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Fall 2010 l Volume 47

The

RADCO Companies

High Desert Report A quarterly economic overview of the High Desert region affiliated with The Bradco Companies, a commercial real estate group

I wish to welcome our current and future subscribers to the 47th edition of The Bradco High Desert Report, the only economic 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.

Inside This Issue The Study of Economics Called ‘Dismal Science’?........................ 2 Reigniting Recovery for the Epicenter of Affordability........... 6 Regulatory & Economic Equity......... 8 The Profit of Nonprofit...................... 9 High Desert at Tipping Point In Its Evolution......................... 10 Economic and Business Climate...... 10 SB 375-Government Intervention or Market Trend........................ 11 County of San Bernardino Planning For the Future........................... 13 Taking Steps to Ensure There’s Water Now and the Future....... 14 Victor Valley College Expands........ 15 High Desert Schools Make Progress On State Tests.......................... 16 VVWRA Best Wastewater Treatment Plant........................ 18 Inland Empire Economic Partnership................................ 19 VVTA Construction on Facility...... 20 Understanding Absorption Rate..... 22 Employment Information................ 23 City Update Adelanto................................... 28 Town of Apple Valley . ............ 29 Barstow..................................... 30 Hesperia.................................... 31 Victorville................................. 34

As always, we wish to thank all of our committed article suppliers and our newsletter sponsors for their continued commitment to our endeavor, in our attempt to find positive, factual, and interesting information that relates to the High Desert economy. Not only are we excited about this current edition, we are extremely happy with the results from our 46th edition, the largest edition ever printed at 36-pages. The 46th edition, which is available for those online (www.thebradcocompanies.com/register), depicted a discussion about the proposed Desert X-Press, the high speed rail concept and the American Magline Group (AMG) proposed project that would connect Southern California (the Victor Valley) to Las Vegas. If you didn’t get a chance to read this very exciting edition, we have archived it at www.thebradcocompanies. com. As I have said for the past few editions, I strongly believe that our world, our nation, 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 publisher of The Bradco High Desert Report, I still believe the “glass is half full”, as evidence 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 Desert region. We have noticed a pick up in commercial/ retail leasing and some additional interest in the purchase of commercial, office, and industrial properties that are priced appropriately in relationship to the Southern California market. Effective with the 45th edition, the Bradco High Desert Report, we are continually sending out nearly 25,000 “free” electronic copies for those that wish to subscribe for

current and future editions. During this last quarter, over 1,578 people signed up for a free subscription to the Bradco High Desert Report. We wish to welcome you to our company, and we look forward to being of service to you for years to come. We always appreciate hearing from our close friends and one of my all time idols, Dr. Alfred Gobar, Chairman of Alfred Gobar Associates (Anaheim). We would like to re-welcome the Building Industry Association-Baldy View Chapter and an article by Mr. James L. Previty. We always appreciate the commentary we receive from the Mojave Desert Air Quality Management District and its Executive Director, Mr. Eldon Heaston, and wish to welcome Ms. Vici Nagel, President and CEO of the High Desert Resource Network on their discussion about non-profits. Why are non-profits important? There’s nearly 800 non-profits within the High Desert region, many of those need more moneys than they’ve needed in the past, and we are strong supporters of those organizations and agencies that are trying to help those in need or those agencies attempting to approve our local economy. I’m honored that my friend, Mr. Hasan Ikhrata, Executive Director of the Southern California Association of Governments has contributed an article about SB375 and what affect that it has on business. We’ve always appreciated comments from our First District Supervisor, First District Supervisor, Mr. Brad Mitzelfelt, as well as our favorite water agency, the Mojave Water Agency and its Community Liaison Officer, Mr. Michael Stevens. I recently took an extended tour of Victor Valley College to see its first hand expansion results and wish to thank Mr. Bill Greulich and its Interim President, Dr. Chris O’Hearn for better educating me on the many positive aspects of Victor Valley continued on page 35

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A quarterly economic overview

Is This Why The Study of Economics is Called the ‘Dismal Science’? By Dr. Alfred J. Gobar Chairman, Alfred Gobar Associates

The graph in Exhibit A compares the relative pattern of employment change in Southern California during the recession that began in 1990 with the trend (expressed in terms of indices) of employment for the recession that began

conditions are still a considerable time into the future. Our analyses over the last 40 or 50 years shows a strong correlation between household formation and nonagricultural

employed, commission sales, etc. Data for the second category of employment are generated by household surveys in which respondents are asked to identify the number of employed persons in the household and the number of household residents who are unemployed but who would like to have a job. The household survey is the source of information regarding the overall unemployment level. A large proportion of High Desert residents represent spillover demand from employment centers in the more urban parts of Southern California. For this reason, overall economic trends in Southern California are especially important to the High Desert’s real estate sector.

in 2006/2007. The graph provides some good news and some bad news. The good news is that there was a significant uptick in the trend of employment in May, June, and July of 2010. The bad news is that the employment dislocation is significantly more severe this time that it was in the 1990’s recession, which implies that employment recovery and, therefore, improved housing market

wage and salary employment based on data collected by monthly surveys of employers in all parts of the U.S. Another form of employment data correlates less closely with household formation but continues to be of interest because of changes in the pattern of employment as between establishment employment and “other” employment. “Other” employment includes self-

In the most recent twelve-month period which ended July 2010, employment in Southern California (Ventura, Los Angeles, Orange, San Bernardino, Riverside, and San Diego Counties) based on the establishment survey declined by approximately 43,700 jobs. This is significantly better than the comparable figure a year earlier. Between July 2008 and July 2009, Southern continued on page 3

THE BRADCO HIGH DESERT REPORT Publisher: Mr. Joseph W. Brady, CCIM, SIOR Editors: Ms. April Tyler, Mr. Lowell Draper, and Mr. Seth Neistadt Printed & Designed by One Stop Printers & Direct Mail Service E-Mail Version by Axiom Media Inc. P.O. Box 2710, CA 92393-2710 (760) 951-5111 BSN Ext. 100 l (760) 951-5113 FAX www.TheBradcoCompanies.com l e-mail to: info@TheBradcoCompanies.com Published Quarterly Free E-Mail subscription with online registration Printed Version $59.95 Domestic / $79.95 Foreign per year For a free subscription visit www.thebradcocompanies.com/register Postage paid in Victorville, CA l Send address changes to above. Entire contents copyrighted. All rights reserved. Material may not be reproduced in whole or part without permission from the publisher. Every effort is made to provide reliable information from reputable sources. The publisher assumes no responsibility for inaccurate information. The Bradco High Desert Report is printed on recycled paper.

