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Daily Archives: June 7, 2016

Economy General Property

2016 Economic and Housing Market Outlook

Published by:

By Oscar Wei, Senior Economist

CALIFORNIA ASSOCIATION OF REALTORS®

Economic Outlook

The U.S. economy ended last year with a lackluster performance of 1.4% annual­ized growth rate in the fourth quarter of 2015. While the annual increase in GDP in 2015 maintained the pace as that of 2014, it was a letdown for many econo­mists who predicted a stronger outlook for the nation last year. The subpar per­formance of the year was due to multiple factors including: 1) the sharp decline in oil and commodity prices; 2) the eco­nomic slowdowns in China, Europe, and Canada; and, 3) a strong dollar that makes American goods relatively expensive and weakens demand overseas. Despite the hiccups in recent quarters, the labor mar­ket continued to improve, with nonfarm employment averaging a gain of more than 233,000 new jobs per month in the last 12 months. The unemployment rate in March 2016 also reached a near-full employment level of 5% that we have not seen since 2007.

Meanwhile, the economy of California continued to grow at a faster pace than that of the nation as technology and tourism pushed the state economic growth ahead of much of the country. The strong per­formance in the labor market is an illustra­tion of how well the Golden State has been doing in recent years. The unemployment rate in California dropped to 5.5% in Feb­ruary, the lowest level observed since Au­gust 2007. Statewide job growth has been rising at or near 3% year-over-year since late 2012. While the unemployment rate in California remained above that of the U.S., the growth in the job market at the state level has been outpacing the nation since March 2012. Overall, the outlook for the economy remains positive with continued improvement in consumer, business, and state and local government spending in 2016.

California Housing Market Outlook

With the economic fundamentals remain­ing strong in California, the state housing market has had a solid performance since the beginning of this year. Through the first two months of 2016, sales of exist­ing single-family detached homes have surpassed the sales level at the same point of 2015 by 7.6%. When compared to the previous year, sales in February in­creased in most price segments except for those properties priced under $200K, between $300K and $400K, and homes over $2,000,000. Homes priced between $1,000,000 and $2,000,000 experienced the strongest growth—rising by 10.8% over February 2015.

Much of the growth in Southern Califor­nia in particular was driven by the Inland Empire as sales in Riverside and San Ber­nardino were 7.5% and 5.1% above last year. Orange County saw a 1.5% increase in sales last month. However, Los Ange­les, San Diego and Ventura all experi­enced negative growth in February. In the Bay Area, only Solano and Sonoma saw an increase in home sales, suggesting that tight inventories are beginning to nega­tively impact activity.

As for the statewide median home price, growth rate cooled to a 3.8% annual pace in February 2015 as the statewide median price increased to $446,460. This marks the slowest rate of growth for home price in six months and likely reflects the shift of sales activity toward the Central Valley which has lower home prices on average. As tight inventory in the Bay Area and Southern California drive a larger share of activity in more affordable areas, price growth should continue to normalize in the remainder of 2016.

The statewide housing supply remains an issue as the demand for housing contin­ues to outpace the growth in inventory. While it is a welcome sign to see steady improvement in housing demand, the lack of supply is definitely a concern. The im­balance between the two sides not only intensifies market competition and pushes home prices higher, but it also leads to housing affordability issues that will ulti­mately lower homeownership rates if the problem persists.

The supply constraint in the Bay Area is more pronounced and has led to fewer homes being sold in the high-cost region. On the other hand, demand in regions with more affordable housing continues to improve and more home sales will like­ly take place in the coming year. As such, a slow-down in home price appreciation at the state level is anticipated as the mix of sales changes in favor of lower-priced properties in 2016.

High Desert Regional Housing Market Outlook

Home sales activity continued to improve in the High Desert region at the beginning of 2016. The number of single-family detached homes sold in February 2016 increased 4.5% when compared to the same time last year. In fact, sales have been improving on a year-over-year basis for every month since March 2015. The year 2015 was also the first year since 2009 that the market experienced a year-over-year gain in sales. With the econo­my expected to improve in the upcoming year, sales in the regional housing market should continue to grow with a mid-single digit in 2016.

