Category: Economy

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.

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.

 

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/

Gap bringing fulfillment center to Fresno, expected to add more than 500 jobs

2nd Annual Career & College Expo

The goal of the Career and College Expo is to showcase careers, career pathways and current job opportunities of all industries within our community. Some of individuals participating will be local high school seniors throughout Stanislaus County, college students, and the general public excited to learn about new career pathways/opportunities.

 

The Career and College Expo will take place on Thursday, April 5, 2018 at the Turlock Fairgrounds from 4:30 PM to 7:00 PM; with set-up starting at noon the day of the expo. We are estimating over 700 people in attendance.

15th Annual Fresno County Real Estate Forecast

As a guest, you will walk the red carpet, have your pictures taken, enjoy hordevours, an incredible cocktail hour, and a complimentary publication that highlights & forecasts the real estate market including statistical data, market comparisons, and future projects within Fresno County.
 
Who are the panelists?
  • Jeffrey W. Lauritzen will discuss Commercial Real Estate
  • Brandon Gonzales will discuss Residential Real Estate
  • Rachael Orlando will discuss Retail Real Estate
  • Stanley Kjar will discuss Agriculture Real Estate
  • Terance Frazier will discuss Dowtown Fresno Real Estate
  • Tony Cortopassi will discuss Office Real Estate
  • Robin Kane will discuss Multi-Family Real Estate

2018 Sequoia Regional Economic Summit

We are presenting a streamlined format based on feedback from previous years.  Chris Thornberg will be the primary speaker, with a few (no more than a few!) 5 minute economic updates.
 
Doors Open/Breakfast Buffet: 7:30 AM
Program Kick Off: 7:45 AM
Adjournment: 9:30 AM

Merced County Hopes A Deal With Port Of L.A. Turns Former Air Force Base Into Manufacturing Hub

  MAR 6, 2018

Just outside the city of Merced, slightly east of Highway 99 is what used to be Castle Air Force Base. Like most areas of the Valley, it’s rural. Across the road from the center are train tracks, and you can hear the railroad crossing signals ding. This unincorporated area of Merced County will soon become an inland port.

Now, there isn’t any water around; we’re still in the Central Valley. It won’t be the kind of port that serves ships and boats. It will be a place for products to be built and materials consolidated, and then sent to the Port of Los Angeles.

Today, two-thirds of the nearly-2,000 acre base is still an airfield, but the rest of it is the Castle Commerce Center.

“This is a site that has roughly about 75 tenants, about a 100 different lease holds,” says Mark Hendrickson, directory of community and economic development for Merced County. “We generate about $2.9 million in lease revenue.”

Merced County is hoping to use a portion of the former Castle Air Force Base as a hub for manufacturing and distribution in the Central Valley.
CREDIT MERCED COUNTY COMMUNITY AND ECONOMIC DEVELOPMENT DEPARTMENT

  Hendrickson says their goal is to redevelop Castle “to really turn it into a site where we can focus some solid attention on manufacturing. We a want to be a place where things are made because when things are made people are working.”

Back in October, Merced County’s Board of Supervisors developed an agreement with the Port of L.A. formalizing what Hendrickson calls a “hub and spokes” development. Merced will become a place of manufacturing and distribution, and use the nearby rail line and freeways to bring goods to L.A. to be shipped around the world. In kind, Castle may also become a place where the Port can send products for distribution.

Merced County isn’t the only Valley county building ties with the Port of L.A. Kern County recently got approval to expand their Foreign Trade Zone at TejonRanch. They also will move the zone’s affiliation to the U.S. Customs and Border Protection at the Port of L.A. The expansion means all of the industrial areas of Tejon Ranch are now within their foreign trade zone. Companies operating there will receive a break on import duties and fees. Tejon Ranch has announced the expansion will bring jobs to Kern County.

Hendrickson says the same could happen in Merced, when it comes to job creation.

“Using today’s workforce numbers, about one out of every nine jobs would be right here at Castle in about twenty years.”

There is one drawback though. More shipping could mean more air pollution.

Dean Florez is a member of the California Air Resources Board and a former state senator from Kern County.

“The kinds of jobs and economic growth this brings are very large diesel trucks that are running a lot of things that make the air a lot worse,” says Florez. “You know, that balance is really important between jobs, growth, and air mitigation.”

One issue is that companies send their trucks full of goods to a port, and then the truck typically returns to the distribution center, empty. If that truck is coming to Merced’s inland port, that could mean hundreds of miles driven just to return the truck.

“Companies need to figure out how to send items to wherever, but that these cargo trucks not come back empty.”

Florez says the Air Resources Board should come up with ways to incentivize companies to share their trucks, and reduce the total number on the road. He also says this is really an opportunity for outside groups to develop something like an Uber for trucks, where they share cargo going to the port and returning to the Valley.

“I doubt it will be state government that comes up with that,” Florez says. “But I do think it will be some outside force that will come in and say, ‘This is the way, really trucks should be running in California, we have this sharing mechanism and it actually would work very, very well.’”

Florez says he plans to bring this up with CARB later this year.

In Merced County, Hendrickson says they plan to use trains to mitigate truck pollution.

“We see our using our rail connectivity on-site to get trucks off the road, improve air quality, open up shipping opportunities for folks not only through Merced County and really throughout the entire San Joaquin Valley to places all over the world,” says Hendrickson.

Finding the best shipping practices from an inland port will take time. And developing an inland port in the first place has been a long time coming.

Mike Dozier is the former Community and Economic Development Director for the city of Clovis. He says that these sorts of deals don’t just happen overnight.

“What happens is you have this vision, and it might be ten years before that vision starts to materialize,” says Dozier.

Dozier says it takes time for infrastructure to develop, and to convince groups to believe in the project’s potential.

“You know, you just build on it, you just have to have things ready for when the time is right.”

For Merced County, officials hope that time is now.

http://kvpr.org/post/merced-county-hopes-deal-port-la-turns-former-air-force-base-manufacturing-hub

 

Kern County Energy Summit

Each fall, industry leaders gather in Bakersfield to exchange information on the latest advances and innovation in the energy industry, specifically as it affects Kern County’s position as a U.S. energy leader.

Kern EDC partners with other industry supporters every November to explore current challenges and opportunities facing the petroleum, utility, and renewable energy industries. By attending this annual forum, you too will have a chance to network with top industry experts and suppliers to learn about local innovations and technologies that are shaping the energy future of the state and nation.