Daily Business Report — July 22, 2014
Local Home Prices Will Take
2 More Years to Fully Recover
It will take another two years before home prices in the San Diego area return to their pre-recession peak, the online real estate service Zillow reported Monday.
Zillow said average home values in the nation’s 100 largest metropolitan areas will not reach their 2007 levels again for another 2.7 years. The estimate for San Diego was 1.9 years.
Tech meccas Austin and San Jose have already recovered, and San Francisco is a third of a year away, Zillow said. Los Angeles will take a year and a half.
Nationally, home values remain 11.3 percent below their 2007 peak. Looking ahead, U.S. home values are expected to rise another 4.2 percent through the second quarter of 2015, according to the Zillow Home Value Forecast.
Notable large metros where full recovery in home values will take much longer include Minneapolis (14.5 years), Kansas City (12.5 years) and Chicago (11.7 years).
“In dozens of markets, homeowners that bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their home, a lost decade in which they will have built up no home equity. This is reflected in stubbornly high negative equity and effective negative equity rates, with more than a third of Americans with a mortgage lacking enough equity to realistically list their home for sale and buy another,” said Zillow Chief Economist Dr. Stan Humphries.
“But there is a silver lining as we navigate these tricky middle innings of the recovery. Because home values remain so far below their peak levels in so many areas, it is still possible for buyers to find bargains. This will be critical to maintaining home affordability over the coming years, especially as mortgage interest rates rise.”
— Times of San Diego
Venture Capital Investment on the Rise in San Diego
Venture capital investment is on the rise in San Diego County and nationally based on second quarter 2014 findings from the MoneyTree survey from the National Venture Capital Association and PricewaterhouseCoopers and the Down Jones Venture Source and Ernst & Young report.
The largest San Diego deal was by ear disease drug developer Otonomy raising $49 million, followed by Verdezyne Industrial raising $48 million, Cidara Therapeutics raising $32 million, Sotera Wireless raising $21 million and website software firm Tealium raising $20 million.
Nationally, venture capitalists invested $13 billion in 1,114 firms, a significant increase from $7.1 billion investments in the second quarter of 2013.
Comic-Con Attendees Spend
Millions on Hotels and Dining
San Diego’s Gaslamp Quarter is already being transformed for Comic-Con, a pop culture convention that will be at the Convention Center from Thursday until Sunday.
Hotels near the center have been doing lots of advanced planning for the influx of customers.
Rana Kay with the Hard Rock Hotel said they’ve been planning for Comic-Con since last year.
“We’ve got all of our rooms booked, we’ve got branding throughout the whole hotel, parties every night. There’s a lot that goes into preparing for Comic-Con and nothing else in the city compares,” Kay said.
The San Diego Convention Center Corp. says San Diego hotels generated nearly $25 million during last year’s Comic-Con. This year, the average room is going for about $225 a night — a significant jump from the rate of $165 a night during the weeks before and after the convention.
Transportation also generates a lot of revenue during the convention, with Comic-Con attendees getting around using everything from the trolley to taxis to pedi-cabs. Last year, the industry generated close to $10 million during Comic-Con.
Convention attendees also spent a lot on food last year. In 2013, visitors spent more than $11 million at restaurants and other eateries.
Scripps Research Institute President Stepping Down
Less than two weeks after ending talks aimed at merging with the University of Southern California, the Scripps Research Institute has announced the resignation of its president, Mike Marletta.
Scripps Research Institute announced Marletta “has indicated his desire to leave TSRI and the Board is working with Dr. Marletta on a possible transition plan. Should Dr. Marletta depart TSRI, the Board will work to make any transition to new leadership the highest priority. Any such transition will engage all key constituencies in a dialogue about the future direction of this storied institution.”
U-T San Diego reported that Marletta had been criticized by the faculty for not broadly including researchers in discussions with USC.
The merger idea was seen as a way to rev up funding in the face of stiff competition for federal dollars and increasing pension and other costs.
The merger would have allowed the Scripps Research Institute to receive less of its $310 million annual operating budget from the National Institutes of Health, and would add to USC’s prestigious life-science institutes.
Marletta joined the institute’s faculty in July 2011, and was named president and CEO on Jan. 1, 2012.
— KPBS with City News Service
Surfrider Pressures Mayor on Plastic Bag Ban
Members of an environmental group plan to urge Mayor Kevin Faulconer today to move forward with an environmental review of a proposed ordinance that would sharply curtail the use of plastic shopping bags in San Diego. The review is a necessary step before the item, a top priority for environmentalists, can be brought before the City Council for consideration.
