44th edition of the bradco high desert report

High Desert ReportA quarterly economic overview of the High Desert regionaffiliated with The Bradco Companies, a commercial real estate group

Spring 2009 l Volume 44

The Bradco High Desert Report760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: [email protected]

Inside This Issue

The

CompaniesRADCO

I wish to welcome our current and future subscribers

to the 44th edition of The Bradco High Desert Report, the only quarterly economic overview of the High Desert region, covering the northern portion of the San Bernardino County and the Inland Empire.

As always, we wish to thank all of our article sponsors and our company sponsors for their continued commitment to The Bradco High Desert Report, in our

attempt to find positive, factual, and interesting information as it relates to the High Desert economy.

Undoubtedly, our world, our nation, our state, and the High Desert region are currently challenged with the current financial crisis that we all are experiencing. As publisher, I still believe the “glass is half full,” as evidenced by the announcement on January 8, 2009 that The Bradco High Desert Report will conduct, hopefully, 20 seminars in 2009, which will include two seminars in San Diego County, two in Orange County, four in Los Angeles County, one each in Ventura County, Santa Barbara County, Sacramento, San Mateo, Seattle WA, Portland OR, Las Vegas NV, Phoenix AZ, Denver CO, Dallas TX, and Houston TX, just to name a few.

With the assistance of San Bernardino County, its Economic Development Agency and its GIMS Department, we’ve analyzed the ownership of nearly 85,000 property owners within a 2,000 square mile area, encompassing nearly 600,000 acres of non-tax-exempt parcels.Besides inviting property owners to

these exciting 2 ½ hour conferences, we’ll include information from the five incorporated cities, San Bernardino County Economic Development, Mojave Water Agency, San Bernardino Associated Governments (SANBAG), CalTrans, MDAQMD, The Integra Group (Commercial Appraisals). The idea is to educate those about the many positive aspects of the High Desert economy, and what to expect when the High Desert economy recovers in the future.

We sincerely hope you enjoy reading this publication, and any and all comments are greatly appreciated. You may email me directly at: [email protected], or contact Ms. Robin Sheppard at: (760) 951-5111 x100 or by email at: [email protected] for any comments that you have about our publication.

Joseph W. Brady, CCIM, SIORPublisher

The Bradco High Desert ReportPresident

The Bradco Companies

Economic Observation .................. 2Not “Just Anoter Air District” ...... 6The Challenges That Await our Industry in 2009 ...................... 7Inland Empire Film Commission ... 8VVC Bond Measure Approved By Voters ................ 9Challenges from California ............10Leave Early or Stay Late .............. 11Transportation Projects in the High Desert ................ 12Economic Development Wastewater Treatment ............14Adelanto City Update ................. 17Town of Apple Valley City Update........................... 18Barstow City Update .................... 19Hesperia City Update .................. 21Victorville Equals Opportunity .... 23

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High Desert ReportA quarterly economic overview


Economic ObservationsBy Dr. Alfred J. Gobar

Chairman, Alfred Gobar Associates A key historical characteristic of the High Desert’s real estate sector has been dramatic cycles that have occurred periodically for at least the past century. In the past, investment booms in this area were stimulated by the discovery and development of minerals and mining operations, such as cement, granite, etc. Early in the 20th Century, agriculture attracted new investment to the High Desert. Movie production—Grade B westerns—was another conduit through which investment flowed to the High Desert during the 1900’s. Recreation and second home development stimulated significant investment periodically in the High Desert’s economic history. A major impact on the High Desert’s economic evolution was development of military facilities during World War II—George Air Force Base, Fort Irwin, the Marine Bases, etc. Significant real estate-related impacts on the local economy derived from high-velocity land development programs, such as the initial promotion of Hesperia, which involved construction of a hotel in what was largely an uninhabited desert in the early part of the last century. After World War II, Newt Bass and M. Penn Philips sponsored land promotions in Apple Valley and Hesperia. Since the

1970’s, however, periodic real estate cycles in the High Desert have been driven primarily by development of housing to accommodate moderate-income homebuyers excluded from home purchase opportunities in the Los Angeles Basin by episodes of rapidly-escalating home prices. These episodes of economic inflow have ratcheted the High Desert’s economy upward because they create a permanent population base to live in housing especially oriented to commuters to jobs “down the hill” in the urban Los Angeles Basin. Because of increase in permanent population derivative of these episodes of housing development, overall real estate development in the area has been more broad-based as retail and service facilities are developed to respond to an increasing consumer population base and local labor force. The key real estate product of the post 1970 real estate booms has been single-family detached housing oriented to young families seeking the American dream of homeownership within the constraints of their budgets. Typically, in the West and Southwest, 70.0 percent of the value of new real estate construction in an urban economy is for residential purposes—the bulk of

which is in the for-sale sector. Another 22.0 to 24.0 percent is in retail facilities and offices. Industrial development usually accounts for 6.0 to 8.0 percent of aggregate development of new real estate facilities in a typical economy. In Southern California, however, because of the local area’s propensity for expensive housing, almost 80.0 percent of the value of recent new construction has typically been for residential uses. About 8.5 percent has been in retail development, 7.7 percent in offices, and 6.3 percent in industrial facilities. On the High Desert, new residential development represents an even larger proportion of the total because of the unbalanced profile locally between population and local jobs. The High Desert typically has not provided job opportunities (involving office and industrial uses) consistent with its labor force. The result is that many employed residents of the High Desert commute to jobs located on the other side of the Cajon Pass. Gradually, as the High Desert’s population passes certain threshold levels, it becomes more economically balanced. Office and industrial development will become an increasing percentage of total development in the future. Land speculators should be sensitive to the distribution of urban land uses in a

THE BRADCO HIGH DESERT REPORT

Publisher: Mr. Joseph W. Brady, CCIM, SIOREditors: Ms. Robin Sheppard and Mr. Lowell Draper

P.O. Box 2710, CA 92393-2710(760) 951-5111 BSN Ext. 100 l (760) 951-5113 FAX

www.TheBradcoCompanies.com l e-mail to: [email protected]

Published Quarterly, Subscription$59.95 Domestic / $79.95 Foreign per year

Postage paid in Victorville, CA l Send address changes to above.Entire contents copyrighted. All rights reserved. Material may not be reproduced in whole or part without permission from

the publisher. Every effort is made to provide reliable information from reputable sources. The publisher assumes noresponsibility for inaccurate information. The Bradco High Desert Report is printed on recycled paper.

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Economic ObservationsContinued

typical Western Metropolitan Statistical Area. About 50.0 percent of urban land is absorbed for residential uses, another 22.0 to 25.0 percent is committed to roads, streets, etc. Subject to fairly wide variation, from 13.0 to 15.0 percent of urban land is developed for public and semi-public uses—schools, hospitals, churches, golf courses, etc. The balance is committed to retail, office, and industrial uses. Obviously, major absorption of private sector land in an area like the High Desert involves a substantial element of residential development. Residential development on the High Desert has historically been driven by the high price of for-sale housing at locations closer to the major job centers in Southern California—Los Angeles, Orange County, San Diego County, etc. The High Desert’s real estate economy is on the edge both geographically and in terms of volatility of the Southern California real estate market overall. When overbuilding, recession, or other factors induce reduction in real estate development throughout Southern California, the reduction on the High Desert is more than proportionate just as during boom periods, the response on the High Desert is more than proportionate to the boom elsewhere in the more developed portions of Southern California’s economy. This pattern is a special opportunity for speculators. Currently, the United States and Southern California are in recession, induced in large part by irresponsible mortgage underwriting that resulted in rapidly-escalating home prices and the origination of residential home loans that are unsustainable in terms of their terms and the financial capability of many marginal borrowers. This recession has been anticipated for an extraordinarily long time—at least 18 months. Politicians have become fond of a mantra that takes

the form of “…the worst economy since the great depression,” etc. As a result, a good deal of semantic ambiguity attends contemporary use of the terms “recession” and “depression.” Until recently, academics defined a recession as an interval in which a specific economy experienced two back-to-back quarters of negative economic growth. Although the current recession was discussed for an inordinately long period of time before it became evident, the requisite two back-to-back quarters of negative economic growth did not actually occur until the third and fourth quarters of 2008. The economy declined in the fourth quarter of 2007 and then grew relatively well in the first and second quarters of 2008 while the media and politicians bloviated about recession, etc. Among the comments on economic trends and circumstances widely available in the media is some claiming the current recession began in December 2007. In light of the formal definition of a “recession” above, these claims are hard to accept at face value. Between December 2007 and June 2008, total employment in Southern California (Ventura County south excluding Imperial County) increased by 76,600 jobs. Between December 2006 and June 2007, the increase was only 48,900 jobs; i.e., early 2008 was not a recession in Southern California. The economy had been sluggish but not exhibiting the negative growth characteristics formally associated with a bona fide recession. This period, however, was characterized by a credit crisis brought on by a series of factors, among which the author thinks some of the more important is insulation of money managers from personal financial risk. When investment banks began to go public, they shifted risk of their bad decisions to stockholders and

