Job growth depends on local solutions: cities and economic development departments can keep business in California.

To encourage greater job growth in California, the state should be initiating programs, tax breaks and incentives that will encourage business expansion and retention. However, Sacramento officials are not piloting these programs, and the economic climate is suffering.

For this reason, the commercial real estate industry needs to look to its local cities and economic development departments for creative solutions to keep business in California.

It's no secret that business in the state is at risk. Record increases in workers' compensation costs, an unprecedented state budget shortfall and rising energy and health care costs are affecting business growth and retention.

These factors, along with increasing unemployment and the threat of redirecting local redevelopment funds to supplement the state budget, have affected business in the state severely.

According to Joel Kotkin, a senior fellow at the Davenport Institute for Public Policy, the state is rapidly reclaiming its early 1990s reputation as one of the worst places in the country to invest in and develop a business. Not great news if your job is to develop, sell, buy or lease commercial real estate.

Primarily focused on business growth in their local community, economic development departments work with companies to implement customized business attraction programs, including a creative blend of incentive packages.

Some business owners and real estate professionals may not realize the extent of federal, state, local and private programs in place within many California communities.

Working with local city managers and economic development directors could be time well spent if it results in a customized package of business incentive programs and tax breaks that encourage a business to locate, retain or expand in the state.

Now is the time to put these valuable local resources to work, especially considering some of the business-saving solutions available today.

Time is Money

The longer a business owner takes to build a new facility or a developer takes to secure the right development opportunity, the larger the increase in the final cost of the project.

In many cases, the pre-development phase can include long permit-approval processes and implementation of expensive environmental impact reports.

To combat this, proactive economic development teams expedite the process. Many cities facilitate team meetings right from the start, bringing together all departments involved in the decision-making process.

Through this review of site plans and proposals at one time, the owner or developer receives input in a more productive and efficient manner.

In some cities, programs like Riverside's On Track Program provide a single point of contact who expedites the project-approval process.

For Riverside, this has been extremely effective for large-scale mixed-use developments and company expansions for which a number of city departments may be involved.

The point person can aid in communication, fast-track plan checks and building-permit approvals and, when problems arise, quickly facilitate solutions. To that end, Riverside's pre-development process has been reduced dramatically from 180 to just 35 days.

Work-Force Incentives

Many economic development teams offer work-force incentives that help businesses retain and recruit qualified employees as well as provide tax breaks and hiring incentives.

For example, the city of Riverside works closely with Riverside County's Workforce Development Center and Riverside Community College, both of which offer programs to assist employers with employee recruitment and training, job screening, marketing, job training incentives and customized training programs.

Through these programs, businesses can reduce their work force hiring and training costs significantly.

Labor Force

In addition to public-private partnerships, businesses gain from a wealth of well-qualified employees when they locate near colleges and universities.

One example is the 56-acre University Research Park, a joint venture established in 1998 between University of California, Riverside, Riverside County and the city of Riverside.

The research park, built next to the university, provides numerous incentives, such as labor, research and incentive programs.

Companies have been able to enjoy the technology transfer of university research to marketable products keeping technology jobs within the city.

For example, Surado Solutions is building a 35,000-square-foot corporate facility at the research park for just this reason. In addition to a well-educated labor pool, Surado realized significant cost savings through the city's support programs. Together, the programs and packages provided by Riverside offset Surado's overall cost of doing business in California.

Many other federal and local programs, such as those listed below, are designed to help businesses succeed. When involved in the site selection or expansion process, businesses should consider talking with the local economic development team to understand how these programs can help minimize total business costs.

Industrial Development Bond Financing. This provides up to $10 million in tax-exempt financing for costs associated with land or building acquisition, capital equipment purchases, construction, architectural and engineering.

Redevelopment Project Areas. A redevelopment agency can assist businesses in designated project areas with loans or grants for building-facade improvements and property-tax reimbursement incentives, offsetting development costs for land acquisition and development fees.

The agency may also assist in the construction of certain public improvements, such as waterlines, parking, streets and storm drains, in order to facilitate the development and implementation of the redevelopment plan.

In Riverside, the redevelopment agency has established six redevelopment zones, which encompass 8,741 acres or 18 percent of the land located within the city.

Enterprise Zones. A significant portion of industrial land in the city of Riverside is included in the State-designated Agua Mansa Enterprise Zone.

Businesses located within enterprise zones can take advantage of numerous state tax credits. The city of Riverside also has established three local enterprise zones to stimulate business development.

These zones provide rebates for plan check and building fees, business licenses and utility user taxes.

Recycling Market Development Zone. State-designed Recycling Market Development Zones provide incentives for businesses that either divert recyclable materials from their waste stream or use recycled material in their manufacturing process.

Companies may qualify for below-market, low-interest loans up to $2 million to finance land, building or equipment as well as working capital.

Public Utilities. Utility costs also can differ from city to city. In some areas, local public utilities can provide competitive rates and an attractive variety of their own business programs.

For example, the city of Riverside's municipal utility, Riverside Public Utilities, realized savings of 55 percent for industrial users, 50 percent for large commercial users and 40 percent for small commercial users in a recent rate comparison with investor-owned utilities. With summer here, businesses will be taking a closer look at how much they spend on electricity.

Many other programs, ranging from small-business loans to site selection assistance, may be available through an economic development department. Now more than ever, keeping business in the state will take creativity and cooperation.

By working together, cities and real estate professionals can uncover ways to reduce the cost of doing business in the state.

Keeping employers in place and encouraging greater business development is in everyone's best interest.

Climate won't be enough to save California. However, creative business packages may reduce the threat of business loss, providing all with the necessary solution and healthy business growth.

Michael Beck is deputy city manager for the City of Riverside. For more information, call the Development Department at 1-877-748-7433 or visit www.riversideca.org or e-mail [e-mail].