Daily Business Report-Jan. 16, 2019
La Mesa resident Chad Regeczi saw his rent increase $300 on his apartment last year, which prompted him to find another place to live. (Photo by Amita Sharma, KPBS)
Lawmakers asked to consider anti-price
gouging laws to slow rising rents
By Amita Sharma, KPBS
Crooning in the shower is not Chad Regeczi’s thing. That’s why when he learned last year his monthly rent would go up $300 so the new owners of his La Mesa apartment could upgrade his bathroom with a sound system, he was bemused.
“300 bucks!” he said. “I mean an iPod costs less than that. Everybody has got a phone now. Who needs a bluetooth speaker in a bathroom apartment? It’s just weird.”
Regeczi, a VA employee, said the 30 percent rent increase didn’t match the condition of his apartment. But he felt powerless to challenge his landlords on the hike.
“Who’s gonna tell them no?” he asked. “There are no rules to how much your rent can go up.”
That may change. Talk is underway about putting a law on the books that would bar California landlords from raising rent beyond a certain percentage. Oakland Mayor Libby Schaaf said in November the rule would mimic limits on what businesses can charge during natural disasters.
“When there’s a fire, you pass an anti-rent gouging ordinance,” Schaaf said. “The state has a fire. It’s called the housing crisis.”
Rents are surging in some California cities where there is no rent control by double, even triple digits, according to mayors and tenants rights advocates.
And more than half of the state’s renters pay more than a third of their income on housing, according to the California Budget & Policy Center. A third of renters spend more than half of their paycheck on a place to live. The real estate firm Zillow reported last month that communities where people pay more than a third of their salary on rent, see a faster rise in homelessness.
The median rent for a one-bedroom apartment in San Francisco is $3,500 a month, in Los Angeles it’s $2,420 and in San Diego it’s $1,950, according to the real estate search site Zumper. And Attom Data Solutions found the average rent on a three-bedroom apartment in California has risen 20 percent since 2014.
The state’s affordable housing crisis has downgraded the California Dream, that once included almost guaranteed homeownership, to a point where even renting an apartment is becoming out of reach.
Los Angeles Mayor Eric Garcetti has said politicians should not interpret voter rejection of the rent control initiative Proposition 10 in November to mean they’re off the hook.
“It is not going to be good enough to say, `Well the voters spoke,’” Garcetti said. “We have a problem we have to confront.”
Garcetti wants the state Legislature to approve an anti-price gouging rent cap. Support of such a cap may be building.
Democratic state Sen. Scott Wiener of San Francisco said legislators are mulling whether to pitch a bill as one way to deal with the state’s 3.5 million housing unit shortage over the next decade.
“That shortage is leading to displacement, evictions, people becoming homeless, working families leaving, young people not having stable housing,” he said. Wiener sees a cap as an interim measure until more housing is built.
“Until we get there, and it’s going to take a while to get there because housing doesn’t get built overnight; and it is a huge hole that we have to fill until we get there, we need to take action to keep people stable in the housing that they have.” he said.
David Garcia, policy director at UC Berkeley’s Terner Center for Housing Innovation, said the cap would protect tenants from the most egregious rent increases aimed at removing them from an apartment.
“Tenants receiving increases 25, 30, 40 percent which we read about all the time, those increases would be illegal,” Garcia said.
Landlords don’t like the idea.
“It’s a form of tenant welfare, paid only by a small number of people,” Dan Faller, president of the Apartment Owners Association of California. “If this is a society problem, then society ought to solve it. But this will make the crisis worse.”
Tenants advocates, like Rafael Bautista of San Diego’s Tenants United, worry for another reason. He said the state needs rent control that restricts annual increases to 2 percent. He believes that the proposed anti-gouging cap is a ruse for mayors to punt the housing affordability issue to the state Legislature.
“It’s basically a watered-down version so that we don’t pursue rent control because they’ll point to that and say, `Well, you know we have these measures in place. Why do you still need rent control?’” Bautista said.
But La Mesa resident Chad Regeczi called the cap a good start. “This is America,” he said. “People want to make money. But at the same time they can’t be crushing people. It’s about what’s acceptable, what’s doable, what’s fair.”
Regeczi moved out of his apartment following the $300 rent increase. He’s in a larger place now. “This place is way nicer than that and it’s just 200 bucks more than what I was paying there,” he said. “It doesn’t even make sense.”
But deja vu could be setting in. Regeczi’s new place just got new owners and that may mean a new rent increase.
This story is part of The California Dream project, a statewide nonprofit media collaboration focused on issues of economic opportunity, quality-of-life, and the future of the California Dream. Partner organizations include CALmatters, Capital Public Radio, KPBS, KPCC, and KQED with support provided by the Corporation for Public Broadcasting and the James Irvine Foundation.
