Pacific Coast Business Times Proudly serving Ventura, Santa Barbara and San Luis Obispo counties2015-06-30T00:20:53Z http://www.pacbiztimes.com/feed/atom/WordPress Staff Report <![CDATA[James W. Lokey appointed to board of Community West Bancshares]]> http://www.pacbiztimes.com/?p=23186 2015-06-30T00:20:53Z 2015-06-30T00:20:53Z Veteran community banker James W. Lokey has been appointed to the board of Community West Bancshares, bringing a veteran dealmaker into the Community West ranks and strengthening the Goleta-based bank’s push into San Luis Obispo County.

Lokey, a resident of SLO County, was the longtime CEO of Mid-State Bank & Trust and negotiated that bank’s sale to Rabobank at a pre-recession premium in 2007. From 2010-2014, he was chairman of Mission Community Bancorp. and he retired after that bank’s sale to Heritage Oaks Bancorp.

James is exceedingly well known and highly respected,” Community West Chairman William Peeples said in a statement that cited Lokey’s 42-year career in community banking.

Lokey has been active in several blue-chip SLO County organizations, including Cal Poly Corp. and French Hospital Medical Center.

A month ago, Community West named William F. Flippin, a former Mission Community executive, as market area president for its newly opened loan office in SLO County. The bank, which operates throughout Ventura and Santa Barbara counties, has indicated it could open several loan offices or branches as it builds out the northern part of its franchise.

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Alex Kacik http://www.pacbiztimes.com <![CDATA[Refugio oil spill cleanup costs near $100 million]]> http://www.pacbiztimes.com/?p=23175 2015-06-27T07:17:20Z 2015-06-27T07:16:02Z Patrick Hodgins, director of safety and security for Plains All American Pipeline, answers questions about the Refugio oil spill at the Santa Barbara County Board of Supervisors hearing room Friday. (Alex Kacik)

Patrick Hodgins, director of safety and security for Plains All American Pipeline, answers questions about the Refugio oil spill at the Santa Barbara County Board of Supervisors hearing room Friday. (Alex Kacik)

 

Plains All American Pipeline estimates that the cleanup of the oil spill near Refugio Beach has cost $96 million thus far, but the economic and environmental consequences may be more difficult to quantify.

The Assembly Natural Resources Committee and Senate Select Committee on the Refugio Oil Spill held a joint oversight hearing at the county’s board hearing room Friday afternoon. Assemblymember Das Williams and State Sen. Hannah-Beth Jackson, both Santa Barbara Democrats, lead the discussion. Assemblymember Mark Stone, D-Monterey Bay, joined them on the dais that was formed to try to figure out why the ruptured occurred, how that fateful day unfolded, who’s liable and how to prevent a similar failure.

Local lawmakers, environmentalists and community members packed the room to hear from state officials, county planners, marine scientists and a representative from Plains All American, the Houston-based oil firm responsible for the Line 901 oil rupture. Public officials expressed the need for a better-coordinated response and more stringent preventative and regulatory measures.

Line 901 was built in 1987 to carry oil from offshore oil platforms to Santa Maria and Kern County. By the time a Plains’ employee remotely shut down the entire pipeline because of pressure anomalies at 11:30 a.m. on May 19, the damage had already been done. That happened to be the only pipeline in Santa Barbara County that doesn’t have an automatic shut-off valve. When Williams asked Patrick Hodgins, Plains director of safety and security, why one wasn’t installed, Hodgins said that the pipeline only had to adhere to federal regulations, which didn’t mandate an automatic shut-off valve.

“It has been industry best practices that we follow not to have an automatic valve that can shut off an active line…because of the potential damage it could do if shut inadvertently,” Hodgins said.

Dianne Black, Santa Barbara County planning and development department assistant director, disagreed. She said that an automatic shut-off valve is one of the safest technologies and an industry best practice.

“I don’t know the precise cost [to install one] but I can’t imagine it would be more than the cost of the spill,” Black said.

