Kern Business Journal December 2012 by Kern Business Journal

KERN Journal Business

Vol. 1, No.2

Cover story

Kern County becoming state’s logistics hub

Crossroads to success Tejon Ranch Commerce Center Page 6

Dec. 2012/Jan. 2013

Logistics/transportation issue

hether they are long-used freeways or historic railroad lines, local transportation corridors that once served California’s pioneers are transforming Kern County communities into logistics hubs that move goods and commodities around the state, nation and world. The City of Shafter, for example, is located along Highway 99, just a short drive northwest of Kern County’s international airport and in close proximity to two rail lines. These are the elements being used in the city’s plans to invest in warehousing and distribution infrastructure, which may someday become an intermodal rail facility, connecting the city by rail, truck and air cargo to the state’s major ports. For now, an increasing number of businesses and industries are calling Shafter home because of its services and location. Up Highway 99, in Delano, distribution centers and agricultural packing houses have built new facilities to take advantage of the city’s location in a rich agricultural area, its abundant workforce and proximity to freeways and rail. To the south, at the foot of the Grapevine, Tejon Ranch Co. is developing a commercial center, which is becoming the distribution center for major international companies, as well as a retail center for travelers along Interstate 5. In eastern Kern County, folks at the Mojave Air & Space Port are not just fixated on the skies. In addition to supporting innovative space and aeronautical projects, the Mojave airport serves as a distribution and assembly location for companies, particularly those associated with the booming wind and solar energy industries. The activities are supported by the existence of a major airport, rail line and heavily traveled state highways. The December/January edition of the Kern Business Journal highlights these projects and others that are keeping Kern County humming with the world’s trade. — Kern Business Journal

Kern Business Journal P.O. Bin 440 Bakersfield, CA 93302

Presorted Standard U.S. Postage PAID Bakersfield, CA Permit No. 758

Photo courtesy of the City of Shafter

Workers lay rail to complete Shafter’s “municipal railroad,” which will eventually be part of a developing intermodal rail facility.

Kern ranked a ‘top competitor’ Jobs creation outpacing trends

ith job creation being a sure sign of economic recovery, Kern County is proving to be a regional “star” as it attracts new businesses, expands existing ones and puts more people back to work. Overall, Kern County is seeing its jobless rate decline. Recently released October figures showed Kern’s jobless rate at 12.2 percent -- the lowest in the San Joaquin Valley and reflecting

a steady decline from January’s 15 percent. And now the Bakersfield-Delano area has grabbed third place in a ranking of the nation’s most competitive metro regions. The ranking was recently released by Economic Modeling Specialists, a labor research company owned by CareerBuilder, an online recruiting firm. The competitive ranking was not based on the number of jobs added, but rather a formula that determines if a region’s job-creating rate exceeds national trends. “Bakersfield has one of the highest unemployment rates among all metropolitan areas,” researchers noted. “But

better-than-expected job growth in the construction and agricultural sectors has propelled this San Joaquin Valley metro to third in our ranking. The agriculture boom has been seen most in crop production and farm labor contractors/crew leaders. Meanwhile, much of the surprising construction growth has been in two sub-sectors — oil and gas pipeline and related structures, construction and electrical contractors and other wiring installation contractors.” First place went to San Jose-Sunnyvale-Santa Clara. Coming in second was Austin-Round Rock-San Marcos, Texas. — Kern Business Journal

INSIDE Business at-a-glance ................................3 Tejon Ranch logistics center.......................6 Tejon outlet mall update............................7 Kern freight study......................................8 Bakersfield road building..........................10 Mojave Space Port..................................12 Borax’s worldwide reach...........................12 Railex: Shipping innovation......................14 Chamber events......................................16

Paramount’s logistics push......................18 Shafter’s intermodal approach..................18 Airport: Transportation hub.......................22 PCL career training..................................23 Chamber chief interview..........................24 In the Oil Patch.......................................25 Double-tracking the Loop.........................26 Smokey trucks replaced...........................27 Hotels business booming........................28

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Journal KERN Business Showcasing Kern County business and industry Vol. 1, No.2 Dec. 2012/Jan. 2013 Kern Business Journal is published by The Bakersfield Californian. Copies of the bi-monthly journal are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Publisher Ginger Moorhouse President/CEO Richard Beene Senior Vice President Revenue and Marketing John Wells Editor Dianne Hardisty Kern Business Journal Sales Mark Hitchcock Art Director Glenn Hammett To submit a story editor@kernbusinessjournal.com To advertise kbj-ads@kernbusinessjournal.com To subscribe Mira Patel mpatel@bakersfield.com 395-7586 Follow on Twitter @kernbiz

KERN BUSINESS JOURNAL

Dianne Hardisty

Kern County becomes ‘red hot’ site of California’s logistics industry

risscrossing Kern County are California’s major freeways and railroad lines, with heavily traveled air cargo routes crossing overhead. These routes distribute the state’s goods to consumers throughout the world. Much of the cargo is grown in Kern’s fertile soil or produced in area processing plants. These routes have created a “red hot” logistics industry that is transforming Kern into a commercial powerhouse of warehouses and distribution centers. Cheryl Scott, vice president of the Kern Economic Development Corp., reports that in just the past year, more than 1,200 local jobs have been created in Kern’s transportation, logistics and advanced manufacturing sector. “For centers distributing products statewide, the southern San Joaquin Valley has the lowest transportation costs and carbon footprint of any place in California,” reports Kern Council of Governments Planning Director Robert Ball from a recent Dianne Hardisty freight study. “Placing a production and distribution facility in Kern – the state’s geographic population center – is a sound business decision.” For the December issue, the Kern Business Journal asked company representatives, commercial developers and public officials to discuss why an increasing number of transportation and distribution centers are locating in Kern. Beginning at the base of the Grapevine, along Interstate 5, Tejon Ranch Co. is developing a massive industrial park. In addition to distribution and transportation facilities, the Tejon Ranch Commerce Center includes popular restaurants and stores. Soon it will be the site of a regional outlet shopping mall. Further north, along Highway 99, in Shafter, is the Paramount Logistics Park, an expansion of the former International Trade and Transportation Center, which was acquired by Roll Real Estate Development. Implementing a years-long investment plan, the city is building on its location adjacent to two rail lines to create an intermodal rail facility. At Kern’s north end is Delano, where major retailers, such as Sears,

Photo courtesy of Tejon Ranch Co.

Nighttime traffic flows along Interstate 5, south of Bakersfield, near the Tejon Ranch Commerce Center offramp.

have established distribution centers and Railex offers innovative, climate-controlled rail service. While the Mojave Air & Space Port is lauded for its aerospace activities, the facility in eastern Kern is emerging as a distribution center. Its location near major state highways and a rail line, as well as the booming wind and solar energy industries are credited for the development. The bi-monthly Kern Business Journal is a product of the Specialty Publication Division of The Bakersfield Californian, with the cooperation of the Kern Economic Development Corp., the Greater Bakersfield Chamber of Commerce and the County of Kern. The themes of upcoming editions are: Value-Added Agriculture, February; Health Care, April; Aerospace, June; Energy (Oil and Gas), August; and Commercial Real Estate, October. Featuring articles contributed by businesses and written by journal staff, the publication highlights the activities of Kern’s businesses and industries. To submit a news article or suggest a story, email editor@ kernbusinessjournal.com. — Dianne Hardisty is the editor of the Kern Business Journal.

Business at-a-glance fast chargers for its Model S sedan and future models. Eventually the company plans to have up to 100 charging stations strategically located throughout the U.S. to allow coast-to-coast driving. The Tejon station is located right off of Interstate 5 and forms a power network down the spine of California, through the Central Valley. Last month, Motor Trend magazine named Tesla’s Model S sedan 2013 “Car of the Year.” The magazine said it was the first time the award went to an electric vehicle. — Kern Business Journal

Photo courtesy of Paramount Citrus

The ribbon was cut, opening Paramount’s Cuties plant in Delano.

Paramount Cuties plant opens Paramount Citrus recently celebrated the grand opening of its new citrus packinghouse in Delano. The facility will be the home of the company’s sweet, seedless, E-Z peel Cuties California Mandarins. The plant measures in at more than 640,000 square feet – the equivalent of 11 football fields under roof – making it the world’s largest citrus packinghouse. The Cuties plant was built to keep up with the skyrocketing demand for the small fruit. Last season, Paramount Citrus and its partners packed and shipped 60 million boxes of Cuties. That number is expected to reach 140 million boxes in five years. The Cuties plant is expected to generate increased economic devel-

opment in the Delano area, bringing with it more than 500 new jobs. — Paramount Citrus

Tesla supercharging at Tejon Ranch station Palo Alto-based electric car manufacturer Tesla Motors opened up one of California’s six new supercharging stations at the Tejon Ranch Commerce Center this fall. Tesla is offering free access to its

Bank ‘starring’ in documentary film An independent production company visited Bakersfield recently to profile the success of Valley Republic Bank for an educational film series to air nationally in early 2013. Profiles Series Productions LLC, the producer of “In View with Larry King,” is creating an educational series focusing on the important role community banks play in local economic recovery. In addition to interviewing VRB management, the crew filmed Heather Dewar Cook of Dewar’s and Tim Sullivan of Sullivan Petroleum about their community banking experiences. The series will explore banking in the aftermath of the 2008 national economic and financial institution crisis. It will review the impact of imposing “Wall Street Banks” checks and balances on smaller “Main Street Banks.” Legislation designed to return large banks to more conservative practices has posed

challenges for community banks as they struggle to comply with a barrage of new regulations. Valley Republic Bank is the only California bank featured in the series. — Valley Republic Bank

Business ethics recognized The Better Business Bureau of Central California is accepting nomination for the BBB Ethics Award for Marketplace Ethics. Awards will be given in the following categories: Marketplace Excellence, recognizing superior commitment to exceptional standards that benefit consumers, employees, suppliers, shareholders and surrounding communities; Community Service, recognizing a business that demonstrates commitment to BBB community events and significantly helps advance community trust. Nominees must be in good standing with BBB; however, BBB Accredited Business is not required for entry or consideration. Businesses must operate within the bureau’s Central California service area. Contact 800-675-8118 to nominate a business. — Better Business Bureau

Centre for Neuro Skills expands facilities For most of its 32-year history, Centre for Neuro Skills has provided patient-centered brain injury rehabilitation at their Mount Vernon Avenue clinic. This month, CNS, with more than 300 local employees, will move into its new, flagship location at 5215 Ashe Road.

The more than 22,500-squarefoot energy efficient building will offer an indoor therapy pool, updated therapy departments, and large occupational and physical therapy gyms to support the treatment of individuals recovering from traumatic brain injury. CNS will be the first California treatment facility to feature the ZeroG Gait and Balance Training System to provide state of the art care. CNS also has facilities in Los Angeles, San Francisco and Dallas, Texas. — Centre for Neuro Skills

EDF dedicates Kern wind, solar projects EDF Renewable Energy, formerly enXco, is celebrating the construction and operation of two Kern County projects producing clean energy for Southern California. The 140 MW Pacific Wind and 143 MWp Catalina Solar projects were developed and contracted independently; however, their close geographic proximity to one another enabled the projects to share certain infrastructure and thus evolve into one of the largest wind/solar hybrid projects in the U.S. Pacific Wind began operation in August 2012 and the first phase of Catalina Solar will begin operation in December 2012 in eastern Kern County. Both deliver carbon-free electricity into the grid for the benefit of San Diego Gas & Electric Co.’s generation portfolio under two separate power purchase agreements. These new projects bring the total

Continued on page 30

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Transportation and logistics industry draws national businesses to Kern County By Cheryl Scott

Kern County is leading the nation in post-recession job recovery thanks, in part, to a local explosion in transportation, logistics and advanced manufacturing projects. In just the past year, more than 1,200 local jobs have been created in this industry sector. A common perception is that U.S. businesses avoid California at all costs. In reality though, California continues to be the most populated state in the nation, and Kern County is an attractive option for businesses needing to get their product to Californians and other western region consumers. Decisionmakers list the following benefits as some of Kern County’s most important features: • More than 36 million consumers are within a four-hour truck drive. • The cost of doing business in Kern County is just 85 percent of the national average. • The Port of Long Beach is just 96

miles from Kern County; the distance to the Port of Oakland is 230 miles. • Kern County and its municipalities are pro-business and work with new businesses to get their projects permitted quickly. • The local workforce is well-trained and experienced for logistics and warehousing employment. • Multiple shovel-ready sites are available in Kern County. • Local and state training programs are available to offset the cost of employee training, and can even help in the recruitment of personnel. Kern Economic Development Corporation (Kern EDC) promotes these benefits to executives across the country, often working with representatives from other San Joaquin Valley counties to draw attention to the region. After initial interest in the valley is expressed,

n Washingto

ota

North Dak

24 Hrs ota

South Dak

Idaho

Oregon

395

18WyoHminrgs

15 80

sco San Franci Oakland

Salt Lake

Nevada

to Sacramen Stockton

6 Hrs Calfornia 99 2 Hrs 15 Fresno

Long Beac

80 City

Denver

Utah

Colorado

Kansa

Las Vegas

Arizona

ty Kern Coun

Nebraska

12 Hrs

es Los Angel Riverside

San Diego

Recent rankings reflect growth in Kern County’s top industries

Montana

17 10

Albuquerq

ico

New Mex

Phoenix

More than 36 million consumers are within a four-hour truck drive of Kern County.

