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.Top 10 stories of 2011Sutter Medical Center of Santa Rosa breaks ground on $284 million hospital.Enphase Energy plans $100 million IPO, leases 96,000 square feet in Petaluma.Agilent Technologies posts record year.Buck Institute for Research on Aging expands.New leaders at three North Bay colleges.Napa Destination Council posts some major gains.Marin-Sonoma IPA network of physicians formed.Sonoma County job-creation program Building Economic Success Together (BEST) moves to 'execution phase' in 2012.Fetzer sold to Chilean wine company for $238 million.Turnover in Petaluma commercial properties spurs company expansions.1. Sutter Medical Center of Santa Rosa breaks ground on $284 million hospital

[caption id="attachment_34895" align="alignleft" width="302" caption="An artist’s rendering of the new Sutter Medical Center of Santa Rosa under construction near the Wells Fargo Center for the Arts."][/caption]

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 Verel2. Enphase Energy plans $100 million IPO, leases 96,000 square feet in Petaluma

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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 Stevens3. Agilent Technologies posts record year, hires 50

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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 Stevens4. Buck Institute for Research on Aging expands

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NOVATO -- For the Buck Institute for Research on Aging, 2011 was a year of all-round expansion.

Its hillside campus grew by 65,708 square feet with the addition of a brand new, $41 million stem cell laboratory and research center, scheduled to formally open in April 2012.

Funded by $20.5 million from the California Institute of Regenerative Medicine and $20.5 million raised by the Buck through bond sales, the IM Pei-designed building will house a dozen stem cell researchers and their laboratories.

To match its larger physical footprint in the North Bay the institute moved toward establishing a global presence with the Buck Advisory Council. The group, soon to be 100 strong, is comprised of national and international business and philanthropic leaders who will consult with Buck staff and serve as ambassadors to the world community.

Along the same strategic lines the institute has bulked up its board of trustees with big names in the fields of global enterprise, pharmaceuticals, health care, government, nonprofits and real estate development.

“The unparalleled credentials and commitment of our five new board members will help us deliver on our promise to impact global health,” said Brian Kennedy, Ph.D., president and CEO.

Two new stem cell scientists joined the faculty as well, broadening the scope of the Buck’s research on the causes and diseases of aging to include degenerative vision disorders and the physiology of skeletal muscle.

To amplify the discoveries of its research staff through video presentations and television interviews the institute just opened its own onsite broadcasting studio.

In the works is the possibility of more construction. The Novato Design Commission has tentatively passed a proposal of site design for a housing project. Formal approval is expected shortly and efforts to provide affordable housing for employees on the campus will proceed in 2012.. --Loralee Stevens5. New leaders at three North Bay colleges

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Three of the North Bay’s most prominent colleges -- Santa Rosa Junior College, Dominican University and Napa Valley College -- have recently selected new presidents.

Most recent was the announcement in November that Dr. Frank Chong will succeed 21-year president Dr. Robert F. Agrella at Santa Rosa Junior College. The change takes effect on Jan. 11.

Dr. Mary Marcy became president of San Rafael’s Dominican University on July 1, succeeding Dr. Joseph Fink. At Napa Valley College, Dr. Edna Baehre became president last year after the death of former President Dr. Chris McCarthy.

The Santa Rosa Junior College Board of Trustees selected Dr. Chong, the current deputy assistant secretary for community colleges at the U.S. Department of Education, out of 42 applicants. He was formerly the president of Laney College in Oakland and Mission College in Santa Clara, as well as the campus dean and dean of student affairs at San Francisco City College.  

Dominican’s new president, Dr. Marcy, became the college’s ninth president after serving as the chief operating officer, vice president and provost of Bard College at Simon’s Rock in Massachusetts. She is a political scientist with a doctorate of philosophy and master’s of philosophy from the University of Oxford.

Dr. Baehre came to Napa Valley College from Harrisburg Area Community College in Pennsylvania, where she had served as president since 1997. She was also formerly vice president for instruction and educational services at Elgin Community College in Illinois and held positions at Highland Community College in Illinois and at Genesee Community College in New York.--Eric Gneckow

6. Napa Destination Council posts some major gains

The Napa Valley Destination Council last year received a significant boost when the county board of supervisors officially approved a tourism improvement district that affixed a 2 percent assessment on hotels and lodging, resulting in a vastly increased marketing budget from $437,000 a year to nearly $4.5 million.