The median home price of the High Des­ert region remained on an upward trend in the most recent month. When com­pared to last year, the regional median price increased 8.5% to $203,600 in Feb­ruary. Over the last twelve months, the year-over-year gain in median price has an average of 9.6%, slightly higher than the statewide average of 6.0% for the same time frame. Home prices in the High Desert region have been improv­ing since 2012, with its annual median price increasing 24.5% in 2013, 16.6% in 2014, and 9.2% in 2015. Despite the upward trend in price in recent years, the regional median price in February 2016 remained 39.6% below the cyclical peak reached in June 2006 but was up 90.9% from the recent cyclical bottom reached in April 2009. For the rest of 2016, increase in housing demand in the region should put upward momentum on home prices as the economy continues to improve. The regional median price could increase year over year by a mid-to high-single digit in 2016.

Economic and Housing Market Forecast

Fig 1: Sales of single-family homes (High Desert)

Fig 1: Sales of single-family homes (High Desert)

Looking ahead, the state economy should continue to grow through 2016, as the high-tech sector remains in the driver seat. New product development may disrupt in­dustries across the globe, but it could also yield sizable revenue and have significant spillover effect in their respective local economies. The construction industry is an example that shows how the rapid ex­pansion of technology firms throughout Silicon Valley has helped to drive the con­struction payrolls to increase by double-digits over the past year. Improvement in the construction industry is expected in the upcoming year and will help to push the economy forward. The statewide non-farm job growth will increase by 2.3% in 2016, and the unemployment rate in Cali­fornia will fall from 6.2% in 2015 to 5.5% in 2016.

Meanwhile, the California housing market is expected to have a decent performance in 2016. The Federal Reserve will most likely raise the federal funds rate two to three times in 2016. Modestly higher in­terest rates, however, should not present much of a direct challenge to the hous­ing market. With the economy expected to grow, housing demand should continue its upward trend, with sales of existing single-family homes projected to increase 6.3% in 2016 to 432,570.

Fig 2: Median price of single-family homes (High Desert)

Fig 2: Median price of single-family homes (High Desert)

Inadequate supply in high-end areas such as the Bay Area will continue to exert up­ward pressure on prices, but home sales in those regions will simultaneously be constraint. The constraint in home sales in the Bay Area leads to a decline in the share of high-end homes sales to overall home sales, which could also lead to a slow-down in the appreciation in the state­wide median price. As such, the statewide median price is expected to increase at a moderate pace of 3.2% in 2016 as more homes in the affordably-priced Central Valley and Inland Empire are being sold.

Risks that Could Tip the Scales

Fig 1: California Housing Forecast

Fig 1: California Housing Forecast

Although the outlook for both the econo­my and the housing market remains posi­tive for 2016, there are uncertainties and wildcards in 2016 that could change the outcome and tip the scales the other way. Global economic issues, for example, could begin taking a toll on economic growth domestically in 2016. Slow eco­nomic growth in China and other Europe­an countries, coupled with stronger growth in the U.S., have paved the way for higher interest rates and led to a stronger dollar. As such, international trade will likely be a drag on growth with global economic slow-down and the stronger dollar cut demand for exports, while continued improvement in consumer spending will pull in more imports.

Robust increase in jobs in high-cost ar­eas could be another downside risk to the housing market. Due to the spillover ef­fect of growth in high-paying jobs, plenty of lower-paying jobs have been created, with many of these jobs being in the same geographic areas where the high paying jobs are being added. As such, income disparity in these areas could further com­plicate and deteriorate the housing afford­ability issue.

Policymakers continue to list the mortgage interest deduction (MID) as a potential tar­get in any movement toward tax reform. If MID were to be eliminated, home buy­ers would not have the tax savings benefit of homeownership, thus reducing their incentive to purchase a house, lowering the demand for housing, and thus reduc­ing affordable homeownership across the country and the State of California. The economic impact would stress the state’s already battered balance sheet and, if any of the proposed changes were to come to fruition, could amount to billions of dollars of economic output lost.

While the recent volatility of the stock market has been drawing attention in the news, it is more of a distraction rather than a disruption to the continual improvement in the housing market. The drop in values of equity in January reduces the overall wealth and may have a small negative ef­fect on the economy in general. Its impact to the housing market, however, should be minor, as solid employment conditions, anticipated increase in household forma­tions, and record-low interest rates contin­ue to provide support to the fundamentals of the housing market.

 

Economy General

Economic Report: Job Growth on the Horizon

Published by:

Economic Report: Job Growth on the Horizon

By Sandy Harmsen, Executive Director,

County of San Bernardino Workforce Development Board

The San Bernardino County Workforce Development Board (WDB) commissioned the Virginia-based consultant Chmura Economics and Analytics to conduct in-depth analyses of the Inland Empire’s economic vitality on an annual basis. The purpose of the analysis was to assist the Board in determining future actions that will support growing industry sectors to strengthen the workforce talent pipeline. In addition it provides an accurate guide to where the WDB should invest funds to ensure the availability of skilled workers in the projected growth sectors.

