COS Bond Measures Favored by Voters

Tulare County - Some races were decided and some are still in limbo as the Tulare County Elections Division works to count more than 15,000 absentee and provisional ballots.

What we do know is that both College of Sequoia measures – J in Tulare and I in Visalia, are on their way to passage. Measure J would provide $60 million to begin the process of building a campus in Tulare. Measure I will provide $28 million for much needed improvements for the Visalia main campus.

The most people to ever vote in a single election in Tulare County history cast their ballots in Tuesday's election. When all the ballots are tabulated, officials expect more than 100,000 voters will have cast ballots – better than the previous high of 99,509.
Turnout, when the counting is finalized, should top 75 percent in Tulare County.

Tulare County Elections Supervisor Paul Sampietro said the vote went smoothly in light of the large turnout. “It was the heaviest turnout, I've been told by those who have been around for a long time, in at least 30 years,” he said Tuesday night.
Final results won't be known for a few weeks, said Sampietro. The next update should be on Friday. He estimated it will take two to three weeks to count all of the ballots, including about 9,000 provisional ballots turned in on election day.

Tuesday Results

COS: Measure J (69%) and Measure I (64%) were both leading. Both needed 55% voter approval.

COS Ward 3: Earl Mann won re-election.

Kaweah Delta Hospital Zone 3: Dr. John Hipskind outsted Gregory Hund.

Assembly, 34th District: Connie Conway was the runaway winner over Desmond Farrelly.

Assembly, 30th District: Fran Florez and Danny Gilmore were locked in a close race that won't be decided until all the ballots are counted.

Congress, 19th District: Devin Nunes easily won re-election.

Tulare City Council: In a close race, it looked as if incumbents Phil Vandegrift and Craig Vejvoda were heading for re-election and it was a tight race for the third seat between incumbent Carlton Jones and challenger Wayne Ross.

Tulare Hospital District: With less than half of the precincts reporting, incumbents Dr. Parmod Kumar and Roger McPhetridge were leading, with the third seat very close among Richard Torrez, Skip Barwick and Sherrie Bell.

Exeter City Council: Leon Ooley and Robyn Stearns appeared headed to victory.
Farmersville City Council: Paul Boyer and Don Rowlett were elected.

Woodlake City Council: Joe Martinez and Rudy Mendoza were leading for the full terms and Gregorio Gonzalez for the short term.

---

New Life for Old Block
Mangano Company Plans on Revitalizing East Main Street Block

Visalia - The Mangano Company has always invested in downtown Visalia and now the vision of Craig Mangano and Steve Peck is to see the flavor of Main Street extended east.

Mangano Company and Mangano Real Estate have teamed up to purchase the old Larson Hotel building and the building to the immediate east in the 400 block of East Main Street for the purpose of developing that half block much the same that they developed the old Razzari building on Center Street. The company also did the Renaissance Building further west on Main Street.

“It's an area the city wants to see growth,” said Peck, vice president with Mangano, explaining they are in escrow to purchase the entire half block from John Vartanian, owner of the Vintage Press.

Admitting that Mangano Company has a strong confidence in Downtown Visalia, Peck said they are hoping to develop a building of mixed-uses, with retail on the first floor and offices on the second floor.

“We're going to explore residential (upstairs) because that is what the city wants,” said Peck, but he added in today's real estate market, it is impossible to construct residential units that make economic sense.

According to Peck, the western portion of the block was once the Larson Hotel, basically a 1900s-era flop house. The upstairs was divided into apartments, with a common bathroom and shower. It was also once part of the old auto sales district for Visalia – a district that has been relocated now to Ben Maddox and out to Plaza Drive.

He said Vartanian purchased the block-long series of three buildings in the late 1980s from Ruth Wiebe. Much of the building (its east end) housed one of Wiebe's car dealerships and on the west end, it was the site of the old Santa Fe Liquor store. He said the block had been owned by the Wiebes or Vartanian for the past 30-plus years. At one time, a Chinese laundry sat at the corner of Main Street and Bridge.
Peck said they are still studying if any of the existing building can be utilized, but it is looking doubtful. The building is in bad shape, with beams and roofs sagging, floors cracked, walls separated and brick mortar so soft you can scrape it away.

