Tuesday, October 18, 2016

More California Companies Hearing ‘Move to Our State’ Pitches

Proving that for every action there is a reaction, new business-bashing actions applauded by Gov. Jerry Brown have boosted efforts by other states to recruit California companies to their friendlier locations.

Each visiting out-of-state representative outlines how a California company will benefit by relocating to one of their communities. Economic Development agencies also promote the advantages to California firms of placing future expansions in their areas.

california-precip-map-not-copyrightedAlthough no official records exist regarding recruitment activity in California by economic development organizations, I've experienced several hundred touchpoints from parties in far-flung locations wishing to discuss the state’s business environment.

California industries being targeted include financial services, manufacturing, robotics, software, e-commerce, food processing, aerospace, pharma and biotech, plastics, electronics, distribution and even family-owned dairy farms.

In the past, officials from a couple of agencies would contact me every month, but now it’s often two or three times per week.

The states with the highest California-related activity are Texas with 62 agencies, Indiana following at 22 and Arizona at 18. I define activity as visits, phone calls or direct-mail campaigns.

But the true level of activity is greater. For example, organizations in Texas, Nevada and Florida – and economic development agencies in Phoenix, Indianapolis and Pittsburgh – make multiple overtures in California.

The representatives are able to project significant operating cost reductions when it comes to labor, workers’ compensation, unemployment insurance, health care, taxes, facility leases or purchases, regulatory compliance and transportation. Affordable housing in other parts of the country also make it easier for companies to attract and retain employees.

Officials in other states follow activity in Sacramento where Gov. Brown enacted about 800 new laws this year, some of which will result in more regulations and higher tax and energy costs for California companies.

They also are struck by the unfairness of California’s new one-size-fits-all minimum wage law, which forces companies in low-cost areas to pay big-city wages as if they were located in the West Coast’s most expensive cities – Los Angeles and San Francisco. The legislature and Gov. Brown put businesses that face competition from foreign companies at quite a disadvantage.

Without a change in California’s political climate, I expect more inquiries to come in from states seeking to grow their economic base.

The identities of the 244 economic development entities that represent touchpoints with Spectrum Location Solutions are as listed below:

