Packard Bell Reportedly Narrows Choices to 2 Sites : Economy: The Chatsworth computer firm is weighing incentives offered by Palmdale and Utah, sources say.
Packard Bell Electronics Inc., the Chatsworth-based personal computer maker that announced plans to move about 1,500 jobs, has narrowed its choices for relocating its production facility and administrative office to Palmdale and Salt Lake County, Utah, sources said.
The sources, who are familiar with ongoing talks between Packard Bell and a consortium of Antelope Valley, state and county officials, asked to remain anonymous. However, they said Palmdale strengthened its bid this week with additional incentives, including favorable construction loans, to Packard Bell, the fourth-largest personal computer manufacturer in the United States.
Utah’s bargaining position seemed strengthened Monday when Packard Bell announced that it was moving 420 service center jobs--filled by employees who answer telephone calls from Packard Bell computer users--to Magna, Utah, near Salt Lake City. The jobs pay up to $21,000 per year.
Last month, Portland, Ore., was also viewed as a serious contender in the effort to lure Packard Bell. While Portland has not been ruled out by company officials, California and Los Angeles County officials said privately that Packard Bell is taking a harder look at the offers put on the table by Palmdale and Salt Lake County.
Calls to the office of Portland Mayor Vera Katz, who has personally been lobbying Packard Bell, were not returned Wednesday. Packard Bell spokeswoman Liz O’Donnell said the company would not comment on reports that it had narrowed its choice to Palmdale and Utah.
Utah officials warned against reading anything into the transfer of the 420 jobs, but said they viewed the move as a sign that Packard Bell is taking their offer seriously.
Salt Lake County Commissioner Jim Bradley said Packard Bell transferred the jobs despite few incentives offered by Salt Lake County and Utah officials.
“We’re not buying this company to come to town. . . . We’re eager to have them come, but we’re not desperate to have them. Our economy is very good. We’ve offered incentives, but there are certain thresholds that are in the public interest. Packard Bell came to us, and that’s to our advantage,” Bradley said.
Bradley and Russ Behrmann, spokesman for the Utah Department of Community and Economic Development, said they hope that the quality of life in the Salt Lake City area will make up for the few incentives offered to Packard Bell.
Packard Bell officials said they would announce where they are moving to by the end of the month. The company said it has outgrown its six buildings in Chatsworth.
The company, which makes IBM-compatible computers, sells them at 7,000 retail outlets nationwide, including Price Club and Wal-Mart. Last year, privately held Packard Bell’s revenues were an estimated $1.25 billion.
Meanwhile, Antelope Valley and Los Angeles County officials upped the ante Friday in a meeting with Packard Bell officials.
Al McCord, Palmdale’s deputy city administrator and head of the city’s recently formed Economic Development Agency, said county officials who attended the meeting offered Packard Bell an additional $15-million construction loan payable in four years at 4% interest.
“We went into that meeting on Friday with what we felt was a strong package. It was the first time that Packard Bell was presented a package that combined offers from the county and the Antelope Valley. I got a call later that evening from a Packard Bell representative who said the company was very impressed with our presentation,” McCord said.
The incentives offered to Packard Bell by Palmdale, Lancaster and Los Angeles County officials and the Antelope Valley business community include:
* Palmdale has offered to give the company 50 acres of vacant land, worth about $7.5 million, where the company can build its new facilities. Utilities and roads have already been installed.
* Lancaster, Palmdale and Los Angeles County have joined to offer $4 million in housing assistance to help Packard Bell employees move to the Antelope Valley.
* Palmdale has agreed to issue $10 million in tax-exempt bonds and up to $35 million in taxable bonds to help Packard Bell build the new facilities. This is in addition to the $4-million loan offered by the county.
* The Los Angeles County Business Loan Program also offered the computer maker a 10-year loan for an undetermined amount at 4% interest.
* The Los Angeles County Community Development Commission has offered to finance the construction of various sites that would house Packard Bell’s subcontractors for a few years until those companies could go at it alone.
