As always, we are most appreciative to our over 135 committed article suppliers and our longtime newsletter sponsors for their continued commitment to our endeavor, and our attempt to find positive, factual and interesting economic information as it relates to the High Desert economy.
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High Desert Report A quarterly economic overview of the High Desert region affiliated with The Bradco Companies, a commercial real estate group Fall 2012 l Volume 51 The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: [email protected]Inside This Issue The Companies RADCO I wish to welcome our current, future and long standing subscribers of the 51st edition of the Bradco High Desert Report, the first and only economic overview of the High Desert region, covering the Northern portion of San Bernardino County and the Inland Empire. We more specifically address economic issues affecting the Cities of Adelanto, Barstow, Hesperia, Victorville, and the Town of Apple Valley. As always, we are most appreciative to our over 135 committed article suppliers and our longtime newsletter sponsors for their continued commitment to our endeavor, and our attempt to find positive, factual and interesting economic information as it relates to the High Desert economy. One item that the Bradco High Desert Report has always prided itself with is giving facts for people to make better decisions. Charts in the article prepared by the renowned Dr. Gobar showing the significant decrease that a residential building permits have seen in the High Desert region, are purely factual. The day will come where the High Desert will recover, but the charts are clearly intended to help decision makers make decisions over the next year, 3, 5, or 10 year period of time. Dr. Gobar, Chairman of Alfred Gobar Associates (Brea) continues to do such an outstanding job of depicting the issues affecting the High Desert region and helping us have a better understanding of where we are moving. We welcome Mr. Carlos Rodriguez, Chief Executive Officer of Building Industry Association (BIA/Baldy View Chapter), with his article, as well as Senator Jean Fuller regarding the very controversial Fire Prevention “Fee” that is of major discussion in the High Desert region and in other places throughout the state. I wish to thank Brittany A. Ortega of the State of California Employment Development Department for its ongoing assistance relative to employment date etc. Ronald J. Barbieri, Ph.D., CPA, Senior Vice President of The Bradco Companies has included (5) five articles in this edition which discuss population, industrial growth, the expansion of the Panama Canal, local housing price increases and the snapshot of the High Desert and Southern California commercial and industrial real estate markets. What is interesting about the population base that we all use to describe the area we consider the High Desert region, and the article about population that Real Estate Market Outlook .................. 2 Fire Prevention “Fee”............................. 7 Employment Development .................... 7 Population Trends in the High Desert .. 9 Reviving California is Going to Take a Revolution............................ 10 Expansion of the Panama Canal Will Not Have a Negative Effect ..... 11 Mojave Desert AQMD ........................... 12 Shortage of Homes for Sale Have Casued Significant Price Increase ... 14 County is Moving Forward with Major Construction Projects ........... 15 Academy for Grassroots Organizations ...................................17 Victor Valley Community College ...... 18 MWA is Ahead of the Curve ................ 20 Industrial Markest in Southern California Experienced Substantial Absorption in Recent Years ............ 21 SanBag High Desert Transportation Projects Moving Forward ................ 23 Snapshot of Commerical & Industrial Real Estate Markets ............................ 26 Demand for Industrial Space in the High Desert has Increase Substantially ............ 27 Federal, State and SoCal Leaders Seeking a . Partner In The IE................................... 28 City Update Adelanto .......................................... 30 Town of Apple Valley ......................31 Barstow ............................................ 32 Hesperia........................................... 34 Victorville ........................................ 35 To receive your FREE quarterly online subscription to The Bradco High Desert Report register today at: www.TheBradcoCompanies.com/register continued on page 29
Transcript
High Desert ReportA quarterly economic overview of the High Desert regionaffiliated with The Bradco Companies, a commercial real estate group
Fall 2012 l Volume 51
The Bradco High Desert Report760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: [email protected]
Inside This Issue
The
CompaniesRADCO
I wish to welcome our current, future and long standing subscribers of the 51st edition of the Bradco High Desert Report, the first and only economic overview of the High Desert region, covering the Northern portion of San Bernardino County and the Inland Empire. We more specifically address economic issues affecting the Cities of Adelanto, Barstow, Hesperia, Victorville, and the Town of Apple Valley.
As always, we are most appreciative to our over 135 committed article suppliers and our longtime newsletter sponsors for their continued commitment to our endeavor, and our attempt to find positive, factual and interesting economic information as it relates to the High Desert economy.
One item that the Bradco High Desert Report has always prided itself with is giving facts for people to make better decisions. Charts in the article prepared by the renowned Dr. Gobar showing the significant decrease that a residential building permits have seen in the High Desert region, are purely factual. The day will come where the High Desert will recover, but the charts are clearly intended to help decision makers make decisions over the next year, 3, 5, or 10 year period of time.
Dr. Gobar, Chairman of Alfred Gobar Associates (Brea) continues to do such an outstanding job of depicting the issues affecting the High Desert region and helping us have a better understanding of where we are moving.
We welcome Mr. Carlos Rodriguez, Chief Executive Officer of Building Industry Association (BIA/Baldy View Chapter), with his article, as well as Senator Jean Fuller regarding the very controversial Fire Prevention “Fee” that is of major discussion in the High Desert region and in other places throughout the state. I wish to thank Brittany A. Ortega of the State of California Employment Development Department for its ongoing assistance relative to employment date etc.
Ronald J. Barbieri, Ph.D., CPA, Senior Vice President of The Bradco Companies has included (5) five articles in this edition which discuss population, industrial growth, the expansion of the Panama Canal, local housing price increases and the snapshot of the High Desert and Southern California commercial and industrial real estate markets. What is interesting about the population base that we all use to describe the area we consider the High Desert region, and the article about population that
Real Estate Market Outlook .................. 2Fire Prevention “Fee” ............................. 7Employment Development .................... 7Population Trends in the High Desert .. 9Reviving California is Going to Take a Revolution ............................ 10Expansion of the Panama Canal Will Not Have a Negative Effect ..... 11Mojave Desert AQMD ........................... 12Shortage of Homes for Sale Have Casued Significant Price Increase ... 14County is Moving Forward with Major Construction Projects ........... 15Academy for Grassroots Organizations ...................................17Victor Valley Community College ...... 18MWA is Ahead of the Curve ................ 20Industrial Markest in Southern California Experienced Substantial Absorption in Recent Years ............ 21SanBag High Desert Transportation Projects Moving Forward ................ 23Snapshot of Commerical & Industrial Real Estate Markets ............................ 26Demand for Industrial Space in the High Desert has Increase Substantially ............ 27Federal, State and SoCal Leaders Seeking a . Partner In The IE ...................................28City Update Adelanto .......................................... 30 Town of Apple Valley ......................31 Barstow ............................................ 32 Hesperia ........................................... 34 Victorville ........................................ 35
To receive your FREE quarterly online subscription toThe Bradco High Desert Report register today at:
www.TheBradcoCompanies.com/register
continued on page 29
High Desert ReportA quarterly economic overview
The Bradco High Desert Report760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: [email protected]
EXHIBIT ATOTAL NONAGRICULTURAL EMPLOYMENT INDEX - SOUTHERN CALIFORNIA
JUNE 1990 - DEC 1995 vs. DEC 2006 - AUG 2012
Source: California EDD (Employment Development Department) and Alfred Gobar Associates
`
Real Estate Market OutlookBy Dr. Alfred J. Gobar
Chairman, Alfred Gobar AssociatesOver the past 50 years, increase in nonagricultural wage and salary employment as reported by public agencies has correlated closely with household formation and, therefore, housing occupancy. Employment growth is a good thing for real estate markets. An index of nonagricultural wage and salary employment for Southern California as a whole (Ventura, Los Angeles, Orange, Riverside, San Bernardino, and San Diego Counties) is illustrated in Exhibit A in comparison with a similar index based on the 1990 recession. As indicated, employment declined more in percentage terms in the current recession than it did two decades ago, and the recovery has been relatively feeble. Those of us interested in the High Desert real estate market, therefore, should have patience in order to identify attractive real estate market opportunities. From August 2007 until August 2009 (about the bottom of the decline in nonagricultural wage and salary employment), total job base in the six-County Southern California area decreased by about 800,000 jobs. Recovery since August 2009 through August 2012 has amounted to almost 200,000 jobs. Currently, therefore, the total employment base is about 600,000 jobs below the peak prior to the onset of the current recession. Theoretically this amounts to an improvement in demand from the low point of the cycle
on the order of 135,000 dwelling units. Concurrently, however, despite modest new construction, approximately 140,000 new units have been added or are in the pipeline to be added to the total housing stock in Southern California; i.e., new development is at about the rate of demand growth.
There may be a light at the end of the tunnel. It is likely, however, that we are looking into a fairly long tunnel.
During the twelve months ended August
2012, nonagricultural wage and salary employment as reported by the California Employment Development Department for the six-county area grew by approximately 158,000 jobs. This is a significant increase. Employment trends for California recently have been outperforming the general trends for the U.S. overall.
Employment growth over the twelve months ended August 2012 shows increases in most sectors including construction. Of significant interest is the increase
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Real Estate Market OutlookContinued
in employment in the finance sector amounting to 9.2 percent of the overall job growth. Within that category, employment in real estate-related activities—rental and leasing, etc.—amounted to 4.9 percent of the 158,000 jobs increase. The finance sector represents less than 6.0 percent of Southern California’s employment base. The real estate portion of the finance sector amounts to about 2.0 percent of the total base. These categories of employment, therefore, are growing substantially faster than the general economy and faster than their overall role in the economy.
Employment in leisure and hospitality accounted for a substantial portion of job growth during the twelve months ended August 2012, amounting to 23.3 percent of the increase. This sector accounts for less than 12.0 percent of the total employment base in the six-county area.
Government employment grew little during the most recent twelve months for which data are available, accounting for 2.2 percent of the net increase. Overall, government employment is about 15.0 percent of the total employment base in Southern California. If government employment were to be increasing consistent with the other categories, total increase in nonagricultural wage and salary employment over the twelve-month interval would have been above the long-term average for Southern California as a whole and job growth would have exceeded the long-term average trend.
When Harry Truman was President, he was said to have pushed for “one-handed economists” so that economists could avoid tempering their projections by saying “on the other hand.” Similarly, we should point out that for the past several years, employment estimates from government agencies have been subject to revision and to rather erratic behavior on a month-to-month basis contributing to some queasiness regarding the validity of the data. Since the recent employment figures have been so positive, however, until they are revised, we will continue to act like we fully trust their validity.
In the most recent twelve-month data, the most significant growth in nonagricultural wage and salary employment occurred in Los Angeles County, followed by San Diego County, Orange County, and the Inland Empire, in that order. The level of nonagricultural wage and salary employment in Ventura County declined slightly during the twelve-month interval.
The pattern of housing development in Southern California derivative of building permit activity for 2011 is fairly consistent with the relative growth in nonagricultural wage and salary employment among the five study areas (Riverside and San Bernardino Counties are grouped together as the “Inland Empire”). A comparison of the percent of nonagricultural wage and salary employment growth accounted for by each of the five areas relative to the percent of new units authorized by permit in each of the five areas is shown below:
The specific data indicate that San
Bernardino County represented 5.9 percent of the new units authorized during 2011 and Riverside County for 13.3 percent. Riverside County’s housing market benefits from its proximity to San Diego County, which experienced the recession sooner than the rest of Southern California and has been doing somewhat better than much of the rest of Southern California. In addition, Riverside County serves a national market for second homes and retirees.
The trend of building permit activity for residential development in Southern California since 1985 is illustrated in Exhibit B.
There has been a modest increase in residential building permit activity since 2009. Actual numbers of new units authorized by permit since 1985 for Southern California overall are summarized in Exhibit C. Projections for full-year 2012 suggest building permit
Source: Bureau of the Census - Construction Statistics Division; Alfred Gobar Associates.
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Real Estate Market OutlookContinued
activity for Southern California will total about 29,000 units. Interestingly, this is roughly 14.0 percent of the level of building permit activity observed in 1986 when Southern California was emerging from the 1980 recession. It is also interesting to note that during 1985—at the end of the 1980’s recession—building permit activity in Southern California totaled nearly 150,000 new units, while currently in 2012, approximately three years after the bottom of the current recession, building permit activity is only 20.0 percent of that level at about 30,000 units a year.
Although the 1980’s recession had the special features of extraordinarily high inflation and interest rates, the recovery from the current recession has been minimal, suggesting that economic growth that occurred during the 1980s supported a strengthening housing and real estate market, while the tepid economic growth observed currently has obviously not resulted in similar real estate sector activity.
Exhibit D shows the pattern of residential building permit activity on the High Desert. At the peak of activity, more than 8,000 units a year were being authorized by permit. Recently, as shown in Exhibit E, overall residential building permit activity has been on the order of less than 250 units per year in 2011 and likely to be substantially less than 1,000 new units for 2012.
The figures in Exhibit E are influenced substantially by 205 multi-family units authorized by permit in Victorville. Absent this atypical level of activity in multi-family housing construction, overall building permit activity on the High Desert would probably be on the order of 350 units for the full year, or less than 4.0 percent of the more than 8,000 new units authorized in 2005.
Based on the average building permit value per unit, much of the new construction of single-family housing on the High Desert recently has apparently been custom homes. This is not a product that lends
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itself to high-volume activity. Much of the real estate activity observed recently has been of a qualitative nature—purchase of distressed assets that lend themselves to be reworked for enhanced value. The whole process of flipping foreclosures has attracted increasing levels of interest on the part of real estate professionals who have limited opportunities in tract developments, land entitlement, or other large-scale endeavors which typify opportunities in a strong market. Although interest rates are at record lows—a factor which should encourage real estate development or real estate investment—uncertainty associated with the tax environment, the risk of a double-dip recession, and general unease about an uncertain fiscal policy in light of the potentially inflationary impact of the current monetary policy contribute to an
(which is the largest proportion of the real estate market) have been overexploited because of the interference of government policy, making this recession atypical relative to past experience. Basically, we have already shot that arrow and no longer have it in our quiver. This implies that the recovery is likely to continue to be slow, and that the real estate market will not begin to be vibrant for quite some time. Opportunities, therefore, will continue to be in rearranging real estate assets better to conform to the demand profile or exploiting market imperfections associated with limited understanding of the characteristics of demand and supply for real estate product. Raw demand is not likely to drive a strong real estate market for a number of years.
aura of uncertainty that makes real estate decisions particularly difficult, even for those intrepid individuals who somehow chose to make their living in this field.
One thing that makes this recession different from previous ones is that heretofore we generally relied on the housing market to lead the country into an economic recovery. Because of efforts through the Community Reinvestment Act and encouragement of Fanny Mae and Freddie Mac, we induced marginal buyers into real estate ownership prior to the recession. The reservoir of pent-up demand represented by potential first-time homebuyers was severely eroded and is not readily available to stimulate an economic recovery associated with lower interest rates and more moderate-priced housing. Significant portions of the housing market
Real Estate Market OutlookContinued
APPENDIX ERESIDENTIAL BUILDING PERMIT SUMMARY (UNITS)
Source: San Bernardino County Land Management Department, Office of Building and Safety; Bureau of the Census - Construction Statistics Division.