  1. Alabama Power, Mobile
  2. Baldwin County Economic Development Alliance, Robertsdale
  3. North Alabama Industrial Development Association, Decatur
  4. Power South Energy Cooperative, Montgomery
  1. Access Arizona, Casa Grande
  2. Apache Junction Economic Development Dept.
  3. Arizona Commerce Authority, Phoenix
  4. Arizona Public Service (utility), Phoenix
  5. Arizona Sun Corridor, Phoenix
  6. Avondale Economic Development Dept.
  7. Central Arizona Regional Economic Development Foundation, Casa Grande
  8. Gilbert Office of Economic Development
  9. Glendale Office of Economic Development
  10. Greater Phoenix Economic Council
  11. Mesa Economic Development Dept.
  12. Queen Creek Mayor
  13. Salt River Project (utility), Phoenix
  14. Scottsdale Economic Development Dept.
  15. Surprise, AZ City Manager
  16. Tempe Economic Development Dept.
  17. Wickenburg Regional Economic Development Partnership
  18. Yuma Economic Development Dept.
  1. Centennial Economic Development
  2. Colorado Springs Regional Economic Development Corp.
  3. Commerce City Economic Development Dept.
  4. Erie Economic Development Dept.
  5. Longmont Economic Development Partnership
  6. Metro Denver Economic Development Corp.
  7. Office of the Governor
  8. Westminster Economic Development Office
  1. Brooksville-Tampa Bay Regional Airport
  2. Enterprise Florida, Orlando
  3. Florida East Coast Railway, Jacksonville
  4. Gulf Power, Pensacola
  5. Hernando County Economic Development Dept., Brooksville
  6. Jacksonville Port Authority
  7. Lake Wells Chamber of Commerce & Economic Development Council
  8. Manatee County Port Authority, Palmetto
  9. Office of the Governor
  10. Orange County Economic Development
  11. Orlando Economic Development Commission
  12. Power South Energy Cooperative, Miramar Beach
  13. Santa Rosa County Economic Development, Milton
  14. Sarasota County Economic Development Corp., Sarasota
  15. Petersburg Area Economic Development Corp.
  16. Tampa Bay Partnership, Tampa
  17. Tampa Hillsborough Economic Development Corp., Tampa
  1. Atlanta Economic Development Corp.
  2. Atlanta Economic Development Dept.
  3. Fayette County Development Authority, Fayetteville
  4. Georgia Dept. of Economic Development, Atlanta
  5. Rabun County Economic Development Authority, Rabun Gap
  1. Coeur d’Alene Area Economic Development Corp.
  2. Grow Idaho Falls Inc.
  1. Iowa Economic Development Authority, Des Moines
  2. Office of the Governor
  1. Bloomington Economic Development Corp.
  2. Carmel Community Relations and Economic Development
  3. Delaware County Economic Development Alliance, Muncie
  4. Duke Energy Economic Development, Indianapolis
  5. Duke Energy Economic Development, Plainfield
  6. East Central Indiana Regional Partnership, Muncie
  7. Fishers Economic Development Dept.
  8. Grant County Economic Growth Council, Marion
  9. Harrison County Economic Development Corp., Corydon
  10. Hoosier Energy Economic Development Dept., Bloomington
  11. Indiana Economic Development Corp., Indianapolis
  12. Indiana Municipal Power Agency, Carmel
  13. Indianapolis Chamber of Commerce
  14. Indy Partnership, Indianapolis
  15. Jackson County Industrial Development Corp., Seymour
  16. Madison County Corp. for Economic Development, Anderson
  17. Noblesville Economic Development Dept.
  18. Northeast Indiana Regional Partnership, Fort Wayne
  19. Office of the Governor
  20. Shelby County Development Corp., Shelbyville
  21. Vectren Economic Development (utility), Evansville
  22. Whitley County Economic Development Corp., Columbia City
  1. Black Hills Energy, Wichita
  2. Go Topeka Economic Partnership
  1. Bowling Green Area Chamber of Commerce
  2. Hopkins County Economic Development Corp., Madisonville
  3. Kyndle Economic Development for Northwest Kentucky, Henderson
  4. South Western Kentucky Economic Development Council, Hopkinsville
  1. Baton Rouge Area Chamber
  2. Cleco Power, Crowley
  3. Entergy (utility), New Orleans
  4. Livingston Economic Development Council
  5. Louisiana Economic Development, Baton Rouge
  6. North Louisiana Economic Partnership, Shreveport
  7. Southwestern Electric Power Co., Shreveport
  1. Kansas City Area Development Council
  2. Kirksville Regional Economic Development Inc.
  3. Lincoln County Economic Development, Troy
  4. Missouri Partnership, St. Louis
  5. Moberly Area Economic Development Corp.
  6. Nodaway County Economic Development, Maryville
  7. Northeast Missouri Economic Development Council, Hannibal
  8. Springfield Area Chamber of Commerce
  9. Louis Regional Chamber
  1. Lansing Economic Area Partnership
  1. Jackson County Economic Development Foundation, Inc. Pascagoula
  2. Mississippi Power, Meridian
North Carolina:
  1. Advantage West Economic Development Group, Fletcher
  2. Beaufort County Economic Development, Washington
  3. Charlotte Regional Partnership
  4. Davidson County Economic Development Commission, Lexington
  5. Duke Energy, Charlotte
  6. Greensboro Partnership Economic Development
New Mexico:
  1. Albuquerque Economic Development
  2. Mesilla Valley Economic Development Alliance, Las Cruces
  3. NM Partnership, Albuquerque
  1. Economic Development Authority of Western Nevada, Reno
  2. Henderson Economic Development Dept.
  3. Las Vegas Global Economic Alliance
  4. Nevada Office of Economic Development, Carson City
  5. Northern Nevada Development Authority, Carson City
  6. NV Energy, Reno
  1. Cuyahoga County Dept. of Development, Cleveland
  2. Greater Akron Chamber
