Issuu on Google+

Spring 2011 l Volume 48

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

Inside This Issue Basis for Some Optimism?................. 2 Barstow Community Hospital Construction............................... 6 The Lewis Center a Strong Educational Foundation............. 7 Air District Offers Emmission Reduction Grants....................... 8 Victor Valley Housing and BIA Efforts Hold Keys to Recovery.... 9 Preparing for the Next Drought...... 10 The High Desert Corridor............... 11 County of San Bernardino Schools Preparing Students................... 14 Victor Valley College’s Public Safety Training Center............. 17 High Desert Transportation............. 18 The Difference a Year Makes........... 21 San Bernardino State of the County...................................... 22 Applying Lessons Learned from Our Past.................................... 23 Taking the Waste out of Wastewater............................... 24 City Update Adelanto................................... 25 Town of Apple Valley . ............ 26 Barstow..................................... 27 Hesperia.................................... 28 Victorville................................. 31

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

complete the short registration process to receive “for free” any information that we put out on issues that affect the High Desert economy, or anything that we put out that we believe needs to be communicated to those people that have an interest within the High Desert region.

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 evidenced by our continued attempt to monitor the High Desert region and to make information available to those that have an inherent interest within the High Desert region.

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

Our firm has noticed a definite increase in commercial, retail, and industrial leasing, as well as the sale of some industrial properties throughout the area. We continually caution our sellers and lessors to price their properties appropriately as the market changes, based on rents, CAP rates, comparable sales, etc. Effective with the 45th edition, the Bradco High Desert Report has now been made available electronically. Over 1,750 people have now signed up to receive this publication or any other information that we put out from time to time for free, relative to retail, commercial, industrial vacancies, occupancies, comparable sales, etc. If this is your first time reading this publication, please visit www. thebradcocompanies.com/register and

We’re pleased to welcome Mr. Michael Stewart’s article representing Barstow Community Hospital. We wish Michael Stewart the very best in his recent promotion that’s taken place since the submission of his article. Mr. Rick Piercy, CEO and President of the Lewis Center runs one of the nations top charter schools and we’re humbled that he selected our publication to submit information. Again, many thanks, Rick! Additional articles include Mr. Eldon Heaston, Executive Director of the Mojave Desert Air Quality Management District; Mr. Carlos Rodriguez, CEO of the Building Industry Association; Mr. Michael Stevens, Community Liaison Officer for the Mojave Water Agency; our favorite First District Supervisor, Mr. Brad Mitzelfelt and information on the High Desert Corridor. The High Desert Corridor is a very exciting project and I not only thank Brad, but also his staff for taking the time to educate our readership. Another welcome to Mr. Gary S. continued on page 5

To receive your FREE quarterly online subscription to The Bradco High Desert Report register today at: www.TheBradcoCompanies.com/register

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

2

A quarterly economic overview

Basis for Some Optimism? By Dr. Alfred J. Gobar Chairman, Alfred Gobar Associates

Nationwide employment figures released the day this article is being written are a basis for optimism in terms of significantly improved economic trends. There are at least two reasons to defer a major party based on this news. One of these is that optimistic numbers are frequently revised. Another is that even if true, the numbers still imply considerable wait for our economy to get into full swing. As the Wall Street Journal pointed out recently, employment recovery from the recent recession is substantially slower than recovery from other recent recessions, many of which were fully recovered within three years of their onset, while we are still wallowing near the depths of the current dislocation. Even at the local level, employment statistics are considerably more optimistic than they have been recently. Throughout Southern California (Ventura County, Los Angeles County, the Inland Empire, Orange County, and San Diego County), total nonagricultural wage and salary employment increased by 73,500 jobs in the twelve months ended February 2011. This is the first twelve-month period ending in February that has shown an increase since the comparable figures for February 2007—just prior to the onset of the recession. These numbers, however, are somewhat ambiguous. Nonagricultural wage and salary employment numbers generated on the basis of a survey of

employers provide a sample which is then expanded to the entire economy of the Southern California region to generate an estimate of increased nonagricultural wage and salary jobs in Southern California. Another source of employment information is the Household Survey in which analysts contact households and inquire about how many household members are employed and how many are unemployed and seeking work. The Household Survey is the source of unemployment data in addition to providing an alternative estimate of total employment including self-employed, etc. The most recent Household Survey for Southern California, however, shows that despite an estimated increase of 73,500 nonagricultural wage and salary jobs reported by employers, households report a decline of 68,000 employed persons over the same interval. One survey indicates an increase of 73,500 jobs overall, while the other suggests a decrease of 68,000 jobs overall. Biographies of economists show a surprising proportion of them with a fondness for strong drink. Statistics of this type may have some bearing on economists’ behavior in this regard.

(beginning in 1990), employment in Southern California had begun to show stronger signs of improvement.

The most recent graphic information for nonagricultural wage and salary employment (based on the Establishment Survey) is shown in Exhibit 1, indicating the recession continues to be in relatively full force. By this time in the prior recession

The positive employment figures, despite the ambiguity between the results of the Establishment Survey and the Household Survey, can be further broken down by area. Strength of the nascent economic

A weaker local economy is reflected in building permit data for the High Desert. In 2010, 544 new units were authorized by permit in the High Desert area— basically north of Cajon Pass. This was a slight increase over the comparable figure for 2009 when 389 new units were authorized by permit. Neither is impressive in relationship to the 8,300 new units authorized by permit in the High Desert in 2005. In both 2010 and 2011, the total number of new units authorized was considerably less than the previous low water mark associated with the 1990 recession—908 new units were authorized by permit in 1997. Exhibit 2 illustrates the pattern of building permit activity for single-family detached housing in Southern California and the High Desert area between 1980 and 2010, highlighting the increased volatility of new single-family housing production on the High Desert as compared with Southern California in its entirety.

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.

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

3

A quarterly economic overview

Basis for Some Optimism? Continued

9,000

90,000

8,000

7,000

70,000 6,000 60,000 5,000 50,000 4,000 40,000 3,000 30,000 2,000

20,000

1,000

10,000

2010

2011p

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

0 1980

0

YEAR Southern California

High Desert Area

Source: Bureau of the Census-Construction Statistics Division; San Bernardino County Land Management Department, Office of Building and Safety.

EXHIBIT 1 TOTAL NONAGRICULTURAL EMPLOYMENT INDEX - SOUTHERN CALIFORNIA JUNE 1990 - DEC 1995 vs. DEC 2006 - FEB 2011 6/07

12/07

6/08

12/08

6/09

12/09

6/10

12/10

6/11

12/11

6/12

12/12

6/13

12/13

6/14 1.02

1.00

1.00

0.98

0.98

0.96

0.96

0.94

0.94

0.92

0.92

0.90

1990's

0.90

2000's 0.88 6/90

12/90

6/91

12/91

6/92

12/92

6/93

12/93

6/94

12/94

6/95

12/95

6/96

12/96

Source: California EDD (Employment Development Department) and Alfred Gobar Associates

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com

6/97

0.88 12/97

Indexed (December 2006)

12/06 1.02

Indexed (June 1990)

Development of retail space should not be a major contributor to the real estate sector on the High Desert in the near term because existing facilities have substantial capacity to accommodate increasing sales activity levels, especially in light of the increased sales efficiency of high volume per square foot merchants such as Walmart, Costco,

100,000

80,000

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

continued on page 4

EXHIBIT 2 SINGLE FAMILY BUILDING PERMIT UNITS HIGH DESERT AREA VS. SOUTHERN CALIFORNIA 1980-2011p

SOUTHERN CALIFORNIA UNITS

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

technological revolution for about the past 15 years as new retailers demonstrate the capacity to generate much higherthan-typical sales volumes per square foot, implying the need for fewer square feet per capita of consumer population as more retail activity is focused in high

Sam’s Club, Home Depot, etc., that characterize the evolving retail sector. In addition, some technologically-obsolete retailers are closing stores, making space available for other uses. Recent months have seen bookstore closures as well as the closure of DVD rentals, etc. The retail sector has been involved in a substantial

HIGH DESERT AREA UNITS

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


High Desert Report

4

A quarterly economic overview

Basis for Some Optimism? volume-type stores. Recent employment data show a decline in retail employment in food and beverage stores and in clothing and accessory stores. This probably represents shift of purchasing from these types of specialty stores into general merchandise stores as Walmart and others broaden their range of product offerings to include more typical supermarket merchandise and/or the availability of broader lines of apparel. Although the statistics showing net increase in nonagricultural wage and salary employment based on the Establishment Survey during the twelve months ended February 2011 are cause for some optimism that a stronger recovery is on its way, especially in light of three years of strongly negative employment trends since February 2007, the ambiguity of these data in relation to information from the Household Survey is a matter of some concern. Overall, this is probably not a basis for a major three-keg party right away. I’m frequently asked about the slow economic recovery this time, especially in light of the huge fiscal and monetary stimulus unleashed since 2008. I’m not sure the academic elites who shape policy are as smart as we’d hope. For example, I doubt the perspicacity of economic experts who brag about the “gazillion” jobs that were saved by the bailout of General Motors. Saving GM doesn’t mean the saving of auto employment. The source of jobs for auto workers is not a specific company; it is demand for automobiles exerted by consumers. No one has convinced me that if GM did not exist or existed under another name, it would constitute a positive or negative long-term impact on consumers’ desire to buy cars. Since I think that auto workers are employed because people want to buy cars and not specifically because they want to buy GM cars, I have a hard time understanding how the taxpayer support devoted to saving GM saved any jobs at all on a net basis unless the failure of GM would discourage future consumers from ever buying any

Continued

type of car. Bankruptcy does not destroy automobile manufacturing facilities. Even if bankruptcy did result in the scrapping of large factories instead of their sale to some other entity that knew better how to operate an automobile company, there is probably enough worldwide capacity to produce cars to meet demand and, in the process, represent a source of employment for auto workers. Saving GM saved a particular group of jobs, but on an overall basis, really can’t be construed to have saved jobs in a general sense. As the performance of Ford illustrates, all saving GM did was to perpetuate an institution that had proven itself to be incompetent in the first place. Similarly, there seems to be a good deal of enthusiasm about taxing the “evil” corporations so that we don’t have to tax the rest of us as much. Every analysis I’ve ever seen shows that most corporations pass taxes along through higher prices for their product, lower wages and salaries to their employees, etc. Ultimately, financially-ineffective corporations will disappear (stockholders will receive no profit and bankers will be reluctant to lend to entities which have a high probability of being unable to pay back the loan). Bailing out incompetent institutions is not a path to economic progress, yet we choose to believe that two and two can be made to total five.

stimulating the housing market through the Community Reinvestment Act, historically low interest rates prescribed by Greenspan and Bernanke, and irresponsible relaxation of loan qualifications to cause many marginal or latent first-time homebuyers to become owners of housing—in many cases, housing considerably more expensive than they would likely to have afforded in a free market environment. Greenspan, et al., used the stimulus tool of the housing market at a time when it really wasn’t necessary. As a result, pent-up demand for homeownership is not a factor. We continue to see a good deal of consumer uncertainty as housing tries to find true market value in an environment that has been badly abused by the political or professional aspirations of policy-makers who took advantage of this tool at a time when it was not needed. It is somewhat analogous to taking antibiotics to cure minor ailments allowing toxic elements to develop resistance and, therefore, obviating the future value of specific antibiotics in relationship to their ability to control various diseases. We’ve already used the medicine of housing market stimulation and it’s no longer available to us to bail us out of this recession. We, therefore, need some other stimulus. It’s hard to figure out what it is in light of the expansionary policies that have been tried and failed over the last two or three years—TARP, the Stimulus, Easy Money, QE1, QE2, zero real interest rates, etc. What these policies have done is to scare the daylights out of investors and planners. This fright

Historically, economists have believed that a potent tool to counter the effects of recession is stimulating the housing market. As a result of lower prices (derivative of a recession) and lower continued on page 5 interest rates supported by the Federal Reserve Bank during recessions, it has historically been � Publications � Direct Mail Marketing fairly easy to stimulate � Brochures � Presentation Folders economic recovery � Newsletters � Stationery through increased � Postcards � Variable Data Printing activity in the housing � Business Cards � In-House Digital and Offset market. In this particular � Business Forms Printing case, however, we 9648 9th Avenue, Suite 1 Toll Free Hesperia, CA 92345 have already shot those 800-406-0982 P: 760.244.5454 F: 760.244.3959 arrows from our quiver www.1stopprinters.com by several years of overOne Stop Printers assists our customers in reaching their customers

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

5

A quarterly economic overview

Basis for Some Optimism?

