Pacific Coast Business Times Proudly serving Ventura, Santa Barbara and San Luis Obispo counties 2015-05-06T23:03:29Z WordPress Henry Dubroff <![CDATA[Baltimore takes meaningful step back after night of chaos]]> 2015-05-04T22:24:36Z 2015-05-04T22:24:36Z Tragedy and redemption is a theme that runs through American history.

A new chapter has just been written in Baltimore, the place that is home to our national anthem, itself a story of survival in the face of war and invasion.

The scene of race riots in the civil war and an industrial decline that lasted for decades after World War II, Baltimore rebuilt itself on tourism that celebrated its waterfront, world class health care facilities and Camden Yards, a baseball stadium that defined its urban revitalization.

But as reported in the New Yorker and elsewhere, the gains of the 1990s have been slipping away. After a night of violence and looting that reflects tensions built up amid an explosion in gang killings and protests after the death of Freddie Gray, a 25 year old who died after he was severely injured in the custody of police, Baltimore took a deep breath.

Civic leaders effectively told their citizens to behave and exhorted parents to keep young adults under control. Police, reinforced by National Guard troops, stood firm in enforcing a curfew, but did not escalate the tension when confronted with a small number of adults who remained on the streets.

Watching on several television networks, some in the national media seemed almost disappointed that Baltimore was able to keep it together, where the people of Ferguson, Missouri had failed so utterly.

With a report on the Gray incident due to be handed to prosecutors on May 1, our hope is that Baltimore can remain calm, repair the damage that was done and not endure a long, hot summer of violence and destruction.

But after more than 200 years, the cycle of tragedy and redemption remains. Race relations, poverty and the role of police in our cities remain a vast unresolved issues.

A new dimension is the role of the media and particularly social media, which tend to push the perspective of each of us into the channel that reinforces his or her beliefs.

That makes Baltimore’s redemption even more remarkable — we will have to see whether a single night of restraint will enable the city to get fully back on its feet.

Plans for Goleta Beach County Park moved a step closer to implementation when the staff of the Coastal Commission recommended approval of making permanent upgrades to the park’s rock wall that was installed after 2004 storms.

The recommendation sets the stage for permanent approval of other upgrades to the park, which is located just east of the UC Santa Barbara campus and counts itself the busiest park in the Santa Barbara County system.

Debates over the usefulness of the rock wall or revetment had raged for nearly a decade until a 2013 environmental report, the second prepared for review by Commission staff, showed the revetment was not harmful to the environment.

Putting the debate over the Goleta Beach County Park behind it would allow  county staff to move on to other urgent issues, including coping with the severe drought. The plan comes before the Coastal Commission when it meets in Santa Barbara on May 13.

Guest commentary <![CDATA[State of region report pinpoints dwindling middle class]]> 2015-05-04T22:22:30Z 2015-05-04T22:20:51Z As any regular reader of the Pacific Coast Business Times knows, there is no shortage of experts and organizations churning out reports and studies and economic forecasts for our region.

Why, then, did the Ventura County Civic Alliance decide to add to this plenitude by turning its State of the Region Report from an every-five-years publication to a biannual one?

The answer is simple: We feel that that the State of the Region Report is unique in its scope and ambition. In addition to the economy, it covers education, the environment, culture, public health, social services and more. As such, it paints a more complete picture of life in Ventura County than any document that confines itself only to economic forecasts.

The 2015 State of the Region Report will publish May 13. As it was for the last edition, in 2013, the research for this report was conducted by a team led by California Lutheran University economics professor Dr. Jamshid Damooei.

The state of Ventura County in 2015 is, in many ways, markedly improved from two years ago. The economy improved in nearly every measurable way. The gross county product grew 0.9 percent in 2013 and was forecast to grow 0.8 percent in 2014 and 1.3 percent in 2015. Unemployment has dropped every year since 2010, and wages are rising: The median household income in 2013 was over $86,000, back to where it was before the Great Recession.

