Modesto touting its new “opportunity zones”

Modesto touting its new “opportunity zones”

Central Valley Business Times

April 16, 2018

  • Central Valley city now has 17 areas with designation
  • Nationally, there is $6.1 trillion in capital gains that could be invested

Companies looking to establish a new operation should look to its 17 federally-designated opportunity zones, the city of Modesto says in a new promotion. It says it has four ways to take advantage of the new zones. On April 9, the U.S. Department of Treasury certified 17 census tracts in the Modesto area as opportunity zones. Any investment purpose that stimulates economic activity in these census tracts may participate in the program, the city says. It says there are four primary groups that may be particularly interested in this recent announcement:

  • Investors that want to defer gain from a recent sale and obtain tax-free appreciation from its investment in an Opportunity Fund (O-Fund), which can reduce capital gains tax by up to 15 percent;
  • Sponsors that want to form and operate an Opportunity Fund;
  • Property owners with assets located in Opportunity Zones, and,
  • Developers and business owners that desire to start-up or expand in an Opportunity Zones

Nationally, there is $6.1 trillion in capital gains that could be invested in Opportunity Zones, which could make this effort the largest community development program in the nation’s history, Modesto says. The Treasury Department is now finalizing Opportunity Fund guidelines and rules. Interested parties can use this time to become informed about Opportunity Zones and network to develop Opportunity Zones concepts and opportunities for their communities, the city says.

The Council of Development Finance Agencies offers a comprehensive set of resources. Click here: www.cdfa.net/cdfa/cdfaweb.nsf/resourcecenters/iioa1.html

Enterprise Community Partners Inc. provides a policy overview and anticipates implementation timing. Click here: www.enterprisecommunity.org/download?fid=8856&nid=6212

http://files.constantcontact.com/2cb20f61601/4c0e8495-01e9-4972-9694-b050b89aec64.pdf

California Resources Corp. acquires full ownership of Elk Hills oil field

  • BY JOSEPH LUIZ
418022508-data.jpg
In this file photo taken at Elk Hills , Matt Wells, Mitch Tate and Steve Northern, left to right, make a connector change.

The California Resources Corp. has acquired 100 percent ownership of the Elk Hills oil and natural gas field in Kern County, according to the company.

The oil company said it purchased Chevron’s interests for $460 million and issued 2.85 million shares of CRC stock to Chevron. The deal went through April 1. Chevron had owned about 20 percent of the field’s assets. CRC had owned the rest of the field and has been its operator.

“We have operated this field for over 20 years and have developed a deep knowledge of the geology and strong operational expertise to deliver robust value from this asset,” said CRC President/Chief Executive Officer Todd Stevens. “We intend to apply this know-how to our newly acquired position, as well as transfer learnings and efficiencies to enhance CRC’s assets across California.”

 In 2017, the interests that Chevron held produced approximately 13,300 barrels of oil and natural gas liquids per day, according to the company.

CRC estimates that based on current prices, the field could provide the company an operating cash flow of around $100 million annually. Elk Hills is now estimated to make up about 43 percent of the company’s total production.

CRC’s acquisition of Chevron’s interests comes after the company went into a joint venture on the Elk Hills field in early 2017 with a portfolio company that is part of the private equity group Ares Management, L.P.

Ares paid $750 million and purchased 2.34 million shares in CRC stock to obtain some of CRC’s Elk Hills assets. The particular interests under the agreement are the Elk Hills power plant, a natural gas-fired power plant and a cryogenic gas-processing plant.

Some of the proceeds from the joint venture were used in purchasing Chevron’s interest in the field, Stevens said.

 “Acquiring sole ownership of such a prolific field is an ideal use of proceeds from our recent midstream joint venture transaction, adding both immediate production and cash flow, while providing for quick synergies and tremendous long-term development opportunities,” he said.

Elk Hills, located west of Bakersfield, was initially discovered in 1911 and has produced more than 2 billion barrels of oil and gas since then, according to CRC.