The study denotes there are positive indicators on the horizon. The employment rate is expected to rise 3.5% this year, a statistic that outperforms the state of California and the nation.

Industries are thriving and creating jobs. The Chmura analysis shows that since 2012, 88% of employment in the Inland Empire has been driven by six projected growth sectors: Healthcare and social assistance; transportation and warehousing; manufacturing; construction; utili­ties; professional, scientific, and techni­cal services.

Construction, healthcare, and utilities are the growth sectors forecasted to grow more rapidly in the near future. As a result of this new data, the WDB can efficiently allocate federal dollars appropriately to bolster the acceleration of growth for these businesses.

The analysis explains that manufacturing is the most important sector of economic activity. Average wages in manufacturing are 20% higher than the average of all other industries; therefore, this industry holds enormous employment potential for the growing population of young workers who would replace numerous retiring workers.

This information suggests a key area of opportunity for the Workforce Development Board to assist both the job seeker and employer. Young job seekers receive services such as occupational skills train­ing, counseling, internships, job place­ments, mentoring, tutoring, leadership development, and support services. Pro­grams are designed to help youth achieve academic and employment success.

Adult job seekers can access a number of services at the High Desert America’s Job Center of California (AJCC) locat­ed in Victorville, which include resume writing, interview training, job training and placement, career counseling and skills assessment. For more informa­tion, please call the High Desert AJCC at 760.552.6550.

For business owners there is a team of Business Service Representatives avail­able to provide assistance with On-the-Job Training, customized recruitment services, and easy access to a large pool of pre-screened applicants.

A free Human Resources Hotline is available to San Bernardino County businesses 24 hours a day. Advisors at the hotline deal with a variety of inquiries ,including questions on wages and hourly rates, leave laws, hiring and termination procedures, handbooks and policies, attendance, and attitude and discipline problems. Businesses can access the free Human Resources Hotline by calling 1.800.399.5331 or visiting www.employers.org. To read more about the hotline, visit http://mediasourcelink.com/human-resources-free-hotline-of­fers-help-to-local-businesses/.

In addition to providing excellent services to businesses and job seekers, the WDB strives to ensure that employment and training services are coordinated so that job seekers acquire industry recognized skills and credentials. Riverside County has partnered with the WDB to form the Inland Empire Consortium for the statewide SlingShot initiative, a project to accelerate income mobility for the local workforce through employer-informed training and education.

The consortium works to link, align and leverage the assets and resources of economic development, education and workforce development partners. It implements a regional economic and work­force development strategy designed to ensure greater prosperity and opportunity.

For more information on the San Bernar­dino County Workforce Development Board, please visit www.csb-win.org or call 800.451.JOBS.

About the Workforce Development Board of San Bernardino County:

The Workforce Development Board of San Bernardino County (WDB) is comprised of private business representatives and public partners appointed by the County of San Bernardino Board of Su­pervisors. The WDB strives to strengthen the skills of the County’s workforce through partnerships with business-education- and community-based organizations. The County of San Bernardino Board of Supervisors is committed to providing county resources which generate jobs and investment in line with the Countywide Vision.

The Workforce Development Board, through the County of San Bernardino’s Economic Development Agency and Workforce Development Department, operates the County of San Bernar­dino’s three America’s Job Centers of California (AJCC). The AJCCs provide individuals with job training, placement and the tools to strengthen their skills to achieve a higher quality of life. The AJCCs also support and provide services to the County’s businesses, including employee recruitment and business retention programs.

Employers and job seekers who are interested in the Workforce Development Board programs may call: 800.451.JOBS or visit www.csb-win.org. Also follow us on: Facebook www.facebook.com/SBWIB; Twitter @InlandEmpireJob; and YouTube http://www.youtube.com/SBCountyWIB.

City Updates General

Adelanto City Update-Spring 2016

Published by:

City of Adelanto

Adelanto-Resiliency in Progress!

By Michael Stevens

Communications Consultant; City of Adelanto

Resiliency, the ability to overcome challenges of all kinds–and bounce back stronger, wiser…you don’t have to look any further than the City of Adelanto to see how it works.

