February 7, 2011 - From the Dec/Jan, 2011 issue

San Bernardino County Recovery Challenged by Foreclosures

With a well documented reliance on the building industry, the Inland Empire has struggled throughout the recession. The challenge of fighting off the decaying forces of foreclosures and unemployment have been daunting for municipalities in the region. The county of San Bernardino, with a new leadership team that includes former employees of the city of Ontario Greg Devereaux and Mary Jane Olhasso, has adopted a grassroots approach to job training and workforce development as its solution. In the following TPR/MIR exclusive, Mary Jane Olhasso, the administrator of the Economic Development Agency of San Bernardino County, details the county's grassroots efforts and its strategic plan to move forward toward recovery.

Mary Jane Olhasso

MIR interviewed West Riverside Council of Government Executive Director Rick Bishop two years ago about the need to respond to up to 350,000 potential foreclosures in the Inland Empire. Share with our readers your job goals and responsibilities for transitioning the workforce and rebuilding the county's economy.

I've been with the county of San Bernardino for seven months. Prior to that I was in the city of Ontario, which is a significant portion of the county. It's the west end of the county. Greg Devereaux, the city manager of Ontario came over here as CEO, so I seized the opportunity to follow him. The benefit of working for the county in this position is the opportunity to provide workforce training programs and to assist businesses in the transition both, unfortunately, in downsizing and in recovery.

The task is enormous. We've got a population of 2 million and a workforce of 900,000. When you lay-over the unemployment rate of anywhere from 13 percent to nearly 20 percent, depending on where you are in the county, you see a significant amount of pain and suffering, from both the individual worker and businesses.

The response to that is very grassroots: hard work, getting your hands dirty and getting involved with businesses and individuals. Those who had lost their jobs had to be taken care of in our employment resource centers. We partnered with the state, of course, in unemployment, but also transitioned into an opportunity to register and receive assessment and training, if training was necessary, for different kinds of work. Globally people have said that we may be recovering, but the jobs that existed prior to the crash in a lot of cases don't exist, white collar or blue collar. Our workforce development team identified high-demand sectors. That includes logistics and manufacturing, health care, some aviation related positions, and green jobs.

There are specific training contracts that we have written both with our base level of funding through the Workforce Investment Act and with ARRA funding to provide additional training. In some cases, we're moving people into work in existing companies that still require staffing, and in some cases we are helping companies keep their workforce on board, rather than laying people off. We're looking at an integrated approach so that the same department within the county is helping the employee and the employer. That's the employee side.

When you shift to the employer side, you're working with an entrepreneur. California is primarily an entrepreneurial state. We have our share of Fortune 500 locations, but when it comes to headquarters, we have a very significant number of entrepreneurs. That said, we have to help them stay in business and weather the storm so that they can continue to, one, survive and, two, grow and employ people. Using ARRA funding and other relationships where we're building capacity within our staff, we are able to provide training for the entrepreneur.

We just had an event where we reviewed success stories with the County Board of Supervisors. Twenty entrepreneurs told their stories of survival and growth as a result of training and mentoring services that we provided through a consultant. That is the kind of grassroots, roll-up-your-sleeves kind of work that has been going on for a couple of years now.

If that is the county's grassroots approach, what is the strategic approach to rebuilding the economic competitiveness of San Bernardino and the Inland Empire? The LAEDC, for example, spent a year developing a strategic plan for economic development for Los Angeles county. Is there a similar effort in the Inland Empire?

The LAEDC is participating with the other five counties of Southern California with the Southern California Association of Governments in writing a strategic plan for all of Southern California. We have an economist who's been working on retainer, and we are interviewing our existing companies as well as the companies we intend to attract. If you look at real estate as the three legs of the stool, there is the developer, the investor, and the end user. We are interviewing all three legs of that stool to determine our strategic plan.

What has emerged as a rough cut of San Bernardino's opportunities for job and economic growth?

Our best is, of course, logistics. We're the global gateway for Southern California and, for that matter, North America, when you look at our proximity to the ports of L.A. and Long Beach and the Pacific Rim. Manufacturing is still alive and well, albeit it's the entrepreneurial side of manufacturing, not the massive factories that you'll find have moved offshore. Anything related to healthcare-research and development might happen on the coast, but we have an opportunity for manufacturing to happen here in San Bernardino County. We're moving forward, and we're not stopping.

