Friday, March 14, 2008

High Desert Economic Summit and the High Desert Corridor - Summary


Yesterday I attended the 9th Annual Red Cross High Desert Leaders Economic Summit, which is an annual meeting to discuss issues relevant to the High Desert region of the Inland Empire. The High Desert includes Victorville, Hesperia, Adelanto, Apple Valley, & Barstow.

Here is a list of my notes from the meeting:

Brad Mitzelfelt, the San Bernardino County Supervisor, gave some interesting statistics for San Bernardino County:

  • San Bernardino has a population of around 2 million, slightly less than Riverside County.
  • Significant new developments include the SCLA (Southern California Logistics Airport, 8,500 acre master planned industrial park in Victorville being put together by Stirling Capital Investments) and the Apple Valley Airport.
  • Foreclosures in San Bernardino are the 3rd highest in the state.
  • The film and motion picture industry contributes $37 Million to the San Bernardino County economy.
  • Still trying to get funds for the High Desert Corridor

The High Desert Corridor was the most significant local issue that was addressed at the conference since it directly impacts industrial development and traffic congestion, two of the largest issues facing the high desert region.

Below is a video that was put together by a group of citizens to raise awareness of the project. It is 7 minutes long; The production is pretty sharp and is a good primer to the development issues and implications of the transit corridor.

Larry Sharp from Arrowhead Credit Union gave a presentation from a local finance perspective. I learned that real estate loans typically follow the 10 year bond + 1.75%. The Fed Funds Rate, which is the tool the Federal Reserve uses to control the economy, isn't related to the 10 year bond. So it looks like we may be in for some tough times yet.

The Economic Stimulus bill doesn't hold much promise for consumers, but there are some interesting things in there for businesses; 50% depreciation in the first year (including leases).

Residential real estate remains a blight, and with a 37% decrease in home sales in Riverside County and a 53% drop in San Bernardino County, lenders are worried about sites such as

Adelanto, Apple Valley, Barstow, Hesperia and Victorville, talked about some recent developments in their communities, notably retail developments and large master planned industrial parks. Hesperia is offering some pretty darn good incentives to get development.

The Mojave Water Agency basically said that everything is ok. The High Desert gets 100% of its water from ground sources. The Delta Canal Study had some troubling implications, but it is good to have a strong agency willing to work with the local governments. California doesn't have enough water, but the High Desert will be fine, due to how the resources are currently allotted but cities like Long Beach are going to run into trouble.

Larry Kosmont, from the Kosmont Companies, gave a presentation on the attractiveness of doing business in the High Desert. Awhile ago I created a map showing the Kosmont rating of various cities.

Steve Johnson from Metrostudy, gave a detailed presentation on the housing market in the High Desert.

John Husing closed the event with his summation of current market conditions and a rather hopeful view of the future. I was honored to finally meet Dr. Husing in person.

I could go into greater detail, but presentation slides will be made available soon and I will link to it when that happens.

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