New entertainment venue could come to downtown Bakersfield

  • BY JOSEPH LUIZ jluiz@bakersfield.com

Bakersfield could soon have more entertainment options in the downtown area.

The City of Bakersfield has a 223,000-square-foot piece of land at California Avenue and P Street that it intends to sell to Discovery Management Group LLC, partly for the construction of a venue called Discovery Bakersfield that would include a bowling center, restaurants, a music venue and more.

The city said Discovery Bakersfield would be a 38,000-square-foot, three-story building that would include 20 bowling lanes and a 950-seat music hall.

“This is a great opportunity,” said Community Services Director Jacqui Kitchen. “The City Council has had a vision of an entertainment area here for more than 10 years. I think the residents of Bakersfield deserve this.”

Kitchen said the goal is for the Discovery Management Group to eventually develop the rest of the property with restaurants and other entertainment uses, as well as a possible high-end hotel. Kitchen said she would also like to see some kind of microbrewery locate there.

Kitchen said the creek that runs along the eastern edge of the property would also serve as a great amenity. She said she would like to see a restaurant take advantage of the views.

“Mill Creek is the only opportunity in Bakersfield where you can have a restaurant looking out over the water,” she said. “You can almost imagine you’re sitting somewhere in Germany or Italy enjoying a meal.”

The company has already begun discussions with restaurants and other companies about developing on the property, Kitchen said.

During its April 11 meeting, the City Council authorized Mayor Karen Goh to sign a draft letter of intent from the city detailing terms for purchase of the property, the price of which has been set at $2.2 million. The city will now move forward with the purchasing process.

If the purchase goes through, the venue would be Discovery Management Group’s third location. The company already has a Discovery Ventura and is opening a Discovery San Luis Obispo this summer. Discovery Bakersfield would be its largest venue yet in terms of square footage.

Jeremy Pemberton, founder of Discovery Management Group, said at the council meeting that he believes the music hall in particular will draw a lot of people to the venue. Pemberton said he believes another music veue is greatly needed in Bakersfield.

“Currently, the City of Bakersfield and the county is void of a national touring spot for a music club that can host between 400 and 800 folks,” he said. “With the facility design that we have and the experience that we have, we know that we can create a facility that would eventually become a commodity for the touring industry.”

Pemberton and his brother Joshua initially approached the city in fall 2015 to discuss their desire to open a location in Bakersfield. However, Kitchen said plans were put on hold after the company suffered some setbacks in the process of developing its San Luis Obispo location.

Once the issues were settled and the project was moving ahead, the brothers returned to the city late last year to renew discussions.

“They believe Bakersfield has a young, growing population and a real desire for more entertainment choices here,” Kitchen said. “They think a location in Bakersfield would be a great addition. It’s not meant to replace any of our businesses, but enhance those and give the community more choices.”

If approved, construction of Discovery Bakersfield would start by the end of year and wrap up by June 2019, according to the Discovery Bakersfield Development Project Plan. A soft opening has been tentatively scheduled for June 5, 2019.

Discovery Bakersfield would be part of the city’s South Mill Creek Entertainment District, which already includes Maya Cinemas, the McMurtrey Aquatic Center and the Bakersfield Ice Center.

If approved, Discovery Bakersfield would be the second entertainment venue to open in the downtown area within just a few years. The BLVD, located on Buck Owens Boulevard, opens on April 19.

The 45,000-square-foot business will have a restaurant, three full-service bars, bowling lanes, laser tag, a ropes course, an arcade and more. It is owned by The BLVD LLC and Trifecta Management Group.

The two venues will share some services and features but Discovery Bakersfield would be more focused on music, Kitchen said.

Pemberton said he’s excited about the prospect of developing a project in downtown Bakersfield and working with the city.

“We’re excited about the opportunity here in Bakersfield and we look forward to providing a much-needed first-class concert venue and entertainment facility for the entire community,” he said.

