News from Yuba-Sutter Economic Development Corporation

May 2012

Stevia First Plans Sweetener Plant, Refinery in Sutter

By Ben van der Meer/ADvandermeer

Online:

In what's a sweet deal in more ways than one, the maker of a no-calorie, natural sweetener is leasing 1,000 acres on the defunct Southridge Golf Course in Sutter County.

Stevia First Corp., which has a research and development center and office in Yuba City, will eventually have both its fields for the stevia plant and the refinery for it a the property near the community of Sutter at the edge of the Sutter Buttes. Company Chief Executive Officer Robert Brooke said while it was too soon to discuss when the property might be developed, or how many people it might employ, the entire site will be the hub for a growing product.

"It's a market that's real exciting," he said of stevia, a shrub-like plant native to Paraguay and only approved for consumer use in the United States four years ago.

The refined plant can be used as a sweetener in place of sugar or artificial products as aspartame Brooke said, making it popular among such groups as diabetics. But big corporations have jumped on board as well, with popular beverages such as versions of Sprite, Tropicana and vitaminwater using stevia, he said.

"This facility will be the first of its kind, vertically intergrated around Stevia in the Unite States," Brooke said. The product has been popular in Japan for 30 years, but the majortiy of stevia fields are found in China because of ideal growing conditions.

In 1982, Sutter County voters approved a ballot measure designating the land where Stevia First is locating for just such a purpose. The property is on what's referred to as the Food Processing, Agriculture, Recreation Combining District, known as FPARC.

Doug Libby, principal planner for Sutter County, said property south of South Butte Road is designated for processing and agricultural/industrial uses, while north of the road is more directed to be open space.

"If there's some farming in the open space, certainly that's an allowable use," Libby said, though he added the county hasn't received any permit applications for an industrial development in that area.

In an email, Brynda Stranix, chief operating officer for the Yuba-Sutter Economic Development Corporation, said Stevia's deal is exciting and a good fit.

"Not only will it grow to provide a number of jobs, the first-tier operation is exactly what we need for Sutter County," she said on Friday.

Brooke said projections show the market for stevia growing from a few hundred million dollars to more than a billion in a few years.

However, the company's filing in February with the Securities and Exchange Commission, notes under risk factors, "Our independent auditors have expressed substantial doubt about our ability to continue as a going concern and we will need to raise substantial additional capital to maintain our business." It also noted, "We are not currently profitable and may never become profitable."

Opened in 1991, Southridge Golf Course had problems through much of its history before it closed two years ago and its owners filed for bankruptcy.

Contact Ben van der Meer at bvandermeer@appealdemocrat.com or 749-4786. Find him on Facebook at /ADbvandermeer or on Twitter at @ADbvandermeer.

Calpine Executes Contracts for Sutter Energy Center with California Utilities

Calpine Corporation announced that it has executed Resource Adequacy contracts with California's three investor-owned utilities; Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas and Electric Company for the purchase of resource adequacy from the Sutter Energy Center (Sutter) through December 31, 2012. The contracts will enable Sutter to continue in operation as the California Public Utilities Commission moves forward in developing long-term capacity procurement policies to ensure modern, existing resources remain available to meet California's future power demands.

The contracts are being submitted for approval to the Commission pursuant to Resolution E-4471, in which the Commission directed the Utilities to enter into contract negotiations with Calpine for the purpose of keeping the Sutter plant online through 2012. The resolution requires the utilities to submit a Tier 2 Advice letter attaching the contracts, which filings were made on May 4, 2012.

Located near Yuba City, California, Sutter is one of the state's newest and cleanest natural gas-fired power plants. This modern, efficient, air cooled, combined-cycle power generation facility has the capacity to produce up to 578 megawatts of electricity. It commenced commercial operation in 2001 and is a vital contributor to the local Sacramento Valley economy, generating more than $2.6 million in annual property tax revenue and employing 26 local residents with an annual payroll of approximately $3 million.

Sutter received strong support throughout this process from many elected officials, including United States Congressman John Garamendi, California State Senator Doug LaMalfa and State Assemblyman Jim Nielson, as well as representatives of the Yuba City, Sutter and Yuba County business community, a number of whom provided testimony at Commission public meetings outlining how critical the continued operation of Sutter Energy Center is to the local economy. Yuba-Sutter Economic Development Corporation was happy to provide assistance to this vital business in our community.

What's Happening?

YSEDC Assists Local Business - Gophers Beware!

For the past six years, Dan Schweitzer, inventor and owner of Western Planting Solutions, a Yuba County-based business has been developing and perfecting the Grow Master Gopher basket, a safe alternative to protect young plants from gophers and other rodents.

This innovative product dramatically improves plant survival rates at an affordable cost. The stainless steel mesh is specially designed to protect the root ball of a plant while remaining user and environmentally friendly. The patent-pending design allows for installation as simple as putting on a sock. Improving plant survival rates makes it a huge hit with the horticulture, agriculture and forestry industries as well as homeowners, nurseries and landscapers.

After years of research, development and testing this product with the U.S. Forest Service, local fruit and nut producers, home owners, landscape designers and nurseries, Western Planting Solutions is now aggressively marketing the product throughout California and Western Nevada.