“There are probably a few studies we need to do. It does not appear the building materials here could support a building for another 100 years,” he said. He added plans would be to construct a two-story building and replicate the look of the building as it was in its prime. Peck said the building does not hold a lot of historical or design significance.

“We'll continue the downtown streetscape to keep the consistency,” said Peck, adding they would build where the vacant lot sits and probably place parking in the back. “We want to make the entire block look like one new part of downtown.”

City officials are excited at the prospect of revamping the dilapidated block that is at the gateway to East Visalia. “When people stroll down Main, they turn around here because it looks dumpy,” said one official. “The Mangano family who has a long record of quality projects and several large rehabs in the Downtown, should do a great job here too.”

“It's an opportunity that doesn't come along very often,” said Peck of the project, noting the city's expansion of Santa Fe Avenue at the eastern end of the block and the plans to make Santa Fe continue over Highway 198 will greatly enhance access to that area of Downtown.

Peck said escrow could close this year and construction could begin within a year.

---

Butler Plans Large Expansion of Visalia Plant

Visalia - BlueScope Manufacturing in Visalia is planning an expansion that will eventually double the size of the Visalia plant and double its workforce.

The company designs, manufactures and markets metal building systems for commercial construction, according to the company's web site. It is commonly referred to as Butler Manufacturing.

“We construct pre-engineered metal buildings,” said Scott Wilson, Bluescope Manufacturing operations manager in Visalia. He said the company designed and manufactured the structure for the new Costco in Visalia.

Plans submitted to the city for review indicate the plant is planning on adding 12 more buildings. City of Visalia Principal Planner Paul Scheibel said the company plans to add 115,000 square feet to the plant that today is 160,000 s.f.
Visalia Economic Development Director Richard Noguera is pleased Bluescope is expanding.

“That (expansion) would add 111 new jobs over the next six to eight months” to the workforce of about 100 who are already employed there. “These are good paying jobs as welders and fabricators start at about $15 an hour,” says Noguera.
Scheibel said it is his understanding the company wants much of the expansion completed by June, the busiest time of the year for the plant.

“They're anxious to move forward and we're anxious to help them,” said Scheibel, also pointing to the gain in jobs.

The company has over 30 acres at its Doe Avenue facility – plenty of room to add the multiple buildings involved in this expansion. Its plans were presented to the city at the end of October.

“We are expanding our facility by 115,000 square feet to meet demand in the western region of North America in anticipation of more work for our market in Western Canada,” the company stated in a press release.

Not only will the company expand, but it will be its own customer. The plant is presently designing and constructing the buildings that will make up the expansion.
Noguera says the city needs to concentrate on job retention from its expanding industrial base as a means to survive in the tough economic times.

“Besides the jobs, the good news for the city is that these steel beams fabricated by Butler are sold and thus generate sales tax for the city.”

Company Profile

Butler Manufacturing – a BlueScope Steel Company - was founded in 1901 and currently operates manufacturing, engineering and service centers throughout the United States and around the globe.

The company's products are primarily sold, installed, and serviced through independent dealers (Butler Builders) in the United States and throughout the world. Through BUCON, Butler also provides design-build construction services directly to customers with multiple sites or for projects with unusual size or complexity.
Butler Building Systems, the company's largest division, designs, manufactures, markets and sells steel building systems. This division's products are mostly custom-designed and engineered one to eight-story steel buildings for use as offices, manufacturing facilities, warehouses, schools, shopping centers, agricultural buildings and more.

Butler Construction, or BUCON, Inc., provides complete design, planning and construction services for large corporations.

---

Local Dairy Industry Sees Opportunity in China

By John Lindt

California - OK, maybe Chairman Mao won't be wearing a California milk mustache any time soon, but that country's problems with milk may give a major opportunity for the California dairy industry to supply product to a market of more than 1.4 billion consumers.

