What will 2010 hold for Lodi?
Real estate sales remain strong for homes priced moderately.
Costco is on track, and Home Depot may be coming, too.
More Downtown shops may open on Sundays.
Links to China are being forged, and could prove invaluable for Lodi's strong wine and tourist industry.
And Lodi's hometown bank continues to make loans and enjoy unusual stability.
Those are some of the insights from business leaders who converged Monday for a roundtable discussion moderated by Jordan Guinn, News-Sentinel business editor.
Following are the leaders and their key observations:
Nancy Beckman, president and CEO of Visit Lodi! Conference and Visitors Bureau
Q: What's your prediction for Lodi's tourism in 2010?
A: I expect this year to be very similar to last year. The hotels will remain relatively stable; I haven't heard them say they are expecting their numbers to drop. The wineries have done well and will continue to do well. I think you will even see wineries continuing to open.
I don't think anyone is expecting it to be an outrageously stellar year, but I do think the wineries will continue to flourish.
Our meeting and convention business will continue to stay stable as well. Last year, we increased our meeting and conference business over 2008.
Q: Tell us about the visit this week from Chinese representatives
A: We are hosting several Chinese VIPs, people from Lucky Horse, a wine conglomerate with distributors as well as a representative from the Shanghai Wine Expo and other dignitaries.
This was a joint venture by Visit Lodi!, the Lodi Chamber of Commerce and the Lodi-Woodbridge Winegrape Commission to put together this inbound mission to bring these people here with the interest to create a business relationship between these various entities and Lodi.
The possible payback is huge. If you just look on the tourism end of it, literally every state is fighting for the Chinese visitor because they spend more per capita than any other visitor to the United States. It's about building relationships. We've been working with Tie Zhang, president for the U.S.-China Business and Culture International Association. Chamber President and CEO Pat Patrick calls him the "Golden Bridge" to our Chinese guests. He has an office in China, and he's been instrumental in bringing this group in. As Patrick said, it's not something any of our groups could do individually, but working together, we have been able to nurture this relationship. They came into town Monday and they leave Thursday. They will see the Stockton Port today, and we have some dinners and wine tastings set up for them.
Jaime Watts, executive director, Downtown Lodi Business Partnership
Q: How is the process coming of getting Downtown merchants to be open on Sundays and advertising it?
A: We're looking at a "Staying Open Sunday" campaign. With the usage permit we have for the post office plaza, we are looking at doing some events with either live music or a DJ. In the spring we will bring the Stockton Ports out. We want to have an activity every Sunday in that area.
Also, we are putting together literature and decals for the businesses that are already open Sunday. We are hoping to get some momentum and it will catch on. Most of the restaurants and wine tastings are open; it's just (a matter of) getting the small boutiques and retail shops to stay open.
Q: What are some of the challenges with making this happen?
A: It's hard because Sundays are usually their only day off, and we are trying to be creative with surveys we are putting together and trying to see if they would rather be closed on a Tuesday or Wednesday instead of Sunday.
It's discouraging for a lot of merchants, because they will try it for a month and not see the results. It takes a least a year commitment, and that's a huge commitment, especially if it's been a few months and you aren't seeing the return. It's going to take a while to catch on because people don't even think to come Downtown on Sunday unless it's to eat or see a movie.
Melanie Pennino, president, Lodi Association of Realtors
Q: Are there any bright spots for Lodi's housing market?
A: There seems to be a bit of a stabilization. There aren't as many foreclosures, but there are a lot of short sales. The stabilizing is taking place in the lower price ranges, where there is a lot of competition. We are seeing multiple offers on things in the $100,000-$200,000 price range. It's not uncommon to have six to 10 offers on things priced well.
Inventory is down, which helps stabilize prices.
Q: Where is the market still struggling?
A: It is still difficult in the higher price ranges because there are no move-up buyers. There's no equity in the lower price range, so there is no way for them to move up because there is no money for them to move up.
There is nothing coming up for new houses. Nobody is building anything. From what I hear, nobody will be building anything for several years.
Q: When interest rates rise, how will it affect you?
A: It complicates the effort for the people in the lower price range because $50 difference on your payment is a big deal. It's the difference between qualifying and not qualifying.
Christa Steele, senior vice president, F&M Bank
Q: How is F&M staying competitive in 2010 and appealing to customers to remind them their money is safe?
