KERN Journal Business
Vol. 6, No. 5
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October / November 2017
Retail & commercial issue
Cover story
E-commerce driving Kern distribution center growth By Dianne Hardisty
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hile e-commerce still accounts for only a fraction of the nation’s sales, it is the fastest growing sector of the retail industry. According to the U.S. Census Bureau, e-commerce sales totaled only about 10 percent of all retail sales in the first quarter of this year. But those sales were up nearly 15 percent year over year in the first quarter. The research website Statista also notes that e-commerce retail is rapidly growing. In 2015, e-commerce sales reached $294.45 billion. They are expected to surpass $485 billion in 2021. This e-commerce growth and consumer demand for the quick delivery of goods have triggered a boom in the development of distribution centers near urban markets. Turn to DISTRIBUTION on Page 30
PHOTO COURTESY OF FIONA GRANT PHOTOGRAPHY
A worker at the IKEA distribution center.
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INSIDE
Read some tips on how to prevent cyberattacks on your business this holiday season. Page 4
Find out how the leadership secrets of Santa can help your company thrive. Page 12
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October / November 2017
othing beats banking local. Our friends at Valley Republic Bank feel like family who share our philosophy — for years they’ve provided the support, products, and services we need to grow. They’re accessible, transparent, and in touch with Kern County. We’re grateful.”
M OLLY & B RUCE B USACCA Owners, Secure Systems Keeping one of California’s biggest ‘small towns’ safe and secure is what they do. Bruce started Secure Systems in 1980 after graduating from Bakersfield High School; he and Molly married in 1988, and in 1996 they welcomed ‘the’ triplets of Bakersfield. As life progresses, so does the business. In 2017, they grew to a new space at 23rd and H. In Bruce’s words, “Valley Republic Bank has been our business partner for years. Like us, they serve the community we grew up in, we know and we love!”
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October / November 2017
Journal KERN Business Showcasing Kern County business and industry October / November 2017 Vol. 6, No. 5 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
KERN BUSINESS JOURNAL
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Editor’s note Change nothing and nothing changes
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f you’re not changing, you’re not growing. One of the pitfalls in publishing is staying idle for too long — that’s when things can get stale, repetitive and boring. For the past five years, the Kern Business Journal has shined the spotlight on Kern County industry, highlighting the people and organizations that make the area an attractive and unique location to conduct business. While the focus and mission of the publication will not change, the way the information is delivered will. We’re constantly looking at ways to better the products we produce, which in turn, enhances the reader experience. After carefully analyzing the Kern Business Journal, we noticed several areas for improvement. While the themes of each issue help highlight specific industries found throughMark Nessia out Kern County, they often come at the cost of other areas of business. Those in the health care industry, for example, may find the “Health” issue extremely informative but not find much value in the theme that follows or even the theme that precedes it. Given Kern County’s industrial versatility, we saw it best to highlight as many fields as possible in each issue. As you flip through the pages, you’ll notice new section headers that will make it easier to find the stories that are of most interest to you. Even though the theme this month is “Retail and Commercial,” you will also find articles in legal and human resources, health, agriculture, finance, market analysis and more. The goal is to provide Kern Business Journal readers,
Read about the latest with Bolthouse Properties in the “Real Estate” section on Page 26.
which consist of Kern County business leaders and organizations, ample reason to pick up the publication regardless of the theme. There are more features in the works that will phased into the Kern Business Journal as the months go on. We believe the changes will improve the product and provide more value to its readers. But that’s our speculation. We’d love to hear from you so send your comments and suggestions to kbj@bakersfield.com or mnessia@bakersfield.com because your thoughts are the ones that matter most. After all, it is you and your organizations that help grow Kern County. We are merely the medium that documents the changes.
Business at-a-glance Bakersfield No. 8 city where salary goes furthest
HiringLab.org ranked Bakersfield as the No. 8 city in the nation where salaries go furthest for job seekers. The rankings are the result of analyzing salary data from jobsite Indeed.com between August 2016 and July 2017 and cost-ofliving data from the U.S. Bureau of Economic Analysis released June 2017 among 104 U.S. metropolitan areas with at least 500,000 residents. Birmingham-Hoover, Alabama; Jackson, Mississippi; and Fresno, California rounded out the top three while Honolulu, Hawaii; Tucson, Arizona; and Miami-Fort Lauderdale-West Palm Beach, Florida ranked as the three metros “where it’s hardest to make ends meet.”
Distribution center well under way at Tejon Ranch Commerce Center PHOTO BY FELIX ADAMO
Crowds jam Wall Street Alley at Eye Street as they enjoy food and drink at the Taste of Downtown.
A Class A cross-dock distribution building that will meet the demand of the north Los Angeles
market is under construction at Tejon Ranch Commerce Center. The joint venture between Tejon Ranch and Majestic Realty Co. will be located east of Interstate 5 and features 480,480 square feet of speculative industrial space. The facility has the ability to serve nearly 90 percent of California consumers within a single-day truck turn and more than 40 million people for next-day delivery service. “The new state-of-the-art building will offer tenants a highly efficient facility, strategically located with access to California’s main highways and regional commerce centers,” Tejon Ranch Company Executive Vice President for Commercial and Industrial Real Estate Hugh McMahon said in a release. “With the combination of building features and surrounding amenities, we anticipate leasing this building quickly, especially due to the lack of available product in the north Los Angeles market.”
KEDC wins international economic development award Kern Economic Development
Corporation’s regional branding and marketing efforts were recognized at the International Economic Development Council’s annual conference in Toronto, Canada. KEDC’s 2017 Kern County Market Overview & Member Directory earned an “Excellence in Economic Development” award and received the “Silver” award in the magazine promotional category. The Kern County Market Overview & Member Directory was created to better promote the community and help draw outside businesses and organizations to Kern County. Extensive data and information is incorporated into the annual publication to enhance Kern County’s image, highlight the region and economic impact, and serve as a reminder of what the county has to offer. “IEDC’s recognition of Kern EDC’s regional branding and marketing efforts is the crowning achievement in the industry,” KEDC President and CEO Richard Chapman said in a release. “It’s an extraordinary honor to receive this prestigious award.”
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Chamber roundup October / November 2017 events
Greater Bakersfield Chamber of Commerce Oct. 13, 20 and 27 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St.
7-9 p.m.; Bakersfield Museum of Art, 1930 R St; For more information, visit www.bmoa.org. Nov. 3 and 17 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St.
Oct. 17 — Pancakes & Partnerships; check-in: 7:30 a.m.; program: 8-9 a.m.; cost $25 members, $50 nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St.
Oct. 13 — BYP Street Party; 6-10 p.m.; Wall Street Alley and The Park at The Mark. Advance tickets $30 or $35 at the door. Purchase tickets at www.eventbrite.com.
Oct. 26 — Business Conference & Expo; 3-8 p.m.; Rabobank Convention Center, 1001 Truxtun Ave. In partnership with the Kern County Hispanic Chamber of Commerce. Oct. 26 — Join BYP at Art After Dark;
Nov. 7 — Philanthropy on Tap; featured nonprofit: Kern County Museum Foundation; 5:30-7 p.m.; Imbibe Wine and Spirits Merchant, 4140 Truxtun Ave. Free to attend. Nov. 9 — Labor Law and HR Forum; check-in/networking, 7:30 a.m.; program, 8-10 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Sponsored by Young Wooldridge LLP. Nov. 10 — Chamber Closed — Veteran’s Day Nov. 16 — The Breakfast Club Mixer; 7:30-9:30 a.m.; $5 members, $10
nonmembers; Location to be announced. Nov. 23-24 — Chamber Closed — Thanksgiving Nov. 29 — All YP Pub Club; 5-8 p.m.; Cost $5 at the door; Elements Venue, 3401 Chester Ave., Suite H. Dec. 1, 8 and 15 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Dec. 5 — Philanthropy on Tap; featured nonprofit: Community Action Partnership of Kern; 5:30-7 p.m.; Imbibe Wine and Spirits Merchant, 4140 Truxtun Ave. Free to attend. For information, contact the Greater Bakersfield Chamber of Commerce at 661-327-4421 or visit www.bakersfieldchamber.org.
Finance
Cyberattacks: Retailers risk loss of cash, reputation By Alphonso Rivera
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acking, data breaches and other types of cybercrimes are targeting more retailers, as both brick-and-mortar stores and online shopping websites increasingly rely on digital systems to conduct business. Recent studies reveal millennials, people in the 23- to 34-year-old bracket, overwhelmingly prefer to shop online, using their smartBeatris Espericueta Sanders phones, tablets and computers. As the boomer generation ages, the convenience of online shopping will likely lure an increasing number of older shoppers onto the internet. We are now seeing grocery stores promoting online shopping. With this trend, retailers are being exposed to increasing risks of attack. Retail digital exchanges with customers and financial institutions contain a treasure trove of valuable data, including the details of customers’ accounts and personal information. Retail has become such a lucrative, easy target that “discount” schools have popped up to train cybercriminals. A risk management company recently reported discovering a Russian-language six-week online course for aspiring
cybercriminals. For just 45,000 rubles ($745 in the U.S.), the course promoters boasted that would-be criminals could make $12,000 a month, based on a 40-hour workweek. That is about 17 times more than an average Russian can make working a legitimate job. We mostly hear about the cyberattacks on big retailers, such as Home Depot, which had to pay customers a $19.5 million settlement for its 2014 credit card breach. While few of the major retailers have escaped attack, the small, locally owned shops also are vulnerable. Basically, no retailer is too big or too small to be targeted by cybercriminals. And every successful attack is costly – in terms of actual losses and lost reputation. A recent study revealed that the average, per record cost of a data breach was $172 in 2016. For example, a record is one compromised credit card. Costs associated with a data breach include investigation of the attack and its scope, damage to customers and fines imposed by banks for the breach. The international accounting firm KPMP surveyed hundreds of customers last year regarding retailers’ data breaches. The company found that 19 percent of the people surveyed would stop shopping at a retailer that had been a victim of a cyber hack, even if the company took the necessary steps to remediate the intrusion. In addition, 33 percent indicated that fears of
further exposure of their personal information would prevent them from shopping at a breached retailer for at least three months. Retailers must have their guards up in this time of increasing threats. Small retailers, whose cybersecurity strategy is to “hope for the best,” must recognize that their time will come – likely sooner than later.
Some steps to take: • Set a high priority on implementing “chip systems.” While cyberattacks are decreasing involving point of sale exchanges, they will not disappear. Chip systems are working, but some retailers have not enabled chip scanners in their stores. • Use only high-quality, secure domain providers. • Train employees about cybersecurity, including the importance of cooperating across departments. Require employees to use strong passwords. • Update software regularly and patch vulnerabilities.
• Install “firewalls,” to separate corporate, store and payment exchanges. • Vet third-party suppliers and vendors to ensure that their systems are secure. • Regularly audit your systems to determine if procedures are being followed and protection provided. Instinctively, companies are tempted to hide or minimize the occurrence and scope of data breaches. But strength in combating increasingly clever and aggressive criminals will come from a united front. For the greater good, retailers should share information with each other about attacks. 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.
October / November 2017
KERN BUSINESS JOURNAL
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Finance
Shafter company’s insect sales are nothing to swat at By Maureen Buscher-Dang
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Shafter company has a little, bitty business — in terms of what it sells, but not in how many it sells. Since its establishment nearly five decades ago, Insect Lore has sold millions of “insect kits” to schools and families to help educate children about science and the life cycles of insects — notably butterflies. The local company sells its kits in stories and online throughout the United States and Europe. And demand for Insect Lore’s products is increasing. “With an increased emphasis in STEM (science, Maureen Buscher-Dang technology, engineering and math) in schools and toy stores, parents and teachers are eager to have our wonder-filled Butterfly Garden, Butterfly Growing Kit in their homes and classrooms,” said Marcus Mcmanamna, Insect Lore’s president. “Of course, we’ve always been STEM, but now our products are even more sought out.”