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These investments benefit everyone by keeping us safe and increasing the property values of existing homes and businesses surrounding new home communities.
There’s still a long road ahead to a full economic recovery. However, the recent signs of improvement in the housing market provide us with encouraging news about the prospects of increased local job creation and enhancements to local infrastructure improvements. While the market is still on the mend, the Building Industry Association Baldy View Chapter will remain steadfast in our efforts to work with elected leaders at every level of government to find public policy solutions to help us back on the pathway to prosperity.
The Building Industry Association of Southern California, is a non-profit regional trade association that represents more than 1,000 member companies within a six county region. Together, BIA members build most of the homes and communities throughout the same six-county region. For more information about the Baldy View Chapter go to www.biabuild.com
Some Encouraging Signs on the Home FrontBy Carlos Rodriguez, Chief Executive Officer
Building Industry Association (BIA) Baldy View Chapter
After years of cautious optimism, home building professionals are beginning to see signs of improvement in Southern California’s housing markets. While there is still a long road to a full recovery, the good news is Southern California home sales rose to their highest level in six years while prices hit a four-year high in August.
Data Quick reports that the number of homes sold increased more than 14 percent in August to more than 22,000 compared to the same period last year. The median price for new and existing houses and condos in the six-county region rose nearly 11 percent to $309,000 last month compared to August 2011. Last month’s median price was the highest since the median was $330,000 in August 2008. Experts say the housing market is fueled by low mortgage rates, more mid- to high-end deals, and near-record levels of investor and cash buying. Likewise, prices have been lifted partly by fewer sales of foreclosed homes.
Locally, communities located within the Victor Valley market have also experienced an estimated 4% increase in the median home pricing between July 2011 and July 2012 from approximately $112,400 to $117,100. If these figures continue to improve in the fourth quarter of this year and throughout 2013, then that’s great news for the outlook for a potential economic recovery.
The simple fact remains that an improved housing market will lead us out of economic recession. According to the report The Economic Benefits of Housing in California prepared by the Strategic Economic Research Center,
in 2010 new home construction contributed over $13.8 billion per year and supported nearly 77,000 jobs in California in 2010. Over one-half of the economic output (about $7.8 billion) was directly the result of new housing construction and another $6.1 billion was generated by those sectors which supply goods and services to the residential construction industry “as well as the spending activities of the employees of the construction industry and its supplier sectors.”
The report went on to say that every dollar spent on new housing construction in California generated 80 cents in total economic activity while each job created through residential construction supported an additional 1.2 jobs in related businesses.
Because new homes have an assured longer life, appraisals are generally higher than on comparable resale homes and new homes are more likely to sell for a comparatively higher value in the future. This results in enhanced property tax revenue streams for our cities and county. That’s also good news for local and county government in desperate need of funding for quality of life services.
New home construction also funds new infrastructure such as streets, s c h o o l s , p a r k s , l i b r a r i e s along with fees for public safety such as police and fire services.
Proud to be a partof the
High Desert Community
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a budget problem that came about as a result of overspending. There is nothing about this tax that will provide better fire protection or prevention for property owners. It was done simply to balance our state budget, and that is wrong, and in this case, illegal.If you received a notice from the State Board of Equalization (BOE) and believe you have been billed in error or the “fee” amount calculated is incorrect, it’s important you petition the California Department of Forestry and Fire Protection(CAL FIRE) for a redetermination of the amount determined to be due, using a Fire Prevention Fee Petition for Redetermination form. You can find the petition form by visiting www.firepreventionfee.orgor contacting the Fire Prevention Fee Service Center at
1-888-310-6447. A list of frequently asked questions and answers can also be found on thewww.firepreventionfee.org website.Please keep in mind that you have 30 days to pay and appeal this fee, so it is important that you take action as soon as possible.In the meantime, there are taxpayer advocacy groups like the Howard Jarvis Taxpayers Association that are closely following this issue and are preparing to file a lawsuit to stop this tax. I will be keeping a close eye on their activity while updating you, the constituents, on their progress. To ensure that you receive a refund, should this lawsuit prove successful, I strongly encourage you to file the redetermination form.
My office has been overwhelmed with calls and questions about notices in the mail that they must pay a fire prevention “fee.” In July 2011, Governor Brown signed into law AB X1 29. The bill established a fire prevention “fee” for homes within the State Responsibility Area (SRA), an area that encompasses 31 million acres and approximately 825,000 homes.In the eyes of many, myself included, this “fee” is really a tax. Because they could not persuade the required two-thirds of the Legislature to vote for a tax increase, the majority party instead re-labeled it a “fee,” thereby requiring only a simple majority vote for passage. The majority party in Sacramento used verbal gymnastics to twist and turn a tax increase into law.This “fee” was passed to help backfill
Fire Prevention “Fee”By: Senator Jean Fuller, California Senate District 18
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Employment Development DepartmentBy: Brittany A. Ortega, Employment Program Representative
2012 unemployment rates are shown in the chart below. The rates shown are National, State of California, San Bernardino County, and the High Desert Region.
It appears that 2012, so far has been a year of steady unemployment for most of the nation as well as California. The High Desert cities had a higher
unemployment rate for the months of the year shown than either the nation or the state.
The past four months of 2012 did show a slight downward slope in unemployment rates, which we hope will continue throughout the remainder of 2012. The data shows that it is trending in a more favorable direction
for the economic growth of California, San Bernardino County, and the High Desert Communities.
Contributed by the staff of the EDD Workforce Services office in Victorville. Please contact (760) 241-1682 for further information.
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The Population Of The High Has Increased Since The 2010 Census And IsProjected To Continue Increasing Through 2016
By Ronald J. Barbieri, Ph.D., CPA - The Bradco Companies
In order for home and land values to substantially appreciate in the High Desert over the next five years the area’s population must continue to grow at a moderate rate. The greater the growth rate the greater will be the rate of appreciation. The population of the High Desert peaked in 2008. As of January 1, 2009 Nielsen/Claritas(Nielsen) estimated that the population of the greater Victor Valley-Barstow area was 443,516. During the next 27 months the number of individuals living in the High Desert declined by 13,250. By the time of the April 1, 2010 U.S. Census the population was only 430,250. Since then there are indications the population of the greater five city area has increased. Nielsen estimated that as of January 1, 2012, the population of the High Desert was 446,950, which would represent an expansion of 16,684 during the 21months after the U. S. Census.
During the four year period from the beginning of 2009 through the end of 2011, Nielsen estimated the High Desert completely recovered the population it had lost during the last recession and actually added an additional 3,434 individuals. Nielsen also projected the population of the High Desert would continue to expand by 40,607 over the five year period ending January 1, 2017. This reflects an average annual population growth of 8,121. During the three year period 2004 through 2006 the population of the High Desert increased by approximately 25,000 per year. Although the expected population growth is only a third of what was experienced during the last housing bubble, it is significantly positive; and it has been sufficient to stabilize the residential housing markets in the High Desert, and to enable Taxable Retail
Sales to increase in all of the last eight economic quarters.
The accompanying table depicts the same population information for each of the eight counties in Southern California, the state of California and the 21 ZIP code areas in the High Desert. At the time of the census, the Inland Empire had a population of 4,224,851,
which reflected an increase of 7,999 from January 1, 2009. San Bernardino County suffered a loss of 32,260 while Riverside County gained 40,259. During that same period, Los Angeles County experienced a decline of (336,252) and Orange County lost (58,343), while San Diego expanded by 30,694. Ventura, Imperial, and Santa Barbara Counties
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SUMMARY OF POPULATION LEVELS AND CHANGES IN POPULATION BASED ON NIELSEN-CLARITAS ESTIMATES AND THE 2010 CENSUS
Claritas Population C 4/1/2010 Claritas Claritas Projected Annualized
Apple Valley Zip Code 92307 40,817 (3,187) 37,630 1,148 38,778 (2,039) 41,015 2,237 447 Apple Valley Zip Code 92308 41,272 (1,435) 39,837 937 40,774 (498) 44,275 3,501 700
Total - Apple Valley 82,089 (4,622) 77,467 2,085 79,552 (2,537) 85,290 5,738 1,148 Lucerne Valley 92356 6,348 107 6,455 177 6,632 284 7,034 402 80
Apple Valley/Lucerne Valley 88,437 (4,515) 83,922 2,262 86,184 (2,253) 92,324 6,140 1,228
California 37,559,728 (305,772) 37,253,956 464,337 37,718,293 158,565 39,018,295 1,300,002 260,000
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The Population Of The High Has Increased Since The 2010 Census And IsProjected To Continue Increasing Through 2016
Continuedall experienced increases in population. During the 27 months prior to the U.S. Census Southern California lost 340,571, while the population of the State of California only declined by 305,772. Hence, the rest of the state actually grew by approximately 35,000. At the time of the census, the state had a population of 37,253,956 of which 21,570,742 were in Southern California.
During the 21 months after the census, the population of the Inland Empire increased by 130,228, while the three coastal counties of Los Angeles, Orange, and San Diego only increased by 105,793. The population of Southern California increased by 252,261, while California grew by 464,337.
The five-year forecast by Nielsen estimates the Inland Empire will be the fastest growing region in Southern California. During the period ending 1/1/2017 the Inland Empire is projected to increase by 357,903, of which San Bernardino County would capture 112,771 of the increase and Riverside County 245,132. This reflects annual county growth rate of 22,554 and 49,026 respectively. During that same 5-year period, Los Angeles County is forecasted to increase by 24,635 per year, Orange County by 15,528, and San Diego County by 20,533. Nielsen estimates Southern California will experience an average annual increase of 141,455 compared to an average annual increase of 260,000 for the entire state.
The U. S. Census Bureau estimated that the population of the State of California increased by 93,000 for the three months immediately after the 2010 Census, and by 354,000 for the year ending July1, 2011. Nielsen’s annual average growth rate of 260,000 for the five year period appears to be a conservative forecast, in
that it is 94,000 less than the most recent estimates by the U.S. Census Bureau.
The five cities in the High Desert experienced different population trends during the last recession and the subsequent slow economic recovery. The City of Adelanto and its surrounding ZIP code had significant population growth both before and after the U.S. Census. For the four year period ending January 1, 2012 it grew by 2,597 to 34,224. Households are attracted to Adelanto because it has the lowest median home prices of any of the cities within commuting distance to the Los Angeles Basin. Nielsen forecasts an average annual population growth of 755 for the 5-year period ending with 2016.
The two ZIP codes associated with the Town of Apple Valley lost 4,622 inhabitants during the 27 months prior to the U.S. Census; but in the 21 months following it the area experienced a rebound of 2,085 in the population. As of 1/1/2012, Nielsen estimated the Town of Apple Valley had a population of 79,552, which represent a net decline of 2,537 over the four year period. The Town is projected to experience an average annual population growth of 1,148 over the five year period beginning with 2012.
The Barstow ZIP code area lost 1,611 inhabitants from the beginning of 2009 to the end of 2011. Almost the entire decline in population occurred prior to the census. The population as of the start of 2012 was 31,846. Nielsen estimates the population of Barstow will only increase by 34 inhabitants per year for the 5-year forecasting horizon.
The City of Hesperia and the Oak Hills area lost 3,224 from the beginning of 2009 to the Census; but saw a population increase of 3,980 after the census. As
of 1/1/2012 the area had a population of 103,454, or 746 higher than the pre-recession level. The Hesperia-Oak Hills area is projected to have an annual average growth of 2,184 for the five year period.
The three ZIP codes that include the City of Victorville had a decline in population of 4,267 before the census; but experienced an increase of 6,309 after it, which resulted in a net population gain of 2,042 for the four years ending January 1, 2012. As of that date the population was 136, 794. Nielsen forecasts an average yearly population increase of 3,497 for the Greater Victorville Area through 2016.
All the cities in the High Desert, except the Greater Barstow Area, have experienced significant population growth since the U. S. Census; and Nielsen is forecasting solid growth for the five years beginning with 2012. A substantial greater portion of the households in the cities of Adelanto, Hesperia and Victorville have at least one member who commutes to the Los Angeles Basin for employment than was the case for the Town of Apple Valley. A greater percentage of the Town’s employees worked in the High Desert and in residential construction, real estate and finance, which have experienced substantial declines since the start of the last recession. Consequently, it is not surprising that the Town of Apple Valley experienced a greater decrease in population prior to the Census than the other three cities in the Victor Valley Area. Since then the Town has experienced an increase in population similar to the other three cities.
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region, they create a hole in the budget, which always disproportionally affects education, the largest state expense.
Instead of trying to attract new businesses or incentivize employers to hire people, California is literally extorting billions of dollars from companies under the guise of “Cap & Trade.” And what are they going to do with all this new-found money? Are they going to pay down the deficit or restore K-12 funds? No. Instead, the Governor just signed AB1532, removing all constraint on how those funds can be used. No constraint. That describes the legislature’s actions through the last session. AB1532 is a recipe to fund every hare-brained scheme and pet project they can dream up, all under the guise of reducing greenhouse gasses.
The inescapable reality in California is that no matter what business you are in, government, not greenhouse gas, is the greatest threat to your livelihood. The good news is that we can change our government. The founders created a peaceful process of revolution that takes place every 2 to 4 years. Beginning in November 2012, I believe the people will confound the experts and reject these wrong-headed policies that threaten to strangle our state.
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him this year. Among them was a brand new tax on timber, which, of course, he signed. This means that the Sacramento majority and the Governor, both looking at double-digit unemployment and a state that is hemorrhaging businesses, decided that taxing the literal building block of the recovery was the answer.
I disagree.
I regularly have the pleasure of meeting business owners from across the state. Recently, a gentleman explained to me that because of California’s heavy regulatory hand, he is unable to expand his business and hire more employees, although he would otherwise do so. In the midst of the greatest recession since the Great Depression, it is a devastating and offensive reality. It’s offensive because it is 100% preventable. The vast majority of business owners in almost every industry tell me that their number one problem is not the economy; it’s government interference.
While other states are rolling out the red carpet for businesses to open or expand, California taxes materials, penalizes energy users (aka manufacturers) and punishes production. These backwards policies have chased business owners out of our state, with manufacturers leading the charge. It’s as if the so-called leaders of our state don’t want anything to be built in California! When they drive stable, high-wage jobs out of our
“You can send everyone else home; this is my job.”
That is what a woman told an employer when interviewing for a job that received hundreds of applicants right here in San Bernardino County. When asked why she was so confident, the woman told her interviewer that she wanted it more than anyone else - that unless she found work that day, she and her young son would be living out of their car.
She isn’t alone.
When I was walking door-to-door meeting constituents, one man stepped away from our conversation mid-sentence to take a phone call, then rushed out the door and took off in his car. His wife nearly broke out into tears explaining that he got a call offering a half-day’s work. They had been living on a wing and a prayer, hoping against hope to keep their home, and every little job was a godsend. I wish every elected official in this state could have stood with me on that porch. These are the people we represent. We were not sent there for the lobbyists and special interests who try to buy power.