Whatever opinion you might have about Adelanto, good or bad, suspend your con­clusion until after you’ve read this article. Adelanto, the third oldest of the five mu­nicipalities that comprise the High Desert region of northern San Bernardino County, has been known as the “City with Unlimited Possibilities.”

Even though the designation “City with Un­limited Possibilities” remains true, the city now prefers the slogan “Progress by De­sign.” I’ll describe how later.

For the past 46 years, the City of Adelanto has continued to attract businesses and resi­dents due to its prime location in the High Desert. Strategically located within 90 miles of Los Angeles, the city boasts five Indus­trial Parks, including one of the largest areas of industrial land available for development in the High Desert with 11.41 square miles of land zoned for industrial and business zoning, ample vacant land in its 52 square miles, and a pro-business City Council. Ad­elanto is well positioned to accommodate future growth and development.

How has the City Progressed?

Adelanto has experienced a metamorphosis since the great recession of 2008, starting with the election of three new councilmem­bers in 2014 and the appointment of a new city manager in 2016. But more important­ly, the progress didn’t end there. Not para­lyzed by fear of being condemned, ridiculed or criticized, the City Council demonstrated bold, courageous leadership and made sev­eral tough decisions to keep the city from the verge of bankruptcy.

Although the city still faces fiscal challeng­es due to the recession, decisions made that are helping to put the city on stable financial footing include:

  • staff reductions and consolidation of staffing services that resulted in approxi­mately $365,000 in salary savings plus ben­efits;
  • passed an Ordinance and Resolution that will bring prison participation rate rev­enues from approximately $177,938 per year up to $963,600 per year or an increase of $785,662 annually; these measures will also provide one additional police officer (a second when a new facility has been com­pleted);
  • using reserves created by the sale of the Community Correctional Facility to pay for General Fund Budget Deficits.

At only three-quarters of the way through the $13 million dollar fiscal year budget, revenues from permits and fees are up over budget projections by approximately $670,000; these increases are used for Code Enforcement cost recoveries, residential in­spection fees, and permits, licenses and fees related to the new Indoor Agriculture busi­ness to the city. One hundred, thirty-eight business licenses were issued between Janu­ary and March 2016.

City staff and consultants continue to work aggressively to locate other cost savings programs, grants and revenue sources with­out reducing city services.

A Comprehensive Strategy to Keep the City Solvent

As part of an overall strategy that involves aggressive economic development to ad­dress the city’s fiscal challenges, one deci­sion the Council made—that’s generated the most notoriety—was to allow for medical marijuana cultivation.

The City Council thoroughly weighed the pros and cons of allowing marijuana cul­tivation, and chose to move forward only after careful and deliberate consideration, discussions and debate, believing that the positives outweighed the negatives and that steps would be taken to mitigate any poten­tial negative consequences.

The brainchild of Council Member John Woodard, the ultimate financial impact of allowing marijuana cultivation is unknown at this time but is anticipated to create a fi­nancial benefit for the city. At a minimum each applicant (there have been 29 to date) will:

(1) Pay a $7,000 application fee for a per­mit to do business in the city;

(2) Pay a yet-to-be-determined impact fee to mitigate impacts to fire, police and gov­ernmental oversight (this fee will be based on the size of canopy area for each facility);

(3) Pay a $2,735 Conditional Use Permit ap­plication fee to allow the Planning Com­mission to impose conditions that protect both citizens and cultivators;

(4) Construct facilities to accommodate new businesses, thereby creating temporary construction employment along with pur­chases of supplies and building materials in Adelanto and throughout the High Desert;

(5) Create jobs in manufacturing, mainte­nance, marketing, sales, distribution, trans­portation (whose employees will spend and support not only the Adelanto economy but also the High Desert);

(6) 50 percent of the jobs created must tar­get Adelanto residents (assuming they meet or exceed minimum qualifications);

(7) Likely purchase products, supplies and services to be used to support the business in Adelanto or other High Desert communi­ties;

(8) Hire local security personnel who will protect the businesses around the clock and reduce calls for service for Adelanto’s Po­lice;

(9) Pay taxes already required by the IRS, Franchise Tax Board and Board of Equal­ization.

A proposed Fiscal Mitigation Impact Fee (which will turn into a tax in November if the ballot measure passes) would be used to improve: police, fire, street, park, and gov­ernments services, resulting in better servic­es for our residents.

