So. Cal Edison - Back From the Brink

Growth Battle Continues In Visalia

Visalia - On both the West 198 front and south Mooney battleground, the issue of growth in Visalia remains hotly contested this month despite the fact the city council isn't making any key decisions. Although it seems they've already been made, critics are betting that the famous fat lady is just starting to clear her throat.

Costco A Player?

South of Packwood Creek, developer Don Orosco, who has an approved shopping center on the east side of Mooney will now go for a final approval process on the west side of Mooney. Last week the city reviewed Orosco's plan to build a 142,000 sq. ft. Target store relocating the discount tenant from Mooney and Caldwell. The same site plan shows a 148,000 sq. ft. Costco just north of the new Target complete with its proposed Costco gas station and nine pads in the center. City planner Steve Brandt says Orosco is planning next to file an application for a conditional use permit to build the new center - a matter that could be heard by the planning commission in the next few months.

Both the city and Orosco had characterized the development of the west side of Mooney as sometime down the road - 1 to 3 years. But now it appears it's full steam ahead. If it were not for a lawsuit to slow the project, dirt would likely be moving in the next few weeks at least on the east side and within a few months on the west side given that both Target and Costco are ready.

Orosco has said he would back fill the Target store space by knocking it down for a proposed new 88,000 sq. ft. Kohl's store - a Mervyn's type department store that is entering the California market. Other developers in town are wooing Kohl's as well.

But now the question will be what to do with a 109,000 sq. ft. Costco store next to an empty House 2 Home store? What happens to all the tenants in that center that depend on the traffic?

Costco has been talking to the owner of the bankrupt House 2 Home space but can't seem to come to an agreement.

The town could see another empty retail space if bankrupt Kmart closes its Visalia store. That rumor has been making the rounds among employees at the Visalia Kmart who don't expect the troubled retailer to keep the doors open. Kmart is now selling at below $1 per share and the New York Stock Exchange threatened to delist the big retailer even as its in the midst of their Chapter 11 bankruptcy filing. Ironically, the store is located in a shopping center owned by the Ulmann Group - plaintiffs in the suit against Mr. Orosco and the city fearing blighted conditions and empty store fronts if the new shopping center goes through.

Whether the Packwood shopping center that includes Lowes and Best Buy on the east side of Mooney begins construction soon will depend on an August 12 judicial hearing in Tulare County Superior Court. In front of Judge Melinda Reed the city - who must defend the Orosco EIR - will try to get the lawsuit against the project thrown out. Judge Reed could offer a tentative ruling either agreeing to the city's argument that the EIR had been correctly drawn up or let the case go to trial. The suit is being brought by Uhlmann Properties - the owner of the Kmart shopping center and three Visalia plaintiffs.

The standoff over the Packwood center and its potential delay has put off a number of development plans around town awaiting a final decision on its outcome.

The fact that Orosco has to return to the city planning commission perhaps as soon as September for a public hearing and the fact that their decision will likely be appealed to the city council means we are likely to hear about the issue deja vu this fall.

West 198 Battle

Out on West 198 a 3 to 2 vote to approve an auto mall for West 198 between Shirk and Akers also with the beginning of an annexation process and general plan amendment has a Visalia group steamed up enough to hold a strategy meeting on how to get the council to do a U-turn.

Former mayor Greg Collins says a meeting July 24 at 5:30 at the Tulare County Farm Bureau will take up a "multi faceted approach" to sway public opinion against the policy. Collins believes the city approval of the project is still "many months away" given the need by the city to do a full EIR on the 100 acre project, Collins says is clearly "growth inducing" along the city's famous scenic corridor. If unable to convince council during the public hearing process the group could push a referendum by voters - advisory in nature - to demonstrate to council that public opinion is against the idea of the auto mall along West 198.

"We're holding our cards close to the vest."

The issue could be delayed long enough to become part of the give and take of next year's fall election, some believe, when 2 city council seats are open.

---

Imports, Fruit Fly Plague Olive Industry
Where Is The Innovation?

Tulare County - California's shrinking olive industry is being hurt again this year by an increasing tide of foreign imports taking market share as well as a nagging fruit fly infestation that is costing the growers just when they can least afford it.

Olive Growers Council head Adin Hester says Tulare County olive acreage has declined to about 16,000 acres - still almost half the acreage in the state. The county has lost all its processors in the past decade and in the past few years about 1500 acres of olives have been bulldozed. There are virtually no new plantings - a giant statement of no confidence.

Competing against us are about 1 million acres of olive trees in Spain and Morocco - our biggest competitor in the food service industry. The latest news in not good. Imports of olives on a yearly basis are up from last year and Hester says word in the industry is that a major food service customer - Subway Sandwiches has "gone offshore" to buy cheaper Spanish olives - the loss of a $2 million customer. The loss in this case is California processor Musco Olives and the growers who supply them - a number in Tulare County.

