Economy General

Basis For Some Optimism?

Published by:

By Dr. Alfred J. Gobar
Chairman, Alfred Gobar Associates

Nationwide employment figures released the day this article is being written are a basis for optimism in terms of significantly improved economic trends. There are at least two reasons to defer a major party based on this news. One of these is that optimistic numbers are frequently revised. Another is that even if true, the numbers still imply considerable wait for our economy to get into full swing. As the Wall Street Journal pointed out recently, employment recovery from the recent recession is substantially slower than recovery from other recent recessions, many of which were fully recovered within three years of their onset, while we are still wallowing near the depths of the current dislocation.

Even at the local level, employment statistics are considerably more optimistic than they have been recently. Throughout Southern California (Ventura County, Los Angeles County, the Inland Empire, Orange County, and San Diego County), total nonagricultural wage and salary employment increased by 73,500 jobs in the twelve months ended February 2011. This is the first twelve-month period ending in February that has shown an increase since the comparable figures for February 2007-just prior to the onset of the recession. These numbers, however, are somewhat ambiguous. Nonagricultural wage and salary employment numbers generated on the basis of a survey of employers provide a sample which is then expanded to the entire economy of the Southern California region to generate an estimate of increased nonagricultural wage and salary jobs in Southern California. Another source of employment information is the Household Survey in which analysts contact households and inquire about how many household members are employed and how many are unemployed and seeking work. The Household Survey is the source of unemployment data in addition to providing an alternative estimate of total employment including self-employed, etc. The most recent Household Survey for Southern California, however, shows that despite and estimated increase of 73,500 nonagricultural wage and salary jobs reported by employers, households report a decline of 68,00 employed persons over the same interval. One survey indicates an increase of 73,500 jobs overall, while the other suggests a decrease of 68,000 jobs overall. Biographies of economists show a surprising proportion of them with a fondness for strong drink. Statistics of this type may have some bearing on economists’ behavior in this regard.

The most recent graphic information for the nonagricultural wage and salary employment (based on the Establishment Survey) is shown in Exhibit 1, indicating the recession continues to be in relatively full force. By this time in the prior recession (beginning in 1990), employment in southern California had begun to show stronger signs of improvement.

A weaker local economy is reflected in building permit data for the High Desert. In 2010, 544 new units were authorized by permit in the High Desert area- basically north of Cajon Pass. This was a slight increase over the comparable figure for 2009 when 389 new units were authorized by permit. Neither is impressive in relationship to the 8,300 new units authorized by permit in the High Desert in 2005. In both 2010 and 2011, the total number of new units authorized was considerably less than the previous low water mark associated with the 1990 recession-908 new units were authorized by permit in 1997.

Exhibit 2 illustrates the pattern of building permit activity  for a single-family detached housing in Southern California and the High Desert are between 1980 and 2010, highlighting the increased volatility of new single-family housing production on the High desert as compared with Southern California in its entirety.

The positive employment figures, despite the ambiguity between the results of the Establishment Survey and the Household Survey, can be further broken down by area. Strength of the nascent economic recovery in Southern California is most significant in Los Angeles County, followed by Orange County and San Diego County. The Inland Empire’s employment data ranked last in terms of being indicative of economic recovery. The relationship between the Inland Empire’s economic base and the rest of Southern California as it impacts real estate development is not a matter of great concern, however. The housing market in the Inland Empire has historically been driven by shortages of affordable housing in Los Angeles, Orange, San Diego, and Ventura Counties-and not necessarily by indigenous economic circumstances within the two-county Inland Empire area itself.

As would be expected, nonresidential development activity on the High Desert is fairly meager. The ±75,000 new jobs from February 2010 to February 2011 tend to be concentrated in industries that create demand for real estate products that are in relatively ample supply. The largest job growth from February 2010 to February 2011 in Southern California was in professional and business services. These growth categories create demand for real estate products that are currently in ample supply.

The second most significant category of growth in jobs over this interval was in educational and health services, some of which may eventually require new facilities and, therefore, real estate development. The third greatest increase in employment over this twelve-month interval was in leisure and hospitality, which is not likely to stimulate major new development on the High Desert in the near term.

Development of retail space should not be a major contributor too the real estate sector on the High Desert in the near term because existing facilities have substantial capacity to accommodate increasing sales activity levels, especially in light of the increased sales efficiency of high volume per square foot merchants such as Walmart, Costco, Sam’s Club, Home Depot, etc., that characterize the evolving retail sector. In addition, some technologically-obsolete retailers are closing stores, making space available for other uses. Recent months have seen bookstore closures as well as closure of DVD rentals, etc. The retail sector has been involved in a substantial technological revolution for about the past 15 years as new retailers demonstrate the capacity to generate much higher than typical sales volumes per square foot, implying the need for fewer square feet per capita of consumer population as more retail activity is focused in high volume-type stores.

Recent employment data show a decline in retail employment in food and beverage stores and in clothing and accessory stores. This probably represents shift of purchasing from these types of specialty stores into general merchandise stores as Walmart and others broaden their range of product offerings to include more typical supermarket merchandise and/or the availability of broader lines of apparel.

Although the statistics showing net increase in nonagricultural wage and salary employment based on the Establishment Survey during the twelve months ended February 2011 are cause for some optimism that a str0nger recovery is on its way, especially in light of three years of strongly negative employment trends since February 2007, the ambiguity of these data in relation to information from the Household Survey is a matter of some concern. Overall, this is probably not a basis for a major three-keg party right away.

I’m frequently asked about the slow economic recovery this time, especially in light of the huge fiscal and monetary stimulus unleashed since 2008. I’m not sure the academic elites who shape policy are as smart as we’d hope. For example, I doubt the perspicacity of economic experts who brag about the “gazillion” jobs that were saved by the bailout of General Motors.Saving GM doesn’t mean the saving of auto employment. The source of jobs for auto workers is not a specific company; it is demand for automobiles exerted by consumers. No one has convinced me that if GM did not exist or existed under another name, it would constitute a positive or negative long-term impact on consumers’ desire to buy cars. Since I think that auto workers are employed because people want to buy cars and not specifically because they want to buy GM cars, I have a hard time understanding how the taxpayer support devoted to saving GM saved any jobs at all on a net basis unless the failure of GM would discourage future consumers from ever buying any type of car. Bankruptcy does not destroy automobile manufacturing facilities. Even if bankruptcy did result in the scrapping of large factories instead of their sale to some other entity that knew better how to operate an automobile company, there is probably enough worldwide capacity to produce cars to meet demand and, in the process, represent a source of employment for auto workers. Saving GM saved a particular group of jobs, but on an overall basis, really can’t be construed to have saved jobs in a general sense. As the performance of Ford illustrates, all saving GM did was perpetuate an institution that had proven itself to be incompetent in the first place.

Similarly, there seems to be a good deal of enthusiasm about taxing the “evil” corporations so that we don’t have to tax the rest of us as much. Every analysis I’ve ever seen shows that most corporations pass taxes along through higher prices for their product, lower wages and salaries to their employee, etc. Ultimately, financially-ineffective corporations will disappear (stockholders will receive no profit and bankers will be reluctant to lend to entities which have a high probability of being unable to pay back the loan). Bailing out incompetent institutions is not a path to economic progress, yet we choose to believe that two and two can be made to total five.

Historically, economists have believed that a potent tool to counter the effects of recession is stimulating the housing market. As a result of lower prices (derivative of a recession) and lower interest rates supported by the Federal Reserve Bank during recessions, it has historically been fairly easy to stimulate economic recovery through increased activity in the housing market. In this particular case, however, we have already shot those arrows from our quiver by several years of overstimulating the housing market through the Community Reinvestment Act, historically low interest rates prescribed by Greenspan and Bernanke, and irresponsible relaxation of loan qualifications to cause many marginal or latent first-time homebuyers to become owners of housing-in many cases, housing considerably more expensive than they would likely to have afforded in a free market environment.

