Skyrocketing prices force CA to burn less gas

     Out-of-control gas prices are all the hype.
     Few may realize, though, that California is running on less fuel than it was a year ago.
     That’s according to a State Board of Equalization report published on Monday, which also says that our shrinking consumption is a “continuing downward trend.”
     “This is something we’ve been seeing for the last few years,” said Anita Gore, spokeswoman. “We’ve seen this trend before when prices shoot up. However, this is the longest sustained decline we’ve ever noted.”
     The average price of a regular gallon of gas in the San Bernardino-Riverside area stood at $4.58 on Monday, according to the Automobile Club of Southern California. A year ago it was $3.11.
     Statewide, Californians have been burning around 16 billion gallons of regular and diesel fuel for the past couple of years — a number that might continue shrinking if prices keep rising, Gore said.
     “More and more people are taking mass transit,” she said.
     No kidding. Metrolink’s Southern California commuter rail system broke its all-time passenger record four times in early June, according to Denise Tyrrell, spokeswoman.
     “It’s a lot for us,” Tyrrell said during a mid-June interview. “We’ve gone from 43,000 passengers a day to 50,000 passengers a day virtually in one month.”
     Gore said that drivers are increasingly running multiple errands on one trip, and an up-tick in hybrid vehicle sales is also pushing consumption levels lower.
     California’s excise tax is 18 cents a gallon, while sales tax is 8 percent for most of San Bernardino County and 7.75 percent for Riverside County.
     As gas prices keep rising, the state’s sales tax numbers are hitting new records, Gore said.
     “Despite lower consumption, we’r going to hit $5 billion,” she said.
     –matthew.wrye@inlandnewspapers.com

    

     Look below (or click) to read the state Board of Equalization’s news release on gas consumption:

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Event aims to draw attention to local businesses

     When Jack Ritoli showed up at Family Fun Day in Chino Hills on Saturday, he did more than just watch kids have their faces painted and vie for raffle prizes.
     He was networking.
     It’s been one year since Ritoli and his wife, Christine, created Inland Empire Network Partners, a Chino Hills-based business organization that’s added 16 members to its ranks.
     The public family event also doubled as a mini-business expo held at the Crossroads Entertainment Center strip mall located at Chino Avenue and the 71 Freeway. Money was raised for Max’s Lemonade Stand, a La Mirada-based breast cancer research organization.
     IENP meets at 7 a.m. on the first and third Thursday of every month at Que Pasa Cafe, which is also located in the Crossroads Entertainment Center. For info, call (909) 636-1905.
     “We share business ideas and we help each other out,” Ritoli said about IENP. “We’ve got people from Norco, Corona, Chino and Chino Hills. It’s everybody working together.”
     Ritoli said he and his wife started IENP because there was a need for an “informal” business networking group.
     “We come in there, share ideas, and we keep going from there,” he said. “Sometimes business owners just can’t be there. They’re too busy, and that’s okay. They can come whenever they want to.”
     The economy was in better shape when the business owners met for IENP’s first meeting last July.
     “Right now we’re going through a real rough time,” Ritoli said. “If we stick together, we get more ideas. The group really works together to help each other out. If we can do it as a group, it’s much more powerful.”
matthew.wrye@inlandnewspapers.com

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Manufactured steel making comeback in IE?

     The dollar’s value might be dropping, but that’s good news for companies like Tamco Steel Mini-Mill in Rancho Cucamonga.
     Tamco is exporting steel “for the first time in a long time,” according to Jim Mengler, safety facilitator at Tamco and recording secretary for Local 8065 United Steelworkers union.
     The company — owned by Pasadena-based Ameron International Corp. (NYSE: AMN) — manufactures reinforcing bar for the construction industry.
     As the nation’s currency falls in value compared to other currencies, it makes our goods cheaper in foreign countries.
     “We got an OK for a new furnace,” Mengler said during a phone interview on Friday while attending the United Steelworkers Constitutional Convention in Las Vegas. “We’re hiring like crazy.”
     The company might sign off on buying a new roll mill, caster and other equipment fairly soon.
     “That’s probably going to be $140 million in upgrades,” Mengler said. “We’ve never had an upgrade like that. That’ll allow us to go from (producing) 500,000 tons a year to 1 million.”
     Like Mengler, thousands of local members from United Steelworkers, which represents a variety of manufacturing employees, are attending the constitutional convention from June 30 to July 3. It’s held once every three years.
     Most important, members are voting on whether to have 3 extra cents taken out of their hourly wages for a strike-and-defense fund.
     “That’s the most important thing right now,” said Richard Van, president of Local 8599, which represents Fontana Unified School District employees. “The money will run out if we don’t raise the amount we send in.”
     The latest blow to the union’s local chapters: cement plants. The housing market has taken its toll on ready-mix cement plant workers and drivers, forcing hundreds of layoffs.
     “They’re just not pouring slabs like they used to,” Van said about the industry.
     –matthew.wrye@inlandnewspapers.com