away from partners in the investment bank. Previously, partners in investment banks had skin in the game. This relief from personal financial risk encouraged investment banks to pursue high-risk policies, such as extraordinarily high leverage—40:1 leverage in many cases. It also encouraged the financial community as a whole to rely on sophisticated financial structures, including derivatives, default swaps, interest rate swaps, etc., presumably to insulate investors from risk. These sophisticated structures fell short of their intended purpose as the leveraged financial system began to unwind in 2007. Another important consideration was emergence of a huge secondary market in mortgage-backed securities by which the mortgage originator could shift the risk of a mortgage-backed security to a passive investor almost anyplace in the world, thereby insulating themselves from the implications of bad mortgage origination policies. These efforts were encouraged by the aggressiveness of Freddie Mac and Fannie Mae in facilitating the secondary market in order to increase homeownership—driven in large part by political objectives. The Federal government many years ago eliminated income-tax deductibility on interest paid by consumers on loans used to purchase most consumer assets. The exception was residential mortgage loans. This tax break encouraged consumers not to pay off their home loans. Prior to the past 25 years, one of the objectives of homebuyers was to “burn the mortgage.” Financial advisors, however, in recent years have advised homebuyers that they are foolish ever to pay off their mortgage. Despite the large role in the current economic dislocation played by the credit markets, bank failures have been surprisingly modest to date. In 2005 and 2006, there were no bank failures in the

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U.S. In 2007, only three banks failed. In 2008, 24 banks failed between the first of the year and December 12th. Some of the failing banks in 2008, however, are large—Washington Mutual, IndyMac, etc. In comparison, in 1988-89, bank failures occurred at a rate of ten per week, or two per working day—500 a year. In that episode of financial adjustment during the savings and loan crisis, there was no significant recession. The credit crisis, which many people in banking anticipated as long ago as 2003 as a result of sub-prime loans and other irresponsible lending practices, has had a significant general economic impact this time, partly as a result of induced fear about the possibility that banks would not be able to honor withdrawals, etc., etc., etc. Fear has been a huge component of this current economic “crisis,” affecting the stock market, the banking community, and the general economy as reflected in consumers’ unwillingness to make major purchases during a time when they hear constantly about crisis. One measure of the current economic dislocation (as of this writing in mid-December) is that unemployment in the United States was 6.7 percent. The author’s best estimate is that through 2009, national unemployment levels will rise to about 8.0 percent. In comparison, currently the unemployment rate in Germany is 7.5 percent. In France, it is 8.2 percent. In the European economic community, overall unemployment rate is currently 7.7 percent. These numbers do not appear to be consistent with the hysteria and fear that surrounds current unemployment in the U.S. Historically, we in the U.S. have experienced periods of substantially higher unemployment. During most of the 1930’s despite extraordinary efforts on the part of the FDR Administration, unemployment tended to hover around

20.0 percent overall. In 1958 at the end of the post-war boom, unemployment was 6.8 percent—slightly above the current level. In 1976, unemployment in the U.S. reached 7.7 percent. In 1982 when prime interest rates were on the order of the 20.0 percent, the unemployment rate was 9.7 percent, and in 1984 and 1992 unemployment reached 7.5 percent. Some cynical observers comment that activist responses to the credit crisis and the attendant economic dislocations by the Federal Reserve System, The Treasury, et al, may be contributing to fear that is such an important factor. Certainly observing Congress in the process of conducting hearings related to the issues causes one to question whether we are in good hands. In order to correct the situation, our economy is in the process of deleveraging, which involves selling good assets in order to pay off the shortfall on the value of bad assets relative to margin loans induced by high levels of borrowing to purchase financial assets. This drives down the value of “good” assets. Hopefully, the system will reestablish more personal responsibility, although recent information regarding Bernie Madoff and his giant Ponzi scheme is not reassuring in this regard. Obviously, one of the key problems has been the extraordinarily high price of housing relative to incomes and, therefore, the limited ability of many consumers to make payments on their mortgages. Home prices, however, have recently fallen sharply in many parts of Southern California, with decreases on the order of 30.0 percent or more from peak prices. Home prices are beginning to get into a realm which appears to be consistent with economic recovery. We need to overcome our fears—admittedly very difficult in light of all the negative information we hear, some of which is actually true. We need to root out

mismanagement on the part of lenders and also on the part of government and encourage personal responsibility for bad decisions. A major question with regard to real estate investment on the High Desert is how long the current dislocation will last and how deep will it be? Many observers say that recessions should last about 18 months. If the recession began in December 2008, we have a fairly unhappy future ahead of us. If, however, as some claim the recession actually began a year earlier, we are about two-thirds the way through an 18-month recession. The depth of the current dislocation is difficult to estimate because it is related to psychological concern to an extraordinary degree. During the 1990 recession in Southern California (which was the result of massive restructuring of Southern California’s aerospace industry), total nonagricultural wage and salary employment declined between 1990 and the bottom of that recession three years later by about 7.0 percent. In order to match that decline in percentage terms, the current recession would involve loss of somewhat more than 600,000 jobs in total. So far, since the peak before measurable decline in nonagricultural wage and salary employment in Southern California began, we have lost about 125,000 jobs, leaving roughly 475,000 jobs to go—not a happy prospect. The likelihood of this occurring is more closely related to fear and perception than it is to economic reality. The early months of the current economic dislocation showed a less dramatic employment decline than during the comparable part of the 1990’s recession, although since September 2008 job loss in Southern California on a relative basis has been more than it was during the comparable period of the 1990-93 recession, reflecting the impact of extreme fear in many parts of the U.S.

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economy. Assuming the current economic dislocation reaches its nadir in mid-2009—the date given by a number of prognosticators of sufficient prominence to be featured in the media—the local real estate economy is still not likely to recover for quite some time. As shown in the Exhibit, the decline in employment in Southern California during the 1990-93 recession reached bottom in about 1993, but no sustainable increase in building permit activity in Southern California overall occurred until about 1996. A three-year lag, assuming that the economy bottoms in Southern California in July 2009, suggests that building permit activity in Southern California will pick


up in 2012. Also shown in the Exhibit, however, is the lag between building permit activity response in Southern California overall and permit activity for single-family detached homes either in Southern California in its entirety or in the High Desert. Significant acceleration of development activity after the 1990-93 recession in terms of single-family houses on the High Desert didn’t occur until 2001, which was roughly eight years after the bottom of the 1990-93 recession. Applying this lag to an estimated bottom in 2009 suggests that one might anticipate a rapid run-up in residential land prices on the High Desert sometime after 2017. On a less dismal note, the bleeding will likely stop around

2012 to 2013. Given the life expectancy of the author who is now approaching his eighth decade, writing this article was more difficult than I had anticipated in terms of my plans to speculate in High Desert land again.I guess that’s why they call economists the “dismal scientists.” “Scientists” may not be a suitable appellation for economists in any case.

Exhibit



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the District confers its prestigious Exemplar Award on the best of its regulated community whose work in the area of air pollution prevention or control “raises the bar” for others. Year-round, our inspectors also seek out gas stations which exceed regulatory requirements, and these stations receive the Mojave Green Business Award. Our goal is to relate to regulated businesses in a common-sense, approachable manner while performing our mandated responsibilities. Our Stationary Sources Department is the first stop for new businesses. This is where business owners can apply for air quality permits and work closely with engineers to identify permit conditions and regulations applicable to their operations. Our staff partners with other agencies and organizations who share our goals of protecting the environment, educating the public, and supporting the business community; after all… Clean Air Is Everybody’s Business! To find out how doing business within the MDAQMD could be good for your business, call (760) 245-1661 or visit us online at www.mdaqmd.ca.gov today!

Not “Just Another Air District”By Cindi Wray

Community Relations & Education Specialist

In today’s economic climate, regulatory flexibility can mean the difference between success and failure for some businesses. Historically, California’s air quality regulations have garnered a reputation as being some of the most challenging in the nation. The State of California is divided into 35 local air districts that are responsible for implementing these regulations, which apply to stationary sources of air pollution. Each district implements air quality programs required by state and federal mandates and enforces rules and regulations based on air pollution laws. Every air district in the state must show progress in reducing air pollution to meet state and federal air quality standards in order to preserve the environment and protect the health and safety of the general public.

So What Makes Us Different?

