Bakersfiield Magazine -- October 20, 2008
IF THERE IS ONE THING BAKERSFIELD HAS LEARNED IN THE LAST 50 YEARS. IT’S THAT BIG BUSINESS MEANS BIG GROWTH FOR OUR CITY. Big companies generate big revenue we’ve seen the expansion the most in our outskirts; locations just outside metropolitan Bakersfield are ripe for development, and even smaller surrounding cities are seeing a big impact.
The optimal word here is big ... in every way.
And nowhere is that more obvious than by looking at the skyrocketing number of national and international corporations and manufacturers choosing Bakersfield as a place to build.
But why is that? What is It That Bakersfield has over places like Los Angeles or other large cities in central and northern California? While we have sunny skies and friendly people, for many businesses it comes down to three key elements that set us apart location, logistics, and labor.
All three of those played a significant factor in Pac-Van, Inc.'s decision to open up a branch in Bakersfield. Earlier this year, the Indianapolis-based company, which constructs modular buildings and storage facilities, was looking to expand their business to the West Coast.
As a primarily Midwest-centered business expansion in the US meant one thing trying to get a piece of one of the largest markets in the world - Los Angeles. Luckily for them, there was already a significant interest from locals. "It worked out better than anyone could have hoped," explained Bakersfield Pac-Van Branch Manager, Tom Svare. Svare had experience in construction and modular buildings so Pac-Van, having heard this, was interested in Bakersfield and Svare.
In a press release later distributed by both the Kern Economic Development Corporation (KEDC) and the City of Bakersfield, Pac-Van's COO and President, Ted Mourouzis, said" Establishing operations in California is a key step in Pac-Van's growth. Bakersfield is our third new location in the past eight months and marks Pac-Van's coast-to-coast expansion. We're excited to start a branch with Tom Svare as its leader. Tom's breadth and depth of experience as a modular building sales consultant, combined with relationships in the Bakersfield community, and Pac-Van's commitment to service and quality, will be a terrific combination -providing great value to customers."
Unknowingly, at the same time Pa c-Van was looking at Svare, Svare approached PacVan with his proposal "I told them how successful Pac-Van could be if it chose Bakersfield and Kern County as its West Coast location. For them, it came down to starting with a solid base for the company to grow and we could offer that with our varied markets."
According to Svare, Bakersfield ultimately sold itself. "We have the largest connection base for rail and highway transportation with 1-5 and highways 99, 58, and 178, not to mention our proximity to large markets." Svare is speaking not only of the LA basin, but of our proximity to Sacramento and San Francisco.
Additionally, Svare made sure Pac-Van heads were aware of the unique versatility of Kern County land, another feature of our locale here at the southern tip of California's Central Valley.
That's definitely a topic on the forefront of the minds at the KEDC and its president and CEO, Richard Chapman. While the KEDC aims to bring new business to Kern County, they're seeing definite positive feedback by including Bakersfield and Kern County in the Southern California market, especially w hen they're doing business with national and international companies. In fact, roughly 61 percent of the KEDC's client base is made up of relocating out-of-state companies.
Chapman said our location is perfect for many of the larger businesses looking to feed off the high power of the LA market; as soon as they're aware of our proximity to those ports, they're interested. "That was certainly the case with Clayco and Brown Shoe, where location to LA was key," he said. Clayco, Inc. currently is building a warehouse facility for Brown Shoe Company's retail division, Famous Footwear, at
Tejon Industrial Center (TIC). "Kern County beat out competitors in Riverside, Arizona, Nevada, and Utah to get that project" The KEDC estimates that upon completion in spring 2009, the 350,000 square foot distribution center is expected to create over 120 jobs and bring a capital investment of $22 million to our county TIC is already home to other large distribution centers including a 1.7 million square foot complex for IKEA, which currently helps distribute the company's Scandinavian influenced furniture and accessories, as well as Oneida, Ltd, makers of high-quality flatware and dinnerware.
The fact that Internationally-known companies are choosing Kern County is garnering national recognition for our humble and hardworking county. According to the KEDC, Policom's Economic Strength Ranking identified Kern County's economy as the most improved in the nation among more than 350 similar areas, moving from 290 in 2004 to 122 in 2008. Additionally, Economy com, a division of Moody's Analytics, an independent provider of economic analyses, stated that the Bakersfield Metropolitan Statistical Area is not in a recession, compared to the gloomy economic news elsewhere. Moody's does classify the state of California as being in a recession, but Bakersfield is among three other metro areas that are expanding.
Some experts also feel that Bakersfield and Kern County is a recession-proof area since so much of our economy is driven by local oil, agriculture, military, and construction-industries that historically yield big dollars.
These facts certainly support Svare's and Chapman's theories that Bakersfield's location is proving to be a valuable commodity for our continued growth and economic success. A majority of companies looking to lease space in Bakersfield are dealing in logistics - that is, they’re primarily seeking to construct manufacturing centers which build or transport their goods elsewhere. Not only are they in need of a large amount of space to do this in, which we all know Kern County has an abundance of, but they're also in need of a solid and available workforce. What good is building a facility if you don't have people to work in it? Well that's another area where we also shine. "We're a pro-growth area," Chapman explained "And our work ethic is well-documented. Among large corporations with stores in Bakersfield and other areas, ours has predominantly lower turn-over rates when it comes to employees. Logistics are really taking off as a viable and important industry in Bakersfield, We've already seen it increase 50 to 75 percent in the past year," Chapman added, "Three to four more industrial parks are breaking ground very soon. Oil production and agriculture are only two legs to our three-legged stool. Logistics are coming up in a big way. It's especially apparent in the relocation of Railex's facility in Delano."
Railex, LLC, transports produce and other products by rail from coast to coast. This new facility and accompanying track will haul produce from California to the Northwest and East Coast Railex broke ground in March of this year on their 200,000 square foot location - which will create 300 new Jobs and according to the KEDC, represents a $32 million capital investment. Railex is boasting that this new line will enable the company to "ship 400 truckloads equivalent, weekly, coast to coast in just five days." Not only is Railex boosting Kern's economy with the building of this new facility and the creation of new Jobs, but they are enabling a major boost in our agricultural market by eliminating any loss of funds due to spoilage caused by a lengthy transport.
Other major corporations are seeing the benefits of choosing Kern County Organic Alliance, Inc. recently selected Bakersfield as the place to open up a sales and marketing headquarters, citing the area as centrally located for organic trading. Golden Queen, Cintas, and Hydrogen Energy are among a long list of others discovering the resources available here.
And because of our location and close proximity to world markets and ports, not to mention our spatial resources and strong employee pool, Kern County is in line to serve as home to even bigger corporations ready to set up camp in California. The future is looking bright for big business in Bakersfield and Kern County.
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