Southern Oregon Business Conference 2014: Gross, unadulterated enthusiasm

Thursday's Southern Oregon Business Conference at the Inn at The Commons in Medford

Adam Cuppy, chief operating officer at Coding Zeal in downtown Medford,  is both an evangelist for Southern Oregon and passionate pursuer of solving problems for clients. Coding Zeal is a web and mobile applications agency.

Gross, unadulterated enthusiasm is Cuppy’s catch phrase.

Why set up shop in the Rogue Valley?

“It  wasn’t a question of ‘let me evaluate the validity of moving here, Bend or somewhere else,’ ” Cuppy said. “That stuff, of course comes to mind. It all has to do with accessibility. If I want to be in San Francisco, the people I want to work with are more accessible, Portland more accessible. But my values are not to making money, it’s living the life I want to live. I’m more driven to wanting to live here. So then it’s ‘Can you make it work here? Well, Why not? There are 200,000 people living here, I only need that big (holding fingers slightly apart) of a percentage of it.

“We deal in fewer transactions with super-huge numbers. There are benefits to that and also a lot of pros and cons. A brick –and-mortar store where the average sized transaction is $20, that 200,000 becomes really important.  For us, we deal in less than 20 money transactions a month, but that total is very high.

“We didn’t do a very good job initially, and asked is this right place. But I don’t think that was the issue. If you are focusing on the logistics right out of the gate you’re going to miss the most important part of starting a business. You are trying to solve a problem. If you focus on the why, you are going be passionate and you are going to drive something forward. Passionate people begat energy and passionate people will drive more passionate people and people seeing that passion will reward you with more money.”

We have a deep interest in how the Internet of things will change.

“Curiosity may have killed the cat, but it also changed the world,” Cuppy said.

The tipping point for great innovation and entrepreneurs emerge when opportunity matched with economic viability, attractiveness, growth capacity are  coupled with regional development, location and recreation, and education.


Copier paper, film and then medical diagnostic images have all been part of Carestream’s existence in White City.

In 1964 it began as 3M, now in under its Onyx ownership, the plant is part of technology involving flexible screens.

“Quantum dots is the next wave of technology if you’re into high-definition TV,” said Mike Tylutki Carestream’s White City site manager.

Recruiting difficult is here, but expanding local technology base will help.


Linx Technologies owns the only elevator in Merlin.

The Internet of Things is Latif’s subject. Companies use Linx’ technology in developing their technology.

Linx makes three products in faub’s used for bank entry systems and the inward workings for boat trolling motors.

The defnition: Sensors, actuators, data communications and intelligence that go into products from the Internet.

“My wife says the thermostat acts like it has a mind of its own, I tell her that’s the point,” Latif said.

The connections are so cheap that you can connect any device for free, through your home Internet. Your TV, your refrigerator, your washing machine. Samsung says 100 percent of products will have Internet connections in five years.


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Radio Shack mall leases could be in demand

Radio Shack may be crumbling financially, but its shopping mall storefront leases have value.

Instead of shedding tears over the potential demise of another legacy retailer, upstarts and growth companies queuing up to snap potential leases, reports the Philadelphia Inquirer.


Consumer confidence is at its highest level since August 2007, according to the Conference Board Consumer Confidence Index, which jumped sharply in January following an upward swing in December.
The monthly survey, based on a probability-design random sample reflects what consumers buy and watch.
The Index base-lined at 100 in 1985 now stands at 102.9, up from 93.1 in December.
” A more positive assessment of current business and labor market conditions contributed to the improvement in consumers’ view of the present situation,” said Lynn Franco, economic indicators director at the Conference Board. “Consumers also expressed a considerably higher degree of optimism regarding the short-term outlook for the economy and labor market, as well as their earnings.”

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Mobile ordering may become norm at Starbucks

Starbucks mobile ordering headed this way later this year.

If you aren’t already one of Starbuck’s mobile app customers, chances are you will be some time later this year.

After a test run in Portland, the Seattle-based global coffee company with multiple locations in the Rogue Valley, is planning to extend the service to 600 West Coast locations.

What’s more, reports Fast Company 16 percent of Starbucks sales are now done using mobile payment apps.

It’s unclear if this will set off an industry-wide standard

“This is actually something that we are always looking into,” Dutch Bros. spokesperson Jennifer Wheatley said. “At this point we do not have a plan to move forward.”


SeaTac Airport is 55 times larger in terms of passenger count than the Medford airport and the trend lines point to the Northwest’s largest hub to get even busier with more international departures.
Crosscut examines how the competition between Delta Alaska is pushing the record-breaking numbers.


Erickson Inc. shares have fallen on hard times, tumbling as low as $6.28 in recent days.

But the Portland-based aviation firm, with heavy-lift helicopter manufacturing, maintenance and research facilities outside Central Point and the Medford airport, has apparently staunched the bleeding. Shares traded above $20 in early 2014, but slipped below $10 in November.