Even though the line was shut at 11:30 a.m., members of the Santa Barbara County Fire Department were the first ones to report the spill about an hour later — not Plains. Plains didn’t confirm the release originated from Line 901 until 1:30 p.m. and didn’t notify the National Response Corporation, a federal body that coordinates emergency responses, until 2:56 p.m. When Williams asked Hodgins why it took so long, he said he couldn’t comment.

“I don’t have that information in front of me,” Hodgins said.

If Plains notified Clean Seas earlier, a Caprinteria-based oil extraction firm that Plains contracts with, it could’ve “significantly reduced the amount of oil spilled,” Clean Seas General Manager Ike Ikerd said.

California’s Oil Spill Prevention and Response Act requires the operator to report the spill to the California Office of Emergency Services within 15 to 30 minutes after it is discovered, Williams said.

“Plains did not meet that criteria,” said Mark Ghilarducci, director of the governor’s office of emergency services.

Officials lamented the fact that Plains is classified as an interstate pipeline, which means it has to abide by less stringent regulations than the state’s. Plains inspects its pipelines every three years even though the federal government only requires one every five years.

The inspection in 2012 didn’t raise enough alarm to trigger action, Hodgins said. Plains had another inspection about two weeks before the spill but didn’t receive the results in time. The Pipeline and Hazardous Material Safety Administration found that the section of pipeline in question was corroded as much as 74 percent.

“Obviously the inspection systems and safeguards aren’t working,” Jackson said.

Tonya Hoover, California fire marshal, said that if Line 901 was under the state’s jurisdiction, it would’ve been classified as “high-risk,” been inspected more frequently and had more oversight.

“There needs to be a change of law that the pipeline is designated as intrastate so it is enforceable by our program,” she said. “California is the best practice, not federal.”

As the law is written, there is some grey area when it comes to an interstate or intrastate designation, said Carl Weimer, Pipeline Safety Trust executive director.

“The industry can pretty much choose whom they are regulated by,” he said.

As of now, the tourism industry and commercial fisheries are feeling the oil spill’s sting. Refugio State Beach and El Capitan State Beach have been closed for more than a month. Fisheries from Canada de Alegria to Coal Oil Point remain closed, which has many commercial fisheries reeling.

During public comment, a Santa Barbara resident said the oil spill has crippled her sport fishing business. She said that fisherman can’t sell local fish because the name Santa Barbara seafood is tainted and the county should perform a public relations campaign.

Eventually, Plains may have to pay up for lost revenues and for such a campaign. The $96 million cleanup tab doesn’t include claims, court proceeding, penalties or lost business and tourism revenues.

“If we don’t create greater accountability, if we don’t have greater transparency and honesty in the process, if we don’t remove the oil industry from taking control, controlling the messaging and controlling the information, the public will not be with us, and rightly so,” Jackson said.

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Philip Joens <![CDATA[Appfolio has successful IPO; stock closes Monday at $13.70]]> http://www.pacbiztimes.com/?p=23165 2015-06-29T21:34:37Z 2015-06-26T17:51:08Z Robert Greifeld, Nasdaq CEO, left, and Brian Donahoo, AppFolio CEO.

Nasdaq CEO Robert Greifeld , left, and Appfolio CEO Brian Donahoo on June 26.

Goleta-based Appfolio, which makes property management software for small- to medium-sized real estate managers, held its initial public offering Friday and the stock ended that day up 17.3 percent at $14.08. Appfolio stock dropped slightly on Monday, closing down 2.70 percent at $13.70.

Appfolio offered 6.2 million shares of Class A common stock for $12 each, which will raise about $71.4 million for the company. The stock started trading at $12.15 at about 8:15 a.m. Friday morning, and quickly went up. The stock peaked at a price of $14.79 at 9:40 a.m., and later rebounded to as high as $14.65.

Friday was a positive first day on the Nasdaq for Appfolio, which intends to use the money for marketing purposes, product research and development and to grow the company. Appfolio said in its most recent filing with the Securities and Exchange Commission today that it also planned to use some of the proceeds to pay back a $10 million debt from Wells Fargo Bank.

