Genentech launches major Vacaville expansion

By Brad Stanhope
 October 16, 2013 |

VACAVILLE — Genentech is expanding in Vacaville.

The company will spend more than $285 million over the next four years to expand two manufacturing facilities, including Vacaville. It will make the Vacaville plant the largest biotech manufacturing facility in the world.

The company announced the expansion in a press release Sunday night. It will add about 200 new jobs in Vacaville and 50 in Oceanside. Vacaville’s plant currently employs about 400 people.

Robin Snyder, the director of corporate communications for Genentech, said the expansion should start in June 2014 and will be finished by the end of the first quarter of 2016.

“Genentech is the No. 1 maker of cancer medicines in the world and we continue to deliver on our pipeline of first-in-class and best-in-class medicines,” Snyder wrote in an email to the Daily Republic. “We have received FDA approval of five new medicines in the past three years.”

Sandy Person, president of the Solano Economic Development Corp, called the announcement great news for the county and Vacaville.

“Genentech has long been one of Solano County’s premier life science companies,” she said. “Its growth is an important piece to our economy and our life science cluster.”

“We’ve definitely turned the corner on the economy,” Person said. “The Great Recession was painful and it lasted too long.”

The company is a member of the Solano Economic Development Corp., Person said.

“We’ve been working with Genentech to provide any resources we could,” she said.

The new positions will range from technicians to scientists and engineers, according to the Genentech press release.

“California has always had an impressive skilled workforce that has allowed Genentech to hire diverse and talented individuals in various disciplines,” said Ian Clark, Genentech’s chief executive officer, in the press release.

Snyder said that the decision to expand now was due to a growing demand for Genentech’s products.

“As a network, we’ve been operating at maximum capacity,” Snyder wrote. “These investments will allow us to ensure reliable supply of or currently marketed medicines, as well as to deliver on our industry-leading pipeline.”

The news is particularly good in that it comes less than a week after Merck, a pharmaceutical rival, announced plans to lay off 8,500 employees and cut $2.5 billion in costs over the next two years.

It’s the second bit of good news for Vacaville in a week – after Thursday’s announcement that Kaiser Permanente Vacaville Medical Center received approval to become Solano County’s lone Level II trauma center.

Genentech has three locations in California – Vacaville, South San Francisco and Oceanside – and one in Hillsboro, Ore. There are about 10,000 Genentech employees in California, with 3,000 of them manufacturing jobs.

The California facilities produce medicines for a range of diseases including cancer, rheumatoid arthritis and asthma.

Biologic medicines are among those manufactured in Vacaville. Biologic medicines are large molecules that are created by biological processes, rather than being chemically synthesized, according to the press release. They are typically administered via injection or intravenously.

Genentech is a member of the Roche Group. It was founded more than 35 years ago and its Vacaville plant became fully functional in 1999.

Person of the Solano Economic Development Corp. said life science got a lot of its start in the San Francisco Bay Area in part because of the University of California, Berkeley, Stanford University, the University of California, San Francisco and the University of California, Davis.

Taking a biotech drug to market requires infrastructure for manufacturing and Solano County has the needed workforce, water and land, Person said.

“We kind of sit at the center of the Northern California megaregion,” she said.

Genentech company headquarters are in South San Francisco. Its website is www.gene.com.

Ryan McCarthy contributed to this report. Reach Brad Stanhope at 427-6958 or bstanhope@dailyrepublic.net. Follow him on Twitter at www.twitter.com/bradstanhope.

S.T. Johnson Co. joins Fairfield manufacturing hub

By Brian Miller and Karl Dumas
October 06, 2013

The recruitment of manufacturing companies remains a high-priority target for local economic development efforts and is a critical engine of economic growth.

Manufacturing is certainly visible in Fairfield, with major companies like Anheuser-Busch, Clorox and Ball employing hundreds of people and contributing significantly to the local economy. Fairfield offers a central location, available water and sewer capacity and a diverse stock of modern yet affordable industrial space.

