Din of Hammers, Oil Wells Signal Bakersfield Boom

By By TRACIE CONE Associated Press
BAKERSFIELD, Calif. December 29, 2012 (AP)

For most of its existence, Bakersfield has inhabited that awkward in-between place. Not as sophisticated as Los Angeles, just over the Tehachapi Mountains to the south, not as wealthy as its longtime economic rival Fresno, equidistant to the north.

But as many communities continue to struggle economically, good things are happening in this place best known for endless oil fields and the "Bakersfield Sound" — a twangy style of steel guitar music made popular by hometown country crooners Buck Owens and Merle Haggard.

Bakersfield and surrounding Kern County find themselves in lofty positions on key national lists measuring economic vitality: No. 1 metro area for long-term private sector job growth, No. 1 county for construction gains and No. 1 large metro area for annual economic growth.

Cheap land, affordable housing, proximity to Los Angeles, a location that's within a three-hour drive of 90 percent of the state's population, and a planning department that doesn't throw up roadblocks are driving the region's economic revolution, business leaders say.

Caterpillar's new parts distribution center at the confluence of Interstate 5 and Highway 99, the state's two major north-south transportation arteries, went from handshake to grand opening last August in just eight months. It joined 35 other logistics centers near there such as Ikea, Frito Lay, Dollar General, Famous Footwear and Target, drawn to the county because it is a one-day turnaround for truckers delivering from San Francisco to San Diego.

AP In this Dec. 18, 2012 photo, one of the region's thousands of oil pumps sits in the foreground of the new Westside Parkway under construction in Bakersfield, Calif. Much of the economic boom Bakersfield is enjoying is because high oil prices and new technology for extraction have revived the $10 billion industry that seemed dried up 25 years ago when Kern County set out to diversify its economy and expand its tax base. (AP Photo/Tracie Cone)

The demand for industrial and office space has left Kern County with little inventory.

"Everything is moving," said David Wagner, contractor Wallace & Smith's superintendent on a 28,000-square-foot business complex that's now a skeleton of I-beams. "The developer already has tenants for this and it won't open until April."
The contractor just finished a 160,000-square-foot cold storage facility in Delano, a NASCAR-style racetrack and a regional blood bank. It has four apartment complexes under construction and will break ground in February on a minor league baseball stadium.

Electrician Bryce McCall wondered during the downturn whether he had chosen the right profession. Not anymore.

"My wife and I would discuss whether I would be better off going to the oil fields," he said as he drilled wiring conduits in a new garage at a new development. "Now the jobs are happening and we're starting to pick up."

There's such an active business climate that this fall the Kern County Economic Development Corporation and Bakersfield Californian newspaper bucked industry trends by launching a print paper, the Kern Business Journal, now on its second edition. A new east-west freeway through the middle of town is paved and close to opening.

Long reliant on agriculture and oil, there's diversity of industries emerging, with renewable energy and aerospace gaining a foothold.

At the Mojave Air and Space Port in southeast Kern County, Virgin Galactic's SpaceShipTwo preps for the day it will carry passengers into suborbital space, and Paul Allen's Stratolaunch Systems is building the world's largest aircraft — one that will carry rockets with commercial cargo and, eventually, passengers to the edge of space.

The wider, extended runway the company needs already was built. The space port complex has 400 acres pre-approved for construction.

Despite the progress, hurdles remain. Unemployment in the county is 12.4 percent, down from 16.2 percent in December 2010 but still above the statewide average of 9.8 percent. And Bakersfield still is a hard sell for some.

Two years ago, State Farm consolidated its insurance centers in Rohnert Park in the Bay Area and Fresno into its Bakersfield office. The company expected that 35 percent of the Rhonert Park workers would take the transfer. After taking bus tours of the city with its vibrant downtown and tree-lined neighborhoods, 70 percent of the workers took the transfer.

"People come here and they say, 'Oh my God, there are amenities and people can speak full sentences.' It's the perception versus the reality," said Richard Chapman, president of the Kern County Economic Development Corporation.
Chapman said the area's workforce, while reliable, needs to be better educated and trained. Many young people tend to go away to college and not come back.

"We have 100 job openings for welders, but companies aren't going to train you," Chapman said.

Bakersfield has boomed before — it saw huge population and economic growth when the economy surged in the late 1990s and into the early years of the new century. But it fell hard when the bottom dropped out of the housing market. Now, it's housing that's helping to make the city attractive again.

AP This Dec. 18, 2012 photo shows the Westside Parkway, a new east-west freeway that is nearing completion, in Bakersfield, Calif. Bakersfield is experiencing a building and jobs boom and the new Westside Parkway is designed to alleviate congestion there. (AP Photo/Tracie Cone)

The median price of a three-bedroom home is $130,000 — down from $216,000 in 2007 — which makes the region appealing to employers looking to relocate.

It's also a cheap place to do business. In a recent analysis of the taxes and fees charged by 421 U.S. cities, the annual Kosmont-Rose Institute Cost of Doing Business Survey rated Bakersfield a "low cost" city for doing business. Los Angeles was rated "very high cost."

Much of the boom Bakersfield is enjoying is because high oil prices and new technology for extraction have revived the $10 billion industry that seemed dried up 25 years ago when Kern County set out to diversity its economy and expand its tax base. Some estimates place up to 80 percent of California's oil under Kern County soil, with an estimated 12 billion barrels trapped in shale, the largest deposit of any county in the nation. Today's $100-a-barrell prices have inspired the innovation needed to extract it.

Chevron is expanding its offices, and other oil companies and related industries are eying land for development.

Kern County also has embraced 21st century energy by pre-zoning project areas for wind and solar. The value of wind energy projects is assessed at $7.5 billion. Wind will generate 3,000 new Kern County jobs this year, the industry estimates.

Recently, philanthropist and retired oil executive Gene Voiland bought the Bakersfield Blaze, a Class A farm team of the Cincinnati Reds. His stadium project is part of a new high-end shopping complex on the affluent west side of the city.

PG&E is removing an antiquated oil-burning power-generating plant to clear 200 prime acres for the project.

"I've moved here four times while I was in the oil business, and I'm retired here because I thought it was the best place I've ever lived," he said. "It's a good town. People do their jobs."