Earlier this month, the company announced a new ferrying contract with a Brazilian firm doing offshore oil exploration. After spending last week below $7, Erickson picked up steam and were trading for $7.27 at 10:30 a.m. (PST)


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Alaska Air Group earnings soared in 2014

Alaska and Horizon passengers contributed to a record year the Medford airport.

Alaska Air Group, whose Horizon Air unit handles more than half of the passenger activity at the Medford airport, said it made $148 million, or $1.11 per share, in 2014. That’s nearly a 90 percent jump over 2013′s net income of $78 million, or 56 cents per share.

The Seattle-based company announced a 20-cent per share dividend for the fourth quarter, up 60 percent from its third-quarter dividend, to shareholders of record on Feb. 24.

Alaska Air Group said during 2014 it awarded a record $116 million in incentive pay to employees, or more than one month’s pay for most employees. Over the past five years, employees have earned more than $473 million in incentive pay, averaging 8.7 percent of annual pay.
In addition to signing a five-year agreement with Alaska Airline’s flight attendants in December, the company inked a six-year contract with Horizon’s aircraft technicians and fleet service agents in June and a four-year deal with Horizon’s dispatchers last April 2014.


Staying on the subject of airlines, United Airlines today reported a $1.97 billion profit in 2014, an increase of 89 percent year-over-year, or $5.06 per share.
That excludes an $834 million special item, knocking down net income to $1.13 billion, or $2.93 per diluted share
During the fourth quarter, UAL reported bottom-line earnings of $28 million or $0.07 per diluted share.


Sportsman’s Warehouse said it will open its seventh Oregon store in Albany later this year, and ninth new store overall in 2015. This store will be located in the Albany Plaza Shopping Center.


Walla Walla, Wash.-based Banner Corp., parent company of Banner Bank and recent purchaser of AmericanWest Bank, said its net income in the fourth quarter of 2014 was $12.2 million, or 63 cents per share, compared to $11.6 million, or 60 cents per share, for the fourth quarter a year ago.
For all of 2014, Banner Corp.’s net income increased 17 percent to $54.6 million, or $2.82 per share, compared to $46.6 million, or $2.40 per share, in 2013.
The acquisition of American West Bank and six branches of Siuslaw Bank were major events in 2014 for the bank, CEO Mark Grescovich said.
“We believe these achievements, taken together, will result in a transformational year for Banner in 2015,” he said in a statement this week.said “We will have the opportunity to deploy our super community bank model throughout a strengthened presence in Washington, Oregon and Idaho, and enter into attractive growth markets in California and Utah.”

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1-800 Flowers on New York’s Best Companies to Work for list; Harry & David you’re on the clock

On Tuesday, The Ohio State University’s banner waived over Harry & David’s headquarters along Hwy. 99, following the Buckeyes’ 42-20 victory in the national football championship game.

Employees at the company’s Hopewell Campus in Hebron, Ohio, whose team made good on their wagered honor, get to gloat for an entire week before the flag is lowered and life moves on beneath a regular old State of Oregon.

Now there is pressure of another kind, this time from the parent company, The Long Island-based firm, which acquired Harry & David last year, was named one of 65 employers to make the New York State Society for Human Resource Management’s “Best Companies to Work for in New York State.” 

The annual “Best Companies to Work for in New York State” award is based on ways a company benefits the state’s businesses, economy and workforce. The HR managers consider company policies, practices and demographics. In addition, employees fill out an engagement and satisfaction survey focusing on corporate leadership and planning, corporate culture and communications, work environment, training and development, and pay and benefits.

Of course, Harry & David has won lots of awards over the years, but hasn’t been on Oregon Business Magazine’s “Best Companies to Work for” list. The gauntlet has once more been laid down.


Lithia Motors scored big in the Automotive News/PricerwaterhouseCoopers 2014 Global Automotive Shareholder Value Awards.

Awards are bestowed based on the highest shareholder returns for one-year and three-year periods among global vehicle manufacturers, global automotive suppliers and U.S. automotive retailers.

Lithia Motors scored big in the three-year category based on the value of a $100 investment. The metric compares relative returns generated by different companies, taking into account changes in share prices, dividends and other distributions as well as stock buybacks or splits.

The Medford-based auto retailer posted a 309 percent return over three years, while earning a PricerwaterhouseCoopers Value Index rating of 116 percent, the highest of any winner.

