Leaders discuss helping business, commerce thrive at Castle

This year marks the 20th anniversary since Castle Air Force Base closed, leaving behind shuttered buildings, crumbling infrastructure and a staggering economic blow from which Merced County is still recovering.

But there’s hope for the former Atwater military base, according to participants in a roundtable discussion at the complex Thursday. A large contingent of legislators, elected officials, economists, educators and researchers gathered to share their ideas on the future of Castle.

And the question on everyone’s minds: How do we transform Castle into a thriving business and commerce center?

The forum included Rep. Jim Costa, D-Fresno; state Sen. Anthony Cannella, R-Ceres; Assemblyman Adam Gray, D-Merced; Merced County Supervisors Daron McDaniel and Hub Walsh; Merced Mayor Stan Thurston; and Atwater Mayor Jim Price. Merced College President Ron Taylor and UC Merced officials also attended.

They discussed some of the challenges of developing the former base, including transportation, lack of skilled workers in the area and deficiencies of infrastructure, including water and sewer services.

At least 55 buildings need to be demolished, officials said, but the county lacks the resources to do it.

Merced County took full ownership of the 1,912-acre property in 2006 and rebranded it Castle Commerce Center. It became home to AT&T call centers, Big Creek Lumber, Hoffman Electronic Systems, Sierra Flight Academy and others.

But all the challenges have hindered the old Air Force base from reaching its full potential for redevelopment and reuse, officials said.

Mark Hendrickson, Merced County director of community and economic development, said the property wasn’t zoned and no market analysis was done, leading to a “hodgepodge” of tenants at the base. Some unfriendly business practices led to missed opportunities and a few firms promised the world, he said, but didn’t deliver.

But Hendrickson also pointed out many accomplishments. Revenue increased 15.8 percent in 2014 over the previous year, generating $1.7 million for the county.

Castle has a 3 percent vacancy rate and all buildings without structural problems are occupied. Google signed two leases at Castle to test its self-driving car program and balloon Internet technology.

Perhaps the most notable accomplishment was being a frontrunner for a $5 billion Tesla Motors battery factory last year. The plant, which would have brought 6,500 jobs, was placed in Nevada, but Castle was one of the top five sites under consideration.

Tesla plans to build five or six more manufacturing plants and local officials say Castle will be considered again. “Because of our efforts and putting our best foot forward, we remain part of those discussions,” Gray told the group Thursday.

A firm was hired to complete a market analysis to identify which industries Castle would be best suited for. GLD Partners’ analysis found that the best fits for the ex-base are food production, industrial machinery, medical products, specialty chemicals and energy products industries.

“We think there’s opportunity in all of these examples,” said Adam Wasserman, a managing partner at the firm. Wasserman said officials will brief the Board of Supervisors on the results of the market analysis in April.

Costa asked if the firm will continue its relationship with Merced County, helping to put Castle’s plan in front of potential investors. Wasserman said that’s the county’s decision, but he’s prepared to help with the next steps.

Castle has just 400 to 500 acres of land that can be developed, officials said. Demolishing deteriorating buildings is crucial to making room for land that can be developed.

After the discussion, Costa said he’s committed to exploring options to help with that. “There are a lot of buildings that have outlived their usefulness and that has to be dealt with,” the congressman said. He suggested visiting other former Air Force bases to find out how they’ve overcome similar challenges.

Gray stressed the importance of supporting UC Merced and Merced College to help the county generate a more skilled workforce for companies that want to locate at Castle.

Gray said he wants to see Thursday’s forum become a regular event, with officials meeting every three months to discuss Castle.

This story was originally published March 12, 2015 at 10:48 PM with the headline "Leaders discuss helping business, commerce thrive at Castle."