Daily Business Report-May 27, 2016
The Hotel Metro in East Village.
New Hotel Metro Owner to Convert
Property to Market Rate Studios
Fowler Property Acquisitions LLC has purchased the Hotel Metro in East Village for $6.1 million and intends to convert it into market rate studio apartments.
Hotel Metro was a 195-unit Single-Room Occupancy (SRO) development for low-income residents that was constructed in 1990 on land owned by the San Diego Housing Commission, the seller. It has been unoccupied since November 2015.
Most of the formerly homeless and low-income San Diegans who lived in Hotel Metro relocated into new studio apartments at nearby Alpha Square Apartments, an SDHC partnership development that opened in December 2016, and which includes 201 studios that are more than double the space of the units at Hotel Metro.
The housing commission will use $3 million of the proceeds from the sale of Hotel Metro to provide funding for The 1,000 Homeless Veterans Initiative of Housing First-San Diego, the agency’s three-year homelessness action plan.
Hotel Metro consists of two four-story, non-contiguous buildings situated on 41,812 square feet. The buildings are located on opposite sides of 13th Street, between J Street and Island Avenue.
CBRE represented the housing commission in the transaction.
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New Small Business Refinance Program
Can Lighten Debt Burden on Companies
Small business owners feeling the pressure of commercial mortgage debt and facing the specter of rising interest rates can get relief starting June 24 when a new refinance program is launched by the Small Business Administration (SBA) and provided by CDC Small Business Finance.
“This is a game changer for small businesses that need financial breathing room to grow and create new jobs,” said Kurt Chilcott, president of CDC Small Business Finance, a leading nonprofit SBA lender offering the new refinance loans.
Under the new refinance program, small businesses can take advantage of lower rates, fixed for 20 years, to lighten their monthly debt payments, improve cash flow and stabilize operations. The program allows for refinancing commercial real estate debt as well as other business debt and expenses. The current SBA-504 loan rate is 4.31 percent.
Between $100 billion and $200 billion in commercial real estate debt is projected to mature nationwide in 2016 and 2017. Much of this debt is owed by small businesses still struggling in a lukewarm economy.
The new SBA-504 Refinance program reprises a successful pilot initiative that in 2011-2012 helped more than 2,700 small businesses refinance nearly $7 billion in high-interest debt.
“The SBA Refinance program provided a way to refinance my buildings and use the equity to completely pay off my commercial bank debt,” said Kirk Butler, owner of Cactus Stone and Tile in Phoeniz and 2012 refinance loan recipient.
If interest rates begin to rise, many small businesses will be challenged to qualify for a conventional refinance loan versus an SBA loan. With the new SBA-504 Refinance loan, a bank and SBA-certified lending partner will provide 90 percent financing, leaving a 10 percent down-payment by the small business owner.
Small business owners can find out more by visiting SBA-504 Refinance. They can also discuss prequalification with a CDC Small Business Finance loan expert in California or Arizona.
CDC Small Business Finance is a nonprofit lender that provides capital to small businesses so they can expand, grow and create jobs in California, Arizona and Nevada. The company specializes in SBA lending, but also offers the Community Advantage loan for working capital, equipment, inventory, tenant improvements and business acquisition. In 38 years, CDC has helped create over 170,000 jobs by leveraging more than $12 billion in loans to over 10,000 small businesses. Visit www.cdcloans.com or call (800) 611-5170.
County Investment Fund Reaches
All-Time High of $10.1 Billion
The San Diego County investment pool has reached an all-time high of $10.1 billion, thanks in part to an increase in property tax payments, County Treasurer-Tax Collector Dan McAllister announced.
The pool, managed by the County Treasurer’s office, is a local government money fund comprised of voluntary and mandatory monies from more than 180 public agencies. Mandatory participants include the county, all 42 local public school districts, five community college districts and water and fire districts. Voluntary participants include the San Diego Regional Airport Authority, SANDAG, MTS and other special districts.
“Despite a tough year for the national economy, we were able to reach this peak through sound financial choices and responsible leadership,” said McAllister.
For 16 consecutive years, Standard and Poor’s (S&P) has given its highest ratings to San Diego County’s investment pool: “AAAf” (credit quality) and “S1” (volatility). These ratings indicate extremely strong protection against credit losses associated with the pool’s investments and low sensitivity to changing market conditions due to its low-risk profile and conservative investment policies.
In addition to the team of full-time investment professionals in the Treasurer’s office, an 11-member oversight committee — comprised of county, school, and public agency officials and three public members — reviews the county’s investment policy statement annually. The county also contracts with an independent financial adviser to assist in the pool’s oversight.
