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California Dreaming

The most populous state in the nation is also one of the most economically diverse. California, here we come!

By Angela M. Ramirez

 

California Dreaming

The top ten largest economies in the 2006 International Monetary Fund ranking include only one state whose economy happens to be bigger than all but seven countries in the world—the state of California. California is responsible for 17% of the nation’s gross domestic product (GDP)—roughly $1.5 trillion.

The California economy is well known—Hollywood is the capital of entertainment; Silicon Valley is the capital of the computer and tech markets; Napa and Sonoma Valleys produce wine; and the Central Valley is home to the state’s agricultural production. This diversity, geographically and economically, makes California one of the top places in the world to do business.

The City of Barstow: the Crossroads of Opportunity

Location is everything when it comes to goods movement, and Barstow is one of the premier transportation centers in the U.S. With Interstates and other highways all converging in the city, the area has become a natural location for the trucking industry. Barstow is also home to the largest rail yard west of Kansas City. The ports of Long Beach and Los Angeles are about 150 miles from the city, and freight arriving at the ports is quickly off-loaded and sent via rail along the Alameda Corridor to Barstow for efficient distribution to the western United States.

Since the 2005 announcement that Wal-Mart was planning to build a distribution center in Barstow Industrial Park, the 2006 decision to include the park in the Barstow Enterprise Zone, and the announcement of a rail spur coming in early 2008, the city has seen increasing interest from developers and corporations.

Formerly an agricultural site, the 1,200-acre Barstow Industrial Park is flat, has no known environmental issues, and all utilities are currently extended to the site. With its strategic access to major highways, airports, railways, and deep-water ports, the Barstow Industrial Park is an ideal site for manufacturing, warehousing, and distribution activities.

Because the park is located within the Barstow Enterprise Zone, park tenants have access to special incentives designed to encourage business investment and promote the creation of new jobs through tax incentives. Other state incentives for businesses locating in the Barstow Industrial Park include the Barstow Recycling Market Development Zone, Foreign-Trade Sub-Zone #243, and employment training assistance.

The Barstow area also offers an abundant labor force of approximately 120,000 workers. Nearby community colleges and universities provide specialized training opportunities for workers. Currently, 60,000 Barstow area residents commute daily to jobs outside the area. This qualified workforce is available at wages 10% to 20% below the prevailing wages in most of Southern California.

Valmont Newmark International cited Barstow’s numerous strategic advantages and its business-friendly attitude as the reason it selected the Barstow Industrial Park as the location to build its 84,000-square-foot manufacturing facility for spun pre-stressed concrete poles.

Barstow currently has an abundance of low-cost, available land. To find out how you can join the building excitement at the “Crossroads of Opportunity,” contact Ron Rector, economic development director for the city of Barstow at: 760-255-5106 or rrector@barstowca.org.

YUBA: THE FASTEST GROWING COUNTY IN CALIFORNIA

Yuba County offers a low-cost alternative to other areas in California with excellent access to major metropolitan areas in the Bay Area and Sacramento region. Yuba County offers significant tax incentives in California’s largest Enterprise Zone, and the U.S. Census Bureau ranked it as the fastest growing county in California in July 2005 and 2006.

Riverside, CA. A new development in the city of Riverside, CA. The city’s educated and professional workforce is a driving force of economic development in the area.

Significant residential and commercial development is occurring within Yuba County, CA—the county issued 1,038 single-family residential permits in 2006, 1,707 in 2005, and 1,600 in 2004. Despite a statewide decline in new housing starts, it is projected that an average of 1,000 or more homes will be built annually over the next decade, representing a 50% increase of the current population. Most growth is occurring within community-specific planning areas such as Plumas Lake, East Linda, and North Arboga.

As a result of the record housing starts and an influx of new neighbors, Yuba County is recognized as the fastest growing county in California, and the 77th fastest growing county nationwide.

Forbes ranked the Yuba City Metropolitan Statistical Area, which includes Yuba county, as a “Best Place for Business,” in 2000 and as 11th out of 168 areas nationwide for job growth in 2003.