There are still reasons to be concerned about the county’s economic direction. In particular, there are signs that Ventura County is moving in the direction of Santa Barbara, a place with plenty of wealth but a dwindling middle class.

This is illustrated by our new measure of jobs in high demand. Overall, job growth is fairly healthy, but the types of jobs that are growing are not generally the types that pay well. Among the fastest growing industries are agriculture, leisure and hospitality, and services, and those are all among the lowest paid job sectors in the county. At the other end of the spectrum, the average manufacturing job in Ventura County paid around $95,000 in 2012, but the manufacturing sector has been shedding jobs for decades.

Housing is another point of potential concern. Prices have recovered slowly and somewhat unevenly from the 2008 crash, but buying a home remains out of reach for tens of thousands of Ventura County families. In the first quarter of 2014, only 29 percent of households could afford the county’s median-priced home, down from 42 percent just a year earlier.

Construction has yet to recover to anywhere near its pre-crash heights. In 2013, local governments in Ventura County granted building permits for 624 homes. That was the highest total since 2008, but it pales in comparison to the 4,000-plus permitted in 2005. Though Ventura County’s population growth is modest, it still necessitates some new homes each year.

But the fact remains that Ventura County is very well positioned for the economy of the future. Its biggest employment engines include health care and international trade, and both industries are in the midst of major growth spurts. The county exported $6.5 billion in goods in 2012, up from $4 billion in 2003. Led by Amgen, pharmaceuticals alone tallied $1 billion worth of exports 2012.

The Ventura County Civic Alliance is a nonprofit, nonpartisan group operating under the umbrella of the Ventura County Community Foundation. On behalf of the Civic Alliance board, I’d like to invite you to one of the launch events for the 2015 State of the Region Report.

Join the discussion
• Wednesday, May 13: 8-10:15 a.m. at Lundring Events Center, California Lutheran University, Thousand Oaks. Includes breakfast.
• Monday, May 18: 3-5:15 p.m. at VCCF Nonprofit Center, 4001 Mission Oaks Blvd., Camarillo.
• Visit to register or contact Emily at (805) 500-6610.

• Tony Biasotti is a freelance journalist, a former executive editor of the Pacific Coast Business Times, and the author of the Ventura County Civic Alliance State of the Region reports.

Guest commentary <![CDATA[Why opportunity matters]]> 2015-05-04T22:15:38Z 2015-05-04T22:15:38Z By Adam Hill

I recently had the privilege of honoring MindBody at the opening of their campus in San Luis Obispo.  As I gazed out at a sea of people — most in commemorative T-shirts identifying them as employees — my throat swelled with excitement.

Why was I overcome in that moment, and why have I spent my entire time in office fixated on economic development? It comes down to jobs. The campus at MindBody will allow the company to grow over 1,000 of them.

Now the cynic in you is thinking, “yeah, yeah, a politician’s buzzword.” And that’s true, as jobs is a word spoken by politicians and candidates as much as words like streamline and transparency and hope.

Why jobs matter to our community like ours should be obvious, but the shift in focus that has occurred over the past half-decade has been to create jobs that either allow people to take care of their family or put them on the pathway to do so. And this is no small matter in a country where whole industries of jobs have been outsourced and where wages have stagnated and job security has all but been eradicated.

Jobs that pay well or afford the opportunities for advancement are an important measure of any community’s well-being. But on an individual level, its metrics matter in ways that defy numbers and stats. This was forever impressed upon me as a child, in the recession of early 1970s, when my father was laid off from his job.

It was a harsh blow to his ego. He was so wounded and bewildered that rather than look for work, he sat and drank and said barely one word to any of us for nearly seven months. Then as he slowly began to engage, with us and with others, he would preface everything by saying, “You know I got fired, didn’t you?”

After months of this, finally, we would, in exasperation, in shame, in frustration, blurt out, ‘Laid off! Not fired! Laid off!’ And he would roll his neck and with a half-smile say: “It feels the same. No job, it feels the same.”