Greenspan, et al., used the stimulus tool of the housing market at a time when it really wasn’t necessary. As a result, pent-up demand for homeownership is not a factor. We continue to see a good deal of consumer uncertainty as housing tries to find true market value in an environment that has been badly abused by the political or professional aspirations of policy-makers who took advantage of this tool at a time when it was not needed. It is somewhat analogous to taking antibiotics to cure minor ailments allowing toxic elements to develop resistance and, therefore, obviating the future value of specific antibiotics in relationship to their ability to control various diseases. We’ve already used the medicine of housing market stimulation and it’s no longer available to us to bail us out of this recession. We, therefore, need some other stimulus. It’s hard to figure out what it is in light of expansionary policies that have been tried and failed over the last two or three years-TARP, the stimulus, Easy Money, QE1, QE2 zero real interest rates, etc. What these policies have done is to scare the daylights out of investors and planners. This fright is likely to be magnified significantly soon as interest rates inevitably rise, causing the value of bond portfolios to decline sharply and destroying the “safe harbor” that many thought they had entered by buying Treasury Bonds. Some fairly knowledgeable people think that Treasury Bonds are significantly more risky than corporate common stocks in light of potential declines in sovereign bond prices as interest rates rise. I tend to agree with them.

Increasing intrusion of politics into business decision-making has created policy dilemmas as CEOs attempt to please stockholders, Sarbanes-Oxley, the IRS, appropriate regulatory agencies, the general public, and the press. Since these various audiences do not all have the same objectives, the probability that a significant proportion of the audience spectrum could be satisfied by a particular policy decision becomes increasingly remote. The general press then wonders why the private sector has accumulated trillions of dollars in cash and does appear to be enthusiastic about hiring permanent employees as distinct from”1099 contract” workers in an uncertain regulatory and political environment. This uncertainty spills over into hiring decisions in which it is less risky for some employers to “contract out” specific duties than to hire permanent staff. Contract employees often have a lower overhead component than would a permanent staff employee hired to achieve the same objective. Contract employees don’t join unions. Contract employees generally don’t mind working overtime. Contract employees don’t have to have medical insurance. Contract employees don’t file unlawful termination sits. There is a good argument that fear is a significant inhibitor to the economic expansion that will be the basis for creating a new generation of High Desert real estate millionaires. Maybe this time the winners will be those who are especially fearless.

If you would like to receive the full edition of the Bradco High Desert Report, our quarterly newsletter, please click on the link: http://www.thebradcocompanies.com/register

General

Publisher’s Message

Published by:

I wish to welcome our current and future subscribers to the 48th edition of the Bradco High Desert Report, the only quarterly overview of the High Desert region, covering the northern portion of San Bernardino County and the Inland Empire.  We more specifically address economic issues affecting the cities of Adelanto, Barstow, Hesperia, Victorville, and the Town of Apple Valley.

As always, we wish to thank all our committed article suppliers and our newsletter sponsors for their continued commitment to our endeavor, and our attempt to find positive, factual and interesting information as it relates to the High Desert economy.

As I have said for the past few editions, I strongly believe that our world, our nation, and our state, the Inland Empire, and the High Desert region are currently challenged with a very serious financial crisis, a crisis that we have never seen before. As publsiher of the Bradco High Desert Report, I still believe the “glass is half full,” as evidenced by our continued attempt to monitor the High Desert region and to make information available to those that have an inherent interest within the High Deset region.

Our firm has noticed a definite increase in commercial, retail, and industrial leasing, as well as the sale of some industrial properties throughout the area. We continually caution our sellers and lessors to price their properties appropriately as the market changes, based on rents, CAP rates, comparable sales, etc.

Effective with the 45th edition, of the Bradco High Desert Report has now been made available electronically. Over 1,750 people have now signed up to receive this publication or any other information that we put out from time to time for free, relative to retail, commercial, industrial vacancies, occupancies, comparable sales, etc.

If this is your first time reading this publication, please visit www.thebradcocompanies/register and complete the short registration process to receive “for free” any information that we put out on issues that affect the High Desert economy, or anything that we put out that we believe needs to be communicated to those people that have an interest within the High Desert region.

We always appreciate hearing from our close firends and one of my all time idols, Dr. Alfred Gobar, Chariman Emeritus of Alfred Gobar Associates (Anaheim). His article titled, “Basis For Some Optimism?” is another well-written explanation of the current downturn. Dr. Al, we appreciate it!

We’re pleased to welcome Mr. Michael Stewart’s article representing Barstow Community Hosiptal. We wish Michael Stewart the very best in his recent promotion that’s taken place since the submission of his article. Mr. Rick Piercy, CEO and President of the Lewis Center runs one of the nations top charter schools and we’re humbled that he selected our publication to submit information. Again, many thanks, Rick!

Additional articles include Mr. Eldon Heaston, Executive Director of the Mojave Desert Air Quality Management District; Mr. Carlos Rodriguez, CEO of the Building Industry Association; Mr. Michael Stevens, Community Liaison Officer for the Mojave Water Agency; our favorite First District Supervisor, Mr. Brad Mitzelfelt and information on the High Desert Corridor is a very exciting project and I not only thank Brad, but also his staff for taking the time to educate our readership.

Another welcome to Mr. Gary S. Thomas, County Superintendent for San Bernardino County, thank you for providing information relative to what they are doing to prepare our students for higher education and the Inland Empire workforce.

Dr. John Husing recently reported in the most important speech that he’s given in 47 years monitoring the Inland Empire economy, that education is our number one priority in order to ensure a transition back to a healthly economy, and an economy where education is the number one word used at work, at home, and at school.

I’m also pleased to announce that on February 2nd, 2011, after 24 applicants and oral interviews, I was nominated to fill the fifth (5th) position at Victor Valley Community College, a school with an enrollment over 14,000 students. I’m pleased to enclose an article from Mr.Bill Greulich, our Director of Public Information regarding the school.

We always appreciate hearing from Ms. Deborah Barmack and Ms. Jane Dreher of SANBAG is doing to improve transportation throughout the region. Without these infrastructure enhancements, the High Desert region would not be able to grow to the extent that many believe should occur.

I would also like to thank me close friend, Mr. Bob thompson of Advanced Listing Services (Las Vegas) for his housing article (“The Difference A Year Makes”) and his overview. Bob is very passionate about the work that he does and we very much appreciate his contributions.

We welcome a person that I’ve been working with for many years, is a part of the NAIOP Board of Directors, Mrs. Mary Olhasso, the new Economic Development Director for San Bernardino County. Watch out! If Mary Jane is involved, it will become reality. A person not known for holding long meetings, we welcome Mary Jane and her article to our publication.

I welcome back a friend and a consultant to our firm, Ms. Susan Bloomfield with her article, “Applying Lessons Lerned From The Past,” where she discusses available square foootage, vacancy factors, etc for industrial, office, and retail throughout the entire High Desert region. Thank you Susan!

I wish to re-welcome Mr. Ryan Orr, who now represents the Victor Valley Reclamation Authority (VVWRA). I wish to thank Mr. Mike Borja from the City of Adelanto, Mrs. Kathy Martin with the Town of Apple Valley, Mr. Ron Rector with the City of Barstow, Ms. Lisa LaMere with the City of Hesperia, and lastly, Mr. Bernie Calderon from the City of Victorville relative to our city of updates.

