NRF: Holiday retail sales rise 4.1%, beating expectations

January 12, 2012 | By Katherine Field Boccaccio

Washington, D.C. -- The National Retail Federation reported Thursday that holiday sales edged NRF forecasts, rising 4.1% to $471.5 billion for the period.

NRF predicted 3.8% growth. Results exclude automobiles, gas stations and restaurants.

"The right mix of strong promotions, lean inventories and an emphasis on value put retailers in the perfect position to end the year on a high note," said NRF president and CEO Matthew Shay. “A better-than-expected holiday season is welcome news for an economic recovery that continues to be sluggish, and demonstrates retail’s powerful role as an engine of growth.”

Commerce Department December retail sales results released Thursday show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 0.1% seasonally adjusted over November and a strong 6.2% unadjusted year-over-year.

“In a matchup between the final two months of 2011 November clearly wins, but in the end retailers’ promotions struck the right chord for budget-focused holiday shoppers,” said NRF chief economist Jack Kleinhenz. “Though we are seeing evidence that the economy still has a critical hold on consumers’ purchase decisions, this strength in spending could continue into 2012.”

By category:

• Sales at clothing and clothing accessories stores increased 0.7% seasonally adjusted over November and a very strong 7.9% unadjusted year-over-year;
• Sporting goods, hobby, book and music stores sales increased 0.4% seasonally adjusted month-to-month and 3.1% unadjusted year-over-year;
• Electronics stores sales decreased 3.9% seasonally adjusted from the previous month and declined 0.5% unadjusted year-over-year; and
• Sales at furniture and home furnishings stores increased 1% seasonally adjusted from November and a solid 5.7% unadjusted year-over-year.

Thirty-four states saw their jobless rate decline in March, one of the most broad-based improvements since the economic recovery began.  The only exception was May 2010, when temporary hiring for the 2010 Census led to a drop in the unemployment rate for 39 states.  Jobless rates were unchanged in March for nine states and the District of Columbia, while only seven states saw an increase in their unemployment rates.  Overall, these latest trends indicate the laying of a solid foundation for a sustained economic recovery. 

Fueled by a booming oil and gas industry, North Dakota continued to lead the way in March with a paltry unemployment rate of just 3.6 percent.  This marked the 33rd consecutive month in which North Dakota had the nation’s lowest unemployment rate, and the whopping 280th consecutive month of jobless rates below 5 percent. 

Other states in the nation’s midsection had jobless rates well below the national average in March, including Nebraska (4.2 percent), South Dakota (4.9 percent), Iowa (6.1 percent), Oklahoma (6.1 percent), Wyoming (6.2 percent), Minnesota (6.6 percent) and Kansas (6.8 percent). 

Meanwhile, the New England states of New Hampshire (5.2 percent) and Vermont (5.4 percent) registered the lowest jobless rates among states east of the Mississippi River. 

Led by Michigan, states in the Rust Belt saw the sharpest declines in their unemployment rates in recent months.  After soaring to a nationwide-high of 14.1 percent in September 2009, Michigan’s jobless rate fell nearly four percentage points to a level of 10.3 percent in March.  During the last 12 months alone, Illinois (-2.2 percent), Indiana (-2.1 percent) and Ohio (-1.6 percent) also saw substantial declines in their unemployment rates.

On the flip side, jobless rates in some of the states hit hardest by the recession remain stubbornly high.  Nevada’s unemployment rate stood at 13.2 percent in March, the state’s 18th consecutive month with the distinction of the nation’s highest jobless rate.  California (12.0 percent), Florida (11.1 percent) and Rhode Island (11.0 percent) also had jobless rates well above the national average in March.

State Unemployment Rates March 2011

Source: Bureau of Labor Statistics; figures are seasonally-adjusted

Sales at luxury stores leaped 10.1 percent year on year for February, while wholesale clubs jumped 7.7 percent. Even with fuel sales excluded, wholesale clubs rose 4.7 percent.

“The breadth and the strength of the sales gain in February was encouraging as more retailers and retail segments participated in the improvement,” said Michael P. Niemira, ICSC’s chief economist and director of research. “This widespread improvement is on the heels of improving labor markets, broader improving economic conditions, and the reduction in payroll tax — all of which are more than offsetting the potentially negative drag of high fuel and food prices on consumer mind-sets.”