Texas

First in job creation among largest U.S. counties U.S.Bureau of Labor Statistics, December 2011

Top county for manufacturing jobs’ growth in the United States U.S.Bureau of Labor Statistics, June 2012

Second-fastest metro job recovery area in the United States Brookings Institution, June 2012

Top metro for real GDP growth in the United States Bureau of Economic Analysis, July 2012

Kern EDC begins a concerted effort to bring the project to Kern County. Bringing a project to fruition requires a team approach with the local developer, Kern EDC and the municipality or the County of Kern working together to expedite the process and demonstrate to the client that Kern County wants their business. Some recent logistics and warehousing successes in Kern County include Dollar General, Caterpillar, Weatherford, Baker Hughes and Paramount Citrus. With Fortune 500-type companies considering Kern County as their next possible area for expansion, the future continues to look promising. — Cheryl Scott is vice president of Kern Economic Development Corporation

Kern County solving difficult logistics challenges By Jon DeCesare

upply chain network design is extremely difficult today considering the global goods movement uncertainties and challenges confronting manufacturers and retailers. Here are a few of the challenges and uncertainties shippers face: • China’s wages have been increasing at a double digit pace each year since 2010. These rising costs are pressuring multi-national corporations to find new manufacturing areas and modify their supply chain strategies. • The American Trucking Association estimates the long-haul driver shortage will reach 111,000 by 2014. Reduced trucking capacity and service levels will result. • As China, India and Brazil’s middle class expands in size, these countries will add pressure to the global fuel supplies, creating significant cost increases. • Ocean carriers will continue their practice of “slow steaming” to help absorb extra vessel capacity and offset rising bunker fuel costs, which negatively impacts just-in-time supply chain strategies. • Natural disasters, such as the earthquake, tsunami and flooding that struck Japan and Thailand, proved costly to extended global supply chains. It is uncertain when and where the next disaster will strike. • During 2005-06, when the economy was booming, shippers were experiencing goods movement capacity constraints and congestion. There is concern that as the economy recovers from the downturn, these issues will reappear. Kern County provides a reliable, flexible logistics solution for these uncertain times. My logistics consulting company has conducted supply chain and warehouse site selection studies across the United States, including many locations in California. We have interviewed warehouse general managers from Stockton/Tracy and Kern County, as well as in the Inland Empire and as far south as San Diego County. We have repeatedly found that Kern County provides corporations with a number of unique logistics advantages compared to other California locations: Reliable workforce with good work ethics — A number of Kern’s warehouse associates have previously worked in the agriculture industry. They have brought to the warehouse operations a good work ethic and strong commitment to being a reliable worker. Trucker-friendly locations — Many of the county’s industrial developments are located along Interstate 5, California’s major north/south freeway. The Tejon Ranch Commerce Center’s location adjacent to I-5, with quick access to the warehouse facilities, is an excellent

Photo courtesy of Tejon Ranch Co.

The high volume of truck traffic makes Kern County well-suited for distribution centers.

location for trucking companies. The modern truck stop facility with numerous restaurants affords the truck drivers a convenient place to park their rigs when waiting for a delivery or pick-up appointment. Planned industrial parks — Many of the developers in the area seemed to have studied the problems encountered with Inland Empire goods movement. These involve the development permitting process and include residential/warehouse operations clashes. Kern County developers have ensured that their plans mitigate these issues. Many of the planned industrial parks are positioned to avoid future clashes between residential areas and warehouse operations. Proven success record of public/private partnerships — Kern’s developers, landlords and government agencies have good track records when it comes to effective collaboration and public/private partnerships. For example, the Tejon Ranch Commerce Center was successful in implementing a public transportation commuter bus service from Bakersfield to the Commerce Center, and building a county fire station in the center. The evidence is clear. Throughout Kern County, you find leading-edge supply chain corporations, such as Caterpillar, Dollar General, IKEA, Famous Footwear, Frito Lay, Sears, Target Stores and Wal-Mart. The Gartner Annual Supply Chain Top 25, a ranking of the global shippers managing the best logistics and supply chain management programs, includes Caterpillar and Wal-Mart. The biggest challenge to Kern County is to effectively communicate the region’s logistics solution for our times. — Jon DeCesare is president of World Class Logistics Consulting Inc.

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

Steven T. Clifford Partner, Clifford & Brown For more than 45 years, the law firm of Clifford & Brown has developed a reputation as an experienced and respected firm providing a wide range of transactional work and litigation for businesses, offering counsel on complex tax advice, real estate planning and related services. The firm is uniquely positioned to provide its clients a full range of business and personal legal services. Steve Clifford joined the firm in 1966 as its first associate. Now, with more than 20 attorneys, Clifford & Brown is confident Valley Republic Bank will be there to foster the firm’s growth for many years to come.

Local. Responsive. Reliable. 5000 California Avenue, Suite 110 661.371.2000 11330 Ming Avenue, Suite 400 661.617.2130

valleyrepublicbank.com

Valley Republic Bank

is honored to have been named the

SAFEST BANK between Los Angeles and Sacramento by MSN Money. We join 15 California banks in earning a place on the list of

“The 359 Safest Banks in America.” ....................

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Kern gives real meaning to ‘shovelready’ By Joseph E. Drew Sr.

ndustrial/commercial developers often tout a site as “shovel ready,” meaning ready for construction. But in many parts of California, unmitigated site issues, combined with the slow processing of site and building permits, can result in “shovel ready” meaning not ready “anytime soon.” In Kern County things are different. Thanks to a business-friendly county government, “shovel ready” really means “shovel ready.” The county’s streamlined permit processing is second to none. Add to the mix a capable and experienced development team that understands how to work with the county, and projects can really move. A case in point is the new 400,000-square-foot parts distribution center built for Caterpillar Logistics Inc. at the Tejon Ranch Commerce Center. That project progressed from deal to delivery in only eight months. Dean Brown, Tejon Ranch’s construction and engineering director, and Jeff Pink, program manager for Caterpillar Logistics Inc., began meeting with the county even before the transaction was closed. This introduced the project and outlined delivery times. With this information, the county could earmark the resources it needed to process plan submittals, including turning to third party firms, if necessary, to deal with specialized plan check items. “This process allows for the county to be ready for plan submittal, as opposed to seeing it for the first time on initial plan check,” explained Brown. Once the process is underway, the county provides options that can cut months off the project schedule. For example, the county allows for an “engineered certified” grading permit, where the project’s engineer can obtain the permit over the counter. The engineer is required to sign off on the grading once it’s done and provide copies of compaction test results and other documents the county verifies before moving to the next step in the construction process. Electing to use this approach can cut three weeks or more from the schedule. The county will also issue a “foundation only” permit, typically after the first plan check submittal. This can cut four plus weeks off the project completion. Almost as critical as the county’s process is the need to deal early with the major utilities, which can take longer than designing and permitting a project. “More often than not, the utilities are brought into a project at the 11th hour,” said Brown, explaining a last-minute approach can cause delays. This is where having an experienced development team is critical. In the case of Caterpillar, Tejon Ranch’s existing relationships with the utilities made all the difference. Tejon notified the utilities once Caterpillar began looking at the site. Attracting major companies to an area is very competitive. Having available, attractive building sites, experienced development teams, and streamlined permit processing gives Kern County a competitive advantage. — Joseph E. Drew Sr. is Tejon Ranch Co.’s vice president of real estate.

Photo courtesy of Tejon Ranch Co.

Aerial photo dramatically depicts the development of the Tejon Ranch Commercial Center, along Interstate 5, south of Bakersfield.

Location, lower costs make Tejon a success By Barry Zoeller

y any measure, the Tejon Ranch Commerce Center is a success. It is Kern County’s leading location for major distribution centers, a key link in California’s logistics and goods movement industries, and a major force for economic development and job creation in Kern County. Located at the junction of Interstate 5 and Highway 99, about 20 miles south of Bakersfield, the Tejon Ranch Commerce Center hosts more than 3.5 million square feet of industrial space, with an additional 16.5 million available. It is home to major distribution facilities for IKEA and Famous Footwear, and in 2012 added Dollar General and Caterpillar to the mix of major companies located within the development. A number of factors have led to the Tejon Ranch Commerce Center becoming one of the hottest commercial/industrial developments in California. But its strategic location has to be chief among them. Located at the geographic population center of California and along Interstate 5, the state’s principal north-south highway, companies located at Tejon can serve 97 percent of California consumers within a single day’s truck turn-around. That’s a huge advantage for companies looking to serve California and the adjacent Western states. It was a key reason why Dollar General chose the Tejon Ranch Commerce Center. “The Tejon Ranch distribution center is strategically located to serve our supply chain needs as we continue to expand westward,” said John Flanigan, executive vice president of global supply chain for Dollar General. “From its central location, our supply chain team can deliver goods to stores in northern and southern California in a day.” A second major factor is the overall low cost of operations. Compared to its chief competitor, the Inland Empire, as well as the rest of the state, the Tejon Ranch Commerce Center offers significant advantages in the cost of labor, land and transportation, which make up the majority of the overall costs of operations. Starting wage rates for distribution center workers average up to $2 less per hour than those in Southern California and the Inland Empire. Land costs are 50 percent lower than the Inland Empire and nearly 80 percent lower than Santa Clarita. Transportation costs are also lower, as trucks leaving the port don’t have to navigate the severely congested routes leading to the Inland Empire. Ken Gladwin, shipping supervisor at Famous Footwear, summed it up this way, “The Tejon Ranch Commerce Center is a great location. The land and labor is less expensive and there’s less congestion. It’s perfect for just-in-time deliveries.” Based on its lower land, labor and transportation costs, a 1 million-square-foot distribution facility at the Tejon Ranch Commerce Center would save a company $3 million per year, compared to a similar-sized facility in the Inland Empire. The availability of skilled labor is another factor behind Tejon’s success. Companies have access to thousands of capable, dependable workers and local residents are provided new job opportunities. Jobs in the goods-movement industry are in high

demand in Kern County with distribution centers attracting an average of up to 10 pre-qualified applicants per job opening. Kern County’s lower cost of living allows companies to offer lower compensation than other areas of the state, while still providing a competitive, livable wage. In the Bakersfield area alone, the labor pool for such jobs is in excess of 75,000 people. A primary source for labor is Kern’s agriculture industry, which is highly mechanized and provides a steady stream of skilled workers looking to transition to distribution-related businesses “We’ve found a great talent pool in the local area, and have had success filling jobs and retaining associates,” explained Patrick Rasmussen, distribution center manager at Famous Footwear. “Productivity is 15 percent higher than we had originally expected,” said Rasmussen, explaining that associates routinely are able to do in five to six hours work he expected would take eight hours. Turnover at distribution centers at the Tejon Ranch Commerce Center averages less than 5 percent, a fraction of the typical turnover rate found at distribution centers in the Inland Empire. It also helps that Tejon makes it easy for workers to commute to their jobs. The Commerce Center is an easy 30 minute or less commute from Bakersfield and other nearby communities. A Park ‘n Ride facility in south Bakersfield and several other dedicated public transportation options make the ride to work easy and convenient. One of the keys for any distribution facility is to get product in and out of the facility to its final destination as easily and efficiently as possible. The Tejon Ranch Commerce Center provides easy access from the ports, with less traffic congestion than the Inland Empire and other developed urban areas. Being positioned between California’s two major port facilities – the Ports of Los Angeles/Long Beach, two hours to the south, and the Port of Oakland, five hours to the north – adds flexibility and redundancy. Companies have direct northbound and southbound access via I-5, which bisects the Commerce Center, and easy access eastbound, via Highway 58 to I-40 and I-15. The airport is also only a 30-minute drive away. These logistical efficiencies were extremely important to Caterpillar. “With its excellent accessibility to major highways and airports, Tejon’s location will ensure the rapid delivery of Cat parts to dealers and customers,” said Steve Larson, vice president of Caterpillar Inc., and chairman and president of Cat Logistics. Pam Andrews, general manager at IKEA, agreed. “We are extremely happy with outbound efficiency, so much so that our Tejon location will be handling direct turnaround deliveries to our Southern California stores.” Tejon’s success is also poised to continue as the Tejon Ranch Commerce Center is one of the few entitled industrial developments in the state with building sites that can accommodate big box facilities, warehouses upwards of 2 million square feet in size. There is increasing demand for these larger distribution centers as companies seek to consolidate operations, reduce costs and increase efficiency. — Barry Zoeller is Tejon Ranch Co.’s vice president of corporate communications and marketing.

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

Outlet mall envisioned as shopping, tourism mecca By Rebecca A. Swiggum

he Tejon Ranch Commerce Center is already a successful retail center. Located in an area that was once home to stage coach stops, general stores and trading posts, the Tejon Ranch Commerce Center has become a modern day “way station” for the millions of travelers who make their way up and down the state on Interstate 5. The Starbucks coffee shop located there, for example, was the top performing Starbucks in the country over the 2011 Thanksgiving holidays. The ranch now is working with The Rockefeller Group to develop The Outlets at Tejon Ranch, an upscale outlet retail center planned for the east side of the Commerce Center, at the Laval Road exit. Plans envision nearly 325,000 square feet of retail space in Phase One, with a mix of brands and labels similar to those seen in other outlet centers throughout the state and nation. Tejon and Rockefeller are involved in sensitive lease negotiations with potential tenants. As a result, they are not able to reveal the names of the brands and stores that may be coming to The Outlets at Tejon Ranch. However, retailers from every spectrum of the outlet world have expressed enthusiasm about the location and the market. Outlet centers typically serve a market that’s within an hour’s drive of the location. In the case of The Outlets at Tejon Ranch, that would mean the 3.2 million people who live in greater Bakersfield and other nearby Kern County communities, along with those living in the northwest Los Angeles County communities of Santa Clarita, Valencia, Castaic, Palmdale and Lancaster. In addition, the outlet center would give the millions of tourists and travelers who

Drawings courtesy of Tejon Ranch Co.

Above and below: Artist renderings depict the outlet mall proposed for construction in the Tejon Ranch Commercial Center.

have already transformed the Tejon Ranch Commerce Center into a popular “stopping center” an additional reason to stop and shop. “We are looking forward to once again joining forces with The Rockefeller Group,” said Robert A. Stine, president and CEO of Tejon Ranch Co. “They have already proven to be excellent and astute partners in our industrial real estate development efforts, and we have every confidence that together, we’ll develop one of the country’s most successful outlet centers.” Founded more than 80 years ago to develop Rockefeller Center in New York, The Rockefeller Group is a leading global real estate owner, developer and investor. It has completed nearly 40 million square feet of development projects throughout the United States and its parent company has completed eight outlet centers in Japan.

“We are very pleased to have the opportunity to expand our partnership with Tejon Ranch Co. and to develop what we believe will become the region’s destination retail outlet center,” said Kevin R. Hackett, president and CEO of The Rockefeller Group.

No specific date has been set for when the outlet center would open, but both companies are targeting the spring of 2014 for a potential opening date. — Rebecca A. Swiggum is Tejon Ranch Co.’s director of marketing.

