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KERN Journal Business

Vol. 3, No. 4

Cover story

Tejon Outlets bringing ‘firsts’ to Kern market

Despite drought, Don Galey sells Bakersfield boats Page 30

Aug. / Sept. 2014

Retail Sales / Franchising Issue

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he 320,000-square-foot Outlets at Tejon, set to open on Aug. 7 at the foot of the Grapevine, along Interstate 5, south of Bakersfield, is already fully leased with 71 stores and restaurant tenants. Richard Chapman, president and CEO of Kern Economic Development Corp., the mall will become an economic engine for Kern County, bringing jobs and sales tax revenues. The Outlets at Tejon also is bringing many firsts to Kern County. In the mall, shoppers will find most of their favorite brand-named stores, as well as the only Pottery Barn Outlet in California. Several other stores will be making their first appearance in Kern County, including H&M, Michael Kors, J. Crew, Tommy Hilfiger, A’GACI, and others. Beyond the shopping opportunities The Outlets at Tejon is planned to be a “destination location.” The center features open-air architecture that speaks to California’s Spanish colonial history. Its stucco archways and tile roofs are reminiscent of the state’s historic missions. “The beauty of the surrounding landscape of Tejon Ranch, with the mountains as our backdrop, and shopping doesn’t get much better,” Brian P. Hassett, general manager of The Outlets at Tejon, told the Kern Business Journal. — Kern Business Journal

Love longer.

Understand your risk to protect your heart.

Kern Business Journal P.O. Bin 440 Bakersfield, CA 93302

Presorted Standard U.S. Postage PAID Bakersfield, CA Permit No. 838

Photo courtesy of Photo courtesy of Tejon Ranch

The Outlets at Tejon project is shown in this aerial photo as the shopping center prepared for its Aug. 7 grand opening. Locate at the foot of the Grapevine, along Interstate 5, south of Bakersfield, the mall is being developed by the Lebec-based Tejon Ranch Co., in partnership with New York’s The Rockefeller Group. For more about The Outlets at Tejon, turn to page 4.

Take our online assessment at DignityHealth.org/heart to learn more about your risk for heart disease so you can take action to prevent it. It’s simple and it’s free. Because healthy hearts love longer.

INSIDE Franchising arrangements can be profitable, but buyers must beware. A franchisee and regulators advise how to research franchise offers. Page 34

ChooseMercyMemorial.org

Kern County Farm Bureau has given the agricultural community a new, powerful voice on economic and regulatory issues. Page 46 As vehicles roll off assembly lines, car and truck sales are booming in Kern County. The president of the local dealers association discusses trends and future prospects. Page 22


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KERN BUSINESS JOURNAL

Aug. / Sep. 2014

A Message from the

Board of Directors Eugene (Gene) Voiland

Greg Bynum

Annette Davis

Having recently celebrated our five-year anniversary, it’s fitting to express our most sincere gratitude to our clients, friends, and members of the community who have embraced Valley Republic Bank with such enthusiastic support. It’s a privilege to both serve you and to partner with you in making this community a better place to live, work, and raise our families. Our solid commitment to improving the quality of life here remains as strong today as it was the day we opened in 2009.

Bruce Jay

Anthony Leggio

Angelo Mazzei

Willy Reyneveld

Carlos Sanchez

Shawn Shambaugh, MD

We are local. We are proud to call Kern County home. We will continue to reinvest here.

Local. Responsive. Reliable. 5000 California Avenue, Suite 110 661.371.2000

11330 Ming Avenue, Suite 400 661.617.2130

valleyrepublicbank.com since 2009

Stock Symbol

James Shuler, MD

Robert Stine

(VLLX)

Warner Williams


Aug. / Sept. 2014

Journal KERN Business Showcasing Kern County business and industry August / September 2014 Vol. 3, No.4 Kern Business Journal is a bimonthly publication of The Bakersfield Californian. Copies are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Publisher Ginger Moorhouse President/CEO Richard Beene Senior Vice President Revenue and Marketing John Wells Editor Dianne Hardisty Art Director Glenn Hammett To submit a story ogarcia@bakersfield.com To advertise mpatel@bakersfield.com Mira Patel 661-395-7586 To subscribe 661-392-5777

KERN BUSINESS JOURNAL

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Dianne Hardisty

Sales are booming as Kern’s economy recovers

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ern County’s recovery from the Great Recession of 2008-09 has outpaced the recoveries in many other communities in California and the nation. No doubt Kern’s strong energy sector, which is witnessing increased oil and gas production, as well as a wide range of alternative energy projects has helped. The opening this month of The Outlets at Tejon at the foot of the Grapevine, south of Bakersfield, is a big deal. It is expected to boost local sales tax revenues by nearly $1.3 million a year and create between 1,500 and 2,500 jobs. But Kern’s improved economy also has reignited plans to build or expand many other area retail projects that were stalled by the recession. In addition to showcasing The Outlets at Tejon, this issue of the Kern Business Journal shines a light on the commercial activity in Bolthouse Development Co.’s Seven Oaks Business Park in southwest Bakersfield. Castle & Cooke unveils its plans for two Dianne Hardisty Bakersfield shopping centers – the Shops at River Walk and Gosford Village. And Valley Plaza, a regional beacon for shoppers since 1967, continues to evolve to meet consumers’ needs. Downtown Bakersfield also is enjoying a renaissance, with unique shops sprouting up around Mill Creek Park and in arts and cultural districts. Planning is underway to move this renaissance forward. A big part of metropolitan Bakersfield’s attraction is its restaurants. David Lyman, manager of the Bakersfield Convention and Visitors Bureau, takes journal readers on a tour of some of the area’s nationally recognized restaurants. Not to be overlooked is retail development in other county cities, including Tehachapi, where the Red Apple Pavilion and other projects are being planned.

CALIFORNIAN FILE PHOTO

Since its opening in 1967, Valley Plaza has been a popular shopping mall. In this Bakersfield Californian file photo, customers wait to enter the center during an evening shopping event. The 1.2-million-square-foot enclosed mall features about 145 shops and services, including a food court, restaurants and detached movie theater.

In this issue, the Kern Business Journal also looks at other retail sectors, including car sales, grocery stores and even boat sales. Patrick Beck, president of the New Car Dealers Association, reports 2014 new and used vehicle sales in Kern are very strong. Grocery store chains, including Wal-Mart and Smart & Final, have endorsed the area’s strong economy by opening new stores. And the ever-optimistic Don Galey won’t let even a drought get him down. He keeps selling boats at his Galey’s Marine Supply. The August issue of the Kern Business Journal offers a wide ranging look at the region’s retail sales industry. Dianne Hardisty is the editor of the Kern Business Journal.

Business at-a-glance CALIFORNIA HIGH SPEED RAIL AUTHORITY

Drawing of High Speed Rail passing through Kern.

O’Dell Engineering begins right of way, surveying work The California High Speed Rail Authority has approved a right of way engineering and surveying contract with O’Dell Engineering. Work for the $3.2 million contract will be based out of its Fresno office and includes support services for engineering and acquisition activity from Fresno to Bakersfield. “This project has significantly strengthened our Central Valley presence and created several new jobs in our Fresno office,” said Dylan Crawford, principal of O’Dell Engineering. “We are committed to the success of this project and pleased to be a part of it”. The California High Speed Rail is the first high speed rail system in the nation. Construction activity

for the first segment is scheduled to begin in 2014. By 2029 the system is expected to run from San Francisco to the Los Angeles basin in under three hours at speeds over 200 miles per hour. O’Dell Engineering provides civil engineering, surveying, land planning and landscape architecture services, with offices in Modesto, Pleasanton, Fresno and Palo Alto. — O’Dell Engineering

Bakersfield’s visitors guide wins recognition The Official Bakersfield Visitors Guide has been recognized by the California Association for Local Economic Development (CALED) with its 2014 Award of Merit. Each year, CALED’s awards program brings statewide recognition

to projects and programs developed during the previous year that have made significant contributions to the field of economic development. The Official Bakersfield Visitors Guide was recognized in the Economic Development Promotions Category. “Since it was published last year, the Official Visitors Guide has been in demand by visitors, hotels, local attractions, and RV parks as an effective tool to promote Bakersfield,” said Convention and Visitors Bureau Manager David Lyman. “This award from CALED brings Bakersfield even more positive recognition as a visitor destination.” The category Economic Development Promotions in CALED’s Awards of Excellence program recognizes outstanding efforts and achievements in economic development advertising, marketing and promotion during 2013. The emphasis is on effective public relations and comprehensive ongoing business development campaigns that utilize special web sites, print or broadcast media, collateral material, video or personal contact efforts.

TEJON RANCH CO.

Development planned for Tejon Ranch. Copies of the award-winning Official Bakersfield Visitors Guide are available at the Visitor Information Center at 515 Truxtun Ave., in front of the Amtrak station. It also is available in digital book form online at www.VisitBakersfield.com. — Convention and Visitors Bureau

Tejon buys out partner Tejon Ranch Co. has paid $70 million in cash to acquire full ownership of Tejon Mountain Village LLC, the 26,000-acre resort-style residential community it has been developing near Lebec with Arizona-based DMB Associates Inc. The move to buy DMB’s interest in the fully entitled project reflects

the Lebec company’s “growth as a fully integrated real estate company and demonstrates its complete confidence in the future success of the development,” a statement from Tejon Ranch explained. Tejon Mountain Village is a proposed residential, commercial, and recreational development of pristine, rugged property in the Tehachapi Mountains owned by the Lebec-based Tejon Ranch Co. It is included in the largest conservation and land-use agreement in California history. The pact between the Tejon Ranch Co. and a coalition of environmental groups, announced in May 2008, is designed to protect 240,000 acres of the historic ranch, including a vast amount outside the borders of the Tejon Mountain Village subdivision. — Kern Business Journal


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KERN BUSINESS JOURNAL

Aug. / Sep. 2014

Retail Sales Outlets’ clock tower has special meaning

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o the casual visitor, the 48-foot-tall clock tower that looms over the southwest corner of The Outlets at Tejon may seem to be just a quaint decoration. But this replica of the Beale Memorial Clock Tower holds special meaning to the ranch that is home to Kern County’s newest shopping center. The original Beale Memorial Clock Tower was gifted to the City of Bakersfield in 1904 by Truxtun Beale, the son of Edward Beale, a naval officer, explorer, diplomat, war hero and founder of the Tejon Ranch. In 1865 and 1866, Edward Beale purchased the Mexican land grants which now comprise the 270,000-acre Tejon Ranch. Truxtun Beale inherited the ranch upon his father’s death. In 1912, he sold the ranch to a syndicate of investors headed by Harry Chandler and Moses Sherman. Tejon Ranch is the largest private landholding in California, and today is owned by Tejon Ranch Company, which is listed on the New York Stock Exchange (symbol: TRC). Truxtun Beale was ambassador to Spain when he was inspired by a clock tower he saw there to create a memorial to his deceased mother, Mary Edwards Beale. He hired architect Clinton Day to design the clock tower, which was erected at the intersection of 17th Street and Chester Avenue in downtown Bakersfield. The clock tower gained stature as a city landmark until 1952, when a series of earthquakes shook Kern County, destroying many of the city’s government and commercial buildings. Only bits and pieces of the clock tower were salvaged. In 1961, an organization was established to rebuild the clock tower at its present location in front of the Kern County Museum on Chester Avenue. — Kern Business Journal

PHOTO COURTESY OF TEJON RANCH CO.

A completed section of The Outlets at Tejon is shown just days before the Aug. 7 grand opening of the shopping center at the base of the Grapevine.

Outlets at Tejon: ‘Shopping doesn’t get much better’

T

he 320,000-square-foot Outlets at Tejon, set to open on Aug. 7 at the foot of the Grapevine, is already fully leased with 71 stores and restaurant tenants, and planning is underway for an adjacent 180,000-square-foot expansion to the north. “This project will be a huge economic engine for the region,” Richard Chapman, president and CEO of Kern Economic Development Corp., predicted. “The center will bring substantial ‘new money’ into the area from out-of-county visitors, as well as significantly lessen retail leakage, which occurs when members of a community spend money outside the community.” Commercial real estate broker Scott Underhill, a partner at Newmark Grubb | ASU in Bakersfield predicted the project will be great for the Southern San Joaquin Valley. He and others said The Outlets at Tejon offers clear advantages for retailers. Its location 30 minutes south of Bakersfield, near the intersection of Interstate 5 and Highway 99, puts the shopping mall within 60 miles of 3.2 million residents, not to mention the 80,000 vehicles that pass the spot every day. The timing is right, too. Kern County’s economy has regained its footing since the Great Recession of 2008-09. Other retail centers long planned for Bakersfield, but derailed by economic conditions, also are now announcing tenants. The Tejon project is part of a surge that has added about 50 outlet centers worldwide since 2006 – a more than 10 percent increase to the global tally of about 400, according to the International Council of Shopping Centers, a trade organization. At The Outlets at Tejon, shoppers will find many of their favorite brand-named stores, as well as the only Pottery Barn Outlet in California and several other stores making their first appearance in Kern County. These include H&M, Michael Kors, J. Crew, Tommy Hilfiger, A’GACI, and others. Beyond the shopping opportunities The Outlets at Tejon will

An architect’s rendering show The Outlets at Tejon in the planning stages.

provide, the project is being planned as a destination location. The center’s open-air architecture speaks to California’s Spanish colonial history, with stucco archways and tile roofs that are reminiscent of the state’s historic missions. However, the color scheme is more modern, with bold taupes, golds and autumnal oranges. “The beauty of the surrounding landscape of Tejon Ranch, with the mountains as our backdrop, and shopping doesn’t get much better,” said Brian P. Hassett, general manager of The Outlets at Tejon. The Outlets at Tejon, being built as a partnership between the Lebec-based Tejon Ranch Co. and New York’s The Rockefeller Group, a real estate developer, is expected to boost local sales tax revenues by nearly $1.3 million a year and create between 1,500 and 2,500 jobs. A version of this article appeared in The Bakersfield Californian.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

Bank with a relationship team that makes it our business to know yours

Wells Fargo places special focus on building long-term customer relationships. Our local commercial bankers take the time to listen and learn about your retail business ventures, so we can offer you informed recommendations, relevant solutions, and rapid credit decisions. Whether new shopping center construction, expansion, or renovation, Wells Fargo offers specialized financial services for retail development. In fact, Wells Fargo is proud to have provided financing for the construction of the Outlets at Tejon, Kern County’s newest, high-end outlet shopping destination, opening in August 2014. To find out more about how Wells Fargo can help finance your next retail development project, contact: Bakersfield Commercial Banking Office Geraud Smith, Regional Vice President ĆŒ 661-637-2610 ĆŒ geraud.b.smith@wellsfargo.com Jeff Stone, Regional Sales Manager ĆŒ 661-637-2632 ĆŒ stonejb@wellsfargo.com Wells Fargo Commercial Banking Term loansÉ„ĆŒÉ„Lines of creditÉ„ĆŒÉ„Equipment financingÉ„ĆŒÉ„Real estate financingÉ„ĆŒÉ„Treasury management ĆŒÉ„Risk management and insurance*É„ĆŒÉ„Investment banking*É„ĆŒÉ„Employee benefits

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KERN BUSINESS JOURNAL

Aug. / Sep. 2014

Q&A

Conversation with Outlets at Tejon’s general manager

I

n March, The Outlets at Tejon appointed Brian P. Hassett to serve as the new center’s general manager. Hassett brings with him more than 25 years of experience in the retail industry, with 10 of those years focused on outlet retail. Prior to coming to Tejon, Hassett served as the general manager for the Camarillo Premium Outlets and its later addition, the Promenade at Camarillo Outlets. During his time at the Camarillo Premium Outlets, the center grew from 120 designer and name brand stores to 160, becoming the second largest center in the Premium Outlets portfolio and the largest outlet center on the West Coast, with 14 million visitors annually. Previously a resident of Ventura County, Hassett worked extensively in the community, serving on the board of directors for Studio Channel Islands Art Center, as treasurer and director of event sales. He was also an active member of the Camarillo Chamber of Commerce, where he served as board member and Business Advocacy Committee chair; board member, vice chair and Resource Development Committee chair of the Boys & Girls Club of Camarillo; and an Advisory Committee member of Saving Lives Coalition of Camarillo. He recently relocated to Bakersfield. Hassett recently answered questions posed by the Kern Business Journal about the future of The Outlets of Tejon and his position with the organization. What is an outlet mall? At the Outlets at Tejon, guests will enjoy shopping the best designer and brand names, while saving 25 to 65 percent off every day. When customers shop at an outlet or factory store, they’re able to select from a designer’s entire collection, rather than just a few pieces of a collection that a department store chooses to offer. Outlet shoppers also tend to spend more time and visit more stores than regional malls, with the average shopping visit to an outlet center being approximately 3.5 hours. Outlet centers are also considered a major tourist destination, with shopping being one of the top three things to do while traveling. Where will The Outlets at Tejon shoppers come from? The Outlets at Tejon expects the majority of our shoppers will come from the Bakersfield area. But we are also expecting to attract a large percentage of shoppers from the Northern Los Angeles County area and from the millions of people driving past the center along I-5 every year. You spent the last 10 years managing the popular outlet mall in Camarillo. Why did you decide to move to Kern County? I worked directly for the outlets in Camarillo for 10 years, but also worked within

Brian P. Hassett

the center as a store manager for five years. I was the general manger during a major expansion, which took the center from 120 stores to over 160 stores. I am very proud of my time there, growing the center to become the largest tax revenue generator and largest tourist destination for Ventura County. But once we hit those benchmarks, my goals had been achieved. I thrive on challenges and when this opportunity presented itself, I knew it was one I couldn’t turn down. I moved to Kern County without hesitation. I grew up in Maine and the state’s motto is, “The Way Life Should Be.” But I’m finding that to be true here, as well. What lessons learned in Camarillo will you apply to The Outlets at Tejon? I learned many great lessons that can be applied to The Outlets at Tejon. Community outreach and becoming engrained within the area is vital for the success of any business. I was fortunate enough to serve on community and civic boards and learned the value that those organizations bring to your business. My skill set is to provide the best service and give customers more than they expect. Always listen and be open to suggestions, because you never know where a great idea will be generated. A shopping center may not seem like it has great impact to a certain area or region, but it most certainly does and will do so for a very long time. How will The Outlets at Tejon compare to others in California and the nation? The Outlets at Tejon is the first newly built outlet center in Southern California in over 10 years. It will offer guests a shopping experience a cut above typical outlet or regional mall experiences. The center will offer visitors a beautiful and comfortable environment with features, such as a fireplace and fountains, and include amenities, such as family and country club quality restrooms. However, the wide mix of brand names and designers will be the main reason to visit. With stores, such as the only Pottery Barn Outlet in California, or west of Texas

By the numbers The Outlets at Tejon, a partnership between Lebec-based Tejon Ranch Co. and New York’s The Rockefeller Group, opened to the general public on Aug. 7. Here are some numbers Tejon Ranch provided about the project:

Size

• 43 acres east of Interstate 5 at Laval Road • 321,000 square feet of developed space (interest from outlet retailers has prompted the center’s owners to begin work on expanding it to 500,000 square feet)

Jobs

1,500 to 2,500, estimated by Tejon Ranch

for that matter, and many stores making their first appearance in Kern County, like H&M, Michael Kors, J. Crew, Tommy Hilfiger, A’GACI, and more, The Outlets at Tejon is California’s new brand in outlet shopping. Add to that the beauty of the surrounding landscape of Tejon Ranch, with the mountains as our backdrop, and shopping doesn’t get much better. Do you plan to include entertainment, dining and lodging in The Outlets at Tejon? The Outlets at Tejon will offer visitors many dining options within a large food court, including seating inside and outside on our patio. We will also have a sit down restaurant within the center. The Outlets at Tejon will not have lodging onsite, but there are many hotels in close proximity. At this point, our main focus is to entice guests to visit by offering the best shopping experience within Kern County. What special events are you planning for the months following the Aug. 7 opening?

