Business made a bang in 2004

By Marla J. Pugh
FAIRFIELD - Solano County business and community leaders saw big deals made here this year, and the groundwork being laid for an even more profitable 2005.

From Genentech's plans to expand in Vacaville, Wal-Mart's interest in putting at least one more store in Fairfield and a new mall developer's interest in Vallejo, business made a bang all over the county in 2004.

But it will be 2005 when all the fruits of those plans make the most impact on the local economy. And for local business leaders, they can hardly wait.

"I feel really positive about 2005," said Steve Epps, owner of Virgil's Bait Shop in Suisun City and a member of the Fairfield-Suisun Chamber. "The polls are showing that confidence is up, and I think we have a governor that is pro-business. There seems to be a lot to look forward to."

While other areas in California rode an economic roller coaster in 2004, Solano County remained stable because of it's Ace in the Hole - Travis Air Force Base.



"There wasn't any event in 2004 that drastically changed our business climate here, primarily because of Travis," said Mac McManigal, chairman of the Fairfield-Suisun Chamber of Commerce Board of Directors and executive director of ORBA Financial Management in Fairfield.

Base closure decisions next year may provide more opportunities for Travis, added Sean Quinn, director of Fairfield's Department of Planning and Development.

"An opportunity may exist to attract additional missions to Travis, which will help local businesses," he said.

Politics took a turn for the better for business in 2004.

Many business leaders agree Arnold Schwarzenegger's leap from actor to governor helped their bottom line.

"Our new governor has a more pro-business stance. . . . His veto of all the job-killing legislation really helped, as did what we have seen so far in workers compensation reform," Vacaville Chamber of Commerce President Gary Tatum said.

Denton Connor, chairman of the Vacaville Chamber board and co-owner of Cavanagh, Connor and Co., a CPA firm, added that in Vacaville, there were also pro business city council officials elected in 2004, helping the local business climate.

In Fairfield, communication between the business community and city leaders improved, some said.

"Business and the city have not gotten along that well in the past, and it seems like we are getting along better," McManigal said.

In 2005, the Fairfield mayor, two city council seats and a county supervisor will be up for reelection, and McManigal said who wins those races will be one of the biggest deciding factors in how business is shaped locally, especially on the issues of transportation and crime - the top two concerns voiced by Fairfield-Suisun Chamber members in a recent survey.

This year also marked big plans and improvements for the downtowns in almost all Solano County's cities.

In Fairfield, the new government center has already sparked activity in the downtown core, where big names such as Quiznos and Starbucks - once thought impossible to get here - have decided to open stores.

"Getting big businesses like that here makes more people want to come downtown," said Kerry Vafeas, co-owner of Amore's restaurant located downtown, and a member of the Fairfield Downtown Association Board of Directors. "I'm hoping as more people come downtown to check those places out, the more people will learn about our business, too."

In Vacaville, a new town plaza and library, which are almost complete, are also sparking renewed growth.

In Suisun City, plans moved forward to redevelop the area west of Main Street and to add a lighthouse to the waterfront.

And in Vallejo, the remodel of a historic downtown theater and plans for private developers to revamp the downtown core also progressed.

There was also a big push in 2004 to get people outside of Solano County to take another look at spending money here.

The Solano Economic Development Corp., known primarily as Sedcorp, changed its name to the Solano EDC and came up with a marketing plan to attract more businesses, led by the slogan "Solano's Got It!"

Fairfield's new Tourism Promotion Agency also got approval from the city to form a new business improvement district to raise money for tourism efforts, including a California Welcome Center. And Vacaville started its own Convention and Visitor's Bureau.

In Suisun City, the Suisun City Business Group and the year-old Suisun Business Improvement District joined forces to have a stronger political voice as well as to market the area better.

"The camaraderie between the businesses was great this year," said Shelly Kontogiannis, president of the Suisun BID and co-owner of the Athenian Grill in Old Town Suisun. "There was a lot of synergy, a lot of people working together to bring more business to the whole downtown, not just to one business. I felt like we really worked together to brand Suisun as a place to come shop and play."

As a result, Kontogiannis said, business as a whole increased this year, she said.

"I'm optimistic," she said. "Now that business has increased in 2004, I think a lot of people are hoping it will do even better in 2005."

Reach Marla Pugh at mpugh@dailyrepublic.net or 427-6934.
Copyright Daily Republic. All rights reserved.

Large Scale Biology Corporation Awarded Biowarfare Defense Research Program

VACAVILLE, CA -- (MARKET WIRE) -- 12/27/2004 -- Large Scale Biology Corporation (NASDAQ: LSBC) today announced receipt of Federal funds to expand the Company's participation in national biowarfare defense initiatives. The $1 million award will be used to develop more effective candidate products for prevention and treatment of biowarfare-related illnesses.

