Horizon, Host: Ted Simons

April 16, 2007


Host: Jose Cardenas

At the Capitol


  • Bob Grossfeld of The Media Guys and Barrett Marson, director of communications for the State House of Representatives, debate issues currently boiling at the Capitol.
Guests:
  • Barrett Marson - Director of Communications, State House of Representatives
  • Bob Grossfeld - Founder and president, The Media Guys
  • Mark Winkleman - Commissioner, Arizona State Land Department
Category: Legislature

View Transcript
Jose Cardenas:
Tonight on Horizon, we have our weekly "One on One" segment, focusing on issues that are boiling to the surface at the legislature; a conversation about land with the Arizona state land department commissioner, as a major piece of property goes up for auction tomorrow; and the woman who helped turn Target into the retail powerhouse it is today, trend spotter Robyn Waters, next on Horizon.

Announcer:
Horizon is made possible through contributions from the friends of eight, members of your Arizona PBS station. Thank you.

Jose Cardenas:
Good evening and thanks for joining us tonight on Horizon. I'm Jose Cardenas. It is the deadliest shooting on American soil. This morning, on the campus of Virginia Tech University, a man shot and killed 32 students before turning the gun on himself. There were two separate shootings -- one in a dormitory, where two people were killed, then in classrooms two hours later, where 30 people were killed. The gunman has not been identified. And we don't have a motive. Today's shootings surpass the two previous deadliest school shootings, one at the University of Texas in 1966 that left 13 dead, and the 1999 shootings at Columbine High School in Colorado, when 15 died. The campus massacre is focusing new attention tonight on security on the nation's college campuses. Arizona state university released this statement. "Our number one priority is the safety of our students. We address safety on our four campuses through a variety of means, including law enforcement, campus safety policies, physical security and safety measures and community interaction and education. ASU has contingency plans for emergencies, including disease outbreaks, natural disasters and violent crime."

Jose Cardenas:
Every Monday evening we feature two "politicos" going head to head on issues that affect Arizona. Tonight, Barrett Marson, Director of Communications, State House of Representatives, and Bob Grossfeld, founder and president of "The Media Guys" have a few words.

Barrett Marson:
You know, Bob, for a lot of years Arizona has been plagued by the problems of gangs and the crime they bring. The Arizona legislature stepping up this year to tackle that problem. House speaker Jim Weiers and Representative Russell Pearce have gotten together. We have this gang legislation that is being heard today and will be approved in the next couple of days that would increase the penalties for being a gang member, that would add more money for law enforcement, and there is a prevention aspect of this to get more minute to boys and girls clubs and allow groups to apply for money, part of the $6 million.

Bob Grossfeld:
This is what you're talking about. Show me in there.

Barrett Marson:
It's not in there.

Bob Grossfeld:
Oh.

Barrett Marson:
The companion bill from Chuck Gray.

Bob Grossfeld:
We're going to fix that one.

Barrett Marson:
Absolutely not that goes right before Senate bill 1344 goes right before the speaker's bill. And you will see…

Bob Grossfeld:
This is a total of 2.5 million. Of which half of it, actually 1.5, is just a pass-through to county prosecutors, right?

Barrett Marson:
But that is a big problem that we are solving here. Prosecuting the gang members, going after them, making sure that we increase the penalties. But if you are a gang member and the state can prove that you're a gang member, you will go to prison for extra time. And that is an important to get these gang members off the streets.

Bob Grossfeld:
That seems important to our side of the crime problem. But it doesn't seem too terribly important to their side. Like going to prison. Oh, cool. Then I can learn all kinds of new things. But it's doing nothing to prevent young people from moving up into the crime culture. And that's the problem. And doing one without the other is just showboating.

Barrett Marson:
No. And actually that is absolutely not true. That is why we have Senator Chuck Gray's bill, 1344, that allows groups like boys and girls clubs, juvenile corrections department to go after up to $6 million in grant money to use programs and get these kids -- make sure -- divert these kids from gangs, make sure they don't go there.

Bob Grossfeld:
And then what are we going to do when they're in prison? They're making license plates?

Barrett Marson:
Alt. Fuel license plates, I'm sure.

Bob Grossfeld:
This is insanity. In the meantime we have another bit of brilliance from your beloved legislature. The I.D. theft, which is driving everybody nuts. They're taking our social security numbers, our names, this, that and the other. And your guys came up with a brilliant idea. Let's take care of one county out of 15. But to redact all of this information that's in public records. But 14 counties, there's going to be a field day.

Barrett Marson:
First of all, that's not necessarily true. Anybody in those 14 counties can go to the county and ask for their information to be redacted. The biggest obstacle to doing that statewide are the counties themselves. They cannot pay for this. They came to the legislature and said, please do not put this on us.

Bob Grossfeld:
The legislature has the big checkbook. Doesn't it seem like that's an important thing for them to do?

Barrett Marson:
Maricopa County has offered to pay for it itself. That's why the legislation specifically says Maricopa County will go and do it.

Bob Grossfeld:
Don't you think your guys can like plug one of those loop holes they're always talking about and come up with enough money to go, here you go, Cochise. Here you go, Pinal. It makes sense. I assume they are going to fix this eventually.

Barrett Marson:
The counties will be doing it on a requested basis.

Barrett Marson:
[overlapping speakers]

Barrett Marson:
Going forward those will not be included.

Bob Grossfeld:
You know it's stupid, don't you?

Barrett Marson:
Absolutely not. Another issue I know is near and dear to your heart is illegal immigration. I know you don't have a problem so much calling them illegal aliens. Now that's one of your favorite phrases. But you'll see the house and senate move very quickly in the coming weeks on some of the current proposals. Just since we were here last week talking about this, you've seen tens of thousands of illegals crossing the two thousand mile long border and still nothing is being done at the federal level. Again, it's now time for the state to step in because the federal government hasn't done it.

Bob Grossfeld:
What are they going to do? Get buses and collect everybody up and shove them across the border?

Barrett Marson:
Well, no. But we will be using the National Guard in a more primary role. Remember, right now --

Bob Grossfeld:
As long as that prevents our national guard from having Bush ship them over to Iraq and getting their butts shot up, I may be with you on that one.

Barrett Marson:
You know, the problem is right now, the guard can see an illegal crossing, can wave an illegal but they cannot stop them. And that has to be rectified. The rules of engagement for our National Guard do need to be changed. The legislature will step in and provide money for the governor to do just that.

Bob Grossfeld:
And I hope that they've got some energy left. Here's one that drives me nuts. It's about photo radar. The story in the paper today about a group that wants to -- is working behind the scenes, you know one of those like we'll do it in committee where nobody sees it in the budget. And they want to like eliminate the truant effect of photo radar. Say what you want about it. At least taking a picture of your car and your license plate and your face and then they're sending you a ticket. What they want to do is really cool. It's eliminate all of that nonsense and just get the cash. And not tag the individual, not tag the driver, but just get the money. And those people should be stopped.

Barrett Marson:
We haven't seen that legislation yet at all. So that won't be done in any committee in the house so far. My final thought, however, is on healthcare group of Arizona. Healthcare group provides insurance to small businesses at a greatly-reduced rate. Now, the governor wants to expand healthcare group by limiting the so-called go bare period. Right now you months before you're eligible for the healthcare group. Businesses want to eliminate that so they can switch from their higher-cost insurance to the state insurance, which obviously is at a reduced premium because there is no profit motive. The problem is, Health care group is $8 million in the hole right now and they're asking for more money. It's a program that while worthy can't be expanded to include everybody in Arizona.

Jose Cardenas:
A major piece of land will be auctioned off tomorrow by the Arizona state land department. Joining me to talk about that and other issues that are preoccupying the department, the Commissioner Mark Winkleman. Commissioner Winkleman, we're going to show a picture in a second of a super blockade that goes up for sale tomorrow. Two prior attempts and you didn't get any interested bidders. What's going to be different tomorrow?

