casuga became the fi rst female city manager of Eloy in the mid-1980s and has spent decades working across the state to

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the Arizona economy has evolved from a hardscrab-f farmers into a budding tech and bioscience hub.anges did not occur overnight. In fact, local leaders

n’t until relatively recently that Phoenix started tod West image.ramatic difference between the 1970s and 1980s andnow,” said Martin Shultz, senior policy director atatt Farber Schreck, a Denver-based law fi rm with of-x.ncentration of business and political leaders who

er, grew up together and worked together,” he said.e so many new leaders that have really just come tor of less than a decade.”e Valley’s business community change from a uniqueThe retired Arizona Public Service Co. executiveof staff for three Phoenix mayors: John Driggs, Tim

argaret Hance.e to Phoenix in 1953, we had less than 500,000 people,”

itit i iss ththrereee titimemess ththatat a amomoununt,t, a andnd o ourur m metetroro a arereaa isisout 4.6 million.”

cci, president of O’Neil Printing, has watched thecity’s core since he started working at the company’sheadquarters on Second Avenue in the early 1980s.

“There has really been an amazing change,” he said.With the advent of the (Arizona State University)ampus downtown, that has really made some of theiggest changes in the downtown demographic in my

mind.”O’Neil Printing was founded in 1908, making it four

ears older than the state.“In the very beginning, our founder Bucky O’Neil’s

typewriter letter-writing business,” Narducci said. set up in rooms who would reproduce handwrittenypewriter.”

mailed those documents to local residents using voter

Technology has changed the way the company operates: Itnow uses digital photography, printing and computer processesto create a range of printed materials.

“It wasn’t until fi ve years ago that we got back into the mailservices business as part of our product offerings, so we reallyhave come full circle,” Narducci said.

The Valley’s growth has meant different things to everyone.The lack of highways is something Evelyn Casuga, generalmanager of community development at APS, remembers quitewell.

“If I were driving from Eloy to a lunch in Phoenix, I was lucky.I had Interstate 10,” she said. “But it took anyone driving fromGilbert or Buckeye just as long, because they were using onlysurface streets.”

Casuga became the fi rst female city manager of Eloy in themid-1980s and has spent decades working across the state to

Technology propels state forwardAdvances in transportation, communication, other areas aiding growth

Narducci


PROVIDED BY O’NEIL PRINTING

O’Neil Printing, founded locally in 1908, has adopted some new technologies to keep the company competitive.

Left, the opening of Metro light rail in 2008 was a huge advance for Valley transportation.

Right, Phoenix’s CityScape project is helping draw interest to downtown.

JIM POULIN | PHOENIX BUSINESS JOURNAL


help build communities’ infrastructure and economic development. She sees that even more clearly in her work with the state’s largest utility.

“APS and the state of Arizona have been tied at the hip with successes and challenges since day one,” Casuga said. “Infrastructure of all sorts is key to

the prosperity of the state.”APS traces its roots back to 1886, but took its current form in 1952. To-

day, the electrical utility has more than 1.1 million customers across 11 of Arizona’s 15 counties.

Salt River Project supplies both power and water to Arizona communi-ties. SRP spokeswoman Gena Trimble has seen changes during her 28 years in the business community, and technology has had a large impact.

“There were no cellphones, so if you were out of the offi ce, you were out of the offi ce. There wasn’t even voice mail,” she said.

Cellphones, email and voice mail are just small ways technology has changed business, particularly for SRP. In the past three years, tech-nology has allowed meters to become more responsive and helped customers choose electrical plans, prepay for electrical usage and use the Internet to pay their bills.

“Everything got done back then, but it was just slower,” Trimble said.

MOVING ONAs the Valley’s population has grown, so has the busi-

ness community, Shultz said.“We have become a rather mobile society and business community in

many regards. So instead of having strong individual leaders, we have strong organizations,” he said.

Shultz said it’s important to note how much has changed in the Valley during a relatively short time.

Funding for the freeway system was approved in 1985 by voters. That plus subsequent funding measures helped create U.S. 60, State Route 51, and Loops 101 and 202.

Roads and utilities have been key to developing a strong business foundation, said Dave Roderique, president and CEO of the Downtown Phoenix Partnership. Lately it has been Metro light rail laying a founda-

tion for future business growth in the corridor stretching from Phoenix to Mesa.

“Light rail is far more than just a transportation mech-anism,” he said. “It serves as a redevelopment tool.”

Downtown Phoenix has seen signifi cant changes in the past few years as the city looks to pivot from its past. Chase Field opened in 1998 as Bank One Ballpark. Ari-zona State University’s downtown campus also is a key arrival to the city’s core in the past decade.

In addition, Roderique said the Downtown Biomedical Campus — in-cluding the Translational Genomics Research Institute, the University of Arizona College of Medicine–Phoenix and the planned develop-ment of a research lab by Boyer Co. downtown — “is going to be a big economic driver, and ultimately will be the largest economic sector in downtown.”

Shultz agreed. He is chairman of the Arizona Bioscience Roadmap Steering Committee, an effort by the Flinn Foundation and other science-focused groups to develop the biomedical industry across the state.

“We have had a strong eight- to 10-year run with this industry. This is technology related to human genomics, improvements to health care and personalized medicine and medical devices,” Shultz said.

Roderique said spurring economic development is a long-term task. During his tenure as economic vitality manager of Scottsdale, the city landed the Mayo Clinic; development began on the Scottsdale Water-front; and improvements were undertaken at the Scottsdale Airport and in the city’s downtown area.

In Phoenix, health care and education are leading the charge. The ar-

rival of UnitedHealthcare in the new CityScape complex is one example of the new drawing power of downtown, Roderique said.

