The Enterprise - Utah's Business Journal, Nov. 21, 2011

Volume 41, Number 17

UTAH’S BUSINESS JOURNAL$1.44Nov. 21-27, 2011www.slenterprise.com

THIS WEEK

• Calendar •See page 6.

Executive LifestyleSee page 8.

• Industry Briefs •Begin on page 5.

$5.2 millionbeing investedin downtown

Radisson hotelSee page 3.

Living Planet toconstruct newaquarium in Draper

Salt Lake developerto buy 180 acresin Syracuse City

A rescued green sea turtle captivates youngsters at the Living Planet Aquarium in Sandy.

The Best Western project was able to move forward when developers secured financing from Bank of Utah.

By Barbara RattleThe Enterprise The Ninigret Group LC, a diversified Salt Lake City-based real estate developer, has inked a definitive agreement to purchase roughly 180 acres of raw ground in Syracuse, where it plans to develop a major commercial and multi-family housing project. Randy Abood, company chairman, said he was not at liberty to disclose the name of the seller of the land, located north of Syracuse High School, between 1000 West and 2000 West. “There is what we perceive to be a demand for commercial and multifamily housing up there,” said Abood, whose firm developed the sprawling Ninigret Park commercial business park in Salt Lake City. “Part of it is the spillover from what’s already up there and we see other situations there, including a city that wants to maintain its employment base.

So we were given the opportunity to buy the property and we like what we see so far.” Abood said he would like to begin developing the acreage in phases, depending on the strength of the market. “The greater part of it would be our typical Ninigret commercial — industrial, distribution and manufacturing — and there’s some 30-plus-or-minus acres that we would allocate for multifamily residential,” Abood said. “I think there’s going to be a combination of building for our own account and then selling big chunks of it as well. It depends upon the number of sales that are out there. So [the length of time to develop] is not going to be less than three years and hopefully it’s not more than seven or eight years.” Abood said very rough estimates of the scale of the

By Barbara RattleThe Enterprise The Living Planet Aquarium, a 43,000 square foot nonprofit aquarium that is open to the public, plans to construct a new and larger facility in Draper beginning next spring. Draper City last week approved a memorandum of understanding pursuant to which the city will issue an approximately $11 million tax-exempt bond on which the aquarium will make the payments, according to Draper City manager Layne Long. An

additional $7 million raised from donations and by fund-raising will be supplied by the aquarium, said Living Planet CEO Brent Andersen. According to Andersen, the aquarium is in the final stages of negotiating the purchase of land for the new aquarium, which will replace its current facility in Sandy. Andersen said he was bound by a nondisclosure agreement to refrain from identifying the site that will be purchased, other than to say it is near the freeway in Draper.

Ground was broken in mid-September on a Best Western Plus hotel at 5433 W. Wiley Post Way in Salt Lake City near the Salt Lake International Airport, according to co-owner Tom Patel. The project has been in the works for more than three years, but Patel and partner Mike Chaudhari had difficulty getting financing until a few months ago from Bank of Utah, which had financed some other projects for them in the past. “[Bank of Utah] has a strong

level of confidence with us,” said Patel, who purchased the 1.61-acre lot in 2008. “We went to more than 10 different banks, every one we could think of. We expect to have 60 percent occupancy during the first few weeks the hotel is open, and our goal is to maintain 75 percent occupancy, which we think is very feasible.” The 45,933 square foot proj-ect, slated for completion in May 2012, was designed by Denver-based Associated Architects and is

Construction under way onBest Western Plus near airport

Study: negative blog posts can have positive impact on business It seems counterintuitive, but when it comes to employee blogs, sometimes the best posts con-tain moderate criticism of corpo-rate policy, service or even prod-ucts, says a new study from the University of Utah. “If the [negative] ratio is too high, they can talk with those employees about their concerns. But while they should monitor those blogs, they should not stifle all criticism,” said Rohit Aggarwal, assistant professor of information systems at the university’s David Eccles School of Business and co-author of the study. He notes that while some companies have reprimanded or even fired employees over “nega-tive” posts, others have adopted

policies tolerating or even encour-aging criticism. In “Blog, Blogger, and the Firm: Can Negative Posts by Employees Lead to Positive Outcomes?” which has been accepted for a forthcoming edi-tion of the Information Research Journal, Aggarwal contends that “our analysis suggests that nega-tive posts act as a catalyst and can exponentially increase the reader-ship of employee blogs.” Visitors to corporate/employ-ee blogs do not expect to see any-thing but positive commentary on company products and services. Critical commentary is seen as reflecting integrity of employees

see AQUARIUM page 2

see NINIGRET page 2

see HOTEL page 3see BLOGS page 2

Legal Matters

Legal Matters

Legal Matters

Legal Matters

Legal Matters

Legal Matters

Design Matters

Executive Lifestyle

Legal Matters

Staffing Matters

HR Matters

Real Estate Matters

Executive Lifestyle

Legal Matters

and honesty and openness from the company about their products or services. “There is some merit in allowing negative posts” by company blogging policy-setters, suggest Aggarwal and co-authors Ram Gopal and Ramesh Sankaranarayanan of the University of Connecticut and Param Vir Singh of Carnegie Mellon University. “Permitting a few negative posts to increase readership should be a good strat-egy.” Aggarwal and his colleagues also found that while a few nega-tive posts served to season per-ceived legitimacy of corporate/employee blogs, too many nega-tive blogs can reverse that initial, favorable reaction from readers. In other words, all things in mod-eration – including online criti-cism. “We found that the optimal percentage for negative posts is about 15 percent to 20 percent,” Aggarwal said. “Beyond that, you may get more readership but there also is more negative impact on

the company in terms of reputa-tion and possibly sales.” So, what does the research suggest for executives in the pro-cess of drafting or re-writing their policies on blog content? In a word: vigilance. “We are not advocating, for instance, that a firm should active-ly encourage its employees to post negative comments on their blogs. Firms may not choose to restrict certain types of negative posts, which is different from actually encouraging negative posts,” the paper states. That said, Aggarwal adds that his research suggests that companies should be more open toward “allowing employees more freedom to write and freedom to express” even as they “track blogs to see what the ratio of negative posts is to positive ones.” A high negative-to-positive blog post ratio can also serve as a canary in a coal mine, allowing a company to proactively react to brewing discontent among employees. “If the [negative] ratio is too high, they can talk with those employees about their concerns. But while they should monitor those blogs, they should not stifle all criticism.”

development include about two million square feet of industrial space and as many as 600 units of multifamily housing. “The two million square feet is a little bit smaller than Ninigret, which was 180 acres, but I think we’ll probably have a lower percentage of building volume per acre,” he said. The Ninigret Group is now “playing with names” for the

future development, Abood said. “What I really want to add to this is the notion of Antelope Island,” he said. “I want to capture Antelope in there somewhere. I want the Ninigret name and I want the Antelope symbol built into it. One can immediately identify with Antelope Island.” Ninigret Park consists of nearly 2.3 million square feet of industrial and office space consisting of 18 buildings ranging in size from 60,000 to 278,000 square feet. The park’s office buildings feature “plug-and-play” flexibility with raised access floors to accommodate under-floor HVAC, dual fiber, redundant generator capacity and easy access to electrical and telecommunications wiring systems. Warehouses have high ceilings, extra doors and docks, super flat floors and other features that are typically found in custom-constructed warehouses.

2 The Enterprise Nov. 21-27, 2011

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The new aquarium, which Living Plant will own, will measure 90,000 square feet. “Everything will be much bigger and better. The shark tank will be almost half a million gallons — actually big enough that people can dive into it with the sharks,” Andersen said. “We’ve just completely outgrown what we have in Sandy. One of the great things about the Living Planet is we’re a nonprofit but because we have such strong support from the community — visitation, memberships, ticket sales — that we’re actually able to cover all of our overhead. What that really means is that when donations come in they go straight toward whatever they were destined for without having to take off any operational support [funds] from

them. Our donations tend to go a little further, and that’s because of the strong operations model that we have.” A groundbreaking is slated for April or May and the Draper facility should take a year to complete. Andersen said an architect and general contractor have yet to be selected. The Living Planet was launched at The Gateway in downtown Salt Lake City in June of 2004. It had a 10,000 square foot location there. The aquarium was moved to its current location in Sandy in June of 2006. “Since then we’ve just kept growing and growing and are out of room there,” Andersen said. “But this will be the last time we move; I really don’t want to move again. I’ve known this from day one, that both Gateway and the current site were not going to be the final site. Everything’s been built and designed to be moveable

— not easily moveable, but we will move it to the new facility.” Andersen said the Sandy location is at capacity quite often. “When we brought penguins in, there were days when there was a 30, 40 minute wait just to get in the building. That sounds like a good thing but it’s actually not that great for a visitor experience,” he said. “We want them to be able to get in and have a great time with their family. We’ve got a very small parking lot and on those busy days it’s really hard to find a places for them. Also, and this part is crucial when an aquarium gets to a certain size, you have to keep adding something new, every 14 to 18 months or so. At most aquariums nationwide those come in the form of what’s called a changing exhibits gallery. We don’t have any room for something like that at the current space.”