“With an increased emphasis in STEM (science, technology, engineering and math) in schools and toy stores, parents and teachers are eager to have our wonder-filled Butterfly Garden, Butterfly Growing Kit in their homes and classrooms.”
could research ways to kill them. The story goes that killing the insects broke White’s heart, prompting him to found Insect Lore, a company that helps people, especially children, understand and appreciate the wonderful lives of insects and the contributions they make to our world. White refocused his research on finding ways to keep bugs alive. He developed a “food” that would maintain insects long enough for them to be shipped to customers for research, education and just the sheer fun of watching such “miracles” as beautiful butterflies evolving from commonlooking caterpillars. White created and sold “insect kits” through hobby shops, department stores, classroom suppliers and online retailers. Customers would buy the “habitat” in a store and then mail a coupon to Insect Lore to acquire the habitant’s “insect residents.” “But given the rapid transition from physical retail to online shopping, parents and teachers are finding it easier to discover Insect Lore and to purchase from us,” said Mcmanamna, who explained his company’s new online purchasing system that allows “Insect Lore to ship both the habitat and the live insects at once, ensuring a more convenient and fantastic experience.” An estimated 60 percent of the company’s sales of kits for growing butterflies, ladybugs and praying mantises, as well as ant farms, science books, toys and DVDs, are to individuals. That means Insect Lore receives and processes an avalanche of $5, $10
– Marcus Mcmanamna, Insect Lore’s president
The company began in the 1960s, when entomologist Carlos White moved from his native Illinois to work for a local chemical company. His job was to “grow” insects so his company
Insect Lore worker
and $15 checks per day. It could be an overwhelming task if it weren’t for the company’s relationship with a local bank. “Mission Bank’s Shafter branch has always been helpful,” said Mcmanamna. “Insect Lore receives thousands of checks per day during our busy season. The bank’s treasury management services, including REACH, allow us to seamlessly deposit the many individual payments that we receive on a daily basis. “Most of all, the Shafter branch and the frontline people that I interact with there are always so very friendly and helpful.”
Banker Juana Wilson explained that local community banks, such as Mission Bank, are particularly suited to customizing and implementing treasury management services, such as REACH. With an emphasis on developing relationships that help local small businesses, such as Insect Lore, staff is allocated to help identify special needs and train company staff on how to best utilize financial services. In the case of Insect Lore, the company needed a banking system that would minimize the time and effort needed to process thousands of small checks a day. Mission’s REACH program allows company officials to do their banking remotely, eliminating the need to bundle checks and make timeconsuming “bank runs,” said Wilson. With Insect Lore’s sales occurring on two continents, treasury management services also ease the complications of international transactions, Wilson said. Carlos White retired and passed the company to his son, John, to head the U.S. sales from the Shafter headquarters, and to his daughter Jennifer, to head the European sales from her home in Cornwall, England. Longtime company executive Mcmanamna now serves as Insect Lore’s president. Maureen Buscher-Dang is a Bakersfield public relations consultant.
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Finance
Employer Social Security credit an often-missed potential tax benefit By Joel A. Bock
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or restaurant owners, the employer Social Security credit is an all-too-often missed potential tax benefit. This potential tax benefit allows the owners/ employers of “food and beverage establishments” the opportunity to claim a general business credit equal to the amount of Social Security and Medicare taxes paid or incurred by the owner/employer on certain tips. While the credit is available for tips paid in connection with the “providing, delivering, or serving of food or beverages for consumption if the tipping of employees serving food or beverages by customers is customary,” a further limitation is that the Joel A. Bock employer cannot claim the credit for taxes on any tips that are used to meet the federal minimum wage rate in effect as of Jan. 1, 2007 (i.e., $5.15 per hour). This may be an issue in other states besides California, but since food and beverage servers in California are subject to the same minimum wage requirement as other occupations, this is not a limiting factor in
California. The following example illustrates the potential benefits of this tax credit: Assume a restaurant in California employees 20 food servers each working an average of 20 hours in a week for 50 weeks a year. Further, assume that in addition to being tipped, each employee is paid at least the California minimum wage. If each server averaged $50 per day in tips, then the total tips received during the year for this restaurant would be $1,000,000 (i.e., 20 food servers times 20 hours a week times 50 weeks a year times $50 a day in tips) and the total amount of Social Security and Medicare taxes paid by the employer during the year for the $1,000,000 in tips would be $76,500 (i.e., $1,000,000 in tips times 7.65 percent Social Security and Medicare tax rate). Since the employees received tips from customers for providing, delivering, or serving food or beverages for consumption when tipping of employees for delivering or serving food or beverages was customary and the employer paid $76,500 in Social Security and Medicare taxes, then the employer is entitled to a federal tax credit (which is also allowed to offset the alternative minimum tax) in the amount of $76,500. Please
note that as a consequence to claiming the employer Social Security credit, the employer will not also be allowed to claim a deduction for the Social Security and Medicare taxes paid. The credit is calculated by reporting the amount of Social Security and Medicare taxes paid on qualifying tips on form 8846. If a restaurant owner failed to file Form 8846 and claim the tax credit on the originally filed tax return, the opportunity to claim the credit is still available for up to three years from the due date of the tax return. The employer Social Security credit can be quite beneficial to restaurant owners. Please consult with your tax adviser regarding how the employer Social Security credit may provide a benefit in your specific situation. Joel A. Bock, CPA, MST is a partner in Daniells Phillips Vaughan & Bock, a Bakersfield accounting firm.
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Finance
The most overlooked risk by business owners in disasters By John Pryor
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s of this writing, the wrath of Hurricane Harvey imposed on Houston and surrounding areas has not even begun to be tabulated and quantified. The question of how many businesses will survive remains to be determined. Many of us compare Hurricane Harvey with Hurricane Katrina that curiously occurred during the same week in 2005 as Harvey did this year — from Aug. 23 to 31. Why is this of concern to retail businesses and commercial operations in Kern County? We experience no hurricanes. We have only a flooding risk, especially if Lake Isabella’s dam should fail. The answer is on two levels. First, if the “really big” earthquake John Pryor that’s overdue should occur on the nearby San Andreas fault and, secondly, if an isolated disaster were to occur only to your business, or to another business on whose supply chain you heavily depend. For these reasons, you need to read on. Data from 17 years ago can reasonably be interpolated to this current disaster and can be transposed to other disasters such as earthquakes, wild fires, and — heaven forbid — an EMP or, even worse, a nuclear attack by another nation. Here are data from the US Census Bureau about the “evaporation” of business during Katrina. You can reasonably extrapolate these data to any disaster in Kern County. Metro New Orleans 2005 2006 % Change Grocery Stores 573 430 ........................... -25% Gas Stations 447 407 ............................... -9% Drug Stores 221 165 ................................ -25% Hotels 259 227 ......................................... -22% Restaurants 2,138 1,860 .......................... -13% On the other hand, certain other industries benefitted from the disaster of Katrina – especially construction firms: Residential Construction 535 652 ...........+22% Commercial Construction 189 220 .........+16% The question is: if these businesses had disaster plans — and most usually do — why did 25 percent or so not survive Katrina? As was vividly evident during the extensive media coverage of Hurricane Harvey, the purpose of disaster plans is to save lives, not to save any business. The outcomes so far are outstanding! Rescues and medical care
clearly were effective and lives were indeed saved. The missing link is an entirely different planning process. As stated, disaster plans save lives. It’s business continuity plans that save businesses. Almost 95 percent of a disaster plan can be accessed in a template. This includes not only major events such as hurricanes, earthquakes, or other catastrophes. It also includes isolated events like single structure fires, bomb threats, harassing phone calls, workplace violence, etc. Templates work. My book, “Quality Risk Management Fieldbook,” is replete with them. However, this is not the case with a business continuity plan. A BCP is just the opposite, viz., 5 percent template and 95 percent individually unique. It begins with a standard process map that “sets the stage” for the unique plan elements that follow. It requires meetings in which a “business impact analysis’ is defined, agreed upon and put into writing in simple worksheets. The worksheets define the following: How customer service is adversely affected during the first 24 hours, then 24 to 48 hours, followed by one week and then beyond. Resources required during the same time frames for recovery and restoration of operations. The content of each of these templates will vary from business to business. Of special importance are plans for restoration or replacement of supply chains — when the disaster occurs only at a vendor’s location for parts, inventory, etc. This was highly evident in the Fukushima earthquake and tsunami in 2011. The key is to enable your business to be proactive. The ability to foresee what can “go wrong” is what risk managers do so well. Thinking through these scenarios requires an investment in time well in advance of any event. Once the earthquake or other disaster occurs, it’s far too late for a business without a BCP to survive the catastrophic event.
To initiate such critical planning, lots of assistance is available on the internet and otherwise: Software packages are described and some are available for purchase while others are free. Counsel is provided by risk management consultants for a fee and by insurance brokers — sometimes for a fee and other times as part of their service package. Books on risk management (including mine) include these steps and templates.
The missing link is an entirely different planning process. As stated, disaster plans save lives. It’s business continuity plans that save businesses. The crucial point is for business owners to begin this process without delay. Although businesses in Texas had a week’s advance notice of Hurricane Harvey, that’s still insufficient time to prepare effectively. Other events usually offer no notice at all. Especially earthquakes. Once you will have worked through this process, your business will be well-positioned to survive, especially if you update your BCP from time to time as changes occur in your operations. You, unlike perhaps your competitors, will enjoy the long-term benefit of proactive risk management, viz., a quiet night’s sleep. John Pryor is a risk management consultant, adjunct professor of risk management at CSU Bakersfield, and author.
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Finance
Phased retirement: Will it work for you? By Steven Van Metre
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n increasing number of boomers are just not ready to retire. They have not saved enough money and they may not be ready emotionally to leave the workforce, despite hitting the traditional retirement age of 65. Such was the case with my financial planning client, whom I will call Bob, a middle manager at a Bakersfield company. Married 35 years, Steven Van Metre Bob and his wife, Mary, lived conservatively and saved. They expected to have a nice nest egg to finance a comfortable retirement. When I began advising the couple about 10 years ago, they even talked about retiring early. But along came the Great Recession of 2008, which wiped out much of their
savings. To make matters worse, Mary lost her job in a wave of layoffs. As Bob now nears his 65th birthday, his retirement funds have not met Bob’s goal. And he is not ready to retire. Bob is not alone in this predicament. According to the U.S. Bureau of Labor Statistics, the percentage of Americans working beyond the traditional retirement age has skyrocketed. This trend is expected to increase, with employees 65 years of age and older expected to be the fastestgrowing demographic in the workplace in 2024. Right now, 19 percent of “senior” employees are working part-time. Bob came into my office recently with a “great idea” of a plan. He proposed continuing to work for his company, but on a part-time basis. Gradually, he would reduce his work hours until he finally retired. This arrangement is commonly called “phased retirement.” Fearing a “brain drain” caused by the retirement of thousands of boomers, about 15 years ago, companies either
implemented “phased retirement” plans, or considered doing so. But the Great Recession and job losses stalled a wider use of phased retirements. It is more common today for companies to use “informal,” one-on-one arrangements. While I did not want to throw cold water on Bob’s enthusiasm, I cautioned that negotiating a “phased retirement” — even an informal one — may be difficult and may pose risks to both workers and employers. Some questions to ask: • What’s in it for the company? Does keeping an older worker on the payroll part time meet the company’s needs? Or would the employer prefer to replace older workers with lower paid younger ones? The answer depends on the company’s need for highly skilled and experienced workers. • What’s in it for the worker? Will going part time provide the flexibility of being “sort of retired?” Or will it just mean a smaller paycheck for the same amount of work? • Should the arrangement be formal or informal? A formal arrangement might require a worker to set a specific retirement date and specify work hours. Once a phased agreement is negotiated, it may be difficult to adjust.
