Monday, November 11, 2013

Solano's economy looking up

Solano's economy looking up

By Melissa Murphy/ MMurphy@TheReporter.com
Posted: 11/09/2013 01:01:27 AM PST

Solano County's economy is improving and one sure sign is that housing prices are rebounding, according economic experts who spoke to county business leaders Friday.
 
During the State of the Solano County Business Climate, hosted by the Business Journal, Robert Eyler, an economics professor at Sonoma State University, told an audience of business and community leaders that housing prices are up.
 
"Generally speaking, Solano will recover a little bit faster than California," he said, adding that the rebound is driven by construction and services in the county. "We caught a little fire in our housing market."
 
He said housing prices are expected to rise 6 to 8 percent in 2014.
 
Patsy Van Ouwerkerk, president and CEO of Travis Credit Union, said she's not surprised to see that the housing market has improved.
 
"There is a sense of optimism, but caution," she said. "Most believe that the worst is behind us and it's time to take managed risks."
 
Eyler said it remains to be seen if Silicon Valley will produce another technology bump to remain No. 1 in the World. He said the United States economy is still feeding off the technology boom from the last decade.
 
Meanwhile, Eyler said that nationally unemployment will drop to 6.5 percent by the end of 2014, perhaps under 6 percent by the middle of 2015. Housing prices are expected to rise 6 to 8 percent in the country, while inflation will increase 2 percent in California.
 
A survey conducted by the Business Journal, that garnered 100 responses from local businesses, shows a snap shot in time, said Brad Bollinger, publisher of the North Bay Business Journal.
 
The survey results showed that local businesses believe that manufacturing and health care are the top industries in the county. Nearly 65 percent ranked the overall business climate as "very favorable" or "favorable."
 
Bollinger noted that the survey was finished before the announcement that Genentech is expanding in Vacaville and that Caymus is moving its business to Solano County.
 
Additionally, about half of the businesses in Solano plan to expand within the county during the next five years, the survey found.
 
Sandy Person, president of the Solano Economic Development Corporation, said she's seen improvement as well.
 
"The past 18 months have been extremely dynamic," she said. "Frankly the past 5 years sucked."
 
She said other businesses have been in the trenches with them, doing more with less and losing staff.
 
"You have to want to be in California in order to do business in California," Person said.
 
Van Ouwerkerk said Travis Credit Union has seen more requests for business loans and increase in lines of credit.
 
"There have been investments in not just equipment, but people," she said.
 
Concerns from the audience were voiced about the roll out of the Affordable Care Act and its impact on local businesses.
 
Eyler said that even though it's still stumbling, he doesn't think it's changing the short or middle terms, but it will have more of an impact on the long term.
 
"We're going into an experiment together to see how it will impact us," he said.
 
Follow Staff Writer Melissa Murphy at Twitter.com/ReporterMMurphy.

Solano business forum sees improving economy

Solano business forum sees improving economy

business climate 11_7_13
From left to right, Rob Eyler, Sonoma State economics professor, Sandy Person, Solano Economic Development Corporation president, Patsy Van Ouwerkerk, Travis Credit Union president and CEO, and Brad Bollinger, North Bay Business Journal publisher, hold a discussion at the Impact Solano conference on the business climate in Solano County Friday at the Hilton Garden Inn. (Robinson Kuntz/Daily Republic)
 
 
 
 
By
From page A3 | November 09, 2013 | 2 Comments
FAIRFIELD — A Solano County business forum on Friday depicted a local economic outlook that continues to brighten, even if reasons for caution remain.

Look for the United States gross domestic product to grow 2 percent to 2.5 percent in 2014, said Robert Eyler, chairman of the economics department at Sonoma State University. California’s economy is forecast to grow 3.2 percent, he said.

“Generally speaking, Solano County is probably going to grow a little faster than California next year,” Eyler said.

Eyler was among the speakers at the Impact Solano forum produced by the North Bay Business Journal and Solano Economic Development Corp. The morning event took place at the Hilton Garden Inn inside a packed conference room.

Eyler added some caveats for California’s economy. The state is getting less and less business friendly. Technology in Silicon Valley is driving much of the economy, but it’s unknown how much longer this can be the case. The state has tax code issues, he said.

The forum also announced the results of a survey of 100 local businesses.

Forty-three percent of respondents said the business climate will be better in a half-year, 50 percent said it will remain the same and the remainder said it will be worse. Almost 65 percent said the local business climate is friendly.

Travis Credit Union President Patsy Van Ouwerkerk said the credit union is starting to see more requests for business loans. The business market is picking up, though there remains a sense of caution, she said.

Solano Economic Development Corp. Chief Executive Officer Sandy Person said that, even though it’s hard for her not to be enthusiastic, given her personality, the past five years have been lousy.

