The Rise and Sprawl of San Diego's Tech Hotspots
As the region eyes young, talented workers, perspectives on why such companies would set up shop here show the calculation is complicated.
Pockets of technology and design business activity dot San Diego’s cities and neighborhoods from Oceanside to Tijuana. The people concerned with growing the region’s ecosystem for such pursuits wonder if the sprawl could challenge their efforts.
The Torrey Pines Mesa became a hub for biotechnology, atomic energy and advanced research after World War II, thanks in large part to land gifts from the city of San Diego.
In the decades since, that center has grown tentacles into Sorrento Valley and other northern city neighborhoods. And nearby suburban neighborhoods like Carmel Valley, 4S Ranch and Rancho Bernardo house legions of the region’s tech workers and their families.
Meanwhile, another slice of the technology and design sector is settling in downtown.
“The Mesa’s boring, to be quite honest,” said Steven Cox, founder of TakeLessons, a company of about 75 employees that connects music teachers and students via an online forum. “We like to drink beer and have fun and walk around. We can just do that better downtown.”
That’s the sentiment developers are trying to tap into as a couple of big projects take shape in several blocks south of City College in downtown’s East Village. They eye young workers and company founders, whom they suspect prefer to live and work in the urban core.
But it’s a fine line.
“You can’t plan this stuff too much,” said David Malmuth, a developer championing a 20-block concentration of design and technology businesses and workers downtown. “Otherwise you’ll wring out all the creativity.”
‘We’re Pretty Spread Out’
Some of the distinction comes down to generations. Many workers and company founders in their 20s and early 30s say they find inspiration in urban centers within walking distance of restaurants, cafes and bars.
“This cohort in my generation wanted to be in the suburbs,” said Pete Garcia, Malmuth’s partner on the technology and design-oriented “I.D.E.A. District.”
Austin Neudecker, a San Diego native who’s lived in Boston, New York City, San Francisco and Philadelphia, said it’s less about where the activity happens and more about coordinating a hub that allows startup founders to feel some community support. Neudecker highlighted a contingent of app and software founders who congregate in downtown offices with open floor plans.
“San Diego has a disadvantage on this front since it is so spread (out),” he said. “Luckily there are small sub-cultures of density which are starting to form.”
Darrius Thompson, founder of SweetLabs, a company of about 50 employees, said he chose to locate his business downtown for its “energy and vibe.”
But Thompson’s experience may be instructive for the developers who think they can pin down where workers for this kind of company want to live.
A handful of employees live downtown, but Thompson himself and a few of his workers live in Encinitas. A few live in North Park, a few in Hillcrest.
“We’re pretty spread out,” he said.
The sprawl and suburbs have their own draw for some other companies and workers.
Gabriela Dow founded a government technology startup and now consults with tech startups locally. She worked downtown for several years, and now lives in Rancho Bernardo. She knows two tech engineers on her cul-de-sac.
She said the claim San Diego won’t be able to attract the talent it needs to grow its tech workforce without a hipper downtown is overblown. The county’s miles of open space, trails and canyons, while contributing to sprawl, make the county an attractive place for triathletes and long-distance cyclists, for example. And the endurance such sports foster is attractive to hard-working tech companies, she said.
“You just go where you have to go to start your company, and San Diego’s not a hard place to recruit people to,” she said.
Dow said she hopes San Diego doesn’t lose its sense of distinct, diverse neighborhoods. She said she thinks San Francisco has lost some of its color: “Now it’s all become millennial, Google-Yahoo-Facebook.”
The very effort of building office space suggests the companies in this sector all want a fixed hub.
Dow said she spends a day a week in several different parts of the county. For many young workers, she said, “their laptop is their office. Nobody wants to be locked into Rancho Bernardo, or locked into downtown.”
‘I Am Sure That It Is Seen as a Boring Community’
4S Ranch, a suburban master-planned community, is brimming with engineers from Qualcomm, Sony, HP, BAE Systems and Northrup Grumman, said Erik Bruvold, an economist with the National University System Institute for Policy Research, who also lives there.
Many have kids, he said, and a grandparent who lives in the same house to help with child-raising. The region should take care not to overlook the health of its suburbs as a magnet for a big segment of the tech workforce in favor of appealing to a stereotype of hipness, he said.
“I am SURE that it is seen as a boring community by many readers of WIRED,” he wrote in an email. “But it seems to work for many members of the workforce that is fueling our tech companies.”
Malmuth and Garcia, whose first project is on a city block leased from City College, say they’re keen observers of San Diego’s innovation clusters and how they’ve grown. Their plans for a multi-block district, a tech and design hub, fills a gap rather than replacing a focus on the successes in northern parts of the city, they said.
Their $100 million project includes housing, a courtyard, retail and office space that will be customized when they land tenants. Garcia contends it’s short-sighted to ignore the kinds of companies that might otherwise seek out cities like San Francisco, New York and Portland, Ore.
Garcia said he argues with Bruvold about whether San Diego should try to attract young, hip companies.
“That to me is boosterism; that’s denial,” he said. “If we want to say to ourselves, ‘We only want to have one segment of the tech landscape.’ … But our argument is that we need both.”
There always exist potential disconnects when developers try to pin down a space for “those people.” Garcia, 65, and Malmuth, 58, have been reading studies, visiting tech, design and web company campuses in Barcelona and Silicon Valley and steeping themselves in conversations with companies like Digitaria, a successful local digital design and marketing firm based in the East Village.
And the demographic does exist here.
Take the mid-20s founders of Zeeto Media, an online marketing and advertising firm. The company headquarters in the old Chicago Title building on 9th Avenue features hammocks, a wall with plants growing out of it, an open floor plan and a wall the company covered in bricks to resemble an old converted factory. A chef cooks lunch in the penthouse the company’s founders split a few blocks away and brings it over to serve the 45 or so workers four days a week.
Garcia’s own career spans another time when San Diego pivoted. Garcia developed the headquarters for Hybritech, the biotech company founded in 1978 that formed the top of the family tree for San Diego’s biotech cluster. The company needed a wet lab, a nuclear filter, a vivarium – then-foreign concepts to many local developers.
“People didn’t even know how to spell ‘biopharmaceutical,’” he said.
But a key difference between that project and this I.D.E.A. District so far is that Hybritech could tell the developers exactly what they wanted. Garcia and Malmuth are still looking for their “800-pound gorilla” from the tech sector that would both inform the layout of the buildings but also magnetize other firms to set up shop there.
That’s also the difference between the East Village project and the early days of the Torrey Pines Mesa, said Mary Walshok, a sociologist with an upcoming book on the history of San Diego’s innovation economy. Torrey Pines’ success began with military researchers, defense contractors and researchers who already committed to locate there.
“It wasn’t, ‘Build it and they will come,’” she said. “It was, ‘Create a platform and then give it away as you get specific partners.’ East Village has to do that. They have to find some anchor tenants. It can’t be, ‘We just put all this money into it. Now use it.’”