Castle Air Force Base: The Future

Castle has often been called 1,912 acres of opportunity.

And that’s exactly what Mark Hendrickson, Merced County director of community and economic development, believes it is.

Hendrickson said revenue at the former air base increased 15.8 percent in 2014 over the previous year, generating $1.7 million for the county.

Castle’s future may look bright, but one economist says strengthening Merced County’s workforce is the key to ensuring Castle finds success.

Jeff Michael, director of the Center for Business and Policy Research at the University of the Pacific, said finding skilled workers is a top priority for businesses. Michael said that’s a challenge not just for the Merced area, but across the Central Valley.

“It really is the human capital that’s most important to be competitive,” Michael said. “Economic development has been generated with skills from the local population and workforce – that’s the most important thing in the modern economy.”

During an economic summit at Castle in March, economists estimated that the number of people traveling into and out of the area for work has risen 63 percent.

“We’re seeing difficulty in recruiting upper-level management and certain skill sets,” Steven Ames, vice president of the Stanislaus County Alliance, said during the summit. “The big challenge is that people with skill sets in this region are going to use them just over the hill.”

New businesses want to “know they’ll be able to have people to staff, and if you can’t prove it, they’ll just look at another site,” Ames said.

The other major factor in Castle’s future success, according to Michael, is transportation. The $336 million Atwater-Merced Expressway Project replaces a dangerous interchange on Highway 99 and creates a direct route to Castle Commerce Center in Atwater.

This highway project is crucial to the former air base’s success, officials said. Most of the first phase of the project is complete, but the remainder of the project – an estimated $270 million – remains unfunded.

“If there is a funding source identified to complete that road, that will absolutely be a game-changer for Castle,” Hendrickson said. “If Castle is going to blossom as a hub, the Atwater-Merced Expressway project is vital.”

Michael agrees, saying that companies want their trucks to have the quickest route to the highway. “Access to the freeway for trucks and vehicles is important to businesses, especially those in logistics,” he said.

While some complain that Castle is not redeveloping as quickly as other closed-down air bases, such as McClellan Air Force Base in Sacramento County, Michael said it’s like comparing apples to oranges.

“It certainly doesn’t have the same challenges as a location like Castle,” Michael said. “If you look at a place like McClellan, it’s more advantageous than Castle because it’s in a much larger market and has better workforce characteristics.”

As for the future of Castle’s tenants, county officials are pushing to attract innovative companies that can lead to other businesses. The county recently approved an agreement with a self-driving electric automotive developer to study a vacant hangar at Castle.

Bravo Motor Co., an Argentina-based automotive developer, is considering locating a manufacturing plant at the base. If a permanent lease is signed, it could include productivity benchmarks, such as creating 20 new jobs in the first 24 months and 300 jobs by the lease’s fourth year.

Golden Valley Health Centers in February signed a lease to move into one of the two vacant AT&T call center buildings. Though Golden Valley will shift staff from other offices to Castle, officials said the move would create 25 new jobs. That number is expected to double by the end of this year.

The second vacant AT&T building may soon be occupied by the county’s Human Services Agency. HSA has an office on Wardrobe Avenue and a few other sites in Merced; officials are considering consolidating those offices into one.

Though the move wouldn’t add any new jobs, it would provide lease revenue to the county. The building has been vacant since AT&T left in August.

Also in the works are several new construction projects at Castle, according to county officials. A local business owner, Paul Creighton, is looking at buying some land at Castle. Multiple other business owners have made inquiries and toured the buildings.

“We’re open for business and people are starting to notice it,” said District 3 Supervisor Daron McDaniel.

McDaniel, who has lived in Atwater most of his life, is putting together an advisory committee to oversee the development of Castle. The committee would be composed of business owners and the public.

“What I see is a lot of interest in Castle,” McDaniel said. “I can say that just in the last month people have been contacting me, and it’s been nothing but positive.”

This story was originally published May 25, 2015 at 2:56 PM with the headline "Castle Air Force Base: The Future."