KERN Journal Business
Vol. 6, No. 6
A MEMBER O F T HE
Cover story
T BC M E DIA FAM ILY
New retail experience coming soon.
Page 8
December 2017 / January 2018
Real Estate Issue
Original Seven Oaks developer debuts Highgate at Seven Oaks
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t is hard to turn down a main street on the west side of Bakersfield without seeing signs for new homes or a new business opening its doors to the community. With exciting new retailers and businesses being added to shopping centers like The Shops at River Walk and Gosford Village, the continuing growth and evolution of Bakersfield’s west side is evident. Castle & Cooke has been at the forefront of this evolution as an innovative developer of retail destinations like The Marketplace, The Shops at River Walk and Gosford Village. With over 25 years of experience in developing private gated communities, Castle & Cooke has perfected master planning that gives residents an opportunity to live in beautiful residential neighborhoods just moments away from a variety of shopping and dining destinations. Turn to CASTLE & COOKE on Page 17 Castle & Cooke model home at the Highgate Shires community with Spanish front.
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INSIDE
Kern contractors seeing boom in home remodeling. Page 6
Granite Construction partners with Houchin Blood Bank to help community. Page 26
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e let Valley Republic Bank know that we were looking for a banking partner who understood what was needed in our community. They welcomed us with open arms and earned the account through the spirit of understanding us, and Kern County – they’re an important resource as we grow.”
D R. B RIJESH B HAMBI, MD Centric Health As a partner in The Bakersfield Heart Hospital, Central Cardiology Medical Clinic, Centric Health, and QualCare IPA, Dr. Bhambi’s reach in the medical landscape here runs deep. His practices’ level of commitment to local residents is unprecedented. While he and his partners work to bring the highest quality medical care to our county, they know that their local community bank is working to facilitate the expansion and growth that will take us into the next century. “We’re assured knowing that our bankers understand our vision. They’re our partner in bringing better healthcare to our neighborhoods,” — Dr. Bhambi
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December 2017 / January 2018
Journal KERN Business Showcasing Kern County business and industry December 2017 / January 2018 Vol. 6, No. 6 Kern Business Journal is a bimonthly publication of The Bakersfield Californian. Copies are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Publisher Ginger Moorhouse President/CEO Michelle Chantry Assistant Managing Editor Mark Nessia Specialty Publications Coordinator
Kasey Meredith Art Director Glenn Hammett Graphic Designer Holly Bikakis To submit a story kbj@bakersfield.com To advertise Diana Bolin dbolin@bakersfield.com 661-395-7521 To subscribe 661-392-5777
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Editor’s note A groundbreaking achievement in breaking ground PHOTO BY HENRY A. BARRIOS
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t’s amazing what can be accomplished in a year’s time. What used to be empty lots are now home to new businesses, homes and future developments. When I first came to Bakersfield 10 years ago, I drove past the dirt lot across from the Town & Country Village shopping center on Stockdale Highway and Coffee Road regularly on my way to CSU Bakersfield. On Nov. 29, the first of several businesses began operation as Cafe Rio opened its doors to customers. The new Stockdale center will also house a Sully’s Chevron, Blaze Pizza, Jersey Mike’s and possibly more. In mid-2015, a groundbreaking ceremony was held in downtown Bakersfield for Mark Nessia what would become a 44-unit luxury apartment complex. The first tenants moved in at the end of 2016 and several months later, the compound was fully leased. Now work is being done just a few blocks down the road as The Lofts on 18th are in progress. To the west, one of the most highly anticipated projects, Bakersfield Commons, is scheduled to begin construction in 2018. The “pedestrian-oriented, master-planned mixed-use community” is in response to the shifts in the retail world that gives consumers something they can’t get shopping online at home: an experience. When the Commons are completed, it will
become a social hub for those looking to meet friends, take in a movie, have a spa day and more. The approach is similar to the revitalization of the East Hills Mall set to begin in 2019 to turn it into a 345,000-square-foot “open-air” center featuring stores, restaurants and a movie theater. Read more about the projects set to change the local retail experience by John Cox on Page 8. Bass Pro Shops, after a decade of speculation, announced its intention to come to Kern County, building a 100,000-squarefoot store to anchor an 800,000-square-foot mixed-retail center known as Bakersfield Gateway on the northeast corner of Hosking Avenue and Highway 99. It will be the retailer’s fifth location in California and the only store between Manteca and Rancho Cucamonga. On the residential side, Castle & Cooke continues to leave its mark on the community as it further develops its latest community — Highgate — and the retail centers around the area, including The Shops at River Walk and Gosford Village. Castle & Cooke has been a leader in developing private gated communities and retail destinations, perfecting its master-planning approach that provides beautiful residential neighborhoods that are mere moments away from shopping and dining destinations. These are only the tip of the iceberg when it comes to all the exciting developments and additions taking place locally and it’s exciting to see what developers continue to bring to the once vacant spaces in the area.
Business at-a-glance
S.R. 178 road widening project nationally recognized The S.R. 178 road widening project received national recognition in the Roads and Bridges magazine as part of their Top 10 Roads in America, 2017. Granite Construction Company widened the over-50 year old S.R. 178, that spans three miles. The road was completed on May 1 and cost $25.5 million. T.Y. Lin International
throughout the construction.
designed the road. The shift between Canteria Road/Bedford Green Drive and Masterson Street allowed the widening of the highway to six lanes. Other places the road was widened: from two lanes to six lanes, east of Morning Drive to Masterson Street and from two to four lanes from Masterson Street to Miramonte Drive. Granite’s S.R. 178 road widening demanded careful consideration towards Bakersfield’s active San Joaquin kit fox population, an endangered species. With a great deal of environmental awareness, the team mitigated and monitored prior and
20th Annual State of the County Address
The Kern Economic Development Corporation will present the 20th Annual State of the County Address at the Double Tree, 3100 Camino Del Rio Court, on Wednesday, Jan. 31. Online registration is open and tickets will be on sale on
Jan. 24. Tickets will only be available online through the Kern EDC at www.kedc.com. Individual tickets are $100 and $1,000 for a reserved table of 10. Reception will start at 5 p.m., dinner at 6:30 p.m. and the program will begin at 7 p.m. The address will be presented by incoming Chair of the Kern County Board of Supervisors Mike Maggard, who will speak about Kern County’s model of excellence in 2017 and what to expect in 2018. For more information contact Tamara Baker at tamara@ kedc.com or 862-5150.
Sponsorship opportunities available for Give Big Kern
Tuesday, May 1, 2018, is Give Big Kern, an online crowdfunding effort of Kern Community Foundation that engages the entire community in “one day to celebrate the giving spirit of Kern County.” The 2017 effort raised nearly $150,000 and generated almost 15,000 volunteer hours benefitting 101 nonprofit organizations. Sponsorships ranging from $1,000 to $20,000 are currently available for 2018 and provide a unique opportunity to brand your business on www.givebigkern.org, as well as social media, print, video and live events engaging thousands of donors and community partners. Contact Louis Medina at 661-616-2603 or Louis@kernfoundation.org or go to www.kernfoundation.org/givebigkern.org for more information.
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Chamber roundup December 2017 / January 2018 events
Greater Bakersfield Chamber of Commerce
program, 11:30 a.m. to 1 p.m.; Seven Oaks Country Club, 2000 Grand Lakes Ave.; $65 per person, $800 for table of 10. Jan. 15 — Chamber Closed — Martin Luther King Jr. Day
Dec. 14 — Chamber Holiday Mixer; 5:30-7:30 p.m.; $5 members, $10 nonmembers; Metro Galleries, 1604 19th St. Dec. 15 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St.
Jan. 16 — Monthly Chamber Luncheon Tuesday, noon at Big Papa’s Steakhouse & Saloon, 1001 W. Tehachapi Blvd.
Feb. 2 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St.
Dec. 25-26 — Chamber Closed — Christmas Holidays Jan. 1 — Chamber Closed — New Year’s Day
Feb. 6 — Philanthropy on Tap; featured nonprofit, Bike Bakersfield; 5:30-7 p.m.; Temblor Brewing Co., 3200 Buck Owens Blvd., Suite 200. Free to attend.
Jan. 5, 12, 19 and 26 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Jan. 9 — Philanthropy on Tap; featured nonprofit: Special Olympics of Kern County; 5:30-7 p.m.; Imbibe Wine and Spirits Merchant, 4140 Truxtun Ave. Free to attend. Jan. 11 — 2018 Board Installation & Awards Luncheon; check-in, 11 a.m.;
Jan. 18 — Labor Law and HR Forum; check-in/networking, 7:30 a.m.; program, 8-10 a.m.; $25 members; $50 nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Presenting sponsor: Young Wooldridge LLP; co-sponsor: LeBeau-Thelen LLP.
Greater Tehachapi Chamber of Commerce
Feb. 7 — Deadline to submit nominations for 2018 Beautiful Bakersfield Awards. Applications can be accessed at bakersfieldchamber.org.
Jan. 20 — Installation & Recognition Gala, 5:30 p.m. Villa La Paz at the National Chavez Center
For information, please contact the Greater Bakersfield Chamber of Commerce at 661-327-4421 or visit www.bakersfieldchamber.org.
