Simi Valley May Boost Incentives to Lure Firm : Business: Council may waive $63,000 in fees in addition to $105,000 in other enticements in order to get warehouse built.

The Simi Valley City Council may offer a higher financial incentive to entice a major music and videotape firm to move a distribution warehouse to the city from Chatsworth, Mayor Greg Stratton said Thursday.

The City Council on Monday will consider waving an extra $63,000 in fees and costs for Warner/Elektra/Atlantic Corp. because company executives complained about the offer of only $105,000 in incentives and have promised to bring more jobs to the area than initially estimated.

The Time Warner Inc. subsidiary now envisions 186 employees at its planned warehouse immediately upon its opening and an expansion within three to five years that will boost that staff by 40 workers--most of whom would be hired locally, according to a city report released late Thursday.

Earlier company estimates had set the number of opening-day workers at 160, and had predicted the hiring of only 10 new employees as part of the warehouse expansion. In both cases, about 120 of the opening-day workers are expected to transfer from the warehouse facility the company now leases in Chatsworth.

Disappointed at the number of jobs the facility would bring to the area at an average salary of just $26,000, the council last Monday voted to trim its financial welcome from the $130,000 recommended by city staff to $105,000.

Company representatives attending the meeting objected to the lower figure and threatened to reconsider the move.

On Tuesday, Warner/Elektra executives called city officials to say that they had underestimated the size of the planned Simi Valley work force and asked that the council consider increasing the financial incentive.

Based upon the new information, city staff now recommends a $168,800 incentive be awarded the music and videotape firm. The incentive would be used to pay a portion of the city development fees associated with construction of the warehouse.

“I feel much more comfortable with the data that they’ve provided us now,” said Mayor Greg Stratton, who supports the recommended $168,800 award. “It now is a much better package than it was before and I feel much more comfortable about the whole thing.”

Jac Lee, the company’s national director of facilities, declined to comment on the matter Thursday.

Warner/Elektra last month applied to build the warehouse and distribution center on 12.45 acres it recently purchased on Ward Street in the city’s west end industrial area. The estimated cost of construction is $6.5 million.

Last year, the council awarded $175,000 to Guardian Products Inc., a medical supply house moving to the city from the east San Fernando Valley. When completed, that relocation is expected to bring the city nearly 500 full- and part-time jobs.

Council members compared Warner/Elektra’s estimated $4-million payroll with Guardian’s estimated $10-million payroll in their decision to trim the Warner/Elektra’s allocation earlier this week.

But in their revised information, the Time Warner subsidiary noted that its anticipated payroll was a conservative payroll estimate that did not take employee commissions and bonuses into consideration.

Warner/Elektra hopes to have the warehouse built and operational by June of next year.

City officials estimate the facility will yield $125,500 in business tax revenues and $33,573 in redevelopment agency revenues in its first year.