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Growth Monitor for Economic Development

Tracking the issues, programs, incentives, tax matters, and "lessons learned" affecting local economic development.
Economic Development Consultants for Tribes
Economic Development Consultants for Tribes

Our work as economic development consultants for tribes and other indigenous nations has expanded with additional services and new regions covered.

 

StoneCreek Partners’ client work with Native American tribes and pueblos, as well as Native Hawaiians, now includes Canadian First Nation tribes and organizations.   Over the years, StoneCreek Partners has also worked with indigenous nations in addition to those in North America, including those sovereign nations in the MENA region and the Pacific Rim.

 

The Covid-19 pandemic of 2020 has increased the interest in economic development plans that can reliably produce economic results – increased jobs, new investment, and enhanced quality of life.   And sooner than later.   Our economic sector analytics have an increasingly granular focus on real estate investment asset classes.    This is due to some types of investment now being in question, and relatively new asset classes commanding investor attention.

 

Our consulting focus is on projects that can be made to happen, and less on broad programmatic objectives.

 

Another focus is on the feasibility of specific projects.   As we act as economic development consultants for tribes we explore how development might occur in a particular region, focusing more on projects that can be made to happen, and less on broad programmatic objectives.   With specific projects identified, strategic partners can be identified and pursued.

 

Today’s economic development strategies can include all manner of visitor destination strategies, location-based entertainment, sports mega-complexes, life sciences projects, and other development can prosper within specific locations and markets.  Our experience with design management, development, facilities management, and with overall dealmaking and transactions allows us to take economic strategies through implementation.

 

What is a charrette? Charrettes explainedStoneCreek Partners is a business planning and development firm, with expertise that includes commercial real estate, hospitality, location-based entertainment, and direct-to-consumer technologies. StoneCreek Partners has provided economic development planning and program implementation support to Native American tribes and their sovereign development companies, as well as to similar city, county, and state organizations.

 

Our firm’s essential value to clients is our hands-on experience in designing, developing, and operating projects and businesses. StoneCreek Partners is led by co-founder Donald Bredberg and his substantial experience as an executive with The Irvine Company, NBCUniversal, and the Riyadh-based family office of Newfield Enterprises International.

 

The firm was first established in 1984 in Los Angeles, and is now headquartered in Nevada.  Our economic development consulting for tribal nations and other indigenous nations got started shortly after the firm’s founding.

 

Additional information about our economic development consulting practice is available at this link:

 

StoneCreek Partners – Economic Development Consultants

Comparing the Pfizer and Moderna Vaccines
Comparing the Pfizer and Moderna Vaccines

We found this interesting, an article comparing the Pfizer-BioNTech and Moderna vaccines by Mike Terry writing for BioSpace, the life sciences digital hub.  All of us are of course keen to know what may be coming with these Covid-19 vaccines.  The economic recovery and economic development we all hope for, depends upon the actual and perceived protections and treatments that are coming.

 

The best early news is the so-called “efficacy rate” … both vaccines are reporting 90%+ efficacy rates.   the CDC states that “vaccine efficacy/effectiveness (“VE”) is measured by calculating the risk of disease among vaccinated and unvaccinated persons and determining the percentage reduction in risk of disease among vaccinated persons relative to unvaccinated persons.

 

One big similarity in comparing the Pfizer and Moderna vaccines is that each use new messenger RNA technology.  RNA therapies that use mRNAs have been in the works prior to the Covid-19 outbreak, for possible use in personalized cancer vaccines and as vaccines for infectious diseases such as Zika virus.  However, as Mike Terry notes in his article, to-date, no therapeutic or vaccine using mRNA has been approved for use by the U.S. Food and Drug Administration (FDA).

 

to-date, no therapeutic or vaccine using mRNA has been approved for use by the U.S. Food and Drug Administration (FDA).

 

Both of these vaccine candidates require two doses about 28 days apart.  The Pfizer-BioNTech requires specialized refrigeration although the drug researcher and manufacturer Pfizer has designed its own packaging using dry ice that can be stored for weeks without the specialized freezers.

 

Pfizer and BioNTech have no development funding from the U.S. government, but do have a $1.95 billion agreement with the government to supply 100 million doses of the vaccine, with an option for another 500 million.   The Moderna vaccine trials were developed with financial and logistical support from the U.S. National institute of Allergy and Infectious Diseases (NIAID) and Operation Warp Speed, and could receive up to $2.45 billion in federal government funding.  And Moderna has a $1.5 billion deal to supply 100 million doses to the U.S. government.