• Will the arrangement be “flexible?” This might include retaining a retiring worker to complete a specific project. • How will phased retirement affect benefits? This is the most serious and complicated question for both the worker and company. Will retiring employees still qualify for health benefits? Will they be able to contribute to or draw from retirement savings accounts? How will the part-time earnings affect Social Security benefits? The answers depend on a worker’s specific situation and a company’s policies. • Can you live on a part-time salary? That requires a careful evaluation of cost of living and debts. Any employee and company considering entering into a phased retirement arrangement should know what they are getting into, clearly articulate the arrangement and confirm that such an arrangement will benefit them. Steven Van Metre is a Bakersfield certified financial planner who specializes in retirement income strategies and teaches courses on retirement planning for the Levan Institute for Lifelong Learning at Bakersfield College. His next two Levan courses will begin on Thursday, Oct. 12, and Saturday, Oct. 14. Register at www. bakersfieldcollege.edu/levaninstitute.
Swipe or dip? You decide By Kayleena Speakman
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ou go to the store, grab a few things and go to pay with your shiny, new chipped card when suddenly the clerk shouts something like, “Nope, you have to swipe; we don’t accept chips yet.” The merchant clearly has a slot for the chip reader, so why isn’t it working? At the Better Business Bureau, we’ve been receiving dozens of inquiries about this topic, with many consumers asking what happens if a store is not chip ready and if there is some sort of law being broken when merchants aren’t chip ready. Kayleena Speakman Well the legality is a little fuzzy, so let’s break it down. October 2015 was the deadline that the banks decided upon to issue out new cards with a chip embedded into them. The reasoning behind this was to prevent fraudulent use of credit cards where the card is present at a merchant’s terminal. The government could have stepped in and adopted this new policy, but the banks decided to go ahead with EMV (Europay, MasterCard and Visa — the three companies who developed the technology standard) themselves. If the government had gotten involved, they could have backed it with fines and tax penalties, but instead the processors decided to create a “liability shift” as an
incentive. Before this deadline, any time a consumer’s card was duplicated and used for purchases, the banks would refund that fraudulent purchase. This created the incentive to get the liability off of them and onto the merchants. October 2015 was the date that the liability would now shift from the banks to the merchants in cases where the bank provided a new EMV card and the store did not upgrade to the new EMV terminal (chip reader). So what is the reasoning behind this? Well it’s pretty simple. The banks have now done everything in their power to protect the consumer from any fraudulent activity and the store has now dropped the ball. But what if the banks did not issue the new EMV credit cards and the store does not have the EMV terminal? If neither the banks nor the merchants are EMV ready, then the traditional liability rules would apply. According to US Payments Forum, roughly 45 to 50 percent of all U.S. credit and debit transactions are chipon-chip transactions. This shows merchants are moving in the right direction and are on par with estimates shared by The Strawhecker Group in April. While this is a great sign, there are still many merchants not using the EMV terminal. If consumers were to use their EMV chip card with a merchant that does NOT have the EMV terminal and the consumer is forced to swipe their card and there is
fraudulent activity on their card, the liability would fall on the merchant. The merchant now would be forced to pay for any damages that occurred, because their store was negligent and didn’t protect their customers. But what about stores that have the chip reader but can’t use it? Making the switch over to EMV payments isn’t as simple as just buying a new terminal. Merchants first have to spend a couple hundred dollars on a new terminal, then they have to install a software so the chip transactions can interoperate with their current payment system and, lastly, they have to be certified by the banks and card networks they work with. It’s a multistep process, and according to J. Craig Shearman from the NRF, getting the certification is Turn to SWIPE OR DIP on Page 11
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Finance
Swipe or Dip Continued from Page 10
creating a holdup. Getting these EMV terminals certified and running is important, because of the extra layer of security these EMV cards have. On a magnetic strip, the data is unchanged. Whoever accesses that data gains the sensitive card and cardholder information necessary to make any purchases they want. Whoever copies the magnetic strip can easily replicate that data over and over again, because it will never change — which is where EMV comes into play. On an EMV card you’ll see a small magnetic square which is a computer chip. Unlike magnetic strips, every time you use your EMV card for payment, the card chip creates a unique transaction code that cannot be used ever again. If a hacker managed to steal chip information from one specific point of sale, they can’t reuse that transaction code and typical card duplication would never work. While nothing is ever 100 percent foolproof, EMV card chips make it harder for criminals to successfully profit off of
what they steal. According to a 2016 report, Visa saw a 52 percent drop in counterfeit fraud at chip-enabled merchants in September 2016, compared to a year earlier before the EMV cards were implemented. MasterCard, on the other hand, saw a 77 percent INCREASE in counterfeit fraud year-over-year among merchants who had yet to move to EMV terminals. With the holiday shopping season just around the corner, many merchants not even bothering to implement the new EMV terminals are not only putting their consumers at risk, but they are harming their business’ reputation by refusing to do so as well. BBB wants to remind consumers to speak up and ask questions. Ask the merchants why they are not EMV ready. Maybe they are trying to be and are held up or maybe they don’t see the risk. Ask them when they expect to be ready by and then decide from there if you want to continue to do the swipe or start doing the dip. Kayleena Speakman is a communications specialist for the Better Business Bureau Serving Central California & Inland Empire Counties.
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Young Wooldridge welcomes back senior attorney Alan Doud By Allison Stokes Young Wooldridge LLP welcomes senior attorney Alan Doud back to the firm. Doud, who originally joined the firm in 2008, will focus his practice on water, public agency, environmental, land use and business law after spending four years at the Tejon Ranch Company. In 2013, Doud left to serve as senior counsel to the Tejon Ranch Company, whose principal asset is the largest continuous parcel of privately owned land in California. As senior counsel, Doud advised Tejon’s management on all facets of the company’s business, with an emphasis on real property transactions and matters involving natural resources. Additionally, he provided legal counsel on water issues associated with Tejon’s real estate developments and managed various regulatory and litigation matters affecting the disposition of Tejon’s water assets. He will apply his expertise to represent clients on transactional, regulatory and litigation matters, including the Sustainable Groundwater Management Act, groundwater adjudications, real property transactions and eminent domain proceedings. His substantial knowledge of water resource and business law will be an asset to the Firm’s Water Depart-
ment, which represents over 35 water districts in California. Doud graduated cum laude from Gustavus Adolphus College with a B.A. in political science. He then obtained his law degree from University of San Diego in 2006 and was admitted to the State Bar of California later that year. Prior to his legal career, Doud worked as a legislative assistant to Rep. George Radanovich (CA-19), advising on federal legislative and appropriations issues while serving as liaison to the House Budget Committee. Allison Stokes is the director of public relations and marketing for Young Wooldridge LLP.
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October / November 2017
Legal & Human Resources
Leadership secrets of Santa help companies thrive By Karen Bonanno
L
ikely you have already started seeing Christmas decorations in local stores. That is because the holidays are fast approaching and that means retailers are gearing up for their peak selling season. But it also means that companies in almost every industry are wrapping up their year and planning for 2018. This time of year is heavy with tradition. And P.A.S. Associates, a Bakersfield-based human resources consulting and training firm, has Karen Bonanno its tradition, too. In December, it shares “The Leadership Secrets of Santa Claus” in a three-hour, one-session workshop. P.A.S. is not alone in borrowing from Jolly Old St. Nick to highlight steps companies in every industry can take to improve workplace performance. “Santa’s secrets” have been shared in books that carry similar titles and in training programs that have cropped up across the nation in recent years. Think about it. Santa receives “orders” from children around the globe. He and his elves must make millions of toys and then deliver them all in 24 hours. To pull this off, Santa must keep focused on the welldefined mission of “making spirits bright”
by delivering high quality toys to every good boy and girl. While the title of the “Santa Secrets” training course might bring a smile to your lips — and we can all use that — it also brings some serious business lessons. In a nutshell, these lessons include: • Build a solid workshop. Santa needs to keep focused on an unwavering, welldefined “mission.” He must clearly convey the mission to the elves and provide them with the necessary training to help them fulfill the mission. • Choose reindeer wisely. Take the time to hire the best. Set expectations. • Make a list and check it twice. Set clear goals. Encourage employee input in setting the goals. Develop written action plans. Establish priorities. Ensure goals are met. • Listen to the elves. Fulfilling the mission and meeting goals requires collaboration and contributions from all employees. These contributions include ideas and feedback from team members. Take the time to listen to and really talk with employees. Lead employees all year round through meaningful and empowering exchanges. • Stretch beyond the “red wagon.” While a well-made red wagon may be a staple under the Christmas tree, does it still meet the market’s demands? Every industry needs to change to meet today’s customer demands. Encourage and prepare company teams to look for ways to continually improve. The more information that is shared
with employees about the workings of the company, the more they will understand and embrace change. • Share the milk and cookies. It should not be just Santa who is enjoying the rewards from delivering all those presents. Show employees they are recognized and valued for the contributions they are making. Don’t take employees for granted. Give them verbal and written feedback. Look for meaningful incentives. • Check who has been naughty or nice. This means tracking performance and confronting and correcting problems. • Recognize and reward the “nice” employees. This requires providing top performers with meaningful feedback, providing coaching and training to help them improve, and delegating
responsibility when appropriate. Show a sincere interest in employees’ work and their well-being. • Be good, for goodness’ sake. A leader must lead with his or her good example. Employees are watching. Let them be inspired by what they see. Trust me, the leadership secrets of Santa are not myths. They provide a template that can be used by every company to improve and thrive. 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.
For retailers seeking seasonal employees, beware not all agreements are created equal By Beatriz Trejo and James Yoro As summer closes, Kern County residents will soon focus on cooler temperatures, another football season and holiday shopping. And with Black Friday right around the corner, retailers, too, must start preparing for the increase in shoppers. Retailers have a variety of options when it comes to finding additional help during the holiday season. However, retailers must be aware that not all employment agreements are created equal. One popular option for retailers looking for seasonal or temporary help is staffing agencies, which can provide employees with varying skills, time availabilities and wage requirements. Most retailers find that the convenience of a staffing agency is worth the cost. Most staffing agencies will handle hiring, terminations, payroll, Medicare, Social Security and workers’ compensation insurance. This last benefit can potentially shield a retailer from liability in case of a workplace injury, which is a focus practice area of our law firm. Retailers should be warned that liability between
retailers (special employers) and the staffing agencies (general employers) is a hot issue for litigation following a workplace injury. Most agreements between the special and general employers include a provision that the general employer will extend workers’ compensation coverage to the seasonal or temporary employee. However, a special employer can be found to be jointly and severally liable for the temporary or seasonal employee’s injury as a matter of law. To determine if the special employer will be liable, it must be found that the special employer had a right to control and direct the activities of the employee or control the manner and method in which the work is performed. Several factors are considered in determining the liability of the special employer. Among the factors considered is if the employee uses tools or equipment provided by the special employer, if the special employer’s control extends beyond suggestion or cooperation, whether the special employer had the right to fire the
employee or if the special employer had an obligation to pay the employee. To the contrary, circumstances that will negate liability of the special employers include the employee working only a brief period of time, if the employee is not engaged in the special employer’s usual business or if the special employer neither pays or has the ability to discharge the employee. When looking to hire temporary or seasonal help, retailers should look closely at the agreement with the staffing agency. The agreement should very clearly outline which party controls hiring, terminations, payroll, benefits and workers’ compensation insurance. A retailer must keep in mind that an employee from a staffing agency is a “borrowed” employee, and therefore, under the control of the staffing agency but under direction of the retailer. James Yoro is senior partner at Chain | Cohn | Stiles, where he manages the law firm’s workers’ compensation practice, and has nearly 40 years of experience in his field. Beatriz Trejo is an associate attorney focusing on work injuries at Chain | Cohn | Stiles.
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KERN BUSINESS JOURNAL
https://www.youngwooldridge.com/
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Legal & Human Resources
Bad customer service:
How to send your customers to your competitors having to solicit it. Here’s an example of what not to do. I was in an electronics store trying to buy a TV and couldn’t get someone to wait on me. An employee rushed by and assured me that someone would be right there. After a few minutes, another employee told me the same thing. Finally, a third employee approached me and asked, “What’s up?” I angrily replied, “I’d like to buy this TV, that’s what’s up!” I’m sure he had no idea why I was upset. Having to ask to be waited on was ridiculous, especially when I was about to spend hundreds of dollars. Then being greeted so casually just added fuel to the fire. I’ll go elsewhere the next time I want a new TV.
