Daily Business Report — Jan. 5, 2012
Developer Jonathan Segal Fights San Diego’s Power Structure
in Effort to Build Big Apartment Project Near Solar Turbines Plant
Longtime San Diego developer Jonathan Segal, who wants to build a 232-unit apartment and retail project close to Solar Turbine’s property on Pacific Highway, finds himself aligned against a whole phalanx of local elected officials and union leaders who claim his project could cause the company to move its manufacturing facility and its 3,800 jobs out of San Diego.
Reacting this morning to a large rally scheduled for Friday in support of Solar Turbines’ efforts to kill the project, Segal described company officials as “big bullies” and said he will continue with the permitting process for his Fat City Lofts project, which he is promoting in partnership with GLJ Partners. The project is scheduled to go before the board of the Centre City Development Corp. on Jan. 25.
“They have been unpleasant to deal with,” said Segal, who has developed 19 buildings in San Diego. “And They’re not going anywhere.”
The rally to generate support for the company, a subsidiary of Caterpillar Inc., has been scheduled for 11:30 a.m. in the parking lot of Solar Turbines. Officials scheduled to take part represent a big cross-section of San Diego’s political power structure. They include county Supervisor Greg Cox, City Council Pro Tem Kevin Faulconer, Port Commission Chairman Scott Peters, who are to lead the rally, and appearances by state Sen. Christine Kehoe, Assemblyman Nathan Fletcher, District Attorney Bonnie Dumanis, Councilmembers Carl DeMaio and Lorie Zapf. Also attending will be representatives from the San Diego and Imperial Counties Labor Council, the San Diego Port Tenants Association, San Diego Regional Chamber of Commerce, United Way of San Diego County, San Diego Regional Economic Development Corp., Industrial Environmental Association, Working Waterfront Group, Biocom and Connect.
The large rally apparently was scheduled to overwhelm Segal and his partners, who have filed plans for a 232-residence apartment building with ocean and cityscape views, recreation facilities, subterranean parking and nearly 5,000 square feet of retail. The developers said the project incorporates and preserves part of the 1941 landmark Top’s Night Club, the predecessor of Fat City, and has won the endorsement of the Save Our Heritage Organisation.
“Fat City Lofts will connect Little Italy to the North Embarcadero and will be a catalyst in the transformation of what currently is a dead zone along Pacific Highway in North Little Italy,” said Garth Erdossy, president of GLJ Partners, late last year.
“I’m the last guy on the planet who wants to get in the way of the company,” said Segal this morning. “Our experts tell us that Solar (Turbines) has no issues whatever.”
According to a report announcing Friday’s rally, the project would be located only 100 feet from Solar Turbines’ manufacturing facility. “The company,” it said, “could face new regulations and additional permitting processes that would threaten its ability to remain globally competitive and cause it to move its manufacturing business and jobs out of the region.”
Segal has maintained that the project complies with existing zoning and that it can co-exist with Solar Turbines. The developers have agreed that all Solar Turbines operations should continue and will put in writing that they will not challenge any permit renewals from the 48 regulators Solar Turbines must deal with. Apartment renters will be required to sign the same agreement. Studies that the developers commissioned, they said, show that Solar Turbines’ operations will have no air quality effect on the apartment dwellers and that the presence of apartments will have no effect on any Solar permit.
Silvergate Bank Raises $13.8 Million in Private Placement
Silvergate Capital Corp., the parent firm of Silvergate Bank, announced completion of a common stock private placement that raised $13.8 million in gross proceeds. The placement included an initial closing in March 2011 priced at the company’s approximate tangible per share book value at that time, and a final closing in December 2011 after receiving clearances required by investors and regulators. Net proceeds from this placement have been used to provide additional working capital for Silvergate and a capital contribution to Silvergate Bank to support its business plan and pursue strategic opportunities. The company said Silvergate’s leverage capital ratio increased to over 16 percent and its total risk based capital ratio increased to over 21 percent, both ratios being significantly higher than required to qualify as “well capitalized” under federal banking regulations. “Unlike the many banks that have been forced to raise capital on very dilutive terms, we are pleased to have achieved more favorable pricing for this placement,” stated Dennis S. Frank, chairman and CEO.
Upcoming SCORE San Diego Workshops:
• Jan. 6 – Insurance – What You Need to Know – 9 a.m. to noon at SCORE Entrepreneur Center (550 West C St., #550, San Diego 92101; pre-paid registration $49, $59 at the door).
• Jan. 7 – Introduction to Starting Your Own Business – 9 a.m. to 4 p.m. at National University – Kearney Mesa (9388 Lightwave Ave., San Diego 92123; pre-paid registration $69, $79 at the door).
• Jan. 7 – Internet Marketing 101 – Use the Internet to Successfully Market Your Business – 9 a.m. to 3 p.m. at National University – Carlsbad (705 Palomar Airport Road, Carlsbad 92011; pre-paid registration $69, $79 at the door).
• Jan. 9 – Restaurant 101 – 9 a.m. to 1 p.m. at National University – Kearney Mesa (9388 Lightwave Ave., San Diego 92123; pre-paid registration $49, $59 at the door).
• Jan. 10 – Tax Considerations for Small Business – 9:30 to 11:30 a.m. at SCORE Entrepreneur Center (550 West C St., #550, San Diego, 92101; pre-paid registration $29, $39 at the door).
The Daily Business Report is produced by REP Publishing Inc., publisher of SD METRO, the North Park News and the West Coast Craftsman. Contact: Manny Cruz (619) 287-1865.