A decade ago the latest of many efforts to separate California into smaller, more manageable states got underway. Venture capitalist Tim Draper’s “Six Californias” concept, like all the others, fell short of making anything actually happen. But it still provides a practical framework for reporting on the state’s enormous economy. So our editorial team went hunting for stories in each of those six regions: the 14-county “Jefferson” region to the far north near the Oregon state line; the 13-county North California region; the eight counties of Silicon Valley; the 14 counties of Central California; the four-county West California region (including Greater Los Angeles); and the five counties of South California (including San Diego, Riverside and San Bernardino counties). And Ron Starner reports on one issue uniting them all: water. – Ed.
1 JEFFERSON: California Innovation Looks to California Locations
As one might expect in this pristine region known for its mountains and natural landscape, this area boasts more landscape than logistics. Site Selection’s Conway Projects Database has tracked fewer than a couple dozen major corporate facility projects there over the past decade, in six of the 14 counties, led by Chico in Butte County, whose project portfolio includes an investment by Los Angeles–based Nanotech Energy in a manufacturing facility for graphene-based battery cells. Called Chico 2, it follows the Chico 1 facility located there in 2016.
Nanotech Energy’s roots are Californian: It was founded in 2014 by Dr. Jack Kavanaugh and UCLA scientists Dr. Richard Kaner and Dr. Maher El-Kady. The company says its “very-high-surface-area, single-layer graphene material is already being used in multiple applications, including non-flammable lithium-ion batteries, transparent conducting electrodes, conductive inks, printed electronics, conductive epoxy, antistatic coatings and EMI (electromagnetic interference) shielding.”
The 50,000-sq.-ft. Chico facility went into full production in spring 2024 and aims to eventually generate 30,000 battery cells per day by 2025. The first wave of hiring aimed to add 100 jobs, the company said as trial runs concluded in late 2023. At that same time, the company announced a new partnership with Rockwell Automation that was expected to not only boost the Chico site’s performance and processes but also fuel best practices at the gigafactory Nanotech plans to site at a yet-to-be-determined brownfield location somewhere in the United States.
In Redding in Shasta County, Arelac (doing business as Fortera) in April launched production at a new low-carbon cement plant. “Located on CalPortland’s campus at Redding, California, the Fortera Redding ReCarb Plant takes industrial CO2 from CalPortland’s kiln and mineralizes it through Fortera’s patented ReCarb process,” the company explains, creating a green cement solution it has named ReAct®. Fortera was selected as the U.S. national winner in the outstanding projects category in the 2023 Net-Zero Industries Awards. Fortera was established in Silicon Valley in 2019. – Adam Bruns
2 NORTH CALIFORNIA: Greater Sacramento Is a National Economic Performance Leader
California’s capital, Sacramento, anchors the 13-county region of North California. The 2.4 million population Sacramento-Roseville-Folsom MSA is by far the largest metro, and it’s among the best performing metros in the U.S. by several measures, according to the Brookings Institution’s Metro Monitor 2024, released in March. The report quantifies the economic performance of 54 very large metros from 2012 to 2022 based on five categories: growth, prosperity, overall inclusion, racial inclusion, and geographic inclusion.
Each category uses three indicators to arrive at a national ranking, and the Sacramento metro is in the top 10 nationally in three of the five categories. It’s third in geographic inclusion, fourth in overall inclusion and ninth in racial inclusion. It ranks in the top 20 in the other two categories — 15th for growth and 17th for prosperity. Among other findings:
The Sacramento region has the second highest decrease in relative poverty rate nationally at -5%.
Median income in underserved neighborhoods grew by more than $7,200, and the racial employment gap rate fell by 4.3%.
Sacramento’s Gross Metropolitan Product grew by 34.2% from 2012 to 2022.