Publishers Message

Continued

is likely to be magnified significantly soon as interest rates inevitably rise, causing the value of bond portfolios to decline sharply and destroying the “safe harbor” that many thought they had entered by buying Treasury Bonds. Some fairly knowledgeable people think that Treasury Bonds are significantly more risky than corporate common stocks In light of potential declines in sovereign bond prices as interest rates rise. I tend to agree with them. Increasing intrusion of politics into business decision-making has created policy dilemmas as CEOs attempt to please stockholders, Sarbanes-Oxley, the IRS, appropriate regulatory agencies, the general public, and the press. Since these various audiences do not all have the same objectives, the probability that a significant proportion of the audience spectrum could be satisfied by a particular policy decision becomes increasingly remote. The general press then wonders why the private sector has accumulated trillions of dollars in cash and does not appear to be enthusiastic about hiring permanent employees as distinct from “1099 contract” workers in an uncertain regulatory and political environment. This uncertainty spills over into hiring decisions in which it is less risky for some employers to “contract out” specific duties than to hire permanent staff. Contract employees often have a lower overhead component than would a permanent staff employee hired to achieve the same objective. Contract employees don’t join unions. Contract employees generally don’t mind working overtime. Contract employees don’t have to have medical insurance. Contract employees don’t file unlawful termination suits. There is a good argument that fear is a significant inhibitor to the economic expansion that will be the basis for creating a new generation of High Desert real estate millionaires. Maybe this time the winners will be those who are especially fearless.

Continued

Thomas, County Superintendent for San Bernardino County, thank you for providing information relative to what they are doing to prepare our students for higher education and the Inland Empire workforce. Dr. John Husing recently reported in the most important speech that he’s given in 47 years monitoring the Inland Empire economy, that education is our number one priority in order to ensure a transition back to a healthy economy, and an economy where education is the number one word used at work, at home, and at school. I’m also pleased to announce that on February 2nd, 2011, after 24 applicants and oral interviews, I was nominated to fill the fifth (5th) position at Victor Valley Community College, a school with an enrollment over 14,000 students. I’m pleased to enclose an article from Mr. Bill Greulich, our Director of Public Information regarding the school. We always appreciate hearing from Ms. Deborah Barmack and Ms. Jane Dreher of SANBAG relative to what SANBAG is doing to improve transportation throughout the region. Without these infrastructure enhancements, the High Desert region would not be able to grow to the extent that many believe should occur.

Director for San Bernardino County. Watch out! If Mary Jane is involved, it will become reality. A person not known for holding long meetings, we welcome Mary Jane and her article to our publication. I welcome back a friend and a consultant to our firm, Ms. Susan Bloomfield with her article, “Applying Lessons Learned From The Past,” where she discusses available square footage, vacancy factors, etc for industrial, office, and retail throughout the entire High Desert region. Thank you Susan! I wish to re-welcome Mr. Ryan Orr, who now represents the Victor Valley Wastewater Reclamation Authority (VVWRA). I wish to thank Mr. Mike Borja from the City of Adelanto, Mr. Kathy Martin with the Town of Apple Valley, Mr. Ron Rector with the City of Barstow, Ms. Lisa LaMere with the City of Hesperia, and lastly, Mr. Bernie Calderon from the City of Victorville relative to our city updates. Lastly and most importantly, if you wish to continue to receive a copy of the Bradco High Desert Report, any statistical reports, op ed articles that we post to our website for free, please register at our website at www. thebradcocompanies.com/register. We all hope that you have a great summer.

I would also like to thank my close friend, Mr. Bob Thompson of Advanced Listing Services (Las Vegas) for his housing article (“The Difference A Year Makes”) and his overview. Bob is very passionate about the Proud to be a part work that he does and we of the very much appreciate his High Desert Community contributions. We welcome a person that I’ve been working with for many years, is a part of the NAIOP Board of Directors, Mrs. Mary Jane Olhasso, the new Economic Development

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

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

6

A quarterly economic overview

The New Barstow Community Hospital Reaches the ‘Topping Out’ Point of Construction By Michael Stewart, Barstow Community Hospital CEO

The new Barstow Community Hospital celebrated its “topping out” on April 19, 2011, with the last piece of structural steel being placed. Somewhere between groundbreaking and ribbon cutting comes a little-known ceremony in construction called “topping out.” It occurs when the highest or last structural element is about to be swung into place. This latest milestone in the construction of the new Barstow Community Hospital keeps the project on schedule for opening in late 2012. Barstow Community Hospital celebrated the groundbreaking of the new hospital on September 8, 2010, with community members, local dignitaries, and hospital representatives taking part. 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.

and underground infrastructure. From March to mid-April 2011, the erection of steel was completed. By the summer of 2011, the outer structure should take shape, and for nearly a year work will begin in earnest 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.

bigger ER, expanded operating suites, diagnostic imaging services area, and dramatic improvements in the obstetrical/maternity services area and the intensive care unit as compared to the current facility. 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.

Targeted include:

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.

construction

milestones

 Building dried in by July 2011  Substantial completion by June 2012  Equipment move-in, summer/fall 2012

licensing

 Opening in late 2012 The new Barstow Community Hospital will be an advanced facility that will include all private rooms, a much

Layton Construction, Irvine-based general contractor for the new hospital, began moving dirt on the new hospital property, 19.7 acres across Mountain View Street from the current hospital, even before the groundbreaking ceremony was held. More than 250,000 cubic yards of dirt was moved on the property before construction of the hospital began. It was a balanced site -no dirt was taken off the property or was brought in for fill. In early 2011, the general contractor began work on the hospital’s foundation The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

7

A quarterly economic overview

The Lewis Center a Strong Educational Foundation

By Rick Piercy, CEO/President of the Lewis Center for Educational Research Across from my house a school is under construction, and for the past several months I’ve watched as earth was removed, returned, compacted, smoothed and leveled to exact specifications. It was then dug up again as conduit was laid, rebar placed, and footings poured. It has been months of exacting work after countless months of planning, engineering, and review. In the end the foundation that has been so meticulously laid will be hidden from view. It will be covered with walls, floors, roofing, and furniture, yet by all accounts it is the most important part of the building; on this all else will be measured. If the foundation lacks integrity the building’s integrity will come into question. If it isn’t square the rest of the structure will not be straight. And if an earthquake hits while full of children, it will not be strong enough to protect those inside.

need to get back to the important news in the report. But stay with me, this may be more relevant than you think. The analogy of a building’s foundation is certainly apropos to many of the things you do in your normal workday, as well as the way we educate the country’s children.

It’s true that we don’t think much about the foundation of a school, hospital, or even our house, but they are obviously so important. Likewise, most of us don’t think deeply about the foundation of our nation. We talk about the strength of a nation being its people; we use cliché sound bites: like our children are our future and needing a well-educated workforce. But few of us look at the importance of the national foundation of the American educational system. There is debate, criticism, letters to the editor, and a thousand self-serving solutions, but very few places where carefully planned solutions are being tested and refined. One such place is the Lewis Center for Educational Research.

Today’s educational system is built on a foundation laid over 100 years ago during the Industrial Revolution. Think of today’s builders using 100 year old technology and materials from the early 1900’s. Think of them going out and taking anyone off the street to work on the project and pouring foundations with a large group of laborers hand-mixing cement and transporting it in wheel barrows. Our education system was designed using the work of Frederick Winslow Taylor, born in 1856. He is considered the father of scientific management and a leader of the Efficiency Movement, which brought us the assembly line. Think about our schools. Each classroom is a different stage of the assembly line. Children are moved from room to room, from kindergarten to twelfth grade. They enter school not based on maturation or ability but by age. Children in our system are not treated like unique, oneof-a-kind individuals but as widgets; something to be shaped to look like every other widget on the line. That system worked for the industrial movement. Henry Ford didn’t have to worry about child labor laws and needed unskilled, uneducated workers. As you know, that is not the case today.

Those of you who are reading this may be doing so out of curiosity. Why would this article appear in the “High Desert Report”, an economic quarterly? At this point you may feel guilty and think you

So what can be done to change the system? Is it hopeless? Have so many special interests groups high-jacked the system that our only hope is the complete collapse of America’s schools? We at

the Lewis Center and our two laboratory schools don’t think so. In fact we have the audacity to believe that we can change the world and have been doing so a little at a time for over 25 years. It may certainly sound conceited to say that a small organization in the Town of Apple Valley would think that its work with 2,000 students could change 100 years of entrenched government bureaucracy, but we do. The Lewis Center and its two charter schools, the Norton Space and Aeronautics Academy in San Bernardino and the Academy for Academic Excellence in Apple Valley, provide a wonderful opportunity for us to test and evaluate the latest brain research, pedagogy, best practices and techniques. It is where we look at the effectiveness of technology in the educational process and also look at reducing the cost of education and maximizing the return on investment. The Lewis Center also operates programs that reach students across the United States and around the world. Our partnership with NASA allows us to control and operate three radio telescopes at the Deep Space Network at Goldstone, located on Fort Irwin near Barstow. Through our Mission Control Center in Apple Valley, students as young as Kindergarten operate a million pound, nine story high radio telescope from their classroom and gather data for NASA scientists on real scientific projects. Our K16 Bridge program is providing over 100,000 students in California and Texas with the tools to take charge of their education and prepare them for careers and higher education. Almost 300,000 students have traveled with their classmates and teachers on fieldtrips to our campus on the Mojave River. continued on page 8

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

8

A quarterly economic overview

The Lewis Center a Strong Educational Foundation Continued

The students at the Academy for Academic Excellence, our oldest school at 14 years, are providing proof that what we are doing makes a difference. Last year’s graduating class was comprised of 96 students with 100% graduating. Five went into the military, well prepared in our nationally award winning Air Force JROTC program, a program that 27% of our high school students participate in. The other 91 students were accepted into two and four year colleges and universities, earning $1.74 million dollars in scholarships. You might think that these students were selected into our school for their academic prowess. Not so. All of our students are selected by random lottery, and in fact we have a high percentage of students with special needs. What we are doing is working. The model we have developed continues to be refined and revolutionary change is right at the tipping point. How do we push it over? How do we change America’s educational system? How do we change the world? By allowing the wonderful technology of the twentyfirst century to virtually tie children, teachers, parents and leaders like you into a nationwide community of revolutionary change with the use of networking and telecommunications. I invite you to be a part of this movement, help build a foundation for educational excellence, and America will be stronger for it. Visit us on the web at: www.lewiscenter.org.

Air District Offers Emission-Reduction Grants Up to $1,000,000 Available in the High Desert By Eldon Heaston Executive Director, MDAQMD

The Mojave Desert Air Quality Management District is now accepting proposals for projects that reduce smogforming emissions from motor vehicles and help improve air quality in the High Desert portion of San Bernardino County and in Riverside County’s Palo Verde Valley. Approximately $1,000,000 in grant monies is available to public or private entities for projects that reduce emissions from mobile sources, which account for more that 60% of air pollutant emissions gauged in the High Desert. Eligible projects include those that reduce vehicle trips or miles traveled, or encourage the use of alternate travel modes, such as public transit. Projects related to alternative fuel vehicles, parking management, telecommuting, and public education programs that do not duplicate the MDAQMD’s mobile source education efforts are additional examples of projects which may be eligible for funding. The incremental cost of purchasing or leasing clean fuel/ electric vehicles or repowering existing vehicles to operate on alternative fuel may also be eligible for funding in an amount not to exceed 25% of the total project cost.

The AB2766 grant program is funded through vehicle registration fees, which the local air agency uses to support programs that reduce air pollution from motor vehicles, as required by law. Past projects funded through the program include a Park and Ride lot in the City of Hesperia, an LNG/CNG fueling station in the City of Barstow and two haul truck repowers for Hi Grade Materials of Hesperia. Proposals will be competitively evaluated, and accepted through June 1, 2011 at 5:00PM. For more information on the competitive grant process, or to obtain a copy of the Call for Projects, please call (760) 245-1661, ext. 1885, or visit the district’s website at www. mdaqmd.ca.gov.