GAP SECURES $4.25M STATE TAX CREDIT FOR FRESNO EXPANSION

Published On April 12, 2018 – 2:12 PM
Written By Gabriel Dillard

The Gap, Inc. has been awarded a $4.25 million tax credit to support its expansion plans at its Fresno campus, where an e-commerce fulfillment center has been planned.

A committee of the Governor’s Office of Business and Economic Development, or GO-Biz, today approved a total of $76 million in tax credits for 63 companies as part of the California Competes program to help businesses create new jobs in the Golden State.

San Francisco-based Gap was awarded a tax credit for the expansion of its San Francisco headquarters as well as a new e-commerce fulfillment center planned near Fresno Yosemite International Airport. The retailer plans to invest $100 million in the expansion, according to its tax credit agreement, which would create an additional 698 jobs. According to the GO-Biz agreement, at least 75 percent of the net increase in full-time employees will work at least 75 percent of the time in Fresno.

The Gap indicates it will add 162 new full-time positions in the 2018 tax year, 502 for 2019 ramping up to 698 by 2021.

Panorea Avdis, GO-Biz director and chair of the California Competes Tax Credit Committee, said in a statement: “In the last four years, hundreds of companies have made commitments to expand in the state and GO-Biz will continue to host informational workshops and work with our regional and local partners to ensure companies of all sizes know about and apply for these tax credits.”

The City of Fresno announced last month that The Gap would relocate its e-commerce operation to Fresno, bringing at least 515 new full-time employees. Full operation will ramp up over a three-year period.

The agreement is made possible through a 30-year economic incentive agreement that will provide performance-based incentives based on the creation of at least 500 new net jobs, and possibly hundreds more for part-time and seasonal needs.

The agreement will also ensure continued sustainability for the 351 employees currently working at the Fresno Gap distribution center, which opened in 1999.

https://thebusinessjournal.com/gap-secures-4-25m-state-tax-credit-fresno-expansion/

Construction milestone reached at Manteca Commerce Center

 

Central Valley Business Times

April 13, 2018

  • Dermody Properties puts in first wall panels for industrial building
  • “We are excited to be expanding our investments in the Central Valley”

The tilt-up and placement of the first wall panels for a 286,072- square-foot building that could be used as a distribution center has been completed by Dermody Properties in the Manteca Commerce Center, the Reno, Nevada-based company says. Dermody builds and manages logistics real estate.

The new building will feature a total of 50 dock doors, two grade-level doors, a 36-foot clear height and 156 car parking spaces. Construction is expected to be complete in the second quarter.

“We are excited to be expanding our investments in the Central Valley,” says Douglas Kiersey Jr., president of Dermody Properties. “The development of Manteca Commerce Center is consistent with our strategy of investing in key distribution markets with a high demand for industrial facilities and a well established transportation infrastructure.”

Manteca Commerce Center is located directly off of Highway 120, about 15 minutes south from the Port of Stockton, with access to Highway 99 and Interstate 5. The developer says the location provides “an ideal” West Cost distribution link to Fresno, Reno, Los Angeles and Las Vegas.

“Manteca Commerce Center is our second property in the Central Valley,” says George Condon, West region partner, Dermody Properties. “Companies are continuing to move from the Bay Area to the Central Valley to expand their businesses and lease Class-A warehouse space at a significant discount to the cost of Bay Area warehouses. Companies new to Northern California are also setting up shop in the Central Valley to serve the businesses and residents of the Bay Area.”

JLL is marketing the property. The project was designed by HP, Inc., and BCM Construction is the general contractor.

http://files.constantcontact.com/2cb20f61601/12d85a0b-161b-4ef2-85f1-4802f7ddbfea.pdf

HANFORD OFFICIAL: FARADAY FUTURE SETS MAY 21 TARGET TO INSTALL ASSEMBLY LINES

Faraday Future FF 91

Faraday Future hopes to start manufacturing the FF 91 in Hanford by late 2018. Image via Faraday Future

Published On April 11, 2018 – 12:45 PM
Written By John Lindt

Kings County officials this week traveled to the Southern California town of Gardena to meet with executive staff of Faraday Future as well as company founder Jia Yuetin to help make plans for the startup’s Hanford assembly plant.

Demolition work on the interior of the old Pirelli facility in the Hanford Industrial Park is underway as construction drawings are being completed for the remodel of the sprawling 1 million square-foot plant that will soon get underway.

Member of the Kings County Board of Supervisors Doug Verboon joined Kings EDC President John Lehn and Hanford City Manager Darrel Pyle and others from Kings County for an April 10 tour of the Gardena facility, where work is underway on the speedy electric car, the FF 91.

Verboon said he saw 12 cars at the plant and got to sit in one of them. ”It was very impressive — this operation is for real,” he said.

He added that he was told the company’s investment funding was secure, and they were looking to start assembly of the high-tech electric car in Hanford late this year.

Touring the plant, local officials saw employees busy at different stations making parts using 3D imagery. ”There is lots of technology on display.”

Verboon says now the focus of the company is for Kings County agencies to partner with Faraday to get the word out that jobs are on the way locally.

“Right now they have 700 employees in the LA area, but after they install assembly-line machinery in Hanford, set for May 21, they will need to hire some 54 employees in Hanford and up to 750 here over a period of time,” he said.

“They need help finding hotel rooms or places for employees to stay,” said Verboon, who is also looking to coordinate efforts with placement agencies and junior colleges.

“They already have a list of about 500 who are looking for work.”

Verboon added that the company “has a tight timeline” and expects to meet again with the same local team April 13. “We want to handle it the same as we did for the Surf Ranch project — a dedicated team who will answer all their questions” and ease the rollout of their business here.

CCVEDC Conducts Annual Mission to State Capitol

PRESS RELEASE

For Immediate Release

CONTACT:

Lee Ann Eager, Co-Chair CCVEDC, 559-476-2513

Mark Hendrickson, Co-Chair CCVEDC 209-385-7686

Jennifer Faughn, Executive Director, 661-366-0756

CCVEDC Conducts Annual Mission to State Capitol

 

Photo 1: Left to Right: Asm. Jim Patterson, Mike Ammann, Asm. Devon Mathis, John Lehn, Asm. Dr. Joaquin Arambula, Lee Ann Eager, Richard Chapman, Asm. Rudy Salas, Bobby Kahn, Asm. Vince Fong, Tyler Richardson.

Photo 2: CCVEDC External Affairs Chairman Lee Ann Eager with Governor Jerry Brown.

April 5, 2018 Representatives from EDC’s throughout the Valley met with more than 20 legislators and top government officials to bring the voice of Central Valley businesses to the Capital.

”This annual effort helps to keep the needs of the Valley forefront in the minds of legislators from throughout the state. Needed infrastructure, regulatory reform and assisting all of California’s communities were primary topic of discussion,” according to Lee Ann Eager, External Affairs Chairman for the California Central Valley Economic Development Corporation, comprised of the eight EDC’s from San Joaquin to Kern.

Infrastructure Development for Business was the primary theme of the visit. The priorities list included Upstream Water Storage in Central Valley, Regulatory Reform, Workforce Development and Assistance for Disadvantaged Communities.

“The legislators from the San Joaquin Valley have a deep understanding of the need for upstream water storage, however, it is unfortunate that Sacramento politics are preventing the construction of this critical infrastructure. Water should be the number one concern of all Californians and we cannot conserve our way out of the situation we are in, we need to have additional storage. We were encouraged that the Temperance Flat upstream storage project seems to be a strong contender for Proposition 1A funding to help retain valuable water for use during California’s cycles of recent drought,” noted Bobby Kahn, CCVEDC Board Member and Treasurer.

The Central Valley is a prime location for advanced manufacturing, distribution, energy development, water technology and other industry sectors which support California’s identity as an innovation leader. With available land, buildings and the workforce to support industry, the CCVEDC members work daily to promote the Valley and all of California for business expansion and location.

