Key issues and people to watch in San Diego business in 2018.
1. Qualcomm’s legal, takeoverwars
The San Diego wireless technology pioneer is not only fending off a hostile takeover bid by rival Broadcom, it also is mired in a nasty legal fight with Apple over patent royalties. Asian antitrust regulators also have piled on. By spring, Qualcomm’s fate should become clearer. Broadcom’s effort to take control of Qualcomm’s board of directors should be wrapped up by the company’s annual meeting on March 6. The legal issues with Apple and others, however, don’t appear close to ending. There’s a lot of unknowns. But it looks like 2018 will be a pivotal year for the future of San Diego’s largest technology employer, with roughly 13,000 local workers.
2. Can SeaWorld rebound?
In the post-Shamu world of SeaWorld, the question remains: Can the theme park company rebound from the “Blackfish” effect that has depressed revenues and attendance. San Diego was the first of the three marine parks to phase out its theatrical Shamu show in the face of mounting criticism since the 2013 debut of the anti-captivity film “Blackfish.” Attendance at the San Diego park, though, remains lackluster, forcing the company to revive a marketing campaign showcasing its conservation and rescue efforts. Expect continued advertising efforts in 2018, plus big-ticket attractions like the Electric Eel coaster in San Diego to draw thrill-seeking amusement park fans and hopefully boost attendance. SeaWorld CEO Joel Manby will need to prove to shareholders that the company really is on the mend.
3. The SoccerCity versus SDSU Mission Valley ballotfight
The competition to snare the rights to replace the aging Qualcomm Stadium is in full fervor, and what’s become an ugly fight in the court of public opinion will likely last through voting in November. The backers of SoccerCity are trying to secure a Major League Soccer team for San Diego and build a 33,500-seat stadium for soccer and other sports. San Diego State has a competing proposal to build a 35,000-seat stadium for Aztec football and possibly other sports. Both sides would build apartments, office buildings, retail shops and park space on the rest of the 166-acre city property. SoccerCity has already qualified for the ballot, and SDSU proponents say they have gathered enough enough signatures to earn a spot.
4. Regulating short-term vacationrentals
What San Diego’s elected leaders couldn’t accomplish in 2017 will now be their mission for 2018. For nearly three years, the City Council has been trying to reach agreement on how to regulate — and legalize — vacation rentals citywide. When the council failed yet again in December to agree on a set of new rules, Mayor Kevin Faulconer decided to step in. Short-term rentals on platforms like Airbnb and HomeAway have grown rapidly, especially in beach communities where residents complain the city does not have the resources to enforce noise and nuisance violations of what they say are mini hotels. While the council was close to reaching an agreement last month on new rules that would limit the short-term rental of investor properties, it couldn’t muster a five-vote majority. Faulconer’s office has not set a deadline for resolving the thorny issue.
5. Home price changes based on taxrate
Realtor groups seem convinced changes in the tax code that cap mortgage interest deduction will lower home prices in 2018. The new tax plan lowered annual deductions from newly issued loans totaling no more than $750,000, down from $1 million right now. The National Association of Realtors argues the change will lower the financial benefit of homeownership. As a high-cost state, California is likely to be more affected by the tax change. But, if the deduction could actually lower prices while the state has historic low home inventory is still up for debate.
6. Gasoline tax repeal tries to get onballot
An effort led by former San Diego city council member Carl DeMaio to repeal a statewide increase in the gasoline tax needs to turn in 585,407 signatures from registered voters by March 2018 in order to get on the ballot in November. Passed by the state Legislature and signed into law by Gov. Jerry Brown, the tax pushed up the price of a gallon of gas by 6 cents a gallon in November 2017 and will increase the price another 6 cents a gallon by July 2019. Critics of the repeal effort say the $52 billion raised by the tax over 10 years will be devoted to fixing and upgrading roads and bridges in California, which has a $130 billion backlog in repairs. Supporters of repeal say money from previous road repair taxes were diverted to other projects and the state needs to better manage its finances.
