March 28, 2014

Analysts optimistic about Merced’s future

With an expanding university, new interest in the former Castle Air Force Base and predictions for an improving economy in the region, slow and steady improvements are expected for Merced, analysts say.

Predicting what’s ahead for Merced without a trustworthy crystal ball may be difficult, but area leaders are confident the future is a bright one.

With an expanding university, new interest in the former Castle Air Force Base and predictions for an improving economy in the region, slow and steady improvements are expected for Merced, analysts say.

The biggest factor driving change in this “breadbasket” community will continue to be agriculture, according to most leaders. The top dozen crops in the county were valued at $2.8 billion in 2012, the most recent numbers available.

“I think that agriculture’s going to be No. 1 in this area for a long time, as it should be,” Councilman Josh Pedrozo said.

New ways to stretch water and to make a better plant may help to revolutionize farming in the region. UC Merced could add to that effort with the research being done on campus.

Maxwell Norton, University of California Cooperative Extension adviser, said agriculture in the area in 25 years will not look much different than it does today. Many fruit growers have moved to tree nuts, because the weather and labor risks are much lower.

However, the way crops are grown likely will become more technologically advanced. “To the casual observer, the changes are not profound,” he said. “Technology will continue to increase quite a bit.”

Scientists are breeding crops to make them more resistant to insects so they need fewer pesticides and other chemicals, Norton said. Engineering students at UC Merced are testing drones to better map and study farmland.

Researchers are developing better drip irrigation systems, where water is used more sparingly. Water is on people’s minds with the California drought affecting so many.

“I think this drought is sending a huge signal out to us that we need to change the way we do water management,” Mayor Stan Thurston said.

Along with ways to stretch water further, he said, regional leaders will need to find better ways to manage the Sierra snowpack and other means of long-term storage of precipitation.

By all accounts another factor driving growth in the community will be UC Merced, which is expected to reach 10,000 by 2020. Many are predicting that students leaving the university could develop start-up companies in the city.

Technological firms, said Thurston, though they could have big economic impact, employ relatively few people. The city may need to find creative ways to help people start small businesses. It would be like “hitting singles all the time, instead of waiting for that home run all the time,” he said.

The city has struggled with finding sources of new jobs. Wal-Mart, for example, proposed to build a 1.2 million-square-foot distribution center on a 230-acre site just east of the parkway. The center, which could employ as many as 1,200 people, has been delayed but is coming, according to a corporate spokeswoman.

Despite the Wal-Mart snag, leaders are predicting slow improvements with Merced’s economy. A proposed addition to the Campus Parkway, a route that will connect Highway 99 and UC Merced, and other retail development are creating interest in the city, Pedrozo said.

“We’re starting to see a change in dynamics where people aren’t so negative on the city,” he said. “It’s starting to be a positive discussion.”

Other regional developments will likely spur growth near Merced, which could provide economic benefit to the city. The $55 million Atwater-Merced Expressway is a four-phase project that will connect Bellevue Road over Highway 99 to Highway 140. The expressway will run to Highway 59 and UC Merced, officials said

The expressway is expected to open up traffic and lead to more development, such as Ferrari Ranch, a proposed 202-acre multiuse project planned for the southeast corner of Atwater just outside the city limit. Planned since 2006, the development calls for a hotel, restaurants, a hospital, offices, big-box retailers, smaller shops and other business spaces.

The Castle Commerce Center, which is located just outside the city in Atwater, has 65 tenants.

They range from UC Merced, which houses a number of laboratories on the site, to Google, which plans to use about 60 acres to test self-driving vehicles. The site has an 11,802-foot runway, rail lines and buildings that also could be attractive to developers.

Mark Hendrickson, director of community and economic development, said the challenge is to continue to improve infrastructure and attract more tenants.

“Castle is uniquely positioned to become a place where industrial activity, logistics activity and commercial activity can be advanced,” he said. “The hope is to see full, private reutilization of the facility.”

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