People all over this state are doing everything they can to get back to work. I wish I could say the same for the legislature. Instead, the people who are supposed to represent us are doing everything they can to stay in the good graces of the green police and union bosses to keep their pet projects running. They have done so at the expense of our business climate, job market and overall economic health.
In the last week of session, the Assembly tried to pass 550 new bills in just 5 days. Most Californians don’t think we need any new laws at all. Governor Brown just finished going through the mess of hundreds of bills the Legislature sent
Reviving California Is Going to Take a RevolutionBy Assemblyman Tim Donnelly, 59th District
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Panama Canal will have on the twin ports of Los Angeles and Long Beach. Nevertheless, the article, which is on The Bradco Companies website, makes a convincing case that the decline in the level of imports handled through the twin Southern California ports, is not likely to be much greater than 10%.
Even if the Ports of Los Angeles and Long Beach were to experience a 10% decline in volume because of the expansion of the Panama Canal it is not likely that such a decline in container volume would have any significant negative impact on the demand for industrial warehousing space in Southern California for following three reasons.
First, approximately 2/3 of the inbound containers that are handled by the Southern California ports are loaded on trains or trucks and are transported to the east. The containers placed on trains are hauled more than 1,200 miles because that is the distance at which the cost of shipping by train before transferring the containers to trucks become less than the cost of loading the containers directly on trucks and hauling them to their final destination. Even if the containers transported by trains experience some reduction in traffic it would not impact the demand for industrial space in Southern California.
Second, the expansion of the Panama Canal will not have any impact on the containers that are hauled east by truck because it would not make any economic sense to ship the containers to Texas and then backhaul them west to their destination points that are within 1,200 miles of Los Angeles. Containers transported from the ports to the east by truck do not create any demand for warehousing space in Southern California; nevertheless, they are one of the factors motivating the Los Angeles
by the canal will offset much of the cost savings of using the larger container vessels. Also the West Coast carriers, ports and railroads have the advantage of being able to differentiate pricing by market segment and could lower prices for less premium service with slower transit times if they feel pressure from the all-water service going through the Panama Canal.
Fourth, the all water service via the canal,though less expensive,can be one to two weeks slowerthat transcontinental intermodal transport. High-value or perishable products that must quickly get to market will continue to rely on the faster transit times available through the West Coast corridor. Finally, the article also notes that by 2015 only the four ports of Norfolk, New York-New Jersey, Baltimore and Miami will have the 50-foot deep channels and berths capable of handling the largest vessels. While many of the ports are competing for federal and state funds to dredge channels and increase railroad capacity most will have a difficult time securing adequate funds because they will not have the shipping volumes to justify the required infrastructure investment. Whereas, the West Coast ports already have the infrastructure in place, and have the container volumes to justify adding additional infrastructure.
The articles concludes that the ports of Los Angeles and Long Beach could lose up to 10% of their volume to East Coast ports serving the Ohio River Valley or gain a few percentage points in market share depending on how shippers respond to the expansion of the Panama Canal. What is apparent from reading the article is that there are a number of offsetting factors that make it difficult to determine with precision the level of impact the expansion of the
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The completion of a third set of locks in the Panama Canal by 2015 will enable container vessels capable of carrying up to 12,000TEU’s of containers to pass through the canal and deliver goods from China and other countries in the Far East directly to eastern half of the United States via East and Gulf coast ports. The conventional wisdom is that this will substantially reduce the flow of in-bound containers through the Ports of Los Angeles and Long Beach. An article titled: “Panama Canal: Myths and Misconceptions” that appeared in the May 2012 issue of the American Shipper argues that the opening of the third set of locks in the Panama Canal will only have a minimal impact on the volume of imports entering through the twin Southern California ports.
This conclusion is based on the following observations discussed in depth in the article: First, there are few, non-bulk products that are not shipped by containers; so there is little growth from the conversion of loose cargo to containers. Second,the amount of outsourcing by U.S. manufacturers has already been maximized to the greatest extent possible. The relocation of manufacturing from Canada and Mexico to China was mostly completed during the last decade; and there are an increasing number of companies that have begun to relocated production back to Mexico and the United States, because of issues related to cost, quality control and time-to-market. The article claims analysts are now predicting slow growth and more trade volatility with competition among ports for container throughput becoming a zero sum game of winners and losers. A third point made in the article that shippers will not realize any significant cost savings due to the shipping of goods through the Panama Canal because the tolls charged
continued on page 12
The Expansion Of The Panama Canal Will Not Have A Negative Effect On The Demand For Industial Space In Southern California
By Ronald J. Barbieri, Ph.D., CPA - The Bradco Companies
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is funded through vehicle registrations fees, which the local regulatory air agency uses to support programs that reduce air pollution from motor vehicles, as required by law. Public and private entities are encouraged to submit proposals either as sole or joint applicants. Proposals will be accepted through December 3, 2012 at 5:00PM.
Approximately $775,000 is also available through the state-funded Carl Moyer Program, which provides grants for projects that reduce emissions from heavy-duty vehicles and other mobile diesel equipment operated within the MDAQMD’s boundaries. Under the Moyer program, monies are disbursed to local entities via participating air districts to reimburse the partial cost of upgrading or replacing existing equipment with lower- emission technology. Small on-road fleets, small off-road compression ignited fleets, agricultural irrigation pumps and certain off-road large spark-ignited engines and locomotives are eligible for repower or retrofit through the program.
Applications for the Moyer program will be accepted continuously on a first-come, first-served basis until available funding is exhausted.
To download a Call for Projects packet for the AB2766 program or to find out more about Moyer grants, visit the MDAQMD website at www.mdaqmd.ca.gov. For additional information, call (760) 245-1661, ext. 1885
Metropolitan Transit Authority to get the E220 Freeway from the City of Palmdale, CA to the I-15 freeway in the City of Victorville, CA completed ASAP. The construction of the E220 is by far the least expensive solution to get trucks from the ports of Long Beach and Los Angeles to the I-15 Freeway heading east. The E220 is also expected to relieve congestion on I-10, I-210, I-15 and the 60 Freeways in the Los Angeles Basin and therefore mitigate several environmental and congestion problems.
One third of the inbound containers at the ports of Los Angeles and Long Beach are transported by truck from the ports to industrial firms in the Los Angeles Basin for local distribution, inventory storage, or for use in manufacturing. None of these will be impacted by the addition of a third set of locks in the Panama Canal.
The high levels of Net Absorption in the Inland Empire by large industrial users and tenants is further confirmation that Southern California role as a warehousing, distribution and manufacturing center will not be negatively impacted by the expansion of the Panama Canal.
The Mojave Desert Air Quality Management District is currently accepting proposals for projects that reduce smog forming-emissions from heavy-duty vehicles and equipment and other mobile sources operated within the District’s jurisdiction, which encompasses the High Desert portion of San Bernardino County and Riverside County’s Palo Verde Valley.
Approximately $575,000 in AB2766 grant program funds are available to public or private entities for projects that reduce emissions from mobile sources, which account for more than 60% of air pollutant emissions gauged in the High Desert. Eligible projects include transit and parking management projects, demonstration projects in telecommuting, videoconferencing, and alternative fuel vehicles, electric/alternative fuel vehicle infrastructure development, and public education programs. The incremental cost of purchasing or leasing clean fuel/electric vehicles or repowering existing vehicles to operate on alternative fuel may also be eligible for funding in an amount not to exceed 25% of the total project cost.
In 2011, $138,000 in AB2766 grant funds was awarded to the City of Victorville for the La Mesa/Nisqually Interchange Traffic Signal Synchronization Project. In 2002, the City of Barstow received a $450,000 grant toward the construction of a Liquefied Natural Gas/Compressed Natural Gas station within city limits.
The AB2766 competitive grant program
Mojave Desert AQMD Offering Over $1.3 Million In Mobile Emission Reduction Grants
By Violette Roberts, Community Relations & Education Manager
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The Expansion Of The Panama Canal...
Continued
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REO listings. The inventory for Short Sale properties that could be sold in 1.1 months at the current rate of sales, while the ratio of supply to demand was 2.2 months for Standard Sales.
REO and Short Sales accounted for 53% of the transactions in September
During the 2004 -2005 housing bubble, 600 new homes were sold each month in the Victor Valley area in addition to 500 previously owned homes. The vacancy level was low and builders were straining to meet demand, which was artificiality inflated by the lax lending standards fostered by the federal government through Freddie Mac and Fanny Mae. The median price for previously owned single family homes in the Victor Valley area peaked in February 2006 at $322,000. By April 2009 the median price had declined approximately 68% to $103,000, which was the low point for this real estate cycle. In March 2012 the Median price for the area was only $110,000; however prices have increased consistently since May of this year. By September 2012 the median price reached $121,000. The table below titled the Victor Valley SFR Market Condition Report for September 2012 was prepared by Bob Thompson for Escrow Junction. It is the information source for this article.
In the last six months the financial institutions including Freddie Mac and Fanny Mae have further reduced the number of home they release for sale. The number of homes listed has declined from a 2.2-month supply last March to only 1.4 months today. There were 641 homes available for sale in September 2012 compared to 451 closings. During 2004 and 2005 the number of outstanding listings averaged 2,500, which represented four to five months of sales. Real estate agents believe this is one of the factors causing the rise in home prices over the last few months.
Also, a review of the second page of the Market Condition Report would reveal that only 77 REO properties were listed for sale at the end of September, which is less than the 209 units available at the end of March. There were only 97 “short sale” units available in September
compared to 230 in March of 2012. On the other hand in the latest report there were 469 “Standard Sale” homes listed by non-financial institutions which was essentially the same number available last March. In case of REO sales the ratio of closings to listing as only 0.50 months. There is truly a shortage of
A Shortage Of Homes For Sale Has Caused A Significant IncreaseIn The Price Of Homes In The High Desert
By: Ronald J. Barbieri, Ph.D., CPA - The Bradco Companies & Bob Thompson
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continued on page 14
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was at the beginning of 2009, before there was an out migration caused by the last recession. Recent population trends are discussed in another article on population in this Bradco High Desert Report.
trending upward if the U.S. and California economies continue to expand, creating jobs that could support population growth and substantial household formations in both the High Desert and the Inland Empire. The good news is that the population of the High Desert increased since the U.S. Census and is currently slightly higher than it
2012. This is down from 67% in March of this year and 74% from 18 months earlier. This is a positive trend because it indicates properties that were foreclosed on represent a declining portion of the sales activity. Many of the buyers were investors, rather than owner occupants, who renovate the homes, and either, resell the units, or lease them to renters who are not able to purchase a home.
The demand for single family homes continues to be artificially inflated, because of the policies of the federal government. Interest rates are extremely low and down payments are usually substantially below 20% of the purchase price for owner occupants. Individuals are purchasing homes in the High Desert with as little as 3% down. On the other hand the underwriting criteria and documentation requirements are far more rigorous and extensive than normal; and the requirements for home appraisals tend to place a downward pressure on home prices. In the past appraisals could only include REO sales comps which are lower than standard sales comps. The effect of all this is to make home prices in the High Desert the most affordable in Southern California.
The requirement to use REO sales when doing an appraisal has been recently waived, which will make it easier for home price to increase. This will be the case, not only for the High Desert but for all of Southern California. The second page of the Market Condition Report depicts the Median Close Price for the 11 residential submarkets in the Victor Valley Area. In September of this year the Median Close Price for the REO sales in the area was $108,000. This compares to a Median Close Price of $116,000 for Short Sales and $130,000 for Standard Sales.
Home prices are expected to continue
A Shortage Of Homes For Sale Has Caused A Significant IncreaseIn The Price Of Homes In The High Desert
Continued
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of additional convicts and parolees under County jurisdiction. This improvement is currently under construction.
Outstanding public safety services require modern facilities. We’ve built new fire stations in Hesperia and Phelan, and the County’s new High Desert Government Center in Hesperia will soon be home to a state-of-the-art Public Safety Operations Center that will house dispatch for sheriff and fire and will serve as an emergency operations center. The County recently approved plans for a new fire station at Spring Valley Lake, which should be completed by fall 2013.
Public safety is one aspect of the important services provided by county government. Educational, cultural and recreational facilities also define the character of a region. The Victor Valley Museum in Apple Valley reopened last year as a fully accredited branch of our exceptional county museum system. It is truly an important cultural and historical touchstone for the High Desert.
It was quite an undertaking to acquire this previously private museum and bring it into the county system. However, I am now concerned with its future. So I am helping start the Friends of the Victor Valley Museum to raise private support to keep the museum open and thriving. I have pledged matching funds to a fundraising kickoff event on November 8 from 6 p.m. to 8 p.m. at the museum.
The County continues to support development of the Mojave River Walk trail which will join downtown Victorville with Mojave Narrows Regional Park and beyond. Victorville is the lead agency and my office was able to provide $75,000 as matching funds for a grant that allowed the environmental review by Victorville to continue uninterrupted. And early next year, Wrightwood will have a new skate park, providing young people with a safe
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The County of San Bernardino is Moving Forward with Major Construction ProjectsBy Brad Mitzelfelt,Vice Chairman and First District Supervisor
San Bernardino County Board of Supervisors
continued on page 16
As I’m completing my service as San Bernardino County’s First District Supervisor in December, I’m pleased to take this opportunity to update readers of the High Desert Report on just a few of the county’s many ongoing and recently accomplished initiatives.
First and foremost, the ability of local government to provide public services is correlated to the success, or lack thereof, of local businesses. While I have recently successfully pushed for reforms to our development code and permit processing to encourage economic activity, my successor will have much to work on to build on this progress. In addition to whether an area is open for business, there are several other factors considered by a business making a decision about where to locate, including infrastructure and quality of life, especially related to public safety and public and private amenities.
Infrastructure is perhaps the most visible. For example, it’s impossible to miss the rapid construction of the La Mesa/Nisqualli interchange on Interstate 15, due to be complete next year. It was a true team effort by High Desert representatives to SANBAG, and I was proud to have been President of SANBAG when we agreed to partner with the City of Victorville in constructing this critical bypass to Bear Valley Road.
Strategic flood control improvements, including two that help advance development of a critical east-west corridor, from the Yucca Loma Bridge in Apple Valley to the Nisqualli Interchange in Victorville, to more traditional projects like a new storm drain at Mountain View Acres in the Victorville area are just a few examples of the county and cities working together to solve longstanding problems. Mountain and desert communities worked together to bring more than $28 million in additional road funding
from state sources over the past few years, not including tens of millions of state bond dollars secured for Nisqualli and the new Ranchero interchange in Hesperia, and a hundred million dollars for the soon-to-be-reconstructed Devore Interchange at the I-15/I-215 junction that will eliminate the evening and weekend backup there.
A longer-term project that deserves special attention is the High Desert Corridor, which will link Palmdale and Victorville through a Public-Private Partnership that will speed up construction by 20 years. It will be the most powerful job-creating machine the High Desert has ever seen, ranging from blue-collar logistics jobs to highly skilled manufacturing to high-tech research and development. I was proud to be the founding chairman of the joint powers authority between the two counties that has since expanded the environmental analysis to include a rail component. This is our ticket to Metrolink commuter rail service to the High Desert, and potentially even a Palmdale to Victorville leg of the XpressWest private high-speed rail to Las Vegas project.
