Nearly bankrupt Stockton leads state in job growth

Some of the bathrooms at the Mandarin Oriental Hotel feature views. Some of the bathrooms at the Mandarin Oriental Hotel feature views. Photo: Mandarin Oriental Hotel Photo: Mandarin Oriental Hotel Image 1 of / 7 Caption Close Nearly bankrupt Stockton leads state in job growth 1 / 7 Back to Gallery

Which U.S. city teeters on the verge of bankruptcy but leads its state in job growth?

That would be Stockton.

Ground zero for the mortgage meltdown, and hoping not to become the biggest American city ever to file for Chapter 9 bankruptcy protection, Stockton is seeing a 4 percent jump in employment numbers this year, according to the Business Forecasting Center at the University of the Pacific.

"Of course, when you've been at the bottom, any climb looks impressive," cautions Jeff Michael, director of the center. Indeed, the city 80 miles east of San Francisco has a lot of digging to climb out of the hole - the center forecasts 15.2 percent unemployment for the year, and a still horrendously high 12.7 percent in 2015.

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Many of Stockton's new jobs are in construction, especially on the $800 million California Health Care Facility for state prison inmates, and additions to the Port of Stockton. Trucking and warehousing jobs are also coming back, private hospitals are hiring and some new retail stores have moved into the empty shells on many of Stockton's streets.

"Stockton still has a reason to exist, but city government needs to get its act together," said Michael, referring to the city's $977 million debt load, plus pension obligations that officials are struggling to address.

Coattails: Meanwhile, the surrounding Central Valley is also doing better, even though unemployment is likely to remain in the mid-double digits for the next several years.

"The drag from housing has bottomed out, and other mainstay industries such as agriculture and transportation are performing well," says the center's report. "We're not seeing migration from the Bay Area anymore, but there is organic population growth," added Michael.

The overall picture gets rosier as we move west. The center projects a steady decline in unemployment in the San Francisco area (including San Mateo and Marin counties) from 7.4 percent this year to 5.5 percent in 2015. Alameda and Contra Costa counties should also see employment growing at a steady pace.

"The East Bay, which has been quite the laggard, is finally showing some growth," said Michael. That includes Vallejo, which emerged from bankruptcy in November. Projected unemployment rate by 2015: 7.9 percent, which is better than the statewide projection of 8.4 percent ( www.forecast.pacific.edu).

Gung-ho: VCs in SV are feeling much better these days.

In fact, venture capitalists' confidence about the next six to 18 months "marks a major inflection point upward in sentiment," according to the latest Silicon Valley Venture Capitalist Confidence Index.

The 34 venture capitalists, surveyed by Mark Cannice, professor of entrepreneurship and innovation at USF, see "a more welcoming public financial market, providing more liquidity opportunities for their portfolio firms."

Plus, convergence across various platforms - in mobility, cloud, social media - "is fostering the development of a wide range of entrepreneurial endeavors."

One laggard: the life science sector, where investments remain "sluggish," funding for IT and medical startups in IT and medical devices "questionable," and "exogenous drivers such as an unpredictable FDA environment and a challenging reimbursement climate as payors seek to reduce healthcare costs," according to opinions offered by venture capitalists in the survey.

Overall, however, the "inflection point" may be relevant to more than just VCs' confidence. "Unprecedented shifts in society with the promulgation of mobile devices are transforming everything from commerce, social interaction and politics to medicine and wellness," said Nina Kjellson of InterWest Partners in Menlo Park.

In other words, get on board, the train is leaving. ( sfg.ly/JTXlBP)

Out with the old: The Mandarin Oriental in San Francisco's Financial District turns 25 next week, and to celebrate the hotel is undergoing a complete makeover.

Gone will be Silks restaurant - "a place for grand moments and high adventures," The Chronicle's Datebook section once pronounced - to be replaced by a 90-seat, all-day eatery serving "brasserie-style, San Francisco cuisine."

The new look, overseen by Michael Booth, owner of the San Francisco interior design firm Bamo, also will feature an Italian travertine marble lobby, 151 guest rooms, each with "custom-designed furnishings with a hint of French Deco," and seven suites with 800 square-foot landscaped terraces overlooking the city. Grand moments and high adventures indeed!

For those in town on business, 5,000 square feet of rooms for meetings and so forth are to be unveiled this summer, all high-tech enabled.

The San Francisco location is one of 27 Mandarin Oriental hotels worldwide owned by Jardine Matheson Holdings, headquartered in Hong Kong, which recorded $57 billion in revenue last year.

For more on the new eatery, Brasserie S&P, see the Inside Scoop column in Datebook.