After WellPoint, Focus Shifts to Growth, Revival : Economy: Loss of Blue Cross subsidiary was a blow, but county officials say their role now is to continue revving up the economy while retaining businesses already in place.
When WellPoint Health Networks’ recent merger killed its plans to build a high-profile, $180-million office development and bring with it an estimated 7,200 jobs, business leaders worried anew about the county’s economic health.
Today, while still lamenting the loss of the Blue Cross subsidiary, officials vow to continue resuscitating the area’s flagging economy.
“Blue Cross was a disappointment, but it’s not considered devastating,” said Nancy Williams, executive director for the Ventura County Economic Development Assn. “Life goes on. We just need to redouble our efforts and make sure the companies we’ve got here are surviving.”
Given the weak economic climate, the association has begun to focus more on business retention than recruitment. Still others aren’t abandoning the all-but-completed work done to bring WellPoint to Camarillo.
“We’re going after other companies to present the package to them,” said Jerry Pelton, senior vice president for CB Commercial Real Estate Group, which represented Pardee Construction Co., owners of 135-acre Mission Oaks Business Park where WellPoint planned to locate. “I think there are a couple of folks in Southern California that are real prospects.”
WellPoint pulled out on the eve of final city approval for its 61-acre project, just days after proclaiming that a merger with Health Systems International, another managed health care company, wouldn’t affect its expansion plans.
That, coupled with the potential the WellPoint relocation embodied, has left most of the area’s economic development officials and business leaders regretting the one that got away.
WellPoint represented a clean industry, with thousands of relatively high-paying white-collar jobs.
WellPoint had intended to merge its existing offices in Westlake Village, Oxnard and Newbury Park into the Camarillo location. Many of the 3,540 workers at those sites were expected to transfer to Camarillo, but the community eventually would still have seen an estimated 7,200 new employees after 2003.
For comparison, the hard-fought battle to retain the Point Mugu military base meant that about 8,000 civilian jobs were saved, Williams points out. And the county’s largest private employer, Simi Valley clothing distributor Bugle Boy Industries, has only 3,000 workers.
“It would have been a significant employer even on a county level,” she said. “It really would have been a crown jewel for the county and for Camarillo.”
What’s more, the city would have received its new corporate citizen with few strings attached. WellPoint had eliminated more than 40 other sites before choosing the one in Camarillo. The city was spared the high-priced bidding wars some communities have endured, as corporations in recent years have demanded millions of dollars worth of economic incentives to relocate.
Municipal officials acknowledge that such opportunity was almost unheard of for a city of fewer than 59,000 residents.
“You’ll never get another 7,200 [jobs], there’s no question about it,” Camarillo City Manager Bill Little said. “It was one of those once-in-a-lifetime deals.”
For a county suffering from contraction in key business sectors such as oil production and defense, WellPoint represented something else too: an opportunity to embrace an emerging industry.
“Health care is the defense industry of the ‘90s,” said Chris Lorelli, a cycle shop owner and president of downtown Camarillo’s Boulevard Assn. “This is recovery time. Losing a chunk of the medical industry isn’t helping the recovery.”
Not everyone, though, was ready to pay the price to welcome a growth industry. Some residents worried about increased traffic and other quality-of-life issues that inevitably accompany a large development.
Carol Nordahl, executive director the Camarillo Chamber of Commerce, said most business executives took the disappointing news in stride.
“It’s not like somebody had built a new restaurant on the corner waiting for them to come,” she said. “It’s not as if we would have had 7,000 unemployed people employed.”
Jeffrey Fautt, president of the Camarillo Assn. of Realtors, echoed Nordahl’s sentiments. He suggested that Camarillo’s pricey housing market--where the median home price is $235,500--would have dissuaded many WellPoint employees from moving to the city. “I never really thought it was going to be a real boon to our industry,” he said. “It’s really business as usual. We’ve spent zero time talking about it.”
One economic development official offers a succinct explanation for such a tepid reaction: “What they didn’t have, they didn’t know they lost,” said Jim Jevens, an economic development consultant to the city of Camarillo.
And Camarillo lost a lot, Jevens said.
Unlike Fautt, he anticipated at least 10% to 12% of WellPoint’s work force would have purchased homes in Camarillo, giving the city’s housing market a much-needed boost. Then there’s the lost sales tax revenue that would have been generated by everything from workers lunching at nearby restaurants to bringing their families to the city on weekends.
There are other intangibles too. Perception is paramount. Growth begets growth. Small companies like to be around big ones, Jevens said.
“There were deals that were lost because WellPoint isn’t coming,” he said, without elaborating. “I would cringe at the loss over the next 10 years.”
Many people didn’t appreciate the scale of the development, analysts said. WellPoint planned to build 1.4 million square feet of office space. The entire county now only has about four times that much, or 5 million square feet, said Jerry Steinke, a CB Commercial senior associate.
Still, officials comfort themselves with the knowledge that Camarillo officials didn’t do anything wrong. WellPoint’s decision was an internal one--made at the highest levels--because of the merged company’s surfeit of office space.
The elements that attracted WellPoint to Camarillo remain, said officials, such as a business-friendly climate and a fast-track permitting process.
“If someone wants to come in and build a project like WellPoint, they can pull it off the shelf--it’s approved,” Little said.
Few expect that to happen any time soon.
But the city benefited from the experience. Some of the road improvement plans WellPoint paid for will move forward, for instance. City staff gained knowledge in dealing with a large corporation that will prove invaluable next time, officials said.
And there will undoubtedly be a next time.
With WellPoint out of the scene, some companies are showing renewed interest in the site, officials said.
“The bright side is the land is still there,” Little said. “It’s still a good site and if it was a good enough site for WellPoint, it will be good enough for other companies.’
