Daily Business Report
December 30, 1997
The number of California incorporations is expected to reach its highest level of the decade in 1997, reflecting the state's steady economic growth, a public records information service reported. The number should total 52,150, up 6.2 percent from 49,109 for 1996, reports CDB Infotek.
San Diego is participating strongly in the growth of incorporation, totaling the third highest amount of any county in the state and the largest year-to-year gain, by percentage of the top three.
In 1997, San Diego recorded 4,131 incorporations, up 13.6 percent from the 3,636 reached in 1996. Los Angeles was the leader in total incorporations, up 2.7 percent to 21,201 for the year, followed by Orange County, up 6 percent to 5,932.
The 1997 number is the highest of the decade. The low of recent years was reached in 1991 when 41,020 new businesses were incorporated.
"The economic growth that we first saw in Bay Area high-tech industries a few years back, has migrated into most other parts of the state and into other economic categories. Nothing indicates any slowdown right now," says Rick Rozar, CDB president.
Southern California saw incorporations increase 5 percent compared to last year. In the Bay Area it was up 8.5 percent and in the Central Valley it was up 15.8 percent.
CDB Infotek, a ChoicePoint company, provides on-line access to public records nationwide. In addition to business filing information, the company provides access to court records, real estate records, bankruptcy records and more.
The numbers include all California incorporations. Limited partnerships and out-of-state companies establishing a formal California presence are not included.
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A pair of San Diego health care organizations were among five medical groups and independent physician associations in California honored by Health Net with Health Net's annual Quality Awards.
The San Diego winners were Scripps Clinic and Mullikin IPA-San Diego Region (formerly Mission Bay Medical Group), an affiliate of MedPartners Inc. of Birmingham, Ala.
"Health Net works closely with our participating physician groups to improve the care and service provided to Health Net members," says Dr. Arthur Southam, president and CEO of Health Net. "We are proud to recognize and reward those physician groups that are leaders in quality and member satisfaction."
To measure quality of care, Health Net and its provider groups collaborated in a comprehensive tracking of the delivery of important health programs aimed at the prevention of disease, as well as preparation for important life stages.
For example, the frequency of delivery of mammograms and childhood immunizations was carefully measured. Wellness education programs to promote the prevention of serious diseases such as diabetes and to prepare members for events such as childbirth were tracked.
"We surveyed more than 400,000 Health Net-member households statewide to measure their satisfaction with the health care delivered by their medical provider group," says Dr. Antonio Legorreta, v.p., quality initiatives. Health Net made financial awards to the top groups to assist with quality maintenance and program expansion.
- Award Winners:
1. Marin IPA
—ranked first in the state
—third consecutive year to win a Quality Award
—with offices in Corte Madera, Greenbrae, Larkspur, Mill Valley, Novato, Point Reyes Station and Sausalito
—uses Marin General Hospital and Novato Community Hospital.
2. Palo Alto Medical Foundation
—ranked second in the state
—based in Palo Alto
—with affiliates in Fremont and Los Altos
—uses Stanford University Hospital and Washington Hospital.
3. Redwood Empire Medical Group
—fourth consecutive year to win a Quality Award
—based in Santa Rosa
—with affiliates in Cloverdale, Gualala, Healdsburg, Petaluma, Rohnert Park, Santa Rosa, Sebastopol and Windsor
—uses the Healdsburg General Hospital, Palm Drive Hospital, Petaluma Valley Hospital and Santa Rosa Memorial Hospital.
4. Scripps Clinic
—fourth consecutive year to win a Quality Award
—based in San Diego
—nine locations throughout the greater San Diego area
—utilizes Green Hospital of Scripps Clinic and a variety of affiliated hospitals, including all other Scripps Hospitals, Palomar Hospital, Pomerado Hospital and Tri-City Medical Center.
5. Mullikin IPA-San Diego Region (formerly Mission Bay Medical Group)
—based in San Diego
—with affiliated practices in Encinitas and La Jolla
—uses Mission Bay Memorial Hospital
—is an affiliate of Birmingham, Ala.-based MedPartners Inc., a physician practice management company.
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Applied Digital Access Inc. has changed its state of incorporation from California to Delaware. This change was accomplished by means of a merger of Applied Digital into its wholly owned Delaware subsidiary of the same name. The reincorporation effects only a change in the company’s legal domicile.
Applied Digital is a leading provider of network performance management products that include systems, software and services used to manage the quality, performance, availability and reliability of telecommunications service providers' networks. These products enable telecommunications service providers to improve quality of service, increase productivity and lower operating expenses.
The company has headquarters in San Diego, and product development and support facilities in Vancouver, British Columbia; Terre Haute, Ind.; and Richardson, Texas. Press releases and other information about Applied Digital Access and its products and services are available at http://www.ada.com on the Internet.
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December 29, 1997
Those smart folks at UCSD are at it again, this time taking aim at the aircraft industry.
An invention that promises to increase the efficiency and performance of jet engines, and thus reduce fuel consumption, has been developed by a control engineer at UCSD. The university has filed a patent on the invention, which was devised by Miroslav Krstic, associate professor of applied mechanics and engineering sciences at the school of engineering.
This new technology works on a section of jet engines known as the compressor — a chamber that densely packs air and allows combustion to take place. The greater the compression, the more powerful the thrust produced by the engine. Now when a jet engine is pushed to peak performance, the compressor operates very close to a point of instability. If left unchecked, this instability could cause the engine to stall.
Current safety mechanisms detect oscillation in the pressure — a symptom of pending instability — and react by opening a valve in the compressor and releasing a flood of air, which dramatically drops the pressure and thus reduces the thrust. This emergency tactic causes aircraft to be less than optimally efficient, requiring more fuel and bigger engines. The sudden scale-back of thrust can cause the aircraft to loose altitude, which has occasionally resulted in crashes during landing, take-off or high performance maneuvers close to the ground. One such highly publicized crash occurred in 1989 during the Paris air show when a Russian MIG 29 was performing a high angle of attack "cobra" maneuver.
"Current controls reduce pressure much more than necessary. It’s like throwing the baby out with the bath water," says Krstic. "We have developed an intelligent scheme that continuously checks the pressure and bleeds small amounts of air so that the engine is always operating with the maximum stable pressure. These subtle adjustments eliminate the need to cut back thrust and then build it back up."
Krstic's scheme is based on new scientific methods of adaptive and nonlinear control that he is developing in his research program, and on a simple observation that the pressure in the compressor depends on the position of the air release valve. If the valve is wide open, then the pressure is low; if it is closed, then the pressure is also too low. The pressure remains high (and gives the engine the optimal performance) only for some medium valve opening, and the goal is to keep the valve in that position.
"It is similar to anti-lock braking. Both slamming on the brakes and not braking at all result in less friction than simply tapping on the brakes," said Krstic. "Just as in the anti-lock braking scenario, the effectiveness of our new compression strategy can be explained using mathematical theories of averaging and singular perturbations."
Krstic uses a feedback loop of pressure measurements and mathematical calculations to determine the optimal valve opening and control valve adjustments while the aircraft is flying. In this way, the maximum pressure is found automatically, without needing a human to tune the valve to a particular engine or operating condition.
Although the system has not yet been tested in an actual aircraft engine, one of Krstic's students has successfully performed controlled laboratory tests on a small-scale, low-pressure compressor at the California Institute of Technology. The research was funded by a grant from the Air Force Office of Scientific Research.
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United States International University and Centro de Ensenanza Tecnica y Superior (CETYS University) have entered into a cooperative agreement designed to pave the way for collaborative research, teaching and learning at the two institutions.
The memorandum of understanding was signed at CETYS' main campus in Mexicali. Putting pen to paper were Garry Hays, president of USIU, and Enrique Carrillo Barrio-Gomez, president of CETYS.
Founded in 1961, the three-campus CETYS is a private university with schools in Mexicali, Ensenada and Tijuana. The main USIO campus is on Pomerado Road, just off Interstate 15 on the way into Scripps Ranch.
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The Holiday Bowl is today. Tickets are still available. What are you waiting for?
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It was a busy weekend for the San Diego’s First Family of Fish Tacos:
- Saturday, Rubio's opened its first Las Vegas location. Saturday night Rubio's was featured in a report by the St. Louis ABC affiliate on the Holiday Bowl (yes, the University of Missouri players loved fish tacos), and on Sunday, Rubio's got a mention in a New York Times' travel article on San Diego and the Super Bowl. The Downtown store was singled out as a great place to try a fish taco.
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December 26, 1997
San Diego has been chosen as the home port for the USS Pearl Harbor, says Rep. Bob Filner. The amphibious assault ship has a crew of about 300. Unlike many Navy ships, it was built from the ground up to accommodate both male and female sailors.
The commissioning ceremony is slated for May 30, probably at NAS North Island.
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Cox Yacht Insurance Agency Inc. of Newport Beach is opening a San Diego office on Shelter Island. The office will be under the management of Barringer Newcomb, whose resume includes owning a local boat yard, serving as one of the four original founders of the California Yacht Brokers Association and as a staff consultant for the last three America's Cup races. Ed Cox founded his firm in 1985 and has grown it into one the West Coast's leading marine insurance agencies.