On October 1, the Board of Supervisors supported my motion to approve the Cadiz Valley water project, 15 years in the making, that will make available more than 200,000 acre-feet of water to water agencies within San Bernardino County over a 50-year period after it’s constructed in a few years. This will provide hundreds of millions of dollars of investment in our county and thousands of jobs, without harming the environment in the remote desert watershed near Amboy.
Public safety is always the top priority of local government, and nearly tripling the capacity of the Adelanto jail from 760 beds to 2,152 beds will allow the county to better deal with state prison realignment, which is putting thousands
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16
The County of San Bernardino is Moving Forward with Major Construction ProjectsBy Continued
place to enjoy their favorite pastime.
The most popular and internationally recognized attraction in the nine-park county regional park system is undergoing major improvements. Calico Ghost Town just opened the new Calico Mining Museum in the previously unused Zenda Building, providing an entertaining and informative window into the past lives of the miners and the historic mining equipment and techniques that made Calico one of the most productive mining districts in the late 19th and early 20th centuries. The Lane House at Calico is also being refurbished with new exhibits, and the County recently awarded a contract to construct new restrooms and showers at the campground that serves as a popular staging spot for off-road trail adventures.
As we continue to look to the future, we want to ensure that growth and development down the road has necessary infrastructure and public amenities to ensure a great quality of life. The community of Helendale in the not-too-distant future will be an even more ideal location for the highly skilled workers and managers the region is beginning to attract. When a number of proposals emerged several years ago to build hundreds of new homes there, I called for and have since funded development of a Helendale specific plan, which is analyzing and planning for the community-wide need for roads, water, parks, and other infrastructure. The specific plan will guarantee that Helendale will live up to its potential.
To address the county’s past corruption and prevent future continued ethical issues, we have prosecuted and pursued wrongdoers for punishment and restitution. We are recovering millions of dollars lost to corruption and we have passed numerous reforms. We have made county government more transparent and put a cap on campaign contributions to county elected officials.
Our citizens demand clean government and our good name depends on it.
I was proud to have helped usher in entirely new management that includes a world-class, respected and empowered County Executive Officer, who has helped us get our financial house in order over the past few years, identifying and eliminating myriad deficiencies and bringing order and professionalism to a government that was at times dysfunctional, sometimes unable or unwilling to do more than follow the whims of elected officials.
Like any family or business, the County is obligated to live within its means and serve as vigilant stewards of your tax dollars. The decline in property values and taxable sales have hammered County government on the revenue side, but generous pensions for our public employees that were negotiated and awarded during boom times threaten to overwhelm our ability to provide essential public services.
Employee associations are recognizing the gravity of the long-term situation and have been partners in reaching solutions. Top administrative staff started paying the 7 percent employee share of their pension deductions more than a year ago and fire department employees followed suit. More recently our deputy sheriffs and probation officers joined them in being part of the solution as well. The next challenge will come when the contract with the general employees comes up for negotiation in 2014. Labor costs are the bulk of local government expenditures so we will have an opportunity to make adjustments that will put the county on solid financial footing for years to come.
But government is
a lagging indicator and the financial health, and as I said before, of local government depends on the success of the private sector. The High Desert needs to work as a region to attract employers. I have made key investments on your behalf in education of our workforce, from aviation mechanics training to nurse training to precision machinists training. But there is much more to do to replicate these efforts and leverage training programs and dollars across all major industries.
Our selling points are compelling – location, land, labor, and leadership. But we need to realize that whether a business comes to Adelanto or whether it comes to Apple Valley, we all benefit. To that end, I am supporting the creation of Team High Desert, a cooperative effort among the four Victor Valley cities to market the region to site locators.
I see High Desert governments working together better than they did when I began my public service with the county. This is helping us solve regional problems, which is always a huge challenge. I consider that one of the most important things I have had a hand in. It has been an honor to serve, and I thank you for the opportunity.
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Academy For Grassroots OrganizationsBy Vici Nagel, President/CEO, Academy for Grassroots Organizations
As I have stated in previous columns in this publications, the nonprofit sector presents our region with huge opportunities for economic growth … and it is time for serious investment to help this sector embrace its role as a component of San Bernardino County’s economic engine.
First, let’s take a look at some facts and figures.
• There are currently 1,563,596 tax-exempt (nonprofit) organizations in the United States: 5,600 in San Bernardino County.
• In 2010, nonprofits accounted for 9.2% of all wages and salaries paid in the United States.
• Nonprofits’ share of Gross Domestic Product was 5.5% in 2010.
• In 2010, public charities reported over $1.51 trillion in total revenues and $1.45 trillion in total expenses.
• Public charities reported $2.71 trillion in total assets in 2010.
Why are these figures important?These figures demonstrate that the nonprofit sector is not just a collection of “do gooders,” but rather is a significant industry contributing to our nation’s economy. And similar to any industry in these challenging economic times, we need to think about how we can increase its strength to create greater economic activity and jobs.
In previous columns I have talked about our local nonprofit sector not receiving its share of foundation funding, with San Bernardino County communities receiving only $3 per capita in foundation funding compared to a state average of $119 per capita.
What is even more startling is the disparity in the amount of government funding our county receives. In 2010, the last year data is available, San Bernardino County received just $1,018 per capita in federal grants compared to a national average of $2,213. That is a $1,196 per capita disparity, or in other
words, our county received $2.4 billion less than the average allotment of federal grants … in just one year.
What would you invest to bring an additional $2.4 billion to our county every year?
A great deal, I hope!Our organization, Academy for Grassroots Organizations (formerly High Desert Resource Network) is dedicated to improving our quality of life by supporting and strengthening this woefully under-resourced sector/industry. As we work to strengthen individual organizations and the sector as a whole, we hope to help organizations become effective, responsive, innovative and sustainable. We do this through a variety of collaboration building, resource development, and training services provided to nonprofits throughout San Bernardino County.
But moving the local nonprofit sector from its dire lack of capacity and resources to one that is a vibrant and dynamic contributor to our quality of life, as you can imagine, is a huge undertaking. No one entity can accomplish it alone. Fortunately, Academy for Grassroots Organizations (AGO) is part of a wider network of nonprofit management support organizations, government entities, and businesses all working together to change the paradigm.
During the next several months AGO will be working with this network to create a strategic plan for building the county’s nonprofit capacity. We will be looking at the sector’s strengths and gaps in services and will develop a list of strategies aimed at significant increases in both nonprofit funding and performance. I look forward to reporting to you about those strategies in the next Bradco High Desert Report. Then, I hope you will join us by investing in this critical work to grow our nonprofit sector and grow our economy.
Finally, I am excited to report that our organization is also poised for growth.
During the past year and a half our Board of Directors has stepped up to the plate to take an even greater leadership role in the region’s social service sector. Doing the groundwork to lay a foundation for growth, the Board has expanded our service area to include all of San Bernardino County, developed a formal relationship with The Community Foundation Serving the Counties of Riverside and San Bernardino, partnered with organizations throughout the county to provide training in multiple locations, and changed our corporate name from High Desert Resource Network to Academy for Grassroots Organizations.
We believe that this new corporate name will help people better understand our mission and what our organization does. Academy relates to our strong focus on learning and Grassroots Organizations relates to our focus on helping organizations that are grounded in and concerned about local communities.
We also want readers to know that High Desert Resource Network will live on as a program of Academy for Grassroots Organizations. Through the Network we will continue hosting informative monthly meetings and bringing attention to this important sub-region of the county. Like our other signature program, The Fundraising Academy for Grassroots Organizations, the Network provides training and networking opportunities nonprofit professionals and volunteers need to advance their organizations.
For our schedule of meetings and trainings please visit www.AcademyGO.com.
I hope to see you soon!Vici Nagel is a 30+ year nonprofit professional and President/CEO of Academy for Grassroots Organizations, a nonprofit management support organization dedicated to improving the quality of life in our region by supporting and strengthening the social service sector. Further information may be found at www.AcademyGO.com.
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Cuts caused the workload to be reduced from 9,404 FTES (Full-Time Equivalent Students or approximately one student taking a full-time load of 12 credit units) in FY 2010-11 to 8,829 FTES in the current fiscal year as the result of the mandated budget cuts. However, VVC staff has continued the plans that were recommended by the Budget Committee, Enrollment Management team and approved by the Board of Trustees to generate approximately 9,600 FTES. The level of workload production contributes to two positive results: 1) more course offerings to local students and 2) the District receives an additional one million dollars in state funding for meeting the mid-size college standard. VVC will continue receiving the additional one million dollars through fiscal year 2014-15 because we met the mid-size college threshold this year.
VVC has used the budget reserves to balance the current year budget despite the large aforementioned revenue cuts. An anticipated current ending balance of approximately $14 million will help with the balancing of next year’s budget.
VVC’s main campus encompasses 253 acres and the Regional Public Safety Center in Apple Valley that encompasses 13 acres. The college dedicated the new Regional Public Safety Training Center on April 21, 2012. The center is located on the corner of Navajo and Johnson roads near the Walmart Distribution Center. The $31.4 million center is the first construction project funded by Measure JJ that was approved by voters in 2008. The center features a multi-agency learning environment to maximize disaster training by incorporating first responders programs that include Fire Science, EMT, Paramedic and Administration of Justice and Corrections.
VVC also owns 55 acres at Main Street and US Highway 395 for a future Workforce Development Center. Victor Valley College (VVC) has always placed a high value on workforce development through the support of strong vocational or career/technical education (CTE) programs. These programs are critical to the community and to the local economy, as they provide entry level employees and incumbent workers with the skills necessary to both improve their own standard of living, and to contribute to the growth of local businesses and industries.
VVC currently holds a 70.2 percent success rate for completion of credit vocational courses (2010-2011 year/ARCC 2012 Report).
At this time, VVC is focusing on building future enrollment for the Workforce Development Center by offering classes at both Silverado High School and Hesperia High School as a means to meeting current academic needs in this region of the High Desert. This project will be funded with Measure JJ bonds once the market improves. VVC serves a population base of approximately 400,000, and has more than 20 diploma granting institutions in its service area.
Construction Project Plans
Every year, Victor Valley College is required to update its five-year facility plan for submission to the California Community College Chancellor’s Office and the Department of General Services. Once the plan is approved, it is presented to the College’ Board of Trustees for approval. Projects at the top of the list include the modernization of the music building, the construction of an additional Science/Health facility and the expansion and refurbishment of certain vocational buildings. The funding source for these top three
Victor Valley College, established in 1961, has undergone many changes since itsinception. Most significant is student population. From humble beginnings, the college has grown from serving 500 students to more than 17,000 per year. Throughout this period, the college has managed to meet the higher education needs ofthe people of the Victor Valley. This educational experience has allowed students to reach one or more personal goals that include transfer to four-year colleges and universities , receive an A.A. or A.S. degree, earn an occupational career certificate,or access career training that expands his/herability to meet current industry standards.
VVC offers Associate in Science and Associate in Arts degrees in 23 different disciplines and more than 100 certificates. Three new degrees have been approved for VVC by the Community College Chancellor’s office to include an Associate in Science for Transfer in Administration of Justice, an Associate in Science for Transfer in Mathematics and an Associate in Arts for Transfer in Sociology.
Today, the college’s budget is approximately $47 million after suffering more than $12 million in cuts over the past four years. The college employs 770 in faculty, management and classified positions. Year-to-date, the VVC budget has been cut by a total of $4.9 million ($2.7 million budget cut was imposed at the beginning of the year and two subsequent cuts in the amounts of $925,000 and $1.2 million, respectively, were implemented in January and February 2012.) This year the college also absorbed another cut of approximately $1 million due to the Redevelopment Agency’s tax revenue shortfall, which brings the total budget cuts to VVC for the current fiscal year to $5.9 million. continued on page 19
Victor Valley Community CollegeBy Bill Gruelich, Public Information Officer, Presidents/ Office
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Victor Valley Community CollegeContinued
prioritized projects is Bond Measure JJ, passed in November 2008 by the voters of the District.
Music Building Modernization
This project is currently underway and calls for modernization of 8,308 Assignable Square Footage (ASF) / 10,002 Gross Square Footage (GSF) comprising the existing Music Building built in 1968. This building has not been updated for 43 years. The project includes bringing the building into compliance with the ADA code, updating the sound system, improving room acoustics, updating electronics, and creating additional practice rooms.
For the fall 2010 semester the Music Building laboratories were utilized at 110% of capacity (Capacity/Load Ratio of 91.4%). Project Cost: $3,800,000 Net ASF: 9,708, Occupancy Year: 2014/15
Science/Health Building
This project constructs a new permanent 14,880 ASF / 21,200 GSF science and health/nursing laboratory building on the main campus at Victor Valley College. It will be in the form of a one story building located adjacent the existing one story Science Building. The original design for the Science Building was based upon enlarging the lab capacity as enrollments grew by adding an additional row of Life and Physical Science Laboratories on the west side of the building. The existing science prep spaces (lab service) are unchanged, as their location and present size were anticipated to meet this expansion.
Across a hallway from the new science labs are new laboratories and offices for the Health/ Nursing programs, including Skills labs and SIM (simulation) labs for training in various health specialties: OB/Gyn, Pediatrics, ICU, Medical/Surgical Patient Room, and Psychology. Each SIM Lab will have a control room
and a group Debriefing Room using one way glass and video cameras for observation and critique.
The new building will be free-standing and will be situated to provide convenient access from the new science labs to the existing science prep spaces. Concurrently, the new nursing/ allied health labs will be close to the existing Nursing Building, which will continue to accommodate part of the nursing program. It will be remodeled as a future secondary effects project with some vacated labs converted to lecture space for these programs.
For the 2011 Fall Semester, the existing Science Building laboratories were used at 121.9 percent of capacity. The Allied Health/Nursing Building laboratories were used at 314.4 percent of capacity. In addition, the Health programs also used the Technology Center Lab room 143 and Lower Portable room 7 (at 176.7 percent of capacity). These use data demonstrate a clear need for additional science and health laboratory classrooms. Concurrently, classrooms on campus were used at 121.4%, representing an immediate shortage of 11,000 ASF, approximately 14 classrooms.
It will incorporate new labs in the health and science fields including:
• Nursing
• Allied Health
• Health Simulation Labs
• Biology
• Chemistry
• Earth Science
Project Cost: $14,400,000 Net ASF: 14,880, Occupancy Year: 2015/16
Expand/Refurbish Certain Vocational Buildings
This project reconstructs 2,862 ASF / 3,720 GSF of existing space and constructs 6,732 ASF / 9,357 GSF of new expansion or replacement space for the Auto/Diesel Mechanics and Welding lab programs on the lower campus. The project will also result in moving the Digital Animation Laboratory currently located in a portable building that occupies the location of the Diesel Mechanics Lab expansion. The Auto and Welding facilities are among the oldest at the VVC Campus and in dire need of updating/upgrading.
For the 2011 Fall Semester, the Welding laboratory was used at 150.6 percent of capacity, the Auto laboratories were used at 546.3 percent of capacity, and the Agriculture laboratory was used at 594.2 percent of capacity. Project Cost: $6,500,000 Net ASF: 6,732, Occupancy Year: 2014/15.
