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.

General

Publisher’s Message-Spring 2015

Published by:

Joe Brady Headshot 1

By Joseph W. Brady, CCIM, SIOR
President 
The Bradco Companies/The Bradco High Desert Report

I wish to welcome our current, future, and long stand­ing subscribers and sponsors of the 54th Edition of the Bradco High Des­ert Report, the first and only economic overview of the High Desert region, covering the north­ern portion of San Bernardino County and the Inland Empire.

As a part of our history, in late 1992, when a friend of mine, Ms. Cele Under­wood, then an Associate with the Keith Companies, a company with which we shared office space, suggested that, with all the development, bus tours and sem­inars in Southern California, we create a newsletter. Having no knowledge of how to do a newsletter, I contacted my long-time friend and mentor, Dr. Alfred Gobar, then Chairman of Alfred Gobar & Associates (Brea/Anaheim, Califor­nia).

With Dr. Gobar’s continued encourage­ment to take a leading role within the High Desert region, we moved forward with the first ever newsletter to cover the High Desert region, the Cities of Ad­elanto, Apple Valley, Barstow, Hesperia, and Victorville; the first one to properly portray the High Desert’s economy and its great assets.

Since then, Dr. Gobar has continually supplied some of the greatest articles to the Bradco High Desert Report since its inception in May of 1993. He has con­tributed articles all the way through our 52nd Edition, but due to a recent 7 year battle with cancer, was unable to prepare an article in his normal and professional manner.

Dr. Gobar is in his 7th year of battling cancer and doing quite well. When the doctors told him that they thought he would lose a substantial amount of weight, they forgot that Dr. Gobar is 1 of the most unique people I have ever met and, undoubtedly, one of the most unique people that they have ever met. He has actually gained 14 pounds, looks great, and still has a great sense of hu­mor.

He recently spoke (6 months ago) at Lambda Alpha, the Orange County Chapter, which I am the only commer­cial broker ever inducted, and I am very humbled to be a part of this great hon­orary society for the advanced and land economics.

We also had a delay in this edition with the recent addition of a new member of our family, Mr. Parker Sinibaldi, Ms. Kaitlin Alpert’s son. Parker was born on December 9, 2014, and Ms. Alpert has just been able to return to work to as­sist us on the Bradco High Desert Re­port and many of the other endeavors that we have. In the meantime we were blessed with the addition of Ms. Tailor Titus, who joined our firm on a tempo­rary basis and has now become a full-time member of our family.

While I will write some separate com­ments where I think the High Desert economy is as it relates to real estate, I do want to make a couple comments rel­ative to the article suppliers who made this edition (although late) as special as any other edition that we have ever done.

I wish to thank our friend Ms. Sheri Da­vis, Director of the Inland Empire Film Commission, who does such a great job in generating monies to the Inland Empire and High Desert economies for filming.

I wish to also thank Ms. Joy Sepulvada, Public Information Officer, who works with my long-time friend Ms. Terri Kasinga, and their soon-to-be-retired Executive Director Mr. Basem Mual­lem, of the State of California Depart­ment of Transportation (Caltrans) for the information that they have supplied. There is a tremendous amount of work underway by Caltrans, not only in San Bernardino County but through the en­tire Inland Empire. If you drive the In­land Empire as much as I do, and even going into Orange County, you really have an appreciation of where some of our gas tax dollars are being spent and how important they are for the Inland Empire growth and, most importantly, for the High Desert to be able to handle the anticipated growth over the next few decades.

I wish to welcome Mr. Bob Dutton, our brand-new Assessor/Recorder/County Clerk for San Bernardino County. I have known Bob Dutton as long as I have known his father, Mr. Ted Dutton, one of my all-time heroes. Bob Dutton is a former Assemblyman, former State Senator, and a very respected business person within the Inland Empire. Mr. Dutton brings to the San Bernardino County Assessor’s office a new and re­freshing way of thinking. As a current Tax Appeals Commissioner, I look for­ward to whatever positive changes Mr. Dutton will make. I assure you that he will make changes and they will all be for the benefit of the tax payer.

A very exciting project, which I have been monitoring for nearly 30 years, is “Tapestry,” a master plan community that was originally called Las Flores Ranch in South-East Hesperia. I have said many times that this property is not only the finest property in San Bernar­dino County for the development of a master plan community, it is one of the most gorgeous pieces of property for the development of a community. The City of Hesperia is lucky that the develop­ers, who have recently acquired it, are in the midst of re-entitling it for nearly 19,300± homes.

They are taking a long-term and very committed position within the High Desert region. I would be remiss in not mentioning the work that Mr. Don Hutchings did while he owned Las Flores Ranch. I would like to personally thank him for all of his work. To entitle a project of nearly 10,000± acres, and to find the right “timing” to develop it, is a major league task. Mr. Don Hutchings, thanks for what you did, and I hope I live long enough to see the final home built and the commercial center devel­oped for this very exciting project. We anticipate that approval for this project will come during the summer of this year and, hopefully, they will start mov­ing ground within 2 years after its ap­proval.

