Courting L.A. companies in San Bernardino.

Like other parts of the Inland Empire, San Bernardino County often targets Los Angeles and Orange counties in promoting its own economic development

San Bernardino County grew immensely along with the rest of the Inland Empire during the 1980s, and the county is still touting the rapid growth and record performances of industries like housing and construction during the decade.

Like all Southern California locations, of course, the county is connecting with the same issues of government regulation, workers' compensation claims and the perceived high cost of doing business in California.

San Bernardino County, however, often promotes itself as a more cost-effective location than other Souther California counties.

The San Bernardino County Department of Economic and Community Development, for example, says the county is "the most cost-effective location in the Greater Los Angeles area for commercial/industrial and office space development."

"With only 7 percent of Southern California's population, the county accounts for 20 percent of industrial building," the department notes. Among the regional headquarters that have been attracted to the county are Frito-Lay, Target, Hyundai, United Parcel Service and L.A. Gear.

City and county efforts

As the region's economy matures, commercial and industrial employers are being joined by professional service firms, finance centers, aerospace and electronic manufacturers, and research and development corporations. Over the past decade, the county has also recorded the highest percentage gain in small business employment.

Among the measures adopted and programs implemented to encourage economic development is the Agua Mansa Enterprise Zone, a state designated area which provides significant financial incentives to business -- including tax credits for sales and use taxes.

Many cities have created redevelopment areas, offering various types of incentives to business and industry. The county's incentive programs include both taxable and tax-exempt industrial development bonds, business expansion revolving loans, and small business administration financing.

The county also emphasizes its labor pool in efforts to attract business. Recent decades of growth have created a labor pool of skilled workers, many attracted by the county's affordable housing and its lifestyle.

Killer commutes

Even though the region's job creation rate is double that of the state as a whole, more than 20 percent of those who move to San Bernardino County still endure daily freeway commutes of more than three hours. In order to escape hours of stop-and-go commuter traffic, residents of the county will typically accept wages 5 to 15 percent lower than those earned by workers in Los Angeles and Orange counties.

In transportation, too, the county likes to compare itself to its neighbors to the south. The economic development department points out that is a major highway, air, and rail hub that constitutes a "state-of-the art transportation system that is not limited by the overcrowded conditions that currently plague Los Angeles and Orange counties."

United Parcel Service, for example, chose Ontario International Airport in San Bernardino County for its $53 million West Coast regional facility. The 160-acre site combines air fleet loading facilities, air package sorting, and a ground delivery center.

Ontario International is an increasingly preferred alternative to Los Angeles International Airport and is served by a host of major airlines. The county's pivotal Southern California location also makes it a truck transportation hub. Two of the Southland's largest freight consolidation and truck transfer terminals are in the county, as well as more than 80 independent trucking firms.

In addition, the California Commerce Center in Ontario has been federally designated as part of the Port of Long Beach Foreign Trade Zone #50-1, allowing goods in transit throughout the United States to remain duty free and unrestricted by quotas.

San Bernardino County voters approved a 1/2-cent sales tax initiative devoted to transportation improvements. The taxes will contribute more than $2.4 billion toward railway and mass transit projects during the next 20 years. More than $300 million of this will be spent in the Inland Empire on commuter rail projects.

Among the county's business financing incentives are taxable development bond financing to $100 million, SBA financing to $500,000 and county business expansion loans from $50,000 to $500,000. The financing covers a broad range of projects, at terms from five to 30 years, with no pre-payment penalties.

Tax-exempt bonds

The industrial development bonds provide tax-exempt financing for expanding manufacturers in the county, restricted to manufacturing/assembly and energy related projects. The bonds also are limited to land acquisition, building construction or acquisition and capital equipment purchases. Projects are not limited to size but do require a letter of credit; the loans are assumable.

The taxable development bond program has developed a $100 million pool through a joint public/private partnership to finance projects which create new employment and/or strengthen the local economic base. The financing provides access to the lowest capital market rates available, typically 80 percent of prime, and features variable rate financing with fixed rate option, depending on the size and credit support for the project.

The county's Business Expansion Loan Program provides direct financing for credit-worthy business interested in expanding or relocating in San Bernardino. The program is designed to enable the county to "fill the financing gap" between private lending sources and the owners' investment in the project.

It provides the borrower with below-market-rate financing that can be used for land acquisition, building acquisition or construction, capital equipment and working capital in some cases. The program requires commercial lender participation and county funds must be fully secured by real property, personal property or a letter of credit. Specific terms are negotiated on a case-by-case basis and are evaluated by the number of jobs expected to be created by the proposed expansion.