On August 5 of this year, President George W. Bush signed legislation into law that funds key Department of Defense (DoD) initiatives. Included in this package was a $1 million earmark for Large Scale Biology Corporation to employ its proprietary GRAMMR™ (Genetic ReAssortment by MisMatch Resolution) DNA shuffling and molecular evolution technology to help develop more effective candidate biopharmaceuticals for protecting military personnel and civilians in biowarfare situations.

This new appropriation is in addition to the $1 million in current funds that the Department of Defense has invested in LSBC to support the development of enhanced biowarfare therapies in collaboration with the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) in Fort Detrick, Maryland. "Our ability to obtain this type of funding in a budget year with such tight fiscal constraints is evidence of the solid support the DoD has placed in one of LSBC's core technology platforms," said Ronald J. Artale, LSBC's Chief Operating Officer. "A great deal of credit must be given to Congressman George Miller of the 7th Congressional District, whose steadfast support and successful sponsorship of this appropriation will enable us to make important contributions to our national defense needs," Mr. Artale added.

LSBC is contributing two of its core technologies to this program, including the Company's GRAMMR™ directed evolution technology and its plant-based biomanufacturing system, which can be used together to rapidly optimize and produce therapeutic proteins and vaccines. LSBC has assembled an experienced team of scientists and business professionals to advance the boundaries of science by employing these proprietary systems for the improvement of global health.

"The combination of our proprietary molecular evolution technologies, our established plant-based biomanufacturing facilities and our clinical experience enables us to carry out research programs that are beyond the reach of most biotechnology companies our size," Mr. Artale concluded.

"Large Scale Biology is making an important contribution toward protecting America's armed forces in the battlefield, and I am pleased to be able to help them in this endeavor," said Congressman Miller. "Biological warfare is an unfortunate but real threat and we must be prepared for it," Miller added.

About LSBC

Large Scale Biology Corporation is a biotechnology company developing and biomanufacturing biotherapeutics, vaccines and industrial proteins for important life science industry markets. Corporate headquarters, molecular biology and product design laboratories are located in Vacaville, California, and the Company's bioprocess development and commercial-scale biomanufacturing facilities are located in Owensboro, Kentucky. In addition to its class-leading internal capabilities, LSBC relies on a network of industry, government and academic collaborators throughout the US and Europe to achieve rapid, commercially relevant product discovery, optimization and manufacturing. For more information about Large Scale Biology Corporation, visit the Company's website at www.lsbc.com.

This release contains forward-looking statements about applications of LSBC's technologies and potential markets for our products. These forward-looking statements involve risks, uncertainties and situations that may cause our actual results to differ materially from those implied by these statements, including our ability to commercialize one of our products, the ability of our collaborators to sell products we make for them, the effectiveness of our and our collaborators' technologies to produce specific products and/or in a cost-effective manner, any difficulties or delays in obtaining regulatory approval to test and market such products, and the requirement of substantial funding for us to preserve our technology base and product pipeline. We cannot guarantee future results. You should not place undue reliance on these forward- looking statements, which apply only as of the date of this release. For a further list and description of such risks and uncertainties see the reports filed by Large Scale Biology Corporation with the Securities and Exchange Commission, including our reports on Forms 10-K and 10-Q. Except as required by law, we do not undertake to update or revise any forward- looking statement, whether as a result of new information, future events or otherwise.

LSBC™, our logo, GENEWARE® and GRAMMR™ are trademarks of Large Scale Biology Corporation.

--------------------------------------------------------------------------------


Contact:
Large Scale Biology Corporation
Ronald J. Artale
Chief Operating Officer and Chief Financial Officer
(707) 446-5501


SOURCE: Large Scale Biology

A busy year of business

From expansion projects to a red-hot real estate market, Solano sizzled in 2004
By Barbara Smith/Business Writer

A red-hot real estate market drove home prices to historical highs in 2004. Skyrocketing gasoline prices left consumers feeling burned. And cement - a staple of the building industry - became known as "gray gold."

Yet throughout the year, homebuyers kept buying, motorists kept filling their tanks and builders kept building. Whether it was simply faith in a cheerleading governor or a stabilizing economy, business bustled in Solano County, with plans mapped out for a golden future in 2005.