I wish to welcome Mr. Larry Vaupel, the Economic Development Agency Ad­ministrator for San Bernardino County. We have had a long-standing relation­ship with San Bernardino County, as a member many many years ago of the Workforce Investment Board and also of the Economic Development Com­mission. I recently met with Larry Vaupel and he will be a great addition, someone who will take a very long-term interest with his employer (5 very com­mitted Supervisors for San Bernardino County). Also a great job to Mr. Greg Devereaux in helping reposition and ad­vance the High Desert region so that we get the appropriate amount of jobs and job opportunities within San Bernardino County.

I wish to thank the Mojave Water Agen­cy, Mr. Kirby Brill, its General Manager, Ms. Yvonne Hester, its Public Informa­tion Officer and its 7 member Board of Directors for the information about wa­ter and the upcoming water symposium that will be held later this month. I assure each and every one of our readers that we will have a tremendous amount of information from the symposium to add to the 55th edition, and I look forward to adding 4 or 5 pages of content so that property owners, investors, and devel­opers can be assured of a long-term and sustainable water management program that I believe is second to none in the State of California. I congratulate the Board of Directors at the Mojave Water Agency for their great leadership.

We wish to welcome: our friend Mr. Brad Golden from Chicago Title in Cal­ifornia I have known the Golden family since 1984 when I met Mr. Ron Golden who was born and raised in Apple Val­ley and who was involved with a com­mercial title representative in Southern California; his son Mr. Brad Golden, with many family members located in the High Desert area, including one that is employed at Victor Valley Commu­nity College District; Ms. Greta Moon, who sent over information about the new change to the California revenue & tax code and the new law about docu­mentary tax transfer declarations.

In my business as a commercial real estate practitioner, I am constantly at­tempting to find what the real prices are for transferred property. Mr. Brad Gold­en’s article answers the question (please see pg. 14).

We re-welcome our County Sheriff, John McMahon, with an update to the High Desert Detention Center. Sheriff John McMahon, keep up the great job.

We are constantly asked about the amount of money spent by the federal government through county govern­ment, which is disbursed to residents throughout the High Desert who receive aid through local cities. While this is not a popular issue to discuss, and many would question my wisdom as Publisher of the Bradco High Desert Report about publishing this, it is still an issue that I believe needs to be debated within the High Desert region. It is one that all of our readers should be keenly aware of.

While many of the numbers are rather larger than you see on the graphs on page 15, 16, and 17, we are constantly urging our local officials, state officials and federal officials to help create pro­grams that will help bring people back to work, give them a greater education, and give them the tools to prepare them­selves for a workforce.

I hope that those reading this take this data seriously, and I welcome each and every one of your comments to my per­sonal email: Joseph W. Brady, Publisher of the Bradco High Desert Report, at jbrady@thebradcocompanies.com, so we can put you on a list of people who we can call on when and if meetings are held by our city, county, and state offi­cials.

We always appreciate the great work that Ms. Debbie A. Cannon, and Ms. Vickie Nagel do for the non-profits through their Academy for Grassroots Organizations. It is one of the greatest organizations that I have seen that deals with non-profits and how they can help truly direct monies to an area (every area needs money for non-profits).

We thank our friends at the Inland Em­pire Economic Partnership (IEEP), un­der the direction of Mr. Paul Granillo, and their very strong Board of Directors for everything that they do to promote the Inland Empire through the Econom­ic Partnership. We hope the day will arise when all the cities throughout San Bernardino County and the Inland Em­pire are members of the IEEP.

I still remember when the original or­ganization Inland Empire Economic Council (IEEC) was formed by people such Mr. Ted Dutton, Mr. Steve Pontell, Dr. John Husing, and many other no­table individuals throughout the Inland Empire who have always had a passion about economic development and the economic development movement.

One of our keynote speakers for the 13 years that we held the High Desert Leaders Economic Summit, which ben­efited the Red Cross, was Mr. Larry J. Kosmont, CRE, President and CEO of the Kosmont Companies. Mr. Kos­mont’s article, “In The Wake of Rede­velopment,” is an excellent discussion about alternative methods of potential financing for projects that we will see in the upcoming years. Mr. Kosmont is a leader in the industry and at one time was the youngest City Manager hired in California. Mr. Kosmont, thank you for all your work.

We truly appreciate the relationship that we have not only with Caltrans, but more importantly, their partner SANBAG (San Bernardino Associated Govern­ments). Having sat on the new Measure I committee in 2005 (as I remember), San Bernardino County voters passed a nearly $6 billion± highway improve­ment bill projected for 30 years. We can truly see the amount of work that SAN­BAG and their partner Caltrans is doing by the I-15/I-215 Interchange and by the I-15 resurfacing.

We have enclosed information that we have received from our friends at the State of California Employment Devel­opment Department that show the rela­tionship between unemployment rates and total industry employment in the High Desert region comparing 2009, 2010, 2011, 2012, and 2013. 2014 pre­liminary numbers are still in the midst of being adjusted and will be for the next few months.

