Scottsdale Skies
By Steve Kates

April Welcomes Spring Skies

Mankind got its first feel for space, back on April 12, 1961, when a little known test pilot, Yuri Gagarin; became the first human in space.

The world first learned about a word “Cosmonaut” on that historic date. The term cosmonaut comes from the Greek: “kosmos” (universe) and “nautes” (sailor).

Yuri Gagarin was the first true sailor of the universe, when he was launched in a low altitude ride to edge of space. Yuri Gagarin orbited the Earth once and did not land his Vostok 1 craft, but parachuted from the craft, before it reached the ground. He orbited the Earth at an altitude of 187 miles. Forty-seven years later, people are now going on this same “ride,” as space tourists, only 62 miles up…the edge of space!

In memory of Yuri Gagarin, we celebrate a special night, known as Yuri’s Night, April 12, with many celebrations pending. For more information, visit: http://www.yurisnight.net/2008/

Sadly, the world lost Yuri Gagarin, when he crashed his Mig-15 UTI jet fighter on March 27th 1968. Yuri spent 93 minutes in space during his short career with the Vostok1. Yuri started it all and is sometimes known as the “Columbus of the Cosmos”

April is also a great month for watching the skies! As spring finally creeps into our lives, the nights are warmer and a whole new season of stars come into view. The spring sky is full of new constellations. Look for Leo, the lion…the constellation which now houses Saturn and is one of the classic zodiac signs. It looks like a crouching lion. To see Leo, look high in the eastern sky around sunset.

In Greek mythology, Leo was placed into the sky after being slain by Hercules. In ancient Egypt, the lions would make a journey to the banks of the Nile in the heat of mid-summer. There, they would cool off in the waters of the Nile. The Egyptians followed the lion with great interest and created a large monument to this great animal, known as the Sphinx.

Leo has at least 10 bright stars visible with the naked eye on a clear, moonless night. The brightest, Regulus, a blue-white star, is 77 light years distant. Regulus is three and half times the mass of our Sun and it rotates on its own axis in only 15.9 hours - so fast - that the star would look egg-shaped to the eye.

Even more incredible, the star has a dark looking equator and a bright polar region. This is known as gravity darkening. It causes Regulus to have stronger gravity at its poles and less at the equator. This is all courtesy of its high speed of rotation.

Also, too the upper left of Leo is an amazing area of the night sky, jam-packed with galaxies. This region is known as the Realm of the Galaxies and appears to be a concentration of millions of individual galaxies!

Imagine this! Our home galaxy, the Milky Way, is made up of about 200 billion stars. Now imagine well over one billion individual galaxies centered around a small area of the sky, with well over 200 billion stars in each one. It’s more than our minds can comprehend!

Observers with small telescopes and moonless nights can view many of these objects, some at least 15 million light years away.

To the left of Leo, we come to a large area in the zodiac; Virgo. Here, we find many more galaxy clusters and wonderful sights in our spring skies! April also is known for a small but important meteor shower. This year, we get to see the annual Lyrid meteor shower, peaking on the morning of the 22nd. The nearly full moon will wipe out many of the meteors, but some may be seen by looking high in the northeast sky before dawn on the 21st-22nd.

Get set for a special national celebration of Astronomy, as we welcome National Astronomy Day on May 10. Nationwide, people will celebrate the wonders of the night sky.

To learn more, visit: http://www.astroleague.org/al/astroday/astroday.html

In addition, 2009 is a special year for Astronomy. This will be the official International Year of Astronomy 2009. I’ll talk more about this great celebration in future editions of this column. To view my 2008 appearance schedule, please visit our link: http://www.drsky.com/appearances.shtml

“Always Remember To Keep Your Eyes To The Skies”

MOON
New Moon- April 5th
First Quarter- April 12th
Full Moon- April (Full Pink Moon)
Last Quarter- April 28th

PLANETS
Mercury- In the glare of the Sun
Venus- Low in the SE at dawn
Mars- High in the S at sunset
Jupiter- Low in the Se at dawn

Saturn- High in the E at sunset

Social Media
By Joey Borane

Part I: Confessions of a Social Media Junkie

Okay, I’ll admit it. I’m on MySpace. There! I said it. I have been told by my supposedly more sophisticated, Internet-enabled friends that I am behind the times because sites like FaceBook and Friendster and even LinkedIn are way ahead of the curve. Are there really social media community site snobs now? I do live in Scottsdale, so I guess I better start to consider keeping up with the Internet Joneses, too.

