COALINGA – As Hanford officials consider whether to approve a proposal for a large-scale medical marijuana cultivation and manufacturing business in the Hanford Business Park, Coalinga is already moving forward with the idea.
If you ask Coalinga leaders why, the answer you’re most likely to get hearkens back to the famous Bill Clinton presidential campaign slogan from the 1990s: “It’s the economy, stupid.”
Make the 50-mile drive to Coalinga from Hanford on Highway 198, and you’ll pass through dry Westside farm fields idled by drought and tightening environmental restrictions on water deliveries from Northern California.
As you get into the Coalinga hills, you roll through oil fields dotted with well pumps on both sides of the road.
Some of the distinctive machines are chugging away, moving up and down like playground see-saws. Many others have been shut down.
The impression of a struggling economy continues as you get closer to town.
Before you reach the downtown area, hang a right on West Gale Avenue, and you’ll come to the dilapidated Claremont Custody Center, a former private prison that shut down in 2011 and has been empty ever since.
Dead lawns and falling-apart signs mark the entrance to what officials hoped would be a permanent economic boost to Coalinga when they proudly dedicated the facility in 1991.
Now there’s new life in store for the sprawling, barbed-wire enclosed property – and it’s coming in the form of medical marijuana.
Ocean Grown Extracts, which describes itself as a cannabis concentrates producer on its website, www.oceangrownextracts.com, is buying the facility for $4.1 million.
The website lists locations in Los Angeles, Coalinga and Olympia, Washington.
The business could start up operations in Coalinga as early as January 2017, according to City Manager Marissa Trejo.
To allow Ocean Grown to come in, the Coalinga City Council had to pave the way with a series of votes that made it legal.
The culminating vote came in June when the council voted 4-1 to immediately allow for medical marijuana cultivation and to approve the property sale to Ocean Grown.
The lone holdout was Ron Lander, a longtime barber in the city.
Lander couldn’t be immediately reached for comment.
The council’s action opened the floodgates.
In addition to the Ocean Grown proposal, other medical marijuana cultivation businesses came calling with offers to buy land in the city’s industrial park and build indoor medical marijuana cultivation/processing facilities there.
City Councilman Steve Raine described the council’s decision as a “no-brainer.”
“We don’t really have any businesses that are just wanting to come into Coalinga,” Raine said. “What are we going to do, start designing golf courses?”
Trejo, expressing similar thoughts, cited setbacks in the oil industry.
A few years ago, when oil prices were at near-record highs, the heavy crude under the ground around Coalinga was profitable to extract. Well pumps were cranking up and down like nobody’s business, and there were jobs to be had.
Now that the price of oil has dropped dramatically, many of those positions have disappeared.
“We just had massive layoffs again in the oil fields,” Trejo said. “Those jobs always fluctuate. It’s just not stable. That’s what we need here, something that’s stable.”
Then there’s the economic argument about the 77,000-square-foot Claremont Custody Center.
Trejo said its demise took out 98 full-time jobs, 20 part-time jobs.
The city lost $1 million in annual revenue and was stuck with upkeep costs necessary to keep the buildings in usable condition.
“It was just sitting here waiting to be used,” Raine said.
Measure E, which Coalinga voters will decide on Nov. 8, would require medical marijuana-related businesses that want to locate in the city to pay an annual tax based on square footage.
The formula is $25 per square foot for the first 3,000 square feet and $10 per square foot after that.
Trejo said it's impossible to give an accurate estimate of how much money Ocean Grown will bring in. She said the site plan for how they will use the facility hasn't been submitted yet.
Ocean Grown plans to subdivide the space out to other businesses, each of which would start paying on their square footage footprint at the $25-per-square-foot rate.
"Until we get an idea of everything that's going in, it's hard to put a number on it," Trejo said.
The uncertainty is even greater for the businesses that want to go into the industrial park.
Officials feel they have a better handle on the jobs estimate.
When you add up the impact of all the medical marijuana facilities proposed for Coalinga, the projection is that it could bring the city as many as 500 full-time jobs.
