Market Trends & Indicators

The City of Vernon And Its Industries

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city-of-vernon-aerial1

The City of Vernon is the smallest among the cities of Los Angeles County when ranked by geographic area or population. The city’s economic impact, however, is far larger than one might expect. Indeed, as one of Los Angeles County’s “industrial cities” – along with the Cities of Commerce and Industry – Vernon is a vital economic center.

Given its industrial profile, Vernon plays its biggest role in the Food Manufacturing area. Vernon-based food product companies employ almost 10,700 workers, more than 15% of the Los Angeles County total for this group. Vernon also plays an important role in the region’s Fashion–Apparel and Textile Design/Manufacturing/ Wholesale industry cluster, with more than 11,200 employees or 10.66% of the L.A. County total.

Other regional industry clusters in which Vernon plays a large role include Furniture and Home Furnishings (with an employment share of 5.53%), Fabricated Metal Products and Industrial Machinery (with 3.4%), Toys (with 2.4%), Auto Parts (also 2.4%), and Wholesale Trade and Logistics (with nearly 2%).

Vernon, due to its historic role as a meat packing center, has long been home to a variety of animal waste processing and rendering industries. Rendering, for those who don’t know, is a process that converts waste animal tissue into stable, value-added materials such as lard, tallow or bone meal. Rendering can refer to any processing of animal byproducts into more useful materials, or more narrowly to the rendering of whole animal fatty tissue into purified fats.

Sources: City of Vernon, California Employment Development Department (QCEW data series), LAEDC.

Market Trends & Indicators

Labor Market Update – Continued Gloom Along with Other Indicators

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USA-IMMIGRATION/AMERICANAPPARELThe Bureau of Labor Statistics released its latest U.S. Labor Market Report on Friday, covering the U.S. employment situation in December, and the news was depressing.  Total nonfarm employment fell by -524,000 jobs in December, and the job losses in October and September were revised down to -584,000 jobs and -423,000 jobs respectively.  In percentage terms, employment has declined by -1.12% in the last three months.  This was the biggest three-month decline since mid 1980 and before that, the first three months of 1975 (Both years saw severe recessions).

Leading Economic Indicators

The manufacturing and construction sectors continued to shrink, with job counts plunging by -791,000 jobs and -632,000 jobs respectively compared to December 2007.  In manufacturing, about 46% of the total job losses came in just four sectors:  motor vehicles & parts (-162,000 jobs and counting), furniture manufacturing (-71,000 jobs), wood products (-76,000 jobs), and textiles & apparel (-56,000 jobs).

Labor market conditions have deteriorated significantly in recent months, and the damage is spreading rapidly.  About 55% of the jobs lost during 2008 were in manufacturing and construction.  However, that share has been dropping recently, as jobs are disappearing in almost all sectors of private industry (except health services, private education, and mining).  The nation’s unemployment rate hit bottom in March, 2007 at 4.4%, when 6.7 million workers were jobless.  By last month, the number of workers without a job had grown to 11.1 million, an increase of 4.4 million unemployed.  The nation’s labor markets are quite troubled, and more bad news is likely in the next few months.

Although these data are countrywide, the Southern California and Los Angeles economies are not unlike them.  These leading indicators are likely an omen of decline for the local warehousing and manufacturing industries and the real estate they occupy.

Note

East L.A. – Aspires to Incorporate

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Map East Los Angeles highlighting public facilities

There have been three previous attempts at incorporation in East Los Angeles in 1961, 1963 and 1974. The name of the proposed city is the City of East Los Angeles. The community is 7.5 square miles (4,783 acres) in size. The community is bounded by the cities of Los Angeles, Commerce, Monterey Park, and Montebello. There were 126,054 residents in East Los Angeles, according to the 2000 Census.  There are 4,783 acres in East Los Angeles, 164 acres of which are industrial zoned land (375 parcels).

The manufacturing sector makes up 11 percent of East Los Angeles jobs.  Ten of the largest employers are manufacturers of products ranging from metals, brushes and adhesives to tortillas and ice cream.  Food-related manufacturing is more concentrated in East Los Angeles than in the County as a whole.

Top property owners by assessed value include the Roman Catholic Archbishop of Los Angeles, California Water Service Company, AltaMed Health Services, Telacu Development, and Humboldt Creamery.  Major industrial zoned streets include Noakes St, Union Pacific Ave., Calzona St., Los Palos St., Indiana St., Gage Ave., Bonnie Beach Place in the southern section.  In the northern section, known as City Terrace, major streets include Medford St., Fishburn Ave., Worth St., Marianna Ave., Fowler St., Whiteside St., Valley Blvd.,  and Knowles Ave.

Deal File, Food Industry

Real Mex Food Expands Food Processing Plant

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Real Mex Foods expanded food processing plant in Vernon, CaliforniaReal Mex Foods supplies more than 200 restaurants as the distribution branch of Real Mex Restaurants, Cypress, Calif., including Chevy’s, El Torito and Acapulco restaurant concepts located in Arizona, California, Nevada, Oregon and Washington.  In addition, Real Mex Foods has branched into broader frozen foods processing for foodservice, co-pack and retail channels serving clients such as Sysco Distributors, El Pollo Loco, Carl’s Jr.-Green Burrito, Albertson’s and U.S. Foods.

In February, Real Mex closed its 32,000-square-foot manufacturing plant in Santa Fe Springs, Calif., and moved into a 100,000-square-foot space in Vernon, California. The city of Vernon and a developer came to us and proposed a deal where we got a 100,000-square-foot building retrofitted to a state-of-the-art USDA manufacturing plant, Angulo explains.  It was an opportunistic deal.   They got us into 100,000 square feet at the cost that we would have gotten a build-to-suit 65,000-square-foot building.

Food safety also was a major priority for Real Mex in building out the new plant. The company built an in-house lab and hired a complete quality assurance team. Other food safety precautions include a triple boiler system, floor foamers, centralized sanitation system, in-house chlorination system for vegetables and a full quality assurance staff.

The developer invested $10 million in the build out, while Real Mex spent about $4 million on equipment. The completely refurbished plant quadrupled the company’s previous capacity and allowed it to more than double the number of kettles, tumble chillers and blast freezers. www.realmexfoods.com

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