Sales and tax revenues

• $128.4 million per year (projected, based on an outlet industry “standard” of $400 per square foot) • $1.28 million per year (projected) in sales tax revenues to Kern County • Development cost: $90 million, including the land’s value

Who’s shopping?

Tejon Ranch Co. expects to see 10 million shoppers the first year, and more in the future. It sees its “resident shoppers” as the 3.2 million people living within an hour’s drive of the center. Here’s where the company thinks customers will come from: 60 percent, residents of greater Bakersfield; 20 percent, residents of northern Los Angeles County, including Santa Clarita and the Antelope Valley; and 20 percent, travelers on Interstate 5.

In conjunction with the opening, The Outlets at Tejon hosted a special VIP Event on Wednesday, Aug 6. Several local charities sold $25 tickets for the event, with all proceeds benefiting the charities. The Outlets at Tejon opened just in time for back to school shopping and we will soon be starting the holiday shopping season. At this point our focus is welcoming everyone to The Outlets at Tejon and exceeding everyone’s expectations. Once the center opens, stay tuned for more exciting announcements and promotions. The first Christmas shopping season at The Outlets at Tejon will be a big deal. Are you planning special events? The Outlets at Tejon will have many events to entice shoppers to visit during the busy holiday shopping season, but at this time we are focused on our Grand Opening. We encourage shoppers to visit our website (www.tejonoutlets.com) for current happenings and to sign up for our VIP Club, giving savvy shoppers the best information to enhance their shopping experience.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

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GRAND ISLAND VILLAGE

Located in the heart of Seven Oaks, Bakersfield's most elegant master planned community, is one of the area’s most convenient, inviting neighborhood/specialty style shopping centers. Grand Island Village has already attracted the attention of several trusted and highly respected local and national brands that aim to cater to the discerning residents living in the area.

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KERN BUSINESS JOURNAL

American Tire expands lease in Paramount Logistics Park

Aug. / Sep. 2014

Downtown

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oll Real Estate Development LLC, the commercial real estate development division of Roll Global, has signed an additional 300,000-squarefoot-lease with American Tire Distributors Inc. at its Paramount Logistics Park. The expanded lease comes only six months after American Tire signed a 1 millionsquare-foot-lease on a new build-to-suit facility. American Tire currently occupies 295,000 square feet at the park. “American Tire is rapidly expanding its West Coast operations, and even with a truncated timeline in place, we were able to accommodate their business needs yet again,” said John Balestra, president of Roll Real Estate Development. “With more than 1,625 acres and 26 million square feet of in-place entitlements at the park, companies like American Tire have few limits when it comes to business growth and footprint expansion.” American Tire’s additional lease confirms Paramount Logistics Park’s location in Shafter as the center point for West Coast distribution. Due to the Park’s proximity to Highway 99, I-5 and Highway 58, American Tire is able to efficiently distribute to its local warehouses throughout the west. Paramount Logistics Park provides access to 65 million people within a two-day truck turn and convenient dual port access to the Ports of Los Angeles/ Long Beach and Port of Oakland. The project is also rail-served by the Burlington Northern Santa Fe (BNSF) Railway’s mainline. Roll Real Estate broke ground on American Tire’s 1-million-square-foot build-to-suit distribution center on April 9 and began tilting the concrete walls on June 26. Completion of the facility is scheduled for the end of 2014. General contractor Millie & Severson Inc. is constructing the building. RGA, Office of Architectural Design is responsible for both the design of American Tire’s 1 million-square-foot facility, and the recently completed facility in which American Tire signed its most recent lease. — Roll Real Estate

BAKERSFIELD CALIFORNIAN FILE PHOTO

Cultural and social events, such as this Latination art show, are typical downtown Bakersfield activities.

Downtown Business Development Corp. helps shape area’s future By Kevin Bartl

A

lthough 2014 is the 60th anniversary for the Bakersfield Downtown Business Association, this year, the DBA is celebrating the first year of the creation of its 501(c)(3) – the nonprofit Downtown Bakersfield Development Corp. (DBDC). Financial need prompted creation of the corporation. In recent state budget cutting, funding for local redevelopment agencies and projects was eliminated. The corporation was formed to generate funds in a tax-free environment to fill the gap and to benefit the entire downtown community. The goal is to create a safe, secure and welcoming atmosphere in the heart of our city, paving the way for private investment to develop “infill projects.” The corporation was formed from the vision of longtime DBA board member and past chairman Bob Bell. Underwriting has been guided by DBA board member Zelma Frankhouser. The effort is enhanced by the corporation’s strong board of directors, its mission and vision, and work that has started on creating a plan for downtown Bakersfield to move forward. That plan has led to the hiring of PlaceWorks, a firm headed by Randal Jackson, to come in and organize the process of

redevelopment – identifying the needs of our citizens and business community, utilizing our strengths and downtown assets, and most importantly, formulating a “plan of attack.” The beginning of this process was unveiled at February’s State of the Downtown Breakfast, where Jackson’s presentation captivated the room. Jackson’s four-decade-long resume includes him guiding projects up and down the West Coast. The DBA hopes to tap this vast experience to bring improvements to downtown Bakersfield. In May, the public process of developing a plan began. Public feedback regarding the present and future of downtown Bakersfield was collected during city center events and during an urban planning workshop. These comments have been compiled and presented to the Bakersfield City Council’s Planning and Development Committee. The DBDC envisions the continuation of a transformed downtown, which will become a vibrant, 24-hour community that serves as the hub of city activity. Expected to be included in the plan are features that encourage creation of increased walkability, green spaces, education and health districts and public gathering centers. The DBDC’s mission is to make whatever plan is developed become a reality. The DBDC will roll out the red carpet for the influx of new business and increased housing

opportunities that are sure to follow. Downtown Bakersfield already boasts award-winning restaurants of every culinary taste. It is the center of the arts community, with the Bakersfield Museum of Art and a concentration of studios, galleries and events. With Rabobank Arena and Convention Center and the Fox Theater, downtown is the focal point for entertainment and night life. And it is naturally the seat of our local government. But with the Central Park at Mill Creek, the U.S. Courthouse, Q Street improvements and Sister City Gardens, as well as recent private redevelopment projects, such as the Padre Hotel, San Joaquin Community Hospital’s Cancer Center and Maya Cinemas, the heart of Bakersfield is showing renewed promise and its future has never been brighter. The DBA has a long list of projects it has helped come to fruition over its 60 years in Bakersfield. The organization’s footprints can be recognized throughout the downtown community. But the formation of the DBDC may prove to be its biggest and most important undertaking yet. To get involved or learn more about these planning efforts, contact the Downtown Business Association at 325-5892 or go online at www.bakersfielddba.com. Kevin Bartl is chairman of the Downtown Business Association.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

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Architectural gem helps fuel downtown renaissance

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new buyer picking away at the façade of an old Bakersfield building this spring unearthed an architectural gem and added fuel to already intense interest in bringing a renaissance to the city’s downtown. Sam Abed purchased a boarded-up building on the northeast corner of Chester Avenue and 18th Street with plans to renovate the structure and recruit tenants. But as Abed and workers took down the stucco façade, they uncovered neoclassical architecture shaped by red bricks and adorned by 18-foot windows. Built in 1910, the building first served as The Security Trust bank. Later it became an old-fashioned drug store with soda fountain. Architectural historians believe the exterior was likely covered with stucco during the 1970s push for modernization, which followed the massive 1952 earthquake that crumbled many downtown buildings. That this building is still standing is a credit to its original construction. In more recent years, the building was home to a series of restaurants, including Tiny’s Coffee Shop, Bea’s Loft, Michael’s Loft, City Lights and Tapas. The concrete and brick structure has been empty since

BAKERSFIELD CALIFORNIAN FILE PHOTO

This circa 1910 photo shows The Security Trust Bank at the northeast corner of Chester Avenue and 18th Street.

BAKERSFIELD CALIFORNIAN FILE PHOTO

As workers this spring ripped away at the façade of a boarded up building in downtown Bakersfield, they uncovered an architectural gem.

2002, when a fire damaged the roof. Abed said he was convinced to invest in downtown Bakersfield after closely watching the district’s renaissance in recent years: the resurrection of The Padre Hotel, the opening

of new restaurants east and west of Chester Avenue, and the development of the art scene. Since renovation began, Abed reports having a steady stream of onlookers, many

taking photographs of the early 1900s architecture as it is revealed. “Here’s the funny thing,” Abed said. “We are seeing a lot of action from restaurant owners who want the location.” But he said its strong exterior and inviting interior might also work as a law firm, a government building, or even as a bank, its original use. It’s really up to the next tenant, or owner, Abed said. This story has been excerpted from reports in The Bakersfield Californian.

FOR LEASE 4045 Stockdale Highway

Professional office space available in a central location with high visibility. 4045 Stockdale Highway is a ground-level general office suite improved with a mix of private offices and eight permanent cubicles. The suite also features private restrooms, break room, walk-in vault, and additional basement storage. The space includes custom cabinetry, a built-in reception desk with granite countertop, and other custom finishes. The property is zoned C-O Professional and Administrative Office within the City of Bakersfield, allowing for a variety of commercial and general office uses. Monument signage is available along busy Stockdale Highway, which boasts traffic counts of approximately 35,000 ADT. No additional fees for common area maintenance or “triple-net” charges, and UTILITIES ARE INCLUDED!

FOR SALE: Tract 6336

Approved Vesting Tentative Tract Map 6336 is an 18.32 acre proposed residential and commercial development on Weedpatch Highway, north of Lamont, CA. Tract 6336 is designed for eleven estatesized, one-acre residential lots and six planned office/retail commercial buildings totaling approximately 40,000 square feet of improved space. Tract 6336 is one of the last remaining projects in the County of Kern to be approved for septic tank use on lots under 6.5 acres in size. The owner has completed many of the development requirements including obtaining a highway dedication easement approved by CalTrans, soils investigation and sewage feasibility study, and water and sewer line easement.

FOR SALETract 6417

Approved Vesting Tentative Tract 6417 features 26 proposed buildable single-family lots south of Bakersfield. Average lot size of 1.12 acres. Tract 6417 is one of the final tracts to be approved prior to the County of Kern enacting a minimum six-acre lot for homes serviced by septic tanks. Property is zoned E(1)RS in the County of Kern. Property is on the SWC Costajo Road and Shafter Road, South of Bakersfield. Highway 99 south to Bear Mountain Boulevard, North on Costajo to Property.


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Aug. / Sep. 2014

Bolthouse Occidental Petroleum announces subsidiary’s leadership team

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odd A. Stevens has been named president and chief executive of California Resources, Occidental Petroleum Corp.’s proposed subsidiary. The longtime Los Angeles company announced in February that it was moving its headquarters to Houston and would spin off its California operations and assets into a separate publicly traded company. In early June, the new subsidiary filed documents with the U.S. Todd A. Stevens Securities and Exchange Commission with the name California Resources Corp. Prior to assuming his new position with the proposed subsidiary, Stevens was vice president, corporate development, where he led Oxy’s growthfocused initiatives, including mergers and acquisitions, land management and worldwide exploration. Previously Stevens served as vice president, acquisitions and corporate finance, as well as vice president, California operations. During his 20 years at Oxy, he has managed or been involved in more than $18 billion in transactions. Before joining Oxy in 1995, Stevens was an investment banker with Hansen Capital, where he evaluated mid-market companies. He also served as a U.S. Army infantry officer at the U.S. Army National Training Center. A native Californian, Stevens graduated from Bakersfield High School. He holds a bachelor of science in engineering management from the United States Military Academy at West Point, and an M.B.A. from the University of Southern California. William E. Albrecht, Occidental’s vice president since 2008 and president of Occidental Oil and Gas Americas since 2011, was named executive chairman of the board at California Resources. He joined Occidental in 2007 as vice president of California operations. Occidental Petroleum continues planning for the separation of its California operations later this year, when California Resources Corporation will be a stand-alone, independent oil and gas company. — Kern Business Journal

Commercial, residential fuels Seven Oaks area projects By Laura Wiener

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he Seven Oaks area continues to be one of the most rapidly expanding sectors of the city. The southwest Bakersfield region has seen unprecedented commercial, residential and retail development over the past few years. Master planning, with the goal of offering homeowners the convenience of working and shopping within minutes of their neighborhoods, has been key to the area’s desirability. Coming soon are the fresh elegant communities of single-family residences being developed by Woodbridge Pacific Group. In addition to ideal location, the new Seven Oaks neighborhoods are being designed with innovative features, such as multipurpose walking trails and parks, community centers, and additional features determined by input from Bakersfield’s potential new buyers. An additional residential project is coming this November. Fuller Apartment Homes will open Park Square at Seven Oaks, a gated community of 224 luxury apartments. The new neighborhoods offer fresh, beautifully designed housing options to those who work in the area that has long included State Farm Insurance, Chevron, Aera Energy LLC, Oxy/Vintage Petroleum, California State University, Bakersfield, and Dignity Health and Mercy Southwest Hospital, which recently announced a 120-bed tower expansion. New commercial development, just south of Ming Avenue and Buena Vista Road, will mean Seven Oaks Business Park will bring hundreds of new jobs to the corridor. Now home to Houchin Community Blood Bank and the newly completed administrative headquarters of Kern Schools Federal Credit Union, the Business Park continues to grow. Seneca Resources Corp. will soon be opening its 15,000-square-foot West Division office. Also under construction is The Village at Seven Oaks, Assisted Living and Memory Care. Others coming to the Business Park are Hoffmann Hospice’s inpatient hospice home and DaVita Dialysis. A project of Bolthouse Development Co. LLC, Seven Oaks Business Park is attracting positive attention from some of the area’s finest businesses. With this commercial growth, it’s natural to find the area’s new retail space moving quickly. The Grand Island Village center, located at the corner of Ming Avenue and Buena Vista Road, is one example. Within the center, which has been architecturally designed to fit into its elegant

PHOTO COURTESY OF BOLTHOUSE DEVELOPMENT CO. LLC

Wiki’s Wine Dive & Grill is one of the many popular restaurants and shops in Bolthouse Development Co.s’ Seven Oaks Business Park.

neighborhood surroundings, are some exceptional tenants. With Phase I now fully leased, Grand Island Village recently began construction of Phase II, where retail space is still available. The Dewar family selected Grand Island Village to launch their first Express DriveThru location. “The location has been ideal for us,” said Heather Dewar. “Local businesspeople and students from Stockdale High School drive through on quick breaks, and families on their way home from sports during the week appreciate the convenience. Our walk-in customers tell us how happy they are we chose this part of town for our third location.” Just across the center, locally owned Wiki’s Wine Dive & Grill offers casual gourmet dining and wine pairings, and next door is Sully’s Petroleum/Chevron gas station and convenience store, which offers a high end selection of fine wines and beers from around the world. Valley Republic Bank, a successful and well-respected local community bank, opened its second branch in the Grand Island Village in 2012 to offer added convenience to their southwest business and individual customers. “Grand Island Village is Bakersfield’s

premier neighborhood center located in the heart of significant growth in southwest Bakersfield,” said Bruce Jay, Valley Republic Bank’s president and CEO. “The exceptional growth we’ve experienced, along with positive feedback from our existing southwest customers reaffirm that the location was an ideal choice.” The first phase of the center also includes a CVS Pharmacy, Grand Island Dentistry, Jersey Mike’s Subs, Sports Clips, Elegant Nails and Spa, and Bakersfield Eye Care. Phase II will include Sol y Luna Mexican Cuisine, a 4,500-square-foot fine dining experience, complete with an outdoor patio. For salon and day spa services, Opulent Salon Di Bellezza will be opening in Grand Island Village. For fitness, watch for the 30,000-square-foot In-Shape Facility, complete with a spa, outdoor pool, state-of-the art equipment and personal training. As the corridor grows with purpose — working, living, raising a family, relaxing, and shopping — Seven Oaks community should continue to grow in its appeal.

