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.
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.
Business
Inland Empire Chamber President Edward Ornelas, Jr. Named Finalist for Spirit of the Entrepreneur Awards
Celebrating Leadership and Innovation: Ornelas Recognized for Advancing Business Growth and Social Impact in the Inland Empire.
Edward Ornelas Jr., President of the Inland Empire Regional Chamber of Commerce and owner of the Inland Empire Business Journal, has been named a finalist in the famed 2024 Spirit of the Entrepreneur Awards. Ornelas is honored in the Social Entrepreneur category for his remarkable leadership and vision in fostering business growth and development across the Inland Empire. The award ceremony will take place on November 21, 2024, at the Riverside Convention Center, celebrating the best of entrepreneurship throughout the region.
The Spirit of the Entrepreneur Awards, often regarded as the “Oscars of Business” in the Inland Empire, recognizes the innovation, leadership, and impact of outstanding entrepreneurs across various sectors. Ornelas joins a select group of 34 finalists, each representing the entrepreneurial spirit and resilience that define the I.E. business community. The Social Entrepreneur category highlights individuals like Ornelas, whose work goes beyond profit to positively impact society.
In his role as President of the Inland Empire Regional Chamber of Commerce, Ornelas has been a powerful advocate for the business community, connecting small businesses with essential resources and creating opportunities for growth. As the owner of the IE Business Journal, the only publication in the region dedicated solely to business news, Ornelas has provided a platform for local businesses to thrive by sharing their stories and promoting their success. His innovative, forward-thinking approach to marketing has earned him a reputation as a “visionary” and a “get-things-done” leader across both public and private sectors.
“I’m deeply honored to be recognized as a finalist for the 2024 Spirit of the Entrepreneur Awards. This nomination is a reflection of the incredible businesses and community leaders across the Inland Empire who inspire me every day. At the Inland Empire Regional Chamber of Commerce, our mission is to empower businesses and foster economic growth, and this recognition highlights the collective efforts of our entire community. I’m excited for what the future holds as we continue to work together to make a lasting impact,” said Ornelas.
Other notable finalists for the 2024 Spirit of the Entrepreneur Awards include leaders in healthcare innovation, green technology, and digital transformation. Each finalist, selected by a distinguished panel of judges, represents the best in their respective industries and contributes to the Inland Empire’s continued growth as a hub of innovation and entrepreneurship.
The Spirit of the Entrepreneur Awards is an annual event that brings together business leaders, community advocates, and entrepreneurs to celebrate the entrepreneurial excellence that drives the region’s economy. This year’s event promises to be a night of inspiration and recognition, showcasing the achievements of finalists like Ornelas, who continue to elevate the Inland Empire’s business landscape.
For more information about the Spirit of the Entrepreneur Awards and to see the full list of finalists, visit www.spiritawardsie.com.
The office is designed to support hybrid work and employee wellbeing
CBRE announced the opening of its new 10,159-sq.-ft. office suite on the ground floor of 4141 Inland Empire Blvd., in Ontario, Calif.
The office is part of CBRE’s Workplace360 program, which features innovative office designs and functionality, including in-office technology and a wider variety of collaborative spaces designed to support hybrid working. CBRE launched its Workplace360 program over a decade ago in its downtown LA office. Since then, the company has opened more than 100 Workplace360 offices worldwide, continually updating the program as work habits have changed over the years, especially with the increase in hybrid work.
“Our newly renovated space provides us with a great opportunity to deliver a collaborative, experience-driven workplace that supports hybrid work,” said Ian Britton, managing director and market leader for CBRE in Inland Empire. “Our Workplace360 office will also serve as a showpiece to help clients conceptualize flexible work strategies for their employees.”
The renovated office has several different work areas including focus, huddle, living, and conference rooms. The open-space lobby, known as the “Heart,” features a variety of seating and a communal space for collaboration. A large 86” media display with a speaker system welcomes employees, visitors, and clients and assists with onsite events.
New office technology, including touch-enabled video conference rooms, allows for hybrid work collaboration between in-office and remote employees and clients. Additionally, the Mt. Baldy conference room has Liquid Galaxy, a geospatial visualization platform set across large format curved screens providing a cinematic presentation experience. This room has an operable wall that opens to the Heart, creating an onsite event space.
A cornerstone of the Workplace360 model is its free-address approach, in which there is no dedicated seating. The free-address approach allows employees who are in the office on a given day to use any workstation or office.
The office’s design led by CBRE Design Collective, took inspiration from the Inland Empire’s orange groves and mountainous landscapes of Mt. Baldy. Images of Route 66 from local photographer VC Torneden features the role the highway plays in the area.
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