Yuba County’s strongest points include available and relatively inexpensive land in California, a low cost of housing ($285,000 median home price in 2005), and a low cost of doing business. The county does not have a business license fee for most businesses, and boasts no utility user tax, no regional transportation fee or tax, no local sales tax above the state sales tax of 7.25%, no parking tax, and no gross receipts tax. Although Yuba County is within the high-growth Sacramento Region, relativelhigher unemployment levels in Yuba County ensure an available labor pool for potential employers.

To support future growth, Yuba County economic development officials have successfully applied for over $5.5 million in grant funding for the extension of water, sewer, power, and related infrastructure improvements for the development of county industrial parks. These improvements have enticed numerous new companies to locate within the parks, adding over 500 jobs.

The Yuba-Sutter Enterprise Zone is currently the largest state-incentivized zone in California and provides significant hiring and tax credits to new, expanding, and existing businesses. The zone will be in place through October 2021.

To spur entrepreneurial growth, a micro-business training and loan program was created in partnership with the local Small Business Development Center and Yuba-Sutter Economic Development Corporation. Over 100 entrepreneurs have successfully graduated from the program to pursue start-up businesses or expand existing small businesses within the region.

For more information regarding opportunities to invest in Yuba County, visit www.yubacounty.org or call 530-741-6280.

THE RIVERSIDE EXPERIENCE

Riverside, CA has entered a new era of success for business. Achievements in several key areas—workforce, retail, commercial development, education, and technology—solidify the city’s position as a leading California economy.

A significant factor driving the strong economic growth in Riverside is the city’s high-quality workforce. Educated young couples and professionals are leaving coastal counties for Riverside’s high quality of life and varied housing options—from charming neighborhoods to urban lofts to expansive estates.

While population, disposable income, and education levels continue to climb, real estate and payroll costs to employers remain up to one-third less than those in nearby coastal communities. In response, 2.2 million square feet of new office space is currently planned or under construction, including five new Class A projects slated to begin construction in 2007.

An increasingly technical, educated, and skilled workforce, combined with support from the city’s four institutions of higher learning makes Riverside a natural focal point for technology companies. The city’s 56-acre University Research Park is designed to accommodate the unique physical amenities required by technology companies. With guidance from core local technology firms through the nonprofit Smart Riverside organization, the city has introduced a number of programs to attract new and start-up tech companies and entrepreneurs. Initiatives such as the Tenant Improvement program are designed to attract new R&D businesses by helping to offset expensive lab-related costs.

The Riverside City Council has embraced an ambitious $1.3 billion capital improvement program known locally as the Riverside Renaissance Initiative. Conceived in response to the city’s explosive growth, the initiative provides funding for a complete rehabilitation of Riverside’s historic Fox Theater, transforming it into a performing arts center. The city’s new Arts & Cultural Affairs Division has worked with community partners to establish several popular arts and entertainment activities, including a weekly farmers market and the annual Festival of Lights, which offers entertainment centered around the nation’s second largest holiday lighting display.

THINK OUTSIDE THE BASIN … THINK HESPERIA

Located in the Inland Empire North of San Bernardino County, the city of Hesperia’s nearly 92,000 residents make it the second largest community in the High Desert region of Southern California.

Hesperia’s strategic position near the summit of the I-15’s Cajon Pass, makes it the most commuter-accessible community in the High Desert, and puts it close to markets throughout the Riverside, San Bernardino, Los Angeles and San Diego areas.

The city’s central location provides a direct connection to other major interstates and highways serving the greater Los Angeles, San Diego, Northern California, and Nevada markets. I-15 also connects to I-40, which serves the southwestern states. Burlington Northern Santa Fe Railway, one of Southern California’s dominant rail carriers, serves Hesperia. Both Ontario International Airport and Southern California International Airport offer passenger and shipping options.

