Daily Business Report-June 5, 2013
City Attorney Jan Goldsmith
City of San Diego’s Legal Settlements,
Related Costs at Eight-Year Low
The city of San Diego’s costs for court settlements, judgments, outside counsel and related legal expenses have dropped to their lowest level in at least eight years, City Attorney Jan Goldsmith’s office said Tuesday. In a release, Goldsmith said the city paid out $18.5 million in fiscal year 2012. Costs for settlements, judgments and related legal expenses spiked in 2007 at $31.8 million, he said.
The city has saved an average of more than $5 million per year (for these costs) during Goldsmith’s tenure, compared to that of his predecessor, according to the release. The average annual amount the city has paid since Goldsmith was elected in December 2008 is $22.9 million. That figure was $28.2 million per year under Mike Aguirre.
“My first priority when I took office in 2008 was to restore stability to the City Attorney’s office and rein in runaway legal costs,” Goldsmith said. “One of the main components of that plan was to greatly reduce the practice of farming out litigation to outside counsel.”
Meeting on Proposed Jamul Casino Expected to Draw Large Crowd
A large crowd is expected tonight at a public meeting in Jamul to discuss a controversial plan by the Jamul Indian Village to construct a three-story, $360 million casino along rural state Route 94. County Supervisor Dianne Jacob, who opposes the plan, community leaders and Jamul Indian Village representatives are to attend the meeting at 7 p.m. in the Jamul Primary School, 14567 Lyons Valley Road. Jamul Indian Village is partnering with Penn National Gaming Inc. to develop a 200,000-square-foot casino with at least 1,700 slot machines and 50 table games, restaurants, bars, lounges and a parking structure on a six-acre site. Jacob and other opponents say the casino would create a traffic nightmre, heighten fire risks, strain public services and resources and destroy Jamul’s rural character. The Jamul Indian tribe said the casino would add jobs and benefit the local economy.
Judge Upholds Landmark 2003 Colorado River Accord
Decision secures water supplies for San Diego County and California
Sacramento Superior Court Judge Lloyd G. Connelly on Tuesday validated the 2003 Colorado River Quantification Settlement Agreement and rejected all of the remaining legal challenges to the landmark accord. The ruling secures a key component of water supply for the San Diego County Water Authority, which will receive 180,000 acre-feet of water this year as result of the QSA and related projects. For California, Connelly’s decision provides certainty about access to its basic annual apportionment of 4.4 million acre-feet of water from the Colorado River. “The Colorado River Quantification Settlement Agreement and its cornerstone water transfer agreements mean long-term water security for our region’s $188 billion economy and the quality of life of 3.1 million residents,” said Thomas Worham, chair of the Water Authority board of directors.
College Degrees Pay Off in California Despite Increasing Student Debt
Student debt amounts are on the rise across the country. A new report from the Public Policy Institute of California points to the lowest community college fees in the country and relatively strong state financial aid as two factors keeping debt loads lower for California students, KPBS reports. In California, a higher proportion of students attend public colleges and fewer take out loans compared to the national average. The report shows that those who do borrow finish college with a median debt load of $15,000, compared to $17,100 nationally. The higher wages and more stable employment that came with a college degree outweighed the burden of repaying loans for most California students, according to Hans Johnson, a research fellow with the institute. Borrowing to attend for-profit private colleges may not pay off though.
“It is a concern,” Johnson said, “that students who are the most vulnerable in terms of not being able to succeed in college and therefore having the worst labor market outcomes often end up at colleges that have some of the highest loan amounts.”
BioMed Realty Completes Merger with Wexford Science & Technology
San Diego-based BioMed Realty has completed its previously announced merger with Baltimore’s Wexford Science & Technology. The Wexford Science & Technology division will operate as a wholly-owned subsidiary of BioMed Realty. “The Wexford team developed the highly successful model for university development and brings a wealth of expertiese, creativity and relationships in meeting the real estate needs of the academic and medical research communities,” said Alan Gold, chairman and CEO of BioMed Realty.
County Keeps High Bond Ratings
Standard & Poor’s and Fitch affirmed the county’s highest ratings of AAA for general credit worthiness. Moody’s had previously affirmed the county’s second highest rating of Aa1 in February. All three ratings agencies assigned the highest possible ratings for the county’s short term borrowing as well. “These ratings affirm Wall Street’s belief that the county has weathered the financial storms of recent years and is in strong shape to meet the needs of the future,” said Supervisor Greg Cox, chairman of the Board of Supervisors.
The credit rating agencies forecast a stable outlook for the county due to conservative budgeting, strong management and the region’s sizeable, deep and diverse economy. They also cited the county’s low debt level and healthy financial reserves.
Real Estate Sales
San Diego Marriott Courtyard
The San Diego Marriott Courtyard in Downtown has been sold for $71.1 million to Hersha Hospitality Trust based in Philadelphia. The The hotel has 245 rooms. It once housed the San Diego Savings and Trust Bank. The seller was Wheelock Street Capital, which purchased the hotel for $61.1 million in 2011. Hersha Hospitality Trust is a real estate investment trust that owns interest in 64 hotels with a combined total of 9,307 rooms.
Encinitas Rental Property
SC Jones Construction Inc. purchased a 1,848-square-foot coastal duplex rental property consisting of two two-bedroom units with two-car garages located at 1095-1099 Regal Road in Encinitas from Harrison Properties for $650,000. Ray Adams of Cassidy Turley San Diego represented the seller. Polly Rogers of Prudential California Realty represented the buyer.
Alpine Office Building
Corder Family Emeryville Properties LP purchased a 4,977-square-foot office building located at 2605 Alpine Blvd. in Alpine from Melba 16, LLC, for $606,000. Brian Jinings of Cassidy Turley San Diego represented the buyer. Ronald Brookshire of The Property Place Inc., represented the seller.