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General Atomics builds industrial collaboration
team in Belgium for the MQ-9B SkyGuardian
General Atomics Aeronautical Systems Inc. (GA-ASI), the manufacturer of Remotely Piloted Aircraft (RPA) systems, has teamed with five Belgium-based businesses as part of an industrial collaboration effort with the Belgian aerospace and defense industry. Team SkyGuardian Belgium includes GA-ASI, SABCA, Thales Belgium, Esterline, DronePort, and satellite communication technology company Newtec.
The government of Belgium recently announced the selection of MQ 9B SkyGuardian to meet the RPA requirements of Belgian Defense. General Atomics’ MQ-9B has also been selected by the Royal Air Force for its PROTECTOR RG Mk1 program.
“General Atomics looks forward to working with our Belgian teammates to make the MQ-9B procurement a success,” said Linden Blue, CEO of the company.
GA-ASI and SABCA signed an MOU that outlines their cooperation for production and maintenance repair operations activities, including initial in-country entry into service and support for SkyGuardian. The MOU also covers production of the lightning-protected SATCOM radome for all MQ-9B SkyGuardian and SeaGuardian systems at SABCA Limburg. The parties intend to develop the first Europe-based MRO facility for MQ-9B actuators at SABCA in Brussels.
The total economic value of Team SkyGuardian’s efforts to Belgian industry is estimated to be in excess of $113 million over the life of the program.
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General Atomics seeks smallsat market
share via acquisitions, orbital test bed
ExecutiveBiz
General Atomics executives have said previous acquisitions of two small satellite manufacturers are helping the company build up its presence in the smallsat market, SpaceNews reported. The San Diego-based defense contractor bought Miltec in 2016 and Surrey Satellite Technology’s U.S. subsidiary the following year.
The report said General Atomics used expertise from the acquired firms in order to develop the Orbital Test Bed and won contracts from NASA and the U.S. Air Force to launch hosted payloads on the OTB platform.
USAF ordered one OTB to place a sensor from France’s space agency in orbit by 2021. NASA selected the satellite platform to support two missions that aim to bring the Multi-Angle Imager for Aerosols instrument payload into space, the Deep Space Atomic Clock and a modular solar array payload in early 2020s.
“This is our new business model,” said Nick Bucci, vice president of missile defense and space systems at General Atomics’ electromagnetic systems business. “Delivering for everybody when they need it and where they need it.”
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San Diego office market ends 2018 with a flat
fourth quarter; 2019 outlook: still remains strong
San Diego’s office market ended 2018 on a bit of a flat note, with vacancy rising moderately in the fourth quarter coupled with slender occupancy loss, according to Cushman & Wakefield’s year-end market report. Overall, office vacancy rose to 13.8 percent in the fourth quarter, up a modest 40 basis points (bps) from the previous quarter, and placing it 50 bps above 2017. Despite the second half of the year experiencing an uptick in vacancy due primarily to new product deliveries, San Diego still recorded nearly one half million square feet of net office growth in 2018. And the firm maintains a positive outlook forward.
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Douglas Wilson Companies announce
opening of Sienna at Otay Ranch
Douglas Wilson Companies announced the opening of Sienna at Otay Ranch, a $32 million project that is the company’s first in a new series of senior housing communities planned for the Western Region over the next 10 years. Located at 1290 Santa Rosa Drive in Chula Vista’s Otay Ranch, Sienna at Otay Ranch is a 111-unit, two-story building comprised of 85 apartments for assisted living and 26 units for memory care.
Sienna at Otay Ranch offers studio, one-and two-bedroom floor plans from 500 to 800 square feet, with monthly rents from $3,800 to $5,500, including meals and housekeeping. In addition to many upmarket resident amenities, services available through the Wellness Center include geriatric care, optometry, dentistry, podiatry, rheumatology, lab services, and a regularly scheduled onsite Nurse Practitioner.
“With our entry into senior housing, Douglas Wilson Companies has launched a business platform to meet the needs and aspirations of America’s aging population,” said Douglas Wilson, chairman and CEO of DWC, who noted that Sienna’s to-date occupancy has outpaced expectations, likely due to the market leading resort-like design and amenities provided.
DWC is joined in the Sienna at Otay Ranch joint venture by Milestone Retirement Communities, who handles all management responsibilities.
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Ken Stipanov elected board chair of the NTC Foundation
The NTC Foundation announced the election of Ken Stipanov as the new board chair, replacing Lori Fleet-Martin, who served for the last two years. The Foundation board is tasked with overseeing the continued development of ARTS DISTRICT Liberty Station and its transformation from a historic Navy base to a vibrant Arts & Culture District.
Stipanov is a retired attorney who now spends most of his time on community, volunteer, and family activities. He has served on the board for the past eight years. During his 36 years of private practice, Stipanov focused on commercial real estate transactions, particularly in the area of real estate financing.
Stipanov is a member of the board of the San Diego Maritime Museum. He is a prior Committee Chair of Scouts BSA Troop 500 Point Loma, and is now on the committee that is launching Troop 500 for Girls.
