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Daily Business Report-Jan. 13, 2016

Daily Business Report-Jan. 13, 2016

Qualcomm announced a ‘Ying’ drone based on Snapdragon Flight at the Consumer Electronics Show. The Ying was developed by Chinese drone vendor ZeroTech.

As Drone Novelty Fades, Qualcomm and

Intel Focus on Integration and Safety


As drones of all sizes and shapes proliferate across the country, companies are starting to highlight their ability to safely integrate unmanned systems into the airspace by incorporating new features, such as robust sense-and-avoid capability.

Some of the chief proponents of this are companies that haven’t traditionally operated in the air arena, including computer giant Intel and telecommunications company Qualcomm.

Intel has stepped into the drone market in a big way, investing $60 million in Chinese company Yuneec, which builds a range of small unmanned aircraft, and acquiring German autopilot maker Ascending Technologies.

At the Consumer Electronics Show in Las Vegas this year, Intel demonstrated its RealSense collision avoidance technology. In a keynote address, Intel CEO Brian Krzanich showed how a Yuneec drone equipped with the technology could follow a bicyclist’s movements and even avoid a falling tree.

At its booth, Intel flew another Yuneec drone with RealSense, which flew around a netted area without crashing, even when the operator flew it with his eyes closed.

Intel presenter Trent Nate said RealSense uses infrared cameras to give it depth perception to “entirely” avoid collisions.

“He can’t crash this drone,” he said, of the operator. “It will even pick up this netting as an obstacle.”

Qualcomm has created a similar sense-and-avoid system using the company’s Snapdragon processing that won’t allow a UAS to hit obstacles and which will guide it back to a safe home point if it loses connection to its operator.

“Want to see us crash this drone?” a company spokesman asked during a demonstration at the company’s booth at CES 2016.

The operator tried to crash the drone into a wall, but it wouldn’t let him. He tried to run it into a mock rock arch, but it just went through.

The system is almost entirely optically based, said Qualcomm senior engineer Abhishek Tyagi, although it also uses data from built-in accelerometers.

The prototype can be bolted on to a small UAS, but Tyagi said it could be added in at the design level as well if drone manufacturers wanted to use it.

Sense-and-avoid capability isn’t the only factor holding up integration. Several panelists at a session said regulation is needed, along with some possible technology advances.

NASA is working on an unmanned traffic management system for small UAS, along with partners, including Intel, Amazon, Google, Ascending Technologies and many others.

Intel’s Peter Cleveland, vice president of the law and policy group, said latency is a potential problem. Consumer drones can take a couple of seconds or more to regain a lost link, but that won’t be acceptable in commercial use.

However, Google’s Dave Vos, who heads Google’s Project Wing drone delivery system, said there really aren’t any technical issues standing in the way of commercial use. “We just need to do it.” He said latency issues could be mitigated by making communications a “non-critical link,” so drones would be more autonomous. They will also need to communicate their location at all times, which will help in avoiding collisions.


 Irvine Company’s 306,000-square-foot One La Jolla Center

Irvine Company’s 306,000-square-foot One La Jolla Center

Commercial Office Report

Developers Add New Offices with Little Pre-Leasing

New speculative office deliveries add vacancy

In 2015, the San Diego office market delivered the first significant speculative office building since 2010 with Irvine Company’s 306,000-square-foot One La Jolla Center, according to JLL’s Office Insight report.

Cruzan’s 177,000-square-foot office conversion MAKE, in Carlsbad

Cruzan’s 177,000-square-foot office conversion MAKE, in Carlsbad

Other speculative office construction delivered in 2015 included American Assets Trust’s two 19,000-square-foot additions to Torrey Reserve in Del Mar Heights, Kilroy Realty’s 73,000-square-foot The Heights Del Mar project, in Del Mar Heights, and Cruzan’s 177,000-square-foot office conversion MAKE, in Carlsbad.

At the end of 2015, these properties were 81.6 percent vacant,

comprising nearly half a million square feet of vacant office space, or 4.3 percent of the county’s 11.3 million square feet of vacancy.

ViaSat rapidly expanding and driving occupancy growth in Carlsbad

Carlsbad posted the largest positive net absorption in the fourth quarter for any submarket in the county, a total of 133,266 square feet, according to the JLL report.

