Daily Business Report-May 20, 2016

The Fashion Valley mall in San Diego. Retailers will be hurt hardest by the minimum wage increase, according to the Business Forecast. (Courtesy Simon Property Group)

Chamber Business Forecast

Pending Minimum Wage Increase

Weighs Most Heavily on Region’s

Retail and Hotel Industries

The looming minimum wage increase will be felt most heavily in the retail and hotel industries in San Diego County, according to the Business Outlook Index of the San Diego Regional Chamber of Commerce.

The Business Outlook, which surged last month to the highest point since June 2015, has reversed and is now back down to 19.4 where it was in February, according to the chamber’s report. The BOI is nine points lower than a year ago and four points lower than its 50-week average of 23.2. The main factors dragging the Outlook down are a waning confidence in hiring and the imminent increase in the minimum wage.

By 2023, the minimum wage across California will be $15 an hour.

Business confidence for hiring new employees has dropped with only 28 percent of firms reporting they will be bring on at least one new employee, down from 35 percent last month, while 8 percent anticipate letting employees go.

The negative effect of the minimum wage increase is seen across all four of the Index’s metrics: hiring, employee hours, revenue predictions, and business conditions. In addition, the number of companies reporting minimum wage as a new challenge this month has more than doubled from 5 percent to 12 percent.

Businesses citing minimum wage as a new challenge report a poor BOI of 6, while the average for those who do not mention the minimum wage is 23. In fact, 45 percent of firms with minimum wage concerns fall into the “danger zone” where the BOI is less than 12.5. Businesses in the danger zone are candidates for moving out of California.

The report said concerns over an increasing minimum wage are not a problem for some local industries. Cyber firms anticipate increasing hiring during the next three months.

Large businesses are feeling the minimum wage strain most. Firms with more than 50 employees went from a BOI of 28 to 15 currently.

Geographically, businesses in the north inland corridor report more negative effects from minimum wage increases. Businesses in these areas, which includes the Vista Chamber of Commerce, Escondido Chamber of Commerce as well as some members of the San Diego Regional Chamber of Commerce, saw their outlook drop by 15 points in the last month, going from 32 to just 16.

This month’s survey asked what state regulations, if any, have the most negative effect on their business. The minimum wage hike tops the list. Workers’ compensation is the second most burdensome state regulation, regarded as a problem by one-quarter of the business community. Serious complaints about wage and hour laws, paid sick leave, and the California Environmental Quality Act all garner more than 10 percent of the total responses.

The impact of a minimum wage increase varies by industry. Some, such as hospitality and restaurants that tend to have many hourly workers, are far more sensitive to minimum wage increases than others. Six out of ten hotels and restaurants in San Diego County see a minimum wage increase as seriously harming their business. Paid sick leave is also a top issue for the hospitality and restaurant business with 36 percent saying it’s a regulation that negatively affects them.

The impact of minimum wage is worst among those in the retail industry. In that sector, 54 percent say it has the most negative impact of all the state regulations, and 69 percent saying it has an effect. Manufacturing is another sector that suffers under a rising minimum wage.

Most surprising is the finding that the health care and medical field sees minimum wage increases as a problem, the report said. Forty-three percent of those businesses see it as the regulation having the biggest negative effect and two-thirds see it as a problem for them.

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Construction Completed on New

Hoehn Motors Audi Dealership

Construction is complete on the new Hoehn Motors Audi Dealership located at 5425 Paseo Del Norte in Carlsbad. Ware Malcomb provided architecture and interior design services for the project.

The  dealership incorporates the latest technology and meets all CalGreen sustainable building standards. Built from the ground up, the new 54,688-square-foot full-service auto dealership features a high-end showroom, sales offices, public lounge seating areas, retail boutique, interior car delivery room, public Quattro Cafe, mezzanine executive level with offices and a conference room, 28 vehicle service and wash bays, 120 stall parking deck above the offices and showroom, and a complete parts department with a bin supported mezzanine.

The design blends the Spanish/Mediterranean style of architecture required by the city of Carlsbad with the more contemporary design guidelines of Audi. Design elements include a concrete structure clad with large format stone tile and cornice atop, Spanish-style clay tile roof, glass curtain wall in the showroom area, and high-end interior finishes with a glass railing at the mezzanine level.

This is one of four projects Ware Malcomb has worked on for Hoehn Motors Inc. in Southern California. The general contractor for the project was Turner Construction and project mananagement was provided by The Horine Group.

New City Budget Addresses

Delays in 911 Response Times

By City News Service

City officials remained tight-lipped Thursday about a $4.7 million plan to resolve a years-long shortage of officers and dispatchers in the San Diego Police Department, citing a need to first negotiate details with the applicable unions.

The plan was unveiled Tuesday by Mayor Kevin Faulconer, when he proposed revisions to his $3.3 billion budget for the upcoming fiscal year, along with recommendations for using a surplus in the current year.