 

EMRISE hopes to dodge delisting on NYSE

     Rancho Cucamonga-based EMRISE Corp. said on Thursday that its England subsidiary, Pascall Electronics Ltd, will purchase $2.2 million of in-flight aerospace entertainment devices.
     The aerospace and defense electrical device manufacturer could probably use all the new orders it can get.
     It’s market capitalization — now about $24 million — has plunged since its 1992 stock price peaked at $11.25 a share, and the company has been facing a delisting on the New York Stock Exchange.
     The stock (NYSE Arca: ERI) closed at 65 cents on Thursday.
     In the face of recent losses, John Donovan, vice president of finance and administration, said he’s optimistic about growth opportunities.
     “We believe we’re turning back to profitability soon,” he said on Thursday.
     EMRISE, which also has operations in France and Japan, reported a first-quarter loss of $900,000, mostly due to production and customer-related delays.
     Before that, the company saw a total of $5.5 million in losses between 2006 and 2007 because of slower sales, among other reasons.
     The company must increase stock value to stay listed on the exchange. It will ask shareholders — many of them being investment firms — to approve a reverse stock split later this year.
     But even if shareholders approve the reverse split, it won’t happen until EMRISE acquires Advanced Control Components, a New Jersey-based electronics device producer. An Aug. 15 date is projected for closing the deal while EMRISE gets environmental approval from New Jersey.
     Donovan said most of the company’s losses stem from accounting and attorney expenses put towards internal fraud investigations by the Securities Exchange Commission in 2006.
     “We had to reaudit two years of financial statements,” he said. “It cost us almost $2 million and depleted the company of its cash reserves.”
     –matthew.wrye@inlandnewspapers.com

Look below to read EMRISE’s last few news releases:

 

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Commercial brokers experiencing both good and bad times

     Good times and bad times — commercial brokers doing business in the Inland Empire are experiencing both phenomenons right now.
     At least that’s John Magness’s opinion.
     The senior vice president of Hillwood Investment Properties is helping moderate Thursday’s mid-year market review hosted by the Inland Empire Chapter of National Association of Industrial and Office Properties.
     Experts from CB Richard Ellis Investors, Principal Global Investors, AMB Property Corporation, Prologis and several other companies will share data gathered from the office and industrial markets throughout San Bernardino and Riverside counties.
     “This is a good time for a lot of investors, and it’s a rough time for a lot of investors,” Magness said during a phone interview on Wednesday. “Most lenders and equity providers are rescrutinizing every dollar they put out.”

     While the local housing market is still taking a nose dive, the commercial real-estate market is following the same course in many areas.
     Thomas Galvin, research associate at Colliers International in Ontario, says he’s expecting the west-end office vacancy rate for both counties to rise even higher from a first-quarter reading of 13.2 percent. Experts consider 10 percent or below a healthy number.
     “The office space is kind of getting hammered,” he said. “It has to do with a lot of construction completions, especially in Corona. They started building it when the times were good and didn’t anticipate things turning around so quickly.”
     The preliminary second-quarter west-end industrial vacancy rate for both counties is 5.4 percent Galvin said, which is up from 4.3 percent in the first quarter.
     On the east end of both counties, preliminary second-quarter numbers peg the industrial vacancy rate at 16.2 percent, up from 14.4 percent in the beginning of this year, and the east-end office vacancy rate is also expected to rise.
     “Some brokers are having to get creative to get deals done,” Galvin said. “They’re doing things that hasn’t been seen in a while, like offering a year of free rent on a 10-year deal just to get someone in there.”
–matthew.wrye@inlandnewspapers.com

