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Report: Central Valley home prices up year-over-year

 Marc Lutz

 

A recent report has shown home prices throughout the Central Valley to be up over the same time last year, but those prices might be coming down.

In its December 2017 data report, CoreLogic, an analytics and data provider, stated that home prices nationally were up 6.6 percent in December over the same time in 2016.

Locally, home prices in Stockton-Lodi and Modesto were also up. In Stockton-Lodi, prices increased by 7.8 percent year-over-year. In Modesto, prices were up 9.1 percent year-over-year. Those prices include distressed sales.

From November 2017 to December 2017, prices increased by 0.5 percent in Stockton-Lodi and decreased 0.4 percent in Modesto.

“Home prices continue to rise as a result of aggressive monetary policy, the economic and jobs recovery and a lack of housing stock. The largest price gains during 2017 were in five Western states: California, Idaho, Nevada, Utah and Washington,” said Frank Martell, president and CEO of CoreLogic in a press release. “As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first-time buyers and moderate-income families to buy. At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued.”

Thirty-five percent of the metropolitan areas with the overvalued housing markets have prices that are 10 percent above a long-run sustainable level, CoreLogic reports.

“The number of homes for sale has remained very low,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

Report: Central Valley home prices up year-over-year

Taking a look at top trends in Central Valley tech for 2018

Phillip Lan

 

Twenty-seventeen has proven to be yet another exciting year in technology.

We’ve seen Google’s artificial intelligence create its own ‘AI child,’ which outperforms those created by humans, growth of blockchain, rapid advancements in quantum computing, flying cars and expanded use of the precise gene editing technique CRISPR/Cas-9.

Scientists are even beginning to develop potential roadmaps to reverse aging.

As we close out the year and look forward to 2018, let’s take a moment to see which upcoming technology trends will be the most impactful for the Central Valley.
On a side note, isn’t it interesting that as collective human knowledge grows exponentially, individual humans appear to be less capable? Some of us are losing the ability to read maps, spell correctly and do arithmetic in our heads. As voice-enabled smart devices evolve into wearables and then implantables, some people may find literacy to be unnecessary in a few years.

Back to 2018 tech trends.

Safe-driving vehicles, not self-driving vehicles
Despite all the attention that Tesla and the GM/Cruise Automation combo have been getting, Level 5 fully-autonomous vehicles are still several years away. 2018, however, will see the launch of collision avoidance, automatic braking and lane monitoring technologies from most major vehicle manufacturers.

Besides saving lives and reducing injuries, the elimination of fender-benders will eventually drastically lower our auto insurance premiums. Delivery fleets are now testing these same features, and semi-trucks may well be the application that pushes the pace for adoption of fully autonomous vehicles in the Central Valley.

Agtech hits its stride
Agriculture and construction are two of the last large industries yet to be disrupted by advanced software. Progress has been slow in these sectors, but momentum is now accelerating in agtech. John Deere’s $305 million acquisition of Blue River Technologies has lit a fire under venture firms to investigate opportunities and make investments in this space. We are still a few years away from viable protein reactors that literally produce food out of thin air or lab-grown meat (our grandkids will surely find it barbaric that we had to actually kill animals for meat), but many agtech companies are already being funded to improve yields and reduce pesticide use through intelligent software.

Ceres Imaging (ceresimaging.net), an Oakland-based VC-funded company is led by agricultural and technology professionals including agronomists, hydrologists, and remote sensing experts. The company’s products, which include agronomic insights through aerial spectral imagery, proprietary sensors and analytics, and artificial intelligence software is already being used to help local almond farmers optimize nut harvests and profits.

Local software and digital marketing talent expands 
The next generation of agtech won’t drive productivity gains solely from mechanization as in the past. Instead this new generation will leverage state-of-the-art machine learning and artificial intelligence software. Fortunately, as I mentioned in a previous column, Stanislaus County has established itself as a software development hub, with local companies employing over 1,000 programmers. Several initiatives will further accelerate growth of the county’s software talent pool and even expand it into the Stockton area.