While parcels of land suitable for big box development are becoming scarce in the Inland Empire valleys, large parcels are available in Hesperia at considerably lower costs than found in Southern California.

Graco Products has expanded its distribution center in Hesperia, 84 Lumber is locating on rail-served property, and Centex Homes is building an indoor truss manufacturing facility and bringing a rail spur to approximately 20 acres.

Hesperia is also home to the region’s largest labor force, with the average unemployment rate at under 6%. This cost-effective labor pool enables a business to reduce collateral costs, increase profitability, and expand its operations in the future.

Contact Hesperia’s Economic Development Department at 760-947-1906 or visit the city of Hesperia at www.cityofhesperia.us.

IN RANCHO CUCAMONGA, BUSINESS INNOVATION MIXES WITH TRADITION

If you haven’t looked at Rancho Cucamonga lately, significant changes in the city over the past few years may give you reason to seriously contemplate the benefits of establishing your business in this prime zip code.

A development in Rancho Cucamonga, CA. A development in Rancho Cucamonga, CA. The city has experienced major growth in the past 10 years.

Rancho Cucamonga is recognized as a major hub for distribution, logistical operations, and manufacturing. This is not surprising, considering that the city’s ideal location provides quick access to several major freeways and interstate highways, an international airport, and one of the largest shipping ports on the West Coast. Rancho Cucamonga has continued to welcome businesses in these industries, and watches as companies expand and/or consolidate smaller operations into one location in order to reap the benefits that come with the efficiencies related to the economy of size formula.

A solid strategy, executed by the city’s redevelopment agency, has resulted in major shifts in Rancho Cucamonga over the past 10 years. The effects are noticeable today. The primary shift has been in the general demographic profile of the city; when compared to other Southern California communities, Rancho Cucamonga housing is more affordable, resulting in experienced professional management and executive types choosing to live where they can get more house for their dollar. This, coupled with the growing trend of people seeking employment closer to where they live in order to shorten commute times, makes Rancho Cucamonga the perfect place for companies seeking this type of employee.

Not only is there a robust labor pool in Rancho Cucamonga, in many cases, the cost of labor and the cost of land and building space is less expensive compared to other communities in Southern California. In addition, the city has seen significant growth in many business-related amenities that support conducting business in the city. To date, there are six business-class hotels in operation, with two more scheduled to open in late 2007, and two additional slated to begin construction during the same period. Eating establishments can be found in all corners of the city, ranging from well-known fast food outlets to one-of-a-kind restaurants.

Topping the list of recent leasing activity is Empire Corporate Plaza, the largest Class A spec office project to date in the Inland Empire. This complex fills a void in the market by providing over 40,000 square feet of space per floor. In July 2007, IDS Real Estate Group announced that Kaiser Foundation Health Plan leased 41,755 square feet of one building for its first regional office.

The Rockefeller Group Development Corporation is providing an interesting option to those businesses that want to establish a Rancho Cucamonga address. The group will develop 20 individual buildings over the next year in Rancho Cucamonga. Unlike much of the office product in Rancho Cucamonga that has been built in recent years, the Rockefeller projects will be for direct sale, not for lease. The recent Rockefeller development projects include:

• The Pittsburgh Avenue Professional Center will feature four freestanding, one-story office buildings and four two-story buildings. Sizes range from 4,450 to 18,800 square feet.

• The Haven Avenue Professional Center will consist of eight freestanding buildings with sizes ranging from 7,500 to 14,000 square feet.

• The Jersey Boulevard Professional Center is the largest of the three projects, providing individual buildings that will offer up to two stories and range in size from 22,543 to 29,255 square feet.

Retail growth continues its upward trend in Rancho Cucamonga, with big and small retail operations choosing to call the city home. Recently Bass Pro Shops joined the successful Victoria Gardens Regional Town Center by opening its 180,000-square-foot retail space. With an estimated 20,000 people streaming through the store during its grand opening weekend, it was evident that Rancho Cucamonga was the right choice for Bass Pro’s first West Coast store.

 

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