At a recent county planners’ “brown bag” lunch, Sandy Person, executive director of the Solano Economic Development Corporation, said, “Manufacturers are a catalyst for innovation and economic growth. A manufacturing company not only employs its own workers but can attract other companies which provide local employment, including suppliers, marketing firms and distributors. Manufacturers also add value to the local property tax base and contribute sales tax revenues.”

It is always good news when a manufacturer decides to locate a facility in Fairfield.

S.T. Johnson Company, an Oakland-based company,has announced plans to move into a facility at 5160 Fulton Drive. S.T. Johnson Company designs and manufactures burners for industrial and commercial plants, boiler management controls, burner modernization controls and fuel handling systems.

Economic Notes spoke with Barbara Florio, controller for the company, about their plans.

Economic Notes: Please tell our readers a little bit about S.T. Johnson and the company’s history.

Barbara Florio: S.T. Johnson Company is an industry leader in providing reliable and innovative combustion solutions to industrial and commercial users. S.T. Johnson Company was founded in San Francisco in 1903 as a burner manufacturer and fuel oil distributor. The company rose to prominence in the 1920s with the advent of the Johnson rotary burner, which was famous for its simplicity, reliability and durable design. Today we continue a tradition of innovation and excellence that produces a modern array of both packaged and engineered combustion systems that lead the industry in quality, reliability and pollution control.

EN: What made you choose Fairfield for your new location?

Florio: Fairfield is centrally located between the San Francisco Bay and Sacramento markets, which is a well-positioned location for our business.

EN: Will there be other operations occurring in the Fairfield facility in addition to manufacturing? Is there room for expansion in Fairfield?

Florio: We are leaving Oakland and consolidating all operations in Fairfield, including engineering and manufacturing. The Fulton Drive facility has plenty of room for expansion in all areas of our operation.

EN: How many people do you anticipate employing in Fairfield? When will the Fairfield facility be up and running?

Florio: We expect to be fully up and running within a few weeks. I can’t predict numbers, but it is safe to say there will be numerous employment opportunities in the coming months and years.

S. T. Johnson joins a diverse roster of manufacturing companies that call Fairfield home.

Fairfield is of course known for the cluster of food- and beverage-related businesses, including breweries, specialty foods and food packaging. Fairfield is also continuing to attract companies that provide specialized equipment and tools to regional, national and international industry.

This kind of high technology and innovative industry is the wave of the future as these companies can support the high-tech industry in the central Bay Area, while our food and beverage companies take advantage of the agriculture bounty of inland California.

Economic Notes is an update from Fairfield City Hall written by Brian Miller and Karl Dumas of the Fairfield Planning and Development Department. Reach them at 428-7461 or email at kdumas@fairfield.ca.gov or bkmiller@fairfield.ca.gov.

Editorial: ICON could kick-start economic revival in Vacaville

Published by The Reporter

Posted: 09/29/2013 01:02:05 AM PDT

 

Vacaville City Council members didn't hesitate Tuesday night, unanimously signing off on an agreement to share future tax revenue with ICON Aircraft in exchange for the Los Angeles-based company relocating to the industrial park on the back side of Nut Tree Airport.

 

Councilmembers might be forgiven for not asking a single question about the deal. This was, after all, the culmination of more than two years of wooing ICON here. If councilmembers weren't personally involved, they certainly were kept up to date on what was being considered.

 

But members of the public who haven't been following every twist and turn of negotiations might be wondering what the city is giving up, why it is doing so and what it expects to receive in return.

 

Let's start with the why: Bringing ICON Aircraft to Vacaville could be a boon to the city, the county and the entire state.

 

ICON is a start-up company that is preparing to enter the light sport aircraft market that opened up in 2004 after the FAA adopted a new category of licensing for recreational pilots. Sport pilots are allowed to fly only during the day, in good weather and in uncontrolled airspace. The aircraft they are allowed to operate must be smaller, slower and less complicated than a regular airplane.

