Daily Business Report-Aug. 10, 2018
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California may mandate a woman in the boardroom
— but businesses are fighting it
By Antoinette Siu | CALmatters
California is moving toward becoming the first state to require companies to have women on their boards—assuming the idea could survive a likely court challenge.
Sparked by debates around fair pay, sexual harassment and workplace culture, two female state senators are spearheading a bill to promote greater gender representation in corporate decision-making. Of the 445 publicly traded companies in California, a quarter of them lack a single woman in their boardrooms.
SB 826, which won Senate approval with only Democratic votes and has until the end of August to clear the Assembly, would require publicly held companies headquartered in California to have at least one woman on their boards of directors by end of next year. By 2021, companies with boards of five directors must have at least two women, and companies with six-member boards must have at least three women. Firms failing to comply would face a fine.
“Gender diversity brings a variety of perspectives to the table that can help foster new and innovative ideas,” said Democratic Sen. Hannah Beth Jackson of Santa Barbara, who is sponsoring the bill with Senate President Pro Tem Toni Atkins of San Diego. “It’s not only the right thing to do, it’s good for a company’s bottom line.”
Yet critics of the bill say it violates the federal and state constitutions. Business associations say the rule would require companies to discriminate against men wanting to serve on boards, as well as conflict with corporate law that says the internal affairs of a corporation should be governed by the state law in which it is incorporated. This bill would apply to companies headquartered in California.
Jennifer Barrera, senior vice president of policy at the California Chamber of Commerce, argued against the bill and said it only focuses “on one aspect of diversity” by singling out gender. “This bill basically mandates that we hire the woman above anybody else who we may be fulfilling for purposes of diversity,” she said at a hearing.
Similarly, a legislative analysis of the bill cautioned that it could get challenged on equal protection grounds, and that it would be difficult to defend, requiring the state to prove a compelling government interest in such a quota system for a private corporation.
Five years ago, California was the first state to pass a resolution, authored by Jackson, calling on public companies to increase gender diversity. In response, about 20 percent of the companies headquartered in the state followed through with putting women on their boards, according to the research firm Board Governance Research. But the resolution was non-binding and expired in December 2016.
Other countries have been more proactive. Norway in 2007 was the first country to pass a law requiring 40 percent of corporate board seats be held by women, and Germany set a 30 percent requirement in 2015. Spain, France and Italy have also set quotas for public firms.
In California, smaller companies have fewer female directors. Out of 50 companies with the lowest revenues, 48 percent have no female directors, according to Board Governance Research. Only 8 percent of their board seats are held by women.
The 2017 study said larger companies did a better job of appointing women, with all 50 of the highest-revenue companies having at least one female director and 23 percent of board seats held by women.
“The main issue is still that a lot of companies headquartered here don’t have women on their boards,” said Annalisa Barrett, clinical professor of finance at the University of San Diego’s School of Business. “We quite often like to think of California as progressive and a leader on social issues, so that’s kind of disappointing.”
Barrett publishes an annual report of women on boards in California. Public companies are major employers in the state, and their financial performance has a big impact on public pension funds, mutual funds and investment portfolios. “Financial performance does really impact the broader community,” she said.
The National Association of Women Business Owners, sponsor of the bill, says an economy as big as California’s ought to “set an example globally for enlightened business practice.” In a letter of support, the association cites studies that suggest corporations with female directors perform better than those with no women on their boards.
One University of California, Davis study did find that companies with more women serving on their boards saw a higher return on assets and equity, but the author acknowledges this may not suggest a cause-and-effect.
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CityMark buys Golden Hill
property for townhome project
CityMark has acquired a one acre property in San Diego’s Golden Hill neighborhood for $2.1 million. The firm plans to develop a 19-unit townhome project on the site located at 32nd and C Streets.
Colliers International represented the seller, the Starcevic Family Trust.
“This was a unique acquisition for CityMark because it is the largest undeveloped parcel in Golden Hill and was owned by the sellers for more than 50 years,” said Victor Krebs of Colliers International. “The project will provide attractive new homes in the desirable Golden Hill and North Park neighborhoods.”
