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California's wealthiest farm family plans mega-warehouse complex that would reshape Kern economy

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California's wealthiest farm family plans mega-warehouse complex that would reshape Kern economy

California’s wealthiest farming family is proposing an expansion of industrial warehousing in Kern County that would fundamentally reshape the economy in the southern San Joaquin Valley.

Outside of Kern, Stewart and Lynda Resnick, the billionaire owners of the Wonderful Co., are better known for pomegranates and pistachios. But for more than a decade, they have also owned a master-planned industrial park in the city of Shafter, northwest of Bakersfield, that is home to distribution centers for Fortune 500 companies like Target, Amazon and Walmart.

Now, looking to capitalize on the seismic shift to online shopping, the Resnicks want to position Kern County as a new frontier for the industrial-scale warehousing that is key to connecting customers with their goods. Wonderful is pushing to more than double the size of its industrial park by converting 1,800 acres of its own almond groves into additional warehousing space.

And it’s pursuing costly infrastructure projects that company leaders say will mitigate the impacts of that expansion.

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Wonderful says its vision for a scaled-up Wonderful Industrial Park is wholly different from the thousands of sprawling distribution centers that have swallowed up neighborhoods in California’s Inland Empire. The influx of mega-warehouses in Riverside and San Bernardino counties has generated thousands of jobs — but also relentless truck traffic and poor air quality that have given rise to a backlash.

Wonderful’s industrial park sits along railroad tracks on more than 1,600 acres of former farmland several miles outside the Shafter town center. With the exception of a cluster of homes on the other side of the tracks, the surrounding acreage is primarily agricultural. Wonderful describes the park as a job creator in a region hard hit by economic shifts in agriculture and oil.

Wonderful Co.’s plans for a mega-warehousing complex near Shafter include a new six-lane highway to ease traffic on State Route 43 (pictured) and other area roadways.

(Myung J. Chun / Los Angeles Times)

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The company is working with local officials on plans for a new highway that would route trucks away from central Shafter. It also plans to funnel at least $120 million into an inland rail terminal, expected to be completed next spring. The goal is to move more products from coastal ports by rail to Shafter, reducing traffic on State Route 99, already one of the busiest truck routes in California.

If all goes according to plan, Shafter would be transformed from a small town, population 20,162, into an international trade hub; and Kern County — a region that long has prized what’s extracted from the ground — would become ground zero for the growing global goods movement.

Many Shafter residents say the opportunity for steady, relatively well-paying work in areas other than farming and oil would come as a welcome addition. But some are concerned that doubling-down on an industry that will bring more truck and train travel to one of the nation’s most polluted corridors can’t help but have negative consequences.

“I understand that company says it will bring jobs; this is true to some extent,” said Gustavo Aguirre, assistant director of the Delano-based Center on Race, Poverty & the Environment. “But it is also true that it’s going to bring health and environmental impacts that are going to impact the neighbors who live near the industrial park.”

The way John Guinn tells it, the Wonderful Industrial Park was created out of necessity.

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Several decades ago, as big-box retailers moved into San Joaquin Valley towns, Main Street shoe shops and dry goods stores struggled to survive. Town officials were looking to create employment opportunities.

“The world was changing,” said Guinn, who worked as city manager in Shafter for 17 years. “We had to find a way to do something different.”

So Shafter rezoned a portion of land between Highway 99 and Interstate 5, along the BNSF rail line, and that became the industrial park. The first tenant was Target, which built a warehouse of roughly 2 million square feet in 2003.

In 2011, the Resnicks’ real estate arm bought the development. Guinn retired from the city in 2014 and joined Wonderful as executive vice president and chief operating officer for the real estate team. It’s a role, he said, that will allow him to bring his broader vision for Shafter to light.

Today, the Wonderful Industrial Park typically builds and leases million-square-foot warehouses. Just over half of the 1,625 acres already zoned for industrial buildings have been developed.

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It’s proved a profitable form of diversification for Wonderful — which also owns Fiji Water and Justin Vineyards — at a time when almond prices are falling and water supplies are tight.

According to Wonderful, the industrial park has generated about 10,000 jobs, including warehouse employees, truck drivers and services handling shipping logistics. With the planned expansion, company leaders said, the complex eventually could support 50,000 jobs.

Boxed goods move along a conveyor belt at a warehouse.

