Biz Walk uncovers manufacturing boom
I have to admit, it’s getting better
A little better all the time
Falsetto: It can’t get any worse
— The Beatles
The fourth annual El Dorado Hills Chamber of Commerce Business Walk put chamber members and elected officials on the streets once more — clipboards in hand, geeky convention badges around our necks flipped the wrong way so that our names faced our chests — taking the pulse of the local business community.
Despite our appearance, local businesses welcomed us and shared their progress in the current sputtering recovery.
This year the investment of time and shoe leather was more than an exercise in hands-on listening. Struggling local businesses were identified for crisis intervention by the chamber and the county office of Economic Development. Members of the Sacramento Small Business Development Center were also on hand to provide on-the-fly life support during the walk.
District 2 Supervisor Ray Nutting walked the walk and stumbled on the El Dorado Hills Taekwondo Center, which reported needing to move because its mere presence kicked in a $53,000 traffic fee for its landlord.
Nutting got on the phone and set up a meeting with county officials and the landlord to see if the fee could be spread out over the term of the lease.
All told, more than 160 businesses were surveyed. The final results won’t be tabulated until after the triage is complete, but chamber boss Debbie Manning was once again upbeat about the exercise and the El Dorado Hills business climate.
“I don’t want to be a Pollyanna, but from what I saw I’m cautiously optimistic,” she said. “We’re at least where we were last year.”
She suggested that commercial leasing activity provides a good measure of local business activity.
Doug Weile, who oversees Town Center Leasing, reported by phone that large companies are looking at El Dorado Hills. Weile said he’s wrapping up about 13,000 square feet of retail deals, and the El Dorado Hills commercial real estate market is poised to benefit from a rebounding Northern California technology sector based in Silicon Valley, where commercial space has become dear.
“We have a lot to offer,” he said, citing ample high quality office space, a skilled labor supply and a high quality of living.
Weile described the overall Northern California business climate as geographically spotty. “Wherever there is more disposable income, leasing activity is back,” he said. “El Dorado Hills and Folsom aren’t over built. We’re really in a pretty good spot.”
Weile said access to capital has also improved in the last year.
Out in the business park, Bob Davis seconded much of Weile’s upbeat message. Davis founded “Virtual Driver Interactive,” which manufactures computer-based driving simulators,
He relocated his family from Danville for the quality of life in El Dorado Hills in 2004. “I could have started anywhere I wanted,” he said. “We wanted equestrian property and access to technical talent.”
He also found a local banker who supported him. “Greg Patton at Sierra Vista Bank has believed in me from the beginning, and is a big reason I’m here.”
Despite the defunding of driver’s education programs in California, Davis, who ships internationally, said his orders are up.
The business park is zoned for research and development, and is not thought of as a major manufacturing hub because Highway 50 isn’t considered a major transportation corridor. But one Biz Walk team that ventured into the back of the business park discovered several thriving specialty manufacturers, like Davis. Orders were up, as was hiring and not at service sector wages.
“These are good paying jobs,” said Lorie Symon, the controller at Aerometals, which manufactures “better than original equipment” replacement parts for helicopters and airplanes. Many are sold to the military.
During an impromptu facility tour she gestured to a large shop floor and said, “The majority of these guys are journeyman machinists, and I’ve got 15 engineers designing parts.
“We’re having a bang up year,” she continued. “Last year was our best ever and this year should be even better.”
Symon attributed the company’s growth to a combination of good decisions — they added a profitable new line of air filtration components last year — and an industry with profound barriers to entry — it takes two years to get a new part certified — that historically does better in a down economy.
“We make replacement parts,” she explained. “When money is tight you keep your helicopter running rather than buying a new one.” Military and commercial.
“We’ve got people here making $12 an hour but most earn a lot more, some into six figures,” she said. “None have to drive far to work. This place is really very well situated for us.”
Aerometals moved to the business park in 1998, currently employs 123 people and is looking for more. “Know any senior aerospace inspectors?” asked the upbeat executive. “I need one.”
Aerometals expanded a few years back. Symon recalled that the building permits took longer than the building. “That was frustrating and expensive,” she said. Other frustrations have been the problems with their proximity to the Four Seasons active adult community. Several homes have back yards that adjoin one wall of the plant.
“We’ve tried really hard to be a good neighbor, even shutting down our swamp coolers at night, which costs us money,” she said. “Things are much better now, but they didn’t know their back yard butted up to a factory.”
When asked why a residential development was allowed to build right up to an existing factory with virtually no setback, Symon had no answer.
Right down the street from Aerometals, the biz walkers found an example of how industrial and manufacturing companies spawn support businesses. Former Ponderosa High School football star Riki King, who coached at both Oak Ridge and Ponderosa, now manages the local Fastenal store.
Fastenal is a national chain that specializes in fastening itself to local industry, supplying a full line of specialty hardware. His largest client is Folsom State Prison, but also serves DST, Paragon and Aerometals in the business park.
The affable coach, who’s currently in charge of the defensive line and special teams at Sierra College, boasted that sales have grown every month since the store opened in 2009. “If construction ever comes back we’ll be totally crazy in here,” he said.
Paragon Products, which manufactures diesel locomotive fuel pumps, also reported that sales have rebounded after a slow 2010.
“We had some layoffs, but have hired them all back and I need more,” said self-described “company mom” Rhonda Chris, who’s currently looking to hire one more engineer, “the manufacturing kind, not the choo choo kind,” she said with a laugh.
Chris anticipates even more growth when a new product line currently in engineering comes to fruition later this year.
With no local customers, Paragon hums along in relative anonymity, she said.
All the businesses surveyed by this embedded reporter’s team reported good access to their workplace, the result of the county’s investment into Latrobe Road improvements. All cited quality of life as a major reason for being in El Dorado Hills. Proximity to Town Center stores and restaurants also came up repeatedly.
Despite the abundant vacancies in the business park, the walkers were encouraged that specialized manufacturing is alive and well in El Dorado Hills, pumping money into the local economy and providing good paying jobs while the retail and service sectors recover at their own pace.