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National University remains on the move, with its total enrollment now topping 11,000. The student population earns the institution the ranking as California's third largest private university. The average age of an NU student is 34.
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McMillin Cos. has been named 1997 Builder of the Year by the Riverside/San Bernardino chapter of the Building Industry Association of Southern California. Founded in 1960, McMillin is the oldest home-building firm based in San Diego.
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December 25, 1997
Merry Christmas.
While San Diegans are unwrapping their presents today, Santa came early for the San Diego Convention & Visitors Bureau. He brought the tourism agency an outstanding 1997 and a gift that should keep in giving through all of 1998.
"1997 was a blockbuster year for us in both our conventions and meetings and leisure travel markets," says ConVis President Reint Reinders. "Building on our success with hosting the Republican National Convention, we’re poised to start off the year with yet another marquee event — the Super Bowl."
The Super Bowl is expected to attract some 100,000 visitors to the region during a traditionally slow travel period in January, setting up a momentum for all segments of travel — leisure, group and commercial - to have a great 1998.
"Our industry broke several records in 1997," says Lynn Mohrfeld, ConVis director of research. "Annual hotel occupancy is expected to hit the 70 percent level for the first time since 1987 and the average daily occupancy rates are reaching all-time highs."
Convention bookings for the San Diego Convention Center remain very strong, with 57 definite conventions on the books for 1998. These bookings represent over 625,000 room nights (up 17 percent from 1997) and direct delegate spending levels of more than $300 million dollars (up 24.5 percent from 1997). They also represent the seventh consecutive year of attendance over 250,000 delegates for the center.
In addition to conventions held at the center, local hotel properties are expected to host in excess of 12,000 conventions and meetings next year, adding $1.3 billion in annual revenue to the local economy.
"San Diego is currently a hot convention market, thanks in part to the glowing reports we received industry-wide based on our performance during the Republican National Convention," says Reinders. "We have a solid reputation as a premier convention destination and this reputation, coupled with a strong economy, will keep business healthy well into the new millennium."
Domestically, San Diego should see more leisure travelers in 1998. Overnight visitors, both those staying in hotel/motel rooms and those staying in private households, will hit about 14.4 million in 1997, growing to nearly 15 million in 1998.
Reinders points out that the California market (accounting for about 40 percent of all visitors), especially the Southern California segments, plays a key role in the health of the San Diego visitor industry.
"The California economy is firing on all cylinders, which creates the perfect climate for travel," says Reinders. "When the economy is this strong, there is a high consumer confidence which leads to increased spending on pleasure travel, especially to close-in, spur-of-the-moment destinations which can be enjoyed for an extended weekend, for example. Business travel also increases with a strong economy, as companies are more willing to spend more on meetings and convention opportunities for their employees."
ConVis officials predict that the booming economies of the Pacific Northwest and Arizona will also lead to increased visitor activity from those target markets.
The 1998 projections for overseas visitors to the region are mixed. The economies of Germany and the United Kingdom, San Diego’s top European markets, remain strong, which should lead to an increase in visitors from Western Europe. The Asian market, however, will most likely remain soft due to current economic conditions. ConVis officials project that visitation from Japan, which is one of San Diego’s top international markets, will maintain, at best, its current levels.
Steve Pelzer, ConVis executive director of sales and marketing, says the Tri-City Alliance which was formed last spring with Phoenix and Las Vegas should help stimulate international travel to San Diego. "Teaming up with our Western partners to promote all three cities under one brand to international travelers is an excellent way for us to pool our resources and send a strong marketing message throughout Europe, Asia and Latin America," Pelzer says.
San Diego is expected to remain the 10th most popular overseas destination in the continental United States and No. 1 among destinations without direct overseas flight service.
"The rise in hotel occupancy levels and room rates, coupled with strong meetings and convention business next year, invite us to look forward to 1998 with a great deal of optimism. San Diego’s visitor industry should enjoy a gangbuster new year and, as our region's third largest industry, continue to significantly support our regional economy," Reinders says.
And a Happy New Year, too.
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Five years ago, most people probably thought a Web Master was a really cool spider. Today, it is one of the hottest occupations going. As a matter of fact, Internet business appears ready to take off. Forecasters say the $8 billion Internet economy of today will grow to $325 billion in five years.
To address the next millennium in electronic commerce, National University is adding a master's degree in electronic commerce, starting in March. "We’re developing new programs to make sure the university is on the cutting edge with its offerings and we are also being responsive to the needs of the business communities," says Leo Preiser, director of the Center for Technology at National University.
The masters of electronic commerce is one of three new master's degree programs to be offered by National University. The others are in environmental engineering, starting in February, and in electronic engineering, starting in April.
For more information call the university at 642-8111.
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December 24, 1997
New affiliate-transaction rules instituted by the state Public Utilities Commission have resulted in an executive management and board seat reshuffling at Enova Corp. and SDG&E. The rules, issued Dec. 16, state that a board member or corporate officer of a holding company may also serve with either a utility or its affiliate, but not both.
As a result, Stephen Baum, president and CEO of Enova and an SDG&E board member, maintains his seat on the Enova and affiliate boards, but immediately resigns his seat as an SDG&E director and his position as chairman-elect and vice chair of SDG&E. Donald Felsinger, president and CEO of SDG&E and executive v.p. of Enova, also immediately resigns his positions with SDG&E and its board. Daniel Derbes, a member of both the Enova and SDG&E boards, becomes non-executive chair of SDG&E.
David Kuzma, senior v.p., CFO and treasurer of both Enova and SDG&E, resigns from SDG&E but remains with Enova and other affiliates in the same capacity. Frank H. Ault assumes the position of CFO and treasurer of SDG&E in addition to his current post as v.p. and controller of SDG&E.
Tom Page, who retires as Enova chairman at month's end, will continue on the Enova and SDG&E boards of directors until April 28, when he will retire from both boards.
After the merger of Enova and Pacific Enterprises, Richard Farman, president and COO of Pacific Enterprises, will become chairman and CEO of the resulting company, Sempra Energy; and Baum will become Sempra's vice chair, president and COO. Baum will become CEO of Sempra two years after the effective date of the merger, and will add the title of chairman by September 2000, when Farman retires. Felsinger will become president and the principal executive officer of the unregulated businesses of Sempra and Warren Mitchell, president of Southern California Gas Co., will become president and the principal executive officer of the new company’s regulated operations, both reporting to the new Office of the Chairman which will consist of Farman and Baum.
In other news, the companies reaffirmed that Baum will become chairman of Enova effective Jan. 1, succeeding Page. Baum, 56, joined SDG&E in 1985, and, since that time, has held officer positions with responsibility for all aspects of the utility business, including overseeing the company’s marketing and customer service operations; government and regulatory services; strategic planning; and corporate services, including legal, human resources, corporate communications, real estate operations, safety and environmental services. He has served as president and CEO of Enova since January 1996.
Felsinger, president and CEO of SDG&E and executive v.p. of Enova, has been promoted to president and COO of Enova, effective Jan. 1. Felsinger has run the show at SDG&E's since January 1996.
Effective immediately, Edwin Guiles, senior v.p. of Enova, is promoted to president of SDG&E and joins SDG&E's board of directors. Guiles also will be promoted to executive v.p. of Enova as of Jan. 1
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Bank of Commerce has joined the Federal Reserve System as a state chartered member. As a result, the bank's regulatory oversight agency will change to the Federal Reserve from the Federal Deposit Insurance Corporation (FDIC). Customer deposits at Bank of Commerce will continue to be insured by the FDIC.
"This change will have very little impact on our day-to-day operations," says Pete Davis, chair and CEO of Bank of Commerce. "The Federal Reserve is the regulatory agency for larger banks and holding companies. Given our growth and expansion plans, we believe becoming a member of the Federal Reserve at this time is the appropriate action."
Bank of Commerce is the nation's leading SBA bank lender and the largest publicly held independent bank headquartered in San Diego County. The bank operates 12 specially designated loan production offices in San Diego, Glendale, Orange, Sacramento, and San Francisco; Las Vegas and Reno; Phoenix and Tucson; Seattle; Portland; and Denver. In addition, Bank of Commerce operates seven full service branches in San Diego, Palm Desert, and Temecula.
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The Palomar College Foundation launches Jan. 29 its "Campaign For Educational Excellence" designed to raise $600,000 for the college. The event will be held at the Edwards Cinema in San Marcos. Call (760) 744-1150, Ext. 2733, for more information.
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December 23, 1997
Prentiss Properties Trust, a national office and industrial real estate investment trust, has acquired three major suburban office and industrial properties totaling 430,056 square feet in its Western Region. Two of the properties are in San Diego.
Included in the transactions are Carlsbad Pacific Center, a two-building office complex totaling 89,755 square feet; Oceanside Distribution Center, a 143,274 square foot industrial building in the Rancho Del Oro Technology Park; and Glendale Federal Bank Plaza, a three-building office complex totaling 197,027 square feet in suburban Los Angeles.
The transactions total $43.3 million and have blended first- year cash-on-cash and funds from operations (FFO) yields of 9.20 percent and 9.30 percent, respectively.