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A quarterly economic overview

Is This Why The Study of Economics is Called the ‘Dismal Science’? Continued

California’s nonagricultural wage and salary establishment-based employment decreased by 616,600 jobs. Overall, between July 2006 and July 2010, nonagricultural wage and salary employment reported in the establishment survey decreased by 762,800 jobs. The largest decrease in absolute numbers was in Los Angeles County followed by the two-county Inland Empire and Orange County, in that order. In terms of percentage decline from July 2006, the most significant reductions in local employment opportunities were in the Inland Empire—13.98 percent. The second largest percentage decrease in employment was in Orange County at a little over 10.0 percent. There was a similar percentage decline in Ventura County. San Diego County, which entered the recession earlier than the rest of Southern California, experienced a relatively modest decrease in local employment as defined by the establishment survey—a reduction of 6.53 percent. While the establishment-based survey data show an overall decrease between July 2006 and July 2010 of about 765,000 jobs, the comparable figure based on the household survey was a decrease of 588,400 jobs. Measured decrease in employment was more evident in percentage terms and in absolute numbers on the basis of the establishment survey of nonagricultural wage and salary employment than it was in terms of the household survey of the number of employed people. This suggests that many people employed in less formal types of economic activity as well as the self-employed and those people working “off the books” fared relatively better in this recession in percentage terms and in absolute numbers than did people employed in a more traditional

type of business environment. In any case, these declines represent support for 400,000 to 500,000 households (housing consumers). Acknowledging the ambiguity inherent in the household surveys, it is still interesting to note that during this fouryear period ended July 2010, the number of people employed in venues other than the types of establishments surveyed by the Bureau of Labor Statistics actually increased by 174,400 jobs, while the number of people employed in more traditional employer/employee situations decreased by 762,800. Currently, the non-establishment (informal) types of employees represent a larger percentage of total employment than they have at any other time since we began this particular time series in January 1990. Obviously, many people who lose their jobs find other ways to generate income—as consultants, small time vendors, service providers, etc. The informal economy is growing concurrent with a decline in the formal economy. This creates a somewhat atypical economic environment. As noted above, correlations between employment

and household formation are strongest for the definitions of employment based on formal establishment-type employment opportunities. Although the less formal types of employment are in many cases viable, securing home financing, etc., is probably more difficult for this type of employee than for the conventional employee of an established employer. Historically, the housing sector has “led” the U.S. economy out of recession. This long-term historical relationship, however, may not be valid in the current situation. Because of the aggressive prohomeownership, policies of the Bush Administration and strong proponents of homeownership such as Senator Dodd and Representative Barney Frank, in addition to the banking sector’s emphasis on low-income and minority homeownership, the homeownership ratio in the U.S. reached new highs just prior to the onset of the recession. Pentup demand for homeownership that was a source of support for housing markets during previous recoveries may well be substantially smaller this time than has been typical of the economic cycles continued on page 4

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A quarterly economic overview

Is This Why The Study of Economics is Called the ‘Dismal Science’? Continued

since World War II. This suggests that full-on recovery from the recession in terms of its impact on the High Desert’s real estate and housing market may be delayed somewhat more than would be expected on the basis of comparisons between this recession and the one that

began in 1990. As shown in Exhibit B, decrease in building permit activity during this recession has been substantially more dramatic than during the 1990 recession, especially in terms of its impact on the

High Desert’s homebuilding sector. As shown in Exhibit B, building permit activity on the High Desert began to exhibit significant improvement in 2001 and 2002, roughly ten to twelve years after the onset of the 1990 recession, suggesting that if comparable relationships prevail this time around, strong recovery reflected in building permit activity may not be evident until after 2015. This is not a happy thought. On the other hand, throughout Southern California during the first seven months of 2010, more new units were authorized by permit than during the first seven months of 2009, suggesting that a total of perhaps 20,000 new units will be authorized overall in Southern California in 2010. Although this is an improvement over about 16,400 units authorized during 2009, it is well below the levels observed in 2004 and 2005 of over 100,000 units a year authorized throughout Southern California. As shown in Exhibit C, residential building permits authorized on the High Desert for the first seven months of 2010 almost match the full-year figure for 2009, suggesting an overall total for the current year on the order of 500 units. Even though this represents a significant improvement from 2009, it is a far cry from the levels of residential building permit activity shown in Exhibit C for the Years 2004, 2005, and 2006. Exhibit D illustrates the relationship graphically. With the exception of significant industrial development activity authorized by permit in Victorville from 2007 through 2010, virtually no nonresidential activity is reflected in the nonresidential building permit data for the High Desert in recent years. As shown in Exhibit E, however, the very low levels of nonresidential continued on page 5

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A quarterly economic overview

Is This Why The Study of Economics is Called the ‘Dismal Science’? Continued

development in the High Desert constitute a large proportion of the total nonresidential development activity authorized by permit countywide. Actual figures for nonresidential permit activity in the High Desert as compared with the county overall are shown in Exhibit F. Through July 2010, employment decline in Southern California continued to be dramatic in construction and manufacturing. Constructionemployment decreased by nearly 9.0 percent over the twelve months ended July 2010, while manufacturing employment decreased by 2.71 percent over the same interval. Major employment increases over this twelve months are evident in information, educational and health services, and leisure and hospitality. Government employment decreased significantly over the twelve-month interval throughout the Southern California area. The largest decreases in government employment were in local government education and in city government. Federal government jobs continued to grow throughout the Southern California region over the twelve months ended July 2010. The best opportunities in the High Desert’s real estate sector currently appear likely to involve strategic acquisition of existing properties expected to exhibit dramatic improvement when recovery finally gets here. Anecdotes occasionally give us hope…”it could happen.” Several parcels in Victorville with which the author is familiar that were acquired in 1997 at a price of ±$0.65 per square foot sold in 2005 at prices of ±$4.50 per square foot—a nice return for a patient investor—or at least a lucky one.

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A quarterly economic overview

The BIA: Reigniting Recovery for the Epicenter of Affordability By James L. Previti of Frontier Homes President, BIA Baldy View Chapter

During the great building boom earlier in the decade, the four Victor Valley incorporated cities of Victorville, Hesperia, Adelanto and Apple Valley accounted for well over a third of the 45,376 single and multi - family permits issued by the 24 incorporated cities and 59 unincorporated communities of San Bernardino County between 2005 and July of 2010. For the overall High Desert, that figure is considerably higher when factoring the over 6,000 total permits issued by the County of San Bernardino chiefly for High Desert cities is considered. So returning homebuilding and the prosperity it generates to the High Desert to anchor the recovery in San Bernardino County has been a key focus of the Building Industry Association (BIA) Baldy View Chapter as the High Desert will continue to be the epicenter of affordability for Southern California home buyers. “This is once again going to be the most affordable region in Southern California,” said BIA Baldy View Chapter Past President Todd Tatum of the Victorville - based American Housing Group. “When the economy does turn around, home building will come roaring back up here.” According to the most recent data, the prognosis for High Desert recovery is “slightly better than guarded optimism,” added Russ Valone of MarketPointe Realty Advisors. Even now, “The Victor Valley is starting to pick back up and increase its market share again.”

While this year’s building activity countywide was slightly diminished by unexpected rainfall and the expiration of state and federal tax credits that buttressed the 2009 housing market, a panel of home building experts also voiced cautious optimism for the housing market’s recovery at the BIA Baldy View Inland Empire Housing Outlook 2010 Mid – Year Update in Ontario in July. Home builders “are starting to see a glimpse of hope,” said moderator Mark Baud of Real Estate Economics, citing a “glimmer of job gains that we think will continue through 2011”. These gains, he added, should be followed by year - over - year job growth which should begin in the first quarter of 2011 and steadily increase to the point where demand will meet supply by 2015. Baud noted additional positive signs in the regional economy such as reductions in mortgage defaults and reduced inventories of distressed properties by banks, surpluses of which are estimated to be depleted by 2014 in the Inland Empire. Baud added that foreclosures are trending downward and contributing to a housing market recovering in “fits and starts.” Most of the panel agreed that, despite the slow recovery, 2010 has been a good year to date with affordable homes attracting more first time homebuyers and increased traffic in new home communities. While new home designs are trending downwards in terms of size, a healthy market remains for larger, luxury homes in the upper end of the market. Valone said new home sales doubled over last year at this time from 154 new

home sales to 314 in the second half of 2010, because many home buyers responded to the final months of the federal tax credits. Skewing the figures though, is “how prices have moderated. In the first half of 2009, the average was $233,197 for 2,287 square feet. In the first half of 2010, we see that the price has dropped to about $195,000 for about 2,094 square feet” due to home builders creating smaller, more affordable products to meet the demands of emerging demographics and an aging population. “Part of the drop that we saw in the first half of 2010 really occurred in the second quarter with more projects offering smaller square footages. The unit size got smaller and the price went down.” Because the newer Victor Valley projects that are selling are “slowly creeping down” in both physical size and cost, “it seems as if we look at sales by size range, smaller units and more affordable units are really driving the price range.” Another aspect changing the landscape of home building is the dramatic 50 percent drop in inventory levels to less than 2,800 products, he added. The result is that competition increases with builders offering significantly fewer alternatives for home buyers. “Smaller phases, fewer actively selling subdivisions - this is making for a more competitive market place. A year ago there were 65 active subdivisions in the Victor Valley - now, that number has been cut in half,” Valone said. “If we look back a year ago, 23 percent of active developments in the region were continued on page 7

