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Friday, Dec 1, 2023

Much of Valley Economy Is Put on Hold

The San Fernando Valley economy is in a holding pattern, with businesses unsure of whether to grow or contract, said economist William W. Roberts, Director of the Economic Research Center at California State University, Northridge. ?ompanies aren? moving in one direction or another, primarily because we don? know which way to move,?he said. In a speech that referenced the 1930? classic movie, The Wizard of Oz, Roberts addressed about 400 local business leaders during the fourth annual Valley Economic Summit sponsored by the Valley Economic Alliance and California State University, Northridge, held at the Sheraton Universal Hotel on May 6. ?e have a financial tornado taking place,?he said as he described the unique characteristics of the current recession, which has hit all sectors of the economy indiscriminately, including retail in the San Fernando Valley. Roberts said he looked at two key economic indicators to asses the state of business in the Valley: the number of bankruptcy filings and the number of unemployment insurance claims, both of which seem to be rising, he said. ?oing back to 1999 fourth quarter unemployment insurance claims have dropped ? due to the seasonal activity, retail tends to pick up. But in 2008 unemployment insurance claims went up in the fourth quarter. This is a different type of recession?his time it? all over the place and it? hitting retail.? Bankruptcy filings in the Valley have also steadily been climbing since 2006, he said. However, he explained that because businesses don? usually rush to file for bankruptcy as soon as the economy turns south, this is a ?agging indicator? meaning the economy might have turned around before the numbers reflect it. Despite these troubling indicators, Roberts said the results of CSUN? annual Economic Forecast Survey of Valley Businesses showed a positive outlook, and reflected the holding pattern in the economy. More than half of the businesses interviewed did not expect to have changes in employment, he said, and 73 percent are looking for no change in plant size. The telephone survey of about 100 medium sized companies with between 45-105 employees, also reflected a concern for financing and availability of credit. ?his I see as a very optimistic position for us to be taking. You don? look for financing unless you expect the future to be better,?he said. Last year no one cited credit availability as a problem. The survey also indicated that while sales increased slightly over the past year, a slight decline is expected for 2009. About 19% of those surveyed said they intended to move out of the Valley in the next two years, citing concerns with business taxes and regulation within the city. On a positive note, Roberts said that while two years ago survey results indicated that finding skilled workers was a top problem in the Valley, in our current economy finding skilled workers is easier, and that was no longer a concern. He also said the San Fernando Valley seems to be coming out of the foreclosure crisis. ?oreclosures are down in the San Fernando Valley, we seem to have gone through that crisis and we?e back out of this recession situation, and right now we?e in a holding pattern waiting to see what? taking place.? Roberts emphasized that housing is no longer driving the economy in the San Fernando Valley. ?hat? driving it right now is this holding pattern we?e in. It? uncertainty, we don? know what? going on in terms of where we?e going to get financing.? Dale Bonner, secretary of the California Business, Transportation and Housing Agency, also spoke at the Valley Economic Alliance Summit about the State Stimulus Plan. He said the region will see economic relief from the state’s $85 billion share of the massive federal stimulus package, of which $12 billion dollars will go directly to businesses across the state. Bonner said business leaders should now work together to set priorities in order to focus the funds where they can be most effective. The summit also featured a variety of workshops, including a discussion on how businesses can benefit from going ?reen?and a special forum focusing on how businesses and non-profit charities can help each other during these tough economic times. Deidre Wallace, President of Ambrose Hotel in Santa Monica and one of the ?reen?pioneers in the hotel industry was among the panelists who said ?reening?a business, in terms of using sustainable products and practices, is well worth the cost and effort. Deidre said her green business model has increased customer loyalty and demand for her hotel to the point where hers was the last hotel to fall in hotel occupancy rates as the recession hit Santa Monica. The discussion on how charities can help businesses brought together panelists including non-profit leaders Marianne Haver Hill, executive director of MEND (Meet Each Need With Dignity) in Pacoima; Stephanie Klasky-Gamer, president and CEO of L.A. Family Housing; Sister Colleen Settles, chief mission integration officer at Providence Health and Services and Sharon Spira-Cushnir, chief executive officer of Executive Service Corps of Southern California. The panelists offered several suggestions of how businesses could help charities including donating to them if they buy office supplies in bulk or volunteering their employees?time. Panelists and the audience also cited the need for coming up with more creative ways of funding charities. Another panel focusing on retail offered an overview of the intricate process that was necessary to create Plaza Pacoima, the largest retail development in the North San Fernando Valley currently under construction. The development, which was built on the Price Pfister manufacturing site in Pacoima after the plant moved to Mexicali, involved retailers, governmental agencies, private development and community groups. The development is also the first Silver Leed certified development in the area. The panelists included City Councilmember Richard Alarcon, and representatives from Best Buy, and Costco, as well as Josh Stehlik, a supervising attorney with Neighborhood Legal Services, which worked closely with community groups building consensus for this project.

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