"The acquisition of these quality, Class A assets is consistent with our corporate growth strategy," says Thomas F. August, president and COO of Prentiss. "These acquisitions add to the company’s existing Southern California portfolio and provide additional depth in key submarkets. The buildings were purchased for under replacement cost and offer competitive initial returns. Additionally, existing under-market leases present excellent releasing opportunities for these assets. These properties also offer potential redevelopment and development opportunities," he said.
Carlsbad Pacific Center
This two-building office complex totaling 89,755 square feet is located on the southwest corner of Interstate 5 and Palomar Airport Road in Carlsbad. The property includes a 2.5-acre pad site for future development of a 41,000-square-foot office building. The existing three-story steel frame and glass panel buildings offer tenants freeway visibility and access, ocean views, balconies and 351 parking spaces. The project was purchased for 90 percent of replacement cost and is 98 percent leased. With limited new developments coming on line, the market is currently 93 percent occupied, up from 87 percent in 1996. Strong absorption and increasing rents are expected to continue in part due to the plentiful amenities in the area, including golf courses, a regional shopping mall, restaurants, hospitals, colleges and executive housing.
Oceanside Distribution Center
This 143,274-square-foot industrial building on 7.6 acres is located in the 2,000 acre master-planned community of Rancho Del Oro in Oceanside. The Oceanside/Carlsbad/Vista industrial market contains a total of 14 million square feet of properties. Average annual absorption from 1995 through 1997 is one million square feet, and the market is currently 95 percent occupied. Constructed on a slab foundation with concrete tilt-up walls, the building has 24 foot clear height, 28 dock- high and 14 ground-level doors. Built in 1990, Oceanside Distribution Center is 100 percent leased and was purchased for 87 percent of replacement cost.
Prentiss Properties Trust
Prentiss Properties Trust is a fully-integrated, self-administered and self-managed REIt headquartered in Dallas. It acquires, owns, manages, leases, develops and builds office and industrial properties throughout the United States. The company owns interests in a diversified portfolio of 158 primarily suburban Class A office and industrial properties. The properties are located in 18 major markets and consist of 82 office buildings containing 8.7 million net rentable square feet and 76 industrial buildings containing 7.3 million net rentable square feet.
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Scheduled to stop in San Diego on Jan. 5 is the m/s Paul Gauguin, an 18,800 ton ultra-deluxe cruise ship. The ship left port in Florida Dec. 20, a day after being christened in Port Everglades by Maria Gauguin, great granddaughter of post-impressionist Paul Gauguin. It will be the ships only stop here as the vessel will earn its keep cruising the waters of the South Pacific.
The inaugural voyage is a sold-out a 16-night Christmas and New Year’s voyage from Ft. Lauderdale to San Diego. The christening of the 320-guest m/s Paul Gauguin — the newest member of Radisson Seven Seas' luxury fleet — unveiled the only ultra-deluxe vessel to be built in 1997. Built by France's Chantiers de l'Atlantique shipyard, the most deluxe ship ever to be based year-round in French Polynesia boasts an innovative, open design. Owned by Services et Transports of France, the ship offers 160 ocean view staterooms (50 percent with private balconies); the highest space- per-guest ratio of any vessel serving the North American market; a retractable marina featuring a comprehensive water sports program; the first-ever shipboard spa by Carita of Paris; and a fine dining experience inspired by two-star Michelin chef Jean-Pierre Vigato.
En route to French Polynesia, the Paul Gauguin calls in San Diego on Jan. 5, in San Pedro on Jan. 6 and 7, in Santa Barbara on Jan. 8 and in San Francisco on Jan 9 and 10.
Starting Jan. 31, the Paul Gauguin will offer seven-night cruises sailing every Saturday from Papeete, Tahiti, to Rangiroa, Raiatea, Bora Bora and Moorea. Prices start at $2,795 per person (for bookings made at least 120 days in advance) with roundtrip air from $150-$450 depending on carrier and gateway.
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December 22, 1997
In another sign of a strong economy, the University of San Diego’s Index of Leading Economic Indicators for San Diego County rose 1.2 percent in October. All six components of the Index rose during the month. For the third straight month, there were sharp increases in building permits and local stock prices. Smaller gains were registered by tourism, help wanted advertising, and the outlook for the national economy. Initial claims for unemployment insurance were virtually unchanged, although there was a slight positive bias.
With October's rise, the Index has now increased for 31 months in row. The magnitude of the gain (plus 1.2 percent) was the largest since March 1986. Contributing to the gain was the largest monthly increase ever recorded for residential units authorized by building permits. An already strong year for building permits received a big boost in October with a permit for an apartment project involving 600 units. As a result, there were nearly as many multi-family residential units authorized in October as there were in the entire year of 1996. This, coupled with the best month so far this year for single-family units, led to the spectacular gain in building permits.
The other big gainer was local stock prices. This component is calculated by taking the average daily value of the local stock index. Because October's stock market crash occurred at the end of the month, the average daily value of the stock index was not affected to a great extent. The result was again in October forth is component. It will be future months that will be affected by the crash.
While the strong gains in building permits and local stock prices were good news, perhaps even more important was the turnaround in both labor market components. In recent months, negative trends were developing in initial claims for unemployment insurance and help wanted advertising. These trends were reversed in October. Whether a positive trend in these variables will develop is uncertain, but at least the first step has been made.
The bottom line of all of this is that the San Diego economy is ending 1997 on a spectacular note. The momentum generated will likely carry over into next year, meaning that 1998 is shaping up to be another strong year for the local economy. Next month's Index report will include USD's detailed forecast for various sectors of the local economy for 1998.
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American Residential Investment Trust Inc. will buy about $475 million of non-conforming loans over the next two months. About two-thirds of the loans are intermediate adjustable rate mortgages and one-third are 6-month LIBORs. More than 60 percent of the loans have prepayment protection covering an average of nearly three years.
The package will consist of loans to borrowers with various levels of credit impairment. Of the loans, 68 percent will be "A" credit quality and 22 percent "B" credit quality. The entire package will consist of loans collateralized by single-family residences with an average loan-to-value of less than 80 percent. $75 million in loans will be purchased from Accredited Home Lenders Inc., a mortgage lender headquartered in San Diego and the remainder from a large investment bank.
John Robbins, chairman and CEO of American Residential, says of the purchase, "This is in line with our strategy to pursue opportunities in higher margin products that become available as the mortgage loan market continues to change. We are also moving ahead with our Direct Purchase Program targeted at accessing mortgage products through correspondents."
Based in Del Mar, American Residential is a real estate investment trust that invests in adjustable rate residential mortgage assets. The company went public on Oct. 29, with 6.5 million shares of common stock sold at a price of $15 per share.
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December 19, 1997
San Diego is the nation's eighth most proficient county when it comes to creating new businesses, according to the Lead Sheet Report compiled by County Data Corp., a division of American Business Information Inc. Through the first 10 months of 1997, 8,931 new businesses started in San Diego, accounting for 0.81 percent of all new business nationwide. Houston generated the most new businesses, 29,286. San Diego was just behind San Antonio's 9,393 new businesses and just ahead of Austin's 8,453.
In 1996, San Diego was responsible for 9,198 new businesses, and again held the eighth spot on County Data Corp.'s list.
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Quidel Corp. has received U.S. Food and Drug Administration clearance to market two new tests designed for use in the clinical laboratory market that detect human chorionic gonadotropin (hCG), the hormone produced during pregnancy.
More than 45 million tests for hCG are performed each year in doctors' offices, clinics and emergency rooms generating a market estimated at $50 million dollars annually
The hormone hCG is produced by the placenta shortly after implantation of a fertilized egg. It is present in the serum and urine of pregnant women, making it an excellent market for confirming pregnancy. These new products from Quidel have an enhanced low-end sensitivity that make them excellent choices for clinical use where the determination of an unknown pregnancy can prevent unnecessary procedures from being performed on the mother that could be harmful to the fetus.
These new tests are greater than 99 percent accurate. Test results are available in minutes after the addition of sample with no additional reagents or steps required.
The new products will be sold under the brand names, QuickVue One- Step hCG-Combo, Cards QS hCG Serum/Urine and Concise Performance Plus hCG-Combo. These tests offer added conveniences over the two current market leaders, such as no pre-treatment of serum samples and room temperature storage. The Cards QS and Conscise Performance Plus brands also provide test results in the universally recognized "+" sign for a positive results and a "-" sign for a negative result.
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Esquire Communications Ltd. has acquired Henry Jacobs Associates and Affiliated/Certified Reporting Co., two court reporting companies in the Manhattan borough of New York City. The combined revenues of these two companies are about $5 million.
These two companies are tuck-in acquisitions to Esquire's New York operations. The combination clearly establishes Esquire as the largest court reporting company in the important New York market.
The addition of these two companies along with the 10 acquisitions announced in November, bring the San Diego company’s annualized revenues to approximately $75 million. The ten announced in November established three new hub markets, Fort Lauderdale, Florida, San Antonio, Texas, and Denver, Colorado, and tuck-in acquisitions to our Chicago, Illinois, Philadelphia, Pennsylvania, and Santa Ana, California markets.