Grapevine closure problem really just a myth By Hugh F. McMahon IV

henever a heavy winter storm drops snow on the Grapevine, causing a temporary closure of Interstate 5, it makes news on both sides of the mountains – in both the Central Valley and Southern California. News by its very definition is something that rarely happens. The fact that the closure is considered “news” means it happens infrequently. But that hasn’t stopped some people from erroneously concluding that weather-related closures of the Grapevine are regular occurrences. Such a perception presents a challenge for logistics and transportation companies in Kern County. But as is often the case, this perception is not based on reality. A close look at statistics reveals that the Grapevine is not closed any more often than other major highways in California. According to the California Highway Patrol, the Grapevine is closed an average of 30 hours per year. And when one examines total closure time due to all circumstances — weather, accidents and congestion — this main route from the Los Angeles and Long Beach ports to Kern County actually closes less often than the main routes from the ports to locations in the Inland Empire. An analysis of California Department of Transportation data from 2008 to 2010 shows the total hours of closures for the main routes from the ports to key distribution locations

Photo by Casey Christie

A Caltrans worker keeps busy clearing Interstate 5 near Fort Tejon State Historic Park.

throughout Southern and Central California: • Port to Inland Empire, east via Interstate 10 — 218 hours • Port to Inland Empire, east via Highway 60 — 151 hours • Port to Inland Empire, east via Highway 91 — 140 hours • Port to Tejon Ranch Commerce Center, via Interstate 5 — 121 hours When determining the impact of road closures, not only is the frequency an important factor, but one must also ex-

amine the nature of the closures. When do they happen? Can they be anticipated? Are there alternate routes available? Once again, using these criteria, Grapevine closures present less of a problem. When the Grapevine does close, it’s usually at night or in the early morning hours, when temperatures are at their coldest and when traffic is lightest. While weather forecasting is an imperfect science, there still is usually advanced warning of the possibility of a closure, which makes it easier to plan for. In the event snow is forecast, Highway 14 is a good alternate route. While any highway closure is inconvenient, it certainly hasn’t stopped major companies, such as IKEA, Caterpillar, Dollar General, Famous Footwear, Target, Sears, Nestle and Frito Lay from establishing distribution centers in Kern County. According to Ken Gladwin, shipping supervisor at Famous Footwear’s Tejon Distribution Center, who came to Kern County from the Inland Empire, operations are better and more predictable in Kern County. “Having worked in the Inland Empire, I can tell you it’s a logistical nightmare getting things from the ports,” he said. “You have two massive freeway interchanges that are always congested. That’s never going to change. The Tejon Ranch Commerce Center is a straight shot. Even though there may be more mileage, ETAs (estimated time of arrival) are much smoother at Tejon.” — Hugh F. McMahon IV is Tejon Ranch Co. vice president of commercial/industrial real estate.

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Kern’s distribution cluster expands state’s economy By Robert Ball

40 Locatedwithin within50 50 miles Miles of of the the 2010 40 Distribution distribution Centers centers located 2010 Center center of of Population population Located in Kern County approximately 5 miles west of Bakersfield and Shafter, the geographic center of population is the weighted single point that is closest to all people in California. It is the location with the lowest shipping cost and carbon footprint for facilities designed to ship to consumers statewide.

Logistics Distribution Centers (DC) AndrewsAg Inc. Anthony Vineyards Bolthouse Farms Camping World DC CARQUEST DC Caterpillar Delano Farms Dollar General DC Famous Footwear DC Four Star Fruit Frito-Lay Garcia Farming Grimmway Farms Hure Brothers IKEA DC Johnstons Farms Kern Ridge Growers King Pak Potato Kirschenmann Farms Lucich Farms

I-80 a ro ur n yT

ile M

un d

a 1 -D y Sac. as

1.4 M

Contra S.J. Costa 0.7 M S.F. 1.0 M 0.8 M San Alameda Mateo 1.5 M 0.7 M Santa Clara 1.8 M

Bay Area/ Sacramento 10 Million consumers

s ile

Las Vegas 1.9 M

" WALMART

" " " RAILEX " "" "

SEARS

5 I-1

" TARGET " "" Kern " " """ " "0.8 M " " " " "" "" " NESTLE/ " " DREYER'S " "

PARAMOUNT FARMS FRITO LAY

I-40

0 12.5 25

Although some projects are not yet fully funded, opportunities exist for local investment to improve the region’s economy. Investment in an inland port connection via rail to the ports of Los Angeles/Long Beach and Oakland would further improve distribution efficiency within California. The City of Shafter is developing the Shafter Intermodal Rail Facility (SIRF), which would bring in containerized freight via rail and then refill empty containers with products from the region to be shipped back to the ports. Shipping full containers in both directions will improve distribution efficiency, while increasing the demand for products from Kern. The potential benefit to Califor-

Miles 100

Southern California 22 Million consumers

nia’s economy could be in the billions. Focused investment in a more efficient transportation/distribution system is the engine that will grow an economy, not only though construction, but also through the long-term expansion of the region’s consumer base and demand for products and services. Centrally locating production and distribution centers as close as possible to consumer markets, and reducing travel time and congestion to those markets, makes products and services more affordable and competitive, and increases demand. As the regional transportation planning agency, Kern COG conducts studies to collect data, analyze freight movements

a rou

ay Tur n

1-D

I-10

Major Route Used by Central Distribution Centers

Riverside 2.1 M

Orange 3.0 M

County Proportional Population

San Diego 3.0 M

ile

Distance From Center of Population

Distribution Centers

San Bernardino 2.0 M

L.A. 9.0 M

Ventura 0.8 M

IKEA

California Geographic Center of Population "

M Caratan Minda Nestle/Dreyer's Pandol Brothers Paramount Citrus Paramount Farms Prime West Warehousing Railex DC Redbank-Malaga Sears DC Sierra Farms Sunridge Nurseries Sun Pacific Bakersfield Sun Pacific Maricopa Sun Pacific Tulare Sun World Target DC Thomson International U.S. Cold Storage of California Walmart DC

Fresno 0.9 M

For centers distributing products statewide, the southern San Joaquin Valley has the lowest transportation costs and carbon footprint of any place in California.

California Logistics Distribution Center Cluster I-5

oted for its agriculture, energy production and aerospace industries, Kern County is also the location of a cluster of centers that distribute products and services to a rapidly growing West Coast, where 40 million consumers call home. Kern Council of Governments recently analyzed distribution centers within 50 miles of central Kern County, which also happens to be California’s population center. The analysis found 40 production/distribution centers clustered within or very near the region. According to the U.S. Census Bureau, Kern is the population center of the state because twice as many people live in Southern California as in the Bay Area and Sacramento. For centers distributing products statewide, the southern San Joaquin Valley has the lowest transportation costs and carbon footprint of any place in California. Companies such as Frito-Lay, Target, Sears, Wal-Mart, IKEA and Nestle/Dreyer’s have benefitted from this fact for decades. This year alone, Caterpillar and Dollar General have constructed distribution facilities within the cluster. The location provides for an easy, oneday turnaround trip to the state’s largest population concentrations, which include San Diego, Los Angeles, Sacramento and the Bay Area, as well as Las Vegas. Frito-Lay is a prime example how important an efficient distribution system is. Frito-Lay manufactures a light, bulky product that is distributed to grocery stores and sandwich shops throughout the state. The transportation cost per ounce is one of the highest for all consumer products. Placing a production and distribution facility in Kern – the state’s geographic population center – is a sound business decision. In fact, the state’s population center has been shifting closer to Frito-Lay’s Kern County facility as growth in Southern California continues to drag the center south and east. Several key transportation projects are already under way or at least partially funded that will benefit distribution to and from the southern San Joaquin Valley. They include: the Shafter Intermodal Rail Facility; Tehachapi Pass Rail Corridor Improvement Project (double-tracking); Centennial Corridor (Highway 58 connection between Highway 99 and I-5); and various improvements on other major freight movement routes throughout Kern. These projects and others are expanding Kern’s consumer demand for goods and services, and driving job growth in the production, services and distribution sectors. In 2012, Kern had the fastest employment growth in the nation, adding over 5,000 jobs.

August 2012

and plan future transportation improvements. These studies include: an examination of truck origins and destinations; rail operations inventories; at-risk rail segments; economic and air quality benefits of rail service; and a San Joaquin Valley-wide goods movement plan All studies are available for download at: http://kerncog.org/cms/publications/publications under the sections Goods Movement and Rail Studies. Kern COG is scheduled to update the long-range Regional Transportation Plan in the fall of 2013. To provide input, go to www.directionsto2050.com — Robert Ball is the planning director for the Kern Council of Governments.

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

TOTAL NET SAVINGS

7,600

$VN DERXW ILQDQFLQJ LQ OLHX RI IDFWRU\ UHEDWH

Brian Ek, Manager 661-201-7437

Art Montsinger 661-978-7015

TOTAL NET SAVINGS

7,400

$VN DERXW ILQDQFLQJ LQ OLHX RI IDFWRU\ UHEDWH

TOTAL NET SAVINGS

9,500

&HUWDLQ YHKLFOHV PRGHOV DQG UHVWULFWLRQV DSSO\ &RQVXOW \RXU WD[ SURIHVVLRQDO IRU GHWDLOV

Daniel Gutierrez 661-679-9479

Bert Roberts 661-204-6026

Joseph Wilkerson 661-201-7459

Bryan Fahsbender 661-344-2800

2UDNICK #T s "AKERSFIELD #! s 7AY!UTOMOTIVE COM All advertised prices exclude government fees and taxes, any finance charges, any dealer document preparation charge, and any emission testing charge. Prices valid through 12/31/12.

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

TRIP: Unsnarling metro Bakersfield’s roads By Janet Wheeler

etropolitan Bakersfield’s transportation network is getting a much-needed upgrade. In the past five years, nine construction contracts have been awarded, totaling $215.3 million dollars. These projects include the construction of 23 bridges and 15 miles of new roadway. Five major road improvement projects have been completed and are now open to traffic, while construction continues on five miles of new roadway for the Westside Parkway. But there’s still much more to come. Most of the planned road improvements are the result of now retired 22nd District Congressman William M. Thomas’ successful efforts to secure $630 million for projects in metropolitan Bakersfield in the 2005 transportation bill, titled SAFETEA-LU. Many of these projects had been identified in the 2002 Bakersfield System Study as necessary for a regional transportation network capable of meeting current and future needs. But it was not until the federal funding was in place that local planners were able to move forward with project development. Thomas was able to secure funding for these projects based on the critical need to improve efficiencies for inter-regional goods movement, as well as for area-wide congestion relief. With funding identified, the City of Bakersfield, Kern County, Caltrans and the Kern Council of Governments formed the Thomas Roads Improvement Program (TRIP) partnership. The program manages the projects cited in

CELEBRATING CELEBRATING

Photo by Gilbert Vega/Parsons Corp.

Workers pour concrete on an overpass in the Thomas Road Improvement Program.

the federal legislation, as well as the state-funded Westside Parkway Project. Under the TRIP umbrella, the partnering agencies have staffed a joint office and work collaboratively through each

project’s environmental, design and construction phases. Each project has moved forward on its own timeline due to varying sizes and complexities. But significant progress has been made since the program’s inception.

. On-call HR consultation . Employee policy handbooks . Retainer programs with unlimited assistance, reduced rates and FREE training . New employee recruiting . Supervisory and employee training . Human resources . Employee hotline audits services . Job description creation . Employee opinion surveys . Compensation surveys and assistance . Off-site and on-site human resources support . Harassment/Discrimination investigations

Our priority is people. CERTIFIED HR PROFESSIONALS . LEGAL COUNSEL . INVESTIGATIONS Our product is service. HUMAN RESOURCES SOURC URCES CE ES C CON CONSULTANTS CERTIFIED HR PROFESSIONALS . LEGAL COUNSEL . INVESTIGATIONS YEARS IN BUSINESS

For a list of training sessions, visit: www.PASassociates.com/training.htm Training presented On-Site, Online or at the P .A. S Training Center See what our clients are saying at www.PASassociates.com/clientele.htm

1401 19th STREET SUITE 235 BAKERSFIELD, CA 93301 www.PASassociates.com

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

Photo by Gilbert Vega/Parsons Corp.

Paving is underway as part of the Westside Parkway construction.

Already complete and open to traffic are the Highway 178/Fairfax Road interchange; Highway 99/7th Standard Road interchange improvements; 7th Standard Road widening; 7th Standard Road/BNSF grade separation; and Phase 1 of the Westside Parkway — the Mohawk Street extension, which was completed eight months ahead of schedule. The three phases of the Westside Parkway that are currently under construction, between Truxtun Avenue and Allen Road, are expected to open simultaneously in early 2013, just as three new TRIP projects break ground. The new projects include: the Highway 178/Morning Drive interchange, which will build a new interchange and extend the freeway for approximately 1.5 miles; the Highway 58 gap project, which will widen Highway 58, from four to six lanes, between Cottonwood Road and Highway 99; and Westside Parkway Phase 6, which will complete the western end of the new freeway, between Allen Road and the Stockdale Highway/Heath Road intersection.

Construction is only about a year out on two additional projects. Rosedale Highway, which is one of the area’s most congested roadways, will be widened from four to six lanes between Allen Road and Highway 99. The first phase will extend from Calloway Drive to Highway 99. The Highway 178 widening project will complete the improvements scheduled for this east Bakersfield corridor by widening the roadway to add additional lanes from Canteria Drive to Rancheria Road. Construction on the first phase of the project will extend from Canteria Drive to Miramonte Drive. Also coming in early 2013 is the release of the 24th Street Improvement Project final environmental document and the Centennial Corridor Project draft environmental document. Approval of the 24th Street Improvement Project would relieve traffic congestion and improve circulation through this heavily-used east-west corridor, accommodating existing and forecasted traffic volumes through 2035. If ap-

‘Old technology’ still serves cutting-edge hospital By Teresa Adamo

delivery and communications system that has existed for nearly two centuries continues to adapt to the demands of a state-of-theart Bakersfield hospital. Invented by William Murdoch in the early 1800s, the pneumatic capsule transportation system used air and pressure to send a tube from one locale to another. But initially it was considered to be little more than an interesting novelty until the invention of the capsule in 1836. This allowed the system to carrying telegraph messages to nearby buildings from telegraph stations. It was a precursor to the tubes’ use in the modern-day business world. — Lori Muir. AIS Fast forward Cancer Center Director 176 years. San Joaquin Community Hospital recently completed a major expansion of its existing pneumatic tube network. Manufactured by Switzerlandbased Swisslog, the expanded system will connect the hospital’s new laboratory department, which is being constructed along 27th Street, and the new AIS Cancer Center, which will be opening in late 2012 on the east side of Chester Avenue, directly across from the hospital. A new passageway also has been installed to accommodate a planned third patient tower.