I would be a little unbiased if I didn’t compliment my friend and a gentlemen who I enjoy working with, Mr. Robert Sewell, the Director of Marketing and Public Relations at Victor Valley Com­munity College District where I now serve as President of the Board of Trust­ees. We have a great institution and have recently submitted our updated accredi­tation, which I strongly suspect will re­ceive a positive response before July 1, 2015. I would like to thank Mr. Robert Sewell, who took over for our long-time friend Mr. William Greulich, who has since retired, and is enjoying playing golf, spending time with his grandchil­dren and his family. I would like to thank Mr. William Greulich for all that he did at Victor Valley Community College, and for all the wisdom that he showed me in my early years as a Trustee.

I also wish to re-welcome our new President and Superintendent Dr. Rog­er Wagner, who was also the President and Superintendent at Copper Moun­tain Community College (Yucca Valley/Joshua Tree/29 Palms). He is doing an excellent job in leading our Board of Trustees and helping to reposition Vic­tor Valley Community College as one of the premier community colleges in the state.

Lastly, we thank each one of our city partners for their economic update. It was our local cities that urged me early on that we needed a vehicle in order to properly portray the High Desert econ­omy and the work done by each one of the cities, their Mayors, their City Man­agers, their Economic Development Di­rectors. I thank each one of you for all that you do and look forward to a pros­perous 2015.

To keep my opening comments as short as possible, I would like to thank each and every one of our article suppliers ,who continually make the Bradco High Desert Report the most unique economic overview of the High Desert, the longest standing publication, and the one with the most subscribers.

While we have transitioned away from publishing our report on a quarterly ba­sis due to the protracted recession (de­pression), we continually see improve­ment in the High Desert economy and we look forward to an ever-improving 2015 year.

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 .

I always welcome people’s emails to jbrady@thebradcocompanies.com, your phone calls to 760.951.5111 Ext 101 and any comments that you have on how we can continually improve our content and our distribution. Thank you.

General

Edition Dedicated to Mr. Willie Pringle

Published by:

Mr. Willie Pringle

On January 6, 2015, we lost a dear friend of the High Desert and, most im­portantly, Victor Valley Com­munity College District. His name was Mr. Willie Pringle. From the early days when I moved to the High Desert in mid-1988, Willie Pringle was always a gentlemen who was “bigger than life.”

I knew him and the many roles that he held throughout the region, all based on education, with a deep and long-founded love for his college, Victor Valley Com­munity College District.

Willie had a life-long service record in the community and continued to stay active in service-leadership roles.

He served as a member of the Board of Trustees for Victor Elementary School District from 1994-2009. In addition to his elected service on the board, he con­tributed his time and talent as a board member for Job Opportunities and Ben­efits (JOB), assisting the disabled; was a member of the Citizens Volunteer Corps, the High Desert Diversity Coali­tion; the Kiwanis; served on the super­visory committee at Victor Valley Fed­eral Credit Union; and the Desert Valley Charitable Foundation.

Willie worked for decades for the San Bernardino County Fair, served on the Hesperia Truancy Board, and had been a member of the City of Victorville advi­sory board and planning commission.

He volunteered his time on Thanksgiv­ings and Christmases, serving meals to the homeless with the Salvation Army.

He was recognized by the Daily Press as one of the ten most influential Afri­can American men in the High Desert, and was recognized by both the Los An­geles County Alliance of Black School Educators and the National Alliance of Black School Educators for his service as a school board member. Willie cur­rently served as a board member for the Excelsior Charter School.

I was humbled to be appointed as a Trustee to Victor Valley Community College District on February 1, 2011, and was successful in my bid for re-election in November of 2012.

I remember a conversation I had with Mr. Willie Pringle while he was battling the early stages of prostate cancer and the encouragement he gave to continue to move forward for the advancement of education and, most importantly, for Victor Valley Community College Dis­trict to be the premier educational insti­tution of the High Desert region.

Whenever I called Mr. Pringle, he was always there. The last time I saw him, I was taken aback by the amount of weight he had lost, but he made it an absolute point to not miss any of Victor Valley Community College District’s football games this last year when Victor Valley Community College District went un­defeated, set a record, and was one of the top community colleges in the entire nation. The dedication of this football team was a part of their love and admi­ration for Mr. Willie Pringle, as it was for any of us that knew him.

When I attended his service, I spoke to his wife, Mrs. Mary Pringle, who is also an Associate at Victor Valley Commu­nity College District, and I told her that I wanted to dedicate the 54th edition of the Bradco High Desert Report to Mr. Willie Pringle. I hope that you under­stand that as Publisher of the Bradco High Desert Report, we started to dedi­cate editions to people whom we have held in the highest esteem over many years in the High Desert region. We have honored Mr. Ira Norris, the Found­er and Chairman of Inco Homes, For­mer Mayor and Co-Founder of the great City of Adelanto, Ms. Mary Scarpa. We now include Mr. Willie Pringle as one of our very special people to whom we dedicate this edition.