Esquire is a nationwide legal support services company with operations in 10 states and 12 major markets.
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December 18, 1997
Bank of Commerce has completed the sale of $24.7 million of the unguaranteed portion of its Small Business Administration 7(a) loan portfolio to General Electric Capital Small Business finance Corp. of St. Louis, a division of General Electric Corp. BofC will record a $3.2 million pretax gain in the fourth quarter, 1997 as a result.
"This transaction is the first time in our 22 year history that we have marketed only the unguaranteed portion of SBA loans in our portfolio," says Peter Davis, chairman and CEO of Bank of Commerce. "In the past the unguaranteed portion of our SBA loans were sold only as part of a securitization. The authority to sell only the unguaranteed portion is a relatively new right, and the ability to sell individual loans affords our asset management team greater flexibility in addressing the bank's liquidity and capital needs."
This loan transaction represents 7.1 percent of Bank of Commerce's $351 million SBA loan portfolio and 6.4 percent of its total loan portfolio of $393 million. The reported gain stems from receiving a premium over the face amount of the loans and the immediate recognition of fee income that was being amortized over the life of the loans in the portfolio.
"By selling the unguaranteed portion of our SBA loan portfolio, we are able to continue to hold the majority of SBA guaranteed portions, which contain no credit risk," Davis says. "In addition, the guaranteed portion of SBA loans require less regulatory capital for holding purposes and therefore, allow us to expand our asset base more quickly. This sale is part of our ongoing strategy to resume sales of portions of our SBA portfolio to balance our asset growth with income generation."
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On the heels of announcing it will sell its two San Diego power plants, Enova Corp. announced yesterday it was teaming with Houston-based Houston Industries to build and operate a 480-megawatt, state-of-the-art power plant in Nevada.
Known as El Dorado Energy, the $280 million plant will be located in Boulder City, about 40 miles southeast of Las Vegas. The plant is expected to begin producing electricity in the third quarter of 1999, making it one of the first large-scale "merchant" electric-power generating facilities in the United States.
As a merchant power plant, El Dorado Energy will sell electricity into the wholesale market to utilities throughout the western United States. In this region, some utilities import more than half of their electricity, a trend that is expected to increase as the electric industry moves toward deregulation and becomes increasingly competitive.
The new plant will employ the most advanced combined-cycle gas turbine technology, making it one of the most efficient and environmentally friendly power generating facilities in the nation.
"Deregulation of the electric industry is starting up in 1998," says Stephen Baum, president and CEO of Enova. "With competition will come increased demand for new, low-cost sources of power, which El Dorado Energy will help satisfy. This project complements our company’s strategy of developing a broad menu of energy-related products and services, supported by a solid asset base, wholesale trading capabilities, and a strong retail and commercial marketing network."
The companies say the location for the plant in the Eldorado Valley area of Boulder City is ideal from the standpoint of its access to fuel supplies as well as to power transmission lines. Because service from multiple major gas pipelines will be available to the plant, the companies estimate that fuel transportation costs and natural gas prices will be extremely competitive. Additionally, easy access to major power transmission lines that traverse the area will facilitate marketing and distribution of the power once it is produced.
El Dorado also will help spur development of solar energy in Boulder City by supplying the water, natural gas and power infrastructure for construction to begin in the city's solar enterprise zone. The plant is a joint project of Houston Industries Power Generation, a subsidiary of Houston Industries, and Enova Energy, a subsidiary of Enova Corp. Construction is expected to begin in the first quarter of 1998.
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Host Marriott Corp. has made official its plans to acquire for $54.4 million the 300-room Coronado Island Le Meridien resort and convert the hotel to a Marriott Resort property. Marriott International Inc. will run the hotel, which will be renamed the Coronado Island Marriott Resort.
"The Marriott brand name will have a significant positive impact on the financial performance of this hotel," says Terence Golden, Host Marriott's president and CEO. "Additionally, there will be significant synergies between the Coronado Island Marriott Resort and the San Diego Marriott Hotel & Marina including cost reductions, marketing opportunities and joint support and service for major conventions held at the world-class San Diego Convention Center."
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December 17, 1997
Sempra Energy is the name chosen for San Diego’s first Fortune 300 company. The name was announced yesterday by Enova Corp. and Pacific Enterprises, which are merging and will locate their headquarters in the SDG&E building in Downtown.
Sempra is derived from the Latin word "semper," which means "always." The companies say the name was chosen after extensive market research with energy customers in key markets across the United States. The name takes effect when the merger, which creates a $5.2 billion company, is completed in summer 1998.
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Seven San Diego-area technology companies won top honors at UCSD Connect's 10th annual Most Innovative New Products Awards competition. A record 900 attended the sold-out event at the Hyatt Regency La Jolla.
The competition awarded companies in seven categories: Entertainment & Leisure, General Business, High-Tech Electronics, Life Sciences, and Software, as well as the two new categories of Internet and Telecommunications. The winners for this year’s competition are as follows:
* Rokenbok Toy Co.'s Rokenbok System is the Entertainment & Leisure winner. The system takes the classic construction system to the next level with its patent pending AMD-RD technology. The large scale system is designed to build interactive play environments for Rokenbok precision control RC vehicles. The AMD-RD technology allows a maximum of 4 players to drive and control up to 8 RC vehicles simultaneously. It’s the classic toy of the future.
* The winner for General Business is XXsys Technologies for Robo-Wrapper. Robo-Wrapper is a computerized, automated winding machine that wraps prepreg tow (carbon fiber which has been pre-impregnated in resin) around bridge columns and parking-structure columns. The machine rotates around the column to form a "jacket" that conforms to the shape of the column. The purpose of the jacket is to prevent the column from collapsing during an earthquake.
* XLNT Inc. won in the High-Tech Electronics category for the Millenium 4000. Designed to ensure fast, reliable data access for Internet, multimedia and other high bandwidth applications, the Millennium 4000 is a fault-tolerant gigabit ethernet switch that seamlessly enables data-intensive industries such as finance, manufacturing, science, health care and government agencies a ten to 100 fold increase in their data access time over previously available technologies.
* Advanced Tissue Sciences' Dermagraft-TC is the Life Sciences winner. Dermagraft-TC is a human fibroblast-derived temporary skin substitute consisting of a polymer membrane and neonatal human fibroblast cells cultured in vitro on a nylon mesh. It is used as a temporary wound covering for surgically excised full-thickness and deep partial-thickness thermal burn wounds in patients.
* Wright Strategies won in the software category for FormLogic. FormLogic, a software application platform for developing, deploying and managing applications that extend line-of-business processes, allows corporations to build and manage handheld applications to automate any process previously requiring pencil and clipboard data collection, thereby turning handheld computers into corporate productivity tools and extending the power of the enterprise information system to the mobile field force.
* The Internet winner is PersonaLogic for their Personalized Decision Guides. Personalized Decision Guides enable consumers to make informed choices about complex products and services. They also allow the consumers to quickly and efficiently sort through massive amounts of current data.
* In the final category, Telecommunications, the winner is Peregrine Semiconductor for their PE 3282A. The PE 3282A, a phase-locked-loop (PLL) integrated circuit for the wireless communication and satellite industries, is the first product to employ Peregrine's revolutionary UTSi (Ultra-Thin-Silicon) process for design and production - a unique technological breakthrough that will allow total integration of all wireless communication components on a single chip.
Connect also presented a "Sponsors' Award" this year to a company for significantly contributing to the vitality of San Diego’s emerging high-tech and biotech community. It was awarded to Agouron Pharmaceuticals Inc. for being the first San Diego biotechnology company to have a therapeutic product approved by the U.S. Food & Drug Administration. This product — Viracept — has quickly become an important part of the treatment for HIV infection. UCSD Connect and the MIP selection committee would like to commend Agouron for their efforts in the development of this new drug which represents a leap forward for the San Diego biotechnology industry.
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Alan Paau, director of Intellectual Property and Technology Transfer at Iowa State University, has been named director of the Technology Transfer Office at UCSD. He replaces Martin Rachmeler, who retires in January.
Paau will oversee all new inventions, tangible research property and copyrightable material arising from research on UCSD's campus. The Technology Transfer Office was created in 1994 to be actively involved in technology transfer with the private sector, to help protect commercially valuable intellectual property and to provide a resource to UCSD for intellectual property questions.
Paau comes to UCSD with more than 14 years of administration and 22 years of research and development experience. He currently manages all inventions, patents, trademarks and most copyrighted materials for ISU, in addition to serving as executive director of Iowa State University Research Foundation Inc., an intellectual property management and technology licensing company.
"This will be a new challenge," Paau says of his appointment at UCSD. "In the last several years at Iowa State we’ve put a good system in place, with good people in charge. Now I’m eager to take on a prestigious university like UCSD and do the same thing."
In addition to his managerial duties at ISU, Paau is an adjunct professor of microbiology, immunology and preventive medicine, and zoology and genetics. He has published 30 refereed research articles and six invited technical reviews and book chapters, in addition to eight U.S. and 15 foreign patents.
Considered a leader and innovative problem solver, Paau hopes to build a "highly energized and user-friendly" technology transfer program at UCSD.
