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AV News Briefs - By Frank Donato
 

Frank Donato is a long time Valley Resident and Businessman, and a V.P. Account Manager for Fidelity National Title. Frank currently serves as A.V.E.K. Water Board Director (since 1987), and has served as A.V. Fair Director (1997-2001) and North County General Plan Advisory Council Member (1981-1986). Frank is also a Wine Grape Grower and Consultant and Owner/Partner of Antelope Valley Winery. We thank Frank for sharing his knowledge and unique perspective on current issues!

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Second Quarter 2009 Antelope Valley News: April May


April 2009

April 8-  Architectural drawings and other information re: the proposed west Lancaster Wal-Mart, to be located at the NWC of 60th St West & Ave L, were put on display for public information at Antelope Valley College.  The purpose of the display was to give the general public a view of what the 40 acre site would bring to the west side.  The planned store will be 220,000 sq feet with an arched roof and will be designed like no other Wal-Mart in the country.  The store will be “ringed” with other retail outlets and restaurants.  The store should produce 400 long term jobs.  The front of the store will face the east, 60th St West and extend as far north as Ave K-12.  Infrastructure improvements to the area include:  widened streets, medians, turn lanes, traffic lights will be installed, larger water lines, and storm drains.  A portion of the parking lot will be paved to test a new pervious surface that allows water to seep through instead of running off.  The Wal-Mart store will also have numerous green features that will make it efficient and reduce its effect on the environment.

April 9- Palmdale Mayor, Jim Ledford, tells a group of 100 business leaders at the Palmdale Chamber of Commerce, that Palmdale’s immediate future growth will center around three main events:  the opening of the new Palmdale Regional Medical Center, the opening of the city’s new Business Conference Center and its surrounding hotels, and opening of an additional NASA science office at site 9 at Plant 42 in Palmdale. The Mayor also took the opportunity to ask the Palmdale public to vote yes on Measure A on the May 19 election.  Measure A would raise the room tax on hotel stays from 7% to 10%.  Ledford said, “Without passage of the tax, a $3M city budget deficit will be $4M.”  Recent public hearings have Palmdale residents, at least the ones that showed up at the hearings, in favor of more taxes and or user fees to keep many of the city’s services up and running.  Many of these services are recreational in nature, not essential.  Even with a room tax of 10%, Palmdale would still be below many other major cities:  LA, Santa Monica, and San Francisco are at 14%.  Anaheim is at 15%.  Palm Springs is at 13.5% and Barstow, located on the Fwy 15 on the way to Las Vegas, is at 12.5%.  While an additional $3 per a $100 room will probably not deter anyone from visiting Palmdale, it does put Ledford on the same level with every politician in this state; Ledford is seeking to raise taxes in lieu of cutting spending to balance the city budget.  At the state level, it is even worse, as the state is raising taxes and borrowing, to balance its budget, acting like the federal government.  The State of California is required by its Constitution to have balanced budgets every year.  A decision by the Cal Supreme Court though, ruled several years ago, that Cal may borrow to legally balance its budget.

April 14- Smart & Final opened up their new west Palmdale Smart & Final Extra! store, located in the Palmdale Marketplace, along 10th St West, south of Rancho Vista Blvd (Ave P).  The new store has 29,000 sq feet of floor space as compared to chain’s average space of 17,000 sq ft.  The Extra! Stores carry an additional 4,500 items that the smaller Smart & Finals don’t.  The Extra! stores carry an expanded product lines, i.e., frozen foods, dairy, deli, basic groceries, baby food, diapers, & health / beauty supplies. The new Extra! store is located in the space vacated by the bankruptcy of Linen N Things.  Smart & Final operates 300 stores, with their first one opening in downtown Los Angeles in 1871.  The typical Smart & Final employs 20, while the Extra! stores employ nearly 100.       

