CAPITAL CONNECTION: Two local businesses tapped for education program. 6

TRADE BARRIERS: Suntech slows production, 50 workers to get pink slips. 7

BY TIM GALLEN AND MIKE SUNNUCKSPhoenix Business Journal

With the presidential election in the books and the turkey con-sumed, retailers are focused squarely on consumers as the

holiday shopping season kicks off. Surprisingly, after a year of uncer-

tainty and seemingly bipolar economic conditions, retailers are optimistic that shoppers will shrug off the fi nancial doldrums of the past 11 months and open their wallets wide.

That optimism could mean a big boost for local retailers who have struggled through another tough year fi nancially.

Though the entire holiday shopping season is important, the opening weekend — Black Friday, Small Business Saturday and Cyber Monday — is key especially for independent retailers and businesses, said Kimber Lanning, director of Local First Arizona.

SUN CORRIDOR: Lea Márquez Peterson is confi dent Tucson’s economy will remain strong. 10

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PROFILE:Sharon Lechter, founder and CEO, Pay Your Family First. 17

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Rooftop solar proposal could alter APS business modelBY PATRICK O’GRADYPhoenix Business Journal

A plan by the Arizona Corporation Com-mission staff that utilities spend more on rooftop solar has Arizona Public Service Co. defending its business model and solar practices.

ACC staff presented a plan it called a “paradigm shift” in response to APS’ an-nual fi ling that shows how the utility would

meet the state’s renewable energy stan-dard. The plan calls for APS to go beyond state requirements of getting 30 percent of its solar capacity from rooftop systems.

The issue, as written in the staff report, is that rooftop solar represents a cheaper way for the utility to deploy its renewable resources. APS contends the way commis-sion staff fi gured costs doesn’t consider all factors, including prices that would rise on non-solar customers in the wake

of more people adopting the technology.

“Our goal at APS is to edu-cate stakeholders on all the costs,” said Jim McDonald, a spokesman for the utility.

Those in the solar indus-try say the move by APS marks a change in direction

and offers a glimpse of a company that is trying to protect its business.

“Unfortunately this isn’t a surprise,” said Michael Neary, executive director of the Arizona Solar Energy Industry Associ-ation, a trade group of various companies involved in the industry, including utili-ties. “APS is a heavily regulated monopoly that is trying to preserve its market.”

The discussion likely will continue next month, when the ACC takes up the utility’s

Businesses brace for holiday season

BY KRISTENA HANSENPhoenix Business Journal

It’s that time of year again, but holiday cheer in the local tourism industry may be somewhat mixed this season.

What Arizona hoteliers, restaura-teurs and even retailers once looked for-ward to as the busiest time of year still is having a rough time getting out of its Great Recession slump.

Last December, for exam-ple, hotels statewide raked in $142 million in gross sales, according to the Arizona Offi ce of Tourism. That’s a roughly 2 percent increase from the two previous Decembers when sales hit bottom, but still was down by more than 15 percent from the bustling times of 2006.

While the economy recently has been showing signs of an upswing in most

SEE SHOPPING | 23 SEE TRAVEL | 23

SEE APS | 24

THE LISTS:Economic development organizations. 12Homebuilders. 16

phoenix.bizjournals.com INFORM. CONNECT. SUCCEED. NOVEMBER 23, 2012 $3.95

ay 7

Holohan

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Retailers cautious, but optimistic about

spending season

Tourism offi cials struggle with hotel competition, rebounding economy

Moloznik

MORE INSIDECyber Monday • hampers workplace productivity. 5

Companies holding • smaller holiday parties. 8

Small Business • Saturday grows to support local shops. ONLINE

TIM KOORS | SPECIAL TO THE PHOENIX BUSINESS JOURNAL

Small-business owners are gearing up for the holiday shopping season. Retailers such as Jeanine Rometti, owner and operator of the Old Town Candy and Toys store in Scottsdale, say they are optimistic this year will be better than last.

The Sun Corridor.Consider Yourself Invited.

