Bakersfield is reborn as boom years return

As many communities in the United States struggle, good things are happening in a city that finds itself in a lofty position on key lists measuring economic vitality.

New industries are emerging in Bakersfield, California, while an old standby - oil - is also in the mix. Tracie Cone / AP Photo

For most of its existence, Bakersfield in California has inhabited that awkward in-between place. Not as sophisticated as Los Angeles, just over the Tehachapi Mountains to the south, not as wealthy as its longtime economic rival Fresno, equidistant to the north.

But as many communities continue to struggle economically, good things are happening in this place best known for endless oilfields and the Bakersfield Sound - a twangy style of steel guitar music made popular by the hometown country crooners Buck Owens and Merle Haggard.

Bakersfield and surrounding Kern County are in lofty positions on key US lists measuring economic vitality: it's the number one metro area for long-term private sector job growth, the number one county for construction gains and the number one large metro area for annual economic growth.

Business leaders say the region's boom is driven by cheap land, affordable housing, proximity to Los Angeles, a location that is within a three-hour drive of 90 per cent of the state's population, and a planning department that doesn't throw up roadblocks.

A diversity of industries is emerging, while an old standby - oil - has been reborn thanks to new technologies.

At the confluence of Interstate 5 and Highway 99, the state's two major north-south transportation arteries, Caterpillar's new parts distribution centre went from handshake to grand opening last August in just eight months. It joined 35 other logistics centres near there such as Ikea, Frito-Lay and Dollar General drawn to the county because it is a one-day turnaround for truckers delivering to San Francisco or San Diego.

The demand for industrial and office space has left Kern County with little inventory.

"Everything is moving," says David Wagner, the contractor Wallace & Smith's superintendent on a 2,600-square-metre business complex that is now a skeleton of I-beams. "The developer already has tenants for this and it won't open until April."

Wallace & Smith just finished a 14,900 square metre cold storage facility in Delano, a Nascar-style racetrack and a regional blood bank. It has four apartment complexes under construction and will break ground in February on a minor-league baseball stadium.

Bryce McCall, an electrician, wondered during the downturn whether he had chosen the right profession. Not anymore. "My wife and I would discuss whether I would be better off going to the oilfields," he says as he drilled wiring conduits for a garage at a new development. "Now the jobs are happening and we're starting to pick up."

There is such an active business climate that during the autumn the Kern County Economic Development Corporation and the Bakersfield Californian newspaper bucked industry trends by launching a print paper, the Kern Business Journal, now on its second edition. A new east-west freeway through the town is paved and close to opening.

At the Mojave Air and Space Port in south-east Kern County, Virgin Galactic's SpaceShipTwo prepares for the day it will carry passengers into suborbital space, and Paul Allen's Stratolaunch Systems is building the world's largest aircraft - one that is meant to carry rockets with commercial cargo and, eventually, passengers to the edge of space.

Despite the progress, hurdles remain. Unemployment in the county is 12.4 per cent, down from 16.2 per cent in December 2010 but still above the statewide average of 9.8 per cent.

As Bakersfield booms, outsiders' perceptions are slowly shifting.

Two years ago, State Farm moved two insurance centres - one in the San Francisco Bay area and one in Fresno - into its Bakersfield office. The company expected that 35 per cent of the Bay area workers would take the transfer. After bus tours of Bakersfield's vibrant downtown and tree-lined neighbourhoods, 70 per cent signed on.

"People come here and they say, 'Oh my God, there are amenities and people can speak full sentences.' It's the perception versus the reality," says Richard Chapman, the president of the Kern County Economic Development Corporation.

Bakersfield has boomed before - it saw huge growth in the late 1990s and into the early years of the new century. But it fell hard when the bottom dropped out of the housing market. Now, housing is helping to make the city attractive again.

The median price of a three-bedroom home is US$130,000 (Dh477,490), down from $216,000 in 2007.

It is also a cheap place to do business. In a recent analysis of the taxes and fees charged by 421 US cities, the annual Kosmont-Rose Institute Cost of Doing Business Survey rated Bakersfield a "low cost" city. Los Angeles was rated "very high cost".

Much of the boom in Bakersfield is because high oil prices and new technology for extraction have revived its oil industry. Some estimates place up to 80 per cent of California's oil under Kern County soil, with an estimated 12 billion barrels trapped in shale, the largest deposit of any county in the United States.

Recently, the philanthropist and retired oil executive Gene Voiland bought the Bakersfield Blaze, a minor league farm team of the Cincinnati Reds. His stadium project is part of a new high-end shopping complex on the affluent west side of the city.

"I've moved here four times while I was in the oil business, and I'm retired here because I thought it was the best place I've ever lived," Mr Voiland says. "It's a good town. People do their jobs."

* Associated Press