High Desert Business Journal by John Desrosiers

Vol. 4 No. 1

Frivolous Lawsuits Plague High Desert Over 75 businesses hit

High Desert businesses are under siege by ADA lawsuits stemming from a single plaintiff represented by an out-of-town attorney with a questionable history including ethics violations. See LAWSUITS Page 19

By: HDBJ STAFF REPORTS

More than 75 local businesses have Attorney Tim Taggart was been hit by a wave of lawsuits by admitted to the bar in 1976. out-of-town attorney, Tim Taggart, He has been suspended claiming violations of the Americans from the practice of law on with Disabilities Act, or ADA. On a number of occasions for behalf of Plaintiff Carl L. Barnum he various reasons, including has filed at least 75 superior court disciplinary actions by the lawsuits and 20 small claims actions State bar arising against numerous High Desert from a multitude of individuals and businesses claiming ethical violations. discrimination. Source: California Bar The Court docket shows lawsuits have been filed throughout the county including San Bernardino, Barstow and Victorville against numerous businesses in the High Desert. As many as 10 identical actions have been filed in a single day against different defendants. The complaints are verbatim identical in every case, with only the names changed. The allegations contain no specific defects but instead rely only upon vague and general references. The cost to our business community is substancial. According to business litigation attorney James Baxter, in order to effectively defend these actions defendants will need to pay attorney fees and there may be experts to retain, court costs paid, and even jury fees. If a business does incur the considerable cost to defend an action against there may be some recourse for attorney’s fees under limited circumstances, however, that requires even more time and expense for which the defendant may never collect. The complaints in Barnum’s actions seek damages of approximately

St. Joseph Health, St. Mary Prepares for Health Care Reform By St. Joseph Health, St. Mary Strategic Services

The passage of the Affordable Care Act in 2010 and the many facets of health care reform that will be implemented in 2014 has served as a catalyst for change. Handled properly, this change will bring benefits that include: expanded coverage for 32 million people nationwide; a focus on prevention and keeping people healthy; improvements in senior care regarding medications, preventative care and yearly check-ups; and hospital accountability. The challenges St. Mary faces include: the introduction of health exchanges that expand coverage but emphasize cost resulting in significant reimbursement reductions for hospitals, physicians and health care providers; changes in reimbursement rates from Medicare and Medi-Cal; and the potential of more patients than physicians, nurses and hospital beds to care for them. Here are some of the ways St. Mary and St. Joseph Health have responded to reform and sought to bring about a vision of quality health care. “St. Joseph Health, St. Mary welcomes the dramatic transformation health care reform is bringing to our community,” said Alan Garrett, President and CEO.

See HEALTH Page 3

THIS ISSUE

Vol. 4 No. 1

Inside This Issue:

EXECUTIVE Q&A

Read what President of Greiner Buick GMC, David Greiner says is going on in the community that we’re NOT talking about. Page 5

HDBJ ASKS THE LEADERS

Their forecast on growth, business, jobs and economy Page 11

Silver Lining for Small Business Owners

How Small Business Owners Can Utilize the SBA 504 Loan Program as a Strategy to Come Out of the Recession Stronger Than They Went Into It Page 12

SCLA

Turning the Corner...but “Where are We Headed?” The Status of SCLA Page 14

State of Water

How several HD water projects will keep our community afloat Page 15

VIEWPOINT “A century ago

Americans ratified the 16th Amendment to the U.S. Constitution. The result was the income tax, and (the day) should live in infamy. Yesteryears income tax advocates would not recognize their handwork today. Governments need revenue. But the income tax makes it far too easy for politicians to spend more. Moreover, the levy creates a direct disincentive to work and invest. Perhaps even worse, the system invites legislators to manipulate people’s behavior by creating a bizarrely complex system of special interest deductions and credits, which act as the equivalent of cash subsidies, only carefully disguised as obscure provisions in the impenetrable tax code. A century of the income tax has undermined liberty and promotes unlimited government.” Doug Bandow - Forbes

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FROM THE COVER

PROS AND CONS of health care legislation enacted in 2010 Implementation will begin in 2014

THE PROS

Eements of reform that St. Mary believes will greatly benefit the High Desert • Expanded Coverage - The Patient Protection and Affordable Care Act expands health care coverage to 32 million people nationwide by 2019, and includes insurance reforms that are important to patients, consumers and providers. The law won’t change today’s job-based private insurance system and the Medicare system for those over 65 years of age or permanently disabled. However, it does provide new ways to obtain insurance for people who today cannot afford coverage because of pre-existing conditions or inability to afford insurance. Additionally, insurers cannot cancel policies due to illness. • Improvements for Senior Care - By 2020, we will see an end to the Part D Medicare drug coverage “donut hole”—the point at which older adults on Medicare must start paying the full prescription drug expenses themselves. Also, seniors no longer need to put off preventive care or yearly check-ups because of cost. Since 2011, they have been eligible for free cancer screenings, wellness visits, personalized prevention plans, vaccines, flu shots, and more. • Accountability – Health reform also directs the Centers for Medicare and Medicaid Services (CMS) to track hospital re-admission rates for certain high-volume or high-cost conditions and use new incentives to encourage hospitals to reduce preventable re-admissions. In 2015, the law creates a physician value-based payment program to promote increased quality of care for Medicare beneficiaries.

THE CONS

Rreform also poses several challenges for the medical community. • Introduction of health exchanges – People without insurance will be able to shop for a health plan or insurance plan on a state exchange that will be called Covered California. Health care plans offered on the exchanges will be standardized and include a package of required benefits. Heavy emphasis will be on cost, which means health care providers will face significant reimbursement reductions. In the High Desert, there are about 85,000 residents currently without health insurance who could benefit through the state health exchange. This would mean 85,000 more residents in need of a physician and health care home. • Lower overall rates – Even outside the exchanges, hospitals and doctors will experience a number of changes over the next four years in Medicare and Medi-Cal reimbursement rates. • Capacity – As access increases, the situation could mean that there may not be enough physicians and nurses to take care of every patient. San Bernardino County has a low physician-to-population ratio with only 40 physicians for every 100,000 residents. This also impacts our need for more hospital beds. For many years, the High Desert has lacked the needed number of hospital beds to care for the number of residents in the area. The High Desert has 1.1 beds per 1,000 residents compared to the national average of 2.7 beds per 1,000 residents. By St. Joseph Health, St. Mary Strategic Services

HEALTH CARE From PAGE 1 “Many of the changes that will occur through reform are consistent with a vision that has inspired our organization for several years.” • New partnerships – St. Mary recognizes the need for like-minded partners to meet all the needs of those it serves. Presently, St. Mary is developing a new partnership with High Desert Primary Care Medical Group, which was recently purchased by a sister ministry, St. Joseph Heritage Healthcare. The partnership will welcome 32 physicians and St. Mary CEO care providers into the St. Joseph Health network. Alan Garret Additionally, the entire St. Joseph Health family is thrilled that the Attorney General has approved St. Joseph Health’s affiliation with Hoag Memorial Hospital Presbyterian in Newport Beach. With Hoag, St. Joseph Health will work to address some of health care’s biggest challenges – access, quality care, affordability – and develop new programs and services for Southern Californians. • New facilities – The St. Mary Victorville campus is on track with sewer lines and other infrastructure work already underway. More than a hospital, the new campus will also provide many services for maintaining the community’s health and wellness. The new campus is expected to open in 2016. • New thinking –St. Mary is situated to offer the High Desert “real reform,” such as a wide network of quality-focused care, more affordability, prevention and wellness efforts, programs for the whole person and services that are relevant to every stage of life.

HOSPITAL PERFORMANCE MATTERS TO CONSUMERS Consumers don't feel informed about how hospitals perform in caring for patients. As shown in American Hospital Quality Outcomes 2013 report, 45% of consumers are not aware that data is available on hospital performance related to surviving a care episode or experiencing unexpected complications. This kind of hospital quality information could mean the difference between a smooth surgery and complications, or even worse, life and death. In addition, 86% would be more likely to choose (or not choose) a hospital if they could learn ahead of time their risk of dying for a given procedure or treatment. Consumers should do their homework before becoming a patient and take advantage of hospital and doctor performance information based on objective measures, such as mortality rates. Source: Harris Interactive. Consumer Research: America’s Readiness to Choose a Doctor or Hospital. Prepared by Harris Interactive for Healthgrades.

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HDBJ Writers PUBLISHER Western Star Financial, Inc. EDITOR-IN-CHIEF Gretchen Losi STAFF WRITERS Sam Thatte Alyssa Penman Ryan Orr Don Brown Dan Harley Steve Sipe

Gwen Bedics: SBA Relationship Officer Enterprise Funding Corp.

Donald P. Brown: President/Broker of Lee & Associates Inland Empire North

Keith C. Metzler: Assistant City Manager Victorville

Ryan Orr: Award winning journalist and Public Relations officer for V.V.W.R.A..