 

The rapid progress from virus detection, sequencing information availability, and these vaccines being in their current state of testing, is a testament to the role of the burgeoning life sciences research and development industry in today’s connected global community.

 

The full article at BioSpace comparing the Pfizer and Moderna vaccines can be reviewed here:

 

Pfizer-BioNTech and Moderna’s Vaccines Are Leading the COVID-19 Race. How Do They Compare?

 

California’s Proposition 15 will be a Major Disrupter

SCP’s Economic Growth Monitor

 

California’s Proposition 15 will be a major disrupter to commercial and industrial real estate owners in California, if approved by the state’s voters on November 3.   Prop. 15 comes as other California and city initiatives for increasing taxes, are also up for voter approval in November.  A couple of these additional initiatives includes San Francisco’s Proposition I and the state’s AB 2088 that would establish 0.4% tax on wealth.

 

The ballot initiative is a major challenge to California’s historic Prop. 13 property tax measure approved by voters in 1978, which was later upheld on challenge in the U.S. Supreme Court.

 

The ballot proposition title reads:  “increases funding sources for public schools, community colleges, and local government services by changing tax assessment of commercial and industrial property.”   On the state’s voter guide website, the initiative is summarized in this way:  “Taxes such properties based on current market value, instead of purchase price. Fiscal Impact: Increased property taxes on commercial properties worth more than $3 million providing $6.5 billion to $11.5 billion in new funding to local governments and schools.”

 

As with other California ballot measures that would increase funding and spending, there is no safeguard that such increased taxes on commercial real estate owners would find its way to local government or local schools.

 

California’s proposition 15 will be a major disrupter in several ways.  First, commercial (shopping centers, office buildings, etc.) and industrial real estate owners would see a decrease in the cash flow and value of their properties.   This would mean a direct deleterious impact on the resale value of their properties.  Conceivably, some property owners with long-held properties may need to sell if their new property tax assessments prove to be onerous.

 

Second, for any commercial real estate held on a NNN (so-called triple net) basis, typically retail and restaurant tenants, this property tax increase would be directly passed along to such tenants as their responsibility.   Presumably, these retailers and restaurants would then attempt to increase their prices to consumers, an unintended consequence and example for how California’s proposition 15 will be a major disrupter.

 

 

California's Proposition 15 will be a Major Disrupter, if Approved

California’s Prop. 15 could be a major CRE disrupter if approved by voters in November.

 

ACE Act for conservation
Conservation Act Passes Congress, Now Heads to President’s Desk

SCP’s The Growth Monitor

 

In a bi-partisan vote, a next conservation act has passed the U.S. Senate.   The unanimous vote in the Senate pertains to America’s Conservation Enhancement Act, S. 3051 (the “ACE Act”), a package of natural resource management and conservation provisions.  The House of Representatives is expected to take up the legislation, and vote, as early as next week.

 

SCP Growth Monitor update on October 1 – the House of Representatives has approved the ACE Act by voice vote; now the legislation goes to the President’s desk for signing.

 

Consideration of the Ace Act follows passage in August 2020 of the Great American Outdoors Act, widely considered one of the landmark legislative achievements to protect America’s natural environment.

 

The legislation authorizes the National Fish Habitat Partnership, an endeavor that brings together local, state and federal partners to coordinate and conduct on-the-ground aquatic habitat restoration projects for the benefit of recreational fishing.   The ACE Act also reauthorizes and boosts funding for programs critical to the health of the Chesapeake Bay, the nation’s largest estuary and a critical nursery for sport fish throughout the Atlantic region.

 

As the bi-partisan Conservation Act passes Senate consideration, attention now focuses on regional benefit.  The ACE Act is expected to be a strong boost to recreational economic development in the region.  The Chesapeake Bay is the largest estuary in the U.S., and is also a critical sportfish nursery for the greater Atlantic region.

Truck Tonnage Declines in 2020
Truck Tonnage Declines in 2020, Through August

SCP’s The Economic Growth Monitor

 

Truck tonnage declines in 2020 included the fifth consecutive year-over-year decline in the U.S., through August 2020.   Freight transportation is a barometer of U.S. economic health, making monthly truck tonnage estimates a key indicator for local economic development officials.

 

Trucking represents an estimated 72.5% of tonnage carried by all modes.  According to American Trucking Associations, in 2019 trucks hauled 11.84 billion tons of freight.  The American Trucking Associations is the largest national trade association for the trucking industry.

