By Faughn Economy • Manufacturing 0 Comments

The COVID-19 pandemic could be a ‘tipping point’ for the Central Valley’s growth, innovation

Despite the challenges the Central Valley has faced in the past few months, the coronavirus pandemic could prove a “tipping point” for the region in terms of innovation and growth, according to speakers at the annual State of the Valley event.

“In this pandemic crisis, I see a real opportunity for the North (San Joaquin) Valley,” said Mark Keppler, the executive director of the Maddy Institute, a local public policy organization. “If there’s some strategic thinking that’s going on … and then those plans are put into action, I think the next 25-50 years could be the time that the North Valley really emerges as a region.”

The event, co-presented by the Modesto Chamber of Commerce and Opportunity Stanislaus, was held Monday as a live webinar and featured presentations from Keppler and Dave White, the CEO of Opportunity Stanislaus. Trish Christensen, the chamber of commerce’s president and CEO, moderated the event.

Both Keppler and White expressed optimism at Stanislaus County’s ability to recover from the COVID-19 pandemic, which sent unemployment skyrocketing in March and April and left many without jobs. Coupled with large-scale shutdowns of many parts of the economy — from shelter-in-place orders in the spring to current restrictions on indoor dining and other activities — brought whole sectors of the economy to a standstill.

But six months in, the Central Valley is beginning to see signs of recovery, both Keppler and White said. Recent unemployment data for Stanislaus County clocked in at 10.9%, down from 13.6% in July and a high of 17% in April. Jobless numbers in the county are currently lower than state-level unemployment, which was 11.4% in August, down from 13.5% in July.

“We’ve done better than most of California,” White said. “The main reason for that is we don’t rely on tourism and transportation as much as other places in California.”

The Central Valley’s key industries are manufacturing, agriculture and other essential industries, which have remained open throughout the pandemic. Additionally, seasonal labor — from farm work to Census enumerators — has caused a spike in employment across the Valley, resulting in lower unemployment figures.

SMALL BUSINESSES STRUGGLE DESPITE SUPPORT

White spoke to the Valley’s relative success in terms of coronavirus recovery, aided in part by local business support programs, including grants and loans like the Paycheck Protection Program, which gave small business access to billions in federal money.

Now, with the PPP program complete, and businesses adapting to the “new normal” under COVID-19, White stressed the importance of following the statewide safety guidelines and tiered system that will eventually allow for more reopening across the county.

Still, White said, people should not expect a V-shaped recovery from the pandemic, due to a decreased participation in the economy and shutdowns still in place across many industries. People are still wary of returning to work, as well as shopping and dining, he said.

“They’re scared, and they’re not confident,” White said. “In order to establish that confidence, we have to see a decrease in the impact of the virus on our community…. The longer this goes, the more we’re going to see business failure.”

CHANGING SKILLS FOR A NEW ECONOMY

The pandemic has changed the ways many Americans live their daily lives, from telecommuting to relying on online retailers for much of their shopping. Keppler said he is predicting ensuing changes in the Valley as well, including an increased emphasis on logistics, coming from large retailers and delivery service companies like Amazon, UPS and FedEx.

White said he also expects “on-shoring” of manufacturing, moving plants from overseas back to the United States, and creating more job opportunities in those sectors, as well as expansion plans from more traditional corporations.

Amazon recently announced 2,600 new jobs in the Central Valley, as part of a nationwide hiring spree of 100,000 workers, ranging from warehouse staff to finance and HR positions in the individual buildings.

Manufacturing jobs coming to the Central Valley will require workers with skills like PLC coding, automation and robotics, White said, raising the requirements for applicants. He said he expects similar changes in fields like agricultural technology and logistics.

“We need to invest in coding and all these upper skills that will be required in this new economy,” he said.

Additionally, White said, Stanislaus County needs to attract these skilled workers from other areas in the state and around the country, offering a high quality of life at a comparatively lower price point.

ATTRACTING POTENTIAL BUYERS TO THE CENTRAL VALLEY

As teleworking has become a more permanent option for many companies, Keppler said it’s estimated that Americans have saved around $91 billion by working at home this year, and employers are eager to continue with the practice and eventually reduce their footprints in high-priced areas like Silicon Valley.