April 16- Beacon Solar LLC, which has an application in with the state for a 250 megawatt solar plant in the California City area, says that their application has run into a road block.  Beacon’s application has them using fresh groundwater to cool the plant, but the state requires recycled water.  The state has offered up several alternatives to fresh groundwater, but Beacon is arguing that those alternatives are not feasible for their project.  The solar plant would be located on 2,000 acres on Hwy 14 about 4 miles north of California City Blvd.  Due to the state’s water shortage, the state does not allow drinkable, potable groundwater to be used for the cooling of plants.  The state has suggested that Beacon change their solar technology to allow “dry cooling” or use brackish water from a lake 5 miles away.  Dry cooled technology would cost more and push up the utility prices to the end user to a level not acceptable.  Beacon also says that the nearby lake is a clay aquifer, making the removal of water infeasible.  The Beacon site used to be used as an alfalfa farm, but halted in the mid 1980’s.  Beacon says they need 1600 acre feet of water per year to operate their plant as submitted.  Beacon says they will revisit their application, but if they can’t make it work the 2,000 acres would revert back to farm land or be used as a water bank.  Beacon’s application calls for 1,000’s of mirrors to track the sun and reflect its heat on a series of tubes.  Liquid in the tubes would be heated by the sunlight and in turn used to power a steam turbine which would produce the electricity.

April 17- The long waited Veteran’s Home in west Lancaster near completion as it is about 80% done.  Residents could be moving in within a few months.  The Vet’s home is named after William J. Pete Knight, the late State Senator and test pilot, and one who lobbied hard over the years for this facility.  When completed, the Vet’s home will house 60 elderly and disabled veterans and provide daytime health & social care for 50 more.  To qualify to live there, a Veteran must have served honorably and be 62 years old.  If a Veteran is disabled, they can be younger than 62.  The week this was written, workers were putting up drywall and painting.  The site has 12 380 sq ft rooms for singles, and 24 rooms that are 500 sq ft each for veteran couples and or spouses.  Living quarters are divided into two wings, with each wing housing 30.  Each wing has a laundry facility and lounge area, with one wing having a library and the other wing having a recreation room.  The two wings are joined by a central dining room which includes a fireplace.  A daily menu will be provided, with different meal choices. Special dietary needs can be monitored.  An adjoining courtyard can be used for barbecues and other outdoor events.

April 20- Assemblyman Steve Knight of Palmdale, has submitted a two legislative bills to entice solar companies to come to California.  One bill would make it less expensive in California to manufacture solar panels, the other bill would offer a sizeable tax break to companies that relocate their corporate HQ in California and hires at least 30 people, providing a tax credit of $3,000 to $5,000 per employee.  Knight says that other states have had success with similar legislation.  The bill has its first hearing in the Assembly Committee on Revenue and Taxation next month.

April 21- The Lancaster Redevelopment Agency has approved $515,900 to acquire 9 homes that are in foreclosure. Since April 2008, the Redevelopment Agency has purchased 110 homes under the Neighborhood Foreclosure Preservation Program.  The program was designed to buy, rehab, and the resell foreclosed homes in high crime areas, homes of excessive code violations, numerous Section 8 rentals (in foreclosure) .  The homes are resold to qualifying low income and moderate income buyers.  Thus far, the Redevelopment Agency has spent $9.6M on such houses.

April 22- Cal State University Bakersfield announces they will expand their course offerings in the AV through their satellite campus at Antelope Valley Community College.  Courses of study that will be added are:  master degree programs in public administration, special education, educational administration, and educational curriculum and instruction.  Also in education, post-bachelor credentials may also be earned in elementary, secondary, and special education.  A full load for a full time student will cost $3,700 per year, a bargain when considering the cost of attending private universities or even attending another state funded school that is outside the Antelope Valley.

April 24- Mark Schniepp, director of the California Economic Forecast, says, that while 2009 will continue to see jobs contract in the AV, 5,000 new jobs will be created in the AV over the 5 year period beginning in 2010. Schniepp says that the unemployment rate in the AV will hit 13% by 2010, but then start to fall as jobs are created.  Schniepp added, “By 2011 the recovery will pick up with nonfarm growth projected to be +3.2%.  The 5,000 new jobs over the five years imply an average growth rate of +1.4% annually.  During the 2010 to 2013 time period, both construction and retail should have a good bounce up.  We also expect to see 19,000 new residents to the AV between now and 2012, and 3,000 more in the Kern County portion of the AV.  That will require 5,000 to 6,000 more homes in the Lancaster - Palmdale areas and a 1,000 more in the Kern County portion of the AV.”  Job creation is a lagging indicator, meaning that the economy will first start to improve, creating the need for more workers, and then the new hiring will take place.

