Quake doesn't shake local firms' plans to remain here; out-of-state agencies avoid cashing in on the disaster.

Out-of-state agencies avoid cashing in on the disaster

No signs are surfacing that the Jan. 17 earthquake is further spurring Southland companies to leave the area, while out-of-state agencies say they're not stepping up recruiting efforts to take advantage of the situation. And at least one local business development official noted there also has been no falloff in the number of businesses pursuing relocation into the region.

According to Jack Kyser, chief economist with the Economic Development Corp. of Los Angeles County, "The companies we have been working with (three he would not name) are still interested in moving here.

"What you have to remember is that, no matter where you go, particularly in a major urban area, there is going to be the potential of something happening that is beyond your control. Every part of the country has natural disasters to cope with," said Kyser.

A survey of officials of a handful of states and regions active in business relocation indicated there has been little or no increase in the number of inquiries from Southland companies considering either moving or expanding outside the county.

And the organizer of a previously scheduled business relocation trade show this week in Orange County said there has not been a significant increase in interest in the event since the earthquake.

In addition to the apparent lack of any immediate outward migration, recruiters from other regions said they have so far refrained from moving into Los Angeles County with huge marketing efforts. For the most part, they said it would be in bad taste to try to capitalize on the disaster.

"We don't want to be perceived as vultures," said Jon Krebs, assistant deputy secretary of the New Mexico Economic Development Department.

Most other recruiters echoed Krebs's sentiments but they also added that the situation could change over the next couple of weeks. They said as businesses assess their damage and the potential for further earthquakes and their consequences, many may well decide to investigate leaving the area.

And, they added, recruiting agencies may also re-evaluate their decisions to refrain from using the earthquake as a sales tool.

Officials of a half dozen private and public recruiting agencies active in the Los Angeles County market were contacted by the Business Journal, and only one said he had noticed a marked increase in telephone or written inquiries from Southland businesses.

Dennis Stein, president of the Nevada Development Authority, said the agency has received between 15 and 20 inquiries from Southland companies that cited the earthquake as the catalyst for their interest in possibly relocating to southern Nevada. The authority is a private/public agency that promotes business relocation to southern Nevada, primarily Las Vegas.

"I suspect that most of these companies had been thinking about moving out before and this was the final straw," said Stein.

He said he suspected that at least a couple of the calls will result in businesses leaving the Los Angeles area. Stein described the companies as businesses with fewer than 100 employees.

Last year the authority received commitments from 43 companies to relocate to southern Nevada, and about half of those were from businesses in Southern California.

The vice president of the Economic Development Authority of Western Nevada, which represents the northern part of the state including the Reno area, said there has not been a noticeable increase in inquiries from Los Angeles businesses. "I think we have received one call since the earthquake," said Bob Shriver.

In recent years, many businesses have left Los Angeles County for various reasons, including high operating costs, governmental red tape and deteriorating living standards. As a result, many out-of-state regions and communities have begun active recruitment efforts in the Southland, offering lucrative move-in packages that include tax breaks, free land and job-training programs. Only one official of the recruiting agencies in the informal Business Journal survey -- which included areas of Arkansas, New Mexico, Nevada, Oregon, Utah and Idaho or entire states -- said that agency had pulled back marketing efforts in Los Angeles as a result of the earthquake. But none of the agencies said it had increased efforts because of the quake.

A spokeswoman for the Arkansas Industrial Development Commission, a state agency, said two sales mission to the area scheduled for last week and this week had been canceled. She said the agency canceled the missions because it did not want to interfere with clean-up efforts.

In addition, the spokeswoman said, "We don't want to be perceived as taking advantage of the situation."

This week, on Feb. 7 and 8, the third annual Southern California Business Expansion/Relocation Expo will be held in Anaheim. The show, which had been scheduled before the earthquake, brings together recruiters with Southland businesses thinking of relocating or expanding out of the area.

Dennis Carruth, the show's organizer, said 80 recruiting agencies will exhibit at the show, an increase of about 10 from last year when representatives from about 500 area businesses attended the event.

"So far, I haven't seen any impact at all from the earthquake on attendance. There hasn't been a noticeable increase in interest on the part of either exhibitors or attendees (local businesses)," said Carruth.