See original story on SDNN

Thursday, July 9, 2009

Superheroes aren’t the only ones fighting foes at Comic-Con International, the gigantic comic book convention that runs July 23-26 downtown.

The San Diego Convention Center and the city itself are warding off adversaries from other cities who want to lure away the iconic event, which generates millions of dollars in revenue each year.

“We’re working hard to keep them in San Diego,” said Steve Johnson, vice president public affairs at the San Diego Convention Center Corporation. “The economic impact to San Diego is profound.”

In the last three years, the homegrown event has been busting at the seams of the San Diego Convention Center, spilling over into other venues downtown, such as Petco Park, Horton Plaza, and the Midway. Overcrowding, traffic and parking problems have also hampered the event.

Tickets — for 126,000 attendees in the last two years — have typically sold out two months in advance.

“We limit the amount of attendants, because we don’t have the ability to get people through the building,” said Johnson.

As a result, convention centers in Los Angeles and Las Vegas have been courting Comic-Con organizers, with representatives from the Las Vegas center visiting last year’s event, according to news reports. Convention centers in those cities leave plenty of elbow room.

But San Diego’s leaders are not giving up anytime soon. The event means too much to the city economically and culturally to let it move away at the 2012 conclusion of its contract with the San Diego Convention Center.

Comic-Con generates $16 million in direct spending and $38 million in indirect spending for the city, said Johnson. This means that the event’s 126,000 attendees each year drop $16 million on services such as hotels, car rentals and restaurants, which has a ripple effect throughout the economy of more than double that amount.

“When you bring that kind of money into the region, it’s like a rock in a pond,” said Johnson.

San Diego’s hotel occupancy rate during Comic-Con is the highest for the county during the entire year, said Johnson. Occupancy rates for the county’s 54,000 hotel rooms average 98 percent each day during the four-day event, he said.

Comic-Con also serves as a cultural touchstone for San Diego. Since its launch in 1970, the event has grown from an underground gathering to a mainstream movement that attracts comic-book fans to videogame producers to Hollywood film studios.

“You can’t separate the power that Comic-Con has in defining San Diego as a destination for comic book junkies as well as pop culture junkies,” said Johnson.

San Diego Convention Center Corp. is working with the city’s special task force to expand by some 200,000 square feet of space to the backside of the building, said Johnson.

Mayor Jerry Sanders launched the Convention Center Task Force in January to explore how to expand the center. The 17-member group is looking at architectural, policy and funding options this month, and it is expected to provide a final report by September, said Bill Harris, deputy press secretary for the mayor.

Part of the challenge is that the center sits on port tideland governed by the state of California, which is managed locally by the San Diego Port Authority, said Harris.

Comic-Con organizers are also “valuable partners” in creating plans for a center expansion, said Harris, although Comic-Con organizers did not reply to interview questions submitted last week for this story.

What else is the city doing to keep Comic-Con? Harris won’t say.

The convention center’s Johnson is also keeping mum. “That would be showing our cards to the competition,” he said.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Monday, May 18, 2009

You thought you had it bad. Wait till you hear these two stories about real estate investors in housing foreclosures.

John Woodbury has six houses in foreclosure. Lenska Bracknell has three houses in short sales.

Woodbury, 62, was a retired state worker turned real estate investor who had a credit score of 780. He lost everything.

Bracknell, 45, runs an aerial photography business and is a real estate broker. She bought three houses on 30-year-fixed rates, full doc loans and 20 percent down. Now, those investments are sour.

Woodbury and Bracknell both attended a workshop last month about how small business owners are facing mortgage foreclosures. They agreed to share their stories with SDNN.

John Woodbury loses six houses

Investment dream: “We hoped this would help our retirement,” said Woodbury. “We were all looking forward to it.”

Number of properties: 6

Locations: Escondido, Hemet, Los Angeles, Montana, South Carolina, Texas

Credit score: 780

The good life: In 2006, “all the properties were making money,” he said. “I could borrow money, and even if they had a negative, I knew they were going up in value, so that was great.”

Warning signs: In 2008, the L.A. house rent dropped to $1,600. The mortgage was $3,200. “We knew we had to get rid of the property, because we were going through our savings.”

Refinancing: In September 2008, Woodbury applied for a refinance on the L.A. property. The mortgage broker said Woodbury’s finances were excellent, and could qualify. But Fannie Mae changed its rules, limiting the number of houses that an investor could get loans on to four. He no longer qualified for the loan.

Negotiating with the bank: Woodbury contacted First Horizon Bank, the lender on the L.A. house. “The first thing out of their mouth was, ‘Are you behind?’” said Woodbury. “We said, ‘No.’ And they said, ‘Well, you have to be behind at least two months before we can even talk to you.’”

Woodbury missed two payments, called the bank again, and “they said there’s nothing they can do.”