ICSC is projecting that March sales will be flat or up by 2 percent at most, year on year, attributable to an Easter calendar shift that is likely to hinder sales. The holiday, which fell on April 4 last year, falls on April 24 this year. The organization expects April sales, however, to rise a healthy 5 percent year on year.

Source: Shopping Centers Today (SCT), March 4, 2011

   SBA   News Release:  Important news from the SBA

PRESS OFFICE               

Release Date: February 17, 2011

Contact: David J. Hall  (202) 205-6697

Release Number: 11-15 FRESNO

Internet Address: http://www.sba.gov/news

SBA Launches Temporary Program for Commercial Real Estate Refinancing

Agency will begin accepting refinancing applications Feb. 28 for
small businesses facing maturing mortgages, balloon payments

WASHINGTON, D.C. - Small businesses facing maturity of commercial mortgages or balloon payments before Dec. 31, 2012, may be able to refinance their mortgage debt with a 504 loan from the U.S. Small Business Administration under a new, temporary program announced today.

The new refinancing loan is structured like SBA's traditional 504, with borrowers committing at least 10 percent equity and working with third-party lending institutions and SBA-approved Certified Development Companies in the standard 50 percent/40 percent split. A key feature of the new program is that it does not require an expansion of the business in order to qualify.

SBA will begin accepting refinancing applications on Feb. 28. The program, authorized under the Small Business Jobs Act, will be in effect through Sept. 27, 2012.

"The economic downturn of recent years and the declining value of real estate have had a significant, negative impact on many small businesses with mortgages maturing within the next few years," said SBA Administrator Karen Mills. "As a result, even small businesses that are performing well and making their payments on time could face foreclosure because of the difficulties they face in refinancing and restructuring their mortgage debt. This temporary program is another tool SBA can provide to help these small businesses remain viable and protect jobs."

The SBA initially will open the program to businesses with immediate need due to impending balloon payments before Dec. 31, 2012.  SBA will revisit the program later and may open it to businesses with balloon payments due after that date or those that can demonstrate strong need in other ways.

"We are making this initial restriction to make sure our funding goes first to small businesses with the most need," said Steve Smits, SBA Associate Administrator of Capital Access.

Borrowers will be able to refinance up to 90 percent of the current appraised property value or 100 percent of the outstanding mortgage, whichever is lower, plus eligible refinancing costs.  Loan proceeds may not be used for other business expenses. Existing 504 projects and government-guaranteed loans are not eligible to be refinanced.

-- more -

SBA Release 11-14. Page 2Š

Congress authorized SBA to approve up to $15 billion in loans under this program ($7.5 billion in both fiscal 2011 and 2012).  Together with the first mortgage, this temporary program will provide up to $33.8 billion of total project financing.  Additional fees charged to the borrower will cover the cost of this refinancing program and as a result no subsidy will be needed.  The program is expected to benefit as many as 20,000 businesses.

SBA's traditional 504 loan program is a long-term financing tool, designed to encourage economic development within a community. A 504 loan provides small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.

Typically, a 504 project includes three elements: a loan (or first mortgage) secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a second mortgage secured with a junior lien from an SBA Certified Development Company (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business borrower.

# # #

Melende Ward
U.S. Small Business Administration
Public Affairs Specialist
Administrative Officer 
SBDC Project Officer
Tel:     (559) 487-5791, ext. 2709
Fax:    (559) 487-5636
eFax:  (202) 481-4525

For over 15 years the Washington Post and ABC News have tracked the Consumer Comfort Index (CCI).  During that time, the US consumer has been negative for about two-thirds of the time.  As you can see from the following link and graph, the US consumer has been in a funk, basically, since September 11, 2001, with the exception of a minor pause in 2006 when housing prices peaked. 

Washington Post-ABC News Consumer Comfort Index Survey

 This is not a very interesting view of the US consumer.  They are certainly very negative.  The only times when the index was positive were:

• ·         April 1986 to August 1986             (April – IBM unveils its first laptop computer/Oct- Ronald Reagan signed HR 3838, the landmark tax-reform bill of 1986)

• ·         April 1997 to September 2001     (April – Tech boom/August -  9/11)

• ·         November 2006 to December 2006          (Nov - Democrats took control of both the House of Representatives and the Senate/Peak of the Housing Boom)

Looks like it takes extraordinary boom times for the US consumer to feel positive!  No wonder the media likes to sell negative news.

