Daily Business Report-June 11, 2014
San Diego City Council President Todd Gloria announcing the minimum wage proposal.
Study Says Minimum Wage Proposal
For San Diego Will Benefit Women
The proposed citywide minimum wage and earned sick time policy being considered by the San Diego City Council will mean one third of women and one quarter of men employed in the city will get raises, according to an analysis released Tuesday by the Center on Policy Initiatives.
The policy, which is up for a committee vote today, will particularly benefit women because they are overrepresented in low-wage jobs in restaurants, hotels, retail stores and other service businesses, the data show. Among all employees working full-time, year-round in San Diego, women earn on average 80 cents for every dollar paid to men, CPI’s analysis found.
When the policy is fully implemented in 2017, more than 115,000 women and 105,000 men, who make at or near minimum wage, will get raises averaging $3,000 a year.
“More than half — 52 percent — of San Diegans who would earn a raise from this proposal are women, although women make up just 44 percent of the workforce,” said CPI Executive Director Clare Crawford. “Among women working part-time, almost two thirds would get a raise.”
The wage increases will put a total of $660 million into the hands of low-income families, enabling them to pay their bills and buy goods and services in the community.
“Not only is it the right thing to do, it’s good for our local economy,” said Councilmember Marti Emerald. She joined CPI in highlighting the impact on women at a press conference.
The proposal by San Diego City Council President Todd Gloria would set a minimum wage of $13.09 throughout the city and require that employees be able to earn up to five paid sick days a year.
Research has shown that women more often than men take time off work to stay home with sick children, which further lowers their income when they lack paid sick time, said CPI Research Director Peter Brownell.
Among all San Diego households headed by employed women, 35 percent have total incomes below the Self-Sufficiency Standard for the region, which includes basic cost of living without assistance. Households headed by employed women of color have even lower average incomes.
San Diego Apartment Vacancies at 10-Year Low
It is getting tougher to find a home for rent in San Diego County as the vacancy rate is at its lowest point in more than a decade.
The San Diego County Apartment Association says rental units are in high demand.
The countywide vacancy rate has slipped to 2.8 percent in the spring. That’s down from 4.5 percent during the same time last year.
The association’s Molly Kirkland says more than half the people who live in San Diego live in rental housing.
“Rentals are in more demand because you have younger generations looking for amenities, being closer to urban cores or transit, and even the mobility a rental might offer,” Kirkland said.
The low vacancy rate did not lead to higher rents, however. The countywide average rent fell 5 percent from $1,330 a month to $1,260 during the past year, according to Kirkland.
The association said the county has more than 300,000 rental units and more are being built.
San Diego to Get New ‘Smart’ Parking Meters
The San Diego City Council has approved a cooperative procurement contract for the purchase of new single-space parking meters from IPS Group Inc., a San Diego-based company. “Smart meters will finally bring San Diego’s parking management infrastructure into the 21st century,” said Council President Gloria. “With more user-friendly parking meters, customers will be able to more easily patronize the small businesses throughout Downtown, Uptown, and Mid-City, contributing to the economic development of our city.”
Under the contract, approximately 97 percent of San Diego’s parking meters will be replaced. The new technology will allow customers to pay for parking with credit cards. The new meters will also allow the city to collect better utilization data to inform and guide Parking Meter Operations and Community Parking District strategies and policies. Installation of the new equipment could start by this fall. The smart meters will use the city’s existing meter poles and housings.
The total not-to-exceed amount for the five year agreement with IPS is $8,171,007, which is made up of both one-time costs totaling $3,857,989 that will be funded by the Community Parking District and city CPD Administration funds in fiscal year 2015 and on-going costs totaling $4,313,018 that will be covered by meter revenue throughout the five-year period, which ends Nov. 12, 2018.
NASSCO Awarded $64 Million Navy Contract
NASSCO has been awarded $64 million for a U.S. Navy contract modification to buy materials for a fourth Mobile Landing Platform (MLP) ship. The U.S. Defense Department previously granted General Dynamics $1.4 billion to develop the first three ships. The company is also currently competing for a multi-billion contract to build 17 next-generation oiler ships for the Navy.
