CITIES BEEF UP MARKETING EFFORTS TO LURE FIRMS FROM EACH OTHER
When Health Net announced it was exploring a possible headquarters move, the city of Burbank got to work.
After researching the company’s needs, city officials produced a glossy, 16-page book that outlines, point by point, commercial developments that could accommodate Health Net’s space needs.
Although Burbank’s marketing efforts may be the most sophisticated, it is not the only city hoping to lure the health care company to its environs. The city of Thousand Oaks has invited the firm to meet with its mayor and other city officials. And Santa Clarita is working with developer Newhall Land to pitch the company as well.
As cities seek avenues to build up their economies, they are boosting marketing efforts aimed at attracting new corporate tenants, with everything from invitations for face-to-face meetings with the mayor to slick brochures outlining the community’s best features.
“Cities have become more aggressive at economic development and much more skilled,” said Larry Kosmont, president of Kosmont & Associates, a real estate consulting firm. “They’re putting their money where their mouth is.”
About 50 sites reviewed
A new corporate tenant can not only boost a city’s daytime economy, it can provide an employment base for area residents and draw new residents to the community.
Health Net, currently headquartered in 300,000 square feet of offices in Warner Center, announced last November that it had hired Cushman & Wakefield Inc. to explore other possible locations within a 30-mile radius of its current address. The company, which holds open the option of remaining at its current facility, has reviewed about 50 sites and whittled the choices down to about 10, said Lisa Haines, a Health Net spokeswoman. Requests for proposals sent to those 10 choices were expected back last week, and Health Net will then compile a short list with a final decision expected sometime this spring. Haines declined to comment on specific sites under consideration.
“Once word hit the street that we were interested in a possible headquarters location, it certainly sparked interest in a number of cities, some even out of state,” Haines said, adding that an out-of-state move has not been considered.
Although Health Net officials say they have not ruled out remaining in Los Angeles, many surrounding municipalities believe they have a competitive advantage because their tax structures are far lower than the rates the company now pays.
At the same time, Health Net, with about 2,000 employees, many skilled and well-paid, offers these cities a strong employment base. “It’s all about jobs,” said Gary Wartik, manager of economic development for Thousand Oaks. “Jobs mean economic stability.”
Thousand Oaks stepped up its recruiting efforts about a year and a half ago when it created Wartik’s position. Besides Wartik’s salary, the city spends $10,000 to $20,000 a year on marketing. “We are going to be doing more than the city has done historically,” he said.
Thousand Oaks has joined with other Ventura County cities to form the Economic Development Collaborative of Ventura County, which is working to create marketing materials to promote the area.
Making unsolicited calls
Santa Clarita is in the process of updating its marketing materials, which include a Power Point show, said Michael Haviland, economic development manager. The city’s $100,000 marketing budget is also used to promote tourism and the film industry, trying to attract location shooting.
Burbank, which has perhaps the longest history of recruiting business, works with a $250,000 annual marketing budget, said Robert “Bud” Ovrom, city manager.
City officials regularly make unsolicited calls to potential corporate tenants, work trade shows, run ads and produce customized marketing materials to support their efforts.
“We are particularly interested in looking for companies that provide, one, a lot of jobs, two, high-paying jobs, and three, we do try to push for diversity,” Ovrom said. “We go a little bit harder for Health Net than we would for another entertainment company because we don’t want to put all our eggs in one basket.”
Such targeting is becoming increasingly common, Kosmont said. “What’s changed is that cities are really developing economic development strategies,” he said. “They’re doing inventories of what they have in the community, and then they’re stepping up and saying, ‘Here’s what we’re weak on,’ and they target a program around those users.”
While many communities have mobilized to win Health Net’s affections, some are staying out of the fray. Glendale, for instance, did not have enough contiguous space within its redevelopment district to launch a recruitment effort.