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Ashford Retail Center in Clairement sells for $5.25 million
Ashford Retail Center, a neighborhood center Clairemont, has been sold for $5.25 million to ERE Real Estate LLC. The seller was GME Properties.
CBRE handled the transaction.
The Ashford Retail Center located at 3536-3550 Ashford St., is shadow anchored by Carnival Market. Other tenants in the center include Verizon Wireless, Domino’s Pizza and a number of other service providers.
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Future of a third of California is uncertain
Dan Morain | CALmatters
Climate change, megafires, and population pressures are prompting officials to question how much of California’s forests are sustainable.
The state Department of Forestry and Fire Protection reports:
“As global warming increases, there are concerns that forests will struggle to adapt to rapid changes in climate and altered disturbance regimes. As a result, some forest types may not be sustainable under future climate conditions.”
Though city dwellers might not realize it, a third of California is forestland, 32 million acres, roughly the size of Louisiana. As much as 8 percent of that land could be lost to climate change, the report says.
Fire damage has increased quickly: an average of 708,000 acres burned annually since 2000. That average was 343,000 acres between 1980 and 1999.
Complicating matters: More than 1 million homes are in parts of the state designated as “very high fire hazard severity zone.”
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More than 25,000 property taxpayers now in default
San Diego County Treasurer-Tax Collector Dan McAllister announced Thursday that his office mailed more than 25,000 defaulted bills to property taxpayers who failed to pay all of their 2017-2018 property taxes.
“In June, we sent 33,000 reminder notices to give late taxpayers one last chance to pay before the default deadline. Still, this week, we had to send 25,299 defaulted bills — 2,787 more than last year,” said McAllister. “Nevertheless, our property tax collection rate was 99.2 percent, which is one of the highest in the state. This shows that the majority of San Diego property owners pay what they owe and pay on time.”
All past due taxes went into default on July 1, 2018. Each month a bill goes unpaid, it incurs an extra 1.5 percent penalty, adding up to 18 percent per year. The total amount of defaulted taxes due is $105 million, compared to $101 million last year.
All late bills have already been charged a 10 percent penalty for each unpaid installment, and penalties will continue to accrue until the bill is paid in full. Payments can be made immediately online at sdttc.com, where free e-check is the fastest and easiest way to pay.
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Cuyamaca College enlists independent
repair shops to add new degree program
Cuyamaca College’s Automotive Technology program and a coalition of independent repair shops are primed to launch a new associate degree program that will enhance paid hands-on training opportunities and lead to more jobs for graduates.
The Automotive Service Councils of California (ASCCA) Associate of Science Degree program is the state’s first associate degree program that combines classroom and online teaching with on-the-job training at independent repair shops. The program will kick off at 1 p.m. Friday, Sept. 7, at Cuyamaca College’s Student Center in Room I-207. High school and college auto tech instructors and shop owners are encouraged to attend the free event, part of a three-day conference of ASCCA, the largest independent automotive repair council in the state whose members represent all areas of the auto repair industry.
“We want instructors at the high schools and other colleges to attend the launching because we want this to be a program they can recommend to their students that combines work experience with a solid education plan,” said Brad McCombs, an instructor and coordinator of the auto tech program, which enrolls about 250 students each semester.
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College textbook prices decreased
for the first time in several years
According to new data released Thursday by Campusbooks.com, the average price of textbooks decreased by more than $10 from January 2017 to January 2018 — the first sign of depreciation in years.
CampusBooks data also revealed that college students may be living entirely digital lifestyles but they aren’t willing to go completely paperless especially when it comes to textbooks. Students are still buying hard books and are exploring other options in order to save a few bucks, including rentals. Used book sales represent an average of 45 percent of all sales from 2016 through 2018 with new books only accounting for 30 percent. Rentals, which have seen a significant rise, are close to 20 percent — demonstrating that having a book in the hand is still the preferred choice for college students.
The data shows that eBook sales have increased by more than 37 percent since 2016 but only account for an extremely small portion (2 percent) of overall sales.