 Background on survey*:

The index is based on three core questions (see below). These questions ask respondents to rate the condition of the national economy, the state of their personal finances and whether now is a good time to purchase things. Margin of sampling error for the results of each of the component questions is plus or minus 3 percentage points.

A more complete explanation of the metholodogy is online here. Questions about the CCI can be addressed to polls@washpost.com.

Consumer Comfort Index Questions and Net Response Scales for Current Week

Q: Would you describe the state of the nation's economy these days as excellent, good, not so good, or poor?

             Net Pos.*   Excel.    Good    Net Neg.     Not-So-Good    Poor

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

12/30/07        31         4        27        69            44          25

Q: Would you describe the state of your own personal finances these days as excellent, good, not so good, or poor?

             Net Pos.    Excel.    Good    Net Neg.     Not-So-Good    Poor

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

12/30/07       57          8        49        43            30          13

Q: Considering the cost of things today and your own personal finances, would you say now is an excellent time, a good time, not so good a time, or a poor time to buy the things you want and need?

             Net Pos.    Excel.    Good    Net Neg.     Not-So-Good    Poor

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

12/30/07        32         3        29        68           45           23

* Key: "Net Pos.," short for "Net Positive," combines the two positive response categories ("excellent" and "good"). "Net Neg.," short for "Net Negative," combines the two negative response categories ("poor" and "not-so-good").

*Source: http://www.washingtonpost.com/wp-srv/business/interactives/consumercomfort/consumercomfort.html

NEWS RELEASE

The Salinas Valley Chamber of Commerce recognizes JNM Company, Commercial Real Estate, as our member of the month for September 2010.  John McCormack, Principal of JNM Company, has been an active member of the Chamber since 2005. Recently, John, in his role as a committee-member of SPARC, identified an opportunity to compete for an Innovation Hub (iHUB) designation sponsored by the Governor’s Office of Economic Development(GoED). The purpose of the iHub initiative is to improve the state's national and global competitiveness by stimulating partnerships, economic development, and job creation around specific research clusters through state-designated iHubs. John spearheaded SPARC’s efforts to organize local interests as partners which led to the July 22 submittal of a proposal to GoED for the Salinas Valley Agricultural iHUB.

The Grower-Shipper Association (GSA) had been working with Mayor Donohue on Ag-tech issues and economic development so the GSA took on the role of iHUB Coordinator. With the endorsement of the GSA, John was able to help market the value of the iHUB concept and enroll numerous entities as partners in the SVAg iHUB.

In addition to the GSA and SPARC, these partners include the UC Division of Agriculture and Natural resources, CSUMB, Hartnell College, the County of Monterey, the City of Salinas, two SBDCs ( CSUMB and Central Coast), Salinas Valley Chamber of Commerce, Agriculture and Land-Based Training Assoc. (ALBA), CHISPA and the Clinica de Salud del Valle de Salinas. Many other groups including the USDA Office of Technology Transfer and the Marina Technology Center wrote letters formally endorsing the proposal

Under the formal designation by GoED of the Salinas Valley as an agricultural technology center will further enhance our world reputation as a leader in agricultural innovation and technology. This initiative has the potential of leveraging federal, state and local assets producing business growth and bringing ag-tech research and jobs to our area.

The JNM Company is a full-service commercial real estate company for the Central Coast of California.  Offerings include: sales, leasing and buyer-broker representation.  Commercial properties include retail, office, industrial, apartment complexes, shopping centers, owner/user and land for commercial or residential development.

NEWS RELEASE

 On July 22nd the Salinas Valley iHub application was submitted to the Governor's Office of Economic Development (GoED) for their second round competition.  As of April 2010 there were 9 of 17 applications accepted under the first round.  The Salinas Valley iHub effort was lead by Grower Shippers Association (GSA)emphasizing the strong cluster of agriculture innovation that has lead the nation and the world.