Here are the top 10 local business stories for 2004 as voted on by editors of The Reporter:

1. Genentech Expansion
In April, coincidentally on its 10th anniversary, biotech giant Genentech announced plans to nearly double its manufacturing plant and local work force on a 97-acre site at Interstate 505 and Vaca Valley Parkway. The $577 million project, dubbed Cell Culture Production 2, is presently under construction. Described by Genentech officials as a "showcase ... one of the most highly automated facilities in the world," it will upon completion include three buildings and add 380,000 square feet to the existing facility. It will add roughly 575 employees to its 600 member-work force.

The star of the groundbreaking show was Gov. Arnold Schwarzenegger, who said, "We're tearing down the walls and the obstacles of doing business here, and getting California back on track."

"Horizons 2010" is the time frame the biotech giant hopes to reach in its ambitious goal to become the world's leader in biotherapeutics by the development and production of five new oncology products to be placed on the market in 2010 - and by getting five new immunology products into approved development and clinical trials the same year.

2. Kaiser Permanente Expansion
Currently Genentech's next-door neighbor, Kaiser Permanente announced plans earlier this month to construct a $300 million, 166-bed state-of-the-art hospital adjacent to its existing medical office on Vaca Valley Parkway.

The 340,000-square-foot facility will boast an emergency room; eight labor and delivery rooms; and radiology, surgical and intensive care services. Pending state and local regulatory approval, the not-for-profit health-care provider estimates groundbreaking for the four-story building in 2005 with a 2009 opening.

Adding to the 168,000-square-foot medical office building already in operation, the new office building will include room for 60 primary care and speciality physicians and an outpatient surgery center of 217,000 square feet. Also part of the project is a 34,000-square-foot central utility plant. When all the new facilities are completed, the entire complex will encompass 750,000 square feet. The hospital will also fill at least 1,500 new jobs.

Kaiser Permanente serves more than 8.4 million members nationwide including 3.2 million in Northern California. In the Napa-Solano area, there are more than 240,000 members.

3. Vacaville Downtown Revamp
After years of planning, the heart of Vacaville's historic downtown is emerging as envisioned with a 15,000-square-foot library, Town Square Plaza and new buildings and businesses on Main Street.

A mix of speciality shops, offices and restaurants will fill two multilevel Italian villa-style buildings flanking the plaza created by the Guido Addiego family. The Pure Grain Bakery is expected to open any day, and new businesses already open include Hot Porridge, a specialty toy store, and the Town Square Candy Co.

Restaurants planned to open include Saltato's Italian restaurant, a 2,000-square-foot full dinner house with a Tuscan Roman theme seating up to 55 and eventually an additional 25 outdoors.

Saltato's will compete with existing establishments like Merchant & Main Grill & Bar, China House, The Old Post Office and Fire Falls restaurant and lounge, which has been considered a cornerstone of the downtown renaissance. Just around the corner on East Main Street will be a new, two-level building that will house

the John Vasquez family deli. Vasquez Deli will move from its McClellan Street locale into the building, which will have apartments on the top floor.

Also, Joe Murdaca, owner of Pietro's No. 1, is working with the city on his Don Carmello's Bistro on the corner of Dobbins and Monte Vista Avenue.

The Town Square Plaza itself is roughly 15,000 square feet, and will include a 39-foot clock tower, trees, water features and a stage.

Meanwhile, the administrative offices of Vacaville Sanitary Service have moved into second-floor offices in the library building.

While rainy weather and other construction-related problems have delayed the opening of many new businesses and the construction of the Town Square Plaza, work is picking up.

The Town Square and plaza are the culmination of about a $5 million project, with the construction of the library costing about $3.5 million. The Vacaville Redevelopment Agency paid roughly $1.5 million for the parking lot and the Town Square Plaza.

4. Hot Real Estate Market
A sizzling real estate seller's market dropped to just a low simmer during the holidays, but the median price of a home in Solano County in November reached an all-time high of $400,000.

That's 80 percent higher than the median price reported in January, and prices are expected to continue to rise, analysts say.

With data clearly showing a trend with no signs of abating, droves of Californians earned their real estate sales licenses in 2004. The California Department of Real Estate reported in midyear there are 389,409 real estate licensees in the state, a number that has steadily climbed since 1999. Also, 1,532 agents were working the Solano County market, according to Bay Area Real Estate Information Services.

In Vacaville, two large brokerages expanded their office space. Kappel & Kappel Realtors Inc. added a sixth branch by opening a Sacramento office to spread out and beef up its 120-plus sales force, while Gateway Realty opened three new offices - one on Mason Street - to house its 105 agents.

5. A.G. Spanos Buys Site
In June, A.G. Spanos Cos., one of the nation's leading builders of apartment communities, purchased a 172-acre swath of land in the Vaca Valley Business Park for commercial development.

While development plans are now just roughly sketched out, the purchase essentially completed the business park by complementing biotechnology giant Genentech and the Kaiser Permanente Medical Offices.