Warehouses are quickly becoming more mechanized, meaning more robotics and less need for people. “Warehouses are both job creators and job destroyers,” says UC Riverside’s Ellen Reese.

(Myung J. Chun / Los Angeles Times)

Marco Avendaño, 27, has worked for nearly a year as a forklift operator for CJ Logistics in the industrial park. Avendaño, who didn’t go to college, said he’s learned new skills and now finds himself interested in pursuing a management role with the company.

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“Even though it just started as a job for me, it made me get a career mindset,” he said.

His schedule — 9:30 p.m. to 6 a.m. — works well for him and his fiancee, a librarian, who are raising three children. By his working nights, he said, “we still grow that bond with our family.”

Avendaño previously held two other jobs in the industrial park — at a manufacturing plant that has closed and for a contractor at the Walmart warehouse. In his current job, he said he’s received several raises and is making $22.69 an hour — “more than I’ve ever made hourly.”

As the park expands, the number of jobs created with each warehouse is likely to slow. Warehouses are quickly becoming more mechanized, meaning more robotics and less need for people. The advancements in technology could stymie Wonderful’s job projections.

“Warehouses are both job creators and job destroyers,” said Ellen Reese, co-director of the Inland Empire Labor & Community Center at UC Riverside. She noted that automation is reducing the number of warehouse employees, but not necessarily making jobs safer.

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“A lot of the research actually suggests that more automated warehouses have higher injury rates than less automated warehouses,” she said.

Guinn acknowledged that more efficient warehouses will require less labor. But the remaining jobs, he said, will be more technically skilled and require higher pay.

Inside Walmart’s warehouse, for example, an automated system builds pallets tailored to the needs of individual stores more quickly and accurately than a team of humans could. The facility employs just 400 people across all shifts, many of whom are highly skilled equipment operators trained to troubleshoot technical problems. The average salary is between $28 and $29 an hour.

“I don’t think it’s bad if we’re able to do twice as much with half as much labor,” Guinn said. “What I think is bad is to have a whole lot of folks that don’t have a job, or have jobs that aren’t very good.”

Wonderful says it’s helping ease the transition with an on-site career center that trains workers for the higher-skilled jobs.

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Two men wear VR headsets that simulate forklift operations.

Two men take part in an apprenticeship program at the Wonderful Career Center in Shafter, using VR headsets that simulate forklift operations.

(Myung J. Chun / Los Angeles Times)

On a March morning, Luis Chapa wore virtual reality goggles inside a classroom at the career center and simulated driving a stand-up forklift. He’s training as a maintenance technician and earning on-the-job experience and college credits through a free year-long program.

Before enrolling in the apprenticeship program, Chapa, 37, worked for two and a half years in Bakersfield’s oil industry. The work on a demolition crew was strenuous and dirty, and Chapa, a father of two, said his pay stalled at $26 an hour.

He decided to make a career change and is confident the training will lead to a better-paid position with Wonderful or another company at the industrial park.

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“My cap-off in the oil fields would pretty much be my starting point where I’m heading,” said Chapa.

Along with their farming empire, Stewart and Lynda Resnick are known for their philanthropy, which includes major gifts for climate research, as well as money for scholarships and wellness centers in the valley towns where many of their workers live. So Wonderful is acutely aware of the optics as the company positions the park for a much bigger footprint.

Guinn and others maintain that, with the right planning, the expansion doesn’t have to mirror the trade-offs in the Inland Empire.

The company envisions building the Wonderful Pacific Terminal at the industrial park, so that trains can ferry cargo from California ports directly to the facility. Once built, Guinn estimates that 20% of imported containers could arrive by rail, with each train replacing the equivalent of 240 trucks.

An aerial of Wonderful's building at the company's industrial park in Kern County.

The Wonderful Company, co-owned by billionaires Stewart and Lynda Resnick, says expanding its industrial park in Shafter will generate new jobs in a region shaken by economic shifts in oil and agriculture.

(Myung J. Chun / Los Angeles Times)

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Wonderful is also touting plans for a six-lane highway, the Central Valley Green Pass, that would act as a relief valve for Highway 99.

Both projects are still in the planning phase and in need of multiple approvals.

As another carrot, Wonderful has agreed to create a fund for the local park district if Shafter officials approve the company’s rezoning application. New warehouse tenants would pay 2 cents per square foot per month — or $240,000 annually for a million-square-foot warehouse — into a fund dedicated to enhancing sports programs, arts and crafts and community events.

