Category: Business

-August 12,2023-

The Wall Street Journal reports that a drop in imports particularly from China this year is affecting demand for warehouse space in Southern California. U.S. goods imports from China fell 25 percent during the first six months of 2023, the Commerce Department reported recently.

That in turn may be decreasing demand for Visalia warehouse space that has enjoyed spillover from the Southland in the past few years.

Last year plans for millions of square feet of new industrial space in Visalia seems to moving forward. But in mid 2023- few of those projects have gone forward. Only Newport-based CapRock has broken ground on a 1.2 million square feet “spec” space in the past month.

Here is the report from the WSJ this week.
Cooling Warehouse Markets-WSJ
There’s a new feature on the scene in Southern California’s tight warehousing market—empty space. Industrial vacancy rates in the region’s logistics-heavy Inland Empire have jumped in the past year, the WSJ Logistics Report’s Liz Young writes, as high leasing costs, capacity constraints and plummeting import volumes eat into demand. Warehouses there have been effectively full in recent years, with the vacancy rate down near 1% and some companies storing goods in parking lots. Real-estate services firm Savills says the rate in the Inland Empire reached 3.8% last quarter, still anemic by historical measures but a reversal from pandemic-era tightening trends. Landlords are coping with a receding goods economy that is hitting the major import gateway particularly hard. The ports of Los Angeles and Long Beach handled about 1.3 million fewer containers in the first half of this year than they did in the same period in 2022.

Here is the the June statistics report for the the Port of Long Beach showing both imports and exports are down this year.

 

PORT OF LONG BEACH

-August 12,2023-

Futures info from Trading Economics 

Corn futures sank to $4.72 per bushel on August 11th, a level not seen since December 2020, following the two-year low of $4.76 touched on July 12th as improving weather continue to weigh on the market. In the US, regular showers and moderate heat in August have eased concerns about crop stress after U.S. crops faced endured drought and high temperatures earlier in the summer. Meanwhile, U.S. government predicts that dry conditions early in the growing season would mean smaller harvests of both this fall. Still, the corn crop would be the second biggest on record due to large acreage and as growing conditions improved during the key development month of July. The U.S. is expected to be the No. 2 exporter of soy and corn, after Brazil, this year.

That cup of Joe should be costing less in coming months. This month Arabica coffee futures in the US eased further towards $1.58 per pound, approaching a six-month low of $1.52 scaled on July 19th, amid prospects of higher supply. 

Americans declare beef is better than its plant-based or lab-grown alternatives from almost any standpoint, from taste to nutrition and environmental impact, said a Purdue University report on Wednesday. Consumers gave slightly higher scores to “lab-grown meat” as opposed to “cell-cultured meat,” although it is the same thing.

Tom Kloza

@TomKloza

WTI crude is up 15.8% through July and a total 17.8% month-to-date. Gasoline is up 11.2% and 12.6% in the same periods. The truly monstrous reflation is in diesel (+22.2% and +27.5%) and Jet fuel (+26.2% and 31.4%).

AAA says California gasoline prices are up 24 cents in the past month but diesel is up 60 cents. Exporters have cut the supply wanting to boost prices and they are succeeding.

Milk exports down

from Milk Producers Council

Slower shipments to Asia, and especially China,
weighed on the overall export numbers. U.S. dairy
exports to China fell to 71 million pounds, a decrease
of 27.6% compared to the same month last year.
Exports to Canada were also down 20.3% year over
year, falling to 40.5 million pounds. Notably, buying
from Mexico remained robust. June exports to
Mexico set a record for the month at 139.4 million
pounds, an increase of 10.1% over June 2022.
Continued buying from Mexico has been a bright
spot in an otherwise worrying export scenario.
Cumulative exports to Mexico were up 22.4% over
the first half of the year as buyers capitalized on an
increase in purchasing power imbued by a peso that
sits at an eight-year high

-August 11,2023-

New clinic to open in Industrial Park

Kaweah Health’s new Visalia Industrial Park clinic is scheduled to open on Monday, September 4, 2023.The new clinic is on the southwest corner of Plaza and Goshen.

Tulare to target street racing

Tulare police are advocating a new city ordinance to address street racing.They say they have noticed a significant rise in reckless driving and speed contest related calls for service. With the growing popularity of street racing and side-show events being promoted through various social media platforms, we are now experiencing organized events of this nature within the City of Tulare. These events have resulted in hundreds of vehicles and spectators congregating in business parking lots within the City of Tulare. Recently the Tulare Police Department says they have learned that many of these vehicles and spectators come from other cities, some as far as Northern California and/or Southern California. “These events pose a great risk to public safety, and negatively affect the quality of life of nearby residents.” The city council is being asked to approve a new regulation.

Tulare to get Virtual Golf Lounge

The Tulare Planning Commission approved a request by Dryvebox Golf Lounge, Tulare LLC to allow a virtual golf lounge and to obtain a Type 40 ABC license located at 132 E Kern. Visalia has one of these venues in the works as well in the old Main St Theater.

Tule tribe will build biomass plant

In July Kore Infrastructure announced details about its
partnership with the Tule River Economic Development
Corporation with support from the California Department of
Conservation to develop a modular, forest biomass to carbon-
negative biofuels facility in Porterville, California.

The plant will help in the removal of dead and diseased trees
that pose a fire threat. The technology converts the wood to
hydrogen and biocarbons, a soil amendment.

The California Department of Conservation has awarded Kore a
$500,000 grant under the Forest Biomass to Carbon-Negative
Biofuels Pilot Program to develop the project – one of 8 such
facilities they are supporting in the state.

A recent report says there are now more than 2.6 million acres of
dead trees in our forests.Most of the tree mortality can be
attributed in part to drought or bark and engraver beetle attacks
that have resulted in more than 200 million trees killed since
2010. Also fires in the upper Tule watershed in 2021 resulted
in massive tree mortality. The Tule Reservation includes
thousands of acres of high elevation tall trees including more
than 500 large sequoia trees in the 20 mile-long, 3300 acre
Black Mountain Grove.

-August 11,2023-

Kings County Assessor’s office announced recently that property values in the county for 2023/24 jumped $1.1 billion to $14.9 billion. That is an increase of 8.5%, the largest increase since 2008.The increase in the property rolls the year before was 4.5%.

The surprising jump comes even as nearly 134,000 acres of farmland is flooded due the heavy runoff this spring.Some 808 parcels in the county are under water as of June 30, valued at $211 million says the assessor’s report to the Board of Supervisors. Kristine Lee is the county’s Assessor/Clerk/Recorder.

So what has led to the increase in valuation? The report points out that 8 new housing subdivisions with 924 lots joined the rolls.It adds that the market for homes was up during the first half of this year.One half the county property valuation is from housing.

In addition to homes, solar farms grew in the county adding $63 million to the rolls in a year with a total of $132.5 million attributed to solar installations. More large solar farms are on the drawing board.

Oil and gas valuation was steady at $53 million.

On the minus side some 260 parcels were sold to California High Speed Rail removing $27.4 million from the rolls.

Looking at increases in value, the City of Hanford saw a value increase of 9.8% and Avenal climbed 9.4%. Lemoore had a more modest increase of 5.8% and Corcoran was up 6.8%.

Commenting on the economy the Assessor says consumer confidence in the US was 109.7% as of June – the highest since January 2022. Kings County has not felt the downtown seen in metro areas of California but could still see reduced activity in the next year or year and one half, the report adds.

Bug off

California Office of Emergency Services has confirmed that $6.3 million in disaster relief have been spent on aerial spraying and other mosquito abatement strategies in Kings and Tulare counties due to flooding this spring.
Wet conditions mean fewer fires this year

As of early August 2023 – 24,229 acres had burned in California since Jan. 1, according to the National Interagency Fire Center. That’s 82% less than the state’s 10-year average and is the lowest of any year since 1998.

The reason for the state’s good fortune now, experts say, is water. Lots of it says the Mercury News.

“I was in the mountains this past week,” said Scott Stephens, a professor of wildland fire science at UC Berkeley. “Things are green. Streams are flowing. It’s still wet.”

Press reports
Regal Cinema exits bankruptcy

The owner of Regal cinemas announced in the past week that it had emerged from Chapter 11 bankruptcy after slashing billions off its debts.In our market, the company closed their Sequoia Mall theater in late May after court approval while the Downtown Visalia complex remains open.

Cineworld, the world’s second largest theater chain behind AMC (AMC), filed for bankruptcy protection last September after a punishing two years during the pandemic. Its cinemas had continued to operate while it restructured its finances.

The group said in a statement that it had cut its debt by $4.53 billion, raised $800 million in new equity capital and secured debt financing of $1.71 billion.

Sequoia Mall developer Dave Paynter says there are no immediate plans to build a new theater at the mall -undergoing transformation now. But he adds”we are still talking to theaters ” about coming to the project.

More micro breweries for Visalia

Cali Brewery wants to open a 4000sf tap room and brewery at warehouse buildings on Tulare and Santa Fe in the old olive plant building in Visalia. The filed preliminary plans with the city.

Also, Christian Carter wants to open Salty Walrus Brewery and taproom at 2415 E Valley Oks Dr in east Visalia.

Visalia one of 10 cheapest places in California

GOBankingRates list Visalia among the 10 low wets priced places to live inCalifornia.Visalia is a Central Californian city that sits along Highway 99, along with many others on this list. The city of 145,000 provides all of the amenities of a larger city while maintaining some of its “smaller town” vibe.

Overall, costs run 2.3% above the national average, with home prices coming in at $369,103 and condos priced at $261,543 on average.
Better earnings for Amazon

Internet powerhouse Amazon, with two large distribution centers in Visalia, announced better earrings in the past week.WSJ reports “An e-commerce rebound could be forming at the sector’s top seller. Amazon posted its strongest quarterly profit in a year and a half, partly on improving online retail sales that drove an 11% hike in revenue to $134.2 billion.”
Fewer fires this year

As of early August 2023 24,229 acres had burned in California since Jan. 1, according to the National Interagency Fire Center. That’s 82% less than the state’s 10-year average and is the lowest of any year since 1998.

Only four structures have burned statewide in wildfires so far this year and there have been no fatalities, reports Cal Fire, the state’s main firefighting agency. By comparison, one fire in July 2018, the Carr Fire near Redding, destroyed 1,614 structures and killed eight people, including three firefighters.
The reason for the state’s good fortune now, experts say, is water. Lots of it.

“I was in the mountains this past week,” said Scott Stephens, a professor of wildland fire science at UC Berkeley. “Things are green. Streams are flowing. It’s still wet.”

 

-August 1,2023-

The California New Car Dealers Association released its second quarter 2023 California Auto Outlook report showing an 11.6 percent increase in new vehicle registrations in the first six months of 2023 when compared to the same time last year. 2023 projections indicate registrations will reach 1.8 million units, as forecasted by Auto Outlook. This is an increase from the predicted 1.78 million from 1Q 2022.

Hybrids and Electric Vehicles

The state’s BEV (battery electric vehicle) market share has exceeded 21 percent in the first half of 2023, well above the 16.4 percent reported for all of 2022. Hybrid units sold (including and excluding plug in) have tracked similar increases of .6 percent YTD each.
New registrations for BEVs sold at franchised dealerships experienced a significant growth of 125 percent in the first half of this year. As a result, franchised dealerships’ market share in the state’s new retail BEV market rose from 23.2 percent in the first half of 2022 to 32.8 percent so far this year. Registrations for BEVs sold by direct sellers saw a 40 percent increase from this time last year.
2Q 2023 showed that Northern Californians are more willing to adopt BEVs, as those vehicles captured 25.9 percent of the market share, while Southern CA BEV sales reported 20.9% of registrations.
Model Segment Rankings
Toyota remained a brand leader, providing four of the eight best-selling vehicles in the primary segments for 2Q 2023. Toyota’s Camry, Tacoma, RAV4, and Highlander topped the Mid-Size and Large Cars, Comp./Mid Size Pickup, Compact SUV, and 3 Row Mid-Size SUV spots. The Honda Civic was the best-selling Small Car, the Tesla Model 3 topped the Near Luxury Car, the Ford F-Series was the best-selling Full Size Pickup, and the Tesla Model Y was the top Luxury Compact SUV.
Brand Market Share and Summary
Toyota also held the top of California’s market share at 14.7 percent amongst all vehicle brands, followed by Tesla at 13.6 percent, Honda at 9.3 percent, Ford at 8.1 percent, and Chevrolet at 6.9 percent. As the Golden State continues to pave its own way, CA’s numbers differ notably from the rest of the U.S., which reports Ford as the top-selling brand at 12.2 percent, followed closely by Toyota at 12 percent, then by Chevrolet at 11.1 percent.

 

Wholesale Used-Vehicle Prices Decline in First Half of July
Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.0% from June in the first 15 days of July. The midmonth Manheim Used Vehicle Value Index dropped to 213.1, which was down 11.1% from the full month of July 2022. The seasonal adjustment mitigated the decline. The non-adjusted price change in the first half of July declined 3.0% compared to June, while the unadjusted price was down 10.0% year over year.

July 18, 2023 8:00 am EDT
Redfin reports 14 of every 1,000 homes changed hands in the first half of 2023, compared to 19 of every 1,000 during the same period in 2019. The turnover rate for large suburban houses has declined even more.

SEATTLE–(BUSINESS WIRE)– (NASDAQ: RDFN) — Roughly 14 of every 1,000 U.S. homes changed hands during the first six months of 2023, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s down from 19 of every 1,000 during the same period of 2019 and the lowest turnover rate in at least a decade.

In 2018, Freddie Mac estimated that about 2.5 million more homes needed to be built to meet demand, with the shortfall mainly due to a lack of construction of single-family homes. The homebuying boom of late 2020 and 2021, driven by record-low mortgage rates, remote work and a surge in investor purchases, depleted already low inventory levels. Finally, 2022’s soaring mortgage rates—average rates nearly doubled from January to June—exacerbated the shortage by handcuffing homeowners to their comparatively low rates.

“The quick increase in mortgage rates created an uphill battle for many Americans who want to buy a home by locking up inventory and making the homes that do hit the market too expensive. The typical home is selling for about 40% more than before the pandemic,” said Redfin Deputy Chief Economist Taylor Marr. “Mortgage rates dropping closer to 5% would make the biggest dent in the affordability crisis by freeing up some inventory and bringing monthly payments down. But there are a few other things that would boost turnover and help make homes more affordable. Building more housing is imperative, and federal and local governments can help by reforming zoning and making the building process easier. Financial incentives, like reducing transfer taxes for home sellers and subsidizing major moves with tax breaks, would also add to supply.”

The turnover rate has shrunk most in the suburbs: 16 of every 1,000 large suburban houses have changed hands this year, two-thirds as many as 2019

House hunters searching for large homes in the suburbs have seen the biggest drop in their options. Just about 16 of every 1,000 four-bedroom-plus suburban single-family homes sold in the first half of this year, down from 24 of every 1,000 that sold in the same period in 2019. That means buyers of that home type have 33% fewer houses to choose from.

Big mixed-use development for Hanford along 198

Property owners on the north side of Hwy 198 between 11th and 12th Ave have filed an ambitious plan for a large mixed-use project just under 40 acres being processed by the City of Hanford. Named Hanford Place, consultant firm QK has submitted for a conditional use permit and mitigated negative declaration on the project. No developer or medical agent has been named. Here is what is planned.

The proposed project would include the following: a 22,525-square-foot ambulatory surgery center; a 12,445-square-foot specialty clinic; two 12,445-square-foot medical office buildings; a 12,445- square-foot psychiatric health facility; a 100,000-square-foot, a four-story 105-room hotel with a conference center and pool; a 35,000-square-foot nursing college; a 54,611-square-foot skilled nursing facility; a 34,480-square-foot memory care facility; a 34,380-square-foot assisted living facility; a three-story 90-unit multi-family apartment; 41,500 square feet of medical/commercial uses; and a 5-acre bio infiltration basin.

The application says construction should begin in March of 2024.

Car sales are up

New vehicle registrations in California are predicted to approach 1.8 million units this year and increase 6.9 percent from 2022 according to the California New Car Dealers Assn.

Following three years of below average sales, pent-up demand is at elevated levels as the volume of postponed purchases continues to grow. This will be the driving force for the market for the remainder of the year, say the dealers. Weakening consumer affordability will hold back the release of pent-up demand, but improving vehicle inventories should be sufficient to push sales above current levels.

New light vehicle registrations in California increased 5.8 percent in the first quarter of this year versus the year earlier, slightly below the 8.4 percent improvement in national sales.New vehicle registrations in the state increased for the second consecutive quarter in 1Q ’23.

Prior to the fourth quarter of last year, the market declined by more than 10 percent for four consecutive quarters.

California’s new vehicle market is predicted to increase higher than last year’s results in the remaining three quarters of this year.

Among items of interest, estimated electric vehicle market share approached 20 percent in 1Q ’23; Tesla Model Y was Best-Seller in California; Best Full Size Pickup: Ford F-Series; Toyota retained the title of Top Selling Brand in CA in 1Q ’23.

Wonderful plans wood/biomass yard

Wonderful Renewable Energy, LLC filed an application for a development code text change to allow for permitted uses in the Light Industrial (IL) zone district to be permitted in the Rural Commercial (CR) zone district subject to the approval of a Site Plan Review zoning permit. Wonderful wants to establish a biomass wood yard to manage wood or nut waste for biomass conversion to power generation.The Kings County Planning Commission approved the application this month.

The Wonderful Company is the world’s largest almond & pistachio grower, generating 250,000 tons of nut waste/year (wood, hulls, shells); >5M tons/year industry wide and growing.The industry is looking to turn these liabilities into carbon-negative revenue via reliable electricity and bio-char production. Besides waste nuts and shells, the company removes large numbers of trees each year including thousands of nut tree acres due the drought anticipating a lack of water to sustain some orchards.
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The Wonderful Company announced in 2019 it will use 100 percent renewable electricity across all its U.S. operations by 2025.

Fresno County will see large battery storage plant

German power generation company RWE has announced that it has linked its 137MW utility-scale battery energy storage system (BESS), called Fifth Standard, to the California independent system operator.
Located in western Fresno County, the BESS project is the company’s largest facility to date in the US. The project also includes a 150MWac solar PV facility, which is expected to be completed in August 2023.

It will feature 369,334 solar photovoltaic panels covering 1,600 acres.
The facility will power 26,000 homes in the region and support California’s clean energy goals as the state works toward its net-zero target of 2045.

The excess energy will not be sent to the grid, but instead will be stored in an on-site lithium-ion battery energy storage facility with up to 548 megawatt-hours of capacity. The power storage system will allow the plant to maximise its value by releasing solar energy when electric demand is highest.

RWE Clean Energy CEO Mark Noyes stated: “Projects like Fifth Standard, with its co-located battery storage system, will become increasingly important to help ensure that as renewables form a bigger part of the energy mix, the electricity produced can be used when it is needed most.

“In our case, future growth is backed by a project development pipeline comprising more than 24GW in onshore wind, solar and battery storage, one of the largest in the US.”
Caption: Hanford Place building plans

-June 28,2023-

Visalia existing home sales in May were down 26% compared to a year earlier while  year to date numbers shows 1624 home sales compared to 2000 through May 2022, a19% decline.Figures are courtesy Tulare County Realtors.

Other statistics show a decline in the number of listings but a rise in asking price.

 

-June 28,2023-

“Central Valley Community Bank’s branch located at 120 N. Floral Street in Visalia, will relocate to a newly designed banking center in Visalia’s Downtown at 126 W. Center Ave. once construction schedules have been finalized. The Company owns the Floral Street building and has put it up for sale,” said Debbie Cohen, Marketing Management, Central Valley Community Bank.

The bank’s current headquarters was founded as Visalia Community Bank.It has underground parking and a second story lobby. The Fresno bank acquired the Visalia-based bank in 2013- ten years ago.Under the terms of the agreement, Visalia Community Bank, with four branches in Visalia and one branch in Exeter, was merged with Central Valley Community Bancorp’s subsidiary, Central Valley Community Bank.Today the bank has closed two of the four branches in Visalia and retains the Exeter branch.

The bank’s new location a few blocks east – a 5720sf building has had several tenants in the past including Financial Title Co.

caption: New location for Central Valley Community Bank