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A SITE SELECTION INVESTMENT PROFILE
SAN BERNARDINO COUNTY, CALIFORNIA
From Site Selection magazine, November 2012
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Room to Grow

Affordable land, abundant labor supply, low cost of living make the High Desert
area of San Bernardino County a magnet for expanding industrial firms.

San Bernardino County, California
San Bernardino County has one of the largest industrial employment bases in all of Southern California.
Photo courtesy of San Bernardino County

by RON STARNER
T

The High Desert region of San Bernardino County is proving to be an oasis of business opportunity for companies seeking to expand their manufacturing and distribution operations in Southern California.

From small family-owned firms like Viking Air Movers to global giants like Wal-Mart, the Victorville-Hesperia-Apple Valley area of the county is forging a reputation as the destination of choice for industrial companies on the fast track to growth.

San Bernardino Map"San Bernardino County, geographically, is a very strong county for business," says Mickey Walker, founder and owner of Viking Air Movers and its affiliated companies, Viking Equipment and High Desert Products. "First of all, the county is extremely large. It is the largest in land area in the continental U.S., with more than 20,000 square miles. And the cost of land is relatively inexpensive. Here in Hesperia in the High Desert, land goes for 40 cents a square foot in the industrial rental space market. That cost savings makes my business very competitive."

Access to affordable land is just one of many factors keeping Viking Air Movers in the black and moving forward in the desert, notes Walker. He also cites the area's strong work force.

"There is a very strong work force for us to pull from right here in San Bernardino County," says Walker. "Wages are not out of this world like they are in Los Angeles and Orange counties. We have very good employees at my company, and I can find them at reasonable labor rates. I am hiring for an assembler on my line right now, and I will pay $10 an hour."

Viking provides products, such as carpet dryers and carpet fans, used in the flood restoration industry. Walker started the business in late 2003 in Hesperia, a community of 91,534 residents in southwestern San Bernardino County.

"We ship our products worldwide from right here at our Hesperia plant," notes Walker. "The transportation assets of this area are truly outstanding. The major railroad hubs, including BNSF, are here, and we are right on the Interstate 15 freeway. The trucking industry has made it very palatable here, and that gives us great access to the Interstate 40 corridor."

The presence of many large industrial-space users helps smaller firms like Viking, Walker adds. "We have Snapple, Rubbermaid and other big manufacturers here. Their presence has made this part of the county a major hub for the trucking industry," he says. "Here, freight companies can pick up our goods a lot more cost-effectively."

Viking employs 15 workers at its 14,000-sq.-ft. plant in Hesperia. "We also operate a distribution hub in Fairfield, Ohio," says Walker. "We ship products east of the Mississippi out of Fairfield."

A Region of Entrepreneurs

Walker, like many entrepreneurs in the region, is a self-made business leader. After bouncing around Northern California, Santa Monica and Orange County, he moved out to Victorville in 1986 and began selling mobile homes.

"We started a little chemical company here and we called it High Desert Products," he says. "It is now under the same roof as Viking."

Walker notes that "our business is growing now. We are pretty resilient. This county is very pro-business. There are a lot of resources available to help companies like ours in San Bernardino County. The county government and the economic developers here make sure that they are always accessible to us."

Viking took advantage of the Hesperia Enterprise Zone hiring credits, and the tax savings enabled the firm to expand.

Viking is part of a growing trend in San Bernardino County, which is so large in land mass that the states of New Jersey, Connecticut, Delaware and Rhode Island combined could fit inside it. With a population of 2.1 million, including a work force of 850,000, the county dominates the Inland Empire of Southern California by serving as the region's economic behemoth.

Some 25 percent of the county's work force is employed in blue-collar jobs, giving San Bernardino one of the largest industrial employment bases in all of California. The largest employer in the county's industrial sector is plastics products manufacturing, with 6,265 workers.

Other large industrial employers in the county include institutional furniture and kitchen cabinet-making (4,773 jobs); cement and concrete product manufacturing (4,689 jobs); architectural and structural metals manufacturing (4,139 jobs); machine shops (2,844 jobs); and medical equipment and supplies manufacturing (2,186 jobs).

And that work force is young too. The county's median age is just 32.5.

The sheer size of the county, coupled with its abundant transportation assets, acts as a magnet for large industrial space tenants. At the center of that magnet is Victorville, the largest city in the High Desert region of the county. With 117,597 residents, Victorville anchors the 335,000-citizen High Desert area.

