Daily Business Report — Feb. 22, 2012
Judge Refuses to Remove Pension Reform Initiative
(City News Service) — A judge refused today to issue a temporary restraining order that could have resulted in the pension reform initiative being removed from the June ballot. In one of two lawsuits challenging the ballot measure, Judge William Dato rejected the TRO request by the state Public Employment Relations Board, which contended the initiative should be disqualified because city leaders engaged in unfair labor practices. Last week, the agency known as PERB found that the city failed to negotiate the provisions of the ballot measure with its unions.City officials are legally required to meet and confer with unions on measures they place before voters, but that mandate does not extend to initiatives launched by private citizens and groups. The pension reform measure is backed by the San Diego County Taxpayers Association and, while Mayor Jerry Sanders and Councilman Carl DeMaio are among its leading supporters, both claimed they were acting as private citizens. City union leaders disagreed and filed a complaint with the PERB, which resulted in the lawsuit. According to the judge, the invalidity of the measure has to “be clear beyond a doubt,” which was not the case in this instance. He said there was no compelling reason to determine the validity before the election. The issue can be dealt with following the election, Dato ruled. “The public deserves the right to decide this matter, and I’m glad the courts will allow this initiative to proceed,” Sanders said. He said that if passed by voters, it will be copied by other cities.
Under the initiative, most new San Diego city employees would receive 401(k) plans instead of being enrolled in the debt-ridden pension system. Workers would also have only their base compensation figured into their eventual retirement pay for a five-year period. Proponents say the changes would save the city at least $1.2 billion through 2040, but opponents contend it will leave employees without a viable safety net and actually cost more money in the first few years. Michael Zucchet, who heads the Municipal Employees Association, told reporters after the hearing that “at the end of the day, the initiative is an illegal initiative and the city’s not going to be able to implement it.” The other lawsuit, filed by mayoral candidate Hud Collins, claims the initiative amounts to a large-scale revision to the City Charter, not an amendment. The City Charter requires a revision to be launched by the City Council or a charter review commission, not a private ballot initiative. A ruling on his lawsuit is also expected this week.
Grubb & Ellis Co. to Sell Assets as Part of Bankruptcy Filing
The Los Angeles Times reported today that venerable commercial real estate brokerage Grubb & Ellis Co. will sell its assets to the parent company of rival Newmark Knight Frank as part of a prepackaged bankruptcy. According to the Times story, BGC Partners Inc., a New York financial services firm that acquired Newmark Knight Frank in October, agreed to buy essentially all the assets of Grubb & Ellis for an undisclosed price. Grubb & Ellis will conduct its asset sale under Section 363 of the U.S. Bankruptcy Code and has commenced Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York, the Times said. BGC said it would provide financing to support the Santa Ana company’s operation during the sale process, which must be approved by a federal judge. The firms did not reveal whether the Grubb & Ellis name would survive the takeover, the Times story said. The company’s yellow-and-black signs are a common sight on offices, warehouses and other commercial buildings available for sale or lease.
Real Estate Conference Set for March 2
U.S. Bank CEO Richard K. Davis will keynote the Burnham-Moores Center for Real Estate’s 16th annual Real Estate Conference on March 2 at the Hilton San Diego Bayfront. The conference goes from 7:30 to 11:45 a.m. Davis will speak on “The Commercial Real Estate Industry: Putting the Bad Behind Us and Fueling a Real Estate Recovery.” Featured speaker Frank E. Nothaft, chief economist at Freddie Mac, will address “Multifamily and Single-Family Mortgage Market Upturns: One Is Blowing Hot; the Other Is Not.” Mayor Jerry Sanders will talk on “Redevelopment Activities and Real Estate Markets: A Political Perspective.” The conference also will include a panel of experts who will provide a commercial real estate and capital markets outlook for the nation, California and San Diego. Panelists include: Sam Davis, chief investment officer at Allstate in Chicago; Stephen Silk, senior managing director at Eastdil Secured in Los Angeles; Steve Scott, senior vice president at Kilroy Realty in San Diego; and John Turner, San Diego regional vice president at the Irvine Company Office Properties in San Diego. To register for the event, go to sandiego.edu/bmcevent. For questions, contact Diane Gustafson at (619) 260-2379.