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MWA is Ahead of the Curve in Reliable Fiscal and Program PoliciesBy Tamara Alaniz, Mojave Water Agency
Responsible water management policies require sensible and transparent fiscal management processes. Securing water rights, building delivery infrastructure, and maintaining intricate systems of pipelines, pumps and pressure valves are all long-term projects requiring long-term capital funding procurement and coalition-building to secure a stable and sustainable supply of high quality water for the High Desert.
The Mojave Water Agency Board and staff work year-round to be forward-thinking, anticipating trends in policies affecting both water and economics. Combined with a conservative fiscal approach, the timing of MWA Board decisions has resulted in many science-based solutions to critical issues before they affect the region. This approach has suited our stakeholders well by positioning the agency to develop and fund regionally-appropriate policies and programs, both in preparation for leaner property tax revenues and anticipation of state/ federal government requirements.
The approach used to develop solutions, propose them to the Board for adoption and implement adopted policies stems from our cyclical outlook on regional water management and program/project funding needs. This process is largely driven by the development of the agency’s Integrated Regional Water Management Plan (IRWMP). These multi-agency, regional plans are developed in cooperation with our Technical Advisory Committee (TAC), a stakeholder-driven group comprised of local water districts, resource management agencies, and other affected stakeholders from the MWA service area.
As the needs of the region are assessed by the TAC and MWA Board, projects emerge and programmatic and economic analyses are performed
in order to prioritize projects inside of the plan. As financing options are explored and developed, an action plan of implementation is created and ultimately executed, completing the fiscal planning and capital expenditure cycle used by the Agency.
MWA has re-entered that cycle again, with over $120 million now invested in capital projects identified from the last round of planning. These investments include the Regional Recharge and Recovery Project, Oro Grande Wash Recharge Project, Water Conservation Incentive Program, Invasive Species Removal Program, Joshua Basin Recharge Project, Ames/Reche Groundwater Storage and Recovery Program/Management Agreement, and others. Despite a 26% decline in property tax revenues, reserves remain strong and the agency is well positioned to identify and prioritize more current, innovative opportunities for future regional water management actions.
Many examples of successful economic and programmatic results from this forward-thinking approach are below:
• The development and adoption of the MWA 2004 Regional Water Management Plan was done in close cooperation with the Department of Water Resources and local stakeholders, helping to secure over $50 million in grant funding between 2004 and 2012 toward the water management projects identified in the previous paragraph.
• Regional conservation actions toward a goal of reducing gallons per capita per day (gpcd) water usage by 20% before the year 2020 was adopted in early 2004, over five years before the state mandated its incorporation into the 2009 Legislative Water Package (SB7x et al.); and the High Desert region is well on its way to reaching that goal.
• A Five-Year Strategic Financial Plan was adopted in 2005, setting a course for securing grant funding awards and the match funding needed for their receipt. By identifying capital project funding approaches and grant eligibility needs, this plan gave the agency a “leg up” when it came to procuring funding partnerships.
• To responsibly pay for and deliver available imported water supplies for groundwater banking, the agency adopted its Groundwater Banking Policy in 2006, establishing thresholds and direction for anticipating, saving and spending on groundwater recharge supplies before they become available for purchase.
• MWA invests in future imported supplies with long-term sustainability in mind, thus the 2009 purchase of an additional 14,000 acre-feet of imported water supplies from the State Water Project. Regional economic strength will continue to rely upon stable water supplies – including imported supplies. Identifying demands and investing in their delivery has helped to situate the High Desert with a high quality of life for residents in a business-friendly climate.
• In 2012, the construction and operation of both R-cubed and the Oro Grande Wash Recharge Project are current examples of regional water management solutions derived from the IRWMP process. These projects provide a more sustainable water supply for the communities of Adelanto, Apple Valley, Hesperia, Victorville, and unincorporated San Bernardino County.
As the process for IRWMP development continues, we invite stakeholders and water users in the High Desert to participate with us in the planning
continued on page 21
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All The Industrial Markets In Southern Callifornia Experienced Substantial Absorption In Recent Years
By Ronald J. Barbieri, Ph.D., CPA - The Bradco Companies A substantial portion of the absorption of industrial space in the Inland Empire during the last decade has been the result of firms migrating from Los Angeles and Orange County, where land is expensive and scarce, to the Inland Empire where there are sites large enough to accommodate the high ceiling warehousing and manufacturing facilities. A critical question is whether or not the space vacated by firms migrating to the Inland Empire had been leased to other firms; if not, the vacancy levels for industrial space in the coastal counties would continue to increase, portending an eventual slowdown in the demand for industrial space in the Inland Empire. Conversely, if other firms were leasing the industrial space vacated along the coast, it would suggest the demand for industrial space in Inland Empire would continue to expand, possibly at an accelerating rate.
CoStar classifies industrial space into two categories: Industrial Warehousing Space and Flex Space. As of the end of the 1st Quarter 2012, there were 203 million SF of Industrial Flex space in Southern California and 1,811 million SF of Industrial Warehousing space. By the end of 2011 89.9% of the total stock of industrial space was classified
as Industrial Warehouse space, which is the subject of this article.
The above graph depicts the stock of Industrial Warehouse space in Southern California by county from the end of 2000 through the 1st Quarter 2012. The inventory in Southern California increased from 1,542 million SF to 1,811 million SF. A total of 269 million SF of Rentable Building Area (RBA) were delivered in six county regions to accommodate the needs of warehousing and distribution firms as well as manufacturing companies. On average 23.9 million SF of space were delivered each year.
The inventory of Warehousing Industrial space in the Inland Empire increased from 298 to 482 million SF over the same 11.25 year period. As of the end of the 1st Quarter 2012, the Inland Empire accounted for 26.6% of the total inventory of Warehousing Industrial space in Southern California. Approximately 184 million SF were added to the stock, which represents an average increase of 16.4 million SF per year. It also represents 69.7% of the total industrial warehouse construction
process. Watch for TAC meetings on both Facebook and the Board and Committee meeting calendar on our website to keep up-to-date on opportunities to participate in this important process.
For more information on Mojave Water Agency or to speak with our highly qualified staff about your water management questions, we can be reached by telephone at (760) 946-7000. You can check out our website at www.mojavewater.org, or catch us on Facebook at www.facebook.com/mojavewater.
Mojave Water Agency is one of 29 State Water Project contractors with access to water from the California Aqueduct. As the only wholesaler in the region, we import high quality water supplies and recharge our groundwater supplies, securing a stable and sustainable supply for the 4,900 square miles of High Desert we serve.
MWA is Ahead of the Curve...Continued
continued on page 22
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All The Industrial Markets In Southern Callifornia ExperiencedSubstantial Absorption In Recent Years
Continuedin Southern California. San Diego County had 145 million SF as of the end of the study period, up from 130 million SF as of the end of 2000. This represented an increase of 15 million SF or approximately 1.3 million SF in deliveries per year, which was 5.7% of the total deliveries. San Diego accounted for 8.0% of the Warehousing Industrial RBA in Southern California as of the end of the 1st Quarter 2012.
The inventory of industrial space in Orange County increased from 229 to 237 million SF over the 11.25 year period. Orange County housed 13.1% of the RBA of Southern California by the end of the March 2012. The addition of 8 million SF represented an increase of 700,000 per year. Orange County only accounted for 3.0% of the net additions to the stock of Warehousing Industrial space in Southern California, which was the lowest of all the counties. Los Angeles and Ventura Counties are reported together by CoStar. There was 947 million SF of space in both counties as of March 31, 2012.This represented 52.3% of the Total RBA in the Southern California Region. In December 2000, there was 890 million SF of Industrial Warehouse space. The inventory increased by 57 million SF or 5.1 million SF per year. Los Angeles and Ventura Counties accounted for 21.6% of the increase in building inventory over the study period.
The table below depicts the annual Net Absorption of Industrial Warehouse Space in Southern California by county for the period beginning in 2000 through the 1st quarter 2012. During the first 8 years of this millennium, 248 million SF of Industrial Warehouse Space was as absorbed in Southern California. This represents an annual net absorption of 31 million SF. The region experienced
a Negative Net Absorption of (4.9) million SF in 2008 and (15.9) million SF in 2009 due to the Great Recession. In 2010 the absorption turned positive by 10.0 million SF; and in 2011 Southern California absorbed 21.0 million SF.Approximately 3.2 million square feet of the net absorption occurred in Los Angeles, Ventura, San Diego and Orange Counties. In the 1st quarter of 2012 demand increase by 4.0 million SF, which on an annual basis is equivalent to a Net Absorption of 16 million SF. This suggests the industrial absorption in the Inland Empire is likely to remain high and possibly even accelerate.
From 2000 and the first quarter of 2012, the Inland Empire accounted for almost 77% of the net qbsorption of Warehousing and Inustrial space in Southern California. For the 8-year period ending in 2008 Riverside and San Bernardino Counties absorbed 153 million SF or approximately 19.1 million SF per year. In 2008 the Inland Empire absorbed 4.5 million SF, before losing 200,000 SF of industrial demand in 2009. Thereafter, the demand for industrial space rebounded with 11.6 million SF being absorbed in 2010 and an additional 17.8 million SF being occupied in 2011, Los Angeles and Ventura Counties experienced the second l a r g e s t increase in demand in S o u t h e r n Cal i fo rn ia . D u r i n g the first 8 years of this mellennium they absorbed 70 million SF of Industrial Warehouse
space. The two counties suffered an 18 million SF decline in occupancy during the three years ending in 2010, before gaining 900,000 Sf in 2011 and 1.6 million SF in the first quarter of 2012.
Orange County absorbed 9.9 million SF during the period 2000 through 2007; but suffered a negative net absorption of (5.3) million SF for the three years ending in 2010. The momentum shifted to a positive net absorption of 1.6 million SF in 2011 followed by 500,000 SF in the first quarter of 2012. Beginning in 2011, the Southern California industrial market has experienced a substantial increase in net absorption.
The vacancy rates is summaries by county for the years 2000 through the first quarter 2012 in the table below. The vacancy rates were extremely low at the start of the millennium. The vacancy rate for all of Southern California for the year 2000 was 4.0%. With the exception of San Diego County, the vacancy rates for the other submarkets increased slightly in 2001 and 2002 before declining during from 2003 through 2005. With the exception of the Inland Empire the vacancy rates remained low until the effects of the recession began to
continued on page 23
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All The Industrial Markets In Southern Callifornia Experienced Substantial Absorption In Recent Years
Continued
San Bernardino A s s o c i a t e d G o v e r n m e n t s
(SANBAG) is the Council of Governments and transportation agency for San Bernardino County. SANBAG administers Measure I, the half-cent transportation sales tax originally approved by county voters in 1989 and reapproved in 2004 to extend from 2010-2040.
SANBAG works closely with the Mountain Desert Committee, which is composed of representatives from all High Desert cities. Following is an update on some of the active High Desert projects:
I-15/La Mesa/Nisqualli Road Interchange
Since breaking ground in February, 2012, the I-15/La Mesa/Nisqualli Interchange Project has crossed the halfway point on construction, moving Victorville closer to its new east/west alternative to Bear Valley Road and Palmdale Road. False work, framing, and steel support systems now span over Interstate 15 preparing for an upcoming concrete pour that will serve as the new bridge.
At the same time, crews have worked diligently on sound walls and the new alignments of both Amargosa and Mariposa Roads to allow for the new bridge tie-in on both sides of the freeway.
be manifested in 2008. In 2009 vacancy rates for Southern California peaked at 7.3% and at 12.1% for the Inland Empire.
Vacancy rates eased somewhat in 2010; but they dropped significantly beginning in 2011. By the end of the first quarter of 2012, the vacancy rates for Southern California declined to 5.7%. At that point in time the vacancy rates for the Inland Empire had reached 6.8%. Equilibrium vacancy rate for all of Southern California appears to be about 4.5%; for the Inland Empire it is approximately 5.5%. Rents for the large box industrial space appears to have stabilized in the beginning of 2011 before increasing in latter part of that year and into 2012.
Because there has been little new construction along the coast coupled with the substantial increase in the demand for industrial space, the vacancy level has significantly decreased in those three counties.
The high level of leasing activity suggests the larger industrial users and tenants have run their logistic cost minimization models and concluded
that Southern California will continue to be the primary location in the U.S. to have facilities. In a recent real estate conference in the City of Long Beach California, the panelist were claiming that medium and smaller size manufacturing firms are continuing to expand in Southern California because that is where the owners and decision makers want to live. The substantial level of industrial absorption in 2010 and 2011 supports the conclusion that manufacturing, warehousing, and distribution will continue to expand in Southern California, especially in the Inland Empire.
The absorption of industrial space in the Inland Empire at such a high level, will continue to create employment opportunities for workers that live in the High Desert; and eventually it will significantly increase the absorption of Industrial Warehouse space in the High Desert.
continued on page 24
SANBAG/High Desert Transportation Projects
Moving Forward By Jane Dreher, Public Information
Officer
San Bernardino Associated Governments 1170 W. 3rd Street, 2nd Floor San Bernardino, CA 92410-1715 www.sanbag.ca.gov Contact: Jane Dreher, Public Information Officer (909) 884-8276
March 2012 For information: Jane Dreher, Public Information Officer 909‐884‐8276 or [email protected] Ellen Pollema, High Desert Projects 909‐884‐8276 or [email protected]
SANBAG/San Bernardino Associated Governments High Desert Transportation Update San Bernardino Associated Governments (SANBAG) is the Council of Governments and transportation agency for San Bernardino County. SANBAG is responsible for cooperative regional planning and furthering an efficient multi‐modal transportation system countywide. SANBAG serves the 2.1 million residents of San Bernardino County. As the County Transportation Commission, SANBAG supports freeway construction projects, regional and local road improvements, train and bus transportation, railroad crossings, call boxes, ridesharing, air quality and congestion management efforts, and long‐term planning studies. SANBAG administers Measure I, the half‐cent transportation sales tax originally approved by county voters in 1989 and reapproved in 2004 to extend from 2010‐2040. SANBAG considers the transportation needs of the entire county, with focused attention provided by specialized committees, one of which is the Mountain Desert Committee. Following is a summary of some of the projects being planned for the High Desert.
La Mesa/Nisqualli Road Interchange After decades of development, officials from the City of Victorville, County of San Bernardino, SANBAG, and Caltrans kicked off the construction of the new Interstate 15 ‐ La Mesa/Nisqualli Interchange with a bang in front of a crowd of nearly 200.
The Interstate 15 ‐ La Mesa/Nisqualli Interchange will provide a new east/west cross‐over point for local traffic, as well as a freeway access alternative to Bear Valley road to the south and Palmdale Road to the north. This significant addition to the Victorville transportation infrastructure will ultimately ease congestion, improve local circulation and enhance overall safety in and around Interstate 15 in that area.
