O’Neil talks China Lake recovery, East Kern economics

Sep. 11--Scott O'Neil, executive director of the Indian Wells Valley Economic Development Corporation, drove home several points before the Kern County Board of Supervisors on Tuesday, with one overarching theme: the county's economy can benefit from East Kern's growth, especially with Naval Air Weapons Station China Lake.

"Today Kern County is uniquely postured for huge growth," O'Neil said. "We have a large arsenal of key resources to build off. Some are key natural resources with technology now available to exploit them."

O'Neil presented an update to the board regarding the economic potentials in East Kern and asked for support in China Lake's reconstruction efforts in the wake of the July 4 and 5 earthquakes.

Today, as in the past, oil and agriculture are the engines of our economy, but it is time to take note of the growth in Eastern Kern," he said. "Aerospace at Edwards Air Force Base, NASA Armstrong and China Lake are growing fast, as is the commercial space access at Mojave Air and Space Port and the neophyte air industry in Tehachapi."

He noted that East Kern is home to an abundance of renewable energy potential, including solar, wind and geothermal sources being used to generate electricity.

"With these types of assets, I have to ask if we are valuing them properly," O'Neil said. "A quick environmental scan makes me wonder."

He noted the instability in today's world stage makes the aerospace industry and projects at China Lake and Edwards extremely important and positions them for serious growth.

Likewise, California's goal to phasing out oil and natural gas in favor of alternative energy "creates a huge opportunity do develop our wind, solar and geothermal resources." He added the deregulation of the energy industry allows for opportunities to market that energy in new ways.

"California is changing the oil industry and water is challenging agriculture," he said. "We need to recognize these drivers and take active steps to use all the assets we have to create increased value."

He noted Kern County is fortunate and unique in that it has more assets in its borders compared to many U.S. states.

"We need to encourage growth across the county, especially in the emerging elements of our economic base," he said. "The aerospace and renewable energy industries move in different economic cycles than oil and agriculture. Integrating the county's economy west to east will provide a hedge against the ups and downs of individual industries."

He added that the July 4 and 5 earthquakes that rattled Ridgecrest, the Indian Wells and Searles valleys and China Lake present unique opportunities -- and risks.

"The damage on the Navy base is significant," O'Neil said.

According to O'Neil, the Navy estimates it will take $4.1 billion in reconstruction costs to rebuild China Lake's infrastructure and facilities.

"That's almost the cost of an aircraft carrier," O'Neil said. "Construction teams are already descending on China Lake to begin repairs and more will be required for construction in the future."

He encouraged Kern County contractors to watch the website fedbizops.gov (or www.fbo.gov) for such opportunities.

He noted the $4.1 billion investment in China Lake will be huge for Kern County considering the amount of business it conducts.

He noted last year, China Lake did $1.8 billion in new orders based on a fee-for-business model similar to most private-sector corporations. He said those orders have been growing at a pace of at least $100 million per year.

In other words, aside from not being allowed to generate profit or loss, several programs aboard China Lake, including those under NAWCWD, seek out and contract with paying customers.

"It also means that we have to compete with other government facilities for work," O'Neil said. "Unlike other most other government agencies, China Lake does not get an annual budget allowance from Congress. It has to get its work from paying customers."

He noted those projects include the various weapons programs Congress authorizes and funds, such as the Tomahawk Cruise Missile, the F-18 development and F-35 Joint Strike Fighter program.

"Like private businesses, China Lake is only as good as its last job," O'Neil said. "Customers can choose to go elsewhere if China Lake does not perform satisfactorily."

He added the payroll for approximately 4,500 civilian employees tops $600 million a year that stays in the county. Another $1 billion is contracted out annually, of which $200 million stays in the county. Small purchases (or use of credit cards) is $28 million annually, of which $3 million is spent in Kern County.

"China Lake is a big part of our economic base and about 85% of the economic base of Ridgecrest," O'Neil said. "It could be bigger for the county."

He noted that the opportunity of a $4.1 billion risk aside, China Lake could potentially lose some customers to other facilities due to the earthquake damage it sustained.

He said the reason could be for concern that China Lake cannot do the work or that other government agencies are poised to poach the installation's work.

"China Lake is important to the county and I think the importance is growing but is it important enough for the Navy to keep?" he asked. "It's a scary question, but as a taxpayer, it's a fair one. I say the answer is a hard yes."

