The High Desert Report » July 2011

Monthly Archives: July 2011

General Transportation

The High Desert Corridor

Published by:

By Brad Mitzelfelt
1st District Supervisor, San Bernardino

 With stimulation of job growth as one of my top priorities, the High Desert Corridor project is especially exciting because it will attract long-term, sustainable economic growth and create immediate construction jobs while improving the quality of life High Desert residents, easing congestion, and speeding goods movement through Southern California and the West.

Post-war Southern California has followed a pattern of growth that promotes congestion. Bedroom communities become populated with commuters who increasingly clog overburdened roads and freeways to reach faraway jobs. Highway infrastructure lags decades behind and never catches up. Family time decreases as commuting time increases.

We can learn from that historical trend by creating state-of-the-art infrastructure first and, with good land use planning, create the kind of jobs and housing together to reduce commutes, improve safety and our quality of life.

The High Desert Corridor is a 50-mile truck expressway connecting State Route 14 in Palmdale (which connects with Interstate 5) to Interstate 15 in Victorville.

Given that road projects typically take decades from conception to construction, we knew we could not build this critical project in a traditional manner, at least not in an acceptable time frame.

Seeing that the federal Highway Trust Fund was tapped out, I along with Los Angeles County Supervisor Mike Antonovich decided to create a Joint Powers Authority to attract the private sector to invest in the financing and construction of the High Desert Corridor. The JPA Board also includes representatives of each county, town  and city along the route: Adelanto, Apple Valley, Victorville, Lancaster, and Palmdale.

JPA Option

I felt that if we combined private sector dollars in the public-private partnership model, which has worked in other states, wit forward-looking leadership by both counties along with San Bernardino Associated Governments (SANBAG) and the Los Angeles Metropolitan Transportation Authority (MTA), then we can accomplish in ten years what traditionally might have taken thirty.

To see the potential, you need only to look at a map. Southern California is literally the hub of international trade and from the High Desert, the spokes to the rest of the country are Interstates 15 and 40, along with the Union Pacific and BNSF Railway lines. But the east-west corridors, including Interstates 10 and 210, and State Route 60 are gridlocked, while Highways 138 and 58 are grossly inadequate to safely and efficiently handle the volumes of truck traffic they already have.

Highway 138 handles 15,000 vehicles a day with 10 percent of the volume being heavy trucks. Traffic volume between the fast-growing Antelope and Victor Valleys is projected to exceed 100,000 vehicles a day by 2035, with truck traffic increasing to 13 percent.

The need for a High Desert link between the Antelope Valley in Los Angeles County and the Victor Valley in San Bernardino County was foreseen in the 1930s when the Auto Club dubbed it the “L.A. Bypass.” That was before the current system was even built.

As population growth in the high Desert of both counties sprinted to the highest levels in the country during the past decade and the ports of Long Beach and Los Angeles continue to ship 40 percent of the nation’s imports through our region, the need for a new, high-speed has become undeniable.

Our project got a major boost when Los Angeles County voters in 2008 approved a half-cent sales tax for transportation projects (similar to our own Measure I) and specifically identified $33 million for the environmental review of the  High Desert Corridor. Los Angeles County MTA is now taking the lead on the environmental review and design, and has combined it with environmental work that has been underway for 10 years on the stretch from Victorville through Apple Valley which terminates at State Route 18 in Lucerne Valley.

The eastern stretch, which is being studied in the environmental review as part of the overall 63-mile study area, would connect to the High Desert Corridor interchange at Falchion road and Interstate 15 and continue east to Highway 18.

That part of the project will not happen until far into the future and would most likely be in the form of a traditional, realigned state highway segment. When funding does become available, extending the project east to serve the North Apple Valley Industrial Specific Plan would be a natural step. However, nothing east of Interstate 15 is part of the public-private partnership for which we are seeking federal funding in the next six-year transportation bill.

The agency held public meetings on the combined Environmental Impact Report here in the High Desert in recent weeks and there will be further opportunities for public input in the fall, with a draft environmental document scheduled for the fall of 2012, and a final document expected in the spring of 2013.

As part of the environmental review, MTA is required by law to study alternatives, and one of those is Highway 138 could ever be improved into a high-speed truck expressway, much less a toll facility.