While I am often embarrassed to tell people that I have a profile on the popular social media site MySpace.com, I am more often surprised by how many of my friends and colleagues also have profiles and use it regularly. Since I feel like I have come clean about my MySpace double life, I will freely admit that it is indeed a guilty pleasure of mine – so much so that we call for “MySpace breaks” around our small office in lieu of the low-tech smoke break of years past.

But what is it about MySpace and social media that makes it so satisfying - and maybe even addictive?

Far too many people freely use the buzz “Social Media” without really knowing the impact it has on our use of the Internet as a tool and in our daily lives.

Social Media really centers around three things - primarily online. You may have heard social media referred to in terms of the “three Cs.” In order to create social media, you need to offer visitors one or a combination of Content, Community, or Collaboration. (MySpace strongly falls into the Community part of social media.) Like many things that seem to take off and quickly become involved in the common, everyday fabric of our world, popular, and even not so popular, social media websites have cult-like followings. Why is that? The name really says it all. Humans are social creatures and a site that allows them to extend themselves through the use of technology comes naturally and is easy to gravitate toward. Social media sites are wildly satisfying because they speak to some of our most primal desires - to be around others like ourselves. You may use so-called social media sites and may never have known that you were part of a real Internet revolution.

Back to my own MySpace experience. My “friends” on MySpace are far-and-away all my friends to whom I talk on a regular basis. So why would I much rather pick up a message from one of them on that social media site than just in my regular e-mail inbox? Is this a question for the ages? No, not really. Back to simple human tendencies - I suppose I live a slightly different life in my casual, digital life online than I would in professional e-mail at work. Consider that it would much be like meeting someone for a business meeting in person as opposed to running into them at a social event. In each case, the environment sets the stage.

Imagine for a moment if you and your business could create a social community of like-minded people around an activity, interest or topic and all the while create a way for people to participate. That, my friend, is real social media. Gone are the days of just presenting information in a static website. Now Web 2.0 is all about getting people involved and capitalizing on the momentum of bringing like-minded masses together. Individuals and organizations alike are looking for ways to better themselves through the use of social media both as a conduit and as a participant.

In coming articles - each of the social media “three Cs,” Web 2.0, blogs, as well as insights on how to monetize and expand your influence on the Internet and social media.

In the meantime, let’s connect on FaceBook or LinkedIn (or even MySpace, if you’re willing to admit it). You can also share with me the social media sites you frequent and tell me what keeps you going back.

What if My Business Has an Unneeded Life Insurance Policy?

Many business owners - for whatever reason - find that life insurance policies that once met their business needs no longer do. Traditionally, these people have had only two options: lapse the policy with nothing to show for the premiums that they have paid, or if the policy had cash value, a business could surrender it for the cash value, often for a lot less than the premiums paid into the policy. Now there is a third alternative: a life settlement.

A life settlement is a transaction where the owner of an unneeded life insurance policy sells the policy for an amount greater than the cash surrender value of the policy. A life insurance policy can become a very valuable asset that actually has a fair market value.

Generally, the insured needs to be at least age 65 years or older and have had a change in health since the policy was purchased. There are now financial institutions that will buy these policies, become the owner and the beneficiary of the policy and a write what could be a substantial check to the existing policy owner for this to happen. Not only can this be a viable alternative for individuals but also for businesses that own life insurance policies that for whatever reason are no longer needed.

There are many things that can cause a life insurance policy to be no longer needed: the policy has not performed the way it was projected to perform originally; the policy was bought to cover a loan or credit loan and the loan has been paid off; the premium has become to expensive; due to other circumstances, the policy is no longer needed for estate taxes; if the policy was originally bought for a business need, the need could have changed or gone away. We see this happen when a policy might have been bought in the case of the death of a key employee or to fund a buy/sell agreement.