“What is outstanding about this data is that we are not only seeing incredible economic growth, but that we are growing in a way that creates equitable opportunities for the region’s residents, regardless of their background or zip code,” said Barry Broome, president and CEO of the Greater Sacramento Economic Council (GSEC), in a press release. “This progress is a testament to the work of the 40+ CEOs, 22 communities and higher educational institutions on GSEC’s Board of Directors, who have rallied around a shared vision for inclusive economic growth over the past nine years.”
Meanwhile, the Sacramento area has emerged as a hub for semiconductor capital investment. In August 2023, Bosch acquired the assets of TSI Semiconductor in Roseville. Robert Bosch Semiconductor LLC will invest $1.5 billion to equip the facility for the production of silicon carbide semiconductors. (See sidebar on water for more.)
The headquarters of Solodigm in Rancho Cordova
Photo courtesy of Solodigm
Also in 2023, Solodigm, which makes NAND flash memory solutions, picked Rancho Cordova as the location for its global headquarters. The company cited access to skilled talent, quality of life and support for high-tech businesses as drivers of the city’s selection. And Samsung Semiconductor has opened an R&D office in Folsom. The company’s president, Jinman Han, pointed to the Greater Sacramento region’s “rich technology talent pool in hardware and software and its proximity to the Bay Area” as reasons for picking Folsom. – Mark Arend
3 SILICON VALLEY: Open for Business in Oakland
Innovation maintains a steady hum in this world-leading region, where venture capital and adventurous enterprises continue their mating dance and where data centers like a vast new campus from Equinix continue to multiply.
Zoom in on one city in Alameda County and you’ll find a sense of renewal and rejuvenation in the air. Among the projects landing in Oakland is an expansion to 21,595 sq. ft. of space at the 440,000-sq.-ft. American Steel Blocks development by Molten, a clean hydrogen and graphite startup backed by Breakthrough Energy.
“Located in the heart of West Oakland, the American Steel project offers a strategic hub for Molten’s operations, providing the infrastructure, power, and resources necessary for the company’s cutting-edge work in decarbonizing heavy industries,” Molten stated in a release. “The additional space will support Molten’s ongoing efforts to produce carbon-neutral hydrogen and lithium-ion battery-grade graphite, critical components in reducing global carbon emissions.”
Since 201, Oregon-based ScanlanKemperBard (SKB) has revamped the former American Steel industrial campus to be a landing zone for firms in such sectors as clean tech, advanced manufacturing and biotech. Molten’s process uses renewable power to crack methane at high temperatures into hydrogen and graphite.
“The property has the infrastructure required to support our use and expansion and is becoming a hub for clean tech companies like Molten Industries,” said Molten Industries Co-Founder Caleb Boyd, whose background includes UC Berkeley, Stanford University, Apple and VC investing in climate tech at UVC Partners in Munich, Germany. “It’s a pleasure to be a part of a vibrant and growing West Oakland community with projects like the American Steel Blocks and others in the immediate neighborhood.”
The tenant mix at American Steel Blocks has included such firms as Limelight Steel, which uses laser technology to convert low-grade ore into molten iron; Fluxion Biosciences (acquired last year by Cell Microsystems ; clean energy company Planted Solar; and autonomous electric aircraft maker Pyka, which in May partnered with Sierra Nevada Company to offer Pyka’s large-scale all-electric cargo uncrewed aerial system (UAS) to customers within the U.S. Department of Defense.
In August, Pyka announced Heinen Brothers Agra Services, one of the largest privately owned aerial application service providers in North America, would be its first U.S. customer for Pelican Spray, the world’s largest autonomous electric crop protection aircraft.
Founded in the backyard of CEO Michael Norcia’s parents’ home, the company was accepted into a cohort at celebrated accelerator and VC organization Y Combinator in 2017. An $8 million round of seed funding in 2019 was followed by $37 million in Series A funding in April 2022, which was quickly followed by the world’s first approval for autonomous night spray operations in Costa Rica that fall. The company in spring 2023 was awarded a $7 million California Tax Credit by the California Governor’s Office of Business and Economic Development (GO-Biz) to expand manufacturing of zero-emission autonomous aircraft and last fall surpassed the 50-employee mark.
