Daily Business Report-July 1, 2016
Greg Deering of Deering Banjo Company, a MetroConnect Program selection, is shown with the 40th anniversary Limited Edition White Oak Banjo. (Credit: Deering Banjo Company)
15 San Diego Companies to Get
$10,000 Each to Speed Global Plans
World Trade Center San Diego on Thursday announced the 15 companies selected to participate in a comprehensive program to accelerate their international expansion plans.
The MetroConnect Program, as it is called, provides a JPMorgan Chase $10,000 grant to each of the selected companies to assist with their international efforts.
According to the Brookings Institution, companies that are global pay their employees higher wages, are less likely to go out of business and spur more efficient development of technology and R&D. In total, 73 San Diego companies applied to the MetroConnect Program. Companies were selected based on criteria including potential for export growth, development of an international strategy and potential benefit the company would receive from international expansion.
The program was unveiled by officials from World Trade Center San Diego, JPMorgan Chase, Mayor Kevin Faulconer and business and civic leaders.
“The MetroConnect Program helps us to foster our startup community to provide phenomenal opportunities for San Diego entrepreneurs abroad,” said Faulconer. “I am proud of the 15 companies selected by MetroConnect, which represent virtually every sector of our region’s innovation economy, from life sciences to maritime tech and wireless analytics. It is my hope that they will use our MetroConnect Program to write new chapters in San Diego’s success story.”
The 15 program participants:
Aurora Spine
AVACEN Medical
Calbiotech
Deering Banjo Company
ElliptiGO Inc.
GroundMetrics
Hyperikon
INOVA Drone
MANTA Instruments Inc.
Ocean Aero
Ocean Reef
Rough Draft Brewing Co.
Solatube Worldwide Sales
Vault RMS
Whova
From Deering Banjo, the largest banjo manufacturing company in the U.S., to Ocean Aero, an autonomous underwater unmanned systems company, the 2016 MetroConnect companies represent a diverse cross section of San Diego’s innovation economy.
Support services that will be available to the companies include:
• a dedicated trade and investment manager at WTC San Diego to support company participants in deploying overseas strategies during the grant period.
• Access to workshops that address export compliance, financing and fundraising and global marketing.
• Reduced airfare on the Japan Airlines direct flight from San Diego to Tokyo.
• Free access to SYSTRAN software for website translation and customer service needs.
• Consideration to compete for an additional $35,000 during the MetroConnect Grand Prize Pitchfest in November 2016.
“JPMorgan Chase is pleased to support these San Diego businesses that are ready to grow internationally,” said Tim West, head of JPMorgan Chase’s Middle Market Commercial Banking practice in San Diego. “The expanded MetroConnect Program will not only enable these local firms to spend time in their target international markets but they will also benefit from educational seminars on how to export and find the right service providers. In time, we hope their international expansion efforts will lead to growth of the San Diego economy.”
MetroConnect funds can be used for a variety for global services including travel (to and from target markets), participation in trade shows, establishment of a foreign subsidiary, foreign language translation of marketing materials and more.
In 2015, MetroConnect Grand Prize Winner Cypher Genomics was acquired by San Diego-based Human Longevity Inc. after using the money to fund a partnership with Genomics England. Pharmaceutical company IriSys —another 2015 participant — opened a business development office in Shanghai.
“Global connectivity is crucial to San Diego’s economic future, and SMEs are increasingly its driver,” said Nikia Clarke, executive director of World Trade Center San Diego. “Thanks to JPMorgan Chase, we are continuing to build out a comprehensive export support program to ensure that San Diego’s goods, services and technologies are competing overseas.”
NASSCO Awarded $3 Billion
Contract to Build Six Navy Oilers
General Dynamics NASSCO has been awarded a $3 billion contract by the Navy for construction of six next-generation of fleet oilers.
The John Lewis-class ships are designed to transfer fuel to Navy surface ships operating at sea. the oilers will have the capacity to carry 156,000 barrels of oil, including the Navy’s new bio fuels. The oilers also offer a significant dry cargo capacity, aviation capability and will reach a speed of 20 knots.
The first ship of the program was funded in the FY2016 budget, allowing engineering and design work to begin immediately. The Navy’s FY2017 budget requests advance procurement for a second ship, with procurement expected to occur in FY2018.
“We are pleased to be building the next generation of oilers and participating in the future design efforts of the LX(R), two very important ship programs for the fleet,” said Fred Harris, president of General Dynamics NASSCO and Bath Iron Works. “With this award, we will now proceed with engineering and design work.”
Currently, the San Diego-based shipbuilder is under contract to construct its fourth Expeditionary Sea Base for the Navy, USNS Hershel Williams, and is under contract to procure long-lead time material and engineering support for a fifth ESB.
Arena Pharmaceuticals
To Cut 3/4 of Workforce
Yahoo Finance
San Diego-based Arena Pharmaceuticals Inc. announced a 3/4 cut in its workforce and said that it will be shifting its priorities to its proprietary clinical stage pipeline.
The U.S. workforce will be cut by approximately 100 employees by Aug 31, mainly in the areas of research, manufacturing and G&A. The company estimates that this move will reduce annualized cash expenditures for personnel by about $17 million and related other operating expenses of between $6-8 million.
Additional cost reduction measures include reductions at the company’s Swiss manufacturing facility. Arena expects to incur restructuring charges of about $6.1 million (a majority of which are cash expenditures), mostly in the second quarter of 2016.
Arena has obesity treatment Belviq in itsportfolio.
Mayor Revives Plan to Build
Bypass Bridge at Balboa Park
By City News Service
Once killed off in court, a plan to remove vehicles from the Plaza de Panama in Balboa Park was revived Thursday by Mayor Kevin Faulconer, who also proposed a ballot measure on funding upgrades at Mission Bay and other regional parks.
The Balboa Park plan would remove 6.3 acres of roadways and parking lots and return them to park-like settings, build a bypass bridge to direct traffic away from the center of the park and construct a three-story underground parking structure with nearly 800 spaces.
The plan was proposed by Qualcomm co-founder Irwin Jacobs and supported by the City Council in 2012, but opponents were able to convince a Superior Court judge the following February that the project violated San Diego’s municipal code.
According to the mayor’s office, the ruling was later overturned on appeal, and the state Supreme Court refused to hear the case.
“The judicial system erroneously delayed these park improvements, but ultimately justice was done,” City Attorney Jan Goldsmith said. “Now the project can move forward and we can reclaim these plazas and promenades for future generations to enjoy.”
Jacobs, chairman of the Plaza de Panama Committee, said its members are excited about the plan and will raise the money needed to carry it out.
“Although we were not able to realize the Plaza de Panama project as a component of the (2015) centennial celebration, its completion just a few years later will forever remind us of the inheritance bestowed by the visionary founders and be a source of enjoyment for ourselves and future generations,” Jacobs said.
Along with donations, the project will be funded by city infrastructure dollars and parking garage revenues, according to the mayor’s office.
Regarding Mission Bay, Faulconer is proposing a ballot measure that would extend a provision of the City Charter that provides a funding stream for improvements.
Currently, the section that’s in effect until 2039 directs any Mission Bay lease revenue above $20 million a year to capital investments in Mission Bay Park (75 percent) and other regional parks like Balboa Park and Mission Trails (25 percent).
The change would extend the provision an extra 30 years and give the other regional parks a 35 percent slice of the lease revenue pie, according to the mayor’s office.
“Just as our forbearers who created Mission Bay Park and Balboa Park did before us, it’s now our opportunity to leave our generation’s mark on San Diego’s park space and historic treasures,” Faulconer said.
“Our regional parks are among San Diego’s most valuable assets,” the mayor said. “We’re taking two major steps that will lead to an investment of hundreds of millions of dollars in Mission Bay Park, Balboa Park and other regional parks to ensure they are preserved and enhanced for future generations to enjoy.”
The proposal will have to receive City Council approval to make it onto an election ballot.
NuVasive Agrees to Settle Patent
Litigation With Medtronic
NuVasive Inc., a San Diego medical device company focused on transforming spine surgery, has agreed to settle its ongoing patent litigation with Medtronic and certain of its subsidiaries.
NuVasive and Medtronic intend to enter into a definitive settlement agreement within 15 days, after which the company will make a one-time payment of $45 million to Medtronic, and the parties will release each other from any and all liabilities arising out of the litigation.
NuVasive and Medtronic reached agreement on terms for the settlement of the previously disclosed patent infringement lawsuits between the companies, as well as the withdrawal from related proceedings in the United States Patent and Trademark Office.
As part of the settlement and in exchange for the one-time payment, NuVasive and Medtronic also agreed to certain licenses and other rights, including a standstill of patent litigation and a dispute resolution process to address allegations of patent infringement going forward.
California Transportation Commission
OKs $103 Million to San Diego Region
The California Transportation Commission voted Thursday to allocate $103.7 million to the San Diego region to extend carpool lanes on Interstate 5 and add a second track to a portion of the coastal rail line in North County.
The funding will enable the San Diego Association of Governments (SANDAG) and the California Department of Transportation to begin construction on a $700 million package of projects, aimed to accomplish the following goals:
• Expand travel choices by extending the carpool lanes on I-5 from Lomas Santa Fe Drive to State Route 78.
• Increase the efficiency and reliability of the rail corridor with two double tracking projects across the San Elijo and Batiquitos Lagoons.
• Add bike/pedestrian improvements in Encinitas and Carlsbad. The interchanges at Encinitas Boulevard and Santa Fe Drive will be upgraded with new bike/pedestrian paths.
• Restore the San Elijo Lagoon, specifically to improve tidal flow and water quality and expand the salt marsh habitat.
Construction is scheduled to begin in late 2016. The projects comprise the first phase of the North Coast Corridor Program, a $6 billion investment in infrastructure and environmental improvements along the coast between La Jolla and Oceanside over the next 30 years.
Schools Serving Military Families in
Tierrasanta in Line for $52M in Upgrades
By City News Service
Schools serving military families in Tierrasanta are in line for $52 million in upgrades thanks to a large Defense Department grant, the San Diego Unified School District announced Thursday.
The project will result in the replacement of 30 aging portable classrooms at Hancock and Miller elementary schools, along with better air conditioning, upgrades to cafeteria facilities, new sidewalks and stairs, fire safety improvements and upgrades to technology infrastructure.
“We work every day to make sure our schools are worthy of the children we serve,” Superintendent Cindy Marten said. “It is especially important at this time of year to honor our commitment to our military families. We want our men and women in uniform to know we value their service, and we appreciate the opportunity to serve their children in our schools.”
District officials said the defense grant will pay for $42 million of the project’s cost, while the district’s Proposition Z construction bond will chip in $10 million.
Construction is scheduled to begin this month, and both schools will remain open while work continues through fall 2018, according to the district.