Mark Winkleman:
Third time is the charm, I hope. We have a group we've spent a lot of time working with that assured us they would show up tomorrow. This will be a landmark day for the land department. Assuming it goes through as we expect, the largest sale in the history of the land department. $150 million will go to benefit education in this state.

Jose Cardenas:
We want to show people where this is. So we should have a map coming up. But just describe the location for us.

Mark Winkleman:
Location is in the desert ridge, master plan community, a community we've been working on for about the last 20 years. This is one of the last, oh, 3, 4 large residential tracts that are still in that. By the end of this year, I expect that we'll probably have wrapped up selling these parcels in desert ridge and move on. But this one has a higher density than some of the others, and thus the higher price. It was appraised about a year ago when the market was very very strong at 150 million. And as you say, we had a couple of missteps last summer. The first auction no one showed up. That was in the midst of the turmoil of the real estate market. We rescheduled it for a couple of months later. Things had not sorted out at this point. And we were approached by a group that said, "We will come in and bid at this price." and I said, well, it's going to have to be the appraised value that we did last year. The highest price we've ever paid, a value that was determined at the height of the market. And they have stepped up and gave us every assurance that they're going to show up in our basement tomorrow with a big check. We hope, as always, that we have some others that show up and bid as well. But I don't know in this case that we will. Now, that being said, I'll be very, very pleased if we can sell this for $150 million.

Jose Cardenas :
But that expectation because that's the minimum bid?

Mark Winkleman:
That's the minimum bid.

Jose Cardenas:
What impact will this have on education funding?

Mark Winkleman:
That money goes to benefit education. As a matter of fact, all of off state trust land was set aside by the federal government to support 14 beneficiaries. But 96\% of it is education. So the money that we make tomorrow will, as the 150 million or whatever the price turns out to be is paid, that goes to the state treasurer, is put in a permanent fund, and the earnings off that will benefit education in perpetuity.

Jose Cardenas:
We have another major landmark transaction coming up next week. Pima and the 101 tell us about that.

Mark Winkleman:
Yeah. It will be a big week for us. Because hopefully tomorrow is the largest sale in our history. A week from tomorrow will hopefully be the largest lease in our history. And we tend to sell residential pieces; we tend to ground lease commercial pieces. And we have 125-acres in north Scottsdale. It's along the east side of the 101 it goes from Bell Road up to Pima. And it was appraised at $68.5 million. And we will sign a 99-year ground lease with the party that's the successful bidder. And again, all that money goes to education. As a matter of fact, in this case, the way the system works, ground rent is not deemed to be a permanent disposition. So it flows through to the beneficiaries more quickly than when property is sold for cash and you have to wait for it to start earning money.

Jose Cardenas:
And I understand that over time this has the potential of generating what, $800 million to $1 billion?

Mark Winkleman:
Yes. As a matter of fact, if there's no other bidding it will generate in fixed rent about 875 million over the 99-years. If there is bidding, which we have every reason to expect there will be, that will go up. And then additionally we participate in the gross revenue. So if it's a successful project, and this will be a business park probably along the lines of the Scottsdale air park and perimeter center, so it will be a high-end development. If it's successful we'll even share so we may break $1 billion over time. That would be the largest commercial lease in our history.

Jose Cardenas:
One of the questions that comes up, we see the benefits for education. But what about the impact on sprawl? These parcels are kind of far out.

Mark Winkleman:
Well, they seem maybe far out for you and I working downtown. But if you look at the development of the city of phoenix, these are frankly in-fill parcels. There is development on all sides. And that's one of the challenges we have. As a matter of fact, people oftentimes ask me, gee, mark, that's great you've sold this land. That's great that money goes to education. But aren't you just adding to the sprawl? The reality is, we sell parcels that aren't out on the outskirts. They're in-fill. And the problem is, although we've been wildly successful the last several years, we don't keep up with the market. And Phoenix and the entire state is growing very rapidly. And the people move here whether or not we're selling enough property for houses and shopping centers or not, and they go to the next available private land. And so that's why you've seen communities like anthem spring up out in the outskirts. Or all the activity in Casa Grande and Florence and Coolidge. It's not because that land was the next logical place to go, but oftentimes it's because we weren't able to keep up, sell our land, so they jump over us. So our inability to move property quickly enough actually adds to the sprawl of the valley.

Jose Cardenas:
Now, is this something that -- trust fund reform, rather, would remedy?

Mark Winkleman:
I hope so.

Jose Cardenas:
What's happening these days at the legislature?

Mark Winkleman:
Well, representative nelson has introduced a bill. It's been bantied about for the last several weeks. Trust land reform is a very complicated issue. As you know, there were two propositions on the ballot in November. Unfortunately, neither one of them passed. It got a lot of people interested. A lot of issues to solve. We have laws that were put in place when Arizona became a state almost 100 years ago that weren't designed to deal with the issues that come up now in one of the most rapidly urbanizing cities in the country. And we need help. So representative nelson has done a simpler version of what was on the ballot last November. We'll see whether it comes out and is passed. We certainly need reform. And I'm hopeful that we get started in this process.

Jose Cardenas:
Mr. Winkleman, we have about 40 seconds or so left. Open space. How do we ensure that these transactions that we're talking about will preserve that?

Mark Winkleman:
In these two, the large one that should set the record tomorrow, actually a park of about 55 acres will be auctioned with it. So in that particular area you'll have a nice city park. In general, that's a real problem for us. And that's part of this issue in trust land reform. Because we don't have a good mechanism to help communities buy open space. And there's a lot of interest out there. We recognize. That we could actually make a lot of money. We need some legislative and maybe constitutional help to set the stage for us to sell more open space. And I hope we get it.

Jose Cardenas:
Commissioner Winkleman, thanks for joining us. Good luck on your sale tomorrow.

Mark Winkleman:
Thank you very much.

Jose Cardenas:
Robyn Waters is a former vice-president of product development at the retail chain Target. She now has a consulting firm and is an author of such books as "The Hummer and The Mini" which spotlights her skill at spotting the next new thing.

Larry Lemmons:
I've heard that one of your favorite quotes is from Yogi Berra who said, "you can observe a lot just by watching." that's sort of what you do, isn't it?

Robyn Waters:
Very much. Trend is about observation. I like to say that trends are sign posts and indicators pointing to what's going on inside the hearts and minds of the customer. Most trend gurus or futurists look outside of the market place and try to determine what's going on out there in order to figure out what's going to happen next. I think it's a very simple observation. Then you have to think about it and reframe what's important.

Larry Lemmons:
Is that the quote on your Starbucks cup?

Robyn Waters:
Yeah. This is a quote I was invited to submit a quote for Starbucks. I was author's quote number 110 in their white cup series. "trends are sign posts pointing on to what's going on in the hearts and mind of consumers. These days if you want to figure out what's on trend you need to figure out what's important, not just what's next." in the era I grew up if you were a trend hunter you were always running around trying to find the next big thing. I started really observing. And I realized that you could often find something that was the next big thing at one end of the spectrum and the complete opposite could be just as valid.

Larry Lemmons:
Why the paradox?

Robyn Waters:
I've done a lot of research on that. And I found some interesting objects vagues from psychologists. They tell us at the heart of every person, you, me, every one of us, is a basic human paradox. That paradox is that we want to all fit in, belong to a group, a family, an organization. We want to be members together. But at the very same time, we have this inherent need to be an individual. I'm unique, I'm different from everybody else. So how is it that we can figure in and be like other people but yet retain our individuality? So that's what I find at the heart of paradox.

Larry Lemmons:
You said that it's not just looking for the next big thing but looking for what's important. Does that imply that social consciousness plays a role?