The Investment Group of Santa Barbara was a large early investor in Appfolio. The company said IGSB indicated purchasing up to $22 million in stock once the company went public. IGSB member Timothy Bliss has sat on Appfolio’s board since 2008. William Rauth from IGSB was also recently appointed to the board.

Entities affiliated with Investment Group of Santa Barbara have a minority investment in the parent company of Pacific Coast Business Times.

Appfolio officials could not be reached for comment Friday.

Like MindBody last week, Appfolio has a history of losing money and needs new capital to grow. Unlike Mindbody, Appfolio’s losses haven’t usually been as severe.

As of March 31, the company has lost $56.6 million in its history. Appfolio lost $7.3 million in 2013 and $8.6 million last year. The $3.6 million lost during the first quarter of this year was more than double the $1.2 million it lost over the same time last year.

Despite this, revenues have shot up over the past two years for Appfolio. The company increased revenues 108 percent between 2012 and 2013, increasing from $12.7 million to $26.5 million. Last year, Appfolio’s revenues again increased 80 percent to $47.7 million.

Quarterly revenue gains also remained strong in the first quarter of 2015. Quarterly revenue also increased 61 percent for Appfolio from $9.8 million in 2014 to $15.85 million during the same time this year. Analysts had mixed reviews about the stock.

Despite AppFolio’s history of losses, the company was able to significantly increase its revenue year over year,” investment research firm Zacks said.

The software solutions market for small-to-medium sized businesses is projected to double to $125 billion between now and 2016. If the company can improve on its profitability, it could be poised to be a valuable tech stock in the next few years.”

Don Dion, CEO of Florida-based DRD Investments, told investors to remain cautious about Appfolio.

The Appfolio IPO has many risks because of its limited operating history and history of losses and the dangers of security breaches,” Dion said.

We suggest caution, given lack of profitability,” and it could be overshadowed by other companies going public this week, Dion said.

 

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Guest commentary <![CDATA[A look at Central Coast entrepreneurial ecosystem]]> http://www.pacbiztimes.com/?p=23154 2015-06-25T22:47:29Z 2015-06-26T15:40:35Z Entrepreneurship is a word we hear often, with good reason: More people are choosing to forgo the predictable paycheck as an employee for the opportunity to spin their idea into a tangible business of their own.

For the first time in five years, the Startup Activity Index rose in 2015, showing the largest year-over-year increase in the past two decades, according to the Kauffman Index 2015, Startup Activity National Trends. In 2014, the report states, roughly eight out of every 10 new entrepreneurs were not previously unemployed.

In California this year, 0.39 percent of the state’s adult population became entrepreneurs in a given month, according to the index’s state trend report.

There are also nearly 141 new firms per 100,000 residents, up from 137 in 2014. The Silicon Valley region of San Jose, Sunnyvale and Santa Clara, not surprisingly, leads the state in startups.

The Oxnard, Ventura, Thousand Oaks region was one of the top mid-large metropolitan areas of high-tech startups in 1990, according Path-Dependent Startup Hubs, Comparing Metropolitan Performance: High-Tech and ICT Startup Density (Ewing Marion Kauffman Foundation, 2013).

Instead of chasing Silicon Valley’s high-tech lead, though, our Central Coast region’s thriving entrepreneurial ecosystem has largely shifted to retail (bricks and mortar, and e-commerce) and manufacturing, based on data from over 600 businesses that have worked with the EDC-VC’s Small Business Development Center over the past 18 months.

These manufacturing businesses range from home-based crafters to companies developing scientific instrumentation. They’re always a reminder to me of how much manufacturing is a valuable — and viable — part of our local business culture.

Other categories included services, education, healthcare and agriculture. Real estate and waste management also represented new startup businesses.

Who is an entrepreneur?

In general, an entrepreneur is defined as a person who organizes and operates a business or businesses. So anyone who has a startup business or an innovation business built around one or more patents.

