Is the California High-Speed Rail Coming Around the Corner?

AP Business news reported on Governor Swarzenegger’s trip to China promoting California products and tourism, but a main point on this overseas trip is to investigate high-speed rail technology and financing. The New York Times also reported in early April of this year about China negotiations with Sacramento to use their high speed rail technology to build the rail-line from Sacramento ultimately to San Diego. The proposed rail would initially be built from Los Angeles to Anaheim and San Francisco to San Jose and then expand from their (see cahighspeedrail.ca.gov). A future rail stop will also be in Palmdale Ca. In the AP News article the Governor was to travel from Shanghai to Nanjing using China’s speed train. Currently China has the world’s longest high-speed rail network spanning 4300 miles, and can run up to 220 miles per hour.

The Governor is also planning stops in Japan and South Korea to experience their high speed rail systems as they are also suitors to build the California Rail System. Interesting though South Korea and China learned the technology from France and Germany which have also presented proposals to Sacramento along with Italy and Spain. The Europeans are skeptical of Chinese technology, since its European grown, so there maybe some licensing issues. There may also be labor issues as Chinese labor laws do not favor the laborer. Yet, the Chinese have preliminarily agreed to abide by all US labor laws. The NY Times indicates the cooperation agreement would entail eighty percent of the components to come from American suppliers and assemble to be done in the US. A potential site would be the previous auto plant in Fremont Ca. thereby keeping most of the jobs in the State. The largest obstacle may be financing as the project is expected to cost $46 billion, but Chinese Banks may also be the solution. Up to $8 billion has already been pledged by the Federal Government as part of the Recovery Act. The Chinese have offered to also help further finance the project. Can the US afford such a large contribution in technology and financing from a foreign power? Can the State afford not to with 12 % unemployment? Would travelers actually take the train? There are many real issues that can derail this project, yet numerous governments are also fully behind it.

Many investors in Lancaster and Palmdale have been looking for signs of growth, so the potential for a rail line with the expansion of Solar and Wind technology in the Valley does show current and future expansion. The State Department of Finance is also expecting population growth from 2010-2015 to increase by 2 million and potentially an additional 18 million by 2040 with Southern California getting most of this growth. There looks to be speculative land opportunities still on the horizon, and Antelope Valley looks to benefit.

Centennial Touts High Profile Jobs and a Self Sustainable Town in Their Development Plan

Centennial’s recent newsletter indicated they plan to provide 1.3 jobs per household, or approximately 30,000 in all, over its 20-year development period. They indicated that their plan will ultimately cut down on the overall environmental impact of the area by using green technology. In their job creation they hope to attract higher educated professionals and higher wage earners in the scientific, and technical industries, but also to have opportunities for all skill levels.
Centennial commissioned LAEDC ( Los Angeles Economic Development Corporation)
to assist them in locating the best business prospects for the area in the coming years. The LAEDC indicated that construction would be the second highest target job sector. Centennial plans to need approximately 30,000 construction workers just to build the project over the 20 year building process. They are also hoping to attract a large secondary education institution, and a medical facility. In addition, due to the low prices of land in the Antelope Valley they hope to attract manufacturing businesses in the electronic fields. Low priced land and nearby services and facilities with a higher educated workforce should spurn education, healthcare and manufacturing development. Green technology is rapidly growing in Lancaster, Palmdale and Kern Counties with Wind and Solar, so it is already beginning. They expect a multiplier effect where one job produces the need for more jobs and services like retail, community services, and ideally these wage earners will wish to live in Centennial with likely 70,000 jobs created in the area over time. The nearby Tejon Industrial Complex where Hwy 5 and Hwy 99 meet at the bottom of the Grapevine employs one thousand people at IKEA, Oneida, and Famous Footwear, so they have history and success in their past developments.
It looks like Centennial has a real plan to build this upscale city. They intend to complete it slowly and methodically unlike other nearby city planners. We believe that as the development progresses the vacant land in this area will become more desirable and increase in price. We will keep you informed here to the progress in this area and land investment opportunities that arise. This is just another sign that the Antelope Valley shows good long term investment opportunities.

Significant Ecological Land Areas of Los Angeles Counties, Antelope Valley, To Buy Or Not to Buy SEA Land?

The Antelope Valley and Surrounding areas of Santa Clarita, and parts of Kern County have significant ecological areas (SEA) which were designated in the county's 1980 General Plan. They are intended to protect wildlife migration corridors and valuable habitat for native plants, birds and mammals. Los Angeles County officials define a significant ecological area as an important habitat for native plants and animals or fragile land or water area. Some of the plants and animals in these areas are the Joshua Tree Woodland, alkali scrub, scrub oak, creosote, California poppy, wildflower grasslands, ephemeral streams, burrowing owls, ground squirrels, desert tortoise, bobcats and coyotes.