* Antelope Valley businesses have agreed to give discounts on purchases of furniture and other household items to Packard Bell employees who move there. In addition, local builders also offered discounts of up to 3% to employees who buy new homes.
Both Bradley and Behrmann said it was impossible for Salt Lake County to meet each incentive put on the table by the Antelope Valley cities and Los Angeles County. But they said the few incentives they offered Packard Bell, plus the quality of life in Utah, should be enough to persuade them to move there.
Bradley said Salt Lake County has offered Packard Bell a onetime tax break of between $160,000 and $200,000 on the computers, machines and other equipment owned by the company. Businesses in Utah pay a personal property tax as well as taxes on real property.
Salt Lake County has also offered a $600,000 low-interest loan to the owner of the building that would house the Packard Bell facilities for remodeling and renovation. Packard Bell would lease the building.
The state has also offered Packard Bell a facility where it could train new employees.
McCord warned that Palmdale’s effort to lure Packard Bell could be dealt a setback unless the state authorizes the creation of an enterprise zone in Palmdale, where the Packard Bell facility would be located. The company would save almost $2 million annually in property and employee payroll taxes if the zone is enacted.
“It’s been the most frustrating situation I’ve been involved in,” McCord said. “It’s time for the state to put their money where their mouth is. If we have a weak link, it’s the state.”
Laurel Shockley, an official with the state Department of Trade and Commerce in Pasadena, said creating enterprise zones is a laborious legislative process. Palmdale has been denied in the past because it did not meet the unemployment and poverty level requirements.
“We just don’t have a bag of tricks to make this happen,” Shockley said.
A bill pushed by Los Angeles County officials to enact an enterprise zone in Palmdale is under consideration in the Assembly.
On Wednesday, the Los Angeles City Council joined the battle to keep Packard Bell in the county by considering a $31,000 property tax rebate over five years for the company if it remains in the city of Los Angeles. The proposal will be discussed Friday.
Times staff writer Hugo Martin contributed to this story.
Vying for Packard Bell
A consortium of Antelope Valley communities, led by Palmdale and Lancaster, has been joined by local businesses and Los Angeles County in offering incentives to Packard Bell Electronics Inc. in an attempt to persuade the personal computer maker to choose Palmdale as the site for its new production and administrative facilities.
Chatsworth-based Packard Bell is also entertaining offers from Utah officials to move the facilities and about 1,100 jobs to the Salt Lake City area. The company, which employs about 1,500 workers in facilities throughout the San Fernando Valley, has already announced that it will move 420 service center jobs to Magna, Utah, near Salt Lake City.
Here is a comparison of some of the incentives offered to Packard Bell by Antelope Valley officials and government leaders in Utah:
PALMDALE / LANCASTER
* Palmdale has offered to give Packard Bell 50 acres of land, worth about $7.5 million, where the company can build its new facilities.
* Palmdale, Lancaster and Los Angeles County have offered a special $4-million housing package to Packard Bell employees to move to the Antelope Valley. This includes assisting employees in obtaining home loans and helping relocate employees.
* Palmdale has agreed to issue up to $10 million in tax-exempt bonds and up to $35 million in taxable bonds to help Packard Bell build the facilities.
* Los Angeles County has offered a $15-million construction loan, payable in four years at 4% interest.
* Antelope Valley businesses have agreed to give discounts on purchases of furniture and other household items to Packard Bell employees who move there. Local builders are also offering to sell new homes at discounts of up to 3% to employees.
UTAH / SALT LAKE CITY
Utah state and Salt Lake County officials are playing their cards close to the vest, but said they offered the following incentives to Packard Bell:
* A onetime tax break of between $160,000 and $200,000 on personal property owned by Packard Bell. Businesses in Utah pay a personal property tax, as well as taxes on real property.
* Salt Lake County has offered a $600,000 low-interest loan to the owner of the building where Packard Bell would move its production facility for remodeling and renovation. Packard Bell would lease the building.
* The state has offered the use of a training center facility to Packard Bell, where the company would train new employees.