Robyn Waters:
Very much so. You know, in the old days marketers looked at numbers. The zip code, the age, the demographics, the income levels of people and they tried to put them into buckets. If you were trying to reach the middle income person, do this and make this kind of product. But today we live in such a contradictory world. I talk about the contradictory consumer. So who is that? Well, there's a woman that wears Prada shoes, drives a Mercedes and goes to Costco so buy her bulk paper goods. Or you have Joe six-pack who makes $50,000 a year doing construction. He buys whatever beer is on sale. He eats at McDonald three times a week. But he takes every Friday off, goes to a great golf club and golfs with Callaway clubs. That's what's important to him. It's into the about what the trend is, it's about your personal value and how you want to live your life. That's a very different kind of reframing. I call it trend from the inside out. It's about your values and what's important in here. Not just who is wearing. What like all the celebrity trends that are set out there.

Larry Lemmons:
Well, talk about your work with Target.

Robyn Waters:
I was at Target for 10 1/2 years. When I came to the company it was a $3 billion regional discounter, very moderate in terms of the assortment level. And K-mart and Wal-mart were much bigger. I took over the trend department. There were five people when I came into the company. Three years later as a director, and we now had eight people and we hired our first designer. And then seven years later, the company was $48 billion. So in that 10-year period it went from 3 billion to 48 billion. And target became tarjay as many customers call it. I talk about the formula that made target is so successful is no secret. The company was going to be trend right. So whatever the trends are, not trend forward but trend right. And then guest-focused. Target calls their shoppers or their customers guests in the Disney tradition. So the idea was to figure out what the trend was, know your customer and translate the trend effectively. And then the secret sauce was design. Use great design, you know, and put a lot of great design and quality into the product but still make it a great value. And so out of that formula came their expect more, pay less brand proposition. And boy, you know, who doesn't want more for less?

Larry Lemmons:
We were talking about it earlier. It just seems so obvious to offer well-designed clothes and in an affordable way. Why didn't someone think of it sooner?

Robyn Waters:
Yeah. For so many years design was exclusive. It was for the elite. And target, I think, was one of the leaders in the retail world. I put IKEA in the same place. Where it was great design at great value. Or what they call democratic design or some people call it cheap she can. And that's very --chic.

Larry Lemmons:
I understand you have a "three h " theory.

Robyn Waters:
In my book "The Trendmaster's Guide" I go through the alphabet. H is for 3 h design theory. It stands for the head, the handbag and the heart. And how that came about is, when I was creating the design department at target, nobody wanted to cut -- if you were a designer you didn't want to go to target. It was a discounter. You didn't want to go to the Midwest, left alone Minnesota which is where target was based. We had to attract young people in very different ways. And we had to hire very young people who were willing to come to the Midwest and work for a discounter to start their design careers. They come into this big organization full of grand ideas how to design. And this was my way of focusing them on what's important. And the three h's stand for. This if you're a target customer and going in to buy something, what's going to prompt you to buy? The head is about need. Oh, I'm out of toothpaste. Better run into target to buy some today. The handbag is about value. Oh, it's in the circular. Two for one. Better rush in today to save some money. But the heart, the third h is for heart. The heart is about, I don't necessarily need that but I love that. That I have to have it. And so people often say to me, you know, I go into target. I have three things on my list. Should only spend $10. How is it I come out with a big red cart and I spent $100? That's the heart. That's connecting to the customer for things that are important to them or things that are special and unique. It's like putting heart into your product that you can really differentiate yourself from all the competition out there.

Larry Lemmons:
How do you know when you've really got something? Is recognizing trends just an accident?

Robyn Waters:
There's a great quote by Joan Migrette who used to be the editor of the Harvard business reviews. View. She said "trends are things that make sense for a reason." she also wrote a book called "what management is." and it's a very simple translation of business terms into what things really mean. So trends do make sense for a reason if you know how to connect them to the customer. But I think sometimes you can look out there -- I could look at some of the fashion trends out there and go, oh, Id never wear. That but there's a reason why that might be trendy. So at the opposite end of the spectrum there's something I'm going to like a lot. And there's probably other people like me. And I think those individual stores or businesses that recognize both ends of the spectrum can do very well. Some will choose to just be exclusive in one. Chicos is a great example. The baby boomer, moderate customer. They have a very certain formula and they've done quite well. When they've tried to get a little tricky and reached other customers it may not work so well. So trends happen for a reason. You have to figure out why it's important to the customer. And then I think what's really important in my book "the trend master's guide" t is for translate. You can't just take the literal trend, bring it back, plop it on a shelf which is what so many retailers would do. They'd go to Europe, buy all this stuff, knock it off, put it on the shelf and people go "I don't get it." what target was so good at, we translated the trend. We took a color or detail and then translated it into something it. Might be a great polo shirt or a t-shirt. We wouldn't ever literally copy the design that we brought.

Larry Lemmons:
Thank you, Robyn Waters, for spending time with us today.

Robyn Waters:
Thank you very much.

Mary Jane Lucero:
We look at a revolutionary imaging technique that is helping diagnose, treat and manage cancer. The PET C.T. scan. Plus we talk about a new anti-gang bill state lawmakers are working on that would increase the sentence for criminals convicted of crimes that are gang-related. Tuesday at 7:00 on Horizon.

Jose Cardenas:
Wednesday we'll look at what the state is doing to improve air quality. Friday don't forget to join us for the journalist's roundtable. That's the Monday edition of horizon. I'm Jose Cardenas. Thanks for joining us.

Robyn Waters


  • A conversation with the author of The Hummer and the Mini, and one of the trend-spotting marketers who helped make retail chain Target into the competitive operation it is today.
Guests:
  • Barrett Marson - Director of Communications, State House of Representatives
  • Bob Grossfeld - Founder and president, The Media Guys
  • Mark Winkleman - Commissioner, Arizona State Land Department
Category: Business/Economy

View Transcript
Jose Cardenas:
Tonight on Horizon, we have our weekly "One on One" segment, focusing on issues that are boiling to the surface at the legislature; a conversation about land with the Arizona state land department commissioner, as a major piece of property goes up for auction tomorrow; and the woman who helped turn Target into the retail powerhouse it is today, trend spotter Robyn Waters, next on Horizon.

Announcer:
Horizon is made possible through contributions from the friends of eight, members of your Arizona PBS station. Thank you.

Jose Cardenas:
Good evening and thanks for joining us tonight on Horizon. I'm Jose Cardenas. It is the deadliest shooting on American soil. This morning, on the campus of Virginia Tech University, a man shot and killed 32 students before turning the gun on himself. There were two separate shootings -- one in a dormitory, where two people were killed, then in classrooms two hours later, where 30 people were killed. The gunman has not been identified. And we don't have a motive. Today's shootings surpass the two previous deadliest school shootings, one at the University of Texas in 1966 that left 13 dead, and the 1999 shootings at Columbine High School in Colorado, when 15 died. The campus massacre is focusing new attention tonight on security on the nation's college campuses. Arizona state university released this statement. "Our number one priority is the safety of our students. We address safety on our four campuses through a variety of means, including law enforcement, campus safety policies, physical security and safety measures and community interaction and education. ASU has contingency plans for emergencies, including disease outbreaks, natural disasters and violent crime."

Jose Cardenas:
Every Monday evening we feature two "politicos" going head to head on issues that affect Arizona. Tonight, Barrett Marson, Director of Communications, State House of Representatives, and Bob Grossfeld, founder and president of "The Media Guys" have a few words.

Barrett Marson:
You know, Bob, for a lot of years Arizona has been plagued by the problems of gangs and the crime they bring. The Arizona legislature stepping up this year to tackle that problem. House speaker Jim Weiers and Representative Russell Pearce have gotten together. We have this gang legislation that is being heard today and will be approved in the next couple of days that would increase the penalties for being a gang member, that would add more money for law enforcement, and there is a prevention aspect of this to get more minute to boys and girls clubs and allow groups to apply for money, part of the $6 million.