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The BIA: Reigniting Recovery for the Epicenter of Affordability Continued

done by public builders - 15 out of 65 subdivisions. If we come back now and look, it’s eight out of 32 subdivisions. The number of subdivisions provided by public companies has decreased, but the percentage by publics has gone up from 23 to 25 percent. From a statistical standpoint, the drop in projects by publics is less than by private builders.” In 2009, Valone cautioned home builders that price point realignment in closer - in or ‘down the hill’ submarkets such as Rialto/Fontana or Colton/San Bernardino offered more affordably priced products and could act as intercepts to inhibit homebuilding in the High Desert. However, in 2010, some of those submarkets saw a little bit of price point increases - widening the gap and making the commute to Victor Valley more viable. “In a sense,” Valone said, “some of the closer - in submarkets have started reversing the trend - offering bigger units while Victor Valley is starting to offer more affordable products, making the commute worthwhile”. Over the course of the downturn, the BIA Baldy View Region has focused on mitigating many of the causes of the high cost of building that contributed directly to the downturn in the first place - particularly in pursuing the Chapter’s Housing Economic Stimulus Package that involves fee reductions, fee deferrals to the issuance of certificates of occupancy, and options to utilize liens as security for improvements in lieu of construction bonds. The package has received local media support and resulted in reductions and deferrals of fees and streamlining of community

development processes. The chapter continues to coordinate with High Desert cities to implement phase in programs to keep fees at reasonable levels until permit activity increases, successfully coordinated with County of San Bernardino to adjust user fees related to development in conjunction with the County budget pertaining to deposit amounts and costs for staff time. The Chapter also coordinated with the City of Victorville and the County of San Bernardino to create ordinances to replace construction bonds with liens on dormant projects. “Given the reduction in prices over the past few years, realigning city and school district fees based on square footage rather than valuation is another issue homebuilders and local governments must address,” said Todd Leibl of Victory Homes. “The percentage we pay for fees is too high for the homes. If I’m selling a home for $200,000 now, five years ago that home was worth $330,000 and I’m paying the same in fees. The fees haven’t come down and that’s a problem”. “We have to get the cities and the school districts to reevaluate their fee structures with the development community,” added Leibl. “The earlier they come to the table, the faster we can solve the problem of building homes and putting people back to work. It’s all about jobs.” “The silver lining of the housing market’s collapse nationwide may be the impact on the traditional adversarial relationship between the building industry and local governments,” Tatum said.

city and county governments tended to view revenue streams created by homebuilding as budgetary mechanisms. Tatum added, “When homebuilding just stopped, it was hard to convince the cities that if they lower the fees they might get something in return.” However, as the housing market correction lingered, local jurisdictions realized that encouraging home building by reducing and deferring fees and streamlining permitting processes could staunch the hemorrhage of jobs and revenue streams. “That understanding,” Tatum added, “bodes well for homebuilders when a full – fledged recovery begins.” “I think they’re going to stick with us when the time comes.” Tatum cautioned that private independent home builders continue to confront challenges with tighter credit markets. “We’re not building any houses now because the price of land, the cost to build a house and added costs of fees doesn’t add all that together. The retail hasn’t hit a price point yet that allows us to build a house.” “Larger public builders and well capitalized private builders are still building in the High Desert, but in much reduced numbers,” he added. Until the credit market loosens up to enable smaller production firms to secure traditional construction loans, private builders are not going in to cash in on the boom when it starts – the big publics are going to own the market. The banks will not loosen up their lending standards until they’re forced to.

At the beginning of the downturn, continued on page 8

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A quarterly economic overview

Regulatory & Economic Equity for the High Desert

The BIA: Reigniting Recovery for the Epicenter of Affordability Continued

Laying the groundwork for that recovery has also created partnerships with local agencies to ensure key environmental issues are addressed to pave the road to recovery. In August, the BIA partnered with regional elected officials; and representatives from virtually every city and water agency in the county joined together to present the Fourth Annual San Bernardino County Water Conference in Ontario. The BIA and sponsors brought together this diverse array of stakeholders to identify and implement long - range cutting - edge solutions that will ensure a reliable, sustainable long - term water supply to sustain and enhance our region’s quality of life. Describing the event as creating “a growing base of collaboration” to confront issues and create a lasting impact on the region’s growth, General Manager Kirby Brill of the co - sponsoring Mojave Water District summed up the event as an example of the progress we have made. “I don’t think this discussion could have taken place with this level of expertise and engagement four years ago.”

By Eldon Heaston Executive Director, MDAQMD

Just when you think it can’t get any worse in the regulatory world…it does. In the spring 2010 issue of the Bradco Report, I wrote about the impending problems with the implementation of AB32. To make matters worse for the High Desert, USEPA has now started a sanction clock to force the Mojave Desert Air Quality Management District to implement Section 185 - a provision of the Clean Air Act which requires every non-attainment area that has not met the federal ozone standards by its attainment date (2007 in our case) - which imposes penalties of $9,000 per ton of emissions from stationary sources that emit above 80 percent of what they emitted in 2007. This action could spell a death sentence for local cement manufacturing, an industry which has long been a pivotal contributor to the region’s economy as well as a major employer. What’s ironic is that local industrial sources are being penalized for a problem that is caused by neither them nor anyone else within our district. The fact of the matter is that mobile sources in the South Coast Air Basin are largely responsible for our nonattainment status and those sources are not within the control of the local air district. Even more ironic is the fact that the Federal Agency charged with imposing these draconian fees on High Desert

businesses has not done its own job of reducing emissions required under the Clean Air Act for trains, planes, trucks and other mobile sources - the primary causes of the MDAQMD’s nonattainment status. A closure by any one of our large industrial plants would decimate our already fragile economy in the High Desert, which is also plagued by some of the highest rates of unemployment in the country. It is unfortunate that officials with USEPA and CARB don’t recognize these problems and take steps to correct an unjust and ineffective course of action, regardless of it origin. Meanwhile, we at the MDAQMD are scrambling to come up with alternatives to this unfair and largely useless penalty. While I will continue to resist drinking the proverbial “Kool-Aid” of political correctness, the District will continue to work toward regulatory solutions which balance a healthful environment with sustainable economic growth for the benefit of our residents, businesses and the High Desert’s future.

