Daily Business Report-Feb. 24, 2015
Advanced technology industries are seen continuing to be primary drivers of the region’s economic vitality.
San Diego Economic Growth in 2015 Projected
To Outperform California and the Nation
San Diego’s economy in 2015 is expected to outpace the economic growth in the rest of California and the United States, according to an analysis by the National University System Institute for Policy Research.
The local economy trailed the nation and state in 2013 and accelerated in 2014 — and now is expected to outperform both this year, according to the institute.
Advanced technology industries are seen continuing to be primary drivers of the region’s economic vitality with unusually well-diversified mix of innovative sectors.
“San Diego continues to emerge from the Great Recession that technically ended five years ago,” said Kelly Cunningham, the institute’s economist and senior fellow. “The recession hastened economic transformation that had been ongoing for some time. The disruption accelerated transition from historical dependence upon tourism, military bases, defense procurement, and real estate development to a much more diversified and entrenched mix of scientific research, development, and productive innovation.”
Highlights of the Institute’s 2015 economic outlook:
• San Diego’s gross domestic product (GDP) is projected to grow 3.0 percent in 2015, slightly slower than 3.1 percent growth estimated in 2014.
• Local economic momentum will continue to slightly outperform the rest of the state and nation based on comparative projections for job growth.
• San Diego’s unemployment rate is forecast to further decline in 2015 to 5.7 percent, slightly below 5.8 percent projected for the rest of the nation, and remaining more than a full percentage point lower than California at 7.0 percent.
• San Diego’s employment landscape becomes ever more hour‐glass shaped with higher‐wage jobs accumulating on one end, lower‐wage jobs maintaining relative proportions, and middle‐wage jobs being squeezed out the most.
• San Diego’s population growth will reach a 15-year high in 2015 with 40,500 additional residents.
• Domestic migration turned positive again, marking a significant turning around of more people moving here from other parts of the country. This is an important indication of the economy improving and better job prospects drawing more people to the region.
• Construction of new housing units surprisingly faltered in 2014, not from lack of demand, but deficiency of land available for building and affordability. These challenges will persist in 2015 to constrain building that would otherwise occur.
• After falling to a nearly two-decade low in 2013, San Diego’s median household income (adjusted for inflation) is estimated to have improved in 2014 and will continue rising in 2015 with cost of living increases remaining somewhat muted.
• Taxable sales significantly improved the past five years, but adjusted for inflation in 2015 will still not reach pre-recession highs.
• San Diego’s inflation rate decelerated as gas prices fell in the final months of 2014, limiting local inflation to “only” 2.0 percent. Unfortunately, gas prices are not expected to remain down and will contribute to inflation rising to 2.5 percent overall in 2015.
Council Approves Controversial
One Paseo Project in Carmel Valley
After a marathon seven-hour session, with hundreds of opponents and supporters in attendance, the San Diego City Council on Monday approved the controversial $750 million One Paseo project in Carmel Valley.
On a motion from new Councilman Chris Cate, the council voted 7-2 to approve the mixed-use project with the addition of affordable housing on site, traffic-control improvements and early start-up of a shuttle bus to the nearest Coaster station.
The approval came despite strong opposition from Council President Sherri Lightner, who represents the affluent neighborhood in northwest San Diego. Lightner had criticized the project as “three times too big” and said it will create “horrendous” traffic. “It’s unfortunate the City Council is forced to consider a project with such strong opposition,” she said.
One Paseo includes 199,000 square feet of retail space, a movie theater, 484,000 square feet of office space and 608 residences on a 23.6-acre site south of Del Mar Heights Road, between El Camino Real and High Bluff Drive.
The project by Kilroy Realty would be composed of 10 buildings ranging from two- to nine-stories with nearly 3,700 parking spaces. The design also has nearly 11 acres of open space, including a town green, pocket parks and walking paths.
Opponents, who organized the group What Price Main Street?, argued the development would destroy the character of the neighborhood with its “urban size and scale” and bring unbearable traffic.
“We’re not NIMBYs. We’re not trying to kill this project,” said Ken Farinsky, the top spokesman for the opposition. “But this project is too big.”