Real Estate
Kern County: Where the American dream is obtainable By Kim Schaefer
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here’s a reason homeownership is still considered the “American Dream.” A home is the best means for building wealth and a pathway to strength and stability in the communities we all call home. Middle-class families have built wealth for centuries through homeownership and real estate investment. Homeownership allows families to protect themselves against rising rents and inflation, while offering an opportunity to build equity over time. Here in Kern County, things are no different. For many California residents, homeownership is simply falling out of their reach. There is no denying that there is a housing crisis in California. It is difficult to turn on the television or open a paper without hearing about workers that are commuting farther and farther, contributing to traffic and pollution more than ever to have affordable housing. Many California households have no choice but to spend more than half of their incomes on housing costs. Employers have difficulty finding and keeping workers. It doesn’t appear that there is much relief in sight. There have been more than 130 housing and real estate related bills that were
introduced into the California legislature this year. Of those, Gov. Jerry Brown signed 15 bills that will become law. Certain legislation concentrates on making it easier for developers to build, such as Senate bill 35, which requires cities to streamline and approve projects in compliance with current zoning. Assembly bill 73 and Senate bill 540 will provide cities with an incentive to plan for new development. The intent of the signed legislation is to help provide relief to the housing crisis, but many speculate that the signed legislation may not even make a dent in reality. These are steps in the right direction, but there is much more work that needs to be done to reverse public policies that have compounded this crisis. Here’s the good news. Bakersfield recently ranked as the No. 1 most affordable city in California on SmartAsset’s “Most Affordable Big Cities in America.” The list compared housing markets and their closing costs, taxes, insurance and mortgage payments. According to the California Association of Realtors Housing Affordability Index, 29 percent of California households could afford to purchase the $553,260 median-priced home and that number continues to drop. In contrast, Kern County had 54 percent
of households in Kern County able to purchase the $232,500 median priced home so far in 2017.
As mentioned in previous KBJ articles, Bakersfield is No. 5 in the nation for affordable home ownership for teachers, first responders and restaurant workers. Over 98 percent of our housing listings are affordable for doctors, over 76 percent for teachers, over 75 percent for first responders and over 9 percent for restaurant
workers. In comparison, only 65 percent of teachers and first responders are able to afford a home in Fresno, 45 percent in Riverside, 22 percent in Los Angeles and 14 percent in San Diego. According to the Housing Affordability Index, Kern County ranked No. 2 coming in just behind Tehama County. Kern County’s cost of living for the third quarter 2017 Cost of Living Index was 104.6, making it the least expensive urban area in the state of California. While homeownership is nearly impossible for families in other areas of the state, Kern County can thrive. There is no doubt that we all need to pay attention to housing crisis in California to make sure smart large-term solutions are taking place that will allow for Californians to have access to affordable housing and a chance to build wealth with a purchase of a home. In the meanwhile, Kern County continues to embrace and welcome growth, and it just may be one of the last places in the Golden State that residents still have a chance at obtaining the American dream. Kim Schaefer is a community liaison for Kern Economic Development Corporation.
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www.belcourtsevenoaks.com
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Real Estate
Left: Remodeling trends vary, as do customers’ tastes. But local contractors report “hot styles” include modern, rustic designs in both kitchens and bathrooms. Below: Bakersfield contractor Tim Hardt reports that for his company, kitchen remodels are the No. 1 requested at 44 percent; bathrooms are second at 36 percent; room additions are third at 11 percent; rear yard remodels are fourth at 7 percent; and house facade facelifts are fifth at 2 percent. PHOTOS COURTESY OF WELLBORN CABINETS INC.
Kern contractors seeing boom in home remodeling By Dianne Hardisty
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usiness is good for Bakersfield contractors in the home remodeling business. They are seeing a steady flow of customers wanting improvements and upgrades in their kitchens and bathrooms. “Business is booming for me,” said Joel Darrah, who operates the small, family owned Darrah Construction. “I can’t take a new job until next year.” Although Darrah specializes in custom door installations, he says about 40 percent of his Dianne Hardisty business now comes from kitchen and bathroom remodeling. “I’m seeing a lot of baby boomers,” he said, noting that his typical customers are people who have lived in a house for a couple of decades, like where they are
living, but want upgrades. “I would say about 30 percent of my remodels also are the result of a life change,” he said, explaining that younger clients may have inherited property and want to make improvements that will fit their lifestyles. Older clients may be making changes that will allow them to live longer in their homes and enjoy modern amenities. The uptick in business Darrah and other local remodeling contractors are reporting is consistent with the findings of a recent study by the Harvard University’s Joint Center for Housing Studies. Titled “Demographic Change and the Remodeling Outlook,” the study predicts owner improvements by all age groups will increase by about 2 percent every year through 2025 — increasing nationwide from $221 billion in 2015 to $269 billion in 2025. The growth will be driven by the baby boomer generation’s desire to age in their own homes. The oldest of the 76.4 million boomers, the U.S. generation born after World War II, are turning 71
this year. As they retire, they are making decisions about where to live. And that is leading to an increased demand for accessible housing. “People are staying put and improving their homes,” concurred Michelle Hardt, who heads design services for Hardt Construction Services, the family owned company she operates with her husband, Tim. “We break down our customer base into three age groups: 18 to 32; 33 to 54; and 55-up,” said Tim Hardt. The first group — millennials — “don’t seem to have much saved cash and are either receiving support from
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Real Estate
parents or are leveraged to the hilt. “The 33 to 54 age group seems to be the ones with the most resources. What I mean by this is that they are, generally speaking, entering into or are in the midst of their highest income-earning years. They are generally educated, are looking for quality at a reasonable price and generally know what they want. “This is the group we focus on most. They have saved their money, made smart financial decisions in the past and still have time to make more money. So they are not afraid to spend it now for a better life style.
“We have been in the business for nearly 30 years,” he said. “I have never looked [at any project] as a single client. I look at them as lifelong clients. That may be the life of the house or of the person. They will call us back for additional remodels or repairs.” – Brian Sorci, Owner of Sorci Construction Services
“The last group — personally my favorite — is [comprised of people who are] not looking to move into new homes or take on more/new debt. They are slower to make decisions; however, when they make their minds up, they rarely change. They have plenty of financial resources, but are very frugal. [That’s] probably why they have the cash reserves. They tend to make smaller changes on their homes, mostly facelifts on kitchens or bathrooms, and not add square footage for growing families.” From his company’s experience, Tim Hardt summarized the following trends: 77 percent of customers making contact with Hardt Construction for the first time are women between the ages of 42 and 54; the average upgrade to a home has risen for his company to $67,000; kitchen remodels are the No. 1 requested at 44 percent; bathrooms are second at 36 percent; room additions are third at 11 percent; rear yard remodels are fourth at 7 percent; and house facade facelifts are fifth at 2 percent. “People often call us to remodel a kitchen,” said Michelle Hardt. “But when I go out to their home to see what changes they want to make, the conversation can expand to include adjacent rooms or maybe the entire house.” Brian Sorci, the owner of Sorci Construction Services, stressed the need to
listen to customers and determine their remodeling goals. How long do they plan on living in a house? Why are improvements being made? And, of course, cost is a factor. “Every day we get calls from people asking us how much a kitchen or bathroom remodel would cost,” said Sorci, noting costs depend on many factors, including how extensive the remodel will be and the quality of the materials used. “What kind of cabinets do they want? Tens of thousands of dollars can be added to a remodeling just by the selection of appliances. “We do custom remodeling,” he explained. “They are unique, one of a kind. Everyone has their own slant as to what they want. Some people know exactly what they want. Others need help seeing it. Our budgets are pretty sophisticated. We try to give the client the ability to control the budget.” Sorci said he views every home in Bakersfield — whether it was just recently constructed or is 100 years old — as a potential client. Homeowners are always adding, repairing or changing styles. New families move in. Others move out. It’s the reality of life. “We have been in the business for nearly 30 years,” he said. “I have never looked [at any project] as a single client. I look at them as lifelong clients. That may be the life of the house or of the person. They will call us back for additional remodels or repairs.” Remodeling trends vary, as do customers’ tastes. But local contractors report “hot styles” include modern, rustic designs in both kitchens and bathrooms. While being able to “age in place” may be a big motivation to remodel, customers want safety and comfort features to be subtly included. Often this is referred to as “universal design,” meaning the features appeal to people of all ages. These features include lever handles, rather than doorknobs; motion-sensor light switches; nonslip flooring; European showers, which lack entry dams to allow access by wheelchairs; grab bars in bathrooms; ADA-height toilets, which is now called “comfort height”; and wider doorways and airy rooms, which enhance safety and access. And while researchers give much of the credit for the present spike in remodeling to boomers, they urge contractors to pay attention to millennial customers. According to HomeAdvisor’s 2017 True Cost Report, the millennial generation, which is most likely to invest in “fixer-upper” homes, is closely trailing behind boomers in home improvement spending. Millennials like to customize and personalize their living space. The Harvard study predicts in the next decade, millennials will account for more than 25 percent of all home improvement spending.
The Laborde Team Experience. Integrity. Professional. Experts in Residential & Commercial Property Sales and Listings.
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Real Estate
Real estate information at Kern County Library By Katherine Ross Solutions to your real estate-related perplexities could start with your local library. The Kern County Library has books and online periodical databases to assist with various types of real estate research — home buying and selling, landlord-tenant issues, real estate agent licensing and more. Our easy-to-understand Nolo Press books include the following titles: “California Tenant’s Rights,” “Leases & Rental Agreements,” “How to Buy a House in California,” “Essential Guide for First-Time Home Owners” and “Selling your House in a Tough Market.” Useful books from other publishers include “Zillow Talk: The New Rules of Real Estate” and “Keep Calm, it’s just Real Estate.” We also have a new book titled “Real Estate Licensing Exams.” For up-to-date information on the real estate industry, the library provides access to Ebsco’s Legal, Small Business and Academic Search databases. These may be accessed within the library or from any other internet connection through your library card. From our research website, www.kerncountylibrary.org/research, choose “Business, Legal or Student” categories. Ebsco’s databases share a common interface, including the useful advanced search option, which can hook you up to instant full text, peer-reviewed or journal information, and many other search options, such as limiting by date or type of information. Ebsco’s Legal Information Reference Center database includes a link to property and real estate, right at the initial search screen. When you click on it, it displays the subcategories: Buying a House, Foreclosure, Homeowners, Landlords & Property Management, Renters & Tenants Rights, and Selling a House. Clicking on any one of these gives you access to the relevant chapters from Nolo Press books. At any point in your exploration, a search box allows you to search for additional keywords. The Ebsco Small Business Reference Center has a browse by category feature that includes real estate services in its alphabetical list. If you click on that, you can choose between articles and industry information. A sidebar shows helpful links for entrepreneurs, including start-up kit and business plans. Again, a search box allows for more focused searches. Ebsco’s Academic Search Complete, through its advanced search feature, allows a search as specific as California home mortgages, limiting your full-text results to articles published between 2012 and 2017. In this way, you can obtain a results list of about 46 periodical articles. Using the scholarly (peer-reviewed) journals limit on top of that, the results dwindle down to nine. In comparison, a similar search in the legal database yields about 15 separate subject-specific chapters from six different Nolo Press books. So, wherever you’re coming from, whether you’re a real estate agent, a home owner or home buyer, a renter or just trying to explore your options, these databases have a lot to offer. And your local library has not only its own books, but a whole San Joaquin Valley’s worth of public library books at your disposal; you can place a hold on books through our online catalog for delivery to your nearest neighborhood library branch. All this, and much more, can be accessed through your local library. Katherine Ross is a reference librarian at the Beale Memorial Library, main branch of the Kern County Library system.