The Mojave Desert Air Quality Management District, the local air district which regulates air quality in the High Desert portion of San Bernardino County & the Palo Verde Valley of Riverside County, is structured in a manner which allows policy on air quality issues to be developed and debated by those who are most affected by it: regulated industry. Thus, we employ a common-sense, inclusive approach to the development of air quality management programs. To the fullest extent possible, industry is our partner in the development of air quality plans, rules, and policy. Through District-sponsored workshops and meetings, our staff works in a pro-active manner with those impacted by legal mandates

to find the most prudent course of action and to resolve conflicts to the maximum extent possible. We believe that tapping ideas from all possible sources is the best way to find mutually beneficial solutions. As a result, local industry has more flexibility in meeting environmental mandates than it’s counterparts in neighboring air districts and even some nearby states. As an example, in response to federal and state scrutiny of non-traditional Emission Reduction Credit sources - along with the increased demands for particulate matter credits - the MDAQMD Governing Board recently adopted Rule 1406 - Generation of ERC’s for Paving Unpaved Public Roads, which rendered ERC’s from unpaved road paving fully state- and federally- approvable. As a result, the region will benefit through more paved roads, improved air quality, and a greater capacity for attracting new businesses.

The Mission Of MDAQMD

“To attain and maintain a healthful environment while supporting strong and sustainable economic growth,” is the MDAQMD’s mission statement. Rather than focusing solely on punitive actions, the MDAQMD takes pride in r e c o g n i z i n g businesses which set an example of environmental s t e w a r d s h i p . During Pollution Prevention Week each September,



Our economic stimulus package had a few core components on which we will continue to build. A primary component of the stimulus package is seeking fee relief and or the mitigation of exactions, when and where we believe it is just to seek it. The current fiscal crisis that both our federal and state governments face will trickle down to the local level more acutely as revenue sources from higher levels of government dry up. As a result of much lower housing prices, fees for our industry have become more acute, simply on a de-facto basis as a percentage of the price of the home. Home prices and land prices have dropped and homebuilders have been aided cooperatively through lower costs from our subcontractors and vendors; in most instances, however, development impact fees have not dropped to levels in line with our new and market-driven home prices. Therefore, it is our goal to work with our jurisdictions to seek equitable relief of what are now disproportionately high fees down to levels that reflect accurate and current costs. We are hopeful that our civic leaders will address this paradigm shift in our industry at a critical time when all parties stand to gain together. The government affairs team will also work with our local jurisdictions on the timing of fee payments. Last year, we worked with many jurisdictions to allow builders to pay fees at the issuance of a certificate of occupancy (C of O). Paying fees at C of O helps to lower the corresponding home price because builders do not have to carry the extra finance costs of paying development impact fees up front, before the home is built or sold. Due to the hard work of our government affairs team, many of our local cities allow this fee payment

schedule. We are grateful for the support we have received from those cities and county agencies that have granted this, and we will continue to work with other cities and special districts that do not currently allow payments at C of O, to seriously consider this option. Among other important items, environmental issues will play a key role in our government affairs efforts in 2009. At the regional level, we will work with BIA/SC to ensure the balanced implementation of SB 375. As you may know, SB 375 sets standards for greenhouse gas emissions, and it aims to reach these targets through the reduction of Vehicle Miles Traveled (VMTs). Future land use planning throughout California will be centered around the reduction of VMTs, and SB 375 will be the primary driver for the implementation of the associated regional planning. We plan to hold workshops on the topic once our region’s specific planning begins. Keep an eye out in our government affairs updates for these meetings. Let’s not forget the long term implications of one of our most important resources: water. It is a key natural resource that could either help or hinder our industry and must be addressed for the long-term, regardless of our market cycles. For the last two years, we have held successful San Bernardino County Water Conferences, and we plan for the 3rd annual event in August. Last year’s conference featured Lt. Gov. John Garamendi as testimony to the importance of this matter. This conference gives us a forum to get all of our stakeholders in one venue to discuss collaborative solutions for the continued stable, reliable, and clean water supply for our region’s current and future residents. Please look for upcoming

As we usher in the New Year, the nation and our industry as a whole face some unique and unprecedented financial challenges. Our markets and financial systems appear to still be searching for a bottom. Consumer confidence has eroded as unemployment has increased, which has caused Americans to curtail spending on everything from televisions and clothing to homes. Governments at all levels, including globally, have made drastic and unprecedented moves to inject capital into our markets and get the economy moving again. It remains to be seen, however, how successful these measures will be. The housing market remains the cornerstone of the nation’s long-term economic stability. We have unfortunately witnessed that the building industry’s woes have significant impacts on the economy as a whole. The housing market has played a key role in our region’s economy; therefore it will be the cornerstone of our own recovery in Southern California. Simply put, home prices will have to stabilize for the economy as a whole to recover. With this in mind, I look forward to the New Year and the unique challenges that lie ahead. Our primary goals this year will be to make our contribution to market stability and job growth for our industry and region. Our government affairs advocacy will be at the forefront of these efforts and absolutely crucial for positive policy change. In Frank’s CEO column he outlined “the year in review” and mentioned the many accomplishments that our government affairs team had in enacting our own “Economic Stimulus Package”. We will not rest on our laurels in 2009, and we plan to build on the accomplishments we had last year.

The Challenges That Await our Industry in 2009By Scott Coler

Capital Pacific Homes

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The Challenges That Await our Industry in 2009

Continuedinformation regarding the date and time for this important BIA sponsored event. While the upcoming year will present some significant challenges, we remain committed to meeting your company’s needs during these tough conditions. We will continue to recruit new members, continue to enhance our special programs for membership retention, and as added support will offer benefits to members in transition between jobs. The Baldy View Chapter will host educational seminars, general meetings, and PASS meetings to keep you informed of the most up-to-date issues that affect our industry. During this time there is no doubt that everyone among us will have to make tough business decisions. However, membership in the Baldy View Chapter remains a great investment. The networking and educational opportunities as well as the host of events offered by our various committees will allow you to keep your skills honed and to help your business succeed in the face of any adversity. We look forward to working with you as your President in 2009!

The High Desert region of the County of San Bernardino has the very diverse locations which make the area attractive to filmmakers. Thanks to Supervisor Brad Mitzelfelt the process of having additional areas for production is moving through the BLM process and should go out to bid within the next month.

Some of the major feature films that have found “just the right look” recently have been NBC Universal’s Fast and Furious, Universal City Studios’ Land of the Lost, Paramount Pictures’ Star Trek, and G.I. Joe: Rise of Cobra, and United Artists’ Valkyrie. Unfortunately, the ability for California to keep these kinds of major feature films in the state may have dwindled to almost nothing. We just recently learned through a joint meeting of film commissions across the state that no studio has budgeted a film for California in 2009 due to the lack of tax incentives in California for the film industry and the steep competition of incentives from other states and countries. California has not stayed competitive in the marketplace. Instead of “Run” Away Production, we are now following Film L.A.’s lead and

calling it “RAN” Away Production.

Jack Kyser, Chief Economist at the Los Angeles Economic Development Corp, was quoted agreeing with Film L.A. in the Hollywood Reporter “You have all the other states sweetening their incentives, but we’re sitting here just watching our entertainment industry slide away and not fighting back.” Kyser said, “It’s like in the early 1990’s during the downsizing in the aerospace industry, when other states were going after our aerospace jobs. Did we do anything? No, we just let it happen. We’re just too passive about these things.”

The Inland Empire Film Commission is one of the leaders of a massive phone campaign to our elected officials in Sacramento. We will certainly be calling on everyone in the High Desert who loves films and/or works in the industry or provides them with services to join us in this effort.

In spite of all these issues, the Writers strike and the uncertainty surroundings the SAG contracts and potential strike, the County of San Bernardino in 2008 had an economic impact of $31,161,650 from filming created by 1,062 production days from 375 projects that filmed throughout the county. For filming to continue to be an economic engine in San Bernardino County, we are going to need a grass-roots effort to convince our elected officials how important filming is to the survival of our economy. As we continue our efforts, we will keep you informed and ask that you do your part to keep filming in California.

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Inland Empire Film CommissionBy Sheri Davis



so that they may receive a college degree. Offering basic skills classes will provide students with the fundamentals in English, math, and study skills to fully succeed at the college level.

The center will also be used to address a region emerging into a service economy. It will include a Business Academy featuring state of the art training, facilities, and equipment as well as short-term training opportunities and programs that provide degrees and certificates. The Business Administration Department will expand and develop new course offerings that will be responsive to the new businesses and industries locating in the High Desert.

The center will include a second academic building that will support a Health Sciences Academy and an expanded Hospitality program with culinary components. The project will provide needed laboratories, lecture space, and support spaces that will complete the center.

