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Stockton and other Central Valley cities, best California cities to start a small business

Central Valley Business Times

• It’s ranked fifth in the state, 34th in the nation
• Fresno almost ties with San Francisco

With this being “National Small Business Week” and half of Americans working for small businesses, the personal finance website WalletHub has released its report on “2019’s Best Large Cities to Start a Business.”

WalletHub says it compared 100 U.S. cities across 19 key indicators of startup viability. The data set ranges from five-year business-survival rate to office-space affordability.

Here is WalletHub’s rankings for the California cities itincluded in its report:

• Oakland, 19th nationally
• Irvine, 20th
• Los Angeles

• San Diego, 30th
Stockton, 34th

• Long Beach, 37th
• San Jose, 42nd
• San Francisco, 44th
Fresno, 45th
• Chula Vista, 51st
• San Bernardino, 52nd
• Sacramento, 54th
Bakersfield 56th
• Anaheim, 65th
• Santa Ana, 72nd
• Fremont, 90th

Best vs. Worst
• Toledo, Ohio, has the lowest average annual rent for office space, $11.93 per square foot, which is 6.7 times cheaper than in San Francisco, the city with the highest at $80.22 per square foot.

• Detroit has the lowest labor costs (median annual income), $27,838, which is 4.4 times lower than in Fremont, the city with the highest at $122,191.

• Laredo, Texas, has the lowest cost-of-living index, 77, which is 2.5 times lower than in San Francisco, the city with the highest at 196.

• Miami, Florida, has the most startups per 100,000 residents, 234.72, which is 3.2 times more than in  Winston-Salem, North Carolina, the city with the fewest at 74.40.

For the full report:
https://wallethub.com/edu/best-cities-to-start-abusiness/2281/ – main-findings

https://files.constantcontact.com/2cb20f61601/aec4dc6c-c168-4ded-91e8-1694b4ac9461.pdf

Merced College receives $5 million gift. It’s the largest donation in school history

 

CCVEDC Conducts Annual Mission to State Capitol

For Immediate Release

CONTACTS:

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 and 2: CCVEDC awaits introduction in the CA Assembly. Left to Right, Bobby Kahn, Mike Ammann, Lee Ann Eager, Lance Lippincott, Wil Oliver, Richard Chapman           Photo 3: CCVEDC Board meets with CMTA

March 25, 2019 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. On the list of top priorities for the valley were Workforce Development, Infrastructure Development, Regulatory and Tax Reforms, Opportunity Zone and Tax Incentives. Central Valley priorities were presented in comparison to a list of top site selection factors for business.

“Each year, the CCVEDC Board meets with legislators to discuss mutually beneficial priorities for economic prosperity. This year we were very optimistic after speaking with Valley representatives, the Governor’s Office of Economic Development, and the new Lieutenant Governor. It was a very busy and constructive two days in Sacramento,” according to Lee Ann Eager, Co-Chair of the California Central Valley Economic Development Corporation, comprised of the eight EDC’s from San Joaquin to Ke

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.

 

As manufacturing is a large and still growing economic part of the Central Valley, the role of investing in Workforce Career Technical Education (CTE) has never been more important. CCVEDC supported the  State in continuing to invest and, if possible, increasing investment in Career Technical Training. Specifically, advanced manufacturing, value-added agriculture, logistics, and technology development.

“Workforce and Economic Development in the Central Valley have worked together hand in hand for more than 30 years, leveraging each other to the benefit of business and residents.  The legislators from the Central Valley understand and support the continued investment in this collaborative effort and the positive economic effect produced by this partnership,” stated Lace Lippincott, CCVEDC and CCWC Board Member.

The Central Valley is experiencing significant economic growth and activity. Yet, infrastructure development has been left behind and is needed to attract and grow jobs in this critical transportation corridor. The Central Valley is a prime location for advanced manufacturing, distribution, energy development, water technology among other sectors which support California’s identity as an innovation leader.

“It is important for our state legislators to be aware of the unique issues of the San Joaquin Valley. Water issues effect more than just farming operations, it effects all the other ancillary industries that thrive because of agriculture.” noted Bobby Kahn, CCVEDC Board Member and Treasurer.

Of California’s four million businesses, 3.1 million are sole proprietorships and 87% of companies have 20 or fewer employees. A complex regulatory process creates a significant burden on small businesses, causing many to consider leaving or expanding outside of the state.

“A vibrant entrepreneurial ecosystem in the Valley and the State is vital to the economy. Indeed, a region’s startup activity is a key factor in overall economic growth. It is critical to for these companies to be provided with relief from onerous regulations that hinder future investment and job creation,” according to Richard Chapman, CCVEDC Board member.

According to business, tax credits and other incentives can go a long way toward boosting capital — especially when the project involves job creation or a major capital investment. The new Opportunity Zones program is attractive, but hard to access and understand. Incentives allow manufacturers a chance to recover costs expended for workforce, research and expanding/staying in California.

“We encourage the legislature to conform state tax law to federal tax law treatment of Capital Gains under the Opportunity Zones incentive which will bring new investment and jobs into center city areas in need of redevelopment. Thirty-four other states have adopted state tax conformity provisions, but California has not. The Central Valley is home to over 150 Opportunity Zone census tracts that represent some of the most disadvantaged communities in nation,” stated Mike Ammann, CCVEDC board member representing San Joaquin Partnership.

CCVEDC is a not-for-profit Corporation 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. They are supported by the 8-counties in the Central Valley, Central California Workforce Collaborative, PG&E and Central Calif/Central Mother Lode Regional Consortium (CRC) Partnership.

2018: A GOOD YEAR FOR NEW RESIDENTIAL, COMMERCIAL DEVELOPMENT

A construction crew works on the roof of one of the buildings making up the Californian Apartments under construction in the 5400 block of North Salinas Avenue in northwest Fresno. Photo by David Castellon.

Published On March 18, 2019 – 10:54 AM
Written By 

Back in 2010, as the Valley and the rest of the nation were in the midst of the Great Recession, Mike Miller looked at how badly the crisis had hurt new home construction and worried whether business would survive.

“I’m looking into the future, going, ‘I’m not sure if we’re going to be around in Central California more than another year,’” recalled Miller, vice president of the Central Valley Division of Lennar Homes of California, Inc., which builds new homes from Merced to Bakersfield.

What he didn’t know at the time was the recession was winding down.

By 2011, the economy had picked up enough that Lennar Homes became the top single-family home builder in the Valley. based on permits drawn that year and the estimated combined values of those projects, based on data collected by ConstructionMonitor.com.

And the improvements continued for both the Valley’s economy and Lennar, which for each year after 2011 continued being the Valley’s top single-family homebuilder, drawing 695 construction permits in 2018 valued at more than $188.13 million.

“2018, it was a very good year for us,” though it didn’t match up to new home construction activity during the housing booms before the recession, in the early to mid 2000s, Miller said.

Still, he said of last year, “this was one of the better years since the recession.”

And 2018 wasn’t just a good year for building single-family homes in the Valley.

New construction activity also was strong for multi-family homes and commercial properties, said B. J. Perch, vice president of B. J. Perch Construction, Inc., the Visalia-based builder that bears his father’s name.

“I would say we’ve been on an upward trend, so we’ve been progressively increasing our volume and growing, so it was a good year,” said Perch, whose company ranked first last year in combined permit values for multi-family homes, more than $14.15 million, and second for commercial permits, valued at $20.82 million.

Harris Construction, based in Fresno, was the top commercial builder in the Valley last year, with permits valued at more than $34.73 million. Officials for Harris didn’t respond to an interview request.

“We’re mainly a commercial contractor, so we build health care facilities, corporate offices, industrial [buildings], retail and multi-family,” along with senior living facilities, Perch said.

“We had a significant increase in multi-family. I just think the demand out there [has grown].” Perch noted that his company alone is working on or planning to start work this year on apartment complexes with 700 combined units in Visalia, Tulare and Fresno.

“The demand is there. In

Fresno, there is a lot of multi-family going on, and I think there has been for awhile,” a shift from just a couple of years ago when new single-family home construction dominated the market, he added.

“2018 was one of the busier years we have had for multi-family homes,” he said, adding that he knows of cities in the Valley looking to amend zoning rules to allow more high-density housing and are working with developers to attract such projects.

One fallacy about the local housing market appears to be that the housing demand here is being significantly elevated by an exodus of people from the Bay Area coming here for the cheaper housing.

While it’s true housing in the Valley is cheaper, Miller said the influx here of Bay Area people is small, because it’s too difficult to commute there from here, and it’s still rare to encounter telecommuters looking to buy homes here.

“We have seen that willingness to travel or drive further in our Merced area, but our Central Valley is still mostly operating on people who live here and are continuing to live here, so we aren’t seeing that huge influx from outsiders.”

As good as 2018 was for new construction, it did have its challenges, with both Perch and Miller noting the growing difficulty in hiring skilled construction workers.

“And what happened is when the market crashed, a lot of people left the [construction] industry, and when the market came back, they never came back,” instead going to manufacturing jobs and other fields, Miller said. “Where construction seemed to be a place to go, it seemed to be a place to flee away from.”

In fact, Miler said that the agricultural industry also is facing worker shortages and in response has raised wages to the point that for the first time Valley ag jobs are drawing people away from construction jobs.

That leads to the other big challenge: higher wages for construction workers combined with increasing costs driving up prices for new homes.

In fact, that’s why California becoming the first state to require solar panels in all new homes sold starting Jan. 1 of next year is a major concern among developers.

Miller said he’s unclear how many solar panels will be required on homes as well as whether homebuyers would have to buy the solar panels with their new homes or if buying a house and leasing the panels — or some similar system — will be permitted.

At least here in the Valley, Lennar includes solar with each of its new homes, but if buyers don’t want to buy the systems, the developer has an alternative allowing the systems to be owned by the solar company, with the homeowners buying the power they generate at a discounted rate.

Losing such options could hurt new home development, Miller said, “especially [for] first-time and first-move-up homebuyers, because there is going to be another $15,000-$20,000 worth of cost immediately added to the cost of the home,” and some of them may not be able to afford it or be able to get loans covering the added costs.

“The whole industry is trying to understand the effect it’s going to have on all of us.”

Plastics manufacturing plant bringing 150 jobs to Modesto, relocating from Bay Area

 

The plastic injection molding company JATCO Incorporated is relocating from Union City to Modesto, CA. The plant makes a wide range of plastic products. The company is bringing 150 jobs to the valley, which will begin hiring this month.

AMAZON QUIETLY EXPANDS WITH 2ND FRESNO FACILITY

Published On January 28, 2019 – 10:20 AM
Written By David Castellon

You may not have noticed, but Amazon quietly expanded its footprint in Fresno late last year.

The new facility has likely created upwards of 400 new jobs, as evidenced by a permit filed with the city.

Over the summer, Amazon laid a big, obvious footprint in the city by opening its newly built 855,000-square-foot fulfillment center in the south end of the city, off Central and Orange avenues.

By its sheer size and the large Amazon logo on its front, the building is hard not to notice. But what you many not have noticed is a not nearly as big, nondescript building amid other industrial buildings less than three miles to the north, in the 2300 block of Cedar Avenue.

In front hangs a small banner sign, and you might have to stop your car and get out to read “DELIVERY STATION” across the top with the Amazon logo beneath it.

This delivery station is one of more than 75 the online giant operates around the country, most fairly close to their fulfillment centers as one of the many methods used to get goods ordered from those centers to homes and businesses.

Many of those goods are shipped via the U.S. Postal service and large private shippers, FedEx and UPS among them.

But for shipments that are close to the fulfillment centers where the packages originated or are routed through them, Amazon often trucks those goods to the company’s delivery stations. From that point, they’re sorted and distributed for delivery, either by local package-delivery businesses contracted to do the work or by private drivers contracted to work through Amazon Flex, an Uber-like service in which people schedule their spare time to make $18-$25 an hour delivering Amazon packages using their own cars.

A company official said hundreds of full-time, part-time and contracted people work at the leased Fresno facility but declined to offer a specific number.

The building is owned by Anheuser-Busch wholesaler Donaghy Sales. A development permit filed by Donaghy indicates a 373-stall parking lot is being built at the site.

https://thebusinessjournal.com/amazon-quietly-expands-with-2nd-fresno-facility/https://thebusinessjournal.com/amazon-quietly-expands-with-2nd-fresno-facility/

Winery amid latest growth spurt


December 15, 2018

|John Rieping

John Rieping/The Madera Tribune
From left, Quady Winery controller Doug Dennis, marketing manager Colin Hough, and winemaker Darin Peterson stand in a warehouse built in 1983 and designed by San Francisco architect Stanley Saitowitz and winery founder Andrew Quady.

On April 14, 1984, Quady Winery officially broke ground on phase one of its new facility designed by San Francisco architect Stanley Saitowitz and vintner Andrew Quady.
According to the Madera T

ribune, the new building would allow the family winery to bottle its wines year-round, instead of only in winter and spring, thus tripling output. But it was just the first of several phases planned, and the design of Quady and Saitowitz wouldn’t be fully realized until 1998.


Now the winery is more than halfway through a new series of expansions that may be complete as early as 2021.


“We’re in year three of a five-year expansion project where we’re growing the winery from roughly 70,000 cases to 160,000 cases” of annual production, said Doug Dennis, controller of the winery.


“We were about 110 (thousand) last year,” explained marketing manager Colin Hough. “We did about 130 (thousand) this year.”


“And even more next year,” predicted winemaker Darin Peterson, who said 85-90 percent of the grapes used in the wines are Madera grown, though some grapes come from as far away as Manteca.


“Obviously Darin has his work cut out for him making the wine, finding the grapes, and maintaining the rigorous standards that we have,” said Hough about the rapid growth. “And that’s of utmost importance to us.”


This year, the winery finished building a 22,000-square-foot warehouse. Rather than emphasize “visual impact” as with the winery’s earliest expansion, the trend now is using technology “to make a huge impact on how productive the business is,” Dennis said.


To beat the heat, the new warehouse is covered in 500 white panels that are each four inches thick, and beside it sits a “heat exchanger” with about 28 times the cooling capacity of a typical home air conditioner, as estimated by the U.S. Department of Energy.


Part of the warehouse holds 350,000 gallons of moscato wine in towering metal tanks, and is cold enough to develop indoor fog on rainy days. “You could not see the ceiling it was that foggy,” said Dennis. “I’m not exaggerating.”


The tanks are individually temperature controlled.


“The whole goal is to keep stuff stable, chilled and under control” for slow fermentation, said Peterson. “The consequence of that is this whole thing draws down” temperatures inside and outside the tanks, “and eventually the chilling power of the (ammonia) glycol (cooling) system will keep the rest of the building cool as well.”


The winery may add three more wine tanks in the next few years, resulting in about 360,000 more gallons in capacity.


“The (180,000 gallon) tank we’re putting outside is basically 32 feet in diameter by 35 feet tall,” said Dennis. “It will dwarf these” indoor tanks. “As soon as the weather breaks and we get a few dry days, we’ll start on the foundation. It will probably be serviceable in a March-April time frame.”


Not yet finished, the warehouse will eventually feature five offices, a laboratory, a cafe-like break room, a conference room, restrooms, and an observation deck.


The Quady family has tried to make its latest expansions “green,” according to Dennis. The LED lighting of the warehouse only consumes about 500 watts, he said, and office area sensors will adjust light intensity based on “whether someone is in the room, how bright it is outside,” etc. Photovoltaic solar cells able to generate 300 kilovolts sit on winery buildings to help power the facilities. In the future, a Tesla Powerwall to store energy may be added, which would allow the winery to be more electrically self-sufficient.


All the recent expansions are, of course, not without cost.


“It’s a pretty big, seven-digit investment,” Dennis said. “I think this building, when it’s completed with the tanks, will be $3.5” to $4 billion.


Dennis said they’re looking forward to putting the current expansions behind them and enjoying the benefits.


“A project of this scope is not for the faint of heart … It’s a dance that you really have to do,” he said, “and it has to be well orchestrated and coordinated, especially to do it in a timely fashion as we’re finding out three years into the expansion project.”

http://www.maderatribune.com/single-post/2018/12/15/Winery-amid-latest-growth-spurt

New fertilizer plant opens in Turlock

Central Valley Business Times

• Darling Ingredients plant to make organic fertilizer

• Will target California and other Western markets

An organic fertilizer production facility is being opened inTurlock by Darling Ingredients Inc. (NYSE: DAR) of Irving,Texas.The facility is located on a 21-acre site and will have the ability to make 35,000 tons of fertilizer a year. It will be marketed under the brand name Nature Safe Natural & Organic Fertilizer.The new plant will also provide 4,500 tons of storage capacity to meet the needs of organic growers operating in California and the West. the company says.

Darling has been making its organic fertilizer at its original Henderson, Kentucky, plant since the early 1990’s, where it will continue to produce for customers in the rest of the country. The company says the strength of the organic fertilizer market in the western U.S. has it working on plans to double the new Turlock plant’s production capacity by end of year 2019.

The company is focused on a growth strategy in California where it can leverage Darling’s diverse supply of animal feed ingredients, says Mike Manning, Darling’s vice president of organic fertilizer and innovation. With long-established rendering facilities in Los Angeles, San Francisco, Fresno and Turlock that produce feather meal, blood meal, and meat &bone meal, the company is able to produce the high quality organic fertilizers with cost-effective proficiency, he says.

When the new Turlock plant begins production in January, it will bring on a new management team. West Regional Commercial Business Manager Dan Rodriguez will develop go-to-market strategies. Kevin Van Dewark has joined Darling Ingredients as plant manager for the new Turlock fertilizer plant, and Mayra Pena will be its new office manager.

https://files.constantcontact.com/2cb20f61601/6163f145-feb6-4eac-92f4-3a0b89e1b400.pdf

UC Merced is ‘University of the Year’

UC Merced Education Dive

Credit: UC Merced

UC Merced has been selected as Education Dive’s “University of the Year.”

UC Merced is no stranger to innovation and disrupting traditional modes in higher education.

Whether it is funding the university’s Merced 2020 Project through an unprecedented, award-winning public-private partnership or making a University of California education accessible to first-generation and underrepresented students, UC Merced has established itself as a top-notch university.

These efforts have led Education Dive to name UC Merced “University of the Year” in their 2018 Dive Awards. The awards are designed to honor the industry’s top disruptors and innovators.

“We are honored to have been selected as University of the Year and appreciate the recognition of being an innovator in higher education,” Chancellor Dorothy Leland said. “Building the future in the heart of California continues to be our mission, and I am excited for what is in store for the university.”

Winners were chosen by the editors of Education Dive based on resonance and industry impact. The digital news outlet solicited suggestions for nominees from its nearly 180,000 readers.

“The newest University of California campus is no underdog,” said Hallie Busta, editor at Education Dive: Higher Ed. “With a massive expansion underway and continued improvement in student outcomes, it has moved quickly to give the system solid footing in the state’s Central Valley.”

UC Merced is in the midst of a $1.3 billion expansion project that will double the size of the campus. Phase 2 of the three-phase Merced 2020 Project opened in August, with two new residence halls providing 700 new student beds and first-floor classrooms, a 600-seat multipurpose dining facility and a soccer field. Phase 2 will be completed in Fall 2019 and the final phase, which includes a conference center, a Biosafety Level 3 lab to study infectious diseases, and a competition-level swimming pool, among other buildings, will be unveiled in Fall 2020.

UC Merced’s student population includes more than 73 percent who are the first in their family to attend college — double the national average and by far the highest of any UC campus. Nearly 55 percent of UC Merced’s students are Hispanic, and nine in 10 students receive financial aid. Earlier this fall, UC Merced ranked second in the nation in outperforming expected graduation rates by U.S. News and World Report.

2019 REGIONAL ECONOMIC FORECAST: FRESNO COUNTY


An aerial view shows two current buildings at the Gap campus near Fresno Yosemite International Airport.

Published On November 23, 2018 – 7:00 AM
Written By Gabriel Dillard

By nearly every metric — employment, wages, farm receipts, home prices, construction — 2018 proved a banner year for Fresno County’s economy.

And in the opinion of economists, economic development professionals, industry advocates and more, the good times are expected to continue into 2019, even though a number of negative factors may loom over the horizon.

In Fresno, 2018 was a pivotal year that saw California’s fifth-largest city join the ranks of other e-commerce hubs. Fulfillment centers for Amazon and Ulta came online, bringing Mayor Lee Brand even closer to his goal of creating 10,000 jobs in two terms.

Gap was another large acquisition for Fresno. The San Francisco-based retailer announced it would locate an e-commerce fulfillment center in Fresno at its existing campus near the Fresno Yosemite International Airport. The decision will create at least 515 full-time employees and generate $80 million in capital investment.

While the Gap distribution center will ramp up over three years, the move has already proven fruitful in the jobs department. Gap last month announced plans to hire 1,127 seasonal workers in Fresno

There are also some bright spots when it comes to the development of more shovel-ready industrial land, which has been a problem for site selectors in the past. The 63-acre Palm Lakes Business Park near the airport recently welcomed its first tenants. Closer to the Amazon and Ulta sites in south Fresno, Caglia Environmental’s proposed 110-acre industrial park won council approval this year, but still faces a challenge to its environmental impact analysis.

While continuing to market to e-commerce operations, Fresno economic developers are shifting their sites to tech companies that may be considering moving some of their operations out of the expensive Bay Area. Larry Westerlund, Fresno’s director of economic development, recently said in a public talk that closing the skills gap with our local workforce would net the well-paying jobs Fresnans hope for.

Speaking of technology, Clovis— Fresno County’s fastest growing city — should next year see a major new project at its Research and Technology Park near Temperance and Alluvial avenues. Construction for the College of Osteopathic Medicine in Clovis started this year. As part of California Health Sciences University, the 100,000 square foot facility would be the Central Valley’s first medical school when it is finished by next year, with classes set to start in 2020.

Clovis Community Hospital is also expected to start adding additional facilities next year. More industrial space is also primed next year for the Clovis Industrial Park and Dry Creek Industrial Park.

“It’s really encouraging to see that commercial industrial demand going in Clovis,” said Andy Haussler, Clovis economic and community development director.

Fresno County farms continue to comprise one of the most valuable farming areas in the world, though a number of factors justify calling the current market conditions “stable,” said Ryan Jacobsen, CEO and executive director of the Fresno County Farm Bureau. Water supplies and labor availability have been perennial issues, but now tariffs on crop exports to countries such as China add a new layer of concern. 

One of the Valley’s top crops is the prime focus of those tariffs, and a potential source of pain in a protracted trade war.

“Nuts leads the list, but there are many others. Fresh fruits, vegetables and milk are not far behind,” Jacobsen said. “We haven’t felt the ramifications yet, but we don’t know how long this issue will continue to go on, or if it will get worse before it gets better.”

High-speed rail construction activity will continue in Fresno County in 2019, and Lee Ann Eager, president and CEO of the Fresno County Economic Development Corp., is bullish on the county’s chances of landing a rail heavy maintenance facility. She recently said she has heard rumbling the site could be chose in early 2019. It would add an estimated 1,500 new jobs, which is why bid packages from areas around Chowchilla, Madera and Hanford are also in the running.

The small communities along Highway 99, such as Fowler and Selma, continue to see new development that should stretch into 2019. Eastside communities including Sanger, Reedley and Parlier are also seeing activity. Impoverished Westside communities continue to face challenges, but the recreational pot industry has created bright spots in communities that have welcomed it, namely Coalinga and Mendota. Cannabis-related industrial development will ring in the New Year in those towns.

A potential market slowdown does weigh on the minds of economists and economic developers, some of whom — namely in Fresno — have described a rush to build to beat a downturn. Haussler with the City of Clovis has a background in economics and calls himself a “armchair Wall Street Journal reader. He thinks 2019 will continue to see the good times roll.

“I’m seeing a lot of projections coming into fruition,” he said. “I’m pretty bullish.”

But, he added, 2020 may be a different story. It’s just too far out to know for sure in this time of uncertainty.