Dan Harley Jr.: Internet Solutions Consultant PrimeConcepts for Internet Solutions

Kari Martinez: Home Source Lamoreaux Residential Group

CONTRIBUTING WRITERS Keith Metzler Gwen Bedics Kari Martinez Bart Wade EDITORIAL BOARD Teri Ortega President Adelanto Chamber of Commerce Janice Moore President Apple Valley Chamber of Commerce Yvonne Woytovich President Hesperia Chamber of Commerce Eric Camarena President High Desert Hispanic Chamber of Commerce Michelle Spears President Victorville Chamber of Commerce OFFICE MANAGER Sherri Madan ADMINISTRATIVE ASSISTANT Phoenix Turoci HDBJ is published monthly with an additional two Special Features, 40 Under 40 published in October and our Annual Book of Lists. All material is copyright by HDBJ with all rights reserved. To obtain permission to reprint or recreate content, contact us at Mail@HDBJ.Biz. For advertising inquiries call 760-244-8596. To subscribe send a $20 check to: Western Star Financial 14895 Bear Valley Rd., Hesperia, Ca. 92345.

Sam Thatte: Consultant, blogger producing content on presentations and marketing at Samthatte.com

Bart Wade: Lender with Regal Mortgage of the High Desert, specializing in credit repair.

Alyssa Penman: Business Advocate and Marketer RelyLocal

Steve Sipe: A Victor Valley independent business leader

HDBJ would like to thank each of our talented writers, both staff and contributing, for their dedication in making HDBJ a quality, well researched and relevant resource tool for our business community. If you have a story idea or would like to be considered as a member of the HDBJ editorial family, please send an e-mail to Mail@HDBJ.biz or give us a call at (760) 244-8596.

Newly Opened Businesses in the H.D. Advantage Legal Documents 15497 W. Sand St., Victorville

Goodman Distribution Inc. 2520 Business Ctr Dr., Victorville

Affordable RV High Desert 11854 Mariposa, Hesperia

Headz Up Beauty & Barber Shop 15752 Mojave Dr., Victorville

Antony Animal Hospital 9540 I Ave., Hesperia

Hesperia Taqueria 17014 SmokeTree, Hesperia

Custom Offroad & Metalworks 9565 C Avenue Unit J, Hesperia

J.P. Morgan Chase Bank 12731 Main Street, Hesperia

Crazy 8 – The Mall of Victor Valley 14400 Bear Valley Rd., Victorville

Legal Resources Group 14298 St. Andrews Dr. Victorville

Five Guys Burgers and Fries 12719 Main St #420, Hesperia

Macy’s – The Mall of Victor Valley 14400 Bear Valley Rd., Victorville

The Flame Broiler, 2127 Mall Blvd., Ste. B, Victorville

Monica’s Tacos #2 8401 I Avenue Suite C, Hesperia

Furniture Outlet 15584 Bear Valley Rd., Victorville

Panera Bread 11838 Amargosa Rd. Victorville

Peaceful Legal 14298 St. Andrews Dr., Ste. 7, Victorville Pizza Factory 14135 Main St., Hesperia Premier Auto Motors 15215 Palmdale Rd.. Victorville Rock That Body 15028 Seventh St., Ste. 12, Victorville Safe-T Smog 10714 I Avenue Unit B, Hesperia Urban Oasis Day Spa 17189 Bear Valley Road , Hesperia The Zone 14516 Seventh St., Victorville Information submitted by our cities, towns and chambers of commerce.

Executive Q&A With Dav id Greiner

By: Editor: Gretchen Losi

David Greiner is the President of Greiner Buick GMC and Greiner GM Service Center in Victorville, California. He also serves as the Vice President of the Autopark at Valley Center. David holds positions on the Victorville Chamber of Commerce as a the Chairman of the Board, as Chairman of the Board to the Town of Apple Valley Community Development Advisory Committee, a contributing member to the CNBC Small Business Council and a founder and Committee Member of the High Desert Senior Forum. David is married to Alison Greiner and has two daughters, Abigail and Torrey.

David Greiner fills us in on the challenges facing car dealerships with the creative ways they are being met and offers his take on some problems facing the housing market. HDBJ: Tell us something that we are seeing in our local business community that we are not talking about now. GREINER: Appraisers are slowing down the Southern California housing market recovery and hurting schools, local police and fire and municipal budgets with their actions. They are also hurting our local businesses by creating the illusion in the consumer’s mind that they are less well off than they are in reality. Home appraisers are not actually valuing homes, they are simply repeating what price the house down the street sold for. HDBJ: What can be done? GREINER: Appraisers must be forced to use a blended average of replacement cost, factor of rents and relative sales comps to better evaluate the homes. If rectified the fruits will be plentiful including seeing an increase in the ability of home builders to start building again since the values will not be less than the cost of construction. HDBJ: What will likely happen if this isn’t fixed? GREINER: If the value of a home is simply derived from the price of a similar transaction than another housing bubble will eventually occur in the same vein as a housing depression now exists. Buyers far outnumber sellers in this market. The only cure to bring equilibrium is price appreciation that will lure non-distressed sellers off of the sidelines. This can’t happen with the appraiser clogging the mechanism. HDBJ: Do you have a sense of how the High Desert auto market compares to other parts of San Bernardino County?

Devore Project I-15/I-215 Slated to Start in Summer By: HDBJ STAFF REPORTS

GREINER: Similar to the rest of the nation with more of an emphasis on used sales than more affluent areas. New car sales seem to be marginally higher in other areas than here.

By The Numbers

HDBJ: What are some of the big challenges our auto dealerships face?

Currently

GREINER: The unemployed and underemployed. When people feel financially unstable they are less willing to make large purchases and often choose to repair an older vehicle rather than replacing one. We also faced a car buying public who is unsure if they can qualify for a car loan. HDBJ: How are you overcoming these? GREINER: We are putting out the most diverse and widest range of used cars, trucks and suvs in our history through our Best D@#n Used Cars campaign. We are stocking everything from a five thousand dollar preowned economy car to a sixty thousand dollar luxury car all in one inventory. HDBJ: What is the market like for the car buyer? GREINER: We are working much harder at getting people approved for auto loans. Automobile credit is wide open right now and many things such as a previous home foreclosure or medical bills do not affect the interest rate at all. We also have been fortunate to forge some very creative financing relationships with special finance lenders that allow us to extend financing to people with FICO scores as low as 450.

Each month HDBJ will feature a Q&A with one of our local business leaders. If you would like to see someone featured in an upcoming issue, let us know.

Mail@HDBJ.Biz

Congestion at the I-15 and Devore Interchange

1,200 daily vehicle hours of delay $3.75 million in annual cost By 2040

(Without the upcoming improvement project)

25,000 daily vehicle hours of delay $80 million in annual cost $324 Million estimated cost of Devore Interchange project

In an effort to reduce congestion, accidents and improve safety, construction is set to begin this summer on the Devore Interchange Improvements Project where Interstate 15 and 215 meet in Devore. Currently, 50 percent of High Desert residents who do work, commute outside the area for work. The commute time and cost for residents, as well as the business community, is expected to improve substantially as a result of the project. At a cost of some $324 million, the four year reconfiguration of the I-15/I-215 interchange and adjacent local interchanges will reduce traffic delays and increase the flow of goods through the region by adding a lane in each direction including truck bypass lanes that eliminate the need for trucks to weave into faster-moving automobile traffic. For more information about the Devore interchange project, visit the San Bernardino Associated Governments website at www.sanbag. ca.gov.; or call the project hotline at (855) 415-4215 or (855) 415-4215.

COMMERCIAL REAL ESTATE

State of Commercial Real Estate

Commercial Market Snapshot

By: DONALD P. BROWN

High Desert Industrial Inventory: 20,715,277 sq. ft. High Desert Industrial Vacancy: 902,050 sq. ft. High Desert Industrial Absorption: (47,419) sq. ft. High Desert Industrial Vacancy Rate: 4.3%

The long road to recovery

Potential changes in Proposition 13 on the commercial real estate industry will be devastating. Proposition 13 is the property tax structure adopted by California voters in 1978. A split property tax roll, as proposed, would represent a massive increase in cost of doing business in California, creating a significant negative impact on any effort to revitalize our economy. The split property tax roll proposal will remove the Proposition 13 limits that restrict the amount that taxes can be raised on commercial property. While this will generate additional income for our state’s treasury, the damage to commercial realty will be tremendous. The Inland Empire and the Desert Regions of Southern California are usually the first areas to feel the effects of a recession and the last to benefit from economic recovery. The recession, now in its sixth year, is following the same economic cycle as seen previously. Over all, the available inventory (vacancy) of commercial space is declining. Meaning, there is an increase in businesses that are leasing or purchasing commercial property. However, there is some weakness in the current lease rates. Usually, with a decrease in available inventory (net absorption), lease rates increase, but this is not been the case as of the end 2012.

Industrial

Retail

High Desert Retail Inventory: 16,400,220 sq. ft. High Desert Retail Vacancy: 1,725,777 sq. ft. High Desert Retail Absorption: (166,330) sq. ft. High Desert Retail Vacancy Rate: 10.1%

Office

High Desert Office Inventory: 5,303,469 sq. ft. High Desert Office Vacancy: 339,111 sq. ft. High Desert Office Absorption: (17,245) sq. ft. High Desert Office Vacancy Rate: 6.0%

The retail market is still suffering with a vacancy factor of 10.1% and

a negative absorption of (172,509) sq. ft. as of year end. Lease rates have declined slightly, but the conventional wisdom is that the real estate market had reached the bottom as the end of 2012. As the supply of available space begins to diminish, lease rates should begin increasing by the third quarter of 2013. There has been an active development market for discount stores in the entire region, and we should expected that trend continue through 2013.

