Carlsbad Economy Showed Gains in 2014January 15, 2015
Jan 01, 2015
Last year was a good one for Carlsbad’s economy, as key industries added employees, retail sales grew and real estate development gained momentum.Carlsbad’s core industries, which are composed of life sciences, information and communications technology, action sports manufacturing, and clean technology, experienced growth during 2014, with life sciences leading the way.
This Carlsbad-based high tech cluster added dozens of companies last year, rising to 180 from 131, for a 37 percent expansion. Life sciences firms also added more than 400 new employees, a growth of 5.9 percent.
Two other high tech clusters — information and communications technology, and clean technology — saw small decreases in the number of firms, but significant increases in employment. Information and communications technology dropped to 249 firms from 254, but added 355 employees, a growth of 3.9 percent. Clean technology saw a similar decrease in the number of firms, dropping to 85 from 90, but a similar expansion in employees, adding 387 workers, for a nearly 8 percent increase.
Only the action sports manufacturing cluster contracted, losing two firms for a drop of 4 percent, and 200 employees, or 7 percent, but we see promising numbers in 2015 in this cluster.
On the retail front, sales tax revenues were on the upswing, with gains in new auto sales, restaurant sales and consumer building materials. Year-end data were not available, but sales tax revenue showed an increase of 3 percent during the first four months of the new fiscal year, compared with the same period in 2013.
Carlsbad continues to be a popular tourist destination, as indicated by the ongoing increase in transient occupancy tax revenue. For the first four months of the fiscal year, hotel room tax revenue was up 11 percent over the previous year, and on average the hotel room occupancy rate was at 67 percent, 4 percentage points higher than the prior year’s average.
Developers continue to show faith in Carlsbad’s future, with more than $2.7 billion in private development projects either under construction or in the planning stage. Significant commercial projects include the $300 million Westfield Carlsbad renovation, the first phase of which is nearing completion as this is being written. This remodel includes a new 24 Hour Fitness Super Sport, which opened in October, and a new Regal Carlsbad 12 movie theater, which opened last month. The mall will have 1.1 million square feet of leasable space and a new open air, beach themed footprint when the renovation is completed in autumn of 2016.
Another large project is the $75 million La Costa Towne Square shopping center, which is partially open now and scheduled to be completely open this spring at Rancho Santa Fe Road and La Costa Avenue. This 83-acre mixed-use center will offer 267,400 square feet of retail space, featuring a Vons Lifestyle store.The largest project under construction is the Carlsbad Desalination Project, which is hard to avoid if you work along Faraday Avenue. This $1 billion project includes the desalination plant at the foot of Cannon Road, and 10 miles of pipe that will convey the water to the San Diego County Water Authority aqueduct in San Marcos. The desalination plant will convert 50 million gallons of seawater into drinking water daily when it comes on line later this year, making it the largest desalination plant in the Western Hemisphere.
Lastly, many of the industrial buildings that came on line just as the recession hit have been filling up with tenants. Cushman & Wakefield noted in a recent report that the overall vacancy rate for industrial space in Carlsbad was 11 percent, down drastically from the worst of the recession. Available warehouse space is scarce and hard to come by in Carlsbad, as vacancy is down to 2.0 percent. Lease rates, meanwhile, have risen by 10–15 percent as the supply of vacant industrial space has decreased, another sign that the economy is on the upswing. The year 2015 looks promising as many indicators continue to point in the right direction — economic vitality.