NINIGRETfrom page 1

AQUARIUMfrom page 1

BLOGSfrom page 1

One of the building's in Ninigret's 2.3 million Ninigret Park in Salt Lake City.

A major renovation is scheduled to begin Nov. 21 at the Radisson Salt Lake City Downtown hotel, according to general manager James Courtney. The $5.2 million project is being done by Salt Lake-based Cameron Construction and will encompass 250 of the hotel’s 381 guest rooms, along with a renova-tion of the main lobby. Degen and Degen of Seattle is the design firm for the lobby and guest hallways and bathrooms, while LLdP of Sweden developed the room con-cept for Radisson, which Courtney called the “Urban Room” design. “It will be a very contem-porary, vibrant style for the guest rooms and lobby – it will be quite striking,” said Courtney, who has been hotel general manager for six years. “We’re thrilled to be getting this upgrade. The timing is good and it will be beneficial to our guests.” Courtney said the hotel installed 37-inch flat panel TVs earlier this year and all furnish-ings are new.

“We’re taking it down to the walls,” he said. “It will be new carpet, vinyl, new beds, chairs, desks, artwork, granite vanities and new mirrors with built-in lights. It’s something that has been in discussion for three years; we’re excited for it to begin.” The construction schedule will be very aggressive, with the first phase slated for completion by Dec. 15. Courtney said the hotel is trying to get as much work done during the Thanksgiving and Christmas holiday season, which is typically a slower time for the industry. The 250 rooms will hopefully all be finished by mid-January. Later in the spring of 2012, the hotel will renovate the porte-cochère and the entryway to the hotel, which was originally constructed in 1982.

The EnterpriseNov. 21-27, 2011 3

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PROJECT HIGHLIGHTSWAREHOUSE/DISTRIBUTION

FOR YOUR NEXT PROJECT CALL JAY RICE AT 801-633-3994

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HOTELfrom page 1

A major renovation project at the downtown Radisson is slated to begin today, Nov. 21.

being built by Springville-based M-13 Construction. The hotel has a construction cost of just over $4 million, with the overall proj-ect cost closer to $5.6 million. The three-story structure will fea-ture 81 total rooms, including 28 suites, with an average room size of 350 square feet. The exterior is a combination of EIFS, stucco and stone, with interior finishes of paint, wallpaper and an acrylic texture. Amenities include meet-ing and boards rooms, s fitness center, an indoor pool and spa, 42-inch LCD televisions in each room, along with complimentary continental breakfast and shuttle service. The hotel is geared main-ly for business travelers and those traveling along I-80 through Salt Lake City, Patel said.

Radisson Downtown toreceive $5.2 millioninterior renovation

Bare Studios, a new for-rent corporate production studio, is slated to open in January in about 11,000 square feet at 2210 W. Alexander St., West Valley City. Company president Greg Branin said the venture is being financially aided by a group of Las Vegas companies that are acting as silent partners. Branin described the facility as ideal for corporate video productions and photo shoots, as it will house a multimedia studio

with a stage and light production capabilities. “There are no employees because as the name implies, it’s bare. You lease the facility and that’s pretty much it,” Branin said. “There isn’t anything like it in the valley. There are some smaller studios and there are some studios where you go and they do the full production for you. But a lot of people don’t need that, they have their own in-house video and photography guys and marketing

guys. They don’t need an entire production, they just need the space to be able to do it. We’re considering having a coded access door and you just go in and punch in the code and there’s a studio you can use.” A brochure-style website is being developed for the new business, which leased its location with the assistance of Josh and Bob Mills at Commerce Real Estate Solutions.

For-rent production studio to open in WVC

Several buildings under construction at BDO Construction of three new building in Business Depot Ogden has either begun or soon will. Big-D Construction has been chosen as general contractor to erect a 78,000 square foot call center for Home Depot Inc., which recently received an incentive from the state to create 691 new jobs in Ogden. GSBS Architects designed the Home Depot facility, to be located at 801 S. Depot Dr. It is slated for completion next June. Also under construction in

BDO is a 160,000 square foot tilt-up concrete structure that will house multiple tenants, according to BDO general manager Blake Wahlen. He said the building is about 70 percent leased; tenants will include McKenzie Exhibit (50,000 square feet) and Powder Processors (40,000 square feet). Big-D is the general contractor on this structure as well. Nearing completion at BDO is a 32,000 square foot flex building being constructed

by E.K. Bailey Construction. It is also about 70 percent leased, Wahlen said. Tenants will include Universal Cycle, Memory Works and Depot Daycare. Business Depot Ogden, a division of Salt Lake City-based The Boyer Co., is a 118-acre master planned business park with 500 build-to-suit available acres. BDO has 860,000 square feet of new construction, 6.5 million existing square feet and 1.8 million square feet of available space.

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Goal Zero, a manufacturer of portable solar power systems for various USB, AC and DC devices, plans to move to a nearly 59,000 square foot facility at 675 W. 14600 S. in Bluffdale in January. The firm is currently located in 14,000 square feet, said company president Joe Atkin. “You kind of wait until you’re stacked like sardines to be able to make a move like this,” Atkin said. “Obviously, it’s expen-

sive. But basically it gives us growth for four or five times what we’re doing today. Right now we have about 3,000 square feet of office space. That will go to 12,000 square feet. We’ve grown in employees from about eight last year to over 60 and as sales increase I’m sure we’ll have to add on more people.” The company, founded in 2007 by Utah resident Robert Workman, has experienced phenomenal growth since it started selling products in 2009, with projected revenues of well over $10 million in 2011.

“When we talk about the mission of Goal Zero and what we’re doing, our mission is to empower people — with products and with a good stable job,” Atkin said. “We’re finding that consum-ers are ready for our products so we’re cranking up to meet that demand.” Currently located at 14864 Pony Express Road, Goal Zero leased its new building with the assistance of Michael Jeppesen and Jeremy Jensen of IPG Commercial Real Estate.

In the greater Salt Lake market, job growth and posi-tive signs in the housing market indicate potential improvement in 2011, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the U.S. housing market. Over the past 12 months, there have been a total of 22,600 new jobs created in the market, which is an annual growth rate of approximately 2.3 percent. “While the national econ-omy remains weak, there are a few bright spots, one of which being the greater Salt Lake mar-ket. The greater Salt Lake mar-ket has recently been highlighted by many economists as one of the healthiest markets across the nation,” said Eric Allen, director of Metrostudy’s Greater Salt Lake Division. Annual new home starts for the greater Salt Lake market totaled 4,577 as of 3Q11, which

is a 10 percent decrease compared to the annual pace last year at this time. Annual new home clos-ings have also declined, to a total of 4,743, which represents a 27 percent decrease compared to last year’s pace and 5.2 percent from last quarter. “However, when comparing quarter over quarter, new home starts have shown improvements,” said Allen. During the third quar-ter, builders started 1,443 new homes, which is an increase of 22 percent compared to 3Q10, and 43 percent above last quarter (2Q11). “At this time last year, the market was benefiting from the surge of the tax credit, therefore new home closings were much higher than today, thus result-ing an increase in the supply of homes,” said Allen. The number of finished vacant single family homes has decreased just over 27 percent compared to last year to 532 homes; however the supply has remained nearly unchanged at a low 1.9 months. “The Greater Salt Lake mar-ket is receiving much praise as being one of the strongest and most healthy markets around the country, and the results are begin-ning to resonate throughout the housing market,” Allen said.

HireVue, an Draper-based provider of on-demand interview-ing technologies, has hired David Bradford as CEO. Bradford assumes the position from Mark Newman, who remains with the organization as its founder. Until April of 2010, Bradford served as CEO of Fusion-io, developer of a new storage mem-ory platform. He continues to work with Fusion as chairman of its Strategic Advisory Board. Previously, Bradford served as

senior vice president and general counsel of Novell Inc. Users of HireVue can browse, watch, rate and share the interviews they want, on their own time, similar to streaming their favorite movies and even from a smartphone. Recognized by HR Executive magazine as a Top HR Product of 2011, HireVue’s Digital Interview Platform also helps improve interviews of all types, including in person, phone and video interviews.

David Bradford named CEO of HireVue Power systems firm to expand into 59,000 sq. feet

Report: greater Salt Lake area an economic 'bright spot'

Nov. 21-27, 2011 5The Enterprise

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• Industry Briefs •

Gov. Gary Herbert paid a visit to West Valley City-based Wheeler Machinery on Nov. 9 to mark the 60th anniversary of the Caterpillar and construction equipment dealership. As part of the tour, the governor got an up-close look at Caterpillar’s new CT660 vocational truck, currently the first and only one in the state of Utah. Herbert also saw first-hand the power of Wheeler’s state-of-the-art dynamometer facility. Capable of testing both diesel and natural gas engines with up to 5,000 horsepower, it is the only certified dyno of this level in the western United States. “By providing a great product and great service … the added value to us here in Utah is they add to the economy in such a significant way,” Herbert said. “With 300 people employed here in the Salt Lake City area, that means they’re providing income and resources for families that ripples through our economy. The CAT equipment we have here [at Wheeler Machinery Co.] is just a boon to mankind… it’s hard to even comprehend how much dirt we move with these big pieces of equipment. And thanks to people like Wheeler Machinery, our economy continues to expand here in Utah and we’re creating jobs and a better quality of life.” Pictured left to right are Spencer P. Eccles, Rob Campbell, Gov. Herbert and Paul Campbell at Wheeler Machinery Co. in front of the new Caterpillar CT660 vocational truck.