Master planning of warehousing, shipping, and manufacturing along its route, including Southern California Logistics Airport, and the Adelanto, Hesperia, and Apple Valley industrial areas, will spur further growth in air freight and manufacturing, and the logistics and export jobs that go with those industries. Those new jobs have a significant multiplier effect when workers need – and can afford – retail, entertainment, and professional services.

Construction of the 50-mile project is estimated to employ 16,000 workers starting in 2016. And an independent study done in 2007 by Economic and Planning Systems, Inc. estimates the High Desert Corridor would stimulate 42,000 sustainable, long term jobs – about 28,000 of those in the logistics industry.

We are trying to get the federal government to use the High Desert Corridor as a laboratory for a new and exciting technologies. High Speed Rail could run alongside the route, providing a convenient link to the Southern California High Speed Rail Project.

Solar panels and wind turbines will be sited along the expressway to provide power for the project and also for sale into the grid, creating another revenue source to offset the costs of maintaining and operating the six-lane expressway, while helping the state meet its renewable energy goals.

With its innovative financing, its capacity as a corridor for utilities, renewable energy, and high speed rail, and its creation of local jobs and master planned communities that will reduce commuter miles and truck congestion, this project will help the state meet its greenhouse gas and renewable energy goals, while improving air quality and the quality of life for High Desert residents. It is the kind of creative, multipurpose 21st Century project that should qualify for funding in the new federal transportation bill to be discussed by Congress later this year.

For these and other reasons, the High Desert Corridor will mean a better and brighter future for the High Desert and for all of Southern California.

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General Transportation

High Desert Transportation Update

Published by:

By Jane Dreher
SanBag Public Information Offices

San Bernardino Associated Governments, known as SANBAG, is the council of governments and transportation planning 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 to extend from 2010-2040.

SANBAG looks at the transportation needs of the entire county and breaks into specialized committees, such as the Mountain Desert Committee. Following is a summary of some of the projects being planned for the High Desert.

LaMesa/Nisqualli Road Interchange

The LaMesa/Nisqualli Interchange will begin construction in fall 2011. The construction management contract will be awarded in June and the construction contract will be awarded in September 2011. This highly-awaited project will be both an alternative to Bear Valley Road and connect two population centers of the City of Victorville.

With a $7.5 million allocation of State Transportation Program Local Fund, SANBAG has now fully provided the $31.5 million public share of the LaMesa/Nisqualli Interchange construction. The total cost of the project is $96 million, with the balance being funded by the City of Victorville, development impact fees, the State Transportation Improvement Program, and federal demonstration funds.

High Desert Corridor

In recent months, efforts have been combined on this major project connecting San Bernardino and Los Angeles counties with the ports of Los Angeles and Long Beach. Los Angeles County Metropolitan Transportation Authority (Metro) is working on a Memorandum of Understanding (MOU) with the High Desert Corridor Joint Powers Authority (HDCJPA), the Southern California Association of Governments (SCAG), the San Bernardino Associated Governments (SANBAG), the State of California represented by the Department of Transportation (Caltrans), the County of Los Angeles and the County of San Bernardino represented by their respective Departments of Public Works, and the Cities of Lancaster, Palmdale, Victorville, Adelanto and the Town of Apple Valley for the environmental clearance of the HDC.

In April 2010, the Metro Board authorized entry into a MOU. Additionally, Caltrans will serve as the lead agency for the environmental clearance. In October 2009, the Board approved the HDC as one of the six high potential projects for Public Private Partnership (PPP) delivery method.

The project planning includes the construction of a new interchange near Falchion Road in the City of Victorville along with a new four-lane expressway, from the east side of Apple Valley to the existing US Highway-395 south of Air Expressway.

I-15/I-215 Interchange in Devore

In July 2010, the California Transportation Commission (CTC) selected the $359 million Devore Interchange Reconstruction project as one of 10 road construction projects statewide that Caltrans can construct using a streamlined project delivery method known as design-build. In addition to approving the project for design-build, the CTC approved a $118 million allocation from the State Highway Operation and Protection Program (SHOPP) for the project.

Design-build is a project delivery method in which the owner – in this case Caltrans – contracts with a single entity for both design and construction services for a project. Traditionally, public agencies contract with one company for design and a separate company to construct. However, Senate Bill 4 (SBX2 4), which was adopted last year, allows Caltrans to use design-build on up to 10 transportation projects.

The junction of Interstate 15 and Interstate 215, known as the Devore Interchange, is the worst bottleneck on I-15 in the County of San Bernardino. It was originally constructed in 1969. Today, the interchange handles an average of 160,000 vehicles a day, including about 21,000 trucks.

