Daily Business Report-Aug. 25, 2016
The Disney Wonder, one of four homeported cruise lines in San Diego. (Port of San Diego)
San Diego’s New Cruise Season
Gets Under Way on Friday
Port officials are optimistic about economic impact
The Port of San Diego is sounding upbeat by the 2016-2017 cruise season, which kicks off on Friday with the arrival of the Disney Wonder.
Currently 90 cruise calls are scheduled for this season, up 30 percent from last year. Officials said this is a positive sign for the Port, which has seen its cruise business making a steady climb the last two years after struggling through the recession.
The 2,700-passenger Disney Wonder will berth at the Port’s B Street Cruise Ship Terminal, where guests will board for a 14-night repositioning cruise through the Panama Canal to Port Canaveral, Florida with stops in Cabo San Lucas, Puerto Vallarta, Mexico, Cartagena, Colombia; and Cozumel, Mexico. Other itineraries feature visits to Buenos Aires, Argentina; Santiago, Chile; the Mexican Riviera, Hawaii and the California Coast.
“The Port of San Diego’s cruise business is coming back in a big way,” said Marshall Merrifield, chairman of the Board of Port Commissioners. “We are making improvements to our B Street facility, including adding an escalator, to meet the growing demand. We’ve been working with our cruise partners over the last couple of years, making improvements to port security and enhancing itineraries. That, combined with an improved U.S. economy, has contributed to this resurgence.”
An economic impact study covering the Port’s cruise business for the 2015 calendar year found that each homeported cruise generated an average of nearly $2 million in economic impact to the region. The study also found that the Port’s cruise business contributed $82 million in overall economic impact to the San Diego region. It also said that about $46.8 million was spent on local businesses and that it contributed to $22.3 million in employment earnings.
The Port’s homeported (cruises that begin and end in San Diego) lines are Disney Cruise Line, Norwegian Cruise Lines, Holland America Line and Celebrity Cruises.
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Chargers Go on Offensive to Rebut
Critical Reports on Stadium Proposal
By City News Service
The Chargers went on offense Wednesday after weathering a blitz of three critical reports on its plan to build a stadium and convention center annex in downtown San Diego, releasing an analysis that said the project “would have a major positive impact” on the city.
The Chargers will put their plans before voters in November as Measure C, which sets out a financial and land-use framework for the project. Because it would increase San Diego’s hotel room tax, the measure needs 66 percent approval to pass.
Rob Hunden, president of Hunden Strategic Partners, which prepared the report, said the plan appears to be sound.
“We’ve got great faith in the folks who are designing the facility — if they were designing a piece of garbage we wouldn’t be promoting or supportive of it,” Hunden said at a news conference.
“I started out as a skeptic, but the more we got into it I realized that, hey, this is a smart idea,” he said. “They’re not going to be overtaxing; they’ve got a pretty sound proposal in front of us.”
The city of San Diego’s Tourism Marketing District, the financial consultant Public Resources Advisory Group and the San Diego County Taxpayers Association each issued reports contending that the Chargers’ plan for paying for construction and operations of the facility doesn’t add up.
Those reports were balanced somewhat by a fiscal analysis from the city’s Independent Budget Analyst’s office, which suggested that an increase in the city’s hotel room tax would likely raise enough money to pay for the public contribution to the estimated $1.8 billion project, but only if the team’s estimates hold up.
But like the taxpayers group, the Independent Budget Analyst cautioned that the city’s general fund — which pays for basic services like public safety and libraries — would be put at risk if revenue projections are overly optimistic. It issued its fiscal analysis of Measure C on Monday.
According to Hunden, the other studies compared the meeting annex and San Diego Convention Center as if it were apples to apples, but the so-called “Convadium” will actually be marketed toward mid-sized events. He called that the “heart of the market” for conventions today and the “biggest bang for the buck.”
Such conferences would range from 1,000 to 15,000 attendees, with most averaging around 3,000 to 5,000, he said.
He said the National Football League has accommodated long-range scheduling issues at similar facilities, and medium-sized events may move in and out again without impacting Chargers games.
He projected the annex would generate 225,000 hotel room nights per year for the first 10 years, with area hotels making an additional $750 million over the initial decade and the city gaining $125 million in new hotel tax revenue in that period.
The Chargers, who’ve wanted a new stadium for about 15 years, have proposed to build the facility in the East Village near Petco Park. The team and the NFL would contribute $650 million and the public would add the rest by raising the hotel room tax to 16.5 percent — from the current 10.5 percent plus 2 percent tourism marketing fee.
The Chargers have agreed to play in the new facility for 30 years if Measure C passes. If it doesn’t, the team has an option to join the Rams as the second tenant of a future stadium in Inglewood in Los Angeles County.
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Marine Terminal Expansion Could
Raise Air Pollution in Barrio Logan
Times of San Diego
The Environmental Health Coalition has raised concerns about the Port of San Diego’s plans to expand the Tenth Avenue Marine Terminal, which could increase air pollution in Barrio Logan.
Pollution would result from an increase in the use of diesel trucks and ships operating close to Barrio Logan. According to the coalition, the current expansion plan will increase cargo throughput by as much as 589 percent and may increase greenhouse gas emissions by up to 540 percent.