In March, Pyka secured a 110,000-sq.-ft. corporate headquarters and production facility in the historic Alameda Naval Air Station, now known as Alameda Point, in the city of Alameda, a 15-minute drive to Alameda Island from its American Steel digs. The move to the location was completed this summer, says Pyka Creative Director Thomas Semow, as the company has surpassed 70 employees and joins what it describes as “a neighborhood hub of innovative leaders in green technology solutions, energy storage, and advanced hardware robotics such as Saildrone, Amber Kinetics, Natel Energy and Rain.” – Adam Bruns
4 CENTRAL CALIFORNIA: New Solar Array at Edwards AFB Sets Standards
Since the start of the year when it came online, the Edwards & Sanborn Solar + Energy Storage project in the Mojave Desert of Central California has notched several significant superlatives. It’s now the highest capacity solar farm in the United States, its 875 megawatts of solar capacity enough to power more than 238,000 thousand homes. Its vast battery storage system is considered to be the largest in the world. Straddling private and federal land — including 2,600 acres at the northwest corner of Edwards Air Force Base — it is the largest public-private partnership within the U.S. Department of Defense.
The Edwards Solar Array at Edwards AFB, California
Photo courtesy of Terra-Gen
“Only in America can we take barren land, embrace the power of the sun and create an engineering marvel such as this,” said Brig. Gen. William Kale, Air Force Civil Engineer Center commander, at the project’s unveiling.
Totaling 4,600 acres about 60 miles north of Los Angeles, the site’s 1.9 million solar panels are visible from space, as evidenced by a January flyover by NASA’s Landsat 9 satellite. Construction efforts included the installation of more than 98 miles of medium voltage wire, more than 360 miles of direct cable and more than 120,000 batteries supplied by LG Chem, Samsung and BYD.
The installation is supplying power to the city of San Jose, Southern California Edison, Pacific Gas & Electric, the Clean Power Alliance and Starbucks. It is expected to generate $75 million for the Air Force under a 35-year lease with Terra-Gen, a renewable energy company with which the DOD is partnering under its Enhanced Use Lease program, which opens up underutilized military property for commercial uses.
A Steelmaking First
Immediately north of the Edwards AFB solar project in Kern County, Pacific Steel Group is planning a $540 million recycled metal project that is projected to bring more than 500 construction jobs and 440 full-time positions to the region. Officials say the proposed steel mill, designed to produce rebar for construction purposes, would be the first built in California in more than 50 years. In return for its investment and job production pledges, Pacific Steel is receiving a $30 million tax credit under the California Jobs First program, one of eight such awards totaling $120 million announced in April.
“This funding will help businesses create good-paying jobs — from steel manufacturing in Kern County to sustainable lithium production in Imperial Valley — and support the state’s economic dominance for years to come,” said Gov. Gavin Newsom in an accompanying statement.
Pacific Steel, based in San Diego, plans to develop some 550,000 sq. ft. near the town of Mojave with a targeted start date, pending environmental approvals, of summer 2026. The facility is to be powered by an adjacent 63-acre solar array. Company officials say the plant will serve to mitigate the environmental costs of shipping scrap metal out of state for processing, only to be returned to California as finished product.
“It gets put on trucks and rail cars, shipped out of state where steel is produced in less clean ways and then shipped hundreds of miles back into the state,” says Pacific Steel Vice President of Mill Operations Mark Olson. “Obviously,” Olson told a meeting of the Kern County Board of Supervisors in March, “there are significant greenhouse gas emissions associated with that.”
State Grant Propels Air Taxi Vision
Armed with a $15 million CalCompetes grant, Long Beach-based aerospace startup AIBOT is moving ahead with plans to develop a fleet of electric vertical take-off and landing (aiEVTOL) air taxis. The grant funding, according to a release, is to facilitate the creation of nearly 700 jobs and close to $500 million worth of investments at planned manufacturing sites in Long Beach and at the 3,300-acre Mojave Space Port in Mojave.
