L.A. Showers Incentives on Price Pfister

Los Angeles city leaders are offering loans, tax incentives and possibly even a break on utility rates to try to head off a threatened move from Pacoima by the Price Pfister factory, officials said Tuesday.

“We are doing a full-court press on this,” said Rocky Delgadillo, assistant deputy mayor for economic development.

Price Pfister--the nation’s third-biggest faucet company--is closing part of its Pacoima manufacturing operation and laying off about 500 workers. Other jobs are being shifted to Mexico to help pay for the cost of complying with state regulations that require the company to reduce the lead contents in its faucets.

But another 900 manufacturing, administrative and marketing jobs may be in jeopardy because Price Pfister is considering moving its remaining operations to a state with lower taxes and less-stringent environmental regulations, the company said.

Hoping to head off such a move, Mayor Richard Riordan’s business retention team met with Price Pfister management last week to outline the benefits of staying in Pacoima, which is part of a state enterprise zone and qualifies for federal loans.

Businesses within the enterprise zone get tax breaks on buying new equipment and hiring local workers. Also, the newly established Community Development Bank offers loans to businesses in Pacoima and other high-unemployment areas.

Delgadillo said Price Pfister management did not realize the firm qualified for such benefits and welcomed the news.

“I definitely think we’ve come in contact with them in a critical time,” said Debbie La Franchi, the business retention representative who has worked directly with the company.

In addition, she said officials from the Los Angeles Department of Water and Power will meet with Price Pfister next week to discuss a possible 25% discount on power rates, which are also available to new or expanding businesses in the enterprise zone.

City officials say they can also provide Price Pfister with between $3 million and $10 million in funding for an expansion or modernization program by issuing bonds that could be paid off at a rate of about 6%.

City officials have yet to calculate how much the various incentives could save Price Pfister but are optimistic that the savings could persuade the firm to stay, La Franchi said.

Price Pfister President Ron Cooper praised La Franchi and other city officials for their efforts but said his company must first study how much savings the incentives can provide before making any decisions on the future of the company.

“We certainly look forward to any support that that city can provide in terms of making being in L.A. a more attractive business decision,” he said.

Cooper added that the company hopes to expand in the future and may be able to take advantage of the city loan offers. But Price Pfister may also consider taking its expansion plans to another city, he said.

“We would hope to be able to expand our overall capacity as our business grows, but specifically where we would do that depends on the business climate we are in,” Cooper said.

To comply with a state lawsuit to reduce the lead content in faucets, Price Pfister has had to make investments to shift to a new manufacturing method. To reduce operating costs, it has begun to turn to cheaper labor in Mexico.

Councilman Richard Alarcon, who represents Pacoima and surrounding communities, will join in the campaign to keep Price Pfister in the area when he meets today with Cooper.

“Our first goal is to see if we can stop the layoff of workers,” he said.

But Alarcon also wants to ensure that the workers who lose their jobs get help from a federally funded “dislocated workers” program that provides job training and job search assistance. The program was established a few years ago in response to downsizing by aerospace and defense-related firms.

The enterprise zone was established in 1987 to help revitalize business in five high-unemployment areas. Businesses in enterprise zones can obtain tax credits totaling $19,110 over five years for each unemployed person they hire from certain government-sponsored training programs.

Also, manufacturers can deduct from their state income taxes an amount equal to state sales taxes they pay on equipment purchases.

Another potential help is the Community Development Bank, created after Los Angeles failed to be included in a federal empowerment zone program that was created in response to the 1992 riots.

The bank--armed with $430 million in federal grants and guarantees and $310 million in lending commitments from commercial institutions--provides job-creating loans in those neighborhoods that were to be designated part of the empowerment zone, including Pacoima.