Customers play baccarat at the Graton Resort and Casino Tuesday Nov. 5, 2013 in Rohnert Park. (Kent Porter / Press Democrat) 2013

The top 10 local business stories of 2013

CATHY BUSSEWITZ
THE PRESS DEMOCRAT

A year of economic recovery in Sonoma County brought expansions in key industries, an improving job market and major commercial developments, including the debut of a Las Vegas-style casino on the outskirts of Rohnert Park.

The wine industry enjoyed another enormous harvest, and craft beer king Lagunitas Brewing continued its rapid expansion.

The housing market improved as foreclosures dropped to a seven-year low, and local hospitals and clinics restructured operations as they prepared for the new federal health care law, which extended insurance to tens of thousands of people in Sonoma County.

Here's a look at the top local business stories of 2013, as selected by Press Democrat staff.

1) Graton Rancheria casino opens

After a decade of debates, the Federated Indians of Graton Rancheria opened its $800 million casino on the western border of Rohnert Park in November.

Spanning 340,000 square feet, it's one of the largest casinos in California. It is expected to draw 6.1 million people annually and rake in $533 million a year in gambling revenues within two years, according to a report prepared for Station Casinos, which manages the casino.

Massive crowds flocked to the casino on its opening day, with cars and busses clogging Highway 101 and determined gamblers walking across fields to get in the doors.

Agreements the tribe signed with local governments will pay Sonoma County about $9 million a year for 20 years to address negative impacts of the casino, and a total of $251 million over 20 years to Rohnert Park for public safety, education and other community services.

"It's a force to be reckoned with in gaming," said Dennis Whittlesey, a longtime Indian law attorney who has worked on numerous casino developments.

2) Housing market improves

Foreclosures dropped to a seven-year low in Sonoma County in 2013, a bit of good news in a region where 11,000 homes were lost to foreclosure in the past seven years.

For the first time since housing prices crashed, the rate of distressed home sales in Sonoma County fell to single digits in October.

More than $2.6 billion in homes and condominiums had been sold by the end of November, the highest dollar volume for the period since 2006. Home prices rose 21 percent over the course of the year, reaching a median price of $453,000 in November. With the rebound, home prices had regained almost half the ground lost when the median tumbled from a record high of $619,000 in August 2005 to a low of $305,000 in February 2009.

"We are still a ways away, but the market is slowly re-establishing equilibrium," said John Walsh, president of DataQuick, a San Diego-based information service.

3) Health care reform: Covered California debuts

Tens of thousands of North Coast residents became eligible to buy health insurance or enroll in expanded Medicaid options in October with the launch of Covered California, the state exchange created by President Barack Obama's signature health care law.

The Affordable Care Act triggered the most extensive change to the nation's health care system since Medicare and Medicaid became law in 1965. Under the new law, consumers who were previously rejected for private insurance because of a pre-existing condition are able to obtain coverage, and those who cannot afford to buy their own insurance can receive government-subsidized premiums.

But some people saw their current policies canceled because they did not meet new federal standards and others had problems signing up for insurance. The question remains whether enough people, particularly young people, will participate.

Health clinics in Sonoma County expanded to treat newly insured patients, while hospitals began cutting jobs, anticipating reductions in Medicare reimbursements and increasing competition.

"This is revolutionary," said consultant Bob Aita of Aita & Associates Insurance Marketing in Sebastopol at the time. "This law is going to change everything about health insurance in the United States."

4) Agilent announces plans to spin off its Santa Rosa division

Agilent Technologies, Sonoma County's largest high-tech employer, announced plans in September to split into two companies. One, which will keep the Agilent name, will focus on life sciences and the pharmaceutical industry. The other, which has not yet been named, will be headquartered in Santa Rosa and retain the electronic measurement business.

The change came 13 years after Agilent was spun off from Hewlett-Packard, its original company.

"Agilent announced the biggest and most profound change in our history," said Agilent CEO Bill Sullivan at the time.

The split will be completed by next November. Ron Nersesian, who ran the Santa Rosa division before he was promoted to president and COO of Agilent in 2011, will become the president and CEO of the new company.

5) Unprecedented development along 101 pumps $2 billion into economy

More than a dozen big-budget projects along the Highway 101 corridor in Sonoma County were some of the most tangible signs of the economy's growing vigor in 2013.