The Destination Council and proponents said at the time that the assessment would give the Napa Valley much-needed resources to promote itself as the premier wine, dinning and tourism destination.

In its first year, early returns point to just that -- a far more visible and aggressive marketing campaign that attracted a slew of firsts and high-profile events that have generated substantial tourism, all amid a slow economy in which U.S. travel has waned.

Not so in Napa County, according to Clay Gregory, chief executive officer of the council. In the year ending in November, occupancy rates were up by 7 percent, and revenue per available room was up to $235 per night, significantly higher than last year’s room rate of around $211 per night. 

It’s already paid dividends in attracting visitors during the off season, from November to February, Mr. Gregory said, pointing to a bevy of firsts for Napa, including the high profile, star-studded Flavor Napa Valley food and wine festival, the first-ever Napa Valley Film Festival, the first Wine Tourism Conference in North American, and the roll out of Cabernet Season, stretching from November to April.

And the Napa Valley nabbed the official wine sponsor title for the upcoming America's Cup in San Francisco, meaning only Napa wines will be poured at official America's Cup events from now through 2013. That will give the region yet another boost as an international and affluent demographic gains exposure to the Napa Valley, which will likely in turn boost lodging throughout the county. --Dan Verel7. Marin-Sonoma IPA formed

When Marin General Hospital, the Prima Medical Group and the then-named Marin IPA announced the formation of a physician foundation over a year ago, officials said at the time they would look north for further expansion.

They did so in a big way when the newly named Marin-Sonoma IPA announced in April it had reached agreement with physicians across Sonoma County to enter its network, boosting the number of doctors from about 350 to nearly 600 across Marin and Sonoma counties.

The IPA had existing relationships with Marin General, Sutter Health-affiliated Novato Community, Sonoma Valley and Petaluma Valley hospitals. The expansion added physicians from Palm Drive,  Healdsburg District and Santa Rosa Memorial hospitals, by way of the Annadel Medical Group -- meaning every hospital except Kaiser Permanente and Sutter Health facilities in Sonoma County.

The larger network permits physicians and facilities better negotiation power with insurance companies and helps with physician recruitment at facilities that might otherwise struggle to retain doctors, particularly primary care physicians, as health care providers address an anticipated shortage. It also gives patients a much larger network of doctors to choose from, thereby enabling the IPA to remain competitive by having continual care across county lines. 

For district hospitals, the expanded IPA was seen as a particularly key development, as stand-alone facilities face stiff competition from larger organizations such as Kaiser and Sutter in both drawing insured patients and recruiting doctors.The expanded Marin-Sonoma IPA is also likely to be classified as an accountable care organization, or ACO, which are encouraged under the federal health overhaul of 2010, according to Joel Criste, CEO of the Marin-Sonoma IPA. ACOs will be overseen by the Center for Medicare and Medicaid Services, and are seen by many as key contributors in driving down health care costs as physicians, insurers and hospitals integrate services and aim to eliminate redundancies.--Dan Verel8. BEST moves to 'execution phase' in 2012

A five-year job creation effort in Sonoma County will be transitioning to its “execution phase” in 2012, said Trip Snelson, campaign executive for Building Economic Success Together.

The Santa Rosa Chamber of Commerce launched the effort, known as BEST, last year. The $3.25 million-dollar program, funded through public and private contributions, seeks to create 4,100 jobs and millions of dollars in economic activity.

Carolyn Stark joined BEST as executive director in November. Ms. Stark’s previous work in economic development included an economic revitalization plan for California’s Coachella Valley and helping to create over 150,000 jobs as CEO of the Austin Technology Council.

The effort comes at a time when Sonoma County faces an unemployment rate hovering around in the high single digits, along with widespread pressures on local businesses brought on by the recession.

In addition to job creation, BEST’s goals include a $155 million increase in consumer expenditures, $37 million in state and local tax revenue, $87 million in bank deposits, $268 million in payroll earnings and a $182 million increase in disposable income.

Other goals include business retention and expansion; creating a supportive business climate; fostering innovative businesses; attracting new businesses and providing high-quality jobs; and building a “world-class workforce based on educational attainment.”