Attempt to sell the house: Woodbury found a buyer, with ample down payment. The house went into escrow. Two weeks before closing, the HUD statement showed that Woodbury would have to bring $33,000 to close.
Saving the deal: Woodbury borrowed $16,000 from his sister. He wiped out his savings. The real estate agents agreed to lower their commissions from 6 percent to 4.5 percent. But Woodbury was still $7,000 short.

Negotiating with the bank: Woodbury asked the bank to lower its penalties and late fees by $7,000.

“They said, ‘No.’ I said, ‘You understand, if this doesn’t close, and this house goes into foreclosure, you are going to lose about $200,000 on the value of the property immediately. I can give you all the principal, part of the interest, just not all of it.’ The bank said, ‘No, we don’t want to have anything to do with it.’”

Failed deal: The house fell out of escrow March 6 and went into foreclosure. “Everybody lost,” said Woodbury.

Bank’s motives: “They don’t need to do this,” said Woodbury, “because they know that even if they have to go into foreclosure, and they lose money, they’re going to get money from the federal government in the bailout.

“They’re not concerned about helping citizens at all. Why spend the extra time and money for something you’re going to get paid to do anyway, if you don’t do anything?”

First Horizon Bank’s response: “First Horizon strictly adheres to all applicable privacy laws, and our confidentiality policy prohibits the disclosure of customer information,” said Anthony Hicks, public relations officer, in an email.

“We recognize these are difficult times for many people and work with our customers to exhaust all available options. We encourage customers who may be experiencing difficulties, and those who think problems are likely, to contact us immediately so we can offer the best solutions for their needs within the parameters of their loans.”

Other foreclosures: “That’s one of six loan modifications I’ve tried to do, and all of them have fallen through for lack of cooperation” from banks, said Woodbury. “Part of the reason is because my credit scores have gone down, and they’ve gone down because they didn’t loan me the money, because of (rules changes at) Fannie Mae.”

Dead dreams: “Now we have no retirement, no money,” said Woodbury.

How they are surviving: Wife’s government job salary. Woodbury is filing for bankruptcy.

Responsibility: “I’m not blaming anyone but myself, because I’m the one who made all the decisions,” Woodbury said. “Nobody guaranteed me anything when I was born. You do the best that you can. Sometimes it works, sometimes it doesn’t. You just do the best you can.”

Lenska Bracknell negotiates three shortsales

Her main business: Aerial photography

How she started investing: In 2003, Bracknell bought one house, fixed and sold it. She used the profits to buy more houses.

Number of houses: 3

Location: Boise, Idaho

Great loans: 30-year fixed, 20 percent down, full documentation.

Warning signs: In 2006, many people lost jobs in Idaho. Rents dropped from $1150 to $750. The mortgages were $950.

“Suddenly, the whole cash-flow was not working anymore,” said Bracknell.

A property manager ran off with two months’ rent and a deposit. Bracknell had no rent income.

The state raised its property taxes. The property tax went up from about $750 to $3,500 a year, said Bracknell.

Negotiating with bank: “I tried to contact my lender to try to make the payments, but obviously, they don’t want tot talk to you,” said Bracknell. “So you really have to default in order to get the bank’s attention.” That didn’t work.

Shortsale: “I decided to cut my losses there, because obviously I’m not able to recoup the money,” said Bracknell. “I hired a short-sale company, an investor group that makes offers on these houses … and negotiates the shortsale with the bank,” said Bracknell.

Credit cuts: Bracknell had two American Express cards, with credit limits of $18,000 and $38,000. Since 1996, “I have never carried balances, paid every balance for the last 13 years.”

In March 2009, American Express “cut my credit down to $2000.”

Business impact: For the aerial photography business, “I can’t rent helicopters or airplanes using credit cards or do business like I normally do.”

Sleepless nights: “I got some chest pains a few weeks ago,” said Bracknell. “I had my sleepless nights, sleepless weeks, months. But I decided I can’t give in to it.”

Responsibility: “To be honest, I don’t think I did anything wrong,” said Bracknell. “I put 20-percent down, full doc loans. I treated my tenants well.”

“But due to the economic climate, certain people got too greedy,” she said. “Small people on the street really have to feel it and change their whole life.

How she’s surviving: Savings.

Future: “I love real estate,” said Bracknell. “I love to actually help people to make the right decision. And that’s why I’m using all that experience … to give that advice to other investors, who now have the cash to do the investments and turn those properties around,” she said.
___________________________________________________________________________________

Woodbury’s settlement breakdown

$445,000 — Mortgage owed
$ 26,000 — Real estate commissions
$ 7,000 — Title fees
$ 16,000 — FIRPTA* tax
+ $ 13,000 — Penalties and late fees
—————————————-
= $507,000 — TOTAL OWED

Amount still needed to close

$507,000 — Total owed
- $475,000 — Sale price
- $ 25,000 — Loans and savings Woodbury brought to table
—————————————-
= $ 7,000 — Difference needed to close

Appraisal value 2006: $775,000

* Foreign Investment in Real Estate Property income tax for non-owner occupied properties.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Monday, April 27, 2009

Robert Noble imagines a day when across the nation, instead of car owners paying big companies for gasoline, the reverse happens: Car owners get paid for putting energy into charging stations.