The following programs are planned to be offered at the Center: Registered Nursing, Respiratory Therapy, Certified Nursing Assistant, Medical Assistant, Phlebotomy Certification,

Victor Valley Community College Bond Measure Approved by VotersBy Bill Greulich

Last November, Victor Valley Community College placed a $297.5 million general obligation bond measure on the ballot. Well over 60 percent of the district’s voters cast their ballots in favor of the measure (JJ). The measure required 55 percent support for approval. The bond will be used to retire past funding for previous college improvements and fund a new work force development center in Hesperia, a public-safety training center in Apple Valley, and repairs and enhancements to the current campus.

After first retiring the debt for funding of previous college improvements, the college will begin the development, in conjunction with the Apple Valley Fire Protection District, a Public Safety Training Center project that will provide an educational complex known as the Fire / Police Emergency Services Academy. The Fire / Police Emergency Services Academy will be a main hub of Public Safety Programs and will provide students, employers and the community with training and educational programs that meet both current and future needs of public safety in this region.

Programs offered in this location would include Fire Technology, EMT,

and Administration of Justice, utilizing training props like burn towers, flash over trailers, auto extrications and rail car (Haz Mat Training). The goal of this educational center would be to become a certified regional training center for Fire, EMT, and Post certification for law enforcement. The next step in the process will be the construction of a new Workforce Development Center. This project will include the construction of a new education center located in the western region of the district’s service area. The vision for the Workforce Development Center is to create a Workforce Training Complex with major components that address a region emerging into a service economy. The initial stage of the plan for the Workforce Development Center will provide the foundation for this Workforce Training Complex. In the initial stage, the center will begin by providing a range of services with the goal of implementing a “One Stop Shop” concept so that students can receive all of the services to support their educational needs on site. In addition, the center will provide the initial instructional facilities to offer general education and basic skills courses. This phase will allow students to meet general education requirements

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Victor Valley Community College Bond Measure Approved by VotersContinued

Restaurant Management, and Culinary Arts. In addition to the above programs, the Health Science Department would provide additional programs, certification and specialty courses that are in high demand in the High Desert and Inland Empire. Examples include programs for Medical Lab technicians, Pharmacy technicians, medical transcriptionists, Medical Records and Health Information technicians, and Radiological and Psychiatric technicians.

Funds from the bonds are designated

for college refurbishment at the current campus.

Improvements include the upgrade, maintenance, upgrading, and/or replacement of obsolete instructional facilities. The district would also utilize bond dollars to leverage State Capital Outlay Funds for the construction and modernization of campus facilities. An example is the addition to the Science Building, which doubles the laboratory space and provides large, tiered lecture halls. Matching bond dollars would help the total overall score of the

project, allowing the project to score higher and be competitive in leveraging state funds. Further, refurbishment will include utility and infrastructure upgrades to electrical, water, sewer, and data/telecommunications. It will also fund updates to the Data Network to provide better, more efficient data/telecommunication services in order to handle the greater volume of high-tech communications. This project will also address issues related to parking configuration, traffic flow, campus road improvements and campus-wide way-finding.

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Challenges From California:California Mineral Producers Fight to be Ready When the Economy Recovers

By Dinah O. ShumwayTerraMins, Inc., Economic Geologists and Mining Consultants

California’s mining industry will be among many industries attempting to stay afloat over the next year. Construction aggregate and cement production comprise about 70% of California’s mineral production, and together the construction and aggregate industry comprise about 10% of California’s gross product. The California aggregate industry alone employs about 35,000 workers. With the recession in full swing and the absence of new capital for expansion investment, the California mining industry is struggling. And, at least at this writing, the California State Legislature does not seem willing to commit to a budget that will grow anything except more government. It is hopeful that a new president has at least some plans to build and repair infrastructure as part of the stimulus package.

It is amazing to realize that just two years ago, California construction aggregate producers could not keep up with demand for their product.

Californians were consuming aggregate reserves at a rate of 7 tons per capita per year. Growth has been the game in California since the earliest days of the gold rush, and the last few years have seen metropolitan areas, such as the Inland Empire of San Bernardino and Riverside Counties, leading the nation with growth numbers exceeding 7% annually. This growth and a strong economy (experienced nationally) fueled the construction industry with demand for raw materials growing in lock step with expansion of the commercial and housing construction markets. With new bond issues approved by California taxpayers tired of deteriorating roadways and

longer and longer commutes, road improvements construction projects have been implemented in many urban areas.

The hot aggregate market fueled concerns that California might not actually have enough reserves (i.e. permitted resources) to supply all the new projects on the bond-funded drawing boards. The update of the California Geological Survey’s Map 52: Aggregate Availability in California enhanced concerns by identifying major construction aggregate shortfalls in almost all production-consumption regions. The report concludes that only 32% of the total projected 50-year demand for construction aggregate in California was currently permitted. At the levels of growth in our recent past, reserves would be depleted within 16 years.




Los Angeles/ Inland Empire region to advise motorists of this weekly event. This work has been expedited to minimize public inconvenience. The original plan was to blast four days a week. It was been consolidated to Wednesdays, the slowest travel day of the week. “Our goal is to get the work done quickly in the safest possible way”, stated Caltrans District Director Dr. Ray Wolfe.

Electronic message boards have been activated in Nevada and California to warn motorists in advance of the closure. To get the latest information about the scheduled work, go to www.caltrans8.info.

So tell your friends, neighbors and co-workers, “Wednesdays will be a blast on the I-15.”

11

That is why Caltrans is advising motorists that are leaving the Las Vegas Resort area, “Leave Early or Stay Late” to avoid delays. Southbound travelers who did not exit before Primm at the state line will be directed off the freeway by Nevada Highway Patrol to the Primm Valley resort area. This location offers a safe, comfortable, and convenient area until the freeway re-opens. There is sufficient parking at Primm Valley to accommodate all motorists. Truckers are encouraged to exit at Jean off the I-15.

Caltrans has been working closely with the Las Vegas Convention and Visitors Authority (LVCVA) to spread the word to hotel guests. Las Vegas news channels have been reporting on the closure as well. Caltrans has purchased radio ads with Highway Radio stations and KFWB for the

Caltrans continues to make progress on blasting rocky slopes next to the southbound I-15 lanes. This will allow the contractor, Las Vegas Paving to widen the I-15 for the truck descending lane. It will be paved with concrete asphalt that gives a longer life span for the pavement that will withstand the weight of heavy truck traffic.

In order to do the blasting and rock removal under safe conditions, I-15 has been closed every Wednesday mid-day since January 7 and will continue through April this year. The closure is between Primm Valley and Bailey Road near Mountain Pass, south of the Nevada state line. The planned closures are set from 10:00 a.m. to 2:00 p.m. every Wednesday. Northbound I-15 traffic has minimal delays of approximately one hour from 10 am to 11 am. This allows time to set up the closure for the blast, and afterwards do a safety check of the roadway to be sure no flying debris is blocking the northbound lanes before they are opened. Nevada and California Highway Patrol officers are present during the closure to assist with traffic control.

Leave Early or Stay Late (From Las Vegas, that is)By Rose Melgoza

Keep abreast of the events in the most dynamic real estate market in Southern

California.

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San Bernardino Associated Governments, known as SANBAG, is the council of governments and transportation planning agency for San Bernardino County. SANBAG is responsible for cooperative regional planning and furthering an efficient multi-modal transportation system countywide. SANBAG serves the 2.1 million residents of San Bernardino County.

As the County Transportation Commission, SANBAG supports freeway construction projects, regional and local road improvements, train and bus transportation, railroad crossings, call boxes, ridesharing, congestion management efforts, and long-term planning studies. SANBAG administers Measure I, the half-cent transportation sales tax originally approved by county voters in 1989 and reapproved to extend from 2010-2040.

SANBAG looks at the transportation needs of the entire county and then breaks off into specialized committees, such as the Mountain Desert Region Committee. This is comprised of board members from the High Desert region, who have added interest and knowledge about projects in their area.

Long-term Planning

There are many transportation planning efforts in progress in the Victor Valley and High Desert. Following is a summary of some of the long-term projects being planned now and for the future. Also included on the following pages is a map indicating the location of High Desert projects.

Cajon Pass Project

I-15/I-215 Interchange in Devore:The junction of Interstates 15 and 215, known as the Devore Interchange, is considered a major bottleneck as freight, commuter, recreational, and other vehicles travel through the Cajon Pass. This project will reconfigure the interchange to provide four lanes in each direction on the I-15 corridor, and possibly add truck bypass lanes to help improve traffic flow. Preliminary Technical Studies and the Project Study Report have been completed and approved. The project is currently in the environmental document phase, which will continue through 2011. It is anticipated that construction will start in late 2013. Public outreach meetings will be held in Devore in the coming months (dates to be announced), at which alternatives will be presented. Preliminary project cost estimates are in the $350 million range.