Aguirre, with the Center on Race, Poverty & the Environment, is helping negotiate a broader community benefits agreement intended to ensure the people who live in and near Shafter get more than jobs out of the deal.

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“The residents recognize that [this project] could bring jobs, but they come with a price,” Aguirre said. “Because of this, they say, ‘What are you going to do for our community?’”

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Startup Varda Space Industries snags former Mattel plant in El Segundo

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Startup Varda Space Industries snags former Mattel plant in El Segundo

In an expansion of its business of processing pharmaceuticals in Earth’s orbit, Varda Space Industries is renting a large El Segundo plant where toy manufacturer Mattel used to design Hot Wheels and Barbie dolls.

The plant in El Segundo’s aerospace corridor will be an extension of Varda Space Industries’ headquarters in a much smaller building on nearby Aviation Boulevard.

Varda will occupy a 205,443-square-foot industrial and office campus at 2031 E. Mariposa Ave., which will give it additional capacity to manufacture spacecraft at scale, the company said.

Originally built in the 1940s as an aircraft facility, the complex has a history as part of aerospace and defense industries that have long shaped the South Bay and is near a host of major defense and space contractors. It is also close to Los Angeles Air Force Base, headquarters to the Space Systems Command.

Workers test AstroForge’s Odin asteroid probe, which was lost in space after launch this year.

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(Varda Space Industries)

Varda is one of a new generation of aerospace startups that have flourished in Southern California and the South Bay over the last several years, particularly in El Segundo, often with ties to SpaceX.

Elon Musk’s company, founded in 2002 in El Segundo, has revolutionized the industry with reusable rockets that have radically lowered the cost of lifting payloads into space. Though it has moved its headquarters to Texas, SpaceX retains large-scale operations in Hawthorne.

Varda co-founder and Chief Executive Will Bruey is a former SpaceX avionics engineer, and the company’s spacecraft are launched on SpaceX’s workhorse Falcon 9 rockets from Vandenberg Space Force Base in Santa Barbara County.

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Varda makes automated labs that look like cylindrical desktop speakers, which it sends into orbit in capsules and satellite platforms it also builds. There, in microgravity, the miniature labs grow molecular crystals that are purer than those produced in Earth’s gravity for use in pharmaceuticals.

It has contracts with drug companies and also the military, which tests technology at hypersonic speeds as the capsules return to Earth.

Its fifth capsule was launched in November and returned to Earth in late January; its next mission is set in the coming weeks. Varda has more than 10 missions scheduled on Falcon 9s through 2028.

For the last several decades, the Mariposa Avenue property served as the research and development center for Mattel Toys. El Segundo has also long been a center for the toy industry as companies like to set up shop in the shadow of Mattel.

The Mattel facility “has always been an exceptional property with a legacy tied to aerospace innovation, and leasing to Varda Space Industries feels like a natural continuation of that story,” said Michael Woods, a partner at GPI Cos., which owns the property.

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“We are proud to support a company that is genuinely pushing the boundaries of what’s possible, and are excited to watch Varda grow and thrive here in El Segundo,” Woods said.

As one of the country’s most active hubs of aerospace and defense innovation, El Segundo has seen its industrial property vacancy fall to 3.4% on demand from space companies, government contractors and technology startups, real estate brokerage CBRE said.

Successful startups often have to leave the neighborhood when they want to expand, real estate broker Bob Haley of CBRE said. The 9-acre Mattel facility was big enough to keep Varda in the city.

Last year, Varda subleased about 55,000 square feet of lab space from alternative protein company Beyond Meat at 888 Douglas St. in El Segundo, which it started moving into in June.

Varda will get the keys to its new building in December and spend four to eight months building production and assembly facilities as it ramps up operations. By the end of next year, it expects to have constructed 10 more spacecraft.

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In the future, Varda could consolidate offices there, given its size. Currently, though, the plan is to retain all properties, creating a campus of three buildings within a mile of one another that are served by the company’s transportation services, Chief Operating Officer Jonathan Barr said.

“We already have Varda-branded shuttles running up and down Aviation Boulevard,” he said.