  3. Greater Cleveland Partnership
  4. Jobs Ohio, Toledo
  5. Piqua Economic Development Dept.
  6. Team Northeast Ohio, Cleveland
  7. Tipp City Community and Economic Development Dept.
  8. Youngstown-Warren Regional Chamber
  1. Greater Oklahoma City Chamber
  2. Norman Economic Development Dept.
  1. Business Oregon, Eugene
  2. Confederated Tribes of the Umatilla Indian Res., Economic Dept., Pendleton
  3. Greater Portland Inc.
  4. Hillsboro Economic Development
  5. Klamath County Economic Development, Klamath Falls
  6. McMinnville Economic Development Partnership
  7. Port of Portland
  8. Southern Oregon Regional Economic Development, Inc. Medford
  1. Altoona-Blair County Development Corp.
  2. Armstrong County Dept. of Economic Development, Kittanning
  3. Greater Pittsburgh Chamber of Commerce
  4. Greater Reading Economic Partnership
  5. Penn-Northwest Development Corp., Mercer
  6. Pittsburgh Regional Alliance
South Carolina:
  1. Central South Carolina Economic Development, Columbia
  2. Myrtle Beach Regional Economic Development, Conway
  3. Oconee County Economic Development Commission, Walhalla
  4. Richland County Economic Development, Columbia
  5. Santee Cooper (utility), Moncks Corner
  6. Spartanburg County Economic Futures Group
South Dakota:
  1. Governor’s Office of Economic Development
  1. East Tennessee Economic Development Agency, Knoxville
  2. HTL Advantage (Haywood, Tipton, Lauderdale), ED Coalition, Covington
  3. Knoxville Chamber
  4. Montgomery County Economic Development Council, Clarksville
  5. Nashville Area Chamber of Commerce
  6. Tennessee Economic & Community Development, Nashville
  7. Tennessee Valley Authority, Nashville
  8. Williamson County Economic Development, Franklin
  1. Allen Economic Development
  2. Amarillo Economic Development Corp.
  3. Arlington Economic Development Dept.
  4. Athens Economic Development Corp.
  5. Austin Chamber, Economic Development Dept.
  6. Bastrop Economic Development Corp.
  7. Bay Area Houston Economic Partnership
  8. Bowie Economic Development Corp.
  9. Brownsville Economic Development Council
  10. Buda Economic Development Corp.
  11. Burleson Economic Development
  12. Burlington Northern Santa Fe Railway, Economic Development Dept., Fort Worth
  13. Cedar Park Economic Development
  14. CenterPoint Energy, Houston
  15. Copperas Cove Economic Development Corp.
  16. Dallas Regional Chamber
  17. Denton Economic Development
  18. DeSoto Economic Development Corp.
  19. Flower Mound Economic Development Dept.
  20. Fort Worth Chamber, Economic Development Division
  21. Frisco Economic Development Corp.
  22. Georgetown Economic Development
  23. Greater Houston Partnership
  24. Greater Irving-Las Colinas Chamber of Commerce
  25. Greater Waco Chamber Business Development
  26. Harlingen Economic Development Corp.
  27. Houston Port Region Economic Alliance
  28. Hutto Economic Development
  29. Katy Economic Development Council
  30. Kilgore Economic Development Corp.
  31. Kyle Economic Development
  32. Laredo Development Foundation
  33. Levelland Economic Development Corp.
  34. Lockhart Economic Development
  35. Longview Economic Development Corp.
  36. Lubbock Economic Development Alliance
  37. Matagorda County Economic Development Corp., Bay City
  38. McKinney Economic Development Corp.
  39. Midland Development Corp.
  40. Mount Pleasant Economic Development Corp.
  41. Nacogdoches Economic Development Corp.
  42. New Braunfels Economic Development
  43. Office of the Governor
  44. Oncor (utility), Dallas
  45. Pearland Economic Development Corp.
  46. Plano Economic Development
  47. Port of Houston Authority
  48. Richardson Economic Development Partnership
  49. Rio South Texas Economic Council, Edinburg
  50. Rockwall Economic Development Corp.
  51. Round Rock Chamber Economic Development Partnership
  52. Rowlett Economic Development
  53. San Antonio Economic Development Foundation
  54. San Marcos Partnership Economic Development
  55. Seguin Economic Development
  56. Southern Texas Economic Development Foundation, Beaumont
  57. Sugar Land Economic Development
  58. Team Texas, Austin
  59. Texas Economic Development & Tourism Dept., Austin
  60. Texas Secretary of State
  61. Victoria Economic Development Corp.
  62. Wichita Falls Economic Development
  1. Cache County Chamber, Economic Development, Logan
  2. Economic Development Corp. of Utah, Salt Lake City
  3. Office of Economic Development, Salt Lake City
  4. Office of the Governor
  5. Ogden Community and Economic Development Dept.
  6. Weber County Economic Development Partnership, Ogden
  1. Fairfax County Economic Development Authority, Tysons Corner
  2. Hampton Economic Development
  3. Hampton Roads Economic Development Alliance, Norfolk
  4. Isle of Wright County Economic Development, Isle of Wright
  5. Portsmouth Economic Development Dept.
  6. Roanoke Regional Partnership
  7. Rockingham County Dept. of Community Development, Harrisonburg
  8. Virginia Beach Economic Development
  9. Virginia Economic Development Partnership, Richmond
  10. Virginia Port Authority, Norfolk
  11. Virginia’s 2000 Business and Economic Development Alliance, Lynchburg
  12. Virginia’s Growth Alliance, Keysville
  13. Washington County Economic Development & Community Relations, Abingdon
  1. Greater Spokane Inc.
  2. Port of Sunnyside
  3. Yakima County Development Association
West Virginia:
  1. Jefferson County Development Authority, Charles Town
  2. West Virginia Development Office, Charleston
A state-by-state tally is below:

