Worst appears over for Sonoma County, but events of past year indicate that the road to recovery may not get a whole lot easier

The worst appeared over for the Sonoma County economy in 2010, but the path ahead still didn't look very rosy.

The county suffered nearly all year with double-digit unemployment.

Many kept waiting for a surge of new jobs and an upturn in economic growth. Instead, much of the news remained grim as the sputtering economy resulted in more business casualties.

Prices held steady in a lackluster housing market, though the amounts remained far below the peak of 2006.

Meanwhile, hostile weather compounded the wine industry's woes and wreaked havoc on harvest of wine grapes, the county's premier agricultural crop.

Sonoma State University economics professor Robert Eyler suggested Californians have reason to remain cautious, given the upheaval suffered this year by such distant nations as Greece and Ireland and the financial challenges facing California's own debt-laden government.

For the world, "the recession is not over," said Eyler, director of SSU's Center for Regional Economic Analysis. "Even though we're starting to see some signs of recovery in the United States, there are still some issues coming."

What follows are the top local business stories for 2010, as selected by Press Democrat business reporters and editors:

1. Carinalli bankruptcy

Sonoma County's largest real estate investor, Clem Carinalli, was forced in 2010 to fashion a bankruptcy plan to sell off nearly 200 properties and repay creditors a portion of the $194 million he owes them.

The plan, approved by a judge in November, established a process to end the largest personal bankruptcy in county history. Under it, most unsecured creditors will receive between 26 percent and 56 percent of their original investments.

The creditors will be paid back incrementally over the next five years as the properties are liquidated -- even Carinalli's Santa Rosa home.

The judge's approval ended 17 months of drama as creditors watched to see whether Carinalli could restructure his debts -- and how much money would be left to repay them.

2. A slow recovery

The Great Recession may have ended here in 2009, but its effects lingered on.

Unemployment remained above or near 10 percent throughout 2010. The county has gained about 1,200 jobs since July, but the unemployment rate isn't expected to drop much before the middle of next year.

Slightly better news came this fall when economist Christopher Thornberg told business leaders that the county wasn't headed for a double-dip recession.

"Things are moving in the right direction," said Thornberg, who had been among the first to warn of California's housing bubble in the past decade. "We're just in a slow recovery. The only way to fix it is time."

3. Sluggish housing and home construction markets

After years of soaring and plunging home prices, 2010 seemed almost sedate for the real estate industry. The county's median sales price hovered all year between $340,000 and $370,000. That remained far below the record of $619,000, but higher than the rock bottom of $305,000 in February 2009.

Early in the year, real estate agents had put their hopes on an improving economy and the extension of a federal tax credit for homebuyers. But by the fall, they were readjusting their thinking and quipping that, "flat is the new up."

Foreclosures remained flat during the first nine months of 2010. Agents who specialize in such properties predicted it will take several more years before large numbers of people stop losing their homes for failing to make their mortgage payments.

All the foreclosures help explain why construction of new homes dropped again in 2010, the lowest level of building in four decades.

"There's very little going on out there," Keith Woods, chief executive officer of the North Coast Builders Exchange in Santa Rosa, said in September. Most builders foresee "a long, slow, tortuous path to any kind of recovery."

4. Harvest of woes

The county's wine industry continued to struggle in 2010 as budget-minded consumers kept turning to cheaper brands. Grape growers, meanwhile, faced the strange combination of a cool summer, a late unexpected heat wave and a battle against mold. The county's harvest appeared about 15 percent below average and growers without winery contracts for their fruit were considering last-minute offers far below recent years.

"With Mother Nature and the economy, it's been a double whammy," Harry Black, vineyard manager for Rancho Miguel in the Alexander Valley, said in October.

5. Sonoma Valley Bank taken over

In August, federal regulators closed troubled Sonoma Valley Bank, making it the county's first bank to collapse in the economic downturn.

The bank's three branches immediately reopened as part of San Rafael-based Westamerica Bank, which purchased all of Sonoma Valley's deposits and most of its assets.