The office market ended 2012

Commercial property in Apple Valley The industrial market ended the year with a vacancy factor (availability) of 4.3% and had a total net absorption (available inventory) of 558,310 sq. ft. as of fourth quarter By the Numbers 2012. Lease rates remained stagnant throughout the High Desert Commercial Rent year, and we anticipate lease Averages rates to begin moving up All figures are based on 2012 end of year report. in 2013 as available space is absorbed. New development $3.72 per sq. foot - The average quoted of industrial buildings asking rental rate for available was almost nonexistent in industrial space 2012. With the exception of owner user transactions, $18.36 per sq. foot – The average quoted it is unlikely that banks asking rental rate for available will be actively lending on retail space new multi-tenant industrial properties in the foreseeable future. Thus creating upward $14.76 per sq. foot - The average quoted asking rental rate for available pressure on lease rates for office space existing space.

with vacancy rate of 6.2%. The vacancy rate was up over all for the year with a new absorption totaling a (13,324) sq. ft. Lease rates decreased slightly, and as with the retail sector, we anticipate lease rates will begin advancing by third quarter of 2013. New office development for 2013 will be limited primarily to government services and we doubt that banks will be actively lending on any new speculative properties in the foreseeable future.

“A split property tax roll, as proposed, would represent a massive increase in cost of doing business in California, creating a significant negative impact on any effort to revitalize our economy.”

The land business began improving in 2012, with investors anticipating that the bottom of the market was near and began acquiring well located and bargain priced properties to hold in their portfolio in anticipation of future appreciation. Active tentative tract maps -- which are proposed subdivisions involving the creation of five or more lots prior to review and approval by the City Council, have been in big demand by investors. Appearantly this is in anticipation that once the market recovers the lots can be developed quickly and will bring a premium with home builders who are anxious to get back to work.

RESIDENTIAL REAL ESTATE

Renewed Optimism in the Housing Industry for 2013

By: KARI MARTINEZ

Ironically, the only region not to record yearThe new year has brought a wave of to-year sales gains was the West, according to the enthusiasm to the overall housing market with National Association of Realtors (NAR). This is several major signs of a true recovery taking mainly due to the low level of inventory in the place. HomeSource Real Estate reports both the region. The High Desert has been greatly affected national and local High Desert region outlooks by historically low inventory over the past 2 years, remain very promising as demand and home with January of 2013 registering 40% less inventory prices continue to rise across the country. According to the report, prices in January 2013 than January 2012. Industry experts maintain increased 14% year over that a healthy housing market year, averaging $125,450 in In part, because of record includes 6 months of inventory. the High Desert, up from low inventory, the High While in January 2013 the $110,000 a year ago. This nation averaged its lowest Desert’s housing market growth has outpaced the national trends, which remains strong with home housing supply since April 2005 at 4.2 months, the High Desert grew 12.3% from 2012 prices jumping almost 14% averaged less than half that, to 2013. Nationally, the from January 2012. with an astonishing 1.7 months January 2013 gain was of inventory. As a result of this its largest since the fall of record low inventory, the High 2005. Desert’s housing market remains strong with home Another factor pointing to a strengthening prices jumping almost 14% from January 2012. market is the jump in mortgage rates. Freddie The beginning of 2013 has also brought some Mac reported that January’s 30-year fixed rate much needed clarity to the housing market from was 3.41%, up from December 2012’s mark at Washington D.C. As question marks surrounding 3.35%. While the rise is noticeable, overall rates the “fiscal cliff ” plagued national headlines late last remain well below industry standards prior to year and slowed market activity, legislators have the recession. provided some temporary resolutions. Two major U.S. existing home sales have also increased housing programs were left intact by lawmakers in January 2013, climbing almost 9% above the totals from a year ago. The combination of home for 2013, including the Mortgage Forgiveness Tax Relief and Mortgage Interest Deduction programs. sales and home prices increasing substantially The Mortgage Forgiveness Tax Relief allows over the past year bode well for both buyers and distressed homeowners to exclude forgiven debt sellers, leading to a slight shift from a market on their principal residence for tax purposes. dominated by buyers over the past four years.

The program benefitted homeowners who sought debt relief for homes they were upside down in as a result of the recession. Typically, homeowners would be responsible for paying taxes on the debt forgiven by banks up until legislation was passed in 2007. That bill was set to expire with the “fiscal cliff ” if Congress didn’t act. The program has now been extended for another year. The Mortgage Interest Deduction program was also saved by Congress and even beefed up to include legislation that expired in 2011. Homeowners will be able to take deductions on their 2012 tax returns for mortgage insurance premiums and mortgage interest for households that qualify. We anticipate further strengthening of the housing market in the next quarter for the High Desert. Home prices are key to recovery for the Victor Valley, as our region was hit especially hard during the recession. The past year saw steady growth in prices and 2013 looks to continue that trend. As the economy improves, unemployment will decrease as consumer spending increases, and demand increases. Additionally, our population continues to grow, applying pressure to our already tight housing market. In relation, demand for new housing will provide construction jobs, adding jobs locally. Other current job providers are SCLA and a growing retail sector with additions such as Macy’s, and the effect Macy’s will have with other retailers and related services.

Percentage of High Desert home loans underwater ADELANTO 64% Negative Equity 14% Delinquent APPLE VALLEY 50% Negative Equity 9% Delinquent BARSTOW 58% Negative Equity 9% Delinquent HESPERIA 53% Negative Equity 11% Delinquent VICTORVILLE 61% Negative Equity 11% Delinquent

Source: Zillow.com

With U.S. home values falling by more than 18% since their peak in 2007, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. Here is the percentage of homes in the High Desert that are in negative equity, based on Zillow’s fourth quarter 2012 data. Over one-fourth of California’s homeowners, 29%, are underwater on their homes, according to First Tuesday, a California real estate journal. Still, the percentage of mortgaged homes in California that are over 90 days delinquent dropped to 3.1% in 2Q 2012. This is down from 4.5% one year earlier. The delinquency rate will continue to drop until the Fed begins raising rates, probably in 2015. - STAFF REPORTS

IN FOCUS THE GREAT CALIFORNIA EXODUS: A Closer Look

By: Tom Gray & Robert Scardamalia For decades after World War II California was a destination for Americans in search of a better life. In many people’s minds it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades California has been sending more people to other American states than it receives from them. Since 1990 the state has lost nearly 3.4 million residents through this migration. This study describes the great ongoing California exodus using data from the Census, the Internal Revenue Service, the state’s Department of Finance, the Bureau of Labor Statistics, the Federal Housing Finance Agency, and other sources. We map in detail where in California the migrants come from, and where they go when they leave the state. We then analyze the data to determine the likely causes of California’s decline and the lessons that its decline holds for other states. The data show a pattern of movement over the past decade from California mainly to states in the western and southern U.S. Texas, Nevada, and Arizona, in that order, are the top magnet states. Oregon, Washington, Colorado, Idaho, and Utah follow. Rounding out the top ten are two southern states, Georgia and South Carolina. A finer-grained regional analysis reveals that the main current of migration out of California in the past decade has flowed eastward across the Colorado River, reversing the storied passages of the Dust Bowl era. Southern California had about 55 percent of the state’s population in 2000 but accounted for about 65 percent of the net out-migration in the decade that followed. More than 70 percent of the state’s net migration to Texas came from California’s south. What has caused California’s transformation from a “pull in” to a “push out” state? The data have revealed several crucial drivers. One is chronic economic adversity (in most years, California unemployment is above the national average). Another is density. The Los Angeles and Orange County region now has a population density of 6,999.3 per square mile—well ahead of New York or Chicago. Dense coastal areas are a source of internal migration, as people seek more space in California’s interior, as well as migration to other states. A third factor is state and local governments’ constant fiscal instability, which sends at least two discouraging messages to businesses and individuals. One is that they cannot count on state and local governments to provide essential services—much less, tax breaks or other incentives. Second, chronically out-of-balance budgets can be seen as tax hikes waiting to happen. The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. States with low unemployment rates, such as Texas, are drawing people from California, whose rate is above the national average. Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus. Population change, along with the migration patterns that shape it, are important indicators of fiscal and political health. Migration choices reveal an important truth that some states understand how to get richer, while others seem to have lost the touch. California is a state in the latter group, but it can be put back on track. All it takes is the political will. This article reprinted with permission from the Manhattan Institute for Policy Research

