November 19, 2020
November 12 – Weekly Update
San Diegans cried purple tears when it was announced we will be moved into the purple tier, effective Saturday. This county-wide equivalent of pulling cards based on your COVID behavior is reflective of the County’s poor numbers with regard to COVID positivity rates and will require businesses to scale back operations and in some cases, temporarily close. Additionally, local enforcement efforts will be stepped up to increase citations for violations and provide masks to those not wearing them in public.
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If you’re interested in being a Senator, your window of opportunity is open (and crowded)! The race to replace Senator Kamala Harris is on, with all eyes on Newsom as it’s his, probably unlucky at the moment, job to appoint the replacement. California’s long list of political leaders are making their cases, and their different stakeholder groups are actively engaged too. Major advocacy groups, including large influential PACs all have their preferred candidate, and there’s even a push for a special election (please don’t make us do this again). The appointee would fill the remaining two years of the seat and then be up for re-election, albeit with the very strong competitive edge of being an incumbent.
If you’re missing interacting with legislators and legislative staff, don’t miss our Legislative Lounge on Thursday, November 19. Jerry will tell jokes, people will get awards, and we’ll all drink to a year that is thankfully almost over.
Business News:
Qualcomm has already made significant gains in the fourth quarter. Business had a 35% increase in revenue compared to last year’s third quarter. The leader in 5G smartphone processors benefitted from new 5G smartphone technology hitting markets this fall and increased demand for work from home technology.
Sempra and Salk Institute announced a new program to tackle climate change as part of their Harnessing Plants Initiative. The five year program will develop six crop species to provide food and fuel, while also absorbing an estimated 1.5 to 6 gigatons of carbon per year if the program goes as planned. Sempra Energy donated $2 million towards the program to help advance the use of low carbon energy sources.
On Monday, Pfizer and Biontech announced their vaccine candidate was 90% effective. Pfizer needs to collect two more months of data to ensure the vaccine is effective and safe before it can apply for emergency FDA authorization. If everything goes well, Pfizer estimates they can provide enough doses for about 15 to 20 million people to get vaccinated by the end of the year. The successful results give some hope for the 10 other vaccine candidates racing for approval. There’s still questions remaining if the vaccine is safe for older adults and children and how it can be distributed effectively. For now, let’s keep our masks on.
San Diego International Airport and the region’s tourism economy is on its way to a speedy recovery. A study conducted by FinanceBuzz found that the San Diego International Airport’s (SAN) departing passenger count increased by over 450% from April (36,877) to June (209,490). SAN’s recovery exceeded both LAX and SFO airports.
Legislative Update:
Federal:
President-elect Joe Biden has already created a COVID task force and is preparing a string of executive orders, including action on climate change, preserving DACA, and reversing the travel ban. However, Trump has not yet accepted the election results, and the General Services Administration has refused to allow Biden’s transition team access to space and resources to begin working.
In a similar vein, Biden has tapped Robert Klain to be his Chief of Staff. Some may remember him as the 2014 “Ebola Czar”.
On Tuesday, oral arguments began for Texas v California, or the case challenging the Affordable Care Act. This is the third time ACA has been challenged in the Supreme Court, this time for the provision of the law mandating insurance. Five of the justices showed support for upholding the law, however, the final ruling isn’t expected until June.
Secretary of Defense Mark Esper was fired Monday morning in a tweet by President Trump. Christopher Miller, Director of the National Counterterrorism Center was confirmed as the acting Secretary of Defense.
The Senate is back in session to continue coronavirus relief package negotiations, hopefully reaching an agreement before inauguration day. This time, Mitch McConnell is taking the lead for the GOP to resume talks with Nancy Pelosi. With rising COVID cases and a potential government shutdown on December 11, the pressure is on to get a bill passed.
A federal judge ruled for the Small Business Administration to release detailed information on all PPP loans, including those under $150,000, by November 19. The disclosure was initially only required for loans over $150,000, but the judge ruled that SBA could not create exemptions to a Freedom of Information Act based on loan amount. The additional oversight is intended to prevent fraud in future rounds of the program.
International:
Last month, Tijuana Mayor Arturo Gonzalez took a leave from office to campaign for Governor. However, just last week he unexpectedly resumed his position as Mayor and announced his plans to remain in office until his political party selects their candidates for next year’s state and local offices.
