The Orange City Council, fending off what officials called a potentially severe blow to the local economy, Tuesday concluded an agreement that will keep more than 1,000 TRW employees here in return for city-paid rent subsidies that could total $2 million over the next decade.
The deal marks the end of negotiations that began when TRW, the city's sixth-largest employer, announced plans earlier this year to relocate the Orange facility to either Denver, Dallas or Cleveland. It represents a more aggressive attempt by the city to retain local businesses.
"We're very excited about (the TRW agreement)," said Brent Hunter, executive director of the Orange Chamber of Commerce. "It's something we see as an important step in telling the business community that Orange is serious about keeping business."
"It's hard to tell if it's all worth it in terms of dollars and cents," added Anil Puri, an economist at Cal State Fullerton. "But coming at this time, it's good psychologically. Orange County needed something like this."
TRW's 1,200 employees make up 20% of the daytime population of the The City office complex. City officials estimate that the employees spent almost $7.5 million in Orange in 1991. The company also paid $1.3 million to Orange vendors the same year, said Victoria Cleary, assistant project manager at the city's Redevelopment Agency.
David Huffman, the co-owner of Dos Gringos restaurant in The City, said that TRW employees' lunchtime business is the difference between the success or failure of his year-and-a-half-old enterprise.
The agreement calls for Orange to pay TRW a maximum of $200,000 a year over the next decade, if TRW employs at least 1,000 people at its facilities in Orange.
As long as TRW maintains a staff of at least 750 full-time workers at its credit reporting division headquarters, the Redevelopment Agency will give the company $100,000 a year. The agency will add $400 for each employee until TRW hits 1,000 workers. The council acted as the Redevelopment Agency in negotiating and concluding the deal.
The deal comes at a time when city employees are being asked to take 10% pay cuts to help balance the municipal budget.
Orange officials have tried to take a more active role in business retention since the decision earlier this year by locally based Vans Inc., a manufacturer of athletic shoes, to build a new plant employing 600 people in Vista.
Just last week, Hughes Aircraft Co. said it would be moving 4,500 missile plant jobs to Tucson, Ariz., saying the high cost of doing business in California was a crucial factor in the move.
Also as part of Tuesday's agreement, Tishman Parkway Venture and The City, owners of the property, must undertake a minimum of $2.5 million in property improvements over the next 10 years. The improvements must go through the building permits process to be counted toward the agreement and $1.5 million of renovations must occur within the next five years.