Proponents said the project would be a signature example of smart, high-density growth in San Diego, bringing 2,800 construction jobs and 1,600 permanent jobs.
“One Paseo stands to be one of the most aggressive and sustainable projects that San Diego will every see,” said Marcela Escobar-Eck, a land use consultant for Kilroy. “This is the right project in the right place.”
Councilmember Marti Emerald, who along with Lightner voted against the project, said she expected it to create traffic gridlock. “It’s too big, and also it sets a precedent,” she said.
Kilroy representatives said 250 people had filled out cards to speak in support of the project, and opponents estimated 250 to 300 were speaking against it.
— Times of San Diego, with City News Service
UC San Diego Researchers Discover Link
Between Obesity and Type 2 Diabetes
Researchers at the UC San Diego School of Medicine have discovered that the inflammatory molecule LTB4 promotes insulin resistance, one of the first steps towards developing type 2 diabetes. The researchers also found that genetically removing the receptor that responds to LTB4, or blocking it, improves insulin sensitivity in obese mice. The study was published in Nature Medicine.
“This study is important because it reveals a root cause of type 2 diabetes,” said Jerrold M. Olefsky, M.D., professor of medicine, associate dean for scientific affairs and senior author of the study. “And now that we understand that LTB4 is the inflammatory factor causing insulin resistance, we can inhibit it to break the link between obesity and diabetes.”
Chamber’s Mexico Business Center
To Lead Delegation to Mexico City
The San Diego Regional Chamber of Commerce’s Mexico Business Center will lead a delegation to Mexico City in April to focus on advancing efforts in cross-border commerce.
The April 19-22 trip will provide participants from California and Mexico an opportunity to meet and converse with key federal and other elected officials from both sides of the border, as well as representatives from select industries and organizations to discuss international commerce, foreign investment opportunities and policy. The conversations will center on the recent agreements signed between the State of California and Mexico, which highlights collaboration in the areas of cross-border trade, innovation and technology, border infrastructure, education, and water and energy.
“Our annual delegation trip to Mexico City will provide a valuable opportunity to raise our binational region’s profile and that of our member businesses as we advocate for policies that enhance trade and commerce, while also strengthening our global competiveness,” said Jerry Sanders, president and CEO of the chamber.
Following a commitment to increase the resources of the Mexico Business Center and further expand outreach efforts and opportunities for collaboration throughout the region, the chamber recently created a new advocacy staff position. Mayra Vazquez is the new Mexico Business Center coordinator. A San Diego native, born and raised in the South Bay, Vazquez previously worked as council representative in the office of San Diego City Councilman Mark Kersey where she was involved in leading various binational and general business outreach efforts.
To sign up for the California-Mexico Trade Initiative trip, interested participants should visit sdchamber.org/mexicocity.
Susan and Stephen Weber
Honors College Introduced at SDSU
San Diego State University has strengthened its commitment to student success with the naming of the Susan and Stephen Weber Honors College.
In April, SDSU President Elliot Hirshman approved the development of an Honors College from the existing honors program. Monday’s announcement names the college for Hirshman’s predecessor, SDSU President Emeritus Stephen Weber, and his wife, Susan.
Naming the honors college and securing its future with endowed gifts has been a goal of The Campaign for SDSU, which is raising $750 million to support students, faculty and programming.
A significant gift from San Diego philanthropist Darlene Shiley increased the endowment to a level that will support the Weber Honors College ambitions and growth plans for decades.
“Susan and Stephen Weber’s focus on academic excellence transformed San Diego State University, and it is entirely fitting that our new Honors College be named in their honor,” Hirshman said. “We are deeply grateful to Darlene Shiley for her generosity and her commitment to our students and the Webers’ legacy of excellence.”
— Times of San Diego
Gomez Trial Attorneys Opens Third Office
Gomez Trial Attorneys has opened the firm’s third law office in North County. The office is at 603 N. Coast Highway in Solana Beach.
Founder and President John Gomez founded the original office in San Diego in 2005 and a second office in Los Angeles in January 2015.