It’s possible with a network of electric cars.

“We see it everywhere,” said Noble, the founder of Envision Solar, a La Jolla-based solar installation company.

Last week, his company kicked off this dream. Envision Solar International, which Noble started in 2006, announced the nation’s most advanced solar-powered electric-car charging station. The Capitol Hill event was done in collaboration with Bright Automotive, an Indiana-based company, which unveiled a breakthrough electric-hybrid van.

But in an interview given one day after returning to San Diego, Noble said he also wants to promote the concept here. He is talking to potential partners about installing such charging stations across the county.

“In San Diego, it’s completely feasible,” said Noble. “We absolutely would love to see the first project here in San Diego.”

At the charging stations just announced, electric car drivers can pay for electricity powered by the sun to charge their cars. But during peak hours, when energy is in high demand, they can also “draw down” their batteries and sell electricity back to the stations at a premium price, said Noble.

Envision is a solar installation company moving into the electric car market. Its solar-paneled parking lots have led the industry, with high-profile structures at Kyocera’s San Diego headquarters and the UC San Diego campus. It has other projects in Napa, Calif.; Albuquerque, N.M.; Golden, Colo.; and West Africa.

Bright Automotive was the first car designer to commission a hybrid-electric car charging station, to be promoted in conjunction with its electric utility vehicle. It chose Envision based on the company’s track record, according to press statements.

As the electric car industry grows, many companies are competing to have their technologies become industry standards, with a variety of battery types and capabilities being built. But Noble said that its new charging stations, officially called CleanCharge/Solar Tree Charging Stations, can be used with any type of electric cars.

“We are technology agnostic,” he said.

How the stations work

Envision’s charging station works by absorbing solar energy from the roofs of the structure. It turns the energy into electricity, which is downloaded through a pump, much like a traditional gas pump. The driver, who uses an electric car – 100 percent electric or a hybrid – pulls up and inserts a credit card into the machine.

The car owner is charged based on the amount of electricity used, and the time of day pumped. During peak hours, such as afternoons, the price would be higher. During non-peak hours, such as at night, the price would be lower, said Noble.

Get paid more during peak hours
Here’s the amazing part: car owners could actually get paid by utility companies to give back electricity through such charging stations. Instead of pumping electricity from the stations into their cars, owners with high battery levels could actually do the reverse and get paid for it.

“They would pay you a far higher premium for the energy, because it’s peak time,” said Noble.

Noble explains why. “When a peak load happens – summer, 2 p.m. — they have to generate the electricity or there will be a blackout. They can’t just cut back evenly on all appliances. If more air-conditioners are on than they can accommodate, they have to black out.”

As a back up, utilities use other generators, which are very expensive to build and maintain, said Noble.
But with an electricity “smart grid,” said Noble, the utility company can access additional energy through cars.

“If you have programmed your (electric) car to allow for a draw down of your battery, then the utility (company) can actually use that energy,” he said. “It will save the utility an enormous amount of money for not having to build another power plant, because they can draw down from the extensive fleet of electric vehicles that are in the parking lot.”

A “smart grid” allows solar electricity generated in one part of the network to be used in another part, he explained. It also is a renewable resource, because utility companies currently use fossil fuels to generate electricity. By using electricity created by the sun, the supply is infinite.

Challenges

The greatest obstacle to widespread use of such technology is education. The general public does not know about or understand how electric cars or smart grids work, Noble said.

Joseph Gottlieb, president of the Electric Vehicle Association of San Diego, notes that solar electric car charging stations is not a new concept and “totally feasible.” At least two other San Diego companies were working on similar projects, he said, but Envision’s seems to be the first to market, with a “smart grid” connection.
____________________________________________________________________________________

About the company

Revenues 2007: $150,000

Revenues 2008: $3 million

Revenues 2009 projected: More than $5 million

Number of projects 2007: 2

Number of projects 2008: 9

Number of projects 2009 projected: 15

Number of employees: 8

Expertise in San Diego: engineers, designers

Manufacturing locations: California, Pennsylvania, and in future, Arizona and India.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Tuesday, May 19, 2009

Mara Fortin and Judy Shuta of San Diego traveled to Los Angeles on Tuesday to watch Adam Lambert sing in the final showdown of “American Idol.”

Lambert performed against Kris Allen of Conway, Ark., in the last competition at downtown L.A.’s Nokia Theater.

More than 88 million people voted after last week’s episode, with “only” a million votes separating the top two singers, Lambert and Allen. This Tuesday night, the two will sang their final numbers, before the audience votes. The winner will be announced Wednesday night in the show’s season finale.

Mara, 36, and her mother Judy, 61, have been following Lambert since the season began. Mara, a business woman, is also a graduate of Mt. Carmel High. Judy, an assistant to the principal at Mt. Carmel High School, has known Lambert since he attended school there.

They both met Lambert two weeks ago, when he visited his alma mater for a student meet-and-greet and sang for the students and the public.