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Partners announce launch of new
commercial real estate company
After 10 years of representing clients under Schwartz Commercial Realty, Jimmy Langley and Scott Dickson, along with partner Barrett Geenen, announce the launch of their new firm LDG Commercial Real Estate. LDG Commercial will exclusively represent tenants and buyers throughout the San Diego market.
Longtime Schwartz Commercial Realty partner and mentor, Ben Schwartz, will remain as sole owner and agent of Schwartz Commercial and will continue providing tenant representation services to the San Diego market .
Jimmy Langley began his real estate career in 2004 at Grubb & Ellis|BRE Commercial where he spent three years working on one of the largest retail leasing teams in San Diego county. Thereafter he joined Studley representing office tenants. He then joined Schwartz Commercial Realty now called LDG Commercial in February 2008 and has remained a top producer in tenant representation.
Scott Dickson joined SENTRE Partners in 1999 were he worked as a landlord representative. Afterward he spent three years serving as a landlord and tenant broker at Grubb & Ellis|BRE Commercial. He joined forces with Langley on the Schwartz Commercial Realty team in 2008.
Barrett Geenem worked as a Financial Representative for Northwestern Mutual in San Diego before he began his real estate career in 2010 at QualityFirst Commercial as a landlord and tenant representative. He joined Schwartz Commercial Realty in 2016, where he concentrates in site selection, financial analysis and lease negotiation for tenants and buyers in the San Diego market.
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Living Coast Discovery Center raises
record $110,000 at Farm to Bay event
The Living Coast Discovery Center, a nonprofit zoo and aquarium in Chula Vista, raised $110,000 in net proceeds at its ninth annual Farm to Bay event on Aug. 4, making it the Living Coast’s most successful fundraiser. The funds, which were generated through a combination of sponsorships, ticket sales, live and silent auctions, and donations, will support coastal wildlife conservation, education and sustainability programs at the Living Coast throughout the year.
Approximately 400 guests attended the event, which showcased the culinary talents of three featured chefs, Chef/Owner Matt Gordon from Urban Solace Restaurant Group, Chef/Owner Will Gustwiller of Eclipse Chocolate Bar & Bistro, and Farm to Table Chef Miguel Valdez, as well as sampling from more than 30 of San Diego’s favorite restaurants, craft breweries, wineries and specialty purveyors.
Farm to Bay is the only San Diego tasting event set within a protected national wildlife refuge. In keeping with the Living Coast’s commitment to the environment and sustainability, the Farm to Bay event committee strives to reach a Zero-Waste event goal. Each year, Farm to Bay’s event waste is hand-sorted and composted on-site by a team from Chula Vista Clean and volunteer master composters. This year, over 90 percent of event waste was recycled or composted and diverted from landfills – the highest totals ever for the event.
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Meggitt Polymers & Composits celebrates
major expansion of manufacturing operations
Meggitt Polymers & Composites (MPC) held a grand opening ceremony and reception on Wednesday for a significant expansion and reconfiguration of its San Diego manufacturing operations. The “Top Gun” project, located on the street of the same name, consolidates two locations which totaled 75,000 square feet into a single nearby facility providing 120,000 square feet of expanded capacity.
MPC is a division of Meggitt PLC, a global engineering group specializing in extreme environment components and smart sub-systems for aerospace, defense and energy markets.
“This significant investment by Meggitt in California is great news for our military and our state’s economy,” said Panorea Avdis, director of the Governor’s Office of Business and Economic Development (GO-Biz) and member of the Governor’s Military Council. “GO-Biz is pleased to have developed a long-term partnership with Meggitt that has resulted in several state incentive awards to support their growth, including a $2-million California Competes Tax Credit award to coincide with new full-time employees and capital investments.”
The expansion sets a new benchmark for aerospace composites manufacturing, enabling Meggitt to create a state-of-the-art, highly-efficient, cellular manufacturing flow utilizing the latest technologies, according to company officials.
“Meggitt’s decision to expand here is San Diego means a significant number of new, high-paid, advanced manufacturing jobs in the county,” said Supervisor Kristin Gaspar.