“Advanced air mobility is an industry of the future, and we want to ensure California remains a leader in that industry. We look forward to AIBOT’s success as they build out their company and continue to grow their presence across California,” said Dee Dee Myers, director of GO-Biz, which awarded the grant late last year.
AIBOT officials say the envisioned fleet of air taxis would carry up to seven passengers each, offering speedy “intra-city” service, such as 45-minute flights from Los Angeles to San Diego. While the company hasn’t offered a production timeline, executive chairperson Jerry Wang says the CalCompetes grant will “enable fast-tracking” of the AIBOT’s vision.
“We’re ready to utilize this opportunity to fortify our role as an ultra-high-tech leader in the Advanced Air Mobility sector,” Wang said, “making substantial contributions to California’s economy and job market.” – Gary Daughters
5 WEST CALIFORNIA: Greener Connections
California’s Port of Long Beach is ranked as the No. 1 export seaport in the U.S., the 21st busiest container cargo port in the world and the 9th busiest port complex by container volume in the world when combined with the Port of Los Angeles.
Trade generated at the port currently supports more than 2.6 million jobs in the nation, 51,000 jobs in Long Beach alone. This activity has resulted in $374 billion in direct and indirect business sales and $126.8 billion in trade-related wages per year.
In July 2024, the Port broke ground on the $1.5 billion expansion of the Pier B On-Dock Rail Support Facility. This facility is vital to moving cargo out of the Port, in addition to providing storage and a staging area for trains. Upgrades and expansion of the 82-acre rail yard will triple the volume of on-dock rail cargo the facility currently takes in, from 1.5 million 20-foot equivalent units (TEUs) up to 4.7 TEUs per year.
“The $643 million in federal, state and county funding provided for the Pier B On-Dock Rail Support Facility program is a major boost to the realization of this state-of-the-art rail connection,” says Port of Long Beach Media Relations Manager Lee Peterson. “Also known as ‘America’s Green Gateway,’ Pier B will serve to dramatically improve the efficiency and sustainability of cargo flow through the San Pedro Bay ports complex and across the United States.”
Expansion of the Pier B rail yard will roll out in phases until 2032, doubling the existing site to a total of 171 acres. A new layout reconfigures existing tracks on the site and adds new tracks that connect to the Port’s on-dock rail facilities and the Alameda Corridor railway, which leads directly to downtown Los Angeles. This integration will connect the Port to 30 major rail hubs.
The new Pier B On-Dock Rail Support Facility will become operational by 2032.
Rendering courtesy of the Port of Long Beach
Additional capacity at the site will now allow trains up to 10,000 feet in length to swiftly move cargo in and out of the Port’s marine terminals. Plans include a new station that can fuel up and service up to 30 locomotives at once, while a new full-service staging area is set to specifically assemble and break down trains. Not only does this allow for fewer trips, but less congestion and pollution.
“This facility will allow national rairoads to seam-lessly integrate into the ports complex, providing crucial new capacity for the ports,” says Peterson.
The project is expected to create 1,100 construction-related jobs over the course of its development. “In addition, the tripling of capacity at Pier B will create and sustain jobs throughout the supply chain, related to additional cargo being moved,” says Peterson. “Being able to grow that cargo volume will help businesses and residents across the United States.
“With each new capital improvement project, the Port of Long Beach enhances its efficiency and its competitiveness. As the keystone of the Port’s rail system, the Pier B project is of utmost importance to the efficient operation of the Port,” says Peterson. “For example, we depend on the project to increase the percentage of the Port’s ‘on-dock rail’ — where containers are moved to and from terminals by rail and not by truck — to at least 35%.”