“We are really trying to stress our urban environment, looking for a broad, mixed use of activities,” he said.

Until very recently, much of the Valley’s development has been focused on Phoenix and its eastern suburbs. But in the past 10 years, the West Valley has seen more commercial and residential growth, said Don Rinehart, president and CEO of the Glendale Chamber of Commerce.

“It’s really been during that decade, since the early 1990s, that the West Valley has taken off,” Rinehart said. “Before that, there was no football sta-dium, there was no Loop 101. The really major destination or attraction was the Wigwam (Resort).”

Connect with Lynn Ducey at [email protected] or on Twitter at @PHXBizLynn.

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the prosperity of the state.”APS traces its roots back to 1886, but took its current for

day, the electrical utility has more than 1.1 million customof Arizona’s 15 counties.

Salt River Project supplies both power and water to Arizoties. SRP spokeswoman Gena Trimble has seen changes durinin the business community, and technology has had a large

“There were no cellphones, so if you were out of the ofout of the offi ce. There wasn’t even voice mail,” she said

Cellphones, email and voice mail are just small ways techanged business, particularly for SRP. In the past threnology has allowed meters to become more responsiveand helped customers choose electrical plans, prepay forelectrical usage and use the Internet to pay their bills.

“Everything got done back then, but it was just slower,”Trimble said.

MOVING ONAs the Valley’s population has grown, so has the busi-

ness community, Shultz said.“We have become a rather mobile society and business c

many regards. So instead of having strong individual leastrong organizations,” he said.

Shultz said it’s important to note how much has changeduring a relatively short time.

FuFundndiningg foforr ththee frfreeeewawayy sysyststemem w wasas a apppprorovevedd inin 1 1989855 bbplus subsequent funding measures helped create U.S. 60, Sand Loops 101 and 202.

Roads and utilities have been key to developing a strfoundation, said Dave Roderique, president and CEO of tPhoenix Partnership. Lately it has been Metro light rail la

tion for future business growth in the corrifrom Phoenix to Mesa.

“Light rail is far more than just a transpoanism,” he said. “It serves as a redevelopm

Downtown Phoenix has seen signifi canthe past few years as the city looks to pivotChase Field opened in 1998 as Bank One Bzona State University’s downtown campuarrival to the city’s core in the past decade

In addition, Roderique said the Downtown Biomedicalcluding the Translational Genomics Research Institute, tof Arizona College of Medicine–Phoenix and the planment of a research lab by Boyer Co. downtown — “is goieconomic driver, and ultimately will be the largest econodowntown.”

Shultz agreed. He is chairman of the Arizona BioscieSteering Committee, an effort by the Flinn Foundation andfocused groups to develop the biomedical industry across

“We have had a strong eight- to 10-year run with this indtechnology related to human genomics, improvements to hpersonalized medicine and medical devices,” Shultz said.

Roderique said spurring economic development is a loDuring his tenure as economic vitality manager of Scottlanded the Mayo Clinic; development began on the Scotfront; and improvements were undertaken at the Scottsdain the city’s downtown area.

In Phoenix, health care and education are leading the c

FROM PAGE 26

Roderique

ShultzJIM POULIN PHOTOS | PHOENIX BUSINESS JOURNAL

Arizona State University opening a new downtown Phoenix campus, above, was a boon for the area. The Downtown Biomedical Campus, below, is also expected to be a signifi cant economic driver.

th Lynn Ducey at [email protected] or on Twitter at @PHXBizLynn.Connect wit

Freeway funding was approved by voters in 1985. That and other fi nancing measures helped improve the Valley freeway system with the additions of U.S. 60, State Route 51, and Loops 101 and 202.FILE PHOTOS

Chase Field


1937Jennings Haug & Cunningham LLP opens law offi ces in Phoenix.

1938• The Arizona Hotel & Lodging Association is formed as the

state becomes a destination for travelers.• Snell & Wilmer LLP begins legal services in Phoenix.

1939• The Arizona Restaurant Association begins operations as

a trade group for that burgeoning industry. • Blue Cross Blue Shield of Arizona begins providing health

insurance in the state.• The Desert Botanical Garden is formed, providing a

research facility and viewing area for native desert plants.

1940• State Route 69 from Phoenix to Prescott, a precursor to

Interstate 17, is fi nished.• Naumann Hobbs Material Handling opens in Phoenix,

providing local businesses with storage and product movement systems.

1941• Luke Air Force Base is founded, named

after Lt. Frank Luke Jr., an Arizona native and the fi rst U.S. aviator to receive the Congressional Medal of Honor.

• Williams Air Force Base is founded as the fi rst U.S. base to train foreign allied pilots. It’s named in honor of 1st Lt. Charles Linton Williams.

1942• Honeywell International Inc. begins its Arizona operations.• Jennings, Strouss & Salmon LLP opens its law offi ces.

1943• The National Federation of Independent Businesses starts

its Arizona operation.• United Blood Services begins collecting blood.

1944Hunt Construction Group Inc. sets up operations in

the Valley.

1945Arizona State Teachers College campuses in Tempe and

Flagstaff change their names to Arizona State College.

1946Boys and Girls Clubs of Metropolitan Phoenix opens its

doors, providing after-school and summer programs.

1947• A fi re destroys the Phoenix Street Railway fl eet, forcing the

city to shift from using rail cars as a means of transporta-tion to buses and cars.

• Hanny’s building is completed in downtown Phoenix.• Goodwill of Central Arizona begins

collecting items to help the less fortunate.

• Scottsdale Area Chamber of Commerce forms.• Mass-produced, low-

cost air conditioning becomes available.

1948• The Arizona Builders Alliance begins operations.• Arizona Hispanic Chamber of Commerce opens.• Ryley Carlock & Applewhite PA begins legal services in Phoenix.