The contractor began work on February 13, 2012. Since then, significant progress has been made on the Oro Grande Wash; Mariposa Road has been realigned to allow for construction of the eastern bridge abutment; and, utilities (both private and public) have been relocated to make room for the new interchange configuration. Information updates about the project are available on the SANBAG website (www.sanbag.ca.gov) and ongoing outreach to the community of Victorville will continue throughout the construction period. Individuals interested in getting email alerts about the project, which will include schedule changes, traffic handling, and detour plans, can sign up from the
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In the months ahead, the project team will pave the new sections of both frontage roads so traffic can drive on the new configuration. Traffic will be shifted over to the alignments sometime in January 2013. Efforts will then move to the construction of the on and off ramps from I-15. Signals, striping, and other safety elements will be installed for a summer 2013 opening of the High Desert’s newest interchange.
This significant addition to the Victorville transportation infrastructure will ultimately ease congestion, improve local circulation, and enhance overall safety in and around Interstate 15 in that area.
High Desert Corridor
The High Desert Corridor (HDC) is a proposed new 63-mile east-west freight and vehicle expressway between State Route 14 and Highway 18 at the eastern end of Apple Valley. The 50 miles from Palmdale to Victorville is a proposed Public-Private Partnership (P3) that would also connect regional rail systems linking Los Angeles County to San Bernardino County and beyond. The HDC will also address traffic safety and support the growing need to move goods entering the ports and airports of Southern California via a different route than directly through the Los Angeles Basin. The project is also proposed to improve mobility and access for people in the rapidly growing Antelope Valley in Los Angeles County, Apple Valley and Victor Valley areas of San Bernardino County.
The HDC project planning involves the California Department of Transportation (Caltrans) in coordination with the
SANBAG/High Desert Transportation Projects Moving Forward Continued
continued on page 25
Los Angeles County Metropolitan Transportation Authority (Metro), the High Desert Corridor Joint Powers Authority, and other partner agencies, including the City of Victorville, the Town of Apple Valley, San Bernardino County, Caltrans District 8, and SANBAG. In 2010, Caltrans took over as lead agency from the City of Victorville.
For more information: http://www.metro.net/projects/high-desert-corridor/
I-15/I-215 Devore Junction Goods Movement Improvement Project
The Environmental Document for
the Devore project was approved in February 2012, thus allowing the project to move forward with discussions about acquisition of property. Design Alternative 3A was identified as the design which best meets the needs and purpose of the project and is supported by the community of Devore. The next steps on the project include: contacting affected tenants and property owners; selecting a Design-Builder in fall 2012; beginning design work at the end of
2012; conducting a public meeting prior to construction; and commencing c o n s t r u c t i o n
activity in early 2013. This is a Design-Build project, whereby design and construction will be done simultaneously by the same contractor, thus saving time and allowing for adaptations throughout the construction process.
This project will benefit freight traffic, recreational travelers, and High Desert commuters and includes reconnecting the historic Route 66 that currently dead-ends on both sides of the junction. The project’s total cost estimate of $324 million for the locally-preferred alternative includes 15 bridges, roadbed widening on two interstates, improvements to local arterials, environmental mitigation, and major drainage improvement.
Yucca Loma Bridge and the Yucca Loma Corridor
The Town of Apple Valley has hired a construction management firm and construction is expected to begin in early 2013 on the Yucca Loma Bridge project over the Mojave River. The Yucca Loma Bridge will connect Yucca Loma Road on the Apple Valley side with Yates Road on the Victorville side, connecting the urban/commercial cores of Victorville and Apple Valley.
The new roadway and bridge will carry vehicles, bicyclists, and pedestrians. It will also intersect the City of Victorville’s proposed Riverwalk bicycle/pedestrian project, providing an alternative means of transportation along the river towards Bear Valley Road and Victor Valley College.
Apple Valley is the lead agency on the bridge project but is also working with the City of Victorville and the County of San Bernardino to complete the Yucca Loma Corridor to connect the bridge with Hesperia Road and the planned I-15/La Mesa-Nisqualli Interchange. Starting at the corridor’s east end, the bridge will connect Yucca Loma Road to Yates Road, which will then connect
High Desert Corridor Project Alternatives Map: There are several alternative routes still being considered, as indicated below by the various colors.
I‐15/I‐215 Devore Junction Goods Movement Improvement Project
Environmental Document Approved
The Environmental Document for the Devore project was approved on February 29, 2012, thus allowing the project to move forward with discussions about acquisition of property. Design Alternative 3A was identified in the approved documents as the selected design which best meets the needs and purpose of the project and is supported by the community of Devore. The next steps on the project include: contacting affected tenants, as well as property owners; select a Design‐Builder in Fall 2012; begin Design at the end of 2012; conduct a public meeting prior to construction; and commence construction activity in early 2013.
This is a Design‐Build project, whereby design and construction will be done simultaneously by the same contractor.
DEVORE Junction
In July 2010, the California Transportation Commission (CTC) selected the I‐15/I‐215 Devore Junction Goods Movement Improvement Project as one of 10 road construction projects statewide that Caltrans can construct using the streamlined project delivery method design‐build. This can save time and allows for adaptations throughout the construction process.
The I‐15/I‐215 Devore Junction is the worst grade‐related trucking bottleneck on I‐15 in San Bernardino County. Originally constructed in 1969, the junction currently handles an average of 160,000 vehicles a day, including about 21,000 heavy trucks.
This project will benefit freight traffic, recreational travelers, and High Desert commuters. It is anticipated that an improved Devore Junction will spur economic growth and improve the quality of life for all Southern California motorists traveling to the High Desert, Las Vegas, and beyond.
This project will improve traffic flow at the I‐15/I‐215 Devore Junction and includes reconnecting the historic Route 66 that currently dead‐ends on both sides of the junction. The project’s total cost estimate of $324 million for the locally‐preferred alternative includes 15 bridges, roadbed widening on two Interstates, improvements to local arterials, environmental mitigation, and major drainage improvement.
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Lenwood Road serves as a major access route from local residents and businesses to Interstate 15. Increasing vehicular traffic due to regional population growth and rising train traffic from the ports have increased the congestion which is causing increased delays at the existing at-grade crossing. These delays affect the traveling public, potentially hinder access by emergency vehicles, and increase air pollution by vehicle emissions when vehicles are stopped and idling while waiting for the trains at crossings.
The primary project objective is to improve operation and safety by ensuring prompt emergency response time to businesses and residents while eliminating the hazards and inefficiencies of trains passing through the flow of vehicular traffic. Air quality will be improved through elimination of vehicles idling during gate downtimes.
As the County Transportation Commission, SANBAG supports freeway construction projects, regional and local road improvements, train and bus transportation, railroad crossings, call boxes, ridesharing, air quality, and congestion management efforts, and long-term planning studies. For more information about all of SANBAG’s projects, visit our website at: www.sanbag.ca.gov
to Hesperia Road via a new grade separation/bridge over the Burlington Northern Santa Fe railroad tracks, all of which will provide easy access to Interstate 15, using the new interchange at La Mesa/Nisqualli Road.
This project will create an alternate east/west corridor that will provide congestion
relief for the I-15 Interchanges at Bear Valley Road and Palmdale Road, as well as State Route 18 at D Street in Victorville
I-15/Ranchero Road Interchange
Construction is expected to break ground in late 2012 or early 2013 on the proposed Ranchero Road Interchange in the City of Hesperia, approximately 1.78 miles north of the existing Oak Hills Road Overcrossing and approximately 1.42 miles from the existing US-395 Connection Overcrossing.
The Ranchero Road Interchange will include the construction of ramps for full freeway access, and construction of a new overcrossing structure at the I-15 freeway to provide east/west connections. The project will also realign the frontage roads—Caliente Road and Mariposa Road—on either side of the freeway. The Ranchero Interchange is one of the phases of the Ranchero Corridor project, which ties together the eastern and western sections of the city separated by the BNSF tracks along the Mojave River. SANBAG is the lead agency on the project and is working closely with the City of Hesperia to
deliver this project.
US-395 widening
SANBAG is working with CALTRANS on the design for this widening project. The first phases of the project to be widened will be north of SR-18. The project will widen US-395 from Interstate 15 through Desert Flower Road in Adelanto from two to four lanes, with left-turn pockets and standard shoulders. This project will also widen or replace the structure over the California Aqueduct. The environmental document was completed in December 2009 and is in the design phase. The 12.5 miles of the project will be constructed in nine phases as funding is identified. Construction is anticipated to begin in 2016.
Lenwood Grade Separation, Barstow
The City of Barstow and SANBAG are working together to plan and build a railroad overcrossing bridge, called a Grade Separation, on Lenwood Road over the BNSF railroad tracks. The project is in the right of way stage and construction is anticipated to begin in Summer 2013.
Currently, Lenwood Road has two lanes of traffic in each direction and carries approximately 4,200 vehicles per day, many of which are trucks. Lenwood Road serves commercial, light industrial and residential developments in the vicinity of the BNSF grade crossing.
Ranchero Road Interchange The proposed Ranchero Road Interchange at Interstate 15 is located in the City of Hesperia, approximately 1.78 miles north of the existing Oak Hills Road Overcrossing and approximately 1.42 miles from the existing US‐395 Connection Overcrossing. The Ranchero Road Interchange will include the construction of ramps for full freeway access, and construction of a new overcrossing structure at the I‐15 freeway to provide east/west connections. The project will also realign the frontage roads—Caliente Road and Mariposa Road—on either side of the freeway. Construction is scheduled to begin in fall 2012 with SANBAG as the lead agency.
US‐395 widening SANBAG is working with CALTRANS on the design for the widening project. The first phases of the project to be widened will be north of SR18. This project will widen US‐395 from Interstate 15 through Desert Flower Road in Adelanto, from two to four lanes, with left‐turn pockets and standard shoulders. This project will also widen or replace the structure over the California Aqueduct. The environmental document was completed in December 2009 and is in the design phase. The 12.5 miles of the project will be constructed in nine phases as funding is identified. Construction is anticipated to begin in 2013‐2014.
Victor Valley Transit Authority The Victor Valley Transit Authority (VVTA) is one of six transit agencies that SANBAG supports countywide and provides local bus service for the communities of Adelanto, Apple Valley, Hesperia, Victorville, and unincorporated areas of the Victor Valley.
The VVTA has completed construction of its new Victor Valley Transit Facility in Victorville. The new transit facility includes a 27,000 square feet administration and operations building, a 31,000 square feet bus maintenance building, a bus parking lot to accommodate 120 buses and paratransit vehicles, 230 parking spaces for employees, visitors and service vehicles, a 13,000 square feet bus wash structure and fueling station, and a photovoltaic panel covered bus shade structure. The facility was designed and constructed to achieve the highest feasible rating as established under the standards of the Leadership in Energy and Environmental Design (“LEED”).”
5 | P a g e
VVTA will be having a dedication ceremony for the new transit facility on Friday, April 20, 2012 at 11:00 am, following the Mountain Desert Committee Meeting at this location. The public is invited.
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Snapshot Of The Commercial And IndustrialReal Estae Markets In The High Desert
By: Ronald J. Barbieri, Ph.D. and CPA - The Bradco Companies
compares to 969.000 SF in 2011 and 967,000 SF in 2010. There was no in-dustrial space under construction as of the end of the 2nd quarter 2012. Most of the absorption over the last 2.5 years was in the large boxes. Substantial warehousing and distribution as well as manufacturing companies accounted for the increase in demand. The City of Adelanto absorbed 250,000 SF in 2012, which represented 85% of the increase in the demand for industrial space in the High Desert during the first half of 2012. A 170,000 SF addition to Rubbermaid’s existing facility at SCLA in the City of Victorville is under construction; and a 75,000 SF expansion of True Blue’s fa-cility has started in the Town of Apple Valley.
Office Market
As of June 2012, the High Desert had al-most 5.5 million SF of office space. The net absorption for the first half of 2012 was 17,524 SF compared to 26,287 SF absorbed in 2011 and 133,281SF ab-sorbed in 2010. The vacancy level at the end of the 2nd quarter 2012 was 322,000 SF or 5.9% of the total inventory. There was only a slight increase in the demand for office space in 2011 and the first half of 2012, which resulted in a small de-crease in the vacancy rate. Most of the increase in office space demand over the last two and one half years was from the expansion by local government and the medical profession. Because of bud-get constraints the demand for office space by the government sector is not likely to increase in the next two years. There was 3,480 SF of of-fice space in Apple Valley under construction as of June2012. While the office space is only slightly over-supplied, there has not been any significant increase in the demand for space in the High Desert in the last year and a half. This has caused office rental rates to decline over the last 18 months.
Retail Market
There was 15.6 million SF of retail space in the High Desert of which 1,390,000 SF was vacant at the end of the 2nd quarter 2012. This represents a vacancy rate of 8.9%. The demand for retail space has been basi-cally flat over the last 2-1/2 years. The High Desert experienced a net absorp-tion of 56,000 in the first half of 2012, compared to
a net negative absorption of (60,472) in 2011. In 2010 the High Desert absorbed 210,655 SF in 2010. The only retail space under construction is the 58,000 SF that Macy’s is adding to the vacant 70,000 SF former department store in the Victor Valley Mall. However, this will not be reflected in the absorption figures until 2013. Two super Walmarts in Victorville and Hesperia were under construction as June 30, 2012. Another super Walmart is likely to be built in Apple Valley by 2014; and two more are planned for Victorville.
Industrial Market
There was 20.4 million SF of industrial space in the High Desert at the end of 2011. The vacancy rate was 4.7% or 957,000 SF. The net absorption in the first half of 2012 was 294,000 SF. This
High Desert Real Estate Market Data By City - 2nd Quarter 2012
VictorvilleAdelanto Apple Valley Barstow Hesperia with SCLA High Desert
OfficeEnding Inventory (SF) 143,765 1,051,018 574,968 1,054,919 2,598,747 5,423,417Vacant Space (SF) 0 62,519 51,781 33,382 174,578 322,260Vacancy Rate 0.0% 5.9% 9.0% 3.2% 6.7% 5.9%Net Absorption: Through June 2012 0 0 (2,975) 12,067 8,432 17,524 During 2011 500 39,428 (28,851) (7,863) 23,073 26,287 During 2012 1,000 31,347 11,918 32,457 56,559 133,281Under Construction (2nd Qtr. 2012) 0 3,480 0 0 0 3,480
RetailEnding Inventory (SF) 254,886 3,024,447 2,784,852 2,713,341 6,820,145 15,597,671Vacant Space (SF) 18,327 329,454 270,133 189,680 582,563 1,390,157Vacancy Rate 7.2% 10.9% 9.7% 7.0% 8.5% 8.9%Net Absorption: Through June 2012 (6,525) (3,465) (35,598) (765) 102,372 56,019 During 2011 2,092 (150,247) (4,784) 45,330 47,137 (60,472) During 2012 14,987 124,880 7,907 55,758 7,123 210,655Under Construction (2nd Qtr. 2012) 0 0 0 195,000 273,000 468,000
IndustrialEnding Inventory (SF) 3,320,283 2,753,547 1,440,046 4,563,523 8,372,156 20,449,555Vacant Space (SF) 66,288 76,753 298,924 308,102 207,475 957,542Vacancy Rate 2.0% 2.8% 20.8% 6.8% 2.5% 4.7%Net Absorption: Through June 2012 249,827 (5,583) 10,604 (2,542) 41,747 294,053 During 2011 (129,213) 30,515 (64,454) 78,896 1,053,064 968,808 During 2012 (11,342) (16,670) 70,480 (88,756) 1,013,432 967,144Under Construction (2nd Qtr. 2012) 0 75,000 0 0 170,000 245,000Based on Information Obtained from Costar
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million SF. Barstow has 1.4 million SF of industrial space.