"It’s exciting to see the entrepreneurial spirit on the West Coast and in San Diego with the number of startups there," said Paau. "With a relatively new technology transfer program at UCSD, I see an opportunity to build it into one of the most prolific technology transfer offices in the country.
"Sometimes people see technology transfer as a hurdle, but I'd like to organize a user-friendly structure, where we work with faculty to show that we’re not a bureaucratic barrier, but rather an ally on their side to benefit the university and the community."
Paau is affiliated with a variety of organizations and associations, including the Licensing Executive Society, the Association of University Technology Managers, the American Society for Microbiology and the American Association for the Advancement of Science.
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December 16, 1997
First National Bank is strengthening its international operations by opening two new branches in the South Bay, one in San Ysidro and the other in Chula Vista. The San Ysidro branch, located at 418 San Ysidro Blvd., will host a grand opening tomorrow, 5 p.m. Serving as border area branch manager is bank v.p. Marco Hernandez.
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Automated inventory management software created by San Diego-based Petrolsoft Corp. is now ensuring that 4,300 Mobil gas stations in the United States never run out of fuel. Under the old system, customers placed orders individually using touch-tone phones and Mobil then dispatched the tankers.
Petrolsoft is billing the Mobil system as "the largest automated inventory management system in the world."
Every day, the Petrolsoft program, named Supply, gathers sales and inventory data from station sites. It then generates up to 15 future orders for those stations with balanced quantities and suggested times of delivery.
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The newly-created San Diego Receivers Forum has elected officers. Serving as president is Peter Ito, a lawyer with Pyle Sims Duncan & Stevenson. Paula Graham, also with Pyle Sims, was elected vice president. Richard Kipperman, president of Corporate Management Inc., is treasurer while David Cleary, owner of Cleary Associates, is secretary.
Less than six months after forming, the San Diego Receivers Forum has registered more than 75 members.
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The accounting firm of West, Turnquist & Schmitt is changing its name. The new name, which takes effect in about 45 days, is Turnquist, Schmitt, Kitrosser & McMahon. Edward Kitrosser, whose name is now incorporated into the firm's title, joined the company in 1985 and became a shareholder in 1988. He was voted managing partner two months ago.
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Stoorza, Ziegaus & Metzger has been named a regional powerhouse by Inside PR magazine in its yearly agency report card issue.
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December 15, 1997
After five years as president of the Greater San Diego Chamber of Commerce, Gilbert Partida is resigning to become president and CEO of the publicly traded PriceSmart Inc. He starts his new job Jan. 12. Partida said the move was carefully planned, based on several key factors.
"Since the time I was hired, it has been my view that five years is the right length of time to be in a job like this," says Partida. "Today, the Chamber is healthier than it has ever been. It is fiscally sound, politically influential, with top-notch leadership and a talented management team in place. At this point, the Chamber can handle this transition without missing a beat."
In January 1993, when Partida officially assumed the Chamber presidency, membership had fallen steadily to 2,100 and the $2.9 million organization was deeply in debt. Today, the Chamber's 4,500 members represent nearly 40 percent of San Diego’s civilian workforce. It is a $7.9 million company that has, over the past two years, earned a surplus of $1.3 million, has eliminated its debt and has almost completely divested itself of government funding.
"Gil's contribution has been absolutely tremendous," says newly installed Chamber Chairman Anne Evans, who is also chairman of Evans Hotels. "He took this job to make a difference and he has succeeded. It is a new Chamber and a new San Diego today, thanks in no small part to his tireless leadership."
Partida's new employer, PriceSmart, is a merchandising company whose businesses include retailing in Asia and Latin America, automotive referral and travel services. It was created following the July announcement that Price Enterprises Inc. was separating its real estate and merchandising units into two separate, publicly traded companies. Price Enterprises, which became a real estate investment trust, and PriceSmart, a merchandising company that originally had Robert Price as its chairman, president and chief executive of PriceSmart. Jack McGrory left his position as San Diego city manager to take the position of president and CEO at Price Enterprises.
PriceSmart shares trade under the on the Nasdaq Stock Market under the symbol "PSMT." Price Enterprises shares trade on the Nasdaq under the symbol of "PREN."
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Sentre Partners opens the Ice Rink at Horton Square on Wednesday behind the Home Savings Tower. Prices to skate will be $5 for adults and $3 for children. It will cost $2 to rent skates. Sentre is donating profits from the rink, which will be open three months each year, to the Hematology/Oncology Care Center at Children's Hospital.
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December 12, 1997
Offering further proof that San Diego’s visitor industry is experiencing a banner year are the results from October. In the month, visitors to San Diego spent $330.6 million, a 10 percent increase from October of 1996. Year to date spending has surpassed $3.6 billion, which just a few years back would have been considered a nice year.
Hoteliers are participating strongly in the tourism spree with the average hotel rate up 11.4 percent in October to $90.65. For the year it is up 8.4 percent to $86.90.
Average hotel occupancy during the month was 71.5 percent, a 4.5 percent increase, while for the year the occupancy rate is at 73.8 percent. Attendance at local arts and museum attractions soared 69.6 percent in October.
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Receiving its largest outside investment to date, Rubio's Restaurants Inc., operator of Rubio's Baja Grill restaurants, has raised $10.1 million through a private placement of convertible preferred stock. The placement was directed by NationsBanc Montgomery Securities Inc., with Farallon Capital Management L.L.C. of San Francisco as the leading investor. Farallon principal, Jason Fish, will join Rubio's board.
The new equity will be used for expansion in Southern California, Arizona and Nevada. Rubio's, a private, family-operated $30-million, 41-location restaurant chain in the quick-service segment, will open about 20 units in 1998. It plans to grow to more than 100 restaurants by the year 2000.
Rubio's which has locations throughout Southern California and Phoenix, including 20 in San Diego, will open in Las Vegas this month. Rubio's has sold more than 25 million of its signature menu item — the San Felipe-style fish taco — since opening for business in 1983.
Rubio's initial private placement was in February of 1995, when Rosewood Capital L.P., also of San Francisco, invested $3 million in Rubio's and Rosewood principal, Kyle Anderson, joined the Rubio's board. In March of 1996, Rosewood invested an additional $4 million and, in this latest round, pumped in another $2.5 million, raising its total stake to $9.5 million.
Joining Rubio's board in 1997 was Kim Lopdrup, president of Togo's, a division of London England-based Allied Domecq PLC. Lopdrup also is a board member at Hiram Walker & Sons Ltd.
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December 11, 1997
Mayor Golding delivers the annual State of the City Address Monday, 5 p.m., at Horton Plaza's Lyceum Theatre. Seating is limited, so get there early.
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Qualcomm Inc. says it will soon introduce a free, Web-based version of its popular Eudora e-mail program. The technology will be showcased in Qualcomm's booth, #1867, this week during Internet World in New York City.
Among the neat features of Eudora Web-Mail is its auto-forward option that allows users to send and receive their e-mails from existing Eudora accounts via the Web. So before you leave the laptop or desktop, a regular Eudora user just hits a forward function and can then tap into their e-mail from the growing number of stand-along Internet terminals or cyber cafes that are springing up around the world.
Those individuals who do not own their own computers or whose positions do not require the need of a computer on their desks also now have the opportunity to experience the ease of e-mail communication. These users can access their personal accounts from any computer which has access to the web — a friend's house, nearby cybercafe or local library. Administrators also may benefit by utilizing Web-Mail.
Interested parties simply log onto the Eudora Web-Mail site and register for a free private account. After completing the registration process, they will receive a personal user name with their chosen password.
Eudora Web-Mail includes the following key features:
- * Personal address book
* Directory services
* Mailing list management
* Automated message reply
* URL hot links
* Multiple personalities
Eudora Web-Mail will be available via the Web on Jan. 1. To register, visit www.eudoramail.com.
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Elsewhere, aside from giving away free e-mail services, Qualcomm is busy signing deals with other countries. Just this last week it’s signed a memorandum of understanding with the Bangladesh Rural Telecom Authority (BRTA), a privately licensed telecommunications operator who will supply service to rural areas throughout Bangladesh. The MOU was signed in the presence of U.S. Secretary of Commerce William Daley and Mr. T. Ahmed, Minster of Industry and Commerce of Bangladesh, after the bilateral meeting of the two countries in Calcutta, India. Under the terms of the multi-year MOU, QUALCOMM will supply a cdmaOne (Code Division Multiple Access) system to BRTA worth $25 million.
In a country with over 120 million people and a low number of installed telephones, BRTA's modern CDMA wireless local loop system will provide essential basic telephone service to rural towns and villages throughout Bangladesh. In a CDMA wireless local loop application, a wireless link is used to replace a traditional copper line to connect telephones. Copper lines don’t do well in monsoons.
Qualcomm expects to open an office early next year and start supporting a working system in the second quarter of 1998.
In Africa, Qualcomm has signed a contract with Nigerian Starcomms Limited, a privately licensed wireless local loop (WLL) operator that will supply service to the Lagos area. Under the terms of the contract, Qualcomm will supply a cdmaOne system to Starcomms worth over $40 million.
Deployment of the system is scheduled to begin in early 1998, with commercial service expected in the second quarter.