Officials from the Port of San Diego said they filed an Environmental Impact Report, which was distributed for public review from Jun. 30 to Aug. 18. They plan to respond to nine public comments in their final draft, taking the community’s feedback into consideration.
A draft environmental impact report estimates that the project will add over 800 trips of diesel trucks through Barrio Logan everyday, for an approximate total of 982 trips. According to the California Environmental Protection Agency, this neighborhood is among the worst five percent of neighborhoods in cumulative pollution burden in the state.
“The Port needs to go back to the drawing board to reduce its plans for expansion and increase its use of zero-emission trucks and electric shorepower for ships,” said Diane Takvorian, executive director of the environmental coalition.
The coalition, based in National City, has highlighted the increased health risks for cancer and respiratory illnesses that would result from the extra air pollution. The California Air Resources Board wrote a comment letter offering similar criticisms of the plan. According to coalition, the residents of Barrio Logan have one of the highest rates of children’s asthma hospitalizations in San Diego County.
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Cal State San Marcos Awarded Grant
From National Institutes of Health
A Cal State San Marcos research team has been awarded a grant from the National Institutes of Health (NIH) for its 10-year study that aimed to answer the question of diversity’s impact on scientific research.
“Science not only needs diversity but people from all backgrounds also need access to a full range of career opportunities,” said Anna Woodcock of Cal State San Marcos. “Careers in the sciences can be very rewarding and, in some instances, high paying and prestigious. The thought that certain groups of people should be excluded from these opportunities is egregious.”
For the study, data were collected from over 1,400 undergraduate and graduate students at 50 universities nationwide over 10 years. Comparing underrepresented students who were involved in NIH programs against similarly motivated underrepresented students who were not, the researchers examined undergraduate graduation rates as well as acceptance, enrollment and graduation rates in graduate and doctoral programs.
“Students go in with a strong interest in pursuing scientific research and careers, but what happens over time is that many underrepresented students lose interest or get pulled away,” said Wesley Schultz, Cal State San Marcos dean of graduate studies. “What we found is that these NIH training programs sustain that interest and motivation among underrepresented students over time.”
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$20,000 Reward Offered in
Naval Base Bomb Threats
By City News Service
A reward of $20,000 was being offered for information that leads to the arrest of whoever has made more than three dozen unfounded bomb threats at Naval Base San Diego and nearby shipyards since November.
The Naval Criminal Investigative Service together with BAE Systems and NASSCO put up the money in an effort to halt the hoaxes, which have interrupted work and forced federal law enforcement agents off their regular investigations.
Two threats were made Friday at Pier 7 aboard the Barrio Logan-area installation.
Navy officials said messages have been found over the past nine months scrawled on a bulkhead inside a docked ship, inside portable toilets, a ship’s stairway and plumbing pipe, among other places. A few threats were called in.
Anyone with information on the cases was asked to call the NCIS at (619) 556-1364 or (877) 579-3648. Tips can also be texted to 274637, with “NCIS” typed at the beginning of the text.
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New Reports Show Healthy
Real Estate Market in San Diego
Times of San Diego
Despite recent concerns about the San Diego real estate market peaking, a new pair of reports shows sales and price appreciation remain healthy.
On Wednesday the California Association of Realtors reported that pending home sales in San Diego rose 7.5 percent year-over-year in July, well above the statewide average of 3.5 percent.
Then today, the online real estate site Zillo reported that the median value of a home in San Diego was $513,600 in July, a 5.4 percent increase from the same month a year ago.
That was slightly higher than the nationwide increase of 5.1 percent, but below the double-digit growth rates in Denver, Portland, Seattle and Dallas-Ft. Worth.
Although the new reports showed a healthy local real estate market, experts still cautioned there are signs of problems ahead.
“The Bay Area and Southern California are still growing at a faster pace than the nation as a whole, but growth rates have come back to earth a bit after several years of rapid growth,” noted Zillow Chief Economist Dr. Svenja Gudell.
“While still in positive territory, Realtors’ optimism of market conditions over the next year has been waning over the past few months,” the California Association of Realtors said, noting that fewer buyers were overbidding on homes.
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Higgs Partner Named Association President
Higgs Fletcher & Mack partner R. Michael Jones has been named president of the San Diego chapter of the Association for Corporate Growth. Jones previously was program chairman of the organization.
Jones represents nearly 40 mid-market companies. His clients are in a range of industries including clean-tech, electronic design and manufacturing, financial services, architectural services, real estate development, securities brokerage, food manufacturing and distribution, electronic components distribution and health care services.
Personnel Announcements
Michael Golden Joins Lee & Associates
Commercial real estate veteran Michael Golden has joined Lee & Associates as an associate in the North County office. Golden specializes in the sale and leasing of retail and investment properties throughout San Diego County.
Golden is a 15-year veteran of the real estate and finance industry, has achieved numerous awards and distinctions. Prior to joining the commercial real estate field, he held the No.1 and No. 2 place at Smith Barney Financial Service’s national ranking for two consecutive years. He also led a retail sales division of 175 employees across 38 states.
A graduate from the University of Hartford, Conn., Golden holds a bachelor’s degree from the University of Hartford, Connecticut.
