Manufacturing

The future of new manufacturing

The Lodi region could very well represent the future of new manufacturing locations. Anyone who has been involved in a site selection process will tell you it’s easy to find locations, but it’s often a challenge to find a profitable location.

From cutting-edge agriculture production to food processing, and from precision manufacturing of optically-clear laboratory consumables to healthcare clinical testing materials, a respectable number of manufacturing companies are seeing Lodi as a place of competitive advantage.

Lodi, as a business location, offers a substantial advantage for a company’s cost of labor, tax burden, transportation costs, utility expenditures, and other major expense categories.

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Public Power Supply

Lodi Electric Utility

Lodi Electric Utility, owned by the city of Lodi, is consistently ranked high in system reliability, service quality and customer satisfaction. From a public policy responsiveness perspective, Lodi Electric delivers on conservation and renewable generation obligations mandated by its regulatory environment at the state and federal levels.

 

100+

years of service

 

26,000

customers

 

131MW

of affordable power

A quarter of Americans are served by publicly-owned utilities responsible only to its customers, not to anonymous shareholders. These publicly-owned utilities are non-profit, directly connected to public policy, and governed locally and democratically.

High performance with lower operating costs

  • Connects services on-time
  • Strives to quickly resolve problems
  • Routinely assesses and maintains its distribution system
  • Offers a “pay-as-you-go” financing approach.

Lodi Electric Utility places high importance on customer programs offering residential and commercial customers customized energy efficiency rebates, discounts, and financing for energy efficiency measures.

 

14mi2

Service territory

 

131MW

Peak demand

 

413GWh

System load

Average energy rate

16.9

¢/kWHh

 

13%↓

Than neighboring utility

Water—A Blend of Quality and Value

Whether it’s to cool machinery or help improve the flow of a manufacturing process, clean and abundant water plays a crucial role in the future of manufacturing. While it’s Lodi’s mission to deliver high quality water, we know it’s vital for both existing and emerging businesses that offered at an affordable price. And that’s just the beginning.

Lodi is fortunate to be owned by the citizens of Lodi. The official regulatory body is the Lodi City Council. Water rates, expansion projects and significant purchases are all made by the city Council.

With excess capacity built into the system, Lodi has areas within its commercial and industrial zones that have water mains large enough to meet the demands of today and your expansion plans for tomorrow. Lodi can deliver water at a lower initial cost, and with lower rates.

System capacity

29MGD

millions of gallons per day

Avg. daily demand

11.7MGD

Peak demand

21MGD

Proximity to raw materials

Because businesses within the food industry form near either a raw material base and/or its proximity to customers, it’s no surprise that Lodi and the Central Valley of California are among the top ten producers of agricultural products in California. In fact, California leads the nation in terms of proximity to product and proximity to market.

Lodi is known for its cultivation of the Zinfandel grape. Second to the production of world-class wines, is Lodi’s production of dairy, almonds, walnuts, tomatoes, and cherries. As a result of its proximity to raw materials, purchases from this industry generated over $616 million in 2018.

Of chief concern is the economic optimization of transporting raw products to manufacturing, and eventually, markets. In 2018, transportation and moving materials, as well as production, rank among the top ten largest occupation groups in the greater Lodi region, and warehousing and merchandising rank in the top five most in-demand job skills.

Access to markets

The location quotient (LQ) reveals which local industries are producing more than is needed for local use and selling outside the region (exporting) and those that are not meeting local needs and are a source of consumption leakage (importing). The Location quotient is also a useful tool for identifying an industry that is concentrated in a region.

Location Quotient in Lodi
  • Agriculture has the highest location quotient in the Lodi region—well over 5.0.
  • Transportation and warehousing follow with an LQ of 2.8.
  • Utilities, wholesale trade, construction, and health care all have location quotients that range from 1.0 to 1.5.
These exporting industries are strong candidates for further development, especially in terms of closely linked local supply networks, local customer networks, common labor markets, and access to technical expertise.

Industries with location quotients less than 1.0 deserve a closer analysis. An LQ of less than 1 indicates the local area is less specialized than the nation. In determining whether an industry represents a strategic advantage, other indicators like number of firms, total number of employees, growth of jobs over time, and sales help identify a region’s important industries.

In the greater Lodi region of San Joaquin County, the location quotient for manufacturing is approximately .8.

However, the manufacturing sector grew 8.3 percent between 2015 and 2019 compared to the 3.7 percent for the nation. Importantly, manufacturing had the second highest regional Gross Regional Product of $ 2.8 billion in 2018.

Labor Supply

San Joaquin County job growth (2013-2018)

As of 2018, the San Joaquin region’s population has increased by 7.1 percent since 2013, growing by 50,030. The population is expected to increase by 4.8 percent between 2018 and 2023, adding 36,237. In 2018, the workforce was comprised of 326,831. In the same year, the number of jobs was 279,286. The number of jobs increased by 17.8 percent in the region from 2013 to 2018 which outpaced the national growth rate by 9.3 percent.

In 2018, most of the regional talent (25,665 workers work in Stockton; at 24,867—the second highest number of workers are in Lodi). These are followed in order by cities Tracy and Manteca.

Most jobs in the region require at least a high school diploma. The second highest level of education required is a bachelor’s degree. The demand for jobs requiring at least a bachelor’s exceeds the supply of population that has attained the level of required education. This statistic reflects the need to import workers from outside the region.

 

17.8%↑

Number of local jobs

 

vs.

 

9.3%↑

Number of national jobs

Taxes and Rents

The Central Valley of California, including the city of Lodi, offers new and existing business an opportunity to avoid Bay Area proposed both new employer and property taxes, to generate $1.5 billion annually which will help create affordable housing in Lodi.

Manufacturing Operating Costs

Project: 50 jobs, 50,000 square feet, $10M land and building value, $30M revenue. Chart displays cost as a % of revenue.

Area Payroll Rent Taxes Total Cost Cost as a % Revenue
Lodi $1.7M $23,000 $102,800 $1.8M 6
Sacramento $1.6M $65,000 $94,900 $1.7M 5.8
San Francisco $2.04M $102,000 $68,300 $2.2M 7.2

Source: Bureau of Labor Statistics Wages by Metro Area 2018; CBRE Industrial Market Overview Q2 2019, www.tax-rates.org

Comparison of Tax Rates

Tax San Joaquin County Sacramento County San Francisco County
Sales Tax 7.75 8.25 8.5
Median Value $318,600 $324,200 $785,000
Property Tax .73% of median .68% of median .55% of median

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