“I will be going on a trade mission to China along with other industry representatives in the next week,” says CEO of Visalia-based California Dairies Richard Cotta. “We will be seeing if there is a chance for us to supply all kinds of milk products” since consumers there are now wary of the safety of their local supply. He says there has been an 80 percent drop in consumption of milk in China since the melamine fiasco in that country in recent months.

It may seem strange to Americans that this industrial product, melamine, used to make plastic would be found in milk. But the fact is that milk is supplied by very small farmers who may milk only a few cows. Because melamine can be easily added to appear to boost its protein content, the material – rich in nitrogen – has been deliberately added to boost income. Lack of coordinated safety inspections and the collapse of consumer confidence have set the stage for the entry of the U.S. dairy industry here.

“It started out with milk powder used in baby formula,” says Cotta, resulting in the death and sickness of tens of thousands of babies, and even kidney failure. As more testing was done, the material has been found across the global food chain.

Besides adding the material to milk, there is the widespread practice of adding melamine to animal feed, resulting in the find of the contaminant in bacon, eggs and meat. Industry sources say it could be a decade before the practice is contained.

“Now they are finding melamine-tainted fluid milk, powder, yogurt, Snickers, Starbucks and all manner of food products,” notes Cotta, including the largest food company, Nestle, which may have used the tainted milk powder in its ingredients.

Key to the opportunity for the California dairy industry has been the close tie of the New Zealand-based Fronterra milk cooperative with the Chinese dairy industry – an industry that is 50 percent larger than the size of the U.S., says Cotta. Fronterra, who controls about a third of the world's export supply of milk, has done a joint venture in China and tied its supply to mega-food companies like Nestle which needs the product. Now those relationships are in ruins.

Hungry Country

UC Veterinary Center Director Jim Cullor of Tulare, who has traveled widely in China, says Fronterra's people knew of the contamination but failed to speak out earlier. “I think we have both a potential to supply milk to the Far East and may have interest by the Chinese to invest in production facilities in California.”

California has demonstrated its milk supply is the highest quality, safe and already sells some product into China. Backing up the milk industry delegation going this month to China will be Lt. Gov. John Garamendi in February, says Cullor. Cullor says he believes there is an opportunity for meat supply to China as well as other food products from California. “They are a hungry country.”

Also going on the November trade mission, sponsored by the California Milk Advisory Board, will be Western United Dairymen Executive Director Michael Marsh who thinks the trade mission could result in the sale of milk products “within a matter of weeks” to supply the pent-up demand for safer milk products.

Tapping the Chinese market could relieve a surplus condition for milk products like milk powder that has declined in price in the past year due to increasing supply coming out of our top competitor, New Zealand, as its drought eases.

Marsh says the possibility that the Chinese could invest in production facilities here might be just what is needed, even as credit has dried up in the U.S. “We've been trying to figure out how to expand processing capacity in California,” says Marsh. “It could be Chinese investment would be more secure knowing that product will be sent to their own nation could help us add new capacity here.”

Cotta says he believes the opportunity is more than just selling more dry milk product to China, which we already do. “They may want our yogurt, our cheese, as well,” he says. About half the California milk supply goes to make cheese that can be shipped to China without too much problem.

Mary Cameron, a dairy farmer in Kings County, says having additional markets for California milk and dairy products certainly helps to balance supply and demand, but only if those markets are willing to pay the kind of prices that will help producers' bottom line.

“Sure, it's good that we're getting rid of (the milk) because otherwise it would be sitting in the warehouses. But if we have to sell it for a low price and there isn't really a profit coming back to us, then what's the value of it?” she says.

After dipping down close to $12 per hundredweight during 2006, milk prices paid to farmers rose to record levels in 2007. Rising commodity prices drove on-farm prices to a peak of nearly $24 per cwt. in October 2007, before settling. Average prices so far this year – at $20.36 and $20.09 per cwt., depending on the region – remain relatively high, thanks to the dramatic increase in dairy exports.