By Robin Paggi
“Y
ou can have everything you want if you will help other people get what they want,” said motivational speaker Zig Ziglar. If you’re in business, you want customers. What do your customers want? Good customer service. In fact, according to a Customer Experience Report by RightNow, 86 percent of consumers surveyed said they stopped doing business with a company because of receiving bad service. What does good customer service look like? Here are some key elements: Make eye contact, smile, and greet every customer. Seems easy, doesn’t it? However, lots of cusRobin Paggi tomer service representatives don’t do these simple things. For example, I was recently at the grocery store and approached a checkout stand at which the checker was involved in a personal conversation with the store’s security guard. I placed my groceries on the conveyer belt and the checker began to scan them while still talking to her co-worker. She didn’t make eye contact with me nor acknowledge me until she finished her conversation. She
then looked at me and asked, “How’s it going?” Annoyed, I replied, “Fine,” and that’s all the interaction she got from me that day. I’m sure she thought I was being incredibly rude. Perhaps the checker doesn’t know that a lack of eye contact demonstrates a lack of interest and creates feelings of annoyance or general disliking from the ignored person. No doubt the checker thought that finishing her conversation with her co-worker was the polite thing to do before she turned her attention to me. She should be told that the customer is more important than the coworker and having personal conversations in front of customers is not the polite thing to do. As for smiling, experimental data shows that smiling is not only expected during the formation of new relationships (such as interacting with a customer), it is necessary. Smiling indicates whether someone is friend or foe. Additionally, we instantly return a smile, which causes the secretion of endorphins (our internal happy drug) and makes us feel good about the person who smiled at us. When we experience social pain — like being ignored — the feeling is as real as physical pain. That’s why no eye contact, no smile and no greeting often lead to no repeat business. Seek out customer contact This means that customer service representatives approach customers to offer help instead of customers
Provide immediate fixes to problems An experience I had at a local print shop illustrates a poor attempt at that process. I ordered hundreds of bookmarks from the print shop and made arrangements to distribute them with some fellow Rotarians at a local elementary school on a Friday about noon. When I placed the order, I was promised it would be ready that Friday. When I arrived Friday morning around 10 to pick it up, the order was not ready. My bad — I should have asked for a specific time. I told the print shop owner about my predicament; he said my order would be completed that day as promised, but he couldn’t tell me when. So, I canceled with the school and the Rotarians and felt stupid because of having to do so. An hour later, I received a call from the print shop telling me my order was ready. I don’t know whether the owner felt bad after I left and decided to rush the order or whether it would naturally have been completed by then. What I do know is that a little effort on his part would have solved my problem and I wouldn’t have had to cancel with everyone. No effort on his part resulted in no more business from me. Thank every guest One of my favorite poor customer service stories happened at a bookstore. After silently handing me my change, the cashier pushed my purchase across the counter toward me and just looked at me. No “thank you,” “have a nice day,” “don’t let the door hit you on the way out” — nothing. I finally said to her, “No thank you?” She asked, “Thank you for what?” She genuinely did not understand why she should thank me for shopping at the store where she is employed. Amazon gets my business now. Business owners, managers and their employees need to know that customers can get similar goods at similar places all over town. The distinguishing factor between businesses is usually only the service they provide, and failure to provide good customer service is a sure way to send your customers straight to your competitors. If you want to attract and retain customers, give them good customer service. Otherwise, they’ll let your competitors give it a try. Robin Paggi is a training and development specialist with Worklogic HR.
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Community Business - Business Profile
Greg’s Petroleum Service
About Greg’s Petroleum Service Greg’s Petroleum Service is a local family owned and operated fuel and oil distributor. Since opening in 1961, our commitment to deliver value through customer service, high-quality products, reliability and safety has set us apart. Greg’s Petroleum Service serves hundreds of local companies in the agriculture, oil field, construction, industrial, fleet, retail and government industries. Our service area includes the San Joaquin Valley and beyond, including the Bakersfield, Fresno and Ventura areas. Services include commercial fuel delivery, lubrication solutions, fleet fueling cards, and both gas station and quick-lube franchising opportunities. We pride ourselves on supplying high-quality petroleum products and services while continuing to value customer relationships as highly as we did over 50 years ago. Moving to Bakersfield You may have seen the construction going on at the corner of Coffee and Downing in Bakersfield. As with any project, there is a lot more than meets the eye to a passerby. In this case, it started in 1961 with a small business opening in Delano that focused only on fuel. Thirty years later, the company has expanded its services significantly and is opening the first new facility of its kind in Bakersfield. Greg’s Petroleum Service’s brand-new custom facility will include an office space, a large unattended CFN Cardlock fueling location, a warehouse and a bulk storage facility. This will improve our ability to efficiently serve the Bakersfield area as a commercial fuel and lubricants supplier. Rest assured, nothing is changing with the existing Delano site for customers that prefer that location. Our new facility will also allow us to offer Chevron ISOCLEAN Certified Lubricants, making us one of the few to do so in California. ISOCLEAN Lubricants are lab certified to be free from harmful particles, resulting in longer equipment life and less unscheduled downtime. A little history behind our name Harold “Greg” Gregory started his career in petroleum at Ray Pratt’s gas station in Delano. Greg then went to work at Ken Teague’s Standard Oil Distributorship, where he became a partner in 1961 and bought the business in 1963. This company would eventually become Greg’s Petroleum Service. Greg’s superior work ethic and genuine concern for his customers set the foundation for what our company has become today. Meet Ron Mariani Ron Mariani first came to work for his father-in-law, Harold, at Greg’s Petroleum Service as a fuel driver in 1979. Learning the business from the ground up, Ron worked several positions before becoming president and CEO of the company in 1990. He has always had a deep appreciation for doing things the right way and has continued to build the company around pillars that value hard work, integrity, passion and community – something that has been embedded in the company since its beginnings.
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Community Business — Event
Energy Summit addresses Kern County’s position in the energy industry By Mark Nessia
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etroleum’s impact on daily life goes far beyond powering vehicles. The natural resource is used to make synthetic rubbers and fabrics; laundry detergent, dishwashing soap and glass cleaners; capsules and aspirin; paint; cosmetics; crayons; and so much more, playing a big role in everyday life that can go unnoticed. Entering its 11th year, the Energy Summit continues to enlighten the public on topics they weren’t aware of in the fields of oil, gas and renewables on Nov. 8, from 7:30 to 11:30 a.m., at the DoubleTree Hotel, 3100 Camino Del Rio Court. The Energy Summit will also inform attendees on how they can profit from the latest resources, tools and information while reducing their environmental impact. Keynote speaker Scott Tinker, director of the Bureau of Economic Geology at the University of Texas at Austin, will discuss
what Kern County can teach the world about energy. “In many ways, we are the energy capital of the U.S.,” Kern Economic Development Corporation President and CEO Richard Chapman said.
Kern County produces 72 percent of California’s oil and 70 percent of California’s natural gas, but doesn’t always get the credit it deserves. Kern County produces over 367,000 barrels of oil per day (over 134 million barrels annually) and accounts for 78 percent of California’s active wells. Kern County produces 72 percent of California’s oil and 70 percent of California’s natural gas, but doesn’t always get the
info@gregspetro.com www.gregspetro.com
credit it deserves. “Unfortunately, Kern County has a negative reputation throughout California and I think one thing that’s so great about (the Energy Summit) is having people come to the area who have either never been here and are able to see for themselves what we have to offer or people who already support us, like Scott Tinker,” said Tamara Baker, KEDC manager of research and marketing. “When we spoke with him on the phone, as soon as he heard Kern County, he was all, ‘Oh, I’m in.’” According to Chapman, more people outside the state know about Kern County —its reputation more positive — but tend to believe the regulatory environment in California to be too onerous to bring projects to the state. But they will continue to “beat the drums” until larger cities like LA and San Francisco give Kern County its due. “Sometimes, unfortunately, it takes an outsider’s voice to get people to recognize our area,” Baker said.
Tinker’s passion involves bringing academia, government, industry and nongovernmental organizations together to address major societal issues in energy, environment and economy. His work has been published in Forbes, The New York Times, Wall Street Journal, NPR and scientific literature. Additional speakers include Craig Murphy of the Kern County Planning Department, who will provide a planning and natural resources update; Vibhu Kaushik of Southern California Edison, who will discuss SCE’s recent energy storage projects; Helle Petersen of BlueTechValley Incubator & Valley Ventures Accelerator addressing energy innovation cluster; Neil Black of California Bioenergy; and a panel on the future of energy in Kern moderated by Todd Stevens of California Resources Corporation.
Kern County Energy Summit Nov. 8, 7:30 to 11:30 a.m. DoubleTree Hotel, 3100 Camino Del Rio Court Tickets are $100 and will be available Oct. 22 at www.kcenergysummit.com. Breakfast and snacks will be provided.
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Community Business
Community Business — Business Profile
The other side of Castle & Cooke
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sk just about anyone in Bakersfield who Castle & Cooke is and the most likely answer you’ll get is, “Castle & Cooke is the real estate development company that created Seven Oaks.” And that is true. In the over 25 years that Castle & Cooke has been developing residential communities in Bakersfield, they have created more than 48 unique neighborhoods, including Seven Oaks, Seven Oaks at Grand Island, the Brighton and Brimhall communities, Village Green, University Park and Windermere. But while most people know Castle & Cooke as the developer of some of Bakersfield’s most iconic residential communities and a builder of high-quality homes, they don’t realize that the same Castle & Cooke created many of the places where they work, relax, shop, dine and socialize. Places like The Marketplace, Gosford Village and The Shops at River Walk. It’s no accident that Castle & Cooke is a leader in both residential and commercial development. The concept of master planning is something Castle & Cooke pioneered in Bakersfield. From the very beginning, Castle & Cooke listened to what homebuyers said they wanted: quality homes with easy access to employers, shopping, schools, parks, entertainment, health care and recreation — all the elements of everyday life. The Shops and Park at River Walk are perfect examples of Castle & Cooke master planning in practice. Strategically located on Bakersfield’s booming west side on Stockdale Highway, one of the city’s primary east/west arteries, The Shops and Park at River Walk are artful combinations of corporate offices, picnic areas, walking
PHOTO BY HENRY A. BARRIOS
and biking paths, entertainment venues, shopping, dining and other services all within easy reach of Castle & Cooke’s most popular communities. This commitment to master planning has attracted many regional and national retailers, including Nordstrom, Eureka! Burger, T.J. Maxx, BJ’s Restaurant, Designer Shoe Warehouse and Jared the Galleria of Jewelry. The Shops at River Walk will also soon welcome Viceroy Indian Cuisine,
The Shops and Park at River Walk are perfect examples of Castle & Cooke master planning in practice. a new 3,400-square-foot restaurant with outdoor dining patio, while Gosford Village has recently leased over 12,000 square feet for a future Old Navy store. With the introduction of Highgate at Seven Oaks, Castle & Cooke continues to create lifestyle-oriented communities where people can discover “what matters most in life.” This latest addition to the Seven Oaks master plan includes five gated communities filled with parks, recreation areas, a future elementary school, an active adult community and an impressive swim and fitness clubhouse. The master-planning dynasty that began with the creation of the original Seven Oaks communities promises to deliver even more outstanding residential and commercial development as Bakersfield continues to grow. Promotional Content
For the love of jerky: Kern man starts business By Kelly Bearden
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eeting a personal need and a nationwide demand and having a passion for a product are three powerful incentives for any entrepreneur beginning a new business. But for Steven Tibbs, the founder of Tibbs Beef Jerky, these are the foundations of a business with a bright future. It’s not easy to begin a food-related business. Quality control and government requirements are complex and demanding. ComKelly Bearden petition is steep. And marketing and selling are challenging. That’s why Tibbs turned to the Small Business Development Center at California State University, Bakersfield, for help. For those of you who believe jerky is a “dude food” eaten by men who crush beer cans on their foreheads, think again. It is one of the fastest-growing snack foods in the nation. According to a recent Nielsen study, the sales of meat snacks, including jerky and dry sausage sticks, have grown, while chip sales have slowed.