So I learned at an early age how there was much more than some cheap political significance to the word “job.”  I learned it contained an essential ingredient of a person’s dignity, and for many of us, the only true path toward civic ease and the luxury of optimism.

My father wallowed and never regained the confidence that a person needs to feel truly connected to their life and to their community.

This experience has stayed with me throughout my own working life, creating my own heightened awareness of the most important status a good job can convey: dignity. The dignity that allows a person to transcend self-involvement, to think beyond your own lot, that allows love and compassion and solidarity and service.

My experience teaching at Cal Poly showed me that when young people feel there is a pathway toward a bright future, when they sense the older generations are doing what they can to allow for and create opportunities for success, there is a stronger sense of purpose and much less interest in engaging with the cynicism and acrimony and self-absorption being sold every day online and on the air.

That’s why I helped create the first county-wide economic development strategy, why I often serve as a go-to person for many of our growing employers, and why I am in the midst of forging a partnership between the county and the SLO Hothouse.  I know that the health of our community and how we affirm our common values in local causes is best strengthened by having a better-paid workforce and by encouraging career opportunities in the form of responsible and responsive companies. A truly healthy community doesn’t pit jobs versus the environment or growth for only a few at the expense of others who have to struggle to make it.

That’s why we should all be proud of MindBody and the many growing small companies that have committed to staying here. We need a business and social culture that assigns supreme value to the externalities in the community: why we should not be satisfied with good jobs for a few and poor-paying jobs for many, and why we should welcome and applaud companies with strong social consciences.

• Adam Hill represents the 3rd District on the San Luis Obispo County Board of Supervisors.

Elijah Brumback <![CDATA[The knives come out at the Santa Barbara Public Market]]> 2015-05-01T22:18:58Z 2015-05-01T22:18:58Z In an update to the Business Times’ April 3 story on the trials and tribulations of the Santa Barbara Public Market, some tenant angst is starting to spill over.

While a few tenants, including Rori’s Artisanal Ice Cream and Empty Bowl, are exceeding revenue expectations, at least one merchant feels misled by claims project developer Marge Cafarelli allegedly made at the time leases were signed.

According to a suit filed April 1 in Santa Barbara County Superior Court, owners of The Pasta Shoppe claim Cafarelli “falsely and fraudulently” induced the handmade pasta maker into signing its lease on Jan. 11, 2013. Now the company is looking to break that agreement and is seeking damages.

Among other allegations, the suit states Cafarelli promised and never delivered on foot traffic of 1,500 to 2,500 people per day, a grand opening ceremony with Gov. Jerry Brown and the additional retail space on Victoria Street would be leased by the market’s opening.

Additionally, owners of the Pasta Shoppe claim they’ve suffered damages of more than $25,000 due to overcharges on the base rent of its triple-net lease.

Indeed, Gov. Brown never showed and there was never a grand opening and ribbon cutting ceremony for the market. The Pasta Shoppe owners also claim foot traffic at the market doesn’t break more than 1,000 people per day.

Cafarelli declined to comment on the suit, citing the pending litigation, but said she will file a legal response on May 4.

“Many of the businesses have made changes to do better business,” she said. “Will there be some attraction? Sure. But this is a start-up just like any start-up and what I won’t do is contribute to a negative discourse about the Public Market.

“People are going to like it or dislike for a whole host of reasons,” she said. “But the facts are that the absolute majority of tenants are trending in the right direction and are doing well.”

The Business Times previously reported that within a few months of opening, the Public Market experiment had some of the tenants praying to the gods, hoping they’d make payroll, and others admit it’s still tough today.

According to Cafarelli, every tenant is current with their rent and no one is in default of their lease.

“It was kind of a shock for Santa Barbara,” Cafarelli previously told the Business Times in regard to the development’s reception. “But we stayed patient and I think the community is really adopting and supporting what we do. Business, month-over-month, is getting better.”

The public market development, which includes the 37-room luxury condo complex Alma del Pueblo, could have been successful without the residential element, according to Cafarelli, though she declined to disclose a revenue figure.