“You really don’t have to re-invent a system when it works already.”

Expansion of the hospital’s pneumatic tube network was a $1.7 million investment that required extensive trenching through the hospital’s main parking lot and along 27th Street, as well as tunneling under Chester Avenue. “It’s an initial capital expense, but the savings on daily operating costs will go on and on for years,” said Sam Itani, SJCH’s vice president of support services. “We can immediately eliminate the need to send people back and forth across the street or up and down elevators, stairs, etc.” “Being across the street from the hospital and lab could create challenges for us in terms of timely delivery. However, this saves personnel time and effort running back and forth with labs, small supply items and other communications,” said AIS Cancer Center Director Lori Muir. “It demonstrates that although there have been many advances in technology, the basic concept of an efficient delivery system has stayed the same. You really don’t have to re-invent a system when it works already.” But today’s tubes – although dating back to the 1800s – have their own modern twists. The type used at SJCH provides the additional safety and security needed in the health care arena through electromagnetic locking technology. A valid PIN code must be entered into a keypad for the lock to release. This secures the tubes from any public access areas, while also protecting confidential patient information. — Teresa Adamo is San Joaquin Community Hospital’s senior marketing and communication coordinator.

proved, construction would begin in early 2014. TRIP’s largest and most complex project – Centennial Corridor – would correct deficiencies and improve east-west connectivity for local residents, as well as for inter-regional travelers using Highway 58. This route provides all-weather access across the Sierra Nevada Mountains. But the corridor lacks continuity through Bakersfield. Existing conditions do not meet current capacity needs. These conditions are only expected to get worse as the population grows. Highway 58’s discontinuity begins at the junction of Highway 99, the only major north-south freeway through Bakersfield. The two routes share a two-mile section of freeway before Highway 58 continues westward on Rosedale Highway. The route is offset once more, for about a mile, at Highway 43. The proposed project would extend Highway58 west of Highway 99 to provide a freeway connection with the Westside Parkway, which extends to Stockdale Highway and Heath Road. Traffic would then continue on to Interstate 5, via Stockdale Highway. Work to date has concentrated on preliminary engineering efforts, and the extensive and complex environmental studies required for each of the alternatives under consideration. In November, Caltrans recommended the selection of “Alternative B” for the Centennial Corridor Project alignment. The project’s draft environmental impact report is expected to be completed in the spring. Following approval of the final environmental document, project design will be completed and the project can move into construction. With the completion of each TRIP project, both local residents and inter-regional travelers will begin to realize the benefits of a fully-connected transportation network. These include the economic benefits of construction employment; commuter and traveler time savings and safety; and improving industry productivity by improving the ability to efficiently move goods and supplies to and from outside markets. An efficient transportation network is vital to the growth of local business and industry – and the jobs they provide. To stay informed of construction activity, sign up to receive email alerts at www.bakersfieldfreeways.us. — Janet Wheeler is the public outreach coordinator for the Thomas Roads Improvement Program.

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Space port has ‘down to earth’ use as logistics center By Karina Drees

ojave has become a recognized name throughout Kern County with its thriving commercial space community, civilian test flight center and iconic landscape. But it may surprise some people to learn that Mojave is also a major regional logistics hub. Located at the intersection of two major highways and a busy rail line, the Mojave Air & Space Port is situated to help keep California’s industries moving. Occupying more than 200 acres of a former Marine Corps training base, the Mojave Air & Space Port is home to 75 companies, employing more than 1,100 highly skilled technical personnel. The continuous development in the region brings an additional 500 to 1,000 workers in to Mojave every day. In addition to being a destination for entrepreneurial space enthusiasts, Mojave Air & Space Port is a transportation hub, hosting logistics companies, such as UPS and Ameriflight. The airport offers 24-hour security and ample space for warehouses and commercial zoning, allowing wind companies to stage their large wind turbines and equipment on the vast airport property prior to distribution throughout the Antelope Valley. Mojave has been a transportation crossroads since the West was settled. Founded by the Southern Pacific Railroad in 1876, Mojave continues to be an important conduit for heavy and medium rail. Once the historic destination for minerals travelling from Death Valley down the historic “20 Mule Team Road,” Mojave now connects to one of the busiest rail segments in the world. Today, Mojave is at the four-way intersection of BNSF’s Barstow line and Union Pacific’s Tehachapi Pass line, connecting to Palmdale, Searles and Bakersfield. At 40 trains per day, the UP-owned rail line between Mojave and Tehachapi is one of the most heavily trafficked single-rail corridors in the world. The airport also hosts a major train wheel fabricator, providing the space to machine and store thousands of locomotive axle assemblies, and install directly onto the end user. Mojave is also located at the intersection of two major trucking highways. Highway 14 connects Mojave to Los Angeles to the south and Reno and Carson City to the north. Highway 58 connects Mojave to Bakersfield and western California, as well as to interstate highways 15 and 40 through Barstow in the east.

Photo courtesy of the Mojave Air & Space Port

An aerial photograph of the Mojave Air & Space Port shows the diverse activities at the facility.

Photo courtesy of the Mojave Air & Space Port

Known as a center of aerospace innovation, the Mojave Air & Space Port is also used as a distribution center.

Mojave Air & Space Port is best known as the primary destination for commercial space enthusiasts because the airport provides a permissive environment for entrepreneurs

to build, test and develop the next generation of commercial spacecraft. Today, the Mojave Air & Space Port hosts some of the biggest names in commercial space flight. These entrepreneurs and businesses have discovered the strategic advantages of doing business in Mojave and east Kern County. As a consequence of the research and development being conducted at Mojave, the airport now offers one of the longest runways in the country. At 12,500 feet, it is long enough to support any aircraft in the world, which makes Mojave a destination for air cargo delivery as well as aircraft storage. With roughly 4,000 residents in town and access to several major transportation corridors, Mojave offers plenty of room to grow for like-minded entrepreneurs and business professionals. While many of the industry and logistics in southern California are constrained by space, geography and congestion, Mojave has ample storage area, modern facilities, commercial-grade infrastructure and supportive local partners eager to engage the global supply chain. — Karina Drees is the marketing director for the Mojave Air & Space Port.

Kern County borax mine has international reach By Brent Rush

n eastern Kern County, if you listen closely, you can hear the steady sound of an economic engine that has been beating for 85 years. California’s largest open pit mine has been operating near Boron since 1927, creating local jobs and adding to a diverse Kern County economy. The story of borax actually began in the 1880s in Death Valley, where borax deposits were originally discovered. It wasn’t until the 1920s that a rich, world-class borax deposit was found near present-day Boron, which prompted the move from Death Valley to Kern County. U.S. Borax and its iconic 20 Mule Team laundry detergent has been a staple in homes for years. While borax is still sold as a detergent, the mineral has many more uses in today’s modern world. Borax can

be found in glass, ceramics, fiberglass, and even agricultural products as a micronutrient to increase crop yields. Borax strengthens glass and can be found in smart phones and flat screen televisions. Rio Tinto Minerals, a member of the international mining group Rio Tinto, purchased U.S. Borax in 1967 and has operated the famous borax mine ever since. A major exporter, Rio Tinto Minerals is the only private company with its own facilities and berth at the Port of Los Angeles. Borax is shipped to the port, where it can be transferred aboard large cargo ships at a rate of up to 1,000 metric tons per hour. More than 800 full-time employees work for Rio Tinto Minerals in Boron. The company contributes $150 million to Kern County’s economy in purchases from local businesses, pays $4.5 million to the local tax base and donates $120,000 in charitable contributions to local communities annually.

Photo courtesy of the Port of Los Angeles

Rio Tinto Minerals, which operates the U.S. Borax mine in eastern Kern County, is the only private company with its own facilities and berth at the Port of Los Angeles.

Rio Tinto Minerals is proud of its history at Boron and is committed to being a valued partner in Kern County to help drive long-term, sustainable economic growth. The mine will be operating for many years to come. For more information, stop by the

Borax Visitor Center or visit the 20 Mule Team website at www.borax.com. — Brent Rush is the manager of government affairs and communities for Rio Tinto Minerals – North America.

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Delano

From ‘sleepy’ town to Kern’s second largest city By Maribel Reyna

elano is the second largest city in Kern County and is strategically located in California’s southern Central Valley. With an established transportation network, Delano is situated along Highway 99, one of California’s major north/south arteries, positioning the city near the state’s population center. Delano’s general plan has more than 900 acres designated for industrial use. Economic conditions in Delano make it an attractive option for industrial investment. From its rapidly growing trade area to its affordable land and convenient location, Delano offers prospective business owners many advantages. Sears Logistics Services, Paramount Citrus, Railex, Central Valley Office Supply and Buttonwillow Warehouse are located in the South Delano Industrial Park, where millions of dollars have been invested in infrastructure improvements. Paramount Citrus is the largest grower, shipper and packer of citrus fruit in the country. Paramount Citrus recently expanded its existing facility in Delano to process California Cuties, a popular mandarin orange. The expansion will create an additional 500 jobs. Railex consists of a 225,000-square-foot refrigerated truck-to-rail transfer facility in Delano that is specifically designed for fresh produce warehousing and trans-loading. There are plans to construct another rail line, which will add approximately100 jobs to the local economy. Sears Logistics Services is a distribution center in Delano responsible for shipping goods to Sears stores throughout the Northwest, West Coast, Alaska and Hawaii. Delano’s population is considerably younger than found in most California communities. Delano’s median age is 27.9 years. The younger population dramatically increases the number of potential employees in Delano. This abundant labor pool, when paired with the city’s efforts to improve the skills of the workforce, makes Delano an attractive location for manufacturing and service companies. Both commercial and industrial businesses can greatly benefit from the State Enterprise Zone in Delano. Through the Delano Enterprise Zone, the city offers financial incentives, such as hiring, manufacturers’ investment, and sales and use tax credits, to new and established businesses. The Delano Enterprise Zone includes most of the area within the city limits of Delano and some unincorporated areas of Kern County, immediately adjacent to the city. Recognizing the important role businesses play in maintaining a vital community, the Delano Enterprise Zone offers additional incentives to businesses located in the Enterprise Zone. The city provides business counseling and technical assistance services to local business owners. In addition, Employers’ Training Resource provides oversight of the Delano Enterprise Zone vouchering program. Through its Career Services Center in Delano, it assists Enterprise Zone businesses with free screening, job placement, and training. But providing a quality environment for residents and businesses is also a high priority. The city offers lower than average living costs, affordable land, a large workforce, excellent schools, plenty of recreational activities and world-class medical services, Delano has grown from the once sleepy agriculture town to Kern County’s second largest city, with an ever growing population, industry and economic development. — Maribel Reyna is the city manager of Delano.

Railex

Temperature-controlled alternative to trucks Photo courtesy of the Railex

Moving freight from pollution-causing trucks to cleaner, climate control train cars is the goal of Rialex, a company with a large facility in Delano.

By Pat Bruno

ailex was created in 2006 out of a need to link manufacturers, shippers, retailers and distributors via consistent, fast and “green transportation.” Railex created a distribution and logistics system that offers everything from five-day coast-to-coast rail transit 52 weeks a year, to forward distribution to storage 52 weeks a year. One of the key factors that makes Railex different from other logistics options is the temperature-controlled aspects of all the company’s platforms. This helps ensure that products arrive to consumers in their optimal condition. Railex unit trains consist of 64-foot cars, with fresh air exchange and temperature control. Railcars are loaded and unloaded inside cooled facilities to ensure that the “cold chain” is maintained. Products then arrive at one of Railex’s three state-of-the-art refrigerated storage and distribution facilities. Railex’s facilities have separate computer controlled temperature zones allowing all types of commodities to be stored at their ideal temperature. The Railex facilities in Delano, Calif., Wallula, Wash., and Rotterdam, N.Y., are strategically located in the fastest growing manufacturing areas in the three states. Each facility has created hundreds of jobs in their respective regions. In Delano alone, Railex has created over 200 jobs, with the potential for another 200 when the facility is at capacity. Once commodities arrive at the facilities, they are either stored or put on refrigerated trucks to be delivered to their final destinations. In an effort to help growers and manufacturers keep costs down, Railex offers 15 days of free storage in any of the company’s facilities. Railex’s innovative distribution system has benefited growers and manufacturers by helping them simplify their transportation and distribution logistics; keeping costs down; and allowing producers to reach markets faster than if they shipped via conventional rail. As a result, Railex is used to ship across country a wide array of products, including alcohol, produce, seafood and dairy. To date, Railex has made more than 700 cross-country train trips. With each coast-to-coast trip, Railex is doing its part to protect and improve the environment by lowering fuel consumption, moderating green house gases and reducing pollution. On average, Railex’s novel rail delivery solutions save omore than 200,000 gallons of fuel per week and result in

On average, Railex’s novel rail delivery solutions save more than 200,000 gallons of fuel per week and result in three times fewer emissions versus longhaul truck delivery.

Photo courtesy of the Railex

At its facility in Delano, Railex offers shipping and storage services for climate and time-sensitive cargo.

Photo courtesy of the Railex

A worker moves freight in Railex’s climate-controlled Delano storage facility.

three times fewer emissions versus long-haul truck delivery. Since 2006, Railex has: • Reduced fuel consumption by nearly 49.5 million gallons, compared to over the road trucks. • Reduced carbon output by 973,137 metric tons, compared to over the road trucks. • Saved 312,968,719 long haul freight miles. • Transported 111,855 truckloads in 790 train trips using 32,166 railcars. This not only benefits the environment, but also reduces traffic congestion and highway deterioration as each Railex unit train takes 200 trucks off the road. As Railex continues to grow, establishing new distribution centers and providing services to a wider range of industries, the company expects to change the transportation and logistics industry, while continuing to benefit the environment. — Pat Bruno is the Railex USA senior vice president of sales and marketing. For more information, visit railexusa.com.

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

The right choice for good health Your experience...

Choosing your doctor

With some health plans...

Kaiser Permanente is uniquely structured to give you everything you need–all together in one easy-to-use package. See how having the right partner can make all the difference... With Kaiser Permanente...*

Pick from a list of names, often based on nothing more than if he or she accepts your insurance.

We help walk you through the process of becoming a new member, including choosing a doctor who’s right for you. You can even view all our doctors’ profiles online.

Call. Get placed on hold. Call back. Seeing your doctor starts to seem like trying to win a radio contest.

Schedule or cancel routine appointments with your doctor - by phone, online, or from your mobile device.

Your doctor flips through a file full of papers, asking things you’ve already answered or can’t remember.

Your doctor, backed by a secure, innovative electronic health record system, is up to speed and ready to take care of you.

You drive all over town to take lab tests, get X-rays, or fill prescriptions. You’ve spent half your day in the car.

At all our Kern County locations, your doctor, lab services, X-rays, and pharmacy are under the same roof, so you can save time and do more in one visit.

Show up with your fingers crossed that your primary care doctor faxed or mailed your records.

When you arrive, your specialist will have your health information right at his or her fingertips, making your care virtually seamless.

Remembering your doctor’s instructions

Take lots of notes during your visit, listen carefully and trust your memory later.

You get a printed summary report at the end of each visit. You can also view details of your visits online whenever you want, including most test results.

Asking routine questions without a visit

Call your doctor’s office. Leave a message. Hope you don’t miss the return phone call.

Email your doctor’s office, and get a reply normally within 48 hours.

Making an appointment

During your visit

Getting other services

Visiting a specialist

Along with getting excellent care, as a Kaiser Permanente member, you have access to lots of preventive health resources like classes, wellness coaching, and more. (Some classes may require a fee.) To learn all about the many benefits of membership, visit kp.org/thrive or call 661-334-2005. *These features are available when you receive care at Kaiser Permanente facilities.

KERN BUSINESS JOURNAL

December/January chamber events Two Bakersfield-based chambers of commerce organizations have scheduled member and community events during the months of December and January.

Greater Bakersfield Chamber of Commerce Dec. 11 – “Bakersfield: The Next Five Years,” luncheon forum from 11:30 a.m. to 1:30 p.m. at the Bakersfield Marriott. Topics include agriculture, manufacturing and prison realignment. Advance registration only -- $38 members, $75 non-members. Dec. 13 -- Small Business Networking Breakfast at the Bakersfield Chamber, from 7:30 to 9:30 a.m. $25 members, $50 non-members. Dec. 20 -- “Coming Together for the Holidays” mixer from 5:30 to 7:30 p.m. at the Bakersfield Chamber. $5 admission. Jan. 15 -- Labor & Employment Law Update Forum from 7:30 to 9:30 a.m. at the Bakersfield Chamber. Free to members, $40 non-members. Jan. 24 -- Annual Installation Dinner, from 6 to 9 p.m. at the DoubleTree by Hilton. Advance reservations required. $75 per person. For additional information about these events, go to the chamber’s website www.bakersfieldchamber.org

Kern County Hispanic Chamber of Commerce Dec. 12 -- Holiday Membership Appreciation Reception, 5:30 p.m., The Nile, 1721 19th St. No cost event will include business networking, food catered by Agave Mexican Grill & Cantina, refreshments, desserts, door prizes, live music and more. Guests are encouraged to bring an unwrapped toy or make a donation at the door. Toys and donations will be distributed to the Kern County Cancer Foundation and the Deaf & Hard of Hearing Organization. Save the date – 28th Annual Installation Banquet and Business Awards, Saturday, Feb. 2, at the Bakersfield Marriott. No-host cocktails at 6 p.m.; dinner and program at 7 p.m. Make reservations by calling 633-5495 or emailing officeadmin@kchcc.org. For more information about the Kern County Hispanic Chamber of Commerce and events, go to the website www.KCHCC.org. Chambers of commerce in outlying areas of the county are invited to submit calendar events to the Kern Business Journal at editor@kernbusinessjournal.com.

DEC. 2012 / JAN. 2013

Employers: Be cautious in ‘cyberworld’ By Robin Paggi

acebook founder Mark Zuckerberg recently announced that the social media site now has more than 1 billion users. Coincidentally, California Gov. Jerry Brown also recently announced that he signed a new law that protects the privacy of social media users. In the article “Job applicants asked to share Facebook passwords,” the New York Daily News reported, “In their efforts to vet applicants, some companies and government agencies are going beyond merely glancing at a person’s social networking profiles and instead asking to log in as the user to have a look around.” Orin Kerr, a George Washington University law professor and former federal prosecutor called this practice Robin Paggi “an egregious privacy violation.” However, it was not yet illegal. According to Bakersfield employment attorney Katy Raytis, AB1844, the newly signed legislation that becomes effective on Jan. 1, will make it illegal for California employers to demand access to social media accounts. CBS NewYork also reported, “Student-athletes at some college programs across the country in certain cases have also been required to add a coach or school official as a friend so their social media postings can be monitored.” Raytis noted that additional legislation was signed by Gov. Brown, which provides similar privacy protections to students and prospective students at California colleges and universities. Both new social media laws were announced (fittingly) via Twitter, Facebook and Google Plus earlier this year. So, what does this mean for employers, applicants and employees? Raytis says AB1844 makes it illegal for employers

to demand user names, passwords, or other social media account information from job applicants and employees; however employers are still permitted to ask employees for social media account information if it is relevant to an investigation into workplace misconduct. This new law also does not curtail an employer’s right to conduct general Internet searches, or Google searches, on applicants and employees. Information that is freely posted and is available to the general public will not be protected as private information. However, because Internet searches might reveal information that could affect hiring/discipline processes or create accommodation obligations, Raytis emphasizes that employers conducting such searches must be educated on the legalities. For example, employers should: • Be consistent. • Document and record the searches – perform a “screen capture.” • Document how information was used, if at all. • Document steps taken to exclude information that should not be part of employment decisions. • Train and educate those who will conduct searches. Focus on what should be searched and where searches should be conducted. • Do not have the hiring manager conduct searches. • Be familiar with disclosure and notice requirements. • Consider using a reputable background service to conduct searches. Applicants and employees should remember when posting that things that are deemed inappropriate by an employer may still be used against them when employment decisions are being made about them. Everyone should proceed with caution in the cyberworld. — Robin Paggi is the training coordinator at Worklogic HR Legal Solutions. She can be reached at rpaggi@worklogiclegal.com.

0912

Robert Morris

Brian Sabin

Carolyn Cordrey

Michael O’Doherty

Scott Begin

Jesse Valencia

Charles Gray

John Tait

SVP, Credit Administrator

VP, Manager

AVP, Relationship Manager

VP, Relationship Manager

VP, Manager

AVP, Relationship Manager

VP, Relationship Manager

SVP, Regional Manager

4600 California Avenue 93309 | 661-281-0325 1301 17th Street 93301 | 661-281-0300 9100 Ming Avenue (Suite 120) 93311 | 661-663-8663 3911 Coffee Road 93308 | 661-589-9040

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

New owner advances distribution business in Paramount Logistics park By John Ritchie

oll Real Estate Development, an affiliate of Paramount Farming Co., recently purchased the former International Trade and Transportation Center and has combined the ITTC with adjacent land owned by Paramount. The result is a new master-planned development named Paramount Logistics Park. Located at 7th Standard Road and Zachary Road, the Paramount Logistics Park is home to Target Distribution, State Farm, Hillman Group, American Tire, Formica, Baker Hughes, Schlumberger and Weatherford. Paramount Logistics Park has fully entitled, zoned, utility and rail-served land for sale or build-to-suit. Parcel sizes vary and can accommodate land users in need of 200 to 300 acres, all the way down to 5 to 10 acres. The park is located on the BNSF Railway’s main line and has direct rail services. Approximately 2,000 rail cars currently deliver to users within the park per year. Rail service is widely recognized as the most economical and “green” source of freight delivery. With great service from BNSF and from the City of Shafter, the park is experiencing a renewed interest in rail deliveries from the ports and points east. Rail service is one of the infrastructure components that make Paramount Logistics Park a complete industrial park. Adding to the benefits of the rail is the completion of improvements to 7th Standard Road, which has redefined transportation patterns in northwest Bakersfield. The connection between Highway 99 and Interstate 5 is a key to companies distributing goods throughout the state. The proximity to a vast, diverse labor pool ensures employers that they will have employees who live, work and raise their families in close proximity. These factors create a loyal and plentiful labor force, which means low turnover and high quality workers. Within 20 miles of the Paramount Logistics Park is a population base of more than 500,000

Photo courtesy of the City of Shafter

Target’s distribution center is located in the Paramount Logistics Park.

people. Roll is working with several prospective users, representing diverse industries, including warehouse and distribution, oil field service, cold storage and speculative development. Roll also is working with food and fuel providers to meet the demand of the employees within the park. The Paramount Logistics Park meets the old adage of valuing real estate: Location. Location. Location. Adjacent to the BNSF rail line, between Highway 99 and I-5, close to Meadows Field Airport and only 300 miles from 40 million people places the Paramount Logistics Park in a superior transportation location. Distribution from the park can effortlessly serve the entire Western United States within a delivery time of one

or two days. Proximity to major markets makes Paramount Logistics Park a cost-effective distribution location. And its location in Kern County means so much — central location, quality people, pro-business environment, reasonable costs to operate, and a great place to work and live. Roll Real Estate Development also owns the 134-acre North Meadows Industrial Park, located near the intersection of Highway 65 and 7th Standard Road. The Crossroads Business Park, at Harris and Gosford roads, an 80-acre mixed-use business park, will be available in spring 2013. — John Ritchie is Roll Real Estate Development’s vice president of commercial development.

Shafter invests to attract logistics industries By R. Brent Green

istory has shown that great societies build around trade. Why? In trade, we get stuff we don’t have and others get stuff we have in excess. Trade increases both wealth and the standard of living for everyone. Benefits will last generations. Without international trade, all countries would have to meet their own needs for goods. Can you image the San Joaquin Valley without chocolate? While the southern San Joaquin Valley has traditionally relied on agriculture and oil to run its economy, “logistics” is now becoming a key job-producer, which will continue to expand in the City of Shafter. Logistics is so much more than the lyrics in a television commercial, or the way we get online purchases to magically appear at our doorstep. Logistics is now the way societies and companies compete in the global economy. No longer do consumers or businesses rely only on local merchants to supply products or tools. The new economy allows us to shop, literally, the entire globe. But more importantly, it allows us to compete globally. Conversely, the entire globe has now become our competitor and can compete for our traditional customers. No longer will poor products or service be tolerated, as alternatives are only a mouse click way. That click then sets off a chain of actions providing the products we want through complex networks involving communications with manufacturers, warehouses, transportation companies and financial institutions. We have all seen the abilities of companies to track shipments, let customers know with pinpoint accuracy when purchases will arrive, and follow up with delivery confirmation text messages. The entire process is known

Photo courtesy of the City of Shafter

Track is being laid for the city-owned railroad.

as “logistics.” Behind all those apps and electronic notifications are physical networks that actually move the products in an efficient, cost-effective manner and allows companies to be competitive. For this to work, logistics networks must be built in strategic locations. Infrastructure and proximity to customers are paramount. As a result, Shafter is emerging as a key logistics center on the U.S. West Coast. Known for more than a century as an agricultural center, Shafter has all the markings of an emerging logistics center. Within a 300-mile radius of Shafter’s industrial centers resides approximately 14 percent of the

entire U.S. population. While geography is an advantage and is a great place to start the logistics analysis of Shafter, the city’s true logistics value to the global supply chain is far more complex. Shafter has all the key infrastructure components required to provide the services a successful logistics network needs. And many large companies that rely on a logistics network in order to be competitive are taking note. The city’s infrastructure assets include: access to two class-one railroads; adjacent to the main fiber optic communications trunk lines of California; close proximity to Meadows Field, an under-utilized airport with one of the state’s longest runways; an abundant labor supply; an opportunity to match inbound consumer goods containers with export agricultural products; the availability of entitled land with access to water, sewer, utilities; and a community that values the contribution a global logistics network can make to providing jobs and opportunities for families. Over the past several years, Shafter has invested in road improvements, a fiber optic communications network and a rail terminal that is now operating daily and creating jobs. Companies from all over the world have moved to Shafter. The construction and business activity have been on a steady climb. As the world seems to be getting smaller, Shafter is making a conscious effort to expand and to work with companies, highlighting the opportunities available in the city. At a time when so many municipalities are contracting and having trouble meeting the needs of their communities, Shafter has been investing and expanding services. — R. Brent Green is Shafter’s director of business and development.

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

Wells Fargo Equipment Finance, Inc.

Financing the vehicles that drive your business Working for you When you need equipment to get your business moving, you need a fast, reliable funding source that understands your industry. With a full menu of loan and lease products, we’re here to help you determine the best way to finance the equipment you need for your business. • • • • •

Loans and equipment lines of credit Seasonal payment options Competitive pricing Capital and operating leases Up to 100% financing on new and used equipment

Turn to Wells Fargo At Wells Fargo Equipment Finance, our dedicated industry specialists provide prompt, affordable financing options for the equipment you need - from trailers to flatbed carriers.

Ready to learn more? Call today! Ben Hanson Regional Vice President (661) 637-2605 phone (661) 324-8636 fax (661) 496-9997 mobile bhanson@wellsfargo.com

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Photo courtesy of the City of Shafter

Kevin Gibson switches rail cars off the main line and onto the Shafter city tracks.

City providing railroad service

Photo courtesy of the Port of Los Angeles

By R. Brent Green

A container ship is nudged to the dock at the Port of Los Angeles.

he City of Shafter has just completed its first full year of providing rail service to the Paramount Logistics Park (formerly the ITTC). “While it is not normal for a city to be in the rail switching business, I felt as though the opportunity to provide a service for profit, while expanding the number of companies and jobs coming to the City of Shafter, was obvious,” said City Manager John Guinn. The expansion of rail services in the southern San Joaquin Valley has long been a goal for both environmentalist and business interests needing lower transportation costs, while reducing the overall number of truck miles travelled in Kern County. Clearly the Shafter rail terminal is achieving those goals. In September 2011, the city delivered the first railcars to the new MiSwaco facility in Shafter. Since that time, Baker-Hughes and Weatherford Co. have also completed new facilities, with connections to the Shafterowned rail facility, located north of 7th Standard Road and east of Santa Fe Way in Shafter. Over 500 jobs now reside in the area that weren’t there before. Approximately 1,000 railcars have been switched to customers and the potential for growth looks extremely positive. The Shafter facility, when completed, will be able to receive entire unit trains. It will have two tracks off the BNSF mainline, extending over 9,000 feet, with no grade crossing. The Shafter rail system currently has over 10,000 feet of track connecting the BNSF mainline to existing rail users in the park. The city also has two Rail King car-movers that are used by the Shafter Public Works Department to move loads and “empties” between the customer and the railroad. The Shafter model of consolidating customers into a rail-served industrial park appears to be the future for rail users, as it allows the class-one railroads to deliver to multiple rail users with a single destination point, thus allowing for more efficient switching, with less cost. Rail users also benefit by being able to afford rail service and enjoy the shared expense of having a rail-served industrial park capable of receiving reliable service, while not being responsible for the enormous infrastructure needed to connect to the railroad independently. There is no other rail-served industrial park like this being developed anywhere in the San Joaquin Valley. The prospects for additional jobs and opportunities for our region look very bright.