These high prices have helped soften the impact of skyrocketing feed, energy and other production costs on the dairy, says Van Warmerdam, who chairs the California Farm Bureau Federation dairy advisory committee.

“If it weren't for that (export) outlet for the milk, I think there would have really been a glut around here,” he says. “Obviously, if there's a glut, then that means the price of milk is going to go down.”

California Farm Bureau contributed to this report.

---

Sultana Tree Fruit Farmers Quitting

Tulare County - One of the best-known farm families in Tulare County, George Brothers of Sultana, will be quitting the tree fruit and grape business they have pioneered here since 1906. Company President Mickey George confirms he has told his employees the firm will sell off about 1,000 acres of the sandy loam soil that has nurtured peaches, plums and famous Sultana grapes the town was named for.

“We've been in negotiations to sell the land, although the final deal is not done,” says George, with the expectation an escrow on the sale will close in about 30 days.
“It's been a very tough eight to 10 years in this business when we have not been able to make a profit,” said a saddened Mickey George, adding the worst of it is that his two sons, Mike and Tim, will be left without the farm that was handed off to him.

Founder Joseph George immigrated to this country from the Azores and purchased land here in the early 1900s that has been kept in the family for over a century.
The sale of the fertile farm land is said to be to fast-growing Paramount Farms, big in both the citrus and pomegranate business. The sale does not include the Sultana packing house a few miles east of Dinuba.

George Brothers dates from 1942 when the founder's sons combined their operations and acquired the packing house, shipping produce far and wide. By the 1950s, the family concentrated their efforts on growing tree fruit as well as marketing and shipping it worldwide. The company grows 75 varieties of tree fruit, plums, peaches, nectarines and everything in between, shipping over a million cases annually.

But despite the family's expertise, the tree fruit business in this part of the world, possibly the best place anywhere to grow peaches and plums, has not been kind to producers.

Every summer, farmers who grow this crop in the Reedley-Dinuba-Exeter region are given new hopes this will be a better year. But despite the fact the fruit is delicious, the prices growers get from the supermarket buyers are often below the cost of production, says Dale Janzen, director of industry relations for the California Tree Fruit Assessment (CTFA).

That was the case for many farmers in the summer of 2008. Come fall, all the coffee shop talk is of more acreage being pulled out, possible bankruptcies, and “for sale” signs being put up. Exeter fruit grower Terry Whitson told the Voice this summer that many growers didn't bother to pick their crop because the labor costs exceeded the price they would get. “The real problem is that prices we are getting are 25 percent less than 2004. Meanwhile, our input costs are 30 percent higher than they were in 2004.”

If growers are being hit, produce marketers are as well. The Produce News recently reported that twice as many produce companies have gone out of business, owning money this year compared to last year on farms listed in its Blue Book industry directory. A “snowball effect” that happens when money is owned to multiple parties appears to be especially troublesome this year. That effect has not been made any better by the worldwide financial meltdown in the past 30 days.

Small food service and restaurant accounts, the moms and pops that go out of business, leave a trail of unpaid bills increasing credit woes, says the report.
Just how Paramount, the largest citrus and nut grower in California, will use this land is the subject of some speculation. Sultana is in the citrus belt of Tulare County and the company, which in the past year pulled out of Sunkist and began marketing on its own, could use this land for tangerines or other specialty citrus planting. It is also the largest pomegranate producer as well with a large new processing plant in nearby Del Rey producing its own brand of pomegranate juice, POM Wonderful. The juice is touted for its health benefits. It seems likely the stone fruit trees will be gone.

Stone fruit has its own health benefits and the CTFA is expected to tell that story to customers over the next year. This year's pack-out of stone fruit was 57 million boxes, up from last year and higher than previously estimated. The thinking is that farmers going out of business or pulling trees will reduce that crop size in coming years – perhaps what is needed. The CTFA will hold its annual fall industry meeting Nov. 25 to try to set some strategy for survival.

---

Rail Firm Eyes SJVR Line

By Miles Shuper

Officials of Patriot Rail Corp., a railway holding company which acquires and operates short line and regional freight lines, will meet with Tulare County officials Nov. 19 to discuss the rail line destined for abandonment in the county.