Health Watch
By Keith Jones

Organ Donations Save Lives

More than 98,000 people in America are on the transplant waiting list. Of those, more than 1,500 are in Arizona. The most commonly transplanted organs are the kidney and liver. These organs process fluids within the body and get rid of wastes.

Kidney failure can be caused by chronic diseases like diabetes and high blood pressure.

Diabetes happens when your blood sugar is too high. It causes damage to organs in the body, including the kidneys, heart, blood vessels, nerves and eyes. High blood pressure is a condition that happens when the pressure of your blood increases against the walls of your blood vessels. If not controlled properly, it can lead to chronic kidney disease.

Inflammatory diseases and inherited diseases are other conditions that affect the kidneys and can cause them to fail. Just because you have one of these diseases doesn’t mean that your kidneys will fail, but it’s a good idea to manage the disease to keep the kidneys healthy. Once damage to the kidney gets to a certain point, dialysis or a transplant may be necessary

Liver transplants are second only to kidneys in the number of transplants performed each year. Essential to the body, the liver produces substances that provide building blocks for energy and growth: glucose and proteins. The liver also makes components that are used in blood clotting, healing wounds and bile, which is a fluid that helps the body absorb fats and vitamins.

Some diseases can cause blockage in the liver’s ducts or other conditions that prevent it from working properly. Hepatitis and excessive alcohol and drug use are common causes of liver failure.

Kidney and liver transplants are somewhat unique because organs can come from living donors or deceased donors. In some cases a child may require a liver transplant where part of the liver is taken from a healthy adult and transplanted into a child.

We can all take a simple action now that may help those waiting in the future. It takes less than two minutes to register at DonateLifeAZ.org as an organ donor.

The Arizona Donor Registry is a result of state legislation signed into law in 2002. It was created by a number of nonprofit organizations collaborating together including Donor Network of Arizona. The registry was launched in April 2003 to provide a centralized location for Arizonans to register their consent to save and improve lives through donation.

Scottsdale Healthcare has worked with Donor Network of Arizona, a full-service organ, tissue and eye recovery organization, to help people change the lives of others through the gift of donation. Donor Network of Arizona is the federally designated, not-for profit organ recovery organization for the state of Arizona.

Approximately 140 lives have been saved in the last three years as a result of organ transplants because of the heroic gifts from families of patients at Scottsdale Healthcare Osborn. The hospital is one of five hospitals in the U.S. to receive the distinguished Medal of Honor by the U.S. Department of Health and Human Services (HHS) for its achievement in raising organ donation rates.

The network also helps educate people with an interactive website. Users can click on each organ or tissue that can be donated to find out what function it serves in the body and how the donation is used to save or enhance the lives of people awaiting transplants.

Those who donate can specify whether the organ or tissue is to be used for “transplantation only” or “transplantation and for the advancement of medical science and education through research.” For example, if cancer is found in the organ, it cannot be transplanted. It can be used in research, however, to help scientists gain more insight for possible cures.

Contrary to popular belief, you are not an organ donor if you check the box on your driver’s license application or renewal. This is only the first step in becoming a donor. Finish the registration by filling out a form you will receive in the mail or by going online at www.DonateLifeAZ.org.

Anyone of legal age can register as an organ donor. The official way to do this is to sign up on the Arizona Donor Registry, a secure database housing donor information. Contact the Arizona Donor Registry by calling 1-800-94-DONOR for a registration form.

Leadership, Motivation & Productivity
By Linda Tennant

Assessments – Accentuate Strengths!

Everyone is unique and has a distinctive set of strengths, and we have often heard that we should “staff for strengths.”  So how do we determine what others’ characteristics and strengths are as they apply for a job?  How do even we know our own characteristics and strengths?  As we go on in life, we usually get clearer about these things, but wouldn’t it be nice to accelerate this learning process? 

What motivates individual people to perform at a high level can be a big mystery, and assessments are a window into the often mysterious human psyche. They are a tool to help you learn what everyone’s strengths and characteristics are, and how they might be most effective. It’s not a perfect science, to be sure, but you may be surprised how well modern assessments identify important characteristics.

