Tracy is Where Manufacturing Thrives
8 Mar 2022
Tracy, CA is a community that has developed a manufacturing hub due to its culture of innovation, skilled workforce, strategic location and business-friendly environment. These advantages have attracted manufacturing companies seeking a Northern California presence, forming a vibrant industry cluster. Unique industry leaders in biotech, clean tech, and agri-production chose Tracy as its home. They include Medline Industries, Taylor Farms, Leprino Foods and American Glass Products (Tesla’s glass supplier). A list of other manufacturers includes Barbosa Cabinets, Lynx Enterprises, GlassFab Tempering, and International Paper, among many others. These companies benefit from the strong support ecosystem for manufacturing operation that has emerged in Tracy.
The success story of Central Plastics demonstrates why Tracy has excelled in the cultivation of advanced manufacturing uses. It located in Tracy after acquiring an existing business in Sonora in 2013. With specialization in custom plastics injection molding and thermoforming packaging solutions, Central Plastics quickly outgrew its original 30,000 square foot facility and conducted an extensive search for the best location that would allow for continued long-term growth. CEO Hiren Patel chose to stay in Tracy and invested $10 million in a new 60,000 square-foot facility where current operations and expanded equipment lines were moved in 2021.
“There are a few major injection molding companies based in the Bay Area, but it has become very challenging for newer companies to be competitive due to the extremely expensive cost of real estate, labor and other operating costs there,” said Patel. “Tracy offers many advantages we believe will help us be successful.”
Since 2020 alone, Central Plastics has grown from 20 employees to 60 employees and doubled revenue during that time period. It plans to triple the number in 2022 and is looking to hire more workers due to its success. Tracy’s recent attraction of Energy Recovery, Inc. from San Leandro is another example of a growing business taking a similar site selection path. Energy Recovery, Inc. is a global leader in pressure energy technology and cutting-edge water purification solutions. It recognized Tracy’s advantage in labor force attraction with two million workers living within a one-hour commute shed.
In addition to land availability, flexibility of the build to suit development process, and affordable operating costs in Tracy, Patel credits Tracy’s central location as the most notable advantage.
“We are close enough to the Bay Area where customers can still access us quickly via a short drive instead of a lengthy flight,” he said. “In addition, Tracy is an established town with a diverse community and excellent workforce available to us.”
The City’s economic development tagline, “Think Inside the Triangle” is built on the premise that it is encompassed by three major interstates – I-580, I-205 and I-5 – in the San Joaquin Valley, which provide quick access to all of the Northern California mega-region’s markets. The region’s airports, maritime ports and rail also provide access to global customers. Major metros of San Francisco and Oakland, the Silicon Valley, Sacramento, and San Joaquin Valley cities of Stockton and Modesto are all within a short commute of attraction of innovation, labor and venture capital. With the global shift towards supply chain efficiencies and reliability, Tracy is centrally positioned for importing critical supplies and exporting manufactured goods to end users.
Another advantage Tracy offers manufacturing companies is access to a skilled and rapidly growing workforce. Tracy employers draw from more than two million workers in a 60-minute drive radius. South San Joaquin county has experienced one of the fastest growth rates in housing in recent years within the State, rapidly adding a diverse range of housing for the growing labor force. Despite the housing shortage in the coastal areas of the State, Tracy has experienced population growth of nearly 70 percent since 2000.
An ecosystem of regional educational institutions offer vocational and academic training to fit the needs of current and evolving manufacturer needs. For example, San Joaquin Delta College in nearby Mountain House offers applicable certificates, degrees, and technical training, while the San Joaquin County Employment and Economic Development Department provides employment training, on-the-job training, recruitment services, and other resources.
California is ranked as one of the top manufacturing destinations in the country. At the State level, California Industrial Development Bonds provide low interest, tax-exempt, long-term financing of up to $10 million for the acquisition, construction, rehabilitation and equipping of manufacturing, production and processing facilities for private companies. The California Manufacturing Research & Development Equipment Exemption offers partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases to qualifying manufacturers.
Regionally, support exists with programs like San Joaquin County’s Revolving Loan Fund (RLF) and workforce training through WorkNet. The RLF offers reasonable term loans ranging from $25K to $1M to new and existing companies in San Joaquin County for property acquisition, machinery, equipment and working capital.
The City of Tracy follows suit with business incentives like the Grow Tracy Fund Program, applicable for working capital, machinery, equipment, acquisition of land or buildings, construction, renovations and tenant improvements. A number of other incentives are also available for employers relocating their manufacturing operation to Tracy. More information on this and other local incentives can be found on the City’s website.