ASSOCIATIONS • ChamberWest, the region-al chamber of commerce for the West Valley City, the City of Taylorsville and Kearns Township area, is launching a sister cham-ber of commerce to service business members in Millcreek Township. Named the East Valley Chamber of Commerce, the new regional chamber is officially rec-ognized by Millcreek Community Councils and Salt Lake County and will initially represent the busi-ness community of Millcreek. The chambers will operate individu-ally yet with shared membership and shared benefits and host area specific multi-chamber events and functions. COMPUTERS/SOFTWARE • Solera Networks, a South Jordan-based creator of network security analytics platforms, has appointed Rick Simmons vice president of North American sales. Simmons will guide the team responsible for the com-pany’s recent triple digit sales growth. Simmons brings more than 25 years of executive sales experience to the position, hav-ing led several organizations to record revenue growth and world-wide expansion. Simmons comes to Solera Networks from Bit9,

where he led Federal Government & Southeast area sales. Prior to that, he was vice president, North America sales at E2open where he oversaw the major account rela-tionships and increased revenues 75 percent. • ThomasARTS, a Farmington-based direct-growth marketing company with offices in Utah, California, Minnesota, Texas and New York, was hon-ored at the annual Public Relations Society of America Golden Spike Awards ceremony, held Nov. 9 in Salt Lake City. ThomasARTS received the Golden Spike in the research category for work with the Zions Bank Emerging Markets Research Project. The agency also received finalist recognition in the competitive print communica-tions category for the Utah Valley Convention and Visitors Bureau Annual Report. • Sabrina Stover, CEO of American Fork-based BidSync, a provider of government e-pro-curement, e-sourcing software and bid notifications, has been honored as finalist in the Stevie Awards for Women in Business. Stover was named as a finalist for the category of Best Executive – Service Businesses – Up to 100 Employees - Computer Services, Software & Telecommunications. LAW

• Kristin L. Aldred has joined Fabian Law as an associ-ate. Aldred graduated from the University of Virginia School of Law in 2005, where she was on the managing board of the Virginia Journal of International Law and a semi-finalist in the school’s annual Moot Court com-petition. Prior to law school, she graduated magna cum laude from Rice University with majors in

English and Religious Studies. She previously practiced law in Texas for five years and com-pleted a two-year federal clerk-ship with district judge Ewing Werlein, Jr. in 2007. Aldred is a member of the firm’s Complex Litigation, Employment, Energy & Utilities and Environment/Natural Resources practice groups. • Robert E. Mansfield, a partner in the Salt Lake City office

of Snell & Wilmer, has been named the Republic of Korea’s Honorary Consul for the State of Utah. The appointment comes after a lengthy, multi-year process of being approved for his new role by both the Consul General of Korea in San Francisco, the Korean Embassy in Washington, D.C. and ultimately, the U.S. State Department. Mansfield’s earliest

continued on page 7

6 The Enterprise Nov. 21-27, 2011

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#3095_BOT_BUS2BUSVIP_AD_Rev2.indd 1 10/19/11 4:49 PM

• Nov. 30-Dec. 1, 7:30 a.m.-12:30 p.m. both days: “Real Estate Investment Analysis,” an eight-hour CORE commercial real estate edu-cation course conducted by NAIOP. The course is designed to provide the technical skills necessary to analyze the financial feasibility of real estate investment opportunities. Valuation techniques such as direct capitaliza-tion and discounted cash flow analy-sis are introduced first, followed by an examination of debt financing’s impact on real estate investments. Location is the Spencer Fox Eccles Business Building, Room 110, at the University of Utah in Salt Lake City. Cost is $125 for NAIOP members, $150 for nonmembers. Register at http://bit.ly/NAIOP8HrsCoreCE. • Nov. 30, 4-7 p.m.: Salt Lake Chamber Open House. The chamber and its strategic partner, the Downtown Alliance, will show off their newly redesigned office suite. More than a dozen firms will cater the event, which will feature local performers. Location is the chamber offices, 175 E. 400 S. Free. For more information, contact [email protected] or call (801) 328-5055. • Dec. 1-2, 7:30 a.m.-6 p.m. Thursday, 8 a.m.-noon Friday: The Summit Director and Officer Training Conference, presented in partnership with the Utah chapter of the National Association of Corporate Directors (NACD). The event is designed for board chairs, corporate directors and senior executive officers of publicly traded corporations and corporations growing towards pub-licly-traded status. Participants will gain insight and receive substantive instruction on topical issues in corpo-rate governance that affect publicly listed companies and board mem-bers. With participation from lead-ing executives, corporate directors, policymakers, and experts from the legal and financial services indus-tries, along with academic authorities from the Brigham Young University Marriott School of Management, the Summit Conference will teach partici-pants how to develop a framework for making informed board decisions and

exercising sound business judg-ment. Presenters will include Steven Walker, NACD; George Feiger, Contango Capital Management; Les Brorsen, Ernst & Young LLP; and Joan Woodward, Travelers. Location is the St. Regis Ceer Valley Resort, 2300 Deer Valley Dr. East, Park City. Cost is $550. Register at http://www.summitconf.org/register. • Dec. 8, 3:30-5:30 p.m.: “How to Raise Money,” sponsored by the Wayne Brown Institute and VentureCapital.org. At the event, sev-eral items will be discussed, includ-ing current trends, the basics of the fundraising process, finding the right investor, and how to raise capital from the perspective of a serial entrepre-neur and an investor. An open Q&A session will follow. Location is the law offices of Holland & Hart, 222 S. Main St., Suite 2200, Salt Lake City. Free. • Dec. 8, noon-1 p.m.: “Protecting Your Innovations After the Leahy-Smith America Invents Act,” a panel discussion hosted by Kirton & McConkie. The Leahy-Smith America Invents Act is the first large-scale U.S. patent law reform in 60 years that will dramatically reshape existing patent laws. While the Act creates streamlined alignment between U.S. patent law and interna-tional patent laws, it also significantly changes the landscape for obtaining and enforcing patents. A panel presen-tation will explore some of the chang-es from this Act and the implications on products and inventions. The panel will include Jill Powlick, corporate intellectual property counsel at Idaho Technology Inc.; Sally Brown, patent counsel at Autoliv; and James Larson, corporate and IP counsel at Innovative Medical Device Solutions. Moderator will be Ken Horton, a shareholder at Kirton & McConkie. Location is the Kirton & McConkie offices, 60 E. South Temple, 16th floor, Salt Lake City. Free. Lunch will be served. RSVP by Dec. 6 with Cynthia Kersey at (801) 323-5966 or via e-mail to [email protected]. Register at www.venturecapital.org.

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experience with Korea was his military assignment in the early 1980s with the Combined Field Army unit in Ui Jong Bu. This unit involved Americans and Koreans working side by side on various strategic projects. He has contin-ued his involvement with Korea, and since being selected as the Honorary Consul, Mansfield has returned to Korea for a week-long orientation with the Ministry of Foreign Affairs and re-orien-tation to the country, and noted the incredible economic and infra-structure progress in the advancing country. In his new role, Mansfield will work closely with the Utah Korean community in pursuing their organizational agenda. He is also planning economic develop-ment events that will engage Utah companies involved or interested in doing business with Korea.

MANUFACTURING • Pepperidge Farm, a part of Campbell Soup Co., plans to create 54 new jobs at its exist-ing facility in Richmond due to increasing demand for its Goldfish crackers product line. The exist-ing Richmond facility has been in continuous production since 1974. Expansion of the facil-ity will commence in 2012, with production scheduled to begin in 2014. The company expects to invest up to $45 million in capital improvements over the course of the project. The state has autho-rized a 10-year, post-performance, single-payer refundable tax credit of $475,032 over the life of the project. The 54 jobs created will pay at least 100% of the county average wage and will pay new state wages in excess of $18.9 mil-lion. • ThomasARTS, a Farmington-based direct-growth marketing company with offices in Utah, California, Minnesota, Texas and New York, was hon-ored at the annual Public Relations Society of America Golden Spike Awards ceremony, held Nov. 9 in Salt Lake City. ThomasARTS received the Golden Spike in the research category for work with the Zions Bank Emerging Markets

Research Project. The agency also received finalist recognition in the competitive print communica-tions category for the Utah Valley Convention and Visitors Bureau Annual Report.