Types of Assessments
Throughout my 30-year career, I have taken many different kinds of assessments. In our business, I now get to be on the opposite side - providing assessments for others. Each type of assessment has a specific function. They vary from the somewhat lighthearted and fun to the highly validated and serious. Some assessments tell what social type or leader you tend to be. Others tell your task versus people orientation. And certain ones can match personality traits and mental aptitudes to the job for placement purposes.

Hiring Assessments
Hiring assessments are important tools in selecting people who are the best fit for an organization. Considering how valuable finding a good-fitting employee is, and how expensive people are to replace, hiring assessments are an excellent first investment in talent management. An important thing to note: if you use a hiring assessment, be sure that it is one that is legal and validated. Only the most vigorous and extensive assessments are approved by the Equal Employment Opportunity Commission (EEOC). We believe that a good hiring assessment should be one-third of the hiring decision, along with the application/interview process and background checks.

Personally, I have found various assessments to be good tools in learning about what makes others tick, and also myself. I can better predict how individuals will behave in certain circumstances. I also have a much better idea of my own strengths and the jobs I am best suited for, and I know more about managing the personal areas I’m not so strong in. Additionally, this knowledge helps others to know how to most effectively interact with me.

Assessment Success Story
Recently a major division of Dow Chemical (Polyolefins and Elastomers R&D Group) was turned around through the use of assessments. The division had been strongly considered for sale. It was stagnant without significant new ideas for several years. An assessment tool showed that people with characteristics more suited to maintaining, rather than innovating, were in key places. Dow corrected this, and matched people to positions that better suited their strengths. Within a very short time, the division was highly profitable again, with numerous new patents being developed.

Assessing for Strengths
For a simple but highly effective strength assessment, I recommend the book, Now Discover Your Strengths, by Marcus Buckingham and Donald Clifton (note: not to be used for hiring purposes). This exceptional book gives you an access code to go online and take the distinctive StrengthFinders assessment tool. You will discover your top five inherent strengths and how to better apply this unique set of talents. Knowing our key strengths, through this tool, has significantly helped my partner and I learn how to maximize our efforts together. This has made things more effective and enjoyable!

Commercial Real Estate
By Stephen A. Cross, CCIM

Insights for Food and Beverage Proprietors

Whether it’s the size of the salad or the amount of liquor in a drink, restaurateurs and night club owners pay careful attention to controlling portions. But controlling the costs of occupancy can have an even larger impact on profitability. This article focuses on considerations facing food and beverage proprietors…and some strategies to protect their interests when leasing commercial real estate.

Location is key. While menu and ambiance serve to make a restaurant or night club distinctive and welcoming, choosing the best possible location is the most critical decision a hospitality provider will face. Strategies: 1. Obtain detailed demographic data for every intersection under consideration. These reports should be made available free of charge from your real estate advisor. 2. Visit potential sites at different times, and verify activity and traffic patterns for yourself. 3. Prominent placement on a monument sign can help make up for lack of street visibility. 4. Be aware of natural barriers that may adversely affect patronage. For example, locating in a predominantly office, medical, or industrial district that is separated from residential neighborhoods by a freeway will likely be excellent for breakfast and lunch business but disappointing for dinner and late night activity.

New or used (and improved)? Property owners are least likely to negotiate discounts and incentives during the construction phase of shopping center development. That’s because they are generally flush with money, have budgeted for a reasonable lease up period, and have lofty expectations which have not yet been challenged by the marketplace. Strategies: 1. Be patient – you may find landlords are easier to deal with when they have vacant space on their hands. 2. Be the “second man” in – let another operator lease and improve new space. The property may come back on the market, this time with many essential improvements (those “below the slab and above the grid”) already paid for.

Confirm total rental costs. There are three components to the amount tenants pay to landlords: base rental rate, percentage rent, and operating expenses – the first two are negotiable, while the third can be managed.

• Base rental rate: The published base rental rate (or asking price) is typically expressed in terms of dollars per square foot per year ($/SF/Year), and is merely the negotiation’s starting point. Because neither property owner nor agent expects to receive the asking price, the real question is: “How low can the price go, and for how long?” Strategy: Target a rental rate ten to fifteen percent below the asking price that remains level for as long as possible. Limit the amount of any increases and their frequency.