Laura Wiener, the owner of Spectrum Communications in Bakersfield, wrote this article on behalf of Bolthouse Properties LLC.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

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Tech Talking

Taking your tablet on the road to do ‘real work’ By David A. Milazzo

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his month, the majority of readers’ questions dealt with mobile documents:

How do you edit word processing and spreadsheet documents while on-the-go? How can you create (non-boring) presentations? Where do you store all the files? What about adding signatures to documents I receive? Well, kind readers, I bring great news. While tablets began their existence as excellent content consumption devices, content creation took a while to come to fruition. But with Apple and Microsoft providing strong office software for the iPad, the ability for you to break-up with your laptop is now realistic. If you’re more of a Microsoft purist, you may prefer their suite of apps; Word, Excel and PowerPoint are finally available for the iPad and may be purchased along with the Office 365 subscription for $99/ year. Apple’s collection of office apps — Pages, Numbers and Keynote — are now included for free with all new iPad David A. Milazzo purchases. And the interface is gorgeous, offering streamlined templates to get you closer to a completed document before you’ve even begun. It’s important to note that Microsoft uses its standard .docx, .xlsx, and .pptx file formats — but Apple’s suite can edit and save in the very same Microsoft formats. So collaboration on documents with your PC pals is a no-brainer, whichever way

you choose to go. And the next time you need to create a compelling presentation, take Keynote out for a spin. It is a breath of fresh air that will help your presentation rise above the sea of snoozer PowerPoints. Not only is Keynote a joy to use, the built-in transitions and animations are stunning. If you want to keep your audience’s attention, start with a winning outline; don’t use too many words on your slides; and build it with Keynote. But now that you’ve created all these wonderful files, where do you keep them? They could live on your device, but the real joy of the mobile experience is the portability of your files — being able to get to them easily from anywhere. The cloud-based storage marketplace is on fire. The list of contenders is long, but a few of the majors are Dropbox, iCloud (Apple), OneDrive (Microsoft), and Google Drive. All provide

capable storage-in-the-sky, but each bring their own take to the solution. A current favorite is Dropbox as its platform agnostic. But sometimes a combination of services can serve you well; if you can keep track of where different items go. As I use Apple’s apps for office documents, I keep these syncing in iCloud, where my latest versions of Pages, Numbers and Keynote documents stay up-to-date on each of my Macs and iGizmos. But for PDFs and other miscellaneous documents, I pop those into Dropbox — which I can also access from any device. If you are a heavy Microsoft user, you may take more advantage of OneDrive. And Google Drive is a strong offering if you spend your time on the Android platform. Each have a free level and multiple tiers of paid levels so take a peek at the fine print before making your final choice. Finally, signing documents, both your own or from others, is a cornerstone of business correspondence. A PDF app like PDF Expert 5 ($10) can do more PDF acrobatics than you can shake a stick at. Filling out digital forms, annotation and markup, applying your digital signature — it’s all there. So this summer, load up the iPad with your favorite set of office, storage and PDF apps and have that difficult conversation with your laptop: “It’s not you; it’s me.” David A. Milazzo is the founder and principal of Bakersfield-based Macroscopic, an Apple enterprise technology consultancy focused on bringing Mac and iOS technologies to businesses, schools, agencies, and independent professionals. Send your questions to him via email at milazzo@macroscopic.net.


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Aug. / Sep. 2014

Valley Plaza

Valley Plaza continues to grow for today’s shoppers

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risti Jackson is the marketing manager of Valley Plaza in southwest Bakersfield. Jackson recently answered questions posed by the Kern Business Journal about the regional mall – its past, present and future. How has Valley Plaza Mall evolved since its opening in 1967?

Kristi Jackson

Valley Plaza is the largest mall in Central California’s San Joaquin Valley, conveniently located off Highway 99 and Ming Avenue. The original mall was built in 1967, anchored by Sears, Brocks department store and Broadway. The mall included several in-line tenants, along with a two-screen movie theatre. The center underwent two expansions: Phase I was completed in 1986, adding space on the east side of the property for new retailers and a new anchor store, JCPenney. This expansion also provided a two level parking structure next to JCPenney to accommodate additional shoppers. Phase II was completed in 1988 and included the addition of new stores between Sears and May Company. This expansion also featured the opening of the Oasis Food Court, with nine different food vendors and seats to accommodate 500 people. In 1998, the center was purchased by Chicago based General Growth Properties, the second largest retail property REIT in the U.S., owning 120 regional malls. Shortly after the ownership change, the demands of a growing Bakersfield market warranted the addition of a state of the art 16-screen stadium seating theatre, which opened in May 1999. The next step was a mall-wide renovation in 2002, focusing on improved common areas, mall entrances and family restrooms. The most recent expansion occurred in October 2010, with the addition of a 147,000-square-foot Target store opening near Red Robin and Que Pasa. Today, the center occupies 1.2 million square feet of building area. JCPenney, Macy’s, Sears and a fully-renovated 97,000-square-foot Forever 21 complete the anchor line-up. The center is rounded out by great brands, including Aveda, Banana Republic, Build-A-Bear, Sephora, Bebe, Coach, Cache, Swarovski, bareMinerals, a 16-screen Reading Theater, Oasis Food Court, food court patio and 145 shops and services. As Kern County’s regional shopping center, what role does Valley Plaza fill in meeting the area’s retail needs? Valley Plaza has the largest selection of exclusive stores in the market -- all set in a desirable family friendly atmosphere. For stylish fashion conscious women, ages 18 to 45, it is the preferred shopping center in Central California’s San Joaquin Valley, bringing in first-to-market retailers ahead of competitors, including Apple, Francesca’s Collections, Earthbound Trading, Azkara, ANGL, Teavana and PINK. What are the differences between a regional shopping center, community shopping center and outlet mall? Community centers offer a wide range of goods and services. They usually feature two anchor stores, including a discount department store. Community centers usually feature a retail area of 100,000 to 350,000 square feet and serve a primary area of three to six miles. A regional shopping center is designed to service a larger area (15 miles). As such, it is

Photo courtesy of Valley Plaza

Valley Plaza, which includes 1.2 million square feet of building area, features a 16-screen Reading Theater, Oasis Food Court, food court patio and 145 shops and services.

approximately 400,000-square-feet to 800,000-square-feet and has at least two or more anchor stores. These centers provide a wider selection of stores offering premium quality merchandise and unique services. Outlet malls service large trade areas and are often operated by retailers selling returned goods, discontinued items and typically lesser quality merchandise at reduced prices. Is Valley Plaza more than a shopping area? Valley Plaza is a family-friendly center that offers the complete shopping experience. Shoppers have a wide variety of clothing, cosmetic, accessory, specialty and service stores available. Our sit-down restaurants, Red Robin Gourmet Burgers and Que Pasa Mexican Café, provide a great start to “dinner and a movie” night. Our 16-screen Reading Theatre has all the latest blockbuster movies, with discounts for children and students. In addition, there are eight popular eateries in our Oasis Food Court, with additional food court patio seating. Looking ahead, 2015 will offer families our first ever Kids Play area, an additional national sit-down restaurant, Lucille’s Smokehouse Bar-B-Que, and community and exclusive store events. How have customer shopping habits changed over the more than three decades since Valley Plaza opened? Shoppers have always desired great values, superior merchandise and a plethora of choices. By continuing to bring the most desirable retailers to the city, providing convenient amenities in an enjoyable environment and rewarding our most loyal customers, Valley Plaza endeavors to stay ahead of the curve in offering the best in-class shopping center in Kern County. What is new to Valley Plaza? Valley Plaza Mall announced the opening of new stores to kick off the summer season – Hallmark Gold Crown, Fast Fix

Jewelry and MAC Cosmetics. Lucille’s Smokehouse Bar-BQue will debut at the center in 2015. Hallmark Gold Crown: On May 21, Hallmark Gold Crown opened in an approximately 4,000-square-foot store, located across from JCPenney. Hallmark carries the largest selection of Hallmark greeting cards, stationery, gifts and gift wrap, as well as products for decorating and entertaining, personal accessories, baby and kids’ gifts, and gourmet food and candy. As Hallmark’s premiere channel of distribution, many of Hallmark’s innovative new product collections will debut in the Valley Plaza Mall location. Fast Fix Jewelry: Fast Fix Jewelry is in a nearly 600-square-foot location across from JCPenney. The store offers jewelry repair and watch repair services, which can be done while shopping at the mall. Fast-Fix is the world’s largest jewelry repair store located in a mall and provides customers with jewelry cleaning, polishing, ring sizing, pearl and bead restringing, engraving services and jewelry design. MAC Cosmetics: Mac Cosmetics is located between Macy’s and Sears in roughly 1,645 square feet. The store brings fashionistas and beauty junkies professional makeup artist quality cosmetics, including more than 100 shades for eyes, lips and face. MAC Cosmetics features trends from the runways and seasonal how-to’s. The brand’s product range includes eye shadows, lipsticks, lip glosses, all types of foundations, concealers, nail polishes, stage makeup, and mascara. What do you see on the horizon? Lucille’s Smokehouse Bar-B-Que: Lucille’s Smokehouse Bar-B-Que puts savory barbecue in all of the restaurants signature dishes, including the salads. Lucille’s picks up culinary inspiration from some of the best barbeque shacks in the South. They have a variety of items on the menu from ribs, chicken, sandwiches burgers and salads and a gluten free menu. Lucille’s restaurants are reminiscent of a Southern roadhouse, replete with its distinctive front Southern décor.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

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About Valley Plaza

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ocated at Ming Avenue and Highway 99 in southwest Bakersfield, Valley Plaza is a 1.2-millionsquare-foot enclosed mall that features about 145 shops and services, including a food court, restaurants and detached movie theater. It is currently owned by General Growth Properties Inc., which owns more than 120 regional shopping malls in 41 states.

History Valley Plaza Shopping Center, which is now called Valley Plaza Mall, opened its doors in February 1967. The shopping center was developed by Hahn Company of San Diego in partnership with John Brock Sr. of Brock’s Department Stores. The original enclosed shopping center had 900,000 square feet of retail space and three anchor stores – Sears, Broadway and Brock’s.

Expansions In 1986-88, the center underwent two expansions: Phase I was completed in 1986, adding space on the east side of the property for new retailers and a new anchor store, JCPenney. This expansion also provided a

two-level parking structure next to JCPenney. Phase II was completed in 1988 and included the addition of new stores between Sears and May Company. This expansion also featured the opening of the Oasis Food Court.

Mall’s purchase In 1998, the center was purchased by Chicago, Ill., based General Growth Properties. Shortly after the ownership change, a 16-screen stadium seating theater now operated by Reading Cinemas opened. In 2002, the mall underwent an extensive renovation that focused on improving common areas, mall entrances and family restrooms.

Anchor store line-up The most recent expansion occurred in October 2010, with the addition of a 147,000-square-foot Target store opening near Red Robin and Que Pasa restaurants. Today, JCPenney, Macy’s, Sears and Forever 21 complete the anchor line-up. Broadway was purchased by Macys. Brock’s was purchased by Gottschalks, which later closed. The renovated Brock’s-Gottschalks space is now occupied by Forever 21. Robinson May closed and was replaced by Target.

Photo courtesy of Valley Plaza

Located at Ming Avenue and Highway 99 in southwest Bakersfield, Valley Plaza is a 1.2-millionsquare-foot enclosed mall that features about 145 shops and services, including a food court, restaurants and detached movie theater. It is currently owned by General Growth Properties Inc., which owns more than 120 regional shopping malls in 41 states.


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Aug. / Sept. Events

Greater Bakersfield Chamber of Commerce Aug. 4, 11, 18 and 25 – Strictly Business – Chamber’s live business broadcast; 10 to 11 a.m. on Bakersfield.com. Aug. 1, 8, 15 and 22 – Government Review Council; 7:30 to 8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Aug. 12 – Education Panel and Fair; check-in and networking, 11:30 a.m.; program and lunch, noon to 1:30 p.m.; $30 for members, $60 for nonmembers; Greater Bakersfield Chamber of Commerce. Aug. 25 – Good Morning Bakersfield; AB2686 (the California Water Bond headed to the ballot); check-in and networking, 6:45 a.m.; program and breakfast, 7 to 8:30 a.m.; $45 for members; $75 for non-members; $550 for table of 10; breakfast will be provided; DoubleTree by Hilton, 3100 Camino Del Rio Court. Sept. 8, 15, 22 and 29 – Strictly Business – Chamber’s live business broadcast; 10 to 11 a.m. on Bakersfield.com. Sept. 5, 12, 19 and 26 – Government Review Council; 7:30 to 8:30 a.m.; Greater Bakersfield Chamber of Commerce. Sept. 11 – Small Business Networking Breakfast; check-in and networking, 7:30 a.m.; program and continental breakfast, 8 to 10 a.m.; $25 for members, $50 for non-members; Greater Bakersfield Chamber of Commerce. This event opens the door for small businesses to find out how to do business with large companies. Sept. 24 – Social Media Therapy; check-in and networking, 11:30 a.m.; program and lunch noon to 1 p.m.; $30 for members, $60 for non-members; Greater Bakersfield Chamber of Commerce. Please visit www.bakersfieldchamber.org or call 327-4421 for more information, or to register for any of these events.

Photo courtesy of Castle & Cooke

Located just south of the Westside Parkway, between Calloway and Buena Vista on Stockdale Highway, The Shops at River Walk is a planned 500,000-square-foot shopping center that will offer a mix of fashion, specialty retail and dining options, along with services, banking and office.

Castle & Cooke’s commercial, residential growth ‘on fire’ By Shannon Medina

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akersfield’s west side is bustling with new retail developments by Castle & Cooke at the Shops at River Walk and Gosford Village. Castle & Cooke is recognized for creating beautiful shopping centers in Bakersfield. The Shops at River Walk is no exception. From its stocked man-made ponds and open grassy areas to its relaxing-sounding fountain, the shopping center, which features Contemporary Georgian architecture, is made to enhance the shopping experience. Situated just south of the Westside Parkway, between Calloway and Buena Vista on Stockdale Highway, The Shops at River Walk is a planned 500,000-square-foot shopping center that will offer a mix of fashion, specialty retail and dining options, along with services, banking and office. The first phase of development is open and anchored by Target, PF Chang’s, California Pizza Kitchen, Panera Bread, and other smaller tenants. The appeal of this location has made it a hot spot for major retailers looking to open their first stores in Bakersfield. “With much anticipation and enthusiasm, we are extremely pleased and excited to announce our new line-up at The Shops at River Walk! Teaming Nordstrom Rack, TJ Maxx, Sprouts Farmers Market, BevMo, and DSW with the already open Target will provide a tremendous amount of synergy, and a shop-

ping experience that offers a wide breadth of products and services,” said Scott Thayer, senior vice president for Castle & Cooke. Retailers such as Panera, BJ’s, P.F Chang’s, Eureka!Burger, California Pizza Kitchen and Elephant Bar have opened their first and currently only stores in Bakersfield at the Shops at River Walk. This trend continues with the highly anticipated opening of the approximately 35,000-square-foot Nordstrom Rack. Also opening their first stores in Kern County at the Shops at River Walk will be the approximately 10,000-square-foot BevMo!, the approximately 18,000-square-foot DSW, and the approximately 24,000-square-foot Sprouts Farmers Market. Construction has already started with the first of these stores to open in February 2015. Moving to the southwest, Gosford Village is a 700,000-square-foot regional center, which is located on the developing edge of the city, along Gosford Road, just north of Harris Road. This shopping center boasts major retailers, such as Wal-Mart Supercenter, Kohl’s and the only Sam’s Club in Bakersfield, not to mention popular eateries, such as Buffalo Wild Wing’s (again the only one in town), Tutti Frutti Frozen Yogurt and Chipotle. Soon to be added to this list is: Chili’s, opening near the end of the fourth quarter 2014; Pizza Rev, a build-your-own pizza bar opening early in the first quarter of 2015; and an approximately 27,500-square-foot Ross Dress for Less, also opening early in the first quarter 2015.

“The shopping center has attracted a lot of interest from national and regional tenants wanting to serve the Southwest Bakersfield market, and we’re ready to do our part in assisting with their expansion plans,” said Thayer about Gosford Village. This burst of new retail development is a telling sign of what is happening in the residential market in these areas of Bakersfield. “The positive recovery of the housing market is fueling the need for services and shopping” says Darlene Mohlke, vice president of sales and marketing at Castle & Cooke. “The expansion of the west side residential and retail centers showcases the prime locations of our shopping centers and will pave the way for our newest residential development — Highgate at Seven Oaks.” Castle & Cooke has been instrumental in the residential and retail development of the west side of Bakersfield, so it’s no surprise that their commercial developments are located closely to their residential developments, which makes for an overall master-planned community feel. Their nearby communities of Brighton Parks, Village Green, the Villas, University Park, and Windermere offer correspondingly appealing gated communities designed with parks, green-belts, community pools, and provide an overall atmosphere of security in beautiful, stress-free environment. Shannon Medina is a sales and marketing assistant with Castle & Cooke.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

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KERN BUSINESS JOURNAL

Aug. / Sep. 2014

Food Retail

Visitors find Bakersfield is a foodie town By David Lyman

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hen food lovers come to Bakersfield, they always have a memorable time. Our fun food experiences have recently been featured in Saveur Magazine, Smithsonian, Travel+Leisure, and the New York Times. Visitors are diving in and experiencing first-hand what that excitement is all about. “In no time more than 100 people were seated in three long rows of tables boarding house style,” said Peter Cashman of Highland Park, Calif. who ate at Noriega’s, the iconic Basque hotel and restaurant, during a visit to Bakersfield one recent Saturday. “A highlight of the evening was the toasts,” he said. “Periodically folks would stand, tap their wine glasses and toast their guest of honor. This added to the already collegial and joyful atmosphere. And I can still taste the garlic fried chicken and excellent pickled tongue.” Noriega’s is just one of several Basque restaurants that lure visitors here. Bakersfield has more Basque restaurants than any other city in the nation, and that cuisine from southern France and northern Spain is the food that Bakersfield is famous for. Visitors who dine family style sit at long tables pass the food down to the next person and meet people they never knew before, but who seem for the evening to be like long-lost friends. In addition to Bakersfield’s legendary Basque eateries, there are lots of local places that serve up some unforgettable dining choices, from white table cloth to Kern County casual. It might be a new trendy place in downtown’s burgeoning Arts Alive District, an old reliable dining place along Mill Creek, or a hole in the wall in Old Town Kern. Another Bakersfield institution is Luigi’s. “From the first moment in Luigi’s I was hooked,” said Brian Hassett, who recently moved to Bakersfield as general manager of The Outlets at Tejon. “I was greeted at the door by four or five deputies exiting and knew that I had found someplace good!” Like Cashman, Hassett’s experiences in Bakersfield restaurants involve both the food and the atmosphere. “Luigi’s is a neighborhood place, our server was exceptionally personable, and I left wanting more of those stuffed shells from the daily specials,” he said. “I liked it so much I have returned two more times bringing friends and family.” Because Bakersfield has grown to be California’s ninth

BAKERSFIELD CALIFORNIAN FILE PHOTO

Bakersfield City Councilman Terry Maxwell turns out a meal at TL Maxwell’s, a downtown fine-dining restaurant. Maxwell’s city council ward includes downtown Bakersfield.

largest city, it has all the usual names in chain restaurants. But it often is those local places that give visitors lasting memories. Cashman, originally from Tasmania, said he loves the breaded trout and eggs for breakfast, a rare offering in Los Angeles eateries, but not in Bakersfield. “Add to that some excellent renderings of chicken fried steak,” he said, “but gravy on the side, please, as I try to watch my waistline!” Hassett has been impressed with the selection of local dining options in the short time he has been here. “Coming from the Los Angeles area, I was not expecting Bakersfield to be a ‘foodie town,’ but I was certainly mistaken.” His other favorites so far? The Mark, Coconut Joe’s, Goose Loonies, Mama Roomba, The Padre and Buck Owens’ Crystal Palace “which was a big surprise to me because the food was exceptionally good,” Hassett said. The surprise of memorable food in Bakersfield was echoed by Cashman, who regularly visits here with a point of discovering new places to eat. “Folks down south marvel at what a great time I have dining out in and around Bakersfield,” he said. His other favorites include Village Grill, Tina Marie’s, Keene Café and the Knotty Pine.