RankStateNumber of Organizations
12North Carolina6
15South Carolina6
20New Mexico3
27West Virginia2
29South Dakota1

One focus of this blog has been to address California’s difficult business environment, as addressed in the study, California Business Departures: An Eight-Year Review 2008-2015, (PDF) updated Jan. 14, 2016.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Saturday, October 15, 2016

Oh-oh! Jerry Brown’s Clone Might Become President

Do more people find Hillary Clinton unreliable, calculating, deceiving, morally bankrupt and lacking in core beliefs or Donald Trump immature, petulant, unqualified, temperamental and egocentric?

We will know the answer on election night.

More companies may leave the U.S. tomorrow the way California companies leave the state today
But when it comes to serious issues like job creation, it seems easier to have faith in Trump if he is elected president – provided economic advisors nudge him away from some of his protectionist trade policies.

I have no faith in Hillary’s predilection for higher taxes, more regulations and soaring energy costs, which could spark countless jobs moving offshore if she is elected. For evidence, let’s look to California because Mrs. Clinton echoes the business-bashing policies of Gov. Jerry Brown that have driven thousands of jobs out of state.

Mexico has been the top foreign destination for California companies for the last eight years. Jobs have also migrated to India, Costa Rica, Malaysia and other countries.

California isn’t losing just low-paying jobs like seamstresses and clerks. Companies now issue paychecks in Mexico to people who manufacture automobiles, aerospace parts, respiratory products, electronic components and surgical tools.

I’m experiencing an upsurge in California companies inquiring about relocating to Mexico – a reaction to the contempt that Gov. Brown and Democrat legislators show toward the private sector. Also, more business leaders exploring non-U.S. locations for their facilities probably reflects their fears that Hillary’s campaign will prevail.

If Mrs. Clinton wins, it’s akin to electing Jerry Brown to the presidency. Seriously, look at the similarities.

Both prefer stacking agencies with appointees looking for “villains” in corporate operations while ignoring labor union excesses. Both will expand Al Gore-like carbon cap-and-trade measures despite job losses, particularly in manufacturing. Both will provide never-ending subsidies to their crony capitalist friends as funds are funneled through the U.S. Energy Dept. and three California agencies – GO-Biz and the film and energy commissions.

Hillary is unlikely to shake up inefficient or fraud-prone agencies in Washington, similar to Gov. Brown’s indefensible lack of action in Sacramento. To them, calcified government is okay.

Will a President Clinton fire members of the National Labor Relations Board for their bullying of companies? No. Will she remove officials from the renegade Consumer Financial Protection Bureau for their unilateral regulatory abuses? No. And let’s not even pretend that she will reform the Justice Department or its FBI component, which turned blind eyes to her security violations.

Gov. Brown and Mrs. Clinton openly embrace Big Government, thereby making it nearly impossible to conduct true reforms.

Their conformity extends to minimum wages. Jerry Brown approved a one-size-fits-all minimum wage statewide, which will hurt companies in the San Joaquin Valley that already have difficulty competing with low-cost foreign challengers. Hillary wants to impose a uniform minimum wage nationwide – as if it costs the same to live in Scranton as it does in San Francisco – an irrational act sure to cause factory closings.

When it comes to expenditures, watch out. Mrs. Clinton will spend billions of dollars on labor-backed boondoggles like Gov. Brown’s pet project, the San Francisco-Los Angeles high-speed rail system – which no longer is high speed.

Under a Hillary-imitates-Brown scenario, dysfunctional federal programs will be preserved. Unneeded projects will be funded. Cost overruns will be ignored. Wrongdoers holding office will keep their jobs.