Bob Grossfeld:
This is what you're talking about. Show me in there.

Barrett Marson:
It's not in there.

Bob Grossfeld:
Oh.

Barrett Marson:
The companion bill from Chuck Gray.

Bob Grossfeld:
We're going to fix that one.

Barrett Marson:
Absolutely not that goes right before Senate bill 1344 goes right before the speaker's bill. And you will see…

Bob Grossfeld:
This is a total of 2.5 million. Of which half of it, actually 1.5, is just a pass-through to county prosecutors, right?

Barrett Marson:
But that is a big problem that we are solving here. Prosecuting the gang members, going after them, making sure that we increase the penalties. But if you are a gang member and the state can prove that you're a gang member, you will go to prison for extra time. And that is an important to get these gang members off the streets.

Bob Grossfeld:
That seems important to our side of the crime problem. But it doesn't seem too terribly important to their side. Like going to prison. Oh, cool. Then I can learn all kinds of new things. But it's doing nothing to prevent young people from moving up into the crime culture. And that's the problem. And doing one without the other is just showboating.

Barrett Marson:
No. And actually that is absolutely not true. That is why we have Senator Chuck Gray's bill, 1344, that allows groups like boys and girls clubs, juvenile corrections department to go after up to $6 million in grant money to use programs and get these kids -- make sure -- divert these kids from gangs, make sure they don't go there.

Bob Grossfeld:
And then what are we going to do when they're in prison? They're making license plates?

Barrett Marson:
Alt. Fuel license plates, I'm sure.

Bob Grossfeld:
This is insanity. In the meantime we have another bit of brilliance from your beloved legislature. The I.D. theft, which is driving everybody nuts. They're taking our social security numbers, our names, this, that and the other. And your guys came up with a brilliant idea. Let's take care of one county out of 15. But to redact all of this information that's in public records. But 14 counties, there's going to be a field day.

Barrett Marson:
First of all, that's not necessarily true. Anybody in those 14 counties can go to the county and ask for their information to be redacted. The biggest obstacle to doing that statewide are the counties themselves. They cannot pay for this. They came to the legislature and said, please do not put this on us.

Bob Grossfeld:
The legislature has the big checkbook. Doesn't it seem like that's an important thing for them to do?

Barrett Marson:
Maricopa County has offered to pay for it itself. That's why the legislation specifically says Maricopa County will go and do it.

Bob Grossfeld:
Don't you think your guys can like plug one of those loop holes they're always talking about and come up with enough money to go, here you go, Cochise. Here you go, Pinal. It makes sense. I assume they are going to fix this eventually.

Barrett Marson:
The counties will be doing it on a requested basis.

Barrett Marson:
[overlapping speakers]

Barrett Marson:
Going forward those will not be included.

Bob Grossfeld:
You know it's stupid, don't you?

Barrett Marson:
Absolutely not. Another issue I know is near and dear to your heart is illegal immigration. I know you don't have a problem so much calling them illegal aliens. Now that's one of your favorite phrases. But you'll see the house and senate move very quickly in the coming weeks on some of the current proposals. Just since we were here last week talking about this, you've seen tens of thousands of illegals crossing the two thousand mile long border and still nothing is being done at the federal level. Again, it's now time for the state to step in because the federal government hasn't done it.

Bob Grossfeld:
What are they going to do? Get buses and collect everybody up and shove them across the border?

Barrett Marson:
Well, no. But we will be using the National Guard in a more primary role. Remember, right now --

Bob Grossfeld:
As long as that prevents our national guard from having Bush ship them over to Iraq and getting their butts shot up, I may be with you on that one.

Barrett Marson:
You know, the problem is right now, the guard can see an illegal crossing, can wave an illegal but they cannot stop them. And that has to be rectified. The rules of engagement for our National Guard do need to be changed. The legislature will step in and provide money for the governor to do just that.

Bob Grossfeld:
And I hope that they've got some energy left. Here's one that drives me nuts. It's about photo radar. The story in the paper today about a group that wants to -- is working behind the scenes, you know one of those like we'll do it in committee where nobody sees it in the budget. And they want to like eliminate the truant effect of photo radar. Say what you want about it. At least taking a picture of your car and your license plate and your face and then they're sending you a ticket. What they want to do is really cool. It's eliminate all of that nonsense and just get the cash. And not tag the individual, not tag the driver, but just get the money. And those people should be stopped.

Barrett Marson:
We haven't seen that legislation yet at all. So that won't be done in any committee in the house so far. My final thought, however, is on healthcare group of Arizona. Healthcare group provides insurance to small businesses at a greatly-reduced rate. Now, the governor wants to expand healthcare group by limiting the so-called go bare period. Right now you months before you're eligible for the healthcare group. Businesses want to eliminate that so they can switch from their higher-cost insurance to the state insurance, which obviously is at a reduced premium because there is no profit motive. The problem is, Health care group is $8 million in the hole right now and they're asking for more money. It's a program that while worthy can't be expanded to include everybody in Arizona.

Jose Cardenas:
A major piece of land will be auctioned off tomorrow by the Arizona state land department. Joining me to talk about that and other issues that are preoccupying the department, the Commissioner Mark Winkleman. Commissioner Winkleman, we're going to show a picture in a second of a super blockade that goes up for sale tomorrow. Two prior attempts and you didn't get any interested bidders. What's going to be different tomorrow?

Mark Winkleman:
Third time is the charm, I hope. We have a group we've spent a lot of time working with that assured us they would show up tomorrow. This will be a landmark day for the land department. Assuming it goes through as we expect, the largest sale in the history of the land department. $150 million will go to benefit education in this state.

Jose Cardenas:
We want to show people where this is. So we should have a map coming up. But just describe the location for us.

Mark Winkleman:
Location is in the desert ridge, master plan community, a community we've been working on for about the last 20 years. This is one of the last, oh, 3, 4 large residential tracts that are still in that. By the end of this year, I expect that we'll probably have wrapped up selling these parcels in desert ridge and move on. But this one has a higher density than some of the others, and thus the higher price. It was appraised about a year ago when the market was very very strong at 150 million. And as you say, we had a couple of missteps last summer. The first auction no one showed up. That was in the midst of the turmoil of the real estate market. We rescheduled it for a couple of months later. Things had not sorted out at this point. And we were approached by a group that said, "We will come in and bid at this price." and I said, well, it's going to have to be the appraised value that we did last year. The highest price we've ever paid, a value that was determined at the height of the market. And they have stepped up and gave us every assurance that they're going to show up in our basement tomorrow with a big check. We hope, as always, that we have some others that show up and bid as well. But I don't know in this case that we will. Now, that being said, I'll be very, very pleased if we can sell this for $150 million.

Jose Cardenas :
But that expectation because that's the minimum bid?

Mark Winkleman:
That's the minimum bid.

Jose Cardenas:
What impact will this have on education funding?

Mark Winkleman:
That money goes to benefit education. As a matter of fact, all of off state trust land was set aside by the federal government to support 14 beneficiaries. But 96\% of it is education. So the money that we make tomorrow will, as the 150 million or whatever the price turns out to be is paid, that goes to the state treasurer, is put in a permanent fund, and the earnings off that will benefit education in perpetuity.

Jose Cardenas:
We have another major landmark transaction coming up next week. Pima and the 101 tell us about that.

Mark Winkleman:
Yeah. It will be a big week for us. Because hopefully tomorrow is the largest sale in our history. A week from tomorrow will hopefully be the largest lease in our history. And we tend to sell residential pieces; we tend to ground lease commercial pieces. And we have 125-acres in north Scottsdale. It's along the east side of the 101 it goes from Bell Road up to Pima. And it was appraised at $68.5 million. And we will sign a 99-year ground lease with the party that's the successful bidder. And again, all that money goes to education. As a matter of fact, in this case, the way the system works, ground rent is not deemed to be a permanent disposition. So it flows through to the beneficiaries more quickly than when property is sold for cash and you have to wait for it to start earning money.

