Exit strategies

With the impending departure of Fidelity National Financial to Jacksonville, Fla., and the speculation that other large employers may follow their lead and flee, one has to ask, how friendly is this community to businesses?

Rumors abound that Santa Barbara’s other Fortune 500 company, Tenet Healthcare, may also be pulling up stakes, but company spokesman Steven Campanini denied that.

“A move is not under active consideration,” he said. “Leaving Santa Barbara is not even on our radar screens.

“Although,” he laughed, “I’m not happy with the weather this week.”

June gloom aside, the weather is undoubtedly one of our region’s greatest advantages. But despite the lush climate, is Santa Barbara a friendly place to do business?

It ranked 31st on Forbes magazine’s 2003 “Best Places for Business and Careers,” based on a variety of weighted criteria. The areas in which Santa Barbara scored the best were crime rate and education, and it ranked lower on cost of doing business and housing afford-ability. A 2002 metropolitan — rather than city — ranking, conducted by Forbes and the Milken Institute, also ranks the Santa Barbara-Santa Maria-Lompoc area at No. 31.

Some doubt the veracity of this type of ranking.

“There’s no real scientific measure of business friendliness,” said Bill Watkins, executive director of the UCSB Economic Forecast Project. “The problem with those sort of ranking systems is that they’re based on somebody’s value judgments of what is best. Given our environment, (our level of business-friendliness) is appropriate. If unemployment were higher it might be different.”

A report by the Public Policy Institute of California appears to support Watkins’ position, stating, “The idea that there is a single business climate in the state that is applicable for all businesses and regions is too simplistic.”

Despite the oversimplification, when the California Technology, Trade and Commerce Agency was questioned about the number of businesses leaving California, it said data was not tracked by the government, instead pointing to research from Fortune magazine (No. 1 state with 53 Fortune 500 companies; 15 of the “100 best companies to work for”); Inc. magazine (No. 1 for “fastest-growing companies”); and Forbes (five of the top 25 fastest-growing tech companies).

“We consider it to be very friendly here,” said Raytheon spokesman Ron Colman. “We have no plan at all to move.”

While Raytheon Vision Systems, formerly SBRC, recently purchased a new building in Lompoc, and plans to locate 40 employees there by year-end, Colman said that expansion was predicated on the specific need for a clean-room facility and has no implication for future expansion into the North County at the expense of the South Coast.

“In a weak economy we tend to be a little more friendly,” said Steve Cushman, executive director of the Santa Barbara Region Chamber of Commerce.

“In the North County, there’s more available square footage … they’ve created more incentives … the approval process is faster and more dependable.”

Regarding the permitting process, Dave Gustafson, Santa Barbara’s assistant community development director, cited ongoing efforts to streamline the development approval process.

“I don’t think we’re all that unpredictable,” he said.

On the housing issue, he continued, “We are constantly looking at land-use strategies to try to accomplish affordable housing for the workforce.”

State-mandated constraints such as insurance and workers’ compensation are also a business concern over which “the city has no control,” said City Councilman Dan Secord.

“Employers must pay the freight for richer benefits to the injured worker,” he said.

Secord urged an active business retention program for the city to “express the city’s caring for business, whose productivity in jobs and taxes make the other city services possible.”

Thus far, Goleta city officials have not announced any plans for business retention or future outreach programs. Calls to Mayor Jack Hawxhurst for comment on business issues were not returned.

The city of Santa Barbara is planning a series of meetings with different business segments in the community to see how it can best address their needs, Gustafson said.

“Businesses want to be appreciated,” Cushman said.

Cushman cited Alias-Wavefront and Openwave (formerly Software.com) as companies that followed a familiar scenario of starting here, getting acquired or merging, and eventually having the parent company question the expense and travel inconveniences of being located in Santa Barbara.

While Tenet seems to be staying for the moment, “Vetronix is on the edge,” Cushman said. “We’re hoping they’ll stay.”

When questioned about the city’s efforts to try to retain Fidelity, senior vice president Daniel Kennedy Murphy said, “As far as I know, nothing really was done.”

Meanwhile, Fidelity chairman William Foley was quoted by Jacksonville’s First Coast News as saying, “Jacksonville actually wants to have us. California likes having us, but it isn’t very concerned about not having us.” Foley declined to return a Beacon reporter’s phone calls on this matter.

“I think it (the Fidelity move) was a surprise to us,” Gustafson said.

“I think there was not anything we could have done to stop it. Florida gave them $12 million worth of subsidies … We don’t have the financial tools to compete,” he added.

As for preemptive gestures to secure Tenet’s future in Santa Barbara, Campanini said there’s been “no interaction with the city that I’m aware of. You would have to ask the mayor’s office.”

Gustafson answered queries to Mayor Marty Blum.

“Over time there’ve been lots of meetings with Tenet. Many, many meetings with them,” he said.

“I don’t know, to be honest with you, about with Fidelity. I believe there’s one pending with Tenet’s new chairman.”

On the business growth vs. lifestyle issue, he said, “If we were looking to attract large Fortune 500 companies there might be environmental issues to that growth. This gets into the whole growth, and quality of life balance.”

Originally published in South Coast Beacon