Representatives of Spanos said at the time of the purchase that they hoped to do a mixed-use project, including office, perhaps some additional biotech, and probably some retail.

The 12 parcels in the acreage form a triangle bordered by Interstate 80 and I-505. Spanos bought the land from the partnership of an out-of-the-area real estate brokerage and Morgan Stanley, a global financial services firm. Those firms bought the land from Chevron some 10 to 12 years ago, and it now remains the largest undeveloped piece in the business park.

City officials said the importance of the acquisition is it puts the property in hands of a true development firm, meaning there is likely to be more investment in the property, and the property would be developed faster than it would have by the prior owners.

Spanos said it would spend $8 million to $10 million in infrastructure to complete a road, streetscaping and the rest of the infrastructure to have access to all the parcels.

Alex G. Spanos has built three large apartment communities in Vacaville in the last five years, including the 316-unit North Pointe Apartments on Leisure Town Road, the River Oaks apartments on Elmira Road and The Commons off Nut Tree Road.

6. Nut Tree Redevelopment
The final remnants of the landmark Nut Tree were excavated in 2004 to make room for redevelopment by Larkspur-based Roger Snell of Snell & Co. Snell plans to transform the historic 76-acre site, once home to the famed Nut Tree Restaurant, into high-end retail, hotel-conference, residential, office and family-oriented features.

The Vacaville City Council in September approved the Nut Tree master plan for retail shops, restaurants, office space and housing on the site. Snell has touted the development as a world-class project that will bring back the Nut Tree's reputation as a California landmark.

Snell has said the project will generate about $1.8 million in annual property taxes and $1.5 million in annual sales tax revenue. He has also said the project will create 1,300 jobs.

7. North Village Construction
After some 10 years of planning, construction began on North Village, an 880-acre master planned community in northeast Vacaville.

Located between Vaca Valley Parkway and Midway Road, and bounded on the west by Interstate 505, North Village was annexed into the city more than a decade ago and, when built out, will house an estimated 7,000 and nudge Vacaville's population beyond the 100,000 mark.

North Village, under development by Concord-based Albert D. Seeno Construction Co., is slated to have 2,177 units, including apartments. Seeno was originally given permission to build about 2,500 homes, but plans changed after environmentalists discovered some 50 acres of vernal pools at the site, including the endangered fairy shrimp.

That grounded the project for four years, but in June the U.S. Army Corps of Engineers granted final environmental approval. Seeno had to withdraw some 300 dwellings to set aside acreage for natural habitat.

8. Auto Dealership Sold
Jack Wilson, a founding partner in Vallejo's Wilson Cornelius Ford, confirmed in January that he had sold his interest in the dealership to partner Rod Cornelius. After 44 years in the automobile sales business, Wilson said it was time to pursue other interests.

Cornelius at the time said he was eager to take on the sole ownership.

The business was started by Wilson's father 65 years ago. In September 1940, Claude Wilson established his Ford dealership on downtown Vallejo's Virginia Street. Rod Cornelius' grandfather, Ira, joined the dealership's sales team in 1948.

In 1950, the dealership moved to 1301 Georgia St., and Claude Wilson had a new business partner, Barney Russell. The dealership was known then as Wilson Russell Ford.

Jack Wilson joined his father's business in 1960. Claude's death in 1961 made Jack the new partner.

Glenn Cornelius, who joined the sales team in 1953, became the third business partner in 1965, a relationship that would last 30 years.

By the late '60s, Russell had retired and the dealership was down to two partners - Jack Wilson and Glenn Cornelius. That's when the business became known as Wilson Cornelius Ford.

Rod Cornelius started washing cars at the dealership when he was 14 and was on the sales team by 1974. He became sales manager a few years later and, following his father's retirement in 1995, took over the general management of the dealership and became a partner.

9. Kohl's Opens
The long-anticipated Kohl's department store in Vacaville opened in October, along with 11 other stores in the Bay Area, including Vallejo.

The large-scale Wisconsin-based department store at 570 Orange Drive brought 150 new jobs to Vacaville and 220 to its Vallejo location.

Kohl's debuted in the Golden State in the spring of last year. The new Bay Area stores bring the number of Kohl's in California to 62.

Kohl's is a family-focused, value-oriented specialty department store offering moderately priced national brand apparel, shoes, accessories and home products.

In Vacaville, the Kohl's store is 95,515 square feet, slightly larger than the Kohl's prototype of 88,000 square feet. The store carries well-known national brand names like Levi's, Gloria Vanderbilt, Arrow, Haggar, Dockers, Reebok, Adidas, Nike, OshKosh B'Gosh, Calphalon cookware, Carters, Nine & Co. and Liz Claiborne Villager. It also carries its own private brands, like "Sonoma" and the recently launched "Daisy Fuentes" women's line.

