HMO to Open Center Near Downtown

Despite threatening to leave Los Angeles in a tax dispute two months ago, Prudential HealthCare instead has leased 300,000 square feet of office space near downtown for a regional customer service center that will employ 1,400 people.

The deal, which Mayor Richard Riordan’s aides say is the biggest infusion of jobs in the downtown area in a decade, was completed despite the firm’s assertion that the city’s business taxes are too high.

The center, expected to be announced today by Riordan, Prudential and Wells Fargo Bank, which owns the building, will be in the Garland Building on 7th Street west of the Harbor Freeway.

In persuading the company to locate the center there, city officials promised to spend $1 million to train workers from the Pico-Union neighborhood and other areas surrounding the building to work at the facility.

The company can save an additional $1 million on its tax bill because the Garland Building is in a revitalization zone set up after the 1992 riots. To get the tax break, the company must hire people who live within the revitalization zone.

Riordan economic development aide Rocky Delgadillo, who handled the city’s negotiations with Prudential, said the toughest competition to the downtown site came from the city of Norwalk.

The tax break and help on training made the Los Angeles deal sweeter, he said.

It was just over two months ago that Prudential’s health maintenance organization joined four other HMOs threatening to leave Los Angeles unless they were granted relief from the city’s business tax. Talks on the tax are continuing, with a compromise reportedly near.