The name, number and location of these areas near Antelope Valley are San Francisquito Cyn. (19) north of Valencia endangered fish Santa Clara River(23) Santa Clarita Valley endangered fish Edwards AFB (47) north of Lancaster endangered plants Big Rock Wash (48) Antelope Valley wildlife habitat Little Rock Wash (49) near Palmdale wildlife habitat Rosamond Lake (50) N.E. of Lancaster alkali sink Saddleback Butte east of Lancaster wildlife refuge, State Park (51) desert wildflowers Alpine Butte (52) east of Palmdale wildlife, wildflowers Lovejoy Butte (53) east of Palmdale wildlife habitat Piute Butte (54) east of Palmdale birds, wildlife Desert-Montane east of Palmdale wildlife habitat Transect (55) Ritter Ridge (56) west of Palmdale Joshua trees Fairmont & Antelope west of Lancaster refuge for birds buttes (57) of prey Portal Ridge/Liebre near Gorman diverse plant life Mountain (58) Tehachapi Foothills (59) near Gorman wildflowers Joshua Tree Woodland (60) N.W. of Lancaster Joshua trees Kentucky Springs (61) south of Palmdale Great Basin sage Lyon Cyn (63) Valencia woodland habitat Valley Oaks Savannah (64) Valencia valley oak habitat

Growth in these unincorporated SEA areas of the Antelope Valley is limited but not prohibited. There is currently development in these areas, and homes can be built in the Joshua Tree Woodlands, but you will not see urban sprawl like there is in Lancaster and Palmdale, Ca. The SEA areas are guided by the Los Angeles County Antelope Valley Area Plan. The Area Plan designates each property for a particular land use, such as rural residential, urban residential, commercial, or agriculture. In addition, the Area Plan includes a movement plan for trails, bike routes and highways, provisions for the protection of environmentally sensitive areas, and specific policies for each town in the unincorporated area. There was a proposal to preserve over 200,000 acres of Eastern and Western Antelope Valley as a Significant Ecological Zone. That plan earlier this decade would have limited the development of any home in an SEA area to one home per ten acres. Those targeted areas included the Joshua Tree Woodlands and most of the Eastern Antelope Valley from the city limits of Lancaster and Palmdale to San Bernardino County. That proposal was not adopted. Recently there have been a number of Solar Facilities which have gotten approval at of near SEA Zones, so there has been development in or near these areas. In addition a recreational racetrack is nearing approval near the poppy reserve.

Land investors who own land in these areas or those who plan to invest should consider the positives and negatives of any investment in a SEA zone as development is restricted. Some of these areas could be mitigation areas, where the Bureau of Land Management would approve a developer to develop in another area if they buy a SEA zoned area and donate its use and protection to the park service. This mitigation exchange is quite common. Investment due diligence is necessary when making a long term investment.

Mojave Solar Project Gets Initial Green Light With Assistance From Rosamond and California City

The Antelope Valley Press recently reported a potential approval of a $950 million Solar Plant in Mojave Ca. The plant is proposed on 2000 acres off of Hwy 14. The California Energy Commission has given a 30 day period for public opinion on the proposed project. The issue that may halt the project is its need for fourteen hundred acres of water per year, as water is scarce in the desert. The proposal from the developer is to use treated water and or sewage water from the two local communities of Rosamond and California City. E-Solar has proposed a similar solution for their facility in Lancaster, Ca. E-Solar proposes to use runoff and treated water and further naturally treat it on 100 acres in Fox Field. The Mojave Solar project requires water because it relies on a solar thermal design by using mirrors to capture and reflect the suns raze to a network of tubes. Liquid in the tubes is heated thus in turn powers a steam turbine that produces electricity. The AVPress indicates that officials in the city of Rosamond and California City have agreed to supply the treated water.

This project will be at least the fifth new solar power project in the Antelope Valley in the last two years, clearly making the valley a developing green zone. The project appears to have the approval of the Energy Committee, and local city officials. It is miles from any real development, so there will likely not be much residential disapproval. Once the project gets the green light then it would take two years to construct and would employ just over fifty full time employees. It will likely be the only development for tens of miles.

This type of land currently sells for below two thousand an acre showing that the developer has been cost conscious. All of this land is simply desert land and zoned rural residential and agricultural use, but there is nothing that grows in this type of environment. Without solar this area would have very slow growth. We are encouraged by the development, but we wouldn’t recommend buying this land so far north of California City. It would be better to be closer to a growing area like Rosamond or Lancaster Ca.