Ted Smalley, executive director of the Tulare Association of Governments (TCAG), said at least one Patriot Rail official from the East Coast will meet with members of the Tulare County Rail Committee and other county officials regarding the 30-mile San Joaquin Valley Railroad line between Lindsay and Jovista that SJVR wants to abandon.

SJVR maintains the line is too expensive to run, a claim the county and others rejected. The county claims the company has discouraged business in attempts to win abandonment.

The county and economic development boosters believe there is potential for increased freight business along the line.

Tulare County has made two offers to purchase the segment from SJVR which were rejected, but is pursuing ways to keep the line from being scrapped. The county is stressing the line must be kept as a viable freight system which could greatly reduce highway transportation cost, cut air pollution, lessen highway use and attract more commercial and industrial development.

County officials are seeking the help of state and local legislators to find a way to preserve the line. In addition, the county is talking with Union Pacific which owns the right-of-way on which the SJVR lines run.

Earlier this year, the federal Surface Transportation Board (STB) approved SJVR's bid for abandonment of that segment but rejected its move for abandonment of an additional 9-mile segment between Lindsay and Exeter. After an STB initial ruling, SJVR rejected the county's revised $1.2 million purchase offer, saying it was too low. It then won an STB declaration that set a $3.308 million price based on an offer by a salvage firm, the Tie Yard.

There have been no indications whether SJVR officials will be involved in the upcoming meeting with the county and Patriot, a source close to the issue said.
Patriot has been extremely active in recent acquisitions and now owns and operates five short lines comprising 321 total rail miles in seven states. They are the Tennessee South Railroad in Tennessee and Alabama, the Butte, Anaconda & Pacific Railway (formerly Rarus Railway) in Montana, the Utah Central Railway in Ogden, Utah, the Sacramento Valley Railroad and the Louisiana & North West Railroad in Louisiana and Arkansas.

---

What's New

One California entity hurt by the October market sell-off was CalPERS, the nation's largest public pension fund. The fund has lost a cool $50 billion in assets through October 10, say financial news reports, about 20% of its holdings. CalPERS may ask to increase its employer contributions to increase payment to funds in 2010, depending on what happens next. Representing the Central Valley is Kings County Supervisor Tony Oliveira who says he has been busy working on plans to keep the agency in the black.

A Sequoia Mall partner is facing financial problems. Value City Department Stores in Columbus, Ohio filed for Chapter 11 bankruptcy in recent days and plans to close the rest of its 66 stores. The owner of the department store, Schottenstein Management, is a 50-50 partner in the Sequoia Mall in Visalia.

The closing of all Mervyns department stores in the Tulare/Kings markets means the shuttering of four stores locally, Visalia, Tulare, Hanford and Porterville. Reliable sources say the upcoming vacancies in Porterville and Hanford offer an opportunity for Kohl's department store to move into these markets where they have already been actively looking. Not so with Tulare, where Kohl's will likely not be interested because it is too close to Visalia. The liquidation of Mervyns is likely by Christmas and the company posted notice it will take no return items after mid-November.

California saw the end of summer in late October and early November as several moderate storms came into the state putting some snow in the Southern Sierra mountains and better snow in the Tahoe area. Downtown Sacramento got a good soaking of 2.3 inches of rain while further south, Hanford got just a third of an inch, says the NWS. The storm totals for the five days of unsettled weather through Nov. 3 were an inch in Three Rivers and 3.11 inches of rain and snow in Lodgepole in Sequoia Park. Some ski resorts were predicting early opening in the central Sierra. In Tulare County, people are able to breathe in some crisper fall air.

Tulare County Economic Development Corporation is definitely staying put. EDC President/CEO Paul Saldana said his organization has signed an agreement with the International Agri-Center that will keep the EDC in the Heritage Complex. While the EDC has moved to temporary new quarters in the Heritage Complex to allow the Agri-Center to move into its old offices, a more permanent home will be established in a few weeks.