Higher Gas Prices

3-2 vote to increase state tax The tax you pay on a gallon of gas will rise by 3.5 cents in California come July 1. In February vote, the state Board of Equalization voted 3-2 to increase the excise tax about 10 percent, from 36 cents per gallon to 39.5 cents per gallon. An excise tax is a tax on an individual product purchased, not based on the price. The publicly elected Board of Equalization must set the rate each year by March 1 so that the state generates the same amount of tax revenue it would have had it remained under the previous sales-tax system. Taxable sales of gasoline in California have fallen from 15.9 billion gallons in fiscal year 2006 to 14.6 billion gallons in fiscal year 2012. A January study by the American Petroleum ”This has nothing to do Institute listed California's gas taxes as second highest in the nation behind New York. After the with good tax policy,” Runner said. “This had July 1 tax increase, however, the 70.1 cents average tax per gallon will lead the nation. everything to do with Prices for regular gas in California are already trying to solve a budget among the highest in the nation. In February, the average price for a regular gallon of gas was $4.238, problem in 2010.” George Runner, Board up from $3.69 a month ago. California's prices are second only to Hawaii, the Auto Club reported. of Equalization. A person who drives 15,000 miles per year at 20 miles per gallon will pay an extra $26.25 per year in gas taxes. That's on top of the $478 per year in state, federal and sales taxes. The sales tax on a gallon of diesel will increase by 1.94 percentage points, but the excise tax will stay at 10 cents per gallon. Board member George Runner, who voted no on the tax increase, said he took issue with a lack of transparency on the tax increase, and he said the state should not be in the business of predicting the volatile gas prices. He said the catch-up from fiscal 2012 only represented 1 cent of the 3.5 cent increase. "This has nothing to do with good tax policy," Runner said. "This had everything to do with trying to solve a budget problem in 2010." Board member Betty Yee, who voted to raise the tax, said she did so because it is the board's duty under the 2010 law to set the rate so that tax revenue remains consistent. The increase is partly due to a $157 million shortfall in gas-tax revenue in fiscal 2012, and also a projection of less consumption by California drivers. The state legislature switched its gas taxation system in 2010 so it could reappropriate some of the gas tax money from road maintenance to other areas. It reduced the sales tax from 8.25 percent to 2.25 percent, but roughly doubled the excise tax to 35.3 cents. The excise tax has increased multiple times since, but previous hikes were by fractions of cents. Source: San Diego Tribune and Howard Jarvis Taxpayers Association.

5 Steps for ‘New’

BUSINESS ENTREPRENEUR

Business Success By: STEVE SIPE

Some of the most important work a pilot does is on the ground before take-off. The weather briefing, flight plan, and pre-flight of the aircraft are all completed to ensure a successful flight. The same holds true for starting a business venture. If you don’t do the necessary work before your launch, your chances of success are going to be diminished. Let’s say you have a concept for a B2C (business to consumer) business. What do you need to do to make sure you will be able to get from point A, a concept, to point B, a profitable business?

EXAMINE THE MARKET – Is there really a demand

for your business? Be honest with yourself and do the leg work to be sure. If there is not significant demand, you are doomed before you even begin. What about competition? If there is already strong competition you have to be able to pinpoint what will make YOU stand out. Why should people come to you instead of choosing a competitor?

DO YOU HAVE THE CAPITAL – To answer this,

We’ve just scratched the surface of getting your business from concept to profitability. Be sure to utilize all of the resources you can tap to get the data and direction you need. SCORE is a great place to start, www.score.org. This site, and others, offers free advice including downloadable resources like business plan forms to help get you started. Just as a pilot utilizes all of the resources available to ensure a safe flight, do the same with your business and you will enjoy the thrill of the journey and the satisfaction of a successful outcome.

Hesperia. Zoned for Business.

you need a business plan. Let me re-phrase, you need a REALISTIC business plan. You will need to do significant homework, but the payoff will be realistic expectations for the start-up and performance of your business. Ask anyone who owns a B2C business and the majority will tell you they are not where they expected to be. The lesson? Be conservative when projecting revenue expectations and liberal on expense projections.

KNOW YOUR CUSTOMER – If you can’t describe

your customer, it’s a pretty safe bet you don’t know them. At the very least, you should be able to identify your customer by age, gender, education level, zip code, income, family size and employment status. The further you can drill down into psychographics, the better. In addition, you should be intimately familiar with their interaction with your particular product or service. INVITE PEOPLE TO DO BUSINESS WITH YOU – You might be surprised at how many people start a business and expect people to just flock to them. If those days ever did exist, they are long gone. You MUST have a plan on how you are going to get people through the door. In order to effectively target your particular market, you must know your customer and how to reach them. Develop a message that will resonate with them and select advertising mediums that will reach them.

Hesperia Enterprise Zone programs could:  lower your state tax bill  decrease personnel costs  reduce machinery and computer expenses ... and more!

BE FLEXIBLE – By listening to your customers you will

be able to make adjustments to your business and fine tune it for success. Every business has to make adjustments

on the fly. Sometimes it’s to meet the demands of a changing market and many times it’s because their original plan had a flaw or two. Don’t be afraid to move out of your comfort zone if it makes good business sense.

For more information: www.cityofhesperia.us/EZ EZ@cityofhesperia.us  760/947-1906

MARKETING

Biz Support Groups Gaining Popularity By: ALYSSA PENMAN For most small business owners, it feels great to be the one in charge until they realize that they are the only one around to do -Everything! The flip side of the independence of owning a local shop or company is the pressure of being solely responsible for the success or failure of your business. Most owners thrive on the challenge. But does that mean you have to go it alone? Not at all! The idea of support groups, peer-advisory groups, mastermind groups, business coaches and business mentors has been around for a long one, and in the age of the Internet, is growing rapidly. In a recent, casual online poll, small business owners were asked if they participated in any kind of business support group, or if they prefer to be a ‘lone wolf.’ Seventy percent of respondents said yes, they have some kind of group for support. There are several different kinds of support available, meeting different kinds of needs. If you have been feeling stuck, overwhelmed, or like you are doing a lot, but not accomplishing much, one of these might be for you. Here is a short run down. Peer-advisory groups: There are formal groups that connect you with other business owners. Vistage Connect is one such group that has started an online platform to provide a similar experience to its in-person groups. Peer-advisory groups are structured, with time for each business owner to present a challenge, group members advise, and goals are set. Accountability is presumably part of the group’s success. Some groups are called Masterminds, originating from Napoleon Hill, author of, ‘Think and Grow Rich’. As with other forms of peer-advisory groups, a goal is set and members work together to suggest options and hold one another accountable. Specialty support groups: Not surprisingly, there are a number of national groups that address the specific needs of minorities including women, veterans or disabled owners in business. Groups that have dealt with the same issues you’re facing can provide invaluable advice, and an understanding ear that you might not find elsewhere. To participate in the support of these groups, you may have to turn to online options, but you could also start a meet up in your area – you will probably find that you’re not alone. Business mentoring and coaching: Perhaps you are looking for the advice of an individual who has a proven track record and can devote time to your situation. Business coaches can be found through SCORE and other organizations. There are also many wonderful professional coaches who are akin to a personal trainer who works out your business instead of your body. Family and Friends: At the end of the day, hopefully you have a family or group of friends that support you. Running a small business takes a significant amount of work. Having people that understand how much of yourself you put into making it work every day is invaluable. It can be important, though, to just let yourself be you when you are with them. Not the boss. Not the sales guy. Not stressed out about pricing and marketing and inventory.

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1. Find people you can trust. Listen to your gut. Without honesty, the group will not be effective. 2. Don’t get in bed with the competition. Each small group should be non-competitive, either because of market or industry. 3. Schedule it when it works. Be realistic about how much time you can commit and what time of day or the week will work. 4. Be heard. This is not the time to be shy. Be prepared to share and commit to goals. 5. Tell on yourself. No one is there to judge you. If you made a mistake, or need advice, be honest. 6. Make it measurable. Keep your goals SMART (Specific, Measurable, Attainable, Realistic, Time-bound.) 7. Stay Accountable. Be willing to be asked why you still have not accomplished that goal that you set. 8. Know when to shut up. Don’t be the one who monopolizes the conversation! 9. Try to make it work. Commit to doing everything you can to make the group successful. 10. But know when to bail. If you’ve tried and it isn’t working, value your business enough to cut ties and move on (in a professional manner.)

HDBJ - ASKS OUR LEADERS Forecast on growth, business, jobs and economy Questions asked to our elected leaders:

First District Supervisor Robert Lovingood

Apple Valley Mayor Curt Emick

Hesperia Mayor Bill Holland

Victorville Mayor Jim Cox

HDBJ Editor Gretchen Losi asks our newly elected officials how they plan to boost our economy and job market.

All High Desert cities were invited to be included, Barstow and Adelanto did not respond by press time.

How do you plan to bring in new business growth?

How do you plan to What is the forecast for stimulate the economic job growth? climate of your city/town?

What do you see as the What is your plan to fix biggest challenge for new this? business and job growth in your city/town?

Growing jobs and cutting government waste are my top priorities. We’re working to get government out of the way of job-creators and create a culture within government to behave in a responsible, pro-business manner. When the county doesn’t do that, I want to hear about it.

I have held preliminary talks with a major job-creator on an innovative jobs project. I have also directed my staff to address local business complaints about unnecessary government intrusion. We’re here to help. If you have ideas or issues you’d like addressed, please call my office at (760) 995-8100.

Job creation is gradually increasing in San Bernardino County, although unemployment remains unacceptably high. We expect the local job outlook to slowly improve in 2013. The local real estate market is rebounding and interest rates are still low. So rising home sales will spark an increase in retail sales, services and jobs.

While San Bernardino County is very business friendly, California’s very hostile business climate hurts us locally. Job-creators are fleeing California because of the policies, regulations and laws created in Sacramento.

The reality is that there is no easy fix to the state’s problems. When enough California voters decide they have had enough of Sacramento’s hostile business climate, things will change.

Regional cooperation will help all High Desert cities in their economic development efforts in the coming years. We have been building relationships with retail and industrial clients for years, and will continue to pursue them as we see some relief in the economy.