For years the Port of Long Beach has undertaken targeted projects to scale its competitiveness with a highly sustainable approach in line with goals of the San Pedro Bay Ports 2017 Clean Air Action Plan. The Gerald Desmond Bridge Replacement was vital to accommodating clearance to modern cargo ships, while the Middle Harbor Redevelopment Project created one of the most technologically advanced seaports globally. Once Pier Wind, a proposed Offshore Wind Staging and Integration facility, moves forward, the Port aims to help meet California’s goal of 25 gigawatts of offshore wind power by 2045. – Alexis Elmore
6 SOUTH CALIFORNIA: A Steadfast Leader in Life Sciences
Despite a slight dip in the number of life sciences companies located in San Diego — from 2,215 in 2022 to 2,153 in 2023, according to a report by California Life Sciences — the industry is still 10% larger than it was five years ago. Far from struggling, San Diego remains a powerhouse in the field, consistently ranking among the top three life sciences clusters and top eight talent markets in the U.S. According to Biocom California, San Diego’s life sciences industry generated $56.6 billion in economic output in 2023 and employed 75,816 people, directly contributing $17.6 billion in labor income.
Home to UC San Diego and an impressive array of private research institutions such as Scripps Research, the Salk Institute and the Sanford Burnham Prebys Medical Discovery Institute, San Diego continues to attract investment from some of the biggest names in the industry.
During the first half of 2024, Eli Lilly and Company opened its first Lilly Gateway Labs location in San Diego. This will be the company’s third Gateway Labs location, with additional sites located in San Francisco and Boston. Gateway Labs functions as a shared innovation accelerator that provides participating companies with lab space and unique access to Lilly scientists, researchers and executives.
“We are excited to expand our footprint in San Diego as it is home to a thriving life sciences community,” said Daniel Skovronsky, M.D., Ph.D., chief scientific officer, and president, Lilly Research Laboratories, in November. “By providing lab space and access to Lilly’s scientific expertise, we can support scientists from research institutes, universities and small biotech companies as they work to discover the next generation of medicines for patients.”
Located in Alexandria Real Estate Equities’ University Town Center (UTC) campus, the new location encompasses 62,000 sq. ft. of rentable lab space and open workstations, with the capacity to house 10 companies as well as more than 120 biotech and Lilly employees.
Earlier this year, Pfizer Oncology also expanded its presence in the region by securing a 15-year lease at Breakthrough Properties’ Torrey View life sciences campus. With Pfizer now occupying 230,000 sq. ft., 89% of the three-building 10-acre campus is now filled by long-term tenants. BD Biosciences will be among Pfizer’s neighbors as the company announced a phased move-in of its San Diego workforce to the new facility in late 2023.
In addition to this partnership, Breakthrough has also formed a separate, global strategic collaboration with Pfizer to accelerate the delivery of scientific innovations to patients. Breakthrough’s clients will receive streamlined access to Pfizer’s extensive scientific, clinical and strategic infrastructure through Pfizer Ignite, an end-to-end developmental and clinical service helping biotech innovators advance novel therapies to market. Breakthrough’s four life sciences campuses in the San Diego area, as well as its other facilities in key clusters across the U.S. and Europe, are set to benefit from this partnership. – Lindsay Lopp
The Salton Sea in Imperial Valley, California.
NEW WATER POLICY TAKES MANY BY SURPRISE
The news that California will impose permanent water restrictions for the first time in state history left a lot of leaders around the Golden State shaking their heads and wondering what just happened.
The state’s Water Resources Control Board approved the long-debated policy — called Making Conservation a California a Way of Life — in early July. The agency said the policy’s intent is to permanently decrease statewide water usage so that water restrictions enacted during drought seasons are not as draconian.
Under the new policy, retail water suppliers, not individual households or businesses, will be required to reduce their water consumption by almost 30% over the next 15 years. Failure to comply will result in fines of up to $10,000 per day. The three regions of the state being directed to enact the biggest water use reductions are the South Coast, the San Joaquin Valley and Tulare Lake. If approved by the Office of Administrative Law, these new restrictions will take effect on January 1, 2025.