"We chose to deploy Qualcomm's CDMA technology because it has proven to be the most technically and economically viable solution for providing fixed wireless service," says Chief Maan Lababidi, chairman of Starcomms. "We look forward to rapidly providing reliable, secure and high-quality communications to a mix of business and residential customers in the Lagos area."
High demand for telephone service is spurring the growth of the telecommunications sector in Nigeria, Africa's most populous country with 110 million people.
Qualcomm continues to expand its global presence with contracts for CDMA deployments in North America, South America, Central Asia, Southeast Asia, Eastern Europe and Africa. The company pioneered the acceptance of CDMA technology in Africa, and is engaged in advanced discussions with several other carriers in the region. It has emerged as a leader in the WLL arena with commercial WLL systems in Russia and India, and deployments underway in Russia, Ukraine and the Philippines.
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San Diego-based Petco says that President Clinton called its Washington, D.C. store Monday to ask about toys, leashes, and collars for his new chocolate Labrador puppy. Chris Lowery, manager of the store, took the call.
"He asked the same questions that any new puppy owner asks," says Lowery, "He said that he and the First Lady wanted to be responsible for training the puppy. We talked for about 10 minutes about different rubber and leather toys, including pig's ears, which the President remembered from his days in Arkansas."
Eight of 10 pet owners buy presents for their furry, feathery and slippery friends, says the American Animal Hospital Association.
Here's what Petco's buyers say are the Top 10 critter gifts for the 1997.
- * Holiday apparel, such as Santa hats and reindeer antlers.
* Colorful "fashion" sweaters and coats for dogs.
* Booties for dogs.
* Treat dispensers.
* Knit fireplace stockings for dogs and cats.
* Rawhide Christmas bells.
* Interactive play toys for cats and their owners.
* Oversized pet furniture, such as cat playstations or dog beds.
* Leather collars and leads.
* Chew toys for hamsters and other small critters.
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December 10, 1997
Burnham Pacific Properties Inc. is about to become the largest publicly-traded West Coast retail Real Estate Investment Trust.
The defining moment comes as the company signs a definitive agreement with Golden State Properties relating to its acquisition of Golden State's 2.6 million square-foot California retail portfolio. Simultaneously, affiliates of Blackacre Capital Group LP and Westbrook Partners L.L.C. will invest $120 million in newly issued convertible preferred securities of Burnham Pacific. It is anticipated that the transactions will close by year end. Upon closing, BPP will own interests in 61 properties totaling some 8.2 million square feet having a book value exceeding $1.1 billion.
Heres how David Martin, Burnham Pacific's president and CEO, sums up the news: "The transaction accomplishes several important things for us. It provides short- term and long-term accretion for our shareholders. It makes us the largest player in our market and provides many operating efficiencies and market opportunities as a result. It creates an ongoing relationship which will provide us with a source of additional acquisition and development opportunities. Finally, it brings to the company a significant endorsement of our strategy from two successful and highly sophisticated real estate operating company investors."
Ron Kravit, managing director of Blackacre (the majority owner of the Golden State Properties portfolio) agrees, "We were offered several competitive cash offers, however, we believe that significant upside remains in our assets and in the combined entity. Of all the West Coast retail entities, we believe Burnham Pacific is the best positioned to be the major consolidator on the West Coast. We further believe in the merits of the company’s strategy and its potential earnings growth and multiple expansion, and, therefore, we are very pleased to be a major shareholder and look forward to significant in»crease in shareholder value."
Paul Kazilionis, managing principal of Westbrook Partners, adds, "Part of our company’s overall strategy is to back those real estate operating companies which we believe are emerging as the leading player in their respective sectors. We believe that this transaction clearly positions Burnham Pacific as the leader in West Coast retail, given the Company's strong assets and markets, cash flow growth potential, experienced management team and strategy."
The Golden State properties are all located in California, within existing Burnham Pacific regions. California's rate of job growth, population growth, income growth and retail sales growth currently exceeds the nation's. Following the closing, the combined portfolios will total 61 properties, representing over 8.2 million square feet.
The Structure
Burnham Pacific is acquiring the Golden State portfolio for an initial price of $314 million. The partners of Golden State are reinvesting their equity in Burnham Pacific in the form of $50 million of convertible preferred securities carrying a dividend yield of 8 percent, and ultimately exchangeable into Burnham Pacific common shares at a price of $15 3/8 per share.
In addition, Westbrook Partners will also acquire $70 million of convertible preferred stock in Burnham Pacific with similar economic terms to the Partners of Golden State. The Westbrook funding is scheduled to occur at the closing of the acquisition. The company’s total equity base will increase some 35 percent with the addition of the $120 million in convertible preferred securities.
Nomura Asset Capital Corp. has committed to fund $150 million in first mortgage debt collateralized by the Golden State assets at a spread of 95 basis points over 10-year treasuries. The rate will be fixed prior to closing for the 10-year term of the debt.
The balance of the initial price will be funded from Burnham Pacific's line of credit which is also provided by Nomura.
The partners of Golden State have the right to receive up to an additional $30 million for value created through the lease-up of certain specified unleased portions of the portfolio. The additional consideration will be paid out over an 18-month period. The partners of Golden State have the option of taking the additional consideration in cash, or in operating partnership units with the number of units based on the then-prevailing price for the Company's common shares. Any leasing activity for the unleased and unbuilt space must adhere to certain standards as to use, creditworthiness and lease terms, with Golden State responsible for all leasing costs and Burnham Pacific retaining certain approval rights.
The definitive agreements have been approved by Burnham Pacific's board and by the other parties, subject to delivery of normal documentation at the closing. Closing does not require action by the shareholders of Burnham Pacific; but Burnham Pacific has undertaken to submit the transactions to its 1998 Annual Meeting of Shareholders and to redeem a portion of the preferred securities for cash in the event that the holders of a majority of its common stock voting on the matter do not approve the transaction.
Donaldson, Lufkin & Jenrette Securities Corp. is acting as financial advisor in connection with the transactions.
Future Relationship
In addition to Blackacre, Golden State's current owners include Highridge of Los Angeles.
The companies have also reached conceptual agreement on a continuing relationship whereby Highridge will identify and pursue retail development and major renovation opportunities and Burnham Pacific, subject to certain approvals and conditions, will assist in financing those opportunities and provide Highridge with pre-sale commitments.
John Long, managing partner of Highridge and the operating partner of Golden State, comments, "We believe we are still in the early innings of the California recovery and the retail property rebound, and we believe that the best way for us to further take advantage of this opportunity is to contribute our portfolio to Burnham Pacific. We further believe that West Coast retail development and major renovations will begin to become a major factor in future growth strategies and we are shifting our efforts in that direction."
The Parties
Burnham Pacific Properties is a fully integrated real estate operating company which acquires, rehabilitates, develops and manages retail properties on the West Coast. Headquartered in San Diego, Burnham Pacific has regional offices in Los Angeles, San Francisco and Portland, Oregon.
Golden State is a private investment partnership between Los Angeles-based Highridge Partners, Gene Rosenfeld and John Long, and private real estate investment fund Blackacre Capital Group L.P. of New York.
Westbrook Partners, L.L.C., is a private, fully-integrated real estate investment management company with about $3 billion in real estate investments under management.
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The U.S. Navy's Southwest Division, Naval Facilities Engineering Command, has awarded Bechtel the third and latest phase of an expanded multi-million-dollar effort to clean up and remove a variety of hazardous and toxic wastes where present at 50 Navy and Marine Corps installations on the West Coast.
Drawing from the more than 100 employees who are working in its San Diego office, Bechtel Environmental Inc. will provide environmental and engineering services for the $150 million Comprehensive Long-Term Environmental Action Navy (CLEAN) III project. Involved will be the study, field investigation, design, support of remedial action, and community relations for Naval bases, supply depots, test ranges, shipyards, air and weapons stations, and Marine Corps facilities in California, Arizona, Nevada, New Mexico, Washington, Oregon, and Alaska. The majority of work will most likely be performed in Bechtel's San Diego office.
Since the spring of 1993, Bechtel has been involved in initial efforts to clean up the Navy and Marine Corps bases under earlier phases of the CLEAN program. BEI Vice President and CLEAN Program Manager Jim Moe points out that the assignments have kept a wide skill base of employees busy at the firm's offices in San Diego’s first National Bank building. Included have been such workers as geologists, environmental engineers, scientists, community relations representatives, accountants, and administrative and procurement personnel.
"We’re pleased that we have been able to tap into the resources available in the San Diego market to supply our employment needs," says Moe. "The end result is that we have been able to employ a significant number of people who are now spending their earnings locally and contributing to San Diego’s economy."
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EastGroup Properties Inc. says it has acquired Southbay Industrial Center in San Diego for $9.78 million. Southbay (191,000 square feet), was constructed in 1989 and is 100 percent leased to three tenants.
David Hoster II, president and CEO of EastGroup, stated, "The acquisition of Southbay is an extension of our growing presence in the Southern California industrial market and complements our participation in the expanding warehouse and distribution demands driven by cross-border trade with Mexico."
