Daily Business Report — Aug. 11, 2014
The San Diego Convention Center
More Bad News for
The Convention Center
By Liam Dillon | Voice of San Diego
Late summer is supposed to be the time of year where San Diego’s Convention Center shines the brightest. The mega extravaganza that is Comic-Con brings costumed characters, the national media and big money to town — though not as much as boosters like to say.
This time things haven’t gone according to script. Late last month, an appellate court knocked down the financing plan for the planned $520 million expansion, sending a crushing blow to a project that’s been on the drawing board for more than six years. We also recently learned that the existing center is in such disrepair that it’s literally “rotting,” according to a center spokesman. And the most prominent critic of Convention Center expansions nationwide is getting high praise for his new book that argues that they are a waste of cities’ money.
City leaders are scrambling to figure out what they’re going to do about the expansion. Appeal or not? Have a public vote or not? Make a deal with the Chargers to build a Convention Center-new stadium hybrid (a Convadium!) or not?
While they’re figuring this out, they might want to find some cash to spruce up the Convention Center the city already has. Even with hundreds of millions of dollars on the table to expand the center, city leaders never thought to add the $36 million more the existing center needs to keep it from falling apart. Convention Center spokesman Steve Johnson tweeted a picture of the “rotting” Sails Pavilion, which is five years past its lifespan, he said.
Five years ago, Johnson called University of Texas at San Antonio professor Heywood Sanders a “whack job” for suggesting that the benefits of San Diego’s Convention Center expansion were overstated. Sanders has now written a book called “Convention Center Follies,” where he says centers don’t provide community-wide economic benefit or growth as supporters say, but they do boost the downtowns where they’re typically located.
From Marathons to Mud Runs,
Events Boost San Diego’s Economy
The recent court ruling overturning funding for the San Diego Convention Center expansion has some worried that the city’s tourism industry could take a hit. But a new report out Monday points to another way San Diego attracts visitors: through races like marathons, half-marathons and triathlons.
Vince Vasquez, a senior policy analyst at the National University System Institute for Policy Research, found that 134,000 people competed in San Diego endurance events like marathons and triathlons in 2013, and says those races created about $64 million in economic output and directly or indirectly supported 583 jobs.
That’s slightly more than the estimated 130,000 who attended Comic-Con. The annual convention is reported to bring $178 million in economic impact, although some economic researchers say it could be less.
Vasquez found participation in “endurance events,” which includes everything from marathons to mud runs, is growing.
“It’s a multibillion-dollar industry for endurance events and this whole lifestyle industry is something that San Diego embraces really well,” he said.
— KPBS
One Company That’s Moving Back to San Diego
At least some companies that flee California come back. The latest example is formerly La Jolla-based Kashi, which moved to Kellogg’s Battle Creek, Mich. hub last March. Kellogg’s, which owns the natural foods company, confirmed that Kashi is headed back to its old neighborhood and will operate independently from the breakfast food giant.
Kellogg’s didn’t specify the advantages behind Kashi’s return to San Diego but hinted that the move will translate into more dynamic offerings. “Re-establishing Kashi as a stand-alone business enables us to take a leadership role in industry trends and be much quicker to market with the progressive nutrition innovations Kashi consumers want,” Kellogg’s spokeswoman Kris Charles said.
She declined to say whether San Diego’s workforce offerings or regional connections with suppliers or developers played a role.
The move could signal Kellogg’s plans to eventually sell Kashi if sales don’t improve.
Kellogg’s CEO John Bryant said last year that the company wasn’t “happy with the performance of our Kashi business” and planned to work to “get it back in the right direction.”
Food Business News reported that Kellogg’s hired former Kashi chief David Denholm to once again lead the natural foods subsidiary, which has continued to perform below its peak. “We’ll need to innovate, renovate and get back on our front foot on that business,” Bryant said in a July 31 earnings call. “I think we’ll be doing that through 2015 and 2016.”
Bryant said moving the company back to La Jolla would speed up that process.
— Voice of San Diego
Landmark Aviation Completes Construction
Of Fixed-Base Operation at Lindbergh Field
Landmark Aviation has completed its state-of-the-art fixed-base operation at San Diego International Airport. The FBO is located at 3300 Terminal Link Road, near the intersection of Sassafras Street and Pacific Highway.