Victor Valley Projects Big projects in the works and plans for the future

High Desert Corridor – Phase One This project is a new 21 mile highway, realigning State Route 18 (SR -18) from the east side of Apple Valley to the existing US Highway-395 south of Air Expressway. The City of Victorville is the lead agency. It is currently in the Project Approval and Environmental Document phase, which is expected to be completed in mid-2012. The total cost to build the highway is $550 million; the construction date has not been set.

Transportation Projects Make Inroads in the High DesertSANBAG

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High Desert Corridor The County of San Bernardino, County of Los Angeles, and the Cities of Adelanto, Victorville, Apple Valley, Lancaster, and Palmdale have formed a Joint Power Authority (JPA) to develop a new freeway/expressway/toll road from SR-14 in the City of Palmdale to I-15 in the City of Victorville. The Project Study Report has been completed on this project, also referred to as the E220 project, and various options are being explored, including Public-Private Partnerships.

LaMesa/Nisqualli Road Interchange This new interchange will provide an alternative to Bear Valley Road, which is currently the primary exit to the Victor Valley Regional Mall and a major street that serves the cities of Hesperia, Victorville, and the Town of Apple Valley. The LaMesa/Nisqualli Interchange is an important part of a regional corridor that will extend from Interstate 15 to the Town of Apple Valley. Nisqualli Road will connect to Green Tree Boulevard, which will intersect with Yates Road at the north end of Spring Valley Lake and travel across the Mojave River via a new bridge. The estimated cost of this Interchange is $60 million.

Yucca Loma BridgeThe proposed Yucca Loma Bridge will connect Yucca Loma Road on the Apple Valley side of the Mojave River with Yates Road on the Victorville side. The new roadway and bridge would carry vehicles, bicyclists, and pedestrians. The jurisdictions are currently evaluating the alignments and are looking toward approval of the environmental document by September 2009. The cost of the




California Aqueduct. The 12.5 miles of the project will probably be built in phases over a number of years. The total cost of the project is anticipated at $100 million.

Victor Valley Transit AuthorityThe Victor Valley Transit Authority (VVTA) provides local bus service for the communities of Adelanto, Apple Valley, Hesperia, Victorville, and several unincorporated areas in San Bernardino County. In September 2008, VVTA added seven new buses to its fleet, which are equipped with the latest technology, are more comfortable and run on clean-burning CNG (Compressed Natural Gas) fuel instead of diesel fuel. Bus ridership has been rising steadily and has increased by 11% over the past year. VVTA currently operates its fleet from a facility located in Hesperia and is preparing to construct a new Victor Valley Transit Facility to house administrative, maintenance, and

operations functions, along with the larger fleet. SANBAG is working with VVTA to obtain funding for this project. VVTA is one of five transit agencies that SANBAG supports countywide.

North Desert Projects

Lenwood Road Grade SeparationThe Lenwood Road grade separation at the BNSF Cajon Line (with shared use by the Union Pacific) is the northernmost of the Alameda Corridor East grade separation projects in San Bernardino County. Lenwood Road provides a northwesterly connection between Interstate 15 (I-15) and State Route 58 (SR-58), both of which are among California’s key goods movement corridors. Because of Barstow’s strategic location at the intersection of these two facilities, the area adjacent to Lenwood Road is increasingly being developed as a warehousing and distribution center in close proximity to Barstow’s extensive

bridge is estimated at $18 million.

Ranchero Road InterchangeThe proposed Ranchero Road Interchange at Interstate 15 is located in the City of Hesperia, approximately 1.78 miles north of the existing Oak Hills Road Overcrossing and approximately 1.42 miles from the existing US-395 Connection Overcrossing. The Ranchero Road Interchange will include the construction of ramps to serve four entrance and exit moves, construction of a new overcrossing structure at the I-15 freeway to provide east/west connections, and realign the frontage roads—Caliente Road and Mariposa Road—on either side of the freeway. The cost is anticipated at $98 million.

US-395 widening This project will widen US-395 to four lanes, construct a left-turn section and standard shoulders. This project will widen or replace the structure over the

Transportation Projects Make Inroads in the High DesertContinued

13




existing southbound truck lane, widened shoulders on all sides, improved ramps, smoother driving surface, upgraded guardrail, and improved drainage. These improvements are intended to improve operations and safety by separating the slower moving trucks from passenger vehicles.

The project started in spring 2008 and will be completed by summer 2010. Through an active community outreach program, Caltrans is informing motorists about the traffic delays due to construction and blasting. It has also been working closely with Nevada Department of Transportation and the Las Vegas Conventions and Visitors’ Authority to coordinate public outreach.

Numerous other High Desert transportation projects are in the planning and/or environmental study phase. For the latest information on current projects, go to: www.sanbag.ca.gov

rail yards. Lenwood Road is also the primary point of access to the Barstow Industrial Park, which is projected to create as many as 10,000 jobs when completely built out. Currently, truck traffic travels eight miles out of the way to avoid the Lenwood Road at-grade crossing, because of the unreliability of access. Lenwood Road is a major north/south two-lane arterial “through route” that carries approximately 4,200 vehicles per day. An estimated 94 freight trains and 2 passenger trains cross Lenwood Road daily, creating substantial traffic delays and providing a physical impediment to emergency response service, and mobility to local businesses and residents. The cost of this project is estimated at $25 million; it is in the Project Approval and Environmental Design stage.

Kramer Junction in Mojave DesertThis project will bring State Route 58 (SR-58) up to a 2-lane expressway near Kramer Junction, between Barstow

and Bakersfield in the Mojave Desert. Caltrans is leading this project, which will cost $119 million.

The expansion of SR-58 is needed for three reasons. First, increased capacity is needed. The existing infrastructure cannot meet the current demands placed on it, let alone the increased demands of the future. Second, safety concerns were raised on this stretch of highway. Accident rates, including fatality rates, are significantly higher than the average state accident and fatality rates. Finally, increased route continuity would be achieved by this project. An expanded SR-58 would be closer to becoming a continuous expressway between the Kern/San Bernardino county lines and Interstate 15 (see map).

I-15 Truck Lane Project near StatelineImprovements along the 10-mile stretch of freeway will include: a new northbound truck descending lane, addition of stronger pavement to the

Transportation Projects Make Inroads in the High DesertContinued

14

Economic Development - - Don’t Forget Wastewater TreatmentBy Logan Olds

General Manager, Victor Valley Wastewater Reclamation Authority

We are hearing a lot of talk about infrastructure these days. When we think of infrastructure what comes to mind? Streets, bridges, freeway access - - those are favorites on everyone’s list. Utilities such as electricity, gas and water also make up the basic framework of our modern lives.

A critical part of any community’s infrastructure that rarely comes to mind is wastewater treatment. The truth is there can be no real economic development

in an area without adequate wastewater treatment.

Victor Valley Wastewater Reclamation Authority (VVWRA) operates a regional treatment plant that serves the cities of Victorville and Hesperia, the Town of Apple Valley, and the unincorporated communities of Spring Valley Lake and Oro Grande. Few people know that the VVWRA Regional Treatment Plant is the single most expensive piece of infrastructure in the Victor Valley,

currently valued at over $100 million.

The Victor Valley has been an attractive area for home buyers and commercial developers in recent years. Over the past 10 years, VVWRA has completed three major expansion projects to increase the treatment capacity of the plant to keep up with the growth. Currently, an average 12.5 million gallons of wastewater arrives at the plant each day (mgd), with eight million going into the Mojave River and the remainder




efforts continue to move forward.

Recognizing that when the economy again returns that construction aggregate and cement resources will be important to fuel the recovery and recognizing that in California it takes an average of 10 years to permit a new mining site, California mineral producers continue to identify, and characterize new mineral development areas. Governor Schwarzenegger recently appealed to state and federal environmental lead agencies to streamline permitting procedures for renewable energy projects even though it is not likely that the capital investment for these new projects will be forthcoming any time soon. These projects will nevertheless require construction materials and considerable infrastructure investment. The Governor might think about calling for streamlining environmental permitting for new construction and mining sites which at least have a better chance of securing capital funds than some renewable energy projects.

The question in the California Mining Industry’s mind is will Congress’ actions be enough dollars and come in enough time to help? The stalled economy has added some additional life to the 32% of construction aggregate reserves (of our projected 50-year demand) but an improved economy and poorly timed natural disasters (floods and earthquakes) will eventually put stress on those remaining reserves.