     Click on the link below to visit NAIOP’s Inland Empire web site:

     http://www.naiopie.org/

Bank write-offs are mainstay for now

     Write-offs.
     It’s an all-too familiar and dreaded term in today’s economy. Banks hate em’ and consumers keep getting astounded by their numbers.
     According to Chapman University experts, there’s been $300 billion in write-offs over the past few years and more bank write-offs are probably on their way. As home prices keep plunging and the market spews out more foreclosures, it’s only a matter of time, they say.
     Write-offs pushed the Federal Reserve to loan shaky financial firms $400 billion in liquidity over the past couple of years so they could shake off their financial demons and keep their fragile operations above water.
     And more write-offs mean that tightening credit standards won’t loosen up for quite some time. Even with drastically-low interest rates, your average Joe with mediocre credit will continue to face difficulties when applying for a car loan or home mortgage.
     Read for yourself what the Chapman economists have to say:
     “Despite sharp cuts in the federal funds (interest) rate, a recent stabilizing in financial market conditions and a narrowing of credit spreads between riskless treasuries and corporate bond rates, banks continue to hold back on almost all forms of lending — and probably with good reason,” says the Economic and Business Review, a report released on Tuesday by James Doti, president at Chapman, and Esmael Adibi, director of the university’s A. Gary Anderson Center for Economic Research.
     “The balance sheet problems leading financial institutions to curtail lending are based in large part on the $300 billion in write downs now expected on securitized mortgage bonds — very close to our December estimate of $350 billion,” it states. “These write downs are history. The real problem is the prospect of further write downs that will occur if housing prices continue to decline.”
–matthew.wrye@inlandnewspapers.com

     Click the link below for more information on how to be a part of Chapman University’s routine economic forecasts:

http://www.chapman.edu/argyros/asbecenters/acer/forecasting.asp

Mountain tourism striving for comeback

     Mountain businesses are still feeling the brutal effects of the Slide and Grass Valley fires that scorched communities last October and reaked economic havoc on retail shops, hotels and cozy bed-and-breakfast lodgings.
     But with Wednesday’s 2nd annual Mountain Lakes Economic Summit coming up, hope floats for better times.
     The event will be held at Northwoods Resort in Big Bear Lake.
     “Various retailers are off 30 percent,” said David Stuart, executive director of Rebuilding Mountain Hearts and Lives, which has offices in Blue Jay and Running Springs. “They’re saying business is still sluggish, and lodging is down.”
     Various retailers, real-estate associations and service clubs are supporting the second event, but Lake Arrowhead businesses opted not to join this year. They had participated in last year’s event when it was held in Lake Arrowhead.
     “There’s two schools of thought,” Stuart said. “One is that various areas should stand alone and market themselves, and the other one is to do a mountainwide concept and let (tourists) make their choices.”
     Only time will tell whether businesses from all over the San Bernardino mountains jump on one concept versus the other, but steam is gaining for the latter of the two ideas, Stuart said.
     “We’re one community with a lot of post offices,” he said. “We have a strong element up here that would like to see a mountainwide economic program.”
–matthew.wrye@inlandnewspapers.com

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PFF Bancorp’s numbers tell its troubled story