Proud to be a part of the High Desert Community

MITSUBISHI CEMENT CORPORATION 5808 STATE HIGHWAY 18 LUCERNE VALLEY, CA 92356-9691 (760) 248-7373 FAX: (760) 248-9002

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A quarterly economic overview

The Profit of Nonprofit By Vici Nagel, President/CEO High Desert Resource Network

So why an article about nonprofit organizations in a publication designed to examine the economy of our region? Sure they help people, but aren’t nonprofits just small groups of volunteers with little to no money? The answer to that question is a resounding, “NO!” For many reasons nonprofit organizations are a vital component of our community’s infrastructure. The services they provide help ensure that our cities, towns and neighborhoods are good places to live, work, and raise families. Nonprofits work to mitigate a whole host of social woes that drive families and businesses out of communities. They work to combat substance abuse, domestic violence, and gangs. They keep families on their feet in times of need by providing food, clothing, and even shelter. Nonprofits care for the sick and elderly, as well as prepare the next generation of leaders. But more than providing just the social fiber of the community, nonprofits also have a significant economic impact. In my opinion, the term nonprofit should be replaced because it causes all sorts of misconceptions about the sector. It

is a term that comes from the Internal Revenue Service, which basically means that these types of businesses may not distribute their excess revenues over expenses, (their profit) to owners. BUT, it does not mean that they cannot generate a profit. Surprise! In fact, nonprofit organizations generate a great deal of revenues and economic activities that add to local economies. Nonprofits by the numbers� : • Over 1.5 million nonprofits are registered in the United States. • In 2005, the most recent year with complete data, the nonprofit sector overall employed 12.9 million people, or 10 percent of the workforce. • From 1998 to 2005, nonprofit employment overall grew 16.4 percent, compared to 6.2 percent for overall employment in the U.S. • Based on employment, the charitable sector is larger than the construction sector and larger than the finance, insurance and real-estate sectors combined, and it has nearly half as many employees as federal, state and local government combined.

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• In 2009, nonprofits reported almost $2 trillion in total revenue and $4.2 trillion in assets. Nonprofits are often overlooked when considering economic impact in communities because they generally do not pay corporate or property taxes. Important economic benefit, however, is generated by the large portion of employment nonprofits represent. At 10% of the workforce, nonprofit employees contribute significantly to federal, state, and local income taxes; property taxes; and sales tax revenues. In addition, as nonprofits and their employees purchase goods and services they boost local economies. This multiplier effect helps local businesses grow, hire additional employees, and prosper. Plus, nonprofits themselves contribute to sales tax revenues as they expend dollars. Savvy for-profit business owners understand the value of nonprofits as clients and look for ways to connect with them. Nonprofits purchase numerous goods and services, including things such as real estate, rental property, utilities, insurance, office supplies and equipment, financial services and printing to name a few. One way to connect with this market full of potential is through organizations such as mine, High Desert Resource Network. Often called the “charity chamber of commerce,” our monthly meetings are a great place to network and promote your services. If you would like to check us out, I invite you to attend one of our meetings as my guest. High Desert Resource Network meets the first Thursday of the month. Information about times and location can be found on our website (www.hdrnetwork.org). continued on page 12

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A quarterly economic overview

Is the High Desert At a Tipping Point in its Evolution? By Steve Pontell La Jolla Institute The tipping point is the critical point in an evolving situation that leads to a new and irreversible development. Is the High Desert at a tipping point in its evolution? If so which way will it tip? Macro-economic forces are hard at work throughout Southern California buffeted by the winds of government action and inaction. Each part of the region will have a part to play in shaping the future of the region as a whole. The real question for the High Desert is within the range of alternative futures that defines reality Where do you want to be? To answer this question you must first start with honest self assessment. San Bernardino County undertook this first step in the publishing of the Community Indicators Report for 2010. The whole report is available here: (http://www. sbcounty.gov/iUploads/CAO/Feature/ Content/ComIndicatorsReport10Rev. pdf) with a part of it excerpted in this newsletter. The following comments are my opinions based on the information in the report. 1. As the beneficiaries of some of the most beautiful land in all of San Bernardino County and the high quality of life that goes with it, how we steward our remaining land is of increasing importance. For years we have had the attitude that we have lots of land - land is cheap. The truth is 81.5% of San Bernardino County is owned by the Federal Government - most of it in the High Desert. A very small percentage of the total land is developable. We need to pay critical attention to maximizing the use of the land, preserving a way of life,

and creating a future for our children and grand children. 2. People are your most valuable resource. Your economy can be no better than the skills and abilities of your people. Six out of the bottom eight school districts in the county are in the High Desert - this is not acceptable. The net effect over the long haul is limited economic development and limited opportunities for these children. 3. 20 years after the close of George AFB and millions of dollars spent, the region must ask itself if that most important of assets has been managed to the best of its potential. It and your connectivity to the rest of Southern California are critical factors in your economic opportunities. 4. Federal lands and the relationship with the Federal Government should be strategic and intentional. From the military to the forest federal decisions significantly affect the High Desert’s future. Southern California will recover; some parts will do better than others. What part the High Desert plays in the regional economy will be determined by the quality of the place you are and the abilities of the people you are. Both of these are aspects of your future that you can affect. At the tipping point? Which way will you go?

Economic and Business Climate By Steve Pontell La Jolla Institute

Long-term employment trends show growth of 40% between 2000 and 2008 in two of the county’s largest industries: Professional Services and Logistics. However, recent employment figures show a decline across all key industries. San Bernardino County has the most affordable housing in Southern California. The county continues to build more homes, with the result that there are nearly two housing units for every job created in the county. As the importance of technological know-how increases, so does the county’s student access to computers and classrooms with Internet access. County Poised for Further Growth and Change Description of Indicator San Bernardino County experienced explosive residential and commercial growth over the past two decades. The county’s unique geographic, environmental and economic characteristics allowed it to evolve into a dynamic region that is both independent of and integral to the Southern California region as a whole. This indicator examines components of the county’s transformation such as employment changes, housing trends, expanding opportunities, and human and societal impacts of this growth. Why is it Important? Understanding how San Bernardino County has changed from 1990 to 2010 allows residents, businesses and policymakers to be better informed about the characteristics that define San Bernardino County today – instead of what they imagine it to be, based on perceptions established in the past. San Bernardino County has emerged as an economic powerhouse as the Southland’s air travel and logistics hub, a recreational destination for tourists from across the state, and the booming, then busting, epicenter of the California residential real estate market. continued on page 24

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SB 375-Government Intervention or Market Trend? By Hasan Ikhrata Executive Director of SCAG

SB 375 is a complex and sometimes controversial new planning law that, at its core, is about changing the growth and development template that California has been accustomed to since World War II. In trying to understand the ramifications of SB 375, one central question is whether it attempts to force a pattern of urban development that would not emerge on its own. Alternatively, it could be that SB 375 attempts to recognize that change is already occurring and capture the momentum of emerging trends in demographics, housing demand, and the larger economy. Before we examine the merits of either view, let’s take a look at what SB 375 actually requires, and why it’s been the subject of so much discussion and debate since it was passed in 2008. SB 375 creates a new set of requirements for regional Metropolitan Planning Organizations (MPOs) in California when they produce a Regional Transportation Plan (RTP). The RTP is a plan required under federal law that lays out a long term strategy for meeting transportation needs. The RTP is also a pre-condition for accessing federal money for transportation projects. Regional MPOs, like SCAG, have been preparing and adopting these plans since the 1970s. SB 375 introduces a state-required component of the RTP called a Sustainable Communities Strategy (SCS). SB 375 also gives the state the ability to set targets for greenhouse gas emission reductions for the RTP. The SCS, in turn, is intended to lay out a strategy combining transportation investment with land use in order to cut down on vehicle usage and reduce

emissions. In theory, the regional MPO works with its member local cities and counties, and with the transportation agencies at the county level, to agree on strategies, including transit expansion, targeted in-fill development, and neighborhood design to encourage walking. Those strategies are then packaged into the SCS and used to demonstrate meeting the GHG target. This is, without a doubt, a challenging job that the State has given to the regional MPOs and our partners. In particular, the challenge could be pronounced, depending on what target the State sets for emission reductions. Regardless of the target, though, SB 375 walks right into a traditional sore spot between the state and local government over land use authority, and imposes new objectives for regional planning that may or may not be embraced at all levels of government. On paper, a regional planning agency like SCAG could easily design a land use and transportation scenario that, when fed into a transportation model, produces dramatic emission reductions, and meets any target. We could do this by identifying opportunity areas for infill and transit oriented development projects, and by dreaming up new transportation systems to move people around the region in the future. The challenge, of course, is that the RTP and the SCS need to be more than a paper exercise. The strategies contained in the plan need to be backed by real commitments and real money, and they need, as near as possible, to reflect a consensus view of the region’s future vision for itself. The good news is that the Southern California region, for a variety of reasons, is on the right track.