This project will benefit freight traffic, recreational travelers, and High Desert commuters. It is anticipated that an improved Devore Interchange will spur economic growth and improve the quality of life for all Southern California motorists traveling to the High Desert, Las Vegas, and beyond.

Drivers currently need to make multiple lane changes to stay on I-15 as they pass through the interchange. The project proposes to reconstruct the interchange to allow I-15 to be the main movement for vehicles. Drivers on I-215 would merge on and off I-15 from the right-hand side of the freeway. This design will allow drivers to travel through the interchange without having to change lanes or lose lanes in the process.

The design-build approach will accelerate the start of construction by approximately 17 months, allowing it to start in June 2012, as opposed to November 2013. Not only will this project improve traffic flow at the I-15/I-215 Devore Interchange but it includes reconnecting the historic Route 66 that currently dead-ends on both sides of the interchange. The project’s total cost estimate of $368 million for the anticipated 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

This fall, construction is expected to begin on the Yucca Loma Bridge project over the Mojave River. The final right of way is being obtained from the many agencies that control the waterway. Once finalized, proposals will be sought for construction management and construction. The Yucca Loma Bridge will connect Yucca Loma Road on the Apple Valley side with Yates Road on the Victorville side. The new roadway and bridge would 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 has also been working with the City of Victorville and San Bernardino County to complete the Yucca Loma Corridor to connect the bridge with Hesperia Road and the planned LaMesa/Nisqualli Interchange.

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. In addition, the Yucca Loma Bridge will provide the Town of Apple Valley with another crossing over the Mojave River and connect the urban/commercial cores of Victorville and Apple Valley. Starting at the corridor’s east end, the bridge will connect Yucca Loma Road to Yates Road, which will then connect to Hesperia Road via a new grade separation/bridge over the Burlington Northern Santa Fe railroad tracks. Drivers will then have easy access to Interstate 15 using the new interchange at LaMesa/Nisqualli Road on the west end of the corridor.

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 to serve four entrance and exit moves, construction of a new overcrossing structure at the I-15 freeway to provide east/west connections, and realign the frontage roads—Caliente Road and Mariposa Road—on either side of the freeway. The cost is anticipated at $80 million. Construction is scheduled to begin in Spring 2012. The City of Hesperia is the lead agency.

US-395 widening

Identification of funding for a phase of this project is a focus of SANBAG’s efforts for the High Desert.

This project will widen US-395 from Interstate 15 through Desert Flower 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 phase was completed in December 2009 and the project has entered the final design phase. The 12.5 miles of the project have been designed to be constructed in phases.

Victor Valley Transit Authority

The Victor Valley Transit Authority (VVTA) is one of five 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.

In January 2011, VVTA launched a new bus service that provides a link between Victor Valley and Barstow. Called the “B-V Link,” the new service makes several round trips between Barstow and Victor Valley three days of the week.

The B-V Link was originally created to provide Barstow residents a means of transportation to access oncology and other specialized medical services in the Victor Valley. The service evolved into a broader transit service to serve a variety of purposes.

This new intercity bus service operated by VVTA runs three days a week (Monday, Wednesday, Thursday), making three continuous loops per day between 7:50 a.m. to 6:00 p.m., with multiple stops in Barstow and the Victor Valley. The service is available to the general public and can be utilized by residents in all communities at various points.

SANBAG obtained funding for the B-V Link service from a federal Congestion Mitigation and Air Quality (CMAQ) grant as a three-year demonstration project. The grant will cover more than $70,000 per year for the cost of the route, with rider fees anticipated to cover the remaining $20,000 needed to cover the $90,000 annual expenses. One-way fares are $6, or $3 for seniors and disabled individuals. For routes, schedules, and additional information, go to:

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The New Barstow Community Hospital Reaches the ‘Topping Out’

Published by:

By Michael Stewart
Barstow Community Hospital CEO

The new Barstow Community Hospital celebrates its “topping out” on April 19, 2011, with the last piece of structural steel being placed. Somewhere between groundbreaking and ribbon cutting comes a little-known ceremony in construction called “topping out.” It occurs when the highest or last structural element is about to swung into place. This latest milestone in the construction of the new Barstow Community Hospital keeps the project on schedule for opening in late 2010.

