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Qualcomm's head of facilities told a city councilman, the city attorney and others that the region's largest company is so frustrated with the city it will never again build anything in San Diego.
On March 4, as they were preparing their vision for a new Mission Valley football stadium, San Diego City Councilman Scott Sherman, real estate analyst Gary London, developer Perry Dealy and City Attorney Jan Goldsmith visited Qualcomm, the company.
They met with Ed Capozzoli, the vice president in charge of all of Qualcomm’s facilities and real estate needs and Monique Rodriguez, director of government affairs.
Sherman and the team wanted to pitch Qualcomm on an idea. Their vision for the Mission Valley stadium site included nearly 3 million square feet of office space. You can’t really fill that much piece by piece. They wanted to lure a large corporation to the development plan — someone who could build a whole campus there.
Qualcomm would be perfect, they thought. After all, it was planning a 1.2 million square foot expansion. Key word: was.
But when the group sat down with Capozzoli and Rodriguez, they couldn’t even get to their pitch.
“We got blindsided,” said London. Three other participants in the meeting confirmed what happened next.
Capozzoli lit into them for the way he felt the company was treated by the city. Particularly frustrating, he said, was the traffic situation around Qualcomm’s Sorrento Valley office. London said Capozzoli told the group the city was dragging its feet and not letting Qualcomm modernize nearby traffic lights.
Capozzoli was also frustrated, he said, that the city was handing out subsidies to other local companies like Illumina, but ignoring Qualcomm’s very basic problems.
And then the kicker: Even as it expands elsewhere, Capozzoli said Qualcomm would never build anything in San Diego again. Capozzoli, participants in the meeting confirmed, said that order came from the top of Qualcomm’s leadership. That planned 1.2 million square foot expansion has not gone forward.
I asked Qualcomm representatives if this was the company’s official take. Not really.
“It was a private meeting at which the attendees felt comfortable in expressing their frustrations in very direct language,” said spokeswoman Emily Kilpatrick in an email. “We know that the mayor has taken our concerns seriously and we expressed the urgency of our needs to those in the meeting.”
Kilpatrick praised the mayor for creating a task force to help companies like Qualcomm address issues with the city in a one-stop shop. She did not expressly deny the company is shutting down plans to grow in San Diego, however.
“In order for Qualcomm to continue to grow in San Diego, it is imperative we continue to partner with the City and especially the Mayor’s office on addressing challenges which include traffic, water and expediting permitting processes,” she said in the email.
If it is true that Qualcomm is done building anything in San Diego, it could be a new low in relations between the city and its largest company. It also highlights a troubling backdrop to the stadium saga: that as the community and politicians rally to subsidize and keep one company, the Chargers, in town, another much larger one — with roughly 13,000 more employees — sits displeased.
A 2013 study by the San Diego Workforce Partnership and Regional Economic Development Corp. found that Qualcomm ‘s presence supports more than 27,000 jobs in the region, including its own — adding to a $4.53 billion annual economic impact. Qualcomm employees represent nearly 2 percent of all workers in the city.
Matt Awbrey, the communications director for the mayor, said Capozzoli’s comments came as a surprise to the mayor’s office.
“We have a great working relationship with Qualcomm,” he said. Awbrey said city staff is regularly meeting with Qualcomm representatives and leaders of other Sorrento Valley businesses.
The city attorney, Jan Goldsmith, often stresses to me how he’s not political — it’s all about the law. When I asked his spokesman why he was in a meeting like this, I got this response.
“I guess that’s the benefit of being a citywide elected official. You get invited to a lot of meetings and you get to pick the ones that interest you,” said Gerry Braun, Goldsmith’s spokesperson. He said he was unaware of Qualcomm’s concerns and deferred all other comments about the meeting to Sherman’s office. He said Sherman invited Goldsmith.
Sherman told me he thought they just got the wrong guy on the wrong day.
Later, in a written statement, he said this:
“I appreciate representatives from the company taking the time to meet with us and give their honest feedback about city operations. Since taking office, I have worked hard to help create a more business-friendly environment and have taken their concerns into account as we continue this mission,” he said.
Qualcomm’s frustrations apparently range from specific (the company’s employees are upset about long traffic delays in Sorrento Valley) to more vague complaints.
Capozzoli’s reference to the city’s effort to subsidize other businesses to keep them here is intriguing. Amid much fanfare last year, Illumina, a medical device manufacturer, agreed to keep some jobs in San Diego in exchange for $1.5 million in tax rebates.
Russ Gibbon, business development manager for the city, told us last year there’s a specific Council policy outlining the requirements for subsidies and it comes with a certain risk.
“It has the potential to create a bunch of ‘me-toos’ out there, so we have to limit it to projects with extraordinary public benefit,” Gibbon said at the time.
Awbrey said Qualcomm has never communicated that it was done expanding in San Diego. He said the city was moving forward on one of the company’s major issues: a desire for adaptive traffic signals in Sorrento Valley. The special signal system helps traffic flow by adjusting to its intensity throughout the day.
Qualcomm might have shelved its expansion in San Diego because of other forces. Its business focus is now largely overseas – it has no particular reason to expand operations in San Diego. And it faces some rough headwinds: The company just agreed to pay a $975 million fine to China. Its longtime client, Samsung, startled some observers when it did not include a Qualcomm chip in its new flagship phone.
Regardless, London said the meeting with Qualcomm made him worried.
“What frightened me was the possibility that this was the opening salvo in a long-term movement on the part of Qualcomm to diminish its footprint in San Diego, which from an economic and political standpoint is completely unacceptable,” London said.
Disclosure: Qualcomm’s founder, Irwin Jacobs, is a major supporter of Voice of San Diego.