Tim Kelley, president and CEO of the Imperial Valley Economic Development Corp. in Southern California, was not having it.
“All of the state’s reservoirs are full. We have had two years of exceptional rain,” he says. “But we are in a unique situation in Imperial Valley. We are not under the Water Board of California here. We are under the Bureau of Reclamation. Imperial County had the largest rural to urban transfer of water in the U.S. We have a lot of water here.”
What does this mean? “We have had the greatest conservation of water in the U.S.,”
says Kelley, who represents a county of 180,000 people just north of Mexicali along the U.S.-Mexico border. “Farmers in the valley are paid to fallow their land to free up water and then implement water-saving approaches. In fact, 100% of all the hydro in California is equal to the amount of energy needed to pump water throughout the U.S. We don’t pump water in the Imperial Valley. It is gravity fed. We are the largest holder of water in the U.S., and it costs just $20 per acre-foot. Water in San Diego costs $3,500 per acre-foot.”
Kern Hosts State’s Biggest Water Bank
Kelley has company. “The new state directive on water was disappointing,” say Jenny Holtermann, executive director of the nonprofit Water Association of Kern County. “It seems like we are constantly in a state of conservation. It is more of a way of life here.”
Holtermann says other counties in California could learn a lot from Kern County. “We have one of the largest water banking projects in the U.S. and the world,” she notes. “The Kern Water Bank stores 700,000 acre-feet of water. That is more than any other place in California. We can take advantage of any runoff that we get from stormwater. Thanks to a huge influx of water in 2023, we now have the most water we have stored in over 20 years.”
Another location that excels in water conservation is the City of Roseville in Placer County, part of the greater Sacramento region of Northern California. “This city has grown and evolved on the notion of self-sufficiency and being resilient,” says Sean Bigley, assistant director for environmental utilities for the city. “It is baked into the culture here.”
The city-owned water utility takes a three-part approach that includes surface water, ground water and recycled water. The city’s ground water Aquifer Storage Recovery (ASR) program has 10 ASR wells with several more planned. The technology allows the city to treat surface water, inject it below ground into the aquifer, and then recover it from the ground when needed. The city plans to increase the program to 12 wells capable of injecting 10,000 acre-feet of water per year.
Roseville has been so successful at water management that Robert Bosch Semiconductor LLC is planning a $1.5 billion investment to convert an old TSI Semiconductors plant in Roseville into a facility for producing and testing silicon semiconductors, a key component of building electric vehicles. The semiconductor industry is a big water user, and city officials say Bosch was attracted to Roseville by the city’s innovative water management.
“The reliability of water in Roseville is very high,” says Bigley. “The quality of our water is extremely high as well. The Sierra Mountains are the source of most of our water. We also have a specific development planning process. We know our customers, and we know what to supply them.”
Chip Makers Flock to Watery Areas
Rob Cline, economic development project manager for the city, says that “the infrastructure is in place for everything that Bosch will need to build and operate its plant. The biggest customers that we have in the city are the chip manufacturing sector and the health care sector. We also have a couple food and beverage processors. The commercial sector in general has a lot of water users here too. Plus, agriculture is robust in Placer County. The city and county share the same water resources.”
Cline adds that the greater Sacramento region “is in pretty good shape for water, and that is not by chance. It is an amalgamation of different water districts and cities. We are known for being a very collaborative region.”
Barry Broome, president and CEO of the Greater Sacramento Economic Council, says the entire six-county region is well situated with water. “We are a finalist for a major semiconductor manufacturing facility. You don’t land that deal unless you can meet all of their water needs. We can,” he says. “Around $1.7 billion has been invested recently into our water infrastructure in the region. Northern California has a natural water advantage; and we recycle our water. It is part of our heritage.”
About 2.6 million people live in the six-county MSA. Placer County has 430,000 people, including the 155,000 residents who live in Roseville. – Ron Starner