Newport Considers Incentives to Keep Rockwell Plant

Rockwell International Corp. has pitted Newport Beach against Colorado Springs, Colo., in a competition for a $168-million expansion of a computer chip manufacturing plant that would add as many as 150 jobs, officials said Monday.

The Newport Beach City Council unanimously decided to send a letter to Rockwell on Monday indicating that it will consider providing tax rebates or other incentives to encourage the aerospace company to expand its plant at Jamboree Road and MacArthur Boulevard.

“We would be willing to pursue a development agreement that would provide Rockwell with long-term guarantees it needs to justify a major expansion,” the letter states.

The expansion comes as Seal Beach-based Rockwell tries to stay abreast of burgeoning growth in demand for computer chips. The plant completed a $150-million expansion in December to make more chips for computer modems, but demand remains so strong that another expansion is needed.

“They can’t pump them out fast enough,” said Rockwell spokeswoman Eileen Algaze. “This industry is growing like crazy.”

Rockwell already has 1,600 workers at its Newport Beach plant. The company would spend $110 million on equipment and $58 million on plant improvements in the expansion as contemplated.

The project would involve conversion of 20,000 square feet of office space at the Rockwell facility in Newport Beach. The office workers would be moved into new offices at the Koll Center, which would fill a vacancy in the city, said Assistant City Manager Ken Delino.

He said that Rockwell Vice President John Algeo told city officials about the plans last Wednesday and indicated that the company already had been in touch with Colorado Springs officials.

To attract Rockwell, Delino said, the city might have to offer tax rebate incentives. Other cities have offered such incentives to bring in new businesses, but Newport Beach never has, he said.

Rockwell is the 12th highest city taxpayer in Newport Beach, paying about $330,000 in taxes a year.

Delino said he organized a meeting of city, county and state trade officials and Rockwell executives over the weekend to hammer out the types of incentives the city might be able to offer. They have not decided on specific incentives.

Delino, who takes over the Planning Department at the end of the month, said that department also could provide “fast-track” benefits for Rockwell to speed plan checks, permitting and inspections.