Southern California Logistics Airport

High Desert logistics hub pushes on
The San Bernardino (CA) Sun

Dougall Agan faces an uphill battle. With consumer spending and imports plummeting, Agan’s gargantuan Global Access project in Victorville is fighting a recession that some economists say will change consumer habits as we know them.

But Agan and his business partners are pressing onward, and he says he’s as optimistic as ever that the Southern California Logistics Airport is poised
for success when the economy rebounds.

The co-principal of Foothill Ranch-based Stirling Enterprises LLC, one of the joint venture master-development partners behind the project, says the
grand plans haven’t changed.

“We’re less concerned about this blip of recessionary time,” Agan said. “Our strategy is to create the nation’s largest and most successful logistics
fulfillment.

“You could look at it as America’s fully-integrated port. Our region is already America’s port, but America’s port needs to expand.”

Conceptual designs show the airport as a logistics magnet where trucks, planes and trains can meet and switch cargo, and where multi-million-dollar
aircraft are maintained and thousands of pallets of consumer goods are stored every week before shipment.

Air cargo has dropped about 25 percent at the airport compared to one year ago, estimated Jim Worsham, an aviation consultant for Southern California
Logistics Airport.

“It’s probably going to be more than that. I don’t believe we’ve hit bottom yet,” said Worsham, who was president of Douglas Aircraft Co. in Long Beach
in the 1980s. “This recession we have is a bear.”

About 60 percent of flights into the airport are U.S. military-related. The balance is foreign and domestic commercial cargo flights.

“We’re trying to build up our commercial cargo flights at a bad time,” Worsham said. “When you have a recession, international cargo is the first
to go.”

Recession or not, Agan still envisions 60 million square feet of commercial building space for the airport – an infrastructure and facilities investment
worth $3 billion when finished and which could be responsible for creating up to 43,000 jobs.

Nearly 3 million square feet have been constructed.

Reaching that milestone could take several years, especially when March Air Reserve Base, San Bernardino International Airport and LA/Ontario
International Airport are all competing for slices of the massive tonnage in air cargo experts predict will need to enter and leave the region over the
coming decades.

In the meantime, certain projects are moving full steam ahead.

On the heels of other industrial buildings under construction and companies moving in, a 1-million-square-foot edifice is slated for completion in early
May.

“We have several (tenant) prospects in negotiations,” Agan said about the building.

Construction also has started on an 850,000-square-foot beverage bottling plant for Dr Pepper Snapple Group Inc.

That’s on top of the airport’s claim to fame – a 15,000-foot runway which came online in 2003.

Also in the mix is a railroad line complex.

Only a connector rail line has been built between the airport and the transcontinental line used by the railroads.

But Stirling’s plans allow for a 1.5-million-per-year container lift capacity operation at the rail sector of the airport. One “lift” is when a
huge cargo container is transferred from a truck to rail or vice versa.

Agan is also watching what happens with the High Desert Corridor, a proposed 50-mile stretch of highway between Palmdale and Highway 395.

If the corridor is ever built, trucks would transport foreign imports from L.A./Palmdale Regional Airport to Southern California Logistics, which has a
customs office and would serve as an “inland port.”

But to kick off the entire project, funding is needed for a 4-mile highway between the airport and the 15 Freeway – and investment capital is hard to
come by these days.

Since the airport’s development is a public-private partnership between Victorville and Stirling, Agan hopes that either California infrastructure
bonds, federal stimulus monies, private investment or a combination of the three can be used to make the High Desert Corridor a reality.

On the air cargo front, a second meeting with trade representatives from Indonesia took place last week, Worsham said. He wouldn’t comment on the
details but said it was connected to direct cargo flights from that country to the airport.

“We’re furthest along with Indonesia and the Philippines,” Worsham said, declining to elaborate.

Only time will tell whether Global Access will become America’s gateway cargo port when the Inland Empire’s economy recovers.

Similar logistics-airport hub projects are gaining attention in Texas, Alabama, Ohio and Tennessee, said John Kasarda, director of the Kenan
Institute of Private Enterprise at the University of North Carolina’s Kenan-Flagler Business School. Kasarda has studied the Inland Empire’s cargo
airport landscape.

Nonetheless, Worsham said he feels the High Desert airport will eventually be a success.

“These types of facilities will be more important in the future,” he said. “The real problem is, they’re ahead of their time. It’s taking the corporate
world time to adjust to the new (cargo shipping) realities.

“That can sometimes take decades, not years.”

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