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Oregon in step with national foreclosure data

Oregon is right in line with the national 0.8 percent year-over-year decline in foreclosure inventory, according to the latest  findings by real estate data provider CoreLogic.
Overall, Oregon’s foreclosure inventory is 1.7 percent, a little above the national 1.5 percent figure. However, the state’s 3.7 percent serious delinquency rate is lower than the national average of 4 percent.
CoreLogic reported more than 41,000 completed foreclosures nationally in November, down from 46,000 in November 2013, a year-over-year decline of 9.6 percent and off 64 percent from the peak of completed foreclosures in September 2010. The Irvine, Calif., company noted that on a month-over-month basis, completed foreclosures were down 12.6 percent from the 47,000 reported in October.
Completed foreclosures are an indication of the total number of homes actually lost to foreclosure.


U.S. import prices fell 2.5 percent in December, the largest one-month decline since a 4.6-percent drop in December 2008, the Bureau of Labor Statistics reported.
Import prices have not risen any month since an 0.3 percent bump in June and fell 7.3 percent during the second half of 2014. The price index for imports decreased 5.5 percent overall in 2014, the biggest calendar-year drop since falling 10.1 percent in 2008.


The U.S. Agriculture Department is expanding its Noninsured Crop Disaster Assistance Program for crops that historically have been ineligible for federal crop insurance.
Part of the 2014 Farm Bill, there are new coverage options when natural disasters affect specialty crops such as vegetables, fruits, mushrooms, floriculture, ornamental nursery, aquaculture, ginseng, honey, syrup, and energy crops.
Previously, the program offered coverage at 55 percent of the average market price for crop losses that exceed 50 percent of expected production. Producers can now choose higher levels of coverage, up to 65 percent of their expected production at 100 percent of the average market price.


The Green Transportation Summit and Expo, which bills itself as the Pacific Northwest’s largest alternative fuels
and transportation summit, is scheduled April 21-22 at the Portland Expo .
Private and public fleet operators, industry experts and government agencies will convene to explore and discuss bio fuels, hydrogen, compressed natural gas, liquified natural gas, renewable natural gas, propane and electric vehicles.

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Spending on arts and cultural still on the rise

The U.S. Bureau of Economic Analysis said spending on arts and cultural production continues to rise.
The report, released Monday, show the art sector’s gross domestic product contribution grew 3.8 percent, or $25.8 billion in 2012. As a result, the arts sector accounted for 4.3 percent of GDP, and an output of $698.7 billion, of GDP.
Arts and cultural production sector employment, taking into consideration all jobs, ranging from dancers to architects involved in production, provided 4.7 million jobs in 2012. The BEA said the core ACPSA
industries contributed one million jobs, while the supporting industries contributed 3.5 million jobs. The advertising industry was the primary core contributor, producing more than 1.3 million jobs, while the government accounted for 1.1 million jobs in supporting industries.
At the risk of appearing cynical, the rise of spending on the arts appears to be an insider’s game.
The wealthy develop non-profit arts foundations to underwrite performances and exhibitions few outside their class can afford to attend. Along with IRS write-offs, they’re showered with perks they really don’t need.

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Former Meier & Frank stores avoid Macy’s hit list

Major retailers are coming to grips with the fallout of an apparently disappointing holiday shopping season.
Online buying continued taking its toll and even the extra disposable dollars from lower gas prices didn’t seem to help expectations.
Cincinnati-based Macy’s announced a string of store closures, as well as two strategic openings, Thursday. None of the former Oregon-based Meier & Frank stores which are now part of the chain will close.
Soon-to-be-shuttered are: Metro Center, Phoenix, Ariz. (107,000 square feet; opened in 1973; 88 associates); Cupertino Square Mall, Cupertino, Calif. (177,000 square feet; opened in 1997; 111 associates); Promenade (192,000 square feet; opened in 1993; 112 associates); Promenade (furniture gallery), (81,000 square feet; opened in 1993; 19 associates), Woodland, Calif.; Gulf View Square, Port Richey, Fla. (84,000 square feet; opened in 1981; 78 associates); Northland Center, Southfield, Mich. (504,000 square feet; opened in 1954; 170 associates); Wendover, Greensboro, N.C. (141,000 square feet; opened in 2002; 83 associates); Ledgewood Mall, Ledgewood, N.J .(73,000 square feet; opened in 1994; 79 associates); ShoppingTown Mall, DeWitt, N.Y. (120,000 square feet; opened in 1993; 94 associates); Rotterdam Square, Schenectady, N.Y. (120,000 square feet; opened in 1995; 98 associates); Kingsdale Shopping Center, Columbus, Ohio (108,000 square feet; opened in 1970; 115 associates); Richmond Town Square, Richmond Heights, Ohio (165,000 square feet; opened in 1998; 105 associates); Upper Valley Mall, Springfield, Ohio (156,000 square feet; opened in 1971; 79 associates); Southland Mall, Memphis, Tenn. (150,000 square feet; opened in 1966; 112 associates).
Those stores accounted for approximately $130 million in annual sales.
The company is was restructuring merchandising and marketing functions at Macy’s and Bloomingdale’s as well. It will alter merchandising-related functions in local districts, hoping to improve its ability to localize assortments.
On the plus side, a three-story Bloomingdale’s of 150,000 square feet will be added in an expansion of Westfield Valley Fair Shopping Center in San Jose. The opening is targeted for the fall 2017
Macy’s will build a new 155,000-square-foot store on two levels to replace its existing 136,000-square-foot Westfield Century City location in Los Angeles. The existing Macy’s will be closed in January 2016 and razed to accommodate new development in the mall with the new store opening November 2016.

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One Frenchman’s perspective on Jan. 7 attack

I met Bernard Martoia a few years back while hiking on the Pacific Crest Trail. I’ve kept in touch with Martoia, who provides a wonderful stream of images from his hikes across North America.
Martoia was a member of the French staff at the United Nations and has been posted at several government offices during his career.
He sent out this note Wednesday evening. I thought it would be worth sharing his thoughts.

Dear friends,
Unfortunately, the slaughter of Charlie Hebdo journalists was predictable. Muslims do not have our sense of humor. The prophet Mahomet cannot be mocked, hence the slaughter in Paris where the killers claimed in the street that the prophet has been avenged.
The day before this slaughter was published a novel called “Submission” by Michel Houellebecq, in which the author described our submission to Islam after a general election where a Muslim candidate is democratically elected president in 2022. I immediately bought the book and started reading it. Unfortunately, the fiction is
already overtaken by the reality. The submission will arrive sooner in Europe. Christians and others believers will be subdued to the sharia. 7000 French Jews left France to Israel in 2014, more than the double in 2013. No doubt that the exodus will accelerate tomorrow.
There are many reasons for this chilling death of Western Europe. I will name a few of them.
- The radicalization of Muslims since the founding of the society of the Muslim Brothers in Egypt in 1928.
- The political correctness invented in the Californian universities in 1970 where it became forbidden to say things, which are offensive to minorities. The philosophical anomie forbids describing the reality, namely the jihad (war religion) where the conquest of the world is explicitly announced. The unrelenting attacks are the acts of “isolated” or “disorderly” people. The moto is that “Islam is a religion of peace, love, and tolerance.” “Please don’t amalgamate Muslims and Islam!”
- The invasion of Europe by asylum seekers (1) fleeing the Middle East and Africa wars, and the frightening demographic trend of Muslims born in Europe.
- The international conventions, which tie us.
- The cowardice of our political leaders.
Unfortunately, the United States of America are also threatened to become a Muslim republic one day. Check this chilling map of the second largest religion in your state made by the Washington Post on June 4, 2014.
Only Russia will stand on his two feet in the future. Democracy is too weak to resist this global trend.
However, there is a doctrine, which might save us. It was invented by the American diplomat George Kennan in a cable to the State Department in 1946. Kennan was working at the Moscow embassy at that time. The “containment” policy prevented the spread of communism abroad. It should be applied to Islam today. We are told by our leaders and media that people of different races and religions can live in peace together. However, a multicultural society is a permanent source of conflicts.
In his prophetic book “The Clash of Civilizations and the remaking of World Order” published in 1992, Samuel Huntington responded to his former student Francis Fukuyama’s book “The End of History and the Last Man.” He argued that the primary source of conflicts in the future will be along cultural and religious
lines. He was absolutely right.
(1) In his book published in 1973, the French novelist Jean Raspail prophesied with accuracy the invasion of Europe by boat people.

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Bear Creek Plaza next up on the market

While the new Medford Center ownership was checking its math and tallying up refurbishing costs, Bear Creek Plaza shopping center quietly went on the block a few months ago.
Bear Creek Ventures of Malibu, Calif., which acquired the shopping center on the southeast corner of Biddle Road and East McAndrews Road in 2007, is asking $25 million to $28 million — significantly more than the $22.175 million LBG Real Estate of Los Angeles paid Kimco Realty for Medford Center.
Medford Center boasts 335,000 square feet of leasable space versus 188,000 square feet at Bear Creek Plaza.
So why is Bear Creek Plaza fetching potentially 20 to 25 percent more than Medford Center ?
While Medford Center had infrastructure issues, suggesting it need a lot of physical updates, to go with leasing issues, Bear Creek is fully leased, including a batch of recent long-term renewals. The traffic counts are also the kind that cause retailers to drool.
The leases and location, in center of Medford’s commercial activity hub give the Bear Creek Ventures a lot of leverage.
“Highway 62 might have a higher traffic count, but a lot of that is pass through traffic,” said Tom Fischer of Coldwell Banker Commercial NW.
As a result, Bear Creek Plaza will likely more than double the $66 per square foot LBG Real Estate paid for Medford Center.
“The $66 per square foot,” Fischer said. “Was about right for what they have been getting, or not getting, in (lease) income. For someone to come in and buy at that price and then be able to fix it up and lease it at current market rates; that was a good buy.”

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