TUCSON

PHOENIX

PRESCOTT

10 SUN CORRIDOR: TUCSON

phoenix.bizjournals.com

BY CHRISTOPHER LEONEPhoenix Business Journal

Duane Armijo has been living and working comfortably in Phoenix since 2005. But when deciding where in Arizona to locate his building-systems company, he looked

at locations from Flagstaff to Tucson. Armijo said the package of incentives the city

of Tucson put together was the best, but what made the biggest impression on Armijo was the

way Tucson treated him.“It didn’t feel like a government transaction,”

he said. “It was very, very different.”People he had never met before introduced him

to other people. He and his partners quickly felt connected to Tucson’s business community.

“The network down there is very close-knit,” Armijo said.

November 23, 2012

Working toward a strategy

Corridor gives Tucson the chance to shine

SPONSORED BY:

The Sun Corridor is Arizona’s megapolitan area stretching from Nogales in the south to Prescott

in the north, with Phoenix at its core. The megapolitan is growing at a tremendous rate,

bringing the challenge of conserving natural desert and open space while creating urban quality of life.

SEE TUCSON | 11

Another reason Armijo choose Tucson was Union Pacifi c’s Sunset Route, a 760-mile track that runs from Los Angeles to El Paso and goes through Tucson. Armijo’s core product is a 32-foot by 10-foot panel that can be shipped by truck or rail.

A supportive business community and strategic location are two assets among sev-eral Tucson will use to differentiate and in-

tegrate itself into Arizona’s Sun Corridor, a transporta-tion and economic region loosely defi ned as stretching from Prescott to Nogales.

Defi ning the Sun Corridor more concretely fi rst will re-quire building Interstate 11 from Las Vegas to Phoenix

and a passenger rail line between Phoenix and Tucson. The Arizona Department of Transportation says it will then focus on extending I-11 to Tucson and Mexico, bring-ing the Sun Corridor into full alignment.

Although the new infrastructure is just in the planning stages, Tucsonans have begun to defi ne in the past few years how their city will look and compete when the roads and rails become a reality.

“In many ways Tucson is more receptive to the idea of the Sun Corridor in general than Phoenix is,” said Dan Hunting of the Tucson-based Sonoran Institute.

Tucson has much to gain from the Sun Corridor, but it also has much to lose if the growth is not managed properly, Hunting said.

Tucson’s efforts have worked to ensure development is environmentally sustain-able and does not change the city’s char-acter. Secondly, their efforts have worked to defi ne a strategy to capitalize on the city’s strengths and not butt heads with Phoenix.

VISIONING AND BRANDINGImagine Greater Tucson is an example

of one way Tucsonans have started to cre-ate a vision of how the city will integrate into the Sun Corridor. It started a few years ago to ask residents what they wanted the future of Tucson to look like.

After hundreds of surveys that collected the opinions of 10,000 residents, IGT re-leased last September the results of its two-year effort in a document called “Looking Forward — A Vision for a Greater Tucson Region.”

The effort culminated in identifying 60 individual values that were organized into nine categories.

Those values and categories now are be-ing incorporated into development plans for the cities surrounding Tucson and Pima County, said IGT Executive Director Mike Holmes.

The principals are “all very mom and apple pie,” Holmes said. But the key to the exercise is that “it got people off of the very few points of difference and on to common ground.”

The creation of a Tucson chapter of the environmentally focused Valley Forward

IMAGINE GREATER TUCSON’S SHARED REGIONAL VALUES

November 23, 2012 PHOENIX BUSINESS JOURNAL SUN CORRIDOR: TUCSON 11phoenix.bizjournals.com

Research, Innovation Drive Economic Development in Southern ArizonaWith Arizona’s Sun Corridor embodying the potential for long-term growth through collaboration and partnership, there is great work being done in and around Tucson, the corridor’s southern anchor.

In fact, Southern Arizona has quietly emerged as a research and innovation center – encouraging and helping fund start-up companies with a collaborative approach to moving knowledge and inventions to market – with all of Arizona benefiting in the process. Here is a brief update on these ongoing efforts.

The University of Arizona recently created its “Tech Launch Arizona” entity to better facilitate the transfer of research discoveries made on campus into inventions that drive new start-up companies. Tech Launch Arizona has since joined ASU, NAU and Dignity Health as a research partner in a state-wide collaboration to drive economic development called “Arizona Furnace.”

As part of Arizona Furnace, promising start-up ventures receive a package worth more than $50,000 in funding grants and services, and six months of incubation space at ASU’s SkySong, the UA’s BIO5 Oro Valley Accelerator or the Arizona Center for Innovation. To be accepted, companies must be based in Arizona, providing economic development and job creation.

