Dynamics

Written by Bakersfield Magazine

Tireless energy & effective action.

Those of us who live and work in Kern County know just how dynamic this area is. Sure, we’ve long been heralded as a leader in the oil and agriculture markets, but our county is home to a diverse group of industries that has grown to include renewable natural resources, logistics, corporate headquarters, food processing, and healthcare services.

When it comes to economic development and growth, we outshine most counties in California. Even Fresno County, once thought of as the Central Valley’s powerhouse, falls short of our impressive gross domestic product (GDP). We actually surpassed them back in 2008 and with a GDP of $30 million we’ve solidified our place as the largest economy in the Valley. In addition, Kern County had the fastest-growing GDP (of the Top 100 metropolitan areas) over the last 10 years. Indeed, large corporations are taking note of what Kern County has to offer thanks, in part, to the diligence of organizations like the Kern Economic Development Corporation (Kern EDC).

“Nothing can be done by one business or one person,” said Kern EDC Board Chair Rick Kreiser. “It’s beneficial for an area to have a unified force, a public-private partnership.” Kreiser, along with his business technology company, Carney’s, has been involved with Kern EDC for over a decade but in June of 2010, he stepped up to be the chairman of the board.

“That combination [a public-private partnership] of a rule-making body and people who will benefit from the tax revenues is what works,” Kreiser added. “We’ve got the sun, wind, dirt, and oil...the natural resources are going to bring industry here. But natural resources aside, why do people come here? It’s the people. It doesn’t have a lot to do with commerce itself,” he said, but the quality of life and the community itself are the key. And those elements form an attractive environment for businesses and people to invest in.

“A significant portion of our client portfolio is composed of local companies that are looking to expand,” explained Richard Chapman, president and CEO of the Kern EDC. “But we also have a good share of new businesses contacting us. We showcase to them the strong work ethic of the local work force and the relative affordability of doing business in Kern County.” In the past, Chapman said, most regions were striving to bring in the high-end white collar jobs, assuming that blue collar jobs were going to be shipped to low-cost manufacturing countries like China and Mexico. What occurred in the interim was the creation of the “light blue collar” job. These are careers or jobs that incorporate a high-tech element, computer understanding, or some machinery operation. Job requirements have increased. So while there isn’t a need for PhDs or master’s degree candidates, there is a desire for a skilled, or at least semi-skilled, workforce. “It brings to mind the kind of vocational training that used to be prevalent here and throughout the U.S. There is a definite need for more high school-level training. However, there are still places like Westec, the Bakersfield Adult School, and regional community colleges that offer industry-specific programs.”

For a majority of Kern’s history, you could get an entry-level position in the oil and agriculture industry right out of high school. “We’re finding that we could have a role in providing encouragement to the workforce of the future,” said Chapman. “That’s why we started the Kern Economic Development Foundation and its mentoring program.” The industry needed to communicate to students that if you want to work in energy (even oil), you’ll need a degree. “But for so long the industry didn’t require it, so people came right out of high school wanting to go into the field. Of course, the opposite is also true. In places like Seattle, if you’ve got a bachelor’s degree, the half-true joke is that you can’t even work as a barista because those jobs are already taken by PhDs.”

Education aside, our location has always been tempting to big companies and corporations looking to grow, and these last two years have seen our numbers rebound from a brief slump. “Kern County is in that sweet spot because of our proximity to the Ports of Long Beach of Los Angeles, which annually conduct over $300 billion of trade activity. Companies want to be within a two-hour drive of the largest container port system in the U.S., and Kern County perfectly suits that requirement,” Chapman said. However, for a while, Riverside and San Bernardino counties had the edge because prices bottomed out and vacancy rates were up. We couldn’t compete; their prices were too low. Once the larger spaces were snatched up, there was nowhere else to go and rates jumped back up.

“Sure, they had twenty percent vacancies two years ago, but now most of that has been absorbed. Not to mention, they don’t have the significant opportunity sites that we do in Kern and their employee turnover rates are several times greater,” Chapman continued. “We’re growing as a region because of what we have to offer.”

Still, there has been some widespread fear that companies are leaving California. What Chapman and the Kern EDC staff have discovered is that these businesses are merely moving from high-cost markets like L.A. and San Francisco to sites in adjacent counties. “It comes down to a perception issue. We have to communicate with the people in these areas and let them know we’re a viable option.”

“The Kern EDC can’t change tax codes or make the EPA go away,” Kreiser explained with a chuckle. “What we can do is take the time to talk to people and companies selecting sites for relocation.” It adds a personal touch to “big business.” After all, someone has to be there to tell them about the availabilities, amenities, and affordability of Kern County.

And numerous manufacturing companies have heard the call. In addition to oil and agricultural growth, the 2010-2011 period has seen more logistics companies coming to town. There is also the draw for “local” companies like State Farm, which recently relocated more than 175 staff members to the Bakersfield regional office. “These are businesses that want and need the ‘California footprint’ and they can come to, or expand in, Kern,” Chapman explained. And it’s always at a lower cost than in places like L.A., where not only is the cost of doing business higher (according to Moody’s, the cost-of-doing-business in Kern County is 88 percent of the U.S. average), but the permitting process takes significantly more time. Whereas a company may have to wait years to finalize business permits in L.A., San Francisco, or San Diego, Chapman said that the County and many local jurisdictions can process permits in as little as a few months or weeks. The backlog and bureaucracy isn’t here.

It’s just one of the reasons companies like Califia Farms in Shafter and Paramount Farms in Delano chose this area.

We’ve also got the ample and available developable land. That’s why Terra-Gen chose Tehachapi as the location for its $1.5 billion wind farm, why Rosamond is being put on the map as a viable spot for 300 MW Sempra Energy’s Rosamond Solar project, and why enXco’s $325 million Pacific Wind project is taking off in Antelope Valley.

There will be a labor demand, too. “Toward the fall of 2011, there will be a rush for construction jobs at these projects,” Chapman predicted. “Not to mention that Golden Queen [mining] will be hiring about 150 people soon.”

That, in turn, creates more money for our area. Think of real estate sales and additional taxes. Think of food and recreational purchases.

“You have to attract people to the area. And having a nice community is a by-product of valuable business-to-business commerce,” Kreiser concluded. It’s cyclical. “With more profitable commerce, more people will realize the benefits of living and working in Kern County. The more people praise living and working in Kern County, the more big business will come our way.”

That’s a bottom line we can all live with.

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Article appeared in our 28-4 Issue - October 2011