Castle Air Force Base: The Present

When the federal government turned the former Castle Air Force Base over to Merced County in 2006, there’s one thing it didn’t do – clean it up.

Just like other decommissioned military bases, Castle was left with a host of challenges: dilapidated structures, aging infrastructure above and below ground, groundwater contamination and non-ADA-compliant buildings filled with asbestos.

The government offered grants in 2000 to demolish old structures, according to county officials, and Merced County received $4.6 million. It wasn’t enough.

Today, Castle still has 55 uninhabitable buildings that need to come down. Beyond being an eyesore, the buildings hamper Castle’s growth by taking up space and acreage that could be used to make way for larger companies.

Among other reasons, Tesla Motors cited a desire for more land in its decision to build a massive battery plant in Nevada. Castle was one of the top five sites under consideration for the project, which would have brought 6,500 jobs to Merced County.

Though Tesla didn’t pan out, Castle has become home to two Google sites. The technology giant leased space at Castle to work on its self-driving car program and balloon Internet technology in the past year.

Today, Castle holds 97 leases and is home to businesses such as Big Creek Lumber, Mackey & Sons, Hoffman Electronic Systems, APG Solar and Sierra Flight Academy.

Officials agree the old buildings are a clear impediment, but Merced County doesn’t have the funds to tear them down.

Mark Hendrickson, county director of community and economic development, said his team would rather invest money in creating a strategic plan that will attract the right businesses, investors and developers.

To create that plan, the county has spent nearly $300,000 since 2009 on various assessments and studies of Castle. Most recently, it hired GLD Partners to conduct a market analysis to determine the best industries for Castle.

The county doesn’t want just to fill spaces, Hendrickson said, leading to a hodgepodge of businesses not suitable for Castle. The former Air Force base has seen its share of “entrepreneurs” sweeping into the area, promising the world and then not delivering.

In 2009, John Condren promised to build a $250 million entertainment theme park called Riverside Motorsports Park. The hyped-up project never came to fruition because Condren told the county he went broke, according to news archives.

The county also hired a master developer to market and sell Castle to investors. It was another failed attempt because the developer, Federal Development LLC., didn’t meet stated objectives. After less than four years, the county and the developer mutually parted ways.

Hendrickson said the county’s goal now is to attract the right large-scale company – another Tesla Motors, for example – that can invest in Castle’s infrastructure and pay to demolish the crumbling buildings.

“We want to put Castle in a position where we attract companies that are in a position to invest in the infrastructure,” Hendrickson said. “Tearing down one building isn’t going to get you there, but if we can attract financial investment to Castle to take care of issues our consultants have identified as impediments, that puts us in a position to be competitive with sites throughout the region.”

But the county’s plan appears to be a Catch-22: County officials are waiting for a big company to invest in fixing Castle’s infrastructure; however, those companies don’t want to move in unless the site is “shovel-ready.”

It’s the reason Blue Diamond chose a spot in Turlock and Amazon picked Patterson; both cities had sites that were ready and provided direct access to the freeway.

While Merced County doesn’t have a plan to tear down the buildings without the help of an outside company, officials say they’re pushing to make Castle a more attractive option for new businesses.

Hendrickson said the county offers incentives, such as significant lease reductions in exchange for job creation. Castle tenants are exempt from paying certain fees, have flexible lease terms and might not need to pay for environmental studies since the county did a comprehensive review in 2007.

Castle properties were also divided by the county into parcels and zoned, county officials said.

Hendrickson said people want to see quick growth at Castle, but said the strategic plan is working. Revenue at Castle increased 15.8 percent in 2014 over the previous year, generating $1.7 million for the county. Castle has a 3 percent vacancy rate and all buildings without structural problems are occupied.

But the welcoming approach of today might not be able to shake the unfriendly business practices of yesterday.

Dennis Mead, a former regional senior project manager for Bess Testlab Inc., said his company tried opening a lab at Castle, but did not get a response from county officials. The firm has offices in Santa Clara and Fresno.

“I made contact two years ago to try to lease or purchase property,” Mead said. “It was just very bad communication and no one would call us back. There was just a lack of response from Merced County, so we decided to move our lab up to Hayward.”

Mead said his company also contacted cities such as Patterson and Turlock that were “much more responsive” but the Atwater resident wanted to bring the 7,000-square-foot facility to Castle because it would cost less in payroll. He predicted it would bring 20 to 30 jobs to the area.

Though the lab ended up in Hayward, Mead leased a small 2,000-square-foot space at Castle to store equipment. He said he’s not sure if he’ll renew the lease when it ends.

Workforce challenges and a desire to consolidate prompted one of Castle’s largest employers, AT&T, to leave the former base last year. The corporation took 400 jobs with it, and led to the closures of Gracian’s Mexican Restaurant and Patelco Credit Union.

But other employers have found success at Castle. Sierra Flight Academy, which has been a Castle tenant since 2006, signed several more leases in recent years, including one to lease 18 acres of land in 2013 to build a fixed-base operation. Sierra also purchased a 45,000-square-foot building at Castle for $750,000.

Mackey & Sons, a company that manufactures overhead cranes, has been at Castle since 2012. The company also paid for upgrades at its facility and brought nearly 60 new jobs to town.

While Hendrickson acknowledges there are challenges, he points to 17 new leases in the past year. Hendrickson, whose dad was stationed at the Air Force base in the 1970s, said he believes Castle’s brightest days are still ahead.

“Anyone that tells me this community doesn’t have bright days ahead is flat out wrong,” Hendrickson said. “There are a lot of people in this community who tend to be naysayers, but Merced County and this community has much to be proud of.”

This story was originally published May 24, 2015 at 8:10 PM with the headline "Castle Air Force Base: The Present."