I plan to convene a series of “Business Roundtable” meetings during my year as mayor, bringing together business owners, Town staff and the Chamber, to encourage action that will promote local business. We will also implement a strong “shop local” program, following our adoption of a local preference ordinance in 2012.

We have a few businesses that will open this year, bringing jobs with them. In the bigger picture, though, job growth is dependent on factors such as the recovery of the housing market and the return of construction jobs. We will continue to try to make the best decisions to address job growth and recovery from all fronts.

As we pursue industrial and manufacturing growth, our biggest challenge is the availability of infrastructure in our North AV Industrial Specific Plan. Then, for both retail and industrial development, a lack of freeway frontage can be an impediment to our attraction efforts.

The elimination of redevelopment agencies in 2011 took away a plan to finance critical water infrastructure in the NAVISP, however we continue to work with Apple Valley Ranchos Water Company and property owners to get this important area movein ready. The NAVISP is a key component to our job creation goals.

To continue with the plan in place and efforts from the economic development staff. They have done a great job in attracting business as evidenced by the ribbon cuttings and grand openings taking place here in Hesperia. My job is to talk to everyone that will listen to tell them how great the opportunities are here in Hesperia.

We will continue with our efforts to bring new business and industry, and to reach out to our business community already here. We will be streamlining our processes and continuing to provide the best and most responsive city services of any city anywhere.

Forecasting job growth is a tricky business. I would rather put my efforts and the efforts of this council and staff into promoting this city and our great High Desert region as a whole. I am being joined by the Mayors and Mayor Pro Tems in meeting monthly to discuss regional issues including job and business growth.

California has a bad reputation for being very unfriendly to business and industry. in addition California has created legislation that directly affects the ability of local leaders to attract new business, as many businesses are fleeing the state in large numbers.

I will as much as possible insure Hesperia does not add to the laws and regulations that hinder job and business growth. I will work with our state leaders to insist they stop and think before creating any additional laws that hinder or restrict job and business growth.

Following the same strategies we’ve used to attract major job creators like United Furniture and Dr. Pepper Snapple and retailers like Macy’s and Walmart. We work together with them to eliminate obstacles and show them why Victorville is the best location for their business.

We strive to make the development process as easy as possible within state, federal, and local regulations.

We are growing at a steady rate, probably faster than many other cities but we are working to accelerate job growth by attracting new business

As always, getting businesses past onerous state regulations and general high cost of doing business in California.

Using other assets such as a business friendly climate, the municipal utility, and the industrial waste water treatment facility can drive down the cost making Victorville a viable option despite the constraints of doing business in California.

Consumer Confidence on the Rise By: Lydia Saad – Gallup.com

Consumer confidence "unexpectedly improved in January as Americans felt Washington's deal to avert the 'fiscal cliff ' at the beginning of the year boded well for the economy," according to Reuters, the Thomson Reuters/University of Michigan Consumer Sentiment Index. This comes on the heels of the Conference Board's January report showing that its Consumer Confidence Index fell sharply in January. If confidence remains improved, as it has thus far in Gallup Daily tracking, then we should expect to see a substantial gain in the Conference Board's index. There are multiple factors to untangle in understanding consumer attitudes right now, including at a minimum the New Year's Eve fiscal cliff compromise, the January stock market rally, and now the jobs and manufacturing reports.

FINANCIAL

Silver Lining for Small Business Owners How Small Business Owners Can Utilize the SBA 504 Loan Program as a Strategy to Come Out of the Recession Stronger Than They Went Into It By GWEN BEDICS For small businesses that are currently paying rent, outgrowing their current space or even needing to downsize, the SBA’s 504 Loan Program could be the solution to their financing needs. The SBA 504 Loan program is a powerful economic development loan program that offers small businesses another avenue for business financing, while promoting business growth, and job creation. The program was created during the Eisenhower Administration as a means to promote economic development in communities. That was true in 1958 when the program was created, and fortunately for small businesses, it remains true to this day. Although numerous businesses throughout the Victor Valley have been fortunate enough to take advantage of this program, it still remains an unfamiliar, yet viable source of financing for many businesses to acquire long term fixed assets at below market rates. With the 504 program, small business owners can purchase real estate, provide tenant improvements and acquire equipment. All other related project costs, such as fees, permits, installation costs, etc., can also be financed in the project. Loans are financed for ten years or twenty years at approximately 4% interest. The program has seven basic features: 1. Low down payment. The down payment can be as little as 10%. Typical conventional financing usually requires 20-30% down. This low down payment is extremely beneficial to small businesses as they are able to retain their much needed working capital. 2. Partnership with another financial institution to assure low rates. 504 loans are originated through a partnership between a bank or credit union, and a Certified Development Company (CDC). Enterprise Funding, primarily serving the Inland Empire, is one of 290 CDC’s across the nation. A 504 loan consists of the borrower’s 10% down payment, the bank or credit union funding 50% of the project cost, and the remaining 40% is funded by the CDC. SBA guarantees the debentures which are sold to provide the 40% financing. 3. Fixed rate, not variable for the CDC loan. The rate is typically below what the conventional market is charging. The benefit of a fixed rate loan allows the small business owner to better manage their operating costs, as the loan is not variable and subject to change. Interest rates for the SBA guaranteed portion of the 504 loan are tied to the ten year treasury with a small spread for the loans that fund within that month. The side graph illustrates that over the last two years, the effective rates of 504 loans are at a historical low. 4. New loan payment usually lower than current rent. Many small business owners don’t realize that in many cases, they can own their own building with payments less than they are paying in rent. Today provides unprecedented opportunities with the current interest rates and the bargain prices of commercial and industrial property. The business can acquire the property that they already occupy, seek another suitable facility, or even build a new one. With the benefits of the 504 loan, the business can better manage their overhead and future expansion plans because they now have set facility overhead costs with the low fixed interest rate that the 504 loan offers. Furthermore, the business is now building equity in an asset, instead of lining their landlord’s pockets with rent. 5. Collateral usually does not include house. Qualifying for an SBA loan is not unlike qualifying for conventional bank financing. Also, unlike some other SBA programs, the collateral secured is usually limited to the assets being acquired. SBA loans do have eligibility guidelines to follow, but the primary question for any lender is, “Does the cash flow of the business support the new debt payments?” This is referred to as ‘repayment ability’ and is typically based on historical tax returns and financial statements of the business, and in some cases, on projected income and expenses with supporting assumptions. Is the rent that has been paid in the past equal to or greater than the new debt service? Other factors considered are personal and business credit and industry experience. Because no two businesses are alike, each application is reviewed on a case by case basis. 6. Business owners can own the assets of the business as an LLC

or other entity and lease it back to the Operating Company for a retirement vehicle.

The 504 loan is assumable to qualified buyers, but can be retained by the 504 borrowers as a retirement vehicle.

7. CDC is non-profit and gives economic development assistance to local areas. The 504’s primary goal of economic development is primarily measured through job creation and retention, as well as contributions and donations to the local economy. According to the Small Business Profile for the States and Territories, our country’s 27.8 million small businesses represent 99.7% of all employers in the United States. The 504 program is an underutilized financing tool for small businesses to grow their businesses, build equity, and most importantly, create and retain jobs. Let’s face it-today’s small businesses have to be resilient. If they don’t adapt to social and economic changes, they don’t survive. And we all want them to survive as they are the backbone of America.

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METTIAS LAW FIRM is dedicated to providing the zealous advocacy you need to protect your business, assets, family and liberty. From its inception, the firm has dedicated itself to being fresh and innovative in actively pursuing results for clients. Our firm specializes in providing personal and compassionate service. We are young innovative and zealous. We provide our clients with a fresh alternative. With strong roots in Southern California, our Associates have a wide range of expertise and experience in various areas of law and business. We offer Criminal and Civil Litigation services in a number of different areas of law. We would welcome the opportunity to earn your trust and make you a client and friend for life.

Hours: Mon-Fri 8 a.m. - 5 p.m. Closed Weekends (Evening appointments available upon request)

FINANCIAL

Credit 101

Teaching Our Youth Responsible Credit By: BART WADE Credit Scores By The Numbers 710 Average credit score South

If you’re a parent with a young adult, one of the greatest things you can do for their future is to secure them with a strong credit history early, and establish responsible credit practices allowing them to flourish in today’s world. Banks, credit card companies, property managers along with so many others, use credit scores to determine the level of risk involved in issuing credit. 693 Average American Credit scores generally average between the low 400’s to the mid 800’s. The average consumer knows the higher the score the better 672 Average credit score California the credit. According to credit ratings the average credit score in the U.S. is 693. The score drops to an average of 674 for those 651 Average credit score Texas with over 6 credit cards. The national average drops lower, to 645, when the usage is over 50% of available balance. Some tips: Young responsible consumers should look into getting qualified for a few small limit credit cards. This establishes a credit history and creates framework for larger credit lines, like homes, in the future. Remember - Do not let your balance go over 50% of your limit. This can have a negative impact on your score. Don’t pay the balance in full each month. Contrary to what you may hear, this is not a positive indication of good credit. You need to build a credit history first. Once you have a solid credit portfolio, then paying off debt is a good thing. Good credit could mean a good job. Many employers require that a credit report be provided during the hiring process and sometimes even during the interview process. Dakota

A good credit report reflects that the person has shown the ability and a willingness to pay off his debt. This shows good character for this person and would be looked at favorably from a potential employer. Now that you have good credit – protect it. There are several ways of doing this. The best way is to monitor it. You should have your credit report ran at least one time a year. You can do this online at AnnualCreditReport.com, this is the only authorized site under Federal law. You can order one free credit report annually from each of the three major bureaus, EQUIFAX, EXPERIAN AND TRANS UNION. By looking at your credit annually you will be able to maintain the balances necessary for a good credit score and make sure that no one else is using your credit. Always Remember - Save your sales receipts and go over your credit card statements to ensure that the charges are yours. Do not assume that they are perfect just because they come from a major bank or chain store. Verify the interest rate that is being charged on your account. When going on vacation or just shopping for the day, take only the credit cards that you plan to use. This could eliminate some of the headache of having your wallet or purse stolen or lost. It will also keep the temptation for purchasing more than you intended. The most important thing to know about credit scores - 70 percent of your score is based on the time period from today then back 2 years. Your score is figured on seven years worth of data, but anything older than 2 years is figured in the 30 percentile. This is why it is so important to keep 3 to 6 lines of open, rated, good credit, on all 3 reports.