Partners

GSA is the lead, with partners including: University of California, Division of Agriculture and Natural Resources, California State University, Monterey Bay, Hartnell Community College, Monterey County, City of Salinas, Small Business Development Centers of CSUMB and the Central Coast, Salinas Planning and Research Corporation (SPARC), Salinas Valley Chamber of Commerce, Agriculture and Land-Based Training Association (ALBA), CHISPA, Clínica de Salud del Valle de Salinas, and Clínica de Salud del Valle de Salinas.

Our “Creds”

·         Our region is responsible for leading research, food production, patent technology, commercialization, education and training specifically for:

o   Food safety

o   Bio-terrorism

o   Traceability

o   Nutrition policy and public health

o   Packaging

o   Film technology (for product protection)

o   Potential for “Farm”-acology (medical applications)

o   Seed technology

o   Hydrology and water conservation

o   Farm equipment technology

o   Pre-harvest technology

o   Organic farm transitioning

·         Salinas Valley region makes a perfect Agriculture iHub location because we have:

o   A critical mass of specialty growers and shippers;

o   A concentration of industry leaders;

o   A concentration of skilled labor force;

o   Long-term relationships with UC Div. of Agriculture & Natural Resources, USDA and FDA;

o   We are leaders in Food Safety policy;

The Proposal

·         The Salinas Valley Agriculture iHUB focus will be to enhance the role of the Salinas Valley region as the leader in “fresh” agriculture production, research and technology, and to provide long-term growth for high value jobs; agriculture-based technology and commercialization; and to promote its roles as the international agriculture knowledge center based in the Salinas Valley.

·         Salinas Valley Agriculture iHUB is designed to address critical and foreseeable challenges to agriculture cluster growth and sustainability, with application to a much broader market, including:

o   Producing more with less water;

o   Reducing energy use in production and delivery to the market and development of alternative energy sources;

o   Reducing packaging costs;

o   Reducing environmental impact of crop inputs;

o   Maintaining a healthy and stable workforce/workplace;

o   Producing, processing, storing, and transporting produce free from contamination; and

o   Transitioning to biodegradable packaging material.

Our Goals Include

o   Increase of capital and investment for research, start-ups, equity, and venture;

o   Growth and suitability of post-secondary education and training

o   Number of new permanent jobs created including decrease in share that is transient employment;

o   Business and Economic growth;

o   Increase in number of patents, technology transfer, and commercialization;

o   Community education and engagement in the leading regional industry;

o   Developing a favorable policy environment.

Importance to Community

·         Salinas Valley region is the source of 80% of the fresh produce production in North America. Companies based in the Salinas Valley have operations in Monterey, San Benito, Santa Cruz, Ventura, and Imperial Counties, plus southwest Arizona, Florida and three states in Mexico.

·         This request, if funded, will bring new jobs and businesses into our community and strengthen our top economic engine, agriculture.

The Competitive Environment

·         The Governor’s office of Economic Development received 8 applications from throughout the state.

·         They expect they will make decisions by mid-August.

According to a recent Commerce Department report, the US economy shifted into a higher gear in the second quarter of this year. Our gross domestic product (GDP) increased at a 3.3% annual rate. (The GDP measures the value of all goods and services produced within the U.S.) Economists had predicted 1.9% growth in the GDP and were surprised by the additional growth of 2.7%.

How does that growth relate to real estate? Existing home sales rose 3.1% in July, the highest level in five months. Lawrence Yun, National Association of Realtors (NAR) Chief Economist, expects home prices in some regions to increase even more in the near future. “Sales have picked up significantly in several Florida and California markets.” NAR President Richard Gaylord attributes this to the recently enacted housing stimulus package and predicts a sustained sales uptrend in the months ahead.

Salinas Valley Enterprise Zone

Tax Incentives

            An information session at the Salinas Valley Chamber of Commerce put on by The California Credits Group, LLC (http://www.ccg.com) was the initial step in educating the public in the newly formed Salinas Valley Enterprise Zone (SVEZ).  The presentation by David Finley (CGC) outlined the advantages of the up and coming SVEZ.  CGC was formed in 2002 by John Simpson, a former partner at Deloitte & Touche, LLP, and has specialized in California enterprise zone consulting in the 39 enterprise zones located throughout the state.  The closest of these enterprise zones is situated in Watsonville, and current legislation allows for 42 of such zones in California (http://www.caez.org/index.html). 