Progress by Design—Commercial Development Continues

Several projects progressing through the de­velopment process that will help the city’s fiscal status include:

  1. Rancho Road Commercial Center —NEC (Northeast Corner) Rancho and HWY 395; Multi-Tenant Retail Center with gas station, convenience store, car wash, supermarket, hotel, restaurants, office and retail facilities all totaling 199,050 square feet of floor area on 17.98 acres.
  2. LCS Holdings, LLC—NEC of Violet Road and Emerald Road; The construction and operation of a 3,200 bed prison on 125 acres.
  3. St. Mary’s Properties—SWC (Southwest Corner) of HWY 395 & Cactus Road;16 Pump gas station, 3,500 SF restaurant, 7,400 SF retail building, 2,500 SF fast food, 5,000 SF convenient store and car wash, and an 18,191 SF medical office building on 4 acres.
  4. Lewis Retail Centers—SWC of Highway 395 and Mojave Drive: Development of a 35.35-acre retail shopping center to includeTarget, large retailers, restaurants, and a bank on 35 acres.
  5. BergerABAM for GEO Group—NEC Koala and Holly: The construction and op­eration of a 247,425 sq. ft, 1,050 bed cor­rectional facility on 22.16 acres.
  6. Clark Pacific, Inc—Holly Road between Beaver Road and Koala Road-precast con­crete fabrication plant on 80 acres.

Infrastructure Improvements will En­hance Commercial Corridor

U.S. Highway 395, a major arterial for com­merce throughout California, bisects the city and will undergo a major expansion between Palmdale Road and Chamberlaine Way starting in 2017 that will expand to four or five lanes to enhance the commercial and retail corridor of the city.

State Highway 18, which connects Adelanto to Los Angeles County and ultimately, the ports of Los Angeles and Long Beach, will be widened into a divided highway from Highway 395 to the Los Angeles County line. Construction will also include a four foot media, shoulders widened to eight feet ,and the addition of new centerlines and rumble strips.

The much anticipated E-220, known as the High Desert Corridor, will be a six-lane freeway and High Speed Rail connecting Palmdale and the Victor Valley. It is cur­rently under environmental review and will have a dramatic impact on Adelanto once completed.

Housing growth, though not substantial, has continued to climb the last five years, increasing from 9,261 new units in 2014 to 9,342 in 2015, a 23% increase with suffi­cient units for start-up, established, or retire­ment families. Along with the slight hous­ing growth, population has increased as well from 32,476 in 2014 to 33,084 in 2015, a 1.8% jump where residents have discovered and come to appreciate the clear skies, open spaces and family-friendly environment.

Adelanto and its City Council will continue to live up to its obligation to be good stew­ards of taxpayer dollars AND ensure that the city remains solvent to serve its residents and businesses. No one believes the chal­lenge will be easy, but judging by the results of the past few years, it should be easy to conclude that Adelanto is one resilient city!

City Updates General

Town of Apple Valley City Update-Spring 2016

Published by:

Town of Apple Valley

By Orlando Acevedo

Economic Development Manager

The County Board of Supervisors re­cently approved a 249-acre project to be rezoned from agricultural to residential within the town’s sphere of influence. The Lewis Operat­ing Company’s Deep Creek Project extends from Deep Creek Road to Mockingbird Road and is divided by Ocotillo Way.

This project will require improve­ments along these three roadways, as well as Rock Springs Road, to help mitigate traffic and the risk of wash­out. Construction for Rock Springs Road improvements is set to begin in 2018.

The long awaited Yucca Loma Bridge nearing completion

The long awaited Yucca Loma Bridge nearing completion

The Yucca Loma Bridge is expected to be completed by the end of April 2016; however, there is one more step prior to opening it to traffic. The Council recently awarded a contract for major improvements to Yucca Loma Road, including widening, bike lanes and major storm drain in­frastructure from Apple Valley Road to the bridge, as well as traffic signals at the Fire Station and Havasu Road. The bridge will open at the complecomple­tion of this phase, around September 2017. The bids came in at $8.6 mil­lion, nearly $4 million less than the original estimate, according Brad Miller, Town Engineer.

The $37-million-dollar Yucca Loma Bridge project alleviates conges­tion along east/west regional arte­rials, including Bear Valley Road, and allows residents to travel to and from Apple Valley, Victorville and Spring Valley Lake with more ease. This phase of the corridor will con­nect to Ridgecrest Road and includes bikeways and barrier-protected side­walks across the bridge. The proj­ect will also pave the way for The Fountains at Quail Ridge, a 346,500 square foot mixed-use commercial center at the north­east corner of Yucca Loma Road and Ap­ple Valley Road.