Keppler said not only will this reduce the commutes of many workers who regularly drive up to three hours from the Valley to the Bay Area, but also make areas like Stanislaus County more attractive to potential renters and buyers.

In a post-office landscape, Keppler stressed, the Valley needs to make itself competitive not only on a regional level, but “nationwide.” This means focusing on housing, attention to detail in urban planning and ensuring that cities like Modesto provide ample amenities — like parks, performing arts and a walkable downtown — to attract new residents.

White added that as the pandemic more heavily affects urban areas, like New York City, Los Angeles or San Francisco, a number of people may be looking to move out of larger cities and into smaller ones they deem safer, like Modesto or other places in Stanislaus County.

“There’s going to be demand for housing,” he said, “and we need to be ready for that.”

White said he foresees a sort of hybrid model, with increased work-from-home and the possibility of smaller, communal offices popping up in more affordable cities where the employees of large tech companies will be able to work a few days a week or month.

He said it’s crucial for the public and private sectors to work together and create solutions for these needs across the Valley, and make the region as lucrative as possible for both companies and workers.

“The potential here is unbelievable,” Keppler said. “There has to be civic pride, and a sense of, ‘You know what, we can do this!’”

https://www.modbee.com/article245901805.html

By Faughn Education • Hi-Tech • Manufacturing • New Developments • New Location 0 Comments

Setton Academy for Industrial Robotics and Technology coming in 2021

Setton Farms has announced it will build a school in Terra Bella that will focus on industrial robotics and technology. The new school will be called Setton Academy.

In 2019, Setton Pistachio established a 501c(3) non-profit to develop and operate an industrial technology school. After a lengthy permitting process, the school was approved, and construction on Setton Academy began in summer 2020. DAYCO Construction and Industrial Design and Construction (IDC) are assisting with construction and materials. The school will be equipped with robotic and computer vision cells, as well as software development workstations for a hands-on laboratory experience.

“The school is a 501c(3),” said Setton Farms General Manager Lee Cohen “It’s an educational foundation that the family has set up to provide modern educational instruction in advanced industrial electronics and industrial robotics. We think that it’s a very effective way to change the trajectory of kids’ lives locally in Terra Bella.

“We are targeting students that are 18 to 23 year old high school graduates who we hope to basically give the requisite skills to change the trajectory of their lives to go into a pathway of industrial automation, which in today’s job market is very, very lucrative, high paying and very much in demand. The goal is really to go after the local kids who really wouldn’t have an opportunity like this.”

Once up and running, the Setton Academy will provide short certificate style courses that allow students to advance their education in industrial electronics, robotics and computer vision. The hands-on, module-based curriculum will be designed to focus on industrial automation control, robotics, computer vision and CAD design, and will allow students to learn at their own pace. The curriculum will cover subjects that match skills required in the broad industries throughout the Valley. All of the modules will be taught by industry professionals in a variety of methods ranging from live, hands-on instruction, to step-by-step videos and other interactive media modes.

“The school is going to be very modest and small,” said Cohen. “We’re going to try to take less than 30 students a year. If we can change the lives of 10, 20, 30 kids a year, over 10 years we’ll really have made a big difference in Terra Bella, and I think that’s the goal. The non-profit is going to be focused on providing access to these kids, providing very simplified and well designed curriculum, so that we can really utilize the state of the art of modern industrial robotics and technology, which really now is very accessible to these kids, because everyone of these kids probably has a smartphone and knows how software works, and I think the modern state of industrial automation is more accessible to them these days because of that.”

The goal of Setton Academy is its graduates acquire the necessary industrial technology and robotics skills to bring immediate value and productivity for employers who utilize production automation. If the school can achieve its goals, it could potentially change the pathway of its graduates’ lives from a minimum-wage, low-skill trajectory into a highly paid, high-skill, high-growth job trajectory.

“I think across the Valley, certainly in Agriculture, there’s of course ways of automation due to the difficult operating environment and higher costs across every aspect,” said Cohen. “I think nationally we will resort to automation to offset those costs in the long run, and I believe that, probably at this point in time, there aren’t enough educational institutions that are focusing on the people who will be operating, managing, interacting and designing this wave of automation that will be progressing through the Valley. I think it’s very within reach of all of these kids, absolutely. We just have to put together the right curriculum, the right delivery, the right program. So what we’re doing is bringing the education locally in town. They can walk to us. That’s the objective; this local education delivering really very market focused principles of education.”

