Southland Expansions, Relocations Surge
Another positive sign from the economic recovery room: Southern California enjoyed a surge in the number of major expansions by local companies or arrivals by out-of-town businesses last year.
Led by technology and entertainment firms, 167 major expansions or relocations representing 9,500 new jobs were announced in 1996 for the counties of Los Angeles, Orange, Riverside, San Bernardino and Ventura, up from 101 expansions and about 5,700 jobs in 1995, according to the Economic Development Corp. of Los Angeles County.
The momentum has continued, with 39 major projects announced so far this year, the local booster group said in a report to be released today. If that pace continues, more than 200 big expansions or relocations by out-of-towners will be announced this year.
“This tells an interesting story,” said Jack Kyser, chief economist for the private nonprofit jobs-promotion group. “Los Angeles is on the right track.”
EarthLink Network, for example, left cramped offices in Los Feliz last year for a cavernous new headquarters in Pasadena to house a work force that now tops 600. The 3-year-old Internet-service provider saw its membership swell 650% during the year, to 227,000 from a mere 30,000 at the end of 1995.
“1996 was an incredible year for EarthLink,” said Sky Dayton, EarthLink’s founder and chairman.
What’s more, these are just the big transactions valued at $1 million or more.
“This is a very conservative figure,” Kyser said. “For every big expansion, you have easily three or four smaller ones” that are more difficult to identify, he said.
The expansion explosion is a symptom of renewed health in the economy as well as more aggressive efforts in the areas of economic development and local image enhancement, Kyser said. The region’s busy international trade scene also played a role.
The Economic Development Corp. tracks expansions and relocations by reviewing reports from publications, industry reports and real estate brokers. EDC employees contact each company to verify the information.
Los Angeles County got 107 of the expansions, compared with 77 in 1995; Orange County expansions jumped to 47 from 12.
Corporate expansions were announced in several industries last year, with technology posting the most, at 30.
“This is a telling sign of the creative ferment in this still key local business segment,” Kyser said. Some of the largest projects in that sector included Hughes Communications’ 250,000-square- foot DirectTV unit in Long Beach and a 120,000-square-foot expansion by Rockwell Semiconductor in Newport Beach.
Entertainment staged 22 of the expansions; furniture manufacturers, 11; and apparel companies and transportation service firms, 10 each.
The year also brought companies to Southern California from New Jersey, New York, Massachusetts, Nebraska, Oklahoma and Canada. During the same period, 31 companies left the region for other areas, Kyser said.
Drawn to the proximity to Asia and Latin America, Omaha-based Inacom Corp. in October opened a state-of-the-art 180,000-square- foot distribution operation in Ontario that allows the computer wholesaler and technology consultant to fill orders in as little as five minutes. The business expansions have affected the region’s commercial real estate market, pushing down industrial vacancy rates to 7.2% in Los Angeles County and 8.8% in Orange County as of Dec. 31.
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Growth Spurt
Major corporate expansions or relocations--involving construction or leases valued at $1 million or more--are rising in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties:
1997 estimate: 220
Source: Economic Development Corp. of Los Angeles County