At the other end of the spectrum, Southern Arizona is home to many established technology-based companies noted for their

innovation in the areas of optics (Breault Research, 4D Technology), biotech/medical (Ventana Medical Systems, Sanofi), aerospace (Universal Avionics Systems), defense (Raytheon) and computing (IBM).

Several of these, including Ventana, Breault and 4D, are “home-grown” former start-ups that demonstrate both the viability of Southern Arizona’s technology-incubation climate and the potential for widespread impact on Arizona and beyond.

Key to these incubation efforts is the timely combination of innovation with necessary sources of business knowledge, mentoring, capital, and the identification and protection of intellectual property. These resources are entrenched and growing, thanks to knowledge centers such as the Eller College of Management and McGuire Center for Entrepreneurship, as well as events featuring business, funding, and IP-related programs sponsored by the Bio-Industry Organization of Southern Arizona, the Arizona Technology Council, and Quarles and Brady among others.

These are exciting times for the greater Tucson region… and Arizona’s Sun Corridor. We look forward to continued collaboration with our state-wide partners.

One Renaissance Square

Two North Central Avenue

Phoenix, AZ 85004

(602) 229-5200

quarles.com

Gavin Milczarek-Desai Co-Managing Partner, Tucson OfficeQuarles & Brady LLP

#SunCorridor

Following community meetings and surveys of some 10,000 people in Tucson, Imagine Greater Tucson, or IGT, released the results of a two-year survey in a report called “Looking Forward – A Vision for a Greater Tucson Region.” The document outlines nine categories of focus:

ACCESSIBILITY: Tucson has many choices for traveling to destinations throughout our region in a safe, pleasant, and effi cient manner.

EDUCATIONAL EXCELLENCE: All residents of the region are able to attend high-quality schools from pre-K through college and beyond.

ENVIRONMENTAL INTEGRITY: Clean air, natural lands, the unique plant and animal life, and the beauty of the Sonoran Desert are preserved for current and future generations. The region recognizes and respects the limitations of water and the other natural resources that make life in the desert southwest possible.

GOOD GOVERNANCE: The area’s jurisdictions, institutions and leadership are responsive, effi cient, transparent, and work cooperatively to effectively address the region’s challenges.

HEALTHY COMMUNITIES: Neighborhoods across the region are safe and foster

healthy lifestyles through accessible and affordable housing choices, excellent hospitals and clinics, nearby parks, pedestrian and bike amenities, and connections to trails and other natural recreation spaces.

HIGHER EDUCATION: Tucson’s university and colleges continue to be centers of innovation, job creation, education, entertainment, and cultural programs. They are central to the region’s identity.

PROSPERITY: The region has a robust local economy in which businesses of many sizes and types can thrive and provide job opportunities for the entire population.

QUALITY NEIGHBORHOODS: From vibrant city and town centers and walkable mixed-use and mixed-housing neighborhoods to single-family subdivisions and rural areas, residents can choose from a variety of high-quality options for living and working.

REGIONAL IDENTITY: Tucson residents continue to promote and celebrate the diversity, history, acceptance, friendliness, arts, and “small town feel” that are integral to the unique culture of the region.

Source: Imagine Greater Tucson, www.imaginegreatertucson.org

TUSCON: Development plans incorporate 9 focus areas from 2-year studyFROM PAGE 10

SEE VISION | 13

Armijo

is another example of the effort to defi ne the way Tucson integrates into the Sun Corridor.

Over the past two years, the Maricopa County-focused organization has adopted a statewide mandate and offi cially will change its name beginning in 2013 to Ari-zona Forward.

Kurt Wadlington at Sundt Construc-tion in Tucson has chaired the Southern chapter of Arizona Forward during the transition, and said the Sun Corridor is the reason why Valley Forward needs to embrace a larger region.

“If we can work synergistically as opposed to competing with each other up and down the Sun Corridor and par-ticularly Tucson and Phoenix we’re all

going to win,” Wadlington said.Tucson Regional Economic Opportuni-

ties, or TREO, the economic development agency for greater Tucson, also has embraced the Sun Corridor concept.