They got complimentary tickets to attend Tuesday’s show, from a friend from Star 94.1.

Mara and Judy sent SDNN updates throughout the day, before they entered the Nokia Theatre, and after they came out. Follow them here.

“It’s very personal to me, since I knew Adam,” said Judy. “It’s fun to see one of our own on ‘American Idol’ and possibly win the title.”

“It’s the ‘American Idol’ journey,” said Mara. “We’re just here to have a good time and support Adam. He deserves to win.”

Their adventure will be updated with the most recent posted first:

9:13 p.m. Mara and Judy drive back to San Diego.

“We’re dead tired, our feet hurt, and we can’t wait to get home,” said Judy.

8:54 p.m. Mara and Judy recall other parts of the show

“Adam and Kris are very close,” said Mara. “After each set, one would leave the stage and the other would come to set up, and they would hug each other.”

The two singers had done a coin toss, to see who would sing first. Allen won, and he chose to go second. By doing so, the audience would end the evening on his song and the judge’s comments for him.

Carrie Underwood sang the final song. She had a leg injury and limped onto the stage, said Mara, but when the cameras rolled, she belted it out and the audience couldn’t tell she was injured. When she was done, “she was limping off the stage,” said Mara.

Mara had the opportunity to see Lambert up close, because he chatted several times with the woman standing next to her — Kristi Gill, who performed in several high school musicals with Lambert.

Judy got to go to the front row and see Lambert’s father, Eber.

Judy said that the theater was actually very noise, with people and cameras moving around. “There was noise everywhere,” she said. “The performance we could hear pretty well, as long as people weren’t screaming. It’s much clearer to watch on TV.”

After the show, they mingled with the audience and took photos with Lambert’s dad, Eber.

7:35 p.m. Mara and Judy recall the show

Mara said: “I was in the front, right in the middle. I was closer to the stage than the judges. If I wanted to, I could reach out and touch them (the singers).”

Mara was in the moshpit, where fans stand the whole show.

“When you’re standing in that pit, it’s all about the arms, big movements. The producer told us to ‘Move your arms, everything is exaggerated.’ You have to get your arms up in the air to look like there’s anything going on there,” said Mara.

Lambert and Allen sang three songs: one that they sang previously in the show. One that Idol producer Simon Fuller chose. And another that Kara DioGuardi co-wrote.

The first song was something each did well with early in the season, though Mara and Judy could not remember any of the songs. Simon Cowell gave the first round to Allen.

[For the first song, Lambert sang, "Mad World." Jackson called it an "A+" performance; DioGuardi called him an "extraordinary singer and incredible artist." But Cowell called it "over theatrical," like something from Phantom of the Opera.

[Allen's first song was "Ain't No Sunshine." The judges raved about his artistic style. Cowell said that Allen won round one.]

The second song, said Mara, Cowell said “Adam won by a million miles, it was way over the top, Adam nailed it.”

[For the second song, chosen by Fuller, Lambert sang "Change is Gonna Come." Jackson called it "unbelievable," DioGuardi called it the "best interpretation" of songs, Abdul called him a "superstar" and "iconic." Cowell said Lambert was "back in the game."

[Allen's second song, also chosen by Fuller, was "What's Going On." Jackson said: "Its a little light for this big ole room." DioGuardi praised his ability to "uplift people, make think, make them feel." Cowell said: "You did not grab hold of it and make it your own." He gave round two to Lambert.]

“When Adam sang his second song,” said Mara, “he did such a fabulous job, everyone went wild.” But with Allen, “it didn’t catch us, and we didn’t get as excited. During the commercial, the producer came over and told us, ‘Can you please get more excited? Wave your hands as much as possible.’”

[For the third, Lambert and Allen sang the same song, "No Boundaries." Cowell called Lambert "one of the best, most original contestants we've ever had on the show." Cowell told Allen, "You thoroughly, thoroughly deserve to be standing on this stage tonight." ]

“None of (the judges) predicted that Adam would be the winner, but the way they were congratulating them, it was clear that Adam would be the winner,” said Mara.

“With Kris, they kept saying, you deserve to be here. You should be proud, almost like a consolation. Simon said, ‘By the look on your parents’ faces, you should be proud,’” said Mara.

“With Adam, their comments were, ‘You’re so powerful, you have this amazing voice, you’re one of the most talented singers to be on this stage,’” said Mara.

“They felt that if America voted properly, Adam Lambert would be the American Idol for season eight,” said Mara.

Judy sat in the audience area, about eight rows back. She was amazed by the stars she saw at the show, including: Anthony Hopkins and Katie Holmes and her daughter.

She was also impressed by all the Idol finalists who were at the show. In all, the theater held some 7,000 to 8,000 audience members, she said.

But most all, Judy loved watching Lambert sing. “It was an absolutely thrilling performance.”

2:35 p.m., 3:50 p.m., 4:23 p.m.: Phones turned off.