The projects, which pumped nearly $2 billion into the local economy and created thousands of jobs, turned the region into a giant construction site.

Developers built a casino outside Rohnert Park, two new big-box shopping centers in Petaluma, a new Sutter hospital north of Santa Rosa, and upgraded the Wells Fargo Center for the Arts.

When completed, the projects will also transform Sonoma County's transportation infrastructure, including a massive project to widen Highway 101, the construction of the SMART commuter rail line and expansion of the Charles M. Schulz-Sonoma County Airport.

"You'd have to go back at least a couple decades to find this kind of activity," said Keith Woods, chief executive officer of the North Coast Builders Exchange.

6) Unemployment drops to five-year low

Sonoma County's unemployment rate fell to a five-year low in the spring, as the tourism and wine industries added staff and consumers proved willing to indulge in their offerings.

The new casino outside Rohnert Park alone created 2,000 full-time jobs. Overall, local employers had expanded their payrolls to 183,800 jobs by November, adding 3,600 new workers over the past year. There were 15,600 unemployed job-seekers in the county, down from 19,900 a year ago.

As a result, the county enjoyed the sixth-lowest unemployment rate in the state in November, when the local jobless rate stood at 6 percent.

"The trajectory is a good one," said Ben Stone, executive director of the Sonoma County Economic Development Board.

7) Grape harvest: second great season

Harvest of Sonoma County's $580 million grape crop got off to an early start in August, making wineries scramble to move last year's vintage out of their tanks to make room for another bumper crop.

The massive crop could be as large as last year's record haul of 267,000 tons, experts predicted.

The lucky spell was felt across the county's wine regions and varietals.

"It's rare that we see two great seasons back to back," said Karissa Kruse, executive director of the Sonoma County Winegrowers.

An annual survey found that North Coast wineries and grape growers are bullish on the future amid an improving economy that has given Americans more time and money to spend on wine.

"The mood right now is much more positive than it has been in the past five years," said Robert Smiley, director of wine at the UC Davis Graduate School of Management.

8) Lagunitas Brewing continues rapid expansion

Lagunitas Brewing muscled its way into the ranks of the nation's largest craft brewers in 2013, becoming the sixth-largest craft brewer in the United States.

The company, which spent $10 million to expand its Petaluma brewery last year, has nearly tripled production over the last three years. It is in the process of opening a second brewery in Chicago, a development expected to cost $15 to $18 million.

Altogether the growth enables Lagunitas to produce 1.2 million cases of beer per year. Annual revenues for 2013 were expected to top $100 million.

"It's kind of the dawn of a new sector, and I think it's kind of cool for Sonoma County," said Stone at the Economic Development Board.

9) Cyan raises $88 million in IPO

Petaluma networking equipment maker Cyan completed its $88 million initial public offering in May, when its shares began trading on the New York Stock Exchange.

The additional capital will enable Cyan to expand its global strategy to bring its products to market, CEO Mark Floyd said.

The company, which employs about 260 people, mostly in the Petaluma area, hired 40 people in the first three months of the year.

Cyan sells software and equipment that help telephone companies, data centers and private network operators reduce the cost of moving data quickly across their networks. It has nearly doubled its sales over the past two years, to $40.4 million last year.

"For the last three years it's been clear that Cyan has been the top private manufacturer in telecom," Michael Howard, principal analyst at Infonetics Research, said in April.

10) Amy's Kitchen announces plans to open second plant in Santa Rosa

Amy's Kitchen, one of the nation's largest makers of natural frozen foods, announced plans in March to build a second manufacturing plant in Santa Rosa that would create 800 new jobs.

The Petaluma company, which already has 1,000 workers in Sonoma County, proposed the largest business expansion in the city in at least a decade.

But the company was stunned when Santa Rosa officials said the expansion could trigger up to $34 million in water and sewer permit fees. That doesn't include millions more in fees for building permits, school impacts and property rezoning.

The disclosure set off a furious effort by city officials to prevent Amy's Kitchen from moving the project to Oregon. The city is trying to help the company reduce its anticipated water use and thus its water and sewer fees.

"This is a very important part of our local economy, and we want the food industry to grow and thrive here in the region," said Carolyn Stark, executive director of Sonoma County BEST, the Santa Rosa Chamber of Commerce's public-private job creation effort.

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