Initiatives that will help attain those goals include economic research, supporting entrepreneur programs, creating a startup “pipeline,” marketing of Sonoma County for business, partnering with schools to develop workforce readiness and serving as a one-stop for business recruitment.--Eric Gneckow9. Fetzer sold to Chilean wine company for $238 million

Brown-Forman Corp. in March announced it would sell Hopland-based Fetzer Vineyards to Santiago-based Viña Concha y Toro S.A. (NYSE: VCO) for $238 million after reviewing options for Mendocino County-based wine operations since the previous December. The sale closed in April.

It was the largest North Coast wine industry acquisition of the year. It also was a prime example of a fermenting trend of more foreign buyers of U.S. wine assets, particularly "platform" brands large enough to have trade clout, according to Mario Zepponi of Santa Rosa-based wine industry transaction advisory Zepponi & Company.

The acquisition, Concha y Toro's first in the U.S.,  included the brands Fetzer, Bonterra, Five Rivers, Jekel, Sanctuary and Little Black Dress, 1,060 acres of owned and leased vineyards in Mendocino County, wineries with production capacity of 9.5 million gallons in Hopland and 1.58 million gallons in Paso Robles, and a bottling plant.

At the time of the sale, Fetzer employed about 240. Fetzer brand sales in fiscal 2010 were $156 million on 3.1 million cases. Annual production of the Fetzer brand itself is 2.2 million cases and of the certified-organic Bonterra brand, 300,000 cases.

Concha y Toro started in 1883 and owns 23,475 acres of vineyards and exports to 135 countries. Sales in 2010 increased 5.5 percent to $799.1 million and 8.3 percent by volume to 20.5 million cases.

The sale of Fetzer didn't include Sonoma-Cutrer in Sonoma County.--Jeff Quackenbush10. Turnover in Petaluma commercial properties spurs company expansions

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The significant reset in Sonoma County commercial property values that started for distressed Petaluma office buildings in early 2010 is expected to continue to help spur business activity through the end of 2011 and beyond.

More than 1.3 million square feet of Petaluma office, flex and industrial space has changed ownership, with sales of a few hundred thousand more square feet in several buildings pending at the end of 2011. Many of the dozen and a half buildings that sold in the city were in the first six months, and many were "distressed" properties. From early 2010 through spring 2011, Equity Office gave back 18 buildings in Petaluma and Santa Rosa to lenders, which sold them to companies and organizations such as Petaluma Health Center and investors such as Basin Street Properties.“The market has totally changed in the last year,” said Jim Keegan, vice president of Keegan & Coppin/ONCOR International.

From March through June, Basin Street Properties spent roughly $21 million re-acquiring eight buildings in Petaluma's Redwood Business Park, part of a 44-building office and office-type property portfolio in Sonoma and Marin counties Basin Street sold to Equity Office in 2005 for $265 million. Basin Street sold two of them to investors, one was a 7,400-square-foot day care center and the other is a 31,000-square-foot planned Paul Mitchell Schools franchise.

As mentioned above, Enphase Energy leased 96,000 square feet in two of three top-class office buildings Basin Street acquired in June. In the third vacant building, Basin Street signed an 8,000-square-foot lease with State Farm Insurance.

Another large office lease of the year was for 40,000 square feet in RNM Properties' South McDowell Landing property at the south end of the city. That would double the size of the current 200-employee headquarters for Athleta, a division of Gap.

San Mateo-based Cornerstone Properties, which owns a large commercial property north of Santa Rosa, purchased five former Cisco Systems buildings in Petaluma at the end of 2009 then bought two Equity Office buildings in May of this year, each time for a fraction of what was paid several years ago. This has attracted the likes of Lowepro USA from Sebastopol, CrossCheck from Rohnert Park and First California Mortgage from elsewhere in Petaluma.

San Francisco-based Savoy Corp. sold three buildings totaling nearly 88,000 square feet to PB&J Acquisitions, LLC, an investor in value-add Northern California properties, in mid-June for $5.1 million, or about $58 a square foot. Savoy had the property listed for $6.5 million. It sold a 34,000-square-foot Petaluma building for about $2 million in July 2010. 

Deals for half to a third of the cost to build also brought in buyers interested in immediate or future facilities for their companies. Examples are Natural Comfort from Novato, Dharma Trading from San Rafael, Berkeley Nucleonics from San Rafael, local companies Xandex and Petaluma Farms, Paul Mitchell Schools from Sacramento and Mountanos Brothers Coffee from South San Francisco.--Jeff Quackenbush