State’s Economy on Mend, Two Eastern Executives Say

Despite signs that the California economy continues to recover, some locals remain uncertain that the state is rebounding from the economic miseries of the early 1990s.

So, if it’s of any comfort, two out-of-town executives who keep tabs on the Golden State from the other coast say that the recovery seems to be continuing.

“I’m an outsider, but I like California,” said Jim Adamson, chief executive officer of Flagstar Cos. Inc., the Spartanburg, S.C.-based parent company of the Denny’s, Coco’s, Carrows and El Pollo Loco chains. Adamson liked California enough to pay $306.5 million in cash and notes for the Irvine-based Coco’s and Carrows chains, which have 350 locations. Coupled with its Denny’s and El Pollo Loco restaurants, Flagstar is now one of the state’s largest restaurant operators with more than 800 locations.

Adamson, who plans to travel to California every four to six weeks, is betting that the Golden State’s economy is on an upswing. “California is a huge economic machine,” Adamson said. “Yeah, it’s also one of the most litigious states in the country and one of the most expensive places to do business. But if you believe that you can market yourself better than your competitor, it’s the place to be.”

Move the outsider’s vantage point up the Atlantic Seaboard a few hundred miles to New York City and John T. Riordan, president of the International Council of Shopping Centers, also weighs in with a glowing review of California’s economic revival.

“When it comes to real estate, Californians have had a tough time,” Riordan said during a recent visit to Long Beach for an ICSC conference. “And when it comes to the question of whether [California] consumers are confident, I don’t know if I have an answer to that.

“What I do know is that California is recovering faster and with more energy than most people ever thought possible.”

Yes, Riordan says, California lost lots of good-paying jobs when aerospace and defense companies trimmed payrolls. But he sees the new wave of jobs in industries such as entertainment as solid replacements.

“California has an incredibly potent economy,” Riordan said. “And the prospects are very exciting.”

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Greg Johnson covers retail businesses and restaurants for The Times. He can be reached at (714) 966-5950 and at greg.johnson@latimes.com