I have relationships that I've built over the last decade with Fortune 500 companies, and we're being very strategic about our relationships. We have the footprint of those companies here in the county, and we're nurturing those relationships. We're making sure that if a corporation decides to optimize their portfolio, we're their location of choice.

What's in the county's toolbox to attract companies to locate in San Bernardino as opposed to other nearby counties or other regions in the United States?

If you look at the site selection criteria consistently affirmed by Area Development Magazine in their annual survey, or if you do your own survey-and I've done both-workforce is always number one and number three on the list. The quantity of the workforce is number one, and the quality is number three. Location, transportation, and infrastructure are number two. The sheer numbers along with the absolute value of workers here in the county, married with the training that already has taken place and what we can provide going forward, makes us extremely competitive. That's number one. Two, the proximity to the ports and the transportation infrastructure are second-to-none. And third, the icing on the cake: incentives, enterprise zone, foreign trade zone, tax sharing agreements-these are all available on a case-by-case basis or within the enterprise zone.

We're competitive when you look at the relationships that we provide. Most other jurisdictions throughout the world miss the relationship piece, and we have built these relationships over the last decade. We have a fairly new inventory of real estate, so most of our real estate has been built over the last 10-15 years, but in that period of time, we have driven home the fact that we understand that if the company is not open for business, making money, then we're not making money. Rather than worry about being regulatory, from a planning standpoint, we're doing it right the first time, but we're also going to solve problems. We're going to get out of the way, and we're going to make the projects happen. That's significant.


Why did you relocate from the city of Ontario to the county of San Bernardino? And, also address the role, if any, the Ontario Airport plays in any effort to revitalize the Inland Empire.

The transition from city to county has been very rewarding. The opportunities that I have to build the relationships are going to benefit the county overall. The massive land area and large population we have put us in front of 15 states. We're managing a fairly good-sized state, if you will. That's the big difference from Ontario, the sheer numbers. The thing that is consistent is that the population really cares about where they live. We're going through a visioning exercise right now, so that this very large county knows where it's going and understands what it is going forward. It's evident from the people who live here that they have very strong values for work, for family, and for quality of life. That's been very rewarding.

Ontario International Airport is the western regional hub for UPS. It is a 24/7 airport, and it is the only airport that has any significant room for growth. LAX, although it is modernizing to accommodate more passengers, is severely restricted by the settlement with the folks on the Westside.

It is critical that we gain local control so that we can reduce costs and make passenger service at Ontario Airport profitable again. It's clear from economic analysis that that can happen. I'm enthusiastically supporting local control, and I have been an advocate for it from the very beginning. If you look at an analysis of airports that are controlled by an authority as opposed to a city, as LAX is, the airport authorities are more successful. They are more nimble; they are more responsive to the needs of the airlines and the cargo carriers, like FedEx and UPS. I know that this will be resolved favorably over the long term because we really have to look at our window as being the next decade-where do we need to be? Two decades from now, where do we need to be?

Over the last year, there have been a number of press releases from former Governor Schwarzenegger's office about the siting and approval of concentrated solar farms in San Bernardino County. How will/do those projects factor into the county's economic revitalization strategy?

The majority of the solar farms are being placed in the unincorporated desert region of the county, what we call the first district. They are not job-generators after construction. There is a substantial investment there, but the number of jobs on an ongoing basis is very small. We have an opportunity for maintenance jobs and also the possibility of any kind of assembly or manufacturing relative to those parts and product line. That's what we're investigating now.

At this time of economic stress, both on unemployment and state, city, and county budgets, how are you able to fund the programs that you believe are needed out of the county?

We're very fortunate to have Workforce Investment Act funding. We have always been recognized by the Department of Labor for our practices-we have a very good team here and it was one of the reasons that I was excited to be a part of the county team. I always used the staff when I was in Ontario and find it extremely rewarding to work with such a high performing organization like we have here in the county.

If we speak together within a year, what, if anything, will be different about the county's economic progress?

We will be talking about recovery. I'm on the board for CoreNet Global. CoreNet is the home of the corporate real estate executive. Quarterly, I sit with the directors of real estate for Coca-Cola, Whirlpool, AT&T and others.

At the last board meeting, I said, "All right. Let me ask you guys. When do you see capital coming back? When are you going to start spending money?"

I asked them this because we know that corporations are sitting on a lot of cash right now. You look at the Wall Street Journal any day of the week and they're reporting it.

The general consensus among those organizations was that they will start investing again in 2012. I don't see investment coming back before that. This year we'll be talking about recovery and investment and getting ready for the next cycle.


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