  • Valley Hackathon (valleyhackathon.com) a fast-growing programming contest that highlights local programmers continues to expand and draw coders into the tech community. The next event will be held at Modesto’s ValleyWorx (valleyworx.com) tech and digital design co-working space on January 26 and 27.
  • ValleyWorx now hosts a rapidly expanding coding meetup every Wednesday from 3-8 p.m. The collaboration with Free Code Camp is providing an easy entry point for developers to accelerate their growth.
  • Bay Valley Tech’s (bayvalleytech.com) coding camps and advanced software development classes taught by professional programmers will also grow the local talent pool.
  • In 2018, Bay Valley Foundation (bayvalleyfoundation.com) will begin raising money for a technology scholarship fund to provide tuition assistance to Central Valley students seeking careers in software development.
  • The Entrepreneur Lab, based in downtown Stockton’s Huddle co-working space, is a 21-week, intensive incubation program which cultivates high-growth startups.

In addition to software, the Central Valley’s digital design and marketing capabilities are also expanding rapidly.

Final Cut Media (finalcutmedia.com) saw their business and headcount triple in the last year alone. As experts in marketing strategy, design and digital video creation, they help leading brands such as Bay Area-based Fit Republic Health Clubs successfully plan and execute integrated, digital-focused marketing campaigns. Final Cut is also a trusted advisor to large organizations like Stanislaus County, developing digital/social communications strategies for their human resources and recruiting teams.

Mike Daniel, Partner and Chief Marketing Officer at Final Cut, advises companies to build a solid digital content/distribution strategy and then leverage data to create an effective lead funnel. Final Cut’s success is further driving rapid tech and digital marketing growth in the Valley.

Expanding Bay Area companies bring more high-paying tech jobs
Bay Area technology firms winning in the global marketplace have created tremendous wealth in the form of profits, salaries and stock options. The resulting competition for tech workers and housing have raised salaries but diminished affordable housing in the San Francisco/San Jose region.

Some communities now require an annual income of $218,000 to qualify for a median-priced home.

Tech firms looking for relief have traditionally expanded out of state to destinations such as Denver, Austin and Seattle. The recent surge in Central Valley software talent, however, is beginning to catch the attention of Bay Area companies.

The Modesto/Stockton area now has both affordable housing and tech talent, making the region an attractive option for Bay Area companies who want to keep satellite offices closer to home.

American Medical Response, Novo Technologies and Oportun have all been expanding and hiring software professionals in their Modesto offices. Recently, Varsity Technologies (varsitytechnologies.com), a San Francisco-based company providing outsourced IT services to organizations that want to make a difference (non-profits, schools and healthcare organizations) opened a second office in Modesto within the ValleyWorx tech co-working space.

Local businesses and techies are thrilled to have Varsity bring their expertise and jobs to our community and are confident more Bay Area companies will see the value of investing in our region and our people in 2018.

Gallo in top 100 of ‘Best Places to Work’ for 2018

December 6, 2017

 

E&J Gallo Winery of Modesto was chosen as one of the best places to work in a recent survey.

The winery, founded in 1933, was ranked 14 out of 100 of the “Best Places to Work in 2018” by Glassdoor, a job recruitment company. In 2016, Gallo was ranked 47 out of 50.

Current and former employees give their input about their experience in the workplace, which Glassdoor then compiles. Gallo will be honored with the Glassdoor Employees’ Choice Award.

“Our employees continue to be our greatest asset. I am proud of our strong company culture and the commitment of our employees who make Gallo a great place to work,” said Joseph Gallo, president and CEO of E&J Gallo Winery, in a statement. “We are deeply appreciative that our employees and Glassdoor have recognized Gallo as a great employer.”

Gallo is the largest family-owned winery in the world, according to the company, and produces brands such as Barefoot Cellars, Dark Horse, Apothic, Carnivor MacMurray Estate Vineyards and many more. Outside of wine, Gallo creates and markets vodka, gin, brandy and whisky.

“We know today’s job seekers are more informed than ever about where they go to work, researching everything from company culture to career opportunities to pay philosophy and more,” said Robert Hohman, CEO of Glassdoor. “Employers where employees love to work continue to prove that they have a recruiting and business performance advantage.”

