Home / Archive / San Joaquin County: Seeding the Strategy
Thursday, May 17, 2012
Regional Focus: March 2008
Seeding the Strategy
Shaking its ag image for a balanced economy
Story by Samantha Bronson
From his backyard, Bob Kavanaugh can see the economic progress San Joaquin County is making. From there, he can observe the activity at Rough and Ready Island — part of the Port of Stockton. On a recent day, this activity included windmill parts being loaded from a ship and onto railcars destined for Kansas.
“What Kansas is going to do with all these windmill parts, I don’t know,” Kavanaugh says. “But, boy I’ll tell you, there’s a lot of them.”
As a commissioner of the Port of Stockton and chairman of the San Joaquin Partnership, Kavanaugh understands the impact such details can have on the local economy. And as a businessman — the former CEO of Stockton Savings Bank and a current director of its successor, Guaranty Bank — he knows the importance of a sound strategic plan for economic development.
Kavanaugh is part of a group of local leaders working to change the perception — and corresponding reality — that San Joaquin is just a bedroom community for the Bay Area with an agricultural economy.
The San Joaquin Partnership, a nonprofit economic development group, is implementing a strategic plan that leaders hope will create new job opportunities for residents, improve the business climate for companies and enhance the county’s overall quality of life. This countywide emphasis represents a step forward in San Joaquin’s economic future — it’s the first time such a diverse group has come together to work toward economic development.
“There’s a growing recognition throughout the San Joaquin Valley that we need to come together to identify priority efforts that affect all of us,” says Michael Locke, president and CEO of the partnership.
Although the partnership has been around since 1991, its focus has been on the recruitment of industrial and large-scale office companies to the area. The group has been successful in recruiting such companies, but changing economic conditions have prompted the partnership to examine its overall strategy in economic development.
The partnership’s direct recruitment was only a small percentage of the economic development needed in the county. San Antonio-based consultants AngelouEconomics determined in 2005 that the county as a whole needed to do more in several areas, including business development and recruitment. With limited funding and a small staff, the partnership couldn’t implement the dozens of recommendations. Instead, it recently formed community partner groups to focus on specific areas of improvement: business development, work force development and education, marketing outreach, chamber and allied organizations, public concerns and entrepreneurship.
Composed of key leaders within each of those areas, the groups are largely independent but operate with guidance from the partnership. Their task is to make measurable strides in their designated areas, addressing concerns outlined in the strategic plan while emphasizing the county’s strengths.
And the area has several strengths to build on when it comes to economic development. Perhaps the area’s greatest asset is its proximity to both Silicon Valley and Sacramento. Other assets include ongoing downtown redevelopment throughout San Joaquin, the port, diversity, the growing wine industry and a strong agricultural community.
But the county faces numerous challenges before it can grow. Topping that list is the need for a broader view of economic development and business development that has been too centered on industrial. There is also a lack of business support systems and entrepreneurial development, as well as programs for work force training and re-training.
Ask Lathrop Mayor Kristy Sayles what she believes is one of the county’s top economic challenges, and she doesn’t hesitate to answer: education and work force planning.
“We obviously need to have an educated work force,” says Sayles, who serves on the board of the San Joaquin Partnership. “Historically, this has been a challenge, and it continues to be a challenge.”
The numbers make that clear. For example, SAT scores for the county lag neighboring counties and the state average. The county’s overall pass rate for the 2006 California High School Exit Exam was 58 percent for both math and English, below the statewide pass rates of 74 percent for math and 75 percent for English.
The consultants’ report says, “The county public schools are not performing well and do not offer a ‘ready’ work force pool for potential employers.” San Joaquin’s educational attainment is improving but falls short of state averages for residents with bachelors’ and graduate degrees. As for work force training programs, the county must do more to further leverage available programs and begin new ones.
“How to help people who aren’t going to be in the college structure and, at the same time, how do we attract a highly educated work force — that’s a major challenge for us,” Locke says.
And it will require major work. The strategic plan calls for San Joaquin leaders to not only improve the county’s educational system, but also to align current degree, certificate and work force training programs with target industries.
The plan also calls for fostering a stronger business climate. Part of this task will include improving infrastructure, such as the port, airport and areas for development or redevelopment.
One recommendation focuses on streamlining the development and permitting processes in jurisdictions throughout the county, which could have far-reaching effects on business development. “The growing requirements for permitting and fees in San Joaquin means that new investment faces more hurdles, ultimately increasing costs and delaying construction schedules,” according to the strategic plan.