     Several customers and shareholders are well aware that PFF Bancorp, the parent of PFF Bank & Trust, is in a world of hurt because it made risky loans to home developers.
     But the story isn’t done justice without numbers.
     The Rancho Cucamonga-based financial holding company released some mind-boggling data on Thursday morning in its 186-page annual 10-K financial report, and the numbers aren’t surprising.
     For starters, customers collectively pulled out almost $520 million in deposits between March 31 and June 13. That’s about 16 percent of the bank’s total deposits reported for the fiscal year ending March 31.
     Over the same fiscal year, PFF’s debtors couldn’t pay back 468 loans worth $955 million, and about $608 million of this shows “weakness in the underlying collateral or borrower strength.”
     PFF is also reporting a loss of $225 million for that fiscal year, mostly because of its $322-million provision for loan and lease losses.
     Compare that to its fiscal year 2007 provision, which didn’t even hit $10 million.
     And shareholder equity has plunged almost 70 percent, from $397 million to $124 million.
     Last week PFF announced plans to be acquired by FBOP Corp., a $16.3-billion private Illinois-based holding company that owns California National Bank.
     If PFF shareholders approve the deal, they’d net $1.35 per share — just a fraction of the stock’s $39.20 value in mid-2006.
     And if they don’t approve, FBOP will still be top shareholder, owning almost 20 percent of the bank. That’s because the private financial company is loaning $7 million to PFF.
     PFF also said last week that it once again couldn’t make deadline on a $44 million loan to an undisclosed lender. That deadline was negotiated and pushed off until June 16 of next year.
–matthew.wrye@inlandnewspapers.com

     Click on the think below to see PFF Bancorp’s 10-K annual report:

http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?dcn=0001193125-08-136351

County unemployment rising to 1997 levels

     The job front in Riverside County has already taken a beating this year, but the monthly unemployment rate in San Bernardino County is rising to levels unseen since 1997.
     Preliminary data released by the state’s Employment Development Department on Friday pegs San Bernardino County’s unemployment rate at 7.2 percent and Riverside County’s at 7.6 percent for the month of May.
     While both counties lost jobs in manufacturing, retail, entertainment, transportation, warehousing and professional services, the two sectors getting hit hardest were education and financial services.
     Statewide, the two-county region’s employment picture is looking worse than most other counties, yet better than places like Merced County, where the subprime housing meltdown has pummeled the area’s construction workforce.
     The Inland Empire’s big-picture numbers are even more interesting.
     Between May 2007 and May 2008, the two-county region lost 22,600 jobs, most of that due to a busted housing market.
     And at the same time, a much higher percentage of people who actually did find a job over than one-year period are now working for local, state and federal governments. In fact, EDD’s report says that government “saw the greatest year-over-year increase, adding 5,200 jobs.”
     If you’re unemployed and seeking work, check in with Uncle Sam — he might find something for you to do before the private sector does.

     -matthew.wrye@sbsun.com

     Click on the link below to research county data on the California Employment Development Department’s web site:

http://www.labormarketinfo.edd.ca.gov/cgi/databrowsing/localAreaProQSSelection.asp?menuChoice=localAreaPro

     Look below to see the Employment Development Department’s report for May:

 

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Expert: phase 3 of housing-market downturn coming soon

     The depressing California real-estate market could be seeing “the first flickers of a light at the end of a tunnel,” according to Ryan Ratcliff’s prediction.
     Ratcliff is one of four economists with UCLA’s Anderson Forecast team that says the United States will barely dodge a recession.
     Other experts disagree, but Anderson forecasters have been pretty darn accurate in the past.
     Within their data-laden 127-page book, Ratcliff examines California’s housing market and says the state may be on its way to Phase 3 of a three-phase downturn.
     Phase 1: home sales and prices leveled off and started dropping in 2006.
     Phase 2: globs of foreclosures hit the market in 2007 and 2008, forcing prices and sales even lower. By now, median sale prices on resale homes have dropped up to 40 percent in parts of the Inland Empire and 50 percent in several areas throughout the state.
     Phase 3: home sales pick up a bit, although 30 to 50 percent of them are foreclosure sales.
     “Our statistics suggest that foreclosure rates will remain a significant problem through at least the rest of 2008,” Ratcliff’s report says. “Even as foreclosures moderate in 2009, the glut of built-up inventory will continue to cast a shadow over the resale market. A ‘normal’ housing market is still a long way off.”
     Ratcliff’s tone on the housing market is a bit less optimistic than the other three forecasters who say the market will bottom out and possibly stabilize by the end of 2008.
     But there’s plenty of other experts — financial executives, home builder consultants, even veteran real-estate agents — who predict a bottom-out in late 2009 or 2010.
–matthew.wrye@inlandnewspapers.com

Look below to read the Anderson Forecast news release:

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