For more than 50 years of its existence, Castle Air Force Base, a former military base 200 kilometres east of San Jose, California, saw military personnel ship out to US foreign operations including the Korean and Gulf wars. It was also the venue for record-breaking feats, including a mission in which three Boeing B-52s took off from the base in January 1957 to become the first jet aircrafts to fly non-stop around the world.
By the time Adam Wasserman, managing partner at investment advisory firm GLDPartners, visited the site in 2011, the former military base was clearly well past its best. Like many other military facilities across the US, following the end of the Cold War, the US government deemed the base redundant and closed it in 1995.
“It was clear that the place had potential and it is an interesting asset, especially in California, but it was a ‘diamond in the rough’ type of appeal,” says Mr Wasserman, whose company advises Merced County, an owner of the former base, in attracting investors to the site.
A lost story
As interesting an asset as the eight-hectare site might be, now the base was no longer used by the air force it required a new purpose. At the end of 2011, local authorities announced a plan to redevelop Castle. And while such initiatives tend not to surprise, Castle's new role as a manufacturing centre might.
After all, with the booming tech industry in northern California, the world-renowned entertainment sector in the south and biotech clusters stretching from San Francisco to San Diego, manufacturing is not exactly a sector that springs to mind when contemplating the state’s economy.
“The sector did not leave the state, but with other sectors gaining more prominence, California’s manufacturing story often gets lost,” says Lois Yates, a partner at GLDPartners, who points to Mackey & Sons, a heavy duty crane manufacturer located within the Castle project.
Additionally, says Ms Yates, the former airbase-turned-manufacturing base can supplement operations of software and IT and pharma firms located elsewhere in the state. A case in point is Google, which since 2011 has been leasing space at the base for its self-driving car and aerial Wi-Fi network projects.
A tenant such as Google raises Castle’s profile, but according to Mr Wasserman the main focus is on attracting large risk-capital partners interested in forming PPPs with local authorities. In order to attract such investors, Merced County authorities introduced initiatives aiming at re-zoning and expediting permit processes.
”Local authorities typically tender an asset in a fairly passive way. Merced County adopted a far more proactive business-oriented position, however, where GLDPartners has defined the business opportunity in terms of market potential, competition and infrastructure investment,” says Mr Wasserman. This effort is significant in a state that regularly ends up at the bottom of rankings evaluating business climate of US states.