But she has reasons for enthusiasm these days. She pointed out that the Fairfield industrial vacancy rate has fallen to 5.1 percent, about half of the number a year ago.

Among the projects underway is Buzz Oates of Sacramento building two warehouses on Cordelia Road in Fairfield. Encore Glass is moving its winery supply business into one of the buildings.

“We haven’t seen build to suit or spec in a long time,” Person said. “We’re going to see more than that.”

Roger King, president of the Suisun Valley Vintners and Growers Association, talked about the wine industry. The local wine scene got a boost with the recent announcement that the owners of Caymus Vineyard of Napa Valley will build a winery on Cordelia Road that could produce 5 million gallons of wine annually.

Caymus will be doing such things in Suisun Valley as packaging juice from its Monterey County vineyards and shipping, King said. He pointed out that the local wine economy extends beyond local vineyards to such enterprises as wine bottle capsule manufacturing.

Genentech recently announced it will add 200 jobs to the 400 jobs already at its Vacaville plant. Jon Reed, vice president and general manager of the local plant, gave a presentation.

Genentech owns 97 acres in Vacaville and 65 acres are developed. There are 10 buildings with 956,000 square feet of space, he said. The plant operates 24 hours a day manufacturing such pharmaceuticals as Herceptin for breast cancer and Rituxan for rheumatoid arthritis.

The company has two cell culture plants at the Vacaville site. The latest was built in 2007 and decommissioned in 2010 because of too much supply. The announcement in October that this second cell culture manufacturing plant is reopening led to the 200 hires.

Rituxan will be the first product to be produced there, Reed said.

Person asked Reed if Genentech is having trouble finding 200 people to hire. Reed said no, that Genentech as received “tons” of resumes and is conducting about 150 interviews a week.

Reach Barry Eberling at 427-6929 or beberling@dailyrepublic.net. Follow him on Twitter at www.twitter.com/beberlingdr.

Tuesday, October 15, 2013

Genentech expansion to add 200 jobs


Genentech expansion to add 200 jobs

By Melissa Murphy/ MMurphy@TheReporter.com
Posted: 10/15/2013 01:01:24 AM PDT

Biotechnology giant Genentech Inc. announced it will invest $153 million in its Vacaville location as part of expanding its manufacturing facility.

A press release issued by Genentech on Monday said that the expansion will involve a re-open and upgrade of the facility, and will create approximately 200 jobs, including more than 100 skilled technicians, scientists, engineers and quality professionals by the end of 2014. Hiring will start in late 2013.

With the expansion, Vacaville will be the largest producer of biologic substances for Genentech and Roche and the biggest biotech facility in the world, according to the company.

It's great news for Vacaville, said City Manager Laura Kuhn.

"It's fabulous," she said. "It's one of our larger employers with high-wage jobs. It's better for our community."

She said there will be some permits needed for the upgrade, but that the company is using an existing part of the building that sits at the corner of Vaca Valley Parkway and Interstate 505.

Kuhn said Solano Community College is looking to expand classes for the biotech industry at its Vacaville location, which is right across the street from Genentech.

"It's exciting," she said. "The city is thrilled. We've built a great bond with Genentech and we work well together."

Solano Economic Development Corp. President Sandy Person said the news is also great for Solano County.

"It's a very cool thing and great news for Vacaville and Solano County," she said. "It's a real boon for Solano County's biotech cluster."

She added that, coming out of a recession, there is momentum in the housing and business industries.

"We are well poised to reap the benefits of new activities and investments," she said.

Genentech also is expanding in Southern California.

Genentech, a member of the Roche Group, will invest another $132 million at its manufacturing facility in Oceanside.

The company currently employs approximately 10,000 people in the state. The expansions will add 250 jobs at the facilities during the next four years, bringing the total number of Genentech manufacturing jobs in California to close to 3,000, according to the press release.

"California has always had an impressive skilled workforce that has allowed Genentech to hire diverse and talented individuals in various disciplines," Ian Clark, chief executive officer of Genentech, said in the press release. "In recent years, California has made great strides toward improving the business environment for life sciences innovation and incentivizing manufacturing. We are committed to working with the state to continue this positive progress and make California an even better place to grow the industry."

Genentech's U.S. manufacturing network spans three locations in California -- South San Francisco, Vacaville and Oceanside -- and Hillsboro, Ore., producing medicines intended for the treatment of a wide range of diseases, including cancer, rheumatoid arthritis and asthma.

Follow Staff Writer Melissa Murphy at Twitter.com/ReporterMMurphy.

Genentech launches major Vacaville expansion


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.

Monday, October 7, 2013

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.

Monday, September 30, 2013

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.