Companies will need to defend their interests with the persistence of Navy Seals to overcome the anti-business, anti-profit, anti-transparency, pro-union, pro-taxes, pro-spending, pro-regulation, super-leftist zealots that monopolize today’s policy debates.

If Jerry Brown-Hillary Clinton policies prevail, then we will see more jobs move to other nations not just from California but from other states, too.

This piece originally appeared in The Orange County Register.

One focus of this blog has been to address California’s difficult business environment, as addressed in the study, California Business Departures: An Eight-Year Review 2008-2015, (PDF) updated Jan. 14, 2016.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Thursday, October 6, 2016

Los Angeles KTTV Editorial - 'California Losing Companies & Jobs'

Now here is an editorial that gets to the point about California’s business departures, saying, "Governor Brown: Your attitude needs to change.... Creating a climate that is business friendly should come from the top and be a priority."

ch-11-point-of-view-calif-losing-jobsThe piece runs a lengthy news crawl at the bottom of the screen that shows the names of some of the companies that have relocated in full or in part out of California.

The commentary cites my study issued in January, entitled, “California Business Departures: An Eight-Year Review 2008-2015.”

The views expressed by the station’s Vice President and General Manager, Bob Cook, are in concert with the assessments held by business leaders throughout the state.

See KTTV’s “Point of View: California Losing Jobs.”

* * *

One focus of this blog has been to address California’s difficult business environment, which is worsening under the leadership of Gov. Jerry Brown and his friends in the legislature and bureaucracy.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Tuesday, September 13, 2016

Case Study: How Politicians Like Sen. Connie Leyva Motivate Companies to Leave California

Manufacturing is the number one industry in California to pack up and move to states considered to be friendly to business. Since such losses are happening more frequently, let's take a look at the record of a politician from a district that will soon lose a major employer. In this case, it’s Senator Connie Leyva who represents Colton.

But, first things first. Ashley Furniture has announced it will stop manufacturing in Colton and furlough 840 employees.

The company didn’t say that California’s difficult tax and regulatory environment figured into its decision, but I can’t see how any business leader could ignore such factors when deciding whether to stay in or leave the state.

A company statement said that closing the facility will strengthen its production capability and cost structure so as to compete effectively.

The work will be transferred to Wisconsin, Mississippi and North Carolina, all of which have reasonable labor rates, lower workers’ compensation costs, a thoughtful regulatory environment, lower energy costs and a merciful litigation environment.

I have no connection with Ashley Furniture. But in my experience I’m confident that the company could reduce costs by 20-35 percent for each job moved, helping it to remain competitive in the dog-eat-dog retail world.

Consider the experience of Bing Energy, a "green" fuel-cell company, that relocated its headquarters and manufacturing from Chino to Florida.

Bing CFO Dean Minardi said the “tipping point” in his decision was Florida’s friendlier laws and its move to phase out the corporate income tax. Minardi said of eliminating the tax, “It’s huge. The more income a company can keep the more people it can hire.... I just can’t imagine any corporation in their right mind would decide to set up in California today.”

My firm completed a study – California Business Departures: An Eight-Year Review 2008-2015 – that estimates more than 3,000 manufacturers diverted capital out of California because of facility relocations, opting for expansions in other states, or deciding to go elsewhere after considering California.

The difficulty of operating here keeps increasing as our politicians (virtually always Democrats) repeatedly pass costly measures. More tax hikes. More regulations. More fees. More penalties. Much of that translates into bureaucratic harassment.

Ashley Furniture gave employees 60 days notice and met regulations governing layoffs. I’m sympathetic and understand why workers organized a protest in front of an Ashley retail store.

But by protesting at the company’s door, the workers drew attention to the effects of Sacramento’s actions.

It would be nice to see protests at the doors of the politicians who support business-killing, economy-killing, job-killing policies. In other words, speak out against the causes of California’s job losses.

The top political figure I hold responsible for our deteriorating business environment is Gov. Jerry Brown. But he has, for want of a better word, collaborators.

Since Colton has lost jobs before, I decided to examine the work done by the state Senator who represents that community, Connie Leyva. Her website focuses on social issues relating to homeless students; the rights of housekeepers, nannies, and caregivers; and safeguarding children from predators.

All are noble causes, but I didn’t see efforts to boost a business’s prospects for success. In fact, Leyva voted for California’s absurd one-size-fits-all minimum wage, requiring employers in her lower-cost district to pay San Francisco-like high wages, especially when veteran employees demand to be paid more than unskilled workers.