SOURCE: TRAMMELL CROW CO.
This is a rendering of World Oil Corp.’s proposed Bakersfield Commons project, a mixed-use development that would include residential, office, entertainment, health care and light industrial land uses. It would be built on property generally northwest of Coffee and Brimhall roads.
Upcoming development projects set to change the retail experience By John Cox
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he traditional approach wasn’t going to work for 260 acres of vacant land at Brimhall and Coffee roads. There were already a lot of big stores nearby and adding to their numbers wouldn’t necessarily complement the landowner’s wishes for a mixed-use project with offices and residences. The bigger challenge, and the principle helping guide the project dubbed Bakersfield Commons, came from a fundamental shift in the retail world. People don’t generally shop like they used to. They wander the aisles less. In many cases, they’ve already done their shopping while stretched out on the couch. Orders arrive on the front step in two days or fewer. What, then, do people look for in a shopping center these days? They seek an experience, said Jacqui Kitchen, who has watched the Commons situation as Bakersfield’s community development director. Shoppers these days go into a store knowing what they want to buy ahead of time. They’re there to meet friends, take in a movie, maybe go to the spa, she said — something more than just find a product and leave. Kitchen pointed to another difference between landowner World Oil Corp.’s development plans and the approach that almost
surely would have been taken in years past. The Commons is not designed to attract people from across the region so much as it is geared toward its more immediate neighbors. Think bicycle trails, shaded paths, cafes and gathering places such as fountains where people can plan to meet and hang out. Here’s how Kitchen said this is probably going to play out at the Commons: There may well be a movie theater, a specialized sporting goods and clothing store, a Cheesecake Factory restaurant and a high-end, organic grocer. And Top Golf. Imagine a mix between golfing and bowling, where friends gather to whack balls at targets while enjoying food and drinks. That’s Top Golf. The Commons won’t just be retail and entertainment. In October, World Oil announced there will be a 200-bed medical center, 280,000 square feet of light industrial facilities and 400,000 square feet of office, as well as apartment units, senior housing and homes. Construction is supposed to begin in 2018. Don’t expect the development, or others like it around the country, to completely replace the traditional retail experience, Kitchen said. Some people still want to touch and feel goods before they buy them. There will probably always be opportunities for them to do so. At the same time, Kitchen said the city has an interest in embrac-
ing retail trends that reflect new realities. “We want to see innovative designs,” she said. “The city needs to do what it can to support the evolution of retail.” The city also wants the Commons’ developer, Dallas-based Trammell Crow Co., to keep the project’s offerings affordable while at the same time delivering the quality Bakersfield expects.
The Commons is not designed to attract people from across the region so much as it is geared toward its more immediate neighbors. Think bicycle trails, shaded paths, cafes and gathering places such as fountains where people can plan to meet and hang out. “That’s a hard thing to do, to walk that line,” she said. “I hope they can figure it out — make it nice but keep it affordable.” Trammell Crow’s senior associate on the project, Abbey Ehman, assured shoppers in an October news release the Commons will have “outstanding amenity areas,” with parks and pedestrian pathways. She added it will be “thoughtfully designed in line with World Oil and TCC’s commitment to sustainability and wellness.”
December 2017 / January 2018
KERN BUSINESS JOURNAL
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December 2017 / January 2018
Agriculture
Efficiency helps make Kern new US leader in crop values By Dane Oleson
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hose in Kern County will continue to celebrate their new status as the 2016 U.S. leader in crop values, widely released last September. Kern County has long been a top national producer of agriculture — and the dollars that go with it — often reaching runner-up status. But in 2016, crop values for the county exceeded $7.1 billion, beating common contenders Tulare and Fresno (along with every other county in the U.S.) earning Kern the top spot. Analysts will dig deep into the numbers and reasons for Kern’s surge, undoubtedly discovering multiple causes for the win. Among those likely to bubble to the top are that county growers have been able to maximize efficiency from Dane Oleson planting to harvest. Efficiency in farming, as in every business, is a priority. Increasing efficiency saves money, increases speed and can save time. Farmers consistently think about all these things and more. In addition, farmers, no matter the crop, also consider water usage to ensure sustainability of natural resources and courtesy to the people (and
even the animals) who make up the local traffic and community.
Water Efficiency Of those Kern County crops with $7.1 billion, more than 60 percent are grapes, citrus and almonds. Almonds started to gain traction in Kern county in the early 1970s, replacing cotton. Those early adapting almond farmers were accustomed to traditional row crops, which were watered by flood irrigation. Once they realized that a permanent crop of trees could be farmed much more efficiently, they began installing drip systems and saved 33 percent of the water when compared to traditional flood irrigation. This is particularly significant because farmers rely mostly on well water, rather than city water supplies, after threat of government restrictions (figuratively) and the recent drought (literally) dried up supplies. There have been many times when farmers were attacked for using too much water but people fail to realize how efficient they actually are and how much thought goes into saving every drop.
Dust efficiency Not only are farmers being more efficient with their resources, but they also take into consideration the health and safety of the public. The invention of “low dust” equipment is an innovation that has
permeated the almond industry. Farmers can now choose to buy low-dust harvesters and sweepers. At this point, there has been no regulation to enforce the use of low-dust equipment, but many farmers choose to use the most dust-efficient equipment anyway. Trying to keep dust off the roadways, out of the air and away from pedestrians is a constant concern of farmers. They plan their equipment routes with unwanted dust production in mind to make sure their blowers are pointed away from the road when possible. Little things like this can make a big difference to passing traffic and general air quality for people and animals. We can expect that farmers will continue to innovate toward efficiency in their processes from planting to growing to harvest. Along with the values of preserving natural resources and human health, there are more than seven billion other reasons to celebrate Kern County’s new rank at the top of U.S. crop values. Dane Oleson has been involved in the agricultural community for 3 ½ years. His last two years have been in the sales department at Kern Machinery. As a salesman, Oleson has the opportunity to spend every day in the field using and learning about the newest advancements in Kern County ag.
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Finance
Hidden high costs to replace buildings destroyed in disasters not reported in the news By John Pryor
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ecent fire and windstorm catastrophes that caused extensive building damage are widely reported in the media. Costs are in the billions. Each report seems to set unprecedented levels. However, data reported are limited to “direct costs” for: • Debris removal • Reconstruction of buildings • Replacement of business personal property Direct costs obvious to all are only the tip of the iceberg because indirect costs are incalculable at this stage and not reportable. Yet each is very real. Indirect costs are incurred during the reconstruction period. The duration of this period will vary, yet always seems to last longer than initially expected. For example, debris removal may take a month or longer depending on supply and demand of contractors. John Pryor Moreover, drafting plans and specifications can take months to complete to your satisfaction. The plan approval process follows with the city or county. If these departments are already behind in such processing today, how long will it take following a conflagration? Construction itself will take months to complete, so planning should be based on at least a full year for resumption of operations at the original location in most instances. Construction costs can be expected to be higher in a disaster simply because of supply and demand.
During this period, these are some of the unpublicized indirect property risks to be expected — and addressed — in advance of any catastrophe: • Upgrading to current building code standards. • Business income will reduce, if not “evaporate,” yet fixed costs continue. • Long-term employees need to be retained — but at what cost? • Customers will shop elsewhere during the shutdown, but will they return? • Your building may be undamaged while one or more other structures in your shopping center or office complex are severely damaged with the overall area cordoned off so your customers or clients cannot enter your business. • One or more of your key supply chain sources anywhere in the world can be totally shut down and unable to deliver product to you. (Remember Fukushima?) • Service businesses need to incur costs well above normal operating expenses to continue customer service from a temporary location.
What are the solutions? For building code upgrade, an endorsement for building ordinance coverage should be added and the amount of insurance adjusted accordingly. For example, if your building is 10,000 square feet
AP PHOTO / U.S. FOREST SERVICE
In this undated photo provided by the U.S. Forest Service, the Rim Fire burns near Groveland Ranger Station in Groveland, California.
or larger and not equipped with an automatic sprinkler system, you’ll be required to add this costly installation. (Fortunately, your fire insurance will cost much less in the future.) ADA requirements may be a factor as well. Business interruption and extra expense coverages are the primary solution. However, coverage enhancement endorsements may still need to be added. For example: • Such insurance fund’s profits that otherwise would have been earned as well as pay fixed expenses that continue even though the business is shut down. However, continuing expenses typically include salaries only of key employees. To cover ordinary payroll, an extension endorsement is needed. A manufacturer on the East Coast was widely publicized and hailed as a hero for continuing payroll of all employees while his plant was totally shut down. His secret? Extended business income coverage to include all employees, not solely key employees. In addition, when operations resume, revenue is inevitably lower than at the time of loss. An extended period of indemnity endorsement for six months (at least) should plug this gap. For businesses that cannot shut down, extra expense coverage is available to fund added costs incurred for rental of a temporary location, overtime for employees and other marginal costs to keep customer services uninterrupted and keep revenue flowing. (Advance payments from your insurer should be requested if not offered.) Where buildings are not damaged — nor even within the disaster zone — customers may not be permitted to access the business, or a remote supply chain may be shutdown. Contingent business income coverage is available. These scenarios apply not only in wildfires and hur-
ricanes but also in the overdue catastrophic risk confronting us in Kern County: a major earthquake. “Major” means 8.0 intensity and shaking for 120 seconds (instead of 7.3 and 20 seconds here during our lifetimes).