MEDIA/MARKETING • Penna Powers Brian Haynes (PPBH), Salt Lake City, earned five gold and six final-ist awards at the annual Public Relations Society of America Golden Spike Awards ceremo-ny in Salt Lake City. The firm won a Golden Spike Award for its “Boost ‘til 8: Kyle’s Story” video for UDOT and the Utah Department of Public Safety and for its Express Pass Education Campaign that promoted a pro-gram allowing solo drivers to pay an adjustable fee based on conges-tion to use the remaining space in the under-utilized carpool lane was new to Utah. The Pioneer Crossing DDI Public Education Campaign & Pioneer Crossing DDI Movie Theater Spot for UDOT also won a Golden Spike, as did a Sam White Bridge Move piece for UDOT. • Intrepid, a Salt Lake-based Hybrid communications agen-cy, garnered 11 Golden Spike Awards, including Best of Show, and five finalist honors. The firm claimed more Golden Spike Awards than any other agency, corporation, government entity or nonprofit organization. Intrepid

was awarded Golden Spike Awards for public relations, adver-tising, interactive and social media for clients, including Mountain Medical, UDOT, Elizabeth Smart and Hale Centre Theatre. Intrepid received Best of Show honors for its use of direct marketing to pro-mote Mountain Medical’s afford-able quality imaging services to referring physicians. The market-ing strategy received a perfect score from both judges. REAL ESTATE • The Salt Lake City office of commercial real estate broker-age CBRE has added four new employees. Jennifer Berriochoa is client services coordinator for the Scott Wilmarth and Tab Cornelison team. Hailey Crickmore is assis-tant real estate manager in Asset Services. Bethany Sommer is cli-ent services coordinator for the Eric Smith and Kreg Peterson team. Jessica Worth as client ser-vices coordinator for the Craig Thomas and Eric Gustafson team.

RESTAURANTS • Papa Murphy’s, the country’s largest and fastest

growing take-and-bake pizza chain, has opened five new stores along the Wasatch Front. The new Papa Murphy’s stores are located in Salt Lake City (150 E. 3300 S. and 1645 W. 700 N.), Layton (765 West Antelope Dr.), Clinton (1952 N. 2000 W.), and Springville (655 E. 400 S.)

RETAIL • Online retailer Overstock.com Inc., Salt Lake City, has launched its free O.co iPad appli-cation. The new application can be found on the iTunes website and will carry the same prod-uct selection that is available on the Overstock.com website. To download the app visit itunes.apple.com/us/app/o.co-mobile-shop-ping/id339883869?mt=8&ign-mpt=uo%3D4. Customers will be able to filter their search results by top sellers, review ratings, price and new arrivals. The app also includes pinch zoom, swipe left/right and up/down, and infinite scroll.

SCIENCE • Great Basin Corp., a West Valley City life sciences com-

pany developing sample-to-result molecular diagnostic solutions, has submitted a 510(k) applica-tion to the U.S. Food and Drug Administration (FDA) for its first molecular diagnostic test for Clostridium difficile (C. diff). C. diff is one of the most com-mon and deadly hospital-acquired infections, impacting approxi-mately 700,000 people in the U.S. annually, according to the Centers of Disease Control and Prevention. The company also plans to submit an application to European Union regulatory authorities before the end of 2011 to obtain CE Marking for the C. diff test.

TRANSPORTATION • A new Larry H. Miller Chrysler Jeep Dodge Ram Riverdale dealership opened Nov. 15 at 1481 W, Riverdale Road in Riverdale. Featuring an expanded customer waiting lounge and guest service area, the location also includes three times the available service bays from the present location. The dealership’s general manager, Troy Bullard, has been with the Larry H. Miller Group for six years.

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R

INLAND WESTERNRetail Real Estate Trust, Inc.

Three intriguing business books — to give or to get (Editor’s note: Each month Jack Covert, founder of 800-CEO-READ, reviews the best recently released business books. Jack is coauthor of The 100 Best Business Books of All Time, released in March of 2009. 800-CEO-READ is a leading direct supplier of book-related resources to corporations and organizations worldwide, and specializes in identifying trends in the changing business mar-ket.)

The Rare Find: Spotting Exceptional Talent Before

Everyone Else By George Anders, Portfolio

276 pages, $26.95, Hardcover There are many situations in which you want to make the right choice, a choice that might change your lives in hugely positive ways. Consider standing before a roulette wheel in Las Vegas: you choose “18 Red” for a variety of reasons that have all sorts of associative data you apply to it. Red is excit-ing; No 1 is a symbol of success; the 8 represents the infinity sym-bol; maybe 18 is the age of your daughter. If you’ve made the right choice based on these influences, the payout will be high. Now consider hiring someone for a position in your company. You look at a candidate’s resume and study the provided data: where they’ve recently worked, what they did there, how long they did it, where they went to school, what grades they received. It all looks good, so that candidate gets the job. While gambling and hiring seem quite dissimilar, the risks in each scenario are similar. And if you’ve made the right choice, the payout could be high in this case, too. But which approach to deci-sion-making seems more valid? The associative data or the concrete facts? The facts, right? Well, in The Rare Find, George Anders argues intelligently that these two exam-ples might be equally meaningful in what they reveal. Hiring is just a good guess, and even the “facts” aren’t very illuminative. Even if a candidate spent five years at a suc-

cessful company and graduated Ivy League, it doesn’t mean they’ll fit your culture or excel in the position you have to offer. To get the best fit, Anders advises you look for a candidate’s character not through employee or education experience, but through their alternative interests. Perhaps a candidate has a jagged work his-tory, perhaps they don’t have any glaring success stories. Anders says don’t overlook these candidates. Read resumes from the bottom up, Anders suggests, and look for hints as to “why” the person did what they did, not just the fact that they did it. Oftentimes, he surmises, you’ll discover hidden talents that can be useful to your organization and the tasks you need completed — and potentially avoid candidates who just “look good on paper.” While some might regard this approach as a gamble, The Rare Find will counsel you on just why this approach is less of a risk, and will help you make better decisions in finding true talent to help your organization grow.

Blah Blah Blah: What to Do When Words Don’t Work

By Dan Roam, Portfolio350 pages, $29.95, Hardcover

I’ve been fortunate to spend time with Dan Roam over the years, and his new book, Blah Blah Blah, is as high-energy, insightful and creative as he is. Blah Blah Blah is a book that may just be impossible to give justice to in a review. From cover to cover, Dan Roam uses his great skill at communicating through words and pictures to inform us, charm us and convince us to accept his belief that ideas become clearer when they are represented by pic-tures. Not that words aren’t impor-tant — this book is full of them — but Roam explains that: “Words are abstractions, the ultimate mental shorthand. When we know what they mean, words instantly call to mind ideas, imag-es, feelings, and memories. When we all speak the same language, our words offer near-perfect com-munications efficiency ... But the extraordinary verbal efficiency of words also has a steep downside. Like all abstractions, words are by

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Is it safe?

It doesn’t seem to matter whether I am going to Cancun or Cairo, the question I’m asked more than any other is “Do you think it’s safe to travel there?” I hate to say it, but Americans are the biggest fraidy-cats in the world. I think maybe it has something to do with sensationalized television news reporting; but in any case, people who live in the United States worry more about safety than anything. If you want to be completely logical about it, Cancun is about 1,500 miles from the U.S.-Mexican border, which is where the drug fighting is going on. When there is a problem in Chicago, does that really have an effect on our safety in Salt Lake City? And don’t get me started on the issue of safety in downtown Salt Lake versus, say, Egypt. Think about it: does the fact

that someone was recently mur-dered in his tent in Pioneer Park deter you from shopping at the Gateway, only a block away? If the NBA labor dispute ever ends, will you think twice about going to Energy Solutions Arena after

parking across the street from the aforementioned scene of the crime? The last time an American was injured in Egypt was while station-ing herself in the midst of a riot 10 months ago. Last I heard, the revolution was over. We’ve had more Americans killed or injured by TRAX trains in the last month than have been killed or injured in all of Israel and Egypt combined in the last 10 years. So, give me a break! I mention Israel and Egypt because it just so happens I am leading a tour to those two places starting Dec. 28. We have this fabu-lous itinerary arranged: first, Rome; second, Israel; third, an optional extension into Egypt. We’ll be vis-iting the Colosseum, the Vatican Museums, Saint Peter’s Basilica, the catacombs; then on New Year’s Eve heading to Israel for visits in

Don Shafer

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Midwest Commercial Interiors987 S. West Temple • SLC, UT 84101

801•359•7681 •mwciutah.com

Un/TetheredJust a generation ago, work and life were treated as different entities.

Thanks to mobile technology and a globally interconnected world, we’ve gone from “Honey, I’m home!” to “I’ll be just a second, I’m

checking email.” What does this mash-up of our personal and professional lives mean for workplaces at home and all the

other sites where work gets done?

The Home/O�ce Paradox“Many people have home o�ces or o�ce-like spaces, yet few actually use them, or use them as expected. The common advice for a home o�ce is that you should be away from everything else happening in the house. That’s the exact opposite of what people are doing. They are happily adapting their own solutions to better integrate work within the other parts of their lives.Staying in the LoopWe may be out of the o�ce but we’re not out of touch. During many of the hours they spend at home, people connect to the outside world. Everyone brings their devices home. And everyone — clients and bosses especially — values responsiveness.Working Amid Family LifeSome people feel most comfortable working in the kitchen or living room while family life swirls around them. They stay on top of work yet remain part of the family. For example, a software manager screened incoming emails at a kitchen counter while his wife (who sometimes pops open a laptop at the counter) prepared dinner. His rationale: “Our daughter’s doing her homework at the kitchen table, so I can be a total screen geek and yet still be vaguely social with my family.”RoamingPeople don’t stay put. When they’re out of the o�ce, they miss the energy of having other people around, so they spend part of their days in “third places,” like co�ee shops. Achieving a good vibe and aesthetic, without necessarily having to engage with others.Soft LandingsComfort historically has been antithetical to the head-down work ethic: if you’re too comfortable the fear was you’d lose focus. But at home, comfort is king. “I absolutely cannot work with my feet down. They have to be up.” Or, “I don’t feel like I’m working here. That’s the most important feeling.”TogglingTraditional 9-5 routines are disappearing. For many, the day more closely resembles four or �ve waves that begin earlier and end later, with a back and forth between work and life activities. People switch between these two pursuits without fully abandoning the other. This is toggling, It’s not just multitasking, it’s multitasking combined with multi-locating.NestingSome work-at-home people are creating hybrid work/home settings that combine comfort with a pleasing aesthetic, i.e., a nest. A design director camou�aged her workspace at home to look as much like a living room as a place to get things done. The desk is like a side table and also converts to an extension of the dining table, and a large, pillow-stacked lounge chair and couch take prominent positions. They can sit there together and feel a sense of nested communing, while still working.Boundary IssuesMerging work and home life may be inevitable for many people, but it’s not always easy. Being distracted by the very comforts that make working at home desirable in the �rst place, and the stress of trying to separate work and the rest of life, are typical issues. It’s about setting boundaries. When you’re always able to tap the interconnected business world, the live/work balance too often tilts toward work.Work and workers, when set free, �ow like water along the path of least resistance. Untethered from the o�ce, but not the work. Email follows us everywhere and our work demands are escalating, yet we want a life outside of work. While people occasionally need to cocoon in a secluded space to concentrate on a task, that’s the exception. Most prefer to be nomadic, mixing the always-on stream of work with other activity. Rather than be secluded, people want to stay connected to others for stimulation and, likely, to compensate for the increasingly distributed lives so many of us lead.For most of us, comfort is key, both psychic and physical. Wherever we work, we want to be relaxed, stimulated, even inspired. Smart companies get it, and they’re building inspiring places to work. The rules are gone. Conventions are being challenged. The tethers are decidedly coming o�.

definition distinct from the actual “things” they represent. If we are unclear in our own mind about which specific “thing” our word means or if we’re unclear when we share words with other people, the whole system crashes.” Roam’s solution? Make com-munication less of an abstraction by using pictures to help guide under-standing, to learn more quickly and to share ideas more clearly. Start with Roam’s method of creating a Visual Grammar: “When we say a word, we should draw a picture.” Easy enough. Then combine that grammar into Vivid Thinking, which is more than just linking word pictures together, but about combining them in a spe-cific way that reflects the complex-ity of our ideas — because Vivid Thinking is Balanced Thinking. As Roam writes: “Verbal mind, visual mind. They see the same world, but they don’t see it the same way.” This is important: drawing pictures as Roam suggests is not about simplifying. Nor does it dumb down our ideas. Instead, it makes them more concrete, more sticky. In fact, reading through Blah Blah Blah reminds me of my first read-ing of Made to Stick by Chip and Dan Heath. Perhaps it’s Roam’s use of the word FOREST as a mne-monic device for his six essentials of vivid ideas. (The Heath broth-ers used the word SUCCESS as a mnemonic to remember their keys to sticky ideas.) FOREST stands for Form, Only the Essentials, Recognizable, Evolving, Span Differences, Targeted. The use of FOREST is par-ticularly memorable because of its relations to the phrase, “He couldn’t see the forest for the trees.” For Roam’s book offers easy to remem-ber, easy to implement ideas that will help you see (and communi-cate) the forest and the trees.

The Power of LEO: The Revolutionary Process for

Achieving Extraordinary Results By Subir Chowdhury, McGraw-

Hill208 pages, $28.00, Hardcover

Subir Chowdhury has writ-ten 13 books over the years, most recently a wonderful little para-ble entitled The Ice Cream Maker in which he introduced the LEO approach to sustaining quality in everything a company does. Since then, he has received repeated requests to write a more in-depth treatment of that process as it would work, or has worked, in the real world. And so Chowdhury took the LEO approach into the real world, tested it in numerous companies large and small, and has now deliv-ered the book that so many were asking for — The Power of LEO. LEO stands for Listen, Enrich and Optimize, and it was developed by Chowdhury and his team after he realized that the Six Sigma and

other management tools they were teaching to companies weren’t being fully implemented because they weren’t being tailored to those companies’ specific needs. LEO is designed to remedy that, tailor-ing those tools to each company’s unique circumstances, goals and culture. The Listen process requires putting aside past assumptions to comprehend the challenges the organization may be facing — involving customers, suppliers and employees in the process. The Enrich process involves reaching out to all relevant parties for ideas and solutions. And the Optimize process is when the solutions are examined and evaluated, subject-ing them to every kind of challenge along the way and correcting pos-sible shortcomings. As you move through these processes, the goal is to go from simply solving the problems your organization faces to avoiding them in the first place. There are four cornerstones or mindsets to the LEO approach: “Quality Is My Responsibility” in which quality is shifted from a department responsibility to a personal responsibility; “All the People, All the Time” stresses the need for employees on every level of the organization to be a part of the quality campaign; an “I-Can-Do-It Mindset” encourages build-ing employee confidence to ready them for the quality transforma-tion, and; “No One Size Fits All” stresses again the need for solutions that are tailored to the company and situation at hand. The LEO approach is then applied to three phases, the Fire, Flow and Future. The Fire is the specific problem at hand, Flow is the entire operations side of the company, and Future involves new products and services. Chowdhury dedicates a chapter to each of these areas with a case study for each: “Putting Out Fires” at a jelly-bean factory, “Fixing the Flow” at a toy company, and “Commanding the Future” at a major car manufac-turer. He then rounds out the book with more stories on “Listening Hard,” “Enriching the Product” and “Don’t Compromise, Optimize.” Throughout The Power of LEO runs the undercurrent of “The Quality Mindset,” which focuses on people quality, and the author stresses from the beginning that the American leadership in innovation can better benefit our organizations and economy if we focus on quality in everything we do.

BOOKSfrom previous page


I get a ton of e-mails from people seeking insight or asking me to solve sales dilemmas. Here are a few that may relate to your job, your life and, most important, your sales thought process right now: Jeffrey, Your seminars and books have been highly therapeutic to me in my budding sales career, but I have a ques-tion I’m having a hard time answering on my own. My wife is building a Mary Kay business, loves what you do, and is dying to put your methods to use. Her business is 80 percent sell-ing product and 20 per-cent recruiting. A lot of the recruits typically come from the product buyer’s group. How does one combine those two activities without turning off the “makeup buying” customers who are not interested in a sales career? Does someone like her put up a “beauty tips” social media presence to promote to her “makeup buying customers” and then a separate one for recruiting people to a team? Or do you pep-per one in with the other? My con-cern is turning off the “product buying public” that IS interested in beauty tips but NOT interested in being recruited. I appreciate your guidance. Matt Matt, Here’s the wisdom I would share with your wife: Luckily, the product you’re selling has been around for years and enjoys a great reputation. I recommend you interview some of recruits who have embraced the opportunity to sell and let some of your more successful people post on the web-site about how they started out loving the product and ended up reselling the product. If the mes-sage does not come from you, it will not be a turn-off. The key is balance – and your job is to balance beauty tips with beauty money-making opportunities of at least 5:1 in favor of beauty tips. Best regards, Jeffrey

Jeffrey, How do buyers decide, and what are buyers looking for? Alana Alana, Buyers are looking for five things: 1. A perceived difference of your product and service – and that of your competitors. 2. A bet-ter perceived value in buying what you have versus buying from a

competitor. (Notice I did not say “lower price,” I said “better value.”) 3. Little or no risk in pur-chasing from you. The buyer must perceive that the gain of ownership is greater than the risk of purchasing the wrong thing. 4. The buyer must like you, believe you, have confidence in

you and trust you. But it begins with liking you. 5. Lowest price. Many people (maybe even you) will think I have done them a dis-service by not focusing on price concessions or winning a bid. But, if you present the first four ele-ments outlined above, price will go away as an issue in 60-70 per-cent of the sales you make. The key is this: Buyers and decision makers are looking for “comfort,” not just a “deal.” The decision-maker has to feel that it’s a good fit for their company, or they will pass no matter what the price. The decision-maker is also going to take into account past dealings and word-of-mouth advertising. All buyers and decision-makers in any given industry know one another. Your job, besides having a great product, is to have a great reputation. Having a great reputa-tion reduces the perceived risk and oftentimes is the very key to getting the order. Best regards, Jeffrey Jeffrey, In these hard times, what can salespeople do to protect their jobs? Tom Tom, The antidote is to be the best salesman or saleswoman. No one’s going to get rid of you then. There is a challenge among salespeople

right now. They’re not really will-ing to do the hard work that it takes to make selling easy. You need to tweet, have a business Facebook page, have a LinkedIn account, have a YouTube channel, have a blog, and have a website where you have registered yourname.com. It’s about building a per-sonal brand. You have to have 500 people following you on Twitter, you have to have 500 LinkedIn connections, you have to have about a thousand people on your Facebook fan page and you have to have a least a dozen YouTube videos up where people give testi-monies for you, or where you are giving valuable information to the marketplace. That requires work and time, and you can’t do it dur-ing your workday. You’ve also got to network and do prospecting, but it’s a lot easier to prospect on LinkedIn then it is to prospect on the phone with people you don’t know. But instead of performing those strategies, a lot of people are going home at night to watch stu-pid television shows. Think about this: Will what you’re watching on television help you double your sales? No! Great salespeople are willing to dig in and do the hard work because they understand there’s no 9 to 5 job in selling unless you’re at McDonald’s and you can ask the closing question, “Do you want fries with that?” Best regards, Jeffrey

Jeffrey Gitomer is the author of The Sales Bible, Customer Satisfaction is Worthless Customer Loyalty is Priceless, The Little Red Book of Selling, The Little Red Book of Sales Answers, The Little Black Book of Connections, The Little Gold Book of YES! Attitude, The Little Green Book of Getting Your Way, The Little Platinum Book of Cha-Ching, The Little Teal Book of Trust, The Little Book of Leadership, and Social BOOM! His website, www.gitomer.com, will lead you to more information about training and seminars, or e-mail him personally at [email protected].