The Victor Valley Wastewater Rec­lamation Author­ity is constructing a sub-regional water reclamation plant at Brewster Park. More than 20 years in the making, this water reclamation plant will produce a mil­lion gallons a day of non-potable, recycled water that can be used to keep Apple Valley’s parks and golf course green. The plant is expected to be completed by mid-2017.

After a lengthy and competitive site selection process, Apple Valley suc­cessfully attracted a major indus­trial project, a 1.35 million square foot distribution center, to the North Apple Valley Industrial Specific Plan. 32

In June 2015 the Town Council approved an Owner Participation Agreement to invest $1.2 million dollars into the construction of off-site regional street improvements. The distribution center will occupy 106 acres near Navajo Road and La Fayette Street, north of Apple Valley Airport. The $115 million project will bring 400 to 500 permanent jobs to the community and is expected to break ground this year, with another 300 construction jobs estimated during the 18-month build. This distri­bution center is expected to open in 2017.

The town is pleased to announce the Small Business Loan Program (SBLP), a business development tool designed to help eligible busi­nesses fund employee training and/or finance the purchase of new equipment or assets. The program is funded by federal grant dollars to help companies grow local jobs and increase production in targeted sectors, including manufacturing, assembly, and startups. The town will partner with AmPac Tri-State CDC to administer the program. For more information on the program, please contact Orlando Acevedo, Economic Development Manager, at 760.240.7915 or by email at select@applevalley.org.

City Updates General

Barstow City Update-Spring 2016

Published by:

California Barstow logo

By Gaither Loewenstein

Economic Development and Planning Manager

Although 2015 fell somewhat short of the city’s expectations in terms of economic growth in Barstow, the pace of activity has picked up markedly at the outset of 2016 as several projects that were anticipated to be initiated or completed last year have become untracked.

Commercial Development Outlook

The long-awaited Montara Place shopping center, anchored by a new Super WalMart store, broke ground late in 2015 and project completion is now expected to occur in 2017. Recruitment of retailers for the eight out pads has begun. The city’s inventory of existing available retail space continues to be absorbed, as Marshall’s joins Harbor Freight in the former K-mart space and smaller retail spaces continue to find lessees.

After improving dramatically for several quarters, the city’s hotel occupancy rate has leveled off in the high 80s, still sufficient to draw interest from several national hotel chains. Plans for a new Best Western Plus are in the final stages of review and Home2Suites, a Hilton product, is expected to submit building plans in late March.

In the same vicinity, taxable restaurant sales have fallen somewhat from their 2015 growth rate of 8.5% in large part due to lower fuel prices nationwide. The restaurant market in the Lenwood Road area remains robust, with a 4,500 square foot Asian Food Court currently under construction and expected to open in summer 2016, and two more nationally known restaurant brands coming to the area, in addition to regional powerhouse Oggi’s Pizza, which has slated a late-spring 2016 opening.

On Main Street, Choice Medical Group is in the final stages of its new 17,000 square foot medical office facility, Foster Freeze is currently undergoing an expansion, and several existing businesses have proposed plans for expansion and/or facelifts. The city is preparing a Specific Plan for the Downtown Business and Cultural District that will be completed in early summer. Implementation of elements of the Specific Plan will commence immediately and is expected to draw additional visitors to the area, sparking downtown revitalization.

Elsewhere, continuing progress is being made in acquiring lands within the Spanish Trail Specific Plan area (located at I-15 and L Street) from the State Lands Commission and the Bureau of Land Management. Acquisition is anticipated to be finalized in the first half of 2016, and once the site has been assembled under a common ownership recruitment of national retailers and lifestyle purveyors, it is expected to begin in earnest.

Industrial Development Outlook

The Barstow General Plan identifies a number of sites suitable for industrial development, several of which are likely to experience construction activity within the plan’s 2015-2020 time horizon. Although the proposed aluminum processing facility that was previously submitted for city review did not come to fruition, the city has continued to invest in infrastructure expansion, making the Barstow Industrial Park more readily suitable for development, and prospective tenants continue to express interest in this location. Grading is nearing completion on the 60-acre Crossroads Route 66 Indus­trial Park, located on West Main Street near the onramp to State Route 58. Once completed, this site will be a promising location for logistics enterprises and has already begun to draw interest from prospective tenants.