I can't say that the "Leyva minimum wage" caused Ashley Furniture's decision, but it's reasonable to suggest a link between it and the upcoming out-of-state relocation.

According to the California Manufacturers & Technology Association’s legislative scorecard for last year, Leyva has a feeble record of supporting job-creating bills. Another report, one by the California Chamber of Commerce, shows that every time she voted for a business-friendly bill, she voted three times for business-hostile legislation.

As President John F. Kennedy proved years ago, lower taxes boost economic vitality. Thus, it was logical for me to scan the scorecard from the Howard Jarvis Taxpayers Association, which gave Leyva an "F."

Politicians failed to learn from the event seven years ago when CalPortland Cement closed its plant – also in Colton – because of high state-related costs.

Then, company President James Repman testified that staying in business "is becoming increasingly more difficult due to the myriad of regulations and agencies that oversee every aspect of our business.... The next new plant probably won’t be built in California meaning more good, high paying manufacturing jobs will be lost to Nevada or China or somewhere.”

The biographies for Gov. Brown, Sen. Leyva and most Democrats show that they’ve never run a company. Until voters who want good jobs become wiser about who they elect to office, we will see more businesses leave the state.

* * *

One focus of this blog has been to address California’s difficult business environment, as addressed in the study, California Business Departures: An Eight-Year Review 2008-2015, (PDF) updated Jan. 14, 2016.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Sunday, July 31, 2016

Two Reporters Walked Into a Bar ....

Well, not really. Two reporters moved from California to Texas and last week both of them wrote stories about companies moving to the Lone Star State.

In the Dallas Morning News, Jill Cowan wrote a piece about how financial firms are shifting their business operations out of hyper-expensive New York City to “lower cost, more business-friendly environments.” Although Phoenix won the top spot, Dallas, San Antonio and Austin came in second, third and seventh, respectively, for financial services job growth in the 2008-2013 period. If you are in the financial services industry, this is an excellent story to read. See “Y’allStreet: Could Dallas oust New York City as a global financial capital?”

Meanwhile, another former Californian, Katie Burke, reported on a high-growth software company, Rev-Ignition, relocating its headquarters from Ontario, Calif. to Texas. See the San Antonio Business Journal story “Paymentsoftware company relocates CA headquarters to San Antonio.”

My studies show that for many years Texas has ranked as the number one state to which California companies migrate.

* * *
One focus of this blog has been to address California’s difficult business environment, as addressed in the new study, California Business Departures: AnEight-Year Review 2008-2015, (PDF) updated Jan. 14, 2016.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. andin Europe and Asia.

Saturday, July 2, 2016

A July 4th Message About How ‘Freedom’ Is Under Siege for California Businesses

Once in awhile I come across a business owner's explanation of just how tough it is to run a commercial enterprise in California. I found one that amounts to “can't-put-it-down reading.”

The writer, Warren Meyer, described conditions relating to the regulatory requirements, such as getting county permits, high unemployment insurance costs, concern over rising minimum wages, and the fact that all employee lawsuits against this multi-state company were in California.

I'll let his words speak for themselves:

"Normally, the closure of a business operation or division is not grounds for a celebration, but in this case I am going to make an exception. At midnight on December 31, I not only drank a toast to the new year, but also to finally getting all my business operations out of Ventura County, California.

"Never have I operated in a more difficult environment. Ventura County combines a difficult government environment with a difficult employee base with a difficult customer base.

"It took years in Ventura County to make even the simplest modifications to the campground we ran. For example, it took 7 separate permits from the County (each requiring a substantial payment) just to remove a wooden deck that the County inspector had condemned. In order to allow us to temporarily park a small concession trailer in the parking lot, we had to (among other steps) take a soil sample of the dirt under the asphalt of the parking lot. It took 3 years to permit a simple 500 gallon fuel tank with [the California Air Resources Board] and the County equivalent. The entire campground desperately needed a major renovation but the smallest change would have triggered millions of dollars of new facility requirements from the County that we simply could not afford.

"In most states we pay a percent or two of wages for unemployment insurance. In California we pay almost 7%. Our summer seasonal employees often take the winter off, working only in the summer, but claim unemployment insurance anyway. They are supposed to be looking for work, but they seldom are and California refuses to police the matter. Several couples spend the whole winter in Mexico, collecting unemployment all the while. So I have to pay a fortune to support these folks' winter vacations.

