Category: Economy

Preparing the Way for a Central Valley Renaissance

by Stuart VanHorn

June 6, 2019


Farm of the Future (Photo: WHCCD)

Recently, Governor Newsom announced his new “Regions Rise Together” initiative. Launched in partnership with California Forward and the California Economic Summit, this initiative is in recognition of the fact that the substantial economic and job growth that the state has experienced since 2010 has been concentrated in the state’s coastal areas and has largely passed over the state’s inland regions.

In fact, by the Governor’s own calculations, residents of California’s inland regions have seen their per capita income drop dramatically while 70% of job growth in the state during this same period has occurred in the state’s coastal regions. With the Regions Rise Together initiative, Governor Newsom intends on turning his “California for All” slogan into a strategy to design a comprehensive economic plan that will ensure sustainable and inclusive growth across the state and benefit all parts of California.

The announcement of the Governor’s new initiative is welcome news for those of us who live and work in the Central Valley. West Hills Community College District covers nearly 3,400 square miles of Central California, primarily in the western portions of Fresno and Kings Counties. The District serves over 8,000 students with two accredited colleges: West Hills College Coalinga and West Hills College Lemoore. In addition to its main campus location in Coalinga, West Hills College Coalinga also operates the North District Center in Firebaugh, and the Farm of the Future located at the north end of Coalinga. We are very proud of our students and our graduates and we have an 87-year history of serving students in efficient, innovative practices such as Prior Learning Assessment that promote student success and completion.

We also know well that our students face more social, economic, and structural obstacles to student success. Many of the students that we serve are first generation college students that must balance work and family obligations with their educational goals. They are hindered by the region’s higher unemployment rates, fewer jobs, and one of the highest poverty rates in the country. While Fresno County is California’s single most productive agricultural region and one of the most productive in the world (providing more than half of the fruits, vegetables, and nuts grown in the United States), Census data show that it is also the poorest metro area in the state and the second most impoverished region in the nation.

This data also show that Valley areas (Fresno, Modesto and Bakersfield-Delano) are among the top five U.S. regions with the highest percentage of residents living below the poverty line (one of every four). In Fresno County, median income fell from $46,479 to $42,807 during the last Census period while unemployment rose to 16 percent. In addition, food stamp use climbed to nearly 18 percent.

Beyond these economic statistics, our students also suffer from the lack of broadband internet in much of rural Fresno County. This broadband inequity makes distance education impossible, severely limits tele-health and tele-medicine opportunities, and significantly hinders educational attainment and economic growth in the region. The inequity of broadband access is a key reason why poor communities stay poor, chronic illness manifests, and social mobility is stunted. This fact is borne out by statistics. Our district has 12% of the state’s population but only 6% of the state’s bachelor’s degree holders. In addition, only 11% of the population ages 25 and above possess an associate’s degree or higher. This compares to 41% statewide.

West Hills is not intimated by these statistics. We are working every day to close these achievement gaps and increase educational attainment in our region. We offer Career Technical Educational programs that build a skilled workforce for our regional employers. We assist our students financially through our President’s Scholars program and by offering free Open Educational Resources (OER) textbooks. And we are helping eliminate the broadband inequity and ensure that reliable, high-speed broadband service is available in our region by ensuring that broadband infrastructure is built throughout the West Side and by raising funds to augment the monthly internet subscription fees of our student-led households.

The Governor’s initiative promises to build on existing locally driven initiatives in our state’s diverse regions while also leveraging the investments and policy priorities of the state. West Hills looks forward to representing our students’ and our communities’ needs in this conversation and working toward a future in which educational attainment soars, infrastructure supports growth, skills gaps are eliminated, and the quality of life increases for all residents in Fresno County.

https://caeconomy.org/reporting/entry/preparing-the-way-for-a-central-valley-renaissance

How many jobs might Hard Rock casino bring to Kern County?

It might take five years, it might take a decade, but Kern County is apparently getting a Hard Rock Cafe-branded hotel and casino.

At least that’s the hope of the Tejon Tribe of Kern County, which announced an agreement this week with Hard Rock International, the global hospitality company known for its rock ‘n’ roll-themed restaurants. Hard Rock has agreed to develop and manage a $600 million, 400-room hotel and casino that the tribe has proposed on farmland just west of Highway 99, half an hour south of Bakersfield.

Sandra Hernandez, a council member with the Tejon Tribe, joined The Californian’s Robert Price Wednesday on his weekly “One on One” noon webcast to talk about the Tejon Tribe and its vision for the hotel-casino.

Among the topics they discussed:

• The tribe is considering the possibility of building administrative offices, a health-care facility and housing near the hotel-casino, which will occupy 52 acres of the 306-acre parcel the tribe owns near Mettler.

• The hotel-casino would employ 2,000 people — more than twice the number of known Tejon tribal members. There’s no such thing as a hiring advantage for tribal members, however. “We’re an equal opportunity employer,” Hernandez said.

• Hernandez said she expects to maintain good relations and mutual support among the management of the Tejon’s Hard Rock casino and those of the Eagle Mountain and Tachi Palace gaming casinos in adjacent Tulare and Kings counties, respectively.

https://www.bakersfield.com/news/how-many-jobs-might-hard-rock-casino-bring-to-kern/article_f756f168-87c6-11e9-a7da-37ca7ab1260e.html

Plans to create medical school in Valley takes shape

Friday, June 7, 2019 6:29PM

FRESNO, Calif. (KFSN) — Creating a medical school in the Valley brought dozens of leaders to UCSF Fresno.

“The San Joaquin Valley has roughly 150 doctors per 100,000 residents. In contrast, San Francisco has 411 per 100,000 residents. You can see the dramatic difference that exists. This is one of the most underserved medical regions in the country,” said Assemblymember Adam Gray.

Gray helped lead the first San Joaquin Valley Coalition for Medical Education. He’s currently working on AB 1606 to help fund the school by not allowing people to write off their gambling losses on their taxes and using that fund.

The school would likely need $500 million to get started.

At Friday’s meeting leaders spoke about combining facilities and programs to jumpstart the school.

UCSF Fresno and UC Merced would combine forces to educate students.

“Getting a medical school started is extremely complicated there are a lot of regulatory barriers, political challenges and funding challenges. We’re excited to be partnering with UCSF, the Fresno office on a path to solving those problems,” said Gregg Camfield, UC Merced Executive Vice Chancellor.

UC Merced is working to create programs for the next generation.

“You name it, every kind of health professional is needed in the Valley and we’re committed to helping to produce that workforce,” said Camfield.

More than 300 doctors are currently training in the Valley through UCSF Fresno.

“Helping to develop students from the region who come from in those underrepresented areas in medicine will allow us to put people out into the community to provide care” Michael Peterson, UCSF Fresno Associate Dean.

Keeping the community healthy with a strong workforce of health professionals

“Lawmakers, University officials and leaders hope to the ideas from this meeting and to build more partnerships and find more funding. The San Joaquin Calley Coalition for medical education plans to meet later this year.

Manpower: Strong employment outlook predict for Q 3

Central Valley Business Times

June 11, 2019

  • 21 percent of employers nationwide plan to add employees
  • Two Central Valley metros are topping that

In the third quarter of 2019, 27 percent of U.S. employers expect to increase payrolls, 3 percent anticipate a decrease and 69 percent expect no change.

Once the data is adjusted to allow for seasonal variation, the national Net Employment Outlook for the U.S. stands at +21 percent, the strongest reported in 13 years.

Hiring intentions are 2 percentage points stronger when compared with the previous quarter, and improve by 3 percentage points in comparison with this time one year ago.

Employers in 28 percent of businesses surveyed in the West expect workforce gains during the coming quarter, while 3 percent anticipate a decrease and 68 percent expect no change. The resulting Net Employment Outlook stands at +25 percent. Once the data is adjusted to allow for seasonal variation, hiring plans for the region are the strongest reported in more than 11 years. Employers report a slight quarter-over-quarter improvement in the Outlook, and a moderate increase when compared with this time one year ago.

In three of the West’s industry sectors, employers report moderately stronger hiring intentions for Quarter 3 2019 when compared with the previous quarter: information, professional & business services and transportation & utilities. Slightly stronger hiring prospects are reported in four of the region’s industry sectors: financial activities, government, leisure & hospitality and nondurable goods manufacturing.

Education & health services sector employers in the West report a relatively stable labor market in a comparison with the second quarter of 2019, Manpower says.

During the next three months, job seekers in the West’s durable goods manufacturing and other services sectors can expect moderately weaker hiring activity when compared with the previous quarter, according to employers. Employers in the region’s construction and wholesale & retail trade sectors report slightly weaker hiring plans.

Manpower says 31 percent of employers in the Sacramento metropolitan area expect a net employment increase in the third quarter, one of the strongest performances in the nation.

More than one out of four (26 percent) of employers in the Stockton metro expect a net employment increase in Q 3, on par with Boston, Columbus, Omaha, Phoenix, and Washington, D.C.

Twenty percent of Bakersfield employers told Manpower that they plan to increase their workforces in the third quarter and 19 percent of those in the Fresno MSA said the same.

Employers in the Midwest report the strongest hiring prospects in 18 years, with Manpower’s outlook improving by 2 percentage points in comparison with Quarter 2 2019.

In the Northeast, hiring plans are 1 percentage point stronger when compared with the previous quarter and the outlook reported in the South is unchanged. The strongest regional hiring pace is expected in the West, where the outlook is +22 percent. Midwest employers report an  outlook of +21 percent, and outlooks stand at +20 percent and +19 percent in the South and the Northeast, respectively.

In a comparison with the second quarter of 2019, hiring prospects are slightly stronger in the West and the Midwest, says Manpower. Northeast employers report relatively stable hiring plans, and the outlook for the South is unchanged. When compared with this time one year ago, employers in the West report moderately stronger hiring intentions. Slight year-over-year improvements are reported in the Midwest and the Northeast, while employers in the South report relatively stable hiring plans.

https://files.constantcontact.com/2cb20f61601/1756cf8e-fe1a-41d2-aafe-b7693a621acd.pdf

Hotel construction is booming as developers bet on Bakersfield’s economy

Expectations that Bakersfield’s economy is on the rise have created the city’s biggest hotel boom since the Great Recession.

Half a dozen hotels with a combined 658 rooms are proposed or under construction, all on the city’s west side and many of them extended-stay properties geared toward business travelers. Some of the incoming brands are entirely new to the city.

Hoteliers say the rush of private investment is being driven in part by other local projects, such as the Amazon distribution center under construction near Meadows Field Airport. There’s also a sense the city’s relatively low housing and labor costs have created an incentive to build while the savings last.

IMPROVING CONDITIONS

Conditions in Bakersfield’s hotel market have improved significantly during the past decade — the city’s occupancy rate is up more than six points, average room rates have increased 25 percent and Bakersfield’s hotel room inventory is up 12 percent, according to hotel data tracker STR.

Those numbers alone don’t explain the construction seen in the market lately, said Francois Khoury, general manager of the DoubleTree by Hilton Bakersfield, which is finishing up more than $15 million of renovations that began in April of last year.

He said a bigger factor in the recent investment is anticipation that oil prices are on the way up and that now’s the time to prepare for good times ahead in the local economy.

“Everybody wants to be ready,” he said.

AFFORDABILITY AND GROWTH

Jenny Hlaudy, general manager of The Courtyard by Marriott, sees affordability as bringing investor attention to the Bakersfield market. Land is inexpensive locally, she said, and so are housing costs.

At the same time, the area’s overall growth, combined with large construction projects going on around town, are helping not just hotels but also local restaurants and stores. She said the net effect is a desirable place to build new lodging.

“It’s huge,” she said of the hotel boom. “We haven’t had that much growth, as far as hotels, in many years. … It’s going to truly impact this city.”

One of the new hotels coming online later this year is a 113-room Home2 Suites by Hilton west of Coffee Road near Brimhall Road. Director of Sales Denise Connor said a large housing-residential-retail project proposed nearby, the Bakersfield Commons proposal, is probably one reason why the hotel is being built.

“With the Bakersfield Commons coming in, that is going to bring in potential new growth,” Connor said. She added that new roads projects and the Amazon center are further positive signs that could lead to business for the hotel.

SHARED BENEFITS

David Lyman, manager of Visit Bakersfield, the city’s convention and visitors bureau credited an increase in local events for recent hotel investments, as well as travelers stopping overnight on their way to national parks to the north and south.

Whatever the reason, Bakersfield’s hotel tax — a 12 percent addition to the cost of a room — is now bringing in more money than it ever has. This fiscal year alone the tax is projected to raise $9.7 million for the city’s general fund.

Add that to the money visitors spend on meals and supplies, he said, and the local hospitality industry becomes an economic force that is growing fast.

“These projects create and retain jobs, not just the people who work in the hotels and restaurants,” he said. “We all like to keep that money flowing locally.”

https://www.bakersfield.com/news/hotel-construction-is-booming-as-developers-bet-on-bakersfield-s/article_b7730026-87e1-11e9-8101-2fe0197fa532.html

What’s happening with Modesto, Turlock’s empty OSH, Toys R Us sites? A lot, actually

 

The empty Orchard Supply Hardware, Toys R Us and Babies R Us sites in Modesto and Turlock, CA all have been sold or leased. OSH sites on Oakdale Road in Modesto and Turlock will become Ace Hardwares. 

Those big empty Orchard Supply Hardware, Toys R Us and Babies R Us buildings dotting Stanislaus County might not be empty much longer.

In April it was announced the owners of Strand Ace Hardware in Escalon were going to take over the former OSH site on Oakdale Road. Work continues on that site, with a planned opening at the end of June. Now another new Ace Hardware is slated to take over the former OSH site on Geer Road in Turlock. A banner went up on the building last month with a planned late summer opening.

Modesto’s second former Orchard site, on Sisk Road, was sold earlier this year to Mad Monk Holdings, LLC, whose Berkeley-based owner also operates Rasputin Music & Movies. The next-door Toys R Us building was sold as well earlier this year, to the Miami-based commercial real estate investment firm Corbin Holdings.

A little further north on Sisk Road, the former Babies R Us site remains vacant, but plans are still moving forward for Rasputin Music & Movies, which currently has a shop on Dale Road, to relocate to the space. The new store will be a combined Rasputin and an Anastasia New & Vintage Clothingstore, both associated with Mad Monk Holdings, LLC.

Strand Ace Vice President Dirk Swanson, whose family has run the Escalon hardware store since 1975, said they hope to open in about three weeks, with a grand opening celebration planned for the last week of June. Staff has been working at the site daily — rearranging, organizing and stocking inventory. The 44,000-square-foot building is a significant step up from the company’s existing 28,000-square-foot store, which will remain open when the new one debuts.

AA Strand Ace Hardware 03.JPG
Strand Ace Hardware owner Dirk Swanson works inside the new hardware store in the former Orchard Supply on Oakdale Road in Modesto, Calif., Saturday, June 1, 2019. Andy Alfaro AALFARO@MODBEE.COM

Swanson said the company has been hiring the 50 to 60 positions needed to staff the new store. There are still a number of positions available and job-seekers should go to the Strand Ace websiteto apply. They’ve already hired a handful of former OSH employees for the new Modesto store as well.

In Turlock, the OSH on Geer Road near California State University, Stanislaus, closed last year when the largely West Coast brand was dissolved by its parent company, Lowe’s. In all, five Orchard Supply stores in the region were shuttered: two in Modesto and one each in Turlock, Manteca and Sonora.

The space, in the same complex as a Michael’s and Big Lots, has been stripped down to the studs inside. A spokesman for Mentzer PR Group, which is representing Ace Hardware, said a soft opening is planned for late summer. The new store will be owned and operated by a a subsidiary of Ace Hardware Corporation.

MR Ace Turlock 1.JPG
The former site of Orchard Supply Hardware on Geer Road in Turlock, Calif. The building is being converted into an Ace Hardware. Marijke Rowland MROWLAND@MODBEE.COM

The Illinois-based hardware company has more than 5,200 hardware stores in about 70 countries. Ace stores have been filling empty Orchard Supply buildings up and down California, including recent stores in Fresno and Thousand Oaks.

The other former OSH building in Modesto on Sisk Road remains empty and boarded up. According to county property records, the building was purchased by Mad Monk Holdings in February. The holding company is run by Berkeley entrepreneur Ken Sarachan, who operates the new and used music/movies chain Rasputin and new and used clothing store Anastasia. He also owns several buildings along Berkeley’s famed Telegraph Avenue.

Sarachan purchased both the old Babies R Us space and OSH store on Sisk Road this year. In February it was announced that the Modesto Rasputin store, which has been located two doors down from Trader Joe’s on Dale Road since it opened 2014, would move to the empty Babies R Us site. The new space will be a merged Rasputin and Anastasia store. At the time representatives had hoped to make the move this spring, but the company has gone through restructuring since. Rasputin stores in Stockton, Fairfield and Newark have closed.

MR Ace Sisk.JPG
The former site of Orchard Supply Hardware on Sisk Road in Modesto, Calif. Marijke Rowland MROWLAND@MODBEE.COM

Modesto store manager Ryan Hewitt said while the move to the new space is still planned, there is no set date yet. He said staff have been clearing out the old Babies R Us store, which was owned by now-defunct parent company Toys R Us, and still had fixtures and other furniture inside. They plan to hire more employees to staff the new site, and are looking for clothing buyers in particular. Interested parties should email hiring@rasputinmusic.com.

Hewitt said the company has not announced what it plans to do with the Sisk Road Orchard Supply site yet. But for the time being, it has been used to store items from the closed Rasputin locations and other sites.

Next door to the old Orchard Supply on Sisk Road, the Toys R Us building also remains vacant. But it too was purchased earlier this year by an outside buyer.

Corbin Holdings picked up the property in late December 2018. The privately held Miami real estate investment firm has purchased a string of old Toys R Us/Babies R Us buildings in California, Iowa, Connecticut, Virginia, Florida and Louisiana. The company website touts the purchase of the approximately 46,000 square-foot building in Modesto just of Highway 99 for its high-traffic location between Vintage Faire Mall and the nearby Walmart and Kohl’s stores.

https://www.modbee.com/news/business/biz-columns-blogs/biz-beat/article231051258.html

Study: Opportunity Zone-ready California could generate hundreds of millions in economic activity

APRIL 18, 2019 BY ED COGHLAN


South Los Angeles, California (Photo: Alfred Twu/Wikimedia)

More than three million Californians live in some 879 federally designated Opportunity Zones in disadvantaged communities throughout the state. California has more Opportunity Zones than any other state.

The federal Opportunity Zone incentive allows investors to defer federal taxation on capital gains by investing the proceeds through a qualified opportunity fund into a designated Opportunity Zone. To be eligible for the full benefit, investments must be long-term (at least 10 years) and meet a set of rules designed to ensure these investments create additional economic activity in Opportunity Zone communities.

To maximize the potential impact for Opportunity Zone residents, the state needs to pass legislation that will help communities become “Opportunity Zone Ready.”

“No such action has been taken yet in California,” CA Fwd CEO Jim Mayer wrote recently. “This is a serious missed opportunity to tap an unprecedented source of private capital in communities that need it most, and the state is running out of time to act.”

Governor Newsom has shown support for Opportunity Zones and ensuring California is a competitive environment for impact investments that can support community-building projects and local businesses. As the governor said at the Opportunity Zone Investor Summit at Stanford University last month, for the program to succeed it must spark investment while benefiting existing residents, rather than just investors. “We don’t just believe in growth,” Gov. Newsom said at Stanford. “We believe in inclusion. You can’t have one without the other.”

“Opportunity Zones provide an excellent opportunity to revitalize low-income areas in California,” said Lenny Mendonca, chief economic and business advisor to Governor Newsom. “In order to move the economic needle for millions of Californians who are struggling, attracting investment in areas where they live is sound policy that can help us meet our objective of making California’s economy more sustainable and inclusive.”

One example of a community that could benefit is the city of Lynwood, where roughly 70,000 people live in the working-class area of south east Los Angeles County.

“Economic development is a strategic priority for our city and many more like us,” said Jose Ometeotl, Lynwood city manager. “This investment vehicle can help us attract capital, improve our tax base and create jobs for our residents. I expect Governor Newsom and the Legislature will make sure California conforms to the federal requirements so communities like ours can compete for investment. ”

CA Fwd and Golden State Opportunity will release a new study next week showing that between $745 million and $1.2 billion in new economic activity in Opportunity Zones could be generated this year. In subsequent years, increased economic activity would range from more than $700 million to nearly $500 million.

“This study reaffirms what we already believed. Opportunity Zones will generate a significant return on investment and a much-needed boost to underinvested communities at a relatively minor overall expense to the state,” said Josh Fryday, president of Golden State Opportunity. “Opportunity Zones can be an important community-driven investment tool that complements other investments by the state and philanthropy in people, places and much-needed projects.”

These incentives would mean a potential revenue loss to the state of $65 million annually between 2019 and 2025, while local tax revenue is expected to cumulatively increase by $68 million over that same time period. Critics have said this incentive is an unnecessary expense, but according to the study, state support for Opportunity Zones will generate at least 10 times the economic impact in these areas, and state tax revenue would be largely recovered when deferred capital gains taxes are paid following the 2026 year.

“We are encouraged by the excitement in the investor community and encourage everybody to think about these investments as not simply about a tax benefit but about measurable long-term economic impact on the communities they are meant to serve,” Mendonca added.

The California Economic Summit in 2018 developed a framework that emphasized three steps that must be taken to maximize the social benefits of Opportunity Zones:

  • Make state resources available to communities that want to be “Opportunity Zone-ready”
  • Align state community, economic and workforce development funds to leverage social and environmental benefits of Opportunity Zones
  • Conform state capital gains tax treatment to the new federal law

Governor Newsom and legislative leaders will be sent the report on Monday and a series of meetings explaining the potential benefits are being scheduled.

“California is one of few states that have not yet enacted legislation conforming to the federal program,” said Mayer. “We believe that as legislators learn more about the program, they’ll make sure California isn’t left behind.”

https://caeconomy.org/reporting/entry/study-opportunity-zone-ready-california-could-generate-hundreds-of-millions

This Visalia company is one of three paper straw manufacturers in the U.S.

VISALIA, Calif. (KFSN) — At Kaweah Container, corrugated boxes are the bread and butter of the business.

They’ve been making them for decades, shipping them to customers in California and the west coast.

But last year, the family-owned Visalia company saw a global trend, identified a need, and decided to start manufacturing a new product — paper straws.

“Kaweah Container might be new to straws but we’ve used paper to make quality products for nearly 30 years,” the company says in their promotional YouTube video.

“Single-use plastic products including straws have kind of fallen out of favor and people were trying to be more environmentally conscious,” said president Rob Reeves.

The equipment came in last fall, and after months of research and development, shipping started in late February of 2019.

President Rob Reeves says it’s been a challenge, but a fun one. He added that the response so far has been positive.

“The paper straws that are out there on the marketplace now, a lot of people would probably agree they’re just not very good,” Reeves said. “So our goal was not only to make a paper straw but to try to make a better paper straw.”

Brian Johnson: “What’s a better paper straw?”

“Well our goal is to make something that lasts the lifetime of your drink, not the lifetime of the planet,” he said.

Reeves says Kaweah Container is one of three paper straw manufacturers in the country, and they’re the only one in California.

But he believes they can do it better than the rest.

One reason? They print them with this machine-an HP T400, which can put any kind of image you want on your straw.

“We use a thermal inkjet process so it creates a vapor bubble inside the printhead, and thus expelling the ink from the printhead, and that’s how the ink gets transferred to the paper,” said manufacturer Reg Phillips.

A slitter machine then cuts the paper down into smaller strips and it heads to Kaweah Container’s straw machines.

The straws are more than just eco-friendly. The materials in them are safe.

“It should be regulated and it’s not,” said the vice president of operations, Erin Jennings. “And it was extremely important to us that we worked with vendors who wanted to come up and help us develop an FDA approved product.”

Sequoia Brewing Company and the Visalia Rawhide are just a couple of the companies who have invested in these straws.

For more information, you can go to kcstraws.com

Could Bakersfield become a California boomtown?

Like many born and raised in Bakersfield, California, Austin Smith has made peace with the city’s reputation. Built on oil and agriculture, the city of half a million in the state’s rural Central Valley, known by outsiders for its unique strain of country music and long-running role as a punchline for Johnny Carson, has traditionally been stereotyped as unsophisticated and backwards.

“It’s like a California version of the New York versus New Jersey thing—but maybe worse,” Smith says. “You’re so close to one of the biggest metro areas in the country, but never quite there.”

Like many of his generation, Smith, 37, moved to bigger cities in search of opportunity. In his case, he sought work in urban planning and commercial development in Los Angeles and the Bay Area. But as he developed a passion for downtown revitalization, he began wondering, why not Bakersfield? He returned to his hometown in 2014 with a hunch that the city was ripe for redevelopment, and soon began work on what would become the 17th Place Townhomes.

Since opening in 2016, the high-end three-story, 44-unit downtown development represents the first market-rate housing built in the city’s core in decades. It’s not every day the city gets new housing, complete with a dog park, fountains, and a fire pit. Now that the development is fully leased—not a small accomplishment for new housing asking the highest rent in town, at between $1,630 and $1,830 for a two-bedroom—its success has convinced Smith and his firm, Sage Equities Real Estate, to break ground later this year on a new 53-unit project downtown.

“What we’re doing is a real niche product,” he says. “But you can really start seeing people get excited about this neighborhood.”

As in just about every other small- or medium-sized U.S. city experiencing a downtown rebirth, opportunity and affordability have drawn many millennials to return to Bakersfield and kickstart new businesses.
 Courtesy Sage Equities
Since opening in 2016, the 17th Place Townhomes development represents the first market-rate housing built in the city’s core in decades.
 Courtesy Sage Equities

A bet on Bakersfield and rebuilding downtown

Smith’s bet on Bakersfield represents a new era of development, however small, for this Central Valley city. A recent report from the National Association of Realtors (NAR) found Bakersfield to have one of the highest rates of millennial movers and homeowners, setting off a series of stories written with a tone of “wait, that Bakersfield?” as if it were a shock that somebody might find the city was both a good value and a good opportunity.

After all, compared to coastal California, where were the high-paying tech jobs and new homes? When California Gov. Gavin Newsom announced the state’s troubled high-speed rail project would focus on the Bakersfield to Merced section, connecting two Central Valley locations, many rail supporters felt Newsom was saying the train would never connect to LA or San Francisco.

But, as in just about every other small- or medium-sized U.S. city experiencing a downtown rebirth, opportunity and affordability have drawn many millennials, like Smith, to return to their hometowns and kickstart new businesses. Bakersfield may be starting later than most, but it’s following the same narrative, led by a core group of early supporters and entrepreneurs.

The 17th Place Townhomes helped bring more attention to a newly christened neighborhood, Eastchester, that’s beginning to blossom, and includes restaurants, coffee shops, and new businesses. In this formerly industrial stretch of town, business owners are finding new uses for old buildings, including Cafe Smitten, another Smith project, and Dot x Ott, a just-opened seasonal kitchen that sources its produce from a farm 10 miles away.

Though tiny, the downtown turnaround is palpable, says Debbie Lewis, a wealth manager who moved back to Bakersfield a few years ago.

“The downtown that I grew up hearing about and knew as a young adult was a ghost town that people were hesitant to visit and a place that businesses had a hard time sustaining,” she says. “Now, it appears to be growing at a slow but steady pace and an inspiring amount of businesses have are continuing to decide to take that leap, get creative, and get in on the action. People are starting to see the positive impact of investing more care, money, and time in our downtown.”

While the city’s current growth spurt has been out, not up, as nearby farmland has been turned into housing developments, there are a lot of buildings with good bones downtown, according to Gunnar Hand, an urban designer with architecture and planning firm Skidmore, Owings & Merrill (SOM). Hand led a team that devised a new downtown plan for Bakersfield in 2016, in anticipation of the arrival of high-speed rail. They found the beginning stages of placemaking investments had already laid the groundwork for the nexus of new downtown development.

“This is, for lack of a better term, a third-tier city that’s only now coming around to urban revitalization,” says Hand. “Los Angeles is 20 to 30 years into revitalizing its downtown. Kansas City, [Missouri], my hometown, is 10 years in. Bakersfield is in, like, year one.”

Moving back and making a new start

When talking to Bakersfield residents who left town for college or careers and have now returned as older adults, affordability is a constant theme.

It helps in California to have housing that’s actually affordable. With a median home value of $241,000 as of last March, and median starter homes beginning at just $145,300 according to Zillow, it’s no surprise that the median age of a first-time buyer in Bakersfield is just 33. The city’s sprawling growth pattern has played a big role in creating cheap housing; as the city and metro region grew out, Bakersfield’s population ballooned from 70,000 in 1970 to more than 380,000 today.

According to NAR researcher Nadia Evangelou, these newly arrived millennials can afford to buy nearly 15 percent of homes currently listed for sale in Bakersfield, compared to only 4 percent in Los Angeles.

“Millennials still move to big metro areas such as Los Angeles and San Francisco,” she says. “But we see that they don’t stay in these areas, because of weak affordability conditions.”

The Eastchester neighborhood in Bakersfield.
 Sage Equities

But the real draw goes beyond affordability. Cheaper housing enables many of the Bakersfield boomerangs to buy rather than rent, have a better quality of life, and start businesses, all of which might be unaffordable in other California cities.

For Jessie Blackwell, a cofounder of Dot x Ott, the seasonal restaurant and market just a few blocks from the 17th Place Townhomes, now is the perfect time to open a new kind of business in town. The restaurant, which opened last month, is taking advantage of the region’s wealth of farms and fresh produce in a way that just wasn’t really done here just a decade ago

“There’s a food movement here,” she says. “You can see it in the revitalization of downtown, and the handful of farm-to-table restaurants that have come to town. In the last five years, you’ve just seen this boom in farmers markets and so many more local options.”

Melissa Delgado is a product manager for an agriculture company who returned to town in 2011 after studying in San Diego. She found that the city, with its low cost of living, was perfect for growing her career. With the $2,000 or more she would be spending per month on rent elsewhere, she’s been able to buy a house.

“When I first came back here, I hated it,” she says. “I wanted to go right back to the city. But I’ve been able to grow my career here, and the style of living is just so much better.”

Daniel Cater, an architect and designer who recently returned to town with his wife three years ago, has found great opportunity since moving home (Smith hired him to design the townhome project).

“You’re beginning to see a city of half a million support innovation and change,” he says. “For me, it’s exciting to watch a city that hasn’t really found itself, where the entrepreneurial spirit is alive. It’s fun to be in a place where you can get to know the people making an impact, and make an impact yourself.”

The original SOM plan for Bakersfield would be to connect the city’s historic core, Mill Creek, and forthcoming high-speed rail station. 
Skidmore, Owings, and Merrill (SOM)

Placemaking and the Padre Hotel

Most of the Bakersfield residents interviewed for this story noted that a lot of the new energy downtown comes from people who have returned after moving away, not a flood of new arrivals from other parts of the state or country. There’s still a relatively tight-knit circle of businesses and entrepreneurs in town, often built on local networks. Smith’s dad, for instance, is city Councilmember Bob Smith. And compared to the urban renaissances touted in other cities, Bakersfield’s new developments are not linked to any kind of broad apartment-building boom or big economic expansion yet.

But the catalysts for such change seem to be in place: Two local groups, Kern Economic Development Corporation, a traditional local business group, and Be In Bakersfield, a grassroots nonprofit that promotes new local businesses, have started marketing the city as a place of opportunity.

With some additional investments in transit and placemaking, Bakersfield also has the potential to truly activate its downtown. According to SOM’s Hand, when the firm studied the city in 2016, it found that much of the infrastructure for downtown growth was already finished or in the works. As part of a larger community redevelopment project, Bakersfield developed Mill Creek, a River Walk-style public space and linear park lined with theaters and new businesses. It opened in 2010.

Many of SOM’s suggestions—to create new transit links, connect the city’s already impressive bike lane network, and tie together disparate parts of downtown—have already been done or are in development.

“Our main suggestion was to create infill that brings together Mill Creek with the downtown core,” he says. “That’s already happening now, without the rail station being built.”

In addition to larger urban plans setting the table for more dense development, the successful redevelopment of the Padre Hotel also served as a marker and milestone for downtown. A landmark from the ’20s that reopened in 2010, the ornate hotel at 18th and H streets, a four-star property in the Central Valley, showed many that the city’s stock of old buildings held promise.

“The 17th Place Townhomes and the Padre Hotel are landmark projects for a town this size,” says Hand. “They signal something to the market that didn’t exist before, and it’s starting to snowball. There are local developers taking note.”

A landmark from the ’20s that reopened in 2010, the ornate hotel at 18th and H streets, a four-star property in the Central Valley, showed many that the city’s stock of old buildings held promise. 
TNS via Getty Images

Continuing challenges to building a better Bakersfield

Bakersfield has gained momentum, but it still has a ways to go. Like many Central Valley cities, such as Merced, it’s pushing to diversify economically and build new industries, as well as regain the attention of state government after being ignored for many years.

As part of a larger demographic trend statewide, however, these Central Valley cities have seen more attention from new arrivals. Interior metros like Riverside, Fresno, and Sacramento have seen net domestic migration rise from 2012, when this region collectively lost 4,000 people, to 2017, when 38,000 arrived. At the same time, coastal parts of California have grown at a much slower pace, two-thirds less in 2017 than in 2012.

To capitalize on its growing population, Bakersfield’s economy needs to expand beyond health care, agriculture, and oil, and the region needs to invest in creating a more educated workforce. According to the Brookings Institution, among those ages 25 to 34 in the Bakersfield area, 29 percent are in poverty and only 14 percent graduated from college. The city’s persistent problems with air pollution, some of the worst in the state and nation, give potential residents pause.

“We have historically relied on cyclical industries like oil and agriculture, but the truth is, that’s not the future of where the world is moving,” says Anna Smith, a columnist for the Bakersfield Californian, and Austin’s wife. “We need to diversify, and bringing new minds here who have lived in other places is key to the 21st century.”

Anna Smith, like others, has pinned some hope on Newsom’s commitment to the Central Valley, including high-speed rail and other economic plans. Proposals at the local level, like Measure N, an initiative to revive state-funded community development, and a forthcoming update to the city’s general plan, could help finish out some of the placemaking plans SOM and others have proposed to knit together Bakersfield’s downtown.

“Newsom has the opportunity to show us that he can make connections here,” says Smith.

Coming back to feel more connected

The small cadre of new businesses, and Bakersfield residents returning home, suggests a similar story—like those in places like Memphis, Tennessee, or Louisville, Kentucky—is starting to play out. Bakersfield hasn’t had a downtown boom, at least not yet, but the seeds have been planted.

As Debbie Lewis, the wealth manager, suggests, there’s a hunger among young adults to make a mark on their environment.

“They don’t just want to be one of the millions of people swallowed by social media and all the reminders that we’re broke and don’t have any money,” she says. “All that negativity is pushing people to connect with a place and make a difference, and I think that’s possible here in Bakersfield.”

Or, as Anna Smith suggests, affordability isn’t the entire answer, it’s just the beginning. Without the pressure to pay for increasingly high rents, having more time to focus on passion projects and community engagement makes a real difference.

“If you want to say it’s just about affordable housing, that’s not all there is the Bakersfield,” she says. “Young professionals can come here, start a business, and find lower barriers to entry. Most importantly, they can feel connected to the community and make a real impact.”

https://www.curbed.com/2019/5/14/18618458/california-real-estate-bakersfield-downtown-revival-millennial