ViaSat, a Carlsbad based broadband services and technology company, is a major driver in the Carlsbad office market. ViaSat’s recent growth comes from multiple factors including new contracts with the U.S. Navy and Virgin America airline along with the pending launch of ViaSat’s newest satellite. Levine Investments completed a 74,000 build-to-suit office for ViaSat in the fourth quarter with a neighboring build-to-suit for ViaSat still under construction. Additionally, ViaSat purchased 23 acres from HCP in the fourth quarter to accommodate future growth.

Private colleges continue to see enrollment decline

2015 saw the continued decline of many large for-profit colleges across the

nation. Locally, Bridgepoint Education vacated 40,000 square feet of office space downtown in the fourth quarter, on the heels of vacating nearly 150,000 square feet of office space in Rancho Bernardo to start the year.

Overall, local enrollment in (non-religious) private colleges decreased 9.2 percent from 2014, with National University’s large gains offsetting some of the losses.

Of private colleges in San Diego, 13 out of 15 reported year-over-year enrollment losses. “Webster University closed its San Diego location in the fourth quarter and we anticipate a further contraction for this sector of office users as enrollment continues to trend downward,” the JLL report said.


McMillin Realty Sold to Owners

Of Better Homes and Gardens Real Estate

Scott McMillin has sold McMillin Realty to Vince and Nick Gotusso, who own a Better Homes and Gardens Real Estate franchise. The name of the new entity will be Better Homes and Gardens Real Estate McMillin Realty.

The company will continue to serve the South Bay, metro and coastal communities of San Diego.

“We see an enormous opportunity in uniting these two brands, both of which families across California have trusted for decades,” said Sherry Chris, president and CEO, Better Homes and Gardens Real Estate LLC. “The McMillin name is synonymous with quality and trust in the San Diego community, and the national scope of the Better Homes and Gardens Real Estate will provide new marketing resources for the benefit of McMillin’s affiliated real estate professionals and their clients.”

“We are thrilled to have identified the perfect platform for McMillin Realty to grow,” said Scott McMillin, chairman and previous owner of the brokerage firm. “Not only does Better Homes and Gardens Real Estate provide our team of Realtors with the exclusive opportunity to establish a fresh brand in the San Diego marketplace, but the network steps beyond that of a traditional franchise by emphasizing the lifestyle considerations that are often overlooked in real estate today.”

Better Homes and Gardens McMillin Realty will maintain its five current sales office locations; two in Bonita, two in Chula Vista and one in San Diego. With the support of Better Homes and Gardens Real Estate, the brokerage plans to expand its team of 130 affiliated real estate professionals into new markets.

McMillin Realty operates as an independent company within the McMillin family of companies.


City Council Appeals State Board’s

Order to Rescind Pension Reform Measure

City News Service

The City Council voted unanimously Tuesday to appeal a recent state Public Employment Relations Board order for the city of San Diego to rescind a voter-approved pension reform measure and once again offer pensions to city employees.

The Dec. 30 PERB ruling called on the city to overturn Proposition B, passed by an overwhelming margin in 2012. The ballot measure shifted new non-police employees from the debt-ridden pension system to a 401(k)-style plan, and was a major part of efforts by city leaders to restructure municipal finances.

Four of the city’s six organized labor groups filed a complaint with PERB, contending that the city failed to bargain the provisions of the ballot measure with them before it went to a public vote, as required by law.

The city, arguing against the complaint, said the requirement didn’t apply, since Proposition B was sponsored by private citizens, and that municipal leaders who campaigned for it weren’t acting in their official capacities.

The board affirmed a previous ruling by an administrative law judge that officials, including then-Mayor Jerry Sanders, in fact were acting in their city roles.

City Attorney Jan Goldsmith said PERB was trying to create new law by declaring that a citizen initiative should be unwound because its terms were not separately negotiated with union leaders.

“The people’s right to initiative is guaranteed by the California Constitution,” Goldsmith said. “This right cannot be bargained away in a back room, or stolen from the people by a government agency. Even people who opposed Proposition B understand that the PERB decision is an unconscionable overreach that gives union leaders the power to thwart the public’s will.”


Buena Vista Audubon Society Buys

3.5 Acres of Wetlands in Oceanside

The Buena Vista Audubon Society has acquired 3.5 acres of wetlands adjacent to the Buena Vista Lagoon Ecological Reserve and across the street from the Audubon Society’s nature center.