Assistance from the Small Business Development Center to formulate the business plan, receive QuickBooks training, develop financial projections and build the company's website helped secure a business loan through Yuba-Sutter Economic Development Corporation to provide marketing, working capital and inventory he needed to launch the business to the next level.

"Working with YSEDC and SBDC has been of great value to me in moving the business in the right direction," says Dan Schweitzer. "Without the support of these two organizations, it might very well have taken a number of years longer to achieve the current level of sales and marketing."

Dan anticipates moving to larger, dedicated commercial space that will allow for increased production, expanded warehousing of raw and finished products and hiring of employees. For more information, visit Western Planting Solutions at www.westernplantingsolutions.com.

CEDS at Work!

The lack of infrastructure serving industrial- zoned properties has greatly hindered the Yuba-Sutter region's ability to attract new business as well as provide areas of expansion for existing businesses. The need for infrastructure enhancement has been at the forefront of all economic development activities and is seen as the key to providing job creation centers and ultimately strengthening the region's economy.

Annually, Yuba-Sutter Economic Development Corporation (YSEDC) updates the region's Comprehensive Economic Development Strategy (CEDS) which is designed to focus the public and private sectors in the creation of an economic roadmap to diversify and to strengthen the regional economy. CEDS analyzes the Yuba-Sutter economy and serves as a guide for establishing regional goals and objectives, developing and implementing a regional plan of action, and identifying investment priorities and funding sources.

The Highway 65 Rancho Road project area in south Yuba County was identified as an "Employment Village" site for potential job creation in Yuba County's recently updated General Plan and is integral to the economic vitality of the county and therefore has been included as one of Yuba County's top CEDS goals since.

YSEDC was able to identify and apply for an Economic Development Administration (EDA) Economic Adjustment Grant for Yuba County to take the initial step in the planning and development of the area. Much interest in the area has occurred in recent years and been lost due to lack of infrastructure. Manufacturing industries that include aerospace, wood products, composites, bio-fuels and solar have not considered the area beyond the initial stages of inquiry as the area was not sufficiently served. This opportunity loss was one of crucial employment development in essential manufacturing and other industry sectors that have been in severe decline in the last decade further eroding Yuba County and the region's economic diversity.

Public works projects are eligible for EDA funding only if they are included in a current, EDA-approved Comprehensive Economic Development Strategy. The Yuba-Sutter CEDS also includes the projects of Sutter County, Live Oak, Marysville and Wheatland in addition to those of Yuba County.

The grant request was for half the $103,000 cost to develop a technical master plan for the Rancho Road project area that encompasses the nearly 5,000 acres of property within the Employment Village area. At completion, the plan would provide a layout of the roadway water, wastewater and storm drainage infrastructure needed to transform the area into an economic catalyst.

YSEDC was recently awarded the EDA grant and Yuba County will begin the development of the Technical Master Plan. The project will involve County and Special District officials and entail data collection, site research and analysis and result in the development of master plan guidelines that will guide the next steps of design and construction of the needed infrastructure.

Following completion of the plan, the development of the Rancho Road Highway 65 project area can progress. Yuba County's 2030 General Plan identifies the project area will provide 17,700 to 23,700 jobs in the future. This first step can impact an area with chronic high unemployment by stimulating the local economy with short-term commercial construction and long-term expansion and diversification of the region's industry sectors.

The New York Times

The Incredible Shrinking Payroll

By Catherine Rampell

The key to sustained job growth may be helping more start-ups get off the ground.

That's one possible reading of a new Labor Department report, which finds that the average number of employees per company has been steadily decreasing over the last decade. If each company employs fewer and fewer workers, then more companies are needed in order just to keep employment flat, let alone rising.

The average size of an establishment - which is a single physical location where business is conducted rose during the tech bubble, going from 16.7 employees in March 1994 to 17.5 in March 2000. The economy was booming, and employers were scooping up new employees like ice cream.

The number of workers per establishment then plunged during the 2001 recession, and continued slipping through the mid-2000s expansion and Great Recession. As of 2011, there were 15.7 employees per physical office location.

So what explains this slide? This shrinking has occurred in almost all industries, so it can only partly be explained by a change in the types of businesses that the economy comprises, the report says.

The report's researchers also investigated whether technological advances might be encouraging parent companies to open up more offices in more places, splitting the existing work force up among more locations but still retaining the same number of employees over all. That explains part of the phenomenon, but not all of it. The biggest factor, it seems, is the age of establishments.

In the last decade, the report finds, new establishments have been starting smaller and then staying smaller than their predecessors. In the 1990s, the typical start-up opened shop with 7.6 workers; in 2001, 6.8 workers; and in 2011, just 4.7 workers. As older firms die out, these newer businesses represent a larger and larger fraction of the job market.

It's not entirely clear why new companies are starting out so much leaner than they used to. Presumably they are largely helped by new telecommunications technologies, which allow employees to manage more of their administrative and back-office work on their own (like shared calendars) or to outsource it.

Whatever the cause, if this trend of small start-ups persists, it will mean that many more businesses will need to be created to absorb both new workers and those left behind by the bigger, older companies that are going out of business.