1949Motorola Inc. establishes its fi rst research and development

facility in Phoenix to study solid-state technology.

1950• Kitchell Corp. begins construction operations in Phoenix.• Empire Southwest Inc., a supplier of generators and equip-

ment used in construction and farming, opens in Mesa.• Lewis and Roca LLP opens its law offi ces in Phoenix.

1951• The Home Builders Association of Central Arizona is formed.• Hughes Missile Systems Co. begins operations in Tucson.• Glendale Chamber of Commerce is formed.

1952• Phoenix Sky Harbor Airport opens its fi rst terminal, built

by Mardian Construction Co., at a cost of $835,000.• The Arizona Broadcasters Association starts operations.• The Phoenix Rescue Mission begins providing meals,

shelter and programs to the less fortunate.

1953• Goodmans Interior Structures, a supplier of offi ce

furniture and interior design services, opens.• Motorola opens operations that eventually will become

Freescale Semiconductor.

1954• Developer John F. Long begins construction of Maryvale.

Named after his wife, the development became a model for other master-planned communities Valleywide.

• State Route 79 is completed from Phoenix to Flagstaff, linking the two cities — but not by interstate standards.

• The Arizona Automobile Dealers Association begins operations.

• Boys & Girls Clubs of Greater Scottsdale forms.

1955• Youngtown, the fi rst age-restricted community in the U.S.,

is established in the West Valley.• Hensley Beverage Co., the largest distributor of Anheuser-

Busch products in Arizona, begins shipping drinks.• Southwest Valley Chamber of Commerce is formed.

1956The Arizona Contractors Association begins representing

builders.

1957The Arizona Humane Society opens its doors.

1958• Arizona

State College becomes Arizona State University on the strength of a public vote, which greatly expanded the Tempe institution’s mission.

• The American Marketing Association starts its Phoenix Chapter.

1959• The Arizona Nursery Association is formed.• The American Institute of Architects opens a Phoenix branch.

1960• Jets begin arriving at Phoenix Sky Harbor Airport, with

fl ights between the Valley and Chicago and New York.• Sun City opens, drawing thousands of people to view the

fi rst model homes at the nation’s largest age-restricted community. The Del E. Webb Development Co. went on to build more in Arizona and across the country before it was purchased by PulteGroup in 2001.

• Discount Tire Co. is established in Phoenix.• United Dairymen of Arizona, a trade group for the agricul-

tural industry, begins operations.• American Express starts business operations in Arizona.

Its local offi ces since have grown to more than 7,300 employees.

• Fry’s Food and Drug stores branch out of California with the company’s fi rst Arizona location.

• Brown & Bain (now Perkins Coie Brown & Bain) begins legal services in Phoenix.

1961Chandler Regional Medical Center opens.

1962• Terminal 2 opens at Sky Harbor at a cost of $2.7 million,

including roads and a 1,000-car parking lot.• Scottsdale Healthcare begins providing medical services

with the opening of its Osborn Medical Center campus.• The private, nonprofi t Phoenix Zoo opens.

Modern marvels The 20th century introduces new companies, technological advances to Arizona

Luke Jr.

PROVIDED BY ARIZONA STATE UNIVERSITY

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A rendering of Phoeinx Sky Harbor Airport’s Terminal 2 that opened in 1962

PROVIDED BY PHOENIX AIRPORT MUSEUM

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Turn back the clock fi ve years, and Arizona may have been the hottest state in the country for

economic growth. The housing market was in

a frenzy, unemployment was low, development of all kinds was booming and the tourism sector was buzzing with big, new resorts.

One Great Recession later, Arizona’s economy is as bat-tered and bruised as any other in the country. The housing collapse has mired the state in a deep rut from which it’s still trying to escape.

The latest projections for Arizona’s economy show the worst is over, and another pe-riod of strong growth may be in its infancy.

The data and projections on this page come from the University of Arizona’s Eller College of Management. That college’s Economic & Business Research Center publishes the state’s most detailed and continually up-dated economic projections. It shows the job market should begin to accelerate next year, and we could be back in the middle of another classic Ar-izona “boom” period within five years.

Looking further down the road at 30-year projections, the news is bright for Arizona. The population is expected to nearly double in that time, and retail sales should grow by more than 400 percent.

While we can’t exactly turn the clock ahead fi ve years, let alone 30, to see how Arizona’s economy is faring, the num-bers on this page should pro-vide a few clues.

Where’s Arizona headed?BY THE NUMBERS

BY ADAM KRESS [email protected]

PHOENIX METRO PROJECTIONS

POPULATION FACTS• Today, Arizona’s population of 6.7 million

ranks 13th among the states. In 30 years, Arizona could be the seventh-largest state, overtaking Virginia, New Jersey, North Carolina, Georgia, Michigan and Ohio.

• Right now, two-thirds of Arizona’s population resides in the Phoenix metro area. That number should rise to 74 percent by 2040.

Population (annual change):

Nonfarm employment (annual change):

Retail sales (annual change):

Per-capita personal income (annual change):

INCOME AND JOB FACTS• More than 2.5 million jobs will be

created in Arizona over the next three decades, boosting the total to 4.9 million.

• Arizona’s per-capita personal income relative to the nation will continue its downward slide from 84 percent today to about 77 percent 30 years from now. The ratio peaked at 95 percent in 1971.

• Retail sales relative to income will continue to fall, dropping from nearly 45 percent in the mid-1960s to 18.5 percent by 2040.

• Sectors that will lose the most jobs over the next 30 years: manufacturing, government, utilities, retail trade and mining.

• Sectors that will gain the most jobs over the next 30 years: professional and business services, health care and social assistance, and fi nancial services.

