Innovation Is Good Cause for Optimism : Conversion Grants Point to Potential of Local Economy
It is difficult to find something positive to say about the economy of the San Fernando Valley and its environs. About 260 businesses here, in the Antelope Valley and neighboring Ventura County, for example, were forced into bankruptcy court between April and October. That’s an increase of 17% over the same period last year. Even good news is shadowed, it seems, by harsh realities and fears for the future.
Chatsworth-based Great Western Bank, for example, recently won a sealed-bid auction for the right to buy 119 branches with more than $4 billion in deposits from failed HomeFed Bank in San Diego. That will make it the third-largest financial institution in the state. But Great Western also lost $17.5 million in the third quarter, and 1,800 jobs may be lost due to payroll cuts, mostly from its Chatsworth headquarters.
In the same vein, Edwards Air Force Base in the high desert not only emerged unscathed from the Pentagon’s base closings and “downsizings,” it gained a test wing previously based at Wright Patterson Air Force Base in Dayton, Ohio. It was also disclosed this year, however, that Air Force Plant 42 in Palmdale, the Antelope Valley’s second-largest employer behind Edwards AFB, was the subject of a study to determine whether it should be closed.
Single-family homes sales in the San Fernando Valley rebounded to their highest levels in two years. Home sellers, however, continued to take it on the chin, with prices 11% lower that those posted a year earlier.
But there is some just plain good news. According to one survey, for example, the San Fernando Valley currently has the lowest office vacancy rate in Los Angeles County. That has been attributed to the tight rental market in the East Valley, where several entertainment companies are headquartered. The entertainment industry is one of the few prospering here. Most of those companies moved to the East Valley within in the past several years, and many firms that do business with them are moving to the area as well.
Another welcome event was President Clinton’s visit last weekend to Rockwell International’s Rocketdyne Division in Canoga Park. Rocketdyne received $2.6 million, in the latest round of coveted Technology Reinvestment Project Awards, to develop a portable monitor that can detect low concentrations of hazardous chemicals, enabling emergency response teams to quickly inspect any spills.
The awards are federal grants to finance the conversion of defense technology to peacetime uses, and they must be matched by a combination of state and private funds.
“We are tremendously excited, said Maribeth Hunt, a program manager for Rocketdyne, adding that the funds will cut the product’s development schedule by nearly half.
Calstart, a Burbank-based consortium dedicated to developing an advanced-vehicle industry, was the other Valley-based project to receive such an award. It got $3.4 million to help develop a turbine-powered engine that can burn various types of non-polluting fuels and can be used in hybrid cars powered by a combination of electricity and other clean fuels, such as natural gas.
The awards have been criticized as insignificant when compared to the losses of defense-related industries here, and Calstart officials were disappointed because they had applied for $42.4 million for 21 projects. But that request is equal to or more than four-fifths of what all of the California projects received in this round of grants, and California has done very well in the share of reinvestment money that has been handed out thus far.
That money will not make a huge difference, but the hope is that these projects will spur more job-producing innovation. That’s badly needed in an area that has been so dependent on the Defense Department.
