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SCVEDC reveals companies it has helped

In a spot check, businesses confirm the EDC’s help has truly paid off

Posted: May 26, 2013 2:00 a.m.
Updated: May 26, 2013 2:00 a.m.

The operations and HR department on the first floor at Precision Dynamics as it appeared last August. Precision Dynamics is just one of the nearly 60 business that were helped by the SCVEDC in 2012.

 

A spot check of the companies the Santa Clarita Valley Economic Development Corporation said it worked with in 2012, to attract and retain companies and jobs locally, appears to support the agency’s report.

When the Santa Clarita City Council approved $600,000 of funding on April 9 for the Santa Clarita Valley Economic Development Corporation over the next three years, two members of the council stipulated that the organization also account for the work being done each year.

A list of some of the companies the SCVEDC worked with in 2012, and the jobs retained or created, was turned over to the city and a copy of the list was given to The Signal by Councilman TimBen Boydston.

“If the EDC was instrumental in creating these jobs, it’s a good investment of money,” Boydston said.

“I wanted the EDC to create the list so taxpayers are assured (that) if they’re using taxpayer money, it’s being effective,” he said.

The EDC reported that it helped 59 businesses and to create 2,881 jobs locally. Just over one-third of those jobs are new positions to the Santa Clarita Valley, said Jonas Peterson, president and CEO of the SCVEDC.

The list presented to the City Council was a partial list representing 45 companies and 1,474 jobs.

“The list is a partial list of our work from 2012,” said Jonas Peterson, president and CEO of the SCVEDC. “It is focused on the projects that we believe are of most interest to the Council and have not requested confidentiality.”

In the interest of transparency, however, the agency did turn over a complete report to The Signal that reflected the 2,881 jobs and 59 businesses that the SCVEDC reported it helped last year.

Regents Aerospace CFO, Steve Smith, confirmed that the EDC helped his Valencia firm create the 52 new jobs by connecting them with a business consultant who helped the company take advantage of Enterprise Zone tax credits for hiring.

“It was the greatest benefit helping us to expand,” Smith said. “The tax benefits help us be more competitive, keep our overhead costs down and get more business.”

The aerospace firm had the option of moving out of the area, said Jon Collard, president of Valencia-based American Tax Incentives. Collard’s firm specializes in enterprise zone and other tax credits for companies, and is also on the board of the EDC.

Former Precision Dynamics’ CEO Cecil Kost confirmed last year that the SCVEDC worked with its brokerage firm CBRE in its search to find the “optimal location” in the region. As a result, the company — with revenues of $200 million annually — signed a seven-year lease valued at $10 million, bringing 265 positions to the SCV, the CEO said.

Also included on the list were several smaller local companies the organization reported that it helped to “retain” – firms that, on the surface, seemed unlikely to consider leaving the SCV.

Retention services, however, is a broad term describing a number of services provided to help a business remain, stay in business, or grow, Peterson said. In the end, those efforts keep jobs in Santa Clarita, he said.

Some of those companies were able to grow by taking advantage of the Enterprise Zone tax credits when the program finally expanded valley-wide last year, Collard said.

Other companies had not been taking advantage of the sales and use tax credits or other programs available to them, he said.

The EDC was an important part of the effort to keep Arvato-Bertlesmann, who was exploring other locales after their lease ended, said Craig Peters, executive vice president with CBRE Inc.

“We represented the building owners and Arvato’s lease was nearing expiration,” Peters said. “We reached out to Jim Brown (at the EDC) and asked him to make contact with local management team to address the potential incentives available to companies within area.”

The EDC identified areas of significant savings for the company via benefits offered in the area, he said. As a result, the company remained in Santa Clarita.

“They reached out and showed Arvato that it was important in the community,” Peters said. “A lot of times that’s lost on companies in California.”

Karen Bryder president of SCV Locations, a studio and film location management company, said the EDC’s efforts allowed them to seal a deal to film a television series locally.

Her firm manages several properties in the area for the Bristol Group, one of which had been converted into a sound stage in the Valencia Industrial Center.

In order to allow a television production company to park trailers and large vehicles in the lots overnight, Bristol Group needed to seek approval for a variance in the area’s CC&Rs, or Covenants, Conditions and Restrictions.

“I called (manger, business attraction for the SCVEDC) Jim Brown’s home at close to 9 p.m. on a Friday evening,” Bryder said. “He listened to me, immediately got the problem solved for us and called me right back.”

The production company was going to go to Delfino Studios in Sylmar if the parking issues couldn’t be resolved, she said. The whole deal was at risk.

With the EDC’s help, Bryder said, the Bristol Group was able to sign a deal for a television series called “Wedding Band.”

While the TBS cable channel series was not renewed in 2013, the production did create 135 jobs and pump millions of dollars into the economy in 2012, she said.

“There’s a huge percentage of people in the industry who live here,” Bryden said. “The show employed local people who were able to work close to home and spend their earnings here.”

Of the $8 million budget, two-thirds of it went directly into the community, she said. The other third was spent on equipment that was mostly rented from outside the area.

“Without their help, I guarantee we would have lost this show,” Bryden said. “We would have lost this production in the Valley.”

Moving forward, Peterson said the EDC expects a couple “very significant projects to be realized” within the next quarter.

Due to confidentiality agreements with commercial brokers and supporting agencies, names of the companies often cannot be released prior to a final deal, say those parties who work on many of the deals.

In some cases, companies don’t want to alert their competition or employees prematurely that they might be moving or expanding. Others just plain don’t want the publicity, sources report.

While the EDC provides a number of services to support business, and attract new companies to the area, it knows that creating new jobs is a priority.

“We recognize the priority first and foremost is to create jobs,” Brown said. “We also work to grow our existing businesses along the way.”

The EDC is very proactive compared to other economic agencies that Collard’s firm works with throughout the state, he said.

EDC’s in other cities wait to be contacted for help, he said. Locally, there’s constant outreach going on; a lot of meetings and visits to businesses by the EDC.

The staff sits down with business owners and management teams, listening very attentively to their needs and looking for ways in which they can “help move the ball,” said Tom Paravato, CFO with American Tax Incentives.

“We work with EDC’s throughout the entire state,” Collard said. “No one is more proactive; no one brings more to the table than our local EDC as far as experience, outreach and value.”

 

 

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