Category: Central Valley

-December 11,2019-

Without naming the canal he wants to fix in the bill, Democrat Congressman TJ Cox has introduced new legislation last week- the Move Water Now Act, H.R. 5316 – that would provide $200 million in funds to “provide for the restoration of the original carrying capacity of canals impacted by land subsidence, and for other purposes.”  That amount is considered  about half the  dollars needed to do the job.

In a news release Cox does identify the money is aimed to repair a 33 mile section of the Friant Kern Canal that delivers surface water to a million acres of farmland in Central California.

South Valley water manager Dan Vink says the canal is not named in the legislation because of federal rules that don’t allow specific earmarks.

But Cox who represents  Fresno and Kings Counties ,makes no bones about the notion the funds will be used to fix the Friant Kern.The canal has been highly impacted losing 60% of its original carrying capacity due to land subsidence over the years.

The subsidence is caused by over-pumping of groundwater sinking the canal so water does not flow by gravity, as the 1950 hydraulic structure was designed. 

“Land subsidence has literally strangled most of the flow of water through the Friant-Kern Canal” said Rep. Cox in a news release. “Because of this, communities aren’t getting the water they pay for and farms aren’t getting the water they need to feed the world.”

Jason Phillips, CEO of Friant Water Authority said “This bill would provide additional federal authorization to help restore the conveyance capacity of the Friant-Kern Canal, that is desperately needed to achieve long-term sustainability in the valley.

“On behalf of Friant Water Authority, along with the dozens of Friant Division water districts, Eastside communities, and 15,000 farms who rely on the canal’s water deliveries and the groundwater aquifers they support, I want to thank Congressman Cox for introducing legislation that addresses the needs of the valley’s people and ecosystems.  We look forward to the quick passage of this important legislation and the effort to secure the federal appropriations needed to complete the project.”

“There is no doubt these funds will be used for the Friant Kern” says Vink. The meeting to launch an EIR to build  improvements on the canal is being held in Porterville next week.

The money is given a good chance to be allocated with both Valley Democrats and Republicans including GOP leader McCarthy along with President Trump all supporting it.

California’s Sustainable Groundwater Management Act (SGMA) has limited groundwater pumping to reduce land subsidence.But its implementation makes it even more necessary that surface water infrastructure like Friant-Kern Canal be restored to full water conveyance capacity say supporters.

A state bill to allocate $400 million to the repair of the Friant Kern in Sacramento has been sidelined  and Vink, for one, does not believe it has a strong chance to be signed into law. A state Proposition in 2018 failed at the ballot box that was hampered by criticism that farmers should help pay for the fix that they caused.Other say that is not fair given the extent of the drought years.

“We are looking at some sort of sharing in the cost to pay for this” suggests Vink ,including Feds, State and locals, he predicts. Design work on the project is likely to start early next year.

Fixes are slated on approximately 10 miles of the northernmost and southernmost segments of the canal as well as include construction of a new 23-mile-long realigned canal from MP 95.7 to MP 119 east of the existing canal.This has been called a parallel canal. Construction of the project would take up to 3 years and would be continuous says  a report. Improvements would be made from near Lindsay in the north to  close to McFarland on the south end.

A scoping meeting to begin formally assessing the proposal’s potential impacts is scheduled for 5:30 to 7:30 p.m. Dec. 18 at the U.S. Forest Service’s Sequoia National Forest office in Porterville. 

More spec industrial buildings get permits 

City of Visalia plans to extend Riggin widening

-December 10,2019-

Two more massive speculative industrial buildings got City of Visalia permits this past week. Fresno’s Diversified Development Group (DDG) will build a 244,280sf concrete tilt-up building at 2520 N Plaza Drive and a second 120,000sf building next door at 9105 W Riggin, both located at the SE corner Riggin and Plaza.The site is across the street from the huge 88-acre United Parcel Service hub under construction now.

On the same piece of dirt DDG plans 2 more buildings, 188,4000sf and 144,000sf, all clustered on 35 acres.

This is just the latest in a growing list of industrial developers ready to fund big construction projects and land purchases ahead of any firm commitments by tenants.

The largest of these type buildings is a 1.1 million sf behemoth on the drawing board that is expected to be built early next year right next to the UPS complex. The project is being proposed by LA-based CapRock Partners, who has the only million sf spec building in the Southland as well, notes company principal Pat Daniels.  Like that LA spec project Visalia too will be built putting their money where their hunch is.That hunch is that if they build it in Visalia, someone will show up to fill it.

UPS launched all this

Industrial real estate agent Nick Audino believes “UPS launched all this interest, made stronger by a very low vacancy rate in the Visalia Industrial Park.” As for the big CapRock building Audino says “you just got to give them a good chance to lease it.”

The low vacancy rates here have been highlighted by a 2018 Colliers study suggesting that the vacancy rate in the Visalia Industrial Park has dropped from 5% in 2013 to half that in early 2018. Visalia has more than 15 million square feet of industrial space as it is says Colliers.

Diversified Development Group itself has pioneered the strategy for years building 3 large spec buildings  next to Visalia’s largest private employer VFCorp (1200 workers strong) in 2018  and quickly filling them up.

For he past few decades DDG has built several complexes adding up to more than 2million square  in Visalia with one large cluster of buildings close to Plaza and 198.The firm manages over 8 million square feet of  industrial properties from Visalia to Fresno,more than 45 buildings.

DDG is looking a few years out with plans published to build 2.8 million square feet in 8 buildings on 150 acres they bought from the Doe family on the northwest corner of Plaza and Riggin – clearly Visalia’s hottest address.

Now there is a new player the spec game. YS Holdings Inc, LLC has purchased 38 acres in the Visalia Industrial Parkand is building two 300,000sf buildings near Kelsey and south of Riggin close to the new Millipore Sigma building under construction now.  The two buildings are being permitted by the City of Visalia right now  Construction is set to begin into first quarter of 2020 says veteran  Visalia builder Basil Perch, the contractor on the job.

While the buildings are spec at least one is likely to be used  by the developer for one of his companies say city sources.

All this construction is helping the permit values to go sky high in Visalia.Right now new commercial valuation is up over 200% this year so far to nearly $50 million.

If you need spec building in a slightly smaller size, architect Thom Black has an 87,000sf warehouse building available on Sunnyview. Several developers have 25,000sf spec buildings  for lease and others like Pickett Construction build in 5000sf size for smaller business operators.

Realtor Audino says he recently leased a large space to packaging company Sonoco packaging as well as 2 smaller 10,000sf spaces, one to Jasper Engines and other to JB Hunt to warehouse furniture for the new retailer in town, Bobs Discount Furniture.

Meanwhile the City of Visalia moved forward with the plan to make it easier to ship and receive goods and move people from Hwy 99 and the Betty Drive interchange agreeing to further widen Riggin that links to the interchange after crossing over the UP tracks.

This past week council approved a plan to spend $39 million to widen Riggin to 4 lanes between Kelsey, where the UPS hub is, all the way past Mooney heading east.

A staff report explains that “due to the current economic climate and low interest rates, TCAG has initiated options to bond for select projects within Measure R regional and therefore has solicited the City if it wishes to advance regional projects through bond financing. Currently, TCAG is pursuing advancement of Measure R regional funds that will allow the City to deliver the Caldwell Avenue project from Santa Fe to Lovers Lane by 2020 and a portion of Riggin Avenue by 2022.”

-December 7,2019-

The new Betty Dive interchange in Goshen is drawing plenty of commercial interest this fall, what is now Visalia’s most northern highway entrance into the industrial park and the booming northern parts of Visalia.

County economic development manager Mike Washam says a new Chevron “superstation” is under construction now at the southeast corner of the interchange that will feature not just a gas/convenience store but a drive-thru coffee place and a Burger King, the first national fast food chain to commit to Goshen.They could open this summer.

On the north east corner where the former Mack Lazarus trailer sales used to be, Visalia’s Omni Development is building an even more ambitious highway commercial complex on 16 acres. The headline here is that a big TA travel center will be part of it along with pads for three fast-food operations.

TA claims to be the largest publicly traded, full-service travel center company in the United States with over 270 locations. In the Valley there are TA stops in Bakersfield and Livingston on Hwy 99 and in Lost Hills on Hwy 5.

Add in a hotel and a 14 to 24 station Tesla supercharger station says Omni’s Luis Mota. The site also include an AM-PM station says Mota whose partner in Omni Development Group is Samer Sabbah.

The cluster of highway-related uses looks to mirror Kettleman City along Highway 5 as a pit-stop for travelers that also features a big Tesla charging station for cars the don’t need to stop for gas.

Besides development on the eastern side of the Betty Drive interchange -Goshen’s open land westside is calling to home builders with plans for 400 homes to be built by locally-based Smee Homes says the county’s Washam he adds that it has drawn interest from other builders now. “I would not be surprised if Goshen could see 1000 homes in this part of the town (west of 99) in the future.”

This is all pretty heady stuff for a this dust blown Hwy 99 farmworker community known for its high poverty rate and few services.To say the least, Goshen has never shown up on developer’s radar screen, other than some ag uses.

The coming of the big TA truck stop means motorists and truckers on Highway 99 will have a choice for fuel and food a few miles apart between all three of the big truck/motorist travel centers including newcomers Loves and Flying J in Tulare and now TA in Goshen, all helping to reduce the average gas price we all pay with stepped up competition.With all the traffic moving in and out of the industrial park both now and in the future, home to the new UPS superhub opening next year, this is going to be a busy place.

High cost of diabetes cited in Congressional report 

Congressman T J Cox released a report recently on the economic burden diabetes has on the21st District that he represents including Kings

County •14,000 seniors and Medicare beneficiaries in District 21 are diagnosed with diabetes.•Families pay $1,240 annually out-of-pocket for insulin.•25% of patients with diabetes have rationed their insulin.•In the district, the top 50 diabetes medications cost the Medicare program and beneficiaries approximately $12.1 million in 2016.

•There are an estimated 75,000 uninsured residents in the district.

“The high prices of prescription diabetes drugs in the United States place a significant economic burden on both taxpayers and patients, including Medicare beneficiaries and uninsured patients in the 21st Congressional District of California,” the report concluded.

More than a mile long, the elevated rail structure will cross Hwy 198

-November 26,2019-

The Board of Directors of the California High Speed Rail Authority has approved construction of an elevated platform/viaduct or bridge that will house the proposed Kings/Tulare rail station just east of Hanford.The news was announced by CEO Brian Kelly just before Thanksgiving.The station was changed from an at-grade to an elevated design, what will be the most visible construction project in Kings County over the next year.

Central Valley Regional Director Diana Gomez says contractor Dragados Flatiron has been given the green light to start construction in early December on the structure that will span more than a mile carrying north and south bound trains on an elevated platform some 6000 ft from the station site near Lacey Blvd to Highway 198 and over before dropping back to ground level. Construction of the huge bridge could take 9 months to a year expects Gomez.

Kelly says in his monthly CEO report that the station configuration change approved by the City of Hanford and Kings County “yields several benefits including that most the right-of-way required to complete the structure (which has a smaller footprint) has already been acquired and handed over to the contractor. In addition, with this change the Authority will not need to modify the Union Pacific Railroad line at this location nor will we need to relocate a major PG&E transmission line. This change includes refining the station location which necessitates an environmental re-examination but does not create a constraint to starting construction of the viaduct structure.”

The design allows multiple HSR trains to travel on the elevated viaduct while the so-called Cross Valley Rail line, at-grade, can be accessed steps below allowing passengers to travel by rail in the future east/west to Visalia without leaving the regional station.

An elevated station is also being planned in Bakersfield on a larger scale that might have a similar appearance. Travelers driving to the new Kings/Tulare station would approach from Lacey Blvd and the Highway 43 roundabout.

Gomez says the viaduct structure will be built before the finished design is nailed down with CHSRA expecting a contract to design multiple stations put out for bid soon.

New settlement

Helping to accelerate construction in Kings County CEO Kelly also announced a settlement with Dragados/Flatiron “ addressing a series of delay costs associated with securing right-of-way, utility relocations, third party agreements and Authority directed changes in design and scope. Per the delegation of authority policy, I reported to the Board Chair that this settlement had been reached. Through this agreement we have cleared the costs associated with these delays through a modification to the contract budget of $133.9 million and a time extension to April 18, 2022. A comprehensive analysis by the Authority’s independent auditor helped inform this agreement and, because of this agreement, a potentially higher potential risk exposure has successfully been avoided.” He adds that the agreement “provides completion date certainty both to the contractor and to the Authority.”

Another major hurdle will be crossing the Kings River from Fresno County, a leg that has been delayed by complexities explains Gomez, including right way condemnation, agreement with Fish and Wildlife, BNSF agreement and utilities relocation. While CHSRA has settled with Kings County some months ago over their long dispute, they are still trying to work with farmer John Tos who has not dropped his lawsuit. Tos’s land is next to the Kings River project.

Gomez says looking ahead to the new year, contractors will start on 8 new structures along the route in Fresno,Kings and Tulare counties.

One million dollars from the CHSRA funding has been given to Kings County some months ago as a result of their settlement the has now been turned over to Corcoran to fund a new Veterans park in town.

-November 18,2019-

Singapore-based Olam International is buying into one key California ag business while it is exiting another. They recently announced the purchase of almond processor Hughson Nuts even as they plan to shutter their big processing tomato business up and down the state.

The difference in a nutshell, one crop is making money and the other is apparently not.

Lemoore layoffs

Olam said they will close two north Valley tomato processing plants and last week put workers at their big Lemoore facility on notice that they would lay off 79 workers in December and look to sell off the plant before next years season begins. The harvest is over now.

The company filed a state required WARN notice to that effect on November 16. The Kings County facility employs 230. Also WARN notices in October announced layoffs by Olam of 102 in Woodland and 102 in Williams California – each to close by mid-December, just in time for the holidays.

Between all three Olam plants they are the largest processing tomato producer in California. In the past few days Olam released this statement regarding Lemoore.

“Olam has taken the difficult decision to cease its industrial tomato operations and to scale-back its retail operations at the Lemoore plant.

This has been a very difficult decision, taken only after careful consideration of the future of the business which is facing higher costs in a very competitive marketplace. Regrettably, this decision will result in some layoffs. We extend our gratitude to every employee for all their hard work and dedication to the business and we are speaking directly with each individual who is impacted.

We are assessing multiple options for the future of the Lemoore plant including exploring interest from other parties who may wish to take over operating the plant from 2020.

Ahead of planning for the new season, we are communicating with our growers and suppliers, and working with customers to enable them to transition to alternative arrangements.”

A few weeks ago the company announced its decision to cease all operations at its canning plant in Williams. “The plant will ramp down operations until all shipments are fulfilled by the middle of 2020, after which we will close the site.”

The 3 company plants were all former SK Foods facilities that went bankrupt in June 2009, owned by Kings County businessman Scott Salyer.

Olam bought the facilities out of bankruptcy.The Lemoore plant does not can tomatoes here unlike the Williams plant, but processes tomatoes for the food service industry in industrial containers, glass and plastic jar retail sizes.

The most recent California tomato harvest was said to be a million tons less than expected, down to 10.07 metric tons. California produces about 95% of US supply and about one third of the world supply used for ketchup, salsa, tomato paste and sauces.

Source say the industry has a perennial oversupply problem in what has been a boom and bust business. Meanwhile costs continue to go up including water, labor and regulation even as competition worldwide is tough.As yield per acre has gone up in the past decade the industry can produce the same amount on fewer acres.The industry average yield has more than doubled in the past few decades. It was under 20 tons per acre in the mid 60s and in the 30s as recently as 2006. In 2019 the yield come in at 50 tons an acre. But the price per ton in the $80s a few years ago is around $75 per ton today.

Demand issue

Olam said in a news release” that it has taken the decision to cease all operations at our canning plant in Williams. This has been a very difficult decision, but regrettably the Williams plant is unable to compete in a marketplace, which continues to face cost pressures and a falling demand for canned food.”

Fresno,Kings and Merced counties are the most productive on a yield basis for processing tomatoes but now someone will have to step up to keep this industry viable.

In the past, companies have mothballed older food processing plants as they face competition from new new state of the art plants.

Recipe for red ink

An issue at the Lemoore plant over the years has been their wastewater problem and the odor that everyone who drives on the Avenal Cutoff road knows. Olam processes approximately 750,000 tons of tomatoes annually at this plant and this requires lots of water.

The City is in the process of building new water treatment facilities and a new well at a total cost of more than $30 million and the tomato plant will soon have to pay a higher rate.

New water rate for Lemoore industrial users will go up from $1.47 per unit in 2017 to $3.61 in 2020 when the facilities begin operating – a 2.5% jump.

The town’s biggest industry, cheesemaker Leprino will have to pay higher rates as well.The company employs 1300 full time here.

Higher costs for water is being driven by upcoming pumping restrictions and the need to reduce arsenic in drinking water in Kings County.

So water related processing rates are going up and product prices for tomatoes remain flat. Sounds like a recipe for red ink

-November 8,2019-

High-Speed Rail Authority Completes Environmental Clearance into Bakersfield

Action clears way for Authority to move toward project construction into Bakersfield

This week the California High-Speed Rail Authority issued the Record of Decision for the final 23-mile route between Shafter and Bakersfield in the Central Valley.  This completes the state’s environmental review process between Fresno and Bakersfield and allows the Authority to move toward project construction into Bakersfield.

The new route (green/light blue on map) swings east over to Highway 99 shortly after leaving Shafter heading south and  into Downtown Bakersfield.

“I’m proud of the collaborative and cooperative effort that went into this process.  Together with our local partners, we are prepared to move forward on project implementation into Bakersfield in a manner beneficial to the project, the city and the county,” said Authority CEO Brian Kelly. “We look forward to a continued partnership as we enter this next phase of the project.”

-November 7,2019-

San Joaquin Valley Homes buying Hwy 198 land

Visalia-based San Joaquin Valley Homes wants to buy about 11.22 acres near Shirk and Hwy 198 from the City of Visalia to build a new home subdivision. The surplus land is located south of Hillsdale Ave and north of Highway 198 and east of Shirk Ave. The price is set at $1,100,000 that will go into the city Civic Center fund.

In 2006 the city acquired 17 acres north of Highway 198, east of Shirk.The staff report says this property was acquired to help provide a scenic corridor coming into the City of Visalia. The land had lay fallow until 2015 when the City decided to plant the acreage in walnuts. Since that time, the cost of managing and growing the walnuts have far exceeded the original proforma and staff has recommended the removal of the nut trees and the sale of the property. Zoning of the 11 acres does not yet allow residential development but the builder apparently has some assurance that it will be.The purchase leaves 200ft of trees that fronts on the highway.

Building activity stays strong in Visalia

Building activity is staying strong through October in Visalia. New home permits are up 27% through October compared to the same period last year  The number of new commercial permits are up 71% and their value is up 188% to $65 million. That includes the new 425,000sf UPS hub complex being built on Plaza Dr in the industrial park and several other industrial projects.The total of all kind of permits are up 23%.

Higher milk prices lift dairy industry here

With cheddar cheese prices at multi-year highs and world demand for our dried milk powder up as well it’s providing some rare good news for California dairymen, the county’s largest industry.

Reports say October was the biggest month for cheddar barrels in more than 15 years as the price jumped from $1.69 to $2.2875 – nearly a 60ȼ increase. As for milk powder Mexico continues to buy our dried product in large volume and even China is buying 30% more skim milk this year compared to 2018. World demand is helping to lift US milk prices. California dairies are receiving an average price of $20 per cwt this November.Tulare County dairies got an average of $15.30 per cwt in 2018 says the ag commissioner.

 TeVelde’s Tipton ranch cows & property to be sold off

Things may be looking brighter for those dairymen who made it through the tough times but that did not include GJ TeVelde who has lost a several large dairies to bankruptcy in Oregon and California. That includes two huge ranches in the Central Valley –  the GJ TeVelde Ranch in Tipton, and Pacific Rim Dairy in Corcoran with a combined total of 53,382 cattle.

The Tipton ranch cows remaining include 4000 head that will be sold off at auction set for November 15.

Meanwhile,the Tipton property has been court ordered to be sold. The judge in the case has approved the sale of nearly 2,000 acres and the equipment for $28.75 million. The property is being sold to Fresno-based Maricopa Orchards with the closing expected in January 2020.

Maricopa is owned by the Assemi family who has moved big time into the pistachio business and now have a legal spat ongoing with Wonderful Pistachios, California’s largest grower. The family is establishing its own pistachio processing plant to open in August 2020 under the name Touchstone Pistachio Co and no longer market their nuts with Wonderful.

The Corcoran dairy on 2,700 acres has been described as being upgraded with a manure digester to improve its environmental performance and to make it more appealing to potential buyers. It is listed at $56 million.