In the past, at places like overpriced coffee palaces and chic cocktail parties in Marin, you could pretty much count on some of the small chat that would be exchanged. There would be a race between conversationalists as to who’d be first to casually drop that their offspring were in the 175th percentile for emotional intelligence, or that they’d been accepted to a very exclusive drug rehab center. A thorough discussion of investment portfolios might follow, or a bit of gloating over the atmospheric levels of house values. And, at some point, somebody might make the observation that it’s most fortunate that Marin County is recession-proof.
This particular observation was so widely accepted that it began to make inroads into the realm of conventional wisdom. The only problem is Marin is now ankle deep in a recession that would turn Dale Carnegie into a Zoloft junkie. But before we declare the sky is somehow descending, let’s take a look at the side of the ledger with the black ink.
The good
Larkspur Landing, the small shopping center located adjacent to the Golden Gate Bridge District’s ferry landing, was sold by real estate investment trust Inland Western Retail Real Estate to J.S. Rosenfield & Co. for $65 million. The good news about this transaction is the price, which indicates Marin retail is maintaining value. Moreover, Rosenfield is serious about improving the center, hiring Wilson Meany Sullivan to make the place over. It’s the same firm that successfully breathed new life into the San Francisco Ferry Building.
Fireman’s Fund and Accuchex Corp., both of Novato, are adding to products and services at a time when most businesses are hunkering down into survival mode. Fireman’s Fund has introduced two specialty products. Retailers can purchase coverage protecting them from fallout related to debt or credit card fraud, while hotels can now purchase coverage for a number of new areas. Accuchex has added insurance brokerage to its payroll management business.
F. Scott Fitzgerald once observed, “There are no second acts in American lives.” You can’t convince Ross resident Eric Greenberg of that particular wisdom. Greenberg has started Beautiful Food, which will introduce as many as 50 different high-end to-go dishes available through select grocers and company-owned stores. Greenberg, who formerly founded two high-tech startups and currently rides herd on Innovation Investments LLC, lined up $15 million in venture capital cash to underwrite his new company. He’ll roll out the new product line at Woodlands Market, which is an investor.
Redwood Trust, the Mill Valley-based real estate investment trust that invests in mortgages and mortgage-backed securities, successfully raised $284 million in a market that’s starved for capital and has most investors on the sidelines. But Redwood Trust sold a new stock offering, mostly to institutional investors, to buy mortgage-backed securities at a discount.
And Alan Pinel Real Estate out of Saratoga staged a raid on Pacific Union, persuading as many as 60 agents to jump ship. Pinel has plans to open five new offices in Marin and will be led by Steve Dikason, the former manager for Pacific Union. Dikason and Pacific Union parted company over how expenses at the firm would be cut.
The bad
Foreclosures in Marin tripled in 2008. According to the good folks at MDA DataQuick in San Diego, just 133 foreclosures took place in 2007. Last year, that number jumped to 440. For the last quarter of the year, 87 foreclosures took place as opposed to 40 during the same period the year before.
Unemployment figures are up in Marin as well, though the figures are lower than elsewhere in the state. The numbers were north of 5 percent in February; while the statewide figure was almost double that. On the other hand, Marin has a larger percentage of self-employed people than other counties in California. And those self-employed consultants aren’t able to file.
Autodesk dumped 135 of its 1,200 Marin employees. The cuts were part of a cost cutting move to shear 10 percent of its workforce on an international basis. The software company forecasted losses of up to $0.12 a share.
The staff at the Marin Independent Journal was told to take an unpaid week’s vacation after staffing cuts last year. The IJ is owned by Denver-based MediaNews in a working agreement with Gannett. The company owns 29 papers across the country and, like other publications, has been bleeding ad revenue.
The parade of retailers who’ve pulled up stakes and locked the doors runs the gamut. Mervyn’s dumped its locale at the Northgate Mall. Circuit City’s exit from the Canal in San Rafael leaves just Best Buy’s two locations as the major electronic retailer in Marin. DeLano’s, a grocer in Tiburon, closed one of its two locations. The market is the fourth retailer in the bayside town to shut down. Then there’s Elephant Pharm, which closed down its Third Street store in the Mission City. San Rafael Chevrolet closed up without so much as a “going out of business” sale. Yardbirds, bought by Home Depot in 2005, will close in March.
School districts in San Rafael and Novato are trying to figure out how to avoid cuts that could cost $11 million between the two districts. The state of California’s budget woes has shut down 75 different projects worth $57 million.
And the ugly
And the hits just keep on coming. The economy is circling the bowl and now we’re in a drought. In Bolinas, they’re already into mandatory water rationing, 150 gallons per household, per day. The Sonoma County Water Agency is talking about cuts ranging from 30 percent to 50 percent. This applies directly to Novato, which gets all its water from the SCWA. The rest of Marin receives 25 percent of its water from the SCWA.
Robert Eyler, director of the Center for Regional Economics at Sonoma State University, authored a report in May 2007 that showed that a water shortage of 30 percent would translate into job losses as high as 33,500 and an economic impact of as much as $4.36 billion to the North Bay.
Not exactly what the doctor ordered.