“American Idol” audience participants must hand in their cell phones, cameras and other equipment when they enter the theater, said Mara, who has been to a show before.

Mara said earlier she would probably only take in a stick of lip gloss.

1:53 p.m.: Arrive in L.A.

Judy and Mara arrived in L.A. and parked at Staples Center.

“The L.A. traffic wasn’t exciting at all,” said Judy. “It’s quite a mess. It makes me glad I live in San Diego.”

Judy and Mara touch up their make-up. “We can’t bring that in,” said Judy. “We’re doing that in the car.”

Judy saw a lot of people walking down the street, forming a line.

Mara got on the phone to check where they were supposed to meet the other San Diego fans — the flag pole.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Wednesday, May 6, 2009

Oh my god, Adam Lambert will be in San Diego on Friday!

You know, Adam, the “American Idol” contestant who might actually win this season’s crazy-wild show.

The one with the slate-chopped hair, black-painted fingernails, nasty green eyes and marathon banshee screams.

The one who grew up in Rancho Penasquitos, went to Mt. Carmel High School, and performed in local children’s theater.

Adam Lambert, the “rock God,” as “Idol” judge Kara DioGuardi called him, will be visiting the homeboys this week. Lambert is slated to do an interview with Jeff and Jer on Star 94.1, and perform a free concert at his old high school Friday at 10 a.m.

Aahhhhhhhhhhh!

At Mt. Carmel, some of Adam’s biggest fans are doing their all to make sure he wins.

Allyson Jacyln Ruiz, 14, text messaged 500 times to vote for him on Tuesday night. “Literally 500 times, I was like 500 outboxes,” she said. “I loved his performance, I loved the song he sang…I really want to see him win.”

Kira Compana, 16, Stephanie Valdez, 17 and their friends Sarah, 16, and Ashley, 16, are making posters and T-shirts with Lambert’s photos in preparation for the concert.

Compana, who works on the high school yearbook, said they plan to give Lambert a tour of the school if time allows. Valdez said Lambert was going to tour the theater, with all the drama students.

Compana said that when she found out Lambert would be there, “I ran up… screaming, because he’s my favorite on ‘American Idol.’”

Students in the drama school see him as a role model. “It encourages me to do more,” said Carribean Parnell, 14. “When you look at how far he went, it makes me want to go further.”

Kimi Nothduret, 15, a drama student, said that when she heard him sing one particular song, “I almost cried.”

Even though a lot of people think Lambert is gay, no one cares. Photos have been floating around the Internet showing Lambert kissing other men and Lambert has told “Access Hollywood”: “I have nothing to hide. I am who I am.”

“What does it matter?” asked Hannah Gillespie, 14. “It’s a personal choice, whatever.”

The girls think Lambert’s hot. “He’s a bomb,” said Parnell. And he’s got style. “He’s OG,” said Gillespie, meaning “orginal gangster,” which means he’s an original singer.

Even the school staff is rooting for their former student. Judy Shuta, administrative assistant to the principal knew him when Lambert performed in high school musicals, including “Big River” and “The Secret Garden.” She recalled his talent, while flipping through old yearbooks that showed Lambert’s photos.

Shuta and other staff have been emailing district teachers and staff, encouraging them to vote.

Especially after Lambert ranked in the bottom three the previous week, Shuta cranked up the heat, voting for two hours straight Tuesday night. “We’re doing our part to keep Adam running,” she said, “because we think he’s the best.”

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Tuesday, September 15, 2009

The recession may be technically over, but San Diego’s businesses are still feeling it.

Business leaders and economists were responding to the Federal Reserve Chairman Ben Bernanke’’s comments Tuesday that “the recession is very likely over at this point.” Bernanke also said that unemployment would likely continue to rise.

“No one’s popping any champagne corks yet,” said Ruben Barrales, president of the San Diego Regional Chamber of Commerce. “At a macro-economic level, the recession may be ebbing, but the reality is we are in a soft economy right now and business people in San Diego are still faced with tough economic challenges.”

Businesses will need more time to see a turnaround, said Alan Gin, an economics associate professor at the University of San Diego.

“Spending is going to pick up, housing sales will continue to be good, but businesses will hold back before they start hiring people again,” Gin said. “They want to make sure the economy is fully rebound before they take on more jobs. ”

The residential construction industry will continue to drag down the overall economy, said Alan Nevin, an economist at Marketpointe Realty Advisors in San Diego. While the federal government has set aside stimulus funds for this sector, it was “a drop in the bucket” for what was needed, he said.

A strong residential construction industry is critical to the economy’s growth.

“Until that industry comes back, we will not have a healthy economy,” Nevin added. “It takes time and financing, and until the lenders are willing to open up their pocket books to developers, the developers will not be able to move forward.”

USD economist Gin believes job losses will continue rising through early 2010, as San Diego businesses remain cautious.

Barrales agreed that “It will be after a number of quarters of positive economic growth that we see unemployment actually stabilizing.”

This is because small businesses still face tight credit markets, said Barrales.