Lastly and most importantly, if you wish to continue to receive a copy of the Bradco High Desert Report, any statistical reports, op ed articles that we post to our website for free please register at our website at www.thebradcocompanies.com/register. We all hope that you have a great summer.

Economy General

High Desert Employment Information

Published by:

By Kristine Nix
Worforce Service Branch

High Desert Employment Information

High Desert area data for the month of July 2010

California’s unemployment rate was 12.3% (seasonally adjusted) in July 2010, unchanged from June 2010 (revised) and up  .5% from a year ago. The national unemployment rate remained steady at 9.5%. However, unemployment increased in parts of the High Desert with San Bernardino County increasing .5% from last month to 14.8%.

Area Labor Force Employed Umemployed Unemployment Rate Change
Nationwide       9.5% =
California 18,370,300 16,026,100 2,344,200 12.8% =
San Bernardino County 864,200 736,400 127,900 14.8%
High Desert 105,400 86,500 19,000 18.0%
Adelanto 7,000 5,400 1,600 22.9%
Apple Valley 26,300 22,100 4,200 16.0%
Barstow 10,800 8,800 2,000 18.5%
Hesperia 3,100 25,200 5,800 18.7%
Victorville 30,300 2,500 5,400 17.8%
           
  Please note that the above data is non-seasonally adjusted  

California lost 9.400 jobs last month and new unemployment insurance claims decreased by 2.7%

Riverside & San Bernardino Counties Overview:

  • Unemployment increased to 15.1% in July 2010
  • Nonfarm employment decreased by 22,000 jobs
  • Construction reported the only monthly gain in employment, adding 300 jobs

Highlights from the California Regional Bulletin (August 27, 2010)

  • A recent report by New York Federal Reserve bank shows that California ranks number 1 in consumer debt
  • The ports of Los Angeles and Long Beach saw increased cargo traffic in July, as reported in the Los Angeles Times
  • Monterey Gourmet Foods is moving from Salinas to Gilroy, CA. Opening in March 2011, the new facility will create construction jobs during the building phase and 50 new manufacturing jobs.

For questions and answers, see the Clifornia Labor Market and Economic Analysis. If you have not alredy done so, look at, use and register for the information at the Labor Market Information Division website www.labormarketinfo.ca.gov . This will allow you to obtain additional important labor related information. The report for August 2010 will be available shortly after September 24, 2010. Information is compiled from referenced sources by the Victorville EDD office.

For comments or questions plese contact Ms. Cindy Espindola or Kristi McAfee at (760) 241-1682

City Updates

Victorville City Update

Published by:

By Collette Hanna, Business Development Manager
City of Victorville Economic Development

Dr. Pepper Snapple and Industrial Wastewater Treatment Facility

When Dr. Pepper Snapple (DPS) first approached Victorville as a possible location for its facility for manufacturing and distribution to the Western United States, the Southern California Logistics Airport (SCLA) was an ideal spot for their state-of-the-art facility. The land was adequate and the City of Victorville was able to address its site location issues. Infrastructure improvements were to be made to handle its operation, with a significant issue being the need to handle discharge of up to 750,000 gallons of wastewater a day. The City approved a $31 million Industrial Wastewater Treatment Facility (IWTF) to handle DPS’ needs as well as other high wastewater discharge uses.

Working with the City of Victorville Economic Development and Development Departments, the permit issuance was fast tracked and construction on the state-of-the-art 850,000 square-foot manufacturing and distribution facility started in March 2009. The warehouse portion of the facility was opened by December 2009 and the manufacturing portion of the facility opened in February 2010. Running at full capacity, the plant will have the ability to produce up to forty million cases of product annually.

The IWTF is a testament to the City of Victorville’s proactive business stance and innovative problem solving ability. The IWTF can handle up to 2.5 million gallons of wastewater a day. With the location of DPS and the City’s new IWTF, Plastipak Packaging followed with a site location at SCLA. As DPS’ bottling supplier, Plastipak moved into a 290,000 square foot facility to support DPS production. DPS, IWTF, and Plastipak combined have created approximately 300 high quality, living-wage jobs in the Victor Valley.

DPS has invested over $120 million on the design and construction of its facility. The investment shows the confidence and trust the company has in Victorville’s economic stability. DPS and the IWTF projects have created a domino effect which has brought in Plastipak and interested other potential users to SCLA.

Neighborhood Stabilization Program

The City of Victorville has been actively looking to address the foreclosure problem that has plagued the nation over the past two years. The City’s Economic Development Department Housing Division has used the American Recovery and Reinvestment Act to fight the foreclosure and abandoned properties problem throughout the city.

The Neighborhood Stabilization Program (NSP) gives funding to local governments to purchase homes that have been foreclosed. The homes are then rehabilitated and placed back on the market for prospective homebuyers. The City of Victorville was awarded $5.3 million in NSP funding and has used the funding to purchase 14 properties. All the purchased properties have gone through a rehabilitation program and eight houses either have been sold or are currently in escrow. Two properties purchased were deemed unsafe for living and were demolished.

The NSP funds have not only put newly rehabilitated affordable homes on the market but have also boosted the local economy. Approximately 38 local contractors and companies have benefited from the funding. The City had a preference to hire local contractors and companies to ensure the local economy benefited from this program as well.

Victorville has dedicated 97% of all NSP funds. 95% of committed funds has been spent on upgrading homes throughout the city. The money spent has allowed those entering the housing market affordable and reliable housing and eliminated vacant foreclosed properties in Victorville neighborhoods while boosting the local economy by working with local entities throughout the program.

SCLA Aviation

Aircraft and engine testing continues at SCLA, with the Boeing 787 Dreamliner and the Air Force’s Predator Planes being some of the new projects.

The Boeing 787 Dreamliner started its testing at SCLA in March 2010. The flight-testing schedule includes six planes flying a total of 90 hours per week at the peak of testing. Boeing will be mass producing the new 787 Dreamliner at a faster rate than any other large airplane. Its goal is to produce 120 new 787s a year by 2013. Boeing has approximately 300 employees located in Victorville to flight test around the clock in 12-hour shifts.

The Air National Guard had been temporarily leasing a hangar at SCLA for its training missions with the Predator. In September 2010, the Air National Guard broke ground on a new $4 million hangar. The new hangar is expected to be completed within a year. The Predator plane is an unmanned aerial vehicle (UAV) that is commonly used for reconnaissance missions. Predator aircraft is remote controlled by operators and carries cameras and other sensors whose signals are sent back to a base. Newer Predator models are now fitted with missiles and other types of ammunition.

The testing of the Dreamliner and Predator at SCLA are just a few of the many exciting, new projects. GE continues to test its engines at SCLA. Cal Fire’s DC-10 Super Tanker plane is currently stationed at SCLA as well and is instrumental in fighting wild fires in the San Bernardino area and beyond. The open air space and clear weather are just some of the many reasons why companies are choosing SCLA as the place to test, maintain, and house their aircraft.

City Updates

Hesperia City Update

Published by:

By Lisa LaMere
Economic Development Analyst

Ranked #3 by Business Facilities magazine (July/August 2010) as a Top Ten Emerging Logistics/Distribution Growth Center, the City of Hesperia in California’s Inland Empire is conveniently situated within easy access to the logistics network that serves the combined ports of Los Angeles and Long Beach (LA/LGB), the nation’s largest international cargo trade area. Hesperia’s High Desert location along I-15 and U.S. Highway 395 provides an affordable and central location for warehousing, manufacturing, and distribution operations that serve southern California and surrounding states.

Strategically positioned for logistics, business-friendly Hesperia is a leader in supporting the long-term development of the regional economy. Hesperia’s proactive Economic Development Department (Department) and its Hesperia Community Redevelopment Agency are two powerhouses fueling Hesperia’s growth.