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

9

A quarterly economic overview

Victor Valley Housing and BIA Efforts Hold Keys to Recovery By Carlos Rodriguez, CEO Building Industry Association Baldy View Chapter

Residential construction in the Victor Valley and along the I-15 corridor cities leading to the region holds the key to San Bernardino County’s economic recovery, and the Building Industry Association (BIA) Baldy View Chapter is launching a program to ensure it happens. According to figures released by the Construction Industry Research Board (CIRB) and compiled by the Chapter, “the Victor Valley and I-15 corridor continues to anchor our recovery and will provide the gateway to prosperity,” said BIA Baldy View President Jonathan Weldy of Meridian Land Development. “In 2010, the four incorporated Victor Valley cities of Hesperia, Adelanto, Apple Valley, Victorville and unincorporated county areas in their spheres of influence accounted for over 40 percent of the 1,844 single - and multi - family permits issued in all of San Bernardino County in 2010,” Weldy said. To ensure this recovery, the BIA Baldy View Chapter launched its own recovery strategy: the BIA Baldy View Jobs Creation Initiative – Keys to Restoring the Health of the Building Industry and our Region’s economy.

corridor cities of Ontario, Rancho Cucamonga, and Fontana in the Inland Valley, nearly 70 percent of the building in San Bernardino County took place along this important corridor in 2010 in a trend that has continued since 2005”. While over one third of all the permits issued in the county were for multi family uses, nearly 90 percent of the permits issued in the Victor Valley region were for single - family homes and over half of the 2010 single - family permits issued in the entire county last year were issued in the Victor Valley. Weldy said the Chapter’s Job Creation Initiative’s four - tiered approach incorporates a continued push for development impact fee (DIF) reductions, deferring DIF payments to issuance of a certificate of occupancy (particularly in school districts), implementing a lien policy regarding performance bonds in cities that have not adopted the ordinance and monitoring the implementation of SB 375 - a land-use planning bill that aims to reduce greenhouse gas emissions through the reduction of vehicle miles traveled (VMTs) - in coordination with Southern California Associated Governments (SCAG) and San Bernardino Associated Governments (SANBAG).

“When added to the totals of the I-15 ISU Insurance Services ARMAC Agency

Ryan McEachron President/CEO

Lic. # 0C26179

One Responsible Source™ For ALL Your Insurance Needs

17177 Yuma Street Victorville, CA 92395

Phone: (760) 241-7900 www.isu-armac.com

“The importance of the Chapter’s Jobs Creation Initiative is that the current economic downturn imposes contradictory challenges on governments to the seemingly obvious approach to spurring economic recovery by encouraging homebuilding,” said former BIA Baldy View Chapter President Todd Tatum of the Victorville – based American Housing Group. “Local governments faced with critical shortfalls and deficits resist considering or implementing fee reductions when projecting their budgets,” Tatum said. Yet, “I think now cities and city staffs realize that what homebuilding brought to the city in terms of overall community development: major employment, tax revenue streams, infrastructure, parks and libraries,” he added. “They realize homebuilders are really the drivers of the economy.” Because a decade – long shortfall of new housing fueled both the housing boom and bust earlier in the decade, revitalizing the housing market holds the key to economic recovery in the region and the state, according to noted economist John E. Husing, Ph.D., of Economics & Politics, Inc., in his 2009 report The Housing Crisis Issues & Potential Strategies. “Fundamentally, the Inland Empire has moved into a deepening recession because of what has occurred in its residential market.” said Husing. According to the report, housing demand outstripped supply, fulfilling the classic definition of inflation as ‘too many dollars following too few products.’ Husing notes that the ratio of residents to single - family dwelling units was 4.66 as the region recovered continued on page 10

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

10

A quarterly economic overview

Victor Valley Housing and BIA Efforts Hold Keys to Recovery Continued

from the post - Cold War recession in 1997. However, over the intervening decade, 5.71 people were added for each new single - family unit built during that period. “To keep the ratio intact at 4.66, another 156,700 units would have had to have been built or 15,670 per year in this ten year period. San Bernardino over that period fell short by nearly 30,000 units.” he added. The region’s recovery now hinges on “a resumption of residential construction activity,” Husing said. This is the case as the Inland Empire’s competitive advantages are the availability of land that can support new homes and industrial facilities as well as a large marginally educated adult population. “In the meantime, new home development will stagnate and the recession will persist, unless policy action is undertaken to make home building profitable.” he added. “And profitability is one of the major issues confronting homebuilders,” said BIA Baldy View Vice President Todd Leibl of Victory Homes. “Current inventories of repossessed homes, short sales, and distressed properties continue to hamstring investment in homebuilding by keeping prices artificially low.” However, he added, “as inventories are liquidated prices should return to reasonable levels.” “Once that happens,” said Leibl, “we’ll be back in the building business.” In addition, local governments need to adjust their fee structures to the realities of the current housing market and create incentives for homebuilding, which could prove a hard sell to

local governments under pressure to maintain staffing levels and entitlement programs. “The BIA has made an extreme effort with the Jobs Creation initiative, but you have to have a government that wants to understand the issues and have the ability to make those changes,” Leibl said. To make housing profitable, Husing recommends steps mirroring the Chapter’s initiative, such as reducing DIFs while encouraging public policies that enable more compact and affordable housing and new home community designs consistent with the goals of SB 375.With these programs in place, San Bernardino County will be positioned for a return to prosperity.

The BIA Baldy View Chapter represents homebuilders and associates in the housing industry in all of San Bernardino County and the easternmost portion of Los Angeles County. Founded in 1938, the Baldy View Chapter is the most honored homebuilding chapter in the nation. It is a member of the California Building Industry Association (CBIA), a statewide trade association representing nearly 6,000 businesses including homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals.

Preparing for the next drought…and beyond By Michael Stevens Community Liaison Officer

There’s a saying that goes: “No one plans to fail, but many fail to plan.” This adage, however, cannot apply to Mojave Water Agency (MWA) and most water agencies in the High Desert as we work to provide water for a region totaling 437,357 people—and expected to increase 60% by 2035 to 706,388. The adage can’t apply because in 1983, the State of California adopted the Urban Water Management Planning Act, which requires water agencies to prepare an Urban Water Management Plan (UWMP) every five years when a water agency’s service area includes at least 3,000 connections or water deliveries are equal to or greater than 3,000 acre-feet per year. Despite better-than-average precipitation levels this past winter and this spring—and the recent cancellation of a three-year statewide drought—the state’s water resources are still subject to increasing demand for a finite supply. Urban Water Management Plans are developed and implemented at the local level in order to ensure effective conservation, water use efficiency and long-term supply reliability. And the Plans work! For Mojave Water Agency its Plan works because of a proven track record of planning, preparing, and positioning. The Urban Water Management Planning Act requires water agencies to assess growth trends and project water demands a minimum of 20 years in the future. But adoption of the UWMP is one step that helps our region meet future water demands. continued on page 11

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

11

A quarterly economic overview

The High Desert Corridor

By Brad Mitzelfelt 1st District Supervisor, San Bernardino With stimulation of job growth as one of my top priorities, the High Desert Corridor project is especially exciting because it will attract long-term, sustainable economic growth and create immediate construction jobs while improving the quality of life for High Desert residents, easing congestion, and speeding goods movement through Southern California and the West. Post-war Southern California has followed a pattern of growth that promotes congestion. Bedroom communities become populated with commuters who increasingly clog overburdened roads and freeways to reach faraway jobs. Highway infrastructure lags decades behind and never catches up. Family time decreases as commuting time increases. We can learn from that historical trend by creating state-of-the-art infrastructure first and, with good land use planning, create the kind of jobs and housing together to reduce commutes, improve safety and our quality of life. The High Desert Corridor is a 50-mile truck expressway connecting State Route 14 in Palmdale (which connects with Interstate 5) to Interstate 15 in Victorville. Given that road projects typically take decades from conception to construction, we knew we could not build this critical project in a traditional manner, at least not in an acceptable timeframe. Seeing that the federal Highway Trust Fund was tapped out, I along with Los Angeles County Supervisor Mike Antonovich decided to create a Joint Powers Authority to attract the continued on page 12

Preparing for the next drought…and beyond Continued

Equally critical is executing the Plan and making decisions at the right time, and taking advantage of opportunities that sometimes aren’t always available. One such decision by MWA occurred in 1997. Recognizing the explosive growth in the High Desert region, the MWA board made a decision in an intense bidding climate to purchase additional water rights to meet future local water demands. Again in 2009 the board purchased additional water rights with an “eye on the future.” The “eye on the future” didn’t take too long to arrive because in 2010 the Agency was able to cash in and not just have “access” to water rights but was able to “purchase water” as a result of the additional water rights. What this means is that MWA’s water deliveries in 2010 through the State Water Project marked the second year in a row the Agency took delivery of its full amount of water available (41,400 acre-feet) but without the acquisition of the additional water rights the total would only have been 37,900! The water delivered was enough to meet all of MWA’s delivery obligations—with 17,600 acre-feet going to underground storage for future use. MWA has planned, prepared, and positioned itself for several years and will continue with the goal of “leaving no water behind.”

toilets replaced with high efficiency toilets, and 1,989 high efficiency clothes washer rebates issued—resulting in a savings of 876 acre-feet of water. One acre-foot (approximately 326,000 gallons) is enough water to serve a family of four for a year. The decisions to purchase additional water rights and invest in conservation enabled the Agency’s UWMP to exceed the state’s minimum 20-year planning requirement for a minimum of 25-years with the ability to plan far beyond. The public will have several opportunities to provide input about the UWMP during a 30-day public comment period between April 5 May 5 while the draft is available for public review. To view the report you can visit the MWA website: (www. mojavewater.org) or to see a hard copy, visit either local library branch or MWA’s front counter. In addition, the MWA Board of Directors will hold a workshop on April 14th and a public hearing on May 5th before adopting the plan on June 9th. For more information about Mojave Water Agency, visit our website: www. mojavewater.org or Facebook page: http://facebook.com/mojavewater, or to speak to someone call: 1-800-254-4242.

Another key decision enabling the Agency to meet water demands well beyond 20-years was the investment in aggressive water conservation starting in February 2008. The $3,146,605 million dollar invested in the conservation program thus far has seen 3.6 million square footage of turf removed, 1,200

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

12

A quarterly economic overview

The High Desert Corridor Continued

private sector to invest in the financing and construction of the High Desert Corridor. The JPA Board also includes representatives of each county, town and city along the route: Adelanto, Apple Valley, Victorville, Lancaster, and Palmdale. I felt that if we combined private sector dollars in the public-private partnership model, which has worked in other states, with forward-looking leadership by both counties along with San Bernardino Associated Governments (SANBAG) and the Los Angeles Metropolitan Transportation Authority (MTA), then we can accomplish in ten years what traditionally might have taken thirty.

To see the potential, you need only to look at a map. Southern California is literally the hub of international trade and from the High Desert, the spokes to the rest of the country are Interstates 15 and 40, along with the Union Pacific and BNSF Railway lines. But the east-west corridors, including Interstates 10 and 210, and State Route 60 are gridlocked, while Highways 138 and 58 are grossly inadequate to safely and efficiently handle the volumes of truck traffic they already have. Highway 138 handles 15,000 vehicles a day with 10 percent of the volume being heavy trucks. Traffic volume between the fast-growing Antelope and Victor valleys is projected to exceed 100,000

vehicles a day by 2035, with truck traffic increasing to 13 percent. The need for a High Desert link between the Antelope Valley in Los Angeles County and the Victor Valley in San Bernardino County was foreseen in the 1930s when the Auto Club dubbed it the “L.A. Bypass.” That was before the current system was even built. As population growth in the High Desert of both counties sprinted to the highest levels in the country during the past decade and the ports of Long Beach and Los Angeles continue to ship 40 percent of the nation’s imports through our region, the need for a new, high-speed continued on page 13

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

13

A quarterly economic overview

The High Desert Corridor Continued

link has become undeniable. Our project got a major boost when Los Angeles County voters in 2008 approved a half-cent sales tax for transportation projects (similar to our own Measure I) and specifically identified $33 million for the environmental review of the High Desert Corridor. Los Angeles County MTA is now taking the lead on the environmental review and design, and has combined it with environmental work that has been underway for 10 years on the stretch from Victorville through Apple Valley which terminates at State Route 18 in Lucerne Valley. The eastern stretch, which is being studied in the environmental review as part of the overall 63-mile study area, would connect to the High Desert Corridor interchange at Falchion Road and Interstate 15 and continue east to Highway 18. That part of the project will not happen until far into the future and would most likely be in the form of a traditional, realigned state highway segment. When funding does become available, extending the project east to serve the North Apple Valley Industrial Specific Plan would be a natural next step. However, nothing east of Interstate 15 is part of the public-private partnership for which we are seeking federal funding in the next six-year transportation bill. The agency held public meetings on the combined Environmental Impact Report here in the High Desert in recent weeks and there will be further opportunities for public input in the fall, with a draft environmental document scheduled for the fall of 2012, and a final document expected in the spring of 2013.