Backers of the idea, who plan to speak out during a non-agenda public comment period at today’s council meeting, contend that the bags scatter across beaches and get into the ocean, where they harm marine life. And 95 percent end up in landfills, taking up valuable space, they say.
The Surfrider Foundation of San Diego County accused Faulconer of stalling. “San Diego is the largest city in California that has yet to pass a plastic bag ordinance to address the plastic pollution issue plaguing our coastline,” said Roger Kube, chairman of the local chapter.
“The mayor’s office, against the will of the (City Council’s) Rules and Economic Development Committee, has delayed the necessary steps to bring this ordinance to the City Council for a vote. We urge our mayor to reinstate the environmental review process immediately.”
The council committee asked for the review last October.
Craig Gustafson, a mayoral spokesman, said Faulconer is waiting for the fate of a state bill to be determined. Previous attempts at a statewide plastic bag ban have failed.
— City News Service
Security Experts to Advise on Cyber Crime
Cyber security experts will advise San Diego business leaders on how to protect their companies from cyber crime at a July 30 forum sponsored by the Corporate Directors Forum. It will be held at the Hyatt Regency La Jolla, 3777 La Jolla Village Drive, San Diego. Networking is at 7 a.m., breakfast and program 7:30-9 a.m.
Speakers will be: Shaygan Kheradpir, CEO, Juniper Networks Inc.; Ronald E. Plesco Jr., national lead on cyber investigations, intelligence and analytics, KPMG LLP; and Andrew B. Serwin, partner, member of global privacy and data security practice group, Morrison & Foerster LLP.
Corporate Directors Forum members are free, nonmembers are $50. To register, contact Corporate Directors Forum at (858) 455-7930 or visit www.directorsforum.org.
Horton Plaza Park Budget Heads to State
Horton Plaza park’s $17.7 million expansion is headed for state approval, following Monday’s final local review, the U-T San Diego reports. The multiagency redevelopment oversight board unanimously approved the budget, ratifying what the Civic San Diego board and City Council had previously acted on.
The actions were necessary because the construction bid and other costs came in $4.9 million higher than budgeted. And because the project involves former redevelopment funds, the state has the final say, since the state dissolved all redevelopment agencies in 2012. The state has 45 days to make a decision.
A year of construction is due to start in November if the state approves the budget.
Council of Community Clinics
Names Chief Executive Officer
The Council of Community Clinics board has named Henry N. Tuttle as its new chief executive officer. Tuttle takes the reigns of an organization that provides centralized support services to 16 member community clinic and health center organizations operating over 100 sites in San Diego, Imperial, and Riverside Counties.
Tuttle brings 30 years of leadership experience to CCC, the most recent as CEO of Manet Community Health Center in Quincy, Mass. During his tenure at Manet, operating revenues increased by 39.2 percent, the employee base grew by 60 percent and the organization undertook a massive effort to enroll over 15,000 residents into health insurance coverage since the passage of health care reform in 2008, according to CCC officials.
Prior to his role at Manet, Tuttle served as the CEO for Outer Cape Health Services, a multi-site organization located on Cape Cod. He has held leadership positions at Pacific Gas and Electric Company in San Francisco and Children’s Hospital Los Angeles.
(W)right On Communications Promotes Staffers
(W)right On Communications has promoted Erica Schlesinger to communications strategist and promoted Whitney MacKenzie to communications coordinator.
Schlesinger will direct and execute communications and public relations efforts for the agency’s clients, focusing on the hospitality and lifestyle industries. A San Diego native, Schlesinger brings more than three years of experience in public relations, social and digital media and branding. She has worked with top industry brands including Delaware North Companies Parks & Resorts, Hilton Hotels and Tenaya Lodge at Yosemite.
As communications coordinator, MacKenzie will support the San Diego public relations team delivering programs for clients in the hospitality, technology, energy, health care, development, public agency and nonprofit industries. She joined (W)right On in January as an account assistant. Prior to joining the agency, she worked for the Marine Biological Laboratory, a scientific organization in Woods Hole, Mass.
Agena Bioscience Inc. Hires CEO
Agena Bioscience Inc. of San Diego genetic analysis, announced the hiring of Peter Dansky as chief executive officer. Dansky is the former president of the Molecular & Cell Biology Division of Life Technologies. Dansky holds an M.B.A. from Boston College and a M.S. and B.S. in chemical engineering from Tufts University. He previously served as president of the Functional Analysis Division at Applied Biosystems. He has 30 years of experience in strategic business development.