Archive for September, 2009

It looks like there is some dissent ion in the ranks at the UofA. A recent opinion from a UofA Regents Professor takes a swipe at the administration, the poor moral and the questionable education your son or daughter may be getting at the University of Arizona.

He forgot to mention a pretty crummy community partner that’s really good at taking and not so good at giving back.

Guest opinion by Oscar Martínez, Regents Professor of History: Poor leadership, funding is bringing down the UA

By Oscar J. Martínez

Special to the Arizona Daily Star

Tucson, Arizona | Published: 09.10.2009

During my my 21 years at the University of Arizona, I have witnessed a steady decline in the quality of the institution, with the most rapid and worst plunge taking place over the last two years. Following are examples of recent subsidence:

• Drop in ranking in U.S. News & World Report from 96 in 2008 to 102 in 2009.

• Embarrassing low ranking in the 2009 Forbes survey at No. 339, behind institutions like the University of Texas at Dallas (114), Utah (174), New Mexico State (193), University of Texas-Pan American (218), New Mexico (239), Idaho (312) and University of Texas at El Paso (333).

Drop in national rankings of top-rated schools and departments; examples include pharmacy (down from four to nine) and sociology (down from nine to 20).

• Permanent loss of faculty in key fields; examples include history (down seven positions), English (down 10) and political science (down 14).

Protracted underfunding by the state is the major cause of the overall decline of the UA. But persistently bad university leadership has played an important part as well.

While it is difficult to resolve the state funding problem, there is no excuse for putting up with administrators who do a poor job of leading and implementing needed change.

There is overwhelming dissatisfaction among UA faculty and administrators with the policies and practices of the upper administration. This is tragic because the UA has never needed the strong, positive decision-making that it requires now; yet it is getting mostly ineffective and polarizing leadership.

Provost Meredith Hay, in particular, has become a lightning rod and legions of faculty and administrators would like to see her vacate her post.

The feeling is widespread on campus that the university administrative system has been rendered dysfunctional by the recently implemented structural “transformation.” And the restructuring has left untouched important areas that have the potential to achieve significant savings while at the same time expanding the teaching capacity of the university.

Most obvious is the failure of the administration to implement differential workloads that consider research productivity; this has deprived students of greater class possibilities.

Decline in the quality of teaching is evidenced first and foremost by ever-increasing class sizes. This year classes of 600 to 1,500 students have made their debut in gargantuan Centennial Hall. Ask any professor if she would like to see her child taking such a class and you will elicit a horrified look accompanied by an emphatic “No!”

You will get a similar reaction if you mention online classes, which are on the increase at the UA because the administration wants to boost enrollment. Web classes sacrifice direct contact with students and do little to teach critical thinking skills. And the failure of the UA to monitor Web classes carefully is spawning questionable practices, as in the case of one tenured senior professor on the high end of the pay scale currently teaching small Web-based courses while residing 1,200 miles from Tucson. Such an arrangement is certainly not cost-effective.

Write to Oscar J. Martínez at martineo@email.arizona.edu

The real issue is whether the UA can really reform itself in the right way without outside pressure. After many years of seeing how the system works, I seriously doubt it.

Looks like it’s going to be a tough election coming up for Democrats. From the Huffington Post:

Add to that the absence of Obama from the top of the ticket, which could reduce turnout among blacks, liberals and young people, and the likelihood of a highly motivated GOP base confused by the president’s proposed health care plan and angry at what they consider reckless spending and high debt.

Taken together, it could be the most toxic environment for Democrats since 1994, when the party lost 34 House incumbents and 54 seats altogether. Democrats currently have a 256-178 edge in the House, with one vacancy. Republicans would have to pick up 40 seats to regain control.

“When you have big sweeps as Democrats did in 2006 and 2008, inevitably some weak candidates get elected. And when the environment gets even moderately challenging, a number of them are going to lose,” said Jack Pitney, a political science professor at Claremont McKenna College in California.

Since the mid-19th century, the party that controls the White House has lost seats in virtually every midterm election. The exceptions were in 1934, when President Franklin D. Roosevelt navigated the Great Depression, and in 2002, after the attacks of Sept. 11, 2001, strengthened George W. Bush’s image as a leader.

With history as a guide, Rep. Chris Van Hollen, D-Md., who heads the party’s House campaign committee, said he has warned colleagues to be prepared for an exceptionally challenging environment going into 2010.

