It’s not a total green light to develop property, but on Dec. 3, the Santa Maria City Council unanimously voted to enable Atlas Copco Mafi-Trench to begin taking steps toward building a new factory in Santa Maria.
The new buildings are slated to go up on a property currently owned by the city. The 20-acre parcel—located north of the Santa Maria Valley Railroad and south of Stowell Road, between Black Road and E Street—was once set aside for a wastewater treatment plant expansion. The city is opting to sell the property instead, but first the parcel needs to be rezoned. Council members voted to change the zoning from public facilities to planned development/general manufacturing during its Dec. 3 meeting.
One of the reasons to use the land for commercial use rather than city use is the property tax revenue it would bring to Santa Maria.
“The Atlas Copco Mafi-Trench project is expected to generate local sales and use tax revenue as well as will also boost the local economy from a domestic project and employment standpoint,” the Santa Maria staff report said. “The land being utilized for a local employer will create more city revenue than if the land was used for a City corporation yard, as originally proposed.”
Atlas Copco currently operates a facility near the airport on Industrial Way and employs about 275 people. General Manager James Riley said he is in the process of hiring 20 more people, and the company is quickly outgrowing the building it’s in.
Atlas Copco is an international corporation doing business in more than 170 countries. The facility in Santa Maria manufactures equipment for the natural gas and geothermal industries.
Riley said business has grown steadily for the Santa Maria branch of the company, especially with the growth of the shale gas industry in the United States over the last decade.
“Suddenly with this shale gas boom, it’s like, ‘wow!’” Riley said. “Now, America is bringing itself out of this recession almost on the shoulders of the shale gas industry.”
While much of the company’s business is still done in overseas markets, Riley predicts future growth in the United States. As more and more projects in this country start to pull massive amounts of gas out of the ground, companies will need plants to process it, and that’s where Atlas Copco comes in. The company makes something called a hydrocarbon expander; it’s equipment that helps process or refine natural gas.
“We would anticipate that they’ll be building that equipment in North Dakota, Pennsylvania, and places like this,” Riley said.
Most of the company’s business—about 75 percent—is currently done in the natural gas industry, but Riley said that wouldn’t be the case forever. The newest segment of operations, geothermal, is gaining a stronger foothold for the company.
But before the company can drum up much more business, Riley said he needs a bigger facility—one that can accommodate more people and bigger equipment.
“Our cranes here can only lift equipment that’s 20 tons, and we’re building equipment that’s 40 tons,” he said. “We’re just kind of continuing to overflow it … the ceiling isn’t tall enough to build the newer technology geothermal machines.”
Tentative development plans for a new facility call for three phases of build-out. How fast it’s built depends on how fast business grows. The first phase—a 160,000 manufacturing space and 50,000 square feet of engineering-design offices—should be finished by 2016.
Riley said Atlas Copco isn’t actually purchasing the land or putting up the facility, but rather has agreed to lease it long term from a company that’s in the process of chatting with the city to buy the land and develop it. Riley said it’s just one of the things Atlas Copco does; the company doesn’t want to own land or building facilities.
It might seem like a strange thing to do, but Larry Appel, director of community development for Santa Maria, said it’s a business decision like anything else.
“It’s a business plan for them. Obviously it’s a successful one; they’re a multibillion dollar company,” Appel said.
Up next is a second reading of the rezoning plan with a staff report. The city also has to authorize the sale of the property. Those items are on the City Council’s Dec. 17 meeting agenda. On Dec. 18, final approval of development plans will go before the Santa Maria Planning Commission.
This article appears in Dec 12-19, 2013.