Hesperia is Zoned for Logistics

With two state-authorized pro-business zones, Hesperia is zone-squared. In April 2010 the City was successful in attaining final designation as an Enterprise Zone (EZ) from the California Department of Housing and Community Development (HCD) — a designation that will be in effect for 15 years. The Hesperia Enterprise Zone comprises a

30-square mile area within Hesperia’s city limits and includes nearly all of its commercially and industrially zoned areas. Businesses looking to relocate or expand in the zone may be eligible to take advantage of substantial benefits, such as hiring credits, business expense deductions, and employee wage credits.

These substantial local incentives and state tax credits and benefits of the Hesperia EZ remain in effect until March 31, 2025, with some benefits extending beyond the life of the zone. Some of these state tax benefits include hiring credits, sales/use credits, business expense deductions, net operating loss and net interest deductions, and employee wage credits.

“For over 18 months, staff worked diligently on the Enterprise Zone application to ensure limited questions or conditions existed after conditional designation,” said Deputy Director of Economic Development Steven J. Lantsberger. He continued, “We are now looking ahead at how the EZ will provide businesses with a competitive advantage in respect to a lower cost of doing business in California. Ultimately, the combined benefits of state and city incentives will lead to business growth and job generation.”

To that end, Hesperia has recently added a Recycling Market Development Zone (RMDZ) to its armory of business benefits. As one of 35 California RMDZs, Hesperia’s program combines economic development with recycling to provide financially attractive incentives for new businesses, expansion of existing facilities, job creation, and reduction of the waste stream headed to landfills. The RMDZ provides free market research, technical assistance, and below-market rate loans to qualified manufacturing firms. Located in an ideal logistics hub of the Inland Empire, both zones encompass city-owned rail-accessible land.

On the <Rail> Road to Success

Having secured $2 million in federal grant funding from the Department of Commerce’s Economic Development Administration, construction of the ‘G’ Avenue Industrial Rail Lead Track project is imminent. Consisting of nearly one mile of new railroad lead track and a parallel runaround track, it will be served by Burlington Northern Santa Fe Railway and accessible from more than 200 acres of industrially-zoned property. Construction is slated to begin Q1 2011, with completion anticipated within one year.

The addition of the rail track, one of the city’s far-reaching industrial development goals, will facilitate operations for a greater number of warehousing and distribution centers near Interstate 15. The new track will offer many opportunities for industrial users to purchase rail-accessible properties.

The rail project is guided by Hesperia’s efforts to create sustainable development that includes locally created partnerships and focuses on regional solutions for economic development. It is closely tied to Hesperia’s strong commitment to grow its economy, attract new businesses and development, and provide jobs for its residents.

Completion of this project will stimulate development and indirectly influence the attraction and expansion of other businesses into the 1,300-acre ‘I’ Avenue Industrial area. In addition, the project’s team transload facility fosters entrepreneurship by making rail accessible throughout the region to smaller businesses that will now be able to ship and receive goods with the use of a team trans-load facility.

Let the Shopping Begin!

In a sign of the City of Hesperia’s economic optimism, High Desert Gateway has recently welcomed several new stores, including Marshalls, Ross Dress for Less, Golden Corral, Farmer Boys, Rue 21, and Style for Less occupying some 75,000 square feet of retail space. High Desert Gateway, which opened in late 2008, is also home to Super Target, Verizon Wireless, Subway, Juice It Up and several other shops and services. With the addition of these new stores the center is now 80% built-out. At completion, the center will feature 349,000 square feet.

Two new department stores are sure to be a big hit with Hesperia’s shoppers. Ross Dress for Less opened the doors to its new 25,000 square-foot store in October, and Marshalls, the leading national off-price retailer, is opening a 26,000 square-foot department store at the end of November.

Hesperia’s Economic Development Department (EDD) pursued Marshalls based on the retail matches provided by the Buxton Company, the consulting firm that provides retail site analyses based on demographics and buying habits of consumers within a trade area. This is the sixth retailer that has located in Hesperia based on Buxton’s research. EDD pursued Ross Dress for Less vigorously and met with representatives at many shopping center conventions, including the International Council of Shopping Center (ICSC) conventions in Las Vegas and San Diego, and in concert with Lewis Retail Centers secured their commitment to locate in the High Desert Gateway regional shopping center.

Golden Corral, the second in Southern California, is just the fifth in the state. It is a freestanding, 11,087 square-foot family-style restaurant seating 388 guests and employing approximately 135 people. Golden Corral is a Raleigh, North Carolina-based chain offering a diverse array of buffet and grill selections, featuring beef, chicken, pork and fish, pasta, pizza, fresh vegetables, salad bar and a selection of carved meats, as well as a bakery and dessert café.

Many Farmer Boys fans are sure to be pleased to see the restaurant open in Hesperia. The 3,200 square-foot restaurant, employing 30-35 people, seats 94 patrons in friendly surroundings reminiscent of a rural farm home. Farmer Boys meets breakfast, lunch, and dinner needs with over 75 items, including award-winning burgers, specialty sandwiches, and freshly prepared salads, as well as made-to-order breakfasts.

Based on the success of High Desert Gateway I, plans are already underway for High Desert Gateway II, which will be located directly across Cataba Road and will feature an additional 200,000-plus square feet of quality retail uses.

That’s Entertainment!

A 36,000 square-foot, 12-screen movie theater will soon join more than 185,000 square-feet of governmental office development in Hesperia’s Civic Plaza. Theater developer Cinema West was granted a ten-year exclusivity period by unanimous vote of the city council. The Hesperia Community Redevelopment Agency (RDA) entered into a Disposition and Development Agreement conveying the site to Cinema West. The theater, which will create 40 new jobs, features start-of-the-art digital technology and stadium seating for 1,800. In addition, Cinema West is offering access to one theater for the city to utilize for community and city events. The theater provides a long-awaited entertainment venue for residents; construction is slated to begin in 2011, with completion anticipated by summer of 2012.

Along with the new Hesperia Police Department headquarters and the Jerry Lewis High Desert San Bernardino County Government Center scheduled to open by November of this year, and the existing City Hall and Hesperia Branch Library, daytime population will show a marked increase, making Hesperia’s downtown ripe for full-service restaurants.

With a large portfolio of lucrative zone-exclusive benefits and incentives, this team of motivated economic development professionals makes it their mission to put businesses in Hesperia on the path to success. To find out more about operating in one of the most innovative enterprise zones in the country, or to request information about Hesperia’s retail or industrial opportunity sites, contact Steven Lantsberger at (760) 947-1906, by e-mail at econdev@cityofhesperia.us; or visit www.cityofhesperia.us/econdev.

City Updates

Barstow City Update

Published by:

By Ron Rector, Community & Economic Development Director
City of Barstow

The New Barstow Community Hospital Breaks Ground

Barstow Community Hospital celebrated a milestone on September 8, 2010 with community members, local dignitaries and representatives from Community Health Systems (CHS) taking part in a historic groundbreaking ceremony for the new Barstow Community Hospital.

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. The new Barstow Community Hospital – an advanced facility that will include all private rooms, a much bigger ER, expanded operating suites and diagnostic imaging services area and dramatic improvements in the obstetrical/maternity services area and the intensive care unit – is expected to open near the end of 2012.

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 ahead of schedule, Layton Construction, Irvine-based general contractor for the new hospital, began moving dirt on the new hospital property, 19 acres across Mountain View Street from the current hospital, even before the ground-breaking ceremony was held. More than 250,000 cubic yards of dirt must be moved on the property before construction of the hospital can began (no dirt will be taken off the property or be brought in for fill).

In November 2010, the hospital expects to have its new hospital plans approved by the Office of Statewide Health Planning and Development (OSHPD), the state agency responsible for new hospital construction.