“The project took a lot of collective effort and dedication over the last two years and we are very impressed with the finished product,” said Dan Bucaro, Landmark president and CEO. “We are excited to offer our customers a more spacious and modern facility, boasting many amenities. We couldn’t have done this without the support of the San Diego County Regional Airport Authority.”
The FBO campus features a 19,000-square-foot terminal, a 250,000-square-
foot ramp and five hangars on 12.4 acres. Its amenities include office space, a snooze room, VIP lounge, fitness center, viewing deck, gourmet café, and an executive conference room. Landmark began operating out of its new home on Aug. 1.
Several companies were involved in the project including Turner Construction Co., Rivers and Christian, Tammy Edmonds Design, KPFF Consulting Engineers, Kleinfelder, NV5 Nolte Associates, Spurlock Poirier Landscape Architects, and TMAD Taylor & Gaines.
Seaside Courier Sold to Encinitas Resident
ENCINITAS — Mission Publishing Group announced the sale of Seaside Courier to Encinitas resident Alice Jacobson.
“We’re very proud of the successes Seaside Courier had in a short amount of time,” said Jim Madaffer, publisher of Mission Publishing Group. “We’re confident that community leader Alice Jacobson will continue to provide quality local news to residents.”
Seaside Courier was launched in December 2013 and covers San Diego County’s north coastal cities and communities including Oceanside, Carlsbad, Encinitas, Solana Beach and Del Mar.
The newspaper currently has a monthly readership of 95,000 and is the only newspaper that is directly mailed to residents in Encinitas and Carlsbad. The newspaper can also be found at 200 high-traffic newsstand locations in the region.
Jacobson, a 33-year resident of Encinitas, is involved in the community. In the past, she served on the Leucadia Community Advisory Board and the city’s Environmental Commission and the Planning Commission. She currently serves on the Coastal Community Foundation’s board of directors.
Jacobson plans to increase coverage and readership with the purchase.
Jacobson is joined by Maggie Avants, a longtime journalist, who will serve as editor. The sale includes the newspaper’s news site, www.seasidecourier.com.
Defense Contractors With Local
Links Make Top 100 Defense List
Six of the top defense firms in a new top-100 list have San Diego connections, including Lockheed Martin — which topped the list with $40.5 billion in defense-related revenue — BAE and General Dynamics.
The San Diego Regional Economic Development Corporation estimates that the defense sector contributes $20.6 billion to the local economy, which is bolstered by the long-time presence of Navy and Marine outposts throughout the county.
The key defense firms in the region, according to the EDC, are Lockheed Martin, BAE, General Atomics, UTC Aerospace Systems, Raytheon, ViaSat, Cubic, General Dynamics/NASSCO, Northrop Grumman, SAIC and L-3 Communications.
Defense News ranked the top 100 defense firms in terms of revenue derived from defense-related deals using 2013 revenue. Several of the firms with local connections were ranked, including six in the top 15:
• Lockheed Martin made $40.5 billion on defense. That’s nearly 90 percent of the company’s total revenue.
• BAE, at number 3, made $28 billion on defense, 94 percent of company revenue.
• Raytheon, at number 4, made $22 billion on defense, 93 percent of company revenue.
• Northrop Grumman, at number 5, made $19.5 billion on defense, 79 percent of company revenue.
• General Dynamics, at number 6, made $18.8 billion on defense, 60 percent of company revenue.
• L-3 Communications, at number 11, made $10.3 billion on defense, 82 percent of company revenue.
Moss Adams to Relocate to La Jolla Commons
Moss Adams LLP has signed a 10-year, $9.47 million lease to relocate its San Diego regional offices to the top floor of the new La Jolla Commons Tower I, where it will occupy 18,611 square feet. The company will move into the space, located on the 13th floor of the tower, in the first quarter of 2015. The building is at 4747 Executive Drive.
The company is relocating from offices they have occupied in Stonecrest in Kearny Mesa for the past 10 years.
The lease was signed with lessor HSPF La Jolla Commons I Investors LLC. The brokers were Cassidy Turley and Cushman & Wakefield.