As part of the environmental review, MTA is required by law to study alternatives, and one of those is Highway 138, but it is unlikely Highway 138 could ever be improved into a highspeed truck expressway, much less a toll facility. Master planning of warehousing, shipping, and manufacturing along its route, including Southern California Logistics Airport, and the Adelanto, Hesperia, and Apple Valley industrial areas, will spur further growth in air freight and manufacturing, and the logistics and export jobs that go with those industries. Those new jobs have a significant multiplier effect when workers need – and can afford – retail, entertainment, and professional services.

renewable energy goals. With its innovative financing, its capacity as a corridor for utilities, renewable energy, and high speed rail, and its creation of local jobs and masterplanned communities that will reduce commuter miles and truck congestion, this project will help the state meets its greenhouse gas and renewable energy goals, while improving air quality and the quality of life for High Desert residents. It is the kind of creative, multipurpose 21st Century project that should qualify for funding in the new federal transportation bill to be discussed by Congress later this year. For these and other reasons, the High Desert Corridor will mean a better and brighter future for the High Desert and for all of Southern California.

Construction of the 50-mile project is estimated to employ 16,000 workers starting in 2016. And an independent study done in 2007 by Economic and Planning Systems, Inc. estimates the High Desert Corridor would stimulate 42,000 sustainable, long term jobs – about 28,000 of those in the logistics industry. We are trying to get the federal government to use the High Desert Corridor as a laboratory for new and exciting technologies. High Speed Rail could run alongside the route, providing a convenient link to the California High Speed Rail Project. Solar panels and wind turbines will be sited along the expressway to provide power for the project and also for sale into the grid, creating another revenue source to offset the costs of maintaining and operating the six-lane expressway, while helping the state meet its

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

14

A quarterly economic overview

San Bernardino County Schools Preparing Students for the 21st Century Global Community By Gary S.Thomas, Ed.D. - County Superintendent

As I start my first full term as San Bernardino County superintendent, I remain inspired by the teaching and learning that takes place in classrooms throughout our communities to prepare our students for this world. I am appreciative to county voters for their confidence and humbled to serve another four years. I am moved by the dedication and collaboration of so many to see that all of our students have access to high quality and innovative educational opportunities in which learning can flourish. Our region, including the High Desert, should be encouraged by the tremendous strides made by students, staff, and families to raise student performance, close achievement gaps, and improve dropout rates. Educators in our county remain dedicated to overcoming the impediments our schools, students, and families face, and seizing the opportunities before us with boldness and a renewed sense of purpose and direction. We are committed to building a common vision in San Bernardino County to prepare all of our students to take their places as productive, contributing members of a 21st century global community. Let’s envision the future of what public education can be and what it can do. The Future For Public Schools In 21st Century In an interview for Edutopia, futuristic author Alvin Toffer offers us a glimpse into his vision of public schools in the future. Schools are open 24 hours a day. They are integrated into the community. Different kids arrive at different times. The bells don’t just ring all at the same time. That’s because the children are different. They have different potentials. Teachers work with non-teachers. Teachers alternate working in schools and in the business world. Local businesses have offices in the schools. Technology is infused into every aspect of the

environment. Curriculum is integrated across the disciplines. Improving Student Performance As we look toward the future, it’s important to note our progress to date. Schools in San Bernardino County made notable gains in academic achievement and outpaced the state average in terms of growth last year on California’s measure of school performance, the Academic Performance Index (API). Recently, we received some outstanding news concerning county schools who are being recognized for Title I Academic Achieving honors. Seven of our 14 recipients reside in the High Desert. They are Sycamore Rocks Elementary, Apple Valley Unified; Hinkley Elementary/ Middle and Skyline North Elementary, Barstow Unified; Cypress School of the Arts, Hesperia Unified; Sixth Street Prep and Village Elementary, Victor Elementary School District; and University Prep, Victor Valley Union High. These honors came on the heels of news that Sixth Street Prep and University Prep had been selected as National Blue Ribbon schools, a distinction that only 12 county schools have ever achieved. Addressing the Access and Achievement Gap This past school year, there were 10 schools from our county that worked hard to exit Program Improvement (PI), which is the federal intervention for schools that do not meet their accountability measurements for two consecutive years. Two of those schools – Friendly Hills Elementary and Joshua Tree Elementary in the Morongo Unified School District – were from the High Desert. The dichotomy for us is that three county schools celebrated the fact that they reached the state standard of 800 for the first time, but at the same time also fell into Program Improvement for

not meeting federal targets. All totaled countywide, seven 800 schools were placed in PI last year, a dubious first. It’s a mixed message when schools can be deemed successful on the one hand but labeled failing on the other. In terms of closing the achievement gap, there was very encouraging growth measured by Hispanic and African American subgroups of county students - both were above state averages for those meeting growth targets. Hispanic students were three points higher than state averages at 74 percent. African American students in the county were five points higher than the state averages for those who met their growth targets at 68 percent. In addition, socioeconomically disadvantaged students in the county finished higher than their peers statewide by 1 percent with 71 percent meeting their API growth targets. We celebrate the growth and accomplishments of all of our schools and districts on academic performance indicators. The Future Of High Schools Improving dropout and college-going rates in San Bernardino County has been at the forefront of our work. When we envision the future for our students, region, state and nation, we know we’ve got to step-up our growth at every level in order to be competitive, viable and successful. In the most recent data reported by the state, county schools have made improvements in our dropout rates decreasing from 22.5 percent for 2007-08 to 21.6 percent in 2008-09. Meanwhile, the state dropout rate increased from 18.9 percent to 21.5 percent. Not only is San Bernardino County moving in the right direction, we are bucking the state trend! Three years ago when the first set of data came out, the dropout numbers were abysmal for our county - 26.3 percent continued on page 15

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

15

A quarterly economic overview

San Bernardino County Schools Preparing Students for the 21st Century Global Community Continued

of our high school students were leaving over four-year periods. That ranked us fifth from the bottom among California’s 58 counties. As our dropout rates have improved over the past two years, San Bernardino County has jumped 15 spots in the state rankings. While it’s better, it still is not where our students need to be to make our area more attractive to employers and businesses, and it’s certainly not where our students need to be in order to be prepared for a global economy. A Call to Action – Everyone Counts Reducing dropout rates and increasing high school graduates is the goal of the Call to Action - Everyone Counts initiative. Already, since this partnership of educators, business, labor, government, community and faith-based stakeholders formed 18 months ago, we’ve seen improvement in countywide dropout rates. Key research shows that effective dropout prevention and intervention strategies are systems of support for all students that include school, family, and community efforts and ultimately, districts and schools are the architect when designing what programs work best to target student populations. One district that stepped up to pilot some of the research-based Call to Action strategies is Barstow Unified, and we are pleased to be able to support its efforts. While the district has great challenges to address in regards to its dropout rates, in the past year alone, Barstow Unified saw a 5.2 percent decrease in its dropout rate. Early Assessment Program High school graduation and college readiness are connected, whether a student enters into community college or the University of California/Cal State University systems. In 2008-09, 22.4 percent more high school seniors in San

Bernardino County graduated with UC/ CSU required courses from the prior year. These numbers show significant strides. Ensuring that high school graduates on a college path are truly ready to succeed in college is the goal of the Early Assessment Program (EAP). The 11th grade assessment is designed to give high school students an early indication of college readiness in English language arts and math, and to avoid incoming college students’ need for remediation. A student who is deemed by the program to be collegeready will be exempt from taking the UC/CSU placement tests and can enroll directly into college level classes upon admission. Working with our school districts, community colleges, Cal State San Bernardino, Cal Poly Pomona and UC Riverside, we are working with school leaders to continue to increase student participation in the EAP. Additionally, our office is working with Chaffey Joint Union High School District and Cal State San Bernardino to develop a pilot for students who do not pass EAP in their junior year, providing high school counselors and teachers with a gauge for course placement. In this era of limited resources, envision a future where high schools, community colleges, and universities align coursework, teacher training, tests, and college entrance expectations so students are prepared, at graduation, for the next stage of their education. Alliance for Education There can’t be a conversation about a vision of schools for the future and not touch on the need for graduates, teachers and professionals in the fields of science, technology, engineering, and mathematics - or what’s commonly referred to as STEM. County Schools’ Alliance for Education continues to grow

and expand efforts in developing STEMfocused programs in elementary through post-secondary levels across the county. This year’s expansion has involved increasing elementary-level participation in STEM-focused activities. STEM programs of study have expanded to 10 districts and 19 school sites with over 1,500 enrolled students. Real world learning experiences not only make learning relevant for students, it also inspires and excites them. Nearly 500 middle school students from eight school districts had their engines revved up for the day at the second Auto Club Speedway Math and Science Day in Fontana in March. They had an opportunity to hear from Dave Rogers he’s the crew chief for driver Kyle Buschand got the opportunity to meet Rutledge Wood of Speed TV. But students, some of whom were on spring break and still attended the event, also got excited about conducting math and science labs on speed, acceleration, mass, force, and friction. Talk about relevance! Regional Occupational Programs We’ve moved toward great clarity in the education community that all students need to graduate high school with preparation for post-secondary opportunities—whether that be a fouryear institution, a community college, training for a career or directly into the workforce. I’m a strong believer in Regional Occupational Programs (ROP) and their role in the future of our public schools. Data shows that ROP courses reinforce academic standards, provide relevance, and help to reduce the dropout rate. Over 35,000 high school students were served through the three county ROP during the 2009-10 school year. Funding for these programs is precious and crucial to our economy, and we all need to fight the good fight to protect it. continued on page 16

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

16

A quarterly economic overview

San Bernardino County Schools Preparing Students for the 21st Century Global Community Continued

Student Services Equally critical to districts, families, and communities are our Student Services programs, as they serve the most vulnerable of student populations. I am proud to say the deliveries of services in these programs are models statewide. The California Department of Education selected our Juvenile Court Schools’ Special Education Records Collection System as a statewide model. The office was awarded a grant to present the system to county offices throughout the state. Because of the variety of student populations served in our alternative and special education classrooms, a variety of innovative technological solutions are being used to support teaching and learning. Audio enhancement systems help deaf and hard-of-hearing students understand verbal communications while iPods and iPads are used to visually enforce teaching strategies with visual learners in special education classrooms. In our Juvenile Court Schools programs, on-line college courses are helping students not only get back on track for high school graduation but bound for college. School Safety Through collaborative school safety programs, we have a number of prevention and intervention programs in place as safety nets to catch at-risk students. It’s troubling - children today are exposed to a myriad of societal challenges and negative external factors. Yet when our students come to school each morning, the challenges and influences in their day-to-day lives do not get left outside the campus gate. Even so, the majority of students do attend school with a willingness to learn and with attitudes of understanding and acceptance. We have built partnerships and shared tools and resources in this county to

ensure the safety of schools through our Law Enforcement Education Partnership and the Gangs and Drugs Task Force. I want to acknowledge districts and communities in our county for steps taken to calm recent incidents of violence and bring about discussion and healing in their communities and on school campuses. These tragic events deeply sadden and touch us all, and we grieve for the families and communities directly affected. District administration, school staff, board members, government officials, local law enforcement, church leaders, parents, and students have all been willing to band together and lift their community back up. Lack of knowledge and understanding can bring about fear, distrust, and intolerance, often times at a great cost. We must continually envision schools without prejudice, intolerance, and bullying and strive for that vision. The future of our children is dependent upon it.

and there’s concern it could get shorter. Plus, our students sit in the most crowded classrooms in the nation. If the tax extensions are not approved, K-12 schools stand to lose $2 billion in funding at a minimum.

State Education Budget

In a time of shrinking resources, it challenges us to take courageous steps to not only improve but to rethink our public schools. I look forward to the next four years of working together. We have a great deal of hard work ahead of us; and we cannot do it without a vision - with a common vision for the future.