Notable industrial deals in the past 24 months in Victorville include a $30-million investment by Church & Dwight Co., which makes and distributes pet products; a 495,000-sq.-ft. project by M&M/Mars; and a 65,000-sq.-ft. expansion by Plastipak Packaging Inc.

Late last year, United Furniture Industries established a 505,000-sq.-ft. furniture factory in Victorville after conducting a comprehensive search of most of the Western U.S.

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Dr. Pepper Snapple Group opened its 850,000-sq.-ft. plant in Victorville in 2008. The beverage maker invested $120 million into the facility and hired 200 workers.

A couple of years prior to that, Dr. Pepper Snapple Group Inc. established an 850,000-sq.-ft. industrial operation in Victorville. Today, the plant serves as both a manufacturing plant and a distribution warehouse for the popular beverage maker.

"There were several key factors to building in San Bernardino County," says Kendall Yorn, senior vice president of packaging and engineering for Dr. Pepper Snapple (DPS). "First of all, the City of Victorville was a great partner throughout the site selection process. They demonstrated that they had an enthusiastic, pro-business environment. There also were clear advantages to building at the Southern California Logistics Airport — not only the incentives available for developing on the former George Air Force Base, but also the accessibility the location provided us to customers and consumers across Southern California and other parts of the Southwest."

Embracing the Corporate Culture

DPS made an initial investment of $120 million into the plant and hired 200 employees. "The level of skilled labor available in Victorville made it a very attractive location for us," says Yorn. "San Bernardino and the Inland Empire have a knowledgeable and trainable work force that has really embraced our company and our brands."

The city stepped up with needed infrastructure to make the deal happen, notes Yorn. "Victorville's investment in a state-of-the-art wastewater treatment facility was one of many factors that made it an attractive site for us," he says. "It showed that local government was not only serious about providing needed infrastructure to support business growth, but that they were also serious about water conservation and resource sustainability — values that we share at DPS."

DPS conducted a wide search throughout the region before selecting a site. "We considered a number of sites in the region but determined that Victorville was the ideal spot for us due to its location, business climate, the infrastructure to support our manufacturing and distribution operations, and a skilled work force," Yorn says.

Wal-Mart conducted a similar search before opening its 1.2-million-sq.-ft. distribution center in nearby Apple Valley in the spring of 2004. More than 800 people work at the plant which serves 92 stores in California and Las Vegas.

"One of the top location advantages for the High Desert area in San Bernardino County is the availability of land," says Delia Garcia, media director for Wal-Mart West. "Another is access to transportation corridors. Third is the work force. Having a robust labor pool is a key factor. Wal-Mart needs a robust work force to keep the facility operating at peak performance. We are fully staffed now, but we continue to look for strong talent. We plan to hire some more employees to fulfill our holiday shopping demand toward the end of the year."

"There is a very strong work force for us to pull from right here in San Bernardino County."
— Mickey Walker, founder and owner, Viking Air Movers

Wal-Mart occupies a total of 3.2 million sq. ft. at 20 facilities in the county. The distribution center ships 60 million cases of products annually. The Wal-Mart stores include four supercenters in the county, counting one that opened in Hesperia in October.

"In California, this distribution center serves all of the county plus our stores in surrounding areas. It basically serves Southern Inland California," Garcia says. "In Apple Valley, we also used our distribution center as a site for a solar energy initiative. In 2010, we completed a solar project there. It consists of seven acres with 5,300 ground-mounted panels producing one megawatt of electricity, which is about enough energy to power 175 homes."

Garcia says the investment is part of Wal-Mart's strategic sustainability objectives. "Our goal is to be supplied 100 percent by renewable electricity company-wide," she says. "Our second goal is to create zero waste. And our third goal is to source products that are sustainable for the environment."

Garcia adds that "the economic development officials here are very helpful in laying out the vision for the county and focusing on the need for capital investment. They are very good at showing how Wal-Mart can fit into that vision, and they are also very good at connecting the prospective employer to resources for hiring that help our company engage the excellent work force in this market."

Garcia notes that "economic developers in San Bernardino County work with local and state elected officials to create a framework that allows business to be successful."


This Investment Profile was prepared under the auspices of the San Bernardino County Economic Development Agency. For more information, contact Mary Jane Olhasso at 909-387-9801 or by email at MaryJane.Olhasso@eda.sbcounty.gov. On the Web, go to www.sbcountyadvantage.com.


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