EastGroup Properties is an equity real estate investment trust focused principally on the acquisition, ownership and selective development of industrial properties in major sunbelt markets throughout the United States. EastGroup's industrial portfolio currently includes 44 properties containing 9 million square feet of space.
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December 9, 1997
Koll Real Estate Group and its joint venture partner Citicorp North America have acquired 11.9 acres of Otay Mesa property. The pair will build on the site the San Diego Distribution Center, a 195,000-square-foot speculative manufacturing and distribution center.
The partnership, which purchased the property from Hamann Construction, doing business as Brown Field Business Park LP, for $1.85 million, expects to break ground Dec. 11. Completion of the $11 project is slated for spring 1998.
"Our decision to undertake this project is a direct result of the growing demand for modern, affordable industrial spaces close to both the Mexican border and key California and international distribution routes," says James Watson, president of Koll's western division.
The distribution center will feature flexible space divisible down to 20,000 square feet, 24 foot clear heights, dock-high and grade-level loading and a 120-foot truck turning radius. The project will be situated at the corner of Otay Mesa Road and Britannia Boulevard within the 130-acre Brown Field Business Park. CB Commercial is marketing the project for lease or sale to both single and multiple manufacturing, R&D and warehouse and distribution users.
Smith Consulting Architects is responsible for the design while Koll is serving as general contractor. Financing was arranged through Koll Capital of Newport Beach with NationsBank acting as project lender.
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Former public servant Michael stepner, who gave up government life this past summer, is installed next week as the new dean for the New School or Architecture at 1249 F St. in Downtown. Stepner held numerous planning and management positions during his 26 years as a city of San Diego employee.
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The West Beech Street office building Downtown has been sold for $6.35 million to GEM Investors Inc. Seller of the 82,134-square-foot structure at 555 West Beech was Westrust Financial Group Ltd.
The building is 77 percent leased. Representing both the buyers and sellers were Rob Hill, Steve Rowland and Chip Rome, all of John Burnham & Co.
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Superior Court Judge Arthur Jones is leaving the bench Dec. 23 to set up a private judging practice. Jones has served as a judge for 12 1/2 years. Of those years, four were spent in the presiding and assistant presiding departments.
Jones private practice opens Jan. 12 in the Downtown law offices of Chapin, Fleming & Winet.
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December 8, 1997
The San Diego Taxpayers Association tomorrow will officially throw its weight behind expansion of the San Diego Convention Center. The organization will talk to the press at 10 a.m. in the lobby of the Harbor Drive center. Representing the group will be its executive director, Scott Barnett. Also present to offer support will be Julie Meier Wright, president of the San Diego Regional Economic Development Corp.; Mary Grillo, executive board member of the San Diego-Imperial Counties Labor Council; and Reint Reinders, president of the San Diego Convention & Visitors Bureau.
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Interior water-supply piping and tubing made of chlorinated polyvinyl chloride will not be allowed on projects submitted for plan review in the city of San Diego and other jurisdictions in California beginning Jan. 1. Projects submitted before then can use the CPVC piping if the building permit is issued within 360 days of submittal.
The restriction is the result of 1995's Assembly Bill 151, now part of State Health and Safety Code. It bans use of CPVC pipe for interior water-supply piping of both hot and cold water beginning Jan 1.
The legislation lets local jurisdictions which allowed the pipe to continue to accept submittals for its use until the end of 1997. The city of San Diego, which did allow the pipe, will take in plans calling for its use until Dec. 31.
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ThermoTrex Corp.'s "talking" laser binoculars are featured in Popular Science magazine's "Best of What’s New" list. Each year, the editors select 100 winners after reviewing thousands of new products, technology developments, and scientific achievements.
The talking binoculars (an offshoot of our laser communications technology, lasercom) enable two people to conduct a covert conversation over a 5-kilometer range. Viewing another person through the binoculars establishes an optical laser link that allows voice transmission. The first pair of binoculars were built last year with a small amount of funding from the U.S. Army Space and Strategic Defense Command. Soldiers could use the binoculars to quickly communicate via lasers, which, unlike radio waves, cannot be easily intercepted.
"The talking binoculars — now part of our Trex Communications subsidiary — are another example of the insight and innovation that drives our R&D teams," says Gary Weinstein, chairman and CEO of ThermoTrex.
ThermoTrex Corp. manufactures general-purpose and specialized X-ray equipment as well as minimally invasive breast-biopsy systems. In addition, the company offers personal-care products and laser-based hair-removal services. ThermoTrex also conducts advanced-technology R&D and is currently developing a laser communication system, products for the medical imaging and avionics markets, and is pursuing industrial applications for its advanced- materials technology.
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December 5, 1997
Qualcomm Inc. has introduced the industry's smallest "cdmaOne" (Code Division Multiple Access) base stations, the QCell 519e and the QCell 508e, for cellular and PCS networks. The products address the needs of wireless service providers for compact, lightweight and cost-effective base station transceiver subsystems. The QCell 519e and 508e products will enable cdmaOne operators to increase capacity and coverage in a variety of environments, including buildings, subways, capacity hot spots, event venues, highways and rural areas.
"Qualcomm's new CDMA base stations can reduce capital and deployment costs by more than 50 percent compared to macro CDMA cell sites, while providing operators with additional flexibility in designing mobile and wireless local loop networks," says John Major, president, Wireless Infrastructure Products division. "Furthermore, the QCell 500 series base stations will dramatically shorten the deployment process due to the products' small size and wide range of installation options."
Entirely self-contained and environmentally designed for indoor or outdoor installations, the QCell products are ideal for wall or pole- mounted applications. The QCell 519e and 508e BTSs measure just 26 inches by 15 inches by 8 inches and weigh only 75 pounds, allowing field technicians to complete installation by simply connecting the antenna and backhaul interface and plugging the product in to any universal AC power supply. The products' deploy-anywhere design minimizes the costs operators usually face in obtaining zoning permits and acquiring and preparing sites.
The QCell 519e will be showcased at the CTIA '98 show in Atlanta, Georgia this February, and the first products are scheduled to ship in the second half of 1998.
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San Diego-based Laforza Automobiles Inc. says it has signed the second franchise agreement for its 1998 model Laforza sport utility vehicle. Under the terms, Ultimate Motor Works Inc. has secured the exclusive rights to market the 1998 model Laforza SUV in the designated Florida area. The Agreement requires that Ultimate Motor Works, Inc. commit to sell two Laforza automobiles per month during 1998 and to keep at least one vehicle in its showroom at all times. Additionally, they have agreed to provide a $100,000 revolving line of credit to purchase the vehicles.
Ultimate Motor Works, Inc., an upscale Lamborghini auto dealership, is located at 895 North County Road, 427, in Longwood, Florida.
The Laforza is an upscale, luxurious 4 X 4 automobile whose rolling chassis' are imported from the Italian manufacturer, Magnum Industriale.
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A San Diego firm, the Z Company, has debuted a Web site focused on a computer music trend called mp3. Essentially, the site — www.mp3.com — offers a new type of audio player and some selections that are said to be the equal in sound and quality to CDs. Unlike previous computer music files, those encoded in mp3 don’t require an excessive amount of space.
Visitors to the site can listen to samples of more than 3500 songs from the comfort of their homes and select individual songs they wish to buy. Unlike traditional music distribution, users can purchase individual songs without buying the whole CD. Plus MP3 songs are typically 1/5 the cost of the average CD song price. Once purchased, the songs are immediately available for downloading.
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UCSD's Venkat Rangan is among the 39 Association for Computing Machinery members set to be recognized May 10 for their achievements in computer science and information technology, as well as, their contributions to further the mission of the ACM.
These 39 individuals will be inducted during a special ceremony at the ACM's Policy '98* conference in Washington, D.C. These new inductees will join the 281 Fellows bringing the total to 320 ACM Fellows from around the world.
ACM Fellows serve as distinguished colleagues to whom the ACM and its members look toward for guidance and leadership as the world of information technology evolves.
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American Specialty Health Plans says it has received approval from the California Department of Corporations to offer an acupuncture and traditional Chinese herbal supplement benefit as part of its specialized health care service plan license. As a result, Mission Valley-based ASHP becomes the first California specialized health plan to receive approval for acupuncture from the California DOC. In 1994, the company, then called American Chiropractic Network Health Plan, set a milestone in the specialty HMO industry by becoming the state's first chiropractic HMO.
ASHP will provide the acupuncture benefit through a network of over 600 California-licensed acupuncturists servicing the entire state. Members may go to an ASHP participating provider on a direct-access basis, without a referral from their primary care physician. Enrollees also have "open-access" to any participating provider and are not required to predesignate an ASHP provider at open enrollment. They may also change participating providers at any time.\
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Energy Pacific, a joint venture of Pacific Enterprises and Enova Corp., has signed an agreement to acquire CES/Way International, Inc., the largest U.S. independent energy-service company.
Headquartered in Houston, CES/Way is a market leader in energy-service performance contracting, providing a comprehensive range of energy-efficiency services, including energy audits, engineering design, project management, construction and financing, and contract maintenance. The privately held company serves a broad range of clients, with a special emphasis on the federal government and institutional sectors.
Terms of the deal were not disclosed.
