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Yuma Arizona Using Gov. Brown’s Budget to Lure Business Out of California

Officials in Yuma, Arizona are actively working to recruit businesses to move from California, and they are citing Governor Brown’s proposal to eliminate Enterprise Zones as one of their selling points:

In the past, people passed through Yuma on their way to anticipated riches in California.

Now Yuma’s economic developers are standing on the state line beckoning them back with a toolbox of reasons why it would be a smart move for businesses to relocate here.

Ken Rosevear, executive director of the Yuma County Chamber of Commerce, is taking it even further. He’s putting together a contingent to go to California and meet face to face with the decision-makers of businesses there.

“I’m just asking for 30 minutes of their time,” he said. The message he would take is that a business could save millions of dollars by moving to Yuma while still being able to readily reach its markets in Southern California.

But first he did his homework. As a businessman, Rosevear said, his main interest is the bottom line: the cost of doing business. So he put together a list of 10 reasons a California company should consider moving to Yuma.

“I’ve identified assets of Yuma in relation to California. If presented to California-owned companies, I figure there would be at least two or three hot buttons … at least to get them interested in talking to us.”

At the top of the list is workers compensation. “California’s rates are six or seven times as high as Arizona’s,” Rosevear said. “Just for that issue alone, a California company would benefit by moving to Yuma.”

Other items on Rosevear’s list:

• Arizona enjoys “much lower overall” liability and comprehensive rates.

• Arizona is a right-to-work state.

• Environmental rules in Arizona are much less restrictive than in California. California’s diesel regulations alone are killing commerce, Rosevear noted.

• Utility rates for electricity and natural gas are extremely competitive in Yuma, said Rosevear. “Even though we feel utilities are expensive here, there’s a big difference in the coastal areas. When combining water and electricity, there’s a marked difference.”

• The purchase or lease of land in Yuma County is much less expensive.

• Taxes in Yuma remain significantly lower than in California.

• Construction costs for labor and materials are lower in the Yuma area.

• Communities in Yuma County are business-friendly, especially with the “new sheriff in town” — the mayor — at Yuma City Hall.

And finally, Rosevear concluded, “Yuma provides great opportunities to do business and still make a profit. Do the math, you’ll see.”

Asked to weigh in with her own list of why relocating to Yuma makes business sense, Julie Engel, president and CEO of Greater Yuma Economic Development Corp., led off with a summary of newly elected California Gov. Jerry Brown’s proposed budget.

That budget includes a number of items that will hit businesses hard, she said. Brown is proposing to eliminate redevelopment agencies, do away with enterprise zones, eliminate two long-standing incentives for business development and do away with corporate tax breaks.

At the same time, Engel said, Arizona is considering “beefing up” enterprise zones in the state as part of a proposed jobs bill before the Legislature.

Engel agreed with Rosevear that operational costs in Yuma County are “significantly less than California, some metro areas in Arizona and even in New Mexico.”

And she has a computer model that will prove it. With the model, GYEDC staff can input the cost of a company doing business here versus in the 10 communities that Yuma competes against all the time, Engel said. The model covers such costs as real estate, capital investment, utilities, transportation, work force, property taxes and transportation.

“We can demonstrate the cost savings in Yuma,” she said.

While cost savings is No. 1, Engel said the Yuma area has plenty of other enticements for a business looking to relocate.

One is logistics, she said, with millions of people located within a 500-mile radius, including central Arizona, California, Nevada, New Mexico and northern Mexico.

The brand-new commercial port of entry is attracting attention from companies wanting to do business in both Mexico and the U.S., she said.

While the Yuma area is known for its high unemployment rate, it’s also noted for the quality of its work force, Engel said. “It’s touted by existing manufacturing companies as the best in the world.”

Noel Robles, human resources manager for Shaw Diversified Services, a longtime Yuma manufacturer of carpet yarn, agreed.

The company values the “diversity and quality of the work force” in Yuma, he said. “You can locate the plant and equipment anywhere. It’s the people that make the difference.”

Engel also listed the Yuma area’s natural resources, with available land, the Colorado River and lots of sunshine, not to mention that it’s not prone to snow days, flooding and tornadoes.

Other assets, Engel said, are the openness and willingness of local government to work with businesses, an aggressive and integrated pipeline of workforce development and training, and the value that the area’s military and agriculture bring to the community.

Last but not least is the quality of life enjoyed here with a progressive hospital, outdoor recreation opportunities for healthy and active living, and a variety of arts and culture opportunities.

There are companies that are interested, Engel said. “We’re doing all we can to get them to consider this area.”

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