LUX Education Pavilion Groundbreaking
Del Mar-based Anne Sneed Architectural Interiors and LUX Art Institute celebrated the groundbreaking of the new LUX education pavilion. Anne Sneed is remodeling and reimaging the existing building adjacent to the main LUX Art Institute at 1550 S. El Camino Real in Encinitas. The 6,700-square-foot pavilion willinclude three large art studios, a gallery and community gathering space, a woodshop, a digital lounge, staff offices and a spacious backyard landscaped for events, outdoor art classes and picnics. Construction of the pavilion is expected to be completed in late 2013. Landscaping will be by Schmidt Design Group Inc.
New Start-Up In-Home Care Company Opens in San Diego
24Hr HomeCare, a company that provides medical in-home care services, has opened its newest full-service location in La Jolla. The address is 4350 Executive Drive, Suite 205. The company said it offers a variety of customizable services and programs that enable seniors and the disabled to continue full, active and healthy lifestyles. The La Jolla office is the sixth new office established in California. Since 2008, the company has grown from $1 million in revenue and one location to more than $18 million in revenue and six locations.
Stretch of El Cajon Boulevard to be Renamed ‘Little Saigon’
The San Diego City Council voted unanimously Tuesday to designate a six-block stretch of El Cajon Boulevard in San Diego as the Little Saigon Cultural and Commercial District. The stretch of roadway between Euclid and Highland Avenues is home to about 120 businesses owned by residents of Vietnamese descent, community boosters told the council members.
Councilwoman Marti Emerald said the designation was “vitally important” to the diverse community. “We have an opportunity to create a remarkable area of the city, one that will attract people from throughout San Diego and the region, and throughout California, to come and celebrate a beautiful part of our history, our culture and, again, our diversity,” said Emerald, who represents the area. Council President Todd Gloria said Little Saigon would be similar to Little Italy, which he called “a huge success.” Little Italy frequently stages events that attracts thousands of San Diegans.
Plans for the area include sprucing up storefronts with a unifying architectural theme, along with common signs and decorations, which supporters hope will lead to increased investment and a reduction in crime and graffiti. The 40,000 Vietnamese residents in San Diego represent the area’s second-largest Asian population behind Filipinos.
City Council Places New Caps on Party Contributions in San Diego Elections
City News Service —The San Diego City Council gave initial approval Tuesday to caps on the amount of money political parties can give to candidates and causes in San Diego city elections, but left a loophole open for the election cycle that just started. The lid for citywide campaigns, such as for mayor or city attorney, would be $20,000 if adopted June 18 on second reading and subsequently signed into law by Mayor Bob Filner. For district races, like for City Council, the cap limit would be $10,000.
Councilwoman Marti Emerald said the issue is very simple. San Diego’s old $1,000 lid was struck down by a judge as too restrictive, so there were no limits on party giving for the 2012 elections.
The loophole for political parties is that the current no-limits situation will remain in effect until the new caps become law, which according to council President Todd Gloria would not be until July 20 at the earliest. Since the new election cycle leading to the June 2014 primary started Monday, political parties will be able to — in the words of Councilman Scott Sherman — “dump a bunch of money” on candidates who have already declared their intention to run for office.
Even-numbered City Council districts are up for election next year. Among those who have thrown their hats into the ring are Councilwoman Lorie Zapf, who hopes to switch from District 6 to District 2, and Chris Cate, the interim executive director of the San Diego County Taxpayers Association.
Cate is seeking to succeed Zapf, who recused herself from voting on the issue. Newly installed Councilwoman Myrtle Cole, who will also be up for re-election, took part in the vote.
Mad Catz Interactive Names Chief Financial Officer
Mad Catz Interactive Inc. in San Diego has appointed Karen K. McGinnis, 46, as chief financial officer, effective June 10. McGinnis replaces Allyson Evans, who recently announced her intention to resign. McGinnis has more than 20 years of accounting, financial reporting and other financial experience at multi-national companies. She previously was vice president, corporate controller and chief accounting officer of Cymer Inc. McGinnis also served as chief accounting officer at Insight Enterprises Inc.
Maxwell Technologies Appoints Chief Operating Officer
Maxwell Technologies Inc. has appointed John J. Warwick chief operating officer, effective June 17, with overall responsibility for the San Diego company’s operations in the U.S., Europe and Asia. Prior to joining Maxwell, Warwick was senior vice president of operations for Emulex, a leader in network connectivity, monitoring and management, from August 2006 to June 2013.
Warwick also held executive positions with Lantronix Inc., PRTM and Western Digital Corp.
Capitol Update: Enterprise Zones
By Brendan Foote, senior vp of Hughes Marino Tax Credit Services
The California Enterprise Zone Program, which has directly contributed to the creation and retention of hundreds of thousands of jobs throughout the state, is coming under fire by lawmakers in Sacramento. The program, which has been around for nearly three decades, has secured billions in investments into our towns and cities, and has helped attract and retain big business in the state. Year after year, the program has buoyed dozens of distressed business communities, offering them solutions for economic growth. It has helped the “hard to hire” re-enter the workforce, and it is putting our returning veterans back to work. So why, in a time when we need this program the most, are lawmakers actively trying to dismantle it? There are currently three “moving pieces” surrounding the fate of this job-creation program. First, Governor Brown’s May (Budget) Revise, second is Senator Hill’s (D) SB 434 and third, Assemblyman Manny Perez’s (D) AB 28. For the full story, visit: www.hughesmarino.com/articles/capitol-update-enterprise-zones.