Kohl's public relations officials tout the stores' stand-alone locations, "easy to shop" layouts, centralized checkouts, shopping carts with built-in strollers and plenty of parking.

Based in Menomonee Falls, Kohl's plans to open a total of 190 new stores across the country in 2004 and 2005. The company currently operates 589 stores in 38 states. It earned $591 million on $10.3 billion in revenue last year.

10. NorthBay Healthcare To Grow
In June, NorthBay Healthcare announced plans to develop a third hospital in Green Valley in the next five to 10 years.

The nonprofit operates VacaValley Hospital in Vacaville and NorthBay Medical Center in Fairfield.

The 20-acre Green Valley site, at the northwest corner of Business Center Drive and Mangels Boulevard, would be home to advanced speciality services not currently available in the county, including open-heart surgery.

Other examples of advanced high-tech care that could be considered for the site include orthopedic rehabilitation services and a potential trauma center.

The site also provides room for offices and outpatient facilities.

Early in 2005, construction of a new emergency service at VacaValley Hospital will begin, and plans are under way for the development of a 20-acre site in the Green Valley Corporate Park.

Barbara Smith can be reached at business@thereporter.com.

The year in review
1. Genentech Expansion
2. Kaiser Permanente Expansion
3. Vacaville Downtown Revamp
4. Hot Real Estate Market
5. A.G. Spanos Buys Site
6. Nut Tree Redevelopment
7. North Village Construction
8. Auto Dealership Sold
9. Kohl's Opens
10. NorthBay Healthcare To Grow

Local rancher receives honor

By Barry Eberling

RIO VISTA - This past year was just a little atypical for local rancher Burrows Hamilton.

He usually can be found in the hills west of Rio Vista taking care of sheep and livestock. His grandparents began ranching in the area in the late 1800s.

But, on the evening of Oct. 29, the spotlight shone on him. He received the 2004 Livestock Man of the Year award.

The presentation came during the Grand National Rodeo, Horse and Stock Show at the Cow Palace. This multi-day event featured everything from bullriding to concerts by such artists as the Charles Daniels Band.

The California Chamber of Commerce has presented the Livestock Man of the Year award since 1950. Ranchers choose winners based on their involvement in the industry on the local, state and national levels, according to the American Sheep Industry Association.



But now the hoopla has died down and Hamilton is doing what he always does, year after year.

"We're right in the middle of lambing," Hamilton said. "We lamb from October to the first part of March. You've got to make sure everything is right."

Hamilton, his brother and his son run an operation that includes 4,000 ewes, more than 200 head of cows, dry land grain production, irrigated crops and orchards.

Though eastern Solano County's hills are somewhat remote, they have been the site of some notable chapters in local history. Hamilton can recall some of these.

He remembers the days when electric trains ran through eastern Solano County. Trains with names such as the Comet took people from Sacramento to Oakland from 1913 into the 1940s.

Hamilton rode on the train to Oakland a few times as a child. It crossed the confluence of the Sacramento and San Joaquin rivers on the "Ramon," a box-like, steel-hulled ferry with a 600-horsepower gasoline engine.

Today, the Western Railway Museum runs electric trains over a portion of the historic rail route. And the Hamiltons are still raising livestock in the nearby hills.

"I'm kind of semi-retired," Hamilton said. "I'm not really pushing as hard as I used to."

But he's doing enough to be the 2004 Livestock Man of the Year.

Reach Barry Eberling at 425-4646 Ext. 232 or beberling@dailyrepublic.net.

Report: Solano jobs outlook is bright

Association of Bay Area Governments also says the county will be the fastest growing in the region.

By Patricia Valenzuela/Staff Writer

Solano County will be a hotbed for jobs during the next five years and its population growth rate will surpass other Bay Area counties for the next 25, according to a recent report by the Association of Bay Area Governments.

ABAG released its growth projections Tuesday, declaring Solano will be the fastest growing county in the nine-county Bay Area region.

The report, "Projections 2005," forecasts job growth and population growth in the nine Bay Area counties through 2030.

The report predicted a growth rate of 47 percent for Solano County.

Solano's population was 394,500 in the 2000 Census. That figure is expected to increase to 581,800 in 2030. Vacaville's population is expected to be 127,100, up from 89,300 in the 2000 Census.

Solano won't be the only Bay Area county to grow significantly during the next 25 years. Santa Clara County had the second highest percentage projection of growth at 35 percent while Contra Costa County was projected to increase by 31 percent.