Indirect costs are incurred during the reconstruction period. The duration of this period will vary, yet always seems to last longer than initially expected. For example, debris removal may take a month or longer depending on supply and demand of contractors. Get earthquake proposals from your broker for both an extension of your current policy and for a separate earthquake (DIC) policy where premiums and deductibles typically are lower. Finally, draft a disaster plan (to save lives) plus a business continuity plan (to save your business). Once you have taken these important steps, you’ll enjoy the key benefit of risk management, viz., a quiet night’s sleep. John Pryor is a local risk management consultant and author of “Quality Risk Management Fieldbook” published by International Risk Management Institute in Dallas for business owners.
December 2017 / January 2018
KERN BUSINESS JOURNAL
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Finance
Fate of like-kind exchange in limbo By Joel A. Bock
S
ince its inception as part of The Revenue Act of 1921, many real estate investors have reaped the benefits of the “like-kind exchange.” Over the years, the provisions of the current Internal Revenue Code Section 1031 have seen several changes both as a result of additional regulations issued by the Treasury Department as well as courts decisions at varying levels. At its core, the like-kind exchange is intended to allow taxpayers to defer taxable gain recognition with respect to property (with certain exceptions) held for business or investment if exchanged for property held for business or investment of a like kind. While the name may imply a trading of similar properties, the like-kind exchange does not require properties to be exchanged simultaneously, so long as the replacement property is identified within 45 Joel A. Bock days and obtained within 180 days of the sale of the relinquished property and the funds from the relinquished property are held by a qualified intermediary. In recent years, the fate of the like-kind exchange has been uncertain. In 2014, the former Ways and Means Committee Chairman Dave Camp released a discussion draft of the Tax Reform Act of 2014 that called the complete repeal of the like-kind exchange. The rationale for this proposal was that the like-kind exchange allows multiple consecutive exchanges enabling taxpayers to defer (and at times ultimately avoid though a basis step-up) taxation on the disposition of property. An additional stated concern was that the current rules do not have a precise definition of “like-kind,” which often leads to controversy with the IRS and potential abuse. Ultimately, this act never gained much traction, so the like-kind exchange continued. More recently, in 2016 the current Ways and Means Committee Chairman Kevin Brady proposed a tax reform blueprint commonly referred to as “A Better Way.” While
info@gregspetro.com www.gregspetro.com
the proposal did not specifically address the like-kind exchange, many experts believed that the plan’s provisions for immediate full expensing of business and investment property (including buildings but excluding land) would effectively end the like-exchange if enacted. Like the full repeal included in aforementioned Tax Reform Act of 2014, the full expensing provisions included in the blueprint have ultimately been abandoned. As we approach the end of 2017, at the time of writAt its core, the like-kind exchange ing, there exists two viable tax reform plans. The House of is intended to allow taxpayers to Representatives and the Senate defer taxable gain recognition with Finance Committee have both released versions of the “Tax respect to property (with certain Cuts and Jobs Act.” While the exceptions) held for business or like-kind exchange has historically been applicable to both investment if exchanged for real and personal property (as property held for business or determined under state law), both the House and Senate investment of a like kind. versions of tax reform intend to limit like-kind exchanges after 2017 to real property. While there are certainly taxpayers who will not be pleased with this change, for real estate investors, this is welcome news given the uncertainty over the past few years. Please consult your tax adviser to determine how tax reform may impact your specific situation. Joel A. Bock, CPA, MST is a partner in Daniells Phillips Vaughan & Bock, a Bakersfield accounting firm.
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KERN BUSINESS JOURNAL
December 2017 / January 2018
Finance
Plan, talk before passing vacation homes to heirs By Steven Van Metre
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our home — and even maybe your vacation home — can be a large share of your worth. When it comes to calculating the size of your retirement nest egg, the value of your property may be no yolk. (OK, that was a bad pun.) As workers near retirement age, they tend to view all of their property as part of their retirement savings calculations. I have had many conversations with clients about their property and how it affects their Steven Van Metre retirement plans. The scenario that I will describe is based on these conversations and uses an imaginary couple to illustrate some of the retirement planning considerations. I will call the couple Jim, who works for a local government agency, and Barbara, a teacher. When they retire, they both will have public pensions. Despite putting adult children through college, they also will have managed to save a “respectable” amount for retirement. Likely, Jim and Barbara own a home in a nice Bakersfield neighborhood, where property values have not appreciated considerably. If they are lucky, the value of their home, which significantly slumped during the Great Recession, has basically recovered. When they retire, the couple can be expected to eventually sell the house and use the proceeds to “downsize” — maybe move into a gated, agerestricted community. In this scenario, the challenge for the couple will be deciding what to do with their vacation house. The central coast is very popular with my clients. I know that aging boomers who purchased, say, a twobedroom, two-bath beachfront “cottage” in Cayucos
in the 1970s for $70,000, will find it is now worth about $3 million after four decades of improvements and skyrocketing coastal values. It is conceivable that my imaginary couple’s retirement nest egg will include at least $500,000 in traditional savings, plus their two pensions and the $3 million on the ground in Cayucos. But they are “paper millionaires,” because the value of the beachfront home is not “liquid.” It can’t quickly be spent to pay medical expenses, the increased living costs that come with growing old, nor long-term health care, which someday may be needed. And then there is the practical question: What will become of the vacation house when the owners die? When I ask that question, often my clients with vacation homes will provide a simple response: We’ll give the house to the kids. But that’s not as simple as it sounds. Using the scenario I provided, maybe Jim and Barbara’s son, who lives in California, will want the house. But their other children, who live out of state, may be not interested. Perhaps they won’t be able to pay maintenance costs. Perhaps they live too far away to use it. When deciding the disposition of property — especially long-cherished family vacation homes — a good, frank family discussion is required. Like most aspects of retirement and estate planning, it is important to involve those who will be affected. It is important to seek input from people — especially adult children and heirs — who may become involved in assisting you through the often challenging “golden years.” Helping retirees — or soon-to-be retirees — develop retirement savings and estate plans, especially when these plans involve property or complicated assets, is a “team effort.” Members of the team should include financial planners, lawyers and accountants. The goal should be to help retirees realize
the highest value of their assets, while minimizing tax implications. In the scenario I described, the first step should be for the couple to ask their children what they want to happen to the Cayucos house. Do they want to keep it? Sell it? Turn it into income property?
When deciding the disposition of property — especially long-cherished family vacation homes — a good, frank family discussion is required. Like most aspects of retirement and estate planning, it is important to involve those who will be affected. Working from there, the couple can designate their other assets to equalize their estate to compensate children, who may not be interested or cannot afford to retain ownership in the house. There also are legal instruments — trusts and “qualified personal residence trusts” — which might allow the couple upon retirement to move their residence to the Cayucos house and pay their children rent. Under some circumstances, this arrangement may be beneficial. All good retirement and estate plans are based on solid research and multifaceted, competent advice. The process should begin with frank discussions among family members. Steven Van Metre is a Bakersfield certified financial planner who specializes in retirement income strategies and teaches a course on retirement planning for the Levan Institute for Lifelong Learning at Bakersfield College. His website is www.stevenvanmetre.com.
December 2017 / January 2018
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Finance
An inside look at 1031 exchange
By Billie Sue Records
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n the coming months, we will likely be hearing a lot of talk from Washington about federal tax reform and closing loopholes. Simplifying and making federal tax laws fair are admirable goals. Care must be taken that the results also benefit our nation’s economic structure. Of particular concern are suggestions from a few lawmakers that “like-kind exchanges,” or “1031 exchanges,” should be discontinued. The Billie Sue Records exchanges get their name from the Internal Revenue Code Section 1031. These exchanges are mechanisms used by companies and investors to temporarily defer paying federal capital gains taxes on such things as the sale of farm equipment, aircraft, intellectual property and real estate. The 1031 Tax Code was created in 1921 and embodies a centuries-old concept of horse swapping. Trade a horse for a horse, or in today’s world, business property for like-kind business property. To grasp the concept, consider the common exchange involved in the purchase of a single-family rental. The buyer has two rentals. She sells both to purchase a newer single-family rental that will bring in higher rent values. The seller sells both relinquished properties and purchases a higher value rental. When we are talking about using 1031 exchanges to “swap” business property or equipment, it’s more complicated and regulated. It also requires the assistance of a “qualified intermediary.” In a 1031 exchange, an investor places the proceeds from his relinquished property — for example, a commercial building — with his “qualified intermediary,” while he searches for “like-kind property” to purchase. When the transac-
tion is completed, the investor postpones the capital gains tax liability on the sale of the relinquished property. These taxes are postponed or deferred, as long as the “new property” is held by the investor for a certain period of time. More often, taxes owed will be paid when the “new property” eventually is sold, unless another 1031 exchange again is used to sell the property and acquire “likekind” replacement property. Across every industry, 1031 exchanges are used in a wide variety of transactions. As an example, when medical equipment is sold, federal and state capital gains, combined with recaptured depreciation taxes, could equal 25 percent to 40 percent of the gain. Rather than paying taxes on the sale, with a 1031 exchange, the seller can defer paying taxes by reinvesting the proceeds in the purchase of new, like-kind equipment. This deferred payment of capital gains taxes, which has long been regarded as a critical incentive for owners to grow their businesses and invest in the U.S., is a proven economic stimulator. This puts the dollars back into the community, creating jobs, increasing taxes, etc. A 2015 study by the national accounting firm Ernst & Young concluded removing the stimulus would cost the nation around $8 billion. Investment levels nationwide would likely decline by $7 billion annually, while national income would fall by $1.4 billion annually. Using a 1031 exchange is simply a matter of timing. Taxes are delayed in order to make short- or long-term investments, relocate businesses, grow businesses, or change real estate portfolios. It does not “forgive” payment of taxes. Before growing, or reinvesting in your business, talk to an accountant and attorney to determine if a 1031 exchange will be beneficial. Billie Sue Records is senior vice president 1031 exchange manager at Bakersfield-based Mission Bank.