LONG-TERM ARIZONA PROJECTIONS

Residential permits:

Population (annual change):

Nonfarm employment (annual change):

Source: University of Arizona Eller College of Management Economic & Business Research Center

Retail sales:

Total personal income: Nonfarm jobs:

Population:

Retail sales (annual change):

Per capita personal income (annual change):

ARIZONA PROJECTIONSResidential building permits:

created in Arizona ovethree decades, boostinto 4.9 million.

• Arizona’s per-capita pincome relative to the continue its downward84 percent today to ab77 percent 30 years froThe ratio peaked at 95in 1971.

• Retail sales relative to continue to fall, droppnearly 45 percent in thto 18.5 percent by 204

• Sectors that will most jobs over th30 years: manufagovernment, utiltrade and mining

• Sectors that will gain tover the next 30 yearsand business services,and social assistance, services.


ADVERTORIAL

As commercial contractors surveyed the post World War II scene in Ari-zona they saw a market fi lled with

opportunities and challenges. Arizona was sure to be one of the states that would see population growth and economic oppor-tunity. They knew there were going to be challenges associated with that growth. The contractors knew they would need an effective trade association to represent their interests. Some of the pioneers of the com-mercial construction industry were names like Del Webb, Dan Mardian and John Sundt.

In 1948 those men, and other pioneers in commercial contracting, formed the Build-ing Chapter of the Associated General Con-tractors. The AGC worked to assist contrac-tors in educating and training a productive workforce, collective bargaining and repre-senting the industry before state and local government.

In 1994 the AGC merged with the Asso-ciated Builders and Contractors. ABC was a national association created in 1950 to rep-resent the “merit shop” or non-union indus-try. Merit shop contractors formed the ABC

to deal with the issue of unions and govern-ment trying to deny contracting opportuni-ties to non-union fi rms. Over the years the two groups in Arizona had moved towards each other in both philosophy and the in-terest in high caliber educational programs. The merger combined the services of each group into a single trade association serving the needs of the commercial construction industry. The ABA would be a unique as-sociation representing general contractors, subcontractors, merit shop and union com-panies all in one effi cient organization.

In the 17 years since the merger the ABA has fulfi lled the promise for which it was created. We have concentrated the efforts of the industry in dealing with three major areas; government relations, management education and craft training.

In the last several years the ABA has been instrumental in passing major pieces of legislation affecting commercial builders. ABA supported the passage of “Construc-tion Payment Practices” legislation. It dra-matically improved the rights of contrac-tors to be made aware of clauses impacting

The City of Chandler, Ariz., located in the southeast valley adjacent to Phoenix, now has its fi rst city-owned City Hall Complex in the municipality’s 120-year history.

Sundt recently completed the $47 million Construction Manager at Risk project. The 140,000-square-foot complex includes a six-story offi ce tower to house administrative offi ces as well as adjacent buildings to serve as the City Council Chambers, a production and recording studio for the city-run television station, gallery space for the arts, the Department of Neighborhood Resources, and a three-story parking structure. Previously, the city had operated its city hall from rented offi ce space.

SmithGroup, Inc. was the architect for the project, which features some very interesting details. The City Council

Chambers are intended to be the project’s signature feature and focal point, representing the area’s diverse technological industries. The structure includes an exterior skin of span-drel glass panels that create a conical architectural shape that refl ect the sky during the day and are backlit at night.

In the project team’s pursuit of LEED Gold certifi cation from the U.S. Green Building Council, they found creative ways to make the complex environmentally friendly with-out sacrifi cing beauty, such as a water recycling program that stores excess water from the cooling tower and uses it for landscape irrigation.

“There is a waterfall in the parking structure that, to the untrained eye, just looks like an ordinary waterfall, but it’s actually a cooling feature for the HVAC system,” said

Project Manager Fred Friedl. “It’s really creative; I’ve never seen anything like it before.”

The project is located in the heart of downtown Chan-dler on an extremely tight site, where there were some-times just 25 feet between neighboring businesses and construction activities. That made good community rela-tions especially important to the project’s success, says Sundt vice president Jeff Fairman.

“We brought a community relations specialist onto the team at the very beginning. Her involvement turned out to be key to the good relationships we forged and maintained with the mayor and city council, surrounding businesses and neighbors,” said Fairman.

Sundt performed all of the concrete work on the job – totaling 9,500 cubic yards – and employed its resources and expertise, such as Building Information Modeling and Lean Construction scheduling methods. These three strategies helped the team shave $3.9 million from the original bud-get while maintaining the aggressive 16-month schedule. The project was completed under budget and on time.

Arizona Commercial ContractorsA SECOND CENTURY OF PROGRESS

Planning and Teamwork Defi ne Striking City Hall Project

July 29, 2011 PHOENIX BUSINESS JOURNAL ARIZONA’S CENTENNIAL 31phoenix.bizjournals.com

“Building Arizona’s Future”“Building Arizona’s Future”ADVERTORIAL

Weitz has been an integral part of Arizona con-struction since its arrival in Arizona some 33 years ago. That’s when Weitz followed client,

Friendship Village, here to construct the original Friend-ship Village of Tempe, a senior living community.

Although new to Arizona back in 1978, Weitz showed up as a veteran in the industry and the oldest general con-tractor west of the Mississippi, providing quality construc-tion services since 1855. Weitz fell in love with Arizona and saw an abundance of opportunities - what would later be known as Weitz Southwest, was here to stay.

“The projects we have constructed and their impact to the community is something we are very proud of,” states Vice President Bryan Bernardo, “we are committed to Ari-zona and to the construction of quality projects that will enhance this community for generations to come.”