As of June 30, 2012, the vacancy rate in the High Desert for buildings 50,000 SF or less was 5.4%, while for larger buildings it was 4.2%. The City of Barstow had the highest vacancy rate for buildings over 50,000 SF. It was 36.2%. The vacancy rate for the smaller buildings in Barstow was 6.8%. The non SCLA portion of Victorville had an 8.1% vacancy rate in the smaller buildings, but zero in the larger structures. In the Town of Apple Valley there was no vacancy in
the larger buildings but the rate for the smaller buildings was 8.2%. The smaller buildings in the City of Adelanto had a vacancy rate of 3.1% while the larger buildings had no vacancy. The vacancy rate for smaller buildings in the City of Hesperia was 3.6% compared to 11.6% for larger buildings. For an area the size of the High Desert the stabilized vacancy rate is approximately 5% so long as the demand for industrial space is expanding.
From January 2011 through June 2012
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There are two different classes of industrial tenants and users in the High Desert. One class consists of the large box users. They typically are warehousing and distribution firms, such as Wal-Mart in the Town of Apple Valley, or large manufacturing operations, such as United Furniture Industries at SCLA in Victorville. Such companies usually occupy buildings in excess of 50,000 SF. The second consists of smaller manufacturing or distribution firms that for the most part cater to the local population and businesses or are niche manufacturing players in the regional market. They are typically small space users that occupy single or multi-tenant buildings of 50,000 SF or less. The average floor area of the small buildings is 10,200 SF.
The graph below categorizes the industrial inventory in the High Desert by city as well as by whether or not the structures are greater than 50,000 SF. It also segregates the industrial space in the City of Victorville into the inventory at SCLA and the non-SCLA portion of the city. Of the 20.5 million SF of industrial inventory in the High Desert, 8.5 million SF is associated with buildings of 50,000 SF or less. The remaining 12.0 million SF is in buildings greater than 50,000 SF. The City of Victorville has almost 8.4 million SF of industrial space, of which 4.5 million SF is located at SCLA. The balance of 3.9 million SF is in the Foxborough Industrial Park, which the city developed, and in several other industrial sub-markets throughout its incorporated area. The City of Hesperia is home to 4.6 million SF of industrial inventory, much of which is in the older industrial area north of Main Street between the railroad tracks and I Avenue. Adelanto accounts for 3.3 million SF while the Town of Apple Valley has 2.8
The Demand For Industrial Space In The High Desert HasIncreased Substantially Over The Last 18 Months
By: Ronald J. Barbieri, Ph.D., CPA - The Bradco Companies
continued on page 28
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the High Desert experienced a Net Absorption of 1,281,000 SF. SCLA accounted for 1,067,000 SF, of which 1,113,000 SF was in the larger industrial buildings. The City of Adelanto gained almost 121,000 SF in industrial demand all of which was associated with smaller buildings. During the same period the Town of Apple Valley had a Net Absorption of 25,000 SF, somewhat evenly split between smaller and larger sized buildings. The City of Hesperia absorbed over 94,000 SF; in spite of the fact that there was a slight decrease in occupancy in the larger buildings. The City of Barstow experienced a decline in industrial occupancy of approximately 54,000 SF all in larger buildings, while the non SCLA portion of the City of Victorville recorded 27,000 SF of positive absorption.
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Retiring Mayor of Riverside Ron Loveridge asks a great question when he ponders the mystery of “Who rules in the Inland Empire?” The answer to the question is no one, and now we all know there is no emperor in our empire, but perhaps the better question to ask is Who speaks for Inland Empire?
That is the question the Inland Empire Economic Partnership (IEEP) seeks to answer. IEEP is a convener that exists to bring together private and public leaders from both Riverside and San Bernardino Counties to provide solutions to our regions problems. IEEP seeks to accomplish its mission by representing the voice of our four million residents and it’s heard throughout the decision making groups in Southern California, our state, and nation.
Speaking from my personal experience whether at the White House, Sacramento or among my peers in statewide economic development organizations there is deep desire for our opinion to be heard. Why? Because you cannot tell the full story of the economy of Southern California or our state without including Riverside and San Bernardino Counties. The Inland Empire is a geographically and financially significant player in the economy of the United States. Our success means success for the national economy and our troubles become part of the nation’s struggle.
Leaders of the nation and state want to hear what we have to say about goods movement. They want to see how we can create solutions for the ancillary effects of the sector while continuing to allow it to grow and flourish as world trade and the information age continue to more closely connect countries and peoples.
When it comes to manufacturing, leaders know that our location and history make us one the remaining hubs for the sector
in the United States. When it comes to healthcare we represent a hugely underserved population. Leadership wants to see how we can cope with the lack of medical staff and hospital beds. They are looking to us for outside the box thinking like the creation of the UCR School of Medicine, designed to insure the population can school and keep physicians here in Riverside and San Bernardino Counties.
From these issues to education and diversity our region’s challenges can be turned into success stories that can teach others. That is why IEEP partners with the Regional Economic Alliance Leaders of California, the California Stewardship Network, the California Leadership Council, Mobility 21, the Southern California Associated Governments, and many others to make sure the Riverside and San Bernardino Counties residents and businesses have a voice at the table and that national, statewide, and Southern California private and public leaders have a partner from the IE.
The Demand For Industrial Space...
Continued
Federal, State and SoCal LeadersSeeking a Partner In The IE
By Paul Granillo
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his last article as Vice Chairman and First District Supervisor titled “The County of San Bernardino is Moving Forward with Major Construction Projects”. I would like to publically thank Brad and his wife Megan for all their public service for many many years. We wish you the best Brad in your future endeavors and we had such a great opportunity to work with you. We will continue to move forward on the economic development council project that we had talked about in the last year.
I would like to thank Ms. Vici Nagel whose former group has recently renamed itself to the Academy for Grassroots Organizations, for her article. We hope to be making an announcement in January of 2013 that will augment the efforts with the great group, and the nearly 1,000, 501C3 and 501C4 now profit organizations that need monies within the High Desert region.
I would like to thank Mr. Bill Gruelich, Public Information Officer for Victor Valley Community College District (where I am proud to be an appointed Trustee) on the article that he has submitted about all the positive issues affecting our great institution. The Mojave Water Agency has submitted their article “MWA is Ahead of the Curve in Reliable Fiscal and Program Policies” and prepared by our friend Ms. Tamara Alaniz.
We continually appreciate the great relationship that we have had with SANBAG (San Bernardino
Associated Governments) for many years and re-welcome Mr. Ray Wolfe as its Executive Director. We had worked with Ray when he was the Executive Director of Cal Trans (District 8), which included the entire Inland Empire. He takes over for our longtime friend Ms. Deborah Barmack. Ray again welcome to SANBAG. Thank you for the information that you and your staff supply our readers on an ongoing basis.
We are working very closely with Mr. Paul Granillo of the Inland Empire Economic Partnership and hope to be able to make a positive announcement in the first quarter of 2013 about a pending economic development group that would be formed in the High Desert region, and have some type of a working relationship with Mr. Granillo, IEEP and all their other partners.
Lastly, I would like to thank the City of Adelanto, Town of Apple Valley, the City of Barstow, the City of Hesperia and the City of Victorville for their updates and their articles from their economic development professionals. The High Desert has the best economic development organizations within any region that we have done business and we continually encourage their efforts to work together, as we are all in this issue together. We hope that you are enjoying the gorgeous fall we have had. We hope that you enjoy the 2012 Holiday season, we look for to preparing the 52 edition of
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Dr. Barbieri has included clearly indicate the High Deserts current population as of January 1st, 2012 as 446,950 with an increase of 3,434± residents in the last 2 years. You will find his article very interesting. I asked Dr. Barbieri months ago what he thought expansion of the Panama Canal would have on industrial space in Southern California. Please read his articles about his prognosis for the future.
I asked our long time friend Mr. Bob Thompson of Advanced Listing Services to team with Dr. Barbieri to discuss what effect the shortage of homes is currently having on price increases within the High Desert region. The Bradco Companies typically stays away from issues within the Bradco High Desert Report, we are pleased that we have leased or sold nearly 1 million square feet of industrial and commercial space in the last 18 months. We thank those cooperating real estate brokers from within the area and out of the area for their expertise and their professionalism in these transactions.
I would like to re-welcome back Assemblyman Mr. Tim Donnelly and his article “Reviving California if Going to Take a Revolution”. Thank you to Ms. Violette Roberts of the Mojave Desert Air Quality Management District for its continued support in the articles that they supply.
Our current First District Supervisor, Mr. Brad Mitzelfelt has submitted
Publishers MessageContinued
continued on page 30
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the Bradco High Desert Report in February of 2013.
Lastly, and most importantly, if you wish to continue to receive a copy of the Bradco High Desert Report, any statistical reports, op-ed articles that we post to our website for free, please register at our website at www.thebradcocompanies.com/register. Thank you.
Adelanto California, A city known for its unlimited possibilities has taken a dramatic step in redefining the concept of sustainability and how it can best serve local neighborhoods, businesses, and long-term economic growth. A balanced design approach, achieved through collaboration, new technologies, and community feedback is just beginning. The project - Sustainable by Design - was awarded a state grant to design a new sustainable development model for desert communities in San Bernardino County. This program will create a framework that facilitates cooperation between public and private entities to promote sustainable development approaches, protect environmental resources, and forge a strong physical
and economic connection between the jobs center at the Southern California Logistics Airport and new mixed-use neighborhoods in North Adelanto.
Adelanto is the only city in the county to receive such a grant. The city consists of open spaces, open minds, and open hearts. It is a welcoming place of family values, friendly businesses, and progressive leadership. It’s a city whose name means progress, and this project, to be completed in the spring of 2014, is a perfect example.
For more information, please visit us at: www.adelantonorth2035.com.
Adelanto Chosen to Create New Planning ParadigmBy Mike Borja, Sr. Management AnalystCity of Adelanto, Development Services
The North Adelanto Community Planning Program Awarded State Grant to Design New Sustainable Development Model for Desert Communities in San
Bernardino County
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Keep abreast of the events in the most dynamic real estate market in Southern
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recently interviewed in Globe St., said of the close proximity of these two retailers, “It’s definitely a positive because it will bring more retail (critical mass) to the intersection, and we expect that it will also attract new customers from some of the outlying areas of the High Desert, such as Barstow, which should help create new tenant interest in Apple Valley Commons from those retailers looking for a more regional draw. As a side note, this is also a relocation of an existing Walmart that is currently across the street from our center.”
During the last seven years the Town attracted more than 3.5 million square feet of new retail, created by leading development companies, including Lewis Retail Centers and Malcom Riley and Associates.
Most recently, Apple Valley has seen eight consecutive quarters of sales tax revenue growth and since July 2011 issued 110 certificates of
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occupancy for new establishments, improvements, and expansions.
Yucca Loma BridgeWhile the dissolution of redevelopment agencies in California was a potential roadblock to this key piece of the High Desert regional transportation plan, Apple Valley was successful in keeping the funding intact. Although some details remain to be finalized with state and county agencies, the Town expects to award the contract for construction management in October 2012. The next steps will be the approval and issuance of bid documents.
Once under construction, the $31 million dollar Yucca Loma Bridge over the Mojave River will take approximately 24 months to complete. With the required improvements to Yucca Loma Road and Yates Road scheduled to be completed simultaneously with the new bridge, opening day should occur in 2015.
Get a SliceThe Town of Apple Valley continues to carry forward its economic development objectives. A team led by Town Manager Frank Robinson recently exhibited an Apple Valley booth and marketed a number of available commercial properties at the International Council of Shopping Centers retail conference in San Diego. The list of hot properties included a 40,000 square-foot former Ralphs’ grocery store in the geographic and civic center of town; the Fountains at Quail Ridge, a planned mixed-use center at a major intersection along the Yucca Loma Bridge Corridor; and, finally, a prime 4,300 square foot restaurant on a 47,000 square foot site, for lease at the most successful non-freeway intersection in the region, at Bear Valley and Apple Valley roads.
Proving the local retail market is rebounding, Jess Ranch Marketplace recently confirmed the regional commercial center has attracted the high desert’s first Ulta, a beauty retailer with nearly 500 stores nationwide. The 10,000 square foot store will open adjacent to Best Buy, Bed Bath and Beyond, Cinemark Theaters, and 24 Hour Fitness and will feature skin and hair care, cosmetics, fragrances, and a full-service salon. In addition, a new Denny’s restaurant will soon open adjacent to Red Robin.
Dollar General recently held its grand opening, one of the first seven to open in California, in a neighborhood lacking grocery and general merchandise stores.
As Walmart Supercenters open around the High Desert, a court challenge still remains regarding Apple Valley’s approved store. Although a firm start date has not been set, the store is expected to open in 2013 on Dale Evans Parkway directly across from Lewis Retail Center’s Apple Valley Commons, anchored by Super Target. Randall Lewis, EVP of Sales and Marketing,
Town of Apple Valley City UpdateBy Orlando Acevedo, Economic Development Manager
Skilled, Available Workforce
Solar Farms, Assembly and Manufacturing
Medical Device Manufacturing and Distribution
North Apple Valley Industrial Specific Plan
Shovel-Ready, Certified Sites
120-Day, Transparent Permit-Process
Logistics, Distribution and Warehousing Interstate-15 Direct Access
Premier Healthcare Services
Retail, Entertainment and Hospitality
(760) 240-7000 x 7920
Town of Apple Valley
Get a Slice of the Apple.www.getaslice.org
Strong, Business-Friendly Environment
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feet of fireproofing material. When the new hospital is complete, the overall project will have constituted an estimated investment of around $80 million in the Barstow community.
Lenwood Grade SeparationThe city has been working diligently with the County of San Bernardino and SANBAG to coordinate the construction of the Lenwood Grade Separation project. A number of design enhancements have been coordinated during the past several months and the project team is currently working on finalizing the engineering work and right-of-way coordination for the new bridge. In total, the Lenwood Grade Separation will cost an estimated $31.5 million and is on schedule to begin construction in 2013.
Wal-Mart Supercenter ExpansionDuring the past several months, the city has been engaged in an intensive review process with Wal-Mart representatives regarding the expansion of the current Wal-Mart store on Montara Road into a Supercenter format. Given the current project schedule, it is anticipated that the project will be considered for final approval in January 2013. The overall project includes building a new 184,000 square foot Wal-Mart Supercenter along with an addition 55,000 square feet of new retail development.