Speaking about the projections for Solano, ABAG Senior Regional Planner Brian Kirking said, "It's high for the Bay Area because we are a slow-growth area. People don't encourage growth here, but it's not as high compared to Phoenix and Las Vegas."

Vacaville Mayor Len Augustine questioned the projections. He was cautious in his comments, saying he did not want to criticize the report, but that the unforseen could affect the numbers.

"There's a lot of variables," Augustine said. "They can project all they want, I'm not sure that it's accurate."

Kirking said the figures are projections and should be used by city and county staff for making planning and land-use decisions.

Overall, the Bay Area will be home to 8.7 million people in 2030, according to the report. The demographics of the population has changed slightly. According to the report, the median age of residents will increase to 41.8 from the 2000 median age of 35.6.

Thousands of new jobs will come to Vacaville and Solano County in the next several years, the report found. Vacaville is expected to have 45,900 jobs in 2030, an increase from the 27,100 jobs reported in the 2000 Census. Solano County is projected to have 217,900 jobs in 2030, up from the 136,700 in the 2000 Census.

"It's not gotten worse, which is a good thing," Kirking said of the jobs projections. "The county has not lost as many jobs as other parts of the Bay Area."

Solano County has a good mix of jobs, which helped. According to Kirking, there was not one job industry in Vacaville that stood out from the others. ABAG breaks jobs into several categories, including manufacturing, financial, health, education and other.

Kirking said Solano County is attractive to employers because the costs to locate businesses in Solano County are less than other Bay Area counties.

Vacaville City Manager David Van Kirk said the city's location and its residential base have helped the city gain more jobs.

"You do have to establish a reasonable base of residential, which we have over the last 20 years, and then jobs are easier to get," he said.

Vacaville officials have stressed the need for a well-balanced jobs-housing ratio. Vacaville City Councilman Chuck Dimmick is a strong advocate for a balance. Dimmick spent some time commuting to Sacramento and speaks from experience.

He said a well-balanced jobs-housing ratio improves the quality of life for Vacaville residents and "it takes some of the load off the freeways."

Augustine said thousands of new jobs will become available when projects like the expansion of biotech giant Genentech, the revamp of the historic Nut Tree site and development in Lagoon Valley are complete.

"We are at that breaking point where things are happening. ... You will see more job growth which will follow other jobs," Augustine said.

Augustine also said the Genentech expansion could attract other biotech companies to Vacaville. He added that efforts by the Vacaville Chamber of Commerce, the Vacaville Conference & Visitors Bureau and the Vacaville Downtown Business Improvement District attract businesses to the city.

"I think the business end has been energized and is starting to get going here," he said.

Patricia Valenzuela can be reached at vacaville@thereporter.com.

Vacaville to waive costs for Genentech

By Matthew Bunk

VACAVILLE - The city has agreed to pay or forego a plethora of costs associated with the construction of Genentech's $500 million expansion at its manufacturing plant in the Vaca Valley Business Park.

The terms of the agreement were outlined in a non-binding contract signed by both the city and Genentech at a City Council meeting Tuesday.

The agreement, based on good faith, states the city will give the biotechnology company certain water, sewage output and roadway rights. It also includes monetary incentives, including stipulations the city will forego all sales and use taxes associated with the expansion - a provision worth millions to Genentech - as well as excluding the company from development fees.

Under the terms of the deal, Genentech would not have to pay monthly water and sewer charges up to $200,000 a month. If the bills went over $200,000, Genentech would pay the difference.

Vacaville officials offered the deal informally last year when Genentech began looking for a site for the 550,000-square-foot expansion. The incentives package sweetened the deal for Genentech, which the city had continued to court after the company built a manufacturing facility on 98 acres west of Interstate 80 in 1995.

City officials said earlier this year Genentech's decision to add to its existing 400,000-square-foot facility would more than make up for the incentives. Among other benefits, Genentech expects to add another 500 employees to its existing workforce of nearly 600.

In its economic development strategy, the city identified the biotechnology and pharmaceutical industries as a high priority for business recruitment. Genentech, once the expansion reaches completion in 2009, could become the city's largest private employer, topping life science giant Alza Corp., food distributor Albertsons and medical provider Kaiser Permanente.

Kaiser recently announced plans for an expansion of its medical facility that would provide jobs for as many as 1,900 additional workers. Kaiser expects its expansion, which is planned next to the Genentech property, to be complete in 2009 as well.

The deal with Genentech also states the city will support Genentech in negotiations to lower its property tax obligation payable to other government entities, as well as in negotiations with Pacific Gas and Electricity Co. for the company's energy needs.