Barstow Community Hospital celebrated the groundbreaking of the new hospital on September 8, 2010, with community members, local dignitaries, and hospital representatives taking part. The last groundbreaking for Barstow Community Hospital took place nearly 60 years ago in the early 1950s, so this groundbreaking marked a significant step in the evolution of care in the community.

Layton Construction, Irvine-based general contractor for the new hospital, began moving dirt on the new hospital property, 19.7 acres across Mountain View Street from the current hospital, even before the groundbreaking ceremony was held. More than 250,000 cubic yards of dirt was moved on the property before construction of the hospital began. It was a balanced site – no dirt was taken off the property or was brought in for fill. In early 2011, the general contractor began work on the hospital’s foundation and underground infrastructure. From March to mid- April 2011, the erection of steel was completed. By  the summer of 2011, the outer structure should take shape, and for nearly a year work will begin in earnest inside the structure so that the facility is open by the end of 2012. At the height of construction, the new hospital will employ between 150 to 200 construction workers on any given day.

Targeted construction milestones include:

  • Building dried in by July 2011
  • Substantial completion by June 2012
  • Equipment move-in, licensing summer/fall 2012
  • Opening late 2012

The new Barstow Community Hospital will be an advanced facility that will include all private rooms, a much bigger ER, expanded operating suites diagnostic imaging services area, and dramatic improvements in the obstetrical /maternity services area and the intensive care unit as compared to the current facility. The new Barstow Community Hospital will be a beautiful, modern facility that meets the needs of our community and is designed to allow for future expansions to accommodate a growing community.

To stay abreast of the latest news hospital construction news, visit Barstow Community Hospital’s web site at and select the new hospital home page.

If you would like to receive the full edition of the Bradco High Desert Report, our quarterly newsletter, please click on the link:

Economy General

Applying Lessons Learned from Our Past

Published by:

By Joseph W. Brady, CCIM, SIOR and Susan Bloomfield

As we turn the corner on the second quarter of 2011, any indications of recovery are met with trepidation and a great deal of speculation about our economic future. The last three to four years has challenged even the most seasoned veterans of economic downturns and the High Desert commercial real estate market was hit especially hard as most tertiary markets were. But we have had plenty of experience with boom-busts and there is a lot to learn from history. As the saying goes, “The more things change, the more they stay the same” and the following economic cycles throughout history make that statement one of the few certainties we can rely upon:

1929-1945: The Great Depression

On what is now referred to as Black Tuesday, October 29th, 1929 marked the beginning of the Great Depression following a period of great economic growth. With investors buying stock with borrowed money, as the market began to spiral downward, stockholders had to sell stock rapidly to make margin calls. The market dropped 12.8 percent with unemployment skyrocketing to 17 percent.

1945-1970: Economic Growth

The end of World War II ushered in economic growth that lasted nearly 25 years even with short and shallow recessions in the 1950s and 60s. With Kennedy’s Revenue Act of 1964, the economy was bolstered and continued to gain momentum.

1970-1982: High Oil Prices & Stagflation

The 70s delivered a decade of economic struggle. With an oil embargo brought against the U.S. by Saudi Arabia and OAPEC early in the decade and Iran toward the end, a slow economy already fraught with stagflation was further aggravated.

1982-1987: Greed is Good

A period of marked affluence and Wall Street success, this decade is well known for hostile takeovers and corporate raiders as well as leveraged buyouts or LBO’s allowing for private equity firms to purchase profitable companies with little to no capital, creating substantial wealth.

1987-1988: The Bubble Bursts

The stock market experienced another crash known as Black Monday where the Dow Jones Industrial Average fell 508.32 points leading to severe job losses on Wall Street. Although the single largest crash experienced on Wall Street, the economy recovered fairly quickly.

1989-1991: Savings & Loan Crisis

In an attempt to prevent failure, the government set about to rescue the S&Ls from extinction through deregulation. However, in a high-risk market environment, S&Ls had no ability to survive and the government spent billions trying to stop what was inevitable. Compounded by a real estate bust and Gulf War costs, the US again experienced a recession in the early 90s.

1995-2000: The Dot-Com Bubble Bursts

Speculation about the Internet and its impact on business ushered in a new period of excitement and deeply flawed business ventures. As thousands of Internet based start-up companies cropped up daily so did willing investors looking to create generational wealth. But as we learn time and again, what goes up must come down and holders of over –valued stock rushed to sell, creating another busted bubble in which many lost their jobs and wealth.