Future goals for Setton Academy include developing a network of hiring companies that will source automation operators directly from the school.

“We are encouraging the community to get involved,” said Cohen. “We are looking for community members who can sit on a committee or some kind of advisory council. We want the community completely involved in this.”

The school is aiming to be completed by the summer of 2021.

https://www.recorderonline.com/news/setton-academy-coming-in-2021/article_bf4b6b5a-ff48-11ea-8a87-4f3360aea47c.html?utm_medium=social&utm_source=email&utm_campaign=user-share

 

By Faughn Distribution • E-Commerce • Manufacturing • New Developments 0 Comments

UPS & Amazon offer huge boost to Visalia Industrial Park

-September 9,2020-

After 2 years of construction activity United Parcel Service (UPS) plans to open their new 450,000sf distribution hub on Plaza at Riggin in the Visalia Industrial Park early next month. UPS spokesperson Kim Krebs says when it opens the “new Visalia package sortation and distribution center will create more than 625 new full-and part-time well-paying jobs.”

Contractors are packing up now after erecting the 88 acre complex that includes several outbuildings, a truck maintenance facility, fuel center, customer service center and entrance station besides the main tilt-up concrete building with its advanced package sorting conveyor system. UPS bought the land in summer of 2017 from CapRock Partners adding 30 acres last fall from the same party. But wait,as they say ..there’s more.

Right next door to UPS there is some surprise news from another mega-shipper. Amazon is the unnamed mystery logistics center that is now under construction with a 1.3 million square ft distribution center of their own – one of their “fulfillment centers” that typically employ 1000 or more. Amazon has not announced the Visalia project but the contractor on the job Gray Construction based in Kentucky is an Amazon contractor and at the job site today.The company secured the city building permit.

Blake Steel with Gray Construction says this will be the third Amazon center he has worked on and says they will be complete in 11 months. Some 300 construction workers will be needed during the busiest months of the Visalia project.

A typical scenario played out in Fresno with the distribution center built and open in less than a year. In Fresno’s case “During peak times, the fulfillment center ships over 1 million packages per day and has created over 3,500 jobs within the immediate area” says a report. If Fresno has one, Bakersfield too now has seen completion of a 4-story Amazon complex near their airport, expected to open September 6,according to the Bakersfield Californian.

The new general manager told the press there “This is one of the most advanced buildings that Amazon has,” he said, adding that the building — four stories, each about the size of 11 football fields — is the company’s 26th “fulfillment center” in California.” Make that the 27th – counting Visalia. Like UPS, Amazon is not just hiring robots to do the work. Amazon has more than 110 active fulfillment centers in the US and more than 185 centers globally. Now we are on the map

Property owner Newport-based CapRock Partners has been working on this 1.3 million “spec building” for over a year and just received City of Visalia approval to begin construction with grading of the empty site starting last week. Electric power to the site for construction is being added this week to the new address- 3315 N Kelsey.The building has a million sf at ground level and a 300,000sf mezzanine.

CapRocks’ President Patrick Daniels said he could not comment who the tenant was for the big building, what will be by far Visalia’s largest – almost 10 Costcos for comparison. Daniels has been working on their 640 acre industrial park – they call it the Visalia Logistics Center – since 2006 when he first visited Visalia drawn by developer Richard Allen and his successful effort to bring in VF Corp to Visalia in 2005. VF, a major local employer, is another big UPS customer who came to town because UPS ships by ground from Visalia to most of California in less time than almost all other competitive locations. Scores of other firms have suggested that is why, they too, chose Visalia.

With the coming of these two new shippers, the City of Visalia already is planning to widen Riggin from Plaza to Shirk in coming months as well as punching Kelsey north that will allow Amazon street access.The Riggin and Kelsey intersection will now be signaled. Riggin is already busy with truck traffic with the new connection to Highway 99 ( Betty Drive Interchange) that fully opened in the past year.