A: The bank has been around for more than nine decades. What separates us from the national banks is that we are owned by 1,400 shareholders in the Central Valley. The executive and senior management is right here in Lodi. The decisions are made here.
We have always had a conservative philosophy, and I don't see that changing. I think that we made traditional loans to consumers and will continue to do so. We didn't get into subprime lending and we didn't do speculative financing on financing or construction.
Also, 40 percent of our portfolio is ag-related, which is really strong. We still have funds to lend. If it makes sense for the customer and the bank, we will loan all day long.
Q: Obviously, things are not perfect yet. But what can people who are looking for loans do to better their chances?
A: The economy is going to be tough, and we have to be prudent in our lending and how we approach market. They have to have a complete financial package. They need to have a good credit score, no bankruptcies or derogatory credit. They need to pay their bills on time and not be overly leveraged. Simply put: A qualified borrower has to be able to demonstrate their ability to repay the bank.
Dale Gillespie, RPM Company
Q: What's the outlook for commercial and industrial development in 2010?
A: With the exception of an anchor retail center such as Reynolds Ranch, it's going to be more of the same for 2010; which is generally not good. Retail, office and industrial rents are all down. Values are down considerably. The national retailers are starting to resume their expansion of number of units. A year-and-a-half ago, retailers were told to cut (their) expenses and stop adding new stores and hunker down for a while. Beginning four to six months ago, the stock market started indicating to national retailers that they should increase sales.
What you are starting to see is that national retailers such as Best Buy, who in August 2008 put a moratorium on opening new stores, are revising that stance. The healthier retailers are starting to go out and look for sites. That's the good news. The bad news is, the rents they are willing to pay are probably 40 percent or more off what they were paying before they stopped looking in late 2008.
Q: What about residential?
A: Virtually all developers, ourselves included, have dropped options that we had on development land. Was residential land for the most part. What remaining residential land we have, we have no plans for.
Q: Is the deal with Costco finalized?
A: Let me just say that until it totally closes escrow, it's never finalized. We are still under the assumption that they will be open prior to the end of calendar year 2010. Their construction period is less than four months.
Q: Any other deals on the horizon for Reynolds Ranch?
A: We have a tentative agreement with Home Depot. The nature of the beast with retail anchors is that they have outs until they close escrow. In the past, you wouldn't think of it or talk about it. Now, these large retailers — certainly not Costco — did back out of deals within 30 days of starting construction. It's a worthwhile caution to keep in mind … .
Q: Can Sacramento Street, with its convenient access to parking and the train station, be a place where lofts and residences are built?
A: To my understanding, most of the buildings on the block between Pine and Elm streets on Sacramento Street are made from unreinforced brick. In California, it's basically financially unfeasible to retrofit them. But I'm not advocating that we tear them down.
Just as valuable as having residences on Sacramento Street would be having residences on the south side of Lodi Avenue, within walking distance of Downtown.
Fran Aguilera, economic development director, San Joaquin County Enterprise Zone
Q: What can the Enterprise Zone offer Lodi in 2010?
A: What this is doing is retention and helping major industries stay in the game. There are major industries in Lodi that, without this, may not stay here. National companies look at their operating costs on a national basis, and California is not cheap to operate in, and we're not friendly from a regulatory standpoint.
The Enterprise Zone helps level the playing field. These companies can hire new workers and get tax credits. The tax credits are $37,000 per worker, and it offsets their state income tax. This is maybe the tipping point of keeping them in business. Even for small businesses, $37,000 in savings over five years is a big savings.
We're hoping for dramatic growth, which I think will come, but right now we view the Enterprise Zone as a business retention tool.
Q: What challenges are facing the Enterprise Zone?
A: It's coming under attack in both this year's and next year's budget. Rightfully, there is a lot of pressure to not cut programs for the elderly and the infirm. So the legislature looks at this and wants to go after business and take their tax breaks away. We are in a fight for our lives. I don't think there is an understanding that without business growth, hiring and employment, there are no social programs, because there is no money for anything.
Q: Isn't the Enterprise Zone a 15-year designation?
A: Yes, but the new Assembly speaker, John Perez, D-Los Angeles, has basically thrown down the gauntlet and said he wants to go after Enterprise Zone programs. We are on a crusade to say that cuts would hurt small, medium and large businesses.