The shortage of officers has been a well-known and long lasting issue, but the extent of the problem in the SDPD’s dispatch center only recently came to the public’s attention, when a couple in mid-April gave up calling 9-1-1 after several tries and drove their newborn to the hospital when he was bitten
by a dog. The baby later died.

Last fall, two callers who had intruders in their homes in separate incidents each spent several minutes on hold.

Faulconer’s plan calls for $4 million to address officer staffing and $652,000 for additional dispatchers.

Councilman Todd Gloria, the chairman of the panel’s Budget Committee, said he needs to know more about how the money will be spent.

“If you believe, as I do, that these are the two most pressing issues in the short-term for the city…to make sure that we have enough police officers to respond to calls and have enough people to pick up the phone to answer those calls, we owe it to the public to be able to explain more clearly what this looks like,” Gloria said. “It seems to me that if we’re able to affix a number to it, we know what we’re doing.”

He said he believes that “good faith efforts” are underway to resolve the recruiting and retention hurdles, but details are needed sooner rather than later.

Chief Operating Officer Scott Chadwick said negotiations are scheduled to begin in mid-June with the San Diego Police Officers Association, for the officers, and Municipal Employees Association, for the dispatchers, on how to spend the money.

According to Chief Shelley Zimmerman, as of this week, the SDPD employed 166 officers below for what it’s budgeted.

She said there are signs of a turnaround, however, in that only two of the 19 officers who have left the department to other law enforcement agencies in this fiscal year have taken new jobs with the Sheriff’s Department. Of 18 recruits who opted to go elsewhere, only three will become deputies, she said.

Those numbers are well below those of previous years, and could be a sign that a five-year contract with the SDPOA that went into effect last July is having a positive impact, according to Zimmerman.

She said most of the officers who are leaving are going to smaller agencies, many for reasons other than compensation.

In the dispatch center, there were 21 vacancies two weeks ago and now there are 18, Zimmerman said.

The dispatch shortage has become an issue in the mayoral campaign. One of Faulconer’s challengers for reelection, Ed Harris, told a City Council committee yesterday that a suspect in a crime managed to escape because a 9-1-1 caller was placed on hold for 10 minutes.

The council is scheduled to vote on adopting the budget on June 13, and it’s scheduled to take effect July 1.

 

Jacobs Center to Release Town Center

Master Plan for Public Comment

The Jacobs Center for Neighborhood Innovation will release its Town Center Master Plan for public review and comment on June 1.

The 30-day public comment period will commence with an open house on June 1 from 5:30 to 7:30 pm, at the Joe & Vi Jacobs Center’s Celebration Hall, 404 Euclid Ave., San Diego. Starting June 1, the master plan will be available for review and comment online at www.jacobscenter.org/redevelopment. Comments can also be made via email to MasterPlanInfo@JacobsCenter.org, by phone at 619-527-6161, or by regular mail sent to Jacobs Center for Neighborhood Innovation, Re: Town Center Master Plan, 404 Euclid Ave., San Diego, CA 92114.

National planning and architecture firm BNIM was hired to create the Town Center Master Plan to inform the future redevelopment of the 37 acres the Jacobs Center owns in Southeastern San Diego’s Diamond Neighborhoods. The Town Center Master Plan will serve as a guide for the organization’s community development work over the next eight to 10 years.

 

Study: Environmental and Public

Health Benefits of Solar Stack Up

Solar power could deliver $400 billion in environmental and public health benefits throughout the United States by 2050, according to a study from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory and National Renewable Energy Laboratory.

The report, The Environmental and Public Health Benefits of Achieving High Penetrations of Solar Energy in the United States, is part of a series of papers published as part of the U.S. Department of Energy’s On the Path to SunShot study. Read more…

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Fleet Exhibit Explores Line

Between Science Fiction and Fact

Times of San Diego

An exhibit opening Saturday at the Reuben H. Fleet Science Center will explore the connection between science fiction and fact.

Could traveling through wormholes become fact? Will we someday communicate through holograms? Those are some of the questions the exhibit attempts to answer.

Organizers say the displays in “Science Fiction, Science Future” will help museum visitors develop a deeper understanding of how science fiction ideas and concepts might become the science reality of tomorrow.

Steve Snyder, CEO of the museum, said science fiction is important because it inspires the imagination, which is “such a critical part of science and engineering.”

“I first got into science fiction at eight years old,” he said. “Science fiction put me on a path to science fact.”

The new exhibits at the Fleet examine levitation, Star Trek-style quantum transportation, cyborgs, mind control, travel at the speed of light and more ideas from science fiction.

There is also an exhibit of classic science fiction books and magazines from the Department of Special Collections & University Archives at San Diego State University. The exhibit runs through Sept. 5 in the Fleet’s main gallery.