Business
New Study Finds Prop. 15 will Not Harm Small Businesses In California
Research disproves misinformation that initiative would have negative impact on small businesses
By Anthony Matthews
A new report recently released found that Proposition 15, the Schools and Communities First ballot measure, would not impact the cost of small business rents for the roughly 80% of businesses renting their place of business or raise property taxes for the vast majority of commercial properties. The study was conducted by Beacon Economics LLC for Silicon Valley Community Foundation.
“Most claims about Proposition 15’s impacts on small businesses are unfounded. Our analysis shows that this initiative will not strain small business owners with skyrocketing rents and should actually affect small businesses very little,” said Christopher Thornberg, founding partner of Beacon Economics. “Entrepreneurs will want to remain part of California’s high-performing, innovation economy and, should it pass, this initiative won’t change that.”
The study found Prop. 15 will not impact small business renters, including triple net lease tenants. An analysis of nearly 12,000 properties in 12 counties found reassessment after a property sale does not increase business rents for retail properties, warehouse properties, and research and development properties. Office space tenants are an exception where this can fuel rent increases of 0.1% each year. In other words, the reassessment of a commercial property after 20 years could cause a one-time 2% rent increase for an office space tenant.
Other key findings of the report include the following.
- Prop. 15 won’t impact two-thirds of commercial properties. In a random sample of over 22,000 commercial property transactions in 12 counties during 2018-2020, 66% of commercial property sales were under $3 million and would be exempt from Prop 15.
- Of nearly 1 million businesses in California, 56% have fewer than 5 employees, 17% have 5-9 employees, and 12% have 10-19 employees.
- Prop. 15 would restore equity to property taxes since homeowners now pay 72% of property taxes relative to businesses. In 1978, it was 55%. In Los Angeles County, commercial properties paid 46% of property tax in 1978 but paid just 28% in 2017.
“Commercial rents are based on many market factors but property tax is not one of them. If it were, reassessments would trigger rent increases and there is no evidence of this,” said Taner Osman, research manager at Beacon Economics. “Small businesses typically require less space to operate so they tend to occupy relatively less expensive properties. This is why most small businesses purchasing their place of business will not be impacted by Prop. 15.”
“For the first time, we can separate fact from fiction about Prop. 15 impacts on small businesses,” said Walter Wilson, CEO of the SIlicon Valley Minority Business Consortium. “Armed with this new material, we can keep lies of impending doom in check and know that, whatever fate this initiative faces, there is no need to fear for the future of our small business community.”
“Small business owners are active members of their communities. They want the place they call home and build their business to do well,” said Tara Lynn Gray, President and CEO of the Fresno Metro Black Chamber of Commerce. “This report shows small business owners the choice about Prop. 15 does not pit the interests of their business and community against each other.”
“This report shows a single ballot initiative will not change how businesses negotiate leases. Like other businesses, landlords set rent prices based on supply and demand,” said John Ballon, owner of Two Enlighten in Glendale. “Right now, demand for office space is in decline. I recently renegotiated my lease for nearly a third less than what I was paying before the pandemic. My landlord said my moving out was not an option and she would ‘do what it takes to make it work.’”
“With the potential to unlock $12 billion to benefit local governments and schools, Proposition 15 is one of the most significant ballot measures facing California voters this November,” said Gina Dalma, executive vice president of community action, policy and strategy at Silicon Valley Community Foundation. “Together with Stupski Foundation and other generous supporters, Silicon Valley Community Foundation has invested in independent and objective research that produces clear, data-driven information to help inform voters about the potential impacts of Proposition 15. This study from Beacon Economics has indicated a clear finding that there is no significant relationship between reassessments and an increase in commercial rents, further invalidating misinformation that claims Proposition 15 would harm small businesses.”
Prop. 15 would require most commercial properties, except those valued under $3 million, to be taxed at fair market value through reassessment every three years. The revenue would be directed to K-12 public schools, community colleges, and local governments. Currently, property taxes on commercial properties are based on property values at the time of purchase with a cap on increases.
Empowering Economic Growth: CALED Conference Set to Unite Industry Leaders in Ontario
CALED’s ‘Growing Local Economies from the Ground Up’ Conference is being held in Ontario at the DoubleTree by Hilton Hotel Ontario Airport on May 7-9. This event is co-hosted by the City of Ontario and San Bernardino County, with Jennifer McLain Hiramoto, CALED’s Chair of the Board and Derek Armstrong respectively representing their city and county as Co-Chairs of the event.
With over 950 members and 45 years of empowering economic developers, CALED is the largest economic development association in the country and the annual conference is the number one place to meet and connect with the boots-on-the -ground, decision makers in our communities.
The conference will include a pre-conference teaching tour, ‘Building & Paying for Development Projects’ on May 6th and then begin in full on May 7th, with a welcome session and breakouts. Overall, there will be four general assembly sessions and 18 breakout sessions, which will delve into local economic development practices and innovative tools.
