BY MICHAEL FINCH II
MARCH 18, 2019 02:40 AM,
image via caloz.org
A new California organization has been formed to help investors and developers take advantage of federal Opportunity Zones.
CalOZ “will promote competitive, equitable and sustainable Opportunity Zone investments in California,” according to a release from the organization.
“Our state must embrace new strategies to rebuild an upward economy that works for all Californians,” said Kunal Merchant, president and Co-Founder of CalOZ. “Opportunity zones offer an important new tool, not only to promote economic mobility and the green economy in areas of our state that need it most, but also to re-evaluate and re-imagine how business, government, and community work together to foster a more competitive, equitable and sustainable economy in California.”
In President Donald Trump’s 2016 Tax Cuts and Jobs Act, he outlined what was labeled Opportunity Zones, which offered tax breaks on capital gains for investments in distressed areas.
In Fresno, a number of the areas were established, including the Kings Canyon and Blackstone avenue corridors.
On average, Opportunity Zones have a poverty rate of nearly 31 percent with families making 59 percent of the median income for the area, according to the release, citing information from Economic Innovation Group.
“Opportunity zones offer an intriguing new pathway for our state to expand our middle class and restore the California Dream for all residents,” said Ashley Swearengin, Central Valley Community Foundation’s CEO and former Mayor of Fresno. “I’m thrilled to see CalOZ showing leadership on this issue and excited to support their work both in the Central Valley and state as a whole.”
CalOZ’s first priority will be coordinating with the state to create “high-impact” policies in addition to the ones being offered by the federal government. The plan is to create a “triple-bottom line mindset” for social, environmental and financial opportunities, according to the release.
“With more than three million Californians residing in opportunity zones, California can and must seize the chance to deploy an unprecedented source of private capital into the communities that need it most, “ said Jim Mayer, President and CEO of California Forward. “We’re proud to partner with CalOZ to support state and local action to ensure California emerges as a national leader in this program.”
The U.S. Department of the Treasury certified more than 8,700 qualified areas throughout the country. Of those, California has around 10 percent within its boundaries. And Fresno County is ranked third in terms of having the largest designated Opportunity Zones, according to Merchant.
Those designations will last through the end of 2028.
It’s no secret the number of super commuters – those poor people who trek more than 90 minutes each way to work – is steadily on the rise in California.
Modesto, Stockton and the San Bernardino metro areas were already super commuting hubs 12 years ago. A recent report by Apartment List shows it’s still on the rise – and the commuters often make more money than their neighbors.
The report shows wide variations in pay for those who telecommute or travel long distances for work compared with people who are employed nearby. The implication is that high-earning workers could drive up the cost of living in less-expensive areas, spreading affordability issues
Super commuters exist across the country but the prevalence is heavier in California. They can earn as much as 20 percent more than their neighbors in Stockton and 18 percent more in Modesto.
With 11 percent of its full-time workforce traveling nearly three hours for work, the Stockton area is the super commuting capital of the United States. Modesto was ranked a close second with 8 percent of its workforce doing the same.
The phenomenon is one of two parallel trends driven by the housing market in the Bay Area, said Chris Salviati, an economist for Apartment List in San Francisco. He said as rents and home prices grow further out of reach, more people look elsewhere to live but continue working in the Bay Area since there are so many high-paying jobs.
“You’ve got a lot of people that are doing quite well by conventional standards, earning six-figure salaries, but in this area that’s just not enough for them to be able to live close to the downtown areas,” Salviati said.
On the other end of the spectrum are construction workers who also travel long distances for work. But in Northern California, Salviati said the Bay Area housing crisis is more to blame. In San Francisco proper, rent growth is flattening a bit but there’s much faster growth in the outer areas, Salviati said.
“Given that these folks are coming at a higher point on the income range, they are going to be putting more pressure on the upper end of the housing supply,” Salviati said.
A California computer scientist is set to compete for millennial dollars right here in Visalia.
Computer scientist Aamir Farooqui plans to open a 1,800 square-foot, fully-automated convenience store, similar to Amazon Go.
Based in Sacramento, Farooqui says his new concept store is the first of its kind in the Central Valley. He hopes to duplicate it elsewhere, he said.
An automated convenience store relies on computers and robotics. Amazon calls it “just walk out” shopping.
The new Visalia store will be built at 707 S. Bridge St., in the middle of the city.
Currently, it’s a vacant lot sandwiched between a second-hand store and homes. Farooqui bought the vacant parcel last year.
The developer is seeking a conditional-use permit from the city for the new store.
“In our model, we will be using new type of vending machines equipped with WiFi and cameras,” Farooqui said. “People can buy merchandise using cash (after converting to gift cards), credit or debit cards or through a mobile app. At the store opening, we plan to give away 100 free gift cards to our first customers.”