 

Enter ICON's A5, a completely portable two-seater that runs on gasoline and which can take off and land on water, turf or runways. It takes only two weeks to earn the license to fly it and even though it's pricey -- currently about $180,000 each -- potential customers are already lined up.

 

ICON is looking not only for space to build and sell its product, but also a place where it can teach customers how to fly it.

 

Almost three years ago, the company began a national search for just the right place. In California, the Governor's Office of Business and Economic Development (GO-Biz) put out the word, which reached the ears of Sandy Person, director of the Solano Economic Development Corp., who brought it to Vacaville's attention. That started the courtship.

 

Ultimately, ICON identified an industrial building on Beechcraft Road as one of its top three sites. The other two are in Arizona and Texas, both of which may have an advantage over Vacaville when it comes to the costs of starting businesses there. That's one reason the city feels the need to sweeten the deal by offering ICON incentives to come here.

 

The other reason is that a business like ICON is a gift that keeps on giving. A company whose product sells for the price of a modest home generates a lot of sales and property taxes. But that's not all. ICON's business plan calls for it to employ as many as 500 people, who would be paid much better than minimum wage. Those employees are likely to live and shop in Vacaville, generating more tax revenue for the city, the county and the state.

 

Asa start-up, ICON will be in the market for raw materials, which could encourage even more new businesses to form to supply them. Those businesses, in turn, would hire more workers and generate more tax revenue.

 

In addition, as a training site, ICON will need access to hotels and restaurants to house and feed clients -- again, creating more jobs and tax revenue.

 

Added together, ICON could generate up to 850 jobs and add $364.5 million for the region's economy, of which Vacaville stands to reap $1 million in new taxes, according to an economic impact report by economist Robert Eyler.

 

A few years ago, before the state disbanded redevelopment agencies, Vacaville might have been able to offer ICON a rebate on its property taxes to come here, as it did for Genentech. But, as City Manager Laura Kuhn told the council on Tuesday, "In a post-redevelopment world, we have to be very creative."

 

To her credit, City Manager Kuhn has creatively negotiated a deal that won't cost the city a dime if ICON fails as a business. If it succeeds, however, the company stands to be rebated a portion of the sales tax it generates. During the first two years, ICON's share of that rebate is 50 percent. In years 3 through 10, the rebate ranges from 30 percent to 75 percent, depending on the number of people ICON employs at an annual salary of $40,000 or more.

 

In addition, for every hotel room booked by ICON, the city will split with the company the Transient Occupancy Tax it collects on those transactions.

 

The city should be able to afford the rebates, Ms. Kuhn says, because if ICON is successful, the tax revenue from the additional business it will generate throughout the city will cover the cost of providing city services to it.

 

Vacaville isn't the only public entity that stands to gain from bringing ICON here. For more than two decades, the city and Solano County have recognized that Nut Tree Airport is an underused asset. ICON's presence there would change that in a hurry.

 

Solano Community College's aviation program at the airport also stands to gain. Not only might its graduates find work at ICON, but the college is prepared to offer training for ICON employees.

 

And if ICON chooses Vacaville, California stands to gain some much-needed bragging rights over Texas.

 

It's not a done deal yet, but Vacaville has done what it needed to do to bring a new major employer to the area. Here's hoping it's enough.

PG&E an important partner for community

Letter to the Editor -

Pacific Gas & Electric Co. has been an important partner in supporting the creation and retention of jobs in Solano County. Solano County Economic Development Corp. has seen the value of its work and its financial investment in local economic development.

Across the board, PG&E has consistently demonstrated its commitment in many different ways. Its support of our economic development efforts underlines its understanding of how partnerships with community organizations help improve economic vitality.

PG&E has a long history of investing in programs tailored to the communities it serves. Financial contributions, community engagement and volunteerism provided much-needed resources for many community-based nonprofit organizations, schools and nongovernment programs throughout our region. The contributions are entirely funded by the company’s shareholders, and do not affect rates for electricity or gas.