In addition to compelling content, the conference will have numerous opportunities to connect with community leaders and valued peers through networking receptions, the culinary crawl, and new this year, the Tournament of Champions, where conference attendees will navigate a gauntlet of games to win the grand prize on the evening of Thursday, May 8th.
To learn more about the conference and register, visit the CALED website at www.caled.org.
Business
Strengthening Community Connections: Our Exciting New Partnership with Toyota Arena, Ontario Convention Center, and GOCAL
Contributed Content | By Chris Venhoff, Senior Vice President and Inland Empire Market Leader for Consumer and Business Banking at U.S. Bank
As the Inland Empire market leader for U.S. Bank, I’m thrilled to share some exciting news: we are proud to be the Official Bank Partner of Toyota Arena and Ontario Convention Center. This partnership represents a reflection of our deep commitment to the Inland Empire and our dedication to fostering a vibrant, thriving community.
At U.S. Bank, we believe that strong partnerships drive meaningful progress. Toyota Arena and Ontario Convention Center are at the heart of the region’s culture and economy, bringing people together for world-class entertainment, business conventions, and community events. By joining forces, we’re not only expanding our presence but also creating opportunities to engage with residents, businesses, and organizations in ways that make a lasting impact.
Through our sponsorship, we’ll support concerts, sporting events, and conventions that showcase the diversity and energy of the Inland Empire. But this is only the beginning. As our partnership evolves, we’ll work closely with Toyota Arena, Ontario Convention Center, and GOCAL to introduce community-focused programs, including financial literacy workshops and charitable giving initiatives.
This partnership is designed to bring added value to the people we serve. For our customers, we’re introducing the U.S. Bank Fast Pass Lanes, providing priority access at Toyota Arena events. Special offers, exclusive event experiences, and tailored financial solutions for businesses operating in the region are just a few of the many perks we’re excited to roll out.
Our employees are at the core of our success, and this partnership allows us to recognize their dedication. Through exclusive access to events, corporate hospitality opportunities, and community volunteer programs, our team will have new ways to engage with and celebrate the community they serve.
The Inland Empire is a dynamic, fast-growing region, and we’re committed to supporting its continued success. By investing in Toyota Arena and Ontario Convention Center, we’re helping to create and sustain jobs while driving local business growth. These venues bring in visitors, revenue, and visibility, strengthening the region’s economy.
This collaboration is about more than just sponsorship—it’s about making a difference. By working together, we can elevate not just these venues but the entire Inland Empire. At U.S. Bank, we’re committed to being a partner in progress, supporting our customers, businesses, and communities every step of the way.
Honoring Visionary Leaders Driving Innovation and Community Impact
The Spirit of the Entrepreneur Awards Gala, held at the Riverside Convention Center, celebrated the brightest entrepreneurial talent across the Inland Empire. Among the evening’s finalists was Edward Ornelas, Jr., President & CEO of the Inland Empire Regional Chamber of Commerce, who was honored in the Social Entrepreneur category for his outstanding leadership and commitment to the region.
Although Ornelas did not win, the Social Entrepreneur award went to Cesar Navarrete, President & CEO of Children’s Fund, a proud Chamber member. “Being a finalist alongside such remarkable leaders is an incredible honor,” said Ornelas. “I am especially thrilled to see Cesar, a Chamber member, recognized for the transformative work he’s doing to improve the lives of children in our community. It’s a proud moment for us all.”
Another highlight of the evening was the recognition of Hilda Kennedy, President & Founder of AMPAC Business Capital, another Chamber member, who was awarded the Top Female Entrepreneur category. Hilda’s leadership at AMPAC, a mission-driven business lender, has been instrumental in empowering small businesses and fostering economic growth across the region.
“It’s amazing to see leaders like Hilda and Cesar being celebrated for their contributions,” added Ornelas. “Their achievements underscore the talent and dedication of entrepreneurs in our Chamber and across the Inland Empire. They are setting the standard for excellence and impact in their fields.”
The evening also featured the prestigious “Best of the Best” Award, sponsored by Best Best & Krieger LLP, which was awarded to Mauro Gomez, Chief Growth Officer of Anita’s Mexican Foods Corp.. Based in San Bernardino, Anita’s Mexican Foods has grown from modest beginnings into a leader in the food production industry under Gomez’s strategic direction.
The Spirit of the Entrepreneur Awards Gala continues to shine a spotlight on the transformative work of Inland Empire entrepreneurs, celebrating their innovation, resilience, and commitment to the community.
For more information about the Spirit of the Entrepreneur Awards, visit https://www.spiritawardsie.com.
For more details about the Inland Empire Regional Chamber of Commerce and its members, visit www.iechamber.org.
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