In early 2011, the general contractor will begin work on the hospital’s foundation and underground work. By the summer of 2011, the structure should start taking shape, and for nearly a year work will take place 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.

To stay abreast of the latest new hospital construction news, visit Barstow Community Hospital’s web site at www.barstowhospital.com and select the new hospital button on the home page. Beginning in 2011, community members are encouraged to return to the site occasionally to watch the on-going construction process via a time-lapse video.

Barstow Community Hospital is one of 123 hospitals in 29 states affiliated with Community Health Systems, Inc. (CHS). Headquartered in Franklin, Tenn., CHS is one of the leading operators of general acute care hospitals. The City is lucky to have such a health care provider assisting the City and the surrounding community with preparing for a bright and healthy future at the “Crossroads of Opportunity”.

Wal-Mart Distribution Center Close to Breaking Ground

The Barstow Industrial Park was selected by the world’s largest retailer to be the home for one of its mechanized distribution centers. Wal-Mart announced its plans to build and operate a food distribution center in the Barstow Industrial Park. Construction on phase one, 450,000-sq.-ft. cold storage facility, will be located on 147 acres. Employment is estimated at 300. Phase two consists of a 550,000 sq.-ft. dry goods facility. Employment is estimated at 400. Phase one is expected to break ground this year.

The cornerstone of the city’s business attraction efforts is the twelve hundred acre Barstow Industrial Park. IDS Real Estate, the developer for the Barstow Industrial Park, will offer large parcels of land within three miles of Interstate 15. IDS is working to complete the environmental impact report and to obtain all entitlements by 2011. A railroad extension to the property, forecasted for completion in 2012, positions it as one of the most sought-after industrial locations in Southern California.

IDS estimates that it will construct 11.5 million sq. ft. of new industrial buildings over a 7 to 9 year period. When fully built out, the Barstow Industrial Park could create between 8,250 and 12,400 new living wage jobs.

With the Barstow Industrial Park as the hub of our future job creation, the proposed Lenwood Rd. grade separation is critically important to transportation movement and relieving congestion in the area of our industrial park. The Lenwood Rd. grade separation is currently in preliminary engineering and environmental work.

Other Great News

The County of San Bernardino is nearing completion on a 32,000 sq. ft. remodeling of the old Barstow Mall. The County plans to house several of its departments in this facility, include their behavioral health department.

The City was awarded a $2 million U.S. Department of Commerce, Economic Development Administration grant to assist with the upgrade of the City’s wastewater reclamation facility. The upgrade will help the city meet the growing need brought on by Barstow’s economic growth.

Barstow City Council has approved a $13 million budget to be used for the city’s street Capital Improvement Program. Sully-Miller is currently working on several streets. The street construction projects are expected to be completed by June 30, 2011.

If you want quality office space in the Historic Harvey House, you better grab it while you can. The space is filling up fast.

To learn more about the “Crossroads of Opportunity,” visit the city’s web site at www.barstowca.org or give Ron Rector a call at (760) 255-5151.

City Updates

Town of Apple Valley City Update

Published by:

By Kathie Martin
Marketing and Public Affairs Officer

It is one thing to boast that Apple Valley provides its residents and businesses “A Better Way of Life.” However, this assertion becomes fact when the claim is validated by a variety of studies and surveys. Take, for instance, the recent California Retail Survey that listed Apple Valley number four in California for its “strength in the retail market” and first in the same survey for “growth persistence.” Over the last five years, sales in Apple Valley have grown 533 percent faster than the average California city. The first quarter of 2010 showed a 4.1% increase in sales tax over the same period in 2009.

“I’m extremely proud of the fact that Apple Valley is in the top five statewide. I think we’ve attracted shoppers from other communities based on the strength and diversity of our retail market,” said Apple Valley Mayor Peter Allan. “People have to shop somewhere and they will spend their hard-earned dollars in a retail environment that provides a pleasant shopping experience. Shoppers all over the region are finding that experience in Apple Valley.”

Retail Success

These retail growth facts are part of the reason why, despite the crumbling economy, Apple Valley continues to attract businesses such as America’s Tire Store that began serving customers earlier this year at its brand new location near Highway 18 and Rancherias Road, and Burlington Coat Factory, which opened in September in the Jess Ranch Marketplace. Other retailers, restaurants and service providers are either expanding in their current locations, or adding second stores. Apple Valley Skin and Body Institute, for instance, is relocating to Jess Ranch Marketplace soon and will double its size and staff to accommodate for the success it has seen since opening the non-surgical medical spa in 2006 on Quantico Road.

“The Town has been nothing but gracious since welcoming us in 2006,” said Managing Director Mary Saadat. “From business licensing to planning, everyone has opened their arms to us. The Town’s efficient and friendly staff has played a significant part of our success.”

Other businesses that have recently opened, or will be open soon, include Toys R Us Express and Panda Express at the Apple Valley Commons and Massage Envy in the Jess Ranch Marketplace.

The town’s retail success is not limited to the newer shopping developments. The original “Village” business district that dates back to the mid-1940s is gaining strong momentum through collaborative efforts among the merchants. The Village has unveiled a marketing campaign to develop a brand and, more importantly, a place: A place to dine, a place to shop, a place to work. Road improvements, signage, and landscaping projects are some of the early efforts to recognize the area as a vital part of the town’s commercial landscape. In a show of support for this historic district, local businesses, agencies and community volunteers recently installed landscaping near the western Village entrance, using all donated materials and a grant from the MWA.

NORTH APPLE VALLEY INDUSTRIAL SPECIFIC PLAN

With its success in the retail sector clearly proven, Apple Valley is ready to make the same great strides in its industrial sector, with aggressive efforts designed to move Apple Valley to the top of any site-selector’s list. The Town is proposing a plan to install nearly $13 million worth of water and sewer system backbone infrastructure into its 5,100-square-foot industrial-designated area in north Apple Valley. Funding will come from sewer impact fees as well as bonds, which would be reimbursed as development occurs. Removing a major financial hurdle and eliminating time-consuming off-site work will continue to allow Apple Valley to offer a highly competitive option for light industrial, distribution and manufacturing companies that relocate to this area. With pre-approved uses and design standards, a project can obtain administrative approval in as little as 120 days.

Get A Slice of the Apple

For information on why Apple Valley is leading California’s economic recovery, visit www.getaslice.org.

City Updates

Adelanto City Update

Published by:

By Mike Borja, Management Analyst
City of Adelanto

Located in the western portion of the High Desert, Adelanto is comfortably removed from the urban sprawl of Los Angeles, yet close enough to take advantage of urban amenities and resources. Adelanto offers the perfect blend of small town charm and big city convenience. It provides an excellent standard of living, while retaining the hard working, civic-minded mentality in which the area was built.

With a growing population of over 28 thousand residents, that encompasses approximately 52 square miles, the City of Adelanto has grown from an estimated 6,791 in 1990 to 28,265 in 2009 at an annual average population growth rate of 7.79 percent.

Adelanto had the lowest taxable retail sales per capita of the region in 2008. In 2008, taxable retail sales in Adelanto averaged just $1,383 per capita in constant 2009 dollars and 1.4 percent of total taxable retail sales in the region, while the region average $8,955 per capita.

With this growth, Adelanto experienced being one of the fastest growing cities in the state, thus creating a retail & commercial demand that has yet to be met. Such opportunities include, but are not limited to, retail clothing stores, fast food & family restaurants, fuel stations, home improvement, and sporting goods stores.

With more than eighty companies selecting Adelanto as their place of business, Adelanto has constructed over eight thousand homes for the increased workforce of almost five thousand new jobs in its five industrial parks.