The deal will be effective until the city and Genentech draft a development agreement amendment, which would be due sometime before construction is complete.

Reach Matthew Bunk at 425-4646 Ext. 267 or mbunk@dailyrepublic.net.

Smart growth would be boon to Vallejo, group says

By RACHEL RASKIN-ZRIHEN, Times-Herald staff writer

It may be wishful thinking, but the Association of Bay Area Governments (ABAG) announced Tuesday how the Bay Area will look in 25 years if smart growth principles are adopted.

In Vallejo, that could mean nearly 50,000 more people, each earning almost $19,000 more yearly than today's residents, said ABAG senior regional planner Brian Kirking.

As a region's population multiplies, "smart growth" preserves open space and provides adequate local jobs and housing. It also plans development around existing infrastructure.

Under those conditions, by 2030 the number of jobs in Vallejo would increase by half, Kirking said.

"Vallejo would have more growth under this model than under the current trend, probably at the expense of Vacaville and Dixon," Kirking said. That's because Vallejo doesn't have many undeveloped areas and is more amenable to redevelopment as opposed to sprawl. It's also closer to transportation than cities like Rio Vista, he said.

ABAG also forecast that the Bay Area will add 2 million more people and 1.4 million jobs by 2030, if it adopts smart growth attitudes.

By then, Solano County's population will swell to well over a half -million, ABAG spokeswoman Kathleen Cha said.

In Vallejo, the population would grow from an estimated 125,000 next year to nearly 172,000 a quarter-century from now. In fact, Vallejo is on track to be the fifth fastest-growing Bay Area city, following San Jose, San Francisco, Oakland and Fremont, ABAG analyst Hing Wong said.

Locally, the number of households and the median income are expected to rise.

Solano County's median household income next year will be $73,400, ABAG predicts. By 2030, it should be $97,100.

Vallejo's would rise from $68,000 to $86,400 during the same period, Cha said.

"Growth is expected to be slower in the first 10 years," and much faster in the following 15 years, Cha said.

Solano County is expected to lose agriculture and national resources jobs, Wong said. The majority of them - 27,620 - will be in Fairfield.

Vallejo should get 21,020 new jobs, mostly in health, education and recreation services industries, he said.

Solano County will significantly increase its available housing, adding more than 63,000 units by 2030, nearly a quarter of those in Vallejo, Wong said.

ABAG economist Paul Fassinger said half the Bay Area's population growth will result from births exceeding deaths and half from migration from outside the area.

Despite a job and income loss in recent years, the Bay Area remains attractive to newcomers, Fassinger said. He predicted most Bay Area job growth will be in the information technology, travel and tourism, finance, education, health and research fields.

ABAG's forecasts, produced every two years, are based on input from cities, communities, planners, business experts and activists, Wong said. They are used by other regional agencies, like the Metropolitan Transportation Agency and the Bay Area Air Quality Management District, to make regulatory and funding decisions. They also are used by local jurisdictions for land use planning and by individuals and organizations examining their long-term Bay Area objectives.

That's why ABAG intentionally tried to make predictions to "push" a smart growth agenda, Kirking said.

"It relies on the philosophy that smart growth is better," Kirking said. "Smart growth requires less new infrastructure and preserves open space. We hope to cause people to think differently. We don't expect changes overnight. In fact, we don't expect any change for the first several years."

If the projections prove off base, Kirking said, they will be revised.

While ABAG's predictions have proven "fairly accurate," in the past, "you must take them with a grain of salt because many things can change," Wong said.

- E-mail Rachel Raskin-Zrihen at RachelZ@thnewsnet.com or call 553-6824.

Kaiser board approves $200M Vacaville hospital

by Chris Rauber

Kaiser Permanente said Tuesday that it has received approval from its board of directors to fund a large new medical center in Vacaville.

Based on industry estimates, the new facility is likely to cost at least $200 million and possibly as much as $250 million or more.

Officials at Oakland-based Kaiser said groundbreaking of the planned 166-bed medical center is slated for 2005, depending on required planning and regulatory approvals from local and state agencies.

The new 340,000-square-foot acute-care facility is expected to open in 2009, and is part of a multi-billion-dollar series of Kaiser hospital construction and expansion projects statewide.

Kaiser operates an existing 168,000-square-foot medical office building and clinic housing about 90 doctors on the Vacaville site, which will be augmented by the new hospital structure. An ER, eight new labor and delivery rooms, a new medical office building, expanded pharmacy and lab services and parking for 2,300 cars will also be added.

Kaiser has more than 240,000 enrollees in Napa and Solano counties and is expecting significant growth in the region. Deborah Romer, Kaiser's senior vice president and area manager, called it "one of the fastest growing areas in Northern California."