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December 2017 / January 2018
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December 2017 / January 2018
Legal & Human Resources
Getting professionals to behave professionally By Robin Paggi
W
hile preparing to write this article, I Googled “rude behavior” and “25 Rudest Rude Behaviors — Are You an Offender?” was the first piece listed. According to the author, rude behavior includes things like inappropriate use of cell phones, interrupting others, cutting people off in traffic and that type of thing. The first comment posted after the article said this: “This whole post is so petty and trivial. There are actually bad things that happen that are much more worthy of your complaints and fretting upon than when people are unintentionally rude. Funny enough, you sound Robin Paggi like a completely stuck-up, entitled snob, like the people you’re pointing fingers at. Get a life, c---.” Alrighty, then. Granted, the person who wrote that is undoubtedly a lives-with-his-mother basement-dwelling troll, unfortunately, comments like that are not uncommon in our society today. If it seems to you like civil behavior has gone the way of rotary phones and eight-track tapes, you’re not alone. According to the recent survey “Civility in America VII: The State of Civility,” 75 percent of Americans think incivility has reached “crisis levels.”
You don’t need to watch the news, listen to the radio or get on social media to be subjected to incivility — just go to work. “Workplace incivility is rampant and on the rise,” according to Christine Porath, an associate professor at the McDonough School of Business at Georgetown University and author of “Mastering Civility.” A survey she conducted in 1998 revealed that nearly half of the respondents said they were treated rudely at least once a month. That number rose to 55 percent in 2011 and 62 percent in 2016. I can hardly wait to see the 2017 numbers. Being uncivil means being rude and here’s a personal example of what it looks like. While conducting a workshop for a client recently, two employees came in late, sat in the back of the room and spent the entire time they were there talking and laughing with each other while texting. Their supervisor sat by them (he also came in late) and did nothing about their behavior. Perhaps he didn’t think they were being rude, but I did and, according to my research, most people in our society would agree with me. Arriving late, having side conversations and texting during meetings shows up on just about every “examples of rude behavior” list on Google. Is rude behavior so bad? According to University of Florida professor D. Amir Erez, it is. A series of studies he conducted demonstrated that being subjected to rude
behavior impacts our brain’s ability to function, specifically being able to be creative, help others and solve problems. I can attest to that. I felt so disrespected by the talking/laughing/texting training participants that I could hardly persevere through the workshop. My brain was shutting down and I wanted to shut down with it. Civility and professionalism go hand in hand. Unfortunately, we have a tendency to think that when people become employed, they know how to behave professionally.
If you want your employees to mind their manners so you can get the best performance from everyone, this is how you encourage them to do so: 1. Set clear expectations about their behavior. Don’t assume that people have common sense or will naturally behave the way you want them to. Tell employees about the specific behavior that’s expected of them at work, such as “No side conversations or texting during meetings.” 2. Provide training and individual coaching for employees who need some additional help. 3. Model appropriate behavior. If you’re going to tell people to act professionally, you have to do it too. 4. Hold people accountable, which means don’t let employees get away with behaving badly. Disciplinary action usually inspires people to behave better. Getting employees to conduct themselves in a civil manner requires that you tell them, teach them and show them how, then ensure they follow suit. People don’t necessarily act professionally just because they have a profession. Robin Paggi is a training and development specialist with Worklogic HR.
Top 25 rudest rude behaviors — are you an offender? 25. Being Noisy — It doesn't matter where you are, but if you're around people, blasting music is rude whether it's from your car, your home stereo or in your yard. 24. Cutting in Lines — It happens all the time at the grocery store, at public events and at amusement parks. No one is amused. 23. Interrupting — It is normal for very young children to interrupt adults when they are talking, but adults should know better than to cut someone off while they’re saying something. 22. Barking Dogs — Anyone who has been kept up all night by a barking dog knows how terrible it is. You’re trying to sleep and all you can think of is how inconsiderate your neighbor must be to let a dog bark nonstop. 21. Not Returning Your Shopping Cart — This should be a simple thing to do but parking lots are full of unreturned shopping carts. 20. Any Form of Disrespect to the Elderly — It seems these days that new generations are not being raised to respect their elders. People should show respect to the elderly by holding doors for them and offering them seats if they need one. 19. Bad Table Manners — Elbows should be kept off tables. No one should reach over the table for food or accidentally shove his or her armpit in a guest’s face while reaching for something. Slurping, smacking and chewing with one’s mouth open is offensive and just plain gross. 18. Cutting Off Others in Traffic — Respectful driv-
ing on the highways is more than good manners; it keeps everyone safe. Monitor your own driving so frustrated drivers won’t have to cut in front of you. 17. Tailgating — Tailgating is when a driver follows the car in front of it too closely and does not allow a “two-second” space between the vehicles, that is, at least the distance it would take a car to travel two seconds at its current speed. 16. Littering — Littering includes everything from throwing cigarette butts out the window of a car to not getting trash or garbage into the container it belongs in, or dumping trash on public or private property. 15. Not Using a Turn Signal — Even though using a turn signal only takes a minimal flick of the wrist, more and more drivers are refusing to use this system of communication with other drivers. 14. Using the Last of Anything and Not Replacing It — This includes copy paper in the copier at work, gas in a shared car and especially toilet paper at home! 13. Being Late — Sure, life happens, and we are all late for something sometimes, but those who habitually come to work late with the same excuse are rude and hurt the morale of the office. 12. Improper Cell Phone Use — The introduction and popularity of cellphones has caused a whole new class of rudeness. Despite how commonplace these behaviors have become, it is still rude to be texting on your phone while also having a conversation with someone else.
Source: For the complete list, visit, www.pairedlife.com/etiquette/25-Rudest-Behaviors-Are-You-an-Offender
11. Taking and Misusing Handicapped Parking Spots — Not only is parking in a handicapped spot rude, but it is also illegal. 10. Not Teaching or Enforcing Manners in Children — Not all parents are drill sergeants when it comes to discipline, but not instilling any manners in your child only hurts his or her future potential. Allowing children to run wild in public places and letting them scream and throw tantrums is rude behavior. 9. Taking Credit for the Work of Others — Taking credit for the work of others can include plagiarism, cheating and brown-nosing at work. Those who do not have the chops to get ahead in life rarely get very far by taking the credit for other people’s work. 8. Personal Grooming in Public — Grooming in public is insanitary and offensive behavior. 7. Treating Store Employees or Waitstaff Rudely — So many people walk into public establishments and businesses with an outrageous sense of entitlement. Sure, if you are paying for a service, you should expect to be treated well, but some people are totally unreasonable and are never happy with what they get. 6. Cashiers Who Talk on Their Cellphones and Don't Acknowledge Customers During Checkout — It is increasingly common to walk into a convenience store to pay for gas and find that the cashier is deep into heavy gossip on a cell phone. 5. Blocking the Aisles in Walmart and Grocery Stores – Many people block aisles in popular stores and make it difficult to get around. They
stare at the canned soup on one side of the aisle and park their cart on the other side, making it impossible to get around them. 4. Leaving Messes in Public Bathrooms and Not Washing Your Hands — It takes a surprisingly small amount of effort to flush a toilet. Even worse, more and more people don't wash their hands after using the bathroom. 3. Driving Slow in the Passing Lane — On any twolane road, the left lane is designed for passing the slower traffic in the right lane. However, slow drivers have no problem driving 10 miles below the speed limit in the passing lane for the duration of their travel. They either do not see the mounting traffic stuck behind them or ignore the honking of people who would like to pass them. 2. Talking and Using a Cell Phone in Movie Theaters — Americans have started turning their backs on public movie theaters not only because of the outrageous price of tickets and refreshments, but because they can’t enjoy the movie they have paid an arm and a leg to see because of other rude customers. 1. Not Picking Up After Your Dog and Letting Them Use the Bathroom on Private Property — People who take pride in their yards are subject to rude pet owners who refuse to clean up after their pet. Not only is this toxic, disgusting, and nasty, it is actually illegal in most cities that have ordinances against this kind of behavior.