And you can credit Americans’ obsession with protein for these booming sales. Many jerky products now are geared to millennials, who are involved in such things as CrossFit and who are searching for healthy snacks to satisfy gluten-free and paleo diets. Basically, jerky is high in protein, low in fat and in calories, easy to transport and long lasting. Jerky is a lean meat that has been trimmed of fat, cut into strips and then dried. It can also be made of finely ground meat, mixed with seasonings and pressed into “meat paste.” The word “jerky” is derived from an Indian word that means “dried, salted meat.” Although jerky today primarily uses beef, it can be made from a variety of meats, including ostrich and venison, and there are even vegan adaptations. Using spice combinations, they also come in many “flavors.” Tibbs Beef Jerky goes by such names as “Not Your Typical Teriyaki,” “Grampas Black Pepper” and “Oh My Spicy Garlic.” “I started making jerky from home because today’s jerky doesn’t taste as great anymore,” said the Bakersfield native, who tasted his first piece of beef jerky in Arkansas when he was 7. “It Turn to ENTREPRENEUR on Page 30
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MORE FASHION MORE FOOD MORE FUN
Over 50 Stores, Restaurants, Boutiques & Spas Stockdale Hwy. & Calloway Dr. By Castle & Cooke
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KERN BUSINESS JOURNAL
October / November 2017
Community Business — Tourism Update
PHOTO COURTESY OF VISIT BAKERSFIELD
Via Arte artist at work.
PHOTO COURTESY OF VISIT BAKERSFIELD
HolidayLights at CALM 2016
Another full, fun fall calendar for visitors and residents By David Lyman
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akersfield’s fall events calendar is a busy one. Here are some highlights for visitors and residents alike. A Bakersfield tradition since 1974, the Greek Food Festival will get underway Oct. 6-8 at St. George’s Orthodox Church. This popular festival will feature Greek music all day by the Olympians, along with all your favorite traditional Greek foods like souvlaki, gyro sandwiches, paidakia, feta fries, dolmathes, tiropites and spanakopita, plus incredible desserts like loukoumades, assorted Greek pastries and baklava sundaes. In addition, you can tour the church, shop from numerous vendors, and enjoy Greek folk dancing performances and lessons. The 26th annual California Hot Rod Reunion presented by Automobile Club of Southern California returns Oct. 20-22 to Auto Club Famoso Raceway. This popular three-day event is a festival of speed and the perfect David Lyman way to pay respects to the history of the legends of racing. It attracts fans worldwide and Bakersfield hotels will be busy. Enjoy the sounds of four-part harmony when the Far Western District of the Barbershop Harmony
Society convenes Oct. 19-22 at Rabobank Theater. This annual fall convention of all of the Barbershop chapters in California, Nevada, Arizona and Hawaii returns to Bakersfield after an absence of several years. Open to the public, the convention will feature quartet contests and chorus contests. The winner of the chorus contest will qualify to compete at the group’s international convention in July in Las Vegas. On Oct. 21-22, Via Arte Italian Street Painting Festival returns to The Marketplace, bringing together the community and the visual arts as it has done since 1998. Using the asphalt as canvas, spectators watch each year as professional and student artists unlock their imaginations and turn the parking lot into a gallery of amazing chalk masterpieces. Get your tartan on with the Eighth Annual Bakersfield Celtic Music Festival at the Kern County Fairgrounds Oct. 28. Enjoy six Celtic rock bands in a fun and energetic setting. Admission includes two full size beers of your choice, lawn games, scotch tasting, food, and vendors. This is a 21-and-older-only event sponsored by the Kern County Scottish Society. Also on Oct. 28, guests of all ages are encouraged to wear costumes and trick-or-treat their way around California Living Museum for Boo at the Zoo. You can visit with the animals and experience the natural gardens just as the foliage is beginning to turn. Children 12 years and under are free and must be accompanied by an adult. There are spooktacular
games, festive decorations, food and beverage booths and treats for all, plus a wildlife presentation and animal encounters. The Dia De Los Muertos (Day of the Dead) celebration returns to the Kern County Museum Nov. 5. Tons of fun, kids area, family tribute altars, food and vendor booths, sugar skull making, live entertainment and more! Children 6 and under are free. The Second Annual Bakersfield Marathon takes to the streets of Bakersfield on Nov. 12. This annual, world-class event is a USATF-certified full marathon, half marathon, two-person half marathon relay and 5K. With the starting and finishing lines on the California State University, Bakersfield, campus, participants will run through dozens of iconic neighborhoods, past the Kern County Museum and Bakersfield College and finally along the Panorama Bluffs before returning to the finish line on the scenic Kern River Parkway. A holiday tradition, Holiday Lights at CALM features a dazzling musical tree show and creative, animated displays with more than three million colorful, energy-efficient LED lights. This one-of-a kind event was voted Bakersfield Best Annual Event and named one of the 10 best holiday light shows in the West by the Los Angeles Times. Designed and installed by Josh Barnett and his company Lightasmic!, the event runs every night between Dec. 1 and Jan. 6, except Christmas. Enjoy free train rides on the Candy Cane Express and a giant merry-go-round. Celebrate this Christmas with the experience taking North America by storm. Marking the 25th North American Anniversary Tour in 2017, Moscow Ballet’s “Great Russian Nutcracker” features over-the-top production values and world class Russian artists at the Fox Theater. Larger-than-life puppets and nesting dolls and gloriously handcrafted costumes bring the Christmas spirit to life. Gather the family and see why the New York Times raved “knockout!” For information on these and other Bakersfield events, check out the events calendar at www.VisitBakersfield.com. David Lyman, Ph.D., is manager of Visit Bakersfield. He and other members of Team More to Explore help visitors from throughout the world spend their money in California’s ninth largest city. They are available toll-free 866-425-7353 or at Info@VisitBakersfield.com.
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Community Business - Executive Profile
BRUCE DAVIS Title: Senior Vice President of Development Company: Bolthouse Properties LLC
Bakersfield City School District is very proud of our student achievement, which is attributed to the dedicated and professional commitment of our teachers, administrators, classified staff, as well as the performance of all students within the district. Come join our Team!
About the company/ organization: Bolthouse Properties holds agricultural land and invests in commercial retail and office properties that will have a positive impact on local communities. The company is the current master planner/developer of the land in the Seven Oaks corridor — one of the most rapidly growing regions in Bakersfield. What I do: I oversee the development activities for our retail, commercial and residential communities. My team works on planning, engineering, construction, leasing and we collaborate with numerous professionals within our community. Where I grew up: I was born and raised in Brea, California. How I landed in Kern County: I came to Bakersfield in 1994 to work with Castle and Cooke as its senior vice president of development. I left in 2001 to work for Jack Nicklaus developing golf courses and golf communities internationally. I was happy to return in 2013 following the completion of a 2 ½-year project in Beijing, China. Education: Bachelor’s degree in business and economics from the University of La Verne. Family: My beautiful wife, Nayree, and I have been married for 31 years. We have two adult sons. Andrew, who is married and works for Wells Fargo in Charlotte, North Carolina, and Alex, engaged to be married in the spring who is beginning his medical residency in Birmingham, Alabama. Hobbies: I enjoy all outdoor sports, including fishing and golfing as well as a lifetime passion for baseball.
What was your very first job and what did you learn from it? My first job was a paper route. It taught me the rewards of commitment, sacrifice and saving. I was able to buy my first bike with the money I saved getting up early every day instead of sleeping. Who or what has been the biggest influence on your career? I feel so fortunate to have worked with so many inspirational people in many cultures and environments that it would be impossible for me to select just one. What was the best piece of advice you ever received? My mom and dad always drilled into me to “keep going and never give up.” What is the most challenging part of your job? The most challenging is also the most rewarding. Every day we deal with so many new and different opportunities and challenges. No two days are the same. What is the most rewarding part of your job? I am blessed to work for a company of principles and integrity with a philosophy of “do what is right.” That philosophy is supported by abundant resources and a quality team of dedicated professionals. What is the most memorable accomplishment of your career? I have been fortunate to have worked on many unique and memorable projects both in the U.S. and internationally. My last project building an 0 and rewarding because my wife and I were able to live in Beijing and assimilate into a very different culture. We were rewarded with a lifetime of experiences and many new friends.
We offer full-time and part-time opportunities for classified and certificated staff. Bakersfield City School District Where the Child Comes First 1300 Baker Street Bakersfield, CA 93305 Phone 661-631-4600 www.bcsd.com
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KERN BUSINESS JOURNAL
October / November 2017
Community Business
Nonprofit/for-profit partnerships: Mutually beneficial and heartwarming By Louis Medina
N
onprofits need for-profit businesses. They have office equipment and supplies to purchase, marketing materials to design and print, legal work to contract out. They also benefit from the charity drives, events and nonprofit discounts their generous for-profit partners offer them in the spirit of giving back to the community. But what about for-profit companies? Besides enjoying tax breaks for donations, what do they get out of partnering with nonprofits? Louis Medina Actually, a lot! As you will see from the following story involving Kern Community Foundation partners who either work or have worked in the for-profit sector, nonprofits can offer job training and creation, income-generating referrals, valuable networking opportunities and humanfocused services — especially in times of need. To say nothing of the morale boost that comes from working together for the common good. How Terri met Jonny Terri Agcaoili worked in cosmetics retail for 20 years before joining the Alzheimer’s Disease Association of Kern County as its sales and marketing coordinator. What made her switch over to nonprofit work? Her grandfather was diagnosed with Alzheimer’s. “I love what ADAKC did for my grandpa and my mom as a caregiver,” she said. The adult day services her grandfather received allowed her mom to have some respite and freed her up to go back to work. In gratitude, Agcaoili began volunteering. When a job in marketing opened up a couple of years later, she was an obvious recruitment choice thanks to her sales
Jonny Deprigo of Deprigo Media.
background and because she had become familiar with the agency through her volunteer work. Already involved with the Greater Bakersfield Chamber of Commerce through its Ambassadors Program, Agcaoili became an even more passionate ambassador after transitioning to ADAKC and “I invited all the ambassadors to take a tour of the agency,” she said. One of her fellow ambassadors was Jonny Perez, who handles public relations and community outreach for local design and marketing company Deprigo Media. Seeing ADAKC’s work up close drove a point home for him: “I saw how Alzheimer’s affects many people in Kern County,” he said. “I realized how important it is to help the people who raised our generation and are now suffering from this disease.” While on the tour, Agcaoili and Perez started talking business, as ADAKC needed some printing at the time. After looking over their needs and the price they had been offered by another supplier, Perez told her: “I can definitely give you a better price. I’ll work with you as a nonprofit.” And that was the beginning of a mutually beneficial partnership. Cha-Ching! A grateful Agcaoili started spreading the word about Deprigo. “Whenever they help us out, I want them to benefit,” she said. “I’ve sent my nonprofit friends, my for-profit friends,
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even my family to them. I am their free advertising.” One of the agencies Agcaoili referred to Perez was Kern Community Foundation, which now uses Deprigo for much of its printing needs. Perez agreed that Deprigo Media enjoys a lot of business generated by referrals from nonprofit clients. “We’re in business to make money,” he said. “And there is no marketing better than word of mouth. Doing what we do well gets us referrals.” But he also recognizes this: “The community has always given back to us. Any money we have invested in the community has come back to us tenfold.” Closing the circle by giving back “If I got commission on all the work I’ve sent their way, I probably could retire,” Agcaoili said with a chuckle. However, she also praised all that Deprigo, and Perez in particular, have given back to ADAKC — and it’s not just about business, either. “You can tell the love Jonny has for us,” she said. “Now he volunteers at our events: He helps to set up marketing displays and even serves food.” Both Agcaoili and Perez agree that giving back is part of the makeup of Bakersfield and Kern residents. “This community, we’re raised to give back and be involved,” she said. “That’s why I love living in Bakersfield,” he said. They are business partners who have become friends through sales transactions, referrals, volunteering, and caring. “And you’ll never know when he might need us,” Agcaoili said about her friend. “One of his staff members might come to him and say, ‘My mom’s not acting right.’ And then they’ll need our services.” Louis Medina works as the manager of community impact for Kern Community Foundation. He may be reached at Louis@ kernfoundation.org.
