North Orange County Staging a Revival
North Orange County, slammed by the area’s deep recession earlier in the decade, is staging a comeback, thanks to a mix of cardboard, plastics and zipper manufacturers and high-tech companies that have risen from the ashes of the aerospace meltdown.
Upstaged in recent years by the newer, faster-growing communities in South County and glitzy developments such as the Irvine Spectrum, the north’s revival is easy to miss but vitally important to the county’s economy.
The area, best known as the home of Disneyland, also is a highly diverse manufacturing and distribution center with critical links to Pacific Rim trade. If South County is the region’s Silicon Valley, then North County is its Midwestern industrial heartland.
Driving along the industrial back streets of Buena Park, Gustavo Duran, the city’s economic development project manager, points to trucks lined up along curbs, parking lots filled with employees’ cars, and stacks of boxes waiting to be loaded.
“You didn’t used to see the yards full of inventory,” he said. “The demand wasn’t there. Now they’re full of inventory waiting to be shipped out.”
A few years ago, companies were closing their doors and buildings sat vacant. Now, plants and offices don’t sit empty for long.
In Buena Park, Fullerton and La Habra, for instance, the industrial vacancy rate is less than 5%, said Al Gobar, a Placentia-based real estate consultant.
Several large industrial buildings that have come on the market recently are completely leased. For instance, the 1.2-million-square-foot North County Distribution Center, which opened about a year ago in Anaheim, is filled with distributors of everything from vegetables to cables.
“That’s pretty reassuring, particularly after what we’ve been through the past seven years,” Gobar said. “It suggests that employment is coming back.”
Indeed, the unemployment rates in North County cities such as Anaheim, Brea, Buena Park, Fullerton and La Habra are 3% to 4%--right in line with the entire county’s low jobless rate.
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Firms like Ultra Wheel now form the backbone of the North County’s economy.
The company, which makes cast aluminum auto wheels, could have moved to Arizona when it wanted to relocate from its old digs in Garden Grove four years ago. Instead, it chose a 250,000-square-foot Buena Park building that had been abandoned by Security Pacific National Bank after it was swallowed by Bank of America.
The company now has 250 employees and does all its manufacturing on site. It recently bought a new plating machine--a $4-million investment--allowing it to chrome plate its wheels instead of farming out the work. “We fully anticipate continuing to grow,” said Jim Kavanagh, the firm’s marketing manager.
Some other firms that barely survived the bad times say that business is finally looking up.
Wire Cut Co. in Buena Park almost didn’t make it. Started in 1978, the company grew to 32 employees using a high-tech electrical process to cut metal parts for big aerospace concerns, including General Electric, Hughes Aircraft and Rocketdyne.
When the aerospace crunch hit, President Milton Thomas had to mortgage his house and reduce employment to 18 to keep the firm solvent.
Then he got the idea to diversify into making surgical tools and tooling for computer components manufacturers. Wire Cut is now back to 32 employees, and Thomas plans to hire another five by February. “We’ve totally regained all the ground we lost,” he said.
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To be sure, North County still has a way to go.
Thousands of jobs were lost in the region during the recession, and the bleeding might not be over.
There are 2,500 workers left at Hughes Electronics’ 350-acre campus in Fullerton, down from 15,000 during its heyday. The plant has been for sale for some time. It will soon have a new owner, Raytheon Corp., which is acquiring Hughes’ defense units, and the future of the operation is uncertain.
Kay Miller, the city’s economic development manager, worries that the site will be tough to market because the buildings are not contemporary and the complex is not close to a freeway. “It’s not really a space that somebody would embrace in today’s business world,” she said.
Boeing Co.’s guidance and navigation and communications units in Anaheim--acquired from Rockwell International--currently have about 3,000 workers. That’s less than half the employment level in the early 1990s--although the company says it’s now actively hiring.
Hunt-Wesson Inc. recently closed its historic Hunt Foods tomato processing plant in Fullerton, laying off 325 workers. Kraft Foods closed its Buena Park marshmallow plant and laid off 355 workers about two years ago.
Scores of smaller operations have also closed, like Wyeth Ayerst Laboratories, a distributor of pharmaceutical products that moved its Buena Park facility with 56 employees to Las Vegas in 1995.
“There is still an underlying current of caution,” said Eric Bloom, chief operating officer at Sunclipse Inc.
Sunclipse makes cardboard, assembles boxes and distributes the finished boxes and other goods from plants in Buena Park and Fullerton, where it has a total of 675 employees. Its customers are companies that make things, from furniture to bicycles.
Business has been growing at a moderate pace, possibly because of pent-up demand for goods after the recession, Bloom said. “But I think people are not certain that the good economic times that we see are going to stay here.”
Indeed, the concern about North County’s job losses still runs deep. On Thursday, a group of local business people will assemble at Cal State Fullerton to discuss ways to encourage new job formation in the region--in particular, the kinds of high-paying jobs that the aerospace industry once generated.
“There is a kind of quiet strength in North Orange County,” said Placentia-based economic development consultant Wayne D. Wedin, a member of the new North County Job Development Council. “I think that comes with longevity.”
But, he warned, without efforts to revitalize older areas, “a bit of cancer sets in.”
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Some observers believe North County is now at a critical juncture not unlike its earlier transformation from agriculture to industry.
A naturally fertile and relatively frost-free area, North County was settled more than 100 years ago by avocado, citrus, walnut and barley growers. By the turn of the century, irrigation had started, and oil drilling was underway, spreading wealth from La Habra to Huntington Beach.
Then came the Great Depression, and the region was devastated. But after World War II, a new era began--the aerospace boom. Huge factories were erected, and fields that had grown tired from decades of planting were given over to housing tracts.
Now, many believe the small and medium-sized businesses, as well as the back-office and distribution operations of international concerns, hold the key to the area’s future.
During the recession, “We lost thousands of jobs with the defense industry, lost millions of dollars of property taxes. We lost our strength to do redevelopment and attract new business,” said Gay Forbes, Anaheim’s economic development manager.
“What we’re seeing now is smaller firms--50 to hundreds of employees--in engineering and high tech, branching out and diversifying and learning how to live in a new world.”
One of North County’s biggest drawbacks, some observers say, is the lack of raw land. There is no Irvine Co. or Mission Viejo Co. to plan sparkling new office, industrial and housing developments.
“If you look at North County, the land available is very limited,” said Esmael Adibi, director of Chapman University’s Anderson Center for Economic Research.
Still, some former aerospace buildings that have been rehabbed are coming back into use.
In Anaheim, for instance, an old Rockwell building that was once used for storing classified documents is now home to Westcoast Performance Products USA Inc.
The firm was started in the garage of Bob Zantos, a former college machine-shop teacher. In the late 1970s, Zantos was asked by a friend to retrofit a jet ski to make it go faster. Zantos complied and soon had a growing business.
Westcoast Performance now has about 130 employees, and its products are sold by Kawasaki, Yamaha and Sea-Do dealers. The company has expanded into exhaust systems and automotive components, and is trying to break into commercial aircraft components. Zantos also is marketing a video surveillance system tied to a computer that can be used on public transit systems.
Now that the economy is healthy and businesses across the country are expanding, North County’s age could work in its favor by providing fast-growing manufacturers with existing buildings that can be retrofitted quickly, said Gary Miller, senior vice president for marketing at the Orange County Business Council.
“There would be faster growth in South County, that’s undeniable,” said economist Adibi. But as the county’s economy continues to improve, he said, “North County could still come along for the ride.”