Residential Development Outlook

Housing development in Barstow has yet to recover from the Great Recession. Although a robust potential market for new home sales exists in the city, as evidenced by its 1.2:1 ratio of jobs-to-housing, the absence of comparable new home sales has proved an impediment to the financing of new home development. Recognition of the need to jump-start the housing market has prompted the City Council and local school district to collaborate on a strategy for short-term reductions in impact fees in an effort to spur residential development. Additionally, city planning staff has compiled an inventory of existing available infill property in proximity to local utilities and infrastructure. The city remains optimistic that these efforts will help bring the long moribund Barstow housing market to life in 2016.

Infrastructure Update

By the end of 2016 Barstow will be nearing completion of its ambitious capital improvement plans, resulting in reconstruction or resurfacing of the majority of local roadways, modernization of the city’s wastewater treatment plant, circulation network improvements in the vicinity of I-15 and Lenwood Road, and construction of the $ 31.7 million Len­wood Road Grade Separation Project. The $ 71 million reconstruction of the First Street Bridge is in the final planning stages with construction scheduled to be­gin in 2017.

Through its integrated efforts at long-range planning and infrastructure improvement, Barstow has positioned itself to capitalize on the next wave of economic growth as national, regional and local recovery from the Great Recession continues. Though arriving later than anticipated, the momentum has continued to slowly build in the early months of 2016.

City Updates General

Hesperia City Update-Spring 2016

Published by:

Hesperia logo

Quite Simply, Hesperia Works For Business

By Lisa K. LaMere

Economic Development Management Analyst

The City of Hesperia is a pro-business community in Southern California eager to welcome prospective developers, industrialists, retailers and new business owners. Hesperia will assign a team of professionals as strategic partners, making your transition here expedient, affordable, productive and profitable. It is no wonder that national brand retailers choose Hesperia as their first location in the High Desert.

Hesperia is located along both the I-15 and SR-395 highways in the expanding High Desert region of Southern California. With 17 miles of freeway frontage, Hesperia offers easy access to 431,000 High Desert residents and traffic counts on I-15 in excess of 200,000 cars per day.

With strong economic indicators in its favor and having developed a diverse toolkit of business friendly programs and strategies, the economic development team for the city of Hesperia is primed for prosperity.

Increasingly, retail businesses and restaurants are staking their claims in the flourishing City of Hesperia located in the Inland Empire. One of Hesperia’s top priorities is to bring attractive lifestyle options to its ever-growing base of residents with household incomes that average $65,774.

Even during the economic downturn of the recent past, Hesperia has demonstrated strong growth and astute planning, keeping its ribbon-cutting shears sharply honed. One reason is the impressive $1.4 billion retail potential in the I-15 and Main Street trade area of the city encompassing Lewis Retail Center’s High Desert Gateway, as well as the Marketplace on Main.

The High Desert Gateway, a two-phased 533,000 square foot community shopping center anchored by a 180,000 square foot Super Target, will soon break ground on Phase II. The Marketplace on Main, anchored by a 195,350 square foot Walmart Supercenter, has a second major of 180,000+ square feet available for development. Both of these centers contain some of the top-producing retailers and restaurants in the state.

Hesperia finished 2015 with 93,554 square feet of new, expansion and tenant improvement projects as tracked by the Economic Develop­ment Department. Six projects—Petco, Pacific Eye Institute, WaBa Grill, AM/PM, Hesperia Speedwash, and another first-in-the-region Habit Burger Grill—contributed $24.6 million in taxable sales to Hesperia’s economy, along with 137 jobs. Also included was a two-unit 9,985 square foot, multi-tenant office building on Walnut Street at Hesperia Road.

In 2016 development activity in the city began with stellar opening sales for the first-in-the-region Tractor Supply Co. (TSC), located west of Interstate 15 just past the High Desert Gateway on Main Street. With a grand opening in January less than five months after breaking ground, TSC reported initial sales for their 18,800-square-foot retail store exceeded company projections by 300%.

Joining Habit Burger Grill in The Marketplace on Main, anchored by the Walmart Supercenter, are Pie­ology Pizzeria, Yogurtland, Metro PCS, and Great Clips in the 14,000 square foot multi-tenant building along Main Street at Escondido. Pieology opened in early February 34

to rave reviews for custom pizzas and fresh salads; Yogurtland, an­other first for the region, celebrated their ribbon cutting in February as well. Look for future Hesperia busi­ness development in 2016, including Firehouse Subs, a national grocer, a national automotive repair franchise, and manufacturing and logistics companies.