Weitz has constructed a number of projects having a signifi cant impact to Arizona including: Sky Harbor’s Sky Train Operations and Maintenance Facility and Guideway Infrastructure; CityScape’s Mixed Use Development in Downtown; multiple shopping environments such as Bar-neys New York, Shops at Chauncey Ranch, Scottsdale 101, Arrowhead Towne Center and Superstition Springs Center; Mayo Clinic Collaborative Research Building; the Buttes, one of the Valley’s fi rst premier resorts; Arizona State Courts Building; renovations at Terminal 4, the U.S. Court-house and Federal Building and the Orpheum Lofts; not to mention a number of offi ce projects throughout the Valley including one of the fi rst high-rise offi ces, Abacus Tower in Uptown; along with the highest residential high-rises in the state, 44 Monroe.

Senior Living projects - what brought Weitz here in 1978 still holds true as a niche market for them today. Weitz has constructed over 40 senior living projects to-taling more than 5.4 million square feet and $667 million in Arizona. From small assisted and independent living projects to large continuing care retirement communities (CCRC), Weitz has defi nitely established themselves as ex-perts in this product line nationwide and particularly here in Arizona.

“Senior living projects have gone from a more stereo-typical view of what senior housing used to be back in the 1970s and early 1980s to more of a resort-style focus,”

Bernardo says. “People are more active. The age that people move into these communities is shifting, people are living longer and want more amenities and activities, so now we incorporate spas, performing arts theaters and other social activity elements into these projects.” This holds true in their current and most recent projects in the Valley: Maravilla, currently under construction in Scotts-dale; Sagewood, completed last year at Tatum and Mayo; and The Promenade at Beatitudes, completed in 2008 in central Phoenix.

With senior living projects continuing to be a part of Arizona communities, Weitz is well-positioned as the expert. “We were one of the pioneers in getting an exclu-sive system set up from a contracting standpoint,” Boe Bergeson, Sr. Business Development Manager declares, explaining that Weitz operates a comprehensive database that breaks down, from low to high, the construction costs associated with CCRCs. Many CCRC developers use this

system to establish their base budgets and determine the optimal use of revenue generating space. The fi ndings are published biannually through the American Senior Hous-ing Association to “update the marketplace as to what’s been occurring over the past six months.”

“We’re excited to be a part of Arizona’s history and look forward to its next 100 years in construction projects,” says Bergeson.

33 Years and 40 Senior Living Projects Later

payment. The new law also guaranteed that contractors have the right to stop work when not paid. The law provides that con-tract disputes will be adjudicated in Arizona, under Arizona laws. The ABA helped mod-ernize our public works procurement laws. Public agencies will now be able to use systems other than traditional low bid. The statute permits the use of design build, con-struction management at risk and job order contracting. ABA successfully lobbied an amendment to the state tax code protect-ing contractors from future tax increases on existing contracts. ABA further amended the state’s tax law to clarify that the design portion of a design build contract is not tax-able under state law.

ABA continues to provide management education that is locally and nationally rec-ognized for excellence. The Leadership De-velopment Forum is a yearlong advanced management program for owners and upper-level managers of contracting fi rms. LDF is a program designed to impart critical thinking and public speaking skills to con-struction professionals dealing with stra-tegic, fi nancial and human resource issues. It uses the case study method to explore issues confronting today’s industry leaders. The ABA also presents programs for all levels of employees from foreman to CEO.

Of course, none of these great programs mean anything if there are no talented trade workers to perform the work. Recognizing

this issue, the ABA operates one of the larg-est apprenticeship and training programs in Arizona. In partnership with GateWay, Cen-tral Arizona and Pima Community Colleges, the ABA provides educational opportunities for electricians, carpenters and heavy equip-ment operators. Currently, about 400 of tomorrow’s industry leaders are attending classes in these programs.

The membership of the ABA has helped Arizona navigate the fi rst 100 years of state-hood. They stand poised to provide safe, effi cient and cost-effective buildings to the people of Arizona for the next 100 years. Here are some of the companies and proj-ects that enhance the quality of life for Ari-zona residents past, present and future.

SOME OF THE PIONEERS OF THE

COMMERCIAL CONSTRUCTION INDUSTRY WERE

NAMES LIKE DEL WEBB,

DAN MARDIAN AND JOHN SUNDT


BY PATRICK O’GRADYPhoenix Business Journal

Arizona long has carried a reputation as an envi-ronmental marvel, but the state may have to con-tend with numerous issues over the next 100 years to keep that reputation intact.

With air, water and land problems aplenty and growth seeming perpetual, the confl icts between developing busi-ness and improving quality of life may continue to grow — or the two sides may learn to work together.

Henry Darwin, director of the Arizona Department of Environmental Quality, sees a correlation between eco-nomic growth and environmental protection.

“So long as the country continues with economic pros-perity, we will have economic protections,” he said.

Sandy Bahr, director of the Sierra Club’s Grand Canyon Chapter, said growth will continue to strain Arizona’s natural re-sources. What it will take in the future is groups working together to develop plans for clean air, water, development and trans-portation, among other things.

“Do we let Prescott, Prescott Valley and Chino Valley drain the Verde River? That’s not an issue now, but it will be in the future,” she said.

WATER IS GROWTHThe biggest environmental issue facing the state is wa-

ter. It provides life for many industries, from agriculture to home building. While air conditioning was the driving

force behind Phoenix’s mid-20th century growth, water will propel the Valley and state in the 21st century.

The good news on that front is the state has taken numerous steps to con-serve water. Active management areas in Phoenix, Tucson and Prescott aim to pro-tect groundwater from being overmined. The Central Arizona Project has backed away from rationing because rainfall has been suffi cient, and the Salt River Project watershed has been particularly wet the past few years.

The bad news is the pressure on growth will not change, and there are questions as to whether the SRP and CAP systems bringing water to the state can handle higher temperatures and prolonged droughts.