Did You Know?

Some Common Credit Score Myths

Closing an Account Improves Credit Scores: WRONG If you want to improve scores, it's generally better to pay down your balances than it is to close your accounts — especially older accounts. Ordering A Report Hurts Your Scores: WRONG While applying for a new line of credit may affect your score negatively, ordering a report does not hurt your standing. Consumer Counseling Damages Scores: WRONG While this type of counseling may alert potential lenders of a credit concern, most lenders look at the bigger picture. Some even see consumer counseling as a positive sign of a commitment to making lasting changes in your payment habits. Source: Creditreport.com

GOVERNMENT

SCLA -Turning the Corner ...but “Where are We Headed?” The Status of the Southern California Logistics Airport

By: KEITH METZLER As the new year has rapidly passed us by, many of us, including our local businesses feel relieved that we have gotten ourselves through another year during a period of time that has been considered by many as our harshest economic recession. A MEETING THE CHALLENGE recent California Chamber of Commerce publication is appearing as Despite the success at SCLA over the if the California economy is turning the corner and that is believed a last few years, the area’s changing result of the Governor having successfully increased taxes to help demographic and population base balance the State budget. I am not convinced that the corner we has created new demands from are turning will take us down a path that would lead us to a healthy residents including increased police economy. I say this because in California, it doesn’t appear that job and fire service. Residents have creation is our number one priority though we sure seem to talk asked City leaders to redirect its about it as if it is. focus to provide increased public When the former George Air Force Base (George), now known as Dr. Pepper Snapple Group; 54 Acres, 850,000 Sq. ft. services. City leaders will respond the Southern California Logistics Airport (SCLA). was operational at SCLA accordingly, however, one thing that and up until its closure in 1992, it was the Victor Valley’s largest appears certain is that it is unlikely economic supporter. When it closed, an estimated 8,500 jobs were the State of California will help solve lost. Even worse is when George closed, Southern California was already in the midst of a recession. Over time, our problems or even make them we have seen rebounds, largely fueled by the housing industry in its quest to provide affordable housing for Californians. easier to deal with. This is apparent in Without local jobs to meet the needs of our diverse labor market, our economy has grown artificially. Governor Brown’s recent dissolution Still, SCLA has seen growth and brought this region jobs. SCLA began constructing four wide-body aircraft hangars in 2006, all of redevelopment throughout the of which are occupied by nationally recognized tenants that provide services for the largest of companies comprising the global State. Going forward, Victorville will aviation industry. have to develop a business model that In February 2010, the publicly traded Dr. Pepper Snapple Group (Dr. Pepper) completed an 850,000 square foot manufacturing takes a holistic approach to balancing and distribution plant that currently employs approximately 270 employees in its highly automated $125 million facility. Dr. the need for public services with Pepper operates at SCLA because of the City’s municipal electrical services and its industrial wastewater treatment capabilities. growth policies, including economic Victorville’s investment in electrical and industrial wastewater systems has positioned SCLA as a desired location for new and policies relating to continued expanding food and beverage companies. industrial growth and development Also in 2010, SCLA generated more operational revenue from airport activities than it spent on airport activities, critically at SCLA. Our first step in doing this important to the City as it had regularly subsidized SCLA’s operating activities. Since that time, SCLA has continued to operate is to move forward profitably and has welcomed new and expanding companies which include M&M/Mars, United Furniture Industries, Plastipak and Boeing to name a few.

SCLA SNAPSHOT • SCLA had 33,556 military troops rotate through the airport in 2012 • Over 50 tons of cargo passed through SCLA in 2012 • SCLA has 63,265 airport aircraft operations recorded in 2012. This includes all landings, takeoffs and touch & go’s. • In 2012, 8,196 overflight aircraft operations were recorded at SCLA, which includes flights that did not land at SCLA but passed through our airspace and were in contact with SCLA’s control tower. • In March, SCLA tenants Boeing and Pacific Aerospace Resources & Technology (PART) signed a 10 year contract for scheduled and unscheduled maintenance with Boeing’s Gold Care Program. • Air National Guard’s 163rd Reconnaissance Wing completed construction in June on a $5 million hangar facility built specifically for the MQ – 1 Predator. • SCLA currently employs over 2,100 people

NOMINATE YOUR

“40

Under 40”

The ‘40 Under 40’ awards honor individuals based on their professional and community accomplishments in Finance, Public Relations, Law, Marketing, Real Estate, Health Care, Recycling, Broadcasting, Retail, New Business, Education, Insurance..., essentially all facets of our business community. Nominate a business leader by sending his or her name and a short paragraph of why they should be recognized along with both yours and their contact information to Mail@HDBJ.Biz. An independent panel of judges will choose 40 up-and-coming professionals as High Desert Business Journal’s 2013 class of 40 Under 40. HDBJ will print a special feature in October with bios and stories of all 40 in our 2013 class. The 2013 class of 40 Under 40 will also be honored during a Charity Ball in November.

GOVERNMENT

CA admits higher taxes kill tax collection

For the Water Cooler One third of Americans aren’t sleeping enough, and it’s hurting their employers. Harvard scientists found that sleep deprivation costs U.S. companies $63.2 billion in lost productivity each year, thanks to “presenteeism,” defined as people showing up for work but operating at subpar levels. The Wall Street Journal

Gov. Jerry Brown was just forced to admit reality. His supposed $5 billion boost in January tax collection from Proposition 30, which increased sales and income taxes, was really just an early collection of taxes. What Jerry Brown failed to admit was “Twelve years ago, that sales taxes have crashed by 27 percent, California wasn’t looking or $582.7 million, as Prop. 30, Cap and Trade and other onerous regulations are over its shoulder. They’re finally beginning to convince the rich to not looking over their take their businesses, income and shopping shoulder now — they’re somewhere else. While at the same time, opportunists such as Texas Gov. Rick Perry looking at our backside.” have been attempting to lure corporations to Texas Gov. Rick Perry leave the state. And it now appears the sales tax collection crash in January is a precursor of an even bigger crash coming by April. Brown made huge promises of payback for union bankrolling of Prop. 30. Brown’s promise that, if voters approved the Prop. 30 tax increases and he cut spending, his 2013-14 state budget would achieve a budget surplus of $851 million – the first surplus in a decade. But in February, he began negotiations for new contracts with the public-worker unions that represent 350,000 state workers — engineers, administrative staff, librarians, corrections officers and more. The contracts are due to expire this summer. The result: California is looking towards another crisis. The state of California is now facing an even bigger crisis than before the passage of Prop. 30. It’s now feeling the economic impacts of the highest state sales tax at 7.5 (even higher in some counties), top income tax rate of 13.3 percent and secondhighest gasoline tax at $.67 per gallon. As was well publicized, Texas Gov. Perry recently engaged in private meetings with business leaders in the San Francisco Bay Area and Los Angeles Basin to lure hightech companies to the low-tax Lone Star State. In an interview with the San Jose Mercury-News, he criticized California’s regulatory environment, and said Austin, Texas, is poised to become the “next Silicon Valley.” He told the paper, “Twelve years ago, California wasn’t looking over its shoulder. They’re not looking over their shoulder now — they’re looking at our backside.”

The U.S. Economy grew faster than expected in the third quarter. The Commerce Department revised the nation’s economic growth rate to 2.7 percent for the period, up from 2 percent initially predicted. Los Angeles Times The ranks of the “working class poor” are growing even as the recovering economy creates more jobs. Nearly a third of working families earn less than twice the poverty threshold – that comes out to $45,622 for a family of four – and have to struggle to pay for basic needs. Washington Post A new poll found that financial services and banks were the “least trusted industries” of 2012. Only 46 percent of Americans said they trusted the financial services industry, but that’s an improvement over 2011, when only 25 said they trusted bankers and financiers. Los Angeles Times Because of continuing weakness in the job market, nearly half of working Americans with college degrees are over qualified for their jobs. About 15 percent of taxi and 25 percent of retail clerks have bachelor degrees. USA Today Almost 74 million young people are unemployed globally, and the U.N. expects another half million next year. More than a third of young people today have been without work for more than six months, leading many discouraged youth to leave the labor market altogether. The Globe Mail

Reprinted with permission by CalWatchdog

Foremost

High Desert Event Center

SENIOR CAMPUS

WE STILL CARE THE OLD FASHIONED WAY

The Ladies and Gentlemen of Foremost

Home of the San Bernardino County Fair

ave you seen the new Foremost Senior Campus? The new grounds, paint, ﬁxtures and we even have a bus now for local jaunts for our residents. Not to mention the great residents whom all this is meant for.