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USD’s Master’s in Law Enforcement
and Pubic Safety Leadership ranked high
The University of San Diego’s Master’s in Law Enforcement and Public Safety Leadership ranks 19th in the country for best online graduate criminal justice programs, according to U.S. News & World Report. It’s the first time the program, started in 2015, has been included by U.S. News. USD’s Master’s in Supply Chain Management also was highly ranked in the list of online graduate programs.
Since 2015, 500 students have been admitted to the criminal justice program which has garnered a 95 percent graduation rate. USD, through its Division of Professional and Continuing Education, is one of the few universities in the country to offer a master’s with a focus on law enforcement leadership. Students in the program represent agencies and departments across the country at the local, state, and national level including police, sheriff and the FBI.
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Salk scientists uncover health effects
of metabolic ‘magic bullet’ protein
The metabolic protein AMPK has been described as a kind of magic bullet for health. Studies in animal models have shown that compounds that activate the protein have health-promoting effects to reverse diabetes, improve cardiovascular health, treat mitochondrial disease—even extend life span. However, how much of the effects of these compounds can be fully attributed to AMPK versus other potential targets is unknown.
Now, Salk researchers have developed a new system that lets them study in more detail than ever exactly how, where and when AMPK carries out its molecular and therapeutic functions. In the paper, published Jan. 2, 2019 in the journal Cell Reports, the Salk team uses the new model to activate AMPK in the livers of adult mice with fatty liver disease.
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Grossmont Healthcare District
governing board officers announced
Randy Lenac has been elected president of the Grossmont Healthcare District governing board. Virginia Hall was elected vice president and Robert “Bob” Ayres was elected secretary. Lenac selected Gloria Chadwick to serve as treasurer. Also serving on the five-member board is Michael Emerson, who served as board president in 2017 and 2018.
Lenac, a resident of Campo, was appointed to the GHD board in July 2014 and elected to a four-year term in November of the same year. In November 2018, he was reelected. Since 2011, Lenac, a retired Marine, has served on the board of the Grossmont Hospital Corporation (GHC), the operator of Sharp Grossmont Hospital. He also represents GHD on the Association of California Healthcare Districts board, a statewide organization representing healthcare districts.
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Personnel Announcements
Tanya Mannes Castaneda
joins Manolatos Nelson Murphy agency
Manolatos Nelson Murphy Inc. announced the appointment of Tanya Mannes Castaneda as vice president, public relations. Castaneda is a nationally recognized leader in public relations who was named California’s 2018 Communicator of the Year by CAPIO (California Association of Public Information Officials
She holds the Accreditation in Public Relations credential, recognized as the worldwide standard for progressive practices, leadership and ethics in the competitive public relations field.
Castaneda joins MNM after serving more than six years as the public information officer for the Port of San Diego, where she represented the agency as chief spokesperson and managed its strategic communications program, including the award-winning public outreach campaign for the Port Master Plan Update.
She formerly was a reporter for The San Diego Union-Tribune, among other publications.
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Gov. Gavin Newsom:
PG&E bankruptcy doesn’t mean blackouts
By Dan Morain | CALmatters
Gov. Gavin Newsom assured Californians Monday that lights will remain on and gas will continue to heat homes, even as Pacific Gas & Electric Co, confronting liability for California wildfires, prepared to seek protection from creditors under Chapter 11 of the federal bankruptcy code. PG&E potentially faces billions in civil penalties, depending on its share of blame for the deadly 2017 and 2018 wildfires.
It’s also California’s biggest utility, a major employer, and responsible for supplying gas and electricity to many of the most fire-prone parts of the state.
California has been here before:
• PG&E declared bankruptcy in 2001 amid an energy crisis that subjected the state to rolling blackouts.
• Then-Gov. Gray Davis took a political hit as voters, unfairly, came to view his response as insufficiently decisive.
Newsom: “This is not 2001. This is 2019. We have an abundance of energy and our customers should not be concerned about turning on their lights. They should not be concerned about their gas.”
Newsom cited steps:
• A strike team led by Chief of Staff Ann O’Leary to oversee the situation and develop options.
• Consultation with bankruptcy experts and others.
• Gas purchases by the state Department of General Services if extreme need arises.
Newsom: “This is a top priority for this administration. This is not being pushed back in the file as one of many things I am responsible for addressing.”
Newsom did not say what legislation he would push, if any. But he’s clearly preparing for PG&E to enter bankruptcy, and have the state be directly involved in discussions about the utility’s future, whatever that might be.
PG&E by the numbers:
• $2.5 million: The severance for Geisha Williams, PG&E chief executive who stepped down over the weekend.
• $4.188 million: The amount that PG&E donated to California state candidates and campaigns in the 2017-18 cycle, including $150,000 to an independent campaign to elect Gov. Gavin Newsom.
• $8.38: PG&E’s closing stock price on Monday. It had traded above $48 before the Camp Fire killed 86 people and destroyed the community of Paradise.