MARKET DEMAND AND SUPPLY RESPONSE 20 years ago, it would be almost impossible to imagine what has now happened in places around the region like in Pasadena, Brea, Ventura and countless other cities in the region. Even setting aside urban centers like downtown Los Angeles, communities across the southland are seeing a resurgence in demand for attached housing, and walkable mixed use communities with access to transit. This is not just a matter of niche projects pushed by planners and a handful of urbanites. On the contrary, all the evidence shows that projects in urban or suburban downtowns, and closer in to employment centers, have fared better in the current recession than the traditional suburban large lot home on a ½ acre lot. Partially, this is just the result of new lifestyle preference, but actually there is more at work. CHANGING DEMOGRAPICS The California suburbs were built for a different type of population than is now predominant in the region. In 1960, nearly half of all households had children in the home. Now that number is less than 1/3, and by 2040 that number will be just over 1/4. The neighborhood and lifestyle demands of households with kids simply will not predominate in the housing market in the future. In their place, we will have an increasing share of retirees and singles, whose demands will have less to do with a backyard and more to do with neighborhood amenities (think coffee shops, small groceries, and pocket parks). To take it a step further, as our region copes with an increasing demand for services for a retiree population, we will need to compete with other regions to attract young adults to work here, again with similar effects related to neighborhood continued on page 12

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SB 375-Government Intervention or Market Trend? Continued

and housing demand. ENERGY SUPPLY AND PRICE The other big piece of our future puzzle is natural resources, and most importantly energy. In Southern California we all observed the dramatic impact of high gas prices during the summer of 2008. Many more people than typical rode transit or carpooled, while we waited for gas prices to return to a level that we are accustomed to. In some ways, this shock to people’s transportation habits was a precursor to the housing crisis that followed. The less expensive house, with the longer commute, wasn’t as affordable, once you figure in $4 to $5 per gallon gas. The question we have

to ask ourselves as we envision and plan for the future is, do we expect cheap and readily available energy supplies to continue for personal transportation? Most experts tell us that that scenario is unlikely. So when we think about the forces that will shape the future of our region, we start to see the Sustainable Communities Strategy as a process and a tool that will help us to cope, and hopefully to succeed, in facing a changing landscape. More than that, we think the SCS can only be successful if it recognize and responds to what is happening in demographics and economics – which always play a greater role in affecting

growth and development than anything that government does. In planning, our job is to understand what issues and challenges our future holds, to lay out options for how to face those challenges and to try to help create decisions and policies that improve the quality of life for our communities. SB 375 asks us to take on some very big issues and challenges, and as such, it can tend to take us out of our normal way of seeing things. Given the amount of change that this region will experience, though, we think it’s better to plan for it than to not plan for it.

The Profit of Nonprofit Continued

Another economic benefit nonprofits provide to local economies lies in their attracting government dollars. In 2005, $351 billion worth of government grants and payments benefited communities through nonprofit organizations. A misnomer about nonprofits is that they rely on charity, or begging for

Source: Urban Institute, Nat’l Center for Charitable Statistics, Nonprofit Almanac 2008

donations. In fact, today’s nonprofit organizations are professionally run “businesses” that in general generate 50% of their revenues from payments for services. The diagram below shows the overall revenue mix of the nonprofit sector. An added way nonprofits contribute to the economy is by helping businesses improve their bottom lines by making communities nicer places to live and work. Quality of life is enhanced through rich offerings of arts and culture, quality health care, a variety of recreation and leisure options, good schools and child care, a clean environment and humane and effective responses to those in need. Nonprofits nurture and develop a sense of belonging to a community, which is critical for growth and businesses attracting and retaining a dedicated workforce.

Occasionally I still run across folks (although well-meaning and good) that think nonprofits are generally an economic drain on the community. I hope in this article I have dispelled that notion and helped readers understand, and appreciate, the significant impact our nonprofit organizations have in our country and local communities. In the next issue we’ll examine the specifics of our region’s nonprofits. In the meantime, please don’t hesitate to contact me if you have questions about nonprofits and our local social service sector. Vici Nagel is a 30-year nonprofit professional and President/CEO of High Desert Resource Network, a nonprofit organization dedicated to supporting and strengthening the local social service sector. Further information may be found at www.hdrnetwork.org.

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County of San Bernardino Planning for the Future By Brad Mitzelfelt First District Supervisor, San Bernardino County

It is tough to move forward unless you have a clear vision of where you are going. During the next few months, everyone who has a stake in our county’s future will come together to create a common vision that will guide our leaders in building a better future. Participants will include San Bernardino County residents, leaders from the 24 cities, the business community, school districts, non-profit groups, and others. The San Bernardino County Board of Supervisors will organize and lead the effort to create this vision through a series of town hall meetings for residents, round-table discussions involving business leaders, and forums for other stakeholders. “It’s impossible to achieve anything meaningful or even take a step forward unless we know where we are going,” said County Administrative Officer Greg Devereaux, who has been charged by the Board of Supervisors with gathering input from the county’s various communities and crafting a proposed vision. “The vision we create for our county will be the measuring stick we will use to decide how to focus all future efforts.” The county will use data from the recently completed Community Indicators Report to guide all of the county’s communities and stakeholders toward creating a vision. The report takes a close look at where our community stands in terms of the economy, jobs, education, health care, public safety, and the amenities available to our residents. The vision we create will be an important part of county government’s effort to create, maintain, and grow the economic value of the region. The County of San Bernardino Economic Development Agency plays a critical

role in implementing that directive. The agency provides many vital resources for businesses looking to grow, residents seeking jobs and housing, and investors and developers seeking opportunity and certainty. Business attraction is key to our success. San Bernardino County is an attractive location. There are measureable benefits for businesses and residents choosing to locate here in terms of workforce, infrastructure, and location advantages. The region’s diversity and amenities benefit many business sectors, and remain attractive to a wide range of employers. Two of the leading industries in the county are logistics and manufacturing because we have one of the best transportation networks in the world. We are literally at the crossroads of national and international trade. Dr Pepper Snapple Group, one of the largest beverage companies in the nation, understood the location advantages of San Bernardino County when it built its new 850,000-square-foot facility in Victorville. Operations started in March 2010. According to Dr Pepper Snapple, the plant was intended primarily to fill a void in its distribution network, allowing the company to distribute products from a regional hub that the company once had to ship cross-country from facilities on the East Coast. Its customers in the region now have much quicker access to Dr Pepper Snapple’s non-carbonated juices, enabling the company to better meet its demands.

operations. These firms benefit from the county’s proximity to the Los Angeles/ Long Beach seaports, three large airports, a major highway system, and links to the Union Pacific and BNSF railway corridors. That’s why the county has long been known as Corporate America’s Global Gateway. Aviation as a component of logistics is one of the industries that will create good jobs in our region. A program at Southern California Logistics Airport, which was started with support from my office, is already having success in training aircraft mechanics, who are in great demand and can earn up to six figures. A highly trained workforce makes the region even more desirable to business owners. Now is the time to capitalize on this region’s strengths and encourage corporate decision makers from retail to medical to logistics and manufacturing to seek out the benefits from the county’s workforce and marketplace access. Beyond its transportation and location advantages, businesses benefit from the county’s 900,000-strong workforce and access to a lucrative Southern California consumer population. And our quality of life is second to none, especially in the High Desert, with access to beautiful scenery, clean air, high mountains and a variety of recreational and cultural activities within easy driving distance.