‘Providential Adoptions’ yield new business for PR firm Did you know that local public relations firm Providence Strategic Consulting has a program called “Adopt a Nonprofit,” whereby Providence staff will build, launch and maintain for two months the Facebook page of a local charity? “We believe in the power of social media and what it can do to further an organization’s mission,” Julie Bell, Providence’s senior project coordinator, said about the year-old program. “We feel we have the knowledge and a lot of nonprofits don’t have the extensive resources they need, so this was a way to meet a need in the community,” Information on Providence’s website, www.provconsult.com, says suggestions for worthy nonprofits should be made through the firm’s Facebook page, www.facebook.com/provconsult. The criteria for potentially qualifying nonprofits are simple: have 501©(3) status, be located in Kern County, and present a need of none or very little social media presence. “Our team loves the field of marketing and PR that we’re in and the work we do for our clients.” Bell said. “It’s a benefit for our employees to give back to our nonprofits and serve the community at the same time in this way.” Indeed, Kern Community Foundation benefitted from Providence’s assistance in this year’s Give Big Kern effort. Bell said KCF reached out to Providence as a paying client after learning about the work they were doing with nonprofits. Besides the paid work, Providence “adopted” the Foundation’s Give Big Kern Facebook page during the weeks leading up to and immediately following Give Big Kern Day on May 2, to help promote the online crowd funding effort that raised approximately $150,000 for close to 100 local nonprofits. Doors have opened for Providence thanks to this exposure, Bell said, with a number of nonprofits reaching out to them for paid services — not necessarily to be “adopted.”
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October / November 2017
KERN BUSINESS JOURNAL
http://kerncountyenergysummit.com
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KERN BUSINESS JOURNAL
October / November 2017
Marketing
2006-2016 Kern County Retail Sales Annual Average Growth (%)
Bakersfield’s love affair with food By Jose M Granados
Source: California Retail Survey, 2017
Retail amenities key By Richard Chapman
A
community’s retail offerings are becoming an increasingly key element of the site selection process for companies considering relocation or expansion. “Quality-of-place” factors are of significant value for millennials and baby boomers alike (and everyone in between). As cities ramp up their efforts to enhance their retail infrastructure, Kern County’s portfolio is beginning to yield impressive returns. Currently, 34,000 people in Kern County are employed by the retail trade industry. According to the Bureau of Labor Statistics, the Bakersfield MSA ranked first in California and 15th in the U.S. for retail employment growth from 2007-2017. (Over the last 10 years, the restaurant industry grew at a strong annual rate of 7.8 percent in Bakersfield and apparel sales grew at a brisk 6.5 percent annual rate.) Bakersfield ranks sixth in California for retail sales, despite being the ninth-largest city in the state. The sector’s robust growth has been spurred by large-scale projects including the Outlets at Tejon and The Shops at River Walk. In addition, several new lifestyle centers are in the works throughout the county, including the 250-acre Bakersfield Commons and the redevelopment of East Hills Mall. From an economic impact perspective, 100 retail jobs translate into over $13 million in annual sales and $4.5 million in wages, ac-
cording to the Bureau of Economic Analysis. As a result, many Kern County communities — equipped with detailed trade-area data and ready-to-go sites — are actively recruiting retail interests at industry conferences such as the International Council of Shopping Centers events. In 2017, ICSC hosted the “World’s Largest Industry Convention” in Las Vegas with an estimated attendance of 37,000 and 1,200 exhibitors.
Retail trends Shopper-tainment A recent industry phenomenon is the “blurring of the lines between retail and leisure.” Restaurants and other retailers now co-exist in harmony with farmers markets, art shows and live-music events. These unique experiences serve as an alternative to the online transactional option.
Z-Generation emerges Several years ago, millennials overtook Gen Xers as the largest segment of the workforce. Gen Zers, born between the mid-1990s and mid-2000s, are now emerging as a powerful buying force. A recent study by the National Retail Federation and IBM’s Institute for Business Value found that Generation Z consumers hold $44 billion in buying power. These individuals are “digital natives” who do not remember what life was like before 24-hour internet access was available. However, 67 percent of this age group prefer the brick-andmortar experience “all of the time”
and 31 percent to want to shop in person “some of the time.”
Store size tailored to client’s needs Concepts like “toe print” (a very limited market presence) and “the paradox of (too much) choice” are now becoming part of the industry lexicon. Nordstrom recently announced that its Nordstrom Local concept would test a 3,000-squarefoot “try-and-buy” concept that would include wine, beer and gourmet coffee options. Store employees will provide curated assistance that will produce customized clothing offerings to be delivered within several hours. In today’s fast-paced world, this new retail environment creates a just-in-time option for consumers that prefer not to spend an inordinate time searching for suitable clothing selections.
Over the past few years, Bakersfield has developed a vibrant and growing restaurant industry. The local restaurant landscape is becoming a gateway to other cultures, people and places. Bakersfield consumers get to discover and experience locally flavors and foods from near and faraway places — Thailand, India, Peru, Mexico, etc. From hamburgers, tacos to dumplings, tempura, kebabs and craft beer, all are now easy to find in Bakersfield. The local restaurant landscape is developing rapidly enough to make it difficult to keep up with what is new. If you read the Bakersfield Californian or the Bakersfield Life Magazine, you know that both have a healthy load of restaurant content including ads, reviews and features. However, it appears that readers want more. TBC Media recently surveyed Bakersfield Life’s readers to determine content needs and preferences for the upcoming year. Overwhelmingly, readers ask for more content regarding restaurants and food in general. They want more restaurant reviews. They want more restaurant ads and offers. Readers’ fascination with restaurants goes beyond the dish. They want to know who prepares it. They want to know the chef. They want to know the food source. The results from the Bakersfield Life’s survey indicate that for local consumers, a good dining experience goes far beyond great food and great service. It is an opportunity to spend time with friends and family. For local consumers dining out is a pastime and a favorite entertainment option. If you run a restaurant in Bakersfield, this is important to know and to keep in mind: consumers are looking for more than just a business transaction, they want a relationship. Some may say that Bakersfield is finally catching up with national trends. But if you look at the trends: natural ingredients, locally produced foods, no food waste, etc., they are well rooted in Bakersfield’s culture and values. Regardless, these are the top 10 concept trends according to the National Restaurant Association: hyperlocal sourcing, chef-driven fast-casual concepts, natural ingredients/clean menus, environmental sustainability, locally sourced produce, locally sourced meat and seafood, food waste reduction, meal kits, simplicity/back to basics and nutrition. Again, if you run a restaurant in Bakersfield or are considering opening one, it is important to know and to keep in mind that Bakersfield consumers are getting sophisticated. Still suburban in some aspects, but when it comes to dining out, local consumers have urban taste and want the full urban experience. They want street- and ethnicinspired dishes, sustainable food and heirloom fruits and vegetables.
Kern County is well-positioned to attract retail investment opportunities Kern County provides an ideal West Coast option, not only for businesses (that enjoy a cost of doing business that is just 93 percent of the U.S. average), but also for residents (who benefit from a cost of living that provides a California lifestyle for just 106 percent of the U.S. average). Add to that the prediction that Kern County’s population will reach 1 million in fewer than five years and the region’s retail potential becomes quite clear. Richard Chapman is the president and CEO of Kern Economic Development Corporation.
Finally, two of the economic indicators confirming the growth in the restaurant industry are employment and sales tax (see graph). Since 2010, the Kern County restaurant industry added more than 4,700 jobs, an increase of 29 percent over the seven-year period. The increase in sales tax revenue is even more pronounced, growing 48 percent 2010 through 2016. Jose M Granados is a business analyst at TBC Media. He can be reached at jgranados@bakersfield.com.
October / November 2017
KERN BUSINESS JOURNAL
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Marketing
Opportunity knocks – bridal competitors answer
New Business Rewards Checking and and
By Maureen Buscher-Dang
D
riving home from the beach after a tasting of dishes for my daughter’s upcoming wedding dinner, the radio reported a well-known bridal store had abruptly closed leaving brides-to-be in a lurch. After a quick call to my daughter, I was thankful we were not among the thousands left high and dry. Alfred Angelo closed all of its 61 bridal stores this summer as part of a Chapter 7 bankruptcy to liquidate, rather than restructure, debt. The 84-year-old Maureen Buscher-Dang Alfred Angelo brand was viewed as an affordable label and heavily advertised in bridal magazines. Their dresses could be found in more than 1,400 retailers worldwide. Faced with pending wedding dates, thousands of brides-to-be and their loved ones were left scrambling to make sense of it all and to come up with a contingency plan. Considering the company’s filing revealed $50 million in debt, compared to $50,000 in assets, prospects are doubtful any bride will receive their dress or a refund. Within 24 hours, dispatchers in San Antonio, Texas, received 911 calls regarding the store closures. And the bankruptcy attorney for the company received 7,300 emails. Enterprising competitors, like the national chain David’s Bridal, saw a marketing opportunity and began offering discounts to panic-stricken customers with original branded Alfred Angelo receipts. David’s Bridal took a rapid threepronged approach that offers some good marketing examples of continuity of message and striking while the iron is hot.
Quick website change David’s Bridal swapped out their homepage within 24 hours of their competitor’s closure. The revised text immediately appealed to customers and their needs: “ATTENTION ALFRED ANGELO CUSTOMERS “Impacted by Alfred Angelo’s store closures? We’re here to help. “We know how much goes into planning a wedding and we want to ensure that everyone affected by this news can still have the day of their dreams. If you
recently purchased an Alfred Angelo wedding dress or bridesmaid dress and did not receive it, we are offering a discount on a replacement dress of your choice.”
It’s important for businesses to keep a vigilant eye on their competitors. You never know when an opportunity will present itself to fill the gap. The page went on to offer a 30 percent discount on replacement wedding gowns and a 20% discount for bridesmaid dresses, along with a waiver of rush fees for alterations.
Twitter The day after the Alfred Angelo store closures, David’s Bridal tweeted a message with a link that led to the updated homepage on their website.
Facebook The company also scheduled a 4 a.m. Facebook post the day after the closures. It had the same language as the homepage and included a link to their website. Less than one week later, the post had been viewed by more than 2,400 people, shared 1,640 times, and garnered 594 comments.
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Criticism Some folks accused David’s Bridal of being opportunistic. However, they were in the minority. It’s important when a company receives criticism to remain professional. They did just that in this Twitter exchange: Michael Hughes@videogamedev Jul 15 Replying to @davidsbridal “Talked with a handful of upcoming brides. None want to do business with you. Felt other ways you could’ve helped. Felt tasteless PR grab” David’s Bridal Cares@DB_Cares Jul 17 “We are so sorry to hear that you feel this way. If you need any assistance, please email us at DBCares@dbi.com” It’s important for businesses to keep a vigilant eye on their competitors. You never know when an opportunity will present itself to fill the gap. Maureen Buscher-Dang is a Bakersfield public relations and marketing consultant. She can be contacted through her website www.buschermarketing.com.