Shafter Intermodal Rail Facility meets market demands

— R. Brent Green is Shafter’s director of business development.

By Chris Minus

stablished more than a century ago in the middle of agricultural land, Shafter has long been associated with people who cultivate crops. However, the city’s very location and community leaders’ foresight in investing in critical infrastructure now place Shafter at the crossroads of international trade. I spent 40 years in the international shipping industry. The last 22 years, I was the vice president of business development for SSA Marine, one of the largest independent terminal operators in the world. It was my job to help pick the “winners” in the competition for domestic and international trade development projects. Basically, I identified two types of projects: Some developers attempted to stimulate opportunities for international markets to support cargo trade. Their projects had inherent risks. Often not all the “players” shared the same vision and their untested “moving parts” could spell doom. As a result, the likelihood of success was small. Other developers proposed projects that addressed actual market conditions and supported existing cargo trade. Their goal was to make cargo trade more efficient. This approach presented less risk to investors, as avenues were already established. Efforts in Shafter to establish an intermodal rail facility fit the latter category. The concept is to bring shipments that are off-loaded at the Los Angeles/Long Beach and Oakland ports by rail to distribution facilities in Shafter, where they will be stored or transferred to other transportation modes and delivered to markets throughout the nation. The basic logistical elements are in place in the city, giving the Shafter Intermodal Rail Facility great potential for success. These basic elements include: a thriving agricultural community that requires efficient transportation to overseas markets; surface transportation corridors that move goods in and out of the area; sufficient entitled land that can accommodate new distribution facilities; professional partners experienced in international trade and logistics who are generating business opportunities; and a marketplace that continues to invest in facilities that require efficient transportation links. Shafter’s proposed intermodal rail facility will be the only one of its kind on the West Coast. It will be a direct benefit to California businesses, as well as those throughout the nation. It will help the U.S. improve its trade balance and reduce its national debt. More importantly, the facility will ship and transload food to feed hungry people overseas with the rich agricultural products that are abundant in California’s Central Valley and

the interior U.S. Understanding and addressing existing transportation challenges are keys to the success of the Shafter Intermodal Rail Facility. Trucking costs are expensive and will only increase with new regulations. Trucking also contributes to air pollution, congestion and traffic safety concerns on California’s highways. These challenges continue to intensify as an increasing number of shipping containers are trucked to distribution centers in Kern County and the valley. This increased volume also is creating congestion problems at the ports. This is evidenced by the recent imposition of a per container “congestion mitigation fee” at the Los Angeles/Long Beach ports. The proposed Shafter Intermodal Rail Facility will ease the transportation challenges that importers and exporters face in several ways: 1. Import container cargo will move from California ports to the Shafter Intermodal Rail Facility on doublestacked trains. This will result in lower transportation costs, reduce air pollution, and alleviate road congestion and deterioration. It will reduce highway traffic hazards. 2. From the Shafter Intermodal Rail Facility, import containers will be trucked by energy-efficient vehicles to distribution centers in the city and region. The empty containers will be brought back to the Shafter facility or sent directly to local exporters for export bookings. As a result, containers will be available to local shippers, who now must retrieve empty containers from the West Coast ports and transport them back to Shafter. Eliminating the hauling of “empties” will further reduce highway and pollution impacts. The synergy created by loaded containers in both directions with little repositioning of empties is the ultimate goal of any logistics professional. 3. For exporters, the Shafter Intermodal Rail Facility will provide major advantages. Using import containers that are emptied at the city’s distribution centers, exporters can ship their loads to California’s ports using double-stacked trains. As a result, exporters will be able to send to the ports larger shipments per container than allowed using trucks. 4. The arrival of double-stacked trains at the ports will reduce congestion and eliminate “mitigation fees” now being charged per container delivered by truck. Again, this efficiency reduces costs, makes California products more competitive and reduces pollution. The Shafter Intermodal Rail Facility will be convenient and cost-effective for importers and exporters. It also will benefit communities now impacted by truck traffic, while providing jobs and opportunities to the region. — Chris Minus is a logistics consultant who is assisting Shafter in developing an intermodal rail facility.

DEC. 2012 / JAN. 2013

ce i v r Se. l l o yrout how a P EEll to find R F Get Ca

KERN BUSINESS JOURNAL

ThinkBigger Taking your small or medium sized business to the next level is easy with Worklogic HR. From the solid foundation of a basic Human Resources Information System to comprehensive co-employment solutions, Worklogic HR helps increase your efficiency and profitability while giving you more time to focus on your core competencies. With a wide choice of affordable, customizable HR management and business administrative solutions, Worklogic HR provides everything your small business needs to become a bigger business.

Human Resources – Benefits Workers’ Compensation Safety – Payroll – Human Resources Information System

800-828-4187

www.worklogicHR.com Locally Owned Since 2000

What These People Know About Human Resources Could Save Your Business. Human Resource management is a critical part of any business. Doing it right can be the difference between success and failure. Attend one or all of these upcoming Human Resources training seminars and learn how to protect your business, develop better employees and create a more productive workplace.

December 11th, 2012 9:00am-Noon

Safety and Security Responsibilities of the HR Professional

December 18th, 2012 9:00am-Noon

Unemployment Insurance, Workers' Compensation, and Employee Benefits

January 16th or 17th, 2013 Noon-1:30pm

Lunch and Learn: 2013 Employment Law Update

January 23rd, 2013 9am-10am

Effective Communication: What You Need to Know to Get What You Need

January 30th, 2013 9am-10am

Customer Service: How to Bring Customers Back

Robin Paggi

MA, SPHR-CA, CPLP, CPC Training Coordinator

David Blaine, SPHR Attorney

Katy Raytis

Attorney

Call 661-695-5163 to register or for more information.

4029 Coffee Road • Bakersfield, CA • 661.695.5163 • worklogiclegal.com WorklogicHR Legal Solutions is a division of The Blaine Law Group, PC

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

County airport ‘heart’ of transportation network By Jack Gotcher

s the only commercial airport in Kern County, Meadows Field International Airport is an economic driver for the region. It is the heart of the travel and logistics network. Passenger airline service from Meadows Field enables employees of oil, service and other industries to commute more quickly and reduces pollution in the valley by taking cars and buses off the road. Air cargo also removes trucks from roads, further improving air quality in the southern San Joaquin Valley. The value of Kern County is particularly important to customs brokers and freight forwarders in Los Angeles, who must deal with the difficulties of moving cargo by truck along congested Southern California freeways, such as the 405 Freeway. These routes compare poorly with the relative ease of moving goods along Highway 99 and Interstate 5. In addition, land prices are much less in Kern County. A land lease at Los Angeles International Airport can cost more than $2.50 per square foot. Comparable facilities at Meadows Field can be as inexpensive as 25 cents per square foot. The airport generates more than 1,600 private sector jobs, plus an additional 400 jobs at IKEA, in the Tejon Ranch Commercial Center, near Lebec, due to the activities in the foreign trade zone administered for Kern County. The strength of the area logistics network and the foreign trade zone (FTZ) enable all businesses along the high-

Photo courtesy of Kern County Airports

The longest commercial runway in Kern County is located at Meadows Field in Bakersfield.

way and rail network to benefit. The FTZ is a valuable asset that provides companies with the benefits that a competing company would have if located out of the United States. The FTZ allows logistics companies to save through deferred import duties. The FTZ enables a company to purchase goods, when prices are low, and hold onto the goods until market opportunities present themselves. Import duties are paid when products are brought to the market. For example, a company may buy winter seasonal items in the spring and ship when convenient. The items can be stored until needed. Import duties will be applied when the items enter the American economy.

Kern County has FTZ activities at Tejon Ranch, and future locations near Meadows Field Airport and in Shafter, at the former International Trade and Transportation Center, which is now called the Paramount Logistics Park. This complements the logistics corridor, from Lebec to Delano, along Highway 99. Air cargo accommodates the high-value, low-volume items needed in such industries as electronics, pharmaceuticals and timesensitive agriculture, as compared to rail or trucks, which move high-volume, low-value materials that are not required to be delivered in a time-sensitive manner. Meadows Field provides runways that are able to handle all aircraft flying today.

For example, the main runway can accommodate large aircraft, such as the 747. The airport greets freight arrivals from such companies as Fed-Ex and UPS. The airlines ship very sensitive items on passenger aircraft. Some examples are shipments from Houchin Community Blood Bank to a Phoenix testing center and shipments of sterile insects from the Department of Agriculture for use in pest eradication. Both are critical low-volume shipments and are time-sensitive goods movement. Studies have shown that about half of the air passengers traveling from Kern County are bound for destinations in Mexico or Central America. This justifies Meadows Field’s well-earned designation as an international air terminal and justifies the posting of a customs officer. The single customs officer keeps the facility open and ready to grow when direct international passenger travel returns to the airport. For now, this officer enables the operation of Kern County’s foreign trade zone, which contributes to $12.2 million in earnings, $814 million in revenues and $1.5 million in property tax, in addition to creating 400 jobs. In the late 1990s, Meadows Field was not prepared for international air carriers. Runway improvements were needed. The airport lacked a customs office. Upgrades have been made and a customs office now exists. The economic downturns in Asia and Europe have dampened all cargo development. But when the international economy improves, Meadows Field will be ready. — Jack Gotcher is Kern County’s airports director.

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

Company-sponsored technical training builds careers By Mike Miller

ames Foster was on unemployment until Sept. 16, 2010, when he was hired by PCL Industrial Services Inc. as a laborer. Working hard and learning on the job, Foster advanced to welder’s helper and then to utility craftsman. His training was both encouraged and sponsored by PCL. PCL is one of several steel fabrication manufacturing companies in Kern County. With about 1,000 employees, PCL manufactures and installs pressure vessels, storage tanks, process piping and structures, primarily for energy producing companies in the Western United States. In order to respond to our customer’s requirements, we have advertised heavily in the local media to attract welders and other trades people. The pool of trained craftspeople has become smaller as local hiring has increased. One of the reasons that candidates for the trades are so few in number is that the trades are rarely taught in high schools. There are exceptions, of course, such as the Manufacturing Academy at Arvin High School, which prepares graduates for technical careers, and Taft High School, which also provides career technical training. In order to bridge the training gap, PCL has instituted a vigorous training program for new hires in partnership with Associated Builders and Contractors (ABC). Cameron Parsons of PCL has been leading the effort

by consulting with shop and field personnel. Meaningful and in-depth courses focus on the skills needed to perform a variety of technically oriented tasks. Graduates earn a certificate that can be submitted to potential employers as proof that the candidate has completed training and passed a competency test. The ABC curricula are from the National Center for Construction and Education Research, which is a nationally recognized training course generator for the construction industry. The classes at ABC run on an academic schedule, from August to May, and the construction crafts that we have sent employees to this year are: Calculation Layout & Pipefitting – Designed to give a worker the necessary skills to read drawings and calculate take-offs in order to construct piping assemblies. 14 attended. Welding – Gives the worker skills and knowledge of metal pipe fusion and its different applications. 46 attended. Rigging – Teaches the skill to safely hook up and move a load from one location to another. This class is designed to equip the worker with knowledge and skills to rig various loads using multiple types of equipment. 21 attended. Core – Provides foundational knowledge for the construction industry. All other craft classes build on this one. 19 attended. Construction Crew Leader – Covers twenty-four different topics that are designed to equip the worker for a career in a leader-

Photo courtesy of PCL Industrial Services Inc.

Welding is one of the critically needed skills and the focus of PCL employee training.

ship role. 24 attended. Heavy Equipment – Mainly used for producing backhoe operators in our industry, the class covers multiple pieces of mobile equipment. 4 attended. Crane – Prepares the worker to take and pass the certification test as well as producing the skills to safely operate cranes of various sizes. 16 attended. Safety Professional – Prepares the worker to begin a career in the safety field. The class covers 36 areas of safety and has been used by some to prepare for the Certified Health & Safety Technician test. 24 attended. Field Management – Develops the leadership skills from frontline level to top management level. 4 attended. Pipefitting – Trains the worker to earn a career as a true fit up pipefitter. Welded pipe and threaded pipe applications are covered

in this class. 10 attended. Of the 182 PCL employees who attended classes so far in 2012, Foster is one of the star performers. He eventually spent nine months in the Crane 1 Class and received the “Neil Rice” award for his accomplishments. As a certified crane operator, even more doors would open for him. When PCL purchased two mobile gantry cranes, Foster was asked to become one of the operators. He was trained to operate the two complex cranes and is now a certified operator of the new equipment. With quality industry-sponsored training, careers can grow, lives can be made better and companies can improve both their capabilities and bottom line. — Mike Miller is an estimator with PCL Industrial Services Inc.

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Q & A with new leader

Cynthia Pollard to head Bakersfield Chamber

those barriers and provide the certainty and stability so that businesses here in Bakersfield and Kern County can grow and prosper. We can address some of those barriers locally, while others will require that we advocate for change in Sacramento and elsewhere.

akersfield native Cynthia Pollard assumed her duties as the chief executive officer and president of the Greater Bakersfield Chamber of Commerce in September. Pollard brings to the job more than 30 years of professional experience, including public and media relations, government relations and corporate relations. Prior to her chamber appointment, she was the manager of local government relations for Pacific Gas & Electric Co.â&#x20AC;&#x2122;s Central Valley region. Before that, she operated her own Bakersfield-based public relations company and worked for Bakersfield College. As she takes the reins of the 1,300 member chamber organization, Pollard considered the challenges and opportunities that loom ahead.

Most recently, you have been a manager for a large, regional corporation. What from that experience will you bring to your chamber leadership post?