Baja Governor Jaime Bonilla is yet to officially endorse a candidate to succeed him but has publicly opposed Mayor Gonzalez’ political aspirations. Governor Bonilla and Mayor Gonzalez are both part of the National Regeneration Movement (MORENA), the same political party of President Andres Manuel Lopez Obrador.
The growing tension between municipal and state authorities has increased uncertainty for the private sector. The Chamber has fostered strong relationships at the state and local level and continues to work closely with both to advance regional priorities.
Register here for the Chamber’s International Tribute Awards taking place virtually on Tuesday, December 1. U.S. Ambassador to Mexico, Christopher Landau will be joining us to share his thoughts on the future of the U.S.-Mexico relationship. We will also recognize outstanding individuals and businesses that have made a significant impact in the international efforts bridging U.S. and Mexican economies every year. 2020 award recipients are:
- Toyota, International Business of the Year
- Luis M. Hernandez, President of INDEX Zona Costa, Cross-Border Leader of the Year
- Cross-Border Xpress (CBX), Cross-Border Hero
State:
Proposition 19 passed by a narrow margin. This will give some property tax breaks to seniors and victims of natural disasters by allowing them to either keep or blend their current tax assessment if they move, depending on the value of the new home. The measure will also eliminate property tax transfers on inherited property unless it’s used as a primary residence. This means that children that use their parents’ or grandparents’ home as a vacation or rental home will have their property taxes reassessed at market value. The Legislative Analyst’s Office estimates initial revenue gains of tens of millions of dollars each year for local governments and schools.
Proposition 15 failed with 51.8% opposed and 48.2% in support. The measure would have allowed commercial property to be taxed at current market value and generated between $8 and $12.5 billion in property tax revenue.
Local:
Monday morning, Barbara Bry conceded the mayoral race to Chamber-endorsed Todd Gloria. Todd Gloria will be sworn in on December 10, making him the first openly gay mayor of color in San Diego. Congratulations, Todd!
Tuesday, City Council agreed to enter into an exclusive negotiating agreement with the Padres Development team. The Chamber team was also present to speak in support of the proposal.
During a special meeting on Monday, the City Council weighed in on Mayor Faulconer’s flagship Complete Communities program. Complete Communities, originally unveiled in the Mayor’s State of the City address in 2019, is composed of three programs: Housing Solutions, Mobility Choices, and Play Everywhere. Housing Solutions is an opt-in program that would give developers additional incentives (density bonus, increased FAR, fee reductions) for building 40% or more affordable units. Mobility Choices converts the City’s metric for analyzing transportation impacts from LOS (level of service) to VMT (vehicle miles traveled) in order to comply with state laws. It is a mandatory program requiring developers to build VMT reducing infrastructure (bike lanes, sidewalks, bus stops) or pay an in-lieu fee.
Finally, the Play Everywhere component is comprised of the City’s updated Parks Master Plan. The masterplan creates an interconnected city-wide park system, focusing on new equity goals and improving existing city parks while seeking opportunities to purchase new land for parks. Both the Housing Solutions and Mobility Choices programs were passed by the Council, while the Parks Master Plan was sent back to city staff for additional revisions.
The County Board of Supervisors will meet next week on Tuesday, November 17 (agenda here) and Wednesday, November 18 (agenda here). On Tuesday, the board will receive an update on the county’s COVID-19 response and ratify any related actions. In-person attendance is still prohibited. Information on how to participate in the teleconference, view online, or submit comments can be found here.
Capital Opportunities & Resources:
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- City of San Diego Temporary Outdoor Business Operations Permit – Businesses (restaurants, retail stores, gyms, hair salons, nail salons) can now expand into the public right-of-way, parking lots, and public spaces. Information on how to apply for a Temporary Outdoor Business Operations Permit can be found here.
- Businesses can reach out to their nearest Small Business Development Center (SBDC), which has developed the Small Business Survival Resources Guide to help business owners navigate through the chaos COVID-19 is having on our communities. SBDC can help with applying for relief, guiding you through available resources, and assisting with cash flow concerns, supply-chain interruptions, workforce capacity, insurance coverage, and more–all at no cost.
- The State Treasurer’s Office has published this list of Federal, State, Local, Private, and Non-profit resources available to small businesses.