Deals of the week
• Smart & Final is more than doubling its footprint, taking roughly half of the Lemon Grove Plaza in Oxnard.

The company recently signed a lease for 43,200 square feet at the center and is re-opening as a Smart & Final Extra concept.

The company had been operating in a roughly 16,000-square-foot space within the center for almost 30 years. Smart & Final Extra is larger than the company’s traditional warehouse stores, combining discount fresh produce and large club-sized products like those at Costco or Sam’s Club.

Smart & Final was acquired by private equity firm Apollo Management in May 2007. Later that year, the company purchased 27 Southern California Henry’s Farmers Market stores and eight Texas Sun Harvest stores. The company subsequently sold the Henry’s and Sun Harvest stores to Sprouts Farmers Market in early 2011. Smart & Final was later acquired by Ares Management, a private equity firm, in 2012 and went public last year.

Smart & Final has 250 stores in California, Oregon, Washington, Arizona, Nevada, Idaho and northern Mexico. There are several located up and down the Central Coast that are continuing to expand.
Pam Scott of Lee & Associates Central Coast brokered the deal. Scott previously brokered the Smart & Final Extra lease at the new Hollister Village Plaza retail center in Goleta.

A 10-unit apartment complex in Ventura recently sold for its full asking price of more than 1.7 million. The property, located at 154 Hemlock St., sits six blocks from downtown and is less than a mile from the pier.

The property was bought by a pair of San Francisco investors who own another building in Ventura. The new owners pulled part of the purchase funds from a refinancing at the other property and put it toward the down payment on the Hemlock building, according to Channel Group Principal Nick Henry, who brokered the deal for the sellers.
The location, high rental demand market and immediate upside in rents, elicited six bids for the two-story complex, with partial ocean views.

Henry Dubroff <![CDATA[South Coast Biz Tech Awards: 2015 winners include Nobel winner, startups and a zoo]]> 2015-05-01T21:47:19Z 2015-05-01T21:47:19Z A Nobel Prize winner, two recent IPOs, a cultural icon who knows how to innovate and a startup entrepreneur will be honored this year at the South Coast Business and Technology Awards.

The Scholarship Foundation of Santa Barbara has announced that Nobel Laureate Shuji Nakamura, the founders of device makers Inogen and Sientra, the Santa Barbara Zoo and entrepreneur Ken Babcock will be honored at the 2015 dinner, which begins with a 5 p.m. reception on June 11 at Fess Parker’s Doubletree by Hilton resort.

One of the largest events of the year in the region, the program is a major fundraiser for the Scholarship Foundation, which last year provided $8.6 million in financial aid to 2,748 students in Santa Barbara County.

Here is a closer look at this year’s winners, who are selected by a committee that includes civic and business leaders:

• Shuji Nakamura–Pioneer of the Year. The 2014 Nobel Laureate in Physics, Nakamura is widely recognized for discovering materials crucial to the development of the blue, green and white light-emitting diodes that enabled vast improvements in the energy efficiency of lighting. His research also is instrumental to next generation Blue Ray optical storage. Since 2000, he’s been a professor of materials and electrical and computer engineering at UC Santa Barbara. He holds more than 200 U.S. patents and in 2008 co-founded Soraa, a company that operates in Santa Barbara and Silicon Valley. His Nobel Prize last year put UCSB on the map once again as an elite research institution.

• Inogen–Company of the Year.
Co-founded by UCSB undergraduate students Ali Bauerlein, Brenton Taylor and Byron Myers, the company has evolved from a business plan competition winner to a successful initial public offering, raising $70.5 million in February 2014. Its Inogen One and Inogen At Home systems are providing mobility and vastly enhanced quality of life to thousands of people suffering from chronic obstructive pulmonary disease. The founders have been recognized by the Ernst & Young Entrepreneur of the Year Awards, Pacific Coast Business Times’ 40 Under 40 and Inc. magazine’s 30 Under 30 Coolest Entrepreneurs.

