< Previous8 C A L I F O R N I A I N V E S T M E NT G U I DE s one of the world’s best economies — with its easy access to global markets, innovative culture and world-class workforce — California offers businesses a unique ecosystem in which to grow. We spoke with business leaders across the state about why they chose to set up shop in the Golden State. Here’s what they had to say: A by SAVA N NA H K I N G In Their Own Words T ES T I MO N I A L S “I don’t think there’s such a thing as a production paradise. California’s the right place for us because this is where our customers will be. ” — Dag Reckhorn, senior vice president of global manufacturing for electric car company Faraday Future “We have a unique cluster that is growing here. No other region in the world has so many innovative companies that are popping up in this sector. No one has as many electric bus manufacturers as we do either. ” — Judy Kruger, director of strategic initiatives and cluster development for advanced transportation and aerospace for the Los Angeles Economic Development Corp. “Southern California is a hub of the aerospace industry, and therefore we have access to a pool of highly qualified workers in the area. ” — Gary Bender, vice president of flight operations for General Atomics Aeronautical Systems Inc. “Having our customers in close proximity really helps us build our aircraft quickly. You can make decisions faster. The resources you need are available to you very quickly. ” — Bob Withrow, vice president of engineering of Scaled CompositesC A L I F O R N I A I N V E S T M E NT G U I DE 9 “Choosing where to set up production for the next chapter of the ‘Penny Dreadful’ fable was one of the most important decisions we had to make, and there were many options we looked into. Shooting in California obviously has many attractions, but without the state’s Film and TV tax credit it could become cost prohibitive. We couldn’t be happier about how things worked out or the benefits it will bring to the job market. ” — Jana Winograde, President of Entertainment, Showtime Networks Inc. “We have a very unique environment of innovation and entrepreneurship here. We give our companies permission to test freely, and we’re here to provide the support necessary to make sure their businesses are successful. ” — Karina Drees, Mojave Air and Space Port manager “Fremont is in the heart of Silicon Valley and central to growth and innovation in the medical devices industry. The City has supported us from the beginning, facilitating the buildout of our operation and connecting us with like-minded peers. ” — Shri Shetty, CEO of PrinterPrezz “Expanding our operations within the greater Modesto community, which has been supportive of our efforts from Day 1, will allow Entekra to effectively capitalize on the tremendous interest in transitioning to FIOSS from the inefficient and labor-intensive method of stick-framing houses on site. ” — Gerard McCaughey, CEO of Entekra10 C A L I F O R N I A I N V E S T M E NT G U I DE B U S I N E SS C L I M A T E O V ER V I E W Golden State Bridge Photo: Getty Images 10 C A L I F O R N I A I N V E S T M E NT G U I DEC A L I F O R N I A I N V E S T M E NT G U I DE 11 ow do you know when your business is in the right location? The answer is simple. You know it when your business is thriving. Many companies have discovered over the years that when it comes to picking a location that enables their operations to grow and prosper, no place stacks up better than California. Dag Reckhorn, senior vice president of global manufacturing for electric car company Faraday Future in Los Angeles, perhaps said it best when he recently told Site Selection editor Gary Daughters, “I don’t think there’s such a thing as a production paradise. California’s the right place for us because this is where our customers will be.” Many other firms have come to the same conclusion. While there are cheaper places in North America to locate a business, no other place on earth can match California when it comes to providing access to markets, talent, innovation, entrepreneurship and capital. The roll call of world-leading companies that call California home is lengthy and growing by the day, and many of these firms continue to invest into facility development and talent acquisition in the Golden State. In just the past year, Facebook announced a $300 million investment to expand its operations in Burlingame in San Mateo County. Google committed to invest $160 million to expand in Sunnyvale in Santa Clara County; and Lockheed Martin announced a $100 million investment into an aerospace expansion in Palmdale in Los Angeles County. Apple, LinkedIn and Twitter continue to broaden their bases of operations in California as well — but that doesn’t mean you have to be a household name to thrive in the Golden State. USF Hold Corp. recently announced a $72 million investment into its food and beverage plant in McClellan in Sacramento County; Nellson Nutraceutical LLC announced a $70 million facility investment in Ontario in San Bernardino County; and Foster Poultry Farms decided to spend $67 million to grow its food-processing operation in Livingston in Merced County. There are many reasons why so many diverse companies choose The promise of prosperity: why companies continue to invest in California. by R O N S TA R N E R H The Golden Touch 1/8 CALIFORNIA’S population (of 40 million) is equal to ONE-EIGHTH of the total U.S. POPULATION (of 328 million).repeatedly to invest in California, but at the top of the list is access to a dynamic and globally connected market. California boasts the largest economy of any U.S. state, and if it were its own country, California would claim the fifth largest economy in the world. Consider the sheer size of the California economy: • Nearly 4 million small businesses call California home. Collectively, they comprise 99.8% of the state’s companies. • The No. 1 state in the nation for agriculture, California produces more than 400 farm products and 81% of all wine sold in the U.S. • International trade from Los Angeles County’s two seaports — the Port of Los Angeles and the Port of Long Beach — accounts for more than $400 billion each year, making Southern California the dominant seaport market in North America, handling 40% of all inbound U.S. containerized freight annually. • California, with 