These Mediterranean olives are subsidized by their government, says Hester and don't face the same tough environmental regulations that California farmers must face. He says they spray organophosphates on their olives because they have a tremendous fruit fly problem. Hester says other big American food service companies like Pizza Hut have "abandoned the California supplier" because of the bottom line cost difference.

Hester admits that foreign competition - hurting local production "is the same tune we're hearing all over agriculture" right now.

The second major factor facing local olive growers is the spread of the olive fruit fly in the state in the past few years which now has infested Tulare County. The situation is the same in a number of crops and tropical pests here recently perhaps related to global warming - one recent report suggested.

Growers are in the process of forming a pest control district over the next few months that will force local growers to control the fruit fly with a spray "or the district will do it for them and send them a bill." Without that treatment fruit flies can thrive where growers decide they won't pick this year or on ornamental olive fruit trees.

This past month homeowners on Badger Hill bulldozed about 450 historical olive trees that had been growing on the side of the hill for decades because they were a nursery for this new fruit fly.

Hester says treatment of the fruit fly problem is being mandated by the processor who vows to turn away loads if and evidence of infestation is found. "This is costing growers about $100 per acre just to keep this little fly away."

In San Diego County some growers are spraying weekly, but they still get up to 70 percent damage.

Former president of Early California Foods, Ken McCorkle - now a senior ag lender with Wells Fargo, says he is "concerned about the long term viability of the olive industry" along with some other valley crops. McCorkle made a presentation to a Fresno Chamber group this past week suggesting among many crops revenue per acre is declining. Cost increases in labor, electricity, water, chemicals, seed and regulatory compliance are all up making it unlikely in the future that California will continue to be the low cost producer for a number of commodities. Meanwhile prices are down caused in part by consolidation among the retail and food service sectors, international competition and the high value of the dollar. Add to this the fact that California share of water runoff in California has declined by 50% from the two big California water projects since 1984.

McCorkle says western ag has only two business strategies - become the low cost producer or reinvent itself with a premium priced product or service. The only other strategy is to depend on government subsidy, import or supply control. About 12% of California's net farm income comes from the government - far less than Midwest ag who depends by 76% for government income payments.

The solution - provide innovative products and upgrades in quality. In the case of olives that just hasn't happened, says McCorkle.

In the food service sector, "California olives are likely to lose that battle to low cost imports," says McCorkle noting that nobody cares where their sliced olives on a pizza come from.

In the branded olives for retail California still has an advantage but it is likely, he feels, that Spanish olive growers will approach big grocery companies like Kroeger and offer a private label olive cheaper than we can. "I knew we were in trouble when I recently watched a cooking show from California and the chef laid out what seemed like 100 varieties of olives you can get to cook with from all the world and he didn't even mention the California black ripe olive." - because it's too bland.

Woodlake olive grower Everett Krackov says he expects the California olive industry won't make it long term noting that "we started growing olives here during World War 2 because we couldn't get any olives" and its taken this long for the industry to wither away.

That the industry is facing weakened conditions from low revenues - less water and pestilence at the same time reminds some of how natural selection happens - too weak to fight off the pest some other survivor is the winner.

---

Children's Museum In Downtown Visalia

Visalia - What started as one person's dream is blossoming into reality this month with plans for a Children's Museum in Downtown Visalia. Educator Angela Huerta-Reyna says the idea hit her when she visited a modest children's museum in the Fresno County town of Oakhurst. "I thought if a little town like Oakhurst could do this we could do it in Visalia."

Then she started to network with friends and associates and pretty much anyone who would listen. She talked it up to the Department of Education where she works. Angela was successful and has organized a group and board of directors of a 501(C)(3) non-profit corporation. She now has county superintendent Jim Vidak on as a supporter.

"We want to open a full fledged children's museum by September of next year," says Huerta who by now has plenty of supporters. This past week they got a huge break with the news that car dealer Jack Petty has donated 6 months free rent for the use of 708 E. Main as an organizing office and staging area to begin the work of putting exhibits together. The building is the former Chrysler dealership that Angela says she will start using immediately.

While they may start small, Angela is thinking big long term.

"Our long term goal to build a big museum - maybe on the order of the San Francisco Exploratorium." That would be a tall order. Still the group is seriously looking at buying land and building a new complex in the next few years. Their focus is Downtown Visalia.

She tapped the right people to help including former KDDH administrator Tom Johnson and former police chief Bruce McDermott and former mayor Mary Louise Vivier now introducing Angela to the cadre of the town's movers and shakers who are now moving on this project.

"This is the Save-the-Fox Theatre all over again," says Donna Orozco, the publicist for the new museum.

Vivier and Johnson a few years ago were working on a health oriented children's museum that can now meld into this exciting project.