While legislators in Sacramento tussle with the issue of what may become of five-year tax extensions that could shore up $12 billion to cover roughly half of the state’s $25.4 billion shortfall, county districts are making difficult decisions concerning their 2011-12 budgets. We’ve heard these stats before, but they’re worth repeating: $18 billion in cuts over the last 3 budget years; $1 out of every $5 going to districts is now being deferred, that’s 20 percent of revenue for our cash-strapped districts; also over the course of 3 years - 30,000 teachers and 10,000 classified employees laid off statewide; 174 districts in qualified or negative status statewide and eight of 33 districts self-certified as qualified at first interim in our county. California schools have one of shortest school years in developed countries,

California’s disinvestment in education is choking the economic engine of this state and breaking the promise of opportunity for our students. Until the legislature can agree that a disinvestment in public education robs our students of the opportunities to prepare them for productive citizenry; and until this state delivers a school finance system that adequately funds our schools, I encourage us to rally resources and work toward a common vision where access, equality, and opportunities abound for every student in San Bernardino County. An investment in education is an investment in our common future. Envisioning The Future

With a common vision, more of our students will be successful in school. With a common vision, more of our students will graduate prepared for work and college. With a common vision, our schools will be safer and our communities will grow stronger. With a common vision, we will graduate highly trained, skilled employees and get this economy back on its feet. With a common vision, families will thrive and communities will prosper. With a common vision, we can achieve equity and excellence for all students. Envision the future.

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

17

A quarterly economic overview

Victor Valley College’s Public Safety Training Center Offers Wide Ranging Opportunity By Bill Greulich

Described as a “Village Under One Roof,” the Victor Valley College’s Public Safety Training Center will open its doors in February 2012 to a new world of opportunity for students. Who are these students? They are our country’s future first responders, disaster preparedness proponents, public safety officers, and community leaders. It is the goal of the faculty in the public safety sector to train and qualify these students to be uniquely capable of competing for high paying jobs in our communities and across the country because they will receive an all encompassing, real-life, cross-discipline training that will combine elements of fire, EMT, paramedics, administration of justice, SWAT, and corrections. This multi-agency approach to disaster training is unique in its approach because it will occur under one roof. Each individual training program will have an opportunity to work cooperatively with other related services in real-life scenarios that run the gambit from a shooter in a high- rise building to responding to earthquakes, terrorists, chemical and natural disasters.

will be able to accommodate 50 caliber, and high caliber assault rifle training. It will be SWAT Qualified 223 range. The facility will also enable qualified faculty to offer community gun clubs with shooting competitions and armor classes that encompass weapons care and safety. The facility will operate as an Administration/Classroom/Lab building, comprising faculty offices, classrooms, labs, shower facilities, restrooms, student and faculty lounges. It also contains 15 class rooms that accommodate 368 seats that will be used on a rotational basis. The design-built team for the project was awarded to Highland Partnership/ Carrier-Johnson Architects. The total project budget comes in at approximately $ 31,500,000. The site was donated by WalMart to the Apple Valley Fire District. The college and the fire district entered into a community partnership to build a 41,000 square foot facility on the 9 acre site located at Navajo Road and Johnson Road North of the Apple Valley Airport and adjacent to the WalMart 1.3

million square foot distribution center. The building will have a 230kW solar photovoltaic (PV) system, consisting of rooftop panels and solar covered carports. The PV system will provide up to 80 percent of the buildings total electricity demand. The building will also be certified at a LEED Gold level. LEED is a third-party certification program and the nationally accepted benchmark for the design, construction, and operation of high-performance green buildings. The construction phase of this facility is estimated to produce a one-time economic impact of $73,628,000. The project also achieved the Victor Valley College Board of Trustees state goal to employ 83.60% of total work force from local labor. The Public Safety Training Center is a Measure JJ bond-funded project that was approved by the voters in November 2008.

The facility, designed specifically for public safety training, will incorporate advanced technology; such as high speed WiFi, interactive video, a video production lab, Mac and PC computer lab. The complex contains a five story fire burn tower, 4 burn rooms plus 2 class A burn rooms, prop yard, collapse building structure, four double length lane fire garage, a rail tanker car, HD video surveillance, SimMan (3G portable wireless high fidelity manikins), a tactical indoor 9-lane shooting range with livefire and virtual training simulation utilizing a MILO HD video tactical shooting simulator. The shooting range The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

18

A quarterly economic overview

High Desert Transportation Update By Jane Dreher, SanBag Public Information Offices

San Bernardino Associated Governments, known as SANBAG, is the council of governments and transportation planning agency for San Bernardino County. SANBAG is responsible for cooperative regional planning and furthering an efficient multi-modal transportation system countywide. SANBAG serves the 2.1 million residents of San Bernardino County. As the County Transportation Commission, SANBAG supports freeway construction projects, regional and local road improvements, train and bus transportation, railroad crossings, call boxes, ridesharing, air quality, and congestion management efforts, and long-term planning studies. SANBAG administers Measure I, the half-cent transportation sales tax originally approved by county voters in 1989 and reapproved to extend from 2010-2040. SANBAG looks at the transportation needs of the entire county and breaks into specialized committees, such as the Mountain Desert Committee. Following is a summary of some of the projects being planned for the High Desert.

I15 - LaMesa/Nisqualli Interchange with the balance being funded by the City of Victorville, development impact fees, the State Transportation Improvement Program, and federal demonstration funds. High Desert Corridor In recent months, efforts have been combined on this major project

connecting San Bernardino and Los Angeles counties with the ports of Los Angeles and Long Beach. Los Angeles County Metropolitan Transportation Authority (Metro) is working on a Memorandum of Understanding (MOU) with the High Desert Corridor Joint Powers Authority (HDCJPA), the Southern California Association of Governments (SCAG), the San Bernardino Associated Governments (SANBAG), the State of California represented by the Department of Transportation (Caltrans), the County of Los Angeles and the County of San Bernardino represented by their respective Departments of Public Works, and the Cities of Lancaster, Palmdale, Victorville, Adelanto and the Town of Apple Valley for the environmental clearance of the HDC. In April 2010, the Metro Board authorized entry into a MOU. Additionally, Caltrans will serve as the lead agency for the environmental clearance. In October 2009, the Board

LaMesa/Nisqualli Road Interchange The LaMesa/Nisqualli Interchange will begin construction in fall 2011. The construction management contract will be awarded in June and the construction contract will be awarded in September 2011. This highly-awaited project will be both an alternative to Bear Valley Road and connect two population centers of the City of Victorville.

Proposed High Desert Corridor

With a $7.5 million allocation of State Transportation Program Local Fund, SANBAG has now fully provided the $31.5 million public share of the LaMesa/ Nisqualli Interchange construction. The total cost of the project is $96 million, continued on page 19 The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

19

A quarterly economic overview

High Desert Transportation Update Continued

approved the HDC as one of the six high potential projects for Public Private Partnership (PPP) delivery method. The project planning includes the construction of a new interchange near Falchion Road in the City of Victorville along with a new four-lane expressway, from the east side of Apple Valley to the existing US Highway-395 south of Air Expressway. I-15/I-215 Interchange in Devore In July 2010, the California Transportation Commission (CTC) selected the $359 million Devore Interchange Reconstruction project as one of 10 road construction projects statewide that Caltrans can construct using a streamlined project delivery method known as design-build. In addition to approving the project for design-build, the CTC approved a $118 million allocation from the State Highway Operation and Protection Program (SHOPP) for the project. Design-build is a project delivery method in which the owner – in this case Caltrans – contracts with a single entity for both design and construction services for a project. Traditionally, public agencies contract with one company for design and a separate company to construct. However, Senate Bill 4 (SBX2 4), which was adopted last year, allows

Caltrans to use design-build on up to 10 transportation projects. The junction of Interstate 15 and Interstate 215, known as the Devore Interchange, is the worst bottleneck on I-15 in the County of San Bernardino. It was originally constructed in 1969. Today, the interchange handles an average of 160,000 vehicles a day, including about 21,000 trucks. This project will benefit freight traffic, recreational travelers, and High Desert commuters. It is anticipated that an improved Devore Interchange will spur economic growth and improve the quality of life for all Southern California motorists traveling to the High Desert, Las Vegas, and beyond. Drivers currently need to make multiple lane changes to stay on I-15 as they pass through the interchange. The project proposes to reconstruct the interchange to allow I-15 to be the main movement for vehicles. Drivers on I-215 would merge on and off I-15 from the righthand side of the freeway. This design will allow drivers to travel through the interchange without having to change lanes or lose lanes in the process. The design-build approach will accelerate the start of construction by approximately 17 months, allowing it to start in June 2012, as opposed to

Devore Interchange construction to start in June 2012

November 2013. Not only will this project improve traffic flow at the I-15/I-215 Devore Interchange but it includes reconnecting the historic Route 66 that currently dead-ends on both sides of the interchange. The project’s total cost estimate of $368 million for the anticipated locally-preferred alternative includes 15 bridges, roadbed widening on two Interstates, improvements to local arterials, environmental mitigation, and major drainage improvement. Yucca Loma Bridge and the Yucca Loma Corridor This fall, construction is expected to begin on the Yucca Loma Bridge project over the Mojave River. The final right of way is being obtained from the many agencies that control the waterway. Once finalized, proposals will be sought for construction management and construction. The Yucca Loma Bridge will connect Yucca Loma Road on the Apple Valley side with Yates Road on the Victorville side. The new roadway and bridge would carry vehicles, bicyclists, and pedestrians. It will also intersect the City of Victorville’s proposed Riverwalk bicycle/pedestrian project, providing an alternative means of transportation along the river towards Bear Valley Road and Victor Valley College. Apple Valley is the lead agency on the bridge project but has also been working with the City of Victorville and San Bernardino County to complete the Yucca Loma Corridor to connect the bridge with Hesperia Road and the planned LaMesa/Nisqualli Interchange. This project will create an alternate east/ west corridor that will provide congestion relief for the I-15 Interchanges at Bear Valley Road and Palmdale Road, as well as State Route 18 at D Street in Victorville. In addition, the Yucca Loma continued on page 20

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

20

A quarterly economic overview

High Desert Transportation Update Continued

In January 2011, VVTA launched a new bus service that provides a link between Victor Valley and Barstow. Called the “B-V Link,” the new service makes several round trips between Barstow and Victor Valley three days of the week.

Yucca Loma Bridge Corridor to begin construction in the Fall of 2010 Bridge will provide the Town of Apple Valley with another crossing over the Mojave River and connect the urban/ commercial cores of Victorville and Apple Valley. Starting at the corridor’s east end, the bridge will connect Yucca Loma Road to Yates Road, which will then connect to Hesperia Road via a new grade separation/bridge over the Burlington Northern Santa Fe railroad tracks. Drivers will then have easy access to Interstate 15 using the new interchange at LaMesa/Nisqualli Road on the west end of the corridor. Ranchero Road Interchange The proposed Ranchero Road Interchange at Interstate 15 is located in the City of Hesperia, approximately 1.78 miles north of the existing Oak Hills Road Overcrossing and approximately 1.42 miles from the existing US395 Connection Overcrossing. The Ranchero Road Interchange will include the construction of ramps to serve four entrance and exit moves, construction of a new overcrossing structure at the I-15 freeway to provide east/west connections, and realign the frontage roads—Caliente Road and Mariposa Road—on either side of the freeway.

The cost is anticipated at $80 million. Construction is scheduled to begin in Spring 2012. The City of Hesperia is the lead agency.

The B-V Link was originally created to provide Barstow residents a means of transportation to access oncology and other specialized medical services in the Victor Valley. The service evolved into a broader transit service to serve a variety of purposes.

US-395 widening Identification of funding for a phase of this project is a focus of SANBAG’s efforts for the High Desert. This project will widen US-395 from Interstate 15 through Desert Flower in Adelanto, from two to four lanes, with left-turn pockets and standard shoulders. This project will also widen or replace the structure over the California Aqueduct. The environmental document phase was completed in December 2009 and the project has entered the final design phase. The 12.5 miles of the project have been designed to be constructed in phases. Victor Valley Transit Authority The Victor Valley Transit Authority (VVTA) is one of five transit agencies that SANBAG supports countywide and provides local bus service for the communities of Adelanto, Apple Valley, Hesperia, Victorville, and unincorporated areas of the Victor Valley.

