Santa Barbara Happenings - November 2020
World Health Organization Puts a Stop to the “Lockdowns are Needed” Narrative
After months of debate over whether or not lockdowns are necessary to protect public health and safety during the spread of COVID-19, the World Health Organization (WHO) recently urged leaders against reliance on lockdowns.
WHO representative Dr. Nabarro came out against the lockdowns due to the global economic harm that consequentially follows. The poorest regions are losing significant sources of income due to the lack of tourism and loss of jobs. Thousands of low wage workers with jobs deemed “non-essential” have been laid off.
According to the WHO, it is not sustainable to use lockdowns as a primary method of control over the Coronavirus. Attention needs to be shifted away from closures and towards organizing resources to keep the economy open and implementing widespread testing. We cannot keep shutting down our lives with repeated lockdowns, as it is detrimental to the health and growth of both society and the economy.
Santa Barbara Planning Commission Rejects Extended Lease for Paseo Nuevo Shopping Center
Prior to COVID-19, Paseo Nuevo owners approached Santa Barbara City Hall with a development agreement that would extend the mall’s lease by 28 years. The development agreement was intended to provide Paseo Nuevo Owners LLC long term lease security while providing the City with more financial investment.
The current lease expires in 2065, and the proposed agreement would have extended the lease to 2093. If approved, Paseo Nuevo owners said they would have invested $20 million on upgrades, agreed to new conditions regarding parks and trash collection, and agreed to make a one-time payment of $200,000 to an unspecified homeless program. The proposed agreement did not include specific plans for the Ortega Building, which was previously occupied by Macy’s and Nordstrom.
With all the changes affecting Downtown, the Planning Commission was hesitant to agree to 28 more years and ultimately rejected the proposed development agreement, citing that the terms should be better for the City and that some plans were in opposition with Santa Barbara’s historic character.
As of this writing, the agreement has been appealed back to the City Council who will make the final decision.
Goleta City Council Votes to Maintain Eviction Protections
After the statewide Tenant Relief Act (AB 3088) went into effect, Goleta City Council voted to keep its existing temporary moratorium on evictions rather than defaulting to state law. All other cities in Santa Barbara County (aside from Santa Maria) have set end dates for their ordinances and will be defaulting to the statewide Tenant Relief Act framework.
Goleta’s existing moratorium on evictions, passed on March 17, 2020, prohibits residential and commercial evictions for tenants who have suffered a COVID-19 related financial loss. Residential tenants must notify their landlord of their inability to pay rent within 7 days after rent is due, and commercial tenants must notify their landlord within 30 days after rent is due. The moratorium is in effect until the local emergency is terminated.
After deciding to keep the existing ordinance in effect, City Council directed staff to amend their ordinance so that it is in compliance with state law. The City must incorporate the statewide repayment start date of March 1, 2021 and end date of March 1, 2022 indicating when all deferred rent must be repaid. Though allowed, Goleta’s ordinance discourages property owners from filing a small claims action against a tenant for nonpayment of rent until after the repayment period ends on March 1, 2022.
Councilmembers were divided on whether or not to require tenants to pay 25% of their rent every month, as is required in the Tenant Relief Act. At the time of this writing, an amended ordinance with the specified repayment terms is expected but has not yet been released.
Mission Produce (Think Avocados) Goes Public and Hopes to Spark Action in Others on Central Coast
Oxnard-based Mission Produce climbs to the region’s third largest public company in the fresh produce industry after generating $75 million from its recent initial public stock offering (IPO).
Mission Produce is a leading grower and distributor of Hass avocados. Net income for Mission Produce dropped in the first 9 months of the current fiscal year from $70 million annually in prior years to $10 million. Factors contributing to this decrease in net income include a smaller crop, a California avocado shortage, and a change in consumer consumption habits due to COVID-19.
On October 1, 2020, Mission Produce sold approximately 8 million shares at $12 each, generating $75 million in new capital. Shares peaked on the first day of trading at $15.00 then closed on October 6 at $12.10. Proceeds from the IPO will be targeted towards expansion, such as establishing a new office at the Oxnard headquarters and targeting the markets in Asia and Europe.
Globally, the avocado market is expected to grow at a compound annual growth rate of 5.9% from 2018 to 2026. New practices like vertical farming, hydroponics, and the farm-to-table movement could spark further interest from agricultural investors and lead to more public offerings for Santa Barbara companies that would be beneficial for companies, consumers, and investors.
Santa Barbara School Board Delays Reopening Until January 2021
While a number of local private schools are conducting in-person classes on their campuses, the Santa Barbara Unified School District administration recently proposed a hybrid model for public schools to begin only part time in-person learning.
The proposed model was based on the state’s colored tiers indicating the spread of the coronavirus. As of the date this writing, Santa Barbara County is in the red tier. The initial proposal included a shift to in-person learning, with a hybrid model for elementary campuses, on November 9, 2020 when the County is expected to be in the orange (less restrictive) tier. For middle school and high school campuses, in-person instruction was proposed to begin January 19, 2021 when the County is projected to be in either the orange or the even less restrictive gold tier.
The Santa Barbara School District Board of Education unanimously voted against this model and ultimately decided to wait until January 19, 2021 for schools to reopen for in-person learning.
Smaller Businesses Show Resilience but Monopolies Grow and Threaten
Earlier this year, the CEO of Sonos, a Santa Barbara audio product start up, testified before Congress as the House examined how to handle tech giants. Apple, for example, has a $2 trillion market cap and greater capital reserves than many central banks. Smaller local companies like Sonos (with a market cap of approximately $1.6 billion) are increasingly threatened by the Apples, Amazons, and Googles of the world.
In early October, a Congressional panel ruled that market dominance by the large companies in areas of technology, including hardware, software, and advertising was stifling competition. On October 7, Apple removed products from smaller companies such as Sonos and Bose from its online retail offerings. Sonos shares dropped 5%. Time for legislative action against the monopoly powers of the big tech companies. Competition is good, but requires a level playing field for all competitors.
Santa Barbara City Council Approves State Street Improvements
The Santa Barbara City Council voted unanimously to spend $250,000 on improving the new State Street Promenade.
Key improvements include additional lighting to increase safety at night and a large bike path running through the middle of the street. Walkers will be directed to the edges of streets and sidewalks.
The project will be funded with Measure C funds that would have previously gone towards general street maintenance. Big round of applause to State Street for showing us how creative solutions can help businesses when bureaucracy takes a back seat.
Goleta-Based Raytheon Brings Jobs to Goleta and the South Coast
Goleta-based Raytheon Intelligence and Space began hiring and will eventually fill over 100 new positions. Raytheon already employs approximately 1,400 people and specializes in software solutions, advanced sensors, and training. As of this writing, 60 positions still remain open.
Raytheon attributes its success in Goleta from its strong industrial base, strong STEM schools, and strong sense of community. Of the 1,400 current employees, many have been there for over 20 years. Keep Raytheon on your radar as they continue to grow.