Among its efforts to pro-mote the region, TREO’s website features a Sun Cor-ridor link. The link provides an easy way to compare elec-tric rates, taxes and more between Arizona and other states in the region.

STRATEGIC ADVANTAGESThere is no Sun Corridor without Tuc-

son, said the Sonoran Institute’s Hunting. “It’s like asking what makes your kidney

integral to the success of your body,” he said.

Hunting said he believes Tucson’s dif-ferences from Phoenix are its strongest advantages.

“What Tucson needs to do is fi gure out how to preserve that Tucson-ness while glomming onto the gigantic economy” that is Phoenix and will become the Sun Cor-ridor, he said.

One way for Tucson to do that is to main-tain the public lands surrounding it, Hunt-ing said. A report on how Tucson’s public lands help to attract and retain a high-wage

November 23, 2012 PHOENIX BUSINESS JOURNAL SUN CORRIDOR: TUCSON 13phoenix.bizjournals.com

hoenix and Tucson – we are both cities with strong culture, tradition, and vibrant businesses. At times the I-10 divide has led to misunderstandings of our markets and, more fundamentally, of

our abilities to succeed together for Arizona. As one who calls both cities home, having grown up in Tucson and now working and raising a family in Phoenix, my take is this: Phoenix and Tucson are partners. We collaborate more than ever on research and innovation, the two most critical components for Arizona’s Sun Corridor. As described here by Gavin Milczarek-Desai, co-Managing Partner of Quarles & Brady’s Tucson offi ce – and the holder of a Ph.D. degree in Molecular and Cellular Biology – Tucson has become not only a center for researchers developing tomorrow’s new inventions but also a hub for start-up companies. Like Arizona State University, the University of Arizona is a key research institution and its commercialization process is world class. Start-ups continue to be a key factor in Arizona’s growth. Look no further than Go Daddy, the world’s largest domain name registrar, with limited employees at its beginning – and more than 3,200 today…in just over a decade. Tucson’s contributions, and collaboration, are positives for a state seeking increased economic development – and new jobs. There is no better place to present this information than to us, the business leaders in Phoenix who need to be fully informed to the economic power and innovation of our partner to the South. To share news or your comments about Arizona’s Sun Corridor, use #SunCorridor on Twitter. Cheers – here’s to continuing the conversation and taking action.

VISION: Arizona Forward group will aid in defi ning how Tucson integrates into corridorFROM PAGE 11

SEE MEXICO | 14

‘‘’’

The Business Journal has clearly cemented its high value and fi rst-rate reputation through its years of outstanding and multi-faceted journalism. I have authored commentaries for the Journal on a variety of topics and in particular health care which has allowed me to clarify complex issues. Most importantly, the Journal has provided the vehicle to demonstrate how vital health care is to our economy. Further, advertising in the Journal has enhanced the visibility of Vanguard Health Systems and its Arizona platform, Abrazo Health Care, and the progress and new services of our facilities throughout metro Phoenix. The feedback I have received tells me that the Journal is the expressway to reach business leaders and decision makers.

Reginald M. Ballantyne III, FACHE Senior Corporate Offi cerVanguard Health Systems

www.bizjournals.com/phoenix

LOCATION: From north of Phoenix south to the border with Mexico

PRINCIPAL CITIES: Phoenix, TucsonPOPULATION 2010: 5,653,766PERCENT OF U.S. POPULATION: 2 percentPOPULATION 2025: 7,764,211POPULATION 2050: 12,319,771PROJECTED GROWTH (2010-2050): 117.9

percent (6,666,005)2005 GDP: $191,036,000,000PERCENT OF US GDP: 2 percent

ARIZONA’S SUN CORRIDOR

Hunting

workforce is in the works, he said. Preserving the geography of Tucson is

part of preserving Tucson’s lifestyle.“We have just some fantastic, I think,

lifestyle and environmental benefi ts for recreation,” Wadlington said.

Another element Tucson offers that Phoenix does not is a main line connection to the Sunset Route, Union Pacifi c’s south-ern rail line, which links with others lines that extend through out the U.S.

“From a rail perspective Tucson is the better location,” said Wadlington. “It’s another example where we exploit what works and don’t try to compete with what works better for the other community.”