This was the only major factory built in California last year.

The challenge right now is getting that positive message out to business decisionmakers at a time when the region’s location, cost, and workforce advantages can make a real difference in the bottom line costs of doing business.

Dr Pepper Snapple underscores the strength of this region in logistics. It is the location of choice for major industrial users’ regional and headquarters

There is a solid platform for investment here and an inviting business environment in the County of San Bernardino. It’s time for business to seize the advantage.

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Taking Steps to Ensure There’s Water for Now-and the Future By Michael Stevens, Community Liaison Officer Mojave Water Agency

Gloves, check; scarves, check; beanies, check; umbrellas, check…but wait, who wants to think about winter and the cold temperatures and shorter days? Some people do. Mojave Water Agency (MWA) thinks about winter for reasons other than comfort. It’s the time when our water table is replenished with natural supplies—and the more precipitation we receive through natural sources (rain, snow melt from the local mountains) the less we have to import what’s becoming scarce and expensive: supplemental water. Winter of 2009-2010 was a good water year for California—with most reservoirs around the state filling to normal levels. This past winter was also good for Mojave Water Agency because what started as a dismal water year—all State Water Contractors like MWA being told by Department of Water Resources in December to expect only five-percent (for MWA 4,140 acrefeet) of contracted water deliveries (for MWA 82,800 acre-feet)—this figure was eventually increased in August to allow for deliveries of 50% (for MWA 41,400 acre-feet).And MWA is purchasing every drop to help boost groundwater supplies for future needs. Last issue I wrote about how “Water Drives Our Economy” and how without water, development, and the jobs it brings, comes to a screeching halt. As Mojave Water Agency celebrates its 50th Anniversary in 2010 (July 21 to be exact), the agency recognizes the key role that water plays for our quality of life and is meeting its obligation to reliably deliver safe, clean, affordable water. However, the ability to purchase over 41,000 acre-feet (af) of water this year

to support our local economy and quality of life didn’t just happen because we had a good winter. Always with an “eye towards the future”, the agency had to plan, position and be poised to execute when opportunities arose to purchase water or rights to water. More later on the opportunities that came along and how the agency took advantage. As of September 9, 2010, 11,541 acre-feet has been delivered this year through recharge sites throughout the agency’s service area, and at one site in particular—Rock Springs—deliveries will continue until the end of the year in order to take all the water that’s available to MWA. The four other sites have already reached their maximum allotment. According to MWA Board President Mike Page, “being able to store or bank water is like having a savings account so that during periods when water is less available through the State Water Project, we’ll have a source of supply to plan for dry spells or increased demands.” “The decision to buy water now is an example of our board showing foresight and helps us to reduce our future reliance on what could be an undependable source,” Page added. The agency made two key decisions in recent years, without which 16,000 of the 41,000 acre-feet would not have been available for purchase. In 1997 MWA’s contracted amount of State Water Project water (referred to as the Table A amount) was 50,800 acre-feet (af). That amount changed to 75,800 in 1998 when the agency purchased the rights to 25,000 additional acre-feet of Table A amount from the BerrendaMesa Water District.

Our share of the supply increased again with the purchase in 2009 of 14,000 af from the Dudley Ridge Water District, which included 7,000 acre-feet effective in 2010 and an additional 7,000 acrefeet in effect by 2020.By combining the Berrenda-Mesa and Dudley Ridge purchases, this increased MWA’s Table A amount to 82,800af in 2010. What this means is that when the Department of Water Resources in August increased the amount to 50% that State Water Contractors(29 state wide including MWA) could receive of its contracted amount. For MWA that meant 50% of 82,800af, not 50% of 50,800af. Some have criticized the water rights purchases only as “paper water,” a phantom allocation from a portion of the State Water Project that will never be delivered. But 2010 has proven that the water rights purchases are truly more than just paper water. And, the value of the water rights purchases—and the subsequent deliveries in 2010—are proving once again to have been a wise, strategic move. As the next winter rainfall season approaches, water experts are closely watching the emergence of La Niña— where Pacific Ocean water temperatures have been steadily cooling, which increases the chances of a dry year ahead for much of California. “For Central and Southern California, it looks like a drier-than-normal winter, and it may be for Northern California also, but there’s still a lot of uncertainty,” said Jon Gottschalck, head of forecast operations at NOAA’s Climate Prediction Center in Washington, D.C. Scientists say they will know more in the months ahead as California’s continued on page 15

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Victor Valley College Continues to Expand By Bill Greulich

In spite of the current economic downturn, Victor Valley College continues to move forward at a measured pace with its plan for expansion. Some bond funded capital projects have progressed beyond the planning stage as evidenced by the start of construction on the new Eastside Public Safety Training Center and infrastructure upgrades to the main campus. Construction began Thursday [August 12] on Victor Valley College’s Eastside Public Safety Training Center, the first major project to advance as part of a voter approved $298 million bond measure. The $32 million center will train VVC students for firefighting, paramedic, police and corrections careers, and also be available for public safety agencies across Southern California. “We needed a facility that would demonstrate our commitment to these four areas and would also be a training facility not only for the High Desert but for the entire region,” VVC Interim President Christopher O’Hearn said. When it’s completed in December 2011, the facility will feature new technologies and training equipment, including a 5-story-tall fire tower to simulate the feel of being trapped in a burning building, and a 9-lane indoor shooting range with virtual and live-fire training simulators. The facility is located on a 9-acre site on the southwest corner of Johnson and Navajo roads in Apple Valley, north of the Apple Valley Airport and next to the Wal-Mart distribution center. Highland Partnership and CarrierJohnson Architects are designing and

building the 41,500-square-foot center, which will include 15 classrooms with 368 seats, parking for 225 vehicles, several buildings for administration, storage and laundry, and an outdoor space with training equipment. Highland Partnership has committed to staffing more than 80 percent of its construction labor force with High Desert workers. The project is also designed to meet LEED Gold certification rating by the U.S. Green Building Council, VVC officials said. A 200-kilowatt solar system will power 50 percent of the facility, and buildings will include high efficiency plumbing and mechanical and water conserving fixtures. Its structural steel will be 95 percent recycled, and builders are using regional and low carbon-emitting materials.

Taking Steps to Ensure There’s Water for Nowand the Future Continued

traditional rainy months of December through February near. “To reiterate, the decision to purchase all the water available to us this year is an example of our board showing foresight and helps us to reduce our future reliance on what we are discovering is an undependable source,” Page added. In a nutshell—Taking Steps to Ensure There’s Water for Now—and the Future. For more information about Mojave Water Agency, visit our website: www. mojavewater.org or Facebook page: http:///facebook.com/mojavewater.org, or to speak to someone call: 1-800-2544242

Sixty-two percent of voters approved the $298 million Measure JJ in 2008. Measure JJ will cost taxpayers $20 a year per $100,000 of assessed property value over an estimated 30 to 35 years. The college has already spent about $136 million in bond funds, including purchasing land for a future work force education center in Hesperia, setting aside funds for campus beautification and infrastructure improvements (Including parking lot repair), and paying off $53 million in past debt. In other news, a one-stop center designed to consolidate a variety of student services such as financial aid, admissions, counseling, and more is currently under review.

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High Desert Schools Make Progress On State Tests 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 secondgraders 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. continued on page 17

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High Desert Schools Make Progress On State Tests Continued

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 fivepoint 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). continued on page 18

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VVWRA Named One of California’s Best Wastewater Treatment Plants 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.

High Desert Schools Make Progress On State Tests Continued

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.

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A quarterly economic overview

Inland Empire Economic Partnership 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.