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KERN BUSINESS JOURNAL
October / November 2017
Real Estate
Retail business booms in Bolthouse’s Seven Oaks By Laura Wiener
I
srael Vasquez said it all when he explained on a recent local radio show why he decided to open a second location for his iconic Bakersfield meat market in Bolthouse Properties’ Grand Island Village shopping center. “We are your upscale meat market. There’s no better (location) than the Laura Weiner Seven Oaks area,” he said, noting he wanted a location that would reflect what WoodDale Market represents. The small neighborhood market on Stine Road has attracted discerning customers seeking high-end meat for more than six decades. Vasquez, who purchased the store in 2003, offers customers top-quality meat and topquality service. Watching meat sales triple under his family’s ownership, Vasquez recognized the need to find a second location. Bolthouse Properties’ Grand Island Village was the logical choice. Wood-Dale’s approximately 3,000-square-foot new shop will open soon with an expected staff of 15. Wood-Dale is not the only iconic Bakersfield business to
Sol Y Luna Mexican Cuisine restaurant
PHOTO COURTESY OF NANCY VOGEL
Opulent Day Spa
PHOTO BY FELIX ADAMO
Mustang Square Fountain
expand to Grand Island Village. Another is Dewar’s, which has been dishing out ice cream and selling candy since long before World War II. As the southwest region grew, the next generation seized the opportunity to implement a new business model with this location having an express drive-thru for ice cream. Some of the center’s tenants include Runaway Gypsy Boutique, which offers boho chic to business casual women’s fashion, Opulent Salon, Beautologie, SportsClips and Elegant Nails & Spa. Valley Republic Bank, Magic Real Estate and State Farm Insurance are among the
business offices located in Grand Island Village. Health and wellness tenants include In-Shape, Bakersfield Eye Care, and Grand Island Dental. Additionally, included are three restaurants Wiki’s Wine Dive & Grill, Jersey Mike’s Subs and Sol Y Luna Mexican Cuisine. Bolthouse Properties is methodically developing the Buena Vista corridor in Bakersfield with a balance of retail centers; business centers and master planned residential neighborhoods. The Bolthouse Properties’ Seven Oaks master plan is designed to support the livework-play concept. Thoughtfully planned residential neighborhoods are located adjacent to and within walking distance to retail centers making a morning walk for coffee or brunch just one possibility. As the area grows, the residents will be able to access the multipurpose trail to walk or bike to work in the Business Park, to neighborhood schools and to parks and recreation centers. “At Bolthouse Properties, we take the long-term perspective of being an owner after the project is completed. We take special care with the planning, design and execution of the details to deliver projects that add long
term value to the communities.” said Senior Vice President of Development at Bolthouse Properties Bruce Davis, adding that, “We are part of the Seven Oaks community and plan to be for a long time.”
Bolthouse Properties is methodically developing the Buena Vista corridor in Bakersfield with a balance of retail centers; business centers and master planned residential neighborhoods. Their goal is to attract the local iconic businesses and retail tenants to the Seven Oaks/Buena Vista corridor ensuing that quality remains for generations to come. Signature architecture with beautifully lit fountains and patios can be found at both Grand Island Village and nearby Mustang Square. The Mustang Square center, adjacent to Stock-
dale High School and the Seven Oaks community, is anchored by a distinctive clock tower. Exciting new tenants to Mustang Square include Haveli Indian Grill, Umi Sushi & Sake, TBaar, Me-N-Ed’s Pizza, Angel Donuts, Star Beauty Salon and Palazzo Nails & Spa. Rounding out the center are Premier Family Health Care and Walgreens as well as Cruz Thru Carwash and Kern Schools Federal Credit Union. Moving south along Buena Vista Road, Bolthouse Properties has begun construction of their next retail center at the entrance to Seven Oaks Business Park. This new retail center adjacent to the multi-purpose trail will support the underserved demand of the Business Park occupants and nearby residents. Set to open in December is Centric Health Urgent Care with a pharmacy to follow. Coming in 2018 will be a Sully’s service station that, in addition to fuel, will offer a convenience store and a small café with patio dining. There is still opportunity for a variety of discerning retail businesses to capitalize on this growing area at the entrance of Seven Oaks Business Park. With approximately 80,000 square feet of projected retail space to support the 267-acre Business Park, clearly the boom is just getting underway. Laura Wiener is the owner of Spectrum Communications.
October / November 2017
KERN BUSINESS JOURNAL
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Real Estate
Commercial and retail development in Bakersfield By Richard Gearhart
B
y every appearance, retail and commercial trade in Bakersfield is thriving. Drive past areas in the southwest and northwest of the city on your daily commute and you see new retail shopping centers opening, new office spaces being advertised and a variety of economic development occurring. But do these observations match the data and what is actually occurring?
Retail Employment One of the best ways to measure the growth in the retail sector is to look at employment. Employment measures current and future economic conditions. Growth in employment in the retail sector would hint that, even though labor incomes have fallen in Kern County by about $62 per resident, current economic activity has not been depressed. It is also the hope that the large growth in GDP for the U.S. in the second quarter of 2017 will be matched by growth in real personal incomes at the local level. The data matches our observations. Between the first quarter of 2017 and the second quarter of 2017, there were 367 more retail trade employees hired. In the second quarter of 2017, 32,933 workers were employed in retail trade (33,300 in July 2017, hinting that growth will continue). In fact, 8.6 percent of the civilian labor force is employed in retail trade, which is one of the highest values ever found in the city of Bakersfield since January 2000. What speaks to the growth of the retail sector is the fraction of jobs available for retail trade. At the height of economic growth, in 2006, 9.1 percent of all jobs in Bakersfield were in retail trade. After the tremendous collapse in oil prices — and thus the subsequent declines in a significant portion of both business and labor revenues tied to the oil extraction market — 9.5 percent of all jobs in July 2017 are now tied to retail trade. This indicates that even though oil and gas drive Kern County and Bakersfield, we are diversifying away from these fundamentals. It also hints that entrepreneurs and businesses anticipate that demand for their retail goods will remain high in the future. This is important; we are facing a time when labor incomes, in the second quarter of 2017, have fallen for the second consecutive month and shown general stagnation or decreases. If businesses are anticipating that, regardless of these
trends, economic growth in the economy as a whole will outweigh the local impacts of low oil prices.
Retail and Commercial Rents Since the beginning of 2014, the asking prices for office sales has been increasing in the Bakersfield. In 2014, the average office space sold for $120 per square foot; by the middle of 2016, the average asking price was $131.77, a yearon-year increase of 0.5 percent. Though this does not seem like a lot, with commercial and retail development occurring in the city at a rapid pace, this means that the increases in demand for this pace is far outstripping the increases in supply. During the same time, the asking rent for office property has been increasing. In the beginning of January 2014, it was slightly under $18 per square foot per year in rent. By the middle of 2016, it was $18.33 per square foot per year, a yearon-year increase of 3.6 percent. These differential price increases in rent and purchasing habits hint at the expectations for the use of these spaces. They hint that individuals are more willing to purchase buildings than to rent them, implying that they anticipate being in business over a very long period of time. Purchasing office space comes with a tremendous long-run commitment, so that these indicators play a vital role in telling us what will happen.
Final Story Overall, the observations made on a daily basis, as well as the data, tell us that retail and commercial spaces are thriving in Bakersfield. This is in contrast with national trends where large-scale shopping centers and big-box stores are reducing their footprints in response to online traffic and reduced shopping patterns by consumers. In an era where consumers are averse to using large scale credit devices after the most recent recession, and where personal savings rates have been higher than average recently, these trends present important implications for the future of retail and commercial in Kern County. Specifically, the employment and rent trends that we are seeing highlight the fact that even though we are seeing reductions in personal incomes, the growth in employment, reductions in the unemployment rate, and increases in personal spending trends locally are creating an environment that is amenable for future growth. Richard Gearhart is an assistant professor of economics at California State University, Bakersfield.
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KERN BUSINESS JOURNAL
October / November 2017
Health
Local firm shows gratitude by supporting Houchin By Greg Gallion
C
ommunicating is the passion of SC Communications, a Bakersfield-based company that specializes in the sale and maintenance of two-way Motorola radio systems, as well as Samsung business telephone systems. And SC Communications has used this passion to also support Houchin Community Blood Bank. Company founder Skip Chandler has not only been a yearslong, regular Houchin blood donor, he and his company have helped sponsor numerous blood drives, particularly when local blood supplies are critically needed. “We figure that Kern County has been good to us and what better way to give back?” said Chandler, who founded his Motorola dealership in 1993. “Besides, look at all the people this helps. You really get to touch a lot of people in a positive way. You’re not giving to one person, but to many.” SC Communications helps communicate support for Houchin and encourages people to donate blood by its founder’s personal example of giving — both of his lifesaving blood and of his company’s dollars. His sponsorship of blood drives has included the donation of prizes and other incentives used during promotional campaigns. Supporting Houchin is a family tradition, as well. With Chandler’s retirement earlier this year, leadership of the company passed to his daughter, Jamie Hastings, a longtime SC Communications employee and now the company’s owner and president. Hastings said she intends to continue her father’s support for Houchin by both donating blood and financially supporting blood drives. “This is such a good cause. I am proud to continue the company’s support for Houchin,” said Hastings, noting that many first-responder agencies are SC Communications’ customer. “Like these agencies, Houchin is dedicated to serving the people of Kern County.” Hastings said supporting Houchin is also a way for
Skip Chandler and his daughter Jamie Hastings of SC Communications.
SC Communications to express its appreciation for its business success. Technological advances in recent years have increased the popularity and use of two-way radio systems by businesses and public agencies. “We do a lot of work with local fire departments and police departments,” Hastings said. “But our customers also include construction and oil companies, trucking companies, hotels and many other small businesses. All schools, for example, have radio systems, especially in their school buses.” Customers rely on dedicated two-way radio systems, rather than cell phones, for a variety of reasons, she explained. These reasons include the fact that two-way radios focus workers’ communication on “company business,” rather than private conversations. Two-way radios also have unique features, such as GPS tracking, which can monitor the location of vehicles and workers, and cost less than cell phone systems.
Houchin is grateful for the support it receives from local businesses, such as SC Communications. During the approaching holiday season, Houchin’s blood supplies can reach precariously low levels. Regular donors and student donors are away from home and unable to donate. Outdoor activities, such as holiday travel, can result in tragic accidents that require transfusions of whole blood and blood 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 the president and CEO of the Bakersfield-based Houchin Community Blood Bank. For more information about donating blood, platelets and plasma, go online to www.hcbb.com.
Electric vehicle infrastructure grants available By Cassandra Melching
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s electric vehicle adoption becomes more commonplace, the San Joaquin Valley Air Pollution Control District may be able to help local public agencies and businesses install electric vehicle charging infrastructure at their properties. Gov. Jerry Brown, in 2012, issued Executive Order B-16-12 that set into motion new standards for California encouraging the use of more zeroemissions vehicles. One of the first goals of the governor’s action is for California to be able to accommodate Cassandra Melching more ZEVs through the development of infrastructure plans by 2015. Multiple stakeholders in the San Joaquin Valley worked together to complete a Plug-in Electric Vehicle Readiness Plan that identified the infrastructure needs in the valley (http://valleyair.org/grants/pev.htm). By 2020, California’s infrastructure will be able to support up to
1 million ZEVs. By 2025, 1.5 million ZEVs will be on California’s roadways with easy access to infrastructure. The electric vehicle market is experiencing substantial growth, and the residents in the San Joaquin Valley are beginning to take advantage of the significant state and local incentives available, rebates that can top $6,000, for the purchase or lease of an EV. For local valley businesses, this is exciting news. It’s a way for local retailers and commercial businesses to capitalize on additional traffic to their properties by becoming EV ready. Not only will it attract new and repeat customers, but it will also increase visiting/shopping time, which in turn, boosts customer satisfaction and reinforces an eco-friendly image for one’s property. There is also an added benefit for employees as well. By offering charging stations, a company is more likely to attract and retain a higher quality workforce, which in turn, enhances employee productivity and satisfaction. A U.S. Department of Energy survey reported that workers are 20 times more likely to buy a plug-in car if their employer offered at-work charging. With a higher
quality workforce and increased traffic, why wouldn’t one consider installing chargers? The burden of funding the cost to install EV chargers doesn’t have to solely fall on the public agency or the commercial owner. The San Joaquin Valley Air Pollution Control District’s Charge Up! Program will help fund the purchase and installation of publicly accessible electric vehicle chargers. The program offers valley businesses and public agencies up to $6,000 for a Level 2 charger and up to $25,000 for a Level 3/DC Fast Charger. The goal of this program is to further strengthen the valley’s electric vehicle charging infrastructure to ensure the technology’s sustainability in the region and ease the “range anxiety” that concerns many existing and potential electric vehicle owners. For more information about the Charge Up! Program, please visit www.valleyair.org/chargeup. Cassandra Melching is an outreach and communications representative for San Joaquin Valley Air Pollution Control District.