San Diego’s high tech and life science companies are also still “feeling the pinch,” said Moya Gollaher, executive vice president of Connect, a non-profit organization representing San Diego’s high tech and life science industries.

“We feel like (the recession is) continuing, because ready access to capital does not exist right now in ways that we see would contribute to the robust growth of start up businesses in San Diego.”

Still, San Diego’s economy has several bright spots, experts said.

California has started to pull out of recession and San Diego has not suffered as much as other areas, due to a diversified economy, said Marketpointe’s Nevin.

“We are in particularly good shape because of the military spending that’s going on here,” he said.

San Diego’s residential real estate market is also on a rebound, with housing sales moving up in the last several months, said Nevin. The number of foreclosures on the market has dropped from half to a third of inventory in the last year, while sales and prices are creeping up, he said.

The experts also agreed that general consumer confidence still has a ways to go in San Diego.

“There are some very positive signed, but it’s still a fragile economy,” said Barrales.

Nationally, recovery is only taking place in certain states, said Nevin. States where the economy is tied to automobile and other manufacturing industries — such as Michigan, Ohio and Indiana – are still hurting badly, he said.

In San Diego, businesses remain cautious.

“We need to move cautiously, but anticipate that the economy will eventually turn around,” said Barrales.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Tuesday, June 2, 2009

Think of it as a job fair with booze.

The Pink Slip Party, founded in L.A., is having its first San Diego event Wednesday. It takes place in Balboa Park.

“The purpose is for people who are unemployed or looking for a career change to network with recruiters and companies that are hiring, in a casual relaxed environment,” said Beryl Smith, president, BCS Staffing, a Los Angeles-based recruiting firm

“It’s about getting in front of people and making that connection.”

For the San Diego event, 100 people have RSVPed and 10 to 15 recruiters have committed to attending as of Tuesday noon, said Smith. The recruiters represent companies with jobs in administration, accounting, sales, engineering and technical services.

The companies include Accountemps, Robert Half Technology, Colonial Life, Aerotek and Northwestern Mutual Financial.

Since March, Smith has organized four “Pink Slip Parties in L.A,” with 50 to 350 attendants each. She was inspired by “Pink Slip” parties, which have been around since 1910, when laid off factory workers gathered at taverns in New York.

In today’s work environment, face-to-face networking beats sending out resumes, said Smith. “It’s a great way to network with other unemployed people. You don’t know who knows who. It’s who do you know.”

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Wednesday, May 27, 2009

Defense contractor Northrop Grumman’s success strategy may seem specific to the defense industry, but in fact can be emulated by other businesses in San Diego.

The strategy? Business focus, advanced technology and service contracts. These are tactics well-suited to the strengths and resources of San Diego county.

Northrop Grumman has succeeded by focusing on its core industry – defense , said Ken Herbert, aerospace and defense director, Frost and Sullivan, a market research firm.

Business focus

In the early 90s, many aerospace companies moved into the intelligent transportation business, “which never became anything,” said Herbert. In 2005, defense companies also started launching satellite networks for telecommunications, resulting in a market glut and revenue losses.

In contrast, Northrop Grumman concentrated on products for the defense industry. “They’ve traditionally been very focused and very selective in their markets,” said Herbert.

The key example of this is the unmanned vehicles market. Fifteen years ago, Northrop Grumman’s leaders foresaw that it would be a strong sector in the defense industry and they went after it, according to John Pettit, Northrop Grumman’s lead executive in San Diego.

In 1999, the company bought San Diego-based Ryan Aeronautical, inventor of the Global Hawk stealth plane. Northrop Grumman absorbed Ryan’s 3,000 staff and took the product to the next level.

The unmanned vehicle systems are the stuff of military dreams – planes, helicopters and tanks that are controlled entirely by remote control, requiring no human pilots – sort of like those remote toy airplanes you find people playing with at Mission Bay. Except that these vehicles are life-size, capable of shooting real missiles and controlled across different continents. Pettitt calls them “stealthy, flying Dorito chips.”

“Northrop Grumman recognized the importance of UAVs early on and they executed it really well,” said Phil Finnegan, director of corporate analysis, Teal Group, a market research firm. “They continued to put high priority on it, even when other manufacturers did not. ”

Today, the company is the industry leader. Northrop Grumman has nearly 45 percent of the $3 billion UAV market, said Herbert. “They’ve got a very strong lead in this market,” said Herbert.

Its closest U.S. competitor is General Atomics, which has 20 percent of the market, said Herbert. General Atomics is also based in San Diego, with its main facility in Rancho Bernardo and production facilities in Sabre Springs. Their unmanned vehicles are on the lower end of the market, said Herbert. But growing orders from the U.S. military has buoyed the company’s expansion.

Northrop Grumman’s Pettitt said: “We saw 15 years ago that unmanned systems definitely had a future. We invested a lot of money into that area and we’ll build on that.”

