Business & Real Estate

Bay Area company signs tentative deal that could bring 2,500 jobs to Elk Grove

Google Earth image shows where a 230,000-square-foot factory would be built west of Highway 99 close to where Big Horn would connect to Kammerer Road.
Google Earth image shows where a 230,000-square-foot factory would be built west of Highway 99 close to where Big Horn would connect to Kammerer Road.

Elk Grove, now mostly a bedroom community for Sacramento, could land up to 2,500 jobs under a tentative deal between the city and a Bay Area tech company.

Mayor Gary Davis on Friday confirmed the agreement with NRC Manufacturing, a tiny circuit board maker in Fremont that has big plans for full-scale manufacturing. NRC would move into a 230,000-square-foot facility to be built on Elk Grove’s southern edge.

The manufacturing facility would anchor Elk Grove’s Southeast Policy Area, the last large-scale development area in the city, and one where leaders hope to create 25,000 jobs. The 1,200-acre site is bounded by Highway 99 to the east, Kammerer Road to the south and Whitelock Parkway to the north. A half-built shopping center sits nearby – now earmarked to become an outlet mall.

Davis characterized the deal as “a game changer for Elk Grove” but emphasized that it still needs to be finalized.

“We have a letter of intent signed by the city of Elk Grove, NRC and the landowner. At this point, the plan is to have the first phase of the facility open in June 2017,” Davis said in a phone interview. He said the parties expect to finalize the agreement over the next few months.

The plan outlined Friday by Elk Grove calls for construction of manufacturing facilities, offices and parking, with the project’s first phase comprising 50,000 square feet and employing about 620 full-time workers. Officials estimated that the entire project could be built out over five years.

NRC currently runs a small operation in Fremont, with 12,000 square feet and about 20 employees. It does contract work for Apple and some other tech companies, Davis said.

It was founded in October 2008 by Cambodia native Ratha Chea, former owner of San Jose-based Orion Manufacturing, which was purchased by CTS Corp. of Indiana in March 2008 in what was reported as a $10 million cash deal. According to various financial reports, NRC itself was acquired for an undisclosed amount in mid-2010 by another Fremont tech firm, Alta Manufacturing, an electronics contract manufacturer.

Elk Grove described NRC as a prototype manufacturer of electronic components used inside consumer and business telecommunications, defense and consumer electronics devices, with components also used in the medical and biotechnology sectors.

In an email, Elk Grove spokeswoman Kristyn Nelson said NRC handles “all things tech – from phones, computers and other tech products.” She said NRC clients, according to Chea, include ABB Group, a Swiss multinational corporation specializing in robotics and power/automation technologies, and Ferrotec USA Corp., a diversified technology company with offices in the Bay Area.

Davis said NRC is anxious to ramp up to full-scale manufacturing, while simultaneously settling into a site with lower business costs than those in the Bay Area.

“I guess they were impressed, because they decided to pull the trigger and move forward with us on moving a facility to Elk Grove,” Davis said. “The idea is that they could have business development and sales office in the Silicon Valley and just kind of come over the hill to their manufacturing facility.”

Nelson did not have the name of the current property owner but said development company Kamilos Cos. of Gold River – a party to the deal – has a purchase option to develop the potential future NRC site.

Chea could not be reached for an interview Friday, and a statement released by the company didn’t specify what it would produce in Elk Grove, or for whom.

In the statement, Chea said: “We considered offshoring this project, but we determined quickly that Elk Grove met all of our search criteria while keeping us in close proximity to our Silicon Valley headquarters. The city went out of its way to help us put this project together.”

Barry Broome, president and CEO of the Greater Sacramento Area Economic Council, said the path to Friday’s announcement started last October, when local officials became aware of NRC’s search for a bigger, less-expensive property.

In November, Broome said he toured the NRC facility, “and they asked us about Elk Grove.”

Broome stressed that NRC was specific about Elk Grove from the beginning, noting the presence of Apple’s nearby campus on Laguna Boulevard. Apple had declined to divulge what it’s doing in Elk Grove, or whether it is adding workers, but the company has clearly been in expansion mode.

State records show that the Elk Grove campus has become a major repair center for iPhones, with the work actually being done by subcontractor Pegatron Technology Services Inc. rather than Apple itself. The company filed paperwork with the city last fall to add 1,400 parking spaces in Elk Grove.

Broome cited Apple’s presence as a factor in NRC’s decision to come to the city, saying, “This is what happens when you start getting momentum.”

He added in a statement: “Attracting a Bay Area manufacturer to Elk Grove sends a strong signal to the market that doing business in the greater Sacramento region makes sense for Silicon Valley and allows organizations like NRC Manufacturing to achieve their full potential through lower costs, proximity to the Bay Area and a young, highly educated workforce.”

Broome also praised Elk Grove’s efforts: “Elk Grove is a very well-run city from an economic development perspective. This is kind of a good example of outreach and coordination … Elk Grove has a reputation for getting things done.”

Mark Glover: 916-321-1184, @markhglover