2001-2002: Greed Makes a Come Back

Corporate scandals rocked the early 2000s and creative accounting brought down corporate giant Enron and WorldCom. This period marked the beginning of CEO accountability and indictments. As corporations were scrutinized, the U.S. was further rocked by the tragedies of September 11, 2001 and terrorism and Homeland Security forever changed the American landscape.

2008-Present: The Credit Crisis

Some call this the ushering of the new and harsher economy after a long period of prosperity. Not since the Great Depression has the globe been plunged into a period of great uncertainty.

A large portion of U.S. mortgages issued were sub-prime with adjustable rate loans. As interest rates rose with loan resets, delinquencies started to soar. As investors lost faith in the declining value of mortgage-backed securities, credit lending practices were tightened causing a lack of liquidity and the dominos began to fall. Lehman Brothers and Bear Stearns are just two giants that permanently failed.

So What Is Next?

Current market data doesn’t provide enough clarity as to whether the High Desert is yet experiencing a true recovery. What does appear to be back is increased confidence spurring greater interest from users and investors in quality product.

So whether or not we are in the process of recovery or on the verge of double-dip, investments based on unsound fundamentals and irrational exuberance will happen time and again. What we predict before us must be based on lessons from the past.

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Economy General

San Bernardino State of the County

Published by:

By Mary Jane Olhasso

On April 6, the County of San Bernardino presented its State of the County address to close to 1,000 business, community, and government leaders. The address included information gathered as part of the Vision Process.

The County-wide Vision Process included thousands of online surveys, community meetings held throughout the county’s 24 cities and towns, as well as meetings with more than 25 business roundtables, including retail, environment, home building, military, education, health care, and commercial real estate, among others.

The Vision Process results outlined the county’s priorities as jobs, economy, education, housing, public safety, transportation, quality of life, environment, health care and image.

In an era of limited and competing resources, the county is striving to prioritize its resources wisely and invest its energies in aligning priorities with the collective vision for the county. Business development, infrastructure enhancements and economic growth can complement – not compete – with the region’s valued natural environment. The county recognizes that a strong balanced economy must be built on adequate physical and social infrastructure.

While major national media outlets such as Forbes recognize the county for its pro business climate, the County’s Board of Supervisors are aware that they must provide stable leadership, predictable decision-making, and timely processing to attract and retain a wide range of employers who can offer high quality jobs that match the skills of the population in our area.

When you consider the current state of the economy, it is apparent that the number one priority should be jobs. However it is not sufficient to simply address unemployment, the county must also lay a foundation for future community-wide prosperity, with education as its cornerstone. The local economy will not improve nor grow any faster than the skills and abilities of its people.

In a fast-paced regional, national, and global competitive economy, the county must fight to maintain its competitiveness. The region benefits from an innovation corridor of 18 colleges and universities. Since 2003, the proportion of residents over 25 with a bachelor’s degree or higher is rising at a faster rate than the state and the nation. This fact coupled with a focus on industry-specific job training, the county is working toward preparing its workforce for the jobs of today and the opportunities of tomorrow.

To better understand the region’s job growth potential, consider the fact that between 2000 and 2008 San Bernardino County experienced 47 percent growth in professional, scientific, and technical services. In the next cycle, renewable energy, mining, advanced manufacturing, tourism, healthcare, and goods movement are only a few of the employment opportunities the county is poised to capture.

Fundamentally, the county has many advantages. It benefits from a population that ranks the region as 5th largest county in California and 12th largest county in the US. It also benefits from having a relatively young population with a median age of 31 and a workforce that numbers close to 1 million. Its strategic location in the center of Southern California puts its residents and businesses at the center of a consumer market of 22 million people. Finally the county’s wide range of affordable housing creates an attainable lifestyle. These advantages coupled with unparalleled recreation and a true county-wide sense of community make San Bernardino County a place where the American dream can come true. These advantages also provide for the opportunity to create a “complete county.”

A “complete county” is one that affords all citizens an opportunity for healthy lifestyles, strong public safety, employment opportunities, a range of educational opportunities, and quality amenities. The County of San Bernardino will become greater than the sum of its parts by recognizing, embracing, and celebrating the region’s cultural, economic, and geographic diversity and working together to promote its many strengths.

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Economy General Property

Victor Valley Housing and BIA Efforts Hold Keys to Recovery

Published by:

By Carlos Rodriguez
CEO Building Industry Association Baldy View Chapter

Residential construction in the Victor Valley and along the I-15 corridor cities leading to the region holds the key to San Bernardino County’s economic recovery, and the Building Industry Association (BIA) Baldy View Chapter is launching a program to ensure it happens.

According to figures released by the Construction Industry Research Board (CIRB) and compiled by the Chapter, “the Victor Valley and I-15 corridor continues to anchor our recovery and will provide the gateway to prosperity,” said BIA Baldy View President Jonathan Weldy of Meridian Land Development.

“In 2010, the four incorporated Victor Valley cities of Hesperia, Adelanto, Apple Valley, Victorville and unincorporated county areas in their spheres of influence accounted for over 40 percent of the 1,844 single – and multi – family permits issued in all of San Bernardino County in 2010,” Weldy said.

To ensure this recovery, the BIA Baldy View Chapter launched its own recovery strategy: the BIA Baldy View Jobs Creation Initiative – Keys to Restoring the Health of the Building Industry and our Region’s economy.

“When added to the total of the I-15 corridor cities of Ontario, Rancho Cucamonga, and Fontana in the Inland Valley, nearly 70 percent of the building in San Bernardino County took place along this important corridor in 2010 in a trend that has continued since 2005”.

While over one third of all the permits issued in the county were for multi-family uses, nearly 90 percent of the permits issued in the Victor Valley region were for single – family homes and over half of the 2010 single – family permits issued in the entire county last year were issued in the Victor Valley.

Weldy said the Chapter’s Job creation Initiative’s four – tiered approach incorporates a continued push for development impact fee (DIF) reductions, deferring  DIF payments to issuance pf a certificate of occupancy (particularly in school districts), implementing a lien policy regarding performance bonds in cities that have not adopted the ordinance and monitoring the implementation of SB375 – a land -use planning bill that aims to reduce greenhouse gas emissions through the reduction of vehicle miles traveled (VMTs) – in coordination with Southern California Associated Governments (SCAG) and San Bernardino Associated Governments (SANBAG).

“The importance of the Chapter’s Jobs Creation Initiative is that the current downturn imposes contradictory challenges on governments to the seemingly obvious approach to spurring economic recovery by encouraging homebuilding,” said former BIA Baldy View Chapter President Todd Tatum of the Victorville – based American Housing Group.

“Local governments faced with critical shortfalls and deficits resist considering or implementing fee reductions when projecting their budgets,” Tatum said. Yet, “I think now cities and city staffs realize that what homebuilding brought to the city in terms of overall community development: major employment, tax revenue streams, infrastructure, parks and libraries,” he added.

” They realize homebuilders are really the drivers of the economy.”

Because a decade – long shortfall of new housing fueled both the housing boom and bust earlier in the decade, revitalizing the housing market holds the key to economic recovery in the region and the state, according to noted economist John E. Husing, Ph.D., of Economics & Politics, Inc., in his 2009 report The Housing Crisis Issues & Potential Strategies.

Fundamentally, the Inland Empire has moved into a deepening recession because of what has occurred in its residential market,” said Husing.

According to the report, housing demand outstripped supply, fulfilling the classic definition of inflation as ‘too many dollars following too few products.’ Husing notes that the ratio of residents to single – family dwelling units was 4.66 as the region recovered from the post – Cold War recession in 1997. However, over the intervening decade, 5.71 people were added for each new single – family unit built during that period.

“To keep the ratio intact at 4.66, another 156,700 units would have had to have been built or 15,670 per year in this ten year period. San Bernardino over that period fell short by nearly 30,000 units,” he added.

The region’s recovery now hinges on “a resumption of residential construction activity,” Husing said. This is the case as the Inland Empire’s competitive advantages are the availability of land that can support new homes and industrial facilities as well as a large marginally educated adult population.

“In the meantime, new home development will stagnate and the recession will persist, unless policy action is undertaken to make home building profitable,” he added.

“And profitability is one of the major issues confronting homebuilders,” said BIA Baldy View Vice President Todd Leibl of Victory Homes. “Current inventories of repossessed homes, short sales, and distressed properties continue to hamstring investment in homebuilding by keeping prices artificially low.” However, he added, “as inventories are liquidated prices should return to reasonable levels.”

“Once that happens,” said Leibl, “we’ll be back in the building business.”

In addition, local governments need to adjust their fee structures to the realities of the current housing market and create incentives for homebuilding, local governments under pressure to maintain staffing levels and entitlement programs.

