Lancaster’s Post-Aerospace Identity Has Liftoff
On the surface it was just another ribbon-cutting, as politicians and Rite Aid executives hailed the official opening of the drugstore chain’s 1-million-square-foot warehouse and distribution center here two months ago.
But to Lancaster officials--whose aggressive economic development efforts failed to pull the city out of the doldrums in the latter part of the 1990s, when most of Los Angeles County was enjoying economic recovery--it was much more.
Rite Aid, which has hired 800 people for the new facility, arrived on the heels of a distribution center for Michaels, a major arts and crafts retail merchandiser. The Michaels distribution facility brought 350 jobs to this part of the desert.
“When those two companies decided to relocate here, it was a signal that the area could diversify from its aerospace base,” said David Myers, an executive with the Greater Antelope Valley Economic Alliance. “We started to see light at the end of the tunnel.”
After experiencing a severe and prolonged recession throughout most of the 1990s, Lancaster finally appears to be reaping the benefits of abundant and cheap land, a trained and available work force, and its ardently pro-business stance.
Rite Aid and Michaels were the crown jewels in a string of successes for a city whose fortunes once depended on the vagaries of the aerospace defense industry. Check-printing giant Deluxe Corp. relocated from Chatsworth and now employs 400 in Lancaster. Lance Camper, a leading manufacturer of pickup campers, brought 430 jobs. Recreational vehicle manufacturer Rexhall Industries Inc. created another 400.
Starwood Hotels and Resorts Worldwide Inc., which owns and operates 725 hotels in 80 countries, opened a 17,000-square-foot customer service center in October. Pacoima-based sheet metal manufacturer Robert F. Chapman is scheduled to move into its new 62,000-square-foot building next month.
It’s a far cry from the depths of the recession. Lancaster was hit as hard as anyone by the one-two punch of aerospace cutbacks and the sharp dip in home values, which occurred just after most of the area’s inventory had been built and sold.
“You had a lot of hard-working, middle-class families in old-economy jobs who had stretched to buy their houses,” Myers said. “From about 1993 to about 1998, it was really tough going.”
The recession sent a resounding message to economic planners that a region built on aerospace had to broaden its industrial base.
“This community has been so oriented toward aerospace defense,” said Howard Brooks, executive director of the Antelope Valley Board of Trade. “So what happens is the B-2 gears up, hires 6,000 or 7,000 people, and then they build 21 B-2’s instead of 100, and all of a sudden everybody’s out of work. That’s been the cycle here--up and down, up and down.”
Even after the consolidation and cutbacks of the 1990s, the Antelope Valley employs more than 20,000 aerospace workers. And, to be sure, Lancaster officials are not displeased with the recent announcement that Swiss aircraft firm SR Technics will place an aircraft maintenance facility in neighboring Palmdale, bringing an estimated 6,000 non-defense-related aerospace jobs to the region in the next five years.
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“Our backbone is, and will continue to be, aerospace,” said Vern Lawson, marketing and economic manager for the Lancaster Redevelopment Agency. “But we’re never content to rely on aerospace. Our job is to diversify the economy.”
To that end, the city has focused its efforts on two major developments.
The Fox Field Industrial Corridor, which landed Rite Aid and Michaels, is a 5,000-acre, master-planned area located just off the Antelope Valley Freeway, adjacent to the L.A. County-owned Fox Field Airport.
Anticipating the shortage of industrial space in the county, Lancaster designed the Fox Field development specifically for businesses looking for large lots.
The Lancaster Business Park was designed as a campus-like environment for local move-up companies. After experiencing economic difficulties during the recession, the 240-acre subdivision is now virtually sold out, with its 80 tenants employing 2,200 workers.
A third development, the North Valley Industrial Center, is home to a variety of heavy industrial uses where companies can access rail service.
Lawson figures Lancaster’s new industrial jobs, by bringing additional payroll into the economy, will have a multiplying effect, creating new service-sector jobs.
Lancaster has lagged behind Palmdale in attracting retail outlets, primarily because of location: Lancaster commuters drive through Palmdale to get to Los Angeles and back, making Lancaster’s southern neighbor a more attractive retail venue.
But Lancaster has expanded its entertainment base. The Wayne Gretzky Roller Hockey Center opened last year, as did Cinemark Lancaster, a 22-screen, stadium-seating movie theater complex.
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Those two developments are located near “the Hangar,” the stadium that has been home to the city’s popular Class A minor league JetHawks baseball team since 1996.
