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California: Still Shining - The Golden State Keeps Growing

Oct/Nov 07
(page 2 of 2)
Bio, Bridges, and Buildings
According to the Milken Institute, San Diego remains the top biotech region in the country - and it plans to hold that distinction. The area continues to draw new companies, like Pharmatek Laboratories, a pharmaceutical chemistry development corporation.

San Diego State University (SDSU) and Gallup University are tackling the region's growing work force needs with a new M.B.A. for Executives in Life Sciences. "With this program, our goal is to produce leaders who have an in-depth understanding of the best practices that can be used in accelerating product development and market launch of new biomedical and life science products that are critical to the improvement of health and key to the growth of the global biotech industry," says Gail Naughton, Ph.D., dean of the College of Business Administration at SDSU.

Beyond educational infrastructure, San Diego is undertaking critical transportation infrastructure fixes. State government awarded the region $451.5 million to fund the projects, including the 10-mile express Otay River Bridge that connects South Bay to Otay Mesa and the international border. "The Otay River Bridge is more than just an engineering feat; it's an international gateway," says South Bay Expressway CEO Greg Hulsizer. "The bridge will improve regional mobility by filling a gap in San Diego's freeway system and will provide a new, convenient connection for businesses across eastern Chula Vista and Otay Mesa to employment centers across the border."

San Diego is also beefing up its office space. The Ryan Companies, a commercial real estate developer, broke ground on RiverView at Santee in East San Diego in December 2006. It's a 1.9 million-square-foot, master-planned mixed-use campus designed for technology, R&D, and professional offices. "We can attract corporate users at 20 percent below market rents and a large employment base in the surrounding area," says Matt Reid, vice president of development for Ryan's West Division. "I think the land prices are going to drop in the Southern California area and opportunistic companies will begin locating here."

Southern Development
Los Angeles is known worldwide as a Hollywood hangout, but the region's manufacturing jobs are on the rise in 2006. According to Manufacturing in Southern California, a report issued by the Los Angeles Economic Development Corporation (LAEDC), Los Angeles is the third-largest manufacturing "state," behind the entire state of California and Texas.

"Orange and Ventura Counties, and the Riverside-San Bernardino area all added factory jobs during 2006, which was counter to the national trend," says LAEDC Chief Economist Jack Kyser. "What are the implications of this large factory work force? This sector represents a huge market for all types of suppliers and means that local manufacturers can find inputs right in their backyard."

The Inland Empire - San Bernardino County and Riverside County - and Ontario markets are benefiting from a bustling distribution hub. There's plenty of undeveloped land there at favorable rates compared to adjacent coastal communities. For its part, San Bernardino County has three international airports and nearby access to the ports of Long Beach and Los Angeles. More industrial land is under development there than in Los Angeles, Orange, and San Diego Counties combined.

One developer, Hillwood Investment Properties, plans to complete a total of 12 industrial buildings totaling 5.7 million square feet in four different developments in the Inland Empire by the end of 2008. "With the completion of the Interstate 210 extension and increased imports from Asia arriving at the Southern California ports, this is a perfect time to add space in the Inland Empire," says John Magness, senior vice president of Hillwood Investment Properties. "Hillwood has close to 1,000 developable acres in Southern California and is aggressively seeking other land opportunities in the area."

The City of Hesperia is challenging companies to think outside the basin - the Los Angeles basin, that is. Located 90 miles northeast of Los Angeles and 35 miles north of San Bernardino, Hesperia is attracting distribution, manufacturing and commercial enterprises with its productive, low-cost labor force. Developers receive fast-track service on permitting, and companies looking to set up shop quickly will find plenty of existing industrial and commercially zoned properties.

When you dig beneath the headlines that magnify the challenges, California's story is one of growth and opportunity. "California is still growing where there is available property," says Thomas Loo, co-managing shareholder in the Los Angeles office of Greenberg Traurig. "You see businesses locating inland, filling in around large metropolitan areas now. California is one of the largest economies in the world because of the climate, the melting pot of talent and the innovation."