“The BIA has made an extreme effort with the Jobs Creation Initiative, but you have to have a government that wants to understand the issues and have the ability to make those changes,” Leibl said.

To make housing profitable, Husing recommends steps mirroring the Chapter’s Initiative, such as reducing DIFs while encouraging public policies that enable more compact and affordable housing and new home community designs consistent with the goals of SB375. With these programs in place, San Bernardino County will be positioned for return to prosperity.

The BIA Baldy View Chapter represents homebuilders and associates in the housing industry in all of San Bernardino County and the easternmost portion of Los Angeles County. Founded in 1938, the Baldy View Chapter is the most honored homebuilding chapter in the nation. It is a member of the California Building Association (CBIA), a statewide trade association representing nearly 6,000 businesses including homebuilders,remodelers, subcontractors, architects, engineers, designers, and other industry professionals.


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Economy General

The Difference a Year Makes

Published by:

By Bob Thompson
Advanced Listing Services

It is a surety that one day the current troubles in the real estate market will end and appreciation will replace the pervasive depreciation that rules today’s market—but not today. But if not today, when?

Guessing when a market will turn for any good or service is an imperfect exercise due to the number of independent variables that affect the final outcome. The changes and differences in this myriad of small variables make up the large overall swings that become apparent only after they have occurred.

One such indicator is the supply of properties on the market, or current listings. Observe Table 1. In April of 2010 there were 1,554 units of supply on the market in the listed cities. This year there are 76 fewer or 1,478. This informs us that these markets are highly predictable as to supply from year to year. Notice that the number of listings has declined 5%; however the number of REO listings have declined 17%.

We can also see the large differential in prices between non REO in 2010 and non REO 2011. The absolute level of median price declined about 12%. REO declined about 15%. The difference between the two in 2010 was 31%, in 2011 about 34%.

What can be concluded from this narrow study?

(1) REOs as a percentage of the total market fell about 17% between the two years.

(2) In 2010, 33% of the market was REO. Today it is about 29%.

(3) REO, because of price differentials, exercises a strong negative influence on the price line.

(4) REO, while declining, is doing so at a slow pace.

(5) REO will continue to populate the market in high numbers for the next 1-2 years.

(6) Consequently, from a supply perspective, prices will remain weak and in decline into the foreseeable future.

The difference a year makes is that the end of the beginning has begun. REO inventories must decline to achieve price stability, and they are. As REO inventory declines, a tipping point will be reached and prices will firm and turn from negative to positive. This tipping point should not be expected to occur in the near term as markets move slowly but inexorably.

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Air Quality General

Air District Offers Emission-Reduction Grants Up to $1,000,000 Available in the High Desert

Published by:

By Eldon Heaston
Executive Director, MDAQMD

The Mojave Desert Air Quality Management District is now accepting proposals for projects that reduce smog forming emissions from motor vehicles and help improve air quality in the High Desert portion of San Bernardino County and in Riverside County’s Palo Verde Valley.

Approximately $1,000,000 in grant monies is available to public or private entities for projects that reduce emissions from mobile sources, which account for more that 60% of air pollutant emissions gauged in the High Desert. Eligible projects include those that reduce vehicle trips or miles traveled, or encourage the use of alternative travel modes, such as public transit. Projects related to alternative fuel vehicles, parking management, telecommuting, and public education programs that do not duplicate the MDAQMD’s mobile source education efforts are additional examples of projects which may be eligible for funding. 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.

The AB2766 grant program is funded through vehicle registration fees, which the local air agency uses to support programs that reduce air pollution from motor vehicles, as required by law. Past projects funded through the program include a Park and Ride lot in the City of Hesperia, LNG/CNG fueling station in the City of Barstow and two haul truck repowers for Hi Grade Materials of Hesperia.

Proposals will be competitively evaluated, and accepted through June 1, 2011 at 5:00PM. For more information on the competitive grant process, or to obtain a copy of the Call for projects, please call (760) 245-1661, ext. 1885, or visit the district’s website at

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General Water

Preparing for the Next Drought and Beyond

Published by:

By Michael Stevens
Community Liaison Officer

There’s a saying that goes: “No one plans to fail, but many fail to plan.” This adage, however, cannot apply to Mojave Water Agency (MWA) and most water agencies in the High Desert as we work to provide water for a region totaling 437,357 people-and expected to increase 60% by 2035 to 706,388.