7. Viasat-2 lights up satelliteInternet
Carlsbad’s Viasat, which recently rebranded, will begin offering Internet service to homes and businesses from its new high-capacity satellite nationwide in February. The company hasn’t come out with pricing/speeds subscription plans yet. But the new satellite has more than twice the capacity of Viasat’s existing Internet satellites. That bandwidth could enable the company to roll out plans that target disgruntled DSL and even cable subscribers — creating more competition in an industry where options are perceived to be lacking. Viasat also uses its Internet satellite capacity to delver fast in-flight Wi-Fi to major airlines and government customers. That market is becoming more competitive. Signing up additional airlines to use its service is an addition milestone to watch for Viasat in 2018.
8. San Diego convention centerexpansion
Stalled for several years now, the long-sought expansion may gain steam this year as the tourism and hotel industry push for a citizens initiative to fund the more than $600 million project. The measure, which has yet to be released, would raise the hotel room tax to as much as 15.75 percent to help finance the expansion, plus expand homeless services. Revenues would also be available for street repairs. The hope is to launch a signature-gathering campaign early next year in anticipation of qualifying the measure for the November ballot. Still a big hurdle for an expansion is a $300 million hotel complex known as Fifth Avenue that is planned for the bayfront site of the expansion. Expect that project to go before San Diego port commissioners this year.
9. Kris Michell: San Diego’s new ‘projects czar’
One of the city’s most successful behind-the-scenes players has been handed some of the city’s thorniest development problems. Kris Michell – the woman credited as the dogged force behind getting Petco Park built in the early 2000s -- became the city’s new projects czar in November. Her official title is deputy chief operating officer for special projects. Michell’s to-do list: San Diego Convention Center expansion. Stadium redevelopment in Mission Valley. The homeless problem.
10. Pace of rentincreases
Almost unthinkable a year ago, rent price increases started to slow in 2017. High-end rentals had the biggest slowdown while the demand for cheaper apartments is still through the roof. The building industry attributes much of the decline in multifamily building this year to investors’ concern that the rental market was cooling. Rent has rarely gone down in San Diego County since 1988, and never reducing by more than 1.5 percent, so it seems unlikely rent will actually go down in 2018. Even with the rent slowdown, the vacancy rate was 2.73 percent in September, said MarketPointe Realty Advisors. So, less building and/or slowing rent increases will probably not make it any easier to get an apartment.
11. SDG&E looks to raiserates
San Diego Gas & Electric is asking the California Public Utilities Commission (CPUC) for an 11 percent rate increase by 2019 to upgrade electrical equipment, improve the safety of underground and overhead power lines, and ensure the safety of more than 14,000 miles of natural gas pipelines. If approved by the CPUC, a typical resident using 500 kilowatt-hours of electricity per month will see an increase of $6.13 on a monthly bill. Consumer groups promise to challenge the request and following a review process that will include public hearings and legal filings, the CPUC’s five commissioners are scheduled to make a decision on the rate case by the end of 2018 — but a final vote may be held beyond that time frame.
12. Labor and materialsshortage
Home builders said frequently in 2017 that they are experiencing labor shortages because of pressure on immigration and workers that have headed east for more frequent building. With the hurricanes in Texas, Florida and Puerto Rico, there could be even fewer workers around. Additionally, workers in California will be needed up north where wildfires were more destructive than in San Diego County. Also, the amount of rebuilding throughout the nation may cause the price of homebuilding materials to rise. That could make it even less likely that builders will be eager to build middle-income housing where the risks to make a profit are higher than luxury homes.
13. Fate of California’s stem cellagency
The California Institute for Regenerative Medicine was created by California voters in 2004 with the passage of Prop. 71. Its goal is to accelerate moving important research on medical uses for stem cells into new treatments. In 2018, CIRM faces critical decisions on its future as the $3 billion in bond funds it was awarded begins to run out. Its options will be influenced by how well the public thinks the agency has used the money. On the negative side, few CIRM-funded projects have resulted in approved therapies so far, disappointing for those who believed the optimistic picture painted in the campaign for Prop. 71. However, dozens of promising treatments are in clinical trials. Should California voters give CIRM even more money? Should CIRM instead ask for private philanthropy, corporate partnerships, or just quietly go away? Is there even a need for an agency like CIRM any more? Expect to hear a lot about these questions in 2018.
