Making Them an Offer They Shouldn’t Refuse : Why everybody loves Packard Bell Electronics
California faces the prospect of losing yet another established, successful computer company to some other state. But the determined efforts not only of the City of Palmdale but of Los Angeles County and state officials just might succeed in persuading Packard Bell Electronics Inc. to stay in the Golden State. They say they are pulling out all they stops to show that California can be competitive and just as hospitable to business as any other state.
It’s been a good show so far. This team effort has produced a package of incentives likely to be as attractive as any offered to Packard Bell Electronics by Palmdale’s chief competitors, Salt Lake City and Portland, Ore. The private company has outgrown its Chatsworth facility, where 1,500 people are employed. Since March the state Trade and Commerce Agency’s Red Team has been working to identify other potential sites in California for the company.
Mayor Richard Riordan’s office was originally involved in trying to keep the facility in Los Angeles--of which Chatsworth is a part--but it couldn’t top the offer put on the table by Palmdale, in northeastern Los Angeles County. Packard Bell Electronics is expected to pick a site by next Saturday.
A message for Beny Alagem, chairman, president and chief executive of Packard Bell Electronics: Here’s why you should keep the nation’s fourth-largest personal computer maker in California:
* Most of the Chatsworth plant’s 1,500-member work force already lives within commuting distance of Palmdale.
* Palmdale is offering a free site, worth $7.5 million, in its redevelopment zone. The area also has been designated as a new foreign trade zone, which would entitle Packard Bell Electronics to breaks on duties. The city will also issue roughly $10 million in tax-exempt bonds. The proceeds--enough to build a new factory--would go to your company if you pledge as security for repayment the land you got at no cost.
* Los Angeles County on Tuesday granted Packard Bell Electronics $12,500 in property tax breaks annually for five years, the maximum allowed under a new state law. The county also is offering low-interest construction loans of unspecified sums.
* A tax credit on new equipment is available.
* Gov. Pete Wilson has personally asked you to stay. We urge the Legislature to speed action on a bill to designate Palmdale as an enterprise zone. If that happens, Packard Bell Electronics would receive a tax credit of $19,000 over five years for every employee hired. The company could also be eligible for reduced electricity rates in an enterprise zone.
This sort of state and local teamwork has paid off before, most recently last November when Lego Systems Inc. decided to locate its first U.S. family amusement park in Carlsbad, north of San Diego, instead of in Virginia’s Prince William County. The park, scheduled to open in 1999, should produce $76 million annually in sales. Construction will generate a onetime economic bonanza of $185 million for the region and create more than 800 jobs. That’s no small potatoes.
Keeping Packard Bell Electronics also would mean new jobs--about 1,000 to 1,500 more at the production facility alone, not to mention jobs in construction and support services.
The personal computer business is tough and competitive. California can help Packard Bell Electronics meet the challenges of its industry and, at the same time, Packard Bell can help California.