 

Transport Topics reports on truck tonnage throughout the year.  Their most recent recap is available here: Tonnage Declines 8.9% Year-Over-Year in August

 

The American Trucking Associations’ press release about truck tonnage declines in 2020 is available here: Index 8.9% below August 2019.   According to the ATA, the apparent softness in truck tonnage was due to softness in the industrial and energy industries where truck loads are heavier, than any softness in consumer-related loads.   Fleets hauling for retailers reported strong freight volumes.  ATA calculates  U.S. tonnage volumes and index based on surveys from its membership and has been doing so since the 1970’s.

Edge computing is coming to you
Edge Computing is Coming to You Soon!

SCP’s Economic Growth Monitor

 

Edge computing is coming to you, an essential part of our world of data centers, Internet cloud and the Internet of things.  Since many local economic development professionals are interested in attracting major data center facilities, it is helpful to understand how these edge processing objectives may impact data centers and the rest of the connected data network.

 

In essence, edge computing is about distributed computing, delivering processing “horsepower” in low-latency situations as close as possible to where it is required.   Also, enterprise datasets are getting huge and there is also a desire to reduce data transport costs.  As a result, keeping more of collected data closer to its source simply makes economic and performance sense.

 

According to some industry sources, by 2025, 75% of generated data will be processed outside centralized data centers or the cloud.

 

Edge computing often involves data storage and processing with “edge devices.”  A simple example of an edge device is a router that connects public networks to the internet.  Or, in a finance setting, a smartphone or tablet becomes the edge device.    Edge devices become increasingly specific to particular edge requirements.  In healthcare, edge devices are increasingly deployed as wearable and/or implantable medical devices to support patient care.

 

Because this computer processing “at the edge” is implied as connected to data networks in the Cloud and in data centers, each edge device carries an implicit security risk.    While the interest in processing power at the edge increases, getting the overall system security design in place is a large open issue.

 

There are benefits to edge computing in most every industry today.    Network World joined with CIO, Computerworld, CSO, and InfoWorld, have prepared articles to explore “the edge” from five different perspectives, available here:  Edge computing: The next generation of innovation

 

real estate expert witness - Global Real Estate Consultants
Sovereign Wealth Funds Get Their Test in 2020, Aiding in Covid-19 Pandemic Relief

To be sure, sovereign wealth funds (“SWF’s”) have gotten their test so far, in 2020.  As the COVID-19 pandemic has decimated the global economy, country economic downturns have created possible calls for draws on SWF reserves.  As well, the economic troubles have also hit the investment returns of many of these SWF’s, reducing the projected (hoped for) enhancement of portfolio asset values.   Such a time.

 

Norway’s GPFG has reported a negative return (loss) of -3.4% for the first half of 2020, a loss of $21.3 billion.   Bahrain’s will draw $450 million from its FGRF sovereign fund to provide funds for the state’s general budget.   New Zealand’s Superannuation Fund managed to achieve a 1.73% return for the year ending June 30, 2020, although since the fund’s inception it has returned an impressive 9.63% per annum.  Iran is using its SWF funds to stabilize Tehran stock exchange.

 

Generally speaking, these SWF’s were formed over the years to capture current wealth for use by future generations.   A great many of the funds were literal monetization transfer methods, where a portion of national oil and gas revenue (wealth) has been transferred into a country SWF.  Investment from any particular SWF have first been intended to build these reserves for the benefit of those to come.

 

For 2020, the existence of these SWF’s has been a helpful resource to provide funds at an unusually critical time, to stabilize national economies.    Tapping into held sovereign funds for “rainy day” purposes was always a possibility, but not a welcomed eventuality.  Norway will withdraw a record $37.72 billion from its SWF to address Pandemic impacts to the nation’s budget, and intends asset sales as part of this withdrawal.  Indeed, sovereign wealth funds have had their test in 2020.

 

Looking forward to the balance of 2020, we shall see how the 2020 pandemic impacts new SWF formations, in Indonesia, Oman, Israel, Mozambique, and South Africa, among other nations.   Within the U.S. and Canada, our many indigenous sovereign Native / First Nations are also facing particular financial stress this year, with operating asset revenues significantly down and available reserves at risk.  In discussions about SWF’s, these sovereign Native / First Nation tribes and pueblos are often neglected.

 

SWF formation has seen significant activity over the past decade, with just under 100 new national SWF’s getting their start.

Sovereign Wealth Funds Get Their Test in 2020

 

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