December 2017 / January 2018
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December 2017 / January 2018
Legal & Human Resources
Newly promoted supervisors need ‘quick start’
By Karen Bonanno
A
s the year draws to a close, the focus of business owners and managers often shifts to workforce changes. The new year may see an expansion or reduction in business activities. Critical management employees may be retiring. These developments will require workplace adjustments. Notable among them is the promotion of existing line employees to supervisory and management positions. How to select and support these employees as they transition to new roles is critically important — for the success of the employees and the business. Promotion decisions should be
made deliberately, not desperately. To be able to make deliberate decisions, company officials should continually be on the lookout for people with management and leadership skills. They should “test drive” line employees in informal, or temporary supervisory and management, roles. Form task forces, product development teams and other collaborative groups to allow promising employees opportunities to lead and to expand their knowledge of company operations. Provide line employees training to grow their job, people and leadership skills. Through this training and collaborative experience, the next generation of creative and effective managers will be recognized. Before promoting employees ask: Are they competent in the job they
are doing now? Do they have people skills and leadership abilities? Are they trustworthy and committed to the company’s goals and mission? Are they able to confront and resolve conflicts? Are they willing to take risks? Are they organized? The transition from co-worker to supervisor is not an easy one. It can be fraught with insecurity and met with outright hostility from former colleagues. For the transition to succeed, the promoted employee must be supported by both training and mentoring. Assign a mentor to the promoted employee — preferably one who has moved up in the ranks and has experienced the challenges. Additional support can come from memberships in professional organizations. Identify
December 2017 / January 2018
these organizations and encourage the new supervisor to join. Provide management training. An employee may have been the best in his or her job. But supervising other employees is a unique skill that requires specific training. Twice a year — in February and in September — P.A.S. offers a “Quick Start” course of eight four-hour weekly sessions to help supervisors more effectively increase morale, productivity and profitability. Supervisor training courses should address moving from peer to supervisor, understanding the role of management, and dealing with negativity and conflict. Training should develop a supervisor’s ability to effectively communicate, understand, listen and build trust. A workforce is comprised of different personalities. Supervisors must understand and work with a variety of work styles to tap the talents of the group and create a positive work environment. Reviewing and disciplining subordinates often is a huge challenge for new supervisors. Management training should include setting, reviewing and communicating performance objectives, documenting performance, and addressing deficiencies.
KERN BUSINESS JOURNAL
When employees transition from being responsible for only their job performance to the performance of a group, delegation, time management and prioritizing are skills that need to be developed. A new supervisor also needs to learn how to be a coach. This should include the process of conducting disciplinary conversations, monitoring and correcting substandard performance, and providing subordinates with constructive feedback. Understanding how a profitable business operates, including interpreting such information as profit and loss statements, is just as important to a new supervisor as learning the techniques of conducting effective meetings and managing projects. Employees are a company’s greatest asset. Effectively developing employees’ skills — including management skills — will benefit both the company and its employees. Karen Bonanno is president of the Bakersfield-based human resources consulting firm P.A.S. Associates and P.A.S. Investigations. She can be contacted through her website www. PASassociates.com and through the P.A.S. Facebook page.
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Don’t take a bath on your investment... Know the facts on Senate Bill 407. Will you invest or sell? Effective on or before January 1, 2019, California law (SB 407, Padilla) requires installation of water conserving plumbing fixtures of non-compliant plumbing fixtures for commercial and multifamily property built before 1994—or full disclosure of being non-compliant with the law upon the sale of the property.* Being compliant or non-compliant of SB 407 could increase or reduce your property value, respectively.
Is it time to sell your commercial or multifamily property?
If so, we’re here to help. Call the Laborde Team for professional listing and sales experience in Kern County at: 800.951.1626.
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KERN BUSINESS JOURNAL
December 2017 / January 2018
Community Business — Business Profile
Woodbridge Pacific Group, Valley Republic Bank team up
J
eff Eittreim, Central California Division manager for Woodbridge Pacific Group, discusses his development company’s decision to build Belcourt at Seven Oaks, an exclusive residential development in southwest Bakersfield, and why Bakersfield-based Valley Republic Bank was selected to provide financing. Mission Viejo-based Woodbridge Pacific Group has strong valley ties. Todd Cunningham, one of two founding partners, grew up in Bakersfield, graduating from East High, Bakersfield College and Cal Poly. The wife of Carl Neuss, the other founding partner, has family roots in Fresno. Eittreim; his wife, Lauren; their twin sons, Ryan and James, 5; and daughter, Grace, 2, moved to Bakersfield four years ago to open the company’s development office.
Why did WPG select southwest Bakersfield to develop Belcourt at Seven Oaks? Seeing the value of the Seven Oaksbranded property, WPG jumped at the chance to be involved. The time and energy Bolthouse Properties has spent further developing the area’s master plan made it a no-brainer. Bolthouse is creating jobs in
the Seven Oaks Business Park, offering retail amenities close by, and developing “connectivity” with trails throughout the area. The Seven Oaks region is Bakersfield’s premier growth area.
What is Belcourt at Seven Oaks’ development concept? The West Ming Specific Plan offers an integrated approach to the region’s residential, commercial and retail space. Along with Bolthouse’s master planning efforts, WPG challenged its consultants to really dig in and research what Bakersfield home buyers wanted in their community. Belcourt at Seven Oaks (residential) was developed based on that research with a plan to support a live, work, play concept that is “walkable” and “rideable.” The community sits within an unprecedented trail system, with green belts connecting homes to work, shopping and relaxing public spaces for gathering and enjoying life. Soon the Belcourt Center Club, which will include a swimming pool, splash park, fully furnished gym and recreation-community building, will open. There are six “product lines” at Belcourt on lots ranging from 5,000 to 34,000 square feet. Verdana (models open in March 2018), Tamarand (models
open in Summer 2018), Mahogany and Patina are all designed and built by WPG; Westcott by John Balfanz (models in summer 2018); and the Sterling custom home lots developed by a list of approved builders on lots up to 34,000 square feet. Models opened last November at Patina and Mahogany. The sales of 60 homes are expected to close by the end of the year. Construction of several custom homes is underway.
Why did WPG select Valley Republic Bank for financing? They handle all of our direct construction funding. Bruce Jay, Jack Smith, Phil McLaughlin and Janet Hepp are here for us. Their founding principles are apparent with every transaction. They work to support projects that make this community better. They’re hands on, easy to work with, and always helpful. They are big enough to handle our volume; hometown enough to really care. Bruce Jay, the bank’s president and CEO, noted VRB continues to have record-setting performance. Highlights of Valley Republic Bank’s 2017 third quarter performance include: net income up 40 percent; net loans up 20 percent; deposits up 24 percent; total assets up 22 percent;
basic earnings per share up 36 percent ($0.45 vs. $0.33) and book value per share up $1.39 ($15.49 vs. $14.10.)
How is Valley Republic Bank helping WPG? When we started the financing process with national lenders, they didn’t have a pulse on the Bakersfield market, nor an understanding of the inherent value of the Seven Oaks property. They saw the declining price of oil and things got complicated. Valley Republic Bank stepped up with both the local market knowledge and lending capacity to support the construction financing volume we needed. We exceed our targeted sales volume every month. Our banking partner is part of the team that helps make that happen.
Woodbridge Pacific Group 11601 Bolthouse Drive, Suite 220 661-851-5005 www.WoodbridgePacific.com
Valley Republic Bank (main) 5000 California Ave., Suite 110 661-371-2000 www.ValleyRepublicBank.com
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December 2017 / January 2018
Community Business
An alliance that ‘KAN’ help strengthen Kern’s nonprofit sector By Louis Medina
A
n old adage in the real estate industry says that the top three determinants of a piece of property’s current and future value are location, location, location. In a similar way in the nonprofit sector, what determines the long-term effectiveness and sustainability of a 501(c)(3) charitable organization is transparency, transparency, transparency.
Transparency applies to such things as: • Program and service visibility, for easy client outreach and referral purposes; • Organizational structure, operations and administration, to avoid possible conflicts of interest and facilitate networking and partnerships with other nonprofits, for-profits, and government agencies or representatives; and • Financial reporting, so that nonprofits can remain accountable to their grantors, donors and the Internal Revenue Service. Nonprofits are held to high transparency standards because their 501(c)(3) status affords them such benefits as tax exemption on earned income— including fundraising, monetary donations and in-kind gifts — Louis Medina and the eligibility to apply for private, state and federal grants. One of the goals of Kern Community Foundation’s Nonprofit Strengthening Initiative is to help Kern County’s charitable organizations attain a superior level of transparency in their work. We do this by requiring agencies that register for services or apply for grants from the Foundation to achieve a Silver or higher transparency rating on GuideStar.org, the world’s largest database on nonprofits. GuideStar is a tool often used by grantors to gauge a nonprofit’s organizational and financial health before deciding on funding. Thanks to a partnership with the Kern Alliance of Nonprofits, another local nonprofit strengthening effort begun in 2016 by Bakersfield City Councilman Andrae Gonzales, who is himself at the helm of a local community based organization, representative payee agency Stewards, Kern nonprofits can participate in a series of free workshops to help them progress to GuideStar’s highest level of transparency: platinum. Along the way, they learn how to craft an impactful mission and vision statement, recruit and build an effective board or directors, create a budget, implement contingency planning and more. “While serving on a number of boards,” Gonzales said, “I realized that a lot of nonprofits struggled with the same questions about how to build and strengthen their organizations. At the same time, I recognized my own personal desire to continue learning and building my own capacity as a nonprofit executive.
My hope is that KAN can serve as a vehicle to help nonprofit managers learn, grow, and network with colleagues.” “KAN trainings are for nonprofit executives, board members and others who are interested or just starting a nonprofit,” said KAN Education Committee Chair Jessica Mathews, executive director of League of Dreams, a nonprofit that offers adaptive sports for children with physical and developmental disabilities. Offered monthly from September through May, the workshops aim to help charitable organizations “be the best they can be while making sure they are following state and federal guidelines,” Mathews said. Strategic networking is further facilitated through KAN’s quarterly social mixers, where nonprofit representatives can exchange ideas in an informal setting, over drinks and hors d’oeuvres. The mixers are organized by local nonprofit power couple Amy Smith, executive director of Bakersfield Museum of Art, and her husband, Zane, executive director of Boys and Girls Clubs of Kern County. “I am very pleased with the progress of KAN,” Gonzales said. “We have a fantastic steering committee of people who care deeply about our community. We all have a role and responsibilities within our own organizations, but we still make time to build KAN.” For her part, Mathews said: “I love nonprofit work and I love my job. Doing what I do not only grows League of Dreams, but grows the community. When we have strong nonprofits to give to and support, it makes the community a better place.”