Jose Cardenas:
And I understand that over time this has the potential of generating what, $800 million to $1 billion?

Mark Winkleman:
Yes. As a matter of fact, if there's no other bidding it will generate in fixed rent about 875 million over the 99-years. If there is bidding, which we have every reason to expect there will be, that will go up. And then additionally we participate in the gross revenue. So if it's a successful project, and this will be a business park probably along the lines of the Scottsdale air park and perimeter center, so it will be a high-end development. If it's successful we'll even share so we may break $1 billion over time. That would be the largest commercial lease in our history.

Jose Cardenas:
One of the questions that comes up, we see the benefits for education. But what about the impact on sprawl? These parcels are kind of far out.

Mark Winkleman:
Well, they seem maybe far out for you and I working downtown. But if you look at the development of the city of phoenix, these are frankly in-fill parcels. There is development on all sides. And that's one of the challenges we have. As a matter of fact, people oftentimes ask me, gee, mark, that's great you've sold this land. That's great that money goes to education. But aren't you just adding to the sprawl? The reality is, we sell parcels that aren't out on the outskirts. They're in-fill. And the problem is, although we've been wildly successful the last several years, we don't keep up with the market. And Phoenix and the entire state is growing very rapidly. And the people move here whether or not we're selling enough property for houses and shopping centers or not, and they go to the next available private land. And so that's why you've seen communities like anthem spring up out in the outskirts. Or all the activity in Casa Grande and Florence and Coolidge. It's not because that land was the next logical place to go, but oftentimes it's because we weren't able to keep up, sell our land, so they jump over us. So our inability to move property quickly enough actually adds to the sprawl of the valley.

Jose Cardenas:
Now, is this something that -- trust fund reform, rather, would remedy?

Mark Winkleman:
I hope so.

Jose Cardenas:
What's happening these days at the legislature?

Mark Winkleman:
Well, representative nelson has introduced a bill. It's been bantied about for the last several weeks. Trust land reform is a very complicated issue. As you know, there were two propositions on the ballot in November. Unfortunately, neither one of them passed. It got a lot of people interested. A lot of issues to solve. We have laws that were put in place when Arizona became a state almost 100 years ago that weren't designed to deal with the issues that come up now in one of the most rapidly urbanizing cities in the country. And we need help. So representative nelson has done a simpler version of what was on the ballot last November. We'll see whether it comes out and is passed. We certainly need reform. And I'm hopeful that we get started in this process.

Jose Cardenas:
Mr. Winkleman, we have about 40 seconds or so left. Open space. How do we ensure that these transactions that we're talking about will preserve that?

Mark Winkleman:
In these two, the large one that should set the record tomorrow, actually a park of about 55 acres will be auctioned with it. So in that particular area you'll have a nice city park. In general, that's a real problem for us. And that's part of this issue in trust land reform. Because we don't have a good mechanism to help communities buy open space. And there's a lot of interest out there. We recognize. That we could actually make a lot of money. We need some legislative and maybe constitutional help to set the stage for us to sell more open space. And I hope we get it.

Jose Cardenas:
Commissioner Winkleman, thanks for joining us. Good luck on your sale tomorrow.

Mark Winkleman:
Thank you very much.

Jose Cardenas:
Robyn Waters is a former vice-president of product development at the retail chain Target. She now has a consulting firm and is an author of such books as "The Hummer and The Mini" which spotlights her skill at spotting the next new thing.

Larry Lemmons:
I've heard that one of your favorite quotes is from Yogi Berra who said, "you can observe a lot just by watching." that's sort of what you do, isn't it?

Robyn Waters:
Very much. Trend is about observation. I like to say that trends are sign posts and indicators pointing to what's going on inside the hearts and minds of the customer. Most trend gurus or futurists look outside of the market place and try to determine what's going on out there in order to figure out what's going to happen next. I think it's a very simple observation. Then you have to think about it and reframe what's important.

Larry Lemmons:
Is that the quote on your Starbucks cup?

Robyn Waters:
Yeah. This is a quote I was invited to submit a quote for Starbucks. I was author's quote number 110 in their white cup series. "trends are sign posts pointing on to what's going on in the hearts and mind of consumers. These days if you want to figure out what's on trend you need to figure out what's important, not just what's next." in the era I grew up if you were a trend hunter you were always running around trying to find the next big thing. I started really observing. And I realized that you could often find something that was the next big thing at one end of the spectrum and the complete opposite could be just as valid.

Larry Lemmons:
Why the paradox?

Robyn Waters:
I've done a lot of research on that. And I found some interesting objects vagues from psychologists. They tell us at the heart of every person, you, me, every one of us, is a basic human paradox. That paradox is that we want to all fit in, belong to a group, a family, an organization. We want to be members together. But at the very same time, we have this inherent need to be an individual. I'm unique, I'm different from everybody else. So how is it that we can figure in and be like other people but yet retain our individuality? So that's what I find at the heart of paradox.

Larry Lemmons:
You said that it's not just looking for the next big thing but looking for what's important. Does that imply that social consciousness plays a role?

Robyn Waters:
Very much so. You know, in the old days marketers looked at numbers. The zip code, the age, the demographics, the income levels of people and they tried to put them into buckets. If you were trying to reach the middle income person, do this and make this kind of product. But today we live in such a contradictory world. I talk about the contradictory consumer. So who is that? Well, there's a woman that wears Prada shoes, drives a Mercedes and goes to Costco so buy her bulk paper goods. Or you have Joe six-pack who makes $50,000 a year doing construction. He buys whatever beer is on sale. He eats at McDonald three times a week. But he takes every Friday off, goes to a great golf club and golfs with Callaway clubs. That's what's important to him. It's into the about what the trend is, it's about your personal value and how you want to live your life. That's a very different kind of reframing. I call it trend from the inside out. It's about your values and what's important in here. Not just who is wearing. What like all the celebrity trends that are set out there.

Larry Lemmons:
Well, talk about your work with Target.

Robyn Waters:
I was at Target for 10 1/2 years. When I came to the company it was a $3 billion regional discounter, very moderate in terms of the assortment level. And K-mart and Wal-mart were much bigger. I took over the trend department. There were five people when I came into the company. Three years later as a director, and we now had eight people and we hired our first designer. And then seven years later, the company was $48 billion. So in that 10-year period it went from 3 billion to 48 billion. And target became tarjay as many customers call it. I talk about the formula that made target is so successful is no secret. The company was going to be trend right. So whatever the trends are, not trend forward but trend right. And then guest-focused. Target calls their shoppers or their customers guests in the Disney tradition. So the idea was to figure out what the trend was, know your customer and translate the trend effectively. And then the secret sauce was design. Use great design, you know, and put a lot of great design and quality into the product but still make it a great value. And so out of that formula came their expect more, pay less brand proposition. And boy, you know, who doesn't want more for less?

Larry Lemmons:
We were talking about it earlier. It just seems so obvious to offer well-designed clothes and in an affordable way. Why didn't someone think of it sooner?

Robyn Waters:
Yeah. For so many years design was exclusive. It was for the elite. And target, I think, was one of the leaders in the retail world. I put IKEA in the same place. Where it was great design at great value. Or what they call democratic design or some people call it cheap she can. And that's very --chic.

Larry Lemmons:
I understand you have a "three h " theory.