40 million people, boasts one-eighth of the U.S. population of 328 million. While a third the size of Japan and half the size of Germany, California still produces an annual gross domestic product growth rate that outpaces both of those countries. • California overtook the United Kingdom last year to become the fifth largest economy on the planet, behind only the U.S., China, Japan and Germany. The Golden State economy today stands at a whopping $2.94 trillion. Dag Reckhorn C A L I F O R N I A I N V E S T M E NT G U I DE 13 It is important to note, however, that California is not just large; it is highly productive. According to Bloomberg, California’s publicly traded companies during the past decade returned 420%, outperforming the S&P 500’s 239% return and the China CSI 300 index’s 57%. Bloomberg also noted that revenue for more than 800 publicly traded companies in California last year grew by 23%, outpacing the 14% achieved by the rest of the U.S, the 19% percent by China, the 10% by Japan, and the 3% by Germany. Perhaps that is why Forbes magazine recently named California the No. 1 economic climate in the U.S. When it comes to high- performance industries, California scores at the top end as well. According to the Milken Institute’s 2018 State Technology and Science Index, a biennial assessment of states’ capabilities and competitiveness in a tech- focused economy, California repeated its fourth-place finish from 2016. Its score of 78.08 trailed only Massachusetts (86.25), Colorado (80.08) and Maryland (79.24). Milken also evaluated the Best-Performing Cities in the U.S., and markets in California rated highly. San Jose-Sunnyvale-Santa Clara ranked No. 2, while San Francisco-Redwood City-South San Francisco ranked fourth. Five California cities placed in the top 25. Oakland-Hayward- Berkeley checked in at No. 14, while Riverside-San Bernardino- Ontario rose five places to No. 15 and Santa Rosa jumped 25 places to No. 18.14 C A L I F O R N I A I N V E S T M E NT G U I DE G O B I Z I N T E R V I E W Compete How California Helps Companies enny Mendonca, named Director of the California Governor’s Office of Business and Economic Development on Jan. 4, comes to the job with a wealth of experience in helping businesses succeed in the Golden State. Mendonca was elected to the California Forward Leadership Council in 2010 and has served as co-chair since 2012. In 2011, CA Fwd launched the first annual California Economic Summit, and Mendonca has served as a key member of the summit’s leadership team since. In his new role, Mendonca has been tasked by Gov. Gavin Newsom to re-engineer the state’s approach to job creation and economic development to increase economic security and to restore the potential of the California Dream for all Californians. In the following interview, he discusses some of the ways he will do that. The decision was made by the Governor’s Office last year to extend the California Competes Tax Credits program for five more years. Why was that decision so important? LENNY MENDONCA:The California Competes Tax Credits program is one of California’s greatest tools for backing business and keeping them expanding in the state. Business and site development professionals around the state were strong advocates for its renewal, and it was overwhelmingly ap- proved by the California Legislature Thousands of jobs have been cre- ated by this tax credit. It includes many brand-name companies such as Lockheed Martin, DreamWorks, General Motors, Niantic — the com- pany that created Pokemon Go, plus hundreds of smaller companies. It is a concrete and tangible tool to help companies stay and compete here. L by R O N S TA R N E R New Director of GO-Biz outlines state’s approach to economic development.16 C A L I F O R N I A I N V E S T M E NT G U I DE Besides incentives, what resources in the GO-Biz toolkit are most beneficial to expanding companies in California? MENDONCA:Our Business Investment Services Unit provides confi dential, no-fee, tailored site selection services to employers, corporate real estate executives and site location consultants who are considering California for expansion. We help identify the advantages of considering California locations for business relocation and expansion by working with local partners to identify locations which suit their specifi c needs. Additionally, we provide incentive navigation services including identifying opportunities for fi nancial assistance, loan programs, tax credits and varied grant opportunities aligned with the needs of the industry and company. Our team also serves as a liaison between regulatory agencies and local governments throughout the state to enable a successful engagement within the varied communities in our great state. The Permit Assistance Unit offers comprehensive permit and regulatory compliance assistance to all businesses in California by serving as the central source of permit guidance. Our knowledgeable staff helps new business owners identify the permits needed to start a new business or expand an existing one. To help streamline the permitting process for companies looking to navigate the California regulatory environment, our team may schedule pre-application meetings between businesses and the appropriate regulatory agencies and can act as a neutral third-party facilitator between businesses and local, state, and/or federal regulatory agencies to aid in the resolution of permitting issues. All of our services are free and confi dential. Many other states often send representatives to California seeking to lure companies away. What is your response to those efforts? MENDONCA:We are delighted anytime someone wants to visit California. They eat our fantastic food and drink our wonderful wine and beer. The reality is that businesses that start here are growing both nationally and globally. We are delighted when they expand and go to the rest of the country and the rest of the world. Most still maintain their headquarters here. The truth is that we want them to expand nationally and globally. How is the wildfire recovery effort going in your state these days? MENDONCA: As the governor says, our dries are getting dryer and — Lenny Mendonca, Director, GO-Biz 22,000 Over 22,000 jobs and $625 million in loans have been created since IBank was established in 1994. Source: GO-BizNext >