The importance of listening to your customers and serving them in the way they want to be served; how to work collaboratively with individuals and groups; and how to form coalitions to achieve a common goal. I have developed valuable relationships with people and organizations throughout the Central Valley that can be potential partners. The work that the chamber will need to accomplish on behalf of our members will require collaboration and coalition building across broad groups locally and throughout the region.

Why did you want to become the new president/ CEO of the Greater Bakersfield Chamber of Commerce?

I believe strongly in the Chamber of Commerce and its great work. The requirements of this position represent a culmination of my years of experience in business, public and government relations, corporate communications and community involvement. And lastly, it allowed me an opportunity to come home and help make a difference in the community I love. What will be your first priority?

Listen to our member businesses and find out what they need to be successful. Our next priority would be to deliver what our members need in the ways that are meaningful to them. Our board of directors identified a focus on entrepreneurship for the coming year. So we will look at how we can help connect start-up businesses to the resources and mentoring that they need to grow their own businesses and strengthen our community. It is important that we remain nimble and responsive to our members. A prominent chamber activity is advocating for local businesses in Sacramento and elsewhere. What is the biggest challenge facing the Bakersfield business community?

For many years, you owned and operated a local business. What from that experience will you bring to your chamber leadership post? Photo by Casey Christie

Cindy Pollard is the new president and chief executive officer of the Greater Bakersfield Chamber of Commerce.

Businesses want certainty in the regulatory environment and stability in the economic environment so that they can make plans and not be surprised or burdened with unnecessary costs in time or money. Earlier this year, the chamber met with a group of business leaders to discuss the barriers and benefits of doing business in Bakersfield. They identified 27 barriers that are making it difficult for entrepreneurs and small businesses to succeedâ&#x20AC;&#x201D;from burdensome labor laws and a lack of training and mentors, to lack of knowledge of business requirements and what they described as hidden taxes. We need to collaborate with other member organizations, local government and our members to remove

I have a shared understanding of the challenges that many of our small business leaders face from having run my own business for 17 years. I know the responsibility of meeting payroll; the burdens that are part of the cost of doing business in California; and the constant need to make sure that your products and services remain relevant. Along the way, I have developed wonderful relationships within the community that can help advance the work of the chamber on behalf of our members. Tell us one thing about yourself that you believe would surprise most people.

My stress reliever is a Harley-Davidson. My father introduced me to dirt bikes when I was a kid and I grew up riding in the alleys of Central Bakersfield and the foothills of the northeast. Today, I enjoy riding my Heritage Softail Classic with my husband and youngest son when heâ&#x20AC;&#x2122;s home, and our friends.

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

Photo by Casey Christie

A Jacobs Engineering employee unloads some tubing in the oilfields near an oil pumping unit at a Chevron installation in Lost Hills.

In the Oil Patch

Looming regulations will impact Kern oil industry

es Clark is the executive vice president of the Independent Oil Producers’ Agency in Kern County. “In the Oil Patch” is a regular Kern Business Journal feature that asks local industry leaders to comment on developments in Kern County’s oil field. Federal and state agencies are considering new regulations regarding fracking and other drilling strategies. What regulations loom?

The Independent Oil Producers’ Agency, along with the Independent Petroleum Association of America and the Western Energy Alliance, has expressed concerns about a proposed U.S. Bureau of Land Management hydraulic fracturing rule. We have requested BLM rescind or significantly revise the proposed rule’s scope and requirements. The U.S. Environmental Protection Agency is studying the health and environmental impacts of “well stimulation,” but Les Clark has yet to find one verifiable instance where stimulation activities caused aquifer contamination, human health impacts, or environmental degradation. At the state level, the Department of Conservation has hosted a series of workshops to gather comprehensive information aimed at developing rules governing hydraulic fracturing. The rulemaking process will soon begin. IOPA will express concerns about proposed state rules that will mirror those expressed about the proposed BLM rule. The DOC and Division of Oil Gas and Geothermal Resources are also evaluating the underground injection control (UIC) class II well programs. As more complex and expensive facilities regulations are implemented, delays should be expected and some projects may be stopped. Other regulations that will have great impact on our business are the California Air Resources Board’s AB32 — Global Warming — and the EPA’s PM2.5 and 8-hour ozone standards. Seyed Sadredin, the San Joaquin Valley Air Pollution Control District officer, warned that the EPA’s PM2.5 plan will result in a ban on all fossil fueled devices. As for AB 32, key findings by Andrew Chang & Co. indicate the California Global

Warming Act will cost consumers $135.8 billion cumulatively by 2020. By that year, California will have 262,000 fewer jobs because of AB32 and increased energy prices that will increase household expenses for the average family by $2,500 per year. Now that the election is over, attention in Washington is focused on the “fiscal cliff” and debate over revenues (taxes). With the oil industry being an “easy target,” what will be the impact on Kern County producers?

The oil industry is always an easy target for proposed tax increases. At the state level, we are faced with a severance tax every year. Because of 2/3 vote requirement to enact new taxes, proponents have been unsuccessful. However, if the 2/3 vote is compromised, we could be in trouble at the state level. According to Barry Russell, president of the Independent Petroleum Association of America, “With many on Capitol Hill, the oil and natural gas industry seems a tempting political target to raise revenue in light of this looming fiscal cliff. The important provisions of intangible drilling costs and percentage depletion, which President Obama claims will raise billions in revenues each year, may be on the chopping block.” President Obama has repeatedly proposed eliminating “unwarranted tax breaks” to the oil and gas industry. The newest tax reform calls for cutting the corporate tax rate from 35 percent to 25 percent, but also for eliminating all subsidies and loopholes. The problem is that drilling and percentage depletion are neither subsidies, nor tax breaks. They are typical business depletion that all industries receive. Without these tax incentives, investments, jobs and American energy supplies will be compromised. Both Democrats and Republicans vowed to increase domestic energy production. Is that good news for Kern County?

It would be good news for Kern County, but so far only Republicans and a few Democrats have stepped up to the plate. I have discussed several rules and regulations that need to be amended, revised or eliminated. The only way this will happen is through legislation. Independent producers’ main concerns are access to new properties and pipelines, and storage and refinery capacity.

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Double-tracking proposed for Tehachapi Loop By Bill Deaver

long-sought project to upgrade the busy railroad line over Tehachapi Pass could begin construction next year following approval of environmental studies and funding for the project by the California Transportation Commission. Building the project is estimated to take seven years, with completion projected for 2020. The project involves double-tracking five segments of the 136-year-old line, which was completed in 1876 by the Southern Pacific Railroad using Chinese workers with hand tools and dynamite to blast the winding grade and 17 tunnels. Railroad and Caltrans officials say the project will result in a 70 percent improvement in capacity of the line, the rail component of the busy Tehachapi Pass â&#x20AC;&#x153;goods movement corridorâ&#x20AC;? that includes Highway 58. Rail traffic through the pass has increased significantly in the past 10 years due to growth in the volume of goods transported through Kern County to destinations in the Midwest and South, according to a Caltrans study. â&#x20AC;&#x153;Rapid growth in Bakersfield in recent years has also added traffic and congestion,â&#x20AC;? the study noted. â&#x20AC;&#x153;This trend is expected to continue.â&#x20AC;? The current line is double-tracked between Mojave and Tehachapi, and between Bakersfield and Bena, where the mountains begin east of Bakersfield. The rest of the line

Photo courtesy of John Hardisty

An engineering wonder, the Tehachapi Loop allows trains to gain elevation and clear the summit. The railroad proposes to add tracks to increase the freight capacity.

is single track with long sidings. The project aims to add parallel tracks to allow long freight trains to pass each other, speeding-up operations. Steep grades and curves between Bena and Tehachapi slow trains, resulting in rail traffic backing-up along the line. Completing the project will result in 52 percent fewer train delay hours and will reduce emissions of carbon dioxide, nitrous oxide, and particulates, according to Royce Gotcher, with Caltrans. It will also decrease travel times over the pass by 14 percent, he said. That will result in reduced rail and highway congestion and improved east/west goods movement over the Tehachapi Trade

Corridor, a major goods movement route connecting the San Francisco Bay Area and the fertile farmlands of the San Joaquin Valley with Eastern markets. Congestion on busy Highway 58 through the pass could also be relieved, according to Gotcher, as truck traffic is diverted to the rail line. A Caltrans study prepared for the project estimated that the Tehachapi Trade Corridor would reach capacity in 2011. â&#x20AC;&#x153;It is estimated that remaining operational capacity, defined as the available train slots, will soon reach zero,â&#x20AC;? the study noted. The current rail line has 12 tunnels, sharp 10-degree curves, 2 to 2.5 percent grades, and rises 3,500 feet in elevation

Business & Entrepreneurship Center

Not business as usual. You need every competitive edge you can find. Like TPDJP FDPOPNJD NPEFMJOH understanding where is your market and what is its demographic makeup. The Business & Entrepreneurship Center can help you with that and more.

What we do Building a bridge to private, public and non-profit organizations, the Business & Entrepreneurship Center taps into an abundance of resources and know-how already in place, thereby enhancing its client businessesâ&#x20AC;&#x2122; long-term growth and viability. The Kern BEC strives to TUSFOHUIFO the entrepreneurial spirit, BTTJTU businesses and FYQBOE entrepreneurship throughout California.

between Bakersfield and Tehachapi. The 68-mile trip from Mojave to Bakersfield takes four hours for freight trains. Some 40 freight trains travel over the pass daily, the majority of them operated by BNSF Railway, a 1996 merger of Burlington Northern and Atchison, Topeka, and Santa Fe. Completion of the project is projected to increase that to 50 trains daily, and the new line would have a capacity of up to 65 trains per day. BNSF developed plans for the project and will pay half the cost. The other half of the funding will come from funds authorized by Proposition 1B, which California voters approved in November 2006. Funds from the ballot measure are to be used to improve highways, freight rail, access to seaports, truck corridors, and ground access to airports. The line is owned by Union Pacific Railroad, which acquired Southern Pacific in 1996, and BNSF trains use it through a trackage rights agreement dating from 1899. Maintenance of the upgraded line will continue to be fully funded by both railroads. The Caltrans study states that the Tehachapi Pass project is eligible for funding â&#x20AC;&#x153;because it would improve the movement of goods through the Tehachapi Pass by relieving congestion, enhancing the safety and security of the transportation system, and improving the efficiency and capacity of the rail freight system.â&#x20AC;? It will also enhance Kern Countyâ&#x20AC;&#x2122;s status as a major element in the nationâ&#x20AC;&#x2122;s transportation system. â&#x20AC;&#x201D; Bill Deaver is chairman of the East Kern Economic Alliance.

Our services The BEC provides resources of interest to grow your business. We offer a broad scope of fee-based services and assistance relating to: t "DDFTT UP $BQJUBM t .BSLFUJOH 3FTFBSDI 4USBUFHJFT t 0QFSBUJPOT 'JOBODJBM "OBMZTJT t "DDFTT UP OFX %PNFTUJD BOE *OUFSOBUJPOBM .BSLFUT t "OE NPSFy Call us to see how we can help ZPVS business grow!

Bakersfield College Cerro Coso Community College Porterville College

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

Air District grants help reduce valley truck pollution By Janelle Schneider

wo shiny, new 2013 Kenworth trucks grace the lot at Golden Construction & Excavation in Bakersfield, examples of a new San Joaquin Valley Air Pollution Control District incentive program that grants money to small-business trucking companies to retrofit and replace their vehicles. The On-Road Truck Voucher Program, which opened in April 2012, provides grants to businesses that, because of their size, weren’t eligible for two hugely popular and in-demand programs: the state’s Proposition 1B Goods Movement Emission Reduction Program and the Carl Moyer Voucher Incentive Program, which together have replaced hundreds of older, high-polluting trucks to meet the latest state emissions standards. “Not having this funding, essentially, would have forced us to downsize,” said Ken Shaffer, owner of Golden. Now, Golden is in early compliance for emissions standards. “Golden Construction is exactly the type of business that we were thinking of when we created this program,” said Samir Sheikh, director of the Air District program. “We had a remarkable response to the pilot program and saw an immediate need to expand it.” The pilot program, funded with $1.8 million from the U.S. Environmental Protection Agency, quickly exhausted its funding, leaving many applicants clamoring for more. The new On-Road Truck Voucher Program derived its initial funds of $3 million from exist-

Brandi Agnetti 661.706.6411

Bruce Barnhard 661.444.5196

Photo courtesy of Golden Construction & Excavation

Two new 2013 Kenworth trucks were purchased by Golden Construction & Excavation in Bakersfield with the help of a grant from the San Joaquin Valley Air Pollution Control District.

ing motor vehicle surcharge revenues that are returned to the valley air basin for pollutionreduction projects by the Air District. Golden Construction, with a fleet of 30 trucks and 52 employees, is one of three Kern County operators to be funded under the new program. Three more have submitted applications and are on the waitlist for funding consideration. Shaffer said the district’s program is effective and easy to navigate, and the funding process was unusually quick and efficient. “This one went like clockwork,” he said, with vouchers going directly to the dealer-

Belinda Capilla 661.303.8270

Richard Clasen 661.201.6086

ship within four weeks of application and delivery of the special-ordered trucks six weeks after that. In addition to the new Kenworths, for which Shaffer received $32,361 each (“I used that for the down payments”), the program retrofitted four 2000 Peterbilts with ECS Purifiers ($10,000 each toward the total cost of about $14,000 each). The six units will take more than five tons of harmful particulate matter and ozone-forming gases out of the valley’s air over the lifetime of the vehicles. Shaffer credits his Kenworth salesman

David Gay

661.333.3940

Laura Gieger

661.623.3014

Kevin Palla

661.932.3600

with sharing program information with him in the first place. “I have told a lot of people about it. Some of them have tried other grant programs, like I did, which were really tough because you have so many big [trucking] operators out there,” he said. His colleagues are initially skeptical, but Shaffer said he “really encourages them.” As a result of the program’s funding, Golden’s fleet has gone from 29 percent compliant to 63 percent. Sixty percent compliance is the standard that must be met in 2013. It puts Shaffer ahead of the curve to meet the next deadline of 90 percent in 2014. “This is great. Now, I can spend next year working on 2014 [standards],” he said. Eligibility criteria include: • Defined as a small business according to the state of California -- having its principle office in California, fewer than 100 employees and a gross annual income of $14 million or less. • Minimum usage requirements of 30,000 miles or 4,700 annual gallons of gas. • Engine model year requirements of 2002 or older for replacement, 2006 or older for retrofit. For information about the Air District’s On-Road Truck Voucher program, call the grants program at 559-230-6000 or visit www.valleyair.org/Grant_Programs/GrantPrograms.htm#On-Road Voucher Incentive Program. — Janelle Schneider is an air quality public information representative with the San Joaquin Valley Air Pollution Control District.

Frank Simon

661.301.1643

Pat Skrable

661.706.7243

661-654-1601

1620 Mill Rock Way Ste. 100 Bakersfield, CA. 93311 DRE Lic. # 00577493

www.PrudentialTobias.com 601-2145 ©2011 Prudential Financial. Prudential Real Estate brokerage services are offered through the independently owned and operated network of broker member franchisees of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. and Prudential are registered service marks of The Prudential Insurance Company of America and are used herein under license. Equal Housing Opportunity.

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Bakersfield hotels flexing their tourism muscles By David Lyman

wo major hotel improvement projects signal a significant vote of confidence in Bakersfield’s lodging market. The Courtyard by Marriott at 3601 Marriott Dr. underwent an $870,000 makeover. The improvements included a new lobby, restaurant, business center and beds. A $1 million remodeling project at the Holiday Inn Express, 4400 Hughes Lane, includes a new board room and meeting room, and renovation of the lobby, breakfast room, business center and all public areas. Bakersfield’s hotel market continues to gain strength. In the 12-month period between May 2011 and May 2012, three indicators from Smith Travel Research Inc. showed local hotels selling more rooms and generating increased revenue. The first indicator was the number of hotel rooms sold. In Bakersfield, that number increased 13.1 percent, the highest rate in California, which was more than three times the state and national averages of about 4 percent. A second key indicator was Revenue per

Available Room, or RevPAR. The average increase nationwide was 7.7 percent. In California, it was 8.5 percent. In Bakersfield, it was 16.2 percent, the second highest in the state. The third key indicator was hotel occupancy. Nationally, hotel occupancy was up 3.6 percent during that one year period and statewide up 4.5 percent. Bakersfield was once again the second highest in the state, at 11.6 percent. Bakersfield’s tourism potential garnered some positive press in 2012: • In January, the Padre Hotel was the subject of “Fastest Fun in the West,” a travel article in the Sydney (Australia) Morning Herald. • In the April issue of Smithsonian Magazine, “Indulging in American Basque Cuisine” profiled Basque culture in the American West and began with a focus on Bakersfield: Pyrenees, Benji’s, Wool Growers, and the Noriega Hotel, along with Dewar’s and Luigi’s. • The Sacramento Bee published an extensive travel article in May about the Bakersfield Sound. Among the local spots featured were the Crystal Palace, Trout’s, the Rustic Rail, Noriega Hotel, Dewar’s, Kern

Distribution centers complement Kern’s traditional industries By Mark Evans

o you know what they call a town that doesn’t sell anything to other towns? A future Ghost Town! The economic drivers of any region are those basic industry clusters that sell goods to outsiders. The income generated in these basic industries buys the necessities produced elsewhere. Whenever a basic cluster grows, regional income increases by a multiple, supporting an expanding breadth of services supplied by residents for residents. Firms attempting to sell goods outside their community need to cover communications and transportation costs, in addition to production costs. For this reason, the vitality of every basic industry in every region depends on the effectiveness of the transportation-logistics infrastructure.

In Kern County, transportation-logistics not only makes a vital contribution to basic clusters, such as agriculture and energy, but is itself an economic driver, thanks to its location -- access to the Los Angeles-Long Beach and Oakland ports; West Coast access via Interstate 5, Highway 99 and rail; and access to the broader western region via the Tehachapi Pass. Mark Evans The transportationlogistics sector employed roughly 10,000 workers in 2011. In comparison, the energy cluster employed nearly 20,000, while agriculture created 55,000 jobs. However, the transportation-logistics sector is “younger.” The life cycle of an industry from emergence to maturity follows

Photo by Felix Adamo

The Padre Hotel has been featured in numerous publications during the past year.

County Museum, Best Western Crystal Palace Inn and Suites, and the Padre Hotel. • In July, the Padre Hotel was named one of the “17 Most Unique Hotels in the West” by Sunset. • The August issue of Travel+Leisure

highlighted Noriega’s and the Padre Hotel in the article “Road Trip: California’s Central Valley” that featured 11 spots worthy of note. — David Lyman is the manager of the Bakersfield Convention and Visitors Bureau.

the shape of a logistics curve -- roughly an italicized “S-curve.” In the early years, employment and income are low and nearly flat from year to year. At some point, the industry “takes off.” As momentum builds, industry income and jobs start increasing at an increasing rate. At some point in time, an “inflection point” is reached where growth gradually slows until maturity is reached. Kern County’s transportation-logistics industry has reached the take-off stage and has not yet reached the inflection point. It is reasonable to expect an increase in the current pace of growth. From 2001 to 2010, the latest year of data for earnings by industry at the county level, earnings in Kern County wholesale establishments increased by 68.5 percent, compared to 24.1 and 27.0 percent respectively for California and the U.S. In transportation and warehousing, earnings in Kern County establishments increased by 72.5 percent, compared to 16.2 for California and 21.3 percent for the U.S. While Kern County jobs increased by 22.6 percent over this period in the combined wholesale and transportation-ware-

housing sectors, they decreased nearly 5 percent in both California and the U.S. Not only is this economic cluster growing more rapidly in Kern County than elsewhere, it is becoming an increasingly important cog in Kern County’s economic development. These growth rates for earnings and jobs in Kern County’s logistics cluster exceeded growth in total nonfarm earnings and nonfarm employment, increasing the cluster’s overall contribution to Kern’s economy. There are reasons to be optimistic. The Tehachapi Trade Corridor Improvement Fund project will increase rail capacity eastward by 70 percent when completed in 2015. Inquiries to both the International Trade and Transportation Center in Shafter and Tejon Ranch Commerce Center are accelerating; and neither has fully exploited the advantages of Foreign Trade Zone status. Increasing labor strife in the Inland Empire’s warehouse industry will draw even greater attention to Kern County’s labor force, which is known for its productivity and work ethic. — Mark Evans is a professor and chairman of the Economics Department at California State University, Bakersfield.

DEC. 2012 / JAN. 2013

Bakersfield, Kern County achieve top rankings By David Lyman

akersfield and Kern County consistently received positive rankings during 2012. These rankings reflected a recovering local economy, one that was much stronger than most other large metro areas, both in California and nationwide. For example, Kern ranked first in postrecession private sector job growth in the state. According to the U.S. Bureau of Labor Statistics, Kern had the highest private sector growth rate among large California metros, and the 15th best rate nationwide, for the five-year period between July 2007 and July 2012. In addition, Kern ranked first in California for 10-year private sector job growth, reflecting an increase of 11.37 percent new jobs locally between 2001 and 2011, bureau data revealed. Kern also ranked first in manufacturing job gains. Its 13.74 percent increase between April 2011 and April 2012 was the largest in the nation, according to the BLS. A few months later, Kern ranked first in construction job gains, reflecting a 23 percent rise in construction jobs locally between July 2011 and July 2012, once again the largest rate increase nationwide, according to the Associated General Contractors of America. In terms of paychecks, Kern ranked second in: wage growth among large California

KERN BUSINESS JOURNAL

counties; 10-year wage growth (4.39 percent); five-year wage growth (4.28 percent); and one-year wage growth (3.60 percent), according to U.S. Bureau of Economic Analysis data. Kern ranked fourth in income growth in California, as local household income rose at the fourth highest five-year rate among California metro areas. In the Central Valley, Kern paychecks were the second largest, reflecting Census Bureau data that the average pay per employee in Kern was second only to Sacramento. Kern also ranked 11th nationally in terms of overall annual growth rate. According to a study prepared by the U.S. Conference of Mayors, not only was Kern strong nationally, it had the largest average annual economic growth rate of any California metro area. Bakersfield ranked 11th among â&#x20AC;&#x153;U.S. growth cities,â&#x20AC;? according to U-Haul International, reflecting top growth areas for families that moved during 2011. Bakersfieldâ&#x20AC;&#x2122;s 11th place ranking was far higher than its 2010 rank of 49th. All of these rankings bolstered the finding by the Brookings Institution that Kern was among the top 20 strongest economies in the nation. And not all the positive rankings were economics based. Among them: Bakersfield was declared the seventh friendliest city in California, according to the social network Tagged. By the â&#x20AC;&#x153;numbers,â&#x20AC;? Bakersfield is ninth largest city in California and 51th largest city in U.S. Between 2000 and 2011: The cityâ&#x20AC;&#x2122;s population increased 42 percent; the labor force increased 27 percent; and land area increased 27 percent. â&#x20AC;&#x201D; David Lyman is the manager of the Bakersfield Convention and Visitors Bureau.

TO ALL WHO remember to

CHECK BEFORE YOU BURN â&#x20AC;Ś and to all the people committed to making one change for healthy air

valleyair.org Âˇ 1-800 SMOG INFO

Right now, designing buildings is something she does for fun. Tomorrow, it might just be a hobby. But someday, it will be the thing sheâ&#x20AC;&#x2122;s known for. And Childrenâ&#x20AC;&#x2122;s Hospital Central California wants her to get there. Thatâ&#x20AC;&#x2122;s why we have the best doctors and nurses trained to work specifically with kids, using the best equipment designed just for kids.

She may never need to go to the hospital. But if she doesâ&#x20AC;Ś Childrenâ&#x20AC;&#x2122;s stands ready to return her to the business of being a kid.

BEING A KID IS AN IMPORTANT JOB.

ChildrensCentralCal.org

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Photo courtesy of Kern Wind Energy Association

EDF Renewable Energy announced the completion of its wind and solar projects.

Business at-a-glance (continued) Continued from page 3 renewable megawatts under long-term agreements with SDG&E to 343 megawatts, all of which are generated in Kern County. — EDF Renewable Energy

Hire workers, save money The Kern County Department of Human Services is offering the Employer Accessible Subsidized Earnings Program (EASE) to qualified employers. This program reimburses 70 percent of the cost for hiring new employees during the first 17 weeks of employment. The county department will work with employers to streamline the contract process, recruit and refer qualified job applicants, and assist with retention. DHS can also suggest ways to combine EASE with other programs, such as Employment Preparation and Work Opportunity Tax Credits to enhance employer benefits. For more information, call 633PAID. — Department of Human Services

Non-profit group offering mediation services Kern Mediation Affiliates, a local non-profit organization, has opened a Bakersfield office to offer services in alternative dispute resolution. Eight professionals who can assist with a wide range of disputes in areas such as contracts, personal injury, employment, real estate, wills and trusts, divorce, landlord/tenant collections are associated with Kern Mediation Affiliates. Kern Mediation Affiliates offers comprehensive services to help people resolve matters without having to go to court. Specialized services are offered by mediators, collaborative attorneys, a financial analyst and a licensed document preparer. The mediators are Laurelyn Irving, Gerald Oldfield and Susan Salvucci. The collaborative attorneys are Bobby Cloud, Carl Hart, Steve Klink and Gerald Oldfield. The financial analyst is Shannon Blair. Scott Powers is the licensed document preparer. The office is located at 3100 19th St., Suite 150. Call 661-NO FIGHT (661-663-4448) for more information. — Kern Mediation Affiliates

Stadium, retail complex planned Owners of the Bakersfield Blaze unveiled plans last month for a privately financed, 3,500-seat stadium that would become the first-phase centerpiece of the Bakersfield Commons mixed-use development project at Coffee and Brimhall roads. Construction is expected to begin early next year and the ballpark could open in

2014. The $20 million stadium will enable the Blaze to leave the county’s aging Sam Lynn Ballpark for a family-oriented facility to be accompanied — eventually — by new restaurants, retail and entertainment such as a new movie theater. “The idea of this is to be more than just a baseball field,” said Gene Voiland, a prominent local oil executive who together with Bakersfield oilman Chad Hathaway purchased the Blaze last spring. “We are putting together an entertainment complex.” If approved as proposed, the 15-acre project would crown decades of sometimes frustrating negotiations aimed at giving Bakersfield a new baseball stadium. It would also comprise the “anchor tenant,” considered key to attracting retail tenants to the 255-acre Bakersfield Commons project. While the stadium would present new opportunities — it is expected to become a venue for concerts and, potentially, Cal State Bakersfield baseball — it also carries financial risks for the team’s new owners. By their own estimate, the new stadium will have to draw an average of 2,500 spectators per game, or about five times the typical Blaze home game at Sam Lynn. — The Bakersfield Californian

Almonds No. 2 commodity Almonds were the second-most valuable commodity in California in 2011, surpassing grapes for the first time ever, according to the California Department of Food and Agriculture. Kern County is one of California’s top almond producing areas. In 2011, almonds generated $3.87 billion of economic activities, according to state agriculture data, and grapes were valued at $3.86. Milk continued to be the top grossing commodity in California, valued at $7.6 billion last year, up from $5.93 billion in 2010. — Kern Business Journal

DEC. 2012 / JAN. 2013

KERN BUSINESS JOURNAL

DEC. 2012 / JAN. 2013

Home Is Where Your Health Is W ere you recently in the hospital, but still need regular medical treatment? "U "EWFOUJTU )FBMUI T )PNF $BSF 4FSWJDFT PVS NFEJDBM UFBN CSJOHT BXBSE XJOOJOH IFBMUI DBSF SJHIU UP ZPVS GSPOU EPPS Our services include: t 4LJMMFE OVSTFT BWBJMBCMF IPVST B EBZ t )PNF IFBMUI BJEFT GPS BTTJTUBODF XJUI EBJMZ MJWJOH BDUJWJUJFT t 4QFFDI UIFSBQJTUT UP IFMQ ZPV HBJO CBDL ZPVS JOEFQFOEFODF t 1IZTJDBM UIFSBQJTUT UP IFMQ JODSFBTF ZPVS NPCJMJUZ BOE EFDSFBTF QBJO t .FEJDBM TPDJBM TFSWJDFT UP IFMQ DPVOTFM ZPV UISPVHI EJรถDVMU UJNFT

Adventist Health Home Care Services are available for all ages.

www.sjch.us/homecare

Ask your doctor for a referral or call 661-869-6700.