Economy Film General

How does the Inland Empire Film commission Make it so easy?

Published by:

How does the Inland Empire Film commission Make it so easy 1

By Sheri Davis – Director

The High Desert still remains the number one desert location for the Film Industry in California. Why you ask? It is really a simple answer – terrific light, diversity of locations (from a mountain community to the vast sand dunes at Dumont) as well as experienced crew and service providers. Also, the film industry gets ease of permitting with the Inland Empire Film Commission which serves as the One Stop Permit Agency for the County of San Bernardino, the United States Forest Service and the Bureau of Land Management. How does the Film Commission make it so easy? They have some very important partners whose support is key to successful filming in the High Desert. The Barstow Bureau of Land Management leadership and staff deserve a medal for their excellence in assisting filming. This office is exemplary and should be the role model for other BLM field offices. County Supervisor Lovingood from the First District and Supervisor Rutherford from the Third District are very supportive partners to the film commission and are great proponents of filming in their districts.

Filming Update For 2014

Feature Films: 11 feature films selected locations from El Mirage Dry Lake to the Dumont Dunes. The pattern of studio features shooting out of state for most of their production continued through 2014 as they secure incentives, both in other states and other nations. Some of the smaller films shot were “Nothing Like Romance” shot in Oro Grande, “The Executer,” shot in Yermo, and “Zeroville,” shot at the Barstow Drive-in. We are very hopeful that the new incentive bill AB1839 that passed allowing $330 million a year for five (5) years to be used as an incentive to keep filming in California. This renewal and revision of the State Film Incentive program bumps the 20% incentive to 25% for films shooting outside the 30-mile zone around Hollywood (more details below). Hopefully, this will encourage production to come to the High Desert.

Reality Television: Reality TV still enjoys filming in the High Desert region with 14 shows such as “Top Gear,” Jay Leno’s untitled new show, “Masterchef,” “Sand Master,” “Die Trying: Gates of Hell,” “Storage Wars,” and “IQ Challenge,” to name just a few of the shows.

Commercials: 56 commercials selected locations in the High Desert. The dry lakes in the county still attract the largest numbers of commercials with El Mirage Dry Lake leading with 17 commercials. Here are a few commercials that did NOT involve the automobile industry: GE, Icon Health, Water Future, 7 Jeans, Megane-ichiba sunglasses. Other dry lakes like Soggy, Silurian, Lucerne, Rabbit and Coyote also attracted their fair share of commercials like Blacklist Olympics, Golden Girls, Pokémon Master Recruiter, USA Network Series Promo for “Dig,” American Eagle and California Lottery. Then, of course, we had many of the car agencies return for that special desert look…Subaru, Lamborghini, BMW, Mercedes Benz, Hyundai, and Dodge Viper, among many other products. The locations ranged from communities like Yermo to Baker, from Barstow to Wrightwood, from Lucerne Valley to Trona. Watch for these commercials and enjoy your locations being introduced to the world.

Still Photography: Still photographers still consider the High Desert lighting and diversity to be perfect for their requirements. 62 still photography shoots for both national and international products like Gala Paris, Macy’s, Prestige Magazine, Nissan Frontier, Lexus, Top Gear Clothing, American Eagle, Show Me Your Mumu, ESPN Magazine, Engelbert Strauss Workwear, Arch Motorcycles, W Magazine, Urban Outfitters and Grip (a German TV car magazine) are some the highlights.

Music Videos: The region enjoyed a huge increase in music videos over the previous year. There were 35 music videos shot throughout the High Desert. Have you ever wondered about all of the music videos that you have seen and thought look like your area. Well, here are just a few for your viewing pleasure – just go to the URLs below and enjoy a music video shot in your region.

Student Production: 19 film school projects discovered the High Desert region. Some of the larger film schools that used our region were Chapman University, University of California Irvine, New York Film Academy, Art Center College of Design, Loyola Marymount University and Columbia College.

Documentaries, Short films, Web Series: 51 other productions selected varied locations in the High Desert such as a market in Trona, the Barstow Hospital, as well as various locations in Newberry Springs and Daggett. However, 38 of the productions were shot on land managed by the Barstow Bureau of Land Management which includes El Mirage Dry Lake, Johnson Valley and the Dumont Dunes.

King of the Hammers: Each year a film crew comes out to record the actions at one of the biggest desert racing events in the Nation called “King of the Hammers.” This is a 5-day event that always selects Johnson Valley, is filled with races, vehicle rock climbing, etc., and has an audience of over 25,000 people attending. We want to thank the Barstow Bureau of Land Management for their support of this important race to Lucerne Valley and the desert region.

Johnson Valley Update

Tony Perry, a reporter with the Los Angeles Times, in an article on May 9, 2014, reported on the final decision for the use of Johnson Valley by the U.S. Marines and the OHV community.