He drove home that Kern County cannot rest on its laurels and wait to see what happens -- it has to be vigilant and active and drive the outcome.

He noted that China Lake's assets are unique: 1.1 million acres spread across two ranges of mountains and deserts suitable for weapons systems testing and 19,600 square miles of air space for military activity.

"The complex is an irreplaceable and realistic place that is integrated with the nearby oceans, islands and coastal and sea influences," O'Neil said. "With this, China Lake offers over 300 days of sun for weapons system testing. Its settings duplicate settings and conditions located in the most likely and prominent theaters of operation around the world."

He noted China Lake in conjunction with Boeing produces all the software operations for the F-18 and is likely to perform the same thing with the F-35, the Navy's next mainstay in its air fleet.

"It must be able to work and fight with the F-18," he said. He added China Lake programs develop new weapons systems concepts and work with industry to bring those concepts into the Navy fleet. China Lake is responsible for testing the systems to ensure they work effectively and safely for the warfighter.

"China Lake exhibits a strong military-civilian team where the military brings the information of what they need to be more effective and the civilians are trained in science and engineering to bring the technical knowhow," he said.

He shot off a list of projects: the Sidewinder missile, the Wall-Eye bomb, the Tomahawk Cruise missile, just to name a few.

"The earthquakes damaged China Lake but it did not destroy it," he said. "It is open for business but not at full capacity. The test ranges were damaged but at a mere six weeks after, base engineers and technicians scrambled to patch together systems and safely conducted its first live-fire missile test (since the earthquakes)."

He noted China Lake has a can-do culture and is looking for partners to get work done.

He said the main machine workshop was red-tagged and crews are working to shore up the shop's walls to remove the machinery.

"They're at about 40% capacity, so we are trying to arrange between China Lake machine shop leaders and local shops in Bakersfield with the goal to get China Lake work done," O'Neil said.

He said one meeting has been conducted and another one is scheduled with that goal, as well as to build an understanding of the base's mission.

"I'm confident that Kern County businesses will rally to help China Lake's recovery," O'Neil said. "It's good for the county, it's good for the Lake and it's good for business."

O'Neil asked the board to send letters of support to the Secretary of the Navy, Secretary of Defense, the Chief of Naval Operations, Gov. Gavin Newsom, Sens. Diane Feinstein and Kamala Harris, and Congressman Kevin McCarthy urging them to make China Lake whole.

He also asked a commission to visit East Kern, including Mojave, Ridgecrest and Tehachapi to discuss opportunist and actionable goals. He added the board should engage its lobbyists in Sacramento to encourage the reconstruction of China Lake.

Kern County First District Supervisor Gleason echoed the need to connect East Kern with Bakersfield.

"If anyone in Bakersfield were to see Mr. O'Neil walking down the street in Bakersfield, you wouldn't recognize him or understand who he was," Gleason said. He noted he was in a similar situation when he first ran for supervisor ins 2012 -- he didn't know the important figures in the Central Valley.

"There is a dichotomy at work here where we don't truly understand the value of Kern County and haven't for a long time," Gleason said. "We need to change that paradigm and create a world where Kern County can optimize all of its resources and its advantages to the best interests of Kern County."

He said in the past the board has taken "weak stabs in the dark" but never fully seized on the opportunity.

"The earthquakes in Ridgecrest have now changed Kern County, China Lake and East Kern," Gleason said. "It has given us an opportunity that demands an answer."

He noted the damage to China Lake is considered an unbudgeted expense that Navy officials in Washington, D.C. will need to figure out how to allocate it.

"It is a scary time right now and for us to sit back on our haunches and not take aggressive action to pursue those dollars is a waste of opportunity for all of Kern County," he said.

Gleason added the county hasn't been proactive in cashing in on the formation of President Donald Trump's Space Force initiative, as it ties in with the industry in Mojave.

He added the county could benefit advocating for projects of the F-35 aircraft, noting "the Department of Defense is pouring its entire future into it."

"Kern County can play a massive role in the sustainment of that aircraft for another 30 to 40 years by doing the same thing we've done as the F-18," Gleason said. "I would mean a tremendous amount of resources and jobs coming to Kern County... there are a lot of opportunities sitting before us."

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