Robyn Waters:
In my book "The Trendmaster's Guide" I go through the alphabet. H is for 3 h design theory. It stands for the head, the handbag and the heart. And how that came about is, when I was creating the design department at target, nobody wanted to cut -- if you were a designer you didn't want to go to target. It was a discounter. You didn't want to go to the Midwest, left alone Minnesota which is where target was based. We had to attract young people in very different ways. And we had to hire very young people who were willing to come to the Midwest and work for a discounter to start their design careers. They come into this big organization full of grand ideas how to design. And this was my way of focusing them on what's important. And the three h's stand for. This if you're a target customer and going in to buy something, what's going to prompt you to buy? The head is about need. Oh, I'm out of toothpaste. Better run into target to buy some today. The handbag is about value. Oh, it's in the circular. Two for one. Better rush in today to save some money. But the heart, the third h is for heart. The heart is about, I don't necessarily need that but I love that. That I have to have it. And so people often say to me, you know, I go into target. I have three things on my list. Should only spend $10. How is it I come out with a big red cart and I spent $100? That's the heart. That's connecting to the customer for things that are important to them or things that are special and unique. It's like putting heart into your product that you can really differentiate yourself from all the competition out there.

Larry Lemmons:
How do you know when you've really got something? Is recognizing trends just an accident?

Robyn Waters:
There's a great quote by Joan Migrette who used to be the editor of the Harvard business reviews. View. She said "trends are things that make sense for a reason." she also wrote a book called "what management is." and it's a very simple translation of business terms into what things really mean. So trends do make sense for a reason if you know how to connect them to the customer. But I think sometimes you can look out there -- I could look at some of the fashion trends out there and go, oh, Id never wear. That but there's a reason why that might be trendy. So at the opposite end of the spectrum there's something I'm going to like a lot. And there's probably other people like me. And I think those individual stores or businesses that recognize both ends of the spectrum can do very well. Some will choose to just be exclusive in one. Chicos is a great example. The baby boomer, moderate customer. They have a very certain formula and they've done quite well. When they've tried to get a little tricky and reached other customers it may not work so well. So trends happen for a reason. You have to figure out why it's important to the customer. And then I think what's really important in my book "the trend master's guide" t is for translate. You can't just take the literal trend, bring it back, plop it on a shelf which is what so many retailers would do. They'd go to Europe, buy all this stuff, knock it off, put it on the shelf and people go "I don't get it." what target was so good at, we translated the trend. We took a color or detail and then translated it into something it. Might be a great polo shirt or a t-shirt. We wouldn't ever literally copy the design that we brought.

Larry Lemmons:
Thank you, Robyn Waters, for spending time with us today.

Robyn Waters:
Thank you very much.

Mary Jane Lucero:
We look at a revolutionary imaging technique that is helping diagnose, treat and manage cancer. The PET C.T. scan. Plus we talk about a new anti-gang bill state lawmakers are working on that would increase the sentence for criminals convicted of crimes that are gang-related. Tuesday at 7:00 on Horizon.

Jose Cardenas:
Wednesday we'll look at what the state is doing to improve air quality. Friday don't forget to join us for the journalist's roundtable. That's the Monday edition of horizon. I'm Jose Cardenas. Thanks for joining us.

state Land


  • A look into issues facing Arizona State Land Department Commissioner Mark Winkleman.
Guests:
  • Barrett Marson - Director of Communications, State House of Representatives
  • Bob Grossfeld - Founder and president, The Media Guys
  • Mark Winkleman - Commissioner, Arizona State Land Department
Category: Environment

View Transcript
Jose Cardenas:
Tonight on Horizon, we have our weekly "One on One" segment, focusing on issues that are boiling to the surface at the legislature; a conversation about land with the Arizona state land department commissioner, as a major piece of property goes up for auction tomorrow; and the woman who helped turn Target into the retail powerhouse it is today, trend spotter Robyn Waters, next on Horizon.

Announcer:
Horizon is made possible through contributions from the friends of eight, members of your Arizona PBS station. Thank you.

Jose Cardenas:
Good evening and thanks for joining us tonight on Horizon. I'm Jose Cardenas. It is the deadliest shooting on American soil. This morning, on the campus of Virginia Tech University, a man shot and killed 32 students before turning the gun on himself. There were two separate shootings -- one in a dormitory, where two people were killed, then in classrooms two hours later, where 30 people were killed. The gunman has not been identified. And we don't have a motive. Today's shootings surpass the two previous deadliest school shootings, one at the University of Texas in 1966 that left 13 dead, and the 1999 shootings at Columbine High School in Colorado, when 15 died. The campus massacre is focusing new attention tonight on security on the nation's college campuses. Arizona state university released this statement. "Our number one priority is the safety of our students. We address safety on our four campuses through a variety of means, including law enforcement, campus safety policies, physical security and safety measures and community interaction and education. ASU has contingency plans for emergencies, including disease outbreaks, natural disasters and violent crime."

Jose Cardenas:
Every Monday evening we feature two "politicos" going head to head on issues that affect Arizona. Tonight, Barrett Marson, Director of Communications, State House of Representatives, and Bob Grossfeld, founder and president of "The Media Guys" have a few words.

Barrett Marson:
You know, Bob, for a lot of years Arizona has been plagued by the problems of gangs and the crime they bring. The Arizona legislature stepping up this year to tackle that problem. House speaker Jim Weiers and Representative Russell Pearce have gotten together. We have this gang legislation that is being heard today and will be approved in the next couple of days that would increase the penalties for being a gang member, that would add more money for law enforcement, and there is a prevention aspect of this to get more minute to boys and girls clubs and allow groups to apply for money, part of the $6 million.

Bob Grossfeld:
This is what you're talking about. Show me in there.

Barrett Marson:
It's not in there.

Bob Grossfeld:
Oh.

Barrett Marson:
The companion bill from Chuck Gray.

Bob Grossfeld:
We're going to fix that one.

Barrett Marson:
Absolutely not that goes right before Senate bill 1344 goes right before the speaker's bill. And you will see…

Bob Grossfeld:
This is a total of 2.5 million. Of which half of it, actually 1.5, is just a pass-through to county prosecutors, right?

Barrett Marson:
But that is a big problem that we are solving here. Prosecuting the gang members, going after them, making sure that we increase the penalties. But if you are a gang member and the state can prove that you're a gang member, you will go to prison for extra time. And that is an important to get these gang members off the streets.

Bob Grossfeld:
That seems important to our side of the crime problem. But it doesn't seem too terribly important to their side. Like going to prison. Oh, cool. Then I can learn all kinds of new things. But it's doing nothing to prevent young people from moving up into the crime culture. And that's the problem. And doing one without the other is just showboating.

Barrett Marson:
No. And actually that is absolutely not true. That is why we have Senator Chuck Gray's bill, 1344, that allows groups like boys and girls clubs, juvenile corrections department to go after up to $6 million in grant money to use programs and get these kids -- make sure -- divert these kids from gangs, make sure they don't go there.

Bob Grossfeld:
And then what are we going to do when they're in prison? They're making license plates?

Barrett Marson:
Alt. Fuel license plates, I'm sure.

Bob Grossfeld:
This is insanity. In the meantime we have another bit of brilliance from your beloved legislature. The I.D. theft, which is driving everybody nuts. They're taking our social security numbers, our names, this, that and the other. And your guys came up with a brilliant idea. Let's take care of one county out of 15. But to redact all of this information that's in public records. But 14 counties, there's going to be a field day.

Barrett Marson:
First of all, that's not necessarily true. Anybody in those 14 counties can go to the county and ask for their information to be redacted. The biggest obstacle to doing that statewide are the counties themselves. They cannot pay for this. They came to the legislature and said, please do not put this on us.

Bob Grossfeld:
The legislature has the big checkbook. Doesn't it seem like that's an important thing for them to do?

Barrett Marson:
Maricopa County has offered to pay for it itself. That's why the legislation specifically says Maricopa County will go and do it.

Bob Grossfeld:
Don't you think your guys can like plug one of those loop holes they're always talking about and come up with enough money to go, here you go, Cochise. Here you go, Pinal. It makes sense. I assume they are going to fix this eventually.

Barrett Marson:
The counties will be doing it on a requested basis.

Barrett Marson:
[overlapping speakers]

Barrett Marson:
Going forward those will not be included.