The firm’s opening of the third location prompted a collaboration with attorney Dean Goetz, who has worked with the firm on a variety of high-profile cases.
Matthew Carlson Joins CBRE
Matthew T. Carlson has joined CBRE as senior vice president. Carlson previously was with Cushman & Wakefield, where he led the San Diego landlord advisory practice. Carlson completed over 1 million square feet of transactions and was responsible for leasing some of the most prolific buildings in the county, controlling nearly $1.3 billion worth of real estate for his clients.
He is a member of the San Diego Chapter of NAIOP, the Princeton University Alumni School’s Committee, the Commercial Real Estate Committee at University of San Diego’s Burnham-Moores Real Estate Program, and a board member of the Downtown San Diego Partnership.
TSA Contracting Expands Team
TSA Contracting has hired Molly Manner as marketing director and Parker McMullin as business development/project engineer. Manner has 17 years of marketing experience in the construction industry and previously worked for PCL Construction as well as ROEL Construction. She is responsible for marketing functions for both the San Diego and Irvine offices and supports TSA’s business development team.
Parker graduated from UC Santa Barbara with a bachelor’s degree in business economics and previously worked for Mitsubishi Electric U Inc. He will assist with business development efforts, primarily focusing on the Los Angeles area.
Restaurant Revolution Technoligies Hires Director
Restaurant Revolution Technologies Inc. has hired Kevin Thomas as the new director of software engineering. Thomas will supervise software development and new service lines for the company, which provides the restaurant industry’s order management technology.
Thomas will work closely with RRT’s chief technology officer as well as the technology, operations and support teams focusing his attention and expertise on RRT’s software development projects.
Prior to joining RRT, Thomas was the director of technology for Digital Air Strike, a price quoting, lead management, social media and digital marketing solution provider within the automotive technology industry. Before that, heserved in a variety of technical and senior management positions with a variety of firms, including. Dealix, Legacy Partners, Envision Software, and AMS Rating.
Another LA-Area NFL Stadium
Moving Ahead in Inglewood
As San Diego works to keep the Chargers, another new NFL stadium project is moving ahead in the Los Angeles suburb of Inglewood, where the City Council could approve plans today for an 80,000-seat stadium proposed by the owner of the St. Louis Rams.
The city clerk and the Los Angeles County Registrar-Recorder/County Clerk’s Office have verified petition signatures in support of the stadium proposed by Rams owner Stan Kroenke. That verification sends the initiative to the City Council, which can either adopt it outright, schedule another hearing within 10 days to adopt it or schedule a June 2 election on the issue.
Although Kroenke is behind the stadium effort, the Rams have not announced any plans to move to Southern California. City documents, however, note that approving the stadium “would provide the city with a unique ability to attract a National Football League franchise to Southern California.”
“It’s a multi-purpose sports and entertainment venue,” Chris Meany, senior vice president of Hollywood Park Land Co., said last month of the stadium proposal. “It is designed so you can play football there, you can play soccer there and you can hold also large-scale events there.”
“Our partner (Kroenke) owns a team among many, many, many, many, many other things he does,” Meany said. “The Kroenke group is one of the nation’s most successful developers of sports and entertainment venues. They have stadiums, arenas, music halls across the country and they have those venues in which they have their own teams operating and they have venues in which they lease them to other teams. This is just a real estate development business for them, separate and aside from what other businesses they might have, which do include sports franchises.”
The announcement of the stadium proposal, however, jumpstarted excitement about a possible NFL team returning to the Los Angeles area. That excitement hit new heights last week when the owners of the San Diego Chargers and Oakland Raiders announced that they were working together on a possible $1.7 billion stadium to share in Carson.
An executive with the Chargers said last week the two teams expedited their plans after Kroenke announced his stadium proposal in Inglewood.
The San Diego City Council will take up a proposed resolution Tuesday that states the city is “fully committed” to keeping the Chargers football team in San Diego. Mayor Kevin Faulconer met with the Chargers’ ownership over the weekend.
— Times of San Diego, with City News Service