North San Diego Business Chamber
Sponsoring a Group Trip to Spain
The North San Diego Business Chamber will be taking a group to Spain and Costa Del Sol from Nov. 3-11 this year. A travel preview will be held June 19 from 5:30 to 7 p.m. at National University, 16875 W. Bernardo Drive, in Rancho Bernardo.
Departing from San Diego, travelers will first arrive in Costa del Sol on Spain’s Mediterranean coastline. Other cities on the itinerary will be Costa del Sol/Seville, Gibraltar and Ronda with optional tours to Tangier, Mijas, Granada/Alhambra. Also offered is a Madrid Extension tour to Malaga/Madrid which will add an additional two days.
Tour price is $2,499 per person double occupancy and includes roundtrip airfare from San Diego, first class hotel accommodations, 14 meals consisting of seven buffet breakfasts and seven dinners, professional tour escort, baggage handling and transfers, local taxes and service charges, optional Madrid extension tour is also available. Final payment for this trip will be due by Aug. 4, 2014.
For more information, contact Sandy Schmitt at (858) 487-1767, Ext. 10, or email her at email@example.com. You may also visit the website at www.sdbusinesschamber.com.
Researchers Find Diabetes-Related Trigger
For the first time ever, researchers at UC San Diego are able to describe the sequence of early cellular responses to a high-fat diet in mice. This type of sequence often results in obesity-induced insulin resistance and diabetes. Researchers also suggest potential molecular targets for preventing or reversing the process. Being able to trace the steps of how diabetes is diagnosed is a huge breakthrough for developing cures for the more than 25 million people affected by the disease. The findings were released in the June 5 issue of Cell.
Arrowhead Insurance HQ Getting Major Improvements
One of the largest tenant improvement projects in Downtown San Diego is under way at Arrowhead Insurance’s new 88,000-square-foot corporate offices at 701 B St. Dempsey Construction and ID Studios are working together on building out the corporate headquarters for Arrowhead. The project encompasses the demolition and improvement of four individual floors, three of which are currently occupied by Arrowhead Insurance.
Dempsey was engaged in the early stages of site selection and has worked with the construction manager Ron Sutliff of Cassidy Turley and the design team at ID Studios, in developing and maintaining master schedules.
The project is scheduled for completion in July.
Vista Lane Apartments Sell for $19.45 Million
CHULA VISTA — The Vista Lane Apartments, a two-building, 150-unit apartment complex in Chula Vista, has been sold for $19.45 million to the Conrad Prebys Trust. The seller was the Kreutzkamp Revocable 2000 Trust.
Marcus & Millichap represented buyer and seller.
The complex is located at 1440 Second Ave., just north of Orange Avenue and near Broadway, the area’s dominant retail corridor.
The complex has two swimming pools, two on-site laundry facilities, an on-site leasing office and open parking. The residences average 671 square feet. The unit mix is 111 one-bedroom apartments, 38 two-bedroom units and one three-bedroom apartment.
Philanthropists to Receive Honorary Doctorate Degrees
Philanthropists Malin Burnham and Thomas Denny Sanford will be granted honorary doctorate degrees during commencement activities on June 11 at National University.
National University President and Chancellor Michael R. Cunningham will be joined by San Diego Mayor Kevin Faulconer during commencement for the granting of the doctorate degrees.
Sanford and Mr. Burnham have made several contributions to San Diego organizations and causes, including collaborating on shared causes such as the Sanford-Burnham Medical Research Institute in San Diego. Earlier this year, Sanford provided an inaugural gift for the creation of the Sanford Education Center at National University.
About1,900 graduates of National University are expected to attend the commencement ceremonies at the San Diego Convention Center, representing more than 2,800 qualified graduates who completed their programs online or at National University campuses throughout the Southern California region and Nevada.
Higgs Fletcher & Mack Award 4th Diversity Scholarship
Higgs Fletcher & Mack has awarded its fourth $10,000 USD School of Law Diversity Scholarship to Oceanside native Vernon Evans, who graduated from the university in May and has expressed interest in both corporate and criminal law.