Bob Grossfeld:
You know it's stupid, don't you?

Barrett Marson:
Absolutely not. Another issue I know is near and dear to your heart is illegal immigration. I know you don't have a problem so much calling them illegal aliens. Now that's one of your favorite phrases. But you'll see the house and senate move very quickly in the coming weeks on some of the current proposals. Just since we were here last week talking about this, you've seen tens of thousands of illegals crossing the two thousand mile long border and still nothing is being done at the federal level. Again, it's now time for the state to step in because the federal government hasn't done it.

Bob Grossfeld:
What are they going to do? Get buses and collect everybody up and shove them across the border?

Barrett Marson:
Well, no. But we will be using the National Guard in a more primary role. Remember, right now --

Bob Grossfeld:
As long as that prevents our national guard from having Bush ship them over to Iraq and getting their butts shot up, I may be with you on that one.

Barrett Marson:
You know, the problem is right now, the guard can see an illegal crossing, can wave an illegal but they cannot stop them. And that has to be rectified. The rules of engagement for our National Guard do need to be changed. The legislature will step in and provide money for the governor to do just that.

Bob Grossfeld:
And I hope that they've got some energy left. Here's one that drives me nuts. It's about photo radar. The story in the paper today about a group that wants to -- is working behind the scenes, you know one of those like we'll do it in committee where nobody sees it in the budget. And they want to like eliminate the truant effect of photo radar. Say what you want about it. At least taking a picture of your car and your license plate and your face and then they're sending you a ticket. What they want to do is really cool. It's eliminate all of that nonsense and just get the cash. And not tag the individual, not tag the driver, but just get the money. And those people should be stopped.

Barrett Marson:
We haven't seen that legislation yet at all. So that won't be done in any committee in the house so far. My final thought, however, is on healthcare group of Arizona. Healthcare group provides insurance to small businesses at a greatly-reduced rate. Now, the governor wants to expand healthcare group by limiting the so-called go bare period. Right now you months before you're eligible for the healthcare group. Businesses want to eliminate that so they can switch from their higher-cost insurance to the state insurance, which obviously is at a reduced premium because there is no profit motive. The problem is, Health care group is $8 million in the hole right now and they're asking for more money. It's a program that while worthy can't be expanded to include everybody in Arizona.

Jose Cardenas:
A major piece of land will be auctioned off tomorrow by the Arizona state land department. Joining me to talk about that and other issues that are preoccupying the department, the Commissioner Mark Winkleman. Commissioner Winkleman, we're going to show a picture in a second of a super blockade that goes up for sale tomorrow. Two prior attempts and you didn't get any interested bidders. What's going to be different tomorrow?

Mark Winkleman:
Third time is the charm, I hope. We have a group we've spent a lot of time working with that assured us they would show up tomorrow. This will be a landmark day for the land department. Assuming it goes through as we expect, the largest sale in the history of the land department. $150 million will go to benefit education in this state.

Jose Cardenas:
We want to show people where this is. So we should have a map coming up. But just describe the location for us.

Mark Winkleman:
Location is in the desert ridge, master plan community, a community we've been working on for about the last 20 years. This is one of the last, oh, 3, 4 large residential tracts that are still in that. By the end of this year, I expect that we'll probably have wrapped up selling these parcels in desert ridge and move on. But this one has a higher density than some of the others, and thus the higher price. It was appraised about a year ago when the market was very very strong at 150 million. And as you say, we had a couple of missteps last summer. The first auction no one showed up. That was in the midst of the turmoil of the real estate market. We rescheduled it for a couple of months later. Things had not sorted out at this point. And we were approached by a group that said, "We will come in and bid at this price." and I said, well, it's going to have to be the appraised value that we did last year. The highest price we've ever paid, a value that was determined at the height of the market. And they have stepped up and gave us every assurance that they're going to show up in our basement tomorrow with a big check. We hope, as always, that we have some others that show up and bid as well. But I don't know in this case that we will. Now, that being said, I'll be very, very pleased if we can sell this for $150 million.

Jose Cardenas :
But that expectation because that's the minimum bid?

Mark Winkleman:
That's the minimum bid.

Jose Cardenas:
What impact will this have on education funding?

Mark Winkleman:
That money goes to benefit education. As a matter of fact, all of off state trust land was set aside by the federal government to support 14 beneficiaries. But 96\% of it is education. So the money that we make tomorrow will, as the 150 million or whatever the price turns out to be is paid, that goes to the state treasurer, is put in a permanent fund, and the earnings off that will benefit education in perpetuity.

Jose Cardenas:
We have another major landmark transaction coming up next week. Pima and the 101 tell us about that.

Mark Winkleman:
Yeah. It will be a big week for us. Because hopefully tomorrow is the largest sale in our history. A week from tomorrow will hopefully be the largest lease in our history. And we tend to sell residential pieces; we tend to ground lease commercial pieces. And we have 125-acres in north Scottsdale. It's along the east side of the 101 it goes from Bell Road up to Pima. And it was appraised at $68.5 million. And we will sign a 99-year ground lease with the party that's the successful bidder. And again, all that money goes to education. As a matter of fact, in this case, the way the system works, ground rent is not deemed to be a permanent disposition. So it flows through to the beneficiaries more quickly than when property is sold for cash and you have to wait for it to start earning money.

Jose Cardenas:
And I understand that over time this has the potential of generating what, $800 million to $1 billion?

Mark Winkleman:
Yes. As a matter of fact, if there's no other bidding it will generate in fixed rent about 875 million over the 99-years. If there is bidding, which we have every reason to expect there will be, that will go up. And then additionally we participate in the gross revenue. So if it's a successful project, and this will be a business park probably along the lines of the Scottsdale air park and perimeter center, so it will be a high-end development. If it's successful we'll even share so we may break $1 billion over time. That would be the largest commercial lease in our history.

Jose Cardenas:
One of the questions that comes up, we see the benefits for education. But what about the impact on sprawl? These parcels are kind of far out.

Mark Winkleman:
Well, they seem maybe far out for you and I working downtown. But if you look at the development of the city of phoenix, these are frankly in-fill parcels. There is development on all sides. And that's one of the challenges we have. As a matter of fact, people oftentimes ask me, gee, mark, that's great you've sold this land. That's great that money goes to education. But aren't you just adding to the sprawl? The reality is, we sell parcels that aren't out on the outskirts. They're in-fill. And the problem is, although we've been wildly successful the last several years, we don't keep up with the market. And Phoenix and the entire state is growing very rapidly. And the people move here whether or not we're selling enough property for houses and shopping centers or not, and they go to the next available private land. And so that's why you've seen communities like anthem spring up out in the outskirts. Or all the activity in Casa Grande and Florence and Coolidge. It's not because that land was the next logical place to go, but oftentimes it's because we weren't able to keep up, sell our land, so they jump over us. So our inability to move property quickly enough actually adds to the sprawl of the valley.

Jose Cardenas:
Now, is this something that -- trust fund reform, rather, would remedy?

Mark Winkleman:
I hope so.

Jose Cardenas:
What's happening these days at the legislature?

Mark Winkleman:
Well, representative nelson has introduced a bill. It's been bantied about for the last several weeks. Trust land reform is a very complicated issue. As you know, there were two propositions on the ballot in November. Unfortunately, neither one of them passed. It got a lot of people interested. A lot of issues to solve. We have laws that were put in place when Arizona became a state almost 100 years ago that weren't designed to deal with the issues that come up now in one of the most rapidly urbanizing cities in the country. And we need help. So representative nelson has done a simpler version of what was on the ballot last November. We'll see whether it comes out and is passed. We certainly need reform. And I'm hopeful that we get started in this process.

Jose Cardenas:
Mr. Winkleman, we have about 40 seconds or so left. Open space. How do we ensure that these transactions that we're talking about will preserve that?