There is too often a misunderstanding of what it takes to attract new firms to bring new jobs to Solano County. One key factor is having the private sector, including the local utility provider, work in concert with government. PG&E has been integral in creating a collaborative environment that protects and retains existing businesses, service industries and manufacturing facilities.

PG&E understands that a vibrant community is one supported by healthy businesses and industry that provide for today’s workers and community, while setting the stage for growth well into the 21st century.

Therefore, as the California Public Utilities Commission considers a fine of PG&E for pipeline safety, it reasonably addresses the issue, but avoids crippling the company. PG&E has and must be able to continue as an effective partner in our economic development activities.

Sandy Person
President, Solano Economic Development Corp.
Fairfield

Vacaville council approves agreement with aircraft maker ICON

By Mike Corpos
From page A9 | September 25, 2013 | Leave Comment

VACAVILLE — The city of Vacaville has done everything it can now to woo light aircraft maker ICON.
With a 5-0 voice vote, the city council approved an agreement with ICON that would provide the company with tax incentives if it chooses to build its offices and manufacturing facility at the Nut Tree Airport.

City manager Laura Kuhn outlined the agreement she hammered out with ICON representatives, which puts the city in a position of near-zero risk.

Part of that agreement involves a sales and transient occupancy tax deal with ICON tied to the number of jobs generated at the facility, which will be used to build the company’s A5 sport light aircraft.

Kuhn said the 10-year agreement calls for a rebate on sales tax generated by ICON up to 50 percent for the first two years as an incentive for ICON to get the facility up and running.

After the two years, the rebate is tied to jobs with salaries averaging $40,000 per year

Up to 75 percent of the sales tax could be rebated, after the city receives its sales tax revenues from the state, if 500 full-time equivalent jobs are achieved. If job generation is less, the rebate is reduced.
The evaluation of jobs and rebate payments would be quarterly as the city receives its sales tax reports.

On the TOT, or hotel taxes, the city would also refund 50 percent of the ICON-generated TOT taxes, using a special promotion code to track the money generated by the manufacturer’s customers and business associates.

The agreement is for 10 years and is automatically renewed for another decade if the 500 jobs are achieved.

Kuhn and the council called the agreement a milestone.

“In a post-redevelopment world, we have to be really creative,” Kuhn said.

The council lauded Kuhn for her negotiating skills and her efforts to see the project through.

“These kinds of things don’t happen without collaboration,” said councilman Curtis Hunt.

There’s more work to be done, but the city is ready if ICON chooses Vcaville as its new home.

“The next step is we’ve got to work with the county, and get to an agreement with the county and then we’ve got some approvals to work through with local landowners and the (Federal Aviation Administration),” said Kirk Hawkins, ICON founder and CEO. “A few more hurdles to get through, but this was a big one.”

There’s no definite timeline, for a decision.

“We expect in the next several months to have a decision, to be able to make a public announcement at some point, which way that is,” Hawkins said. “While we’re not ready to celebrate just yet, we’ll celebrate this milestone.”

Reach Mike Corpos at 427-6979 or mcorpos@dailyrepublic.net. Follow him on Twitter at www.twitter.com/mcorposdr.

Vacaville could land aircraft firm

By Kimberly K. Fu/ KFu@TheReporter.com
Posted: 09/25/2013 01:01:01 AM PDT

With a cheer Tuesday, Vacaville leaders moved a step closer to bringing a high-tech aircraft production and sales business to the city.In a unanimous vote, the City Council approved a final agreement between the city and Southern California-based ICON Aircraft Inc., which has proposed the construction of a multimillion-dollar facility adjacent to the Nut Tree Airport."This really, truly is a significant moment in the history of the city of Vacaville," said Vice Mayor Dilenna Harris. "This is going to be fantastic and I just can't wait."Councilman Curtis Hunt agreed."This truly is a milestone for Vacaville," he said. "Five hundred jobs, potentially, a $10 million dollar facility. ... We are all so very excited about this.