A Continuum Senior Care Campus • Independent Apartments • Assisted Living

• Alzheimer & Dementia Care • Respite (Short Term) Hospice Waiver Approved

One of our residents, Anne Oakes, has lived in the Victor valley for over 50 years. Anne Oakes

Born in 1926 in Loma Linda Anne and her family opened the Oaks Lumber yard here in town. She was a professional golfer and one of the ﬁrst members of the Hesperia Golf Course. After attaining a champion status she decided to go back to school and became a social worker and graduated from Redlands University in 1972. As a social worker Anne worked locally until 1982 and still remembers so of the children and their life paths.

Events Commercial and Private

BOOK YOUR CORPORATE HOLIDAY PARTY TODAY! Private Events Corporate Events Indoor and Outdoor Events Weddings Quinceaneras Galas

Meetings Trade Shows Car Shows Expos Picnics

Anne Has 3 friends from kindergarten she still has lunch with once a month or so. Anne shops till she drops and is looking forward to the new Foremost bus to satisfy some of those needs. She still attends the local Baptist church and enjoys all the activities there. Anne attends the daily activities here at Foremost enjoying the exercise and games the most. The anagrams are very enjoyable for her too.

• Beautifully Furnished Private and Semi-Private Rooms • 24 Hour Care and Supervision • Medication Assistance

• 18 acres of park-like setting Anne has several close friends at Foremost with 2 special friends Betty and Louise. These three musketeers can always be found working the puzzles, playing poker and playing other great memory games to. “As I look over my life besides my wonderful family my traveling memories are the ones most cherished.” Hope you enjoyed this little personal tour…..more to follow.

14800 Seventh Street Victorville, CA 92395

For more information on all of our services, please call

760-244-5579

760-951-2200

17581 Sultana Street, Hesperia, Ca 92345

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9/7/2012 4:33:44 PM

9/21/2012 10:51:07 PM

TECHNOLOGY

Local Companies Bringing Broadband Internet to Rural Parts of Our Community By: DAN HARLEY

Operating a business without broadband internet access in today’s economy is like riding a bicycle down Interstate 15 while towing a boat. It’s as necessary as a phone, business card, and stationery. Here, in the High Desert, there is a mishmash of available broadband internet service. The verying quality and compatability of this service can be problematic to the business person. In some areas there are several service options, such as DSL, FiOS and cable. Those located in the more rural parts of our community could be limited to just one of the mentioned services. Then there are areas so far out that none of these options are available. You don’t really have “Current available technology to be in the middle of the desert to be denied broadband internet. For business owners in Phelan, Wrightwood and other select areas, Verizon has capped the maximum has reached their capacity for DSL service. The only way to obtain this bandwidth for FWB service is after one of their DSL customers cancels service or moves. equipment at around 15 mbps Two local companies could be the answer to this problem.

and that is only available under the most perfect conditions.”

Desert Wireless and WISPRenn offer fixed wireless broadband (FWB) internet access and bring internet access to areas of our community where it isn’t available or limited. FWB is a type of high-speed Internet access where connections to service providers use radio signals rather than cable or phone lines. The transmitters can broadcast as far as twenty miles. This can cover a lot of our community and touch many of those who cannot access the ground based services. Bandwidth speeds can be as high as 15 mbps, which is comparable to some ground based services. If you’re suddenly thinking about canceling your Verizon FiOS service you should know some of the drawbacks first. FWB requires line of sight between the transceivers. In other words: If you can’t see one of the service providers transmitters from your home or business, then you’ll be out of luck for accessing their service. Hills or even thick trees could obstruct the signal between a subscriber and the transmitting towers. Rain or fog could affect the service quality. Current available technology has capped the maximum bandwidth for FWB equipment at around 15 mbps and that is only available under the most perfect conditions. FWB is a little more expensive than ground based broadband services for compatible bandwidth. FWB requires installation of antenna equipment (much like satellite TV) and such costs are paid upfront or absorbed through a long-term service contract. Cable or phone companies could bundle their services and make the actual cost for internet service much cheaper. Whereas FWB service providers are usually small companies that cannot offer bundling. Compared to cellular services offering 3G, 4G or 4G LTE, FWB has a significant edge by offering much more bandwidth and is relatively less expensive. The comparison is the same for satellite internet service, which is notorious for being expensive, slow and unreliable. So why choose fixed wireless broadband? If you’re unable to obtain services from a cable or phone company then FWB is a prudent choice for broadband internet. You can find out more about FWB and if you are able to obtain their service in your area by contacting one of the local service providers.

LISTS

MEETING ROOMS/BANQUET FACILITIES Rank

Hotel Address

Website

Sq. Ft. largestmeeting space

No. of meeting rooms

Seating capacity banquet

Seating capacity theater

Seating capacity Classroom

Guest rooms

Food

Business Center

Meeting facilitator

Internet in meeting rooms

G.M. Dir. of Sales. / Contact info.

Hilton Garden Inn 12063 Mariposa Rd. Victorville, Ca. 92395

www.hiltongardeninn3. hilton.com

7,500

DNR

7,200

DNR

300

Terrace Room at Foremost 17581 Sultana Street Hesperia, Ca. 92345

Niru Vangala receptionist@foremostseniors.com 760-244-5579 760-244-8885 (fax)

www.AVRecreation.org

6,000

200

300

200

Apple Valley Conference Ctr. 14975 Dale Evans Parkway Apple Valley, Ca. 92307

Ralph Wright recreation@applevalley.org 760-240-7800 760-240-7887 (fax)

www.greentreevictorville.com 5,900

DNR

400

DNR

Green Tree Hotel 14173 Green Tree Blvd. Victorville, Ca. 92395

Mark Meloul greentreebanquets@gmail.com 760-245-3461 760-245-7745 (fax)

www.marriott.com

5,000

220

400

200

Courtyard By Marriott 9629 Mariposa Rd. Hespria Ca. 92345

Bijal Patel bijal.patel@marriott.com 760-956-3876 760-956-3921 (fax)

www.bouldercreekranch.org

3,600

N/A

150

Boulder Creek Ranch 19099 Lemon Street Hesperia, Ca. 92345

Gail Hasty 760-244-0096

www.Spring-Valley-LakeCountry-Club

2,332

DNR

200

DNR

Spring Valley Lake Country Club 13229 Spring Valley Pkwy. Victorville, Ca. 92395

Gene Miller 760-245-5356

Lists were sent to all meeting and banquet facilities in the High Desert. Not all were returned by deadline. HDBJ relies on individual companies to be truthful and accurate in information submitted. To be surveyed for future lists, simply e-mail mail@hdbj.biz.

Abbreviations: Y/Yes - N/No - N/A Not Applicable -DNR/Did Not Respond

NEWS BITES

Once again, no High Desert hospitals will receive honors or distinction for healthcare, according to the new 2013 Healthgrades Report to the Nation. Unlike other “distinguished” honors hospitals like to use for marketing purposes, Healthgrades ‘America’s 50 Best Hospitals’ is the only national hospital quality rating based solely on clinical outcomes. It recognizes hospitals that have demonstrated superior clinical quality over an 11-year time period. About 4,500 hospitals across the country are reviewed annually for their performance, and only 1 percent qualify as an America's 50 Best Hospital. The distinction was bestowed on two hospitals within San Bernardino County, Redlands Community Hospital and St. Bernadine Medical Center in San Bernardino. To meet this distinction, hospitals must have had riskadjusted mortality and complication rates low enough to place them among the top 5 percent in the nation for at least eight consecutive years. On average, patients treated at America’s 50 Best Hospitals had a nearly 30 percent lower risk of death. To view the full report, visit Healthgrades.com.

Is your workplace great?

We want to know. The High Desert Business Journal is working on its annual list of the best places to work in the region. The list is set to appear in October as part of a special report covering employers that make our ranking. The HDBJ is in the process of soliciting employers to take part in our selection process, which involves a two-part survey of employers and workers. What’s in it for you? Bragging rights, for one. Your company will be part of a select group of employers recognized for their treatment, recruitment and retention of employees. The list stands to be a source of pride for employers that can help with employee morale and recruiting. Making our list also brings good exposure to clients, customers, bankers, vendors and peers. We’re considering just about all types of employers in the High Desert: locally based companies, subsidiaries of companies based elsewhere, professional services firms, banks, government agencies, nonprofits, hospitals and universities. Employers must have at least 10 workers in the High Desert and been in business for at least a year. They’re ranked by category: small (10 to 24 workers), medium (25 to 249 workers), and large (250 or more). There’s no cost to enter. The employer survey requires information on policies, practices, benefits and demographics, and is filled out by management. The employee engagement and satisfaction survey questions workers on their employer’s leadership, planning, culture, training, pay and benefits, and other areas. Employers will be asked to provide email contacts for workers. All gathered information is confidential and won’t be released to any third parties. The Business Journal’s list only will include basic employment and benefits information about employers. Our stories on the employers will be general profiles. Specific comments and other details of the surveys won’t be made public. Employers that go through the process but don’t qualify won’t be cited in any way. We’ll be soliciting employers to be surveyed through July 22. Employers and employees will be queried in the weeks after. To receive your questionnaire, e-mail us at Mail@HDBJ.biz.

