County, Palmdale Offering Land, Loans to Packard Bell

A high-stakes battle to keep a Chatsworth-based computer maker from leaving the state intensified Tuesday, with Palmdale and Los Angeles County officials offering the firm free land, low-interest loans and tax breaks to stay.

The prize is the production facility of Packard Bell Electronics Inc., along with about 1,500 jobs.

The company, which has outgrown its Chatsworth facility, is also being heavily courted by Portland, Ore., and Salt Lake City, according to sources involved in the negotiations. The company’s executives are expected to announce their decision by Jan. 15.

“We’re looking at a situation California cannot afford to lose,” said Al McCord, Palmdale’s deputy city administrator, adding that he had been on the phone “all day” Tuesday negotiating the deal.

“Palmdale is totally at the table, the county is coming on board and we’re getting the state Legislature involved.”

Palmdale is offering Packard Bell a free site, worth about $7.5 million, in the city’s redevelopment zone, said McCord, who is also head of the city’s recently formed economic development agency.

To sweeten the deal, the city has also offered to issue about $10 million in tax-exempt bonds, with the proceeds going to the company, which would pledge the land as security for repayment, he said. That may be enough for the company to build a new factory, McCord said.

Packard Bell executives declined to comment Tuesday, but McCord said the firm will come up with a “short list” of the top two or three contenders this weekend.

The county has also joined the battle to retain Packard Bell. The Board of Supervisors Tuesday granted the company $12,500 in property tax breaks annually for the next five years.

That is a small amount of money compared to the company’s estimated property tax bill of about $100,000 annually. But it is the most allowed under a new state law that allows municipalities to rebate only their share of a company’s property taxes.

Far more significant is the county’s offer to loan Packard Bell an unspecified amount of money under its low-interest construction loan program, repayable in four years, McCord said.

County officials would not comment on their efforts to keep Packard Bell from relocating out of state. But county Chief Administrative Officer Sally R. Reed said Tuesday she was optimistic about the discussions.

“They are seriously interested in staying in Los Angeles County and I think we have a good chance of persuading them,” Reed said.

McCord said officials at the county’s Community Development Department on Tuesday drafted proposed state legislation that would allow Palmdale and other cities to offer companies incentives to relocate or expand in the state.

Dubbed the Business Expansion and Revitalization Act, the law would permit cities to establish “revitalization zones” for companies with 500 or more employees that want to expand or relocate in California. Those companies would receive tax breaks, low-interest loans and other benefits.

The Legislature will not be able to adopt the bill in time for Packard Bell’s decision, but McCord said he is hoping to get letters of support from Gov. Pete Wilson and other officials to use to persuade the firm to move to Palmdale.