• Hani Zeini–Executive of the Year. Zeini is a former executive at Inamed, now Allergan Medical, who struck out on his own in 2006 with the founding of Sientra, where he serves as president and CEO. An expert in the field of breast implants, he pioneered a new generation of products that provide better outcomes for patients. He led the company to a successful IPO in 2014, with $75 million raised. An engineer by training, he attended Stanford University’s Graduate School of Business and he’s been a pioneer in advancing the idea of evidence-based outcomes for the aesthetic surgery field.

• Ken Babcock–Entrepreneur of the Year. A Harvard-trained physicist, Babcock is a former executive with Digital Instruments in Santa Barbara. In 2006, he helped form Affinity Biosensors, an award-winning company that has pioneered the concept of using advanced measurement techniques to diagnose and treat for infections such as septicemia or meningitis.

• Excellence in Service–The Santa Barbara Zoo. In honoring the zoo, the selection committee recognized the 30-acre site as a “local treasure for residents and tourists alike” that traces its legacy to a gift by Lillian Child. The zoo serves 480,000 guests annually, employs some 250 workers and is home to more than 160 species of mammals, reptiles, birds, fish and invertebrates. The zoo is known for its Species Survival Plan, protecting more than 200 species from extinction. This innovative approach to conservation includes groundbreaking efforts to create new environments for the Channel Islands fox and the California condor.

Henry Dubroff <![CDATA[The sudden awakening of antitrust regulators may be temporary]]> 2015-05-01T21:25:17Z 2015-05-01T21:25:17Z Just a few weeks ago, it looked like some of the crown jewels of tri-county commerce were about to change hands.

Simon Property Group was mounting a hostile takeover of Macerich, looking to add The Oaks, Pacific View and La Cumbre to holdings that already include the Camarillo and Pismo Beach shopping outlet complexes.

And media behemoth Comcast, owner of NBC/Universal and much of the cable industry in Northern California was in the final stages of getting approval to swallow up Time Warner Cable’s franchises in Southern California, including most of Ventura County.
But this is a year that’s being defined so far by the deals that don’t get done, rather than by the deals that close.

Objections by the Federal Trade Commission and the Justice Department sank the Comcast-Time Warner merger, although you might also argue that Comcast’s sometimes arrogant behavior toward consumers won it few friends in high places.
Simon Property walked away from its deal after Macerich installed anti-takeover provisions and after reported objections by larger store chains concerned about too many prime mall locations being in too few hands.

One conclusion from the two failed deals is that very late in the game, the Obama administration has discovered that the federal government actually has antitrust powers.

After largely ignoring the rules while utilities, big pharma companies, grocery chains and media conglomerates engaged in a feeding frenzy with just a few players in each industry emerging to dominate the landscape, suddenly the regulators have woken up.

Was that discovery due to the fact that the president is no longer running for office and no longer has to go to corporate giants and their PACs for campaign funds?

Is it that the administration has figured out that concentration of market power in just a few hands might be one reason why the economic recovery has been so weak?

Or is the U.S. taking its cues from European regulators who have looked at the enormous pricing power held by Google, Russian energy giant Gazprom and cracked down?

For the moment, it’s back to the status quo for cable television franchise and mall ownership, but my experience in these matters is that this is a temporary situation.

Macerich management is going to face tremendous pressure to do something to increase shareholder value and that means breaking up or buying back shares or going up for sale to the highest bidder.

Already, Comcast and sometime partner Charter Communications are talking about a Plan B, which might include breaking up Time Warner Cable into more digestible chunks — with Charter emerging as the dominant cable television player on the West Coast.

One of the persistent themes behind these two deals is the fact that in both cases they are about California properties. And for those of us who have noticed, California is mounting an impressive economic comeback with the Central Coast at the leading edge of that rebound.

The value of our franchises is only going to go up. Which means there is likely to be another deal lurking behind door No. 2.

Marissa Wenzke <![CDATA[Pot lawsuit seeks $2.2M in BOE relief]]> 2015-05-01T20:24:17Z 2015-05-01T20:22:31Z


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