Mega Wind Project Set To Get Underway Near Mojave Desert

The Los Angeles Times reported this week that the Alta Wind Energy Center has broken ground. The reason this project is considered mega is how it started and the overall plan. It is considered the largest wind power project in the US today. The project has had multiple ownership changes since 2000, the original planner went bankrupt and it has not been well received by the local community. The developer Terra-Gen Power has since taken over the project and they have begun breaking ground for the 290 turbines over the nine thousand acres along the Tehachapi Pass. They have also secured over a billion in funding, and are set to receive turbines from Vestas-American Wind Technology. The plan is to provide power to six hundred thousand homes to Southern California Edison customers as they are compelled to meet the State goal of supplying thirty three percent of energy from renewable sources by 2020.

The next faze will involve another 300 turbines by 2015 with potential wind blades being nearly a football field long. The entire project will dwarf the existing landscape of turbines along the pass. Most of this area is farm land along Hwy 58 tucked away among the mountains. Also most of the land is being leased for this project providing an income source and allowing future cattle grazing for farmers.

This type of land in the past sold for less than five hundred an acre not long ago. It was considered unusable or only suitable for agricultural use. It demonstrates that long term land investment can be a patient and lucrative endeavor. There is still an abundance of available vacant land in Kern County and Los Angeles County that is prime for industrial uses like Wind Energy Projects. Many wind tests and planning has been completed over the years, which verifies this area as a prime wind energy location. In this case the permitting process took three years and the project had numerous environment hurdles to overcome. In the end the Alta project will begin.

The 1031 Exchange Process Taken Step by Step

1. You will need to set up an exchange account with an authorized 1031 exchange firm. The 1031 account has to be opened before the close of escrow on the property being sold. It can be done in a rush, but it is best to have this process planned in advance with the escrow company.

2. Write up the 1031 Exchange terminology in the sales contract or escrow instructions. The appropriate 1031 language should be added to the sales contract or escrow instructions for the property being sold. The exchange company can draw up the proper language.

3. Execute the exchange agreement with the escrow company and exchange firm with the necessary signatures and documents.

4. A like kind replacement property must be located within forty five days. A like kind property essentially means real estate for real estate. This like kind property must be located within forty five days per the IRS requirement. Once the replacement property has been identified then the sale and escrow must be completed within six months.

5. Forward the 45 day identification letter. This identification letter has to be submitted within forty five days, and the replacement property must be located and identified. This is typically the most difficult part since you need to secure the acquisition of a second property within this six week period.

6. Forward funds for deposits, this can be done from a 1031 exchange account. There is typically a form from the 1031 exchange company. It is also possible for the deposit to come from your personal account with a reimbursement later.

7. Then you must complete the execution of the escrow documents from both parties on your replacement property, and fund the purchase with your prior closed escrow funds. If the replacement property requires a loan, or it is an income property then other steps maybe needed. Thus identifying an experienced 1031 firm will assist in more complicated exchanges. Also additional funds may be needed if the replacement property has higher value then the prior sold property. Again the 1031 exchange firm can assist with these additional steps.

Solar Power Company Gets Approval to Implement Its Development Plan on Rural Residential Los Angeles County Land

A rectangular shaped parcel of just over 200 acres at 100th Street West and Ave H has won preliminary approval for solar development by the City of Lancaster planning commission. TA High Desert LLC (Tuusso Energy) plans to construct of a 20 megawatt solar photovoltaic electric generation facility on rural residential zoned land in Los Angeles County. This land has been typically vacant land or farm land, but the green energy economy has changed the future for rural Los Angeles land.
The location is designated NU (Non-Urban Residential) by the General Plan and is zoned RR 2.5 (Rural Residential 2.5 one dwelling unit per 2.5 acres), and this site is currently unused. This proposed project would operate year round with a production of up to 20 megawatts of renewable electric power during daytime hours. Tuusso Energy has a 20 year agreement with Southern California Edison to supply electricity generated by the proposed project. The project needs to clear a few environmental, biological, and mitigation steps.
The environmental review documents have disclosed no significant adverse impacts resulting from the proposed project after mitigation measures have been applied.
The photovoltaic panels and trackers are silent and low profile of six feet to eight feet depending on the position of the sun, so visual impact would be minimal. In order to further reduce any impacts, Tuusso Energy would install a line of trees along Avenue I and H, 100th Street West, and 97th Street West that would provide additional screening of the site. Additionally, two biological resource surveys were conducted for the location which found approximately 160 acres of potential foraging habitat within 10 miles of a hawk’s nest, thus the removal of the 200 acres of potential foraging habitat would be minimal. Also, mitigation measures are required to ensure that impacts to biological resources remain less than significant. Once these mitigation measures are taken the board found that the potential impacts to any special status species would be reduced. They also indicated that the projects construction and materials will not pose any environmental hazard to the local community.
This project appears to have met all the necessary requirements for implementation, and it was done in under a year. The landscape of Antelope Valley has been rapidly changing, and this exercise shows the potential for profits outside of typically residential building can be found in the valley as the State moves to green energy.