Picking region’s top stories
The 2012 business climate proved once again that Stanislaus and San Joaquin counties are bound by common economic backgrounds, fluctuations and interests.
Agriculture and all that goes with it – from growing to processing to shipping – remains a dominant component of the economies in both Central Valley counties. The region’s wine industry continues to grow exponentially.
But Stanislaus and San Joaquin counties are more than ag counties. Improved highways through public projects, an expanding intermodal facility, an ecommerce giant building a new facility, and the Marine Highway barge system all re-enforce the region as a logistics hub for the state. Construction of a prison health care facility near Stockton and a state-of-the-art nut processing plant in Turlock each bring short-term construction jobs, but also long-term stable work once the facilities are completed.
Here we will look at what government officials, economic development leaders and economists see as the top-five stories in each county for 2012.
San Joaquin County Review
President and CEO, San Joaquin Partnership
Mike Ammann is the president and CEO of the San Joaquin Partnership, an economic redevelopment agency that works to bring businesses to San Joaquin County and the region, and keep those already here.
While the city of Stockton bankruptcy is ongoing “and will probably be one of the top business stories in 2013,” Ammann said the Partnership, city of Stockton staff, and elected officials “have been successful in selling a bankrupt city. Even with the bankruptcy, the private sector is growing and new investments have occurred during 2012.”
He also said the Union Pacific Railroad intermodal expansion, the construction of the California Health Care Facility, and DTE Energy’s $100 million energy plant expansion at the Port of Stockton will lessen the negative impact of the planning commission’s rejection of a project to expand University of the Pacific student housing.
“A $20 million construction in downtown Stockton would have provided a lot of jobs beyond the construction work,” Ammann said of the project.
Ammann’s top-five stories of 2012:
1. Stockton’s bankruptcy
2. Union Pacific Manteca intermodal expansion
3. California Health Care Facility
4. Planning commission rejects Pacific’s $20 million student housing expansion
5. DTE Energy plant construction at Port of Stockton
Douglass Wilhoit Jr.
CEO and president, Greater Stockton Chamber of Commerce
For Douglass Wilhoit Jr., president and CEO of the Greater Stockton Chamber of Commerce, the top-five stories for 2012 include three that bring work and hope to the county and two that combine to stifle the improving economy.
“Agriculture is vital to the continued financial health of the county,” Wilhoit said of the industry that generated $2.2 billion in San Joaquin County in 2011. “The Marine Highway will open Stockton to more trade, and the prison medical facility’s hiring process has begun, which could mean not only thousands of jobs, but more home sales as employees move into the area.”
He cautioned that public, city and county officials need to be aware that the state Legislature “has stolen funds locked in for other uses, such as redevelopment, and will continue to divert funds legally belonging to counties and cities to pay off California’s debt.”
Wilhoit said Proposition 30 funds can be used for whatever the Legislature decides with no guarantee the money will go only to schools.
Wilhoit’s top-five stories for 2012:
2. Marine Highway
3. California Health Care Facility
4. Stockton’s bankruptcy
5. State Legislature diverting funds
President and CEO, Lodi Chamber of Commerce
A proposed San Joaquin County ordinance that would restrict events at wineries due to noise, parking overflow, and congestion at winery hot spots where multiple events were happening simultaneously took a top spot for business news in 2012 for Pat Patrick, Lodi Chamber of Commerce president and CEO.
Patrick is a member of the Wine Ordinance Task Force, or WOTF, which was created to study the situation and develop workable solutions to satisfy wineries and their neighbors.
“The 26 members came up with solutions within 60 days, which was the time allotted by the county Planning Commission.” said Patrick. “We presented our plan Nov. 1 and I’m confident the work we did will provide the balance needed for local wineries to hold events.”
He said the unrestrained Democrat Party supermajority will “come after Proposition 13, pass monumental tax increases, push to implement card check, and will cause unprecedented costs for business. The Hostess collapse could well become the norm for businesses in California.”
The California Health Care Facility near Stockton could cause “an upheaval in the health care sector” he said, due to the state paying “a 30 percent premium, which will draw health workers – including doctors – away from their current jobs in local hospitals and clinics.”
Patrick’s top-five stories for 2012:
1. Wine Ordinance Task Force
2. Democrat Party’s legislative supermajority
3. California Health Care Facility
4. Marine Highway
Dr. Jeffery Michael
Director, University of the Pacific’s Business Forecasting Center
The top stories for 2012 for Jeffery Michael, director of the University of the Pacific’s Business Forecasting Center, represent good news combined with Stockton’s bankruptcy.
“It’s still possible to bring businesses here, but it’s difficult to restore confidence in the community,” Michael said.
“However, the prison medical facility will provide jobs and encourage people to move into the area.”
Michael said that if Stockton cannot improve law enforcement “people will live in areas convenient to working in the Stockton region,” something that will not benefit Stockton, but good for the county as a whole.
Michael said agriculture in San Joaquin County generates $2.2 billion annually as a “base activity that supports a value added stream worth additional billions” and the Marine Highway, while a significant project, “has been somewhat overhyped. It provides new shipping capability, but it remains to be seen how big it will eventually be.”
Michael’s top-five stories for 2012:
1. Stockton bankruptcy
2. California Health Care Facility
4. Transportation investments
5. Marine Highway
Executive Director, San Joaquin Council of Governments
“The continued housing industry recession’s been relieved somewhat by some improvement in the commercial and industrial sectors,” said Andrew Chesley, San Joaquin Council of Governments’ executive director. “And the infrastructure jobs and work on (Interstate 5) in Stockton will continue for years to come.”
Chesley’s bright spot is Manteca.
“Its development and building permits lead the county,” said Chesley.
Unemployment has decreased slightly, but that isn’t “something to get too excited about,” said Chesley, who praised “the continued growth of (Pacific’s) Business Forecasting Center. Its rigorous analysis goes with what we’re trying to accomplish.”
Chesley’s top-five stories of 2012
2. Infrastructure work
4. Pacific’s Business Forecasting Center
5. Manteca as a bright spot
Stanislaus County Review
Interim Executive Director, Stanislaus Council of Governments
“From the (Stanislaus Council of Governments) perspective, the top business stories of 2012 include those that have an impact on the economic vitality of our region,” said Carlos Yamzon, Stanislaus Council of Governments interim director.
His first choice brings together two major projects: Amazon building a distribution hub in Patterson and Blue Diamond constructing an almond processing plant in Turlock.
“These were good news to the region and should help improve the jobs/housing balance,” Yamzon said.
A $90.2 million project to resurface and restore state Highway 99 began in the spring and will continue into 2014.
“Improvements to our infrastructure that provide better goods movement, transportation arteries, create jobs, and have an impact on the economic vitality of our region,” he said.
Construction for a $37.1 million interchange project for state Highway 99 at Kiernan Avenue is set to begin in early 2013 with funding from Proposition 1B. Yamzon said the project should “relieve congestion, improve the movement of goods, improve air quality, and enhance the safety and security of the transportation system.”
The Moving Ahead for Progress in the 21st Century Act, or MAP-21, is a federal transportation bill signed into law in 2012 authorizing $105 billion for the 2013-14 fiscal year for surface transportation programs, which “affects funding for many projects in our region,” said Yamzon.
He also said the 2012 election “will have lasting business impacts.”
Yamzon’s top-five stories of 2012:
1. Amazon in Patterson and Blue Diamond in Turlock
2. State Highway 99 resurfacing and restoration
3. $37.1 million for state Highway 99/ Kiernan Avenue interchange
5. 2012 election
CEO and president, Modesto Chamber of Commerce
Cecil Russell, Modesto Chamber of Commerce president and CEO, chose the economy as his No. 1 business story with unemployment a close second.
“In fact, they’re closely linked and both are ongoing issues,” Russell said.
The West Park Project at Crow’s Landing has been in limbo.
“It’s disappointing that it was suspended,” Russell said of the project.
He said it could have created thousands of jobs in Stanislaus County and had the potential of exports to Asia, manufacturing, a solar farm, and creating ancillary jobs.
But all hope is not lost as the project is expected to be re-bid.
Russell agreed with Yamzon that the Amazon “fulfillment center” to be built in Patterson and the planned Blue Diamond plant in Turlock were among the top-five stories in Stanislaus County for 2012.
Russell’s top-five stories of 2012:
3. Blue Diamond in Turlock
4. Amazon facility in Patterson
5. West Park Project in Crow’s Landing
CEO and president, Stanislaus Economic Development and Workforce Alliance
The Stanislaus Economic Development and Workforce Alliance oversees economic development and workforce training activities in the Stanislaus River Valley and focuses on job creation, business assistance and workforce preparation activities.
“Blue Diamond’s decision to locate their new state-of-the-art almond processing facility in the Turlock Regional Industrial Park and Amazon’s decision to locate a 1 million-square-foot fulfillment center in Patterson,” Bill Bassitt, CEO and president of the Alliance, said of the top stories in Stanislaus County.
He also pointed out that the Alliance’s StanTogether campaign to fill 1,000 jobs over a six month period “actually led to 1,306 fulltime new jobs.”
The business and economic climates are looking up, said Bassitt, what with the Stanislaus County Board of Supervisors resetting the West Park inland port project and economic indicators showing a gradual improvement.
“We have the lowest jobless rate in four years, housing prices are up with the median price well above the previous lows, a reduction in the number of foreclosures throughout the county, and housing inventories are at an extreme low volume, less than 30 days according to some realtors,” he said.
Bassitt’s top-five stories of 2012:
1. Blue Diamond in Turlock
2. Amazon in Patterson
3. StanTogether campaign
4. West Park inland port reset
5. Improved economic indicators
Dr. Gökçe Soydemir
Professor of Business Economics, California State University, Stanislaus College of Business Administration
The improving housing market is stabilizing “sooner than people thought and the 2012 numbers are better than 2011 and 2010,” said Gökçe Soydemir, the Fosters Farms endowed professor of business economics for the California State University, Stanislaus College of Business Administration.
Soydemir also put Amazon fulfillment center being built in Patterson in his top-five business stories for a number of reasons.
“First, it brings jobs to the region and will have a direct economic impact through 1,500 jobs,” said Soydemir. “And second, the indirect effect will positively affect ancillary businesses and will influence the region with jobs and sales tax receipts.”
“Agricultural values have been very impressive and this is an ag community,” he said. “The Central Valley compares very favorably with other ag counties in the state and even nationally.”
Stanislaus County’s agriculture was valued at more than $3 billion in 2011.
“The high-speed rail project is very exciting for all of us,” Soydemir said. “People are skeptical, but this is a step in the right direction for improving the transportation infrastructure and it will have a much larger influence than just direct impact.”
He said the ripple effect of high-speed rail will “bring other businesses to the Central Valley, and influence the region by bringing jobs, other businesses, and increased sales tax receipts.”
Soydemir’s top-five stories of 2012:
1. Housing market comeback
2. Economic indicators improving
3. Amazon in Patterson
4. Agriculture value remains high
5. High-speed rail