Outlook for local economy trends upward in 2021

This is the second article in a series that will be published as presented from the keynote address by Mark Schniepp, at the 20-21 Outlook Conference.

————————

The Outlook

With massive repair and reconstruction of facilities underway at China Lake NAS, this activity alone represents a substantial engine of economic growth for the region, and for an extended period of time.

The Defense budget outlook for normal base operations in the U.S. does not suggest any departure from the current trend in place, providing continued stability of operations at China Lake.

As restrictions are eased in California this year, more travel will be unleashed. Visitors should inundate all regions of California including the Eastern Sierra. The demand for onsite film shoots is also likely to surge, having been postponed by on-and-off business shutdowns for most of 2020.

The forecast for the local economy is quite favorable. It is likely that the Indian Wells Valley economy will return to a more normally functioning environment sooner than the rest of Kern County or California.

————————

Eastern Kern County

This area of the County is dominated by Department of Defense activities, aerospace testing and exploration research, massive development of energy resources, and tourism.

Ridgecrest is in the northeastern most corner of the broader Eastern Kern County region. Historically the location of the principal borax mining in the nation, today the U.S. Navy and Air Force are the key economic engines in the region, operating the large and strategic facilities of China Lake Naval Air Station and Edwards Air Force Base. These two facilities employ over 15,000 direct workers and create thousands of indirect jobs as a result of their economic reach.

The Mojave Air and Space Port is a principal industrial park and industrial center for Eastern Kern County. Over 1,000 workers in 60 companies are engaged in aerospace design, test, and evaluation, wind energy, industrial manufacturing, and airliner storage.

————————

China Lake NAS

The region is dominated by the China Lake naval installation, the U.S. Navy’s largest single landholding, an area representing 85 percent of total Navy land for weapons and armaments research, development, acquisition, testing and evaluation.

The Navy is the largest employer in Ridgecrest, and second largest in Kern County. The total federal civilian workforce at the base currently stands at 5,011. The largest tenant is the Naval Air Warfare Center Weapons Division with 4,339 federal civilian employees and total personnel including military and contractors of 6,078. Other tenants on base bring the total onboard China Lake workforce to an estimated 7,201 personnel.

The annual growth of scientists and engineers averaged 201 positions between 2013 and 2018.

Federal civilians increased by just over 1,000 in total headcount by FY 2021. The workforce additions have contributed meaningfully to the Ridgecrest economy principally through the additional spending on goods and services, including housing.

Average salaries for federal civilians located on the base are the highest of any sector in the Greater Ridgecrest economy.

Earthquake Repair and Replacement Efforts to Date

In July 2019, two large earthquakes struck Southern California; both had epicenters within boundaries of the naval base. The first to strike on July 4 was a 6.4 magnitude quake. It caused no injuries and the initial reports indicated that all buildings were intact. The second quake---of 7.1 magnitude—occurred on July 5 and significantly damaged buildings and equipment on-base.

The assessment of buildings and facilities on the base comprising 3,598 structures in all found total damage estimated at $5.2 billion. Serious damage occurred to 234 buildings, and replacing these buildings alone was estimated at $2.2 billion. However specialized equipment, furniture, machine tools, telecommunication assets and other facilities are also in need of repair or replacement.

18 repair and replacement projects have been identified to date. Awarding construction contracts to repair or replace buildings and facilities has been swift over the last 10 months.

Seven projects have been awarded to date, with the lion’s share occurring in Fiscal 2020 (nearly $1 billion) which ended on September 30, 2020.

Constructions efforts will accelerate by next spring and as many as 1,500 temporary workers are projected to be engaged in construction activities by late 2022.

The first significant contract of $99.8 million was awarded in April 2020 for design and construction of 25 new ordnance magazines and an inert storage facility. Reyes Construction of Pomona was awarded the contract. The effort is currently fully underway with construction expected to be completed in August 2022.

In September 2020, contracts totaling $737.8 million were issued for new airfield construction at the base.

A new South Airfield Complex will be built just south of the existing airfield, Armitage Field, and will include replacing hanger 2 and 3, and the development of an apron, taxiway, utilities, a laboratory, an air operations facility, an advanced warfare hanger, and an aircraft fire and rescue station.

————————

Outlook for China Lake Operations

With massive repair and reconstruction of facilities underway at the base, this activity alone represents a substantial engine of economic growth for the region, and for an extended period of time.

Currently 18 reconstruction projects are underway with design and/or building. And during the Spring and Summer months of 2021, eight additional military construction projects are expected to be awarded.

With a new President in office, the budget for DoD is uncertain, but a conservative scenario has it rising by approximately the rate of inflation.

Under that scenario, the economy of the greater Ridgecrest area would remain predictable and with steady growth.

Furthermore, additional outlays directly allocated for China Lake earthquake recovery will actually provide a meaningful boost to the economy for at least the next 3 to 5 years.

Congress usually revises presidential budget submissions substantially before passing them into law. Consequently, actual DoD numbers for the future will be revised between now and the end of the year.

Story First Published: 2021-03-12