KAN Workshop Schedule Kern Alliance of Nonprofits monthly workshops are free and held on the second Wednesday of the month from 8:30 to 11 a.m., at the Kern County Superintendent of Schools Access Center, 1330 Truxtun Ave., as follows: Dec. 13 – Building a Budget Jan. 10 – Understanding Financial Reports: Profit & loss statements, balance sheets, & cash flows Feb. 14 – Reading and Understanding your 990s March 14 – Strategic Planning: Goals April 11 – Logic Model: Goals, Strategies and Progress May 9 – Measuring Community Impact: What to measure and how to report it Note: We advise bringing a laptop, tablet or other portable device and your agency’s financial statements to follow along using real-life examples.
Indeed, KAN’s mission is, “To strengthen the community benefit organizations of Kern County,” and its vision is, “To create a strong community benefit sector that plays a vital role in a healthy, prosperous and vibrant Kern County.” For more information on KAN mixers and the workshop series, which is now in its second year, visit KAN’s page on Kern Community Foundation’s website, kernfoundation.org, or KAN’s Facebook page @kernallianceofnonprofits. Louis Medina is manager of community impact for Kern Community Foundation.
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Community Business
From playing in mud to controlling it By Kelly Bearden
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arah Haggard jokes about how she loved to play in the mud and water when she was a child growing up in Bakersfield. Little did she know at the time that her love would influence her choice of a college major and career and lead to her creation of a Bakersfield-based, woman-owned business. Haggard is the founder and president of Deluge Consulting, a firm that develops plans, regulatory compliance strategies and monitoring systems for companies to meet local, state and federal storm water pollution prevention, and erosion Kelly Bearden and sediment control requirements. In community college, Haggard said she took a geology class and loved it. After transferring to Cal Poly, San Luis Obispo, and taking a couple of classes in erosion and sediment control, she set her sights on a career in soil sciences. In 2005, she graduated with a bachelor’s degree in earth science and a minor in soil science. She is completing a master’s degree in petroleum geology at California State University, Bakersfield. A certified professional in erosion and sediment control, a qualified storm water pollution prevention plan developer and a qualified storm water pollution prevention
Sarah Haggard in the gully.
practitioner, Haggard worked for a Southern California firm before returning home to Bakersfield and establishing her own company in 2010. “Any construction project that disturbs one or more acres of land is required to obtain a permit with the State Water Resources Control Board for storm water discharg-
es,” said Haggard, explaining that even projects that are not required to obtain a state permit often must implement locally mandated erosion and sediment control plans. “The purpose of the regulations is to protect the surface waters of the United States from sediment and other Turn to DELUGE on Page 28
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Health
Granite Construction: Working to help community By Greg Gallion
W
hen you think about Granite Construction Co., you think of all the projects the company has built in Bakersfield and elsewhere; you think of the imprint Granite has left on communities with its roads, buildings, parks, etc. Since 1922, Granite has constructed major projects for private companies, as well as local, state and federal Greg Gallion agencies. It has won awards for its construction services in mining, earthwork, water/sewer, power, tunneling, rail, and highway and bridge construction. Granite also produces construction materials, such as sand, gravel, ready-mix, recycled asphalt product and asphalt concrete. As one of the largest diversified heavy civil contractors and construction materials producers in the United States, Granite strives to provide customers with the highest standards of quality, value, and service on every project. But behind the scenes, Granite and its many employees are leaving another mark — one that touches all of us. The company is truly making a difference with its support of Houchin Community Blood Bank’s mission of providing lifesaving blood products. For the past seven years, Granite Construction Co. has sponsored Houchin’s annual St. Patrick’s Day celebration, the Pot o’ Gold Blood Drive, which is a fun-filled event at Houchin’s two Bakersfield donation centers on Bolthouse Drive in southwest Bakersfield and at 5919 Truxtun Ave. The Granite-sponsored drive draws attention to the community’s continuous need for blood donations, including plasma and platelets, and encourages people to donate. In addition to the support Houchin receives from Granite employees, the company provides financial support to pay for event prizes and other incentives. “Granite Construction believes it is highly important to give back to our local community and help make it a better place for those who live here,”
said Laura King, a project engineer who coordinates Granite’s sponsorships in the company’s Bakersfield office. “We value organizations, like Houchin Community Blood Bank that are able to help those in need,” she said. “Our company does its part to not only support them, but participate in their events. “Each year we have several Granite employees donate blood at the St. Patrick’s Day Blood Drive. Our employees have a blast and feel good knowing that their donations will make a difference in someone’s life.
For the past seven years, Granite Construction Co. has sponsored Houchin’s annual St. Patrick’s Day celebration, the Pot o’ Gold Blood Drive “Many of our employees are also passionate about other nonprofit organizations due to personal reasons and we do our best to support them in any way we can. This year, our Bakersfield branch has volunteered for several different nonprofit events. We have sponsored and served dinner at the local Homeless Center; donated time and equipment to assist in building a new fitness center for the Bakersfield Senior Center; and sponsored families during the holidays through the Henrietta Weill Memorial Child Guidance Clinic. “We are passionate about Bakersfield and Kern County and believe we have a responsibility to help make the area the best it can be. We encourage other companies to do the same and become involved in our local community.” Houchin is grateful for the support it receives from local businesses, such as Granite Construction Co. During the approaching Holiday Season, Houchin’s blood supplies can reach precariously low levels. Student donors are out of school and many regular donors are away from home or unable to donate due to winter colds and flu. Outdoor activities, such as holiday travel, can result in tragic accidents that require transfusions of whole blood and blood
PHOTO COURTESY OF VISUAL SERVICES-EAST MOLINE
products, such as plasma and platelets. Consider some of these average demands for blood: cancer (8 units a week); leukemia (2 units a day); heart bypass surgery (5 units); bleeding ulcer (30 units); hip replacement (5 units); brain surgery (10 units); sickle cell anemia (4 units per treatment); auto accident victim (50 units); and organ transplant (40 units). There have been instances where patients receiving a liver transplant required 100 units of blood. Blood is composed of a mixture of cells that are suspended in a fluid that is called plasma. Red cells transport oxygen around the body, replenishing organs and tissue. White cells fight off such things as bacteria and help prevent infection. Plasma, which contains proteins, salts and clotting factors, is the liquid component of blood. Platelets, which are very small fragments of cells, work with
plasma to help prevent bleeding. When a patient undergoes chemotherapy or radiation therapy to treat an aggressive cancer, for example, the treatment can destroy their bone marrow, where blood cells are formed. Until the bone marrow can recover, the patient will likely need platelet transfusions to survive. Businesses are encouraged to call Houchin Community Blood Bank at 661-323-4222 or 877-364-5844 to schedule a company blood drive. Individuals can call those same numbers to schedule a time to donate blood. Greg Gallion is president and chief executive officer of Bakersfield-based Houchin Community Blood Bank. For more information about donating blood, platelets and plasma, go to www.hcbb. com.
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Health
Kern County real estate agents check before you sell By Cassandra Melching
T
he San Joaquin Valley Air Pollution Control District’s residential wood-burning rule (Rule 4901) has an important caveat that is essential for valley real estate agents to understand. Rule 4901 limits particulate matter emissions from woodburning fireplaces, wood-burning heaters and outdoor wood-burning devices. This means that prior to selling a home with any wood-burning fireplace insert or free-standing wood stove, homeowners anywhere in the jurisdiction of the San Joaquin Air Pollution Control District must ensure that these devices meet Cassandra Melching the requirements of Rule 4901. The rule requires that older, dirtier wood stoves and inserts must be removed from a home and destroyed before the home is sold or ownership is transferred. Home sellers must remove and permanently render inoperable any wood-burning heater or fireplace insert that is nonpellet or does not meet EPA July 1990
emission standards. If a stove needs to be removed, it would be best to contact a local chimney sweep or hearth retailer. Devices that can be left in a home upon sale or transfer include: fireplaces, stoves or inserts manufactured to meet EPA emissions standards, pellet stoves, inserts and devices fueled exclusively by natural gas or propane, and wood-burning heaters that have been rendered permanently inoperable. All new wood stoves and inserts manufactured after July 1, 1990, or sold after July 1, 1992, are required to meet EPA Phase II certification. To determine if your heater is in compliance, check the owners’ manual or you can check the following link and search by manufacturer and model: www.epa.gov/ sites/production/files/2015-11/documents/pre2015nspscertifiedwood.pdf. A home seller whose property includes any type of wood-burning stove or insert must submit to the Valley Air District and to the homebuyer a statement of compliance. These forms are available at www.valeyair.org/ rule4901 or at the nearest air district office. There are no exemptions to this requirement and it applies to all real estate transactions within the Valley Air
Free-standing wood stove.
District. This includes real estate owned by banks or other financial institutions (known as REO properties). It is illegal to sell or install a non-EPA Phase II stove or insert unless it is a pellet-fueled heater. A home seller who would like to keep an old stove for its decorative value should contact the district for guidance on permanently disabling the device. For more information, contact the nearest district office (Bakersfield, 661-392-5500; Fresno, 559-230-6000; Modesto, 209-557-6400). Cassandra Melching is an outreach and communications representative for San Joaquin Valley Air Pollution Control District.