© 2011 All Rights Reserved

Sales questions and answers

Jeffrey Gitomer

Despite the angst against banks that has been seemingly rampant as reported by media, there is one segment of the popu-lation that is satisfied with their banks: small businesses. A J.D. Power and Associates report released a few weeks ago shows that overall satisfaction among small-business banking customers has increased from 2010. The study of 7,000 small businesses shows that customer sat-isfaction in 2011 averages 717 on a 1,000-point scale, up from 711 in 2010. The study, now in its sixth year, measures small business custom-er satisfaction with the overall banking experience by examin-ing eight factors: product offer-ings; account manager; facility; account information; problem res-olution; credit services; fees; and account activities. Satisfaction in 2011 increases across all factors, except for fees. The same study showed that credit availability has increased, indicating greater stability and a return to some degree of nor-malcy within the small-business banking environment. So while most small-busi-nesses are happy with their bank, the question is: are you? If not, chances are you bank with a big bank where you are probably treated like a number. Consider switching to a commu-nity bank. A good friend of mine made the switch 25 years ago when just starting out in the contractor business. He shopped his busi-ness plan to several big banks in the area, all of which turned him down. That’s when he came into my office at Bank of American Fork. Together we worked out financing that jump-started his business. That friend is now a successful contractor who has built several multi-million-dollar buildings and continues to thrive today. All banks are not made equal and nowhere is that truer than when comparing community banks to large, national banks. Here are just a few facts that dem-onstrate the differences: • Banks with assets under $1 billion (most community banks) represent less than 11 percent of banking assets, yet they provide nearly 40 percent of the loans the banking industry makes to small businesses, extending credit that is crucial to job creation. • 73 percent of small busi-nesses using a small bank got the credit they sought in 2010, com-

pared with 48 percent of those using a large bank. • Small-business owners are twice as satisfied with their pri-mary bank if it is a community bank vs. a large bank (39 percent compared to only 15 percent).

Further, com-munity banks serve Main Street, not Wall Street. They didn’t make irresponsible loans and, as the numbers above show, are major funders of small businesses. When business own-ers apply for a loan at a community bank, they get an answer fast

because decisions are made by a local committee that knows the business and considers more than just a credit score. Community banks offer most of the same products and services as big banks, but at a lower cost. Small businesses can especially benefit from this by working with their community banker to create a package of products and ser-vices that exactly fits their needs at a cost that makes sense. Community banks give back to local communities through vol-unteerism and monetary dona-tions. They provide important financial education to the under-served. They are accountable to their customers and community members because these people are their friends and neighbors. There are 26 million small businesses in the country right now and 34 percent of those do banking with the top five banks. If you’re not satisfied with your big bank, there are nearly 8,000 community banks across the country and 21 right here in Utah that would serve your business well with personalized service, lower fees and products to help your company succeed. To find a community bank near you, use the Independent Community Bankers of America’s community bank locator at www.icba.org/locate.

Dale Gunther is vice chairman of the board of People’s Utah Bancorp, the holding company for Bank of American Fork, which is an Equal Housing Lender and Member FDIC. At the start of his 16-year tenure as CEO at Bank of American Fork, the bank had two branches and $80 million in assets; it now has 13 offices and more than $880 million in assets. Dale has served as chairman of the Utah Bankers Association and currently serves as an American Fork City Councilman. This article should not be considered legal or investment advice. Seek legal and investment advice from your own qualified professional.

Small businesses are happy with their bank. Are you?

Dale Gunther


Members of the Joint Select Committee on Deficit Reduction, also known as the “super com-mittee,” have a rapidly dwindling number of days to agree to a minimum of $1.2 trillion in deficit reduction over the next 10 years. Their agreement — or lack thereof — is due by midnight on Nov. 23. Assuming the “super com-mittee” agrees to at least the mini-mum level of deficit reduction, the Congress then has until Dec. 23 to accept or reject the pack-age. Should partisan poli-tics rule the day and an agreement is not reached, then $1.2 trillion in deficit reduction over the follow-ing 10 years automatically kicks in during early 2013, with half in the defense sector. The sum of $1.2 trillion is a lot of money, although it is (unfortu-nately) almost pocket change in the nation’s capital. That level of deficit reduction would trim gov-ernment spending over the next 10 years by less than 3 percent a year. Given the widespread pain of the Great Recession and the somewhat pathetic U.S. economic recovery of the past nine quarters, have you or anyone else you know been forced to trim your/their annual spending by 3 percent? No further comment neces-sary

The Committee As you are likely aware, the 12-member committee is com-prised of six Democrats and six Republicans, with six from the House of Representatives and six from the Senate. Each member of the committee was presumably picked by their party leadership for their devotion to party prin-ciples. A simple overview would suggest that Republicans are opposed to anything that smells of tax increases, while Democrats vow to protect current govern-ment programs, particularly Social Security, Medicare and Medicaid. Still, there is a bit of optimism that the good of the nation just might supersede the devotion to Party core values. Republicans on the com-mittee, with some support from other members of the Congress, have indicated a willingness to consider some forms of “revenue enhancement.” Just don’t call it a tax increase. Such willingness is conditional on the Democrats agreeing to some future reductions in the growth rate of entitlement and other programs, erroneously (in my view) referred to as spend-ing cuts. As noted previously, only in Washington, D.C. can you spend more money every year on a pro-

gram and call it a spending cut! Conversely, the Democrats are willing to consider some steps to slow the future growth rate of entitlement and other programs, if the Republicans are willing to help generate more revenue — again NOT referred to as tax increases.

Across the Pond All of the discussions have taken place with an eye toward the fragility in Europe. I indicated in a column 21 months ago (entitled “A Shot Across the Bow”) that worst case fears then beginning

to impact Greece were that excessive sovereign (national) debt issues could spread to other European nations. I suggested that such issues could also even-tually spread to the U.K. and to the U.S. We are simply NOT immune to the sovereign debt issues that have already

engulfed Greece, Ireland, Portugal — and now Italy and, increasing-ly, Spain. In recent days, anxiety about French sovereign debt and related financing costs has moved closer to the media’s page one. Note: the Germans and the International Monetary Fund DO NOT have the financial where-withal to rescue larger and larger euro nations now threatened with sharply higher borrowing costs.

In Coming Days The next few days are likely to become increasingly emotional and bitter, with both sides attack-ing the other side for their intran-sigence. The stakes are very high. The Democrats will be required to give a bit more in regard to slowing the future growth rate of entitlement programs. The Republicans will likely push for lower tax rates across the income board, with some limitations or eliminations as to current deduc-tions. The result would be slightly higher revenue. The best and brightest hopes are that a much larger agreement to reduce future budget deficits by $3-$4 trillion over the next 10 years could be reached. As I indicated in last week’s col-umn, such a “grand plan” could be worth perhaps 300-500 points on the upside for the Dow Jones Industrial Average (DJIA). This would be particularly true if the agreement was comprised of more substance and less hot air. Conversely, the failure of Democrats and Republicans to reach an agreement on what is really “a less than 3 percent” reduction annually in government deficits over the next 10 years would not be taken kindly by Wall Street. Such failure, with the typical complaining by both sides about how impossible the other side is to work with, could cost the DJIA 300-500 points.

Other Options Some have suggested that the failure of the “super commit-tee” to reach agreement — or of reaching a deal for the minimum $1.2 trillion of deficit reduction that is full of holes and unrealistic assumptions — could then com-pel the Congress to look at other deficit reduction options that have been presented during the past year or so. In my view, the best pro-posal to date has been that of the President’s own deficit reduction commission, chaired by Erskine Bowles of North Carolina and former Sen. Alan Simpson of Wyoming, which presented its recommendations last Dec. 1. That proposal called for reducing future

budget deficits by roughly $4 tril-lion, and was viewed by some as a viable down payment on financial sanity in this country. That comprehensive propos-al was hated by the far right AND by the far left. On the other hand, the political “middle” saw merit in many of the proposals. Such is many times the nature of good policy in Washington, D.C. Unfortunately, the rules of that 18-member commission required 14 members to agree to support it. It received 11 affirma-tive votes. As a result, the President AND the Congress essentially ignored its recommendations. Too bad. One other “proposal” came from Warren Buffet. He noted in

a CNBC interview that he could solve the deficit issue in five min-utes. He suggested “you just pass a law that says that anytime there is a deficit of more than 3 percent of GDP (note: versus roughly 9 percent currently), all sitting mem-bers of the Congress are ineligible for re-election.” Food for thought.