Advanced technology

Like many companies based in San Diego, Northrop Grumman has also done well by focusing on advanced technology. In the UAV market, its Global Hawk commands the high-end. “The global hawk is already established as a strong niche in the market, as really the premier high-altitude, long-endurance UAV,” said Teal Group’s Finnegan.

The general price range for Global Hawks is $30 million to $60 million each, depending on the model and sensor level, according to Jim Dunnigan, publisher of StrategyPage, an online military news site.

On average, the U.S. Air Force and Navy paid $58 million for each Global Hawk. Since 2003, the military has bought nearly 20 craft, with each new version flying longer and farther, according to StrategyPage.

The total U.S. Air Force contract commitment is about $107 million, with about $26 million fulfilled already, according to a Department of Defense statement.

Other U.S. and foreign manufacturers dominate the lower-end market, making smaller, more tactical UAVs. But Northrop Grumman has not competed in that area. “They’re really at the higher end, the higher-scale, generally more-capable UAV that a lot of countries will be looking for,” said Finnegan.

This has made Northrop Grumman competitive in the global marketplace. The company has sold Global Hawks to Germany, with potential orders from Japan, South Korea, and Australia, among others.

Selling UAVs overseas does not compromise U.S. security, said Finnegan. This is because buyer countries are friendly and the government must approve technology missile sales. “It’s in the U.S. interest to have Allies using U.S. equipment,” said Finnegan. “It promotes defense ties, operability between forces.”

This proprietary technology has enabled Northrop Grumman to broaden its product range. It is now developing stealth helicopters, called Fire Scouts, which would be sold to the U.S. Navy and Army, as well as other countries.

“This really has the potential for being a large area for growth for Northrop Grumman,” said Finnegan.

Service contracts

Northrop Grumman has also boosted revenues by moving into service contracts. In addition to selling its products, Northrop Grumman has generated more sales by repairing and maintaining them.

“That’s one of the broad shifts we’ve seen in the market, in revenue from hardware and software to the service side of the business,” said Frost and Sullivan’s Herbert. “But Northrop is a firm that has done a very good job in this.”

With federal budget cuts, defense companies are pursuing the service business, said analyst Finnegan.

“Especially now, more of these companies are going after the service business, because the defense budget may be declining,” he said. “Service revenues are going to be much more stable than the actual procurement of items. That makes it particularly desirable.”

The company’s sales revenue for manufacturing and services also shows this shift. In 2000, product sales income was $6.13 billion, or 81 percent of total revenue, while services generated $1.49 billion, or 19 percent, according to company spokesperson Thomas Henson.

By 2008, this had moved to product sales of nearly $20 billion, or 58 percent, and $14.3 billion in services, or 42 percent of total revenue, according to Henson.

Breaking that down further, a typical Global Hawk plane costs $30 million to $60 million, and the longevity is still too early to tell, said StrategyPage’s Dunnigan in an email. The “cost per flight hour, including maintenance, is cheaper than for manned air craft, but is still several thousand dollars an hour,” he said.

The same might be said of Northrop Grumman’s information technology and shipbuilding sectors. Northrop Grumman is the U.S. government’s second-largest information systems contractor. In San Diego, the company is a lynchpin for the City, with a $100 million contract to maintain 130,000 computers, servers and data centers, such as those in San Diego’s public libraries. This five-year contract lasts through 2012, providing stable revenue for the company in the interim.

Northrop Grumman’s IT division is “likely to be less cyclical than their hardware manufacturing businesses,” said analyst Finnegan. “It adds stability to the company.”

The same is true in the ship repair business. Northrop Grumman is the U.S. Navy’s largest ship contractor. In San Diego, Northrop Grumman is the leading ship repair contractor for the U.S. Navy, in charge of servicing the USS Ronald Reagan (CVN 76) aircraft carrier.

Going forward, the company expects the service side of the business to continue to grow. “We’re pursuing some major programs out of San Diego,” said Pettitt.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Wednesday, May 27, 2009

Northrop Grumman’s response to challenges are strategies that San Diego companies can adopt and adapt to their industries.

Northrop’s difficulties have forced it to pay closer attention to the market, think globally and plan for the future.

These challenges include the shrinking economy, a worker shortage, quality control and maintaining a competitive edge.

Defense budget cuts

The first challenge is a shrinking defense industry. President Obama’s defense policies have resulted in spending shifts. On national level, Defense Secretary Robert Gates recently cancelled big-ticket military items, such as F-22 fighter jets and the presidential helicopter.

These cuts do not affect Northrop Grumman directly, but are sending ripples across the industry. Lockheed Martin, which makes F-22s, could slash as many as 100,000 jobs. Boeing, hit by slowing commercial plane orders, slashed 10,000 jobs in early 2009.

Ken Herbert, an aerospace and defense director at Frost and Sullivan, believes the Department of Defense will put “significant pressure” on homeland security spending as well. Northrop Grumman will be “negatively impacted,” he said.

“We’ve got a couple of programs that are possibly on the administration’s hit list,” said John Pettitt, Northrop Grumman’s lead executive in San Diego. This includes the Joint Tactical Radio Program, or Jitters, which is a project with Lockheed Martin. However, it is not done in San Diego and will not affect operations here.