“We know how much reduction in long-term infl ow we can have, and what would allow us to maintain our deliveries,” said Tim Skarupa, a senior hydrologist with SRP. “Where conservation goes is important, but how we react to it sometimes is more important.”

SRP and others in the state recently worked with the University of Arizona on a study of tree rings to deter-mine annual rainfall patterns. SRP’s system was built in the early 1900s, during a drought that ran from 1898 to 1905 — but the study found it wasn’t even close to the worst dry spell the region has ever experienced. The researchers found evidence of a 30-year drought in the mid-1500s.

If such an extended drought occurs in Arizona again, Skarupa said SRP could run out of water after 11 years.

CAP has other issues. It pulls Colorado River water into central desert areas, but has to share the river fl ow with seven other states. To save its share from going to water-hungry California, CAP has been “water banking” — pumping some of its water into the ground so it can be drawn out later, when the need arises.

In recent years, the Colorado River wa-tershed has been hit by drought. Ration-ing would have begun this year among the states sharing the water, but a good winter of snow and runoff averted that measure.

The challenge economically is that wa-ter has fueled growth, and developers likely will have to think differently about it going forward, Bahr said.

“Looking at water from more of a state-wide perspective is going to be more impor-tant for the future,” she said.

CLEAR SKIESThe brown cloud hanging over Phoenix seems to

have become a local fixture. Residents have been con-cerned about it since 1950, when Maricopa County’s population was about 332,000; and to date, the county and state have struggled with ways to control dust and

Environmental concerns in the airPlanning for the future becoming more essential as growth strains state’s natural resources

Bahr

Pollution-fi lled skies have been a Phoenix fi xture since 1950.



‘As we’re discussing the future of clean energy, we have

to keep our water resources

in mind.’Henry Darwin

Arizona Department of Environmental Quality


other particulates with a growing population of people and cars in an area that still has a large agricultural base.

By 1991, the U.S. Environmental Protection Agency had declared Maricopa County a nonat-tainment area for particulate matter. For the past 20 years, the county’s federal highway funding has hung in the balance.

It’s not getting any easier. This summer, the EPA is expected to release new guidelines for particu-lates that will be even more stringent.

Despite the air quality challenges, there’s still room for the state’s economy to grow, said Holly Ward, a spokeswoman for the Maricopa County Air Quality Department.

“I think we take those lessons learned and move forward,” she said. “And I do think we can grow with people and business, and do so responsibly.”

Arizona industry also may face more challenges as the EPA looks to ratchet down carbon emis-sions on a number of industries. Power produc-tion, particularly from coal, would take a big hit. At the same time, developing cleaner sources of energy tie into other environmental issues, Dar-win said.

“As we’re discussing the future of clean energy, we have to keep our water resources in mind,” he said, noting that many solar power systems take as much water to run as traditional power plants, sometimes more.

The intertwined nature of environmental issues makes balancing growth and the environment diffi cult, but most of those involved say it’s not impossible.

GROWTH CHALLENGESWater and air are the biggest environmental is-

sues, but certainly not the only ones. Darwin said

ADEQ is keeping an eye on several things, including an expectation that mining will increase in the state as the price of copper continues to soar.

“As those mines are being developed and ex-panded, we have to make sure they aren’t doing ir-reparable harm to the environment,” he said.

Even waste disposal factors into environmen-tal challenges. More people generate more waste, leaving companies and cities searching for places to store it.

“Generally, communities need to be thinking about solid waste infrastructure like they do about any other critical infrastructure, like power and water,” said Dave Call, vice president of market planning and development for Republic Services

Inc., one of the largest solid waste disposal companies in the state.

The industry is changing, and new technologies are making recycling more prevalent. Costs remain rela-tively high for implementation, but improvement has been steady, Call said.

“I think you’ll see continued incre-mental improvement, just as we’ve seen for the past 10 to 15 years, going on for the foreseeable future,” he said. “If there’s a better way to get rid of the gar-bage, the big companies are going for that.”

Environmental issues bleed into nearly every-thing. When air quality affects possible transporta-tion funding, for example, developers may be tasked with creating high-density, urban projects to cut down on travel and clear the air, Bahr said.

“It means we’ll have to take a hard look at trans-portation,” she said. “We seem to think the solution is in building more freeways, but that’s kind of an old-school idea.”

Connect with Patrick O’Grady at [email protected] or on Twitter at @pogrady.

FROM PAGE 32

Call

JIM POULIN PHOTOS | PHOENIX BUSINESS JOURNAL

Salt River Project harnesses power from the Salt River through a series of canals, above. The Roosevelt Dam, below, is located northeast of Phoenix. The dam provides water storage for SRP and offers fl ood control for the Salt River Valley.


BY CHRISTINA ESTESContributing Writer

Physical infrastructure always has been a key development factor, from the roads Arizonans drive along to the electrical lines that power their businesses.

The Great Recession has slowed population growth, but Arizona still is welcoming new residents. University of Arizona economist Marshall Vest projects 1 million more people either will be born in or move to the state by 2020.

Developing more roads and power plants will come at a cost. Elected offi cials and business leaders must not

only plan projects to handle the growth, but also fi gure out how to fund them.

Ultimately, they will have to make some tough decisions to attract new businesses and keep the state’s economy humming.

“Transportation is an essential com-ponent, which contributes to whether the Valley succeeds in meeting the eco-nomic challenges we are confronting,”

said Litchfi eld Park Mayor Thomas Schoaf, immediate past chairman of the Maricopa Association of Govern-ments, the regional group that develops transportation planning.

ROAD AND RAILSGetting people around the state will be one challenge.