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How Iran War Is Threatening Global Oil and Gas Supplies

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How Iran War Is Threatening Global Oil and Gas Supplies

Ships near the Strait of Hormuz before and after attacks began

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Note: Times shown are in Iran Standard Time. Some ships in the region transmit false positions and others sometimes stop broadcasting their locations, and may not be reflected in the animation. Ships with sparse location data are shown in a lighter shade. Source: Kpler and Spire.

Every day, around 80 oil and gas tankers typically pass through the Strait of Hormuz, the narrow waterway off Iran’s southern coast that carries a fifth of the world’s oil and a significant amount of natural gas.

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On Monday, just two oil and gas tankers appear to have crossed the strait, according to a New York Times analysis of shipping activity from Kpler, an industry data firm. Since then, one tanker passed through.

“It’s a de facto closure,” said Dan Pickering, chief investment officer of Pickering Energy Partners, a Houston financial services firm. “You’ve got a significant number of vessels on either side of the strait but no one is willing to go through.”

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Tankers have been staying away from Hormuz since the U.S.-Israeli attacks on Iran that began on Saturday. A prolonged conflict could ripple broadly across the global economy, threatening the energy supplies of countries halfway around the world and stoking inflation.

International oil prices have climbed 12 percent since the fighting began, trading Tuesday around $81 a barrel, and natural gas prices have surged in Europe and in Asia.

A senior Iranian military official threatened on Monday to “set on fire” any ships traveling through the Strait of Hormuz. Vessels in the region have already come under attack. Several oil and gas facilities have also been struck or affected by nearby shelling, though the damage did not initially appear to be catastrophic.

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Where ships and energy facilities have been damaged

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Note: Damage as of 2 p.m. Eastern time Tuesday. Source: Kpler, Kuwait National Petroleum Company, Saudi Arabian Ministry of Energy, Planet Labs, QatarEnergy, United Kingdom Maritime Trade Operations and Vanguard Tech.

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A fire broke out Tuesday at a major energy hub in Fujairah, United Arab Emirates, from the falling debris of a downed drone, the authorities said. On Monday, Qatar halted production of liquefied natural gas, or fuel that has been cooled so that it can be transported on ships, after attacks on its facilities.

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Facilities at Ras Tanura oil refinery in Saudi Arabia were on fire on Monday after two Iranian drones were intercepted, according to Saudi Arabia’s Ministry of Energy, causing fragments to fall. Vantor

The sharp reduction in tanker traffic is reducing the supply of oil and gas to world markets, pushing up prices for both commodities. And the longer that ships stay away from the Strait of Hormuz, the less oil and gas get out to the world, which could raise prices even more.

Shipping companies have paused their tankers to protect their crew and cargo, and because insurance companies are charging significantly more to cover vessels in the conflict area.

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On Tuesday, President Trump said that “if necessary,” the U.S. Navy would begin escorting tankers through the strait. He also said a U.S. government agency would begin offering “political risk insurance” to shipping lines in the area.

In addition to tankers, other large vessels regularly go through the strait, including car carriers and container ships. In normal conditions, nearly 160 make the trip each day.

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Some ships in the region turn off the devices that broadcast their positions, while others transmit false locations — making it hard to give a full picture of the traffic in the strait.

The Shiva is a small oil tanker that has repeatedly faked its location, according to TankerTrackers.com, which tracks global oil shipments. It is suspected of carrying sanctioned Iranian oil, according to Kpler. The Shiva was one of the two tankers that crossed the strait on Monday.

The oil and gas that typically move through the strait come from big producing countries like Saudi Arabia, Iraq, Iran and United Arab Emirates, and are exported around the world.

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Where tankers moving through the Strait have traveled

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Note: Tanker paths are since Jan. 1 and include all tankers and gas carriers. Source: Kpler and Spire.

In 2024, more than 80 percent of the oil and gas transported through the Strait of Hormuz went to Asia. China, India, Japan and South Korea were the top importers, according to the U.S. Energy Information Administration.

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Countries have energy stockpiles that could last them into the coming months, but a continued shutdown of the strait could damage their economies.

Several big disruptions have roiled supply chains in recent years, but the tanker standstill in the Strait of Hormuz could have an outsize impact.

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Paramount credit downgraded to ‘junk’ status over debt worries

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Paramount credit downgraded to ‘junk’ status over debt worries

Paramount Skydance’s jubilation over its come-from-behind victory to claim Warner Bros. Discovery has entered a new phase:

Call it the deal-debt hangover.