Photo courtesy of Luigi’s

Chefs pose in the kitchen of Luigi’s, a popular Bakersfield restaurant and deli that recently celebrated its 100th anniversary.

“And,” he added, “if you can’t find something tasty and original to eat at the 24th Street Café, then you don’t deserve feeding.” David Lyman is manager of the Bakersfield Convention and Visitors Bureau.

Bakersfield Food Festivals Bakersfield is a city of food and drink. This includes hosting a variety of food festivals. Below is just a taste: BAKERSFIELD CALIFORNIAN FILE PHOTO

A waitress delivers plates to a table at the Village Grill. The popular Bakersfield restaurant is located on F Street.

• Basque Festival • Nut Festival • Wine Fest

• Greek Food Festival • Mac and Cheese Festival • Festival of Beers • Menudo Cook-Off • Biggest Baddest BBQ Championship • Village Fest • Craft Beer Fest

• Chili Verde Cook Off • Crawfish Festival For details, or to add one we missed, contact the Bakersfield Convention and Visitors Bureau, 852-7282 or www.VisitBakersfield.com


Aug. / Sept. 2014

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Aug. / Sep. 2014

East Hills Mall

City may help East Hills comeback By Theo Douglas

it’s some other government assistance program — whatever it may be, whatever it may take to bridge that gap between it sitting there vacant, those are the things that we are going to pursue.” The mall isn’t vacant — far from it. Local investor Clyde Barbeau, who has worked with Modesto-based Save Mart Supermarkets as it has purchased most of East Hills, estimated 60 percent of its retail spaces are occupied and predicted more good news

later this year. “I would say the activity over the last three to four months has been the best since we’ve been there,” said Barbeau, noting he has received a “number of inquiries about the space and outside developers showing interest. Various things like that. I will tell you that probably 30 to 60 days from now, there might be some other interest.” Barbeau declined to reveal specifics about ongoing conversations with developers, but he confirmed Save Mart still has not been able to purchase the 104,000-square-foot former Harris store space from Spain-based department store and clothing chain El Corte Ingles. He said the mall’s 250,000 square feet of interior retail space is still viable — despite having been built 27 years ago — but noted the three former department store buildings may be challenging to fill. The former Gottschalks location is 100,000 square feet; the ex-Mervyns store is 74,424 square feet. “The department stores (today) aren’t as big as they used to be because they don’t have to be,” Barbeau said, agreeing a store like Ross or Kohl’s wouldn’t be a bad fit at East Hills — “excepting you could put two in one of those spaces instead of one.” Two possible options for the three former anchor spaces could be “splitting them up or lowering the size,” Barbeau said, adding, “Maybe you’re going to end with a mixed use.” Theo Douglas is a Bakersfield Californian staff writer. A version of this article appeared in The Californian in July.

growth in our community. In anticipation of this additional growth, the Red Apple Pavilion center filed an application in late 2013 and is currently going through the entitlement process. You might wonder how a community with only 35,000 residents in the immediate area can attract this growth in such an economic climate. And while the answer might sound cliché, the truth is, we try to think outside the box. To accomplish this, we’ve conducted in-depth research to know what our core assets are (which include scenic mountains, clean air and cooler climate) and what our limitations are (we don’t have a river to raft or enough snow for ski resorts.) We also have 22,300 cars on Highway 58 each day and access to over 18 million people within a 90-minute drive. We need to find, or build the right attractions to promote. This understanding led us to conduct a feasibility study, which revealed Tehachapi is the perfect location for a year-round, liftassisted mountain bike park. Staff already is working on making the park a reality. It would be the only year-round park of its kind in operation in the entire United States,

bringing more consumers to local retailers. Our elevation and cooler climate also provides an attractive location for motocross riders looking to escape the summertime heat in the valley or the desert. To that end, the city was recently awarded a $972,500 grant to build an OHV park off of Highway 58. It will be part of our larger Event Center and Rodeo Grounds development. By constantly looking for such opportunities, we’re able to find innovative revenue sources to make big plans, big realities. All of these developments help to attract and retain large and small businesses, and the consumers to support them. We’re constantly expanding and improving in Tehachapi and helping business owners reach new heights along the way. Entrepreneurs interested in establishing a unique restaurant, bike shop, or bed and breakfast, are invited to contact the city. Michelle Vance is the community outreach coordinator for the City of Tehachapi. Information concerning the city’s business climate and retail opportunities can be obtained by calling Vance at (661) 8222200 ext. 121 or emailing her at MVance@ tehachapicityhall.com

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ast Hills Mall, which gained a first-run movie theater in 2013 — but has suffered through foreclosure and the loss of three anchor stores — could be poised for a comeback. Developer interest in the mall, which drew shoppers to Mervyns, Gottschalks and Harris before all three closed during the 2008-09 downturn, has risen dramatically this year, a local investor said. Now, the city of Bakersfield is getting involved. Vice Mayor Ken Weir, a councilman representing northeast Bakersfield, including the mall, has asked city staff to add it to a list of economic opportunity areas, in hopes of assisting developers and business owners. “It’s ... just my thought on this, since we’ve lost redevelopment (funds), the city’s been looking into ways we could assist businesses,” Weir said, referring to the state’s dissolution of redevelopment agencies. The city will designate an area bounded by Haley, Columbus, Oswell and Bernard streets as an economic opportunity area, Community Development Director Doug McIsaac said. Commercially zoned land on the east side of Oswell, between Columbus and Bernard, also will be included. Redevelopment agencies — which allowed cities to use a portion of state property tax money to improve themselves — were dissolved by the California Legislature in

BAKERSFIELD CALIFORNIAN FILE PHOTO

East Hills Mall, which opened in 1988, has experienced several economic setbacks. Current developers are hoping investors will turn around the northeast shopping center’s fate.

February 2012. In an effort to help property and business owners help themselves, Community Development staffers will create a database of economic incentives available, and then work with property owners who are interested in applying. “We had four areas we had identified prior to this. Now there will be a fifth,” McIsaac said. “Whether it’s grants, whether it’s just putting the right people together, whether

City of Tehachapi seeks right retail balance By Michelle Vance

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he world of retail can be a difficult road to navigate for any size community, but especially a smaller one. Focus too much on large box stores and you’ll lose the independents that fill your Main Street and downtown district. On the other hand, if you don’t provide the attraction and infrastructure for large retailers, you’ll lose not only tax revenue, but also consumers as they travel to larger cities or use the Internet to shop. In Tehachapi, we constantly strive to find the right retail balance for our city and utilize smart planning to ensure a prosperous community for years to come. As a result, we have a thriving downtown district full of independent retailers that serve our local consumers and travelers. This helps to keep not only the charm of our community intact,

but it allows strong opportunity for property and local business owners. Tehachapi is a good example of what can happen when the right balance is struck. Over the years we have grown significantly. Despite the difficult economic times, we have just been named the 10th fastest growing retail market in California by the California Retail Survey. Tehachapi had an 8.4 percent growth rate over the last five years. We also believe we have a lot more growing to do. In fact, according to the recent Wal-Mart Urban Decay Study, Tehachapi currently has a “retail leakage” of $73.3 million, which means local consumers are still spending that much each year out of town and on the Internet for general retail, home goods and furnishings. This translates into a need for over 250,000 square feet of additional retail


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Small, micro business dominate local retail market By Jose Granados

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n Bakersfield, there are more than 3,600 businesses whose core transactions are retail based. Collectively, these retail businesses employ more than 30,000 adults and generate close to onefifth of the local gross domestic product. This market sector is predominately made up of small and micro businesses. As of 2013, there were more than 2,800 small or micro retail businesses in Greater Bakersfield – retail businesses with less than 10 employees. These small retailers make up 80 percent of local businesses in the retail market sector, and together, they generate one third ($2.1 billion) of total retail sales revenue ($6.3 billion). Two thirds of total sales revenue ($4.2 billion) is earned by larger retail businesses with 10 or more employees. Clearly, Bakersfield’s retail market is very competitive, especially for small and micro businesses. However, a closer look at the data reveals that small and micro retail businesses have some advantages over their larger competitors. For example, employees at small and micro retail businesses are more productive, based on retail sales. On average, retail sales revenue per employee is 46 percent higher for small and micro retail businesses ($224,055), compared to retailers with 10 or more employees ($153,732). Additionally, the lifestyles and demographic composition of Bakersfield’s consumers are shifting, reshaping the landscape for retailers and leading to opportunities in specific consumer market segments. This new landscape often favors small and micro retailers that are nimble and closely connected to their customers. To be successful in this changing market environment, small and micro retail businesses must recognize and adapt quickly to new consumer preferences and needs. An effective response to these market shifts can be the stepping stone for a more competitive market position. A growing consumer segment of adults age 20 to 39 is driving these market shifts in Bakersfield and Kern County. Led by the Millennial Generation, this segment is on a distinct and untraditional life journey, especially compared with prior generations. They are creating new consumer preferences and new market opportunities along their journey. Currently this segment makes up 29 percent of Kern County’s adult population, up 30 percent from the 2000 Census. Marital status, race diversity, political affiliation, social and environmental conscience are among the top characteristics differentiating this consumer segment from older adults. This segment is not as affluent as prior generations, however, their lifestyle helps make up for the difference in income. This

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segment of the population does not mind sharing living spaces. Half of these adults have never married and more than 60 percent of these younger adults rent or have alternative arrangements, such as living with their parents or other relatives. Members of this consumer segment shop for products and brands that offer good value at moderate prices. They are, for example, more likely to shop at H&M, Forever21 and Old Navy verses stores like Kohl’s or Macy’s. Socially and environmentally conscious; they are however willing to pay more for ecofriendly products and services. And while they are less affluent than previous generations, this segment is more likely to purchase a vehicle, home, or furniture in the next 12 months compared to all Bakersfield adults. This age group is well connected to personalized social networks of friends and family through digital apps and social media. They also support equal pay, marriage equality, and stay home dads. In short, this segment of young adults represents a growing consumer trend toward social solidarity and local economics that can provide small and micro retailers with market opportunities now and in the future. Jose Granados is the strategic market analyst for The Bakersfield Californian. He used BusinessPoint by Nielsen (2013), Scarborough Research (September 2013) and US Census 2010 to assemble this analysis.

Top 10 Reasons Why Businesses Join a Chamber of Commerce

1 2 3 4 5

Business exposure

Advocacy efforts

Connections with other businesses

Leads generation

Want to make a difference in community

Various benefits/services

Credibility of membership

Seminars and workshops

Civic responsibility

Participate on Chamber committees

AND you can have it all with your membership in the... Contact Joy Davis, Director of Membership at (661) 327-4421 or jdavis@bakersfieldchamber.org for more information on Chamber membership.

6 7 8 9 10


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Grocery Trends

Grocery industry undergoing dramatic changes

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hen California produce growers, shippers, brokers and retailers met this summer in Southern California, they got a glimpse into their future. Smaller store formats will become common; technology will drive produce sales; and online shopping will be “the big new coming thing.” Steven Muro, chief executive officer and president of Fusion Marketing, a Chatsworth, Calif., based produce marketing company, made these observations during a meeting of the Fresh Produce and Floral Council. Consumers today want a “simpler shopping experience — they want to get in, they want to shop, and they want to get out,” reported The Packer, an industry publication that covered the meeting. Muro gave Wal-Mart’s expanded “neighborhood markets” network as an example of the trend. In 1995, the average size of a grocery store was 35,000 square feet, he said. By 2006, it was nearly 50,000 square feet. But today the average size has dropped to 45,000 square feet, The Packer noted. Wal-Mart’s soon-to-open neighborhood market in Oildale will be 41,000 square feet. Muro also reported that Fusion Marketing’s latest online survey showed consumers increasingly are using mobile devices to look up weekly ads, recipes and nutrition information, and they like the convenience of digital coupons. He predicted that over the next three years, shopping for online groceries will become a $9.5 billion industry. These grocery retail trends, including the move to smaller-format stores, are playing out in Kern County. Besides Wal-Mart’s introduction of a neighborhood market in Oildale, Smart & Final opened one of its “Extra!” stores in the former Borders Bookstore location on Stockdale Highway. Traditionally known as a warehouse-style store catering to large-quantity purchases by businesses, organizations and people planning events, the new Smart & Final Extra! has added thousands of products in smaller packages and a “wet rack” that displays a wide selection of fresh produce. The meat and dairy section also has been expanded. While not all of the chain’s stores are being converted to the Extra! format, the Los Angeles-based retailer said it hoped

KERN BUSINESS JOURNAL / DIANNE HARDISTY

Shoppers come out of the Smart & Final Plus store on Stockdale Highway in Bakersfield. The regional grocery chain known for catering to business and large events has redesigned some of its stores to meet individual needs.

to have 100 Extra! stores operating by the end of the year. Last year also witnessed a flurry of grocery store mergers, which continues to unfold in 2014. Being watched in Kern County is Cerberus Capital Management’s acquisition of five smaller chains, including Albertson’s, which has local stores. Cerberus Capital Management’s holdings include Safeway and Vons. Supermarket giant Kroger announced last year it was buying Harris Teeter, the high-end chain centered in the Southeast. The local and nationwide impacts of these acquisitions on consumers and competitors are still unknown. Retail analysts believe the U.S. grocery industry is undergoing some of its most dramatic changes since supermarkets emerged in the 1940s.

“In the 1990s and beginning years of this century, the greatest threat to supermarkets and grocery stores came from supersized ‘one-stop shopping’ venues, like supercenters and warehouse clubs,” the market research firm Packaged Facts wrote in a recent annual report on emerging grocery trends. “Today the threat is spread out among all retail channels, including drugstores, dollar stores, limited assortment chains, and – the elephant in the room – e-commerce.” Other trends noted include: private (or store) labels are becoming popular with consumers; stores are scaling back to address specific consumer demands; and fresh produce is becoming a main driver for consumers deciding where to shop. — Kern Business Journal

Wal-Mart’s first Kern neighborhood market to open

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al-Mart is expected to open its first “neighborhood market” in Kern County this fall at the intersection of North Chester and West Day avenues in Oildale. The new small-format store will join six other Wal-Mart stores in Kern County. First introduced in 1998, Wal-Mart now operates about 300 neighborhood markets across the country, including in nearby Fresno. The first Wal-Mart neighborhood market in California opened in 2012 in Huntington Beach. The 41,000-square-foot Oildale neighborhood market will be about one-quarter the size of an average Wal-Mart super center, which is about 182,000-square-foot. It will feature a wide variety of products, including fresh produce, meats and dairy products, frozen foods, bakery items, household supplies, health and wellness products, and a pharmacy. “This store is not only bringing new grocery options to Bakersfield, but it is providing jobs to approximately 95 people,” said store manager Jeff Coburn in a news release announcing the hiring of both full- and part-time associates. “I began my Wal-Mart career in 2000 as an hourly associate in the toys department, so I know there are opportunities for

PHOTO COURTESY OF WAL-MART

This fall, Wal-Mart will open its first Neighborhood Market in Oildale.

others similar to the ones I have had.” Through Wal-Mart’s Veterans Welcome Home Commitment, the company is offering a job to any qualified veteran who has been honorably discharged within the past 12 months. Information about the program can be obtain through walmartcareerswithamission.com Bill Simon, Wal-Mart’s president and CEO of U.S. operations, said at the Goldman Sachs Annual Global Retailing Conference last fall, that Wal-Mart plans to have 500 neighborhood market stores open in the next 18 months – a 75 percent increase from the current number. According to the company’s website, the number of U.S. Wal-Mart stores, including super centers, Sam’s Club and others total 4,713. When international stores are added to the list, the count climbs to 10,955. Analysts believe the neighborhood market and an even smaller 15,000-square-foot Walmart Express, which is being tested, is an effort by Wal-Mart to compete directly with grocery stores, discount/dollar stores and drug stores. TheStreet.com, an online financial news and services Continued on page 21


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Continued from page 20 website, quoted Simon as reporting returns from Wal-Mart’s neighborhood market stores are approaching super center returns. However, the company has had to adjust to operating on a smaller scale. Regarding the Wal-Mart’s soon-to-open Oildale neighborhood market, company spokeswoman Rachel Wall said, “Grocery is an area that customers have come to expect from Wal-Mart and we’re happy to offer a smaller-format store closer to where our customers live and work to help them save time and money.” Phil Serghini, Wal-Mart public relations director, explained, “When Wal-Mart seeks to locate a new store in a community, a number of factors are assessed. One key factor is whether or not a particular community has unmet needs. That’s critical for areas like Bakersfield and Kern County as a whole, where population growth is high. “Kern County, in fact, is one of the fastest growing counties in the state. Wal-Mart seeks to assure that our core customers have convenient access to affordable products, services and fresh and healthier food options. “Kern County consumers do want options when it comes to shopping. We’re proud to be operating six Wal-Mart stores in Kern County (employing approximately 2,200 associates) and are very excited to be opening our first Neighborhood Market in Oildale later this year.” — Kern Business Journal

PHOTO COURTESY OF WAL-MART

A typical Wal-Mart Neighborhood Market is about one-quarter the size of an average Wal-Mart super center, which is about 182,000 square-feet.