Gallo in top 100 of ‘Best Places to Work’ for 2018

 

Essendant Claims 405K SF in Shafter

November 30, 2017

Wonderful Real Estate signed a build-to-suit lease with Essendant Co. for a 405,299-square-foot industrial building at Wonderful Industrial Park (WIP) in Shafter, CA. The leading wholesale distributor of business products, will use this facility for local and regional fulfilment, e-commerce and distribution, with move-in scheduled for the second quarter of 2018.

Wonderful Real Estate’s Joe Vargas says, “Essendant completed a thorough evaluation of the Central Valley and selected WIP for its favorable business and community environment, close proximity of qualified labor and a reliable developer/owner with successful track record on deliveries.”

JLL’s Mike McCrary, Peter McWilliams and Mac Hewett are leading the leasing efforts at Wonderful Industrial Park, a 1,625-acre rail served, master-planned, entitled industrial development able to accommodate requirements ranging from 100,000 to two million square feet.

https://www.connect.media/essendant-claims-405k-sf-shafter/?utm_source=mlCalifornia&utm_campaign=mlCalifornia-2017-11-30_19:01-Cyber_Monday_Sales_Hit_3_4B_Top_U_S_Online_Spending_Day_in_History&utm_medium=email&utm_term=news%20inland-empire%20development%20industrial&utm_content=Cyber_Monday_Sales_Hit_3_4B_Top_U_S_Online_Spending_Day_in_History&pid=da2c2d2e-f8de-4f30-8fdc-744ec90994ec

$30 million, 115-home development set for Tulare

TULARE
November 30, 2017 6:36am

 

•  Entry-level community expected to open for sale in Spring 2018

•  Latest development by San Joaquin Valley Homes and Presidio Residential Capital

A new residential community called “Brighton” with 115 detached single-family homes more than 72 acres in Tulare is to be built by San Joaquin Valley Homes and Presidio Residential Capital.

Construction on model homes is scheduled to begin in January 2018, and the neighborhood is expected to be open for sale next spring. The retail value of the project is estimated by the developers to exceed $30 million.

“Brighton is ideally located for families and professionals with easy access to employment and entertainment opportunities in the Central Valley,” says Danny Garcia, vice president of sales at SJV Homes.

The development will feature entry-level homes with five floor plans ranging from 1,574 to 2,314 square feet and a move-up line ranging from 2,000 to 2,831 square feet on lots averaging 7,226 square feet. It will include a community park and a pond.

Founded in 2013 by Joe Leal, Jim Robinson and Randy Merrill, SJV Homes sold its 1,000th home in September. Brighton is SJV Homes’ 16th joint venture project with Presidio Residential Capital, a San Diego-based real estate investment company that funds 100 percent of the projects and operations of SJV Homes.

According to the National Association of Home Builders’ formula to determine the local impact of single-family housing in typical metro areas, adding 115 single-family homes will generate $33 million in local income, $9 million in taxes and other revenue for local governments and 453 local jobs, says SJV Homes.

http://www.centralvalleybusinesstimes.com/stories/001/?ID=33722

California sees nation’s third-best economic growth in 2017

LOS ANGELES
November 27, 2017 5:01am

•  GoBankingRates examines unemployment rate, income growth and GDP growth

•  And the No. 1 is… Really?

California has the nation’s third-best economic growth this year among the 50 states, according to a new analysis by the personal financial website GoBankingRates.com, which is based in Los Angeles.In California, the information industry easily outpaced all other industries, contributing 0.71 percentage points to California’s GDP. The finance, insurance, real estate, rental and leasing industry contributed only 0.34 percentage points.

West Virginia saw the most economic growth of any U.S. state in 2017, the study says.

Nevada ranks No. 2 in the country, with the second-highest GDP growth rate and the third-biggest drop in unemployment. The state falls short when it comes to personal income growth, with only a 2.39 percent increase.

To identify areas with the strongest economies, GOBankingRates analyzed GDP growth, personal income growth and percent decrease in overall unemployment rate. States were given a score based on their performance in each category. The scores were added up to determine the states with the strongest economies moving into 2018.

Top Five States with the Strongest Economies in 2017
1. West Virginia

GDP growth: 6.84 percent

Personal income increase: 2.75 percent

Unemployment rate decrease: 1.3 percentage points

2. Nevada

GDP growth: 6.38 percent

Personal income increase: 2.39 percent

Unemployment rate decrease: 1.2 percentage points

3. California

GDP growth: 4.9 percent

Personal income increase: 3.4 percent

Unemployment rate decrease: 0.7 percentage points

4. Pennsylvania

GDP growth: 5.34 percent

Personal income increase: 3.14 percent

Unemployment rate decrease: 0.6 percentage points

5. Indiana

GDP growth: 3.55 percent

Personal income increase: 3.9 percent

Unemployment rate decrease: 0.8 percentage points

Kentucky ranked No. 16 on the list of strongest economies due to high GDP growth. However, the state has low personal income growth and saw an unemployment decrease of only 0.1 percent.

Indiana saw the highest boost in personal income of any state at nearly 4 percent. The state as a whole ranks No. 5 on the list.

Drilldown

 

New Construction Boosts Visalia Industrial Park

With virtually no vacant space in the Visalia Industrial Park a spurt of new construction is underway that will make room for both new tenants, local company expansions and relocations in coming months.

If there are few empty buildings to lease, Visalia sports about 1,000 acres of land “zoned and ready to go,” according to Visalia economic development  manager staffer Devon Jones.

Developers looking to encourage companies who might want a location in the Central Valley are building several concrete tilt-up “spec buildings” in Visalia that can be ready for tenant improvements and occupancy in a matter of weeks.

Making new projects feasible, the city has a streamlined permitting process and lots are hooked up to sewer and water. In addition there has been a $130 million investment in roads over the past few years with easy access to Hwy 99 and the rest of California.

We are talking ’speedy delivery’ – not just for goods but for new buildings that will house future distribution and manufacturing hubs.

Visalia’s mid-state location makes it attractive for ground shipping of goods to the Western US, enabling parcels to arrive in one-day to many locations.

Hub Central
None other than United Parcel Service appears to be convinced, having invested in the purchase of 58 acres north Riggin at Plaza  earlier this summer. Sources says UPS plans a phased development to start with – a modular sorting center to replace its current small distribution center on Goshen Ave. Then, a 400,000 permanent complex will be next for UPS – said to be the big company’s future main hub in the Central Valley. Growth around its Fresno facility has boxed them in say real estate sources. Visalia’s ample industrial acreage is apparently the answer.

The land is the first parcel to sell in the Central Valley Logistics Center industrial park on the northwest corner of Plaza and Riggin since it was zoned for development a decade ago.

Screen Shot 2017-11-09 at 12.34.57 PM

 

Another big shipper is making Visalia its hub. Golden State Overnight (GSO) now owned by Britain’s Royal Mail, is building a 63,000sf distribution center at a cost of $2.3 million right now.Royal Mail bought GSO last year for $90 million.

 “If Memphis is the biggest hub for FedEx and Louisville is the main UPS hub  – Visalia is our most important hub for the future” says GSO’s McKinley.

The company has a smaller facility it leases now that has truck docks only on one side, says company VP Bob McKinley. The complex being built by Visalia based American Inc will offer triple the number of cargo doors on both sides with full automation on the conveyor system, he says.

The GSO hub will employ about 70 when it opens and likely double that in some years expects McKinley.

“If Memphis is a the biggest hub for FedEx and Louisville is the main UPS hub  – Visalia is our most important hub for the future” says GSO’s McKinley.

Speedy Construction

Perhaps the most active developer who has long recognized the need to offer new industrial space in Visalia ahead of demand  – is John Brelsford of Fresno who owns Diversified Development Group.

Last summer Brelsford broke ground on a fast-track construction project to build 3 clustered industrial buildings in a matter of weeks along Riggin near VF Corp, completing them – a total of 403,000sf – by late October of this year.

Commuters passing by each morning last month marveled at the rapid progress on construction each day.

Screen Shot 2017-11-09 at 12.39.53 PM

While Mr Brelsford says he can’t reveal prospective tenants he is working with International Paper, who a has major paper cup manufacturing plant here, will use the most northerly building, a 140,000sf space according to the City of Visalia who received tenant improvement plans in recent days.

“They are about ready to move in” says city planner Jason Huckleberry.

A second space is close to being filled as well says Mr Brelsford.

Next Phase Coming 

Because interest has been so brisk Brelsford is not waiting to build more “spec” space. He says he expects to build about 800,000sf beginning next March on 33 acres he owns on the southeast corner of Plaza and Riggin, a few blocks from his other project.

Last year Brelsford acquired another big parcel at Plaza and Riggin – 150 acres from Doe family – now fully entitled and in the city limits at the northwest corner of this same key intersection.The spot is just 1.5 miles from the new Betty Drive interchange on Hwy 99 that is expected to be complete in a few months.

If newcomers make the news, expansion of existing industrial park tenants are the bread and butter of Visalia’s economy.

While some worry that many new distribution companies looking here take larger spaces of source but actually have few employees. But some are both big on their space needs and offer lots of jobs

Consider VF Corp, the international clothing maker, who has a million square foot distribution center on Plaza Drive. VF, maker of Wrangler, Lee Jeans and NorthFace outdoor clothing, employs up to 1,100 people and most of them live within a 10-15-mile radius from the facility says the company.VF has recently completed a $3 million upgrade to their facility and plans more in 2018.

Another industrial park tenant that continues to grow larger is Perfection Pet Foods, a division of  Western Milling, based in Goshen. The pet food maker is building a $6.2 million office and warehouse right now. Owner Kevin Kruse says they are replacing a 100,000sf warehouse a few miles away.”We wont have to move our products across town” from their manufacturing plant, he figures. The new warehouse will house products ready to ship to Walmart and other large customers. Perfection Pet Foods employs about 120  at their growing campus of buildings in the northwest part of the industrial park.

As interest in new buildings grow, the vacated space makes room for others who will likely gobble up this 100,000sf left by the pet food company, for example.

Meanwhile smaller players like local developer Danny Freitas says his various Visalia industrial park spaces are all spoken for and he will now build two new 40,000sf “spec” warehouses for lease, one on Kelsey and one on Sunnyview.

Also in the industrial park, Servall, the big appliance parts and repair company says they will open their new sales and distribution center in Visalia in December 2017 at 2247 N. Plaza Dr., Suite D, in am existing 35,000 sf building – one of the few vacant spots in the Mid-State 99 complex.

The company cited their ability to do one-day shipping of appliance parts to consumers and businesses throughout all of California.The business will employ 20.

Speedy Delivery 

 

Naval Air Station Lemoore gets first F-35c Fighter Jets

January 27

 

 

Four Navy F-35C Lightening II fighters arrived at Naval Air Station LeMoore, California on Jan. 25 in what naval aviation officials are calling a huge step in the evolution of Lemoore as the Navy’s first Joint Strike Fighter Base.

It’s a major step in the Navy’s journey to get the Joint Strike Fighter into carrier air wings, currently slated to happen in February 2019.

This is the first delivery of the aircraft carrier variant JSF stealth fighter not only to the base, but to the “Rough Raiders” of Strike Fighter Squadron 125. The squadron was reactivated at Lemoore on Jan. 12 to be the West Coast JSF fleet replacement squadron.

LEMOORE, Calif. (Jan. 25, 2017) Vice Adm. Mike Shoemaker, commander of Naval Air Forces, speaking at the arrival of the first four JSF F-35C fighters at NAS Lemoore called the JSF “game-changing technology for naval carrier air wings.

Photo Credit: MC3 Zachary Eshleman/Navy

“This is truly game changing technology and, no kidding, what it takes to win the future high end fight,” Shoemaker said.

Still, naval aviation officials say the airframe is a critical cog in the Navy’s air wing of the future. The Navy is transitioning to include the Boeing F/A-18E/F Super Hornet fighters and their sister aircraft, the EA-18G Growlers electronic attack aircraft.

The high-tech wing is rounded out by the Northrop Grumman E-2D Hawkeye multi-mission surveillance aircraft and Sikorsky MH-60R/S Seahawk helicopters and then next generation of the Carrier Onboard Delivery aircraft, now expected to be a variant of the Boeing V-22 Osprey.

“The initial plan is for VFA-125 and the first 7 operational F-35C squadrons to be based out of NAS Lemoore,” said Cmdr. Jeannie Groeneveld, spokeswoman for Naval Air Forces in San Diego.

The original plan had the Navy’s first JSF unit — the “Grim Reapers” of Strike Fighter Squadron 101, currently based at Eglin Air Force Base in the Florida Panhandle, to move to Lemoore this month.