The group has set a formal business plan that calls for the building of a multi-cultural learning center to provide hands on experience in science, art culture and music along with health, business and social sciences.

"We want to have interactive exhibits," says Angela and monthly educational programs and be open 6 days a week with both day and evening hours. In the first year of operation the business plan calls for raising nearly $600,000 and the organizing of a building fund. To bring funding in the museum would charge admission, school contracts for visits, seek individual giving and fund raising, rent space and empty rooms, operate a gift shop and seek grants.

The plan says at one time or another the museum might has as many as 24 exhibits on display.

This past week the board of directors came up with a name for their interactive museum - ImagineU.

Already many exhibits have been promised, says Donna Orozco, publicity director for the museum. Some of the proposed exhibits are:

• Exploring rocks and gemstones

• Computer learning kiosk

• Mad scientist's lab with hands-on experiments

• Wild animals and local botanicals

• Play bank with an inst-teller

• Shadow room for creative play

• "Burning house" to crawl through using fire safety techniques

• Place to create beadwork and pottery

• ToddlerTown creative play area

• Health careers section with medical and dental role play exhibits.

Serving on the board of ImagineU as officers are Angela as president, Deborah De-Carlo VP, Deanna O'Leary VP and Margaret Hall secretary. To become part of this exciting project, call Angela at 592-4885.

---

Kaweah Delta Postpones Debt Financing

Visalia - While the new operating budget for Kaweah Delta Health Care District reflects a goal of a "return to profitability" in 2002-03 promising to raise an additional $10 million in the coming year, Chief Financial Officer Gary Herbst says the district must gain "financial altitude" before it goes out to the debt market to raise the $100 million to fund the ambitious downtown expansion plan.

The total cost of the expansion - really a full replacement of the hospital long term - is expected to be mountainous $425 million - a peak that will require financial performance to convince the credit market that the district can climb.

"We've deferred our plan to fund that debt in November for about a year," says Herbst promising the move will delay the planned downtown expansion by only a few months.

Plans are moving forward on the next steps in the expansion that includes the expanded ER, funding of the working drawings for the new Acequia hospital building that have to be drawn up for submittal to the state and the plan to build a new administration building that will require land acquisition.

The hospital plans to contract with a developer to finance the so-called "support services" building (administration) just west of the city park across West St. "We can't buy property anyway until the EIR on the expansion is complete by October," says Herbst.

Other plans to purchase surrounding properties have been put on hold because of the delay in debt financing, he says. The district plans to raise the capital through a combination of mechanisms - maybe even a public obligation bond although that has not been determined.

The district's tight budget this year is reflected in its relatively small capital budget at $5.4 million compared to last year at $10 million.

Herbst says while the hospital in the past two years has actually lost money on its operations - over $650,000 loss in ‘01 and probably $1 million in ‘02 (just ended) and that the only way the district comes out is on interest income it receives from some $60 million in the bank.

Now in low interest times that money is going down too - down some $2.5 million.

The operation losses came from increasing costs at the district including wages, increased drug and supply costs, energy and others.

The average wage at KDDH has gone from $16.38 in 2000 to $20.23 in 2002/03 - a 23.4% increase. A tight labor market for professionals including nurses has forced the hospital to scramble to meet their need. The 450 RNs in the district are getting a 16.3% increase this fiscal year helping the district wean itself off the need for contract traveling nurses that cost $80 an hour, says Herbst. "We've had some 80 vacant positions in the nursing department and we have decreased that number down to 40 recently," says Herbst. New nurses are coming from both local, national and international recruitment. As a result the district's contract labor costs for the new budget are down $3.8 million.

The district's average wage for its 2400 employees is up 9.8% in the new fiscal year but that reflects a range of increases "depending on performance" says Herbst from 3% higher to the nurses 16.3%. Total payroll and benefits in the new budget are up $18 million because of the tight labor situation in the past few years. Herbst said it was necessary for Kaweah Delta "to play catch up."

Helping to boost revenues this coming year are increases expected in funds from Medicare for inpatient and outpatient care boosting patient revenue to an expected $787 million compared to $465 million budgeted in 01/02 there is an improved rate from the district's biggest private insurance company - Blue Cross, says Herbst.

Also boosting revenue is an expected increase in patient volume with the hospital running at about an 85% occupancy rate.

Kaweah Delta is the only hospital in Visalia and takes care of the patients countywide. But its in a depressed area economically - perhaps more so today. Still the new budget promises to turn a profit and Herbst says the board has suggested staff "must provide a floor" to ensure the district's bond rating remains high. Herbst told the board the budget shows a 2.2% operating margin exceeding the median ration of 1.2% for all hospitals - a number Moody's bond rating agency watches closely.

The tight budget picture has also prompted the district to reduce the scope of the new cancer care center from a proposed $35 million project to a $26 million complex planned out next to their Lifestyle center.

---

Return to Archive