With the growth comes the need for water and wastewater treatment expansion. The City recently acquired a five million gallon storage tank for potable water and the waste water treatment facility is expanding from a one and a half million gallon per day capacity to a four million per day capacity.

Known as the “City of Unlimited Possibilities,” Adelanto’s philosophy looks to be well underway to capitalize in all areas of development.

General

Understanding the Absorption Rate

Published by:

By Bob Thompson
President, Advanced Listing Services

This is an introductory essay discussing the absorption rate. All uses are not presented due to complexity and length of the presentation. The intention here is to introduce the absorption rate and its elementary use in everyday situations.

Of all the key measures used in real estate, the absorption rate stands out. This statistical tool is widely accepted in commercial real estate, and is beginning to gain traction in residential markets. The absorption rate has the ability to yield useful information without the need for long complicated processes. It is the central concept for computing the relationship between supply and demand—generally recognized as the arbiter of price.

Absorption rates for major High Desert cites are available through the Market Condition Report (MCR), published by Advanced Listing Services (www.statsforagents). Figure 1 is a section of the MCR for September 2010 (Victor Valley Area). In the column labeled “Weeks Supply Given Demand,” you will find the absorption rate for major cities in the Victor Valley area.

Supply is defined as current listings. Veterans of the real estate business know that pending and contingent properties (In Escrow) are still part of the supply chain. Demand is the average number of closings per month. The absorption rate is given the name “Weeks Supply Given Demand” because that is what the absorption rate is. It is the number of weeks required to exhaust supply (current listings) given current demand (closings per month plus pendings and contingents).

Note the difference between Oak Hills’ absorption rate (19 weeks) and Wrightwood (84 weeks). The absorption rate in Wrightwood is four times that of Oak Hills and is the highest in the entire area. That means if everything were to freeze at this point, it would take a year and a half to sell this inventory.

What should this result be telling the reader? It depends on the agenda of the reader. If the reader is a:

• PROSPECTIVE LISTING AGENT: My seller must be motivated and the need to sell must be absolute.

• PROSPECTIVE WRIGHTWOOD BUYER: I don’t care what the seller is asking, I’m going in for less.

• UNMOTIVATED SELLER IN WRIGHTWOOD: Few want to buy in my area. I’ll come back some other time.

• MOTIVATED SELLER: I’m going to price it right and cut my losses. I don’t want to make a career of this.

• AGENT WHO WANTS TO FARM AN AREA: Wrightwood is not a good choice. Absorption rate is too high.

• BROKER ADVISING AGENTS WHERE TO LIST PROPERTY: How about Oak Hills, Pinion Hills, or Hesperia?”

• SALES REPRESENTATIVE: I want to call on agents who are listing in areas with high absorption rates.

• NEWLY-LICENSED AGENT: “I got a listing! I got a listing!”

As a general idea, all things being equal, the higher the absorption rate:

1. The greater the number of supply units relative to demand;

2. The weaker the price schedule; and

3. The more the market favors the buyer.

Want to know how to calculate the absorption rate? Go to http://activerain.com/blogsview/20685/how-absorption-rate-is-figured.

Transportation

VVTA Begins Construction on Administration, Maintenance, and Fueling Facility

Published by:

By Kevin Kane
General Manager, Victor Valley Transit Authority

Over the last dozen years Victor Valley Transit Authority has grown from a semi- rural bus service to a sophisticated professional transit system just as the Victor Valley has grown into a Small Urbanized Area as determined by the federal government. The VVTA Board of Directors is comprised of city council members form the participating cities and First District Supervisor, Brad Mitzelfelt. The board’s mantra of tempered growth and fiscal conservatism has been one of the secrets to success for VVTA. Over the last few years the state’s unprecedented raids on transit funding and the downturn in the economy have led transit agencies throughout the state to reduce service and increase fares. In some cases, like in Orange County, the reductions have been as much as 20% of their total bus service. In contrast, over the past two years VVTA has actually increased service and has only implemented one fare increase since 1997.

Victor Valley Transit Authority serves Adelanto, Apple Valley, Hesperia, Victorville, and portions of the county, including Helendale, Silver Lakes, Oro Grande, Lucerne Valley, Phelan, Pinon Hills, and Wrightwood. The authority continues to perform admirably both fiscally and with regard to performance metrics. For instance, in fiscal year 99 the cost for demand response service for the disabled was over 40% of the cost for providing fixed route service. In FY 11 it represents only 26%. During that same period yearly budgeted service hours for demand response decreased by 6,199 hours and expenses (excepting fuel) increased by only $462,720 or about 2.25% per year. This was accomplished without denying any requests for rides by employing new technology, computerized reservations, dispatch, and mobile display computers installed on all demand response (ADA) vehicles. In fact, within the last year VVTA has introduced same day reservations based on availability. All this while receiving an average of 1,635 new and renewal ADA certification applications per year for the past 4 years.

VVTA’s fixed route service is more robust than ever. In 2008 for the first time VVTA introduced 30 minute service on its most popular routes. As anticipated, this increase in service grew ridership significantly with little impact on performance metrics. In 2006, according to National Transit Database Reports (NTD), VVTA provided 71,214 service hours. In 2009 the service hours increased to 98,564 or an increase of 27,350 hours or 38%. Yearly bus ridership during the same period increased to 1,241,185 for an increase of 34%, and the number of riders for each service hour provided stayed level at about 12 riders per revenue hour.

With SANBAG approval, VVTA has recently applied for federal Congestion Mitigation Air Quality (CMAQ) demonstration project funds for lifeline service between Victor Valley and Barstow. One main reason for the project is the lack of health care options in Barstow. For instance, if you require chemotherapy and live in the Barstow area you must come all the way to Apple Valley or Victorville. This new bus service will help fill that void.

Since its inception in 1992 VVTA has never occupied its own bus facility. Currently VVTA’s bus facility is a leased property on Santa Fe Avenue in Hesperia with a gravel lot and too little parking to accommodate all employees on site. Space is so tight that two of the administration offices are located in a converted metal container positioned next to the building which was the old, old Apex Rentals location. The route to VVTA’s new facility under construction at E Ave. & Smoketree in Hesperia has been fraught with “detours” and other obstacles.

In 1996 VVTA purchased 5 acres off Jasmine on Business Center Drive in Victorville upon which it placed a small CNG fueling compressor and planned to construct a bus facility. In 2004 VVTA hired Gannett Fleming, Inc. to develop a Master Plan for the development of a new facility to meet VVTA’s needs for the following 20 plus years. One finding was the Business Center Drive site was too small “It is the opinion of the Gannett Fleming team that the 5.2-acre site cannot meet the future requirements of the transit system.” The report went on to recommend a site of approximately 10 acres. As a result, in 2005 VVTA sold the Business Center Drive Property and purchased 10 acres on Ottawa St. in the Victorville Redevelopment Area. The Ottawa site ultimately did not work out so VVTA sold the Ottawa property and in 2007 purchased the current construction site.

As early as 2000 VVTA was budgeting grant funds for the design and construction of a bus facility, it became quite evident that some form of financing would be required. In August 2007 VVTA offered in conjunction with the California Transit Finance Corporation and the Bank of New York Certificates of Participation for its transit facility in an amount of approximately $36.8 million dollars at an interest rate of between 4.00% and 4.75%.

With financing secured VVTA on November 1, 2007 VVTA finally issued an RFP for the Design Build of a new and first ever VVTA Bus Maintenance, Operations, and Administration facility.