That’s a problem Kavanaugh has heard a lot of discussion about recently. Many businesses, he says, are concerned that fees are rising throughout the county, and those increases are making it increasingly difficult to do business. “It’s a problem,” he says.
The plan also recommends the creation of a downtown incentive package for each city to shuttle along development in downtown districts. In doing so, cities should take into consideration the need for small and flexible office space, particularly “tech” space in retrofitted warehouses. Ultimately, such focus would create in-demand space for entrepreneurial companies.
In recent years, Stockton has worked hard on revitalizing its downtown, bringing in a theater, ballpark and arena. The result has been a renewed interest in downtown Stockton, says Douglass Wilhoit, CEO of the Stockton Chamber of Commerce.
“You’re going to see what’s happening in downtown Stockton happening elsewhere,” Wilhoit says.
Available space for businesses, however, should not be limited to downtowns. Consultants recommend committing the airport master plan to the development of a corporate campus. This is a major priority in the strategic plan, but no small one to implement. Officials have to set and enforce new zoning codes, rezone to include light manufacturing and commercial space, convert the existing terminal structure for more multifunctional purposes and develop a flight school.
But that’s just at the airport; the partnership is also eyeing the Port of Stockton’s master plan. Plans there could include an industry cluster at nearby Rough and Ready Island. Other recommendations call for developing a plan for an 800-acre site near Stockton for a business and industrial park.
The types of businesses being recruited to San Joaquin could also shift — and should — based on the strategic plan. The San Joaquin Partnership had been focusing on industries such as electronics and communication technology, backroom office, food processing, metals and metal fabrication, construction materials and logistics. Instead, the plan calls for San Joaquin to focus primarily on these target industries: logistics and distribution, medical equipment and supplies, air transportation, food processing, agricultural biotech, and energy resources and technology.
While these hurdles are certainly a tall order, Locke already points to accomplishments made in 2007.
For example, in response to concerns about the underutilization of the Stockton airport, the education and work force group put together an aviation academy under the auspices of the San Joaquin County Office of Education. The hope, Locke says, is the program would spin off into a full program at San Joaquin Delta College.
These may be small feats compared to what needs to be accomplished, but they’re steps in the right direction for an area just beginning to look at countywide economic development.
“Are we going to hit any homeruns? Yeah, we’d like to see those, but generally success is built incrementally,” Locke says. What exactly determines success? An enhanced quality of life and better business environment are givens, but specific measures will likely change as the economy and other factors change.
“When will we get to the point where we think we’re successful? Probably never,” Locke says. “The target keeps changing.”
In the auto zone
by Samantha Bronson
When Kyoho Machine Works Ltd. of Japan announced in April 2007 it was opening its first U.S. manufacturing facility in Stockton, the company joined a growing band of auto suppliers eyeing San Joaquin.
Already, the county is home to 10 companies supplying parts to the New United Motors Manufacturing Inc. assembly plant in Fremont, a joint venture between General Motors and Toyota. While the number of San Joaquin suppliers is impressive — with about 2,000 employees — local leaders hope the numbers will keep on coming.
“We could double that, and it’d be nice,” says Michael Locke, president and CEO of the San Joaquin Partnership.
The countywide economic development plan identifies automotive suppliers as one of the partnership’s target industries, including automotive parts manufacturing and NUMMI suppliers. Other target industries include medical equipment and supplies and agricultural biotech, among others.
San Joaquin’s lower land prices allow manufacturers to build facilities at a 20 percent cost savings compared to the Bay Area, Locke says.
Kyoho’s total investment in the facility was about $73 million. The facility, operated by subsidiary Kyoho Manufacturing California, began producing stamped- and welded-metal body parts in October, months ahead of schedule thanks to assistance from the partnership. In 2009, the company anticipates expanding operations by installing a bigger machine for pressing and welding.
Other NUMMI suppliers in San Joaquin include: Amtex, a Manteca outfit producing carpet and trim; Aisin Electronics Inc. in Stockton, producing headlamp control units and antilock brake systems; Aisin Manufacturing California in Stockton, which produces door frames; Central Spring Inc. in Stockton, which produces coil and leaf springs; Dana Corp. in Stockton, which produces truck frames; Fuel Total Systems CA Corp. in Lathrop, which produces resin-based fuel tanks; Pacific Coast MS Industries Co. Ltd. in Tracy, which produces brake and fuel lines; Pilkington North America Inc. in Lathrop, which produces auto glass; and Premier Finishing in Stockton, which produces powder coating.