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December 4, 1997
Irvine Apartment Communities has bought two vacant parcels, one in the Golden Triangle and the other in Mission Valley. Both are planned for luxury apartment communities. The two development projects are designed for a total of 568 units. Together, they will represent an estimated investment, at completion, of $75 million.
"These two properties will broaden our presence in the highly attractive upper-end of the San Diego market," says William McFarland, company president and CEO. "What’s more, we’re accomplishing market growth by the means we know best - developing properties from the ground up," he said.
The first of the two newly acquired sites is a 4.2-acre parcel located on La Jolla Village Drive. IAC expects to invest $36 million over the next two years in the development of a 232-unit luxury apartment community at the location, which currently boasts the lowest vacancy rates and highest rental rates of any market in San Diego County. IAC purchased the development site from an unaffiliated party. Construction is scheduled to begin in mid-1998, with the first units available for occupancy during the first half of 1999.
The second acquired site is a 13.5-acre parcel located in the master-planned community of Stonecrest Village in the Mission Valley/Kearny Mesa region. IAC plans to invest $39 million over a two-year time frame in the development of a 336-unit luxury apartment property at the site. Construction on the Stonecrest property, which IAC is acquiring from California Pacific Homes, an affiliate of Donald Bren, IAC's chairman, is scheduled to begin in early 1998, with first occupancies in late 1998. The company expects to earn an unleveraged, first-year stabilized return of approximately 10 percent on the property.
Irvine Apartment Communities, a Southern California-based real estate investment trust, is the dominant owner and operator of apartment properties on the Irvine Ranch, the nation's largest master-planned community. At Sept. 30, IAC owned 55 apartment communities representing 14,991 completed rental units and 1,110 units under construction.
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The Home Depot announced yesterday plans to open 61 more warehouse-style home improvement centers in California through fiscal year 2000, bringing the total to more than 150 in the Golden State. The Los Angeles and San Diego metropolitan areas will see 33 new stores. No specific figures on San Diego were released.
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As Nicholas-Applegate's Emerging Countries Fund celebrates the completion of its third year of growth investing in companies in the world's developing countries, its ECF fund is rated the No. 1 emerging markets issue in that three-year period, according to Lipper Analytical Services Inc. and Morningstar Inc.
While the fund's benchmark index lost an annualized 6.4 percent in the period, Nicholas-Applegate's ECF Portfolio I rose an annualized 10.92 percent. The San Diego company’s Portfolios A and C have returned an annualized 10.62 percent and 9.19 percent, respectively, during the period, not including sales charges, and are the No. 2 and No. 3 funds in the emerging markets category, according to Lipper.
The Emerging Countries Fund has weathered this year’s volatility in emerging markets particularly well. Despite a decline in many Asian companies' stock prices stemming from widespread currency weakness, the fund returned 5.7 percent from Jan. 1 through Nov. 26. This compares favorably to the average emerging market fund, which lost 3.66 percent during the same period.
"We were basically out of Southeast Asia before the region's currency crisis began," notes Catherine Somhegyi, the firm's chief investment officer for Global Equities. "This is a stock picker's market, in which the only way to succeed is by selecting stocks for their ability to benefit from change."
Nicholas-Applegate is a money management firm with more than $33 billion invested on behalf of both individual and institutional investors. The firm invests for some of the country's premier institutions.
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December 3, 1997
Patriot American Hospitality Inc. is acquiring Interstate Hotels Co. for $37.50 per share in cash and paired stock, with the exchange ratio for the stock consideration subject to certain cap and collar mechanisms. When combined with Interstate's outstanding indebtedness of approximately $785 million, the total transaction value is approximately $2.1 billion.
In San Diego, Patriot will gain control of the Mission Valley Marriott.
Patriot also is acquiring, via a merger, Wyndham Hotel Corp. Wyndham operates two hotels in San Diego, the Wyndham Emerald Plaza on Broadway Downtown and the Wyndham Garden in Sorrento Mesa.
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In its December/January issue, P.O.V. Magazine, ranks San Diego 28th on its list of "The Best Cities To Start A Business." The publication looked at 75 cities, evaluating them on the following criteria:
- Quality of Life (25 percent)
"Coolness" (25 percent)
Educated Workforce (5 percent)
Taxes (10 percent)
Infrastructure (5 percent)
Success Ratio (15 percent)
Job Growth (15 percent)
Topping the list was Austin, Texas. San Diego was one spot behind New York City and one spot ahead of Charlotte, N.C. San Diego was the top ranked city on California, with San Francisco next at 41, Los Angeles at 48, San Jose at 59, Sacramento at 72, Oakland at 73 and Fresno bringing up the absolute rear at 75. No Orange County cities placed.
P.O.V. is targeted at young, mostly-single male professionals who think they are happening.
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Newport Beach-based Health Care Property Investors Inc. has acquired a managing- member interest in a limited-liability company (LLC) that owns five medical-office buildings located adjacent to Sharp Memorial, San Diego Children's and Mary Birch Woman's hospitals in San Diego. The purchase was part of a recent $120 million investment.
The company has invested directly or through joint ventures in 240 properties in 39 states.
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December 2, 1997
The California real estate market has roared back, the California Association of Realtors and Transamerica Intellitech's MetroScan service reports.
Closed escrow sales of existing, single-family detached homes in California totaled 610,930 in October at a seasonally-adjusted annualized rate, according to information collected by C.A.R. from more than 80 Multiple Listing Services statewide. Statewide home resale activity was up 5.8 percent from 577,320 resales a month ago and up 22.3 percent from the 499,470 sales pace recorded in October 1996.
The statewide sales figure represents what the total number of homes sold during 1997 would be if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. Year-to-date during the first ten months of 1997, California averaged 546,730 homes sold, the highest of any ten-month period since 1988, when it was 550,700.
The median price of an existing, single-family detached home in California during October 1997 climbed to $192,070, a 10.1 percent rise over the $174,450 median for October 1996, C.A.R. reported.
C.A.R., in conjunction with Transamerica Intellitech's MetroScan(R) service, reported that nearly two-thirds of California cities and communities showed an increase in their respective median home prices from a year ago.
"Looking at the very strong numbers, both in terms of sales and home prices, it’s clear that the California housing market is not only back, it’s booming," says C.A.R. President Tim Corliss. "I hereby declare the California real estate bust officially over.
"Year-to-date, more homes have sold this year than at any 10-month period since the halcyon days of 1988," Corliss says. "The October sales figure is the highest since January 1989, when 619,790 homes were sold."
In San Diego, the median price for a home sold in October was $186,060. Unchanged from the previous month, the price was nevertheless 7.8 percent higher than in October of 1996. Sales activity in October was up 8.7 percent from the previous month and 25.9 percent from October 1996.
The five California cities and communities with the largest annual increase in their respective median home prices during October 1997 compared to October a year ago were: Los Altos Hills; Sausalito; South Pasadena; La Jolla; and Solana Beach.
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Ford Motor Co. has reached an agreement in principle for a modified Ford Retail Network with Lincoln-Mercury dealers in the South County area of San Diego.
The new approach to retailing cars and trucks includes the establishment of a new entity or partnership that, in San Diego, includes four Lincoln-Mercury dealerships in the South County area that were purchased in recent months by Ford.
Ford's FRN concept involves fewer, larger full-service outlets supplemented by neighborhood service centers providing convenient, competitively-priced service to customers.
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The San Diego Unified Port District today is scheduled to consider transferring the lease for the Le Meridien Hotel on Coronado to the property's new owners, HMH Properties Inc., a wholly-owned subsidiary of Host/Marriott Hospitality Inc.
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December 1, 1997
Dan Greenblat, a noted executive political aide whose clients have included former Rep. Bill Lowery and former Sheriff Jim Roache, has formed Viewpoint America, a market research, opinion polling and public affairs firm. Immediately before starting the firm, Greenblat was a consultant and managed the custom research division of Luth Research Inc. His previous positions also have included serving as a senior account executive at Stoorza, Ziegus & Metzger and as director of annual giving for the San Diego chapter of the American Cancer Society. His new offices are at 4182 Pallon Court. Call him at 569-5275 to say hi.
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Directors of the San Diego County Bar Association are urging members to make full voluntary payment of their dues to the State Bar. The action came after Gov. Wilson vetoed a law authorizing collection of the fee. Under existing statutes, the bar can collect a mandatory $77 from each active member and $50 for each inactive member. Both fees are significantly less than the proposed fee of $458 which the bar says it needs to maintain operations and keep its lawyer discipline system current with new complaints. A State Bar official says the organization may stop receiving new complaints by Feb. 1.
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Parking meter debit cards, in $10 and $45 increments, are being sold at the city's office of Parking Management, 1255 Fifth Ave. When the card is inserted in a meter, it adds six-minute increments until removed. A nice added feature: If more time was paid for than was needed, the card-holder can insert the card again for a credit.
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Terri's Consign & Design Furnishings, the 11th in a chain of consignment super stores, has opened at 185 Hancock St., next to the Mission Brewery. The business was developed by Terri Bowerstock of Mesa, Ariz., who says she started it because, "I could not fill out a job application. I have dyslexia."The stores offer "gently used and new factory close-out furniture."
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