In a development becoming nearly as commonplace as sunshine and traffic, another company has fled the greater Valley area in favor of a more favorable business climate. The latest defection comes from Valencia-based three dimensional printing systems manufacturer, 3D Systems Corp., which recently announced that it is moving approximately 100 local jobs and its corporate headquarters to Rock Hill, S.C. The company claimed that the decision to move to the greater Charlotte, N.C. area came after an extensive review of various locations and the cost-savings benefits that moving might bring. It maintained that while some of the employees would be making the move east, others would not. According to York County, S.C., documents, the jobs’ salaries are expected to average $80,000 per year. “There’s a number of factors that play into a company’s decision to relocate,” Elizabeth Goode, 3D System’s director of corporate development, said. “We looked for a business friendly environment where we could achieve sustained operating costs and find improved employee development and employee retention rates. We wanted to become an employer of choice in the Charlotte region.” Goode also added that the skyrocketing cost of real estate in Southern California, and workers’ subsequent inability to purchase homes, also factored in 3D’s decision. “In order to be able to attract people into a region, you want people to be able to buy a home,” Goode said. “You need to give them the freedom to be able to live near where they work.” The company said that it will establish an initial operation in Rock Hill by the year’s end and complete the headquarters’ relocation by next September. While Goode wasn’t aware if the company had had any contact with local officials before deciding to move, it is clear that South Carolina officials did everything in their power to sweeten the deal for 3D. Last week, York County Council members agreed to offer 3D a fee-in-lieu-of-taxes-deal that will cap its property tax assessment at six percent, instead of South Carolina’s standard 10 percent. The company also qualifies for state tax breaks that would rebate part of employees’ state income tax withholdings to the company. The County Council agreement requires the company to invest at least $10 million by the end of 2006 to qualify for the county incentive deal. With the move, 3D expects to save more than $2.5 million yearly in expenses, beginning in 2007. With these types of cost savings on the way, analyst Dennis Wassung of Adams Harkness Inc. was bullish on the move. “It will help them on the cost side of the equation. That was one of the big goals of them doing this,” Wassung said. “They were able to get some tax incentives from making the change and I’d say the L.A. area is definitely not the most inexpensive place to employ people. It’s a more competitive job market in the L.A. area in terms of high tech, and this move enables them to perhaps have better access to potential employees.” The new headquarters will be a build-to-suit facility that 3D will lease. The park is owned and managed by the Rock Hill Economic Development Corp. Another factor that enticed 3D was an agreement with York Technical College which will work with them to create a training center for 3D’s customers, resellers and employees. 3D is the latest company to bolt the area, following Tekelec’s announcement earlier this year that it would relocate to North Carolina, as well as Countrywide Financial’s earlier announcement that it would cease to expand locally due to the area’s negative business climate. Most recently, Nissan of North America announced that it would be moving its North American headquarters from Gardena to Tennessee. “The drumbeat is steadily getting louder and hopefully it’s going to turn out to be a wake up call to the people in Sacramento,” Jack Kyser, the chief economist for the Los Angeles Economic Development Corporation, said. “These are good quality jobs and this is very bad news. We’ve got to step up our efforts to talk to the community. When someone gets an offer like this, they need to let Los Angeles County officials know about it, to see if they can match it.” Larry Mankin, the president and CEO of the Santa Clarita Chamber of Commerce, lamented the loss of these jobs, but said that there was little that local officials could have done to prevent 3D’s move. “This is one of those instances where there is nothing that we could’ve done as a community to stop the relocation,” Mankin said. “It almost had to do exclusively with state of California issues like workers comp, high taxes and bureaucratic red tape. Obviously, we’re very sorry to see any company leave our market.”
