Daily Business Report — July 16, 2010
Downtown Homeless Center Plan Advances
A proposal to convert the 14-story World Trade Center Building at 1250 Sixth Ave. into a permanent homeless center Downtown has received the endorsement of the City Council’s Land Use & Housing Committee and now heads to the City Council for a decision.
The committee recommends that the council authorize the city Redevelopment Agency to enter into exclusive negotiations with a developer for the development and operation of the “one-stop” homeless center. A citizens selection committee has recommended the conversion be done by Connections Housing, a partnership comprised of Los Angeles-based People Assisting the Homeless (PATH); a local developer, Affirmed Housing Group; and Family Health Centers of San Diego.
The proposal calls for converting the city-owned building into a facility that would house up to 225 homeless people and provide comprehensive rehabilitation services ranging from medical services to substance abuse treatment.
City Attorney Jan Goldsmith said the project could help the city reach a legal settlement to lift a 2006 court injunction preventing police from issuing illegal lodging tickets to homeless people for sleeping on sidewalks, doorways and vacant lots.
Petco Park Development Exceeds City’s Economic Expectations
The development of Petco Park exceeded all of the city’s expectations and projections on job creation, sales tax revenue, private investment, increased property values and other economic issues, according to a study commissioned by the San Diego Regional Economic Development Corp. (EDC). The study by Conventions, Sports & Leisure International (CSL) proves that the development of the park — home to the Padres — exceeded all of the expectations and projections with regards to job creation, sales tax revenue, private investment, increased property values, hotel rooms, commercial space, housing units, and property taxes.
In 1998, prior to voter approval of plans for Petco Park, 70 percent of the land in the Ballpark District of Downtown was vacant or used for outdoor parking/storage, and the entire East Village generated $2 million in property tax revenue. At the end of last year, the study said, 3,585 residential units, 957 hotel rooms and 610,000 square feet of commercial space had been constructed and opened surrounding the park with a total estimated market value of $1.79 billion.
Today, $1.3 billion in new direct spending has been generated in the city of San Diego, resulting in nearly $2 billion in total output, 19,200 jobs and $780 million in payroll since the start of construction of the ballpark. The study said construction of Petco Park and ancillary development has led to a direct payback in terms of tax revenues to the city and Centre City Development Corp. The City and CCDC have leveraged their investment into over $1.58 billion in private investment, or $5.25 for each $1 of public investment.
“Petco Park is a successful public-private partnership that has really delivered on its promise to be ‘more than a ballpark.’ It has turned out to be much more than a ballpark,” said Julie Meier Wright, president and CEO of EDC.
Southwest Regional Maintenance Center Changes Command
Navy Capt. Michael J. Wiegand will take command of the Southwest Regional Maintenance Center at a change of command ceremony July 22 at Mariner’s Park at Naval Base San Diego. He will relieve Capt. Gerard J. Reina. Guest speaker at the 10 a.m. ceremony will be Vice Adm. Kevin M. McCoy, commander of the Naval Sea Systems Command.
Wiegand is a native of South Bend, Ind. He graduated from Michigan State University with a bachelor of science degree in agricultural engineering. He received his commission from the Officer Candidate School in Newport, R.I. in1985 and in 1991 he received a master of science degree in mechanical engineering from the Naval Postgraduate School in Monterey.
Wiegand comes to San Diego from his previous assignment as assistant chief of staff for maintenance and engineering at Commander, Naval Surface Force, U.S. Pacific Fleet.
San Diego County Credit Union Names New President/CEO
Teresa A. Halleck has been named president and CEO of San Diego County Credit Union, succeeding Tum Vongsawad, who has filled the post on an interim basis since February. Halleck will assume her new job on Aug. 16.
Halleck was president and CEO of The Golden 1 Credit Union in Sacramento for nearly eight years. She comes to SDCCU with over 20 years of financial institutions industry experience. During her tenure at Golden 1, the credit union’s assets grew from $4.2 to $7.2 billion and branches grew from 65 to 84. Halleck currently serves as a board and executive committee member of the California Credit Union League and other industry councils and advisory boards. She holds a bachelor’s degree in accounting from the University of Maryland at College Park and a master’s degree in financial management from The Johns Hopkins University. Vongsawad will return to his previous position as the credit union’s chief operating officer.
Kathleen Pacurar Heads San Diego Hospice
Kathleen Pacurar, chief development officer for the San Diego Hospice and The Institute for Palliative Medicine, has been approinted the new president and CEO of the organization. She succeeds Jan Cetti, who recently retired after 14 years of service with the nonprofit organization. In her new role, Pacurar will oversee the county’s original hospice provider, established in 1977, with more than 800 staff members and 700 volunteers. She has more than two decades of experience in community relations and fundraising.
Pacurar served as executive director of UCSD Health Sciences Development, supporting programs such as the Shiley Eye Center expansion, the Moores Cancer Center development and the creation of the Sulpizio Cardiovascular Center. She has also worked with the American Foundation for AIDS Research, the Catholic Diocese of San Diego and Scripps Mercy Hospital.
Ron Marx Takes Senior Vice President Role at Marsh
Ron Marx has been appointed a senior vice president of the San Diego office of Marsh, an insurance broker and risk adviser. Marx has more than 30 years of risk management and insurance experience. He joins from Willis, where he led the company’s technology and risk management practices. He previously was a corporate risk manager at Cisco Systems and Gateway Computers and a broker in the San Francisco Bay Area and San Diego. He also spent a decade working at Industrial Indemnity and Wausau Insurance Cos. in corporate managerial roles in loss control, underwriting and regulatory compliance. Marsh is a unit of Marsh & McLennan Cos.
