South County Economy Has Many Moving Parts - NBC 7 San Diego
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South County Economy Has Many Moving Parts

Logistics, aerospace, and health care are part of the dynamic and diverse south San Diego County region

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    NEWSLETTERS

    South County Economy Has Many Moving Parts
    U.S. Navy
    The USS Mobile Bay returns to Naval station San Diego May 29th. Photo courtesy of U.S. Navy.

    Otay Mesa, the busiest land port in the western hemisphere, is a magnet to business with its thriving warehouse and logistics environment.

    That seems to be what’s beckoning Atlanta-based Seefried Industrial Properties to build a mammoth, 2.6 million square foot warehouse at the corner of Otay Mesa Road and Enrico Fermi Drive.

    The Business Journal reported in May that Amazon.com Inc. is the company that will use the space. At least, that’s the story circulating among South County businesspeople. Amazon.com has not made an announcement about moving into South Bay. Asked about its plans there, a company spokeswoman said the business did not comment on speculation.

    If it is the case, it’s not clear how many people the new business will employ. Amazon’s operations are very automated.

    Government Workers Abound

    A good deal of freight moves through the Otay Mesa community at large, with much exchanged between the United States and Mexico. Nearby are warehouses and logistics companies, including a large cold storage facility that has expanded into two buildings. Major frozen food packagers are close by.

    Moving, storing and manufacturing seem to be what businesses in South County do, and those entities need employees.

    But government and health care organizations seem to be the entities that employ the most people.

    The top employer in South Bay is the U.S. Navy, whose 32nd Street base takes up the National City waterfront. It is the workplace for 24,807 Navy personnel, 72 Marines and 5,834 civilians, according to government figures compiled by the San Diego Military Advisory Council, a nonprofit group that brings military and civilian leaders together.

    The border region also has a large contingent of federal workers, including those affiliated with Customs and Border Protection, Immigration and Customs Enforcement, the Drug Enforcement Administration and the General Services Administration.

    Two hospitals — Scripps Mercy Hospital Chula Vista and Paradise Valley Hospital in National City — provide health care with about 1,100 employees each. The San Ysidro Health organization runs a network of clinics spreading through and beyond the South County, employing 1,500.

    A Demand for Space

    Power Sonic, a battery importer, might be a typical business on Otay Mesa: it has a lot of space but relatively few people. A visit in 2018 showed a cavernous warehouse. Its local employee base was 100.

    Vacancy in Otay Mesa is about 5%, said Alejandra Mier y Teran, executive director of the Otay Mesa Chamber of Commerce.

    “We’re definitely seeing very healthy economic activity” on Otay Mesa today, she said, citing demand for room.

    The vacancy rate for industrial space in the wider South County area is 4.2%, according to a second quarter market report from broker Cushman & Wakefield. The report estimates South County’s industrial space inventory at 30.9 million square feet, spread among 627 buildings.

    San Diego County’s largest lease for the quarter was in Otay Mesa. According to Cushman & Wakefield, Murphy Development Co. leased 74,500 square feet on Sanyo Avenue to help kSaria expand its current space. The lessee, with its home base in Massachusetts, makes fiber optic cable assemblies and other connectors for defense contractors.

    Seefried Industrial Properties — the company at the core of the Amazon talk — is building a four-story, 2.6 million square foot building on 65 acres. Observers interviewed by the Business Journal in May see a ripple effect from a warehouse as large as 2.6 million square feet. Other businesses may follow Seefried to develop more on Otay Mesa, they said.

    Food processing on Otay Mesa includes companies such as Ajinomoto Foods — which bought Circle Foods’ old business and, as of 2018, had more than 300 employees. Kraft Heinz operates the frozen food business formerly run by Delimex.

    Waterfront Logistics, Airborne Business

    On San Diego Bay, commercial ships tie up at the National City Marine Terminal to discharge auto imports, which leave by rail and truck. Pasha Automotive Services has a business adding parts to cars flowing through the terminal. It employs an estimated 400 people. The terminal also exports autos.

    Another anticipated project in the South Bay is the $1.1 billion, 1,600-room waterfront hotel and convention center in Chula Vista, which could be a significant employer. The project recently received its coastal development permit. Financing is expected to be the next step. The Port of San Diego and the City of Chula Vista are developing the project with RIDA Development of Houston.

    Aerospace has a long history on the Chula Vista waterfront. Collins Aerospace continues the aircraft parts business that Fred Rohr began in 1940. While manufacturing seems to be winding down at the Chula Vista plant, the space remains an engineering and business center for the operation. Nacelles, the aerodynamic housing that covers jet engines, is the business’ specialty. Collins declined to say how many workers it employs.

    Retail auto dealers and related businesses are another important part of the South County economy. The National City Mile of Cars Association Inc. represents nine dealers selling 20 brands.

    Trains, trucks, planes and automobiles. If it moves, it seems to create jobs in South County.

     Additional stories from the San Diego Business Journal are available here. Sign up for their free daily email newsletter.

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