Barstow Industrial ParkAnother significant initiative that the city is coordinating is the revival of the Barstow Industrial Park project. In total, the Barstow Industrial Park spans over 1,174 acres and is located around 3 miles northwest of Interstate 15 and around 5 miles west of the Interstate 15 / Interstate 40 interchange. The city has been working very closely with the project developer and discussions are currently underway regarding infrastructure installation, utility coordination issues, and the construction of a rail-spur for additional site access. There are several potential end users that the city and the
There is no doubt that the economic downturn has impacted the city of Barstow. Even today, the signs of economic distress can be seen throughout the community as Barstow still has an unemployment rate of 14.7%. Unequivocally, there is still much work that needs to be done.
However, in the midst of the Great Recession, the city has during the past few years taken proactive steps to position the community as the next big thing in the Inland Empire’s High Desert region.
The process began by focusing on improving the physical appearance of the community. An aggressive $21 million capital improvement campaign centered on the enhancement of city infrastructure has been initiated. Furthermore, the city implemented a new economic development approach by employing sophisticated research tools to assist with business attraction and retention efforts.
It is also important to note that signs of an economic turnaround can be found when looking at demographic data in Barstow. From a statistical perspective, one measure that illustrates how a community’s economic health is trending can be seen through tracking the area’s median income levels. In the 2000 census, the Barstow area had a median income level of $35,069. As of the 2010 census, the median income levels for the Barstow area had increased around 37% to $48,042. This data means that the quality of the jobs in the Barstow area is improving and points to a positive trend for the local economy.
In addition to the statistical data, the City has been working on several important economic development projects that have the potential to dramatically improve the overall quality of life in Barstow.
Current significant projects that are underway in the community include the following:
Barstow Casino & Resort Project The Barstow Casino & Resort Project, which is being pursued as a partnership project between the Los Coyotes Band of Cahuilla & Cupeňo Indians and Bar West Gaming, is still a viable initiative that is in the review process. In order for the initiative to move forward, both the Federal Government and the State of California will have to agree to allow the project to be constructed. Currently, the Federal Government’s Department of the Interior is evaluating the proposed Barstow Casino & Resort project and it is anticipated that a final ruling will be issued before the end of 2012.
If the Department of the Interior approves the project as meeting federal guidelines, the next step in the process would be negotiating a gaming compact with the Office of California Governor Jerry Brown. That agreement would also have to be approved by the California State Legislature. To assist with these efforts, the city recently engaged the services of the lobbying firm Joe Gonsalves & Son to assist with developing a comprehensive strategy aimed at gaining sState approval for the project. If all the approvals are obtained, the overall casino project could be constructed in 2013 or 2014.
Barstow Community Hospital ProjectDuring the past several years, the city has been coordinating with Community Health Systems, Inc., on building a brand new state-of-the-art medical facility in town. Those efforts have culminated with the opening of the new Barstow Community Hospital. The ultra-modern three-story, 82,500 square feet facility features 30 private rooms, a high-tech emergency room, a modern intensive care center, a technologically advanced diagnostic imaging department, and innovative laboratories & surgical rooms. All told, building the updated facility required around 3,283 cubic yards of concrete, over 65 tons of concrete reinforced rebar, 476 tons of structural steel, and over 120,000 square
continued on page 30
Barstow City UpdateBy Oliver Chi, Assistant City Manager
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…Barstow is positioned to be the next big thing in the High Desert.
…Barstow is at the crossroads of opportunity… where the best is yet to come.
Any individual who would like to learn more about all that Barstow has to offer is encouraged to visit the city’s website at www.barstowca.org or to contact Oliver Chi, Assistant City Manager, via email at [email protected] or by telephone at (760) 577-4510.
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Barstow City UpdateContinued
developer are working with now in a joint effort to ensure that the Barstow Industrial Park becomes the High Desert’s premier logistics, manufacturing, and distribution hub.
Wal-Mart Distribution CenterThe city has continued to stay in close contact with representatives from Wal-Mart regarding the proposed construction of a cold-storage distribution center located adjacent to the city’s planned Industrial Park. In every conversation that the city has had with Wal-Mart, the message has remained consistent. Wal-Mart is still planning on constructing the distribution center in Barstow; however, the project is waiting for approval from the Wal-Mart Logistics Department. Given the recent number of Wal-Mart Supercenter conversions occurring in the high desert and throughout Southern California, in addition to the announcement that Wal-Mart will be testing a small-store format called Wal-Mart Express, it is likely that the distribution center in Barstow will be approved for construction in the near future.
Redevelopment Dissolution Impacts Minimal for Barstow
On December 29, 2011, the California Supreme Court upheld the legislation that effectively dissolved redevelopment agencies throughout the State. However, in Barstow, the city had created contingency plans over a year ago in anticipation that redevelopment agencies could be eliminated. The strategy that the city developed was focused on developing enough capacity within the General Fund to absorb necessary RDA expenses. For example, several employee positions that were previously paid for with redevelopment monies were transitioned to General Fund roles as part the FY 11/12 Budget. In addition, a new cost allocation formula that was instituted with the budget called for the RDA to pay for fewer General Fund expenses than in prior years. When the Supreme
Court ruled that redevelopment agencies in California were to be dissolved, the City of Barstow was ready to address the situation. While the dissolution of the RDA does create a financial impact on the city, overall, the elimination of redevelopment will not require any reductions or modifications to the city’s current operations.
Fort Irwin ProjectsFort Irwin and the United States Military have made a concerted effort to involve the local community in a variety of currently planned projects. While there are numerous improvements being coordinated by Fort Irwin, the two most significant initiatives include the construction of a $100 million water treatment plant and a $400 million hospital facility. These two projects, which will total an investment of over half a billion dollars in the greater Barstow area, are scheduled to break ground within the next year and are both scheduled for completion in 2015.
While the overall economic situation is still challenging, the current projects in the Barstow area illustrate that...
…Barstow is strategically situated midway between Los Angeles and Las Vegas.
…Barstow is a major transportation corridor that serves more than 60 million travelers and 19 million vehicles each year.
…Barstow is where the Interstates 15 & 40 and Highways 58 & 247 all converge.
…Barstow is home to the Tanger Outlets and Barstow Outlets, which provide shopping options that are usually only found in metropolitan areas.
…Barstow is where an eclectic mix of railroad, military, high technology, and mining employers have located.
…Barstow is home to a vibrant and caring community.
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Hesperia City UpdateBy Lisa K. LaMere, Economic Development Management Analyst
recently opened their doors in Hesperia, encouraged by the minimal red tape and Hesperia’s pro-business professional staff and City Council.
Tenant improvements for Pier One Imports are progressing on its 10,090 square foot store, located between Marshalls and JoAnn’s Fabric and Crafts, in the High Desert Gateway. An opening is expected before the end of November.
Chase Bank is also under construction in the High Desert Gateway center. The 4,207 square foot bank is projected to open in February 2013.
Main Street Medical, a 9,360 square foot medical office building on the north side of Main between Balsam Avenue and Eleventh Avenue, is close to opening and will house both a dentist and doctor’s office.
A building shared by Family Dollar and Aaron’s should begin construction by the end of the year at Main and Hickory. Aaron’s will operate a 6,500 square foot retail store, while Family Dollar will occupy 8,500 square feet.
The 2,250 square foot Oak Hills Brewery on Poplar Street west of the freeway, received its Certificate of Occupancy at the end of August.
Building plans for an 8,748 square foot O’Reilly Auto Parts on the north side of Main Street between E and G Avenues have been approved.
Five Guys Burger and Fries, another first in the High Desert, is leasing a 2,265 square foot space in the food court area of High Desert Gateway, and has had its plans for tenant improvements approved.
A 10,057 square foot Family Dollar on Main Street at I Avenue will soon open their retail store.
A 2,387 square foot Chipotle Mexican Grill has had its building plans approved for its newest location just north of In-N-Out on Mariposa Avenue.
Permits are expected to be pulled at the end of October for a 14,360 square foot,
Ranchero Road Underpass ProjectAs Phase I of the of the Ranchero Road Corridor Project , the $26 million Ranchero Road Underpass broke ground on August 31, 2011, and continues progressing ahead of schedule with trains already using the bridge and dirt being moved from one side of the tracks to the other to fill in the large drainage wash. This alternate east-west route through the southern portion of the city should be accessible to residents by summer of 2013. These improvements, stretching from Danbury Avenue on the east side to Seventh Avenue on the west, will greatly improve traffic options for travelers of the entire High Desert.
In order to move Phase II along, SANBAG and the City of Hesperia have partnered to build a $60 million interchange at Ranchero and I-15, which will break ground December 2012 and should provide access to travelers on Ranchero by summer of 2014.
Go to www.cityofhesperia.us to watch the construction progress on the City’s website.
Now Open for Business
Increasingly, retail, restaurant, and entertainment businesses are staking their claims in the City of Hesperia. One of Hesperia’s top priorities is to bring attractive lifestyle options to its ever-growing base of residents with household incomes that average $61,533.
Obviously new businesses coming to Hesperia bring new shopping and dining opportunities, but more importantly, they bring much needed jobs. Named for being one of the most affordable cities in the state to start a business and with a reputation for fast, efficient service, a minimum of red tape, a pro-business city council and staff, Hesperia is the perfect place for new business to thrive.
Hesperia’s long-awaited Walmart Supercenter, the flagship of the 43-acre future regional shopping center on which it is sited, opened at the end of September. The Supercenter has created 325 new
job opportunities, half of which were filled by Hesperia residents. Hesperia’s 195,350 square foot Walmart Supercenter includes not only general merchandise such as clothing, electronics, home furnishings, and housewares but also an Auto Center, Garden Center, Pharmacy, Vision Center, Grocery, and a Subway sandwich shop.
An example of another business testing the California waters by locating its first franchise in Hesperia is Beef ‘O’Brady’s. A Tampa-based franchise, its newly opened 6,009 square foot location has seating for approximately 250 patrons. Located in the former Bob’s Big Boy at Main Street and Cataba, it features 19 big-screen TVs and a diverse lunch and dinner menu. Designed for the whole family, there is a private room for parties and an entire room devoted to video games.
In July, Stater Bros. owner Jack Brown cut the ribbon on its largest Inland Empire Supermarket located in Hesperia. The 56,586 square foot grocery store has a variety of new concepts that helped set a record grand opening with more customers served than in any of its openings during the past 75 years.
Coming AttractionsHesperia Cinema 12 is now gracing the skyline along Civic Plaza Park and is definitely a first for Hesperia. The 37,000-square-foot movie theater, from developer Cinema West, is scheduled to open in November of this year. The theater joins more than 188,000 square feet of development in Hesperia’s Civic Plaza Center. Creating 40 new jobs, the new theater features 12 screens, start-of-the-art digital technology, expanded dining options, and stadium seating for 1,700 movie-goers. Streaming video of the construction is available at the City’s website.
On the HorizonIn various stages ranging from project approval, to actually being under construction, the following businesses will soon join a host of others who have
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High Desert ReportA quarterly economic overview
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City of Victorville – Fall 2012by Tracy Foster, Management Technician
two-story medical office building on the south side of Main Street between Cottonwood and Balsam Avenues.
Industrial projects: Aircraft parts manufacturing
High Tech Etch (HTE) purchased three warehouses totaling over 21,000 square feet on 2.05 acres in the industrial core of Hesperia. The largest of the warehouses is currently undergoing vast tenant improvements to, in part, accommodate in-ground chemical tanks for this aircraft parts manufacturer. HTE anticipates to be operational early in 2013.
Hesperia Enterprise ZoneCompanies located within the boundaries of Hesperia’s Enterprise Zone (EZ) continue to learn about the beneficial state tax incentives available to them. The most lucrative benefit is the Hiring Credit. To-date, the EZ has approved hiring vouchers that could amount to over $13 million in state tax credits returned to Hesperia businesses.
Feet on the StreetIn conjunction with the Hesperia Enterprise Zone, Economic Development staff have applied their shoe leather to the pavement and visited hundreds of businesses annually as part of the city’s Feet on the Street Retention and Expansion program. In the past two years, 550 businesses were visited, many in partnership with the San Bernardino County Workforce Development Department, wherein a survey was administered and information about the city’s and county’s free business programs was provided. From April 2012 through March 2013, city staff expects to visit 350 businesses.
Commercial, industrial, and retail opportunities abound throughout Hesperia. To find out more about operating in one of the most innovative Enterprise Zones in the country, or to request information about Hesperia’s retail or industrial sites, contact Steven Lantsberger, CED/EDFP at: (760) 947-1906, by e-mail at [email protected]; or visit www.cityofhesperia.us/econdev.
As the largest city in the High Desert, Victorville is leading the way towards a strong economic recovery for the region. Victorville’s population of 113,000 continues to grow and diversify faster than the national average. To keep up with that growth, several companies have located or expanded in Victorville in the past year. These signs point to a strengthening economy, with forecasts of more development in retail, industrial ,and even housing in the coming year.
Industrial
Industrial development has been key to job growth throughout Victorville over the past decade. This year, companies such as United Furniture Industries and M&M/Mars have brought in over 150 jobs to the region. M & M/Mars relocated from their existing Victorville location to a larger and more modern facility at Southern California Logistics Airport (SCLA). Their former site was not vacant for long as it became a perfect location for Church & Dwight, the parent company of Arm & Hammer. Church & Dwight opened operations in July, manufacturing Arm & Hammer liquid laundry detergent, XTRA laundry detergent, and Arm & Hammer clumping cat litter onsite.
Retail
Retail has seen a resurgence in 2012 with activity taking place throughout the city. In September, a brand new 193,000 square foot Walmart store opened to much fanfare and excitement. The new store is located just off Interstate – 15 and will provide a multitude of products, including a vast array of produce, meats, and other grocery products. Panera Bread began construction on a new restaurant in September, which will be located within the new Walmart shopping center off of Bear Valley Road and Interstate -15.
The largest retail development is the transformation taking place at the Mall
of Victor Valley. The mall itself is getting a makeover, with newly designed entrances and décor. The mall is also expanding, with construction taking place on two of its anchor locations. JCPenney’s is completing construction on its new 100,000 square feet location that doubles its current size. JCPenney’s new site will be open just in time for the busy holiday season. Victorville residents are very excited about Macy’s plans for its first store in the High Desert. Macy’s will open a 103,000 square-foot anchor at the former site of Gottschalks in 2013.
Southern California Logistics Airport
Southern California Logistics Airport continues to grow as the largest development project in the region. Several tenants have extended their lease agreements to remain in Victorville, including Leading Edge Aviation Services, Boeing, and the U.S. Army National Training Center. The Air National Guard also completed construction on a state-of-the-art $5 million hangar in June for its MQ-1 Predator program.
Future Growth
The future is even brighter for Victorville. Next year, SANBAG and CalTrans are expected to complete construction on the Nisqualli/La Mesa/Interstate – 15 interchange, alleviating traffic on other major thoroughfares in Victorville and nearby cities. Another very exciting development that will impact Victorville and the surrounding communities is the construction of a new hospital. St. Joseph, St. Mary just broke ground on construction of a $260 million facility that will include 128 beds and a level 3 trauma center. This will be the first trauma center in the Victor Valley and the only one between the San Bernardino Valley and Las Vegas.
Hesperia City UpdateContinued
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