Mark Winkleman:
In these two, the large one that should set the record tomorrow, actually a park of about 55 acres will be auctioned with it. So in that particular area you'll have a nice city park. In general, that's a real problem for us. And that's part of this issue in trust land reform. Because we don't have a good mechanism to help communities buy open space. And there's a lot of interest out there. We recognize. That we could actually make a lot of money. We need some legislative and maybe constitutional help to set the stage for us to sell more open space. And I hope we get it.

Jose Cardenas:
Commissioner Winkleman, thanks for joining us. Good luck on your sale tomorrow.

Mark Winkleman:
Thank you very much.

Jose Cardenas:
Robyn Waters is a former vice-president of product development at the retail chain Target. She now has a consulting firm and is an author of such books as "The Hummer and The Mini" which spotlights her skill at spotting the next new thing.

Larry Lemmons:
I've heard that one of your favorite quotes is from Yogi Berra who said, "you can observe a lot just by watching." that's sort of what you do, isn't it?

Robyn Waters:
Very much. Trend is about observation. I like to say that trends are sign posts and indicators pointing to what's going on inside the hearts and minds of the customer. Most trend gurus or futurists look outside of the market place and try to determine what's going on out there in order to figure out what's going to happen next. I think it's a very simple observation. Then you have to think about it and reframe what's important.

Larry Lemmons:
Is that the quote on your Starbucks cup?

Robyn Waters:
Yeah. This is a quote I was invited to submit a quote for Starbucks. I was author's quote number 110 in their white cup series. "trends are sign posts pointing on to what's going on in the hearts and mind of consumers. These days if you want to figure out what's on trend you need to figure out what's important, not just what's next." in the era I grew up if you were a trend hunter you were always running around trying to find the next big thing. I started really observing. And I realized that you could often find something that was the next big thing at one end of the spectrum and the complete opposite could be just as valid.

Larry Lemmons:
Why the paradox?

Robyn Waters:
I've done a lot of research on that. And I found some interesting objects vagues from psychologists. They tell us at the heart of every person, you, me, every one of us, is a basic human paradox. That paradox is that we want to all fit in, belong to a group, a family, an organization. We want to be members together. But at the very same time, we have this inherent need to be an individual. I'm unique, I'm different from everybody else. So how is it that we can figure in and be like other people but yet retain our individuality? So that's what I find at the heart of paradox.

Larry Lemmons:
You said that it's not just looking for the next big thing but looking for what's important. Does that imply that social consciousness plays a role?

Robyn Waters:
Very much so. You know, in the old days marketers looked at numbers. The zip code, the age, the demographics, the income levels of people and they tried to put them into buckets. If you were trying to reach the middle income person, do this and make this kind of product. But today we live in such a contradictory world. I talk about the contradictory consumer. So who is that? Well, there's a woman that wears Prada shoes, drives a Mercedes and goes to Costco so buy her bulk paper goods. Or you have Joe six-pack who makes $50,000 a year doing construction. He buys whatever beer is on sale. He eats at McDonald three times a week. But he takes every Friday off, goes to a great golf club and golfs with Callaway clubs. That's what's important to him. It's into the about what the trend is, it's about your personal value and how you want to live your life. That's a very different kind of reframing. I call it trend from the inside out. It's about your values and what's important in here. Not just who is wearing. What like all the celebrity trends that are set out there.

Larry Lemmons:
Well, talk about your work with Target.

Robyn Waters:
I was at Target for 10 1/2 years. When I came to the company it was a $3 billion regional discounter, very moderate in terms of the assortment level. And K-mart and Wal-mart were much bigger. I took over the trend department. There were five people when I came into the company. Three years later as a director, and we now had eight people and we hired our first designer. And then seven years later, the company was $48 billion. So in that 10-year period it went from 3 billion to 48 billion. And target became tarjay as many customers call it. I talk about the formula that made target is so successful is no secret. The company was going to be trend right. So whatever the trends are, not trend forward but trend right. And then guest-focused. Target calls their shoppers or their customers guests in the Disney tradition. So the idea was to figure out what the trend was, know your customer and translate the trend effectively. And then the secret sauce was design. Use great design, you know, and put a lot of great design and quality into the product but still make it a great value. And so out of that formula came their expect more, pay less brand proposition. And boy, you know, who doesn't want more for less?

Larry Lemmons:
We were talking about it earlier. It just seems so obvious to offer well-designed clothes and in an affordable way. Why didn't someone think of it sooner?

Robyn Waters:
Yeah. For so many years design was exclusive. It was for the elite. And target, I think, was one of the leaders in the retail world. I put IKEA in the same place. Where it was great design at great value. Or what they call democratic design or some people call it cheap she can. And that's very --chic.

Larry Lemmons:
I understand you have a "three h " theory.

Robyn Waters:
In my book "The Trendmaster's Guide" I go through the alphabet. H is for 3 h design theory. It stands for the head, the handbag and the heart. And how that came about is, when I was creating the design department at target, nobody wanted to cut -- if you were a designer you didn't want to go to target. It was a discounter. You didn't want to go to the Midwest, left alone Minnesota which is where target was based. We had to attract young people in very different ways. And we had to hire very young people who were willing to come to the Midwest and work for a discounter to start their design careers. They come into this big organization full of grand ideas how to design. And this was my way of focusing them on what's important. And the three h's stand for. This if you're a target customer and going in to buy something, what's going to prompt you to buy? The head is about need. Oh, I'm out of toothpaste. Better run into target to buy some today. The handbag is about value. Oh, it's in the circular. Two for one. Better rush in today to save some money. But the heart, the third h is for heart. The heart is about, I don't necessarily need that but I love that. That I have to have it. And so people often say to me, you know, I go into target. I have three things on my list. Should only spend $10. How is it I come out with a big red cart and I spent $100? That's the heart. That's connecting to the customer for things that are important to them or things that are special and unique. It's like putting heart into your product that you can really differentiate yourself from all the competition out there.

Larry Lemmons:
How do you know when you've really got something? Is recognizing trends just an accident?

Robyn Waters:
There's a great quote by Joan Migrette who used to be the editor of the Harvard business reviews. View. She said "trends are things that make sense for a reason." she also wrote a book called "what management is." and it's a very simple translation of business terms into what things really mean. So trends do make sense for a reason if you know how to connect them to the customer. But I think sometimes you can look out there -- I could look at some of the fashion trends out there and go, oh, Id never wear. That but there's a reason why that might be trendy. So at the opposite end of the spectrum there's something I'm going to like a lot. And there's probably other people like me. And I think those individual stores or businesses that recognize both ends of the spectrum can do very well. Some will choose to just be exclusive in one. Chicos is a great example. The baby boomer, moderate customer. They have a very certain formula and they've done quite well. When they've tried to get a little tricky and reached other customers it may not work so well. So trends happen for a reason. You have to figure out why it's important to the customer. And then I think what's really important in my book "the trend master's guide" t is for translate. You can't just take the literal trend, bring it back, plop it on a shelf which is what so many retailers would do. They'd go to Europe, buy all this stuff, knock it off, put it on the shelf and people go "I don't get it." what target was so good at, we translated the trend. We took a color or detail and then translated it into something it. Might be a great polo shirt or a t-shirt. We wouldn't ever literally copy the design that we brought.

Larry Lemmons:
Thank you, Robyn Waters, for spending time with us today.

Robyn Waters:
Thank you very much.

Mary Jane Lucero:
We look at a revolutionary imaging technique that is helping diagnose, treat and manage cancer. The PET C.T. scan. Plus we talk about a new anti-gang bill state lawmakers are working on that would increase the sentence for criminals convicted of crimes that are gang-related. Tuesday at 7:00 on Horizon.

Jose Cardenas:
Wednesday we'll look at what the state is doing to improve air quality. Friday don't forget to join us for the journalist's roundtable. That's the Monday edition of horizon. I'm Jose Cardenas. Thanks for joining us.

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