California: Thousands of businesses disappear

The title doesn't match the news title, but the story is about more than property values (and declining property tax revenue).

www.mercurynews.com...

Business woes help drive historic plunge in Santa Clara County property values

By Denis C. Theriault
[email protected]
Posted: 07/01/2010 05:00:00 AM PDT
Updated: 07/01/2010 08:55:24 AM PDT

SACRAMENTO — The Great Recession continues to cast a deep shadow over Silicon Valley's economy, with new figures released by the Santa Clara County assessor's office today revealing the disturbing disappearance of thousands of businesses during the last year.

The report also confirmed a historic plunge in overall property values, with Santa Clara County's assessment roll for 2010-11 dropping about 2.4 percent, from $303.8 billion to $296.47 billion. Not counting a massive decline after Proposition 13 went into effect in 1978, this year's reduction is the largest since 1933 — in the early days of the Great Depression.

But while officials in Assessor Larry Stone's office were bracing for a steep drop in home values, as well as a modest reduction driven by the state's consumer price index, they were not expecting a third body blow: an "unheard of" contraction in commercial and business property.

In Santa Clara County, businesses with at least $5,000 in assets — from mom-and-pop shops to national chain stores to tech monoliths — are required to file an assessment claim with Stone's office. This year, the number of claims fell from 46,000 to 42,000. Although that's not a complete accounting of businesses in the county, officials see it as one of the most definitive benchmarks available. Numbers for previous years weren't available Wednesday. "With the larger companies, it's layoffs and reductions," said Pat Sausedo, vice president for public affairs at the San Jose Silicon Valley Chamber of Commerce. But "small- and medium-sized businesses disappear weekly. They just can't keep up."

Beyond that, many businesses are negotiating lower rents or moving into smaller spaces. And the value of what's known as "business personal property" — essentials such as computers, cubicle walls, construction equipment and even fixtures — dropped by 8 percent.

That's a particularly bad omen for the Silicon Valley school districts and governments that rely on property tax revenues to provide services: Business property has recently made up about 10 percent of Santa Clara County's assessment rolls, three times more than in an average county. So when businesses aren't growing, the valley feels the fallout more than most places. And redevelopment agencies, where many of those businesses are located, are feeling it especially hard.
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More at link...

So where are the coming jobs from? Not California business, as they're disappearing at the same time we hope they save us from record high unemployment rates. Santa Clara county - home of Silicon Valley has seen businesses decline from 46,000 to 42,000 (about 9%).

It would be interesting to see a chart of assessment filings over time mapped to employment rate.

I'm in a unique position to see what's happening at a number of shopping malls/centers here in Canada on a daily basis.

Some new developments (completed a year ago) are having a tough time finding very many tenants (businesses). The busiest malls are holding their own pretty well, but at less trafficked places I've seen a 5-10% decline as stores close in the last year and these units remain empty.

Most of the stores that close sell goods that depend on discretionary spending ... clearly, people can not afford to buy things they don't really need.

not to point out the obvious, but this happens usually when an economic adjustment is necessary...

basically many businesses opened up that were driven by the high GDP and Business yield coming out of the Mortgage/Tech economic era.

Unless they planned or are recession proof businesses they will usually go to the way side. its the nature of our economy...

Fox

reply to post by FoxStriker
Yes, but...if you believe this administration, we're in a recovery. Which means that economic fundamentals have been fixed, property values are rising, new businesses are forming, and employers are hiring.

Oh wait, we can't believe this administration.

lol.... we write our own money, which of course is based on consumer belief rather than an actual gold and silver standard...

At this point our greatest hope is that Americans stay stupid and don't wake up

Imagine what would happen if they realize how bad things really are.

They might start watching the news or even worse.... stop watching American Idol.

Fox

reply to post by dbriefed


This is why we need a path to citizenship, as part of comprehensive immigration reform, so that we can properly serve the economic migrants who do the jobs that Americans don't want to do.

Originally posted by nine-eyed-eel
reply to post by dbriefed

 

This is why we need a path to citizenship, as part of comprehensive immigration reform, so that we can properly serve the economic migrants who do the jobs that Americans don't want to do.

Yes we hear that old chestnut in the UK too but these jobs no one wants to do must include doctors and lawyers plus highly paid jobs for local councils.

reply to post by LieBuster


I don't see how a politician can go on TV and say that stuff with a straight face...and how reporters can nod as if those words were appropriate...
HA HA HA HA HA...

reply to post by nine-eyed-eel



Americans may end up having to do these job....although this idea is somewhat overrated. The real problem is a. they dont want to work for those wages thought they may have to b. employers dont want to pay insurance, comp, tax on the american worker in these jobs that use a lot of out-labor. Not taking sides here but the american worker is just to expensive for say landscaping.

reply to post by Logarock


I've been a landscaper thanks.

Give me another one, hee-hee...

reply to post by nine-eyed-eel


Yea man. I am not a stranger. Use a pick and shovel all the time.

Originally posted by nine-eyed-eel
reply to post by dbriefed

 

This is why we need a path to citizenship, as part of comprehensive immigration reform, so that we can properly serve the economic migrants who do the jobs that Americans don't want to do.

WOW.