MAG’s 2010 Statewide Transportation Planning Frame-work calls for expansion of existing transit systems and more choices, including commuter rail corridors from the East and West Valley to central Phoenix; intercity rail from Phoenix to Tucson; and opportunities for high-speed rail connections throughout the West.

“The framework also identifi es improving Arizona’s connections to Los Angeles, San Diego and Las Vegas, the latter being a new Interstate 11 route that could eventually have connection beyond Nevada into the Pa-cifi c Northwest,” Schoaf said. “For our economy to be vibrant and sustainable, it must be seamlessly linked to the national and international centers of commercial activity.”

Infrastructure growth is universal when it comes to transportation. At Phoenix Sky Harbor International Airport, one of the nation’s 10 busiest airports, the planning never stops.

“The biggest challenge for the airport is to make sure our facilities can accommo-date increased passenger demand while maintaining our cost-competitive position among our peer airports,” said Chris Andres, deputy aviation direc-tor with the city of Phoenix, which runs Sky Harbor.

The airport’s infrastructure goes beyond getting planes into and out of the region. Reducing passengers’ travel headaches is the goal of the $1.5 billion PHX Sky

Train, which will link the Metro light rail to the airport via a connection near 40th and Washington streets.

The initial 1.7-mile stage, to be completed by early 2013, will move airport visitors and employees from Metro light rail to the east economy parking lot and Terminal 4, which serves 80 percent of Sky Harbor’s passengers. It will reduce road traffi c by an estimated 20 percent at Sky Harbor.

Expanding light rail further into Mesa and northwest Phoenix also is in the planning stages, but that would come at a signifi cant cost. Valley Metro is working to determine three specifi c transit routes and modes from downtown Phoenix: one to Interstate 10 westbound, one northwest into Glendale, and one toward Paradise Valley Mall into northeast Phoenix. Six high-capacity transit corridors are scheduled to be in place by 2031.

WATER AND LIGHTSInfrastructure challenges for the growing region will

stretch beyond moving people. Water and power access also will change as the population grows.

For Central Arizona Project, the future will focus on moving Colorado River water and making sure Arizona gets every drop allocated to it by agreements among the seven states in the river’s basin.

To accomplish that, CAP has undertaken development and construction of seven underground water storage facilities, said Thomas McCann, assistant general man-ager of operations planning and engineering.

“CAP has helped the Arizona Water Banking Author-ity store more than 3.5 million acre-feet of Colorado River water in central Arizona,” he said. “CAP is ac-tively planning for recovery of that stored water during

future times of shortage.”There’s enough water stored to meet the needs of all

states sharing Colorado River water for three to fi ve years, depending on their usage, according to CAP offi cials.

To secure more water, Arizona worked with Nevada and California to build the Brock Reservoir, which holds water released from Lake Mead instead of letting it fl ow into Mexico. The seven states also are working on a plan to augment annual snowpack runoff, with a goal of in-creasing water production by 10 percent annually.

All such endeavors, however, come at a cost, McCann said.

“A related challenge is how to pay for the initiatives that will be needed to protect current water supplies and develop new supplies,” he said. “In today’s economic cli-mate, governments do not have spare funds to invest in forward-looking projects, and homeowners do not want to see rising rates.”

Arizona’s electricity providers also will have to pay for the same kind of large-scale growth they have seen for the past 30 years, once the state’s economy gets back on track.

Arizona Public Service Co. is anticipating 750,000 new customers over the next 20 years — a 68 percent increase from the 1.1 million it currently serves, said Jim Wilde, the utility’s director of resource planning.

“We must have the infrastructure required to serve these customers in place before it is actually needed,” he said.

APS expects the bulk of its growth will be accommo-dated by renewable energy such as wind and solar proj-ects, energy-effi cient strategies and natural gas power plants.

Salt River Project leaders say there’s no single per-fect solution to Arizona’s growing energy demand, and they’ll continue to plan a balanced portfolio.

“Investments in our infrastructure will include new generation and new high-voltage transmission lines,” said Charles Duckworth, SRP’s energy management and information manager. “Solar and wind generation do not require fuel, but these sources are intermittent and dependent on natural conditions such as daylight, cloud cover and wind speed. Both resources also require substantial land and capital investment.”

Customers, regulators and politicians need to adapt to a new environment of increasing electricity prices, according to a 2008 study by the W.P. Carey School of Business at Arizona State University.

The study focused on preparing for an Arizona popu-lation of 10 million. If prices stay the same, the report projects a funding shortfall in energy infrastructure of about $109 billion over the next 25 years.

Transportation must accommodate population growth

Vest

Schoaf

MARC PEARSALL | SPECIAL TO PHOENIX BUSINESS JOURNAL

PHX SkyTrain is expected to reduce traffi c in the area when it links Metro light rail with Phoenix Sky Harbor International Airport.PROVIDED BY SKY HARBOR INTERNATIONAL AIRPORT

Maricopa Association of Government’s 2010 Statewide Transportation Planning

Framework urges expansion of high-speed rail lines, such as this

Amtrak demonstration.

BY ANGELA GONZALESPhoenix Business Journal

Infrastructure needs for telecommunications and data services will change dramatically in the next 100 years, local industry leaders say.

Cloud computing — where data can be accessed from any remote location — will be available for residents as well as businesses, said Ken McMahon, Phoenix-area vice president and general manager for CenturyLink Inc., which purchased Qwest Communications Interna-tional Inc. in April.

“Cloud computing moves us into an environment where we have software as a service, where you would pay a provider a monthly fee,” he said. “In turn, you would access software you need as a resident. You will access all the intelligence of a computer at a remote location. Your device in the home becomes a dumb terminal — it’s just a screen that has access to the Internet.”

Data hosting also will be an important consideration for companies preparing for natural disasters, he said.