Recognizing that losses to the mining industry due to plant closures, and the loss of skilled workers will delay recovery, the California mining

The global economic recession has brought development in California to a standstill. There certainly is some limited hope if President Obama’s stimulus plans upgrading transportation infrastructure actually is implemented by Congress. Help (hope?) could come to the California aggregate and cement manufacturing industries as the premier supplier of construction materials for targeted projects, some currently unfunded because of the State’s near bankruptcy. However, the $30 billion currently tagged for infrastructure in the stimulus package is not a lot for 50 states to divide up with any real benefits. (Congress and Obama might consider that the $27 billion proposed for jobless benefits would go a lot further if applied to real infrastructure improvements which at least have the potential to put people to work!). In the environment of a stalled economy, local lead agencies and the California radical environmental movement’s traditional and notorious unwillingness to permit new aggregate resources is, at least temporarily, moot. If Obama is serious about his intention to set time limits with which to implement stimulus funded plans for roads and bridges (hopefully bypassing all those funds being eaten up by government administrations instead of actual construction activity) there could be some additional hope in our new President’s stimulus attempts. And although California’s construction and aggregate industry has had to implement cutbacks and layoffs of highly skilled workers, the only good news seems to be that the mining industries permitting

settling into the groundwater through percolation ponds.

Heading into 2009, there are two driving forces behind the capital improvements VVWRA must build. The first is a series of increasingly stringent regulations that have been imposed by the Lahontan Region Water Quality Control Board. Since the passage of the federal Clean Water Act in 1971, wastewater treatment technology has been a champion of public health by making our lakes, waterways, and groundwater safer to use and enjoy. Regulations come with a price tag, requiring more sophisticated technology, thereby increasing the cost of treatment facilities. This year, VVWRA must add new processes to reduce chlorine byproducts and nitrogen from their final effluent. These enhancements to the regional treatment plant are expected to cost about $62 million.

The other critical need VVWRA must address is aging and undersized interceptors. Apple Valley and Hesperia each have one main interceptor carrying all the sewered wastewater from their communities. Even though the Regional Plant has been upgraded and expanded through the years, Apple Valley, Hesperia, and Spring Valley Lake are still dependent on the single pipelines built for them in the early 1980s. Studies have shown that building small, subregional plants in the local communities will be more cost effective than building new interceptors. The added benefit of these local plants will be the availability of recycled water. Californians are coming to terms with the hard truth that our state is in a

Economic Development - - Don’t Forget Wastwater

TreatmentContinued

15

Challenges From California:California mineral producers fight to be ready

when the economy recoversContinued

continued on page 16continued on page 16



community is planning for the future in implementing procedures to attempt to stay solvent and keep a skilled work force. In consideration is the real possibility of cutting wages and work hours (even against union imperatives), layoffs, if necessary, and certainly plant closures, at least temporarily. It remains to be seen if our Congress and our California legislature will actually assist in a recovery by enacting similar cost-cutting measures. The California legislature can start by recognizing that by assisting our construction and mining industry in streamlining the permit process for new construction and infrastructure projects and in limiting unproductive and onerous environmental requirements, there is potential to provide jobs for our citizens and not simply to provide funding for administration jobs.

Construction aggregate and cement manufacture are resources that are essential for the present and future prosperity of our communities. Some would hope that during the current economic slump our lead agencies will recognize that the recovery will benefit by supporting industries that actually provide private sector jobs. Yes, we can hope.

serious drought. The coming months will no doubt see communities hit with mandatory rationing and drastically tiered rates designed to impose conservation. VVWRA produces high quality recycled water that can be a valuable part of the solution to the water shortage in the Victor Valley.

The key to making recycled water economically feasible is logistics. The cost of using recycled water must include transportation to the location where it will be used. In 2004 VVWRA completed a 4.5 mile pipeline and pump station which delivers recycled water to the Southern California Logistics Airport (SCLA), located just above the VVWRA plant. Currently, the recycled water at SCLA is used for irrigation at the Westwinds Golf Course. In the near future, plans are to use VVWRA water for cooling at power plants near SCLA.

In order to provide recycled water to other parts of the Victor Valley, there must be an economical means to deliver it to the customers. Subregional treatment plants planned for Apple Valley and Hesperia will provide much needed water for irrigation of parks, golf courses, and public landscaping. Producing recycled water near the location where it can be

Challenges From CaliforniaCalifornia mineral

producers fight to be ready when the economy recovers

Continuedused will make it economically feasible and make a significant contribution toward saving precious groundwater. These local treatment facilities will each produce one million gallons per day of recycled water with the investment of approximately $25 million per plant.

Currently there is available land throughout the VVWRA service area that has wastewater infrastructure in place. The capital improvements VVWRA has planned will assure that the Victor Valley has sufficient wastewater treatment to support economic development for years to come. For more information, contact General Manager, Logan Olds at [email protected].

16

Economic Development - - Don’t Forget Wastewater Treatment

Continued

Keep abreast of the events in the most dynamic real estate

market in Southern California.





The Adelanto Towne Center, a 515,000 square foot retail project, will be breaking ground in early 2010. It will be located at the corner of Highway 395 and Mojave Drive on 33 acres of land. A Target store will be the

main anchor and is considered to be the store’s future prototype. Adelanto partnered with the Lewis Retail Group to bring the development to the city. The location of the project solidifies the theory that Highway 395 is set to become a major retail corridor in the region.

Adelanto Gateway Logistics Center is a 431 acre industrial project that will be located across from the Southern California Logistics Airport. It will serve as a distribution center for the Los Angeles basin, as well as Arizona, Nevada, and Utah. The project is a 400-acre development, with industrial sites up to 74 acres. All of the buildings will be for sale or lease, with AMB Property set to manage the leased properties. Adelanto Gateway looks to be one of the biggest logistics projects in the Victor Valley, with the promise

On the Verge of Tremendous Growth

The City of Adelanto continues to offer opportunity in all areas of development, with the potential of being a major industrial employer in the area. Its industrial and commercial market will begin to capitalize on the tremendous opportunities in the Victor Valley.

Since breaking ground in 2005, Stater Bros. in the Adelanto Marketplace has seen significant growth. The supermarket chain was the first business to open in the center and is still one of the top-performing stores of the Southern California based grocery chain. The shopping center encompasses approximately 90,367 square feet of retail space. Now with phase two completed, there is an additional 19,374 square feet of commercial space. It offers the community its first “eco-friendly” bank from Bank of America, the bank’s first in the country. Other retailers recently opened include a Carl’s Jr., Denny’s, and a KFC, and Long John Silver.

Adelanto City UpdateBy Mike Borja, Management Analyst

City of Adelanto

of bringing in various manufacturing jobs.

With more than 80 companies selecting Adelanto as their places of business, Adelanto has constructed over 8,200 homes and has provided 4,500 jobs in its five industrial parks. With the growth, comes the need for water and waste water treatment expansion. Most recent projects include the construction of a small waste water treatment plant and a 5 million gallon storage tank. The city’s waste water treatment facility is expanding from 1.5 million gallon per day capacity to a 4 million gallon per day capacity, with a projected completion date of December 2008. Known as the “City of Unlimited Possibilities,” Adelanto’s philosophy looks to be well underway.

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California.





“Apple Valley created a roadmap that is marketable to potential tenants and reduces uncertainties for corporate users. Apple Valley is well positioned to capture the future Southern California industrial market.” -Matt Englhard, First Industrial Realty Trust

Most sites are located less than 7 minutes from Interstate 15, allowing for the quick and efficient transport of goods and services to the I-10, I-40, US-395, SR-58, SR-18 freeways and highways, able to reach the vast majority of western and midwestern markets within 24 hours. Apple Valley Airport, a general aviation airport located within the boundaries of the NAVISP, offers convenience for private corporate travel. At build-out, the NAVISP will produce over 30,000 jobs for Apple Valley and the Victor Valley region.

“We chose to purchase 260 acres of industrial land within the North Apple Valley Industrial Specific Plan Area because we were able to assemble large contiguous tracts of fully entitled industrial property with immediate access to all utilities and infrastructure”, said Craig Halverson, Vice President of Acquisitions for Watson Land Company.

Apple Valley realizes time-to-market is critical. With shovel-ready industrial sites, a certified EIR, and a streamlined administrative entitlement process, a project located within the 5,100 acre North Apple Valley Industrial Specific Plan (NAVISP) can break ground 120 days after submittal of a complete application:

Apple Valley to invest in local economy

During the nation’s current economic downturn, the Town of Apple Valley is committed to doing its fair share to bolster the growth of our local economy. Together with federal, state, and public/private funding partnerships, the town is committed to infusing and leveraging dollars for development and infrastructure projects. During 2009, the town will proactively and collaboratively work with new and existing businesses to create more jobs, help businesses remain solvent, and invest necessarily and prudently in the local market.