Two developments will further support that advantage. For businesses that use containers to ship their product, the inland Port of Tucson, a privately owned facility just south of the city, will soon complete a $19 million expansion in December, accord-ing to Inside Tucson Business.

The expansion will allow the Port of Tucson to receive contain-ers from Long Beach, Calif., by rail, rather than by truck, which currently is the way containers have been trans-ported from Long Beach, according to Inside Tucson Business.

Union Pacifi c Railroad also is looking to expand its footprint in the region. Just north of Pima County in Red Rock, Union Pacifi c has proposed

building a “classifi cation yard” that will be used to switch rail cars and build trains for intermediate and long hauls, Aaron Hunt of Union Pacifi c said in an email.

Cross-border commerce with Mexico is another area where Tucson will have a strategic advantage.

“From a connection to Mexico, Tucson makes sense,” said Wadlington. “Guaymas

is the closest deep-water port. And Guaymas I think is going to explode in terms of port traffi c because Long Beach is tap-out.”

Wadlington expects Tucson to reap some of the benefi ts of freight traffi c coming up from and going down to Guaymas.

He admits that Tucson will not likely be the ultimate warehousing place for the shipments, but instead a fi rst stop for re-distributing shipments in all directions.

“The opportunities are there,” said Lea Márquez Peterson, president and CEO of the Tucson Hispanic Chamber of Commerce.

There are 350,000 people living in Nogales, Mexico, Peterson said.

In Hermosillo, further south of the bor-der between Nogales and Guaymas, Pe-terson recently met with a group of large, 100-unit franchisors that want to expand into Tucson.

“All of that is just great economic impact for Southern Arizona,” Peterson said.

Peterson admits since the passage of the illegal immigration measures set out in Senate Bill 1070, it has been harder to lure businesses, however.

THE CROSS-BORDER PERSPECTIVEThe relationship between the Sun Cor-

ridor and the northern states of Mexico are so related it is going to be hard to sepa-rate them in the future, said Mark Pisano, co-chair of the National Committee for America 2050, a national infrastructure planning and policy initiative.

Looking forward, being able to incorporate

the northern Mexican states into an overall economic development strategy “is going to be absolutely critical,” Pisano said.

Right now growth rates in the Sun Cor-ridor are lagging, and that needs to change, Pisano said.

Pisano said growth rates can change if the Sun Corridor takes advantage of the favorable demographic trends south of the border. Demograph-ics trends from Mexico to Argentina are even more favorable than in China or Europe, Pisano added.

The Tucson population is “much more receptive” to expanded cross-border commerce than the Phoenix popu-lation, Hunting said.

Economic and cultural connections defi nitely extend across the border when it comes to Tucson, he said.

The possibility of accessing the market south of the border was another reason why Duane Armijo decided on Tucson.

Initially, however, Armijo saw the border as a limitation.

After meeting with TREO representa-tives, Armijo learned that shipping his product to Mexico for installation was a viable option and that TREO and others in Tucson would help him navigate the complexities.

“What that did is open up that southern border,” Armijo said.

Connect with editorial intern Christopher Leone at cleone@bizjournals.com.

14 PHOENIX BUSINESS JOURNAL November 23, 2012phoenix.bizjournals.com

Copper. Creating sustainable growth from the ground up.

Using innovative extraction and processing techniques using little water and fuel, sustainability is at the core of how we operate. And our dedication to the environment doesn’t stop with our mining process; we’re working hard to find beneficial uses for our recycled water and ways to use the land around our site for farming, living and growing – even while we are working.

The Element of Sustainability.

ARIZONA’S SUN CORRIDOR

What is the Arizona Sun Corridor?The Sun Corridor is equivalent to Indiana in size and population but will add another Indiana’s worth of residents by 2040. Located in a desert environment, Phoenix and Tucson — the megaregion’s biggest metropolitan regions — have instituted water conservation requirements and are promoting the use of desert landscaping. These efforts provide the two metros with enough water for perhaps up to 20 million people, preparing the Sun Corridor for current and future growth.The region is poised to double in population from 5 million to 10 million by 2050. The changing demographic and economic environment in the corridor is prompting researchers and leaders to think about how the corridor can one day become a signifi cant economic, technological and cultural center, while growing in a sustainable way.

MEXICO: Tucson holds strategic advantage with cross-border commerceFROM PAGE 13

Peterson

Wadlington