By Lisa K. LaMere
Economic Development Analyst
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. They’ve done their homework and they’ve rallied the economic fates and forces and as a result, they now have a multi-tiered selling proposition for business that’s virtually impossible to dismiss:
A strategic location that offers land, infrastructure, affordability and opportunity.
Hesperia is located along both the I-15 and SR-395 highways, in the expanding High Desert region of Southern California. Framed by the San Gabriel and San Bernardino mountain ranges, this gateway to the high desert features a temperate climate with clean air, abundant sunshine and large tracts of available land. With 17 miles of freeway frontage, Hesperia offers easy access to 366,000 High Desert residents and proximity to 20 million residents in Southern California.
The region is becoming a major distribution and logistics hub serving one of the world’s largest international trade areas, with the nearby Southern California Logistics Airport and highly efficient freight rail lines that run through the city and serve Ontario, San Bernardino and LAX airports as well as the ports of Los Angeles and Long Beach. From Hesperia, distributors can transport cargo by truck to 11 Western states within 24 hours.
Impressive incentive programs and full access to the city’s business development brain trust.
In 2009, the city’s economic management team seized two highly prized competitive advantages to add to Hesperia’s business development arsenal. Designation of much of the city (30 square miles) as a California Enterprise Zone means that businesses currently located or newly locating “in the zone” qualify for substantial benefits and incentives. These include an array of cost-savings and advantages, such as hiring and wage credits, net operating loss deductions, business expense deductions, sales or use tax credits, net interest deductions on business and mortgage loans, and even bidding preferences in specified state contracts. These benefits can be quite lucrative, with reductions in the cost of doing business ranging from the tens to the hundreds of thousands of dollars annually.
A second state designation has targeted Hesperia as an area incentivized to promote recycling and reduce landfill waste. The Hesperia Recycling Market Development Zone combines state benefits, such as below market-rate loans, with innovative incentives offered by the city. In addition, some participating businesses may receive market identification and research, business planning, marketing, and technical assistance.
In a dauntless quest to expand business and create jobs for Hesperia, a team of economic development experts leaves no stone unturned in ferreting out programs and advantages for businesses. With expert knowledge of a wide range of incentive and assistance tools available from the city, the state and even from the federal government, well-informed and motivated management advisors are available to provide assistance on an individualized basis to help executives identify and navigate the maze of opportunities available, but perhaps unknown, to them. There also are additional programs targeted specifically to brokers, franchisees, and restaurateurs.
Strong economic indicators and a track record of recent success.
Regional economic indicators support the premise that Hesperia is poised for the next big wave of opportunity. According to the 2010 San Bernardino County Community Indicators Report, since 1990 the region has demonstrated a 300 percent growth in business and professional services, 180 percent growth in logistics and distribution, and 180 percent growth in wholesale trade.
A growing labor force in Hesperia has a younger median age (31) than both the state and national averages. More than 70 percent of residents are homeowners and average household income is about $66,000. Hesperia offers a diversified workforce, with about two-thirds of residents having some college education and eight percent have bachelor degrees or higher.
A relatively stable housing market has retained an affordable pricing index — according to the California Association of Realtors, the most affordable in California — and a median home price of $121,000. Proactive and full of foresight, the city of Hesperia has since 2008 been identifying and purchasing abandoned and foreclosed residential properties through a $4.6 million grant from the U.S. Housing and Urban Development (HUD) Neighborhood Stabilization Program. Currently the city is rehabilitating the homes to prepare them for sale or lease.
Even during the economic downturn of the recent past, Hesperia has demonstrated strong growth and astute regional planning, keeping its ribbon-cutting shears impressively honed with 29 commercial openings over two years. Last fall, The High Desert Gateway Center, a 500,000-square foot retail center, opened and now features 18 tenants, among them a Super Target, Marshall’s, Farmer Boys and Golden Corral restaurants, and Ross Dress for Less.
Sophisticated, integrated infrastructure and resources.
Businesses rely on sophisticated infrastructure and Hesperia has it in spades. Transportation improvements are planned for I-15, with one new interchange planned and one new underpass approved and funded in Hesperia city limits. Caltrans also is in the planning stages for a High Desert Corridor freeway, which will create a 63-mile link from I-15 to I-5.
Hesperia is ideally situated near the Southern California Logistics Airport, located just 18 miles up the highway. Since two major freight rail lines pass directly through Hesperia, the city has secured a $2 million federal grant and is currently developing almost one mile of industrial rail lead track and a parallel runaround track. Scheduled for completion next year, the industrial rail will provide outstanding access for 200 acres of adjacent industrially zoned parcels and is expected to stimulate development of more warehousing and distribution centers near I-15. A team trans-load facility also is planned to make rail accessible for small businesses throughout the region that will now be able to ship and receive goods by rail.
With water shortages projected throughout the state by 2020, the Victor Valley Wastewater reclamation Authority has developed innovative strategies to efficiently use and reuse water for sustainable living. Pipelines are currently being upgraded and Hesperia is one of two locations where a new local sub-regional treatment facility will be constructed.
A highly motivated economic development team working for business.