"The city has been working for two years with ICON Aircraft, in partnership with the state, the county, the Solano Economic Development Corporation and others to reach an agreement that would bring the firm to Vacaville.The current agreement would bring ICON's unique amphibious light sport aircraft, the A5, to Vacaville. ICON officials have said there's a long waiting list for the luxury plane, which means the city would almost immediately begin to reap the benefits of sales tax revenues.

Future plans include a training facility.Other benefits, officials said, would include the generation of 500 or so high-paying jobs and more revenues for the city by way of ICON clients. That includes hotel stays and the frequenting of local eateries and shops by those looking into buying the planes, as well as learning to pilot them.Incentives have been built into the agreement, including sales tax rebates and the sharing of the transient occupancy tax.

City officials emphasize that there's no risk on their part in the agreement, which they described as win-win for the city, as well as the Solano region.Assemblyman Jim Frazier, D-Solano, assured the community that he would continue to help further the process any way he can."I will continue to put up a fight against Arizona and Texas," he said. "I am in Sacramento fighting on your behalf. ... I'm not going to let go."The matter now rests in the hands of ICON officials, who must choose between three locations to find the home for its headquarters. Arizona and Texas remain in the running.In other matters, the council also unanimously approved the Vanden Meadows development proposed for south Vacaville.

The project is a near-265-acre development to be built west of Leisure Town Road and south of the Southtown community.Plans call for 939 dwellings, a Travis Unified School District school site, neighborhood park, pedestrian trails and more.Council members said they want to scrap plans for apartment dwellings, which the applicant supports and pledged to initiate that process as soon as possible. More discussions are expected about traffic issues and road work.

Follow Staff Writer Kimberly K. Fu at Twitter.com/ReporterKimFu.

Wolk brings positive message to Solano

By Robin Miller/ RMiller@TheReporter.com

Posted: 07/27/2013 01:01:54 AM PDT

State Senator Lois Wolk, D-Solano, talks with local civic and business leaders following a presentation at the Friday breakfast gathering of the Solano Economic Development Corporation. (Robin Miller/RMiller@TheReporter.com)

When it comes to attracting and retaining business and jobs, California doesn't need to take a back seat to Texas and other states anymore.

 

That was part of the message State Senator Lois Wolk, D-Solano, brought Friday to local business and civic leaders during a Fairfield breakfast gathering of the Solano Economic Development Corporation.

 

Her message was straight forward: "The outlook (for California and Solano County) is tremendously positive."

 

Noting declines in unemployment rates, increases in the numbers of jobs created in the past year, and movement on important issues in Sacramento, Wolk said there are still challenges ahead but added that it was "wonderful to be here with some good news."

 

Of particular importance, she noted, was the passage of AB 93, an economic package that provides some tax exemptions for manufacturers on purchases of equipment and materials.

 

"For years we have heard that the barrier to expansion of business in California is that we have no sales tax exemption (for manufacturers) like every other state," Wolk said. "The argument is that equipment and materials should be exempt because the output, or product, they make is also taxed, so they are double taxed. AB 93 allows for the exemption for manufacturing processing businesses."

 

Governor Jerry Brown, she noted, referred to the tax exemption as his "Texas option," a comment that brought more than a few chuckles from the audience.

 

The exemption, she noted, are offered through a competitive process, with a select committee of the governor's awarding the credits of up to $2 million.

 

The plan may already be lined up to help Vacaville, as the exemptions could apply to an aircraft manufacturing firm currently negotiating to locate near the Nut Tree Airport.

 

ICON Aircraft Inc. of Los Angeles wants to establish a facility to build light recreational aircraft on land adjacent to the airport in Vacaville. "So much for Texas," Wolk quipped.

 

Wolk also talked to the group about the ongoing battle over the Delta, vowing to continue to fight for "real" quality controls that will benefit the region

 

And on education, she thanked voters for approving Proposition 30, providing funding for schools but added that more will need to be done in the future and that education remains a priority.