Located in a robust market with high­ly desirable market characteristics, coupled with vast market intelligence to make their case to retailers, and a crack team to get them to opening, it is clear Hesperia works for business. “You won’t find any other City that works as closely or as openly with a developer as Hesperia’s Economic Development department. We work very hard to find tenants for our new shopping centers and we actively work on a daily basis with develop­ers. We get more work done quicker because of this relationship; we just go straight to the bottom line,” said Interim Economic Development Di­rector Rod Yahnke.

Commercial, industrial, and office properties abound throughout Hes­peria, and this pro-development, customer service-oriented City is se­rious about bringing your business to Hesperia! To see how Hesperia can work for you, contact the Economic Development Department by email at econdev@cityofhesperia.us.

City Updates General

Victorville City Update-Spring 2016

Published by:

City of Victorville

City of Victorville Gaining Momentum and Improving in Key Areas

By Doug Robertson

Victorville City Manager

Each year the Vic­torville City Council prepares an annual report to the community in the form of our State of the City presen­tation. Our Council Members presented this year’s State of the City at the Victor Valley Chamber of Com­merce’s Valley Morning Insight, Feb. 3.

All indicators show that we are gain­ing momentum and improving in key areas. Specifically, sales tax revenue has increased, several road improve­ment and development projects are complete, new business-license and housing-permit requests are up, bur­glaries are down, and clean up ef­forts have left the city cleaner.

We had a good year, and we are looking forward to an even better 2016. As Victorville Mayor Gloria Garcia commented during the State of the City, “The changes that are happening in our City speak well for today and for generations to come. We can all be proud to say, “I Am Victorville.”

Our Council chose the theme “I Am Victorville” for this year’s State of the City to showcase how our individual contributions make Victor­ville strong. We wanted to demonstrate that the character of a city is in the people who live and work here and that we build our community together. We shared stories of five people who are making Victor­ville better: La La Jones, the man­ager of Peoples Care; Jessica Oban from Friends of the Victorville City Library; Tim Watts, the owner of Victorville Motors; Michael Casa­nova, a City of Victorville heavy equipment operator and Air Force Reservist; and local Boy Scout Isaac Lehndorfer.

Isaac for example, saved our Veterans Day Commemoration when he volunteered to be a substitute bugle player; and Jessica is encouraging children to read during our library’s summer reading program. Each of these talented people is contributing individually to Victorville’s success, but their stories remind us that when we bond together, we build a stronger, healthier, more vibrant city in which to work, live and play.

Our State of the City also shows that Victorville continues to lead the region in growth and development. As Mayor Pro Tem Jim Cox reported, we saw the opening of many new businesses during 2015, including Holiday Inn, Desert Fiat, and Davita Mojave Sage Dialysis Clinic, as well as Michael’s, Dollar Tree, and Sta­ples in Dunia Plaza.

This growth continues in 2016. On Feb. 15, after much anticipation, BJ’s Restaurant and Brewery opened in a 7,525 square foot space on Amargo­sa Rd. creating 137 new jobs; while construction began on the Krispy Kreme location on Roy Rogers Dr. Krispy Kreme is expected to open sometime this summer, and generate 25 to 30 new jobs.

You can expect to see several more Victorville businesses in the coming year such as a two-story medical office building on Yuma Street, a 170-bed nursing facility on Winona and Eleventh; and a four-story Home-2-Suites by Hilton Hotel on Amargosa and La Mesa Roads near the Chuck E. Cheese’s restaurant.

Construction has also begun on a 444,000 square-foot industrial building on Lot 13B at our Southern California Logistics Airport. The new construction is being developed by Stirling Capital and has lease commitments from Arden Companies, a leading manufacturer of outdoor patio cushions and Newell Rubber­maid, a global leader in consumer products.

As we market Victorville to new business, our goals are growth and job creation. We are placing great emphasis on the Southern California Logistics Airport (SCLA), the former site of George Air Force Base that is being transformed into a 5,000-acre commercial aviation hub and industrial complex, which serves as the valley’s largest development project. SCLA is becoming a multi-disciplinary logistics hub chosen by nationally and internationally recognized companies in manufacturing, warehousing and aerospace services.

You might be surprised to learn that SCLA has the second-longest commercial runway in the U.S. so we can accommodate the largest of wide-body aircraft. SCLA’s location, land, municipal utilities and flight-favorable weather gives Victorville global appeal; and we are attracting large business from the country and the world.

Victorville offers a world of oppor­tunity, and our future is bright. To learn more about Victorville and development opportunities throughout our city, including SCLA, visit our website at www.victorvillecity.com or call 760.955.5032.