Including additional expansion projects, the entire Vacaville facility will total 750,000 square feet of space when completed, officials said.

"We've recognized the need to expand our services to provide an even more comprehensive, full-service medical center in this area," including Vacaville, Fairfield, Dixon, Davis and other fast-growing areas in the vicinity, Romer said.

© 2004 American City Business Journals Inc.

A machine operator at Tronex Technologies goes through the 40 steps necessary to make their precision tools. The company makes 500,000 tools a year. (Judith Sagami/DAILY REPUBLIC) 

Manufacturing success: Fairfield-based Tronex making cutting-edge tools

By Matthew Bunk

FAIRFIELD - When Tronex Technologies Inc. almost collapsed a few years ago, owner Arne Salvesen realized its future hinged on branching out - both internationally and to new industries.

So he started traveling to places such as Shanghai, China, and various cities in Japan to convince business leaders that Tronex makes the best precision cutting tools in the world. Next year he plans to stump for Tronex in Germany.

The international push has allowed Tronex, which had to close several times during the dot-bomb years of 2001 and 2002, to emerge stronger than before the tech bubble burst. Exports now account for about 25 percent of the company's overall sales.

Not only that, but Salvesen discovered Tronex tools appealed to manufacturers in several different industries. Instead of selling mostly to computer engineers who need precision tools to work on circuit boards, Salvesen convinced jewelry makers, defense electronics specialists and medical professionals they also needed his tools.

Now, only two years after the whole operation almost shut down permanently, Tronex seems to have fully rebounded.


The company now makes about 50,000 tools annually, many of which sell for upwards of $60 each, and generates annual revenue of about $1.5 million, he said.

"Now business is very strong," Salvesen said in an interview at the Tronex headquarters in Fairfield Corporate Park. "There's high demand for our products all over the world."

Even though Tronex is a leader in precision tool manufacturing, many people who use the tools don't know they're made by Tronex. Rather than direct sales, most Tronex products are sold in bulk to distributors who put their names on the tools.

"You might be using our tools and not even know it," Salvesen said.

But success hasn't erased vivid memories of more trying times.

"It wasn't long ago that I was concerned about our survival," Salvesen said. "Those were some tough times."

But Salvesen, who holds a masters in business administration from Harvard Business School, and Tronex have moved on.

To complete the turnaround, Salvesen uprooted Tronex from Napa, where it was founded in 1982, and planted it in Fairfield in August. The move gave Tronex more room to grow, nearly doubling the square footage of the Napa facility.

Now positioned for growth, Salvesen knows he can't sit back on his heels. He's actively trying to expand Tronex influence in Asia, Europe, Africa, Australia and South America - places he sees as untapped markets for high-quality precision tools.

Right now, though, most of the tools - which basically look like fancy pliers that keep their edge much longer than the hardware store variety - go to North American companies. But for a small manufacturing company with 10 full-time workers, in addition to sales representatives in more than a dozen countries, export sales are stronger than many would expect.

"There's a lot of international potential," Salvesen said. "If we can compete worldwide, we'll be all right."

The challenge for Tronex will be to convince buyers they would be better off using tools that keep their edge through half a million cuts rather than use a throw-away tool, like those made in China.

The process

Made from durable carbon steel, each Tronex tool goes through 30 steps in the manufacturing process. The blades are hardened to two times the strength of the rest of the tool to make sure it keeps an edge.

"It's a simple product, but complicated to make," Salvesen said as he gave a tour of the machine shop behind the Tronex offices and lobby. "Because the company is small, we have more control over every tool."

Employee expertise is perhaps the most important aspect of making a Tronex tool, and many of the employees have been with the company since Salvesen took it over in 1996. In fact, four machinists on staff come from the same family.

Salvesen encourages his workers to go through the machining program at Napa College, where Salvesen serves on the advisory board. He said employee education is a company goal.

"Many of our workers are Mexican Americans who at one time held seasonal positions, mostly in the fields," he said. "Over the years they've become some of the top operators, and we try to keep them as long as we can."

As long as the operation runs smoothly at home, Salvesen and his wife and business partner, Karin Salvesen, can ply their wares overseas.

A native of Germany, Karin Salvesen might be a big help next year when Tronex tries to open up trade routes in that country.

"We do well in Japan, and we just started in China," Arne Salvesen said. "Next up is Germany, which could be a challenge because they all think American products are inferior. But we have a lot of customers who say there's no better tool in all of Germany."

Reach Matthew Bunk at 425-4646 Ext. 267 or mbunk@dailyrepublic.net.

Visit Tronex Technologies Inc. on the web at www.tronextools.com.