In a parking lot next to the enormous Encino Power Plant in Carlsbad sits what may be both a harbinger of North San Diego County's economic future and a remnant of its past.
It’s a complex series of filters, pumps, tubes and storage tanks that, to make a long story short, sucks out a small part of the tumultuous sea water churning around the plant and pushes it through a host of processes that ultimately relinquish a steady flow of potable water at the other end. The system is a model of what will be built adjacent to the power plant by 2007.
Someday, the expected builders of a massive desalination plant at the site, Poseidon Resources, hope to pump out more than 56,000 acre-feet of clean drinking water a year - all of it sucked out of the small reservoir and discharge pond near the plant. That’s enough tap water to satisfy the needs of 112,000 local families. It’s also, potentially, the catalyst for more than 2,200 jobs.
And although North County is only one of the dozens of regions in the world developing drought-proof supplies of water with desalination plants, it doesn’t have to look far for the technology or the expertise.
"This area is one of the centers of knowledge, products and desalination capability in the world. If it’s not the most important, it’s definitely a major one," said Gerry Filteau, the president of the San Marcos-based engineering firm Separation Processes.
And that is only one example of the diverse industries that have roots in the region. Whether it was the military, the sun, the surf or the sand, something attracted some of the brightest technical thinkers in the United States to the northern part of San Diego County many decades ago. That infusion of mind power left a mark on the economics of the area that will probably shape the region as much as it continues to shape the world.
Aerospace engineers, who once developed the world’s most powerful and capable flying machines, now design some of the most impressive golf clubs. Nuclear, chemical and civil engineers who helped support efforts to understand the true power of the atom now have built an industry around taking salt molecules out of seawater. Others are working on biotechnological advances. Never mind that after work and on the weekends, all of North County’s thinkers can relax in one of the premier destination areas in the country.
"It’s perfect here," said Jan Sobel, the president and CEO of the Carlsbad Chamber of Commerce. "A lot of what most likely attracts so many companies is the quality of life in general - the schools, the safety and parks."
Sobel said Carlsbad has become a major hub of not only the future of water and power in much of North County, but of the sports equipment industry as well. Indeed one of the largest employers in North County is the Carlsbad-based Callaway Golf (NYSE: ELY) headquarters and manufacturing facility - more than 2,300 people work there. The Achushnet Co. and TaylorMade Golf Co. both serve the same, or related, markets and combined they employ more than 1,200 workers. But Sobel said golf was only the biggest part of a sporting industry that has exploded in the area.
Carlsbad is also home to the sports-card company UpperDeck, the sporting-goods manufacturer K2 (NYSE: KTO) and the No Fear apparel line.
She said engineers who once specialized in making thousands of tons of steel fly, now focus on making golf balls soar.
Callaway Senior Vice President Larry Dorman said the company has been cultivating deep roots in North County ever since moving its operation in 1985. In 1991 Callaway developed the innovation that should keep it here and in the world of golf. Before the company unleashed its Big Bertha driver, revenues hovered around $21 million. But in each of the next four years, the money coming in nearly doubled. Now the company attracts more than $790 million.
"The industry itself did not necessarily grow over that time," Dorman said. "But after the Big Bertha came out, other companies had to begin matching the technological advances we made. We are creating products still that are demonstrably superior and pleasingly different."
When the company moved to North County in 1985, Dorman said there was a lot of relatively inexpensive undeveloped land and a talented labor force fueled by the aerospace industry.
Dorman said that while the company is not going anywhere, undeveloped land, on the other hand, is difficult to track down.
The ocean not only attracted entrepreneurial minds, it brought in tourism and still does. La Costa Resort and Spa, whose parent company announced plans to purchase the famous Hotel Del Coronado this fall, employs more than 800 area workers. Combined with the Four Seasons Resort, Legoland and the San Diego Wild Animal Park, tourism is a dependable staple of the North County economic outlook. During peak seasons, the Wild Animal Park employs more than 800 people, according to a spokesman for the San Diego Zoo, which operates the Wild Animal Park.
But it’s technology that holds the most promise for North County. Biogen Idec. (Nasdaq: BIIB) has been anticipating the opening of its 90-acre manufacturing facility in Oceanside. Isis Pharmaceuticals (Nasdaq: ISIS) is a Carlsbad-based company and its neighbor Invitrogen Corp. (Nasdaq: IVGN) holds the title as the San Diego area’s largest biotech firm in terms of revenue. Invitrogen employs more than 2,900 people, according to Greg Geissman, a company spokesman.
Geissman said Invitrogen leaders and the rest of San Diego’s prosperous biotech community enjoy a location rich in the supplies and talent they need. "It’s a great advantage to be in close proximity to the groups producing some of the leading research in our field," Geissman said. "Of course, the business climate is excellent as is the community."
It was a tradition of research and innovation that also led the northern areas of San Diego County to become leaders of the push toward finding commercially viable and efficient ways of taking the salt out of an unlimited supply of seawater. The company General Atomics still produces a variety of products that include innovations for everything from the nuclear power industry to unmanned aerial drones for military uses. But many decades ago it had also created some of the first products that could successfully remove salt from water through a process known as reverse osmosis.
General Atomics eventually moved away from the business, leaving it to San Diego-based Koch Membrane Systems. But the people involved never left the region. The founder of Separation Processes, Dick Sudak, was one of them.
Now, at least 35 North County-based businesses either indirectly or directly manufacture more advanced reverse osmosis membranes or provide the engineering know-how to advise someone on how to put them to use, according to Poseidon. That comprises a total of 2,200 employees and $200 million in annual revenues.
Carlsbad, then, is an ideal place to embark on a water desalination project to subsidize the increasingly stressed river water supplies San Diego families and innovators have depended on for centuries. If the desalination plant is built, and negotiations although stilted at times are continuing, North San Diego County companies could share up to 70 percent of the $250 million project costs.
If that happens, water from the ocean near some of the most popular beaches in the country could pass through North San Diego-manufactured membranes that will remove its salt and send it to satisfy the trees in the Wild Animal Park, clean new golf balls at Callaway or fill the beakers in one of the thousands of biotech laboratories around North County.

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