With Aid, Antelope Valley Rebuilds
After years of boom, bust and civil strife, the Antelope Valley is now on the path to economic development--with a lot of help from its friends.
The valley, which includes the high desert cities of Palmdale and Lancaster, received Enterprise Zone status from the state in 1997. That enabled local communities to offer tax breaks and other incentives from the state, Los Angeles County and the city-owned Los Angeles World Airports authority to attract companies.
The results so far are impressive. Drawn by the incentives and the area’s long aerospace history, SR Technics--a Swissair subsidiary--set up an aircraft repair operation in Palmdale a year ago. A mix of industry also has come. Manufacturers of truck- campers, circuit boards, sheet metal forms and other products have moved from the San Fernando Valley to build new factories.
And the companies have increased their employment rolls, partly because of tax credits that subsidize wages and partly because new, larger facilities have led to a rapid increase in business.
According to 2000 data, unemployment in the area is estimated at 5.2%, comparable with the rest of Los Angeles County. With a population of 331,150, the valley sends out nearly as many commuters to work elsewhere (56,000) as it employs locally (60,400).
The valley is not merely another bedroom community or economic development zone. Palmdale’s place in aerospace history and its future as the site of an airport make the area special. Los Angeles World Airports, or LAWA, has owned 17,000 acres of Palmdale since the 1960s.
The valley remains a prime site for the aerospace industry. Northrop’s B-1 and B-2 bombers were built in Palmdale. Lockheed Martin’s research center, the famed Skunk Works, is located there. Lockheed and Boeing are developing their entries in the Joint Strike Fighter competition in Palmdale, partly on land leased from LAWA.
Long term, LAWA wants to see an airport developed on 12,000 of its Palmdale acres. At present, it is trying to attract industries to set up operations on 5,000 of its acres, thereby building up the local economy so Caltrans will widen the Antelope Valley Freeway and Highway 138, which serve the valley.
Intervention by Gov. Gray Davis at the last minute snatched SR Technics away from Tucson, where the Swiss company was going to set up its U.S. base. The firm handles repair and maintenance of aircraft for many world airlines at its Zurich headquarters and at a site near Paris.
In Palmdale, it is overhauling DC-10 cargo jets for Federal Express, installing computerized flight deck controls that reduce the plane’s cockpit crew to two pilots.
“It really is building a new aircraft,” said Alex Kugler, chief executive of SR Technics America.
Today, his company employs 330 and is hiring 60 workers per month. SR Technics’ ultimate goal is to overhaul six aircraft at a time with a work force of about 4,000. The jobs pay $18 to $20 an hour, with benefits.
The promise of such jobs has attracted extraordinary support from the state, the county and local cities. Because SR Technics needed to work with fueled aircraft inside a huge hangar, California paid for installation of a special fire suppression system.
Tax credits pay as much as $4 an hour of employees’ pay. SR and other companies in the Antelope Valley get tax credits for equipment purchased from California suppliers.
All told, economic development officials say, state and local governments and LAWA have spent $80 million to $100 million to install SR Technics in Palmdale. The company has invested $8 million, Kugler said.
The valley, a remote locale with only 40,000 people as recently as 1980, has prospered and suffered on the fortunes of aerospace. In the 1980s boom, residents flocked there for affordable housing and good jobs.
But as the recession hit at the end of the 1980s, jobs were eliminated, mortgages foreclosed and housing abandoned. The Department of Housing and Urban Development took over some properties and moved in indigent tenants. Gang violence and urban strife became the norm.
Economic recovery since 1997 has alleviated urban tensions. But the valley today is characterized by a large work force of people coming off welfare and unskilled youths, said George Callas, president of Harvest Farms in Lancaster.
Callas bought out his family’s food service business in the early 1980s, prospered in the boom by serving aerospace companies but inherited bad debts when aerospace crashed.
Callas saved the business by finding new customers--state and county prisons and local schools. The company now ships more than $12 million worth of ready-to-serve meals and employs almost 100, with help from Enterprise Zone credits.
Like Harvest Farms, newcomers to the valley are growing. Lance Campers, the largest maker of nonmotorized truck campers in the country, came to Lancaster in 1997 from Pacoima. In its San Fernando Valley location, operations were strung out across seven plants, President Jack Cole recalled.
But in Lancaster the company has been able to build a modern 110,000-square-foot plant and handle a 60% increase in business. Lance now employs 430 workers, compared with 240 in Pacoima, and posts about $50 million a year in revenues.
Tax credits helped with employment and industrial revenue bonds helped with construction of Lance’s plant--and with the 8.5-acre expansion it is now launching, Cole said.
The tax credits attract the business but don’t become a permanent subsidy, Cole explained. “The credits are for five years,” he said, “declining in percentage of the wages every year.”
Senior Systems Technology, a manufacturer of circuit boards, has had a similar experience since moving to Palmdale from Chatsworth three years ago. “In Chatsworth we were in two 58,000-square-foot facilities, but here we have a 130,000-square-foot plant and we’ve doubled our business,” reported Steven Taylor, vice president and general counsel of the firm.
Senior Systems employs 138 workers. Initially, the firm was running six shuttle buses to ferry workers from homes in the San Fernando Valley. But now it runs only one shuttle because many workers have moved to affordable housing in the Antelope Valley or left the company.
The cities of Lancaster and Palmdale help incoming workers obtain mortgages, explained Stafford Parker, director of the Lancaster Redevelopment Agency.
The economic development offices of those cities are renowned for their persistence and “business friendliness.” Lancaster, for example, rerouted a street to accommodate Lance Campers.
Do the cities, county and state governments do too much? That question will be answered by whether the valley continues to develop jobs and affordable homes for its residents.
But the challenge to find jobs for a needy work force in a remote area calls for extraordinary measures. In recent years, the Antelope Valley has met that challenge. Other needy communities in Southern California might look for a few pointers.
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James Flanigan can be reached at jim.flanigan@latimes.com.
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Valley at a Glance
The Antelope Valley, the high desert location of Palmdale and Lancaster, wants to spur economic development so that its many commuters can work closer to home. Figures are for 2000.
* Population: 331,150 (Lancaster 132,400, Palmdale 122,400 plus other areas)
* Work force in valley: 60,400
* Unemployment rate in valley: 5.2%
* Commuters (estimate): 56,000
* Median home prices: Lancaster $96,250; Palmdale $115,000
Source: Los Angeles Economic Development Corp.
