Base Closure Turns Into Opportunity for Region

ATWATER, Calif. —  With sparks flying from blowtorches and cranes moving steel beams, the gigantic hangar that used to house B-52 bombers is now filled with workers building temporary classrooms.

“They’ve been going like gangbusters,” said Richard Martin, a former Air Force wing commander who oversees operations at what used to be Castle Air Force Base. “The plant produces about 20 of these modular units per day. They’re going out of here day and night.”

Two years ago the base closed just east of this small rural town of about 21,000 in California’s San Joaquin Valley. With unemployment rates at the time ranging from 15% to 20%, some feared that the closure would devastate the local economy.

As the nation’s main training base for B-52 and KC-135 crews, Castle employed nearly 5,000 military personnel and about 1,000 civilian workers.

“People thought that Atwater was going to be a ghost town,” Andy Krotik, mayor pro tem, said of the 1991 announcement that Castle would close after half a century.

But federal officials hail the transformation of Castle Air Force Base to civilian use as one of the success stories of base closures after the end of the Cold War.

New industries have created about 2,000 jobs with more available each month.

The base is now called Castle Airport Aviation and Development Center. It is managed by the Castle Joint Powers Authority, whose board of directors is represented by officials from Atwater, Merced County and the city of Merced.

“The primary goal of JPA is to generate enough cash reserves and cash flow to start developing and building more facilities at the site,” said Martin, the executive director.

Martin and his staff have attracted many companies to the base, ranging from manufacturing plants to a dog-training school. The federal government also plans to build a $120-million prison for 900 maximum-security inmates and 500 minimum-security work-camp inmates.

Two of the biggest tenants couldn’t be more different.

Pacesetter Industries Inc. makes modular units, mostly temporary classrooms. The company has an assembly line inside gargantuan hangars. Sparks fly, and sounds of rivets being driven into the units’ foundations fill the warehouse.

A few hundred yards away, Pacific Bell workers sit in front of large computer screens in a room designed to keep noise down. Fiber-optic cables run through the facility like a central nervous system, helping to service the company’s 250,000 digital mobile-phone, pager and voice-mail customers.

Each company has about 500 workers, and both hope to add more jobs soon.

“We’re on a roll,” Martin said. “We’re not at the end of the line yet. We’re not even halfway there.”

Martin has arranged leases on almost 80% of the base’s facilities, which sit on 3,000 acres. The Joint Powers Authority even gets competing offers for some space.

“We’re debt-free, have a million bucks in the bank and will hopefully start financing our own building projects,” Martin said.

Still, the authority has had its share of busts and blown deals.

One of the first companies to enlist was a blimp manufacturer founded by Ukrainian scientists. Worldwide Aeros Corp. said it would build luxury tourist airships to fly over the Grand Canyon.

The company was evicted a few months later when it failed to pay rent on eight aircraft hangars.

Another company that never took off was Pegasus, which promised to bring X-ray imaging service to diagnose problems in airplanes without taking them apart.

“The danger in all these cases is that you have these companies--whether for real or shaky--come into a community that’s hungry and vulnerable,” Martin said. “Some of the local people wanted to even invest their money in some of these companies. We went as far as publicly warning people not to do that.”

But despite those low points, northern Merced County and Atwater, in particular, are enjoying one of the biggest economic revivals in recent history.

The rate of new home construction is at one of the highest levels ever, property values have risen, and more people are buying homes. The median price of a three-bedroom home in Atwater is about $98,000.

That’s nearly $10,000 more than two years ago, said Krotik, who is also a real estate agent and a Joint Powers Authority board member.

Between the first announcement of the base closure in 1991 and the shutdown in 1995, home resale values fell 25%, he said.

“I think we’re at the bottom of the bell curve heading up,” Krotik said. “Residential activity is up, commercial activity is up, and industrial activity is obviously up.”

But there is plenty left to be done.

“If there’s one disappointment, it’s in aviation,” Martin said.

After all, Castle’s runway, at 11,800 feet, is longer than those at San Francisco International Airport 100 miles west.

The authority is aiming for an airplane maintenance company or a cargo airplane company to use the mostly idle airport facilities.

The federal government still owns the base and the land because of ground-water contamination. Martin said the base cannot be officially turned over to the local authority until the environmental hazards are removed.

The base has installed pumps to purify the ground water of a chemical called TCE that once was used as a degreaser for engine and other airplane parts. The cleanup could take about 20 years, Martin said.

But in the meantime, the economic future looks bright at Castle.

“I’m pleased to say you ain’t seen nothing yet,” Martin said.