Welcome to J.M. Equipment!

As you may know, the vacant Sexton Chevrolet dealership is quickly filling up with a top flight user--who is not only the perfect user for the location, but a user who will fill the gap in sales tax revenues that was lost when Sexton closed.

Many players both inside and outside of City Hall worked very hard to make this business relocation and expansion a reality. It is proof positive that Manteca means business!

Here is a story in today's Modesto Bee about our latest corporate partner:


J.M. Equipment leaving Modesto, Stockton shops
Firm will consolidate in Manetca
By J.N. Sbranti
mailto:Sbrantijnsbranti@modbee.com

For 74 years, Modesto has been the J.M. Equipment Co.'s corporate headquarters and oldest store. That's about to change. The company is closing its Modesto and Stockton shops, merging its staff and moving to Manteca.

The move will affect 80 workers, including about 55 in Modesto.

"We're going to try to hang on to all our employees, but we know it's going to be tough for everyone now working in Modesto (to commute to Manteca)," said David Baiocchi, one of the company's co-owners. "We're going to work with scheduling to help everyone we can."

Baiocchi and five partners, all of whom had been J.M. Equipment employees, bought the company in 1999. The deal included a 10-year lease for the Modesto and Stockton stores. Since that decadelong obligation ended, the company has been trying to leave.

"If you were on Ninth Street, you would want out, too. It's a pretty bad neighborhood," Baiocchi said of the 3.7-acre facility at 819 S. Ninth St. in Modesto. "There was a shooting next door to us a few weeks ago. It was a random act of violence."

It wasn't always a rough neighborhood.

Jack Moore founded the company in 1936 as an Allis-Chalmers tractor dealer. It was conveniently located with Highway 99 and rail access. The site was so popular during World War II that it was used to build Jeeps, Baiocchi said.

Over the decades, the company opened locations in Stockton, West Sacramento, Fresno and Patterson.

The chain sells and services agricultural and material handling equipment throughout the Central Valley. That includes farm and hay equipment, feed boxes, forklifts and nut harvesting machinery.

"We have 60 vans on the road," Baiocchi said, "because we go to our customers to service the equipment."

He said employees can service anything within a one-hour drive of a store.

"Having stores within 30 minutes of each other in Modesto and Stockton didn't make sense," Baiocchi said. "We needed to consolidate."

So the company jumped when the perfect spot at a bargain price became available.
Manteca's Sexton Chevrolet closed in June, and GMAC took possession of the 7-acre site in November in lieu of foreclosure.

"GMAC was desperate to sell it," said Baiocchi, noting that it would have cost his company far more to build something smaller elsewhere.

The company paid $3.5 million for the property, including its 32,000-square-foot building, at 321 Spreckels Ave.

The deal closed Dec. 29.

"The parts and service departments and the showroom are already there," said Baiocchi, noting that the dealership was built just eight years ago. "All we've got to do is clean up and paint."

The company plans a grand opening for April in Manteca, but it has not announced specific dates for closing the Modesto and Stockton stores.

In addition to the Manteca shop, J.M. Equipment will establish spots in Turlock, Stockton and Lodi where customers can drop off parts for serv- icing.

That is supposed to help the company improve efficiency and lower costs, while providing customer convenience.

J.M. Equipment's Patterson store, at 16507 Highway 33, will have its service capabilities enhanced. A full shop and field service department will open there this spring.

The Modesto and Stockton properties are owned by George Betker of Oakdale. Betker said he will try to find new companies to buy, lease or rent the open space.

"Industrial property isn't the hottest thing on the market," Betker acknowledged. The Modesto property includes about 36,644 square feet in seven buildings.

Bee staff writer J.N. Sbranti can be reached at jsbranti@modbee.com or 578-2196.

Read more: http://www.modbee.com/featured/story/1023021.html#ixzz0dlvEj9ZF

Process Problems

Thursday's SacBee chronicles the Facilities Permit Program (FPP) which was launched by the City of Sacramento four years ago to help facilitate economic activity in the community (link here).

FPP is designed to push along development of commercial and industrial facilities by allowing companies to begin work on multiple aspects of their projects with a single building department approval. Projects are still subject to inspections, plan reviews and permit requirements, although permits are issued when work is completed instead at the onset of the project. Full drawings and project submittals were required before work could begin.

The City Attorney, who apparently was not aware of the program, now claims that the program is probably not legal. Staff believes that with minor retooling, the program can be adjusted to be consistent with local and state laws.

The process enabled the fast tracking of over 1,500 tenant improvements in 50 large buildings. It likely saved many projects that might have gone to another jurisdiction if improvements had to follow the usual lengthy process.