Steve sends them and we post them. If any of the candidates have editorials they would like us to post send them over:

In an earlier guest piece I laid out a vision for the redevelopment of downtown Tucson that included the following:

Combining the existing K-12 charter schools in the area with graduate level student housing and classroom space to form a K-PhD linkage between downtown and the UA campus.

The transit opportunities already exist with Sun Tran and Cat Tran operating.

Either by ordinance, or by using the buffers already in place by virtue of the schools, designate all of downtown Tucson as a Drug Free Zone. This will aid public safety officers in their efforts to control drug sales and use in the area.

And finally, support the Pima County Sports Authority’s effort to gain public support for a tax initiative earmarked for youth/amateur sports facilities – and designate a footprint in the downtown area for such a facility. It is on this last element of the vision that I would like to focus in this article.

Things being equal, capital will follow market opportunities. The “things” I have in mind are jurisdictions not creating artificial barriers to entry into a given marketplace, and the creation of a level playing field for all who bring their product to the table. 

At a recent board meeting of the Pima County Sports Authority I was encouraged by the updates from various players in the youth/amateur sport – MLB/Spring Training effort to (re)establish and further develop those opportunities in Tucson. Consider – the effort by this group to entice Asian baseball programs to train and compete in Tucson has the support of Major League Baseball. The Asian teams would be considered for competing in the Cactus League – thus, major league baseball teams returning to Tucson to compete. The Asian teams’ supporters “travel well.” That is, Tucson would be a destination as a part of larger booked group travel that included Disneyland, Las Vegas, Grand Canyon, etc. We’d be their hub as their teams would be stationed here. And with the eventual oversaturation of the Maricopa County baseball market, having this newly formed hub of activity may well serve to draw back some of the teams we have recently lost.

Also consider Tucson Invitational Games’ involvement. Founded in 2001, this group has been ‘bringing their game’ to the local economy in terms of softball tournaments that filled nearly 6,000 room nights in local hotels in 2009. This group has a vision to expand to golf and baseball, and to include DII and DIII and NAIA collegiate sports activities as well. With bids already in place for hosting future tournaments, TIG anticipates increasing those 6,000 rooms to in excess of 20,000 by 2011. That translates into spending in our local economy for lodging, food, travel, activities (Desert Museum, San Xavier Mission, Colossal Cave, Old Tucson…) That translates into sales tax revenue – that which funds our local government. And if we had facilities in the downtown footprint, the Tax Increment Financing boost would finally facilitate moving forward with the plans for developing Rio Nuevo projects. You lead with the revenue generating plans – fund the TIF and follow with the cultural and artistic elements that further increase the interest in Tucson as a destination for travelers. It’s all good yin and yang (recall the Asian connection) / exertion, and receiving the fruits of the efforts put forth by the many dedicated workers included in this vision to bring youth/amateur sports, and MLB to our community.

So, to my point of ‘capital following a market opportunity.’ We as a community can do our part to encourage this sort of downtown (read: community wide) development by supporting the efforts of the Pima County Sports Authority to earmark funds for building this facility. And we can help our own cause by resisting more and more zoning overlays that may hamper the development of these facilities in our downtown area. And we can help our own cause by, as a governing body welcoming in private sector development and engaging appropriate business activity with a ‘can do’ attitude, not throwing up challenges and costly requirements that have here to fore chased opportunities to Oro Valley, Marana and other locales. We as a governing body can help our own cause by stopping land/asset/sweetheart lease give-aways to some while other small local businesses struggle to compete in the  market place.

Let me close by publicly giving Councilmember Shirley Scott a “rose” (I was the recipient of a ‘thorn’ last week – so this honorary is near and dear to me at this time) for her involvement in the development of Lincoln Park’s sports facility. This same sort of effort is now needed if we are to bring an even greater vision to our downtown area. As a candidate for City Council, I welcome the opportunity to work with Ms.Scott in the days ahead on my vision. As a candidate for City Council I encourage you to register, request an early ballot and to vote for those candidates who have laid out a clear vision for how we can build together a new Tucson, one that proudly displays our multi-cultural heritage and invites visitors to share our community – and spend their dollars in the process.