“After nearly a decade-long dispute between the Marine Corps and off-road vehicle enthusiasts over a rocky patch of desert west of the base at Twentynine Palms has ended in a compromise brokered by Congress. Neither side got everything they wanted in the tussle over the nearly 200,000 acres of forbidding Johnson Valley — a place of rugged beauty that off-roaders say is virtually without peer for their sport. The Marines say the same about their training needs.

As included in the 2014 defense bill signed by President Obama, approximately 43,000 acres of Johnson Valley will be for recreational use only, 79,000 acres will be for the Marine Corps, and 53,000 acres will be shared between the off-roaders and the Marines.”

Johnson Valley

The Inland Empire Film Commission is not certain at this time how these decisions will impact filming.

California Tax Incentive Update

California Film and Television Tax Incentive Expanded and Extended 20-25% Credit

The California Film & Television Job Retention and Promotion Act, signed by Governor Brown in September, 2014, expands and improves California’s Film and TV incentives. The California Film Commission is currently developing regulations and other procedures to administer the newly expanded film and TV tax credit program.

Key Changes from Prior Program

  • Increases tax credit program funding to $330 million per fiscal year; extended for 5 years
  • Expands eligibility to big-budget feature films, 1-hr TV series (for any distribution outlet) and TV pilots
  • Eliminates budget caps for studio and independent films
  • Replaces current lottery with a ranking system based on jobs and other criteria
  • Provides for multiple allocation periods throughout the year

Additional 5% Credit Uplift (Maximum credit = 25%)

  • Filming outside the Los Angeles zone + 5%
  • Music scoring/music tracking recording expenditures + 5%
  • Visual effects expenditures + 5%

Eligible Productions

  • Feature Films: $1 million minimum budget; while there is no maximum budget cap, credit allocation applies only to the first $100 million in qualified expenditures
  • Movies-of-the-Week and Miniseries: $500,000 minimum budget
  • New Television Series for any distribution outlet: $1 million minimum budget per episode (at least 40 minutes per episode, scripted only)
  • TV Pilots: $1 million minimum budget
  • Television Series, without regard to episode length, that filmed their prior season outside California; $1 million minimum budget
  • Independent Films: $1 million minimum budget; while there is no budget cap, credits apply only to the first $10 million of qualified expenditures (only independent projects may sell their tax credits)

New Selection Criteria

Productions will be ranked from highest to lowest based upon a jobs ratio and other criteria against “like” projects (TV ranked against TV, indie projects against indie, etc.). The CA Film Commission will award tax credits to those productions in each category with the highest ranking. The new program provides four separate funding “pots” for these categories : TV series and TV pilots / independent projects / non-indie feature films / and relocating TV series.

Key Dates

Final Lottery – Original tax credit program eligibility – APRIL 2015

  • Productions may not begin principal photography before July 1, 2015

New Program: First application period – May 2015 (TV only) / Summer 2015 (feature films)

  • Projects selected by new ranking system
  • Productions may not begin principal photography before July 1, 2015

Courtesy of the California Film Commission

High Desert Film Alliance

The High Desert Film Alliance, which is active and meets monthly in the region, has new Co-Chairs – Joshua and Tiffany Addante. With this new leadership, they are looking into expanding their internet exposure in hopes of being available to assist more productions as they come into the region. The alliance has also changed their monthly meetings to the 2nd Thursday of each month at 6:30 p.m. at the Marriot Courtyard in Hesperia. If you are interested in attending to find out more about the alliance, or if you are a film professional living in the High Desert and would like to network with other professionals, please feel free to come. Please RSVP to info@filminlandempire. com so we can save you a seat. Menu will be available for those of you who would enjoy dining during the meeting.

The Inland Empire Film Commission wants to take this opportunity to thank Phyllis Overall for her years as Chairman of the High Desert Film Alliance. Her dedication and energy for film production in the High Desert is unequaled and she will be missed.

General Transportation

Transportation Improvements Continue in the High Desert

Published by:

Ranchero Road Interchange

By Joy Sepulveda
Public Information Officer
Caltrans

Since 2012, Caltrans has been actively working to improve the transportation infrastructure in the High Desert. The growth of the region, as well as the result­ing congestion has made improvements a priority for the department. Commut­ers and tourists are using the routes and arterials more and more in their travels. In fact, more than one million vehicles travel through the Devore Interchange each week, which makes it the most significant chokepoint on Interstate 15 (I-15) in San Bernardino County with traffic queues extending south for five miles during the late afternoon/evening rush hour.

While no major projects were complet­ed in 2014, two projects continued full steam to deliver significant changes to the transportation system. In addition, two projects are planned for State Route 58 (SR-58) west of Barstow to provide enhanced connectivity from the High Desert to the Kern County line.

Devore Interchange Project

The I-15/I-215 Devore Interchange Proj­ect, which began in November 2012, will add a truck by-pass lane, add an ad­ditional lane in each direction, bring the interchange up to operational standards, as well as address the arterial highways network deficiencies—specifically the reconnection of Route 66 (Cajon Bou­levard).

To date, the project has achieved several major milestones and is 50% complete. The milestones include:

  • Opening of the new southbound I-15 Kenwood Avenue on and off-ramps
  • Opening of the new Devore Road Bridge
  • Opening of the new I-15 inside lanes south of the I-15/I-215 interchange
  • Completion of 10 of 30 walls
  • Completion/under construction 10 of 17 bridges

With so much work happening at once, the Devore Interchange Project team is committed to providing superior com­munication. To that end, communica­tion and collaboration with emergency responders continues and is considered a high priority. Additionally, construc­tion zone staging is designed to provide access to emergency responders (par­ticularly fire services and CHP). The project team is also committed to pro­viding safe access to motorists traveling through the project area.

Currently, the project is estimated to be complete in late 2016.

I-15 Cajon Pass Pavement Rehabili­tation Project

The I-15 Cajon Pass Pavement Rehabil­itation Project began last spring. As a strictly pavement rehabilitation project, it will resurface and restore the pave­ment between Kenwood Avenue and the Hesperia Overhead, which will pro­vide approximately a 40 year life to the pavement through the Cajon Pass.

So far the project has replaced the pave­ment in 13 lane miles on I-15, as well as reconstructed 33 miles of shoulders. Most significant is the completion of the northbound and southbound lanes from SR-138 to Oak Hill.

The project currently has another 28 lane miles to replace and 15 miles of shoulder to reconstruct. It is estimated to be complete in late 2015.

As with the Devore Interchange Proj­ect, communication is key for the Cajon Pass Project team. In addition to com­municating with emergency respond­ers, information is also shared utilizing many formats.

SR-58 Hinkley Expressway Project

Caltrans plans to widen and realign a portion of State Route 58 (SR-58) from a two-lane conventional highway to a four-lane expressway extending from approximately 2.4 miles west of Hidden River Road to approximately 0.7 mile east of Lenwood Road, near the unin­corporated community of Hinkley in San Bernardino County.

The project will include construction of two interchanges on the widened and realigned portion of SR-58; one at Hinkley Road and the other at Lenwood Road. All entrance ramps (westbound and eastbound) will have two lanes at the local road and will transition to a single lane prior to merging onto the expressway. All exit ramps will have three-way stops at the exit ramp inter­sections with the local road. Americans with Disabilities Act (ADA) compliant curb ramps will be included.

The project includes access to non-motorized transportation modes (e.g., pedestrian/bikes/equestrian) by provid­ing six foot wide sidewalks, as well as standard eight foot shoulders across the two overcrossing bridges at Lenwood and Hinkley Roads. A short length of the existing SR-58 at the east end of the project is proposed to be realigned to tie in to the Lenwood Road westbound en­trance and exit ramps. The widened and realigned expressway is planned to be on a fill section (elevated sections of a roadway). All locations with large ver­tical surfaces (i.e., retaining walls and bridge structures) will include aesthetic/architectural treatment to prevent graf­fiti.

The project was awarded to Skanska and is expected to begin construction in June 2015.

SR-58 Kramer Junction Project

This project proposes to widen the road­way to accommodate four lanes of ex­pressway on SR-58 in the County of San Bernardino near the Kern County line to miles east of US Highway 395. This project involves the realignment of the roadway and will provide for a grade separation for the railroad crossing. The project will construct new pavement and widen the median, as well as improve geometrics to accommodate the Surface Transportation Assistance Act (STAA) trucks.

The purpose of the project is to accom­modate increased volumes of oversized vehicles. The project will reduce traffic congestion, improve traffic safety, re­duce accident rates, improve operation­al efficiency by separating slow-moving vehicles, improve reliability of goods movement, reduce people/goods move­ment conflicts and extend the life of the pavement.

The project is currently in the environ­mental document phase and is estimated to be advertised for bid in December 2016.

The four projects mentioned above will greatly transform the transportation in­frastructure of the High Desert. Caltrans is proud to be able to deliver quality projects that will enhance the lives of the traveling public.

Economy General Property

Most High Desert Home Values Trending Up

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Fig 1 Most High Desert Home Values Trending Up

By Bob Dutton
Assessor-Recorder-County Clerk
San Bernardino County

As the newly elected Assessor for San Bernardino County, I am very interested in monitoring and taking action to stimu­late economic development in the region. One of the key indicators of the regional growth is the value of the various prop­erty types within the County.

Over the last several years, dating back to 2008, there have been some very dra­matic changes in assessed property val­ue. Before we discuss property value, it is important to distinguish the difference between market and assessed property value.

Market value: The lowest price a sell­er would be willing to receive while at the same time the highest price a buyer would be willing to accept on an open and competitive market.

Assessed value: Value utilized by the As­sessor as the basis for taxation of prop­erty. In California this is constrained by Proposition 13 enacted in 1978.

In the 2007-2008 timeframe, properties within San Bernardino County reached a peak point. However, with the down turn in the economy and the resulting reces­sion, many properties had a dramatic re­duction in value. Properties located in the High Desert area followed this same pat­tern. This region includes the incorporat­ed cities of Adelanto, Apple Valley, Bar­stow, Hesperia, and Victorville, as well as the unincorporated areas of Lucerne Valley, Pinon Hills/Phelan, Wrightwood, Helendale, Hinkley, Yermo/Daggett and Newberry Springs.