            The Salinas Valley Enterprise Zone, which stretches from Commercial/Industrial/Office/Retail properties in Salinas to King City, provides businesses with several tax credits, including a sales and use tax credits as well as a hiring credits.  The sales and use tax credit pertains to the tax paid on qualified equipment purchases that:

• Manufacture, process, fabricate, or assemble a product
• Produce renewable energy resources
• Control air or water pollution
• Data processing and communication equipment

The most significant advantage for SVEZ businesses are the hiring credits.  Businesses that partake in the hiring credit program can receive a tax credit of up to $37,440 for each qualified employee hired after the designation date of the SVEZ.  The anticipated certification date of the SVEZ is projected to be September 2008.  In order to qualify, the employee must satisfy one of the following qualifying criteria at the date of hire:

• Resident of a targeted employment area (TEA)
• Ex-offender
• Veterans
• Dislocated Workers
• Benefit Recipients
• Federal Supplemental Security Income
• Temporary Assistance for Needy Families
• Food Stamps
• State and local general assistance
• Economically Disadvantaged
• Based on other program requirements
• Member of a targeted group under federal WOTC
• Eligible registrant under GAIN or CalWorks
• Eligible for services under the JTPA or WIA
• Native American
• Disabled 

Important facts regarding the hiring credit program:

• Tax credit will only be redeemed for a percentage of wages paid up to 150% of the minimum wage (California minimum wage is currently $8, thus credit up to $12)
• Annual Tests: 
• 90% of annual work time must be directly related to the SVEZ business
• 50% of annual work time performed within an EZ
• Designation of the residences under the TEA is currently delayed until the end of the year.  The credit will continue to work even if the employee moves residences after being hired. 
• The amount of tax credit is calculated over a 5-year period (50%, 40%, 30%, 20%, 10%) 

            CGC is very enthusiastic about the SVEZ and encourages businesses to consult with them in order to more effectively process their applications for tax credits.  Other potential consulting firms such as Romo & Associates, Inc., have offices in Modesto and Los Angeles and plan to open an office in Salinas (http://www.romoassociates.com).  Peggy Maslowski, of the One-Stop Career Center of Monterey located in Salinas, is enthused by the opportunities that emerge for her to provide certified employment records and available workers to employers free of charge, paid with tax dollars (https://www.onestopmonterey.org). 

            Be alert in the months to come for more information regarding the Salinas Valley Enterprise Zone and the impact it creates in the county.  Please contact us for opportunities to expand your business to the SVEZ.  We have new projects coming forward in 2009 and 2010 at the Madison Business Park, Boronda Meadows Mixed Use Business Center and Harden Ag-Industrial Business Park. Take advantage of these great tax saving programs.

Ten months from completing their Entitlement Process, Jeff Fortin and NESTech Management Group Land Holdings, LLC are looking forward to breaking ground on their Boronda Meadows project in Q1 of 2010.  With a project site of approximately 58 acres, the plan includes such elements as the development of a commercial/residential mixed use area with a downtown feel, collaboration with the City of Salinas for the construction of an adjacent city park and provision for residential housing types and densities, including affordable units.  All the while, the project allocates approximately 43 acres of open space including 13 acres of new recreational facilities.  The centerpiece of Boronda Meadows will be the neighborhood retail shops, services, business offices and residential opportunities creating a “new urbanism” sensibility. 

Included in the plans are a four story, 50,000 square foot executive office building, as well as 72,000 square feet of mixed-use retail, commercial/office, which will create a central business core. Along with the advantages of centralizing the community, the Boronda Meadows project also seeks to create 1,250 construction jobs as well as 700 permanent jobs.  The management team has partnered with CHISPA, a local organization whose mission is to improve the quality of life through affordable residential ownership.  As a result of this partnership, Jeff Fortin was encouraged to announce that 40% of the new residences will be dedicated to affordable and workforce housing, far exceeding county requirements.  As an owner-tenant in the property, NESTech will be an important member of the community for years to come.  

            JNM Company is the exclusive leasing agent for this project. Call now for pre-leasing and get in on the ground floor of this very enticing Boronda Meadows project. 

John McCormack

Noah McCormack

JNM Company- Commercial Real Estate