BUSINESS BOOMS IN A.V. TIMES BRIGHT, BUT NATIONAL, STATE SLOWDOWN LURKS.

Byline: Charles F. Bostwick Staff Writer

PALMDALE - What a difference a decade makes.

In 1991, the Antelope Valley was on the economic downhill side of its boom-and-bust aerospace roller coaster, ending with home prices off by 40 percent, thousands of foreclosed homes, and a shock to the regional self-confidence.

After a long slow struggle - slower even than the U.S. or California recovery - times are looking better.

SwissAir has opened an aircraft refurbishment plant, Rite Aid and Michaels have opened distribution centers, more than a dozen tracts are selling homes, and home prices are among the fastest rising in California - up 46.7 percent in Lancaster and 37.5 percent in Palmdale during 2000.

``We were slower to get into the recession and a little slower to get out,'' said Vern Lawson Jr., the city of Lancaster's marketing and economic development manager. ``We have quite a bit of activity. I'm actually quite encouraged.''

Times are looking better - just as the national economy softens, the stock market gets the jitters, gasoline prices spike and California runs out of electricity.

Local business people say they believe the various crises will work out, but the impact is already showing up.

Rexhall Industries, which opened a motor home manufacturer plant in Lancaster in 1996, reported last week its first-quarter revenues were off 10.1 percent compared with a year ago.

``We are encouraged by the recent interest rate decreases and the gains the major stock market indices have made,'' president William J. Rex said. ``Hopefully, these will translate into stronger consumer confidence and spending.''

``We're working a little harder,'' Robertson's Palmdale Honda general manager Ron Emard acknowledged. ``It's too early to get an opinion or get a gauge on it.''

Emard, who is also Palmdale Chamber of Commerce president, said local businesses on the whole are optimistic but added, ``I think the main thing on everybody's mind is energy.''

Others say they haven't seen a downturn yet.

``The traffic is still strong,'' said Guy Cirinelli, property manager for the Rancho Vista development, which has started construction on 83 homes as an extension of its 90-home Skyline tract, which closed escrow on its last home in January.

Businesses are on a waiting list for the Rancho Vista Plaza shopping center, which may be expanded late this year or early next year, Cirinelli said.

``We got some pretty strong interest,'' Cirinelli said. ``People are waiting to come in.''

Up-and-down history

Turbulence and uncertainty are nothing new in the Antelope Valley economy.

A farming community from its settlement in the 1890s until World War II, the valley was transformed when the military and the National Aeronautics and Space Administration chose what is now Edwards Air Force Base to test high-performance jets and rocket planes, with pilots like Chuck Yeager. Palmdale became an aircraft production center.

The valley went though a population boom - Palmdale's population jumped from 1,400 in 1950 to 11,000 in 1960, Lancaster's from 3,600 to 29,000.

Then the economy crashed, led by Convair shutting its Air Force Plant 42 factory. Jobless workers moved out. Homes stood vacant.

It took until the mid-1970s for the economy to revive, helped by the 1974 completion of the Antelope Valley Freeway and Lockheed's L-1011 airliner production, but again ran into a deepening national recession.

The 1980s brought a new boom, when interest rates fell and Rockwell International hired more than 7,000 people - equivalent then to half the inhabitants of Palmdale - to build B-1B bombers. Rockwell was already building space shuttles in Palmdale.

Palmdale shot from 13,000 in 1980 to nearly 69,000 in 1990. Lancaster went from 48,0000 to more than 97,000.

The end of the Cold War meant B-2 stealth bomber production employment reached only about half the size of the B-1B work force. And another national recession hit, so new home buyers who commuted to jobs in Northridge, Los Angeles or Long Beach also got pink slips.

Unemployment peaked in 1993 at an estimated 9.4 percent in Lancaster, 9.3 percent in Palmdale and 11.7 percent in Lake Los Angeles.

With thousands of homes just finished, under construction or planned, home builders started offering freebies like refrigerators, landscaping or even cars, then cut prices. Home buyers found themselves owing tens of thousands dollars more than the price on the new house down the street.

Prodded by higher unemployment and lower prices, more than 15,000 homes went into foreclosure in the mid-1990s, drawing the valley the dubious title of ``foreclosure capital of the United States.''

The bottom was hit sometime mid-decade. Palmdale businesses' taxable sales fell from 1994 through 1996. More than 4,000 homes went into foreclosure valleywide in 1997, a record, and new home sales bottomed out at 634 in 1998.

In 1997, Palmdale's city newsletter was reduced to boasting about a Jack in the Box restaurant as one of the new businesses coming to town.

A broader base

But new industries - which valley leaders had been courting since the 1980s as a counterpoint to the cyclical aerospace industry - began moving in.

Senior Systems Technology opened an electronics-component plant in Palmdale in 1998. The same year, Michaels craft store chain opened a 432,000-square-foot distribution center in Lancaster. Rite Aid opened its West Coast distribution center more than twice as big nearby.

Dillard's, an upscale Arkansas-based department store chain, opened a store in 1999 at the Antelope Valley Mall, the mall's first new department store since 1992.

Dillard's decision drew the attention of other chains, so within a year Lowe's home improvement chain, Barnes & Noble book stores, and La Canada-based Sports Chalet had committed to open stores within a mile of the mall.

SR Technics, a SwissAir subsidiary, last year opened a plant for refurbishing and modifying jetliners. Employment hit 350 in March and company officials said it could eventually amount to thousands.

Local unemployment dipped to an official estimate of 4.6 percent in Lancaster, 4.5 percent in Palmdale and 5.8 percent in Lake Los Angeles, compared to 4.8 percent in Los Angeles County overall.

That's the lowest since at least 1990.

Even without the electricity problems and gasoline price hikes, though, the economy wasn't in a boom comparable to 15 years ago.

New home sales last year were 888 - about a quarter of 1991's pace - though the first three months of this year saw sales double. Home prices are up, but still are about 15 or 20 percent off the peak briefly hit around 1990.

Sharply rising electricity bills could put a crimp in local families' disposable income, Lancaster Finance Director Gary Hill says.

``We're going to see a slowdown in retail sales growth,'' Hill said. ``We still have a young community, and there's still a lot of people who are buying for and equipping their homes. ... I don't see a lot of growth in disposable income, but we'll see some growth.''

But local officials also say the valley is less dependent on a single industry than it was 10 or 40 years ago when aerospace was king.

The Lancaster Business Park has sold 55 acres in the last two years, drawing Robert F. Chapman Inc. sheet metal company from Pacoima and three local businesses that needed more space: a cabinet maker, a machine shop and a health food and skin care products company. Another company is interested in buying 13 acres.

``It'd be hard to convince anybody we're in a downturn,'' Lawson said. ``They help to diversify our economy. Obviously, a guy who's in the tract cabinet business doesn't care about the federal budget cycle.''

NEW TRACT-HOME SALES

Sales of new homes in the Antelope Valley dipped in the late 1990s but are rebounding.

Year Number

1990 2,720

1991 3,337

1992 2,264

1993 1,844

1994 1,793

1995 1,355

1996 1,001

1997 882

1998 634

1999 679

2000 888

CAPTION(S):

photo, box, chart

Photo:

Business is good for Rancho Vista development, which is building 83 homes as an extension of its 90-home Skyline tract.

Jeff Goldwater/Staff Photographer

Box: New Tract-Home Sales (see text)

The Meyers Group

Chart: Antelope Valley Sales

SOURCE: State Board of Equilization