Instead, the Navy opted to stand up VFA-125 at Lemoore as a separate West Coast squadron instead. Groeneveld told Navy Times that no decision has been made on any future JSF home bases, including on the East Coast.

For now, VFA-101 will stay in Eglin and also train pilots and enlisted maintainers as the service begins to transition squadrons into the new stealth jet.

“There is no plan in the foreseeable future for VFA-101 to be stood down,” Groeneveld said. “The requirement is for two FRS while we are transitioning squadrons. Both will be capable of instructing the same syllabus to include new accession pilots and transitioning aircrew.”

Navy’s leadership considers Lemoore an ideal place to train pilots and aircrews. There’s easy access to training ranges in Nevada and it’s a short hop out to carriers operating off the West Coast from San Diego as well as Washington State.

“We enjoy basically unencroached airspace in Lemoore to practice here as we do at sea,” said Capt. David James, commanding officer of NAS Lemoore.

Lemoore, is expected to add more personnel and F-35C squadrons over the coming years. In the past year, the service relocated the “Knighthawks” of Strike Fighter Squadron 136 from Naval Air Station, Oceana in Virginia to the base.

141104-N-ZZ999-012 PACIFIC OCEAN (Nov. 4, 2014) Two F-35C Lightning II carrier variant joint strike fighters conduct the first catapult launches aboard the aircraft carrier USS Nimitz (CVN 68). The F-35 Lightning II Pax River Integrated Test Force from Air Test and Evaluation Squadron (VX) 23 is conducting initial at-sea trials aboard Nimitz. (U.S. Navy photo courtesy of Lockheed Martin by Dane Wiedmann/Released)
141104-N-ZZ999-012 PACIFIC OCEAN (Nov. 4, 2014) Two F-35C Lightning II carrier variant joint strike fighters conduct the first catapult launches aboard the aircraft carrier USS Nimitz (CVN 68). The F-35 Lightning II Pax River Integrated Test Force from Air Test and Evaluation Squadron (VX) 23 is conducting initial at-sea trials aboard Nimitz. (U.S. Navy photo courtesy of Lockheed Martin by Dane Wiedmann/Released)

Two F-35C Lightning II stealth fighters set up for the catapult launchers as part of the aircraft’s first sea trials aboard the aircraft carrier Nimitz.

Photo Credit: Dane Wiedmann, Navy

 

Construction to finally begin on Bakersfield Commons in 2018

  • BY JASON KOTOWSKI

World Oil Corp. and Trammell Crow Co. have announced that construction of Bakersfield Commons, a “pedestrian-oriented, master-planned mixed-use community” located in northwest Bakersfield, will actually, finally begin next year.

The 260-acre project, the revised plans for which were announced last summer, will include office, retail, residential, recreational and industrial space, as well as a wellness campus.

“It’s unfolding as we envisioned,” Abby Ehman, a senior associate at Trammell Crow, said Monday.

None of the single elements planned for the Commons are in themselves complicated, Ehman said, but including them all in one plan is a massive undertaking.

The Commons is planned to ultimately include the following: 400,000 square feet of office; 300,000 square feet of retail; 280,000 square feet of light industrial; more than 1,000 residential units; and a 200 bed hospital.

Phase I construction, estimated to begin second quarter 2018, will be completed in 12 to 14 months, Ehman said. Full buildout could take up to a decade, and may be done in two phases instead of three.

She said the Commons will be a gathering space for Bakersfield.

“People will park there and go to three or four places,” she said.

While she could not yet disclose names of retailers who have committed to the project, she said a luxury theater is on board and will provide 12 “new state-of-the-art” movie screens. She said watching a movie there will provide “almost a living room environment” for theatergoers.

She said several eateries, restaurants, beauty concepts and fitness have also committed.

World Oil, which has owned the property at the corner of Coffee and Brimhall roads for nearly 50 years, received Bakersfield City Council approval with a unanimous vote in December 2016. Since then, design and pre-leasing has been underway.

According to a release from Trammell Crow, “The project is embracing a passive retention for storm water management, which utilizes landscape areas to naturally filter rainfall. Each area of the project is connected by walking paths, flanked by drought-tolerant plants, creating a walkable, livable master-planned community.”

Last year, city officials said the plan appeared to be “modern and well-appointed” with amenities appropriate for the area.

Alphabet’s Waymo Is Using A Castle In Its Bid To Become Self-Driving Car King

Less than a year since Google’s Self-Driving Car project became Waymo, the company is close to commercializing its extensive R&D. The Alphabet Inc. unit this week showed off how it’s fine-tuning sensors and software on faux city streets at a secret complex in a sleepy agricultural section of California to achieve that goal.

Known as the Castle, a nod to its former life as Castle Air Force Base, the Atwater, California, facility is where Waymo technicians since 2012 have safely created what they call “spicey” scenarios – complex interactions with other cars, pedestrians and bicyclists to help its robotic vehicles get smarter. CEO John Krafcik said tests there on streets with names like McFly Way and the Shirley Muldowney Expressway are vital complements to the 10,000 miles of public road tests and 10 million virtual miles Waymo now racks up daily.

“Our intention, make no mistake, is to go fully driverless and let the public access this technology on public roads. We’ve been working so hard on that task,” he told a group of journalists touring the Castle this week. And while Krafcik, a long-time Hyundai and Ford executive who’s led the former Google X unit since 2015, won’t say exactly when Waymo goes commercial, he leaves no doubt that that’s coming.

“It’s fair to say we’re really close.”

A decade since a team of Carnegie Mellon University engineers won the 2007 DARPA Urban Challenge and eight years since Google began a (once) top-secret program to perfect autonomous car technology, Waymo appears to be at the leading edge of the self-driving revolution. After more than a $1 billion of R&D, it’s weathered the loss of key founding team members, faces numerous competing programs at auto and tech companies and is pursuing a rancorous lawsuit with Uber. Yet Waymo’s approach to testing, deployment and strategic partnerships is unfazed and laser-focused on building a business.

Google began doing vehicle tests at the Castle in 2012 after it outgrow a parking lot near company headquarters in Mountain View. While the old base’s tarmac is a bit past its prime, Waymo created a variety of new streets, a roundabout, cul-de-sacs and a highway-like section, all ringed by solar-powered streetlights. A few of the old Air Force buildings and barracks left when the base was decommissioned in the 1990s have been repurposed for Waymo engineers, while others appear to be slowly deteriorating.

On the Castle’s streets careless workers unloading a moving van might unexpectedly drop boxes in the path of a vehicle; rude drivers veer into a Waymo minivan’s lane abruptly and without signaling; and cars backing out of driveways in a simulated residential neighbor pull out when least expected. None of these scenarios appear to trouble the robots at the wheel.

In April Waymo began an “Early Rider” program in Chandler, Arizona, where residents who applied for the program can hail one its self-driving Chrysler Pacifica Hybrid minivans to take them anywhere they request in the metro-Phoenix area.

Although technicians are in the front seats of those vehicles for added safety for now, Waymo technical chief Dmitri Dolgov told reporters this week the minivans already have Level 4 autonomous capability, meaning they can drive without a human at the wheel in most circumstances. “We’re testing everywhere, in downtown streets, on freeways, on all kinds of streets,” Dolgov said.

To show just how sophisticated Waymo’s system has become, it put reporters in the back of its vans for brief test rides around the 60-acre Castle complex with no human at the wheel. That’s not standard practice for any company developing autonomous vehicle technology. Notably, Waymo didn’t require any of the few dozen journalists in attendance to sign legal waivers before taking a ride.

During the 1.5-mile loop, technicians acting as pedestrians, riding bicycles or driving other cars crossed paths with autonomous Waymo minivans. In each case, none of these distractions proved to be a problem. It was as if a skilled invisible driver was at the wheel. Which is precisely Waymo’s goal.

Krafcik identified four applications for the technology that are “super obvious and likely first steps for us.”

The first is in a ridesharing service – that may or may not be under the Waymo brand. Second is for commercial delivery applications. “Things like trucking and logistics makes a lot of sense for a company like Waymo,” he said.

Waymo may also work with cities to provide “last-mile” services that help people get from their homes to a transit station, for example. Interestingly, supplying the technology for use in personal vehicles ranks only fourth in Waymo’s priorities.

“For sure we see this technology as having the potential to be transformative, to make a lot of really good change for the world.”