Cushman & Wakefield Reports Investment Sale Transactions
Cushman & Wakefield’s Urban Property Group announced five investment sale transactions in San Diego within the past 60 days that total more than $18.8 million in value.
• Atlas Retail Condominiums, consisting of four, street front retail condominium units totaling 5,348 square feet at 3650 Fifth Avenue, San Diego, 92103, has sold for $2,400,000. Bill Shrader with Cushman & Wakefield’s Urban Property Group represented the buyer, Hamon Properties LLC. The seller, Western Pacific Housing Inc., was represented by Chris Rink and Randee Stratton of Cassidy Turley. The units were fully leased at the time of sale to Osteria Origano, Pappalecco, Pure Barre and Beauty by Dolly.
• South Park Commercial Center located at 2211-2225 30th St. and 2220-2226 Fern St,, San Diego, sold for $4,500,000. Cushman & Wakefield represented the seller, 12th & A Hotel Partners, and procured the buyer, Hamon Properties. Three single-story historic buildings were part of the 12,281-square-foot transaction, which included the Rose Grocery Building, Burlingame Garage, and Fire Station No. 9, the oldest standing fire station in the city. All three buildings were renovated in 2007 and are currently leased to a variety of tenants including Stone Brewing Company Store, South Park Fitness and Edward Jones.
• Park Terrace Retail Condominium, a 21,565-square-foot retail condominium located at 1091-1095 K St. and 202-251 Park Blvd., San Diego, sold for $6,800,000. The seller was Park Terrace Development, represented by Cushman & Wakefield. The buyer was 10th & Park LLC, represented by Doug Hamm of Urban California.
• 825 Fifth Ave., an 18,031-square-foot mixed-use, was sold for $3,175,000. The seller was Street Retail West I, LP, represented by Cushman & Wakefield. The buyer was Jorge Sampietro, represented by John Donovan of Donovan & Associates.
• 532 Fourth Ave., a 6,000-square-foot mixed-use building was sold for $1,965,000. The seller was Latifondista LLC, represented by Cushman & Wakefield. The buyer was Jorge Sampietro, represented by John Donovan of Donovan & Associates.
Drivers Could Show Proof of Insurance on Smart Phones
California drivers would have the option to carry proof of auto insurance and vehicle registration information in electronic form — such as a smart phone or other personal device — under a proposed law introduced into the state Assembly. “This legislation falls into the category of eliminating one of the small hassles in life,” said the bill[‘s author, Assemblyman Mike Gatto (D-Los Angeles). “And it brings a couple of out-dated state laws into the electronic age.” Under this measure, auto-insurance providers would be authorized to issue proof of insurance documentation in electronic form, if requested by a consumer. Similarly, the Department of Motor Vehicles (DMV) would also provide electronic versions of registration documents when requested. The final aspect of the bill clarifies to law enforcement officials that electronic documentation is equivalent to the paper form. “It only makes sense for the state where the iPad was designed to remain on the technological forefront,” said Gatto.
Christina Morgan Joins Luce Forward
Luce, Forward, Hamilton & Scripps has hired Christina Morgan for its common interest development group. Morgan’s hire comes weeks prior to Luce Forward’s anticipated merger with McKenna Long & Aldridge LLP on March 1. The combination of firms will result in one of largest real estate practice groups in California. Morgan will coordinate and process applications for public reports with the state Department of Real Estate and will assist Luce Forward’s home builder clients. Morgan has more than 15 years of experience in the building industry and nine years of real estate exsperience.
Steven Ahlquist Joins Silvergate Bank in Carlsbad
Steven D. Ahlquist has joined Silvergate Bank as vice president and manager of its new Carlsbad branch that will open in early April. Ahlquist has more than 30 years of banking experience in Southern California, most of which has been in branch-related management positions for institutions including Southwest Community Bank, First National Bank, Bank of Commerce and Southwest Bank. His prior experience also includes serving as the executive director of resource ministry for the North Coast Church in Vista. Silvergate Bank’s new Carlsbad branch, located at 5810 El Camino Real, Suite D, is currently undergoing space improvements.
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