Vinculum Communications Hires VP of Marketing
Reb L. Risty has joined Vinculum Communications Inc. as vice president of marketing. Risty has managed projects for the World Trade Center San Diego, San Diego County Regional Airport Authority, Port of San Diego, the San Diego International Auto Show and Qualcomm Inc., among others. She also serves on the Asian Business Association board of directors and is a member of the American Marketing Association of San Diego. Risty holds a master’s degree in marketing management from San Diego State and a bachelor’s degree from Virginia Polytechnic Institute and State University.
Voices for Children Appoints VP of Philanthropy
Ann Farrell, a 34-year fundraising veteran, has been named vice president of philanthropy at Voices For Children, a nonprofit organization. Farrell was most recently senior advancement officer for the Museum of Contemporary Art San Diego, where she had worked for 24 years. She taught at UCLA Extension and the USC Museum Studies program and is an adjunct faculty member at USD. Voices for Children provides services to foster children in San Diego.
Receivers Forum Holds Networking Event
The San Diego Receivers Forum will host a casual Meet and Greet networking event from 5:30 to 8 p.m. on Aug. 5 at On the Border restaurant, 1770 Camino de la Reina, San Diego. Prospective members are invited to discuss receivership issues and get to know chapter members. The field of receivership involves people from many professions: lawyers, accountants, property managers, commercial real estate brokers, title insurance, escrow, construction services and valuation experts. Advance tickets, available until July 30, are $10 for members and $15 for nonmembers. Tickets at the event are $10 more. Register at sdreceivers.org. For information, call (949) 497-3673, Ext. 620.
Downtown Retail Market Boosted by New Restaurants
Downtown San Diego’s retail market, while still hobbled by negative absorption, is showing signs of stabilizing, particularly with the infusion of new restaurants offering specialty or trendy concepts. “Despite the fact that some locations have closed, such as Bondi, Design Within Reach and Gracie Boutique, we have quickly found quality replacements for these space with Donovan’s Martini Bar, Bub’s at the Ballpark and a café,” said Corinna Gattasso of Cushman & Wakefield.
Other retailers and restaurants that recently opened their doors Downtown include Panera Bread, Spicy Pickle, Wine Steals, Proper, a gastro pub, Quality Social, Fluxx, The Melting Pot, Nutrition Zone, Noble Experiment, and French Twist.
Many more have signed leases and will open later in the year. These include San Diego Beer Co., Giovanni’s Trattoria, Crab Hut, Albert’s Fresh Mex, Brian Malarkey’s Searsucker restaurant, Hodad’s, 6th Avenue Gourmet Market, The Wine Loft and Tommy Pastrami.
Jonathan Segal’s new development, The Q, at 750 W. Fir St., has also attracted innovative and trendy tenants including Bencotto Italian Kitchen, Red Velvet, a wine bar and Influx, a café.
“Restaurants with attractive price points, particularly under $20 per entrée, are succeeding,” Gattasso said. “Cucina Urbana and Proper, a gastro pub, are a terrific examples of this, and other restaurants are similarly refining their concepts. Hamburger-themed concepts are also tremendously popular now with Five Guys, Burger Lounge and Smashburger all expanding around the county.”
A mid-year report by Cushman & Wakefield’s Urban Property Group shows year-to-date direct absorption Downtown at negative 46,212 square feet, an improvement over the same period in 2009 when the market recorded negative activity totaling 199,784 square feet. Current vacancy of 11.9 percent is nearly on par with the 11.6 percent vacancy rate a year ago. “We expect that vacancy will gradually decrease, likely reaching single-digits by the end of the year,” Gattasso said. “Driving this return to stability is a growing sense of urgency among tenants who recognize the exceptional value currently in the market.
The Cushman & Wakefield report shows that the Downtown core, which is bound by Broadway, Eighth, A and Union streets, led Downtown retail activity with 34,300 square feet of positive absorption. Cortez Hill followed with 20,843 square feet. Vacancy rates for the two areas were 14.2 percent and 9.4 percent, respectively.
All other Downtown submarkets reported negative absorption: East Village with a negative 58,209 square feet and 23.6 percent vacancy; Little Italy with negative 20,069 square feet and 9 percent vacancy; Gaslamp with a negative 9,940 square feet and 5.6 percent vacancy; Marina with negative 8,361 square feet and 16.2 percent vacancy; Horton with 2,989 square feet and 5.4 percent vacancy; and Columbia with negative 1,787 square feet and 7.6 percent vacancy.
Rental rates have held steady in the main Fifth Avenue and Broadway corridors at $3-$3.50-per-square-foot NNN. The perimeter areas of Downtown are currently averaging $1.75-$2.25-per-square-foot NNN.
“Tenants are recognizing that the softer lease rates will not last forever and are signing on when it make sense for their businesses which in many cases is now,” said David Maxwell, also with the Urban Property Group. “They are no longer waiting on the sidelines for the ‘bottom.’”
Maxwell added that stronger downtown residential condominium rentals and sales – the latter of which is being spurred by lower prices – is contributing to the uptick in demand for restaurant and retail space. “The residential units that were vacant one to two years ago are being absorbed and these residents are looking for retail services,” he said.
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