"California is raising minimum wages over the next 2 years by $2. [Note: The actual amount was higher.] Many of our prices are frozen by our landlord based on past agreements they have entered into, so we had no way to offset these extra costs. At some point, Obamacare will stop waiving its employer mandate and we will owe $2,000-$3,000 extra additional for each employee. There was simply no way to support these costs without expanding to increase our size, which is impossible due to County regulations.

"A local attorney held regular evening meetings with my employees to brainstorm new ways they could sue our company under arcane California law. For example, we went through three iterations of rules and procedures trying to comply with California break law and changing "safe" harbors supposedly provided by California court decisions. We only successfully stopped the suits by implementing a fingerprint timekeeping system and making it an automatic termination offense to work through lunch. This operation has about 25 employees vs. 400 for the rest of the company. 100% of our lawsuits from employees over our entire 10-year history came from this one site. At first we thought it was a manager issue, so we kept sending in our best managers from around the country to run the place, but the suits just continued.

"Ask anyone in the recreation business where their most difficult customers are, and they likely will name the Los Angeles area. It is impossible to generalize of course, because there are great customers from any location, but LA seems to have more than its fair share of difficult, unruly, entitled customers. LA residents are, for example, by far the worst litterers in the country, at least from our experience. Draw a map of California with concentric circles around LA and the further out one gets, the lower the litter clean-up costs we have. But what really killed it for me in Ventura County was the crazy irresponsible drinking and behavior. Ventura County is the only location out of nearly 200 in the country where we had to hire full-time law enforcement help to provide security. At most locations, we would get 1 arrest every month or two (at most). In Ventura we could get 5-10 arrests a day. In the end, I found myself running a location where I would never take my own family.

"And so I got out. Hallelujah.

"PS - People frequently talk about taxes in California being what makes the state "anti-business." That may be, but I guess I never made enough money to have the taxes really bite. But taxes are only a small part of the equation.

"Update: Wow, reading this again, I left out so much! An employee once sued us at this location for harassment and intimidation by her manager – when the manager was her sister! It cost me over $20,000 in legal expenses to get the case dismissed. I had an older couple file a state complaint for age discrimination when they were terminated – despite the fact that our entire business model is to hire retired people and the vast majority of our employees are 70 and older. And how could I have forgotten the process of getting a liquor license? I suppose I left it out because while tedious (my wife and I had to fly to California to get fingerprinted, for example), it is not really worse than in other places – liquor license processes are universally bad .... We gave the license up pretty quickly, when we saw how crazy and irresponsible much of the customer base was. Trying to make the place safer and more family friendly, we banned alcohol from the lake area, and faced a series of lawsuit threats over that."

Note: It's irrelevant that this piece was written more than two years ago because since then the business environment in California has gotten worse.
*  *  *
One focus of this blog has been to address California’s difficult business environment, as addressed in the new study, California BusinessDepartures: An Eight-Year Review 2008-2015, (PDF) updated Jan. 14, 2016.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum LocationSolutions. Joe helps companies find great locations in which to grow. Also, Joe has been a Keynote Speaker for more than 20 years – see A Speaker Throughout the U.S. and in Europe and Asia.

Monday, June 27, 2016

Inspirational Californian Must Relocate – Here Is Why He’s Moving to Georgia

This is the most touching “relocation story” ever to appear on this blog.

First – it’s been said time and again that California’s housing is so unaffordable that poor people are the ones who are hurt the most, a situation aggravated by the state’s land-use regulations and tax policies.

Marty TurciosThis is an account of a challenged couple, Marty Turcios and his girlfriend Melody Lacy, who are planning to leave the state because of high housing costs. They expect to move to Georgia by late September or early October and do so in a way that allows them to keep helping disadvantaged people.

Marty is leading a full life giving golf lessons to many types of limited-ability people every year, which he does cheerfully despite having cerebral palsy.

A Golf Channel special shows Marty giving golf instructions to high school students, to people with developmental disabilities and to disabled veterans, many of whom have post traumatic stress disorders. "I treat them like golfers and not like people with disabilities," he said. His teaching includes instructing people in wheelchairs how to putt. See the remarkable video “Golf in America: Marty's Story.”

With a Masters degree in Recreational Therapy, Marty was a coach at the University of California at Berkeley and at a local high school. Also, he created the Marty Turcios Therapeutic Golf Foundation based in Richmond, about 20 miles from San Francisco.