This issue is typical of the challenges faced by city planning and buildinig departments. Cities are under tremendous pressure to deliver projects quickly to ensure their success--state regulations often make this a herculanean task--and give project opponents the opportunity to slow or kill projects with red tape.

More Good News

While we are still basking in the glory of the latest sales tax numbers, I thought I'd pass on some additional data that demonstrates how Manteca is outperforming our adjoining cities. The Council of Governments collects a Regional Transportation Fee (RTIF) based on the amount of development annually built in each San Joaquin County jurisdiction.

I recently received the annual report on RTIF collections. Obviously, collections were not exactly robust in 2008-2009. However, without Manteca, collections would have been downright depressing.

While Manteca comprises approximately ten percent of the county's population, we were responsible for nearly 40 percent of all the RTIF revenue collected county-wide. In addition, the report shows that out of 414 single family permits issued countywide in 2008-2009, 237 came from Manteca. Tracy, Ripon, Escalon and Lathrop issued a cumulative total of two residential building permits this past fiscal year. Manteca was also the home of nearly half the office development in the county during this time.

Since the RTIF program was put in place several years ago, Manteca has issued nearly half of all the single family building permits countywide and nearly half of all the retail and office permits in the county. With the spate of building activity this year, I expect Manteca to continue to be the county leader in most types of construction.

These numbers are yet another vindication for the economic development policies promoted by our City Council during this decade.

I've attached the data below regarding the program if you'd like to see the detail.

RTIF.pdf
rtif-2.pdf

Economic Development Update

B.R. Funsten: Significant work on the B.R. Funsten industrial warehouse project has been completed, several weeks ahead of schedule. The new warehouse at the facility, located at South Main and Industrial Park Drive, is finished, and the internal racking system was installed beginning on Saturday, November 14. Warehouse inventory from the Fairfield facility is being relocated to Manteca, and should be completed by December 23. New asphalt paving, landscaping and exterior paint is being finalized, and the entire facility looks extremely impressive.

Promenade Shopping Center: Construction work is accelerating at the Promenade Shopping Center south of the Highway 120 Bypass for new luxury outlet space. Staff and the developer anticipate funding will be approved within 60 days, which will allow for two, new additional buildings to be constructed. Construction is still on schedule for the Hampton Inn/Suites to be finished in March 2010.

NUMMI Closing

I originally blogged this AM about the pending decision on the fate of the NUMMI plant in Fremont. Here's an update.

Breaking News from the San Francisco Chronicle:

(08-27) 13:01 PDT FREMONT -- Workers at New United Motor Manufacturing in Fremont assembled in a giant meeting hall this morning to hear plant manager Kunihiko Ogura deliver the news that Toyota has decided to halt production at the factory in March, a move that dooms about 4,700 jobs inside the plant with huge ripple effects throughout California. Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/08/27/BU6919EL3P.DTL#ixzz0PQBy7eAu

The 4,700 jobs in Fremont are just a small percentage of the total job loss that this plant closure will create in the Bay Area and the Central Valley. Local economists conservatively estimate that nearly 10,000 manufacturing jobs in San Joaquin County are dependent on the NUMMI plant. A good chunk of the domestically produced parts for the vehicles came out of plants in San Joaquin County. The NUMMI plant closure could increase our local unemployment rate by as much as 5 percent!

As is typically the case, the state of California was very slow at reacting to the pending plant closure. There were a number of bills plodding through the legislature to provide incentives for NUMMI to stick around. Even though Toyota had made it clear that a decision was coming in late August, the earliest any legislation could have passed would have been mid-September. (click here for an article that discusses the state's glacial progress in providing incentives)

While it still may not have staved off the closure, it is symbolic of the absolute inability of our legislature to do anything right--and further reinforces our state's anti-business stance. While I hope this will serve as a wake up call that California can't continue to run businesses out of our state, only time will tell.

In the meantime, the business leadership in San Joaquin County needs to help its existing industrial base survive this serious blow.

One Stop Permit Center

The City of Manteca's long-awaited "One Stop Permit Center" will be holding its grand opening celebration on Thursday morning. The $400,000 project is designed to process and expedite all planning, building, business license and limited Public Works/Fire development-related activities in one location. In addition, clients will now be able to pay all related fees directly at the new Permit Center location, thus avoiding an additional stop at the already over-burdened Finance Department counter. Business licenses will now be processed at the new Permit Center, and minor activities normally processed at the Public Works Department counter will now be handled at the new center.