The area, previously the site of a factory outlet center that had gone through severe economic hardship, is now a thriving entertainment district known as Front Row Center.
Lancaster’s recent success in attracting new industries is attributed in part to its proactive, aggressively pro-business stance.
“They worked with us in partnership and took down a lot of barriers,” said Michael English, director of regional reservation centers for Starwood. “We visited 10 communities, and the receptions we got ranged from people who didn’t pick up their heads from their desk to communities that rolled out the red carpet. Lancaster was at that end of the spectrum.”
For Rite Aid, proximity to its base of stores in San Diego, Los Angeles and in other Western states was a major factor in the company’s decision to locate its warehouse and distribution center in Lancaster. But it wasn’t the only factor, according to Roger Lekberg, senior vice president of distribution.
“Lancaster wanted us badly, and it showed,” Lekberg said. “They went above and beyond in answering any of our questions, gathering data and offering incentives.”
Rite Aid was enticed by incentives totaling several million dollars on property, land, state training funds and tax credits resulting from the area’s status as an enterprise zone.
As a way of gaining a competitive edge over other cities, Lancaster has also gone to great lengths to facilitate the entitlement process so that the time from when a company moves in until it becomes fully operational is minimized.
“Lancaster has really thought about what it can do to keep the cost of doing business in its city down,” said Lee Harrington, president of the L.A. County Economic Development Corp.
While its cost structure and aggressive outreach to companies certainly helps, Lancaster has two natural advantages it can play up in its efforts to attract new business.
At a time when the Los Angeles Basin is running short on industrial space, perhaps the biggest selling point for Lancaster is that it has plenty of land. Seventy percent of the 100 square miles within the city limits is undeveloped, according to the Greater Antelope Valley Economic Alliance.
“A lot of businesses are looking to expand in Los Angeles, but there’s no place for them to do it,” said Steve Malicott, president and chief executive of the Lancaster Chamber of Commerce. “Here they can get land and still have easy accessibility to the entire basin.”
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Malicott believes the Antelope Valley will become more appealing to expanding companies as new transportation options are developed. A Metrolink station opened, ahead of schedule, after the 1994 Northridge earthquake. Now, local officials are making a long-range push to bring high-speed rail to the area. A regional airport expansion is also being explored.
Along with affordable and available land, Lancaster offers relocating businesses the advantage of an attractive, available labor force.
“A lot of people don’t recognize that if you’re looking for advanced aeronautics capability, that area is probably the best in the United States to locate in,” said Jack Kyser, chief economist for the L.A. County Economic Development Corp.
It’s not only aerospace companies that benefit. In addition, it is assumed that many of the estimated 50,000 people who commute from the area to jobs in the Los Angeles Basin would trade that drive for the opportunity to work close to home. “We have found that industry is looking for an abundant and affordable labor force,” Lawson said. “And every time we bring a new company into town, we’re taking people off the freeway.”
Lekberg said Rite Aid has had no problem finding qualified applicants. Job fairs held at the Lancaster location have resulted in thousands of applications, he said.
For a city with so much to offer, though, Lancaster isn’t always easy to sell to Los Angeles-area businesses.
“There are companies that make their decisions based on location, and it’s sometimes difficult when they perceive you to be way out in the desert,” Myers said.
Lancaster may be 75 miles from downtown Los Angeles, but Myers points out that the area’s lighter freeway traffic makes the drive similar in length to commutes from Inland Empire cities into the basin--comparable, even, to the time it takes to go from the Westside to downtown during rush hour.
But, he concedes, “The San Gabriel Mountains create a very visible, tangible barrier, which separates the Antelope Valley from the rest of the L.A. Basin.”
Perhaps due to this out-of-sight, out-of-mind psychology, expanding L.A.-area businesses have tended to look toward the Inland Empire in the past, often never considering that the Antelope Valley offers the same attributes, Harrington said.
He expects that to change.
“When a Rite Aid comes in,” he said, “it causes people to stop and find out what’s going on.”
Still, overcoming long-held perceptions can be difficult for a city, particularly when it operates from a remote location that many Angelenos never pass through.
“We constantly hear people say, ‘I used to go up there to shoot rabbits,’ ” Brooks said. “Well, Lancaster is no longer a little town where you go to shoot rabbits. It’s a major metropolitan area, and because of the affordable housing and land, it’s growing very rapidly.”
