Keeping companies with brokers.

Anaheim's tally of economic development successes has grown since it began working with commercial real estate brokers. But, as city officials point out, development officials have to deliver on promises to keep the brokers interested

These days, the economic name of the game for communities throughout the nation is aggressive, effective business retention and attraction.

This is particularly true in Southern California, where cities are faced with a myriad of challenges ranging from escalating land prices to increasing corporate relocation competition from out-of-state areas.

Moreover, while the rest of the country appears to be on the road to economic recovery, the Southern California economy is still teetering on the brink, waiting for stimulus from the government and industry.

To offset economic and business challenges, Southern California cities are going to great lengths to expand their economic development efforts, gearing them toward business retention and expansion.

In most cases, communities are taking the "traditional" city-to-business method, meaning that strategies and programs are targeted directly to existing and prospective companies.

Most of the time, though, it's just too big a task for cities to effectively identify retention candidates or relocation and expansion prospects, contact the right decision makers and "make things happen" within a reasonable length of time.

Market experts

To substantially bolster the effectiveness of corporate relocation, expansion and attraction activities, cities and businesses should consider the value of working with their local commercial real estate brokerage community.

Doing so offers tremendous advantages for those that can tap into the wealth of expertise and resources offered by brokers. After all, the brokerage community's primary function mirrors the objectives of city economic development managers: to identify businesses with relocation and expansion needs and tailor packages to meet them.

There are a number of other strong reasons for directing business retention and attraction strategies to the brokerage community.

Perhaps the most obvious reason to work with brokers is that few know the relocation and expansion market better.

Indeed, these real estate professionals spend the vast majority of their day dealing with property owners who have commercial and industrial space to lease or tenants who need new or upgraded facilities.

In other words, brokers are relocation and expansion specialists keenly aware of which businesses are growing, and can quickly hook cities up with corporate decision makers when appropriate opportunities arrive.

Valuable representatives

Simply put, brokers can serve as valuable representatives for a city's business community. This, of course, is often contingent on the community's visible commitment to establishing a mutually beneficial, profitable and long-lasting relationship.

Communities that demonstrate a willingness to pursue and complete leases or sales will find that brokers will tend to bring more prospects to a city because they know there's a good opportunity for completing a transaction.

"More Than Just Lip Service" is a well-worn adage, but one that rings true when talking about business retention and attraction efforts and the brokerage community.

City economic development managers must have the ability to deliver on promises of programs, incentives or other opportunities used as a carrot to entice brokers to bring their clients to the dealmaking table.

The bottom line here is that brokers are quick to distinguish action from mere lip service and will react accordingly.

There are many strategies that cities and communities can take to develop lasting, beneficial relationships with the brokerage community.

Types of approaches

For instance, brokers can be tapped through formal and informal presentations, direct mail, brochures, letters, roundtables and other means.

Of these, probably the most effective approach is making brief presentations to individual firms by broker groups -- i.e. office, industrial and retail. These presentations demonstrate why a community is a viable business location, how a specific area might be more desirable or advantageous, and what a city is doing to assist brokers and their clients.

Face-to-face visits such as these accomplish several things. First and foremost, they allow for personal interaction that goes far beyond any letter, phone call or brochure. Such presentations can be followed by a question-and-answer period, which can then lead to candid discussions about issues and potential leads.

A recent presentation by the city of Anaheim's economic development and public utilities team to CB Commercial's Anaheim office is a good example of how this works. Three brokers had major 100,000-square-foot-plus users looking for space in Orange County, and Anaheim put itself on the "short list" by showing how its incentive packages can help make businesses more competitive.

Secondly, the presentations, because they take time and effort, underscore the commitment of a city to work with the brokerage community. This is doubly true when brochures, color fliers, reprints or other materials are provided for continuous use by brokers.

Case studies

Cities with the resources and commitment to work with the brokerage community, then, can place themselves in prime position to reap the rewards of business retention and attraction activities.

Here are just a few brief case studies that demonstrate how it can all work:

Maruchan Inc., Irvine Spectrum. Here, the City of Irvine teamed up with Collins Fuller, a Newport Beach-based brokerage, to keep Maruchan, Inc., an Irvine-based Japanese noodle maker with more than 300 employees, from relocating its manufacturing facilities out of state.

Collins Fuller worked together with the Irvine city manager and other officials to eliminate red tape by fast tracking permits and equipment approvals.

The City, on recommendations by Collins Fuller, even flew engineers to a Maruchan plant in Virginia to ensure equipment that would be used in the new facility would meet California's tough regulatory standards.

The result: Maruchan purchased 32 acres in the Irvine Spectrum office and industrial complex, the largest Irvine land sale in a decade, for an estimated $14 million. The company is also considering plans to consolidate two smaller Irvine manufacturing sites at the new location and may soon add 100 jobs.

Saving a company

Micro Technology, Anaheim. Micro Technology is an Anaheim-based international computer systems management and manufacturing company with more than $200 million in annual sales, with an eye on expansion.

The company planned to relocate its Anaheim headquarters to Nevada or Colorado to reduce rising operational costs and enhance its ability to compete globally. Anaheim's Community Development and Public Utilities departments teamed with CB Commercial to sell Micro Technology executives on the city's incentives, including redevelopment loans, utilities rebates, job training and more.

The result: Micro Technology chose to remain and expand in Anaheim by signing a 10-year lease for a new, larger 130,000-square-foot facility.

TRW Orange. In this instance, the city of Orange worked with Long Beach-based Matlow-Kennedy Corp. to keep major employer TRW from moving to another state.

Matlow-Kennedy played a primary role in the negotiation process and assisted with the development of incentives such as rental subsidies that made staying in Orange financially feasible for the company. The result: TRW chose to remain in Orange and renew its lease for office facilities at The City commercial complex.

Reversing the process

Along with the above "city-working-with-brokers" examples, it's important to note that the same process can work effectively in reverse.

Put another way, businesses considering relocation or expansion options are wise to push for their own brokers or site selection specialists to approach cities about possible assistance, incentives or other programs. Being aggressive and coming to a community for help can often pay dividends for companies.

One example is BACE Plastics Group Inc., a rapidly expanding international plastics manufacturing company based in Anaheim for more than 35 years.

The company, which employs more than 350 people and generates in excess of $26 million annually, was on the verge of relocating out of state due to Southern California's costly business climate. Perhaps even more significantly, corporate decision-makers perceived that the area was unresponsive to its competitive business needs.

However, the company principals, with assistance from Scher-Voit, came directly to the city for help. Anaheim's Community Development and Public Utilities departments responded immediately, providing BACE Plastics with a mix of rent subsidies, utilities and redevelopment rebates and more.

The upshot was that by teaming with Scher-Voit and approaching the city, BACE Plastics was able to stay in Anaheim and expand to a new, 165,000-square-foot corporate and manufacturing headquarters.

Especially in these tough economic times, communities need to cut to the chase and communicate directly with the people who are immersed in business retention, expansion and attraction every day -- the commercial real estate brokers.

Clearly, working with the brokerage community can pay big dividends for savvy cities committed to economic development.

The key is to recognize the many opportunities that can be generated by a city-brokerage partnership and capitalize on them.

Elisa Stipkovich is executive director of Community Development and Edward Aghjayan is general manager of Public Utilities for the City of Anaheim. The two are spearheading their departments' "Powerful Partnership For Business" efforts designed to enhance corporate retention, attraction and expansion activities.