This project is emblematic of what we are attempting to accomplish with service delivery of all city functions. This project not improves service delivery, the consolidation of functions will save the city over $200,000 per year. In addition, like most projects this past year, we were able to scale back the project without reducing the benefits to the public. By reducing the original budget by 70 percent, the operational savings realized by this project will pay back the capital cost in less than two years.

I realize that there will still be some critics of the project, who feel like we shouldn't be expending any capital dollars in the current economic environment. However, if we had decided to be penny-wise, we would not only not realize the future cost savings, but likely discourage future development projects from choosing Manteca as a business-friendly destination.

In other words, if you have a project that can save money, be delivered cost-effectively, provide better service to the public, and generate future revenue to the city and jobs to the public, how could we possibly not do it?

Time for a Local Currency?

Tired of seeing all of your dollars leave town? Convinced that your retail expenditures only support someone on Wall Street or at Wal Mart headquarters? There are a number of communities interested in making sure that your expenditures stay in the local economy. They've done that by creating their own local currency.

Believe it or not, it isn't against the law create your own currency. A national currency was established around 100 years ago as a convenience--but it also made every region of the country more vulnerable to the ups and downs of the national economy.

An article in the Los Angeles Times (click here) today talks about the growing trend of communities creating their own currency. Here's an excerpt from the article.

"Right now there's a lot of interest because of the economy, but a lot of these efforts come about to rebuild social capital," said Ed Collom, a sociology professor at the University of Southern Maine who studies local currencies. "There's been concern about lack of trust, neighbors not knowing each other. They see this as a way of neighbors helping each other.

"In Detroit, for example, the Cheer was created not due to the city's chronic financial woes but because bar owner Jerry Belanger wanted to encourage patrons to support new local businesses. He issued notes good at neighborhood merchants, backed by a cash reserve at his bar. The idea caught on fast, and other taverns agreed to help back the currency. There are now $3,000 worth of Detroit Cheers in circulation after about four months."It's like a wink or a secret handshake," Belanger said. "People want to demonstrate they care about the community."

In Mesa, Ariz., a city of 450,000 east of Phoenix, the motive has been purely financial. The city has no property tax and relies almost exclusively on its sales tax for revenue. Receipts plummeted 12.5% in the last quarter of 2008. Johann Zietsman, director of the city's Arts Center, noticed that only 30% to 40% of seats were selling as people tightened their belts.

Thus Mesa Bucks were born. Shoppers who spend money at stores in the city limits can bring their receipts to the Arts Center and receive a percentage of the sales tax they paid as Bucks. Right now the currency can only be spent at the Arts Center and city museums, but officials are talking with two malls about distributing them and believe some local merchants will accept Bucks.

I'll be watching this trend more closely. It may be a project for our local businesses to consider as the economy continues to suffer.

Good News

Hopefully, most of you read about B.R. Funsten's expansion plans in last Tuesday's and Wednesday's Manteca Bulletin. I hadn't blogged about it due to the great press coverage, but I didn't want the positive vibe to go away just yet. So I thought it was worth talking about one more time.

During tough economic times, business establishment drops to near zero. Economic developers realize that protecting your base is critical during these times. As business look to cut costs, most companies are consolidating, not expanding. This makes business retention the most critical element of any economic development strategy.

B.R. Funsten is a classic example of how to benefit from a strong business retention strategy. In order to save dollars, they decided to consolidate a number of facilities. Due to the age of their existing building in Manteca, they were looking for a newer building (likely in Stockton) with an owner anxious to sell in the current downturn. However, management staff was also concerned that moving all of the company facilities at once could create possible disruptions in business--a big no no, in these tough times.

In order to stay in Manteca, they needed assurance that they could have their newly expanded facility completed by the end of the year. With the new permit center nearly complete, we were able to convince the company that Manteca could deliver on its promise to expedite all permitting and plan checking. In addition, we have existing staff with the experience to expedite these types of projects--further giving them confidence in our ability to deliver.

I also believe that all of the new development in Manteca gave them further confidence that they were investing in a community with a bright future. They were also happy with the safe, family-oriented environment here they had experienced over the past decade.

At the end of the day, it is the progress that Manteca has made as a community, and our commitment to the future that kept B.R. Funsten in town. In return one of our city's top sales tax producers will not only be sticking around, but they'll be more than doubling their business emanating from our community. It is a true win, win for the company and our citizens.

Now it is up to our staff to make sure that we deliver on our promise to get the building finished by the end of November. Since failure is not an option, staff will be meeting bi-weekly to monitor the progress of the project and I will get personally involved whenever necessary to keep the project going.