When looking at the difference in all High Desert secured property from the peak in 2008 until the low in 2012, there was an overall decrease of 35% in assessed value. The majority of the reduction was felt within residential property with a de­crease of 48.5%. This accounts for 93% (by number of properties) of all property. Commercial, industrial and agricultural property remained relatively the same during this time frame with only slight fluctuation in the assessed value.

Fig 1 Most High Desert Home Values Trending Up

To understand the current trend, we can look at what has occurred in assessed val­ue over the last three years, 2012 through 2014. As shown in Figure 1 (Residential Average Assessed Value), all of the in­corporated cities except Barstow have experienced positive growth in assessed value for residential properties:

  • Adelanto: 14.41%
  • Apple Valley: 11.50%
  • Barstow: (4.93%)
  • Hesperia: 11.80%
  • Victorville: 12.67%

Of the unincorporated areas, some of the residential properties have realized slight growth and others have declined in as­sessed value:

  • Lucerne Valley: 1.41%
  • Pinon Hills/Phelan: 6.89%
  • Wrightwood: 6.82%
  • Helendale: 4.81%
  • Hinkley: (47.75%)
  • Yermo/Daggett: (5.29%)
  • Newberry Springs: (5.18%)

Fig 2 Most High Desert Home Values Trending Up

For commercial properties (e.g., stores) in the incorporated cities, there is mini­mal growth, with the majority realizing a decline in average assessed value as shown in Figure 2 (Commercial Average Assessed Value):

  • Adelanto: (6.99%)
  • Apple Val­ley: (2.32%)
  • Barstow: (2.73%)
  • Hesperia: 5.27%
  • Victorville: 3.21%

Similarly, the unincorporat­ed areas have predominately seen a decrease in the commercial as­sessed average value:

  • Lucerne Valley: 6.46%
  • Pinon Hills/Phelan: (0.22%)
  • Wrightwood: (1.17%)
  • Helendale: (18.63%)
  • Hinkley: (33.41%)
  • Yermo/Daggett: (0.43%)
  • Newberry Springs: 1.71%

Fig 3 Most High Desert Home Values Trending Up

The last area of interest is the industrial properties (e.g., warehouses, manufac­turing, etc.). As shown in Figure 3 (In­dustrial Average Assessed Value, the values for the incorporated cities have stayed primarily the same or had a slight decrease:

  • Adelanto: 6.76%
  • Apple Valley: (0.06%)
  • Barstow: 3.64%
  • Hesperia: 4.62%
  • Victorville: (3.45%)

These trends are also seen in the unincor­porated areas as well:

  • Lucerne Valley: (1.51%)
  • Pinon Hills/Phelan: (4.01%)
  • Wrightwood: 2.47%
  • Helendale: (13.22%)
  • Hinkley: (4.90%)
  • Yermo/Daggett: (8.02%)
  • Newberry Springs: (5.35%)

In summary the outlook for residential property has been positive and shows strong growth, but we are still lagging in commercial and industrial properties. I have a strong interest in working toward economic growth in the High Desert region, as well as throughout all of San Bernardino County. If we can stimulate development in the commercial and in­dustrial properties, it will in turn create additional jobs and provide for even stronger future growth for the residential property values.

General Property

Hesperia’s Tapestry Master-Planned Community will be a Jewel of the High Desert

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hesperia-jewel

By the Tapestry Development Team

Nearly 25 years after first being set into the plans at the founding of the City of Hesperia, a master-planned community is finally going to be a re­ality. The former Rancho Las Flores Specific Plan is now the Tapestry mas­ter-planned community. The project is being developed by Terra Verde Group, which has a successful history of build­ing master-planned communities in Southern California and throughout the United States.

Even though the property is already entitled for over 15,000 homes and is part of the City’s General Plan, the project will face additional review due to updates in its plans. In the next few months, Tapestry will go before the Hesperia Planning Commission and City Council for approval of a new En­vironmental Impact Report (EIR), Spe­cific Plan, and Phase I Tentative Tract Map. The project team has already held several public meetings and informa­tional sessions and expects to do more in the lead-up to approval.

The Tapestry master-planned communi­ty is located at the heart of what Hespe­ria Mayor Eric Schmidt and others dub the “Mojave River Basin”. The project lies north of the 138 and 173 Highways, east of Arrowhead Lake Rd, south of Ranchero Road, and extends west to the Hesperia city limits, about 2 miles short of Summit Valley Rd. When it is built out, in the next few decades, the Tap­estry community will feature 19,311 homes located on 9,365.5 acres, 4,000 acres (42%) of which will be preserved for open space and conservation.

Tapestry Site

Tapestry will be a very high quality community that will enhance the qual­ity of life in Hesperia. It is our hope that as this project moves forward, Hes­peria residents will come to see it as an asset to the community as they enjoy the open space and parks that will be an essential part of life in Tapestry.