As for jobs at Amazon the Bakersfield location is a close model, offering warehousing jobs paying $15 to start, the company says, and full-time employees immediately qualify for comprehensive health benefits as well as a 401(k) program with a 50 percent company match. Amazon also offers to pay 95 percent of tuition for college courses in in-demand fields, regardless of whether that education relates to their current job with Amazon.

Amazon.com also said last week it received federal approval to establish a fleet of drones and will begin limited tests of package deliveries to customers in the U.S., although a number of key steps remain before widespread use of the technology will be allowed. Besides drones, both UPS and Amazon promises a green fleet of delivery vehicles based in the Visalia Industrial Park.

What will be the impact on government of a new Amazon logistic center here? A summary of Amazon’s 2019 U.S. taxes they reported includes:

•Over $1 billion in federal income tax expense.
•More than $2.4 billion in other federal taxes, including payroll taxes and customs duties.
•More than $1.6 billion in state and local taxes, including payroll taxes, property taxes, state income taxes, and gross receipts taxes.
•Last year alone, Amazon collected and remitted nearly $9 billion in sales and use taxes to states and localities throughout the U.S. The recent enactment of “marketplace laws” by 40 states allows Amazon to legally collect state and local sales and use taxes on behalf of third-party sellers who sell their goods on their platform.

If Amazon is the golden boy company, UPS and their stock has been on a tear recently as well, propelled by a surge in e-commerce activity this year as a result of COVID. UPS stock has doubled since May.

UPS is developing more so-called super-hubs across the US handling more shipments using highly automated technology.The trend is continuing as demand for same-day service accelerates fueled by more internet shopping and door-to-door delivery. The company is gearing up for the holiday shipping season 2020 in Visalia a year earlier than Amazon will do here – for the holiday season of 2021. With all those internet orders a recent analysis expects that e-commerce will require more than 3x the logistics space of brick-and-mortar sales, according to 2019 data.

Global e-commerce sales are projected to more than double to $6.5 trillion by 2023, according to Statista. The Boston Consulting Group estimates U.S. e-commerce sales will double too, to $1 trillion, growing at six times the rate of all retail transactions.

Those projections came before the coronavirus pandemic, which has prompted an explosion in online shopping by people avoiding brick-and-mortar stores because of stay-home orders or fear of being infected by the virus. Best Buy recently reported that e-commerce sales grew 242% from the year-ago quarter and now represent 53% of total sales. VF Corp recently posted e-commerce earnings enjoying a surge as well.

The side-by-side locations of UPS and Amazon in Visalia may encourage a mutual feeding frenzy in our future. Amazon is UPS’ largest customer, accounting for almost 12% of UPS’ $74 billion in revenue last year. Besides taxes, payroll and the job impacts of the double powerhouses of UPS and Amazon, the developments will clearly draw more companies to Visalia say officials. Already 5 more spec buildings are nearing completion within a country block of the two centers.

CapRock itself has 300 more acres just to the north of the Amazon/UPS sites and Fresno developer John Brelsford ,who already has a dozen tenant-filled big buildings in the industrial park, has 150 acres at the NWC of Plaza and Riggin. CapRock too has plans to build another 500,000sf spec building just north of Amazon.

The coming of all this new industry along the city’s northern edge is going to further juice homebuilding in this area and spur other development along Riggin that now ties to Hwy 99 – a continuous 4-lane artery.To the west of Plaza, Brelsford plans several million square feet of new industrial space and sources say Tevelde has long range plans to annex land not yet in the city north of Riggin,plenty more land almost to Hwy 99.

http://sierra2thesea.net/central-valley/double-double-combo-in-visalia

By Faughn Manufacturing 0 Comments

Overton Moore Properties Buys 118,056 SF Industrial Building in Lathrop, California

LATHROP, CALIF. — Overton Moore Properties, in a joint venture with Invesco Real Estate, has acquired a single-tenant industrial facility located at 18231 Murphy Parkway in Lathrop. Terms of the transaction were not released.