Ranchero Road Interchange

New Barstow to the Victor Valley link now runs three days a week

This new intercity bus service operated by VVTA runs three days a week (Monday, Wednesday, Thursday), making three continuous loops per day between 7:50 a.m. to 6:00 p.m., with multiple stops in Barstow and the Victor Valley. The service is available to the general public and can be utilized by residents in all communities at various points. SANBAG obtained funding for the B-V Link service from a federal Congestion Mitigation and Air Quality (CMAQ) grant as a three-year demonstration project. The grant will cover more than $70,000 per year for the cost of the route, with rider fees anticipated to cover the remaining $20,000 needed to cover the $90,000 annual expenses. One-way fares are $6, or $3 for seniors and disabled individuals. For routes, schedules, and additional information, go to: www.vvta.org/bvlink.html

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

21

A quarterly economic overview

THE DIFFERENCE A YEAR MAKES By Bob Thompson Advanced Listing Services

It is a surety that one day the current troubles in the real estate market will end and appreciation will replace the pervasive depreciation that rules today’s market—but not today. But if not today, when? Guessing when a market will turn for any good or service is an imperfect exercise due to the number of independent variables that affect the final outcome. The changes and differences in this myriad of small variables make up the large overall swings that become apparent only after they have occurred. One such indicator is the supply of properties on the market, or current listings. Observe Table 1. In April of 2010 there were 1,554 units of supply on the market in the listed cities. This year there are 76 fewer or 1,478. This informs us that these markets are highly predictable as to supply from year to year. Notice that the number of listings has declined 5%; however the number of REO listings have declined 17%. We can also see the large differential in prices between non REO in 2010 and non REO 2011. The absolute level of median price declined about 12%. REO

declined about 15%. The difference between the two in 2010 was 31%, in 2011 about 34%. What can be concluded from this narrow study?

from negative to positive. This tipping point should not be expected to occur in the near term as markets move slowly but inexorably.

(1) REOs as a percentage of the total market fell about 17% between the two years. (2) In 2010, 33% of the market was REO. Today it is about 29%. (3) REO, because of price differentials, exercises a strong negative influence on the price line. (4) REO, while declining, is doing so at a slow pace. (5) REO will continue to populate the market in high numbers for the next 1-2 years. (6) Consequently, from a supply perspective, prices will remain weak and in decline into the foreseeable future. The difference a year makes is that the end of the beginning has begun. REO inventories must decline to achieve price stability, and they are. As REO inventory declines, a tipping point will be reached and prices will firm and turn

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

22

A quarterly economic overview

San Bernardino State of the County By Mary Jane Olhasso

On April 6, the County of San Bernardino presented its State of the County address to close to 1,000 business, community, and government leaders. The address included information gathered as part of the Vision Process. The County-wide Vision Process included thousands of online surveys, community meetings held throughout the county’s 24 cities and towns, as well as meetings with more than 25 business roundtables, including retail, environment, home building, military, education, health care, and commercial real estate, among others. The Vision Process results outlined the county’s priorities as jobs, economy, education, housing, public safety, transportation, quality of life, environment, health care and image. In an era of limited and competing resources, the county is striving to prioritize its resources wisely and invest its energies in aligning priorities with the collective vision for the county. Business development, infrastructure enhancements and economic growth can complement – not compete – with the region’s valued natural environment. The county recognizes that a strong balanced economy must be built on adequate physical and social infrastructure. While major national media outlets such as Forbes recognize the county for its pro business climate, the County’s Board of Supervisors are aware that they must provide stable leadership, predictable decision-making, and timely processing to attract and retain a wide range of employers who can offer high quality jobs that match the skills of the population in our area.

When you consider the current state of the economy, it is apparent that the number one priority should be jobs. However it is not sufficient to simply address unemployment, the county must also lay a foundation for future communitywide prosperity, with education as its cornerstone. The local economy will not improve nor grow any faster than the skills and abilities of its people. In a fast-paced regional, national, and global competitive economy, the county must fight to maintain its competitiveness. The region benefits from an innovation corridor of 18 colleges and universities. Since 2003, the proportion of residents over 25 with a bachelor’s degree or higher is rising at a faster rate than the state and the nation. This fact coupled with a focus on industry-specific job training, the county is working toward preparing its workforce for the jobs of today and the opportunities of tomorrow. To better understand the region’s job growth potential, consider the fact that between 2000 and 2008 San Bernardino County experienced 47 percent growth in professional, scientific, and technical services. In the next cycle, renewable energy, mining, advanced manufacturing, tourism, healthcare, and goods movement are only a few of the employment opportunities the county is poised to capture.

benefits from having a relatively young population with a median age of 31 and a workforce that numbers close to 1 million. Its strategic location in the center of Southern California puts its residents and businesses at the center of a consumer market of 22 million people. Finally the county’s wide range of affordable housing creates an attainable lifestyle. These advantages coupled with unparalleled recreation and a true county-wide sense of community make San Bernardino County a place where the American dream can come true. These advantages also provide for the opportunity to create a “complete county.” A “complete county” is one that affords all citizens an opportunity for healthy lifestyles, strong public safety, employment opportunities, a range of educational opportunities, and quality amenities. The County of San Bernardino will become greater than the sum of its parts by recognizing, embracing, and celebrating the region’s cultural, economic, and geographic diversity and working together to promote its many strengths.

Fundamentally, the county has many advantages. It benefits from a population that ranks the region as 5th largest county in California and 12th largest county in the US. It also

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

23

A quarterly economic overview

Applying Lessons Learned from Our Past By Joseph W. Brady, CCIM, SIOR and Susan Bloomfield

As we turn the corner on the second quarter of 2011, any indications of recovery are met with trepidation and a great deal of speculation about our economic future. The last three to four years has challenged even the most seasoned veterans of economic downturns and the High Desert commercial real estate market was hit especially hard as most tertiary markets were. But we have had plenty of experience with boom-busts and there is a lot to learn from history. As the saying goes, “The more things change, the more they stay the same” and the following economic cycles throughout history make that statement one of the few certainties we can rely upon:

following a period of great economic growth. With investors buying stock with borrowed money, as the market began to spiral downward, stockholders had to sell stock rapidly to make margin calls. The market dropped 12.8 percent with unemployment skyrocketing to 17 percent. 1945-1970: Economic Growth The end of World War II ushered in economic growth that lasted nearly 25 years even with short and shallow recessions in the 1950s and 60s. With Kennedy’s Revenue Act of 1964, the economy was bolstered and continued to gain momentum.

1929-1945: The Great Depression

1970-1982: High Oil Prices & Stagflation

On what is now referred to as Black Tuesday, October 29th, 1929 marked the beginning of the Great Depression

The 70s delivered a decade of economic struggle. With an oil embargo brought against the U.S. by Saudi Arabia and

Industrial Snapshot

City Adelanto Apple Valley Barstow Hesperia Victorville Unincorporated Totals

RBA 2,852,876 1,943,602 1,127,975 4,069,620 7,208,829 210,456 17,413,358

 Available SF  483,536

              66,537            319,444            313,800            891,800               16,000 2,091,117

 2010 Construction  Availability Rate                          10,000 16.9%                                ‐ 3.4%    ��                           ‐ 28.3%                                ‐ 7.7%                        850,000 12.4%                                ‐ 7.6% 860,000 12.0%

% of Total  Commercial Base 16.38% 11.16% 6.48% 23.37% 41.40% 1.21%

Average  Asking  Average  Rate Asking Price $0.44 $60.00 $0.53 $85.00 $0.42 $38.00 $0.53 $74.00 $0.62 $83.00 $0.30 $0.00 $0.47 $56.67

% of Total  Commercial Base 1.80% 19.96% 7.99% 19.33% 49.52% 1.40%

Average  Asking  Average  Rate Asking Price $0.00 $0.00 $1.18 $205.00 $1.02 $89.00 $0.97 $151.00 $1.20 $144.00 $0.00 $159.00 $0.73 $124.67

% of Total  Commercial Base 1.43% 19.29% 15.70% 17.50% 42.56% 3.52%

Average  Asking  Average  Rate Asking Price $1.03 $0.00 $1.16 $183.00 $0.99 $123.00 $1.22 $196.00 $1.45 $180.00 $1.34 $49.07 $1.20 $121.85

Office Snapshot

City Adelanto Apple Valley Barstow Hesperia Victorville Unincorporated Totals

RBA 92,850 1,028,140 411,531 995,698 2,550,919 71,986 5,151,124

 Available SF   2010 Construction  Availability Rate                      ‐                                ‐ 0.0%               81,839                            5,000 8.0%               53,170                                ‐ 12.9%               70,779                                ‐ 7.1%            291,640                                ‐ 11.4%                 3,274                                ‐ 4.5% 500,702 5,000 9.7%

Retail Snapshot

City Adelanto Apple Valley Barstow Hesperia Victorville Unincorporated Totals

RBA          239,158      3,221,292      2,620,925      2,922,226      7,106,856          587,246    16,697,703

 Available SF               18,500              81,825            371,594            292,790            675,870              35,540 1,476,119

High Desert Average Availability Rates Q2‐2011 Q4‐2010 Industrial 12% 13% Office 10% 9% Retail 9% 12%

 2010 Construction  Availability Rate                                ‐ 7.7%                                ‐ 2.5%                            4,200 14.2%                            8,400 10.0%                            8,000 9.5%                                ‐ 6.1% 20,600 8.8%

High Desert Average Lease Rates Q2‐2011 Q4‐2010 Industrial $       0.47 $       0.41 Office $       0.73 $       0.75 Retail $       1.20 $       1.23

High Desert Average Sale Prices Q2‐2011 Q4‐2010 Industrial $    57.00 $    59.00 Office $  125.00 $  105.00 Retail $  122.00 $  134.00

OAPEC early in the decade and Iran toward the end, a slow economy already fraught with stagflation was further aggravated. 1982-1987: Greed is Good A period of marked affluence and Wall Street success, this decade is well known for hostile takeovers and corporate raiders as well as leveraged buyouts or LBO’s allowing for private equity firms to purchase profitable companies with little to no capital, creating substantial wealth. 1987-1988: The Bubble Bursts The stock market experienced another crash known as Black Monday where the Dow Jones Industrial Average fell 508.32 points leading to severe job losses on Wall Street. Although the single largest crash experienced on Wall Street, the economy recovered fairly quickly. 1989-1991: Savings & Loan Crisis In an attempt to prevent failure, the government set about to rescue the S&Ls from extinction through deregulation. However, in a high-risk market environment, S&Ls had no ability to survive and the government spent billions trying to stop what was inevitable. Compounded by a real estate bust and Gulf War costs, the US again experienced a recession in the early 90s. 1995-2000: The Dot-Com Bubble Bursts Speculation about the Internet and its impact on business ushered in a new period of excitement and deeply flawed business ventures. As thousands of Internet based start-up companies cropped up daily so did willing investors looking to create generational wealth. But as we learn time and again, what goes up must come down and holders of over –valued stock rushed to sell, creating another busted bubble in which continued on page 24

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

24

A quarterly economic overview

Taking the Waste out of Wastewater

By Ryan Orr,Victor Valley Wastewater Reclamation Authority Many High Desert residents don’t realize that the water they’re using to irrigate their gardens and lawns, and that municipalities use to irrigate parks, schools and golf courses, is perfectly safe for drinking. At the Victor Valley Wastewater Reclamation Authority, we believe this precious resource should be conserved for just drinking and other uses that will sustain our water resources. The agency is introducing two new facilities, that when built out, will provide more than four million gallons of treated, reclaimed water to irrigate nearby parks and golf courses. This much-needed benefit will not only help conserve water in our drought-ridden region but also create extra capacity in VVWRA’s currently crowded sewer pipe system, allowing for continued responsible growth and making way for

new businesses to come to the Victor Valley. “The Agency has been working on these projects for close to 20 years, and we’re very close to getting them built,” said Logan Olds, General Manager of VVWRA. “This will be an invaluable resource for our growing communities.” Currently less than one half percent of our basin’s water demand is met by reclaimed water – being used at Westwinds golf course in Victorville. These facilities will serve to sharply increase that percentage and finally put us on an even playing field with other communities in the Inland Empire that have been utilizing this resource for years. Building these facilities is an important part in both handling wastewater flow and sustaining local water supplies to build a sustainable path for the future of the Victor Valley. Recycled water equals greener parks at lower costs; VVWRA’s Recycled Water Program needs the Valley’s support.