“Vernon consistently demonstrated a keen work ethic and stick-to-itiveness that is impressive,” said Steven Cologne, a partner with Higgs and co-chair of the firm’s Diversity Committee. “We also took strong note of his achievements in the 2013 Frederick Douglas Moot Court Competition where he took the best respondent award. We’re happy to help him pay off some of the financial obligations he accrued from law school and look forward to watching him excel in this profession.”
Higgs Fletcher & Mack has been contributing to USD School of Law since 2004 and created the Diversity Scholarship in 2010 to help significantly lessen the financial burden of law students in need. The firm and its contributing attorneys have awarded more than $45,000 in scholarships to both USD and California Western School of Law.
Zingle Appoints New CEO
Zingle, acompany that lets people text businesses for faster and more personalized interactions, announced the appointment of former Silicon Valley entrepreneur and SaaS pioneer John Girard as CEO. Girard, who was formerly founder and CEO of Clickability, will lead all aspects of Zingle’s operations from its San Diego headquarters.
Zingle was founded in 2010 by entrepreneur Ford Blakely. It developed a texting service that lets consumers text in requests for service or orders to companies such Hilton, Four Seasons, Subway and Central Parking.
Debra Aitken Joins Cassidy Turley as a Project Manager
Debra Aitken has joined Cassidy Turley as project manager with the Project and Development Services Group in San Diego. Aitken will oversee construction management for new site development, build-to-suits and tenant improvement projects. She has more than 30 years of industry experience. Most recently, she was assistant vice president of the Corporate Real Estate Facilities Department at California Bank & Trust where she oversaw a portfolio of 25 bank branches along with numerous corporate headquarters and office properties.
Aitken’s background includes experience in facility, design and construction management, along with experience in the commercial real estate industry spanning three decades in the U.S. and Canada. She holds a bachelor’s degree from the University of Toronto. She was president of CREW, Commercial Real Estate Women in San Diego in 2003 and 2009.
Open Government Ballot Measure Returns
A San Diego open government ballot measure proposal is back again. The measure, which would ask voters whether to change San Diego’s charter language to increase government transparency, was tabled by the City Council in February. Former Councilwoman Donna Frye, president of the open government advocacy group Californians Aware, is aiming to place the measure on the November election ballot.
Israel’s MediSafe Gets Top Award
in Qualcomm’s Global Contest
Qualcomm Ventures, the corporate investment arm of San Diego-based Qualcomm, selected an Israeli digital health startup, MediSafe, as the winner of its fourth global QPrize competition yesterday, Xconomy San Diego reports. It was the third time an Israeli startup claimed the top prize since the inaugural contest in 2009.
MediSafe, based in Haifa, is a cloud-based mobile app that families and care-givers can use to prevent emergencies that result from patients who fail to adhere to their prescribed medications, either by over-dosing or under-dosing. The technology reminds the patient when it’s time to take a pill and sends alerts to selected family members, friends, and others if he or she misses a dose.
Qualcomm said the fourth annual Qualcomm Ventures QPrize competition provides over $1 million in prizes and services for entrepreneurs as they advance new ideas for mobile and wireless seed stage startups.
Qualcomm said that after winning $100,000 in venture financing in a regional competition in Israel, MediSafe won an another $150,000 after it was selected as the overall QPrize winner at Bloomberg’s Next Big Thing Summit in Sausalito, CA. The prizes are provided in the form of a loan that converts to preferred shares of the startup in its next round of financing.
Southland Home Sales Slow;
Median Price Rises Again but at Slower Pace
Southern California home sales lost momentum in May, falling from both April and a year earlier as investor demand fell and buyers continued to face inventory, affordability and credit constraints. Prices climbed again but at roughly half the year-ago pace, a real estate information service reported today.
San Diego Home Sales
May 2013 — 4,236
May 2014 — 3,654
S.D. Median Home Price:
May 2013 — $406,500
May 2014 — $440,000
A total of 19,556 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 2.3 percent from 20,008 sales in April, and down 15.1 percent from 23,034 sales in May last year, according to San Diego-based DataQuick.
