North Highlands has coped with McClellan's civilian shift

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In 1995, when the U.S. military announced it would close McClellan Air Force Base in unincorporated Sacramento County, residents and small-business owners in the surrounding community were terrified that the local economy would crash and burn.

McClellan neighbors the North Highlands community, a largely disadvantaged area. Residents believed their community could ill-afford losing jobs.

"There was a panic mode that set in to the community," said Jim Simpson, a North Highlands resident who owns a local window-tinting business. "I kept waiting to see a major drop in business. Never happened."

Instead, by the time the Air Force officially handed over the keys in April 2001, the transition from McClellan Air Force Base to McClellan Park had become almost seamless.

Today, eight years after Sacramento County and private partners took over the 3,000-acre site, McClellan Park is a growing business enclave with a diverse mix of companies, most of which have weathered the economic downturn.

"McClellan is part of a national story about the reuse of former military installations and what they're doing to help local economies. McClellan is a bright star in that picture," said Michael Houlemard Jr., president of the Association of Defense Communities, a national group that works with neighborhoods surrounding military bases.

McClellan's success makes it an anchor for North Highlands, a key neighborhood county officials hope to revitalize.

"I think McClellan plays a very important part in the county's overall economic recovery and even more broadly than that in the region," said Supervisor Roger Dickinson, whose district includes McClellan and the North Highlands community. "I think McClellan is a huge success story. It's a story I'm not sure most Sacramentans are aware of."

A quick rebound

Unlike its experience with Mather Air Force Base, which was part of the 1988 round of military base closures, the county had an opportunity to open a transition office on McClellan before the official transfer, said Rob Leonard, county economic development director. Advanced planning and preparation allowed the county to begin leasing out business sites early.

The base has about 8.5 million square feet of leasable space, of which about 6.2 million square feet are currently rented, said Larry Kelley, president of McClellan Park, the company selected to buy and redevelop the property. (That figure includes the 650,000 square feet of space OptiSolar still pays for despite closing shop during this recession.)

The park has created about 15,000 jobs, Kelley said. McClellan projects it could someday have 16 million square feet of space and about 35,000 workers.

"It's a whole ZIP code," Kelley said.

McClellan has benefited from choice location, he said. The park is just miles from the state Capitol, next to four highway interchanges, and features two railroad options and its own airfield.

"We're able to offer a lot ... to a variety of tenants," Kelley said.

McClellan has been hit by the current economic slide, evidenced by the closing of OptiSolar, but not as hard as the rest of the county, Dickinson said. McClellan is still lining up new tenants.

"We have turned McClellan into a very desirable destination for business and government tenants and I don't think that's going to change," he said.

Economic hope

McClellan's success is important for an area historically one of the region's more economically depressed.

In 1989, before McClellan's announced closure, the median household income in North Highlands was $27,025, compared to $32,297 countywide, according to the 1990 census. Adjusting for inflation, North Highlands' median income dropped about 11 percent a decade later, about the time the base was ramping down military operations. In that same time the county's median income remained flat, according to the 2000 census.

(The North Highlands data in the census are drawn from a small sampling size and have considerable margin for error.)

There is still a sizable income gap between North Highlands and the rest of the county. But the gap hasn't gotten worse since 2000.

The median household income for North Highlands was about $43,000 from 2006 to 2008, according to the Census Bureau's most recent inflation-adjusted, three-year average. That's compared with almost $58,000 for the entire county.

Almost 20 percent of North Highlands residents were below the poverty level from 2006 to 2008, compared with about 13 percent countywide, according to the most recent three-year average. That's slightly better than the 23 percent poverty rate documented in 1999 in North Highlands.

Officials and residents said McClellan has done a good job employing area people, although it's unclear how many of the park's 15,000 workers live nearby. The park and county don't track such data. And unlike other military base reuse projects, the county never imposed requirements - or offered incentives - for local hiring.

Walls still exist

The challenge moving forward will be making McClellan more a part of the community, Kelley said.

"Military bases are designed with fences and gates and armed guards to keep people out," Kelley said.

McClellan Park has added landscaping, new signs and fancy entranceways to make itself more inviting.

The park is doing all the right things to reach out to the community, but it will take awhile to change its Air Force base image, said Keith Weber, president of the Antelope-Highlands Chamber of Commerce.

"Have they totally merged with the community? No," Weber said. "The wall is still there. But it's mainly in people's minds."

McClellan isn't the only sign of life in North Highlands.

The county is developing a plan to revitalize Watt Avenue, one of several business corridors officials hope to resuscitate.

The efforts have resulted in the high-profile opening of a Golden Corral restaurant where an adult theater once stood. Shopping centers at Watt and Elkhorn Boulevard have attracted several businesses, such as a Ross Dress for Less department store and a Citi Trends retail store. A new gated community behind the shopping center could attract new residents.

A bustling business park in McClellan could help these developments thrive, Dickinson said.

"There's a considerable linkage between the health and prosperity of North Highlands and the health and prosperity of McClellan," he said.