Gas prices continue to move downward, much to the delight of motorists. A gallon of regular unleaded on Tuesday was selling in Tulare County on average for $2.70, down 30 cents from a week ago and off more than a dollar a gallon from a month ago. The price is 80 cents a gallon less than a year ago. The price of diesel also continues to slide, down to $3.23 a gallon from $3.41 a week ago and $4.11 a month ago.

Circuit City announced it was closing 155 stores nationwide, but only one in the Central Valley and the Visalia store remains open. The company also announced it was reducing future store openings and aggressively renegotiating certain leases. On Monday, Circuit City stock was trading below 40 cents a share.

Land O'Lakes, Inc. reported third-quarter net sales that were better than a year ago. The milk cooperative reported sales of $2.9 billion and net earnings of $59.9 million, as compared to net sales of $2.1 billion and net earnings of $5.2 million, respectively, for the same quarter one year ago. Year to date, the company reported net sales of $9.4 billion and net earnings of $224.0 million, as compared to $6.3 billion and $137.4 million for the first three quarters of 2007. Land O'Lakes net sales are up 49 percent over the first three quarters of 2007.

Several local school districts benefited from Proposition 1D and Proposition 1B funds distributed last week. The biggest winner was Earlimart Elementary that was awarded $3.3 million for new construction and another $400,000 for modernization improvements. Monson-Sultana School District was awarded $2.2 million for new construction, while Kings River Union Elementary got $353,000 and Pixley Union Elementary got $491,000 for emergency repairs. Visalia Unified received $306,000 which is reimbursement for the district's fitness facility that has been constructed on the Golden West High School campus.

The California Air Resources Board has fined Sears Holdings Corporation $600,000 for selling portable fuel containers and windshield washer fluid throughout the state that failed to meet California air emissions requirements.

The cost of living in Woodlake will go up for residents in that foothill community. The city council there agreed to raise water rates $2 a year every year until 2013 when it will then be 2-3% of the cost of living in Woodlake. Residents now pay $20 a month. The council also hiked sewer rates, jumping from $25 to $33 a month beginning in July to a peak of $65. After 2014, the percentage of increase will be based on a 2-3% of the cost of living.

---

City Building Activity
Remains in the Dumps

Building activity in the City of Visalia slowed even more in October. Total valuation was just $8.7 million, the lowest in more than six years.

Construction slowed in almost every area. Only 25 new home permits were issued and only one for a two-unit duplex. Commercial construction, which had remained strong for the first half of the year, has slowed considerably. For October, only five permits were issued for new commercial construction, with a total value of just $807,000.

For the year, the city has issued 470 permits for new homes, which puts it on pace for fewer than 600 for the year. That would make 2008 the slowest new home construction year in nine years. So far in 2008, the total square footage of construction is 1.6 million square feet. That is half of last year's total and far down from the 5.3 million square feet constructed last year.

Council OKs Limited
General Plan Update

Deciding once again against doing a complete General Plan Update, the Visalia City Council authorized seeking proposals for a scaled-down general plan review. A full-blown general plan update would cost at least $1.5 million and take 3-5 years to complete, city officials said.

The general plan is the city's guide to growth, generally for 20 to 30 years. The last major overhaul of the city's general plan occurred in 1991. The focused review will update the city's land use element related to residential land uses only.
City Planner Paul Scheibel said the goal of the update will be to increase residential housing densities and to encourage infill.

The focused study is expected to cost approximately $500,000 and take about 10 months to complete.

Local Banks Don't
Share in Federal Bailout

Local banker Tom Beene, president of Visalia Community Bank, has seen the federal government lavish billions on the big banks, even to a number of them who may not need it like Wells Fargo or Bank of America.

Meanwhile, local mainstay community banks aren't so lucky. But Beene says there may be some logic to the federal plan that would prompt those banks to carry more of a load when smaller banks around the county fail, forcing a federal FDIC bailout. The plan is to get the big bank to acquire the smaller troubled one, suggests Beene. He notes that local community banks didn't participate in the subprime or investment banking trends and thus are not facing the same problems.

---