All the growing would be done indoors in temperature-controlled environments, which means the businesses would churn out product regardless of the season.
Economic arguments are also foremost in the mind of Councilman Nathan Vosburg.
Vosburg noted that there was significant community opposition to the council’s move.
But after a series of meetings designed to educate the public about a number of factors – including the expected economic benefits – Vosburg thinks people who personally might not relish the idea have come around.
“I think where we’ve been able to find a medium ground is on the economy,” he said. “People will debate back and forth … but more people are willing to decide we need jobs more than anything else.”
“We had opportunity where we didn’t have opportunity in other areas,” Vosburg said. “We didn’t have a Wal-Mart coming.”
Police Chief Michael Salvador, who’s been in office for a year, was among the early opponents.
When the council voted 5-0 in January to unanimously approve medical marijuana cultivation, deliveries and dispensaries, Salvador, like most other police chiefs in the Valley, asked the council to ban all three.
But once city government sent a clear message to move forward, Salvador says he’s been working on ways to accommodate the medical marijuana operations while also seeking to ensure that they are safe and don’t cause public safety problems.
“The council, they want it here,” Salvador said. “At that point, my personal feelings go away. The commercial [medical marijuana] side is a done deal here.”
Still, Salvador has some misgivings.
For one thing, he thinks the state isn’t ready to regulate the rapidly expanding medical marijuana business.
He said he and other Coalinga officials have spent months trying to figure how to make sure Coalinga is in compliance with state law going forward.
“This industry is taking off like a freight train,” he said.
Salvador has security and crime concerns due to the high cash value of the marijuana.
Salvador said he’s approaching the security situation with the medical marijuana proposals in the same way he would think about security at a casino. He said that similar measures – 24-hour surveillance cameras, alarms, controlled-access doors, background checks for employees – will be required of the medical marijuana businesses coming into Coalinga.
In the case of the Claremont Custody Center, Ocean Grown’s proposal to move into a former prison may have allayed some of the concerns that Salvador and others have raised about security.
All the security measures already in the facility -- observation booths, a centralized camera monitoring post and controlled access doors, among others– can rapidly be converted over to monitoring a medical marijuana growing operation.
Based on that, Salvador said it was tough to argue that the proposal should be rejected on security grounds.
But, like other Coalinga officials, Salvador also brought the discussion back to Coalinga’s lack of jobs.
“I know I’m not going to win that fight,” he said. “The city of Coalinga’s economic condition situation is not the best.”
Trejo said a continuing operating deficit in the city’s general fund is likely to result in police and fire layoffs unless new sources of revenue are identified.
Coalinga voters will decide on Nov. 8 whether to approve Measure E, which would tax medical marijuana businesses based on square footage.
“It forces you to look at the greater good,” Salvador said. “My personal feelings got put away on this issue a long time ago. My job is to make it as a safe as possible, and I think we’ve got a decent formula.”
Trejo stood recently in the city’s industrial park, waving her hand toward vacant properties waiting for some kind of business proposal to bring them to life.
Trejo said medical marijuana operations have made offers to buy virtually every one of the properties, some of which are already in escrow.
“These lots have been vacant forever,” Trejo said.
Vosburg said the city took a chance years ago on bringing in Pleasant Valley State Prison and Coalinga State Hospital.
He doesn’t think that gamble has worked out very well for economic and social well-being of the town.
The general consensus in Coalinga is that, while the prison and the hospital created high-paying jobs, the people who took those jobs didn't live in Coalinga and therefore didn't bring the tax revenue and economic base city officials hoped would materialize.
What's more, when people such as secretaries and janitors who previously lived in Coalinga got jobs in the state facilities, they moved out of town, thereby drying up the occupational talent pool available in Coalinga for non-prison-related work.
Vosburg is hoping the medical marijuana cultivation industry will produce better results.
“Let’s hope this doesn’t turn out to be the same thing as the prisons and prove to be a flop,” he said.
This article is part of a series on marijuana and how it affects Kings County.
• Medicinal cannabis: Helping to treat disease, drug addiction?
• State, federal pot laws remain at odds