Situated on 11 acres, the 118,056-square-foot property is fully leased to Simwon America Corp., a Tier 1 supplier of Tesla. The buyer plans to expand the current building by approximately 80,000 square feet for Simwon’s growing manufacturing demands. Mike Goldstein and Ryan McShane of Colliers International, Stockton/Central Valley office, represented the buyer and undisclosed seller in the deal.

https://rebusinessonline.com/overton-moore-properties-buys-118056-sf-industrial-building-in-lathrop-california/?oly_enc_id=0462I5076934B9U

By Faughn Food Processing • Manufacturing 0 Comments

Blue Diamond Completes Turlock Expansion

ANGELINA MARTIN
May 12, 2020

Less than 15 months after breaking ground on the project, Blue Diamond Growers recently announced the expansion of its Turlock manufacturing plant is complete. The 52,000 square foot addition to the existing 200,000 square foot facility in town is one of two major expansions for Blue Diamond, a nonprofit grower-owned cooperative and the world’s leading processor and marketer of almonds. The other, in Salida, will be completed in May. The new Turlock expansion increases Blue Diamond’s value-added almond processing capabilities with an automated factory that features state-of-the-art handling, processing and packaging equipment and also provides space for a future manufacturing line to support both current business or new innovations.

The completion of the expansion comes as Blue Diamond celebrates its 110th anniversary and just seven years after its Turlock facility opened. Since 2013, Turlock’s Blue Diamond facility has received a number of accolades, including Food Engineering Magazine’s title of the 2014 Plant of the Year, as well as being named to Boston Consulting Group’s list of the fastest-growing midsize companies in the nation. The company is no stranger to building facilities quickly — Blue Diamond was able to move from groundbreaking to startup for the original plant in just 13 months. At the expansion’s groundbreaking ceremony in January 2019, Blue Diamond President and CEO Mark Jansen said they hoped to get the additional space built quickly due to the company’s rapid growth. Just over a year later, that goal was accomplished.

The new facility will be used specifically to create an integrated almond beverage base line, where, for the first time, everything needed for the product will be manufactured in the same facility. The base for Blue Diamond’s beverage line, Almond Breeze, will be created at the Turlock expansion through a process of blanching, splitting, roasting and grinding the almonds into a buttery paste, which will then be shipped all over the world to be mixed with water and sold as almond milk. Blue Diamond’s Almond Breeze production has experienced double digit growth over the last 20 years. In 2018, the brand grew by 14 percent. The original Turlock Blue Diamond facility is already processing about 25 percent more almonds than the company originally thought possible for the plant’s capacity after the company recently added an almond flour line to the mix.

The expansion comes as phase two in a three-phase, 15-year project that began when Blue Diamond purchased 88 acres at the intersection of North Washington and Fulkerth Road in late 2011. Since then, companies like Hilmar Cheese and Valley Milk have made their way into the Turlock Regional Industrial Park, while already-established facilities like United States Cold Storage and Sunnyside Farms are also currently in expansion mode. The second expansion in Salida is the new Bulk 8 Warehouse at the Salida facility that originally opened as an almond receiving station in 1969. Today the 675,000 square foot facility sits on 44 acres and includes a retail nut and gift shop. The new 58,000 square foot bulk storage facility is on schedule to be completed by the end of May, providing an additional 50 million pounds of in-house bulk almond storage capacity in time to receive the 2020 almond harvest. The 65-foot-tall building includes advanced design with an automated gravity fed spiral conveyance system that improves grower delivery efficiency and reduces damage to the almonds. “It is particularly meaningful for Blue Diamond to be able to commemorate our Founders Day today by not only recognizing our humble beginnings 110 years ago, but also celebrating two key growth milestones that help secure our future,” Jansen said. “I couldn’t be more proud that, despite the unprecedented challenges businesses around the world have faced over the past two months, our incredible team has been able to sustain operations as an essential food supplier, while completing these critical expansion projects ahead of schedule to meet customer needs.”