Shelter Island Beach Ranks as State’s
Third Worst in ‘Bummer’ List
By City News Service
Ocean water quality at Southern California beaches is continuing to improve, thanks in part to a lack of rain runoff attributable to the continuing drought, but the beach at Shelter Island ranked as the third-worst in the state, according to a report released Thursday.
The environmental group Heal the Bay’s 26th annual Beach Report Card landed Shoreline Beach Park on the “Beach Bummers” list because 14 of 31 water samples exceeded state bacterial standards. The beach in front of several Shelter Island hotels hadn’t received lower than a B grade since 2003, according to the report.
Heal the Bay said that of the 72 monitoring locations on beaches in San Diego County, 62 received an A and eight were given a B.
Shoreline Beach Park was given an F and a spot on Mission Bay labeled the Comfort Station received a D.
“A day at the beach shouldn’t make anyone sick,” said Leslie Griffin, chief water quality scientist for Heal the Bay. “The reassuring news is that if you swim at an open-ocean beach in the summer away from storm drains, creek mouths and piers you stand very little risk of getting ill.”
According to Heal the Bay, swimming at a polluted beach can increase the risk of illness such as stomach flu, ear infections, upper respiratory infections and rashes.
The state’s most polluted beach was Cowell Beach, west of the wharf in Santa Cruz, according to the report.
The 2015-16 “beach bummers” were listed as:
1. Cowell Beach, west of the Wharf Santa Cruz County
2. Clam Beach, near Strawberry Creek Humboldt County
3. Shoreline Beach Park, Shelter Island San Diego County
4. Monarch Beach, north at Salt Creek Orange County
5. Santa Monica Pier Los Angeles County
6. Mother’s Beach, Marina Del Rey Los Angeles County
7. Redondo Municipal Pier, 100 yards south Los Angeles County
8. Candlestick Point-Sunnydale Cove San Francisco County
9. Pillar Point, end of West Point Ave. #7 San Mateo County
10. Pismo Beach Pier, 40 feet south San Luis Obispo County
The report noted that 14 beaches in San Diego County were listed on the group’s Honor Roll, recognizing beaches that received A+ grades during the three time periods included in the report:
San Luis Rey River outlet, foot of Forster Street and St. Malo Beach in Oceanside.
Encina Creek outlet and ends of Cerezo Drive, Palomar Airport Road, Ponto Drive and Poinsettia Lane in Carlsbad.
San Elijo State Park and Seaside State Park in Encinitas.
The foot of Solana Vista Drive and Fletcher Cove in Solana Beach.
And the Ocean Beach Pier and Point Loma Lighthouse in San Diego.
Statewide, 95 percent of the 456 beaches monitored earned A or B grades during the summer months.
USS Theodore Roosevelt’s Strike
Group to Get New Commander
By City News Service
will relieve Rear Adm. Lisa Franchetti next week as commander of the San Diego-based Carrier Strike Group 9 led by the aircraft carrier USS Theodore Roosevelt, the Navy announced Thursday.
The strike group is also composed of the carrier’s air wing, CVW-117, the guided-missile cruisers Bunker Hill and Cape St. George, and seven destroyers.
Vice Adm. Nora Tyson, the U.S. Third Fleet commander, will be the guest speaker.
Franchetti, a 1985 Northwestern University journalism graduate, previously commanded U.S. naval forces in Korea, led a Pacific Partnership humanitarian mission aboard the San Diego-based hospital ship USNS Mercy, and was skipper of the destroyer USS Ross.
Her next assignment will be head of strategic plans and policy for the Joint Chiefs of Staff in Washington, D.C.
Bynum is coming from the nation’s capital, where he served as deputy director of the White House Military Office. The F/A-18 pilot was previously executive assistant to the vice chief of naval operations, executive assistant to the commander of U.S. Naval Air Forces and commander of the air wing aboard the aircraft carrier USS Harry Truman.
Cubic Presents Montgomery Middle
School With ‘Innovate’ Award for
Use of Technology in the Classroom
Cubic Corporation presented Montgomery Middle School of San Diego with the ‘Innovate Award’ for the school’s Makerspace Lab at the Classroom of the Future Foundation’s 13th annual Innovation in Education Awards event held on May 25. Classroom of the Future Foundation is a 501(c)(3) non-profit organization that engages businesses, communities and educational leaders to create innovative learning environments in San Diego County K-12 public schools.
Education leaders, schools and programs that use dynamic educational technology and help prepare students to thrive in a competitive workforce were all honored at the awards ceremony. Montgomery Middle School received the ‘Innovate Award’ for its Makerspace Lab, an engineering lab where students can discover and learn about Arduinos, electronic circuits, mechanical engineering and additive manufacturing using 3-D printers to create products to solve a problem or satisfy a need. The design thinking process encouraged in the school’s lab empowers students to use their creativity and ability to develop real-world solutions.