Jeff Thredgold is the only econo-mist in the world to have ever earned the CSP (Certified Speaking Professional) interna-tional designation, the highest earned designation in professional speaking. He is the author of econ-America, released by major pub-lisher Wiley & Sons, and serves as economic consultant to Zions Bank.

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Utah is an entrepreneurial state. Every week in this paper there are articles and notices of the formation and opening of new businesses. These businesses are high-tech businesses, low-tech businesses, service businesses and just about any kind of business you can imagine or that you wished you would have imagined. Most of these businesses have a few things in common: 1. They have limited capital; 2. The founders know with absolute cer-tainty that the business will be successful; and 3. The founders, owners and employees want to share in highly anticipated finan-cial rewards of the business. It is exciting when a new business actually succeeds and the owners and key employees are financially rewarded for their hard work and financial risk. One method of providing incentives to founders and key employees is the issuance or grant of restricted stock awards. A company may provide financial incentives to founders and key employees in a variety of ways including, but not limited to,

incentive stock options (ISO), non qualified options (NQO or NSO) and restricted stock awards. This article addresses basic informa-tion about restricted stock awards granted as incentive compensation to founders and other employees (recipients) and the consequenc-

es of Section 83b of the Internal Revenue Code on such awards. This is not a new topic but it is always helpful to consider potentially disastrous tax consequences for a seem-ingly easy compensation transaction. Inasmuch as an equity interest in the business is a desired, or even required, incentive

for founders and key employees, the consequences of the grant of “restricted stock” in the new busi-ness should be carefully consid-ered.

Restricted Stock The term “restricted stock” is used in a variety of ways when dealing with businesses. Under the rules and regulations of the Securities and Exchange Commission, restricted stock refers to unregistered stock and the requirements of Rule 144 adopted under the Securities Act of 1933,

as amended. For compensation purpos-es, the term “restricted stock” is stock which vests over a period of time. Section 83b of the Internal Revenue Code addresses the taxa-tion of restricted stock awards. Generally, the vesting requirement of restricted stock is a designated time period (a “vesting period”) during which the recipient must work for the company. If the recip-ient works for the company for the full vesting period, he has com-plete ownership of all the shares and the shares are no longer sub-ject to forfeiture. If the recipient does not continue to work for the company during the vesting peri-od, the shares are forfeited back to the company and the recipient has no further interest in, or claim to, the shares. Restricted stock may be shares that: • Have been issued for no initial payment by the recipient; or • Have been issued to the recipient for a price that is less than the fair market value at the time of issuance. For example, a company’s founders may be issued restricted shares with a two-year vesting period at a price of $0.001 per share and shortly thereafter, the company may raise capital from non-founder investors at $1 per share. In this case, the IRS may deem the fair market value of the founders’ shares to be $1 per share and not the $0.001 per share actu-ally paid by the founders. Once the vesting require-ments are met, the recipient of the restricted shares owns the shares outright and they are no longer subject to forfeiture, although in many privately held companies, shareholders may be required to enter into a shareholders’ agree-ment that restricts the future trans-fer of shares. The restrictions in such shareholders’ agreements continue to be applicable even if vesting periods have expired for restricted stock award purposes.

Income Tax Consequences Without an 83b Election

Inasmuch as restricted stock award shares are not vested when issued (and are subject to forfei-ture back to the company), there is no income event to the Recipient when the shares are issued and, therefore, no income tax liability attributed to the issuance of the shares at the time of issuance. This sounds great, right? If the company is successful, there is a possibility that the recipient may have a huge tax liability when the restricted shares become vested. Consider the following example: The recipient is given a restricted stock award of 10,000 shares of the company’s stock at

a time when the fair market value of the company’s stock is $1 per share. The recipient is not required to pay anything for the shares. The shares vest at the end of three years. Because the shares are not vested, the issuance of the shares by the company to the recipient does not result in income to the recipient. The recipient works for the company during the three-year vesting period. At the end of three years, the shares are fully vested and the company’s stock is now worth $15 per share. As soon as the shares are vested, the recipient now has ordi-nary income in the amount of the full current market value price of the 10,000 shares of stock. The recipient now has $150,000 of ordinary income that must be reported on his tax return and he must pay federal and state ordinary income tax on this amount. If the company is privately held, the recipient will likely not be able to liquidate his stock to pay the taxes owed. As you can see, this is a ter-rible result for the recipient. Is there any alternative for the poor fellow? Yes, the recipient could have made a Section 83b election for the restricted shares at the time they were issued.

Tax Consequences if an 83b Election is Made

If the recipient makes the Section 83b election on the restricted shares when the restrict-ed stock award is granted by the company, the tax consequences described above do not apply. Instead the recipient takes into cur-rent income the fair market value of the restricted shares at that time they are received by the recipient even though they have not vested. When the shares become vested, there is no taxable income to the recipient. When the recipient sells the shares after vesting, he reports capital gains or losses based upon

the amount realized on the sale of the shares over the fair market value of the shares reported at the time they were issued. Using the example set forth above: • The recipient will have ordinary income of $10,000 when the shares were issued and he would be required to pay income tax on such income at an ordinary income tax rate (not capital gains rate); • The recipient will have no income when the shares vest; • When the shares are sold for $150,000, the recipient will have capital gains income of $140,000 ($150,000 less the $10,000 report-ed as income when the shares were issued). The capital gains rate is significantly less than the ordinary income rate and the recipient has cash from the sale of the shares to pay the tax.Risk of Making an 83b Election A Section 83b election is not without risk. If the company’s stock does not rise in value after the recipient makes the election, the recipient has accelerated his tax payments without receiv-ing any benefit. If the shares are worth less when sold than they were when received, the recipient would have a capital loss, not an ordinary loss. In the above exam-ple, if the shares that were valued at $10,000 when issued are sold for $6,000, the recipient would have a $4,000 capital loss, not an ordinary income loss. There is also the possibil-ity that the shares may not vest if the recipient forfeits the shares after making the election. If this were to occur, the recipient could deduct any amount he paid for the shares (subject to capital loss limi-tations), but the recipient gets no deduction relative to the compen-sation income he reported when the 83b election was made. This is obviously a bad result.

Strategies Because of the potential risk, a recipient will have some uncer-tainty as to whether he should make the Section 83b election or not make the election. What will happen to the recipient, the company and the stock value in the future is unknown at the time the election must be made or not made, there can be no assurance the decision to make the election or not make the election will be the right decision. It is probably a good bet to make the Section 83b election in the following situations: • The amount of income the recipient will report when the election is made is small and the potential growth in value of the stock is great. • The recipient anticipates

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Nazareth, the Galilee, Jerusalem, Bethlehem and more. Then, after Qumran, the Dead Sea and Masada, most of us will head for Egypt and a five-star Nile River cruise, Luxor, the Valley of the Kings, the Cairo Museum, the Pyramids and Sphinx. I got this thing arranged through dickjensentours.com for a super price, particularly when you consider that airfare alone for all of this — Salt Lake to Rome to Tel Aviv, then Cairo to Aswan, and finally, back to Salt Lake — is going for about $2,500. Our deal is $2,599 for Rome and Israel, and $999 more for the Egypt extension. And, of course, our trip includes hotels, motor coaches, guides, entrance fees, two or three meals every day and a Nile River cruise. Not bad, huh? But then, I’ve dis-cussed the advantages of group tours previously. Anyway, so what do you think the most frequently asked question might be from people who are con-sidering the trip? Yo u ’ d think they would be asking, “How do you do it?” Or saying, “all that for that price — you’ve got to be kidding.” Or maybe questioning whether we will be staying in youth hostels, or making our own lunches after shopping at nearby grocery stores, or riding on public transpor-tation buses, or floating the Nile on a barge. In which case the answers would be no, no, no and no. In fact

we’ll be in first-class hotels, where we will also dine, doing our tour-ing in a motor coach with a very knowledgeable English-speaking guide, and sailing down the Nile on a five-star river cruise ship operated by a Swiss luxury-hotel group. And while a few questions from prospective travelers are weather-related: “How warm will it be?” “Does it rain or snow there?” And a few questions are about clothing: “Will I need my heavy winter coat?” “Is casual wear OK?” “Do I need to have a raincoat?” And a few concern money: “Should I exchange dollars here for local currency there?” “Do they have ATMs?” “Do U.S. dollars work with street vendors?” By far, the most frequently asked question, and usually the first question, is motivated by a visceral feeling of fear: “Do you really think it is safe to go there?” My answer is always met with an incredulous blank stare: “It is far more safe to travel there than it is to commute from your home to work on I-15.” Or something like that.