To celebrate the expansions and give back during the coronavirus pandemic, Blue Diamond, along with partners Union Pacific and Sun-Maid Growers of California, committed to a donation match of $50,000 to help support three food banks in northern and central California that are struggling to meet significant demand from local families in need.

https://www.turlockjournal.com/news/local/blue-diamond-completes-turlock-expansion/

By Faughn E-Commerce • Manufacturing 0 Comments

Supply Chain Breaks Put New Spotlight on Central Valley’s Potential

Supply chains being spread thin or broken entirely by the coronavirus pandemic have brought new scrutiny to inland California’s industrial market. Along with other inland hub markets like the Inland Empire and the Pennsylvania I-78/81 corridor, the Central Valley may benefit from a surge in business inventories and re-shoring spurred by companies’ reactions to the coronavirus, CBRE concluded in a recent report. Courtesy of CBRE Eastgate Business Park in Tracy, Calif. As more manufacturers, wholesalers and retailers opt to store materials and inventories closer to consumers, space for all those goods is in high demand.

Suppliers will likely gravitate toward inland markets as opposed to space-limited and expensive seaport-adjacent markets, according to CBRE, which also points to e-commerce’s continued growth as another likely boon for the sector. “It’s really securitization of the supply chain and avoiding supply chain disruption,” said CBRE Executive Vice President Thomas Davis, who leads the company’s Central Valley Industrial Practice group.  “It has performed very well, and we expect it to perform very well going forward,” Davis said of the Central Valley’s industrial CRE market. In its report, CBRE said the pandemic has highlighted how quickly issues can arise with just-in-time production networks, reversing a decades-long downward trend in inventory-to-sales ratios. Such a reversal could cause industrial demand to surge in inland hub markets, CBRE Research said, projecting a 5% increase in business inventories that require 400M to 500M more SF of warehouse space.

Last month, Colliers International Senior Vice President Gregory Healy, an expert in location strategy and supply chains, said he expects a push for supply chain resilience to result in demands for 750M SF to 1B SF of industrial space in the U.S. alone. Central Valley industrial CRE is likely moving forward from an already strong starting point. As in Southern California’s industrial markets, the region has continued to see deal flow despite the pandemic, Lee & Associates Senior Vice President and Central Valley industrial broker Jim Martin said.  Leasing and investment sales have stayed on track, according to Martin, who said he thinks there will probably be an increase in warehouse and distribution in the region as companies look to increase inventories. “The Central Valley will continue to see migration/expansion from the Bay Area given the availability of land, labor and transportation,” Martin said in an email. Martin, who just worked with Nearon Enterprises on acquiring the 155K SF Eastgate Business Park in Tracy, California, said deals like that one represent a telling commitment to the Central Valley. That industrial purchase was Nearon’s first in the Central Valley, according to Martin, though Nearon didn’t immediately respond to a request for confirmation.

https://www.bisnow.com/san-jose/news/industrial/californias-sprawling-central-valley-poised-for-industrial-boom-from-new-supply-chain-needs-104763

By Faughn Education • Health/Medical • Manufacturing • Top Stories 0 Comments

Fresno State engineering students help make protective gear for health workers

Engineering students, faculty and alumni from Fresno State’s Lyles College of Engineering have been working up to 10 hours a day in recent weeks to design and produce personal protective equipment (PPE) for Central Valley health care workers. They plan to donate about 1,000 face shields to Community Regional Medical Center in downtown Fresno. Last week during Fresno State’s spring break, the team completed the final design and began production of the face shields — the first part of a three-phase, innovative project to support the community at a time when protective equipment is scarce for doctors, nurses and other health care providers.

https://files.constantcontact.com/2cb20f61601/682ecac7-bbb8-4d8e-80e1-8808a64214e8.pdf

By Faughn Economy • Education • Manufacturing 0 Comments

VALLEY VENTURES COMPANY RAISES $6M IN NEW FUNDING

https://thebusinessjournal.com/valley-ventures-company-raises-6m-in-new-funding/?utm_source=Daily+Update&utm_campaign=7345966575-EMAIL_CAMPAIGN_2020_03_11_08_04&utm_medium=email&utm_term=0_fb834d017b-7345966575-78934409&mc_cid=7345966575&mc_eid=a126ded657

By Faughn Economy • Logistics • Manufacturing 0 Comments

Madera County named one of the fastest growing communities in the West

A recent study by the U.S. Department of Commerce Bureau of Economic analysis showed Madera County saw the fastest growth in the West in a medium-sized community with a 6.6% increase for its gross domestic product, which is the value of goods and services produced within the county. The study highlighted growth areas in agriculture and forestry, especially in the mountains where trees have died.