UC Merced extends leases at Castle until 2020

UC Merced officials extended multiple lease agreements for space at Castle Commerce Center this week, continuing what county officials call a mutually beneficial relationship for another five years.

Five years before UC Merced opened in 2005, university officials began leasing space at the former Air Force base for its founding faculty and researchers. The original lease from August 2000 allowed for two five-year extensions, according to county documents.

The lease agreements – including two buildings at Castle and the use of a telecommunication conduit – generate about $422,938 in annual revenue for the county, said Mark Hendrickson, director of community and economic development.

The extended leases, which were unanimously approved by the Board of Supervisors earlier this week, will expire July 31, 2020. Castle Commerce Center has 95 leases for buildings and hangar space at the Atwater property, Hendrickson said, with 17 new leases signed this past year.

University officials expressed interest in exercising the lease’s last five-year extension in a Sept. 29 letter to the county. Spokeswoman Patti Waid said the university has quickly outgrown its original footprint and needed more space to accommodate its faculty.

“The campus that’s been developing has never been able to grow fast enough to keep up with the demand, so we’ve continued to use Castle as a way to provide extra space for researchers,” Waid said. The former Air Force base’s spacious buildings and close proximity to the university made it an ideal destination for UC Merced, she added.

The two buildings at Castle – a combined 86,509 square feet – are used by the university’s School of Natural Science and School of Engineering for research. Faculty spend seven days a week there, Waid said, working on research projects ranging from solar energy to drone technology.

UC Merced’s presence is also a major selling point when it comes to attracting and recruiting new businesses to Castle, according to Hendrickson. Creating a synergy between UC Merced and technological companies could be beneficial to both parties in the future, he said.

“It could very well serve as a potential hotbed of activity down the road for students and for researchers who want to take their work to the next level and use Castle as the site to grow that business,” Hendrickson said. “As we’ve seen some growth in the number of leases at Castle, UC Merced’s presence and name is part of the conversation from the beginning.”

In the past year, technology giant Google entered into two lease agreements for space at Castle – one to test its self-driving car program and another for Project Loon, balloon technology that provides Internet service to rural areas worldwide.

Conversations surrounding leasing opportunities at Castle haven’t slowed down. According to a Board of Supervisors agenda, the supervisors met in closed-session late last month to discuss leasing two buildings and 130 acres of barren land.

One of the two buildings under discussion was formerly occupied by AT&T, which closed its two call centers in August, displacing more than 400 workers.

This story was originally published November 6, 2014 at 7:49 PM with the headline "UC Merced extends leases at Castle until 2020."