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Car Sales

Kern outpacing strong nationwide vehicle sales

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loomberg recently reported that national vehicle sales hit an annualized rate of 16.92 million in June, exceeding analysts’ expectation for sales to slip to 16.38 million, down from 16.7 million in May. July figures were not available to be included in the August Kern Business Journal. “The report signals that consumers are willing to make big-ticket purchases, and should ease fears generated by the sluggish tone of recent consumer spending data,” Barclays’ Dean Maki told the website businessinsider.com. Earlier this summer, the Kern Business Journal asked Patrick Beck, general manager of Bakersfield Hyundai and president of the New Car Dealers Association, to put these sales figures into perspective Patrick Beck for the Kern County market. What is happening in Kern County? New car sales in Kern County through April 2014 are up 16 percent year to day, compared with the same period in 2013. Used car sales are up 6 percent year over year. These statistics are taken from the cross-sell reports which are compiled from DMV registrations in Kern County. The seasonally adjusted annual rate of travel (SAAR), a rolling 12 month number, is at 16.3 million new vehicle sales nationally (in late May, when Beck responded), up from 15.6 million sales at this time last year. This 3.5 percent increase nationally is exceeded substantially here in Kern County, which experienced a 16 percent increase. Regarding the recession in 2008 forward, the SAAR stood at 16.4 million sales at its peak in 2007. This number is virtually the same today. At the bottom of the recession, in June 2009, the SAAR was approximately 9 million sales. The difference is that there are 18 percent fewer dealers today than there were in 2007. The dealers represented today in Kern County, however, represent a similar count to the amount of dealers representing manufacturers as they did in 2007. The dealer count here in Kern County did not shrink at a similar pace as those in the rest of the nation.

KERN BUSINESS JOURNAL/DIANNE HARDISTY

Cars line up in the Bakersfield Automall in south Bakersfield. New and used vehicle sales are strong, according to dealers.

used car sales is less than that of new, it may seem that there may be something wrong. This is not the case. The used car business is so large, four times the size of the new car market, in fact, that to have an increase at all is encouraging. Is a particular price range more popular in Kern County? The most popular price range in Kern County is the under $15,000 market. The consumer tastes in Kern County appear skewed to the used car market and pick-up trucks. Do Kern County consumer tastes differ from other parts of the state and nation? The consumer tastes in Kern County are no different than the rest of the nation when it comes to gadgets and goodies. If there is something available, our consumers want it.

What are the main reasons Kern County residents have resumed buying vehicles? There are several factors that affect car sales nationwide, and they apply in Kern County, as well. But the two important reasons for making purchases are: Consumer confidence and reasonable lending practices. Our local economy, buoyed by the increase in oil production and our continued enormous production of agricultural products, is as solid and inspiring as any in the nation. Consumers will continue to need oil and will continue to consume produce. As our unemployment rates continue to fall, good news about real estate prices continues to come in, new construction in and around Kern County is seen, and large multi-national retail suppliers move into our community, consumer confidence has increased. Another indicator of increased confidence is delivered through the banks and money lenders. As these businesses see loans returning to lower delinquency rates, they have loosened some of the standards to qualify for car loans. When the recession hit in 2008 and 2009, there was a swinging of the pendulum to the conservative side of lending. In our business, it seemed only those who didn’t need a loan qualified. Today there is a more reasonable view from our lenders regarding the average car buyer’s ability to pay back their car

KERN BUSINESS JOURNAL/DIANNE HARDISTY

Buyers consider a vehicle purchase at Three-Way Chevrolet in the Bakersfield Automall.

loan or lease. What are people buying in Kern County? On the new car side, there are two groups of vehicles that have driven the volume. Those are pick-up trucks and economy cars. The oil and agriculture businesses don’t just use trucks, they use them up. Kern County is one of -- if not the largest -- consumer counties for pick-up trucks. All budgeted consumers, which fit the description of 95 percent of our car buyers, look at their monthly auto budget in terms of payment, gas and insurance. If we can provide buyers with cars that consume less gas, they will spend more for a new car. Each manufacturer today can boast fuel efficiency and provides our residents in Kern County with many options. On the used car side, Kern County has always been an excellent used car buying county. Today is no different. It seems as though the appetite for used vehicles is as steady as the sunshine in Kern County. The fact that the increase in

Can you predict any trends for the remainder of 2014 and going forward? As in all economies, there will be downturns. These will occur in our business, too. We don’t know when, but our experts see this strength of economy continuing for another three to four years. The economic forecast from Chapman University, a globally recognized and respected forecast, sees our recovery lasting longer than most. Theoretically, an economy must recover all that was lost in a downturn over the following economic increase. This has been anecdotal and has been proven over the last several downturns. What is different today is that the speed of increase has been greater than the increases that followed previous recessions, or downturns. Since, like all recessions, the economy will recover all that was lost during the downturn. This average recovery must last longer to accommodate the theory. Hence, even the experts believe this increase will last three to four more years. Car dealers are a naturally positive and hopeful group of business people. I know I speak for many of us when I say we are fortunate to serve Kern County today, and look forward to many years of increase.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

A WHOLE NEW WAY OF LIVING IS COMING TO SEVEN OAKS.

SNEAK

A

PEEK

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Aug. / Sep. 2014

Your New Seven Oaks Wish List. Realized. Meandering walkways shaded with lush tree canopies. An abundance of outdoor and indoor places to play, gather and celebrate. A warm, friendly, small town community that reflects a deep respect for the rich heritage of Bakersfield, yet is defined by a fresh new architectural character all its own.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

The Belcourt vision was inspired by all the wonderful input we received from you, the residents of Bakersfield. It is our hope as we approach our Spring 2015 Debut that you’ll be as excited as we are about becoming a part of this exceptional new Seven Oaks community.

How will Belcourt live? Maybe a morning workout at the Center Club fitness center is what you’re in the mood for today. Or perhaps it’s a brisk walk along a shaded pathway with your pooch before heading to work or meeting friends for coffee. There’s an outdoor jazz concert coming up this weekend at the community amphitheater, and you’ve still got time to try that new recipe your neighbor shared with you for the picnic dinner you’re planning. And perhaps later in the afternoon a leisurely respite at the pool is just what you need to recharge. At beautiful, friendly, thoughtfully designed Belcourt, there are so many ways to spend your time. Each day presents a canvas upon which you can create a whole new way to live your life. And enjoy it like never before.

Irresistibly different.

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Aug. / Sep. 2014

;SSHFVMHKI4EGMÁG+VSYT A commitment to bringing a special brand of style, quality and character to the premier locations in which we build has been a WPG hallmark for over 20 years. We’re dedicated to the details, both seen and unseen. And invested in providing the kind of communities that honor an area’s history and traditions in an authentic way, while creating extraordinary places that offer people what they need to live life to the fullest today.

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All imagery is representational and does not depict specific buildings, views or future amenity details. Lifestyle photography does not reflect any ethnic or racial preference.

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Aug. / Sept. 2014

KERN BUSINESS JOURNAL

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Human Reources

To effectively lead, employers must set an example By Robin Paggi

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id your parents ever tell you not to smoke, while a cigarette dangled from their lips? Or, tell you not to curse when they had a potty mouth? If so, you know that the “Do as I say and not as I do” philosophy is not an effective parenting technique. A recent administrative hearing demonstrated that it’s not an effective technique for employers or supervisors, either. The administrative hearing occurred after Wellma “Tootie” Shafer was terminated from her job as a cashier at the Last Chance Market in Russell, Iowa. Shafer’s boss, Rick Braaksma, challenged her attempt to obtain unemployment benefits and both presented their cases before an Robin Paggi administrative law judge. According to numerous news sources, Braaksma argued that Shafer was terminated for misconduct because of an inappropriate discussion she had with a customer. “They were standing at the cash register talking about

dirty, adult situations. I told (Shafer) we do not run our store like that. We cannot stand there and talk about adult situations in front of other customers,” he was quoted as saying in “Judge: Talking dirty not reason enough to lose job,” an article posted on www.usatoday.com. Shafer said no such conversation took place, but even if it did, profanity and off-color humor were part of the scene at the market. For example, the labels of some products sold at the store included profanity and depictions of female body parts. Some examples she gave included the “Wake The F Up” coffee and “The Hottest F---in’ Sauce” hot sauce. In response to Braaksma’s argument that he didn’t tolerate dirty jokes in his store, the administrative judge asked, “So why don’t you remove these articles from your shelves?” Braaksma: “Because we sell them.” Judge: “They are dirty jokes on your shelves, basically.” Braaksma: “No, they’re bottles of hot sauce. It’s all right to have dirty words on the premises because the farmers come in there and eat lunch all the time and that’s just, uh, kind of…” Judge: “So, dirty words are OK?” Braaksma: “Yeah, but there’s a time and a place for it.” So, Braaksma fired Shafter for talking dirty, but he allowed products with dirty words on them in his store. In other words, do as I say and not as I do.

The judge gave Shafer her unemployment benefits, noting that she had not been warned about her performance before being terminated. While at-will employers are not required to provide warnings, this case (among many others) demonstrates that it’s a good idea to do so. It also demonstrates that employers and supervisors with the “do as I say and not as I do” philosophy will have a very difficult time defending themselves for terminating employees who are simply emulating their behavior. Additionally, and probably more importantly, they will have a very difficult time getting employees to respect them and perform well. One of the most basic principles of leadership is to lead by example. Employees are a lot like children in that they watch people in positions of authority and take their cue from them. So, employers and supervisors who want their employees to act professionally should set the example by acting professionally themselves. Those who want their employees to work safely should always work safely. Those who want their employees to show up on time, cut costs, work efficiently, etc. should do all of those things themselves. Employers and supervisors must walk the talk if they want their employees to do what they tell them to do. The “Do as I say and not as I do” philosophy doesn’t get it done. Robin Paggi is the training coordinator for worklogicHR in Bakersfield.


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Business Profile: Soli-Bond

Soli-Bond helps producers recycle drilling wastes

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illiam J. Solan is the executive vice president of SoliBond Inc. in Bakersfield. Solan recently responded to the Kern Business Journal’s questions about his unique energy waste processing business. William J. Solan

What are Soli-Bond’s services? Soli-Bond Inc. is a California corporation specializing in innovative and comprehensive waste processing services for the energy industry. The patented Soli-Bond process generates a manufactured soil-like material from oilfield drilling and production operations. The goal is to create a material suitable for beneficial reuse as daily or intermediate cover at solid waste non-hazardous landfills, or for use as supplemental construction material at drilling locations. The Soli-Bond process utilizes a proprietary formulation of hydroscopic cementitious binders and highly absorbent materials mixed with drilling wastes. SoliBond reagents are mixed with the waste in mobile, self-contained processing mixers, when drilling waste pits are not acceptable, or with conventional earth moving equipment, when drilling pits are permitted.

PHOTOS COURTESY OF SOLI-BOND

Soli-Bond’s pioneering processing equipment, combined with its proven stabilization products, has allowed Soli-Bond to meet the challenge of “pitless” oil and gas drilling.

materials undergo an extensive analytical testing to assure their non-hazardous classification. As a result, the uses of the final processed material are numerous. For example, all trash at municipal solid waste landfills must be covered with one foot of compacted cover material before the close of each business day. The Soli-Bond process provides this cover material. The recycled product also can be used at the drilling location as fill material, construction base material and supplemental support material in road building.

Who are Soli-Bond’s primary Kern County customers? Soli-Bond clients are the companies that are developing oil properties -- either established, or exploratory. In Kern County, we have a diverse blend of large and small operators, who are continuing the region’s rich exploration history. During our 30-year history, we have been fortunate to have worked for nearly all of them. What is unique about Soli-Bond’s services? Anytime an oil or gas well is drilled, the drilling fluids are designed to transport the drilled cutting from the wellbore to the surface, creating a residual waste material. At Soli-Bond, we have adapted to the everchanging regulatory environment by providing a solution-driven option for our clients. We have turned a waste that was at once considered a nuisance and difficult to dispose of into a recycled material desired for its beneficial reuse. This “closing the loop” benefits our clients by reducing their environmental footprint on their drilling locations and by reducing their liability through recycling. How have regulations affected the industry? Wastes generated from oil and gas drilling and production were originally not a major regulatory focus. The drilling fluids and associated cuttings were considered “special exempt” wastes and placed into unlined pits

Soli-Bond turns waste that was at once considered a nuisance into useful recycled materia.

adjacent to drilling rigs. The containment pits varied from a few hundred barrels to several thousand barrels. Once the drilling operation was complete and the drilling rig moved to the next location, the waste pit would be mixed with the excess dirt generated from digging the pit. Intended to absorb the excess moisture from the waste, the mixing of dirt increased the volume by three to four times. As a result, overflow waste would be discharged to land in violation of the Water Quality Control Board’s exemption. The Soli-Bond process was created to stabilize the drilling waste in the pits with a maximum volume increase of 10 percent, while creating a compactable material that is resistant to the influx of water. Potential contaminants in the waste are rendered immobile and less available to groundwater. The Soli-Bond processed material creates a

semi-monolithic mass that can be mapped and buried at a depth out of reach of most plant roots. The stabilized material can be, if necessary, reexamined at a future time. As concern over groundwater safety has grown, so have government regulations. Drilling waste pits now are allowed in only a few areas of California. Soli-Bond’s pioneering processing equipment, combined with its proven stabilization products, has allowed Soli-Bond to meet the challenge of “pitless” oil and gas drilling. The result now equals or surpasses conventional drilling pits in California. How are the recycled products used? The components of this recycled material — from the residual drilling fluids and drill cuttings, to the Soli-Bond reagents — are all non-hazardous. In addition, all processed

What future trends are you seeing? Fossil fuel development and exploration are in the news every day. Our nation’s energy dependency is linked to our industry’s efforts to adapt and adjust to the ever-changing regulatory environment and political climate. Instead of being fearful of the regulatory oversight, we must bring attention to the great strides we have made toward creating an environmentally-friendly exploration industry. Instead of hiding in the shadows and allowing uninformed opinions to demonize us, we must promote the positive changes we have adopted. Environmental policies will continuously change with political influences and populous perception. Soli-Bond Inc. would rather take part in the efforts to contribute to the development of the regulatory changes than to hide from them. We would rather be pro-active than reactive. Soli-Bond Inc. hopes to continue to be a pioneering voice and an active contributor to the improvement of our great industry.


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Volunteer Tax Assistance Program helps local economy By Louis Medina

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ocal sales can succeed only when area consumers have enough money to make purchases. Those consumers include the poor, who are numerous in Kern County. According to the latest population estimates from the U.S. Census Bureau, close to 23 percent (200,000 of Kern’s 860,000 residents) live below poverty. One way to ensure that local working residents of humble means have money to spend is to help them tap into the gains that a tax return and the Earned Income Tax Credit can provide. The EITC is a refundable tax credit for low to moderate income workers, especially those with children. It was enacted in 1975, under President Gerald Ford, and later expanded by President Ronald Reagan, who hailed it as an empowering anti-poverty measure for working families. Community Action Partnership of Kern’s Volunteer Income Tax Assistance (CAPK VITA) Program offers free tax preparation and e-filing—for faster return payments—to taxpayers who earn $52,000 or less. With the median household income in Kern at around $48,000, many locals qualify. During the 2014 tax season, CAPK VITA prepared 4,194 federal returns and helped stimulate the local economy by recovering $5.8 million in total refunds and $2.7 million in EITCs. And it did this thanks to committed volunteers who are trained as certified tax preparers.

The “V” in VITA “The program does not work without volunteers,” said CAPK VITA Manager Sandi Truman. “A lot of them say

they have used VITA in the past, so this is a way of giving back. Others say it’s fun and they enjoy it. It’s great experience for those who are accounting students.” For 2015, Truman is hoping to gather 45 to 50 volunteers, who will each need to commit to 36 hours of training before they can assist with tax preparation. “They are the most crucial part of the program and we’re always accepting and looking for volunteers,” she said, as the need for free income tax assistance services is great.

A little help from our friends The program also helps empower clients financially by partnering with local financial institutions. This year, Wells Fargo and Community Trust Federal Credit Union opened close to 120 savings or checking accounts for unbanked CAPK VITA clients, and program staff and volunteers provided more than 50 taxpayers with U.S. Bank debit cards that were pre-loaded to the amount of their tax returns. Funding partners that helped sustain the program in 2014 include Wells Fargo, Bank of the Sierra, Valley Republic Bank and Daniells Phillips Vaughan & Bock Certified Public Accountants. CAPK is waiting to find out whether federal funding requested from the Internal Revenue Service will be granted later this year.