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.

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.

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A quarterly economic overview

VVTA Begins Construction on Administration, Maintenance, and Fueling Facility 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.

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.

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.

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.

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

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 continued on page 21

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A quarterly economic overview

VVTA Begins Construction on Administration, Maintenance and Fueling Facility Continued

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.

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.

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

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22

A quarterly economic overview

Understanding the Absorption Rate 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-absorptionrate-is-figured.

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High Desert Report A quarterly economic overview

High Desert Employment Information By Kristine Nix Workforce Service Branch

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High Desert Report

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A quarterly economic overview

Economic and Business Climate Continued

How is San Bernardino County Doing? Economy in Transition Twenty years ago, the leading industries in the county were steel, agriculture and defense. The closures of George Air Force Base (in Victorville) in 1992 and Norton Air Force Base (in the City of San Bernardino) in 1994 resulted in the loss of approximately 3,000 jobs. Since that time, the region has gone through one metamorphosis and is on the cusp of a second. The first transition was from an economy based in military services, agriculture, and steel, to one where construction, logistics, and business and professional services are the dominant industries. The next transformation may emerge out of a combination of up-and-coming markets, demographic shifts, continuing growth in logistics, and San Bernardino’s unique set of assets including days of sun, established energy infrastructure, large areas of undeveloped land, and proximity to population centers and recreational resources. The first transition witnessed employment growth of 62% between 1990 and 2007. According to the California Employment Development Department, the number of jobs in the county increased from 408,500 in 1990 to 663,600 jobs as of 2007. In 1990, the

largest industry clusters were Retail Trade, Healthcare, Tourism (Leisure and Hospitality) and Durable Goods Manufacturing. Today, while the largest employment clusters are the same, the proportions are different with 300% growth in Administrative Support (which is a part of Business and Professional Services), 180% growth in Logistics, and 180% growth in Wholesale Trade. In the last 10 years, the changing nature of the San Bernardino County economy has become even more pronounced with significant growth in the Retail Trade and Local Government sectors while Durable Goods Manufacturing has declined. The second transition may be fueled by San Bernardino County’s unique position for growth in certain industries not yet reflected in employment statistics. For example, the High Desert area of San Bernardino County is one of the best places in the world for solar energy development because of its high altitude, the number of sunny days each year, and existing power infrastructure. Additionally, proximity to the Colorado River, Nevada and Arizona may result in increasing opportunities for new housing and tourism that are currently underutilized.

Southern California continued to grow over the past two decades, the number of housing units built in Los Angeles and Orange Counties did not keep pace. The relatively lower cost of existing housing in the Inland Empire drew buyers from all over Southern California. In San Bernardino County, housing demand increased in response to both the lower priced housing and as a result of economic growth, and builders built new housing tracts to meet the increased demand. Cities and builders alike preferred to build lower density units (greater sales prices and income to local jurisdictions), and to a great extent larger, single family units were built instead of smaller, more affordable units.

Supplying Affordable Housing for the Region As the population and employment base of

Between 2000 and 2006, single family residences accounted for over 85% of all housing built, compared to the historical average of 70%. In the midst of this housing boom, it appeared that San Bernardino County had become the host of the American dream – one of the last places for middle class Southern California residents to be able to afford a home. continued on page 25 The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


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A quarterly economic overview

Economic and Business Climate Continued

Between 2000 and 2008, nearly 100,000 residential permits were granted by local officials throughout the county with the peak of over 18,000 permits in 2004. The cities granting the most permits were Rancho Cucamonga, Chino Hills and Fontana which had higher numbers of permits earlier in the decade while Apple Valley, Chino, Hesperia, and Victorville granted more permits later. Strong demand in the early 2000s led to rising prices, which prompted many first time homebuyers who were afraid of “missing the boat” to purchase. Speculators and investors also played a role in driving up housing prices, which increased from $134,000 for a median priced single family home in 1991 to $389,000 in the fourth quarter of 2005. Since then prices have dropped back to 2000 levels, with the median single family home priced at $163,000 in 2009. Paradoxically, due to the low housing prices, for those who could afford a down payment and have sufficient income and credit, owning a home today may be less expensive than renting a home (see Housing Affordability and Rental Affordability). Human and Societal Impacts of Growth and Contraction In the meantime, new and old residents of San Bernardino County are bearing the impacts of regional economic contraction. When residents of San Bernardino County who commuted to work in Los Angeles, Riverside, or Orange Counties lose their jobs, they apply for and utilize San Bernardino County government services. According to the 2008 Inland Empire Annual Survey, a majority of residents who live in East Valley, Victor Valley and Desert areas also work in San Bernardino County. However, about 10% of East Valley and Desert region residents work in Riverside County. Over 30% of West Valley residents work in Los Angeles County, and about 6% work in Orange County. The economic downturn is reflected in the number of residents living in poverty and the fact that most major public assistance programs in San Bernardino County

experienced increases in enrollment (see Family Income Security): • At 14.6%, San Bernardino County has the third highest proportion of residents living in poverty compared to peers. This rate is higher than the state and national averages for 2008. • San Bernardino County has the highest Food Stamps “Program Access Index” scores among peers, with 56% of Food Stamps eligible residents actually participating in the program. • The number of people receiving Food Stamps rose 27% in a single year, while CalWORKs cash assistance enrollment rose 18% in 2008/09. • Medi-Cal participation also increased, rising 10%. • A higher proportion of San Bernardino County residents have public assistance income (4.0% of all residents) than the state (3.1%), nation (2.3%), and all our peers (ranging from a high of 3.3% in Los Angeles County to a low of 1.2% in the Dallas metro area).

Expanding Opportunities As businesses expanded in the Inland Empire in anticipation of more customers taking up residence, a reinforcing cycle was created wherein business growth fueled population growth resulting in greater home construction and further economic growth. continued on page 26

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A quarterly economic overview

Economic and Business Climate Continued

region. But its future economy will be shaped by a number of critical assets including military facilities and federal lands.

The Inland Empire’s location between the Ports of Los Angeles and Long Beach and the rest of the country as well as the location on the edge of the massive markets of Los Angeles County and Orange County primed the growth of the logistics industry which grew from 32,000 jobs to over 80,000 jobs between 1991 and 2008. With the completion of the Alameda Corridor and the emergence of the Ports of Los Angeles and Long Beach as the largest ports in the U.S., shipping trans-Pacific goods from the booming Asian economies, San Bernardino County has evolved as the logistics and distribution hub for the 20 million resident Southern California market and into the rest of the nation. As the international economy recovers amidst tightening land availability for warehousing and transit, San Bernardino County is better positioned than other areas in the region to harness the opportunity to become an even more important logistics hub. Interestingly, the closure of the George and Norton Air Force bases laid the ground work for the most extensive airport infrastructure in Southern California, thus promising an important role for the logistics industry in San Bernardino County as well as further opportunities in tourism.

foot terminal and the passenger count climbed to 7.2 million passengers in 2005 before declining to 4.9 million in 2009. Freight tonnage at Ontario International Airport has declined recently to approximately 400,000 tons in 2009, still higher than the 300,000 tons of freight transported in 1992. The two military bases have been redeveloped as the Southern California Logistics Airport and San Bernardino International airport. These airports provide access to freight, airplane maintenance services, and commercial and general aviation use. The Future What might the future hold for San Bernardino County? As high housing costs elsewhere in southern California prompt younger and moderate income residents to search for a home in the Inland Empire, and large facilities such as warehouses and airports need more available land, San Bernardino County will continue to play a prominent role in the larger