“As Representatives from the California Central Valley Economic Development Corporation, we were very pleased with the support received from local legislators. Discussions of common issues were extremely productive and we look forward to continuing to work together to ensure that the Central Valley is the best place to live, work and thrive,” stated Eager.

In addition to valley legislators, the group met with the Assembly Committee on Jobs, Economic Development and the Economy; the Governor’s Office of Business and Economic Development (GoBiz), and California Manufacturing & Technology Association officials.

CCVEDC is a not-for-profit Corporation supported by the 8-county region in the Central Valley, PG&E and Central Calif/Central Mother Lode Regional Consortium (CRC) Partnership, whose mission is to attract and retain jobs and investment in the Central San Joaquin Valley counties of San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings, Tulare and Kern.

2018 Legislative Priorities

INFRASTRUCTURE DEVELOPMENT for Business

Infrastructure is a foundational aspect of job creation. California’s most disadvantaged communities struggle to develop the public infrastructure needed to attract and grow jobs and private investment. Needs based funding and incentives are required for public infrastructure in disadvantaged communities. The Central Valley region will benefit from a ‘hand-up’, resulting in full participation in our state’s economic recovery.

a.      Upstream Water Storage

Background:  California will continue to struggle with drought conditions until additional upstream water storage is developed to support people and agriculture. The Water Bond of 2014 provided funding to develop upstream storage at Temperance Flat for agricultural and municipal water storage to serve the Central San Joaquin Valley and all of California.

Action needed:

  • Support administrative and legislative efforts to develop water storage at Temperance Flat and other water infrastructure projects throughout the state.

b.      Regulatory Reform

Background: Of California’s 4 million businesses, 3.1 million are sole proprietorships. 87% of companies have 20 or fewer employees. Environmental regulations in California are a burden on our small businesses, causing them to leave or expand outside of our state. Following are some areas that pose the greatest burden to business:

  • California Environmental Quality Act (CEQA): Litigation brought about under CEQA has resulted in delaying and killing projects that met all environmental protection requirements.
  • AB 32 Cap and Trade costs are significant, and collected fees are ‘invested’ into programs with ‘modest’ ties to air quality improvements.
  • California’s minimum wage and leave laws: The wage and leave costs placed on businesses is a competitive disadvantage, and renders a California location or expansion unsustainable for many.

Action needed:

  • Reform CEQA to limit appeals and delays after the public review process.
  • Review the AB 32 fees distributed over the past 24 months to determine whether they are having the intended effect to reduce pollution.
  • Allow costs related to minimum wage, personal leave laws and wage and hour regulations to stabilize before adding new economic burdens.
  • Evaluate California’s competitiveness with states such as Nevada, Arizona and Texas to determine how we can improve our attractiveness on major projects we have lost to these neighboring states.

c.      Workforce Development

Background:  The Central San Joaquin Valley counties are focused on the development of training and retraining in advanced manufacturing. Partnerships with business and education have been forged to develop a globally competitive workforce. We must raise the academic achievement of Central Valley students in STEM disciplines.

Action needed: 

  • Direct workforce development resources to disadvantaged regions and communities. Support the development and rollout of curriculum that supports advanced manufacturing, including tuition reduction for graduates who go on to teach these skills.
  • Address the lack of qualified teachers in Fundamental Sciences in the Valley. Incentivize STEM graduates to pursue a career path in teaching.

d.      Assistance for Disadvantaged Communities

Background:  California’s most disadvantaged communities are in desperate need of tools and resources to develop the public infrastructure required to attract and expand business. Logistics firms locate out of state to avoid California transportation and fuel requirements and costs. These firms transport cargo from the Ports out of state, and then bring many of those goods back to California for sale.

Action needed: 

  • Grant full sales and use tax elimination on manufacturing equipment purchases in counties or regions with annual unemployment rates equal to or greater than 130% of the average statewide unemployment rate or other defined economic characteristics.
  • Extend the applicability of the Sales & Use tax exemption to logistics and distribution centers (possibly through amendment of AB 398). This would incentivize the location of these facilities within impoverished communities in California and reduce pollution by reducing out of state truck miles and the utilization of cleaner diesel required by CA companies.