Cygnet Theatre Names Operations Manager
Manny Fernandes, founding board member of the Cygnet Theatre, has been promoted to the role of operations manager where he will oversee front of house and patron services staff along with the daily operations at Cygnet’s Old Town Theatre. Fernandes served as the first board president and in 2007 he left the board to join the staff full-time.
Fernandes has a long history with the Old Town Theatre, previously serving as director of ticketing and technology for Miracle Theatre Productions from 1999-2006. In addition to his duties as operations manager, he is also a resident artist, having appeared in more than a dozen productions.
Autumn Doermann-Rojas will take over Fernances’ former marketing director responsibilities. She was with KGTV/10News for seven years, where she worked with advertising clients on marketing and promotional campaigns, major station initiatives and community outreach projects.
Target Identified For Rare
Neurological Disease In Men
Researchers at UC San Diego School of Medicine have identified the mechanism by which a rare, inherited neurodegenerative disease causes often crippling muscle weakness in men, in addition to reduced fertility. The study, published August 10 in the journal Nature Neuroscience, shows that a gene mutation long recognized as a key to the development of Kennedy’s disease impairs the body’s ability to degrade, remove and recycle clumps of “trash” proteins that may otherwise build up on neurons, progressively impairing their ability to control muscle contraction. This mechanism, called autophagy, is akin to a garbage disposal system and is the only way for the body to purge itself of non-working, misshapen trash proteins.
“We’ve known since the mid-1990s that Alzheimer’s disease, Parkinson’s disease and Huntington’s disease are caused by the accumulation of misfolded proteins that should have been degraded, but cannot be turned over,” said senior author Albert La Spada. “The value of this study is that it identifies a target for halting the progression of protein build-up, not just in this rare disease, but in many other diseases that are associated with impaired autophagy pathway function.”
S.D. Employers Association Leadership Series
San Diego Employers Association’s Summer Strategic Leadership Series on Wednesday, Aug. 13, will feature San Diego District Attorney Bonnie Dumanis, Sheriff Bill Gore and Police Chief Shelley Zimmerman and will be moderated by Jerry Sanders, president and CEO of the San Diego Regional Chamber of Commerce. The speakers will share their personal anecdotes about climbing the leadership ladder, tackling workplace challenges, enacting their plans for departmental success, and working together on some of the nation’s most productive inter-agency collaborations.
The program will be held from 11:30 a.m. to 1:30 p.m. at the Crowne Plaza Mission Valley, 2270 Hotel Circle North, San Diego. SDEA Members are $49, nonmembers $59.
Deputy City Attorney Recognized
For Billion-Dollar Lead Paint Victory
San Diego Deputy City Attorney Paul F. Prather, who along with attorneys from San Francisco, Los Angeles and seven other California cities successfully fought for lead paint cleanup, was named one of public Justice’s 2014 Trial Lawyers of the Year.
The 27 attorney team won a $1.15 billion judgment against paint manufacturers earlier this year, successfully arguing that lead paint in homes is a public nuisance that creates a risk of harm to children who reside in or visit those homes. If the case is upheld on appeal, San Diego stands to gain $80.5 million to be used exclusively for cleanup of lead paint in private homes in the city.
“Lead paint is the primary source of lead poisoning for children. Studies have shown that even low levels of exposure to dust from lead paint can cause irreversible brain damage. We had a great team of attorneys working on this case and are very pleased with the current outcome,” Prather said.
A California judge in March 2014 ordered Sherwin-Williams Co., NL Industries Inc. and ConAgra Grocery Products LLC to pay $1.15 billion to fund a government-run program to pay for inspections and lead removal in tens of thousands of California homes.
— Times of San Diego
Medical Office Building Sold for $5.93 Million
OCEANSIDE –Oceanview Plaza, a 25,386-square-foot medical office building in Oceanside, has been sold to Trollman Properties LLC for $5.93 million. The seller was Oceanview Plaza Investors LLC. the building was built in 1988. Current tenants include a variety of medical and dental practices as well as the Department of Homeland Security, Healthcare Academy of California and Wells Fargo Home Mortgage. Brokers were Cushman & Wakefield and Colliers International.