As an entrepreneur who’s started three businesses, I can tell you that not all these business people would consider themselves the stereotypical definition of an entrepreneur: outside-the-box thinkers and risk takers.

Data tells us that entrepreneurs run the gamut from millennials right out of college looking to build a career to older adults transitioning into a second career. The entrepreneurs we surveyed — whether young or seasoned — generally had some form of industry experience with their products.

Correlations to success included experience, a willingness to take little to no revenue for their household income in the first year, as well as the size of their supportive network including friends, family, mentors and industry experts.

Another big correlation to success was that a large majority of these businesses were spinoffs created by former employees of some of the larger firms in the region, which Path-Dependent Startup

Hubs noted as a national finding, adding that it has implications for economic policymaking and economic development strategies.

A majority of these businesses sought startup and marketing assistance from the SBDC. This is important data, as it shows that people are employing a strategic approach that will foster a business’s long-term sustainability.

As far as innovation businesses (those with patents), 76 percent are manufacturers. According to my survey, these SBDC client businesses had combined reported annual revenue of over $240 million for the region. The products spanned categories as diverse as aerospace and consumer products to healthcare, biomedical and agriculture.

These companies highlighted not only the importance of manufacturing in our region, but also the importance of innovation in those manufactured products.

Our county’s healthy entrepreneurial ecosystem is built on the strengths, resources and talents of the hard-working people who make the leap to open their own businesses. Their companies provide needed jobs and support our regional economy.

While the businesses may stay one-person operations, they might also grow to become the next Lynda.com. Either way, our region is richer for their talent and drive to turn a dream into a reality.

• Ray Bowman is the director of the Small Business Development Center of Ventura and Santa Barbara Counties. Bowman can be reached at 805-384-9157 or ray.bowman@edcsbdc.org.

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Henry Dubroff <![CDATA[Trans Pacific Partnership will benefit Tri-Counties]]> http://www.pacbiztimes.com/?p=23152 2015-06-25T22:40:21Z 2015-06-26T15:33:45Z The Obama Administration racked up one of the biggest wins in decades for global trade when it won approval in the Senate to move forward with the Trans Pacific Partnership.

The partnership will open the doors for trade and development with a dozen Asian nations. China is not included but passage of TPP, which is much more likely now that procedural roadblocks have been cleared, will give the U.S. a powerful tool to counter China’s growing influence in Asia.

For many sectors of the regional economy, particularly in agriculture, the deal will be huge. A stop by the mid-year update at the Limoneira headquarter in Santa Paula underscores why.

Since it quit the Sunkist lemon marketing cooperative and went independent, Limoneira has seen annual growth of 10 percent for its lemon output and now has 250 year-round customers. Some 30 percent of its 3 million cartons per year are for the export market, with Asia figuring more and more prominently.

Containerized shipping in refrigerated units has given Limoneira the ability to get lemons to market anywhere in the world year round from multiple growing locations.

In emerging markets in Asia and elsewhere, said Senior Vice President Alex Teague, people are starting to experience more and more success. With success comes a trip to the bar to celebrate and that is where lemons are making their mark, one vodka and tonic at a time.

Limoneira has ambitious goals — it wants to triple production to 10 million cartons and it’s expanding its packing house just off Santa Paula’s Cummings Road to accommodate much bigger output.

The Trans Pacific Partnership will do a lot to protect our technology companies’ intellectual property, increase global demand for Central Coast wines and ease barriers for manufacturing exports.

It also will help speed Limoneira toward its ambitious export goals.

Gorrell ready for new challenge

Until a couple of weeks ago, former Assembly member Jeff Gorell was the odds-on favorite to succeed retiring Supervisor Kathy Long in Ventura County’s Third District.

The popular Long has steered the county on a sensible path that’s balanced growth and environmental interests, public safety and civil rights. Gorell, also a centrist, was viewed as front runner for the 2016 race.

But the Navy reserve officer who did a tour in Afghanistan while in the Assembly, surprised many when he announced plans to join longtime friend and Los Angeles Mayor Eric Garcetti’s cabinet, taking the job as deputy mayor for homeland security and public safety.

When he starts in early July, Gorell, a former prosecutor, will oversee the city’s scandal-prone police department and sometimes contentious relations with federal law enforcement. We have no doubt Gorell is up for this new challenge and we wish him well.

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Manny Araujo <![CDATA[Vapur relocates distribution center from Midwest to Oxnard]]> http://www.pacbiztimes.com/?p=23149 2015-06-25T22:33:25Z 2015-06-26T15:15:50Z

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Elijah Brumback http://www.pacbiztimes.com <![CDATA[SLO forum highlights new infrastructure tool for cities]]> http://www.pacbiztimes.com/?p=23147 2015-06-25T22:20:37Z 2015-06-26T15:05:51Z The San Luis Obispo Regional Forum, organized by the Economic Vitality Corp., recently brought together more than 45 elected officials, local government representatives and private industry stakeholders in the same room talking about infrastructure.

The forum was opened by Mike Manchak, president and CEO of the Economic Vitality Corp., and Guy Savage, deputy administrative officer of the San Luis Obispo County. Both advocated for increased collaboration through public-private partnerships in developing sustainable communities as funding from state and federal sources has eroded in recent years.

The money, which has been allocated to development in disadvantaged communities, active transportation projects or other objectives for good reason, has left little support that communities in better condition can leverage for general infrastructure improvements — thus the need for increased cooperation between local stakeholders.

Mark Pisano, University of Southern California fellow and co-chair of the 2014 California Economic Summit Infrastructure Action Team, was the keynote for the event and gave a detailed presentation on a new bill in the legislature that could give municipalities a new tool to work with.

Assembly Bill 628 introduces a new financing mechanism for infrastructure and other public purpose projects. The statute authorizes municipalities and counties to create Enhanced Infrastructure Financing Districts (EIFDs), which can fund infrastructure development and community revitalization.

It is hoped this new tool will provide local options to fund necessary infrastructure by streamlining opportunities to utilize tax increment financing, facilitating public-private partnerships and creating a structure by which the county and city governments can partner, aggregating projects and resources through a unified investment strategy.

Members of Economic Strategy Building Design & Construction and county staff members sounded off in a panel discussion on the topic, noting that local employers struggle to attract and retain the skilled workforce as a result of the high cost of housing in the region, which is significantly impacted by infrastructure costs.

The current model of funding infrastructure through development impact fees and federal or state sources is no longer the most viable option, according to those who spoke at the forum, and the need for a paradigm shift in how to pay for infrastructure must take place.

New leadership

Matt Marquis is taking over the reigns of Pacifica Hotels, the Irvine-based developer of west coast hotel properties, from his father Dale.

The new title of president and CEO isn’t exactly a new role for Marquis. Marquis, who most recently spearheaded the development of the Wayfarer Hostel in Santa Barbara, has been sharing responsibility of helming the growing firm with his father, now acting as chairman, for several years.

“It’s been an easy transition,” Marquis told the Business Times. “A lot of the work has transitioned from HR and contracts, to public relations and business strategy and getting out in front of our projects. While I’ve been working on this stuff for a while, it does seem like there’s a little more pressure.”

The company’s next project, a proposed 120-room boutique hotel off Milpas Street in Santa Barbara, is currently in the city’s architectural review process. The company hopes get to the planning commission phase within the next two months.

On the market

In 2013, a Los Angeles-based real estate development firm purchased a dilapidated industrial building at the intersection of Gonzales Road and Williams Drive in Oxnard.

The property, once home to some of the area’s early medical technology and aviation industry firms, fell into disrepair over the last decade.

Originally built in 1970 as one of the first large industrial complexes in the area, the 65,500-square-foot-plus building is scheduled to host an open house on July 16, in hopes of luring new tenants.

The shiny new project, which sits just down the road from St. John’s Hospital, is now known as the St. John’s Industrial Center.

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