Steve Kozachik

Council Candidate / Ward 6

ITB and WUT have agreed to help forward the message that our region needs some major changes before it’s too late.  We feel that the that change must include organizing and encouraging the business community to step up.  The first opinion in our series is The Chart.  Read the full article HERE.

The Chart is the blueprint of the realities that govern our community. The Chart took years to create. Each of the big and little circles and boxes have spent a lifetime building, protecting and controlling their fiefdoms. How they interact — or fail to interact — has major consequences for all of us.

Inside Tucson Business ran a story this week on the economic impact of having such a large portion of Pima County unincorporated.  Read the article HERE. What could we do with $100 million per year?

“If we had the same number of residents living in incorporated areas as Maricopa County has, we could gain approximately $100 million in state shared revenues,” said Michael Guymon, executive director of the MPA.

The site supporting Prop 200, which is a ballot initiative that voters will be seeing in November is up and running. Check out Keep Tucson Safe.

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YouTube Direkt

Safe streets are job one for our local government. How are they doing?

“At Alvernon as you mentioned, there is an opportunity there, potentially,” she said. “There is a lot of speculation about El Con. We would be interested in serving that community.”

On a local level, Wal-Mart needs the locations. Its store at Speedway and Kolb, which preceded the 1999 big-box ordinance, is extremely busy and stressed. There are plenty of Walmart customers who either fight through traffic to get to that location or turn around and head to Benson — yes, Benson — to buy their stuff.

“We know that customers from the southeast area are traveling to Benson and Green Valley and some are even going all the way over to Marana,” Garcia said.

But this expansion push also comes at a time when Wal-Mart is rolling out smaller “neighborhood market” grocery stores.

Squeezed out of metro markets with big-box ordinances and looking to reshape its brand, Wal-Mart has turned to the smaller store as a way to gain market share, recent news reports have said.

I don’t like Walmart and try not to shop their. I disagree with their treatment of vendors and their demand for “Always Low Prices” has driven manufactures to chase ever cheaper labor (and quality) all around the globe. So this is no means a call more more Walmarts in Tucson. This is a call for the council to finally realize that the market will determine if Best Buy, Target or Walmart locate in our market. People will drive for a deal and that drive is starving Tucson of much needed sales tax revenue.

We thought we’d take a hard look into the economics of the proposed hotel which will be the center piece of Rio Nuevo. The mismanagement has been legendary. The focus now has turned to a flagship hotel that just doesn’t seem to pencil out. It’s going to be guaranteed by general funds so the ramifications of the decision to go forward could potentially impact all of us.

The hotel loses about $54 million in the first few years – most of this is during construction (2010 – 2012) and the first year or two of operations.

This negative cash flow is address by the following:

1) Capitalized Interest: More money is borrowed through the sale of bonds than is needed to build the hotel, about $38 million more. This cash reserve is used to fund the negative cash flow. It also saddles the hotel with higher debt service

2) Site specific taxes are used to defray the negative cash flow: Transient Rental tax (extra bed tax) 6%; City Sales Tax 2%; Convention Center Surcharge 2%. This is projected to generate about $1.5 million to $2.5 million per year. This would add 8% to the cost of a room and 2% to holding an event at the TCC. Seems to us this would make things less competitive for the hotel and TCC.

3) The projections have the city kicking in $1.1 million/year in direct cash subsidy.

4) The City needs to provide their credit support because Rio Nuevo has no money left and the TIF is already pledged to pay the other bond issue. More background HERE HERE HERE – HERE -

5) Since the hotel is owned by a public entity, they pay no real estate taxes or other taxes.

We question if the hotel can even get $157/night and 64% occupancy in 2014? $180 and 72% in 2016?

Two important footnotes from the financial statement that need to be pointed out:

Footnote #6 (page 30)
NOTE: Footnote on Pro Forma assumes convention center and arena will be renovated and expanded by 35,000 SF of exhibit space and 20,000-30,000 SF of meeting space otherwise projections would require reassessment. (this seems really big to us – where will the money come from? I don’t know of any specific plans to renovate?)

Footnote #5 (page 30)
Assumes hotel would be union run (a sure bet with the current council) If you remember Gaylor pulled out when strong union only language was installed into the bid process. Check out the post HERE.

The actual budget projection link can be found HERE

The bond will be sold for $189,000,000 at 6.25%

Here’s our analysis of the projections through 2017: