In the first of what are to be dual, and perhaps dueling, state of the city addresses for Upland this year, the Upland Chamber of Commerce put on an event at a spacious hangar at Cable Airport on Tuesday March 22 that featured presentations from Upland City Manager Rod Butler, Upland Development Services Director Jeff Zwack, regional economist John Husing and Harris Koenig, the president and chief executive officer at San Antonio Community Hospital.
Butler provided an economic development update for the city, speaking of key projects and new priorities. He said the relationship between the city and the chamber was important and it was demonstrated when an Upland family was recently temporarily forced from their home by a sewer backup. Through contact with the chamber Butler was able to locate temporary housing for the family at a local hotel immediately and at reasonable rates, he said.
“Upland is not bankrupt,” Butler said. “We actually have some good trends and had a very good year. According to the city’s audited financial statements, in the 12 month period from July 1 through June 30, 2015 we actually had revenue of over $49 million into our general fund against $42 million in expenditures.” The city did well, Butler said, in large measure because of a “one-time legal settlement,” though he touted other fiscal progress for the city’s nascent recovery.
“Three things
have allowed us to come back,” Butler said. “Obviously the economic turnaround is driving sales tax revenue and property tax revenue,” he said. He credited former city manager Stephen Dunn and the city council with “making some very tough decisions in the two year period between 2011-3013 that reduced expenses as a result.” He said, “The city’s cost structure came down. We have had some one-time legal settlements.” He said that all of the city’s departments had managed to carry out their functions efficiently and with an eye to the bottom line.
“All of the departments stayed below budget,” he said. “Every single department came in below their budgeted amount.”
Butler, who was raised in The City Of Gracious Living, departed from the city’s financial picture to remark on quality of life issues. “Upland is still a very desirable place to live,” he said. He cited the city council’s approval of its general plan update as a significant accomplishment. Making oblique reference to the controversy that attended the consideration and approval of the document, which provides a blueprint for the future development of the city, Butler said the objections of some residents to the increases in density envisioned in the document made the approval process “more crazy and zany than we thought it would be.” But he said revamping the city’s development codes and playbook was not only necessary but overdue. “It was last updated 33 years ago,” he said. Butler sought to look past the controversy, saying, “Whether you realize it or not having an updated modern general plan and zoning code is a big accomplishment.
The city manager returned to themes of finance, hailing a tax sharing agreement with Ford of Upland and CNC Motor that will facilitate those dealerships establishing sales operations next to the 210 Freeway. He pointed to the hiring of “key members of the city’s management,” including police chief Brian Johnson, fire chief Paul Segalla, deputy city manager and city clerk Jeanette Vagnozzi and Scott Williams. He said the city had added four new full time police officers and that it had completed the drafting of a five year financial planning and economic development plan.
In looking toward future developments, Butler evinced optimism and confidence that what he referred to as the “Pattison property,” would soon undergo a revival, “The Yavitz Companies that has developed and transformed a lot of shopping centers and Albert Pattison, who owns the property on the north side of Foothill known [just east of Euclid] as Upland Village Center have entered into escrow. Without going into a lot of detail, it is a very underutilized center and we’re excited Mr. Pattison has decided he wants out. Yavitz is very experienced in rejuvenating shopping centers. We’re not going to be dancing in the street just yet but Yavitz has multiple letters of intent for the leasing of both restaurant and retail space. There will be some renovation, some new building and some existing buildings knocked down. They are going to add something exciting and totally revamp that center. We think it is going to be a much better use of that property. We are doing everything we can inside City Hall to get toward the finish line.”
Husing’s remarks were focused on trends and issues in the Inland Empire, with occasional reference to accompanying statistics for Upland.
“The major economic challenge to the Inland Empire is the education of our labor force,” Husing said. “Forty-seven percent have a high school education or less. That population is barely able to work in the modern economy.” He said that Upland’s residents were more highly educated than those in the region as a whole, with 33 percent of adults in Upland having and educational level that topped out at having a high school diploma. Husing said education was “where the high end jobs lie. Health care [positions are] continuously growing. They pay just under an average of $55,000 per year. Those jobs deliver enough money to put people into the middle class. Husing said the Inland Empire had also recently transformed into a magnet for “sophisticated warehousing operations where you have a lot of people working with more sophisticated tools.”
He said the region has seen a 95.6 percent improvement since 2000 in the level of diesel pollution with just 5.3 days over the standard deemed unhealthful compared to 120 previously.
Husing said petroleum prices are back at 2003 levels, boosting the overall and the local economy.
Husing said the Inland Empire’s location proximate to the ports of Los Angeles and Long Beach made it an ideal location for logistics operations. Husing said the Inland Empire, consisting primarily of San Bernardino and Riverside counties, was “at the forefront of the construction of warehousing and industrial facilities. With more containers coming into California’s ports, container volume is up. Amazon, Fed Ex, Home Depot and other operations are creating fulfillment centers [locations where on-line orders are responded to and where merchandize is warehoused and from which those stocked products are shipped]] and buying on line is now driving the Inland Empire economy. He said 750,000 square feet to over a million square feet of space to house warehouses, shipping centers and industries are now under construction. Logistical operations and fulfillment centers he said, provide “more jobs per square foot” than traditional warehouses, which average one worker per 35,000 square feet. Husing said fulfillment centers average one worker per roughly one thousand square feet. “These are labor intensive job generators,” Husing said. Whereas the workplace is increasingly demanding in terms of the education workers must have to be employable, the logistics industry is one of the few exceptions to that where workers with a high school education or less can get jobs that pay on average $45,000 per year. “This is one of the few places where people who are not well educated can do well in our economy,” he said.
According to Husing, in 2007 California had 15,844,325 people at work but the state lost 1,178,158 jobs during the recession. Since 2011, the state has gained 1,809,542 jobs, so that there are now 630,483 more people employed statewide than in 2007, a four percent gain. In the Inland Empire between 2008 and 2010, Husing said, 140,650 jobs, or 10.8 percent were lost. From 2011 until 2015, 196,896 jobs were created in the Inland Empire, which represents 56,058 jobs above the previous high point of employment regionally.
The Inland Empire has exhibited at best lukewarm private sector job growth in terms of the quality of remuneration associated with the new jobs, Husing said. Some 2.1 percent of the jobs gained from 2011 until 2015, or 4,358 in total, provided what he termed high pay, or over $55,000 per year. He said 33,533 of the new white collar private sector jobs, or 16.3 percent, offered moderate pay, between $45,00 and $55,000 per year. New blue collar jobs, remunerating workers between $45,000 and $55,000 per year, accounted for 80,858, or 39.4 percent of the new job growth. Disappointingly, he said, 42.2 percent of the new jobs, or 86,608 offered lower pay, which he defined as under $30,000 per year.
With the 58,692 jobs it gained in 2015, the Inland Empire experienced the second highest rate of job growth in the state, Husing said.
Unemployment has dropped to 5.8 percent in the Inland Empire, Husing said.
In the Inland Empire, Husing said, 18.2 percent of all of the population is living at or below the poverty level, which he defined as less than $2,000 of income per household per month. He said that 25.4 percent of the Inland Empire’s residents under the age of 18 were living in poverty. In Upland, he said, the statistics were slightly more favorable with 15.1 percent of the entire population in poverty and 17.3 percent of those under the age of eighteen who are under similar financial distress. He said there was powerful growth in the logistics industry and that logistics jobs pay a mean of $45,677 per year. Building permit valuation is slowly but steadily increasing, Husing said.
One factor retarding growth in the Inland Empire and throughout California, Husing said, is the cost of electricity in California, which is the highest among all states west of the Mississippi. Five percent of job growth in the Inland Empire between 2011 and 2015, Husing said, was in the manufacturing sector, consisting of 10,408 new jobs.
The number of underwater homeowners in the Inland Empire has reduced significantly, with negative equity having dropped from 54.9 percent in the fourth quarter of 2009 to 11.4 percent in the third quarter of 2015.
Husing said interest rates are low again, encouraging home sales, though the residential real estate market is not exactly on fire. He addressed home price trending in the Inland Empire, saying that just before the recession, after the “crazy financing” that went on between 2005 and 2007, the average price of homes in the Inland Empire rose to $389,924. With the devaluation of property that occurred during the recession, that average bottomed out at $155,319 in 2009. Inland Empire home prices have now returned to an average of $284,853. In Upland, he said, the average price of a home in 2007 topped out at $582,600, then dropped down to a low of $334.222 in 2009 and have now come back to $489,891.
Husing said the strong dollar against foreign currencies has been of benefit to local companies engaged in importing but has not been favorable to companies involved in exporting, such as manufacturers.
Traditionally in Upland, as in most other local cities, the state of the city address has been one which features the mayor as the centerpiece. In Upland, the chamber of commerce has for some time been a sponsor of the event, using the forum to generate money. Ray Musser, who has been Upland mayor since 2011, delivered the last five state of the city addresses in Upland. Because Musser is not considered an electrifying speaker, the chamber, in the planning that began last fall for this year’s event, moved toward minimizing the mayor’s role in the festivities. Musser took umbrage at that, leading to a contretemps in which Butler was left caught in the middle. Trying to assuage the mayor, whose pride was hurt, into accepting the diminished part he was being offered, Butler proved unequal to the task, as Musser balked at cooperating with the chamber of commerce, of which he is a longtime member and past president, and opted out of participating altogether. Instead, Butler temporized and left the chamber in the dark about the city’s participation in the event. This left Butler, at least temporarily, in the doghouse with councilwoman Debbie Stone, whose boyfriend, Eric Hanson, is the chamber president elect. Ultimately, Musser refused to participate and instead has scheduled his own state of the city speech for April 19. Musser did not attend Tuesday’s function, which was attended by 164 people, and thus did not see the content nor quality of the presentation, which the community will expect him to match or exceed next month.
One of those who took a central role in the event was councilwoman Carol Timm, who introduced to the crowd the other officials in attendance. Among those present were councilwoman Stone, councilman Gino Filippi, former city manager and police chief Martin Thouvenell, chamber president Terry Jeffers, Upland activist Eric Gavin, Cable Airport owner Bob Cable, Chamber executive director Terry Gallardo, former city manager Stephen Dunn, auto dealer Richard Mayo, city treasurer Dan Mogan, police chief Brian Johnson, and Second District County Supervisorial Chief of Staff Andy Takata. Sponsors of the even included DoubleTree Hotel, Inland Productivity Solutions, HHARP, Galleano Winery, Brandt Family Winery La Villa Bella, Grocery Outlet, Rok Brewing Company Southern California Edison, Fontana Mayor Acquanetta Warren, Upland Councilman Gino Filippi, Chaffey College, Mountain View Chevrolet. The Upland Police Officers Association, Dawn Kasnick AA U-Stor-M, Madole & Associates Visiting Angels Dale Bros Brewery Assistance Insurance Agency, SoCal Gas, Frontier Communities, Cable Airport LKQ, Right At Home, Alta Pacific and Prospect Mortgage.