Overall, the role of the federal government cannot be understated, given that the federal government owns 81.4% of the land of San Bernardino County and the State of California owns another 2.1% of the land. While national parks and military facilities add to the tourism and services components of the economy, these outside institutions also wield substantial influence over the future of the county given the sheer amount of land outside of the control of local officials and residents. Military Facilities The military is once again growing both in terms of jobs and purchasing power. Fort Irwin has increased to a daily population of over 22,000 personnel and Twentynine Palms Marine Base has almost 8,000 personnel. These military facilities have a rotating continued on page 27

In 1992, Ontario Airport served 6.1 million passengers annually and George Air Force Base in Victorville and Norton Air Force Base in San Bernardino were military installations. In 1998, Ontario International Airport relocated to a new 265,000 square The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


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A quarterly economic overview

Economic and Business Climate Continued

population of individuals who both add to the economy through residence, purchases and tax contributions, but also subtract from the greater benefit of the local area with so much land off¬limits to local control, wear-and-tear on government infrastructure and increased use of local government services. Capital projects at these locations also impact the local and regional economy. Fort Irwin has plans to construct a Wind Turbine Energy Project on site, and Twentynine Palms is in the process of developing a large scale training center that requires more training land and airspace than is now available anywhere in the United States. A Center for Naval Analyses study shows that Twenty-nine Palms is the only location with sufficient land and airspace potential to meet the training requirements. Bureau of Land Management Renewable Energy Projects The Bureau of Land Management plays a large role in establishing land use patterns for ranching, mining, renewable energy and recreation. Notably and recently, the Bureau of Land Management (BLM) is gearing up to take advantage of incentive funding under the American Recovery and Reinvestment Act, by committing to full environmental analysis and public review for 31 renewable energy projects planned on BLM lands. According to BLM Director Bob Abbey, these projects are “the first generation of large scale renewable energy projects to be carefully sited on public lands over the next several years.” The initial project list includes 14 solar, seven wind, three geothermal, and seven transmission projects. Of these, three of the solar energy projects and two of the wind energy projects are located on BLM land in San Bernardino County.

National Recreational Facilities The national forests and parks that lie within the county provide recreational and open space amenities as well as educational and volunteer opportunities for San Bernardino County residents. Further, visitors to the San Bernardino National Forest, Joshua Tree National Park, and Mojave National Preserve generate significant revenue for the local economy (www.nps.gov and www.fs.fed. us/). Established in 1907, the San Bernardino National Forest was set aside as public land for the conservation of natural resources. Spanning 676,666 acres in San Bernardino and Riverside Counties, the San Bernardino National Forest provides Southern California residents and visitors with year-round outdoor recreation opportunities and facilities, as well as providing valuable watershed protection. The forest administration has several departments including Fire, Police, Planning and Permits, Recreation, and Roads, along with three Ranger Districts, and a scientific arm that deals with issues relating to cultural, water, soil, wildlife, plants and trees. Joshua Tree National Park is 792,623 acres, 591,624 acres of which are designated as “wilderness.” In 2008, the base funding for Joshua Tree National Park was $5,035,900, and the park welcomed 1,397,554 visitors, a 7.2% increase in visitation from 2007. At 1.6 million acres, Mojave National Preserve is the third largest National Park Service area outside of Alaska. In FY 2007 Mojave National Preserve had 541,000 visitors. The number of visitors to Mojave National Preserve has increased 42 percent over the past decade, with sharp increases from 1998 to 2003 followed by a leveling off in the following five years. While overall visitation has been flat recently, the population in surrounding counties is expected to double by 2030 and preserve staff is predicting an increase in visitation in the long term. The preserve’s funding from all sources grew from $1.3 million in 1996 to $5.9 million in 2007.

In 2006, the National Park Service conducted a study of how visitor spending impacts the community around the park. This report estimated that the 537,000 visitors to Mojave National Preserve spent $6.9 million in local businesses with non-local visitors accounting for over 90 percent of this total. Spending by non-locals supported an estimated 127 jobs, added $2.5 million to the incomes of local employees, and provided an additional $1.4 million in profits and sales taxes to the local economy. Additionally, preserve operations had a positive impact on the local economy. Mojave National Preserve employed 64 people on a full-time, part-time, or seasonal basis in 2006, totaling $3 million in salary. In addition, the preserve approached local businesses for contracting and purchases. As local consumers, the employees of Mojave National Preserve also spend part of their paychecks at local businesses. These direct and secondary effects of preserve operations accounted for 92 local jobs, $4.7 million in payroll, and $660,000 in additional benefits to the local economy. Conclusion San Bernardino County’s unique geographic, environmental, and economic characteristics offer significant benefits to residents, employers, and visitors alike. The county’s economy has shifted from agriculture, military, and mining to construction, logistics, and business and professional services. The county has weathered the construction boom and bust, and closures of prominent military bases. While there are human and social costs with the recent economic downturn, military facilities are once again growing and affordable housing is likely to remain a stronghold for San Bernardino County. The county is also well positioned for expansive growth in the logistics industry and renewable energy, but the significant influence of federal government as the primary land owner in the county remains an ongoing challenge.

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Adelanto City Update

By Mike Borja, Management Analyst City of Adelanto 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.

On The Verge of Tremendous Growth 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

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.

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A quarterly economic overview

Town of Apple Valley City Update 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 industrialdesignated 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 offsite 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.

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A quarterly economic overview

Barstow City Update

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 soughtafter 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. continued on page 33

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A quarterly economic overview

Hesperia City Update By Lisa K. LaMere Economic Development Analyst

Hesperia, CA Emerging Logistics/ Distribution Growth Center

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.

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 railaccessible land. On the <Rail> Road to Success

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.”

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, continued on page 32

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

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A quarterly economic overview

Hesperia City Update Continued

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.

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.

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,

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 200,000plus square feet of quality retail uses. continued on page 33

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A quarterly economic overview

Hesperia City Update Continued

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 fullservice 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.

Barstow City Update Continued

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.

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.

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

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A quarterly economic overview

Victorville City Update

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, livingwage 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 continued on page 35

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A quarterly economic overview

Victorville City Update Continued

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.

Publishers Message Continued

Community College and what impact did it have towards job creation and training within the High Desert region. We have now asked that Dr. Gary Thomas, San Bernardino County Superintendent of Schools, report to us on a regular basis about progress being made within the county school districts and the High Desert region. We also wish to welcome Mr. George Passentino, Managing Partner of Passentino Andersen Communications, and its recent update on the Victor Valley Waste Water Reclamation Authority (VVWRA), as well as welcoming Mr. Paul Granillo, President and CEO of the Inland Empire Economic Partnership (IEEP). Congratulations are in order to Mr. Kevin

Kane and the Victor Valley Transportation Authority for its ongoing expansion and current construction projects. A new article supplier and a gentleman that we hold in high acclaim, Mr. Bob Thompson of Advanced Listing Services gives our readers a better “understanding of the absorption rate” and the sale of single family homes throughout the High Desert region. Bob is one of the brightest people that we deal with, when it comes to truly understanding “absorption.”

We sincerely hope you enjoy reading this publication, which began in May of 1993. We appreciate any and all comments. Please forward your comments to info@ thebradcocompanies.com or call us at (760) 951-5111 x100. Again, thank you for taking the time to read this publication that we would not be able to publish without the commitment of all of our sponsors.

We again, thank the Town of Apple Valley, the City of Hesperia, the City of Victorville for their submittals and look forward to supplying information on the City of Barstow’s Economic Development updates in the 48th edition of the Bradco High Desert Report.

Joseph W. Brady, CCIM, SIOR Publisher The Bradco High Desert Report President The Bradco Companies jbrady@thebradcocompanies.com

Thank you

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47th Edition of the Bradco High Desert Report  

Inside This Issue As always, we wish to thank all of our committed article suppliers and our newsletter sponsors for their continued commitm...

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