Looking to grow VITA in 2015 Some enhancements planned for 2015 should allow the program to serve at least 10 percent more clients than in 2014. • The Main CAPK VITA Office is moving from its 1002 Wible Road location to a larger site at 300 19th Street in

downtown Bakersfield, where it will be housed together with CAPK’s Low Income Home Energy Assistance Program and 2-1-1 Kern County Information & Referral Helpline. This will make for seamless referrals of qualifying clients among all of these programs. • Capitalizing on new technologies, CAPK will also offer Virtual VITA, a way for low income clients living in certain mountain and desert communities to connect with volunteer tax preparers in Bakersfield via Skype. • For those who prefer to do their own taxes, CAPK’s website, www.capk.org, will feature a link to an online Facilitated Self Assistance (FSA) portal, where taxpayers will be able to file their taxes for free as long as they earn $58,000 a year or less. Those earning more will still be able to file using FSA by paying a $10 fee to the Internal Revenue Service. • Finally, there will be two rural CAPK VITA satellite offices operating once a week during tax season: a new one at the Lamont Branch of Community Trust Federal Credit Union on Fridays, and a returning one at the City of Wasco Housing Authority on Saturdays. In-kind partnerships such as these are crucial to the success of VITA in smaller rural communities.

Get Involved To become a CAPK VITA volunteer, or to make a donation to help fund the program, please call 834-1724, write to vita@capk.org, or visit www.cakp.org and click on “Donate” or “Volunteer.”

Louis Medina is an administrative analyst with Community Action Partnership of Kern.

Soli-Bond Inc., a company committed to ensure a safe work environment for our Employees and Customers in the Energy Industry, while providing regulatory compliance through innovative and comprehensive waste processing solutions. For company information please visit www.soli-bond.com

SOLI-BOND

INC, 4 230

F O S T E R AV E N U E , BA K E R S F I E L D

CA, 93308


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Aug. / Sep. 2014

Boat Sales

Don Galey: Keeping boat dealership on steady course By Dianne Hardisty

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t is often said that a great salesman can sell ice cubes to Eskimos. Well, Don Galey has managed to top that accomplishment. In this desert we call Bakersfield and in the third year of what may be California’s worst drought, Galey continues to sell recreational boats, earning the reputation of being one of the top marine suppliers and boat dealers in the state. How has he managed to survive the recent rough financial waters of the Great Recession and now a drought that has plummeted water levels? He has a positive attitude, enjoys what he is doing, keeps a close eye on his market and accepts that “every business has ups and downs.” Galey should know. He has worked in the boating industry for 68 years and has been a dealer for 57 of those years. He has seen his fair share of ups and downs. “People don’t have to have a boat. And we are in the middle of a desert,” observed Galey, with his characteristic good humor. No doubt the drought is impacting the boating business. But Galey doesn’t let it get him down. “A couple came in to buy a boat. They were complaining that (Lake) Isabella was only 12 percent full. I asked them, ‘Have you ever boated on Isabella?’ And they said, “No.” It’s just not the drought that has caused that water level to be down. They are repairing the dam.” Earlier this year, Galey told Soundings Trade Only, an industry observer, “Our business has been off because the attitude is, ‘What the hell do I want to buy a boat for? I can’t put it in the water.’ The lakes are down between 87 and 96 percent. Even launching ramps don’t go down that far. So, yes, it is a crisis. The good news is we could play catch-up in a hurry.” Galey is watching reports that El Nino conditions may be developing that could bring rain to California next year. And he is watching industry trends that help him develop his inventory so he will be ready for the “catch-up.” It’s this same optimistic spirit that helped Galey survive the Great Recession of 2008-09, which reconfigured the marine industry. “It is estimated that 53 to 62 percent of the dealers in California that were in business three years ago are no longer in business,” Galey told Trade Only Today, an industry website. Where Bakersfield once had five dealerships, Galey’s is the lone survivor. Despite people’s concerns about the drought and despite lenders’ skittishness to finance boat purchases after the Great Recession, Galey’s Marine Supply is consistently included in Boating Industry magazine’s national list of Top 100 dealers. A founder of the Marine Retailers Association of America, the 80-year-old Galey was given a Lifetime Achievement Award by the Southern California Marine Association in 2009. A few years earlier, he was named “Dealer of the Year” by Boat and Motor Dealer magazine. Galey’s Marine Supply is a four-generation business that began with Galey’s father, Otto, in 1938, after the family moved to Bakersfield and opened an appliance business. On a vacant lot next to the store, Otto sold used boats. World War II refocused the nation’s manufacturing on war supplies, leaving the family to sell used appliances. After the war, Otto expanded the boat business, adding a showroom and service building. Galey worked for his father after school and on vacations. Just as Galey was graduating with a business degree from San Jose State College in 1956, his parents decided to retire and sell the business. Galey floated a loan from his father and took over Galey’s Marine Supply.

KERN BUSINESS JOURNAL/DIANNE HARDISTY

Don Galey and his son, Mark, stand in the showroom of Galey’s Marine Supply in the Bakersfield Automall. Don Galey bought the business in 1956 from his father, Otto. His son, Mark, now is general manager. Galey’s two grandsons, Jeff and Steve, also are involved in the business.

PHOTO COURTEST OF DON GALEY

Bakersfield’s Galey’s Marine Supply, California’s largest boat dealers, began on Bernard Street in the late 1930s.

Today, Galey, his son, Mark, the general manager, and his two grandsons, Steve, the parts and accessories department manager, and Jeff, in the service department, operate Galey’s Marine Supply. The business now is located in the Automall, along Highway 99, in southwest Bakersfield. Galey credits his grandsons for helping him tap into some of the newest boating trends, particularly wakeboarding. With a haircut that may be a bit longer than the “squared away” grandfather’s taste, Galey said Steve “can sell tournament wakeboard boats and wakeboards. The prices of our wakeboard tournament boats start at $60,000 to $70,000 and go up to $110,000. Young people used to go snow skiing. Now they go snowboarding. They used to go water skiing, but now they would rather go wakeboarding. “They don’t want to buy a wakeboard boat from some old guy like me,” Galey jokes, noting sales from wakeboard boats and accessories have been strong. While Galey may step aside to let his grandsons talk up the sale of a wakeboard boat, there is seldom a day that you won’t find him pressing the flesh in his showroom and tapping into consumer tastes when it comes to everything in the company’s high-end inventory.

Galey said the real turning point in boat sales came when women emerged as consumers. Boats were no longer primarily for fishing. They became family entertainment, with attention paid to accessories, shades and multi-uses. For the past several years, pontoon boats have been big sellers. And they have to have style, according to Galey. “There is a saying in California: ‘If it’s not chrome, you better pinstripe it,’” Galey said. Buyers want their boats to match their trucks and have flash. Galey has served on several manufacturers’ advisory boards, helping design boats. While he will not sell boats in another dealer’s district, his company has a robust export business, sending boats as far away as to Australia. An avid fisherman, Galey has a network of Alaskan guides that buys his aluminum fishing boats. Much of Galey’s business benefits from his word-ofmouth reputation and his genuine gift for gab. When I walked into Galey’s office for his interview, he seemed to be still laughing over a joke he had just heard. He had to share it with me before I could ask him a single question. This guy was driving his brand new Corvette over the Grapevine. He had it floored, when he looked into his rear view mirror and saw a highway patrolman behind him, blue lights flashing. He gunned it at first, but then pulled over. The officer walked up to his window, looked at his watch and said, “Sir, my shift ends in 30 minutes. Today is Friday. If you can give me a reason for speeding that I’ve never heard before, I’ll let you go.” The guy paused and responded, “Years ago, my wife ran off with a highway patrolman. I thought you were bringing her back.” “Have a good day, sir,” the officer replied. Galey laughed so hard he seemed to rattle the industry awards that lined his office shelves. What does this have to do with boats sales? Not a darn thing. But whether or not you buy a boat from Galey, he’s going to make sure you have a good time when you visit his dealership. Dianne Hardisty is the editor of the Kern Business Journal.


Aug. / Sept. 2014

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Aug. / Sep. 2014

Franchising

Do your homework before buying a franchise By Kelly Bearden

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onsumer confidence is rebounding in the U.S. This confidence is prompting spending in food, hotels and retail sectors, which are among the key economic sectors for franchising operations. Local entrepreneurs often ask consultants at the Small Business Development Center at California State University, Bakersfield for help in evaluating franchising opportunities. In the end, most of the same steps used to evaluate and operate a “self-standing” small business are required when the small business is a franchise. The U.S. Small Business Administration defines a franchise as a business model that involves one business owner licensing trademarks and methods to an independent entrepreneur. Sometimes, franchises Kelly Bearden are referred to as chains. Famous brands, such as Dunkin’ Donuts, Taco Bell and McDonald’s are some examples. Basically, there are two forms: product/trade name franchising, where the franchisor owns the right to the name or trademark and sells that right to a franchisee; and business format franchising, where the franchisor and franchisee have an ongoing relationship, and the franchisor often provides a full range of services, including site selection, training, product supply, marketing plans and financial assistance. People interested in owning and operating a franchise are motivated by a variety of things: the possibility of building wealth; the desire to work for themselves; having a feeling of accomplishment; building a legacy for heirs; and being able to retire in style. As with every business opportunity, however, consultants at the Small Business Development Center advise entrepreneurs to do their homework before entering into any arrangement. Oversight of franchising operations is provided by the Federal Trade Commission. Information can be found on the FTC’s website at www.business.ftc.gov. Additional information can be found on the Small Business Administration’s website at www.sba.gov. Google the business sector and franchisor to determine local demand for a product or service, and the company’s financial history. Ask around. Check with the Better Business Bureau. Consult “rip off ” websites to determine a franchisor’s business practices. Talk to other people in the business. In addition, the FTC requires franchisors to disclose infor-

KERN BUSINESS JOURNAL/DIANNE HARDISTY

The McDonald’s restaurant in Tejon Ranch’s commercial park at the foot of the Grapevine does a brisk business. Fast-food restaurants are popular franchises.

mation about their offerings and company finances. A “uniform franchise offering circular” will contain vital information about a franchise’s legal, financial and personnel history. Understand the deal. Determine what the franchise arrangement entails. Does it allow you to use the franchise’s name and trademark? Will you receive training and other support? What will be required of you? For example, it is common for a restaurant franchisor to require a franchisee to open multiple stores over a period of time. Determine the expected financial return. Will it support your investment? How much will you be required to invest? Can you afford the investment? Purchasing and operating a franchise can be an expensive proposition. Franchising opportunities, which are detailed in a variety of online and print publications, must be carefully considered. In addition to evaluating a franchise opportunity’s financial viability and prospects for success, an entrepreneur must realistically consider his or her abilities and goals. Do you possess the education and skills necessary to operate the business? Does the business meet your personal goals?

Promotional information for franchising opportunities often make success appear to be an easy no brainer. But we all know that there is no such thing as a free lunch. The adage also applies to successfully operating any franchise business. Before entering into any franchise arrangement, consult with professionals. These should include an accountant and attorney. Franchising contracts are written to benefit the franchisor. Only independent advisors can protect the interests of the entrepreneur. The Small Business Development Center at CSUB is one of five service centers that make up the University of California, Merced SBDC Regional Network, which is a partnership between the university and the U.S. Small Business Administration. The center at CSUB assists entrepreneurs and small business owners in Kern, Mono and Inyo counties by providing free one-on-one consulting, small business training and research. For more information, go to csub.edu/sbdc

Kelly Bearden is the director of the Small Business Development at CSU Bakersfield.

FTC website helps protect against fraud The Federal Trade Commission, which oversees franchising offerings, has compiled “Buying a Franchise: A Consumer Guide,” which can be found on the commission’s website, www.business. ftc.gov. The guide is divided into six sections: The benefits and responsibilities of franchise ownership; advanced work – before

you select a franchise system; selecting a franchise; finding the right opportunity; investigating before you invest; and before you sign the franchise agreement. For companies selling franchises and business opportunities – and entrepreneurs in the market – the FTC’s Franchise Rule and Business Opportunity Rule mandate disclosures and offer buyers

certain protections. In addition, the FTC has resources to help people spot business opportunity and investment scams, and avoid franchise taboos. Promoters of fraudulent business opportunities run ads where their targets are likely to see them: in daily and weekly newspapers, in magazines and on the Internet.

For example, ads for business opportunities doing medical billing may sound like the perfect work-at-home option, but beware. The reality is that few people who pay for medical billing opportunities make any money. Information concerning obtaining credit, identifying legitimate marketing strategies and pyramid schemes, selling business opportunities and consumer protection are available on the FTC website. — Federal Trade Commission


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

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Aug. / Sep. 2014

Buying a franchise fit business owners’ goals By Dianne Hardisty

Based in Ann Arbor, Mich., Molly Maid is part of Service Brands International, a company that includes Mr. Handiman and ProTect Painters franchises. Molly Maid originated in Canada in 1979. Five years later, David McKinnon, a service industry franchisee, acquired the rights to expand the brand into the United States. Today, there are more than 450 Molly Maid residential cleaning franchises across the United States and an additional 180 Molly Maid franchises in Canada, the U.K.,

Portugal and Japan. On its website, Molly Maid estimates “we’ve created lasting relationships with more than 17 million customers in 40 states.” “I always tell people that Molly Maid is a simple business, we clean houses,” McKinnon recently told Franchising USA magazine. “Everyone wants to have their house cleaned by someone else. Even in times of a recession, when people’s finances are squeezed a bit, they’re not going to cut their maid services first.” The Loflins’ Molly Maid franchise employs 15 people – three in the office and 12 in the field. In addition to a growing list of residential clients, Loflin said her company has a contract with a major property management firm to prepare rentals for the “move in” and “move out” of tenants. Loflin offers the following tips for entrepreneurs interested in buying a franchise: • Do your research. Find out about the company and what types of support it offers. • Examine costs versus income. Will the investment balance out for you? • Understand the business. It will take a few years for you to become profitable. You will not get rich overnight. • If you are willing to put in the time and energy, a franchise will eventually pay off. “You have the ability to make your business successful,” Loflin said. “It all depends on how you go into work every day.” Dianne Hardisty is the editor of the Kern Business Journal.

vulnerable to making very poor decisions. The optimist in us wants to believe that this business opportunity is our ticket to independence and financial freedom. Regardless of your optimism, you must base your decision to pursue or not pursue the opportunity on facts and the reality of the business opportunity. By being overly optimistic, it is easy to justify funding a business by using all you have saved and invested over the years, leaving you with no financial safety net. The reality may be that the success rate is much lower than your optimistic heart wants to believe. You put relationships at risk as you ask friends and families to invest in your optimism. I realize that we all know a story of someone who invested everything into an idea and came up a winner. The thing to understand is that not all opportunities or risk are created equal. It might be the optimist in each of us that encourages us to take on new challenges and opportunities. But optimism can only take us so far if the reality is a different story. A simple search on Craigslist can confirm that there is no shortage of so-called business and

money-making opportunities. No amount of optimism will change a terrible financial scam into a great business decision. With all that I have written, it may seem that I don’t think that anyone should take on risk or new opportunities. Actually, it’s the opposite; I would encourage you to take these on. The key is to take on new business opportunities based on calculated risk, solid numbers, and realistic potential with an understanding of what you personally can bring to the table. My brother-in-law did some further investigating into his “sure bet” business opportunity and quickly found that it was full of holes. He would have been financially devastated. Maybe he will find that perfect business to start. I know he is still searching. But at least now he is searching while he holds a solid job and looks at business opportunities with more skepticism, along with his beloved optimism. Paul Anderson is an investment advisor and partner at Moneywise Wealth Management. He is also a host of the Moneywise Guys radio program on KERN 1180 weekdays 10 a.m. to noon.

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teve and Carol Loflin of Shafter already owned three businesses when they went shopping last year for a franchise business to buy. The Loflins own and operate the Delano Driving School, and Higher Ground Homes and New Horizon Homes, group homes for medically fragile people. “We enjoy owning our own business and employing people,” explained Carol Loflin during a recent interview. The Loflins are assisted by their three adult daughters in operating their businesses. At first, the Loflins considered expanding their existing businesses. But then a chance conversation with a woman with whom they attend church revealed the owner of a Bakersfield Molly Maid franchise wanted to sell the business. Although the franchise was successful, the owner no longer wanted the responsibility of operating the company. “Some people are good employees, but not cut out to be business owners,” said Loflin, explaining management of a payroll, and maneuvering through tax and labor laws can be daunting. With their three other businesses, the Loflins had mastered those skills. The Loflins ruled out some popular franchise opportunities. For example, because of the demanding operating hours and regulations, they knew they did not want to own a restaurant.

PHOTO COURTESY OF CAROL LOFLIN)

Carol and Steve Loflin own the Molly Maid franchise in Bakersfield. She advised entrepreneurs to do their homework before buying a franchise.

After thoroughly investigating the company, the Molly Maid franchise seemed to fit their needs, skills and goals. A big selling point was Molly Maid’s support services, which includes training and computer services. A Molly Maid representative is assigned to walk a franchise owner through the system. Through regular conventions and regional training programs, as well as a network of other franchise owners, advice and help is readily available, said Loflin.