Why is it that people who want imigration reform

expect the imigrants to take crap jobs????

What an arrogant and opressive attitude.

-------------------------------------------------------------------

Why do you disrespect imigrants so much

that you expect them to take

jobs that their FELLOW Americans don't want??????

This clearly does not economicly serve the imigrants

as you call it. What a joke on the imigrants.

BUT, it will serve greedy people

with superiority complexes who deny human rights

and equality.

----------------------------------------------------------------------
WHY WOULD YOU THINK LESS OF A GROUP OF PEOPLE???

BECAUSE OF THEIR NATIONALITY, PERHAPS???????

PLEASE REMEMBER THAT IMIGRANTS ARE AMERICANS

AND ARE EQUAL TO YOU AND I. OUR BROTHERS AND SISTERS

YOUR POST CERTAINLY DOES NOT ACKNOWLEDE

EQUALITY OR COMPASION FOR IMIGRANTS.
___________________________________________________

ALL PEOPLE OF ALL COUNTIRES ARE EQUAL

AND HAVE THE HUMAN RIGHT

TO BE TREATED WITH RESPECT AND COMPASSION

NOT TO TAKE THE CRAP THAT YOU WOULDN'T TAKE

reply to post by illusions


Actually I'm saying I want the lousy job...

I really do.

Originally posted by illusions
ALL PEOPLE OF ALL COUNTIRES ARE EQUAL

AND HAVE THE HUMAN RIGHT

TO BE TREATED WITH RESPECT AND COMPASSION

NOT TO TAKE THE CRAP THAT YOU WOULDN'T TAKE

Yea but they have to respect our laws also.

I, and many other American citizens, have taken enough crap already.

Most manufacturing that was in Calif has moved overseas or to states like Texas or Nevada over the last 30 years.

It became obvious 30 years ago that the state of Calif was anti business and anti manufacturing with taxes, fees and environmental regulation that did little to protect the environment but were draconian. repetitive. and a source of revenue for numerous states agencies that did little.
The governing bodies of these state agencies started there own fiefdoms to cover there jobs and part of this was fees and permits that overlapped numerous other state agencies.

Case in point a company in the Calif desert building a solar power plant on a old farm that went out of business due to high water pumping cost.
first is to get the permit to build the plant. and the state had RULES.
The solar power company had to water down there construction site to control dust
The solar power company was first forced to drill a new well to replace the agricultural well on the property. even though there was nothing wrong with the well other then it was a AG well.
Then they had to get a permit to use the water for commercial use. pay a fee, and test the water weekly by a lab approved by the agency.
Then they had to get permits for the water trucks, have them inspected and pay a fee even though they never left the property on public roads.
Then because the water from the trucks was discharged on the ground the water from the trucks had to be tested twice weekly for contaminants by a different lab approved by this agency.
Then they had to test the air around the property to make sure no dust was kicked up over the site. another agency, more paper work and fees.

That is 6 state agencies with 6 forms and testing result forms all different.
And that still does not count county or federal agencies and there fees, forms. and rules that may conflict with the state.

And this is all before the first piece of the power plant is installed.

Now the same type power plant was built by the a company in Nevada
They went through one state agency with one state form that all the agencies one the state use.
No forms permits or fees to use water from a well on the property for dust control.
The water was tested one a month and same water did not have to be retested before it could be put back on the ground.
Because the water trucks never left the property they did not have any testing, Inspections other then safety. No license plates, no fees.

They payed one fee to the state.

Guess how many new businesses nevada will have.
and how many will build in Nevada instead of Calif.

Oh and on top of that nevada does not have a state income tax.
Calif has a high state income tax.

reply to post by ANNED


Wow, sounds like the bureaucratic wall the Feds use to keep Gulf state people from protecting their shores.

reply to post by nine-eyed-eel


I have worked as a janitor, dishwasher and untrained groundskeeper, and I want to say that it is the fault of the greedy corporate scum at the top that these jobs do not pay a livable wage. Who are these suits to make millions while the majority of the people they employ are working much harder than them but struggling to get by? This issue needs to be separated from the immigration issue, unless you want the situation to stay the mess that it is now.

Not surprising, as one of those businesses was mine. My product still goes to all my Californian customers, so it matters little to me where I set up shop. Who loses? California.

ETA: I moved my employees, too. As good as my new state is for my bottom line, my workers also feel a financial windfall.

[edit on 5-7-2010 by tamusan]

Originally posted by wutone

Originally posted by illusions
ALL PEOPLE OF ALL COUNTIRES ARE EQUAL

AND HAVE THE HUMAN RIGHT

TO BE TREATED WITH RESPECT AND COMPASSION

NOT TO TAKE THE CRAP THAT YOU WOULDN'T TAKE

Yea but they have to respect our laws also.

I, and many other American citizens, have taken enough crap already.

I agree with you.

People who sneak into our country are not imigrants.
Calling them such is an insult to our imigrants.


My point is that

I always see the imigration reform people using the rational

that we need imigrants to take the crap jobs that are not worth having

and that Americans do not want.

What skewed logic.

Imigrations reformists who pretend that they "care" about imigrants

and then say we need imigrants to take the crap worthless jobs.


The economy can not be fixed with imigration reform.