The Hesperia economic development team is vested in the success of existing and prospective businesses. They have worked hard to develop a unique and powerful toolkit of benefits and programs to offer business and industrial clients the greatest practical incentives for choosing this vibrant market. The team daily asserts a strong commitment to growing the Hesperia economy by working to attract new businesses and development and in turn, jobs for residents. The department offers a standing invitation to business owners for individual counseling and advice as well as help determining eligibility for a range of city and state programs.
Troy Litzenberger knows firsthand how invaluable access to that kind of knowledge and assistance can be to a small business owner. He is president of The Litzenberger Company, high-precision custom metal fabricators of prototypes for aerospace, professional motorsports and alternative energy. A cottage industry founded in 1985, Litzenberger located to Hesperia from Wrightwood three years ago. His business has been steadily expanding and about a year ago, he found himself looking at industrial space to buy or lease.
“We needed to take advantage of the opportunity to grow with these other companies we were working with and we were turning away work because our small staff was busy enough already and couldn’t assume responsibility for more work,” Litzenberger said. “I knew we needed more floor space, which would drive more employees and more production.”
When Litzenberger found a 5,600-square foot property he wanted to buy and improve, his real estate agent suggested he contact Gwen Bedics, SBA relationship officer with Enterprise Funding, a nonprofit corporation that specializes in small business development loans in the Inland Empire.
Together they crunched the numbers, but Litzenberger couldn’t quite qualify for the loan he needed. That’s when Bedics asked him if he had explored assistance from the City of Hesperia Economic Development Department. Says Bedics of Hesperia, “They’re the most business friendly of the economic development departments in the High Desert and the most aggressive. I can’t always help a borrower, but I can give direction and I know if somebody calls them, they will communicate with them. Whether they can help you or not, they will communicate with you.”
So Bedics encouraged Litzenberger to contact Rod Yahnke, EDFP, Management Analyst with Hesperia Economic Development, who assessed the case and learned that if the city provided gap financing to help Litzenberger qualify for a loan to expand his business, the project could move forward. “Good businesspeople are worth the city’s investment, to put money into the deal, as in this case, to make the expansion possible,” Yahnke said. “A good, viable business helps bring more business to the city, sales and property taxes and employment, one of the most important reasons we (redevelopment) are here. Housing grows, commerce grows, but it all starts with jobs.”
“Rod was very helpful in securing additional funds and moving us through the process,” according to Litzenberger, who said two other team members, Tracy Wrigley, Community Development Supervisor and John Regner, Senior Plans Examiner, also helped lead him “almost by the hand” through the process, smoothing over onerous requirements and code issues.
“It’s interesting, because I have a longtime friend who also is self-employed, with a shop in LA County. He went through a similar process several years ahead of me. We compare stories and he’s got some horror stories to tell of all the things like zoning codes and landscaping that he was not expecting when he bought the company.
“A lot of people have dreams and find a building that would work perfectly, only to find out after they buy it that it comes with a lot of control by the county and conditions that weren’t anticipated on the other end. In my situation, the city was interested in holding my hand and showing me what was required and ultimately all the things that were required were very doable.”
Litzenberger said that working closely with Yahnke, Wrigley, and Regner, he was able to fully understand all the codes and requirements before purchase of the building. Because one of the threshold values driving code issues is calculated on the sizes of the building and the company, at one point Litzenberger was daunted to discover that he might have to invest an additional $80,000 to $100,000 to improve the property. But the economic development team, thanks to a thorough understanding of its meaning and intent, was able to steer him clear of the stipulation, knowing that it was intended to address much larger companies.
With pressing deadlines on current projects, Litzenberger delayed moving into the new building by several months. He said the city was helpful in allowing him to get a certificate of occupancy ahead of schedule so financing and tenant improvements could move forward and he could continue uninterrupted business operations.
Taking occupancy in February, Litzenberger is thrilled with his new facility and the 1.25 acres of property on which it sits, providing more room to grow, both of which he says are far more than he expected when he set out to look for new shop space. “The value is so much better,” he said, “I am easily getting two to three times what my friend got in the Van Nuys area for the same price.”
So Litzenberger goes on to build the American Dream in Hesperia, a small business serving major players such as General Atomics, AeroVironment, Honda Performance Development (the research and development wing of Honda Motorsports), and Capstone Turbine. He says the area offers him the location, the labor pool, and the resources he needs now and into the future.
“I have a very good impression with Hesperia,” Litzenberger says. “You just drive through town, and it goes beyond the city employees that I’ve dealt with. You get the impression that it is a well-established desert community but with a bit of an odd twist because the government here is interested in helping business and is very interested in improving the city and facilities for residents. On all levels, you drive around and you think, ‘Here is a community that cares, right down to the city trucks that are well-maintained and presented nicely.’ It just looks like a city that cares about how they do business and how they present themselves.”
The City of Hesperia has a wealth of resources, information, seminars, and individualized assistance available to businesses looking to expand or locate their companies in the gateway to the High Desert. For more information, visit www.cityofhesperia.us/econdev, call Steven Lantsberger, CED/EDFP, Deputy Economic Development Director at (760) 947-1906 or e-mail firstname.lastname@example.org.
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