Money Management

Beware: Not all business opportunities created equal By Paul Anderson

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t was at our annual Christmas family get together that my brother-in-law approached me about what he saw as a great opportunity. He was giving me the opportunity to invest in a business franchise idea that was, according to him, a sure bet. Bad luck and poor decisions had plagued him over the past few years and he was looking for any opportunity to bring himself Paul Anderson back into a position that resembled financial security. He was in his late 50s and still

reeling from losing all he had in a business venture gone bad. I am in my early 40s, but not a stranger to the slow panic that can set in when one realizes that their dreams are limited and the time they have left to be ready for retirement is growing short. We grow up being told that the world is ours and that whatever we dream can become a reality. We grow old realizing that some dreams either passed us up or we didn’t pursue them with effective resolve and now our opportunities are fewer and our stomach for risk feels like it is nearing empty. I understand that we can always do better and make changes to our lives to reach our dreams. But at this point in time, my brother-in-law had chased a few dreams and had ended up flat on his back with his wallet emptied. It’s at times like these that we are most


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

STEM investment provides pipeline for growth By Carla Musser

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t Chevron, we believe education is a building block for economic development. We know that an educated and skilled workforce leads to growth, both for the communities where we operate and our business. This is why we support education at all stages and levels of development. Our approach is one of partnership. By working with innovative organizations, we can expand the impact of our investments and strengthen each other. Locally, we work with nonprofit organizations, educators, government officials and community leaders to increase the quality of education available to our students. Our approach to supporting education is holistic. We believe it’s important to inspire students to pursue science, technology, engineering and math (STEM) careers. We promote opportunities that develop the skills necessary to succeed in these fields. We help provide students with access to rigorous, hands-on curriculum, ensuring they graduate from college career-ready. Chevron has made investing in STEM education a business priority, both across the U.S. and here in Kern County. Since 2007, Chevron has partnered with CSU Bakersfield to bridge a gap in STEM opportunities through a program that piques the interest of high school students and rejuvenates K-12 science teachers through hands-on research. Since its inception, the Research Experience Vitalizing Science–University Program (REVS-UP) has become the premier program both for local students interested in STEM fields and their dedicated educators. Parents and students continually call the university to find out how to apply for the program long before

the applications are available. Chevron’s most recent contribution to continue the REVS-UP program will further increase the number of high school students choosing to major in STEM fields and seek STEM careers. REVS-UP has increased in popularity and impact from year to year, with 360 students applying for 100 spots in the program in 2013, compared to 36 applications for the program’s 50 spots during its inaugural year in 2007. The lack of students choosing to study STEM fields has fueled a gap in the supply of qualified job candidates for industries like Chevron’s, even though the demand for these fields is extraordinarily high. According to Rutgers, the number of STEM jobs is estimated to grow 17 percent between now and 2018. For all other fields combined, job growth is estimated to be only 9.8 percent over the same time period. The need for students interested in STEM is equally critical right here in Kern County, home to the fourth largest oilfield in the nation and where 75 percent of all oil in California is produced. Through our partnerships, we are supporting programs that bring the engineering design process to life and teach students how to identify problems, build prototypes and test solutions themselves. These are processes our engineers use every day. Equipping students with real-world expertise, critical thinking and leadership skills is an important part of building a smart, adaptive workforce and ensuring we have a pipeline of talent ready to take on tomorrow’s challenges. Together, we’re laying the foundation for economic growth and prosperity in Kern County. Carla Musser is the manager of policy, government and public affairs for Chevron in Bakersfield.

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KERN BUSINESS JOURNAL

Aug. / Sep. 2014

Giving the ‘gift of life’ demonstrates corporate good will By Greg Gallion

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ood corporate citizens look for ways to give back to the communities in which they are located and where their customers live. Often this involves corporate giving, in the way of donations or civic activities. We see many examples of this generosity in Kern County, where corporate dollars help support school programs and build community facilities. Corporate giving also involves company owners, managers and employees donating their time and skills to help build better communities. Consider the many stretches of highways that have been adopted by companies, whose employees can be seen cleaning up the roadsides. Organizations, such as Habitat for Humanity, have benefited from the many hours donated by skilled corporate volunteers who help build homes for the less fortunate. Houchin Community Blood Bank frequently is approached by local companies and their employees wanting to give the gift of life as a corporate contribution. Some common ways for this corporate giving are: holding a company blood collection drive; sponsoring a communitywide blood drive; and providGreg Gallion ing support – for example, donating prizes – which helps encourage people to donate blood. Houchin can hold a mobile blood drive at a company’s office, or schedule a company blood drive at Houchin’s Bolthouse or Truxtun facilities. These can be a Saturday event, or scheduled as an evening social from 4 p.m. to 7 p.m. during the week.

PHOTO COURTESY OF HOUCHIN COMMUNITY BLOOD BANK

Blood donations can be made at Houchin Community Blood Bank’s Bakersfield headquarters complex at 11515 Bolthouse Dr. or at 5901 Truxtun Ave.

Companies interested in booking a blood drive should go to Houchin’s website at www.hcbb.com to complete an online application, or call 323-4222. A side benefit of donating blood is that the process provides participants with a mini-physical. Donors must be screened before they can give blood. This screening includes evaluating blood pressure, pulse and hemoglobin. There have been times during the mini-physical when people are told they can’t donate blood because they are experiencing high or low blood pressure, arrhythmia, or their iron is too low. The nurse encourages them to see their physician. Sometimes this results in a more serious health problem being discovered. Consider the case of a regular donor, who came in with low hemoglobin and was turned away. A few weeks later, he

returned to donate, but his hemoglobin was still low. The nurse advised the donor to see his doctor, who discovered the man had colon cancer. He was immediately scheduled for surgery. Afterwards, the donor returned to Houchin to thank everyone for alerting him to a condition that could have been fatal. Recently, a potential donor came into the Truxtun facility on a Saturday and was found to have a very low pulse rate. The nurse advised him to see his doctor, whose office is located across the street from Houchin’s facility. The doctor just happened to be in his office and was able to see him. The man was admitted to the hospital the following day for a blocked artery and a host of other heart problems he didn’t know he had. By donating blood every eight weeks, donors have the opportunity for a mini-physical between regular medical check-ups. This helps monitor important signs. Houchin gladly helps companies spread the word about their upcoming blood drives and the companies’ generosity. An e-mail database of more than 30,000 donors will be sent information about the event, which also brings attention to the sponsoring company. Information about the event and company will be included in an electronic newsletter sent monthly to donors and Houchin supporters. Social media outlets, including Facebook and Twitter, are also used to publicize events and sponsorships. In some instances, a news release is distributed to local publications and broadcast stations. This publicity is a win-win for Houchin and company sponsors. Houchin receives the blood donations it critically needs for our community. And companies receive media exposure that can bring new clients and customers. In the end, everyone benefits. Greg Gallion is the president and CEO of Bakersfieldbased Houchin Community Blood Bank.


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

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KERN BUSINESS JOURNAL

Sierra Bancorp acquires Santa Clara Valley Bank of Santa Paula Sierra Bancorp, the holding company of Bank of the Sierra, announced the signing of a definitive agreement to acquire Santa Clara Valley Bank of Santa Paula for aggregate cash consideration of $15.3 million. The consideration consists of $12.3 million or $6.00 per share to common shareholders and cash consideration of $3.0 million to preferred shareholders to retire outstanding preferred stock and associated warrants. Included in the $12.3 million consideration, Sierra will pay $700,000 to cash out existing in-themoney warrants. “This is an exciting opportunity for Bank of the Sierra,� said James C. Holly, chief executive officer of Sierra Bancorp. “The Santa Clara Valley is a strong agricultural region in close proximity to our primary market, the Southern San Joaquin Valley. The market is very similar to the region we already serve and this opportunity is a natural extension for us. In addition beyond the Santa Clara Valley, we believe that we can serve the commercial and residential communities of Ventura, Oxnard and Santa Clarita.� The boards of Sierra Bancorp and Santa Clara Valley Bank unanimously approved the transaction, which is subject to customary conditions of closing, including required regulatory approvals and approval by the shareholders of Santa Clara Valley Bank. At June 30, 2014, Sierra Bancorp had approximately $1.5 billion in assets and 25 branch offices, an online branch, a real estate industries center, an agricultural credit center, and an SBA center in the Central California region. — Sierra Bancorp

Aug. / Sep. 2014

Library’s online services opens pages of old newspapers By Katherine Ross

K

ern County Library offers several ways to search for newspaper articles. Both online and microfilm options are available. Take a look through the Bakersfield Californian, or a variety of other newspapers. It’s easy once you know how. You can do a lot of searching and reading of the newspapers from home or work, with your library card and our library home page, kerncountylibrary.org. First, at the top of the page, the Library Catalog option leads to the Newspaper Index tab, which is primarily an index of The Bakersfield Californian. This index allows you to search for local articles through 2009 by Author, Keyword, Subject, or Title, to find the date, section and page numbers for the articles you need. Full text of the articles is not included here, but it’s the most complete index accessible outside the library. Two other from-home search options are The Bakersfield Californian e-Edition, and the Newspaper Source Plus (from Ebsco), accessible from our online database list, www.kerncountylibrary.org/HTML/resref/alpha.html. The Bakersfield Californian e-Edition gives the complete full text of the paper for the last 30 days; just follow the instructions which give the username and password. It can be used on iPads, smartphones and tablets, too! Newspaper Source Plus includes more than 1,000 full-text newspapers across the United States, including

The Bakersfield Californian from 1997 to the current year. Holdings vary for the various titles within the Ebsco database, but you can click “Publications� and type in the name of a newspaper to see how far back it goes within this source. Older issues of The Bakersfield Californian are available within the library, in both online and microfilm versions. Microfilm can be quicker, if you already know which date or month you need, and it’s supported by a card-catalog index nearby. Library staff can show you how to operate — and photocopy from -- the microfilm reader machines. For more comprehensive full-text searching, the Access Newspaper Archive offers character-recognitiontechnology searching. Both feature the Bakersfield newspaper as far back as 1875. However, while the microfilm archive is complete through 2013 (and 2014 issues are in print form nearby), the online Archive is less complete: 1875-1977, with parts of 2001 and 2010. In addition, the library keeps the current months’ print copies of The Los Angeles Times, New York Times, Wall Street Journal and several of Kern County’s small-town newspapers. Sound complicated? It needn’t be. Just call or visit the Beale Memorial Library at 701 Truxtun Ave. (868-0770) and talk to an expert on the second floor. We’re here to help.

Katherine Ross is a Kern County reference librarian.

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Aug. / Sept. 2014

KERN BUSINESS JOURNAL

Wellness

Companies benefit when workers ‘train their brains’ By Kimberly Van Metre

I

nsomnia, stress and chronic pain are major contributors to poor performance at work. A rapidly expanding pain management industry has evolved to address the physical and psychological ailments workers are reporting. But many employers and their workers are searching for treatments that do not rely on pharmaceuticals. An emphasis today on maintaining a drug-free workplace, and on keeping workers focused and safe, has led to the creation of wellness programs. In workplaces you now are seeing Kimberly Van Metre employee gyms, diet and exercise classes, health screenings, and relaxation programs, such as meditation and yoga. Increasingly, employers and their workers also are turning to neurofeedback, a drugfree way to retrain a person’s brain to change unproductive behavior and improve focus. To better understand neurofeedback and its results, consider just three actual cases taken from my Bakersfield practice. To protect privacy, I have changed the clients’ names and biographical information. Jim is a 26-year-old professional athlete. He turned to neurofeedback for help with falling asleep and reducing his use of sleep aid medication. He also wanted to improve his reaction time and increase his scoring. In his five seasons of playing professional ice hockey, his reaction time was 320 milliseconds and he scored only two goals as a defenseman. In his sixth season, while he was undergoing neurofeedback therapy, he scored five goals, improved his reaction time to 280 milliseconds and no longer used medication to fall asleep. Bonnie is a nurse, who works the night shift in a local hospital’s neonatal intensive care unit. Her job is stressful. But so is her family life. She and her husband have two sons, one of whom suffers from impulsivity and tantrums. When I first met Bonnie, she was at her wits’ end. Her physician had placed her on a six-week leave to address stress, anxiety, insomnia and overall cognitive dysfunction. Although she recognized the value of medications, she wanted to avoid taking sleep aids and anti-anxiety drugs. Initially, I predicted she would require 40 neurofeedback sessions to address her concerns. But she was able to achieve her goals in just 30 sessions. When she returned

to work, she told me she felt “sharp as a tack, more efficient,” and recalled important details effortlessly. She also said she felt an overall balance between her work and home. She no longer had sleeping problems, or anxiety. Finally, I will share my own experience. A Cal State Bakersfield graduate and former elementary school teacher, I was left with chronic pain after an accident damaged a nerve in my spine. I sought treatment at UCLA, where I was introduced to neurofeedback. The results were so spectacular that I went on to study the treatment, becoming a certified neurofeedback provider and opening up my own practice in Bakersfield in 2009. Neurofeedback is based on the way brain cells communicate with each other, in part, through a constant storm of electrical impulses. The pattern for this “storm” is shown on an electroencephalogram, or EEG, as brain waves with differing frequencies. Clients sit comfortably in a chair facing a computer Over time, these screen. Sensors are atbrain exercises tached to their enhance the funcscalps, with wires creating tion of the central a connection nervous system, to a computer programmed improving mento respond to tal performance, brain activity. An amplifier emotional control filters the and physiological signals and reflects them stability. back to the client, like a digital mirror. The brain witnesses its own activity from moment to moment, at each particular site/function we choose to train. Over time, these brain exercises enhance the function of the central nervous system, improving mental performance, emotional control and physiological stability. In reality, the subconscious brain does the work that leads to improved performance, reduced anxiety and controlled stress. That is why the treatment is generally referred to as “training your brain.” Physiological conditions, such as insomnia and stress, lead to physical problems, such as constipation, reflux and headaches. People who suffer from migraine headaches, for example, miss an average of three days of work per episode. Sick leave and overtime to cover for an ill worker impacts a company’s efficiency and bottom line.

Kimberly Van Metre is the owner of Neurofeedback Train Your Brain in Bakersfield and a certified neurofeedback provider.

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KERN BUSINESS JOURNAL

Aug. / Sep. 2014

Legal Briefs

How to avoid becoming the target of ADA fraud By Robert Brumfield

E

very business owner should become more familiar with the Americans with Disabilities Act (ADA), Unruh Act and the Construction Related Accessibility Act. This is especially true in California, where we hold 12 percent of the American population, but 40 percent of the ADA lawsuits. You can thank mill-type law firms in the state, who spend their careers encouraging persons with disabilities to hunt down violations. When these people exhaust the pickings in their own counties, they take the hunt on the road to nearby counties. Once they find a business, perhaps your business, it’s off to the lawyers and you are looking at the payment of a statutory minimum violation fine of $4,000. But the main reason these law firms encourage the hunt is the payment of statutorily mandated attorney’s fees. This is why ADA suits have become an abuse-riddled area of the Robert Brumfield law. Most of these cases are looking for a quick payout in the $5,000 to $12,000 settlement range. But how much will the business owner mount in legal fees to fight it first? And, you better believe these ADA lawyers know it. The original purpose behind the federal and state laws re-

garding construction-related accessibility is so that a disabled individual has legal recourse when, for example, he or she asks their local grocery store to install a ramp, but the store refuses. Yet, the so-called plight has turned into something much more materialistic, and the new norm seems to be that a business owner only knows of the problem after they’ve been sued. Without actually stepping out of their vehicle or even having a dollar to use for your business’s services, a “professional” plaintiff, if I dare, will have you in the throes of the legal system. Unfortunately, most business owners will find it a losing battle. The violation could be anything from faded paint on your handicap spot, to the mirror in your bathroom hung an inch too high. Before the matter is set for trial, a business owner will be aware of how wide the field is in regards to abusing the system. Luckily, enough outcry has been heard, even unto

our legislature, and certain pro-defendant (business owner) changes have now been included into statutory law. Among the changes is Civil Code 55.56, whereby a business owner can at least attempt to inoculate themselves against these professional plaintiffs by having a CASp inspection done. CASp stands for Certified Access Specialist program. Briefly, a CASp inspector comes to your business, canvasses all public areas, and reports on what is and is not in compliance. Once the business owner is in compliance, they receive certification that they can (and should) display visibly, so that a professional plaintiff can see it. While CASp certification does not wholly prevent an ADA lawsuit being filed against you, it serves two important purposes. First, it reduces the statutory minimum damages from $4,000 to $1,000; and second, since there is less money in the pot for the plaintiff, the hope is that they drive on by your business and then on to another’s who does not have their CASp certification hanging in the front window. A final suggestion on CASp certification is to contact your attorney to arrange the inspection, even if you have not been sued. If you do it on your own, the contents of any preliminary report — which may detail a myriad of violations that you have not fixed yet — is likely discoverable during any future lawsuit. However, if you have your attorney arrange the inspection, then the results will likely be guarded under attorney-client work product doctrine. Robert Brumfield III is a Bakersfield attorney. Attorney Heather Ijames assisted with the writing of this article.

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Aug. / Sept. 2014

KERN BUSINESS JOURNAL

Developing a Brand

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Summertime creative from TMG.

The Disney brand focuses on creating a feeling or an emotion.

Create a brand that sells beyond the product By Sara Mendez

T

he first step companies take when developing their business plan or marketing plan is to immediately answer what they do — when, where, how, and for how much. The focus typically remains on the tangible product or service, which always leads to a disadvantage, anyone can mimic it. If all you sell is the physical product that anyone can sell, people will only choose you over a competitor based on one of two primary reasons: the price and the value. What if you provide a product or service in a way that cannot be replicated? What if people use your company because of the value they associate with your name or brand? Why is it that people are willing to pay Sara Mendez more for the same product somewhere else? What is it that makes consumers buy what they do, when they do, and where they are? The answer to all of those questions lies in the value that has been created by the company and placed into the consumers mind. Perceived value is calculated in consumers’ minds by comparing the worth of the product or service against the cost. At some point, the cost outweighs the value and consumers shop elsewhere. Loyalty is lost. The goal is to find the perfect balance between cost and value. This perceived value goes beyond a simple sales platform or pitch that most companies rest their revenue projections on. So what is it that you actually sell? Is it just a product or service? Or is it more than that? If it’s more, do your current and potential customers know that? What are you currently doing to demonstrate this value proposition? When you think of brands or companies who have been hugely successful, what is it they are really selling? Chances are it’s

not the actual product. For example, Disney rarely sells rides, food, hotels, or even its theme parks. They sell an idea, an emotion, or a feeling. If it were just hotels, food, or theme parks, how easy would that be to replicate? However, by selling this emotion, instead of the product, how much more difficult is it for a competitor to take away a share of consumer dollars? So now how do you get there? The first step in branding beyond the product is figuring out what you want to be known for. Is it supporting the community, quality, customer service, innovation, emotion, etc.? Once you know what you want to be associated with, there are two additional steps. First, the company must guarantee all internal efforts are made to mimic that image. Second, the company must ensure the external image or consumer perception of the company reflects the internal efforts. The images provided by Disney in their branding efforts implant an idea or feeling. But the real sign of selling beyond the product is when you get there and experience it. The internal and external value has been promised, shown and experienced. One sure way to determine whether your branding efforts are effective both internally and externally is by reviewing the new-customers-to-retention rate. Do customers come in but fail to adopt the brand and become core customers? This means the external image is working, but internal expectations have not been managed. On the other hand, if customers continue to come back, but new customer numbers are low, this indicates internal brand expectations are not being met. Perceived value is created through brand development over time. The company must develop the brand, then innovate and change with rising consumer demands in order to develop a standalone brand with high perceived value. Today’s market is about the customer, not the company. Find the customers you wish to reach, understand them, and create a brand that meets their growing needs. Sara Mendez is a principal in Mendez Media Marketing.