• Percentage rent: Many restaurant and bar leases call for the payment of percentage rent, which is additional rent based on the natural “breakpoint” of your lease. Calculate the breakpoint by dividing your annualized base rent by the proposed percentage rate (leasable area x base rental rate ÷ percentage rate = breakpoint). Once gross sales reach this amount you will owe additional rents equal to the percentage rate times any amount above the breakpoint. Strategies: 1. Eliminate the percentage rent clause. 2. Negotiate a lower percentage rate. 3. Exclude pick-up and delivery sales from gross sales. 4. Establish an artificially high breakpoint…high enough to ensure the percentage rent does not kick in.

• Operating expenses: Commonly referred to as “NNN” (Triple Net) expenses, operating expenses consist of the tenant’s pro-rata share of three things: property tax, casualty insurance and common area maintenance (CAM) costs. Strategy: Cap any increases in controllable operating expenses at no more than 3 percent per year. Also, in newly completed centers confirm whether the property has been fully assessed. If not, expect and budget for a sizeable increase in total NNN costs in the next year. Note that CAM costs are a component of NNN expenses - and the terms are not interchangeable.

Rental concessions. Rental concessions (reduced rent, free rent, tenant improvement allowance, and the like) are generally a function of the lease term and are used to induce tenants to lease space for the longest term possible. At some point however, longer terms yield no additional concessions. Strategy: Determine the minimum term that yields the maximum concessions. Then, negotiate renewal options with fixed, or maximum, rental escalations. At renewal time the savvy operator may be able to negotiate additional concessions.

Fixturization period. Restaurants generally require 90 to 120 days to build out, including the time it takes to draw the plans and obtain the necessary approvals. Strategy: Negotiate 120 days free of Base Rent and NNN expenses to complete the fixturization process. Also, insist on being able to open for business during this period at no cost. If your construction is finished early, this could get you an additional 30+ days of free rent.

Protect your use(s). It is reasonable to require “Exclusive Use” protection for your type of cuisine or concept within the center. Strategies: Make certain the “Use Clause” clearly describes those things that make your concept unique. Also, ensure the “Permitted Uses” cover your ancillary activities and offerings, such as games, television viewing, live entertainment and patron dancing. Note that because many shopping centers are a patchwork of adjoining parcels with different owners, exclusive uses are protected for your parcel only.
 
Heating and cooling. Restaurants and bars typically require three to four times the heating and cooling capacity of retail stores. Your architect should calculate your needs, which will likely be one ton of air conditioning for every 75 to 125 square feet of leasable area. Strategies: 1. If you are leasing previously occupied space with used air conditioners, request that the landlord expressly warrant them for the entire lease term. That failing, cap your annual out-of-pocket expenses for the repair or replacement of the units. 2. Units older than 10 years are nearing the end of their useful lives, and are probably not very efficient. Require the landlord replace them with new units before the lease commences. 3. If a unit were to need major repairs or replacement near the end of the lease, pro-rate your share of any costs based on the useful life of the new unit.

Transferability: A substantial portion of the value of your business is vested in the buyer’s ability to continue operating in the same location and under the same terms and conditions. Strategies: Make certain your lease and any options to extend are fully transferable to a qualified buyer of the business; and that the landlord cannot cancel the lease if you wish to assign it to another party.

There’s no free lunch. Real estate transactions typically generate commissions that are shared between the agents or advisors representing each party. Even though the property owner writes the commission check, it’s the tenant that ultimately pays the tab. How much are we talking about? On retail leases the total commission generally ranges from $4 to $6 per square foot. That works out to between $12,000 and $18,000 on a 3,000 square foot lease. If you represent yourself the entire commission is paid to the listing agent(s). Strategy: Make certain you receive value from your “side” of the commission by selecting an experienced, competent and unbiased representative who works exclusively on your behalf. After, all you’re paying for it.

Closing thoughts. As with most business expenses, your costs of occupancy can be managed…but you must be proactive. So plan ahead, stay within your budget, make objective decisions, ask questions until you have a thorough understanding of all ramifications, and hire an advisor who will continue to protect your interests long after the lease has been signed.