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December 2017 / January 2018
Health
Kaiser Permanente growing in Tehachapi
Stream crossing
Deluge
By Melissa Costelloe
Continued from Page 25
oming up on its second anniversary of providing permanent medical care to the Tehachapi area members, Kaiser Permanente quickly outgrew its original 2,500 square feet facility, which opened in January 2016. Kaiser Permanente Tehachapi now boasts a 3,900-square-foot facility with six state-of-the-art exam rooms and three nurse clinic bays. The expansion directly benefits and enhances routine primary care, pediatrics, nurse clinic services including blood draws, infusions, education and teaching. The facility is home to Kaiser Permanente physicians, a registered nurse, and licensed vocational nurses. The Tehachapi medical offices also deliver alternate types of medical care including telephone, telehealth, health education courses, and access to kp.org at its Thrive Bar where members can check test results and listen to educational materials. The Tehachapi medical office building is centrally located at 1100 W. Tehachapi Blvd. and serves Kaiser Permanente members in the city of Tehachapi as well as the communities of Bear Valley Springs, Stallion Springs, California City, Caliente, Arvin, and other outlying cities within both Kern and Los Angeles Counties. Most radiology services are available through Adventist Health Tehachapi Valley and pharmacy services are available through mail order or delivery to the medical office building. As Kaiser Permanente’s presence in the community of Tehachapi strengthens, it will continue expansion of services in 2018 as it looks to provide gynecological, behavioral health, general surgery and nephrology services further enhancing the care provided to members in the region.
pollutants created by construction disturbance,” Haggard said. “Storm water pollution can adversely impact aquatic habitats, surface waters and groundwater. “A unique challenge to Kern County is its cycle of drought. Long periods of drought reduce the amount of surface vegetation and increase soil erosion. This can result in disastrous flash floods and mudslides during our El Nino events. Appropriately designed runoff conveyances and controls can help greatly mitigate the damage caused by such events.” Haggard said regulatory enforcement has increased
C
Melissa Costelloe is the ambulatory care supervisor at the Kaiser Permanente Tehachapi medical offices.
over the decades at the local, state and federal levels. Of particular note was the determination by the federal Environmental Protection Agency that the county of Kern and city of Bakersfield needed to increase oversight of construction projects. “As a result, starting in 2014, additional practices have been implemented to our local construction monitoring program, including the requirement that an approved Storm Water Pollution Prevention Plan be submitted prior to the issuance of a grading permit,” said Haggard. Acknowledging that the projects her company, Deluge Consulting, handles can be complex, Haggard told an industry publication: “I love dealing with the regulations. There are always new challenges to overcome on our projects. I’ve been in the industry since 2006, and I’m still constantly learning things.” As she also tackles the challenges of running her own business, experienced SBDC consultants are providing Haggard with one-on-one advice in a variety of areas, including marketing and business planning. The Small Business Development Center at CSUB is one of five service centers within the University of California, Central California SBDC Regional Network, which is a partnership between the university and the U.S. Small Business Administration. The center at CSUB assists entrepreneurs and small business owners in Kern, Inyo and Mono counties by providing free consulting, small business training and research. For more information, go to www.csub.edu/sbdc. Kelly Bearden is the director of the Small Business Development Center at California State University, Bakersfield.
From the staff of Kern Business Journal at TBC Media
December 2017 / January 2018
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Energy & Technology
Cyberscam:
Real estate deals are easy targets By Alphonso Rivera
A
few weeks ago, a California Public Radio station reported that millions of dollars were being “bled” each month from Los Angeles homebuyers by cyberscammers. But the ripoff is not happening only in Los Angeles. It’s happening throughout the country at alarming rates. According to the FBI, a cyberscam that tricks homebuyers into wiring Alphonso Rivera money to offshore accounts is costing the Los Angeles area alone $5 million a month. The scam that surfaced in 2013 has rapidly grown, with the FBI’s Internet Crime Complaint Center reporting incidents spiking 480 percent between 2015 and 2016. Last year, the Federal Trade Commission issued a joint warning with the National Association of Realtors about the threat.
Here’s how the scam works: A criminal will hack into the email account of a person involved in a pending real estate transaction. The hacker will spend days collecting information about the deal, as well as the participants. The hacker even picks up nuances, such as the way agents and customers speak, and details of the transaction. From this information, the hacker creates authentic-looking emails. Usually during the chaotic moments of a deal’s closing, the hacker will send an email with last-minute changes to instructions about wiring transactionrelated funds. Unsuspecting buyers, representatives and financial institutions may not question legitimate-appearing changes sent from the email accounts of “familiar” participants and fol-
low the instructions. Money will be sent directly to the hacker’s account, where it will be quickly lost forever. There is no shortage of horror stories emerging from this cyberscam. Consider the owner of a small escrow company in Southern California who opened an attachment reportedly containing information about a lost package. The phony email inserted a virus into her computer allowing a hacker to obtain her banking password, which was used to rip off $400,000 through a series of wire transfers. Earlier this year, a Maryland couple lost more than $400,000 in proceeds from the sale of their home in a cyberscam with roots in West Africa. Unable to recover their money, the couple reportedly now lives paycheck to paycheck. Wherever you look, recent cases can be found. In Long Beach, $10,000 disappeared from a real estate deal. In Greenfield, Massachu-
setts, $80,000 in closing funds and $20,000 in earnest-money deposits disappeared. In Minneapolis, a retired couple buying a townhouse close to their adult children lost $205,000. Another retired couple in Denver lost $272,000 attempting to buy a house. A judge in New York was victimized when she mistakenly followed bogus instructions she thought had been sent by her real estate lawyer. She lost more than $1 million. Clearly, cybercriminals have discovered a lucrative pot of gold containing easily duped buyers and sellers who may be infrequent participants in complicated, fast-moving financial transactions. And these real estate deals often are handled by small businesses that may lack adequate cyberprotection systems.
While cybercriminals seem to keep one step ahead of their victims, measures can be taken by real estate professionals to protect
themselves and their clients. • Inform all participants in a real estate transaction about the cyberscam and how it works. • Have a cyberprotection plan and communicate it. At the outset of a transaction, explain to all participants how information will be conveyed and verified. • Ask about the cybersecurity practices of participants, including other real estate professionals, financial institutions and vendors. • Change passwords regularly on accounts, including email accounts. Encourage others involved in the transaction to change their passwords. • Train staff to recognize bogus emails and to use caution when clicking on attachments. • Do not communicate sensitive information or funds over unsecured Wi-Fi or unencrypted email. • Immediately before initiating a wire transfer, call the intended money recipient via a
verified telephone number and confirm instructions. • Regularly clean out email accounts. • Check your online bank accounts daily. Change your banking passwords on a regular basis. • Work with information technology and cybersecurity professionals to examine computer systems, assure security software is active and current, and audit online accounts. • Consider buying cyber liability insurance. A policy should cover a wide range of threats, as well as business interruption. Alphonso Rivera is the founder and CEO of Advanced Micro Resource Digital Forensics, a Bakersfield-based digital forensic company that specializes in digital audits involving cell phone and computer evidence for attorneys, private investigators, human resources consultants and companies.
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Marketing
Real estate beauty is found in the eye of the camera By Maureen Buscher-Dang
A
friend sold her house a couple of years ago. She called a recommended realtor, agreed upon the asking price and decided the date the house would go on the market. In preparation for the sale, she completed a few repairs around her house and discussed marketing strategy with her realtor. She was assured the realtor would handle advertising, including taking photos of the house for use in print and online. The realtor, who has a good reputation for all aspects of successfully selling homes, scheduled a time for her photographer to come out and “snap a few” photos. The college-age photographer arrived with professional- looking equipment, but he was interested in staying only long enough to “snap a few photos.” Alarmed that the visual presentation of her home was being left Maureen Buscher-Dang to a disinterested amateur, my friend, who has marketing experience, called her realtor and asked to submit her own photos. She cleaned and staged every room of her house, removing personal “clutter.” She did the same for the front and back yards. She placed a bottle of fine wine, hors d’oeurves and crystal glasses on the patio table to suggest lounging under an open-beam cover. The timing of outdoor shots was coordinated with the rising and setting sun. A tripod was used to capture a spectacular street scene at dusk. The photos were not “snapped.” They were planned and staged to capture the home at its best, because they would be the first — and possibly only — views potential buyers saw. The house was beautifully maintained and priced “right.” It sold before the realtor had a chance to put a sign out front, but after the listing and the photos appeared online. A steady stream of potential buyers kept calling until the sale closed six weeks later. My friend’s realtor is not the only one who treats photography as an afterthought.
Call up almost any real estate website — Zillow, Trulia, national brokerage websites, etc. — and you will find house photos with garbage cans and discarded lumber cluttering frontages. Likely these “quick snaps” were “convenient” afterthoughts. Whether you are selling a house, product or business service, a well-considered visual presentation should be part of the marketing strategy. The scope of the visual presentation will depend on the type of property being sold. If the listing is for an older, “fixer upper” tract house, for example, the desire may be to minimize “defects” and maximize “potential” by using only a few photos. If the listing is for an elaborate ranch estate, a more elaborate photo spread may be warranted.
Here are some tips: • Evaluate the property and marketing strategy. Discuss expectations with the seller. • Special effects may be warranted. Video, including virtual home tours, are becoming common. Drone flights and 3-D photographs may be useful to showcase some properties. • Take many photos, not just a few. While a few may be included with the listing, you will need more to sustain buyer interest by regularly posting on social media sites. • Preplan your photo shoots. What direction does the house face? What time of day is best to photograph the exterior? Can eyesores be removed? My friend asked her neighbor to remove the ladders leaning against his garage so they would not appear in her photos. • Stage, or compose your photos. Allow a couple of hours for the shoot. Ask the seller to remove clutter. Prepare the rooms to appear inviting. Avoid taking vertical shots. Most people are more comfortable viewing horizontal photos. Return, if necessary, to take additional photos. • Hire a professional. While necessity occasionally requires me to take photos for clients, I prefer to hire professionals. And the professional should fit the assignment. Listing photos should be taken by a photographer with real estate experience. • Likely circumstances will require that you occasionally take listing photos. Buy some basic equipment, including a simple single-lens, digital camera, with a zoom and a wide-angle lens. In a pinch, you also can use your smartphone to take some listing photos. Most current digital cameras and smartphones have HDR settings, which allow cameras to take and merge multiple images. This creates a more polished, professional result. • Watch the many tutorials that can be found online. They provide tips for taking real estate photos with digital cameras and smartphones. • Have fun. Photography is one of the easiest and most cost-effective ways to present property to potential buyers. Maureen Buscher-Dang is a Bakersfield public relations and marketing consultant. She can be contacted through her website www.buschermarketing.com
December 2017 / January 2018
KERN BUSINESS JOURNAL
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