The Audubon Society purchased the acreage for $1.55 million from the seller, MacHutchin Development 401K. It plans to restore the vacant land into a ”more viable wildlife habitat,”according to the Buena Vista chapter’s president, Andy Mauro.

“About half of the property is considered wetlands, and the other half is also at that low elevation. It would be relatively easy to restore that property to support the adjacent habitat,” said Mauro.

“With biological, watershed and Coastal Commission site challenges limiting profitable development opportunity, the Audubon Society was the perfect buyer for the property,” said Al Apuzzo of Lee & Associates.

Lee & Associates represented the seller and Land Conservation Brokerage Inc. represented the buyer in the transaction.


Port Asks Staff to Negotiate

For Outdoor Concert Venue

City News Service

The Port of San Diego Board of Commissioners Tuesday unanimously directed staff to negotiate with the San Diego Symphony on a proposal to build a permanent outdoor concert venue at Embarcadero Marina Park South.

According to a port staff report, the symphony also wants to forge a long-term agreement for use of the park.

The port has granted the musical organization four-month operating permits annually since 2004 and receives a portion of ticket, food, beverage and merchandise sales revenue.

“This is a unique opportunity to provide a permanent home for waterfront concerts for one of our most beloved institutions, the San Diego Symphony, and reaffirm the port’s commitment to the arts,” said port Chairman Marshall Merrifield.

“Our board made the decision to move this proposal forward because of its potential to attract people to the waterfront and be a positive development for the entire San Diego region,” he said.

Port staff said the symphony has not provided a business plan, nor suggested financial terms as part of the proposal. However, the new facility, on 3.6 acres of the 10.6-acre park, would be available for other events on nights when the Summer Pops are off.

The symphony hosted 37 performances at the Pops site last summer.

The commissioners also directed staff to begin an environmental review of the proposal.


Portico Retail condos

Portico Retail condos

Portico Retail Sold for $5.15 Million

Portico Retail, a 6,876-square-foot retail condominium at 1415-1455 India St. in Little India has been sold for $5.15 million to Penhum LP. India One Investments LL C was the seller.

The retail space is located on the street level of Portico Condos, a five-story, 84-unit multifamily property built in 2005.

Three tenants occupy the property: Chase Bank, Entoca Style Wine Bar and Fabrison’s Café.


L.A. Gets Rams, But San Diego

Gets Chance to Keep Chargers

City News Service

National Football League owners Tuesday approved a stadium project in Inglewood for the St. Louis Rams, and gave the Chargers an option to move there if the team cannot reach a viable stadium deal in San Diego.

The decision opens the door for the city and county of San Diego to reopen negotiations with the Chargers to keep them from moving, while giving the team a safety net if such talks break down again.

In a statement, Chargers chairman Dean Spanos said his goal was to safeguard the future of the Chargers franchise while respecting the will of fellow NFL owners. “Today we achieved this goal with the compromise reached by NFL ownership,” Spanos said.

“The Chargers have been approved to relocate to Los Angeles, at the Inglewood location, at any time in the next year,” Spanos said. “In addition, the NFL has granted an additional $100 million in assistance in the event there is a potential solution that can be placed before voters in San Diego. I will be working over the next several weeks to explore the options that we have now created for ourselves to determine the best path forward for the Chargers.”

He was noncommittal when asked during a news conference whether he was willing to reopen talks to keep his team in San Diego.

“I’m going to look at all our options — I want to take a little bit of time here — we do have some options,” Spanos said. “It’s very difficult to say right now I’m going to do this or I’m going to do that.”

He said the relocation process has been “excruciating for everyone.”

According to a resolution approved by owners on a 30-2 vote, Spanos will have until Jan. 15, 2017, to decide whether to join the Rams in Inglewood. If San Diego voters approve a financing package for a new stadium, the option could be extended for another year.

Spanos could decide to make the move in time for the 2016 season, according to NFL Commissioner Roger Goodell.

If the option expires, the Raiders will have a chance to become the second team in Los Angeles.

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We Want Your Opinions on San Diego’s Big Issues In the coming months, Probosky Research (one of California’s leading opinion research firms) will continue its partnership with SD METRO to survey San Diego residents about topics of interest to our readers. We’d like to throw open the door for suggestions for topics. What do you want to know? What do you think you know, but aren’t sure? What are you certain you know, but want to prove it beyond doubt? Ideally, we’d like to see questions that have to do with public policy.

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