The adage can’t apply because in 1983, the State of California adopted the Urban Water Management Planning Act, which requires water agencies to prepare an Urban Water Management Plan (UWMP) every five years when a water agency’s service area includes at least 3,000 connections or water deliveries are equal to or greater than 3,000 acre-feet per year.

Despite better-than-average precipitation levels this past winter and this spring-and the recent cancellation of a three-year statewide drought-the state’s water resources are still subject to increasing demand for a finite supply. Urban Water Management Plans are developed and implemented at the local level in order to ensure effective conservation, water use efficiency and long-term supply reliability. And the Plans work!

For Mojave Water Agency its Plan works because of a proven track record of planning, preparing, and positioning. The Urban Water Management Planning Act requires water agencies to assess growth trends and project water demands a minimum of 20 years in the future. But adoption of the UWMP is one step that helps our region meet future water demands.

Equally critical is executing the Plan and making decisions at the right time, and taking advantage of opportunities that sometimes aren’t always available. One such decision by MWA occured in 1997. Recognizing the explosive growth in the High Desert region, the MWA board made a decision in an intense bidding climate to purchase additional water rights to meet future local water demands.

Again in 2009 the board purchased additional water rights with an “eye on the future” didn’t take too long to arrive because in 2010 the Agency was able to cash in and not just have “access” to water rights but was able to “purchase water” as a result of the additional water rights.

What this means is that MWA’s water deliveries in 2010 through the State Water Project marked the second year in a row the Agency took delivery of its full amount of water available (41,400 acre-feet) but without the acquisition of the additional water rights the total would only have been 37,900! The water delivered was enough to meet all of MWA’s delivery obligations-with 17,600 acre-feet going to underground storage for future use. MWA has planned, prepared, and positioned itself for several years and will continue with the goal of “leaving no water behind.”

Another Key decision enabling the Agency to meet water demands well beyond 20-years was the investment in aggressive water conservation starting in February 2008. The $3,146,605 million dollar invested in the conservation program thus far has seen 3.6 million square footage of turf removed, 1,200 toilets replaced with high efficiency toilets, and 1,989 high efficiency clothes washer rebates issued-resulting in a savings of 876 acre-feet of water. One acre-foot (approximately 326,000 gallons) is enough water to serve a family of four for a year.

The decisions to purchase additional water rights and invest in conservation enabled the Agency’s UWMP to exceed the state’s minimum of 25-years with the ability to plan for beyond.

The public will have several opportunities to provide input about the UWMP during a 30-day public comment period between April 5-May 5 while the draft is available for public review. To view the report you can visit the MWA website: ( or to see a hard copy, visit either local library branch or MWA’s front counter. In addition, the MWA Board of Directors will hold a workshop on April 14th and a public hearing on May 5th before adopting the plan on June 9th.

For more information about Mojave Water Agency, visit our website: www.mojavewater.orgor Facebook page:, or to speak to someone call: 1-800-254-4242.

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General Water

Taking the Waste Out of Wastewater

Published by:

By Ryan Orr
Victor Valley Wastewater Reclamation Authority

Many High Desert residents don’t realize that the water they’re using to irrigate their gardens and lawns, and that municipalities use to irrigate parks, schools and golf courses, is perfectly safe for drinking.

At the Victor Valley Wastewater Reclamation Authority, we believe this precious resource should be conserved for just drinking and other uses that will sustain our water resources. The agency is introducing two new facilities, that when built out, will provide more than four million gallons of treated, reclaimed water to irrigate nearby parks and golf courses.

This much-needed benefit will not only help conserve water in our drought-ridden region but also create extra capacity in VVWRA’s currently crowded sewer pipe system, allowing for continued responsible growth and making way for new businesses to come to the Victor Valley.

“The Agency has been working on these projects for close to 20 years, and we’re very close to getting them built,” said Logan Olds, General Manager of VVWRA. “This will be an invaluable resource for our growing communities.”

Currently less than one half percent of our basin’s water demand is met by reclaimed water – being used at Westwinds golf course in Victorville. These facilities will serve to sharply increase that percentage and finally put us on an even playing field with other communities in the Inland Empire that have been utilizing this resource for years.

Building these facilities is an important part in both handling wastewater flow and sustaining local water supplies to build a sustainable path for the future of the Victor Valley.

Recycled water equals greener parks at lower costs; VVWRA’s Recycled Water Program needs the Valley’s support.

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