 

Former State Farm complex, Bakersfield’s largest office building, sells

BY STEVEN MAYER

    Apr 5, 2018
State Farm
Hundreds of State Farm employees still work at the building at 900 Old River Road. But as of Tuesday, the building, with more than a half-million square feet of office space — Bakersfield’s largest — has a new owner.Felix Adamo/ The Californian

Could Bakersfield’s largest office building become the new local headquarters for a big oil company?

In a landmark sale that could affect commercial real estate in Bakersfield for years to come, Cushman & Wakefield and two of its directors said Thursday that the former operations center for State Farm in southwest Bakersfield has been sold.

The commercial real estate agency’s Senior Director Jeff Andrew and Associate Director Pat Thompson closed one of the biggest deals of their careers earlier this week, but due to a strict confidentiality agreement, they can’t reveal key details — except for the fact that after years of work, the sale of the massive, four-story, 556,000 square-foot building closed on Tuesday.

“We can talk about how this could affect the commercial real estate market locally,” Andrew said. “But we can’t reveal the seller, the buyer or the price.”

Fortunately for the curious, that information is part of the public record, and Californian reporters have been checking on the fate of one of the city’s most important chunks of real estate, on and off, for months.

According to information compiled by the Kern County Assessor’s and Recorder’s offices, the seller, represented by Cushman & Wakefield, was listed as LSREF2 Tractor REO BAK LLC.

More interesting, the buyer is identified as California Resources Real Estate Ventures LLC, or California Resources Corp., a Los Angeles-based energy company that spun off from Occidental Petroleum Corp. in 2014.

The price: $48.4 million.

The presence of the insurance company’s center at 900 Old River Road, and the hundreds of jobs it created, had been touted for years as a significant economic driver for the southern San Joaquin Valley. So when State Farm announced it was leaving, the news inspired angst among those concerned about jobs and economic growth in Bakersfield.

State Farm is committed to a reduced number of employees staying in the building, for now, Andrew said, but the new owner — he would not confirm the name of the buyer — would fill out the lion’s share of the space.

Many of those new employees will come from several other local commercial office buildings and will be consolidated under one huge roof. That means office vacancies will be opening up in Bakersfield. But those smaller spaces should be easier to fill, said Thompson.

A building with more that a half-million square feet of office space has few potential tenants.

“We had to go to the largest users of office space,” Andrew said.

And that’s a very short list.

http://www.bakersfield.com/news/former-state-farm-complex-bakerfield-s-largest-office-building-sells/article_c4863ec0-3924-11e8-b71f-dfbdf6a0adaa.html

Clovis’ craft beer scene is heating up: ‘We see a lot of potential out here’

Updated April 04, 2018 03:36 PM

Ex-Fed Ex building sold for $10.45M in Stockton

By BusinessJournal

 

The property at 4730 FIte Court in Stockton, a one-time Fed Ex ground facility, has sold for $10.45 million to Dermody Properties.

An industrial building which once house a Fed Ex ground facility in Stockton has sold for $10.45 million.

Dermody Properties, a company owning distribution, e-commerce and manufacturing sites throughout the U.S., purchased the location at 4730 Fite Court, which is 143,888 square feet off Arch Road, east of Highway 99 in Stockton.

“Dermody Properties has made significant strides at growing their footprint in the Central Valley and proved to be the best buyer to bring in, figure out this somewhat complicated transaction given the existing tenant, underlying sublease and other property related matters, and close on this well-located, quality asset,” said Jim Martin, SIOR, of Lee & Associates Stockton, who represented Dermody Properties in the transaction.

“This is further testament to how our Lee offices are able to execute assignments and work in partnership to provide excellent service to our customers,” Martin went on to say.

The seller was Stockton MAG, LLC., who was represented by Martin and Craig Hagglund, SIOR, of  Lee & Associates Oakland.

https://cvbj.biz/2018/04/05/ex-fed-ex-building-sold-for-10-45m-in-stockton/