Would $5,000 be enough to lure you to Riverside? How about free Internet access, a reduced mortgage rate and 30 percent off utility bills on top of the five grand?

In a city better noted for its smog problem and the historic Mission Hotel, the focus now is on luring tech companies from L.A. and Orange County to the Inland Empire. Even credit unions are on board, with Altura Credit Union and Arrowhead Credit Union planning to offer the possibility of one percentage point off the qualifying mortgage rate, or offering to cover closing costs on a house for tech employees who relocate.

“We’re trying to become more of a high-tech community,” said Steve Reneker, Riverside’s chief information officer. He likes to point out that Riverside sits along the major arteries of fiber-optic cables from AT & T; and Charter Communications, the “broadband freeway” in Southern California terms. “Plus, we’re about an hour ish from anywhere,” he added.

City planners are committed to a long-term effort to revamp Riverside’s image. It just put out a “request for proposal” for a company to provide free wireless Internet service citywide, and passed an ordinance requiring new housing developments to include broadband lines to bring high-speed Internet to each house.

Though some small companies have started to populate the city’s 56-acre high tech research park and 10,000-square-foot Tech Incubator, it’s not an easy task for the city about 60 miles east of Los Angeles.

Image problems


“Riverside faces a fundamental image issue,” said real estate economics consultant Larry Kosmont. “Tech companies tend to employ what I call the ‘Starbucks caf & #233; latte crowd,’ and Riverside is still thought of as a residential and blue-collar industrial town.”

The city of 285,000 is trying to compete with other Inland Empire cities like Ontario and Rancho Cucamonga, as well as the Conejo Valley, that have been successful in luring companies with more affordable real estate prices. The median home price in Riverside is $415,000, compared to more than $545,000 in Los Angeles County. Office space too runs cheap about $1.85 per square foot, compared to roughly $2.60 in L.A.

Some small companies have made the leap. Helen Chen moved her biotech firm from Irvine to Riverside last year. With five employees working on anti-obesity drugs, Ambryx Biotechnology was losing its office space near UC Irvine. Chen had specific needs: she wanted to locate her company near a university, she needed specific lab space, and she needed a flexible lease.

“The nature of biotech is that we don’t know how long we’re going to be around,” she said. “We didn’t want to sign a five-year lease.” Irvine had become too expensive. Chen figured her other option was San Diego, but her employees lived in the L.A. area.

There was also the issue of establishing a relationship with a university.

“UC San Diego probably has a thousand other companies lined up. They’re not as inclined to work with us,” she said. “UC Riverside is in a smaller community, and they were very willing.”

Reneker is quick to point out that Riverside has three other universities and a student population of 40,000. Tech companies take note there are more than 6,000 students in engineering programs.

The city has put aside $50,000 for relocation incentives for tech workers, which, at $5,000 per employee, is not a lot. The account is expected to swell to $250,000 over the next couple of years, according to Gregory Lee, the city’s high-tech business development coordinator. The campaign is targeting smaller firms.

“Companies of 50,000 people, we’re probably not equipped to handle that,” Reneker said. “But a company of 20, 50 or 150 employees that’s what we’re trying to target.”

Chen moved to Riverside and bought a house; her employees still live in L.A. Though she’s still waiting for her relocation incentive to come through, she’s thrilled with the move. Ambryx just renewed its one-year lease.

Uphill climb


Chen admits that she gets funny looks sometimes from other biotech CEOs when they find out she’s based in Riverside. But for a small company, “sometimes it’s more important for us to keep light on the financials,” she said.

Amro Albanna founded Qmotions Inc., a company that makes motion controllers and accessories for video games, in Riverside in 2003. “I think we’re the only video game company out here,” said Albanna, who is also the chief executive. He’s had success in hiring high-tech workers for his 15-person company, especially people who don’t want to commute to Orange County or L.A., and he likes having access to the university population. Even the distance from video game companies in Santa Monica or Calabasas doesn’t bother him.

“We really don’t look at ourselves as an isolated island,” he said.

The incentives that the city is offering cash, reduced mortgages and utility bills can start to affect business decisions when the formula is right, according to Kosmont.

“There is a tipping point where someone says ‘that’s a good deal,’ particularly for new companies,” he said.

Riverside’s push is still new, reminds Jon Kraft, chairman of the Southern California Software Council. Small and mid-sized software companies often talk about the difficulty of luring executives to L.A. because the cost of living is “undoable,” so Riverside could make a lot of sense. “It hasn’t happened yet, but I can certainly see it coming,” Kraft said.

Kosmont is still skeptical. “I have not detected any kind of groundswell of interest in moving there,” he said. “I think it will be a long time before Riverside is considered a tech center.”