MARKETING Rock Your Next Presentation 3 Ways to Amaze Your Audience By SAM THATTE

If you can tell a great story that persuades your audience, while remembering to smile as you create some memorable ‘S.T.A.R’. moments in your presentation, you are well on your way to providing a Killer Presentation. Here are a few tricks to help you prepare. We have all read and laughed about the proverbial, "Death by PowerPoint." We have seen slides where a roomful of people look like they were gassed and put to sleep by the toxic fumes emitted by that vile program, ‘PowerPoint.’ We all know that bullet-points Kill. PowerPoint Sucks. Less is more. Globes and handshakes are overused. Clipart is cliché. Blah-blah-blah... ENOUGH ALREADY! Help has arrived. By using one or more of the following three ideas in your presentation, you will be looked upon as one of the better presenters in our community today. 1. Organize your content like it's a story. The Beginning: Start your presentation by describing what the state of affairs is today. More than likely, your audience will be in agreement with you and you will feel the affinity as they get involved in your story. Now talk about what could be possible. How much better things can be. This will get your audience to feel some tension and possibly some strain, but that is okay. You want them a bit uncomfortable at this time. The Middle: The trick is to use the same tension to tell the rest of the story. So you may make a few more points like this: “What is-“ When you need training books printed for your seminars, you have to send the files to Bad Boy Printing 15 business days before the seminar. Because Bad Boy sends out your files to a company in Minnesota that takes a turnaround of 1114 business days. “What could be-“ With Acme printing all your printing will be done in-house so you will have more time to work on your training material. All we will ask is for you to get the files to us 2 business days before the event. “What is-“ With Bad Boy Printing, you had to transport all the training material to the venue yourself. “What could be-“ Acme Printing will deliver all the materials to the seminar venue the afternoon before the event. As you move back and forth between the two scenarios, your audience will start to get really excited about the prospect of hiring your company! The End: And then, close the presentation with a call to action and a promise of a new tomorrow. “Call to action-“ Now that we have done the work of assessing the benefits of hiring our company as your exclusive vendor for printing, we would like to present our contract to you for your signatures and approval. 2. Smile while you talk. Very few people do this. By getting in the habit of smiling as you are talking, it can make a significant difference in your interaction with people. Throwing in a chuckle is also a great idea. When you are speaking, it's always nice to walk around the room and smile at those in attendance. 3. Create a S.T.A.R. moment. In the book ‘Resonate,’ author Nancy Duarte shares what she calls, "Creating S.T.A.R. moments in your presentations." S.T.A.R. moments are "Something They Will Always Remember." This should be so dramatic and awe inspiring that people will talk about it weeks and months later. If the audience you are presenting to is used to attending presentations all the time, or is attending your presentation as part of a conference, S.T.A.R. moments are particularly important. You want them to remember YOU over all the other presentations that they saw. S.T.A.R. moments can be a short skit or a dramatic re-enactment of an event. It might be repeatable sound bites like the one Dr. Martin Luther King used in his "I have a Dream" speech. Every few sentences, he would repeat, "I have a dream". That created the S.T.A.R. moment. Another way to create a S.T.A.R. moment is by telling stories with emotion that people will remember long after the presentation. So in conclusion, there are fifty rules and another fifty opinions that people have when it comes down to what you should and should not do during a presentation. But if you can tell a great story that persuades your audience, or if you smile when you are giving your presentation and if you create some memorable S.T.A.R. moments in your presentation, you are on your way to keeping your audience interested and engaged for the duration of your presentation.

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$4,000. According to Mr. Baxter, The cost for a business to hire an attorney, pay the necessary experts, and prepare for trial could run into the tens of thousands of dollars. In one case involving a self-storage facility, of which Barnum does not rent space, the handicap parking sign was, allegedly, defective. Defense Counsel referred to the suit as, “a shake-down.” Still, the business settled as he did not want to be liable for attorney’s fees, expert costs and other court fees if the matter went to trial. Of the businesses named in these cases none had any record of the Plaintiff ever being a customer. In another case, several professional offices in the Inland Empire received separate actions against each business, all within the same block, claiming that their parking facilities lacked sufficient handicap parking. In one of those actions that did go to trial, Barnum, who claims to be bound to a wheel chair, sought money damages for handicap parking in an area not available to the customers or the public, but designated instead as tenant and employee parking only. In that case, the jury returned a verdict in favor of the defendant. When jurors were quesstioned after the trial they stated that they did not find Barnum believable. This case is currently on appeal. According to one business owner, if he had received a letter notifying him that his business was out of compliance he would have rectified the situation and no litigation would have been necessary. While a number of the other actions are also being defended, others are quickly settled as many of the defendants would rather pay the settlement than incur the costs of defense. Even more daunting for a defendant is the risk of being found out of compliance, even if trifling, and then incurring the Plaintiff ’s attorney’s fees as well as their own. The Plaintiff is entitled to statutory damages even though he suffered no actual harm. Governor Brown recently signed SB 1186 which seeks to balance the misuse of this action against the legitimate need to provide reasonable accommodations. The modifications include lowering the statutory damages and requiring claimants to send a demand letter for repairs, without demand for monetary damages, prior to instituting a lawsuit and provide the business an opportunity to repair the defect before an action could be filed and damages sought. Although this may help, counsel who handle these matters say it is “a good start” and aimed at the true intent of the ADA which is to insure handicap access to businesses and not expose business to blackmail. No one disputes the need to make reasonable accommodations to persons with physical challenges, however, compliance with the intricate web of requirements in attempting to address every possibility becomes staggering for a small business.

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Harmful Effects of CA’s Corporate Tax Breaks Sacramento — A new study released today by the Reason Foundation and the Howard Jarvis Taxpayers Foundation shows why many California tax breaks given to corporations constitute corporate welfare and demonstrates how they actually impede economic growth and contribute to the state's poisonous political environment. The study examined numerous corporate tax, sales and use tax credits, tax deductions and exemptions in order to evaluate whether California tax breaks serve their intended purpose. The argument offered in support of such tax breaks is usually that they will boost the economy by improving the livelihoods of certain classes of individuals, businesses or industries. But their true costs are frequently ignored. While tax credits may encourage business activity in certain sectors of the economy, the research shows that they limit business activity that would otherwise have taken place in other sectors of the economy by bestowing benefits upon politically favored industries and companies. "The state's maze of tax credits props up select groups, blocks competition and lacks "Special interests in accountability," said Adrian Moore, vice Sacramento get special president of policy at the Reason Foundation. favors in the form of "This research shows special interests disproportionately benefit from these tax loopholes, usually tax breaks at the expense of the overall at the expense of economy and the rest of the state." The study reveals that while tax breaks citizen taxpayers, small may be intended to serve as an economic businesses and working engine, they often become wasteful corporate handouts with the government attempting to class Californians.” pick winners and losers, often at a steep price Jon Coupal, Chairman tag to other businesses in the marketplace or of the Howard Jarvis ultimately, taxpayers. From farm machinery to motion pictures to computer programs Taxpayers Foundation. to the timber industry, the study highlights how a long list of inefficient tax breaks fail to deliver the economic benefits promised to the state's economy and taxpayers. Solyndra, the notorious California solar cell company that stuck federal taxpayers with over $500 billion in debt, also received $25 million in California corporate tax breaks . The study shows why Solyndra is a textbook example of "government using — and losing — taxpayer dollars to play favorites and advance a political agenda by interfering in the market." "Our study reveals what we have long suspected," said Jon Coupal, Chairman of the Howard Jarvis Taxpayers Foundation. "Special interests in Sacramento get special favors in the form of tax loopholes, usually at the expense of citizen taxpayers, small businesses and working class Californians. Many of these corporate rent seekers are the same ones who finance initiatives and support legislation imposing broad-based tax hikes on everyone as long as they get to preserve their special tax treatment." Coupal also said, "Let's be clear. This is not a call for higher taxes — just a smarter tax system which removes unjustified tax breaks and reduces the overall tax rates for everyone. Doing this would also lessen the 'pay to play' atmosphere in the Capitol." Even with billions of dollars in tax breaks purportedly intended to encourage economic activity, California maintains one of the worst business climates in the nation. The study suggests one way to improve the state's business climate would be to lower and simplify the state's tax code by eliminating tax credits altogether. The Franchise Tax Board (FTB) estimates that the overall corporate tax rate could be reduced by 14 percent simply if the Research and Development Credit alone were eliminated. The study shows that if other tax breaks were eliminated, California could likely reduce its overall corporate tax rate by more than 20 percent.

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NEWS BITE 104 Lay-offs at Barstow’s Primetech International Inc. Primetech International is set to lay-off some 104 employees by March 31st, according to the Employment Development Department. Sources at Primetech could not be reached for comment. Primetech contracts with the Department of Defense, specializing in materials and facilities management, distribution and warehousing operations, information technology services and engineers.

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