Two major ratings agencies have raised concerns about Paramount’s credit because of the enormous debt the David Ellison-led company will have to shoulder — at least $79 billion — once it absorbs the larger Warner Bros. Discovery, bringing CNN, HBO, TBS and Cartoon Network into the Paramount fold.

Fitch Ratings said Monday that it placed Paramount on its “negative” ratings watch, and downgraded its credit to BB+ from BBB-, which puts the company’s credit into “junk” territory. Fitch said it took action due to “uncertainty” surrounding Paramount’s $110-billion deal for Warner Bros. Discovery, which the boards of both companies approved on Friday.

S&P Global Ratings took similar action.

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To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.

“Potential credit risks include the prospective debt-funded structure, Fitch’s expectation of materially elevated leverage and limited visibility on post-transaction financial policy and capital structure,” Fitch said.

Late last week, Paramount sent $2.8 billion to Netflix as a “termination fee” to officially end the streaming giant’s pursuit of Warner Bros. That payment paved the way for Warner and Paramount’s board to enter into the new merger agreement.

Paramount hopes the merger will be wrapped up by the end of September. It needs the approval of Warner Bros. Discovery shareholders and regulators, including the European Union.

Paramount executives acknowledged this week the new company would emerge with $79 billion in debt — a considerably higher total than what Warner Bros. Discovery had following its spinoff from AT&T. That 2022 transaction left Warner Bros. Discovery with nearly $55 billion of debt, a burden that led to endless waves of cost-cutting, including thousands of layoffs and dozens of canceled projects.

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Warner still has $33.5 billion in debt, a lingering legacy that will be passed on to Paramount.

Paramount plans to restructure about $15 billion in Warner Bros. Discovery’s existing debt.

Paramount CEO David Ellison at a 2024 movie premiere for a Netflix show.

(Evan Agostini / Invision / AP)

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Paramount told Wall Street it would find more than $6 billion in cost cuts or “synergies” within three years — a number that has weighed heavily on entertainment industry workers, particularly in Los Angeles.

Hollywood already is reeling from previous mergers in addition to a sharp pullback in film and television production locally as filmmakers chase tax credits offered overseas and in other states, including New York and New Jersey.

Some entertainment executives, including Netflix Co-Chief Executive Ted Sarandos, have speculated that Paramount will need to find more than $10 billion in cost cuts to make the math work. More recently, Sarandos went higher, telling Bloomberg News that Paramount may need $16 billion in cuts.

Cognizant of widespread fears about additional layoffs, Paramount Chief Operating Officer Andrew Gordon took steps this week to try to tamp down such concerns.

Gordon is a former Goldman Sachs banker and a former executive with RedBird Capital Partners, an investor in Paramount and the proposed Warner Bros. deal. He joined Paramount last August as part of the Ellison takeover.

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During a conference call Monday with analysts, Gordon said Paramount would look beyond the workforce for cuts because the company wants to maintain its film and TV production levels.

Paramount plans to look for cost savings by consolidating the “technology stacks and cloud providers” for its streaming services, including Paramount+ and HBO Max, Gordon said. The company also would search for reductions in corporate overhead, marketing expenses, procurement, business services and “optimizing the combined real estate footprint.”

It’s unclear whether Paramount would sell the historic Melrose Avenue lot or simply centralize the sprawling operations onto the Warner Bros. and Paramount lots in Burbank and Hollywood.

Workers are scattered throughout the region.

HBO, owned by Warner Bros. Discovery, maintains its West Coast headquarters in Culver City; CBS television stations operate from CBS’ former lot off Radford Avenue in Studio City; and CBS Entertainment and Paramount cable channels executive teams are located in a high-rise off Gower Street and Sunset Boulevard, blocks from the Paramount movie studio lot.

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“The combination of PSKY and WBD could create a materially stronger business than either individual entity,” Standard & Poor’s said in its note to investors. “However, this transaction presents unique challenges because it would involve the combination of three companies, with the smallest, Skydance, being the controlling entity.”

David Ellison’s production firm, Skydance Media, was the entity that bought Paramount, creating Paramount Skydance.

Ellison has not announced what the combined company will be called.

Paramount shares closed down more than 6% Tuesday to $12.45.

Warner Bros. Discovery fell 1% to $28.20. Netflix added less than 1% to close at $97.70.

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