14. Nuclear may receive its death sentence inCalifornia
As early as January, the final nuclear power plant left in California may officially receive its orders to shut down. The Diablo Canyon nuclear facility in Northern California has been producing power since 1985 but the plant’s operators, Pacific Gas & Electric, want to shut the site down by 2025, saying other sources can replace the power Diablo produces each year. A California Public Utilities Commission administrative law judge has suggested some financial changes to PG&E’s proposal but recommended the CPUC’s five commissioners approve closing the plant. The vote is on the commission’s docket Jan. 11. Diablo’s defenders say nuclear power is necessary to reach ambitious climate change goals and closing the plant will make the state more reliant on natural gas.
15. Plaza de Panama: Do or dietime
The 2010 plan to clear cars from the center of Balboa Park by building a bypass bridge and new parking garage may come to go/no-go decision point in 2018, the year the park will mark its 150th anniversary. The plan, promoted by Qualcomm cofounder Irwin Jacobs, has overcome all hurdles except a legal challenge led by public interest attorney Cory Briggs, whose clients believe the environmental documentation is faulty. The city has pledged about $50 million toward the project but fund-raising has stalled pending the outcome of the lawsuit. The Plaza de Panama Committee has pledged to raise $30 million, but as time passes, the costs may continue to mount. Jacobs has not pledged to make up any deficit. If the plan is implemented, visitors would be able walk unimpeded along the entire El Prado and the Plaza de California in front of the Museum of Man, as well as the Plaza de Panama in from of the San Diego Museum of Art, would be beautified with new landscaping and amenities. The Esplanade leading to the Spreckels Organ Pavilion also would be car-free. An 800-car parking garage, topped by a new park, would be built south of the pavilion.
16. Major port improvements movingforward
The San Diego Unified Port District is juggling four big redevelopment projects, as a major rewrite to its port master plan. Seaport Village, whose lease expires in September, would be redeveloped with an aquarium, observation tower, shops, restaurants and hotels, new recreation areas and a modernized Tuna Harbor. The final design and development agreement should make major progress in the new year. Harbor Island’s former rental car lots are also due for a makeover. Two developers, Oliver McMillan and Sunroad Enterprises were chosen to tackle the car lots and the so-called “elbow” that links the island to Harbor Drive. Revised plans have yet to be released. The Chula Vista bayfront plan inched a step closer to reality with the signing of a nonbinding letter of agreement with RIDA, the master developer for a convention and hotel complex. Final details, timing and financing may be ready for action. Anthony’s Fish Grotto is being demolished to make way for the Brigantine Restaurant’s Portside Pier project, south of the Star of India on Harbor Drive. If the schedule holds, the three-restaurant complex should open in 2019.
17. Westfield shopping centers: A newmaster
The sale of Westfield’s U.S. and British shopping centers to a French real estate company puts the future of the five Westfield malls in doubt. Westfield had previously pledged to focus on its “flagship” centers in major cities and for San Diego that is Westfield UTC. About $600 million was spent to build a new Nordstrom store and parking garage, add a new wing with extra shops and dining venues and move forward with a high-rise residential tower. Another phase is planned where the old Nordstrom and vacated Sears stores stand. Westfield Horton Plaza’s direction remains uncertain. Many tenants have left when their leases terminated and they have not been replaced. The 1985 fortress-like design is considered incompatible with the lively action in the Gaslamp Quarter and ballpark district. The new owners will have decide if they want to remake Horton in the image of their major, urban malls in Europe — or sell the property to someone else. Westfield Mission Valley offers another opportunity to maximize valuable real estate by turning parking lots into building pads. The Macy’s store, originally built as a May Co. outlet in the 1960s, remains closed. The future of Westfield Bonita and Westfield North County in Escondido also remains unclear. They both also include large parking lots where new development could be added.
18. Floyd Romesberg, professor of chemistry at The Scripps ResearchInstitute
Romesberg and colleagues are the first to create partly synthetic life. In 2014, a team he led created the first organism with an expanded DNA alphabet. This expanded alphabet introduced two synthetic letters, X and Y, along with the four natural ones, A, C G and T. It allowed for the partly synthetic bacterium to be programmed to do things natural life can't do. In 2017, a study Romesberg led demonstrated that the bacterium can be programmed with the expanded genetic alphabet to make functional proteins. This marked a major transition from academic research to practical use. In 2018, Romesberg and the La Jolla company he co-founded, Synthorx, can be expected to announce further advances. One of the first targets is a new drug for cancer.
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Source : http://www.latimes.com/sd-fi-bizpeople-watch-2018-story.html