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Packard Bell Will Leave Southland, Executive Says : Computers: Palmdale, which had sought to lure the firm with incentives, has been ruled out in favor of Sacramento.

August 16, 1994|JOHN SCHWADA | TIMES STAFF WRITER

Packard Bell, the computer giant temporarily quartered in Westlake Village, has ruled out relocating to Palmdale and thus will leave Southern California, a company executive said Monday.

However, the company is likely to move its 1,500-member work force to Northern California. Packard Bell Vice Chairman Jeff Scheinrock told an Assembly panel that if the state passes legislation creating an enterprise zone in Sacramento, his firm will move to that city and end its further consideration of relocating to Salt Lake City or Portland, Ore. Such enterprise zones offer tax breaks to companies that hire local residents and invest heavily in equipment.

The Assembly's Utilities and Commerce Committee, which had been hearing testimony on the creation of additional enterprise zones, subsequently voted 10 to 0 to recommend creation of such an area in Sacramento. Passage by the full Legislature is likely.

The computer firm said it eliminated Palmdale in part because of the earthquake risk in that Antelope Valley city. The disclosure puts an end to Palmdale's year-long courtship of Packard Bell.

The personal computer manufacturer announced in late 1993 that it had outgrown its six Chatsworth facilities and in early January announced that it would move more than a quarter of its work force to Salt Lake City.

Subsequently, damage caused by the Jan. 17 Northridge quake forced the firm to shift its operations to Westlake Village and Camarillo.

During the past year, Palmdale, with help from Los Angeles County officials, had put together an elaborate array of incentives worth tens of millions of dollars to lure Packard Bell.

But in his testimony Monday, Packard Bell's Scheinrock disclosed publicly for the first time that Palmdale has been eliminated from consideration as a site.

A Packard Bell memo to Assemblywoman Gwen Moore (D-Los Angeles), who chairs the committee that voted to establish the Sacramento enterprise zone, said Palmdale posed an "unacceptable earthquake risk for (a) sole U.S. manufacturing location." The memo also claimed Palmdale could not provide Packard Bell with the 400,000-square-foot interim facility it would need.

The same memo identified a former Army depot in Sacramento as the site Packard Bell is considering.

Monday's disclosure hit Palmdale leaders hard.

"It was kind of a huge shock to us," said an aide to Assemblyman R.J. (Pete) Knight (R-Palmdale). Knight has been part of the team boosting Palmdale's bid with $40 million of incentives.

"With good old Packard Bell, the dance is over," sighed Al McCord, Palmdale's economic development director. "We lost, and that's part of the competitiveness in economic development."

Among the powerful incentives Palmdale was ready to offer Packard Bell were the gift of 50 acres of land, valued at $7.5 million; $4 million in housing assistance to help Packard Bell employees move to Palmdale; $10 million in tax-exempt bonds to help build Packard Bell facilities, and low-cost financing to help Packard Bell subcontractors construct their plants in Palmdale. Even local Palmdale businesses agreed to offer furniture and other discounts to Packard Bell employees.

Meanwhile, news that Packard Bell was ready to go to Sacramento was greeted warmly by Gov. Pete Wilson's office.

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