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KERN BUSINESS JOURNAL

Aug. / Sep. 2014

President’s Report

Kern County: Economic impact of the retail industry By Richard Chapman

A five-star market Kern County’s retail market has experienced significant growth at an average rate of 10 percent per year since 2009. According to the 2014 California Retail Survey, Kern County is categorized as a five-star region. This composite rating reflects the individual market’s sales growth rate relative to all other markets, over the past five years. The top 20% of markets, ranked by sales growth, receive the five-star rating. Highlights in 2013 included, Top 10 county rankings in the categories of relative strength, sales per outlet, and population growth. In terms of city performances, the report measured the performance of 480 markets in California. Bakersfield ranked sixth for retail sales and ninth for population size. Shafter garnered the top ranking in the state for per capita sales growth. In addition, Shafter placed in the Top 5 for growth persistence, relative strength, and sales per outlet. Last but not least, Tehachapi came in at the #10 spot for Per Capita Sales Growth.

“Shopaholic” region Bakersfield has been classified as a Top 10 “Shopaholic” city, according to Bundle.com, which used U.S. Census spending data, information from credit card companies and “third party data providers,” to determine which U.S. metros boast the most “shopping-crazy” residents. On average, Bakersfield residents spend $201.50 per month, while U.S. average expenditures on clothes, shoes and other wear was $142.08 per month.

In addition to apparel, the Bakersfield market significantly outperforms the state average in terms of sales per household in the general merchandise, grocery, restaurant and bar, building materials, and auto sectors. In fact, Bakersfield auto sales were almost double the California average in 2013.

Retail market overview and outlook

America’s Top Shopaholic Cities

Average monthly spending on clothes, shoes and other wear: Washington, D.C. $263.00 Arlington, VA $254.58 Nashville, TN $251.17 Scottsdale, AZ $243.17 Dallas, TX $228.58 San Francisco $227.42 San Jose $221.17 Seattle, WA $221.17 Austin, TX $213.00 Bakersfield $201.50

According to a recent report by Cushman & Wakefield| Pacific Realty Advisors, the Bakersfield metro region has a retail base of 12.5 msf and a 10.1percent vacancy rate (1Q 2014). For the past few years, Kern County has mirrored state-wide trends of lower vacancies, increased absorption and stabilized rents. Recent retail expansions include Panera, Ross and T.J. Maxx, while new entrants include such companies as Hobby Lobby, Winco, Sprouts, BevMo! and Nordstrom Rack. Finally, the excitement is palpable for the August grand opening of The Outlets at Tejon, which will be the first new outlet center in California in over a decade. The $90-million complex will feature over 75 stores and will offer

high-quality designer brand name fashions. Richard Chapman is CEO and President of Kern Economic Development Corporation

Stay connected Live, streaming video programming on Bakersfield.com

First Look with Scott Cox: Weekdays from 7 to 10 am. features interviews, as well as comments and analysis from The Californian’s award-winning journalists.

Strictly Business: Cindy Pollard, President/CEO of the Greater Bakersfield Chamber of Commerce, as she talks with local businesses on Mondays from 10 to 11 a.m.

Power Hour: From the Auto Club Famoso Raceway to the new Kern County Raceway Park, catch it live, every Tuesday at 11 a.m. on bakersfield.com Roadrunner Rundown: Costelloe, Cal State’s Director of Broadcasting and New Media discuss Cal State Athletic Programs from 10 to 11 a.m. Tuesdays.

The Real Estate Show: Presented by Watson Realty ERA features real estate news and market information from Kern County on Mondays from 1 to 2 p.m.

B Varsity with Zach Ewing: Features previews, interviews and highlights that give you an inside look at the local high school sports scene. Live Well: Lisa Krch explores Wellness, Health, Fitness and Living Wednesdays 10 to 11 am

Open Up: With Don Clark and Tina Miller Thursdays 10 to 11 am

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TBC MEDIA


Aug. / Sept. 2014

KERN BUSINESS JOURNAL

Business at-a-glance Local SBDC consultant earns 2014 State Star Award Jay Thompson, a consultant with the Small Business Development Center (SBDC) at California State University Bakersfield, will receive the Association of Small Business Development Centers’ 2014 State Star Award at a September awards ceremony in Dallas. The annual award is given to one outstanding SBDC consultant from each state. Criteria include exemplary performance, demonstrated commitment to small business success, and significant contributions to the state SBDC program. Over the past three years, ThompJay Thompson son’s SBDC clients have created and retained over 75 jobs and reported over $9 million in capital infusion. Thompson has 28 years of experience in business management consulting, and specializes in business creation, partnership building, and product management. The Small Business Development Center at CSUB is one of five service centers that make up the University of California, Merced SBDC Regional Network, which is a partnership between the university and the U.S. Small Business Administration. — Small Business Development Center

GETTY IMAGES

The U.S. Department of Agriculture has launched a program to help new farmers.

New farmers get help from USDA The U.S. Department of Agriculture has launched a website – www.usda.gov/newfarmers – that will serve as a one-stop shop for farmers just starting out, regardless

of age, and seeking help with everything from crop insurance to farm loans. The site includes information about obtaining land and capital, participating in conservation efforts and managing risk. Information on education and technical support is also included. The effort is part of the USDA’s response to concerns that many farmers are nearing retirement age, but few are taking their place. In recent years, Secretary of Agriculture Tom Vilsack has called for 100,000 new farmers to invigorate American agriculture. “New and beginning farmers are the future of American agriculture,” Deputy Secretary Krysta Harden said at a meeting of the department’s Advisory Committee for Beginning Farmers and Ranchers, which had been dormant until recently. “The average age of an American farmer is 58 and rising, so we must help new farmers get started if America is going to continue feeding the world and maintain a strong agriculture economy,” Harden said. — The Bakersfield Californian

Bakersfield unveils moving billboard to lure visitors A new bus traveling between Bakersfield and Los Angeles will double as a moving billboard, with photos promoting Bakersfield as a destination for visitors and recreational activities. “Thousands of commuters and pedestrians each day will see a positive visual message about Bakersfield,” said David Lyman, manager of the Bakersfield Convention and Visitors Bureau, which spearheaded the effort. “This bus will constantly be in different locations as it travels, showcasing Bakersfield as a visitor destination to new audiences.” The bus, owned by Silverado Stages, is used as a private charter and runs several times a week between Bakersfield and Los Angeles under a contract with the Veterans Administration. The Bakersfield Bus sports a photo montage of river rafting, auto racing and downtown’s Mill Creek, all crowned by the arching Bakersfield sign. The montage also includes the CVB’s “More to Explore” tagline and its website, VisitBakersfield.com In addition to its regular route between Bakersfield and Los Angeles, the “Bakersfield Bus” may also be used by Silverado Stages for local private charter service, such as school, military, corporate, contract, sports or social events throughout California and adjoining states. — Convention and Visitors Bureau

PHOTO COURTESY OF THE BAKERSFIELD’S CONVENTION AND VISITORS BUREAU

Bakersfield’s Convention and Visitors Bureau has joined with Silverado Stages to create a moving billboard.”

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Aug. / Sep. 2014

Using Testimonials

Storytelling makes for persuasive, effective marketing By Maureen Buscher-Dang

W

ho doesn’t love a good yarn? Storytelling has long been the way to share knowledge, history and traditions – person to person, generation to generation. It’s in our genes. Good stories are exciting and memorable. They push our buttons. The rags-to-riches story of California Chrome — from horse, to owners, to trainer — is a classic example; the little guy from the wrong side of the tracks who isn’t supposed to win, yet triumphs despite all odds. Storytelling is also an effective technique used by public relations and marketing professionals through the creation of testimonials. Testimonials are a powerful tool. They can create awareness of your service or product. They can be video, or text with a still photo. They are flexible and can be used in a variety of traditional media, such as television, radio, mail and print; or in the new media of websites, blogs, social networking sites, and other user-generated media. Here are some tips for making effective testimonials:

Use someone with whom your target audience can relate. Your message will be more effective coming from someone your potential client perceives as a peer or “someone like me.” For example, Buscher-Dang if you’re a financial planner who specializes in retirement planning, you will probably want to show people over the age of 40. Keep it real. Show real people offering details about their own experiences. I’ve done focus groups for over 20 years. People still prefer an endorsement from “Joe Average,” compared to a polished actor with perfect diction. There’s a degree of credibility when it comes to real people telling real stories ­— warts and all. And those language quirks make it even more genuine. Structure your story. In order to create a cohesive testimonial, decide what you want the person to say without putting the words in their mouth. You can then create five to seven

questions and statements. Design them to elicit the answers you want, such as: “Please describe what you liked best about working with Mike Smith at XYZ bank.” Or, “What specific results did you have during the six month boot camp at ABC Gym?” Ask the person to include a portion of the question in their answer so the response will be something like this: “What I like best about Mike Smith at XYZ bank is I’m not just a number. He really takes the time to listen and work with me on my financial needs.” Make it short and sweet. Most TV testimonials are 30 seconds. But what if you want to post something longer on your website? Limit it to no more than 2 to 3 minutes. Because many people have a short attention span, anything longer can dilute your message. Pet insurance company Trupanion features testimonials with pet owners, www. trupanion.com. They are targeted toward customers and veterinarians. One testimonial with over 3,000 views tells the story of Gracie, a puppy who fell 30 feet after chasing pigeons. It’s engaging and makes you want to watch more. Create an ending. An ending should be

powerful enough to open the door to some action. Whether your testimonial is on television or online, that means the person viewing your testimonial potentially picks up the phone, pulls up your website, or likes and shares your message while using social media. A recent Houchin Community Blood Bank testimonial, www.hcbb.com/secondchance-for-matt-thurber/ features a grateful Condors hockey player. Several pints of blood were needed to save his life. After he thanks donors, the ending shows the words “Please donate blood.” Houchin aired the testimonial on television and posted to their website with links to various social media. It has been viewed and shared multiple times. Most of us put a high degree of trust in referrals and word-of-mouth recommendations when we are in the market for new services or products. Utilizing testimonials throughout all of your public relations and marketing is one of the most powerful and cost-effective marketing tools available.

Maureen Buscher-Dang is a Bakersfield public relations and marketing consultant.

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Beatris Espericueta Sanders

Farm Bureau leader is voice for Kern agriculture

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eatris Espericueta Sanders was appointed this spring to serve as the new executive director of the Kern County Farm Bureau. The daughter of a Shafter farmer, she grew up around the industry and the laborers who are a part of it. This year marks the bureau’s 100th anniversary, and Espericueta Sanders, 33, is the organization’s first female executive director and the first Hispanic to hold the seat. Espericueta Sanders previously worked in finance, spending five years with McKinBeatris Espericueta-Sanders sey & Company, a global financial consulting firm in New York City. She also knows her way around the political arena. She worked for Democratic Assemblywomen Nicole Parra for two years, focusing on agriculture, oil and economic development policy issues. Of the 28 members on Parra’s staff, Espericueta Sanders was one of two Republicans. Espericueta Sanders recently answered the Kern Business Journal’s questions about the future of the bureau and farming in Kern County. This year, the Kern County Farm Bureau will be celebrating its 100th anniversary. How has the organization changed in those years? The Kern County Farm Bureau has been and will always be farmers’ and ranchers’ largest, most loyal advocacy group. While many of the issues faced by farmers 100 years ago are still present today, the Farm Bureau and farmers have evolved in the way they approach those problems. Farmers are passionate about their profession. They have to be to endure the grueling nature of the business. That said, farmers are increasingly realizing that being a good farmer is not enough; they have to take a unified and active stance on policy issues or risk being regulated out of business. The Kern County Farm Bureau wants to lead the charge in unifying farmers toward a common goal of protecting Kern County farms against ill-conceived policy decisions in Sacramento. Our leverage to achieve that goal comes from our growing membership and the shear size of the agriculture industry in Kern County. The Kern County Farm Bureau started with about 200 members in 1914 and we have grown to over 2,200 today. Moreover, in 2013, the agriculture industry employed an average of nearly 60,000 people in Kern County (which increases to nearly 75,000 during the peak harvest months) making agriculture the largest private industry, in terms of employment, in Kern County. We repre-

per year to pump fresh water into the ocean for environmental concerns? Besides the drought, what are some of the biggest challenges facing Kern County farmers?

PHOTO COURTESY OF MARTIN VARGA

Cows line a corral on Stockdale Highway, west of Bakersfield. The Kern County Farm Bureau advocates for area farmers and ranchers.

sent a large constituency and our goal as an organization is to unify that group in pursuit of common interests related to agriculture in Kern County. You have said you want to give local farmers a voice. How have they not been heard? Farmers are often the victims of simplified talking points generated to vilify the industry, for the benefit of environmental and other special interest groups, on issues such as water usage. I like to fight talking points with facts. For example, I often hear erroneous statistics on water usage which suggest that 80 percent of California’s annual water usage is consumed by the agriculture industry. In fact, according to the California Department of Water Resources, from 1998 to 2005, the agricultural industry in California consumed an average of 40 percent of total annual water consumption, compared to 50 percent consumed for environmental purposes. Moreover, I would point out that California farmers have made enormous strides in water efficiency by upgrading to drip watering systems from flood irrigation. According to the California Department of Water Resources, from 1980 to 2000, crop production (tons) per unit of applied water increased by 38 percent. That efficiency improvement is primarily the result of farmers installing drip irrigation systems, which went from covering no farm acres in 1980 to roughly 40 percent today. How has the drought affected local farmers? For the farmers who have sufficient access to groundwater sources, the drought is simply making it far more expensive to grow crops. However, those farmers who don’t have access to groundwater are in more dire situations and are often being forced to let crops die. The end result is that grocery bills are going to increase for everyone. California is a leading producer of many of the fruits and vegetables that we eat on a daily basis. If you just think about the impact that

lower production could have on food prices it’s substantial. According to data from the Bureau of Economic Analysis, the average American household spends approximately $920 per year on fruits and vegetables. Assuming California families spend the same as the national average, that implies total annual expenditures of about $12 billion on fruits and vegetables by California households. That implies that every 10 percent increase in fruit and vegetable prices will cost Californians $1.2 billion per year in higher grocery bills. This obviously ignores the impact that higher grain prices will have on meat and poultry prices, which could be even higher. I view those potential increases in grocery bills as massive tax hikes on American families, as food expenditures are not optional. Moreover, it as a massively regressive tax which disproportionately punishes the lowest wage earning families. What solutions should be pursued? In light of the potentially devastating economic consequences, I think all options should be analyzed and considered. I have heard all sorts of ideas, but the two most prevalent, aside from fighting for a portion of the water used for environmental causes, seem to be increasing water storage to capture more water during the rainy years and recycling water used in the oil industry. I personally believe the easiest, least costly solutions should always be pursued first. That said, most people I talk to about this topic believe that the easiest solution — diverting water from environmental concerns to agriculture, even if on a temporary basis — is a non-starter. Therefore, I think the onus is on Sacramento to explain why they want to potentially impose billions of dollars of food price increases on California families, essentially a massive regressive tax hike, when a solution is readily available to curb food price inflation right now. Given a direct choice between food prices and environmental interests, I wonder what percent of California households would choose to pay billions of dollars

The increase in farming regulations is a constant reminder that farming is never easy. In speaking with different groups, large farmers and small farmers alike, our main focus is on fixing California’s water issue. Next in line would be the important topic of immigration reform. Kern County Farm Bureau is consistently pushing for immigration reform through many conversations with our local elected officials. We need to make sure that our interests, as farmers and ranchers, are considered while the conversations about reform continue. Farmers are also preparing their budgets with the new minimum wage increases as of this July 1. Another raise will come in January 2015. This summer, for the first time, farmers are also faced with yet another fee per acre of farmland to protect our irrigated lands. While I am mentioning only a few of our biggest challenges, I don’t want to forget to note how farmers often become targets for increased produce prices. Given all the recent increases in the cost of farming, there is never a better time to insist that you finish all those vegetables on your plate! You grew up in a farming family. Is this a career path for others your age? Farming is one of the hardest professions I have come across. The hours are grueling. Farmers have forever dirt-stained hands. They have to contend with unpredictable weather, battling legislative issues and, of course, the ongoing fight for water. I often think about the quote: “Whiskey is for drinking, water is for fighting.” It has never been more apparent to me how true this saying is for many farmers and ranchers in Kern County. Farmers never get a day off and it’s incredibly exhausting to have worked so hard only to be slapped with more regulations or a bad weather system. Some farmers prefer their children seek a career path outside of the family farm to spare them the stress that comes with owning and farming soil. However, I see farming in my own family as a way of life. My father looks forward to waking up every morning to teach his grandchildren the inner workings of our farm. He talks about retiring from farming, but I know he will never see his own retirement because of his love of hard work. His hope is that the next generation in farming will make farming more manageable and more efficient for farms to continue producing food for the world. Farming is an art form of sorts. If the second, third and fourth generations have the strong mind and willingness to farm, then our country is better for it.


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YOU DON’T PROFIT FROM SICK EMPLOYEES. WHY DOES YOUR HEALTH PROVIDER? In an industry built on fee-for-service care, Kaiser Permanente succeeds because we’re built around prevention and the highest quality care. One Harvard Business Review article described our care as “untainted by any economic conflict of interest.” * And in an industry report by The Economist, Kaiser Permanente’s care was described as promoting economy and quality care with “no financial motive to order unnecessary procedures.”† To learn more about Kaiser Permanente, call 1-800-464-4000 or visit kp.org/choosebetter.

Discover a better way. * Lew McCreary, “Kaiser Permanente’s Innovation on the Front Lines,” Harvard Business Review, September 2010. †

”Another American Way,” The Economist, May 1, 2010.

kp.org/choosebetter

Aug. / Sep. 2014

Profile for Kern Business Journal

Kern Business Journal August/September 2014  

Kern Business Journal August/September 2014  

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