Applying Lessons Learned from Our Past Continued

many lost their jobs and wealth. 2001-2002: Greed Makes a Come Back Corporate scandals rocked the early 2000s and creative accounting brought down corporate giant Enron and WorldCom. This period marked the beginning of CEO accountability and indictments. As corporations were scrutinized, the U.S. was further rocked by the tragedies of September 11, 2001 and terrorism and Homeland Security forever changed the American landscape. 2008-Present: The Credit Crisis Some call this the ushering of the new and harsher economy after a long period of prosperity. Not since the Great Depression has the globe been plunged into a period of great uncertainty. A large portion of U.S. mortgages issued were sub-prime with adjustable rate loans. As interest rates rose with loan resets, delinquencies started to soar. As investors lost faith in the declining value of mortgage-backed securities, credit lending practices were tightened causing a lack of liquidity and the dominos began to fall. Lehman Brothers and Bear Stearns are just two giants that permanently failed. So What Is Next? Current market data doesn’t provide enough clarity as to whether the High Desert is yet experiencing a true recovery. What does appear to be back is increased confidence spurring greater interest from users and investors in quality product. So whether or not we are in the process of recovery or on the verge of doubledip, investments based on unsound fundamentals and irrational exuberance will happen time and again. What we predict before us must be based on lessons from the past.

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

25

A quarterly economic overview

Adelanto City Update

By Mike Borja, Management Analyst City of Adelanto Adelanto has been greatly impacted by the recent economic downturn; however some projections indicate that the city will rebound. The current situation of the City of Adelanto: • Adelanto has great potential • The city has improved its image • The city has taken on an aggressive approach to attracting new business • Adelanto has a new economic development plan Ultimately, the city has to improve its economic position in the marketplace and establish a benchmark from which to grade the effort moving forward. The long-term goals include: elevated image, awareness, and overall appeal of the City of Adelanto. Our marketing objectives follow accordingly: • To generate private development revenue and community support in implementing a long-range economic strategy plan

• Improve the quality of life for our residents • Improve the perception and success of local business and potential redevelopment partners

developed a consistent, brandedidentity program that builds on Adelanto’s strengths, improves its competitive position in the future and highlights a city on the move.

Vision Adelanto is a city of open spaces, open minds and open hearts. It is a welcoming place of family values, friendly businesses and progressive leadership where the possibilities are unlimited.

Adelanto, The Possibilities Begin Now New dynamic planning initiatives, a progressive leadership, a wealth of branded assets, and a willingness to move forward, has the potential to demonstrate that Adelanto truly does mean progress. The city has the ability to engineer and design the next chapter of the Adelanto story – A story about unlimited potential, and a forward-thinking combination of people with a plan to make it happen.

Key Citywide Strategies Adelanto has adopted a vision to provide a framework for effective and efficient decision making and coordination between policy makers, city departments, business leaders, and the community. We have integrated the economic development strategy into the shortterm (0-2 years), mid-term (3-5 years) and long-term planning, budgeting, redevelopment, and capital improvement process. The city has

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

26

A quarterly economic overview

Town of Apple Valley City Update By Kathie Martin Marketing and Public Affairs Officer

Apple Valley RDA Gets the Job Done Apple Valley Commons, Jess Ranch Marketplace, Walmart Distribution Center, and more than 5600 jobs— these are just a few of the successes from the effective administration of Redevelopment Agency (RDA) dollars in the Town of Apple Valley. Facing a chronic budget crisis, however, the State of California is questioning the benefits of RDAs and is threatening to dissolve them entirely. As a result, critical projects and job cultivators would come to a screeching halt if the ill-advised proposal comes to pass. Concrete Results and Local Investment Apple Valley has made wise use of this important financial resource. Since 2004, the Town has invested $55 million of RDA funds, generating $394 million in project expenditures by our development partners. Using the State’s Department of Finance IMPLAN Job Calculator model, the ultimate economic impact from our initial investments is $739 million. This means each $1 million invested has resulted in a $13.4 million economic impact. The Town can attribute over 5600 jobs to our RDA investments; a figure that translates to only $9749 spent per job created! RDA investments bring jobs, retail and industry, such as Apple Valley Commons and Jess Ranch Marketplace, which provide shopping convenience to our residents and sales tax to our community. The largest project, providing as many as 1100 jobs, is the Walmart Distribution Center. Built in 2004, it was the first recipient of RDA funds which were used to acquire a

portion of the property. The investment further paved the way to the formation of the North Apple Valley Industrial Specific Plan (NAVISP), the Town’s future economic engine. The Town was also fortunate to have the opportunity to fund a municipal animal shelter as well as a public works facility (currently under construction) through the redevelopment mechanism. The facilities fall squarely within a redevelopment area. The surrounding light industrial area will be served well with the location of these well-designed municipal buildings. Studies have shown that such uses raise the visibility and property values of surrounding development. Backbone to Growth Most RDA funded projects focused on the installation of backbone infrastructure. Roads, storm drains, and traffic signals are among the major public facilities that have been built. “We’ve barely tapped the potential of some of these investments,” explains Mayor Scott Nassif. “Using RDA dollars lets us get the backbone system in place, laying the groundwork for all future development to an area.” Oftentimes it is the added cost of offsite improvements that will break a potential development project. By providing RDA dollars, the Town assists business development by defraying the overall cost of the project, yet the Town still owns the infrastructure. These public improvements help the community as a whole, providing improved traffic flow, as well as incentivizing commercial development that may not have happened otherwise. The developers contribute as well, with RDA investments representing just a

percentage of the cost of improvements. “We will see a continued return on our investment for years to come,” added Mayor Nassif. “When the economy picks up steam again, developers will turn to Apple Valley and we’ll be ready for them.” What We Risk “If the RDA goes away, so does Yucca Loma Bridge,” explains Nassif. “This is the Town Council’s number one transportation priority in Vision 2020, and preliminary work in the riverbed has started.” Apple Valley’s match of $13 million towards the $55 million cost of phase one is budgeted to come from RDA funds. Should the State be successful in its bid to eliminate RDAs, the Yucca Loma Bridge work will come to a halt, along with this effort to relieve traffic congestion across the Victor Valley. Equally as critical are the planned infrastructure improvements for the Town’s number one economic development priority, the 5100-acre NAVISP area. Construction of the required backbone infrastructure would already be underway if not for the 2010 State raid of almost $4 million from AVRDA. At build-out, the NAVISP is projected to generate 38,000 jobs and establish itself as the Town’s economic engine for the foreseeable future. “California’s economic crisis can only get better through job creation and increased spendable income,” said Nassif. “Eliminating RDAs eliminates a critical tool that municipal agencies can use to that end. The State’s proposal will certainly only cause what it seeks to prevent.”

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

27

A quarterly economic overview

Is the Recession Over? It’s Beginning to Look Like It. Barstow City Update

By Ron Rector, Community & Economic Development Director, City of Barstow The city of Barstow is excited to see a renewed interest in the industrial, office, and retail sectors. It has been a long dry spell – for most. The city is experiencing several positive events throughout the community, which signals a positive uptick in the economy. As an example: Two new national retailers, Dollar General and Family Dollar, have chosen Barstow to set up their business. Dollar General will operate out of a new 12,000 sq. ft. facility and Family Dollar will move into an existing 14,000 sq. ft. facility. Church’s Chicken is taking a location in the city to serve its famous chicken meals. A new Subway and Java Juice will open soon on Barstow Road and the I-15. Yoshinoya and a Togo’s (Great Sandwiches) are in final plan check. Another sign of the city’s improved economy is in new home starts. Williams Homes, Inc. out of Santa Clarita is completing two models for a 58 lot subdivision on Mural Drive south of Rimrock Road. The subdivision is named “Falcon Ridge.” The development will offer three new home sizes: 1,465 sq. ft., 1,580 sq. ft. and 1,810 sq. ft. The Historic Harvey House, offering executive office space, is almost full. The current tenants are: Pace Services, Securitas, Terra West, Barstow Industrial Supplies, County of San Bernardino, URS, Eclipse and soon – the Federal Aviation Administration. The Harvey House is also home to the Barstow Area Chamber of Commerce and Visitor’s Bureau, Western American Railroad Museum, and Route 66 Museum. The Harvey House has four 1,100 sq. ft. suites left, so hurry in while the supply lasts.

The City of Barstow celebrated a community milestone in September 2010 with the groundbreaking of the new 30 bed acute-care Barstow Community Hospital. The facility, currently under construction, is expected to open its doors towards the end of 2012. Layton Construction, an Irvine-based general contractor, has completed the preliminary construction for sewer, storm drains, retaining walls, steel structure frame, and the helicopter pad. The structure is now taking shape with completion anticipated for fall of 2012. On March 21, 2011, the Barstow City Council approved an Energy Services Contract with Johnson Controls, Inc., who will implement an energy and cost savings project for the city. The City of Barstow is “going green” by incorporating various methods of energy conservation at city-owned facilities, including water conservation at several parks, replacement of natural gas driven motors with electric ones, replacement of traffic signals with LEDs bulbs, installing drought resistant landscaping at City Hall, and adding solar technology at the city’s LNG/CLNG fueling station and the Senior Citizen’s Center facility, to name a few. The energy cost savings will pay for these enhancements.

parking ratio of 5:1000. Significant renovations to the property were recently completed, which included the complete reconstruction of the parking lot and site landscaping. Barstow Community College plans to open its 40,000 sq. ft. Performing Arts Center in June of 2012. The center will offer seating for 700. A new Learning Resource Center was completed in 2009 to accommodate a growing student population. The Barstow City Council approved a $13 million dollar Capital Improvement Program for the reconstruction of numerous city streets. To date, the city has completed reconstruction of over 5.6 miles of local streets with 1.8 miles planned for FY12. The city’s Public Works Department has also slurried over 10 miles of city streets; further improving the appearance of the city. As can be seen, the city is well positioned to accommodate the exciting new growth coming to the community. If you would like to learn more about “California’s Crossroads of Opportunity,” please visit the city’s website at: www.barstowca.org or contact Ron Rector at: (760) 255-5151.

The Barstow Mall is the new home to the County of San Bernardino. The County moved into its newly renovated 37,500 sq. ft. space in January 2011. The Barstow Mall offers 141,819 square feet of rentable space with an approximate

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

28

A quarterly economic overview

Primed and empowered for prosperity, Hesperia courts new business and industry Hesperia City Update By Lisa K. LaMere Economic Development Analyst

With strong e c o n o m i c indicators in its favor and having developed a diverse toolkit of business friendly programs and strategies, the economic development team for the city of Hesperia is primed for prosperity. They’ve done their homework and they’ve rallied the economic fates and forces and as a result, they now have a multi-tiered selling proposition for business that’s virtually impossible to dismiss: A strategic location that offers land, infrastructure, affordability and opportunity. Hesperia is located along both the I-15 and SR-395 highways, in the expanding High Desert region of Southern California. Framed by the San Gabriel and San Bernardino mountain ranges, this gateway to the high desert features a temperate climate with clean air, abundant sunshine and large tracts of available land. With 17 miles of freeway frontage, Hesperia offers easy access to 366,000 High Desert residents and proximity to 20 million residents in Southern California. The region is becoming a major distribution and logistics hub serving one of the world’s largest international trade areas, with the nearby Southern California Logistics Airport and highly efficient freight rail lines that run through the city and serve Ontario, San Bernardino and LAX airports as well as the ports of Los Angeles and Long Beach. From Hesperia, distributors can transport cargo by truck to 11 Western states within 24 hours.