On average, sales have increased 5.8 percent between April and May since 1988, when DataQuick’s statistics begin. Sales have fallen on a year-over-year basis for eight consecutive months. May sales have ranged from a low of 16,917 in May 2008 to a high of 35,557 in May 2005. Last month’s sales were 23.0 percent below the May average of 25,393 sales.
“We expected rising prices to unlock more inventory this spring and that’s happened. But the supply of homes for sale still falls short of demand in many markets, contributing to a rise in prices and a below-average sales pace. The drop in affordability has also hampered activity, helping to explain how sales could be lower now even though today’s inventory is higher than a year ago. The recent dip in mortgage rates will help fuel demand, adding pressure to home prices. But the sort of price spikes we saw this time last year – annual gains of 20 percent or more – are less likely today given affordability constraints, higher inventory and the drop-off in investor purchases,” said Andrew LePage, a DataQuick analyst.
The median price paid for all new and resale houses and condos sold in the six-county region last month was $410,000, up 1.5 percent from $404,000 in April and up 11.4 percent from $368,000 in May 2013. Last month’s median was the highest since it was $415,000 in January 2008.
Prices are rising at a substantially slower pace than a year ago. In May 2013 the $368,000 median sale price was up 3.1 percent from the prior month and up 24.7 percent from May 2012.
The Southland median has risen on a year-over-year basis for 26 consecutive months. Those gains have been double-digit – between 10.8 percent and 28.3 percent – over the past 22 months. The 11.4 percent year-over-year increase in the median last month marked the lowest gain for any month since August 2012, when the $309,000 median rose 10.8 percent year-over-year. Last month three Southland counties – Los Angeles, San Diego and Ventura – saw single-digit, year-over-year gains in their medians.
May’s median sale price stood 18.8 percent below Southern California’s peak $505,000 median in spring/summer 2007.
DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. DataQuick was acquired in March by Irvine-based property information company CoreLogic.
Home prices continue to rise at different rates depending on price segment. In May, the lowest-cost third of the region’s housing stock saw a 16.7 percent year-over-year increase in the median price paid per square foot for resale houses. The annual gain was 11.9 percent for the middle third of the market and 9.3 percent for the top, most-expensive third.
Last month the number of homes that sold for $500,000 or more fell 10.5 percent from one year earlier, while $800,000-plus sales fell 13.1 percent. Sales below $500,000 fell 27.6 percent year-over year, while sales below $200,000 tumbled 46.4 percent.
In May, 36.7 percent of all Southland home sales were for $500,000 or more, which was the highest level since it was 38.3 percent in December 2007. Last month’s 36.7 percent was up from a revised 35.9 percent the month before and up from 31.9 percent a year earlier.
The impact of distressed properties on the market continues to fade.
Foreclosure resales – homes foreclosed on in the prior 12 months – accounted for 5.0 percent of the Southland resale market in May. That was down from a revised 5.8 percent the prior month and down from 10.9 percent a year earlier. In recent months the foreclosure resale rate has been the lowest since early 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 6.6 percent of Southland resales last month. That was up slightly from a revised 6.2 percent the prior month and down from 15.7 percent a year earlier.
Absentee buyers – mostly investors and some second-home purchasers – bought 25.0 percent of the Southland homes sold last month, which is the lowest share since September 2011, when 24.6 percent of homes sold to absentee buyers. Last month’s figure was down from 26.7 percent in April and down from 29.5 percent a year earlier. The peak was 32.4 percent in January 2013, while the monthly average since 2000, when the absentee data begin, is about 19 percent.
Buyers paying cash last month accounted for 25.8 percent of Southland home sales, down from 27.6 percent the month before and down from 32.6 percent in May last year. The peak was 36.9 percent in February 2013. Since 1988 the monthly average for cash buyers is 16.6 percent of all sales.
In May, Southern California home buyers forked over a total of $4.49 billion of their own money in the form of down payments or cash purchases. That was down from a revised $4.77 billion in April. The out-of-pocket total peaked last May at $5.41 billion.