Design Build Project Description

“The Project, as master-planned, will include a 27,000 square feet administration and operations building; an approximately 31,000 square feet bus maintenance building; a bus parking lot to accommodate 120 buses and paratransit vehicles; 230 parking spaces for employees, visitors and service vehicles; a 13,000 square feet bus wash structure and fueling station; and a photovoltaic panel covered bus shade structure. Off-site work will include widening of Smoke Tree Street and E Avenue; and extension of Sewer and Water Lines. The project is designed and to be constructed to achieve the highest feasible rating as established under the standards of the Leadership in Energy and Environmental Design (“LEED”).”

After more than a year working with the highest scoring proposer, VVTA terminated its relationship with that contractor for various reasons. During this period VVTA “value engineered” the project and right sized it to a project that could still meet VVTA’s projected growth but fit within a budget of approximately $32 million for construction.

Subsequently, on August 17, 2009 VVTA released an Invitation for Bid (IFB) for the value engineered construction project. The engineer’s estimate for the project was approximately $32 million. Finally the planets aligned due in most part to a poor economy and the bottom falling out of construction. As such, VVTA received 13 bids with the winner, Edge Construction, wining with the low bid of just under $20million.

Project construction finally began in November 2009 with substantial completion scheduled in June 2011. The only major changes since the bid have been to increase the size of the photovoltaic to one megawatt, making VVTA self sufficient, and thanks to favorable pricing to convert asphalt parking areas to concrete.

CNG Fueling Station

In an effort to reduce operating expenses, VVTA issued a separate RFP for the design and construction of a compressed natural gas (CNG) fueling facility. The fueling station went live in July of 2009. This allowed VVTA to produce its own CNG fuel as opposed to buying it on the retail market. As a result of this investment, VVTA saved $195.000 in CNG costs even though the authority used 43,000 more gallons (gas equivalent) of CNG fuel in FY 10 than the year before.

VVTA has come a long way in the last dozen years. In 1998 VVTA operated mostly school buses disguised as transit buses. They had only a front door and once you boarded one you were faced with the same brown forward facing seats you see on all school buses. Electronic fareboxes, global positioning, automatic vehicle locators, Google transit, on board computers, and security cameras are all part of the VVTA landscape now. The near future will bring automatic passenger counters, automatic bus stop annunciators, online bus tracking, and a new bus facility that will keep VVTA a vital and contributing part of the vibrancy and future of the High Desert.

General

Inland Empire Economic Partnership

Published by:

By Paul Granillo, President and CEO
Inland Empire Economic Partnership

Summer has been a season of change for the Inland Empire Economic Partnership. In what is perhaps one of the most important decisions in the history of IEEP, the Executive Committee of the Board of Directors saw the immediate need for a relocation of our main office. Our new location at 201 North E, Suite 105, allows us to continue the important mission of creating a better business environment and quality of life for Riverside and San Bernardino. We continue to maintain regional offices in Riverside, Palm Springs, and Victorville. Special thanks go to Emil Marzullo of the City of San Bernardino EDA, Mark Hawkins of Altura Credit Union, our Chair Dan Rendler of the Gas Company, and the IEEP staff for all they did to make the move happen.

With our new location comes new energy and new initiatives. Planning has begun on the Inaugural Inland Empire Quality of Life Summit. A prestigious group of Inland Empire stakeholders gathered September 9th to strategize what the two day summit, to be held March 31st and April 1st of 2011 at Cal State University San Bernardino should look like. Thanks are in order for CSUSB President Al Karnig for hosting the meeting.

The Summit will focus on business, transportation/infrastructure, education, health and well being, sustainability, housing, and leadership needs of Riverside and San Bernardino Counties. The Summit will also be time for residents, business leaders, and elected officials to tackle the important challenges and celebrate the successes of the Inland Empire. More information will be provided about the Summit on our website November 4th.

IEEP is very much involved in the economic health of the Inland Empire and will soon have a major announcement to make about how we are working to make a difference for our region. Also soon to be announced are the IEEP stands on the November Propositions. Many thanks to the Government Affairs and Pubic Policy Committee and Co-Chairs Don Averill of California Construction Management and Peter Hidalgo of Time Warner Cable for their work in reenergizing this important piece of the mission of IEEP.

We continue to be a friend and aid to businesses from outside and within Riverside and San Bernardino Counties looking to relocate here in the IE. Over the first nine months of 2010, the Small Business Development Center has met with 1164 small business owners (70% of which were first time clients), seen 1624 attendees at 100 workshops and helped clients create 12 new businesses and create or retain 255 jobs. With access to capital critical to small businesses, the SBDC staff helped them obtain $1.2 million in SBA loans and another 1.4 million in non-SBA financing. SBDC clients also saw their sales increase by $7.4 million dollars in the same time period.

Despite the drop of filming all across California, the Inland Empire Film Commission is still in the top five of the most productive Film Commissions in the State. Part of the reason we are holding our own during this time is the California State Film Incentives that has served as a catalyst for production companies to consider filming in California. Another shot in the arm came during the second quarter of 2010 where we had several feature films with the largest being “Fast Five” (the fifth installment of the “The Fast and the Furious” franchise), eight television episodic shows, which included “Chaos” and 11 reality shows, one of which was “Real Housewives of Beverly Hills.” As part of our function, the IEFC attracts, regulates, and provides oversight to the numerous and varied productions filming in the two-county region, which in turn produces much needed economic impact and jobs.

As the fall starts IEEP continues to be hard at work. Many thanks to our Board of Directors and Members that realize how important a strong regional voice for Business and Quality of Life is to making change happen for the better in Inland Southern California.

General Water

VVWRA Named One of California’s Best Wastewater Treatment Plants

Published by:

By George Passantino, Managing Partner
Passantino Andersen Communications, LLC

The Victor Valley Wastewater Reclamation Authority (VVWRA) was recently named the second best plant of its size in California according to officials from the California Water Environment Association.

After being judged on a slew of criteria, including permit compliance, benchmarking, pre-treatment strategy, public relations, energy conservation, operations, maintenance efficiency, and safety, VVWRA beat out several other plants for the award.

“The CWEA Plant of the Year (POTY) award is an outstanding accomplishment,” said Dennis McBride, the Wastewater Utility Manager for the City of Redding, who evaluated plants for the award. “The award recognizes the demonstration of a well operated and maintained facility. Additionally, the POTY award is a reflection of the dedication of excellence of staff members as well as the support provided from the city, county, district, or agency that owns and governs it.”

VVWRA, which handles wastewater services for the Victor Valley, also scored well in a number of other categories, including best laboratory person and best plant manager.

“I can’t say enough about our staff and how passionate they are about ensuring that we are always running our plant efficiently and safely,” said Logan Olds, VVWRA’s general manager. “I’m very proud of what we’ve accomplished in the past few years.”

The agency has also been recognized for its financial awards, was named the best plant of its size in the region last year, and identified more than $2.5 million in savings to ratepayers over the last three years.

Education General

High Desert Schools Make Progress On State Tests

Published by:

By Dan Evans, Communications Manager
San Bernardino County Superintendent of Schools

With the start of the new school year under way, this is also the annual time of the year when public schools receive grades for how students, schools and districts do on statewide assessment tests. In August, the California Department of Education released its yearly results for Standardized Testing and Reporting (STAR), the grade-level tests in core subject areas that second-graders to 11th-graders take. In addition, the California High School Exit Exam (CAHSEE) results showed that county 10th-graders were at their highest-ever passing rates for the two portions of that assessment. Just recently in September, the Accountability Progress Report, which has three components grading how our schools are doing overall, also was released and showed that our public schools continue to make growth in their academic achievement.

These assessments tell us as educators and allow us to present to the public empirical data how our students and schools are doing. In this issue of the Bradco Report, I will highlight how our county schools, particularly those in the High Desert, did on the assessments and what those scores mean to the long-term economic vitality of our region.

Standardized Testing and Reporting

The STAR measures how well students in Grades 2-11 are doing in learning their standards for English language arts, math, science, and social studies. The results give parents one form of feedback on how well their children are doing in school. These results also give our teachers and schools a gauge to assess how well their students are absorbing the content standards in our schools.

The STAR rates student performance in five categories – advanced, proficient, basic, below basic, and far below basic – depending on how well they scored on their subject tests. The main goal of the STAR is to have all students — regardless of ethnicity, socioeconomic status, or language/learning barriers – to reach proficiency levels in each of their subject areas. It’s also important to see growth for students, in terms of their individual assessments. For example, although a student may not be proficient in third-grade math, if he moved from below basic to basic from second to third grade, that would show progress.

While these assessments give us a snapshot of how our students are performing, they do not give us a comprehensive evaluation of how they are doing in school. It’s important for parents to work collaboratively with their children’s teachers to check their progress on all facets of their schoolwork to give them a complete picture of students’ academic progress.

Countywide, we continue to see incremental improvement across the board in both English language arts (ELA) and math. In ELA, in nine of the 10 grade levels, there was at least 1 percent of improvement in scores for students reaching proficiency levels from this year to last year. It was also particularly noteworthy, that we saw a narrowing of the achievement gap between our Hispanic and African American students and their White peers in ELA. In math, the same trends held up: Proficiency levels increased in all but one grade from 2-7, and there also were increases for secondary courses, such as algebra, algebra II, and secondary math as a whole. Again, there was a decrease in the achievement gap among our main ethnic subgroups, as well as with our socioeconomically disadvantaged students.

These are all positive trends that we would like to see continue, despite the fact that as a county we still trail state averages in most areas of proficiency.

In the High Desert, it’s difficult to come up with trends across the region, but here are a few snapshots of the progress that some districts are making:

• Victor Elementary was above county proficiency averages in ELA in Grades 2-5. It also bettered county averages in Grades 2-3 in math, while matching county averages in Grades 4-5.

• Hesperia Unified second-graders and sophomores in algebra II finished above the county averages in math proficiencies. In ELA, second- and ninth-graders finished above the county proficiency averages, while sixth-graders matched the county average.

• Barstow Unified fourth-graders had some of the highest proficiency averages in math with 74 percent being proficient. Fifth- and sixth-graders also finished above county averages. In ELA, second- and eighth-graders finished above the county averages.

California High School Exit Exam

All the countywide trends for the exit exam or CAHSEE continue to be positive. The exam is conducted in two subjects – English language arts (ELA) and math.

Sophomores in the class of 2012 took the exam for the first time during the 2009-10 school year. The passage rates in both subjects were at record-highs for county students: 78 percent passed in ELA and 76 percent in math.

Passing both parts of the exit exam is a requirement for high school graduation in the state. According to California Department of Education statistics, more than 94 percent of high school seniors statewide in the class of 2010 passed both portions of the test to meet the graduation requirement.

Obviously, this test has a strong bearing on the economic well-being of our region. Students need the strong foundation afforded with their high school degree to build upon their college-readiness or entry into the workforce. Certainly, any senior who cannot pass high school because of the exam or any other reason is a reason for concern.

Traditionally, this region trails the state in both graduation and college-going rates. Without a well-trained and highly educated workforce, the region will suffer in its efforts to attract high-paying jobs and the industries that demand highly skilled workers.

So even though we have had improvement in our exit exam passage rates, there is plenty of work left to do – and not just for our students who are graduating from high school. We do need a higher college-going rate, as well as better-prepared students who are choosing to enter the workforce.

Late last year, our County Schools office issued a “Call to Action” to educators in the field and our broad base of community partners – those who are business leaders, as well as others in labor, government, education, community and faith-based groups, and most importantly parents and students. We are focusing on developing strategies and resources to help lower countywide dropout rates and increase graduation rates. We need our community’s expertise, insights, and experiences to tackle these challenges.

In the High Desert, here’s a snapshot of how several districts have performed on the statewide exit exam:

• Apple Valley Unified made some of the largest gains countywide in students’ passing rates in both ELA and math. With 78 percent of its 10th-graders passing the math portion of the test, that was a five-point improvement on last year’s scores. At 82 percent passage rate in ELA, it increased four points in a year.

• Snowline Unified students have some of the county’s highest passage rates in both ELA and math. With 85 percent of students passing ELA in 10th grade, Snowline students are not only well ahead of the countywide passage rates but also ahead of the state passage rate as well (81 percent). This holds true for math too, with an 82 percent passage rate in the district compared to 81 percent statewide.

• For the Victor Valley Union High School District, it recorded positive gains in both ELA and math. At 72 percent passage rate in math, that was two points higher than in 2009. In ELA, the 72 percent passage rate was a one-point increase over last year’s test scores.

Accountability Progress Report

 

The Accountability Progress Report is the annual statewide report card for how well our schools and districts are performing on content standards testing. The report has three components – the Academic Performance Index (API), which is the state’s measurement tool for schools and districts; Adequate Yearly Progress (AYP), the federal benchmark for schools and districts; and Program Improvement, an intervention program for schools and districts that receive Title I federal funding and do not meet their AYP targets for two consecutive years.

Starting with API, a record number of schools countywide – 169 – have reached or surpassed the state accountability measurement standard. Nearly one-quarter of the schools (42 in total) that have scored 800 or better on the API are in the High Desert. Apple Valley Unified (nine schools) and Victor Elementary (eight schools) lead districts in the region with the most top performing schools.

The API scores schools and districts on a scale of 200 to 1,000 with the target of reaching 800 or more. This year, countywide 22 more schools reached the 800 level, including 12 from the High Desert.

Countywide, the API grew 14 points to a record-high of 746. There are districts in the High Desert with scores above the county API. Those districts are Apple Valley Unified (770), Helendale (753), Morongo Unified (759), Oro Grande (829), Silver Valley Unified (749), Snowline Joint Unified (797) and Victor Elementary (809).

But there also were several High Desert districts that showed tremendous growth in their API scores this year. Topping the list was Barstow Unified (28 points of growth), followed by Oro Grande (26 points), Hesperia (17 points) and Apple Valley (15 points).

There also was big growth individually by schools. Some of the top growth schools in the county reside in the High Desert. This year, those are Apple Valley High School (67 points), Barstow Junior High (64 points) and Summit Leadership Academy in Hesperia (63 points).

The API is also used as a component for measuring the federal Adequate Yearly Progress or AYP. The difference between the two measures is that API looks at the growth or progress that students and schools are making, while AYP presets performance benchmarks in both English language arts and math that all students will have to achieve by 2014.

There is a growing disconnect between the two assessment tools. This year for the first time, there were seven county schools that were at or above the state benchmark of 800 that also fell into Program Improvement (PI), because they did not meet their AYP standards for two consecutive years.

In addition, more than half of the Title I schools in the county (54 percent) are now in Program Improvement, and an additional 98 schools could fall into PI next year if they do not meet their escalating AYP targets during this year’s testing.

It’s disconcerting that under the state’s measurement system a school could be considered high achieving for reaching its growth targets, but be considered unsuccessful under the federal measurement. It’s confusing to parents and the public, delivering a mixed message that clouds our understanding of just how well schools and districts are performing.

It’s important for parents and the public to understand that whatever measurement tool they are using to gauge the academic achievement of an individual student, it is just one snapshot in the overall mosaic of student performance. The most important connection is between individual students and their teachers. Having a student engaged in learning in the classroom and being able to attend school daily are important for long-term academic success.

Keeping students in school and on the path to college readiness or career preparation will help provide our region with the workforce that employers demand to meet their needs in our global economy.