Designed for Quality Living

Tapestry will provide a premier living experience by promoting upscale archi­tectural design and a special emphasis on quality living. The goal is to appeal to younger families looking to purchase their first homes. Tapestry will be built with active families in mind. Walkabil­ity is a major feature of the Tapestry Specific Plan, with 161 miles of trails and paths built throughout the commu­nity.

Master Planned Community

In addition to walkability, parks and open space will be a major component of living in this community. Not only will there be a mix of neighborhood and pocket parks placed throughout each neighborhood, but a major sports park is planned in the 6th phase of develop­ment. Utilizing their experience in pro­viding excellent amenities in master-planned communities throughout the United States, the development team plans to include recreational opportuni­ties for all the residents of Tapestry.

At the center of the project will be a premier town center to feature upscale restaurants, retail, grocery stores and other amenities. The Tapestry town center will exist not only as a benefit to Tapestry, but will be built as a destina­tion center for the entire Mojave River Basin.

Respecting and Protecting the Local Environment

One hallmark of life in Hesperia is liv­ing in a beautiful natural environment, and Tapestry will be designed to pro­tect that special quality of life. Tapestry preserves the Victor Valley’s unique desert environment in its plans and de­sign guidelines. Hesperia residents will be able to enjoy thousands of acres of new parks, pedestrian and equestrian trails, paths and open spaces. The proj­ect team has also worked with the San Manuel Band of Mission Indians to help preserve areas of importance to Native Americans, and also has plans for an interpretive center to honor the history and culture of this wonderful valley.

Master Planned Community 1

Tapestry is a state-of-the-art commu­nity. It is implementing energy and wa­ter saving techniques that could not be done on a smaller project. Water-wise planting techniques and state-of-the-art xeriscaping will be employed through­out the community. In addition to xeriscaping, recycled water will be used for irrigation purposes throughout the project to help reduce water consump­tion. Every home within Tapestry will be required to provide rooftop solar ca­pability, making it the first community of its kind in the High Desert to achieve the level of sustainability that is so im­portant for future generations.

Enough Water for 20 Years

In 2011, the city ap­proved an Urban Wa­ter Management Plan (UWMP) that detailed the city’s water needs, uses, and supply & demand, including its estimated popula­tion growth and water needs for the next 25 years. A Water Sup­ply Assessment was prepared in 2014 for the Tapestry project, by the same team who compiled that 2011 UWMP, which demonstrated wa­ter availability exists today for nearly 20 years. Tapestry will build all of the water supply and storage systems and give these improve­ments to the City.

Improving Mobil­ity for Residents

Traffic has been a concern among resi­dents adjacent to the project. Tapestry, in its planning is de­signed to help alle­viate problems that currently exist. Tap­estry will include multiple access points, especially to the north, that will help reduce conges­tion by providing millions of dollars in vital road expansions, new signals and other improvements. The developers have been in talks with both the City of Hesperia and Caltrans to find solu­tions to congestion on Ranchero Rd and Highway 138, respectively.

Master Planned Community 2

All of the costs of developing the Tap­estry project area will be carried by the project developer. The City of Hespe­ria is developing a phasing schedule for this work, which will be specifically ar­ticulated in the Tapestry Development Agreement between the city and the project developers.

Benefits of Long Term Land Use Planning

The project will be built in 10 phases, with the first phase of approximately 2,300 homes beginning in 2016. Since Tapestry is a master-planned communi­ty, it provides the City of Hesperia with an opportunity to plan long-term and create a community that will sustain it­self and serve as a catalyst for solutions to regional issues. Individual develop­ment projects cannot address traffic, water supply, wastewater treatment or other such improvements. They pay their development impact fees, but it is some time before enough fees are accu­mulated to actually construct improve­ments.

The Specific Plan process allows other public use issues, such as parks, schools and public safety, to be adequately an­ticipated and addressed. The parks dis­trict can identify their future park and recreation needs and identify specific parcels where these improvements can be constructed and can enter into financ­ing plans for these improvements. The same holds true for schools and public safety. The process also allows the city to exert more direct control over design than it can on individual projects.

Master Planned Community 3

The Tapestry Specific Plan includes plans for two mixed-use town centers, eight elementary schools, two middle schools, and two high schools. The project also includes multiple public and civic facilities (like a post office, library branch, fire and police station, etc). These vital parts of infrastructure could only be done within the scope of a master-planned community like Tap­estry.

Why Now is the Time for Tapestry to Succeed

Why now? Because the market is right for development in the High Desert. Prices in the LA basin and in the ar­eas down the hill have reached levels that put home owner­ship out of reach for young families. The population continues to grow and the High Desert is the logical place to go to find a high-quality, afford­able place to live. We firmly believe that if we can build Tapes­try, Hesperia will become a preferred location for the continued job growth that is taking place in Southern Califor­nia and that Tapestry will be a vibrant community for many years to come.