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Agriculture
Kern hits top crop value in nation for the first time By Steven Mayer
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ern County is No. 1! The San Joaquin Valleyâ&#x20AC;&#x2122;s southernmost county has officially taken the top spot for the value of its agricultural products in 2016, making Kern the top agricultural producer â&#x20AC;&#x201D; not only in the state, but in the nation. â&#x20AC;&#x153;This is just a testament to how integral agriculture is to Kern County and to all the hard-working individuals who contribute to its success, from the farmer to the fieldworker,â&#x20AC;? said Kern Agricultural Commissioner Glenn Fankhauser. Fankhauser released Kernâ&#x20AC;&#x2122;s annual crop report last week. It showed Kern had outpaced agricultural powerhouse Fresno County, but Tulare County, which often reaches the No. 1 spot, had not yet released its crop report. The numbers came out and they looked sweet for those in the local ag industry: Kern ....................................$7.19 Billion Tulare ..................................$6.37 Billion Fresno .................................$6.18 Billion
Fankhauser said huge percentage increases in the value of Kernâ&#x20AC;&#x2122;s pistachio and cherry crops helped with the countyâ&#x20AC;&#x2122;s overall increase â&#x20AC;&#x201D; even as both Tulare and Fresnoâ&#x20AC;&#x2122;s values took a tumble. Kern leads the state in pistachio and almond production. Its top-five commodities in 2016 were grapes and almonds â&#x20AC;&#x201D; each valued at over $1 billion â&#x20AC;&#x201D; citrus, pistachios and milk, which together made up more than 60 percent of the total value. But the pistachio crop was a come-from-behind hero, improving from 7th ranked in 2015 to 4th last year. More importantly, its total value increased 213 percent, from $245.1 million in 2015 to $769.2 last year. Cherries showed an even more dramatic leap from 19th to 9th place, although the total value of the crop is $105.8 million, a mere fraction of the value of the countyâ&#x20AC;&#x2122;s top crops. The total gross value of the countyâ&#x20AC;&#x2122; s agricultural products increased by 6 percent last year, nearly making up for a 9 percent dip in 2015. Kernâ&#x20AC;&#x2122;s 2015 crop value was approximately $6.8 billion. â&#x20AC;&#x153;This is a title we donâ&#x20AC;&#x2122;t take lightly as many ag-linked jobs thrive here as a result of the agricultural production,â&#x20AC;? the Kern County Farm Bureau said in a news release
Tuesday. â&#x20AC;&#x153;One in five jobs is directly or indirectly linked to the agricultural industry, from the farmers to the haulers to the farm workers.â&#x20AC;? Kern County agriculture is home to more than 300 commodities, a staggering variety of products, from apples to alfalfa, beets to blueberries, carrots to cantaloupe. Itâ&#x20AC;&#x2122;s important to remember, the farm bureau cautioned, that the dollar figures on the crop report are gross numbers, not direct earnings to growers. â&#x20AC;&#x153;In fact, we have seen an increased cost to growing food in recent years due to the cost of water, nitrate control measures, minimum wage increases, new overtime regulations, and cost of fuel,â&#x20AC;? the bureau said. This story originally published in the Sept. 20 edition of The Bakersfield Californian.
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Distribution
Entreprenuer
Continued from page 1
In Kern County, the boom can be seen in the Tejon Ranch Commerce Center, at the foot of the Grapevine, and the Wonderful Industrial Park in Shafter. These are two of the southern San Joaquin Valley’s most prominent developments for distribution centers. And officials with both developments are optimistic about the future. “We still have ample Diane Hardisty space available for growth,” said Barry Zoeller, Tejon’s vice president of corporate communications and investor relations. “For example, the 15.6 million square feet of entitled space still available at the Tejon Ranch Commerce Center is equal to ALL the industrial space that’s been developed in Valencia.” While Wonderful and Tejon have recently completed projects for tenant clients, they also are constructing “spec” buildings for potential future clients. Work is nearly completed in the Tejon center on a 480,000-square-foot state-of-the-art venture between Tejon and Majestic Reality, a national commercial and industrial developer. “We have strong interest from a user who wants to occupy half the building and has first right of refusal on the remaining half,” said Zoeller. In the Wonderful park, a 1-millionsquare-foot spec building is under construction. And like Tejon, potential business occupants have expressed “good interest in the building.” “There seems to be good demand, good interest,” said John Guinn, vice president at Wonderful Real Estate Development. “A lot of companies make decisions quickly. You have a marketing advantage if you have buildings ready to go. Speed has always been an issue.” In additional to being the home for centers that distribute industrial parts, the Tejon and Wonderful developments have long supported the retail industry. Motorists on Interstate 5 cannot miss the big IKEA sign on warehouses in the Tejon center, which also includes Famous Footwear’s distribution center. In Wonderful’s park, Target has been a longtime business, which was joined more recently by such companies as Ross Dress for Less, American Tire Distributors and Fed-Ex. MRC Global, a Houston-based distributor of pipes, valves and fittings, opened an 85,000-square-foot distribution center in the Wonderful park in June.
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Continued from Page 18
PHOTO COURTESY OF AARON MENDEZ
Distribution center at the Wonderful Industrial Park.
“In light of the growth of e-commerce, we’re seeing demand for buildings with taller ceilings,” said Zoeller. “That’s why the new [spec] building has a 36-foot clear height. Companies want to make the most efficient use of their floor space and having a taller ceiling allows them to install taller racks (like IKEA) or build a second level mezzanine (like Famous Footwear). In today’s e-commerce world, it’s all about efficiency.” Guinn agreed, noting the spec building under construction in the Wonderful park has 40-foot clear height, as opposed to the once common 32-foot. Zoeller said consumer demand for faster delivery also “is driving a new logistics model, where companies utilize both regional distribution centers and smaller ‘last-mile’ facilities, which are located closer to the final population base they’re serving.” “We see Tejon Ranch as the perfect location for both regional distribution centers that would serve last-mile facilities in northern Los Angeles and the southern San Joaquin Valley, as well as a great spot for last-mile facilities themselves,” said Zoeller. Guinn, who before joining the Wonderful team was Shafter’s city manager, noted the city’s intermodal rail facility, which includes plans for an “inland port,” helps bring goods to and from the Wonderful park. The intermodal facility created a city railroad, with railroad spurs from the main tracks of major railroads. “Although the energy sector downturn has affected our manifest rail business, the city moved forward with construction of the first 5-acre phase of a container yard/cross-dock facility adjacent to the city rail yard,” said Scott Hurlbert, Shafter’s current city manager. “Along with the long-term vision of an ‘inland port’ in Shafter, we also see opportunity for providing a loadmatching environment for the region. The concept is simple, but the details are complex — importers and exporters stand to benefit, so we continue work-
ing toward these goals.” There is no doubt that the “great e-commerce delivery race” is on. And it’s requiring more distribution centers, built closer to urban centers, and equipped with sophisticated sorting and handling systems. Before a package arrives at a customer’s door, it likely has been “touched” by the hands of a “picker” — a warehouse worker who picks, packs and ships the order. Increasingly, “pickers” are automatic or robotic systems. Although the trend is to automate, Guinn noted companies today still rely on a good supply of workers. And that is a selling point for locating a distribution center in Kern. “Ross has a lot of conveyor belts. In sections, Target is highly automated. But they continue to rely on ‘human effort,’” said Guinn. “The real challenge for companies is to get good quality labor. “Companies locating distribution centers in the Southern San Joaquin Valley can generally find a good labor supply,” said Guinn, noting that when retail distribution centers are experiencing their peak holiday shopping demand in the fall, work in Kern’s agriculture fields has declined, leaving workers available for temporary employment. “The distribution center managers at the Tejon Ranch Commerce Center are united in their praise of their employees,” said Zoeller. “They have a strong work ethic, which translates into greater productivity, and they’re extraordinarily stable, which has resulted in a very low turnover rate.” Zoeller predicted Kern will see a continued, rapid growth in distribution center development. “The tightness of the market in Los Angeles, and especially northern Los Angeles, where there are record-low vacancy rates and increasingly higher rents, will push growth north to Kern County. They’ve simply run out of room in northern Los Angeles,” Zoeller said.
sparked something in my taste buds that, as I grew older, gave me daily cravings.” But the current offerings found in stores left him wanting. “I started to notice some larger companies become more focused on production, rather than quality,” Tibbs said. “I began making my own beef jerky six year years ago because I was fed up with how today’s jerky tasted.” In making his own jerky, the Army veteran said he also was looking for a way to change his eating habits. “I wanted a healthy snack; I was 260 pounds,” said Tibbs, who now weighs 170 pounds. “I started out with a little dehydration unit and made my first batch. It tasted great.”
It’s not easy to begin a foodrelated business. Quality control and government requirements are complex and demanding. Competition is steep. And marketing and selling are challenging. That’s why Tibbs turned to the Small Business Development Center at California State University, Bakersfield, for help. Tibbs said that he initially gave samples to his co-workers, who helped him develop five flavors. The next year, he used his tax refund check to buy five larger dehydration units to produce about 500 pounds of jerky every two weeks. He now ships his jerky to 45 states and 12 countries. Tibbs Beef Jerky can be bought online at www. tibbsjerky.com, at farmers markets and in an increasing number of convenience stores. “There are 400 brands of jerky out there and each one has its uniqueness,” Tibbs said. “For the love of jerky, try my jerky. I’ve had so many people tell me it’s the best jerky they have ever tasted in their whole life.” Experienced SBDC consultants are providing Tibbs one-on-one advice in a variety of areas, including marketing, developing business plans and obtaining funding to expand the fledgling jerky company. 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, smallbusiness training and research. For more information, go to csub.edu/sbdc. Kelly Bearden is the director of the Small Business Development Center at California State University, Bakersfield.
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KERN BUSINESS JOURNAL
#goals Learn how the University of La Verne in Bakersfield makes a private university education affordable, accessible, and achievable for graduate and undergraduate adult learners.
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Introducing our new location at The Shops at River Walk! New and current programs in: â&#x20AC;˘ Education â&#x20AC;˘ Psychology â&#x20AC;˘ Information Technology â&#x20AC;˘ Criminology â&#x20AC;˘ Business â&#x20AC;˘ School Psychology
(661) 861-6800 Bakersfi eld@laverne.edu laverne.edu/bakersfield
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KERN BUSINESS JOURNAL
In Our Clients’ Words... We open every morning looking forward to the day — greeting our customers with a smile and a promise that they’ll receive the best butcherquality meats every time with service that says ‘thanks for your kindness and continued support of our local business.’ We got this same feeling and respect from Bolthouse Properties. They’ve made opening our second location in Seven Oaks a pleasure. We highly recommend them.
October / November 2017
COMING SOON TO
Attracting discerning customers for more than six decades, Wood-Dale Market listened to their clients on where they wanted a second location. Grand Island Village in Seven Oaks was a natural choice. As southwest customers begin to enjoy the new location, they can look forward to seeing both Israel, and his son Chris in the new southwest location. Conveniently located near the new Seven Oaks communities of Belcourt and Highgate and the rapidly expanding business and retail sectors at Seven Oaks Business Park. Wood-Dale is looking forward to an early 2018 opening.
Israel and Dolores Vasquez Owners Wood-Dale Market
COMMERCIAL t INDUSTRIAL t RESIDENTIAL 11601 Bolthouse Drive | Bakersfield, California 93311 661.323.4005 | bolthouseproperties.com