A sobering article in the Los Angeles Business Journal, “Outsiders Make Bolder Moves to Steal L.A. Companies:”
For Carmen Murray, owner of a custom carpet company in Commerce, the siren song from other states offering free land and lower business costs has finally become too enchanting to ignore.
Murray, who owns Rodeo Carpet Mills Corp., has been getting calls and brochures from other states for years, and she has generally ignored them. But now, faced with a combination of a brutal recession and soaring taxes, Murray is giving serious consideration to the thought of moving her 22-employee company to states as far away as North Carolina.
“The economy has hit us hard,” Murray said. “We’re looking at everything we can look at to cut expenses and to go forward with our company and that includes locating to a lower cost area.”
All over Southern California, business owners are receiving phone calls, e-mails, fancy brochures and even personal visits from economic development offices in other states. In recent years, most have come from states in the Western United States, chiefly Arizona, Nevada, Utah and Colorado. But other more distant states are now getting into the act, such as North Dakota and North Carolina.
The article contains the following curious Enterprise Zone reference:
Meanwhile, local skin-care products maker Dermalogica Worldwide has also received a barrage of brochures and phone calls from other states. Founder and Chief Executive Jane Wurwand said North Dakota has been “extremely aggressive,” while North Carolina and Kansas have been “persistent.”
Wurwand said Dermalogica, which has 340 employees in Carson, is not interested in moving to North Dakota or anywhere else outside of Southern California.
“We’re about to launch a California brand, so we’re staying,” she said.
But Wurwand’s frustration level with California – especially government agencies – is rising. The company was recently turned down in its attempt to receive state enterprise zone tax credits for new hires. In addition, she’s very nervous about what the impending increases in state and local sales taxes will do to her business.
Topping it all off, Wurwand has not received calls offering any assistance from state or local government officials.
“We’re a bit miffed,” she said. “They’ve completely ignored us.”
There is this ray of hope with the appearance of long-time Enterprise Zone advocate Carrie Rogers:
Situations like that concern local economic development officials, who say they have stepped up the frequency of calls to local businesses.
“We’re trying to find out if these businesses have any issues that we can address,” said Carrie Rogers, vice president of business assistance with the Los Angeles County Economic Development Corp. The organization’s workers are going through databases and calling companies to offer whatever assistance they can.
Rogers said that the use of so-called red teams of local government officials has been expanded to address these problems. Red teams, which originated in the aerospace industry as impromptu fix-it teams, were widely employed to retain California businesses in the 1990s. These ad-hoc groups of state, local government and utility officials gathered to meet with companies and take whatever actions were feasible to keep the companies from leaving, from lowering utility bills to waiving permit fees.
But will it be enough?
