Merced, a Central Valley microcosm


Commercial Property Manager, NAI Benchmark

Economic trends throughout the Central Valley are on an upward swing, and the region appears to be following California on the slow yet steady path to recovery.

This good news couldn’t have come soon enough for many Californians, especially those who reside in some of the worst-hit markets, like the city of Merced. It is the resolve and vision of these cities, entrepreneurs and organizations that are not only trying to recapture the  pre-recession economy but build upon the resources that have made California great.

Market-unique variables play a vital role in any region’s economy’s recovery. Those factors, if leveraged correctly, can contribute to success and growth. While Merced has an approximate unemployment rate of 13.5 percent, according to California’s Employment Development Department, the city is investing in the future with the 2020 Project.

The project is an endeavor aimed at significantly expanding the physical size, enrollment and scope of the already impressive UC Merced. With 6,200 students currently enrolled, the 2020 Project plans to increase that to 10,000 in the near future and eventually enroll 25,000 students. In order to accommodate such a drastic increase in enrollment, the university plans to add upwards of 1.85 million gross square feet of facilities, as well as a supplemental 219-acre site.

With such a dramatic change in size and scope, the university will also increase its off-campus back office capacity by purchasing or leasing office space in downtown Merced. Although it hasn’t fully recovered from the Great Recession, the downtown area still presents a unique allure to many businesses and organizations.

UC Merced Chancellor Dorothy Leland is one of many who advocate its potential and told the Modesto Bee the university has the opportunity to contribute to the growth and success of small businesses in the area.

“These developments represent a significant campus commitment to downtown Merced. We believe in its growth, vitality and its future role in the development of the campus,” Leland said to the Bee. “The new administrative building and technology hub expand our connection with the community and will be an economic driver for the area as the campus moves toward having 10,000 students by 2020.”

The university purchased nearly an acre of land at 18th and N streets for $630,000 to house staff that does not necessarily require direct contact with students. University officials hope a more central location dedicated to department-specific goals will help to increase efficiency and teamwork.

That is also the thinking behind the college’s goals in establishing a central hub for business development and entrepreneurialism. The university has leased office space at the Parcade Building at 18th and M streets. (For more on that project, see the story on page 25.)

The 2020 project looks to spearhead local economic growth that may already be well under way. Falling unemployment and underemployment rates indicate a positive shift, which is great news for the 15,000 or so unemployed residents of Merced.

Even better news is on the horizon for the city, as retail giant Wal-Mart has chosen Merced for its newest distribution center, which is expected to span 1.2 million square feet and eventually employ approximately 1,200 people. City officials are confident the center will help spur further growth, and help reduce Merced County’s unemployment by one percentage point.

From the employment of city residents to the possibility of attracting the interest of other corporations, the Wal-Mart distribution center adds to the notion that Merced is not only on the upswing, but may in fact be on its way to a prosperous and successful future.

Though still recovering from the effects of the latest economic downturn, there is no doubt that the city of Merced is on its way to recovery. Like most agriculture-based economies, this recovery can be slow and difficult at times, as we see most Central Valley markets lag behind national averages. However, it the region’s resolve and unique resources that will see it become the robust economy it once was.

Through the determination of our people, vision of our entrepreneurs and support of local organizations, cities like Merced will no doubt recapture their former success and grow to become even stronger.The 2020 Project at UC Merced is a microcosm of California, embodying the spirit of growth and investment into our future. Its inception has laid the groundwork for what is to become the starting point of a recovered economy and a new Merced.

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