These kinds of stores have taken off in Europe where they go by the names of SmartMart and RoboMart. Farooqui says he has yet to choose a name for the Visalia location.
He hopes to open as soon as possible.
Not having on-site employees will allow the business to save money although it may take shoppers a little time to get used to a new routine using technology.
“Our goal is simply to reduce the cost of running a store for small businesses and at the same time offer 24-hour convenient service to the local community.”
Amazon’s model is simple.
“You simply walk in, grab what you need, and go. Amazon bills your credit card as you pass through the turnstile on your way out,” he said. “Moments later, an app on your phone provides a receipt detailing what you’ve bought, what you paid, and even how long you spent inside.”
Grocery stores are automating the shopping experience led by Walmart and Sam’s Club. The Visalia Walmart is installing more automated check-out devices and Sam’s Club wants to allow shoppers to scan products by holding their smartphones over a product, without having to find and capture a barcode on the package.
Microsoft is said to be developing technology that can track what shoppers add to their carts.
Meanwhile, Target is changing item pickup service at the stores with Pickup Towers, making the in-store process automated.
Bitwise Industries is teaming up with Fres-Yes realty company and expanding to a new location in Downtown Fresno.
It will be located at the Old Spaghetti Factory building on Ventura and R Streets.
The building will be the third location for Bitwise, which already has South Stadium Van Ness and The Hive.
The second story of the new building, called “Bitwise 41,” will eventually have a team of 150 FresYes agents working there.
Organizers say they hope the new location will inspire other businesses to come to Downtown Fresno.
“So I think the exciting part as far as visibility goes you can’t get more visible than this building right here. 41 is directly behind me. North and south. 45,000 cars going each way. It is a prime location for just visibility alone,” said Channelle Charest with Bitwise.
Bitwise 41 is expected to be ready to occupy in April.
A grand opening will be held in early summer.
MilliporeSigma, a Massachusetts-based life science company, provides research, process, and applied solutions to scientists and engineers.
A spokesperson confirmed the company plans to lease a soon-to-be built facility along Riggin Avenue, near Plaza Drive.
“This site was chosen due to its central location and easy access to transportation routes,” said MilliporeSigma Spokesperson Karen Tiano.
It will serve as a west coast distribution center for Millipore Sigma’s life science products.
Tiano said the center will create around 30 new jobs.
It’s expected to be open later this year.
Central Valley Business Times
December 19, 2018
• James Irvine Foundation ponies up $350,000
• “Unexpected people and places have huge contributions to make”
Bitwise Industries Inc. of Fresno says it has received a two-year grant of $350,000 from the James Irvine Foundation to help pay for its Geekwise Academy web developer job readiness programs.
The programs train unemployed and underemployed workers in the San Joaquin Valley for middle-wage jobs in the tech industry.
“The assumption that to be successful in technology, you must be a computer scientist in the Silicon Valley with a degree from a high-profile university, is one that has kept people in the Central Valley from exploring computer programming as a career,” says Irma Olguin Jr., co-founder and CEO, Bitwise Industries. “We know that, if given an opportunity, unexpected people and places have huge contributions to make to the technology industry.”
One of the biggest problems facing the tech industry is the inabilityto find talent fast enough to keep up with demand. The purpose of Geekwise, theeducational arm of Bitwise, is to train software developers in Fresno. To date,Geekwise says it has educated 3,500 students and intentionally cultivated astudent population that is more than 50 percent female, 50 percent minority and20 percent first-generation immigrant.
UC Merced is growing and changing and one of the biggest changes will be a new standalone business and management school.By Nathalie GrandaFriday, December 14, 2018 04:18PMMERCED, Calif. (KFSN) –UC Merced is growing and changing and one of the biggest changes will be a new standalone business and management school.
The university is working to create a new interdiscplinary school, one that university officials are calling the “management school of the future”.
“We’re taking existing programs, putting them together and focusing them together on this complex system,” Gallo School Planning Initiative Director Paul Maglio said.
The new Gallo school will bring together educators from the schools of engineering, natural sciences and humanities to teach students under one main focus. The university is already known for its focus on research and science, and the new school will be incorporating those science components into their program.
“In a business school, you tend to focus on profit. In natural resources you tend to focus on the planet. In cognitive science, you tend to focus on people. We’re bringing all that together to have a sustained focus all at the same time,” Maglio said.
The university’s Ernest & Julio Gallo School of Management already has graduate business programs.
Graduate student Taylor Fugere said the science-based business program is what drew her to UC merced, and she’s hopes a new school will bring more interested students.
“I think UC merced moving in that more specialized direction is going to be really helpful in people being able to explore different career options, and being able to have more opportunities for a hands-on educational experience.”
The process will take a few years. Ultimately, the new school will need to be reviewed and approved by several campus administrators, and the University of California regents. University officials hope to have the school in place by 2021.
Inside an office space at Bitwise’s The Hive in Downtown Fresno, deals and orders are being made globally.
“I think Fresno it’s not just Fresno anymore, we’re global. I hope people realize that and go after more global clients and do more international business,” said Jennifer Kim, Blockheads Development & Marketing Founder.
Blockheads Development and Marketing, which specializes in blockchain consulting, solutions and marketing to help small businesses.
Kim and the company relocated from Chicago more than a year ago.
“One day I decided to the tour at Bitwise and I was hooked in and the community is great. Everyone wanted to support me. So I became a part of a bigger clan and got a lot of support. The facilities,” Kim said.
She had worked from home but chose to be a part of the startup ecosystem in Fresno.
Recently, Fresno was highlighted in a Global Startup Ecosystem Report by Startup Genome, which studied cities across America to see the environment for companies.
Bitwise Industries says about 50-60 companies have moved to Fresno since Bitwise began.
“You don’t start Silicon Valley on day one, but we’re beginning to see the potential. We’re seeing the sorts of resources needed to grow the technology industry in Fresno, but we have work left to do. We’ve got to support things like Bitwise and these collisions. We’ve got to continue to be welcoming to outsiders and do more and better in the technology industry,” said Jake Soberal, Bitwise Industries C.E.O.
Soberal believes new companies can create more jobs and economically help the Valley.
Bitwise has seen dozens of businesses relocate in the past few years and they think that that number will only go up.
For more information on the fastest growing companies in the San Joaquin Valley, please see The Business Journal’s annual list on page 10.
According to Tom Howard, the owner of Lee’s, this uptick in business can be largely attributed to customer service and reputation, along with upgraded software to connect with customers. Another big factor, however, has been the improvement of the economy, both nationally and locally.
“It allows homeowners to make upgrades that they haven’t been able to make before,” Howard said. “I think that the economy is doing a lot better in the Central Valley than it was in 2009 and 2010 — that definitely helped fuel the growth.”
Howard isn’t alone in his observation. According to Fresno State economist Ernie Goss, the Central Valley — which has previously lagged behind the rest of the state — has been making rapid progress in recent years.
“Now the catch up is really [sped] up, meaning the rate of growth has been positive for quite some time,” Goss said. “But the rate has definitely increased and relative to the U.S., it’s certainly stronger.”
In Goss’s research, he found that overall job growth in the Central Valley over the past 12 months has been 2.6 percent compared to the national average of 1.7 percent. Howard said that his own company has expanded its employment roster from approximately 26 in 2015 to about 50. Meanwhile, expanded business has given Lee’s the ability to pay tuition for his employees who are in college, along with their books.
Goss added that construction and manufacturing are two other sectors to watch. Construction is surpassing the national average with 8.3 percent job growth in the region, while in manufacturing, its 5.1 percent. Delano Construction, LLC of Fresno, which currently has a roster of 26 employees, saw a revenue growth of 208 percent.
The last three years have also proven successful for the solar companies in the region. Topping this industry has been Energy Concepts Enterprises, Inc., which went from revenues of $4.2 million in 2015 to $9.8 million in 2017, a rate of 132 percent. SunPower by Quality Home Services also saw growth of 90 percent in the same time frame, while in Visalia, CalCom Energy was up by 47.46 percent. According to Ryan Gutierrez of Energy Concepts, this has largely been the result of higher utility bills.
“Rates are continually going up,” Gutierrez said. “Solar offers a way for a customer to avoid rate increases by covering their own quest for energy.”
Goss said that tariffs on imported solar panels would further help domestic manufacturers.
Meanwhile, a law passed earlier this year mandating solar panels on new homes could also be good business when it goes into effect in 2020.
For some companies, however, growth isn’t necessarily facilitated by a growing economy. For example, BCT Consulting, Inc. of Fresno, provider of technology solutions, tends to be busier when there’s a dip in the market. This is because their company deals in the outsourcing of technology and helping clients find solutions that are more cost effective.
Nonetheless, BCT has grown by 27 percent. Eric Rawn, president and founder, credited this to acquisitions and mergers, along with community outreach and customer service.
“We don’t want to grow just to grow,” Rawn said. “We want to grow because it makes sense for everyone involved.”
In the months and years to come, Goss added that he has optimism for the future of the San Joaquin Valley. Though he stated concerns about immigration and the agricultural exports being impacted by the current trade war with China, he said the region has become increasingly appealing to the rest of the state.
“So there is the ability of some of those companies coming to Fresno and enjoying many of the benefits of California, but not many of the costs that we’re seeing in San Francisco, for example,” Goss said.