“We could devise a plan where we would transmit tele-communications and data to an off-site location to allow

them to continue to do business,” McMahon said.Stephen Rizley, senior vice president and regional manager for Cox Communications Arizona, said

broadband will become more crucial as more companies see the need for teleworkers.

“That has to do with fuel costs, but also the issues of companies of the future not building as many bricks-

and-mortar facilities to serve customers and conduct business,” he said.

A quarter-century ago, it was unthinkable that someone in Arizona could get a college degree or shop

in a New York store over a wire line, Rizley said.

“We are making that completely ubiquitous,” he said.

Broadband still hasn’t been adopted by everyone today because of eco-nomic and educational gaps, he said.

“Making that broadband style ubiq-uitous has got to be an agenda that

takes place going forward,” Rizley said.Steve Zylstra, president and CEO of the Arizona

Technology Council, said technology is evolving at an amazing rate.

“If you look at the two curves associated with the acceleration of broadband and storage, you’ll see they are accelerating at an even faster rate than computing power,” he said. “As a consequence of that, the possibilities are just literally endless about what’s possible technologically.”

The Valley already has some large players in the telecommunica-tions and Internet-based business arenas. It also has become home to many data centers — the large computer network facilities that provide storage for cloud programs.

Data Realty Trust, i/o Data Centers and others have set up opera-tions in the Phoenix area because of its telecommunications network and because the region represents a safe, low-cost location for data storage.

Connect with Angela Gonzales at [email protected] or on Twitter at @AngelaMGonzales.

Technology infrastructure bringing ‘cloud’ to Valley

Zylstra

Rizley


JIM POULIN PHOTOS | PHOENIX BUSINESS JOURNAL

Anthony Wanger is president of i/o Data Centers, which operates a more than 500,000-square-foot facility in east Phoenix.

Ken McMahon, Phoenix-area vice president and general manager for CenturyLink Inc., said cloud computing and data hosting will become more important for companies wanting to create a disaster preparedness plan.

As more companies

elect to have employees

telecommute to save money

on offi ce space, broadband

is expected become much

more widely used.

T H I N G S W I T H L O N G E R S H E L F L I V E S T H A N

T H E B O O K O F L I S T S :

ARMY RATIONS A NICE BORDEAUX TWINKIES

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For space reservations or sponsorship opportunities, call a Phoenix Business Journal Advertising Consultant at 602.308.6535.

2 0 1 1 S p o n s o r s :

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No r t hwe s t e r n M u t u a lRyl e y C a rl o c k & Ap p l e wh i t e


The business landscape in Arizona has changed. What once was a state thriving in construction and real estate is now a level playing fi eld. Busi-ness is getting better, and some new companies

are rising from the ashes. It’s time to ramp up our efforts by putting new energy

into the state and accelerating our growth through a continued focus on prospering in-dustries like aerospace. We need to increase our manufacturing and production, and redirect our mar-keting to foreign investment dol-lars and potential trade partners.

Arizona’s original fi ve C’s — cattle, climate, citrus, copper and cotton — are all still parts of the wheel, but they’re no longer its sole strength. The shift of domi-nating industries is dictated on a global level, with supply and de-mand. The global demand exists and we can supply the goods and services in aerospace, life sciences,

sustainability, alternative energy, bio materials and information technology. We are fortunate because we have excellent business leaders who have paved the way for our new business sectors and already have begun to stimulate international awareness.

Foreign direct investment is critical to the growth of Arizona. International money is actively being invested throughout the U.S., and Arizona is doing a good job of attracting some of it. However, now is the time to raise the bar to compete with the larger global cities.

Trade and commerce beget foreign direct investment. I developed the Canada Arizona Business Council with the main goal of putting two natural trade partners together. Canadian CEOs said the biggest obstacle to trade with Ar-izona was the lack of direct fl ights. Through efforts with

US Airways, Air Canada, Westjet and the business com-munity, we now have more than 80 direct fl ights to and from Canada, which has directly stimulated commerce.

Other countries have the same potential. Through in-creased direct international fl ights to Arizona, we could entice previously overlooked foreign markets. Regional airports such as Los Angeles, Las Vegas and Denver have an abundance of direct international fl ights, and foreign travelers bypass us to fl y to these states. If we can’t get them to visit, it’s even harder to get them to invest and do business here.

Most existing Arizona businesses are not well-versed in international trade. Educating them about this would

be benefi cial. At best, 5 percent of local small and mid-size businesses engage in exports. Almost any Arizona company producing and selling a product or service should be selling to the world.

The federal government wants to double our exports and retool our workforce, and Arizona must be relevant in this effort. The state is doing an excellent job and has a stellar leadership pool. We just need to collectively raise the bar and ramp up the efforts in this highly competitive national and world market.

R. Glenn Williamson is founder and CEO of the Canada Arizona Business Council. Reach him at [email protected].

Foreign direct investment critical to Arizona’s growth

cdinpkla

ccwsongmase

MY VIEW

R. Glenn Williamson

PROVIDED BY KAHALA CORP.


US Airways’ addition of direct fl ights has helped stimulate trade with Canada. Kahala Corp. is one locally based company taking advantage of foreign markets, with Cold Stone Creamery stores in 17 countries outside the U.S., including one, right, in Korea.

July 29, 2011 PHOENIX BUSINESS JOURNAL ARIZONA’S CENTENNIAL 37phoenix.bizjournals.com

Generations of legal knowledge and experience combined with fresh, new ideas

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© 2011 Jennings, Strouss & Salmon, PLC. Attorneys At Law. All rights reserved. Contact: J. Scott Rhodes, Managing Attorney, One East Washington Street, Suite 1900, Phoenix, Arizona 85004, 602.262.5911.

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