The shipbuilding business has also fluctuated, said Pettitt. “There just isn’t enough money to buy everything war fighters need,” he said. But “we’re not going to give up on programs that we think are absolutely essential to the defense of the United States. We’re going to do what’s available to us legally to keep those programs alive. ”

Still, the company is watching the administration closely. “We like to think we are well-aligned with Obama’s programs,” said Pettitt.

Worker shortage

In San Diego, Northrop Grumman’s biggest business challenges echoes that of other businesses: a shortage of knowledge workers. Its greatest need is for engineers, technicians and project managers.

“Our biggest challenge is recruiting,” said Pettitt. “Not many people want to move to Southern California, and pay the housing costs and the general cost of living.”

Like many other high-tech companies, Northrop Grumman recruits heavily from regional universities. It also invests in programs encouraging university and high school students to pursue engineering and sciences.

But recruiting remains “a challenge,” said Pettitt. “We’re competing with the biotech industry, the U.S. government… and you got to be a U.S. citizen.”

Quality control

Quality control has also emerged as an area of attention. A recently-settled lawsuit with the federal government involving defective parts cost the company $325 million. The settlement involved a company Northrop Grumman acquired, TRW, which knowingly sold defective satellite parts to the federal government.

The settlement was offset by another $325 million settlement, paid by the federal government to Northrop Grumman, for a terminated missile contract. For the company’s bottomline,”the impact is negligible,” said analyst Finnegan.

Still, over the last 10 years since the suit was initiated, the company has beefed up employee and technology investments for quality control, particularly in its unmanned vehicles sector in Rancho Bernardo.

Today, quality control is a high priority for the company. “We’ve taken great lengths (on Global Hawk products)… to implement some of the quality initiatives that we’ve been doing,” said Chris Cool, a vice president in the San Diego aerospace sector.

Maintaining industry lead

A more important challenge for Northrop Grumman is maintaining its industry lead. “It will be competitive — with defense budgets shrinking — to maintain a differentiated position, and alternatively find new opportunities to find top line growth,” said analyst Herbert.

Northrop Grumman’s San Diego lead executive John Pettitt said the overall company is exploring new areas to apply its technology, including clean technology and cyber security.

But in San Diego, the focus will remain on its unmanned vehicles and other existing businesses for the next several years, said Pettitt.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Wednesday, May 27, 2009

Northrop Grumman is a major player in the San Diego economy. Here are some stats:

Ticker symbol: NOC

Number of employees in San Diego: 4,345 total
– Aerospace, unmanned vehicles sector: 1,935
– Information systems: 1,500
– Ship repair and maintenance: 780
– Information technology: 130

Salaries paid in San Diego in 2008: $350 million

Number of job openings in 2009: 500

Types of jobs:
– Engineering
– Technical oversight
– Program management
– Repair maintenance
– Pier labor

Job listings: Northrop Grumman website

San Diego job missions:

– Unmanned systems
o Design and test unmanned aircraft systems (UAS) including Global Hawk, Fire Scout, Unmanned Air Combat System and Aerial Targets

– Network communication systems
o Design and maintain Open-systems, net-enabled command and control systems; software-defined radios for F-35 Lightning II and F-22 Raptor fighters, Joint Tactical Radio System and counter IED systems; advanced data links, data link management systems and airborne gateways

– Information technology
o Provide information technology for San Diego County

– Ship repair and maintenance
o Repair and maintain a range of ships, including aircraft carriers, surface
combatants, wide-deck amphibious ships and mine sweepers

Number of suppliers in San Diego: 100 companies

Amount of purchase orders in San Diego in 2008: $500 million

Latest projects:

– Unmanned Combat Air System Demonstration (UCAS-D)) – The UCAS is specifically designed for carrier takeoffs and landings, strengthening the Navy’s ability to project a highly long-range, survivable and persistent surveillance and attack presence.

– Airborne Maritime and Fixed (AMF) Joint Tactical Radio System (JTRS) – AMF JTRS enables operations of highly secure, high performance military tactical networks, connecting air, land and sea forces to communicate in a network-centric environment.

– CREW (Counter Radio-Controlled Improvised Explosive Device [RCIED] Electronic Warfare) – CREW systems are electronic jammers designed to prevent the detonation of IEDs on the battlefront. One version is designed for mounting on a vehicle, another is a pack carried for individual ground troops.

– Broad Area Maritime Surveillance unmanned aircraft system (BAMS UAS) – The BAMS UAS will provide the Navy with a persistent maritime intelligence, surveillance and reconnaissance system to protect the fleet and offer a capability to detect, track, classify and identify maritime and littoral targets.

– USS George Washington – The company’s shipbuilding operation on North Island recently repaired fire damage that occurred at sea on the nuclear-powered Nimitz-class aircraft carrier prior to its deployment to Japan.

Follow Helen on Twitter @HelenChang.