Apple Valley’s fiscally sound budget and conservative financial management practices place the community in a position to prepare for future growth opportunities during current economic conditions. Infrastructure planning and funding are at the top of the town’s list of priorities. In 2009, it is anticipated that several major projects will open for business or commence construction: Wal-Mart Supercenter, Office Max, Ross Dress for Less, Cinemark Theatre, 24 Hour Fitness, a new Animal Shelter, a new Public Works Facility, a new Town Hall Expansion/Development Services Building, as well as the Apple Valley Road/Highway 18 Intersection

Realignment Project. These private and public projects will infuse millions of dollars into the local economy, in construction, sales tax, and property tax revenue dollars, and will help create hundreds of local jobs.

Apple Valley is also committed to industrial development and is ranked as one of the least costly cities for doing business in the High Desert/Inland Empire region of Southern California, according to a recent Kosmont-Rose Institute Cost of Doing Business Survey. The North Apple Valley Industrial Specific Plan (NAVISP), a 5,100 acre area that has been designated for industrial development. Scarce industrial land and rising land and development costs in the Los Angeles Basin continue to enhance Apple Valley’s strategic benefits—including affordable and ample land, available low-cost workforce, prime market access with an excellent surface transportation network, and a NAVISP permitting process that is the fastest and most efficient in the state.

In anticipation of the market rebound, and the expected regional industrial growth, the town is working with the primary local water purveyor and the Apple Valley Fire Protection District to determine the location and scope of backbone water system improvements, as well as the development and implementation of the related financing plan. The town is also paving several miles of streets to increase circulation and provide Fire District-required secondary paved access routes.

Town of Apple Valley City UpdateBy Orlando R. Acevedo

Economic Development Specialist

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• A certified Environmental Impact Report (EIR) exempts projects from further environmental review under the California Environmental Quality Act (CEQA). Any technical studies required prior to issuance of a grading permit are identified as part of the EIR mitigation measures.

• McCallum Sweeney Consulting (MSC) and Southern California Edison (SCE) recently partnered to establish the SCE Site Certification Program. An 80-acre site held by Watson Land Company and located within in the NAVISP was certified as “shovel-ready” following a comprehensive due-diligence analysis completed by MSC.

“The SCE Site Certification Program lets prospective investors and end-users know that the community has met various readiness criteria and is marketing property that carries far less development and schedule risk than non-certified sites. The Town of Apple Valley was the first site designation in California to receive the Certified Site accreditation from McCallum Sweeney”, said Michael Nuby of Southern California Edison’s Business and Economic Development branch

• In 2009 Apple Valley will publish a Habitat Conservation Plan (HCP) to address Endangered Species Act compliance and allow the application

of identified mitigation measures to local land use decisions. The HCP will provide project proponents entitlement transparency and certainty once local approvals are obtained, and will eliminate the need for individual project approvals by State Fish and Game and the Federal Fish and Wildlife agencies.

These attributes make Apple Valley one of the premier areas for business relocation and expansion in California.

Get a Slice of the Apple. www.applevalley.org

Town of Apple ValleyCity Update

Continued

19

Barstow City UpdateBy Ron Rector

Economic Development and Redevelopment

As the national economy confronts a recession, Barstow is well positioned to ride out the storm due to its balanced economy supported by the military, railroad, tourism, manufacturing, and logistics. With a balanced budget for its 2008/2009 fiscal year, the City of Barstow continues to experience moderate economic growth in new construction and its sales tax revenues remain strong.

While the City of Barstow is holding the line on operating expenses, the city understands that it must continue to invest in capital projects for improved infrastructure. One of the most important projects for the coming year will be about $4.2 million in upgrades to the wastewater treatment plant. This

project is critical to ensuring the city meets Lahontan Regional Water Control Board’s effluent discharge requirements by July 2009.

The city has an aggressive street improvement plan for the 2008-09 fiscal year, including a total of 17 projects estimated at $8.7 million. Projects include improvements to Lenwood Road, Buena Vista Street, West Main Street, and Citrine Road, Avenue H, East Mountain View Street, Armory Road, and the installation of a traffic signal on Rimrock Road and Muriel Way.

Of course, the city remains committed to bringing living-wage jobs to the community. The most exciting project for the City of Barstow with regard to

job creation is the 1,200-acre Barstow Industrial Park. IDS Real Estate, the developer for the soon-to-be rail-served Barstow Industrial Park, will offer large parcels of land within 3 miles of Interstate 15.

IDS is working to complete the Environmental Impact Report and to obtain all entitlements by mid 2009. IDS estimates that it will construct 16.5 million square feet of new industrial buildings over a seven to nine year period. It is anticipated that each 1 million square feet of new space will create between 500 and 750 new jobs, depending on the particular industry. When fully developed, the Barstow Industrial Park could create between 8,250 and 12,400 new living-wage jobs.




The Co-Sat will be a Smithsonian Affiliate Museum. The museum will include science classrooms, laboratories, observatory, planetarium, and a NASA teacher resource center. This project will allow the City of Barstow to help define 21st Century space and technology education.

The City of Barstow is prepared to confront these tough economic times head on and turn challenges into opportunities. The city’s focus in 2009 includes:

• attracting job-creating business investment;

• maintaining a balanced budget;• investing in infrastructure

improvements; • fighting crime;• cleaning up the look of the city; and• improving the parks & recreation

programs.

This is how Barstow plans to remain the “Crossroads of Opportunity” for residents, visitors, and businesses alike.

Road grade separation project. The necessary funding has been identified through Federal appropriations (Congressman McKeon), SANBAG, CTC, city and county Measure I funding, BNSF Railroad, as well as other funding sources.

Several development projects are expected to be complete in 2009, including a new 12-acre Love’s travel center located on Lenwood Road, a new Country Inn & Suites adjacent to the recently opened Chili’s restaurant, and a Comfort Inn near the outlets area.

Development projects extending past 2009 include:

• Super Wal-Mart, expected to be opened in 2010

• The new Barstow Community Hospital, which will be built on the 19-acre site across the street from the current facility. The 60-bed acute care facility will be opened by 2012.

• The Center of Science and Technology (COSAT) project includes the relocation of the Pioneer Antenna from Goldstone to a site located on the Barstow Community College grounds.

With its strategic access to major highways, airports, railways and deep-water ports, the City of Barstow, and especially the Barstow Industrial Park, offers ideal sites for manufacturing, warehousing and distribution activities. With these advantages, the Barstow Industrial Park was selected by the world’s largest retailer to be the home for one of its mechanized distribution centers. In July of 2008, Wal-Mart completed an environmental impact report on the 1 million sq.-ft. distribution center encompassing 147 acres in the Barstow Industrial Park. A frivolous lawsuit was filed on this project by a law firm under the guise of environmental protectionism. We anticipate this lawsuit will be dismissed in May 2009 at which time Wal-Mart can start construction on the distribution center.

With the Barstow Industrial Park as the hub of its future job creation, the proposed Lenwood grade separation is critically important to transportation movement and relieving congestion in the area of our industrial park. The City Council recently claimed an additional $100,000 from the Local Transportation Fund and set it aside for the Lenwood

Barstow City UpdateContinued

20


California.



www.OpportunityCA.us

(909) 387-4700

Site SeleCtiOn ASSiStAnCe



21

Hesperia City UpdateBy Lisa K. LaMere

Economic Development Analyst


Friendly Dining, Abundant

Shopping & Family Entertainment in

Hesperia

Increasingly, retail, restaurant, and entertainment businesses are staking their claims in the flourishing City of Hesperia in San Bernardino’s Inland Empire North. One of Hesperia’s top priorities is to bring attractive lifestyle options to its ever-growing base of residents with household incomes that average $63,000.

Population and employment growth have been steady in Hesperia, which is strategically located at the meeting of major U.S. transcontinental and north-south highways—main arteries that carry the flow of international cargo to and from the combined port of Los Angeles and Long Beach.

New businesses are Hesperia’s key to further job creation. More and more are opening their doors in Hesperia, encouraged by the minimal red tape and the pro-business professional staff of the city’s aggressive Economic Development Department and well-funded Redevelopment Agency, which is implementing a major development of Hesperia’s downtown.

“We take pride in the fact that, despite the economic downturn, more than 331,000 square feet of retail and restaurants, representing some of the top national companies, have opened for business this year in Hesperia,” said EDD Deputy Economic Development

Director Steven J. Lantsberger, CED. “Hesperia offers generous business incentives, including our “Franchise Founders” and “Restaurant Rewards” programs, to ensure that new businesses find the support they need to establish themselves successfully in the city,” he added.