Now he and Melody want to move to Augusta, Georgia. Why? Well, besides it being the Home of the Masters and a place brimming with golf courses, here is what Marty said to his Facebook followers about housing:

“We will miss you and our students so much. We, as a disabled couple, have spent five years trying to figure out how to stay in the Bay Area. We have tried everything to find affordable rental, to no avail, we tried to figure out how to buy a home around here, which is cheaper than renting, to no avail. We tried to build a container home on friends' land, but due to the restrictive building codes and lack of water that did not work out either. We finally gave up . . . and looked at moving to Augusta. This has been a long, hard decision and now we are under a deadline to move out so we are hoping for a little help from our donors to relocate the program. Augusta has a huge veterans center and a large disabled population. Please accept our sincere apologies for having to leave and try to wish us well.”

While visiting their potential new turf, he met with Augusta University Athletic Director Clint Bryant and looked at housing. Here is what they posted about their visit:

We just found a home in Augusta for less than $25k that is perfect for us but it might go soon at that price in that lovely neighborhood. We need to raise the money to put down on this house right away!”

“We are finally back from Augusta, but we are not feeling nearly as ‘at home’ as we felt in Georgia! We have so much to tell you all about Marty's multi-level work with Augusta University and Marty's up-and-coming programs with Wedges and Woods! The home we chose is only blocks from the athletic and sports offices on the beautiful Forest Hills Golf Course.

Think of it – an inexpensive home near Forest Hills, which Augusta Magazine repeatedly names the city’s “Best Public Golf Course.” Here is a summary of the appeal to help finance the move:

For more than a decade Marty Turcios, who was born with cerebral palsy, has taught golf lessons to disabled people throughout the Bay Area including veterans with traumatic brain injuries, teens and adults with autism, Down's syndrome and other severe disabilities including amputees and stroke survivors. “Our home in Richmond is being sold and we are moving to Augusta, Georgia where there is a huge veterans center and affordable housing among eight golf courses. We have to go due to the cost of housing in the Bay Area and we will continue to teach golf, as therapy, to over a hundred separate individual disabled people every year. We are sad to go. Please send us off with enough money to get set up in Augusta in celebration of Marty Turcios's service to the Bay Area and particularly Contra Costa and Alameda Counties. We will use the money to rent a truck ($2,771), down payment on a house ($2,250), send out a mailing with the new address ($350), for a grand total of $6,371 dollars. This move means housing security to us, which we, at age 56 and 60, have never yet known. We will be so thankful to everyone that helps and remember that every donation is totally tax deductible because we are a public charity under the 501(c)3 laws of the Federal Government. We have served the Bay Area at no cost to the disabled participants at all for over a decade. Now we need to move and we are sorry to leave you all.”

CerebralPalsy.org has a remarkable story about Marty – “Golfer swings past physical challenges.”

It appears that Augusta already has begun giving Marty and Melody a warm welcome based on WRDW-TV coverage: “Therapeutic Golf Foundation relocating from California to Augusta to rehabilitate those with disabilities.”

Note: Contributions can be made through PayPal on this page at the Marty Turcios Therapeutic Golf Foundation’s website.

Sunday, June 19, 2016

Another Los Angeles-Area Tech Company Creates Lots of Jobs . . . 800 Miles Away & Out of State

PCM, an El Segundo-based IT services provider, will open a sales center in Rio Rancho, New Mexico this summer, with the first of more than 200 employees coming on board in August.

El Segundo to Rio RanchoGov. Susana Martinez and other state officials, on a recent trade mission to California, asked the company’s CEO to consider New Mexico.

PCM provides technology support to clients that include the NFL’s Cincinnati Bengals and Green Bay Packers, Sea World, Wendy’s, GE, and others. Salaries of the sales positions will range between $45,000 and $65,000.

Frank Khulusi, CEO and founder of PCM, said, “Meeting with Gov. Martinez and her team in California was a game changer. Learning about New Mexico’s improved business environment and talented workforce was a deciding factor in expanding our operations to this state.”

The publicly traded company will generate $2.2 billion in sales this year.

See the complete story at the Albuquerque Journal"Calif. tech company brings more than 200 jobs to Rio Rancho.”
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One focus of this blog has been to address California’s difficult business environment, as addressed in the new study, California Business Departures: An Eight-Year Review 2008-2015, (PDF) updated Jan. 14, 2016.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow.