Daily Business Report-July 31, 2017
City Attorney Mara Elliott declared short-term rentals illegal under city code, a take that differed from past city attorneys who’d dubbed the current code too vague to enforce.
Confusion Dominates
Vacation Rental Debate
By Lisa Halverstadt | Voice of San Diego
Confusion about the rules guiding short-term vacation rentals abounds more than two years into a raging debate over how to regulate them.
Eight months ago, the city held a daylong hearing following then-City Councilwoman Sherri Lightner’s failed attempt to bar most rentals and City Council ordered city staffers – for a second time – to return with proposed regulations.
In March, a City Council subcommittee directed staffers on the framework they favored for new regulations for stays where the homeowner remains on site but disagreed on rules for full-home rentals rentals where only visitors stay on site. That same month, City Attorney Mara Elliott released a memo declaring short-term rentals illegal under city code, a take that differed from past city attorneys who’d dubbed the current code too vague to enforce.
Now the City Council’s taken an initial vote on a measure that could add yet another wrinkle to a dysfunctional policy-making process that’s dragged on and on.
The latest chapter in the debacle came Monday during a City Council vote on a slate of housing affordability reforms championed by Mayor Kevin Faulconer and other city leaders.
City Councilwoman Georgette Gomez and others called for a last-minute change to a new regulation aimed at making it easier for San Diegans to build so-called companion units or granny flats, small units that share a lot with homes that can serve as lower-cost housing options.
Gomez wants the city to require a minimum 30-day stay in granny flats, a mandate that would essentially bar using granny flats from being used as vacation rentals.
“I do want to require a 30-day minimum rental period for this in order to move it forward so if that could be added to the motion,” Gomez said as the City Council prepared to vote on the companion unit legislation.
City Councilman Scott Sherman, a crucial proponent of the granny flat and housing reforms, raised a flag. He noted that the City Council is set to hear city staff proposals to regulate short-term rentals in October.
“Don’t know if we’re putting cart before the horse but let’s see how everyone else thinks about it,” Sherman said.
City Council members Barbara Bry, Chris Ward and Lorie Zapf cheered Gomez’s idea.
“My concern obviously is that these units not be built and be turned into short-term vacation rentals,” Bry said. “The purpose of these units is to house San Diegans.”
City Councilman Chris Cate, who has for more than two years called for clarity and rules that allow for short-term rentals, disagreed.
“We’re gonna have this discussion in a vacuum without talking about this whole issue as a comprehensive element,” he said before voting against the granny flat proposal.
Cate unsuccessfully tried to persuade the City Council to hold off on the change and wait for the October vote on new vacation rental regulations.
Sherman, who called Gomez’s motion “a giant mistake,” acknowledged he too had concerns. Sherman said he feared the Coastal Commission, which has argued for the need to maintain low-cost rental options on the coast, would reject Gomez’s addition and that Airbnb rentals would be relegated to coastal areas where complaints about them have been most rampant. But he said he didn’t want to reject a policy he supported based on a last-minute addition he didn’t.
The City Council must vote to approve the granny flat change again in September before it can go into effect.
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USS Gerald Ford Completes
First Arrested Landing and Launch
Less than one week after it was commissioned, the U.S. Navy’s newest aircraft carrier, USS Gerald R. Ford, launched and recovered its first fixed-wing aircraft on Friday, off the coast of Virginia.
Lt. Cmdr. Jamie Struck of Tallmedge, Ohio piloted the F/A-18F Superhornet.
The Superhornet caught the number two arresting wire of Ford’s advanced arresting gear (AAG) system and was launched from catapult one using the electromagnetic launch system (EMALS). Both systems were made by General Atomics in San Diego.
“Today, USS Gerald R. Ford made history with the successful landing and launching of aircraft from VX-23 using the AAG and EMALS,” said Adm. Phil Davidson, commander, U.S. Fleet Forces. “Great work by the Ford team and all the engineers who have worked hard to get the ship ready for this milestone.”
“AAG and EMALS have been successfully tested ashore at Lakehurst, New Jersey, but this is the first shipboard recovery and launch of a fleet fixed-wing aircraft,” said Capt. Rick McCormack, Ford’s commanding officer.
The software-controlled AAG is a modular, integrated system that consists of energy absorbers, power conditioning equipment and digital controls, with architecture that provides built-in test and diagnostics, resulting in lower maintenance and manpower requirements. AAG is designed to provide higher reliability and safety margins, as well as to allow for the arrestment of a greater range of aircraft and reduce the fatigue impact load to the aircraft.
The mission and function of EMALS remains the same as the traditional steam catapult; however, it employs entirely different technologies. It delivers necessary higher-launch energy capacity, improvements in system maintenance, increased reliability and efficiency, and more accurate end-speed control and smooth acceleration. EMALS is designed to expand the operational capability of the Navy’s future carriers to include all current and future planned carrier aircraft – from lightweight unmanned aircraft to heavy strike fighters.
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The one-bedrooms start in the high-$1 million range.
Unveiling Event Set for Aug. 6
at Luxury La Jolla Condominiums
Muse La Jolla, a new luxury residential community located at 1020 Prospect St. in La Jolla, will host an unveiling event on Sunday, Aug. 6, as it celebrates the completion of the first three floors at the seaside property.
Current prices: the one-bedrooms start in the high $1 million range. Penthouse units go for over $10 million. Two units have been sold.
The four-story building, which for decades served as a commercial office building, has been transformed into 16 residences featuring one-, two- and three-bedroom floor plans. The four penthouse units include private rooftop terraces with direct access. The first-floor units include private ocean-view patios with 1,000 square feet of additional living space.
One of Muse La Jolla’s penthouse units, priced at $10.12 million, set a record price for a condominium in San Diego County, according to the Greater San Diego Association of Realtors.
The developer for Muse La Jolla is a joint venture whose managing member is an affiliate of San Diego-based real estate developer Hammer Ventures. The building was originally designed by modernist architects Ladd & Kelsey in the 1960s.
Information: (855) 703-6873.
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SkySafe Secures $11.5 Million
in Seed Funding
SkySafe, a San Diego-based provider of drone defense and airspace control solutions, has received $11.5 million in Series A funding.
The round was led by Andreessen Horowitz. In conjunction with the funding, Andreessen Horowitz’ general partner Lars Dalgaard joined SkySafe’s board.
The company, which has also won a $1.5 million contract with the Department of Defense, providing mobile counter-UAS systems to Naval Special Warfare units for protection from this new drone threat, intends to use the funds to expand the team and deploy the systems to the field.
Founded in 2015 in San Diego, SkySafe leverages advanced radio engineering and deep threat analysis to provide drone defense and airspace control solutions to military, public safety, and commercial customers.
The company’s team consists of drone experts from MIT, UC San Diego, and the Air Force Research Lab.
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Audobon Society Buys Oceanside
Land to Keep it in Open Space
The Audobon Society has purchased 31 acres of vacant land at Muirfield and Rivertree drives in Oceanside for $1.56 million and plans to conserve the property as open space in perpetuity. The land, located near Camp Pendleton, is currently untitled.
The sellers, Scott and David Cheatham, were represented by Lee & Associates. The Audobon Society was represented by Land Conservation Brokerage.
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Mixed-Use Property Near East Village Sold for $1.15M
A mixed used property located at 2450-2452 Market St., less than a mile from San Diego’s East Village and future Maker’s Quarter, has been sold for $1.15 million to Unite Here Local 30-San Diego and Imperial Counties. The seller was a private trust. Unite Here represents workers throughout the U.S. and Canada who work in the hotel, gaming, food service, airport, textile, manufacturing, distribution, laundry, and transportation industries.
The two-building property contains a total of 4,709 square feet, including ground level retail, office, warehouse, and an upstairs apartment. The back building features a courtyard which can also be utilized as parking.
Lee & Associates represented the seller. CBRE represented the buyer.
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Nobel Laureate Commits $4 Million
to UC San Diego Rady School of Management
Nobel laureate Harry Markowitz, an adjunct professor at the Rady School of Management at the University of California San Diego since the early days of the business school, has committed $4 million to establish the Barbara and Harry Markowitz Endowed Fellowship to support students at the Rady School of Management through the Markowitz Fellows Program. The fellowship program is designed to attract and support the most outstanding students in the area of the decision sciences, including mathematics, finance and operations research.
In addition, Markowitz will donate to the Rady School his prestigious medals, including the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Nobel Prize) awarded to Markowitz in 1990; the Wharton-Jacobs Levy Prize awarded in 2013; and the John von Neumann Theory Prize awarded in 1989. In an especially touching gift, Markowitz will donate his Hamilton “Traffic Special” pocket watch, purchased in 1950, which he has used to track time during his illustrious career. All Markowitz’ gifts contribute to the Campaign for UC San Diego.
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USS Rafael Peralta Commissioned