Recent pioneers in Hesperia’s thriving business areas include:

• A 135-room Courtyard by Marriott™ business and family hotel with all the options, from free Wi-Fi to a 24/7 Market, slated for opening by January 2009.

• An 180,000-square-foot Target Super Center located in the High Desert Gateway under development by Lewis Retail. Target is the first opening among many commercial and retail outlets at the nearly 400,000-square-foot shopping center.

• The Wood Grill Buffet, a 10,400-square-foot casual dining restaurant with a contemporary interior and large patio, is the first franchise of Virginia-based Western Sizzlin’ Restaurants to open in California.

• A 32,000-square-foot Orchard Supply Hardware (OSH), the leading chain of home and garden retail stores, offers a selection of merchandise tailored to Hesperia’s climate and lifestyle.

• A Pizza Factory franchise brings its popular “We Toss ‘Em, They’re Awesome!” pizzas and calzones to Hesperia’s Main Street.

• The first Fresh & Easy Neighborhood Market in the High Desert anchors the Topaz Marketplace with a mix of

authentic and national brand products at low prices, including quality meat and fresh produce.

And coming soon:

• A Kid’s Planet with a sports bar, party rooms, restaurant, and arcade for family fun brings a $3.3 million investment and 100 new jobs to Hesperia, along with its attached El Classico Mexican Restaurant.

• Ice Castle International, the globally famed Olympic Training Center, is siting a new 33,223-square-foot facility in Hesperia. Its world-class, 100’ x 200’ family ice skating rink, training center and full-service ice sports entertainment facility will be operational before the 2010 Winter Olympics.

The Inland Empire North has become Southern California’s principal center for new residential growth. Every year, attracted by the pleasant climate, thousands more move to Southern California, fueling increased jobs and payroll in the regional market. “San Bernardino County’s High Desert or Victor Valley economic area is the most recent part of the county to be affected by the powerful forces associated with Southern California’s 60-year process of outward expansion,” John E. Husing, PhD, of Economics & Politics, Inc. wrote recently in his in-depth report, “High Desert Retail Economy.”

Business Retention and Expansion

The City of Hesperia and the Hesperia Community Redevelopment Agency (HCRA) have partnered with the Inland Empire Small Business Development



Center (IE SBDC), to offer Hesperia businesses with a new, no-cost business evaluation and consulting program located at Hesperia City Hall.

The new program offers a confidential financial analysis by a qualified business consultant, who will identify areas of strengths and weaknesses in the business and isolate problem areas that need attention and corrective action by management.

These tools consist of a no-cost review and evaluation of business management operations that include, but are not limited to the following deliverables:

• Cash flow and aging of Accounts Payable/Receivable

• Market – targeting customer groups, advertising and promotional activities, product/service mix

• Pricing strategies and discount policies

• Accounts Receivable collections and credit policies

• Evaluation of location and occupancy costs

• Review of debt and working capital requirements

Additionally, Economic Development staff will visit local businesses beginning December 1, 2008, at times, accompanied by the part-time consultant to discuss best practices. “The importance of our small businesses cannot be taken for granted,” said Mike Leonard, City of Hesperia Mayor. “By offering tools not normally available such as marketing and pricing strategies, we can help Hesperia’s business owners succeed, retain jobs, and strengthen our

city’s economy.”

Growing challenges to businesses resulting from the ongoing economic downturn have affected enterprises of all sizes in virtually every industry. Small businesses are critical to the economy of this country, providing more than half of existing private sector jobs, and two-thirds of new jobs, according to the Small Business Administration. It is exactly those types of businesses that Hesperia’s new Business Outreach Program was designed to reach.

“Having a healthy business community is essential to maintaining a strong and prosperous city,” said Mike Podegracz, City Manager. “By partnering with the IESBDC, we are able to provide our businesses with the tools needed to assist them during this tough economic climate.”

The HCRA has provided significant funds to the Inland Empire Economic Partnership’s Small Business Development Center in order to relocate to City Hall, a location more convenient to the city’s core business areas.

“The Hesperia Community Redevelopment Agency has, over the years, developed collaborative methods to provide assistance and incentives to our small business community. It is incumbent upon us to see that the city’s businesses remain vital,” said Steven Lantsberger, Deputy Economic Development Director. “This type of outreach program is another level, taking a proactive and innovative approach for business retention.”

Office hours for appointments and

confidential consultations will be held at Hesperia City Hall on Tuesdays and Thursdays from 9 a.m. to 3 p.m., although appointments will be accommodated for other days and times. Staff will be visiting businesses throughout the city five days a week. For more information about scheduling an appointment, please contact City of Hesperia Economic Development staff at 760/947-1635, or the Inland Empire SBDC at 760/951-1592.

Commercial, industrial, retail, and office opportunities abound throughout Hesperia, and this pro-development, customer service-oriented city is serious about bringing your business to Hesperia! For more information, contact Steven J. Lantsberger, Economic Development Director, at 760/947-1906 or e-mail [email protected].

Hesperia City UpdateContinued

22



Residential Development

National Community Renaissance (National CORE) has made substantial investments in the City of Victorville for the past eight years, creating a strong partnership with the Victorville Redevelopment Agency. Some of the projects National CORE has done in the city include Impressions at Valley Center and Northgate Apartments. National CORE is currently developing The Signature – a 128-unit multi-family complex to serve the city’s workforce housing needs. Scheduled to break ground in Spring 2009, The Signature will provide desirable amenities, making it a luxury apartment complex, including solid-surface countertops in kitchens and baths, upgraded appliances, French doors leading onto large balconies, and European architecture. In addition, it will be fronted by retail development, serving The Signature residents and the surrounding community.

In August 2008, the City of Victorville was named the second fastest growing city in the nation with a 9.5% increase in population between July 2006 and July 2007 (U.S. Census Bureau report on top 25 fastest growing cities). This population explosion has spurred residential, retail, and industrial development throughout the city. Opportunities for growth continue, assisted by the city’s strategic location along Interstate 15 with international connection via Southern California Logistics Airport (SCLA).

Industrial Development

SCLA has continued development over the last year with an additional two million square feet of industrial space added since September 2007. The latest project is the City’s announcement with Dr Pepper Snapple to build a manufacturing and distribution facility at SCLA. At 57 acres, the facility will be the company’s largest hub west of Texas and serve nearly 20% of the U.S. population. The Dr Pepper Snapple Group produces 50 brands of beverages including Dr. Pepper, Snapple, A&W Root Beer, Yoo-hoo, Schweppes, Squirt, RC Cola, Mott’s juices, 7UP and Hawaiian Punch. The $120 million plant in Victorville is anticipated to bring approximately 200 jobs. Construction is expected to begin on the new bottling facility in spring 2009. The Dr. Pepper/Snapple facility is set to open early 2010 with the ability to produce up to forty million cases of product.

Victorville Equals OpportunityBy Collette Hanna

Business Development Manager, City of Victorville

Retail Development

Retail development continues in Victorville’s civic center area with the development of Desert Sky Plaza. The center is located just off of the Interstate-15/Roy Rogers Drive interchange and includes Home Depot, Papa Johns Pizza, Farmer Boys, Starbucks, L & L Hawaiian Barbeque, and America’s Tires as tenants. Construction was completed in November on the 93,696 square-foot WinCo Foods located in the northern portion of Desert Plazas. WinCo Foods will anchor an additional 120,000 square feet of retail space lining Roy Rogers Drive. This is the first WinCo Foods grocery chain in the City of Victorville. The developer – World Premier Investments – has also announced plans for a third phase of expansion at Desert Plazas. This expansion will be located on the southeast corner of Civic and Roy Rogers Drive. The new phase will encompass approximately 380,000 square feet of retail, hotel, and restaurant space. Panda Express and In-N-Out Burger will be locating at the future development.

23

l Factual economic information about the Inland Empire North/e corridor, including the cities of Adelanto, Barstow, Hesperia and Victorville, the Town of Apple Valley, and northern San Bernardino Countyl Published since May 1993l Sales and permit trendsl Economic analysisl Updated overview of quarterly absorbency rates of commercial, industrial, and office spacel Affordable annual subscription of only $59.95 for four editionsl Each edition 24 pagesl Minimum of three (3) issues per yearl The most condensed, up-to-date, factual business information from highly respected professionals, effected property

owners, investors, developers and lenders, local businesses, anyone with a vested financial interest in the High Desertl Quarterly comments by Dr. Alfred Gobar, renowned real estate economist, Alfred Gobar Associates, (Anaheim, California)l Packed with valuable information from expert contributorsl Published by Joseph W. Brady, CCIMl Nominated for small business of the year, Inland Empire North/e corridor region by the Inland Empire Small Business

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