Don Shafer has been hosting radio travel shows in Salt Lake City for more than a dozen years, and was taught everything he knows by travel experts he has interviewed. Although some have called him “The Travel Doctor,” he holds a Ph.D. in a totally unrelated field, religion.


growth in the value of the stock and the likelihood of forfeiture is very small. It is probably not a good bet to make the Section 83b election: • If the recipient doesn’t anticipate being employed by the company when the shares vest, in which case forfeiture seems likely. • The recipient is required to pay a large tax payment at the time of the election with only modest prospects for growth in the value of the stock.What to Include in 83b Election

Filing The IRS has not provided a specific Section 83b election form for filing. The IRS requires a Section 83b election filing to con-tain the following information: • Recipient’s name, address and taxpayer identification num-ber (for individuals, their social security number);description of the shares received; • Date that shares were received, and the taxable year to which the grant relates; • Description of the restric-tions on the shares; • Fair market value of the shares at the time the shares were received; • Amount, if any, that the recipient paid for the stock; and

• A statement that copies of the Section 83b election have been furnished to the issuer of the shares (the company). The Section 83b election must be made within 30 days after the restricted stock award is made by the company to the recipient.

Conclusion The workings of Section 83b are not complex but because of the uncertainty of the future suc-cess of a company, the possibility of an increase in share value or no increase in share value, or the possibility of forfeiture of shares, a decision to make a Section 83b election can be difficult to make. Founders and key employ-ees should carefully consider the opportunities for tax savings, as well as the risks, associated with a

Section 83b election. They should discuss the risks and merits of a Section 83b election with their lawyers and accountants.

A. O. “Bud” Headman is an attorney with the Salt Lake City law firm of Cohne Rappaport & Segal. His practice focuses on arbitration and mediation, business formation and plan-ning, mergers and acquisitions and securities, registration and reporting.

This article is not intended to constitute legal or tax advice

and cannot be used for the pur-pose of avoiding penalties under

the Internal Revenue Code or promoting, marketing or recom-mending any transaction or mat-

ter addressed herein.

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At a time when nations that tax, spend, regulate and invest more consistently outstrip the United States in many measures of progress, leading Republicans speak only of smashing govern-ment and ending vital programs. In this constantly escalating rhetorical game, it became inevitable that one of them would eventually expose the emptiness of this vain-glorious display. And it was unsurprising that the ultimate faker would turn to be Rick Perry. The dim demagogue could scarcely contain himself during the CNBC debate as he turned to Ron Paul, his fellow Texan whose sincere hatred of government verges on anarchism, saying: “I will tell you, it is three agencies of government when I get there that are gone. Commerce, Education and the — what’s the third one there? Let’s see.” With the world watching, he literally didn’t know what he was talking about. And from there it only got worse. Grinning and groping for an

answer, Perry flailed embarrass-ingly until Paul helpfully sug-gested “EPA?” But for some rea-son that didn’t satisfy Perry, who smirked as if someone was trying to trick him into giving the wrong response. “The third agency of

government I would — I would do away with, Education, the ...” For painful moments, he kept digging. “ C o m m e r c e and, let’s see,” said Perry at last. “I can’t. The third one, I can’t. Sorry. Oops.” Later, he iden-tified the Department of Energy as the third

agency he would eliminate. (And as Think Progress blogger Matt Yglesias quickly suggested in a tweet, that answer may well mean he also has no idea what the DOE actually does, such as providing subsidies to the nuclear and coal industries and overseeing atomic weapons research and develop-ment.) “I stepped in it,” he told reporters immediately following the debate, and observers across the ideological landscape agreed.

But by morning, the Texas gover-nor was offering the same kind of excuse he must have used when he got Ds in school. There are just too many federal agencies, he explained to NBC’s Ann Curry, who might have retorted that there are only 15 Cabinet departments. What was revealed by Perry’s inability to regurgitate coherently his little blurt about eliminating whole departments of government — aside from proving one more time that he is unfit for campaign-ing and public office? Perhaps what it shows is how little he actu-ally thinks before delivering these canned rants. But of course the Texas gov-ernor isn’t alone in his ignorance — or his dissembling. Mitt Romney, whose sole memorable achievement as gov-ernor of Massachusetts was the passage of a health plan he now mostly disowns, said that what America needs is a “market-based” medical system, relying on “health savings accounts” to pay for care. We need that, he said, because as a nation we now spend 18 percent of gross domestic product annually on health care, while our competi-

tors spend 12 percent or less. Those figures are roughly correct — but to say that such comparisons prove the superior-ity of the market over the public sector is simply a lie. France, Germany, Switzerland, the United Kingdom, the Scandinavian coun-tries all use different mechanisms to achieve excellent results at rea-sonable cost, but none of them depend more on the private sector than the United States, and all rely on a combination of public financ-ing, strict regulation and univer-sal mandated coverage to achieve those goals. As Romney surely knows, because while he panders like all the other Republicans, he isn’t stupid. What is very stupid, as for-mer president Bill Clinton point-edly demonstrates in his new book, Back to Work: Why We Need Smart Government for a Strong Economy, is the constant, mind-less denigration of government indulged by the Republicans. The facts are simple enough even for the average tea party voter to understand: The coun-tries that tax more, spend more

and regulate more than the United States are mostly doing better than we are, whether measured by educational attainment, social and economic mobility, income equality, employment growth or infrastructure quality. They use market incentives and private sec-tor partnerships more intelligently than we do, too — because they know that a strong, competent government fosters enterprise without allowing corporate domi-nation. And despite their current crisis in the eurozone, they will emerge from the recession with those strengths intact. But then again, European conservative parties would never nominate the likes of Rick Perry, Herman Cain, Michele Bachmann or Ron Paul for public office at any level. No doubt they find the GOP debates bleakly amusing in these dark times. It’s the only attitude that makes watching toler-able.

Joe Conason is the editor in chief of NationalMemo.com.

Copyright 2001Creators.com.

Mindless — but always talking loud

Joe Conason

Nov. 21-27, 2011 15The Enterprise

Justice Oliver Wendell Holmes said that a good catch phrase could stop thinking for 50 years. One of the often-repeated catch phrases of our time — “It’s the economy, stupid!” — has already stopped thinking in some quarters for a couple of decades. There is no question that the state of the econ-omy can affect elections. But there is also no iron law that all elections will be decided by the state of the economy. President Franklin D. Roosevelt was re-elected for an unprecedented third term after two terms in which unem-ployment was in double digits for eight consecutive years. We may lament the number of people who are unemployed or who are on food stamps today. But those who give the Obama administration credit for coming to their rescue when they didn’t have a job are likely to greatly outnumber those who blame the administration for their not having

a job in the first place. An expansion of the welfare state in hard times seems to have been the secret of FDR’s great political success in the midst of economic disaster. An economic study published in a scholarly

journal in 2004 conclud-ed that the Roosevelt administration’s poli-cies prolonged the Great Depression by several years. But few people read economic studies. This economy has been sputtering

along through most of the Obama administration,

with the unemployment rate hov-ering around 9 percent. But none of that means that Barack Obama is going to lose the 2012 election. Even polls which show “any Republican” with more public sup-port than Obama does not mean that Obama will lose. The president is not going to run against “any Republican.” He is going to run against some specific Republican, and that Republican can expect to be

attacked, denounced and denigrat-ed for months on end before the November 2012 elections — not only by the Democrats, but also by the media that is heavily pro-Democrat. We have already seen how unsubstantiated allegations from women with questionable histo-ries have dropped Herman Cain from front runner to third place in just a couple of weeks. In short, it takes a candidate to beat a candidate, and everything depends on what kind of candidate that is. The smart money inside the Beltway says that the Republicans need to pick a moderate candidate who can appeal to independent voters, not just to the conserva-tive voters who turn out to vote in Republican primaries. Those who think this way say that you have to “reach out” to Hispanics, the elderly and other constituencies. What is remarkable is how seldom the smart money folks look at what has actually been happening in presidential elec-tions.

Ronald Reagan won two landslide elections when he ran as Ronald Reagan. Vice President George H.W. Bush then won when he ran as if he were another Ronald Reagan, with his famous statement, “Read my lips, no new taxes.” But after Bush 41 was elected and turned “kinder and gentler” — to everyone except the taxpayers — he lost to an unknown governor from a small state. Other Republican presi-dential candidates who went the “moderate” route — Bob Dole and John McCain — also came across as neither fish nor fowl, and also went down to defeat. Now the smart money inside the Beltway is saying that Mitt Romney, who is nothing if not versatile in his positions, is the Republicans’ best hope for replac-ing Obama. If conservative Republicans split their votes among a number of conservative candidates in the primaries, that can mean ending up with a presidential candidate in

the Bob Dole-John McCain mold — and risking a Bob Dole-John McCain result in the next elec-tion. The question now is whether the conservative Republican can-didates who have enjoyed their successive and short-lived boom-lets — Michele Bachmann, Rick Perry and Herman Cain — are prepared to stay in the primary race to the bitter end, or whether their conservative principles will move them to withdraw and throw their support to another conserva-tive candidate. There has probably never been a time in the history of this country when we more urgently needed to get a president out of the White House, before he ruined the country. But will the conserva-tive Republican candidates let that guide them?

Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305.

Copyright 2011Creators.com

Will the Republicans blow it?

Thomas Sowell

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The Enterprise - Utah's Business Journal, Nov. 21, 2011

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