May 1- According to a recently completed census, the City of Palmdale grew +3.5% in 2008 and now has a total population of 150,346.  In the category of mid-sized cities, those of 300,000 or less, Palmdale is ranked number 1 in the state.  Eight miles north, the City of Lancaster grew +1.1% in 2008 and now has a total population of 145,074. Also in 2008:  California City grew +3.5% to 14,828, Tehachapi climbed +4.4% to 13,631, the City of Los Angeles grew by 43,000 to 4,065,585, and the entire population of Los Angeles County came in at 10,393,185.

May 4- Those in favor of the new proposed west Lancaster Wal Mart picked up a very vocal and powerful ally: Lancaster Mayor Red Parris.  Parris’s primary reason is financial.  If the west Lancaster store is not built, those shopping dollars will continue to go to the west Palmdale Wal Mart with the tax dollars going to the City of Palmdale, NOT Lancaster.  With all City budgets strapped by the recession, the amount of money the Mayor is talking about is substantial, $1.2M per year.  That money could be used to provide more public safety coverage for Lancaster citizens.  The mayor went to say, “While I am not happy with the location, across the street from Quartz Hill High School, it would be totally irresponsible for us not to recognize the financial consequences if we don’t approve the center.”  Parris is correct in one respect; just one mile from the new proposed Wal Mart is an area of west Palmdale that has the highest incomes and household net worth in the AV.  It would be much easier for the residents in this west Palmdale area to drive to the new proposed Wal Mart, then to go all the way into town to the nearest Wal Mart at 10th St West and Ave O-8.  We are talking about driving 1-2 miles vs  driving 4-6 miles.  Objections to the center are the usual, increase in traffic, auto smog pollution, congestion, possibly more crime, distraction to high school students, wouldn’t park be better etc.  The Wal Mart, if approved, will be on the 40 acres at the NW corner of 60th West & Ave L.  For the SW corner of the same intersection, a Target store has been proposed on 35 + acres.  Another objection, for some in the grocery business, is that a new Super Wal Mart in this location would put some competitive pressures on west Lancaster and west Palmdale markets, i.e., Vons and Albertsons.  Wal Mart is the largest retailer in the world and their buying power to buy items in bulk, to get a lower price so they can sell at a lower price, is unmatched.  To compete with Wal Mart, one has to move away from price and offer superior quality.  Target, in their clothing line, has had some success with this strategy.    
                                             
AV Aerospace & Defense

Site 9, at Plant 42 in Palmdale has a new tenant.  NASA Dryden Aircraft Operations Facility will open a satellite facility at Site 9, with their main facility at Edwards Air Force Base, called Dryden Flight Research Center.  The site will be used by the space agency’s science missions, including cutting edge astronomy and environmental studies.  Site 9 is the former site where the B-1 bomber was built by Rockwell and later, in 2000, was the home of Swiss Air’s SR Technics, which went out of business in 2002 due to the resulting recession in the airlines industry, post 9-11 in 2001.  The Site 9 hangar was dedicated for its new tenant on April 9, 2009. 
The facility will eventually house 200 employees, depending upon the type of science mission, as researchers come and go.  With the facility located outside of Edwards Air Force Base, visiting international scientists have easier access to the various research programs.

Obama’s first defense budget will be in the area of $534B, a rise of $21B versus Bush’s last defense budget. However, the “deck” will be shuffled and priorities will be different.  Some programs will be cut, and 1,000’s of jobs will be lost in the reshuffle. 

According to the DCExaminer.com, the following programs are on the chopping block:

- $1.4B cut in missile defense;  the cuts here eliminate the airborne laser program and kills off the
  Multiple Kill Vehicle Program.  Defense analysts were surprised by cuts here since the pace of progress
  in these programs has recently advanced. 
- places a cap on the Raptor F-22 fleet, capping it at 187.  The Air Force wanted 60 more planes.  Emphasis
  is being shifted to the F-35 Joint Strike Fighter, whose fuselage is built in the AV.
- The Navy’s next generation cruiser program is on hold, perhaps indefinitely.
- Shutdown of the C-17 airlifter program; ends with 205 in service, not enough airlift capacity to ensure
  reliable front line support for future global operations.
- FCS Vehicles scrubbed, elimination of Future Combat Systems leaves the army with fleets worn down
  by 8 years of major combat operations.  

Lockheed Martin has announced that they will accept Sec of Defense Gates’ decision to stop buying the F-22 Raptor and will stop production of the aircraft.  Well known among lawmakers for being over budget, the F-22 is also THE most sophisticated air-to-air combat fighter in the world.  No other plane even comes close. Some of the savings, about $4B, will shifted over the C-17 Cargo plane to buy 15 more.  The C-17 is built by Boeing.  The Raptor, while its final assembly was in Marietta, Ga., had 1,000 subcontractors in 44 different states.  The Raptor was designed in the 1980’s, during the cold war, to ensure air dominance over cold war rivals, Russia and China.  The Obama/Gates winding down of the F-22 program is the beginning of an effort to refocus military spending away from super-expensive systems that are not suited to the immediate battle at hand, the war on terror.  In the short run, this decision makes perfect sense.  Longer term, wait and see. War and conflicts can seeming come out of nowhere, i.e. Pearl Harbor, Germany’s invasion of Poland in 1939, the Russians invading Afghanistan in 1979, and 9-11 are a few examples.  While the program is being shut down, it will take until 2012 to finish the F-22’s already in the pipeline.  At its completion, the Air Force will have 187 Raptors, some 20-60 short of the number they wanted.   

General Atomics Aeronautical Systems, developer of the unmanned Predator spy plane, has developed a new jet powered version.  The new aircraft is called the Predator C Avenger and has been undergoing flight testing out of its company’s Gray Butte Flight Operations Facility, located east of Lake Los Angeles.
The Gray Butte facility employs 340.  The Predator C can fly higher, farther, and faster than its predecessors. The Predator C will be able to conduct both reconnaissance and carry weapons and will give the Air Force a quick response, low risk, aircraft.  The Avenger (Predator C) can fly at over 460 mph at altitudes of 60,000 feet.  It is powered by a Pratt & Whitney jet engine and is designed to be able to survive in higher threat combat areas. 

On a foreign policy basis, THE hot spot in the world right now is along the Pakistan – Afghan border, where the highly reorganized Taliban are attempting to take over the Pakistan Govt.  The attack on the Pakistan govt is two pronged, from inside and outside.  The Taliban has some sympathizers inside the Pakistan govt. It has been reported that some of those sympathizers are in the intelligence portion of the govt, giving the Taliban important intelligence.  Pakistan does have nuclear weapons.  Can you imagine a nuclear Pakistan in the hands of the Taliban?  That would bring back the 1950’s cold war paranoia, with our kids doing “drop drills” in school as I did.  One difference though, the Russians cared about dying, they wanted to live.  The Taliban though………………..well I think you know.      
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Antelope Valley Land Market

"Supply and demand, in the end, determines the value of all things." 
     - Adam Smith, "Wealth of Nations" 18th century Scottish economist

Supply closed out April at 1,821, rising just 2 listings which is statistically insignificant. This year the velocity of the decline in supply has slowed markedly, vs the rapid decline we saw last year.  Every month is this supply has been in the 1,800’s.  Last December supply stood at 2100.  While I continue to believe that we are headed to 1500 on the supply side, there is no mantra that says it has to be so.  What is more important than actual supply, are the listed prices of that supply.  At present, most of the listed supply is priced too high, and not just a little bit.  Many parcels are listed as though it was 2006, not 2009.  It is also my belief that the “capitulation phase” of the market cycle is still in front of us.  When that kicks in, supply could fall dramatically lower and could easily break below 1,500.  In the capitulation phase, supply will fall rapidly and will represent at that time, maximum pessimism by land owners as land sellers will give up en masse, i.e., throwing up their arms in frustration.  As judged by the wide gap between listing prices and actual selling prices, as I said above, listed prices are still too high. 
Most of the drop in supply will come from frustrated sellers as they take their property off of the market, giving up.  In the capitulation phase, the velocity in the drop of supply would again increase.  

Antelope Valley Foreclosure Update

Local realtors are telling the media that anywhere from 80% to 95% of their sales are distress sales.
A distress sale is a home transaction in some form of the foreclosure process, being notice of default, trustee sale process, bank owned, or short sale. 

AV home sales have two unmistakable trends:  falling sales prices at double digits rates and very active sales at between 600 to 800 MLS sales per month.  In April, MLS sales were +152% higher than April of 2008. In April, the GAVAR MLS sold 866 homes.  With prices low, demand is strong from investors and first time buyers, with multiple offers common.  In April, the average selling price was $122,408 which was down -47% from April 2008.  It is a common practice for banks to deliberately under price a home to create a “Dutch auction atmosphere”, bringing in multiple offers.  In a Dutch auction, no one knows the bid prices of the other bidders, so it becomes a guessing game.  Through the first 4 months of 2009, home sales are up +201% vs. the same period in 2008.  The average sales price during that 4 months was $133,422 which is down -45% from the first 4 months of 2008.  MLS inventory, which peaked at 5,300 homes in August of 2007, now stands at 1,700.  The Cal Assoc of Realtors says that 83% of Antelope Valley residents can afford to buy a home.  The statewide average is 69%.

As of May 19th, this is how home inventory looked in Palmdale and Lancaster.

                      Notice / Default              In Foreclosure Process          Bank Owned
Palmdale             2,332                                     1,224                                2,763
Lancaster            2,104                                      1,097                               2,776

On top of the above numbers, another wave of foreclosures is expected later this year, say analysts.
Nationwide, $29B in adjustable rate mortgages will reset this year, with the payment going up beyond many homeowners ability to pay.  Another factor:  homes over the past 6-8 months that have been kept out of the foreclosure process by “foreclosure moratoriums” by various levels of government.  First the Federal Govt began this, then state governments followed suit.  The moratoriums accomplished nothing, but have succeeded in enlarging the backlog that is about to hit the market. 

National Foreclosure Update

In April, as reported by RealtyTrac, foreclosure filings rose to record high 342,038 on US properties, affecting 1 in 374 housing units.  The April filings, versus March, were up only 1%, but versus April of 2008, were up +32%.  The data suggests that previous foreclosure actions, delayed by government moratoriums, are now entering the “pipeline”.  This means, that in the months to come, bank repossessions are likely to spike upward. On a nominal basis, California had the most filings at 96,560, followed by Florida at 64,588.  Nevada came in at 16,266 and Arizona at 16,245.  In California, foreclosure filings were actually down 10% in April, vs. March. On a per capita basis, Nevada, at 1 in 68 housing units, is the leader, at 5 times the national average.  Florida comes in 2nd at 1 in 135 housing units, and California 3rd at 1 in 138 housing units.   

Antelope Valley New Home Sales

The data for new home sales listed below, for the years 2002 through 2007, were provided by the Hanley Housing Report.  Going forward, I will begin using a new source for new home sales, The Siracusa Company.

1990-  total of all new homes sold- 4,900 +
1999-  total of all new home sold-    694   (The Siracusa Co.)
2002-  total of all new homes sold- 1,162 (Hanley Housing Report)
2003 - total of all new homes sold- 1,820 (Hanley Housing Report)
2004 - total of all new homes sold- 2,503 (Hanley Housing Report)
2005 - total of all new homes sold- 4,579 (Hanley Housing Report)
2006 - total of all new homes sold- 2,584 (Hanley Housing Report)
2007 - total of all new homes sold- 1,720 (Hanley Housing Report)
2008 - total of all new homes sold-  906   (The Siracusa Co.)
2009 - projected to sell all year  -     756   (Cal Economic Forecast)
2010 - projected to sell all year  -  1,535   (Cal Economic Forecast)
2011- projected to sell all year   -  2,299   (Cal Economic Forecast)

Antelope Valley Existing Home Sales

Although I don’t have any May sales numbers to report here, May’s AV existing home market was much like the previous 3.  At the low end, sales are very strong, with investors buying rentals and first time buyers making up the market.  First time buyers have the added incentive of the $8,000 tax credit. Mid range and upper range home sellers are trapped; they can’t sell without taking huge losses, so they remain put.  This has resulted in a two tier real estate market:  the $300,000 & below market and everything else.  The everything else segment of the market is “dead in the water”.  As I said, mid-range sellers cannot get out to trade up, due to falling market values.  Below $300,000, home sales remain very active.  In February, our local MLS had an 8 month supply of homes.  Not number is now down to under 2 months.  That is quite a draw down in just 4 months, and on the surface, would lead one to believe that health is returning to the housing market.  But that is not so.  Sales have only been active in the under $300,000 range.  This process is not likely to end anytime soon, as banks are reporting plenty of foreclosures in their pipeline.  Presently I am being told that banks are holding back their foreclosure inventory; for what reason no one seems to know.  One could surmise it is being done to control supply to try and get prices up, however, the banks had no such concerns over the past two years.  If I had to take a guess as to how much longer this type of market could go on, I would say the better part of two years.  There is one major threat to the housing market that could lengthen the housing liquidation process:  rising mortgage rates.  Over the past month, on a 30 yr fixed basis, the rate moved up about ½%, from just below 5% to 5.5%.  That may not sound like much of a move, but for a one month period, it is a very large move.  Rising interest rates, by itself, could cut off the housing recovery and the general recovery as well.  Rising rates will kill off refinancing and slow home sales.  Most economists are saying that we cannot have a recovery in general unless we also get a housing recovery as well.  This means that the May rise in rates is potentially serious, especially if it continues in June.  The administration has based their recovery on two things:  low interest rates and transfer payments to state and local governments to save jobs.  If the low interest rates go away………….    

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May 2009

May 1- According to a recently completed census, the City of Palmdale grew +3.5% in 2008 and now has a total population of 150,346.  In the category of mid-sized cities, those of 300,000 or less, Palmdale is ranked number 1 in the state.  Eight miles north, the City of Lancaster grew +1.1% in 2008 and now has a total population of 145,074.Also in 2008:  California City grew +3.5% to 14,828, Tehachapi climbed +4.4% to 13,631, the City of Los Angeles grew by 43,000 to 4,065,585, and the entire population of Los Angeles County came in at 10,393,185.

May 4- Those in favor of the new proposed west Lancaster Wal Mart picked up a very vocal and powerful ally: Lancaster Mayor Red Parris.  Parris’s primary reason is financial.  If the west Lancaster store is not built, those shopping dollars will continue to go to the west Palmdale Wal Mart with the tax dollars going to the City of Palmdale, NOT Lancaster.  With all City budgets strapped by the recession, the amount of money the Mayor is talking about is substantial, $1.2M per year.  That money could be used to provide more public safety coverage for Lancaster citizens.  The mayor went to say, “While I am not happy with the location, across the street from Quartz Hill High School, it would be totally irresponsible for us not to recognize the financial consequences if we don’t approve the center.”  Parris is correct in one respect; just one mile from the new proposed Wal Mart is an area of west Palmdale that has the highest incomes and household net worth in the AV.  It would be much easier for the residents in this west Palmdale area to drive to the new proposed Wal Mart, then to go all the way into town to the nearest Wal Mart at 10th St West and Ave O-8.  We are talking about driving 1-2 miles vs. driving 4-6 miles.  Objections to the center are the usual, increase in traffic, auto smog pollution, congestion, possibly more crime, distraction to high school students, wouldn’t park be better etc.  The Wal Mart, if approved, will be on the 40 acres at the NW corner of 60th West & Ave L.  For the SW corner of the same intersection, a Target store has been proposed on 35 + acres.  Another objection, for some in the grocery business, is that a new Super Wal Mart in this location would put some competitive pressures on west Lancaster and west Palmdale markets, i.e., Vons and Albertsons.  Wal Mart is the largest retailer in the world and their buying power to buy items in bulk, to get a lower price so they can sell at a lower price, is unmatched.  To compete with Wal Mart, one has to move away from price and offer superior quality.  Target, in their clothing line, has had some success with this strategy.

May 11- A 230 megawatt solar power plant is being proposed by NextLight Renewable Power of San Francisco. The project, located 2,100 acres in the area of 170th West & Ave D, is in the process of having the environmental studies overseen by Los Angeles County.  The project is NW of Lancaster, but is outside Lancaster’s city boundary, thus the County is jurisdiction for development.  NextLight Power plans to sell the electricity produced, right into the state grid via the major Edison lines that are already in the area.  The project is being called AV Solar Ranch One. The solar plant will have thousands of photovoltaic panels, which can convert sunlight to electricity, mounted on motorized units that can track the sun’s path as it moves across the sky.  The power generated will be sent along new lines, 3.5 miles north along 170th St West to an Edison substation.  The area in question had been farmed since
the 1940’s, with farming ceasing in 2004.  In the late 1980’s, the 2,100 acres was part of the 35,000 acre master planned community of California Springs, which never got off the ground.  NextLight Power is hopeful that the environmental impact report will be approved by April of 2010, and approval for the project by July 2010.  If so, construction would begin by Oct 2010 and the project would start producing electricity by the summer of 2011. The closest major housing area, Antelope Acres, apparently have no major objections to the project, according to its Town Council.  While the boundaries of the site are irregular, the basic boundaries area: 175th West on the west, Ave B-8 on the north, 160th St West on the east, and Ave E on the south.  NextLight had the following criteria for this location:  large, flat, near power lines, lots of sunshine, and wanted land previously disturbed, which in this case meant previously farmed.  NextLight wanted to avoid virgin desert land as they wanted to avoid problems with endangered plant and animal life on the EIR (environment impact report).  Construction of the site will employ 490, but once built, 16 can run the plant. 

May 12- A 5 story, $9.4M artist loft is near completion in downtown Lancaster.  Located at 661 W. Lancaster Blvd, the 38,000 sq foot project is one of many that the City hopes will help to revitalize the downtown area. Each loft is approx 1,600 sq feet, with the upper floor able to accommodate up to 4 artists and the downstairs area functioning as a gallery and gathering spot.  The developer, Scott Ehrlich, has also developed the former Essex House hotel into a senior housing and retail complex.  Next up for Ehrlich, the development of a deli and wine tasting room in a former furniture store, south of artist’s loft.

May 13- The County of Los Angeles will loan $1.1M of tax payers money to a foundation to build a new retirement home in the Quartz Hill area, near Mayflower Gardens in the area of 65th St West & Ave M.  In addition to those monies, Long Beach based Retirement Housing Foundation will receive another $10M of taxpayer monies from the Dept of Housing and Urban Development to help build the 75 unit complex.  The facility will be called Harshfield Terrace and will be built on 5 acres.  Retirement Housing Foundation, which already owns Mayflower Gardens, will break ground in August, saying it will take 18 months to finish the project. The complex will consist of 1 and 2 bedroom units.  Residents pay 30% of their income for rent, which is adjusted for cost of care for chronic medical conditions.  The balance of the rent is covered by a federal subsidy.

May 18- Lancaster Mayor, Rex Parris, in conjunction with solar firm, DayStar Farms, announces they will joint venture to build a massive “solar business park”.  The overall goal is to provide a business environment that will help solar companies fast track the permit process with the state.  to Lancaster and DayStar plan to JV to build power lines and get permits approved in advance so that solar startups can get off the ground more easily and affordably.  In doing all of this, a solar company can get its final permits in just 2 to 3 months instead of 15 to 24 months.  New companies coming to DayStar’s solar park would only have to get an amendment to DayStar’s already approved permits, not get all new ones.  DayStar would locate and purchase several thousand acres and then build power lines.  The power lines may be put underground.  At the same time, DayStar will be working on getting permitted.  DayStar says that their upfront costs will run in the millions of dollars.  DayStar says that the permitting process for solar in California can run out to 5 years, but they feel they can cut it down to two.  DayStar feels that working with the City of Lancaster will help “grease the skids” when they apply through various state agencies.  Parris envisions the solar park becoming a launching pad for companies wanting to build solar plants or develop new solar technologies. Comment:  Where will DayStar find several thousand contiguous acres?  It won’t be in within the city limits.  A square mile is just 640 acres, so we are talking about a lot of land.  Kern County could provide it, but that would not be in Lancaster’s jurisdiction.  With large farms on the eastside of Lancaster, DayStar is probably eyeing one or more of those.

May 28- Even though California and Nevada have no surplus cash, and are in fact running deficits necessitating spending cuts, both states are excited about the proposed high speed rail lines in and between both states.  The Obama administration has earmarked $8B of the stimulus money to go towards high speed rail projects.  Senator Harry Reid of Nevada pushed hard for $5B for his own state to kick off a high speed rail train that would, upon completion, go from Disneyland in Anaheim, Ca. to Las Vegas.  As I told you two months ago, $8B is not enough money to even get the train out of Orange County, let alone to Las Vegas.  California, for at least 10 years now, has had a high speed rail train on the drawing board that would go from San Diego to San Francisco and numerous points in between.  The California train would pass probably pass through the AV, stopping in Palmdale.  As I write this, consultants for California’s High Speed Rail Authority are working on environmental and engineering documents for the 800 mile long rail system.  This is being paid for by 2008’s Prop 1A which permitted a $9.95B bond issue. If enough funding shows up, which is highly questionable, the CHSR Authority hopes to break ground in 2012, and to have the backbone of the system, Anaheim to San Francisco, done in the 2018-2020 period.  The Authority is hoping to build a test track in 2015 between Merced & Bakersfield to test different train technologies.  When completed, the high speed rail system would connect the state’s largest cities and travel at speeds of 220 mph.  There are still a lot of issues to be worked out, i.e., exact route, right of ways, ground level or above the ground, which train technology to use, funding sources, etc.  Estimates are that the system will create 160,000 jobs to build it and another 450,000 jobs to operate it.  Funding source?  Who knows, but this is type of project, once begun, can take on a life of its own and become obsessed upon by its supporters.  As this moves along, a bit of advice:  remember the Pyramids of Egypt, because that just may be how long it takes to build.  According to reports released June 5th, Vice President Joe Biden says that, “The California high speed rail project is well positioned to compete for a significant share of the $8B the Obama administration has set aside in our stimulus package for rail lines.  We want to get shovel ready projects out the door as soon as quickly as we can…….so California is in the game.”  It is estimated that the total system, from Sacramento to San Diego will run $45B in 2009 dollars.

June 2- The west Palmdale restaurant, Applebee’s, which closed down in January, will reopen under new management by July.  The restaurant was purchased by the largest owner of Applebee’s, Apple American Group.  The new owner is already hiring staff and will also do some minor remodeling before the open.  Exterior revamping will include new signage and awnings which will give the restaurant some more “pop”.  The Apple American Group LLC is a deep pocket and experienced owner, owning some 189 Applebee’s in Ohio, New Jersey, Delaware, Pennsylvania, West Virginia, Washington State, Nevada, and California.  Apple American in 2008 reported sales of $440M and employed 11,600.  The above Applebee’s is located on 10th St West, just north of Rancho Vista Blvd (Ave P), directly across the street from the AV Mall.  On the Border, a Mexican restaurant on the north rim of the AV Mall, is still vacant and looking for a new owner, as is the east Palmdale Chili’s, on Ave S, just west of 47th St East. 

 


- Frank Donato, Second Quarter 2009

Information presented above has been compiled from reputable sources, and is deemed reliable but not guaranteed. All opinions expressed are those of the Author.