Impressive incentive programs and full access to the city’s business development brain trust. In 2009, the city’s economic management team seized two highly prized competitive advantages to add to Hesperia’s business development arsenal. Designation of much of the city (30 square miles) as a California Enterprise Zone means that businesses currently located or newly locating “in the zone” qualify for substantial benefits and incentives. These include an array of cost-savings and advantages, such as hiring and wage credits, net operating loss deductions, business expense deductions, sales or use tax credits, net interest deductions on business and mortgage loans, and even bidding preferences in specified state contracts. These benefits can be quite lucrative, with reductions in the cost of doing business ranging from the tens to the hundreds of thousands of dollars annually. A second state designation has targeted Hesperia as an area incentivized to promote recycling and reduce landfill waste. The Hesperia Recycling Market Development Zone combines state benefits, such as below marketrate loans, with innovative incentives offered by the city. In addition, some participating businesses may receive market identification and research, business planning, marketing, and technical assistance. In a dauntless quest to expand business and create jobs for Hesperia, a team of economic development experts leaves no stone unturned in ferreting out programs and advantages for businesses. With expert knowledge of a wide range of incentive and assistance tools available

from the city, the state and even from the federal government, well-informed and motivated management advisors are available to provide assistance on an individualized basis to help executives identify and navigate the maze of opportunities available, but perhaps unknown, to them. There also are additional programs targeted specifically to brokers, franchisees, and restaurateurs. Strong economic indicators and a track record of recent success. Regional economic indicators support the premise that Hesperia is poised for the next big wave of opportunity. According to the 2010 San Bernardino County Community Indicators Report, since 1990 the region has demonstrated a 300 percent growth in business and professional services, 180 percent growth in logistics and distribution, and 180 percent growth in wholesale trade. A growing labor force in Hesperia has a younger median age (31) than both the state and national averages. More than 70 percent of residents are homeowners and average household income is about $66,000. Hesperia offers a diversified workforce, with about two-thirds of residents having some college education and eight percent have bachelor degrees or higher. A relatively stable housing market has retained an affordable pricing index -according to the California Association of Realtors, the most affordable in California -- and a median home price of $121,000. Proactive and full of foresight, the city of Hesperia has since 2008 been identifying and purchasing abandoned and foreclosed residential properties through a $4.6 million grant from the U.S. Housing and Urban continued on page 29

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

29

A quarterly economic overview

Hesperia City Update Continued

Development (HUD) Neighborhood Stabilization Program. Currently the city is rehabilitating the homes to prepare them for sale or lease. Even during the economic downturn of the recent past, Hesperia has demonstrated strong growth and astute regional planning, keeping its ribboncutting shears impressively honed with 29 commercial openings over two years. Last fall, The High Desert Gateway Center, a 500,000-square foot retail center, opened and now features 18 tenants, among them a Super Target, Marshall’s, Farmer Boys and Golden Corral restaurants, and Ross Dress for Less. Sophisticated, integrated infrastructure and resources. Businesses rely on sophisticated infrastructure and Hesperia has it in spades. Transportation improvements are planned for I-15, with one new interchange planned and one new underpass approved and funded in Hesperia city limits. Caltrans also is in the planning stages for a High Desert Corridor freeway, which will create a 63-mile link from I-15 to I-5. Hesperia is ideally situated near the Southern California Logistics Airport, located just 18 miles up the highway. Since two major freight rail lines pass directly through Hesperia, the city has secured a $2 million federal grant and is currently developing almost one mile of industrial rail lead track and a parallel runaround track. Scheduled for completion next year, the industrial rail will provide outstanding access for 200 acres of adjacent industrially zoned parcels and is expected to stimulate development of more warehousing and distribution centers near I-15. A team trans-load facility also is planned to make rail accessible for small businesses

throughout the region that will now be able to ship and receive goods by rail. With water shortages projected throughout the state by 2020, the Victor Valley Wastewater reclamation Authority has developed innovative strategies to efficiently use and reuse water for sustainable living. Pipelines are currently being upgraded and Hesperia is one of two locations where a new local sub-regional treatment facility will be constructed. A highly motivated economic development team working for business. The Hesperia economic development team is vested in the success of existing and prospective businesses. They have worked hard to develop a unique and powerful toolkit of benefits and programs to offer business and industrial clients the greatest practical incentives for choosing this vibrant market. The team daily asserts a strong commitment to growing the Hesperia economy by working to attract new businesses and development and in turn, jobs for residents. The department offers a standing invitation to business owners for individual counseling and advice as well as help determining eligibility for a range of city and state programs. Troy Litzenberger knows firsthand how invaluable access to that kind of knowledge and assistance can be to a small business owner. He is president of The Litzenberger Company, high-precision custom metal fabricators of prototypes for aerospace, professional motorsports and alternative energy. A cottage industry founded in 1985, Litzenberger located to Hesperia from Wrightwood three years ago. His business has been steadily expanding and about a year ago, he found himself looking at industrial space to buy or lease.

“We needed to take advantage of the opportunity to grow with these other companies we were working with and we were turning away work because our small staff was busy enough already and couldn’t assume responsibility for more work,” Litzenberger said. “I knew we needed more floor space, which would drive more employees and more production.” When Litzenberger found a 5,600-square foot property he wanted to buy and improve, his real estate agent suggested he contact Gwen Bedics, SBA relationship officer with Enterprise Funding, a nonprofit corporation that specializes in small business development loans in the Inland Empire. Together they crunched the numbers, but Litzenberger couldn’t quite qualify for the loan he needed. That’s when Bedics asked him if he had explored assistance from the City of Hesperia Economic Development Department. Says Bedics of Hesperia, “They’re the most business friendly of the economic development departments in the High Desert and the most aggressive. I can’t always help a borrower, but I can give direction and I know if somebody calls them, they will communicate with them. Whether they can help you or not, they will communicate with you.” So Bedics encouraged Litzenberger to contact Rod Yahnke, EDFP, Management Analyst with Hesperia Economic Development, who assessed the case and learned that if the city provided gap financing to help Litzenberger qualify for a loan to expand his business, the project could move forward. “Good businesspeople are worth the city’s investment, to put money into the deal, as in this case, to make the expansion possible,” Yahnke said. “A good, viable business helps bring more business to continued on page 30

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

30

A quarterly economic overview

Hesperia City Update Continued

the city, sales and property taxes and employment, one of the most important reasons we (redevelopment) are here. Housing grows, commerce grows, but it all starts with jobs.” “Rod was very helpful in securing additional funds and moving us through the process,” according to Litzenberger, who said two other team members, Tracy Wrigley, Community Development Supervisor and John Regner, Senior Plans Examiner, also helped lead him “almost by the hand” through the process, smoothing over onerous requirements and code issues. “It’s interesting, because I have a longtime friend who also is selfemployed, with a shop in LA County. He went through a similar process several years ahead of me. We compare stories and he’s got some horror stories to tell of all the things like zoning codes and landscaping that he was not expecting when he bought the company. “A lot of people have dreams and find a building that would work perfectly, only to find out after they buy it that it comes with a lot of control by the county and conditions that weren’t anticipated on the other end. In my situation, the city was interested in holding my hand and showing me what was required and ultimately all the things that were required were very doable.” Litzenberger said that working closely with Yahnke, Wrigley, and Regner, he was able to fully understand all the codes and requirements before purchase of the building. Because one of the threshold values driving code issues is calculated on the sizes of the building and the company, at one point Litzenberger was daunted to discover that he might have to invest an additional $80,000 to $100,000 to improve the property.

But the economic development team, thanks to a thorough understanding of its meaning and intent, was able to steer him clear of the stipulation, knowing that it was intended to address much larger companies. With pressing deadlines on current projects, Litzenberger delayed moving into the new building by several months. He said the city was helpful in allowing him to get a certificate of occupancy ahead of schedule so financing and tenant improvements could move forward and he could continue uninterrupted business operations. Taking occupancy in February, Litzenberger is thrilled with his new facility and the 1.25 acres of property on which it sits, providing more room to grow, both of which he says are far more than he expected when he set out to look for new shop space. “The value is so much better,” he said, “I am easily getting two to three times what my friend got in the Van Nuys area for the same price.”

in improving the city and facilities for residents. On all levels, you drive around and you think, ‘Here is a community that cares, right down to the city trucks that are well-maintained and presented nicely.’ It just looks like a city that cares about how they do business and how they present themselves.” The City of Hesperia has a wealth of resources, information, seminars, and individualized assistance available to businesses looking to expand or locate their companies in the gateway to the High Desert. For more information, visit www.cityofhesperia.us/econdev, call Steven Lantsberger, CED/EDFP, Deputy Economic Development Director at (760) 947-1906 or e-mail slantsberger@cityofhesperia.us.

So Litzenberger goes on to build the American Dream in Hesperia, a small business serving major players such as General Atomics, AeroVironment, Honda Performance Development (the research and development wing of Honda Motorsports), and Capstone Turbine. He says the area offers him the location, the labor pool, and the resources he needs now and into the future. “I have a very good impression with Hesperia,” Litzenberger says. “You just drive through town, and it goes beyond the city employees that I’ve dealt with. You get the impression that it is a well-established desert community but with a bit of an odd twist because the government here is interested in helping business and is very interested

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

31

A quarterly economic overview

Victorville City Update

By Bernie Calderon, Management Technician City of Victorville Economic Development Department SCLA The Southern California Logistics Airport (SCLA) has continued its growth as a business and logistics park. Over 2,500 jobs have been created since its inception. Major industry leaders such as Boeing, General Electric, Newell Rubbermaid, and Dr Pepper Snapple Group call SCLA home. Many companies continue to show their interest in SCLA as a potential home for their operations.

Exquadrum Exquadrum Corporation chose to move its operations to SCLA for its defense product testing. As a former air force base SCLA provided availability of bunkers, which was a major attraction for the company. Exquadrum has worked with the Department of Defense in the past on various innovations that are still used today. Products developed by Exquadrum include chemical and biological weapons neutralization, satellite thrusters, and non-lethal weapons technology. The company will be developing new decoy flares for defense aircraft. Decoy flares are installed on military aircraft for protection against anti-aircraft missiles. When a missile is fired the flares are deployed to ward off the missile and divert it from the aircraft.

Leading Edge Leading Edge Aviation Services has called SCLA its home since 2007. Leading Edge is the largest independent aircraft painting company in the world. With locations in Amarillo, TX Greenville, SC, and Kuala Lampur, Malaysia the company is truly global.

Leading Edge has been very busy with the mergers in the airline industry over the last few years. They are currently housed in two remodeled bay hangars that can store aircrafts as large as a 757. In March 2011, Leading Edge moved into another existing hangar at SCLA. The three hangars are in response to the growing demand for Leading Edge’s services. The company currently has over 300 employees with plans to hire more at its Victorville location.

SCLA School of Aviation In January 2011, the SCLA School of Aviation had its first graduating class of 43 students with full certification in general aviation mechanics and comprehensive power plant and airframe mechanical training. Some of the graduates have jobs awaiting them in SCLA with companies such as Pacific Aerospace Resource Technologies and Southern California Aviation. The school offers educational opportunities for local residents for entry level positions in the growing aircraft maintenance industry. The school also offers assistance with job placement.

One store will be opened in the Dunia Plaza retail center. The Dunia Plaza currently includes retailers such as Lowe’s, Kohl’s and Fashion Bug. Restaurant chains such as Applebees, Chili’s and Mimi’s Café are also located in the Plaza. The opening of Walmart in 2012 is a welcome addition to the Dunia Plaza to continue its growth as a retail destination in the Victor Valley. The second Walmart will be constructed on the northeast corner of Palmdale Road and Highway 395. The area has seen residential growth over the last few years and the Walmart center is needed to serve the surrounding neighborhoods. New retail and restaurants will be built around the center to create a viable retail development for residents in the western portion of Victorville. Both Walmart locations will include a retail component as well as a grocery section. Opening of the two locations is scheduled for early 2012. The retail growth within Victorville shows the economic vitality of the city and its ability to support retail centers.

Walmart Walmart has announced the opening of two new stores in Victorville. These locations will help serve the needs of the growing population of Victorville. Construction of these two Walmart stores will commence in 2011.

The Bradco High Desert Report 760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com


High Desert Report

PRESORTED STANDARD US POSTAGE PAID

A quarterly economic overview

P.O. Box 2710 Victorville, CA 92393-2710

VICTORVILLE, CA

Joseph W. Brady Inc., DBA The Bradco Companies, The High Desert Report, is a California Licensed Real Estate Broker No. 01057618

PERMIT #262

Learn why people want to live, work and do business in the High Desert l l l l l l l l l l l l l l

Factual economic information about the Inland Empire North/e corridor, including the cities of Adelanto, Barstow, Hesperia, and Victorville, the Town of Apple Valley, and northern San Bernardino County Published since May 1993 Sales and permit trends Economic analysis Updated overview of quarterly absorbency rates of commercial, industrial, and office space Free e-mail subscription with online registration at www.TheBradcoCompanies.com/register Affordable annual subscription of only $59.95 for four editions Each edition 24 pages Minimum of three (3) issues per year The most condensed, up-to-date, factual business information from highly respected professionals, effected property owners, investors, developers and lenders, local businesses, anyone with a vested financial interest in the High Desert Quarterly comments by Dr. Alfred Gobar, renowned real estate economist, Alfred Gobar Associates, (Anaheim, California) Packed with valuable information from expert contributors Published by Joseph W. Brady, CCIM, SIOR Nominated for small business of the year, Inland Empire North/e corridor region by the Inland Empire Small Business Association

SUBSCRIBE TODAY!

visit us at www.TheBradcoCompanies.com or call (760)

951-5111.


48th Edition of the Bradco High Desert Report