CALIFORNIA CITY BOOMING HYUNDAI PROPOSAL PUTS TOWN ON FAST TRACK.

Byline: Jim Skeen Staff Writer

CALIFORNIA CITY - The selection of California City over such locales as Riverside and San Diego for the site of a future Hyundai car test track is the biggest sign that the small city's economic fortunes have changed for the better.

After a bleak period during the 1990s, the city of 11,400 is seeing its economic development picture brighten considerably. In addition to the Hyundai test track, negotiations are going on to bring in a supermarket; an industrial park is beginning to emerge at the city's airport; and developers are working hotel and housing projects.

City Manager Jack Stewart said there are three reasons for the city's reversal of economic fortunes.

``First, the city is in a position, with land, clear air, water and sewer, to attract business,'' Stewart said. ``Second, our City Council is pro-business. All of them have had to make a payroll at least once in their lives. Third, the growth of the Antelope Valley is coming north.''

The situation is a far cry from the city's stagnation of the mid-1990s, the result of the nationwide recession and internal bickering, including a feud between then-City Manager Steve West and former police chief and one-time councilman Paul Ingram.

During that time, a parcel tax that was a major portion of the city budget lapsed and an untrusting public refused attempts to reinstate it.

The city's fortunes began to change in 1998. Corrections Corporation of America began construction of its private prison, Rite Aid built a store in the community, and the public, after four previously attempts, approved a new parcel tax to fund government operations.

``The parcel tax and the prison - that was the rebirth of Cal City,'' Stewart said.

In January 1999, Stewart was brought in as city manager.

David Myers, executive director of the Greater Antelope Valley Economic Alliance, attributes California City's recent economic growth spurt to two factors - the first was the construction of the private prison, which brought in more than 500 jobs and caught the eye of other developers.

The second factor is leadership.

``Mayor Larry Adams and the rest of the City Council said let's stop the fun and games and deal with our financial problems. They also brought in a city manager who could get development deals done,'' Myers said.

The biggest item on the city's economic plate is a proposed $50 million car test track. The city is negotiating with Hyundai America Technical Center to establish a 7.5-square-mile facility that would include a six-mile oval track, a Grand Prix-style road course, a one-mile straightaway and a 24,000-square-foot test facility.

The test facility would employ about 50 workers. It would be used to test the South Korean company's new car models to see if they meet U.S. automotive standards and to test preproduction models.

The deal is expected to include a commitment by the city to extend sewer and water lines to the project. The cost to extend those lines will be between $800,000 to $1 million.

The city expects to recoup those costs through increased property tax revenues stemming from the rise in the value of the property.

One of the major projects in the works is a retail project anchored by what would be the city's first supermarket. The city is working with KZ Holdings, an Irvine developer, to bring in a supermarket on 8.2 acres at the southwest corner of California City Boulevard and Village Parkway.

The city will sell the property to KZ Holdings for $358,000 with the condition the developer lands a major supermarket.

The developer is also planning to build a gas station and 30,000 square feet of additional retail space. The total project is estimated to cost about $8 million.

The project is expected to create 75 jobs and provide an annual revenue of $80,000 to the city's redevelopment agency.

The city hopes to see a deal completed this summer.

The city is also working with developer George Atkinson to build two industrial buildings, one covering 20,000 square feet and the other 30,000 square feet. The $5.5 million project is being built on spec, meaning the buildings will go up first and then the developer will try to find tenants later.

Other projects in the works include the city's efforts to develop a 40-acre industrial park at the airport, a project to turn the defunct Lakeshore Inn hotel into a senior housing project, a proposed 120-home housing project next to the city's golf course, and a hotel project.

There is still much on the city's wish list, said Kari Tapia, who assists Stewart with economic development projects. City officials are working to try to bring in a medical clinic, a movie theater, more restaurants, clothing and video stores.

The supermarket project is expected to draw in more businesses. There are five other retailers interested in coming to the city, Tapia said.

The city is also working to help existing businesses expand through what officials call ``economic gardening.'' The city is assisting businesses through data collection on potential customers, suppliers and other contacts.

For example, the city assisted the Silver Saddle spa by proving a marketing list of travel planners and retreat coordinators throughout California.

The city is also trying to reshape its boundaries in anticipation of future growth of east Kern County. The city wants to add 27 square miles of developable land and drop the same number of acres in an area that would be problematic for development because of state protections for the desert tortoise and a ground squirrel species.

The annexation plan involves adding 27 square miles located west of California City Boulevard and between the existing city boundaries and the Mojave-Barstow Highway. Officials plan to drop 27 square miles of uninhabited desert at the far-flung city's northern and eastern edges.

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Kari Tapia, California City's economic development manager, says retailers are interested in locating in the immediate area.

Jim Skeen/Daily News