North Bay Business Journal

Monday, January 2, 2012, 7:00 am

2011 top stories: New hospital, tech advances define year of the economy

By Eric Gneckow, Dan Verel, Jeff Quackenbush and Loralee Stevens

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    The national and local economy was on everyone’s mind in 2011. But as the Business Journal editorial staff set out to develop its Top 10 Stories of the year, it quickly became clear that the North Bay was blessed with multiple economy-boosting projects and new commitments to job creation.

    1. Sutter Medical Center of Santa Rosa breaks ground on $284 million hospital

    An artist’s rendering of the new Sutter Medical Center of Santa Rosa under construction near the Wells Fargo Center for the Arts.

    SANTA ROSA — After nearly 10 years of regulatory maneuvering and an arduous approval process that included legal challenges, construction on Sutter Health’s new $284 million Sutter Medical Center of Santa Rosa is well under way.

    The project will replace Sutter’s current facility on Chanate Road that has long been deemed seismically unfit. The new medial campus, next to the Wells Fargo Center for the Arts just north of Santa Rosa, will ensure the delivery of health care in the event of an earthquake, will be a state-of-the art facility for Sonoma County and will provide over 1,500 construction jobs through 2014, when construction will be completed, Sutter has said. Sutter also said the new medical campus would help attract physicians to Sonoma County, and that it hired as many local contractors and subcontractors as possible for the project.

    The project has faced legal challenges. The North Sonoma County Healthcare District, which oversees Healdsburg District Hospital, was joined by the Palm Drive Healthcare District and the California Nurses Association in a suit that alleged Sutter’s forthcoming 82-bed hospital would negatively impact health care delivery in the county as well as environmentally. The new hospital will include space for an expansion of up to 27 beds.

    Earlier this year, however, Sonoma County Superior Court Judge Rene Chouteau mostly sided with Sutter and the county Board of Supervisors, which approved the plan last summer, and construction continued unabated on the project.  The judge ruled that the health care districts did not have legal standing to sue under the California Environmental Quality Act, and that they are economic competitors of Sutter Health.

    Sutter officials have said construction is right on schedule. The site will include 80,000 square feet of medical office buildings. Sutter said the hospital is expected to open in the fall of 2014.

    –Dan Verel

    2. Enphase Energy plans $100 million IPO, leases 96,000 square feet in Petaluma

    Enphase Energy announced an expansion to 96,000 square feet in this Petaluma office complex along with its intention to file for an IPO.

    PETALUMA — Enphase Energy, the fastest-growing technology company in the North Bay, announced it had filed for an IPO and signed a 10-year lease on a 96,000 square foot space in north Petaluma.

    The IPO, as yet unscheduled, could raise up to $100 million for the 5-year-old maker of microinverters for the solar industry. Since its founding as PVI Solutions, Enphase has grown its staff to 243 and raised over $100 million in investor funding.

    The company has indicated it’ll continue to seek investor as well as public funding.

    The Enphase microinverter converts direct electrical current to alternating current at the individual solar module level, instead of a  central inverter, thus distributing the power source as well as optimizing the output of each solar panel. Problems due to shade from other buildings or trees are largely mitigated.

    Enphase has added a software component to allow data to be accessed and the system controlled from any Internet-connected device.

    Although it now has competition in the industry, its status as first to market with a proven, reliable product has put Enphase ahead of the pack in funds raised — nearly twice as much as its nearest competitor — and market reach.

     The company shipped more than 1 million units through December, 2011, representing over an estimated 30,000 solar installations.

    “Given significant advantages over traditional central inverters, we believe that microinverter solutions will become the standard for residential and commercial solar,” said Bill Rossi, chief marketing officer.

    With that in mind, Enphase is moving rapidly to capture market share in Europe, where distributed optimization, as the technology is called, is just catching on. The company opened offices in France and Italy this year and had a large presence at the recent Intersolar Europe expo in Munich.

    Not yet profitable, Enphase lost $21.78 million in 2010. The economy has put a damper on solar installations worldwide, and Enphase technology currently targets the residential, rather that the more lucrative commercial solar industry.  

    Yet the company has good cash reserves and improving margins, and its long-term lease of two of the former Alcatel-Lucent buildings brings a welcome shot in the arm for the North Bay technology and commercial real estate sectors. The first phase of the move-in is set for mid-February. 

    –Loralee Stevens

    3. Agilent Technologies posts record year, hires 50

    Agilent Chief Operating Officer Ron Nersesian leads a tour of the Santa Rosa facility, headquarters for the Electronic Measurement Group.

    SANTA ROSA — Agilent Technologies pulled out of the recession with a record year and a thriving Electronic Measurement Group based in Santa Rosa.

    Revenues and margins reached historic highs, according to Ron Nersesian, former Electronic Measurement president and newly appointed company chief operating officer .

    Each of the 1,150 local employees is slated for a 14 percent bonus, money which Mr. Nersesian said would “be a boon to the North Bay community during these tough times.”

    The group, Agilent’s largest division, had $855 million in sales during its final fiscal quarter of 2011, up 12 percent from the same quarter of 2010. For the year it reported $3.3 billion in sales, a record and the second straight year of significant revenue growth.

    “I don’t think we’ll see a pause in that kind of growth,” said Mr. Nersesian.

    Cell phone sales account for the lion’s share of the revenue rise. Agilent’s Asian markets, where most mobile devices are manufactured, grew 20 percent, closely followed by India, South America and Eastern Europe.

    The next generation of cell phones and other mobile devices is already in the works, necessitating a new generation of testing equipment. Agilent is the world’s leader in electronic test and measurement, and many of the company’s innovations will come from research and development in Santa Rosa.

    The local group is hiring again, cautiously in an uncertain economy, said Mr. Nersesian. Two years ago the Santa Rosa workforce was cut by 300, a painful move that nonetheless stabilized the company during the worst of the worldwide tech slump.

    Since then, when the company reported negative revenues, Agilent has swung back into the black. The austerity strategy paid off in higher margins, notably for the Electronic Measurement Group, which is currently enjoying the highest margins – 24 percent of revenue – in it’s 12-year history.

    Agilent employees in Santa Rosa are also enjoying a completely refurbished plant after a $50 million upgrade. The four-building campus on Fountaingrove Boulevard is awash with natural light and surrounded by playing fields, walking trails and views of the surrounding hills.

    –Loralee Stevens

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